This report is a summary of third-party economic research and perspectives to foster communication with business and economic development stakeholders during the COVID-19 crisis.
Key Economic Insights
- Global: Global trade bounced back to a record high early this year. U.S. importers absorbed more than 90% of additional costs resulting from the 20% U.S. tariff on Chinese goods.
- U.S.: U.S. Treasury calls for stricter cryptocurrency compliance with IRS.
- Ohio: Ohio sees increase in COVID-19 vaccinations after offering $5 million lottery.
Global trade bounced back to a record high early this year, although service industries are still a shadow of their pre-pandemic selves, according to UNCTAD. U.S. importers absorbed more than 90% of additional costs resulting from the 20% U.S. tariff on Chinese goods, and U.S. exporters also absorbed most of the costs from tariffs imposed by China, according to the report by Moody’s.
The annual UK inflation rate more than doubled in April, as a rise in energy and clothing costs drove prices higher. The European Parliament has signaled fierce opposition to advancing a market-access treaty with China by declaring it “frozen”, in a sign of mounting tensions between the bloc and Beijing. Australian company Graphene Manufacturing Group announced an aluminum-ion battery that can charge 10X faster than today’s lithium-ion units, while lasting much longer and needing no cooling.
Initial unemployment claims through regular state programs dropped to 444,000 last week, marking a new low since the pandemic hit in mid-March 2020, but continuing claims rose by 111,000 to 3.75 million. Following April’s dismal jobs report, and anecdotes that workers were opting to remain on UI benefits rather than return to work, at least 22 states have moved to cut off beefed-up benefits over the summer.
The Department of Treasury released new spending rules for $350 billion in direct, flexible aid to states, counties, cities and tribal governments as part of the American Rescue Plan Act. The State and Local Coronavirus Fiscal Recovery Fund notes that local and state governments may use the funds for “direct assistance to households and populations facing negative economic impacts due to COVID-19”. The Treasury Department also announced that it is taking steps to crack down on cryptocurrency markets and transactions, and said it will require any transfer worth $10,000 or more to be reported to the Internal Revenue Service. The Federal Reserve is moving forward to develop its own digital currency, announcing it will release a research paper this summer that explores the move further.
U.S. health officials try to reach ambivalent Americans by offering vaccines in restaurants, factories and other unlikely locations. Half of school districts nationwide now offer school fully in person, but some classrooms remain largely empty. Kroger announced that fully vaccinated customers no longer need to wear a mask in its facilities unless otherwise required by state or local jurisdiction.
Home prices have shot up in the past year, driven by limited supply, record-low interest rates and buyer demand. Local buyers bid against one another as well as against investors who now comprise about a fifth of annual home sales nationally. Demand is so fevered, and construction costs are climbing so quickly, that overwhelmed builders are suppressing orders and shifting away from fixed prices. Airlines are scrambling to add staff and upgrade technology as they face prolonged call center wait times while tackling a surge in air travel following COVID-19 vaccinations.
Electric car maker Fisker finalized its vehicle-assembly deal with Foxconn Technology including plans to open a U.S. plant in 2023. Ford struck a deal with SK Innovation to form a joint venture to build electric-car batteries in the U.S. Ford will halt or cut production at eight North American plants for varying periods of time through June due to an ongoing shortage of semiconductor chips. U.S. banks could cut as many as 200,000 jobs in the next decade as they try to boost efficiency to compete with fintech and other upstarts encroaching on their territory.
Ohio Employment & Economic Insights
The unemployment rate remained at 4.7% for April 2021 versus 6.1% for the U.S. Ohio’s April 2020 rate was 16.4%. Gov. DeWine’s $5 million lottery to encourage vaccinations appears to be an early win. State health officials said more than 25,400 Covid-19 vaccine shots were administered two days after the program was announced, making it the highest vaccination day in three weeks.
Central Ohio business and government leaders met with Amtrak executives for a roundtable discussion of a proposed plan for passenger-rail service that would connect Columbus with Cleveland, Dayton and Cincinnati by 2035. FlyOhio, a collaboration of public, private and academic institutions that operates out of Springfield, was chosen to participate in NASA’s Advanced Air Mobility National Campaign.
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