Google’s chief executive signed off on deal at center of antitrust case, states say.
The states argue that Google reached a deal with Facebook to have the social network join its effort in an effort to “kill” a competing ad network.
In the newly unredacted portion of the lawsuit, the states said that Sundar Pichai, the company’s chief executive officer since 2015, “also personally signed off on the terms of the deal.”Credit…Jim Wilson/The New York Times
Google’s chief executive approved an agreement with Facebook at the heart of an antitrust lawsuit that 16 states and Puerto Rico have lodged against the search giant, according to a portion of the complaint revealed on Friday.
The lawsuit, led by the Texas attorney general, Ken Paxton, argues that Google has obtained and abused a monopoly over the network of technology used to deliver ads online.
When publishers started using an alternative system for selling their ad space, Google worked to undermine it by creating a similar system that it controlled, according to the lawsuit. The states argue that Google reached a deal with Facebook to have the social network join its effort in an effort to “kill” the publishers’ competing plan.
In the newly unredacted portion of the lawsuit, filed in federal court, the states said that Sundar Pichai, the company’s chief executive officer since 2015, “also personally signed off on the terms of the deal.”
The newly visible parts of the lawsuit also include details of programs that the states say Google used to mislead buyers and sellers of ad space about the precise nature of the auctions they were participating in, allowing Google to make more money in the process.
A Google spokesman said that the complaint was “still full of inaccuracies and lacks legal merit.”
“We sign hundreds of agreements every year that don’t require C.E.O. approval, and this was no different,” the spokesman said.
In another newly public portion, the states quote a February 2017 “Facebook document” that says that Google wanted to “kill” the competing system and that Facebook “baptizing their product will help significantly.”
At one point, Facebook employees working on the deal emailed Mark Zuckerberg, Facebook’s founder and chief executive, saying “We’re nearly ready to sign and need your approval to move forward.” Mr. Zuckerberg’s name is still redacted from the lawsuit, but his title is not.
In a statement, a spokesman for Meta, Facebook’s parent company, said that its deal with Google “and the similar agreements we have with other bidding platforms have helped to increase competition for ad placements.”
The antitrust lawsuit is one of several filed by government agencies against tech giants in the last two years. The Justice Department and a group of states have sued Google arguing that it has abused a monopoly over online search. This week, a judge said that the Federal Trade Commission could move forward with a lawsuit against Facebook. Both Apple and Amazon also are facing antitrust inquiries.
The judge in the case has said that Google has until Jan. 21 to respond to the latest version of the lawsuit. Google plans to ask the judge to dismiss the case, said its spokesman.
The National Labor Relations Board on Friday ordered union elections at three Starbucks stores in the Buffalo area, where two other Starbucks stores voted to unionize late last year.
The victories for the union created the only two unionized Starbucks locations out of roughly 9,000 company-owned stores in the country. The union lost at a third store in the Buffalo area but has formally objected to the outcome there.
Ballots in the coming round of Starbucks elections will be mailed to workers on Jan. 31 and will be due back on Feb. 22. The votes will be tallied by the labor board the next day.
Since workers at three locations in the Buffalo area first sought union elections in late August, employees of at least 15 other Starbucks stores have filed petitions for elections, most of them since the labor board announced a union victory in Buffalo on Dec. 9.
The campaigns appear to be driven by young, liberal and well-educated Starbucks employees in cities like Boston, Chicago and Knoxville, Tenn., who tend to be sympathetic to unions and were energized by the Buffalo victory. The company’s employees have traditionally been more liberal and better educated than those of other retail and dining establishments. They also tend to be better paid and enjoy more generous benefits.
The three stores in Buffalo where workers will begin voting this month filed petitions for their elections in November.
After the union campaign formally began there in August, Starbucks officials from out of town converged on the city, where they sought to resolve operational issues and educate workers about what joining a union would entail, according to the company.
Many workers in Buffalo have said that they found the presence of the out-of-town officials disruptive and that they felt the officials were intimidating workers as they considered whether to support the union.
In addition to the Buffalo elections, the labor board has scheduled an election to begin this month at a Starbucks store in Mesa, Ariz., where workers also filed for an election in November.
