Category: Business

Corporate America’s plan to fight racial injustice: form a committee

Corporate America plans to fight for racial equality and justice by forming a committee, the nation’s largest business lobby announced on Friday.

Trump’s comment ‘this is a great day’ for George Floyd draws immediate outrage – live

The Business Roundtable’s effort arrives amid a rash of corporate statements in support of the nationwide protests demanding an end to systemic racism following the police killing of George Floyd.

The statements have been met with skepticism because of the long history of big business perpetuating racism by paying low wages, failing to promote people of color and campaigning against unions.

Walmart’s chairman and chief executive, Doug McMillon, is chairman of the Business Roundtable, and said customers, employees and communities were looking for businesses “to act now”. 

“Having spoken to many CEOs of America’s leading businesses, I know they share my conviction that this is a time to act to address racial inequality,” McMillon said in a statement. “The pain our country is feeling should be turned into real change.

“Business Roundtable CEOs do not have all of the answers,” he said. “But we are committed to doing our part to listen, learn and to use our collective influence and scale to advance racial justice and equal opportunity for all Americans.” 

This commitment comes at a critical time for black Americans. In the midst of an economic crisis prompted by public health lockdowns, black people are losing work at higher rates than white people and dying of Covid-19 at higher rates. 

There is compelling evidence that systemic racism could be curbed by boosting wages, ending discriminatory banking and increasing access to affordable healthcare. 

The Business Roundtable is well-placed to address these issues. Its chief executive members lead companies with more than 15 million employees and $7.5tn in revenue. 

For now, the lobby said in a press release it would focus on corporate initiatives and public policies which target education and training programs, healthcare, finance and criminal justice.

The committee includes the chief executives of General Motors, JP Morgan and Johnson & Johnson. 

Two of the seven committee members named in its press release are black men – the chief executive of power conglomerate Eaton, Craig Arnold, and the chief executive of Vista Equity Partners, billionaire Robert Smith. There are no black women on the committee. 

The racial makeup of the committee reflects a broader problem in corporate America. This year’s Fortune 500 list, a snapshot profile of the country’s largest companies, did not include one company run by a black woman. Only four black male CEOs are listed in the index. 

Corporate giants have waded into the national unrest to show solidarity and promote their efforts to ensure racial equality. But the comments have rung hollow to advocates for fair wages and workplace diversity.

On Thursday, Uber emailed customers to say it “stands with the black community”, and donated $1m to the Equal Justice Initiative and Center for Policing Equity, among other initiatives. In 2019, 9.3% of the company’s corporate staff were black and 8.3% Latino. 

Amazon said it stood in solidarity in the fight against systemic racism, but has been assailed by workers alleging poor treatment during the pandemic.

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US economy added 2.5 million jobs in May

New York (CNN Business)When the May jobs report dropped Friday morning, the numbers were shocking: US unemployment actually fell, defying virtually all economists’ predictions.

How did they get it so wrong?

The forecast

    Economists were expecting the jobs report to show May was yet another horrendous month for workers. Those surveyed by Refinitiv had predicted another 8 million job losses and an unemployment rate nearing 20%. Journalists, reporting on economists’ forecasts, had prepared charts ready to show the unemployment rate at its highest level since the Great Depression.

    The reality

    Instead, unemployment suddenly fell in May as employers added 2.5 million jobs. It was the best month for job growth since the Bureau of Labor Statistics started tracking the data in 1939. And employment increased for white, black and Latino workers. Both women and men reported job gains and re-entered the labor force.
    Although the job market remains far weaker than it was before the pandemic, the data seem to show it has at least stopped getting worse. And that’s good news, indeed.
    Stocks soared on the news and President Trump fired off a series of tweets in celebration, calling the numbers “stupendous,” “AMAZING” and “INCREDIBLE.”

    How could economists have had it so wrong?

