Coronavirus Economic Weekly News 13June 2021

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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Here is the news for this week, including a few on infrastructure which has only a tenuous connection to the pandemic:

Wolf Richter: Oh Lordy, Yellen Comes Out for Higher Interest Rates: “A Plus for Society’s Point of View and the Fed’s Point of View” By Wolf Richter — Starting in 2018, President Trump harangued and hammered Fed Chair Jerome Powell to end Quantitative Tightening and to cut interest rates, and Powell buckled and did his infamous “180.” And now suddenly – unless this gets walked backed again tomorrow – we’ve got the opposite. Treasury Secretary Janet Yellen said in an interview with Bloomberg News on Sunday that higher interest rates would “actually be a plus for society’s point of view and the Fed’s point of view.” Under Fed Chair Yellen, the Fed hiked interest rates five times, starting in December 2015. Yellen departed in February 2018 as Trump had refused to reappoint her, and instead replaced her with Powell. At the time, the sixth rate-hike was already baked in for the March 2018 meeting. She is no stranger to rate hikes. Now Yellen – presumably with the backing of President Biden – is supporting Powell on rate hikes, which is a dramatic shift from the prior administration.The issue in the interview was inflation and whether or not it would be fired up further by the federal government’s $4 trillion additional spending spread over 10 years, adding $400 billion per year in extra spending.Yellen said that this would not be enough for inflation to over-run. And she said that the current “spurt” in prices powered by the stimulus would fade next year – toeing the line that the biggest burst of inflation in three decades that blew through the Fed’s target by a big margin would just be “temporary.”But, and here it comes: If the current burst of inflation turns out to be not temporary and triggers more persistent inflation, and thereby higher interest rates, it would be a good thing.”If we ended up with a slightly higher interest rate environment, it would actually be a plus for society’s point of view and the Fed’s point of view,” she told Bloomberg News.”We’ve been fighting inflation that’s too low and interest rates that are too low now for a decade,” she said. “We want them to go back to” a normal interest rate environment, “and if this helps a little bit to alleviate things then that’s not a bad thing – that’s a good thing.” “Alleviate things?” What things would be alleviated by higher interest rates? She didn’t say. Savers and government-bond investors earning a little bit of interest as to get some kind of cash flow going again so that they can spend a little more? People have been praying for this for years! If the temporary surge in inflation sticks and becomes persistent, monetary policy makers can handle it, she said. “I know that world – they’re very good,” she said. “I don’t believe they’re going to screw it up.”

10Y Yields Plunge Below 1.50% As Record Short Squeeze Accelerates -With the recent JPMorgan Treasury Client Survey showing that self-reported Treasury net longs were at record lows (and by extension, shorts were all time high) understandably perhaps ahead of an inflation print that is expected to be among the highest on record, there were virtually no traders left to short Treasurys, with all bears already on board. This meant that as a result of a massive position imbalance, the risk was for a raging short squeeze on even a whiff of deflationary news, and that’s precisely what we have seen in recent days, starting with last Friday’s disappointing payrolls report which sent 10Y yields lower by 8 bps, and continued with the collapsing odds that a Biden infrastructure plan will pass, amid a breakdown in GOP talks and opposition by centrists such as Manchin. The squeeze, which started with last Friday’s big payrolls miss, has continued through this morning, when the 10-year Treasury yield fell as much as 4bps, sliding below 1.5% for the first time since May 7 – which was also a kneejerk short covering burst following last month’s even bigger payrolls miss – as traders scrambled to unwind record short positions. The 10-year yield peaked at about 1.77% in March and has since fallen as low as 1.46% on May 7 after the release of April’s dismal payrolls report. It dropped more after last week’s slightly less dismal May jobs report. The sudden drop in yields takes place before a closely watched 10Y auction of notes at 1pm today and ahead of key U.S. inflation data due Thursday. While Bloomberg claims that there was no clear catalyst for the latest move lower, “suggesting a potential shift by the market’s large short base ahead of the U.S. data and a European Central Bank meeting Thursday”, Rabobank suggests that the move is “related to the headline that talks between President Biden and Republicans over his proposed infrastructure spending bill have collapsed. Recall that on matters of spending in the US, “The President proposes, and Congress disposes”. And that with the Senate 50-50, and Democratic senators Manchin and Sinema opposed to using Budget Reconciliation to ram stimulus through, and to the removal of the Senate filibuster to allow stimulus to proceed on a straight up-down vote, there is no way that this spending can happen – unless something changes.”

Seven High Frequency Indicators for the Economy — These indicators are mostly for travel and entertainment. The TSA is providing daily travel numbers. This data shows the seven day average of daily total traveler throughput from the TSA for 2019 (Light Blue), 2020 (Blue) and 2021 (Red). The dashed line is the percent of 2019 for the seven day average. This data is as of June 6th. The seven day average is down 27.5% from the same day in 2019 (72.5% of 2019). (Dashed line) There was a slow increase from the bottom – and TSA data has picked up in 2021. The second graph shows the 7 day average of the year-over-year change in diners as tabulated by OpenTable for the US and several selected cities. This data is updated through June 5 2021. This data is “a sample of restaurants on the OpenTable network across all channels: online reservations, phone reservations, and walk-ins. For year-over-year comparisons by day, we compare to the same day of the week from the same week in the previous year.” Note that this data is for “only the restaurants that have chosen to reopen in a given market”. Since some restaurants have not reopened, the actual year-over-year decline is worse than shown. Dining picked up during the holidays, then slumped with the huge winter surge in cases. Dining is picking up again. Florida and Texas are above 2019 levels. This data shows domestic box office for each week and the median for the years 2016 through 2019 (dashed light blue). . Movie ticket sales were at $119 million last week, down about 52% from the median for the week. —– Hotel Occupancy: STR —– This 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, dashed purple is 2019, and dashed light blue is for 2009 (the worst year on record for hotels prior to 2020). The 4-week average occupancy is now slightly above the horrible 2009 levels. This data is through May 29th. Hotel occupancy is currently down 4% compared to same week in 2019 (due to the timing of Memorial Day). Note: Occupancy was up year-over-year, since occupancy declined sharply at the onset of the pandemic. However, the 4-week average occupancy is still down significantly from normal levels. This graph, based on weekly data from the U.S. Energy Information Administration (EIA), shows gasoline supplied compared to the same week of 2019. As of May 28th, gasoline supplied was down about 3.1% (about 96.9% of the same week in 2019). The previous week was the first week this year with gasoline supplied up compared to the same week in 2019. This graph is from Apple mobility. From Apple: “This data is generated by counting the number of requests made to Apple Maps for directions in select countries/regions, sub-regions, and cities.” There is also some great data on mobility from the Dallas Fed Mobility and Engagement Index.This data is through June 5th for the United States and several selected cities. The graph is the running 7 day average to remove the impact of weekends. All data is relative to January 13, 2020. This data is NOT Seasonally Adjusted. Here is some interesting data on New York subway usage (HT BR). According to the Apple data directions requests, public transit in the 7 day average for the US is at 83% of the January 2020 level and moving up. Here is some interesting data on New York subway usage. This graph is from Todd W Schneider. This is weekly data since 2015. Schneider has graphs for each borough, and links to all the data sources.

Price spike triggers new political debate on inflation –New data showing a higher than expected May jump in inflation underscored how a bumpy recovery from the coronavirus recession poses political challenges for President Biden and the Federal Reserve. The consumer price index (CPI) rose 5 percent in the year leading into May, the Labor Department reported Thursday, marking the fastest annual increase since August 2008 and slightly exceeding the expectations of economists. The CPI minus food and energy prices, which are more volatile, also rose 3.8 percent The CPI, a closely watched gauge of inflation, was driven higher primarily by factors analysts expect to be temporary, such as a national used car shortage, a rush of diners back into restaurants, and demand for certain goods outpacing manufacturers’ ability to supply them. For those reasons, most economists and investors saw little cause for alarm in the new data. The S&P 500 index set a new record shortly after the release of the report, and the bond market showed little concern about a potential emergency rate hike in the future. “Demand has been much stronger than many anticipate and that demand has caused supply bottlenecks, which has put pressure on prices,” “However, once the U.S. economy fully reopens and overseas economies more fully reopen, you’re going to see these price pressures mitigate.” Republican lawmakers insisted Thursday that the new inflation data showed the peril of Biden’s plans for trillions in further spending and Powell’s commitment to keeping interest rates near zero percent through 2021 and beyond. “The combination of the Fed’s average inflation targeting and its view that inflation will be transitory virtually guarantees the Fed will be behind the curve if inflation is enduring. Congress’ massive spending contributes to the problem. It’s time to end it,” said Sen. Pat Toomey (R-Pa.), ranking member on the Senate Banking Committee, in a Thursday tweet. Biden and the Fed also took more heat from former Treasury Secretary Larry Summers, the chief Democratic critic of his agenda, who insisted that the May report underscored the danger of further stimulus for the fragile economy. “The confidence with which inflation serene economists hold to their views, even after being repeatedly surprised, is a mystery to me,” tweeted Summers, who also served as NEC director for former President Obama. “Reasonable people can disagree,” he continued. “But I do not see how any responsible policy maker can fail to recognize that overheating is now the largest risk in the near term.” With months until inflation rates could move back toward historic

U.S. inflation will accelerate if recovery stays on track: Kemp (Reuters) – U.S. consumer prices are rising at the fastest rate for several years, as the economy recovers from the coronavirus recession and manufacturing supply chains struggle to keep up with demand. But the rate of inflation is still being flattered by the relatively modest increase in energy prices, masking the impact of faster increases in food products and other commodities. If energy prices rise further in the second half of 2021 and into 2022, as the expansion matures, inflation could prove more persistent than anticipated by officials at the Federal Reserve. The U.S. consumer price index has increased at a compound annual rate of 2.55% over the last two years, the fastest for more than eight years, according to data from the U.S. Bureau of Labor Statistics. But energy prices have risen at an average rate of only 2.20% over the same period, which uses 2019 rather than 2020 as a baseline to avoid distorted comparisons caused by the first wave of the epidemic last year. Prices for non-energy items have increased at a rate of 2.59%, the fastest for more than 12 years since the financial crisis of 2008/09 (https://tmsnrt.rs/3wlHYMQ). Inflation has accelerated most sharply in the goods sector, where manufacturers have struggled to meet the surge in demand, especially for motor vehicles and consumer electronics. As a result, prices for merchandise other than food and energy are increasing at the fastest rate since the early 1990s. U.S. central bank officials have said they believe the acceleration will prove temporary, with price increases slowing in 2022 and 2023. But inflationary pressures normally intensify as a business cycle becomes longer and more capacity constraints emerge. It would be unusual for inflation to slow as employment rises, manufacturing capacity becomes more fully utilised and service sector output increases.

Deficit rises to nearly $2.1T –The federal deficit in May rose to nearly $2.1 trillion over the first eight months of fiscal 2021, according to data from the Treasury Department released Thursday.Spending from October through May totaled $4.67 trillion, up from the $3.89 trillion in the same period a year ago.Meanwhile, tax revenues for the first eight months of the fiscal year totaled $2.6 trillion, comparable to the same time period last year.In May alone, the deficit was $132 billion, down from the same time a year ago, according to the Treasury Department. Federal spending last month reached $596 billion, while revenue climbed to just $464 billion.Spending contributed to benefits from President Biden‘s $1.9 trillion COVID-19 relief package continuing to be paid out, according to Reuters.Deficit spending for fiscal 2020 spiked to a record $3.1 trillion. Deficit spending is likely to be a hot topic as Biden moves ahead with other spending proposals outside of the pandemic. The president released his $6 trillion budget proposal late last month, with the deficit projected to reach $3.6 trillion this year before dropping to $1.8 trillion in 2022. In following years, the deficit would fall between $1.3 trillion and $1.6 trillion.

