Live Updates: C.P.I., Markets and Business News
15 min readDaily Business Briefing
June 10, 2021, 12:49 p.m. ET
June 10, 2021, 12:49 p.m. ET
Goldman Sachs wants to know how many of its employees have gotten a Covid-19 shot. The bank sent a memo this week informing employees in the United States that they had until noon on Thursday to report their vaccination status.
“Registering your vaccination status allows us to plan for a safer return to the office for all of our people as we continue to abide by local public health measures,” said a section of the memo, which was sent to employees who had not yet reported their status and was obtained by the DealBook newsletter.
Disclosing vaccination status had been optional at the bank. In May, Goldman told employees that they could go maskless in the Manhattan office if they reported that they had been inoculated.
Now, all Goldman employees in the United States, regardless of whether they choose to wear a mask while in the office, will need to log their status in the bank’s internal app for employees. The app does not ask for proof of vaccination, but it does require employees to record the date they received their shots and the maker of the vaccine. Employees who falsify records will be subject to discipline, including termination of employment. Goldman has also informed employees through the app that their vaccination status may be shared with managers and used for planning.
The Equal Employment Opportunity Commission made clear this month that it is legal to ask employees for their vaccination status so long as firms kept medical records confidential.
Employers are allowed to share vaccination status “with certain individuals if it’s relevant to the individual’s responsibilities, but they can’t share for no reason,” said Jessica Kuester, who specializes in benefits at the law firm Ogletree Deakins
Goldman has roughly 20,000 employees based in the U.S. at its New York headquarters and in other cities such as San Francisco and Dallas.
Companies across the U.S. are trying to find out how many workers are vaccinated ahead of full office reopenings. They have conducted surveys, given out cash rewards upon proof of vaccination or made reporting compulsory, as with Goldman.
“It’s important to have data to make data-informed decisions,” said Johnny Taylor, chief executive of the Society for Human Resource Management. He acknowledged that some may “grimace” at the idea of employers pushing for information like vaccine status.
Understanding what portion of their work force is vaccinated can help companies decide whether to try new incentives for employees to be vaccinated or consider a mandate. Goldman, for its part, said in the memo it “strongly encourages” vaccination, though the choice “is a personal one.” The Wall Street firm, which is bringing the majority of its workers back to the office this month, has been offering employees paid time off to get the shots.
“The big focus right now is we’ve got to get people vaccinated — we’ve got to get to the other side,” David Solomon, Goldman Sachs’ chief executive, told Bloomberg in January. Mr. Solomon has called working from home an “aberration.”
Several of Mr. Solomon’s rivals across Wall Street, including Jamie Dimon, JPMorgan’s chief executive, have been critical of remote work given the industry’s focus on in-person training and client solicitation. Mr. Dimon said in May that remote work “doesn’t work for those who want to hustle.”
JPMorgan, which opened all of its U.S. offices last month, has encouraged employees in its U.S. corporate offices who want to go mask-free to report their vaccine status. Bank of America has told bankers and traders who want to come in to the office that they may self-report their vaccination status on the bank’s internal portal. Neither bank has mandated vaccines.
“We started to bring vaccinated employees back,” Brian Moynihan, Bank of America’s chief executive, said in a hearing before the House Financial Services Committee on May 27.
“We had about 50,000 teammates that put the information in and give us the ability to call them back and have them work. In New York City in particular, that’s starting take place,” he said.
The S&P 500 rose in early trading on Thursday, climbing into record territory despite new data showing consumer price inflation rising faster than expected.
Investors have been particularly attuned to inflation, and the potential for fast-rising prices to force the Federal Reserve to rein in its support for the economic recovery. In recent months, signs that prices are rising have led to an increase in government bond yields, and turbulence in the stock market.
But many economists and lawmakers have argued that the price increases are likely to be temporary, a result of shortages connected with pandemic lockdowns that will sort themselves out over time. On Thursday, the government reported that airfares and used car prices surged by more than 20 percent in May, from a year earlier. Both increases are illustrative of the short-term adjustments as the economy reopens.
More broadly, the Consumer Price Index showed that prices rose 5 percent in May from the year before, the strongest year-over-year reading since 2008, and faster than the 4.7 percent increase expected by economists.
After an early jump, yields on 10-year Treasury notes were unchanged by midmorning Thursday. The S&P 500 rose about half a percent, crossing above its May 7 record.
