US job losses in May could rise to 30 million
The epic damage to America’s job market from the viral outbreak will come into sharper focus Friday when the government releases the May employment report. Eight million more jobs are estimated to have been lost. Unemployment could top 20%.
And potentially fewer than half of all adults may be working. Beneath the dismal figures will be signs that job cuts, severe as they are, are slowing as more businesses gradually or partially reopen. Still, the economy is mired in a recession, and any rebound in hiring will likely be painfully slow. Economists foresee unemployment remaining in double-digits through the November elections and into 2021.
Pilgrim’s Pride CEO among indicted for price fixing
The CEO of Pilgrim’s Pride is one of four current and former chicken company executives who have been indicted on charges of price-fixing. The Justice Department said a federal grand jury in Colorado found that executives from Colorado-based Pilgrim’s Pride and Georgia-based Claxton Poultry conspired to fix prices and rig bids for broiler chickens from at least 2012 to 2017.
Among those charged is Pilgrim’s Pride CEO Jayson Penn. They are the first executives to be charged in a long-running investigation of price-fixing in the chicken industry. The executives could face 10 years in prison and a $1 million fine.
Survey: May layoffs far fewer than expected
U.S. businesses shed 2.76 million jobs in May, as the economic damage from the historically unrivaled coronavirus outbreak stretched into a third month. The payroll company ADP reported Wednesday that businesses have let go of a combined 22.6 million jobs since March.
The virus forced employers to shutter offices, factories, gyms and schools, while demand from consumers for gasoline, clothing, airline tickets, hotel rooms and restaurant meals quickly vanished.
Stock rally rolls on; S&P 500 back within 8% of high
Stocks rallied again on Wall Street Wednesday, and the S&P 500 climbed back to where it was just one week after it set its all-time high earlier this year. The index rose 1.4% for its fourth straight gain as lockdowns loosen around the world and raise hopes for a coming economic recovery.
Treasury yields also strengthened in a sign of improved confidence after several reports suggested that while the U.S. economy is still getting pummeled, it may not be as bad as economists had feared. The reports touched on job losses at private employers, activity in the service sector and factory orders.
US service sector contracts for second month in May
The U.S. services sector shrank for a second month in May as the coronavirus pandemic triggered shutdowns and layoffs around the country. The Institute for Supply Management said Wednesday that its service sector index stood at 45.4 in May, up slightly from an April reading of 41.8.
Any reading below 50 signals that the service sector, where the majority of Americans work, is in contraction. The April decline broke a string of more than 10 years of expansion in the services sector.