Written by rjs, MarketWatch 666
News posted last week about economic effects related to the coronavirus 2019-nCoV (aka SARS-CoV-2), which produces COVID-19 disease, has been surveyed and some articles are summarized here. We cover the latest economic data, especially the prospects for an infrastructure bill, stimulus checks, government funding, the Fed, the latest employment data, housing market reports, mortgage delinquencies & forbearance, layoffs, lockdowns, and schools, as well as GDP. The bulk of the news is from the U.S., with a few more articles from overseas at the end. (Picture below is morning rush hour in downtown Chicago, 20 March 2020.) News items about epidemiology and other medical news for the virus are reported in a companion article.
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We have the usual scope of topics, with a few articles from around the world at the end:
Fed report warns of “vulnerabilities” in US financial system – The semi-annual Financial Stability Report, issued by the US Federal Reserve on Thursday, has warned that the rising debt of hedge funds, much of which is not recorded by regulatory authorities, poses growing risks for the stability of the financial system. Key aspects of the report were highlighted in an introductory statement by Fed governor Lael Brainard, who chairs the Fed’s committee on financial stability. She noted that “vulnerabilities associated with elevated risk appetite are rising.” The report said markets for short-term funding were now functioning normally, following the collapse of March 2020 and the turbulence of late February this year. However, “structural vulnerabilities at some nonbank financial institutions (NBFIs) could amplify shocks to the financial system in times of stress.” In her statement, Brainard said valuations across a range of assets had continued to rise from their elevated levels of last year, with equity prices setting new highs. Relative to expected future earnings they were “near the top of their historical distribution.” The appetite for risk had increased as the “meme stock” episode had demonstrated. This refers to the elevation of the share price earlier this year of the video games retailer GameStop, because of its promotion on Reddit and other social media platforms. This was despite the company’s business model experiencing significant difficulties. Brainard said corporate bond markets were also seeing “elevated risk appetite” with the difference between the interest rates on lower quality speculative-grade bonds and that of Treasury bonds among the lowest ever seen. “This combination of stretched valuations with very high levels of corporate indebtedness bear watching because of the potential to amplify the effects of a repricing event,” she said. In other words, a rapid downturn in one area of the market would be rapidly transmitted through the financial system. Brainard pointed to the failure in March of the family-owned hedge fund Archegos Capital, leveraged by banks to the tune of $50 billion, and the associated losses suffered by those banks. It highlights, she said, “the potential for nonbank financial institutions such as hedge funds and other leveraged investors to generate large losses in the financial system.” The Archegos event illustrated “the limited visibility into hedge fund exposures and serves as a reminder that available measures of hedge fund leverage may not be capturing important risks.” Reading between the lines, the meaning of this statement is that the Fed is concerned that there are more Archegos Capitals out there, but it has no real idea of where they are or the level of bank exposure to them. Brainard noted that the “potential for material distress at hedge funds to affect broader financial conditions underscores the importance of more granular, high-frequency disclosures.” The report pointed to numbers of areas of potential instability and how it could be transmitted. ” Under the heading “Funding Risk,” the report said that in 2020 the amount of liabilities “potentially vulnerable to runs, including those of nonbanks, is estimated to have increased by 13.6 percent to $17.7 trillion,” an amount equivalent to about 85 percent of GDP. It said “structural vulnerabilities” remain at NBFIs, including at money mutual funds and “regulatory agencies are exploring options for reforms that will address those vulnerabilities.” The admission that nothing is in place at present underscores one of the key features of the financial system. Every time the Fed or other regulatory bodies attempt to put a check on, or even exercise oversight over, some of the more speculative operations, market operators devise new ways to get around them.
Treasury Secretary Yellen warns interest rates may need to rise – US Treasury Secretary Janet Yellen has said the Federal Reserve may have to lift interest rates in order to head off inflation in the US economy. She made the comments in a pre-recorded statement for an event hosted by the Atlantic magazine as growing concerns have been raised over whether Biden’s spending plans will lead to an increase in inflationary pressures. “It may be that interest rates will have to rise somewhat to make sure that our economy doesn’t overheat, even though the additional spending is relatively small relative to the size of the economy,” Yellen said. “So it could cause some very moderate increase in interest rates to get that reallocation. But these are investments our economy needs to be competitive and to be productive.” Coming from a former Fed chief, Yellen’s comments were something of a departure from previous practice in which Treasury secretaries do not comment on Fed policies and the Fed refrains from commenting on the policies of the administration. Aware of the concerns in financial markets about the prospect of an interest rate rise, Yellen appeared to backtrack somewhat from her remarks in later comments in an interview at a CEO Council Summit held by the Wall Street Journal. In that forum, she said a lift in interest rates by the Fed was “not something I’m predicting or recommending.” “I don’t think there’s going to be an inflationary problem, but if there is, the Fed can be counted on to address it,” she stated. Asked about the position of the Biden administration on Yellen’s assessment, White House press secretary Jen Psaki told reporters the president agreed with the Treasury Secretary and the White House was keeping a close watch on prices. “We also take inflationary risks incredibly seriously, and our economic experts have conveyed that they think this would be temporary and that the benefits far outweigh the concern,” Psaki said. Inflation concerns have been voiced by former Treasury Secretary Lawrence Summers who has said the Biden administration’s spending measures risk setting off the kind of price rises seen in the 1970s. There is a degree of nervousness in financial markets that if inflation begins to rise, the Fed may be forced to increase rates. This would have an immediate adverse impact of Wall Street where money has been raked in hand over fist because of the massive support provided by the Fed – low rates combined with the injection of trillions of dollars via financial asset purchases since the market freeze of March 2020.
Recovery slower among low earners, racial minorities: Powell — The economic recovery from the COVID-19 pandemic has been slower for low earners and racial minorities, exacerbating inequality even as it gains steam, Federal Reserve Chairman Jerome Powell said Monday. “While the recovery is gathering strength, it has been slower for those in lower-paid jobs,” he said at a National Community Reinvestment Coalition event on the “just economy.” Among the top quarter of earners, just 6 percent were unemployed in February, he noted, while the figure was 20 percent among the lowest quarter. College-educated workers were also less likely to be laid off last year as the pandemic took hold by an 8-point margin, while Black and Hispanic prime-age workers were more likely to be laid off by a 6-point margin relative to their white counterparts. One of the areas that had the most significant level of economic disruption was child care. While 22 percent of all parents stopped working because of disruptions to in-person school or child care, the percentage rose to 36 percent among Black mothers and 30 percent among Hispanic mothers. Powell’s comments on Monday come as the recovery from the COVID-19 pandemic has begun to hit its stride. Gross domestic product growth in the first quarter came in at an annualized 6.4 percent, potentially setting up the strongest annual growth since the early 1980s. Although unemployment remains high, weekly jobless claims have dropped from record levels and economists are expecting a strong jobs report Friday. But the problem of income and racial inequality has been a central theme for President Biden, who has pushed initiatives to reduce child poverty, provide economic aid for low earners and close racial gaps. Powell noted that the Fed’s central mandate is to ensure a strong economy that would lift everyone, but pointed to fiscal and monetary tools that could ensure a more targeted response, such as strong supervision of racial equality laws and efforts to focus on community financial institutions that serve minority populations. Allowing deep-rooted inequalities to persist, he said, would have implications for the wider economy. “The Fed is focused on these long-standing disparities because they weigh on the productive capacity of our economy,” he said. “We will only reach our full potential when everyone can contribute to, and share in, the benefits of prosperity.”
Petition asking government for monthly $2,000 stimulus checks passes 2 million signatures – An online petition calling on Congress to deliver $2,000 monthly stimulus checks to Americans to help remedy the economic blow caused by the coronavirus pandemic has garnered more than 2 million signatures. The Change.org petition was started last year by a restaurant owner in Denver, Stephanie Bonin, who noted the many hardships her business and many others have faced as a consequence of lockdowns caused by the deadly outbreak. As the federal government has issued three rounds of stimulus checks over the last 15 months since the pandemic kicked off, Bonin argued that isn’t enough. “I’m calling on Congress to support families with a $2,000 payment for adults and a $1,000 payment for kids immediately, and continuing regular checks for the duration of the crisis,” the petition states. “It took nine months for Congress to send a stimulus check, and just moments to spend it. Another single check won’t solve our problems – people are just too far behind,” the petition says. “The best thing our government can do right now is send emergency money to the people on a monthly basis.” As of Monday, the petition had more than 2 million of its 3 million signature goal. The first round of stimulus checks was approved by Congress in March 2020 and included payments of up to $1,200, followed by payments of up to $600 in December. The third round was passed under President Biden with up to $1,400 paid to eligible Americans. In March, more than 20 Democratic senators signed a letter calling on President Biden to throw his support behind recurring stimulus payments, pointing out the $1,400 payment won’t hold people over for long. According to a Kaiser Family Foundation poll released in March, 37 percent of adults said they or another adult in their household have had trouble paying for basic expenses in the past three months. Three-fourths of those polled said Congress is not doing enough to help people who lost a job or income due to the pandemic.
Biden defends plan to raise taxes on the rich – President Biden on Monday defended his plan to raise taxes on wealthy Americans to pay for free preschool and community college and tax credits for middle- and low-income families, arguing his proposal would “balance” the economy and help the U.S. better compete with other nations. “The choice is about who the economy serves,” Biden said in remarks at a community college in Norfolk, Va. “Is it more important to shield millionaires from paying their fair share or is it more important than every child gets a real opportunity to succeed from an early age, and ease the burden on families?” Biden reiterated that he would not raise taxes on those making less than $400,000 and he said that his $1.8 trillion families plan would not add to the deficit “unlike the last gigantic tax cut which increased the deficit by $2 trillion.” “It’s about balancing the system and growing the economy,” Biden said. “Trickle-down economics has never worked. For too long we have had an economy that gives every break in the world to the folks who need it the least. It’s time to grow the economy from the bottom up and the middle out.” Biden’s proposal to raise taxes on corporations and wealthy Americans to pay for his infrastructure and families plans has come under hefty criticism from Republicans. Sen. Joe Manchin (D-W.Va.) has also voiced opposition to Biden’s proposal to raise the corporate tax rate from 21 percent to 28 percent. Biden used a sizeable portion of his remarks in Virginia rebutting the criticism, characterizing his families plan as a “once in a generation” investment in American families that will make the U.S. more competitive against other global economies. “We’re in a race,” Biden said. “It all starts with access to a good education.” Biden’s proposal calls for free preschool for all three- and four-year-olds, two years of tuition-free community college and tax credits for middle- and low-income families. The proposal would need to be passed by Congress and faces an uncertain fate in Washington as Biden also pushes for the passage of his $2.3 trillion infrastructure package. With extremely slim majorities in the House and Senate, Democrats would need to resort to budget reconciliation to pass any of Biden’s plans should the White House fail to attract Republican support. Doing so would require virtually every Democrat to vote in favor of a bill.
Biden pursues GOP infrastructure deal as anxious Democrats watch the clock – As President Joe Biden doubles down on seekingRepublican cooperation for an infrastructure package, some Democratic allies say he should be prepared to go it alone if a deal doesn’t materialize quickly.The White House wants to see counteroffers to Biden’s $2.25 trillion infrastructure plan by the middle of this month, and if progress isn’t being made by Memorial Day, officials will reassess their strategy of trying to build bipartisan support, said a person familiar with the negotiations.Some moderate Democrats insist on cutting a deal – and others worry that it would be a dead end that would burn valuable time.Republicans, who have floated a slimmer $568 billion package, say they wonder whether the White House is willing to limit a bill to narrower measures, like roads and bridges, while cutting out pieces they oppose, like elder care subsidies. Aides for members of Congress on both sides of the aisle also say they fear that the other side may not be negotiating in good faith.If Democrats unify behind a proposal, they could use a budget process to pass legislation through the Senate without Republican support, as they did with the $1.9 trillion Covid-19 relief package. But for now, they lack consensus to go that route. And with razor-thin majorities in both chambers, they can’t have any defections.Biden spoke Thursday by phone with Sen. Shelley Moore Capito, R-W. Va., who is playing point for her party on infrastructure. Both later sounded upbeat; Capito said it was a “constructive” discussion, and Biden described it as a “good conversation” and invited her to the White House.”Let’s decide what are they prepared to consider in terms of what constitutes infrastructure, how much of it, and then we can talk about how to pay for it if we get to the point that we actually have a real number,” Biden told reporters after the call. “If it’s like last time – and I don’t, I think she’s serious – but if, like last time, they come in with one-fourth or one-fifth of what I’m asking and say, ‘That’s a final offer,’ then it’s a no-go for me.”White House chief of staff Ron Klain said Sunday that Capito and several other Republicans would be invited to the White House this week.Sen. Bill Cassidy, R-La., a member of the Finance Committee, said he doubted that Democrats would be willing to compromise – unless they are forced to.”Do they have the votes? If they don’t have the votes, they’re serious about bipartisanship. If they have the votes, they’re not serious about bipartisanship,” he said. “That’s my presumption.”
The Biden Administration Proposes Far-Reaching Tax Overhaul – – President Biden recently announced his $1.8 trillion American Families Plan (AFP), the third step in his Build Back Better policy initiative. The announcement followed the previous releases of the proposed $2.3 trillion American Jobs Plan and the Made in America Tax Plan. These plans propose major investments in various domestic initiatives, such as expanded tax credits for families, offset with tax increases on high-income individual taxpayers and corporations. The AFP would reverse many of the provisions in 2017’s Tax Cuts and Jobs Act and other parts of the tax code that benefit higher-income taxpayers. These taxpayers could be hit by changes to the following:The plan proposes to return the tax rate for the top income bracket to Obama administration levels, going from the current 37% to 39.6%. It is not clear whether the income tax brackets will be adjusted. For 2021, the top tax rate begins at $523,601 for single taxpayers and $628,301 for married taxpayers filing jointly.For those with income of more than $1 million in a tax year, the AFP would tax long-term capital gains and qualified dividend income as ordinary income – in other words, at 39.6% (plus the 3.8% net investment income tax). Long-term capital gains currently are taxed at a maximum rate of 20% (effectively 23.8%, when combined with the net investment income tax), depending on taxable income and filing status. With state and local capital gains taxes, high-income individuals could face an overall capital gains tax rate that tops 50%. Net Investment Income Tax (NIIT) applies to net investment income to the extent that a taxpayer’s modified adjusted gross income (MAGI) exceeds $200,000 for single tax filers, $250,000 for joint filers and $125,000 for married taxpayers filing separately. If a taxpayer meets the applicable MAGI threshold and has net investment income, the amount of NIIT liability is 3.8% of the lesser of the amount by which the MAGI exceeds the threshold or the net investment income.The AFP proposes to broaden the NIIT by applying it to all types of income greater than $400,000, rather than only investment income.Under existing law, the income tax basis of an inherited asset is the asset’s fair market value at the time of the deceased’s death, not the deceased’s original cost for it. This is referred to as a “stepped-up basis.” As a result of this rule, an unrealized gain on appreciated assets can be avoided if a taxpayer holds the asset until death and the heir then sells the asset utilizing the increased basis.To reduce the incentive to hold appreciated assets until after death, the AFP eliminates the “stepped-up basis” for most assets. There are exceptions for the first $1 million of gain and the Biden administration has indicated that it would carve out exceptions for property donated to charities and family-owned businesses and farms.A “carried interest” is a hedge fund manager’s contractual right to a share of a partnership’s profits. Currently, it is taxable at the capital gains rate if certain conditions are satisfied. The Biden administration would tax carried interests at ordinary tax rates.Also known as Section 1031 exchanges, like-kind exchanges allow a taxpayer to defer the recognition of a gain on the exchange of real property held for use in a business or for investment if the property is exchanged solely for similar property. The AFP would end such deferrals for gains of more than $500,000. The American Rescue Plan Act (ARPA), passed in March 2021, temporarily increased the CTC from $2,000 to $3,000 for eligible taxpayers for each child age six through 17, with credits of $3,600 for each child under age six. It also makes the credit fully refundable in most cases.
Rural Democrats urge protections from tax increases for family farms – A group of House Democrats who represent rural communities are urging leaders in the chamber to ensure that family farms aren’t hurt by legislation based on President Biden’s proposed tax increases. The rural-district lawmakers are concerned about Biden’s proposal in his American Families Plan to tax capital gains at death. The White House has said that this proposal will include exemptions for family farms and businesses in certain circumstances, and the lawmakers want to make sure that such an exemption is included in legislation. “The repeal of stepped-up basis for capital gains and immediate taxation could especially hurt family farms, some of which have been in families for generations; therefore, we strongly urge you to provide full exemptions for these family farms and small businesses that are critical to our communities,” the lawmakers wrote in a letter Thursday to Speaker Nancy Pelosi (D-Calif.), House Majority Leader Steny Hoyer (D-Md.) and House Ways and Means Committee Chairman Richard Neal (D-Mass.). Thirteen lawmakers, led by Reps. Cindy Axne (D-Iowa) and Jim Costa (D-Calif.), signed the letter. The rural-area lawmakers aren’t the only group of Democrats who have been urging lawmakers to take into account issues of particular importance to their districts when crafting legislation based on Biden’s economic recovery plans; another group of lawmakers from high-tax states such as New York, New Jersey and California want legislation to include repeal of the cap on the state and local tax deduction. Democratic leaders will likely need to take lawmakers’ geographic-related interests into account when they craft legislation. They will need the support of nearly every Democratic lawmaker, given that Republicans are expected to oppose bills based on Biden’s plans and Democrats have narrow majorities in Congress. Biden last week released a $1.8 trillion proposal focused on child care, education and tax credits that benefit low- and middle-income households. He’s proposing to pay for the plan through tax increases on high-income households. One element of Biden’s proposed revenue raisers is to tax capital gains above $1 million at death. Currently, people can give investments to their heirs without the assets being taxed at their time of death, and when the heirs sell the assets, they don’t have to pay capital gains taxes on the value that the investments appreciated before they received them. The White House said that this proposal would help to prevent billions of dollars in investment income from escaping taxes. The administration said the proposal will include protections to prevent family farms and businesses from being taxed when passed down to heirs who continue to operate them. The Agriculture Department said in a statement last week that estimates show that more than 98 percent of estates with farms won’t owe any tax under Biden’s plan if the farm is passed down to a family member.
