Millions more are expected to be added to the jobless count.
As the economic toll from the coronavirus pandemic mounts, the federal government is expected to report on Thursday that millions more people are without a job.
The Labor Department will report at 8:30 a.m. Eastern the number of new unemployment claims that were filed in the week that ended April 18. Wall Street analysts expect 4.5 million workers to be added in the tally, on top of the 20 million who filed in the previous four weeks. The report is likely to intensify the debate over when to lift restrictions that have helped fight the virus’s spread but placed the economy in a stranglehold.
“At all levels, it’s eye-watering numbers,” said Torsten Slok, chief international economist at Deutsche Bank Securities. As large as the figures have been, they do not capture the full extent of layoffs — or the cascade of economic troubles that they have set in motion.
Problems responding now to the waves of jobless claims will affect the shape of the recovery when the pandemic eases, Mr. Slok said. Laid-off workers need money quickly to pay for rent, groceries and credit card bills. If they cannot do so, he said, the hole that the larger economy has fallen into “gets deeper and deeper, and more difficult to crawl out of.”
Global markets were mixed in muted trading on Thursday, as questions about the fate of the global economy overshadowed a big rally on Wall Street.
Futures markets were predicting a flat opening on Wall Street.
Investors didn’t appear impressed by a rise of more than 2 percent on Wednesday in the S&P 500 index, the Wall Street benchmark. That increase was driven partly by a rise in crude oil prices after several days of sharp drops. The rise in crude oil prices continued on futures markets in Asia on Thursday, gaining more than 6 percent.
Still, investors were held back by the prospect of more bad news from corporate earnings reports expected on Thursday. Those reports will likely reveal even more of the business and economic impact of the global coronavirus outbreak. Reflecting the skepticism, prices for U.S. Treasury bonds rose, indicating a lack of interest in investments considered risky.
In Japan, the Nikkei 225 index ended 1.5 percent higher. Hong Kong’s Hang Seng Index rose 0.3 percent. South Korea’s Kospi gained 1 percent, despite new economic figures released on Thursday showing the country’s economy in the first quarter contracted by the sharpest rate in more than a decade.
But in mainland China, the Shanghai Composite index fell 0.2 percent, while Australia’s S&P/ASX 200 index fell 0.1 percent.
In London, the FTSE 100 index was down 0.2 percent in early trading. Germany’s DAX was down 0.4 percent, while France’s CAC 40 gained 0.1 percent early.
With the economy shut down and tens of millions out of work, the energy for protest is high. Many civil rights activists are angry that black and Latino people are being disproportionately killed by the virus. They’re angry that service workers already struggling with bills were the first to lose their jobs. They’re angry that corporations are getting bailouts while small businesses wither.
It’s a moment that might otherwise give rise to demonstrations in the streets. Instead, people are generally shut in by government order, or simply fear getting within six feet of another human. There have been hashtags (#CancelRent) and email blasts and grainy video rallies, but those methods are more easily ignored by bankers, landlords and elected officials.
So activists have turned to other tactics, like painting slogans on cars and putting recorded chants on the internet.
“Direct action is so much about people putting their bodies on the line,” said John Washington, an organizer in Buffalo with People’s Action, a national network of local advocacy organizations. “In a way, Covid has stolen that.”
After years of working almost exclusively on long-term projects and pushing day-to-day management to his deputies, Jeff Bezos, 56, has turned back to the here-and-now problems facing Amazon, the company he founded and grew into a global behemoth.
As the giant retailer grapples with a surge of demand, labor unrest and supply chain challenges brought on by the coronavirus, he is holding daily calls to help make decisions about inventory and testing, as well as how and when — down to the minute — Amazon responds to public criticism. He has talked to government officials. And in April, for the first time in years, he made a publicized visit to one of Amazon’s warehouses.
“For now, my own time and thinking continues to be focused on Covid-19 and how Amazon can help while we’re in the middle of it,” Mr. Bezos wrote to shareholders last week.
But Amazon is one of the few companies that have benefited financially from the crisis. Because of all the customer demand, its shares have hit record highs. That has made Mr. Bezos, the wealthiest man in the world, $25 billion richer since early March.
It could be years before the U.S. economy fully recovers from the pandemic, but some airline and auto industry executives are starting to ask what it will take to reopen their businesses.
Delta Air Lines, American Airlines, United Airlines and Southwest Airlines have already aggressively advertised the precautions they are taking to lure back passengers, from fogging cabins with disinfectant to restricting food service to blocking out middle seats.
The chief executive of Delta, Ed Bastian, told financial analysts on Wednesday his company was prepared to “make whatever changes to the business model that will be necessary.” That could mean federally administered “immunity passports” or spacing out seats or running flights with fewer passengers.
“This recovery is going to take several years,” Mr. Bastian said. “It’s going to be multi-phased, it’s going to be choppy along the way. We’ll have opportunities to test all those theses and see what it takes.”
But what works for some airlines may not work for others. Michael O’Leary, the chief executive of low-cost carrier Ryanair, told The Financial Times on Wednesday that the airline would not return to flying with middle seats empty.
Automakers are also making plans to turn the lights back on. Volkswagen said on Wednesday it has called employees back to work at its plant in Chattanooga, Tenn., on May 3, making the company one of the first major automakers to resume manufacturing since much of the industry shut down because of the coronavirus pandemic.
