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A blockade of the bridge between Canada and Detroit by protesters demanding an end to Canada’s COVID-19 restrictions forced the shutdown Wednesday of a Ford plant and began to have broader implications for the North American auto industry.

Prime Minister Justin Trudeau, meanwhile, stood firm against an easing of Canada’s COVID-19 restrictions in the face of mounting pressure during recent weeks by protests against the restrictions and against Trudeau himself.

The protest by people mostly in pickups entered its third day at the Ambassador Bridge between Detroit and Windsor, Ontario. Traffic was prevented from entering Canada, while U.S.-bound traffic was still moving.

The bridge carries 25% of all trade between the two countries, and Canadian authorities expressed increasing worry about the economic effects.

Ford said late Wednesday that parts shortages forced it to shut down its engine plant in Windsor and to run an assembly plant in Oakville, Ontario, on a reduced schedule.

Shortages caused by the blockade also forced General Motors to cancel the second shift of the day at its midsize-SUV factory near Lansing, Michigan. Spokesperson Dan Flores said it was expected to restart Thursday and no additional impact was expected for the time being.

Later Wednesday, Toyota spokesperson Scott Vazin said the company will not be able to manufacture anything at three Canadian plants for the rest of this week because of parts shortages. A statement attributed the problem to supply chain, weather and pandemic-related challenges, but the shutdowns came just days after the blockade began Monday.

A growing number of Canadian provinces have moved to lift some of their precautions as the omicron surge levels off, but Trudeau defended the measures the federal government is responsible for, including the one that has angered many truck drivers: a rule that took effect Jan. 15 requiring truckers entering Canada to be fully vaccinated.

“The reality is that vaccine mandates, and the fact that Canadians stepped up to get vaccinated to almost 90%, ensured that this pandemic didn’t hit as hard here in Canada as elsewhere in the world,” Trudeau said in Parliament.

About 90% of truckers in Canada are vaccinated, and trucker associations and many big-rig operators have denounced the protests. The U.S. has the same vaccination rule for truckers entering the country, so it would make little difference if Trudeau lifted the restriction.

Protesters have also been blocking the border crossing at Coutts, Alberta, for a week and a half, with about 50 trucks remaining there Wednesday. And more than 400 trucks have paralyzed downtown Ottawa, Canada’s capital, in a protest that began late last month.

While protesters have been calling for Trudeau’s removal, most of the restrictive measures around the country have been put in place by provincial governments. Those include requirements that people show proof-of-vaccination “passports” to enter restaurants, gyms, movie theaters and sporting events.

Alberta, Saskatchewan, Quebec, Prince Edward Island and Nova Scotia announced plans this week to roll back some or all of their precautions. Alberta, Canada’s most conservative province, dropped its vaccine passport immediately and plans to get rid of mask requirements at the end of the month.

Alberta opposition leader Rachel Notley accused the province’s premier, Jason Kenney, of allowing an “illegal blockade to dictate public health measures.”

Despite Alberta’s plans to scrap its measures, the protest there continued.

“We’ve got guys here — they’ve lost everything due to these mandates, and they’re not giving up, and they’re willing to stand their ground and keep going until this is done,” said protester John Vanreeuwyk, a feedlot operator from Coaldale, Alberta.

“Until Trudeau moves,” he said, “we don’t move.”

As for the Ambassador Bridge blockade, Windsor Mayor Drew Dilkens said police had not removed people for fear of inflaming the situation. But he added: “We’re not going to let this happen for a prolonged period of time.”

The demonstration involved 50-74 vehicles and about 100 protesters, police said. Some of the protesters say they are willing to die for their cause, according to the mayor.

“I’ll be brutally honest: You are trying to have a rational conversation, and not everyone on the ground is a rational actor,” Dilkens said. “Police are doing what is right by taking a moderate approach, trying to sensibly work through this situation where everyone can walk away, nobody gets hurt, and the bridge can open.”

To avoid the blockade and get into Canada, truckers in the Detroit area had to drive 70 miles north to Port Huron, Michigan, and cross the Blue Water Bridge, where there was a 4½-hour delay leaving the U.S.

At a news conference in Ottawa that excluded mainstream news organizations, Benjamin Dichter, one of the protest organizers, said: “I think the government and the media are drastically underestimating the resolve and patience of truckers.”

“Drop the mandates. Drop the passports,” he said.

The “freedom truck convoy” has been promoted by Fox News personalities and attracted support from many U.S. Republicans, including former President Donald Trump.

Pandemic restrictions have been far stricter in Canada than in the U.S., but Canadians have largely supported them. Canada’s COVID-19 death rate is one-third that of the U.S.  
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President Joe Biden on Tuesday announced that an Australian company that makes chargers for electric vehicles will build a manufacturing facility in Tennessee, while reiterating his commitment to make the U.S. government’s fleet of cars electric. 

The new plant will produce up to 30,000 electric vehicle chargers per year and create 500 local jobs, according to Biden and the Brisbane-based company, Tritium. State officials said production is scheduled to start in the third quarter of 2022. 

Biden touted “an American manufacturing comeback.” Tritium’s chargers will “use American parts, American iron, American steel,” and will be installed by union workers, Biden said. He said the federal government’s fleet of 600,000 vehicles will “end up being electric vehicles.” 

“The benefits are going to ripple through thousands of miles in every direction and these jobs will multiply,” Biden said, adding the manufacturing plants will lead to a growth in steel mills, small parts suppliers and construction sites throughout the country. 

Tritium CEO Jane Hunter appeared alongside Biden at the White House and said Biden’s policies “have contributed to enormous demand” for Tritium products in the United States. This “directly led us to pivot and change our global manufacturing strategy.” 

Biden also announced that this week, the White House will roll out a state-by-state allocation of $5 billion in funding for electric vehicle chargers. He used the speech to highlight contributions by U.S. companies involved in manufacturing electric vehicles including Tesla, a company Biden has refrained from naming in the past. 

Biden has made rebuilding American manufacturing a key of his economic agenda, including pushing for billions of dollars of public and private investments in the electric vehicle industry. The bipartisan infrastructure bill passed last year provided money for a sprawling network of electric vehicle charging stations across the country. 