Weak US jobs reports sparks calls for elimination of pandemic aid –The surprisingly weak US jobs report Friday is being used to ramp up demands to eliminate pandemic-related social support measures in order to force workers back into unsafe workplaces. The US Labor Department reported a net of 266,000 new jobs in April, dramatically lower than the one million new jobs that were expected by economists. In fact, Goldman Sachs economists had expected a total of 1.3 million jobs in April. The Labor Department also revised downward its jobs total for March from 916,000 to 770,000. The unemployment rate, which had been expected to fall to 5.8 percent, instead edged upward to 6.1 percent. Nearly 500,000 filed for first-time unemployment benefits last week, still very high by historical standards. Overall, there are still more than 8.2 million fewer jobs than before the pandemic began. The largest engine of new job growth in April was again leisure and hospitality, 331,000. This category includes businesses such as bars, hotels and restaurants that tend to pay lower wages. Manufacturing employment was down 18,000, largely in the auto industry where chip shortages have forced the temporary shutdown of some factories. Retail jobs fell by 15,000, and health care jobs declined by 4,000. There were conflicting explanations for the dramatic fall off in new job creation under conditions where many pandemic restrictions have been eased or lifted. There were suggestions that it might be a statistical anomaly or that supply chain issues and worker shortages were a major factor. However, from corporate interests, there were shrill complaints over the lack of able-bodied workers willing to work for paltry wages amidst a continuing pandemic. This was accompanied by demands for the ending of COVID-19-related social support measures. On Thursday Senate Minority Leader Mitch McConnell blamed the Biden administration’s stimulus package that was enacted by Congress in March for acting as an incentive for people not to work. The bill extended expanded unemployment benefits, including $300 weekly additions to state unemployment benefits, and provided a one-time $1,400 stimulus check for most Americans. On Friday Republican Senator Marco Rubio tweeted: “I told you weeks ago that in Florida I hear from small business everyday that they can’t hire people because the government is paying them to not go back to work.” Representative Kevin Brady of Texas, the top Republican on the Ways and Means Committee, said the jobs report demonstrated that the Biden administration was “sabotaging our recovery.” He added, “The White House is also in denial that many businesses – both small and large – can’t find the workers they need.” Also on Friday the US Chamber of Commerce called for an immediate end to the $300 weekly unemployment benefit supplement. In a news release Neil Bradley, executive vice president and chief policy officer for the Chamber, said, “The disappointing jobs report makes it clear that paying people not to work is dampening what should be a stronger jobs market.” Already South Carolina and Montana have said they plan to end the federal supplement, and other Republican-controlled states have indicated they may do the same.
Pay a Living Wage or ‘Flip Your Own Damn Burgers’: Progressives Blast Right-Wing Narrative on Jobs – Pushing back on the right-wing narrative about the reason for real or perceived labor shortages in some markets nationwide, progressives on Friday told corporations that if they want to hire more people, they’ll need to start paying better wages.Soon after the Labor Department released its April jobs report, the U.S. Chamber of Congressblamed last month’s weak employment growth on the existence of a $300 weekly supplemental jobless benefit and began urging lawmakers to eliminate the federally enhanced unemployment payments that were extended through early September when congressional Democrats passed President Joe Biden’s American Rescue Plan.”No. We don’t need to end [the additional] $300 a week in emergency unemployment benefits that workers desperately need,” Sen. Bernie Sanders (I-Vt.) saidin response to the grumbles of the nation’s largest business lobbying group. “We need to end starvation wages in America.””If $300 a week is preventing employers from hiring low-wage workers there’s a simple solution,” Sanders added. “Raise your wages. Pay decent benefits.”According to the Chamber’s analysis, the extra $300 unemployment insurance (UI) benefit results in roughly one in four recipients taking home more pay than they earned working.In response to that claim, Sanders’ staff director Warren Gunnelssaid: “If one in four recipients are making more off unemployment than they did working, that’s not an indictment of $300 a week in UI benefits. It’s an indictment of corporations paying starvation wages.””Raise your wages and benefits or flip your own damn burgers and sweep your own damn floors,” Gunnels added. Other progressives like former labor secretary Robert Reich and Rep. Alexandria Ocasio-Cortez (D-N.Y.) also chimed in. This is not complicated. If you can’t afford to pay your employees a living wage, you do not have a viable business model. “We do not have a shortage of willing workers in this country,” Morris Pearl of the Patriotic Millionaires said in a Friday afternoon statement responding to the Chamber. “We have a shortage of employers who are willing to pay workers enough to live.”
Pfizer announces windfall profits as low-income countries denied vaccines – Five months after the United States first granted emergency use authorization to the first COVID-19 vaccine, the vaccination drive throughout the developing world is a disaster. Wealthy countries have received more than 87 percent of COVID-19 vaccines distributed worldwide, while the “low-income” former colonial countries have received less than 1 percent, according to the World Health Organization. In Africa, less than 1 percent of the population has received even a single dose of the vaccine. In India, the epicenter of the global pandemic, where crematoria are running nonstop, and people are dying in the streets, less than 10 percent of the population has received a single dose. Despite the global vaccination disaster, the vaccine rollout has been a bonanza for US drug maker Pfizer, which announced Tuesday it had beat its revenue forecast by 73 percent. By pricing the vaccine approximately 20 percent above the cost to develop and produce it, the company logged nearly a billion dollars in profits from the vaccine in the first quarter alone. Pfizer expects to sell $26 billion worth of vaccines this year, bringing in about $5 billion in profit. Pfizer’s stock price has surged nearly 50 percent since last year, while its German partner BioNTech went from a startup to a multibillion-dollar company in just months, generating billions of dollars in earnings for wealthy shareholders. The stock price of Pfizer’s competitor Moderna has more than quadrupled over the past 12 months, and its CEO Stephane Bancel is now worth nearly $5 billion. The vast enrichment of these private corporations and their shareholders is made possible through massive investments by governments, particularly that of the United States, which spent over $10 billion helping to develop the vaccines monetized by Pfizer and Moderna. The mRNA vaccines developed by these two companies are based on a key discovery of the National Institute of Health’s (NIH) Vaccine Research Center, which holds the patent for how the virus’s spike protein is stabilized in the vaccine. While several companies have licensed the NIH’s patent, Moderna makes use of the NIH discovery without paying any royalties. In other words, without the NIH’s patent, there would be no Pfizer and Moderna vaccines. Yet the US government has declined to use what scientists have called a vast amount of leverage over vaccine makers to ensure an equitable global distribution. “For NIH to not have ensured global access is a dereliction of their duty to protect the public health of the United States,”
Experts press Biden on travel strategy amid virus surge in India – The U.S. will impose travel restrictions on visitors from India starting Tuesday, underscoring how COVID-19 remains a huge threat around the world even as it starts to recede in the United States. The dichotomy raises a number of questions for the Biden administration on how to handle travel from a number of countries where COVID-19 cases are continuing to explode and where vaccinations are proceeding at a slower pace. Experts say the U.S. lacks a cohesive strategy on travel rules. While the restrictions on India are the only new ones being announced Tuesday, questions may be raised about other countries in Latin America, Asia and Africa. “I don’t understand the strategy right now. It’s not that the restrictions are wrong, but they are inconsistent,” said Leana Wen, a public health professor at George Washington University and former Baltimore health commissioner. “In light of the fact that the US has an increasing rate of vaccinations and the rest of the world will continue to have outbreaks, now is the time to have a consistent message of when travel restrictions will be applied.” The White House attributed the ban on most travel from India to high COVID-19 cases and multiple variants in the country. COVID-19 deaths topped 3,000 for the fourth consecutive day on Sunday in India. The outbreak in India has spilled into nearby countries like Nepal, where hospitals have run out of beds, Pakistan and Bangladesh. “If India is being added because of the stated reasons of rising infections and possible new variants, then why aren’t other countries that are also affected in that region? Otherwise, you have a policy with many holes and if it’s inconsistently applied then you might as well not have the policy at all,” Wen said. The airline industry has lobbied the administration to take a risk-based approach to travel restrictions and put countries on the list where the risk is high, but also to be transparent about what that criteria is and how it’s being used. “We think this is an area where we’d really like to see the US government lead. We’ve seen the administration achieve remarkable success in the vaccination roll out … now is the time to plan and for the US government to put forward a plan that is going to reopen borders in places where it makes sense and is safe,” said Sharon Pinkerton, Airlines for America (A4A) senior vice president of legislative and regulatory policy.Travel industry leaders, including A4A, the U.S. Chamber of Commerce and the U.S. Travel Association, called on Biden and British Prime Minister Boris Johnson to announce the full reopening of U.S.-U.K. travel in early June in a letter on Monday. The U.S. still also has travel restrictions on Brazil, China, Iran, South Africa and other places to prevent most noncitizens from entering the U.S. if they’ve traveled to those countries within two weeks.
Biden Urged to Stand ‘On the Side of Humanity’ and Back Waiver for Covid Vaccine Patents –The U.S. is facing sustained calls to end its opposition of a proposal to temporarily lift intellectual property rules for Covid-19 vaccines and related technology as soaring coronavirus cases ravage India and new reporting spotlights a debate within the Biden administration over whether to support the patent suspension effort to help tackle the global pandemic or prioritize Big Pharma’s interests.At issue, as the Washington Post reported Friday, is a proposal India and South Africa submitted to the World Trade Organization (WTO) last October to suspend Trade-Related Intellectual Property Rights (TRIPS) rules on Covid-19 vaccines and treatments to boost manufacturing capacity. It’s now cosponsored by 60 nations and backed by over 100 countries as well ashundreds of U.S. and international civil society organizations, former world world leaders and Nobel laureates, and some U.S. lawmakers.In addition to the U.S., other wealthy nations including the U.K. and Canada are blocking the proposal – which needs consensus to pass.The WTO’s TRIPS panel met Friday to discuss the proposal, and it’s now being revisedby its cosponsors.Asked Friday whether the U.S. would continue its opposition, White House press secretary Jen Psaki said the administration has not yet confirmed its stance and said the White House’s “overall objective is to provide as much supply to the global community and do that in a cost-effective manner.”According to the Post: “The debate has reignited decades-old tensions in global health, pitting such influential figures as Pope Francis, who backs the patent-waiver proposal, against philanthropist Bill Gates, who’s opposed. It has also challenged U.S. officials who have prioritized this nation’s coronavirus response but know that the virus’s continued spread and mutation overseas will eventually pose risks to Americans.” White House chief medial adviser Anthony S. Fauci and U.S. Trade Representative Katherine Tai discussed the proposal last week, the Post reported, with Fauci indicating support for it and Tai considering it. She indicated an openness last month when she told a virtual WTO conference that “we have to consider what modifications and reforms to our trade rules might be necessary.” She also got input on the matter from powerful philanthropist Bill Gates, the Postreported. Gates made clear Sunday that he’s opposed to lifting such patent protections.In addition, the Post reported, “other officials in the Commerce Department and the coronavirus task force warn that waiving the patents could backfire, including by handing intellectual property to international rivals. They also say that allowing new manufacturers to compete for scarce vaccine ingredients and expertise could hinder existing production, and that donating doses to countries in need would be more efficient.”
‘Cry No Tears for These Death Profiteers’: Pharma Stocks Plunge as Biden Backs Vaccine Patent Waiver –Yves here. I wish I could be enthusiastic about Biden saying he would support a waiver of Big Pharma Covid vaccine patents. After all, we’ve been pumping for this measure for some time, albeit mainly through the posts of Jomo Kwame Sundaram, who has written that the much of the Global South would not get vaccines until 2023 on the current schedule, and even then, in many cases, at higher prices than the Global North.However, if you look at various press stories on this plan, you’ll see two things. One is the abject falsehood that these supposedly backwards countries would have trouble making the vaccines, especially the novel (in terms of large scale use in humans) mRNA vaccines. Microbiology prof KLG debunked that via e-mail:It is complete and utter bullshit that, off the top of my head, India, Indonesia, possibly Singapore, Argentina, Chile, Brazil, South Africa, Canada, Australia, Japan, Korea, China, New Zealand, Mexico, Pakistan, Bangladesh, and Cuba cannot manufacture these vaccines. There are undoubtedly other countries that can do it, too. This is routine molecular biology and pharmaceutical manufacture, albeit on a large scale, not the biological equivalent of the Large Hadron Collider at CERN. All any of these people need are the instructions and help with components. Would it take a serious effort on their part? No more than here and Europe.The second issue is that getting the waivers looks like it will take an ungodly amount of time and may not happen. I wonder if there was a more expeditious US-only route, like requiring vaccine makers to produce a certain number at cost under the War Production Act … .or at least as an interim measure while the WTO process drags on? From the Wall Street Journal: Overriding objections from the pharmaceutical industry, U.S. Trade Representative Katherine Tai said the U.S. would support a proposal working its way through the World Trade Organization. Such a policy would waive the IP rights of vaccine makers to potentially enable companies in developing countries and others to manufacture their own versions of Covid-19 vaccines … .Pharmaceutical companies, however, oppose it, saying the waiver won’t provide the short-term results proponents think it will, partly because of the challenge of setting up complex new production facilities to manufacture the vaccines … ..Ms. Tai also warned that the talks at the WTO to approve a waiver policy will take time, given the consensus-based nature of the group, but that the U.S. will actively participate in negotiations … The current WTO agreement – the Agreement on Trade-Related Aspects of Intellectual Property Rights, or TRIPS – was introduced in 1995 upon the birth of the WTO itself, providing patent protection to technological innovations, including drugs and vaccines.
Federal judge overturns CDC’s eviction moratorium – The Justice Department is appealing a federal judge’s decision to vacate the Centers for Disease Control and Prevention’s temporary federal eviction moratorium, which had been extended multiple times since being enacted by the Trump administration last fall. The nationwide halt on most evictions due to the pandemic was seen as a temporary fix for millions of renters put at risk of losing their homes during the coronavirus pandemic.The CDC under the Biden administration had sought to extend the eviction moratorium through June 30. D.C. District Judge Dabney Friedrich ruled Wednesday on the side of the plaintiffs, who alleged that the CDC overstepped its authority by extending the eviction moratorium – which was first included in the March CARES Act passed by Congress – to all residential properties nationwide. “The pandemic has triggered difficult policy decisions that have had enormous real-world consequences. The nationwide eviction moratorium is one such decision,” Friedrich writes in an opinion. “It is the role of the political branches, and not the courts, to assess the merits of policy measures designed to combat the spread of disease, even during a global pandemic.” “The question for the Court is a narrow one: Does the Public Health Service Act grant the CDC the legal authority to impose a nationwide eviction moratorium? It does not.” Brian Boynton, acting assistant attorney general in charge of the DOJ’s civil division, said in a statement that the CDC’s eviction moratorium “protects many renters who cannot make their monthly payments due to job loss or health care expenses.” “Scientific evidence shows that evictions exacerbate the spread of COVID-19, which has already killed more than half a million Americans, and the harm to the public that would result from unchecked evictions cannot be undone,” he added. “The department has already filed a notice of appeal of the decision and intends to seek an emergency stay of the order pending appeal.”
Biden Administration Moves to Speed Aid to Renters – – – Two days after a federal judge struck down a national moratorium on evictions, the Biden administration said on Friday that it would accelerate the distribution of vast sums of rental aid that state and local governments have been slow to spend.The Treasury Department issued new rules meant to make it easier for tenants to gain access to the $46.5 billion in aid. They simplify applications, cover an expanded list of costs like moving expenses and hotel stays, and require programs to help tenants even if their landlords refuse to participate. Housing advocates praised the changes, which include an expansion of legal aid to tenants and a promise of advice to localities struggling to create the programs, which are intended to avert evictions caused by the economic shocks from the pandemic. But with about 400 state and local governments operating programs with varying degrees of urgency, the immediate effect of the changes is unclear. Some states, including New York and Florida, have not even begun to accept applications.The sums at stake rival the annual budget of the federal housing department. Congress approved $25 billion of emergency assistance in December and an additional $21.5 billion in March. But only a sliver of that money has reached landlords or tenants so far. New York has $800 million to spend just from the December allocation, and Florida has $871 million. California, with $1.5 billion to spend, has been accepting applications since March. But it has approved awards of only about $72 million, or 5 percent of its funds, and paid out less than $5 million.The Emergency Rental Assistance Program allocates money to states and to cities and counties with populations of at least 200,000 if they chose to run their own programs. Some have simply been slow to act: legislatures in New York and South Carolina did not authorize their programs until April.Others started quickly but hit obstacles: software glitches that made applications impossible to process or demands for documentation, like proof of income, that tenants found hard to produce. Many of the most disadvantaged tenants do not know the program exists.Some landlords have declined to participate, betting they have more to gain by forcing out tenants in arrears and attracting those better able to pay.
White House raises refugee cap to 62,500 – The White House on Monday lifted the refugee cap to 62,500, ending a dizzying policy reversal by sticking with President Biden’s original plan to dramatically increase the number of refugees that can be admitted into the U.S. “Today, I am revising the United States’ annual refugee admissions cap to 62,500 for this fiscal year,” Biden said in a statement. “This erases the historically low number set by the previous administration of 15,000, which did not reflect America’s values as a nation that welcomes and supports refugees.” “It is important to take this action today to remove any lingering doubt in the minds of refugees around the world who have suffered so much, and who are anxiously waiting for their new lives to begin,” Biden added. The administration announced in a separate memorandum that of the 62,500 slots being made available, 22,000 would be allocated to refugees coming from Africa, 13,000 to those from the Middle East and South Asia, 6,000 to those from East Asia, 4,000 to those from Europe and Central Asia, 5,000 to those from Latin America and the Caribbean and the remaining 12,500 would remain unallocated. The president acknowledged that the country would not hit the cap this year, cautioning that it would take time to rebuild the infrastructure needed to take in and support tens of thousands of refugees as the U.S. has traditionally done. He expressed a commitment to setting the cap at 125,000 refugees during his first full fiscal year in office. “The sad truth is that we will not achieve 62,500 admissions this year,” he wrote in the announcement. “We are working quickly to undo the damage of the last four years. It will take some time, but that work is already underway.” The administration in February called for raising the refugee cap to 125,000 by the end of Biden’s first year in office – a target that would require allowing 62,500 refugees fleeing war, persecution and natural disasters to enter the United States this fiscal year. The high figure was set to be a dramatic turnaround from the Trump administration, whose 15,000 cap during its last three years in office was an all-time low. But the Biden administration later hedged those figures as it was being hammered by Republicans for the influx of migrants at the southern border. In an April letter to the State Department, the White House said it would keep the 15,000 limit set under former President Trump. After a day of backlash, however, press secretary Jen Psaki walked that back slightly, suggesting only that Biden would be unable to meet his original goal and that the 15,000 was not final.