Retail sales fell 1.9 percent in December, the Commerce Department reported on Friday, reflecting a slowdown during an otherwise robust holiday shopping season that started earlier in the year for many consumers.
It was the first drop after four straight months of sales increases, though the gain in November slowed from October because of the lengthened holiday shopping season brought on by fears of product shortages and price increases. Total sales for October through December were up 17.1 percent from the same period a year earlier, according to the report. December sales rose 16.9 percent from 2020.
Beth Ann Bovino, chief U.S. economist at S&P Global, said that although there was bound to be “headline shock” over a weaker number, the broader picture for retail sales has been strong over the past few months.
“This is not a sign of consumer weakness,” said Ms. Bovino, who had forecast a decline. “Given that households have relatively strong balance sheets with high savings levels and a strong job market with wages climbing higher, it seems that consumers are not necessarily closing their pocketbooks. They’re taking a brief pause.”
Monthly retail sales
The retail sales report provides a data point on the mind-set of consumers after a report this week showed that inflation climbed to its highest level in 40 years at the end of 2021. Prices have increased as new variants of the coronavirus have exacerbated supply chain issues and robust consumer demand for goods. At the same time, the Omicron wave has caused widespread staffing shortages and may have played a role in diverting some consumers from stores and holiday gatherings.
Ms. Bovino said that she did not believe that inflation played a role in the overall sales decline but that concerns around higher prices were likely to show up in the first quarter of this year.
Economists at Morgan Stanley had forecast retail sales to rise by 0.4 percent in December. Even though inflation topped the coronavirus as the No. 1 concern for consumers it surveyed in November, that “came with no dent to spending plans,” they said in a note last week.
Instead, the holiday shopping season appeared to break records and lower-income consumers seemed to be operating with relatively better buying power, the economists wrote. At the same time, they anticipated that the Omicron wave drove more spending to goods rather than services.
The pandemic has continued to shape consumer habits in the United States.
Fewer people shopped in stores this holiday season, even though the Omicron variant did not become a prominent threat until December. Retail foot traffic in the United States was down 19.5 percent between Nov. 21 and Jan. 1 compared with 2019, according to Sensormatic Solutions. That was a slight improvement from the depths of the pandemic in 2020, when foot traffic was down 33.1 percent in the same period compared with 2019, but still a significant change.
Fewer people shopped in stores this holiday season, with more consumers relying on e-commerce.Credit…Justin Sullivan/Getty Images
As retailers grapple with inflation and supply chain issues, it has given an additional advantage to the biggest U.S. retailers. They had already benefited during the pandemic by being able to remain open while others closed, from the variety of goods that they carry and through initiatives like curbside delivery.
“We’re talking about the Walmarts and Targets and Costcos, the big players,” said Mickey Chadha, a retail analyst at Moody’s Investors Service. “They’ve leased their own ships and they’re bringing in product. They have a lot more power with vendors to get priority. And they actually planned ahead as well.”
At the same time, Mr. Chadha said, they have not had to raise their prices as much as smaller retailers, and are likely to benefit as lower-income consumers search for value to stretch their dollars.
“They are taking market share because they have the ability to price lower and absorb that hit to the margin a lot better than some of the smaller, weaker retailers,” he said.
Costco, for example, said on a December earnings call that it believed it was successfully managing the effects of inflation through its relative purchasing power and its relationships with vendors. That often meant that Costco and its suppliers were each taking less in the way of price markups, Richard Galanti, the company’s chief financial officer, said on the call.
“We’ve always said we want to be the last to raise the price and the first to lower the price, recognizing there’s a limit to what you can do based on these cost increases,” Mr. Galanti said.
Costco also acknowledged that although it was grappling with unavoidable supply chain issues, including delayed container arrivals on the West Coast, it felt “pretty good about staying in stock.”
Plenty of other retailers have said that supply chain issues cut into their revenue last year, as pandemic-related factory closures in Vietnam and shipping delays kept goods from American shelves and warehouses.
“Holiday was weaker than expected as units that were slated to arrive in December did not clear through the ports in the time frame we had anticipated,” Fran Horowitz, chief executive of Abercrombie & Fitch, said at a conference on Tuesday. “This was beyond our control and resulted in a miss of sales during the peak selling period. Beyond those delayed units, we also experienced renewed Covid-related restrictions globally.”