Biden has said electric cars will be more climate-friendly and affordable for American families, and the White House has set a target of half the vehicles sold in the United States to be electric or plug-in hybrids by 2030. 

The Tritium announcement is the latest in recent weeks by major companies announcing investments in U.S. manufacturing and jobs, including Intel, General Motors and Boeing. More than $200 billion in investments in domestic manufacturing of semiconductors, electric vehicles, aircraft, and batteries have been announced since 2021. 

 
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The United States posted its largest ever full-year trade deficit in the 12 months ending in December, according to data released by the Commerce Department on Tuesday, signaling continued strong economic growth and vibrant consumer demand as the country emerges from the recession induced by the COVID-19 pandemic. 

In calendar year 2021, the U.S. imported goods and services worth $859.1 billion more than it exported, a 27% increase over the gap in 2020 and the largest single-year figure since the government began tracking the measure in 1960. The next-closest was in 2006, when the deficit hit $763.53 billion. 

In the month of December alone, the U.S. imported $80.7 billion more than it exported, just shy of the one-month record of $80.8 billion set in September. The country’s total imports in December amounted to $308.9 billion, as compared with $228.1 billion in exports. 

A sign of economic health 

Although a trade deficit is often cast in negative terms, economists usually see it as a sign of economic strength, indicating a net flow of investment into the country. 

“Whenever the U.S. economy is doing well, the deficit gets worse,” Joseph Francois, an economist and the managing director of the World Trade Institute at the University of Bern, Switzerland, told VOA.  

A strong U.S. economy attracts foreign investment, helping to create new jobs and driving up consumption, much of which is targeted at goods manufactured overseas, Francois said.  

“You’ve got more investment coming in, because people want to put more money in the U.S. economy when it’s doing better,” Francois said. “And the result is the trade deficit looks worse, especially for merchandise. So in a sense, when the economy is doing what it is doing now – creating lots of jobs and recovering from the COVID recession – you’re going to see an increase in the deficit relative to the baseline that we had before.” 

Francois also pushed back against the common misconception that a trade deficit in the U.S. somehow translates into fewer jobs for American workers.  

“The idea that somehow, if the deficit is big, you’re losing jobs just runs counter to the facts,” he said. “When the economy does better, the deficit gets bigger. Again, keep in mind, you want more investment. That’s what generates jobs. And you can’t have net investment unless you’ve got a trade deficit.” 

Biden administration touts economic improvement 

A spokesperson for the National Security Council told VOA the White House sees the trade figures released Tuesday as part of a larger positive story about the direction of the U.S. economy, while at the same time pointing to efforts to increase exports. 

“Over the course of 2021, our exports also recovered from the pandemic-induced decline of 2020,” the spokesperson said. “For example, during President Biden’s first 11 months in office, American agricultural exports reached a record $160 billion, generating an estimated $342 billion in total economic output and supporting more than 1.2 million jobs here in the United States.” 

The NSC spokesperson also mentioned the Biden administration’s efforts to sell more U.S. goods abroad, noting agreements with the United Kingdom and the European Union on the sale of civilian aircraft and a broader agreement on steel and aluminum. 

“That being said, the trade deficit does not determine American prosperity or American influence in the world,” the spokesperson said. “In fact, the recent rise in the deficit is primarily a sign of the strength of the economic recovery and the efforts the administration has made to resolve supply chain disruptions.” 

Deficit with China remains largest  

China remains the single largest source of the U.S. trade deficit, accounting for $355.3 billion of the total deficit in 2021, or 41% of the total. That figure was up from $310.3 billion in 2020, but reflected a lower percentage of the total deficit. 

The next-largest single-country trade deficit posted by the U.S. in 2021 was with Mexico, which exported $108.2 billion more in goods and services to the U.S. than it imported, a decline from a deficit of $113.7 billion in 2020. 

The U.S. also ran a net deficit with the countries of the European Union, importing $219.6 billion more in goods and services than it exported, an increase of 19.1% over 2020. However, the net deficit with the EU reflected roughly the same percentage of the total trade deficit, about 26%, as it had a year earlier. 

Trade tensions with China persist 

U.S. officials remain frustrated by the fact that China has not yet complied with the obligations it undertook in the so-called Phase One trade deal negotiated by the Trump administration in January 2020. The deal was an effort to lower tensions in the trade war that erupted between the two nations during Trump’s term in office. 

Under the deal, the Chinese government had promised to increase its imports from the U.S. by $200 billion over and above its pre-2020 levels. 

An analysis released by the Peterson Institute for International Economics on Tuesday pointed out that since then, China’s purchases of U.S. goods have fallen far short of those promises. 

“In the end, China bought only 57 percent of the US exports it had committed to purchase under the agreement, not even enough to reach its import levels from before the trade war,” the analysis found. “Put differently, China bought none of the additional $200 billion of exports Trump’s deal had promised.” 

In a press conference at the White House on Tuesday, White House press secretary Jen Psaki said that the Biden administration had, through the Office of the U.S. Trade Representative, “expressed our concerns” about the issue. “It is on China to show that it can follow through on its commitment,” Psaki said. 

Patsy Widakuswara contributed to this report.
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In a surprising burst of hiring, America’s employers added a robust 467,000 jobs last month, a sign of the economy’s resilience in the face of a wave of omicron infections. 

The government’s report Friday also drastically revised up its estimate of job gains for November and December by a combined 709,000. It also said the unemployment rate ticked up from 3.9% to a still-low 4%, mainly because more people began looking for work and not all of them found jobs right away. 

The strong hiring growth for January, which defied expectations for only a slight gain, demonstrated the eagerness of many employers to hire even as the pandemic raged. Businesses appear to have regarded the omicron wave as having, at most, a temporary impact on the economy and remain confident about their longer-term prospects. 

“Employers have assumed that omicron would be painful but short term, so they haven’t changed their hiring plans,” said Mathieu Stevenson, the CEO of Snagajob, a job listings site focused on hourly workers. “Demand from employers is as strong as ever.” 

