US Shoppers Return for ‘Black Friday,’ But Many Have Already Bought

Americans returned to stores for the “Black Friday” kickoff of the holiday shopping season, but online data shows that consumers have been spending big for weeks amid worries over shortages.

The day after the U.S. Thanksgiving celebration is the traditional start to the holiday shopping season, and normally sees Americans line up outside stores before they open to clinch deals on popular items.

After the pandemic kept crowds away last year, many shoppers were out in force Friday, a sign of how COVID-19 vaccines have returned life in the United States to something closer to normal.

“I just wanted to make sure that this Christmas was a good Christmas for all my friends and family,” said a masked Sylvia Gonzalez as she waited in line outside the jewelry chain Pandora in New York.

But even before retailers opened their doors early Friday morning, e-commerce shoppers in the United States had already spent $76 billion since early November, up more than 20% from the year-ago period, according to data from software company Adobe, which has projected somewhat fewer promotions this year in light of rising costs.

The jump has added to companies’ optimism about the season, suggesting some shoppers heeded calls from businesses to purchase items early this year after port backlogs and other logistics problems sparked worries that popular goods would be in short supply.

Toys led the buying spree, with Adobe pointing to actions by “anxious parents increasingly aware of supply chain challenges.”

The National Retail Federation projects overall spending could rise as much as 10.5% to $859 billion.

Nonetheless, out-of-stock listings online are up 261% compared with two years ago, according to Adobe.

Item in hand

Retailers and market watchers are broadly optimistic about the holiday shopping season in light of low unemployment and relatively strong household finances due in part to pandemic stimulus bills enacted by the government.

Countering those positive trends are lingering supply chain problems, spiking consumer prices that have affected household staples such as food and fuel, and the COVID-19 pandemic, which is still far from over.

On Friday, stock markets worldwide tumbled on worries that the latest strain of the virus found in South Africa could derail the global recovery.

Reminders of the pandemic were visible throughout shopping districts in the New York borough of Manhattan.

Signs at Macy’s reminded customers to keep 2 meters apart, and pop-up COVID-19 testing sites were positioned outside stores where mostly masked crowds were large, but not as sizeable as before the pandemic.

“In 2018, it was more like the New York you heard of,” said German tourist Ilke Zienteck. “Now, it’s a little bit like a small town.”

Still, the hum of customers inside shops suggested that many had adjusted to the “new normal” of pandemic living.

There were obvious gaps at some stores. At a Best Buy near Grand Central Station, a shelf of Apple accessories was almost completely empty, while the camera bags section had few remaining offerings.

Other chains like Victoria’s Secret and Foot Locker have acknowledged shortages of some choice products.

Taylor Schreiner, a digital research expert at Adobe, expects more consumers to order online and pay for expedited shipping, or pick up goods at stores.

“It’s not just because people want it quickly,” he said in an interview. “Having the item in hand is the surest way to have the gift for the person.”

January glut?

An emerging worry in the industry is that retailers will be stuck with goods originally intended for the holidays but that don’t arrive until January.

Macy’s is generally canceling orders for items with a Christmas motif but plans to keep other items if they are cold-weather-oriented and could sell later in the winter, executives said earlier this month.

Gap Chief Financial Officer Katrina O’Connell said the apparel chain was planning to hold some items for next winter.

“If we think items are going to be too late for the holiday season, we won’t put them in stores or online and have them generate markdowns,” she said earlier this week on a conference call with Wall Street analysts. “We’ll hold them for next year.”

Gap has been one of the companies hardest hit by supply chain problems due to lengthy factory shutdowns in Vietnam caused by the country’s COVID-19 restrictions, which contributed to a loss of some $300 million in sales in the most recent quarter. 

 

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US Stocks Sink on New COVID Variant; Dow Loses 905 Points 

Stocks sank Friday, with the Dow Jones Industrial Average briefly falling more than 1,000 points, as a new coronavirus variant first detected in South Africa appeared to be spreading across the globe. Investors were uncertain whether the variant could reverse months of progress at getting the COVID-19 pandemic under control.

The S&P 500 index dropped 106.84 points, or 2.3%, to close at 4,594.62. It was the worst day for Wall Street’s benchmark index since February.

The index was dragged lower by banks, travel companies and energy companies as investors tried to reposition to protect themselves financially from the new variant. The World Health Organization called the variant “highly transmissible.” 

The price of oil fell about 13%, the biggest decline since early in the pandemic, amid worries of another slowdown in the global economy. That in turn dragged down energy stocks. Exxon shares fell 3.5% while Chevron fell 2.3%. 

The blue chips closed down 905.04 points to end the day at 34,899.34. The Nasdaq Composite lost 353.57 points, or 2.2%, to 15,491.66. 

Bond yields fall; banks hit

“Investors are likely to shoot first and ask questions later until more is known,” Jeffrey Halley of Oanda said in a report. That was evident from the action in the bond market, where the yield on the 10-year Treasury note fell to 1.48% from 1.64% on Wednesday. As a result, banks took some of the heaviest losses. JPMorgan Chase dropped 3%. 

There have been other variants of the coronavirus — the delta variant devastated much of the U.S. throughout the summer — and investors, public officials and the general public are jittery about any new variant that’s spreading. It’s been nearly two years since COVID-19 emerged, killing more than 5 million people around the globe so far.

