Here is what is weighing on Wall Street:

In just 12 weeks more than 44 million claims have been made for benefits as people lost their jobs. Rehiring appears to have started.

Last week the labor department said the unemployment rate had dipped in May to 13.3% from 14.7% in April – although officials said difficulty collecting data meant the figure was probably 3% higher.

You can read the full report here:

Investors are wary about signs of a potential second wave of Covid-19 cases, even as the world’s largest economy opens up.

Texas in particular showed a record number of hospitalisations for Covid-19 this week.

Ronald Temple, head of US equity at Lazard Asset Management, said:

The US labor market churn continues. Job losses in excess of 1.5m remain extremely high considering the pre-Covid record was 695,000 claims. Fortunately, continuing claims declined by 339,000 implying more people gained employment than lost it.

While the worst of the job losses might be behind us, the recent surges in new Covid-19 cases in states such as Texas and Arizona could stall the nascent recovery if not brought under control.

The 10th straight drop in initial claims is welcome, but they remain hugely elevate, said Ian Shepherdson, chief economist at Pantheon Macroeconomics. He said:

Our preliminary forecast for next week is for flat or slightly higher claims, based on Google search data and partial hard numbers from Pennsylvania and Wisconsin.

This doesn’t necessarily mean that May’s payroll increase was a one-time fluke, because claims only measure the pace of gross layoffs, and tell us nothing about the pace of re-hiring of people laid off earlier in the crisis. But markets will not like to see any increase in the claims numbers, which will magnify the uneasiness now being triggered by the second wave of Covid cases, mostly in the South.

Over the course of the crisis there have been more than 43m jobless claims.

Allianz chief economic adviser Mohamed El-Erian, who warned earlier today that stock markets are getting ahead of the terrible economic data, welcomed the fall in intial and continuing claims.

Minneapolis Federal Reserve president Neel Kashkari had a somewhat different reaction:

An important factor in looking at the latest jobless claims report is how it squares with the non-farm payrolls data which last week showed the US economy added jobs - suggesting a quicker recovery was in the offing and taking pretty much everyone completely off guard.

One key thing to keep in mind is that - although a significant improvement, the data on their own are unprecedented before the crisis.

More than 1m jobless claims in a week was unheard of since comparable data were first collected in the 1960s. The coronavirus crisis broke the scale.

But then again, a recovery is a recovery, and today’s data do appear to show that the economic crisis has peaked (or at least its first wave).

Richard Flynn, UK managing director at Charles Schwab, a US broker, said:

The slight decline in initial jobless claims, following last week’s surprisingly upbeat nonfarm payroll numbers, suggests that the US recovery is slowly getting underway and the underlying economic fundamentals may be more robust than anticipated.

If this downward trend continues, it could help support the current market rally, but there are still potential risks to the recovery. The possibility of a second virus wave and ongoing civil unrest, alongside heightened rhetoric around US-China trade relations, may weigh on the confidence of consumers and businesses.

The weak data, which suggests the global economy might be in for a long, drawn-out recovery, has also added to the weight on the FTSE 100.

It has now lost 3% for the day, or 188 points. The mid-cap FTSE 250 is also down by 3%.

Germany’s Dax has lost 3.1% and France’s Cac 40 is down by 3.3%.

US stock market futures have extended their losses after the jobless reading.

Futures for the S&P 500, the US benchmark, are down by 2.6%. Dow Jones and Nasdaq futures point to 3.2% and 1.7% losses respectively when trading opens in about 40 minutes.

The number of Americans making continued claims for unemployment fell to 20.9m in the week ending 30 May, down from 21.3m in the prior week, the data showed.

The speed of the crisis has been unprecedented in recent history, with initial jobless claims hitting a record 6m in a week at the height of the crisis.

The publisher of the Sun and the Times has warned of impending job losses as part of a major cost-cutting programme as the coronavirus pandemic hammers newspaper sales and advertising revenue.

Rebekah Brooks, the chief executive of News UK, has sent an email to staff announcing that the business needed to “reset” with the coronavirus hastening the shift towards digital publishing.

Newspaper publishers have benefitted from record digital audiences as readers crave news on the coronavirus. However, with businesses shut down and many advertisers keen to steer clear of running promotions around content relating to the pandemic, publishers have seen a significant decline in print sales and advertising revenue.

