Category Archives: US economy

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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Fed raises interest rate by 0.75 percentage points as US seeks to rein in inflation

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Third outsized rate increase in a row as central bank struggles to fight runaway inflation, increasing the cost of everything

The Federal Reserve announced another sharp hike in interest rates on Wednesday as the central bank struggles to rein in runaway inflation.

The Fed raised its benchmark interest rate by 0.75 percentage points, the third such outsized rate increase in a row, bringing the Fed rate to 3%-3.25% and increasing the cost of everything from credit card debt and mortgages to company financing.

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Covid caused huge shortages in US labor market, study shows

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At least 500,000 people have permanently disappeared from the workforce, analysis says

Research into the lingering effects of Covid-19 on the US workforce has confirmed what anybody who has waited an extended time for a delivery – or been unable to get a restaurant table – already knows: the pandemic has caused massive shortages in the labor market.

On top of the quarter-million people of working age who have died from coronavirus, at least twice that number across all ages have permanently disappeared from the workforce, the analysis by the National Bureau of Economic Research shows.

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Dow plunges 1,000 points after Fed chief Powell warns of inflation ‘pain’

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US stock markets nosedive as Jerome Powell says at top bank summit the ‘overarching focus is to bring inflation back down’

US stock markets nosedived on Friday after Federal Reserve chair, Jerome Powell, warned of “pain” ahead as the central bank struggles to bring down inflation from a 40-year high.

Powell’s highly anticipated speech was more hawkish than had been expected, with the Fed chair pledging to do all he could to end rising prices. The Dow Jones Industrial Average lost just over 1,000 points, 3%, the S&P fell 3.3% and the Nasdaq dropped almost 4%.

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Fears of violence grow after FBI search of Trump’s Mar-a-Lago – live

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The suicide of a man who crashed his car into barricades outside the US Capitol over the weekend underscores the tense atmosphere the search of Mar-a-Lago created, Maya Yang reports:

A man drove into a barricade near the US Capitol in Washington DC on early Sunday morning, fired several shots into the air after his vehicle ignited, and then shot himself to death, according to police.

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Trump says he invoked fifth amendment in New York attorney general’s investigation: ‘I declined to answer’– live

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In lengthy statement, Trump says he refused to answer questions during deposition as part of inquiry into real estate dealings

The justice department has announced charges against a Tehran-based member of Iran’s Revolutionary Guards for attempting to hire someone in the United States to kill John Bolton, a national security adviser under Donald Trump.

According the department, 45-year-old Shahram Poursafi last year promised an unnamed person in the United States $300,000 to kill Bolton, probably as retaliation for Washington’s assassination of Qassem Suleimani in January 2020. The goal was apparently to have Bolton killed by the 3 January anniversary of Suleimani’s death in Baghdad, but the person Poursafi allegedly hired for the job was actually a confidential informant.

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Biden hails ‘most significant legislation to tackle climate crisis’ after Manchin says yes – live

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Joe Biden “was not involved” in negotiations over the newly announced Inflation Reduction Act, Joe Manchin has said, claiming credit instead for himself and his own aides.

In a press call Thursday morning that shed a little more light, but not very much, on how the bill came to be, the Democratic West Virginia senator said:

It was me and my staff. And then we worked with [Senate majority leader Chuck] Schumer’s staff. My staff was driving it. We wrote the bill. Schumer’s staff would look at it and we would negotiate, and we worked that through them.

President Biden was not involved.

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