The daily business briefing: August 28, 2020

Another 1 million people filed initial applications for unemployment benefits last week. The data marked a slight drop from the 1.1 million who applied in the previous week, but it was the 22nd time in 23 weeks that jobless claims reached or exceeded 1 million. A total of 58 million Americans have now sought new unemployment since the coronavirus crisis hit in March. The latest figure showed that layoffs were continuing as a summertime spike slowed the economic recovery that began when businesses started reopening in May after the initial lockdowns aimed at curbing the spread of the coronavirus. "With September rent due soon and food insecurity already at elevated levels, the worst is yet to come if Congress and the president can't turn their attention to pandemic relief," said Andrew Stettner, senior fellow at The Century Foundation. [USA Today]

United Airlines announced Thursday that it would have to cut 2,850 pilot jobs this year unless it gets further government aid to help it through the decimation of the travel industry by the coronavirus pandemic. The cuts would amount to a 21 percent reduction in United's pilot positions, and would be the biggest pilot furlough in the airline's history. Airlines have requested another $25 billion from the federal government to help them pay employees through March. The first tranche of aid barred the companies from cutting jobs until Oct. 1, but talks on further payments have stalled as Congress failed to reach an agreement on another round of coronavirus relief. [Reuters]

Federal Reserve Chair Jerome Powell on Thursday announced a major shift in the central bank's approach to maximizing employment and keeping inflation in check. Under the new strategy, the Fed will be less insistent on increasing rates in response to low unemployment levels. It also will be less quick to raise rates to prevent prices from rising. After the Great Recession, Fed leaders worried that if interest rates were low they would have less room to slash rates to stimulate the economy in another downturn. But the most recent expansion has convinced Fed policy makers that employment and the economy can remain supercharged without triggering unwanted spikes in inflation. [The Washington Post]

The Dow Jones Industrial Average and the S&P 500 closed higher on Thursday after Federal Reserve Chair Jerome Powell announced a new, more flexible central bank policy on managing inflation and maximizing employment. Encouraging news on COVID-19 tests and a potential vaccine also lifted markets. The Dow briefly pushed into positive territory for the year for the first time since its March coronavirus-induced plunge, before giving back some of its gains and closing up by nearly 0.6 percent. The S&P 500 gained 0.2 percent, closing at its fifth all-time high in a row. The Nasdaq lost 0.3 percent. Dow futures rose by 0.5 percent early Friday, while those of the S&P 500 gained 0.2 percent. Nasdaq futures were flat. [Reuters, CNBC]

Apparel maker Gap Inc. said Thursday that it sold $130 million worth of face masks in the second quarter, both to individuals and bulk customers that included the city of New York and the state of California. The company said its total sales for the quarter that ended Aug. 1 fell by about 18 percent to $3.28 billion, down from $4 billion in the same period last year. Online sales jumped by 95 percent as Americans staying home to reduce the risk of coronavirus infection shifted much of their shopping online. Chief Executive Sonia Syngal told analysts in an earnings conference call that Gap is the top search result on Google for "face mask style guide." Gap shares gained about 4 percent in after-hours trading after the report. [CNBC]