Economy

American consumers feel lousy about the state of the economy and even worse about the prospects for the future. The University of Michigan’s index of consumer sentiment fell to a final read of 58.4, 10.4 percent lower than the April reading of 65.2 and below the midmonth preliminary May score of 59.1. Economists had expected that the index would hold on to its midmonth level and not decline further. Consumers have been battered by record-high gas prices in May. The average price of gas made new records almost every day for the last two weeks, culminating at $4.60 a gallon on Thursday. A month ago, a gallon of gas averaged $4.134 in the U.S. The Biden administration’s efforts to bring down gas prices and tame inflation have been largely ineffective, undermining public faith in the competence of current political leadership. Consumer views on buying conditions for durable goods reached their worst level in May since the University of Michigan began asking about them in 1978. … [Read more...] about Consumer Sentiment Crashes to Worst Level in Over 10 Years

The gross domestic product (GDP) of India, which is among the countries with the longest school closures during the COVID-19 pandemic, would see the highest decline in South Asia due to learning losses for the young, a new working paper published by the Asian Development Bank (ADB) has reckoned. Starting with a $10.5 billion dent in 2023, the country’s economy could take a nearly $99 billion hit by 2030, translating into a 3.19% reduction in GDP from the baseline growth trends, according to the paper on ‘Potential Economic Impact of COVID-19 related School Closures’. India may thus account for over 10% of the global GDP decline of $943 billion estimated by the ADB on account of earning losses in 2030, with jobs for skilled labour expected to decline by 1%, and unskilled labour by 2% that year. “India has notable enrolment in secondary education and among students in rural areas. Pandemic-induced school closures have also been more extensive there,” the paper noted. Economies … [Read more...] about India’s GDP to take a big hit due to pandemic-linked learning losses for students: ADB study

Moody’s Investors Service has lowered India’s growth forecast for calendar year 2022 to 8.8% from 9.1% projected in March, citing the rise in crude oil, food and fertilizer prices that will weigh on household finances and spending even as interest rate increases to curb inflation will slow the momentum in demand recovery. Moody’s said it expected inflation to average 6.8% through 2022, but added that the Indian economy seemed strong enough to maintain solid growth momentum — unless global crude oil and food prices rise further. “Although we expect headline inflation rates to ease through next year, price levels remain high and will weigh on consumer demand,” Moody’s said about global price pressures, noting that inflation and rising rates would temper India’s economic growth as well. “High-frequency data suggest that the momentum from Q4 2021 [October to December] carried through into the first four months of this year because of strong reopening momentum,” the firm said about … [Read more...] about Moody’s pares India’s 2022 growth hopes to 8.8%

Oil prices rose on Thursday, extending a cautious rally this week on signs of tight supply while the European Union (EU) wrangles with Hungary over plans to ban imports from Russia, the world's second-largest crude exporter, after it invaded Ukraine. Brent crude futures gained 87 cents, or 0.8%, to $114.90 a barrel at 1001 GMT. U.S. West Texas Intermediate (WTI) crude futures climbed $1.02, or 0.9%, to $111.35 a barrel. A bigger-than-expected drawdown in U.S. crude inventories in the week to May 20, following soaring exports, buoyed the market on Wednesday. U.S. refiners picked up the pace of activity, boosting overall capacity use to the highest levels since before the pandemic. "The fundamental backdrop ... is getting price supportive as the driving season is approaching and will turn even more bullish once the EU sanctions on Russian oil sales are endorsed by all parties involved," PVM Oil's Tamas Varga said. European Council President Charles Michel on Wednesday said he was … [Read more...] about Oil climbs on tight supply, prospect of EU ban on Russian supply

The European Union (EU) can still strike a deal on a Russian oil embargo in the coming days or look to "other instruments" if no agreement is reached, Germany's Economy Minister Robert Habeck said at Group of Seven talks in Berlin on May 26. The EU executive European Commission proposed the embargo as the harshest sanction yet on Russia after its invasion of Ukraine . But talks have failed to produce a breakthrough so far, with Hungary, Moscow's closest ally in the EU, vetoing the move. Mr. Habeck said all EU countries had to reduce their oil dependency. "That includes Hungary. If you take that as the basis of discussion, then an agreement should be possible. If you include other topics into the question of an oil embargo it will be very, very difficult," he said. Also Read Explained | How dependent is Europe on Russia for its energy needs? "I know that intensive discussions are ongoing. In five days, we have the next EU Council, I assume that that is the … [Read more...] about European Union can agree Russia oil embargo or seek alternative: Germany