The economic impacts of this variant were already being felt. The European Union and the U.K. both announced travel restrictions from southern Africa on Friday. After the market closed, the U.S. also put travel restrictions on those coming from South Africa as well as seven other African nations.

Airline stocks quickly sold off, with United Airlines dropping 9.6% and American Airlines falling 8.8%. 

“COVID had seemingly been put in the rear-view mirror by financial markets until recently,” Douglas Porter, chief economist at BMO Capital Markets. “At the least, [the virus] is likely to continue throwing sand in the gears of the global economy in 2022, restraining the recovery [and] keeping kinks in the supply chain.” 

Even Bitcoin got caught up in the selling. The digital currency dropped 8.4% to $54,179, according to CoinDesk.

In Nantucket, Massachusetts, where he is spending a holiday weekend, President Joe Biden said he wasn’t concerned about the market’s decline. 

“They always do when there’s something on COVID [that] arises,” Biden said.

‘Fear gauge’

One sign of Wall Street’s anxiety was the VIX, the market’s measurement of volatility that is sometimes referred to as its “fear gauge.” The VIX jumped 53.6% to a reading of 28.54, its highest reading since January, before the vaccines began to be widely distributed.

Fearful of more lockdowns and travel bans, investors moved money into companies that largely benefited from previous waves, like Zoom Communications for meetings or Peloton for at-home exercise equipment. Shares in both companies rose nearly 6%. 

The coronavirus vaccine manufacturers were among the biggest beneficiaries of the emergence of this new variant and the subsequent investor reaction. Pfizer shares rose more than 6% while Moderna shares jumped more than 20%.

Merck shares fell 3.8%, however. While U.S. health officials said Merck’s experimental treatment of COVID-19 was effective, data showed the pill was not as effective at keeping patients out of the hospital as originally thought. 

Investors are worried that the supply chain issues that have impacted global markets for months will worsen. Ports and freight yards are vulnerable and could be shut by new, localized outbreaks.

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Global Stocks Tumble, FTSE 100 Suffers Year’s Worst Session on Virus Scare

Britain’s blue-chip share index slumped Friday, suffering its biggest drop in more than a year as fears over a newly detected and possibly vaccine-resistant coronavirus variant gripped stock markets around the world.

 

The Financial Times Stock Exchange 100 Index closed down 3.7% at its lowest in more than seven weeks, with commodity, travel, and banking stocks leading the sell-off.

 

Britain said the virus variant spreading in South Africa was considered by scientists to be the most significant one found yet and it needed to ascertain whether it rendered vaccines ineffective.

 

Tourism group TUI fell almost 10%, while airline companies like Wizz Air, easyJet and British Airways-owner IAG lost about 15% after British authorities imposed travel restrictions from South Africa and five neighboring countries.

 

“We don’t know so much about this variant yet but if it’s serious, it could change the macro scenarios altogether,” said Roland Kaloyan, head of European equity strategy at Societe Generale.

 

“The Bank of England will not hike rates in a period where we can enter lockdown and put serious burden on the economy.”

 

Supply-chain worries and inflationary pressures have kept the FTSE 100 under pressure, with the blue-chip index lagging its European peers so far this year.

 

Shares of major British lenders HSBC, Lloyds Bank and Barclays all fell almost 5% as investors scaled back expectations for an interest rate hike in December.

 

“Over the last month, the banking sector has benefited from a steeper yield curve but with the news today we see a lower bond yield and that’s also not quite positive for the long term,” said Kaloyan.

 

Energy and mining stocks fell 6.3% and 4.4%, respectively, tracking a slump in commodity prices on fresh economic slowdown fears.

 

The domestically focused mid-cap index dropped 3.0%, faring a bit better than its blue-chip counterpart as online trading platform Plus500 and CMC Markets gained ground.

 

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California Oil Spill Still Affecting Huntington Beach Businesses, Commercial Fishing

In early October, a ruptured underwater pipeline spilled crude oil in the waters off the Southern California coast. Almost two months later, life in Huntington Beach is back to normal, but residents say the reputation of the tourist city has been damaged and businesses are still hurting. Genia Dulot reports

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Stocks, Oil Tumble on Virus Variant Fears, Safe Havens Gain

Global stocks tumbled Friday and oil fell below $80 a barrel after news of a possibly vaccine-resistant coronavirus variant sent investors scurrying to the safety of bonds, the yen and the Swiss franc.

Little is known of the variant, detected in South Africa, Botswana and Hong Kong, but scientists say it has an unusual combination of mutations, may be able to evade immune responses and could be more transmissible.

British authorities think it is the most significant variant to date and have hurried to impose travel restrictions on southern Africa, as did Japan, the Czech Republic and Italy on Friday. 

The European Union also said it aimed to halt air travel from the region.

“Markets have been quite complacent about the pandemic for a while, partly because economies have been able to withstand the impact of selective lockdown measures. But we can see from the new emergency brakes on air travel that there will be  

ramifications for the price of oil,” said Chris Scicluna, head of economic research at Daiwa.

The World Health Organization is convening an experts’ meeting later Friday to evaluate whether the new variant is a “variant of concern.”

Global shares fell 0.8% and were on course for their worst week since early October.

European stocks plunged 2.7%, on track for their worst day since September 2020, with travel and leisure stocks particularly badly hit.

