The Federal Reserve signaling its plans on tapering and interest rate hikes, increased unemployment claims, Democratic divisions on a major spending bill, a worsening semiconductor shortage, a planned vote to extend Governor Ned Lamont’s emergency powers, and a call to cease efforts to recover unemployment overpayments in Connecticut are among the top business news items this morning.
Federal Reserve officials signaled that they are preparing to move away from its pandemic-related support strategy, and could taper its asset purchases as early as November. The Fed is also likely to raise interest rates next year after keeping them near zero since the start of the COVID-19 pandemic.
Initial jobless claims increased to 351,000 last week while continuing claims for the week prior rose to 2.84 million. The number of people receiving some sort of unemployment claim fell to 11.25 million.
President Joe Biden is urging Democrats to resolve disagreements within the party on a $3.5 trillion proposal for a broad range of social and environmental initiatives. Some centrist lawmakers are wary of the price tag, while several progressive members are threatening to withhold their votes on a $1 trillion bipartisan infrastructure measure unless it is tied to the larger bill.
Analysts suggest the semiconductor shortage is worsening as manufacturers use up available stockpiles and encounter difficulties in finding supplies. The issue is being compounded by factory shutdowns in Asia due to COVID-19, and one forecast anticipates that global automakers will produce 7.7 million fewer vehicles this year.
Governor Ned Lamont is calling the Connecticut General Assembly to session next week to vote on whether to extend his emergency powers, which are set to expire Sept. 30, through Feb. 15. Lamont is seeking to keep several executive orders in place, including ones that mandate COVID-19 vaccination for state employees and workers in several industries.
Two Connecticut lawmakers are calling for the state’s Department of Labor to stop trying to recoup unemployment benefits it said were paid in error. The legislators, who co-chair the Labor and Public Employees Committee, are urging the department to provide debt forgiveness to residents who unintentionally received benefits they were not eligible for.