Construction of Phuket highway will kick off by 2023: Transport Ministry
EconJan 11. 2021Transport Minister Saksayam Chidchob
By The Nation
The construction of the Muang Mai-Koh Kaew Highway should begin by 2023, Transport Minister Saksayam Chidchob said.
The 22.4-kilometre highway, which is part of the ministry’s project to ease traffic in Phuket, will link Phuket airport with Krabi and Phang Nga.
The design and environmental impact assessment for the highway has been completed, he said, adding that the construction is expected to cost Bt11.5 million, plus Bt11.1 billion for land reclamation.
The Highways Department believes the highway will be ready by 2025.
The Public-Private Partnership Committee has called on state agencies to speed up the development of 18 top-priority mega-projects worth Bt472 billion as part of the government’s efforts to drive the economy this year.
The committee is chaired by Deputy PM Supattanapong Punmeechaow.
Meanwhile, Transport Minister Saksayam Chidchob said the ministry has already asked related agencies like the National Economic and Social Development Council for their opinions on its many projects.
He added that the State Railway of Thailand is expected to call bids for the Tao Poon-Ratburana Purple Line mass transit route in the next quarter.
Gold price is expected to hit a new high this year, with experts predicting it could surpass the Bt30,400 per baht weight it touched in 2020.
MTS Gold chief executive Nattapong Hirunyasiri said the price is currently moving in positive territory as its returns as of January 5 this year were 3 per cent despite the news of Covid-19 vaccines.
In the long term, he expected funds to flow into the gold market due to increasing inflation rate, low-interest rate and US President-elect Joe Biden’s policies and measures to inject cash into the economic system.
“However, the gold price would move at around Bt28,000 per baht weight in the short term due to the baht’s appreciation. Meanwhile, returns on gold this year are expected to be at 25 per cent compared to 30 per cent last year,” he said.
Pawan Navawattanasap, YLG Bullion International chief executive officer, expected gold price to move in positive territory in the long term as SPDR funds had bought back gold at the end of last year.
She said gold price had gained positive sentiment from rising Covid-19 cases and the weakening US dollar, adding that foreign strategists predicted the dollar this year would weaken further.
“We expect gold price to move in positive territory for up to two years as the interest rate is expected to remain at a low level until 2023,” she said.
She added that the price could hit US$2,000 if it can pass the resistance line at $1,965 per ounce.
“Investors who are able to tolerate risks can buy gold when the price drops to $1,921 per ounce and set up stop-loss point at $1,907 per ounce,” she added.
The chief of state think-tank, National Economic and Social Development Council (NESDC), expressed concerns about the impact of the new wave of Covid-19 infections, saying this outbreak may hit the economy harder if steps are not taken in time.
In an exclusive interview with Krungthep Turakij newspaper, NESDC secretary-general Danucha Pichayanan said that though some countries have started mass vaccinations, it will still take a long time for inoculations to arrive in every corner of the world.
And while Thailand waits for vaccines to arrive, the renewed outbreak could worsen and hit the economy hard.
The new round of infections originated in Samut Sakhon province to the west of Bangkok, and spread quickly, forcing authorities to impose restrictions on 28 provinces.
He said if the virus can be contained by early February, then the government will not have to change its economic management plans and should be able to announce relief packages in the next few weeks.
He added that so far, this new outbreak has not had as severe an impact on the economy as the first round of infections did last year. This is because many economic activities have been conducted to some extent, like people moving around and restaurants remaining open, he said.
Also, he added, Thailand is better prepared this time around and has ensured there is adequate supply of face masks, medical equipment and medication.
“Managing the economy in the first six months of this year is being challenged by the new outbreak. We have to contain it and ensure everyone’s safety first before we can drive the economy forward. And if we are successful in containing the outbreak, then we will draw more foreign investment,” he said.
However, he said, apart from Covid-19, there are more risks that need to be managed.
The first is ensuring people keep their jobs and for this we have to help bolster businesses while the economy gradually recovers from the Covid-19 fallout, he said.
The second is high household debt, which currently stands at 83 per cent of the gross domestic product. The country must address both short- and long-term issues related to debt, and ensure people are financially literate.
The third is the appreciation of the baht, which has had an adverse impact on exports. A drop in the import of capital goods and limited overseas investments by Thai corporations have contributed to the strength of the baht. We need to ensure the stronger baht does not disrupt economic recovery, he said.
Another important factor is US President-elect Joe Biden’s policies once he takes over from President Donald Trump on January 20. Thailand has to wait and see which direction Biden’s policies take. For instance, he said, the US-China trade war is expected to continue and Biden may come up with policies that have an impact on Thailand and the global economy.
