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Pandemic-led decline of U.S. cities may be reversing By Reuters

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Pandemic-led decline of U.S. cities may be reversing By Reuters



© Reuters. San Francisco’s Embarcadero Center, typically bustling during the work week, is seen empty during the mandatory shelter-in-place order in San Francisco, California, U.S. March 19, 2020. REUTERS/Kate Munsch

By Howard Schneider

WASHINGTON (Reuters) -Fears that U.S. cities would be emptied by the coronavirus pandemic are giving way to potential signs of revival, according to a series of analyses that suggest any dislocation from the last year will prove temporary.

Some data suggest a return is already underway. Cellphone tracking firm Unacast had earlier noted that phone users were shifting their overnight locations out of New York, but now sees them coming back.

“New York is growing again,” with the city adding a net 1,900 people in the first two months of 2021 versus a loss of 7,100 in the same two months of 2019 and the 110,000 estimated by the company to have left the city throughout 2020.

The turn may have begun last fall, when the usual seasonal jump in population centered around the arrival of college students roughly matched that of 2019, fewer people left the city than the year before, and “there was a large influx from areas surrounding the city, perhaps the return of some who left … at the height of the pandemic,” the company wrote in a new research report.

Manhattan and the Bronx “demonstrate particular resilience,” gaining 21,000 residents over the first two months of 2021. Three of New York City’s five counties surveyed by the company lost population, though one, Kings County, saw the pace of loss ease compared to before the pandemic.

Similarly, Bank of America (NYSE:) economists wrote last week that they “don’t see evidence of a broad urban exodus,” a conclusion that combined analysis of the company’s own card spending data as well as a survey of other reports.

Expensive markets like New York City and San Francisco saw an already established trend of population loss accelerate, Bank of America analysts wrote. But they noted that people tended not to move far. And with home sales and rental prices having dropped in those locations, the large numbers of younger people who stayed with parents during the pandemic may now be ready to get places of their own.

“We believe both have the potential for some recovery in the near term. NYC and SF remain premier cities for young renters,” the bank’s analysts wrote. “With the share of young adults living at home reaching record highs in 2020, there could be some pent-up demand.”

Those and other analyses downplaying any big shift in migration patterns due to the pandemic are just one indication that the long-term economic consequences of the past year may not be as deep as feared.

A lot remains to be determined. There are about 4 million fewer people either working or looking for work than before the pandemic, for example, with many of them sidelined either by health concerns, closed schools, the lack of available child care, or other ongoing disruptions to daily life. It remains unclear how fast those problems will ease and how quickly those people will return to jobs or the hunt for jobs.

The permanence of work-from-home rules could have a bearing as well on the economic life of cities, and particularly on the fate of office buildings and the businesses surrounding them independent of whether the permanent population is growing or not. New research from economists Jose Maria Barrero, Nicholas Bloom and Steven J. Davis suggests spending in cities may suffer a permanent hit of 5% to 10%.

But a recent Federal Reserve analysis, for example, found the failure rate of businesses has been much less than anticipated. Levels of mortgage and loan defaults have not sky-rocketed as feared, and family bank accounts on the whole have remained healthy or even flush with savings from various federal relief efforts.

EARLY NARRATIVE

Ongoing COVID-19 vaccinations have raised hopes for a broader return to normal, even in denser urban locations.

A report earlier this year by real estate site Zillow concluded there was no broad drag on urban housing markets in 2020.

“Suburban homes sold faster than urban homes by the end of 2020, but home value growth, sales volume and Zillow web traffic in urban areas has kept pace with or exceeded levels in suburban areas,” the company concluded.

While the early narrative around urban population decline seemed stark and obvious, Cleveland Fed economist Stephan Whitaker said it may have conflated people leaving denser neighborhoods with fewer people moving in – an effect he tried to disentangle in a February study using consumer credit data which he said allowed a precise look at where people lived and where they had moved.

He concluded the pandemic impact was less about people leaving denser, more populous neighborhoods, and more about people not moving to those areas, a finding consistent with younger adults holed up at parents’ homes delaying their departures.

While average monthly departures from urban neighborhoods rose 3.7%, from 266,000 to 276,000, from March through September of 2020 versus the same months in 2017 through 2019, in-migration to those places fell at double that pace, declining from 238,000 to 220,000 per month, a drop of 7.5%.

