Moving to combat its worst recession in decades, France unveiled a massive 100 billion euro ($118 billion) stimulus plan Thursday aimed at restoring the battered economy to pre-crisis levels by 2022, handing large tax cuts and hiring subsidies to companies in hopes of stimulating investment and creating jobs.
“We have to learn to live with the virus, and to survive it,” Prime Minister Jean Castex said at a press briefing. “The economy has clearly been weakened,” he added, “and we need to relaunch it and prepare for the future.”
The package, the biggest spending effort in Europe, comes on top of nearly €400 billion that President Emmanuel Macron made available to help keep thousands of business from going bankrupt and millions of people employed since a nationwide quarantine caused the economy to crater. Growth is expected to contract by 11 percent this year because of the Covid-19 epidemic.
But a new wave of infections is rolling across France, and the prospect of a protracted downturn has prompted the government to try and shield the economy from further damage.
The effort focuses on supply-side stimulus and transitioning to so-called “green” technology across the economy, mainly by shoring up manufacturing and infrastructure spending. Industrial companies will get €35 billion in production tax breaks to stimulate investment and job creation, and the state will subsidize industrial development in hard-hit regions.
Around a third of the money will go toward making the nation’s infrastructure more environmentally sound, by upgrading major freight and transportation train lines and renovating schools, apartment buildings and other structures with more ecological technology. All told, the government said it hopes to create at least 160,000 new jobs through the stimulus measures next year.
That may not be nearly enough to ease the nation’s swelling jobless rolls. Around 30 percent of the active population was out of work in the second quarter, and economists and the government itself have warned of a tsunami of job losses in the fall as Airbus, Renault and other large companies downsize to make up for slumping demand.
To help combat the problem, France is throwing another €6.5 billion in subsidies at companies to encourage them to hire younger workers who are finding it nearly impossible to get a job in a down market, and increasing spending on job furlough and retraining programs.
More than five months into the pandemic, the coronavirus is still battering the economy and the labor market. The latest sign of the damage will come Thursday morning, when the Labor Department releases its weekly report on new jobless claims and the number of workers receiving unemployment insurance.
Wall Street analysts surveyed by MarketWatch estimate that new state claims filed last week fell below a million. That figure does not include hundreds of thousands of new claims from unemployed freelancers, part-time workers and others under an emergency federal program.
There have been modest reductions in new weekly claims through most of August, an encouraging trend. “The declines that we’re seeing are positive,” said Ernie Tedeschi, managing director and policy economist for the investment banking advisory firm Evercore ISI, “but they point to a long, drawn out recovery.”
This week, though, comparisons to previous announcements from the Labor Department need a warning signal.
That’s because the department is changing the way it adjusts state jobless claims figures for predictable seasonal patterns, like teachers returning to schools in the fall or temporary holiday workers who are laid off in January.
With the pandemic, unemployment claims have been anything but predictable. So the department tweaked its calculations to improve accuracy. But the change means that the latest seasonally adjusted numbers are not comparable with those released in previous weeks.
A big drop, for example, is likely to reflect the change in methodology, not an actual decline in layoffs.
As a result, The Times plans to emphasize the unadjusted figures.
For the week ended Aug. 22, the unadjusted figures showed that 821,591 new state claims were filed; the seasonally adjusted number was slightly over a million. In addition, 607,806 new claims were filed through the federal Pandemic Unemployment Assistance program, for which data is not seasonally adjusted.
European markets rose on Thursday, with Britain’s FTSE 100 index up nearly 1 percent and markets in Germany and France up nearly 2 percent. Investors were encouraged after France announced new stimulus measures amounting to $100 billion euros ($118 billion) as the government tries to revive its slumping economy.
U.S. stock futures fluctuated, following a rally on Wall Street on Wednesday that sent stocks to new highs. The S&P 500 closed up 1.5 percent to set another record, helped by gains in technology stocks. It was the index’s best day since July 6. The Dow Jones industrial average closed above 29,000 for the first time since February, though it is still more than 450 points off its record high.
Asian markets were mixed on Thursday, with Japan’s Nikkei closing up nearly 1 percent while Hong Kong’s Hang Seng slipped.
Investors were awaiting fresh data from the U.S. Labor Department on Thursday on the number of new weekly jobless claims, which analysts expect to be below a million. They are also focused on the monthly jobs report, which is set to be released on Friday.
The Trump administration has announced an order to suspend the possibility of eviction for millions of renters who have suffered financially because of the coronavirus pandemic. The Centers for Disease Control and Prevention said the order was an emergency action, which it is entitled to take under the law.
We have answers to questions that renters may have about the order. Please email your questions to firstname.lastname@example.org.
Who is eligible?
You must meet a five-pronged test.
You need to have used your “best efforts” to obtain any and all forms of government rental assistance.
You can’t “expect” to earn more than $99,000 in 2020, or $198,000 if you’re married and filing a joint tax return. If you don’t qualify that way, you could still be eligible if you did not need to report any income at all to the federal government in 2019 or if you received a stimulus check this year.
