Travelers enter security at Salt Lake City International Airport in Salt Lake City on Wednesday, Dec. 22, 2021. (Jeffrey D. Allred, Deseret News)
Estimated read time: 2-3 minutes
SALT LAKE CITY — This week with thousands of flights canceled, we have seen how COVID-19 really can still wreak havoc with travel plans. Travel can get expensive, so having travel insurance helps protect your vacation money – especially as the pandemic keeps everyone guessing.
But it turns out, fewer people say they are buying travel insurance this December than in December 2020. So, is the cost of the insurance worth it?
When the pandemic first struck, travel insurance rarely covered cancellations due to COVID-19. But times have changed according to travel insurance expert Kathy Kimmel of InsureMyTrip.com.
“The industry realized that COVID-19 would be considered unforeseen, so they are covering it as an unforeseen illness,” Kimmel explained.
So now, if you get COVID and cannot travel, travel insurance will cover your expenses including those prepaid, non-refundable deposits made on accommodations and transportation, and other expenses.
Yet, statistically, it seems interest in travel insurance is waning. In December 2020, half of travelers bought insurance according to the consumer website ValuePenguin. That number dropped down to 29{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} this December. Kimmel says that is likely because travelers still have travel insurance that carried over from canceled trips.
“What we found out from 2020 to 2021, the folks in 2020, who maybe had their trips canceled two, three times they’ve transferred to this year,” she said.
The industry realized that COVID-19 would be considered unforeseen, so they are covering it as an unforeseen illness.
–Kathy Kimmel, InsureMyTrip.com
Kimmel said typical travel policies cover health costs if you are outside the reach of your insurance network. Travel delay coverage can reimburse you for extra lodging and food if you have to quarantine during a trip. And if a canceled flight leaves you stranded at the airport, it can reimburse you for a hotel, meals, even transportation.
“First thing you always have to do is go up to the check-in counter and get some sort of document that states why you were delayed,” she advised. “Because it (the coverage) goes from then your time of flight on.”
But you should know, if you plan to cancel your trip because you are afraid you might come down with COVID, that is not a reimbursable claim unless you add “Cancel for Any Reason” coverage.
“You cancel two or more days prior to departure and you get up to 75{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} (of your trip expenses covered.) So, you’re right, at least it would be something,” Kimmel said.
Kimmel said the typical travel insurance will cost around 6{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of your trip expenses but can run 10{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} if you buy the additional Cancel for Any Reason coverage. You can buy coverage any time before your trip, but she recommended having it in hand no later than 21 days before you take off. If COVID sidelines your travel plans, you must have insurance before getting sick to make a claim.
This article first appeared in the Morning Brief. Get the Morning Brief sent directly to your inbox every Monday to Friday by 6:30 a.m. ET. Subscribe
Monday, December 6, 2021
Most investors will enter this week confused after battling through another topsy-turvy trading week.
Bitcoin nosedived at its worst by 20{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} over the weekend (more on that below). Last week, the S&P 500 saw five straight losses of at least 1{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} at one point each day, according to Bloomberg data. Small-cap stocks as measured by the Russell 2000 are officially in a correction.
Does one brave these rockier waters and buy the dip? After all, the strategy has worked wonders in the past five years as markets have been awash in liquidity. What I say is to sit tight. Honestly, you shouldn’t be confused at all given the economic implications of the new Omicron variant (and potentially others) and the Federal Reserve soon pulling back the liquidity punch bowl.
I think the team at Goldman Sachs led by Jan Hatzius nicely summed up this weekend why you should be hesitant to buy dips in the market in the near-term. In other words, the market has been right to hate the Omicron variant:
“First, Omicron could slow economic reopening, but we expect only a modest drag on service spending because domestic virus-control policy and economic activity have become significantly less sensitive to virus spread.
Second, Omicron could exacerbate goods supply shortages if virus spread in other countries necessitates tight restrictions. This was a major problem during the Delta wave, but increases in vaccination rates in foreign trade partners since then should limit the scope for severe supply disruptions.
Third, Omicron could delay the timeline for some people feeling comfortable returning to work and cause worker shortages to linger somewhat longer.”
The read here: the market probably hasn’t priced in anything Hatzius discusses above from an economic standpoint. It’s currently in the process of figuring things out. Hatzius slashed his first quarter 2022 GDP estimate to 3{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} from 4.5{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} primarily due to the spreading Omicron variant.
