The most recent Consumer Price Index (CPI) statistics for April showed a more marked decline in retail sales and a little moderating of core inflation, which sparked rumours about potential future rate-cutting actions by the Federal Reserve.&nbsp; The S&amp;P 500 began sharply higher after the news, indicating optimism in the market.

CPI Inflation Data Highlights

The overall consumer price index gained 0.3 per cent in April, meeting economists' estimates. The year-over-year CPI inflation rate fell to 3.4 per cent, as expected. Core CPI, which excludes volatile food and energy costs, was up 0.3 per cent month on month, with the annual rate falling to 3.6 per cent from 3.8 per cent in March, continuing the drop from its 40-year peak of 6.6 per cent in September 2022.

Retail Sales Performance

Retail sales in April did not rise by the 0.4 per cent that was predicted; instead, they stayed flat. Excluding automobiles, retail sales increased by 0.2 per cent, in line with projections; however, the initially reported 1.1 per cent gain in non-auto retail sales was later revised down to 0.9 per cent.

Detailed CPI Breakdown

In April, energy costs increased by 1.1 per cent, but food prices remained unchanged. Costs for food consumed outside the home increased by 0.3 per cent, offsetting a 0.2 per cent decrease in costs for food consumed within.

There was a decline of 0.4 per cent in the price of new vehicles and a 1.4 per cent decrease in the price of used cars and trucks.

The cost of housing increased steadily, as both rent and owner's equivalent rent increased by 0.4 per cent. By comparison, rates at hotels and motels decreased by 0.2 per cent. While airline tickets decreased by 0.8 per cent, the cost of medical care and transportation services increased by 0.4 per cent and 0.9 per cent, respectively.

Fed Rate-Cut Implications

The core PCE price index, which is the Fed's main indication of inflation, increased by 0.24 per cent in April.

With the likelihood of a rate cut by the July 31 meeting falling to 31 per cent from 33 per cent, market reactions modified expectations for a rate cut by the Fed. On the other hand, the likelihood of a rate cut by September 18 rose from 68 per cent to 71 per cent.

Market Response

After the release of the CPI report, the S&amp;P 500 increased by 0.8 per cent and reached a record intraday high. This increase comes after Tuesday's advances fuelled by statistics on healthcare inflation from the producer price index that were encouraging.

The index closed barely 0.15 per cent below its record high set on March 28. Furthermore, the yield on the 10-year Treasury dropped seven basis points to

4.37 per cent.&nbsp;

The most recent Consumer Price Index (CPI) statistics for April showed a more marked decline in retail sales and a little moderating of core inflation, which sparked rumours about potential future rate-cutting actions by the Federal Reserve.

The most recent Consumer Price Index (CPI) statistics for April showed a more marked decline in retail sales and a little moderating of core inflation, which sparked rumours about potential future rate-cutting actions by the Federal Reserve. The S&P 500 began sharply higher after the news, indicating optimism in the market. CPI Inflation Data Highlights The overall consumer price index gained 0.3 per cent in April, meeting economists' estimates. The year-over-year CPI inflation rate fell to 3.4 per cent, as expected. Core CPI, which excludes volatile food and energy costs, was up 0.3 per cent month on month, with the annual rate falling to 3.6 per cent from 3.8 per cent in March, continuing the drop from its 40-year peak of 6.6 per cent in September 2022. Retail Sales Performance Retail sales in April did not rise by the 0.4 per cent that was predicted; instead, they stayed flat. Excluding automobiles, retail sales increased by 0.2 per cent, in line with projections; however, the initially reported 1.1 per cent gain in non-auto retail sales was later revised down to 0.9 per cent. Detailed CPI Breakdown In April, energy costs increased by 1.1 per cent, but food prices remained unchanged. Costs for food consumed outside the home increased by 0.3 per cent, offsetting a 0.2 per cent decrease in costs for food consumed within. There was a decline of 0.4 per cent in the price of new vehicles and a 1.4 per cent decrease in the price of used cars and trucks. The cost of housing increased steadily, as both rent and owner's equivalent rent increased by 0.4 per cent. By comparison, rates at hotels and motels decreased by 0.2 per cent. While airline tickets decreased by 0.8 per cent, the cost of medical care and transportation services increased by 0.4 per cent and 0.9 per cent, respectively. Fed Rate-Cut Implications The core PCE price index, which is the Fed's main indication of inflation, increased by 0.24 per cent in April. With the likelihood of a rate cut by the July 31 meeting falling to 31 per cent from 33 per cent, market reactions modified expectations for a rate cut by the Fed. On the other hand, the likelihood of a rate cut by September 18 rose from 68 per cent to 71 per cent. Market Response After the release of the CPI report, the S&P 500 increased by 0.8 per cent and reached a record intraday high. This increase comes after Tuesday's advances fuelled by statistics on healthcare inflation from the producer price index that were encouraging. The index closed barely 0.15 per cent below its record high set on March 28. Furthermore, the yield on the 10-year Treasury dropped seven basis points to 4.37 per cent.

What the latest consumer price data tells us about the US economy

There could be some bad news for the US economy. A noted forecaster claims that the country is already in recession. Danielle Dimartino Booth adds that the US may be following the footsteps of China, where the government is collecting more debt to prop up economic growth.

Top Forecaster: US may be following China's footsteps

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American businesses benefit from Ukraine war

The US economy witnessed its slowest growth in nearly two years during the first quarter, largely attributed to a surge in imports and a modest accumulation of unsold goods at businesses, Reuters reported.<o:p></o:p>

Despite signs of strong demand, including an uptick in inflation, experts suggest that the Federal Reserve is unlikely to consider interest rate cuts before September.<o:p></o:p>

According to the Commerce Department's report on first-quarter gross domestic product (GDP), the economy expanded at a 1.6 per cent annualised rate, falling short of economists' expectations. <o:p></o:p>

However, this figure may overstate the moderation in economic activity, as underlying indicators like domestic demand remained strong. <o:p></o:p>

Consumer spending, albeit slightly tempered, along with increased business investment and an expanding housing market, indicated the economy's resilience.<o:p></o:p>

Reuters cited Daniel Vernazza, chief international economist at UniCredit, who noted the implications of the GDP report, saying that while the Federal Reserve may perceive it as solid, the unexpected rise in inflation could reinforce the central bank's decision to delay rate cuts. <o:p></o:p>

Economists polled by Reuters had forecasted a GDP growth rate of 2.4 per cent, with estimates ranging from 1.0 per cent to 3.1 per cent.<o:p></o:p>

The GDP expansion in the first quarter marked a slowdown from the previous quarter's growth rate of 3.4 per cent. <o:p></o:p>

Notably, the growth pace fell below the non-inflationary threshold of 1.8 per cent as regarded by US central bank officials. <o:p></o:p>

However, excluding volatile components such as inventories, government spending, and trade, the economy grew at a healthier rate of 3.1 per cent, dispelling notions that government expenditure was solely driving economic momentum.<o:p></o:p>

Treasury Secretary Janet Yellen said that her focus was on consumer and business spending, indicating their alignment with last year's growth rates. <o:p></o:p>

This highlights the underlying strength of the US economy, characterised by strong consumer and business activities.<o:p></o:p>

Inflationary pressures intensified during the first quarter, with the PCE price index, excluding food and energy, surging at a rate of 3.7 per cent. <o:p></o:p>

This marked an acceleration from the previous quarter's pace of 2.0 per cent. <o:p></o:p>

Rising costs in services like transportation and housing offset declines in goods prices, contributing to the inflationary surge.<o:p></o:p>

Despite concerns over a potential slowdown, the labour market remains resilient. <o:p></o:p>

Weekly jobless claims declined, indicating stability in the employment landscape. <o:p></o:p>

Low layoffs continue to sustain high wages, supporting consumer spending, a crucial driver of economic activity. <o:p></o:p>

However, recent data suggests that lower-income households are relying more on debt to fund purchases, indicating potential challenges ahead.<o:p></o:p>

While income increased in the first quarter, gains were windswept by inflation and higher taxes, resulting in a slower pace of growth in disposable income. <o:p></o:p>

The saving rate decreased slightly, reflecting adjustments in household finances while economic conditions continue to change. <o:p></o:p>

Business spending witnessed an uptick, particularly in investments related to artificial intelligence, offsetting declines in government outlays.<o:p></o:p>

The widening trade deficit, with reduced inventory accumulation, posed challenges to GDP growth. <o:p></o:p>

Imports satiated part of the increased spending, contributing to a wider trade deficit. <o:p></o:p>

Despite a slowdown in government spending, business investments and residential construction remained strong, indicating diverse drivers of economic activity.<o:p></o:p>

(With inputs from Reuters)<o:p></o:p>

The US economy witnessed its slowest growth in nearly two years during the first quarter, largely attributed to a surge in imports and a modest accumulation of unsold goods at businesses, Reuters reported.