“Out-migration did increase in many urban neighborhoods, but the magnitudes probably would not fit most definitions of an exodus,” he wrote. “What is certain is that hundreds of thousands of people who would have moved into an urban neighborhood in a typical year were unwilling or unable to do so in 2020.”





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Worst-paying blue chip employers bolstered CEO pay in pandemic, report says By Reuters

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Worst-paying blue chip employers bolstered CEO pay in pandemic, report says By Reuters



© Reuters. FILE PHOTO: A delivery staff member wearing a protective mask enters a KFC fast food outlet after a delivery, amid concerns about the spread of the coronavirus disease (COVID-19), in Colombo, Sri Lanka, July 9, 2020. REUTERS/Dinuka Liyanawatt

By Jessica DiNapoli

NEW YORK (Reuters) – More than half of 100 companies with the lowest median employee wages in the boosted CEO pay by changing the rules for assessing executive performance during the COVID-19 pandemic, according to a report by a left-leaning policy group published on Tuesday.

The report from the Institute for Policy Studies found that 51 of these 100 companies, including beverage and snack maker Coca-Cola (NYSE:) Co, cruise ship operator Carnival (NYSE:) Corp and fast food corporation Yum Brands Inc, reduced median worker pay by 2% to $28,187 on average in 2020 compared to 2019, even as the median compensation for their CEOs rose 29% to $15.3 million.

The findings offer ammunition to investors opposing executive compensation hikes in non-binding votes held at the annual shareholder meetings of companies. More companies are facing shareholder backlash against their CEO pay this year than last, Reuters has reported.

The companies studied in the report bolstered executive compensation by lowering performance targets, giving retention bonuses and swapping out stock awards linked to financial results with time-based share grants, the report found.

A Carnival spokesman said in an email that CEO Arnold Donald received no cash bonus in 2020 and his total compensation in last year was down 29% versus 2019.

A Coke spokesperson referred comment to the company’s proxy statement, which notes that roughly 1,000 employees received special share awards, in addition to executives.

“We can’t rely on corporate boards to fix the problem of excessive CEO compensation,” Sarah Anderson, a co-author of the report, said in an interview. Anderson suggested in the report that companies with the highest CEO-to-average worker pay ratios should be taxed more.

The CEO-to-average worker pay ratio for the 51 companies in the report was 830-to-1.

The Yum Brands board authorized discretionary adjustments to bonus programs resulting in a $1.4 million bonus for CEO David Gibbs he otherwise would not have received, according to a securities filing. He also received a one-time stock award of $882,127, for a total 2020 compensation of $14.6 million, according to the filing.

The company’s board said the compensation boost was appropriate given that Gibbs and other executives helped stabilize the business and positioned it for success coming out of the pandemic.

In a prepared statement, Yum Brands said Gibbs gave up his base salary and used it to help fund one-time $1,000 bonuses for nearly 1,200 restaurant general managers. The company also awarded special bonuses to team members in company-owned restaurants globally.

Yum Brands identified a part-time worker at its fast food chicken chain KFC as its median employee, with a total compensation of $11,377, in the filing.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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U.S. Fed should require banks to hold more cash for climate risks -think tank By Reuters

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U.S. Fed should require banks to hold more cash for climate risks -think tank By Reuters



© Reuters. FILE PHOTO: Federal Reserve Board building is pictured in Washington, U.S., March 19, 2019. REUTERS/Leah Millis

By Pete Schroeder

WASHINGTON (Reuters) – The U.S. Federal Reserve should force banks to hold more cash to guard against potential losses due to climate change and possible steps to fight it, one of Washington’s top liberal think tanks said on Tuesday.

The plan https://www.americanprogress.org/?p=498976, published by the Center for American Progress and seen first by Reuters, is likely to inform a looming debate about exactly how far bank regulators should go in policing climate change as the Biden administration looks to tackle the issue on all fronts.

The paper argues that the Fed could move quickly to bolster banks’ capital cushions by establishing several new safeguards, including a new capital surcharge directly tied to how much pollution banks directly finance and heightened stress tests of big banks that incorporate climate risks.

Several of the changes are likely to be strongly opposed by Wall Street, and the Fed itself has taken a much more deliberate approach to climate than sought by progressive Democrats.

After lagging European counterparts on climate change under the Trump administration, the Fed has ramped up efforts in recent months, including devoting new staff specifically to exploring how climate change could impact the economy and the financial system.

