Tuesday, October 26News That Matters

Tag: Recession and Depression

Poverty in U.S. Declined Thanks to Government Aid, Census Report Shows

Poverty in U.S. Declined Thanks to Government Aid, Census Report Shows

Business
The share of people living in poverty in the United States fell to a record low last year as an enormous government relief effort helped offset the worst economic contraction since the Great Depression.In the latest and most conclusive evidence that poverty fell because of the aid, the Census Bureau reported on Tuesday that 9.1 percent of Americans were living below the poverty line last year, down from 11.8 percent in 2019. That figure — the lowest since records began in 1967, according to calculations from researchers at Columbia University — is based on a measure that accounts for the impact of government programs. The official measure of poverty, which leaves out some major aid programs, rose to 11.4 percent of the population.The new data will almost surely feed into a debate in Washin...
Retirement: ‘A Struggle for the Millennials’

Retirement: ‘A Struggle for the Millennials’

Business
According to a survey released in December by the TransAmerica Center for Retirement Studies, 15 percent of millennials said they had taken an early withdrawal from a 401(k) or similar plan, compared with 10 percent of Generation X and 4 percent of baby boomers.“It hit me hard. Real hard. I had to dip into savings. I had to dip into my 401(k),” said Matt Burns, an Austin, Texas, resident who was furloughed from his job at a company that produces corporate events.“Those bills, they come like clockwork,” Mr. Burns, 41, said. “I pay $600 a month in child support, and I’m still paying rent and utilities and all.” He estimated that he had drawn down roughly $10,000, first depleting the few thousand dollars he had in savings before using the CARES Act provision to withdraw from his 401(k).Now, h...
Europe’s Summer of Recovery Is More Fragile Than It Looks

Europe’s Summer of Recovery Is More Fragile Than It Looks

Business
ALBUFEIRA, Portugal — Until last week, Raissa Moura and her co-workers at the reception desk of the Pine Cliffs Resort were feeling optimistic that life was returning to normal along Portugal’s southern coast.The previous year, as the pandemic halted travel, they had fretted over the desolation of the usually bustling, 1,300-bed hotel and villa complex. They had suffered layoffs and worked weeks on end inside an eerily quiet lobby processing cancellations. Outside, foxes brazenly wandered the abandoned grounds.But this summer was already shaping up nicely in the Algarve, Portugal’s leading tourist destination. Cases of Covid-19 had dropped so dramatically that Britain had designated Portugal a so-called green country, permitting its citizens to visit without having to quarantine on return....
Inflation Fears Rise as Prices Surge for Lumber, Cars and More

Inflation Fears Rise as Prices Surge for Lumber, Cars and More

Business
Turn on the news, scroll through Facebook, or listen to a White House briefing these days and there’s a good chance you’ll catch the Federal Reserve’s least-favorite word: Inflation. If that bubbling popular concern about prices gets too ingrained in America’s psyche, it could spell trouble for the nation’s central bank.Interest in inflation has jumped this year for both political and practical reasons. Republicans, and even some Democrats, have been warning that the government’s hefty pandemic spending could push inflation higher. And as the economy gains steam, demand is coming back faster than supply. It’s a recipe for bigger price tags for everything from airline tickets to used cars, at least temporarily.The Fed, which Congress has put in charge of controlling inflation, thinks the ju...
Europe’s economy is expected to shrink while the U.S.’s grows.

Europe’s economy is expected to shrink while the U.S.’s grows.

Business
European authorities will release data on Friday that is widely expected to show another economic downturn over the first three months of the year as the still-raging pandemic has prompted governments to extend lockdowns. Coming a day after the United States disclosed that its economy expanded 1.6 percent over the same period — a robust 6.4 percent annualized rate — the expected European contraction presents a contrast of fortunes on opposite sides of the Atlantic.Propelled by dramatic public expenditures to stimulate growth, as well as swift increases in vaccination rates, the United States — the world’s largest economy — expanded rapidly during the first months of 2021. At the same time, the 19 nations that share the euro currency were likely caught in the second part of a so-called doub...
‘A Perfect Positive Storm’: Bonkers Dollars for Big Tech