The US economy witnessed its slowest growth in nearly two years during the first quarter, largely attributed to a surge in imports and a modest accumulation of unsold goods at businesses, Reuters reported. Despite signs of strong demand, including an uptick in inflation, experts suggest that the Federal Reserve is unlikely to consider interest rate cuts before September. According to the Commerce Department's report on first-quarter gross domestic product (GDP), the economy expanded at a 1.6 per cent annualised rate, falling short of economists' expectations. However, this figure may overstate the moderation in economic activity, as underlying indicators like domestic demand remained strong. Consumer spending, albeit slightly tempered, along with increased business investment and an expanding housing market, indicated the economy's resilience. Reuters cited Daniel Vernazza, chief international economist at UniCredit, who noted the implications of the GDP report, saying that while the Federal Reserve may perceive it as solid, the unexpected rise in inflation could reinforce the central bank's decision to delay rate cuts. Economists polled by Reuters had forecasted a GDP growth rate of 2.4 per cent, with estimates ranging from 1.0 per cent to 3.1 per cent. The GDP expansion in the first quarter marked a slowdown from the previous quarter's growth rate of 3.4 per cent. Notably, the growth pace fell below the non-inflationary threshold of 1.8 per cent as regarded by US central bank officials. However, excluding volatile components such as inventories, government spending, and trade, the economy grew at a healthier rate of 3.1 per cent, dispelling notions that government expenditure was solely driving economic momentum. Treasury Secretary Janet Yellen said that her focus was on consumer and business spending, indicating their alignment with last year's growth rates. This highlights the underlying strength of the US economy, characterised by strong consumer and business activities. Inflationary pressures intensified during the first quarter, with the PCE price index, excluding food and energy, surging at a rate of 3.7 per cent. This marked an acceleration from the previous quarter's pace of 2.0 per cent. Rising costs in services like transportation and housing offset declines in goods prices, contributing to the inflationary surge. Despite concerns over a potential slowdown, the labour market remains resilient. Weekly jobless claims declined, indicating stability in the employment landscape. Low layoffs continue to sustain high wages, supporting consumer spending, a crucial driver of economic activity. However, recent data suggests that lower-income households are relying more on debt to fund purchases, indicating potential challenges ahead. While income increased in the first quarter, gains were windswept by inflation and higher taxes, resulting in a slower pace of growth in disposable income. The saving rate decreased slightly, reflecting adjustments in household finances while economic conditions continue to change. Business spending witnessed an uptick, particularly in investments related to artificial intelligence, offsetting declines in government outlays. The widening trade deficit, with reduced inventory accumulation, posed challenges to GDP growth. Imports satiated part of the increased spending, contributing to a wider trade deficit. Despite a slowdown in government spending, business investments and residential construction remained strong, indicating diverse drivers of economic activity. (With inputs from Reuters)

US economy slows amid import surge; inflation accelerates

The US economy is currently experiencing a rare phenomenon: Strong growth alongside persistent inflation. The latest data shows GDP expanding at 2.4%, fuelled by a surge in hiring with over 300,000 new jobs added in march. However, inflation remains stubbornly high, well above the federal reserve's 2% target for the march quarter.

FED policy uncertainty casts shadow on global outlook

US regulators are reportedly gearing up for a huge reduction in the additional capital requirements that banks must maintain under the proposed "Basel III" rule. <o:p></o:p>

The proposal, unveiled by bank regulators led by the Federal Reserve in July, aims to overhaul how banks with assets exceeding $100 billion calculate the cash reserves needed to absorb potential losses. <o:p></o:p>

However, Wall Street has launched an aggressive pushback against the rule, prompting regulatory officials to consider significant alterations.<o:p></o:p>

Anticipated capital reduction<o:p></o:p>

Industry insiders, comprising eight executives in regular contact with regulatory agencies, revealed that discussions are underway to significantly decrease the proposed capital burden. <o:p></o:p>

The initial proposal suggested an aggregate capital increase of around 16 per cent for the affected lenders. <o:p></o:p>

However, this figure is expected to see a sharp decline as regulators delve into a comprehensive revision of the draft. <o:p></o:p>

The focus is on recalibrating the calculation of potential losses from operational risks, particularly in fee income related to lending services.<o:p></o:p>

Operational risk and mortgage adjustments<o:p></o:p>

The most highest capital savings are expected to arise from adjustments in how banks calculate potential losses from operational risks, a costly aspect of the proposal. <o:p></o:p>

Wall Street has been advocating for reduced risk weights for fee income linked to lending services. <o:p></o:p>

Additionally, regulators are contemplating the elimination or reduction of higher risk weights on mortgages for low-income borrowers and renewable energy tax credits. <o:p></o:p>

These potential changes are part of the ongoing rewriting led by Fed Vice Chair for Supervision Michael Barr, in collaboration with Fed Chair Jerome Powell.<o:p></o:p>

Regulatory response and opposition<o:p></o:p>

Regulatory discussions, still in their early stages, indicate a willingness to address concerns raised by industry players. <o:p></o:p>

Powell, during congressional testimony, acknowledged the intense opposition, stating that "broad, material" changes are anticipated in the rewritten rule. <o:p></o:p>

The unprecedented intensity of Wall Street's efforts to quash the proposal involves advertising, grassroots campaigns, lobbying, and potential legal action. <o:p></o:p>

Despite the opposition, officials have not confirmed whether the rule will be reproposed, leaving the timeline for its completion uncertain.<o:p></o:p>

Dissent and legal challenges<o:p></o:p>

The Basel III proposal, aligning with international capital standards, has encountered dissent from within the Fed's board. <o:p></o:p>

Governors Michelle Bowman and Christopher Waller, along with Vice Chair Philip Jefferson, expressed reservations about the potential adverse impact on borrowers. <o:p></o:p>

The Bank Policy Institute has even hired former Labour Secretary Eugene Scalia to explore the possibility of a lawsuit, highlighting the unexpected intensity of opposition faced by regulators. <o:p></o:p>

This dissent may play a crucial role in any legal battles, showcasing divisions among experts.<o:p></o:p>

Industry engagement and timeline concerns<o:p></o:p>

Federal Reserve officials, including Powell and Barr, have engaged in over 50 meetings or calls with hundreds of industry executives since September. <o:p></o:p>

Despite these discussions, a consensus has not been reached, and challenges remain in reaching an agreement with the FDIC, chaired by Martin Gruenberg, a known Wall Street critic. <o:p></o:p>

While some hope to finalise the rule by summer, concerns linger that the timeline may prove overly ambitious.<o:p></o:p>

(With inputs from Reuters)<o:p></o:p>

US regulators are reportedly gearing up for a huge reduction in the additional capital requirements that banks must maintain under the proposed "Basel III" rule.

US regulators are reportedly gearing up for a huge reduction in the additional capital requirements that banks must maintain under the proposed "Basel III" rule. The proposal, unveiled by bank regulators led by the Federal Reserve in July, aims to overhaul how banks with assets exceeding $100 billion calculate the cash reserves needed to absorb potential losses. However, Wall Street has launched an aggressive pushback against the rule, prompting regulatory officials to consider significant alterations. Anticipated capital reduction Industry insiders, comprising eight executives in regular contact with regulatory agencies, revealed that discussions are underway to significantly decrease the proposed capital burden. The initial proposal suggested an aggregate capital increase of around 16 per cent for the affected lenders. However, this figure is expected to see a sharp decline as regulators delve into a comprehensive revision of the draft. The focus is on recalibrating the calculation of potential losses from operational risks, particularly in fee income related to lending services. Operational risk and mortgage adjustments The most highest capital savings are expected to arise from adjustments in how banks calculate potential losses from operational risks, a costly aspect of the proposal. Wall Street has been advocating for reduced risk weights for fee income linked to lending services. Additionally, regulators are contemplating the elimination or reduction of higher risk weights on mortgages for low-income borrowers and renewable energy tax credits. These potential changes are part of the ongoing rewriting led by Fed Vice Chair for Supervision Michael Barr, in collaboration with Fed Chair Jerome Powell. Regulatory response and opposition Regulatory discussions, still in their early stages, indicate a willingness to address concerns raised by industry players. Powell, during congressional testimony, acknowledged the intense opposition, stating that "broad, material" changes are anticipated in the rewritten rule. The unprecedented intensity of Wall Street's efforts to quash the proposal involves advertising, grassroots campaigns, lobbying, and potential legal action. Despite the opposition, officials have not confirmed whether the rule will be reproposed, leaving the timeline for its completion uncertain. Dissent and legal challenges The Basel III proposal, aligning with international capital standards, has encountered dissent from within the Fed's board. Governors Michelle Bowman and Christopher Waller, along with Vice Chair Philip Jefferson, expressed reservations about the potential adverse impact on borrowers. The Bank Policy Institute has even hired former Labour Secretary Eugene Scalia to explore the possibility of a lawsuit, highlighting the unexpected intensity of opposition faced by regulators. This dissent may play a crucial role in any legal battles, showcasing divisions among experts. Industry engagement and timeline concerns Federal Reserve officials, including Powell and Barr, have engaged in over 50 meetings or calls with hundreds of industry executives since September. Despite these discussions, a consensus has not been reached, and challenges remain in reaching an agreement with the FDIC, chaired by Martin Gruenberg, a known Wall Street critic. While some hope to finalise the rule by summer, concerns linger that the timeline may prove overly ambitious. (With inputs from Reuters)

US regulators poised for significant cut in Basel capital demands amid intense Wall Street opposition

Concerns about China's excess industrial capacity and its possible effects on the world economy were voiced by US Deputy Treasury Secretary Wally Adeyemo on Friday.

Despite this, Adeyemo reassured that China's current economic challenges are unlikely to impede US growth in the foreseeable future.<o:p></o:p>

Adeyemo highlighted the issue of excess capacity originating from China, particularly in sectors like electric vehicles and solar panels, posing a threat to global markets. <o:p></o:p>

He emphasised the need for fair competition and expressed confidence in US tariffs and tax incentives to maintain a level playing field for American firms.<o:p></o:p>

According to Adeyemo, addressing the issue of excess capacity will be crucial for fostering fair competition globally. <o:p></o:p>

He noted ongoing discussions with Chinese counterparts to ensure fair trade practices not only between the US and China but also with other nations worldwide.<o:p></o:p>

US Treasury Secretary Janet Yellen is anticipated to address concerns regarding Chinese excess capacity during discussions at the Group of 20 finance ministers meeting in Sao Paulo, Brazil, next week. <o:p></o:p>

In addition to discussing China's economic challenges, Adeyemo addressed the impact of US sanctions on the dollar's status as the world's reserve currency. <o:p></o:p>

He noted that the importance of multilateral and targeted sanctions to maximise effectiveness while downplaying concerns over potential damage to the dollar's dominance.<o:p></o:p>

Adeyemo also highlighted the significance of Biden administration policies, including investments in infrastructure, semiconductors, and clean energy technologies, in strengthening the attractiveness of the US as an investment destination.<o:p></o:p>

&nbsp;He expressed confidence that as long as these policies are sustained, the dollar and America's financial system will continue to play a dominant role globally.<o:p></o:p>

(With inputs from Reuters)<o:p></o:p>

Concerns about China's excess industrial capacity and its possible effects on the world economy were voiced by US Deputy Treasury Secretary Wally Adeyemo on Friday.

