Exclusive: Coronavirus crisis could destroy far more than 25 million jobs – ILO official

GENEVA (Reuters) – The number of jobs lost around the world due to the coronavirus crisis could be “far higher” than the 25 million the International Labour Organization (ILO) estimated just a week ago, a senior ILO official said on Thursday.

The United Nations agency said on March 18 that, based on different scenarios for the impact of the pandemic on global economic growth, estimated the global ranks of jobless would rise by between 5.3 million and 24.7 million.

However, Sangheon Lee, director of the ILO’s employment policy department, told Reuters in Geneva on Thursday that the scale of temporary unemployment, lay-offs and the number of unemployment benefit claims were far higher than first expected.

“We are trying to factor in the temporary massive shock into our estimate modeling. The magnitude of fluctuation is much bigger than expected,” he said.

“We need to make downward adjustment, the projection will be much bigger, far higher than the 25 million we estimated.”

ILO’s next forecast is expected to be issued next week.

By comparison, the 2008/9 global financial crisis increased global unemployment by 22 million.

Figures released on Thursday showed the number of Americans filing claims for unemployment benefits surged to a record of more than 3 million last week.

Strict measures to contain the coronavirus pandemic brought the country to a sudden halt, unleashing a wave of layoffs that likely ended the longest employment boom in U.S. history.

Data is also pointing to a sharp jump in job losses in Western Europe despite government spending packages that include support for companies to keep workers on.

Source: Read Full Article

U.S. House will have panel overseeing coronavirus aid law expenditures: Pelosi

WASHINGTON (Reuters) – U.S. House of Representatives Speaker Nancy Pelosi said on Friday the House will set up a panel to oversee expenditures under the $2.2 trillion coronavirus relief law.

Pelosi made the comment in an MSNBC interview when asked about a statement by President Donald Trump rejecting aspects of a provision in the law setting up an inspector general to audit some loans and investments.

“Congress will exercise its oversight and we will have our panel … appointed by the House, in real time to make sure we know where those funds are being expended,” Pelosi said.

Source: Read Full Article

U.S. lawmakers urge 90-day-plus deferral of tariff collections to aid businesses

WASHINGTON, March 26 (Reuters) – A bipartisan group of U.S. lawmakers urged Treasury Secretary Steven Mnuchin on Thursday to order the U.S. Customs and Border Protection agency to defer collections of U.S. tariffs for at least 90 days to ease coronavirus pressures on U.S. businesses.

Eight prominent Democratic and Republican members of the Senate and House of Representatives said in a letter that the deferral should be kept in place “until the crisis passes” to relieve “extreme cash flow problems due to the ongoing coronavirus crisis.” (Reporting by David Lawder; Editing by Cynthia Osterman)

Source: Read Full Article

G20 leaders to inject $5 trillion into global economy to fight coronavirus

RIYADH (Reuters) – Leaders of the Group of 20 major economies pledged on Thursday to inject $5 trillion in fiscal spending into the global economy to blunt the economic impact of the coronavirus and “do whatever it takes to overcome the pandemic.”

Showing more unity than at any time since the 2008-2009 financial crisis that led to the G20’s creation, the leaders said they committed during a videoconference summit to implement and fund all necessary health measures needed to stop the virus’ spread.

In a statement containing the most conciliatory language on trade in years, the G20 leaders pledged to ensure the flow of vital medical supplies and other goods across borders and to resolve supply chain disruptions.

As many countries enact export bans on medical supplies, the G20 leaders said they would coordinate responses to avoid unnecessary interference.

“Emergency measures aimed at protecting health will be targeted, proportionate, transparent, and temporary,” they said.

The G20 leaders also expressed concern about the risks to fragile countries, notably in Africa, and populations like refugees, acknowledging the need to bolster global financial safety nets and national health systems.

“We are strongly committed to presenting a united front against this common threat,” the G20 leaders said in a joint statement following their 90-minute call.

