The daily business briefing: August 5, 2021
ADP data shows smallest hiring gain since February, Mexico sues gun manufacturers over flow of illegal weapons, and more
ADP data shows companies added fewer jobs than expected in July
U.S. companies added 330,000 jobs last month, down from a revised 680,000 gain in June, according to ADP Research Institute data released Wednesday. The increase was the smallest since February. It fell far short of the 690,000 gain economists had expected. The broad hiring slowdown was particularly sharp in the leisure and hospitality industry, which suffered severely from coronavirus shutdowns. "July payroll data reports a marked slowdown from the second quarter pace in jobs growth," Nela Richardson, ADP's chief economist, said in a statement. "Bottlenecks in hiring continue to hold back stronger gains, particularly in light of new COVID-19 concerns tied to viral variants." The data came ahead of the government's Friday July jobs report, which is expected to show a gain of 718,000 jobs.
Mexico sues U.S. gun manufacturers over flow of illegal weapons
The Mexican government on Wednesday filed a lawsuit against U.S.-based gun manufacturers Smith & Wesson, Barrett Firearms Manufacturing, Beretta USA, Glock, and Colt's Manufacturing Co. over the flow of illegal weapons into Mexico. The complaint, filed in Boston federal court, accuses the companies of lax controls and requests unspecified financial compensation. Mexican authorities say the roughly 2.5 million U.S. guns illegally transported into Mexico in the last decade have fueled a sharp rise in murders there. Mexico strictly regulates gun sales. "If we don't file a suit like this and win it, they're never going to understand," Mexico's foreign minister, Marcelo Ebrard, said. The companies did not immediately respond, but the National Shooting Sports Foundation, a trade association, rejected allegations of negligence.
Uber loss narrows as ridership rebounds
Uber reported Wednesday that ridership bounced back strongly after 2020 pandemic-induced lows, helping to narrow its quarterly loss to $509 million in the second quarter compared to $837 million in the same period a year earlier. Uber Eats, the company's food-delivery service, had a strong quarter despite a resumption of in-restaurant dining following the lifting of most restrictions aimed at curbing coronavirus infections. Despite the signs of improvement, the loss was greater than the $322 million analysts had estimated, due partly to incentives the company used to attract drivers.
Stock futures rise slightly as investors await trade, jobs data
U.S. stock futures edged higher early Thursday after disappointing hiring data stoked concerns about the economic recovery. Futures tied to the Dow Jones Industrial Average, the S&P 500, and the Nasdaq were up by about 0.2 percent several hours before the opening bell. The Dow closed down by 0.9 percent on Wednesday after ADP Research Institute data showed that U.S. companies added 330,000 jobs in July, far short of the 690,000 expected. The S&P 500 fell by 0.5 percent. The tech-heavy Nasdaq rose by 0.1 percent. The Labor Department's July jobs report, which usually has a bigger impact on markets, is due out on Friday. On Thursday, new trade-deficit data and unemployment claims could provide fresh hints on the state of the recovery.
Biden to set goal for half of U.S. vehicles sold to be zero-emission by 2030
President Biden plans to sign an executive order Thursday setting a non-binding goal for up to half of the automobiles sold in the U.S. to be zero-emission vehicles by 2030, according to senior administration officials. Automakers, including General Motors and Ford, reportedly have agreed to aim for electric vehicles to account for up to 50 percent of their U.S. sales by then, up from less than 2 percent overall in the last three years. The target is part of a series of policies Biden is using to boost EVs, fight climate change, and compete with China. Executives from GM, Ford, and Jeep-maker Stellantis, along with United Auto Workers union leaders, are expected to join Biden Thursday to show support as he signs the order.