Coronavirus (2019-nCoV)

More stories

  • 113 Shares119 Views

    in Economy

    U.S. National Debt Tops $30 Trillion as Borrowing Surged

    by

    The record red ink, fueled by spending to combat the coronavirus, comes as interest rates are expected to rise, which could add to America’s costs.WASHINGTON — America’s gross national debt topped $30 trillion for the first time on Tuesday, an ominous fiscal milestone that underscores the fragile nature of the country’s long-term economic health as it grapples with soaring prices and the prospect of higher interest rates.The breach of that threshold, which was revealed in new Treasury Department figures, arrived years earlier than previously projected as a result of trillions in federal spending that the United States has deployed to combat the pandemic. That $5 trillion, which funded expanded jobless benefits, financial support for small businesses and stimulus payments, was financed with borrowed money.The borrowing binge, which many economists viewed as necessary to help the United States recover from the pandemic, has left the nation with a debt burden so large that the government would need to spend an amount larger than America’s entire annual economy in order to pay it off.Some economists contend that the nation’s large debt load is not unhealthy given that the economy is growing, interest rates are low and investors are still willing to buy U.S. Treasury securities, which gives them safe assets to help manage their financial risk. Those securities allow the government to borrow money relatively cheaply and use it to invest in the economy.For years, presidents have promised to limit federal borrowing and bring down the nation’s budget deficit, which is the gap between what the nation spends and what it takes in. Under President Bill Clinton, the United States actually ran a budget surplus between 1998 and 2001.But taming deficits had fallen out of fashion in recent years, including during the Trump administration, when lawmakers blew through budget caps and borrowed money to fund tax cuts and other federal spending.Now, deficit concerns have resurfaced, helping to stall negotiations over President Biden’s $2 trillion safety net and climate spending proposal. Senator Joe Manchin III of West Virginia, a Democrat whose vote is key to passing Mr. Biden’s package, cited “staggering debt” as a reason he could not support the legislation.Senator Joe Manchin on Capitol Hill last month.Tom Brenner for The New York TimesThe lingering pandemic has slowed the momentum of the economic recovery, fueling inflation rates unseen since the early 1980s and raising the prospect of higher interest rates, which could add to America’s fiscal burden.“Hitting the $30 trillion mark is clearly an important milestone in our dangerous fiscal trajectory,” said Michael A. Peterson, the chief executive officer of the Peter G. Peterson Foundation, which promotes deficit reduction. “For many years before Covid, America had an unsustainable structural fiscal path because the programs we’ve designed are not sufficiently funded by the revenue we take in.”Understand Inflation in the U.S.Inflation 101: What is inflation, why is it up and whom does it hurt? Our guide explains it all.Your Questions, Answered: We asked readers to send questions about inflation. Top experts and economists weighed in.What’s to Blame: Did the stimulus cause prices to rise? Or did pandemic lockdowns and shortages lead to inflation? A debate is heating up in Washington.Supply Chain’s Role: A key factor in rising inflation is the continuing turmoil in the global supply chain. Here’s how the crisis unfolded.The gross national debt represents debt held by the public, such as individuals, businesses and pension funds, as well as liabilities that one part of the federal government owes to another part.Renewed concerns about debt and deficits in Washington follow years of disregard for the consequences of big spending. During the Trump administration, most Republicans ceased to be fiscal hawks and voted along party lines in 2017 to pass a $1.5 trillion tax cut along with increased federal spending.While Republican lawmakers helped run up the nation’s debt load, they have since blamed Mr. Biden for putting the nation on a rocky fiscal path by funding his agenda. After a protracted standoff in which Republicans refused to raise America’s borrowing cap, threatening a first-ever federal default, Congress finally agreed in December to raise the nation’s debt limit to about $31.4 trillion.In January 2020, before the pandemic spread across the United States, the Congressional Budget Office projected that the gross national debt would reach $30 trillion by around the end of 2025. The total debt held by the public outpaced the size of the American economy last year, a decade faster than forecasters projected.The nonpartisan office warned last year that rising interest costs and growing health spending as the population ages would increase the risk of a “fiscal crisis” and higher inflation, a situation that could undermine confidence in the U.S. dollar.The Biden administration has said the $1.9 trillion pandemic relief package the Democrats passed last year was a necessary measure to protect the economy from further damage. Treasury Secretary Janet L. Yellen has argued that such large federal investments are affordable because interest costs as a share of gross domestic product are at historically low levels thanks to persistently low interest rates.But that backdrop could start to change as the Federal Reserve prepares to raise interest rates, which have been set near-zero since the start of the pandemic, to curb inflation.The Fed indicated last week that it was on track to begin increasing rates at its next meeting in March. Investors are predicting the central bank could usher in five rate increases this year, bringing rates to a range of 1 to 1.25 percent.Trillions in federal spending has left the United States approaching levels of red ink not seen since World War II.Sarah Silbiger/ReutersThe Fed has also been keeping long-term interest rates low by buying government-backed debt and holding those securities on its balance sheet. Those purchases are set to wrap up next month, and last week, the Fed signaled it planned to “significantly” shrink its bond holdings.Esther L. George, the president of the Federal Reserve Bank of Kansas City, suggested during a speech this week that the Fed’s big bond holdings might be lowering longer-term interest rates by as much as 1.5 percentage points — nearly cutting the interest rate on 10-year government debt in half. While shrinking the balance sheet risks roiling markets, she warned that if the Fed remained a big presence in the Treasury market, it could distort financial conditions and imperil the central bank’s prized independence from elected government.Inflation F.A.Q.Card 1 of 6What is inflation? More

