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Remarks by President Biden on the Economy – The White House

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11:43 A.M. EDT

THE PRESIDENT:  Well, good morning.  Tomorrow marks exactly six months since my administration began.  I think it’s a fitting moment to take a look at our economy — where we were six months ago, what we’ve achieved since then, and what I believe we’ve — I believe where we’re headed. 
Before I took office, there was a lot of folks out there — a lot of folks out there making some pretty bold predictions about how things would turn out.  You might remember some of the predictions.  That if I became President, we’d, quote, “see a depression the likes of which we’ve never seen.”  End of quote. 

Well, it’s true that the economy was sputtering before I got here, adding only 60,000 jobs per month for the three months before I was sworn in.  But now, six months later, we’ve changed that. 

We’ve gone from 60,000 jobs per month to 60,000 jobs every three days — more than 600,000 jobs per month since I took office.  More than 3 million new jobs all told.  That’s the fastest growth, I’m told, at this point in any administration’s history.

Another prediction — that is my favorite one, I must add — is that if I got elected, I’d bring the end to capitalism.  (Laughs.)  I never understood that one, but we’ve heard — we’ve heard it an awful lot.  Well, in six months into my administration, the U.S. economy has experienced the highest economic growth rate in nearly 40 years. 

And we know we’ve — and now we knew that we needed to launch a war-time effort to get the — America vaccinated and pass a powerful American Rescue Plan. 

We did both those things.  And now, the forecasters have doubled their projections for growth this year in the economy to 7 percent or higher.  In fact, the U.S. is the only developed country in the world where growth projections today are stronger than they were before the pandemic hit. 

At the same time, companies across the country are giving workers a raise.  Unusual thing.  (Laughs.)  And the number of new unemployment claims has been cut by more than half since I took office. 

And by the way, two weeks ago, I issued a major executive order promoting fair and open competition, which is the cornerstone — the cornerstone of American capitalism, banning non-compete clauses that suppress workers’ wages; lowering the price of things like hearing aids, prescription drugs, Internet service; along with dozens of other actions. 

Folks, it turns out capitalism is alive and very well.  We’re making serious progress to ensure that it works the way it’s supposed to work: for the good of the American people.

So, for all those predictions of doom and gloom, six months in, here’s where we stand: record growth, record job creation, workers getting hard-earned breaks. 

Look, we’ve brought this economy back from the brink.  And we designed our strategy not only to provide for a temporary boost, but to lay the foundation for a long-term boom that brings everyone along.

You know, that’s why we designed the American Rescue Plan to help not just all those — everyone at once, but over the course of a full year and beyond so we could help families and small businesses weather the ups and downs of our — as the economy recovers from an historic pandemic.  And I — there are going to be ups and downs.

We saw a great example of that just last week.  For the first time, monthly payments began going out to nearly every working family raising a child in the United States of America.  Thanks to the expanded Child Tax Credit in the American Rescue Plan: $300 a month going out for each child under the age of six, and $250 for every child 6 through 17, every month for the next six months, with more coming in the spring. 

That money is a game-changer.  For some, it’s a lifesaver.  Think of the single mom, struggling to put food on the table each month.  The parent who has to tell their kid, “I’m sorry, honey, but we can’t afford those dance classes or the sports team you want to play on this fall.  We can’t do it.”  You know, they can’t wait for the credit against their taxes to be coming next year as a tax credit.  They need cash in their pockets today. 

For families with the least, this money will do the most — dramatically reducing child poverty in America.  And for millions of middle-class families, it will give them a little bit of breathing room every month.  That’s just one example of how we’re building an economy from the bottom up and the middle out.  

But despite that progress, we cannot afford to be complacent.  We know that our economic recovery hinges on getting the pandemic under control. 

You know, and by fully vaccinating 160 million Americans, 80 percent of our seniors, we’ve fundamentally changed the course of the pandemic — from one that threatens all Americans, to a disease that has the most severe impacts only on the unvaccinated people in the country.  But we can’t let up, especially since and because of the Delta variant, which is more transmis- — more transmissible and more dangerous. 

