The daily business briefing: February 18, 2021
Retail sales jump exceeds expectations, federal agents seize 10 million fake 3M brand N95 masks, and more
Retail sales rise by more than expected in post-holiday rebound
Retail sales jumped by 5.3 percent in January compared to a month earlier as the economy picked up thanks largely to coronavirus stimulus checks. The Commerce Department reported Wednesday that the increase, which was greater than economists had expected, came after three months of decline during the critical holiday season. It was the biggest gain since last June, when many businesses were reopening after the first round of restrictions designed to curb the spread of the coronavirus pandemic. The latest figures added to indications that the economy was starting to bounce back after the winter coronavirus surge. "Consumer spending is firing on all cylinders," said James Knightley, an economist at ING Financial Markets LLC.
Federal agents seize 10 million fake N95 masks
Over the last few weeks, federal agents have seized more than 10 million counterfeit 3M brand N95 masks. The masks have not been tested to see if they meet N95 standards, Homeland Security officials said on Wednesday, and could harm first responders treating COVID-19 patients. "Not only do they give a false sense of security, how dangerous is the exposed individual without any protective gear?" Homeland Security Secretary Ali Mayorkas said. "They have no utility whatsoever." 3M is one of the largest producers of the N95 mask, and some hospitals and medical facilities that are desperate for personal protective equipment have been going around the normal supply chain and end up dealing with scammers. Investigators have contacted about 6,000 possible victims in more than a dozen states to ask them to stop using the masks they have.
Study: 20 percent might work from home indefinitely
Twenty percent of business travel won't return after the pandemic, and roughly 20 percent of workers might remain remote indefinitely, according to a McKinsey Global Institute report scheduled to be released later this week that was previewed by The Washington Post on Wednesday. Many economists warn that millions of jobs affected by the pandemic might not come back, because necessity forced companies to find ways to make do with smaller staffs, such as replacing some employees through automation. Travel cutbacks also will reduce demand for hotel, restaurant, and retail workers. As Federal Reserve Chair Jerome Powell warned in November: "We're recovering, but to a different economy." Susan Lund, head of the McKinsey Global Institute, said the changes mean "we're going to need a lot more short-term training and credentialing programs."
Pfizer, Moderna vaccines show lower effectiveness against South Africa strain
The Pfizer-BioNTech and Moderna coronavirus vaccines showed reduced effectiveness against the new, more infectious strain first detected in South Africa, according to a Wednesday report in the New England Journal of Medicine. The vaccines appeared to mobilize antibodies needed to neutralize the coronavirus, but researchers don't know what level of neutralization is necessary to protect people against the variant. Pfizer said the shot appeared to generate enough antibodies to neutralize the new strain, but that it was working on a booster shot to better fight it. The news came ahead of a U.S. government report released Thursday showing that life expectancy in the United States fell by a full year in the first half of 2020 as the pandemic hit. Life expectancy in the Black population fell by 2.7 years.
Stock futures edge lower after Dow's latest record
U.S. stock index futures slipped early Thursday ahead of the release of weekly unemployment data. Futures for the Dow Jones Industrial Average were down by 0.2 percent several hours before the opening bell. S&P 500 and Nasdaq futures dropped by 0.4 percent and 0.7 percent, respectively. The Dow set the latest in a string of records on Wednesday, closing up by 0.3 percent thanks to gains by Chevron and Verizon. The S&P 500 and the tech-heavy Nasdaq fell. On Thursday, investors will be watching weekly unemployment data for fresh signs of economic recovery as coronavirus cases fall. Economists surveyed by Dow Jones expect weekly initial jobless claims to fall slightly to 773,000.