Fed announces major influx of cash
WASHINGTON — The Federal Reserve moved with unprecedented force and speed Friday to pump huge amounts of cash into the financial system to ease disruptions that have escalated since the viral outbreak.
The New York Federal Reserve Bank said it will offer $1 trillion of overnight loans per day through the end of this month to large banks. That is in addition to $1 trillion in 14-day loans it is offering every week. Banks, so far, have not borrowed nearly as much as the New York Fed is offering, and the loans are quickly repaid. None of the funding is from taxpayer dollars. Wall Street analysts say the huge number is intended to calm markets by demonstrating that the Fed’s ability to lend short-term is nearly unlimited.
Income tax filing date moved to July 15
WASHINGTON — The income tax filing date has been pushed back from April 15, to July 15, Treasury Secretary Steven Mnuchin said.
Mnuchin announced the decision in a tweet Friday saying that at President Donald Trump’s direction “we are moving Tax Day from April 15 to July 15. All taxpayers and businesses will have this additional time to file and make payments without interest or penalties.”
At a White House briefing, Trump said the delay on filing and paying taxes until July 15 was done to give taxpayers more time and “hopefully by that time, people will be getting back to their lives.”
Trump said that if people are expecting refunds, they should go ahead and file now so that they can get their refunds from the IRS more quickly.
Home sales hit 13-year high in February
WASHINGTON — U.S. home sales jumped in February to their highest level in 13 years, a trend that will almost certainly be reversed as people stop showing their property out of fear of infection in the coronavirus outbreak.
The National Association of Realtors said Friday that home sales jumped 6.5% in February from the previous month, to a seasonally adjusted annual pace of 5.77 million. The report covers contracts that were signed in December and January, with closings in February. The first reports of infections in China occurred on January 31.
At that time, conditions in the housing market were almost ideal, with hiring strong, wages rising, consumer confidence near a peak, and the stock market at a record high. The economy has since come to a grinding halt and potentially millions of people have lost their jobs, which will likely cool sales in real estate.
“This is good news, but it’s about as relevant as data from 1975,” Ian Shepherdson, an economist at Pantheon Macroeconomics, said in a research note.
The Realtors’ group released a survey Thursday morning that showed nearly half of the nation’s real estate agents say the coronavirus has caused interest among potential home buyers to decline.
Southwest cuts flights to Midway
CHICAGO — Southwest Airlines said Friday that it had significantly scaled back its fights in and out of Midway International Airport, its Chicago hub, days after federal authorities closed the airport’s control tower after technicians tested positive for the coronavirus.
Southwest Airlines spokeswoman Brandy King said the Dallas-based airline canceled about 170 of its roughly 250 daily flights in and out of Midway due to the airspace restrictions that followed the control tower’s closure.
“We’ve had to pull that back by canceling around 170 flights. We’re averaging four to six flights per hour,” she said. “There are only so many flights they’re letting in and out of Chicago.”
King said it’s not clear how long the airline will keep its reduced flight level in and out of Midway, and that decision is tied to how long the airspace restrictions continue.
Unemployment claims jump
WASHINGTON — The number of Americans filing new claims for unemployment benefits surged last week by 70,000 to the highest level in more than two years, indicating that the effect of the coronavirus was starting to be felt in rising layoffs in the job market.
The Labor Department reported Thursday that applications for benefits, a good proxy for layoffs, rose by 70,000 to a seasonally adjusted 281,000 benefit applications last week. That was the highest weekly total since Sept. 2, 2017, following Hurricane Harvey.
Both the one-week rise and the total number of applications were far above the levels seen over the past year as the country’s unemployment rate fell to a half-century low of 3.5%.
Economists are predicting a surge in layoffs as efforts to contain the spreading coronavirus result in people losing jobs in a variety of industries from restaurants and bars to airlines and hotels.
Long-term mortgage rates climb
WASHINGTON — U.S. long-term mortgage rates climbed this week in a whip-sawing market amid deepening anxiety over devastation to the economy from the coronavirus pandemic.
Home loan rates had hit all-time lows two weeks ago. Mortgage buyer Freddie Mac reported Thursday that the average rate on the benchmark 30-year loan jumped to 3.65% this week from 3.36% last week.
Freddie Mac said the short-term rise was due to mortgage lenders increasing prices to deal with booming demand for refinancing into loans at historically low rates.
The average rate on the 15-year fixed-rate mortgage rose to 3.06% from 2.77%.
The average rate for a five-year adjustable-rate mortgage jumped this week to 3.11% from 3.01% last week.
TSA reports sharp passenger decline
The lowest number of passengers ever recorded at U.S. airports is being reported by the Transportation Security Administration. Nearly 624,000 people passed through its outbound checkpoints on Thursday, the TSA said. That compares with 2.4 million on the same day a year earlier. It’s the lowest number of outbound passengers ever recorded by an agency created in November 2001 in the wake of the Sept. 11 terrorist attacks.
The CEO and labor leaders at American Airlines wrote to Treasury Secretary Steve Mnuchin and congressional leaders Friday imploring them to quickly approve aid for airlines or else workers will lose their jobs. The company says it will accept “appropriate conditions” on government aid.
Walmart announces hiring binge
Two major retailers are hiring in a big way. Walmart, the nation’s largest retailer, said late Thursday that it plans to hire 150,000 U.S. hourly workers for its stores and distribution centers through the end of May as online orders surge with households stocking up. The jobs are temporary, but many will become permanent, said spokesman Dan Bartlett.
Target to bump hourly wage by $2
Target Corp. said Friday it will give a $2 per hour wage increase to its 300,000-plus workers who have been scrambling to help customers. The pay bump will be effective at least through May 2. It’s also begun offering workers who are pregnant, 65 years old or older, or who have underlying health risks, access to paid leave for up to 30 days.
YouTube reduces streaming quality
YouTube is reducing its streaming quality in Europe as more users self-isolate at home.
The company, owned by Google, said Friday it would “temporarily default all traffic in the U.K. and the EU to Standard Definition,” instead of high definition. The measure will be in place for 30 days and users will still be able to manually adjust their video quality.
YouTube follows Netflix, which said Thursday that it expects the video bit rate reduction to cut its European traffic by a quarter.