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Fed Leaves Interest Rates Near Zero as Economic Recovery Slows
The chair, Jerome H. Powell, said the economic outlook remained “highly uncertain” and would depend on the path of the virus. More
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Continuing Job Losses Put Spotlight on Economic Relief
#masthead-section-label, #masthead-bar-one { display: none }The Jobs CrisisCurrent Unemployment RateWhen the Checks Run OutThe Economy in 9 ChartsThe First 6 MonthsAdvertisementContinue reading the main storySupported byContinue reading the main storyContinuing Job Losses Put Spotlight on Economic ReliefRelentless unemployment claims show the pandemic’s grip on the labor market. Help from the recent stimulus bill may lapse before an upturn arrives.Waiting for donations this week at a food distribution center in Inglewood, Calif. Hopes for an economic lift from coronavirus vaccinations have been set back by a slow rollout.Credit…Jenna Schoenefeld for The New York TimesJan. 21, 2021Updated 6:49 p.m. ETEven as it tries to right a shipwrecked economy, the Biden administration confronted fresh evidence of weakness Thursday with the report of nearly a million new state unemployment claims, heightening calls for fresh stimulus efforts.The scale of the job losses underscores the fragility of the job market as overall economic momentum slows amid the worsening pandemic. What’s more, key provisions of the $900 billion aid package passed by Congress last month will lapse in mid-March, well before economists expect mass vaccinations to help the economy rebound.“Unfortunately, the labor market started 2021 with very little momentum,” said Greg Daco, chief U.S. economist at Oxford Economics. “There hasn’t been any improvement, and if anything, there has been deterioration.”It is a perilous start for the administration, which is eager to make good on President Biden’s pledge to “build back better” but must first halt the damage as employers continue to let workers go.The Labor Department said Thursday that 961,000 workers filed initial claims for state unemployment benefits last week. On a seasonally adjusted basis, the total was 900,000.The figures were down from the previous week but remain extraordinarily high by historical standards and have recently reached levels not seen since midsummer. In the comparable week a year ago, before the pandemic, there were 282,000 initial claims.“It’s staggering, and it was worse than I thought,” said Diane Swonk, chief economist at the accounting firm Grant Thornton in Chicago. “This makes stimulus more urgent.”Mr. Biden found a similar predicament when he became vice president in 2009 with a contracting economy and Republican opposition to a big stimulus package. Although there are bright spots that didn’t exist then, like a rally on Wall Street and a strong housing market, White House officials want to avoid the lasting economic damage and slow growth that resulted from that recession.On Thursday, the administration pointed to the latest data to make its case for new spending.“This morning’s report on new unemployment claims is another stark reminder that we must act now,” said Brian Deese, director of the National Economic Council. The situation, he said, “will only worsen if bold action isn’t taken.”Mr. Biden has proposed a $1.9 trillion stimulus package that would include $1,400 in direct payments to individuals, expanded unemployment benefits and money for hard-pressed states and cities.In written testimony released Thursday as part of her Senate confirmation process, Janet L. Yellen, Mr. Biden’s nominee for Treasury secretary, reiterated the urgency of renewed aid.“Unemployment remains troublingly high, and millions of families are facing hunger or the risk of eviction,” Ms. Yellen, a former Federal Reserve chair, told a questioner. “Additional relief is needed to strengthen the economy, address our public health challenge and provide relief to communities that have been hardest hit.”Republicans have already registered resistance to another big spending plan.“We’re looking at another spending blowout,” Senator Patrick J. Toomey of Pennsylvania said at Ms. Yellen’s confirmation hearing on Tuesday. “The only organizing principle I can understand, it seems, is to spend as much money as possible, seemingly for the sake of spending it.”Democrats hope to push a coronavirus relief package through Congress in the coming weeks, with House Democrats postponing votes until the beginning of February as committees work to translate Mr. Biden’s coronavirus plan into legislation.“We’ll be doing our committee work all next week so that we are completely ready to go to the floor when we come back,” the House speaker, Representative Nancy Pelosi of California, said at her weekly news conference on Thursday.But with Ms. Pelosi yet to send the House’s article of impeachment against former President Donald J. Trump to the Senate, and with Senate leaders at odds over the terms of how to organize an evenly split chamber, it is unclear how quickly legislation can be processed. Democrats are also leaving open the possibility of using a process called budget reconciliation, requiring only a simple majority for approval, to push legislation through the Senate.A bipartisan group of 16 senators — including some who helped jump-start negotiations over the most recent coronavirus relief package — is expected to speak with Mr. Deese in the coming days about additional relief.The job losses have worsened in recent weeks, as new restrictions and lockdowns force service-sector employers like restaurants and leisure and hospitality establishments to close. If the trend continues, it could threaten other industries.