%1

Airlines face a slew of growing costs in the coming year including higher insurance, fuel, labour and lease rates, the chief executive of major aircraft lessor SMBC Aviation Capital said on Thursday, Reuters reported. Managing those will be the industry's biggest challenge in the next 12-24 months despite a rebound in demand, Peter Barrett told the Airfinance Journal conference in Dublin. "If I had to pick one topic that's going to be a challenge for the industry over the next 24 months, it will be the cost base and how elastic will demand be relative to that," Barrett said. After years in which airlines enjoyed growth helped by low interest rates, Barrett said it was inevitable the rising cost of money would eventually be passed on through to the rates charged to airlines for leasing jets. The U.S. Federal Reserve raised interest rates by 50 basis points on Wednesday — the biggest hike in a single day since 2000 — in a bid to control surging prices. While demand for medium-haul air travel and narrowbody jets is bouncing back after the COVID pandemic, growing costs loom over back-to-back aircraft finance gatherings in Dublin. Lessors, including the industry’s No. 3 player SMBC, own over half of the world's fleet of commercial passenger jets.

Supply-chain problems are a bear, but they are better than the alternative of waning demand. The worry for some manufacturers has to be that the latter might become a live concern in the months ahead, the Wall Street Journal reported. The Institute for Supply Management on Monday said that its index of manufacturing activity slipped to 55.4 in April from March’s 57.1. That is still solidly above 50 — the dividing line between growth and contraction — but marked the lowest level since July 2020. Moreover, the index got a boost in April from a slowdown in supplier deliveries, which is usually a positive sign for manufacturing, but in the context of ongoing supply-chain issues counts a negative. It was at an elevated 67.2 versus 65.4 in March. Manufacturing growth could further moderate in the months ahead, in response to shifts in demand. The easing of the pandemic has led to a shift away from spending on many types of manufactured goods toward services. Commerce Department figures released last week showed that, adjusted for inflation, consumer spending on furnishings, appliances and other household equipment in the first quarter was 5.1% below its year-earlier level. Spending on restaurants, bars and other food services was up 19.5% over the same period, while spending on hotels and motels was up 49%.

Billions of dollars in aid not only guaranteed that uninsured Covid patients would not face medical bills during the pandemic but also offered a lifeline for financially stressed institutions that provide extensive uncompensated care for the poor, the New York Times reported. The infusion of aid is ending at a time when hospitalizations from Covid are receding, but as safety-net providers are facing tremendous unmet needs from patients who have delayed care for chronic conditions and other health problems even more than usual during the pandemic. “Their margins are slim to begin with,” Beth Feldpush, the senior vice president for policy and advocacy at America’s Essential Hospitals, which represents safety-net hospitals, said of the institutions. She added that some were already having a “more difficult time bouncing back operationally and financially.” Nashville General has seen an average of just one Covid patient a week recently. But its doctors and nurses say that a wide range of health problems that worsened during the pandemic are now overwhelming the hospital. Dr. Eric Neff, an orthopedic surgeon, said patients were afraid to visit the hospital during much of the pandemic and often had trouble finding transportation when they did. The consequences were dire: People waited six months to seek care for a broken wrist or ignored a torn rotator cuff, making it harder for him to fix their injuries. The crisis of the uninsured is especially acute in Tennessee, which has one of the highest rates of hospital closures in the country and is among a dozen states that have chosen not to expand Medicaid to cover more low-income adults under the Affordable Care Act. Roughly 300,000 people in the state fall in the so-called coverage gap, meaning they are ineligible for either Medicaid or discounted health insurance under the Affordable Care Act despite having little to no income.

Consumers spent more in March, showing American households are absorbing high inflation and are positioned to propel the economy heading into the spring and summer, the Wall Street Journal reported. Personal-consumption expenditures increased a seasonally adjusted 1.1% in March from the prior month, the Commerce Department said Friday. Adjusting for inflation, consumer spending rose 0.2% last month, driven by higher services spending. Household spending also rose at a faster rate than inflation from a year earlier. Consumers stepped up spending on services like travel and dining, as well as on goods like gasoline and food. Spending on durable goods declined for the second month in a row, led by lower spending on vehicles. Personal income, a measure that includes wages and government assistance, climbed 0.5% from the prior month. That was a slower rise than overall inflation, which increased 0.9% on the month in March, according to the Commerce Department. Some Americans tapped their savings to offset cost increases. The savings rate fell to 6.2% in March, the lowest in nine years.

