The US is leaving economic growth on the table by failing to close gender gaps in pay and hiring, Moody’s says

DC apartment concierge coronavirus
elecia Lewis, 50, works at a computer behind the desk where she works as a concierge at an apartment building in Chevy Chase, MD.

  • Failure to close gender gaps in the US dampens growth and hurts recovery, Moody’s said Monday.
  • The pandemic erased years of progress for prime working-age women participating in the labor force.
  • Closing the labor-participation gap between men and women can lift GDP by 5%, according to the IMF.
  • Visit the Business section of Insider for more stories.

Closing gender gaps in the US labor market can accelerate the economic recovery and provide a lasting boost to overall output, Moody’s Investors Service said Monday.

Gender disparities are nothing new to the US economy. Women earned less than men on average before the pandemic, and, during it, a lack of family-leave benefits forced many women out of the labor force as they assumed caretaking roles.

The gaps weighed on productivity before the pandemic, and the health crisis has only exacerbated the problems, the team led by Shahdiya Kureshi said.

For one, pursuing gender equality can swiftly lift gross domestic product. Closing the labor-participation gap by just 25% in the US would increase output by 2%, according to the International Labor Organization. Fully erasing the disparity would boost GDP by 5%, the International Monetary Fund estimated.

The recovery so far hasn’t been promising. Employment gains for both men and women were roughly the same from May 2020 to January 2021. Yet where men have retraced more than half of their decline in labor-force participation, women have only recovered 40% of their slump. This difference “weakened household consumption and financial stability” late in the pandemic, Moody’s said.

Within the prime working-age population of Americans 25 to 54 years old, labor-force participation among women plummeted and reversed years of steady gains. The rate peaked at 76.9% in January 2020 before plummeting as low as 73.5%.

The rate stood at roughly 75.5% at the start of 2021, the same level seen in January 2018.

One driving factor behind the harsher fallout is women’s overrepresentation in sectors hit hardest by the pandemic. Pay in the food preparation, personal care, sales, and education industries – where women make up the majority of workers – is between 18% and 40% below the average median weekly earnings for women. These sectors also saw significant pay disparities between men and women, according to government data cited by Moody’s.

Mothers have also shouldered a heavier burden through the health crisis. Women aged between 24 and 44 who weren’t employed in July 2020 were nearly three times more likely than men to name childcare responsibilities for their lack of work, according to Census Bureau data.

Where Congress can step in

There are already a few clear steps policymakers can take to close the aforementioned gaps, Moody’s said. Passing national family- and maternity-leave policies can iron out differences seen across various state programs, the team said.

“As women assume most of the family caretaking role, dependent care responsibilities that are not subsidized or compensated can pose a significant barrier for women’s entry into the workforce,” they added.

Childcare costs have also surged in recent years, making the lack of sufficient leave policies even more taxing for women. Married couples with children under age 5 spend 10% of their average monthly income on care for a single child. That sum exceeds the 7% level deemed affordable by the Health and Human Services Department, Moody’s said.

There’s also legislation that can quickly narrow the gender pay gap. The Paycheck Fairness Act has recently been reintroduced and aims to improve pay transparency at companies. Taking up such legislation and other pay-equity measures can elevate women in the workplace, improve employee retention, and productivity, Moody’s said.

Some promising legislation is on the brink of passage. The $1.9 trillion stimulus bill likely to be passed on Wednesday includes a child tax credit for parents to receive up to $3,600 per child. President Joe Biden has indicated he aims to make such a credit permanent. That would revolutionize how the government assists parents and could counter the pressures women feel to pass up work for caretaking.

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The coronavirus recession is almost over, Wall Street strategists say

Wall Street Coronavirus
New York Stock Exchange.

  • Wall Street strategists are increasingly optimistic that the pandemic is in its final phase.
  • JPMorgan said in February the crisis will “effectively end” in 40 to 70 days.
  • The “recession is effectively over,” Morgan Stanley said Sunday.
  • Visit the Business section of Insider for more stories.

One year after the S&P 500 tumbled nearly 8% on COVID-19 fears, experts on Wall Street see the US bearing down on the finish line of the pandemic.