    Like everyone else, they are in uncharted territory, trying to forecast the economic impact of the pandemic. Other recent indicators, such as initial unemployment claims, continued to show millions of Americans filed for unemployment benefits each week in May. And just two days ago, a report by ADP, one of the largest payroll processing companies in the country, showed the private sector lost 2.8 million jobs in May.
    It’s a “mystery” why the monthly jobs report contradicts those other data points, Ian Shepherdson, chief economist for Pantheon Macroeconomics, wrote in a research note, calling the May report “rather startling.”
    “The biggest payroll surprise in history, by a gigantic margin, likely is due to a wave of hidden rehiring,” he said.

    Unprecedented job losses

    Economists’ models often rely on past trends to predict the future. In the case of the coronavirus pandemic, there simply isn’t a comparable moment in history to use as a guide. They’re learning as they go.
    Some have recently tried to expand beyond the traditional economic indicators watched by Wall Street, incorporating high-frequency data sets from tech companies into their forecasting models. During the pandemic, they’ve been monitoring things like Google mobility data, Google searches for “unemployment”, OpenTable bookings to reflect the health of the restaurant sector and labor hours tracked by work scheduling software Homebase.

    The recovery might have started way earlier than we thought

    Aneta Markowska and Thomas Simons, economists from Jefferies, note that some of those high-frequency data sets pointed to a low point in economic activity in mid April, showing a gradual recovery since then.
    “Jobless claims did not fit with that picture,” they said. “We now know that claims were wrong.”

    Noisy data

    One possibility is that many people who were laid off during the pandemic didn’t file for unemployment benefits, perhaps because they thought they wouldn’t qualify — whereas others were caught up in long processing backlogs. This could explain why the correlation between heightened jobless claims and the data in the jobs report didn’t line up.
    The jobs report comes from surveys of households and businesses reflecting the second week in May, and by then, most states had started to loosen stay-at-home orders. Meanwhile, funds from the government’s Payroll Protection Plan may have helped many small businesses bring back furloughed workers. The jobs report showed restaurants and bars were the biggest job creators in May, bringing back 1.37 million jobs.

    The bottom line

    Unexpected job gains in May are, of course, welcome news. But even so, the job losses incurred during the pandemic are so devastating, the US economy is far from a full recovery.

      At 13.3%, the unemployment rate remains near historic highs, and employers have yet to add back 19.6 million jobs lost since February. Job losses of that magnitude are so severe, they’re more than double the 8.7 million jobs lost following the Great Recession — and in a far shorter period.
      “We really need a new way to talk about recessions and recoveries in a post-Covid world,” Diane Swonk, chief economist for Grant Thornton, said in a research note. “Calling May the end of the recession really does a disservice to the more than 19 million still unemployed and the extraordinary challenges we face as the economy struggles to reopen with the rate of infection still high.”
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      India Economic Growth Slows Sharply On Covid-19

      India’s economic growth slowed sharply in the three months to March, partially reflecting the coronavirus-triggered country-wide lockdown that began towards the end of the quarter, official data showed on Friday.

      Gross domestic product grew 3.1 percent year-on-year compared to 5.7 percent in the same quarter a year ago, figures from the statistics ministry showed.

      The latest growth rate is reportedly the lowest in at least eight years, but was better than the 2.1 percent economists had forecast.

      The December quarter growth was revised lower to 4.1 percent from 4.7 percent.

      The ministry also lowered its growth figure for the fiscal year 2019-20 to 4.2 percent from 5 percent estimated earlier. The latest growth is reportedly the weakest in 11 years. In the fiscal year 2018-19, the Indian economy had grown 6.1 percent.

      In the March quarter, manufacturing shrunk for a third straight quarter, down 1.4 percent year-on-year, and construction decreased 2.2 percent.

      Farm production grew 5.9 percent and mining and quarrying output increased 5.2 percent. Utility sector output grew 4.5 percent after a decline in the previous quarter.

      In the services group, output grew 2.6 percent in the trade, hotels, transport and communication segment, and rose 2.4 percent in the financial services sector.

