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      Coronavirus update: Savings rate soars with no place to spend, Chicago delays reopening

      Stimulus payments look like junk mail

      Coronavirus (COVID-19) tally as compiled by Johns Hopkins University. (Previous numbers in parentheses.)

      Total U.S. confirmed cases: 1,725,656 (1,703,989)

      Total U.S. deaths: 101,706 (100,651)

      Total global cases: 5,851,494 (5,731,837)

      Total global deaths: 361,270 (356,606)

      Savings rate hits record during pandemic shutdown

      With U.S. households confined to their homes for the last two months, Americans have socked away a record amount of cash. The U.S. Bureau of Economic Analysis reports that personal income rose sharply in April as Americans began receiving government stimulus payments.

      At the same time, consumer spending dropped sharply, leading to a savings rate of 33 percent, the highest on record. 

      It’s always a good thing when households are able to save money, but some economists think too much saving won’t help the economy recover. They say the next few weeks may be critical as consumers have more chances to spend at stores and restaurants.

      Chicago’s reopening has been delayed until next week

      Illinois joined a number of states in reopening most businesses, including hair salons, restaurants, and retail stores. But Chicago will wait until next week to join the party.

      Chicago Mayor Lori Lightfoot has delayed the city’s limited reopening until Wednesday, June 3 after Dr. Deborah Birx, the coordinator of the White House coronavirus task force, expressed some concern about the city. She said the number of cases in Chicago appears to have leveled off but has not gone down as it has in some other parts of the country.

      In the rest of Illinois, restaurants can open outdoor dining areas with tables six feet apart. Retailers can reopen with no more than 50 percent of normal capacity.

      Some stimulus payments mistaken for junk mail

      Millions of Americans are still receiving their economic impact payments from the government, and some are mistaking them for junk mail. The Treasury Department has shifted from sending paper checks to sending prepaid debit cards that many recipients say look like credit card solicitations.

      Reports have begun to circulate on social media about recipients cutting up the cards or tossing them in the trash, unaware that the card contains their long-awaited payment.

      The latest round of payments come in plain white envelopes with the return address: Money Network Cardholder Services, PO Box 247022, Omaha, NE 68124-7022.

      Mixed data on housing

      The coronavirus has had a huge impact on the housing market, bringing sales and listings to a near standstill. Where the market goes from here isn’t exactly clear.

      In its monthly statement, the National Association of Realtors (NAR) reported that pending home sales plunged more than 21 percent in April. That category is a measure of contracts for home sales that were signed but not yet closed. NAR said that’s likely the low for the year.

      At the same time, Zillow reports there is evidence that both buyers and sellers are returning to the market. However, it notes that inventory levels are still extremely tight, leading to higher prices for the homes that are selling.

      Prescriptions for hydroxychloroquine surged in March

      After President Trump mentioned the 60-year-old antiviral drug hydroxychloroquine at a briefing in March, prescriptions for the drug surged by 2,000 percent

      Researchers at Brigham and Women’s Hospital and Harvard Medical School compared the number of prescriptions issued from March 15 to March 21 with the same period in 2019. This year there were 45,858 prescriptions written compared to 2,208 the year before.

      A number of health experts have been highly skeptical of the drug as a treatment for the coronavirus. However, some doctors who have prescribed it for their patients said it is very effective, but only when taken in conjunction with zinc.

      Around the nation

      • West Virginia: The state says it has now tested 91,000 people for the coronavirus. So far, only 1,935 have tested positive, which is a rate of around 2 percent.

      • Arkansas: After reopening most businesses, Arkansas has seen a spike in new cases of the coronavirus. The state recorded 261 new cases Thursday, the largest single-day total so far.

      • Michigan: Businesses closed during the coronavirus lockdown have begun to reopen after nearly three months of inactivity and no revenue. Shopping malls are being allowed to reopen, but customers must make appointments to shop and maintain social distancing.