‘A Perfect Positive Storm’: Bonkers Dollars for Big Tech

Technology
In the Great Recession more than a decade ago, big tech companies hit a rough patch just like everyone else. Now they have become unquestioned winners of the pandemic economy.The combined yearly revenue of Amazon, Apple, Alphabet, Microsoft and Facebook is about $1.2 trillion, according to earnings reported this week, more than 25 percent higher than the figure just as the pandemic started to bite in 2020. In less than a week, those five giants make more in sales than McDonald’s does in a year.The U.S. economy is cranking back from 2020, when it contracted for the first time since the financial crisis. But for the tech giants, the pandemic hit was barely a blip. It’s a fantastic time to be a titan of U.S. technology — as long as you ignore the screaming politicians, the daily headlines abo...
Biden’s Spending Plans Could Start to Tackle Inequality

Biden’s Spending Plans Could Start to Tackle Inequality

Business
The coronavirus pandemic has threatened to rapidly expand yawning gaps between the rich and the poor, throwing lower-earning service workers out of jobs, costing them income, and limiting their ability to build wealth. But by betting on big government spending to pull the economy back from the brink, United States policymakers could limit that fallout.The $1.9 trillion economic aid package President Biden signed into law last month includes a wide range of programs with the potential to help poor and middle-class Americans to supplement lost income and save money. That includes monthly payments to parents, relief for renters and help with student loans.Now, the administration is rolling out additional plans that would go even further, including a $2.3 trillion infrastructure package and ab...
‘We Were Left With Nothing.’ Argentina’s Misery Deepens in the Pandemic.

‘We Were Left With Nothing.’ Argentina’s Misery Deepens in the Pandemic.

Business
Before the pandemic, Carla Huanca and her family were making modest but meaningful improvements to their cramped apartment in the slums of Buenos Aires.She was working as a hairstylist. Her partner was tending bar at a nightclub. Together, they were bringing home about 25,000 pesos ($270) a week — enough to add a second story to their home, creating extra space for their three boys. They were about to plaster the walls.“Then, everything closed,” said Ms. Huanca, 33. “We were left with nothing.”Amid the lockdown, the family needed emergency handouts from the Argentine government to keep food on the table. They resigned themselves to rough walls. They shelled out for wireless internet service to allow their children to manage remote learning.“We have spent all of our savings,” Ms. Huanca sai...
The Biden Administration Is Quietly Keeping Tabs on Inflation

The Biden Administration Is Quietly Keeping Tabs on Inflation

Business
“We think the likeliest outlook over the next several months is for inflation to rise modestly,” two officials at Mr. Biden’s Council of Economic Advisers, Jared Bernstein and Ernie Tedeschi, wrote on Monday in a blog post outlining some of the administration’s thinking. “We will, however, carefully monitor both actual price changes and inflation expectations for any signs of unexpected price pressures that might arise as America leaves the pandemic behind and enters the next economic expansion.”Some Republicans call that posture dangerous. Senator Rick Scott of Florida, the chairman of his party’s campaign arm for the 2022 midterm elections, has called on Mr. Biden and Mr. Powell to present plans to fight inflation now.“The president’s refusal to address this critical issue has a direct n...
After Pandemic, Shrinking Need for Office Space Could Crush Landlords

After Pandemic, Shrinking Need for Office Space Could Crush Landlords

Business
Roughly 17.3 percent of all office space in Manhattan is available for lease, the highest proportion in at least three decades. Asking rents on the island have dropped to just over $74 a square foot, from nearly $82 at the beginning of 2020, according to a recent report by the real estate services company Newmark. Elsewhere, asking rents have largely stayed flat from a year ago, including in Boston and Houston, but have climbed slightly in Chicago.The Japanese clothing brand Uniqlo, whose United States headquarters are in Manhattan’s SoHo neighborhood, recently relocated to another office building nearby, an open layout with tables designed for its work force of 130 people who will come into the office only a few days a week. Many of its office workers will keep working remotely after the ...