The daily business briefing: May 31, 2022
The EU agrees to ban most Russian oil imports, Memorial Day weekend travel rises, and more
EU agrees to Russian-oil embargo
European Union leaders agreed Monday to ban most imports of Russian oil. The embargo covers oil delivered by sea, with an exemption for crude transported by pipelines that secured landlocked Hungary's support to win the required unanimity. European Commission President Ursula von der Leyen said the move, intended to punish Russia for invading Ukraine, would "effectively cut around 90 percent of oil imports from Russia to the EU by the end of the year." Europe gets about a quarter of its oil from Russia. U.S. crude futures jumped by more than 3 percent early Tuesday after the agreement was announced. Prices had already surged to a two-month high as China tentatively lifted COVID-19 shutdowns in Shanghai, signaling increased demand.
Holiday weekend travel jumps but remains below pre-pandemic levels
Travel jumped over the Memorial Day weekend, rebounding from a sharp drop in the last two years during a holiday weekend marking the unofficial start of summer. "We're approaching pre-pandemic numbers," said Andrew Gobeil, a spokesperson for Atlanta's Hartsfield–Jackson International Airport, the world's busiest airport. Los Angeles International Airport expected about 200,000 passengers per day, a 40 percent increase over the 2021 holiday weekend but still down 25 percent compared to 2019. "We're not back to normal here," said Heath Montgomery, an airport spokesperson. More than 39 million Americans are expected to travel at some point over the weekend, one of the busiest travel periods of the year.
Labor shortage to force many businesses to cut summer hours
A chronic labor shortage is forcing many businesses — including tourist restaurants, hotels, and summer camps — to reduce operations or shut down this summer, The Wall Street Journal reported Monday. Less than half of Phoenix's public pools are opening because of a lifeguard shortage, and coastal Maine beach trolleys are shutting down because of a lack of drivers, according to the Journal. The hiring troubles, which started a year ago as COVID-19 vaccinations became available and businesses reopened, are pushing up "labor costs, adding to inflationary pressure on items including airfares and beach menus," the Journal said. "It's like, 'what, no one is applying?'" said Mark Lawrence, owner of Polar Cave Ice Cream Parlour in Mashpee, Massachusetts, a Cape Cod town.
Stock futures fall after Wall Street snaps losing streak
U.S. stock futures dropped early Tuesday after last week's gains. Futures tied to the Dow Jones Industrial Average and the S&P 500 were down 0.6 percent at 6:30 a.m. ET. Nasdaq futures were down 0.3 percent. All three of the main U.S. indexes rose more than 6 percent last week. The Dow snapped an eight-week losing streak, its longest since 1923. The S&P and the Nasdaq had fallen the seven previous weeks. The Dow and the S&P 500 jumped 1.8 percent and 2.5 percent, respectively, on Friday with a boost from solid earnings reports from several retailers, and an inflation report showing price hikes easing. The Nasdaq shot up by 3.3 percent thanks partly to encouraging reports from tech companies.
Report: The Platinum Jubilee could shave half a point off the U.K.'s GDP
The bank holiday celebrating Queen Elizabeth II's 70 years on the throne could reduce the United Kingdom's second-quarter gross domestic product by a half-percentage point, tipping the country's economy into a contraction, Bloomberg Economics estimated, based on previous holidays, in a report released Monday. The cost of the Thursday holiday marking the queen's Platinum Jubilee will be compounded by the drag of people who will take Friday off to have a four-day weekend. The U.K. economy will shrink by 0.4 percent in the quarter, according to the forecast by economist Dan Hanson, but offices and factories will make up lost output in later months, helping to stave off a recession, according to the report.