      Coronavirus (COVID-19) tally as compiled by Johns Hopkins University. (Previous numbers in parentheses.)Total U.S. confirmed cases: 1,725,656 (1,703,98...
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      Tyson shuts down another slaughterhouse after employees test positive for COVID-19

      Meatpackers and ranchers both are concerned about the potential ripple effect

      Tyson Foods has temporarily shuttered its pork slaughterhouses in Storm Lake, Iowa, after 555 employees -- 22 percent of the plant’s workforce -- tested positive for the coronavirus.

      The closure comes only a month after President Trump ordered meat processing plants to keep their doors open in the face of depleted meat counters at grocery stores and to prevent supply chain risks. For Tyson, the closure comes only a week after 257 of the 1,282 team members -- 20 percent of the workforce -- at its Temperanceville, Virginia poultry facility tested positive.

      Tyson says it’s doing what’s required

      Tyson spun the Storm Lake closure in a more positive light, saying it was partly due to a delay in COVID-19 test results and employee absences. Despite the setback, Tyson says it will be back up and running in the near future. In a statement, the company insisted it will resume operations next week after it conducts "additional deep cleaning and sanitizing of the entire facility” and that it will conduct daily clinical symptom screenings.

      Tyson officials also assert that it’s doing everything that the Centers for Disease Control and Prevention (CDC) and Occupational Safety and Health Administration (OSHA) ask companies like theirs to do. In fact, the company says it “meet(s) or exceed(s) CDC and OSHA guidance for preventing COVID-19.”

      The company also noted that it’s doubling its “thank you” bonus for frontline workers to $120 million. The bonus plan supports members who cannot come to work because of illness or childcare issues related to COVID-19.

      Concern continues

      While Tyson might think it’s doing all that’s necessary, the United Food and Commercial Workers International Union (UFCW) thinks meat companies and federal officials need to do even more to protect workers. 

      It points to a statistic that shows more than 3,000 infections and 44 deaths have occurred among U.S. meatpacking workers, and those numbers keep rising. 

      “Too many workers are being sent back into meatpacking plants without adequate protections in place, reigniting more outbreaks in the plants and our communities,” Nick Nemec, a South Dakota farmer and cattle producer from Holabird, SD, said in a news release.

      The ripple effect

      Another UFCW member also raised the point of the ripple effect. 

      “Safe food starts with safe workers,” said UFCW Local 304A member John Massalley who works at Smithfield in Sioux Falls, SD. “When meatpacking plants struggle to contain this virus, it’s not just the workers inside like me who are at risk, family farmers and ranchers are too.”

      “If they don’t get protective equipment and safe working conditions, the food system will remain vulnerable and we all lose – producer, workers and consumers.Regular testing is critical to stopping future outbreaks, keeping workers safe and protecting our food supply,” added Colorado rancher Kathryn Bedell.

      Tyson Foods has temporarily shuttered its pork slaughterhouses in Storm Lake, Iowa, after 555 employees -- 22 percent of the plant’s workforce -- tested po...
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      House votes to loosen restrictions on coronavirus aid to small businesses

      Small businesses will have more spending flexibility

      On Thursday, the House of Representatives passed a bill that would ease restrictions on how small business owners can spend coronavirus aid money. 

      By an overwhelming 417-1 vote, the chamber approved a plan that would loosen restrictions on how money doled out under the $660 billion Paycheck Protection Program can be spent. The bill passed under the CARES Act in March provides businesses employing up to 500 workers forgivable loans worth as much as $10 million. 

      However, many businesses said the program wasn’t flexible enough to accommodate different types of small businesses. The changes would give small businesses the ability to use the extra money as needed rather than have to adhere to a program that prioritizes rehiring of employees. 

      Under the plan, the share of aid money small businesses are required to spend on payroll would be reduced to 60 percent from 75 percent. The rest must be spent on rent, utilities, and other business-related expenses.

      Additionally, businesses would have six months to use funds from the program instead of the previous two months. The previous worker rehiring deadline of June 30 would also be extended, and new PPP loans would have to be paid back in five years instead of two years. 

      "Small businesses continue to have a tough road ahead and they need flexibility in how they use this emergency capital," New York Democratic Rep. Nydia Velázquez, who chairs the House Small Business Committee, said on the House floor. 