Then the other component at play is in fact the new Jerome Powell-led Fed in 2022, one that is more focused on controlling inflation than providing support to asset markets. To that end, Bank of America’s Chief Investment Strategist Michael Hartnett sets the stage very well for 2022 in this new Fed era:
“2021-22 investment backdrop we say similar to early stagflation of late-60s, early70s … period of inflation & interest rates breaking higher from secular low/stable trading ranges on back of high budget deficits, Vietnam, “Great Society” policies, civil unrest, political and acquiescent Fed; late-60s/70s “stagflation” winners were real assets, real estate, commodities, volatility, cash, emerging markets, all of which held their own versus inflation; losers were bonds, credit, equities, tech, all of which ultimately struggled; we think we’re in the ’69-’71 period.”
Harnett is bearish on 2022, and expects a “rates shock” and tightening financial conditions.
Happy trading! And remember, what goes up must eventually come down.
Odds and ends
Cryptocurrency: Yahoo Finance Editor-in-chief Andy Serwer and crypto reporter David Hollerith did expert jobs this weekend covering the rout in bitcoin prices (down 20{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} at one point on Saturday). So I won’t spend a lot of time on it, other than to say exuberant crypto asset prices are about to be put to the test as the Fed moves off peak liquidity. Those asset prices could also be put to the test this week as the CEOs of six major crypto companies testify at a Dec. 8 hearing of the House Financial Services Committee titled “Digital Assets and the Future of Finance: Understanding the Challenges and Benefits of Financial Innovation in the United States.” I am very interested to see if execs from Paxos, FTX, Coinbase, Circle, Stellar Development Foundation and Bitfury tell the likes of Congresswoman Maxine Waters that they want more regulation. Now is the group’s chance to send along that message, which is one I have been hearing from crypto people for over a year. I’ll reiterate: Be careful what you wish for, crytoverse.
Stock market bubble: Berkshire Hathaway’s Charlie Munger’s comments last week on valuations being crazy just like the 2000 dot-com bubble were well taken. I don’t agree 100{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} with the billionaire’s hot take, but it doesn’t take a rocket scientist to see pockets of excess in all sorts of markets at the moment (even in a market off its mid-November record highs). But to push back on Munger’s musings, look no further than this year’s IPO market. Bank of America strategist Jill-Carey Hall points out the number of traditional (non-SPAC) deals year-to-date is tracking the highest since the aforementioned tech bubble of 2000. BUT, as a percentage of market cap, deal value is half of 1999 levels. Sure doesn’t look bubblelicious to me, but then again what do I know, Munger’s net worth is 4,000 times mine (a rough guess).
DocuSign:Friday was a session for DocuSign that falls under the category for me of “wow, I haven’t seen that in a while.” Shares crashed 42{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} by the close of trading as the company is experiencing slowing growth that took execs by surprise. Hat tip to DocuSign CEO Dan Springer for even coming on Yahoo Finance Live to talk with me and Zack Guzman, while the company’s stock plunged 40{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}. Having said that, watch DocuSign for a short-term dead cat bounce this week — Springer told us he is buying $5 million in company stock on Tuesday because the market reaction looks very overdone. I suspect he won’t be alone in trying to pick the bottom.
Small-cap stocks: Few sectors have been harder hit during this two week or so sell-off than small caps, or those of companies with outsized exposure to the U.S. economy. The small-cap Russell 2000 has tanked 12{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} from its recent high on Nov. 8, per Yahoo Finance Plus data. Yahoo Finance’s markets wizard Jared Blikre notes on Twitter the iShares Russell 2000 ETF is now at “old” support levels on the charts. The selling pressure may not yet be over, small-cap experts contend.
“Given the uncertainty around the new variant and the economy, it is hard to see investors wanting to add risk heading into year-end,” says Steven DeSanctis, Jefferies’ small and mid-cap strategist (known on Wall Street as the “SMID” strategist). “When these issues are resolved, and we think that will be sooner rather than later, we see small spiking higher, like it has done numerous times since the low in March 2020. We would not be surprised to see a real January Effect with small leaping higher, beating large, and the cyclicals leading the way,”
Have no clue what the January Effect is? Give this a quick read from our friends at Investopedia.
U.S. stocks plunged on Friday, with global markets rattled by a new coronavirus variant discovered in South Africa, which fanned concerns that new growth-crushing lockdowns could be imposed if the variant spreads widely.
Trading volumes were low due to the Thanksgiving holiday in the U.S., which may have exacerbated the volatility.
However, major benchmarks fell sharply during the holiday-shortened session, with the Dow (^DJI) diving by more than 900 points — logging its worst day of the year and its third worst Thanksgiving selloff ever. Meanwhile, S&P 500 (^GSPC) sank by over 2{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, its biggest drop since February, and the Nasdaq (^IXIC) also fell sharply, but its losses were partly contained by a rally in stay-at-home stocks.