Concerns about China's excess industrial capacity and its possible effects on the world economy were voiced by US Deputy Treasury Secretary Wally Adeyemo on Friday. Despite this, Adeyemo reassured that China's current economic challenges are unlikely to impede US growth in the foreseeable future. Adeyemo highlighted the issue of excess capacity originating from China, particularly in sectors like electric vehicles and solar panels, posing a threat to global markets. He emphasised the need for fair competition and expressed confidence in US tariffs and tax incentives to maintain a level playing field for American firms. According to Adeyemo, addressing the issue of excess capacity will be crucial for fostering fair competition globally. He noted ongoing discussions with Chinese counterparts to ensure fair trade practices not only between the US and China but also with other nations worldwide. US Treasury Secretary Janet Yellen is anticipated to address concerns regarding Chinese excess capacity during discussions at the Group of 20 finance ministers meeting in Sao Paulo, Brazil, next week. In addition to discussing China's economic challenges, Adeyemo addressed the impact of US sanctions on the dollar's status as the world's reserve currency. He noted that the importance of multilateral and targeted sanctions to maximise effectiveness while downplaying concerns over potential damage to the dollar's dominance. Adeyemo also highlighted the significance of Biden administration policies, including investments in infrastructure, semiconductors, and clean energy technologies, in strengthening the attractiveness of the US as an investment destination. He expressed confidence that as long as these policies are sustained, the dollar and America's financial system will continue to play a dominant role globally. (With inputs from Reuters)

US treasury official voices concerns over China's excess capacity, assures dollar dominance

The Conference Board announced on Tuesday that it was abandoning long-standing prediction of an imminent recession in the United States. <o:p></o:p>

Despite the downturn in its Leading Economic Index (LEI), which suggests a stagnation in economic output in the upcoming months, the organisation noted positive signals indicating economic resilience<o:p></o:p>

Reuters cited Justyna Zabinska-La Monica, senior manager of business cycle indicators at the Conference Board, who said, "While the declining LEI continues to signal headwinds to economic activity, for the first time in the past two years, six out of its 10 components were positive contributors over the past six-month period."<o:p></o:p>

This shift, she highlighted, has led the leading index to no longer foresee a recession looming ahead.<o:p></o:p>

The Conference Board's index, designed to anticipate future economic trends, experienced a 0.4 per cent decline in January, reaching its lowest level since April 2020. <o:p></o:p>

Despite this prolonged downturn, the rate of decline over a six-month period has markedly slowed, suggesting a less pessimistic outlook compared to previous months.<o:p></o:p>

Matthew Martin, a US economist at Oxford Economics, echoed this sentiment, affirming that despite the index's overall decline, key indicators poised for improvement hint at sustained economic growth.<o:p></o:p>

The reversal of the recession forecast can be attributed to several factors, including the recent surge in stock prices and the Federal Reserve's signalling of a shift in monetary policy. <o:p></o:p>

The rally in stock markets, with the S&amp;P 500 index surging by over 20 per cent since late October, has injected optimism into the economic landscape, signalling confidence in the Fed's commitment to curbing inflation without stifling growth. <o:p></o:p>

Additionally, indicators such as low unemployment filings and promising metrics in credit availability, home building permits, and manufactured goods orders have contributed to the newfound optimism.<o:p></o:p>

Despite the positive outlook, concerns linger regarding the economy's short-term performance.<o:p></o:p>

Zabinska-La Monica cautioned that growth in the second and third quarters could hover around zero, indicating potential challenges ahead.<o:p></o:p>

&nbsp;Nonetheless, economists remain hopeful, citing the strength of the labour market, improved financial conditions, and stronger consumer spending as factors underpinning optimism for continued economic expansion.<o:p></o:p>

(With inputs from Reuters)<o:p></o:p>

The Conference Board announced on Tuesday that it was abandoning long-standing prediction of an imminent recession in the United States. Despite the downturn in its Leading Economic Index (LEI), which suggests a stagnation in economic output in the upcoming months, the organisation noted positive signals indicating economic resilience Reuters cited Justyna Zabinska-La Monica, senior manager of business cycle indicators at the Conference Board, who said, "While the declining LEI continues to signal headwinds to economic activity, for the first time in the past two years, six out of its 10 components were positive contributors over the past six-month period.

The Conference Board announced on Tuesday that it was abandoning long-standing prediction of an imminent recession in the United States. Despite the downturn in its Leading Economic Index (LEI), which suggests a stagnation in economic output in the upcoming months, the organisation noted positive signals indicating economic resilience Reuters cited Justyna Zabinska-La Monica, senior manager of business cycle indicators at the Conference Board, who said, "While the declining LEI continues to signal headwinds to economic activity, for the first time in the past two years, six out of its 10 components were positive contributors over the past six-month period." This shift, she highlighted, has led the leading index to no longer foresee a recession looming ahead. The Conference Board's index, designed to anticipate future economic trends, experienced a 0.4 per cent decline in January, reaching its lowest level since April 2020. Despite this prolonged downturn, the rate of decline over a six-month period has markedly slowed, suggesting a less pessimistic outlook compared to previous months. Matthew Martin, a US economist at Oxford Economics, echoed this sentiment, affirming that despite the index's overall decline, key indicators poised for improvement hint at sustained economic growth. The reversal of the recession forecast can be attributed to several factors, including the recent surge in stock prices and the Federal Reserve's signalling of a shift in monetary policy. The rally in stock markets, with the S&P 500 index surging by over 20 per cent since late October, has injected optimism into the economic landscape, signalling confidence in the Fed's commitment to curbing inflation without stifling growth. Additionally, indicators such as low unemployment filings and promising metrics in credit availability, home building permits, and manufactured goods orders have contributed to the newfound optimism. Despite the positive outlook, concerns linger regarding the economy's short-term performance. Zabinska-La Monica cautioned that growth in the second and third quarters could hover around zero, indicating potential challenges ahead. Nonetheless, economists remain hopeful, citing the strength of the labour market, improved financial conditions, and stronger consumer spending as factors underpinning optimism for continued economic expansion. (With inputs from Reuters)

Conference board retracts US recession prediction; economy set to grow despite index decline

The US federal budget deficit saw a significant decline in January, dropping to $22 billion, according to data released by the Treasury Department on Monday. <o:p></o:p>

This sharp decrease was attributed to record receipts for the month, partially driven by a reduction in tax refunds following the Internal Revenue Service's (IRS) clearance of a backlog of pandemic-delayed tax returns.<o:p></o:p>

"This January's comparison with a year ago was also significantly helped by the $36 billion bailout of a Teamsters union pension fund in January 2023, as no similar large one-time outlays were recorded this year," noted Treasury officials.<o:p></o:p>

Despite this, outlays for the month increased by 3 per cent to $499 billion, while receipts surged by 7 per cent to $477 billion.<o:p></o:p>

For the fiscal year's first four months, the deficit expanded by $72 billion, reaching $532 billion. <o:p></o:p>

This increase, amounting to 16 per cent, was attributed to rising costs associated with servicing the national debt, as well as heightened outlays for programs such as Social Security, Medicare, and military expenditures.<o:p></o:p>

The Treasury Department reported that both receipts and outlays for the period were at record levels, with receipts climbing by $112 billion to $1.585 trillion, and outlays rising by $184 billion to $2.117 trillion. <o:p></o:p>

Notably, individual tax refunds decreased by $15 billion compared to the previous January, reflecting the IRS's enhanced processing capabilities for paper returns. <o:p></o:p>

Meanwhile, individual withheld receipts experienced a $20 billion increase, driven by robust employment trends.<o:p></o:p>

However, the Treasury's interest costs on the public debt surged by $18 billion in January compared to the previous year, reaching 3.15 per cent due to higher debt levels and an increased weighted average interest rate. <o:p></o:p>

Year-to-date, debt interest costs rose by $96 billion, outpacing outlays for Medicare. <o:p></o:p>

Additionally, costs for Medicare and Social Security saw notable increases, driven by factors such as higher payments for Medicare Advantage plans and cost-of-living adjustments for Social Security beneficiaries.<o:p></o:p>

(With inputs from Reuters)<o:p></o:p>

The US federal budget deficit saw a significant decline in January, dropping to $22 billion, according to data released by the Treasury Department on Monday. This sharp decrease was attributed to record receipts for the month, partially driven by a reduction in tax refunds following the Internal Revenue Service's (IRS) clearance of a backlog of pandemic-delayed tax returns.

The US federal budget deficit saw a significant decline in January, dropping to $22 billion, according to data released by the Treasury Department on Monday. This sharp decrease was attributed to record receipts for the month, partially driven by a reduction in tax refunds following the Internal Revenue Service's (IRS) clearance of a backlog of pandemic-delayed tax returns. "This January's comparison with a year ago was also significantly helped by the $36 billion bailout of a Teamsters union pension fund in January 2023, as no similar large one-time outlays were recorded this year," noted Treasury officials. Despite this, outlays for the month increased by 3 per cent to $499 billion, while receipts surged by 7 per cent to $477 billion. For the fiscal year's first four months, the deficit expanded by $72 billion, reaching $532 billion. This increase, amounting to 16 per cent, was attributed to rising costs associated with servicing the national debt, as well as heightened outlays for programs such as Social Security, Medicare, and military expenditures. The Treasury Department reported that both receipts and outlays for the period were at record levels, with receipts climbing by $112 billion to $1.585 trillion, and outlays rising by $184 billion to $2.117 trillion. Notably, individual tax refunds decreased by $15 billion compared to the previous January, reflecting the IRS's enhanced processing capabilities for paper returns. Meanwhile, individual withheld receipts experienced a $20 billion increase, driven by robust employment trends. However, the Treasury's interest costs on the public debt surged by $18 billion in January compared to the previous year, reaching 3.15 per cent due to higher debt levels and an increased weighted average interest rate. Year-to-date, debt interest costs rose by $96 billion, outpacing outlays for Medicare. Additionally, costs for Medicare and Social Security saw notable increases, driven by factors such as higher payments for Medicare Advantage plans and cost-of-living adjustments for Social Security beneficiaries. (With inputs from Reuters)

US January deficit plummets amid record receipts and reduced tax refunds

If you have noticed fewer chips in a packet you bought or the size of the packet itself is smaller than it used to be, while you are paying the same amount if not more, in some cases, for that bag of chips, that’s shrinkflation. United States President Joe Biden, on Sunday (Feb 11) called on snack companies to stop shrinkflation and denounced the practice as a “rip-off.”&nbsp;

<h2>‘Give me a break’</h2>

“Some companies are trying to pull a fast one by shrinking the products little by little and hoping you won’t notice,” said the US president in a video posted on X ahead of the annual American football championship Super Bowl LVIII.&nbsp;

He added, “Give me a break. The American public is tired of being played for suckers. I’m calling on companies to put a stop to this. Let's make sure businesses do the right thing now.”&nbsp;

However, Biden did not offer any tangible solutions or policies to address the practice.&nbsp;

WATCH |&nbsp;Voters concerned over Biden's handling of economy, finds poll

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Last year, US Senator Bob Casey, who chairs the Senate Health, Education, Labor, and Pensions (HELP) Subcommittee on Children and Families released a report which found that companies had reduced the sizes of almost all their products from toilet paper to Oreos.&nbsp;

According to Casey’s report, household paper products were 34.9 per cent more expensive per unit than they were in January 2019 and more than 10 per cent of this increase has been attributed to shrinking the sizes of rolls and packages.