      In many areas, stay-at-home restrictions have remained in place longer than anticipated, and small businesses have faced additional challenges as a result. Setting aside money to rehire employees has proved to be challenging in some cases, and the measure would grant needed flexibility to businesses struggling to stay afloat during the coronavirus pandemic.

      The Senate could take up the bill as early as next week. 

      On Thursday, the House of Representatives passed a bill that would ease restrictions on how small business owners can spend coronavirus aid money. By a...
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      Uber launches Hourly trip option in select cities

      Riders can book rides in hourly increments to make running errands easier

      Uber is giving riders in select cities the option of hiring a driver on an hourly basis. 

      In a press release, Uber described its new Hourly option as “a new way to ride without having to re-request a trip at each location you visit.” The new trip category will let riders make multiple stops over the course of a single ride.  

      While Uber is encouraging people to continue following local health guidelines and travel only as necessary, it said it launched the new feature as a “flexible option if and when you need a little extra time running errands, taking a loved one to and from a doctor’s appointment, or getting things done.” 

      Hourly trips will cost $50 per hour with mileage overage varying by city. Uber will match Hourly trip riders with a driver who has a newer and more spacious vehicle, such as those that are eligible for Uber Comfort.  

      Uber said it tested the Hourly option in cities across Africa, Australia, Europe, and the Middle East. Starting June 2, the new option will be extended to riders in Atlanta, Chicago, Dallas, DC, Houston, Miami, Orlando, Philadelphia, Phoenix, Seattle, Tacoma, and Tampa Bay. 

      Uber is giving riders in select cities the option of hiring a driver on an hourly basis. In a press release, Uber described its new Hourly option as “a...
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      Nissan says it will cut production capacity by 20 percent

      The automaker posted its first annual loss and promised to make changes to survive pandemic

      Nissan has announced that it will cut production capacity by 20 percent and close a factory in Spain in an effort to survive the coronavirus pandemic. 

      The company recently reported its first annual operating loss in more than a decade, and CEO Makoto Uchida said it’s “difficult to reasonably forecast an outlook for fiscal year 2020 at this time.”

      The Japanese automaker said Wednesday that it would be deepening its collaborative efforts with Renault and Mitsubishi. Going forward, the companies will make fewer models, share production facilities, and generally focus on their respective strengths as they endeavor to cut costs during the pandemic. 

      Nissan said the planned changes would allow it to slash costs by roughly $2.8 billion. 

      “As part of the four-year plan, Nissan will take decisive action to transform its business by streamlining unprofitable operations and surplus facilities, alongside structural reforms,” the company said in a statement. “Through disciplined management, the company will prioritize and invest in business areas expected to deliver a solid recovery and sustainable growth.”

      Ensuring steady growth 

      The automaker said its plan for the next few years would be to focus on ensuring “steady growth” rather than “excessive sales expansion.” 

      “We will now concentrate on our core competencies and enhancing the quality of our business, while maintaining financial discipline and focusing on net revenue per unit to achieve profitability,” Uchida said. “This coincides with the restoration of a culture defined by ‘Nissan-ness’ for a new era."

      Uchida said he will take a 50 percent pay cut for the first half of the year, and other executives will see a 30 percent pay cut in an effort to “share the pain” stemming from the overhaul. 

      In a press release, the Industry Ministry said the Spanish government “regrets” Nissan’s decision to close the plant in Spain and will try to persuade the company to keep it open. 

      Nissan has announced that it will cut production capacity by 20 percent and close a factory in Spain in an effort to survive the coronavirus pandemic....
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      The average price of gasoline is closing in on $2 a gallon

      Prices rose in just about every state in the last week

      The price of gasoline rose in just about every state in the last week as more consumers increased their driving and states began to lift coronavirus (COVID-19) restrictions.

      The AAA Fuel Gauge Survey shows the national average price of regular gas is closing in on $2 a gallon, rising three cents a gallon since last Friday to $1.97 a gallon. It’s 21 cents a gallon higher than a month ago. The average price of premium gas is $2.58 a gallon, four cents higher than last week. The average price of diesel fuel has remained stable over the last two weeks at $2.41 a gallon and is four cents a gallon cheaper than a month ago.

