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

Denmark Reports Record Covid Cases on Christmas Testing Spike – Bloomberg, 12/29/2021

• Denmark’s new coronavirus cases jumped to an all-time high as Danes flocked to testing facilities during the holiday break.
• Denmark — among the countries with the most registered cases of the omicron variant — saw 23,228 cases on Wednesday, 44% above the existing record, according to Statens Serum Institut. Hospitalizations increased by nine people.
• The Nordic nation introduced new curbs last week, including requiring negative tests from all travelers, to halt the spread of omicron that has become the dominant variant in Denmark.
• The country has Europe’s most rigorous screening program, with a high level of testing, and variant-screening of all positive PCR tests.

Hong Kong Stocks on Track for Worst Year in a Decade – Wall Street Journal, 12/29/2021

• Stocks in Hong Kong have taken a battering in 2021, with China’s regulatory crackdowns helping to put the city’s flagship equity index on course for its biggest loss in a decade.
• The selloff means valuations are modest, and some investors and analysts say the worst of the policy onslaught may have passed. But few are willing to predict a big upturn next year.
• The city’s Hang Seng Index closed Wednesday at 23086.54. That took its year-to-date decline to 15.2%, setting it on course for its worst year since 2011.
• While U.S.-listed Chinese stocks have suffered even more, global stocks have broadly rallied this year, with the FTSE All-World Index up about 20%.
• Overall, the total market capitalization of stocks listed in the city fell by close to $600 billion in the year through Nov. 30 to about $5.5 trillion, according to the most recent data available from the operator of Hong Kong’s stock exchange.

Hong Kong Pro-Democracy Site Stand News Closes After Arrests, Raid – Wall Street Journal, 12/29/2021

• National security police in Hong Kong arrested seven people linked to the popular pro-democracy news site Stand News, prompting it to shut down and dealing a further blow to freedom of speech in a city once celebrated for its rambunctious journalism.
• The city’s National Security Department said Wednesday that the arrests were for conspiracy to publish seditious content, an offense under the colonial-era Crimes Ordinance. The offense is punishable by up to two years in prison and a fine of 5,000 Hong Kong dollars, equivalent to $641.
• Stand News said after the arrests and police raid that it would stop operations, with its acting editor resigning and all employees immediately dismissed.
• Senior Superintendent of the National Security Department Li Kwai-wah told reporters after the Stand News arrests that the news site continued to publish seditious content from July 2020 to November 2021, after the national security law came into effect.
• After Beijing imposed national security legislation on the city in June last year, local media came under scrutiny. Pro-democracy newspaper Apple Daily printed its last edition after 26 years in June this year following the arrest of senior journalists and leaders, including founder Jimmy Lai.

BMW to create up to 6,000 new jobs next year – Reuters, 12/29/2021

• Germany’s BMW plans to create up to 6,000 new jobs next year to prepare for growing demand for its electric vehicles, the carmaker’s chief executive told daily Muenchner Merkur.
• BMW is on a very good path through the transformation and has its plants prepared for e-mobility, Oliver Zipse was quoted as saying in an interview published on Wednesday. “That is why we will increase our workforce by up to five percent next year.”
• BMW has so far sold more than one million electric vehicles (EV) – including purely electric and hybrid vehicles – and plans to reach two million sales of purely electric vehicles by 2025.
• The carmaker aims for at least 50% of global sales to be fully electric by 2030, but has warned that a lack of charging infrastructure was a major barrier to quicker consumer uptake of electric vehicles.

Inflation Surge Puts U.K. on Track for the ‘Year of the Squeeze’ – Bloomberg, 12/29/2021

• U.K. households are heading into the “year of the squeeze” as surging energy bills and faster inflation eat into incomes, according to the Resolution Foundation think tank.
• In a grim report days before the New Year holiday, it said real wages will effectively stagnate in 2022, rising just 0.1%. In three years, they’ll be 740 pounds ($996) a year lower than if the pre-pandemic wage trend had continued.
• Resolution estimates the average impact on incomes from higher energy bills will be 600 pounds. Earlier this month, Investec Plc said the total increase for households next year could be 18 billion pounds.

Factmonster – TODAY in HISTORY

• Thomas Becket, Archbishop of Canterbury, was murdered by four knights acting under the orders of Henry II. (1170)
• The last major battle of the Indian Wars, at Wounded Knee Creek, took place with hundreds of Indian men, women, and children massacred. (1890)
• During World War II, Germany began dropping incendiary bombs on London. (1940)
• A peace agreement was signed, ending 36 years of conflict in Guatemala. (1996)