US ECONOMY & POLITICS

U.S. Imports Slowed in April, Shrinking Trade Deficit From Record – Wall Street Journal, 6/7/2022

• The U.S. trade deficit narrowed in April as imports fell sharply, reflecting a moderating appetite for foreign goods and materials from American consumers and businesses.
• The trade gap in goods and services fell to 19.1% in April from the prior month to a seasonally adjusted $87.1 billion, the Commerce Department said Tuesday, retreating from March’s record $107.7 billion deficit.
• Imports fell 3.4% to $339.7 billion, the first month-on-month decline since July last year, driven by a drop in clothing, household goods, toys, pharmaceutical products and finished metal.
• Exports continued their upward trend in recent months, rising 3.5% to $252.6 billion.

Senators to Propose Industry-Friendly Cryptocurrency Bill – Wall Street Journal, 6/7/2022

• A pair of U.S. senators were set to propose legislation that would create special exemptions to federal law for some cryptocurrencies, amid an intensifying lobbying push by the industry to avoid existing regulations.
• Sens. Cynthia Lummis (R., Wyo.) and Kirsten Gillibrand (D., N.Y.) were set to introduce a bill Tuesday dubbed the Responsible Financial Innovation Act, which aims to create a “complete regulatory framework for digital assets.”
• In a joint press release, they said it would balance the crypto market’s need for guardrails and consumer protections with a desire to promote financial innovation.
• Congressional aides said the bill has little chance of advancing this year through the Senate, which is controlled by Democrats. Similar legislation introduced by crypto-friendly lawmakers in the House has languished.
• Among other objectives, the bill seeks to carve some cryptocurrencies out of the Securities and Exchange Commission’s jurisdiction. It also would create new concepts in the nearly 90-year-old securities laws that would allow issuers of some digital tokens to meet lighter disclosure requirements than public companies face.
• SEC Chair Gary Gensler has said most cryptocurrencies meet the definition of a security and should register with the agency.

Biden Decision on Student-Loan Forgiveness Unlikely Until Later in Summer, Officials Say – Wall Street Journal, 6/7/2022

• President Biden is likely to decide later this summer whether to partially forgive student-loan debt for millions of borrowers, according to administration officials and others familiar with the matter, after the president said more than a month ago that he would weigh in on the issue in the next couple of weeks.
• The officials said Mr. Biden is likely to announce his plans in July or August, closer to when the pandemic-related pause in federal student loan payments is scheduled to lapse, as the president and his senior advisers continue to weigh the political and economic fallout of any such move.
• Mr. Biden has long been skeptical of using his executive authority to wipe away student loan debt. Officials said he remains concerned about the possible effects the move could have on record inflation, cautious about doing anything that could be perceived as contributing to high prices.
• Some people close to Mr. Biden said he had nonetheless warmed to the idea in recent months as advocates inside and outside the administration made impassioned pleas for him to take action.
• The president’s advisers were hesitant to predict where Mr. Biden might land. But people familiar with the internal discussions said the most likely outcome appeared to be debt forgiveness in the range of $10,000 per borrower.
• Individuals making less than about $125,000 a year would be eligible for the program, though that figure is in flux, the people said.

Seven States Have Primary Elections Today, With California the One to Watch – Wall Street Journal, 6/7/2022

• Seven states hold primaries on Tuesday, with a focus largely on setting House races for November after redistricting scrambled political boundaries.
• Chief among them is California, which will settle its lineup for House races in nonpartisan primaries that will help decide the fate of several districts that have become battlegrounds since the Democrats’ blue wave in 2018 and remain untested under a new map.
• Of particular concern to national Republicans is the Orange County race featuring incumbent Rep. Young Kim, who has spent more than $1 million attacking Greg Raths, a fellow Republican running to her right.
• Ms. Kim was presumed to be a shoo-in for the November runoff in a district redrawn to be even more conservative than her previous one, which she won by a one-point margin in 2020. But recent polling by at least one of the campaigns showed her in danger of coming in third on Tuesday.
• Elsewhere, voters in New Jersey, Mississippi, Iowa, Montana, South Dakota and New Mexico will also pick candidates for November.

