Here’s what you need to know:
The Trump administration plans to block Chinese airlines from flying to the United States.
The Trump administration on Wednesday said that it planned to block Chinese airlines from flying into or out of the United States starting on June 16 after the Chinese government effectively prevented U.S. airlines from resuming service between the countries.
The dispute stems from a March 26 decision by China’s aviation regulators that limited foreign carriers to one flight per week based on the flight schedules they had in place earlier that month. But all three U.S. airlines that fly between China and the United States had stopped all service to the country by then because of the coronavirus pandemic. As a result, the Chinese government had effectively banned them from flying between the two countries. Chinese airlines, by contrast, have been flying to American cities.
Delta Air Lines and United Airlines had hoped to resume flights to China this month.
Both companies appealed to the Civil Aviation Authority of China but did not receive a response. The U.S. Transportation Department also pressed Chinese officials to allow flights by American companies during a call on May 14, arguing that China was violating a 1980 agreement that governs flights between the countries and aims to ensure that rules “equally apply to all domestic and foreign carriers” in both countries.
Tensions between the United States and China have escalated to heights not seen in the trade war as the countries scuffle over the origin of the pandemic and China’s recent move to tighten its authority over Hong Kong. With the presidential election just five months away, President Trump and his campaign team have taken a much tougher stand against the country, blaming China for allowing coronavirus to turn into a pandemic and wreck the American economy.
In mid-May, the Trump administration expanded restrictions on Huawei, the Chinese telecom firm, and blocked a government pension fund from investing in China. Last Friday, Mr. Trump announced that he was beginning the process of ending the American government’s special relationship with Hong Kong, and that he would place sanctions on officials responsible for Beijing’s rollback of liberties in the territory.
Eurozone unemployment reaches 7.3 percent.
Joblessness in Europe ticked up slightly in April, the second month after most countries implemented coronavirus quarantines, as government-backed furlough programs designed to limit mass unemployment cushioned the blow of a devastating economic downturn.
But many national financial support programs are set to run out soon, making it likely that joblessness will continue to march higher in Europe over the coming months, economists said.
The eurozone unemployment rate rose to 7.3 percent from 7.1 percent in March, although it was down from 7.6 percent a year ago. Around 12 million people in the 19 countries that use the euro were registered as unemployed, a relatively low number compared with the United States, where more than 40 million people have filed claims for jobless benefits since the start of the pandemic.
European governments have vowed to spend trillions of euros to keep people partially employed and support businesses amid the coronavirus crisis. Since March, France, Germany, Denmark and other countries have effectively been paying businesses not to lay people off and to keep them on standby when their economies reopened. Around one-third of all employees in Europe participated in short-time work schemes at the end of April, according to a study by the European Trade Union Institute.
“As the recovery is likely going to last for quite some time, unemployment is set to rise significantly, although short-time work will help output to recover more quickly once demand returns,” Bert Colijn, the senior eurozone economist at ING bank, wrote in a note to clients.
Wall Street continues to rally along with global markets.
Stocks rose again Wednesday, Wall Street’s third-day of gains this week, as investors continued to zero in on prospects for the economy as they looked past other risks.
The S&P 500 rose nearly 1 percent, bringing its gains for the week to more than 3 percent. Stocks in Europe were sharply higher.
On Wednesday, a private report on payrolls that showed job cuts may be slowing helped lift shares in the United States. Business payrolls fell by 2.76 million last month, the ADP Research Institute said. The government will release official payroll figures for May at the end of this week.
Investors have looked past a number of risks — from economic damage caused by the coronavirus pandemic, to rising tension between the United States and China, to the growing unrest in the United States — to bid stocks higher for weeks, as they cheered steps from the Federal Reserve and fiscal spending by Washington meant to help minimize damage from the pandemic.
Since March 23, when the Federal Reserve signaled its willingness to do whatever it took to stabilize financial markets, the S&P 500 has soared more than 37 percent. It is now less than 10 percent below its pre-pandemic high.
Office towers are still going up, but who will fill them?
Before the pandemic shut down businesses, a robust economy had powered a building boom, sending office towers skyward in urban areas across the United States. The coronavirus outbreak, though, has scrambled plans and sent jitters through the real estate industry.
Skyscrapers scheduled to open this year will remake skylines in cities like Milwaukee, Nashville and Salt Lake City. Office vacancy rates, following a decade-long trend, had shrunk to 9.7 percent at the end of the third quarter of 2019, compared with 13 percent in the third quarter of 2010, according to Deloitte.
Developers were confident that the demand would remain strong. But the pandemic darkened the picture.
“There is a pause occurring as companies more broadly consider their real estate needs,” said Jim Berry, Deloitte’s U.S. real estate sector leader.
If the economic pain drags on, there could be long-lasting changes to the way people work and how tenants want offices to be reimagined, said Joseph L. Pagliari Jr., clinical professor of real estate at the University of Chicago’s Booth School of Business.
Catch up: Here’s what else is happening.
Sales at Campbell Soup Co. rose 17 percent in the three months that ended in April, driven by a “broad-based” increase in demand for canned goods and comfort food during pandemic lockdowns, the company said Wednesday.
Toyota Motor said it sold 165,000 cars in May, a 26 percent decline from a year ago. But the total was higher than its revised sales target, which called for May sales of 125,000 cars and light trucks. “Retail is recovering quicker than anticipated,” the automaker said in a statement.
Lyft told investors that its business was beginning to recover from a steep downturn caused by the coronavirus pandemic. The ride-hailing company said in a regulatory filing that rides on its platform had increased 26 percent in May from the previous month. Despite the modest recovery, rides were still down 70 percent when compared with the same month a year ago, Lyft said. It added that it expected to lose no more than $325 million in the second quarter of the year.
Zoom, the videoconferencing company that has surged in popularity during the pandemic, said that its revenue soared to $328.2 million in the quarter that ended April 30, a 169 percent jump over the same period last year. Zoom said it had about 265,400 customers with more than 10 employees at the end of the quarter, a year-over-year increase of 354 percent. “The Covid-19 crisis has driven higher demand for distributed, face-to-face interactions and collaboration using Zoom,” said Eric S. Yuan, the founder and chief executive of Zoom.
Reporting was contributed by Niraj Chokshi, Liz Alderman, Mohammed Hadi, Kevin Williams, Neal E. Boudette, Kate Conger, Rich Barbieri and Gregory Schmidt.