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As the coronavirus pandemic recedes and government relief kicks in, fresh evidence of the economy’s revival is expected Thursday morning when the government releases its estimate of first-quarter growth.
Experts are looking for a pickup in activity after the economy’s tepid performance in the fourth quarter, when an increase in coronavirus cases and tightened restrictions hampered business and consumer spending.
The consensus of analysts polled by Bloomberg is that the report will show gross domestic product expanded 1.6 percent, up from 1.1 percent in the final three months of 2020. That is equivalent to an annualized rate of 6.7 percent.
The pickup in vaccination efforts — 43 percent of Americans have had at least one shot — combined with $1,400 stimulus payments to most Americans has set the stage for a strong rebound, with even faster growth expected in the months ahead.
“We’re running on all cylinders in terms of economic activity,” said Scott Anderson, chief economist at Bank of the West in San Francisco. “People are anxious to get out and return to their normal lives, and there’s pent-up demand.”
Overall economic activity should return to prepandemic levels in the current quarter, Mr. Anderson said, while cautioning that it will take until late 2022 for employment to regain the ground it lost as a result of the pandemic.
Still, the labor market does seem to be catching up. Last month, employers added 916,000 jobs and the unemployment rate fell to 6 percent.
Tom Gimbel, chief executive of LaSalle Network, a recruiting and staffing firm in Chicago, said: “It’s the best job market I’ve seen in 25 years. We have 50 percent more openings now than we did pre-Covid.”
The new data should also provide clues to what’s driving growth, with the components behind the expansion changing as life gradually returns to normal.
Credit…James Estrin/The New York Times
After unemployment claims declined to pandemic lows for two straight weeks, a new reading from the Labor Department on Thursday will put the labor market into sharper focus.
The data has been volatile from week to week, but most economists expect initial claims to decline over the coming months.
“We’re not quite at a full reopening yet,” said Daniel Zhao, senior economist with the career site Glassdoor. “But the light is there at the end of the tunnel.”
Although weekly jobless claims remain above levels reached before the pandemic, vaccinations and warmer weather are offering new hope.
“The labor market is definitely moving in the right direction,” said AnnElizabeth Konkel, an economist at the online job site Indeed. Still, she cautioned that industries like tourism and hospitality would probably remain depressed until the pandemic was firmly under control. She also stressed that child care obligations might be preventing people ready to return to work from seeking jobs.
“We still are in a pandemic — the vaccinations are ramping up, but there is that public health factor still,” Ms. Konkel said. “We’re not quite there yet.”
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Airbus announced Thursday that it had returned to a profit in the first quarter following a 1.1 billion euro loss last year because of the coronavirus pandemic, but its top executive warned that the economic toll would continue.
“The first quarter shows that the crisis is not yet over for our industry, and that the market remains uncertain,” Guillaume Faury, chief executive of the world’s largest airplane maker, said in a statement.
Airbus booked a net profit of 362 million euros ($440 million) between January and March, compared with a loss of 481 million euros a year earlier, as cost-cutting measures — which included more than 11,000 layoffs announced last year for its global operations — bolstered the bottom line. Revenue fell 2 percent to 10.5 billion euros.
Airbus delivered 125 commercial aircraft to airlines in the three-month period, up from 122 a year earlier. Over all, Airbus delivered 566 aircraft to airlines in 2020, 40 percent less than expected before the pandemic.
Airbus has previously warned that the industry might not recover from the disruption caused by the pandemic until as late as 2025, as new virus variants delay a resumption of worldwide air travel.
Given the uncertain outlook, Airbus won’t ramp up aircraft deliveries this year. The company said it expected to deliver 566 aircraft on back order from airline companies, the same number as last year.
It maintained its forecast for an underlying operating profit of two billion euros for the year.
Credit…Chang W. Lee/The New York Times
Amazon will increase pay between 50 cents and $3 an hour for half a million workers in its warehouses, delivery network and other fulfillment teams, the company said on Wednesday.
The action follows scrutiny of Amazon from lawmakers and an unsuccessful unionization push that ended this month at its large warehouse in Alabama. In 2018, Amazon raised its minimum pay to $15 an hour. In recent months, it has publicly campaigned to raise the federal minimum to $15, too.
Amazon has been on a hiring spree during the pandemic. As more customers ordered items online, the company added 400,000 employees in the United States last year. Its total work force stands at almost 1.3 million people.
Amazon typically revaluates wages each fall, before the holiday shopping season. But this year, it moved those changes earlier, said Darcie Henry, an Amazon vice president of people experience and technology. The new wages will roll out from mid-May through early June. Ms. Henry said the company was hiring for “tens of thousands” of open positions.
Jeff Bezos, Amazon’s founder and chief executive, recently told shareholders in his annual letter that he recognized the company needed “a better vision for how we create value for employees — a vision for their success.” He said that Amazon had always striven to be “Earth’s Most Customer-Centric Company,” and that now he wanted it to be “Earth’s Best Employer and Earth’s Safest Place to Work” as well.
Amazon is scheduled to report quarterly earnings on Thursday.
