Tag: U.S. economy

U.S. budget deficit shattered one-month record in June as spending outpaced revenue by $864 billion

Washington Post logoA huge spending increase and sharp falloff in revenue led to the large gap. The deficit in the past nine months has breached $2.7 trillion.

The U.S. budget deficit widened to a record-high $864 billion last month because of the federal government’s extraordinary response to the coronavirus pandemic, the Treasury Department said on Monday.

In June 2019, the budget deficit was just $8 billion.

Federal spending rose to more than $1.1 trillion in June, more than twice what the U.S. government spends in a typical month. The amount of tax revenue collected by the federal government remained largely flat, at about $240 billion, in part because the Treasury Department delayed the tax filing deadline until July. Continue reading.

The stock market and economy have parted ways. It’s a FOMO market now.

Washington Post logoJust last week, the Organization for Economic Cooperation and Development (OECD) — a group of 36 countries — issued its forecast for the United States through 2021. It is unlikely to inspire much cheering. Acknowledging that much depends on the severity of the coronavirus, the OECD report constructs two scenarios: one that might be termed “pessimistic” and a second that is “more pessimistic.”

Under the “pessimistic” assumptions, the unemployment rate is projected at 11.3 percent at the end of 2020 and the economy (gross domestic product) falls 7.3 percent for the year. Both the unemployment rate and the GDP decline are larger than in any previous post-World War II recession. By way of comparison, the peak monthly jobless rate in the Great Recession of 2007-2009 was 10 percent. Continue reading.

In ‘Buy American’ Speech, Biden Challenges Trump on the Economy

New York Times logoJoseph R. Biden Jr. laid out a populist economic vision with the tagline “Build Back Better,” part of an effort to confront President Trump on his strongest issue in polling.

Joseph R. Biden Jr. laid out a populist economic vision to revive and reinvest in American manufacturing on Thursday, calling for major new spending and stricter new rules to “Buy American” as part of an effort to more aggressively challenge President Trumpon two of his signature issues: the economy and nationalism.

In a speech in the battleground state of Pennsylvania, Mr. Bidenlacerated Mr. Trump for a bungled response to the coronavirus pandemic that has deepened the economic crisis and a misplaced focus on the stock market, while framing his own economic agenda around a new campaign tagline, “Build Back Better.”

In some ways, Mr. Biden was seizing the “Buy American” message from Mr. Trump himself, who campaigned on an “America First” agenda in 2016 and wrote on Twitter on his Inauguration Day that “Buy American” and “Hire American” were “two simple rules” that would guide his administration. Continue reading.

Trump’s campaign to open schools provokes mounting backlash even from GOP

An overwhelming alignment of local, state and even Republican-aligned organizations oppose the rush to reopen schools and colleges.

President Donald Trump has been on a rampage against public schools and colleges all week, threatening to use the power of the federal government to strong-arm officials into reopening classrooms.

But his effort is now creating a backlash: An overwhelming alignment of state and even Republican-aligned organizations oppose the rush to reopen schools. The nation’s leading pediatricians, Republican state school chiefs, Christian colleges and even the U.S. Chamber of Commerce have all challenged parts of Trump’s pressure campaign.

“Threats are not helpful,” Joy Hofmeister, the Republican state superintendent of public instruction in Oklahoma, told POLITICO on Friday. “We do not need to be schooled on why it’s important to reopen.” Continue reading.

Around 1.3 million people filed for first-time unemployment benefits last week

Despite historic levels of joblessness, the labor market is slowly recovering from months of shutdowns.

Around 1.3 million people filed for first-time unemployment benefits last week, the 14th straight week of declines, according to new figures from the Department of Labor.

Thursday’s data is further indication that despite historic levels of joblessness, the labor market is slowly recovering from months of shutdowns put in place to halt the spread of the coronavirus. More than 48 million people have now filed for unemployment benefits for the first time in the past 16 weeks.

Continuing claims data, which captures the number of people collecting ongoing benefits, fell sharply to just over 18 million, down by almost 700,000. Continue reading.

Economists Think Congress Could Create An Economic Disaster This Summer

Congress has less than a month to hammer out a deal on the next round of stimulus before expanded unemployment benefits expire. State and local governments are starting to feel the pinchof budget shortfalls. And while the U.S. got a piece of (relatively) good news in last week’s jobs report, which featured an unemployment rate 2.2 percentage points lower in June than it had been in May, the economy has been thrown back into chaos in the meantime, with a number of states pulling back on their reopenings amid spiking COVID-19 infections and hospitalizations.