Declining case counts, vaccine rollouts, and expectations for new stimulus have lifted spirits in recent weeks. Economists have upgraded growth forecasts and investors continue to shift cash from defensive investments to riskier assets more likely to outperform during a rebound. Major banks’ strategists are taking it one step further.

The rapidly improving backdrop and “spectacular” profit growth in the fourth quarter signal “the recession is effectively over,” Michael Wilson, chief investment officer at Morgan Stanley, said Sunday.

“At the current pace of vaccinations and with spring weather right around the corner, several health experts are talking about herd immunity by April,” he said in a note. “It’s hard not to imagine an economy that’s on fire later this year.”

JPMorgan made a similarly bullish claim late last month, telling clients it doesn’t expect new COVID-19 strains to dent its positive outlook. The spread of new variants is still overshadowed by the broader decline in cases, the team led by Marko Kolanovic, chief global markets strategist at JPMorgan, said.

The rate of vaccination implies the pandemic will “effectively end” in the next 40 to 70 days, they added.

To be sure, there’s plenty of progress to make before the pandemic is no longer a public health threat. The US reported 98,513 new COVID-19 cases on Monday, lifting the seven-day moving average to 64,722, according to The New York Times.

And while the country is averaging 2.17 million vaccine administrations per day, reaching herd immunity at the current rate would still take roughly six months, according to Bloomberg data, which gauges how quickly the US can vaccinate 75% of its population.

Herd immunity is widely considered the most effective way to defeat COVID-19. Yet Wall Street’s more bullish forecasts suggest a mix of vaccinations and continued precautions could crush the virus in a matter of weeks.

Officials have warned that, while accelerated growth is on the horizon, there’s work to be done before the US stages a complete recovery. Reopening and new stimulus may fuel a sharp increase in inflation, but such a jump will likely be short-lived and fail to meet the Federal Reserve’s target, Fed chair Jerome Powell said Thursday.

The labor market also has “a lot of ground to cover” before reaching the central bank’s goal of maximum employment, Powell added. The chair indicated that, along with a lower unemployment rate, the Fed would need to see improved wage growth and labor-force participation before tightening ultra-easy monetary conditions.

Others are more optimistic. Treasury Secretary Janet Yellen said Monday that the $1.9 stimulus package nearing a final House vote can “fuel a very strong economic recovery.”

“I’m anticipating, if all goes well, that our economy will be back to full employment – where we were before the pandemic – next year,” Yellen said in an interview with MSNBC.

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US economy adds 379,000 payrolls in February, smashing forecasts as virus cases tumble

Fishing store
  • The US added 379,000 jobs in February, beating the consensus estimate of 200,000 additions.
  • The reading marked a second straight month of labor-market expansion and an increase from January.
  • The unemployment rate dropped to 6.2% from 6.3%, putting it lower than forecasts.
  • Visit the Business section of Insider for more stories.

The US labor-market recovery accelerated in February as daily COVID-19 cases swiftly declined and the pace of vaccinations improved.

Businesses added 379,000 payrolls last month, the Bureau of Labor Statistics announced Friday. Economists surveyed by Bloomberg expected a gain of 200,000 payrolls.

The increase follows a revised 166,000-payroll jump in January. The labor market has now grown for two straight months after contracting in December as virus cases surged.

The US unemployment rate fell to 6.2% from 6.3%, according to the government report. Economists expected the rate to stay steady at 6.3%. The U-6 unemployment rate – which includes workers marginally attached to the labor force and those employed part-time for economic reasons – remained at 11.1%.

The labor-force participation was also unchanged at 61.4%. A falling participation rate can drag the benchmark U-3 unemployment rate lower, but such declines signal deep scarring in the labor market.

The bigger picture

Jobless-claims data and private-payrolls reports offer some detail as to how the labor market fared through February, but the BLS release paints the clearest picture yet as to how the coronavirus pandemic has affected workers and the unemployed.

Roughly 13.3 million Americans cited the pandemic as the main reason their employer stopped operations. That’s down from 14.8 million people in January.

