US Business

Global chip shortage likely to last through 2023: US official

The global shortage of critical semiconductors is likely to last at least through next year and perhaps longer, US Commerce Secretary Gina Raimondo warned on Tuesday.

Shutdowns of key Asian suppliers due to the Covid-19 pandemic crippled supplies last year, just when American consumers, flush with cash from government aid, went on a spending spree buying cars and electronics, which depend on the chips.

“I do not unfortunately see the chip shortage abating in any meaningful way anytime in the next year,” Raimondo told reporters following her recent trip to Asia.

She said she convened a dozen CEOs, including leaders of chipmakers, during her time in South Korea to discuss the shortage “and they all agreed that … deep into 2023, possibly early ’24 before we see any real relief.”

She repeated her call for Congress to act to provide funding for legislation that aims to stimulate domestic manufacturing of the computer chips that are key to a wide array of products, from smartphones to medical equipment to vacuum cleaners.

“We are really on borrowed time,” she said.

“Every other country has subsidies on the table now, and if Congress doesn’t act very quickly,” key producers like Samsung, Intel and Micron “are going to build in another country and that be that would be hugely problematic.”

The US Senate and the House of Representatives each have approved $52 billion bills — the CHIPS Act and the America COMPETES Act — that would invest in domestic chip research and manufacturing, but so far have failed to agree on the final form of the legislation.

Biden asks New Zealand's Ardern for advice on extremist gun violence

President Joe Biden on Tuesday told New Zealand’s Prime Minister Jacinda Ardern that after the latest US mass shooting he wants her advice in tackling a rise in gun violence and extremist ideologies.

Meeting in the Oval Office with Ardern, Biden referred to the 2019 Christchurch slaying of 51 people in mass shootings targeting Muslims.

The bloodshed prompted New Zealand to ban military-style rifles. A gun buy-back was also instituted.

“We need your guidance,” Biden said, calling for a “global effort to counter violence and extremism online.”

“I want to work with you on that effort,” he said.

Biden, who visited the Texan town of Uvalde on Sunday to mourn the deaths of 19 children and two teachers slain by a gunman using an assault-style rifle, said there was an “awful lot of suffering” and that “much of it is preventable.”

Less than two weeks earlier, Biden had also visited the site in New York state of another mass shooting, this time targeting African Americans.

Biden, who is under pressure to show the government is responding to the ever-growing toll, told reporters he would “meet with the Congress on guns, I promise you.”

However, with Republicans almost uniformly opposed to new restrictions on gun ownership, it appears unlikely that Biden’s Democrats can make signficant change.

Ardern offered condolences over the Texas and New York murders, saying that “our experience in this regard is our own, but if there is anything we can share that would be of any value we are here to share it.”

Eurozone stocks sink as inflation accelerates to record high

Eurozone equity markets sank Tuesday on news that the region’s inflation rate hit another record high in May on fallout from Russia’s invasion of Ukraine.

Consumer prices in the eurozone rose by 8.1 percent, compared with 7.4 percent in April, official data showed, with energy surging the fastest.

Sentiment took another battering on fears of severe economic fallout from a deal agreed by the European Union late Monday for a partial embargo of Russian oil imports over its assault on Ukraine.

The embargo also sent oil prices soaring to two-month peaks, in turn fuelling more inflationary fears and pressuring central banks to tighten monetary policy and prevent consumer prices rocketing even higher.

The resurgent oil market, however, lifted the London stock market because it boosts profits and revenues for energy majors BP and Shell.

– Energy ‘may soar faster’ –

“Inflation in the eurozone increased even further,” said Jonas Keck, economist at UK-based research group the Centre for Economics and Business Research.

“As the EU reached an agreement on new sanctions targeting Russian oil supplies, energy prices may well soar even faster in the coming months.”

Markets have been rocked this year as the Ukraine conflict has fuelled massive price gains for energy and food, translating into soaring inflation that threatens to derail the post-pandemic economic recovery.

Red-hot eurozone inflation has intensified calls for interest rate hikes from the European Central Bank, which has already flagged plans to raise borrowing costs in July.

“Higher inflation rates will raise serious question marks about the ECB’s viewpoint on whether gradual rate increases will be enough to deal with such high price growth,” market analyst Fawad Razaqzada from City Index and FOREX.com said.