The government also needs to focus on the low-income group in the first half of 2021 and find ways to boost domestic consumption. Also, he said, the economy will rely on private investment and public spending, such as Bt400 billion in government loans aimed to lift the grassroots economy in the first six months.
“In a move to sustain economic growth, the Government Centre for Economic Situation Administration will also boost foreign direct investment, which we expect will flow into the country in the fourth quarter of the year,” he said.
The country plans to restructure the economy so it has a stronger base for the next four to five years, and in order to do this, investment is required in key industries such as electric vehicles, battery, charging stations, electrical grids and electric systems, sensors and electronics.
If Thailand wants to achieve its aspiration of becoming a medical hub, then it also needs to invest in human capital and develop research centres.
The Board of Investment (BoI) also needs to adapt its strategy so it draws investment from the world’s top five or 10 firms.
Government agencies and BoI have discussed the options of investment incentives and technology transfer, which should draw more investment in the fourth quarter. This will lead to a new industry cluster and a production base in the long-term, he said.
If Thailand manages to effectively contain the spread of the virus, the economy should grow 4 per cent this year, he said, citing NESDC’s forecast.
“The Covid-induced crisis has also created an opportunity for economic restructuring, which can become a springboard for robust future growth,” he added.
The 26 initial public offerings (IPOs) on the Thai stock market last year saw average returns of 48.72 per cent at close of first-day trading, Bangkokbiznews revealed on Friday.
However, seven of the 26 new listings – four on the Stock Exchange of Thailand (SET) and three on the Market for Alternative Investment (MAI) – saw their IPO price drop below the subscription price.
Currently, 12 of the companies have allocated their IPO shares, namely Next Capital (NCAP), Well Graded Engineering (WEG), Dhouse Pattana (DHOUSE), Siam Rajathanee (SO), K&K Superstore Southern (KK), Sirakorn (SK), Micro Leasing (MICRO), Earth Tech Environment (ETC), I&I Group (IIG) Silicon Craft Technology (SICI), Sri Trang Gloves Thailand (STGT), Central Retail Corporation (CRC), NR Instant Produce (NRF) and Yggdrazil Group (YGG).
The top five investors who obtained most IPO shares are as follows:
1. Wichai Wachiraphong: 51.67 million shares from five companies – DHOUSE (5 million shares) MICRO (2.29 million), ETC (18 million), STGT (22.20 million) and NRF (4.18 million)
2. Ratchayut Jeerapornprapa: 28.15 million shares from two companies, – ETC (25.65 million) and DHOUSE (2.5 million)
3. Annop Limprasert: 27.06 million shares from two companies, namely ETC (24 million) and MICRO (3.06 million)
4. Komol Juangroongruangkit: 26.06 million shares from two companies, namely ETC (25 million) and SICT (1.06 million)
5. Sippakorn Kaosa-ard: 23 million ETC shares.
Meanwhile, the top five IPO investors in terms of profit netted more than Bt1.4 billion in total at close of first-day trading.
The top five were Wichai Wachiraphong (Bt602.99 million), Katreeya Beaver (Bt432.53 million), Chawin Tangkaravakoon (Bt141.51 million), Kanes Tangkaravakoon (Bt139.39 million) and Aiyawatt Srivaddhanaprabha (Bt106.29 million).
Exporting the U.S. shale boom has changed oil markets forever
EconJan 10. 2021A Chevron sign in front of a horizontal drilling rig on federal land in Lea County, N.M., on Sept. 10, 2020. MUST CREDIT: Bloomberg photo by Callaghan O’Hare.
By Syndication Washington Post, Bloomberg · Sheela Tobben, Dave Merrill · BUSINESS, US-GLOBAL-MARKETS
Five years ago on New Year’s Eve, the Theo T left the Texas Gulf Coast with the first U.S. shale crude shipment overseas. The oil, gathered from nearby ConocoPhillips wells and sold to trading giant Vitol Group, set sail for Italy just two weeks after lawmakers lifted a long-standing ban on exports.
It was the start of a trade that would reshape global oil markets, shift geopolitical power and upend entire economies.
The shale boom itself has turned the U.S. into the world’s largest oil producer and has moved it ever closer to a long-cherished dream of ending dependence on Middle East oil. But the export boom created an entirely new market, sending crude pulled from the shale fields of Texas, New Mexico and North Dakota to more than 50 countries, with shipments often surpassing those of any OPEC nation aside from Saudi Arabia.