Voters do not approve of President Biden in almost any key area, a Harvard-Harris survey released this week found. Biden’s overall approval rating is underwater, as 55 percent disapprove (40 percent do so strongly), compared to 40 percent who approve. The president does not fare much better on individual issues as he continues to lose support month by month. Just 35 percent, for example, approve of his handling of the economy, reflecting a three-point drop in the last month. As a comparison, 56 percent approved of former President Donald Trump’s handling of the economy right has he departed office in January 2021: Stimulating Jobs Fighting Terrorism U.S. President Joe Biden delivers the commencement address during the graduation and commissioning ceremony at the U.S. Naval Academy Memorial Stadium on May 27, 2022 in Annapolis, Maryland. 1,100 sailors and Marines graduated from the service academy. (Chip Somodevilla/Getty Images) Immigration Foreign … [Read more...] about Poll: Voters Reject Joe Biden in Most Key Areas

Sen. Joe Manchin (D-WV) on Friday revived Build Back Better negotiations with Republican senators ahead of the November midterm elections. The negotiations, which stalled between Manchin and the White House in December, include increasing the corporate tax rate from 21 percent to 25 percent, provisions meant to address global warming, and subsidies for the green energy sector, Axios reported. Manchin is negotiating with Sens. Kevin Cramer (R-ND), Bill Cassidy (R-LA), Mitt Romney (R-UT), and Chuck Schumer (D-NY) but not with President Joe Biden, a key individual in the dealmaking process. “There are options that are going to be there that you might have to consider… I was as honest as I could be,” the West Virginia senator said after meeting with a number of GOP senators, most of whom are closely associated with the Republican establishment. So far the negotiations between the establishment Republicans and the Democrats have been “respectful” and “encouraging, to a certain … [Read more...] about Joe Manchin Revives ‘Build Back Better’ Talks with GOP Before Midterms

Since the last annual meeting of the World Economic Forum, the course of history has changed dramatically. Russia invaded Ukraine, shaking the European Union, which was established to prevent war from returning to the continent, to its very core. Even when the fighting stops, as it eventually must, the situation will never revert to the status quo ante . Indeed, the Russian invasion may turn out to be the beginning of World War III, and our civilisation may not survive it. The invasion of Ukraine did not come out of the blue. The world has been increasingly engaged over the past half-decade, or longer, in a struggle between two diametrically opposed systems of governance: open society and closed society. Let me define the differences as simply as I can. In an open society, the role of the state is to protect the freedom of the individual; in a closed society, the role of the individual is to serve the rulers of the state. Other issues that concern all humanity – … [Read more...] about We must defeat Putin – the fate of civilisation depends on it

Rishi Sunak has refused to rule out a further emergency cost-of-living package next year despite alarm among some Tories at the impact on the public finances of the latest measures. The Chancellor responded to weeks of mounting pressure over soaring energy bills with the announcement of a £21 billion giveaway to households, partly paid for by a £5 billion levy on the profits of oil and gas companies. In the Commons on Thursday he told MPs the Government could not “sit idly by” while families across the country struggled to make ends meet. However there was anger from some Conservatives , who said the “windfall tax” on the energy giants – which Labour had been pressing for since the start of the year – was “throwing red meat to socialists”. There were also concerns that a £400 discount on energy bills for every household in the country, regardless of how well off they are, would further fuel inflation which is already heading towards 10%. Recommended … [Read more...] about Sunak refuses to rule out new cost-of-living support next year

Boris Johnson has said the Government’s emergency cost-of-living support package is a “big bazooka” which will support families until the surge in energy prices abates. The Prime Minister acknowledged the country still faced a “bumpy time” due to the soaring costs of oil and gas, but said he was confident it would emerge in a “much, much stronger position”. Earlier, Chancellor Rishi Sunak – who on Thursday announced a further £21 billion of support for households – indicated that he could not rule out the need for further measures if global prices remain high. But speaking during a visit to Stockton-on-Tees, Mr Johnson appeared to suggest the measures set out in the Commons – with up to £1,200 for eight million homes across the country – should be enough. “What we are doing now is making sure we support people through tough times. It’s a big bazooka,” he said in a pooled clip for broadcasters. Recommended What Rishi Sunak announced to tackle the … [Read more...] about ‘Big bazooka’ support package will get UK through energy crisis, says PM