US ECONOMY & POLITICS

U.S. pending home sales decline in July – Reuters, 8/30/2021

• Contracts to purchase previously owned U.S. homes declined for the second consecutive month in July in step with limited supply that’s been unable to keep up with demand from potential homebuyers.
• The National Association of Realtors (NAR) said on Monday its Pending Home Sales Index, based on contracts signed last month, fell 1.8% after dropping a revised 2.0% in June.
• Economists polled by Reuters had forecast pending home sales would increase 0.4%.
• Pending home contracts are seen as a forward-looking indicator of the health of the housing market because they become sales one to two months later.

Fed Faces New Challenge Spelling Out Employment Goals – Wall Street Journal, 8/30/2021

• Federal Reserve officials are talking more about how to define a fuzzy concept—maximum employment—that will heavily influence their thinking around how much longer to keep interest rates near zero.
• Assessing maximum employment, often described as the unemployment rate consistent with stable inflation, will be a delicate task for the Fed because officials concluded, in retrospect, that they overestimated it during the previous expansion and possibly raised interest rates too soon.
• Their deliberations figure to be more difficult now because of how the Covid-19 pandemic has upended normal economic activity—for example, by making it harder to determine how many people who left the labor force last year will return.

Hurricane Ida Leaves More Than 1 Million Without Power in Louisiana – Wall Street Journal, 8/30/2021

• Louisianians began to assess the damage from Hurricane Ida Monday morning as power remained out for more than 1 million customers and officials urged residents to stay indoors for their own safety.
• The powerful storm, which made landfall in southeastern Louisiana Sunday on the 16th anniversary of Hurricane Katrina as a Category 4 hurricane, was downgraded to a tropical storm by Monday with sustained winds of about 45 miles an hour as it continued to move north.
• All of New Orleans lost power Sunday night, and more than 1 million residents statewide remained without power Monday morning, according to data from poweroutage.us.
• The Ascension Parish Sheriff’s Office confirmed the first death from the storm Sunday after deputies responded Sunday night to reports of a person injured from a fallen tree and arrived to find the victim deceased.

U.S. Targets Suspected Suicide Bombers With Drone Strike in Kabul – Wall Street Journal, 8/30/2021

• The U.S. said it launched a drone strike targeting suspected suicide bombers near the Kabul airport Sunday as America’s 20-year war in Afghanistan wound down to its final hours.
• The drone took aim at a vehicle carrying suspected suicide bombers, the Pentagon said. The U.S. believed it successfully struck the vehicle, but couldn’t say how many bombers were hit.
• A senior Afghan health official, who also worked with the U.S.-backed government, said the Sunday strike killed five civilians and hit a house.

Afghan Militants Fire Rockets at Kabul Airport as U.S. Nears Withdrawal – Wall Street Journal, 8/30/2021

• Afghan militants fired rockets at Kabul’s airport as the U.S. rushed to complete its evacuation mission in Afghanistan before Tuesday’s deadline to leave the country, with U.S. counter-rocket defenses deployed to intercept them.
• President Biden, briefed on the rocket attack, “has reconfirmed his order that commanders redouble their efforts to prioritize doing whatever is necessary to protect our forces on the ground,” the White House said. Flight operations at the U.S.-controlled airport continued uninterrupted, it added.
• The U.S. military is expected to perform its last evacuations of civilians from the country on Monday, its last full day in Afghanistan, before remaining service members leave on Tuesday and hand full control of the airport to the Taliban.

EUROPE & WORLD

German inflation hits fresh 13-year high in August- Reuters, 8/30/2021

• Germany’s annual consumer price inflation accelerated to a fresh 13-year high in August, data showed on Monday, underlining growing price pressures as Europe’s largest economy recovers from the pandemic and companies struggle with supply shortages.
• Consumer prices, harmonised to make them comparable with inflation data from other European Union countries (HICP), rose 3.4% compared with 3.1% in July, preliminary figures from the Federal Statistics Office showed.
• The national inflation rate (CPI) even soared to 3.9% in August, hitting its highest since December 1993 when the economy boomed following German reunification.
• In Spain, EU-harmonised consumer prices rose 3.3% year-on-year in August from 2.9% in July, separate data from the National Statistics Institute (INE) showed.