Gary Gensler’s tenure leading the Securities and Exchange Commission is off to a rocky start: Alex Oh, who he named just days ago to run the regulator’s enforcement division, has resigned following a federal court ruling in a case involving one of her corporate clients, ExxonMobil.
In her resignation letter on Wednesday, Ms. Oh said the matter would be “an unwelcome distraction to the important work” of the enforcement division.
Ms. Oh’s resignation letter followed a ruling on Monday from Judge Royce C. Lamberth of the Federal District Court for the District of Columbia over the conduct of Exxon’s lawyers during a civil case involving claims of human rights abuses in the Aceh province of Indonesia.
According to Judge Lamberth’s ruling, Exxon’s lawyers claimed without providing evidence that the plaintiffs’ attorneys were “agitated, disrespectful and unhinged” during a deposition. He ordered Exxon’s lawyers to show why penalties were not warranted for those comments.
The ruling did not single out any lawyers by name. Ms. Oh was one of the lead lawyers for Exxon.
The judge’s order also granted the plaintiffs’ motion that Exxon pay “reasonable expenses” associated with litigating their request for sanctions and with an accompanying motion to compel additional testimony from Exxon related to the deposition.
Ms. Oh’s resignation letter did not mention the Exxon case by name, but a person briefed on the matter confirmed that the ruling from Judge Lamberth had prompted her to step down.
Ms. Oh, a former federal prosecutor in Manhattan who worked for the elite firm Paul, Weiss for nearly two decades, was picked by Mr. Gensler to oversee the S.E.C.’s 1,000-attorney enforcement division on April 22. The same day, she filed a notice with the court in the Exxon case saying she had withdrawn from the matter because she had resigned from the firm to join the federal government.
The civil litigation involving Exxon is nearly two decades old and involves allegations by the plaintiffs that Exxon’s security personnel “inflicted grievous injuries” on them. The lawsuit was brought under the federal Alien Tort Claims Act, which enables residents of other countries to sue in the United States for damages arising from violations of U.S. treaties or “the law of nations.”
Mr. Gensler said in a news release that Melissa Hodgman, who had been the enforcement division’s acting chief since January, will return to that position. Ms. Hodgman has been an enforcement attorney with the agency since 2008. He thanked Ms. Oh for her “willingness to serve the country.”
Ms. Oh could not immediately be reached for comment.
Brad Karp, chairman of Paul, Weiss, said the firm would not comment on the matter because it involved ongoing litigation. “Alex is a person of the utmost integrity and a consummate professional with a strong ethical code,” he added.
Ms. Oh is a highly respected lawyer, but her selection had been criticized by the Revolving Door Project, a good-government group, because she had been in private practice for so many years and had defended some of the largest U.S. companies.
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Apple said on Wednesday that its profits more than doubled to $23.6 billion in the most recent quarter. Apple said its revenues soared by 54 percent to $89.6 billion. As usual, the main driver of Apple’s success was sales of the iPhone, which rose by 66 percent to $47.9 billion, its steepest increase in years. In the latest quarter, iPhones accounted for 54 percent of Apple’s revenues.
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Facebook said on Wednesday that revenue rose 48 percent to $26.2 billion in the first three months of the year, while profits nearly doubled to $9.5 billion. Advertising revenue, which makes up the bulk of Facebook’s income, rose 46 percent to $25.4 billion. Nearly 3.5 billion people now use one of Facebook’s apps every month, up 15 percent from a year earlier.
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Ford Motor said on Wednesday that the global shortage of computer chips will take a greater toll on its business than previously expected and would likely cut its vehicle production in the second quarter by about half. Ford expects the shortage to lower its operating profit this year by $2.5 billion, to between $5.5 billion to $6.5 billion. The company made a $3.3 billion profit in the first quarter, a turnaround from a year ago when the company lost $2 billion as the coronavirus pandemic was starting to shut down much of the world’s economy.
Credit…Sara Hylton for The New York Times
Before the pandemic, when suppliers raised the cost of diapers, cereal and other everyday goods, retailers often absorbed the increase because stiff competition forced them to keep prices stable.
Now, with Americans’ shopping habits having shifted rapidly — with people spending more on treadmills and office furniture and less at restaurants and movie theaters — retailers are also adjusting, Gillian Friedman reports for The New York Times.
The Consumer Price Index, the measure of the average change in the prices paid by U.S. shoppers for consumer goods, increased 0.6 percent in March, the largest rise since August 2012, according to the Bureau of Labor Statistics. Procter & Gamble is raising prices on items like Pampers and Tampax in September. General Mills, which makes cereal brands including Cheerios, is facing increased supply-chain and freight costs that could translate into higher retail prices for customers.
At the beginning of the pandemic, companies were focused on fulfilling demand for toilet paper, cleaning supplies, canned food and masks, said Greg Portell, a partner at Kearney, a consulting firm. The government was watching for price-gouging, and customers were wary of being taken advantage of.
Now that the economy is beginning to stabilize, companies are starting to rebalance pricing so that it better fits their profit expectations and takes into account inflation. “This isn’t an opportunistic profit-taking by companies,” Mr. Portell said. “This is a reset of the market.”
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