Germany’s DAX sank 3% and Britain’s FTSE 100 fell 2.7% to its lowest in more than a month.

MSCI’s index of Asian shares outside Japan fell 2.2%, its sharpest drop since August. 

Casino and beverage shares were hammered in Hong Kong, while travel stocks dropped in Sydney and Tokyo.

Japan’s Nikkei skidded 2.5% and S&P 500 futures were last down 1.8%.

Giles Coghlan, chief currency analyst at HYCM, a brokerage, said the closure of the U.S. market for the Thanksgiving holiday Thursday had exacerbated moves.

“We need to see how transmissible this variant is, is it able to evade the vaccines – this is crucial,” Coghlan said.

“I expect this story to drag on for a few days until scientists have a better understanding of it.”

Oil prices slid, with U.S. crude futures down 5.7% to $73.96 a barrel and Brent crude down 4.66% to $78.38 amid fresh demand fears.

As investors dashed for safe-haven assets, the yen jumped more than 1% to around 113 per dollar, having languished earlier this week at five-year lows.

The euro rose 0.4% to $1.1251, as safety rather than policy differentials drove trade.

The single currency, however, fell to near 6-1/2 year lows against the Swiss franc at 1.044 francs per euro.

“You shoot first and ask questions later when this sort of news erupts,” said Ray Attrill, head of FX strategy at National Australia Bank in Sydney.

South Africa’s rand fell 2% to a one-year low and its 2030 bond yield soared 25.5 basis points (bps).

Bond yields move inversely to price.

Other bond markets strengthened, benefiting from their safe haven status. Ten-year Treasury yields fell 11 bps to 1.5277% and 30-year yields were down 9 bps to

1.8777%. Germany’s 10-year bond yield was down 6.2 bps at -0.31%. Gold rose 0.7% to $1,800 an ounce.

The market swings come against a backdrop of already growing concern about COVID-19 outbreaks driving restrictions on movement and activity in Europe and beyond.

European countries have expanded COVID-19 booster vaccinations and tightened curbs. Slovakia announced a two-week lockdown, the Czech government will shut bars early and Germany crossed the threshold of 100,000 COVID-19-related deaths.

“I don’t think there’s any going back to the pre-COVID-19 world,” said Mark Arnold, chief investment officer at Hyperion Asset Management in Brisbane.

“We’re just going to get mutations through time and that’s going to change the way people operate in the economy. That’s just reality.”

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Europe’s Christmas Markets Warily Open as COVID Cases Rise

The holiday tree is towering over the main square in this central German city, the chestnuts and sugared almonds are roasted, and kids are clambering aboard the merry-go-round just like they did before the pandemic. But a surge in coronavirus infections has left an uneasy feeling hanging over Frankfurt’s Christmas market.

To savor a mug of mulled wine — a pleasurable rite of winter in pre-pandemic times — masked customers must pass through a one-way entrance to a fenced-off wine hut, stopping at the hand sanitizer station. Elsewhere, security officers check vaccination certificates before letting customers head for the steaming sausages and kebabs.

Despite the pandemic inconveniences, stall owners selling ornaments, roasted chestnuts and other holiday-themed items in Frankfurt and other European cities are relieved to be open at all for their first Christmas market in two years, especially with new restrictions taking effect in Germany, Austria and other countries as COVID-19 infections hit record highs. Merchants who have opened are hoping for at least a fraction of the pre-pandemic holiday sales that can make or break their businesses.

Others aren’t so lucky. Many of the famous holiday events have been canceled in Germany and Austria. With the market closures goes the money that tourists would spend in restaurants, hotels and other businesses.

Jens Knauer, who crafts intricate, lighted Christmas-themed silhouettes that people can hang in windows, said his hope was simply that the Frankfurt market “stays open as long as possible.”

While Christmas is 40% of annual revenue for many retailers and restaurateurs, “with me, it’s 100%,” Knauer said. “If I can stay open for three weeks, I can make it through the year.”

Purveyors are on edge after other Christmas markets were abruptly shut down in Germany’s Bavaria region, which includes Nuremberg, home of one of the biggest and best-known markets. Stunned exhibitors in Dresden had to pack up their goods when authorities in the eastern Saxony region suddenly imposed new restrictions amid soaring infections. Austria’s markets closed as a 10-day lockdown began Monday, with many stall owners hoping they can reopen if it’s not extended.

Markets usually attract elbow-to-elbow crowds to row upon row of ornament and food sellers, foot traffic that spills over into revenue for surrounding hotels and restaurants. This year, the crowds at Frankfurt’s market were vastly thinned out, with the stalls spread out over a larger area.

Heiner Roie, who runs a mulled wine hut in the shape of a wine barrel, said he’s assuming he will see half the business he had in 2019. A shutdown would cause “immense financial damage — it could lead to complete ruin since we haven’t made any income in two years, and at some point, the financial reserves are used up.”

But if people have a little discipline and observe the health measures, “I think we’ll manage it,” he said.

Next door, Bettina Roie’s guests are greeted with a sign asking them to show their vaccination certificates at her stand serving Swiss raclette, a popular melted cheese dish.

The market “has a good concept because what we need is space, room, to keep some distance from each other,” she said. “In contrast to a bricks-and-mortar restaurant, they have their building and their walls, but we can adjust ourselves to the circumstances.”