These past five years could very well go down as the best years that U.S. shale oil exporters will ever see. Covid-19 has obliterated global fuel demand and bankrupted more than 40 drillers across America. Exactly how much oil leaves U.S. shores in the coming years will largely depend on how quickly the world can recover from the pandemic and how aggressively politicians work to shift the world away from fossil fuels.
But the global reach of U.S. shale has changed oil markets for good and remains a potent, diplomatic weapon for the U.S.”Opening the shale revolution to the world through the export ban lifting helped shift the global oil market psychology from supply scarcity to abundance,” said Karim Fawaz, director of research and analysis for energy at IHS Markit. “It unshackled the U.S. industry to keep growing past its domestic refining limitations.”
Perhaps no two groups have gained from the export of America’s shale boom more than producers of U.S. oil and the giant commodities merchants who trade it. Wildcatters including billionaire Harold Hamm of Continental Resources Inc. and Scott Sheffield of Pioneer Natural Resources Co. saw their revenues more than double as exports took off. “Today the U.S. has its own petrodollars,” Hamm said in August 2018 as U.S. oil shipments overseas boomed.
Trading giants including Trafigura Group, Vitol, Gunvor Group and Mercuria Energy Group profited from buying cheaper shale oil, shuttling it to the U.S. coast and shipping it to eager buyers in Europe and Asia. Betting that shipments would surge, they expanded their trading desks in the U.S., invested in ports, pipelines and export facilities. By the last week of 2019, exports of American oil had reached nearly 4.5 million barrels a day.
U.S. shale’s gain was OPEC’s loss. As shale oil flooded the market, OPEC was forced to cede market share. The U.S., which had been one of OPEC’s biggest customers, has cut its monthly imports by about 50% since mid-2006. Recently, Saudi Arabian cargoes to the U.S. fell to zero for the first time since at least 2010.
Exports have turned U.S. shale into a permanent thorn in OPEC’s side. The oil cartel has had to join forces with Russia, Mexico and other major producers to ratchet back production several times in the past five years while U.S. shale expanded its reach into key markets.
Shale now shares the fortunes – and the misfortunes – of being a major exporter. The strongest evidence of this yet came in March when U.S. President Donald Trump joined leaders of the world’s largest oil-producing nations to hammer out an unprecedented accord to save oil markets from total collapse as the pandemic slashed demand.
The U.S.’s shrinking dependence on foreign imports has also allowed the Trump administration to impose increasingly debilitating sanctions on two OPEC founding members – Venezuela and Iran – without fear of higher fuel prices back home. And with American shale now readily available in global markets, oil price spikes tied to conflicts in the Middle East are shorter and more subdued.
“The flow of U.S. oil since the ban’s end has kept global oil supply in balance even at times when politics have caused the loss of supply from Iran, Venezuela and Libya,” said Sandy Fielden, director of oil research at Morningstar Inc.
How long the U.S. can maintain this clout on global oil markets remains to be seen.
One bullish sign for U.S. oil exports: China’s appetite for crude has come back with a vengeance since the country emerged from lockdowns. That has helped draw down American oil inventories as U.S. cargoes start hitting the water once again, reaching 3.6 million barrels a day in the week of Christmas.
There is no other country that will dictate the fate of U.S. oil exports more than China. About two years after U.S. lawmakers lifted the export ban, shipments to China reached 2 million barrels a day, making it by far the largest buyer of American oil. The Asian nation’s appetite for crude has rebounded since it emerged from lockdowns, but Saudi Arabia and Russia remain major suppliers to the country and competition may heat up later this year as OPEC+ restores output.”The Asian market will become more competitive as OPEC+ restores some of its production,” said Shirin Lakhani, a senior oil analyst at Rapidan Energy Group. “For OPEC+ producers, sales into Asia have the best profit margins due to proximity and logistics.”
Demand for U.S. barrels will also depend on how well the global economy fares in the coming years after its deepest recession since World War II. The World Bank forecasts a 4% economic rebound this year, following a 4.3% contraction in 2020, but cautioned there’s an “exceptional level of uncertainty” as the pandemic may reduce potential global growth for a decade. It will take until the end of 2021 for the oil glut left behind by the pandemic to clear as demand will be “lower for longer than expected” when the virus emerged in the spring, the International Energy Agency said in December.
The incoming Biden administration and its plan to completely reshape U.S. energy policy will undoubtedly affect U.S. oil exports. Among the president-elect’s promises on the campaign trail were stronger regulation of the hydraulic fracturing that unleashed the U.S. shale boom, a ban on fracking federal lands and a broader transition away from fossil fuels. Depending on how it’s executed, the ban alone may not significantly affect U.S. oil shipments. It would theoretically only apply to new drilling licenses and affect a fairly limited amount of new oil output, namely in New Mexico.
