Tag Archives: U.S. Economy

Tech giant to invest $500 billion in US manufacturing and innovation

Tim Cook Apple

Important Takeaways:

  • Apple is committing $500 billion to the U.S. economy in a historic initiative, the company announced on Monday, marking “an extraordinary new chapter in the history of American innovation.”
  • Apple’s 11-figure commitment will roll out over the next five years. It will involve building an advanced AI server manufacturing factory near Houston, as well as doubling the company’s Advanced Manufacturing Fund from $5 billion to $10 billion.
  • The tech giant also plans to establish an Apple Manufacturing Academy in Detroit, as well as hire 20,000 new employees with focuses on research and development, silicon engineering, artificial intelligence and machine learning.
  • “This new pledge builds on Apple’s long history of investing in American innovation and advanced high-skilled manufacturing, and will support a wide range of initiatives that focus on artificial intelligence, silicon engineering, and skills development for students and workers across the country,” the company said in a statement.

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Greatest credit bubble in human history according to this chief investment officer

Important Takeaways:

  • ‘No turning back’: This Wall Street bear is predicting the biggest market crash since 1929 — Here’s how to prepare your portfolio if he’s right
  • Spitznagel told Bloomberg in an earlier interview that we’re witnessing the “greatest credit bubble in human history.”
  • In an interview with New York Magazine’s Intelligencer last year, Spitznagel likened the Fed’s “constant monetary intervention” to forest fire suppression.
  • He went on to say “when you suppress it enough, it gets to a point where you can no longer afford to have any fires burn because they would be too big and too intense.”
  • That’s where the U.S. economy is at, according to the hedge fund manager.
  • If Spitznagel’s dire market predictions come true, you really don’t want to have all of your eggs in one basket — because that basket could easily go up in flames.

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Feds marching Interests Rates higher in a risk rewards market as Dow drops 100 points

Revelations 18:23:’For the merchants were the great men of the earth; for by thy sorceries were all nations deceived.’

Important Takeaways:

  • Dow drops 100 points after the Fed dashes hopes for a pivot to softer tightening stance
  • Markets will likely continue to seesaw until it is clear inflation has cooled off and that the Fed has stopped marching rates higher, but traders split over where interest rates are headed. Any data that shows the U.S. economy isn’t slowing as the central bank tightens policy will likely weigh on stocks.
  • “In our view, the risk-reward for markets over the next three to six months is unfavorable, and today’s Fed statement supports that view”

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Cyber threats top agenda at White House meeting with Big Tech, finance executives

WASHINGTON (Reuters) – The White House will ask Big Tech, the finance industry and key infrastructure companies to do more to tackle the growing cybersecurity threat to the U.S. economy in a meeting with the President Joe Biden and members of his cabinet on Wednesday.

“Cybersecurity is a matter of national security. The public and private sectors must meet this moment together, and the American people are counting on us,” a senior administration official told reporters.

Cybersecurity has risen to the top of the agenda for the Biden administration after a series of high-profile attacks on network management company SolarWinds Corp, the Colonial Pipeline company, meat processing company JBS and software firm Kaseya. The attacks hurt the United States far beyond just the companies hacked, affecting fuel and food supplies.

The guest list includes Amazon.com Inc CEO Andy Jassy, Apple Inc CEO Tim Cook, Microsoft Corp CEO Satya Nadella, Google’s parent Alphabet Inc CEO Sundar Pichai and IBM Chief Executive Arvind Krishna, according to two people familiar with the event.

One official said private sector executives were expected to announce commitments across key areas, including technology and staffing.

The meeting comes as Congress weighs legislation concerning data breach notification laws and cybersecurity insurance industry regulation, historically viewed as two of the most consequential policy areas within the field.

Executives for energy utility firm Southern Co and financial giant JPMorgan Chase & Co are also expected to attend the event.

The event will feature top cybersecurity officials from the Biden administration, including recently confirmed National Cybersecurity Director Chris Inglis, as well as Secretary of Homeland Security Alejandro Mayorkas, to lead different conversations with industry representatives.

