The U.S. economy grew 1.6 percent in the second quarter, returning to prepandemic size.

The G.D.P. figure was the latest gauge of a recovery that could be challenged by the Delta variant of the coronavirus. On an annualized basis, second-quarter growth was 6.5 percent.

Daily Business Briefing

July 29, 2021Updated July 29, 2021, 9:03 a.m. ETJuly 29, 2021, 9:03 a.m. ET

The G.D.P. figure was the latest gauge of a recovery that could be challenged by the Delta variant of the coronavirus. On an annualized basis, second-quarter growth was 6.5 percent.

Trevor Milton, the Nikola founder, is charged with securities fraud.Robinhood’s shares are set to begin trading, as investors question its $32 billion valuation.Here’s how companies are responding to the rise in coronavirus cases.Shell and TotalEnergies report higher earnings as gas and oil prices rise.Credit Suisse finds incompetence but no criminal conduct in Archegos debacle.As they begin to set sail again, cruises lines are optimistic for a turnaround.



4th qtr. 2019 level




Gross domestic product

Adjusted for inflation and

seasonality, at annual rates


4th qtr. 2019 level




Gross domestic product

Adjusted for inflation and

seasonality, at annual rates

Vaccinations and federal aid helped lift the U.S. economy out of its pandemic-induced hole this spring. The next test will be whether that momentum can continue as coronavirus cases rise, masks return and government help wanes.

Gross domestic product, the broadest measure of economic output, grew 1.6 percent in the second quarter of the year, the Commerce Department said Thursday, up from 1.5 percent in the first three months of the year. On an annualized basis, second-quarter growth was 6.5 percent.

The growth, fueled by strong consumer spending and robust business investment, brought output, adjusted for inflation, back to its prepandemic level. That is a remarkable achievement, exactly a year after the economy’s worst quarterly contraction on record. After the last recession ended in 2009, G.D.P. took two years to rebound fully.

Cumulative percentage change

in G.D.P. from the start of the

last five recessions


quarters since

recessions began

Cumulative percent change in G.D.P.

from the start of the last five recessions


quarters since

recessions began

But the second-quarter figure fell short of economists’ forecasts, and the recovery is far from complete. Output is significantly below where it would be had growth continued on its prepandemic path. Other economic measures remain deeply depressed, particularly for certain groups: The United States still has nearly seven million fewer jobs than before the pandemic. The unemployment rate for Black workers in June was 9.2 percent.

Growth might have been stronger had it not been for supply-chain disruptions and labor challenges that made it difficult for many businesses to keep their shelves stocked and their stores staffed. Those issues, combined with a rush of consumer demand, contributed to faster inflation in the second quarter. Consumer prices rose 1.6 percent from the first quarter of the year to the second. Without adjusting for inflation, economic output rose 3.1 percent.

Now a new threat is emerging in the highly contagious Delta variant of the coronavirus, which has led to a surge in cases in much of the country. The Centers for Disease Control and Prevention recommended this week that even vaccinated people should wear masks indoors in some parts of the country, and some mayors and governors have reimposed mask mandates.

Few economists expect a return to widespread business shutdowns or stay-at-home orders. But if the resurgent virus leads to renewed caution among consumers — a reluctance to dine at restaurants, hesitation about booking a late-summer getaway — that could weaken the recovery at a crucial moment.

“The reason that is concerning is that this burst of activity around reopening has been driving the economy the past couple months,” said Michelle Meyer, head of U.S. economics at Bank of America. “Even a modest change in behavior could show up more meaningfully this time around.”

And this time, workers and businesses may have to face the pandemic without much help from the federal government. Roughly half the states have cut off enhanced unemployment benefits in recent weeks, and the programs are set to end nationally in September. The Paycheck Protection Program, which helped thousands of small businesses weather the crisis, is winding down. A federal eviction moratorium will end this week if the Biden administration doesn’t act to extend it. And there is no sign that Congress intends to pass a fourth round of direct checks to households.

Nela Richardson, chief economist for ADP, the payroll processing firm, said the second quarter may stand as a high-water mark for the recovery, when federal aid was still flowing and when vaccinations and the lifting of restrictions gave people an opportunity to spend.

“All the winds were going in one direction, which was to push the economy forward,” she said. “The more interesting question is: Where do we go from here?”