But that may only prove to be a temporary boon for oil exporters. Joe Biden is among a growing chorus of world leaders pledging to wean their nations off fossil fuels for good. More than 120 countries, including China, the U.K. and Canada, have committed to achieving net-zero emissions over the course of the next three decades. The president-elect himself has pledged to achieve net-zero emissions in the U.S. no later than 2050. Electric transportation lies at the center of virtually every country’s plan to go carbon-neutral.
Annual sales of electric cars around the world – including trucks and buses – reached almost 27 million in 2019 and are set to accelerate in the coming years to a rate of 133 million vehicles a year in the next two decades, according to BloombergNEF estimates. By 2040, around 500 million passenger electric vehicles will be on the road, or roughly one third of the world’s total.But as long as the world moves mostly on fossil fuels, shale will continue to fight for its share of the global market. “The lifting of the export ban and the incredible growth and resilience in domestic shale will keep the U.S. a crucial exporter of American crude oil for the foreseeable future,” Lakhani said.
Return to food protectionism is riling farmers in Argentina
EconJan 10. 2021Alberto Fernandez, then Argentina’s president-elect, leaves from a news conference following a meeting with Andres Manuel Lopez Obrador, Mexico’s president, in Mexico City on Nov. 4, 2019. MUST CREDIT: Bloomberg photo by Alejandro Cegarra.
By Syndication Washington Post, Bloomberg · Jonathan Gilbert · BUSINESS, WORLD, US-GLOBAL-MARKETS, THE-AMERICAS
A ban on corn exports in Argentina is fanning fear among farmers and traders that one of the world’s top food suppliers is returning to an era of brutal meddling in crop markets.
The measure creates yet another driver for surging global grain futures, given Argentina is the third-largest shipper of corn, and stokes concern of an up-tick in food nationalism around the world as the pandemic disrupts trade.
The Argentine government suspended corn shipments through February to force growers to sell to the local livestock industry. The idea is to suppress feed costs and, in turn, prices of beef, pork, chicken, eggs and milk in a country where inflation is forecast to reach 50% this year.
In protest, three of Argentina’s four main farm associations have told members to halt trading between Jan. 11 and Jan. 13, adding to industry unrest as port workers strike over pay. But President Alberto Fernandez is standing firm, saying on radio Wednesday that food prices at home need to be decoupled from export values that are on a tear.
Argentine farmers have grappled with this sort of intervention before and ultimately, they say, it’s counterproductive — curbing investment and planting, and eventually causing shortages. They’re worried about the ban being extended, both in time and to other products like wheat and beef.
That’s because the last time the Peronist party was in power — for a stretch over the previous two decades — exports were restricted by trade barriers, taxes or outright bans. Production dwindled, only bouncing back under Mauricio Macri, the market-oriented president voted out a year ago.
“Pulling back on production is our defense mechanism,” said Luis Garmendia, a farmer in the town of Intendente Alvear, who planted 95 hectares (235 acres) of corn this season.
Since the government announced the export suspension on Dec. 30, Chicago futures have advanced more than 3%, extending gains in the past six months to 43%. Global crop prices are surging as investors turn to commodities amid a weakening dollar; dry South American weather dims supply prospects; and China rebuilds its hog herd that was devastated by African swine fever.
Last month, Russia formalized plans to introduce a wheat-export tax and grains quota in response to President Vladimir Putin’s call to cool food-price inflation.
Argentina’s Agriculture Ministry declined to comment on the possibility of further export limits. To be sure, when the government hiked taxes on shipments days after taking office in late 2019, the increases for grains and beef were less than expected and sales abroad have stayed at Macri-era levels.
But exporters warn that could change swiftly.
“Intervention in transparent markets creates uncertainty among farmers who delay sales and cut back planting,” crop export group Ciara-Cec, whose members include the powerhouses of agricultural trading, said in a statement.
Farmer Garmendia is already considering abandoning wheat planting later in the year.
The agriculture industry has every right to be perturbed after Cristina Kirchner, the former president and foe to farmers who’s now wielding influence as deputy leader, anticipated the president’s remarks on radio by calling last month for “accessible food prices,” said Pablo Adreani, an agribusiness consultant in Buenos Aires.
It’s a balancing act for the government that’s akin to a game of whac-a-mole. President Fernandez and Vice President Kirchner want to rein in inflation that has stayed above 35% for more than two years to help their base of poorer people. But food protectionism jeopardizes the farm-export dollars that Argentina desperately needs for currency and economic stability.