Biden Administration Reportedly Needs Billions In Extra Funding To Shelter Migrant Kids – With tens of thousands of unaccompanied migrant children staying in U.S. shelters, including many temporary ones set up in recent months, federal officials could need over a billion dollars to cover the mounting costs, according to documents published Friday by the New York Times. The Department of Health and Human Services has rushed to accommodate a surge in unaccompanied minors by opening shelters in convention centers and other unusual places, costing around $775 per child per day, the Washington Postreported last month. HHS was given permission this week to transfer $850 million from other parts of its budget to the unaccompanied minors program, and it could transfer another $847 million over the next few weeks, according to the document obtained by the Times. This probably will not be enough: The HHS unit charged with housing unaccompanied migrant children expects a budget shortfall of more than $4 billion by the end of this fiscal year, the internal document projected. The White House and HHS did not immediately respond to a request for comment. 22,194. That’s how many unaccompanied minors were in U.S. custody as of Thursday, roughly 97% of whom are staying in HHS shelters, according to federal figures. More than 600 children remain in Border Patrol Record numbers of children have crossed the U.S.-Mexico border without their parents this year, overwhelming federal resources and leaving many children in crowded conditions. HHS is normally supposed to shelter unaccompanied minors until the federal government can track down parents or other U.S.-based sponsors, but HHS initially didn’t have enough beds for all of these children, so thousands were stuck waiting in cramped, makeshift Border Patrol tents until shelter spaces opened up. As a result, HHS quickly ramped up its capacity by opening temporary shelters, allowing the Border Patrol stations to largely empty out but imposing a massive burden on the federal shelter system.
Algorithm Manipulation is the Only Thing Keeping Mainstream Media Alive -by Caitlin Johnstone – The emergence of the internet was met with hope and enthusiasm by people who understood that the plutocrat-controlled mainstream media were manipulating public opinion to manufacture consent for the status quo. The democratization of information-sharing was going to give rise to a public consciousness that is emancipated from the domination of plutocratic narrative control, thereby opening up the possibility of revolutionary change to our society’s corrupt systems. But it never happened. Internet use has become commonplace around the world and humanity is able to network and share information like never before, yet we remain firmly under the thumb of the same power structures we’ve been ruled by for generations, both politically and psychologically. Even the dominant media institutions are somehow still the same. So what went wrong? Nobody’s buying newspapers anymore, and the audiences for television and radio are dwindling. How is it possible that those same imperialist oligarchic institutions are still controlling the way most people think about their world? The answer is algorithm manipulation. Here’s @YouTube‘s CEO openly admitting to:
1) Ranking corporate news higher in YT’s algorithim
2)Suppressing independent news/politics channels
3)Suppressing people creating content “from their basement” (THE ORIGINAL PURPOSE of YT)
This is scandaloushttps://t.co/B8G2AYvBul
Last month a very informative interview saw the CEO of YouTube, which is owned by Google, candidly discussing the way the platform uses algorithms to elevate mainstream news outlets and suppress independent content. At the World Economic Forum’s 2021 Global Technology Governance Summit, YouTube CEO Susan Wojcicki told Atlantic CEO Nicholas Thompson that while the platform still allows arts and entertainment videos an equal shot at going viral and getting lots of views and subscribers, on important areas like news media it artificially elevates “authoritative sources”. “What we’ve done is really fine-tune our algorithms to be able to make sure that we are still giving the new creators the ability to be found when it comes to music or humor or something funny,” Wojcicki said. “But when we’re dealing with sensitive areas, we really need to take a different approach.””When we deal with information, we want to make sure that the sources that we’re recommending are authoritative news, medical science, et cetera. And we also have created a category of more borderline content where sometimes we’ll see people looking at content that’s lower quality and borderline. And so we want to be careful about not over-recommending that. So that’s a content that stays on the platform but is not something that we’re going to recommend. And so our algorithms have definitely evolved in terms of handling all these different content types.”
“Content Modification” – Facebook’s New Campaign Should Have Free Speech Advocates Freaking Out – Jonathan Turley – In 1964, Stanley Kubrick released a dark comedy classic titled “Dr. Strangelove or: How I Learned to Stop Worrying and Love the Bomb.” The title captured the absurdity of getting people to embrace the concept of weapons of mass destruction. The movie came to mind recently with the public campaign of Facebook calling for people to change her attitudes about the Internet and rethink issues like “content modification” – the new Orwellian term for censorship.The commercials show people like “Joshan” who says that he was born in 1996 and grew up with the internet.” Joshan mocks how much computers have changed and then asks why our regulations on privacy and censorship cannot evolve as much as our technology. The ads are clearly directed at younger users who may be more willing to accept censorship than their parents who hopelessly cling to old-fashioned notions of free speech. Facebook knows that it cannot exercise more control over content unless it can get people to stop worrying and love the censor.There was a time when this would have been viewed as chilling: a corporate giant running commercials to get people to support new regulations impacting basic values like free speech and privacy. After all, Joshan shows of his first computer was a “giant behemoth of a machine” but that was before he understood “the blending of the real world and the internet world.”The Facebook campaign is chilling in its reference to “privacy” and “content modification” given the current controversies surrounding Big Tech. On one level, the commercial simply calls for rethinking regulatory controls after 25 years. However, the source of the campaign is a company which has been widely accused of rolling back on core values like free speech. Big Tech corporations are exercising increasing levels of control over what people write or read on the Internet. While these companies enjoy immunity from many lawsuits based on the notion of being neutral communication platforms (akin to telephone companies), they now censor ideas deemed misleading or dangerous on subjects ranging from climate denial to transgender criticism to election fraud.Moreover, Facebook knows that there is ample support for increasing censorship and speech regulation in Congress and around the world. Free speech is under attack and losing ground – and Facebook knows it.
PPP funding poised to dry up – Paycheck Protection Program funding is all but exhausted. The Small Business Administration said late Tuesday that the program has about $8 billion remaining, with those funds reserved for community development financial institutions, minority depository institutions and other mission-oriented lenders. Another $6 billion of funding has been reserved to address issues with unresolved hold codes. The agency said it would continue funding businesses impacted by the pandemic through its $28.6 billion Restaurant Revitalization Fund and the $16 billion Shuttered Venue Operators Grants program. The Economic Injury Disaster Loan program also remains open. The SBA’s regular lending programs, including 7(a) and 504, have seen an uptick in activity in recent weeks. Through April 30, the 7(a) program reported total volume of $13.5 billion for the 2021 fiscal year, up 5% from a year earlier. “SBA is committed to delivering economic aid through the many COVID relief programs it is currently administering and beyond,” the agency said in a Wednesday release. Congress revived PPP lending with a $284 billion appropriation as part of a stimulus law enacted late last year. The program’s expiration date was extended from March 31 to May 31 earlier this year, but lawmakers did not include additional funding. Sen. Ben Cardin, D-Md., sponsored legislation last month intended to direct more PPP loans to farmers, ranchers and self-employed workers, but that proposal also lacked additional funding. Consumer Bankers Association CEO Richard Hunt said in a press release Tuesday that the PPP was a “herculean effort” that “saved millions of jobs and supported struggling communities when the needed it the most.” The focus now should shift to the PPP forgiveness process, Hunt said. Through May 2, the SBA reported approving 10.8 million PPP loans for $780.4 billion, including $258.2 billion approved since the program reopened in January. Through April 25, the agency reported forgiving 2.9 million loans for $242.1 billion.
Traditional SBA lending on upswing as PPP’s days appear numbered -Merchants Bancorp in Carmel, Ind., is back on track with Small Business Administration lending after the pandemic dealt its program several hard blows. The $9.7 billion-asset Merchants had just begun to establish itself as an SBA lender early last year when fallout from government shutdown orders decimated its nascent business. Carefully developed relationships pulled back and lending opportunities dried up. “It was Armageddon, chaos, a lot of confusion,” Jeff Scott, the company’s SBA group president, said in a recent interview. “We lost about 100% of the pipeline we’d originated.” A year later, Merchants has rebounded. Since resuming traditional SBA lending in June, Merchants has generated $3 million in revenue from selling the guaranteed portions of its loans, with more than half coming in the first quarter. The company also made $94 million of Paycheck Protection Program loans last year as it waiting for the economy to recover. Merchants’ experience is playing out on a wider scale. Last year, once PPP got up and running, lending under SBA’s regular 7(a) program slowed, even after Congress authorized enhancements to make it more attractive. Regular 7(a) lending totaled $22.6 billion in fiscal 2020, the lowest level in six years. As PPP enters what will likely be its final month, a large number of lenders are looking to make more traditional SBA loans. Bankers said demand for 7(a) and 504 loans is up sharply, spurred by enhancements embedded in the federal government’s stimulus efforts. Guarantees for 7(a) loans were increased from 75% to 90%. User fees for 7(a) and 504 loans have been waived and the SBA has been making several months of loan payments for borrowers in both programs. Through April 23, 7(a) originations were up 9% from a year earlier and 1% from the same period in 2019, totaling $12.8 billion. Originations of 504 loans were up 22% from a year earlier to $4.1 billion. The 7(a) program enjoyed its best two weeks of 2021 between April 9 and April 23. More big weeks are likely to follow as the Paycheck Protection Program expires, said Tony Wilkinson, president and CEO of the National Association of Government Guaranteed Lenders.
Banks resume risk-taking in consumer lending -After a year of pandemic-induced caution in consumer lending, bankers are starting to reacquaint themselves with risk. Lending standards have not yet recovered from the massive tightening in 2020, and banks remain somewhat hesitant about lending to consumers with lower credit scores. But a recent Federal Reserve survey suggests some normalization in underwriting as vaccinations and fiscal stimulus help fuel an economic rebound. Many U.S. consumers have emerged from the pandemic’s darkest days in better financial shape than they were before. “Consumers are flush with cash, and they’ve been paying down debt,” said Piper Sandler analyst Scott Siefers. “That confluence of factors has made banks much more tolerant of taking on risk again.” Standards for credit card and auto loans generally remained more stringent than they were before the pandemic, according to the Federal Reserve’s April survey of senior bank loan officers. But those standards did loosen in the first quarter, the survey found, continuing a thaw that began late last year. Some banks reduced the minimum credit score required for credit cards and auto loans, and some bumped up borrowing limits on card accounts, according to the survey. In one sign of a return to greater normalcy, 14 banks told the Fed that they had eased their standards for credit card applications, while only one had tightened its criteria. Most banks responded that they kept their standards basically unchanged. A similar trend played out with auto loan applications. Only one bank tightened its standards for approving new borrowers, a sharp reversal from the extreme stringency of the pandemic’s early days. “It’s a normal migration,” said John Hecht, a Jefferies analyst. “There doesn’t seem anything out of whack or anything unusual about the fact that lenders are loosening now based upon what’s going on in the world.” The trends found by the Fed are not surprising and should continue as long as the economic recovery stays on track, agreed Megan Fox, an analyst at Moody’s Investors Service. Banks built up hefty reserve cushions early in the pandemic in case they suffered losses on loans. But massive amounts of fiscal support have helped ensure their consumer loan books continue to perform, she said.
Goldman Orders Employees To Report Back To The Office In June –A week ago, we reported that JP Morgan had given its employees their final notice that working-from-home had finally come to an end, and that they should prepare to report back to the office later this month.Not to be outdone, the top brass at Goldman Sachs, already well aware of CEO David Solomon’s feelings about remote work, have reportedly just informed their employees that they should prepare to return to the office next month, with front-office staffers in the investment bank set to return by mid-June.The investment bank is planning to tell staff that they should be prepared by mid-June to work from offices again, according to people with knowledge of the matter. The move follows a mandate last week from JPMorgan Chase & Co. chief Jamie Dimon, seeking to return his workforce in rotations from early July. Vanguard Group, with about 17,300 employees, said it’s planning a hybrid model for most of its staff.Goldman Chief Executive Officer David Solomon joins Dimon in counting on an expanding vaccination drive to hasten the revival of pre-pandemic routines in an industry where legions have spent 14 months working remotely. The duo has been at the forefront in sketching out the most pressing timelines to refill towers, moves that are likely to put pressure on other firms in finance and beyond.And Goldman likely won’t be the last US investment bank or consulting firm to summon employees back to the office, according to a recent survey cited by Bloomberg.An Accenture Plc survey of 400 North American financial-services executives found that almost 80% prefer that workers spend four to five days in the office when the pandemic is over. Such plans could face resistance from the ranks. Many employees want to hang on to flexible schedules after proving they could stay productive while working from home, according to Accenture. Especially now that NYC plans to “fully reopen” by July 1, with the subway to return to 24/7 service in a few weeks.
Fed Survey: Banks reported Eased Standards, Increased Demand for Residential Real Estate Loans – From the Federal Reserve: The April 2021 Senior Loan Officer Opinion Survey on Bank Lending Practices Regarding loans to businesses, respondents to the April survey indicated that, on balance, they eased their standards on commercial and industrial (C&I) loans to firms of all sizes over the first quarter. Banks reported weaker demand, on net, for C&I loans to large and middle-market firms, and demand for C&I loans from small firms remained basically unchanged. Standards on commercial real estate (CRE) loans secured by nonfarm nonresidential properties remained basically unchanged, while banks tightened standards on construction and land development loans and eased standards on multifamily loans. Banks reported stronger demand for construction and land development and multifamily loans and reported weaker demand for nonfarm nonresidential loans. For loans to households, banks eased standards across most categories of residential real estate (RRE) loans, on net, and reported stronger demand for most types of RRE loans over the first quarter. Banks also eased standards across all three consumer loan categories – credit card loans, auto loans, and other consumer loans. Meanwhile, demand for credit card and other consumer loans remained basically unchanged, and demand for auto loans moderately strengthened. This graph on Residnetial Real Estate lending is from the Senior Loan Officer Survey Charts. This shows that banks have eased standards (tightened for subprime), and that there is increased demand for RRE loans.
Banks See Rising Demand for Jumbo Mortgages as Broader Credit Market Stabilizes | ABA Banking Journal –Rising home prices in many U.S. markets appear to have pushed up demand for – and banks’ offering of – jumbo mortgage loans, according to the Federal Reserve’s senior loan officer surveyreleased today. Meanwhile, the market for commercial and industrial and commercial real estate loans continued to stabilize as the economic outlook improved – although banks’ standards were still tighter on net for both business and personal loans than they were compared to the end of 2019, even for investment-grade or prime borrowers.
- Mortgages. Almost all banks kept standards unchanged for conforming and government mortgage loans in the first quarter, with just 5% of banks reporting easing standards in these categories. However, with housing prices spiking across the country in the first quarter, 19% eased standards for Qualified Mortgage-designated jumbo loans, 18% eased standards on non-QM jumbos and 16% eased on non-jumbo, non-conforming QMs. After demand for mortgages cooled in Q4 on the heels of a Federal Housing Finance Agency refinance fee, double-digit shares of banks on net saw growing demand for jumbo loans. One in six banks eased standards on home equity lines of credit.
- C&I. A substantially larger share of banks reported easing standards for business loans, reversing the trend seen in the final quarter of 2020. On net, 15% of banks eased terms for large and midsize firms, while 13% eased standards for small businesses. More than three-quarters kept standards unchanged. Banks that eased standards cited more aggressive bank and nonbank competition and the improving economic outlook as the most important reasons. C&I loan demand was mixed, with four in 10 banks reporting unchanged demand and the remainder split between seeing more or less demand – but the share reporting weaker demand declined from the prior quarter. Banks seeing stronger C&I demand said the most important factors were growing client M&A and inventory financing needs.
- CRE. The CRE market continued to stabilize in Q1, with roughly three-quarters of banks keeping standards unchanged for construction and land development loans and multifamily CRE loans. On net, 9% of banks saw stronger demand for construction and land development loans and 17% saw stronger demand for multifamily loans, while a net 10% saw weaker demand for nonfarm CRE loans.
Personal loans. The late 2020 trend in easing standards for consumer credit accelerated, with 27% of banks on net easing standards on credit card loans, 18% on net easing standards on auto loans and 17% reporting eased standards on other consumer loan types. The Q3 pattern of eased standards for auto loans also continued. Demand was mixed for credit cards and was moderately stronger for car loans.
MBA Survey: “Share of Mortgage Loans in Forbearance Slightly Decreases to 4.47%” -From the MBA: Share of Mortgage Loans in Forbearance Slightly Decreases to 4.47%” The Mortgage Bankers Association’s (MBA) latest Forbearance and Call Volume Survey revealed that the total number of loans now in forbearance decreased by 2 basis points from 4.49% of servicers’ portfolio volume in the prior week to 4.47% as of April 25, 2021. According to MBA’s estimate, 2.23 million homeowners are in forbearance plans. The share of Fannie Mae and Freddie Mac loans in forbearance decreased 2 points to 2.42%. Ginnie Mae loans in forbearance decreased 7 basis points to 6.02%, while the forbearance share for portfolio loans and private-label securities (PLS) increased by 13 basis points to 8.55%. The percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased 2 basis points to 4.70%, and the percentage of loans in forbearance for depository servicers also declined 2 basis points to 4.62%. “The share of loans in forbearance decreased for the ninth straight week, dropping by 2 basis points. The rate of exits has slowed the past two weeks, with this week’s exit rate reaching the lowest since February,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “The increase in the forbearance share for portfolio and PLS loans highlights both the ongoing buyouts of delinquent loans from Ginnie Mae pools as well as an increased forbearance share for other loans that are not federally backed.” Added Fratantoni, “Job market and housing market data remain strong. We expect that further gains in hiring will help to support many homeowners as they exit forbearance in the months ahead.” This graph shows the percent of portfolio in forbearance by investor type over time. Most of the increase was in late March and early April, and has trended down since then. The MBA notes: “Total weekly forbearance requests as a percent of servicing portfolio volume (#) decreased relative to the prior week: from 0.06% to 0.05%.” This graph shows the percent of portfolio in forbearance by investor type over time. Most of the increase was in late March and early April, and has trended down since then. The MBA notes: “Total weekly forbearance requests as a percent of servicing portfolio volume (#) decreased relative to the prior week: from 0.06% to 0.05%.”
Black Knight: Number of Homeowners in COVID-19-Related Forbearance Plans Decreased –Note: Both Black Knight and the MBA (Mortgage Bankers Association) are putting out weekly estimates of mortgages in forbearance. This data is as of May 4th. From Black Knight: Forbearance Volumes Fall by More Than 100K: May continued the strong trend of early forbearance improvements seen each month – the first week of the month saw volumes fall by 105,000 (-4.5%). Declines were seen across the board, with GSE forbearance volumes falling by 39,000 (-5.3%), FHA/VA plan volumes improving by 44,000 (-4.7%) and PLS/portfolio forbearances declining by 22,000 (-3.4%) on the week.As of May 4, just over 2.2 million (4.2% of) homeowners remain in COVID-19 related forbearance plans, including 2.5% of GSE, 7.4% of FHA/VA and 4.8% of portfolio/PLS loans. Some 73,000 plans are still listed with April 2021 expirations, suggesting opportunity may still remain in coming days for additional moderate improvements to be made. Another 350,000 plans are set to be reviewed for extension/removal in May. That number climbs to nearly 900,000 in June, the final quarterly review before early forbearance entrants begin to reach their 18-month plan expirations later this year.