“The level of layoffs is very high, and the virus is causing serious disruption,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.“More aid is needed for households and businesses,” she added. “Many businesses will shut down, and a lot of jobs will be lost without it. That poses a downside risk for the economy in the near term.”A movie theater in Culver City, Calif., with no coming attractions. Leisure industries have been particularly hard hit by the resurgent pandemic.Credit…Jenna Schoenefeld for The New York TimesIn another sign of weakness, the Labor Department reported this month that employers cut payrolls by 140,000 in December, the first decline since the mass layoffs of last spring.The beginning of vaccinations provided optimism about a quick turnaround. The slow rollout in many parts of the country has set back those hopes, though the stimulus package last month helped allay fears of a double-dip recession.Among the emergency federal programs extended by the recent legislation was Pandemic Unemployment Assistance, which helps freelancers, part-time workers and others normally ineligible for state jobless benefits. A total of 424,000 new claims were filed under the program last week, up from 285,000 the previous week.Mr. Daco of Oxford Economics said uncertainty about the program’s continuation might have held back claims late last year, so the jump last week could be due to belated filings as well as the overall weakness of the labor market.But Pandemic Unemployment Assistance and a $300 weekly supplement to state and federal unemployment benefits will both expire in mid-March without new legislative action.Ms. Farooqi said meaningful improvement in the economy was unlikely by then.“It’s going to be pretty rough over the next few months,” she said. “My expectation was and still is, at this level of infections, you will see layoffs mounting.”Over all, the best economic remedy is more vaccinations, said Carl Tannenbaum, chief economist at Northern Trust in Chicago.“There is no better economic stimulus than a successful vaccine rollout,” he said. “It will reduce the risk of human interaction and provide a basis on which different types of businesses can open more durably.”Some experts say it will take many months for most of the population to be inoculated. In the meantime, federal aid efforts are pegged to specific durations, rather than any meaningful improvement in economic conditions.That has created a series of cliffhangers in which help has hung in the balance as millions of unemployed Americans watched the news from Washington with anxiety. Although Democratic control of both chambers of Congress gives Mr. Biden an edge, the kind of ambitious stimulus faces challenging legislative dynamics.There are some signs of hope, despite the dismal jobs picture. The stock market has hit record highs in recent days, and the housing market continues to thrive, buoyed by rock-bottom interest rates.Some economists think the economy could boom when vaccinations are commonplace and pent-up demand sends consumers back to restaurants, onto airplanes and cruise ships, and into deserted downtowns. But there will be more pain before relief arrives.Emily Cochrane contributed reporting.AdvertisementContinue reading the main story More
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How Full Employment Became Washington’s Creed
#masthead-section-label, #masthead-bar-one { display: none }The Jobs CrisisCurrent Unemployment RateThe First Six MonthsPermanent LayoffsWhen a $600 Lifeline EndedAdvertisementContinue reading the main storySupported byContinue reading the main storyHow Full Employment Became Washington’s CreedPolicymakers are eager to return to the period of low unemployment that preceded the pandemic and are less concerned than in previous eras about sparking inflation and taking on debt.People wait in line to receive donations at a food pantry in New York City earlier this month. Policymakers agree that a return to a hot job market should be a central goal.Credit…Mohamed Sadek for The New York TimesJan. 18, 2021, 3:29 p.m. ETAs President-elect Joseph R. Biden, Jr. prepares to take office this week, his administration and the Federal Reserve are pointed toward a singular economic goal: Get the job market back to where it was before the pandemic hit.The humming labor backdrop that existed 11 months ago — with 3.5 percent unemployment, stable or rising work force participation and steadily climbing wages — turned out to be a recipe for lifting all boats, creating economic opportunities for long-disenfranchised groups and lowering poverty rates. And price gains remained manageable and even a touch on the low side. That contrasts with efforts to push the labor market’s limits in the 1960s, which are widely blamed for laying the groundwork for runaway inflation.Then the pandemic cut the test run short, and efforts to contain the virus prompted joblessness to skyrocket to levels not seen since the Great Depression. The recovery has since been interrupted by additional waves of contagion, keeping millions of workers sidelined and causing job losses to recommence.Policymakers across government agree that a return to that hot job market should be a central goal, a notable shift from the last economic expansion and one that could help shape the economic rebound.Mr. Biden has made clear that his administration will focus on workers and has chosen top officials with a job market