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Facts vs. conspiracy theories
On Friday, economists expected the numbers for May to show millions more jobs lost and a jump in the unemployment rate. Turns out, the data showed a 2.5 million rise in jobs and a drop in the unemployment rate, from 14.7 percent in April to 13.3 percent in May. The markets rarely get it so wrong on such a high-profile report.
What happened? The Times’s Ben Casselman delved into the numbers to make sense of it all, and helpfully summarized the highlights of his reporting on Twitter, with details from the data and an explanation of how the numbers are collected. In short, the numbers can be trusted and there is no government conspiracy, as some overheated social media conversations suggested over the weekend.
A glimmer of hope. The data clearly showed an earlier-than-expected rebound in the labor market as a whole, with hiring up in a range of industries, “possibly signaling that the damage did not spread as deeply into the economy as many feared,” Ben writes.
And a note of caution. The job growth reflected mostly laid-off or furloughed workers returning to their jobs — the number of people who reported permanently losing their jobs was higher in May. And many employees who are back at work now have reduced hours. The unemployment rate for black and Asian workers continued to rise.
Make no mistake. Despite the (mostly) positive numbers, the economy is experiencing an “epic collapse in demand,” The Times’s Neil Irwin writes. There were still nearly 20 million fewer jobs in May than there were in February:
The stimulus worked. The numbers suggest that federal rescue programs helped limit the damage. But the durability of the recovery isn’t yet clear, and if policymakers remove stimulus too soon — in part, as a reaction to the apparent upturn in the data — the gains may not last, write Jim Tankersley, Emily Cochrane and Jeanna Smialek in a Times analysis.
• Rethinking the trade-offs between reopening and containing the coronavirus is also underway, notes The Time’s Eduardo Porter, with more targeted approaches potentially offering a better way to protect public health with less economic pain.
‘Corporate America has failed Black America’
Despite sympathy and support from companies for the protests and anger that followed the killing of George Floyd in police custody, top black executives say that the business world isn’t doing enough to help black Americans. They told The Times’s David Gelles that much more work must be done, and suggested where to start.
“It’s complete B.S. It’s performative,” the law professor Dorothy Brown said of most corporate statements issued in the wake of the protests. Several companies that publicly backed racial justice, like Amazon and the N.F.L. (more on the football league below), have taken actions that make their proclamations ring hollow, David writes.
The facts are plain to see. Today, fewer than half of black adults in America have a job; black workers — even highly educated ones — make less money than white colleagues; and top American corporate giants are conspicuously lacking black leaders.
• Members of corporate America “have generally not distinguished themselves as moral leaders,” Ursula Burns, the former C.E.O. of Xerox, said.
Here’s what companies should do to avoid what Darren Walker, the president of the Ford Foundation, called “token responses to systemic problems”:
• Disclose diversity figures. Just 40 percent of companies make public their employees’ gender and racial makeup, according to Just Capital. “In business, we set targets on everything,” said Mellody Hobson, co-C.E.O. of Ariel Investments.
• Push for greater diversity inside and outside, including board members and advisers like lawyers, bankers and contractors.
• Expand internship classes and reserve many of those spots for young black workers, giving them mentors and sponsors as well.
• Tie executive pay to diversity metrics.
The final word from Wes Moore, the chief executive of Robin Hood, a New York charity combating poverty:
There seems to be a quest to get back to a level of normalcy. But that’s not good enough, because normalcy meant exclusion, it meant looking at disparity and shrugging. The thing we should be aiming for is a new normal that’s grounded in justice — not just criminal justice, but economic justice.
Behind the N.F.L.’s reversal on protests
Nearly four years ago, the National Football League drew controversy over its opposition to Colin Kaepernick’s kneeling during the national anthem to protest police brutality. Here’s how the league changed course this time around, according to The Wall Street Journal.
• Players bitterly criticized an initial statement by Roger Goodell, the league’s commissioner, on May 30.
• Comments by Drew Brees, the New Orleans Saints’ quarterback, criticizing protests during the national anthem — for which he later apologized — prompted two N.F.L. employees to risk their jobs by helping players create a video calling out the N.F.L.
