SHANGHAI (Reuters) -China lowered mortgage lending benchmark rates on Thursday as monetary authorities step up efforts to prop up the slowing economy, after data earlier in the week pointed to a darkening outlook for the country’s troubled property sector.
The cut to the one-year and five-year loan prime rates (LPR) followed surprise cuts by China’s central bank on Monday to its short- and medium-term lending rates, and came days after the central bank’s vice governor flagged more moves ahead.
With the property sector’s downturn seen persisting into 2022 and the fast-spreading Omicron variant dampening consumer activity, many analysts say those easing measures will be necessary, even as other major economies, including the United States, appear set to tighten monetary policy this year.
December economic data showed further weakening in consumption and the property sector, both major growth drivers.
At a monthly fixing on Thursday, China lowered its one-year loan prime rate (LPR) by 10 basis points to 3.70% from 3.80%. The five-year LPR was reduced by 5 basis points to 4.60% from 4.65%, its first cut since April 2020.
China’s central bank “should hurry up, make our operations forward-looking, move ahead of the market curve, and respond to the general concerns of the market in a timely manner,” People’s Bank of China Vice Governor Liu Guoqiang said on Tuesday, heightening market expectations for more stimulus.
All 43 participants in a snap Reuters poll had predicted a cut to the one-year LPR for a second straight month. Among them, 40 respondents also forecast a reduction in the five-year rate.
The cut to the 5-year rate suggested that “the Chinese authorities are keen to lower the cost of credit lending, so total credit growth is expected to rebound after the Spring Festival to ease the pressure on macro economy,” said Marco Sun, chief financial analyst at MUFG.
“China’s monetary policy still has some room for easing in the first half of this year, depending on the policy transmission effect and the growth target set by annual parliamentary meeting in March.”
Property firms’ shares and bonds jumped on Thursday following the LPR cut, as investors hoped it and other recent government measures would help to ease a funding squeeze in the sector that has seen a growing number of developers default on their debts.
Sheana Yue, China economist at Capital Economics, expects a further 20 bps cut to the one-year LPR in the first half of this year.
Interest rates on medium-term lending facilities (MLF) serve as a guide to the LPR. Market participants believe moves to the LPR should mimic adjustments to MLF rates.
Most new and outstanding loans in China are based on the one-year LPR. The five-year rate influences the pricing of mortgages.By:
A large genetic study tracking 150,000 subjects for over a decade has affirmed the direct causal link between drinking alcohol and developing cancer. The findings particularly link oesophageal cancers and head and neck cancers with alcohol consumption.
Although researchers have pointed to associations between alcohol consumption and cancer for many years it has been challenging to understand exactly just how directly alcohol causes cancer, as opposed to the many deleterious lifestyle factors that often coincide with drinking
Heavy alcohol use is often associated with poor diet, smoking, and lack of exercise – all factors known to increase risk of cancer. So some have suggested it is these factors that mostly account for any correlation seen between alcohol consumption and cancer.
This new study took a novel approach at investigating the alcohol-cancer link by focusing on gene variants known to be associated with lower levels of alcohol consumption.
Two common genetic variants are known to reduce a person’s tolerability to alcohol. They decrease a person’s ability to breakdown acetaldehyde, a toxic molecule produced when the body metabolizes alcohol. Prior studies have found the presence of these genetic variants serve as effective proxies for alcohol intake, as those with the mutations generally find the effects of drinking alcohol very unpleasant.
The study looked at genetic data from 150,000 Chinese subjects. The cohort completed several surveys outlining their drinking habits, and their general health records were followed for over a decade. Evaluation of subjective drinking habits confirmed those subjects with the low-alcohol-tolerability genes consumed significantly less alcohol than those without the gene variants.
In general, those subjects with one or two copies of either genetic variant were found to have between 13 and 31 percent lower risk of cancer. In particular, cancers previously known to be linked to alcohol, such as head and neck, oesophagus, colon, rectum and liver, were detected in high rates in those drinking more alcohol.
Further affirming the causal connection, the research found those with at least one copy of a low-alcohol-tolerability variant who still drank alcohol regularly displayed significantly higher rates of head and neck cancers and oesophageal cancers. This indicates the inability to break down acetaldehyde can be directly linked with an increased risk of cancer.
“These findings indicate that alcohol directly causes several types of cancer, and that these risks may be increased further in people with inherited low alcohol tolerability who cannot properly metabolize alcohol,” explained lead researcher on the project, Pek Kei.
A landmark 2018 study from Cambridge University researchers directly demonstrated how increased levels of acetaldehyde can directly damage DNA. Those findings offered a plausible mechanism to show how alcohol consumption can lead to cancer, particularly in those with an inability to effectively clear out acetaldehyde.