January’s hiring gain and sharp upward revisions to previous months mean that the United States has 1.1 million more jobs than government data had indicated only a month ago. The solid hiring, along with steady wage gains, are boosting consumer spending, which has collided with snarled supply chains to accelerate inflation to a four-decade high. 

Adjusted for price increases, Americans’ paychecks on average don’t go as far as they did a year ago, even though many workers have received raises. Many households, especially lower-income families, are struggling to afford necessities like gas, food, rent and child care. 

Those trends will give the Federal Reserve more leeway to raise interest rates, perhaps even faster than it had planned, to cool inflation. The Fed has indicated that it will begin raising rates in March, and it could do so again at its next meeting in May. Faster rate hikes could reduce borrowing and spending and possibly weaken the economy. 

Stocks initially fell on the expectation that the Fed will tighten credit more quickly, before share prices recovered in early afternoon. But the yield on the 10-year Treasury jumped nearly one-tenth of a percentage point, to 1.91%, a sign that investors anticipate higher borrowing costs. 

Across the economy, most industries hired workers last month, including retailers, which added more than 61,000 jobs, and restaurants and hotels, which gained 131,000. Shipping and warehousing firms added 54,000. Many companies in those industries likely held onto some of the workers they had hired over the winter holidays, economists said, rather than laying them all off. 

Omicron did leave some fingerprints on the report: The percentage of Americans who were working from home rose to more than 15%, up from 11% in December. And the number of people out sick last month soared to 3.6 million, up from fewer than 2 million in the previous January and about triple the pre-pandemic level. This forced many companies, from restaurants to retailers to manufacturers, to reduce their hours or even close because of staff shortages. 

Among the workers who were out sick was Perla Hernandez, whose entire family of eight contracted COVID last month. Hernandez and her husband and 20-year old daughter all missed work, a major blow to the family’s finances. 

Hernandez, 42, who lives in the San Jose, California, area, missed six days from her job as a Burger King cook and janitor. Because she has no paid sick leave, the paycheck she receives every two weeks amounted to just $230. 

About one-fifth of U.S. workers receive no sick pay, and the proportion is far higher among lower-paid service workers. Only 33% of workers who are at the bottom 10% of the pay scale receive paid sick leave, compared with 95% of employees in the top 10%. 

“Thank God that we already had paid the rent for January,” she said through an interpreter. “We had to go to a food bank.” 

Hernandez said she earns $15.45 an hour, after having received a 45-cent raise six months ago. But she and her colleagues, including managers, have been working especially long hours because the restaurant has had difficulty hiring. 

Daniel Zhao, senior economist at the employment website Glassdoor, said the healthy hiring — not only for January but also for November and December — is a sign that last month’s gains weren’t merely a blip. 

“This is an actual trend, and job growth was faster than we realized,” Zhao said. 

A greater proportion of Americans are also now working or looking for work, the report showed, a trend that makes it easier for companies to find workers. It suggests that concerns about long-term labor shortages may have been overblown, at least in some industries. 

“There are workers out there — it’s just taking time to integrate them back into the labor force,” Zhao said. 

Grady Cope, the CEO of Reata Engineering and Machine Works, said nine of his 43 staffers were out sick last month — the most he can remember in nearly 30 years of running the company. 

But Cope’s company, which makes parts for airplane and medical device manufacturers, also has the biggest order backlog it’s ever had. He wants to add at least eight employees, including machinists, assemblers and engineers. Last month, he raised pay 18%, far more than the usual 3%-4% increases. His company is based near Denver, where rents and other costs are rising fast. 

“People have to have wages so they can support themselves and raise families,” he said. 

Still, Cope has been increasing his own prices to offset his workers’ higher pay. The competition for workers, he said, is the toughest he’s ever seen. In October, four of his workers quit. Only one gave notice. 

“That’s never happened in 28 years,” he said. 

The overall outlook for the job market remains bright, with openings near a record high, the pace of layoffs down and the unemployment rate having already reached a healthy level. The nation gained more jobs last year, adjusted for the size of the workforce, than in any year since 1978. Much of that improvement represented a rebound from record job losses in 2020 that were driven by the pandemic recession. 

 
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Norway’s central bank, Norges Bank, announced Friday it has appointed NATO Secretary-General Jens Stoltenberg to take over as its next governor after his term leading the military alliance ends later this year.

The central bank announced the appointment in a statement on its website, saying Stoltenberg had been appointed by Norway’s King Harald V. 

Stoltenberg will take over from current Norges Bank Governor Øystein Olsen, who is retiring later this month after holding the position since Jan. 1, 2011.

The 62-year-old Stoltenberg, a former prime minister of Norway, also served as finance minister from 1996 to 2000. He had previously said if he got the central bank governor position, he wouldn’t be able to start before leaving his NATO job on Oct. 1.

The central bank statement said it hopes Stoltenberg can start in his new role by Dec. 1. Until then, Norges Bank Deputy Governor Ida Wolden Bache will run the bank in an interim capacity beginning March 1.

In a statement, Norway’s current finance minister, Trygve Slagsvold, said he had been “concerned with identifying the best central bank governor for Norway, and I’m convinced that this is Jens Stoltenberg.”

The appointment ends speculation that Stoltenberg would stay on at NATO, and the search for a successor must now begin ahead of a meeting of member nation leaders in June this year.

Some information for this report was provided by the Associated Press, Reuters and Agence France-Presse.

 
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The same technology companies that helped drag the U.S. stock market back from the depths of the pandemic recession in 2021 led the market into a sharp plunge on Thursday after Meta Platforms, the company that owns Facebook, revealed that user growth on its marquee product has hit a plateau, and revenue from advertising has fallen off sharply.

Meta was not the only U.S. tech company to suffer on Thursday. Snap Inc., the owner of Snapchat; Pinterest, Twitter, PayPal, Spotify and Amazon all suffered sharp sell-offs during trading.

U.S. tech stocks are facing a variety of major challenges right now, including a possible economic slowdown, changes to privacy rules, increased regulatory pressure and competitive challenges that have pushed users — especially young people — to new platforms such as TikTok.

Every major U.S. stock index was down significantly on Thursday, with the Dow Jones Industrial Average falling by 1.45%, the S&P 500 down 2.44%, and the tech-heavy Nasdaq down 3.74%.

