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Original Caption: US Democrats Win Senate, Hopes for Extra $ 600 in Unemployment Benefits! Biden Made Clear “Not Enough”, Stabilized and Rebounded Gold Price May Not Be Far Away
Although the US non-farm sector unexpectedly turned upside down in December, the market is not as pessimistic about the US economic outlook because the Biden administration is expected to launch more stimulus plans. On January 10, market analyst Elisabeth Buchwald believed that after the Democrats took control of the Senate, they were expected to resume an additional unemployment allowance of $ 600 per week. Biden has already hinted that $ 600 is “not enough.” According to the latest reports, Biden’s economic stimulus plan may far exceed market expectations.
Bad news about the US economy keeps coming in, but don’t expect investors to be so concerned at the start of the new year.
The latest data released by the US Department of Labor last Friday showed that the December report on the number of non-farm jobs in the United States unexpectedly fell, down 140,000, and the first negative value since April. 2020. A number of other indicators also show that the US economy is weakening.
The market expects US economic data this week to not be much better. The United States will release retail sales data for December this Friday and a slight increase is expected. Auto sales in the United States recovered in December and the holiday shopping season may boost sales. However, other reports are expected to show that the number of weekly layoffs in the United States remains high, consumer confidence is weak, and job opportunities are shrinking.
Wall Street is not concerned about the problems facing the US economy. US stocks are still performing well. Last week, the Dow broke the 31,000 mark for the first time.
Under pressure from record growth in the number of coronavirus infections and deaths, investors are looking to the future as the US economy is in trouble again. The vaccine is slowly being distributed across the country, and President-elect Biden promised to provide more federal aid to the economy.
Robert Dye, chief economist at Dallas Comerica Bank, said: “If we can deliver vaccines effectively, we will have a strong foundation.”
More importantly, the latest employment report for December contains more hope. The unemployed are mainly concentrated in bars, restaurants, hotels and entertainment industries, which are industries that deal directly with customers. Most of the other major economic sectors added more employment in December than in November. This shows that, apart from leisure and hotels, the virus outbreak has not caused much damage.
Tom Porcelli, chief economist at RBC Capital Markets, said: “Beneath the surface, this report is really very good.”
At the same time, the federal aid package signed by outgoing President Trump in December 2020, and the additional assistance that the Biden administration can provide, will help America’s unemployed and the economic recovery in general.
The Democrats who control the Senate can restore an additional $ 600 in unemployment benefits per week, and Biden hints that this is not enough.
On January 10, market analyst Elisabeth Buchwald said that with the Democratic Party taking control of the Senate, the additional weekly unemployment benefit of $ 600 is expected to be reinstated.
Last week, the US Democratic Party won two senatorial seats in Georgia and gained control of the Senate, thus forming a “sweeping” situation in which the Democratic Party controls the White House and both houses of Congress at the same time. This can bring major changes to the roughly 10 million Americans who currently receive unemployment benefits.
Democratic Senator Ron Wyden of Oregon will chair the Senate Finance Committee. He said, “My starting point is to pass legislation to restore an additional $ 600 weekly unemployment benefit and tie the extra weeks of benefits and strange work plans to economic conditions.”
Did you report on January 9 that under California Governor Gavin Newsom’s budget proposal, millions of low-income Californians will receive an additional $ 600 from the state?
The $ 600 weekly benefit is part of the CARES Act, which expires at the end of July 2020. Many Republican lawmakers oppose extending the bill because studies have found that two-thirds of unemployed Americans get more unemployment benefits. of those who get from work.
As the new president of the United States, Biden believes that $ 600 is “not enough.” He said on Friday he is working on a trillion-dollar bailout plan that will increase the economic stimulus funds provided to Americans to $ 2,000, expand unemployment insurance and provide billions of dollars in aid to cities and towns. state governments. , Adopt swift measures to face the deterioration of the country’s economic conditions and the devastating epidemic.
After Biden won the election, the Wall Street investment bank represented by Goldman Sachs predicted that Biden’s future trip to the White House would have to deal with the Republican-controlled Senate, which is why the first bill from Stimulus after he came to power could range from $ 500 billion to $ 1 trillion. Between.
But now it appears that Biden’s economic stimulus plan far exceeds the stimulus scale previously estimated by the market.
Judging from existing reports, Biden’s economic stimulus plan will be divided into two steps: first, increase the amount of cash for epidemic assistance from $ 600 per person to $ 2,000 per person, and then spend $ 3 trillion Americans in taxes. And infrastructure facilities.
It is worth noting that there is a relatively rare scene in the US political arena. The House of Representatives, the Senate and the White House are controlled by Democrats. In this way, it should be relatively easy for Biden to introduce relevant policies within two years of taking office, and restrictions on parties in Congress will be lowered. Biden’s inauguration day is scheduled for January 20, 2021, which is only about 10 days away. After being sworn in, he will move into the White House later that day for a four-year term.
The price of gold continued to fall on January 11, falling more than 1%, with the lowest falling to $ 1,817.53 an ounce, the lowest since December 2. It is currently trading around 1843, weakened by the rise of the US dollar and high US bond yields. The attraction of gold.
Huitong.com recalls,
Based on the previous news, it can be seen that with the Democratic Party sweeping through Congress and Biden is about to come to power, the United States is likely to resume an additional $ 600 weekly unemployment benefit and may launch more plans of stimulus, the scale of which will be even larger than expected. Help limit the decline in gold prices and stabilize the rally going forward.
At 2:43 p.m. on January 11, Beijing time,
Cash gold
Quoted at $ 1,844.56 an ounce.
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