The number of people saying COVID-19 was the primary reason they didn’t seek employment dropped to 4.2 million from 4.7 million.

About 22.7% of Americans said they telecommuted because of the health crisis. That compares with 23.2% in January.

Roughly 2.2 million Americans said their job loss was temporary, down from 2.7 million the month prior. The number of temporary layoffs peaked at 18 million in April, and while the sum has declined significantly, it still sits well above levels seen before the pandemic.

Filling the hole

The Friday reading affirms that while the economy is far from fully recovered, the pace of improvement is picking up, most likely tied to the steady decline in daily new COVID-19 cases. The US reported 54,349 new cases on the last day of February, down from the January peak of 295,121 cases. Hospitalizations and daily virus deaths have similarly tumbled from their early-2021 highs, according to The COVID Tracking Project.

All the while, the country has ramped up the distribution and administration of coronavirus vaccines. The US has administered more than 82.6 million doses, according to Bloomberg data. The average daily pace of vaccinations climbed above 2 million on Wednesday and has held the level. At the current rate, inoculating three-quarters of the US population would take roughly six months, but the Biden administration has a rosier outlook.

The president on Tuesday announced the US would have enough vaccine doses for every adult by the end of May. While distributing the shots will most likely last beyond May, the new timeline marks a two-month improvement to the administration’s previous forecast.

Still, other data tracking the labor market points to a sluggish rebound. Initial jobless claims totaled 745,000 last week, according to Labor Department data published Thursday. That was below the median economist estimate of 750,000 claims but a slight increase from the previous week’s revised sum of 736,000. Weekly claims counts have hovered in the same territory since the fall as lingering economic restrictions hinder stronger job growth.

Continuing claims, which track Americans receiving unemployment benefits, fell to 4.3 million for the week that ended February 20. The reading landed in line with economist projections.

Other corners of the economy are faring much better amid the warmer weather and falling case counts. Retail sales grew 5.3% in January, trouncing the 1% growth estimate from surveyed economists. The strong increase suggests the stimulus passed at the end of 2020 efficiently lifted consumer spending in a matter of weeks.

All signs point to another fiscal boost being approved over the next few days. Senate Democrats voted to advance their $1.9 trillion stimulus plan on Thursday, kicking off a period of debate before a final floor vote. President Joe Biden has said he wants to sign the bill before expanded unemployment benefits lapse March 14. The new package includes $1,400 direct payments, a $400 supplement to federal unemployment insurance, and aid for state and local governments.

The bill isn’t yet a done deal. Sen. Ron Johnson of Wisconsin forced a reading of the entire 628-page bill on Thursday, as Republicans seek to at least drag out its passage into law. Not a single Republican senator voted to advance the bill Thursday.

A process known as “vote-a-rama” will start after the 20 hours of debate and give Republicans the chance to further impede a final vote by introducing potentially hundreds of amendments to the bill.

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Wall Street is beginning to say stimulus probably won’t spark dangerous inflation

US Capitol
  • Republicans argue Biden’s stimulus plan will fuel runaway inflation. Wall Street isn’t so concerned.
  • Economists at major banks see new aid only modestly lifting inflation while aiding the US recovery.
  • Here’s how UBS, BofA, Goldman Sachs, and Deutsche Bank see stimulus affecting inflation in 2021 and beyond.
  • Visit the Business section of Insider for more stories.

The debate around passing President Joe Biden’s $1.9 trillion aid proposal is a simple one.

Democrats argue the hole in the economy is so big that it warrants spending nearly $2 trillion, on top of the $3 trillion spent last March and the $900 billion spent late in Trump’s term. Republicans point to all the relief the government has already provided, and say the economy can recover with a much smaller boost. If you overdo it, they say, spending so much could take inflation to worrisome levels.

But there’s a third player in the debate: the Wall Street investment banks that are crunching the math. And they are increasingly saying the concerns about runaway inflation are misplaced.

For weeks, economists at major banks had sat on the sidelines, vaguely saying another package would achieve its intended goal of accelerating growth. Now that Democrats are charging forward with Biden’s large-scale plan and likely to pass the bill by mid-March, Wall Street’s take probably won’t make Republicans too happy.

