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Tuesday, September 22, 2020
WASHINGTON — Federal Reserve officials expect to leave interest rates near zero for years — through at least 2023 — as they try to coax the economy back to full strength after the pandemic-induced recession, based on their September policy statement and economic projections released Wednesday.The Fed, in a significant update to its official policy statement, also reinforced its August pledge to tolerate slightly higher price gains to offset periods of weak inflation, underscoring that its chairman, Jerome H. Powell, and his colleagues plan to be extraordinarily patient as they try to cushion the economy in the months and years ahead.The Fed’s moves are in response to two major challenges. The coronavirus pandemic continues to threaten the economy in the near-term, leaving millions out of work, and central bank policy will be key to restoring growth and a strong labor market. A longer-run problem centers on inflation and interest rates, which have been slipping lower, threatening economic stagnation. Officials are hoping that an extended period of very cheap money will fuel demand and lift prices.In its statement on Wednesday, the policy-setting Federal Open Market Committee said it expected to hold rates steady near zero until the job market reaches what
WASHINGTON — Even as negotiations continued on Wednesday over a proposal that would allow the Chinese-owned social media app TikTok to continue operating in the United States, a backlash was forming in Washington to the deal.Over the weekend, TikTok had offered a proposal to the Treasury Department that aimed to address the Trump administration’s concerns that the app could give the Chinese government access to sensitive data. The proposal included bringing on Oracle, the Silicon Valley business software company, as a technology partner to TikTok. But Oracle would not own TikTok outright and the app would not transfer ownership of its valuable recommendation algorithm to Oracle.That proposal is now under review by a secretive, multi-agency national security panel, the Committee on Foreign Investment in the United States, which is expected to submit its recommendation to President Trump for a final decision on Thursday.But while the proposal winds its way through the review process, some lawmakers are increasingly up in arms about it. In a letter on Wednesday, Republican senators including Marco Rubio of Florida, Thom Tillis of North Carolina and John Cornyn of Texas criticized the proposal, saying that any deal that left a Chinese company — in this case,
WASHINGTON — Federal Reserve officials expect to leave interest rates near zero for years — through at least 2023 — as they try to coax the economy back to full strength after the pandemic-induced recession, based on their September policy statement and economic projections released Wednesday. The announcement also reinforced the central bank’s August pledge to tolerate slightly higher price gains to offset periods of weak inflation, underscoring that Chair Jerome H. Powell and his colleagues plan to be extraordinarily patient as they try to cushion the economy in the months and years ahead.The policy setting Federal Open Market Committee “expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee’s assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time,” officials said in their statement.“Effectively we’re saying rates will remain highly accommodative until the economy is far along in its recovery,” Mr. Powell said at a news conference following the meeting.Mr. Powell noted that while the economy has picked up, the recovery in household spending probably reflected “substantial and timely” fiscal support, and said services that
WASHINGTON — Federal Reserve officials expect to leave interest rates near zero for years — through at least 2023 — as they try to coax the economy back to full strength in the wake of the pandemic-induced recession, based on their September policy statement and economic projections released Wednesday. The announcement, which also reinforced the central bank’s August pledge to tolerate slightly higher price gains to offset periods of weak inflation, underscores that Chair Jerome H. Powell and his colleagues plan to be extraordinarily patient as they try to cushion the economy in the months and years ahead.The policy setting Federal Open Market Committee “expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with the Committee’s assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time,” officials said in their statement.The Fed slashed interest rates to near zero almost exactly 6 months ago, as the pandemic first swept the United States and markets tiptoed on the brink of disaster. Such low interest rates help to spur economic growth by encouraging home refinancing, business investment and other types of
WASHINGTON — A World Trade Organization panel said Tuesday that the United States violated international trade rules by imposing tariffs on China in 2018 in the middle of President Trump’s trade war.The panel of trade experts sided with a complaint that China had filed, which argued that Mr. Trump’s tariffs violated several global rules, including a provision that requires all W.T.O. members to offer equal tariff rates among the body’s trading partners.Mr. Trump broke with that tradition. During his trade war with China, the president imposed tariffs on more than $360 billion worth of Chinese products, in an effort to persuade the country to strengthen its intellectual property protections and make other changes to policies that Mr. Trump said put American workers at a disadvantage. The administration drew on an American legal provision — called Section 301 — to impose the tariffs, which allows the president to restrict foreign commerce that unfairly burdens the United States.The effect of the ruling remains unclear. The United States and China signed a trade deal in January, but the bulk of the tariffs imposed by the Trump administration remain in place, covering more than half of China’s exports to the United States.In a statement,
WASHINGTON — A record-low share of Americans were living in poverty, incomes were climbing, and health insurance coverage was little changed in 2019, a government report released on Tuesday showed — though the circumstances of many have deteriorated as pandemic lockdowns and industry disruptions have thrown millions out of work.The share of Americans living in poverty fell to 10.5 percent in 2019, the Census Bureau reported, down 1.3 percentage points from 2018. That rate is the lowest since estimates were first published in 1959.Household incomes increased to their highest level on record dating to 1967, at $68,700 in inflation-adjusted terms. That change came as individual workers saw their earnings climb and as the total number of people working increased.Methodology changes made after 2013 also make comparing data across time tricky. But even adjusting for those differences, the 2019 income figures appeared to be the highest on record, based on Census estimates.Interviews for this year’s income and poverty report were disrupted by the coronavirus pandemic, a Census official said. Some economists warned that the disruptions could have made the data look too rosy.
