The recovery of U.S. GDP, continued easy money policies from the Fed, an infrastructure agreement advance, jobless claims creep down, a push to increase domestic contracting, and grant funds for Connecticut nonprofits are among the top business news items this morning.
The U.S. economy has surpassed pre-pandemic levels, with the GDP increasing 1.6 percent during the second quarter of 2021 and 6.5 percent on an annualized basis. The recovery has been fueled by factors such as increased consumer spending and business investments, but other economic factors remain depressed, including a labor force down about 7 million compared to pre-pandemic levels.
The Federal Reserve is keeping its benchmark interest rates near zero, saying the economy is recovering from the COVID-19 pandemic but has a ways to go. Economists are also interpreting the Fed’s remarks to indicate that a tapering of bond purchases will likely begin later this year.
The White House and a bipartisan group of senators have come to a consensus on a $1 trillion compromise bill for infrastructure projects, including $550 million in new spending for physical projects to be completed over the next five years. The Senate has agreed to advance the measure in an initial vote.
Initial jobless claims fell to 400,000 last week, a drop of 24,000 from the previous week. The labor market remains uncertain amid increasing COVID-19 cases and challenges in finding workers.
The Biden administration is proposing that the federal government increase its contracts with domestic companies, updating the Buy American Act to increase the share of domestic purchases from 55 percent to 75 percent over the next decade. The proposed rule will undergo two months of public comment before an official change is published.
Connecticut has awarded $3.8 million in grant funds to 97 nonprofit organizations, with the money intended to improve security infrastructure. The program was announced in the spring with the intent of strengthening protections at sites considered to be more vulnerable to violence, including terrorist attacks and hate crimes.