• On Friday, the league held a town hall, where black staff members spoke about their experiences with racism. One unnamed attendee said Mr. Goodell “was very, very emotional.”
• Mr. Goodell then tweeted a video in which he said, “We were wrong for not listening to N.F.L. players earlier,” adding that the league backed players’ right to peacefully protest.
The league still expects tensions to flare when the new season starts, The Journal reports. Players are expected to renew protests, and President Trump has again criticized athletes who kneel during the national anthem.
Take Note: Risk factors
Over the past week, as protests spread from large cities to smaller towns, Corporate America weighed in with both money and messages expressing solidarity with the protesters.
Some companies have also begun to warn about social or civic unrest in their corporate filings:
• The video game retailer GameStop, which suffered looting in its stores in cities including Minneapolis and New York, warned about the impact of “social unrest” when it released quarterly earnings last Thursday. The company said that it had closed around 90 of the 3,500 stores that had reopened in the U.S. after loosening of pandemic lockdowns; 30 stores would remain closed for the “foreseeable future given extensive property damage.”
• Ollie’s Bargain Outlet, which runs 363 stores across the U.S., warned for the first time in a quarterly filing last week about the “inability to operate our stores due to civil unrest and related protests or disturbances.”
• RH, which operates about 100 Restoration Hardware stores, warned about “business disruption due to the recent civil unrest in many markets.”
In the past, warnings about civil unrest came mostly from multinationals with extensive international operations. These all came from companies whose operations are largely, or exclusively, in the U.S.
And it isn’t just retailers. Regions Financial, a bank based in Birmingham, Ala., that has nearly 1,500 branches in the South and Midwest, warned about “civil unrest” for the first time in a routine underwriting agreement it filed on Friday. The lawn care company Toro, which is based in the Minneapolis suburb of Bloomington, warned last Thursday about “protests and/or social unrest” for the first time.
But with outbreaks of violence at demonstrations dropping sharply in recent days, these sorts of warnings may be outliers instead of a new routine.
The week ahead
• Today marks the first phase of New York City’s reopening, with retailers, construction sites and manufacturers tentatively getting back to business.
• The Federal Reserve provides a set of updated economic forecasts on Wednesday, which markets will scour for clues on how long interest rates will remain at historic lows. Few expect any hikes before late 2022, at the earliest.
• Shares in the Chinese online gaming company NetEase begin trading in Hong Kong on Thursday, as part of a secondary listing that could raise up to $3 billion. Another Chinese business that trades in New York, the e-commerce giant JD.com, is expected to introduce a secondary Hong Kong listing this week, as growing tensions between Washington and Beijing make companies worried about their access to capital in the U.S.
• Among the earnings reports this week, Tiffany could provide an update on its takeover by LVMH, in data released tomorrow; AMC Entertainment, also tomorrow, will reveal the scope of the damage done by pandemic lockdowns to the movie theater business; and there will also be updates from Chewy (tomorrow), Adobe (Thursday) and Lululemon (Thursday).
The speed read
• The restaurant chain Chuck E. Cheese is reportedly in talks with lenders about financing — and is also exploring a bankruptcy filing. (WSJ)
• An article about AstraZeneca’s reported interest in acquiring Gilead raised the prospect of more pharmaceutical deals in the wake of the pandemic. (Bloomberg)
Politics and policy
• Minneapolis will dismantle its police force, with the city council pledging to create a new system of public safety. (NYT)
• Ray McGuire, one of Citigroup’s top deal makers, has reportedly taken further steps toward a run for New York City mayor. (CNBC)
• Internal documents show that some Facebook employees felt the company was in an “abusive relationship” with President Trump. (WaPo)
• “You’re the kind of customer I’m happy to lose,” Jeff Bezos wrote in response to a Amazon user who used offensive racial language in a message objecting to the company’s support of the protests. (@jeffbezos)
Best of the rest
• A look at the unease in American newsrooms — including The Times — over coverage of racial injustice. (NYT)
• Miguel McKelvey, WeWork’s other co-founder, plans to leave the company at the end of the month. (CNBC)
• “Is New York City Worth It Anymore?” (NYT)
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