Still, some retail executives have said that they would rather have a supply issue than a demand issue, particularly given the sharp ebbs and flows in consumer preferences in the past 18 months. And it is not yet apparent whether price increases are tamping down demand given the quarterly performance.
Mr. Chadha said that retail sales were strong for 2021 overall, though he anticipated that the picture would change in 2022, as supply chain issues and higher prices became bigger factors.
Ms. Bovino of S&P said that she expected more selective purchasing to take hold later this year as savings accounts begin to deplete and consumers “remember what prices used to look like.”
January retail sales may also be affected by shortened store hours and closures as the Omicron wave causes widespread staffing shortages in multiple industries.
JPMorgan Chase closed out a bumper year that yielded a record $48.3 billion in profit in 2021, while reporting lower quarterly earnings despite the performance of investment bankers who raised money for companies and arranged corporate deals.
The bank, the country’s largest by assets, reported flat revenue compared with the final quarter of 2020, although profit fell 14 percent to $10.4 billion in the three months ending in December. Even so, its earnings of $3.33 a share surpassed analysts’ expectations.
Much of the decline was a result of the bank raising pay and spending more on technology, the company said in its earnings statement.
“The consumer is in really good shape” despite potential challenges from the Omicron variant and inflation, Jamie Dimon, JPMorgan’s chief executive, told analysts on a conference call. “Businesses, equally, are in very good shape.”
The company’s investment bankers capped a blockbuster year with a 37 percent jump in fees, while revenue for the banking unit surged 28 percent to $5.3 billion. Its asset and wealth management division also benefited from higher management fees and growth in deposits and loans.
But there were also laggards: Profit for the bank’s consumer division, which caters to Main Street customers, fell 2 percent to $4.2 billion. Revenue from trading fell 11 percent from a record fourth quarter a year ago, to $5.3 billion, but was still up compared with the same period in 2019.
Like JPMorgan, Citigroup reported lower fourth-quarter profit. Even so, its annual profit nearly doubled to $21.9 billion.
Net income slid 26 percent to $3.2 billion in the quarter, but still exceeded analyst forecasts. In an effort to streamline its business, the company is selling some overseas units. On Thursday, it announced a $3.6 billion sale of consumer operations in Indonesia, Malaysia, Thailand and Vietnam to UOB Group. It is also exiting from Mexico’s retail market.
Wells Fargo bucked the trend: Its fourth-quarter net income increased 86 percent to $5.8 billion, beating analyst expectations. Full-year profit rose to $21.5 billion in 2021, more than six times that of 2020. That year, the bank stockpiled rainy-day funds in case of a surge in loan defaults that did not materialize and was weighed down by efforts to clean up its fake accounts scandal.
“Everybody seems to be getting more and more confident that the recovery is continuing,” Michael P. Santomassimo, the company’s chief financial officer, said on a conference call. Given consumer spending and business activity, “we’re optimistic,” he said.
Bank stocks have risen 11 percent in the past month as investors predicted the Federal Reserve would raise interest rates this year to get inflation under control. Rising rates would clear a path for banks to increase profits because they can charge customers more in interest.
Executives at the nation’s biggest lenders have been upbeat about the economy in recent months, particularly during periods that the pandemic ebbed. They remained optimistic Friday, but acknowledged the potential for disruptions from rising inflation and surging coronavirus cases, which have caused staffing shortages in schools and businesses.
Inflation rose to the highest level in four decades at the end of last year. Rising prices have knocked consumer confidence and made businesses more uncertain about the future of the pandemic-stricken economy.
Three other major U.S. lenders — Bank of America, Goldman Sachs and Morgan Stanley — report their earnings next week.
Citigroup’s unvaccinated staff members in the United States have rushed to get shots — or request exemptions — just before its coronavirus vaccination requirement kicks in.
The bank reached 99 percent compliance with its mandate before a Friday deadline, Sara Wechter, the bank’s head of human resources, wrote on LinkedIn on Thursday. That was up from 90 percent on Jan. 7, according to a person familiar with the policies who spoke on condition of anonymity to discuss personnel matters.
The figures excluded branch workers who had been given more time to comply, employees who received medical or religious accommodations and those who live in states that do not permit vaccine mandates.
