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793,000 filed amid COVID-19 crisis

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793,000 filed amid COVID-19 crisis

Yes, it’s still bad — but there may be a glimmer of hope in the latest unemployment numbers.

New applications for jobless benefits dropped to 793,000 last week even as the coronavirus crisis kept jobless filings at historic highs, the feds said Thursday.

The latest batch of initial jobless claims brought the total for the COVID-19 pandemic to about 78 million — equivalent to nearly 49 percent of the American workforce.

Nevertheless, last week’s filings fell from the prior week’s revised total of 812,000 to reach their lowest level since the week ending Jan. 9, US Department of Labor figures show.

“Claims remain stuck at painfully high levels,” said Robert Frick, corporate economist at Navy Federal Credit Union in Vienna, Virginia. “But we are seeing hopeful signs that claims will begin meaningful declines in the next month or two.”

The past month’s decline in new claims came as the nation’s deadly surge in coronavirus infections began to wane. New cases are now falling in 44 states after peaking at a daily record of about 312,000 in early January, according to the COVID Tracking Project.

That’s stoking optimism among some economists that hiring momentum could pick up by the spring.

“As states continue to gradually reopen their economies amid improved infection rates, vaccine distribution and fiscal aid, the labor market could slowly recover,” Bloomberg economist Eliza Winger said.

Still, jobless claims have remained above the pre-pandemic record of 695,000 for 47 consecutive weeks as the job market slowly bounced back from last spring’s historic downturn.

Economists were expecting 753,000 filings for last week, according to Wrightson ICAP.

The weekly unemployment claims report from the Labor Department, the most timely data on the economy’s health, also highlighted labor market scarring, with over 20 million people collecting unemployment checks in late January.

The continued threat of the virus led the US economy to add just 49,000 jobs in January after losing 227,000 in December.

Economists say that meager growth underscores the need for Congress to act on President Biden’s $1.9 trillion stimulus proposal, which would extend key aid programs such as a $300 weekly boost to unemployment benefits that are set to expire in March.

With Reuters

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DirecTV to become standalone company through $16B AT&T, TPG deal

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DirecTV to become standalone company through $16B AT&T, TPG deal

Telecom giant AT&T has inked a deal with private equity firm TPG that calls for struggling satellite TV provider DirecTV to become a standalone company.

The deal calls for AT&T to sell a 30 percent stake in DirecTV, AT&T TV and its U-Verse to TPG in exchange for $1.8 billion in cash.

The transaction values the satellite TV properties at $16.25 billion — a fraction of the $48.5 billion AT&T shelled out for it in 2015 under former chief executive Randall Stephenson. 

But it paves the way for the telecom and media giant to focus on its growing businesses, including 5G wireless and streaming video service HBO Max, said CEO John Stankey in announcing the deal.

The companies will form a new venture, aptly called DirecTV, that will own and operate the pay video services.

AT&T will also receive $7.8 billion from the new venture after the spinoff is complete, including the assumption of $200 million in debt. It will use the money to pay off debts, it said.

The company under Stankey has been under the directive to focus on core-assets, such as the company’s wireless business, in order to reduce its $149 billion debt load and grow its new streaming service HBO Max.

AT&T put the declining DirecTV on the block last year, but didn’t like the early offers, which came in at more than $15 billion, as The Post reported in December.

DirecTV has been pummeled by cord-cutting, bleeding subscribers and booking a $15.5 billion charge in AT&T’s fourth quarter earnings report last month.

In recent months, AT&T had focused on a divestiture of its stake to private equity groups to avoid regulatory concerns. 

AT&T said Thursday that by keeping a majority stake, DirecTV can still leverage its distribution reach. The telecom giant offered that the new DirecTV “will have a commercial agreement with AT&T to continue to offer bundled pay-TV service for AT&T’s wireless and internet customers. Additionally, AT&T and new DirecTV will have commercial agreements in place that will give new DirecTV video subscribers continued access to HBO Max.”

