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    More than a third of jobless Americans are still long-term unemployed — and without benefits

    There were 2.7 million people long-term unemployed in September. These people, who’ve been out of work at least six months, account for 34.5% of all unemployed Americans.
    The number of long-term unemployed fell to its lowest level in a year, but is still 1.6 million higher than before the pandemic.
    Federal unemployment benefits for the long-term jobless expired on Labor Day.

    People receive information as they attend a job fair at SoFi Stadium on Sept. 9, 2021, in Inglewood, California.
    PATRICK T. FALLON | AFP | Getty Images

    More than a third of jobless Americans are still long-term unemployed, and federal benefits for these workers ended more than a month ago.  
    However, the number of long-term unemployed has been falling and last month reached its lowest level in a year.

    In September, 2.7 million people — 34.5% of unemployed Americans — were long-term unemployed, according to the U.S. Bureau of Labor Statistics. This is a period of joblessness that lasts at least six months and generally poses elevated financial risk for households.

    The number and share of long-term unemployed were at their lowest levels since September and October 2020, respectively, as the economic recovery continues.
    They’ve also fallen significantly from their pandemic-era peaks in March 2021, when almost 4.3 million people (43.4% of all unemployed workers) were considered long-term jobless.
    “In the past three months, the number of long-term unemployed has fallen by 1.3 million,” said Brian Deese, director of the White House’s National Economic Council. “That is the largest three-month decline since [the Bureau of Labor Statistics] began keeping records in 1948.”
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    However, there remain 1.6 million more long-term unemployed than before the pandemic. Such households no longer receive federal income support, which ended on Labor Day.  
    The long-term jobless are typically ineligible for state unemployment benefits, which generally last for up to 26 weeks. However, Congress had authorized federal benefits for such individuals once their state aid expired. That helped shore up household finances, which may have otherwise dropped significantly.
    Congress declined to extend benefits again. (It had passed two other extensions after the CARES Act, in December 2020 and March 2021.)

    Aside from reduced income, the long-term jobless also generally have a harder time finding a new job, according to labor economists. Their long-term earnings potential is generally affected and they face higher odds of losing a future job.
    The September jobs report suggested that the Covid delta variant wave caused a slowdown in employment growth, perhaps due to a cutback in hiring amid lackluster consumer demand or workers’ reluctance to take in-person jobs due to health fears. It also hinted that unemployment benefits weren’t keeping people form looking for work.
    A report from the U.S. Department of Labor on Thursday showed an easing of the number of people seeking unemployment benefits. Claims for benefits fell to their lowest level since March 14, 2020, in the early days of the pandemic.

    That suggests an improvement in the labor market as Covid infections have fallen from their recent peak, which may make it easier for the long-term unemployed to find work. Some experts still strike a note of caution.
    “With job openings still at high levels, the conditions for an economic recovery remain in place, but progress finding quality jobs is coming slower than expected,” said Andrew Stettner, a senior fellow at The Century Foundation.

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    Walgreens CEO Roz Brewer: Tobacco sales under 'real scrutiny' as drugstore chain steps up health-care focus

    Walgreens Boots Alliance CEO Roz Brewer said the drugstore is taking a hard look at the merchandise it sells as it steps up its health-care focus.
    “Tobacco is one of those areas that’s under real scrutiny right now,” she said in a CNBC interview. “And so you’ll see more to come in that area.”
    Its rival CVS Health stopped selling cigarettes and other tobacco products in 2014.

    A person enters a Walgreens store in San Francisco, California, U.S., on Tuesday, April 13, 2021.
    David Paul Morris | Bloomberg | Getty Images

    Walgreens Boots Alliance CEO Roz Brewer said the drugstore is taking a hard look at whether it will continue to sell cigarettes and tobacco products as it steps up its focus on health care.
    “We are thinking about what’s next in our stores,” she said in an interview with CNBC’s Bertha Coombs that aired Thursday. “And how do we really project a healthy-for-you profile when you enter our stores? Tobacco is one of those areas that’s under real scrutiny right now. And so you’ll see more to come in that area.”