  • 113 Shares149 Views

    in Economy

    Job Openings Remained Elevated in December Despite Omicron Surge

    by

    The Omicron variant of the coronavirus has disrupted business and kept millions of people home from work. But in December, at least, it did little to cool off the red-hot job market.Employers posted 10.9 million open jobs in the last month of 2021, the Labor Department said Tuesday. That was up modestly from November, and close to the record 11.1 million openings in July. There were roughly 1.7 job openings for every unemployed worker in December, the most in the two decades the government has been keeping track.Lots of jobs, not enough workersThere were nearly 11 million jobs posted in December and fewer than 7 million unemployed workers, the highest ratio in the two decades the government has been keeping track.

    Notes: Unemployment figures adjusted to account for workers misclassified as employed. Data is seasonally adjusted.Source: Labor DepartmentBy The New York TimesForecasters had expected the jump in coronavirus cases to lead to a pullback in recruiting, and a slowdown is still possible. Nationally, coronavirus cases did not reach their peak until mid-January, and they are still rising in some parts of the country. Job postings on the career site Indeed, which tend to track the government’s data relatively closely, remained high through much of December but fell in January.The virus kept millions of workers home in December and January, leaving many businesses short staffed and forcing some to close or limit their hours. That probably forced some companies to postpone hiring. Employers might have also found it harder to hire because some people were unwilling to look for or start new jobs as virus cases rose, or unable to do so because of child care obligations.But there is little evidence so far that Omicron has derailed a strong job market. Employers laid off or fired just 1.2 million workers in December, the fewest on record. The difficult hiring environment may have led some companies that normally shed temporary workers after the holidays to hold on to them this year, said Diane Swonk, chief economist for the accounting firm Grant Thornton.“Companies kept their seasonal hires,” she said. “One, because it’s already a labor shortage. And two, because they had so many people out sick that they wanted to keep people on.”Many workers are taking advantage of their leverage by seeking out better jobs. More than 4.3 million workers quit their jobs voluntarily, down a bit from November but still near a record.With workers scarce and employees in the driver’s seat, companies are raising pay. Wages and salaries rose 4.5 percent in the final three months of 2021, according to separate data released by the Labor Department last week. Wages are rising fastest in sectors where labor is particularly scarce, such as leisure and hospitality.Economists will get a more up-to-date snapshot of the labor market on Friday, when the Labor Department releases data on job growth and unemployment in January. Forecasters surveyed by FactSet expect the report to show that employers added 165,000 jobs. But Omicron has created an unusual amount of uncertainty, and some economists believe the report could show a net loss of jobs last month. More