      Gas prices normally rise during the spring, but industry analysts point to two other factors contributing to higher prices at the pump. Oil prices have begun to recover from their record lows during the height of the lockdown but remain under $40 a barrel.

      Demand is also up when compared to April. However, it’s still well below demand recorded in May 2019. That’s one reason gas prices are about 90 cents a gallon less than they were last year.

      “Americans have seen significantly cheaper-than-normal gas prices the past two months,” said AAA spokesperson Jeanette Casselano. “While motorists will see pump prices continue to increase, AAA does not expect the summer average to be as expensive as last year’s season.”

      One wildcard that could send prices sharply higher is a couple of bad hurricanes. The 2020 hurricane season begins Monday, and storms that hit the Gulf Coast region particularly hard could interrupt supplies and send prices sharply higher, at least temporarily.

      The states with the most expensive gas

      These states currently have the highest prices for regular gas, according to the AAA Fuel Gauge Survey:

      • Hawaii ($3.17)

      • California ($2.88)

      • Washington ($2.52)

      • Oregon ($2.44) 

      • Nevada ($2.43)

      •  Pennsylvania ($2.23)

      • Illinois ($2.23)

      • Alaska ($2.22)

      • Utah ($2.21)

      • New York ($2.18)

      The states with the cheapest regular gas

      The survey found these states currently have the lowest prices for regular gas:

      • Mississippi ($1.58)

      • Arkansas ($1.63)

      • Alabama ($1.63)

      • Louisiana ($1.64)

      • Texas ($1.64)

      • Oklahoma ($1.65)

      • Missouri ($1.65)

      • South Carolina ($1.67)

      • Kansas ($1.68)

      • Tennessee ($1.70)

      The price of gasoline rose in just about every state in the last week as more consumers increased their driving and states began to lift coronavirus (COVID...
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      Ford recalls model year 2020 Mustangs

      A forward-looking camera is misaligned to the vehicle

      Ford Motor Company is recalling about 25 model year 2020 Mustangs sold in the U.S., and Canada.

      The vehicles are equipped with an image processing module A -- a forward-looking camera -- that is misaligned to the vehicle, and may not function as intended.

      An incorrect forward-looking camera alignment calibration may cause features to have degraded functionality during vehicle operation including Pre-Collision Assist, Adaptive Cruise Control, Lane-Keeping System, Driver Alert and Auto High-Beam Control.

      The Pre-Collision Assist system’s effectiveness in detecting a frontal collision may be compromised, increasing the risk of an accident.

      There are no reports of accident or injury.

      What to do

      Ford will notify owners, and dealers will reconfigure the forward-looking camera by aligning the Lane Departure Warning system camera.

      Owners may contact Ford customer service at (866) 436-7332. Ford's reference number for this recall is 20S26.

      Ford Motor Company is recalling about 25 model year 2020 Mustangs sold in the U.S., and Canada. The vehicles are equipped with an image processing modul...
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      Primark recalls Kitten Heel Court Shoes

      The leather insock in the shoes have elevated levels of Chromium VI

      Primark US of Boston, Mass., is recalling about 1,700 pair of Wide Fit Kitten Heel Court Pumps.

      The leather insock in the shoes has elevated levels of Chromium VI, posing a risk of skin irritation.

      No incidents or injuries are reported.

      This recall involves the Primark Wide Fit Kitten Heel Court Shoes. The pumps have an approximately 1.5 inch heel, and were sold in black and nude microfiber fabric.

      Product number 06689 and the RN code 145478 are printed on the inside of the shoe.

      The shoes, manufactured in China, were sold at Primark US stores nationwide from January 2019, through November 2019, for about $16.

      What to do

      Consumers should immediately stop using the recalled shoes and return the shoes to a Primark store for a full refund of the purchase price.

      Consumers may contact Primark US collect at (617) 946-3236 from 8 a.m. to 5 p.m. (ET )Monday through Friday, or online at www.primark.com and click on “Customer Service” at the bottom of the page for more information.

