There is much to discuss in this latest mid-month ‘Nuggets’ report, so let’s dive right in.
- The U.S. seven-day average COVID case count, mainly stemming from the Omicron variant, is currently 807,000. The number is continuing to climb, although at a slower pace than a week or two ago. What are the present seven-day average infection rates in the four biggest-population states? California is at 119,000 and still ascending; Texas is at 69,000 and, likewise, still apparently climbing; New York, 53,000 and down by a quarter from its peak of a week ago; and Florida, 58,000, down by a third from its worst number.
- Canada’s seven-day average COVID case count is 40,000, dipping just a little from its highest point. Ontario and Quebec are currently running about 10,000 cases per day each. In Ontario, that’s a drop of nearly half from peak; in Quebec, it’s a pullback of a third. Alberta’s seven-day average case count is 6,000 and not far off peak. Neighboring B.C. has a case count of just 2,400. The biggest flare-ups of late have been in the relatively small-population provinces of Nova Scotia and Saskatchewan.
- Quebec is adopting the strictest vaccination policy among provinces and states. Premier Legault has announced plans for a special health care tax to be paid by the unvaccinated. In Europe, Austria will be implementing a mandatory vaccination policy on February 1, with steep fines for those who don’t comply. President Macron of France has said he wants to make everyday life for the unvaccinated in his country quite ‘uncomfortable’.
- China, which is experiencing a rapidly aging population due to its earlier (and since abandoned) one child policy, plus an extreme gender imbalance in the country (i.e., there are 34 million more males than females), saw its annual number of births in 2021 contract by -12% vs 2020. ‘Demography’ is how you spell trouble for China over the longer term.
- China’s 2021 ‘real’ (after adjustment for inflation) gross domestic product (GDP) growth has been estimated at +8.1%. The pace of Chinese GDP growth has slowed recently, however, due to insolvency problems among some major residential real estate developers (e.g., Evergrande and others) and renewed outbreaks of COVID contagion in several cities and ports (Tianjin and Dalian). The latter are particularly concerning since they threaten lockdowns, which will compound international supply chain distress. Nevertheless, the Winter Olympics are scheduled to open on Friday, February 4th.
- The U.S. inflation rate in December, defined as the year-over-year change in the all-items Consumer Price Index (CPI), was +7.0%. That’s an enormous increase. It’s sending politicians and central bankers into a kerfuffle, looking for a quick fix, which will surely prove elusive. The ‘core’ rate of inflation omits highly volatile energy and food items, and it was less torrid, +5.5% y/y. The price of gasoline was up by half (+49.6%) y/y.