The US Senator’s office has also sent letters to the trade associations which represent household consumer products and food and beverage companies demanding that they explain these pricing strategies and package size practices, as well as the impact it has on consumers.&nbsp;

<h2>Shrinkflation and US economy</h2>

Shrinkflation is when companies reduce a product’s size or quantity but keep prices the same or in some cases increase the price of that commodity. The practice is particularly common in the food and beverage industries and can help them stealthily boost profit margins.

ALSO READ |&nbsp;<a href="https://www.wionews.com/business-economy/biden-administration-set-to-overhaul-gig-economy-with-new-worker-classification-rule-678161">Biden administration set to overhaul gig economy with new worker classification rule</a>

This phenomenon, or at least the term, has been around for more than a decade now but became popular&nbsp;during and after the COVID-19 pandemic as the global economy grappled with supply chain issues and rising raw material costs.&nbsp;

After the pandemic, inflation in the US soared prompting the Federal Reserve to increase interest rates to cool down the rising prices. The central bank hiked its benchmark rate 11 times since March 2022 but no new increases were announced in December and January.&nbsp;

The inflation in the US has reportedly slowed down from over nine per cent to 3.4 per cent, if this number holds steady, the Federal Reserve may lower interest rates, according to media reports.&nbsp;

(With inputs from agencies)

If you have noticed fewer chips in a packet you bought or the size of the packet itself is smaller than it used to be, while you are paying the same amount if not more, in some cases, for that bag of chips, that’s shrinkflation.

If you have noticed fewer chips in a packet you bought or the size of the packet itself is smaller than it used to be, while you are paying the same amount if not more, in some cases, for that bag of chips, that’s shrinkflation. United States President Joe Biden, on Sunday (Feb 11) called on snack companies to stop shrinkflation and denounced the practice as a “rip-off.” ‘Give me a break’ “Some companies are trying to pull a fast one by shrinking the products little by little and hoping you won’t notice,” said the US president in a video posted on X ahead of the annual American football championship Super Bowl LVIII. He added, “Give me a break. The American public is tired of being played for suckers. I’m calling on companies to put a stop to this. Let's make sure businesses do the right thing now.” However, Biden did not offer any tangible solutions or policies to address the practice. WATCH | Voters concerned over Biden's handling of economy, finds poll Last year, US Senator Bob Casey, who chairs the Senate Health, Education, Labor, and Pensions (HELP) Subcommittee on Children and Families released a report which found that companies had reduced the sizes of almost all their products from toilet paper to Oreos. According to Casey’s report, household paper products were 34.9 per cent more expensive per unit than they were in January 2019 and more than 10 per cent of this increase has been attributed to shrinking the sizes of rolls and packages. The US Senator’s office has also sent letters to the trade associations which represent household consumer products and food and beverage companies demanding that they explain these pricing strategies and package size practices, as well as the impact it has on consumers. Shrinkflation and US economy Shrinkflation is when companies reduce a product’s size or quantity but keep prices the same or in some cases increase the price of that commodity. The practice is particularly common in the food and beverage industries and can help them stealthily boost profit margins. ALSO READ | Biden administration set to overhaul gig economy with new worker classification rule This phenomenon, or at least the term, has been around for more than a decade now but became popular during and after the COVID-19 pandemic as the global economy grappled with supply chain issues and rising raw material costs. After the pandemic, inflation in the US soared prompting the Federal Reserve to increase interest rates to cool down the rising prices. The central bank hiked its benchmark rate 11 times since March 2022 but no new increases were announced in December and January. The inflation in the US has reportedly slowed down from over nine per cent to 3.4 per cent, if this number holds steady, the Federal Reserve may lower interest rates, according to media reports. (With inputs from agencies)

US President Joe Biden calls on snack companies to stop shrinkflation. What is it?

A roundup of the latest economic data points to robust US economic health but a struggling euro zone. That highlights the differing economic paths and risks to the region from the war on the edge of Europe.

Data highlight robust US economy

The US economy has defied the odds of a recession to post strong growth figures in the last three months of 2023. The US economy expanded faster than expected in the October-December quarter last year. Strong consumer spending, rising exports, government spending & business investments helped the US To grow at 3.3%.

US economy grows by 3.3% in last three months of 2023

JP-Morgan predicts a boost to the dollar from a polarising presidential race between Joe Biden and Donald Trump, which is likely lead to a trade war. They say that renewed tariff risk will have a positive impact on dollar. A 10% tariff on all goods might increase the value of the dollar by 4–6%.

Analysts: US trade tariffs to benefit the dollar

US Consumer confidence rose for the first time in four months in November, as optimism about the job situation rose. Following a downwardly revised 99.1 in October, the conference board's index rose to 102 this month. Consumers' short-term income and hiring prospects rose, raising the prospect for better sentiment. As inflation falls, consumers are receiving a break from years of price rises.

Decoding state of US Economy

Retailers are gearing up for a potentially record-breaking Global shopping frenzy on this year's Black Friday falling on November 24th. That's the fourth Friday of November, discover how shopping is evolving globally online surges changing habits and also the forecasted boom.

Black Friday: US retailers expect massive sales; poor economy to dampen sales? | World DNA

This Thanksgiving, Americans will be able to travel to Grandma's or wherever they celebrate for less money thanks to declining gas and airfare prices. When they get there, they'll discover another pleasant surprise: the turkey and sides will cost less than they did the year before.

Thanksgiving economy: Thanksgiving dinner gets 4.6% cheaper compared to 2022

Thanksgiving, a cherished American tradition, embodies unity and gratitude, tracing back to the Pilgrims' 1621 feast with Native Americans. This day transcends boundaries, fostering inclusivity as families gather to express thanks for health, prosperity, and kinship. It serves as a vital reminder to pause, appreciate life's abundance, and embrace the enduring values uniting a diverse nation.

As Thanksgiving 2023 approaches, the economic landscape in the United States is painting a complex picture, influencing both the cost of celebrations and travel plans. While there's a slight respite from inflation, families continue to feel the strain on their finances.

According to the American Farm Bureau Federation (AFBF),&nbsp;the cost of a ten-person Thanksgiving dinner&nbsp;has decreased by 4.5 per cent from the previous year, totalling $61.17. This reduction is primarily attributed to a 5.6 per cent drop in the price of turkey, a staple of the Thanksgiving feast. However, despite this dip, the overall cost of meals remains 25 per cent higher than in 2019, underscoring the persistent challenges posed by inflation.

On the travel front, Americans are gearing up for a bustling Thanksgiving. AAA,&nbsp;the auto club&nbsp;group, expects&nbsp;a&nbsp;significant 6.6 per cent increase in air travel, reaching its highest point in almost two decades, as&nbsp;4.7 million people are expected to take to the skies.

Meanwhile, a staggering 49.1 million Americans are set to hit the roads, marking a 1.7 per cent rise from the previous year. According to a report by GasBuddy, affordable gas prices, currently averaging $3.27 per gallon, play a pivotal role in inspiring more road trips, having fallen 25.9 cents from last month and 36.9 cents from last year.

The drop in average flight prices by 9 per cent from the previous year, coupled with additional discounts during the Thanksgiving period reported by travel search engines like Kayak, further fuels the surge in travel plans. Transportation Security Administration (TSA) expects to screen 2.9 million passengers on November 26, marking one of the busiest days since June.

Notably, the port authority of New York and New Jersey is bracing for over 8.5 million travellers during the peak period, indicative of the substantial movement anticipated during this holiday season.

Thanksgiving, a symbol of gratitude and resilience, not only strengthens familial bonds but also serves as an economic barometer. As Americans navigate fluctuating costs and travel trends, the enduring significance of this holiday becomes evident, showcasing its ability to unite hearts while reflecting the economic pulse of the nation.

Thanksgiving 2023 stands as a testament to the resilience of traditions amid the ebb and flow of economic dynamics.

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Thanksgiving, a cherished American tradition, embodies unity and gratitude, tracing back to the Pilgrims' 1621 feast with Native Americans. This day transcends boundaries, fostering inclusivity as families gather to express thanks for health, prosperity, and kinship.

