U.S. Treasury Secretary Janet Yellen has called for the passing of the $1 trillion bipartisan infrastructure bill, saying it would help reverse wage and racial inequalities and start to mitigate climate change. However, she did say that Congress needs to push ahead with other investments in President Joe Biden’s “American Families Plan,” including increased access to education and child care, a permanently expanded child tax credit, more affordable housing, and healthcare improvements. In other news, while economists say the rate of the nation’s economic recovery has been record-breaking, they also say we shouldn’t expect that for long. In fact, they say it’s already beginning to slow.
Reuters via Yahoo Finance
U.S. Treasury’s Yellen touts infrastructure bill as reducing economic inequality
U.S. Treasury Secretary Janet Yellen on Wednesday traveled to Atlanta to call for passage of the $1 trillion bipartisan infrastructure bill, saying it would help reverse wage and racial inequalities and start to mitigate climate change.
Yellen, in excerpts of remarks to be delivered at the city of Atlanta’s economic development authority, called the bill, now under debate in the U.S. Senate, the largest infrastructure investment since the construction of the interstate highway system began in the 1950s under the Eisenhower administration.
“Funding for transit and road projects that will connect more people to communities that are growing – and bring growth to the communities that aren’t,” she said.
Investments in a half a million electric vehicle charging stations will accelerate a transition to a greener, more resilient economy, she said.
But Yellen added that Congress needs to push ahead with other investments in President Joe Biden’s “American Families Plan,” including increased access to education and child care, a permanently expanded child tax credit, more affordable housing and healthcare improvements.
Democrats plan to pursue these as part of a $3.5 trillion spending package under budget reconciliation rules requiring only a simple majority in the Senate – allowing the party to potentially approve it without Republican support.
Yellen called such investments “just good economic policy,” adding: “My largest concern is not: What are the risks if we make these big investments? It is: What is the cost if we don’t?”
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CNN Business/Lakshman Achuthan and Anirvan Banerji
The speed of the US economic recovery has been record-breaking. But don’t get used to it
Despite the continued optimism about the country reopening, US economic growth is already starting to slow.
Yes, year-over-year comparisons to the catastrophic conditions in the spring of 2020 have been puffing up recent economic growth data. But it’s important to understand that there’s much more to the story from an economic cycle perspective. That’s our conclusion not only from the data we regularly monitor that define economic cycles — like GDP and jobs — but also economic indicators that foresee peaks and troughs in those cycles.
At the bottom of a severe recession, the economy is like a coiled spring that jumps back up in the early part of the recovery. Once it’s almost fully uncoiled, however, its rebound slows.
That’s where we are today. While the economy continues to recover, our work shows that the pace of the recovery is already starting to decelerate. That’s clear from our U.S. Coincident Index, which combines the broad measures of output, employment, income and sales. The latest data shows the US economy’s growth rate — having peaked at almost 20% in March — slowing to 5% in June. Moreover, our analysis anticipates that the economy will keep decelerating in the coming months.
To be clear, a full-blown recession is nowhere in sight. And in the second quarter of 2021, we saw the strongest year-over-year GDP growth in 70 years. But even with the economy on track for full reopening in the months ahead and the jobless rate set to decline, economic growth is already decelerating, as we’re warning publicly for the first time here.
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Fox Business/Talia Kaplan, Maria Bartiromo
JPMorgan CEO on state of economy: ‘We should celebrate growth’
JPMorgan Chase CEO Jamie Dimon argued that “we should celebrate the growth” and explained during an exclusive interview with FOX Business’ Maria Bartiromo why he believes interest rates are still low at a time when the economy is bouncing back from the coronavirus pandemic and its associated lockdowns.
“We should celebrate the fact that we can grow at 6%, 7%, and God knows in the next year,” Dimon told Bartiromo in the interview that aired on “Mornings with Maria” on Wednesday.
Gross domestic product [GDP]– the broadest measure of economic performance – grew at a 6.5% annual rate during the second quarter, according to an advance estimate released last week by the Commerce Department. Analysts surveyed by Refintiv were expecting 8.5% growth. First-quarter GDP was revised down to 6.3% from its previous reading of 6.4%.
The above-trend growth in the second quarter reflected the continued reopening of the U.S. economy and government support via business loans, stimulus checks, and extended unemployment benefits.
The current figures provide a stark contrast from those during the onset of the pandemic.
The U.S. economy shrank at a dizzying 33% annual rate in the April through June quarter last year, which was by far the worse quarterly plunge ever as the viral outbreak shut down businesses, throwing tens of millions out of work and sending unemployment surging to 14.7%, according to the government.
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