January 28, 20215:19 AM By Lucia Mutikani WASHINGTON (Reuters) - The U.S. economy likely contracted at its sharpest pace since World War Two in 2020 as COVID-19 ravaged services businesses like restaurants and airlines, throwing millions of Americans out of work and into poverty. The Commerce Department’s snapshot of fourth-quarter gross domestic product on Thursday is also expected to show the recovery from the pandemic losing steam as the year wound down amid a resurgence in coronavirus infections and exhaustion of nearly $3 trillion in relief money from the government. The Federal Reserve on Wednesday left its benchmark overnight interest rate near zero and pledged to continue injecting money into the economy through bond purchases, noting that “the pace of the recovery in economic activity and employment has moderated in recent months.” President Joe Biden has unveiled a recovery plan worth $1.9 trillion, and could use the GDP report to lean on some lawmakers who have balked at the price tag soon after the government provided nearly $900 billion in additional stimulus at the end of December. “Last year was awful for the economy,” said Sung Won Sohn, a finance and economics professor at Loyola Marymount University in Los Angeles. “This was the first service industry recession in recent memory where a lot of jobs were lost.” Economists are forecasting that the economy contracted by as much as 3.6% in 2020, the worst performance since 1946. That would follow 2.2% growth in 2019 and would be the first annual decline in GDP since the 2007-09 Great Recession. In the fourth quarter, GDP is estimated to have expanded at a 4% annualized rate, according to a Reuters survey of economists. The virus and lack of another spending package curtailed consumer spending, and partially overshadowed robust manufacturing and the housing market. The anticipated big step-back, following a historic 33.4% growth pace in the July-September period, would leave GDP roughly 2.3% below its level at the end of 2019. With the virus not yet under control, economists are expecting growth to further slow down in the first quarter of 2021, before regaining speed by summer as the additional stimulus kicks in and more Americans get vaccinated. ---- The services sector has borne the brunt of the coronavirus recession, disproportionately impacting lower-wage earners, who tend to be women and minorities. That has led to a so-called K-shaped recovery, where better-paid workers are doing well while lower-paid workers are losing out. The stars of the recovery have been the housing market and manufacturing as those who are still employed seek larger homes away from city centers, and buy electronics for home offices and schooling. Manufacturing’s share of GDP has increased to 11.9% from 11.6 at the end of 2019. A survey last week by professors at the University of Chicago and the University of Notre Dame showed poverty increased by 2.4 percentage points to 11.8% in the second half of 2020, boosting the ranks of the poor by 8.1 million people. Rising poverty is likely be underscored by persistent labor market weakness. The Labor Department is expected to report on Thursday that 875,000 more people filed for state unemployment benefits last week, according to a Reuters survey. About 16 million Americans were receiving unemployment checks at the end of 2020. The economy shed jobs in December for the first time in eight months. Only 12.4 million of the 22.2 million jobs lost in March and April have been recovered. More https://www.reuters.com/article/us-usa-economy/u-s-economy-likely-logged-its-weakest-performance-in-74-years-in-2020-idUSKBN29X0I8 The end of offices? New York's business districts face uncertain future Issued on: 27/01/2021 - 03:22 Boarded-up stores, shuttered restaurants and empty office towers: Covid-19 has turned New York's famous business districts into ghost towns, with companies scrambling to come up with ways to entice workers to return post-pandemic. "If they don't come back, we're sunk," said Kenneth McClure, vice president of Hospitality Holdings, whose Midtown bistro pre-coronavirus would buzz with the sound of financiers striking deals at lunch and sharing cocktails after a hard day at the office. The group has closed its six restaurants and bars in Manhattan, two of them permanently, due to lockdown restrictions that have paused office culture - a culture as intrinsic to the Big Apple as a Broadway show, a yellow taxi or a slice of cheese pizza. "Customers that you saw three, four, five times a week just virtually disappeared," McClure told AFP, recalling March of last year when the pandemic first swept New York, where it has killed more than 26,000 people. According to data collected by security firm Kastle Systems, only 14 percent of New York's more than one million office workers had returned to their desks by the middle of January, putting the countless sandwich shops and small businesses in Midtown and Wall Street at risk. With vaccines now rolling out, corporations and business leaders are grappling with how to attract employees back after spending the best part of a year working from home, and in turn maintaining the character of business districts. Seventy-nine percent of employees questioned in a PricewaterhouseCoopers survey published this month said that working remotely had been a success, but the report also found that offices are not about to be consigned to history. Some 87 percent of employees said the office was important to them for collaborating with team members and building relationships, aspects of working life they felt was easier and more rewarding in person than over Zoom. "Being here, seeing my colleagues and getting out of the house, it changes my mood for the whole week," said Jessica Lappin, speaking to AFP from her office at the Alliance for Downtown New