Our newest survey of economists highlights just how consequential governmental decisions over the next month may be: On average, these economists think that a refusal by Congress to extend unemployment benefits or bail out state and local governments is just as likely to hurt the economy as local economies staying open in spite of COVID-19 spikes — or even closing because of the virus.

In partnership with the Initiative on Global Markets at the University of Chicago Booth School of Business, FiveThirtyEight asked 31 quantitative macroeconomic economists what they thought about a variety of subjects around the coronavirus recession and recovery efforts. The most recent survey was conducted from July 2 through 6, which means the June jobs report was fresh on respondents’ minds — but so was the state of the pandemic, along with challenges ahead for lawmakers. Continue reading.

The airline bailout loophole: Three companies received $338 million in relief money for workers — and laid workers off anyway

AlterNet logoThree airline industry companies slated to receive $338 million in public money designed to preserve jobs in the hard-hit industry have laid off thousands of workers anyway, according to Treasury disclosure filings and public layoff data.

The largest company, Gate Gourmet, is a global preparer of airline meals and part of a Swiss conglomerate owned by the private equity firm of wealthy Malaysian businessman Richard Ong. Gate Gourmet is scheduled to get $171 million from the federal program to bail out the airline industry even after it reported laying off thousands of workers at airports in half a dozen states, including California, Georgia, New York and Illinois, in recent months, according to public filings. The exact number of workers who lost their jobs is not clear.

“These grants are meant to save jobs and only to save jobs,” said Rep. Katie Porter, D-CA, who has supported the aid program for aviation workers. Every payment Treasury makes “despite clear indications that the recipient company is firing workers or cutting hours is an abuse of the program and taxpayer money.” Continue reading.

Millions of Americans are about to find out how badly Trump and the GOP have screwed them over

AlterNet logoRobert Reich, writing for The Guardian, weighs in on the fairy tale that our country is somehow “roaring back,” as Donald Trump characterized it when he hawked a report last week based on misleading unemployment statistics, numbers which were already woefully out of date at the time they were released:

The US economy isn’t roaring back. Just over half of Americans have jobs now, the lowest figure in more than 70 years. What’s roaring back is Covid-19. Until it’s tamed, the American economy doesn’t stand a chance.

As former Labor Secretary Reich notes, “The uptick in jobs in June was due almost entirely to the hasty reopening, which is now being reversed.” Continue reading.

Treasury, SBA data show small-business loans went to private-equity backed chains, members of Congress

Washington Post logoAlmost 90,000 employers also appear to have received money despite not saying how many jobs they would save

As part of its $660 billion small-business relief program, the SBA also handed out loans to private schools catering to elite clientele, firms owned by foreign companies and large chains backed by well-heeled Wall Street firms. Nearly 90,000 companies in the program took the aid without promising on their applications they would rehire workers or create jobs.

The data, which was released after weeks of pressure from media outlets and lawmakers, paints a picture of a haphazard first-come, first-served program that was not designed to evaluate the relative need of the recipients. While it buttressed a swath of industries and entities, including restaurants, medical offices, car dealerships, law firms and nonprofits, the agency did not filter out companies that have potential conflicts of interest among influential Washington figures. Continue reading.

Getting Americans Back to Work and Good Jobs

Center for American Progress logoHouse Democrats recently unveiled the Moving Forward Act, a bill that would invest $1.5 trillion to modernize America’s physical infrastructure.1 The legislation would get millions of Americans back to work and ensure that communities can make long-overdue improvements to highways and rail and transit systems. In addition, it goes even further to support economic recovery by investing in health care, airports, clean energy, broadband, education, and drinking water infrastructure. As the country emerges from the global pandemic, such a major infrastructure investment will be critical to the nation’s economic recovery.2

Moreover, the proposed package takes several positive steps to ensure that its investments support high-quality jobs. In order for any infrastructure package to create widely shared economic benefits, Congress must also ensure that all companies benefiting from infrastructure spending create good jobs that are accessible to Americans of all walks of life. At a minimum, the government should require all private sector employers receiving federal infrastructure spending to:

  1. Pay decent wages and provide quality benefits.
  2. Prevent discrimination and comply with equal pay protections.
  3. Expand access to apprenticeship and targeted hire programs.
  4. Respect workers’ rights to join a union.
  5. Comply with existing workplace laws.
  6. Adhere to “Buy America” rules that create jobs in the United States. Continue reading.