Prosecutors said that for nearly a year, Mr. Milton used social media, television and podcasts to spread “false and misleading statements regarding Nikola’s product and technology.”Credit…Massimo Pinca/Reuters

Federal prosecutors on Thursday filed securities fraud charges against Trevor Milton, the former chief executive of Nikola, an electric vehicle start-up, the most prominent case against an executive with a business that listed its shares on the stock exchange through a merger.

An indictment announced Thursday by the U.S. attorney’s office in Manhattan charged Mr. Milton with misleading investors — in particular retail investors — about the technology for battery and hydrogen powered vehicles it had hoped to manufacture.

Prosecutors said that for nearly a year, Mr. Milton used social media, television and podcasts to spread “false and misleading statements regarding Nikola’s product and technology.”

One such misleading statement, the charging document said, concerned the company’s Nikola One long-distance truck prototype. The prototype did not work, contrary to the glowing statements Mr. Milton made about it.

Federal prosecutors and securities regulators started investigating into Nikola last fall around the time an investment firm put out a report questioning its products and some of Mr. Milton’s claims. That firm, Hindenburg Research, said the company had put out a promotional video to suggest it had a working prototype — but never disclosed the truck was moving forward only because it was rolling down a hill in neutral gear. Mr. Milton resigned a few weeks later.

Nikola went public in June 2020 in a $700 million merger with a special purpose acquisition company, or SPAC, called VectorIQ. SPACs are blank-check companies that raise money from investors in the hopes of finding a company with an existing business to buy.

This is a developing story. Check back for updates.

Shares of Robinhood will begin trading at $38 a share on Thursday.Credit…Chris Delmas/Agence France-Presse — Getty Images

Shares of the investing app Robinhood begin trading on Thursday, after a highly anticipated initial public offering priced at $38 a share. That was at the low end of the range bankers set for the deal, adding extra intrigue to the company’s first day of trading. Even so, Robinhood’s I.P.O. raised $1.9 billion from investors, valuing the eight-year-old firm at nearly $32 billion.

Is Robinhood really worth that much?

The numbers tell only part of the story. Robinhood has 22.5 million accounts, but they are far smaller, $4,500 on average, than that of its rival Charles Schwab, with an average balance of $200,000. Not captured in those numbers is that Robinhood’s customers are an average age of 31, far younger than rival brokers’ typical clientele. If Robinhood can retain its young customers through to retirement, or better yet convert them into credit card or banking customers, as Robinhood says it wants to, those accounts could be worth a lot more over time.

“Robinhood has something no one else has: 22.5 million youngsters,” said Thomas Peterffy, who founded Interactive Brokers in the 1970s. “That’s huge.”

But institutional investors are wary, and many sat out of the I.P.O. The DealBook newsletter spoke with investment firms big and small, and a common view is that $32 billion is high, especially considering Robinhood still faces various investigations and lawsuits tied to its business model that, because it charges no commissions, attracts inexperienced traders and, some say, encourages them to take huge risks in the market.

“There are a lot of red flags,” said David Erickson, who used to run equity underwriting at Barclays and now teaches at Wharton. “This is as far from a ‘must own’ for most big institutional investors as you can get.”

But leaving Wall Street befuddled is part of Robinhood’s story. The app is a disrupter that pledges to democratize finance. As part of its I.P.O., Robinhood sold as much as a third of the shares directly to its customers through its app, upending the traditional process. Whether these investors hold onto, buy more or quickly dump the stock is the biggest question when it opens for trading.

Hordes of retail investors banded together on Robinhood to stoke the meme-stock frenzy, turning the app into the stock market’s equivalent of David’s slingshot. Many of those same investors who piled into GameStop, AMC and others will ultimately decide whether Robinhood’s own stock will strike another perceived blow for the proverbial little guy.

Apple’s new mask policy will affect its stores where Covid-19 cases are high.Credit…Mark Lennihan/Associated Press

Companies are rushing to revisit their coronavirus precautions, with some mandating vaccines and pushing back targets for when employees are expected to return to the office, as cases rise across the United States, fueled by the Delta variant and slower pace of vaccinations.

Lyft said on Wednesday that it would not require employees to return to the office until February, while Twitter said it would close its newly reopened offices in San Francisco and New York and indefinitely postpone other reopening plans.