      Primark US of Boston, Mass., is recalling about 1,700 pair of Wide Fit Kitten Heel Court Pumps. The leather insock in the shoes has elevated levels of C...
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      5 do-it-yourself Father’s Day gift ideas

      Don’t have a big Father’s Day budget? Make these low-cost presents your dad will love

      Everyone loves presents, and Father's day is no exception. However, sometimes the gifts you make yourself may mean more than anything bought at a store. Each idea presented below is under $20, and some even cost you nothing if you have certain items just lying around the house. Make your dad feel special by utilizing any of our DIY Father's Day ideas below.

      Special picture for dad

      Everyone loves pictures of their families, especially their kids and grandkids, so why not create a special Father's Day pic for dad? All you need is a camera, some poster board and a photo frame. Get dressed in your best, make a sign with a caring message, print the pic on photo paper and order a cute frame online. The personalized message will make it even more special.

      • Attractive neutral frame
      • Fits 5” x 7” pictures

      Buy on Amazon

      • 60 count
      • 5” x 7”

      Buy on Amazon

      World’s Greatest Dad jar

      Dad will surely admire a jar with all of his favorite items. First, take some time a decorate the outside of the mason jar with Father's Day messages, then insert a ton of his number one go-to treats inside. Whether it's his preferred chocolate candies or colorful gumballs, a jar filled with all his favorite things lets dad know you care.

      • 1-pack or 4-pack
      • BPA-free

      Buy on Amazon

      Personalized BBQ flipper

      For the grilling dad, a personalized BBQ flipper is perfect for him. Grab one with a long handle online, then get creative and decorate! Color the handle with your dad's favorite team colors, paint your dad's name or even add drawings of his favorite things to it. No matter what you decide, dad will appreciate all the thought you put into his gift.

      • Good for charcoal or gas grills
      • Stay-cool handle

      Buy on Amazon

      Homemade card with coupons

      For Father's Day, a homemade card is always an easy go-to option. Have the kids go wild decorating a card for their dad, and insert cute handmade or store-bought coupons inside. These coupons will contain items like "help dad with the chores outside," "make dad breakfast" or "free sleep-in day for dad." Dad can cash in coupons at any time, and everyone must adhere to it. Remember to have fun with it!

      • 6 activities
      • Easy assembly

      Buy on Amazon

      Decorated handkerchief

      Your dad will feel dapper if you make a handkerchief just for him. All you need is a blank handkerchief, and you can paint it, stamp it or even just draw on it. Dad will treasure it as it was handmade with love.

      • 100% cotton
      • Blank canvas for creative minds

      Buy on Amazon

      Father's Day doesn't need to be extravagant to make Dad feel treasured! Make your dad a present this year, and he will love it because you took the time to make it just for him.

      Don’t have a big Father’s Day budget? Make these low-cost presents your dad will love...
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      Our 5 favorite DIY alcohol kits

      From gin to hard cider to craft beer, it’s never been easier to make drinks at home

      Picking up a new hobby is fun, and so, of course, is having a cocktail. A DIY alcohol kit lets you productively combine the two activities. We selected our five favorite DIY alcohol kits to make everything from craft beer to Pinot Grigio to honey scotch whiskey.

      Gin

      A gin martini is a classic drink. Make it even better with your own homemade gin. If you’re not a martini fan, try a gin and tonic or one of the dozens of other summery gin drinks.

      • 12 botanicals
      • Makes 2 small bottles

      Buy on Amazon

      Pinot grigio

      A glass of pinot grigio is an excellent way to unwind at the end of a long summer day. This pinot grigio kit includes everything except the wine bottles, so make sure you save a few bottles you buy from the store. This kit makes 5 good-sized bottles, and reviews rave about the taste.

      • Makes five 750mL bottles
      • 2-week fermentation

      Buy on Amazon

      Hard cider

      This kit doesn’t supply the fruit juice, but that allows you to customize the hard cider to your liking, whether you prefer cloudy apple cider or clear-as-day apple juice. Once you’ve mixed the ingredients, the cider only needs to sit for 10 days before it’s ready.