Black Knight Mortgage Monitor for March — Black Knight released their Mortgage Monitor report for March yesterday. According to Black Knight, 5.02% of mortgages were delinquent in March, down from 6.00% of mortgages in February, and up from 3.39% in March 2020. Black Knight also reported that 0.30% of mortgages were in the foreclosure process, down from 0.42% a year ago.This gives a total of 5.44% delinquent or in foreclosure. Press Release: Inflow of New Mortgage Delinquencies Drops to Record Low in March; April Payment Data Suggests Further Improvement Likely:In light of March’s 16.4% decline in delinquencies – as reported in Black Knight’s First Look at the month’s data – this month’s report drills deeper into what that may mean for the market. Not only did March see the largest single-month improvement in delinquencies in 11 years, but all indications suggest more is yet to come,” said Graboske. “Several factors contributed to particularly strong mortgage performance in March, including the distribution of 159 million stimulus payments totaling more than $376 billion, broader economic improvement leading to nearly a million new jobs and 1.2 million forbearance plans reviewed for extension or removal, resulting in an 11% decline in plan volumes in the last 30 days. As many early forbearance plan adopters shifted to post-forbearance waterfalls to get back to performing on their mortgage payments, inflow has continued to steadily improve as well. And, of the 7.1 million homeowners who have been in COVID-19 forbearance at one point or another, performance among those who have left plans has generally been strong.”Some other key metrics also point to a robust recovery under way. Despite mortgage delinquencies tending to trend seasonally upward starting in April, our McDash Flash daily performance dataset instead shows strong early payment activity for the month. Through April 23, 91.6% of mortgage holders had made their monthly payments, up from 91% in March and the largest share for any month since the onset of the pandemic. That said, while overall sentiment for an economic recovery in 2021 remains robust, mortgage performance is expected to run into seasonal headwinds for most of the remainder of the year, which could marginally dampen overall improvement rates. Black Knight will continue to monitor the situation as we move forward.”Here is a graph from the Mortgage Monitor that shows Credit Scores of rate locks. From Black Knight:Interesting trends are being seen among credit scores of both purchase and refinance rate locks in recent months
After seeing credit scores among both purchases and refinances hit all-time highs in 2020,credits scores specifically among refinances have begun to wain early this year
This type of behavior is typical in a rising rate environment as high credit score borrowers tend to be the first to jump in and refinance when rates fall and the first to exit the market as rates begin to rise
The average credit score among rate/term refinances is down 13 points year to date, while the average among cash out refis is down a more modest 8 points
At the same time, credit quality among purchase loans continues to remain strong with the average credit score of purchase locks up 3 points through March 2021 from 2020’s already record highs
MBA: “Mortgage Delinquencies Decrease in the First Quarter of 2021” –From the MBA: Mortgage Delinquencies Decrease in the First Quarter of 2021 The delinquency rate for mortgage loans on one-to-four-unit residential properties decreased to a seasonally adjusted rate of 6.38 percent of all loans outstanding at the end of the first quarter of 2021, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey. For the purposes of the survey, MBA asks servicers to report loans in forbearance as delinquent if the payment was not made based on the original terms of the mortgage. The delinquency rate was down 35 basis points from the fourth quarter of 2020, and up 202 basis points from one year ago. “Mortgage delinquency rates continued to decrease in the first quarter of 2021, as a rebounding job market and stimulus checks helped borrowers stay current on their mortgage payments,” said Marina Walsh, MBA’s Vice President of Industry Analysis. “Mortgage delinquencies track closely to the U.S. unemployment rate, and with unemployment dropping from last year’s spike, many households appear to be doing better.” Walsh noted that in the history of MBA’s National Delinquency Survey, there has never been such a substantial decline in the delinquency rate over such a short period of time. The mortgage delinquency rate peaked at 8.22 percent in the second quarter of 2020 and within three quarters has dropped by 184 basis points to 6.38 percent. In addition, this quarter’s earliest stage delinquencies – the 30-day and 60-day delinquencies combined – dropped to the lowest levels since the inception of the survey in 1979. This graph shows the percent of loans delinquent by days past due. Overall delinquencies decreased in Q1. The decrease was in 30 and 60 day buckets, and in foreclosure. 90 delinquencies increased slightly (mostly loans in forbearance). From the MBA: Compared to last quarter, the seasonally adjusted mortgage delinquency rate decreased for all loans outstanding. By stage, the 30-day delinquency rate decreased 32 basis points to 1.46 percent, the lowest rate since the survey began in 1979. The 60-day delinquency rate decreased 10 basis points to 0.67 percent, the lowest rate since the second quarter of 2000. The 90-day delinquency bucket increased 7 basis points to 4.25 percent. The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure. The percentage of loans on which foreclosure actions were started in the first quarter rose by 1 basis point to 0.04 percent. The percentage of loans in the foreclosure process at the end of the first quarter was 0.54 percent, down 2 basis points from the fourth quarter of 2020 and 19 basis points from one year ago. This is the lowest foreclosure inventory rate since the first quarter of 1982. This sharp increase last year in the 90-day bucket was due to loans in forbearance (included as delinquent, but not reported to the credit bureaus). The percent of loans in the foreclosure process declined further, and was at the lowest level since 1982.
CoreLogic: House Prices up 11.3% Year-over-year in March – Notes: This CoreLogic House Price Index is a three month weighted average and is not seasonally adjusted (NSA). From CoreLogic: Millennials Propel Home Buying: Strong Demand and Short Supply Push US Home Prices Higher in March, CoreLogic Reports CoreLogic … today released the CoreLogic Home Price Index (HPI) and HPI Forecast for March 2021.As consumer confidence rebounds and the job market picks back up, the 2021 spring homebuying season is on track to outpace trends seen in 2019 and 2018. Millennials lead the homebuying charge with older millennials seeking move-up purchases and younger millennials entering peak homebuying years. As we look towards the second half of the year, further erosion of affordability may dampen purchase demand as prospective buyers continue to compete for the severely limited supply of for-sale homes. A pick-up in construction and an increase in for-sale listings as more people get vaccinated may help moderate surging home price growth.”Despite the severe slowdown last year, the 2021 spring homebuying season is trending strong – reflecting the many positive signs of economic recovery,” said Frank Martell, president and CEO of CoreLogic. “With prospective buyers continuing to be motivated by historically low mortgage rates, we anticipate sustained demand in the summer and early fall.”…Nationally, home prices increased 11.3% in March 2021, compared with March 2020. On a month-over-month basis, home prices increased by 2% compared to February 2021.”Lower-priced homes are in big demand and short supply, driving up prices faster compared to their more expensive counterparts,” said Dr. Frank Nothaft, chief economist at CoreLogic. “First-time buyers seeking a starter home priced 25% or more below the local-area median saw prices jump 15.1% during the past year, compared with the overall 11.3% gain in our national index.”
Goldman on Housing: Double-digit price gains in 2021 and 2022 – A few brief excerpts from a Goldman Sachs research note on housing: Strong demand for housing looks sustainable. Even before the pandemic, demographic tailwinds and historically-low mortgage rates had pushed demand to high levels. … consumer surveys indicate that household buying intentions are now the highest in 20 years. … mortgage lending standards have remained fairly tight. With demographic trends still strong, mortgage rates very low, housing affordability still high, and household wealth as a share of income at the highest level in US history, demand should remain strong.The supply picture offers no quick fixes to the shortage of available homes … The resulting picture is one of a persistent supply-demand imbalance in the years ahead. … [Our] model suggests that rising prices will only gradually reduce affordability enough to dampen demand and mitigate the supply-demand imbalance. As a result, the model projects double-digit price gains both this year and next.
Is the US headed toward a new housing bubble? – The staggering rise of U.S. home prices is forcing thousands of aspiring buyers into grueling, often risky bidding wars, raising questions about whether the torrid housing market could be in a bubble. For nearly a year, the combination of low mortgage rates, a flood federal stimulus, lockdowns and teleworking – all sparked by the coronavirus pandemic – has fueled a rapid increase in demand for houses. At the same time, COVID-19 exacerbated an already severe housing shortfall by causing major delays in new home construction and kept some potential sellers on the sidelines because they were afraid to let strangers tour their homes during a pandemic. The median home price in April rose 20 percent – to $347,500 – compared with a year ago, and the average home spent just 20 days on the market before selling, according to data released Friday to real estate listing website Redfin. And last month was not a pandemic anomaly. Home prices rose 12 percent year over year in February, the fastest rate since 1996, according to the most recent reading from the closely watched S&P CoreLogic Case-Shiller home price index. “We really sort of exacerbated this imbalance where demand was really strong but supply was unbelievably constrained,” said Mike Fratantoni, chief economist for the Mortgage Bankers Association. “You get into this year of record low levels of inventory, and that really is what’s spurring the very rapid home price growth,” he added. Buyers with savings or equity in their current homes have helped keep up the pressure. Offers well above asking price are commonplace, and those unable to outbid competitors have upped the ante by waiving inspection requirements and restructuring offers with better immediate incentives for sellers. Experts say there’s no clear end in sight to the homebuying frenzy, but they don’t see the same red flags that preceded the collapse of the mid-2000s housing bubble. Though mortgage rates are low, lending standards have tightened considerably since the 2007-09 recession. The 2010 Dodd-Frank Wall Street reform law imposed much stricter home loan requirements to avoid another foreclosure crisis, and banks have also been wary of lending to all but the safest buyers because of pandemic-related uncertainty. “A lot of the people who are buying today … are among the most creditworthy in the history of mortgage lending,” said Reggie Edwards, an economist at Redfin. “They have the highest levels of savings, and they’re taking out loans that have the most equity off the bat because they’re putting so much cash upfront. I don’t think we have any concerns about if people can afford the homes that they’re buying right now, especially compared to 2006, 2007.
Soaring Lumber Prices Add Nearly $36,000 To The Price Of A New Home: NAHB – Skyrocketing lumber prices that have tripled over the past 12 months have driven the price of an average new single-family home to rise by $35,872, according to new analysis by the National Association of Home Builders (NAHB), with the price spike threatening to hobble the momentum of the U.S. housing market, one of the bright stars of the recovery from the pandemic recession. While homebuilder sentiment remains optimistic, as indicated by the NAHB Housing Market index, headwinds due to rising building costs have pulled the index down from recent highs. “The supply chain for residential construction is tight, particularly regarding the cost and availability of lumber, appliances, and other building materials,” said NAHB Chairman Chuck Fowke in a statement. At the onset of the health crisis, “the mills stopped producing,” said Dustin Jalbert, senior economist and lumber industry specialist at Fastmarkets in Burlington, Massachusetts. “As soon as they saw 20 million unemployed, they shut down production,” Jalbert added. But the pandemic drove demand for housing in low population density areas and for home office space, while the Fed dropped interest rates, driving mortgage rates down to historic lows. This confluence of factors turned out to be a boon for housing, with surging demand pushing housing inventories to record lows. Lumber producers have struggled to catch up with the bustling homebuilding activity, with lumber prices jumping more than 300 percent year-on-year to record highs. This lumber price hike has also added nearly $13,000 to the market value of an average new multifamily home, NAHB said in a post. This translates into households paying $119 a month more to rent a new apartment, the association said, adding that its representatives on April 29 held a “productive” virtual meeting with White House staff from the Domestic Policy Council, National Economic Council, and the Office of the Vice President. “The discussion covered mill capacity issues, mill worker shortages, and how soaring lumber prices are exacerbating the housing affordability crisis and putting the American dream of homeownership out of reach of millions of households,” NAHB said in a statement. The association called on the White House to hold a summit on lumber and building material supply chain issues and to temporarily remove the 9 percent tariffs on Canadian lumber to help reduce price volatility. “The administration was noncommittal on both requests but the door remains open for future talks,” NAHB said.
Q1 2021 GDP Details on Residential and Commercial Real Estate -The BEA released the underlying details for the Q1 advance GDP report on Friday. The BEA reported that investment in non-residential structures decreased at a 4.8% annual pace in Q1. This was the sixth consecutive quarterly decline (weakness in non-residential structures started before the pandemic). Investment in petroleum and natural gas structures increased sharply in Q1 compared to Q4, but was still down 40% year-over-year. The first graph shows investment in offices, malls and lodging as a percent of GDP. Investment in offices (blue) decreased in Q1, and was down 4.5% year-over-year. Investment in multimerchandise shopping structures (malls) peaked in 2007 and was down about 28% year-over-year in Q1 – and at a record low as a percent of GDP. The vacancy rate for malls is still very high, so investment will probably stay low for some time. Lodging investment decreased in Q1, and lodging investment was down 22% year-over-year. All three sectors – offices, malls, and hotels – are being hurt significantly by the pandemic. The second graph is for Residential investment components as a percent of GDP. According to the Bureau of Economic Analysis, RI includes new single family structures, multifamily structures, home improvement, Brokers’ commissions and other ownership transfer costs, and a few minor categories (dormitories, manufactured homes).Even though investment in single family structures has increased from the bottom, single family investment is still low, and still barely above the bottom for previous recessions as a percent of GDP. Investment in single family structures was $375 billion (SAAR) (about 1.7% of GDP), and up 22% year-over-year. Investment in multi-family structures increased slightly in Q1. Investment in home improvement was at a $325 billion Seasonally Adjusted Annual Rate (SAAR) in Q3 (about 1.5% of GDP). Home improvement spending has been strong during the pandemic.Note that Brokers’ commissions (black) increased sharply as existing home sales increased in the second half of 2020, and was up 26% year-over-year in Q1.
Construction Spending increased 0.2% in March –From the Census Bureau reported that overall construction spending decreased: Construction spending during March 2021 was estimated at a seasonally adjusted annual rate of $1,513.1 billion, 0.2 percent above the revised February estimate of $1,509.9 billion. The March figure is 5.3 percent above the March 2020 estimate of $1,436.7 billion. Private spending increased and public spending decreased:Spending on private construction was at a seasonally adjusted annual rate of $1,169.2 billion, 0.7 percent above the revised February estimate of $1,160.9 billion. … In March, the estimated seasonally adjusted annual rate of public construction spending was $343.9 billion, 1.5 percent below the revised February estimate of $349.0 billion. This graph shows private residential and nonresidential construction spending, and public spending, since 1993. Note: nominal dollars, not inflation adjusted. Residential spending is 7% above the bubble peak (in nominal terms – not adjusted for inflation). Non-residential spending is 7% above the previous peak in January 2008 (nominal dollars), but has been weak recently. Public construction spending is 6% above the previous peak in March 2009, and 31% above the austerity low in February 2014. The second graph shows the year-over-year change in construction spending. On a year-over-year basis, private residential construction spending is up 23.3%. Non-residential spending is down 9.1% year-over-year. Public spending is down 4.6% year-over-year. Construction was considered an essential service in most areas and did not decline sharply like many other sectors, but it seems likely that non-residential will be under pressure. For example, lodging is down 24% YoY, multi-retail down 31.5% YoY, and office down 4.2% YoY. This was well below consensus expectations of a 2.0% increase in spending, and construction spending for the previous two months was revised down.
Hotels: Occupancy Rate Down 17% Compared to Same Week in 2019 —Note: The year-over-year occupancy comparisons are easy, since occupancy declined sharply at the onset of the pandemic. However, occupancy is still down significantly from normal levels. The occupancy rate is down 17% compared to the same week in 2019.From CoStar: STR: US Hotels End April With Positive Weekend Occupancy Streak: U.S. hotel occupancy remained relatively flat compared with the previous week, according to STR’s latest data through May 1.
April 25 through May 1, 2021:
Occupancy: 57.1%
Average daily rate (ADR): US$108.80
Revenue per available room (RevPAR): US$62.13
While the overall weekly data was stagnant, weekend occupancy rose modestly and came in above 70% for the fourth straight week. However, the Top 25 Markets showed a lower occupancy level in aggregate with more properties reopening on top of lower demand. The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.The red line is for 2021, black is 2020, blue is the median, and dashed light blue is for 2009 (the worst year on record for hotels prior to 2020). Occupancy is now slightly above the horrible 2009 levels. Note: Y-axis doesn’t start at zero to better show the seasonal change
Personal bankruptcies are down, money woes have eased – for now – The degree to which U.S. consumers’ financial health got a boost from the pandemic relief efforts is coming into focus. The looming question is what will happen next. The average consumer’s financial well-being improved between June 2019 and June 2020, as fewer people reported difficulty paying their bills, and subjective levels of financial well-being rose, the Consumer Financial Protection Bureau said Friday. Meanwhile, bankruptcy filings tumbled 38% to 473,349 for the 12-month period ended on March 31, the Administrative Office of the U.S. Courts said Monday. The two reports highlighted the positive impact from government payments, forbearance programs and decreased consumer spending over the past 14 months. But the CFPB noted that much of the decline in spending meant that people had cut way back on things like visiting family and vacations. “An overall improvement in financial status does not imply more general improvement in consumers’ lives, especially against the tragedy of so much illness and death,” the bureau wrote. The findings jibe with other recent data, including quarterly earnings reports from banks that have shown robust consumer credit quality. Some 96.8% of U.S. consumer debt was current in the fourth quarter of last year, its highest level in more than 17 years, according to data from the Federal Reserve Bank of New York. But it’s not clear how long the positive trends will sustain themselves as government relief efforts wind down and moratoriums on evictions and foreclosures end. Bankers have offered differing views on when charge-offs are likely to peak, and at what level. The CFPB reached its conclusions by examining credit bureau data and surveying approximately 1,700 consumers. It calculated consumers’ Financial Well-Being Score, a metric the agency developed in 2015 that asks respondents a range of subjective questions about their financial lives and then generates a score between 0 and 100. While that score had generally remained steady over time, the CFPB said it ticked up by 1 point to 52.1 in June 2020. A 1-point increase is associated with an age increase of five years, a credit score increase of 20 points or a household income increase of about $15,000, according to the bureau. Those respondents who said they had money left over at the end of the month rose by 3.9 percentage points to 46.6%, while people who contended that finances were controlling their lives fell by 8 percentage points to 32.7%. The bureau also found that consumers under the age of 40 reported a substantially greater increase in their financial well-being than those over 62, though older consumers still had much higher financial well-being scores.
Credit Card Deleveraging during the COVID-19 Pandemic — St. Louis Fed –In the early months of the COVID-19 pandemic, total credit card debt1 in the United States dropped 13%, reaching a low of $807 billion by the end of third quarter of 2020. Prior to this decline, total credit card debt had reached a record high of nearly $930 billion. Using aggregate credit card debt data from the Federal Reserve Bank of New York, the figure below shows the deleveraging pattern of the last two recessions, the Great Recession and the COVID-19 downturn. This blog post uses individual level data from the Federal Reserve Bank of New York/Equifax Consumer Credit Panel to show that although the evolution of credit card debt looks similar at the aggregate level during these two episodes, the underlying individual changes in credit card debt during these two events are quite different.
