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Economy

Biden unveiling $1.9T plan to stem virus and steady economy – North Shore News

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WILMINGTON, Del. — President-elect Joe Biden is unveiling a $1.9 trillion coronavirus plan Thursday to turn the tide on the pandemic, speeding up the vaccine rollout and providing financial help to individuals, states and local governments and businesses struggling with the prolonged economic fallout.

Called the “American Rescue Plan,” the legislative proposal would meet Biden’s goal of administering 100 million vaccines by the 100th day of his administration, while advancing his objective of reopening most schools by the spring. On a parallel track, it would deliver another round of aid to stabilize the economy while the public health effort seeks the upper hand on the pandemic, said aides who described the plan ahead of a speech by Biden on Thursday evening.

It includes $1,400 checks for most Americans, which on top of $600 provided in the most recent COVID-19 bill would bring the total to the $2,000 that Biden has called for. The plan would also extend a temporary boost in unemployment benefits and a moratorium on evictions and foreclosures through September. And it shoehorns in the long-term Democratic policy aim of increasing the minimum wage to $15 an hour and expanding paid leave for workers across the economy.

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Senate Democratic leader Chuck Schumer of New York has said Biden’s proposal will be his first order of business this year. The emergency legislation would be paid for with borrowed money, adding to trillions in debt the government has already incurred to confront the pandemic.

Aides said Biden will make the case that the additional spending and borrowing is necessary to prevent the economy from sliding into an even deeper hole. Interest rates are low, making debt more manageable. The aides spoke on condition of anonymity to describe the plan ahead of his speech Thursday night.

Biden has long held that economic recovery is inextricably linked with controlling the coronavirus. “Our work begins with getting COVID under control,” he declared in his victory speech. “We cannot repair the economy, restore our vitality or relish life’s most precious moments until we get it under control.”

The plan comes as a divided nation is in the grip of the pandemic’s most dangerous wave yet. So far, more than 385,000 people have died of COVID-19 in the U.S. And government numbers out Thursday reported a jump in weekly unemployment claims, to 965,000, a sign that rising infections are forcing businesses to cut back and lay off workers.

Under Biden’s multipronged strategy, about $400 billion would go directly to combating the pandemic, while the rest is focused on economic relief and aid to states and localities.

About $20 billion would be allocated for a more disciplined focus on vaccination, on top of some $8 billion already approved by Congress. Biden has called for setting up mass vaccination centres and sending mobile units to hard-to-reach areas.

The plan provides $50 billion to expand testing, which is seen as key to reopening most schools by the end of the new administration’s first 100 days. About $130 billion would be allocated to help schools reopen without risking further contagion.

The plan would fund the hiring of 100,000 public health workers, to focus on encouraging people to get vaccinated and on tracing the contacts of those infected with the coronavirus.

There’s also a proposal to boost investment in genetic sequencing, to help track new virus strains including the more contagious variants identified in the United Kingdom and South Africa.

Throughout the plan, there’s a focus on ensuring that minority communities that have borne the brunt of the pandemic are not shortchanged on vaccines and treatments, aides said.

With the new proposals comes a call to redouble efforts on the basics.

Biden is asking Americans to override their sense of pandemic fatigue and recommit to wearing masks, practicing social distancing and avoiding indoor gatherings, particularly larger ones. It’s still the surest way to slow the COVID-19 wave, with more than 4,400 deaths reported just on Tuesday.

Biden’s biggest challenge will be to “win the hearts and minds of the American people to follow his lead,” said Dr. Leana Wen, a public health expert and emergency physician.

With the backing of Congress and the expertise of private and government scientists, the Trump administration has delivered two highly effective vaccines and more are on the way. Yet a month after the first shots were given, the nation’s vaccination campaign is off to a slow start with about 10.3 million people getting the first of two shots, although more than 29 million doses have been delivered.

Biden believes the key to speeding that up lies not only in delivering more vaccine but also in working closely with states and local communities to get shots into the arms of more people. The Trump administration provided the vaccine to states and set guidelines for who should get priority for shots, but largely left it up to state and local officials to organize their vaccination campaigns.

“This is going to entail co-ordination at all levels, as well as resources,” said Dr. Nadine Gracia, executive vice-president of the nonpartisan Trust for America’s Health. “There is a commitment the (incoming) administration has articulated to address the needs of communities.”

Biden has set a goal of administering 100 million shots in his first 100 days. The pace of vaccination is approaching 1 million shots a day, but 1.8 million a day would be needed to reach widespread or “herd” immunity by the summer, according to a recent estimate by the American Hospital Association. Wen says the pace should be even higher — closer to 3 million a day.

It’s still unclear how the new administration will address the issue of vaccine hesitancy, the doubts and suspicions that keep many people from getting a shot. Polls show it’s particularly a problem among Black Americans. “It’s important to acknowledge the reasons why it exists and work to earn trust and build vaccine confidence in communities,” said Gracia.

Next Wednesday, when Biden will be sworn in as president, marks the anniversary of the first confirmed case of COVID-19 in the United States.

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Associated Press writer Josh Boak contributed to this report.

Ricardo Alonso-Zaldivar And Bill Barrow, The Associated Press


















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Economy

U.S. economic growth for last quarter revised up slightly to healthy 3.4% annual rate

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The U.S. economy grew at a solid 3.4 per cent annual pace from October through December, the government said Thursday in an upgrade from its previous estimate. The government had previously estimated that the economy expanded at a 3.2 per cent rate last quarter.

The Commerce Department’s revised measure of the nation’s gross domestic product – the total output of goods and services – confirmed that the economy decelerated from its sizzling 4.9 per cent rate of expansion in the July-September quarter.

