A rise last week in initial claims for unemployment benefits and a landmark China-Russia deal top our roundup of the day's top business and economic news stories.
Jobless Claims Rise 28,000
Initial claims for unemployment benefits rose by 28,000 last week, the largest weekly gain this year, the Labor Department reports. First-time jobless claims are an indication of layoffs. The advance figure for seasonally adjusted initial claims was 326,000. The less volatile four-week average was 322,500, a drop of 1,000.The total number of people claiming benefits in all programs for the week ending May 3 was 2,620,476, a decrease of 84,543 from the previous week. There were 4,738,083 persons claiming benefits in all programs in the comparable week in 2013.
Russia and China Sign Landmark Deal
Russia will get an economic boost from a $400 billion deal signed Wednesday by China to buy its natural gas. The deal will bind Moscow more closely to Beijing at a time when Russia’s relations with the West have severely deteriorated, Reuters reports. China's president also called for an Asian security arrangement that would include Russia and Iran and exclude the United States. The 30-year gas deal, worked out during a two-day visit by Putin to China, will help compensate for sanctions imposed against Russia by Washington and the European Union as well as enable Russia to expand the market for its gas, which now goes mostly to Europe. Gas is due to begin flowing to China as early as 2018. The agreement calls for Russian government-controlled Gazprom to supply state-owned China National Petroleum Corp. with 38 billion cubic meters of gas annually, which would represent about a quarter of China’s current annual gas consumption.
Not Lovin’ It: McDonald’s Workers Order Up Pay Hike
Hundreds of McDonald's workers protested near the fast-food chain's Oak Park headquarters on Wednesday calling for a significant pay raise to $15 per hour and the right to unionize. Several dozen were peacefully arrested, The Associated Press reports. Upward of 600 people had clogged the entrance to McDonald’s headquarters singing “We shall not be moved.” Workers in one of the five buildings on the company’s campus were asked in advance to work from home.The protest came a day before McDonald’s annual meeting. Chicago fast-food workers make about $8.25 an hour, the state’s minimum wage. Many are part-time workers without benefits and no set schedule, the AP notes.
Government to Airlines: Disclose those Fees
U.S. airlines should disclose fees to make it easier for travelers to determine the true ticket cost, the federal government said on Wednesday. Proposed Transportation Department disclosure rules would stipulate that online flight search sites such as Kayak and Expedia provide more information, while carriers would have to spell out specific charges for checked baggage, carry-on items and other services. The Transparent Airfares Act of 2014 would allow airlines to play up base fares in advertising, but disclose taxes and fees separately. In recent years, airlines have implemented extra charges for items once included in the ticket price. More airlines have added these so-called ancillary fees, with low-cost carrier Frontier Airlines last month disclosing it planned new charges for carry-on bags and certain seats. The Transportation Department said charges for additional air-travel services were difficult for buyers to determine up front.
Good News, Bad News from Best Buy
The consumer-electronics giant Best Buy posted better-than-expected quarterly results but shares in the company stock declined in premarket trading Thursday due to a weak sales outlook. Best Buy posted earnings of 33 cents a share, excluding one-time items, on sales of $9.04 billion. Analysts had expected the company to report earnings of 20 cents a share on $9.21 billion in revenue. The company also reported that same store sales fell 1.9 percent in the first quarter. The company said they expect sales to be between negative and in the low single digits in the second and third quarters. "As we look forward to the second and third quarters, we are expecting to see ongoing industry-wide sales declines in many of the consumer electronics categories in which we compete," said Best Buy CFO Sharon McCollam in a press release. "We are also expecting ongoing softness in the mobile phone category as consumers eagerly await highly-anticipated new product launches."
Sears Sales Still Dropping
Sears posted a larger loss for the first quarter as sales continue to drop despite offering heavy discounts to woo shoppers. Shares of the company fell 7 percent in pre-market trading. Sears operates its own department stores and the Kmart discount chain. Sears has been shedding assets and closing stores as it battles the operating losses and weak sales that have plagued the company since 2005, when the two chains were merged. Sears said last week that it was looking into selling its 51 percent stake in Sears Canada, which could raise about $730 million in cash at current market value. On Wednesday, Sears Canada reported its steepest fall in quarterly sales in almost five years. Sears announced it would close 80 stores or more in the year ending in January. It currently operates 1,980 Sears and Kmart stores in the United States as of February.
Congress to Vote on Water Resources Bill
On Thursday Congress is expected to vote on a $12.3 billion water resources bill that will provide funding for 34 water projects running throughout the United States. Some key programs include a flood risk management program in Iowa to an environmental restoration project in Louisiana as well as a dredging project in Boston Harbor. The Water Resources Reform and Development Act is a bipartisan compromise of companion bills passed separately by the House and Senate last year. After more than six months of negotiations, the House voted on the measure Tuesday, approving it 412-4. The Senate votes Thursday and could send the bill to President Barack Obama thereafter. The bill is supported by the U.S. Chamber of Commerce for the jobs it will create, while conservative groups have criticized the bill because of the spending necessary to fund it.