focus. He has tapped Janet L. Yellen, a labor economist and the former Fed chair, as his Treasury secretary and Marty Walsh, a former union leader, as his Labor secretary.In the past, lawmakers and Fed officials tended to preach allegiance to full employment — the lowest jobless rate an economy can sustain without stoking high inflation or other instabilities — while pulling back fiscal and monetary support before hitting that target as they worried that a more patient approach would cause price spikes and other problems.That timidity appears less likely to rear its head this time around.Mr. Biden is set to take office as Democrats control the House and Senate and at a time when many politicians have become less worried about the government taking on debt thanks to historically low borrowing costs. And the Fed, which has a track record of lifting interest rates as unemployment falls and as Congress spends more than it collects in taxes, has committed to greater patience this time around.“Economic research confirms that with conditions like the crisis today, especially with such low interest rates, taking immediate action — even with deficit finance — is going to help the economy, long-term and short-term,” Mr. Biden said at a news conference on Jan. 8, highlighting that quick action would “reduce scarring in the work force.”Jerome H. Powell, the Fed chair, said on Thursday that his institution is tightly focused on restoring rock-bottom unemployment rates.“That’s really the thing that we’re most focused on — is getting back to a strong labor market quickly enough that people’s lives can get back to where they want to be,” Mr. Powell said. “We were in a good place in February of 2020, and we think we can get back there, I would say, much sooner than we had feared.”The stage is set for a macroeconomic experiment, one that will test whether big government spending packages and growth-friendly central bank policies can work together to foster a fast rebound that includes a broad swath of Americans without incurring harmful side effects.“The thing about the Fed is that it really is the tide that lifts all boats,” said Nela Richardson, chief economist at the payroll processor ADP, explaining that the labor-focused central bank can set the groundwork for robust growth. “What fiscal policy can do is target specific communities in ways that the Fed can’t.”The government has spent readily to shore up the economy in the face of the pandemic, and analysts expect that more help is on the way. The Biden administration has suggested an ambitious $1.9 trillion spending package.President-elect Joseph R. Biden Jr. has appointed top officials with a job market focus.Credit…Amr Alfiky/The New York TimesWhile that probably won’t pass in its entirety, at least some more fiscal spending seems likely. Economists at Goldman Sachs expect Congress to actually pass another $1.1 trillion in relief during the first quarter of 2021, adding to the $2 trillion pandemic relief package passed in March and the $900 billion in additional aid passed in December.That would help to stoke a faster recovery this year. Goldman economists estimate that the spending could help to push the unemployment rate to 4.5 percent by the end of 2021. Joblessness stood at 6.7 percent in December, the Bureau of Labor Statistics said earlier this month.Such a government-aided rebound would come in stark contrast to what happened during the 2007 to 2009 recession. Back then, Congress’s biggest package to counter the fallout of the downturn was the $800 billion American Recovery and Reinvestment Act, passed in 2009. It was exhausted long before the unemployment rate finally dipped below 5 percent, in early 2016.At the time, concern over the deficit helped to stem more aggressive fiscal policy responses. And concerns about economic overheating pushed the Fed to begin lifting interest rates — albeit very slowly — in late 2015. As the unemployment rate dropped, central bankers worried that wage and price inflation might wait around the corner and were eager to return policy to a more “normal” setting.But economic thinking has undergone a sea change since then. Fiscal authorities have become more confident running up the public debt at a time of very low interest rates, when it isn’t so costly to do so.Fed officials are now much more modest about judging whether or not the economy is at “full employment.” In the wake of the 2008 crisis, they thought that joblessness was testing its healthy limits, but unemployment went on to drop sharply without fueling runaway price increases.In August 2020, Mr. Powell said that he and his colleagues will now focus on “shortfalls” from full employment, rather than “deviations.” Unless inflation is actually picking up or financial risks loom large, they will view falling unemployment as a welcome development and not a risk to be averted.That means interest rates are likely to remain near zero for years. Top Fed officials have also signaled that they expect to continue buying vast sums of government-backed bonds, about $120 billion per month, for at least months to come.Fed support could help government spending kick demand into high gear. Households are expected to amass big savings stockpiles as they receive stimulus checks early in 2021, then draw them down as vaccines become widespread and normal economic life resumes. Low rates might make big investments — like houses — more attractive.Still, some analysts warn that today’s policies could result in future problems, like runaway inflation, financial market risk-taking or a damaging debt overhang.In