Saudi Arabia, the current G20 chair, called the video summit amid earlier criticism of the group’s slow response to the disease. It has infected more than 470,000 people worldwide, killed more than 21,000, and is expected to trigger a global recession.

Saudi King Salman, in opening remarks, said the G20 should resume the normal flow of goods and services, including vital medical supplies, as soon as possible to help restore confidence in the global economy.

The group committed to national spending measures totaling $5 trillion — an amount equal to that pledged in 2009 — along with other large-scale liquidity, credit guarantee schemes and other economic measures.

World Health Organization Director-General Tedros Adhanom Ghebreyesus was to address the G20 to seek support for ramping up funding and production of personal protection equipment for health workers amid a global shortage.

“We have a global responsibility as humanity and especially those countries like the G20,” Tedros told a news conference in Geneva on Wednesday. “They should be able to support countries all over the world.”

In his remarks to the group, U.S. President Donald Trump shared details of the $6 trillion in support the United States is making available through legislation and increased Federal Reserve liquidity, including $2 trillion in fiscal spending, and spoke in support of multilateral action and coordination.

“He talked about working together and sounded more supportive of multilateral coordination than ever before,” said one source who observed the meeting.

The meeting was not marred by acrimony, as was feared given the ongoing oil price war between Saudi Arabia and Russia, and a war of words between the United States and China over the origins and handling of the pandemic, said the source, who was not authorized to speak publicly.

Tedros told G20 leaders that the pandemic is “accelerating at an exponential rate” and urged them to ramp up production of protective gear for health workers and remove export bans.

“Everyone realizes that it is essential to preserve jobs, and to maintain trade flows, not disrupt the supply chains,” said one Brazilian government official with knowledge of the videoconference discussions.

No country advocated “total confinement” mainly because most of the countries in G20 are not implementing such moves, the official added.

Several participants called upon the G20 to play the same role that it played in overcoming the 2008-2009 global financial crisis, when member countries pledged to inject massive fiscal stimulus and financial liquidity into the economy, the Brazilian official said.

IMF RESOURCES

The G20 leaders also asked the International Monetary Fund and the World Bank Group “to support countries in need using all instruments to the fullest extent.”

IMF Managing Director Kristalina Georgieva plans to ask the Fund’s steering committee on Friday to consider doubling the current $50 billion in emergency financing available to help developing countries deal with the virus, a source familiar with the plans told Reuters.

To boost global liquidity, Georgieva also asked G20 leaders to back a Fund plan to allow member countries to temporarily draw on part of its $1 trillion in overall resources to boost liquidity. The IMF made a similar move in 2009 with a $250 billion allocation of Special Drawing Rights, its internal unit of currency.

Georgieva gave no specific number in her statement, but observers to the G20 meeting said an SDR allocation of up to $500 billion could be needed.

HEALTH FUNDING

On the health response, the G20 leaders committed to close the financing gap in the WHO’s response plan and strengthen its mandate as well as expand manufacturing capacity of medical supplies, strengthen capacities to respond to infectious diseases, and share clinical data.

Despite calls for cooperation, the G20 risks entanglement in an oil price war between Saudi Arabia and Russia and frictions between the United States and China over the origin of the coronavirus outbreak.

Source: Read Full Article

U.S. House sets Friday debate for coronavirus aid bill

WASHINGTON, March 26 (Reuters) – The U.S. House of Representatives will begin a two-hour debate on a sweeping, $2.2 trillion coronavirus aid bill at 9 a.m. (1300 GMT) on Friday but it was not clear whether the measure would be able to pass on a voice vote, the House Majority Leader’s office said late on Thursday.

While most House members are in their home districts because of the coronavirus outbreak, those able and willing to travel to Washington for a vote should arrive by 10 a.m. (1400 GMT), according to the House advisory.

There have been discussions of a possible roll-call vote if a voice vote is blocked by dissenters. (Reporting by Richard Cowan and Patricia Zengerle; Editing by Sandra Maler)

Source: Read Full Article

Ackman says Pershing Square no longer has hedges on stocks

(Reuters) – William Ackman’s Pershing Square Capital Management no longer has hedges on its stock portfolio, but still has some cash to invest if equities decline further as the United States battles the coronavirus outbreak, the billionaire investor said on Saturday.

