Macro Update: Biden's Infrastructure Plan
Our last Macro Update discussed rising consumer sentiment, mobility trends and the slowing housing sector. This week’s Macro Update breaks down Biden’s new infrastructure plan. Subscribe now to never miss an update:
Biden’s Infrastructure Plan:
Source: White House, chart created by The Macro Mail
Last week Joe Biden announced a $2 trillion plan to transform America’s existing infrastructure and fuel jobs in new emerging sectors of the U.S. economy. The plan aims to accelerate the combat against climate change, boost wages, improve internet access, and cut commute times.
Transportation Infrastructure ($621 billion):
Investing $621 billion in roadways, railways and bridges with a particular emphasis on sustainability, including…
$174 billion on EVs, including a network of 500,000 EV chargers by 2030
$115 billion on fixing roads and bridges including 20,000 miles of highways and roads
Quality of Life at Home ($650 billion):
Investing $650 billion in American homes, school buildings, internet access and water supply, including…
$213 billion to build more than 2 million affordable homes
$100 billion to refurbish public schools
$100 billion to improve internet access nationwide
Caregivers for Elderly and Disabled ($400 billion):
Investing $400 billion into quality care for the elderly and disabled
Raising pay for care workers (currently ~$12/hour)
Research, Development and Manufacturing ($300 billion):
Investing $300 billion into manufacturing, with a particular focus on production of technology, including…
$180 billion on R&D focusing on clean energy
$50 billion on semiconductor manufacturing and research
To pay for this, Biden intends to raise the corporate tax rate from 21% to 28%, increase the minimum tax on MNCs to 21%, remove tax loopholes for intellectual property, and eliminate tax preferences for fossil fuel producers.
Employment:
Source: FRED, chart created by The Macro Mail
Nonfarm payrolls for March beat estimates, rising 916,000 versus forecasts of 650,000
This was the largest monthly creation of new jobs since August 2020
The U.S. economy added 1.6 million new jobs in the first quarter, with all industries adding jobs
In response to the jobs growth, President Biden told reporters: “it’s a reflection of two things going on here, a new economic strategy focused on building from the bottom to the middle up, and one that puts government on the side of working people.”
The jobs deficit still remains large and over four million Americans have been unemployed for over six months
Things We’re Reading:
“Will the US continue its employment rebound?” - Financial Times
“U.S. Stimulus Set to Turbocharge World Economy as Europe Lags” - Bloomberg
“Economic Japanification: Not What You Think” - Lyn Alden
“Gold Miners and Energy Alternatives” - The Lykeion
“What Biden's Infrastructure Plan Means for Spending” - Allison Reichel
“Want To See What Stocks I Own?” - GRIT Capital