Darren Griffin, a geneticist from the University of Kent, called the new findings “solid” and said they were backed up by excellent data. He also pointed out this link between alcohol and cancer is just one of many ways alcohol can harm a person’s health.
“The study design inherently isolates the fact that it is alcohol consumption (not other lifestyle factors) that seem to cause the cancer,” said Griffin, who did not work on this current study. “Such studies have far-reaching implications for lifestyle choices, however, there are range of other ways in which alcohol can be damaging to the health.”
Other researchers commenting on the new findings are cautious to note the genetic variants studied are mostly found in Asian populations, so more work is needed to validate the association in European populations. Stephen Burgess, a statistician from the University of Cambridge, stressed this limitation while calling for more research looking into this association in other ethnicities.
“One limitation of this investigation is that the harmful effect of alcohol on cancer appears strongest in people who cannot break down alcohol efficiently.” said Burgess. “Inability to break down alcohol efficiently is a common trait in East Asian populations, but it is less common in European ancestry populations. Further research is needed to determine whether a similar harmful effect of alcohol on cancer holds in European ancestry populations.”
The new findings build on a robust body of evidence linking alcohol with increased cancer risk. A striking study last year from the International Agency for Research on Cancer estimated around 740,000 new cancer cases in 2020 could be directly attributed to alcohol consumption. That adds up to around four percent of all cancer cases worldwide.
With interests in film, new media, and the new wave of psychedelic science, Rich has written for a number of online and print publications over the last decade and was Chair of the Australian Film Critics Association from 2013-2015. Since joining New Atlas Rich’s interests have broadened to encompass the era-defining effects of new technology on culture and life in the 21st century.
Inflation is worrying chief executives globally, according to a surveyreleased Thursday by the Conference Board, a business research group, and data shared by the U.S. Bureau of Labor Statistics on Thursday backs their concerns.
Some 55% of CEOs expect higher prices to last until mid-2023 or beyond next year, according to the survey.
Rising inflation is the second-most common external business worry for CEOs, trailing only disruptions caused by Covid-19, after being just the 22nd most cited concern in Conference Board’s 2021 poll.
Supply chain bottlenecks were the most common explanation for the rising prices among CEOs, and 82% of respondents said their businesses were impacted by rising input costs, such as raw materials or wages.
The poll was conducted between October and November of last year among 917 CEOs in the U.S., Asia, Europe and South America.
Big Number9.7%. That’s how much the Producer Price Index, a measure tracking the prices manufacturers pay for goods, rose in 2021, the highest year-over-year increase since the Bureau of Labor Statistics began calculating the statistic in 2010. The PPI is considered a forward-looking indicator for consumer prices, meaning that the highest inflation U.S. consumers have faced in four decades could climb even further.
The Conference Board survey found that the U.S. has faced unique labor issues during the pandemic. Labor shortages were considered the top external threat to business by U.S. respondents as a record number of Americans quit their jobs, but were not higher than third on the list of CEOs from other countries.
A primarily remote workforce is also a mostly American phenomenon: More than half of American CEOs said that they expect 40% or more of their workforce to work remotely after the pandemic, compared with just 31% of CEOs from Europe and 17% of CEOs from Japan.
I’m a New Jersey-based news desk reporter covering sports, business and more. I graduated this spring from Duke University, where I majored in Economics and served as sports editor for The Chronicle, Duke’s student newspaper.
The 48 professional forecasters surveyed by the National Association for Business Economics were asked when the so-called core inflation rate (which leaves out food and energy prices) might return to the 2% range that the Federal Reserve targets (and that was commonplace before the pandemic).1 Right now the rate—as measured by the year-over-year change in the Bureau of Labor Statistics’ Personal Consumption Expenditures price index—is 4.1%, the highest since 1991.23
Most respondents said it would take at least until the second half of 2023, including more than a third who forecast 2024 or later. Since the survey was conducted in mid-November—before the omicron variant of COVID-19 was identified—it doesn’t account for how that news might impact their outlook.
The Federal Reserve has determined that roughly 2% is a healthy middle ground for inflation, one that enables a strong economy without hurting people’s buying power too much. The longer inflation stays hotter than that, the more likely the Fed is to do things to put a lid on it,4 like raise the benchmark federal funds rate. That rate influences all kinds of other interest rates, impacting the cost of borrowing on credit cards, mortgages, and other loans.5
Personal income grew 0.5% in October compared with the month before, as wage increases more than made up for declines in unemployment benefits from the government following the expiration of pandemic-era relief programs, the Bureau of Economic Analysis said Wednesday in its monthly report on income and spending.1
People were inclined to spend the extra pocket money, as inflation-adjusted spending accelerated for a third month, rising 0.7%. They also saved less of their disposable income—7.3%, compared with 8.2% in September—staying within pre-pandemic norms and a far cry from April 2020, when the saving rate hit 33.8%.23
All that extra money didn’t go as far as it might have, though. The report also showed core inflation (not including food and energy) rising to 4.1% from a year ago, compared with 3.7% in September, hitting its highest level since 1991. That was in line with what forecasters at Moody’s Analytics had expected, possibly signaling that elevated inflation isn’t going away anytime soon.