WASHINGTON — The Trump administration on Monday announced new restrictions on imports of apparel, hair products and technology goods from certain Chinese companies, saying those entities had used forced labor in the Xinjiang region to make their products.The measure would allow U.S. customs agents to detain and potentially destroy goods brought into the country that are made by the named companies or entities in Xinjiang, a far western region where China has detained as many as a million Uighurs and other ethnic minorities in internment camps and prisons.While the move is likely to further inflame tensions between the United States and China, it stops short of a more sweeping ban on cotton and tomatoes produced in Xinjiang that the administration was poised to announce last week. That measure had alarmed apparel companies that use Chinese cotton and spurred concern among some administration officials, who were worried it could hurt economic relations with China and prompt possible retaliation on American-grown cotton, according to people familiar with the internal discussions.In a briefing with reporters on Monday, officials with the Department of Homeland Security said that the broader measure was undergoing further legal analysis, and that more announcements could soon follow.The so-called withhold
Facebook is facing the prospect of not being able to move data about its European users to the United States, after European regulators raised concerns that such transfers do not adequately protect the information from American government surveillance.The social network said on Wednesday that the Irish Data Protection Commission had begun an inquiry into its movement of data on European users to the United States. The Irish regulator oversees Facebook’s data practices in Europe and can fine it up to 4 percent of its global revenue for breaking European data protection laws.The Silicon Valley company may now have to overhaul its operations to keep data on Europeans stored within the European Union, an immensely complicated task given the way that Facebook moves data among data centers around the world.The inquiry, earlier reported by The Wall Street Journal, is the first major fallout of a European Union high court decision in July that invalidated a key trans-Atlantic agreement called Privacy Shield. That agreement between the United States and European Union had allowed businesses to send data between the two regions, but the court struck it down, saying Europeans did not have sufficient protections from American spy agencies.The ruling affects thousands of
A federal judge has struck down key portions of a Trump administration rule that made it more difficult for workers to win lawsuits against companies over violations committed by contractors and franchisees.The rule, which the Labor Department proposed last year and made final in January, raised the bar for employees of a franchise like Burger King or Subway to win a judgment against the parent company if the restaurant violated minimum-wage or overtime laws.Because the contractors and franchisees that directly employ workers often have limited resources, suing the larger companies is often the best hope for workers seeking to recover wages they are owed.In a decision on Tuesday in U.S. District Court in Manhattan, Judge Gregory H. Woods largely sided with the more than 15 states that challenged the rule. He said the Labor Department had departed from the statute governing minimum-wage and overtime rules without adequate justification, rendering the rule arbitrary and capricious.Judge Woods also said the department had failed to “make more than a perfunctory attempt” to consider the costs of the new rule to workers. All told, he wrote, the new approach to liability for parent companies was “flawed in just about every respect.”A Labor Department spokeswoman
WASHINGTON — The Trump administration is weighing a ban on some or all products made with cotton from the Xinjiang region of China, a move that could come as soon as Tuesday as the United States looks to punish Beijing over alleged human rights violations, three people familiar with the matter said.The potential ban, which could affect a wide range of apparel and other products, comes amid widespread concerns about the use of forced labor in Xinjiang, where China has carried out a crackdown against mostly Muslim minorities, including a campaign of mass detentions.The scope of the order remains unclear, including whether it would cover all cotton products shipped from Xinjiang or China, or potentially extend to items that contain Xinjiang cotton and are shipped from third countries.But any move to block cotton imports could have huge implications for global apparel makers. Xinjiang is a major source of cotton, textiles, petrochemicals and other goods that feed into Chinese factories. Many of the world’s largest and best-known clothing brands rely on supply chains that extend into China, including using cotton and textiles produced in Xinjiang, in the country’s far west.Studies and news reports have documented how groups of people in Xinjiang,
SURAT, India — The hit that India’s dreams have taken from the coronavirus pandemic can be found in the hushed streets of Surat’s industrial zone.You can see it in textile mills that took generations to build but are now sputtering, eking out about a tenth of the fabric they used to make.You can see it in the lean faces of the families who used to sew the finishing touches on saris but, with so little business, are now cutting back on vegetables and milk.You can see it in the empty barbershops and mobile phone stores, which shoppers have deserted as their meager savings dwindle to nothing.Ashish Gujarati, the head of a textile association in this commercial hub on India’s west coast, stood in front of a deserted factory with a shellshocked look on his face and pointed up the road.“You see that smokestack?” he asked. “There used to be smoke coming out of it.”
March 16 was the last day David Engelsman walked into the Jackrabbit, an acclaimed restaurant at the boutique Duniway Hotel in downtown Portland, Ore. The lead server on morning duty, Mr. Engelsman was told before his shift started that his job was no longer needed. He left early, at 10:30 a.m. The restaurant didn’t reopen the next day.A total of 330 workers at the Duniway and another Hilton property across the street have been let go since then. With two autistic children, a wife with a severe heart condition and now no health insurance, Mr. Engelsman has devoted much of his time to the fight by his union, UNITE HERE, to get Hilton to make health-plan contributions for laid-off workers until the end of the year. “We’re left standing here with nothing,” he said. “I know I sound dramatic, but it is dramatic.”With 11.5 million jobs lost since February and the government’s monthly report Friday showing a slowdown in hiring, stories like this have become painfully common. When companies dispatched office staff to work remotely from home, cut business trips and canceled business lunches, they also eliminated the jobs cleaning their offices and hotel rooms, driving them around town and