      • Makes 3 batches
      • Better than the bottled stuff

      Buy on Amazon

      Personalized whiskey making kit

      Have you ever wanted to pour a tumbler with your own, personal whiskey? Now you can! With this kit, all you need is the neutral spirit (like grain alcohol, moonshine or rail vodka), and you could have a personalized batch of aged whiskey to share with your friends!

      • Personalized barrel
      • 90-day oak barrel warranty

      Buy on Amazon

      Craft beer

      Minor things like having a large opening at the top to comfortably add the ingredients and clearly marked volumes on the side help make this craft beer kit to the next level. Simply sanitize the equipment, pour in the ingredients and add carbonation. Several reviews mention the high-quality taste and simple setup.

      • 2-gallon recipes
      • Brews in 14 days

      Buy on Amazon

      From gin to hard cider to craft beer, it’s never been easier to make drinks at home...
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      Coronavirus update: U.S. eclipses 100,000 deaths, crowds in casinos could be trouble

      Unemployment may be slowing down

      Coronavirus (COVID-19) tally as compiled by Johns Hopkins University. (Previous numbers in parentheses.)

      Total U.S. confirmed cases: 1,703,989 (1,684,173)

      Total U.S. deaths: 100,651 (99,123)

      Total global cases: 5,731,837 (5,626,047)

      Total global deaths: 356,606 (351,815)

      100,000 deaths and counting

      The official U.S. death toll from the coronavirus (COVID-19) has moved past the 100,000 mark and is still climbing. Nearly all the deaths have occurred in the last four months.

      No other country has close to the number of coronavirus cases or deaths that the U.S. has faced. The next closest country is the United Kingdom, with 37,542 deaths. India, which has a much larger population than the U.S., has only 4,500 confirmed deaths.

      Don’t bet on casinos’ safety

      Cell phone tracking has shown how the huge crowds on Atlantic beaches over the Memorial Day weekend have dispersed across the country, raising concerns among health officials any infected people could set off another COVID-19 outbreak.

      While former Food and Drug Administration (FDA) Commissioner Dr. Scott Gotliebb says that’s concerning, he said outdoor gatherings appear less likely to spread the virus than large groups in close quarters indoors. For that reason, he says he does have some concerns about Las Vegas casinos reopening.

      “Those are the kinds of settings where I think you have more risk, where you have a lot of people crowding together, coming and going in indoor settings for sustained periods of time,” Gottlieb said on CNBC this morning.

      Nevada casinos are scheduled to reopen next week. 

      The pace of unemployment is slowing

      There were 2.1 million new claims for unemployment benefits in the previous week as the pace of joblessness continues to slow. While that number is nearly 10 times higher than a typical week before the pandemic hit, it’s well below the 6.9 million recorded at the end of March.

      Lockdowns that closed businesses and forced many to quickly go under have been the major driver of unemployment. While some economists think we’re approaching a bottom, a lot of damage has already been done.

      In a separate report today, the Commerce Department said Gross Domestic Product (GDP), the measure of economic activity, shrank by 5 percent in the first quarter.

      Airlines face more turbulence

      The nation’s airlines see brighter skies ahead as travel restrictions begin to be lifted and bookings increase. At the same time, they face a decline in business and numerous restrictions that make profits out of the question.

      Delta Airlines has started offering employees buyouts as it seeks to trim its payroll. It, along with other carriers, has seen a huge drop in revenue. As passenger traffic picks up, it will not come close to the level of profitability the company enjoyed before the pandemic.

      On Wednesday, American Airlines announced that it is cutting 30 percent of its management and administrative jobs to deal with its mounting losses. “We must plan for operating a smaller airline for the foreseeable future,” Elise Eberwein, one of the airline’s executive vice presidents, wrote in a letter to employees. 

      No masks allowed

      As businesses begin to reopen, many are requiring customers to wear masks when inside their premises. In a sign of a growing culture war the pandemic and its shutdown orders have sparked, the Liberty Tree Tavern in Elgin, Texas is reopening with one simple rule -- no one wearing a mask will be allowed inside.

      "If we're only allowed to be at 25 percent capacity, I want them to be 25 percent of people that aren't p-----, that aren't sheep," owner Kevin Smith told The Washington Post. "Being scared all the time isn't good for your health. It suppresses your immune system."