Their actions follow announcements by authorities in California and New York City that they will require hundreds of thousands of government workers to get inoculations or face weekly testing. And President Biden is set to announce that all civilian federal workers must be vaccinated or submit to regular testing, social distancing, mask requirements and restrictions on most travel.

Apple will start requiring employees and customers to wear masks regardless of their vaccination status in more than half of its stores in the United States, it said on Wednesday, a new sign that shopping in the country may soon resemble earlier days of the pandemic.

Google will require employees who return to the company’s offices to be vaccinated against the coronavirus. It also said it would push back its official return-to-office date to mid-October from September. Google has more than 144,000 employees globally.

Netflix will require the casts of all its U.S. productions to be vaccinated, along with anyone else who comes on set. It’s the first studio to establish such a policy.

Facebook will require employees who work at its U.S. campuses to be vaccinated, depending on local conditions and regulations. Facebook, which has roughly 60,000 workers, said in June that it would permit all full-time employees to continue to work from home when feasible.

The Durst Organization, one of the largest private real estate developers in New York City, is requiring all of its employees in nonunion positions to be vaccinated by Sept. 6 or face termination. Durst has about 350 nonunion employees and about 700 union workers.

The Walt Disney Company said Wednesday that it would require cast members and guests older than 2 to wear face coverings in all indoor locations at its Walt Disney World Resort and Disneyland Resort, effective July 30.

Filling up at at Shell station in Denver. Royal Dutch Shell said Thursday it would increase its dividend and buy back shares.Credit…David Zalubowski/Associated Press

Two of Europe’s largest oil companies, Royal Dutch Shell and TotalEnergies, the new name for Total, reported sharply higher earnings for the second quarter on Thursday as higher energy prices and reviving demand for oil and natural gas bolstered results.

Shell’s adjusted earnings were $5.5 billion, compared with just $638 million in the period a year earlier, when much of the global economy gripped by lockdowns to curb the spread of the coronavirus. TotalEnergies — the new name is meant to reflect the Paris-based company’s growing emphasis on renewables and electricity — also reported a big jump in adjusted net income for the quarter: $3.5 billion versus $126 million a year ago.

Shell, which disappointed investors last year when it sharply cut its dividend for the first time since World War II, said that it would increase its dividend for the second quarter by 38 percent, to 24 cents a share. Shell also said it aimed to buy back $2 billion worth of shares in the second half of this year.

Shell’s share price gained more than 3 percent Thursday. TotalEnergies, which also announced plans to buy back shares, gained 2.2 percent.

Ben van Beurden, Shell’s chief executive, said that the company’s decision to sweeten the rewards for shareholders reflected confidence in the future after last year’s brutal downturn set off by the pandemic.

He also said that he thought oil prices, which averaged $69 a barrel in the quarter compared with $30 a barrel a year earlier, were supported by market fundamentals.

“Supply is going to be restrained and demand quite strong,” he said during a news conference Thursday.

A Credit Suisse branch in Bern, Switzerland.Credit…Arnd Wiegmann/Reuters

Credit Suisse issued a report on Thursday that dissected in painful detail the “fundamental failure of management and controls” that led the bank to lose $5.5 billion from its business with the investment fund Archegos Capital Management earlier this year.

But investigators from the New York law firm hired to conduct the autopsy attributed the losses to incompetence and fear of alienating a big client, and said that none of the bank employees “engaged in fraudulent or illegal conduct or acted with ill intent.”

Credit Suisse, which also reported a big drop in profit on Thursday, said it would use the Archegos debacle “as a turning point for its overall approach to risk management.” The bank said that 23 employees would forfeit or be required to pay back $70 million in bonuses, and that nine in the group would be fired.

Archegos collapsed in March after its stock market bets, financed with money borrowed from Credit Suisse and other banks, turned sour. Credit Suisse was slower than Goldman Sachs and other creditors to liquidate Archegos’s positions and suffered the biggest losses.

But the risk of doing business with Archegos had been apparent for years, according to the 165-page report published Thursday. In 2012 its founder, Bill Hwang, while running another fund, pleaded guilty to a United States charge of wire fraud and settled insider trading allegations with the Securities and Exchange Commission, according to the report by the law firm Paul, Weiss, Rifkind, Wharton & Garrison. He had also been banned in 2014 from trading in Hong Kong.

