The US economy grew by an annual rate of 6.4% in the first quarter, following a slowdown of 4.3% in the last three months of 2020. Consumers, who account for close to 70% of the economy, increased their spending by 10.7%, using some of the stimulus cheques for $1,400 sent to all households by the government. However, not all the money was spent as the savings rate increased to 21% from 13% in Q4.
The Fed upgraded its outlook of the US economy but said it was not yet ready to scale back its pandemic support.
Joe Biden laid out his American Families Plan in a speech to congress. This ambitious attempt to expand social programmes across the country includes proposals for universal childcare for three- and four-year-olds, a family-leave initiative and tuition-free community college. The $1.8 trillion price tag will be paid in part by increasing the top rate of income tax to 39.6%.
Last week big tech which we’re leaders in last year’s stock market returns posted positive earnings. Apple, had a bumper first quarter, as revenues soared to $89.6 billion and net profit increased to $23.6 billion, more than Amazon’s profit for the whole of last year. That said, Amazon also started the year well with record first quarter profits of $8.1 billion on the back of $108 billion in sales.
In one of the firmest commitments to getting workers back into the office, JPMorgan Chase told staff that it wants them to return to their place of employment by early July, albeit on a rotational basis to comply with a 50% cap on office occupancy. The bank recognised that for some people, returning to the office “is a change you’ll need to manage”.
China’s competition regulator launched an investigation into Meituan, a shopping platform for food and lifestyle services. It is the latest antitrust action taken against a technology giant in China, coming soon after Alibaba was fined $2.8 billion for abusing its market power.
The family of Lee Kun-hee, the late chairman on Samsung, are to pay almost $11 billion in taxes on his estate, one of the world’s largest ever inheritance tax bills.