What’s up? (July 11-17)
The government has signaled that a key measure of inflation in June rose at its fastest rate in 13 years, casting doubt on the White House’s claim that post-pandemic price increases are “transient.” The spike in inflation is clearly linked to the rapid reopening of the economy, which created mismatches between supply and demand. But there is a debate about how long it will stay high: will it be temporary, as most policymakers believe, or will it stay? Federal Reserve Chairman Jerome H. Powell on Wednesday admitted inflation had risen “markedly” and said it would likely remain high for about six months. Still, the Fed is unlikely to raise interest rates anytime soon.
Big Tech makes new bets
Facebook, Netflix and Apple are entering new territories. Facebook has joined the list of platforms, including Snapchat and YouTube, which attempt to woo online creators with cash. It plans to pay out $ 1 billion by the end of 2022. Netflix plans to overtake television and film to move into video games, Bloomberg reported. And Apple is reportedly working on a feature that will allow consumers to pay for their Apple Pay purchases in installments. Twitter, on the other hand, is going in the opposite direction: it will end Fleets, the ephemeral tweet feature it introduced last year.
Chinese growth slows
China announced Thursday that its economy grew 7.9% in the second quarter. This was robust growth, but down from around 18.3% in the first three months of the year. Part of the reason for the decline in growth is a statistical oddity. (The blockbuster rate earlier in the year partly reflected the sharp drop in economic output in early 2020.) But the rest of the world is watching closely for signs of a significant slowdown in China’s economy. As well as being the world’s second-largest economy, China has emerged from lockdowns faster than other major countries, so the pace of its economic recovery may provide some indication of how quickly other countries’ economies will rebound. .
And after? (July 18-24)
Another billionaire goes to space
Jeff Bezos, who just stepped down as Amazon’s chief executive on Tuesday, is expected to become the second founder of a billionaire rocket company to go to space this month. (Richard Branson, the British billionaire who runs various Virgin companies, beat him by nine days.) Mr. Bezos will travel in a reusable suborbital capsule built by his company, Blue Origin. An anonymous bidder paid $ 28 million to go with it but canceled “due to scheduling conflicts,” according to Blue Origin, so an 18-year-old whose family also bid on the auction will take headquarters. Mr. Branson’s space trip was the first of its kind that his company Virgin Galactic plans to offer customers, and Mr. Bezos’ flight will be Blue Origin’s first manned space flight. While there are skeptics about the need for commercial spaceflight, billionaire flights are at least a small step towards a new business for tourism (and liability insurance).
Airline progress report
The earnings reports from United, Southwest and American Airlines will serve as the progress report for postpandemic travel to the United States. Delta Air Lines, which reported its first profit since the start of the pandemic last week, said domestic leisure travel had fully returned to 2019 levels. But there is still a huge question whether companies will continue. to limit travel, perhaps permanently. Delta said the number of its business travelers was still down 60% in June from 2019 levels, but this is an improvement from 80% in March.
Stands but no fans
The Olympics begin on Friday, but due to a sudden spike in Covid-19 cases in Tokyo, no spectators will be allowed at most events. Hosting the Olympics is seldom profitable for cities at the best of times. Every Olympic Games since 1960 have been over budget, according to an analysis by researchers at the University of Oxford. But empty stands and a one-year delay due to the pandemic will make the Olympics particularly expensive for Tokyo. The city originally announced it would spend $ 7.3 billion, and a 2019 government audit estimated actual spending at around $ 28 billion. The postponement of games has likely added billions more, and while brand sponsorships and licensing fees will still generate revenue, Tokyo will not make money from ticket sales and see the same tourist boom as the former Olympic host cities.
The Group of 20 nations have agreed on a global minimum corporate tax, but specifying the details could be more complicated. Senate Democrats have proposed a $ 3.5 trillion infrastructure bill (though it’s unclear whether they have the votes to pass). Coworking spaces are one thing again. And England lifts pandemic restrictions on Monday.