  • 88 Shares169 Views

    in Economy

    G.D.P. Report Shows Inflation Bite in Economy

    by

    Here’s a notable fact about the U.S. economic recovery: Inflation-adjusted output last quarter was just 1 percent below where it would have been if the pandemic had never happened.Here’s another one: Ignoring inflation, output is 1.7 percent above where it would have been absent the coronavirus.Those two facts help explain the confusing, contradictory nature of the late-pandemic economy. On the one hand, the recovery has been remarkably swift by both historical standards and compared with what forecasters expected when the crisis began. On the other hand, a surprising surge in inflation is preventing the economy from rebounding more quickly, or feeling more normal. And to some extent, the same forces — the remarkable levels of aid provided by the government, and the unusual nature of the pandemic recession itself — are responsible for both trends.The chart below helps tell the story. Inflation-adjusted gross domestic product (the dark blue line) has rebounded sharply since the early months of the crisis, but has yet to return to its prepandemic trend. That might not seem too surprising; businesses have mostly reopened, but the pandemic is still restraining daily activities, at least for many people.But the second line on the chart, in light blue, shows that the story is a bit more complicated than that. In non-inflation-adjusted terms, gross domestic product — in simple terms, everything we make and spend in a given three-month period — has surged significantly beyond its pre-Covid trend. In dollar terms, we are producing and spending as much as ever. But because of inflation, those dollars are worth less than before. More