The leadership duo also knows the stakes of getting into a fight with farmers after widespread protests in 2008 over a move to hike taxes rattled Kirchner’s government. Alberto Fernandez was cabinet chief at the time.
In any case, it’s unclear whether the protectionist measures will work as a tool to stem food inflation, said Abdolreza Abbassian, a senior economist at the United Nation’s Food and Agriculture Organization.
Under Fernandez, Argentina had already been meddling in agriculture markets, tweaking soybean taxes to try to boost exports; fiddling with wheat values to squeeze tax revenues higher; and capping beef prices.
As things stand, Argentine grain and cattle markets aren’t facing anything like the heavy-handed intervention of the Kirchner period. But should there be a repeat scenario, global crop traders will take note because farmers would respond by ditching rotation strategies in favor of soy mono-culture, said Eugenio Irazuegui, head of research at grains brokerage Enrique Zeni in Rosario.
Even under Kirchner, soybeans were exported freely because they have little impact on domestic food prices given soy isn’t a staple in Argentina, and shipments of the oilseed provide an indispensable gush of tax revenue.
Expectations for more soy planting in Argentina, which is the world’s biggest exporter of processed soy meal used as hog feed, could cap a rally for the tight global meal market.
EconJan 09. 2021A Wall Street street sign in front of the New York Stock Exchange in New York on Jan. 4, 2021. MUST CREDIT: Bloomberg photo by Michael Nagle.
By Syndication Washington Post, Bloomberg · Rita Nazareth · BUSINESS, US-GLOBAL-MARKETS
Stocks climbed to all-time highs after President-elect Joe Biden said he’ll lay out the details of trillions of dollars in further aid to revive the world’s largest economy.
The S&P 500 notched its fourth straight day of gains, led by retailers and real-estate companies. The Nasdaq 100 outperformed, with Tesla Inc. surging for an 11th consecutive session. Meanwhile, the KBW Bank Index halted a rally that drove the gauge up more than 10% in three days. Miners joined a sell-off in gold and silver.
In a week marked by a siege of the U.S. Capitol and Democratic sweep of Congress, all major equity benchmarks notched records as investors focused on the prospect for more fiscal aid. Biden made the call for new assistance — including $2,000 stimulus checks — after a dismal December jobs report. The 140,000 slump in payrolls highlighted how surging coronavirus infections are taking a greater toll on parts of the economy.
House Speaker Nancy Pelosi, D-Calif., said the nation’s top military officer assured her safeguards are in place in case President Donald Trump seeks to initiate a nuclear strike — something he has the sole authority to do. Pelosi and Senate Minority Leader Charles Schumer, D-N.Y., are calling on Vice President Mike Pence to invoke the 25th Amendment to have the cabinet remove Trump from office over his encouragement of the mob that stormed the U.S. Capitol on Wednesday.
Meanwhile, Federal Reserve Vice Chair Richard Clarida said he doesn’t expect the central bank to begin tapering its asset purchases this year despite an expected strengthening of the economy as the pandemic fades. A few policymakers, including Chicago Fed President Charles Evans and Atlanta’s Raphael Bostic, said this week they might support reducing the pace of buying by year-end if the economy bounces back strongly enough.
These are some of the main moves in markets:
Stocks
– The S&P 500 gained 0.6% as of 4 p.m. EST.
– The Stoxx Europe 600 Index advanced 0.7%.
– The MSCI Asia Pacific Index gained 2%.
Currencies
– The Bloomberg Dollar Spot Index advanced 0.1%.
– The euro decreased 0.4% to $1.2221.
– The Japanese yen depreciated 0.1% to 103.94 per dollar.
Bonds
– The yield on 10-year Treasurys climbed three basis points to 1.11%.
– Germany’s 10-year yield rose less than one basis point to -0.52%.
– Britain’s 10-year yield advanced less than one basis point to 0.288%.
Commodities
– West Texas Intermediate crude gained 3.1% to $52.40 a barrel.
Biden assembling new stimulus plan with checks, unemployment aid
EconJan 09. 2021President-elect Joe Biden visits Atlanta to show his support for the Democratic candidates for Senate. MUST CREDIT: Washington Post photo by Demetrius Freeman.
By The Washington Post · Jeff Stein, Erica Werner, Mike DeBonis · NATIONAL, BUSINESS, POLITICS, CONGRESS
WASHINGTON – President-elect Joe Biden said Friday he is assembling a multitrillion-dollar relief package that would boost stimulus payments for Americans to $2,000, extend unemployment insurance and send billions of dollars in aid to city and state governments, moving swiftly to address the nation’s deteriorating economic condition and the rampaging pandemic.