Thanksgiving, a cherished American tradition, embodies unity and gratitude, tracing back to the Pilgrims' 1621 feast with Native Americans. This day transcends boundaries, fostering inclusivity as families gather to express thanks for health, prosperity, and kinship. It serves as a vital reminder to pause, appreciate life's abundance, and embrace the enduring values uniting a diverse nation. As Thanksgiving 2023 approaches, the economic landscape in the United States is painting a complex picture, influencing both the cost of celebrations and travel plans. While there's a slight respite from inflation, families continue to feel the strain on their finances. According to the American Farm Bureau Federation (AFBF), the cost of a ten-person Thanksgiving dinner has decreased by 4.5 per cent from the previous year, totalling $61.17. This reduction is primarily attributed to a 5.6 per cent drop in the price of turkey, a staple of the Thanksgiving feast. However, despite this dip, the overall cost of meals remains 25 per cent higher than in 2019, underscoring the persistent challenges posed by inflation. On the travel front, Americans are gearing up for a bustling Thanksgiving. AAA, the auto club group, expects a significant 6.6 per cent increase in air travel, reaching its highest point in almost two decades, as 4.7 million people are expected to take to the skies. Meanwhile, a staggering 49.1 million Americans are set to hit the roads, marking a 1.7 per cent rise from the previous year. According to a report by GasBuddy, affordable gas prices, currently averaging $3.27 per gallon, play a pivotal role in inspiring more road trips, having fallen 25.9 cents from last month and 36.9 cents from last year. The drop in average flight prices by 9 per cent from the previous year, coupled with additional discounts during the Thanksgiving period reported by travel search engines like Kayak, further fuels the surge in travel plans. Transportation Security Administration (TSA) expects to screen 2.9 million passengers on November 26, marking one of the busiest days since June. Notably, the port authority of New York and New Jersey is bracing for over 8.5 million travellers during the peak period, indicative of the substantial movement anticipated during this holiday season. Thanksgiving, a symbol of gratitude and resilience, not only strengthens familial bonds but also serves as an economic barometer. As Americans navigate fluctuating costs and travel trends, the enduring significance of this holiday becomes evident, showcasing its ability to unite hearts while reflecting the economic pulse of the nation. Thanksgiving 2023 stands as a testament to the resilience of traditions amid the ebb and flow of economic dynamics. WATCH WION LIVE HERE

Turkey and turnaround: Thanksgiving's economic upswing

The United States Federal Reserve, on Wednesday (Nov 1) voted to keep the interest rate, which currently stands at a 22-year high, unchanged for a second straight meeting. The American central bank also acknowledged the US economy’s surprising strength but has indicated that it may increase borrowing costs in a policy statement.&nbsp;

The Fed’s recent decision would keep its benchmark lending rate between 5.25 per cent and 5.50 per cent where it has been since July. It also gives policymakers time to “assess additional information and its implications for monetary policy,” said the US central bank, in a statement following a two-day meeting.&nbsp;

The central bank has been aggressively raising interest rates since March last year in a bid to control the US’ soaring inflation. However, this was the first time that the officials held rates steady at two consecutive meetings.&nbsp;

<h2>‘Economic activity expanded’</h2>

“Economic activity expanded at a strong pace in the third quarter,” said the US central bank. This comes as recent data showed US gross domestic product (GDP) grew at a 4.9 per cent annual rate in the third quarter, reported Reuters.&nbsp;

ALSO READ |&nbsp;<a href="https://www.wionews.com/business-economy/wion-business-wrap-weworks-woes-fall-in-us-consumer-confidence-653848">WION Business Wrap | WeWork's woes, fall in US consumer confidence</a>

Meanwhile, since peaking at more than seven per cent last June, inflation, as measured by the Fed’s yardstick, has slowed by more than half but continued to be stuck firmly above three per cent.

The statement by the US central bank also noted that job gains remained “strong” and inflation still “elevated,” adding that it would consider “the extent of additional policy firming that may be appropriate to return inflation to 2% over time.”

<h2>‘Long way to go’</h2>

The US has a “long way to go” in bringing the inflation down to officials’ two per cent target sustainably, said Federal Reserve Chair Jerome Powell at a press conference after the initial statement.&nbsp;

“A few months of good data are only the beginning of what it will take to build confidence that inflation is moving down sustainably toward our goal,” said Powell. He also said that they are monitoring a rise in longer-term yields.&nbsp;

ALSO READ |&nbsp;<a href="https://www.wionews.com/business-economy/data-lab-women-led-startups-now-forge-18-share-in-indias-booming-startup-ecosystem-653993">Data Lab: Women-led Indian startups surge to 18% in past five years</a>

“We’re attentive to the increase in longer-term yields, which have contributed to a tightening of broader financial conditions since the summer,” said the Fed chair.&nbsp;

Meanwhile, as per Reuters, markets think the Fed may be done with its rate-hiking campaign. “The statement leans to the dovish side,” said Peter Cardillo, chief market economist at Spartan Capital Securities.

“The fact that they left rates unchanged for the second time in a row suggests the Fed might leave rates unchanged in December. And if they do, that means the Fed is done,” he added.&nbsp;

Powell said that the Fed is not discussing interest rate cuts “at all”.&nbsp;

ALSO READ |&nbsp;<a href="https://www.wionews.com/business-economy/us-consumer-confidence-hits-a-five-month-low-653811">US consumer confidence hits a five-month low</a>

“The fact is the committee is not thinking about rate cuts, right now at all. We’re not talking about rate cuts,” said the Fed chair.&nbsp;

The earlier statement by the US central bank also said that the Fed is watching the developing impact of its past rate hikes as it is thinking about the next steps, indicating that the full impact of the 5.25 percentage points in rate hikes since March of 2022 has yet to be felt.

(With inputs from agencies) 
&nbsp;

The United States Federal Reserve, on Wednesday (Nov 1) voted to keep the interest rate, which currently stands at a 22-year high, unchanged for a second straight meeting.

The United States Federal Reserve, on Wednesday (Nov 1) voted to keep the interest rate, which currently stands at a 22-year high, unchanged for a second straight meeting. The American central bank also acknowledged the US economy’s surprising strength but has indicated that it may increase borrowing costs in a policy statement. The Fed’s recent decision would keep its benchmark lending rate between 5.25 per cent and 5.50 per cent where it has been since July. It also gives policymakers time to “assess additional information and its implications for monetary policy,” said the US central bank, in a statement following a two-day meeting. The central bank has been aggressively raising interest rates since March last year in a bid to control the US’ soaring inflation. However, this was the first time that the officials held rates steady at two consecutive meetings. ‘Economic activity expanded’ “Economic activity expanded at a strong pace in the third quarter,” said the US central bank. This comes as recent data showed US gross domestic product (GDP) grew at a 4.9 per cent annual rate in the third quarter, reported Reuters. ALSO READ | WION Business Wrap | WeWork's woes, fall in US consumer confidence Meanwhile, since peaking at more than seven per cent last June, inflation, as measured by the Fed’s yardstick, has slowed by more than half but continued to be stuck firmly above three per cent. The statement by the US central bank also noted that job gains remained “strong” and inflation still “elevated,” adding that it would consider “the extent of additional policy firming that may be appropriate to return inflation to 2% over time.” ‘Long way to go’ The US has a “long way to go” in bringing the inflation down to officials’ two per cent target sustainably, said Federal Reserve Chair Jerome Powell at a press conference after the initial statement. “A few months of good data are only the beginning of what it will take to build confidence that inflation is moving down sustainably toward our goal,” said Powell. He also said that they are monitoring a rise in longer-term yields. ALSO READ | Data Lab: Women-led Indian startups surge to 18% in past five years “We’re attentive to the increase in longer-term yields, which have contributed to a tightening of broader financial conditions since the summer,” said the Fed chair. Meanwhile, as per Reuters, markets think the Fed may be done with its rate-hiking campaign. “The statement leans to the dovish side,” said Peter Cardillo, chief market economist at Spartan Capital Securities. “The fact that they left rates unchanged for the second time in a row suggests the Fed might leave rates unchanged in December. And if they do, that means the Fed is done,” he added. Powell said that the Fed is not discussing interest rate cuts “at all”. ALSO READ | US consumer confidence hits a five-month low “The fact is the committee is not thinking about rate cuts, right now at all. We’re not talking about rate cuts,” said the Fed chair. The earlier statement by the US central bank also said that the Fed is watching the developing impact of its past rate hikes as it is thinking about the next steps, indicating that the full impact of the 5.25 percentage points in rate hikes since March of 2022 has yet to be felt. (With inputs from agencies)

US Federal Reserve keeps interest rates unchanged at 22-year high, says economy is ‘strong’

In a sign of resilience, the U.S. economy grew by nearly 5 per cent in the July-September quarter, defying earlier warnings of a looming recession.

The fastest growth pace in almost two years was underpinned by a combination of factors, including higher wages, steady consumer spending, and businesses restocking inventory to meet soaring demand.&nbsp;&nbsp;

Investment in residential sector staged a remarkable rebound after nine consecutive quarters of contraction. While government spending increased during this period, business investment saw a dip for the first time in two years. This reduction was attributed to a decline in spending on equipment, including computers.&nbsp;

Moreover, there was a considerable decrease in underlying inflation last quarter, fostering expectations that the economy is poised for a "soft-landing."&nbsp;

Wage growth, while slightly decelerating, continued to outpace inflation, resulting in increased purchasing power for households. However, the rise in personal taxes partially offset these wage gains, causing disposable income for households to decline by 1.0 per cent. Consequently, consumers had to dip into their savings, leading to a drop in the savings rate from 5.2 per cent in the second quarter to 3.8 per cent. &nbsp;

Despite the current economic strength, potential challenges lurk on the horizon. The resumption of student loan repayments, the lagged effects of recent interest rate hikes, and the United Auto Workers strikes could potentially cast a shadow over growth prospects in the fourth quarter.&nbsp;

(With inputs from Reuters)&nbsp;

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In a sign of resilience, the U.S. economy grew by nearly 5 per cent in the July-September quarter, defying earlier warnings of a looming recession. The fastest growth pace in almost two years was underpinned by a combination of factors, including higher wages, steady consumer spending, and businesses restocking inventory to meet soaring demand.

In a sign of resilience, the U.S. economy grew by nearly 5 per cent in the July-September quarter, defying earlier warnings of a looming recession. The fastest growth pace in almost two years was underpinned by a combination of factors, including higher wages, steady consumer spending, and businesses restocking inventory to meet soaring demand. Investment in residential sector staged a remarkable rebound after nine consecutive quarters of contraction. While government spending increased during this period, business investment saw a dip for the first time in two years. This reduction was attributed to a decline in spending on equipment, including computers. Moreover, there was a considerable decrease in underlying inflation last quarter, fostering expectations that the economy is poised for a "soft-landing." Wage growth, while slightly decelerating, continued to outpace inflation, resulting in increased purchasing power for households. However, the rise in personal taxes partially offset these wage gains, causing disposable income for households to decline by 1.0 per cent. Consequently, consumers had to dip into their savings, leading to a drop in the savings rate from 5.2 per cent in the second quarter to 3.8 per cent. Despite the current economic strength, potential challenges lurk on the horizon. The resumption of student loan repayments, the lagged effects of recent interest rate hikes, and the United Auto Workers strikes could potentially cast a shadow over growth prospects in the fourth quarter. (With inputs from Reuters) WATCH WION LIVE HERE

US economy delivers strong Q3 growth despite looming challenges: Report  

Defying dire warnings of a recession, the US Economy grew almost 5% in the July to September quarter, as higher wages gave a much-needed boost to consumer spending and demand. At a 4.9%, this was the fastest pace of GDP growth in nearly two years. In fact, the US GDP expanded at a pace well above what fed officials regard as the non-inflationary growth rate of 1.8%. The economy was also helped by a rebound in residential investment after 9 straight months of decline, and a rise in government spending.