      India is still battling a severe spread of the coronavirus, or Covid-19, especially in its commercial capital Mumbai. The country went into a total lockdown, one of the most stringent, from March 25.

      The government began easing the lockdown restrictions from May 18 in areas where the number of cases is less.

      Household consumption and investment have been severely hurt as economic activity came to a standstill.

      Economists are looking forward to significantly worse figures for the second quarter as the country remained in total lockdown throughout April and during the first half of May.

      The central bank has cut interest rates twice this year and the RBI governor has warned that growth is likely to be in negative territory in the 2020-21, which would be the first contraction in four decades.

      The RBI expects some recovery in the second half of the fiscal year.
      The RBI maintained its accommodative stance after it cut the repo rate in a surprise move on May 22.

      Goldman Sachs reportedly predicted a 5 percent GDP contraction for the 2020-21 fiscal year, which would be as deep as compared to the deepest recession India has witnessed since 1979.

      “Further ahead, timely and large stimulus would have left households and firms in good shape when they emerged from the lockdown, which would have aided the economic recovery,” Capital Economics economist Shilan Shah said.

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      Atlanta Protests Reveal Divides in Bastion of Black Success

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      If any city in America could think it was inoculated against the protests that have swept across this country’s urban landscape, it might have been the metropolis of Atlanta.

      The onetime Confederate stronghold is not only the place that gave birth to Martin Luther King Jr. and many other notable African Americans, it is also a magnet for younger generations of black people—a land where black lives not only matter but flourish. In addition to hundreds of black-owned restaurants, salons, barbershops, and other small businesses, Atlanta is home to African-American entrepreneurs who are global giants in their industries. One of them, the actor and mogul Tyler Perry, opened a 330-acre studio in the city last year, employing hundreds of people on some days within one of the largest production facilities in the country.

      Here, black descendants of slaves can realize the kind of wealth once reserved for the white aristocracy of the Deep South. And in neighborhoods such as Guilford Forest, young black families live in new subdivisions of sprawling mini-mansions, walking trails, and playgrounds, all within close proximity to the Midtown business district. In the historic arts district known as Castleberry Hill, young, urbane black professionals own lovingly renovated homes, sip cocktails at lounges owned by black celebrities, and stroll the art galleries and shops.

      Landmark legislation introduced in the 1970s by the city’s first black mayor, Maynard Jackson, opened the way for black-owned businesses to get municipal contracts, and in the ensuing years a cohort of millionaires of a different hue was born. So attractive was the economic opportunity that the city became known by black people across the country as “Hotlanta,” an old Allman Brothers Band song title and a double entendre that not only underscored the city’s sweltering summer temperatures but also designated the city as the place to be for ambitious black Americans. According to U.S. Census data, more than 2 million African Americans live in greater metro Atlanta, and there are more than 7,600 black-owned businesses. Only the New York City area has more black-owned businesses, but it also has twice as many African-American adult residents.

      It’s that sense of being special—that black economic prowess—that Atlanta Mayor Keisha Lance Bottoms invoked on the night of May 29 in response to protests over the killing of George Floyd, a black man in Minneapolis who died after a police officer pressed his knee on Floyd’s neck for more than eight minutes.

      The protests in Atlanta had just taken a violent turn, and Bottoms, a rising political star and Atlanta native, appealed to the residents of her city, reminding them of the multitude of black enterprises and the opportunities provided by the city’s strong corporate community. “What I see happening on the streets of Atlanta is not Atlanta,” Bottoms said. “We are better than this.” Or, as Michael Santiago Render, an Atlanta-bred rapper known as Killer Mike who joined the mayor at the hastily arranged press conference, said: “Atlanta is not perfect, but we are a lot better than we ever were, and we’re a lot better than other cities are.”