Unfortunately, cases are now rising, particularly in communities with very low vaccination rates.  Just four states account for nearly 40 percent — four states, 40 percent of all cases last week.  Virtually all hospitalizations and deaths are occurring among unvaccinated Americans.  These tragedies are avoidable. 

The data couldn’t be clearer: If you’re fully vaccinated, you have a high degree of protection against severe illness, hospitalization, and death.  If you’re unvaccinated, you are not protected. So, please, please get vaccinated.  Get vaccinated now.  It works.  It’s safe.  It’s free.  It’s convenient.

You know, this virus doesn’t have to hold you back any longer.  It doesn’t have to hold our economy back any longer.  But the only way we put it behind us is if more Americans get vaccinated.

We also know that as our economy has come roaring back, we’ve seen some price increases.  Some folks have raised worries that this could be a sign of persistent inflation.  But that’s not our view.  Our experts believe and the data shows that most of the price increases we’ve seen are — were expected and expected to be temporary.

The reality is, you can’t flip the global economic light back on and not expect this to happen.  As demand returns, there’s going to be global supply chain challenges.  We’ve seen that in semi-conductors, which are used in automobiles.  That global shortage has slowed vehicle production, creating a temporary spike in car prices.  That’s a real challenge.  And my administration is doing everything we can to address it.  But again, these disruptions are temporary. 

Lumber prices are another example.  They spiked early in our recovery, but in recent weeks, they’ve began to fall — they’ve fallen by more than 50 percent. 

In the hospitality industry, prices are returning to where they used to be.  Economists call all of these things “transitory effects.”  And they account for about 60 percent of the price increases we’ve seen over the last few months. 

Now, I want to be clear: My administration understands that if we were to ever experience unchecked inflation over the long term that would pose real challenges to our economy.  So while we’re confident that isn’t what we are seeing today, we’re going to remain vigilant about any response that is needed. 

As I made clear to Chairman Powell of the Federal Reserve when we met recently, the Fed is independent.  It should take whatever steps it deems necessary to support a strong, durable economic recovery.  But whatever different views some might have on current price increases, we should be united on one thing: passage of the Bipartisan Infrastructure Framework, which we shook hands on.  We shook hands on it.  And my Build Back Better plan will be a force for achieving lower prices for Americans looking ahead.  It’s another reason why these investments are so important. 

If we make a prudent, multi-year investments in better roads, bridges, transit systems, and high-speed Internet, and a modern, resilient electric grid, here’s what will happen: It breaks up the bottlenecks in our economy.  Goods get to consumers more rapidly and less expensively.  Small businesses create and innovate much more seamlessly.  If we increase the availability of quality, affordable childcare, eldercare, paid leave, more people will enter the workforce. 

These steps will enhance our productivity — raising wages without raising prices.  That won’t increase inflation.  It will take the pressure off of inflation, give a boost to our workforce, which leads to lower prices in the years ahead. 

So, if your primary concern right now is inflation, you should be even more enthusiastic about this plan.  And as we promote — as we promote fair competition in our economy through the executive order I mentioned, it will drive down prices even further.  New businesses will get in the game, competing against those giant corporations who have been free to ramp up prices because they haven’t had any real competition.

Look, the bottom line is this: What the best companies do and what we as a country should do is make smart, sustainable investments with appropriate financing to make this nation more productive, to advance America’s leadership on clean energy to win the jobs of the future while meeting the threat of climate change, and to ensure that all working Americans benefit from the growth they’re helping produce. 

The independent experts who have analyzed my plans have found that they would do just that: expand output and enable millions of Americans to enter the labor workforce now, just this year — not just for the next — but not just this year, but for decades in the future.  It’s not temporary.

This is the best strategy to create millions of jobs and lift up the middle-class families and grow wages and keep prices affordable for the long term. 