US economy: Blockbuster Q3 numbers

US Banking authorities are revising policies from the 1970s to combat redlining and increase lending to low-income households. A new proposal would expand the scope of the historic 1977 community reinvestment act to include increasingly common online and mobile banking services. Redlining is when an institution refuses a loan or insurance to someone because they live in an area deemed to be a poor financial risk. If the proposal is approved, regulators won't just consider the locations of branches to determine a bank's grade for its lending to low- and moderate-income neighbourhoods.

US Authorities look to increase lending to low-income households

After two months of stagnation, business activity in the United States improved in october because of a rise in industrial demand and a decrease in service-sector inflation. The S&P global flash composite production index rose to 51, its highest level in three months, just one point over the 50 threshold that separates growth from contraction. For the first time since april, factories saw an increase in new orders, while service providers saw an uptick in business. As inflationary pressures eased, the composite selling price index also dropped to a three-year low.

US composite factory output rises to a three-month high | World Business Watch

A looming government shutdown threatens to postpone the release of a variety of US economic data, depriving markets, companies, and policymakers of crucial information on which to base decisions at home and abroad.

US: Impact of looming government shutdown on US economic data

As the nation’s confidence declines, China is no longer expected to overtake the US as the largest economy anytime soon, and it may never overtake the US to claim the top spot, according to a report by Bloomberg.

The report said that China’s gross domestic output would not surpass that of the US until the middle of the 2040s, and even then, it won’t be by much before “falling behind” at that point. Prior to the pandemic, they predicted that China would seize and maintain the top spot by the beginning of the following decade.

In a research note brought out on Tuesday, Bloomberg Economists said, “China is down-shifting onto a slower growth path sooner than we expected. The post-Covid rebound has run out of steam, reflecting a deepening&nbsp;property slump and fading confidence in Beijing’s management of the economy. Weak confidence risks becoming entrenched — resulting in an enduring drag on growth potential.”

The second-largest economy in the world, China, is now expected to develop at a slower rate, to 3.5 per cent in 2030 and 1 per cent or less by 2050, according to experts. In comparison to earlier estimates of 4.3 per cent and 1.6 per cent, respectively, this is less.

China’s economy grew by 3 per cent last year, which was one of the country’s slowest rates of growth in recent memory due to economic restrictions and a real estate crisis. Its final reopening gave rise to optimism that the economy will improve this year. However, as exports plummet and the real estate downturn worsens, the recovery has lost momentum. Additionally, economists surveyed by Bloomberg have lowered their growth projections for 2024 even further, to below 5 per cent.

The updated prognosis comes as the international community re-evaluates how to deal with a China that may be nearing a power peak.

The US and the Group of Seven countries are increasingly examining signs of deep-seated structural issues in China, spotting possibilities that could ultimately boost the West’s position against a collapsing geopolitical rival, while also taking the slowdown’s wider implications into account. Commodities and stocks are already in disorder due to this year’s setbacks.

Additionally, China is coping with more serious, long-term issues. The country had its first population decline since the 1960s in 2017, which has stoked fears about declining productivity. Confidence has also been impacted by regulatory crackdowns and geopolitical conflicts with the US and other Western governments.

The US, however, seems to be doing better than many economists had anticipated just a few months ago. The ability of the economy to avoid a recession for the time being has been boosted by a strong labour market, robust consumer spending, and moderate inflation.

According to Bloomberg Economics, prospective US growth will be 1.7 per cent in 2022–2023, with long-term projections indicating a gradual decline to 1.5 per cent by 2050.

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As the nation’s confidence declines, China is no longer expected to overtake the US as the largest economy anytime soon, and it may never overtake the US to claim the top spot, according to a report by Bloomberg.

As the nation’s confidence declines, China is no longer expected to overtake the US as the largest economy anytime soon, and it may never overtake the US to claim the top spot, according to a report by Bloomberg. The report said that China’s gross domestic output would not surpass that of the US until the middle of the 2040s, and even then, it won’t be by much before “falling behind” at that point. Prior to the pandemic, they predicted that China would seize and maintain the top spot by the beginning of the following decade. In a research note brought out on Tuesday, Bloomberg Economists said, “China is down-shifting onto a slower growth path sooner than we expected. The post-Covid rebound has run out of steam, reflecting a deepening property slump and fading confidence in Beijing’s management of the economy. Weak confidence risks becoming entrenched — resulting in an enduring drag on growth potential.” The second-largest economy in the world, China, is now expected to develop at a slower rate, to 3.5 per cent in 2030 and 1 per cent or less by 2050, according to experts. In comparison to earlier estimates of 4.3 per cent and 1.6 per cent, respectively, this is less. China’s economy grew by 3 per cent last year, which was one of the country’s slowest rates of growth in recent memory due to economic restrictions and a real estate crisis. Its final reopening gave rise to optimism that the economy will improve this year. However, as exports plummet and the real estate downturn worsens, the recovery has lost momentum. Additionally, economists surveyed by Bloomberg have lowered their growth projections for 2024 even further, to below 5 per cent. The updated prognosis comes as the international community re-evaluates how to deal with a China that may be nearing a power peak. The US and the Group of Seven countries are increasingly examining signs of deep-seated structural issues in China, spotting possibilities that could ultimately boost the West’s position against a collapsing geopolitical rival, while also taking the slowdown’s wider implications into account. Commodities and stocks are already in disorder due to this year’s setbacks. Additionally, China is coping with more serious, long-term issues. The country had its first population decline since the 1960s in 2017, which has stoked fears about declining productivity. Confidence has also been impacted by regulatory crackdowns and geopolitical conflicts with the US and other Western governments. The US, however, seems to be doing better than many economists had anticipated just a few months ago. The ability of the economy to avoid a recession for the time being has been boosted by a strong labour market, robust consumer spending, and moderate inflation. According to Bloomberg Economics, prospective US growth will be 1.7 per cent in 2022–2023, with long-term projections indicating a gradual decline to 1.5 per cent by 2050. WATCH WION LIVE HERE

Forecast: China’s slowdown means it may not surpass US economy

Targets recent earnings report provides valuable insights into the current state of American economy and consumer behaviour. The retail giants' performance sheds light on what people are buying.

Cartonomics: Decoding the state of US economy | World DNA

Target's recent earnings report provides valuable insights into the current state of the American economy and consumer behaviour. The retail giants' performance sheds light on what people are buying.

Cartonomics: Decoding the state of US economy

The US economy surprisingly accelerated to a 2.4% annual growth rate from April through June, showing continued resilience in the face of steadily higher interest rates resulting from the federal reserve’s 16-month-long fight to bring down inflation.

US economy accelerated to a 2.4% growth rate in April-June quarter | World Business Watch

In June, hiring in the United States slowed down. As per a US Labour Department statement released on Friday, this signals a cooling of the American economy before an upcoming interest rate decision.

As per an AFP report, the figures fell below analysts' expectations, providing some relief for the US Federal Reserve as it considers a return to interest rate hikes later this month that will help address persistent inflation above its long-term target of two per cent.

<h2>What the US Labour Department said</h2>

According to the Labour Department, the world's largest economy added 209,000 jobs last month, a decline from the revised figure of 306,000 in May. However, the unemployment rate slightly decreased to 3.6 per cent, remaining close to historically low levels.

The number of new jobs created fell short of the median expectation of 240,000 in a survey conducted by MarketWatch, while the unemployment rate aligned with predictions.

Also read | <a href="https://www.wionews.com/business-economy/two-bangladeshi-banks-introduce-indian-rupee-trade-transactions-to-bolster-foreign-reserves-613220">Two Bangladeshi banks introduce Indian rupee trade transactions to bolster foreign reserves</a>

However, despite the slowdown in job creation, experts believe that the Fed is unlikely to postpone another interest rate hike at its upcoming meeting.

Talking to AFP, Oxford Economics' lead US economist, Oren Klachkin, said that "It's a step in the right direction but we're not near the level that we would need to see to be convinced that the labour market is significantly cooling down".

Although job growth has eased, average hourly earnings increased by 0.4 per cent on a monthly basis and rose by 4.4 per cent annually.

<h2>'Bidenomics in action'</h2>

President Joe Biden referred to Friday's jobs report as evidence of his economic policies, stating that the economy added over 200,000 jobs in June, totalling 13.2 million jobs since he took office.

"That's more jobs added in two and a half years than any president has ever created in a four-year term," bragged Biden.

Also read | <a href="https://www.wionews.com/world/in-his-latest-bidenomics-speech-biden-touts-achievements-613035">In his latest 'Bidenomics' speech, Biden touts achievements</a>

The employment growth primarily came from sectors such as government, healthcare, social assistance, and construction.

<h2>A hike in June is certain</h2>

Minutes from the Fed's last rate decision revealed that several members of its rate-setting committee supported an interest rate hike in June to address high inflation.

AFP reports that while ultimately, the Federal Open Market Committee (FOMC) voted to pause the consecutive rate increases, it indicated the likelihood of two additional increases by the end of the year to bring inflation back down.

KPMG's chief economist, Diane Swonk, said that the Fed is expected to raise rates by at least another half per cent before pausing, with a hike in July being highly probable. However, futures traders are reportedly assigning a nearly 95 per cent probability that the Fed will raise its base rate by a quarter percentage point at the upcoming meeting on July 25-26, as per data from CME Group.

(With inputs from agencies)

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In June, hiring in the United States slowed down. As per a US Labour Department statement released on Friday, this signals a cooling of the American economy before an upcoming interest rate decision.