Pershing Square earned roughly $2.6 billion by hedging its stock portfolio in early March through credit protection on investment grade and high yield credit indices. Much of the money has been reinvested in stocks the firm already owns.

“Today, we are unhedged, and we no longer own any insurance”, Ackman said in a Twitter thread bit.ly/2xsAEFA, adding that he continues to believe the sooner the entire United States is shut down, the more lives will be saved and the sooner the economy will recover.

“Every day we wait, we prolong our collective misery”, Ackman said.

He told CNBC in an interview on March 18 that he thought the best approach to killing off the coronavirus was to close the borders and shut down the entire country, barring essential services, for 30 days.

The S&P 500 .SPX and the Dow Jones Industrial Average .DJI fell sharply after the interview aired.

He later said the interview was not designed to enable his firm to profit from any trades, dismissing some media speculation that he had purposely pushed markets lower to make money off his hedges.

Source: Read Full Article

'This is a war and we want to survive,' says Polish retailer

WARSAW (Reuters) – Polish fashion retailers may not survive the coronavirus crisis if the government, banks and shopping mall owners do not help them bear the costs, a lobby group said on Friday, as Poland closed non-essential shops to stop the spread of the virus.

A new lobby group set up by the retail industry said it has asked the state to help pay out salaries, shopping mall owners to stop taking rents and banks to suspend loan payments. The group says it represents 100 companies and that 200,000 jobs directly depend on their survival.

“This is not even a crisis, it is difficult to name it. It is unlike anything that has happened before….This is a war and we want to survive. I do not care what the financial results will be,” Marek Piechocki, Chief Executive at Poland’s biggest fashion retailer LPP told Rzeczpospolita daily.

He said LPP, a home-grown rival to the likes of H&M and Inditex, had enough resources to continue paying salaries for the next 4-6 months. Before the crisis it had hoped to reach revenue of 10.5 billion zlotys ($2.73 billion) this year.

Tomasz Ciapala, the CEO and majority owner of Lancerto, a men’s suit maker, said that many workers in the industry are paralyzed with fear about their jobs.

“Our union comprises mostly family businesses. Most of our employees, who have been with us for a long time, are scared. This has wide social effects. Mental illness, depression, suicides – these are all side effects of joblessness,” Ciapala told a videconference on Friday.

Pawel Kaplon, a partner at Paan Capital private equity fund, has compared the functioning of fashion retailers to a large-scale restaurant which has hired suppliers and staff and bought products to prepare dishes for the next 100 days. And now has to shut down.

“We have done the cooking for the next half a year, we have payments ahead and we have nowhere to get the cash flow from,” Kaplon told the same conference.

Poland’s parliament is expected to adopt on Friday a package of legislation designed to help the economy and various industries survive the coronavirus crisis.

“The shopping malls, banks and us should participate in these costs together …as in the end each of us will win when this tsunami is over,” said Igor Klaja, the founder of popular sports wear brand 4F.

Source: Read Full Article

Bank of America capital levels allow operational focus during crisis: CEO

(Reuters) – Bank of America Corp (BAC.N) is better positioned to focus on operations rather than financial risk during the coronavirus outbreak, thanks to regulatory safeguards put in place after the financial crisis in 2008, Chief Executive Brian Moynihan said on Friday.

“What’s different this time is clearly our capital liquidity,” Moynihan said in a CNBC interview. “Everything that changed has led the banking industry be in a great condition to service clients continuously for the last few weeks as this thing has hit.”

The second largest U.S. bank by assets has extended more than $50 billion in loans this so far month to commercial clients looking for cash to survive the coronavirus recession. The retail division has fielded more than 150,000 requests to defer payments on mortgages and auto loans. Many requests are managed digitally, he said.