Bipartisan group prepping infrastructure plan as White House talks lag –A bipartisan Senate group is prepping a fall-back infrastructure proposal as talks between the White House and GOP senators appear to be at a stalemate. The group of roughly six senators, including Sens. Mitt Romney (R-Utah), Rob Portman (R-Ohio), Joe Manchin (D-W.Va.) and Kyrsten Sinema (D-Ariz.), are expected to shop it to a broader group of roughly 20 centrist-minded senators, known as the G-20, this week. “We’ve pretty much agreed on the spending level. I’m sure there will be some adjustments as we go along, and the pay-fors. …We have a proposal that we’ll take to the entire group and see how they feel about it,” Romney said. “Maybe they’ll just throw it out altogether.” Romney indicated that the group crafting the bill could start pitching it to their colleagues during a Tuesday meeting. Others involved with the talks warned that the closed-door powwow could instead be used to let key negotiators hash out final details before unveiling it to their colleagues. The group is reportedly planning to pitch their colleagues on a bill of around roughly $880 billion, less than the top-line being discussed by a separate GOP-only group led by Sen. Shelley Moore Capito (R-W.Va.) and well below what the White House wants. But senators involved in the bipartisan group also stressed that the details of their plan are still in flux. “We’re going to meet tomorrow and talk about that,” Portman said about the price tag. Romney did, however, knock down reports from over the weekend that carbon pricing would be part of the group’s suggestion on how to pay for their proposal, telling reporters that is not included in the plan. The effort by the bipartisan group comes as there’s growing frustration, in both parties, about the pace of talks between the White House and a group of GOP senators led by Capito. Members of the bipartisan group stressed that they saw their effort as a fall-back plan to the GOP’s negotiations with the White House. “We were very supportive of the effort that Senator Capito and the other ranking Republicans are having with the White House. We continue to support that,” Portman said. Capito and Biden, who met last week and separately spoke by phone on Friday, will talk again on Tuesday. But the two sides remain far apart on both the price tag for an infrastructure package and how to pay for it, with little progress appearing to be made toward an agreement.

Biden’s infrastructure talks with GOP collapse amid irreconcilable differences – – President Joe Biden’s infrastructure talks with Republicans collapsed Tuesday, the lead GOP negotiator said. “I spoke with the president this afternoon, and he ended our infrastructure negotiations,” Sen. Shelley Moore Capito, R-W.Va., said in a statement. The end of the talks will increase pressure on Democrats to pass a sweeping package using a special process that doesn’t require any Republican votes in the Senate. Weeks of negotiations failed to bring the White House and Republicans close to a deal. They remained far apart on a total price tag for a bill, which types of projects should be included and whether to raise any new taxes. Senate Majority Leader Chuck Schumer, D-N.Y., said that as negotiations “seem to be running into a brick wall,” Democrats are “pursuing a two-path proposal” that includes focusing on new talks among a group of senators from both parties, including Kyrsten Sinema, D-Ariz., and Rob Portman, R-Ohio. “At the same time, we are pursuing the pursuit of reconciliation,” Schumer said, referring to the process of passing legislation with a simple majority in the Senate, which Democrats used to advance the $1.9 trillion Covid-19 relief law. “It may well be that part of the bill that’ll pass will be bipartisan and part of it will be through reconciliation. But we’re not going to sacrifice the bigness and boldness in this bill,” he said. After negotiations broke down, the backup bipartisan infrastructure group wrapped up an almost three-hour meeting Tuesday evening in the Capitol basement hideaway of Sen. Rob Portman, R-Ohio. “This group is making a lot of progress, but we have a total of 100 senators, not eight,” Sen. Mitt Romney, R-Utah, told reporters. “We went through line by line, and we’ve got pretty good agreement on most of those and went to the pay-fors, as well, and they’re a little less solid. … We got the categories, we got a round number for each one.”

‘Tentative Infrastructure Deal’ Reached By Tiny Group Of Senators Led By Romney – After talks between President Joe Biden and Sen. Shelly Moore Capito (R-WV) broke down earlier this week, a bipartisan group of 10 senators led by Mitt Romney (R-UT) say they’ve reached a tentative deal on the the size of an infrastructure deal, as well as how they’d pay for it. The deal would spend a fraction of the $4.1 trillion called for by President Biden, and would not require an increase in taxes, according to The Hill, which suggests it may be a “tough sell within the broader Senate Democratic caucus.” That said, members of the bipartisan group warned on Thursday that they still need to run it past the Senate GOP conference and the White House to see if there’s a broader buy-in. “We have a tentative agreement on the pay-fors, yes, but that’s among the five Democrats and the five Republicans. It has not been taken to our respective caucuses or the White House so we’re in the middle of the process. We’re not at the end of the process, not at the beginning but we’re in the middle,” said Romney, who added that an overall top-line spending number has also been tentatively agreed upon. “I believe it’s complete but others may have a different point of view.” Republican Sen. Susan Collins of Maine confirmed that a tentative deal exists, and called it a “significant” sign of progress. “Among the ten of us there is a tentative agreement on a framework but obviously there’s a long ways to go. I would not say that we have the leaders on board or we have started negotiating with the White House but I think having 10 senators come together and reach an agreement on a framework is significant,” she said. Earlier Thursday, Sen. Majority Leader Mitch McConnell (R-KY) told Fox News that Republicans “haven’t given up hope” for a deal. “We haven’t given up hope that we’ll be able to reach a deal on something really important for the country that we really need to accomplish, and that is a major infrastructure bill,” he said, adding “I think it’s clearly possible. We haven’t given up on reaching an agreement on infrastructure. … I think there’s a good chance we can get there.”

Half of pandemic unemployment money may have been stolen: report – Fraudsters may have plundered as much as half of the unemployment benefits that the US pumped out in a hurry during the pandemic. Blake Hall, CEO of ID.me, a fraud prevention service, told Axios that the US has lost more than $400 billion to crooked claims.The US may have been robbed of as much as half of all money given out through unemployment benefits during the pandemic, Hall told the outlet. Haywood Talcove, the CEO of LexisNexis Risk Solutions, estimated that most of the stolen money, at least 70 percent, probably ended up outside the US, according to Axios.Much of the pilfered funds likely went to criminal syndicates in China, Nigeria, Russia and elsewhere, he said, according to the outlet.”These groups are definitely backed by the state,” Talcove told Axios. A lot of the money was also likely stolen by US street gangs, who have been taking a greater share of the stolen funds in recent months, Axios reported. Criminals were likely able to defraud the government by stealing personal information and using it to impersonate would-be unemployment claimants, Axios reported.Other groups, the report said, may have tricked legitimate claimants into handing over their personal information. Low-level criminals, or so-called mules, would then be given debit cards and asked to withdraw money from ATMs, the report said. That money could then be transferred abroad, often via untraceable cryptocurrencies like bitcoin.It’s long been assumed by many politicians and government watchdogs that criminals would make off with at least some of the emergency pandemic relief funds.State unemployment systems were ill-prepared for the demands of the pandemic. It was widely assumed that some of the hundreds of billions doled out would slip through the cracks, but many politicians said it was critical to get the money out as quickly as possible.Now, the latest estimates reveal the scope of the fraud that took place over the past year.

Biden Administration Announces “Supply Chain Disruptions Task Force”- The Biden administration appears to have a plan to address supply chain bottlenecks in key industries – not the least of which is the semiconductor industry. On Tuesday, the administration announced a “supply-chain disruptions task force” (thank God, we’re saved), to identify bottlenecks. It’ll be headed up by Secretary of Commerce Gina Raimondo with the help of “Mayor Pete” and will focus on areas like homebuilding and construction, in addition to semiconductors, Bloomberg reports. Among the reasons to establish this task force are rising prices and extended delivery times, according to the report. As to the former, we can’t help but wonder if Raimondo’s first “task force” meeting should be held at the offices of the NY Fed.The group will hold meetings with “stakeholders and supply-chain experts” and will announce its results in the near term. Jared Bernstein, a member of Biden’s Council of Economic Advisers, commented: “There will be more information forthcoming on precise measures that this more near-term initiative will be taking in weeks not months.”The White House also released a 250 page report on Tuesday with “assessments and an expansive list of recommendations”. The report reads: “For too long, the United States has taken certain features of global markets — especially the fear that companies and capital will flee to wherever wages, taxes and regulations are lowest — as inevitable.”Among items to be looked at are magnets: “The investigation will specifically look at neodymium magnets that are crucial to creating a field for motors to run in perpetuity in everything from electric vehicles to missile guidance systems to wind turbines. China is the largest global producer of those magnets, which are made up of rare earths.”As well as semiconductors:“On semiconductors, the Commerce Department will increase information flow between producers and suppliers of chips as well as their end-users. The White House also recommends Congress appropriates at least $50 billion in funding for semiconductor research and production in the U.S. — a key pillar of a broader China competition bill that the Senate may approve on Tuesday.”

Harris tells migrants: ‘Do not come, do not come’ – Vice President Harris on Monday pleaded with migrants from Central American countries to stay home in a speech in Guatemala during her first foreign trip.Harris has the tricky task of reintroducing the United States as a friend and ally to the region while finding ways to reduce migration, which has often been Central America’s only social safety valve amid worsening humanitarian conditions. The vice president was blunt in her message to Central Americans, repeating the line, “Do not come.”To soften the blow, she framed the Biden administration’s closed-door policy in a message of hope for the region.”I want to emphasize that the goal of our work is to help Guatemalans find hope at home. At the same time I want to be clear to folks in this region who are thinking about making that dangerous trek to the United States Mexico border: Do not come, do not come,” Harris said.The Biden administration’s Central America strategy represents, like many other aspects of Biden’s immigration policy, a stark shift from the Trump administration’s initiatives.While former President Trump‘s policy was catalogued as cruel by its opponents, it was simple: Mexico and Central America could avoid monetary sanctions through tough enforcement of migratory laws.The Biden administration’s more holistic approach offers humanitarian benefits, de-escalating the enforcement measures that can have a punitive effect on desperate migrants, but it presents a risk for Harris, whose political future will likely be forever tied to the strategy’s results.In March, Biden put Harris in charge of the administration’s efforts to stem the flow of migrants seeking entry to the United States at the southern border. She is also tasked with forming partnerships with Northern Triangle countries to get at the root causes of a surge of immigration during the early months of the administration.In a press conference alongside Guatemalan President Alejandro Giammattei, Harris announced a handful of new initiatives, including a joint task force to combat human trafficking and smuggling, a young women’s empowerment program and a U.S. anti-corruption task force.She said that the U.S. would invest in agricultural businesses and affordable housing and help support entrepreneurs in Guatemala. The White House said that it plans to invest $48 million over four years to boost economic opportunity in Guatemala, according to a fact sheet.Harris also announced that the U.S. would send a half-million surplus coronavirus vaccines to Guatemala as part of a broader effort to boost the global vaccine supply.But Harris’s repeated appeal for migrants to stay home overshadowed the minutiae of the visit, as it laid bare the harsh truth that migrant apprehension numbers at the U.S.-Mexico border remain the standard by which immigration policy success is measured.

