Australia Enters First Recession in Nearly Three Decades: Live Updates


Here’s what you need to know:

Credit…Amr Alfiky/The New York Times

Macy’s, the biggest department store company in the United States, reported another significant slide in quarterly sales and a wider net loss on Wednesday, but struck an upbeat tone, saying that the performance was “stronger than anticipated.”

The New York-based retailer, which also owns Bloomingdale’s and Bluemercury, said that sales fell 36 percent to $3.6 billion in the quarter ending Aug. 1. It reported a net loss of $431 million. Like many other retailers, Macy’s said that its digital sales grew by 53 percent in the quarter, while stores sales plunged 61 percent.

Macy’s said it was not providing a full-year forecast as uncertainty persisted, but it expected its comparable sales to fall by the “low- to mid-20s” during the fall.

Macy’s is a linchpin of the mall and its results provide a window into how and where Americans are shopping. The coronavirus outbreak and widespread store closures drove Macy’s sales down by 45 percent to about $3 billion in the first quarter, which ended May 2, and the retailer posted a net loss of $3.6 billion. It also said in June that it was cutting 3,900 corporate and management positions.

In February, before the pandemic spread across the United States, Macy’s had said that it planned to close at least 125 stores in the next three years and cut about 2,000 of its corporate and support function positions. The closings are expected to leave the company with about 400 Macy’s locations. In the first quarter, the company said it had 552 Macy’s locations, 54 Bloomingdale’s locations and 171 Bluemercury stores. Macy’s is the biggest department store by revenue.

Credit…Matthew Abbott for The New York Times

After almost 30 years of economic growth, Australia officially fell into recession after its economy shrank 7 percent in the second quarter, the government said on Wednesday.

The drop in quarterly G.D.P. is the largest since record-keeping began in 1959, Michael Smedes, head of national accounts at the Australian Bureau of Statistics, said in a statement.

Restrictions that were imposed in March during the virus’s first surge greatly reduced domestic spending on transportation, hotels and restaurants, while border bans hit the tourism and education industries.

Australia’s second-most populous state, Victoria, remains under lockdown as it fights a surge that was driven by returning travelers. Officials on Wednesday extended Victoria’s state of emergency for six months, a designation that gives them broad powers to enact virus-related restrictions as needed.

In the end, more than $150 billion in stimulus packages could not ward off a recession.

“Today’s devastating numbers confirm what every Australian knows: that Covid-19 has wrecked havoc on our economy and our lives like nothing we have ever experienced before,” Josh Frydenberg, the country’s treasurer, said on Wednesday.

The new data marked a sobering end to what had once seemed an endless boom driven by immigration, rising trade with Asia and careful monetary policy. More than a million Australians were unemployed in July, and the unemployment rate of 7.5 percent was the worst in 22 years.

“The road ahead will be long,” Mr. Frydenberg said. “The road ahead will be hard. The road ahead will be bumpy.”

Australia has recorded 663 coronavirus deaths and more than 25,000 cases, according to a New York Times database.

Treasury Secretary Steven Mnuchin says “there is more work to be done” to help the U.S. economy recover from its pandemic-induced recession. But he and Democrats disagree on the scale of the problem, and the scope of the solution, making it hard to predict when — or if — lawmakers will strike a deal on another economic stimulus package, today’s DealBook newsletter explains.

Mr. Mnuchin and House Democrats painted different pictures of the economy at a congressional hearing yesterday. While the Treasury secretary said the economy was “doing great” relative to the worst-case pandemic situations, the House majority whip, Jim Clyburn, Democrat of South Carolina, warned of a “K-shaped” recovery, in which the wealthy bounce back and the rest lag behind.

Who’s right? A number of economic reports are due this week that could shed some light on the course of the recovery. Today, the Congressional Budget Office will release an update to its 10-year economic projections. On Thursday, weekly jobless claims are expected to show a large decline, due mostly to methodological changes. On Friday, the monthly report on jobs is predicted to show the unemployment rate falling to single digits for the first time during the pandemic, to a level roughly equal to the peak reached during the global financial crisis.

  • The weekly “recovery tracker” assembled by Oxford Economics, which mashes together a range of high-frequency statistics on consumer demand, employment, financial markets, health, mobility and production, reckons that the U.S. economy is now operating around 80 percent of normal, with muted improvement in recent weeks.