The company said it had spent several weeks putting in place health and safety measures to protect the 3,800 people who work at the plant, which makes the Atlas sport-utility vehicle. Volkswagen stopped production at the plant on March 21 after state and local officials issued stay-at-home orders. Gov. Bill Lee of Tennessee said on Monday he would let his order for people to stay home expire on April 30.
General Motors, Ford Motor and Fiat Chrysler have not yet called factory workers back, and continue to negotiate with the United Automobile Workers union over safety measures.
The French carmaker Renault plans to begin limited production at a plant outside Paris on Monday. The company resumed production last week at factories in Portugal and Spain that make engines and gearboxes.
Renault’s plant in Flins, about 25 miles west of Paris, will be the first vehicle assembly plant in France to reopen. Initially only about one-quarter of the work force will report for duty to reduce the risk of infection, a spokeswoman said.
South Korea’s economy shrank at its fastest rate since the 2008 financial crisis during the first three months of the year, government data showed Thursday, as domestic consumption and trade reeled from the impact of the coronavirus pandemic.
The economy contracted a seasonally adjusted 1.4 percent from the previous quarter, according to preliminary data from the Bank of Korea. The economy expanded by 1.3 percent year on year.
South Korea was among the first countries hit hard by the coronavirus, after an outbreak in a church in the city of Daegu led to the rapid spread of the pathogen. Nevertheless, widespread testing in South Korea has largely kept the outbreak under control and helped the country avoid having to institute the kinds of large-scale lockdowns that have caused enormous economic damage in China, Europe and the United States.
Even so, domestic consumption in South Korea dropped by 6.4 percent during the first quarter, the data said, as people stayed home to avoid getting sick. Exports fell by 2 percent despite an increase in shipments of semiconductors, one of the pillars of the country’s economy.
Although the damage to the economy this quarter was relatively mild compared with other countries, it is likely to deepen next quarter, when the data will more clearly reflect the sharp drop in demand from other countries hard hit by the virus, said Lee Geun-tae, a senior research fellow at the LG Economic Research Institute.
The extraordinary action by the central bank was a reaction to fears that hundreds of billions of euros in corporate bonds were on the verge of being downgraded to junk status, because the companies that issued the debt may not be able to repay it.
The mass downgrades could cause severe financial turmoil because, under the old rules, banks that hold the debt could no longer use it as collateral to borrow from the central bank.
Eurozone banks can borrow as much money as they want from the European Central Bank, but must post collateral. Previously the central bank did not accept junk bonds, but it said Wednesday it would allow the debt as collateral as long as it was still rated investment grade on April 7.
The central bank said in a statement that an ample supply of collateral “is crucial for banks to provide funding to firms and households during the current challenging times.”
Stocks rallied on Wednesday and oil prices reversed some of their tremendous losses as investors regrouped after two days of turmoil in financial markets.
The S&P 500 climbed more than 2 percent, and shares in Europe were also higher. The benchmark for American crude — which had been hammered out of concern that a glut in supply would soon overwhelm storage facilities — bounced back more than 20 percent.
Investors also rallied behind a handful of earnings updates that showed companies had not done as poorly in the first three months of the year as some had expected. After Snap, the owner of Snapchat, reported a surge in revenue and user growth, its shares rallied along with those of Twitter and Facebook.
Similarly, shares of some restaurant chains jumped after Chipotle Mexican Grill said on Tuesday that digital and delivery sales driven by the coronavirus crisis soared. Executives at Chipotle also said the company was preparing to reopen stores, as states lift stay-at-home restrictions. Chipotle, which agreed on Tuesday to pay $25 million to resolve criminal charges accusing the fast food company of serving tainted food from 2015 to 2018, was the best performer in the S&P 500 on Wednesday, with a gain of 14 percent.
Investors had other news to consider. The Senate on Tuesday passed a bipartisan $484 billion coronavirus relief package that would replenish a depleted loan program for distressed small businesses and provide funds for hospitals, states and coronavirus testing.
The gains came after the S&P 500 had fallen 3 percent on Tuesday, its sharpest decline in three weeks in a drop that had suggested a marked shift in sentiment among investors who had otherwise been buying stocks with every sign of progress in the fight against the coronavirus, effort to reopen the economy or indication that Washington would spend more to help. That optimism was briefly shattered on Monday when oil prices collapsed as energy traders panicked about disappearing demand for petroleum and the fact that there were few places left to store all the crude still being pumped.
But on Wednesday, some stability returned to the energy market, with the price of West Texas Intermediate crude, the American benchmark, rebounding. Shares of companies in the energy industry also rallied.
Catch up: Here’s what else is happening.
Alcoa said Wednesday that it would stop production at its Intalco smelter in Ferndale, Wash., and lay off employees because of declining demand for its products. The aluminum maker had already cut production at that plant and others, and it said that about 30 percent of its global smelting capacity was now idle.
Reporting was contributed by Patricia Cohen, Ben Dooley, Conor Dougherty, John Eligon, Karen Weise, Su-Hyun Lee, Vindu Goel, Niraj Chokshi, Jack Ewing, Carlos Tejada, Neal E. Boudette and Daniel Victor.