Four Factors to Watch
1. Infrastructure Bill
Senate Majority Leader Chuck Schumer said the Senate might continue working into its August recess to pass a bipartisan infrastructure plan as well as a budget resolution that would allow Democrats to push through legislation related to a wide range of priorities without Republican support. He says the goal is to work with the White House to convert the $1.2 trillion infrastructure plan into legislation. The other plan Democrats are working to pass is a broad framework featuring funding for childcare, healthcare, and the environment. The Senate’s recess is from August 9 to September 10.
2. COVID-19 Case Numbers
In the last two weeks, the seven-day average of daily COVID cases increased from 11,674 to 16,208. The Delta variant is largely believed to be causing the resurgence and is reportedly 55% more transmissible than Alpha, the variant that originated in the U.K. and dominated the U.S. Seven-day averages of COVID cases increased in California and Texas in the last two weeks:
- California: from 942 to 1,675
- Texas: from 1,219 to 1,486
First-time jobless claims rose slightly to 373,000 from the previous week’s total of 371,000. The Dow Jones projection was lower at 350,000. The level of continuing claims dropped 145,000 to 3.34 million, which is its lowest level since March of last year. The four-week moving average for continuing claims dropped 44,500 to 3.44 million, its lowest rate since March 2020.
The consumer price index for June will be released tomorrow. Economists predict reports that core prices rose 4% in the 12 months through June, which is in addition to the spike in May when prices surged significantly. Wholesale prices will be revealed on Wednesday and are expected to slow slightly from the previous month. The producer price index, excluding food and energy, will likely reveal a half-percent rise for June compared to a 0.7 percent rise in May.
International shipping costs are adding to inflationary pressures. The cost to ship a boxload of goods to the U.S. from China is now close to $10,000, which represents an increase of 229% from a year ago. The recently published Drewry World Container Index, a composite index reflecting eight major trade routes, rose to $8,796, a 333% rise from a year ago. Rates are expected to increase further in the coming weeks.
5. COVID Vaccine Update
Pfizer and manufacturer BioNTech announced last Thursday that they are developing a COVID-19 booster shot to combat the Delta variant. The companies say that while they believe a third shot of their current two-dose vaccine provides the highest levels of protection against all currently known variants, including the Delta, they are developing an update to ensure the greatest possible protection.
Delta is expected to cause another surge in new coronavirus cases this fall. States with the lowest vaccination rates will be hit hardest. Currently, there are about 1,000 counties in the U.S. that have COVID vaccination rates under 30%, mostly concentrated in the Southeast. In Missouri, for example, only four counties have vaccination rates above 40%.