Meta’s Facebook struggles

Although the pain was spread broadly across the tech sector Thursday, it was the travails of Facebook that captured much of the public’s attention. The company’s shares, which were trading at $323 when the markets closed Wednesday, opened on Thursday at $242.48 and never recovered, closing at $237.76.

The 27% decline in the company’s share value translated into a loss of more than $230 billion in market value, an utterly unprecedented one-day loss for a single firm.

The share price began its tumble after the company announced for the first time ever that its total number of monthly users had not risen in the fourth quarter of 2021. Additionally, in its key North American market, Facebook saw monthly users decline slightly.

The stagnant user figures raised concerns about the company’s ability to grow even as more bad news poured in from its advertising business, which generates the overwhelming majority of the company’s profits.

Last year, Apple changed the privacy setting on its iPhones and other devices, requiring apps, including Facebook, to get each user’s explicit permission to track their activity on the internet. Prior to that change, Facebook had made extensive use of tracking software to deliver targeted advertising to its users — something its advertising clients were willing to pay a significant premium for.

Since Apple instituted the change, the majority of users have declined to allow Facebook to track their browsing, greatly diminishing the company’s ability to target advertisements. On Thursday, Meta Chief Financial Officer David Wehner told investors the company expects the changes to cost it $10 billion in advertising revenue in 2022.

Trouble with young users

Facebook has long struggled to attract younger users to its platform, and on Thursday, company officials admitted that the firm is finding it difficult to compete with TikTok, an app created by the Chinese firm ByteDance, which allows users to share brief videos.

In a call with investors, Meta CEO Mark Zuckerberg said the company’s answer to TikTok, a service called Reels, is still being developed.

“Over time, we think that there is potential for a tremendous amount of overall engagement growth” he said. “We think it’s definitely the right thing to lean into this and push as hard to grow Reels as quickly as possible and not hold on the brakes at all, even though it may create some near-term slower growth than we would have wanted.”

Zuckerberg, who holds 55% of the voting shares of Meta, giving him de facto control of the company, saw his personal wealth fall by an estimated $24 billion as a result of Thursday’s market rout.

Economic headwinds

Over the past year, investors have consistently pushed the share prices of U.S. tech firms higher. Now, though, with the Federal Reserve preparing a series of interest rate increases meant to cool the U.S. economy and slow price inflation, investors appear to be reconsidering the prices they are willing to pay.

Investors typically judge the value of a stock based on its price-to-earnings (P/E) ratio, which is determined by dividing the share price by the fraction of the company’s earnings represented by an individual share of stock.

When a company’s shares trade at a high P/E ratio that is usually because investors expect the underlying business to continue growing. However, that growth can be hampered by a slowdown in the broader economy, something many investors expect to see in the coming m

Political challenges

In addition to concerns about economic headwinds, the tech sector is facing a distinctly unfriendly regulatory environment in the U.S. Lawmakers in both parties have expressed their concern that big technology companies enjoy too much influence over areas like popular culture and political discourse but face too little accountability.

Facebook and its subsidiary, Instagram, were subjected to hostile congressional hearings last year, after a whistleblower revealed internal documents that showed the companies understood that their products could be harmful to some users but took little action to address the issue.

During the hearings, high-profile lawmakers, including Democratic Senator Elizabeth Warren, called for Facebook to be broken up into multiple, smaller companies.

 
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Mali has failed to meet debt payments of some $40 million in treasury bonds, blaming sanctions imposed on the country’s military junta by West African bloc ECOWAS.

The Malian Economy and Finance Ministry released a statement on Tuesday saying that recently imposed sanctions have prevented them from paying debt on treasury bonds totaling almost $5 million.

UMOA-Titres, the agency that manages public securities in the West African CFA franc zone, issued three separate statements to investors this week stating that Mali has missed several payments totaling $40 million.

Both the Economic Community of West African States and the West African Economic and Monetary Union imposed sanctions on Mali last month after the country’s military junta, which seized power last year, postponed elections.

The sanctions froze Mali’s assets held by the Senegal-based Central Bank of West African States (BCEAO).

Modibo Mao Makalou is an economist and former economic advisor to the Malian presidency. Speaking from Bamako via messaging app, he said that because of the sanctions, not only will the Malian government be unable to pay the state’s debt, but it will also be unable to pay for internal operations.

“If the state does not manage to refinance itself, not only with regard to the expenses for staff, but also energy, communication expenses, expenses for missions, including military operations — this will prevent the state from functioning on a daily basis,” he said.

The Central Bank of West African States serves the eight countries in West Africa that share a common currency, the West African CFA franc.

Kobi Annan, a risk consultant based in Accra with Songhai Advisory, an economic and risk consultancy firm focused on sub-Saharan Africa, says that Mali has some reserves that will carry the country through the next few months.

He says making Mali default on the debt is exactly how the West African sanctions are designed to work, to put pressure on the transitional authorities.

“This would be fully expected; this is part of why it’s done that way, to make things more difficult for Mali,” said Annan. “If you default on debt or if you don’t pay back debt, then you are deemed a higher risk, meaning that borrowing when you are able to becomes more expensive.”

Annan and Makalou both assert that eventually, as the Malian government becomes less able to access or borrow money and as its reserves dwindle, social services are likely to be affected, bringing the effects of the financial sanctions against the state into the lives of ordinary Malians.

Mali’s transitional military government has widespread support from the Malian population. Since being sanctioned, the government has not proposed a new election timeline, but has expressed a willingness to continue dialogue with ECOWAS.

The ministry’s statement added that debts would be paid as soon as restrictions are lifted.
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The most recent COVID-19 cases in China have put even more stress on an already strained supply chain, causing delays in the shipping of everyday items to the United States. VOA’s Elizabeth Lee shows what one business is doing to alleviate the problem.
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New claims for jobless benefits fell in the United States last week, the Labor Department reported Thursday, as many employers hung on to the workers they have and searched for more.

