United Airlines plans to break ground Wednesday on an expansion of its training center in Denver, an initiative aimed at getting thousands of pilots ready to fly passengers as the carrier goes on a hiring spree.
The project will cost about $100 million. The new four-story building at its training campus will allow United to add six new flight simulators. The airline plans to add an additional six simulators later on, although the location is yet to be determined. It currently has space for 40 simulators.
The new simulators will be to train pilots on the Boeing 737 Max and Airbus jetliners, after a massive order last year, as well as the Boeing 787 Dreamliner, Marc Champion, managing director of the flight training center, told CNBC.
The carrier expects the project to be completed before the end of next year. Champion said the training center expansion project has been in the works for about a year.
Like other carriers, United is facing intense competition for pilots as the industry recovers from the Covid pandemic. The airline is planning to hire about 10,000 pilots between now and the end of the decade, Champion said. The Chicago-based carrier expects to add about 2,000 pilots this year.
Last year, United started teaching the first students at its new flight school, the United Aviate Academy, in Goodyear, Arizona. It aims to train 5,000 pilots there by 2030.
Fleet changes and idled pilots during the pandemic created massive training backlogs across airlines as many aviators switched to new aircraft or waited for slots to complete federally mandated recurrent training.
American Airlines, for example, last year decided to keep a pilot training center in Charlotte, North Carolina, open to handle the volume. United, however, maintained much of its fleet and reached an agreement with its pilots’ union early in the pandemic that helped it keep many of its pilots trained.
U.S. job openings remained close to record levels in April, and workers continued to quit at an elevated rate, signs of an exceptionally tight labor market that has contributed to historically high inflation.
The Labor Department on Wednesday said there were a seasonally adjusted 11.4 million job openings in April, a decrease from an upwardly revised record high of 11.9 million openings reached the prior month. The number of times workers quit their jobs fell slightly to 4.4 million.
Demand for workers has exceeded the number of unemployed people looking for work for the past year. During the same stretch, employers have added more than 400,000 jobs a month to U.S. payrolls and the unemployment rate has dropped 3.6%, slightly above its pre pandemic level of 3.5% and close to a 50-year low. The hot jobs market is driving up wages at a historically high rate and contributing to the highest inflation in four decades.
Meanwhile, consumer demand has remained strong despite inflation, and manufacturing output has increased amid supply-chain and pricing challenges.
The Federal Reserve is in the process of raising interest rates at the most aggressive pace since the 1980s to cool the economy and bring down inflation. It took a key step in tightening monetary policy on Wednesday by launching a plan to begin shrinking its $9 trillion asset portfolio by allowing securities to mature without reinvesting their proceeds into new ones. The move could put upward pressure on interest rates, adding muscle to its inflation-fighting effort.
High inflation has become a political headache for the Biden administration, prompting a push to get ahead on economic messaging ahead of midterm elections this fall. President Biden earlier this week said he supports the Fed’s efforts to tame inflation and he also met with Fed Chairman Jerome Powell at the White House. Treasury Secretary Treasury Secretary Janet Yellen on Tuesday said her inflation projections were wrong in statements she made last year as prices started to surge.
Private-sector estimates suggest that demand for workers remained elevated in May. Employers had 11.4 million job openings through late May, according to jobs site Indeed. The Labor Department is set to release its May employment report Friday.
Economists expect job openings to level off in the coming months but remain elevated because of strong consumer demand for goods and services. There were about two job openings for every unemployed person looking for work in March, according to the Labor Department.
“Workers still have a considerable amount of leverage in the U.S. labor market,” said Nick Bunker, an economist at Indeed. “The outlook for hiring remains strong as job openings remain elevated, even if their growth has slowed in recent months.”
Mr. Bunker said job openings might remain robust in the summer for sectors such as leisure and hospitality because of pent-up demand for activities like summer travel, despite rising consumer prices and the possibility of an economic downturn.
The decline in job openings last month was largely driven by the healthcare industry, which “doesn’t look like a response to tighter Fed policy,” according to Jefferies economists Aneta Markowska and Thomas Simons.
The rates of both job openings and quits in the leisure and hospitality sector declined in April from the prior month. The quits rate in the real-estate industry increased the most any, from 1.9% in March to 3.5% in April—the highest rate since July 2004.
Overall hiring held steady, slightly decreasing to 6.6 million hires. Separations overall, which include quits and layoffs, also fell to 6 million in April, the Labor Department said.
The high level of openings comes as fewer Americans are seeking employment compared with before the pandemic. The labor-force participation rate, which is the share of those employed or seeking work, has steadily recovered throughout the past two years, but it declined in April to 62.2%, remaining below the 63.4% reached in February 2020, before the pandemic, the Labor Department said in May.
With the labor market likely to remain tight in the coming months, Mr. Bunker said departures would also continue to be elevated but will probably edge down from record highs. Workers leaving their jobs is seen as a sign of confidence that they can easily find another one.
Katrina Buban quit her job as a finance director after more than 30 years of working in the accounting industry to take a job as a recruiter for staffing agency Robert Half early this year.
Ms. Buban, 57 years old, said she got burned out from working in finance, on top of dealing with pandemic-related challenges, so she decided to make a change. She made the switch after seeing that compensation would be competitive, the workload would be more manageable, she would have the ability to work remotely and her new employer offered training.
“Covid had me sit back and think, ‘Can I continue to do this every day for the next 10 years of my life?’ ” Ms. Buban said. “But I love what I’m doing now, it’s unbelievable.”
