US economy to recover twice as fast as expected, report says: live updates

The U.S. economy will accelerate almost twice as fast as expected this year as the next pass of President Biden’s $ 1.9 trillion stimulus package, combined with a rapid vaccine rollout, triggers a powerful recovery from the pandemic, the Organization for Economic Co-operation and Development said on Tuesday.

But countries that stumble in the pace of their immunization campaigns, especially those in Europe, risk falling behind in the global recovery, as failure to counter the spread of the virus forces governments to keep parts of it shut. their savings, thus delaying the ability of people to resume normal lives, the organization said.

In its half-year outlook, the organization said the United States will grow 6.5% this year, up sharply from the 3.2% forecast in December. The boom in the world’s largest economy will generate enough momentum to help raise global output by 5.6%, after contracting 3.4% in 2020.

China, which contained the virus earlier than other countries, remains a big global winner, with 7.8% growth expected.

While a global recovery is in sight, government spending to revive their economies will have a limited impact unless authorities accelerate national vaccine deployments and relax containment measures for the virus, the report added. If vaccination programs are not quick enough to reduce infection rates, or if new variants become mainstream and require vaccine changes, consumer spending and business confidence would be affected.

“Stimulation without vaccinations won’t be as effective because consumers won’t go out and do normal things,” Laurence Boone, OECD chief economist, said at an online press briefing. “It’s the combination of health and fiscal policy that counts.”

This is especially the case in Europe, and Germany and France in particular, where a mix of poor public health management and slow vaccination programs is weighing on a recovery, despite the support of billions of people. government dollars. Such spending “will not be fully effective until the economy reopens,” Ms. Boone said.

The eurozone economy is expected to grow 3.9% this year, slightly more than expected in December but slower than in the United States. In Britain, which ramped up the rollout of national vaccination late last year, the economy is expected to grow 5.1%, compared to 4.2% forecast.

India’s economy is expected to grow 12.6% after falling 7.4% in 2020, the organization added.

Stocks around the world rose on Tuesday as bond yields retreated from their recent highs. Tech stocks recovered, leading Wall Street to the upside.

The S&P 500 rose 1% at the start of the session, while the high-tech Nasdaq composite rose 2.5%. The Stoxx Europe 600 index rose 0.9%, led by utilities and tech stocks.

The yield on 10-year US Treasuries fell 6 basis points, or 0.06 percentage point, to 1.53%.

Tech stocks have borne the brunt of equity market volatility in recent weeks amid rising bond yields and inflation fears. There have been concerns that stronger economic growth will lead to inflation and that central bankers will respond by tightening monetary policy. On Monday, the Nasdaq fell 2.4%, ending the day more than 10% from its January high. Such a large drop is known as a correction. The S&P 500 fell 0.5% on Monday.

Those concerns appeared to have been put aside on Tuesday, as the Organization for Economic Co-operation and Development said it expected the U.S. economy to grow 6.5% this year due to the stimulus package. $ 1.9 trillion from the Biden administration and the growing availability of the coronavirus vaccine. That’s more than double the pace of growth the organization predicted in December.

In other encouraging economic news, there was an unexpected increase in German exports in January. Citigroup analysts said they expected the pandemic and supply chain disruptions to cause exports to drop alongside imports. Instead, the data poses a “big upside risk” to their GDP forecast for the first three months of the year, analysts said.

It remains to be seen whether more market participants will buy into the central bankers’ message that the risks of high and sustained inflation are low. On Monday, Janet L. Yellen, Secretary of the Treasury and former Chairman of the Federal Reserve, also said she did not believe the stimulus package would lead to higher inflation. “I really don’t think that will happen,” Ms. Yellen told MSNBC, adding that she expected the economy to return to full employment by next year. She added, however, that there were tools available if spending turned out to be inflationary.

On Wednesday, US inflation data for February will be released. Economists polled by Bloomberg predict that the annual inflation rate will drop from 1.4% to 1.7%.

The basic experience of sitting in a single row of cars, talking into an occasionally scrambled intercom, and getting up at a window to pay for your food before driving off is about to be demonstrably changed to the first time in decades, Julie Creswell is reporting for The New York Times.

“Drive-thru has been one of those places that hasn’t changed in decades,” said Ellie Doty, North American Marketing Director for Burger King. “But with Covid, we are seeing the dramatic acceleration in the directions we were already going.”

Applebee’s is testing its first drive-thru in Texarkana, Texas. Shake Shack is experimenting with a number of new designs and plans, including walk-in windows and curbside pickup.

More and more restaurants are trying to encourage customers to use ordering apps, which improve ordering accuracy. They’re also trying to figure out how best to speed up consumers through the drive-thru or pickup process.

Some restaurants, like McDonald’s and Burger King, are adding multiple drive-through lanes. Burger King performs three-way testing in the United States, Brazil and Spain. In the United States and Spain, the third route is “express” for advance orders made through the app. In Brazil, the track takes delivery drivers to a pickup area with lockers or shelves for food.

Burger King is also looking to propel its drive-thru services into the future with a Big-Brother-type artificial intelligence system, Deep Flame.

Right now, about half of Burger King’s drive-throughs with digital menu boards use Deep Flame technology to suggest foods that are particularly popular in the area on that day. It also uses outside factors, like the weather, to highlight things like an iced coffee on a hot day.

Burger King is testing Bluetooth technology that will be able to identify Burger King loyalty program customers and display their previous orders. If a customer ordered a small Sprite and a Whopper with cheese, hold the pickles, the last three visits Deep Flame will calculate that there is a good chance the customer will want the same order again.

Much attention is being paid to carbon capture as a means of achieving the goals of the 2016 Paris climate agreement. The idea seems deceptively simple: to divert pollutants before they can escape. escape into the air and bury them deep in the ground where they cannot harm.

But the technology turned out to be hugely expensive, and it didn’t catch on as quickly as some supporters hoped, Stanley Reed reports for The New York Times.

Oil giant BP is running a project in England to collect emissions by pipeline from a cluster of chemical factories in the north-east of England and send them to a reservoir deep under the North Sea. BP hopes it can reach a scale sufficient to make a profitable business.

BP and its partners are proposing to build a very large power station powered by natural gas near a steelworks closed at the mouth of the river. The plant would help replace Britain’s aging fossil-fueled power plants and provide essential back-up electricity when the country’s growing fleet of offshore wind farms is heated. The equipment would remove carbon dioxide from the plant’s exhaust gases.

Pipes would cross the area to collect more carbon dioxide from a fertilizer plant and a plant that makes hydrogen, which is gaining favor as a low-carbon fuel. BP also plans to connect other factories in the region. The pipes would carry the carbon dioxide 90 miles below the North Sea, where it would be pumped beneath the seabed in porous rocks.

Four other oil giants – Royal Dutch Shell, Norwegian Equinor, French Total and Italian Eni – are also investors in the plan, although the final green light awaits a financial commitment from the British government. The price of the initial phase could approach $ 5 billion.