“This agreement aligns with our investment and operational focus on connectivity and content, and the strategic businesses that are key to growing our customer relationships across 5G wireless, fiber and HBO Max,” Stankey said.

He added: “TPG is the right partner for this transaction and creating a new entity is the right way to structure and manage the video business for optimum value creation.”

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Tesla stock has ‘significant’ link to Reddit posts: analyst

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Tesla stock has 'significant' link to Reddit posts: analyst

Tesla might be the biggest meme stock of them all.

The electric-car maker’s stock price appears strongly connected to how many people are talking about it on Reddit’s WallStreetBets forum, Barclays analysts say.

After scraping data from the foul-mouthed message board behind the recent GameStop frenzy, the bank’s researchers found a “statistically significant” relationship between the number of posts about Tesla and its performance on the market.

“We have painfully learned that social media memes can matter more for TSLA share performance than actual financial metrics, fundamentals or (dare we say) valuation,” Barclays analysts led by Ryan Preclaw and Brian Johnson wrote in a research note this week.

Tesla shares tended to outperform the S&P 500 one or two days after big upticks in WallStreetBets submissions about the stock, the analysts found.

Tesla also had positive returns in the days leading up to 20 spikes in Reddit posts about the stock over the past five years, meaning “the statistical significance does not seem caused by only a single event,” the researchers said.

“In the model we think is most appropriate, a swing up of 7 or more submissions today over yesterday has been predictive of outsized returns in TSLA stock tomorrow,” the Barclays team wrote in its Tuesday note.

But the findings came with some caveats. The analysts only examined WallStreetBets posts that mentioned Tesla’s ticker symbol without referencing any other stocks. There also might not be enough data to make a rock-solid link between Reddit chatter and Tesla’s movement, according to the note.

“The situation has been so dynamic that there are simply too few examples to be confident of a stable process between WSB posts and TSLA returns,” the analysts wrote. “Even more than usual, past results might not predict future performance.”

Tesla shares tumbled as much as 6.3 percent to $695 on Thursday after Bloomberg News reported that the Elon Musk-led automaker had halted some production of its Model 3 sedan at its California plant for about two weeks.

The stock came under pressure earlier this week amid a drop in the price of bitcoin, which Tesla added to its balance sheet last month.

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Costco to hike its minimum wage to $16 an hour

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Costco to hike its minimum wage to $16 an hour

Costco is boosting its minimum hourly wage to $16 starting next week, the warehouse retailer’s chief executive said during congressional testimony on Thursday.

The $1-an-hour wage increase exceeds the pay that competitors Target, Walmart and other big-box retailers offer their employees and comes amid a national discussion about raising the federal minimum wage to $15 an hour.

Earlier this month, Walmart said it would raise the average pay for 425,000 of its employees to $15 an hour, while still maintaining its starting wage of $11.

“This isn’t altruism,” Costco’s CEO, Craig Jelinek, told the US Senate Budget Committee on Thursday. “In the long run, by minimizing turnover, maximizing employee productivity, commitment and loyalty, we encourage our employees to view Costco as providing a career rather than just a job.”

Jelinik said half of Costco’s 180,000 employees in the US are paid at the top of the company’s hourly pay scale in excess of $25 an hour and most of these employees, he added, receive regular twice yearly bonuses of up to $4,000 a pop. 

The average hourly wage for employees including these bonuses comes to about $24 an hour, he said.

The Biden administration has proposed raising the federal minimum wage to $15 an hour from $7.25 an hour.

During the pandemic Costco had added an extra $2 an hour in so called hazard pay to frontline workers’ checks, but that will end this year as the company adds a permanent pay increase, Jelinik said.

The members-only discount retailer based in Issaquah, Wash. claims that its pay and benefits have resulted in lower turnover as more than 60 percent of its employees have been with the company for at least five years and more than a third have been there for more than a decade. 

“We feel the experience level and loyalty of our employees is a significant advantage for our company,” Jelinik said.

Costco’s move, industry experts said, is likely to put pressure on other large retailers to revamp their pay.

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