      Smith’s position does not appear to be an isolated case. In Kentucky, where some residents this week hanged an effigy of the state’s Democratic governor, a gas station convenience store is also barring any customers wearing a face covering.

      Around the nation

      • Illinois: Illinois has become the first state to meet all of the White House’s recommendations for safely opening businesses. Starting tomorrow, the state will begin Phase 3 of its reopening after seeing a two-week decline in positive test results per 100,000 population.

      • Oregon: Two churches have filed lawsuits against the state, targeting an order that limits the size of congregations at church services. Gov. Kate Brown’s order limits the size of gatherings at church services to no more than 25 people. 

      • Rhode Island: State Senator Elaine Morgan has penned an open letter calling on state officials to immediately reopen Rhode Island with no restrictions. Morgan, a Republican, charged that Gov. Gina Raimondo’s plan to slowly reopen the state is a violation of citizens’ rights. 

      Coronavirus (COVID-19) tally as compiled by Johns Hopkins University. (Previous numbers in parentheses.)Total U.S. confirmed cases: 1,703,989 (1,684,17...
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      American Airlines to cut 30 percent of its management and administrative staff

      The airline industry faces the difficult task of downsizing in the COVID-19 era

      Airline stocks have rallied on Wall Street this week on growing optimism that the country is beginning to reopen and travel is about to resume. But the rising stock prices don’t reveal the economic damage to commercial air travel that’s already been done.

      American Airlines has announced it is cutting 30 percent of its management and administrative staff in an effort to stem the flow of red ink. A company memo obtained by CNBC said the airline will also begin offering buyouts to flight attendants and other frontline personnel in June.

      “We must plan for operating a smaller airline for the foreseeable future,” Elise Eberwein, one of the airline’s executive vice presidents, wrote in a letter to employees Wednesday.

      American has plenty of company in that situation because the entire industry has been turned upside down by the coronavirus (COVID-19). Consumers stopped flying well before the government issued travel restrictions. By late April, U.S. passenger traffic had fallen 90 percent.

      In the last decade, the airline industry has clawed its way back to profitability by maximizing routes -- flying planes in which every seat was sold -- and charging fees for things that were once included in the price of a ticket. Those days seem to be over.

      Half-empty planes

      In the era of social distancing -- which no one expects to end anytime soon -- American and its competitors will likely fly half-empty planes, even when consumers begin traveling again. In an announcement made Wednesday, American said it would continue to limit the number of customers on each aircraft. 

      “Additionally, American customer service agents also may reassign seats to create more space between customers or to accommodate families who need to be seated together,” the airline said in a release. “Once boarding is complete — taking into consideration any aircraft weight or balance restrictions — customers can move to another seat within their ticketed cabin subject to availability.”

      The airline said it is deploying new tools that will allow customers to more easily change their tickets to less-crowded flights, again giving up the fees that most airlines once charged for that service.

      Strings attached

      The problem for the industry -- and American in particular -- is that at the same time it is struggling against mounting financial losses, it has received financial aid from Congress that has several strings attached.

      A week ago, when Delta and JetBlue decided to reduce employee hours to cope with their loss of revenue, lawmakers were quick to say the action represented a violation of the goal of the Payroll Support Program established under the CARES Act. 

      Delta received more than $5 billion in federal support through the program, and JetBlue received $935 million. When they cut employee hours more than a dozen U.S. senators sent letters to the CEO of each airline pushing for an immediate end to the “potentially illegal” action. 

      In April, American announced that it was receiving $5.8 billion from the government to support payroll operations.

      Airline stocks have rallied on Wall Street this week on growing optimism that the country is beginning to reopen and travel is about to resume. But the ris...
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      Arizona sues Google over alleged deceptive and unfair location tracking

      Consumers need to understand that turning one data collection switch off doesn’t guarantee that all are off

      The state of Arizona has filed a lawsuit against Google alleging that the digital media company collected location data from its users illegally and without their approval. 