    Walgreens beat Wall Street’s expectations on Thursday for fiscal fourth-quarter earnings, as it got a lift from Covid-19 vaccinations. Sales in the three-month period reflected the strength of health and wellness-related merchandise, such as at-home Covid tests, vitamins and over-the-counter medications for cough, cold and flu.
    Comparable retail sales rose 6.2% in the fourth quarter compared with the year-ago period. That increased to 7.2% when the company excluded sales of tobacco and e-cigarettes.
    For years, Walgreens has been under scrutiny from some investors and public health officials for selling the products. Walgreens has scaled back tobacco-related merchandise, such as stopping sales of e-cigarettes. It also raised the tobacco buying age to 21 in 2019 after the Food and Drug Administration alleged that the drugstore chain was selling to minors.
    Yet its major competitor already took tobacco off shelves. CVS Health stopped selling cigarettes and related products in 2014, saying it did not align with the company’s health-care mission.
    The FDA has taken a tougher stance on e-cigarettes, amid concerns that vaping is leading to a rise in tobacco use among teens — especially with flavors like candy, fruit and mint. Early this week, it approved an e-cigarette brand for sale in the U.S., saying it could benefit some adult smokers who switch products. However, it did not approve some of the company’s flavored products.

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    Investment in space companies exceeds $10 billion this year, a new annual record

    Private investment in space companies hit $3.9 billion in the third quarter, according to a report this week by New York-based firm Space Capital.
    That propels this year to a new annual record of $10.3 billion, exceeding the record of $9.8 billion set in 2020, the report said.
    Space companies closing SPAC (special purpose acquisition company) mergers and going public made up a significant portion of the capital raised in the third quarter.

    Pete Cannito, Redwire Corporation at the New York Stock Exchange, September 8, 2021.
    Source: NYSE

    Private investment in space companies hit $3.9 billion in the third quarter, propelling this year to a new annual record of $10.3 billion, according to a report this week by New York-based firm Space Capital.
    “This quarter sets a new record for yearly infrastructure investment, having surpassed the previous of $9.8B set in 2020,” Space Capital managing partner Chad Anderson wrote in the report.

    The quarterly Space Capital report divides investment in the industry into three technology categories: infrastructure, distribution and application.
    Infrastructure includes what commonly would be considered as space companies, such as firms that build rockets and satellites.
    Space companies closing SPAC mergers and going public made up a significant portion of the capital raised in the third quarter – with moves completed by Rocket Lab, Spire Global, BlackSky, Momentus, and Redwire. The two largest deals in the quarter were by ORBCOMM, which was taken private for $1.1 billion, and satellite broadband company OneWeb, which raised $550 million.
    With more SPAC deals expected to close in the fourth quarter, Anderson wrote that “the average round size and the number of rounds are also on track to set new records at the end of Q4.”
    In total, Space Capital tracks 1,654 companies which have raised $231.2 billion in cumulative global equity investment since 2012 across its three space categories.

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    Walgreens boosts stake in primary-care company VillageMD with a $5.2 billion investment

    Walgreens Boots Alliance is becoming the majority owner of VillageMD, as it opens hundreds of doctor offices with the primary-care company.
    It plans to have at least 600 primary-care clinics in more than 30 U.S. markets by 2025 and 1,000 by 2027.
    The deal is part of an effort to turn neighborhood drugstores into health-care destinations with doctors who provide care, write prescriptions and draw traffic to the retail locations.

    Walgreens and VillageMD
    Source: Walgreens

    Walgreens Boots Alliance said Thursday that it has agreed to become the majority owner of VillageMD, as it opens hundreds of doctor offices with the primary-care company.
    As part of the deal, the drugstore chain will invest $5.2 billion in VillageMD. That will increase Walgreens’ ownership stake from 30% to 63%. VillageMD will remain an independent company with its own management and board.

