US ECONOMY & POLITICS

U.S. third-quarter economic growth raised; COVID-19 disruptions loom – Reuters, 12/22/2021

• U.S. economic growth slowed in the third quarter amid a flare-up in COVID-19 infections, the government confirmed on Wednesday, but activity has since picked up, putting the economy on track to record its best performance this year since 1984.
• Gross domestic product (GDP) increased at a 2.3% annualized rate, the Commerce Department said in its third reading of GDP growth for the July-September quarter.
• Though that was an upward revision to the 2.1% rate estimated last month, it was still the slowest pace since the second quarter of 2020, when the economy suffered a historic contraction in the wake of stringent mandatory measures to contain the first wave of coronavirus cases.
• According to a Reuters survey of economists, growth this year could come in at 5.6%, which would be the fastest since 1984. The economy contracted 3.4% in 2020.

Homes Sold in November at Fastest Pace in 10 Months – Wall Street Journal, 12/22/2021

• U.S. home sales rose in November as low mortgage-interest rates and a strong job market continued to drive robust demand.
• Existing-home sales increased 1.9% in November from the prior month to a seasonally adjusted annual rate of 6.46 million, the highest pace since January, the National Association of Realtors said Wednesday. November sales fell 2.0% from a year earlier.
• Existing-home sales are on track for their strongest year since 2006, and sales in the first 11 months of the year rose 10% from a year earlier, NAR said.
• As buyers compete for a limited number of homes on the market, home prices soared.
• The median existing-home price rose 13.9% in November from a year earlier, NAR said, to $353,900.

U.S. Consumer Confidence Rose in December, Defying Omicron Fears – Bloomberg, 12/22/2021

• U.S. consumer confidence rose in December by more than expected as Americans’ outlook for employment and the economy improved, suggesting some resilience in the recovery despite growing concerns about the omicron variant and elevated prices.
• The Conference Board’s index increased to 115.8 from an upwardly revised 111.9 reading in November, according to the group’s report Wednesday. Economists in a Bloomberg survey had called for a reading of 111.
• The Conference Board’s expectations index increased to a five-month high of 96.9, while the gauge of current conditions edged down to 144.1.
• The share of consumers who said jobs were “plentiful” fell slightly to 55.1%. Consumers said they were more likely to purchase cars, homes and appliances.

U.S. mortgage application volumes near 2-year low – Reuters, 12/22/2021

• The volume of U.S. mortgage applications slid to the lowest in nearly two years last week on the back of a 3% drop in applications for loans to purchase a home, data out on Wednesday showed in another indication that the limited inventory of homes on the market continues to constrain housing market growth.
• The Mortgage Bankers Association said its weekly composite index tracking mortgage application volumes slipped 0.6% in the week ended Dec. 17 from a week earlier to a seasonally adjusted 588.4. That was the lowest level since the first week of January 2020.
• The drop was led by purchase loan volumes declining to the lowest in a month, offsetting a modest uptick in refinancing applications, which in recent weeks had sagged to the lowest in roughly two years as mortgage interest rates climbed.
• The average application loan size in the latest week was the second highest ever at $416,200, signaling that most of the activity is concentrated in the high-end of the market.

Student-Loan Repayment Moratorium Could Get Another Extension From Biden – Wall Street Journal, 12/22/2021

• The Biden administration is considering another extension to the moratorium on student-loan payments first put in place at the start of the Covid-19 pandemic.
• A spokesperson for the Education Department said it would announce whether it plans to extend the pause later this week. The moratorium is currently scheduled to expire at the end of January.
• In a Dec. 8 letter to Mr. Biden, Sens. Elizabeth Warren (D., Mass.) and Chuck Schumer (D., N.Y.) and Rep. Ayanna Pressley (D., Mass.) said resuming collection of student debt would force 18 million families to pay $85 billion over the next year and hold back the economic recovery at a time when the Omicron variant is surging.
• The letter also urged the president to use executive authority to forgive $50,000 of student debt for every borrower. Mr. Biden has said loan forgiveness should come from Congress.

Life Expectancy in U.S. Declined 1.8 Years in 2020, CDC Says – Wall Street Journal, 12/22/2021

• New federal figures show a deeper than previously reported decline in U.S. life expectancy last year, as the Covid-19 pandemic took hold.
• Final data released Wednesday by the Centers for Disease Control and Prevention show that Americans’ life expectancy fell 1.8 years to 77 years in 2020. The drop was 0.3 years more than that of provisional estimates released in July 2021 and remains the biggest life-expectancy decline since at least World War II.
• Covid-19 was the nation’s third leading cause of death last year, behind heart disease and cancer, and was the underlying cause in about 351,000 deaths, the new figures show.
• Increases in mortality from unintentional injuries—which include drug overdoses—as well heart disease, homicide and diabetes also decreased life expectancy.
• CDC figures released last month show that the U.S. recorded its highest number of drug-overdose deaths in a 12-month period that ended in April.