“It is increasingly clear that climate change could have important implications for the Federal Reserve in carrying out its responsibilities,” said Fed Governor Lael Brainard in a March speech.

But the Fed has yet to adopt any new policies in response to climate change, a move the paper argues the regulator can ill afford.

“It would be quite easy for financial regulators to spend the next decade collecting more data, researching the issue…avoiding any actual steps to safeguard the financial system from these risks,” the paper stated. “The potential damage to the financial system is too great for regulators to wait.”

Instead, the group argues the Fed should move quickly, directing banks to hold more capital if they are exposed to more heavily polluting industries, arguing they could lose value as the world moves toward cleaner industries.

It adds the Fed should go farther with the largest banks, imposing a new capital surcharge directly tied to how much carbon they finance with their activities.

The report also called on the Fed to create a new exercise to test banks’ resilience to climate change over the long term, as well as integrate near-term climate risk into the existing annual stress test of bank finances.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Exclusive: Foxconn iPhone India output drops 50% amid COVID surge-sources By Reuters

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Exclusive: Foxconn iPhone India output drops 50% amid COVID surge-sources By Reuters



© Reuters. FILE PHOTO: The Apple Inc logo is shown outside the company’s 2016 Worldwide Developers Conference in San Francisco, California, U.S. June 13, 2016. REUTERS/Stephen Lam

TAIPEI (Reuters) – Production of the Apple (NASDAQ:) iPhone 12 at a Foxconn factory in India has slumped by more than 50% because workers infected with COVID-19 have had to leave their posts, two sources told Reuters.

The Foxconn facility in the southern state of Tamil Nadu produces iPhones specifically for India, the world’s No.2 smartphone market.

Tamil Nadu is one of the worst hit states in the second coronavirus wave engulfing India. Officials imposed a full lockdown in the state from Monday, closing public transport and shuttering shops, to try slow surging infections.

More than 100 Foxconn employees in the state have tested positive for COVID-19 and the company has enforced a no-entry ban at its factory in the capital of Chennai until late May, one of the sources said.

“Employees are only allowed to leave but not to enter the facility since yesterday,” the person said. “Only a small part of output is being kept.”

More than 50% of the plant’s capacity had been cut, both sources said, declining to be named as they were not authorised to speak to the media.

They did not specify the plant’s capacity and it was unclear how many workers were at the facility, which provides dormitory accommodation for employees.

Taipei-based Foxconn, the world’s largest contract electronics maker and a major supplier to Apple, said a small number of employees at one of its facilities in India tested positive for COVID-19 and the company was providing them with support, including medical assistance.

“Foxconn places the health and safety of our employees as our highest priority and that is why we have been working closely with local government and public health authorities in India to address the challenges that we and all companies are facing in dealing with the COVID-19 crisis,” it said in a statement to Reuters. 

Foxconn declined to comment on factory output or specific staffing levels. Apple did not immediately respond to a request for comment.

India has benefited from Apple’s move to shift some areas of production from China to other markets as it navigates a trade war between Washington and Beijing, with Apple announcing in March it had started the assembly of the iPhone 12 in India.

While Apple’s share of the budget phone-dominated India market is small, CEO Tim Cook said in January that India business doubled in the December quarter compared to the previous year, helped by an online store launch.

Foxconn similarly said strong smartphone sales contributed to a stronger-than-expected performance in the fourth quarter amid the work-from-home trend.

Market research firm Canalys said that growth in India extended through the first quarter, with Apple shipping more than a million iPhones. Demand for the iPhone 12 was supported by local assembly and attractive finance offers, Canalys said.

COVID-19 CRISIS

However, the outlook has been dimmed by the coronavirus crisis engulfing India, where COVID-19 cases and deaths have surged at a record pace in recent weeks. The country has recorded around 22.66 million infections and more than 246,000 deaths, with experts saying the true figures could be far higher.

Foxconn is not the only producer affected. Nokia (NYSE:) and Chinese smartphone maker OPPO last year suspended production at factories in India after workers tested positive for COVID-19.

Taipei-based tech research firm TrendForce on Monday trimmed its global smartphone production growth forecast to 8.5% from 9.4%, citing the coronavirus impact in India on major vendors including Samsung (KS:) and Apple.

“Smartphone brands are therefore expected to closely monitor their inventories of whole devices and adjust their subsequent production plans accordingly,” TrendForce said in a report, adding it could revise the forecast lower still if the outbreak continues to hit local production and sales in the second quarter.





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