The agency said 238,000 unemployed workers filed for compensation, down 23,000 from the revised figure of the week before. The new total was in line with the claim figures from recent weeks as the U.S. economy, the world’s largest, continues to recover from the havoc inflicted on it by the advance of the coronavirus pandemic that swept into the country nearly two years ago.

Analysts now are awaiting the government’s release Friday of January’s employment picture in the U.S., the number of new jobs created last month and the unemployment rate, which was 3.9% in December.

The U.S. economy added a modest 199,000 new jobs in December, and analysts say January’s figure may not be much different, perhaps even smaller, as the number of new omicron variant coronavirus cases surged early in January and then waned, after the employment data was collected at mid-month.

Many employers are looking for more workers, despite about 6.9 million workers remaining unemployed in the U.S.  

At the end of November, there were 10.4 million job openings in the U.S., but the skills of available workers often do not match what employers want, or the job openings are not where the unemployed live. In addition, many of the available jobs are low-wage service positions that the jobless are shunning. 

But overall, the U.S. economy is surging, advancing by 5.7% in 2021, the fastest full-year gain since 1984, the Commerce Department reported last week. 

The sharp growth in the world’s biggest economy showed its resiliency, even as the U.S. struggled to cope last year with two new coronavirus variants that hobbled some industries, caused supply chain issues for consumer goods that at times left store shelves empty, and led to a 7% year-over-year surge in consumer prices that was the highest in four decades.

But for the year, a record 6.4 million jobs were created, and most of the jobs lost at the outset of the pandemic in early 2020 have been recovered.

Some economic analysts say that even if the January jobs number is weak, it may be a temporary setback because the number of new coronavirus cases has been dropping sharply in the U.S. to under 400,000 new cases a day, about half of what it was just weeks ago.

The country’s robust economy pushed Federal Reserve policymakers last week to announce they could boost their benchmark interest rate as early as March after keeping it near 0% since the coronavirus first swept into the United States in March 2020. 

The Fed could increase the rate several more times this year, which could have a broad effect on borrowing costs for consumers and businesses.
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The Treasury Department this week reported that the total national debt of the United States surpassed $30 trillion for the first time in history, an amount equal to nearly 130% of America’s yearly economic output, known as gross domestic product. The eye-popping figure makes the U.S. one of the most heavily indebted nations in the world. 

The federal debt has been high and rising for decades, but the federal government’s response to the coronavirus pandemic, which involved massive infusions of cash into the U.S. economy, greatly accelerated its growth.  

At the end of 2019, prior to the pandemic, the national debt stood at $22.7 trillion. One year later, it had risen by an additional $5 trillion, to $27.7 trillion. Since then, the nation has added more than $2 trillion in further debt. 

A grim reminder 

While the $30 trillion figure, by itself, has no significant meaning, it may serve to focus attention on what some see as a major concern for the future health of the country. 

“Hitting the $30 trillion mark is a reminder of just how high our debt is and just how much we’ve been borrowing,” said Marc Goldwein, senior vice president and senior policy director for the Committee for a Responsible Federal Budget.  

“Debt held by the public, which is the measure we prefer to use, is about as large as the economy,” Goldwein told VOA. “In a decade, it’ll be larger than any time since World War II. Meanwhile, we have the highest inflation rate we’ve had in 40 years, and there doesn’t seem to be any sign that the borrowing is going to let up.” 

Different debtors 

The $30 trillion in outstanding debt is owed to a wide variety of creditors, including the federal government itself. 

According to the Treasury Department, as of January 31, $6.5 trillion of the national debt was classified as “intragovernmental holdings.” This includes Treasury securities held by various agencies of the federal government, most prominently the Social Security Administration, which maintains a trust fund to provide income to senior citizens. 

The far larger portion of the debt is classified as debt held by the public, which amounts to $23.5 trillion. The term “public” can be somewhat misleading because the category includes not just the debt instruments held by individual investors but also the debts held by the Federal Reserve, large investment funds and foreign governments. 

According to the Treasury Department, foreign governments hold about $7.7 trillion in U.S. debt, though no country holds more than 5% of the total. As of the end of November, the most recent data available, Japan was the largest foreign holder of U.S. debt, with $1.3 trillion. China was the second-largest holder of U.S. debt, with $1.1 trillion, while the United Kingdom was in distant third place, with $622 billion. 

The cost of debt 

The cost of servicing the country’s outstanding debt has become a major part of the federal budget as the outstanding debt has grown. In 2021, the government made $562 billion in interest payments on outstanding debt. That is more than the annual budget of every individual federal agency except for the Treasury, the Department of Health and Human Services (which manages the Medicare and Medicaid government health insurance programs), and the Department of Defense. 

Surprisingly, during the early part of the pandemic, the federal government’s interest payments fell even as the debt increased, because of a broad decline in interest rates. 

However, with the Federal Reserve poised to begin raising interest rates in an attempt to ward off rising inflation, the rate the Treasury has to pay on newly issued debt will likely rise, meaning that the overall cost of servicing the federal debt will likely go up in the relatively near future. 

Comparison with other countries 

The United States’ ratio of debt to GDP, the measure most commonly used to gauge a country’s level of indebtedness, places it among the most indebted countries in the world. 

According to data gathered by the World Bank in October, the country with the world’s highest debt-to-GDP ratio is Japan, which carries debt equivalent to 257% of its economic output. Other developed economies with very high debt-to-GDP ratios include Greece, at 207%, and Italy, at 155%. 

With a ratio of 133%, the U.S. is the 12th most indebted country overall, and the fourth most indebted among the developed economies that make up the Organization for Economic Co-operation and Development. The OECD average is an 80% debt-to-GDP ratio. 

Both parties added to debt 

The national debt is the cumulative total of annual federal deficits. The U.S. has seen federal surpluses in just four of the past 50 years, from 1998 to 2001, encompassing the last three years of the administration of Bill Clinton, a Democrat, and the first year of the administration of George W. Bush, a Republican.  

In recent decades, both Democrats and Republicans have contributed to the rising levels of federal borrowing, with the debt increasing on a regular basis, regardless of which party controlled Congress and the White House. 

It’s a fact that causes some members of Congress to express frustration with their colleagues over a seeming lack of concern about the problem. 