Every big bank has its own forecast, models, and team of experienced economists, and many are arriving at the same conclusion: the benefits of the Biden plan overshadow the risks. After a decade of weak inflation and a currently stagnant economic recovery, Wall Street is cheering on efforts to supercharge the economy with a massive shot in the arm.

Here’s what four banks have to say about new stimulus and what inflation may come of it.

(Spoiler: not very much)

Bank of America: ‘A difficult balance, but so far highly successful’

Investors haven’t been thrown by the inflationary concerns surrounding stimulus. Stocks – which have historically sold off when consumer prices have overheated – sit near record highs. Investors are also continuing to rotate into downtrodden companies set to bounce back as the economy reopens, signaling they’re more focused on profit-growth upside than potential inflation headwinds.

Michelle Meyer, the head of US economics at Bank of America, puts its succinctly, saying the market is “painting a story of optimism.”

“Market participants are looking for stronger economic growth to push up inflation but not trigger Fed tightening too quickly,” the team said in a Friday note. “It is a difficult balance, but so far highly successful.”

The firm forecasts gross domestic product growth of 6% in 2021 and another 4.5% next year. This kind of expansion would fill the hole in the economy by the end of 2022, and additional stimulus would further accelerate growth, the economists said.

The question isn’t whether the economy will overheat, but by how much, they added. The output gap – the difference between actual GDP and maximum potential GDP – is projected to reach its greatest surplus since 1973 if Biden passes his proposal, according to the bank.

Still, with the Federal Reserve actively pursuing above-2% inflation for a period of time, the hole in the economy likely needs to be overfilled before there’s a return to stable growth, the note said.

UBS: ‘Rising only gradually’

The White House’s package might exceed what’s necessary but the effect on inflation “likely will be small,” UBS economists led by Alan Detmeister said in a Wednesday note to clients.

The bank’s rough estimate sees the proposal prompting about 0.5 points more inflation compared to a scenario where no additional aid is approved.

Price growth is expected to rise “only gradually” after “modest” inflation in the first half of 2021, the team said. Core personal consumption expenditures – the Fed’s preferred gauge of inflation – will rise to 1.8% in 2022 and to 1.9% the following year, still trending below the central bank’s goal. Inflation is likely to overshoot 2% beyond 2023 if the economy can strengthen further, UBS said.

The forecast doesn’t yet account for the currently proposed stimulus measure, but the package “poses a small upside risk” and probably won’t lead inflation to reach 2% any sooner, the economists added.

Goldman Sachs: ‘Models currently understate slack’

Economists led by Jan Hatzius took a different approach, focusing on models measuring the output gap instead of inflation expectations. The metric hinges on maximum potential GDP estimates published by the Congressional Budget Office, but those estimates change over time as the US economy evolves.

History suggests the CBO’s calculations are flawed and “currently understate slack” in the US economy, Goldman’s economists said Wednesday. The team alleged the office’s model suffers from endpoint bias, meaning it interprets short-term changes as a reversal of a long-term trend.

Economists don’t need to look too far back to find other examples of this, according to the bank. The CBO’s estimate of potential GDP was consistently revised lower from 2009 to 2017 when actual GDP lagged the maximum potential. Revisions then turned positive in 2018, when actual GDP exceeded the estimated maximum. The CBO reinterpreted what first seemed to be an overheating to later be a catching-up toward full potential, the economists said.

“Both on the way down and on the way up, actual GDP was therefore a leading indicator for estimated potential GDP, indicative of endpoint bias,” they added.

Overall, Goldman projects the output gap to currently be more than twice the size of the CBO’s estimate, backing the bank’s view that “inflation risk remains limited,” even with its above-consensus growth estimates. The CBO’s model is also hard to square with inflation over the past decade, Goldman said, as price growth has steadily fallen short of the Fed’s target even as the budgetkeeper saw the economy overheating.

Deutsche Bank: ‘An unusual moment in macro history’

A special report on Friday by Deutsche Bank’s Chief International Strategist Alan Ruskin sought to strike a balance. Essentially, he wrote, this coming year will be too soon to tell.

