United States. One area where inflation accelerated is housing. US mortgage rates rose quickly—the 30-year fixed-rate average climbed from below 3% in August to above 7% in November. The average has lately come down, to 6.4% (December 29), but rates are still among the highest seen in 13 years. The median sale price for homes has been volatile, reaching a record $416,000 in July. The price has since fallen to $370,000 (November), a level still 40% higher than the last prepandemic median (National Association of Realtors).
Eurozone. European Union governments are developing policies and funding for energy production while seeking to diversify energy sources. The EU solar photovoltaic industry alliance was launched in December, aiming for an annual output of 30 gigawatts for each key solar component by 2025—more than six times the current capacity. An underwater pipeline between Barcelona and Marseille was announced by Spain, Portugal, and France; by 2030, it could carry two million metric tons of green hydrogen annually.
United Kingdom. By the government’s own estimates, the economy is headed for a recession next year, and living standards could fall 7% over two years, wiping out eight years of growth. Workers in the United Kingdom are responding to the cost-of-living crisis with a wave of strikes. Nurses, ambulance personnel, and railway workers are among those taking actions.
China. Authorities have further lifted COVID-19 restrictions, reducing testing requirements, relieving mobility constraints, and permitting at-home quarantines. China has a high overall vaccination rate (above 90%) and is now seeking to improve the uptake among seniors. The incidence rate for new COVID-19 cases is low, but totals are rising, having reached between 4,000 and 5,000 in the most recent three-day rolling average (to January 3). By comparison, the US totals are above 15,000 for the same period, despite the wide population disparity.
India. The industrial production index retreated by –4.0% year over year in October (+3.1% in September). Most of the reversal came in manufacturing, which declined by –5.6% compared with last year. The PMI for manufacturing tells a different story, however, expanding in both November (55.7) and October (55.3) as inflation eased and demand revived. The services PMI rose as well (56.4 in November, 55.1 in October); export orders for services rose for the first time since early 2020.
Brazil. President-elect Lula da Silva was formally confirmed as Brazil’s next president. The leader of the leftist Workers’ Party (WP) will head a center-left coalition government. He has emphasized poverty eradication, indigenous protections, and reversing Amazon deforestation as major government objectives. The country remains deeply polarized politically. Some tense moments passed in recent weeks, as outgoing President Bolsonaro never conceded the election, and his supporters continued to engage in civil unrest.