The daily business briefing: August 16, 2021
The Biden administration prepares to increase food stamp benefits, United reroutes flights to avoid Afghan airspace, and more
Biden administration to increase food stamp benefits
The Biden administration is expected to announce Monday the largest permanent increase to food assistance benefits in history. Under the new rules, which will take effect in October, average benefits will increase by more than 25 percent over pre-pandemic levels, rising by $36 to $121 monthly per person. All 42 million beneficiaries will receive more. The changes don't need approval from Congress. Unlike other new spending intended to help people weather the coronavirus pandemic, these added benefits are intended to last indefinitely. Agriculture Secretary Tom Vilsack said the program provided a safety net, and its $79 billion annual cost helps "stabilize our democracy."
United reroutes flights to avoid Afghan airspace
United Airlines on Sunday rerouted its India flights to keep them out of Afghanistan's airspace after the Taliban seized Kabul and the country's government collapsed. "Due to the dynamic nature of the situation we have begun routing affected flights around Afghanistan airspace," said the airline, which serves New Delhi from its Newark Liberty International Airport hub and Chicago O'Hare International Airport, and Mumbai from Newark. The airline said it would continue to work with the Federal Aviation Administration and the International Air Transport Associated "to evaluate the situation and determine how we continue service to markets impacted."
China factory output slows, threatening global recovery
China on Monday reported that factory output and retail sales growth slowed sharply in July, fueling concerns that surging coronavirus infections were threatening the global economic recovery. Industrial production in China, the world's second-largest economy, rose by 6.4 percent in July compared to a year earlier, according to data from Beijing's National Bureau of Statistics released Monday. Analysts had predicted a 7.8 percent increase, after June's 8.3 percent rise. Retail sales rose by 8.5 percent, falling far short of the expected 11.5 percent increase. Retail sales jumped by 12.1 percent in June. Although China's economy is back to pre-pandemic levels, businesses now face supply bottlenecks and new coronavirus restrictions.
Hyatt to buy Apple Leisure for $2.7 billion
Hyatt Hotels Corp. confirmed Sunday that it plans to buy resort company Apple Leisure Group for $2.7 billion. Apple Leisure is owned by KKR and KSL Capital Partners LLC, a private-equity group specializing in travel and leisure. It was hit hard by coronavirus lockdowns and travel bans in 2020, although it has bounced back somewhat as restrictions were eased. The deal promises to boost the hospitality giant's resort-management portfolio, and give it a major provider of charter flights and vacation packages to Mexico, the Dominican Republic, Jamaica, and other Caribbean destinations. Apple Leisure manages the Secrets, Dreams, and Breathless Resorts & Spa chains. It also sells vacation packages under numerous brands, including CheapCaribbean.com and Apple Vacations.
Stock futures pull back after last week's all-time highs
U.S. stock futures fell slightly early Monday, pulling back from last week's record highs. Futures tied to the S&P 500 and the Dow Jones Industrial Average were down by 0.2 percent several hours before the opening bell. Both indexes closed at all-time highs on Friday. Futures for the tech-heavy Nasdaq were down by 0.1 percent. China reported Monday that industrial growth slowed in July, fueling investor fears that the spread of the highly infectious Delta variant of the coronavirus would slow the global economic recovery. "That is the reason why the market is a bit nervous today," said Andrea Carzana, a fund manager at Columbia Threadneedle Investments.