The bank has also been hiring and reallocating employees to the consumer bank to help manage a surge in requests related to the pandemic, according to a memo seen by Reuters. So far this month the Charlotte-based bank has hired 2,000 people and shifted 3,000 internal employees to support its consumer bank.

Bank of America followed its peers like Morgan Stanley (MS.N), Citigroup Inc (C.N) and Wells Fargo & Co (WFC.N) in reassuring employees that they would not be immediately hit by layoffs as a result of the pandemic. In the memo sent to employees on Friday, the bank said it “will not do layoffs or job reductions in 2020 due to coronavirus impacts.”

“We don’t want our teammates to worry about their jobs during a time like this,” Moynihan said.

(Corrects second-last paragraph to reflect that Wells Fargo did not suspend layoffs through 2020)

Source: Read Full Article

In virus-hit France the doctor will see you now – virtually

PARIS (Reuters) – The doctor’s surgery in Paris where Tura Milo works has closed its door to patients because of the coronavirus but the general practitioner is still doing her consultations, only now by video conference.

“How many days have you had a fever for?” she asked a 31-year-old patient suspected of having the virus. The doctor could see the patient in a window on her computer screen, while the patient filmed himself using a webcam at home.

The doctor diagnosed a mild case of coronavirus, gave the patient an online prescription for medicine to relieve the symptoms, and advised him to limit contact with his boyfriend to avoid transmitting the virus.

“Surprisingly, the patients got used to it very quickly,” Milo said of the virtual consultations, which she conducts from her surgery in the French capital’s upscale 6th district.

She estimated that between 30% and 50% of her online appointments are about coronavirus-related complaints.

Heightened anxiety among patients about the virus, coupled with worries that seeing a doctor in person could expose people to infection, has in France driven a surge in the use of online medical consultations.

Since the outbreak took hold in France, the number of consultations taking place on one platform, called Doctolib, has increased 100 times, and the number of doctors using the site has risen tenfold, according to Doctolib co-founder and chief executive Stanislas Niox-Chateau.

“And that is going up hour-by-hour,” he told Reuters in an interview.

A total of 1,696 people have so far died from coronavirus in France, according to an official tally released on Thursday, and the number of recorded cases of infection is at 29,155.

The French government has told people to stay at home and avoid all but essential trips. Visits to the doctor are on the list of permitted activities, but many some worry they could pick up the infection in the doctor’s surgery.

Doctolib, founded in 2013, usually charges doctors a 79 euro ($87) per month fee for using the site, but it decided to waive that at the start of the outbreak.

Doctolib, which is not listed, said last year a funding round in which it raised 150 million euros from investors gave the firm a valuation of around 1 billion euros.

Source: Read Full Article

U.S. weekly jobless claims soar to record 3.28 million

WASHINGTON (Reuters) – The number of Americans filing claims for unemployment benefits surged to a record of more than 3 million last week as strict measures to contain the coronavirus pandemic brought the country to a sudden halt, unleashing a wave of layoffs that likely ended the longest employment boom in U.S. history.

The weekly jobless claims report from the Labor Department on Thursday offered the clearest evidence yet of the coronavirus’ devastating impact on the economy, which has forced the Federal Reserve to take extraordinary steps and the U.S. Congress to assemble a record $2 trillion stimulus package.

Economists say the economy is already in recession. Weekly claims are the most timely labor market indicator. With nearly half the country’s population under some form of a lockdown and reports of state employment websites overwhelmed, economists are bracing for further increases in jobless claims.

“With partial lockdowns across the country leading to a sudden stop in economic activity, the U.S. economy will experience the largest economic contraction on record with the most severe surge in unemployment ever,” said Gregory Daco, chief U.S. economist at Oxford Economics in New York.

“We expect jobless claims will continue to climb as more economic activity shuts down.”

Initial claims for unemployment benefits rose 3.00 million to a seasonally adjusted 3.28 million in the week ending March 21, eclipsing the previous record of 695,000 set in 1982, the Labor Department said. That also dwarfed the peak of 665,000 in applications during the 2007-2009 recession, during which 8.7 million jobs were lost.