What we can’t do is go back to the same old trickle-down theories that gave us nearly $2 trillion in deficit-financed corporate tax giveaways that did nothing to make our economy more productive or resilient.  The same people who cheered on that approach are now telling us it isn’t [is] a problem if big companies have actually to compete for workers and offer them a fair wage with some dignity.

I could not disagree more.  We can’t go back to the old, failed thinking.  We need to grow the economy from the bottom up and the middle out, as I’ve said before. 

The investments I’m proposing are investments the American people want and investments that our country needs.  And if we get this done, a wide range of independent forecasters project that it will have an incredibly significant impact on GDP and jobs — good-paying jobs with prevailing wages.  And the majority of these jobs will go to people without a college degree. 

I’ve said it before, and it’s true: This is a blue-collar blueprint for building an American economy back.  Simply put, we can’t afford not to make these investments.  And we’re going to pay for them responsibly as well, by ensuring that our largest corporations and the very wealthiest among us pay their fair share by reforming our international tax system with a minimum global tax, which we’ve led the world to agree to. 

Let me close with this: When I arrived in office, it had been a long time since the government had worked for the people.  Things had been great for big corporations and folks at the top.  Those 55 major corporations that paid zero in income tax while making billions in profits, they had no complaints. 

But when I took office, I made a commitment — a commitment to the American people that we were going to change that paradigm so working families could have a fighting chance again to get a good education; to get a good job and a raise; to take care of the elderly parent or the child with the disability and still be able to go out and earn a good living; to stop losing hours of their lives stuck in traffic because the streets are crumbling; or waiting for slow, spotty Internet to connect them to the world. 

That’s what the economy we’re building is all about.  That’s why we passed the American Rescue Plan.  And that’s why we need the investment of the Bipartisan Infrastructure Framework and my Build Back Better plan. 

Our economy has come a long way over the last six months.  We can’t slow down now.  We can make this boom we’re experiencing today one that will ensure that all Americans have an opportunity to share in it for years to come.  And we can show the world that American democracy can deliver for the people. 

I look forward to continuing to build this economy.  And I’m incredibly optimistic about what we’re going to be able to build together in the next six months and the years to come. 

Thank you all for listening.  May God bless you.  And I’ll take a few questions.

Q    Mr. President, you said last week that companies and platforms like Facebook are “killing people” by letting them —

THE PRESIDENT:  Let me (inaudible) precisely what I said.  I’m glad you asked me that question.  One, I had just read that — on the Facebook — Facebook pointed out that — it was pointed out that Facebook, of all the misinformation, 60 percent of that misinformation came from 12 individuals.  That’s what the article said. 

So, I was asked that question about what do I think is happening.  Facebook isn’t killing people; these 12 people who are out there giving misinformation — anyone listening to it is getting hurt by it.  It’s killing people.  It’s bad information.

My hope is that Facebook, instead of taking it personally — that somehow I’m saying Facebook is killing people — that they would do something about the misinformation — the outrageous informa- — misinformation about the vaccine.  That’s what I meant.

Q    Have they done enough in your opinion to stop —

THE PRESIDENT:  I haven’t — to be completely honest with you, I don’t know that they did anything today.  Up to — over the weekend, I don’t think they had.  But I don’t know.  I don’t know the answer to that question.

Q    Will you hold them accountable if they don’t do more to stop the spread?

THE PRESIDENT:  I’m — when you say “hold accountable,” I just want to — I’m not trying to hold people account- — I’m trying make people to look at themselves.  Look in the mirror.  Think about that misinformation going to your son, your daughter, your relatives, someone you love.  That’s what I’m asking.

All the way in the back. 

Q    Yes, thank you, Mr. President.  At what point would you consider inflation unchecked to a point at which you would either consider taking action or you would want to see the Fed take action?

And secondly, why do you believe that the budget bill is appropriate legislation for a pathway to citizenship?