  • 150 Shares99 Views

    in Economy

    Why Critics Fear the Fed's Policy Shift May Prove Late and Abrupt

    by

    The Federal Reserve is still buying bonds as prices surge. Some praise the central bank’s continuing policy pivot; others ask if it was fast enough.The Federal Reserve has moved at warp speed by central banking standards over the past six months as it prepares to lean against a surge in prices: first slowing its economy-stoking bond purchases, then deciding to end that buying program earlier and finally signaling that interest rate increases are coming.Some on Wall Street and in Washington are questioning whether it moved rapidly enough.Consumer prices increased by 7 percent in December from the prior year, the fastest pace since 1982, as rapid spending on goods collides with limited supply as a result of shuttered factories and backlogged ports. While price increases were initially expected to fade quickly, they have instead lasted and broadened to rents and restaurant meals.The Fed is charged with maintaining full employment and stable prices. The burst in inflation is causing some to question whether the central bank was too slow to recognize how persistent price increases were becoming, and whether it will be forced to respond so rapidly that it pushes markets into a free fall and the economy into a sharp slowdown or even recession.“The first policy mistake was completely misunderstanding inflation,” said Mohamed El-Erian, the chief economic adviser at the financial services company Allianz. He thinks the Fed now runs the risk of having to pull support away so rapidly that it disrupts markets and the economy. The Fed’s Board of Governors “maintained its transitory inflation narrative for 2021 way too long, missing window after window to slowly ease its foot off the stimulus accelerator.”Plenty of economists disagree with Mr. El-Erian, pointing out that the Fed reacted swiftly as it realized that conditions did not match its expectations. And market forecasts for inflation have remained under control, suggesting that investors believe that the Fed will manage to stabilize prices over the long run. Even so, stocks are shuddering and consumers are watching nervously as the central bank prepares for what could an unusually rapid withdraw of monetary support — ramping up pressure on its policymakers.“The downturn was faster, the upturn was faster: It was an unprecedented event, so not forecasting it properly was not the end of the world,” said Gennadiy Goldberg, a senior U.S. rates strategist at TD Securities. “What matters is what their readjustment is once the forecast has changed.”Jerome H. Powell, the Fed chair, and his colleagues meet this week in Washington and will release their latest policy decision at 2 p.m. on Wednesday.Understand Inflation in the U.S.Inflation 101: What is inflation, why is it up and whom does it hurt? Our guide explains it all.Your Questions, Answered: We asked readers to send questions about inflation. Top experts and economists weighed in.What’s to Blame: Did the stimulus cause prices to rise? Or did pandemic lockdowns and shortages lead to inflation? A debate is heating up in Washington.Supply Chain’s Role: A key factor in rising inflation is the continuing turmoil in the global supply chain. Here’s how the crisis unfolded.The Fed is on track to end its asset buying program in March, at which point markets expect policymakers to begin raising interest rates. Investors expect officials to raise interest rates as many as four times this year, while allowing their balance sheet of asset holdings to shrink. Both policy changes would work together to remove juice from the rapidly recovering economy.The path the Fed is now following differs starkly from the one it was projecting as recently as September, when many Fed officials had not come around to the idea that rates would rise in 2022. Likewise, the Fed began tapering off its bond buying program only in late 2021, so it is now in the uncomfortable position of making its final purchases — giving markets and the economy an added lift — even as inflation comes in hot.The central bank’s critics argue that it should have started to withdraw its help earlier and faster. That would have begun to cool off demand and inflation sooner, and it would allow for a more gradual drawdown of support now.“I don’t think the Fed caused this inflation problem, but I do think they were late to recognize it,” said Aneta Markowska, chief financial economist at Jefferies, an investment bank. “And, therefore, they will have to catch up very quickly.”Sudden Fed moves carry an economic risk: Failing to give markets time to digest and adjust often sends them into tumult. Rocky markets can make it hard for households and businesses to borrow money, causing the economy to slow sharply, and perhaps more than the central bank intended.That is why the Fed typically tries to engineer what policymakers often refer to as a “soft landing.” The goal is to avoid upending markets, and to allow the economy to decelerate without slowing it down so abruptly that it tips into recession.But the economy has surprised the central bank lately.In 2021, Fed policymakers bet that rapid inflation would fade as the economy got through an unusual reopening period and the pandemic abated. They wanted to be patient in removing support as the labor market healed, and they did not meaningfully change their plans for policy after Democrats took the White House and Senate and it became clear that they would pass a large stimulus package.The path the Fed is now following differs starkly from the one it was projecting as recently as September.Stefani Reynolds for The New York TimesAs those dollars trickled out into the economy and the pandemic persisted, though, demand remained strong, supply chains remained roiled, and inflation began to broaden out from pandemic-disrupted products like cars and airfares into rents, which move slowly and matter a lot to overall price increases. Workers returned to the job market more slowly than many economists expected, and wages began to pick up sharply as labor shortages surfaced.That caused the Fed to change course late last year — and to do so fairly abruptly.“Inflation really popped up in the late spring last year, and we had a view — it was very, very widely held in the forecasting community — that this would be temporary,” Mr. Powell said in December. But officials grew more concerned as employment cost data moved higher and inflation indicators showed hot readings, he said, so they pivoted on policy.Inflation F.A.Q.Card 1 of 6What is inflation? More

