The U.S. Economy Created 916,000 Jobs in March… The unemployment rate dipped from 6.2% to 6.0%.
What it means— That’s a lot of jobs. With the upward revisions to the January (+67,000) and February (+89,000) jobs numbers, the U.S. Bureau Labor Statistics now reports an additional one million-plus jobs in the economy compared with last month’s report. Expect more of this. With trillions of dollars in cash sloshing around, the economy is skewed toward pent-up demand that should quickly outstrip supply as states reopen their economies. We want to go places and do stuff. Which brings up a question. Then what?
Unemployment is a mere 2.5% away from the 50-year lows we were celebrating at the end of 2019, and a chunk of the jobs we lost in hospitality and leisure won’t come back. We have a percentage or two of structural unemployment, where the workforce available doesn’t match with job openings, due to experience, education, geographic location, or other factors. As the economy rapidly expands during the rest of the year, businesses will find themselves short of workers even as unemployment remains above the levels of early 2020.
Investors Sold Stocks and Poured Money into Cash Funds… As high-flying stocks sold off, investors put more than $45 billion into cash funds the week of March 24, the largest inflow since April 2020, right before the rebound.
What it means— Along with adding more cash to their portfolios, investors also bulked up on U.S. inflation protection. Treasury Inflation-Protected Securities (TIPS) funds saw an inflow of $1.8 billion, their third-largest inflow ever. But it looks like this was exactly the wrong time. Investors who cashed out last April missed the incredible rebound and then gains at the end of 2020. Investors who cashed out over the last two weeks missed the big gains at the end of March and the first day of April. Timing the markets is terribly difficult. But then again, so is holding on as share prices fall.
Biden Unveils $2.3 Trillion Infrastructure Plan, Including Tax Hikes… President Biden proposes spending trillions of dollars on infrastructure and other priorities and paying for it over 15 years, mostly by raising corporate taxes.
What it means— Well, at least some of it, about 7%, is for traditional infrastructure like roads and bridges. The rest is for green energy, union jobs, and racial equity.
The plan includes $620 billion for transportation, $400 billion for home and community-based care, $286 billion for buildings, $280 billion for job creation, $137 billion for education, $300 billion for manufacturing, and $266 billion for utilities.
The plan calls for raising the corporate tax from 21% to 28%, or halfway back to its previous level of 35%, and imposing a minimum tax on corporate profits to stop firms from parking profits in low-tax havens overseas. Infrastructure spending has long been popular with voters, so we’re likely to see some form of this bill become law.
Visa to Offer Cryptocurrency Transactions and Bypass the Buck… The credit card giant announced a program that uses a stable coin to complete purchases with cryptocurrency.
What it means— Well, this is getting interesting. Visa Inc. will allow the use of the cryptocurrency USD Coin, a stable coin tied to the U.S. dollar at a one-to-one ratio, to settle transactions on its payment network. The company launched the pilot program with payment and crypto platform Crypto.com and plans to offer the option to more partners later this year.
This isn’t quite settling transactions in volatile bitcoin yet, but it’s a step in that direction. Visa’s latest step, which will use the Ethereum blockchain, strips out the need to convert digital coins into traditional money to settle the transaction.
Masks Add to Trash and Litter as We Discard Three Million Every Minute… Nations rushed to deliver masks to their populations to fight the virus, but now those same masks are becoming a trash nightmare.
What it means— Well, what do you expect when you ask nearly six billion people (excluding the youngest) on the planet to put on masks?
Researchers are warning that heavy mask usage over the course of the coronavirus pandemic could be contributing to a looming environmental disaster, with many of the masks polluting local ecosystems in the process.
Researchers in the U.S. and Denmark estimated in a study in the journal Frontiers in Environmental Science that “an astounding 129 billion face masks [are] being used globally every month,” a number that works out to three million every minute.
“Most are disposable face masks made from plastic microfibers,” the researchers note. There’s no word on how to recycle masks, so people are simply throwing them away. They end up as solid waste or litter.
Data supplied by HS Dent Research
“When the facts change, I change my mind.
What do you do?” ~ John Maynard Keynes
Our plan is “the plan will change.”
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