With inflation uncomfortably high and the COVID-19 Delta variant raising economic concerns, a divided Federal Reserve will meet this week to discuss when and how it should dial back its ultra-low-interest rate policies, the Associated Press reported. For now, the U.S. economy is growing briskly in the wake of the pandemic recession, and the pace of hiring is healthy, which is why the Fed’s policymakers will likely move closer toward acting soon. In particular, the officials are expected to discuss the timing and mechanics of slowing their $120 billion-a-month in bond purchases — a pandemic-era policy that is intended to keep long-term loan rates low to spur borrowing and spending.
Rep. Alexandria Ocasio-Cortez (D-N.Y.) on Friday called on the Centers for Disease Control and Prevention (CDC) to extend its eviction moratorium amid a massive backlog in the distribution of rental aid, The Hill reported. In a Friday statement, Ocasio-Cortez urged the Biden administration to prevent the CDC’s ban on most evictions from expiring on July 31 despite the agency saying in June it would not likely extend the ban past that date. Ocasio-Cortez said that it was “reckless” to allow the ban to lapse with a fraction of the $46 billion in federal rental aid actually in the hands of tenants, landlords and utilities companies. More than 4.7 million Americans are not current on their housing payments and expect to be evicted or foreclosed on within two months, according to a survey conducted by the Census Bureau between June 23 and July 5. Roughly 8 million also said they don’t expect to make their next housing payment on time.
Lawmakers pushed to finalize an infrastructure agreement Sunday, but said they were still struggling to resolve a dispute over how much to increase public-transit funding, a snag that could delay their goal of advancing the bill in a Senate vote early this week, the Wall Street Journal reported. GOP senators had blocked efforts by Democrats to begin consideration of the roughly $1 trillion infrastructure bill on Wednesday, saying that too much of the package remained unresolved. Lawmakers in a bipartisan group crafting the legislation said late last week that they hoped to finish in time to reverse that outcome in a second vote in the next few days. Sen. Rob Portman (R-Ohio), the lead GOP negotiator of the bipartisan group, said Sunday on ABC that negotiators were “about 90% of the way there” in reaching an agreement, but were still battling over how much money to direct to public transit. Democrats have pushed to include a larger share of transit funding. The transit-funding dispute threatened to extend the already-delayed timeline for the infrastructure bill. A group of 11 Republican senators wrote to Senate Majority Leader Chuck Schumer (D., N.Y.) last week, saying they would vote to start debate on the bill, provided that the major issues are resolved and its official cost has been estimated. If all Democrats also support the legislation, that would allow it to clear the 60-vote threshold.
Calder Brothers Corp. is under pressure to raise wages after rivals lured away some of its workers. With willing workers in short supply across the United States and companies frantically vying for them, Calder knows his firm cannot hold off pay increases. At the same time, however, soaring prices for the raw materials used in the asphalt paving machines his company builds have left it with no wiggle room. American manufacturers of all sizes are grappling with the strongest inflationary pressure in three decades following a relentless rise in raw-materials prices in the past 13 months, Reuters reported. Harley-Davidson Inc. said last week it would impose an average pricing surcharge of 2% from July 1 on select models sold in the United States to mitigate the cost pressure, which shaved off 5 percentage points from its profit in the latest quarter. Yet the motorcycle maker expects earnings to suffer in the second half of the year. Higher commodity prices are eating into corporate budgets, making it tougher for manufacturers to compete in a tight labor market. American manufacturers have long complained about labor shortages. But until this April, wage gains for production workers failed to keep pace with the overall trend in the economy. This year, the U.S. labor supply has been further limited by a combination of enhanced jobless benefits, lingering concern about returning to work, childcare issues and pandemic-related retirements as well as career changes. The number of job openings at manufacturers is at the highest level in two decades, according to data from the U.S. Labor Department. Adding to the challenge, more workers are quitting their jobs than at any time in at least two decades. Meanwhile, a booming economy has sparked a competitive frenzy as manufacturers are now jostling for workers with companies like McDonald's Corp. and Amazon.com Inc., which are offering higher wages as well as signing bonuses. As a result, employee wages are projected to rise over the next 12 months at the fastest pace in two decades, according to a survey by the National Association of Manufacturers.
The latest round of drama for Hertz Global Holdings Inc. concerns its newly re-launched shares, which can be bought and sold by individuals on the open market for about $17, Bloomberg News reported. But insiders who got their stakes as part of the auto rental company’s recent bankruptcy settlement can trade only with other professionals in private markets, at least for now. Those shares are fetching about $5 less, according to investors with access to trading data.
Like many of its peers, venerable department store chain Nordstrom is having a tough time keeping pace with customer demand for new clothes because of supply issues, the Associated Press reported. That will be an even bigger challenge heading into the full swing of its anniversary sale, a tradition since the 1960s. Last year, customers stayed away because there was no reason to buy dressy clothes during a pandemic. But Nordstrom is framing this year’s event as an opportunity for shoppers to reinvent themselves as they come out of their homes. Amid product delays, the retailer says it developed a back-order feature on its website for customers who want to take advantage of the sale but find the item not in stock.
Economic devastation from the pandemic in Utah has not triggered an increase in personal or business bankruptcies, The Salt Lake Tribune reported. At least not so far. To the contrary: The Beehive State saw 7,641 personal bankruptcies filed last year under chapters 7 and 13, down 22.7 percent during a year of tumult and COVID-19 lockdowns compared to 9,878 in 2019, when the state’s economy was booming. Business bankruptcies were all but unchanged, with 20 filings under chapter 11 in Utah for all of 2020 compared to 23 in 2019, according to the bankruptcy court. The trend so far this year is down even more, with 2,946 personal and business bankruptcies filed from January through June in Utah, compared to 4,882 in the first six months of 2019 and 4,038 over the first half of 2020. Those numbers have been ticking up slightly in recent months but they’re still well below previous rates. Bankruptcy attorneys say billions of dollars in pandemic relief money from Congress — especially payroll loans to businesses and beefed-up unemployment benefits — appear to have helped thousands of Americans stave off financial collapse. Personal filings rose slightly in March 2020, but for more typical seasonal reasons unrelated to the pandemic. In addition to government assistance, many Utahns who struggled financially during the health crisis have been kept from the edge by limited moratoriums on evictions, debt collections and wage garnishments, including student loan debtors and those who fell behind on rent or utility bills. Some of those benefits are expiring — at least in Utah — and that may account for personal bankruptcies now rising.
It hit like a derailed train and was hugely destructive, but it was short-lived, The Washington Post reported. The recession that broke out with the onset of the coronavirus pandemic lasted just two months, officially ending in April 2020. That makes it the shortest downturn on record, according to the committee of economists that determines when recessions begin and end. The U.S. economy reached a peak in February 2020, the National Bureau of Economic Research’s Business Cycle Dating Committee (NBER) said. The recession began the following month and ended in April. The NBER said the recession ended that month because that is when the economy reached its lowest point in terms of jobs and output. The end of the recession does not mean the economy was fully recovered. It only began to rebound in May 2020, the committee said. The recovery has continued in fits and starts for the past year and by some measures is nearly complete. The economy’s output of goods and services likely reached its pre-pandemic level in the April-June quarter, analysts estimate.