Trade Deficit Increased to $74.4 Billion in March — From the Department of Commerce reported: The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $74.4 billion in March, up $3.9 billion from $70.5 billion in February, revised.March exports were $200.0 billion, $12.4 billion more than February exports. March imports were $274.5 billion, $16.4 billion more than February imports.Both exports and imports increased in March.Exports are up 8.1% compared to March 2020; imports are up 18.1% compared to March 2020. Both imports and exports decreased sharply due to COVID-19, and have now bounced back (imports much more than exports), The second graph shows the U.S. trade deficit, with and without petroleum. The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products.Note that net, imports and exports of petroleum products are close to zero.The trade deficit with China increased to $27.7 billion in March, from $11.8 billion in March 2020.
US Trade Deficit Hits Record High In March – After the 2018-2019 rebound in the US Trade Balance to a three year low (as Trump ‘adjusted’ US-China’s relationship), the trade deficit has surged from the start of the pandemic to the latest data in March, at $74.4 billion – the largest trade deficit in US history (from $71.1 billion a month earlier), in line with expectations. The March goods deficit ($90.6 billion) was the highest on record, and the March non-petroleum deficit ($88.8 billion) was the highest on record.Overall, imports rose 6.3% to a record $274.5 billion, while exports climbed 6.6% to $200 billion. Exports and Imports::
- March exports of goods ($142.4 billion) were the highest since May 2018 ($142.7 billion).
- March exports of industrial supplies and materials ($51.5 billion) were the highest on record.
- March non-petroleum exports ($128.9 billion) were the highest on record.
- March imports of goods ($233.0 billion) were the highest on record.
- March imports of consumer goods ($65.1 billion) were the highest on record.
- March imports of foods, feeds, and beverages ($14.0 billion) were the highest on record.
- March imports of capital goods ($63.0 billion) were the highest on record.
- March non-petroleum imports ($217.7 billion) were the highest on record.
The deficit with China increased $6.7 billion to $36.9 billion in March. Exports increased $0.9 billion to $11.3 billion and imports increased $7.6 billion to $48.2 billion.
U.S. trade deficit surges to new record; shortfall with China rises — The U.S. trade deficit hit a fresh record high in March as consumers flush with government cash spurred a continuing demand for foreign-made goods. With a new round of $1,400 stimulus checks pouring in and the domestic economy continuing to show substantial improvement, the imbalance in goods and services with the rest of the world swelled to $74.4 billion, the Commerce Department reported Tuesday. That’s the highest level ever in a data series that goes back to January 1992, and represents a 57.6% increase from the same period a year ago and higher than the $70.5 billion in February. The trade imbalance with China increased more than 22% to $36.9 billion. The deficit with Mexico rose 23.5% to $8.4 billion. “Stimulus has kept American consumers spending through the pandemic, but restrictions on high-contact industries have diverted consumer spending from domestically produced services to goods, much of which are imported,” Bill Adams, senior economist at PNC, wrote. Exports actually increased for the month, rising $200 billion or 6.6%. But that was offset by a continued demand for imported goods, which increased 6.3% or $274.5 billion. The deficit has risen nearly 10% in 2021 alone and has exploded from the $47.2 billion level in March 2020, just as the U.S. was entering the early days of the Covid-19 pandemic. Imports in 2021 have increased by 8.5% while exports have fallen 3.5%. Adams said the shortfall is likely to decline in coming months as the recovery progresses. “As the pandemic comes under control in the United States, American consumers will spend less on imported goods, shrinking imports; and foreigners will buy more U.S. exports as their economies recover further,” he said. For March, imports rose the most in consumer goods, which increased $4.5 billion, including a $1.2 billion rise in textile apparel and household goods. Industrial supplies and materials imports rose $3.7 billion and capital goods were up $3.3 billion. Industrial supplies and materials led exports with a $5.2 billion increase, while capital goods were up $2.9 billion and consumer goods rose $2 billion.
Consumer Demand Drove U.S. Imports to Record High in March – WSJ – Consumers and a fresh round of stimulus money pushed demand for U.S. imported goods to a record high in March, further expanding the trade deficit. The foreign-trade gap in goods and services expanded 5.6% from the prior month to a seasonally adjusted $74.4 billion in March, the Commerce Department said Tuesday. Imports rose 6.3% to $274.5 billion for the month, fueled by higher shipments of items including toys, furniture, cellphones, automobiles and semiconductors. The previous record for imports, on a seasonally but not inflation adjusted basis, was recorded in October 2018 when the U.S. purchased foreign goods and services worth $266.72 billion. Exports rose 6.6% to $200 billion in March, following a one-month decline in February, as supply-chain disruptions caused by winter weather eased. Economists surveyed by The Wall Street Journal had predicted a trade deficit of $74.8 billion in March. President Biden signed dozens of executive orders in his first few weeks in office, but his administration has moved slowly on trade. WSJ’s Gerald F. Seib explains why. Photo illustration: Laura Kammermann The increase in March imports and the trade deficit came as the economic recovery in the U.S gathered steam, thanks to government-stimulus spending, Covid-19 vaccination efforts and a fuller reopening of the economy from pandemic-related restrictions. U.S. household income rose by 21.1% in March, the Commerce Department reported last week, the largest monthly increase for government records tracing back to 1959. Consumer spending also was up sharply, increasing 4.2%. The federal government in March distributed $1,400 stimulus checks to individuals as part of a $1.9 trillion stimulus package signed into law in March. U.S. household income rose by 21.1% in March, the Commerce Department reported last week, the largest monthly increase for government records tracing back to 1959. Consumer spending also was up sharply, increasing 4.2%. The federal government in March distributed $1,400 stimulus checks to individuals as part of a $1.9 trillion stimulus package signed into law in March.Exports remained well below pre-pandemic levels in March but are on a recovery path as the global economy continues to emerge from the pandemic’s impact. March exports of goods were the highest since May 2018, with the shipments of industrial supplies and materials at the highest level on record.Economists expect the trade deficit to remain high in the coming months as the U.S. economy recovers more robustly than most other parts of the world. That should keep imports growing vigorously, outpacing recoveries in U.S. exports, economists say.
AAR: April Rail Carloads down 10.1%, Intermodal Up 10.4% Compared to 2019 –From the Association of American Railroads (AAR) Rail Time Indicators. Numerous U.S. rail traffic categories have completely recovered the ground lost during the pandemic or are very close to doing so.For example, April saw a new all-time record for U.S. intermodal shipments, driven by surging international trade and strong consumer spending. The weekly average for intermodal for April was 293,488 containers and trailers, breaking the record of 293,305 set in January 2021. …Meanwhile, U.S. carloads of grain, food, lumber, paper, scrap metal, and several other categories were higher in April 2021 than they were in both April 2020 and in April 2019. Carloads of chemicals and steel in April 2021 were much higher than April 2020 levels and just shy of April 2019 levels. In April 2021, 17 of the 20 carload categories the AAR tracks were higher than in April 2020; nine carload categories were higher than in April 2019. This graph from the Rail Time Indicators report shows the six week average of U.S. Carloads in 2019, 2020 and 2021:U.S. railroads originated 951,840 total carloads in April 2021, up 23.7%, or 182,060 carloads, over April 2020 and down 10.1% from April 2019. Total carloads averaged 237,960 per week in April 2021, the most since November 2019. For the first four months of 2021, total carloads were up 2.8% over last year. The second graph shows the six week average of U.S. intermodal in 2019, 2020 and 2021: (using intermodal or shipping containers):U.S. railroads originated 1.17 million intermodal containers and trailers in April 2021, an average of 293.488 units per week. That’s up 33.8% over April 2020, up 10.4% over April 2019, and the biggest weekly average for intermodal for any month in history (breaking the record of 293,305 set in January 2021).
April Vehicles Sales increased to 18.51 Million SAAR; Highest Since 2005 –The BEA released their estimate of light vehicle sales for April this morning. The BEA estimates sales of 18.51 million SAAR in April 2021 (Seasonally Adjusted Annual Rate), up 3.1% from the March sales rate, and up more than double from April 2020. This was the highest sales rate since 2005.This was above the consensus estimate. This graph shows light vehicle sales since 2006 from the BEA (blue) and the BEA’s estimate for April (red). The impact of COVID-19 was significant, and April 2020 was the worst month.Since April 2020, sales have increased are now up compared to 2019. Sales-to-date are up 1.9% compared to the same period in 2019.The second graph shows light vehicle sales since the BEA started keeping data in 1967.Note: dashed line is current estimated sales rate of 18.51 million SAAR.Sales in April were positively impacted by the American Rescue Plan Act.
U.S. Heavy Truck Sales up Sharply Year-over-year in April — The following graph shows heavy truck sales since 1967 using data from the BEA. The dashed line is the April 2021 seasonally adjusted annual sales rate (SAAR).Heavy truck sales really collapsed during the great recession, falling to a low of 180 thousand SAAR in May 2009. Then heavy truck sales increased to a new all time high of 575 thousand SAAR in September 2019.However heavy truck sales started declining in late 2019 due to lower oil prices.Note: “Heavy trucks – trucks more than 14,000 pounds gross vehicle weight.”Heavy truck sales really declined towards the end of March 2020 due to COVID-19 and the collapse in oil prices, falling to a low of 299 thousand SAAR in May 2020, but have since rebounded.Heavy truck sales were at 499 thousand SAAR in April, down from 517 thousand SAAR in March, but up 46% from 390 thousand SAAR in March 2020. The year-over-year comparison are easy for the next few months because of the collapse in sales in the early months of the pandemic.
U.S. factory orders rebound in March; business spending on equipment strong (Reuters) – New orders for U.S.-made goods rebounded in March and business spending on equipment was stronger than initially estimated, boosted by robust domestic demand, though momentum could slow because of bottlenecks in the supply chain.The Commerce Department said on Tuesday that factory orders increased 1.1% in March after falling 0.5% in February.Economists polled by Reuters had forecast factory orders rebounding 1.3%. Orders rose 6.6% on a year-on-year basis.The White House’s $1.9 trillion pandemic relief package and the expansion of the COVID-19 vaccination program to all adult Americans have led to a boom in demand, which is pushing against supply constraints.The Institute for Supply Management reported on Monday that manufacturing activity grew at a slower pace in April, restrained by shortages of inputs. Robust consumer spending helped to lift gross domestic product growth at a 6.4% annualized rate in the first quarter, which followed a 4.3% growth pace in the final three months of 2020.Most economists expect double-digit GDP growth this quarter, which would position the economy to achieve growth of at least 7%, which would be the fastest since 1984. The economy contracted 3.5% in 2020, its worst performance in 74 years.Factory goods orders in March were boosted by strong demand for machinery, motor vehicles, fabricated and primary metal products. But orders for electrical equipment, appliances and components decreased. Unfilled orders at factories rose 0.4% after surging 0.9% in February.The Commerce Department also reported that orders for non-defense capital goods, excluding aircraft, which are seen as a measure of business spending plans on equipment, jumped 1.2% in March instead of increasing 0.9% as reported last month.Shipments of core capital goods, which are used to calculate business equipment spending in the GDP report, rose 1.6%. They were previously reported to have rebounded 1.3% in March. Business spending on equipment recorded a third straight quarter of double-digit growth in the first quarter.
ISM Manufacturing index Decreased to 60.7% in April –The ISM manufacturing index indicated expansion in March. The PMI was at 60.7% in April, down from 64.7% in March. The employment index was at 55.1%, down from 59.6% last month, and the new orders index was at 64.3%, down from 68.0%. From ISM: April 2021 Manufacturing ISM Report On Business: Economic activity in the manufacturing sector grew in April, with the overall economy notching an 11th consecutive month of growth, say the nation’s supply executives in the latest Manufacturing ISM Report On Business. “The April Manufacturing PMI registered 60.7 percent, a decrease of 4 percentage points from the March reading of 64.7 percent. This figure indicates expansion in the overall economy for the 11th month in a row after contraction in April 2020. The New Orders Index registered 64.3 percent, declining 3.7 percentage points from the March reading of 68 percent. The Production Index registered 62.5 percent, a decrease of 5.6 percentage points compared to the March reading of 68.1 percent. The Backlog of Orders Index registered 68.2 percent, 0.7 percentage point higher compared to the March reading of 67.5 percent. The Employment Index registered 55.1 percent, 4.5 percentage points lower than the March reading of 59.6 percent. The Supplier Deliveries Index registered 75 percent, down 1.6 percentage points from the March figure of 76.6 percent. The Inventories Index registered 46.5 percent, 4.3 percentage points lower than the March reading of 50.8 percent. The Prices Index registered 89.6 percent, up 4 percentage points compared to the March reading of 85.6 percent. The New Export Orders Index registered 54.9 percent, an increase of 0.4 percentage point compared to the March reading of 54.5 percent. The Imports Index registered 52.2 percent, a 4.5-percentage point decrease from the March reading of 56.7 percent.” This was well below expectations. This suggests manufacturing expanded at a slower pace in March than in February.
April Markit Manufacturing: “Strongest improvement in operating conditions on record amid marked uptick in client demand” — The April US Manufacturing Purchasing Managers’ Index conducted by Markit came in at 60.5, up 1.4 from the 59.1 final March figure. Here is an excerpt from Chris Williamson, Chief Business Economist at IHS Markit in their latest press release:“US manufacturers reported the biggest boom in at least 14 years during April. Demand surged at a pace not seen for 11 years amid growing recovery hopes and fresh stimulus measures.“Supply chain delays worsened, however, running at the highest yet recorded by the survey, choking production at many companies. Worst affected were consumer-facing firms, where a lack of inputs has caused production to fall below order book growth to a record extent in over the past two months as household spending leapt higher.“Suppliers have been able to command higher prices due to the strength of demand for inputs, pushing material costs higher at a rate not seen since 2008.“Attempts to expand capacity via hiring extra staff gained further momentum, though in some cases staff shortages were an additional constraint on production. However, with confidence in the outlook continuing to run at one of the highest levels seen over the past seven years, buoyed by vaccine roll-outs and stimulus, further investment in production capacity should be seen in coming months, helping alleviate some of the price pressures.” [Press Release] Here is a snapshot of the series since mid-2012.
US Steel ends plans for $1.5B Pennsylvania plant upgrades . (AP) – Pittsburgh-based United States Steel Corp. said Friday that it is canceling a $1.5 billion project to bring a state-of-the-art improvement to its Mon Valley Works operations in western Pennsylvania, saying the world has changed in the two years since it announced its intentions. Project permits initially stalled by the pandemic never came through, U.S. Steel has added capacity elsewhere, and now it must shift its focus to its goal of eliminating greenhouse gas emissions from its facilities by 2050, it said. The loss of what would have been one of the largest industrial investments in Pennsylvania quickly led to recriminations by Pittsburgh-area politicians, labor unions and business organizations over why the project could never secure permits. Some worried it will diminish the future of steelmaking there. “We had a window of opportunity and it’s absurd that we as a region have allowed that window to be slammed shut,” said Jeff Nobers, executive director of Pittsburgh Works, a coalition of labor unions, corporations and local business chambers. U.S. Steel revealed the news in an earnings call Friday morning and in an “open letter” on social media. It also said it will shut down batteries 1, 2 and 3 at its Clairton Plant by early 2023 – representing approximately 17% of coke production at the plant – to help reduce polluting emissions from equipment long-criticized as among the area’s worst polluters. “The world is changing rapidly and we’re on the ten-yard line with 90 yards ahead of us,” David Burritt, the company’s president and CEO, said in the letter. U.S. Steel said it does not anticipate laying off any of the 130 full-time workers at the three batteries, and that job reductions will come from retirements and reassignments.
ISM Services Index decreased to 62.7% in April –The March ISM Services index was at 62.7%, down from 63.7% last month. The employment index increased to 58.8%, from 57.7%. Note: Above 50 indicates expansion, below 50 contraction. From the Institute for Supply Management: April 2021 Services ISM Report On Business “The Services PMI registered 62.7 percent, which is 1 percentage point lower than last month’s all-time high of 63.7 percent. The April reading indicates the 11th straight month of growth for the services sector, which has expanded for all but two of the last 135 months. “The Supplier Deliveries Index registered 66.1 percent, up 5.1 percentage points from March’s reading of 61 percent. (Supplier Deliveries is the only ISM Report On Business index that is inversed; a reading of above 50 percent indicates slower deliveries, which is typical as the economy improves and customer demand increases.) The Prices Index figure of 76.8 percent is 2.8 percentage points higher than the March reading of 74 percent, indicating that prices increased in April, and at a faster rate. This is the index’s highest reading since it reached 77.4 percent in July 2008. “According to the Services PMI, 17 services industries reported growth. The composite index indicated growth for the 11th consecutive month after a two-month contraction in April and May 2020. There was slowing growth in the services sector in April; however, the rate of expansion is still strong. Respondents’ comments indicate that pent-up demand is continuing. Production-capacity constraints, material shortages, weather and challenges in logistics and human resources continue to affect deliveries, which has resulted in a reduction of inventories,” says Nieves. The employment index increased to 58.8% from 57.2% in March.
March Markit Services PMI: “Business activity expands at fastest pace on record amid marked uptick in client demand” –The April US Services Purchasing Managers’ Index conducted by Markit came in at 64.7 percent, up 5.0 from the final March estimate of 59.7.Here is the opening from the latest press release:Commenting on the latest survey results, Chris Williamson, Chief Business Economist at IHS Markit, said:“Thanks to the cocktail of a successful vaccine roll-out, the reopening of the economy, ultra-accommodative monetary policy and injection of fresh fiscal stimulus, businesses are reporting the strongest surge in demand seen for at least a decade.“The upswing in demand has led to one of the strongest months of job creation yet recorded by the survey as business prepares for better times ahead.“The biggest threat to the outlook remains new virus variants, which will inevitably mean international travel and associated business activity will stay under pressure for some time to come, but in the meantime the domestic economy is faring very well, especially consumer facing industries.“Another concern is prices, with a record increase in service sector charges highlighting how inflationary pressures are by no means confined to the manufacturing sector. Indicators of price pressures and capacity constraints will need to be monitored closely to assess whether such price rises are transitory.” [Press Release] Here is a snapshot of the series since mid-2012.
Weekly Initial Unemployment Claims decrease to 498,000 –The DOL reported:: In the week ending May 1, the advance figure for seasonally adjusted initial claims was 498,000, a decrease of 92,000 from the previous week’s revised level. This is the lowest level for initial claims since March 14, 2020 when it was 256,000. The previous week’s level was revised up by 37,000 from 553,000 to 590,000. The 4-week moving average was 560,000, a decrease of 61,000 from the previous week’s revised average. This is the lowest level for this average since March 14, 2020 when it was 225,500. The previous week’s average was revised up by 9,250 from 611,750 to 621,000. This does not include the 101,214 initial claims for Pandemic Unemployment Assistance (PUA) that was down from 121,414 the previous week.The following graph shows the 4-week moving average of weekly claims since 1971. The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims decreased to 560,000.The previous week was revised up. Regular state continued claims increased to 3,690,000 (SA) from 3,653,000 (SA) the previous week.Note: There are an additional 6,862,705 receiving Pandemic Unemployment Assistance (PUA) that decreased from 6,974,909 the previous week (there are questions about these numbers). This is a special program for business owners, self-employed, independent contractors or gig workers not receiving other unemployment insurance. And an additional 4,972,507 receiving Pandemic Emergency Unemployment Compensation (PEUC) down from 5,194,099.Weekly claims were lower than the consensus forecast.
