Here’s what you need to know:
Recognition…Jim Wilson / The New York Times
A new snapshot of the labor market and the state of economic recovery will be available on Thursday when the Department of Labor releases its weekly unemployment claims report.
With coronavirus cases continuing to decline, economists expect new government entitlements to decline again over the past week, despite staying extraordinarily high. While the economic crisis is likely to have peaked, the permanent damage to the labor market is uncertain. That could become clearer in the coming months.
Unemployment claims “really have been elevated for a long time,” said Diane Swonk, chief economist at the accounting firm Grant Thornton. “What will be crucial in the future is that they eventually sink or that there are longer-term problems?”
One indicator that economists observe is the number of people requesting extended benefits. This is an indication that they have reached their regular unemployment benefits, which in many states last 26 weeks.
“What worries us is that more and more people who drop out of regular claims are making extended claims,” said Gregory Daco, chief US economist at Oxford Economics. “That’s not a good sign.”
Congress continues to work on a $ 1.9 trillion aid package proposed by President Biden. However, the urgency will be heightened by the expiry of the additional unemployment benefit in mid-March. The Biden proposal would extend it until September.
There have been some positive signs on the job market in the past few days. Retail sales rose 5.3 percent in January, a bigger-than-expected increase, most likely due to the recent round of stimulus checks.
AnnElizabeth Konkel, Careers Economist Indeed, said retail job postings on Indeed were 2.6 percent higher than they were in February 2020. Overall, job postings on the site were up 3.9 percent.
But the economy is still weak. The Labor Department’s January employment report, which saw only 49,000 jobs created, confirmed the devastation of the pandemic. Of the 22 million jobs that have disappeared, around 10 million will be lost.
Recognition…Anna Moneymaker for the New York Times
Thursday’s hearing on the recent GameStop trading frenzy held by the House Committee on Financial Services at noon is likely to spark populist anger from both parties, targeting both popular trading app Robinhood and the short sellers who are opposing direct the video game dealer.
Alexandria Ocasio-Cortez, a New York Democrat and a member of the financial services panel that holds the hearing, said Robinhood’s decision to close some business with GameStop was “unacceptable” amid the frenzy. Representative Rashida Tlaib, a Michigan Democrat who is also on the committee, called the decision “beyond the absurd” and accused the app of “blocking the ability to trade to protect hedge funds.”
The frustration with Robinhood and the hedge funds reflects a national backlash against the power of the country’s largest corporations. Over the past decade, more and more lawmakers from both parties have accused the American economy of failing their voters and initiating a political reckoning from Wall Street to Silicon Valley.
The anger against Robinhood is non-partisan. Senator Ted Cruz, Republican from Texas, approved Ms. Ocasio-Cortez’s comments in January. “Free the traders on @RobinhoodApp,” Republican Senator Marsha Blackburn from Tennessee said in a tweet of her own.
Return at noon for video and live coverage of the hearing.
Recognition…via Youtube
Keith Gill, the former director of wellness education at MassMutual, who campaigned for GameStop stock in his spare time, is ready to tell a House committee on Thursday that he has never offered any investment advice for a fee and “has no one to buy or sell the stock has prompted for my own benefit. “
The statement made no mention of Mr. Gill being a registered broker and licensed financial analyst while posting online through GameStop under the pseudonym Roaring Kitty and another pseudonym that contained a vulgarity.
In the five-page statement, Gill described himself as a true believer in the fate of GameStop, a video game retailer, and said his online posts about the company had nothing to do with his work at MassMutual. He portrayed itself as a one-person company struggling with wealthy hedge funds, some of which were short selling GameStop stock and betting on its collapse.
“The idea that I used social media to promote GameStop shares to ignorant investors is absurd,” said Gill in a statement his attorney gave to the House Committee on Financial Services prior to the hearing on speculative and aggressive trading Thursday had submitted month in shares of GameStop. “It was very clear to me that my channel was for educational purposes only and that my aggressive investment style probably wasn’t appropriate for most of the people who check out the channel.”
He said he shared his investment ideas online because he “had reached a level where I thought public sharing could help others”.
Mr Gill described himself as the average man on a modest income and practically unemployed for two years before joining MassMutual in April 2019. The statement went beyond how much money he made trading GameStop stock – though he said so, his family once said “we were millionaires”. Nor did he mention that the Massachusetts securities regulators are investigating whether his social media posts violated securities industry rules and regulations.
On Tuesday, Mr Gill and his former employer were named as defendants in a proposed class action lawsuit alleging that he misled retail investors who bought GameStop shares during their rally of 1,700 percent shares in order to incur losses when the stock quickly returned most of its gains. The lawsuit alleges that MassMutual and its brokerage arm failed to properly supervise Mr. Gill, who was an employee until a few weeks ago.
Mr Gill’s attorney, William Taylor, declined to comment on the lawsuit. A spokeswoman for MassMutual said the company is looking into the matter with Mr. Gill.
Mr Gill is one of half a dozen witnesses due to testify at the hearing, which will focus on the impact of short selling, social media and hedge funds on retail investors and market speculation.