You must be experiencing a “substantial” loss of household income, a layoff or “extraordinary” out-of-pocket medical expenses (which the order defines as any unreimbursed expense likely to exceed 7.5 percent of your adjusted gross income this year).
You have to be making your best efforts to make “timely” partial payments that are as close to the full amount due as “circumstances may permit,” taking into account other nondiscretionary expenses.
Eviction would “likely” lead to either homelessness or your having to move to a place that was more expensive or where you could get sick from being close to others.
A lot of that is pretty subjective. If it’s a close call, who decides?
Landlords who disagree with renters’ self-assessments could try to evict nonpaying tenants by arguing that they are not a “covered person” within the order’s scope and dare them to fight back legally. Then it could be up to a housing court judge to decide if a renter is eligible or if the landlord can, in fact, evict.
How do I prove to my landlord that I’m eligible?
The C.D.C. order makes reference to a declaration that renters should draft and then provides an example of one near the end of the document online.
It’s early to be thinking about holiday shopping, unless you are a retailer. In which case it may be all you can think about.
Retailers pummeled by the pandemic have already been making decisions about inventory, staffing and how best to connect with customers skittish about visiting crowded stores during a pandemic. The result will be a holiday season that is transformed in fundamental ways — and is also unlikely to make up for the severe drops in revenue caused by the shutdowns.
Sapna Maheshwari and Gillian Friedman explain how retailers are trying to adapt.
Rather than enticing shoppers into stores with holiday sales events, retailers like Walmart and Target recently said they would try to temper the crowds by closing on Thanksgiving Day and putting their best deals online earlier than usual.
Instead of conversing with shoppers, many store workers will be spending their time handing off purchases to people who pull up to the curb in their car.
A pause is expected on so-called doorbuster deals and the ensuing madness created by crowds rushing into stores for limited discounts. Companies including Hasbro, Target and Macy’s have signaled plans to offer discounts over a longer period, starting as soon as late October. Jeff Gennette, Macy’s chief executive, said in a July earnings call that he expected Black Friday deals “to start in full force after Halloween.”
In preparation for customers who are nervous about crowds, Macy’s has been exploring new ways to manage store traffic and rethinking bustling sales events like Black Friday and the 10 days before Christmas, Mr. Gennette said.
As special as the holiday season feels to shoppers, it is crucial for stores. Holiday sales in November and December can bring in 20 percent of a retailer’s annual revenue, and 30 percent of sales for hobby, toy and game stores, while driving tremendous profitability, according to the National Retail Federation.
Amazon said Thursday that it planned to add 7,000 new permanent jobs across the United Kingdom this year as online shopping continues to surge. The new roles are in addition to the 3,000 roles already added in the U.K. in 2020. Amazon also said it would create more than 20,000 seasonal jobs across the England, Scotland, Wales and Northern Ireland for the holiday season.
The amount of U.S. government debt will nearly outpace the size of the nation’s economy in the 2020 fiscal year, the Congressional Budget Office said on Wednesday. Total debt held by the public is expected to reach an estimated 98 percent of the size of the economy for the fiscal year, which ends on Sept. 30, the budget office said. The budget office now expects the debt to exceed the size of the economy in fiscal year 2021. By 2023, it said on Wednesday, it expects the debt as a share of the economy to reach its highest level in American history, surpassing the World War II era.
United Airlines said Wednesday that it expects to furlough 16,370 employees starting Oct. 1, when federal restrictions on job cuts that were a condition of government aid end. The announcement, which comes a week after a similar one from American Airlines, could put further pressure on Congress and the Trump administration to renew stimulus funding. The Oct. 1 cut would affect nearly 7,000 flight attendants, nearly 3,000 pilots and thousands of others who work in maintenance, airport operations and other roles.
Japanese convenience store owners who have been fighting for a break from their grueling 24-hour, 365-day-a-year operations may be closer to shorter opening hours.
In a report on Wednesday, Japan’s Fair Trade Commission took the industry’s top chains to task for business practices that have generated enormous profits by pushing growing operating costs onto franchise owners.
The report, which was based on a survey of more than 8,400 convenience store franchisees, detailed numerous problems with the companies’ business models, starting with the franchisee recruitment process and extending to the most fundamental aspects of store management.
It is the most comprehensive examination to date of an industry that is as opaque as it is ubiquitous. Companies, like 7-Eleven, Lawson and FamilyMart, have closely guarded their business practices, including from their own franchisees, making it difficult to ascertain the extent of the issues facing them.
Among the most serious problems cited by the report were companies coercing franchisees into buying more products than they could sell, pushing them to maintain 24/7 operating hours and making misleading recruitment promises to store owners about the prospects for their new businesses.
The commission warned that those practices, among others, may have run afoul of Japan’s antimonopoly law by “abusing a superior bargaining position.” It requested that the country’s eight leading convenience store chains submit a plan for taking corrective measures. The commission also said it would seek further information about possible legal violations by the companies.
Convenience stores are ubiquitous in Japan, with more than 55,000 locations so widely spread throughout the nation that the government considers them part of the national infrastructure.