“$30 trillion in debt is an obscene number, but what’s even more depressing is the fact that most politicians in both parties don’t really care,” Senator Ben Sasse, a Nebraska Republican, said in a statement. “Someone is going to have to pay that money when these politicians are long gone, and — spoiler alert — it won’t be paid by them but instead by our kids.” 

 
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India’s government has pledged to spend billions of dollars on public infrastructure to reboot an economy that is bouncing back from the massive contraction it suffered during the novel coronavirus pandemic. But concerns remain about an uneven pace of growth that has seen big businesses flourish but its vast unorganized sector struggle.

Asia’s third largest economy is projected to grow at 8% to 8.5% this year, according to government figures.

The strong economic recovery began last year despite a deadly second wave of COVID with growth estimated at 9.2% in the financial year that will end in March. 

“The economy has shown strong resilience to come out of the effects of the pandemic with high growth,” Finance Minister Nirmala Sitharaman said as she presented the country’s annual budget Tuesday. “However, we need to sustain that level to make up for the setback of 2020-21.”

The budget increases spending to $533 billion in the coming year from $477 billion. 

She announced that the government would spend $2.7 billion to build highways and $6.4 billion on housing for the poor. It will also expand rail networks, ports and airports, manufacture energy efficient trains and extend credit guarantees to small businesses.

Sitharaman said climate action is a priority and promised to focus on electric mobility and solar power in a bid to reduce the country’s carbon emissions.

“I am conscious of the need to nurture growth through public investment to become stronger and more sustainable,” Sitharaman said.

Economists have welcomed the government’s decision to step up spending. “The decision to increase public investment to 2.9% of gross domestic product, is rock solid and good news and should attract private investment into infrastructure,” says Santosh Mehrotra, a human development economist and author of the book “Reviving Jobs: An Agenda for Growth.”  

According to the finance minister, the new investments would help create six million jobs over the next five years. 

Mehrotra however points out that this fails to address the scale of the challenge India faces. “The unemployment crisis we face is huge. Five to six million people join the labor force every year. That is on top of the unemployed we already have. That number was 30 million in the year 2019 and it has only grown post the pandemic by another 10 million,” says Mehrotra. “And we also have millions who want to come out of agriculture into non-farming jobs.”  

The unemployment challenge was underlined last week by violent protests by job seekers that erupted in Bihar and Uttar Pradesh. 

Several economists point out that while India’s economy has rebounded, growth has not percolated down as its vast informal sector, which provides most livelihoods, continues to reel under the impact of long shutdowns imposed when infections spiraled during the last two years. Tens of thousands of small enterprises have shut down. That has widened income inequalities with an estimated 80% of households losing incomes during the pandemic.

But there is optimism as a third wave of the pandemic driven by the omicron variant begins to recede. India’s vaccination program has made significant progress since July last year — 75% of adults are fully inoculated. That is creating confidence in opening most sectors of the economy.

“The economy is in a good place to grow strongly into the next year or two,” the finance ministry’s principal economic advisor, Sanjeev Sanyal, said while presenting the country’s economic survey on Monday.

India’s economic growth two years into the pandemic is seen as the fastest among major economies in the world. The revival comes after its economy shrank in 2020 by 6.6% — the sharpest dip in 40 years that came after a long and stringent shutdown.

India also said the country’s central bank will introduce a “digital rupee” this year using blockchain technology, becoming one of the first major countries to do so and said it will levy a 30% tax on income from virtual digital assets.
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South Africa’s luxury housing dealers say the market is booming despite the economic damage from the coronavirus pandemic. Real estate agents say the need to work from home and have better security are some of the drivers, while affordable housing for the poor remains a challenge. Linda Givetash reports from Johannesburg.
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At the W Kuala Lumpur hotel, high tea sets are prepared for delivery to customers celebrating the upcoming Chinese New Year. Inside are meats such as rolled smoked duck as well as tiger prawn sliders and fresh baked treats including red date cheesecake and chocolate tarts. A five-star hotel known for upscale dining in now also relies on home delivery.

“Delivery was something new and we hadn’t considered it really prior to the pandemic,” said Christian Metzner, general manager of the W Kuala Lumpur, adding that although home delivery currently makes up about 15% of his hotel’s food and beverage sales, it was 100% during periods when dining in was not allowed in Malaysia. “We started working with apps and different [delivery] companies,” he said.

Like hotels around the world, the pandemic led to a deep drop in business for the W Kuala Lumpur. Foreigners no longer flew in for vacations or business trips. So the hotel, part of the Marriott chain, pivoted and increased its marketing towards potential customers who live in Malaysia.

The hotel shut down twice during the past two years, for about three months each time. Its last closure ended in August 2021. Management says while business is still down 25% from pre-pandemic levels, during the past several months the hotel has been operating well above the break-even point, drawing customers to guest rooms and the pool for staycations as well as offering food on popular local delivery platforms. 

“Just to stay in the game we had to actually connect and open our channels, open our minds to other channels to sell our products and sell our experience,” Metzner said, adding that the hotel chain’s health and safety protocols — continuously disinfecting public areas, mobile phone check-ins and other measures — also help.

Prior to the pandemic, tourism accounted for more than 15% of Malaysia’s GDP. Because so much of that business disappeared, Yap Lip Seng, chief executive officer of the Malaysian Association of Hotels, the W Kuala Lumpur’s successful shift to the domestic market a rare achievement.

“You need to set yourself apart from the pack,” Yap said, adding that the majority of the country’s hotels are still not able to turn a profit. “First, your competition is with the stand-alone restaurants outside and second, you have to compete with the same grade of hotels within that area.”

Northern Malaysia boasts the popular vacation destination of Langkawi, an archipelago known for its beaches and sea activities. For 21 years, Oli Khalid and his wife Tanja Bindemann have been running a cafe here called the Red Tomato, which has long been a gathering spot for foreign tourists who come for the fresh baked bread, big salads and warm hospitality.

“They come as strangers, travelers, and they leave as friends. That’s our motto,” said Khalid.