      Arizona Attorney General Mark Brnovich claims that Google then took that data and exploited it for its advertising business. Arizona’s requested relief is pretty simple: stop the practice and pay the state part of the money it leveraged out of the practice.

      “While Google users are led to believe they can opt-out of location tracking, the company exploits other avenues to invade personal privacy,” Brnovich said in a statement. “It’s nearly impossible to stop Google from tracking your movements without your knowledge or consent. This is contrary to the Arizona Consumer Fraud Act and even the most innovative companies must operate within the law.”

      Turning Location History off alone doesn’t do the trick

      A quick look at Google’s balance sheet makes it easy to see why the company keeps tabs on anyone who uses its product. In 2019, more than 80 percent of Google’s revenues -- some $135 billion -- was derived from advertising. And it does it, some claim, while laughing in the face of users who have their tracking turned off.

      Google’s been in this position before, and it usually takes the company line that "with Location History off, the places you go are no longer stored." But as an AP article revealed, Google’s defense was blatantly false; the report found that Google covertly collects location information via settings such as Web & App Activity even with Location History turned off. 

      Some of that hand-wringing likely comes from users who think that with Location History turned off, everything related to that is also turned off. Unfortunately, that’s not how Google plays this game.

      However, to the company’s credit, when ConsumerAffairs reviewed Google’s policies regarding Web & App Activity, it was above board about what it collects and how it might use the data. It just requires the user to take another step or two to make sure all of the underlying branches of Location History are also turned off. Or, as Brnovich’s office called it, “a misleading mess of settings, some of which seemingly have nothing to do with the collection of location information.”

      If anything, Arizona might be able to force Google to make opting out of data collection a single-step switch. That alone would be a major victory for privacy advocates.

      The state of Arizona has filed a lawsuit against Google alleging that the digital media company collected location data from its users illegally and withou...
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      Lawsuit claims Trump administration used flawed analysis to justify weakening Obama-era fuel standards

      Officials say the rule change represents a ‘public health hazard’ that could result in thousands of early deaths

      A group of environmental and health groups have joined state officials in suing the Trump administration over its efforts to weaken Obama-era fuel standards. 

      The suit filed Wednesday comes roughly two months after President Trump finalized a rule that would hold car manufacturers to a much lower fuel efficiency standard than was set during the Obama administration. Instead of requiring automakers to make new vehicles 5 percent more efficient each year, Trump pushed to have automakers make their vehicles just 1.5 percent more fuel efficient each year. 

      Attorneys general from 23 states and the District of Columbia have already sued the administration over the change. Now, a new lawsuit alleges that the Environmental Protection Agency (EPA) and National Highway Traffic Safety Administration (NHTSA) used an erroneous analysis to justify making the change.

      ‘Public health hazard’

      The lawsuit filed Wednesday claims that the EPA and NHTSA justified rolling back Obama-era standards using an analysis that was “riddled with errors, omissions, and unfounded assumptions.”

      The Trump administration has argued that the rule change will enable automakers to produce less expensive cars for consumers, as well as increase driver safety. Trump said standards introduced under the Obama administration would have made cars more expensive and would have made people want to keep their older, less safe cars. 

      Attorneys general countered by saying that undoing rules that would reduce air pollution and greenhouse gas emissions could result in an estimated thousands of early deaths.

      “What makes [Trump’s] rule so offensive is [that the Obama-era standard] is not a rule where people can say it was a disconnect. No, this was a smooth path,” Colorado Attorney General Phil Weiser said on a call with reporters. “This was a promising path. This was a future that we need. But nonetheless, we’re seeing this happening.”

      In a statement, California Attorney General Xavier Becerra called the rule “a job-killer and public health hazard” that will “increase costs to consumers and allow the emission of dangerous pollutants that directly threaten the health of our families.” 

      General Motors, Toyota, and Fiat Chrysler have supported Trump’s effort to block California from setting its own vehicle emissions standards higher than the federal mandate. Meanwhile, Volkswagen, Ford, Honda, and BMW have committed to yearly increases in fuel economy that exceed Trump’s standards. 

      A group of environmental and health groups have joined state officials in suing the Trump administration over its efforts to weaken Obama-era fuel standard...
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