Most U.S. adults are vaccinated but COVID-19 cases are rising. The economy is accelerating but inflation looms. Bipartisan cooperation has improved but political rancor is high.
More than five months into Joe Biden’s presidency, the United States has changed in multiple ways, with a healthier business outlook and a pandemic – at least in many parts of the country – increasingly under control.
But as the world’s largest economy celebrates its 245th birthday on July 4, the Independence Day holiday will not be the full celebration that Biden had hoped, or promised.
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A White House goal of vaccinating 70% of adults against COVID-19 with at least one shot will not be met, and legislation to repair the nation’s infrastructure is still far from arriving on Biden’s desk.
Biden will celebrate with a 1,000-person party on the White House lawn and fireworks over the National Mall. Historians said he, and the country, have a reason to do so.
“Compare where we are versus a year ago economically, in terms of public health, in terms of national psyche, it is almost like living in a different country,” said presidential historian Michael Beschloss.
He said Biden had to walk a careful line between celebrating the progress made on the pandemic and declaring: Mission Accomplished.
“If Biden had been too hasty in declaring the pandemic over, which he has not, it would be difficult to ask Americans for future sacrifices and it would also make Democrats politically vulnerable next year if the pandemic in some way recurs,” Beschloss said.
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Trouble may loom ahead, though. The U.S. government said on Thursday that daily coronavirus cases rose in the past week, driven by increases in the Midwest and Southeast where vaccination rates are low and the highly contagious Delta variant, first found in India, is spreading.
“We are celebrating, as a country, at the same time as we recognize the fact that we’re in a serious situation for those who have not been vaccinated,” said infectious disease expert Dr. Anthony Fauci. “And the message is: Get vaccinated.”
DIFFERENT PROBLEMS
In a sign of economic progress, the Labor Department said on Friday that U.S. companies hired the most workers in 10 months in June.
But the economy is far from back to normal, with 7 million fewer jobs than it had in February 2020, before the pandemic. Meanwhile some businesses are having trouble hiring the employees they need, as workers struggling with childcare or worried about illness choose to stay home https://www.reuters.com/business/livings-not-easy-worker-hungry-us-businesses-this-summertime-2021-06-30.
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Vanderbilt University historian Thomas Alan Schwartz noted the country’s challenges had changed since the tumultuous tenure of former President Donald Trump.
“Our problems are really different now,” he said. “I think Joe Biden’s America is a calmer, gentler place.”
Demonstrations over racial disparities have fallen after massive unrest in 2020 over the death of George Floyd, a Black man, and the white police officer charged with murdering him was sentenced to 22-and-a-half years in prison.
Biden commemorated https://www.reuters.com/world/us/biden-visit-tulsa-massacre-site-us-confronts-racial-legacy-2021-06-01 the 1921 massacre of Black Americans in Tulsa, Oklahoma, last month and signed a bill into law making June 19 a federal holiday commemorating the emancipation of the enslaved.
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At the same time, threats from home grown extremism, particularly white supremacists, are on the rise, Biden’s Justice Department has said.
And a Republican-led fight against “critical race theory” has turned the teaching of American history into a new political battleground https://www.reuters.com/world/us/partisan-war-over-teaching-history-racism-stokes-tensions-us-schools-2021-06-23.
Despite Biden’s pledge to get Republicans and Democrats in Congress to work together – and massive popular support – legislation on infrastructure, police reform, and gun safety still has not crossed his desk.
The Jan. 6 storming of the Capitol by Trump supporters, during which five people died including a Capitol Police officer, remains an open wound. House of Representatives Republican leader Kevin McCarthy has criticized members of his party who cooperate with a committee set up by Democratic Speaker Nancy Pelosi to investigate the insurrection.
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Still, McCarthy attended a White House event on Friday to honor the Los Angeles Dodgers baseball team, the 2020 World Series winners. Baseball is the quintessential American pastime.
“As we beat this pandemic and celebrate fans coming back to stadiums, we celebrate something else: a national achievement,” Biden said, hailing how frontline workers, friends, families and neighbors came together to look out for one another. “Together, as a nation, we have proved that it truly is never a good bet to bet against America.”
Asked about the future of Biden-backed infrastructure spending in Congress, McCarthy told a reporter he was only there to celebrate the Dodgers. (Reporting by Jeff Mason; Additional reporting by Andrea Shalal; Editing by Heather Timmons and Daniel Wallis)
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Nigeria’s economy, which ranked as Africa’s largest in 2022, is set to slip to fourth place this year and Egypt, which held the top position in 2023, is projected to fall to second behind South Africa after a series of currency devaluations, International Monetary Fund forecasts show.
The IMF’s World Economic Outlook estimates Nigeria’s gross domestic product at $253 billion based on current prices this year, lagging energy-rich Algeria at $267 billion, Egypt at $348 billion and South Africa at $373 billion.