California Adds Competitive Congressional District, but Population Shifts Favor Democrats, Analysts Say – Wall Street Journal, 12/22/2021

• California officials have released a new set of congressional district maps that will result in more districts that analysts expect to be competitive, a contrast to most states that are reducing the number in which both major parties have a chance at victory.
• The state’s independent redistricting commission approved the lines for 52 U.S. House of Representatives districts in a unanimous vote late Monday. Nine of them are competitive or have the potential to be competitive, according to political analysts, up from eight during the 2020 election cycle.
• The maps must be formally submitted to the secretary of state’s office by Dec. 27 and are expected to go into effect for the June 2022 primary.
• Overall, California’s new map is expected to help Democrats, as many of the state’s 11 Republican House members will have to run in districts that are more competitive.
• That is largely due to the implementation of more majority Latino populations districts in areas currently represented by Republicans, according to analysts.

EUROPE & WORLD

China Set to Fall Short on Promises to U.S. as Trade Deal Ends – Bloomberg, 12/22/2021

• When the trade deal between China and the U.S. was signed in January 2020, there was some hope that it would lead to a reduction in bilateral tensions and restore some balance to trade, but those goals are proving elusive as 2021 comes to a close.
• In the 23 months since then-President Donald Trump signed the phase-one agreement, Chinese imports from the U.S. have indeed hit a new record.
• However, as of the end of last month Beijing was well behind on promises made — buying little more than 59% of the extra $200 billion in manufactured, agricultural and energy goods it said it would by the end of 2021.
• The increase in imports was overwhelmed by the pandemic-induced surge in exports going the other way, undermining the attempt to secure more balanced trade between the world’s two biggest economies.
• That puts China on track for a record trade surplus with the U.S. this year — selling $358 billion more in goods than it bought in the first 11 months of this year.

Aging Germany Is Running Out of Workers, Putting Europe’s Largest Economy at Risk – Wall Street Journal, 12/22/2021

• Germany has long been ahead of the curve as a source of technical innovation and manufacturing.
• Now it is leading much of the developed world toward a demographic cliff edge that could put a damper on Europe’s largest economy, raising pressure on its pension system and pushing inflation higher for years to come.
• Economists forecast that Germany’s workforce could peak as soon as 2023 and then shrink by up to five million people by the end of the decade.
• While the pandemic has exacerbated the trend, it is the impending retirement of the baby boomers that is fueling the labor crunch, economists say.
• Germany was one of the first in Europe to experience a sharp drop in birthrates after World War II, as early as the 1970s.
• This means its fate could be the shape of things to come for other mature economies that are still behind the demographic curve.

BlackBerry revenue beats estimates as cybersecurity demand stays strong – Reuters, 12/22/2021

• BlackBerry, beat Wall Street estimates for third-quarter revenue on Tuesday, helped by sustained demand for its cybersecurity and Internet of Things products.
• Revenue fell to $184 million for the quarter ended Nov. 30, from $218 million a year earlier, but beat analysts’ average expectation of $177.25 million, according to IBES data from Refinitiv.
• BlackBerry posted third-quarter cybersecurity revenue of $128 million and forecast that to be between $125 million and $135 million in the fourth quarter, below an estimate of $143 million by one analyst, according to Refinitiv data.
• BlackBerry reported a net profit of $74 million in the third quarter, compared with a loss of $130 million a year earlier.
• Chief Executive Officer John Chen said on a conference call that BlackBerry expects automotive supply chain issues to ease in the fourth quarter and help boost demand for its QNX car software, used by automakers including Volkswagen, BMW and Ford.

China Halts Alibaba Cybersecurity Cooperation for Slow Reporting of Threat, State Media Says – Wall Street Journal, 12/22/2021

• Chinese authorities suspended a cybersecurity partnership with the cloud-computing unit of Alibaba over delays in reporting a global software vulnerability that is roiling governments and companies world-wide, state media reported.
• China’s ministry in charge of technology said its cybersecurity threat and information platform would be stopping its cooperation with Alibaba Cloud for six months, as the company had failed to report the Log4j2 flaw to relevant authorities in a timely manner, the state-run China Daily reported on Wednesday, citing unnamed ministry officials. Alibaba declined to comment.
• Alibaba is part of a national cybersecurity-threat database, which requires members to promptly report information about such glitches, according to the China Daily report.
• The Hangzhou-based company’s failure to report the issue quickly hindered efforts by the Ministry of Industry and Information Technology to handle the threat effectively, the report said.
• The ministry, also known as MIIT, said it would reassess Alibaba’s corrective measures before resuming its current partnership, the paper wrote. MIIT didn’t respond to a faxed request for comment sent after office hours.

Novartis to Buy Gene-Therapy Company Targeting Eye Condition – Wall Street Journal, 12/22/2021

• Novartis has agreed to pay up to $1.5 billion to acquire British biotech Gyroscope Therapeutics, in a deal that will expand its pipeline of gene therapies targeting eye diseases.
• The Swiss healthcare giant said Wednesday it would make an upfront payment of $800 million, and potential additional payments of up to $700 million, provided Gyroscope hits particular development milestones.
• The acquisition will hand Novartis an experimental gene therapy for geographic atrophy, a form of age-related macular degeneration that can lead to permanent vision loss.
• The treatment, known as GT005, is designed to increase the production of a protein, called CFI, that is thought to reduce damaging inflammation

Factmonster – TODAY in HISTORY

• The Pilgrims landed at Plymouth, Massachusetts. (1620)
• Pierre and Marie Curie discovered radium. (1898)
• Disney’s Snow White, the first feature length color and sound cartoon, premiered. (1937)