In June, hiring in the United States slowed down. As per a US Labour Department statement released on Friday, this signals a cooling of the American economy before an upcoming interest rate decision. As per an AFP report, the figures fell below analysts' expectations, providing some relief for the US Federal Reserve as it considers a return to interest rate hikes later this month that will help address persistent inflation above its long-term target of two per cent. What the US Labour Department said According to the Labour Department, the world's largest economy added 209,000 jobs last month, a decline from the revised figure of 306,000 in May. However, the unemployment rate slightly decreased to 3.6 per cent, remaining close to historically low levels. The number of new jobs created fell short of the median expectation of 240,000 in a survey conducted by MarketWatch, while the unemployment rate aligned with predictions. Also read | Two Bangladeshi banks introduce Indian rupee trade transactions to bolster foreign reserves However, despite the slowdown in job creation, experts believe that the Fed is unlikely to postpone another interest rate hike at its upcoming meeting. Talking to AFP, Oxford Economics' lead US economist, Oren Klachkin, said that "It's a step in the right direction but we're not near the level that we would need to see to be convinced that the labour market is significantly cooling down". Although job growth has eased, average hourly earnings increased by 0.4 per cent on a monthly basis and rose by 4.4 per cent annually. 'Bidenomics in action' President Joe Biden referred to Friday's jobs report as evidence of his economic policies, stating that the economy added over 200,000 jobs in June, totalling 13.2 million jobs since he took office. "That's more jobs added in two and a half years than any president has ever created in a four-year term," bragged Biden. Also read | In his latest 'Bidenomics' speech, Biden touts achievements The employment growth primarily came from sectors such as government, healthcare, social assistance, and construction. A hike in June is certain Minutes from the Fed's last rate decision revealed that several members of its rate-setting committee supported an interest rate hike in June to address high inflation. AFP reports that while ultimately, the Federal Open Market Committee (FOMC) voted to pause the consecutive rate increases, it indicated the likelihood of two additional increases by the end of the year to bring inflation back down. KPMG's chief economist, Diane Swonk, said that the Fed is expected to raise rates by at least another half per cent before pausing, with a hike in July being highly probable. However, futures traders are reportedly assigning a nearly 95 per cent probability that the Fed will raise its base rate by a quarter percentage point at the upcoming meeting on July 25-26, as per data from CME Group. (With inputs from agencies) WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

US hiring falls short of expectations in June, signalling cooling economy ahead of Fed decision

The United States is the largest economy in the world. The US Dollar is an unofficial global currency sought after by almost everyone. These two facts are enough to convince anyone of the pre-eminent position the country enjoys in all things money. Of course, things are more complicated than blanket statements, but in all discussions on the topic, the US invariably has a central&nbsp;position.

So it follows that if the US economy just sneezes, the entire world gets a fever, and currently, the US is tottering on debt default due to the debt ceiling crisis.

<h2>What is debt default?</h2>

In simple words, debt default is the inability of a borrower to pay back the debt. Such a default may not cause massive problems if it is just a private individual defaulting. But if a country defaults on its debts, there is sure to be a&nbsp;ripple effect in the world. And if that country is the USA, then all bets are off on the future of the world economy or even its stability and existence.

Watch | US Treasury Secretary warns country running out of cash

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<h2>What is debt ceiling?</h2>

The US has been running a fiscal deficit since 2001. This means that the income of the US government is less than its expenditure.

To meet its expenses and commitments (like debt repayment), the US has to borrow money. Now there is a limit up to which the US government can borrow. This is called a debt ceiling.

US Congress has the power to approve funds and budgets for the US government. The Congress approves the debt ceiling. If the government borrowings reach this limit, Congress takes a decision on raising the debt ceiling in accordance with the situation before the country.

<h2>What will happen if the debt ceiling is not increased?</h2>

The US will default on its debt if the debt ceiling is not raised. This means that it will not have money to pay off its loans.

<h2>So what?</h2>

This is not a situation where you are just delaying payments to a friend. In case the US defaults on its debts, it will mean that the richest, most powerful nation with all the might in the world is making an apologetic face and saying 'I can't pay off the loan, brother'.

Since the world economy more or&nbsp;less revolves around the US, it is considered to be the safest economy to invest in. Nations and entities are more than eager to lend to the US as there is a near-100 per cent guarantee that the debt will be repaid in full with interest. US debt default would shatter this image.

<h2>What happens if debt ceiling is breached or US defaults on debt?</h2>

Disaster! The US economy would be very badly hit. Moody's Analytics has estimated that if the US breaches the debt limit for just a week,&nbsp;1.5 million people will lose their jobs.

And if debt default stretches well into the summer, US economic growth will sink, and 7.8 million jobs will vanish into thin air. Borrowing rates would rise quickly. A stock market nosedive would mean that USD 10 trillion in household wealth would be erased.

And if the US economy goes down, those heavily invested in it (almost the entire world) will feel the heat in a manner most catastrophic.

<h2>So by when the debt ceiling needs to be raised to avoid all this?</h2>

In January, US Treasury Secretary Janet Yellen had said that government could pay its bill only through early June without increasing the limit.

June is not too far away.&nbsp;

<h2>So raise the debt ceiling!&nbsp;What's the holdup?</h2>

The decision lies with the US Congress. And usual elements of a political fight between the Democratic Party and the Republican Party are on show here. The Biden administration and the Republicans are currently at an impasse. Proposals from one side are unacceptable to the other.

In the month of April this year, Republicans in the House of Representatives passed a bill that will see the debt ceiling raised by USD 1.5 trillion or till March 31, 2014, whichever comes first. The House of Representatives is controlled by the Republicans.

However, Republicans have also set several conditions which are so far unacceptable to Biden and Democrats.

Republicans are arguing that the measures they've suggested are important for the health of the US economy. But the Democrats are saying that Republicans are cutting welfare measures.

According to Yahoo Finance, "These measures, Republicans say, would impose fiscal discipline on Washington that has been lacking in recent years. Meanwhile, critics say the plan would disproportionately place the responsibility for lowering the deficit on social programmes while skirting major cuts to politically popular programs like the Pentagon and veteran services that McCarthy has said will largely be spared."

On Sunday, Biden said that Republicans must budge from their 'extreme positions' and that agreement on these terms is not possible.

"It’s time for Republicans to accept that there is no bipartisan deal to be made solely&nbsp;on their partisan terms. Now it’s time for the other side to move from their extreme position," he said.

Whatever happens, raising the debt ceiling is the safest way to prevent the catastrophic ripple effect. The world looks on as US Congress debates.

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The United States is the largest economy in the world. The US Dollar is an unofficial global currency sought after by almost everyone. These two facts are enough to convince anyone of the pre-eminent position the country enjoys in all things money.

The United States is the largest economy in the world. The US Dollar is an unofficial global currency sought after by almost everyone. These two facts are enough to convince anyone of the pre-eminent position the country enjoys in all things money. Of course, things are more complicated than blanket statements, but in all discussions on the topic, the US invariably has a central position. So it follows that if the US economy just sneezes, the entire world gets a fever, and currently, the US is tottering on debt default due to the debt ceiling crisis. What is debt default? In simple words, debt default is the inability of a borrower to pay back the debt. Such a default may not cause massive problems if it is just a private individual defaulting. But if a country defaults on its debts, there is sure to be a ripple effect in the world. And if that country is the USA, then all bets are off on the future of the world economy or even its stability and existence. Watch | US Treasury Secretary warns country running out of cash × What is debt ceiling? The US has been running a fiscal deficit since 2001. This means that the income of the US government is less than its expenditure. To meet its expenses and commitments (like debt repayment), the US has to borrow money. Now there is a limit up to which the US government can borrow. This is called a debt ceiling. US Congress has the power to approve funds and budgets for the US government. The Congress approves the debt ceiling. If the government borrowings reach this limit, Congress takes a decision on raising the debt ceiling in accordance with the situation before the country. What will happen if the debt ceiling is not increased? The US will default on its debt if the debt ceiling is not raised. This means that it will not have money to pay off its loans. So what? This is not a situation where you are just delaying payments to a friend. In case the US defaults on its debts, it will mean that the richest, most powerful nation with all the might in the world is making an apologetic face and saying 'I can't pay off the loan, brother'. Since the world economy more or less revolves around the US, it is considered to be the safest economy to invest in. Nations and entities are more than eager to lend to the US as there is a near-100 per cent guarantee that the debt will be repaid in full with interest. US debt default would shatter this image. What happens if debt ceiling is breached or US defaults on debt? Disaster! The US economy would be very badly hit. Moody's Analytics has estimated that if the US breaches the debt limit for just a week, 1.5 million people will lose their jobs. And if debt default stretches well into the summer, US economic growth will sink, and 7.8 million jobs will vanish into thin air. Borrowing rates would rise quickly. A stock market nosedive would mean that USD 10 trillion in household wealth would be erased. And if the US economy goes down, those heavily invested in it (almost the entire world) will feel the heat in a manner most catastrophic. So by when the debt ceiling needs to be raised to avoid all this? In January, US Treasury Secretary Janet Yellen had said that government could pay its bill only through early June without increasing the limit. June is not too far away. So raise the debt ceiling! What's the holdup? The decision lies with the US Congress. And usual elements of a political fight between the Democratic Party and the Republican Party are on show here. The Biden administration and the Republicans are currently at an impasse. Proposals from one side are unacceptable to the other. In the month of April this year, Republicans in the House of Representatives passed a bill that will see the debt ceiling raised by USD 1.5 trillion or till March 31, 2014, whichever comes first. The House of Representatives is controlled by the Republicans. However, Republicans have also set several conditions which are so far unacceptable to Biden and Democrats. Republicans are arguing that the measures they've suggested are important for the health of the US economy. But the Democrats are saying that Republicans are cutting welfare measures. According to Yahoo Finance, "These measures, Republicans say, would impose fiscal discipline on Washington that has been lacking in recent years. Meanwhile, critics say the plan would disproportionately place the responsibility for lowering the deficit on social programmes while skirting major cuts to politically popular programs like the Pentagon and veteran services that McCarthy has said will largely be spared." On Sunday, Biden said that Republicans must budge from their 'extreme positions' and that agreement on these terms is not possible. "It’s time for Republicans to accept that there is no bipartisan deal to be made solely on their partisan terms. Now it’s time for the other side to move from their extreme position," he said. Whatever happens, raising the debt ceiling is the safest way to prevent the catastrophic ripple effect. The world looks on as US Congress debates. You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here. WATCH WION LIVE HERE ×

Explained | US is 'running out of cash'. What is the debt ceiling crisis?