      Yet for all of the promise that’s come to fruition in Atlanta, there are still many dreams deferred. Even with the city being the headquarters of Coca-Cola Co., United Parcel Service, and Home Depot and the home to several renowned medical institutions and top colleges and universities, there are long-festering problems. Stubborn unemployment, low wages, poor housing conditions, and inadequate health care continue to bedevil many African Americans in and around this city—and then the coronavirus pandemic came to town. “This southeastern part of the U.S. had some of the worst health outcomes in the nation even before the pandemic hit,” says Dr. Sandra Ford, the district health director for the DeKalb County Board of Health. (DeKalb County encompasses part of the city of Atlanta and the greater metro area.) The rate of Covid-19 infections in blacks vs. whites in the region, she says, has been almost 3 to 1.

      As viral video spread of yet another black person killed by a white police officer, people who’d just lost their jobs, or were concerned for sick or dying relatives, or were waiting for unemployment payments to arrive—or all of the above—decided there was little left to lose if they took to the streets. Atlanta wasn’t immune to unrest and destruction.

      But the mayor, while sharing the protesters’ pain and speaking of her personal concern for the safety of her own children, reminded them that their city had gained so much in recent years and did in fact have much to lose. Just minutes after riotous crowds had vandalized the CNN Center, a landmark downtown building that’s served as home to one of the city’s most prominent businesses, Bottoms reminded them that they were destroying a symbol of what Atlanta has achieved. “Ted Turner started CNN in Atlanta 40 years ago because he believed in who we are as a city,” she implored the protesters. “They are telling our stories, and you are disgracing their building. Go home!”

      On the next evening, as protests continued in the city’s streets, Bottoms and her police chief acted swiftly to fire two of Atlanta’s police officers and suspend four others after they pulled two black college students from a car and used taser guns on them. (Five of the six officers are black, one is white.) Two days later, the presumptive Democratic presidential nominee, Joe Biden, commended Bottoms in an online forum. “I’ve watched you like millions and millions of Americans have on television of late,” he said. “Your passion, your composure, your balance has really been incredible.”

      The unrest will subside. Even the most roaring fires are eventually reduced to ashes. Atlanta isn’t paradise, and it’s learned that relative prosperity is no panacea for generations of old and deep social problems. In his days as mayor, Jackson liked to say Atlanta was “too busy to hate.” But this is a city where there is capable leadership, strong opportunity, civic pride, and, most of all, hope. It’s a city that, because of its past, offers a blueprint—a blackprint, if you will—of how economic opportunity and prosperity can become the province of all people.
       
      Read more: How Camden, New Jersey, Reformed Its Police Department

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      NYC Mayor Bill de Blasio Heckled, Booed At George Floyd Memorial In Brooklyn

      New York City Mayor Bill de Blasio was booed and heckled by an irate crowd at a memorial for George Floyd in Brooklyn Thursday after declining to call out police violence in the city the night before.

      An event organizer, Rev. Kevin McCall, introduced the increasingly unpopular pol, asking the crowd for “respect” as people turned their backs and started to boo loudly. They quieted as de Blasio’s wife Chirlane McCray took the mic instead. “We want to hear from my partner, my partner in all things, and I ask you to give him the same respect you give me,” she said.

      They didn’t. The mayor talked anyway, barely audible over catcalls and chants of ‘I can’t breathe’ and ‘resign.’

      “Georg Floyd cannot be allowed to die in vain. We have to make a change in this city and this country” – with changes in the NYPD too, he said. “We need peaceful change in this city once and for all.” He spoke for about 90 seconds then gave up.

      Comments earlier in the day drew ire. At a press briefing, he said he’d seen “a lot of restraint from the N.Y.P.D. overall and would review whatever was needed. He said at the briefing that he hadn’t yet seen the footage of police officers using batons on protesters Wednesday night. “In the context of crisis, in the context of curfew, there is a point where enough is enough,” he said, “If officers say, ‘Now is the point we need you to go home,’ it’s time to go home.”

      Hank Newsome, local president of Black Lives Matter, demanded de Blasio’s resignation and Governor Andrew Cuomo — the mayor’s frequent sparring partner — mentioned he had vested power to “displace” him.