A new coronavirus variant has been discovered in South Africa, leading to an emergency session of the World Health Organization. Dubbed “Omicron,” scientists say the new B.1.1.529 strain is a concern, because it harbors a large number of mutations found in other variants — including the fast-spreading Delta variant that exploded over much of the summer — and it seems to be rapidly spreading.
While there’s no evidence yet, health officials are worried that the mutating variant could dilute or resist the efficacy of vaccines.
“It goes without saying that it’s still too early to say exactly how big a threat the new B.1.1.529 strain poses to the global economy,” Neil Shearing, Group Chief Economist at Capital Economics, said in a note.
Still, “the lesson from the past couple of years is that it’s the restrictions that are imposed in response to the virus – rather than the virus itself – that causes the bulk of the economic damage. So, the key question is how governments will respond in the event that the B.1.1.529 strain spreads,” Shearling wrote.
“That in turn will hinge on the extent to which it escapes the vaccines and, importantly, causes strains in national healthcare systems,” he added — underscoring that governments in the U.S. and U.K. had taken a “learn to live with the virus” approach, and thus are far less likely than other regions to impose new restrictions.
BioNTech (BNTX) said on Friday it expects more data on the new coronavirus variant in South Africa within two weeks to help its shots should be reworked, and that the company and Pfizer (PFE) — its vaccine partner — could redesign its vaccine within 6 weeks, with an aim to distribute it within 100 days.
Pfizer surged as much as 8{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} to record, signaling that the new variant could create demand for the vaccine.
While fears of COVID-19 dominated investors’ attention for much of 2020 and 2021, Pfizer confirms it could make variant vaccine in 100 days with the ability to make four billion doses in the first 12 months, according to Citi analyst Andrew Baum.
Travel and leisure-related stocks were among those hit the hardest early Friday, with Carnival Corp (CCL) and Royal Caribbean (RCL) down by 10{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in premarket trading. United Airlines (UAL), Delta Air Lines (DAL) and American Airlines were down each 7{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} each. Boeing slipped 6{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}. Marriott International and Hilton Worldwide fell more than 5{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}.
Travel platform Expedia (EXPE) was the fifth-worst performer in the S&P 500, dropping by 11{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} during the shortened trading day, while home sharing site Airbnb (ABNB) was down more than 5{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}.
On the flip side, stay-at-home stocks gained Zoom (ZM) up 9{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, while Netflix (NFLX) bounded higher by 2{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}.
Oil prices also swooned to the lowest levels in more than two months Friday sparking fears about a slowdown in demand.
U.S. oil dropped 10{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} its the worst day since April 2020, with U.S. crude futures down 6.2{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} to $73.57 per barrel on perceived fears of falling demand amid the new variant.
Bond yields have also fallen as the market’s inflation fears temporarily gave way to the desire for safe-haven assets. The yield on the benchmark 10-year U.S. Treasury note was down to 1.53{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} after closing at 1.63{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} on Wednesday.
“We’re still in a place where yields are so low that the safe haven of bonds isn’t as safe as it looks,” ProShares’ Simeon Hyman told Yahoo Finance Live on Friday. “You’re making not that much today on that little bit of rally in treasuries, so it’s a tough spot.”
Banks, which benefit from the higher interest rates, were broadly weaker as bond yields declined. Bank of America sinks 5.8{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, Wells Fargo drops 6.3{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, Citigroup loses 4.8{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, JPMorgan declines 4.7{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, Goldman Sachs sheds 3.9{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} and Morgan Stanley tumbled 4.9{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}
__
1:00 p.m. ET: Stocks slump on Black Friday, as new variant spooks investors
Here were the main moves in markets as of 1:00 p.m. ET:
S&P 500 (^GSPC): -106.65 (-2.27{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 4,594.81
Dow (^DJI): -903.59 (-2.52{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 34,900.79
Nasdaq (^IXIC): -353.57 (-2.23{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 15,491.66
Crude (CL=F): +$9.73 (-12.41{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $68.66 a barrel
Gold (GC=F): -$1.10 (-0.06{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $1,785.40 per ounce
10-year Treasury (^TNX): -1.4 bps to yield 1.54{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}
11:15 a.m. ET: Carnival, travel slumps on fears of South African Covid variant
Cruise lines stocks continues to retreat as covid fears swelled. Carnival Corp (CCL) shed more than 12{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, while Royal Caribbean (RCL) sunk more than 11{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}.