In 2015, Credit Suisse employees “shrugged off” Mr. Hwang’s history after reviewing the risk of doing business with him, the Paul, Weiss report said. In subsequent years the bank allowed Archegos to make big bets using mostly borrowed money, and failed to take action as the fund chronically exceeded limits on the amount of risk it was allowed to assume.

Credit Suisse executives ignored numerous red flags because they were aware that Archegos was working with other banks and were afraid of alienating an important client. When Credit Suisse risk managers suggested in February that Archegos be required to post an additional $1 billion in cash to reduce its leverage, people responsible for working with the fund said that would be “pretty much asking them to move their business,” according to the report.

“The Archegos matter directly calls into question the competence of the business and risk personnel who had all the information necessary to appreciate the magnitude and urgency of the Archegos risks, but failed at multiple junctures to take decisive and urgent action to address them,” the report from Paul, Weiss said.

This week Credit Suisse appointed David Wildermuth, a veteran Goldman Sachs executive, as its chief risk officer, the latest in a series of high-level management changes. Lara Warner, who served as the bank’s chief risk officer and chief compliance officer, stepped down in April.

Archegos remains a burden on Credit Suisse earnings. The bank said Thursday that net profit in the second quarter fell nearly 80 percent, to 253 million Swiss francs, or $278 million. The bank booked an additional loss from Archegos of $653 million in the quarter, and also absorbed an 18 percent decline in sales, to 5.1 billion francs.

Credit Suisse also updated its progress in salvaging $10 billion that investors had put into funds organized by the bankrupt firm Greensill Capital. Credit Suisse, which marketed the so-called supply chain finance funds, said it would return at least $5.9 billion to investors, including a payment scheduled for August.

The Celebrity Edge cruise ship, docked at Port Everglades in Fort Lauderdale, Fla.Credit…Lynne Sladky/Associated Press

Nothing demonstrated the horrors of the coronavirus contagion in the early stages of the pandemic like the major outbreaks onboard cruise ships, when vacation selfies abruptly turned into grim journals of endless days spent confined to cabins as the virus raged, eventually infecting thousands of people on board, and killing more than 100.

It was difficult to imagine how the ships would be able to sail safely again. Even after the vaccination rollout gained momentum in the United States in April, allowing most travel sectors to restart operations, cruise ships remained docked in ports, costing the industry billions of dollars in losses each month, report Ceylan Yeginsu and Niraj Chokshi for The New York Times.

Together, Carnival, the world’s largest cruise company, and the two other biggest cruise operators, Royal Caribbean and Norwegian Cruise Line, lost nearly $900 million each month during the pandemic, according to Moody’s, the credit rating agency.

Several epidemiologists questioned whether cruise ships, with their high capacities, close quarters and forced physical proximity, could restart during the pandemic, or whether they would be able to win back the trust of travelers.

But the opposite has proved true, said Richard D. Fain, chairman and chief executive of Royal Caribbean Cruises. “The ship environment is no longer a disadvantage, it’s an advantage because unlike anywhere else, we are able to control our environment, which eliminates the risks of a big outbreak,” he said.

After months of preparations to meet stringent health and safety guidelines set by the Centers for Disease Control and Prevention, cruise lines have started to welcome back passengers for U.S. sailings, with many itineraries fully booked throughout the summer.

Carnival said bookings for upcoming cruises soared by 45 percent during March, April and May as compared with the three previous months, while Royal Caribbean recently announced that all sailings from Florida in July and August were fully booked.

“The demand is there,” said Jaime Katz, an analyst with Morningstar.

The industry’s turnaround is far from guaranteed. The highly contagious Delta variant, which is causing a surge of cases around the world, could stymie the industry’s recovery, especially if large outbreaks occur on board. But analysts are generally optimistic about its prospects. That optimism is fueled by what may be the industry’s best asset: an unshakably loyal customer base.

ArcelorMittal, Europe’s largest steel company, reported net income of $4 billion for the second quarter on Thursday, the highest in more than a decade, as economies rebounded from the severe downturn of the pandemic. Aditya Mittal, the chief executive, said that the steel maker expected to spend $10 billion over the next decade reducing carbon emissions, and that he expected governments to foot half that bill.