But last quarter’s growth was still a solid performance, coming in the face of higher interest rates and powered by growing consumer spending, exports and business investment in buildings and software. It marked the sixth straight quarter in which the economy has grown at an annual rate above 2 per cent.

For all of 2023, the U.S. economy – the world’s biggest – grew 2.5 per cent, up from 1.9 per cent in 2022. In the current January-March quarter, the economy is believed to be growing at a slower but still decent 2.1 per cent annual rate, according to a forecasting model issued by the Federal Reserve Bank of Atlanta.

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Thursday’s GDP report also suggested that inflation pressures were continuing to ease. The Federal Reserve’s favoured measure of prices – called the personal consumption expenditures price index – rose at a 1.8 per cent annual rate in the fourth quarter. That was down from 2.6 per cent in the third quarter, and it was the smallest rise since 2020, when COVID-19 triggered a recession and sent prices falling.

Stripping out volatile food and energy prices, so-called core inflation amounted to 2 per cent from October through December, unchanged from the third quarter.

The economy’s resilience over the past two years has repeatedly defied predictions that the ever-higher borrowing rates the Fed engineered to fight inflation would lead to waves of layoffs and probably a recession. Beginning in March 2022, the Fed jacked up its benchmark rate 11 times, to a 23-year high, making borrowing much more expensive for businesses and households.

Yet the economy has kept growing, and employers have kept hiring – at a robust average of 251,000 added jobs a month last year and 265,000 a month from December through February.

At the same time, inflation has steadily cooled: After peaking at 9.1 per cent in June 2022, it has dropped to 3.2 per cent, though it remains above the Fed’s 2 per cent target. The combination of sturdy growth and easing inflation has raised hopes that the Fed can manage to achieve a “soft landing” by fully conquering inflation without triggering a recession.

Thursday’s report was the Commerce Department’s third and final estimate of fourth-quarter GDP growth. It will release its first estimate of January-March growth on April 25.

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Economy

Canadian economy starts the year on a rebound with 0.6 per cent growth in January – CBC.ca

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The Canadian economy grew 0.6 per cent in January, the fastest growth rate in a year, while the economy likely expanded 0.4 per cent in February, Statistics Canada said Thursday.

The rate was higher than forecasted by economists, who were expecting GDP growth of 0.4 per cent in the month. December GDP was revised to a 0.1 per cent contraction from zero growth initially reported.

January’s rise, the fastest since the 0.7 per cent growth in January 2023, was helped by a rebound in educational services as public sector strikes ended in Quebec, Statistics Canada said.

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WATCH | The Canadian economy grew more than expected in January: 

Canada’s GDP increased 0.6% in January

41 minutes ago

Duration 2:20

The Canadian economy grew 0.6 per cent in January, the fastest growth rate in a year, while the economy likely expanded 0.4 per cent in February, Statistics Canada says.

“The more surprising news today was the advance estimate for February,” which suggested that underlying momentum in the economy accelerated further that month, wrote CIBC senior economist Andrew Grantham in a note.

Thursday’s data shows the Canadian economy started 2024 on a strong note after growth stalled in the second half of last year. GDP was flat or negative on a monthly basis in four of the last six months of 2023.

More time for BoC to assess

The strong rebound could allow the Bank of Canada more time to assess whether inflation is slowing sufficiently without risking a severe downturn, though the central bank has said it does not want to stay on hold longer than needed.

Because recent inflation figures have come in below the central bank’s expectations, “it appears that much of the growth we are seeing is coming from an easing of supply constraints rather than necessarily a pick-up in underlying demand,” wrote Grantham.

“As a result, we still see scope for a gradual reduction in interest rates starting in June.”

WATCH | Bank of Canada left interest rate unchanged earlier this month: 

Bank of Canada leaves interest rate unchanged, says it’s too soon to cut

22 days ago

Duration 1:56

The Bank of Canada held its key interest rate at 5 per cent on Wednesday, with governor Tiff Macklem saying it was too soon for cuts. CBC News speaks with an economist and a couple who might be forced to sell their home if interest rates don’t come down.

The central bank has maintained its key policy rate at a 22-year high of five per cent since July, but BoC governors in March agreed that conditions for rate cuts should materialize this year if the economy evolves in line with its projections.

The bank in January forecast a growth rate of 0.5 per cent in the first quarter, and Thursday’s data keeps the economy on a path of small growth in the first three months of 2024. The BoC will release new projections along with its rate announcement on April 10.

Growth in 18 out of 20 sectors

Growth in January was broad-based, with 18 of 20 sectors increasing in the month, StatsCan said. The agency said that real estate and the rental and leasing sectors grew for the third consecutive month, as activity at the offices of real estate agents and brokers drove the gain in January.

Overall, services-producing industries grew 0.7 per cent, while the goods-producing sector expanded 0.2 per cent.

In a preliminary estimate for February, StatsCan said GDP was likely up 0.4 per cent, helped by mining, quarrying, oil and gas extraction, manufacturing and the finance and insurance industries.

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Economy

Yellen Sounds Alarm on China ‘Global Domination’ Industrial Push – Bloomberg

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US Treasury Secretary Janet Yellen slammed China’s use of subsidies to give its manufacturers in key new industries a competitive advantage, at the cost of distorting the global economy, and said she plans to press China on the issue in an upcoming visit.

“There is no country in the world that subsidizes its preferred, or priority, industries as heavily as China does,” Yellen said in an interview with MSNBC Wednesday — highlighting “massive” aid to electric-car, battery and solar producers. “China’s desire is to really have global domination of these industries.”

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