11:10 a.m. ET: Stocks slump midday
Here’s where markets were trading midday:
S&P 500 (^GSPC): -93.46 (-1.99{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 4,608.00
Dow (^DJI): -913.69 (-2.55{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 34,890.69
Nasdaq (^IXIC): -318.08 (-2.02{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 15,523.46
Crude (CL=F): -$9.24 (-11.79{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $69.15 a barrel
Gold (GC=F): $13.30 (0.75{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $1,797.60 per ounce
10-year Treasury (^TNX): -1.49 bps to yield 1.5{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}
10:30 a.m. ET: The end of the interest rate differential play?
Friday’s decidedly risk-off tone is calling into question the level of aggressiveness with which the Federal Reserve may pull back on its stimulus. Only a day ago, some thought the rapid surge in prices could prompt the Fed to speed up a taper — or even hike rates faster.
What a difference a day makes. Marc Chandler at Bannockburn Global FX, pointed out in a research note that the rise of a new variant is scrambling Fed expectations versus the European Central Bank and the Bank of Japan:
The dollar’s rally has been fueled by the prospect of a divergence of monetary policy that favored the Fed over the ECB and BOJ. Indeed, since the November 10 surprise jump in the October CPI to above 6{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, we had emphasized the likelihood that the Fed would have to taper quicker to give it the flexibility to lift rates earlier if needed. Since then, 4-5 Fed officials and several large banks have also underscored this possibility. However, this scenario is being called into question today, which is evident in the swaps markets and the Fed funds futures.
9:30 a.m. ET: Stocks open sink
Here’s where markets were trading just before the opening bell:
S&P 500 (^GSPC): -66.85 (-1.42{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 4,634.61
Dow (^DJI): -848.78 (-2.37{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 34,955.60
Nasdaq (^IXIC): -133.91 (-0.83{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to 15,708.01
Crude (CL=F): -$5.34 (-6.81{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $73.05 a barrel
Gold (GC=F): $21.20 (1.19{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}) to $1,805.50 per ounce
10-year Treasury (^TNX): -1.52 bps to yield 1.5{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}
NEW YORK, NEW YORK – SEPTEMBER 30: Traders work on the floor of the New York Stock Exchange (NYSE) on September 30, 2021 in New York City. In afternoon trading the Dow was down over 250 points as investors continue to worry about inflation, wages and supply chain issues. (Photo by Spencer Platt/Getty Images)
Customers walk through the Grove shopping center in Los Angeles on Thursday. Though California’s job growth was slower last month than it was in August, retailers say foot traffic is improving at shopping centers. (Francine Orr / Los Angeles Times)
California’s job growth slowed last month, and its unemployment rate remained high as the state, still pummeled by the coronavirus’ Delta variant, struggled to recover economic momentum.
Many workers were reluctant to return to their jobs because the virus was circulating in schools and businesses, or because they were looking for safer, better-paying and more flexible positions. Employers cut back on hiring as they failed to attract enough applicants and some customers shied away from patronizing indoor spaces.
“Earlier this year there was a lot of talk that the economy would come roaring back,” said Michael Bernick, a former head of the state’s Employment Development Department. “This was never realistic, given the slow return of small businesses and the slow return of workers.”
California payrolls saw a net gain of 47,400 jobs last month for a total of 16.67 million. That was well below the 94,700-job rise in August, or the 101,500 additional positions the state averaged from February through September this year, state officials reported.
The Golden State has yet to recover more than a third of the 2.7 million jobs it lost when the pandemic hit in early 2020.
Along with Nevada, California had the highest unemployment rate in the nation in September, at 7.5{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, unchanged from August. Both states rely heavily on international tourism, which has yet to bounce back.
U.S. joblessness fell sharply to 4.8{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} last month from 5.2{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} the month before.
“The pandemic was traumatic for a lot of workers, especially mothers and people working in essential jobs,” said Mary J. Lopez, an Occidental College economist. “Job losses were steepest among Black and Hispanic women. Some people may still not be working due to unreliable and unaffordable childcare, low wages, and mismatches between skills and available jobs.”
In September, California’s coronavirus transmission rates had begun to decline after a summer surge fueled by the Delta variant. But deaths were still rising and hospitals in the Central Valley and rural Northern California were overwhelmed with COVID-19 patients.
Now, to avoid a winter surge, more companies are imposing vaccine mandates on employees. And some communities are requiring businesses to check customers’ proof of vaccination before allowing them into indoor spaces. Nonetheless, many Californians remain hesitant to be vaccinated.