      New York City councilman Eric Ulrich tweeted Thursday morning. “@NYCMayor has lost control of the situation.” He said he would call for a vote of no confidence in the City Council.

      https://www.youtube.com/embed/CiLBoQAzKKg?version=3&enablejsapi=1&origin=https://pmcdeadline2.wordpress.com&rel=1&fs=1&autohide=2&showsearch=0&showinfo=1&iv_load_policy=1&wmode=transparent’ allowfullscreen=’true’ style=’border:0;’>

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      ‘Slave Play’ Team Pledges $10G To National Bailout Fund, Challenges Broadway Community

      The creative team and producers of Jeremy O. Harris’ Slave Play have donated $10,000 to the National Bailout Fund in support of Black Lives Matter, and have challenged others in the theater community to do likewise. “Our stages are dark but the resources we have can be utilized on the world’s stage now,” reads part of a statement issued by Slave Play on social media.

      “For too long we have witnessed Black bodies be made objects to consume and destroy by agents of white supremacy, as Black people have been forced to fight for their right to be,” the statement begins (read it below). “This week across out nation Black voices have yelled out as one to say ‘Enough is enough.’ The creative team and producers of Slave Play stand with voices across the world to say ‘Black lives matter’ with a recognition that the work we can do and have done on Broadway is very different than the work being done on the ground today.”

      Slave Play, which ended its 17-week Broadway engagement on this past January 19, made the donation to the National Bailout Fund yesterday.

      Since last weekend, a number of Broadway productions have pledged support to Black Lives Matter and the George Floyd protesters. In a video shared on Twitter last weekend, Hamilton creator Lin-Manuel Miranda said, “That we have not yet firmly spoken the inarguable truth that Black Lives Matter and denounced systemic racism and white supremacy from our official Hamilton channels is a moral failure on our part,” adding that Hamilton “doesn’t exist without the black and brown artists who created and revolutionized and changed the world through the culture, music, and language of hip hop. It doesn’t exist without the brilliant black and brown artists in our cast, crew, and production team who breathe life into this story every time its performed.”

      Other productions pledging support and encouraging donations to Black Lives Matter and other organizations include Hadestown, What The Constitution Means To Me, Moulin Rouge! and Company, as well as Off Broadway’s New York Theatre Workshop, Second Stage and Playwrights Horizons, among others.

      Here is the Slave Play statement, and a sampling of other shows of support from Broadway:

       

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      Steve Priest Dies: Bassist Who Co-Founded Sweet Was 72

      Steve Priest, the bass player who co-founded the UK group Sweet that had hits including “Ballroom Blitz,” “Fox on the Run” and “Love Is Like Oxygen,” died today, his bandmates said without providing details. He was 72.

      Priest had been living in the Los Angeles area for several years, and his band played often at local venues including the Canyon clubs in Agoura Hills and Santa Clarita.

      Riding the glam rock wave alongside the likes of David Bowie, Queen and T.Rex, Sweet exploded in England with a strings of UK top 10 singles in the early 1970s. The crowd scored smash singles with “Co-Co,” “Wig Wam Bam,” the chart-topping “Blockbuster,” “Hellraiser” and “Little Willy,” The latter would become the quartet’s first U.S. hit, reaching No. 3 in early 1973.

      Featuring Priest on bass, lead singer Andy Connolly, guitarist Andy Scott and drummer Mick Tucker, Sweet continued to rack up chart success in Great Britain with the hit singles and its 1974 third LP Desolation Boulevard, which featured “Ballroom Blitz” and “Fox on the Run.” Both reached No. 2 in the UK — among five hits for the group that would peak in the runner-up slot there.

      The U.S. version of Desolation Boulevard was released in 1975 and had a different track list, adding some songs from the band’s 1973 album Sweet Fanny Adams. “Ballroom Blitz” — which featured the familiar “Are you ready, Steve?” intro that name-checked Priest — and “Fox on the Run” both reached No. 5 on the Billboard Hot 100 that summer.