Concerns about an overheating economy have somewhat eased lately as monthly reports on hiring and unemployment have come in below expectations, highlighting the Fed’s contention that the recovery is far from complete.
The big policy question facing the Fed is when, and how quickly, it will begin to slow its $120 billion in monthly government-backed bond purchases. That policy is meant to keep borrowing of all kinds cheap and stoke demand, and also bolsters stock prices.
The Fed chair, Jerome H. Powell, and his colleagues have repeatedly said that they need to see “substantial” further progress toward maximum employment and stable inflation that averages 2 percent over time before they pull back from that policy.
Stocks in Europe were also slightly higher on Thursday after policymakers at the European Central Bank said they would hold interest rates at record low and negative levels while continuing to buy bonds in its pandemic response program at “a significantly higher pace” for the next quarter compared with the start of the year — currently, a rate of about 80 billion euros a month.
Even as Europe’s economic outlook is rapidly improving, European Central Bank policymakers decided on Thursday to maintain their “very accommodative” monetary stance.
Governments are lifting lockdown restrictions and the vaccine rollout has sped up, which has led to a bounce in the services industry and “ongoing dynamism” in manufacturing, Christine Lagarde, president of the central bank, told reporters at a news conference in Frankfurt.
“We expect economic activity to accelerate in the second half of this year as further containment measures are lifted,” she said.
But Ms. Lagarde stressed thatlots of support was still needed and that policymakers were giving the economy a “steady hand.”
“Uncertainties remain, as the near-term ec
onomic outlook continues to depend on the course of the pandemic,” she added.
The bank said it would hold interest rates at record low and negative levels while continuing to buy bonds in its pandemic response program at “a significantly higher pace” for the next quarter compared with the start of the year — currently, a rate of about 80 billion euros a month.
“The ECB is currently choosing to err on the side of caution rather than withdraw monetary stimulus prematurely,” analysts at ING wrote in a note.
Staff members at the central bank also published new forecasts for economic growth and inflation in the region. The eurozone economy will grow 4.6 percent this year and 4.7 percent next year, they said, compared with forecasts from three months ago that predicted 4 percent and 4.1 percent growth.
In the United States, policymakers are watching rising inflation, which rose 5 percent in May, the fastest annual rate since 2008. Economists say a sustained increase in inflation would force the Federal Reserve to pull back its monetary stimulus. But Ms. Lagarde said the American and European recoveries were “a very, very different story.”
In the euro area, inflation is expected to rise over the next few years, including core inflation, which excludes volatile energy and food prices, but the increase is “largely” a result of temporary factors, the bank said. The central bank does not forecast price gains to rise above its 2 percent target.
Staff projections, which were revised higher since March, point to a 1.9 percent annual inflation rate in 2021 and 1.5 percent rate next year.
In March, the central bank increased the pace of the assets purchases in its Pandemic Emergency Purchase Program, which is scheduled to buy 1.85 trillion euros worth of debt by the end of March. Bond-buying programs are intended to keep interest rates low and smooth access to credit for businesses and households.
Data published earlier this week showed that the eurozone’s economy did not fare as badly in the first quarter as initially expected. Gross domestic product declined 0.3 percent in the first three months of the year, the statistics agency said, not the 0.6 percent decline that was previously estimated.
Ms. Lagarde also said it was too soon for policymakers to even begin discussing when and how it might end its pandemic bond-buying program. “It’s too early, it’s premature, it’s unnecessary,” she said.
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Initial claims for state jobless benefits declined last week, the Labor Department reported Thursday.
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The weekly figure was about 367,000, a decrease of 58,000 from the previous week. New claims for Pandemic Unemployment Assistance, a federally funded program for jobless freelancers, gig workers and others who do not ordinarily qualify for state benefits, totaled 71,000, a decrease of 2,000 from the prior week. The figures are not seasonally adjusted. (On a seasonally adjusted basis, state claims totaled 376,000, a decline of 9,000.)
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It was the first time the weekly figure for initial state claims had fallen below 400,000 since the outset of the pandemic.
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New state claims remain high by historical standards but are one-third the level recorded in early January. The benefit filings, something of a proxy for layoffs, have receded as businesses return to fuller operations, particularly in hard-hit industries like leisure and hospitality.