EUROPE & WORLD

U.K.’s Boris Johnson Survives No-Confidence Vote Over Lockdown Parties – Wall Street Journal, 6/7/2022

• U.K. Prime Minister Boris Johnson survived a leadership challenge Monday, narrowly subduing a rebellion within his Conservative party that leaves him in power but politically wounded.
• In a no-confidence vote Monday night—triggered in large part by concern over Mr. Johnson’s attendance at parties during Covid-19 lockdowns—Conservative lawmakers backed him by a vote of 211-148. Under Conservative Party rules Mr. Johnson now can’t be challenged for another year.
• Mr. Johnson won the vote aided by the fact that there is no obvious replacement in the Tory ranks.
• Many lawmakers were also nervous about switching leaders as British households wrestle with rocketing inflation and economists predict a recession.

German industrial orders fall more than expected in April – Reuters, 6/7/2022

• German industrial orders fell more than expected in April, the third decline in a row, driven by weakened demand and heightened uncertainty due to the Russian invasion of Ukraine, data showed on Tuesday.
• Orders for industrial goods dropped by 2.7% on the month in seasonally adjusted terms after a upwardly revised decline of 4.2% in March, figures from the Federal Statistical Office showed.
• A Reuters poll of analysts had pointed to an increase of 0.3% on the month in April.

UK businesses feel the strain from surging inflation, survey says – Reuters, 6/7/2022

• Growth among British businesses slowed sharply in May to its weakest since early 2021 when the country was under a COVID-19 lockdown, according to a survey, although the loss of momentum was less severe than initially reported.
• The composite S&P Global/CIPS Purchasing Managers Index – spanning services and manufacturing firms – slumped to 53.1 from 58.2 in April, the lowest since February 2021, as Britain’s economy felt the hit from accelerating inflation.
• The PMI for the dominant services sector fell to 53.4 from 58.9 in April to show its biggest month-on-month fall since the survey began in 1996, although the final reading was up from the flash reading which also stood at 51.8.

UK shoppers cut spending by most since COVID lockdown in 2021 – Reuters, 6/7/2022

• British shoppers facing a surge in inflation cut their spending in May by the most since the country was in a coronavirus lockdown in early 2021, according to a survey published on Tuesday.
• The British Retail Consortium (BRC) said total retail spending was 1.1% lower than a year earlier, the biggest fall since January last year and representing an acceleration from April’s 0.3% decline.
• The BRC said its ‘like-for-like’ retail sales measure, covering only outlets open in May 2021, showed a 1.5% annual fall in spending after a 1.7% contraction in April.
• Data from Barclaycard, covering a broader range of spending, showed spending in May was up 9.3% from a year earlier, reflecting the rising cost of living and a bounce for travel and hospitality which were affected by restrictions last year.
• Spending on essential items rose by 4.8%, pushed up by a nearly 25% leap for petrol and diesel which have soared in price. In response, consumers cut back on spending on digital content and subscriptions by nearly 6%.

Sony Aims for High-End Electric Car That Bills Extra for Entertainment – Wall Street Journal, 6/7/2022

• The first Sony car will likely be a high-end model featuring entertainment such as movies and videogames for which owners will pay extra, the company’s chief executive said.
• Sony Group’s Kenichiro Yoshida spoke in an interview after a visit to partner Honda Motor’s  factory in Marysville, Ohio.
• Sony and Honda said in March they would form a joint venture to sell an electric vehicle starting in 2025.
• Mr. Yoshida said the car market would increasingly shift to a service model where customers pay regularly for software downloads and entertainment. He pointed to Tesla Inc., which charges $10 a month for better connectivity in its vehicles and at least $99 a month for a service it calls full self-driving.
• He drew an analogy with Sony’s PlayStation business, which in addition to selling the $500 PlayStation 5 hardware has a subscription product called PlayStation Plus with multiplayer services and games to download. As of the first quarter of this year, PlayStation Plus had 47.4 million subscribers.
• PlayStation hardware costs more than competitors and is pitched especially at hard-core gamers—a philosophy that Mr. Yoshida would extend to the Sony car. “I want to build in all kinds of functions, so this is going to be a relatively high-priced car,” he said.

Factmonster – TODAY in HISTORY

• Spain and Portugal signed the Treaty of Tordesillas, which divided the New World between the two countries. (1494)
• Louis XIV was crowned king of France. (1654)
• Richard Henry Lee of Virginia introduced a resolution in the Continental Congress proposing a Declaration of Independence. (1776)
• Homer Plessy was arrested for his refusal to move from a whites-only seat on a train. This led to the Plessy v. Ferguson Supreme Court decision. (1892)
• Vatican City became a sovereign state. (1929)