      “Ballroom Blitz” would go on to be covered by the likes of Krokus, the Damned and Tia Carrere, who performed her version in the 1992 hit movie Wayne’s World.

      Sweet would go on to have a few more intercontinental hit singles, including “Action” (1976) and “Love Is Like Oxygen” (1978) before splintering in the late 1970s when Connolly left for a solo career. He died in 1997, and Tucker died in 2002. Scott formed his own version of Sweet and continues to tour outside the U.S.

      Priest re-formed Sweet with a new lineup in 2008 and had been touring ever since, with the bassist performing while seated in recent years and adding some vocals.

      Survivors include his wife of 39 years Maureen O’Connor, a longtime publicist for Rogers & Cowan; their daughters Danielle and Maggie; daughter Lisa; and three grandchildren.

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      Asian Markets Mostly Lower On U.S.-China Tensions

      Asian stock markets are lower on Friday as worries about rising U.S.-China tensions more than offset optimism about a recovery in growth as more economies reopen.
      China approved a controversial national security law for Hong Kong on Thursday, triggering concerns that the new law will end the city’s autonomy. In response, U.S. President Donald Trump said he plans to hold a news conference about China later today.

      The Australian stock market is declining on worries about rising U.S.-China tensions.

      The benchmark S&P/ASX 200 Index is losing 73.10 points or 1.25 percent to 5,778.00 and the broader All Ordinaries Index is lower by 70.50 points or 1.18 percent to 5,887.30. Australian stocks closed notably higher on Thursday.

      The big four banks are sharply lower after four days of strong gains. Westpac, National Australia Bank and ANZ Banking are lower in a range of 2.5 percent to 3.6 percnt, while Commonwealth Bank is down almost 1 percent.

      Westpac said that the chief executive of its institutional bank, Lyn Cobley, is retiring and a search is on for her replacement.

      In the oil sector, Woodside Petroleum and Oil Search are declining more than 1 percent each, while Santos is down almost 1 percent even as crude oil prices rose overnight.

      Among the major miners, Fortescue Metals and Rio Tinto are adding 0.2 percent each, while BHP is down 0.5 percent.

      Gold miners are higher even after gold prices edged up overnight. Evolution Mining is rising almost 3 percent and Newcrest Mining is higher by more than 1 percent.

      Austal has raised its earnings and revenue outlook for fiscal 2020, citing continued strong performance across its business. The shipbuilder’s shares are gaining more than 12 percent.

      On the economic front, Australia will see April figures for private sector credit today.

      In the currency market, the Australian dollar is higher against the U.S. dollar on Friday. The local unit was quoted at $0.6627, compared to Thursday’s close of $0.6613.

      The Japanese market is losing, while the safe-haven yen strengthened amid worries about rising U.S.-China tensions. Investors also turned cautious as they digested a raft of local economic data, including weak industrial output and retail sales data for April.

      The benchmark Nikkei 225 Index is down 144.48 points or 0.66 percent to 21,771.83, after touching a low of 21,710.80 earlier. Japanese shares extended gains to close at a fresh three-month high on Thursday.

      Market heavyweight SoftBank Group is adding 0.2 percent and Fast Retailing is edging up 0.1 percent.

      The major exporters are mostly lower on a stronger yen. Canon is losing more than 3 percent, while Panasonic and Mitsubishi Electric are declining more than 1 percent each. Sony is adding almost 1 percent.

      In the tech space, Advantest is lower by more than 3 percent and Tokyo Electron is declining more than 2 percent. Among automakers, Honda Motor is lower by more than 2 percent and Toyota is down 1 percent.

      In the oil sector, Inpex is losing 2 percent, while Japan Petroleum is adding 0.2 percent even as crude oil prices rose almost 3 percent overnight.