ADP: Private Employment increased 742,000 in April —From ADP: Private sector employment increased by 742,000 jobs from March to April according to the April ADP National Employment ReportTM. Broadly distributed to the public each month, free of charge, the ADP National Employment Report is produced by the ADP Research Institute in collaboration with Moody’s Analytics. The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis “The labor market continues an upward trend of acceleration and growth, posting the strongest reading since September 2020,” said Nela Richardson, chief economist, ADP. “Service providers have the most to gain as the economy reopens, recovers and resumes normal actvities and are leading job growth in April. While payrolls are still more than 8 million jobs short of pre-COVID-19 levels, job gains have totaled 1.3 million in the last two months after adding only about 1 million jobs over the course of the previous five months. This was below the consensus forecast of 830,000 for this report. The BLS report will be released Friday, and the consensus is for 978 thousand non-farm payroll jobs added in April. The ADP report has not been very useful in predicting the BLS report.
April Employment Report: 266 Thousand Jobs, 6.1% Unemployment Rate — From the BLS: Total nonfarm payroll employment rose by 266,000 in April, and the unemployment rate was little changed at 6.1 percent, the U.S. Bureau of Labor Statistics reported today. Notable job gains in leisure and hospitality, other services, and local government education were partially offset by employment declines in temporary help services and in couriers and messengers….The change in total nonfarm payroll employment for February was revised up by 68,000, from +468,000 to +536,000, and the change for March was revised down by 146,000, from +916,000 to +770,000. With these revisions, employment in February and March combined is 78,000 lower than previously reported.The first graph shows the year-over-year change in total non-farm employment since 1968.In March, the year-over-year change was 14.147 million jobs. This was up significantly – since employment collapsed in April 2020.Total payrolls increased by 266 thousand in March. Private payrolls increased by 218 thousand.Payrolls for February and March were revised down 78 thousand, combined.The second graph shows the job losses from the start of the employment recession, in percentage terms.The current employment recession was by far the worst recession since WWII in percentage terms, but currently is not as severe as the worst of the “Great Recession”.The third graph shows the employment population ratio and the participation rate.The Labor Force Participation Rate increased to 61.7% in April, from 61.7% in March. This is the percentage of the working age population in the labor force.The Employment-Population ratio increased to 57.9% from 57.8% (black line).I’ll post the 25 to 54 age group employment-population ratio graph later.The fourth graph shows the unemployment rate.The unemployment rate increased in April to6.1% from 6.0% in March.This was well below consensus expectations, and February and March were revised down by 78,000 combined.
April jobs report: well, that was a big miss …. but look at the composition —HEADLINES:
- +266,000 million jobs added: 218,000 private sector plus 48,000 government. The alternate, and more volatile measure in the household report indicated a gain of 328,000 jobs, which factors into the unemployment and underemployment rates below.
- U3 unemployment rate rose 0.1% to 6.1%, compared with the January 2020 low of 3.5%.
- U6 underemployment rate declined 0.3% to 10.4%, compared with the January 2020 low of 6.9%.
- Those on temporary layoff increased 88,000 to 2,114,000.
- Permanent job losers increased 97,000 to 3,529,000.
- February was revised upward by 68,000, while March was revised downward by 146,000, for a net loss of 78,000 jobs compared with previous reports.
- the average manufacturing workweek was unchanged at 41.6 hours. This is one of the 10 components of the LEI.
- Manufacturing jobs declined 18,000. Since the beginning of the pandemic, manufacturing has still lost -515,000, or 4.0% of the total.
- Construction jobs were unchanged. Since the beginning of the pandemic, -14,000 construction jobs have been lost, or 0.2% of the total.
- Residential construction jobs, which are even more leading, declined by 1,300. Since the beginning of the pandemic, there have still been almost 30,000 in gains in this sector.
- temporary jobs decreased by 111,400. Since the beginning of the pandemic, there have still been 184,800 jobs lost, or 6.3% of all temporary jobs.
- the number of people unemployed for 5 weeks or less rose fell by 79,000 to 2.414 million, 332,000 more than just before the pandemic hit.
- Professional and business employment declined by 79,000, which is still 685,000, or about 3.2%, below its pre-pandemic peak.
- Average Hourly Earnings for Production and Nonsupervisory Personnel: rose $0.20 to $25.45, which is a 1.2% YoY gain***WHICH IS THE LOWEST YOY GAIN IN THE ENTIRE NEARLY 60 YEAR HISTORY OF THIS SERIES.*** This is a huge reversal of the 5%+ YoY gains recently seen, and reflects the rehiring of low-wage workers in sectors like food and beverage serving.
- the index of aggregate hours worked for non-managerial workers was unchanged, which is a loss of -3.6% since just before the pandemic.
- the index of aggregate payrolls for non-managerial workers rose by 0.7%, which is a gain of 1.4% since just before the pandemic.
- Full time jobs gained 935,000 in the household report.
- Part time jobs declined 54,000 in the household report.
- The number of job holders who were part time for economic reasons decreased by 583,000 to 5.243 million, which is an increase of 845,000 since before the pandemic began.
SUMMARY: Needless to say, this was a very disappointing report compared with all of the employment-related indicators we have seen in the past few weeks. My main thoughts are that (1) this was compositional; and (2) there is likely to be a substantial revision. Usually when there is one report that sticks out like a sore thumb compared with other related data, it gets revised significantly. This is particularly so when one looks at the composition of the gains and losses in this report. Consider the following two points: – there were job gains in food and drinking establishments of 187,000, over 2/3’s of the entire month’s improvements. – the entire goods-producing sector of the US economy – which has been at very least red hot in the past few months – *lost* 16,000 jobs! This includes job losses in residential construction (housing), which has been going through the roof in recent months. Another anomaly is that those unemployed less than 5 weeks, which usually correlates fairly closely with initial jobless claims, *increased* by 237,000; plus, both permanent and temporary layoffs *increased* – a direct contradiction to the big decline in new jobless claims in the past 6 weeks. Another big compositional change was the big decline in temporary jobs, paired with a huge increase in full time employment. This suggests that previous temps were converted to permanent hires. Finally, note that the YoY% increase in average wages completely reversed, and made an all-time series low (although still positive). So, basically, either (1) bottlenecks in supplies caused a complete halt in the goods producing sector including both manufacturing and construction; plus there was an anomalous contraction in professional and business services; or (2) there will be substantial upward revisions to those aspects of the report. I am more inclined to believe that #2 is the primary driver of this relatively poor report than #1.
Comments on April Employment Report – McBride – The headline jobs number in the April employment report was well below expectations, and employment for the previous two months was revised down. Leisure and hospitality gained 331 thousand jobs. In March and April of 2020, leisure and hospitality lost 8.2 million jobs, and are now down 2.85 million jobs since February 2020. So leisure and hospitality has now added back about 65% of the jobs lost in March and April 2020.Construction employment was unchanged in April, and State and Local education added 37 thousand jobs. Manufacturing lost 18 thousand jobs. Earlier: April Employment Report: 266 Thousand Jobs, 6.1% Unemployment Rate. In April, the year-over-year employment change was 14.147 million jobs. This turned positive in April due to the sharp jobs losses in April 2020. This graph shows permanent job losers as a percent of the pre-recession peak in employment through the April report. . These jobs will likely be the hardest to recover. This data is only available back to 1994, so there is only data for three recessions. In April, the number of permanent job losers increased slightly to 3.529 million from 3.432 million in March. Since the overall participation rate has declined due to cyclical (recession) and demographic (aging population, younger people staying in school) reasons, here is the employment-population ratio for the key working age group: 25 to 54 years old. The prime working age will be key in the eventual recovery. The 25 to 54 participation rate was unchanged in April at 81.3% from 81.3% in March, and the 25 to 54 employment population ratio increased to 76.9% from 76.8% in March. The number of persons working part time for economic reasons decreased in April to 5.243 million from 5.826 million in March. These workers are included in the alternate measure of labor underutilization (U-6) that decreased to 10.4% from 10.7% in March. This is down from the record high in April 22.9% for this measure since 1994. This graph shows the number of workers unemployed for 27 weeks or more. According to the BLS, there are 4.183 million workers who have been unemployed for more than 26 weeks and still want a job, down from 4.218 million in March. This does not include all the people that left the labor force. This will be a key measure to follow during the recovery. Summary: The headline monthly jobs number was well below expectations, and the previous two months were revised down by 78,000 combined. The headline unemployment rate increased to 6.1%. This was a disappointing report , and there are still 8.2 million fewer jobs than in February 2020, and 3.5 million people have lost jobs permanently.
Five takeaways on a surprisingly poor jobs report –Volume 90% Economists and politicians alike were shocked by the unexpectedly tepid April jobs report released Friday, which showed that the economy only added about a quarter the number of jobs most were expecting. The report found U.S. businesses added just 266,000 new jobs in April instead of the roughly 1 million that economists had projected. The figure would be solid in the midst of a strong economy, but was tremendously disappointing for a nation emerging from a pandemic in which 9.8 million people remain unemployed. Here are five takeaways to make some sense of the report. Any recovery from the depths of the coronavirus recessions is unlikely to be a straight ride. “I think this signals that we’re in for a rockier road that we thought,” said Robert Frick, corporate economist at Navy Federal Credit Union. Frick predicted there will be a recovery and better reports in the future, but said the expectations of a booming report were too optimistic. But he acknowledged the bad report in April was still a surprise. “Nobody expected it would be this early,” he said. The jobs report shed light on some of the current trouble spots, though economists say more data is needed to know exactly what’s going on. For example, even as overall employment rose, female employment dropped by 8,000, while female labor force participation dropped by 64,000. An obvious explanation, says Frick, is child care, which disproportionately falls on the shoulders of women. Republicans and conservative groups have zeroed in on generous unemployment benefits as the culprit behind the slowdown. “Government paying people more to stay home than to work has crushed the ability of businesses to get workers back, and this jobs report is evidence of that,” said Adam Brandon, president of the conservative FreedomWorks advocacy group. The U.S. Chamber of Commerce called for repealing the additional $300 weekly unemployment benefit that is in place until September.While the April jobs report was universally seen as a disappointment, economists by and large agree that one month does not a trend make. “It may be bumpy from month to month for a variety of factors,” Treasury Secretary Janet Yellen said Friday. “One should never take one month’s data as an underlying trend.” As more data becomes available, analysts will be able to sharpen their views as to what is causing the labor market to hold back.
Millions Are Unemployed. Why Can’t Companies Find Workers? – WSJ – In a red-hot economy coming out of a pandemic and lockdowns, with unemployment still far higher than it was pre-Covid, the country is in a striking predicament. Businesses can’t find enough people to hire.Rising vaccination rates, easing lockdowns and enormous amounts of federal stimulus aid are boosting consumer spending on goods and services. Yet employers in sectors like manufacturing, restaurants and construction are struggling to find workers. There are more job openings in the U.S. this spring than before the pandemic hit in March 2020, and fewer people in the labor force, according to the Labor Department and private recruiting sites.Surveys suggest why some can’t or won’t go back to work. Millions of adults say they aren’t working for fear of getting or spreading Covid-19. Businesses are reopening ahead of schools, leaving some parents without child care. Many people are receiving more in unemployment benefits than they would earn in the available jobs. Some who are out of work don’t have the skills needed for jobs that are available or are unwilling to switch to a new career.Hiring has been robust recently, despite the labor shortfall. U.S. employers added 916,000 jobs in March, according to the Labor Department, and economists project that the April jobs report, due out Friday, will show employers added 1 million more. Weekly unemployment claims fell to 498,000 last week, a new low since the pandemic began. Still, the shortage threatens to restrain what is otherwise shaping up to be a robust post-pandemic economic recovery. Some businesses are forgoing work, such as not bidding on a project, delivering parts more slowly or keeping a section of the restaurant closed. That reduces the pace of the economy’s expansion. Other companies are raising wages to attract employees, which could inflate prices for customers or reduce profit margins for owners. Workers could stand to benefit from a temporary reduced supply of labor. They could command promotions and better wages, which they then could spend in their communities, boosting economic output. They might also be able to negotiate more flexible schedules or other perks. Analysts say the labor shortages should ease over time as more potential workers are vaccinated, schools fully reopen and federal benefits expire, though the process could take months and the impacts are already being felt. March job openings rose 34% compared with January 2020, before the pandemic took hold in the U.S., iCIMS said. Meanwhile, the number of job applications was down 13% in March from the pre-pandemic level. A Federal Reserve report in April described shortages across numerous occupations, including drivers and housekeepers. An April survey by job search site ZipRecruiter found fewer job seekers felt financial pressure to take the first job offer they received – 35% compared with 51% when the same question was asked in 2018. More than half the people surveyed said they preferred a job where they can work from home, and 45% said they would want that option after the pandemic abates. “The pandemic has changed people’s motivations,” said ZipRecruiter economist Julia Pollak. “Employers may need to be patient, as vaccines are still being rolled out, and may have to become more flexible in order to find workers.”
1 in 6 US workers say they keep unwanted jobs for health insurance –One out of every 6 adult workers said they remained in their unwanted jobs out of fear of losing their health benefits, according to a new survey released Thursday. The survey, conducted by West Health and Gallup, found that 16 percent of adult workers in the U.S. have stayed in jobs that they might have otherwise left because they do not want to lose their employer-sponsored health insurance. Black workers were 50 percent more likely to find themselves in this situation. According to the survey, 21 percent of Black adults are currently in a job they want to leave but won’t out of fear of losing health insurance benefits, compared to 14 percent of white adults. Sixteen percent of Hispanic workers said the same. Annual household income was another factor that influenced whether adults are remaining in jobs for health benefits. According to the survey, adults making less than $48,000 a year were among the most likely to stay in an unwanted job, at 28 percent. That rate dropped to 10 percent for adults with an annual household income of more than $180,000. Last May, the Kaiser Family Foundation released a study that estimated about 27 million people could lose their employer-sponsored health insurance during the pandemic because of job losses.
Virginia governor planning to lift COVID-19 occupancy restrictions on June 15 –Virginia Gov. Ralph Northam (D) is planning to lift COVID-19 occupancy restrictions on June 15. Northam said during a press conference on Thursday that he will likely lift the remaining restrictions as long as vaccination numbers trend upward and cases continue to decline. “If our COVID numbers keep trending down, and our vaccination numbers keep going up, we plan to lift our mitigation measures, capacity restrictions and social distancing requirements on June 15,” Northam said. Northam said that the state would follow the mask guidelines from the Centers for Disease Control and Prevention. Last Thursday, the state updated its mask guidance to allow fully vaccinated individuals to not wear masks outdoors when alone or in small gatherings. The announcement follows several moves Northam has taken to reopen the state. Late last month, Northam announced that expanded capacity limits and limits on social gatherings would begin on May 15. Officials said that Northam’s state of emergency declaration expires June 30, but it would likely be revisited to address how to go about mandating masks indoors. Northam said Thursday that the state is seeing less than 1,000 new cases of the coronavirus per day for the past two weeks, with a 4.4 percent positivity rate. The seven-day average is lower than it has been since early October. Just under 46 percent of the state’s population has received at least one dose of a vaccine, while 33 percent have been fully inoculated.
Cuomo Unveils Vaccine-Segregated Access To Yankees/Mets Games — New York and its neighbors New Jersey and Connecticut announced Monday that they would lift most of their pandemic restrictions, allowing some sort of normalcy to return after more than a year of restrictions that limited capacity at restaurants and bars, sports and entertainment venues, and cultural and religious gatherings. Now in a bid to get everyone vaccinated, New York State Governor Andrew Cuomo is offering free vaccines at baseball games. Cuomo, who announced Wednesday at a press conference that his administration is teaming up with two Major League Baseball teams, including New York Yankees and New York Mets, to vaccinate fans at games. In return, the fans will receive a “free ticket.” The @Mets, the @Yankees & @HealthNYGov are teaming up so that when you go to a game you can can get a vaccine right at the stadium. When you do, you’ll get a free ticket.So if you love baseball (& protecting your community) – go to a game, get vaccinated & get a free ticket! – Andrew Cuomo (@NYGovCuomo) May 5, 2021Then the governor also noted a new segregation policy: Starting May 19, full capacity seating at Yankee Stadium & Citi Field will be available for fully vaccinated people.For unvaccinated, the capacity will be 33% to comply with CDC social distancing rules. Masks will be required for all fans.
NYC Pitches Free Vaccines for Tourists in Bid to Expedite Post-Pandemic Recovery New York City wants to roll out mobile vaccination sites for visiting tourists as the five boroughs look to revive their vibrancy post-pandemic, Mayor Bill de Blasio says. De Blasio described the program, which would target tourists with free Johnson & Johnson doses at popular attractions, leaving them fully vaccinated (though not yet immune) to enjoy their stay in the city and reap the benefit of convenience. The mayor says the state needs to modify the rules around vaccination a bit to approve the administering of shots to non-New Yorkers who don’t work here, but he said his team was working with Gov. Andrew Cuomo’s administration to get it done. De Blasio says the mobile vans are ready to roll out as early as this weekend at spots ranging from the Empire State Building and Times Square to Brooklyn Bridge Park, the High Line and Central Park, among others, pending the state’s green light. “This is a positive message to tourists. Come here, it’s safe, it’s a great safe to be and we’re gonna take care of you,” de Blasio said. “We’re going to make sure you get vaccinated while you’re here with us.”