You can read the full report here:

The toll of job losses from the pandemic may have only just started, as the pandemic destroys demand in many industries. Almost one in 10 architecture practices fear they will go under in the aftermath of the Covid-19 pandemic.

Nearly three-quarters of firms expect profits to fall over the next 12 months, and of those, 8% say that their practice is unlikely to remain viable, according to the latest RIBA Future Trends survey. Current workloads were down 33% in May compared with a year earlier.

For the second month in a row, all regions expected workloads to fall in the next three months. But regions were less pessimistic than they were in April, at the height of the pandemic (London, the Midlands & East Anglia recorded the biggest levels of pessimism).

Overall, the future workload index rose to -49 after dropping to -82 in April, a record low. The staffing index also improved, by seven points to -30, although it remained in negative territory, indicating further job losses.

Adrian Dobson, RIBA’s executive director of professional services, said:

The current pandemic and economic uncertainty are clearly continuing to impact both architects’ current workloads and their confidence about the future, with the majority expecting their workloads to decrease in coming months.

But while many participants continued to point to the serious recession ahead, some also began to reference glimmers of hope in the form of new enquiries and new commissions.

The Fed has also contributed to movements on oil markets. Futures prices for both Brent crude, the North Sea benchmark, and West Texas Intermediate, the North American benchmark, are down by more than 3% today.

One barrel of Brent crude for August delivery will set you back $40.34. The price for WTI was $38.11 just after midday.

Prices are well above the lows of April (when US oil futures went negative) but far below the start of the year.

The retreat on Thursday came as demand fears came to the fore. US inventories data suggested that there is more oil in storage, while the Federal Reserve’s forecasts showed that the central bank expects anything but a V-shaped economic recovery.

Pablo Shah, senior economist at the Centre for Economics and Business Research, said:

While last Friday’s labour market figures signalled that the nadir of the current crisis has been passed, the Fed’s latest comments reiterate the longstanding economic consequences of the coronavirus pandemic, pouring cold water on the notion of a V-shaped recovery. CEBR forecasts that the US economy will contract by 6.0% in 2020, with GDP not expected to reach 2019 levels until 2023.

Sterling is down by 0.45% against the US dollar at $1.2689 this morning - a move that would end a 10-day winning streak for the pound.

The pound briefly broke above $1.28 on Wednesday for the first time since 12 March, after the dovish Fed scotched any hopes of interest rates rising any time soon. (Interest rate increases generally make a currency more attractive relative to others.). However, the pound dropped back on Thursday.

The dollar basket, which measures its performance against a broad basket of currencies, is up today, but only after hitting a three-month low. The rush for dollars that characterised the early crisis (and nearly caused a financial crisis to go with the health and economic crises) has now well and truly eased.

Advisors for Intu have reportedly asked the company’s bondholders for £12m to keep the shopping centres it owns running through an administration process, according to Sky News.

Intu, which owns Manchester’s Trafford Centre and the Metrocentre in Gateshead among 17 UK malls, might not be able to keep running during administration without the injection, Sky News said.

KPMG has been lined up to carry out an administration if Intu fails to agree a deal with investors over its debt repayments.

More than 1m British businesses have furloughed at least one employee, according to data from HM Revenue and Customs that covers up to 31 May.

Claims up to that point totalled £17.4bn, HMRC said. The government pays 80% of wages up to £2,500 a month under the scheme.

You can see from the below table which sectors were the biggest claimants, with retail leading the way followed by accommodation and food services. There was also a very large number of manufacturing claims, given its relatively small share of the total economy.

More than a fifth of normal household spending has been prevented by the lockdown, according to interesting new data from the Office for National Statistics (ONS).

In the financial year ending March 2019, UK households spent an average of £182 per week on activities that have since been largely prevented by government guidelines (such as travel, holidays and meals out).

This is equivalent to 22% of a usual weekly budget of £831, money that households could be saving, spending in other areas or using to cover any loss of income.

Britons have been paying back debt at rates unprecedented in recent times - although there is a stark divide between those whose income has not fallen and those who have been badly affected. Figures from the Bank of England show £7.4bn of consumer credit was repaid during the first full month of strict restrictions on business and social life, the largest net repayment since records began in 1993.