AOC blasts VP Harris for telling illegals to ‘not come’ – Rep. Alexandria Ocasio-Cortez is blasting Vice President Kamala Harris for telling illegal immigrants to not come to the United States amid a record surge in illegal border crossings – calling the veep’s comments “disappointing.”Ocasio-Cortez (D-NY) offered the rebuke in a series of tweets Monday evening, retweeting a video of the vice president discouraging illegal migration during her trip to Guatemala.”I want to be clear to folks in this region who are thinking about making that dangerous trek to the United States-Mexico border: Do not come, do not come,” Harris said while speaking to reporters at a press conference alongside Guatemalan President Alejandro Giammattei. “The United States will continue to enforce our laws, and secure our border. There are legal methods by which migration can and should occur, but we, as one of our priorities, will discourage illegal migration,” said Harris, who on Tuesday is in Mexico meeting with President Andres Manuel Lopez Obrador. “And I believe if you come to our border, you will be turned back.” For AOC, Harris’ comments were “disappointing to see.””First, seeking asylum at any US border is a 100% legal method of arrival,” the progressive pol wrote.”Second, the US spent decades contributing to regime change and destabilization in Latin America. We can’t help set someone’s house on fire and then blame them for fleeing.”The New York Democrat went on to call on the US to “finally acknowledge its contributions to destabilization and regime change in the region.””Doing so can help us change US foreign policy, trade policy, climate policy, & carceral border policy to address causes of mass displacement & migration,” she added.

VP Kamala Harris meets with Mexico’s AMLO about immigration – Vice President Kamala Harris’ first foreign trip drew to a close Tuesday after her first face-to-face meeting with Mexican President Andres Manuel Lopez Obrador in which she sought to bolster cooperation on border security, Central American migration and COVID-19 vaccine sharing. After a morning of meetings with Lopez Obrador – known by his initials as AMLO – at Palacio Nacional, or the National Palace, Harris said she had “very direct and candid conversations” about her aim to tackle the underlying causes of migration from the Northern Triangle countries of El Salvador, Honduras and Guatemala. She later met with female entrepreneurs and labor leaders. The trip gave Harris a chance to burnish her foreign policy credibility on the world stage. . Harris reiterated the administration’s message to undocumented migrants considering making the dangerous journey to the USA: “Do not come.” During the two-day jaunt, the vice president responded to criticism over not making a trip to the U.S. southern border. “The work that we are doing by being in Guatemala yesterday and in Mexico today is the work of reinforcing the point that we have to look at not only what is actually happening at the border but what is causing that to happen,” she said Tuesday afternoon. “We cannot be simplistic and assume that there is only one element or way of approaching the overall problem. If this were easy, it would have been handled a long time ago, and there is no question that it is complex.” Harris said she and Lopez Obrador discussed Mexico’s enhanced port security initiatives, economic development and cracking down on drug smuggling and human trafficking. The two spent nearly two hours together at the National Palace, where they toured the historic building’s murals. Harris and Lopez Obrador met privately before and after the event, which lasted an hour. Department of Homeland Security Secretary Alejandro Mayorkas will travel to Mexico next week to expand on talks, Harris said. Harris announced the United States will invest $130 million in technical assistance and cooperation over the next three years to Mexico as it implements labor legislation to fund programs that will support workers, improve working conditions and address child and forced labor. The United States agreed to invest $250 million in economic development in southern Mexico.

Kamala Harris’s anti-immigrant tour: identity politics in service of imperialism – “Give me your tired, your poor, your huddled masses yearning to breathe free … “ (Poem by Emma Lazarus, inscribed on the base of the Statue of Liberty) “Do not come, do not come … if you come to our border, you will be turned back.” (Vice President Kamala Harris to migrants fleeing destitution and rampant violence in Central America) Kamala Harris this week made her first foreign trip since taking office as US vice president. It was a lightning three-day visit to Guatemala and Mexico aimed at firming up the use of their security forces to violently suppress the flow of Central American migrants seeking to escape desperate poverty along with police and gang killings, and to reunite with family members in the US. Much was made in the US and international media of Harris being the first woman and first African/Asian-American to represent Washington abroad on such a high-level state visit. A child of immigrants, Harris was entrusted with the dirty and, indeed, homicidal job of coordinating a multinational crackdown on immigration. Nowhere could one find a more blatant illustration of the role played by identity politics in defending the capitalist order at home and US imperialist interests abroad. Harris’s trip included window-dressing along these lines, including a promised $40 million to “empower” young women. This represents a drop in the ocean for a country where fully half of the population is categorized as poor and which has the sixth-highest malnutrition rate on the planet. As for the rate of chronic child malnutrition, it now stands at a shocking 70 percent, the highest in the world, with children dying every day for lack of food. Harris spent her day in Guatemala in discussions with President Alejandro Giammattei, an extreme right-wing politician who came into office with the backing of the country’s ruling oligarchy and the military. He was nearly overthrown last year by mass protests, which included the burning of the Congress building, that broke out against government austerity and its criminal mishandling of the COVID-19 pandemic.

Biden administration releases emergency temporary standard for healthcare facilities -The Labor Department on Thursday released a COVID-19 emergency temporary standard (ETS) for health care workers, following more than a year of Democratic lawmakers pushing for such a standard the all front-line workers in the coronavirus pandemic. The standard covers health care facilities treating COVID-19 and requires that employers comply with safety and health standards issued and enforced by the Occupational Safety and Health Administration (OSHA), such as mask wearing and cleaning procedures. It also requires health care facilities to provide their workers with a safe workplace free from recognized hazards and to notify them when there are exposed to infections. OSHA updated guidance for employers and workers not covered by the OSHA ETS that it deems higher-risk workplaces, including manufacturing, meatpacking plants, grocery stores and retail stores. That guidance includes staggering break times, staffer worker arrivals and departure times, and providing visual cues like signs to maintain distancing. The agency announced in April it sent a draft ETS on the coronavirus pandemic to the Office of Management and Budget, defending the extra time the agency took to move on establishing a standard. President Biden issued an executive order in January on protecting worker health and safety, which called on OSHA to issue an ETS by March 15. Speaker Nancy Pelosi (D-Calif.) was critical of OSHA’s decision not to include other workers in the standard on Thursday and called the move for health care workers a “first step.” “OSHA’s decision to omit other frontline workers exposed to COVID-19, including farmworkers, grocery workers, workers in meat-packing facilities and those working in homeless shelters and prisons, is troubling and shortsighted,” she said.

Vaccine Billionaires – The Real Winners in the COVID-19 Pandemic –Since the COVID-19 pandemic began 15 months ago, those of us that are paying attention realize that the pandemic has made many of society’s wealthiest human beings even wealthier than they were before governments took it upon themselves to shutter many businesses, leaving major physical and online stores to pickup business that formerly was key to the health of Main Street Americans who owned small retail outlets. One thing that we haven’t heard very little about is the impact that the pandemic has had on a handful of vaccine company insiders, the subject of this posting. Thanks to research by the People’s Vaccine Alliance, we know that the creation and distribution of COVID-19 vaccines has created at least nine new billionaires since the beginning of the pandemic and has added significant wealth to other individuals who were already billionaires with substantial pharmaceutical holdings. In large part, this is thanks to the monopolies that Big Pharma has on its experimental vaccines and the rapid purchasing and rolling out of these incompletely tested vaccines by some of the worlds largest economies. Thanks to substantial stock holdings by company insiders, the rise in share prices has resulted in substantial personal gain for highly placed executives. First, thanks to the pandemic, here is a table showing the nine newly minted vaccine billionaires and their net worth in order from highest to lowest: Now, again with great thanks to the pandemic, here is a table showing the increase in wealth of the 8 individuals/families which have substantial investments in companies that are part of the COVID-19 vaccine rollout that were already pharmaceutical billionaires noting that the Struengmann family holds investments in BioNTech and Mega Pharma, Pankaj Patel controls Cadila Healthcare which manufactures drugs to treat COVID-19 and Immunity Bio was one of the companies selected by Washington to develop a COVID-19 vaccine: Let’s summarize. The combined wealth of the nine newly minted vaccine billionaires totals $19.3 billion which, according to calculations by the People’s Vaccine Alliance, would be sufficient to vaccinate all of the people living in the world’s low-income nations 1.3 times. The increase in wealth of the eight existing Big Pharma individuals totals $32.2 billion, sufficient to vaccinate the entire population of India.

Ransomware attacks are closing schools, delaying chemotherapy and derailing everyday life – It can feel abstract: A group of organized but faceless criminals hijacking corporate computer systems and demanding millions of dollars in exchange for their safe return. But the impact of these ransomware attacks is increasingly, unavoidably, real for everyday people. These crimes have resulted in missed chemotherapy appointments and delayed ambulances, lost school days, and transportation problems. A ransomware attack on Colonial Pipeline in May led to gas shortages and even dangerous situations caused by panic buying. This past week, hackers compromised the JBS meat processing company, leading to worries about meat shortages or other key food providers being at risk. Last fall, the Baltimore County Public Schools system was hit with ransomware and forced to halt classes for two days, which were being held virtually. As recently as Wednesday, ransomware attacks were causing problems across the country. In Martha’s Vineyard, the ferry service transporting people to and from the Massachusetts island said it had been hit by a ransomware attack that disrupted its ticketing and reservation process. Ferries continued operating all week, but the ticketing system was still affected, causing delays, on Friday.The recent spate of high-profile ransomware incidents is exactly what cybersecurity professionals have been warning about for years. But it’s partially the impact on everyday people – far from the executive suites, cybersecurity companies, or government agencies that regularly fret about the criminal enterprise – that has made the risk more visible. The ripple effects of ransomware can result in everything from mild inconvenience to people losing their lives, and it’s only increased in frequency during the pandemic. Ransomware attacks could reach ‘pandemic’ proportions. What to know after the pipeline hack. “It’s not only that it’s getting worse, but it’s the worst possible time for it to happen,” He says on average, there are likely 20 to 30 big ransomware cases happening behind the scenes in addition to the ones making headlines. Ransomware attacks are not new. The money at stake has changed drastically, however, inflating from thousands to millions of dollars, and the targets are more sophisticated as well. The increasing number of companies connecting their systems and adding more remote access points, along with things like the widespread use of bitcoin, have widened the pool of targets. Cybercriminals once focused on small companies and individuals but have made headlines this year for attacks on higher-profile victims.”Now you’ve got ransomware affecting whole corporate networks, interrupting critical national function, causing disruption in people’s lives. It’s really become a national security, public health and safety threat,”

Have banks dodged corporate tax bullet under Biden? – After bankers feared how Democratic control of Congress and the White House would affect their bottom lines, the industry could escape a dramatic hike in corporate taxes thanks to infrastructure talks.President Joe Biden had campaigned on a proposal to raise the corporate tax rate to 28%, threatening to undo much of the tax reforms pushed by former President Donald Trump.But the Biden administration has appeared to backtrack somewhat as a result of the intense negotiations over an infrastructure plan, suggesting he was open to a lower rate, 25%. That 3-percentage-point difference could cushion the blow of any tax plan for banks, which are more sensitive to fluctuations in the corporate tax rate than other industries.