  • 138 Shares169 Views

    in Economy

    Rapid Inflation Fuels Debate Over What’s to Blame: Pandemic or Policy

    by

    The White House is emphasizing that inflation is worldwide. Economists say that’s true — but stimulus-spurred consumer buying is also to blame.The price increases bedeviling consumers, businesses and policymakers worldwide have prompted a heated debate in Washington about how much of today’s rapid inflation is a result of policy choices in the United States and how much stems from global factors tied to the pandemic, like snarled supply chains.At a moment when stubbornly rapid price gains are weighing on consumer confidence and creating a political liability for President Biden, White House officials have repeatedly blamed international forces for high inflation, including factory shutdowns in Asia and overtaxed shipping routes that are causing shortages and pushing up prices everywhere. The officials increasingly cite high inflation in places including the euro area, where prices are climbing at the fastest pace on record, as a sign that the world is experiencing a shared moment of price pain, deflecting the blame away from U.S. policy.But a chorus of economists point to government policies as a big part of the reason U.S. inflation is at a 40-year high. While they agree that prices are rising as a result of shutdowns and supply chain woes, they say that America’s decision to flood the economy with stimulus money helped to send consumer spending into overdrive, exacerbating those global trends.The world’s trade machine is producing, shipping and delivering more goods to American consumers than it ever has, as people flush with cash buy couches, cars and home office equipment, but supply chains just haven’t been able to keep up with that supercharged demand.Kristin J. Forbes, an economist at the Massachusetts Institute for Technology, said that “more than half of the increase, at least, is due to global factors.” But “there is also a domestic demand component that is important,” she said.The White House has tried to address inflation by boosting supply — announcing measures to unclog ports and trying to ramp up domestic manufacturing, all of which take time. But rising inflation has already imperiled Mr. Biden’s ability to pass a sprawling social policy and climate bill over fears that more spending could add to inflation. Senator Joe Manchin III, the West Virginia Democrat whose vote is critical to getting the legislation passed, has cited rising prices as one reason he won’t support the bill.The demand side of today’s price increases may prove easier for policymakers to address. The Federal Reserve is preparing to raise interest rates to make borrowing more expensive, slowing spending down, in a recipe that could help to tame inflation. Fading government help for households may also naturally bring down demand and soften price pressures.Inflation has accelerated sharply in the United States, with the Consumer Price Index climbing by 7 percent in the year through December, its fastest pace since 1982. But in recent months, it has also moved up sharply across many countries, a fact administration officials have emphasized.“The inflation has everything to do with the supply chain,” President Biden said during a news conference on Wednesday. “While there are differences country by country, this is a global phenomenon and driven by these global issues,” Jen Psaki, the White House press secretary, said after the latest inflation data were released.It is the case that supply disruptions are leading to higher inflation in many places, including in large developing economies like India and Brazil and in developed ones like the euro area. Data released in the United Kingdom and in Canada on Wednesday showed prices accelerating at their fastest rate in 30 years in both countries. Inflation in the eurozone, which is measured differently from how the U.S. calculates it, climbed to an annual rate of 5 percent in December, according to an initial estimate by the European Union statistics office.“The U.S. is hardly an island amidst this storm of supply disruptions and rising demand, especially for goods and commodities,” said Eswar Prasad, a professor of trade policy at Cornell University and a senior fellow at the Brookings Institution.But some economists point out that even as inflation proves pervasive around the globe, it has been more pronounced in America than elsewhere.“The United States has had much more inflation than almost any other advanced economy in the world,” said Jason Furman, an economist at Harvard University and former Obama administration economic adviser, who used comparable methodologies to look across areas and concluded that U.S. price increases have been consistently faster.The difference, he said, comes because “the United States’ stimulus is in a category of its own.”White House officials have argued that differences in “core” inflation — which excludes food and fuel — have been small between the United States and other major economies over the past six months. And the gaps all but disappear if you strip out car prices, which are up sharply and have a bigger impact in the United States, where consumers buy more automobiles. (Mr. Furman argued that people who didn’t buy cars would have spent their money on something else and that simply eliminating them from the U.S. consumption basket is not fair.)Administration officials have also noted that the United States has seen a robust rebound in economic growth. The International Monetary Fund said in October that it expected U.S. output to climb by 6 percent in 2021 and 5.2 percent in 2022, compared with 5 percent growth last year in the euro area and 4.3 percent growth projected for this year.“To the extent that we got more heat, we got a lot more growth for it,” said Jared Bernstein, a member of the White House Council of Economic Advisers.While many nations spent heavily to protect their economies from coronavirus fallout — in some places enough to push up demand, and potentially inflation — the United States approved about $5 trillion in spending in 2020 and 2021. That outstripped the response in other major economies as a share of the nation’s output, according to data compiled by the International Monetary Fund.Many economists supported protecting workers and businesses early in the pandemic, but some took issue with the size of the $1.9 trillion package last March under the Biden administration. They argued that sending households another round of stimulus, including $1,400 checks, further fueled demand when the economy was already healing.Consumer spending seemed to react: Retail sales, for instance, jumped after the checks went out.Americans found themselves with a lot of money in the bank, and as they spent that money on goods, demand collided with a global supply chain that was too fragile to catch up.Jutharat Pinyodoonyachet for The New York TimesAdam Posen, president of the Peterson Institute for International Economics, said the U.S. government spent too much in too short a time in the first half of 2021.“If there had not been the bottlenecks and labor market shortages, it might not have mattered as much. But it did,” he said.Inflation F.A.Q.Card 1 of 6What is inflation? More

