ICYMI: Tourism-Dependent States See Big Economic Jump
A measure of current personal finances in Hawaii and Nevada — two states that have big tourism industries — increased in April as the country began to recover economically from the coronavirus pandemic. Consumer confidence improved in 39 of 50 states during the month, according to new Morning Consult data. Read more here.
The Department of Justice will appeal a federal judge’s decision that overturned a national eviction moratorium from the Centers for Disease Control and Prevention, according to a DOJ spokesperson. In the ruling, U.S. District Judge for the District of Columbia Dabney Friedrich wrote that “it is the role of the political branches, and not the courts, to assess the merits of policy measures designed to combat the spread of disease, even during a global pandemic.” (Politico)
In prepared testimony for the House Financial Services Committee, Securities and Exchange Commission Chairman Gary Gensler said that the agency will study potential new rules related to the GameStop Corp. market mayhem and the blowup of Archegos Capital Management. Gensler will testify today that “many of our regulations were largely written before these recent technologies and communication practices became prevalent” and that the SEC may need to “freshen up our rule set.” (The Wall Street Journal)
Brian Deese, director of the White House National Economic Council, has alerted President Joe Biden’s economic team about the inability of businesses such as restaurants, construction companies and others to find enough workers for the rates they’re offering, while Treasury Secretary Janet Yellen has privately warned against overreacting to anecdotes about worker shortages, according to two people aware of internal discussions. In an interview, Jared Bernstein, a member of the White House Council of Economic Advisers, said that economists expect to see “some wage pressure” as the job market tightens. (The Washington Post)
Senate Minority Leader Mitch McConnell said Republicans are united behind stopping President Biden’s agenda, putting a damper on already slim hopes for bipartisan cooperation in Congress ahead of more talks with the White House on a possible infrastructure deal. “One hundred percent of my focus is standing up to this administration,” the Kentucky Republican said at a press conference in his home state Wednesday, in response to questions about infighting among House Republicans.
Rep. Nicole Malliotakis, R-N.Y., said it pained her to vote against the $1.9 trillion American Rescue Plan. But in the weeks that followed, the first-term Republican issued a news release celebrating more than $3.7 million from the package that went to community health centers in her district as one of her “achievements.”
The Biden administration blocked a Trump-era regulation that would have made it easier for businesses to categorize gig workers and others as independent contractors, and signaled it would take a tougher enforcement stance against employers on worker classification. The Labor Department said Wednesday it is nullifying a rule it completed in early January that sought to make it more difficult for a gig worker, such as an Uber or DoorDash driver, and other workers to be counted as an employee under federal law.
The U.S. economic reopening has caused some “bumps” as companies scramble to fill open positions, but it’s a good thing if they are forced to raise wages, a senior White House aide said. “When we are hearing stories of businesses having to raise wages in order to attract workers back, that’s a good thing — that is a positive development, especially for lower income folks in this country,” Bharat Ramamurti, deputy director of the National Economic Council, said on Bloomberg TV Wednesday.
Yuka Hayashi and Jared S. Hopkins, The Wall Street Journal
The U.S. said Wednesday it would support the temporary waiver of intellectual property provisions to allow developing nations to produce Covid-19 vaccines created by pharmaceutical companies, citing an urgent need to stem the pandemic. Overriding objections from the pharmaceutical industry, U.S. Trade Representative Katherine Tai said the U.S. would support a proposal working its way through the World Trade Organization.
Millions of jobs requiring a four-year college degree can be done without that level of education, some corporate leaders say. To address inequalities in business and society, some executives suggest that companies shake up their approach to hiring and consider unconventional candidates.
Treasury Department officials on Wednesday urged Congress to move quickly to increase the federal borrowing limit this summer, warning that the federal government could run out of cash much sooner than in previous debt-limit episodes. Congress voted in July 2019 to suspend the limit through July 31. If lawmakers can’t reach another agreement before then, the ceiling would automatically be reinstated and the Treasury wouldn’t be able to raise additional cash from the sale of government securities.
President Joe Biden’s plan to raise $700 billion over a decade from increased tax audits of the wealthy and corporations — a major funding source for his economic-investment proposals — will probably take years to bear fruit and faces skepticism that the figure is realistic. The Biden administration has proposed a more than 10% funding increase for the Internal Revenue Service for the next fiscal year and an overall investment of $80 billion over the next 10 years to beef up the agency’s depleted auditing staff and outdated technology.