Noting that inflation usually tends to lag growth by as much as two years, Ruskin wrote that inflation fears likely won’t be easily proven wright or wrong in 2021.

“A few soft US inflation numbers will not sound the all clear. A few strong US inflation numbers will however elevate concerns,” he wrote. “There is then some inherent asymmetric skew to how the markets will think about inflation risks going forward.”

Ruskin foresaw building inflation fears for this reason, as his “all clear” on inflation risk will not be reachable. Over the medium term, he added, the “market consequences of a meaningful US inflation acceleration are far greater than if inflation fails to accelerate.”

Zooming out somewhat, Ruskin noted this is “an unusual moment in macro history” where “the ‘stars’ as they relate to inflation fears have aligned” because economists of various traditions, ranging from neo-Keynesians to Monetarists to the Austrian school, all have growing evidence showing more rather than less inflation risk.

These elements include the strongest money supply growth in history; the strongest expected real growth in 70 years; the closing of a large negative output gap, and some of the most accommodative financial conditions on record.

Ruskin wrote: “There is a certain sense of ‘if not now, then when?'”

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US stocks climb amid optimism around Biden’s COVID-19 plan and stimulus push

NYSE traders
  • US stocks gained on Thursday as investors cheered the Biden administration’s plan to better tackle the COVID-19 pandemic.
  • President Joe Biden on Wednesday revealed plans to accelerate testing, vaccine rollouts, and reopenings.
  • Initial jobless claims fell to 900,000 last week, according to the Labor Department. Economists expected claims to total 935,000.
  • Watch major indexes update live here.

US equities rose on Thursday as investors bet on the Biden administration to accelerate the nation’s economic recovery.

President Joe Biden unveiled new plans for how the government will tackle the coronavirus pandemic on Thursday. The president aims to sign 10 executive orders and invoke the Defense Production Act to accelerate testing, vaccine distribution, and reopen schools and businesses.

Efforts to better curb on the virus’s spread are set to join a push for additional fiscal support. The president called for a $1.9 trillion stimulus package earlier in the month that includes $1,400 direct payments, expanded unemployment insurance, and relief for states and municipalities.

Republicans are likely to oppose the measure, having previously balked at passing new aid for governments. Still, expectations for another large-scale spending bill have led analysts to lift growth forecasts and S&P 500 targets.

Here’s where US indexes stood shortly after the 9:30 a.m. ET open on Thursday:

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Tech stocks continued to climb after Netflix’s healthy earnings beat boosted indexes the session prior. Equities hit record highs on Wednesday as Biden’s inauguration amplified hopes for fresh fiscal stimulus and a stronger economic recovery. The jump was the largest Inauguration Day return in nearly a century.

In economic data, weekly filings for unemployment benefits totaled an unadjusted 900,000 last week as the labor market’s recovery continued to push up against elevated COVID-19 cases. Economists surveyed by Bloomberg expected claims to reach 935,000. 

Continuing claims, which track Americans receiving unemployment-insurance payments, fell to 5.1 million for the week that ended January 9. That came in below the median economist estimate of 5.3 million claims.

“Fiscal stimulus prospects, along with broader vaccine diffusion, are pointing to a brightening labor market outlook but with the pandemic still raging, claims are poised to remain elevated in the near-term,” Lydia Boussour, lead US economist at Oxford Economics, said.

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United Airlines sank after its fourth-quarter report missed Wall Street expectations for revenue and profit. The company cautioned that, despite vaccines being distributed nationwide, the pandemic will weigh on travel activity throughout 2021.

Bitcoin slid below the $32,000 support level as sell-offs cut further into the cryptocurrency’s bullish momentum. The token hit a 24-hour low of $31,310.75 before paring some losses.

Gold dipped as much as 0.7%, to $1,858.42 per ounce. The dollar weakened against a basked of Group-of-20 currencies and Treasury yields climbed slightly.