“Going into the last day, we expect the number of employees who have not complied will decrease even further,” Ms. Wechter wrote.
Citigroup announced earlier this month that unvaccinated employees would lose their jobs by the end of the month. And some may not receive year-end bonuses unless they sign documents agreeing not to sue the company, according to the person familiar with the policies.
The bank has been more assertive than its Wall Street peers on the thorny issue of vaccines. The Supreme Court on Thursday blocked the Biden administration from enforcing a vaccine-or-testing mandate for large employers, dealing a blow to a key element of the White House’s plan to address the pandemic as virus cases surge.
WASHINGTON — The Treasury Department told Arizona officials on Friday that it could claw back some of the state’s pandemic aid and withhold future payments if the state did not halt or redesign programs that use the money to undercut mask requirements in schools.
The warning was the latest development in a dispute between Gov. Doug Ducey,a Republican, and the Biden administration over how the $4.2 billion that was awarded to the state as part of the relief package that Congress passed last year can be used. Republican governors in several states have been trying to use the money for unauthorized purposes, such as cutting taxes or enacting immigration policies that are unrelated to the pandemic.
The Treasury Department first raised concerns about Arizona’s education policies last October, but the state declined to make changes.
Mr. Ducey announced last year that he was rolling out two education programs intended to undercut school mask requirements that some school districts in the state put in place.
A $163 million program using the federal relief money provides up to $1,800 in additional funding per pupil in public and charter schools. However, these schools must be “following all state laws” and open for in-person instruction. Schools that required masks would not be eligible.
A separate $10 million program funds vouchers worth up to $7,000 to help poor families leave districts that require face coverings or impose other Covid-related “constraints.”
In the letter, the Treasury Department said that if Arizona does not cease or change the programs within 60 days, it could start a process to recoup the money that is being misused. It also said that it could hold back the second installment of relief money that Arizona is scheduled to receive this year.
Arizona has so far received about $2.1 billion of the $4.2 billion that it was awarded through the $1.9 trillion relief package.
President Biden nominated three new Federal Reserve officials on Friday as he seeks to remake the central bank at a critical economic moment, announcing a slate of candidates that would make for the most diverse Fed Board of Governors in the institution’s 108-year history.
The White House nominated Sarah Bloom Raskin to serve as the Fed’s vice chair for supervision, a job created to police the nation’s largest banks after the 2008 financial crisis. He also nominated Lisa Cook, an economist at Michigan State University who has researched racial disparities and labor markets, and Philip Jefferson, an economist and administrator at Davidson College, to governor positions. Both are Black.
Mr. Biden had previously nominated Jerome H. Powell for a second stint as Fed chair and Lael Brainard, now a governor, as vice chair of the central bank. If all of his picks are confirmed to their posts, the Fed’s seven-person board in Washington would be the most diverse group in its history.
The administration had promised to make the Fed look more like the public it served, and prominent lawmakers have pushed for a focus on tougher financial regulation. The central bank is independent of politics in its operations — answering only to Congress and not to the White House — but Mr. Biden has had a chance to remake the central bank through appointments, nominating five of its seven officials in Washington.
“I have full confidence in the strong leadership of this group of nominees, and that they have the experience, judgment, and integrity to lead the Federal Reserve and to help build our economy back better for working families,” Mr. Biden said in a statement announcing the decision.
The Fed tries to guide the economy using borrowing costs and has two main goal: Keeping prices stable and fostering full employment.
Democrats tend to focus on the jobs side of that equation, but the last year has flipped that script to some degree. Inflation is running at its fastest pace since 1982 as the economy rebounds from the pandemic rapidly, eating away at paychecks and hurting consumer confidence. Getting prices under control has increasingly become a priority across parties.
Ms. Cook and Mr. Jefferson will both bring years of academic experience and economic training to bear in their roles, and both will hold a constant vote on interest rate policy.
Ms. Cook attended Spelman College and the University of Oxford and earned a doctorate in economics from the University of California, Berkeley. She was an economist on the White House Council of Economic Advisers under President Barack Obama. Mr. Jefferson has worked as a research economist at the Fed, and studied at the University of Virginia and Vassar College. He has written about the economics of poverty, and his research has delved into whether monetary policy that stokes investment with low interest rates helps or hurts less-educated workers.
