Hurricane Ida is sure to take a toll on the energy, chemical and shipping industries that have major hubs along the Gulf Coast, but the extent will depend on whether refinery shutdowns are prolonged, economists suggested Sunday.
Consumer prices over the past 12 months have risen 4.2%, the biggest 12-month gain since a 4.5% increase for the 12 months ending in January 1991.
In a speech being given virtually to an annual gathering of central bankers, Federal Reserve Chairman Jerome Powell stressed that the beginning of tapering does not signal any plan to start raising the Fed’s benchmark short-term rate.
The uncertainties raised by the delta variant make it likelier that the Fed will announce a tapering in November or later, economists said, rather than in September. That would allow Fed officials to consider two additional months of data on inflation and jobs to gauge the delta variant’s impact.
The four-week average of claims, which smooths out week-to-week volatility, fell to its lowest level since mid-March 2020, when the coronavirus was beginning to slam the United States.
The U.S. economy grew at a robust annual rate last quarter, slightly faster than previously estimated, the government said Thursday in a report that pointed to a sustained consumer-led rebound from the pandemic recession.
The dwindling number of first-time jobless claims has coincided with the widespread administering of vaccines, which has led businesses to reopen or expand their hours and drawn consumers back to shops, restaurants, airports and entertainment venues.
The Federal Reserve is edging toward an announcement that it will begin paring the pace of its Treasury and mortgage bond buying, which now amounts to $120 billion a month.
Federal Reserve Chairman Jerome Powell said Tuesday that the U.S. economy has been permanently changed by the COVID pandemic and it is important that the central bank adapt to those changes.
Economists think Americans are also shifting their spending from goods to services, things like haircuts or vacations, which are not included in Tuesday’s report. And rising prices for everything from food to washing machines might have checked spending.
Overall, industrial production—which includes manufacturing, utilities and mining—posted a 0.9% increase, the best performance since a 2.8% surge in March.
Prices at the wholesale level over the past 12 months are up a record 7.8%, the largest increase in that span of time in a series going back to 2010.
Rising inflation has emerged as the Achilles’ heel of the economic recovery, erasing much of the benefit to workers from higher pay and heightening pressure on the Federal Reserve’s policymakers under Chair Jerome Powell, who face a mandate to maintain stable prices.
Wages have been rising rapidly as the economy reopens and businesses struggle to hire enough workers. Some of the biggest gains have gone to workers in some of the lowest-paying industries.
Unemployment claims remain high by historic levels: Before the pandemic slammed the United States in March 2020, they were coming in at around 220,000 a week.
Congress approved $10 billion in federal assistance to help homeowners pay off debt, but the program is moving so slowly that protections are expiring before states have figured out how to distribute the money.
In the year ending in June, wages and salaries jumped 3.5% for workers in the private sector, the largest increase in more than 14 years. That increase was driven by sharp rise in pay for restaurant and hotel workers of more than 6%.
For all of 2021, the economy is expected to expand perhaps as much as 7%. If so, that would be the strongest calendar-year growth since 1984.
But the 190-country lending agency has downgraded its forecast for poorer countries, most of which are struggling to vaccinate.
Economists characterized last week’s increase as most likely a blip caused by some one-time factors and partly a result of the inevitable bumpiness in the week-to-week data.