Oil prices fell but remained above the $50 support level. West Texas Intermediate crude dropped as much as 1.1%, to $52.75 per barrel. Brent crude, oil’s international standard, declined 1%, to $55.51 per barrel, at intraday lows.

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Bank of America lifts its forecast for US economic growth on hopes for sweeping Biden-backed stimulus

Joe Biden
President-elect Joe Biden speaks about the US economy following a briefing with economic advisors in Wilmington, Delaware, on November 16, 2020.

  • Bank of America lifted its forecasts for US full-year and first-quarter economic growth, citing hopes for new stimulus under the Biden administration and strong consumer spending trends.
  • The bank’s economists lifted their first-quarter GDP forecast to 4% growth from 1% and boosted their 2021 estimate to 5% from 4.6% expansion.
  • Early indicators suggest the $900 billion relief package signed by President Trump last month is already lifting spending activity, the team said in a note to clients.
  • The $1.9 trillion relief plan revealed by Biden on Thursday can further accelerate a return to pre-pandemic economic strength, they added.
  • Visit Business Insider’s homepage for more stories.

Robust consumer spending and the likelihood of additional stimulus led Bank of America to boost its outlook for US economic growth on Friday.

Economists led by Michelle Meyer expect US gross domestic product to grow 5% through 2021, up from the previous estimate of 4.6%. The bank’s first-quarter GDP forecast was also revised higher, to 4% from 1%.

Early indicators suggest the $900 billion relief package passed by President Trump late last month is already lifting economic activity from its nearly frozen state, the economists said. Debit- and credit-card spending is up nearly 10% from the year-ago period as of January 9, compared to being up just 2% before new stimulus was rolled out.

Additional stimulus from a Biden administration adds to the bank’s bullish forecast. The President-elect revealed a $1.9 trillion relief plan on Thursday, pitching $1,400 direct payments, state and local government aid, and a $15 minimum wage as critical to reviving the virus-slammed economy.

Democrats’ new, albeit slim, majority in the Senate signals a version of the plan will reach Biden’s desk. That extra support stands to provide a major backstop for the economy through the new year, Bank of America said.

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“There are risks in both directions, but we see them skewed to the upside,” the team said in a note to clients. “There is now a ‘fiscal put’ akin to the ‘Fed put.'”

Fresh fiscal relief also takes some pressure off of the Federal Reserve in the near-term, the economists added. Should new stimulus fuel stronger growth and inflation, the Fed could rein in its easy monetary policy stance sooner than initially expected. 

The Biden-backed stimulus also provides the fiscal support Fed policymakers clamored for throughout 2020. If the economy weakens further, the government can coordinate a fiscal- and monetary-policy response akin to that seen at the start of the pandemic, the team said.

Still, elevated COVID-19 cases and strict economic restrictions will delay a full recovery, they added. Bank of America expects GDP will return to pre-pandemic levels in the third quarter.

While front-loaded stimulus boosted the firm’s first-quarter forecast, the early passage of a relief deal cut its second-quarter growth estimate to 5% from 7%.

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Monetary stimulus will remain in place well into economic recovery, Fed Chair Powell says

jerome powell fed mask
  • Federal Reserve Chairman Jerome Powell reiterated Thursday that the central bank is far from tapering its asset purchases or raising interest rates.
  • “Now is not the time to be talking about an exit” from easy monetary policy, the central bank chief said in a virtual discussion.
  • The comments come after various Fed officials suggested that inflation could pick up faster than expected and, in turn, prompt an early rate hike.
  • Powell rebuffed fears of an unexpected policy shift, noting the central bank will notify the public “well in advance” if it is considering changes to its policy stance.
  • Visit Business Insider’s homepage for more stories.

Those worrying the Federal Reserve will prematurely rein in monetary stimulus have little to fear, Fed Chairman Jerome Powell said Thursday.

As COVID-19 vaccines roll out across the country, investors and economists have looked to Fed officials for any hints as to when its extremely accommodative policy stance could reach its conclusion. The central bank is currently buying $120 billion worth of Treasurys and mortgage-backed securities each month to ease market functioning, and its benchmark interest rate remains near zero to encourage borrowing.