Facebook said on Wednesday that revenue rose 56 percent to $29 billion in the three months ending in June compared with the same period last year, while profits rose 101 percent to to $10.4 billion, as the social network continues to benefit from a surge of users spending more time online during the pandemic. Advertising revenue, which continues to be the bulk of Facebook’s income, rose 56 percent to $28.6 billion, easily surpassing Wall Street expectations. Roughly 3.51 billion people now use one of Facebook’s apps every month, up 12 percent from a year earlier.

Ford Motor said on Wednesday that its profit for the three months that ended in June fell by about 50 percent, to $561 million, in large part because a global shortage of computer chips kept the company from selling more cars and trucks. The result, however, was not as bad as the automaker had feared. Ford also gave a more upbeat outlook for the full year, saying it now expected an adjusted operating profit in the range of $9 billion to $10 billion, some $3.5 billion more than it had previously forecast.

Boeing on Wednesday said that it made a $587 million quarterly profit, a result that surprised Wall Street, which had been expecting a loss, and a strong sign that the aerospace giant is overcoming the 737 Max crisis, problems with its 787 Dreamliner jet and the economic shock caused by the pandemic. The profit for the second quarter, which ended in June, is a big turnaround from the $2.4 billion loss Boeing reported in the same period last year. Wall Street analysts had expected Boeing to lose more than $100 million in the quarter this year, according to S&P CapitalIQ.

Initial claims for state jobless benefits declined slightly last week, the Labor Department reported Thursday.

The weekly figure, seasonally adjusted, was about 400,000, a decrease of 24,000 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 95,166, down about 14,700 from the week before.

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. (With the latest report, The New York Times is returning to an emphasis on seasonally adjusted figures for state claims. A change in methodology for seasonal adjustments last year, several months after the pandemic’s onset, made comparisons with earlier data more difficult.)

More than 20 states have recently moved to discontinue some or all federal pandemic unemployment benefits — including a $300 weekly supplement to other benefits — even though they are funded through September. Officials in those states said the payments were keeping people from seeking work.

A survey of 5,000 adults conducted June 22-25 by Morning Consult found that those whose unemployment benefits were about to expire felt more pressure to find work. But of all those on unemployment insurance, relatively few — 20 percent of those who had worked full time, and 28 percent of those who had worked part time — said the benefits were better than their previous work income in meeting basic expenses.

— The New York Times

AstraZeneca shots ready for use in Milan this year. The vaccine was developed with Oxford University.Credit…Alessandro Grassani for The New York Times

AstraZeneca has released one billion coronavirus vaccine doses to 170 nations this year, the company said on Thursday, an important milestone despite the many challenges that its low-cost vaccine has faced — including legal fights with the European Union, slashed deliveries and hesitancy in many countries.

The AstraZeneca vaccine, which was developed with Oxford University, was once earmarked for broad use throughout Europe and other continents, including Africa.

But the vaccine has been held back by various problems. AstraZeneca has been embroiled in a legal dispute with the European Union after the company said this year that it could deliver only a third of the 300 million doses it was expected to provide to the bloc.

Several European countries, as well as Australia and Canada, stopped using the AstraZeneca vaccine for young people after reports of extremely rare but serious blood clots. Denmark and Spain have stopped using it altogether because of the blood clot risk. South Africa stopped using the vaccine after it was found to be ineffective on a variant there. And the United States has never approved it. (AstraZeneca said on Thursday that it would seek American approval in the second half of the year.)

Experts say they fear that the negative publicity the vaccine has received in some countries — President Emmanuel Macron of France called the vaccine “quasi-ineffective” among those over 65 — may have also affected others that are in critical need of doses.

“We are definitely seeing that hesitancy in high-income countries can affect low-income countries,” Andrew Pollard, a professor of pediatric infection and immunity who leads the group at Oxford University that developed the vaccine with AstraZeneca, said on the BBC on Thursday.

Dr. Pollard added that he believed most people across the world were desperate to receive the vaccines and that the main issue remained the inequitable distribution of doses.

AstraZeneca, which has pledged not to make any profit from the shots, said on Thursday that its Covid vaccine sales for the first half of the year had reached $1.2 billion. In comparison, Pfizer, which created a shot with the German company BioNTech and has made no such promise, said it predicted its Covid vaccine sales to reach more than $33 billion by the end of the year.

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