US ECONOMY & POLITICS

Biden, needing a boost, plans signing ceremony for infrastructure bill – Reuters, 11/15/2021

• In need of a political boost, President Joe Biden will sign a $1 trillion infrastructure bill on Monday at a ceremony expected to draw Democrats and some Republicans who were instrumental in getting the legislation passed.
• The measure is expected to create jobs across the country by dispersing billions of dollars to state and local governments to fix crumbling bridges and roads, and expanding broadband internet access to millions of Americans.
• The ceremony, scheduled to be held on the White House South Lawn to accommodate a big crowd, represents an increasingly rare case where members of both parties are willing to stand together and celebrate a bipartisan achievement.

Muni Bond Prices Rally After Infrastructure Bill Leaves Out Market – Wall Street Journal, 11/15/2021

• Municipal bond prices rallied over the past two weeks as investors abandoned hopes for a flurry of new bonds from Congress’s $1 trillion investment in U.S. infrastructure.
• The municipal market has largely been left out of the infrastructure package awaiting President Biden’s signature, as well as Democrats’ follow-up social-spending and climate proposal, disappointing investors looking to buy new bonds and local governments trying to manage their debt loads.
• The yield on a 10-year tax-exempt triple-A muni bond has fallen 8% since Oct. 28, according to ICE Data Services. Bond yields fall as prices rise.

Slow Return of Prime-Age Workers Threatens Recovery – Wall Street Journal, 11/15/2021

• The participation rate was 61.6% in October, up from a steep decline at the onset of the pandemic but well below 63.3% in February 2020, just before Covid-19 hit the U.S. economy.
• Some of the weakness in overall labor-force participation represents a pandemic-induced acceleration in retirements. More puzzling is that roughly 1.4 million fewer adults ages 25 to 54 are working or looking for a job than in the month before the pandemic hit.
• The labor-force participation rate for these so-called prime-age workers was 81.7% this October, down from 82.9% in February 2020.
• Declines in participation among prime-age workers account for about half of the overall drop in the labor-force participation rate, adjusted for an aging population, since February 2020, according to calculations by Jason Furman, senior fellow at the Peterson Institute for International Economics, and Wilson Powell III, research associate at the Harvard Kennedy School.

Democrats Fear Steep Losses in 2022 Midterm House Races – Wall Street Journal, 11/15/2021

• Alarm bells are ringing in the Democratic Party as it prepares to defend its narrow House majority in the 2022 midterm elections.
• When a progressive firm last month polled Black voters, a key Democratic constituency, it found less than half saying their lives had improved under President Biden.
• A second Democratic-allied firm found that among new voters who backed Mr. Biden in 2020 in competitive states, nearly one-third now thought it would be good if Republicans took over Congress.
• Midterm elections are always challenging for the party that holds the White House, as the opposing party is often still stinging from its loss and more eager to vote when the next chance arises. With only two exceptions, the president’s party has lost House seats in every midterm election since World War II.
• The process of drawing new House district lines, which follows each decade’s census, is likely to create more safe Republican seats than Democratic seats, as GOP-led legislatures and governors will redraw lines for 187 House districts, compared with 75 drawn by Democrats.

Sen. Patrick Leahy Announces He Will Not Run for Re-Election in 2022 – Wall Street Journal, 11/15/2021

• Sen. Patrick Leahy (D., Vt.), the longest-serving lawmaker in the Senate and the chairman of the Appropriations Committee, on Monday said that he wouldn’t run for re-election next year.
• Mr. Leahy, 81 years old, was the first popularly elected Democrat from Vermont in the state’s history. Elected in 1974 at the age of 34 as one of the Watergate babies who rode on a reform wave that followed the presidential scandal, he went on to make a mark as an ardent environmentalist.
• Vermont has swung increasingly Democratic in recent years. The race to succeed him will put the focus on two long-serving state politicians, Rep. Peter Welch (D., Vt.) and the state’s popular governor, Republican Phil Scott.

Beto O’Rourke Says He Is Running for Texas Governor – Wall Street Journal, 11/15/2021

• Beto O’Rourke, the former Democratic U.S. presidential candidate, said he is running for governor of Texas.
• Mr. O’Rourke previously served three terms in the House of Representatives. He narrowly lost his 2018 run for the U.S. Senate against incumbent Republican Sen. Ted Cruz—a challenge that helped make Mr. O’Rourke a political celebrity.
• But his bid for the Democratic 2020 presidential nomination failed to catch fire.
• Recent polling has shown the two men are close, with Mr. Abbott having a slight edge. A poll conducted in late October by Rice University and the Texas Hispanic Policy Foundation found 44% of 2020 voters prefer Mr. Abbott, versus 43% for Mr. O’Rourke.
• A poll that same month by the University of Texas and the Texas Tribune found a wider spread among registered voters, with 46% for Mr. Abbott and 37% for Mr. O’Rourke.

EUROPE & WORLD

Austria Imposes Restrictions for Unvaccinated, Considers Full Covid-19 Lockdown – Wall Street Journal, 11/15/2021

• Austria is debating the reintroduction of Covid-19 lockdown restrictions for all after it ordered some of Europe’s toughest curbs on the unvaccinated, as a steep rise in infections threatens to overwhelm the country’s hospitals
• On Monday, the Alpine republic ordered around two million people who aren’t fully vaccinated against Covid-19 or who haven’t contracted the disease in the past 180 days to remain in their homes.
• Starting Monday, some regions of Germany, including the capital Berlin and Bavaria in the south, will ban those without immunity from restaurants, bars, cinemas, museums and most other public indoor entertainment venues.
• Austrian Health Minister Wolfgang Mückstein said on Sunday that stricter measures applicable to the entire population, including shutting down bars and restaurants after a certain hour, had already been drafted should this week’s steps prove insufficient.