Lawmakers in Beijing approved legislation on Thursday strengthening the authority of ministries to bar companies and individuals from obeying foreign sanctions against China. The new law was the latest in a series of moves by the Chinese government to push back against international pressure on its conduct in Hong Kong and in its far western Xinjiang region.
Passage of the new law means that multinational corporations and their employees could increasingly find themselves in a bind. The United States and the European Union have prohibited any dealings with a lengthening list of businesses and people in China who are accused of human rights violations and other offenses.
Compliance with those American and European laws would now entail a growing risk of violating Chinese laws.
China’s Ministry of Commerce issued regulations on Jan. 9 that prohibited any compliance with foreign sanctions. But the ministry has lacked the authority under that order to impose fines of more than a few thousand dollars for violations, said Nick Turner, a lawyer specializing in economic sanctions in the Hong Kong office of the Steptoe & Johnson law firm.
China’s Ministry of Foreign Affairs then imposed a series of retaliatory measures on foreign companies and individuals in March after Britain, Canada, the European Union and the United States all imposed sanctions on China over its actions in Xinjiang. The foreign ministry’s penalties included seizure of any assets in China belonging to some of the targeted individuals and institutions, denial of visas and a ban on Chinese companies having any commercial relationships with some of them.
But Western lawyers questioned whether the foreign ministry had the legal powers to do this.
The legislature has now “gone back and put in place legal authority which clearly authorizes steps that have already been announced,” Mr. Turner said.
The Standing Committee of the National People’s Congress approved the new law on Thursday afternoon and the congress released the full text late Thursday night in Beijing.
The legislation comes less than two weeks after China’s top leader, Xi Jinping, called for his country to achieve a more “lovable” image. But the legislation on Thursday was the latest sign that this has not led to fundamental shifts in foreign policy.
Joerg Wuttke, the president of the European Union Chamber of Commerce, criticized the secrecy with which the law was suddenly sped through the approval process this week. The law could hurt foreign investment by making companies feel like they are, “sacrificial pawns in a game of political chess,” he said in a statement.
The world’s largest meat processor said on Wednesday that it paid an $11 million ransom in Bitcoin to the hackers behind an attack that forced the shutdown last week of all the company’s U.S. beef plants and disrupted operations at poultry and pork plants.
The company, JBS, said in a statement that the decision to pay the ransom was made to protect its data and hedge against risk for its customers. The company said most of its facilities were back up and running when the payment was made.
The F.B.I. said last week that it believed REvil, a Russian-based group that is one of the most prolific ransomware organizations, was responsible for the attack.
JBS, which is based in Brazil, processes roughly a fifth of the United States’ beef and pork. News last week of the cyberattack on a producer so central to the U.S. meat supply spurred worries that the shutdown could shock the market, creating shortages and accelerating the rise of already-high meat prices.
The worst of those fears were not realized, in large part because JBS was able to resume its operations quickly.
The Wall Street Journal was first to report news of JBS’s ransom payment.
The breach was the latest in a string of attacks targeting critical infrastructure that have raised concerns about vulnerabilities of American businesses. Last month, a ransomware attack on the Colonial Pipeline, a vital artery that transports gasoline to nearly half the East Coast, caused gas
and jet-fuel shortages and set off panic buying of fuel in several states.
The pipeline’s operator had also paid a ransom in Bitcoin to the attackers, the Russian hacking group DarkSide, which started as an affiliate of REvil. This week, the Justice Department announced that its investigators had traced and recovered much of the ransom, or some $2.3 million of the $4.3 million worth of Bitcoin paid. The revelation highlighted that the cryptocurrency, sometimes perceived as untraceable, can be quickly tracked down by law enforcement authorities.
White House officials have said they are reviewing issues with cryptocurrencies like Bitcoin, which for years have helped enable cyberattacks.
JBS said it learned on May 30 that it had been targeted by an attack affecting some of its servers powering its IT systems in Australia and North America. It moved to suspend those systems, shutting down the production plants.
The company announced, four days after it first learned of the attack, that its global facilities were again fully operational. It said that it lost less than one day’s worth of food production during the attack and that it would be able to make it up by the end of this week.
JBS said on Wednesday it was confident that none of its data or that of its customers was breached during the attack.
The revelation this week that federal officials had recovered most of the Bitcoin paid in the recent Colonial Pipeline ransomware attack exposed a fundamental misconception about cryptocurrencies: They are not as hard to track as cybercriminals think.