US&nbsp;Treasury Secretary Janet Yellen on Tuesday sounded the alarm on the urgent need for Congress to raise the government's debt ceiling, warning that failure could trigger an "economic catastrophe."

In a recent address to business executives in Washington DC, Yellen emphasised that defaulting on debt would have far-reaching implications that could impede&nbsp;the country's economic recovery from the COVID-19 epidemic.

"A default on our debt would produce an economic and financial catastrophe," Reuters quoted Yellen telling members of the&nbsp;Sacramento Metropolitan Chamber of Commerce.

Yellen, a former Federal Reserve chairperson, further stated that a default would raise borrowing costs in perpetuity and future investments would become significantly more expensive.

Arguing that&nbsp;raising or suspending the existing borrowing cap of $31.4 trillion is the US Congress'&nbsp;responsibility, she asked lawmakers&nbsp;to act immediately to avert potential economic and financial market disruptions.

Raising the debt ceiling and rift in Congress

Credit markets could deteriorate if the debt ceiling is not increased, making it harder for businesses to secure funding. Additionally, the government may be unable to issue timely payments to military families and seniors who rely on Social Security, causing financial hardships for vulnerable populations.

Raising the debt ceiling has been a divisive issue in the US Congress, with opposing views on how to proceed.

Kevin McCarthy, the Republican Speaker&nbsp;in the House of Representatives, recently suggested a plan that would combine $4.5 trillion in expenditure cuts with a $1.5 trillion rise in the debt limit. The White House under Democrat Joe Biden, however, believes that the two issues should not be linked, and the proposal is expected to be rejected by the Democratic-controlled Senate.

Financial markets have grown increasingly concerned about the deadlock, with the cost of insuring exposure to US debt reaching a decade high. Analysts have cautioned that the possibility of default is increasing, which could have serious consequences for global financial stability.

US Treasury Secretary Janet Yellen on Tuesday sounded the alarm on the urgent need for Congress to raise the government's debt ceiling, warning that failure could trigger an "economic catastrophe.

US Treasury Secretary Janet Yellen on Tuesday sounded the alarm on the urgent need for Congress to raise the government's debt ceiling, warning that failure could trigger an "economic catastrophe." In a recent address to business executives in Washington DC, Yellen emphasised that defaulting on debt would have far-reaching implications that could impede the country's economic recovery from the COVID-19 epidemic. "A default on our debt would produce an economic and financial catastrophe," Reuters quoted Yellen telling members of the Sacramento Metropolitan Chamber of Commerce. Yellen, a former Federal Reserve chairperson, further stated that a default would raise borrowing costs in perpetuity and future investments would become significantly more expensive. Arguing that raising or suspending the existing borrowing cap of $31.4 trillion is the US Congress' responsibility, she asked lawmakers to act immediately to avert potential economic and financial market disruptions. Raising the debt ceiling and rift in Congress Credit markets could deteriorate if the debt ceiling is not increased, making it harder for businesses to secure funding. Additionally, the government may be unable to issue timely payments to military families and seniors who rely on Social Security, causing financial hardships for vulnerable populations. Raising the debt ceiling has been a divisive issue in the US Congress, with opposing views on how to proceed. Kevin McCarthy, the Republican Speaker in the House of Representatives, recently suggested a plan that would combine $4.5 trillion in expenditure cuts with a $1.5 trillion rise in the debt limit. The White House under Democrat Joe Biden, however, believes that the two issues should not be linked, and the proposal is expected to be rejected by the Democratic-controlled Senate. Financial markets have grown increasingly concerned about the deadlock, with the cost of insuring exposure to US debt reaching a decade high. Analysts have cautioned that the possibility of default is increasing, which could have serious consequences for global financial stability.

Janet Yellen’s warning: Raise US debt ceiling or face economic catastrophe

Crunch talks between US President Joe Biden and senior Republicans have been postponed until early next week to allow staff to continue working, the White House said in a statement Thursday.&nbsp;

A source familiar with the meetings between Democratic and Republican leaders said this was a positive development and that talks between the two sides were progressing, making Friday not the right moment for the leaders to meet.

But the Republican speaker of the House of Representatives, Kevin McCarthy, accused Democrats, including Senate Minority Leader Chuck Schumer, of holding up the deal.&nbsp;

"President Biden and Senator Schumer are stuck on no, they have no plan, no proposed savings and no clue," he told reporters shortly after the White House announced the talks had been postponed.&nbsp;

ALSO READ |&nbsp;<a href="https://www.wionews.com/world/us-pres-biden-house-speaker-mccarthy-meeting-on-debt-ceiling-ends-with-no-movement-talks-to-continue-590804">US Pres Biden, House Speaker McCarthy meeting on debt ceiling fails to break deadlock, threat of default looms</a>

"The staff has met the last two days, we think it's productive for the staff to meet again," McCarthy said, adding he expected there would be another meeting between senior Republican and Democratic leaders next week.&nbsp;

Averting the 'X-date'&nbsp; 
 
The two sides remain sharply divided over the debt ceiling, with Republicans in Congress insisting that Biden agree to significant budget cuts in exchange for support to lift the limit before the country runs out of money to pay its existing bills.

Democrats have been calling for a "clean" increase of the borrowing limit, accusing Republicans of using extreme tactics to push their political agenda ahead of the so-called "X-date" -- the point at which the US will be unable to meet its financial obligations. 
 
ALSO READ |&nbsp;<a href="https://www.wionews.com/business-economy/us-debt-limit-crisis-rise-in-market-bets-on-probability-of-default-591190">US debt limit crisis: Rise in market bets on probability of default</a>

The planned talks between Biden and McCarthy were the second scheduled for this week, as both sides look to avoid the X-date, which US Treasury Secretary Janet Yellen has warned could come as soon as June 1.&nbsp;

President Biden suggested earlier this week that he may cancel a planned trip to Asia if talks do not yield a breakthrough on the debt ceiling.&nbsp;

Earlier this week, former president Donald Trump suggested at a CNN event that Republicans should trigger a default if Biden fails to agree to spending cuts.&nbsp;

"I say that the Republicans out there, congressmen, senators, if they don't give you massive cuts, you're gonna have to do a default," said Trump, who is the current frontrunner for the 2024 Republican nomination.&nbsp;

'Serious repercussions' 
 
Calls for the US to avert a debt default have been growing as the X-date approaches.&nbsp;

"The debt ceiling is potentially catastrophic," JPMorgan's chief executive Jamie Dimon said in interview with Bloomberg TV on Thursday.&nbsp;

ALSO READ |&nbsp;<a href="https://www.wionews.com/world/explained-whats-us-debt-ceiling-why-is-it-such-a-big-deal-554338">EXPLAINED: What's US debt ceiling &amp; why is it such a big deal?</a>

"People should remember the American financial system is the foundation to the global economic system," he said, adding he hoped a debt default could be avoided. &nbsp;

Earlier Thursday, the International Monetary Fund also warned of severe consequences if the US didn't pay its debts.

"Our assessment is that there would be very serious repercussions not only for the US but also for the global economy should there be a US debt default," IMF communications director Julie Kozack told reporters, encouraging all parties to urgently resolve the matter. 
 
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Crunch talks between US President Joe Biden and senior Republicans have been postponed until early next week to allow staff to continue working, the White House said in a statement Thursday.

Crunch talks between US President Joe Biden and senior Republicans have been postponed until early next week to allow staff to continue working, the White House said in a statement Thursday. A source familiar with the meetings between Democratic and Republican leaders said this was a positive development and that talks between the two sides were progressing, making Friday not the right moment for the leaders to meet. But the Republican speaker of the House of Representatives, Kevin McCarthy, accused Democrats, including Senate Minority Leader Chuck Schumer, of holding up the deal. "President Biden and Senator Schumer are stuck on no, they have no plan, no proposed savings and no clue," he told reporters shortly after the White House announced the talks had been postponed. ALSO READ | US Pres Biden, House Speaker McCarthy meeting on debt ceiling fails to break deadlock, threat of default looms "The staff has met the last two days, we think it's productive for the staff to meet again," McCarthy said, adding he expected there would be another meeting between senior Republican and Democratic leaders next week. Averting the 'X-date' The two sides remain sharply divided over the debt ceiling, with Republicans in Congress insisting that Biden agree to significant budget cuts in exchange for support to lift the limit before the country runs out of money to pay its existing bills. Democrats have been calling for a "clean" increase of the borrowing limit, accusing Republicans of using extreme tactics to push their political agenda ahead of the so-called "X-date" -- the point at which the US will be unable to meet its financial obligations. ALSO READ | US debt limit crisis: Rise in market bets on probability of default The planned talks between Biden and McCarthy were the second scheduled for this week, as both sides look to avoid the X-date, which US Treasury Secretary Janet Yellen has warned could come as soon as June 1. President Biden suggested earlier this week that he may cancel a planned trip to Asia if talks do not yield a breakthrough on the debt ceiling. Earlier this week, former president Donald Trump suggested at a CNN event that Republicans should trigger a default if Biden fails to agree to spending cuts. "I say that the Republicans out there, congressmen, senators, if they don't give you massive cuts, you're gonna have to do a default," said Trump, who is the current frontrunner for the 2024 Republican nomination. 'Serious repercussions' Calls for the US to avert a debt default have been growing as the X-date approaches. "The debt ceiling is potentially catastrophic," JPMorgan's chief executive Jamie Dimon said in interview with Bloomberg TV on Thursday. ALSO READ | EXPLAINED: What's US debt ceiling & why is it such a big deal? "People should remember the American financial system is the foundation to the global economic system," he said, adding he hoped a debt default could be avoided. Earlier Thursday, the International Monetary Fund also warned of severe consequences if the US didn't pay its debts. "Our assessment is that there would be very serious repercussions not only for the US but also for the global economy should there be a US debt default," IMF communications director Julie Kozack told reporters, encouraging all parties to urgently resolve the matter. WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

US debt ceiling talks postponed until next week: White House

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