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Fed Minutes Show Concern About Long-Term Economic Damage: Live Updates


Infections force Ford Motor to suspend production at two reopened plants.

Ford Motor, which restarted its North American assembly plants this week, said on Wednesday that it stopped production temporarily at two plants in Chicago and Dearborn, Mich., after employees tested positive for the coronavirus.

In Chicago, two employees were sent home on Tuesday after showing symptoms of the illness; tests later confirmed that they had the virus. Both worked at a parts building about a mile from the main plant. The building they worked in was sanitized and its operations halted, forcing production to stop at the assembly plant.

Production at the Chicago plant was halted a second time on Wednesday after a nearby parts factory stopped deliveries to Ford because of a coronavirus infection there.

In Dearborn, a single Ford employee tested positive on Wednesday. “We are deep cleaning and disinfecting the work area, equipment, team area and the path that team member took,” Ford said in a statement. Ford said it expected the Dearborn plant to resume production Wednesday evening.

In both locations, the affected Ford employees and any others they had contact with were sent home to prevent further spread of illness.

Ford, General Motors and Fiat Chrysler all began restarting their plants in the United States and Canada on Monday after keeping them idled for nearly 60 days. The companies have modified shift schedules, put up barriers between employees, required the use of masks and taken other steps to reduce contact between workers.

“We are being very vigilant about the protocols being enforced and are very focused on the safety of our members, their families, and their communities,” said Brian Rothenberg, a spokesman for the United Automobile Workers union.

Federal Reserve officials worried that coronavirus-related lockdowns could spur bankruptcies and longer-term unemployment, potentially even inflicting lasting damage on the United States economy, minutes from their late-April meeting showed.

Central bank officials met on April 28-29, and notes from the gathering were released Wednesday. Jerome H. Powell, the Fed chair, struck a cautionary tone while speaking at a news conference following that meeting, warning that recovery could take time but pledging that monetary policymakers would do what they could to cushion the blow and help to get the labor market back on track.

The minutes showed that Mr. Powell’s colleagues shared his concern over the economy’s future. In their post-meeting statement, Fed officials said that the pandemic posed “considerable risks to the economic outlook” over the medium term.

“Participants expressed concern that the possibility of secondary outbreaks of the virus may cause businesses for some time to be reluctant to engage in new projects, rehire workers or make new capital expenditures,” according to the minutes.

Officials at the meeting also worried that foreign economies, particularly emerging markets, “could come under extreme pressure as a result of the pandemic and that this strain could spill over to and hamper U.S. economic activity.”

They voiced concern that the labor market might see longer-term damage if the crisis lingered and workers lost skills amid heightened unemployment.

Stocks rose on Wednesday, rebounding from a late drop the day before, as investors were cheered by some strong results from retailers and another jump in oil prices lifted shares of energy producers.

Markets have been volatile this week, with stocks rallying Monday and then falling on Tuesday, mostly as investors assessed a drugmaker’s claim of progress on a coronavirus vaccine. The drugmaker, Moderna, said that a very small early-stage trial of the vaccine had shown potential.

But reporting that questioned the specificity of that claim knocked stocks back in the final hour of trading on Tuesday.

On Wednesday, more retailers reported better than expected results that encouraged investors. Lowe’s, the home supplies chain, reported an increase in comparable store sales in the first three months of the year. Target reported that digital sales in the first quarter had surged by 141 percent, though its shares fell slightly. Walmart, which had reported soaring sales the day before, added to its recent gains.

Delta Air Lines and United Airlines both jumped. Delta’s chief executive said in a television interview that the airline was likely to increase flight capacity during the summer as travel started to pick up, and United said it was working on a plan with Clorox and the Cleveland Clinic to reduce points of contact and promote social distancing for travelers.

The S&P 500 rose nearly 2 percent, and stocks in Europe also ended higher.

Oil prices continued their recent rally, with the U.S. crude benchmark climbing more than 5 percent above $33 a barrel. A number of energy stocks also rallied. Chevron and Exxon were each up about 3 percent.

After sinking to once unthinkable lows, oil prices have rebounded this month after oil producing nations cut output and consumption also picked up.

Only one in five Americans expects overall business conditions to be “very” or “somewhat” good over the next year, according to a survey for The New York Times. Sixty percent foresee “periods of widespread unemployment or depression” over the next five years.

The poll was conducted this month by the online research platform SurveyMonkey. The results are little changed from a month earlier, and may even reflect a slight decline in outlook, signaling that the incipient reopening of businesses and federal and state political moves to deal with the coronavirus pandemic have had little impact on confidence.

That outlook could have serious implications for the economic recovery. If Americans fear that their jobs are in jeopardy or that business will remain slow, they may be less likely to spend even if their finances are stable.

Among those who have kept their jobs and their hours, more than 80 percent say their finances are at least as good as a year ago, and most are confident that their finances will remain steady over the next year, even as they worry about the broader economy.

But for those who have lost their jobs, it is a different picture. Many are skeptical that they will quickly find new work. Two-thirds say their finances have taken a hit, and most don’t expect their situation to improve over the next year.

Internet providers like Charter and Comcast have introduced offers of free and low-cost internet with great fanfare in the last several weeks. The companies have said they want to help connect poor Americans during a pandemic that has shifted much of life online.

Schools and community organizations have aggressively promoted the offers. Scores of customers have tried to sign up.

But people signing up for the programs have encountered unexpected difficulties and roadblocks, according to interviews with people who have tried to sign up or who have helped them. Their stories highlight the way that the pandemic has stretched the gap between Americans who have easy access to the internet and those who do not, cutting the latter group off from venues for learning, work and play.

