The United States' economy continued to struggle in 2010 as policymakers attempted to navigate the difficult transition from recession to recovery. A high, stubborn, stagnant unemployment rate serves as the backdrop to a year in which further stimulus measures were considered, the financial industry faced reform, and politicians prepared to compromise on the Bush tax cuts.
Ben Bernanke gets reconfirmed as chairman of the Federal Reserve by a vote of 70-30 in the Senate, the closest-ever margin for a nominee.
Source: Getty Images
One-year anniversary of the American Recovery and Reinvestment Act, better known as the Stimulus.
Obama signs the HIRE Act, a $17.5 billion jobs bill, which includes tax cuts, business credits, and subsidies for state and local construction bonds, in addition to putting $20 billion into the highway trust fund for spending on highway and transit programs.
SEC accuses Goldman Sachs of securities fraud, alleging that the bank created and sold a mortgage investment that was secretly intended to fail.
Following the expiration of the federal homebuyer tax credit at the end of April, weekly applications for new mortgages hit their lowest point since 1997, according to the Mortgage Bankers Association. In July, sales of new homes in the US drops to a record low.
Source: Calculated Risk
Goldman Sachs reaches settlement with SEC, agreeing to pay $550 million but admitting no wrongdoing.
Massachusetts Sen. Scott Brown announces that he will vote for the Dodd-Frank financial reform act, all but guaranteeing the legislation will pass the Senate and be signed into law. Brown's announcement comes after legislators agreed to remove a $19 billion bank tax, which would have been levied only against institutions with more than $50 billion in assets.
President Obama signs the Dodd-Frank Wall Street Reform and Consumer Protection Act, streamlining regulatory institutions and processes, ending taxpayer-funded bailouts of financial institutions, and bringing other changes.
Larry Summers announces that he will step down as leader of President Obama’s National Economic Council at year’s end.
Summers, right, with Treasury Secretary Tim Geithner. Source: Wikimedia Commons
Bank of America announces it will halt foreclosures in 23 states (and eventually all 50) until the company completes a review to determine if there were flaws in its foreclosure process.
Bureau of Labor Statistics releases September jobs report, the last monthly report in which the 2010 census will have a major impact on job creation, as temporary hires have been nearly all let go. The report lists the unemployment rate at 9.6 percent, just slightly higher than in June and July, when the rate hit its lowest point of the year and the lowest point since the previous summer.
Source: Bureau of Labor Statistics
Dow closes above 11,000, the highest it’s been since May 3rd.
Due to projected budget shortfalls and cost overages, New Jersey Governor Chris Christie announces final decision to kill the proposed ARC Tunnel project, which would build a tunnel underneath the Hudson River connecting Manhattan and New Jersey.
Fed announces another round of Quantitative Easing (QE2), which is a plan to buy $600 billion in Treasury securities in a bid to further reduce long-term borrowing costs and keep prices from falling.
GM pulls off biggest Initial Public Offering (IPO) in U.S. history after being bought out by the government in the summer of 2009.
Numbers released showing that U.S. companies' profits rose in the third quarter to the highest on record, an annual rate of $1.66 trillion. Yet unemployment remains stubbornly at 9.6 percent, reflecting a discrepancy between profits and jobs.
Erskine-Bowles deficit reduction plan fails to get enough votes to be sent to Congress. The plan, put forth in November by a bipartisan commission, calls for severe cuts in domestic and military spending, a gradual increase of the Social Security age to 68, an increase of the federal gasoline tax, and other measures meant to increase revenue and diminish expenses.
The unemployment rate rises to 9.8 percent, up from 9.6 percent the previous three months.
Obama reaches compromise with Republicans on extending the Bush tax cuts. Cuts would be extended for two years for all tax brackets, even for income above $250,000, in exchange for federal unemployment benefits being extended for another 13 monthsand a two percent reduction in social security taxes for workers next year. The estate tax is also reinstituted with a maximum rate of 35 percent, and a five million dollar exemption per person.
The Labor Department says first-time claims for unemployment benefits have fallen three times in the last month, to 420,000, boosting hopes of an economic recovery. Dow Jones and S&P close at their highest levels of the year.
During a late-night session, the House of Representatives passes the $858 billion tax cut compromise, which was approved by the Senate earlier in the week. The vote on the bill was 277 - 148, with a majority of both Democrats and Republicans in favor. President Obama signs the bill into law.
Want to know what else happened in 2010?