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Stuck in the grip of a viral pandemic, the U.S. economy grew at a 4% annual rate in the final three months of 2020 and shrank last year by the largest amount in 74 years.

For 2020 as a whole, a year when the coronavirus inflicted the worst economic freeze since the end of World War II, the economy contracted 3.5% and clouded the outlook for this year. The economic damage followed the eruption of the pandemic 10 months ago and the deep recession it triggered, with tens of millions of Americans left jobless.

Thursday’s report from the Commerce Department estimated that the nation’s gross domestic product — its total output of goods and services — slowed sharply in the October-December quarter from a record 33.4% surge in the July-September quarter. That gain had followed a record-shattering annual plunge of 33.4% in the April-June quarter, when the economy sank into a free-fall.

The pandemic’s blow to the economy early last spring ended the longest U.S. economic expansion on record — nearly 11 years. The damage from the virus caused GDP to contract at a 5% annual rate in last year’s January-March quarter. Since then, thousands of businesses have closed, nearly 10 million people remain out of work and more than 400,000 Americans have died from the virus.

The estimated drop in GDP for 2020 was the first such decline since a 2.5% fall in 2009, during the recession that followed the 2008 financial crisis. That was the deepest annual setback since the economy shrank 11.6% in 1946, when the economy was demobilizing after World War II. The most catastrophic annual contraction in records dating to 1930 was a 12.9% fall in 1932 during the Great Depression.

The government’s report Thursday was its first of three estimates of growth last quarter; the figure will be revised twice in the coming weeks.

The outlook for the 2021 economy remains hazy. Economists warn that a sustained recovery won’t likely take hold until vaccines are distributed and administered nationwide and government-enacted rescue aid spreads through the economy — a process likely to take months.

On Wednesday, the Federal Reserve took note of the economic threats. It kept its benchmark interest rate at a record low near zero and stressed that it would keep pursuing its low-rate policies until a recovery is well underway. The Fed acknowledged that the economy has faltered in recent months, with hiring weakening especially in industries affected by the raging pandemic, notably restaurants, bars, hotels and others involved in face-to-face public contact.

Hiring in the United States has slowed for six straight months, and employers shed jobs in December for the first time since April. The job market has sputtered as the pandemic and colder weather have discouraged Americans from traveling, shopping, dining out or visiting entertainment venues. Retail sales have declined for three straight months.

Last month, the government enacted a $900 billion rescue aid package, and President Joe Biden is pushing for lawmakers to follow up by approving his $1.9 trillion plan for further economic help. Biden’s proposal has met resistance, though, from many Republicans who contend that the cost is too high and some of its benefits misplaced.

Many economists warn that without further support, the economy risks succumbing to another recession. They note that much of the aid for individuals from the $900 billion package is set to expire in mid-March.

“The economy is still struggling,” said Mark Zandi, chief economist at Moody’s Analytics. “How strong the economy is later this year will depend on how the virus evolves and the effectiveness of the vaccines and mitigation efforts.”

Zandi predicted that the economy will expand at a 4.4% annual rate in the current quarter and achieve annual growth rates later this year above 5%. But he cautioned that his forecast is based on the enactment of further federal economic relief, and he expects Biden initially to win congressional approval for only about half his $1.9 trillion proposal.

About 5 million jobs, Zandi estimates, will never return, forcing the unemployed in such industries as restaurants and bars to find work in other sectors.

“We have lost so many low-paying service jobs at restaurants, hotels and in transportation,” said Sung Won Sohn, an economics and business professor at Loyola Marymount University in Los Angeles.

Author: News Max Staff

Source: News Max: US Economy Shrank 3.5 Percent in 2020 Despite 4 Percent Growth in Q4

The U.S. Treasury Department will resume Obama-era plans to put abolitionist Harriet Tubman on the $20 bill and President Joe Biden wants to accelerate the process, White House Press Secretary Jen Psaki said.

U.S. money should “reflect the history and diversity of our country and Harriet Tubman’s image gracing the new $20 note would certainly reflect that,” she said at a briefing for reporters. “We’re exploring ways to speed up that effort.”

Tubman, a former slave who helped others to freedom, was to become the first woman and first minority to appear on U.S. paper currency. Andrew Jackson, the seventh U.S. president, is currently on $20 bills.

The Trump administration slowed those plans, announced during Barack Obama’s presidency. Former Treasury Secretary Steven Mnuchin announced in 2019 that $20 bills with portraits other than Jackson wouldn’t circulate until 2028, and he declined to commit to placing Tubman’s picture on the currency.

Tubman escaped slavery and became a leading figure in the movement to abolish the practice before the Civil War. She led hundreds to freedom along the Underground Railroad to the North, where slavery was banned. During the Civil War, she served as a spy for the Union Army.

Author: NewsMax Staff

Source: NewsMax: Biden Looks to Expedite Putting Harriet Tubman on $20 Bill

The Biden administration has suspended new oil and gas leasing and drilling on public lands and waters for 60 days as part a review of programs at the Department of Interior.