The extended Roie family is a fifth-generation exhibitor business that also operates the merry-go-round on Frankfurt’s central Roemerberg square, where the market opened Monday. 

Roie said it was important to reopen “so that we can bring the people even during the pandemic a little joy — that’s what we do, we bring back joy.”

The latest spike in COVID-19 cases has unsettled prospects for Europe’s economic recovery, leading some economists to hedge their expectations for growth in the final months of the year.

Holger Schmieding, chief economist at Berenberg Bank in London, has cut his forecast for the last three months of the year in the 19 countries that use the euro from 0.7% to 0.5%. But he noted that the wave of infections is having less impact across the broad economy because vaccinations have reduced serious illnesses and many companies have learned to adjust.

That is cold comfort to Germany’s DEHOGA restaurant and hotel association, which warned of a “hail of cancellations” and said members were reporting every second Christmas party or other special event was being called off.

Other European countries where the pandemic isn’t hitting as hard are returning to old ways. The traditional Christmas market in Madrid’s Plaza Mayor, in the heart of the Spanish capital, is slated to open Friday at the size it was before the pandemic.

It will have 104 stalls of nativity figures, decorations and traditional sweets in a country where 89% of those 12 or older are fully vaccinated. Last year, it had half the number of stalls and restricted the number of people allowed in the square. Masks and social distancing will remain mandatory, organizers said.

In Hungary’s capital of Budapest, Christmas markets have been fenced off and visitors must show proof of vaccination to enter.

Gyorgy Nagy, a producer and seller of handmade glazed crockery, said the restrictions initially stirred worries of fewer shoppers. But business has been good so far.

“I don’t think the fence is bad,” he said. “At the beginning, we were scared of it, really scared, but I think it’s fine. … I don’t think it will be a disadvantage.”

Markets opening reflects a broader spectrum of loose restrictions in Hungary, even as new COVID-19 cases have exceeded peaks seen during a devastating surge last spring. More infections were confirmed last week than in other week since the pandemic started.

A representative for the Advent Bazilika Christmas market said a number of its measures go beyond government requirements, including that all vendors wear masks and those selling food and drinks be vaccinated.

Bea Lakatos, a seller of fragrant soaps and oils at the Budapest market, said that while sales have been a bit weaker than before the pandemic, “I wasn’t expecting so many foreign visitors given the restrictions.”

“I think things aren’t that bad so far,” she said this week. “The weekend started particularly strong.”

In Vienna, markets were packed last weekend as people sought some Christmas cheer before Austria’s lockdown. Merchants say closures last year and the new restrictions have had disastrous consequences.

“The main sales for the whole year are made at the Christmas markets — this pause is a huge financial loss,” said Laura Brechmann who sold illuminated stars at the Spittelberg market before the lockdown began. “We hope things will reopen, but I personally don’t really expect it.”

In Austria’s Salzkammergut region, home to ski resorts and the picturesque town of Hallstatt, the tourism industry hopes the national lockdown won’t be extended past Dec. 13 and it can recover some much-needed revenue.

Last winter’s extended lockdowns cost the tourism board alone 1 million euros ($1.12 million) just in nightly tourist tax fees during that period — not to mention the huge financial losses sustained by hotels, restaurants and ski resorts.

“Overall, I do think that if things open up again before Christmas, we can save the winter season,” said Christian Schirlbauer, head of tourism for the Dachstein-Salzkammergut region. “But it will depend on whether or not the case numbers go down.” 

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As Gas Prices Spike, Americans Give Electric Cars a Closer Look 

Persistently high prices for gasoline are frustrating many Americans and causing a political headache for the administration of President Joe Biden, but they also might be accelerating the process of transitioning the country to more widespread use of vehicles that run on renewable energy — particularly electricity. 

 

Experts say that sales of electric vehicles, or EVs, tend to rise when fuel prices do, though they cautioned it’s difficult to draw a straight line from prices at the pump to car purchases. 

 

“People buy electric cars for lots of reasons, so they’re not completely dependent on gas prices, but that’s certainly reinforcing it,” said Genevieve Cullen, president of the Electric Drive Transportation Association, a trade group representing manufacturers of electric vehicles.

 

An estimated 468,000 new EVs were sold in the U.S. from the beginning of the year through September, according to data collected by Atlas Public Policy, a group that tracks the market for EVs. That represents a 45%  increase over the 323,000 EVs sold during the entirety of 2020. 

 

Looking solely at the month of September 2021, U.S. consumers bought 57,000 new EVs. That was 63% more than the 35,000 sold in September of 2020, and a 90% increase over the 30,000 sold in September 2019. 

Gas prices make EVs attractive 

 

According to the Bureau of Labor Statistics, the cost of one kilowatt hour of electricity in the United States rose from 13.5 cents in October 2020 to 14.2 cents in October 2021, an increase of 5.2%. By contrast, the BLS found the average cost of a gallon of gas rose from $2.23 in October 2020 to $3.48 in October 2021, a 56.1% increase. 

 

“High gas prices are tough on Americans driving gasoline vehicles,” said Luke Tonachel, director of clean vehicles and fuels for the Natural Resources Defense Council. “The volatility in the global price of the oil used to make gasoline is a constant worry.

 

In the U.S., though, the structure of the electricity market keeps prices from increasing sharply. 