And the ONS said that younger households, renters and people living in London were the most vulnerable to a fall in income, because they spend the highest proportion on essentials: food and shelter.

The ONS has also made a handy interactive graphic showing where the average Briton spends her or his money.

(If the below graphic does not function you can try the original post on the ONS website.)

The government is clearly happy with the Unilever decision: business secretary Alok Sharma has said it represents a “vote of confidence” in the UK.

Although given the revolt by major shareholders when Unilever tried to do the reverse move to the Netherlands, it does not appear the company had much choice...

There’s a fair bit of Anglo-Dutch stock market action today. Just Eat Takeaway is headquartered in the Netherlands but its Just Eat arm was founded in the UK. Added to that recipe will be a dash of New York, as it acquires GrubHub for £5.8bn.

The tie-up will give the Netherlands-based Just Eat Takeaway access to the lucrative food delivery market in the US, writes the Guardian’s Joanna Partridge in her full report.

The combined business will be able to serve customers in 25 countries. Along with the US, these include some of the world’s most profitable food delivery markets – the UK, Netherlands and Belgium.

Under the terms of the deal, which will need approval from both sets of shareholders, Grubhub’s shareholders would own 30% of the combined group.

You can read the full report here:

Italian industrial output was not quite as bad as expected in April, according to data just published - but it still suffered an eye-watering monthly fall.

Production in April dropped 19.1% month-on-month, according to the National Institute of Statistics in Italy, better than economists’ expecations of a 24% drop.

However, it still points to a massive recession in the Italian economy, which was the first European country to enter a full lockdown.

Almost an hour into trading and the mood on European stock exchanges is, if anything, bleaker.

The FTSE 100 has lost 2.5% or 158 points to trade at around 6,169 points. There are falls of similar proportions across Europe’s main markets.

More UK job losses from this morning: Heathrow Airport has started a voluntary redundancy scheme as it tries to cut costs.

Heathrow said that passenger numbers in May were down 97% and it was preparing for further declines due to Britain’s quarantine rule, which means that arrivals in the UK must quarantine for two weeks. The move has triggered a big backlash against the government by the airline industry. Via Reuters:

The airport, which has about 7,000 staff, said on Thursday that its employment levels were no longer sustainable and that it had agreed to start voluntary redundancy with unions.

“While we cannot rule out further job reductions, we will continue to explore options to minimise the number of job losses,” Heathrow Chief Executive John Holland-Kaye said in a statement.

The majority of the Centrica job losses will come in the second half of 2020 - in another sign of the difficulties facing the economy as government withdraws its furlough scheme that is paying many workers’ wages.

That said, Centrica was struggling even before the coronavirus pandemic. The Guardian’s Nils Pratley in April wrote:

Everything is going wrong at once. Power usage in the UK has plunged as offices and factories have shut. Bad debts will inevitably rise among small businesses and British Gas consumers.

Ominously, Centrica also said it would seek to “simplify terms and conditions” for those UK employees who do not lose their jobs. The company said:

Centrica has over 80 different employee contracts, each with multiple variants, with many of the agreements dating back over 35 years. We need to modernise these to enable us to best serve the changing expectations of today’s customers while retaining the quality of our services.

Centrica chief executive Chris O’Shea is only three months into the job, having abruptly taken over from Iain Conn as the crisis hit. He said:

I believe that our complex business model hinders the delivery of our strategy and inhibits the relentless focus I want to give to our customers. We have great people, strong brands that are trusted by millions and leading market positions, but the harsh reality is that we have lost over half of our earnings in recent years. Now we must bring focus by modernising and simplifying the way we do business.

I truly regret that these difficult decisions will have to be made and understand the impact on the colleagues who will leave us. However, the changes we are proposing to make are designed to arrest our decline, allow us to focus on our customers and create a sustainable company.

The FTSE 100 selloff has been worse than feared in the opening minutes: London blue-chip stocks are down by 2.4%.

Germany’s Dax index is down by 2.5%, while France’s Cac 40 has lost 2.1%. There are losses of more than 2% in Italy and Spain as well.