    Walgreens said it expects the deal to close by the end of this year, pending regulatory approval.
    The investment is part of Walgreens’ broader effort to turn its stores into health-care destinations that not only fill prescriptions, but also have doctors who can write them and provide other types of care, such as annual checkups. The company is speeding along its plans to open Village Medical clinics at existing Walgreens drugstores. The goal is to have at least 600 primary-care clinics in more than 30 U.S. markets by 2025 and 1,000 by 2027.
    Walgreens CEO Roz Brewer said in an interview with CNBC’s Bertha Coombs that the clinics will simplify care for patients. She said Walgreens and VillageMD will have pharmacists and physicians who work together. They will have access to the same tech platform that pulls together medical records. And they’ll be at a convenient location, a short walk or ride away.
    “Your physician recommendations are being shared directly with the pharmacist,” Brewer said. “I think that’s a game changer when you think about what we’re able to do.”
    Most of the clinics will be about 3,300 square feet — nearly a quarter of the drugstore’s average size of 13,500 square feet.

    Walgreens has about 9,000 stores in the U.S. and more than 75% of Americans live within five miles of one of them. Brewer said it plans to use that footprint to reach people who have few — if any — nearby doctors. It said it plans to open more than half of its VillageMD clinics in urban neighborhoods and rural communities that are medically underserved.
    Walgreens and VillageMD have said the doctor offices will accept different kinds of health insurance and offer an out-of-pocket option, along with a sliding scale for people who don’t have insurance.
    With the move, Walgreens is following in the footsteps of competitors, including CVS Health and Walmart. Many CVS stores already have a MinuteClinic, which administers vaccines and offers walk-in, urgent care appointments. CVS is also turning more stores into a HealthHub, which has a wider range of medical services like testing for sleep apnea and management of diabetes. Walmart is opening a growing number of primary clinics with a low-cost model, but so far, they are concentrated in Georgia, Florida and the Chicago area.
    Walgreens and VillageMD have already opened 52 primary-care clinic locations and have an additional 33 on track to start by the end of the calendar year. The company announced the partnership for the first time 2019 and decided to expand the effort after a pilot of five clinics in the Houston area.

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    More Americans are getting Covid vaccine boosters than first doses in rush for third shots

    The U.S. is reporting an average of about 362,000 boosters administered per day over the past week, 57% higher than the 231,000 average daily first doses.
    About 8.9 million boosters overall have been administered as of Wednesday, covering 4.7% of all fully vaccinated Americans and more than 12% of the immunized 65 and older population. 
    A key FDA advisory panel meets Thursday and Friday to discuss the efficacy and safety of extra doses of the Moderna and J&J vaccines.

    Germaine T. Leftwich, 67, receives a Pfizer covid-19 vaccine booster shot from Dr. Tiffany Taliaferro at the Safeway on Capitol Hill in Washington, D.C., on Monday, October 4, 2021.
    Tom Williams | CQ-Roll Call, Inc. | Getty Images

    More Americans are getting third Covid shots than first vaccine doses as people who completed their two-dose regimen of Pfizer or Moderna’s shots six or more months ago are now eligible and lining up for an extra jab. 
    An average of 362,000 people a day got boosters over the past week, about 57% more than the 231,000 people per day who started their first doses, according to data from the Centers for Disease Control and Prevention.

    “It’s kind of reminiscent of those early days when over-65 qualified in a priority group and we saw people flooding websites and pharmacies and clinics,” Dr. Kavita Patel, a primary care physician in Washington who worked on health-care initiatives in the Obama administration, said about the high demand for boosters on CNBC’s “Squawk Box” on Tuesday. 
    U.S. regulators authorized booster shots of Pfizer and BioNTech’s vaccine to a wide array of Americans in late September, including the elderly, adults with underlying medical conditions and those who work or live in high-risk settings like health and grocery workers. The move made roughly 60 million Americans eligible for a third shot, President Joe Biden said in an address following the CDC’s endorsement.
    About 8.9 million boosters overall have been administered as of Wednesday, CDC data shows, covering 4.7% of all fully vaccinated Americans and more than 12% of the immunized 65 and older population. 
    “Those that are coming in and getting the booster vaccine are very comfortable with the vaccine, understand the benefit and have seen the benefit,” said Dr. Annamaria Macaluso Davidson, who practices at Memorial Hermann Medical System, a group of 17 hospitals in Houston.
    A surge in cases this summer driven by the highly contagious delta variant is convincing some people to get the vaccine for the first time, she said. “Those that are just coming in and starting, they would have had hesitancies for different reasons, and maybe finally consulted with a physician to understand that getting the vaccine outweighs any risk, and far outweighs the risk of getting Covid,” she said.

