Yellen urges G7 to keep up fiscal support, sees inflation as transitory
US Treasury Secretary Janet Yellen on Saturday urged her G7 counterparts to keep up fiscal support for their economies, despite "transitory" inflation that she said will remain elevated through the rest of the year.
Yellen told a news conference after G7 finance ministers met in London that fiscal support was still needed to bolster economic recovery from the covid-19 pandemic and to make needed investments to fight climate change and inequality.
While G7 countries have had robust fiscal responses to the pandemic, she said "there is a concern among some about fiscal sustainability, and an evident desire to begin to withdraw accommodation when things are back on track," Yellen said.
"And we think that most countries have fiscal space, and have the ability to put in place, fiscal policies that will continue promoting recovery and deal with some of the long run challenges that all of us face when it comes to climate change and inclusive and sustainable growth, and we urge countries to do that," she said.
In prepared remarks for the post-meeting news conference, Yellen also praised an agreement to pursue a global minimum tax of at least 15% on corporations as helping to stabilize tax systems while preserving national authority to set tax rates and policies.
Yellen said inflation will remain elevated at 3% on a year-over-year basis until about the end of 2021.
"I personally believe that this represents transitory factors," she said, adding that production bottlenecks have caused elevated prices in some industries, such as motor vehicles, while other prices, such as airline fares, are rising back to more normal levels.
There is still slack in the labor market, she said, because of people who have lost jobs permanently, and it will take a while to reabsorb those workers into the economy.
"So we shouldn't expect this process to be complete in a month or two," Yellen said. "And while we're seeing some inflation, I don't believe it's permanent."
Yellen said the G7 finance ministers agreed to ambitious commitments to de-carbonize their economies and mobilize public and private finance for action to combat climate change.
"To facilitate the mobilization of private climate finance, the G7 also agreed to take action to improve the availability of consistent, comparable, and decision-useful climate-related financial information to market participants," Yellen said in prepared remarks.
(Reuters)
US NEWS
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This means that half of the total value of the credit will be distributed this year, the remainder can be claimed next year during tax season. Some individuals and families are opting to forgo monthly payments and claim the full credit next Spring.
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Student debt preventing millennials from building wealth
The oldest millennials turn 40 this year and approach middle age but they are struggling to build wealth as their parents had. When they entered adulthood they experienced one crisis after another, 2008 financial crisis, higher education funding cuts, rising college costs and slow wage growth. This lead to them becoming the generation of student debt. A survey conducted by The Harris Poll on behalf of CNBC Make It found that 68 percent of older millennials are still paying down their student debt a decade or so after leaving university.
Progressive Democrats are calling on President Biden to cancel student debt. The President called for a legal review of his ability to cancel student debt via executive action but for the time being it doesn’t look likely.
Reclaiming stimulus check money gone awry
The IRS was tasked with getting stimulus checks out to eligible taxes payers without delay each time they were authorized, but as is the case, anytime something is done in haste mishaps are bound to happen. The agency delivered around 98% of the stimulus checks correctly but the deceased and individuals overseas who weren’t eligible received checks too to the tune of more than a billion dollars.
The IRS has set about trying to reclaim those payments sent out by mistake sending letters to banks to help the agency recover the money. However, in the case of one bank, the Bank of Guam, things didn’t go as planned and is now creating legal mayhem overseas.
Full story at NPR
Six petitions for $2,000 stimulus checks surpass 2.6 million signatures
For over a year a petition calling on Congress to disburse monthly recurring stimulus checks started by Denver restaurant owner Stephanie Bonin has been gaining steam. In the past month over 300,000 have signed on to raise the total number of signatures to more than 2.3 million. The petition wants $2,000 monthly payments for adults and $1,000 for children until the end of the crisis.
It has been joined by five other petitions on Change.org all of which have been gaining momentum over this past month as well. In total they have garnered 2.6 million signatures.
Dollar falls from three-week high after US jobs data
The dollar fell on Friday after U.S. non-farm payrolls data showed hiring increased in May as the pandemic eased, but not quite as much as expected, tempering expectations the Federal Reserve will tighten monetary policy sooner, rather than later.
Nonfarm payrolls increased by 559,000 jobs last month, helped by higher covid-19 vaccination rates, while the unemployment rate fell to 5.8% from 6.1% in April, when the jobs report came in well below expectations.
The consensus forecast was for 650,000 jobs added in May. "This payroll number was a little disappointing," said Edward Moya, a senior market analyst at OANDA. The softer-than-expected report means there is no urgency for the Fed to begin tapering its monthly purchase of $120 billion in bonds to support the economy, he said.
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Tech drives Wall Street higher as jobs report calms inflation fears
U.S. stocks climbed on Friday, led by technology shares, after a tepid U.S. monthly jobs report relieved investor concerns the Federal Reserve might rein in monetary stimulus soon.
U.S. employers increased hiring in May and raised wages as they competed for workers. But the nonfarm payrolls increase of 559,000 jobs was below the 650,000 forecast of economists polled by Reuters.