“Inflation is no doubt a headwind, but in October at least, it was not enough to stop consumers from spending,” economists at Wells Fargo Securities said in a commentary.
Every January, millions of individuals make New Year’s resolutions to lose weight or eat healthier, if not both. To achieve this goal, many individuals will begin strenuous exercise programs that incorporate too much exercise too soon, leading to fitness burnout or injury. Overtraining can actually prevent you from losing weight.
As a health neuroscientist, I have been studying the brain and cognitive mechanisms underlying dietary behaviours and the role exercise plays in helping people improve their diets for over 10 years.
Energy and exercise
The truth is that you simply cannot exercise away a poor diet and expect to lose weight (if that is your goal). Humans are very good at conserving energy and will account for any calories burned through exercise by consuming more calories later in the day or by being less physically active throughout the rest of the day.
That being said, you can — and should — use exercise to help you lose weight and maintain your weight loss. But not to offset calories consumed.
If you are looking to lose weight, the only way to do it is by controlling your calorie intake. The best and most effective way of doing that is limiting the consumption of ultra-processed foods — typical “junk foods” and fast-food meals. Even if you are not trying to lose weight, reducing ultra-processed food consumption is good for mental and physical health.
Regular exercise makes it easier to do this by improving the brain and cognitive processes that help us regulate junk food consumption, and by reducing stress. And the best part is, as little as 20 minutes of brisk walking is all you need to get the beneficial effects.
Why we over-consume junk foods
We know that we shouldn’t overeat candy, cookies, cake and chips, or drink sugary sodas. Diets that are high in these ultra-processed foods cause us to gain weight. But they are just so hard to resist.
Ultra-processed junk foods have been designed to be as tasty and rewarding as possible. When we are exposed to media advertisements, or actual food items (for example, chocolate bars in the checkout lane at grocery stores), brain activity in regions associated with reward processing increases. This reward-related brain activity results in increased food cravings and the drive to eat, even when we are not hungry.
A brain region known as the dorsolateral prefrontal cortex (dlPFC) helps us limit the consumption of ultra-processed foods by both decreasing activity in these reward regions to reduce food cravings and by initiating the cognitive processes needed to exert conscious control over food choices.
When using functional brain imaging to examine brain responses, neuroscientists have shown that increased activity in the dlPFC helps us control food cravings and select healthier food items by decreasing activity in the reward regions of the brain. Conversely, when activity in the dlPFC is decreased, we have a harder time resisting the temptation of appealing junk foods and will consume more snack food.
Exercise can help regulate food consumption
Exercise boosts brain plasticity, which is the brain’s ability to adapt its functions based on new input. Boosting brain plasticity makes it easier to change our habits and lifestyle. More and more evidence has shown that regular physical activity can increase prefrontal brain function and improve cognition.
These exercise-induced increases in prefrontal brain function and cognition makes it easier to regulate or limit our consumption of junk foods. And we can see the effects with as little as 20 minutes of moderate intensity exercise.
I have shown that people consume less ultra-processed food such as chips or milk chocolate after 20 minutes of moderate-intensity exercise (in our study, this was a brisk walk at 5.6-6.1 kilometres per hour on a treadmill with a slight incline). Research has also shown that both a single session of high-intensity interval training and a 12-week high-intensity aerobic exercise program can reduce preferences or appetite for high-calorie junk foods. Similar effects are seen when people engage in moderate aerobic exercise or strength training.
The key takeaway here is that regular exercise can reduce how much people want junk foods and improve their ability to resist the temptation of these appealing foods by improving brain function and cognition. This makes it easier to limit the consumption of these foods to achieve healthier eating and weight loss goals.
Exercise also helps reduce stress
When people are stressed, the body releases a hormone called cortisol, which activates what is known as the fight-or-flight response. When cortisol levels are high, the brain thinks it needs more fuel, resulting in increased cravings for sugary or salty ultra-processed foods.
Stress can also impact how the brain functions. Research has shown that stress can result in decreased activity in the prefrontal cortex and increased activity in reward regions of the brain when looking at pictures of food. This makes it harder to resist the temptation of appealing junk foods.