  • 163 Shares179 Views

    in Economy

    Intel to Invest at Least $20 Billion in New Chip Factories in Ohio

    by

    Building up U.S. chip production has been a focus of lawmakers and companies alike amid a global shortage of the crucial components.Intel has selected Ohio for a new chip manufacturing complex that would cost at least $20 billion, ramping up an effort to increase U.S. production of computer chips as users grapple with a lingering shortage of the vital components.Intel said Friday that the new site near Columbus would initially have two chip factories and would directly employ 3,000 people, while creating additional jobs in construction and at nearby businesses. Patrick Gelsinger, who became Intel’s chief executive last year, has rapidly increased the company’s investments in manufacturing to help reduce U.S. reliance on foreign chip makers while lobbying Congress to pass incentives aimed at increasing domestic chip production. He has said that Intel might invest as much as $100 billion over a decade in its next U.S. manufacturing campus, linking the scope and speed of that expansion to expected federal grants if Congress approves a spending package known as the CHIPS Act.“We will go bigger and broader if it gets funded,” Mr. Gelsinger, 60, said in a recent interview. “But our recovery plans don’t rely on the CHIPS act.”President Biden will meet with Mr. Gelsinger at the White House on Friday to discuss the project, Intel said. Administration officials have aggressively pushed the CHIPS Act.Intel’s move has geopolitical implications, as well as significance for supply chains. Chips, which act as the brains of computers and many other devices, are largely manufactured in Taiwan, which China has expressed territorial claims toward. During the pandemic, they have also been in short supply because of overwhelming demand and Covid-related disruptions to manufacturing and labor supply, raising questions about how to ensure a consistent chip pipeline. The move is Intel’s first to a new state for manufacturing in more than 40 years. The company, based in Silicon Valley, has U.S. factories in Oregon, New Mexico and Arizona. Last March, Mr. Gelsinger chose an existing complex near Phoenix for a $20 billion expansion, which is now underway.But Mr. Gelsinger had also asserted that a new location was needed to provide additional talent, water, electrical power and other resources for the complex process of making chips. Intel has combed the country for sites, prompting states to compete for one of the biggest economic development prizes in recent memory.The site chosen for the new plant, in New Albany, a suburb east of Columbus, is in an area known for inexpensive land and housing. Nearby Ohio State University is a major source of graduates with engineering degrees whom Intel could recruit. Columbus is also centrally located for receiving supplies and for shipping finished chips.Construction of the first two factories is expected to begin later this year with production to start by 2025, Intel said. The site is more than 1,000 acres — enough space to hold up to eight total factories and related operations, Intel said.“Intel’s new facilities will be transformative for our state, creating thousands of good-paying jobs in Ohio manufacturing strategically vital semiconductors,” Mike DeWine, the governor of Ohio, said in a statement.Mr. Gelsinger, a 30-year Intel veteran who became chief of the software maker VMware in 2012, returned to the chip maker last year to become chief executive as the semiconductor shortage began hobbling carmakers and other companies. While the shortage was partly rooted in the pandemic, another long-term factor was the shifting of chip manufacturing to Asian countries that offer subsidies to companies that build factories there. The United States accounts for about 12 percent of global chip production, down from 37 percent in 1990. Europe’s share has declined to 9 percent from 40 percent over that period.Many of the most advanced chips come from Taiwan Semiconductor Manufacturing Company, whose proximity to China has worried Pentagon officials.Legislation passed by the Senate with bipartisan support last June would provide $52 billion in subsidies for the chip industry, including grants to companies that build new U.S. factories. The package has since gotten caught up in House bickering over the Biden administration’s priorities, though Mr. Gelsinger and others have said they are hopeful it will pass in the coming months.In Europe, Mr. Gelsinger has also lobbied officials for a similar package of subsidies that could aid the construction of a big new Intel factory there, with a projected price tag comparable to the U.S. expansion.Ohio has not previously had a chip manufacturing presence. Moving to a state without existing chip factories presents challenges, such as obtaining permits and persuading suppliers of gases, chemicals and production machines to set up nearby offices, said Dan Hutcheson, an analyst at VLSI Research. On the other hand, having plants in more states provides lobbying leverage in Washington, he said.Intel is not the only company expanding U.S. production. T.S.M.C. began construction last year on a $12 billion complex about 50 miles from Intel’s site near Phoenix. Samsung Electronics selected Taylor, Texas, for a $17 billion factory, with construction set to begin in 2022.Mr. Gelsinger’s strategy is based partly on a bet that Intel can rival T.S.M.C. and Samsung in manufacturing chips to order for other companies. For most of its existence, Intel has built only the microprocessors and other chips it designs and sells itself.The strategy is risky, as Intel has fallen behind its Asian rivals in packing more circuitry onto each slice of silicon, which increases the capabilities of devices like smartphones and computers. Mr. Gelsinger has said that Intel is on track to catch up over several years, but it won’t be easy, as those companies continue to make new developments of their own.Intel “is catching up, but they have not caught up,” Mr. Hutcheson said. More