(Bloomberg) — The International Monetary Fund expects OPEC and its partners to start increasing oil output gradually from July, a transition that’s set to catapult Saudi Arabia back into the ranks of the world’s fastest-growing economies next year.
“We are assuming the full reversal of cuts is happening at the beginning of 2025,” Amine Mati, the lender’s mission chief to the kingdom, said in an interview in Washington, where the IMF and the World Bank are holding their spring meetings.
The view explains why the IMF is turning more upbeat on Saudi Arabia, whose economy contracted last year as it led the OPEC+ alliance alongside Russia in production cuts that squeezed supplies and pushed up crude prices. In 2022, record crude output propelled Saudi Arabia to the fastest expansion in the Group of 20.
Under the latest outlook unveiled this week, the IMF improved next year’s growth estimate for the world’s biggest crude exporter from 5.5% to 6% — second only to India among major economies in an upswing that would be among the kingdom’s fastest spurts over the past decade.
The fund projects Saudi oil output will reach 10 million barrels per day in early 2025, from what’s now a near three-year low of 9 million barrels. Saudi Arabia says its production capacity is around 12 million barrels a day and it’s rarely pumped as low as today’s levels in the past decade.
Mati said the IMF slightly lowered its forecast for Saudi economic growth this year to 2.6% from 2.7% based on actual figures for 2023 and the extension of production curbs to June. Bloomberg Economics predicts an expansion of 1.1% in 2024 and assumes the output cuts will stay until the end of this year.
Worsening hostilities in the Middle East provide the backdrop to a possible policy shift after oil prices topped $90 a barrel for the first time in months. The Organization of Petroleum Exporting Countries and its allies will gather on June 1 and some analysts expect the group may start to unwind the curbs.
After sacrificing sales volumes to support the oil market, Saudi Arabia may instead opt to pump more as it faces years of fiscal deficits and with crude prices still below what it needs to balance the budget.
Saudi Arabia is spending hundreds of billions of dollars to diversify an economy that still relies on oil and its close derivatives — petrochemicals and plastics — for more than 90% of its exports.
Restrictive US monetary policy won’t necessarily be a drag on Saudi Arabia, which usually moves in lockstep with the Federal Reserve to protect its currency peg to the dollar.
Mati sees a “negligible” impact from potentially slower interest-rate cuts by the Fed, given the structure of the Saudi banks’ balance sheets and the plentiful liquidity in the kingdom thanks to elevated oil prices.
The IMF also expects the “non-oil sector growth momentum to remain strong” for at least the next couple of years, Mati said, driven by the kingdom’s plans to develop industries from manufacturing to logistics.
The kingdom “has undertaken many transformative reforms and is doing a lot of the right actions in terms of the regulatory environment,” Mati said. “But I think it takes time for some of those reforms to materialize.”
(Bloomberg) — The head of the International Monetary Fund warned the US that the global economy is closely watching interest rates and industrial policies given the potential spillovers from the world’s biggest economy and reserve currency.
“All eyes are on the US,” Kristalina Georgieva said in an interview on Bloomberg’s Surveillance on Thursday.
The two biggest issues, she said, are “what is going to happen with inflation and interest rates” and “how is the US going to navigate this world of more intrusive government policies.”
The sustained strength of the US dollar is “concerning” for other currencies, particularly the lack of clarity on how long that may last.
“That’s what I hear from countries,” said the leader of the fund, which has about 190 members. “How long will the Fed be stuck with higher interest rates?”
Georgieva was speaking on the sidelines of the IMF and World Bank’s spring meetings in Washington, where policymakers have been debating the impacts of Washington and Beijing’s policies and their geopolitical rivalry.
Read More: A Resilient Global Economy Masks Growing Debt and Inequality
Georgieva said the IMF is optimistic that the conditions will be right for the Federal Reserve to start cutting rates this year.
“The Fed is not yet prepared, and rightly so, to cut,” she said. “How fast? I don’t think we should gear up for a rapid decline in interest rates.”
The IMF chief also repeated her concerns about China devoting too much capital and labor toward export-oriented manufacturing, causing other countries, including the US, to retaliate with protectionist policies.
China Overcapacity
“If China builds overcapacity and pushes exports that create reciprocity of action, then we are in a world of more fragmentation not less, and that ultimately is not good for China,” Georgieva said.
“What I want to see China doing is get serious about reforms, get serious about demand and consumption,” she added.
A number of countries have recently criticized China for what they see as excessive state subsidies for manufacturers, particularly in clean energy sectors, that might flood global markets with cheap goods and threaten competing firms.
US Treasury Secretary Janet Yellen hammered at the theme during a recent trip to China, repeatedly calling on Beijing to shift its economic policy toward stimulating domestic demand.
Chinese officials have acknowledged the risk of overcapacity in some areas, but have largely portrayed the criticism as overblown and hypocritical, coming from countries that are also ramping up clean energy subsidies.
(Updates with additional Georgieva comments from eighth paragraph.)
