Category Archives: US economy

‘Pride is coming back’: Biden touts victories on jobs and climate in State of the Union address

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President hopes to combat widespread sense of pessimism and to tout his accomplishments from first two years in office

Joe Biden called on Republicans to help him to “finish the job” of rebuilding the economy and restoring faith in American democracy in his second State of the Union address on Tuesday night, as he made an unfettered call to action on police reform, gun control and the climate crisis.

Addressing a divided Congress for the first time, an optimistic Biden made the case that the nation was stronger and more stable than when he assumed office two years ago.

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US heads for debt-ceiling standoff as House Republicans refuse to budge

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Hard-right Republicans say no to ‘clean’ debt ceiling increase, raising dire possibility of US defaulting on financial obligations

The US economy could be headed for a crisis manufactured by a handful of House Republicans.

The treasury secretary, Janet Yellen, informed congressional leaders on Thursday that the US has hit its debt ceiling, which limits the amount of money that the government can borrow to pay all of its bills. Yellen urged Congress to work as quickly as possible to raise the debt ceiling and prevent the US from defaulting on any of its financial obligations, which would have catastrophic consequences.

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US hits borrowing limit, kicking off fight between Republicans and Democrats – live

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Urban Institute economist Len Burman has a reality check for those in Congress flirting with not raising the debt ceiling.

A default could undermine the America’s pre-eminence in global markets, where the dollar is used as many countries’ dominant reserve currency. But more immediately, it would actually force Washington to spend even more, because a default would drive up interest rates, forcing the government to shell out more money to owners of its trillions of dollars in debt:

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US government hits debt ceiling as Biden and House Republicans face off

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Treasury secretary says department will take ‘extraordinary measures’ to skirt default while also urging Congress to act

The US government has hit the ceiling on its debt, brushing up against its legal limit of $38.381tn and piling pressure on Congress to approve an increase to avoid a debt default in the coming months that would send a shock wave through the global economy.

In a letter to congressional leaders, the treasury secretary, Janet Yellen, said it would begin taking “extraordinary measures” to make the government’s cash on hand last until Congress acts. These include a “debt issuance suspension period” lasting from today until 5 June, as well as suspending investments into two government employee retirement funds.

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JP Morgan chief says US should not be ‘playing games’ with debt ceiling

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Jamie Dimon warns that US creditworthiness should be ‘sacrosanct’ as country’s debt races toward $31.4tn limit

The US should not be “playing games” with the debt ceiling, the JP Morgan chief executive, Jamie Dimon, warned warring US political factions on Thursday as a heated row over the federal borrowing limit reached a crisis point.

“We should never question the creditworthiness of the US government. That is sacrosanct and it should never happen,” Dimon said on Thursday in an interview on CNBC. “This is not something we should be playing games with at all.”

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Microsoft to cut 10,000 jobs in March as tech firms, including Amazon, thin ranks

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Sector reacts to post-pandemic shift in digital spending and gloomy economic outlook for 2023

Microsoft is cutting 10,000 jobs as it cited a post-pandemic shift in digital spending habits and weakness in the global economy.

The tech group joined a list of US peers making extensive job cuts, including Facebook owner Meta, Amazon, and business software-maker Salesforce, who have scaled back on workforce expansions stoked by a pandemic-related boom in demand for their services and products that have lost momentum.

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Treasury secretary: US to reach debt ceiling on Thursday

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Janet Yellen told Congress that ‘extraordinary measures’ would be taken to avoid default until legislation is passed to raise ceiling

Janet Yellen, the US treasury secretary, has notified Congress that the US is projected to reach its debt limit on Thursday, 19 January, and will then resort to “extraordinary measures” to avoid default.

In a letter to House and Senate leaders on Friday, Yellen said her actions will buy time until Congress can pass legislation that will either raise the nation’s $31.4tn borrowing authority or suspend it again for a period of time.

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World Bank walking tightrope as it mulls increased lending to poorest

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Campaigners say bank should rush to rescue countries facing recession – but can it do so without resulting in mass debt write-offs?

Not since the early 1990s has the world faced such a period of low growth.

Discounting the havoc caused by the financial crash of 2008 and the initial impact of the Covid-19 pandemic, the World Bank says that by the end of 2024 it will have been 30 years since the global economy grew at an average of less than 2% a year.

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Goldman Sachs bankers brace for hefty cut to bonuses

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Bonus pool could be slashed by up to 40%, in possibly the lender’s largest cut to payouts since the financial crisis

Goldman Sachs bankers are reportedly at risk of having their bonus pool slashed by up to 40%, in what could be the lender’s largest cut to payouts since the 2008 financial crisis.

The bank is still in the process of deciding the size of its bonus pools for 2022, but the prospective cut could mean its 3,000 investment bankers endure the most significant drop in variable pay among their peers, according to the Financial Times, which first reported the news.

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‘We’re really worried’: US supermarket mega-merger raises mass layoff fears

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Kroger and Albertsons seek deal through FTC but employees say previous merger experience has them deeply concerned

Thousands of workers at two of America’s biggest supermarkets are warning of potential mass layoffs as the giant firms push for a merger.

Kroger, the second largest grocery chain in the US, and Albertsons, the fourth largest, are pushing for a merger through the Federal Trade Commission, which is reviewing the proposal.