Jamie Dimon warned investors to prepare for an economic “hurricane” as the economy struggles against an unprecedented combination of challenges, including tightening monetary policy and Russia’s invasion of Ukraine.
“That hurricane is right out there down the road coming our way,” the JPMorgan Chase & Co. chief executive officer said at a conference sponsored by AllianceBernstein Holdings Wednesday. “We don’t know if it’s a minor one or Superstorm Sandy. You better brace yourself.”
Dimon said at JPMorgan’s investor day in May that there were “storm clouds” looming over the US economy, but he said he’s since updated that forecast given the challenges faced by the Federal Reserve as it attempts to rein in inflation. “Right now it’s kind of sunny, things are doing fine, everyone thinks the Fed can handle it,” Dimon said.
Shares of the company dropped 1.8% to $129.81 at 11:21 a.m. in New York after Dimon’s remarks on the economy, extending this year’s decline to 18%.
JPMorgan economists last month lowered their growth outlook for the second half of 2022 to a 2.4% rate from 3%, for the first half of 2023 to 1.5% from 2.1%, and for the second half of 2023 to 1% from 1.4%. They cited falling stock prices, higher mortgage rates, and a stronger dollar relative to trading partners.
Dimon said Wednesday that JPMorgan is preparing for that turbulence by being conservative with its balance sheet.
“I kind of want to shed non-operating deposits again, which we can do in size, to protect ourselves so we can serve clients in bad times,” he said. “That’s the environment we’re dealing with.”
Still, he cited the strength of the consumer, rising wages, and plentiful jobs as the “bright clouds” in the economy.
Earlier Wednesday, Wells Fargo & Co. Chief Executive Officer Charlie Scharf said he expects the pace of loan growth at the company to moderate after rising in the first quarter.
Tesla Inc (TSLA.O) Chief Executive Elon Musk has asked employees to return to the office or leave the company, according to an email sent to employees on Tuesday night and seen by Reuters.
"Everyone at Tesla is required to spend a minimum of 40 hours in the office per week," Musk said in the email.
"If you don't show up, we will assume you have resigned."
Two sources confirmed the authenticity of the email reviewed by Reuters. Tesla did not respond to a request for comment.
Major tech firms in Silicon Valley do not require workers to return to the office full-time, in the face of resistance from some workers and a resurgence of coronavirus cases.
Tesla has moved its headquarters to Austin, Texas, but has one of its factories and its engineering base in the San Francisco Bay area.
"There are of course companies that don't require this, but when was the last time they shipped a great new product? It's been a while," Musk said in the email.
"Tesla has and will create and actually manufacture the most exciting and meaningful products of any company on Earth. This will not happen by phoning it in."
One of Musk's Twitter followers posted another email that Musk apparently sent to executives asking them to work in the office for at least 40 hours per week or "depart Tesla."
In response to this tweet, the billionaire, who has agreed to take Twitter Inc (TWTR.N) private in a $44 billion deal, said, "They should pretend to work somewhere else."
In May 2020, Musk reopened a Tesla factory in Fremont, California, defying Alameda County's lockdown measures to curb the spread of the coronavirus. Tesla reported 440 cases at the factory from May to December 2020, according to county data obtained by the legal information site Plainsite.
Last year, Musk's rocket company SpaceX reported 132 COVID-19 cases at its headquarters in the Los Angeles-area city of Hawthorne, according to county data.
While some big employers have embraced voluntary work-from-home policies permanently, others, including Alphabet Inc's (GOOGL.O) Google, are betting that it is best to push in-person interactions among colleagues.
Twitter CEO Parag Agrawal tweeted in March that Twitter offices would be reopening but employees could still work from home if they preferred.
Treasury Secretary Janet Yellen told CNN on Tuesday that she was wrong when she said last year that inflation only posed a small risk and wasn't likely to be a problem.
Yellen made the comments to Wolf Blitzer after the host replayed clips of Yellen calling the risk of inflation "small" and "manageable," and said she didn't "anticipate that inflation is going to be a problem." Federal officials called inflation transitory in the past, but since then, inflation has reached levels not seen in 40 years, with the Federal Reserve and policymakers struggling to bring it down.
"Well, look, I think I was wrong then about the path that inflation would take," Yellen said Tuesday. "As I mentioned, there have been unanticipated and large shocks to the economy that have boosted energy and food prices, and supply bottlenecks that have affected our economy badly that I didn't at the time didn't fully understand. But we recognize that now."
"The Federal Reserve is taking the steps that it needs to take," she added. "It's up to them to decide what to do. And for our part, President Biden is focused on supplementing what the Fed does with actions we can take to lower the costs that Americans face for important expenditures they have in their budgets. Prescription drugs are one example. Health care costs, are another example. Utility bills," she added.
Yellen said that inflation appears to be stabilizing, but warned that Russia's war on Ukraine could still have some volatile effects on the U.S. and global economy.
"Core inflation has come down," she said. "It's still too high, but in recent reports, we have seen it move down, and that's an encouraging sign. But oil prices are high. Russia continues to wage war against Ukraine. We're trying and the Europeans are trying to address that and limit [Putin's] ability to wage this war. There can be impacts on energy and food prices that we can do everything we can domestically to control. The president has authorized historic releases of oil from the Strategic Petroleum Reserve. but we can't rule out further shocks," Yellen said.
Inflation continues to be one of the most pressing concerns for voters heading into November's midterm elections. And consumers expect costs to climb more than 7% in 2023, according to a recent report from the Conference Board, a business group. What remains to be seen is whether the Federal Reserve, as it raises interest rates, can navigate a soft landing and avoid a recession.