Jim Tankersley and Annie Karni, The New York Times
President Biden delivered a clear and punchy message to America’s highest earners on Wednesday: I’m going to raise your taxes, but your vacation homes are safe. In an exchange with reporters at the White House, Mr. Biden defended with gusto his plans to increase taxes on high earners and the wealthy. He railed against high-earning chief executives and promised that his plans were “about making the average multimillionaire pay just a fair share.”
Weekly unemployment claims have in recent weeks reached their lowest level since the Covid-19 pandemic began more than a year ago, a signal that the labor-market rebound is gathering force. Economists surveyed by The Wall Street Journal expect worker filings for jobless claims, a proxy for layoffs, to have fallen to 527,000 last week from 553,000 the prior week.
Federal Reserve Vice Chairman Richard Clarida told CNBC on Wednesday that he thinks the central bank should keep its ultra-loose policy in place even as the U.S. economy storms back from its pandemic-era tumble. In a “Closing Bell” interview, Clarida said he expects the economy to grow close to 7% for the full year, which would be the fastest pace since 1984.
Banks across Wall Street are looking to tighten the lending terms of some of their hedge-fund clients on the heels of Archegos Capital Management’s collapse. Firms including Credit Suisse Group AG, Morgan Stanley and UBS Group AG are reviewing their businesses that offer financing to hedge funds and family offices for potential vulnerabilities to safeguard against another Archegos-style event, said bankers and hedge-fund managers.
JPMorgan Chase & Co. is further expanding its balance sheet in Frankfurt as it adapts to a post-Brexit Europe. The U.S. bank expects to add a similar amount to its European hub in 2021 as it did last year, according to its annual report for J.P. Morgan AG.
Retail investors aren’t just flocking to Robinhood. Fidelity gathered millions of new clients – including millennials – during the first three months of the year. Fidelity Investments added 4.1 million new accounts in the first quarter of 2021, up nearly 160% from the first quarter of 2020.
Some investors are betting on a slow, steady grind downward for the U.S. dollar. Hedge funds and asset managers are scooping up derivatives that pay off when the dollar declines slowly or stays within a narrow range.
Rocket Mortgage originated more than $100 billion in mortgages for yet another quarter, but profit margins are trending down. And the country’s largest mortgage lender expects a good-sized slowdown in the second quarter of 2021. All told, the Detroit lending powerhouse originated $103.6 billion in closed loans in the first quarter of 2020, more than double its originations in Q1 2020.
The Federal Reserve is deciding whether to give financial-technology companies more direct access to its payment system after many of the upstarts swelled in popularity during the pandemic. The central bank invited the public to comment on proposed guidelines that would allow companies with “novel types of banking charters” to access accounts and services provided by the Fed, according to a statement Wednesday.
The fintech Chime is nearing a deadline to stop implying that it operates as a bank, according to a settlement agreement with California regulators. The San Francisco-based company was using “chimebank” in its website address, allegedly in violation of a state law that is meant to prevent businesses from misleading the public, according to the California Department of Financial Protection and Innovation, which began an investigation last year.
Bitcoin-focused firm Galaxy Digital Holdings Ltd. has agreed to buy BitGo Inc. for $1.2 billion in cash and stock, the first $1 billion deal in the cryptocurrency industry. The deal coincides with a surge in interest and a nearly yearlong rally in the crypto sector whose market value has surged to $2 trillion.
After bitcoin and dogecoin’s blistering rally this year, individual investors are venturing further out into the cryptocurrency universe in search of the next big thing. A more than 12,000% rally this year in dogecoin, a cryptocurrency that was set up as a joke and serves no purpose, sent its price to a record 69 cents per token this week.
Coin Metrics, a cryptocurrency and blockchain data provider to institutional clients, raised $15 million through investors led by Goldman Sachs Group Inc. The firm, founded in 2017, plans to use the proceeds to grow in Europe and Asia, create new products and expand current offerings, Tim Rice, a co-founder and the firm’s chief executive officer, said in an interview.
Paul Aucoin and D. Paul Robichaux (Port of South Louisiana), Morning Consult
As a pandemic response, a federal investment in infrastructure creates long-lasting economic opportunity and rebuilds a nation that has for too long ignored its critical infrastructure needs. Most notably, if we don’t invest in critical infrastructure now – when a national jobs program is so desperately needed, and our critical infrastructure is literally crumbling – when will we?
Has anyone noticed that the president has proposed increasing federal spending by nearly $1 trillion a year, while promising that 98% of Americans will pay nothing for it? The very idea would have seemed mad to every previous generation of Americans.
Income volatility has been rising since the 1970s and reflects a decline in economic security among middle- and low-income households. Half of all American adults are affected by chronic illness, and 40 percent of adults who have health insurance have difficulty paying for medical care (Claxton et al., 2017).