    The rush for additional doses among fully vaccinated people highlights the divide between the vaccinated and unvaccinated, according to Rupali Limaye, a faculty member at the Johns Hopkins Bloomberg School of Public Health. Limaye studies vaccine decision making and has been working with state health departments during the vaccine rollout. 
    Because many of those getting third doses are the same people who were most eager to get shots earlier this year, boosters will give those people even stronger protection while the unvaccinated remain largely unprotected and at a substantially higher risk of hospitalization or death if they get Covid.
    “We want to spread protection throughout a community,” Limaye said. “We will have a portion of the population that will be well protected, and a proportion of the population that has had zero shots.”
    A Kaiser Family Foundation survey released last month showed that the emergency approval of Pfizer’s booster shots for some people has done little to improve the split in attitudes on Covid-19 vaccines.
    Among those surveyed, nearly 80% of the people who were vaccinated said news of the third doses shows that scientists are trying to make the shots more effective, but 71% of the unvaccinated said boosters are proof that the vaccines don’t work.
    Limaye said this misunderstanding about third doses echoes conversations happening at town halls and community groups across the country. Because U.S. health officials weren’t clear enough up front that boosters are an expected part of an immunization process, it has raised questions about why another shot is needed.
    “We need to do a better job, in my opinion, saying that this is just how it is like any other virus,” Limaye said, “and that we have to get boosters because immunity wanes over time.”

    Dr. Rochelle Walensky, director of the Centers for Disease Control and Prevention (CDC), and top infectious disease expert Dr. Anthony Fauci, testify before the Senate Health, Education, Labor, and Pensions Committee on Capitol hill in Washington, D.C., July 20, 2021.
    J. Scott Applewhite | Pool | Reuters

    Dr. Aaron Clark, a family medicine physician at The Ohio State University’s Wexner Medical Center in Columbus, Ohio, said the interest he sees in boosters “far outweighs the demand for first shots.”
    Average daily Covid cases in the U.S. fell below 100,000 last week as the pandemic shows signs of easing, according to data compiled by Johns Hopkins University, with more than 56% of the U.S. population fully vaccinated. Still, while down from recent peaks, the country is reporting an average of more than 1,600 daily Covid deaths.
    U.S. officials have repeatedly said that the vast majority of those currently hospitalized and dying because of Covid are unvaccinated.
    A key Food and Drug Administration advisory panel will meet on Thursday and Friday to discuss the efficacy and safety of extra doses of the Moderna and Johnson & Johnson vaccines. Of the 188 million fully vaccinated Americans, 55% have received the Pfizer shots, 37% received Moderna, and 8% received a Johnson & Johnson shot, according to the CDC.

    CNBC Health & Science

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    Morgan Stanley beats estimates on record investment banking and asset management results

    Here are the numbers: Earnings of $1.98 a share vs the $1.68 a share estimate of analysts surveyed Refinitiv.
    Revenue: $14.75 billion vs. the $14 billion estimate.
    Shares of the bank climbed 2.2% in premarket trading.

    Morgan Stanley on Thursday topped expectations for third-quarter profit and revenue as the firm posted record results in investment banking and asset management.
    Here are the numbers:

    Earnings: $1.98 a share vs the $1.68 a share estimate of analysts surveyed Refinitiv
    Revenue: $14.75 billion vs. the $14 billion estimate

    Revenue and net income jumped more than 25% from a year ago, aided by CEO James Gorman’s acquisitions of E-Trade and Eaton Vance, which bulked up the firms’ wealth and asset management divisions. Shares of the bank climbed 2.2% in premarket trading.
    “The Firm delivered another very strong quarter, with robust revenues and improved efficiency,” Gorman said in the release. “We had standout performance of our integrated investment bank and record net new assets of $135 billion in wealth management.”
    While rival banks have reported a slowdown in third-quarter fixed income trading revenue, Morgan Stanley’s strength has traditionally been in its equities franchise, the biggest in the world.
    Equities trading revenue jumped 24% from a year earlier to $2.88 billion, exceeding the estimate by more than $500 million. Fixed income revenue dropped 16% to $1.64 billion, edging out the $1.53 billion estimate.
    Another area that has flourished is investment banking, propelled by robust mergers and IPO activity, and Morgan Stanley is a top player there as well. Rival advisor JPMorgan Chase posted record investment banking fees in the third quarter.

