What’s happening: The US economy has continued to fall 9.5 million positions since February 2020, putting the central bank under tremendous pressure to continue the stimulus for the foreseeable future. Powell expects this point to hit hard when the Fed announces its latest policy decision this week.
This gives the Fed much more room to keep interest rates lower for longer – and this is what many economists expect it to do.
“They said they were willing to be patient,” Joseph Brusuelas, chief economist at RSM US, told me.
The implementation of President Joe Biden’s $ 1.9 billion relief package could help. Airline said last week that they were canceling the alienation, and the additional unemployment benefits and stimulus controls are expected to boost demand, which will support employment in struggling industries.
“It’s simply not going to happen under this particular legislation,” he said.
The package will not eliminate economic scars. Many jobs in the hospitality, entertainment and retail sector will never return. Researchers at Harvard University found that the number of small businesses still open decreased by 32% compared to January 2020. The Economic Policy Institute, looking at the latest report on the jobs of the Bureau of Labor Statistics, notes that for every 15 unemployed workers, there were only 10 jobs available.
“The bartender will have to learn how to code. The waitress will have to become digitally literate because their job is unlikely to be there in the early post-pandemic economy,” Brusuelas said.
The solution to this problem could be left to Congress and Biden’s government, given the limited instruments available to the Fed. Treasury Secretary Janet Yellen said there would be another bill addressing job creation through infrastructure development [and] by investing in people, in education and training. ‘
Meanwhile, lawmakers will need the Fed to continue supporting – even if inflation problems re-emerge in the financial markets.
Why small grocery stores do not (yet) have toilet paper
If you have recently visited your local independent grocery store, chances are you will still find a shortage of items such as toilet paper, paper towels and cleaning supplies.
Without access to key products, small groceries believe, they lose their customers and face another obstacle as they try to survive against big chains.
This is not a completely new issue. According to Christopher Jones, senior vice president of government relations and advocates at the National Grocery Association, before the pandemic, independent groceries were regularly told that they could not get products or specific items available at large chains.
“What happened during the Covid pandemic is really that this issue has been magnified,” Jones said.
There is no publicly available data that monitors products that are not in stock in small versus large stores. But Burt Flickinger, a supermarket consultant at Strategic Resource Group, said he and his team visit stores across the country every week, and they found in the pandemic that chain stores ‘far’ offer better than independent stores.
Following
Monday: Retail sales in China, industrial production and unemployment rate
Tuesday: US retail sales and industrial production
Friday: Bank of Japan policy decision