US ECONOMY & POLITICS

U.S. Shoppers Boosted Spending Last Month, Taking on Higher Prices – Wall Street Journal, 11/16/2021

• American consumers spent more at the start of the holiday shopping season, brushing off concerns about higher prices at retailers last month.
• Sales at U.S. retail stores, online sellers, and restaurants rose by a seasonally adjusted 1.7% in October compared with the previous month, the Commerce Department said. Consumers continued their stepped-up spending despite continued Covid-19 fears and inflation concerns.
• Spending rose sharply, by 4%, at online retailers, along with big gains at electronics, appliance and hardware stores. Grocery-store sales rose by 1.1% while restaurant and bar sales were flat. Other gains occurred at gas stations, where sales rose 3.9%, and auto dealerships, with a 1.8% gain.
• Core retail sales, a measurement that excludes spending on autos, gasoline, building materials and food services, were up 1.6%, showing that consumers increased discretionary spending in addition to taking on higher prices for necessary goods.

U.S. manufacturing output races to 2-1/2-year high – Reuters, 11/16/2021

• Production at U.S. factories rebounded more than expected in October as the drag from Hurricane Ida faded and motor vehicle output picked up, but manufacturing continues to be constrained by shortages of raw materials and labor.
• Manufacturing output surged 1.2% last month to its highest level since March 2019, after falling 0.7% in September, the Federal Reserve said on Tuesday. Economists polled by Reuters had forecast manufacturing production rising 0.7%.
• Output increased 4.5% compared to October 2020. Manufacturing, which accounts for 12% of the U.S. economy, is being underpinned by businesses desperate to rebuild depleted inventories.
• Production at auto plants rebounded 11.0% last month after declining for two straight months. Excluding autos, manufacturing output rose 0.6% in October.
• Capacity utilization for the manufacturing sector, a measure of how fully firms are using their resources, increased 0.9 percentage point in October to 76.7%, the highest since January 2019.
• Overall capacity use for the industrial sector rose to 76.4% from 75.2% in September. It is 3.2 percentage points below its 1972-2020 average.

U.S. import prices surge in October on petroleum, food – Reuters, 11/16/2021

• U.S. import prices surged in October as the costs of petroleum products and food increased, adding to signs that inflation could remain high for a while.
• Import prices accelerated 1.2% last month after gaining 0.4% in September, the Labor Department said on Tuesday. In the 12 months through October, prices jumped 10.7% after rising 9.3% in September. Economists polled by Reuters had forecast import prices, which exclude tariffs, increasing 1.0%.
• Imported fuel prices soared 8.6% last month after increasing 3.9% in September. Petroleum prices advanced 8.1%, while the cost of imported food rose 0.8%.
• Excluding fuel and food, import prices gained 0.3%. These so-called core import prices were unchanged in September and were up 5.0% on a year-on-year basis in October.

Biden Signs $1 Trillion Infrastructure Bill Into Law – Wall Street Journal, 11/16/2021

• President Biden signed into law a roughly $1 trillion infrastructure bill to repair the nation’s aging roads and bridges, upgrade the electrical grid and expand access to broadband internet.
• The legislation, the largest federal investment in infrastructure in more than a decade, is a central component of Mr. Biden’s domestic-policy agenda and marks a rare bipartisan policy win for the White House.
• The infrastructure package includes about $550 billion above projected federal spending on roads, bridges, expanded broadband access and more.
• It will be paid for with a variety of revenue streams, including more than $200 billion in repurposed funds originally intended for coronavirus relief but left unused; about $50 billion from delaying a Trump-era rule on Medicare rebates; and $50 billion from certain states returning unused unemployment insurance supplemental funds.
• The law includes $110 billion in funding for roads, bridges and major projects, as well as $39 billion to modernize and make public transit more accessible to the disabled and elderly.

U.S. Homebuilder Sentiment Increases to a Six-Month High – Bloomberg, 11/16/2021

• Confidence among U.S. homebuilders rose to a six-month high in November on stronger sales and foot traffic even as labor and supply-side challenges delay completion times and drive up costs.
• A gauge of builder sentiment rose to 83 from an October reading of 80, National Association of Home Builders/Wells Fargo data showed Tuesday. It marked the third-straight increase.
• A measure of current single-family home sales rose to the highest since February, while a gauge of prospective buyer traffic increased to a five-month high.
• The component assessing sales expectations for the next six months held steady at 84, the highest since December.