THE PRESIDENT:  Well, first of all, I think we need to find pathways to citizenship.  The budget bill is an appropriate way to get around the filibuster to be able to make a judgment as to whether or not they should have a pathway.  That’s for the Parli- — Parliamentarian to decide, though — not for Joe Biden to decide.

Your first ques- — part of the question was?

Q    It was on inflation.  You mentioned unchecked inflation.

THE PRESIDENT:  Yeah.  There’s nobody suggesting there’s unchecked inflation on the way — no serious economist.  That’s totally different. 

I mean, look, the stock market is higher than it has been in all of history, even went down this month — even down this month.

Now, I don’t look at the stock market as a means by which to judge the economy like my predecessor did.  But he’d be very — he’d be talking to you every day for the last five months about how the stock market is so high — higher than any time in history, still higher than any time in history.

So, that’s not how I judge whether or not we have economic growth.
Q    Mr. President, on China and cyber hacking —

THE PRESIDENT:  She jumps up before you do.  (Laughter.)

Q    Effectively, your administration is naming and shaming China, but no sanctions.  Why?  And is that effective enough?

THE PRESIDENT:  They’re still determining exactly what happened.  The investigation is not finished. 

Thank you all very much.

Q    On China real quick — on China real quick: What is your understanding of the biggest difference between what they’ve done versus what Russia has done in terms of cyber hacking?

THE PRESIDENT:  That’d take a longer explanation.

Q    We have all the time in the world.  What is it?

THE PRESIDENT:  No, we don’t.  I have to go see the King of Jordan. 

Look, to the best of my knowledge — and I’m getting a report tomorrow morning on this, a detailed report — my understanding is that the Chinese government, not unlike the Russian government, is not doing this themselves, but are protecting those who are doing it and maybe even accommodating them being able to do it.  That may be the difference. 

Thank you.

Q    Should the Olympics go forward, Mr. President?

THE PRESIDENT:  They are.

12:02 P.M. EDT

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Fed Considers Tapering Bond Purchases as Economy Grows – The New York Times

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Federal Reserve officials are gathering in Washington this week with monetary policy still set to emergency mode, even as the economy rebounds and inflation accelerates.

Economists expect the central bank’s postmeeting statement at 2 p.m. Wednesday to leave policy unchanged, but investors will keenly watch a subsequent news conference with the Fed chair, Jerome H. Powell, for any hints at when — and how — officials might begin to pull back their economic support.

That’s because Fed policymakers are debating their plans for future “tapering,” the widely used term for slowing down monthly purchases of government-backed debt. The bond purchases are meant to keep money chugging through the economy by encouraging lending and spending, and slowing them would be the first step in moving policy toward a more normal setting.

Big and often conflicting considerations loom over the taper debate. Inflation has picked up more sharply than many Fed officials expected. Those price pressures are expected to fade, but the risk that they will linger is a source of discomfort, ramping up the urgency to create some sort of exit plan. At the same time, the job market is far from healed, and the surging Delta coronavirus variant means that the pandemic remains a real risk. Policy missteps could prove costly.

The Fed’s balance sheet has grown, thanks to bond-buying.

The Federal Reserve has swollen its balance sheet by buying bonds to bolster the economy during the pandemic, making it a bigger player in markets.

Source: Federal Reserve

By The New York Times

Here are a few key things to know about the bond-buying, and key details that Wall Street will be watching:

  • The Fed is buying $120 billion in government backed bonds each month — $80 billion in Treasury debt and $40 billion in mortgage-backed securities.

  • Economists mostly expect the central bank to announce plans to slow those purchases this year, perhaps as soon as August, before actually dialing them back late this year or early next. That slowdown is what Wall Street refers to as a “taper.”

  • There’s a hot debate among policymakers about how that taper should play out. Some officials think the Fed should slow mortgage debt buying first because the housing market is booming. Others have said mortgage security buying has little special effect on the housing market. They have hinted or said they would favor tapering both types of purchases at the same speed.

  • The Fed is moving cautiously, and for a reason: Back in 2013, markets convulsed when investors realized that a similar bond-buying program after the financial crisis would slow soon. Mr. Powell and crew do not want to stage a rerun.