 

“Electricity prices are regulated, and therefore quite stable,” said Tonachel. “An EV driver can expect to pay a quarter or less as much per mile as [someone] driving a gasoline vehicle.” 

 

US EV sales expected to rise further 

While electric vehicle sales are rising rapidly, the numbers begin from a low baseline. As recently as five years ago, EV sales accounted for less than 1% of new vehicles sold in the U.S. That figure has surged to what is expected to be about 4% this year, and the real increase is on the horizon. 

 

LMC Automotive, which tracks vehicle sales and estimates the future of the market, projects that by 2030, EVs, including purely electric cars and plug-in hybrid cars that can run on both electricity and gasoline, will make up 34.2% of new vehicle sales in the United States. 

 

That transition will continue, as the federal government increasingly crafts policies meant to bring the country in line with President Biden’s promise, made at the recent United Nations Climate Conference, to cut U.S. greenhouse gas emissions to about half of their 2005 levels by 2030. 

 

The Environmental Protection Agency announced this summer it would structure emissions guidelines for cars powered by internal combustion engines in order to “speed the transition of the light-duty vehicle fleet toward a zero emissions future.” 

 

“We’re going to see the car market accelerate the shift to EVs when the U.S. EPA sets emission standards that zero out pollution from vehicles,” said Tonachel. “That’s ultimately what we need to address the climate crisis, and it will result in cheaper mobility, too.” 

 

Another factor is the continued rollout of a network of charging stations across the country. The Energy Department currently lists more than 52,000 stations in the country, with upwards of 100,000 outlets. The infrastructure bill that President Biden recently signed into law contains $7.5 billion aimed at increasing that number by a factor of 10 within the next decade. 

 

Broader future for renewables 

 

There also is reason to believe that increased electrification of the transportation system will drive the adoption of renewables in other aspects of day-to-day life, as well. That’s because, as car battery technology continues to improve, it will make it easier and cheaper to store energy generated by wind and solar power sources. 

 

“Electrification of transportation is the key to growing renewables in the power sector,” said Cullen, of the Electric Drive Transportation Association. “Because batteries are one of the few effective and portable ways to store electricity. They’ll enable utilities and other power generators to manage demand so that you can save up excess wind or solar.” 

 

She added, “Battery storage is the path there. Electric transportation, this mobile electrical load, has the ability to be a grid asset.” 

 

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Canada ‘Extremely Disappointed’ That US to Raise Softwood Lumber Duty

The United States has decided to almost double the duties on Canadian softwood lumber from most producers to 17.9%, Canadian Trade Minister Mary Ng said on Wednesday, adding that Canada is “extremely disappointed.”

The current rate for most companies is about 9%.

Ng said that the U.S. Department of Commerce on Wednesday issued the final results of the second administrative reviews of its anti-dumping and countervailing duty orders regarding certain softwood lumber products from Canada.

“Canada is extremely disappointed that the United States has decided to increase the unfair duties it is imposing on Canadian softwood lumber from most producers to 17.9%,” Ng said in a statement. “Canada calls on the United States to cease imposing these unwarranted duties on Canadian softwood lumber products.”

The U.S. Commerce Department and the U.S. Trade Representative’s office did not respond to a request for comment on Wednesday night. Earlier this year, Washington announced plans to double the duties on imports of Canadian lumber and requested a dispute panel on Canada’s dairy import quotas.

Canada’s softwood lumber industry is a key component of the country’s forestry sector, which contributed more than $25 billion to the nation’s gross domestic product in 2020 and employed nearly 185,000 workers. The British Columbia Lumber Trade Council also expressed disappointment.

Ng said that “following completion of any legal challenges under the Canada-United States-Mexico Agreement’s (CUSMA) Chapter 10 or in U.S. courts, these new anti-dumping and countervailing duty rates will apply retroactively to softwood lumber exports to the United States from companies that were subject to the second administrative reviews.”

“These unjustified duties harm Canadian communities, businesses, and workers,” she said, adding: “They are also a tax on U.S. consumers.” 

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Americans Prepare for Holidays as Inflation Squeezes Wallets 

Tawanda Carter is a school librarian in New Orleans, Louisiana. She said preparing for the holidays has presented a unique set of challenges this year, a sentiment shared by millions of Americans.

“Food prices are higher, and a lot of items aren’t even in stock,” she said, as she gets ready to celebrate Thanksgiving with her family in Atlanta, Georgia. “We’ve been keeping an eye out for sales and also thinking about new dishes to make up for the traditional ones we might not be able to eat this year.”

Across the United States, prices on essentials such as groceries and gas are rising at a pace unseen in a generation. Experts say the cause is a mix of worker shortages, supply chain issues and stimulative economic policies enacted to support families and financial markets during the global pandemic. For many, however, the timing of the price increases couldn’t be worse as families prepare for their first holiday gatherings since the rollout of the coronavirus vaccine.

“The price of fresh produce has doubled,” said Maria Gallagher-Venable, co-owner of a pet-sitting business in a New Orleans suburb. “Meat prices are climbing every day, too. We’re trying to do all our Christmas shopping online to avoid shipping delays, but those prices are higher than usual, as well, and the cost of gasoline has already meant finances are tighter.”