The package will also include billions of dollars to improve vaccine distribution and tens of millions of dollars for schools, as well as rent forbearance and assistance to small businesses, especially those in low-income communities, Biden said at a news conference in Wilmington, Del.
“We need to provide more immediate relief for families and businesses now,” Biden said.
“The price tag will be high,” he said, adding, “The overwhelming consensus among leading economists left, right and center is that in order to keep the economy from collapsing this year, getting much, much worse, we should be investing significant amounts of money right now.”
Biden said he would lay out the package in more detail next week. It would build on some $4 trillion in economic assistance Congress has already devoted to battling the devastating pandemic, including a $900 billion package President Donald Trump signed into law last month.
Discussions were getting underway in earnest with Democratic leaders on Capitol Hill, with Biden aiming to move the package to a vote as quickly as possible. But in an early sign of the challenges Biden may face in getting his agenda through Congress, even with both chambers controlled by Democrats, Sen. Joe Manchin III, D-W.Va., expressed skepticism Friday about the benefits of a new round of stimulus checks.
“I don’t know where in the hell $2,000 came from,” Manchin said. “I swear to God I don’t. That’s another $400 billion dollars.”
Manchin initially seemed to suggest in an interview with The Washington Post that he was “absolutely” opposed to a new round of checks. He clarified in a follow-up interview that he could potentially support more checks if they were narrow in scope and targeted for people who really need them.
Manchin also said that the first priority needed to be on getting people vaccinated, not sending out checks.
“If they can direct money and they say, ‘This will help stimulate the economy,’ hell yeah I’m for it,” Manchin said. “But basically right now, you better get them vaccinated.”
Biden has made new stimulus checks a central promise, specifically telling Georgia voters that they would be getting $2,000 payments if Democrats won Senate runoff elections in the state this week.
Democrats won those races, clinching a majority in the Senate and unified control of Washington for the first time since the start of the Obama administration. After the Georgia wins, the incoming majority leader, Sen. Charles Schumer, D-N.Y., also pledged that the $2,000 checks would be an early priority. Sen. Bernie Sanders, I-Vt., said in a statement Friday that “the working class of this country was promised that they would receive a $2,000 direct payment. . . . We must keep that promise.”
Manchin is a moderate who will hold great sway in a Senate split 50 to 50 between Democrats and Republicans. With such slim margins, Biden and Schumer may not be able to lose even a single Democratic vote if they attempt to move legislation under special Senate rules that allow bills to pass with a simple majority, instead of the 60-vote margin generally required. In the event of a tie in the Senate, Kamala Harris, the incoming vice president, would cast the deciding vote.
Without united Democratic support, Biden would need to attract Republican votes for his proposal. Biden has often spoken of a desire for bipartisanship, and there may be GOP support for some elements of his plan, including the stimulus checks. However, many Republicans are certain to balk at a price tag Biden said would be “in the trillions of dollars.”
Formal discussions between congressional Democratic leaders and Biden officials on the details of the stimulus package are expected to begin in earnest in coming days. Officials stressed that conversations are preliminary and that no final decisions have been made about the timing or exact shape of the effort.
At least one leading Democratic senator will push for federal unemployment benefits to be approved at $600 a week, up from the current $300, although the position of the Biden team on that matter is not yet clear.
The local-aid component of the package may take the form of additional money for specific needs that local governments face, such as funding for education and child care, rather than direct grants to states and cities.
Biden’s push for a big new stimulus package comes amid a rapid deterioration of the economy under the strain of a third wave of the coronavirus. The economy shed 140,000 jobs in December, a steep decline just as U.S. covid-19 deaths hit an all-time high.
“Clearly, there’s a need. The new unemployment numbers are shocking,” said Jim Kessler, an executive vice president at Third Way, a centrist think tank. “State and local aid has to be part of it. There will be additional stimulus checks. And you have to make sure unemployment benefits continue as well.”
Enhanced unemployment benefits of up to $300 a week were included in the $900 billion package signed by Trump. That package also included $600 stimulus checks, so approving new $1,400 checks would bring stimulus payments to $2,000, a figure that has attracted widespread support.
House Speaker Nancy Pelosi, D-Calif., pushed a stand-alone stimulus-check measure through the House last month. Biden indicated Friday, however, that he would wrap the stimulus checks into a wide-ranging package, not try to move them as a stand-alone bill.
Biden is also likely to push for a larger legislative effort later in 2021 after the initial stimulus package. That effort is expected to focus on spending trillions of dollars on infrastructure and clean-energy jobs. The former vice president additionally has pushed for significant overhauls to America’s health-care system, something that could also be wrapped into legislation later in the year.