  • 113 Shares119 Views

    in Economy

    As Broadway Struggles, Governor Hochul Proposes Expanded Tax Credit

    by

    With Omicron complicating Broadway’s return, Gov. Kathy Hochul proposed more assistance for commercial theater, which her budget director called “critical for the economy.”As Broadway continues to reel from the economic effects of the coronavirus pandemic, Gov. Kathy Hochul is proposing to expand and extend a pandemic tax credit intended to help the commercial theater industry rebound.Ms. Hochul on Tuesday proposed budgeting $200 million for the New York City Musical and Theatrical Production Tax Credit, which provides up to $3 million per show to help defray production costs.“They were starting to recover before Omicron, and then, as you have all seen, a lot of these performance venues had to shut down again, and those venues are critical for the economy,” the state budget director, Robert Mujica, told reporters.The tax credit program, which began last year under Gov. Andrew Cuomo, was initially capped at $100 million. Early indications are that interest is high: Nearly three dozen productions have told the state they expect to apply, said Matthew Gorton, a spokesman for Empire State Development, the state’s economic development agency.The Hochul administration decided to seek to expand the tax credit program — and to extend the initial application deadline, from Dec. 31, 2022 to June 30, 2023 — as it became clear that Broadway’s recovery from its lengthy pandemic shutdown would be bumpier than expected.Shows began resuming performances last summer, and many were drawing good audiences — Ms. Hochul visited “Chicago” and “Six” in October, while Mr. Gorton saw “The Lehman Trilogy” and “To Kill a Mockingbird.”But the industry is now struggling after a spike in coronavirus cases prompted multiple cancellations over the ordinarily lucrative holiday season, and then attendance plunged. Last week, 66 percent of Broadway seats were occupied, according to the Broadway League; that’s up from 62 percent the previous week, but down from 95 percent during the comparable week before the pandemic.“Clearly, we’re not out of the woods yet,” said Jeff Daniel, who is the chairman of the Broadway League’s Government Relations Committee, as well as co-chief executive of Broadway Across America, which presents touring shows in regional markets. Mr. Daniel, still recovering from his own recent bout of Covid, welcomed the governor’s proposal, and said the League would work to urge the Legislature to approve it.“Every show we can open drives jobs and economic impact,” said Mr. Daniel, who noted the close economic relationship between Broadway and other businesses, including hotels and restaurants. “If we can maximize Broadway, we maximize tourism.”Under the program, shows can receive tax credits to cover up to 25 percent of many production expenditures, including labor. As a condition of the credit, shows must have a state-approved diversity and arts job training program, and take steps to make their productions accessible to low-income New Yorkers. More