    Morgan Stanley’s investment banking franchise delivered in the quarter, posting a 67% increase in revenue to a record $2.85 billion, exceeding the StreetAccount estimate by more than $600 million, helped by strong mergers advisory fees.
    Shares of the bank have climbed 44% this year before Thursday, exceeding the 36% rise of the KBW Bank Index.
    JPMorgan topped expectations Wednesday, helped by a $1.5 billion boost from better-than-expected loan losses. Bank of America posted results Thursday that exceeded analysts’ expectations as it benefited from better-than-expected loan losses and record advisory and asset management fees.
    This story is developing. Please check back for updates.

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    Walgreens earnings top estimates, as drugstore gives twice as many Covid vaccines as expected

    Walgreens Boots Alliance beat expectations on fiscal fourth-quarter earnings and revenue, as it got a lift from Covid-19 shots and tests and saw rebounding demand for over-the-counter medications.
    The drugstore chain administered nearly double the number of Covid-19 vaccines that it expected during the three-month period.
    The company will hold an investor day on Thursday, where it will lay out plans for the year ahead.

    Walgreens Boots Alliance on Thursday exceeded Wall Street’s expectations for fiscal fourth-quarter earnings, as the company saw a surge in demand for Covid-19 vaccines amid a growing number of employer mandates.
    Shares were up less than 1% early Thursday in premarket trading.

    The drugstore chain administered 13.5 million vaccines during the three-month period — nearly double the approximately 7 million it had expected in the quarter. It is poised for another wave of vaccinations as people get booster doses and younger children are expected to soon qualify for the shots.
    “Mandates are playing a role,” CEO Roz Brewer said in an interview with CNBC’s Bertha Coombs. “There are many companies and organizations, cities and municipalities that are mandating and I think it’s forcing people to say ‘I need to go to work. So I have to get this vaccine.’ So it is creating an increase. And we’re seeing that in our stores.”
    Plus, she said, people are concerned about getting Covid — especially with the delta variant.
    Along with the lift from vaccinations, Walgreens said it got a sales bump from at-home Covid tests and a rebound in demand for over-the-counter medications for colds, coughs and flu.
    It also said it reached its goal of shaving $2 billion in annual costs from its business a year ahead of schedule.

    The drugstore chain will hold a virtual investor day later Thursday morning. Brewer, Walgreens’ new CEO, is expected to lay out her strategy for refreshing the company’s brand and driving growth. It is also expected to share its outlook for the upcoming fiscal year.
    Here’s what Walgreens reported compared with what analysts were expecting for the fourth quarter ended Aug. 31, based on Refinitiv data:

    Earnings per share: $1.17 adjusted vs. $1.02 expected
    Revenue: $34.26 billion vs. $33.30 billion expected

