The S&P 500 added to its gains this week, rising nearly 1 percent in early trading on Tuesday and following global shares higher after some positive economic data out of China.
European indexes were all higher, with Britain’s FTSE 100 up more than 1 percent and Germany’s Dax about 0.5 percent higher. Most Asian markets closed higher, with Hong Kong’s Hang Seng gaining 0.4 percent and South Korea’s Kospi 0.7 percent. In Japan, the Nikkei shed 0.4 percent.
Oil snapped out of the doldrums, with both Brent crude and West Texas Intermediate gaining more than 1.5 percent. The yield on U.S. 10-year Treasury notes rose by about half a basis point. Gold was 0.4 percent higher.
Fresh data out of China showed that the country’s economy is beginning to pick up steam. Industrial output rose 5.6 percent in August, the most in eight months, and retail sales grew 0.5 percent from a year ago, for the first time this year.
“Strong external demand, a further recovery from the pandemic and pent-up demand from the floods all contributed to the robust activity data in August,” said Ting Lu, chief China economist at Nomura, according to Reuters.
Industrial production in the U.S. rose 0.4 percent in August, data released by the Federal Reserve on Tuesday showed. That’s a much slower pace than in June and July when production rose by 6.1 percent and 3.5 percent.
On Monday, stocks on Wall Street had rebounded from last week’s sell-off with the S&P 500 climbing more than 1 percent. The gains came after the S&P 500 had fallen nearly 5 percent over the previous two weeks amid a pullback in shares of large technology companies.
Britain’s unemployment rate, which held steady through the early months of the pandemic thanks to the government’s furlough program that keeps people in their jobs, has started to increase.
The rate rose to 4.1 percent for the May-to-July period, the Office for National Statistics said on Tuesday, up from about 3.9 percent. For months, the jobless rate had been held down by the furlough program and by grants for self-employed workers, which “shielded the labor market from the worst consequences of the pandemic,” the statistics agency said.
The ranks of the jobless were also low because many of the people who did lose jobs in the spring were more likely to choose not to look for new work while the economy was in a lockdown, and so were counted as economically inactive.
As the British economy emerged out of lockdown in June and July, some of those people have re-entered the labor market. Although some have found jobs, others have not, helping raise the unemployment rate.
Overall, the agency’s data showed a labor market under the continuing strains of the pandemic.
Despite government support programs, in August there were 695,000 fewer payrolled employees than in March, a drop of 2.4 percent.
Young people under 25 have been particularly hard hit, continuing to record lower levels of employment as older age groups begin to recover.
Layoffs are rising. From May to July, there were 48,000 more redundancies than in the preceding three months, the biggest three-month jump since 2009. There are concerns that this is just the start of a wave of layoffs when the furlough program ends in October. The Institute for Employment Studies estimates there will be 650,000 redundancies in the second half of this year.
The persistently low unemployment rate in Britain stood in contrast to the United States, where the rate climbed above 14 percent in April as people were laid off during the height of state lockdowns and sought government help through unemployment benefits.
Businesses are trying to recover during the pandemic while ensuring the safety of their workers and customers, but two obstacles are slowing their progress: access to coronavirus testing and long delays in receiving results.
Some have found a reliable workaround, writes The New York Times’s Noam Scheiber:
Through a growing number of intermediaries, they can generally obtain test results within one to three days, often by circumventing large national labs like Quest and LabCorp that have experienced backlogs and relying on unused capacity at smaller labs instead.
The intermediaries occupied various corners of the health care galaxy before the pandemic, like offering treatment on behalf of insurance companies or providing employee access to human resources data. Now they are addressing what Rajaie Batniji, an executive at one of the companies, calls “a supply-chain optimization failure.”
“The bottleneck in the crudest terms is: Are you routing tests to processing labs that can process it immediately?” said Dr. Batniji, a physician and co-founder of Collective Health, which administers health plans for employers and created a separate testing and screening product during the pandemic.
The solution often means turning to labs in areas where the spread of the virus is relatively contained, said Daniel Castillo, the chief medical officer of Matrix Medical Network, which is among the companies connecting businesses with laboratories.
“We might send a test across the country — fly it to Maryland from Arizona,” Dr. Castillo told Mr. Scheiber.
But costs can add up, and decisions about testing reveal the economics of a business and the value it places on driving down workplace transmission. Businesses for which an outbreak among employees would be extremely costly are generally the most likely to seek out tests.
“If there is a significant probability of a shutdown, it’s a no-brainer — you’re going to do everything you can privately to stop it,” said Jonathan Kolstad, an economist at the University of California, Berkeley.
Hotel executives — including some of President Trump’s friends and donors — are waging an intense lobbying campaign in hopes of receiving a huge bailout from Washington.
The pandemic has decimated the travel industry, sapping hotels of revenue. As a result, some investors are struggling to make payments on billions of dollars in debt they took on to acquire properties.
Now the executives and their lobbyists are trying to persuade the Trump administration, the Federal Reserve and Congress to rescue hundreds of hotel industry players. Arguing that a bailout will save thousands of jobs and help local economies, they are asking that existing coronavirus relief efforts be extended to the commercial real estate sector, which so far has been cut off from most of the stimulus money.
But industry lobbyists acknowledge that the effort could create the appearance of a conflict of interest for Mr. Trump, who owns his own chain of luxury hotels.
“The idea of bailing out owners of real estate does not even make sense to me,” said Ethan Penner, a real estate investor. “These businesses should be allowed to fail.”
Hotel employees have also argued through their union that rescuing investors who turned to Wall Street to finance hotel buying sprees will not save jobs.
“Jobs are driven by occupancy, and only ending the pandemic can fix that,” said Gwen Mills, the secretary-treasurer of Unite Here, a union that represents 300,000 workers at hotels, casinos, cafeterias and other retail outlets.
As it gears up for what is expected to be a busy holiday season, FedEx said it would beef up its staffing by increasing hours for existing employees and hiring new ones. “We expect to add more than 70,000 positions in the lead-up to this peak season, with the majority of those added to the FedEx Ground network,” the company said in a statement posted on its website on Monday.