the mid-to-late 1960s, Fed officials were tightly focused on chasing full employment. As they tested how far they could push the job market, they did not try to head inflation off as it crept up and saw higher prices as a trade off for lower joblessness. When America took its final steps away from the gold standard and an oil price shock hit in the early 1970s, price gains took off — and it took massive monetary belt-tightening by the Fed and years of serious economic pain to tame them.Many politicians have become less worried about government borrowing thanks to historically low interest rates.Credit…Erin Schaff/The New York TimesThere are reasons to believe that this time is different. Inflation has been low for decades and remains contained across the world. The link between unemployment and wages, and wages and prices, has been more tenuous than in decades past. From Japan to Europe, the problem of the era is weak price gains that trap economies in cycles of stagnation by eroding room to cut interest rates during time of trouble, not excessively fast inflation.And economists increasingly say that, while there may be costs from long periods of growth-friendly fiscal and monetary policy, there are also costs from being too cautious. Tapping the brakes on a labor market expansion earlier than is needed can leave workers who would have gotten a boost from a strong job market on the sidelines.The period before the pandemic showed just what an excessively cautious policy setting risks missing. By 2020, Black and Hispanic unemployment had dropped to record lows. Participation for prime-age workers, which was expected to remain permanently depressed, had actually picked up somewhat. Wages were climbing fastest for the lowest earners.It’s not clear whether 3.5 percent unemployment will be the exact level America will achieve again. What is clear is that many policymakers want to test what the economy is capable of, rather than guessing at a magic figure in advance.“There’s a danger in computing a number and saying, that means we are there,” Mary C. Daly, the president of the Federal Reserve Bank of San Francisco, said at an event earlier this month. “We’re going to learn about these things experientially, and that to me is the right risk management posture.”AdvertisementContinue reading the main story More
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Biden Outlines $1.9 Trillion Spending Package to Combat Virus and Downturn
#masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesA Future With CoronavirusVaccine InformationF.A.Q.TimelineAdvertisementContinue reading the main storySupported byContinue reading the main storyBiden Outlines $1.9 Trillion Spending Package to Combat Virus and DownturnThe president-elect detailed plans for an initial effort to fight the coronavirus and a subsequent one to address economic recovery.President-elect Joseph R. Biden Jr. on Thursday unveiled a $1.9 trillion spending package aimed at combating the health and economic crises of the coronavirus pandemic.Credit…Amr Alfiky/The New York TimesJim Tankersley and Published More
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A Look at What’s in Biden’s $1.9 Trillion Stimulus Plan
#masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesA Future With CoronavirusVaccine InformationF.A.Q.TimelineAdvertisementContinue reading the main storySupported byContinue reading the main storyA Look at What’s in Biden’s $1.9 Trillion Stimulus PlanThe president-elect is rolling out a large spending package aimed at helping battle the virus and alleviate the economic toll it has taken.President-elect Joseph R. Biden Jr. planned to lay out plans on Thursday for efforts to combat the coronavirus and address its economic toll.Credit…Kriston Jae Bethel for The New York TimesJan. 14, 2021Updated 7:24 p.m. ETThe incoming Biden administration unveiled a $1.9 trillion stimulus plan on Thursday that offered a wish list of spending measures meant to help both people and the economy recover from the coronavirus pandemic, from state and local aid and more generous unemployment benefits to mass vaccinations.Below, we run through a few of the biggest provisions, how they would work and what they might mean for the United States economy as it struggles through a winter of surging coronavirus cases and partial state and local lockdowns.Let’s put that headline number in context.That $1.9 trillion figure is a lot of money, to put it mildly. Congress passed a $900 billion relief program in December, and its package in March was also about $2 trillion. By way of comparison, the major financial crisis spending package — the American Recovery and Reinvestment Act of 2009 — clocked in around $800 billion.The administration is looking for $1,400 checks.President-elect Joseph R. Biden Jr. is trying to make good on Democrats’ promise to send more money to households in the form of one-time checks. Its proposal would send out $1,400 per person for those under certain income thresholds, topping off the $600 checks that came as part of the December relief package.It also wants an unemployment insurance supplement of $400 a week.Mr. Biden is asking Congress to extend emergency unemployment insurance programs through the end of September — they are set to expire in mid-March — while providing “a $400 per week unemployment insurance supplement to help hard-hit workers.”That amount is higher than what lawmakers included in the December stimulus, which provided a $300 supplement for 11 weeks, but it is lower than the $600 weekly benefit included in the first package in