Is help on the way? Mr. Mnuchin told the House Select Subcommittee on the Coronavirus Crisis yesterday that he would call House Speaker Nancy Pelosi “right after the hearing” to discuss the next stimulus bill. They spoke for more than 30 minutes, but Ms. Pelosi said afterward that there were “serious differences understanding the gravity of the situation” between the White House and Democrats.

Credit…Elaine Cromie for The New York Times

Across the country, local governments are sending out small grants to their small businesses even though their budgets are already devastated, with some cities expecting revenue shortfalls of 20 percent. But city councils, mayors and governors see this help as a matter of survival.

“They realize that it’s much easier to retain businesses and jobs than to let them fail and presume the economy will stitch itself back together,” said Joseph Parilla, a fellow with the Brookings Institution’s Metropolitan Policy Program. “What we learned from the great recession is that it is not easy for the economy to heal itself.”

So far, they have given out at least $5 billion in aid. They are squeezing the money out of their own limited budgets along with donations from corporate benefactors and philanthropic organizations. But the biggest source was the first stimulus package, the CARES Act. As part of that, Congress allocated $150 billion to states — and cities with more than a half-million people — to cover costs related to Covid-19.

Most places are using a portion of the stimulus funds to offer loans and grants, but others are more innovative.

In Detroit, the New Economy Initiative, an organization founded by 10 philanthropic groups at the start of the last recession, began coordinating with local leaders right away when the pandemic hit. The organization put $5 million in the response pot — including $2.6 million raised in just two weeks. The initiative’s director and local leaders used that money and additional federal relief to flood the economy with grants, loans and rent support.

The city and its partners raised $400,000 for its Feed the Frontlines program, which paid restaurants to make thousands of meals for essential workers. And they created the Digital Detroit course to teach businesses how to build websites so they could shift to e-commerce; more than 200 people signed up for the first cohort. The mayor ensured that all business owners and their employees could get free rapid Covid-19 testing.

In all, Detroit said, the group has invested nearly $33 million — much of it donated or from federal funds — to support more than 2,000 local businesses.

  • U.S. stocks climbed in early trading on Wednesday, following a rally on Tuesday after Treasury Secretary Steven Mnuchin suggested to lawmakers that the Trump administration might be open to a stimulus package as large as $1.5 trillion.

  • The ADP report on private sector payrolls, which was released Wednesday morning, showed that hiring increased in August from the prior month but fell below what economists had expected. Investors are more focused on the Labor Department’s monthly jobs report, which is set to be released on Friday.

  • European markets were also higher, with benchmark indexes up more than 1 percent. Asian markets ended the day broadly lower, a trend defied by Japan’s Nikkei, which closed up about half a percent.

  • On Tuesday, the S&P 500 rose 0.75 percent, closing at another record high. The index ended August up about 7 percent for its second-best month of the year.

  • Investors were encouraged by fresh economic data from around the world that signaled a recovery from the devastation of the pandemic was underway. U.S. manufacturing data released Tuesday showed that new orders surged in August. A report from the eurozone Tuesday also showed that manufacturing activity had increased for the second straight month.

Credit…Cristobal Herrera-Ulashkevich/EPA, via Shutterstock

Starting this week, the Labor Department will change its approach to seasonal adjustment for weekly unemployment claims. The Times will be changing the way we report the numbers, too, to emphasize the non-seasonally adjusted figures going forward. Ben Casselman explains the change:

The key points:

• This change should make the seasonally adjusted numbers more accurate.

• The Labor Department is not revising prior data, which means the new seasonally adjusted numbers will not be comparable with the old ones.

• If you want to compare over time, use non-seasonally adjusted data.

Seasonal adjustment is meant to account for regular, predictable patterns in layoffs. Take the first week of June, for example: Every year, jobless claims spike because thousands of public school employees get laid off.

The seasonal adjustment formula “knows” this, and expects claims to rise around 15 percent the first week of June each year. An increase of less than 15 percent would show up as a drop in claims.

This year, though, the absolute level of claims is way higher than normal because of the pandemic. The formula once again expected claims to rise around 15 percent, but this year 15 percent was nearly 250,000 claims.

As it happens, unadjusted filings fell by about 60,000 that week this year. The seasonal formula, expecting a huge increase, reported a drop of 330,000 seasonally adjusted claims.

The new adjustment methodology should fix this. Instead of looking at historical patterns as percentage changes, it will look at actual levels of change. So in June, it would have expected an increase of around 30,000, and the seasonally adjusted figure would have shown a dip of around 90,000.