Investors were concerned that a robust jobs report that pointed to rising inflation could prompt the Fed to pull back on stimulus put in place during the pandemic. "It keeps pressure off the Fed and will enable them to keep their low interest rate policy in place longer and take more of a wait-and-see attitude," said Jack Ablin, chief investment officer at Cresset Capital Management. "The opportunity to keep rates low is good news for risk takers."
G7 nations near historic deal on taxing multinationals
Group of Seven rich nations are seeking to overcome long-standing differences on Saturday and strike a landmark deal to close the net on large companies that they say do not pay enough tax.
The proposed accord, which could form the basis of a global pact next month, is aimed at ending a decades-long "race to the bottom" in which countries have competed to attract corporate giants with ultra-low tax rates and exemptions.
That has in turn cost their public coffers hundreds of billions of dollars - a shortfall they now need to recoup all the more urgently to pay for the huge cost of propping up economies ravaged by the coronavirus crisis.
Britain's finance ministry said Saturday morning's talks between the G7 finance ministers had been "productive". Ministers are meeting face-to-face for the first time since the start of the covid-19 pandemic, and a formal statement after the meeting concludes is due early afternoon.
"Talks are going well," a British source familiar with the negotiations said.
IRS sends out 2.8m tax refunds to beneficiaries of stimulus scheme
The IRS said on Friday that it is this week distributing 2.8 million refunds to Americans who qualify for a tax break on 2020 unemployment insurance, but had already paid taxes on their benefits.
As part of President Biden’s $1.9tn coronavirus stimulus package, which was signed into law in March, recipients of unemployment benefits last year can get a tax waiver on the first $10,200 in jobless compensation paid to them last year.
Full IRS statement
Restaurant blames stimulus checks for labor shortage
Are unemployment and stimulus checks the reason to blame when it comes to understaffed restaurants? One pizza restaurant in Georgia seems to think so.
The sign, posted on Twitter early Friday morning, reads: “Sadly, due to government handouts no one wants to work anymore. Therefore, we are short staffed. Please be patient with the staff that did choose to come to work today and remember to tip your server. They chose to show up to serve you.”
US News
June Unemployment Rate: will it affect unemployment benefits?
Will the May unemployment data effect plans to end federal unemployment benefits in some states?
On Friday, 4 June, the Bureau of Labor Statistics (BLS) released the May Employment Report which showed modest growth in the labor market. While the number of jobs added fell short of expectations, the gap was much smaller than in April. As economists and policymakers awaited the April release, many believed over a million jobs would be added; the actual number ended up being around a quarter of the projected size.
After the lackluster report, Republican governors around the country moved to end all additional federal unemployment benefits this summer to incentivize workers to reenter the labor market. The GOP leaders cited work shortages for keeping workers home.
Read full story on what some private sector actors are saying about the move by Republicans.
Two million people have signed petition for recurring $2,000 stimulus checks
Several Democratic lawmakers have been calling for Biden's administration to approve recurring $2,000 stimulus checks since February, but so far those appeals have fallen on deaf ears.
Calls from US voters continue to grow, with over 2 million people having signed an online Change.org petition calling for recurring $2,000 per month payments, according to a report by Fox 13.
"It took nine months for Congress to send a second stimulus check, and just moments to spend it. Moving forward Congress needs to make recurring checks automatic if certain triggers are met," the petition reads.
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The US food bank networks will be getting a $1 billion injection of funds from the Department of Agriculture. The money will go towards expanding the reach of the system and rework the way food banks acquire and distribute aid. Half the funds will come American Rescue Plan and the rest from standard congressional appropriations.
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The Biden administration has claimed that the enhanced credit, along with other benefits under his American Rescue Plan, will help lift more than 5 million children out of poverty in 2021, cutting child poverty by up to 50%.
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In his latest public address, President Joe Biden discussed the impact of the $1,400 stimulus checks that came as part of his $1.9trn American Rescue Plan.
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Could your state be the next to send out more stimulus checks?
California announced a budget deal this week that would allocate $8.1 billion for stimulus checks of $500 or $600, plus an additional $500 payment for households with children. This followed an earlier round of $600 payments by the state.
Meanwhile, Florida Gov. Ron DeSantis approved a budget that includes provisions for $1,000 direct payments to be made to first responders and teachers.
With federal Covid-19 relief cash in hand and larger-than-expected revenues in the last fiscal year, mores state could follow suit by offering stimulus checks to compliment the federal $1,400 payment that was approved under the American rescue plan.
US NEWS
Which states are offering 'return to work' bonuses of up to $2,000?
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As the country moves into summer, many unemployed workers in states where federal unemployment benefits will be ending, are wondering how they will make ends meet.
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Full story
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Welcome to our live US stimulus checks blog for Saturday 5 June, the start of what could be a significant month.
Throughout the day, we’ll be bringing you all the latest information on a possible fourth direct payment as well as updates on the third stimulus check, which the IRS has been distributing since the $1.9tn American Rescue Plan was signed into law in early March.