      Among the major gainers, Toppan Printing is rising more than 5 percent, Otsuka Holdings is gaining almost 3 percent and Daiichi Sankyo is higher by more than 2 percent.

      On the flip side, Nikon Corp. is tumbling almost 10 percent after its full-year net profit plunged 88 percent from last year and the company said it cut 700 jobs in Southeast Asia as part of a restructuring of its digital camera business.

      Nissan Motor is losing more than 8 percent after reporting a loss for the full year. Mitsubishi Motors is lower by more than 6 percent and Mazda Motor is down almost 6 percent.

      In economic news, Japan’s industrial output skidded a seasonally adjusted 9.1 percent in April. That missed expectations for a decline of 5.1 percent following the 3.7 percent drop in March.

      The total value of retail sales in Japan was down a seasonally adjusted 9.6 percent on month in April, shy of expectations for a decline of 7.0 percent following the 4.5 percent drop in March.

      The unemployment rate in Japan came in at a seasonally adjusted 2.6 percent in April, beneath expectations for 2.7 percent, but up from 2.5 percent in March.

      Overall consumer prices in Japan were up 0.4 percent on year in May, exceeding expectations for an increase of 0.2 percent, which would have been unchanged from the April reading. Core CPI, which excludes volatile food costs, gained an annual 0.2 percent versus forecasts for a decline of 0.2 percent after easing 0.1 percent in the previous month.

      In the currency market, the U.S. dollar is trading in the mid 107 yen-range on Friday.

      Elsewhere in Asia, South Korea, Singapore, Hong Kong, Malaysia and Taiwan are all modestly lower, while Indonesia and New Zealand are higher. Shanghai is little changed.

      On Wall Street, stocks closed lower on Thursday in a late-day pullback after President Donald Trump announced plans to hold a news conference about China on Friday. China has recently stepped up efforts to curtail Hong Kong’s independence, raising concerns that Trump may announce new measures that ramp up recent tensions with China. The strength seen for much of the day came following the release of a report from the Labor Department showing a continued decrease in first-time claims for unemployment benefits in the week ended May 23.

      The Dow fell 147.63 points or 0.6 percent to 25,400.64, the Nasdaq slid 43.37 points or 0.5 percent to 9,368.99 and the S&P 500 dipped 6.40 points or 0.2 percent to 3,029.73.

      Meanwhile, the major European markets moved to the upside on Thursday. While the French CAC 40 Index surged up by 1.8 percent, the U.K.’s FTSE 100 Index and the German DAX Index jumped by 1.2 percent and 1.1 percent, respectively.

      Crude oil prices moved higher on Thursday, driven by data showing a drop in gasoline inventories in the U.S, amid an increase in demand thanks to reopening of businesses in almost all the states in the country. WTI crude for July added $0.90 or about 2.7 percent at $33.71 a barrel.

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      American Sparks Airline Rally on Signs That Demand Is Reviving

      American Airlines Group Inc. sent industry shares climbing after the carrier said it would boost July flights 74%, signaling that U.S. travelers freed from shelter-in-place orders are returning more quickly than expected.

      The busiest days next month will have about 4,000 flights, up from 2,300 in June, said Vasu Raja, American’s senior vice president of network strategy. The July figure is equivalent to 40% of capacity a year earlier, compared with 30% in June, the airline said Thursday.

      American’s expanded schedule builds on recent indications from rivals that customers are starting to make their way back onto planes after fleeing in April because of the coronavirus pandemic. While traffic is still weak by historical standards, the airline’s trends suggest that the worst has passed. American’s load factor, or the average share of seats filled per plane, climbed to 55% last week from 15% in April.

      “People are hungry, eager to get back into the economy,” Raja said in an interview. “We feel a real confidence to fly a much bigger July.”

      American jumped 11% to $13.11 at 9:37 a.m. in New York to lead the S&P 500. Several other airlines were among the index’s 10 best performers.

      Next month, American will bring back some of the 450 jets it parked during the worst of the collapse in flying. It hasn’t determined which aircraft will be put back in service.