Ms. Raskin’s new job would make her the nation’s top bank cop. She has extensive experience in Washington, having served in top roles at both the Federal Reserve and the Treasury in the past. She has also worked in the private sector, and is teaching a Duke University’s law school.
She is a Harvard-trained lawyer who studied economics as an undergraduate at Amherst College, and she has a track record of pushing for tougher bank regulation — something that makes her popular among Democrats, but which could earn her a tough confirmation battle.
All of the nominees need a simple majority to win confirmation, which means that they can plausibly pass with just Democrat votes, but given the party’s narrow control of the Senate, they need to either maintain the support of all of its members or garner some Republican support.
Senator Patrick J. Toomey, Republican of Pennsylvania, made clear in a statement released shortly after the pick that he has concerns with Ms. Raskin’s nomination and how she would approach financial regulation.
“I have serious concerns that she would abuse the Fed’s narrow statutory mandates on monetary policy and banking supervision to have the central bank actively engaged in capital allocation,” he said in a release after news of the picks broke on Thursday night.
The Supreme Court on Thursday blocked the Biden administration from enforcing a vaccine-or-testing mandate for large employers, parts of which were set to go into effect on Monday.
The government could try again with a new rule.
Devising a more tailored emergency rule for a specific set of higher-risk companies, addressing the court majority’s criticism of the employer mandate as a “blunt instrument,” could be quick. Or the agency could use the traditional rule-making process, but that might take years.
Employers can still enforce their own mandates, but it may be more fraught.
The blocking of a federal rule subjects larger employers to a patchwork of city and state vaccine rules, which would have been pre-empted by a single federal rule. New York City, for example, requires all on-site workers to be vaccinated, while Florida passed a law banning such requirements. And the administration’s separate mandate for federal contractors is on hold and likely headed to the Supreme Court, too. Some companies, like Boeing, have delayed mandates until its fate is certain, while others, like Citigroup, have said they are going ahead regardless.
Companies that were on the fence now probably won’t introduce mandates.
A spokesman for Macy’s, which began to request the vaccination status of its employees this month, said the retailer was “evaluating this late-breaking development.” In a November poll of companies by Willis Towers Watson, about a third of respondents said they planned to mandate vaccines only if the government’s now-discarded rule took effect.
Health experts said the ruling would exacerbate existing divides.
Many white-collar employees can remain at home, while blue-collar workers who have to conduct business in person must venture out. “This decision will be an excuse for those employers who care less about their employees to return to business as usual,” said David Michaels, an epidemiologist and a professor at George Washington University who is a former administrator for the Occupational Safety and Health Administration.
Dr. Megan Ranney, an emergency physician and the associate dean at Brown University’s School of Public Health, said that with about 30 percent of adults in the United States unvaccinated, “I worry that those folks are going to continue to not get vaccinated, unless an awful lot of employers decide that this is in their best interest to put in place.”
All over the world, families finding themselves with more time at home because of the pandemic have responded by buying more furnishings, consumer electronics and other goods made in China.
Those purchases pushed China’s trade surplus to its highest level ever last year, according to data released on Friday by the Chinese government. The country’s surplus in December also shattered by a wide margin the record for the highest single month, set only two months earlier.
China’s trade surplus reached $94.5 billion in December, breaking the previous record of $84.5 billion, set in October. The country’s trade surplus for all of last year climbed to $676.2 billion.
Monthly China trade balance
China has carefully managed its trade in recent years. Xi Jinping, the country’s leader, has called for China to become more self-reliant and avoid dependence on imports.
Beijing has particularly focused on developing globally competitive manufacturing industries while importing mostly raw materials, so as to create as many well-paid jobs as possible within China’s borders. The government has also focused during the pandemic on helping Chinese companies become more competitive, while avoiding subsidies for consumers.
By contrast, governments in the West have put more emphasis on providing direct subsidies to consumers, who have used part of the money to buy more manufactured goods from China.
Chinese officials on Friday applauded the latest trade data, saying that it fulfilled the country’s goals. “In general, the 14th Five-Year Plan foreign trade has achieved a good start,” Li Kuiwen, the director of the Statistics and Analysis Department of China’s General Administration of Customs, said at a news conference in Beijing.