March.Schools could get money to reopen.The administration says it wants to make “the necessary investments to meet the president-elect’s goal of safely reopening a majority” of kindergarten-to-eighth-grade schools within Mr. Biden’s first 100 days in office.Administration officials are suggesting $170 billion for schools, supplemented by additional state and local funds. About $130 billion of that would go toward reopening, while much of the rest of the money would go to help colleges dealing with the shift to distance learning and other pandemic-tied problems.The minimum wage could rise.After holding steady at $7.25 for more than a decade, the federal minimum wage would rise to $15 per hour under the proposal, which would also end the tipped minimum wage and sub-minimum wage for people with disabilities. Many states and localities have already raised their own wage floors. It is not clear how quickly the higher wage would phase in.Research from the Congressional Budget Office in 2019 suggested that raising the wage to $15 nationally could increase pay for tens of millions of workers, though potentially at some cost to jobs — perhaps 1.3 million people who would otherwise work would not be, in part because employers would reduce payroll.The Coronavirus Outbreak More
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Unemployment Claims Rise Sharply, Showing New Economic Pain
#masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesA Future With CoronavirusVaccine InformationF.A.Q.TimelineAdvertisementContinue reading the main storySupported byContinue reading the main storyUnemployment Claims Rise Sharply, Showing New Economic PainWeekly filings for jobless benefits hit the highest level since July as the pandemic’s resurgence batters the service industry.A closed restaurant in Santa Barbara, Calif. The winter coronavirus wave has pummeled the leisure and hospitality industries.Credit…Bryan Denton for The New York TimesJan. 14, 2021Updated 7:08 p.m. ETTen months after the coronavirus crisis decimated the labor market, the resurgent pandemic keeps sending shock waves through the American economy.Though more than half of the 22 million jobs lost last spring have been regained, a new surge of infections has prompted shutdowns and layoffs that have hit the leisure and hospitality industries especially hard, dealing a setback to the recovery.The latest evidence came on Thursday when the Labor Department reported that initial claims for state unemployment benefits rose sharply last week, exceeding one million for the first time since July.Just days earlier, the government announced that employers had shed 140,000 jobs in December, the first net decline in employment since last spring, with restaurants, bars and hotels recording steep losses.“We’re in a deep economic hole, and we’re digging in the wrong direction,” said Daniel Zhao, senior economist with the career site Glassdoor. “The report obviously shows that the rise in claims is worse than expected, and there is reason to think that things are going to get worse before they are going to get better.”That prospect is all the more troubling because a major element of the relief package signed by President Trump last month — a $300 weekly federal supplement to other unemployment benefits — is set to run out in mid-March.President-elect Joseph R. Biden Jr. has said he will push a new stimulus package through Congress to provide a lifeline for workers and employers until the pandemic can be brought under control. His plan will include direct payments to most households along with aid to small businesses and local and state governments.The recent economic data has brought a new sense of urgency to such efforts, with millions struggling to make ends meet even as more job losses could be in the offing.The Labor Department said on Thursday that 1.15 million workers filed initial claims for state unemployment benefits during the first full week of the new year. A further 284,000 claims were filed for Pandemic Unemployment Assistance, an emergency federal program for freelancers, part-time workers and others normally ineligible for state jobless benefits. Neither figure is seasonally adjusted. On a seasonally adjusted basis, new state claims totaled 965,000.Before the pandemic, weekly filings typically totaled around 200,000.The holidays may have held down unemployment claims in previous weeks, with people waiting until the new year to submit claims. But several economists expressed skepticism that filing delays were a major driver of the uptick in claims last week.“I don’t think there’s any question that on the margin, there could be some unusual things going on,” said Mark Hamrick, senior economic analyst at Bankrate.com. “But we have to think also about the fact that these are not our grandfather’s unemployment lines — meaning much of this is done digitally. I think if one just tries to understand human nature, it doesn’t make a lot of sense that someone would be delaying a request for financial assistance when they’re out of work.”More likely, economists say, is that the $300 federal supplement prompted an increase in demand for benefits.Confusion over the new federal aid — which Mr. Trump spent several days threatening not to sign — may also have temporarily slowed down claims for Pandemic Unemployment Assistance, which fell during the week ending Jan. 2. The increase last week brought the numbers more in line with the previous elevated levels.Volunteers processing donations at a food pantry in Wichita, Kan. More than one million people filed new claims for unemployment benefits last week.Credit…Stephen Speranza for The New York TimesThose seeking new work have found diminishing prospects. Hiring slowed for five straight months before December’s outright reversal. In November, even before the recent surge in virus cases, the number of workers officially counted as unemployed outnumbered job openings by more than four million, according to the Labor Department.The Coronavirus Outbreak More
