What’s happening: The US economy is still declining by 9.5 million positions since February 2020, putting huge pressure on the central bank to continue to provide incentives for the foreseeable future. Expect Powell to reach this strong point when the Fed announces its latest policy decision this week.
This gives the Fed much more freedom to keep interest rates lower for longer – and that’s what many economists expect to do.
“They said they were willing to be patient,” Joseph Brusuelas, chief economist at RSM US, told me.
Passing President Joe Biden’s $ 1.9 trillion aid package could help. Airlines said last week that it was canceling courses and expecting additional unemployment benefits and incentive controls to boost demand, supporting employment in struggling industries.
“It just won’t happen behind this special legislation,” he said.
The package will not eliminate the economic scars. Many jobs in the hospitality, entertainment and retail sectors will never return. Researchers at Harvard University have found that the number of small start-ups is still down 32% from January 2020. The Institute for Economic Policy, analyzing the latest report on job vacancies at the Bureau of Labor Statistics, notes that for each 15 unemployed workers, there were jobs available for only 10 of them.
“That bartender will have to learn how to code. The waitress will have to become digitally literate, because their jobs probably won’t be there in the early post-pandemic economy,” Brusuelas said.
The solution to this problem can be left to Congress and the Biden administration, given the limited instruments available to the Fed. Treasury Secretary Janet Yellen said there would be another bill that “addresses job creation through infrastructure development [and] by investing in people, education and training. “
Meanwhile, lawmakers will need the Fed to continue to provide support – even if inflation-related issues resurface in the financial markets.
Why small grocery stores (still) no longer have toilet paper
If you have recently entered your independent grocery store, you are likely to still find a shortage of items such as toilet paper, paper towels, and cleaning supplies.
Without access to key products, small grocers say they are losing customers and facing another hurdle as they try to survive against the big chains.
This is not a completely new problem. Prior to the pandemic, independent grocers were often told they could not get special products or items available in the big chains, according to Christopher Jones, senior vice president for government relations and a counselor at the National Boys’ Association.
“What happened during the Covid pandemic is that this problem has been exacerbated,” Jones said.
There is no publicly available data for tracking depleted products at small or large stores. But Burt Flickinger, a supermarket consultant at Strategic Resource Group, said he and his team visit stores across the country on a weekly basis and found in a pandemic that the “far” store chain has a better offer than independent stores.
It follows
Months: China’s retail sales, industrial production and unemployment rate
Tuesday: US retail sales and industrial production
Friday: Political decision of the Bank of Japan