“Investors are starting to project a faster pace of tightening from the ECB, which could be another factor holding stocks back.”

Following a holiday weekend in the US, Wall Street stocks were also on the backfoot, as a survey showed that Americans’ feelings about the economy deteriorated in May but remained relatively strong even as high inflation bites.

– Brent oil tops $124 –

In reaction to the EU’s partial embargo, Brent oil briefly broke above $124 per barrel and WTI crude breached $119.

European chiefs said the latest sanctions would ban purchases of Russian oil delivered by sea, though there would be a temporary exemption for pipelines.

“The gradual phasing in of the deal along with the exemptions included prevented the price from rising much higher but ultimately it further tightens a market that’s already undersupplied,” said Craig Erlam at OANDA. 

While widely expected, the agreement adds further upside to crude just as China begins to ease Covid restrictions in Shanghai and Beijing, raising the likelihood of a jump in demand from the world’s number-two economy.

There was some much-needed cheer from data showing China’s manufacturing shrunk in May at a slower rate than expected.

The Purchasing Managers’ Index (PMI) — a key gauge of manufacturing activity — hit 49.6 last month, improving from 47.4 in April, which was the worst reading since early 2020.

However, it remained below the 50-point mark separating growth from contraction and showed the Chinese economy was still struggling.

– Key figures at around 1550 GMT –

Frankfurt – DAX: DOWN 1.3 percent at 14,388.35  points (close)

Paris – CAC 40: DOWN 1.4 percent at 6,468.80  points (close)

EURO STOXX 50: DOWN 1.4 percent at 3,789.21 points 

London – FTSE 100: UP 0.1 percent at 7,607.66  points (close)

Brent North Sea crude: UP 1.4 percent at $123.37 per barrel

West Texas Intermediate: UP 1.95 percent at $117.31

New York – Dow: DOWN 0.3 percent at 33,111.09 points 

Tokyo – Nikkei 225: DOWN 0.3 percent at 27,279.80 (close)

Hong Kong – Hang Seng Index: UP 1.4 percent at 21,415.20 (close)

Shanghai – Composite: UP 1.2 percent at 3,186.43 (close)

Euro/dollar: DOWN at $1.0733 from $1.0779 on Monday

Pound/dollar: DOWN at $1.2624 from $1.2652

Euro/pound: DOWN at 85.01  pence from 85.20 pence

Dollar/yen: UP at 128.51 yen from 127.59 yen

burs-rfj-kjm/spm

US girl survives rare attack by cougar

A nine year old American girl has survived a very rare attack from a cougar during a camping trip in the western United States, says her uncle, who is trying to raise money for her medical expenses.

The cat attacked the girl, Lily, on Saturday morning while she was camping with her family in Washington state, her uncle Alex Mantsevich wrote on GoFundMe.

His post features before and after shots of his niece, the latter a photo of her unconscious in a hospital bed with scrapes and bruises from the mauling clearly visible on her face.

“She was airlifted to the hospital with many different injuries to her upper body/Face,” Mantsevich wrote.

The child underwent hours of surgery and remains in intensive care, he added in his fund-raising post.

Since 1924, only 20 people have been attacked by cougars in the wilds of Washington state and two of them died, the state environmental protection agency says.

An official with the agency told a local TV station that a probe would be carried out to try to understand the circumstances of this particular attack.

The body of the cougar — which was killed by someone present on the scene — will be analyzed for possible diseases, the official said.

Also known as pumas or mountain lions, cougars can weigh from 75 to 250 pounds (35 to 115 kilos), according to bigcatrescue.org.

US trans swimmer says transitioning never for 'advantage'

Swimmer Lia Thomas, the first transgender athlete to win a top-tier US university title, insisted Tuesday that trans athletes don’t transition to gain an edge in sports and voiced ambitions to compete in the Olympics.

“It’s been a goal of mine to swim at Olympic trials for a very long time, and I would love to see that through,” Thomas said on the ABC program “Good Morning America.”

Thomas won the 500-yard freestyle at the US collegiate championships in March.

She competes for the University of Pennsylvania, and was on the men’s team for three years before switching to the women’s squad this season.

Controversy has shrouded Thomas throughout the year, with critics and some fellow swimmers saying she should not have been allowed to compete and has an unfair physiological advantage.