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It Could Be a Great Year, if Your Business Survives Winter
#masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesVaccination StrategiesVaccine InformationF.A.Q.TimelineAdvertisementContinue reading the main storySupported byContinue reading the main storyIt Could Be a Great Year, if Your Business Survives WinterTough sacrifices may still be required, but many see a post-pandemic resurgence in the year ahead.Maria Rodriguez mopped the front entry at the Hampton Inn & Suites Herndon-Reston in Herndon, Va., which has seen a significant decrease in guests since the pandemic began.Credit…Alyssa Schukar for The New York TimesNelson D. Schwartz and Jan. 11, 2021, 10:46 a.m. ETFor Ashlie Ordonez, owner of the Bare Bar Studio, a spa in Denver, vaccinations for the coronavirus can’t come soon enough. While she anticipates better days later this year, surviving until then will be a struggle, and she knows the next few months will be lean ones.“I sold my wedding ring so we could pay the bills and keep the doors open,” she said. “I’m sacrificing everything to make it through this pandemic.”Vinay Patel, who manages a chain of nine hotels in Maryland and Virginia, is looking even further out for a recovery: “2022 is when we’ll see the real true potential of the vaccine.” Mr. Patel added that his biggest hope for the coming year is a measure of stability, if not prosperity.As 2021 begins, business owners big and small confront a rapidly shifting landscape. An end to the pandemic is in sight as inoculations begin, but the slow pace of vaccinations has delayed the turnaround they were counting on. Hanging on is the chief goal for many, even as others look ahead to what they consider to be an inevitable rebound.This year “is not going to be a walk through the park, but I’m optimistic,” said Jimmy Etheredge, chief executive for North America at Accenture, the strategy and consulting company. “The eggs are in the vaccine basket.”Even as he anticipates a turnaround, Mr. Etheredge emphasized that many of the changes wrought by the pandemic, such as working remotely and a shift to cloud technology by companies, are here to stay.“Ten months of pandemic has accelerated technological change by 10 years,” he said. “We’re never going to go back to the way things were before.”In the meantime, it’s clear that there will be winners and losers this year. Restaurateurs, leisure and hospitality businesses and the travel industry will continue to struggle as a surge in Covid-19 cases prompts renewed lockdowns in many parts of the country. Few expect imminent salvation.The biggest companies, on the other hand, are positioning themselves for what could be a surge in consumption when the pandemic recedes. Technology, manufacturing, health care and some other industries are booming.Indeed, the contrast was evident last week as major stock indexes notched new highs even as the Labor Department reported that the economy lost 140,000 jobs in December. It was the first decline in months, with the leisure and hospitality sector alone losing half a million positions as lockdowns are enacted.“There is light at the end of the tunnel,” said Brian Moynihan, chief executive of Bank of America. “But there’s a side of the economy that’s still in trouble. There’s a group of Americans who want to go to work but can’t because work isn’t open.”Mr. Moynihan said he was pleased that the $900 billion pandemic relief package was passed and signed into law after many fits and starts, and he favors more stimulus if necessary. Roughly 19 million workers are collecting unemployment benefits, and the employment picture remains bleak for many lower-wage workers in the service economy.Ashlie Ordonez, owner of the Bare Bar Studio, a spa in Denver.Credit…Benjamin Rasmussen for The New York Times“I sold my wedding ring so we could pay the bills and keep the doors open,” she said.Credit…Benjamin Rasmussen for The New York TimesPresident-elect Joseph R. Biden Jr. signaled Friday that trillions of dollars’ worth of fresh stimulus could be on the way, and the imminent Democratic control of the Senate makes that much more likely.As trying as the next few months seem, the economy is in better shape than in the months after Covid-19 first struck, when unemployment soared to 14.8 percent. The jobless rate in December stood at 6.7 percent.Holiday spending by Bank of America customers was 2.5 percent higher than last year, and account holders actually have more in savings than they did before the pandemic. “There’s a bunch of sectors that are doing very well in terms of profits,” Mr. Moynihan added.Even so, these remain times of limbo for many executives and business owners, when the old rules no longer apply but the post-pandemic reality has yet to materialize.The Coronavirus Outbreak More
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Facing Intensifying Crises, Biden Pledges Action to Address Economy and Pandemic