Fed announces date for 2021 stress test results | American Banker – The Federal Reserve announced Monday it will publish the results for both of its annual stress tests on June 24. Nineteen of the biggest banks will be subjected to the Dodd-Frank Act Stress Tests and the Comprehensive Capital Analysis and Review examinations, plus four smaller firms that have chosen to opt in: BMO Financial Corp., MUFG Americas Holdings Corp., RBC U.S. Group Holdings and Regions Financial Corporation. Under rules the Fed finalized in 2019, banks with assets of between $100 billion and $250 billion are only required to undergo stress tests every other year. However, those banks can choose to opt in to a stress tests in an “off year” if they wish to make changes to their capital distribution plans.

Pandemic drove up costs of complying with anti-fraud rules: Report – Financial institutions saw an 18% jump in the cost of complying with anti-financial crime rules last year, as firms hurried to deal with an uptick in fraud stemming from the coronavirus pandemic, according to a new report. Compliance costs rose $33 billion from 2019, totaling $213.9 billion last year, LexisNexis Risk Solutions found in its annual True Cost of Financial Crime Compliance Study, published Wednesday. Companies in the U.S. and western Europe accounted for more than 82% of those costs. Firms in Germany and the U.S. alone spent, respectively, $9.6 billion and $8.8 billion more on compliance costs in 2020 than in 2019.

Supreme Court asked to keep eviction pause in place –The Biden administration, backed by nearly two dozen Democratic state attorneys general, asked the Supreme Court on Thursday to leave intact a temporary nationwide pause on evictions.The request comes after a group of landlords asked the court last week to effectively end the eviction moratorium put in place by the Centers for Disease Control and Prevention (CDC) to help financially distressed renters remain in their homes amid the pandemic.In a 38-page filing, the Biden administration argued that the CDC policy is a lawful and necessary step to prevent the spread of COVID-19 across state lines, which would result from evicted tenants being forced into homeless shelters or other crowded living arrangements.Democratic attorneys general from 22 states and Washington, D.C., backed the administration’s position Thursday in a friend of the court brief submitted to Chief Justice John Roberts, who handles D.C.-based emergency matters.”Recognizing that the ability to stay home and quarantine is an essential part of the pandemic response, the CDC Order … has been critical in helping states limit the spread of COVID-19,” the attorneys general wrote.The case concerns a challenge to the CDC moratorium brought by the Alabama Association of Realtors and several co-plaintiffs in federal court in D.C. That litigation has produced mixed results over the past several weeks.The landlord group secured a legal victory last month when U.S. District Judge Dabney Friedrich in D.C. struck down the moratorium as a government overreach. But Friedrich, a Trump appointee, agreed to stay her ruling, preventing it from taking effect while the Biden administration appeals.The D.C. Circuit Court of Appeals last week declined the landlords’ request to lift the stay, prompting the group’s emergency request to the Supreme Court.The property owners told the court in their brief that landlords have been losing $13 billion every month under the moratorium.”[T]he total effect of the CDC’s overreach may reach up to $200 billion if it remains in effect for a year,” they wrote. Numerous court battles have been waged over the policy’s lawfulness, creating a patchwork of interpretations across the country as property owners have sought to evict tens of thousands of cash-strapped renters. The CDC order, which was enacted in September under former President Trump and subsequently extended by Congress and President Biden, is set to expire at the end of the month, though it’s unclear if the administration will seek to prolong it as billions in federal rental aid continues to make its way to needy tenants.

MBA Survey: “Share of Mortgage Loans in Forbearance Slightly Decreases to 4.16%” – Note: This is as of May 30th. From the MBA: Share of Mortgage Loans in Forbearance Slightly Decreases to 4.18%: 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 4.18% of servicers’ portfolio volume in the prior week to 4.16% as of May 30, 2021. According to MBA’s estimate, 2.1 million homeowners are in forbearance plans.The share of Fannie Mae and Freddie Mac loans in forbearance decreased 1 basis point to 2.18%. Ginnie Mae loans in forbearance decreased 1 basis points to 5.54%, while the forbearance share for portfolio loans and private-label securities (PLS) decreased 6 basis points to 8.31%. The percentage of loans in forbearance for independent mortgage bank (IMB) servicers decreased 2 basis points to 4.34%, and the percentage of loans in forbearance for depository servicers decreased 1 basis point to 4.33%.”The share of loans in forbearance declined for the 14th straight week, with small drops across most investor types and all servicer types,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “Forbearance exits dropped to 6 basis points, the lowest weekly level since mid-February, but new forbearance requests, at 4 basis points, matched the recent weekly low from early May.” “Although the headline employment growth number for May was lower than many had anticipated, other data show evidence of a strengthening job market. That is good news for homeowners who have been struggling and are looking for work, as more families can regain their incomes and start making their mortgage payments again.” 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 2020, 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 0.05% to 0.04%.”

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 June 8th. From Andy Walden at Black Knight: Share of Borrowers in Forbearance Falls Below 4%, Lowest Since Onset of Pandemic Forbearance volumes fell by 61,000 (-2.9%) from last week to this week, continuing the trend of early month declines in forbearance volumes. Declines were seen across all investor classes, with portfolio/PLS loans seeing the largest improvement (-33K), while FHA/VA (-19K) and GSE (-9k) forbearances also saw meaningful declines.Plan starts did rise this week, following the Memorial Day-shortened week, but remain relatively low, considering. For the second week in a row, more than 100,000 homeowners left their forbearance plans, with roughly one-third of loan reviews for extension or removal resulting in removals.Some 530,000 plans are still scheduled for quarterly reviews for extension/removal over the next three weeks, which could lead to additional plan exits as we near the July 4 holiday. Fewer than 4% of all mortgage-holders are now in forbearance, the first time since the onset of the pandemic this number has fallen so low.As of June 8, 2.06 million (3.9% of) homeowners remain in COVID-19-related forbearance plans, including 2.3% of GSE, 6.9% of FHA/VA and 4.4% of portfolio/PLS

Black Knight Mortgage Monitor for April; Highest Annual Home Price Increase on Record –Black Knight released their Mortgage Monitor report for April today. According to Black Knight, 4.66% of mortgage were delinquent in April, down from 5.02% of mortgages in March, and down from 6.45% in April 2020. Black Knight also reported that 0.29% of mortgages were in the foreclosure process, down from 0.40% a year ago.This gives a total of 4.95% delinquent or in foreclosure.Press Release: Black Knight: Persistent Constraints in For-Sale Inventory Drive Home Prices Up a Record-Breaking 14.8% Annually in April, Making Housing Least Affordable Since Late 2018: As constraints in residential for-sale inventory persist, this month’s Mortgage Monitor Report looks at how recent and aggressive home price gains are impacting housing affordability. “Home prices grew at 14.8% on an annual basis in April,” said Graboske. “That’s the highest annual home price growth rate we’ve ever seen – and Black Knight’s been tracking the metric for almost 30 years now. Single-family homes saw the greatest gains, with prices up 15.6% from last April, also an all-time high, while condo prices are up 10%. Driving this growth are two key elements: historically low interest rates and – more acutely – the lack of available for-sale inventory. The total number of active listings was down 60% from the 2017 to 2019 average for April. It’s not getting any better, either. Data from our Collateral Analytics group showed there was two months’ worth of single-family inventory nationwide in March, the lowest share on record and trending downward. In fact, there were 26% fewer newly listed properties in April as compared to pre-pandemic seasonal levels. Here is a graph on delinquencies from Black Knight:

The national delinquency rate fell to 4.66% in April, just 0.5% above its pre-Great Recession average and 1.5% above its pre-pandemic level

That said, the overall delinquency rate has been improving at a much faster rate than later stage delinquencies

At their respective current rates of improvement, overall delinquencies would normalize by the end of 2021, but 90+ day delinquencies would take roughly three years to normalize

That scenario is unlikely, however – 90-day delinquencies will reach an inflection point later this year as forbearance plans expire and many homeowners return to making mortgage payments

As of the end of April, there are still 1.8M such serious delinquencies, 1.3M more than prior to the pandemic

CoreLogic: 1.4 Million Homes with Negative Equity in Q1 2021 –From CoreLogic: Nationwide Homeowner Equity Gains Hit $1.9 Trillion in Q1 2021, CoreLogic Reports CoreLogic … today released the Homeowner Equity Report for the first quarter of 2021. The report shows U.S. homeowners with mortgages (which account for roughly 62% of all properties) have seen their equity increase by 19.6% year over year, representing a collective equity gain of over $1.9 trillion, and an average gain of $33,400 per borrower, since the first quarter of 2020. While the coronavirus pandemic created economic uncertainty for many, the continued acceleration in home prices over the last year has meant existing homeowners saw a notable boost in home equity. In contrast to the financial crisis, when many borrowers were underwater, borrowers today who are behind on mortgage payments can tap into their equity and sell their home rather than lose it through foreclosure. These conditions are reflected in a recent CoreLogic survey, with 74% of current homeowners with mortgages noting they are not concerned with owing more on their home than it is worth within the next five years.”Homeowner equity has more than doubled over the past decade and become a crucial buffer for many weathering the challenges of the pandemic,” “These gains have become an important financial tool and boosted consumer confidence in the U.S. housing market, especially for older homeowners and baby boomers who’ve experienced years of price appreciation.” “Double-digit home price growth in the past year has bolstered home equity to a record amount. The national CoreLogic Home Price Index recorded an 11.4% rise in the year through March 2021, leading to a $216,000 increase in the average amount of equity held by homeowners with a mortgage,” “This reduces the likelihood for a large numbers of distressed sales of homeowners to emerge from forbearance later in the year.”As of the first quarter of 2021, negative equity share, and the quarter-over-quarter and year-over-year changes, were as follows:

Quarterly change: From the fourth quarter of 2020 to the first quarter of 2021, the total number of mortgaged homes in negative equity decreased by 7% to 1.4 million homes, or 2.6% of all mortgaged properties.

Annual change: In the fourth quarter of 2020, 1.8 million homes, or 3.4% of all mortgaged properties, were in negative equity. This number decreased by 24%, or 450,000 properties, in the first quarter of 2021.

The national aggregate value of negative equity was approximately $273 billion at the end of the first quarter of 2021. This is down quarter over quarter by approximately $8.1 billion, or 2.9%, from $281.1 billion in the fourth quarter of 2020, and down year over year by approximately $13.3 billion, or 4.6%, from $286.3 billion in the first quarter of 2020. This graph from CoreLogic compares Q1 to Q4 2020 equity distribution by LTV. There are still quite a few properties with LTV over 125%. But most homeowners have a significant amount of equity. This is a very different picture than at the start of the housing bust when many homeowners had little equity. On a year-over-year basis, the number of homeowners with negative equity has declined from 1.8 million to 1.4 million.

If You Sell a House These Days, the Buyer Might Be a Pension Fund – WSJ – A bidding war broke out this winter at a new subdivision north of Houston. But the prize this time was the entire subdivision, not just a single suburban house, illustrating the rise of big investors as a potent new force in the U.S. housing market. D.R. Horton Inc. DHI -0.13% built 124 houses in Conroe, Texas, rented them out and then put the whole community, Amber Pines at Fosters Ridge, on the block. A Who’s Who of investors and home-rental firms flocked to the December sale. The winning $32 million bid came from an online property-investing platform, Fundrise LLC, which manages more than $1 billion on behalf of about 150,000 individuals. The country’s most prolific home builder booked roughly twice what it typically makes selling houses to the middle class – an encouraging debut in the business of selling entire neighborhoods to investors. “We certainly wouldn’t expect every single-family community we sell to sell at a 50% gross margin,” the builder’s finance chief, Bill Wheat, said at a recent investor conference. From individuals with smartphones and a few thousand dollars to pensions and private-equity firms with billions, yield-chasing investors are snapping up single-family houses to rent out or flip. They are competing for houses with ordinary Americans, who are armed with the cheapest mortgage financing ever, and driving up home prices. “You now have permanent capital competing with a young couple trying to buy a house,” said John Burns, whose eponymous real estate consulting firm estimates that in many of the nation’s top markets, roughly one in every five houses sold is bought by someone who never moves in. “That’s going to make U.S. housing permanently more expensive,” he said. The consulting firm found Houston to be a favorite haunt of investors who have lately accounted for 24% of home purchases there. Investors’ slice of the housing market grows – as it does in other boomtowns, such as Miami, Phoenix and Las Vegas – among properties priced below $300,000 and in decent school districts. “Limited housing supply, low rates, a global reach for yield, and what we’re calling the institutionalization of real-estate investors has set the stage for another speculative investor-driven home price bubble,” the firm concluded.