Sen. Ron Wyden, D-Ore., incoming chair of the Senate Finance Committee, said in an interview that he will push for a restoration of the $600 per week in federal unemployment benefits approved by Congress in March. Those benefits expired in the summer, although Congress last month approved an additional extension of those benefits at $300 per week. Other Senate Democrats have previously expressed internal opposition to reviving the $600-per-week benefit.
Wyden said he is in communication with Biden officials about the coming push for economic relief. He did not say whether the Biden officials will back his push for the $600 weekly benefit. He also said he is pushing for “automatic triggers” that tie the expiration of federal benefits to general economic conditions, such as the unemployment rate.
“I talked to [Biden officials] last night. I can tell you they are very much concerned about layoffs,” Wyden said. “At this point, I’m telling everybody: ‘I’m pulling out all the stops for $600.’ . . . We are going to do everything we can to put hard-hit working families on an economic footing where they can get ahead.”
By The Washington Post · David J. Lynch, Eli Rosenberg, Andrew Van Dam · BUSINESS, US-GLOBAL-MARKETS
WASHINGTON – The Labor Department said the U.S. lost 140,000 jobs last month, marking the first decline since the recovery began in May, as the economy showed signs of buckling amid an escalating pandemic.
The monthly report means that President Donald Trump, who once boasted that his business background made him uniquely qualified to “make America great again,” will leave office with fewer Americans employed than when he entered the White House.
Restaurants and bars were among the hardest hit, as rising coronavirus infections and cold weather made it harder to operate. Cash-strapped state and local governments laid off thousands of teachers and other public employees.
Amid fresh signs of economic weakness, President-elect Joe Biden said Congress must act quickly on his proposal for additional federal relief beyond last months’ $908 billion package.
“We need to provide more immediate relief for working families and businesses now,” Biden said. “Not just to help them get to the other side of this painful crisis, but to avoid the broader economic costs due to long-term unemployment, hunger, homelessness, and businesses failing.”
The current gloom is unmistakable, but it could lift in a matter of months – if the sluggish introduction of coronavirus vaccines accelerates, freeing the economy from the pandemic’s grip.
Still, the disappointing jobs report suggested it will take longer than economists expected to claw back all of the jobs lost during last year’s recession. Employers rehired millions of workers in the summer, yet 9.8 million fewer Americans are working today than were employed before the pandemic. It will likely take more than two years for the U.S. to return to full employment, many economists say.
After nine months without a job, Danielle Whittenhall, 30, a Chicago bartender, despairs of ever again finding work in the nightlife industry. Since the nightclub and sports bar she worked at closed in March, she’s cycled between living in her car and on a friend’s couch, surviving on the $560 in state unemployment benefits she receives every other week.
“It’s been a tough thing to navigate through,” she said.
In Wilmington, Del., Biden said “the anxiety and fear” in the country was reminiscent of January 2009, when he was sworn in as vice president amid a global financial crisis. Joblessness is particularly high for Black and Latino households, with unemployment rates topping 9% compared to 6% for Whites.
Battling a dual health and economic crisis, the new administration faces a more complex policy challenge, economists said. More contagious variants of the coronavirus have been detected on U.S. soil. And on Thursday, the country set a new single day fatality record with more than 4,000 deaths.
Vaccines offer hope of a return to normal activity later this year, but the pace of their rollout over the past month has disappointed. Even as the Biden team draws up plans to speed that process, workers and businesses in industries affected by social distancing need financial support to help them survive.
“Until the virus is under control, until people can freely engage in economic activity again, there is one hand tied behind the economy’s back,” said Heidi Shierholz of the Economic Policy Institute, a left-leaning think tank. “That is totally different than what Obama-Biden faced when they came in.”
Sarah Sheets, 46, who operates a daycare in Ingram, Texas, is among those the virus sideswiped. When the pandemic hit in the spring, demand for her services evaporated, leaving her to rely on unemployment benefits. Until the end of July, when an emergency federal program expired, she received $600-a-week in addition to her regular state benefits. But for the final five months of the year, she got by on $160 in state assistance each week.
“We didn’t have Christmas this year,” she said. “I had $200 for four children and dinner. It’s not going to be the same ever again.”
Sheets has just started receiving the extra $300 a week in jobless aid Congress approved last month. She said she’s hoping for more help after Jan. 20th when the Democrats will control the White House and both sides of Capitol Hill.
“It would be enough to have to deal with the fact that there was a virus,” she said. “But then the financial part of it has just pushed us over into a very difficult situation. “
The unemployment rate stayed level at 6.7% in December, according to the report, from the Bureau of Labor Statistics.