#masthead-section-label, #masthead-bar-one { display: none }The Presidential TransitionliveLatest UpdatesCalls for Impeachment25th Amendment ExplainedTrump Officials ResignHow Mob Stormed CapitolAdvertisementContinue reading the main storySupported byContinue reading the main storyFacing Intensifying Crises, Biden Pledges Action to Address Economy and PandemicWith job losses, record coronavirus numbers and politics in turmoil after the storming of the Capitol, the president-elect pressed for quick passage of a stimulus package to help struggling Americans.President-elect Joseph R. Biden Jr. said it was up to Congress to decide whether to impeach President Trump, but he stressed that he expected lawmakers on both sides of the aisle to get to work quickly after he is sworn in on Jan. 20.Credit…Kriston Jae Bethel for The New York TimesMichael D. Shear and Jan. 8, 2021WASHINGTON — President-elect Joseph R. Biden Jr. on Friday promised an accelerated response to a daunting and intensifying array of challenges as the economy showed new signs of weakness, the coronavirus pandemic killed more Americans than ever, and Congress weighed impeaching President Trump a second time.As Washington remained consumed with the fallout from the storming of the Capitol on Wednesday and Democrats stepped up their efforts to hold Mr. Trump accountable for his role in inciting the attack, Mr. Biden signaled that he intended to keep his focus on jobs and the pandemic, declining to weigh in on whether the House should impeach Mr. Trump.On a day the Labor Department reported that the economy lost 140,000 jobs in December, ending a seven-month streak of growth after the country’s plunge into recession in the spring, Mr. Biden said there was “a dire, dire need to act now.”He pledged to move rapidly once he becomes president to push a stimulus package through Congress to provide relief to struggling individuals, small businesses, students, local governments and schools.Mr. Biden and his aides have not yet finished the proposal or settled on its full amount. Forecasters expect further job losses this month, a casualty of the renewed surge of the coronavirus pandemic and state and local officials’ impositions of lockdowns and other restrictions on economic activity meant to slow the spread.“The price tag will be high,” Mr. Biden told reporters in Wilmington, Del.“It is necessary to spend the money now,” he said, apparently referring to his entire batch of economic plans, including both immediate aid and a larger bill that includes infrastructure spending. “The answer is yes, it will be in the trillions of dollars.”The Biden team is also preparing a wave of economic actions that will not require congressional approval. Mr. Biden’s aides said on Friday that the president-elect would direct the Education Department to extend a pause on student loan payments that was initially issued under Mr. Trump. Mr. Biden called on Congress on Friday to take “prompt action” to raise the federal minimum wage to at least $15 an hour.He also pledged to ramp up efforts to slow the spread of the virus, which is now claiming 4,000 lives each day — more than those who perished during the Battle of Antietam during the Civil War, the attack on Pearl Harbor in 1941 or the terrorist attacks on Sept. 11, 2001. Mr. Biden’s team said the president-elect would immediately provide more vaccines to states when he takes office, breaking sharply from Mr. Trump’s practice of holding back some shots for second doses.“People are really, really, really in desperate shape,” Mr. Biden said.While he said the question of impeaching Mr. Trump was up to Congress, he assailed the president once again for his conduct in office even as he sought to position himself as focused on the issues of greatest immediate concern to voters: their health and economic security.“I thought for a long, long time President Trump was unfit to hold the job,” Mr. Biden said. “I’m focused on the virus, the vaccine and economic growth. What the Congress decides to do is for them to decide.”“But,” he added quickly, “they’re going to have to hit the ground running.”Along with the powers of the presidency that he will assume at noon on Jan. 20, Mr. Biden will take responsibility for guiding the country through a collision of crises more varied and intense than any that faced his recent predecessors. In addition to the pandemic and the faltering economy, they include racial tensions that demand reconciliation after simmering for decades and a deep political divide that flared into violence on Wednesday and rocked the country’s assumptions about its tradition of peaceful transfers of power.“It’s bigger than his presidency. It’s going to take a generation working on all this,” said Rahm Emanuel, who was former President Barack Obama’s chief of staff as he entered office during the economic crisis more than a decade ago.“He’ll take the first steps,” Mr. Emanuel said of Mr. Biden. “But you don’t deal with 20 years of change in a week or two. This is a generation’s worth of work.”Mr. Biden — who on Friday repeated his promise to work with Republicans to advance his agenda — now faces the real prospect that Mr. Trump could be standing trial for sedition in the Senate as he takes office.That work begins in earnest in 12 days, and aides to Mr. Biden said he expected lawmakers on both sides of the aisle to get to work quickly, even as the issue of Mr. Trump’s fate dominates the conversation in Washington.The Presidential TransitionLatest UpdatesUpdated Jan. 8, 2021, 10:32 p.m. ETMore national security officials resign from a White House in turmoil.A judge has blocked Trump’s sweeping restrictions on asylum applications.Josh Hawley faces blowback for role in spurious challenge of election results.Speaker Nancy Pelosi’s steps toward