BLS: CPI increased 0.6% in May, Core CPI increased 0.7% —From the BLS: – The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.6 percent in May on a seasonally adjusted basis after rising 0.8 percent in April, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 5.0 percent before seasonal adjustment; this was the largest 12-month increase since a 5.4-percent increase for the period ending August 2008.The index for used cars and trucks continued to rise sharply, increasing 7.3 percent in May. This increase accounted for about one-third of the seasonally adjusted all items increase. The food index increased 0.4 percent in May, the same increase as in April. The energy index was unchanged in May, with a decline in the gasoline index again offsetting increases in the electricity and natural gas indexes. The index for all items less food and energy rose 0.7 percent in May after increasing 0.9 percent in April. Many of the same indexes continued to increase, including used cars and trucks, household furnishings and operations, new vehicles, airline fares, and apparel. The index for medical care fell slightly, one of the few major component indexes to decline in May.The all items index rose 5.0 percent for the 12 months ending May; it has been trending up every month since January, when the 12-month change was 1.4 percent. The index for all items less food and energy rose 3.8 percent over the last 12-months, the largest 12-month increase since the period ending June 1992. The energy index rose 28.5 percent over the last 12-months, and the food index increased 2.2 percent. CPI and core CPI were well above expectations. I’ll post a graph later today after the Cleveland Fed releases the median and trimmed-mean CPI.

Consumer Price Index: May Headline at 5% – The Bureau of Labor Statistics released the May Consumer Price Index data this morning. The year-over-year non-seasonally adjusted Headline CPI came in at 4.99%, up from 4.16% the previous month. Year-over-year Core CPI (ex Food and Energy) came in at 3.80%, up from 2.96% the previous month and above the Fed’s 2% PCE target.Here is the introduction from the BLS summary, which leads with the seasonally adjusted monthly data:The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.6 percent in May on a seasonally adjusted basis after rising 0.8 percent in April, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 5.0 percent before seasonal adjustment; this was the largest 12-month increase since a 5.4-percent increase for the period ending August 2008.The index for used cars and trucks continued to rise sharply, increasing 7.3 percent in May. This increase accounted for about one-third of the seasonally adjusted all items increase. The food index increased 0.4 percent in May, the same increase as in April. The energy index was unchanged in May, with a decline in the gasoline index again offsetting increases in the electricity and natural gas indexes.The index for all items less food and energy rose 0.7 percent in May after increasing 0.9 percent in April. Many of the same indexes continued to increase, including used cars and trucks, household furnishings and operations, new vehicles, airline fares, and apparel. The index for medical care fell slightly, one of the few major component indexes to decline in May.The all items index rose 5.0 percent for the 12 months ending May; it has been trending up every month since January, when the 12-month change was 1.4 percent. The index for all items less food and energy rose 3.8 percent over the last 12-months, the largest 12-month increase since the period ending June 1992. The energy index rose 28.5 percent over the last 12-months, and the food index increased 2.2 percent. Read moreInvesting.com was looking for a 0.4% MoM change in seasonally adjusted Headline CPI and a 0.4% in Core CPI. Year-over-year forecasts were 4.7% for Headline and 3.4% for Core. The first chart is an overlay of Headline CPI and Core CPI (the latter excludes Food and Energy) since the turn of the century. The highlighted two percent level is the Federal Reserve’s Core inflation target for the CPI’s cousin index, the BEA’s Personal Consumption Expenditures (PCE) price index.

U.S. Heavy Truck Sales Near Record High in May – The following graph shows heavy truck sales since 1967 using data from the BEA. The dashed line is the May 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 563 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 at the beginning of the pandemic, falling to a low of 299 thousand SAAR in May 2020. Since then, sales have rebounded to near record highs. Heavy truck sales were at 553 thousand SAAR in May, up from 473 thousand SAAR in April, and up 85% from 299 thousand SAAR in May 2020.

Vehicle Sales Per Capita as of May 2021 – Note: The charts below have been updated to include the latest report on U.S. Vehicle sales from the BEA. For the past few years, we’ve been following a couple of transportation metrics: Vehicle Miles Traveled and Gasoline Volume Sales. For both series, we focus on the population-adjusted data. Let’s now do something similar with the Vehicle Sales report from the Bureau of Economic Analysis. This data series stretches back to January 1976 and for heavy trucks, since 1967. Since that first data point, the Civilian Noninstitutional Population Age 16 and Over (i.e., driving age, not in the military, or an inmate) has risen about 57%.Here is a chart, courtesy of the FRED repository, of the raw data for the seasonally adjusted annualized number of new vehicles sold domestically in the reported month. This is a quite noisy series – the absolute average month-over-month change is 4.3%. The latest data point is the April count published by the BEA in their monthly Auto and Truck Seasonal Adjustment report, which shows a seasonally adjusted annual rate of 17 million units, which is a 9.5% decrease from the previous month’s figure from the BEA.The first chart shows the series since 2007, which illustrates the dramatic impact of the Great Recession. The blue line smooths the volatility with a nine-month exponential moving average suggested by our friend Bob Bronson of Bronson Capital Markets Research. The moving average reduces the distortion of seasonal sales events (e.g., Memorial Day and Labor Day weekend) and thus helps us visualize the trend.

Trade Deficit Decreased to $68.9 Billion in April –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 $68.9 billion in April, down $6.1 billion from $75.0 billion in March, revised.April exports were $205.0 billion, $2.3 billion more than March exports. April imports were $273.9 billion, $3.8 billion less than March imports. Exports increased and imports decreased in April.Exports are up 36.6% compared to April 2020; imports are up 34.9% compared to April 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 $25.8 billion in April, from $22.3 billion in April 2020.

Weekly Initial Unemployment Claims decrease to 376,000 –The DOL reported: In the week ending June 5, the advance figure for seasonally adjusted initial claims was 376,000, a decrease of 9,000 from the previous week’s unrevised level of 385,000. This is the lowest level for initial claims since March 14, 2020 when it was 256,000. The 4-week moving average was 402,500, a decrease of 25,500 from the previous week’s unrevised average of 428,000. This is the lowest level for this average since March 14, 2020 when it was 225,500. This does not include the 71,292 initial claims for Pandemic Unemployment Assistance (PUA) that was down from 73,249 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 402,500.The previous week was unrevised.Regular state continued claims decreased to 3,499,000 (SA) from 3,757,000 (SA) the previous week.Note: There are an additional 6,347,472 receiving Pandemic Unemployment Assistance (PUA) that decreased from 6,360,202 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 5,231,952 receiving Pandemic Emergency Unemployment Compensation (PEUC) down from 5,301,821.Weekly claims were at the consensus forecast.

Half of all unemployment money was stolen by criminals during pandemic, experts say – Unemployment fraud surged during the coronavirus pandemic, with billions of dollars likely ending up in the hands of foreign crime syndicates based in China, Russia and other countries, experts say. As much as $400 billion in unemployment benefits may have been fraudulent, according to one estimate by ID.me, FOX Business confirmed. That amounts to about 50% of unemployment money, according to the company, which uses facial recognition software to verify identities. The news was first reported by Axios. “Fraud is being perpetrated by domestic and foreign actors,” Blake Hall, CEO and founder of ID.ME, told FOX Business. “We are successfully disrupting attempted fraud from international organized crime rings, including Russia, China, Nigeria and Ghana, as well as U.S. street gangs.” Haywood Talcove, the CEO of LexisNexis Risk Solution, suggested the bulk of the money – about $250 billion – went to international criminal groups, most of which are backed by the state. The money is essentially being used as their slush fund for “nefarious purposes,” such as terrorism, illegal drugs and child trafficking, Talcove said. The criminals have been able to access the money by stealing personal information and using it to impersonate claimants or buying it on the dark web. The groups also use an army of internet thieves to submit fraudulent claims. States, which administer the aid, may be prepared to combat fraud from individuals who are trying double-dip or cash in on benefits they don’t need, but not international criminals using the dark web to exploit the system. “What they need to understand is post-Covid, the world has changed,” he told FOX Business. “They are the target. And right now they haven’t put the defenses up that will secure those resources and make sure that they get into the hands of the right people, not transnational criminal groups.” Unemployment insurance became one of the federal government’s primary methods of keeping the economy afloat during the pandemic, with Congress repeatedly passing legislation to sweeten jobless aid. But state unemployment systems, many of which rely on Eisenhower-era systems, were overwhelmed by the deluge of claims during the pandemic and were ill-equipped to deal with the criminal attacks, the experts said.

BLS: Job Openings Increased to Record 9.3 Million in April –From the BLS: Job Openings and Labor Turnover Summary; The number of job openings reached a series high of 9.3 million on the last business day of April, the U.S. Bureau of Labor Statistics reported today. Hires were little changed at 6.1 million. Total separations increased to 5.8 million. Within separations, the quits rate reached a series high of 2.7 percent while the layoffs and discharges rate decreased to a series low of 1.0 percent. The following graph shows job openings (yellow line), hires (dark blue), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS.This series started in December 2000.Note: The difference between JOLTS hires and separations is similar to the CES (payroll survey) net jobs headline numbers Note that hires (dark blue) and total separations (red and light blue columns stacked) are usually pretty close each month. This is a measure of labor market turnover. When the blue line is above the two stacked columns, the economy is adding net jobs – when it is below the columns, the economy is losing jobs.The huge spikes in layoffs and discharges in March and April 2020 are labeled, but off the chart to better show the usual data.Jobs openings increased in April to 9.286 million from 8.288 million in March. This is a new record high for this series.The number of job openings (yellow) were up 100% year-over-year. This is a comparison to the worst of the pandemic. Quits were up 88% year-over-year. These are voluntary separations. (see light blue columns at bottom of graph for trend for “quits”). This is a record high for Quits too.