President Biden said yesterday that he is considering wiping out some student loan debt and will make a final decision “in the coming weeks,” the New York Times reported. “I am considering dealing with some debt reduction,” Mr. Biden said after a speech in the Roosevelt Room of the White House. The comments were the clearest signal yet from Mr. Biden that he may make good on a promise to cancel at least some debt for student loan borrowers. During the campaign in 2020, he said he would “make sure that everybody in this generation gets $10,000 knocked off of their student debt.” The White House has been under intense pressure to provide the relief through executive action, and Mr. Biden this month extended a pause on loan payments for a fourth time. But the president made clear that his decision would disappoint at least some progressive Democrats and advocates who argue that large-scale cancellation is necessary to address economic and racial disparities and want him to wipe out $50,000 or more per borrower. “I am not considering $50,000 debt reduction,” Mr. Biden said. But he added that he was “taking a hard look” at debt forgiveness. “I’ll have an answer on that in the next couple of weeks,” he said. The timeline comes after Mr. Biden discussed the issue with members of the Congressional Hispanic Caucus this week in a closed-door meeting at the White House. Representative Tony Cárdenas, Democrat of California, said that Mr. Biden signaled he was open to debt forgiveness when asked if he would follow through on his $10,000 promise. In a statement, Mr. Cárdenas said he was glad to see Mr. Biden confirm that position.

Senior Trump administration officials overruled Pentagon staffers to provide a politically connected trucking firm with hundreds of millions of dollars in pandemic aid after a concerted lobbying effort, according to documents released by House Democrats on Wednesday, the Washington Post reported. In 2020, career employees at the Defense Department decided that they should not certify that Kansas-based Yellow Corp. was critical to maintaining national security, which would mean the company could not qualify for a loan program created by Congress earlier in the pandemic, the investigation found. They communicated that decision to the Treasury Department on June 24, 2020, according to emails quoted in the report. But the Trump appointees ignored that decision after a newly revealed phone call between Treasury Secretary Steven Mnuchin and Defense Secretary Mark T. Esper on June 26, 2020, that was set up to discuss “YRC and DOD certification,” according to the Democrats’ report. (Yellow Corp. was formerly named YRC Worldwide.) Esper then certified the company as “critical to maintaining national security” for the purposes of the loan. "As we’ve previously stated, one of the ways companies could be considered for Treasury loans was a certification from DOD that the applicant business was critical to maintaining national security,” said Defense Department spokesperson Jessica Maxwell. “DOD used the same criteria used for other CARES Act funding opportunities to assess companies for DOD certification for Treasury loans. However, DOD did not make any final decisions regarding granting these loans. Department of Treasury made final determinations and decisions.” Jonathan Hoffman, a spokesman for Esper, said the former defense secretary followed the recommendations of career staffers who recommended certifying the loan and the Treasury Department made the final decision to issue it.

States that prematurely ended enhanced unemployment benefits programs implemented during the pandemic did not see greater job growth compared to states that kept them, The Hill reported. A new report from the Federal Reserve Bank of San Francisco contradicted the theory that expanded benefits disincentivize people from returning to work, which many Republican state leaders argued when they cut the expanded benefits granted by the federal government. “We find that the UI withdrawals had limited direct impacts on hiring rates, which suggests the enhanced UI benefits were not an important source of labor shortages in 2021,” the report states. The benefits from the Coronavirus, Aid, Relief and Security Act officially ended in September 2021. But 26 states cut them early as the job market improved in the first half of 2021, with job openings reaching record levels. The act gave unemployed people an additional $600 weekly on top of benefits, which was later reduced to $300. “Economists and policymakers typically weigh these positive aspects of UI benefits against their potentially adverse effects on job search: by easing the financial pressure to find work, generous benefits may overly delay people’s transitions to prior or new jobs,” the report states.