impeaching Mr. Trump a second time came after a surge of anger by members of both parties at what many called an insurrection by the president’s supporters. Mr. Biden on Friday called them “a bunch of thugs, insurrectionists, white supremacists, anti-Semites” who had “the active encouragement of a sitting president of the United States.”But Mr. Biden seemed aware of the political risk of becoming the primary spokesman for the punishment and removal of his predecessor, and the danger that a drawn-out impeachment and trial could delay or derail his hopes for quick passage of his biggest agenda items.He said he might have openly supported impeachment if the Capitol attacks had happened when Mr. Trump had six months left in his term. But he repeatedly suggested that the best way to be rid of the current president was to wait until Mr. Biden is inaugurated.“The question is, what happens with 14 days left to go, or 13 days left to go?” Mr. Biden said, adding later that “I am focused now on us taking control, as president and vice president, on the 20th, and to get our agenda moving as quickly as we can.”The president-elect said he thought the events at the Capitol on Wednesday might serve as a moment that drove people together, and he singled out Senators Mitch McConnell of Kentucky and Mitt Romney of Utah, both Republicans, as examples of political adversaries who shared his anger at what had happened.“Many of them are as outraged and disappointed and embarrassed and mortified by the president’s conduct as I am,” Mr. Biden said.But in the same breath, he underscored the divisions that remain in Washington, lashing out at Senator Ted Cruz, Republican of Texas, for leading the effort to overturn the election on Mr. Trump’s behalf and for spreading misinformation to the president’s supporters that helped whip them into a frenzy.He said he agreed with some Republicans who have said “how shameful it is the way Ted Cruz and others are dealing with this, how they’re responsible as well for what happened.”When asked whether Mr. Cruz should resign, Mr. Biden said, “I think they should be just flat beaten the next time they run. I think the American public has a real good, clear look at who they are. They are part of the big lie.”Mr. Biden said he was scheduled to unveil his legislative program for addressing the coronavirus crisis and its economic consequences on Thursday, six days before his inauguration as the 46th president.Mr. Biden’s economic team is deep into the process of developing proposals for a second stimulus bill and a larger economic package, including spending on infrastructure and tax increases on the rich. Aides and top congressional Democrats hope to speed the package through Congress once Mr. Biden takes office.“A devastating pandemic, an economic crisis, a country riven by political division and mistrust, institutions badly damaged and global alliances shredded,” said David Axelrod, who served as a political adviser to Mr. Obama during his first two years in the White House. “He has his hands full.”Mr. Biden and his aides have been particularly struck by two grim numbers in the jobs report on Friday: the loss of nearly 500,000 jobs in December in the leisure and hospitality industry, and of thousands of jobs in public education — a warning sign that state budget cuts could further hold back the recovery in months to come.They are particularly focused on direct checks to individuals, a policy that Mr. Biden and Democratic Senate candidates hammered in Georgia’s runoff elections that gave their party control of the chamber, and on efforts to fight the pandemic by accelerating testing for the virus and the deployment of vaccines.The contours of those proposals are beginning to take shape. The stimulus package will include Mr. Biden’s call for an additional $1,400 in direct payments to adults and children who qualified for $600 payments approved in the lame-duck stimulus passed last month, bringing the total benefit to $2,000 per individual.The challenge in steering his stimulus plans through a narrowly divided Senate was on display on Friday, when a moderate Democrat, Joe Manchin of West Virginia, said that $2,000 direct payments should not be the first priority for legislation and that he would prefer checks to be targeted “to those who need it.”The package will also include additional benefits for the nearly 11 million Americans who are still classified as unemployed by the Labor Department, assistance for renters and help for small business owners, with a focus on businesses owned by women and minorities. It will feature what Mr. Biden promised would be tens of billions of dollars to help schools reopen safely, tens of billions to help state and local governments keep essential workers on the job and “billions of dollars to get vaccines from a vial into someone’s arm.”Leaders in the Senate — like Bernie Sanders, Independent of Vermont, who will lead the Budget Committee, and Ron Wyden, Democrat of Oregon, who will be the chairman of the Finance Committee — said in interviews this week that they were preparing to work quickly with Mr. Biden’s team to draft new economic rescue legislation.Mr. Sanders said that he had spoken to Mr. Biden on Thursday about proposals, and that Mr. Sanders’ staff was already working to flesh out details.“He is, I know, going to be doing everything that he can to address the economic and health care crises facing our country,” Mr. Sanders said of Mr. Biden. “The crisis is of enormous severity, and we’ve got to move as rapidly as we can.”AdvertisementContinue reading the main story More
