The daily business briefing: September 23, 2021
Biden urges Democrats to unify behind spending bills, Powell says the Fed could start tapering stimulus soon, and more
Biden meets with Democrats seeking unity on spending bills
President Biden met with divided congressional Democrats on Wednesday in an urgent push to salvage two major spending bills that form the heart of his economic and social agendas. Biden held talks with party leaders, and leaders of the party's progressive and moderate factions, hoping to unify them behind a $3.5 trillion spending package Democrats can approve without Republican support, provided all 50 Democrats in the evenly divided Senate vote for it. "We are in a pivotal period of our negotiations and discussions" requiring "deeper engagement by the president," White House Press Secretary Jen Psaki said. The push is heading for a crucial deadline on Monday, when House Speaker Nancy Pelosi (D-Calif.) plans a vote on an infrastructure bill that liberals say they won't support unless the broader spending bill goes through, too.
Powell says Fed to start tapering stimulus soon
Federal Reserve Chairman Jerome Powell said Wednesday that the central bank would be able to start tapering the $120 billion in monthly asset purchases it has been using to stimulate the economy as soon as November. "Participants generally viewed that so long as the economic recovery remains on track, a gradual tapering process that concludes around the middle of next year is likely to be appropriate," Powell said. The comments came after the Fed concluded a two-day policy meeting saying it would only start easing back on its stimulus if the economy makes "substantial further progress" toward the Fed's goals of maximum employment and stable prices. Powell noted that inflation was still significantly higher than the Fed's target rate of 2 percent.
Home sales slowed in August
The red-hot housing market started to cool in August, with existing-home sales falling by 2 percent compared to the previous month as some buyers were discouraged by high prices and competition for available properties. The seasonally adjusted annual rate for the month was 5.88 million, the National Association of Realtors said Wednesday. August sales were down by 1.5 percent compared to a year earlier, but the median price of $356,700 was up by 14.9 percent. Months of price increases have put homes out of reach or left some buyers frustrated after being outbid multiple times. The sales pace is still faster than it was a year and a half ago before the coronavirus pandemic hit. "Clearly the home sales are settling down, but above pre-pandemic conditions," said Lawrence Yun, NAR chief economist. "The high home prices are squeezing away the first-time buyers."
Stock futures rise after Dow, S&P 500 snap losing streak
U.S. stock index futures rose early Thursday after the Federal Reserve kept interest rates unchanged but signaled the economic recovery could soon be strong enough for it to start tapering its economy-stimulating asset purchases. Futures tied to the Dow Jones Industrial Average, the S&P 500, and the Nasdaq were up by about 0.7 percent several hours before the opening bell. All three of the benchmark indexes closed higher on Wednesday following the Fed's statement at the end of a two-day policy meeting. The Dow rose by 1 percent, snapping a four-day losing streak with its biggest gain since July 23. The S&P 500 and the tech-heavy Nasdaq also gained about 1 percent. The three major averages have fallen by at least 2 percent in September, traditionally a rough month for stocks.
Newsom signs California quota-protection law affecting Amazon
California Gov. Gavin Newsom (D) on Wednesday signed a law making the state the first in the nation to make it illegal for Amazon and other companies to punish workers for failing to meet quotas because they were on lunch or bathroom breaks. The measure takes effect at the start of 2022. The law also requires more clarity on what quotas are, and gives the state labor commissioner the power to issue citations and access worker's compensation data to find warehouses where quotas could be causing high rates of injury. "The hardworking warehouse employees who have helped sustain us during these unprecedented times should not have to risk injury or face punishment as a result of exploitative quotas that violate basic health and safety," Newsom said in a statement Wednesday.