An unexpected reversal from such easy monetary conditions risks spooking financial markets and cutting into the country’s bounce-back. Powell emphasized on Thursday that the central bank remains far from adjusting monetary conditions and that markets need not worry about a surprise policy shift.

“Now is not the time to be talking about an exit,” the central bank chief said in a virtual discussion hosted by Princeton University. “I think that is another lesson of the global financial crisis, is be careful not to exit too early. And by the way, try not to talk about exit all the time if you’re not sending that signal.”

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The messaging mirrors past statements from Fed policymakers. Early in the pandemic, Powell told reporters the central bank wasn’t “thinking about thinking about” lifting interest rates. The Federal Open Market Committee noted last month that changes to its policy stance won’t arrive until “substantial forward progress” toward its inflation and employment objectives is made.

Still, recent commentary from some officials has stoked some fears that the Fed could cut down on the pace of its asset purchases sooner than expected. Kansas City Fed President Esther George said Tuesday that inflation could reach the Fed’s target “more quickly than some might expect” if the economy’s hardest hit sectors quickly recover.

A swifter-than-expected rebound could prompt an interest-rate hike as early as mid-2022 Atlanta Fed President Raphael Bostic said Monday. The projection stands in contrast with the FOMC’s general expectation for rates to remain near zero through 2023.

Powell reassured that, when the Fed starts considering a more hawkish stance, messaging will come well before action is taken. Treasury yields responded in kind, with the 10-year yield climbing nearly 4 basis points to 1.127 and the 30-year yield rising about 6 basis points to 1.874.

“We’ll communicate very clearly to the public and we’ll do so, by the way, well in advance of active consideration of beginning a gradual taper of asset purchases,” the Fed chair said.

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US stocks trade mixed as investors weigh $900 billion stimulus package against renewed virus fears

NYSE traders
  • US stocks traded mixed on Tuesday after Congress passed a multitrillion-dollar spending bill that includes $900 billion in new stimulus.
  • The package, which also funds the government through September 30, includes $600 direct payments, $300 in additional federal unemployment benefits, and aid for small businesses. 
  • Investors are weighing the bill’s passage against concerns around a new strain of the coronavirus in the UK.
  • Oil futures fell as investors viewed the new virus variant as a risk to near-term energy demand. West Texas Intermediate crude fell as much as 2.9%, to $46.60 per barrel.
  • Watch major indexes update live here.

US equities edged higher on Tuesday after Congress passed a $2.3 trillion bill that included government funding and a new tranche of stimulus measures.

Lawmakers approved the measure Monday night after months of negotiations over additional fiscal support. The bill, which includes $900 billion in new stimulus, funds the government through September 30. The package also includes $600 direct payments, $300 in additional federal unemployment benefits, and funds for the Paycheck Protection Program.

Here’s where US indexes stood shortly after the 9:30 a.m. ET market open on Tuesday:

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The White House has indicated President Donald Trump will sign the bill. Economists have largely backed additional fiscal support, though the slowed pace of economic recovery and rising COVID-19 cases still present sizeable risks.

“The $900 billion fiscal aid package is months late and will likely fall short of what is needed to prevent a rough winter, but it’s better than nothing,” Gregory Daco, chief US economist at Oxford Economics, said, adding the measure will “partially buffer the current economic slowdown” while vaccines are distributed.

The mixed trading follows a mild decline across indexes on Monday. Stocks fell to start the week amid concerns around a new strain of the coronavirus emerging in the UK. Several European countries implemented travel restrictions on UK visitors.

Fears were somewhat allayed later in the day after public health experts said Pfizer and Moderna’s COVID-19 vaccines are likely effective against the new strain.

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The Nasdaq composite index was lifted by Apple, which extended a late Monday climb following a Reuters report that the iPhone maker aims to produce electric cars by 2024. The news also boosted lidar-sensor producers, as Apple reportedly plans to partner with such firms for its vehicle systems.

Peloton soared after the company inked a deal to buy exercise-equipment company Precor for $420 million. Peloton plans to use Precor’s facilities to boost its manufacturing capacity and cut down on its order backlog.