“I went to the grocery store to buy a head of iceberg lettuce and it was $3.69!” said local restaurant owner Shane Finkelstein. “It’s usually a dollar. It costs more to cook at home than it used to. It costs more to eat at a restaurant than it used to. And I don’t think this is going to change. Restaurants need to charge more, or they’re going to go out of business. This is just how things are now.” ​

A worker shortage 

Gallagher-Venable thinks the worker shortage is largely the result of greedy companies unwilling to share profits with their workers.

“The minimum wage is a joke in this country, and people are tired of working like dogs just to stay in debt,” she said.

The Bureau of Labor Statistics reported that as of last month, approximately 3 million fewer people in the U.S. were looking for work than in February 2020, the month before the pandemic began. While there’s no denying the economy faces a shortage of workers, the underlying cause is still under debate.

Megan Forman co-owns several bakeries in New Orleans. Labor shortages aren’t only being seen in the service industry, she said. A lack of workers throughout the supply chain is causing prices to fluctuate.

“When you don’t have enough employees, you can’t produce as much as you want,” she said. “And that’s not just at our bakery. When farmers can’t hire enough workers, they can’t plant and harvest enough. When trucking companies can’t hire enough drivers, they can’t ship as much.”

Economists have said that after accruing savings throughout the pandemic, Americans are eager to purchase goods and services again. Many businesses, however, have been unable to match the demand.

“Thanksgiving is one of the biggest holidays of the year for bakeries, and we’re returning to pre-pandemic sales,” Forman said. “But the ability for us to get the ingredients and supplies we need — it’s like the Wild West. So unpredictable.”

So, too, are the prices of those ingredients and supplies. Forman said these days one seller will offer eggs at $30 per case, while another has the same eggs priced at $17. The next day, she said, things can swing drastically.

“We need paper cups for our coffee, but they’re so difficult to find, or expensive when we do find them,” she said. “Everything is like that now. There’s high demand and not enough supply, so we’re getting charged more for what we need to run our bakery.” 

Getting lean 

For a while, Forman said she attempted to absorb the costs rather than passing them on to her customers. That couldn’t last, however.

“It got more expensive to purchase ingredients. It got more expensive to hire staff. And so, eventually, we need to raise the prices of what we sell, or we’re going to go out of business.”

In addition to raising prices, many business owners are reconsidering their business models and seeking ways to become more efficient. Forman, for example, said she’s begun training employees to do both “front of house” work, such as serving customers, as well as “back of house” work, such as food preparation and dishwashing. She’s also finding ways to operate at capacity with fewer staff members by, for example, making breakfast sandwiches ahead instead of offering them made-to-order.

“I think it’s forcing a lot of small companies to become better businesses,” said Grant Estrade, co-owner of a gardening supply shop and farm outside New Orleans. Estrade said that without a regular supply of employees, business leaders must evaluate what is the most profitable thing to pursue with the limited resources they have.

That, he said, can make a company leaner and more efficient. Estrade said he’s dropped parts of his business he can’t do right now and instead sought partnerships with other small businesses to do some of that work.

“If we make great soil but we don’t have the staff to deliver it, I can pay another small business to deliver it for us,” he said. “It’s economical. Maybe that’s what we should have been doing all along.”

A new way

It’s not just businesses that are reconsidering how they operate in a changing economy. Individual Americans are also looking to adapt as the cost of the holidays rises.

Rebecca Urrutia is a mother of four young children in Tolland, Connecticut. As she looks ahead to holiday gift shopping, she’s certain product shortages, shipping delays and increased prices mean the status quo will no longer work for her family.

“Our holiday shopping looks a little different this year,” she said. “We’ve decided to scale back and to shop at local bazaars, thrift shops and community share sites instead of buying brand new items for all of our shopping.”

Urrutia sees it as a silver lining that she hopes other Americans will embrace this season, she said.

“I think, after the pandemic, many of us are choosing to live more simply and to be grateful for what we have.”

Tawanda Carter, the school librarian in New Orleans, said she’s seeing something similar in her friend circle.

“A lot of us are reevaluating what we need versus what we want in life,” Carter said. The rising cost of gasoline, she said, has her thinking more about climate change and her own health. She decided to purchase a bicycle and use it for many of her daily trips. She’s living more like she imagined her great-grandmother and grandmother might have lived, she said.

“They told me their adage was ‘use it up, wear it out or make do,'” Carter said. “And our generation always talks about ‘reduce, reuse and recycle.’ I’m trying to use the current situation as an opportunity to live by a combination of both sayings.” 

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Will Modi’s Backtracking on Farm Laws Appease Indian Farmers?

Indian farmers have welcomed Prime Minister Modi’s decision to repeal three controversial farm laws that had led to the longest and largest protest against his government. However, as Anjana Pasricha reports, the farmers plan to continue pressure on the government to meet other key demands.

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US Jobless Benefit Claims Drop to 52-year Low

First-time claims for U.S. unemployment compensation dropped sharply last week to a 52-year low, easily falling below the figure recorded at the start of the coronavirus pandemic that has played havoc with the U.S. economy over the last 20 months, the Labor Department reported Wednesday

A total of 199,000 jobless workers filed for assistance last week, down 71,000 from the revised figure of the week before and the lowest recorded figure since November 1969, the government said. The new weekly figure was also well below the 256,000 total in mid-March of last year when the pandemic first swept into the country and employers started laying off workers by the hundreds of thousands.

The new figure was an indication the U.S. economy, the world’s largest, remains on a recovery path from the worst economic effects of the coronavirus pandemic.