(Reporting by Andrea Shalal and Christopher Bing; Editing by Lisa Shumaker)

White House sees ‘summer of joy and freedom’ as COVID-19 shots surpass 300 million

By Andrea Shalal

WASHINGTON (Reuters) -The United States has administered 300 million COVID-19 vaccinations in 150 days, a White House official said on Friday ahead of President Joe Biden’s scheduled update on his administration’s vaccination program.

Biden’s government-wide push to accelerate vaccinations was paying off, with COVID-19 cases, hospitalizations and deaths down to their lowest levels since the start of the pandemic, the officials said.

While Biden would “make clear that there is more work to be done” to ensure an equitable response to the pandemic, the U.S. economy was experiencing its strongest rebound in decades, the White House said.

“The results are clear: America is starting to look like America again, and entering a summer of joy and freedom,” the White House said in a fact sheet.

The news comes days after the United States marked a grim milestone, surpassing 600,000 COVID-19 deaths.

The U.S. death toll remains the highest in the world, although other countries, including Brazil, Britain and Russia, have higher death rates as a measure of their populations.

A White House fact sheet said the number of COVID-19 deaths has decreased by 90% since Biden took office in January, when more than 3,300 Americans were dying each day, and highlighted big gains in the economy as people return to work.

It said more than 175 million Americans had now received at least one COVID-19 vaccine shot, and 55% of adults were fully vaccinated.

Addressing racial imbalances in vaccination rates remained a huge and continuing concern, the White House said, but pointed to gains there as well. In the past month, it said, people of color had accounted for 54% of nationwide vaccinations, while making up 40% of the U.S. population.

Vice President Kamala Harris visited a vaccination site at the Ebenezer Baptist Church in Atlanta on Friday, underscoring the importance of faith groups and community-based organizations in accelerating vaccinations and overcoming vaccine hesitancy.

“Church is always a healing place. It’s so appropriate that we’re doing this here,” she said in remarks at the historic church where Martin Luther King Jr. and his father once preached.

“We just need to get the word out. One of the most important ways is friend to friend, neighbor to neighbor … please help us get the word out,” Harris said, according to a pool press report on the visit.

(Reporting by Andrea Shalal; Editing by Chizu Nomiyama and Bill Berkrot)

U.S. manufacturing sector slows in April amid supply challenges

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. manufacturing activity grew at a slower pace in April, likely constrained by shortages of inputs amid pent-up demand unleashed by rising vaccinations and massive fiscal stimulus.

The Institute for Supply Management (ISM) said on Monday its index of national factory activity fell to a reading of 60.7 last month after surging to 64.7 in March, which was the highest level since December 1983.

A reading above 50 indicates expansion in manufacturing, which accounts for 11.9% of the U.S. economy. Economists polled by Reuters had forecast the index edging up to 65 in April.

The White House’s massive $1.9 trillion pandemic relief package and the expansion of the COVID-19 vaccination program to all adult Americans has led to a boom in demand. But the pent-up demand is pushing against supply constraints as the pandemic, now in its second year, has disrupted labor supply, leading to shortages that are boosting prices of inputs.

That has been most evident in the automobile industry, where a global semiconductor chip shortage has forced cuts in production. Ford Motor Co said last week the scarcity of chips slashed production in half in its second quarter.

Technology companies are also feeling the heat. Apple warned last week that the chip shortage could dent iPads and Mac sales by several billion dollars.

Demand for goods like motor vehicles and electronics has surged during the pandemic as Americans shunned public transportation and millions worked from home and took classes remotely. Robust consumer spending helped to lift gross domestic product growth at a 6.4% annualized rate in the first quarter.

Most economists expect double-digit GDP growth this quarter, which would position the economy to achieve growth of at least 7%, which would be the fastest since 1984. The economy contracted 3.5% in 2020, its worst performance in 74 years.

The ISM survey’s measure of prices paid by manufacturers rose last month to the highest reading since July 2008.

The survey’s forward-looking new orders sub-index dropped to 64.3 after racing to 68.0 in March, which was the highest reading since January 2004.

Backlogs of uncompleted work increased last month as did export orders. Manufacturers started drawing down on inventories last month to meet demand. Business warehouses are almost bare, which should keep manufacturers busy and scrambling for resources for a while.