Covid and Travel: Why an Estimated 100,000 Americans Abroad Face Passport Problems – Consular appointments for U.S. citizens overseas are nearly impossible to come by as many embassies, plagued by Covid restrictions and staff reductions, remain all but closed. About 9 million U.S. citizens currently live abroad, and as the light at the end of the pandemic tunnel finally appears, immigration lawyers estimate more than 100,000 can’t get travel documents to return to the United States.Despite the State Department making headway on a massive backlog of passport applications in the early months of the pandemic, many consulates and embassies abroad, plagued by Covid-19 restrictions and staffing reductions, remain closed for all but emergency services. Travel is restarting, but for American expats who had a baby abroad in the past year or saw their passport expire during the pandemic, elusive appointments for documents are keeping them grounded.”It’s a real mess,” . “It’s a giant, multilayered onion of a problem and the reduction of staff as a result of Covid at the consular posts has really thrown the State Department for a loop.”Michael Wildes estimates that the number of stranded Americans abroad is in the hundreds of thousands.”Our offices have been inundated,” he said. “We’ve been getting at least 1,200 calls a week on this, which is about 50 percent more than last year. The problem is more robust than people realize, and this isn’t how a 21st-century society should work.”In Israel alone, the U.S. Embassy has a passport backlog of 15,000 applications, according to The Jerusalem Post. American Citizens Abroad, an advocacy organization for U.S. expats, sent an official request to the State Department in October 2020 to prioritize Americans’ access to consular services abroad, “but people are still experiencing delays,” said the organization’s executive director, Marylouise Serrato.In Mexico, which is believed to have more American expats than any other country, a recent search on the appointment database for the U.S. Embassy in Mexico City showed zero available appointments for passport services, even with emergency circumstances (appointments from July onward have not yet been released).At the U.S. Embassy in London, the availability of appointments for both in-person passport renewals and obtaining an official record of a child’s claim to U.S. citizenship, known as a Consular Report of Birth Abroad, plummeted when Britain went back into lockdown last fall. Amanda Brill, a London-based U.S. immigration attorney, said that since November, appointments have been nonexistent for both. “You can imagine that if you’re a U.S. citizen and you’ve had a baby in the past six months, it is frustrating at best and incredibly stressful for citizens returning to America,” she said.
Asian woman bashed with hammer after stranger demands she remove mask — The New York Police Department’s (NYPD) Hate Crimes Task Force is investigating after two Asian women were attacked in Manhattan on Sunday, with one being hit in the head with a hammer. The Asian women, ages 31 and 29, were seen walking on a sidewalk when an individual approached them and demanded they remove their face masks. The individual, who was seen wearing all black, then attacked the women and “struck the 31-year-old in the head with a hammer causing a laceration,” according to a statement from the task force on Twitter. The task force also shared video of the violent incident on Twitter, during which several bystanders can be seen nearby. The woman who was hit with the hammer, identified only by her first name, Theresa, told ABC7 in New York that she is in shock over the incident. “She was talking to herself, like talking to a wall, I thought maybe she was drunk or something, so we just wanted to pass through her quickly and when I passed through her, she saw us and said ‘Take off your f—ing mask,’ which is shocking,” Theresa told the outlet. “Suddenly I felt my head get hit by something.” The Hate Crimes Task Force urged people with potential information to contact the NYPD. Authorities are investigating the attack as a possible bias crime, according to multiple reports. Medics took the 31-year-old victim to a nearby hospital in stable condition with cuts on her head.New hate crime data from the Center for the Study of Hate & Extremism at California State University-San Bernardino found that hate crimes against Asian Americans rose by 169 percent when comparing the first quarter of 2020 to the first quarter of 2021 in 15 major U.S. cities. The highest increase was documented in New York, where hate crimes jumped 223 percent.
Education secretary expects all schools to fully reopen in-person in fall — Education Secretary Miguel Cardona said Thursday that he expects “all schools” to fully reopen in the fall, setting the tone for the Biden administration’s push for a return to normal for the upcoming school year. “With regard to … September, yes, I expect all schools to be open full-time in person for all students,” Cardona said on MSNBC’s “Morning Joe.” “We really need to make sure students have the opportunity to learn in the classroom, and quite frankly, I’d rather have it this spring.” “Students don’t learn as well remotely,” he added. “There is no substitute for in-person learning.” The Education secretary’s comments came as the administration celebrated reaching its coronavirus pandemic goal of reopening a majority of K-8 schools to in-person instruction five days a week by Biden’s 100th day in office last week. A survey released by the Education Department on Thursday determined that 54 percent of public schools below high school were providing full-time in-person learning, according to The Associated Press. The percentage has risen from 46 percent in January. “Until we’re at 100 percent we must keep our foot on the gas pedal,” Cardona said. Nearly 40 percent of schools are still fully teaching remotely, and about 20 percent are conducting hybrid programs, with time split between in-person and online learning. “We’re really reaching out to make sure that in places where they’re not offering in-person learning or full-time in-person learning – we want to make sure we’re supporting those states, those districts to find out why they’re not,” said Cardona. Biden had announced his reopening goal amid disapproval from Republicans, who have called for a quicker return to in-person learning since the pandemic disrupted education early last year.
Drug overdose deaths hit record high in West Virginia in 2020 — West Virginia, the national epicenter of the opioid crisis for the past decade, saw its fatal overdose rate spike by at least 45 percent in 2020 according to data from the state Office of the Chief Medical Officer. The increase is a reversal of two years of declining drug deaths and marks a new record as drug companies responsible for dumping millions of opioids into the state fight lawsuits in West Virginia. Preliminary figures show at least 1,275 residents died of overdoses last year, up from 878 in 2019. The new numbers could rise as more autopsies are completed. Statewide, the Charleston Gazette-Mail reported April 26, “15 counties at least doubled their number of fatal overdoses between 2019 and 2020. Only eight saw drops. Of those eight, none saw decreases of more than five cases.” Of the 1,275 fatal overdoses, 955 involved fentanyl. Southern and coalfield counties in the state fared the worst, with McDowell County – home to the once-mighty mining center of Welch – tripling its fatal overdose rate. Logan County, another former mining stronghold, had the highest drug death rate per capita, at 159 per 100,000. The urban center of Huntington and its surrounding Cabell County registered 158 deaths per 100,000. This rate is nearly eight times the national average, which has also tripled in the past five years. Nationwide last year, preliminary federal Centers for Disease Control and Prevention (CDC) data analyzed by the health policy foundation the Commonwealth Fund found overdose deaths may have surpassed 90,000, up from 70,630 in 2019. That jump is the largest in more than 20 years. The Gazette-Mail reports that in addition to heroin and opioid painkiller overdoses, deaths from methamphetamines have seen “a more than 1,000 percent increase over 2015” across the state, with meth use spiraling in coalfield counties.
U.S. Births decreased in 2020, “Lowest number of births since 1979” – From the National Center for Health Statistics: Births: Provisional Data for 2020. The NCHS reports: The provisional number of births for the United States in 2020 was 3,605,201, down 4% from the number in 2019 (3,747,540). This is the sixth consecutive year that the number of births has declined after an increase in 2014, down an average of 2% per year, and the lowest number of births since 1979.The provisional general fertility rate (GFR) for the United States in 2020 was 55.8 births per 1,000 women aged 15 – 44, down 4% from the rate in 2019 (58.3), another record low for the nation. From 2014 to 2020, the GFR declined by an average of 2% per year … The provisional birth rate for teenagers in 2020 was 15.3 births per 1,000 females aged 15 – 19, down 8% from 2019 (16.7), reaching another record low for this age group. The rate has declined by 63% since 2007 (41.5), the most recent period of continued decline, and 75% since 1991, the most recent peak.Here is a long term graph of annual U.S. births through 2020. Births have declined for six consecutive years following increases in 2013 and 2014. Note the amazing decline in teenage births. With fewer births, and less net migration, demographics are not be as favorable as once expected. There is much more in the report.
US birth rate declines to lowest point in more than a century -The birth rate in the United States continued its long-term decline in 2020, according to figures released Wednesday by the Centers for Disease Control and Prevention (CDC), which showed a 4 percent drop. Even more alarmingly, the decline doubled to 8 percent in the month of December, the first month that births were affected by the coronavirus pandemic, which came to widespread public attention in the US during the month of March 2020. A separate Associated Press report found that the plunge in December continued in January 2021 and February 2021, with births down 9.3 percent and 10 percent respectively, compared to the same month in 2020. The CDC gave a provisional figure of 3.6 million for the total number of US births in 2020, just slightly ahead of the 3.4 million estimated deaths. It was the lowest total number of births for the United States since 1979. In 2019, by contrast, 3.747 million people were born and 2.854 million died in the US, for a net gain, not counting immigration, of 907,000 people. The net gain in 2020 was barely 200,000. At the birth rates shown in December 2020 and the first two months of 2021, the US population will actually be declining, not counting immigration. The Associated Press report found that 25 American states had more deaths than births last year, compared to only five states in 2019. The birth rate has been declining steadily in the United States since the Wall Street crash of 2008 and the subsequent deep recession. Whereas in previous crises, such as the Great Depression of the 1930s, the birth rate fell sharply for several years and then rose again, there has been no such rebound from 2008. This decline has been particularly sharp among younger women, those aged 20-24, where the birth rate has declined by an astonishing 40 percent since 2007. Over the same period, the birth rate for all women has dropped by 19 percent. The result is that the average age of women at their first time giving birth has risen from 23 in 2010 to 27 in 2020, a substantial increase in only a decade. The birth rate declined across every race and ethnicity, demonstrating that it is a response to broader economic and societal pressures, particularly the impact of the 2008 crash and the subsequent protracted economic crisis on the working class as a whole. There are complex social interconnections and processes underlying this decline in childbearing, related to advances in contraception which make having a child much more of a conscious decision on the part of women and their partners. Women have been able to attend college in much greater numbers and enter into careers in the workplace, and thus have delayed childbearing, or opted out altogether. But the more recent drop is clearly the consequence of overriding economic factors. For a protracted period, from the 1980s on, the lifetime reproductive rate for American women oscillated around the figure of 2.1 children, roughly corresponding to the number required to keep the existing population stable, known as “replacement-level fertility.” This has dropped since 2008 to only 1.6 children per woman in a lifetime, well below the level of replacement.
Condom sales skyrocket as vaccinated singles get ready for a summer of sex, experts say — Condom sales have skyrocketed as hot vax summer approaches andmore people sign up to get their COVID-19 vaccine. US condom sales increased by 23.4% within four weeks in late March and early April, according to research firm IRI, CNN reports. CVS and Walgreens representatives also told the site they’ve seen a spike in condom sales in the last month – a CVS spokesperson called the increase “substantial.” Condom company executives say young people – who’ve been forced to social-distance for more than a year – are anxious to date and have casual sex again.”18-to 24-year-olds can’t wait to get their social lives back,” Britta Bomhard, chief marketing officer at the producer of Trojan condoms Church & Dwight, told CNN. Condom companies are optimistic about this upward trend, hoping to recoup losses from the slump in condom sales reported throughout the pandemic.A Durex condom representative told CNBC condom sales were impacted because “the level of socialization [was] low” during June and July of the pandemic in certain countries, leaving less room for sexual encounters. According to the Match.com 2020 Singles in America Survey, 71% of singles reported they haven’t had sex during the pandemic. However, trends indicate that things are looking up for both condom sales and sex lives. In addition to the steady increase of condom sales in the US, condom and sex toy brand SKYN found people reported their sex drives are ramping up, too.According to the 2021 SKYN Sex & Intimacy Survey, “39% of respondents reported experiencing an increased sex drive since the start of the pandemic.”
Modi Resists Pressure to Lock Down India as Virus Deaths Rise –Two weeks ago, Indian Prime Minister Narendra Modi called on states to only consider lockdowns “as the last option.” Now everyone from his political allies to top business leaders and U.S. President Joe Biden’s chief medical adviser see them as the only way to stem the world’s worst virus outbreak. The debate has been complicated by Modi’s move last year to impose a nationwide lockdown without warning, spurring a humanitarian crisis as migrant workers fled on foot to rural areas. While Modi is keen to avoid that criticism again, particularly after his Bharatiya Janata Party failed to win an election in West Bengal when votes were counted Sunday, even states run by his party are ignoring his advice.”One of the problems is this false narrative that it’s either a full lockdown, which equates to economic disaster, or no lockdown, which is a public health disaster,” “What’s happening now is a health and an economic disaster. If you have huge swaths of your population getting sick, that’s not good for your population or your economy.” In the past week, television channels and social media have been flooded with grim scenes of overcrowded crematoriums and desperate pleas for oxygen from hospitals. On Tuesday, the country reported more than 357,000 new infections to cross 20 million cases, as well as 3,449 deaths. India’s richest banker Uday Kotak, who heads the Confederation of Indian Industry, urged the government to deploy the military to help care for patients and to take the “strongest national steps including curtailing economic activity to reduce suffering.” “We must heed expert advice on this subject — from India and abroad,” he said. This represents a shift from India’s top business leaders. In April, a survey of the confederation’s members showed they were against lockdowns and wanted swift vaccination. In the past month however, the collapsing health infrastructure and mounting death toll has revealed the extent the crisis. Although policy makers have signaled they are ready to take steps to support growth, economists say a failure to flatten the virus curve could exert pressure on monetary and fiscal policies at a time when most of the conventional space available has already been used. The most immediately effective way to break the chain of transmission is to keep people far enough apart that the virus can’t jump from one to another. But others say complete national lockdown isn’t possible and would be disastrous for the poor, who have already suffered the most during the outbreak. The federal government has left it open for states to decide on local lockdowns, and places like the national capital Delhi and the financial hub Mumbai have imposed restrictions — though they are less strict than last year.
Indian state elections deliver blow to Modi, amid COVID-19 catastrophe –Indian Prime Minister Narendra Modi and his far-right Bharatiya Janata Party (BJP) national government have suffered a major setback in five state assembly elections held in late March and April, but whose results were only tabulated on Sunday. The Hindu supremacist BJP fell far short of what it had loudly proclaimed to be its principal goal – wresting power in West Bengal, India’s fourth most populous state, from Mamata Banerjee and her Trinamool Congress. Banerjee is a right-wing demagogue, who came to power in 2011 exploiting mass anger over the Stalinist-led Left Front’s implementation of what it itself termed “pro-investor” policies. But the BJP views her as an adversary and calculated that a victory in West Bengal would give it a much needed political boost in the face of mounting opposition to its class war, communalist authoritarian agenda. Hoping to bank on its strong performance in West Bengal in the 2019 national election, the BJP poured enormous energy and resources into its campaign to defeat Banerjee. Modi and his chief henchman, Home Minister Amit Shah, held numerous rallies in West Bengal, where they shamelessly sought to polarize the electorate along communal lines, by championing their anti-Muslim Citizenship Amendment Act and denouncing Banerjee for “Muslim appeasement” and abetting “foreign infiltration.” However, the BJP failed even to match its 2019 vote share, while the TMC’s rose by 4 percentage points to more than 48 percent, enough to win 214 of the 294 state assembly seats. In Tamil Nadu, the sixth largest state, the BJP’s regional ally, the AIADMK, went down to defeat after 10 years in office. In the neighbouring southern state of Kerala, the BJP lost its sole state assembly seat. India’s ruling party did retain power in the northeastern state of Assam at the head of a coalition government. Its only other consolation came in Puducherry, a Union Territory and former French colonial enclave with a population of 1.25 million. There it was able to gain a share of power as the junior partner of a local Congress Party splitoff. The five states that went to the polls this spring have an aggregate population of 255 million, making them home to about 18 percent of all Indians. The campaign unfolded as COVID-19 cases surged across the country, transforming India into the pandemic’s global epicenter. Nevertheless, until the very final stages of West Bengal’s eight-phase election, Modi and the other party leaders recklessly continued to hold mass election rallies. This was part of a concerted campaign, spearheaded by Modi and his BJP, but supported by the entire political establishment, to systematically downplay the virus’ danger and project an air of normalcy to justify their keeping the “economy open.” India has been averaging more than 100,000 new COVID-19 infections since April 7; 200,000 since April 17; and 300,000 since April 24. As a consequence, India’s dilapidated health care system has been overwhelmed leading to mass deaths. Officially India has recorded more than 20,000 COVID-19 deaths in just the past seven days. But this is widely acknowledged to be only a fraction of the true death toll. “From all the modeling we’ve done, we believe the true number of deaths is two to five times what is being reported,” University of Michigan epidemiologist Bhramar Mukherjee told the New York Times. There is mounting mass anger against the Modi government. Over its criminal mishandling of the pandemic. Over its attempts to “revive” India’s economy through further austerity, an accelerated privatization drive, a battery of pro-agribusiness laws, and a labour code “reform” that promotes precious contract-labour jobs and outlaws most strikes. And over its moves to further integrate India into US imperialism’s military-strategic offensive against China.
India’s national government looks increasingly hapless – Two short months ago Narendra Modi’s government was one of the most popular and confident in India’s history. Now, judging by fresh election results, by the eruption of criticism even in the largely docile mainstream media, by sharp reprimands issued by top courts, by thumbs-down judgments by seasoned analysts and by a level of rage on social media unusual even for India’s hothouse online forums, the prime minister and his government are in trouble.It is not simply that evidence has mounted of repeated failures to heed warnings of an impending second wave of covid-19, including from the government’s own health experts. Nor is it just that Mr Modi and his team have struggled to respond to a calamity greater than India has experienced in generations. Indians are accustomed to ineptitude and meagre support. Rather it is a sense of utter abandonment, especially among the politically noisy middle class, that is driving the anger.The epidemic continues to worsen. On May 5th the country reported over 412,000 new infections, its highest number yet. Half of all cases of covid-19 recorded around the world are in India, up from one in 25 at the start of March. The number of covid deaths tripled in March, and then in April leapt by a factor of ten. With a quarter of all tests in the country returning a positive result, up five-fold in the past month, it is clear that India’s monster second wave has yet to reach its peak. Already nearly a quarter of a million Indians have died after being infected by the virus, and that is going by the government’s own numbers.For any country to suffer such devastation is awful enough. But even as the official death toll has mounted, faith in its accuracy has sunk. Epidemiological and anecdotal evidence point to massive undercounting. Journalists across India have detailed scores of cases where official tallies are much lower than those gathered from hospitals, crematoriums and obituaries. In rural areas, where two-thirds of the population lives, both data and health care are even harder to come by. Partly as a result, a curve that has moved as sharply as the one describing infections is the one tracing the reputation of India’s government, albeit in the opposite direction.Mr Modi has done himself no favours. During much of March and April he devoted far more energy to campaigning in one state election, in West Bengal, than to increasingly urgent cries of panic. In response to the revelation that his government had hugely miscalculated the availability of vaccines, he turned to showmanship, declaring a national “Tika Utsav” or Inoculation Festival. Since it was launched, the number of people getting vaccinations every day has fallen by half, owing to shortages. Belatedly addressing the public on April 20th, Mr Modi warned against lockdowns and called instead for testing, isolating the infected and tracing their contacts. Recognising that it was too late for such measures to have any effect, most Indian states and big cities locked down anyway.The crisis has forced Mr Modi’s government into embarrassing policy reversals. Its vaccine campaign, touted in January as the world’s biggest and most generous, has been sharply adjusted. After banning vaccine exports to address the national shortfall, the government abruptly declared that individual states and private actors would have to bear half the burden. Despite proclaiming self-reliance as the hallmark of his new India, Mr Modi broke with a policy begun by the previous government of rejecting foreign aid, and welcomed planeloads of medical supplies donated by more than a dozen foreign governments. The severity of shortages, particularly of oxygen, and the wrenching and very public misery caused by this growing disaster made it impossible not to.
