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On The Money: Incomes, consumer spending soared in March | Harris, senators work behind scenes on jobs package | Biden cancels some border wall construction

On The Money: Incomes, consumer spending soared in March | Harris, senators work behind scenes on jobs package | Biden cancels some border wall construction

Happy Friday and welcome back to On The Money, where we believe everyone should have someone who loves them as much as Joe Biden loves trains. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.

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THE BIG DEAL—Incomes, consumer spending soared in March as stimulus boosted economy: Consumer spending and personal income rose sharply in March, according to data released Friday by the Commerce Department, driven in part by President BidenJoe BidenSanders: Reinstating SALT deduction 'sends a terrible, terrible message' GOP braces for wild week with momentous vote Shining a light on COINTELPRO's dangerous legacy MORE’s $1.9 trillion economic relief bill.

  • Personal income rose a staggering 21.1 percent in March after falling 7 percent in February, thanks in part to a third round of direct payments and other forms of aid authorized by Biden’s American Rescue Plan. 
  • Personal consumption expenditures, which drive roughly 70 percent of U.S. economic growth, rose 4.2 percent in March after falling 1 percent in February.

How it happened: The sharp rebound in consumer spending and incomes came as Biden signed another massive round of fiscal stimulus and economic aid on March 11, though not all of that money was disbursed before the end of the month. The U.S. also added a whopping 916,000 jobs in March, indicating that at least some recovery in spending and incomes was likely even without the relief bill.

I break it down here.

But what about inflation? Inflation rose 1.8 percent year over year in March as measured by the personal consumption expenditures (PCE) price index minus food and energy, which is the Federal Reserve’s preferred gauge of inflation.

  • While the index jumped 0.4 percentage points on an annual basis in March, it remains 0.2 percentage points below the Fed’s annual target of 2 percent.
  • Economists across the board largely agree that inflation will continue to rise throughout the summer as the collapse in demand from 2020 reverses, but many believe it will even out as the economy returns to a normal pace. 

In case you missed it: Powell voices confidence in Fed's handle on inflation (from Wednesday)

 

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LEADING THE DAY

Harris, senators work behind scenes on jobs package: Vice President Harris, Senate Majority Leader Charles SchumerChuck SchumerSanders: Reinstating SALT deduction 'sends a terrible, terrible message' Biden to meet with GOP senators amid infrastructure push The Hill's Morning Report - Presented by Emergent BioSolutions - Upbeat jobs data, relaxed COVID-19 restrictions offer rosier US picture MORE (D-N.Y.) and other top Democrats are working behind the scenes to put together a massive infrastructure and jobs package that is increasingly likely to pass without any GOP votes.

  • Democratic senators are jockeying to get their priorities added to the proposal — a sharp contrast to the small group of moderate Republicans and Democrats who are trying to craft a slimmed-down compromise measure.
  • Harris is soliciting ideas from Democratic lawmakers about what should be included in a broader infrastructure package that is expected to be based on Biden’s $1.8 trillion American Families Plan.

“The vice president is apparently calling all the Democratic members for their ideas, so there apparently is a bill in formation,” said Senate Majority Whip Dick DurbinDick DurbinDOJ faces big decision on home confinement America's Jewish communities are under attack — Here are 3 things Congress can do Schumer 'exploring' passing immigration unilaterally if talks unravel MORE (D-Ill.).

The Hill’s Alexander Bolton tells us more here.

Who wants what? There’s a long line of Democrats who have thoughts on what should be included.

 

Biden cancels military-funded border wall projects: President Biden is canceling projects to build a wall along the southern border using diverted defense funds and will use some funding to counter environmental damage from the wall's construction.

“Today, the Department of Defense will begin cancelling all wall projects using the diverted funds, and will take steps to return remaining unobligated military construction funds to their appropriated purpose as permitted by law,” an administration official said.

The Hill’s Niv Elis tells us how it works here.

 

ON TAP NEXT WEEK

Tuesday:

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  • A House Financial Services subcommittee holds a hearing on housing sustainability and climate change at 12 p.m.

Wednesday:

  • The Peterson Institute for International Economics hosts a webinar on digital trade negotiations at 10 a.m.

Thursday:

  • The House Financial Services Committee holds its third hearing on the GameStop stock trading frenzy at 12 p.m.
  • A House Small Business Subcommittee holds a hearing on job creation through infrastructure at 12 p.m.

Friday:

  • The House Financial Services Committee’s task force on artificial intelligence holds a hearing on racial discrimination and algorithms used in the housing and financial services industries at 12 p.m.

 

GOOD TO KNOW

 

ODDS AND ENDS