Holy JOLTS! – Just when you thought post-Covid economic data couldn’t get any odder, along comes another US econ numberwang to, errr, jolt you out of your senses. (Sorry, we’ll stop now).An hour or so ago the Bureau for Labour Statistics released its monthly Job Opening and Labour Turnover (read: JOLTS) report, and the headline numbers are quite something.The number of open job vacancies reached an all-time high of 9.3m, and perhaps perplexingly, the number of people who quit their jobs also reached a series high of 2.7 per cent of total employment.Now, much has ink has been spilled by the commentariat of late about how the Biden administration’s generous support packages for those affected by the Covid crisis might have delayed their appetite to work. Particularly in low-wage, high Covid risk sectors like food service, entertainment and leisure. And, on the surface, the data certainly speaks to this. Here’s three neat Bloomberg charts that FT Alphaville friend George Pearkestweeted showing how the JOLTS data broke down across those particular sectors: Cast your eyes to the top chart – the quits rate for leisure and hospitality was a staggering 5.3 per cent of all workers. There are really two ways to interpret this. Either you think workers are quitting because they don’t need to work thanks to government benefits (and are perhaps trading crypto on the side) or they’re getting better offers elsewhere which the second chart – the job opening rate – speaks to. In other words, it’s a sign of confidence in the labour market.Stepping back, it’s worth mulling the headline job openings number in the context of US unemployment. According to Nick Bunker, head of research at employment site Indeed, there’s now roughly one job opening for every unemployed individual in the US. So, in theory, workers are potentially now in a position where they can pick their next gig, rather than plump for the first one that makes them an offer.A few other data points from earlier today back this up. Data from the National Federation of Independent Business (NFIB) found that 48 per cent of businesses were struggling to fill jobs, with just over a third of firms saying they’ve raised compensation to deal with this issue. Thanks to Yahoo Finance’s Sam Ro for sharing this chart on the Twittersphere, as for some reason CloudFlare has blocked us from the NFIB website (we’re nice, honest!): Inflationista or not, it’s fair to say that we’re entering a pretty unique moment in US labour markets where, for the first time in many moons, business is on the back foot when it comes to hiring. Whether firms will deal with it via passing higher labour costs onto consumers (the NFIB report suggests as much), or attempting to raise productivity, remains to be seen. But, either way, it’s likely to be good news for the American worker.

April JOLTS report: evidence of a huge disconnect in the jobs market — This morning’s JOLTS report for April confirmed anecdotal evidence that there have been a huge amount of unfilled job openings, and a comparatively weak level of actual hiring. Job openings soared to a level over 20% higher than at any point in the series before March. Meanwhile actual hires are less than 1% above their pre-pandemic high. Voluntary quits increased to an all-time high, while layoffs declined to a new all-time low. Total separations also increased. This report has only a 20 year history, and so includes only two prior recoveries. In those recoveries: first, layoffs declined, second, hiring rose, third, job openings rose and voluntary quits increased, close to simultaneously. The recovery from the worst of the pandemic almost one year ago at first followed this script, but the winter surge, which led to a few month of flat, or worse, jobs reports, disrupted that trend, and now there is yet another new pattern. Let’s start out with layoffs and discharges (red) and total separations (blue), showing that these have followed their past patterns, as layoffs rapidly declined to a normal rate after last March and April. As noted above, this month’s report made yet another new series low: Next, here is the series-long record of hiring (blue), quits (green, *1.75 for scale), and job openings (red): Here is the zoomed-in look at the past several years: What has been different this time around is that, after rapidly improving, hires declined again until bottoming in December and January, and have risen only tepidly since. Two months ago I flagged the issue of whether “hires reassert themselves, as in the past two recoveries, or whether openings without actual hiring continue to soar as they did starting in 2015.” In March both happened, but in April, as I anticipated given the relatively subpar April employment report, the increase in actual hires is definitely lackluster. Yesterday I read a news article (sorry, didn’t bookmark it) that appeared to anticipate all of the trends we saw in this report. Of people who lost jobs early in the pandemic, many of the older workers have chosen simply to retire (hence the record in voluntary quits). Others cited, in roughly equal percentages, (1) problems with child care, (2) job offers unattractive compared with continued enhanced unemployment benefits, and (3) that the jobs on offer paid significantly less than the jobs they had before the pandemic. It is pretty obvious there is a disconnect in the jobs market, and all 3 of the above items are going to have to be addressed in some fashion.

NFIB Small Business Survey: “Nearly Half of Small Businesses Unable to Fill Job Openings” –The latest issue of the NFIB Small Business Economic Trends came out this morning. The headline number for May came in at 99.6, down 0.2 from the previous month. The index is at the 49th percentile in this series. Here is an excerpt from the opening summary of the news release. “Small business owners are struggling at record levels trying to get workers back in open positions,” said NFIB Chief Economist Bill Dunkelberg. “Owners are offering higher wages to try to remedy the labor shortage problem. Ultimately, higher labor costs are being passed on to customers in higher selling prices.” The first chart below highlights the 1986 baseline level of 100 and includes some labels to help us visualize that dramatic change in small-business sentiment that accompanied the Great Financial Crisis and now the COVID-19 pandemic. Compare, for example, the relative resilience of the index during the 2000-2003 collapse of the Tech Bubble with the far weaker readings following the Great Recession that ended in June 2009 and today’s figures.

Child care is holding workers back in this recovery –The May jobs report showed overall growth. Women gained about 381,000 jobs, while men lost around 4,000. These numbers provide fodder for the take that child care is not holding back workers from returning to work. Dominant voices arguing that women with small children make up only 12 percent of the U.S. workforce and, with many of them already back to work, focusing on their needs won’t do much to move the dial. But child care is essential for reaching the Federal Reserve’s full employment mandate. Regardless, wonks have moved on from child care to other hot ticket solutions to getting workers back to work such as reducing pandemic unemployment support. Like scrooges from “A Christmas Carol,” about half of state governors have fallen in line stripping away a last lifeline by closing the federal assistance tap early. Driven by arationale from some sectors struggling to find employees that there is a need to force individuals out of their homes and into low paying jobs. In doing so, these state governments are giving up millions of dollars in federal aid funneling into consumer spending within their states. More optimistic voices have argued for a balanced approach to getting workers back to work in an economy where they have increased bargaining power. Actions like more stable work schedules, increased wages and child care can go a long way towards incentivizing workers to come back. As a principal economist in the federal government and with two decades of independently led research under my belt, I am not surprised this male-dominated field has largely written women off, again. Child care is believed to be a private issue. As such, women disproportionately take up the slack for unpaid care, silently managing the care economy – with little to no pay. This has, on average, given men more advantage in the paid labor market. It has allowed men with children and elder parents to prosper at work while their female counterparts have floundered. Census Bureau researchers have shown that having children reduces labor force participation and earnings for women. This belief has allowed dominating perspectives to write off child care as not helpful in moving this recovery forward. This short-sided view is the same perspective that, in younger generations, has driven women to want less-and-less to start a family as increased education levels, desires to contribute to the more formal sectors of society, and barriers to simultaneously having a career and family have overwhelmed their desire to have children and invest in the next generation.

The C.D.C. eased travel recommendations to more than 100 countries, but not because they’re faring better with the virus. – The Centers for Disease Control and Prevention has eased travel recommendations to over 100 countries and territories, mainly by reclassifying the intensity of outbreaks in many countries. The new rankings do not necessarily reflect improvements in efforts to contain the virus, but rather changes the agency has made to its criteria for determining the scope of the pandemic in each country.The changes in effect made it easier to deem a nation to have a lower level of Covid-19; the agency now requires more cases for a country to be classified as having a “very high” level.As the summer travel season gets underway, the new advisory listlowers barriers to travel to 61 countries and territories that had been said to have the most extensive outbreaks, called Level 4. These countries are now ranked at Level 3, for a “high” level of Covid-19.The reclassified countries include Japan, which is hosting the Olympics but has banned foreign spectators, as well as France, Germany, Greece, Canada, Mexico, Russia, Spain and Italy.While the C.D.C. urges Americans to avoid travel to Level 4 countries, the agency says fully vaccinated people may travel to countries at Level 3. Americans who are not vaccinated, however, are urged to avoid unnecessary travel to regions at Level 3. Among the 56 countries deemed to be the safest for travel, because they have the lowest levels of Covid-19 (Level 1), are Australia, New Zealand, Israel, Vietnam, China, Rwanda, Liberia and Laos. The C.D.C. still urges travelers to be fully vaccinated before traveling to these countries. For travel to countries at Level 2, with “moderate” levels of Covid-19, the agency also says Americans should be fully vaccinated. Those who are unvaccinated are at increased risk for severe illness and should avoid nonessential travel to Level 2 countries. Sixty-one countries are still deemed to have “very high” levels of disease, and the agency says travel to these parts of the word should be avoided. India and Nepal are on this list, as well as Brazil, Sweden and Slovenia. The new classifications stem from updates made to the criteria the agency uses to determine the risk of travel, part of an attempt to “better differentiate countries with severe outbreak situations from countries with sustained, but controlled, Covid-19 spread,” according to the C.D.C. website.

Cruise lines want to sail out of Florida, but a vaccine passport ban stands in the way.– Cruise lines are starting to make plans to sail this summer out of Florida, which one company called “the cruise capital of the world.” But the state’s ban on vaccine passports complicates how ships can navigate its ports.Some cruise lines, such as Norwegian Cruise Line, plan to sail with fully vaccinated crews and ensure that guests are also fully vaccinated. But while the federal government says employers can make on-site employees get vaccinated, a Florida state law prohibits businesses from requiring a vaccine passport, or proof of Covid-19 vaccination, in exchange for services.The law has local officials concerned that their cities lose out if cruise lines decide to skip Florida ports, as Frank Del Rio, chief executive of Norwegian Cruise Line, recently threatened to do as a last resort.On Monday, the company announced that it planned to set sail this summer from New York, Los Angeles and two Florida cities, Port Canaveral and Miami. The cruise line, however, did not specify how it planned to sail out of Florida.Mr. Del Rio said the company was in contact with Gov. Ron DeSantis’s staff and legal team to “ensure that we can offer the safest cruise experience for our passengers departing from the cruise capital of the world.”Other cruise lines, such as Royal Caribbean International, might bow to the state’s vaccine passport ban. Announcing its voyage plans out of Miami this summer, the cruise line said that its crews would be fully vaccinated, while guests were “strongly recommended to set sail fully vaccinated, if they are eligible.”Royal Caribbean guests who are not vaccinated – or unable to prove that they are – will have to be tested for the virus, and could be subject to other protocols to be announced later, the cruise line said.Last week, the mayors of Broward County, Fort Lauderdale and Hollywood sent a letter to Governor DeSantis urging him to reconsider the state’s position on vaccine passports. They argued that the cruise lines “are ready to set sail” based on U.S. Centers for Disease Control and Prevention guidelines, but that the ban on vaccine passports prevented them from doing so.

A cruise ship required all aboard to be vaccinated. Then two passengers tested positive for the virus. -Just as cruises resume after more than a year on pause, the industry is facing an immediate setback.Two passengers sharing a stateroom aboard the Celebrity Millennium, operated by Royal Caribbean’s Celebrity Cruises from the Caribbean island of St. Maarten, tested positive for the coronavirus on Thursday. The ship, billed as the first fully-vaccinated cruise in North America, has one more day at sea on Friday before returning to St. Maarten to disembark.All guests will take an antigen test as part of their disembarkation process, said Susan Lomax, the company’s associate vice president for global public relations.In a statement, the cruise line said that the passengers tested positive during required testing before leaving the ship. The travelers are asymptomatic and are in isolation under observation by a medical team. Testing and contact tracing is in place for close contacts.The ship’s 650 crew members and 600 or so passengers (including a New York Times reporter) were required to be vaccinated before boarding, and had to show proof of a negative coronavirus test taken within 72 hours before sailing from St. Maarten last Saturday.Two passengers on a Mediterranean cruise operated by MSC Cruises also tested positive. Both passengers on the MSC Seaside were asymptomatic when they tested positive during routine testing two days ago, the communications manager Paige Rosenthal said. Immediately after testing positive, the two passengers, who were not traveling together, were isolated along with their parties. They all disembarked in Syracuse, Sicily.All passengers on the vessel were required to take two coronavirus tests before boarding; vaccines were not required. The major cruise lines are preparing to restart operations from U.S. ports this summer. Celebrity Edge is poised to be the first, sailing out of Fort Lauderdale, Fla., on June 26, with all crew and at least 95 percent of passengers fully vaccinated, in accordance with guidelines issued by the Centers for Disease Control and Prevention. At the beginning of the pandemic in 2020, cruise ships were sites of some of the largest concentrations of coronavirus cases. The return of cruises and large gatherings such as conferences is a sign that the pandemic is ending in the United States, as the steady pace of vaccinations – 43 percent of Americans are fully vaccinated, and 52 percent have received at least one dose, according to a New York Times database – gives some event organizers the confidence to resume business.