At the same time, a widening trade deficit with China has become a serious drag on growth in the United States and the European Union and has become a source of political friction.
Nearly half of China’s trade surplus in December was with the United States. The bilateral imbalance in December was $39.2 billion, slightly trailing the previous record of $42 billion, set in September.
President Donald J. Trump concluded a Phase 1 trade agreement in January 2020 that called for a sharp increase in China’s imports from the United States in 2020 and 2021, followed by further increases from 2022 through 2025. China fell short of the promised increases in the first two years of the agreement. Chinese experts have said that the pandemic interfered with normal trade flows.
China will not release until Monday its full-year statistics on total economic output. But estimates by Western economists, based on data through November, indicate that the widening of the trade surplus is now the main engine keeping China’s economy going, as real estate and other sectors falter.
Google said Friday that it would spend $1 billion to purchase a London office building, making it the owner of another high-priced piece of real estate as the internet giant bets on an eventual return to office for its employees around the world.
The company said it would buy a building in London’s West End where it had already been leasing office space. The purchase is on top of another $1 billion that Google is estimated to be spending to construct an 11-story, one-million-square-foot building less than two miles away that looks like a horizontal skyscraper and will have a rooftop garden and running track.
The purchases in London, one of the world’s most expensive cities for real estate, will give Google the capacity to hold up to 10,000 employees across Britain.
The world’s largest tech companies have used flush balance sheets to become major buyers of global real estate. In September, Google announced it would spend $2.1 billion on a Manhattan office building. Apple, Meta and Amazon have also been buying up property in the United States and abroad.
Google said the purchase of the London office is part of a broader vision for a “flexible workplace,” where people can work from home and spend a few days per week in the office.
The investment, Google said in a blog post, “represents our continued confidence in the office as a place for in-person collaboration and connection.”
The S&P 500 dipped on Friday, on track to drop for a second week in a row, as the earnings reporting season began with a pair of disappointing reports from major banks.
The index fell about 0.3 percent in early trading, putting in on track for a decline of just under 1 percent for the week. That follows a drop of nearly 2 percent the week before.
Shares of JPMorgan Chase and Citigroup fell sharply, after both firms reported trading revenue for the fourth quarter that was weaker than analysts had expected. Both companies also said overall profits dropped during the period from a year earlier. JPMorgan was down more than 4 percent in early trading, which made it among the worst performing stocks in the S&P 500. Citigroup fell about 2 percent, and shares of other large financial firms like Goldman Sachs and Capital One were also lower.
The reports mark the start of earnings reporting season, and analysts expect results from S&P 500 companies to show growth of 22 percent in the fourth quarter, from a year ago. But Wall Street will also be scrutinizing executives’ forecasts, and expectations are for earnings growth in 2022 to slow substantially.
Friday’s early decline in stocks was relatively mild compared with some recent swings, which have come as investors ratcheted up expectations for interest rate increases this year by the Federal Reserve. Those moves have hit technology stocks particularly hard, with the Nasdaq composite down more than 5 percent so far this year.
On Friday, the Nasdaq was slightly higher, rebounding from a late drop the day before.
Also on Friday, the Commerce Department reported that retail sales fell 1.9 percent in December, the first drop after four straight months of sales increases. The decline in part reflected an early start to the holiday shopping season, brought on by fears of product shortages and price increases. Total sales for October through December were up 17.1 percent from the same period a year earlier, according to the report.
Crude oil prices rose on Friday, lifting shares of energy producers. West Texas Intermediate, the U.S. benchmark, has jumped nearly 5 percent this week — its fourth consecutive week of gains — and is approaching $83 a barrel. It had fallen to below $70 a barrel when the Omicron variant of the coronavirus was first reported in late November.
In November, the month before Omicron swept through Britain, the nation’s economy reached a milestone: It surpassed its prepandemic size for the first time.
Gross domestic product increased 0.9 percent in November from the month before, according to the Office for National Statistics, with the construction and manufacturing sectors returning to growth as some businesses were less disrupted by supply shortages. Wholesale and retail businesses were also important contributors.