The advance is occurring even as President Joe Biden and Washington policy makers, along with consumers, voice concerns about the biggest increase in consumer prices in three decades and supply chain issues that have curtailed delivery of some products to retail store shelves.

The declining number of claims for unemployment benefits shows that many employers are hanging on to their workers even as millions have quit jobs to move to other companies offering higher pay and more benefits.

U.S. employers added 531,000 jobs in October, the biggest monthly gain in three months and the unemployment rate dropped to 4.6%. But the U.S. economy is still short more than four million jobs since February 2020.

Even as consumers worry about higher food and fuel prices, President Biden said Tuesday, “We’re experiencing the strongest economic recovery in the world.”

“Even after accounting for inflation, our economy is bigger and our families have more money in their pockets than they did before the pandemic,” Biden said. “And America is the only major economy in the world that can say that.”

About 7.4 million workers remain unemployed in the United States. There are 10.4 million available jobs in the country, but the skills of available workers often do not match what employers want, or the job openings are not where the unemployed live. In addition, many of the available jobs are low-wage service positions that the jobless are shunning.

The annual size of the U.S. economy — nearly $23 trillion — exceeds its pre-pandemic level as it recovers faster than many economists had predicted during the worst of the business closings more than a year ago.

The Federal Reserve, the country’s central bank, is curtailing its year-plus support for the U.S. economy during the worst of the pandemic. It announced earlier this month it would cut its $120-billion-per-month purchase of Treasury investments and mortgage-backed securities by $15 billion by the end of November. In addition, the Fed is reducing purchases to $90 billion per month in December but left its benchmark interest rate unchanged.

How fast U.S. economic growth continues is unclear. The delta variant of the coronavirus continues to pose a threat to the recovery, with more new cases being recorded again after the number had declined in recent weeks.

About 90,000 new cases have been added in recent days, up from about 75,000 daily in recent weeks. The number of deaths each day has been dropping, to about 1,000 a day, from the 2,000 total of a few weeks ago.

About 60 million eligible Americans remain unvaccinated against the coronavirus, a figure Biden says is “unacceptably high.” The president has mandated that 84 million workers at companies with 100 or more employees get vaccinated by January 4 or be tested frequently, but the order is being contested in a raft of lawsuits that have yet to be decided.

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Economists: China Investment Model in Africa Gaining Public Support

Economists say China’s model of investment in Africa is gaining public support, despite the debt burden it imposes on many countries. According to economic experts and the locals, the United States’ multibillion dollar investments in Africa are less visible and make less of an impact on people’s daily lives. Victoria Amunga reports from Nairobi.
Videographer: Amos Wangwa

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Burkina Faso Internet Shutdown Continues into Fourth Day

The shutdown of internet access via mobile phone networks that began Saturday dragged on for a fourth day Tuesday. The government said in a statement the shutdown is in the interest of national defense and public security and will last until around 10 p.m. tonight.

VOA talked to some Burkinabes on the streets of Ouagadougou to ask how the shutdown was affecting them and what they thought of the government’s decision.

Alexi Sawadogo, a physician, spoke outside a bank on one of the city’s busy boulevards. He said he was there to check his account balance as the shutdown meant he could no longer do so online. 

“It disconnects us from our friends who are outside the country, with whom we communicate regularly,” he says. He notes that he understands that it is because of the French convoy that was blockaded in the north, but says insecurity is not a valid reason and that the government needs to review its strategy. 

The shutdown has come in the wake of protests in recent days that have blocked a French military supply convoy that is attempting to travel from Ivory Coast to Niger. Protesters say they want an end to French military intervention in the regional war against Islamist militants. 

There have also been protests against the government’s handling of security, after a terrorist group believed to be associated with al-Qai da killed more than 50 military police in an assault on a base in northern Burkina Faso on November 14th. 

Ali Dayorgo, a university student, said the shutdown has affected his ability to work and learn the latest news.

He says he doesn’t understand why the shutdown is happening, but he hears the voice of the Burkinabe youth. “I feel the anger of the youth,” he expressed, adding that even if he doesn’t join protests against insecurity, he supports them.

A funeral for some of the victims of the attack is taking place in Ouagadougou today. 

Drabo Mahamadou is the national executive secretary of the “Save Burkina Faso Movement,” one of the protest groups that is calling for President Roch Kabore to resign. He said they have called on the population to attend Tuesday’s funeral and to attend a protest on Saturday.

He says, because the government is insensitive to pain, we are calling on the population to come out en masse on the 27th. We want [protesters] to prove that this government is not helping Burkina Faso. It is the government that is causing harm to the Burkinabé people.

A government spokesperson could not be reached for comment.

Eloise Bertrand is a research fellow at the University of Portsmouth who focuses on Burkina Faso. She thinks the restrictions on the internet are unwise; pointing out that “this shutdown may well backfire against the government. We can see that civil society groups and stakeholders who were not really involved in protests against the French convoy are annoyed and angered by this internet shutdown.”

Reports suggest the French military convoy is now waiting in the town of Zinaire, about 30 kilometers north of the capital. Protests are also said to be taking place in the town.

With the demonstrations continuing, it remains to be seen if the government will lift the internet shutdown tonight. Further protests are scheduled for Saturday.