Others say she should be allowed to compete freely as a woman.

In the ABC interview she said, “Trans people don’t transition for athletics.”

“We transition to be happy and authentic and our true selves. Transitioning to get an advantage is not something that ever factors into our decisions,” said Thomas.

“Trans women are not a threat to women’s sports,” she added.

US Olympic swimming trials for the Summer Games of 2024 in Paris begin in June in Indianapolis, Indiana.

After a weightlifter in the Tokyo games last year became the first trans athlete to compete in the Olympics, transgender issues have roiled the world of sports.

In November the International Olympic Committee essentially left it up to each sport, saying there was no scientific consensus on the role of testosterone on performance in sports.

The controversy has political overtones, too, in the United States.

Several states run by conservatives have recently barred trans girls from competing in school sports.

Jury resumes deliberations in Depp vs Heard trial

The jury resumed deliberations on Tuesday in the bitter defamation trial between “Pirates of the Caribbean” star Johnny Depp and his ex-wife Amber Heard.

The seven-person jury met for about two hours on Friday after closing arguments and resumed their consideration of the high-profile case on Tuesday morning after a three-day holiday weekend.

The 58-year-old Depp flew to England over the Memorial Day weekend and made surprise appearances at concerts in Sheffield and London by Jeff Beck.

“Well… what a surprise we got last night when Johnny Depp joined @jeffbeckmusic on stage,” Sheffield City Hall tweeted.

Depp, a guitarist, has his own band, the Hollywood Vampires, with Alice Cooper and Joe Perry of Aerosmith.

Depp filed suit against Heard over an op-ed she wrote for The Washington Post in December 2018 in which she described herself as a “public figure representing domestic abuse.”

The Texas-born Heard, who had a starring role in “Aquaman,” did not name Depp in the piece, but he sued her for implying he was a domestic abuser and is seeking $50 million in damages.

The 36-year-old Heard countersued for $100 million, claiming that she suffered “rampant physical violence and abuse” at his hands.

Dozens of witnesses testified during the trial, including bodyguards, Hollywood executives, agents, entertainment industry experts, doctors, friends and relatives.

Depp and Heard each spent days on the witness stand during the televised trial, attended by hundreds of fans of the “Pirates” star and accompanied by a #JusticeForJohnnyDepp campaign on social media.

Video and audio recordings of heated, profanity-laced arguments between the couple were played for the jury, which was also shown photographs of injuries allegedly suffered by Heard during their volatile relationship.

Hours of testimony was devoted to a grisly finger injury that Depp suffered while filming an installment of “Pirates” in Australia in March 2015.

Depp claimed the tip of a finger was severed when Heard threw a vodka bottle at him. Heard said she did not know how the injury occurred.

Both agreed that Depp went on to scrawl messages on walls, lampshades and mirrors using the bloody digit.

– ‘Monster’ –

Heard said Depp would become a physically and sexually abusive “monster” during alcohol- and drug-fueled binges and resisted her repeated efforts to curb his drinking and drug use.

Depp testified that it was Heard who was frequently violent and said it has been “brutal” to listen to “outlandish” accusations of domestic abuse made against him.

“No human being is perfect, certainly not, none of us, but I have never in my life committed sexual battery, physical abuse,” he said.

Heard, who was married to Depp from 2015 to 2017, obtained a restraining order against him in May 2016, citing domestic violence.

Depp, a three-time Oscar nominee, filed a libel suit in London against the British tabloid The Sun for calling him a “wife-beater.” He lost that case in November 2020.

Both sides have claimed damage to their Hollywood careers.

Uvalde lays first school shooting victims to rest

The small, traumatized Texan town of Uvalde begins Tuesday to bury its dead from an elementary school shooting that killed 19 young children and left the tightly-knit community united in grief and anger.

Amerie Jo Garza and Maite Yuleana Rodriguez, both 10, are expected to be laid to rest, with further funerals scheduled over the coming weeks. 

As the community mourned, anger has seethed over the response of police, who came under intense criticism since the May 24 tragedy over why it took well over an hour to neutralize the gunman — the “wrong decision,” Texas Department of Public Safety director Steven McCraw has admitted. 

The great-grandfather of one of the young victims berated police near the memorial of white crosses surrounded by wreaths and bouquets of flowers.