The move follows President Joe Biden’s campaign pledge to halt new drilling and end the leasing of publicly owned energy reserves as part of his plan to address climate change.

The suspension went into effect immediately under an order signed Wednesday by Acting Interior Secretary Scott de la Vega. It drew a quick backlash from the oil industry.

The order also blocks approval of new mining plans, land sales or exchanges and the hiring of senior-level staff at the agency.

Author: NewsMax Staff

Source: NewsMax: Biden Suspends New Oil and Gas Leases, Permits for 60 Days

An emotional President-elect Joe Biden flew to Washington Tuesday on the eve of his inauguration, as his predecessor Donald Trump — who will not attend Biden’s swearing-in — for the first time wished success to the new administration.

Tears rolled down Biden’s cheeks at a farewell ceremony in his hometown of Wilmington, Delaware, where he paid tribute to his late son and rising politician Beau, before catching a plane to the capital.

“I only have one regret, that he’s not here,” Biden said.

Trump, who has not appeared in public for a week, broke days of silence with a pre-recorded farewell video address.

Trump for the first time asked Americans to “pray” for the success of the incoming Biden administration — a change of tune from weeks spent persuading his huge number of Republican followers that the Democrat cheated in their election battle.

Trump has yet to personally congratulate Biden on his win or invite him for the customary cup of tea in the Oval Office, however.

In one of his last acts before he flies to Florida from Joint Base Andrews on Wednesday morning, Trump is expected to issue scores of pardons, with speculation rife over who might make the list.

The latest indications are that Trump will not take the legally dubious step of issuing himself and his children preemptive pardons.

Outside the White House fence, central Washington has taken on a dystopian look ahead of Biden’s inauguration, swarming with National Guard troops and largely emptied of ordinary people.

COVID-19 restrictions meant the swearing-in ceremony at noon on Wednesday was always due to be sparsely attended. But fears of right-wing attacks in the wake of the pro-Trump riot in the Capitol building on January 6 have triggered unprecedented deployments of armed soldiers, concrete barriers and secure areas dubbed “green” and “red” zones.

Adding to the tension, the Senate is expected to put Trump on trial soon, following his record second impeachment by the House of Representatives over the Capitol riot.

Meanwhile, Biden, a veteran Democratic senator who also served as vice president to Barack Obama, left for Washington with his wife Jill Biden.

They are staying in Blair House, a residence for heads of state and other important visitors just across the street from the White House.

Together with incoming vice president Kamala Harris — the first woman ever to hold the job — Biden first attended an evening memorial at the Lincoln Memorial Reflecting Pool in honor the 400,000 Americans who have died so far from the coronavirus — 100,000 of them in a little over a month’s time.

“To heal, we must remember. It’s hard sometimes to remember, but that’s how we heal. It’s important to do that as a nation,” he said.

Stretching up the Mall to the Capitol building, where Biden and Harris will be sworn in, the grassy area has been filled with some 200,000 American flags to represent the vast crowds that usually attend inaugurations.

Fifty-six pillars of light will beam up to represent the states and territories.

Another eye-catching number is the more than 20,000 National Guards troops on duty, many of them carrying automatic rifles and dressed in full combat gear.

But Biden is coming in with a message of unity, insisting that he can bring a divided country back to the center and confront the nation’s multiple crises, starting with the pandemic, together.

The inaugural speech will last between 20-30 minutes, according to a source familiar with preparations, and “he will reach out to all Americans, and call on every citizen to be part of meeting the extraordinary challenges facing all of us,” an advisor said, asking to remain unnamed.

To symbolize the new spirit, Biden has invited the two top senators — Democrat Chuck Schumer and Republican Mitch McConnell — and other top congressional leaders to attend a church service with him on Wednesday before the inauguration.

A person familiar with McConnell’s plans confirmed to AFP the Republican congressional leader would join Biden, a longtime Senate colleague, in church.

– Pardons –

For Trump, the main piece of unfinished business is now the expected slew of pardons that he is reported to be preparing.

According to CNN and other U.S. outlets, Trump has a list of about 100 people he will grant clemency to.

After what The New York Times reports has been an intense lobbying effort, these are expected to be a mix of white-collar criminals and people whose cases have been championed by criminal justice activists.

More controversial possible pardons that have been the subject of speculation for months would be for the likes of Edward Snowden, Julian Assange and Trump’s influential advisor Steve Bannon.

But Trump has, according to latest media reports, moved away from the temptation to issue himself a preemptive pardon. This would anger his Republican backers in the Senate right ahead of the start of the impeachment trial.

Although Trump was easily acquitted thanks to party support in his first impeachment last year, this time might be a tougher proposition, say some observers.

Senior Senate Republican Mitch McConnell said Tuesday that Trump had “provoked” his supporters and that the “mob was fed lies” before embarking on the assault against Congress.

Author: NewsMax Staff

Source: NewsMax: ‘Pray’ for Biden Team, Says Trump on Last Day in Office

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