  • Bond-buying is just one of the Fed’s policy tools, and is used to lower longer-term interest rates and to get money chugging around the economy. The Fed also sets a policy interest rate, the federal funds rate, to keep borrowing costs low. It has been near zero since March 2020.

  • Central bankers have been clear that tapering off bond purchases is the first step toward moving policy away from an emergency setting. Increases in the funds rate remain off in the distant future.

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IMF warns of growing poverty, unrest and geopolitical tensions – Al Jazeera English

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The global economic recovery continues, but with a widening gap between advanced economies and many emerging market and developing economies thanks to vaccine inequity and a lack of fiscal support, the International Monetary Fund (IMF) warned on Tuesday

While the latest update to the IMF’s World Economic Outlook sees the global economy still growing 6 percent this year – unchanged from its April estimate – Chief Economist Gita Gopinath noted that the composition of the recovery continues to change.

“The recovery is not assured until the pandemic is beaten back globally,” Gopinath told reporters during a virtual press conference as she presented the latest outlook titled Fault Lines Widen in the Global Economy.

The IMF sees global growth decelerating to 4.9 percent next year. Advanced economies are expected to achieve 4.4 percent growth in 2022 – down from 5.6 percent in 2021 – while growth in emerging and developing economies is seen slowing to 5.2 percent in 2022 from an expected rebound 6.3 percent in 2021.

Rich, emerging and developing nations all took an economic beating last year when the coronavirus pandemic forced governments to close borders, shut businesses and idle manufacturing hubs worldwide.

As countries rolled back COVID restrictions this year, growth forecasts jumped as people emerged from lockdowns and unleashed pent-up demand for products and services. That demand surge though is expected to moderate next year.

Developed economies armed and shielded with a healthy supply of COVID-19 vaccines and fiscal firepower have managed to open up businesses and resume operations. But the emergence of new COVID variants and infection spikes laces uncertainty into the recovery path.

Growth in the US, the world’s largest economy, is seen slowing to 4.9 percent in 2022 after a bounce back of 7.0 percent expected this year. Europe is also expected to slow to 4.3 percent in 2022 from 4.6 in 2021.

A man displays a sign which reads ‘Bolsonaro vaccine thief’ during a protest against Brazil’s President Jair Bolsonaro in Sao Paulo, Brazil [File: Carla Carniel/Reuters]

Growth in the Middle East and Central Asia is expected to decelerate to 3.7 percent next year from 4.0 in 2021, while emerging and developing Asian economies are expected to dip more than a point from 7.5 in 2021 to 6.4 in 2022.

Latin America and the Caribbean are forecast to experience the sharpest fall from 5.8 percent in 2021 to 3.2 in 2022 after plummeting 7.0 in 2020.

Sub-Saharan Africa is the only region that is expected to see growth climb – from 3.4 in 2021 to 4.1 percent in 2022.

Vaccines & trillions in fiscal support

Vaccine inequality is seen as a chief driver of the widening gulf between recoveries in developed and less developed economies.

Close to 40 percent of people in advanced economies have been fully vaccinated compared with only 11 percent in emerging market economies and a tiny fraction in low-income developing countries.

Fresh waves of COVID-19 cases this year, notably in India are a major source of the deepening inequality between rich and poor nations.

“The emergence of highly infectious virus variants could derail the recovery and wipe out four and a half trillion dollars cumulatively from global GDP by 2025,” Gopinath warned.

Detroit residents sit in the waiting area after receiving their first dose of the COVID-19 vaccine at a pop-up vaccination clinic in Detroit, Michigan, US [File: Emily Elconin/Reuters]

To make matters worse, poor countries and even emerging markets lack access to the funds necessary to jolt economies back to health. Advanced economies, on the other hand, passed $4.6 trillion in fiscal support for 2021 and beyond. In developing economies, most measures expired last year.