Credit…Apple and Google

Several state governments may soon send residents an alert asking them to turn on “exposure notifications.”

On Tuesday, Apple and Google said they would make it easier for states to use their new technology that can notify people who may have been exposed to the coronavirus by detecting phones that come close to one another.

States that sign on will be able to send a notice directly to smartphones asking people to opt in to the technology. Previous versions of the technology had required people to seek out a state health agency’s app.

The new approach could spur the popularity of such virus-alert technology in the United States by significantly lowering the hurdles for its use. Three states, Maryland, Virginia and Nevada, and Washington, D.C., already plan to use the new system, Apple and Google said, and about 25 other states were exploring using the earlier app version.

In April, Apple and Google announced they were developing the technology, which uses Bluetooth signals to enable iPhones and Android devices to detect nearby phones. If someone using the technology tests positive for the virus, they can enter the positive result into the system using a unique authentication code. An automatic notification would then go to other phones that had opted in and had been in close contact.

As the pandemic took hold this spring, countries around the world raced to deploy virus apps to help track and quarantine people. But some of the apps were mandatory and invasive, sending users’ locations and health details to their governments. Many apps were also rife with security flaws.

Credit…Moon Pals

Procter & Gamble says it can “turn the stressed life into your best life” in recent ads for StressBalls gumdrops, whose ingredients include ashwagandha extract and valerian root extract. Nature’s Bounty, a wellness company, promises a way for its customers to “find peace” in new ads for Stress Comfort gummies, which include ingredients such as gamma-aminobutyric acid, melatonin and lavender extract.

Roman, a New York company that offers treatments for conditions such as erectile dysfunction and hair loss, is advertising stress relief capsules that it says are “backed by science.” An unnamed user of Roman products featured in its marketing materials claims: “This company has changed my life.” But Roman acknowledges that some ingredients of its products, like rhodiola rosea, have “yet to be extensively studied in the U.S.A.”

Stephanie Van Stee, an associate professor at the University of Missouri-St. Louis who specializes in health communication, advises consumers not to allow stress to overwhelm their skepticism. “You need to be looking at these advertisements critically and do your research to make sure you know what you’re getting into with some of these things,” she said.

During a time when more than 180,000 people in the United States have died of Covid-19 and millions have been put out of work, nearly a third of American adults have reported signs of anxiety or depression, a significant increase from a year earlier, the Centers for Disease Control and Prevention reported last month. A recent Kaiser Family Foundation poll found that of the millions of workers who have faced pay cuts or layoffs, more than half blame the pandemic for damaging their mental health.

Public service messages geared to a newly vulnerable population started appearing in the spring, with commercials from the Advertising Council, a nonprofit group. In one campaign, entertainers including Meghan Trainor and Addison Rae encouraged teenagers to connect with friends; in another, creators on TikTok like Jaci Butler and Parker James shared tips on how to handle isolation.

Those messages were followed by a flood of ads for sleep aids, mental-health apps, remote therapy services, prescription drugs, potions and tinctures.

  • Virgin Atlantic’s $1.6 billion rescue deal is set for completion this week after a London judge sanctioned the airline’s restructuring plan in a court hearing on Wednesday, Reuters reported. A procedural court hearing is scheduled for Thursday in the United States so that the deal can be recognized there, but the judge said that the court order was not conditional on the U.S. process.

  • The Trump administration issued an order on Tuesday barring evictions of most renters in the country for the rest of the year as the nation grapples with the coronavirus pandemic. The order, put forward by the Centers for Disease Control and Prevention, said the action was needed to avoid having renters lose their homes and wind up in shelters or other crowded living conditions, compounding the crisis. To apply for the new moratorium, tenants would have to attest to a substantial loss of household income, the inability to pay full rent and best efforts to pay partial rent. Tenants would also need to stipulate that eviction would be likely to leave them homeless or force them to live with others at close quarters.

  • AMC Entertainment announced that it would reopen roughly 140 additional theaters by Sept. 4, bringing a total of 70 percent of its movie theaters in the United States back into operation. Shares of the company jumped nearly 10 percent after-hours following the announcement Tuesday afternoon. The majority of the theaters will reopen on Sept. 3, the same day that Christopher Nolan’s “Tenet” comes out. Theater executives are hoping the $200 million thriller will draw crowds of viewers. But it remains to be seen whether people will want to sit in an enclosed space next to other moviegoers.



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