New York state permits children and adults to be unmasked in K-12 schools – On Friday, New York State Health Commissioner Howard Zucker informed the Centers for Disease Control and Prevention (CDC) that masks would no longer be required for K-12 educators, students, or youth at summer camps in the state. This move by the Democratic Cuomo administration follows the recent dropping of other COVID-19 safety standards across the state. Zucker’s letter told CDC Director Rochelle Walensky that it would go forward with these measures unless the CDC objected. He wrote, “If there is any data or science that you are aware of that contradicts moving forward with this approach, please let me know as soon as possible.” As of Sunday, no official guidance has been sent to school districts, causing confusion statewide about whether the mask mandate has been dropped for this Monday. One superintendent of a school district in the Hudson Valley said that his email was “blowing up” with questions about the dropping of the masking mandate. The Cuomo administration, of course, knows full well that the CDC will supply no evidence that contradicts this reckless action. Last week, Cuomo remarked that the CDC’s advice that children wear masks outdoors “seems a little extreme.” The CDC, acting in concert with the Biden Administration, has in fact led the effort in the US to systematically dismantle mitigation measures to prevent the spread of COVID-19, under conditions in which the majority of Americans, including children, remain unvaccinated. On May 13, the CDC dropped the requirement that unvaccinated people wear masks in public venues, absurdly relying on an honor system, and stopped tracking COVID-19 infections among those who have been inoculated. Cuomo has fully embraced the CDC’s lifting of mask requirements for unvaccinated people. He recently stated at a press conference, “If you are vaccinated, you are safe,” adding, “No masks. No social distancing.”

Chicago charter school teachers begin strike after unanimous authorization vote – On Monday, 34 teachers at three Urban Prep Academies in Chicago began a strike against the charter schools after three years of negotiations that have failed to produce a contract. Urban Prep manages two all boys’ schools located in the Bronzeville and Englewood neighborhoods on Chicago’s south side and one campus in the downtown loop area, serving a combined total of roughly 1,500 students. At the end of May, the teachers unanimously voted to authorize a strike against the charter school operator, animated by a desire for higher wages and improved benefits. In addition, teachers are demanding that the Urban Prep management provide the federally mandated resources for special education students. The Chicago Teachers Union (CTU) officially represents the Urban Prep teachers, but the middle-class bureaucrats that run the CTU are thoroughly hostile to the interests of rank-and-file teachers. The union has not publicly listed its demands for the contract, instead issuing a press release that simply states, “Management continues to reject language protecting special education students, classroom needs, student resources.” Despite the fact that the starting salary for Urban Prep teachers is an estimated $11,000 less than the average Chicago Public Schools (CPS) teacher represented by the CTU, the union is not publicly making any demands for pay parity with other CPS teachers. The CTU’s press release notes that in the past year Urban Prep received a $3 million Paycheck Protection Program (PPP) loan funded by the CARES Act, which was not utilized for its express purpose of funding teachers’ salaries, but makes no demand that this siphoning of teachers’ pay be reversed.

Local leaders build pressure on Biden to cancel student loans –Local leaders are stepping up the pressure on President Biden to tackle the issue of student debt by taking official action in their own jurisdictions that they hope will urge him to forgive some college loans. The District of Columbia and several other city governments have passed resolutions that call on the federal government to act on student loan cancellations. The moves come as Biden laid out new measures toward economic equity this week, an issue that student loan advocates say could be tackled in part by canceling student loans. The resolution D.C. passed on Tuesday unanimously urges immediate attention from the federal government and to “begin the transition to education as a public good,” outlining how student loans impact the District’s residents. “Student debt is a contradiction in terms. Students should not have to accrue debt to be educated, and education should be a public good. The student debt crisis hits communities of color, women, and low-income families hardest – both in the District and across the United States,” said D.C. Councilwoman Janeese Lewis George, who introduced the resolution. The Boston City Council passed a resolution in April that calls on the federal government to cancel all student loan debt, saying it’s a “burden” that disproportionately impacts communities of color. A resolution passed by Philadelphia’s City Council in March specifically called for Biden to cancel student debt within his first 100 days in office, which elapsed in April. Cambridge, Mass.; Somerville, Mass.; and Watsonville, Calif., have taken similar steps. Biden’s speech on Tuesday to mark the Tulsa Race Massacre centennial unveiled a plan to drive racial equity throughout the country by expanding and targeting federal purchasing power to benefit more minority-owned businesses. He didn’t discuss student loan forgiveness during his remarks, which the NAACP has criticized the president for. NAACP President Derrick Johnson said in a statement that student loan debt suppresses Black Americans. “You cannot begin to address the racial wealth gap without addressing the student loan debt crisis. You just can’t address one without the other. Plain and simple,” Johnson said. When questioned about Biden’s interest in tackling student debt, the White House has pointed to Biden’s budget proposal, unveiled on Friday, which includes two years of free community college and an increase in Pell grants. The American Families Plan, the second part of Biden’s sweeping infrastructure package, includes $46 billion in investments for Historically Black Colleges and Universities, as well as tribal colleges and universities and other minority-serving institutions – another point the White House has touted.

Biogen CEO says $56K a year for new Alzheimer’s drug is a ‘fair’ price –Biogen CEO Michel Vounatsos on Monday said in an interview that he believed charging $56,000 per year for his company’s newly approved Alzheimer’s medication was “fair,” citing years of “no innovation” in the marketplace.Appearing on CNBC’s “Power Lunch,” Vounatsos said the price of the drug, sold as Aduhelm, was a reflection of “two decades of no innovation,” and said it would allow Biogen to fund medications for other diseases.He also vowed that his company would not raise the price of Aduhelm for at least the next four years.Vounatsos added that it was time to “invest” in Alzheimer’s treatment when asked if he expected pushback from patients for the high price of his company’s drug.The Food and Drug Administration (FDA) announced on Monday that ithad approved the Biogen drug, also known as aducanumab. This is the first Alzheimer’s medication approved by the FDA since 2003.Though it was approved, the drug is controversial as some Alzheimer’s experts and committees have said there is not enough evidence to suggest that it is effective in treating the neurologic disorder.

The C.D.C. urges parents to get childhood vaccinations up to date following a steep decline last year. – Pediatricians are urging U.S. parents to get their children caught up on routine vaccinations, following a decline in the number of inoculations for diseases like measles as the pandemic forced restrictions, including shelter-at-home orders, last year.New data from 10 jurisdictions that closely monitor immunizations confirm that the number of administered vaccine doses plunged between March and May of last year, especially among older children, the Centers for Disease Control and Prevention reported on Thursday.Though vaccinations rebounded between June 2020 and September 2020, approaching pre-pandemic levels, the increase was not enough to make up for the earlier drop, the study found.Vaccinations are required for attendance at most schools, camps and day care centers, but the authors of the C.D.C. study warned that the lag nonetheless “might pose a serious public health threat that would result in vaccine-preventable disease outbreaks.”They expressed concern that the transition to remote learning during the pandemic may have hobbled enforcement of vaccination requirements, noting that even temporary declines in immunization can compromise herd immunity.In 2018-2019, a measles outbreak occurred in Rockland County, N.Y., and nearby counties after measles vaccination coverage in area schools dropped to 77 percent, below the 93 percent to 95 percent figure needed to sustain herd immunity. “Pediatric outbreaks of vaccine-preventable diseases have the potential to derail efforts to reopen schools” in the fall, the researchers added.Parents should plan ahead and schedule appointments now so that their children can be protected, said Dr. Yvonne Maldonado, who chairs the committee on infectious diseases at the American Academy of Pediatrics.”We should start thinking about it,” Dr. Maldonado said in a phone interview. “People forget. We have regular pertussis outbreaks every four or five years, and are just waiting to see another one.””We’re probably going to start seeing more infections, because kids are going to get back together and there’s going to be less masking and social distancing,” she added. The number of administered doses of diphtheria, tetanus and pertussis vaccines (DTaP) dropped 15.7 percent among children under age 2, and 60 percent among those aged 2 to 6 in the spring of last year, compared with the same period in 2018 and 2019. Doses of measles, mumps and rubella vaccine (MMR) declined by 22.4 percent among 1-year-olds, and 63 percent among those aged 2 to 8. HPV vaccine administration declined by more than 63 percent among youngsters aged 9 to 17, compared with the same period in 2018 and 2019; and doses of Tdap (tetanus, diphtheria and pertussis) decreased by over 60 percent.

Covid Was a Tipping Point for Telehealth. If Some Have Their Way, Virtual Visits Are Here to Stay. – As the covid crisis wanes and life approaches normal across the U.S., health industry leaders and many patient advocates are pushing Congress and the Biden administration to preserve the pandemic-fueled expansion of telehealth that has transformed how millions of Americans see the doctor.The broad effort reaches across the nation’s diverse health care system, bringing together consumer groups with health insurers, state Medicaid officials, physician organizations and telehealth vendors.And it represents an emerging consensus that many services that once required an office visit can be provided easily and safely – and often more effectively – through a video chat, a phone call or even an email.”We’ve seen that telehealth is an extraordinary tool,” said David Holmberg, chief executive of Pittsburgh-based Highmark, a multistate insurer that also operates a major medical system. “It’s convenient for the patient, and it’s convenient for the doctor. … Now we need to make it sustainable and enduring.”Last fall, a coalition of leading patient groups – including the American Heart Association, the Arthritis Foundation, Susan G. Komen and the advocacy arm of the American Cancer Society – hailed the expansion of telehealth, noting the technology “can and should be used to increase patient access to care.”But the widespread embrace of telemedicine – arguably the most significant health care shift wrought by the pandemic – is not without skeptics. Even supporters acknowledge the need for safeguards to prevent fraud, preserve quality and ensure that the digital health revolution doesn’t leave behind low-income patients and communities of color with less access to technology – or leave some with only virtual options in place of real physicians.Some worry that telehealth, like previous medical innovations, may become another billing tool that simply drives up costs, a fear exacerbated by the hundreds of millions of dollars flowing into the burgeoning digital health industry.

