A return of paid leave to a major piece of domestic legislation, a deceleration of Federal Reserve bond purchases, the Treasury Secretary’s expectations on inflation, falling unemployment claims, a sharp drop in productivity, a shortage of truck drivers exacerbating supply chain issues, and a warning about higher heating costs in Connecticut are among the top business news items this morning.
National
Paid leave has been returned to a $1.75 trillion social policy and environmental bill after being dropped during negotiations aimed at increasing the bill’s odds of passing Congress. The move restores a proposal for a federal program offering four weeks of paid family and medical leave.
The Federal Reserve has announced that it plans to slow its bond purchases as it retreats from the stimulus efforts it introduced during the COVID-19 pandemic. Starting this month, the Fed will slow start paring back its $120 billion a month asset purchases by $15 billion a month, putting it on track to stop purchases altogether by June 2022.
Treasury Secretary Janet Yellen says she is confident that inflation will ease in the second half of next year as economic pressures on pricing are resolved. Yellen said she believes strong consumer demand and pressure on global supply chains is driving inflation, which will stabilize once the latter issue is cleared up.
Initial jobless claims continue to fall, with 269,000 first-time claims filed last week. Continuing claims in the prior week fell slightly more than 2.1 million.
Business trends
Productivity suffered its sharpest decline since 1981, falling 5 percent in the third quarter of 2021. Unit labor costs, or the price of labor per single unit of output, grew 8.3 percent as businesses continued to raise compensation to compete for workers.
A shortage of truck drivers is helping to compound persistent supply chain challenges. A trade group estimates that there are 80,000 fewer truck drivers on the road than what is needed, with other issues such as inefficiencies in operational models and burnout among current drivers.
Connecticut
Eversource is warning customers that natural gas heating prices could increase substantially this winter due to factors such as higher demand and supply chain issues. The utility said these prices might jump 14 percent starting this month, while a corresponding hike to electricity rates could be forthcoming in 2022.