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US, 5 Other Countries to Tap Oil Reserves to Ease Consumer Costs

The United States and five other countries said Tuesday they plan to tap their strategic oil reserves for refining into gasoline and other energy products in a coordinated effort to cut rising costs that their consumers are paying.

The White House said that over the coming months through April 2022 the U.S. would make 50 million barrels of oil available for sale to refiners from its Strategic Petroleum Reserve that currently holds 621 million barrels of oil in four salt caverns along the Gulf of Mexico coastline.

The U.S. oil release by itself – and spread out over several months — may not make much difference in the cost of gasoline that American motorists are now paying – a national average of $3.40 a gallon (3.8 liters), which is the highest figure since 2014.

But an accurate possible cost reduction could not immediately be calculated because it was not known how much oil the other five countries – China, Japan, South Korea, India and Britain – plan to release from their reserves.

Also, key oil producers in the Mideast, led by the 13-member Organization of the Petroleum Exporting Countries, could cut their own production to offset a flood of new oil on the world market from the six countries. Such an offsetting cut in the amount of oil on the world market could keep oil more or less at its current global Brent benchmark crude price of about $80 a barrel.   

The higher cost of gasoline and home heating for the upcoming winter months in the U.S. has contributed to the biggest inflation surge in consumer prices in the U.S. in 31 years – 6.2% at an annualized rate in October.  

The higher energy and food costs have also led to sharply declining voter approval ratings for U.S. President Joe Biden 10 months into his four-year White House term and less than a year before congressional elections across the country. The high inflation rate is a distinct political worry for the Democratic president and his political allies in Congress as they try hold on to their narrow control of both the Senate and House of Representatives.

In making the oil release announcement, the White House said, “American consumers are feeling the impact of elevated gas prices at the pump and in their home heating bills, and American businesses are, too, because oil supply has not kept up with demand as the global economy emerges from the pandemic.”

“That’s why President Biden is using every tool available to him to work to lower prices and address the lack of supply,” the statement said. “The president stands ready to take additional action, if needed, and is prepared to use his full authorities working in coordination with the rest of the world to maintain adequate supply as we exit the pandemic.”

The Biden administration is also looking at potential price manipulation in oil and gas markets with a Federal Trade Commission investigation.  

The coordinated international release of oil would be the first one since 2011, when the U.S. and 27 other countries replaced about 140 million barrels in output lost as a result of three months of conflict in Libya.

Under the U.S. oil release plan, the U.S., starting next month, will trade 32 million barrels of oil with buyers who will agree to send the same amount back to the government sometime between 2022 and 2024, to replenish the reserve.

The other 18 million barrels are being released as part of a previously authorized sale from the reserve, which the Energy Department is now moving to do earlier than first planned.

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Biden Reappoints Jerome Powell as Federal Reserve Chair

U.S. President Joe Biden on Monday reappointed Jerome Powell to a second term as chair of the country’s central bank, the Federal Reserve, saying that Powell has played a pivotal role in helping the United States recover from the worst of the economic downturn caused by the coronavirus pandemic.

Biden’s reappointment of Powell, 68, to one of the most important economic policy positions in the world, ends weeks of speculation in financial markets and in Washington political circles. Some progressive Democrats in Congress had pushed Biden to name Fed Governor Lael Brainard to head the Fed, but the president instead named her as vice chair.

Biden’s appointment of Powell, a Republican and former private equity executive, to another four-year term is a rare instance in which he renamed a key official first appointed by his Republican predecessor, former President Donald Trump, as the Fed chief.

Financial markets greeted the Powell reappointment favorably, with all major U.S. stock indexes up sharply in early trading Monday.

In politically fractious Washington, Powell enjoys wide bipartisan support and is expected to again win Senate confirmation. Of the 84 lawmakers who voted for him four years ago, 68 of them are still in office, equally split between Democrats and Republicans.

Powell was first named to the Fed’s seven-member policy-making board a decade ago by then-President Barack Obama, another Democrat, before being elevated to Fed chair by Trump. Biden also has three other current or upcoming vacancies to fill on the Fed board, which broadly sets economic policy for the U.S., the world’s largest economy.

Biden said the U.S. has made “remarkable progress over the last 10 months in getting Americans back to work and getting our economy moving again,” and praised the work of Powell and Brainard. Under Powell, the Fed provided stimulus money to boost the recovery.

“As I’ve said before, we can’t just return to where we were before the pandemic, we need to build our economy back better, and I’m confident that Chair Powell and Dr. Brainard’s focus on keeping inflation low, prices stable, and delivering full employment will make our economy stronger than ever before,” Biden said in a statement.

“Together, they also share my deep belief that urgent action is needed to address the economic risks posed by climate change and stay ahead of emerging risks in our financial system,” the president said.

“Fundamentally, if we want to continue to build on the economic success of this year, we need stability and independence at the Federal Reserve – and I have full confidence after their trial by fire over the last 20 months that Chair Powell and Dr. Brainard will provide the strong leadership our country needs,” Biden said.

U.S. Treasury Secretary Janet Yellen, herself a former Fed chair, praised Powell’s reappointment, as did several Republican senators.

“The steady leadership of Chair Powell & the Federal Reserve helped ensure our economy was able to recover from a once-in-a-generation health & economic crisis,” Yellen said. “I’m pleased our economy will continue to benefit from his stewardship, & the expertise & experience of Lael Brainard.”

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