York, where she is president. Few workers plan on being in offices Monday to Friday, nine to five, though. "The vast majority of employees say a hybrid system of two-to-three days working from home and two-to-three days working in the office is their preferred approach," said Deniz Caglar, co-author of the PwC report. Experts say companies should transform their offices away from places where employees come to send emails or make phone calls, which they can do at home, towards more appealing spaces suited for mentoring, camaraderie and fostering creativity. More https://www.france24.com/en/live-news/20210127-the-end-of-offices-new-york-s-business-districts-face-uncertain-future Now back to the Fed’s no billionaire left behind,” stock casino economy. But is it all coming to a gambler’s end. Asia shares undone by Wall St swoon, short seller squeeze January 28, 202112:22 AM By Wayne Cole SYDNEY/NEW YORK (Reuters) - Asian shares slid on Thursday while the safe-haven dollar rallied as a sudden sell-off on Wall Street and delays with coronavirus vaccines served as an excuse to book profits on recent hefty gains. MSCI’s broadest index of Asia-Pacific shares outside Japan skidded 1.8%, with valuations looking stretched given the index had risen more than 6% just this month. Japan’s Nikkei fell 1.3%, its sharpest drop since October, and Chinese blue chips lost 2.4% as liquidity tightened before the Lunar New Year holidays. South Korea eased 1.7% led by losses in Samsung after it reported earnings. Even the tech darlings were not immune with Facebook down despite reporting earnings well above expectations. Apple Inc also handily beat forecasts, yet its shares lost 3% after the bell. There was a hint of resilience as U.S. stock futures pared steep early losses, leaving Eminis for the S&P 500 off 0.2% and NASDAQ futures 0.3%. EUROSTOXX 50 futures dipped 0.3% and FTSE futures 0.7%. There was no obvious trigger for the rout, rather many seemed to have rushed for the exits at the same moment in a market that had been priced for perfection. Dealers said highly leveraged investors were taking profits where they could to cover losses elsewhere, leading to sharp falls in a lot of overcrowded trades. Some pointed a finger at retail investors who had forced a massive squeeze on hedge funds with short positions in stocks such as GameStop. GameStop and several other highly-bid stocks later retreated in extended trade after Reddit briefly restricted access to its popular WallStreetBets site. “The Reddit army should prepare for stricter rules and regulation shortly, which should kill the idea that what happened with GameStop will happen with others,” said Edward Moya, a senior market analyst at OANDA. The dogged optimism that vaccines would heal the global economy in just a few months has been strained by the outbreak of new variants and problems with the distribution of shots in the United states and Europe. More https://www.reuters.com/article/us-global-markets/asia-shares-undone-by-wall-street-swoon-short-seller-squeeze-idUSKBN29X01E Hedge-Fund Titans Lose Billions to Reddit Traders Running Amok By Katherine Burton , Hema Parmar, and Melissa Karsh 28 January 2021, 02:28 GMT · Point72, D1 and Melvin among industry leaders hit with losses · Day-traders continued to pile into shorted stocks on Wednesday
January 28, 202112:22 AM By Wayne Cole SYDNEY/NEW YORK (Reuters) - Asian shares slid on Thursday while the safe-haven dollar rallied as a sudden sell-off on Wall Street and delays with coronavirus vaccines served as an excuse to book profits on recent hefty gains. MSCI’s broadest index of Asia-Pacific shares outside Japan skidded 1.8%, with valuations looking stretched given the index had risen more than 6% just this month. Japan’s Nikkei fell 1.3%, its sharpest drop since October, and Chinese blue chips lost 2.4% as liquidity tightened before the Lunar New Year holidays. South Korea eased 1.7% led by losses in Samsung after it reported earnings. Even the tech darlings were not immune with Facebook down despite reporting earnings well above expectations. Apple Inc also handily beat forecasts, yet its shares lost 3% after the bell. There was a hint of resilience as U.S. stock futures pared steep early losses, leaving Eminis for the S&P 500 off 0.2% and NASDAQ futures 0.3%. EUROSTOXX 50 futures dipped 0.3% and FTSE futures 0.7%. There was no obvious trigger for the rout, rather many seemed to have rushed for the exits at the same moment in a market that had been priced for perfection. Dealers said highly leveraged investors were taking profits where they could to cover losses elsewhere, leading to sharp falls in a lot of overcrowded trades. Some pointed a finger at retail investors who had forced a massive squeeze on hedge funds with short positions in stocks such as GameStop. GameStop and several other highly-bid stocks later retreated in extended trade after Reddit briefly restricted access to its popular WallStreetBets site. “The Reddit army should prepare for stricter rules and regulation shortly, which should kill the idea that what happened with GameStop will happen with others,” said Edward Moya, a senior market analyst at OANDA. The dogged optimism that vaccines would heal the global economy in just a few months has been strained by the outbreak of new variants and problems with the distribution of shots in the United states and Europe. More https://www.reuters.com/article/us-global-markets/asia-shares-undone-by-wall-street-swoon-short-seller-squeeze-idUSKBN29X01E Hedge-Fund Titans Lose Billions to Reddit Traders Running Amok By Katherine Burton , Hema Parmar, and Melissa Karsh 28 January 2021, 02:28 GMT · Point72, D1 and Melvin among industry leaders hit with losses · Day-traders continued to pile into shorted stocks on Wednesday
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