Treasury Sends $12B in COVID-19 Relief to Ohio Governments

This report is a summary of third-party economic research and perspectives to foster communication with business and economic development stakeholders during the COVID-19 crisis.

Key Economic Insights

• Global: China’s population is projected to peak by 2025 as births drop. Euro-area output will be accelerating at an annualized pace of 13%.
• U.S.: The U.S. consumer price index rose 4.2% in April year over year. CDC announced new public health recommendations on masks.
• Ohio: Treasury sends $12B in COVID-19 relief to Ohio governments.

Global Insights

China’s population is projected to peak by 2025 amid declining birth rates following the onset of the pandemic.  Europe is poised to bounce back in a strong recovery following its continued recession.  Goldman Sachs economists project euro-area output will accelerate at an annualized pace of 13% by the third quarter. In comparison U.S. growth is projected to peak at 10.5% in the current quarter as the pace of vaccinations slows down.   South Korea plans to invest $450 billion to boost their chipmakers’ competitiveness amid a critical global shortage of semiconductors.

Pfizer vaccine partner BioNTech SE said it would set up a new Asia headquarters in Singapore to produce its Covid-19 vaccine and other medicines, as global demand for the lifesaving shots continues to grow. The new factory, which is supported by Singapore’s Economic Development Board, is expected to become operational in 2023.  Saudi Arabia recently announced the Ministry of Human Resources will require all public and private sector workers to receive a Covid-19 vaccination as a prerequisite to attend work.

U.S. Insights

The U.S. consumer price index (CPI) rose 4.2% in April year over year, which is the highest 12-month level increase since September 2008, while the core CPI increased 3% during the same period.  The Federal Reserve dismissed inflationary concerns as being a result of a transitory shock from last year. Federal Reserve officials have reiterated their position stating they will not raise interest rates or reduce monthly bond purchases until inflation averages around 2% over an extended period.  However, U.S. retail sales stalled in April following a sharp advance in the prior month. Additionally, the University of Michigan’s consumer sentiment index fell to a three-month low of 82.8 from 88.3 the prior month, data released Friday showed. CDC announced new public health recommendations on masks – fully vaccinated people no longer need to wear a face mask or stay six feet away from others in most settings.

The U.S. economy is still making a rebound from Covid-19, but a variety of supply chain constraints are posing issues to full recovery. Labor shortages and supply chain shortages, including semiconductors, lumber, and packaging materials, continue to hamper the economy from reaching its full potential.  A cyberattack that forced the closure of the Colonial Pipeline disrupted gasoline prices for millions of Americans. The 5,500-mile pipeline transports nearly 45% of the fuel consumed on the East Coast, and given the magnitude of the supply, gasoline prices have surged.  Corn prices have risen roughly 50% in 2021, and the price of a bushel costs nearly more than twice it did a year ago. Lumber prices have also increased more than four times than is typical, which has increased home prices and renovation budgets.  Amazon is hiring 76,000 more workers with an average pay of $17 an hour.

Census Bureau data shows that Americans left metropolitan areas for less-dense suburbs during the pandemic as the promise of remote work likely accelerated the shift from large cities. This shift is set against rising home prices in many areas of the county such as the Boise, Idaho metro area where home prices surged 32.8% in the first quarter.  There is evidence to show that the pandemic has encouraged some women to go ahead with pregnancy. According to a survey released last month by Modern Fertility, the fertility start-up, the pandemic provoked 15 per cent of those asked to speed up their baby plans.

IEA said renewable power capacity grew at its fastest pace this century in 2020. The addition to the world’s renewable electricity capacity last year was 45% more than in the prior year.  The U.S. Department of the Interior gave permission for the construction of its first significant offshore 800-megawatt (MW) wind project. The project will create nearly 3,600 new jobs and produce enough power for nearly 400,000 homes and businesses. Vineyard Wind will construct up to 84 turbines off the coast of Massachusetts and is in keeping with the Biden Administration’s goal of ensuring wind capacity reaches 30 gigawatts by 2030.

Ohio Employment & Economic Insights

The Treasury Department sends $12B in COVID-19 relief to Ohio governments. The Treasury Department on Monday said Ohio will receive nearly $5.4 billion in aid as part of Democratic President Joe Biden’s larger $1.9 trillion coronavirus relief package, with another nearly $6.6 billion going directly to counties, cities and townships. These payments will benefit 37 municipalities and all 88 counties.  Gov. DeWine announced that the state will remove health orders in three weeks, except those for nursing homes and assisted living facilities. Jumpstart, the Northeast Ohio public-private partnership for venture support released it’s annual report, showing a total economic impact of more than $1B for 2020.

Resources

• Ohio Department of Health’s COVID-19 Website: www.coronavirus.ohio.gov
• JobsOhio’s resource portal and information about Open, Secure Supply Chains in Ohio.