But Khalid and Bindemann haven’t been able to make as many new friends over the past two years. Khalid said there were times when business was down 90%.Although there has been an uptick in Malaysian customers recently, business is still half of what it was compared to pre-pandemic levels.

In November, the Malaysian government started a tourist bubble to try to draw vaccinated foreigners to Langkawi. But Khalid and other managers of local businesses said it hasn’t yet yielded a significant increase in customers.

Khalid said he has seen other local businesses close down and says if the situation doesn’t improve, his cafe might go bust in another six months. “We do have sleepless nights thinking, ‘What are we supposed to do?’” Khalid says. “What’s going to happen and what if the situation doesn’t improve, what do we do?”

The Malaysian government is considering additional steps to allow more foreign tourists inside the country. That’s an idea that small mom-and-pop shops such as Khalid’s — as well as major international hotel chains like Metzner’s — say would boost their bottom lines.
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Iran’s Supreme Leader Ali Khamenei said Sunday that the country’s poor economic situation was not only due to international sanctions but also to government mismanagement.

“Wrong decisions and shortcomings” were part of the reason for the Islamic republic’s “unsatisfactory” economic data, he said about the decade from March 2011 to last year.

Indicators such as “GDP growth, capital formation, inflation, housing and liquidity growth were not satisfactory,” Khamenei said.

“The main cause of these problems is not only sanctions, but also wrong decisions and shortcomings,” he told a meeting with economic officials.

“If the authorities had cooperated more with the producers in these 10 years, the damage would have been less, and the successes would have been greater,” he added in an implicit attack on former president Hassan Rouhani’s governments from 2013 to 2021.

Iran, which last year elected President Ebrahim Raisi, has been hit by severe economic sanctions imposed in 2018 by the United States, and has seen its inflation rate surge to close to 60 percent.

Khamenei criticized the high prices and low quality of some home-made products, especially cars.

He also charged that “despite the government’s support,” the price of some domestically-produced home appliances had doubled.

Iran has witnessed a number of protest rallies in the past few weeks by civil servants, including from the judiciary, against tough economic conditions.

Regarding companies operating despite the sanctions, Khamenei said that “we have successful examples and businesses that did not wait for the lifting of sanctions.”

Iran has been negotiating in Vienna — directly with Britain, China, France, Germany and Russia, and indirectly with the United States — to revive its tattered 2015 nuclear deal.

The landmark agreement offered Tehran sanctions relief in exchange for curbs on its nuclear program.

But the U.S. unilaterally withdrew from it in 2018 under then-president Donald Trump and reimposed biting economic sanctions on Iran.
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Violent protests by job seekers that gripped two Indian states this week have turned the spotlight on India’s unemployment crisis, especially among young and educated people, economists say.

Angry mobs burned train cars and tires, and blocked rail traffic in Bihar and Uttar Pradesh, two of India’s most populous states, over alleged flaws in the recruitment process for jobs in the government-run rail sector.

They complained of lack of transparency and said that the process unfairly gives an advantage to graduates applying for low-skilled jobs.

There were more than 12 million applicants for the 35,000 openings, reflecting the acute job scarcity. Even before the pandemic battered the economy, unemployment was running at a four-decade high, reflecting the inability of the job market to cater to the more than 10 million new applicants every year.

The situation has worsened in the last two years even though the economy is recovering. It is most stark in states such as Bihar, where the unemployment rate is double the national average. One of India’s least developed states, it has very few avenues for private sector employment, which is why government jobs that are better paid and offer security are highly prized.

Among the applicants for a rail sector job is Guddu Kumar Singh, a 32-year-old resident of Bihar, who has spent nearly 15 years applying unsuccessfully for a variety of government jobs. After failing to make the cut for a clerk in the Indian army after graduating from high school, he focused on improving his educational qualifications and earned a degree in economics — he and his brother were the first generation in his farming family to get college degrees. Like millions of others, the family saw education as the path to a brighter future.

“I was a sincere student – I spent 13, 14 hours a day studying to get my degree. I was so positive. I never thought I would not get a job,” Singh said. “I am totally dejected. My family also asks me, what did I achieve by studying?”

According to the Center for Monitoring Indian Economy, an independent think tank, India’s unemployment rate was nearly 8% in December. It says, however, that this number does not reflect the true scale of unemployment in India because millions of educated people have stopped looking for jobs.

They are people like Singh — if he does not get a railway job he could simply drop out of the job market, returning to what he has been doing while he searched for a job – tutoring school students.

“Unemployment is higher among younger and more educated people because appropriate jobs are not available,” economist Arun Kumar, a former professor with New Delhi’s Jawaharlal Nehru University, said.

“The organized sector barely generates about 300,000 jobs a year, so where do the other aspirants go? There is a crisis of unemployment.”

The huge gap between supply and demand has resulted in qualified people taking jobs of much lower skills.

Earlier this month, graduates, post-graduates, engineers, and civil judge aspirants were among the more than 10,000 young people who turned up for interviews for 15 government jobs such as drivers and watchmen in the central state of Madhya Pradesh, according to a report by local broadcaster NDTV.

Economists say that part of the problem is that, unlike several other Asian countries, India never created a large-scale manufacturing sector — its growth is being powered by its booming services sector, which creates fewer jobs.

The government says job creation is a priority – in recent years, it has been trying to pitch India as an attractive investment destination to woo global manufacturers. Those efforts have intensified since the pandemic as India eyes the opportunity of luring companies that are looking to move some manufacturing out of China.

“India is committed to becoming a trustworthy partner for the world’s global supply chains,” Indian Prime Minister Narendra Modi told a virtual meeting of the World Economic Forum earlier this month. “We are making way for free trade agreements with many countries. India’s capacity to adopt to innovative technologies and its spirit of entrepreneurship can give new energy to all our global partners. This is why now is the best time to invest in India.”

Economists like Kumar, though, point out that even if India is able to attract companies to set up factories, modern manufacturing generates far fewer jobs than it did in the past because of automation.

“India must invest more resources in more employment-intensive sectors like health and education that provide jobs for more qualified people like teachers, nurses, technicians,” he said. “The frustration among the young and educated is boiling over.”