Employment in leisure and hospitality industries declined by 498,000, the majority of that at restaurants, bars and other food service establishments, which have struggled amid limitations from cold weather and a new round of restrictions across the country.
Employment in another tourism-related category – amusements, gambling and recreation – fell by 92,000. Government employment declined by 42,000. These declines offset modest gains in other sectors, such as professional and business services, retail and construction.
Still, other parts of the $21 trillion U.S. economy continued to power ahead. Retailers showed surprising strength, adding 121,000 jobs, while homebuilders pushed construction hiring up. Manufacturers added 38,000 jobs and warehouses added workers, too, as e-commerce orders boosted demand.
While the job market is sagging under the pandemic’s weight, the economy is expected to roar back in the second half of the year. The introduction of two vaccines for covid-19, the disease caused by the coronavirus, offer hope of a gradual resumption of normal operations for many damaged businesses.
With Democrats in full control of Washington, many economists say prospects for continued government financial assistance also have improved. Richard Clarida, vice chair of the Federal Reserve, said Friday he expects the nation’s central bank to continue supporting the recovery with monthly purchases of about $120 billion in Treasury and other government-backed securities.
The fresh labor market data points to the economic challenges facing Biden, who inherits one of the weakest labor markets in years from his predecessor.
There are 9.8 million fewer jobs in the United States now than in February; 3 million below the level on Inauguration Day in 2017, a track record that undercuts what had been one of Trump’s most frequently touted achievements.
On Friday, Trump – cloistered at the White House amid demands for his ouster following Wednesday’s insurrectionist riot at the U.S. Capitol – offered no tweets or other public remarks about the economy.
“It’s a damaged labor market,” said Augustine Faucher, chief economist at the PNC Financial Services Group. “But it is a labor market that is poised for recovery, given the fact that we are seeing the vaccine. With support from the federal government and support from the Federal Reserve, it could see a strong rebound over the next few years.”
The economy shed 22 million jobs between February and April with the onset of the pandemic and has regained just over half. Economists have long warned that delays renewing the packages that offered aid to businesses, families and unemployed individuals would have costly effects on the broader economy.
The pandemic’s imprint is evident in just about every corner of the economy. Nearly a quarter of employees teleworked in December, up about a percentage point from November. Another 15.8 million people said they had been unable to work because their employer closed or lost business due to the pandemic.
Some 4.6 million people who were not counted as part of the labor force were prevented from looking for work due to the pandemic, the BLS reported.
Taking into account the shrunken labor force, a true measure of unemployment would be close to 9.5%, said Gregory Daco, chief U.S. economist for Oxford Economics.
Though job growth is expected to be robust once large numbers of Americans are vaccinated, the economy at year end will still be short roughly 4 million jobs, he said.
Government employment declined by 45,000 in the month, lending credence to the warnings from economists and Democrats about coming job cuts due to budget shortfalls. Republicans resisted a measure for robust state and local government aid as part of the stimulus negotiations in December.
But with a Democratic Congress and White House, the report will likely help fuel Biden’s push for a fresh round of economic aid. The president-elect said Friday that he will unveil next week a multi-trillion dollar relief package.
Still, the next few months are likely to continue to be tough for the labor market as winter and coronavirus-related shutdowns chill the ability of hospitality and restaurant industries to operate and the level of infections remains an obstacle to other attempts to get the economy going.
Questions remain about how restaurants, bars, hotels and other businesses that rely on close personal interactions will endure. More than 110,000 restaurants have closed in the pandemic – about one in six – according to a survey released in December by the National Restaurant Association.
“We’ve got a lot of work ahead of us,” said Daco. “The situation will improve. But we won’t escape unscathed from this crisis.”
Transport Minister Saksayam Chidchob
Deputy PM Supattanapong Punmeechaow
A Chevron sign in front of a horizontal drilling rig on federal land in Lea County, N.M., on Sept. 10, 2020. MUST CREDIT: Bloomberg photo by Callaghan O’Hare.
Alberto Fernandez, then Argentina’s president-elect, leaves from a news conference following a meeting with Andres Manuel Lopez Obrador, Mexico’s president, in Mexico City on Nov. 4, 2019. MUST CREDIT: Bloomberg photo by Alejandro Cegarra.
A Wall Street street sign in front of the New York Stock Exchange in New York on Jan. 4, 2021. MUST CREDIT: Bloomberg photo by Michael Nagle.
President-elect Joe Biden visits Atlanta to show his support for the Democratic candidates for Senate. MUST CREDIT: Washington Post photo by Demetrius Freeman.
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