“They could tell me ‘Oh, we made a mistake. We made the wrong decision’. But my great-granddaughter is not coming back to me,” said a distraught 78-year-old Ruben Mata Montemayor.

When US President Joe Biden visited the town, about an hour’s drive from the Mexico border, over the weekend, shouts of “do something!” rang out from the crowd.

The shooting — the latest in an epidemic of gun violence in the United States that came less than two weeks after 10 people died in the attack at a Buffalo grocery store by a young gunman targeting African Americans — has spurred desperate calls for gun reform.

“There’s no words to describe (it),” said Esther Rubio, who traveled from nearby San Antonio to attend the wake on Monday for Amerie Jo.

Her pictures decorated the funeral home where friends and family gathered, just across the street from Robb Elementary School, where a local 18-year-old gunned down 19 children and two teachers before he was killed by police.

– A dozen more mass shootings –

While mass shootings draw anguished attention and spur momentary demands for change, gun regulation faces deep resistance from most Republicans and some rural-state Democrats.

Biden on Monday vowed to “continue to push” for reform, saying, “I think things have gotten so bad that everybody is getting more rational about it.”

Some key lawmakers have also voiced cautious optimism and a bipartisan group of lawmakers worked through the weekend to pursue possible areas of compromise. 

They reportedly were focusing on laws to raise the age for gun purchases or to allow police to remove guns from people deemed at risk — but not on an outright ban on high-powered rifles like the weapon used in both Uvalde and Buffalo, New York.

With the country still reeling over the Uvalde massacre — the deadliest school attack since 20 children and six staff were killed in Newtown, Connecticut in 2012 — US media reported the country was hit by a dozen more mass shootings over the three-day Memorial Day weekend.

The United States generally counts mass shootings as involving four or more deaths.

At least 132 gun deaths and 329 injuries were recorded nationwide from Saturday to Monday evening, according to the Gun Violence Archive website.

Mourners in Uvalde — a mostly Latino town of 15,000 — have echoed calls for change.

“At the end of the day, if this child cannot even sip a glass of wine because he’s too young, then guess what? He’s too young to purchase a firearm,” said Pamela Ellis, who traveled from Houston to pay her respects.

US consumer confidence deteriorated in May: survey

Americans’ feelings about the economy deteriorated in May amid concerns about job prospects, but remained relatively strong even as high inflation bites, according to a survey released Tuesday.

Amid the fastest increase in US consumer prices in more than four decades, made worse by the war in Ukraine, consumer confidence dipped slightly after a modest increase in April, falling to 106.4 from 108.6, according to The Conference Board’s monthly survey.

Consumers flush with savings and government support money have been a key driver of the recovery of the world’s largest economy, spending freely on big-ticket purchases like homes, cars and appliances.

But supply chain snarls, made worse by Covid-19 lockdowns in China, meant demand has outstripped supply, and that dynamic has fueled inflation.

Feelings about the present situation dropped for the second month, falling more than three points to 149.6, caused by the deterioration in views on the labor market, with an increasing share of respondents saying jobs are “hard to get,” according to the report.

Expectations for six months ahead retreated slightly to 77.5 after gaining in the prior month.

Lynn Franco, the institution’s senior director of economic indicators, noted that the readings are still relatively high despite the declines.

“Overall, the Present Situation Index remains at strong levels, suggesting growth did not contract further in Q2,” Franco said in a statement, referring to the current April-June quarter. 

“That said, with the Expectations Index weakening further, consumers also do not foresee the economy picking up steam in the months ahead. They do expect labor market conditions to remain relatively strong, which should continue to support confidence in the short run.”

The Federal Reserve has launched an aggressive cycle of interest rate increases to tamp down inflation by cooling demand, which Franco said “pose continued downside risks to consumer spending this year.”

The survey also measures consumers’ spending plans in the next six months, and shows a slowdown in intentions to purchase high-dollar items like homes and cars.

“Vacation plans have also softened due to rising prices. Indeed, inflation remains top of mind for consumers,” Franco said.

Ian Shepherdson of Pantheon Economics noted that households still have a stockpile of cash and “So far, they have been willing to dip into these savings despite reporting that they feel less positive. It’s not called retail therapy for nothing, but we just don’t know how long it will continue.”