Fed’s Bullard Urges More Hawkish Policy to Offset Inflation Rise – Bloomberg, 11/16/2021

• Federal Reserve Bank of St. Louis President James Bullard said the central bank should speed up its reduction of monetary stimulus in response to a surge in U.S. inflation.
• “I think it behooves the committee to go in a more hawkish direction in the next couple of meetings so we are managing the risk of inflation appropriately,” Bullard, who votes on monetary policy in 2022, said in a Bloomberg Television interview with Michael McKee, Lisa Abramowicz and Tom Keene on Tuesday.
• The Federal Open Market Committee earlier this month that it would begin tapering the $120 billion-a-month bond-buying program it put in place last year in the early days of the Covid-19 pandemic.
• The planned pace of reduction puts it on track to cease purchases entirely by the mid-2022.
• “We could move faster — we kept optionality on this that we could speed up the taper if it is appropriate,” said Bullard, noting he had proposed an end of the tapering of bond-buying by March.

Inflation Set to Spoil Holidays for Struggling U.S. Families – Bloomberg, 11/16/2021

• Retailers are forecasting a record holiday spending season. But for one in ten Americans, prices rising at the fastest pace in 30 years will dampen the Christmas spirit.
• Inflation is especially taking a toll on lower-income families, who spend roughly a third of their earnings on essentials like food and energy. It’s eating into recent wage increases, and the timing couldn’t be worse after federal pandemic relief expired for about 7.5 million people.
• The holiday season will lay bare inequalities in the economic recovery. That’s because a majority of Americans flush with over $2 trillion in excess savings accumulated during the pandemic are ready to splurge on gifts and holiday trips.
• At the same time, more than 11% of Americans don’t plan to spend at all, the greatest share in at least 10 years and more than double that in 2020, according to a Deloitte LLP survey.

EUROPE & WORLD

Czechs Weigh Austria-Style Lockdown for Unvaccinated – Bloomberg, 11/15/2021

• The Czech government is considering several options of stricter rules for people who aren’t vaccinated against Covid-19, ranging from harsh steps to only a mild tightening of measures, according to outgoing Prime Minister Andrej Babis.
• One of the alternatives is a similar regime to the one imposed in neighboring Austria, which limits the movement and activities of those who have refused inoculation, Babis told a televised news conference after a government meeting on Monday.
• Some cabinet members are advocating softer steps, such as no longer accepting antigen tests for sporting and cultural events or restaurant visits.
• The government will meet again on Thursday to debate new measures as it tries to slow the spread of the coronavirus.

More Than 10,000 Australians Want Compensation for Vaccine Side Effects: Report – Bloomberg, 11/16/2021

• Australia’s government may face a more than A$50 million ($37 million) bill related to its Covid-19 vaccination program, as thousands of people register for compensation for health issues related to their inoculations, the Sydney Morning Herald reported.
• More than 10,000 people have registered for a government program to be compensated for lost income after being hospitalized for rare but significant side effects from the jab, the paper reported, citing official data.
• The TGA has received 288 reports assessed as likely to be heart inflammation linked to the Pfizer Inc. vaccine, as well as 160 of rare clotting disorder thrombosis with thrombocytopenia syndrome (TTS) linked to the AstraZeneca vaccine.
• New South Wales, the country’s most populous state, on Tuesday reported 212 Covid-19 cases, while Victoria recorded 797.

BMW fourth quarter off to good start, sees double-digit 2021 margins – CFO – Reuters, 11/16/2021

• BMW’s October sales came in better than expected and November sales are off to a good start, the carmaker’s CFO said on Tuesday, adding he expected the company to reach the upper end of its 9.5% to 10.5% automotive profit forecast this year.
• Such margins were unlikely to last, though easing supply chain bottlenecks for semiconductor chips in the second half of 2022 could still boost growth, Chief Financial Officer Nicolas Peter said at a roundtable with journalists in Frankfurt.
• The company expects electric vehicle sales to at least double in 2022 and plans increase the prices for all its new cars by an average of 1%, the CFO said.
• He also said BMW’s planned increase of its stake in China joint venture BMW Brilliance to 75% from 50% should take place in the first quarter of 2022, when the country drops the rule blocking foreign ownership of more than 50% of local companies.

Factmonster – TODAY in HISTORY

• General Sherman and his troops began their “March to the sea” during the Civil War. (1864)
• Oklahoma became the 46th state. (1907)
• The United States and the Soviet Union established diplomatic relations. (1933)
• President Nixon signed the bill authorizing the construction of the Trans-Alaska Pipeline. (1973)
• President George W. Bush nominated Condoleezza Rice to replace Colin Powell as secretary of state. (2004)