US ECONOMY & POLITICS

U.S. manufacturing sector growth slowing-ISM – Reuters, 8/2/2021

• U.S. manufacturing continued to grow in July, though the pace slowed for the second straight month as spending rotates back to services from goods and shortages of raw materials persist.
• The Institute for Supply Management (ISM) said on Monday its index of national factory activity fell to 59.5 last month, the lowest reading since January, from 60.6 in June.
• The ISM survey’s forward-looking new orders sub-index fell to a reading of 64.9 last month from 66.0 in June. That was the second straight monthly decline.
• There was some encouraging news on inflation. The ISM survey’s measure of prices paid by manufacturers fell to a reading of 85.7 last month from a record 92.1 in June.

U.S. labor revival in doubt as Delta raises worries about ‘back to school’ – Reuters, 8/2/2021

• Expectations for a quickening U.S. economic recovery hinge in large part on more workers in jobs once in-person schooling resumes this fall.
• But the Delta variant could scupper those expectations if parents, especially women, remain or are forced back on to the sidelines.
• Roughly 7 million fewer people are employed in the United States today than before the pandemic, Labor Department surveys of businesses and households show, despite record job openings.

Senators Push to Wrap Up Bipartisan Infrastructure Bill This Week – Wall Street Journal, 8/2/2021

• Senators wrapped up the construction of a roughly $1 trillion infrastructure bill, racing to pass it through the chamber by the end of the week and send it to the House, where its fate is intertwined with a $3.5 trillion package of Democratic priorities.
• Senate Majority Leader Chuck Schumer (D., N.Y.) kept the Senate open through the weekend in a bid to begin considerations of the bipartisan infrastructure package, $550 billion of which is in addition to expected future federal investments in roads, bridges, broadband, and other infrastructure projects.
• The text of the bill will translate into law the agreement lawmakers struck days ago, which provides $110 billion to bridges and roads, $39 billion to public transit, and $65 billion for expanding access to broadband, among other investments beyond currently projected spending.
• Repurposed federal funds, money recouped from delaying a Trump-era Medicare rebate rule, and a mix of accounting maneuvers will cover the cost of legislation.
• Seventeen Republicans joined all 50 Democrats on the first procedural vote for the package last week, putting it on track to garner more than enough GOP support to clear the Senate’s 60-vote threshold. A lengthy amendment process this week has the potential to chip away—or add—support for the bill.

Nuclear Power Could Get Lifeline in Senate Infrastructure Bill – Bloomberg, 8/2/2021

• Struggling nuclear power reactors could be given a $6 billion lifeline in the bipartisan infrastructure bill being written in the U.S. Senate, according to a draft obtained by Bloomberg News.
• A program to evaluate nuclear reactors that are in jeopardy of closing and provide them with aid would be created within the Energy Department under terms of the $550 billion, bipartisan infrastructure package
• The move comes as the White House and as the nuclear power industry, which provides about 19% of the nation’s electricity, has been beset by a wave of reactor closings as it struggles to compete with cheaper electricity produced using natural gas, and, increasingly, renewables.

Ohio Race Highlights Rift Between Sanders, Clyburn Wings of Democratic Party – Wall Street Journal, 8/2/2021

• A House special election primary in Cleveland on Tuesday is shaping up as a proxy war over the direction of the Democratic Party, with the top two candidates drawing millions in donations as prominent figures including Sen. Bernie Sanders and Rep. James Clyburn line up on opposing sides.
• Nina Turner, a top surrogate for Mr. Sanders (I., Vt.) during his presidential campaigns, has long been the front-runner in the race, which includes 13 candidates. The former state senator, 53 years old, who backs liberal plans including Medicare for All and the Green New Deal, has raised $5.6 million since announcing her candidacy, according to her campaign.
• Her top rival, Cuyahoga County Councilwoman Shontel Brown, 46, has proved tough competition.
• She has raised $2.4 million, according to her campaign, and drawn the support of not only Mr. Clyburn, the powerful House Democratic whip from South Carolina, but also former Secretary of State Hillary Clinton, who defeated Mr. Sanders in the 2016 presidential primary.
• Tuesday’s primary will determine the Democratic nominee for the special election Nov. 2 to fill the seat vacated by Marcia Fudge, who left Congress earlier this year to run the Department of Housing and Urban Development.

EUROPE & WORLD

Resilient factories battling with delays, rising costs – Reuters, 8/2/2021

• Factories across the world are suffering from supply bottlenecks which sent prices skyrocketing in July, while a new wave of coronavirus infections in Asia demonstrated the fragile nature of the global recovery.
• Euro zone and British manufacturing continued to expand at a blistering pace in July as the reopening of economies led to soaring demand, as it did in export powerhouses Japan and South Korea. However, growth in Chinese factory activity slippedsharply.
• IHS Markit’s final manufacturing Purchasing Managers’ Index (PMI) for the euro zone dipped from June’s record high but was still firmly in growth territory.
• In China, however, demand contracted for the first time in over a year, a private survey showed. This broadly aligned with an official survey released on Saturday showing a slowdown in activity.
• Indonesia, Vietnam and Malaysia saw factory activity shrink in July due to a resurgence in infections and stricter COVID-19 restrictions, according to private surveys.
• The final au Jibun Bank Japan PMI rose to 53.0 in July from 52.4 in the previous month, though manufacturers saw input prices rise at the fastest pace since 2008.
• South Korea’s PMI held above breakeven for the 10th straight month. But a sub-index on input prices rose at the second highest on record.

UK inflation to hit 3.9% in early 2022, NIESR forecasts – Reuters, 8/2/2021

• British consumer price inflation will reach 3.9% early next year, almost double the Bank of England’s target, but should fall back to 2% the year after if the BoE begins to raise interest rates, a leading think tank forecast on Monday.
• The National Institute of Economic and Social Research (NIESR) also revised up its growth forecast for 2021 by 1.1 percentage points to 6.8% – broadly in with the most recent forecasts from the BoE and the International Monetary Fund.
• A sharp rise in oil prices and bottlenecks in supply chains have pushed up inflation in Britain and most other Western economies, with NIESR’s forecast suggesting British inflation is on course to hit its highest since late 2011.
• Unemployment was likely to rise by 150,000 to 5.4% of the workforce after the government’s furlough programme stopped at the end of September, NIESR said.
• The BoE’s last full set of forecasts in May predicted inflation would peak at 2.5% at the end of this year, but in June it revised this higher to see a peak of more than 3%.

Death Toll From China Flood Jumps to More Than 300 – Wall Street Journal, 8/2/2021

• Chinese authorities said 302 people had died during severe flooding that hit the central province of Henan last month, a sharp increase in the death toll that comes as rescue workers extract more bodies from the provincial capital Zhengzhou and the surrounding countryside.
• The death count makes the disaster one of the deadliest in China in recent years, with 50 people still missing, Henan provincial authorities said at a briefing Monday.
• The death toll marked a threefold jump from the official figure of 99 deaths released Thursday last week.
• According to Henan’s provincial government, 189 people were killed in the city of Zhengzhou alone due to flooding and mudslides, while another 54 residents died when houses collapsed due to the torrential rain.

Factmonster – TODAY in HISTORY

• The first U.S. census was completed, showing a population of 3,929,214 people. (1790)
• The first Lincoln penny was issued. (1909)
• Warren G. Harding, the 29th president of the United States, died in San Francisco. (1923)
• The Potsdam Conference, in which Allied leaders planned the postwar governance of Germany, ended. (1945)
• The Persian Gulf War broke out when Iraq invaded Kuwait. (1990)