Economy

Biden Accuses 70 Million Unvaccinated Americans of Slowing Economic Recovery

President Joe Biden has doubled down on his claim that unvaccinated Americans are “creating unease in our economy and around our kitchen tables“, saying that the 70 million people who haven’t been ‘jabbed’ are slowing down the country’s economic recovery. To resolve this ‘problem’, he will “[move] forward with vaccination requirements wherever I can”. CNBC has the story.

Biden’s comments came hours after the Centers for Disease Control and Prevention (CDC) approved distributing Pfizer’s booster shots to roughly 60 million Americans.

“The vast majority of Americans are doing the right thing,” Biden said in addressing the nation, noting that three-fourths of those eligible have gotten at least one shot. He criticised the more than 70 million people who haven’t yet started the vaccination process. “And to make matters worse, there are elected officials actively working to undermine with false information the fight against Covid. This is totally unacceptable.”

Economists have lower expectations for the back half of the year following a string of disappointing economic reports. The U.S. economy added just 235,000 jobs in August, well short of expectations for a 720,000 gain from economists polled by Dow Jones. This week, the Federal Reserve forecast 2021 GDP to rise at a 5.9% annual pace, down from its previous forecast of 7% growth. …

Even though the CDC reports that 55% of the U.S. population has been fully immunised against Covid, Biden said the remaining unvaccinated people are hindering economic growth, costing jobs and putting unnecessary strain on the health-care system.

Biden issued sweeping new vaccine mandates on September 9th affecting private businesses and federal employees. Government staff and contractors are required to immunise against Covid with no alternative for testing, while any company with over 100 personnel must implement vaccine mandates that include medical and religious exemptions.

The requirements will cover two-thirds of all workers nationwide, Biden said, noting that 92% of the country’s active-duty service members have been inoculated. He mandated the shots for the military on August 9th.

Worth reading in full.

Government Borrowing in July the Second Highest for That Month on Record

“Government borrowing shrinks in July,” reads today’s headlines – but the figure is still the second-highest for July since records began. Borrowing over the past year of lockdowns has pushed the national debt up to more than £2.2 trillion (about 98.8% of GDP).

BBC News has the story.

Borrowing – the difference between spending and tax income – was £10.4 billion, official figures show, which was £10.1 billion lower than July last year.

However, the figure was the second-highest for July since records began.

Borrowing has been hitting record levels, with billions being spent on measures such as furlough payments. …

The Office for National Statistics (ONS) now estimates that the Government borrowed a total of £298 billion in the financial year to March.

That amounted to 14.2% of GDP, the highest level since the end of World War Two.

The ONS said the cost of measures to support individuals and businesses during the pandemic meant that day-to-day spending by the Government rose by £204.3 billion to £942.7 billion last year.

Interest payments on central Government debt were £3.4 billion in July.

That was £1.1 billion more than in July 2020, but far lower than the monthly record of £8.7 billion in June 2021.

Worth reading in full.

One in 16 U.K. Businesses Could Close In Next Quarter

A million jobs are at risk due to the ending of lockdown support schemes, with a new study suggesting that one in 16 U.K. firms are poised to close permanently in the next quarter following more than a year of forced temporary closures. The Guardian has the story.

One in 16 firms say that they are now at risk of closure in the next quarter, the study by the LSE’s Programme on Innovation and Diffusion (POID) has found. While it marks a major rise in confidence since the worst depths of the pandemic in January, there are warnings that the risk to so many workers coincides with the planned end of the furlough jobs scheme and a cut to universal credit by £20 a week.

There are also concerns that some industries are still being hit disproportionately by the fallout from Covid, with the entertainment and travel industries still making heavier use of the furlough scheme than other sectors. The number of people being paid through the U.K. scheme stood at 1.9 million at the end of June and it is due to close at the end of next month.

Huge uncertainty remains over the economy’s direction in the next six months. While confidence has risen, there are warnings over complacency. Former Prime Minister Gordon Brown, who founded the Alliance for Full Employment group to promote jobs protection and work creation programmes, said “a new jobs crisis point is approaching as furlough ends”. …

Peter Lambert, one of the authors of the POID research, said the end of the furlough scheme would be “an inflection point” where the economy could go either way. He added: “I think there will probably need to be some continuation of support in specific sectors. My bet is there’ll be more targeted support, because unless the economy really, really picks up, there’s going to be lots of people still left in the lurch in specific sectors.”

There are also concerns over the impact on families switching from furlough support to universal credit, especially as the £20-a-week increase brought in at the start of the pandemic is to be withdrawn this autumn.

Worth reading in full.

Zero-Covid ‘Hermit’ Economies Heading For Economic Slump

Countries that have permanently shut their borders in a misguided effort to reduce Covid infections to zero are heading for economic catastrophe, according to Matthew Lynn in the Telegraph.

Controlling Covid through lockdowns and closed borders was a triumph to start with. As the pandemic has dragged on, and borders remain sealed for years without end, it is going to take a huge economic toll. Australia is heading back into recession even as the rest of the world recovers. New Zealand is seeing investment flee.

In truth, in an increasingly globalised and networked world, countries cannot exist in semi-lockdown forever and borders cannot remain permanently closed without doing huge economic damage. They can turn themselves into hermits if they want to – but the price will be a very high one. …

After a record 30-year run without a single recession, the [Australian] economy shrank last year, and it is now expected to contract again over the next couple of quarters.

Huge swathes of the population are back in lockdown as Covid infections rise, and output is inevitably starting to fall. As the rest of the world recovers, and growth accelerates in the United States, Britain, and, even if slightly more sluggishly, across most of mainland Europe, both countries are illustrating the cost of ‘zero-Covid’ strategies.

Worth reading in full.