China Posts Robust Growth in Factory Output and Consumer Spending – Wall Street Journal, 11/15/2021

• Chinese factory activity and consumer spending were surprisingly robust in October, official monthly figures showed Monday, though fresh signs of weakness in the property sector underscored concerns for the outlook of the world’s second-largest economy.
• Industrial production rose 3.5% from a year earlier in October, China’s National Bureau of Statistics said, accelerating from September’s 3.1% pace and beating the 2.8% median forecast by economists polled by The Wall Street Journal.
• Retail sales, a key gauge of Chinese consumption, unexpectedly increased 4.9% in October from a year earlier, higher than September’s 4.4% growth rate and outstripping the 3.5% expected by surveyed economists.
• Sales in the restaurant sector, which is particularly sensitive to Covid-19 outbreaks, grew 2% in October compared with a year earlier, down from September’s 3.1% year-over-year gain, official data showed.
• China’s urban jobless rate, its headline unemployment figure, remained unchanged at 4.9% in October.
• The National Bureau of Statistics said Monday that the country has created more than 11 million jobs in the first 10 months of the year, which likely helped underpin China’s consumption.

Japan Economy Shrinks, Hit by Supply-Chain Troubles – Wall Street Journal, 11/15/2021

• Japan’s economy shrank in the July-September period owing to a fall in exports caused by supply-chain constraints and lower consumer spending during a Covid-19 state of emergency.
• The decline will likely give a push to Prime Minister Fumio Kishida’s plans for cash handouts to families to stimulate the economy, although economists expect growth to resume in the current quarter regardless.
• In the third quarter, the world’s third-largest economy contracted 0.8%, compared with a 0.4% expansion in the previous quarter. The economy shrank 3% on an annualized basis, which reflects what would happen if the third-quarter pace continued for a full year.
• Exports, which had been a driver for Japan’s economic recovery from the pandemic, fell 2.1% from the previous quarter. Private spending dropped 1.1%, reflecting a sharp decline in car sales and continued weakness in services.

Bank of Canada ‘Getting Closer’ to Raising Rates, Macklem Says – Bloomberg, 11/15/2021

• Bank of Canada Governor Tiff Macklem said his central bank is “getting closer” to raising interest rates as slack in the economy dissipates, in line with the forward guidance officials have been providing all along.
• While substantial monetary stimulus is still needed in order for the economy to fully recover, Macklem said his team remains focused on its inflation target a time when risks associated with price pressures have increased.
• “For the policy interest rate, our forward guidance has been clear that we will not raise interest rates until economic slack is absorbed,” Macklem wrote in an opinion piece for the Financial Times published Monday. “We are not there yet, but we are getting closer.”
• The language in the article is consistent with recent efforts by the Bank of Canada policy makers to reassure Canadians they are serious about inflation, including a decision last month that saw officials bring forward the timeline for possible interest rate increases to early next year.

China Bought Italian Military-Drone Maker Without Authorities’ Knowledge – Wall Street Journal, 11/15/2021

• In 2018, a Chinese state-controlled company bought an Italian manufacturer of military drones. Soon after, it began transferring the company’s know-how and technology—which had been used by the Italian military in Afghanistan—to China.
• The Italian and European authorities had no knowledge of the move, revealing how Beijing is skirting weak investment-screening in Europe to acquire sensitive technology.
• Italian authorities are investigating the 2018 takeover of Alpi Aviation Srl by a Hong Kong-registered company that they say is a front for the Chinese state and was in the process of transferring the company’s technical and intellectual property to a new production site in China.
• The takeover fits a pattern, analysts say, of Chinese state firms using ostensibly private shell companies as fronts to snap up firms with specific technologies that they then shift to new facilities in China.

BoE’s Bailey says he is ‘very uneasy’ about inflation – Reuters, 11/15/2021

• Bank of England Governor Andrew Bailey said he was very uneasy about the inflation outlook and that his vote to keep interest rates on hold earlier this month, which shocked financial markets, had been a very close call.
• Bailey said he wanted markets to be in no doubt that the central bank would act to counter above-target inflation, even if uncertainty about the outlook for jobs had tipped the balance against raising rates this month.
• “I’m very uneasy about the inflation situation,” he told the House of Commons Treasury Committee on Monday. “I want to be very clear on that. It is not of course where we wanted to be, to have inflation above target.”
• Earlier this month the BoE forecast inflation would reach around 5% in the second quarter of next year, more than double its official target, due to surging energy prices and supply bottlenecks as the world emerged from the COVID-19 pandemic.

Airbus wins Air Lease launch order for A350 freighters – Reuters, 11/15/2021

• European planemaker Airbus secured a provisional debut order for seven A350 freighter jets from leasing company Air Lease on Monday, stepping up efforts to challenge Boeing for a bigger slice of the booming cargo market.
• The expansion of e-commerce has accelerated since the global pandemic, while upcoming international rules on plane emissions are putting pressure on freight operators to modernise fleets.
• A letter of intent for the freighters signed at the Dubai Airshow on Monday includes more than 100 passenger jets: 25 A220-300s, 55 A321neos, 20 A321XLRs and four wide-body A330neos.
• The order will be finalised in coming months, Airbus said, without giving a value for the deal.

Factmonster – TODAY in HISTORY

• Charles Mason and Jeremiah Dixon began surveying the Mason-Dixon line. (1763)
• The Continental Congress approved the Articles of Confederation, the precursor to the U.S. Constitution. (1777)
• About 250,000 protesters against the Vietnam War, the largest war protest ever, converged peacefully on Washington, DC. (1969)
• Hu Jintao replaced Jiang Zemin as China’s Communist Party leader. (2002)