That’s because the same properties that make cryptocurrencies attractive to cybercriminals — the ability to transfer money instantaneously without a bank’s permission — can be leveraged by law enforcement to track and seize criminals’ funds at the speed of the internet, The New York Times’s Nicole Perlroth, Erin Griffith and Katie Benner report.
Bitcoin is also traceable:
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The digital currency can be created, moved and stored outside the purview of any government or financial institution, but each payment is recorded in a permanent fixed ledger, called the blockchain.
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That means all Bitcoin transactions are out in the open. The Bitcoin ledger can be viewed by anyone who is plugged into the blockchain.
On Monday, the Justice Department said it had traced 63.7 of the 75 Bitcoins — some $2.3 million of the $4.3 million — that Colonial Pipeline had paid to the hackers as the ransomware attack shut down the company’s computer systems, prompting fuel shortages and a jump in gasoline prices. Officials have since declined to provide more details about how exactly they recouped the Bitcoin.
“It is digital bread crumbs,” said Kathryn Haun, a former federal prosecutor and investor at venture capital firm Andreessen Horowitz. “There’s a trail law enforcement can follow rather nicely.”
Given the public nature of the ledger, cryptocurrency experts said, all law enforcement needed to do was figure out how to connect the criminals to a digital wallet, which stores the Bitcoin.
An activist investor successfully waged a battle to install three directors on the board of Exxon Mobil last week with the goal of pushing the energy giant to reduce its carbon footprint. The investor, a hedge fund called Engine No. 1, was virtually unknown before the fight.
The tiny firm wouldn’t have had a chance were it not for an unusual twist: the support of some of Exxon’s biggest institutional investors. BlackRock, Vanguard and State Street voted against Exxon’s leadership and gave Engine No. 1 powerful support. These huge investment companies rarely side with activists on such issues.
The stunning result turned the sleepy world of boardroom elections into front-page news as climate activists declared a major triumph, and a blindsided Exxon was left to ponder its defeat, Matt Phillips reports for The New York Times.
Observers say Engine No. 1’s victory shows there is a path for shareholder activism to change how companies approach issues like racial diversity and the environment, often considered distractions from producing profits.
“We’re finding that there are other components that factor into a company’s overall performance: social, cultural and, now, environmental,” said Andrew Freedman, a partner and co-head of the shareholder activism group at Olshan Frome Wolosky, a law firm in New York. “Shareholders are able to now find a way to run a campaign where there’s alignment on the initiative because it all feeds to the bottom line.”
In other words, activist investors can now agitate for changes at companies on the ground that such shifts aren’t just the right thing to do but will also enrich shareholders by pushing up the price of the stock.
Exxon Mobil isn’t the only energy giant facing pressure on climate-related issues. On Wednesday, Royal Dutch Shell said it would accelerate efforts to cut its carbon dioxide emissions, after a Dutch court ruled Shell must reduce its global net carbon emissions by 45 percent by 2030 compared with 2019.
Gig companies like Uber and Lyft have long resisted classifying workers as employees, stating in regulatory filings that doing so would force them to alter their business model and risk a financial hit.
After California passed a law in 2019 that effectively gave gig workers the legal standing of employees, companies like Uber and Lyft spent some $200 million on a ballot initiative exempting their drivers.
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o avoid such threats in other states, the companies have pressed for legislation that classifies drivers as contractors, meaning they are not entitled to protections like a minimum wage and unemployment benefits, Noam Scheiber reports for The New York Times. Industry officials have estimated that making drivers employees could raise labor costs 20 to 30 percent.
As California considered its bill in 2019, the companies met repeatedly with a few large unions, including the Service Employees International Union and the Teamsters, to discuss a deal. But the talks collapsed because many in the labor movement refused to make significant concessions while holding the legislative upper hand.
The California bill passed in September of that year, but after a ballot initiative that exempted drivers was approved last fall, some in labor became more amenable to a deal. New York State, where discussions were already underway, was a natural place to seek one.
The initiative in New York has stalled while facing opposition from labor groups as the state’s legislative session winds down this week. But the effort seems certain to be revived, and the negotiations — in which the companies offered to grant workers bargaining rights and certain benefits but not all the protections of employment — have indicated what an eventual deal could look like in New York and beyond.
