United Airlines plans to add more than two dozen new flights starting Memorial Day weekend, the latest sign that demand for leisure travel is picking up as the national vaccination rate moves higher.
Most of the new flights will connect cities in the Midwest to tourist destinations, such as Charleston, Hilton Head and Myrtle Beach in South Carolina; Portland, Maine; Savannah, Ga.; and Pensacola, Fla. United also said it planned to offer more flights to Mexico, the Caribbean, Central America and South America in May than it did during the same month in 2019.
The airline has seen ticket sales rise in recent weeks, according to Ankit Gupta, United’s vice president of domestic network planning and scheduling. Customers are booking tickets further out, too, he said, suggesting growing confidence in travel.
“Over the past 12 months, this is the first time we are really feeling more bullish,” Mr. Gupta said.
Airports have been consistently busier in recent weeks than at any point since the coronavirus pandemic brought travel to a standstill a year ago. Well over one million people were screened at airport security checkpoints each day over the past two weeks, according to the Transportation Security Administration, although the number of screenings is down more than 40 percent compared with the same period in 2019.
Most of the new United flights will be offered between Memorial Day weekend and Labor Day weekend aboard the airline’s regional jets, which have 50 seats. The airline said it would also add new flights between Houston and Kalispell, Mont.; Washington and Bozeman, Mont.; Chicago and Nantucket, Mass.; and Orange County, Calif., and Honolulu.
All told, United said it planned to operate about 58 percent as many domestic flights this May as it did in May 2019 and 46 percent as many international flights. Most of the demand for international travel has been focused on warm beach destinations that have less-stringent travel restrictions.
“That is one of the strongest demand regions in the world right now,” Mr. Gupta said. “A lot of the leisure traffic has sort of shifted to those places and it’s actually seen a boom in bookings.”
Delta Air Lines issued a similar update last week, announcing more than 20 nonstop summer flights to mountain, beach and vacation destinations. Both airlines have said in recent weeks that they have made substantial progress toward reducing how much money they are losing every day.
The labor market’s ability to improve as the economy recovers and the virus recedes will be tested Thursday morning when the government reports the latest data on unemployment claims.
Although the pace of vaccinations, as well as passage of a $1.9 trillion relief package this month, has lifted economists’ expectations for growth, the labor market has lagged behind other measures of recovery.
At 6.2 percent, the unemployment rate is still nearly three percentage points above where it was in February 2020, before the coronavirus arrived in force. Initial claims, counting regular unemployment insurance and emergency programs, have been at more than one million a week since the fall, partly because some workers have been laid off more than once.
Still, the easing of restrictions on indoor dining areas, health clubs, movie theaters and other gathering places offers hope for the millions of workers who were let go in the last 12 months. And the $1,400 checks going to most Americans as part of the relief bill should help spending perk up in the weeks ahead.
“We’re expecting to see sharp declines in jobless claims in the coming weeks as the service sector comes back online,” said Rubeela Farooqi, chief U.S. economist for High Frequency Economics. “The labor market will benefit from a reopening, but it will take time for a complete recovery.”
Esther George, the president of the Federal Reserve Bank of Kansas City, says that although the outlook for growth has improved as vaccinations increase and the government rolls out relief packages, the path of the pandemic remains a major question hanging over the U.S. and global economies.
“We’re not out of this yet,” Ms. George said in an interview on Wednesday. “It’s hard to know what the dynamics will be on the other side.”
Ms. George said she was focused on labor force participation as a sign of the job market’s strength more than the headline unemployment rate, which has fallen to 6.2 percent from a 14.8 percent peak but misses many people who aren’t looking for new jobs after losing theirs during the pandemic. Participation, the share of people working or looking, remains a hefty two percentage points below its prepandemic levels.
“That might be the thing I really watch in the coming months,” she said.
Ms. George expects inflation to “firm,” but that the process is likely to take a while, she said, and it is “too soon to say” whether it will end with a more meaningful rise. Some prominent economists have begun to warn that prices, which have been low for decades, could rise rapidly as the government spends big and the Fed keeps rates at rock bottom to support the economic recovery.
“Wages are a very telling factor in a story about inflation,” Ms. George said.
Many economists look for faster growth in compensation as a signal that inflation is sustainable, not just driven by short-lived supply constraints or temporary quirks in the data.
Ms. George’s colleagues, including Jerome H. Powell, the Fed chair, have been clear that they expect prices to move higher this year but will not necessarily see that as an achievement of their inflation goal. The Fed redefined its target last year and now aims for 2 percent annual price gains, on average, over time.
Ms. George did not venture a guess of when the Fed will hit its three criteria for raising interest rates: full employment, 2 percent realized price gains and the expectation of higher inflation for some time. Some Fed officials expect to raise rates next year or in 2023, but most of them expect the initial increase to come even later.
Companies harmed by the coronavirus pandemic can soon borrow up to $500,000 through the Small Business Administration’s emergency lending program, raising a cap that has frustrated many applicants.