    In the quarter, net income rose to $627 million, or 72 cents per share, from $373 million, or 43 cents per share, a year earlier. Walgreens earned $358 million, or 41 cents a shares, from its continuing operations during the latest quarter.
    However, excluding items, the company earned $1.17 per share, exceeding the $1.02 expected by analysts surveyed by Refinitiv.
    Sales rose to $34.26 billion from $30.37 billion a year earlier, higher than the $33.30 billion that analysts expected.
    Sales online and at Walgreens stores in the U.S. open at least a year rose 8.1% from the year-ago quarter, as consumers got Covid-19 vaccinations and filled more prescriptions. Sales of health and wellness products jumped 14% year over year, as consumers bought more at-home Covid tests, vitamins and over-the-counter medications for coughs, colds and flu.
    Brewer said Covid vaccines have had a “halo effect” with front-of-store sales. As people walked to the pharmacy for a jab or waited for 15 minutes after the shot, she said some bought other kinds of merchandise, from beauty items to allergy medication. She said Walgreens wants to increase the number of other types of vaccines that it administers, for Hepatis B and more.
    Its international segment — which includes United Kingdom-based chain Boots — is rebounding after Covid-19 restrictions were lifted in July. Sales online and at Boots U.K. stores open at least a year increased 11.4% in pharmacy services and 15% in retail compared with the year-ago quarter.
    Foot traffic at Boots stores on main streets, such as near offices and commuter hubs, is recovering but is still below pre-pandemic levels, the company said.
    The drugstore chain said it has administered more than 40 million Covid vaccines to date. Its vaccinations peaked in the third quarter, when it administered 17 million shots.
    As of Wednesday’s close, Walgreens Boots Alliance shares are up about 19% this year. The company’s market valuation is $40.88 billion. The shares closed Wednesday down less than 1% to $47.26.
    Read the company’s press release here.

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    A new study finds that dirty money remains easy to hide

    A BOOK PUBLISHED in 2014 shook the world of offshore finance. “Global Shell Games” exposed the ease with which ne’er-do-wells could launder money or dodge tax using bank accounts held by anonymous shell companies. The book, NGO activism and numerous leaks—the latest, earlier this month, being the Pandora Papers—have since pushed governments to increase corporate transparency. Britain and other countries introduced public registers of company owners. America passed a law ending shell-company anonymity.But to what end? The book’s authors are putting the finishing touches on a study that suggests little has changed. The banks and corporate-service providers (CSPs)—firms that set up companies for others—meant to be in the front line of the fight against financial crime do a terrible job of differentiating between legitimate would-be clients and those waving red flags.The three academics behind the study—Jason Sharman of Cambridge University and Daniel Nielson and Michael Findley of the University of Texas at Austin—undertook what they call a “mystery shopping expedition”. They registered shell companies with varying risk profiles and then sent more than 30,000 emails to banks and CSPs in every country of the world to set up bank accounts. The riskiest-looking of these brass-plate firms were domiciled in places with a high corruption risk, such as Papua New Guinea or Pakistan. The safest-looking were from Australia or New Zealand. In between were shells from havens of offshore secrecy like the British Virgin Islands. In some missives the authors and their team posed as legitimate businessmen; in others as dodgier-sounding supplicants or actual miscreants, such as people on sanctions lists.The global anti-money-laundering (AML) system that has evolved since the 1980s under the Financial Action Task Force (FATF), a multilateral agency, relies heavily on the private sector to weed out dirty money. Banks must follow “know your customer” rules and identify a would-be client’s real, or “beneficial”, owner.This “risk-based” regime is broken, suggests the study. The authors found that the varying risk profiles made “almost no difference” to banks’ willingness to open an account; CSPs were even less sensitive to risk. (One Singaporean bank, however, deserves credit for smelling a rat, replying “Hey, you’re the Global Shell Games guys!”)The study shows that the grunt-work of AML is being “pushed onto a private sector which can’t or won’t do it,” says Mr Sharman. “Banks are unable or unwilling to make the fine-grained risk judgments the system demands, because they use standardised, generic procedures.”Although the conclusion fits broadly with previous research by the authors, Mr Sharman says he was surprised by the level of risk-insensitivity, because “some of our approaches were ridiculously dodgy”. Other experts will also be taken aback: scholars surveyed by the authors before they went shell-shopping predicted that the study would show the system to be working much better than it was before the transparency reforms of the past five years.The FATF knows the system is far from perfect. Last year its chief, David Lewis (who has since resigned), admitted that national AML laws were rarely being used effectively. He also implored bankers to “stop just ticking the boxes”. Even before this study the agency was reviewing its approach. More than tinkering is in order. ■For more expert analysis of the biggest stories in economics, business and markets, sign up to Money Talks, our weekly newsletter.This article appeared in the Finance & economics section of the print edition under the headline “The shell games go on” More