Nationalism Kills -THE MASS FUNERAL PYRES continue to burn all over India. After Covid-19 case numbers rocketed upward throughout April, the surge became cataclysmic in the first week of May. Patients were dying at the gates of hospitals, their relatives desperately trying to find them beds and oxygen cylinders. On Tuesday, May 4, the country passed the grim milestone of twenty million cases. The official death count – whose numbers are, by everyone’s admission, vastly underestimated – reached 226,188 people. These were the dead who were counted as having died of Covid despite the informal instructions given to health authorities to classify the deaths as Bimari, the Hindi word for “sickness,” rather than of Covid-19. The tenor of the central government, led by Prime Minister Narendra Modi, was recalcitrant, never once admitting that the mass election rallies and fervent religious commemorations on the banks of the Ganges played any part at all in India’s grim reality. Their focus remained on “good” news, a request that the country’s television media, which relies on licensing by the Modi government, was glad to follow. In a debate held Wednesday evening on Republic TV, a pro-Modi channel, six doctors from various parts of India were asked to discuss the positive news that cases were below the peak of four hundred thousand per day for the past two days. This, the moderator and most of the doctors insisted, was because the surge was now under control. Only one of them, a Dr. Ishwar Gilada, had the guts to openly state the obvious. He said that case numbers were down because there are no tests left to administer. He reviewed peaking caseloads around the country and suggested the numbers could go higher. “We are in very bad shape,” he said. Americans sadly are familiar with this deadly numbers game that is the single trick of the nationalist pony. It featured as a central theme of the Trump administration’s handling of Covid, which even as late as July 2020 opposed funds for contract tracingto be included in the second Covid relief package. The president was even more strident about holding back testing. “If we stopped testing right now, we’d have very few cases, if any,” he told reporters at the White House. The mass rallies, the eschewing of masks, and the creative statistics are not the only bits the Modi administration seems to have copied exactly from the Trump administration’s playbook. Just as Trump persisted with his lethal rallies, the Modi administration, which wants to transform India into a Hindu state, took out full-page advertisements in Indian dailies saying it was safe to participate in the Kumbh Mela, a gathering of millions that involves a dip in the Ganges. So, too, did they ask masses of people to participate in election rallies in the state of West Bengal, a state Modi’s Bharatiya Janata Party ended up losing anyway.Ever since India plunged into the dark and hapless place it finds itself, the Modi administration has blamed state governments for the spread of Covid. Delhi, which is one of the epicenters of the surge and from where many of the ghastly images of endlessly burning funeral pyres have emerged, is controlled by the Aam Aadmi Party (Common Man Party). The chief minister, Arvind Kejriwal, a foe of Prime Minister Modi, has claimed that the central government is not even providing the city of almost seventeen million with its allotted quota of oxygen, let alone what it actually needs.
Thousands flock to community pantries in the Philippines as Covid-19 rapidly spreads –A grass-roots movement of mutual aid, in the form of community pantries, is spreading in the Philippines amid the raging COVID-19 pandemic and the continuation of the herd immunity policy of the ruling elites. The pantries are set up on the side of the street, often on just a wooden table laden with basic food items. Sections of better off workers, the self-employed, and small businessmen have spontaneously mobilized to give the little extra they have to those desperately poor and the unemployed who, in the hundreds and thousands have endured long lines to obtain food supplies for themselves and their families. The movement was sparked off on April 14 when Ana Patricia Non, 26-year-old business owner of a small furniture making shop, set up a wooden push cart on Maginhawa street in Quezon City. It had a few vegetables, oranges, canned goods and plastic bags of rice and two signs. One sign read, “Maginhawa Community Pantry” and the second, translated from Filipino, “Give what you can, take what you need.” On the second day of Non’s initiative, ABS-CBN news reported that among her “customers” was a street sweeper. She had stopped during her cleaning and bagged one head of cabbage, one turnip, a chayote and an orange. She planned, she said, after her shift, to mix the vegetables with sardines for her children. It would be the first produce that she had brought home in two weeks, when she was last paid. The news site also reported that an elderly couple, who had been foraging through the garbage, took bananas, some greens, and a couple of vitamin capsules from the pantry. “I really have nothing, no hope,” said the man, who was on crutches. In the weeks since then, this first pantry has served over 3,000 people. According to the Saan May Community Pantry? [Where is a Community Pantry?> website, 725 pantries have been set up around the Philippines. A report stated that a community pantry has even been set up in East Timor. Images in the media reveal the degree of desperation for basic resources in the population. Crowds of hundreds line the pavement to try to get a few free vegetables and a canned good or two. The lines often begin forming at three in the morning. An old man, who worked as a roadside vendor, died of heatstroke last week while standing in a line to receive a few free items of food. He had been waiting since long before dawn.
Brazilian senate votes to suspend patents in bid to widen access to Covid-19 vaccines – After a year of politicking, the Brazilian senate passed a bill that would permit the government to temporarily suspend any and all patents for medical products that could be used to fight Covid-19, as well as any future public health emergency declared by Brazilian authorities or the World Health Organization. Any license would be valid only for the duration of such an emergency.The legislation now goes to the lower house of Congress, although it remains unclear if it will have the same level of support. At the time the bill was introduced a year ago, the government of President Bolsonaro publicly opposed proposals to suspend patent protections, arguing such a move could endanger talks with vaccine makers. We asked his office for comment and will pass along any reply.
Global consumer price surge hits workers –Over the last week leading businesses, banks and financial analysts have released estimates predicting that global consumer prices, whether toilet paper, electronics, or food, have and will continue to rise substantially in 2021. Already in the United States, the Consumer Price Index, a measure of average prices, increased by 0.6 percent in March, the largest monthly increase since August 2012. In the UK, prices increased by 0.7 percent in the same month. At the Berkshire Hathaway annual shareholder meeting this past weekend, billionaire Warren Buffett said, “We are seeing substantial inflation. We are raising prices. People are raising prices to us, and it’s being accepted.” He described the economy as “red hot.” A list of major global brands has already announced major price increases:
- Kimberly-Clark, which owns Kleenex and a host of other bathroom and hygiene products, said it would increase prices on all major products in North America due to “significant” cost inflation, increasing prices 5 to 10 percent.
- Procter & Gamble, which owns dozens of leading household brands, including Tide, Gillette, Crest, Pampers, Dawn, Swiffer, Ivory, IAMS and Head & Shoulders, will increase prices in personal care products 5 to 10 percent to “offset significant commodity cost inflation.”
- General Mills’ chief financial officer (CFO) of the global food processor told analysts on a call that it was facing “increased supply-chain and freight costs ‘in this higher-demand environment,'” according to the New York Times.
- Whirpool’s CFO told Yahoo Finance that it was increasing the cost of its products by 5 to 12 percent in response to rising steel costs. Steel prices are up about 75 percent since March 2020.
- Kraft Heinz’s CEO Miguel Patricio told Reuters that there would be increases to food products such as salad dressings, sweets, mac & cheese, and other wheat-containing products, as well as mayonnaise.
- Unilever, a major global food manufacturer, owner of Lipton, said there would be a high, single-digit percentage increase in costs.
These cost increases will disproportionately impact the working class, who spend a larger portion of their income on food and basic consumer goods. In the US, for example, the bottom quintile of the population spends 36 percent of its income on food, whereas the average household spends 13 percent on food. Already, workers throughout the world face a grim job market, where wages and employment levels remain below pre-pandemic levels. Bloomberg has estimated that some 150 million “middle class” global workers, making between $10 and $20 a day, have been pushed back below that wage group. The International Labor Organization estimated in January that an equivalent of 255 million full-time jobs were lost due to the pandemic. In this context of extreme economic difficulty, rising prices will severely impact the livelihoods of workers.
COVID-19 death of 13-year-old Brampton girl underscores criminality of Canada’s open economy/open schools policy – The tragic death of a young teenage girl in Brampton, Ontario has brought home the terrifying reality to parents across Canada that despite what they have been told by the political and media establishment, they can lose their young children to COVID-19. On April 22, Emily Victoria Viegas became one of the youngest Canadians to die from the disease when she was found unresponsive by her brother in their shared bedroom. In a scenario that is all too common for working class families across the country, COVID-19 spread throughout Emily’s family. Emily’s mother was in hospital on oxygen at the time of her daughter’s death, and her younger brother had also contracted the virus. Emily’s father, Carlos Viegas, a warehouse worker, was the only member of the family not to test positive for the virus, but both Brampton schools and warehouses have been ravaged by COVID-19 infections. Emily’s tragic, entirely preventable death has triggered an outpouring of anger towards the political elite and solidarity with the stricken family across Canada. A fundraiser to support the family gathered donations of over $112,000 in a matter of days. A rural family doctor wrote on Twitter, “NO MORE CROCODILE TEARS. A Brampton family has lost their 13 yr. old child. Her mother remains in hospital. This hard hit area was supposed to have been prioritized for vaccines, but promises aren’t action. [Ontario Premier Doug Ford] tell us the concrete actions you’re taking now or RESIGN.” A parent tweeted, “I hear calls not to politicize Emily Viegas’ death. My son died from failed public health measures. I desperately wish every single politician in the last five years had taken Jude’s death as a call to action so there’d never be another family like mine. Fix what’s broken.”Emily Victoria Viegas’s death did not occur in a vacuum. It was the direct result of the policy decisions made by the Justin Trudeau-led federal Liberal government, Ontario’s Conservative government and their counterparts across the country, at the behest of Canada’s capitalist elite. The most consequential of these decisions was to prioritize the protection of corporate profits over human lives, keep the economy and schools open at all costs, and refuse to provide adequate financial support so that families like Emily’s could shelter safely at home until the pandemic was contained.
Germany’s official COVID-19 contagion policy puts hundreds of thousands of students and educators at risk – The amendment to Germany’s Infection Protection Act, passed last week, reinforces the government’s reckless contagion policy in schools and threatens the health of thousands of students and educators.New COVID-19 infections in Germany have averaged around 20,000 per day in recent weeks. That is more than three times the total at the peak of the first lockdown. According to the latest report by the renowned Robert Koch Institute (RKI), coronavirus infection figures have increased among younger people, largely due to the opening up of schools.The RKI assesses the threat to the health of the population as very high. Particularly threatening are the increasing mass outbreaks in day-care centres, schools and workplaces. This is especially dangerous against the background of the rapid spread of British, South African and Brazilian variants, which are more contagious and frequently lead to severe health consequences, including among younger people.Since autumn, 335 cases of pupils, 129 of teachers and 182 of other educators are reported to have been hospitalised because of COVID-19. Three teachers and six education care staff have died from the disease. The number of unreported cases is much higher, with information only available for those officially registered as infected.As the World Socialist Web Site has already reported, the government’s coronavirus “emergency brake” is utterly ineffective. It stipulates that nationwide in-person classes will continue as long as the seven-day incidence figure for infections does not exceed 165.Scientists have been saying for months that this level is much too high. When German schools were due to reopen after summer holidays last year, the RKI recommended schools adopt reduced alternate teaching rotas based on an incidence of 35 and to revert to online, distance teaching when the incidence reached 50.The fact that the value of 165 is purely arbitrary and has no scientific basis can be seen from the fact that only 170 districts closed schools despite high infection levels after the “emergency brake” was applied much too late. In addition, according to the RKI, incidence levels among 5- to 14-year-olds, i.e., the group that goes to school, is significantly higher than among the rest of the population. For this younger age group, the incidence is above 165 in 277 regions and between 100 and 165 in 93 regions.
German factories and low-income neighbourhoods left exposed to massive COVID-19 outbreaks — People are getting infected by COVID-19 at especially high rates in workplaces, schools and low-income neighbourhoods in Germany. Several studies and examples testify to this. Nonetheless, they receive virtually no protection and are largely excluded from lockdown measures. This also applies to the recently adopted “federal emergency brake.” For workplaces in particular, there are almost no protective measures and the few that exist are never reviewed and enforced. The number of workplace safety inspections declined during the first year of the pandemic by 15 percent. Factories must remain open so profits continue to flow, even if this means that workers’ health and lives are put at risk. The publicly funded media, big business and the trade unions are doing everything in their power to downplay the danger. Even directly affected work colleagues are often never informed about outbreaks in workplaces. Reports are usually restricted to the local media when larger outbreaks occur. Here are two typical examples: At the kitchen furniture producer Menke-Kuchen in Kirchlengen (North Rhine-Westphalia) around 20 workers have been infected, according to the head of the business, Hans-Dieter Menke. This was reported by the Neue Westfalische Zeitung on April 29. The first case was detected on the assembly line one week earlier. Tests by the local health authority then revealed that 20 workers, or one in six of the total workforce of 120, were infected. All of those infected and their contacts were sent into quarantine. An even larger outbreak occurred at the Bruggen vehicle plant in Lubtheen (Ludwigslust-Parchim district, Mecklenburg-Western Pomerania). Almost 200 of the workers, who build truck parts, tested positive. Most of them displayed COVID-19 symptoms. The outbreak is one of the largest to take place at a workplace in Mecklenburg-Western Pomerania. Infections spread exponentially among the production workers. Responsibility for this lies with the British variant of the virus, B.1.1.7, according to local medical officer Ute Siering. The incidence rose in the district to 227 per 100,000 inhabitants. Five hundred workers, almost all from the production department, were sent into quarantine. This amounts to half of the 1,000 workers employed at the site and more than 10 percent of the entire population of Lubtheen, which has 4,900 residents. A residential block near to the factory where many workers live was placed under quarantine. The production hall was closed last Friday for two weeks. Departments of the business separated from the production hall are continuing to operate. These two examples are the tip of the iceberg of countless outbreaks in factories, businesses and other workplaces.
Amid COVID-19 pandemic, Germany, France spend billions on new fighter jets -Germany, France and Spain are negotiating a multi-billion-euro project to develop a joint European fighter jet, the Future Combat Air System (FCAS). Brushing aside the over 1 million European deaths from COVID-19 due to the European Union’s (EU) “herd immunity” policy with the claim there is no money to fund a scientific social distancing policy, they are preparing to instead spend hundreds of billions of euros on war planning. Yesterday, French Junior Defence Minister for Armament Joel Barre announced that a final deal on the FCAS could be announced this week. A financing deal between Airbus and Dassault on the FCAS was already announced on April 6. Airbus, French defence contractors Dassault and Thales, and various subcontractors across Europe are the key firms involved in the FCAS, which is expected to replace both Dassault’s Rafale jet and the Eurofighter made by Airbus in 2040. Last month, German Defence Minister Annegret Kramp-Karrenbauer and her French counterpart, Florence Parly, met to discuss the FCAS program. This came amid reports that German Chancellor Angela Merkel’s conservative government is anxious to have the FCAS programme’s financing fully decided before the Bundestag (parliament) elections in September. Kramp-Karrenbauer declared that the programme is in a “very decisive phase.” She indicated that some final points, such as engine development, still need clarification, adding, “we as politicians expect the industry to jointly find a viable basis (for the next steps of the project) which we can accept.” There are continuing tensions, however, as German and French unions fight over which models and what factories would be most involved in building the fighter jet. For her part, Parly called the FCAS “above all a political project,” declaring: “It is above all the will of France and Germany to give the very best to our army and to build a European defence programme that both countries seek. Both of us think the same thing: we need an agreement by the end of the month.”
Infected Indian Foreign Minister Disrupts G-7 Summit In London —As India’s brutal second COVID-19 wave spills over its borders and across the region, a team of forecasters at the Indian Institute of Science in Bangalore has warned – using a mathematical model – that deaths could double as soon as next week, India’s foreign minister is now self-isolating after two delegates to recent G-7 meetings in London tested positive to the virus, Bloomberg reports. India’s External Affairs Minister Subrahmanyam Jaishankar was reportedly informed that he had been exposed to somebody infected with the virus on Wednesday, one day after Jaishankar held a socially distanced in-person meeting with UK home secretary Priti Patel on Tuesday, where the two agreed on a “migration and mobility deal’ which will provide a “bespoke route” for young professionals from India looking to live and work in the UK. Jaishankar also met Antony Blinken, the US secretary of state, earlier this week. As one twitter wit pointed out, the incident is like a metaphor for India’s current situation, as more public-health experts warn that India’s worsening outbreak risks reviving outbreaks in the US and Europe. Many countries have moved to cut off all non-essential travel between India for exactly this reason. As Bloomberg points out, the blowback could turn into an embarrassment for the US and the Biden Administration. The announcement could swiftly shut down a high-profile event that is supposed to mark the G-7 debut of Secretary of State Antony Blinken. The two-day event is being hosted by the UK. Fortunately, according to the FT, members of the Indian delegation hadn’t yet attended G7 meetings in Lancaster House, London, where talks took place on Tuesday and continued on Wednesday. The meetings, the first face-to-face gathering of the group’s foreign ministers in more than two years, were set to include representatives from Australia and India in some of the sessions alongside the G-7 advanced economies as the UK (and the US) seeks to strengthen its ties within the Indo-Pacific region.British PM Boris Johnson defended the decision to hold the G7 meetings in person, arguing that it was important for the government “to try to continue as much business” as possible despite the pandemic.
Union complains Trump’s Scottish golf resort got COVID-19 relief but still fired staff – Union officials in the U.K. have accused the Trump Organization of taking advantage of the country’s job retention program by accepting more than Pound Sterling500,000 in COVID-19 job funding but still firing staff members. The Scotsman reports that union officials accused Trump’s Turnberry resort of carrying out an “all-out assault on jobs and conditions,” referring to the situation as a “scandal.” The union representatives say at least Pound Sterling110,000, or just over $150,000, was claimed while former President Trump was still in office. The Scotsman reports at least 66 people were laid off from the golf resort since last summer. The newspaper notes that the golf resort has not done anything wrong in claiming the funds as they are entitled to join the U.K.’s furlough initiative and other golf resorts have claimed more in funds. However, the National Union of Rail, Maritime and Transport Workers (RMT) said the Trump Organization made a “mockery” of the U.K. program by “hoovering up” and still firing staff. The RMT’s general manager, Mick Cash, said, “It is clear to us that at the very least the principles of the job retention scheme appear to have been breached by the Trump Organisation and that should now be subjected to a detailed and forensic investigation by HMRC.” “It’s a scandal and as we slowly emerge from lockdown, we are calling for any discarded staff to be re-engaged on decent pay and conditions, and for that same principle to be applied to new employees as well,” Cash added. Trump’s Scottish golf course fell under scrutiny earlier this year after Scottish lawmakers called on the government to investigate where Trump obtained the funds to purchase the resort. The lawmakers want First Minister of Scotland Nicola Sturgeon to ask for an “unexplained wealth order” which would start an accounting investigation to prove the source of Trump’s funding. If the Trump Organization is unable to prove that the money came from a legitimate source, the Scottish government could confiscate the property. The golf course was bought during a spending spree Trump went through in 2006 and no indication was made at the time that he took out any loans to purchase the property. Financial disclosure forms have revealed that the Turnberry property has been an enormous financial burden on the Trump Organization, costing more than $280 million through the years and never turning a profit.
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