“The pandemic has lasted longer than expected,” Isabella Casillas Guzman, the agency’s administrator, said on Wednesday. “We are here to help our small businesses, and that is why I’m proud to more than triple the amount of funding they can access.”
The change to the Economic Injury Disaster Loan program — known as EIDL and pronounced as idle — will take effect the week of April 6. Those who have already received loans but might now qualify for more money will be contacted and offered the opportunity to apply for an increase, the agency said.
The Small Business Administration has approved $200 billion in disaster loans to 3.8 million borrowers since the program began last year. Unlike the forgivable loans made through the larger and more prominent Paycheck Protection Program, the disaster loans must be paid back. But they carry a low interest rate and a long repayment term.
Normally, the decades-old disaster program makes loans of up to $2 million, and in the early days of the pandemic, the agency gave some applicants as much as $900,000. But it soon capped loans at $150,000 because it feared exhausting the available funding. That limit — which the agency did not tell borrowers about for months — angered applicants who needed more capital to keep their struggling ventures alive.
The agency has $270 billion left to lend through the pandemic relief program, James Rivera, the head of the agency’s Office of Disaster Assistance, told senators at a hearing on Wednesday.
Complaints of “Zoom fatigue” have emerged across industries and classrooms in the past year, as people confined to working from home faced schedules packed with virtual meetings and often followed up by long video catch-ups with friends, reports Anna Schaverien of The New York Times.
But Citigroup, one of the world’s largest banks, is trying to start a new end-of-week tradition meant to combat that fatigue: Zoom-free Fridays.
The bank’s new chief executive, Jane Fraser, announced the plan in a memo sent to employees on Monday. Recognizing that workers have spent inordinate amounts of the past 12 months staring at video calls, Citi is encouraging its employees to take a step back from Zoom and other videoconferencing platforms for one day a week, she said.
“The blurring of lines between home and work and the relentlessness of the pandemic workday have taken a toll on our well-being,” Ms. Fraser wrote in the memo, which was seen by The New York Times.
No one at the company would have to turn their video on for any internal meetings on Fridays, she said. External meetings would not be affected.
The bank outlined other steps to restore some semblance of work-life balance. It recommended employees stop scheduling calls outside of traditional working hours and pledged that when employees can return to offices, a majority of its workers would be given the option to work from home up to two days a week.
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Tribune Publishing’s board recommended that shareholders approve a purchase offer from the hedge fund Alden Global Capital over a higher bid from a Maryland hotel executive, according to a securities filing Tuesday. Alden, Tribune’s largest shareholder, agreed last month to buy the rest of the company at $17.25 per share and take it private in a deal that would value the company at $630 million. Last week, Stewart W. Bainum Jr., a hotel magnate, made an $18.50 per share offer for the whole company.
U.S. stock futures were flat on Thursday before the latest weekly data on state unemployment claims.
Initial claims, counting regular unemployment insurance and emergency programs, have been at more than one million a week since the fall, but economists are forecasting the numbers to fall as the vaccine rollout continues and the effects of the $1.9 trillion stimulus package emerge.
European stocks were lower. The Stoxx Europe 600 index was down 0.4 percent, the FTSE 100 in Britain fell 0.6 percent and the CAC in France fell 0.5 percent, and the DAX in Germany was 0.5 percent weaker.
Suez Canal
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Oil prices dropped. Futures of Brent crude, the European benchmark, fell 1.5 percent to $63.45 a barrel and futures of West Texas Intermediate, the U.S. benchmark, fell 1.8 percent to about $60 a barrel. On Wednesday, oil prices jumped more than 5 percent after a container ship got stuck in the Suez Canal, blocking one of the world’s key shipping routes, which is also an important artery for the flow of oil. On Thursday, efforts to dislodge the ship were ongoing as some 150 other ships were waiting on either side.
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The company trying to move the ship warned it could take weeks. Shipping has already been heavily disrupted by the pandemic sending freight prices soaring.
German lockdown U-turn
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As Europe grapples with an emerging third wave of the pandemic, Germany has canceled a strict five-day lockdown that was set to start at the beginning of April. Chancellor Angela Merkel said she took “ultimate responsibility” for the reversal, which came after a large backlash to the plan, even from within her own party, and anger from retailers and restaurants.
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“In the near term, this avoids the negative economic consequences of a lockdown,” Paul Donovan, an economist at UBS Global Wealth Management, wrote in a note. But over a longer a period of time, markets will question whether this will just delay Germany’s ability to restrain the virus and slow down the recovery, he added.
Elsewhere in markets
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Nike shares dropped 4 percent in premarket trading and H&M shares fell nearly 3 percent in Stockholm after Chinese social media users called for a boycott of the companies. The two fashion retailers had published statements expressing concern over reports of forced labor in Xinjiang. Nike’s statement said the company didn’t source cotton from the region but the online attacks have called this a boycott of the region’s cotton farmers.
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