Indian commentators have called the recent protests a wake-up call in a country where half the population of 1.3 billion is under 25. The Indian Express newspaper said they were a “sobering message.”

The government has suspended the examination for rail jobs and said a committee has been formed to investigate candidates’ concerns.

For those like Singh, who sees it as his last chance to secure employment, the uncertainty is unbearable.

“I feel really anguished when I think of the years I spent getting a college degree. If I had spent the same time doing something else, I would have had better earnings.” 

 
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A key inflation indicator was up 5.8% over last year, the Commerce Department said Friday. It was the indicator’s highest jump since 1982.

The rise came in the government’s personal consumption expenditures index (PCE), which the Federal Reserve uses to guide interest rate moves. The PCE tracks actual consumer spending.

Another indicator, the consumer price index (CPI), jumped 7% last year, the government reported earlier this month. The CPI tracks the price of a basket of various goods.

The increased prices of goods could be behind a 0.6% drop in consumer spending in December, the department said. Consumer spending accounts for two-thirds of U.S. economic activity.

Inflation has also largely erased wage gains seen in many U.S households.

The pandemic, labor shortages and supply chain problems continue to drag on the economy.

The growing inflation adds pressure on the Federal Reserve to hike interest rates, which comes with the danger of slowing economic growth.

“No one wants to go back to the ’80s, but the economy is. Can stagflation from an overly aggressive Fed be next?” Christopher Rupkey, chief economist at FWDBONDS in New York, said in an interview with Reuters. “The Fed let its guard down and now they risk it all by saying they might have to move faster and higher on interest rates.”

The Fed could move as early as March to raise interest rates.​

Some information for this report came from Reuters and The Associated Press.
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With President Joe Biden’s broader domestic agenda stymied in the Senate, Democratic leaders in Congress have begun looking for legislative victories elsewhere, with a new focus on improving the U.S. ability to compete with China.

Democrats in the House of Representatives are attempting to come to agreement on legislation that would provide large financial subsidies to the semiconductor industry as well as generous research and development grants to support supply chain resilience, buoy domestic manufacturing operations and underwrite new scientific research.

The effort in the House follows a push in the Senate last year, which resulted in bipartisan passage of the United States Innovation and Competition Act of 2021. That bill proposed $52 billion in assistance to the semiconductor industry as well as nearly $200 billion more on research and development projects meant to bolster U.S. competitiveness.

The House is likely to pass its own version of the legislation, meaning the two chambers would have to come to an agreement on final language before a bill could go to the White House to be signed into law. It remains unclear whether an eventual House bill would garner any Republican support in that chamber, or whether compromise language would continue to attract the Republican support that helped the Senate’s original bill come to the floor for a vote.

But in a statement this week, the president made it clear that he would like to see the legislation on his desk.

Biden praised the “transformational investments” that the legislation would make. With the proposed legislation, he said, “We have an opportunity to show China and the rest of the world that the 21st century will be the American century – forged by the ingenuity and hard work of our innovators, workers, and businesses.”

Countering Chinese subsidies

In Congress, even among conservative lawmakers who generally shy away from government intervention in the economy, there is recognition of a need to balance the scales for U.S. companies that frequently find themselves in competition with Chinese firms that receive subsidies and other preferences from the government in Beijing.

When the Senate passed its version of the bill in June, Florida Republican Sen. Marco Rubio said, “This type of targeted investment in a critical industry was unthinkable just a couple years ago, but the need for smart industrial policy is now widely accepted.”

That comes as a surprise to many observers of U.S. policymaking.

“There is somewhat of an ambivalence, or confusion, in D.C. where, on the one hand, people want to say that China’s industrial policies are both very unfair, and also very important in explaining China’s competitive success,” Gerard DiPippo, a senior fellow in the Economics Program at the Center for Strategic and International Studies, told VOA. “But then, they also seem reluctant to actually engage in those policies because they think those policies are actually very distortionary and ineffective. So, it sort of cuts both ways.”

Semiconductors in focus

Despite strong economic growth in the U.S. over the past year, a persistent shortage of semiconductors has caused some sectors of the economy – the automobile industry in particular – to lag behind. Supply chain disruptions caused by the coronavirus pandemic have been difficult to resolve, leading many members of Congress to propose funding to “re-shore” domestic production of semiconductors.

Both the Senate bill and the version being considered by the House of Representatives would funnel $52 billion in grants and subsidies to the industry.

However, China is not a major competitor of the United States when it comes to semiconductors. While China does make some semiconductors, the largest manufacturer in the world is TSMC, Taiwan Semiconductor Manufacturing Corp. in Taiwan.

‘Decoupling’ seen as troubling

Some American companies that do business with China are concerned about the long-term efforts of both countries to achieve economic independence from each other.

“China is upset with efforts to increase export restrictions on U.S. goods, block Chinese companies from accessing certain U.S. goods, and restrict some direct investments in China,” Doug Barry, a senior director with the U.S.-China Business Council, told VOA in an email exchange.

“They worry about incentives to relocate production of some critical goods back to the U.S. At the same time, China is working to reduce dependence on certain goods like advanced semiconductors, while slow-walking promised market access reform and opening,” Barry said.

“Our members worry that these efforts signal mutual economic decoupling that’s not in the long-term interest of either country,” he said. “Both governments need to engage in direct talks to better manage differences, adhere to WTO principles, and ensure that Phase One Agreement commitments are fully met.”

Government interference ‘misguided’

Ryan Young, a senior fellow with the Competitive Enterprise Institute, told VOA that efforts by Congress to mimic China by trying to manipulate the U.S. economy are “misguided” at best, and at worst destructive.

“This falls into what I think of as the ‘But they do it, too,’ argument,” Young said. While it is indisputable that the Chinese government creates all sorts of advantages for certain sectors within its economy, he said, it doesn’t follow that the answer is for the U.S. to do the same.

Despite government support, large Chinese tech firms are burdened with substantial debt, operational inefficiencies and political meddling, he said.

Further, Young noted that the semiconductor industry, which the legislative efforts target above all else, has already taken steps to bring some of its production into U.S. territory, with chip giant Intel expanding a $50 billion complex of chip manufacturing facilities in Arizona. 

 
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