And so, the economy was 0.7 percent larger than it was in February 2020, before the pandemic plunged Britain into a deep recession.
If the economy does not shrink by more than 0.2 percent in December, and there are not more data revisions, then the quarterly G.D.P. for the last three months of the year, the more conventional statistic, will also surpass its prepandemic levels, the statistics office said.
But the British economy is expected to take a hit in December. Omicron pushed coronavirus cases to record highs, the government instructed people to work from home, restaurants and bars faced mass cancellations, staff shortages were rampant and the Treasury had to revive some pandemic financial support for businesses.
In December, the Bank of England cut its growth forecast for the fourth quarter by half a percent, which would leave the economy 1.5 percent smaller than its prepandemic size. The central bank added that measures from the government and voluntary social distancing would weigh on the economy in the first quarter.
Although the daily number of Covid cases is falling again in Britain, the economy faces other hurdles in the next few months. Households face a notable increase in the cost of living as inflation is expected to peak at about 6 percent in the spring, energy bills are set to rise significantly and tax increases are looming.
“Omicron looks set to fade almost as quickly as it arrived, thanks partly to the rapid rollout of booster jabs,” Samuel Tombs, an economist at Pantheon Macroeconomics, wrote in a note to clients. He said he expected economic output to bounce back in February.
But growth from the middle of the year “likely will be sluggish, as households’ real incomes are squeezed by high inflation and taxes, and exports remain constrained by Brexit,” he added.
Shares of the French state-controlled utility ?lectricit? de France fell by as much as 24 percent on Friday after the government announced measures to protect retail customers from energy price rises. The company estimated that the impact of these measures on its financial performance could be as much as 8.4 billion euros ($9.6 billion). The company also announced that the shutdowns of five nuclear plants to fix defects would be extended.
Germany’s economy weathered supply chain shortages and delivery bottlenecks to expand by 2.7 percent last year, the country’s statistics office said Friday, but a weak final three months could foreshadow a decline in the near term, analysts warned. Overall growth in gross national product in 2021 was more than expected, but output remained 2 percent lower than in 2019, before the pandemic. Despite the lack of hard data for December, analysts cautioned that a resurgence of Covid infections along with fresh restrictions on shopping and entertainment pointed to the start of a possible recession at the end of the year, with the economy not picking up again until the second quarter of 2022.
Microsoft has selected a law firm to review its sexual harassment and gender discrimination policies, the company’s board announced on Thursday, after shareholders raised alarms about how Microsoft and Bill Gates, one of its founders, had treated employees, especially women.
The board said it had chosen Arent Fox, based in Washington, D.C. Microsoft said the firm had never done employment-related work for it in the past.
Shareholders passed a resolution during the company’s 2021 annual meeting to review the policies Microsoft has in place for its employees to protect them against abuse and unwanted sexual advances.
The resolution passed with support from almost 78 percent of Microsoft’s shareholders. It was the only of five proposals on ethical issues put forth by shareholders to succeed. Others, like a call for a report on race- and gender-based pay gaps at the company and a pledge to prohibit sales of facial recognition to government entities, failed.
“Microsoft is under intense public scrutiny due to numerous claims of sexual harassment and an alleged failure to address them adequately and transparently,” the text of the resolution said. “Reports of Bill Gates’s inappropriate relationships and sexual advances toward Microsoft employees have only exacerbated concerns, putting in question the culture set by top leadership and the board’s role holding those culpable accountable.”
Mr. Gates solicited at least two employees while he was running Microsoft, according to reports in The New York Times and The Wall Street Journal. In one incident, in 2007, Mr. Gates sat through a presentation by a Microsoft employee, then immediately emailed her to ask for a date. Microsoft leaders later warned Mr. Gates not to do things like that. In 2019, Microsoft’s board received a letter from an engineer claiming to have had a sexual relationship with Mr. Gates in 2000. A spokeswoman for Mr. Gates confirmed that the two had had an affair that “ended amicably.”
Satya Nadella, Microsoft’s chief executive, said in a statement on Thursday that workplace culture was Microsoft’s “No. 1 priority.”
“We’re committed not just to reviewing the report but learning from the assessment so we can continue to improve the experiences of our employees,” he said.
Karen Weise contributed reporting.