The daily business briefing: May 21, 2021
Jobless claims fall to pandemic-era low, Dutch court orders Ghosn to repay Nissan-Mitsubishi $6.1 million, and more
Jobless claims fall to pandemic-era low of 444,000
The number of Americans filing new applications for unemployment benefits dropped to 444,000 last week, a new pandemic-era low, the Labor Department reported on Thursday. Economists surveyed by Dow Jones had expected a slightly higher number, 452,000. The number was down from 478,000 the previous week in a sign that hiring was strengthening as progress in administering COVID-19 vaccines was helping businesses rebound. The new data offset April's stunningly disappointing jobs report, which indicated that U.S. employers had added just 266,000 jobs. Economists had estimated the figure would come in at 1 million. "The steady decline in initial unemployment insurance claims over the past few months ... suggest that the April report understated the improvement in the labor market," wrote PNC chief economist Gus Faucher.
Dutch court orders Ghosn to repay $6.1 million to Nissan-Mitsubishi
A Dutch court on Thursday ordered fugitive former car executive Carlos Ghosn to repay $6.1 million in earnings to Nissan and Mitsubishi. Ghosn initiated the case, claiming that the Japanese automakers, whose joint venture was registered in the Netherlands, had violated Dutch labor laws when they ousted him as chairman in 2019. Ghosn had demanded $18 million in missed pay and severance. The Amsterdam district court sided with Nissan and Mitsubishi, ruling that Ghosn didn't have a valid employment agreement with the joint venture because the two companies' boards hadn't provided the required consent, and that he had wrongfully set his own compensation. A spokesperson for Ghosn, who fled Japan ahead of a trial for allegedly underreporting his salary and spending company money on himself, said he would appeal.
Treasury unveils plan to raise $700 billion by closing 'tax gap'
The Treasury Department announced Thursday that it plans to raise $700 billion in revenue by cracking down on taxpayers who owe the federal government more than they pay. Treasury officials said they would use several strategies to close the "tax gap," including increasing reporting requirements, giving auditors new tools, and imposing new rules on cryptocurrency. The effort will require billions of dollars in additional spending by the Internal Revenue Service, but is expected to yield a windfall that will help pay for some of the Biden administration's multi-trillion-dollar spending proposals, including President Biden's jobs and infrastructure proposals. Some of the initiatives would require approval by Congress. Tightening enforcement is considered a more politically palatable way to raise money than raising taxes.
Stock futures edge up after Wall Street breaks 3-day losing streak
U.S. stock index futures rose slightly early Friday after snapping a three-day losing streak on Thursday. Futures for the Dow Jones Industrial Average and the S&P 500 were up by about 0.3 percent several hours before the opening bell. Futures tied to the tech-heavy Nasdaq gained 0.2 percent. The Dow gained nearly 0.6 percent on Thursday. The S&P 500 and the Nasdaq jumped by 1.1 percent and 1.8 percent, respectively, led by technology shares. Netflix and Apple jumped by more than 2 percent. Microsoft, Facebook, and Google-parent Alphabet rose by more than 1 percent. Shares of Tesla and other speculative stocks gained as bitcoin prices recovered somewhat after a volatile Wednesday. A larger-than-expected drop in jobless claims boosted sentiment.
Biden orders strategy to address financial threat from climate change
President Biden signed an executive order Thursday instructing federal agencies to come up with a plan to identify and address financial risks the government and companies face from climate change. Biden ordered agencies to propose concrete steps, such as new regulations on banking, housing, and agriculture, to protect workers' savings and create jobs while lowering greenhouse gas emissions that fuel climate change. "Extreme weather related to climate change can disrupt entire supply chains and deprive communities of food, water, or emergency supplies," the White House said in a statement. Biden has made addressing climate change a top administration priority. He has set a target of cutting U.S. greenhouse gas emissions by as much as 52 percent below 2005 levels by 2030, and reaching net-zero carbon emissions across the economy by 2050.