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Delta Air Lines yesterday reported a $652 million profit in the second quarter of the year, its first since the pandemic began and the latest sign that the airline recovery is well underway. The carrier reported $7.1 billion in revenue, the New York Times reported. There were also promising indications that the business is returning to normal, Delta said, noting that booking trends recovered as customers bought tickets further out, with average daily sales beating Delta’s internal expectations by 20 percent. “Domestic leisure travel is fully recovered to 2019 levels, and there are encouraging signs of improvement in business and international travel,” the airline’s chief executive, Ed Bastian, said. Corporate travel recovered as offices reopened throughout the quarter, with the number of business travelers down 60 percent in June compared with 80 percent in March, according to the airline. Despite those encouraging signs, Delta’s quarterly profit, which was buoyed by $1.5 billion in federal stimulus money, was still down 55 percent from the same quarter in 2019. Its revenue was down 43 percent from two years ago. The number of people flying for vacation or to visit friends and family within the United States has recovered to prepandemic levels, but Delta’s revenue from domestic travel was down 45 percent from 2019 because of the drop-off in business travel.

U.S. inflation continued to accelerate in June at the fastest pace in 13 years as the recovery from the pandemic gained steam and consumer demand drove up prices for autos, airline fares and other items, the Wall Street Journal reported. The Labor Department said last month’s consumer-price index increased 5.4% from a year ago, the highest 12-month rate since August 2008. The so-called core price index, which excludes the often volatile categories of food and energy, rose 4.5% from a year before. The index measures what consumers pay for goods and services, including clothes, groceries, restaurant meals, recreational activities and vehicles. It increased a seasonally adjusted 0.9% in June from May, the largest one-month change since June 2008. Prices for used cars and trucks leapt 10.5% from the previous month, driving one-third of the rise in the overall index, the department said, marking the third straight month of big price increases amid a supply shortage of vehicles. The indexes for airline fares and apparel also rose sharply in June. (Subscription required.)

The U.S. government spent at least $5.2 trillion to combat the COVID-19 crisis. It stands as one of the most expensive, ambitious experiments in U.S. history, according to a Washington Post commentary. A final phase of that assistance could begin this week, when the Treasury Department begins a $110 billion program of child tax credit payments for millions of Americans. Those benefits are set to run through the end of the year. But even that program runs out, assuming it is not renewed. And policymakers will be undertaking an equally uncertain experiment by letting most other COVID-19 relief aid run its course. Businesses and households that were able to navigate the pandemic with large levels of government aid will soon test their ability to forge ahead on their own. Previous attempts to let pandemic-related benefits expire were met with last-minute extensions, as economic updates remained dismal and hardship remained prominent. But the White House appears ready to let the training wheels come off this year as positive indicators pile up. GDP numbers released later this month will likely show the economy has already recovered from its pandemic losses. The nonpartisan Congressional Budget Office expects it to grow at a searing 7.4 percent pace in 2021, and a still-respectable 3.1 percent in 2022, adjusted for inflation, which would be the strongest two-year growth spurt the U.S. has put together in 37 years. But the post pandemic boom, fueled by pent-up demand for services, trillions in extra savings and trillions more in government aid, will fade. CBO now projects growth will slow to 1.1 percent in 2023 and an average of 1.2 percent in 2024 and 2025 — the slowest sustained growth the U.S. has seen outside of a recession, according to Commerce Department data going back to 1929. Before the pandemic, the CBO projected steady growth of between 1.6 and 1.8 percent, rather than a dramatic boom and a leveling off.

Federal Reserve Bank of St. Louis President James Bullard is ready to start slowing the pace of central bank bond buying as soon as his colleagues are, worried in part that the purchases risk overheating the gangbusters housing market, the Wall Street Journal reported. “I think with the economy growing at 7% and the pandemic coming under better and better control, I think the time is right to pull back emergency measures,” Mr. Bullard said yesterday. When it comes to the outlook for the Fed paring its purchases of Treasury and mortgage bonds, “we do want to do it gently and carefully, but I think we’re in a very good position to start a taper. I don’t need to get going tomorrow, but I think we’re — I think we’re in very good shape for this” once the collective membership of the Federal Open Market Committee is ready to act, Bullard said. Some $40 billion a month of the purchases target mortgage backed bonds. Some Fed officials have openly questioned continuing those purchases given the strength of the housing market, and some are ready to start paring the asset buying. Bullard does not believe the housing sector is in a bubble and wants to ensure it stays out of trouble. “I am a little bit concerned that we’re feeding into an incipient housing bubble,” he said. “We did get into a lot of trouble with a housing bubble in the mid-2000s and it — and it caused a lot of damage to the economy, so I don’t think we need to be feeding that here given the situation.” (Subscription required.)

U.S. President Joe Biden’s planned pension rescue could result in even more money being shunted into investment-grade corporate bonds than previously thought, according to Citigroup Inc. strategists, Bloomberg News reported. The Pension Benefit Guaranty Corp., which insures pensions, issued rules on Friday for bailout money for multi-employer plans that are severely underfunded. These plans can apply for rescue funds as part of the $1.9 trillion pandemic-relief bill signed into law in March. The PBGC said that the pensions are eligible for $94 billion of assistance, which is higher than the $86 billion that Citigroup strategists estimated in May. And the government agency said it is limiting the types of investments the pensions can make with the rescue funds to individual investment-grade fixed-income securities, or funds such as exchange-traded funds, mutual funds or pooled trusts. That increases the “likelihood that funds are channeled” into high-grade bonds, Citi’s Daniel Sorid and James Keefe wrote in a note late Friday. The 124 weakest multi-employer plans were hit hard early in the pandemic, with plunging markets resulting in their only being 34% funded, compared with 74% at the end of 2007, according to a report from actuarial firm Milliman.

After COVID-19 forced restaurants, hotels and bars to shut last year, thousands of workers didn’t just get pushed to the employment sidelines, the Wall Street Journal reported. Many moved onto new careers in digital sales, shipping, mortgage-financing and other businesses that thrived in the pandemic, in what some economists say could mark a lasting shift in the labor market for hospitality staff. That exodus, they say, could spell labor challenges for the sector that persist well beyond September, when the enhanced federal unemployment benefits that have helped keep some low-wage workers from returning to jobs are set to expire. To try to lure workers back, many restaurant operators and other hospitality businesses are raising wages, offering signing perks and rethinking scheduling practices to make the work more flexible and, in some cases, less grueling. The share of U.S. restaurant and hotel workers leaving their jobs hit a two-decade high in May at 5.7%, according to the Labor Department. Though the latest jobs report shows restaurants and bars added 194,000 jobs in June, employment at such establishments remains down by 1.3 million jobs since the pandemic began. By contrast, employment has bounced back beyond pre-pandemic levels in many other sectors. Compared with February 2020, there are now 100,000 more warehousing and storage jobs, along with 39,000 more jobs in management and technical consulting, and 25,000 more jobs in insurance and finance. (Subscription required.)

Aeromexico said on Friday a group of Mexican shareholders and business people had informed the airline they aimed to participate in a major capital raising as part of the company's chapter 11 restructuring process in the United States, Reuters reported. Aeromexico in a statement said it was unaware that any agreement had been reached so far, but would provide details as and when one was in place. It also noted it expected the investment to be "substantial, controlling and long-term." Delta Airlines, which owned a noncontrolling 51% stake in Aeromexico as of Dec. 31, declined to comment. Delta took a $770 million charge on its investment last year after the carrier's chapter 11 bankruptcy filing. Aeromexico did not provide details on the identity of the shareholders and business people.