The Proposed Hospital Mega-Merger in Rhode Island Shouldn’t Happen –The two largest hospital systems in Rhode Island, Lifespan and Care New England (CNE), submitted an application to the state in April to form a new health system in partnership with Brown University.* In spite of proponents’ claims to the contrary, this mega-merger would likely raise health care costs, wouldn’t meaningfully affect care quality, and would do nothing to keep care local.A robust body of evidence supports the idea that hospital mergers, regardless of the tax-exempt status of merging parties, generally raise commercial prices. This happens because hospitals with more market powerhave more leverage to charge health plans higher prices. Since a merged Lifespan-CNE system would control 68% of the acute care beds in the state if approved, its hospitals could (and would) demand ever-higher reimbursement from commercial payers.To reassure policymakers, Lifespan, CNE, and Brown have pointed to state regulations that limit hospitals’ ability to increase the rates they charge commercial health insurers. These rate caps are undeniably a potent tool for containing health care costs. However, they do not prevent hospitals from driving up prices for services rendered to health plans regulated exclusively by the federal government under the Employee Retirement Income Security Act (ERISA). Since ERISA-covered plans account for about 43% of the commercial insurance market in the state, the new hospital system could extract enormous profits using this loophole, which would raise premiums for thousands of Rhode Islanders.A study published in the New England Journal of Medicine last year found that hospital consolidation was not associated with significant differences in rates of mortality or hospital readmission. Worse, the study authors observed a statistically significant association between hospital mergers and lower-quality patient care experiences.To be taken seriously, hospital systems hoping to consolidate should demonstrate what Harvard professors Leemore Dafny and Thomas Lee have called cognizable efficiencies. This means that promised gains in care quality or patient experiences need to be empirically measurable and likely to emerge. It also means that the onus is on hospital systems to explain why a merger is their only means of achieving better quality. Until Lifespan, CNE, and Brown University do just that (to date, they have not), Rhode Island policymakers should have little faith that quality improvements will materialize.

China To Build 25-30 More Bio-Labs Like In Wuhan Over Next 5 Years – In the next few years, the world could see almost 60 maximum security Level 4 virology labs in operation. The Guangdong province announced in May that it was planning to build between 25 to 30 biosafety labs in the next five years.“What could go wrong?” questioned Human Events senior editor Jack Posobiec:The facilities will be flung all over the globe, spanning 23 countries including the United Kingdom, the United States, India, Gabon, and Cote d’Ivoire.The current Wuhan Institute of Virology is now at the center of an investigation by US authorities into whether COVID-19 could have leaked from its lab.About 75 percent of these facilities are or will be built in urban areas, which has experts around the world worried about the possibility of further “lab leaks.””Reporting is getting better certainly in some countries such as the UK and US where there has been media coverage of this, but we’re not yet where we want to be. The more work that is going on, the more accidents will happen,” commented Filippa Lentzos of King’s College in London, the Financial Times reported.Richard Ebright, a professor of chemical biology at Rutgers University, concurred:“The larger the number of institutions and the larger the number of individuals with access to these dangerous agents, the greater the risk.”Ebright said that accidents and leaks have happened in large numbers in places that have weaker biosafety standards.“We need to strengthen biosafety and biosecurity rules around the world,” the scholar urged.

India’s central government will take over vaccinations amid criticism over its handling of the outbreak – Amid criticism of the government’s handling of one of the world’s deadliest outbreaks, Prime Minister Narendra Modi of India said on Monday that the federal government would play a bigger role procuring Covid-19 vaccines on behalf of states. It’s a process that had been mired in confusion because of squabbling between the central and state governments and a lack of vaccine supply.Mr. Modi said in a nationwide address that his government would increase both the pace of inoculations and the purchasing of vaccines. Less than 4 percent of the country’s 1.4 billion people have been fully vaccinated, according to a New York Times database.”The government of India will procure 75 percent stock from vaccine manufacturers and provide it to states,” he said. “That means, no state governments will have to spend anything on vaccines.”Many Indian states had earlier vowed to vaccinate their populations for free, particularly those ruled by parties in opposition to Mr. Modi’s Bharatiya Janata Party, but they were forced to close vaccination centers after they ran out of supplies. Mr. Modi also announced free inoculations for all Indians above the age of 18, a policy that was earlier reserved for frontline workers and people older than 45.The prime minister and his government have come under heavy criticism over their handling of the pandemic. Mr. Modi and members of his party appeared at political rallies and allowed mass gatherings to take place before the country experienced a devastating second wave.Mr. Modi has kept a relatively low profile since his political rallies in April, in contrast with his frequent live addresses during the first wave of the pandemic last year, when he announced a nationwide lockdown four hours before it took effect.Last week, the country’s top court asked the government to explain how it planned to achieve its own target of inoculating about 900 million adults by the end of the year. It also called out the government for allowing private health facilities to charge people under 45 for vaccinations, calling the policy “arbitrary and irrational.”Mr. Modi said in his address that private hospitals will still be allowed to procure 25 percent stock of the vaccines. State governments were required to ensure that only 150 rupees, or a little more than $2, could be levied as a “service charge” on top of the usual price, he said.

Uganda locks down as a virus wave sickens young people -.Uganda’s president has introduced new lockdown measures in an effort to tackle surging coronavirus cases. President Yoweri Museveni announced the closure of all schools and universities for 42 days starting Monday and suspended public gatherings and prayers in mosques and churches. Public transportation between and across districts will also be barred for 42 days, starting Thursday to allow students who are in school to get home. Mr. Museveni also banned house parties and said bars, cinemas and concerts would remain closed. The announcement on Sunday evening came as the country – which imposed tight restrictions early in the pandemic but had eased measures as cases dropped – recorded an upsurge in cases in recent weeks. On June 4, the East African nation recorded 1,259 cases, its highest number in a single day. The authorities reported long lines at hospitals in recent days, with Mr. Museveni saying the wave was mostly affecting people between the ages of 20 and 39 and that there was increased transmission among those ages 10 to 19. “We are concerned that this will exhaust the available bed space and oxygen supply in hospitals, unless we constitute urgent public health measures,” Mr. Museveni said in his speech. Health officials said that the virus is surging because people aren’t washing hands and wearing face masks. Mr. Museveni also pointed to new variants – specifically those first reported in India, South Africa and the United Kingdom – increasing cases. Overcrowding in schools and lack of adequate sanitation facilities has also spread the virus. As part of the new directives, all teachers will have to be fully vaccinated before they are allowed back into schools. With more than 44 million people, Uganda has so far inoculated over 748,000 people, with just over 35,000 of them fully vaccinated. As in much of Africa, its vaccine program has been slowed down by global vaccine shortages, with the crisis in India particularly threatening supplies.

Mexico’s ruling Morena party suffers losses in midterm elections – Mid-term elections held yesterday for the Chamber of Deputies of the Mexican Congress and 15 of 32 state governorships, along with the mayoral posts (alcald’as) of the 16 boroughs (delegaciones) of Mexico City, which holds a federal entity status akin to the states. The preliminary results showed significant losses for the ruling party Morena (National Regeneration Movement) and its head, President Andres Manuel Lopez Obrador (popularly known as AMLO), who was elected in a landslide in 2018. Three hundred of the 500 congressional seats were up for direct election of candidates, the remaining 200 being allocated proportionally based on those results. Morena is projected to win about 190 seats in the lower house, a loss of about 60 seats. Morena maintains a majority of upwards of 280 seats, in combination with its “Together We Make History” allies, the pseudo-left Labor Party (PT, Partido de Trabajo), the increasingly right-wing Ecological Green Party (PVEM), which picked up around 30 seats and the socially conservative Solidarity Encounter Party (PES), which will at most win a handful of seats. However, the ruling party has lost its two-thirds supermajority that would empower it to implement changes to the Mexican Constitution without the support of additional parties. AMLO has said he wants to change the constitutional reform opening up the energy sector to private and foreign companies that was adopted at the outset of the term of the prior corrupt president, Enrique Pena Nieto. That energy program was pushed through by the three parties that now make up the “right-left” Va por Mexico (Go for Mexico) electoral coalition consisting of the right-wing National Action Party (PAN), the previously governing Institutional Revolutionary Party (PRI) of Pena Nieto, and the Party of the Democratic Revolution (PRD), the supposed “left” part of the coalition. They picked up the bulk of the seats that Morena lost. Once the third-strongest party after the PRI and PAN, the PRD, “social democratic” in name only, will gain just over a dozen seats, having pursued a trajectory which in fact is ever more to the right. Morena did considerably better in the state elections for governors. It won 10 or 11 of the 15 seats up for grabs, in addition to the one it previously held. That will extend its power over a number of states, several largely rural – Baja California, Baja California Sur, Colima, Guerrero, Michoacfln, Nayarit, Sinaloa, Sonora, Tlaxcala, Zacatecas, and possibly oil-rich Campeche, while an allied PT/PVEM candidate will likely win in San Luis Potos’. Morena’s biggest defeat was in Mexico City, a stronghold of parties aligned with AMLO since the late 1990s. AMLO was once mayor, and the current mayor is Claudia Sheinbaum, a leading contender to succeed him as Morena’s next presidential candidate in 2024. Morena had held 11 of the 16 alcald’as, but appeared likely to win only six or seven of them. COVID-19 hit especially hard in the city, and discontent simmered over the collapse of an elevated metro line in May, killing 26 riders and injuring many more.. The criminal negligence and corruption involved was clear for all to see.

France’s Macron slapped in face during walkabout (Reuters) – French President Emmanuel Macron was slapped in the face on Tuesday by a man in a crowd of onlookers while on a walkabout in southern France, video of the incident showed. Macron’s security entourage quickly intervened to pull the man to the ground and move Macron away from him. Two people were arrested in connection with the incident, broadcasters BFM TV and RMC radio reported. The incident took place while Macron was on a visit to the Drome region in south-eastern France, where he met restaurateurs and students to talk about how life is returning to normal after the COVID-19 epidemic. In video circulating on social media, Macron, dressed in shirt sleeves, could be seen walking towards a crowd of well-wishers who were behind a metal barrier. The French president reached out his hand to greet one man, in a green T-Shirt, with glasses and a face mask. The man could be heard shouting out “Down with Macronia” (“A Bas La Macronie”) and then he delivered a slap to Macron’s face. Two of Macron’s security detail tackled the man in the green T-shirt, while another ushered Macron away. But Macron remained in the vicinity of the crowd for a few more seconds, and appeared to be talking to someone on the other side of the barriers. The presidential administration said there had been an attempt to strike Macron, but declined further comment.

British tourists scramble to return from Portugal to meet a new quarantine deadline. -British tourists scrambled to leave Portugal over the weekend in order to beat a Tuesday deadline for a new quarantine imposed by the British government on those returning from Portugal over concerns about a dangerous virus variant.Britain had recently put Portugal, one of the most popular destinations for British tourists, and 12 other countries and territories with low coronavirus caseloads on a “green list,” allowing visitors coming from Britain to avoid a quarantine period upon returning from those locations.Britons fatigued by a miserable winter and a four-month national lockdown had just begun flocking to Portugal, because most of the other green-listed places were either not accepting tourists or were not already favored destinations. The process still involved several forms and P.C.R. virus tests, whose costs can total hundreds of dollars.The decision Thursday to reintroduce restrictions was heavily criticized by British travel operators and opposition politicians. But the government defended the move as a health-safety requirement to help Britain fight a new coronavirus variant that was first detected in India, known now as the Delta variant.Britain’s switch of travel rules for Portugal prompted thousands of British tourists to pay extra to rebook early return flights. British Airways and other airlines added flight capacity to help bring them home.As British tourists headed early for the airport in Faro on Sunday, a major tourism hub in Portugal’s southern Algarve region, the line there stretched well outside the terminal, according to reports from British newspapers.The latest quarantine decision came less than a week after thousands of English soccer fans had visited Porto, in northern Portugal, to watch the final of the Champions League, with no quarantine restriction. The move by British officials comes as cases remain generally low in Britain, though officials have been working to contain surges of the Delta variant. Daily cases have increased by 89 percent from the average two weeks ago, while deaths have increased by 49 percent, according to a New York Times database.

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