US consumer confidence deteriorated in May: survey

Americans’ feelings about the economy deteriorated in May amid concerns about job prospects, but remained relatively strong even as high inflation bites, according to a survey released Tuesday.

Amid the fastest increase in US consumer prices in more than four decades, made worse by the war in Ukraine, consumer confidence dipped slightly after a modest increase in April, falling to 106.4 from 108.6, according to The Conference Board’s monthly survey.

Consumers flush with savings and government support money have been a key driver of the recovery of the world’s largest economy, spending freely on big-ticket purchases like homes, cars and appliances.

But supply chain snarls, made worse by Covid-19 lockdowns in China, meant demand has outstripped supply, and that dynamic has fueled inflation.

Feelings about the present situation dropped for the second month, falling more than three points to 149.6, caused by the deterioration in views on the labor market, with an increasing share of respondents saying jobs are “hard to get,” according to the report.

Expectations for six months ahead retreated slightly to 77.5 after gaining in the prior month.

Lynn Franco, the institution’s senior director of economic indicators, noted that the readings are still relatively high despite the declines.

“Overall, the Present Situation Index remains at strong levels, suggesting growth did not contract further in Q2,” Franco said in a statement, referring to the current April-June quarter. 

“That said, with the Expectations Index weakening further, consumers also do not foresee the economy picking up steam in the months ahead. They do expect labor market conditions to remain relatively strong, which should continue to support confidence in the short run.”

The Federal Reserve has launched an aggressive cycle of interest rate increases to tamp down inflation by cooling demand, which Franco said “pose continued downside risks to consumer spending this year.”

The survey also measures consumers’ spending plans in the next six months, and shows a slowdown in intentions to purchase high-dollar items like homes and cars.

“Vacation plans have also softened due to rising prices. Indeed, inflation remains top of mind for consumers,” Franco said.

Ian Shepherdson of Pantheon Economics noted that households still have a stockpile of cash and “So far, they have been willing to dip into these savings despite reporting that they feel less positive. It’s not called retail therapy for nothing, but we just don’t know how long it will continue.”

Biden, Fed chair discuss US inflation at White House

President Joe Biden on Tuesday holds a rare White House meeting with the head of the Federal Reserve, Jerome Powell, to discuss soaring inflation and White House attempts to tame the politically damaging price surge ahead of midterm elections.

In their first such meeting this year, Biden and Powell will “discuss the state of the American and global economy,” the White House said, with an emphasis on inflation.

This is Biden’s “top economic priority,” the White House said, “as we transition from a historic economic recovery to stable, steady growth that works for working families.”

Inflation of more than eight percent is casting a heavy shadow on Biden’s claims to be steering the US economy back to health after the Covid-19-induced crash.

Employment is back near pre-pandemic levels and growth is strong, but savage price increases for essentials including food and fuel are driving growing public dissatisfaction.

The Fed has raised rates three quarters of a percentage point, kicking off what central bank officials say could be a series of hikes aimed at calming down the economy, although there are fears that the unintended result may be recession.

Federal Reserve Governor Christopher Waller said Monday that he backs several more half-point rate hikes — “until I see inflation coming down closer to our two percent target.”

Biden is scrambling to ease the pressure on American consumers ahead of November midterm elections in which his Democrats are forecast to lose control of Congress to the Republicans.

Biden’s own approval ratings are barely in the 40 percent range, reflecting his inability to sell voters on his upbeat message of US economic recovery.

As the election approaches, Biden has pivoted to more aggressively trying to explain the inflation phenomenon as a byproduct of forces beyond his control.

These include the Russian invasion of Ukraine, which triggered Western sanctions disrupting the huge Russian energy industry. President Vladimir Putin’s invading forces, meanwhile, have all but put a halt to Ukraine’s important wheat exports.

Biden calls the effect “Putin’s price hike.”

Writing in the Wall Street Journal on Monday, Biden underlined the independence of the Federal Reserve, but noted that the central bank has “a primary responsibility to control inflation.”

Biden recalled that his predecessor Donald Trump frequently launched political attacks on the Fed and that other presidents had also “sought to influence its decisions inappropriately during periods of elevated inflation.”

“I won’t do this,” he pledged.

In the op-ed, Biden said his longterm plan for economic health includes easing the pace of post-Covid recovery to more sustainable levels, boosting economic productivity and reducing the federal budget deficit.

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