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Federal Reserve to slow interest rate rises as it tackles 40-year inflation high

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Jerome Powell warned there ‘was more ground to cover’ and rates would stay higher for an extended period

The Federal Reserve chair, Jerome Powell, indicated the central bank is preparing to slow the pace of interest rate rises as it tackles a 40-year high in inflation. But Powell warned there “was more ground to cover” and rates would stay higher for an extended period.

In a speech to the Brookings Institution, Powell said that the Fed may increase its key interest rate by a smaller increment at its December meeting, only a half-point, after four straight three-quarter point hikes.

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‘It’s killing us all slowly’: how the night shift is taking a toll on US workers

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Millions of workers in the US work throughout the night, and the impacts can be profound on their health

Roger Reinhardt works third shift at a beer production facility in Michigan from 10pm-8am, four days a week. He initially started working nights because it was the only shift available when he started working but he has continued doing it for the extra pay.

But is not not easy.

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US inflation rate cools slightly as consumer prices rise 7.7% in October

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Bureau of Labor Statistics data represents decrease from September but core inflation rate remains high

Prices of goods and services in the US were up 7.7% in October compared with the same time last year, a sign that inflation is slowly starting to cool after reaching decades-high records over the last few months.

The US Bureau of Labor Statistics reported on Thursday that in October, the consumer price index showed a 7.7% rise in prices over the last 12 months, a 0.5 percentage-point decrease from September, which saw a rate of 8.2%. The October inflation rate is the lowest since January, when rates rose to 7.5%.

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Wall Street surges and dollar tumbles as US inflation rate drops to 7.7% – business live

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Dollar slides and stocks rally in New York on hopes that the Federal Reserve will slow its interest rate rises

The cost of living crisis is driving UK food banks to “breaking point” with almost 1.3m emergency parcels given to people over just six months.

The Trussell Trust charity has said families face record-breaking levels of need, with one in five individuals referred to its network now coming from working households.

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We need serious public policy, not more printed money – the US economy is in tatters

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Decades of bailouts have convinced some that the Fed will always come to the rescue – but this only papers over the fundamental flaws of the US economy

With the Federal Reserve leading the world’s central banks in a tightening cycle of interest rate rises, the likes of which we haven’t seen since 2006, commentators across the political spectrum are noting the fondness of the Fed chair, Jerome “Jay” Powell, for his legendary predecessor, Paul Volcker. On the left, the comparison is fearful; on the center and on the right, it’s one of admiration. But circumstances don’t really support the comparison.

On taking office in October 1979, Volcker declared “the standard of living of the average American has to decline” as a consequence of the war against the chronic inflation of the 1970s. He quickly set to work making that happen by driving interest rates up towards 20% and creating the deepest US recession since the 1930s.

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US adds 261,000 jobs in October as unemployment rate rises slightly

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Final jobs report before midterms shows unemployment rate at 3.7%, a day after Federal Reserve announced further raise hike

The US economy added 261,000 jobs in October, the labor department announced on Friday in its last snapshot of the health of the employment market before next week’s midterm elections.

The latest report confirmed the remarkable strength of the US jobs market. The unemployment rate rose to 3.7%, still close to a 50-year low. The news comes after the Federal Reserve once again raised interest rates in a bid to slow investment and bring down inflation, a move that economists and the Fed predict will eventually cost jobs.

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Fed announces sixth consecutive hike in US interest rates to fight inflation

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Fed officials have now imposed the sharpest increases in interest rates since the 1980s, as the cost of living crisis batters consumers

The Federal Reserve stepped up its fight against a 40-year high in US inflation on Wednesday, announcing its fourth consecutive three-quarters of a percentage point hike in interest rates but signaling the pace of increases may soon slow.

With the cost of living crisis battering consumers and Joe Biden’s political fortunes, Fed officials have now imposed six rate rises in a row, the sharpest increases in interest rates since the 1980s, when inflation touched 14% and rates rose to nearly 20%.

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US mortgage rates hit 21-year high as Fed action weighs on housing sector

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Average interest rate on 30-year fixed-rate mortgage rose by 22 basis points to 7.16% last week

The average interest rate on the most popular US home loan rose to its highest level since 2001 as tightening financial conditions weigh on the housing sector, data from the Mortgage Bankers Association (MBA) showed on Wednesday.

The average contract rate on a 30-year fixed-rate mortgage rose by 22 basis points to 7.16% for the week ended October 21 while the MBA’s Market Composite Index, a measure of mortgage loan application volume, fell 1.7% from a week earlier. Mortgage application activity is at its slowest pace since 1997.

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For the love of cars: will steep gas prices stall Democrats’ midterm hopes?

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Economy in focus: America has a love affair with cars – but soaring prices are causing a rift. In the midwest, Adam Gabbatt asks voters what they think

The Henry Ford museum, in Dearborn, Michigan, is a tribute to America’s obsession with the motor vehicle.

The sprawling complex, set across 12 acres, is home to early examples of the Ford Model T, the mass-produced, affordable vehicle that set the US on the path of a car-dominant culture, as well as other era-defining vehicles right up to today.

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Apple shifts some iPhone 14 production from China to India

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Move taken against background of China’s Covid lockdowns and geopolitical tensions between Beijing and Washington

Apple has begun making iPhone 14s in India, as it moves some production away from China for the first time against a backdrop of Chinese Covid-19 pandemic lockdowns and geopolitical tensions between the US and the country’s communist government.

A production line in Chennai has begun operation, assembling the iPhone 14 for the domestic Indian market. The move, which marks the first time the company has assembled iPhones outside of China in the same year they were released, is part of a plan to disentangle its manufacturing operations from the Chinese state.

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