The survey’s manufacturing employment gauge fell to 55.1 after shooting up to 59.6 in March, which was the highest reading since February 2018. The index was well below the 61.5 forecast in a poll of economists, with the slowdown in hiring probably due to a scarcity of workers. Companies across many industries are struggling to find workers, even as employment is 8.4 million jobs below its peak in February 2020.

Federal Reserve Chair Jerome Powell last week acknowledged the worker shortage saying “one big factor would be schools aren’t open yet, so there’s still people who are at home taking care of their children, and would like to be back in the workforce, but can’t be yet.”

The worker shortage could hurt expectations for another month of blockbuster job growth in April. According to an early Reuters survey of economists, nonfarm payrolls likely increased by 950,000 jobs last month after rising by 916,000 in March.

The government is due to publish April’s employment report on Friday.

(Reporting By Lucia Mutikani; Editing by Chizu Nomiyama)

Biden ally in U.S. Senate says Republicans have until end of May for infrastructure deal

By David Morgan

WASHINGTON (Reuters) – Republicans in Congress have until the end of May to negotiate provisions of an infrastructure bill before Democrats opt to move sweeping legislation on their own, one of U.S. President Joe Biden’s closest Senate allies predicted on Wednesday.

Democratic Senator Chris Coons of Biden’s home state of Delaware said several senior Senate Republicans had privately signaled they would support a package of up to $1 trillion that targets roads, bridges and other typical infrastructure areas and includes some tax increases to pay for legislation.

Biden has proposed a more sweeping $2 trillion infrastructure package, which invests in traditional projects but also seeks to change the course of the U.S. economy by addressing climate change and boosting human services such as elder care.

The president and his Democratic allies, who narrowly control both houses of Congress, have insisted that they want Republican support for the package but will not wait long before deciding whether to move forward on their own.

“I believe that President Biden is open to spending the next month negotiating what the possibility is,” Coons told Punchbowl News in an interview. He said he spoke to the president earlier this week.

If no clear deal exists by the May 31 Memorial Day holiday, Coons added, “I think Democrats just roll it up into a big package and move it.”

Biden is expected to meet with a bipartisan group of lawmakers on infrastructure next week, said White House spokeswoman Jen Psaki.

Coons said talks with “several fairly seasoned senior Republicans” suggest bipartisan support for a narrower bill that could be funded partially by higher gasoline taxes and a new fee for electric vehicles to be dedicated to road infrastructure.

But the president’s larger plan faces determined opposition from Republicans including Senate Minority Leader Mitch McConnell, who describes the Biden package as “a Trojan horse” for tax hikes and unnecessary spending.

“There’s broad bipartisan support for tackling the infrastructure issue. But it depends on what your definition is,” McConnell told a Wednesday news conference in his home state of Kentucky.

“Infrastructure is roads, is bridges. It’s broadband. But beyond that, they’ve thrown everything but the kitchen sink into it,” he said.

Republican opposition raises the odds Democrats will use a maneuver called reconciliation to pass a package with just their own votes. Democrats control half the 100 seats in the Senate with Kamala Harris, Biden’s vice president, the tie-breaking 51st vote.

(Reporting by David Morgan; Editing by Scott Malone and Howard Goller

Yellen says more work needed to shore up weaknesses revealed by pandemic

By Andrea Shalal and David Lawder

WASHINGTON (Reuters) – U.S. Treasury Secretary Janet Yellen said a rapid recovery in the United States would boost overall global growth, but more work was needed to shore up weaknesses the COVID-19 crisis exposed in the non-bank financial sector, global supply chains and the social safety net.

Yellen on Tuesday told leaders of the International Monetary Fund and the World Bank that the Biden administration had decided to “go big” with its COVID-19 response to avert the negative “scarring” impact of long-lasting unemployment, adding that she hoped the U.S. economy would return to full employment next year.

Speaking during the IMF and World Bank spring meetings, Yellen said the crisis had dealt a huge blow worldwide, and it was the responsibility of advanced economies to ensure that years of progress in reducing poverty were not reversed by the crisis.

“We are going to be careful to learn the lessons of the (global) financial crisis, which is: ‘Don’t withdraw support too quickly,'” Yellen said, “And we would encourage all those developed countries that have the capacity… to continue to support a global recovery for the sake of the growth in the entire global economy.”