The benefits and rules of the offers vary widely, so a customer may not qualify for free service while someone in identical circumstances elsewhere in the country can sign up. Sometimes, people must endure hourslong waits on the phone to sign up, which can lead some to give up before they ever talk to a customer service agent. Others have been deterred by language barriers or are wary of requests for identification.

“We need a more stable solution that doesn’t have all the gaps in eligibility and delivery that these free and reduced offers provide us,” said Angela Siefer, the executive director of the National Digital Inclusion Alliance.

Cleaning with clouds of disinfectant. Keeping middle seats empty. Boarding back to front. For weeks, airlines have announced measure after measure aimed at putting travelers at ease. Now United Airlines hopes to lure customers back by partnering with two trusted brands: Clorox and the Cleveland Clinic.

On Wednesday, the airline said it was collaborating with both companies on a new initiative, United CleanPlus, that would help shape efforts to reduce points of contact and promote social distancing for travelers.

Clorox will consult with the airline on its disinfection practices and provide amenities to travelers at some locations. Experts from the Cleveland Clinic will offer advice on every part of the flying experience, keeping the airline up-to-date on the latest practices and technologies and helping to hold its policies to high standards.

From sneezeguards and touchless kiosks in airport lobbies to boarding fewer customers and frequent cleanings at airport gates, the major airlines have steadily reshaped what it looks like to fly. On board, face coverings are now required, snacks are dispensed in sealed bags if at all and cabins are cleaned regularly.

Shares in the biopharma firm Moderna have been rising on hopes for its coronavirus vaccine candidate. The stock took off on Monday when it released promising early findings from a trial on humans. Then came the reality check.

Moderna’s claims that the vaccine generated an immune response in eight volunteers didn’t come with data, the health news publication Stat pointed out. It also noted that the National Institute for Allergy and Infectious Diseases, which teamed up with the company on the trial, had not said anything about it. Moderna, which has a pipeline of vaccines in trials but no products on the market, has received roughly half a billion dollars from the agency headed by Dr. Anthony Fauci.

After a 20 percent jump in its share price on Monday, Moderna announced plans to raise up to $1.3 billion by selling new shares. But after the Stat report was published, the company’s stock was down 10 percent at the market close on Tuesday, and has continued to fall in after-hours trading. Still, Moderna is up about 250 percent this year, valuing the company at about $27 billion.

A quandary is lurking at the heart of the efforts to revive the economy.

In recent decades, a growing share of job growth and gross domestic product has come from the business of getting people together — from college sports and music festivals like Coachella to ax-throwing bars and ice cream museums. Yet given the infectious nature of the coronavirus, these very events will be among the very last to return.

That bleak truth has profound implications for businesses large and small, writes David Gelles. And with most large-scale gatherings on hold for the foreseeable future, the dearth of live events is already taking a psychological toll, not only on those in the industry but on society at large.

“Human contact is really what our business is built on,” said Roland Swenson, chief executive of South by Southwest, the music, film and technology festival in Austin, Texas, which was canceled in March. “If that is lost, then the world will be a poorer place.”

Rolls-Royce, the maker of jet engines, said on Wednesday that it would cut nearly 20 percent of its work force to deal with collapsing demand because of the coronavirus pandemic.

Rolls-Royce, one of Britain’s most important manufacturers, suggested that most of the job losses would come from its civil aerospace business, which produces engines for aircraft makers like Airbus and Boeing as well as airlines. The cuts — at least 9,000 jobs from a global work force of 52,000 — would come as part of a “detailed review” of its facilities, the company said.

The bulk of the world’s commercial airliners are grounded, and aircraft sales have slowed sharply and are not expected to fully recover for “several years,” according to the company. Rolls-Royce is losing revenue both from reduced engine sales and from lost sales of parts used to maintain its engines.

“We must respond to market conditions for the medium term until the world of aviation is flying again at scale,” Warren East, the company’s chief executive, said in a statement.

The carmaker Rolls-Royce is a separate company, owned by BMW.

Catch up: Here’s what else is happening.

  • L Brands, the owner of Victoria’s Secret and Bath & Body Works, posted a first-quarter net loss of nearly $300 million on Wednesday and said that net sales fell 37 percent in the quarter to $1.65 billion. Sales at Victoria’s Secret fell by almost half, while Bath & Body Works was slightly better with an 18 percent decline, even though most of the company’s stores have been closed since March 17. The company, which recently scuttled a deal to sell Victoria’s Secret to a private equity firm, will hold its earnings call on Thursday morning.

  • BOC Aviation, an aircraft leasing company controlled by the Chinese government, acquired a stake of almost 13 percent in Norwegian Air Shuttle, the budget airline said Wednesday in a regulatory filing. BOC acquired the shares in the course of a debt restructuring, which was part of a bailout of Norwegian by the government of Norway. Norwegian leases aircraft from BOC, but it is struggling as passenger air traffic has almost entirely halted amid the coronavirus pandemic.

  • Urban Outfitters, which also owns Anthropologie and Free People, reported a 32 percent drop in net sales to $588 million in the first quarter and a net loss of $138 million, a decline that comes as apparel retailers continue to struggle with temporary store closures brought on by the pandemic. The retailer said on an earnings call that it was negotiating with landlords on lease terms and cost reductions.

Reporting was contributed by Neal E. Boudette, Ben Casselman, Jim Tankersley, David Gelles, Niraj Chokshi, Stanley Reed, Carlos Tejada, Cade Metz, David McCabe, Erin Griffith, Jack Ewing, Jason Karaian, Amy Haimerl, Eugene L. Meyer, Mohammed Hadi, Jeanna Smialek and Sapna Maheshwari.

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