      Optimism’s Limits

      American acknowledged the limits to the improving outlook. The rebound is still weak on lucrative routes to overseas destinations, with the company planning to fly less than 20% of last year’s international schedule compared with 55% of domestic capacity. Also, American delayed the planned resumption of additional foreign routes by at least a month.

      Even with the encouraging signs at home, the domestic recovery is “tenuous,” Raja said. And the Fort Worth, Texas-based company is still retiring more than 100 aircraft, including three separate fleet types.

      But based on current trends, the nadir appears to be in the rear-view mirror.

      The number of daily passengers has grown to 110,330 from 32,154 in the first three weeks of May and “is inching north all the time,” Raja said. By comparison, the airline carried about 600,000 passengers daily pre-Covid 19.

      Business, Leisure

      The recent gains range from business to leisure trips, Raja said. Corporations are relaxing travel restrictions in states such as Texas and Florida that have eased quarantine requirements. Vacationers are booking flights to amusement parks in Florida, beaches along the Gulf Coast and mountain destinations in Montana, Utah and Colorado.

      American resumed service to six international cities Wednesday, but will delay until August or later other flights from the U.S. to Europe and Latin America. The airline’s full July schedule will be available for purchase starting June 7.

      United Airlines Holdings Inc. and Delta Air Lines Inc. also are resuming some overseas flights, but lucrative international business traffic is expected to be the slowest area to rebound. Confusion over which countries have lifted travel restrictions and whether tourist attractions, hotels or other industries are open has contributed to the slower global recovery, Raja said.

      American also will begin reopening its loyalty club lounges in phases starting June 22, after making improvements to encourage social distancing and reduce the possible spread of Covid-19. The measures include shields at desks and foot-operated door openers.

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      Boeing Lays Off 6,770 Employees; Resumes 737 MAX Production

      Amid the struggles related to Covid-19 pandemic and the grounded 737 Max jets, Boeing Co. has announced involuntary layoffs of the first 6,770 U.S. team members this week, as part of its earlier plan of 10 percent reduction in its workforce.

      In a letter to the employees, Boeing President and CEO Dave Calhoun said the aerospace giant has concluded voluntary layoff program, which reportedly affected 5,520 U.S. employees.

      Boeing also has resumed production of the 737 MAX at the company’s Renton, Washington factory. The 737 program began building airplanes at a low rate, and will gradually ramp up production this year. The production was suspended temporarily in mid-January after it failed to get regulatory approvals for the company’s best-selling jet to return to service and due to a backlog of 400 undelivered jets.

      Citing the weak demand and delay in purchases of jets during the virus crisis, Boeing on April 29 had announced its plans to trim employee number by roughly 10% through a combination of voluntary layoffs, natural turnover and involuntary layoffs. The company then said deeper reductions would be there in certain areas, expecting more than 15% cut across commercial airplanes and services businesses, as well as corporate functions. Boeing has around 160,000 employees globally.

      Calhoun now said the company will notify the affected employees of involuntary layoffs this week, and that the firm will provide all the support, including severance pay, COBRA health care coverage for U.S. employees and career transition services.

      Boeing’s international locations also are working through workforce reductions, which will be informed locally.

      Calhoun said, “The COVID-19 pandemic’s devastating impact on the airline industry means a deep cut in the number of commercial jets and services our customers will need over the next few years, which in turn means fewer jobs on our lines and in our offices….I wish there were some other way.”

      The aerospace and defense giant has been struggling to stay afloat after the grounding of the 737 Max jets by airlines worldwide in March 2019 following two deadly crashes that killed a total of 346 people.

      In March this year, Boeing customers canceled 150 orders for 737 Max aircraft. In the first quarter, Boeing delivered 50 aircraft, including five 737 jets, down from 149 aircraft in the prior year.

      The company in early May resumed all 787 operations at its South Carolina facility that were temporarily suspended on April 8 in response to the COVID-19 pandemic.

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