Yellen said she hoped global finance officials make progress on approving a new allocation of the IMF’s emergency reserve, or Special Drawing Rights, during the meeting, and said it was critical to tackle global debt issues exacerbated by the crisis.

She also underscored the Biden Administration’s commitment to tackling climate change at home and ensuring the needed “transfer of resources” to enable similar actions in developing countries.

“We need to make sure that we help developing countries meet their climate goals along with their development objectives. And the availability of green finance is critical to that,” she said, noting that addressing climate change would also bring opportunities for investment to the private sector.

Yellen said it was critical to ensure the world was better prepared for the next global health crisis, citing the need to improve the resilience of supply chains and social safety nets around the world.

She said the core banking sector had been strengthened after the 2008-2009 financial crisis, but some areas in the non-bank financial sector “showed tremendous stress” during the pandemic and would require attention.

(Reporting by Andrea Shalal and David Lawder; Editing by Chris Reese and Dan Grebler)

‘Every step of the way’: McConnell pledges battle over Biden infrastructure plan

WASHINGTON (Reuters) -U.S. Senate Minority Leader Mitch McConnell on Thursday said he will fight President Joe Biden’s $2 trillion infrastructure plan “every step of the way” and predicted the sweeping package would not see support from Republican lawmakers in Congress.

At a news conference in Owensboro, Kentucky, McConnell said the Biden proposal underscores deep philosophical differences between Republicans and Democrats over taxes and the national debt. He told reporters that he does not believe the White House has a public mandate to pursue the plan.

“I’m going to fight them every step of the way, because I think this is the wrong prescription for America,” he said.

Biden’s infrastructure plan, unveiled on Wednesday, charts a course for dramatic change in the direction of the U.S. economy and includes investments in traditional projects like roads and bridges along with climate change initiatives and human services like elder care.

“There’s more money in that plan that the president laid out in Pittsburgh for electric cars than for roads and bridges. Let me say that again: more money for electric cars than roads and bridges,” McConnell said.

Biden has proposed funding the package by raising the tax rate on U.S. corporations to 28% from 21% and making it harder for companies to use offshore tax shelters and other methods to reduce their tax burdens.

McConnell warned that “massive tax increases” would harm the economy and said the package’s spending level could run up the debt. The White House says the infrastructure proposal would more than pay for itself.

“My view about infrastructure is, we ought to build that which we can afford and not either whack the economy with major tax increases or run up the national debt,” he said.

(Reporting by David Morgan and Doina Chiacu, Editing by Franklin Paul and Sonya Hepinstall)

Biden targets big offshore wind energy expansion to fight climate change

By Richard Valdmanis

(Reuters) – The administration of U.S. President Joe Biden said on Monday that it has set a goal to vastly expand the nation’s offshore wind energy capacity in the coming decade by opening new areas to development, speeding environmental permitting, and boosting public financing for projects.

The plan is part of Biden’s broader effort to rapidly transition the U.S. economy to net zero greenhouse gas emissions to fight climate change, a politically controversial agenda that Republicans say could bring economic ruin but which Democrats say can create jobs while protecting the environment.

“President Biden believes we have an enormous opportunity in front of us to not only address the threats of climate change, but use it as a chance to create millions of good-paying, union jobs,” National Climate Advisor Gina McCarthy said in announcing the plan. “Nowhere is the scale of that opportunity clearer than for offshore wind.”

The plan sets a target to deploy 30 gigawatts of offshore wind energy by 2030, which the administration said would be enough to power 10 million homes and cut 78 million metric tonnes of carbon dioxide per year, while creating jobs in construction, development, and steel-making.

One of the first steps will be to open a new offshore wind energy development zone in the New York Bight, an area off the densely populated coast between Long Island, New York and New Jersey, with a lease auction there later this year.

The administration said it will also aim to prioritize environmental permitting and provide billions of dollars in public financing for offshore wind projects.

The United States currently has just two small offshore wind farms, the 30 megawatt Block Island Wind Farm off Rhode Island and a two-turbine pilot project off the coast of Virginia. There are more than 20 GW of proposed projects in various stages of development.

Europe, by contrast, has more than 20 GW of capacity and plans to expand that more than ten-fold by 2050.

(Writing by Richard Valdmanis; Editing by Marguerita Choy)