Euro zone Aug economic sentiment eases but selling price expectations at record high – Reuters, 8/30/2021

• Euro zone economic sentiment has eased more than expected in August from a record high in July, hit by a sharp drop in optimism in France and the Netherlands, while selling price expectations in industry peaked, signalling inflationary pressure.
• The European Commission’s economic sentiment index, released on Monday, eased to 117.5 in August from an all-time high of 119.0 in July.
• Optimism deteriorated in all major sectors — in industry to 13.7 from 14.5, in services to 16.8 from 18.9 and among consumers to -5.3 from -4.4.
• Still, selling price expectations in industry, heralding likely future inflationary pressures, hit a record in August.
• Also among consumers, inflation expectations rose to 31.1 in August from 30.0 in July, though they were still well below the all-time high of 38.7 from 2001.
• Overall, France recorded the sharpest drop in economic sentiment of 4.5 points, followed by the Netherlands. Italy and Spain were also weaker. Sentiment in the biggest euro zone economy, Germany, eased only slightly by 0.3 points.

Covid-19 Surge in Malaysia Threatens to Prolong Global Chip Shortage – Wall Street Journal, 8/30/2021

• A surge of Covid-19 cases in Malaysia, a little-known but critical link in the semiconductor supply chain, has opened a new front in the battle to fix manufacturing woes that have rippled across industries during a global shortage of computing chips.
• Disruptions in Malaysia threaten to prolong uncertainty over chip supply well into next year, dashing hopes of relief in the second half of 2021.
• The supply crunch in Malaysia, caused primarily by staff shortages linked to virus-control measures combined with a sharp surge in global demand, poses a new problem for the auto industry.
• About 7% of the global supply of semiconductors goes through the country at some point, according to the U.S.-based Semiconductor Industry Association. The U.S. imports more chips directly from Malaysia than from any other country in the world, the group said.

China Limits Videogames to Three Hours a Week for Young People – Wall Street Journal, 8/30/2021

• China has a new rule for the country’s hundreds of millions of young gamers: No videogames during the school week, and one hour a day on Fridays, weekends and public holidays.
• China on Monday issued strict new measures aimed at curbing what authorities describe as youth videogame addiction, which they blame for a host of societal ills, including distracting young people from school and family responsibilities.
• The new regulation, announced by the National Press and Publication Administration, will ban minors from playing videogames entirely between Monday and Thursday.
• On the other three days of the week, and on public holidays, they will be only permitted to play between 8 p.m. and 9 p.m.

China Curbs Steel Output, but Familiar Economic Pressures Test Its Mettle – Wall Street Journal, 8/30/2021

• A two-month fall in China’s steel output, ordered by economic officials, handed Beijing a global showcase for advancing climate goals and controlling commodity markets. A brewing economic slowdown is testing the government’s will to sustain the cuts.
• China’s production of crude steel, half the world’s annual total, fell in July by the widest year-on-year margin since the 2008 global financial crisis. Early indicators suggest it might slip again this month.
• Culled by state inspections and other official curbs at mills nationwide, the usually prodigious flow that is often the subject of global trade and environmental tensions has fallen by 12.5 million metric tons—about twice Britain’s annual total—in July from May’s record high.
• The steel cuts have driven global iron-ore prices down 40% since mid-July, delivering China twin triumphs: a show of policy leadership ahead of a major climate summit in Glasgow in November, and a demonstration that it can tamp down rising global commodity prices.

Factmonster – TODAY in HISTORY

• The Second Battle of Bull Run took place during the Civil War. (1862)
• The two-year siege of Leningrad during World War II began. (1941)
• A hot line between the Kremlin and the White House went into operation to reduce the chances of an accidental war. (1963)
• Cleopatra VII, Queen of Egypt, committed suicide. (1967)