The Week in Business: Prices Are Rising on Cars, Groceries and Even Burritos
It’s not your imagination — prices on consumer goods have risen quickly. But is that really a cause for concern?
Good morning and happy Sunday. Here’s what you need to know in business and tech news for the week ahead. — Charlotte Cowles
What’s Up? (June 6-12)
It’s Not Your Imagination
Perhaps you’ve noticed that clothes, cars, groceries and even Chipotle burritos seem more expensive these days? It’s true — consumer prices grew by 5 percent in May from a year earlier. That’s a bigger jump than economists expected, and it followed another sharp rise in April (4.2 percent), spurring larger concerns about inflation. Some investors and politicians worry that prices will keep climbing, potentially compelling the Federal Reserve to raise interest rates and slow economic growth. Others believe that this is just a temporary bump and that prices will stabilize as the economy catches up after a year of pandemic-induced stagnation. (If you compare this year’s prices with those from 2019, May’s growth rate is only 2.5 percent — a much less scary number.)
Yes, It’s Required
As employers start to bring workers back to offices, many are trying to figure out vaccination policies for their staff. And according to new guidance from the U.S. Equal Employment Opportunity Commission, companies are within their rights to demand that their employees get vaccinated against the coronavirus. They can also require employees to provide documentation or other confirmation of vaccination. What if an employee won’t get vaccinated because of a disability or religious beliefs? That worker may be entitled to special accommodations, as long as it does not pose an “undue hardship” on the business.
The Justice Department snatched back most of the ransom that Colonial Pipeline paid in Bitcoin last month to a Russian hacking group that shut down its systems and caused turmoil in the fuel industry. That’s good news for Colonial Pipeline, but bad news for Bitcoin, which was widely viewed by investors and consumers (and criminals) as untraceable and operating beyond government reach. It remains to be seen whether the government will be able to help JBS, the world’s largest meat processor, recover any of the $11 million ransom that it paid hackers in Bitcoin.
What’s Next? (June 13-19)
Look Out, China
The Senate overwhelmingly passed a bill on Tuesday that would funnel nearly a quarter-trillion dollars over the next five years into scientific research and technological development to strengthen U.S. competitiveness against China. (For comparison, the Chinese government has been doing the same thing to boost its own industrial and technological growth for years.) Now the legislation is headed to the House, where it faces tougher critics but still enjoys bipartisan support. It also has backing from President Biden. If it becomes law, it could be the most significant government intervention in industrial policy in decades.
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A Tense Meeting
Mr. Biden will sit down with President Vladimir Putin of Russia in Switzerland this week and is planning to confront him about harboring the perpetrators of the rash of recent cyberattacks on businesses operating in the United States. (Mr. Putin is known for taking a hands-off stance on hackers — even encouraging them — as long as they promote Russian interests and leave Russian businesses alone.) Leading up to the summit, Mr. Biden will urge European Union leaders, NATO allies and the Group of 7 wealthy nations to back a strong, unified stance on Russia.
From G7 to the G20
The United States succeeded in getting the Group of 7 nations to agree to a global minimum tax rate of 15 percent that companies would have to pay no matter where their headquarters are. It’s a step toward cracking down on companies that dodge taxes by basing their headquarters in tax havens like the Cayman Islands. It would also potentially force technology giants like Amazon, Facebook and Google to pay taxes to countries based on where their goods or services are sold, regardless of whether they have a physical footprint there. But the next step — persuading the Group of 20 nations, which includes China and Russia, to get on board when their finance ministers meet next month — will be a much tougher proposition.
A report showed that the richest Americans — including Jeff Bezos, Elon Musk and Warren Buffett — paid minuscule amounts in taxes compared with the size of their fortunes, bringing fresh attention to reforming U.S. tax codes. Mr. Biden revoked a Trump-era attempt to ban the Chinese-owned apps TikTok and WeChat, replacing it with an executive order to review apps controlled by foreign adversaries to see whether they pose security threats. And the Keystone XL pipeline project, which would have carried petroleum from Canada to Nebraska but has been on ice since Mr. Biden took office, has officially been canceled.