California’s labor force, which includes both workers and job seekers, rose by 30,500 in September to 19 million. The increase was “encouraging,” said Lynn Reaser, an economist at Point Loma Nazarene University in San Diego who attributed it to growing vaccination rates, children returning to school and rising wages.
But she noted that the number of those working or seeking jobs remains below its pre-pandemic high by 420,000 people, or 2.2{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}.
Leisure and hospitality, which includes restaurants, hotels and entertainment venues, suffered the most of any sector during the pandemic but is recovering. The sector added the highest number of positions last month, 23,300.
After COVID-19 hit last year, NewMark Merrill, a Woodland Hills firm with 65 California shopping centers, lost two-thirds of its 2.5 million weekly visitors.
The company and most of its 1,200 California tenants, including restaurants, gyms and clothing stores, got federal Paycheck Protection Program loans. It renegotiated leases, deferring rent, and built 20 outdoor dining areas.
“It was scary,” President and Chief Executive Sandy Sigal said. “But the good news is, we’re back. We can’t pretend like this is over, but we think we’re on the right path.”
Sandy Sigal is president and chief executive of NewMark Merrill, a Woodland Hills firm with 65 California shopping centers. After COVID-19 hit last year, NewMark Merrill lost two-thirds of its 2.5 million weekly visitors. Customers are returning, however, Sigal said. (Francine Orr / Los Angeles Times)
About 40 of his tenants permanently closed shop, but new businesses have replaced them. Foot traffic has returned to pre-pandemic levels.
In spite of the Delta variant, Sigal said: “People want to go outside. They want to shop. They want to socialize. They want human contact.”
Nine of California’s 11 industry sectors added jobs in September. After leisure and hospitality, the largest gain was in professional and business services, with many of the 6,900 new positions coming in computer systems design and architectural and engineering services.
“Other services,” a mixed category that includes religious and civic organizations, suffered the largest decline, 3,700 jobs.
Last week, California’s new unemployment claims rose sharply by 17,570 to 80,707, the highest level in six months. The state accounted for more than 31{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of the nation’s new claims. At the same time, U.S. job postings increased by 19.2{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} above the January 2020 level. In California they were up just 2{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}.
“Employers may have scaled back their new hire ambitions to focus on keeping the workers they have,” said Pepperdine University economist David M. Smith. “Increasing wages and incentives are also generating churn among the employed who are voluntarily leaving their jobs.”
As big outdoor venues from Disneyland to Dodger Stadium welcome visitors with vaccination and masking rules, many of the Golden State’s small businesses that rely on indoor traffic remain in dire straits.
Michael Theys, left, and Joel Dixon have lunch at the Grove shopping center on Thursday. (Francine Orr / Los Angeles Times)
TriFit, a Santa Monica gym, employed 50 people before the pandemic. Now it has 15 workers. It spent $150,000 to open an outdoor facility on its tennis courts, but half its members have yet to rejoin.
“I have had countless sleepless nights, wondering how long we can hang on,” co-owner Gina Baski said. “Our industry is in complete devastation.”
Baski said she has raised wages by 10{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} but it has been hard to get people to return to work, as many fitness instructors have opened their own businesses.
“I’ve never had more difficulty hiring in my life,” she said, adding that she is not alone. “I just met a restaurant owner who offered a $1,500 signing bonus for a dishwasher.”
Restaurants and shops where workers earn minimum wage or barely more may be finding it particularly hard to hire, but even a company such as NewMark Merrill, with starting salaries of $70,000 a year, faces challenges.
“It’s not just wages — it’s lifestyle,” Sigal said. “One of the first questions I get is, ‘Can I work at home?’ Well, it’s hard to be a property manager and work at home: You’ve got to go see the property. And I lost a great accountant because someone offered him a work-at-home job.”
In Los Angeles County, the unemployment rate dipped slightly in September, to 9.8{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} from 10.1{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in August. Payrolls grew by 31,500 positions to 4.27 million. More than half the jobs were in education as public schools reopened.
In Orange County, joblessness was 5{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} last month, down from 6{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in August. The county added 8,400 jobs, mostly in public education, for a total of 1.59 million.
In the Inland Empire, spanning Riverside and San Bernardino counties, the unemployment rate was 6.6{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in September, down from 7.6{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} the month before. The region added 7,600 jobs, for a total of 1.53 million. The region is a hub for distributing goods from the ports of Los Angeles and Long Beach, and the largest gain, 5,200 positions, was in the transportation and warehousing industries.
The data, collected in the second week of each month, come from a federal survey of 80,000 California businesses. The unemployment rate comes from a separate survey of 5,100 California households.
Matt Gephardt
Sloan Schrage
