The daily business briefing: November 23, 2021
Biden says he's nominating Fed Chair Jerome Powell for a second term, federal contractors' minimum wage rises to $15 an hour, and more
Biden nominates Fed Chair Jerome Powell for second term
President Biden said Monday that he is nominating Federal Reserve Chair Jerome Powell to serve a second term. The choice of Powell sent a message of continuity at the central bank that pleased investors. "Put directly: At this moment both of enormous potential and enormous uncertainty for our economy, we need stability and independence at the Federal Reserve. Jay has proven the independence that I value in a Fed chair," Biden said at the White House on Monday. The decision upset many progressives who wanted someone who would be tougher on bank regulations and climate change and had lobbied for Biden to pick Fed Governor Lael Brainard. Biden said he would nominate Brainard to be vice-chair of the Fed's board of governors.
Federal contractors' minimum wage rises to $15 an hour
The Labor Department on Monday released a new rule that will require federal contractors to raise the minimum wage to $15 an hour for more than 300,000 maintenance, security, and child care workers. President Biden directed the department to raise the workers' pay level in an April executive order. The wage hike will be tied to inflation, so it will rise in the following years along with consumer prices. The new pay floor applies to all federal contracts starting Jan. 30 or later. "Federal contract workers are essential workers," Labor Secretary Marty Walsh said in a call with reporters. "The people who we're going to be covering clean and maintain federal buildings. They provide child care for kids, they repair roads and bridges all across this country."
Elizabeth Holmes testifies that studies indicated Theranos devices had promise
Theranos founder Elizabeth Holmes testified for a second day in her fraud trial on Monday, pushing back against allegations that she lied about the company's work with drug companies on its blood-testing technology. Holmes said she based her enthusiasm and predictions of her Silicon Valley startup's success on positive studies conducted with several major pharmaceutical companies from 2008 to 2010 showing encouraging results from the third generation of a Theranos device known as the Edison. "We thought this was a really big idea," Holmes said. Theranos sought to revolutionize medical tests by offering machines that scanned for multiple maladies using a few drops of a patient's blood.
Stock futures mixed after Monday's tech rout
U.S. stock futures were mixed early Tuesday following Monday's tech sell-off. Futures tied to the Dow Jones Industrial Average were up by about 0.1 percent several hours before the opening bell. Futures for the S&P 500 were flat, and those of the tech-heavy Nasdaq were down by 0.2 percent. The S&P 500 and Nasdaq Composite fell on Monday by 0.3 percent and 1.3 percent, respectively, as tech and other growth stocks dropped due to a spike in bond yields. Stocks initially rose after the announcement that President Biden was nominating Federal Reserve Chair Jerome Powell for a second four-year term, which investors took as a sign the Fed would stay the course as it boosts the economic recovery through the pandemic and fights inflation.
Retailers start Black Friday sales early to counter supply, staffing problems
Major retailers are spreading out "Black Friday," offering discounts through November to soften the blow from supply-chain disruptions and a shortage of workers. Walmart said Monday it had already started offering price cuts that typically hit on the day after Thanksgiving. The world's largest retailer, which said it would close stores on Thanksgiving for the second straight year, said its discounts included $30 off AirPods and KidKraft dollhouses. Rival big-box retailer Target on Sunday started offering 30 percent off Samsung and TCL flat-screen TVs, and 50 percent off headphones. Target said Monday it would close its stores on Thanksgiving from now on. In-store shopping on Black Friday has been dropping in recent years, with the day's online sales surpassing brick-and-mortar sales in 2019.