Economists polled by Reuters had forecast claims would rise to 1 million, though estimates were as high as 4 million.

The Labor Department attributed the surge to COVID-19, the respiratory illness caused by the coronavirus. A running tally kept by Johns Hopkins University showed that at least 1,046 people in the country have died from COVID-19.

Related Coverage

  • Instant View: U.S. jobless claims balloon to record on coronavirus impact

“This large increase in unemployment claims was not unexpected, and results from the recognition by Americans across the country that we have had to temporarily halt certain activities in order to defeat the coronavirus,” U.S. Labor Secretary Eugene Scalia said in a statement.

Layoffs were concentrated in the accommodation and food service, health care and social assistance, arts, entertainment and recreation, transportation and warehousing, and manufacturing industries.

Mounting job cuts and a sinking economy have prompted President Donald Trump, who is running for re-election in November, to push for businesses to reopen by Easter, which is April 12. With infections and the death toll rising, many health experts, economists and politicians have argued against such a move.

Fed Chair Jerome Powell said on Thursday in an interview on NBC’s “Today” show that the economy “may well be in recession” but progress in controlling the spread of the coronavirus will dictate when the economy can fully reopen.

Recessions in the United States are called by the National Bureau of Economic Research. The NBER does not define a recession as two consecutive quarters of decline in real gross domestic product, as is the rule of thumb in many countries. Instead, it looks for a drop in economic activity, spread across the economy and lasting more than a few months.

The economy grew at a 2.1% annualized rate in the fourth quarter, the Commerce Department confirmed in another report on Thursday. The department also reported a 9.1% plunge in the goods trade deficit to $59.9 billion in February, as well as declines in wholesale and retail inventories, as the coronavirus helped to depressed imports.

Stocks on Wall Street were trading higher, with expectations rising that the record jump in unemployment benefits would spur additional fiscal relief. The dollar .DXY fell against a basket of currencies, while prices of U.S. Treasuries rose.

(Graphic: Unemployment benefits claims hit all-time high, here)

PAYROLLS SEEN DECLINING

The pandemic has prompted governors in at least 18 states to order residents to stay mostly indoors. “Non-essential” businesses have also been ordered closed. According to economists, a fifth of the workforce is on some form of lockdown.

The historic fiscal stimulus package, which is now before the U.S. House of Representatives, would increase payments for the unemployed by up to $600 per week per worker, and laid-off workers would get those payments for up to four months. Regular benefits, which typically run out after six months in most states, would be extended for an additional 13 weeks.

Unadjusted claims for California and Washington state, Ohio, New Jersey, Illinois, Texas and Massachusetts increased by more than 100,000 last week. Pennsylvania reported unadjusted claims increased more than 300,000.

Last week’s claims data likely will have no impact on March’s employment report as it falls outside the period during which the government surveyed employers for nonfarm payrolls, which was the week ended March 14.

Still, the unprecedented surge in jobless claims likely signals a record streak of 113 months of U.S. employment growth, dating to October 2010, came to an end this month.

“Jobs will decline in March,” said Mark Zandi, chief economist at Moody’s Analytics in West Chester, Pennsylvania. “There are numerous reports of laid-off workers unable to file for unemployment insurance because so many people are trying to file at the same time. Millions of job losses are likely in coming weeks.”

(Graphic: End of a historic jobs boom, here)

Thursday’s claims report also showed the number of people receiving benefits after an initial week of aid increased 101,000 to 1.80 million for the week ended March 14, the highest since April 2018.

The so-called continuing claims data covered the period during which the government surveyed households for March’s unemployment rate. Continuing claims increased 110,000 between the February and March survey week, suggesting the unemployment rate will probably rise this month from the current 3.5%.

“We would be amazed if it didn’t exceed 10% by May, if not April,” said Paul Ashworth, chief U.S. economist at Capital Economics in Toronto. “The unemployment rate could remain elevated for years.”

Source: Read Full Article