Bitcoin rose back above $23,000 after plunging the most in nearly a month on Monday. The cryptocurrency faced pressure after the US Treasury proposed rules that would require exchanges to collect information from users who transfer more than $10,000 to a crypto wallet.

Spot gold gained as much as 0.4%, to $1,884.33 per ounce, at intraday highs. The US dollar wavered against a basket of currency peers and Treasury yields dipped.

Oil prices fell amid fears that the new COVID-19 strain will further cut into demand. West Texas Intermediate crude dropped as much as 2.9%, to $46.60 per barrel. Brent crude, oil’s international benchmark, declined 2.7%, to $49.56 per barrel, at intraday lows.

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US stocks dip as stimulus hopes waver and jobless claims hit 11-week high

Worried trader
  • US stocks edged lower on Thursday amid disappointing economic data and slowed stimulus progress.
  • New US weekly jobless claims jumped to an unadjusted 853,000 for the week that ended Saturday, handily exceeding the 725,000 estimate. The reading also marks the highest total in 11 weeks.
  • Democrats and Republicans remain at odds over a new fiscal relief package. The House voted Wednesday night to fund the government for an additional week and buy more time for stimulus negotiations.
  • The US Food and Drug Administration will evaluate Pfizer’s coronavirus vaccine on Thursday and vote on whether its benefits outweigh its risks for use in people at least 16 years old.
  • Watch major indexes update live here.

US stocks fell slightly on Thursday as jobless claims leaped to unexpected highs and Congress hit a new snag in stimulus negotiations.

New filings for unemployment benefits climbed to an unadjusted 853,000 for the week that ended Saturday, the Labor Department said Thursday. Economists surveyed by Bloomberg expected a reading of 725,000 claims. The jump places claims at their highest level in 11 weeks and marks a sharp reversal from the previous week’s revised total of 716,000.

Continuing claims, which track Americans receiving unemployment benefits, jumped to 5.8 million for the week that ended November 28. That similarly came in above economist forecasts and marked the first weekly increase since August.

Here’s where US indexes stood shortly after the 9:30 a.m. ET open on Thursday:

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“The jump in weekly unemployment claims was partially due to a rebound from lower claims during Thanksgiving week, but the trend of more Americans losing jobs is clearly rising over the last month,” Robert Frick, corporate economist at Navy Federal Credit Union, said.

On the stimulus front, Democratic and Republican leaders remain at odds over key elements of their respective proposals. Senate Majority Leader Mitch McConnell offered a package that omitted pandemic-related liability protections for businesses and state and local government aid. House Speaker Nancy Pelosi balked at the proposal, and Senate Minority Leader Chuck Schumer emphasized the need for more state and local relief.

The House voted Wednesday night to fund the government for another week and buy extra time for stimulus talks.

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The tech-heavy Nasdaq composite underperformed peer indexes as Facebook slid lower. The social media giant fell after the US Federal Trade Commission filed lawsuits that could force Facebook to divest Instagram and WhatsApp.

The US Food and Drug Administration convened to evaluate Pfizer’s coronavirus vaccine. A panel will vote on Thursday on whether the benefits of the vaccine outweigh its risks for use in people at least 16 years old.

Airbnb is set to begin trading on Thursday after raising $3.5 billion in its initial public offering. The debut comes after DoorDash shares nearly doubled in the company’s first day of public trading.

Bitcoin fell to a 24-hour low of $18,021.45 before bouncing back above $18,100. The token has steadily trended lower after hitting record highs in early December.

Read more: Morgan Stanley is warning that the stock market’s economic recovery trade may soon be over. Here are 4 strategies they recommend for finding the returns that still exist.

Gold edged as much as 0.4% higher, to $1,847.75 per ounce. The US dollar weakened against a basket of Group-of-20 currencies and Treasury yields fell. 

Oil prices gained on vaccine hopes. West Texas Intermediate crude rose as much as 1.8%, to $46.33 per barrel. Brent crude, oil’s international benchmark, jumped 1.9%, to $49.77 per barrel, at intraday highs.

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Read the original article on Business Insider