And some emerging markets like Brazil, Hungary, Mexico, Russia and Turkey have also started raising interest rates to contain soaring inflation triggered by supply chain bottlenecks as economies reopen. Higher interest rates cool economic growth.

“A worsening pandemic and tightening financial conditions would inflict a double blow to emerging markets and developing economies and severely set back their recoveries,” Gopinath warned.

Inflation & action

A significant portion of the “abnormally high inflation” readings is transitory, resulting from the pandemic’s hit to vital parts of the economy such as travel and hospitality, and from a comparison with last year’s abnormally low readings, Gopinath said.

The IMF forecasts inflation to remain elevated next year. In emerging markets and developing economies food price pressures and currency depreciation will continue to create yet another worrying disparity in economic recovery.

Major central banks must clearly communicate their outlook for monetary policy and ensure that inflation fears do not trigger rapid tightening of financial conditions, the IMF stressed.

A police officer stands guard in front of protesters as the country deploys army to quell unrest in Vosloorus, South Africa [File: Siphiwe Sibeko/Reuters]

The Fund’s proposal to end the pandemic, endorsed by the World Health Organization, the World Bank, and the World Trade Organization, sets a goal of vaccinating at least 40 percent of all people in every country by the end of 2021 and 60 percent by the middle of 2022.

The IMF urges at least 1 billion vaccine doses to be shared in 2021 by countries with more than enough of them and calls on manufacturers to prioritise deliveries to low and lower-middle-income countries.

The fund said its allocation of some $650bn worth of its reserve currency, known as Special Drawing Rights, should be completed quickly to help countries in need fund their spending needs. Greater action is also needed to ensure the G-20 successfully delivers on debt restructuring for countries where debt has ballooned and become unsustainable, said the IMF.

Gopinath further urged countries to focus more on reducing carbon emissions and slowing the rise in global temperatures to avoid yet another human and financial catastrophe. As it stands now, only 18 percent of recovery spending has been on low carbon activities.

“Concerted policy actions…can make the difference between a future where all economies experience durable recoveries or one where divergences intensify, the poor get poorer and social unrest and geopolitical tensions grow,” she said.

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UPS CEO says U.S. deliveries slowed down last quarter as economy reopened – CNBC

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In this article

United Parcel Service CEO Carol Tome on Tuesday defended her company’s long-term strategy after shares tumbled, despite beating estimates in its report from the second quarter.

UPS stock dropped nearly 7% after the company showed there was a slowdown in domestic deliveries in the three-month period, leading it to miss U.S. revenue forecasts.

Tome said on CNBC that it was no surprise to the shipping company that the average daily domestic volume in the U.S. was down slightly from a year ago.

“There’s been a permanent shift in how consumers are shopping and e-commerce sales are booming, but the rate of growth is not the same as it was last year when everyone was sheltering in place,” she told Jim Cramer in a “Mad Money” interview. “We realized that when the economy started to open and stores reopened, consumers would go back into their stores and we saw it happen.”

U.S. deliveries in the second quarter declined by 3% and ground packaged volume fell 4% from a year ago. Revenue per package, however, rose by 13% on U.S. deliveries and was even higher overall. UPS saw strength in foreign markets.

Tome, who began leading the $170 billion company in June 2020, said UPS predicted a slowdown in U.S. shipments after SurePost, its residential ground service, drove 53% of total U.S. volume last year.

While Tome expects the company’s operating margins to ease in the second half of 2021, she told Cramer that this is a seasonal trend for UPS. Operating margin is the percentage of revenue left over after considering costs of goods sold and other expenses.

By 2023, the company expects to reach $102 billion in revenues — up 20% from 2020 — and an operating margin of 12% in the U.S., she said.

“We’re projecting volume will increase in the back half of the year, not as much as what we saw in the first half because of the year over year comparisons, but volume’s going to grow,” Tome said.

“But this isn’t about a second-half performance, this is about where we’re taking the company long term.”

Shares of UPS closed Tuesday’s session at $195.19, up nearly 16% on the year.

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