By offsetting the impact of stress on prefrontal brain function, exercise makes it easier to maintain your goals of healthier eating or reducing junk food consumption. Twenty minutes of brisk walking can help the prefrontal cortex recover from temporary changes in activity, like the ones seen when people are stressed.
Next time you are feeling stressed, try going for a brisk 20-minute walk. It could prevent you from stress-eating.
What exercise is best?
Researchers often get asked what is the best exercise and how much exercise to do.
At the end of the day, the best exercise is one you enjoy and can sustain over time. High-intensity interval training (HIIT), aerobic exercise, meditation and mindfulness, yoga and strength training are all effective in helping improve diet by targeting prefrontal brain function and reducing stress.
If you are beginning a new exercise routine this new year, ease into it, be kind to yourself, listen to your body and remember that a little goes a long way.
I am a CIHR and Canada First Research Excellence Fund (CFREF; BrainsCAN) funded Postdoctoral Fellow at Western University. My research examines the cognitive and neural factors that increase the likelihood individuals will over consume appealing “junk foods” (e.g., chips, chocolate, candy, fast-food meals)….
You’re not imagining it — many items are more expensive than they used to be. Some by a little, others by a lot. The United States isn’t in runaway inflation territory right now, but we’re definitely seeing some unusually pricey consumer goods.
If you haven’t noticed it in your day-to-day life, you’ve at least seen it in the headlines: From flights to lumber to chicken wings, prices are higher for many goods and services across the economy. Some people are pointing to these and other price increases as signs that worrisome inflation is on the horizon, arguing that the situation could soon rival what happened in the United States in the 1970s — a period of “stagflation” when the US saw high inflation coupled with slow economic growth and high unemployment.
But many economists and policymakers, including the chair of the Federal Reserve, think it’s likely transitory and that the economy might just be running a little hot right now. They say it will likely cool down as some of the post-pandemic bottlenecks and imbalances work themselves out. It looks like it’s already starting to happen in lumber. It’s also worth noting that last year we saw deflation in some areas of the economy, meaning prices went down, and so it makes sense that they would rebound.
Still, the inflation debate isn’t going to resolve itself anytime soon.
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So what’s happening right now? Consumer prices were up 5 percent from the previous year in May, according to the Bureau of Labor Statistics’ Consumer Price Index, which looks at prices for goods across the economy to get an idea of inflation. It’s a level of increase we haven’t seen since 2008, and one that we’ve only seen a handful of times since the early 1980s. Typically, the Fed targets a 2 percent inflation rate over the long term, though inflation has actually been running below that in recent years.
Prices went up by 0.6 percent in May alone. It’s quite a break from recent history: In the years following the Great Recession, the question many economists have been asking themselves is why inflation was so low.
What’s perhaps more interesting than the topline number, though, is what’s underneath it. Sometimes, major price increases or decreases in one specific area can sort of throw the overall picture out of whack. (That’s why you hear people talk about “core” inflation, meaning prices excluding food and energy, which can be volatile because of factors like weather and oil supply.) Recently, one area is causing a stir: used cars, whose price went up 7.3 percent in May, after going up 10 percent in April. Used car prices are now up nearly 30 percent since last year. If you take them out of the equation, the situation can look a little bit different.
To be sure, used cars aren’t the only story. The prices of plenty of items have crept up over the past year. Gas prices are up significantly over the past year due to a variety of factors including higher oil prices, a shortage of truck drivers, and a big increase in demand as people start driving and flying again. Gas prices fell significantly at the start of the pandemic, too, which is part of what makes the current increase seem so eye-popping.
Your overall life might be a little more expensive right now
The price of the stuff we buy changes all the time for a variety of factors, from supply chain issues to our changing habits.
The pandemic, of course, meant a disruption in supply chains and habits. All of a sudden, millions of Americans were stuck at home, hoarding toilet paper and clearing grocery store shelves. Items we might have once purchased at restaurants, we tried to recreate at home with ingredients from the supermarket.
And it became increasingly important to give our homes, where we spent a disproportionate amount of our time, an update to make them more livable. Our demand led to shortages in everything from pasta to couches. Covid-19 wreaked havoc on the supply side as well, as the virus spread among employees at meat plants and garment factories alike.
To look at what’s happened to prices for a number of goods, we assembled our own little shopping basket. For the most part, prices went up, according to consumer price data from NielsenIQ, which tracks US checkout prices at a wide variety of retailers, as well as supplementary data from the Bureau of Labor Statistics.
After toilet paper became readily available and people stopped stockpiling it as much, its price only rose about 3 percent from last year. Staples like milk and bread rose just slightly, 1.6 percent and 1.3 percent, respectively.
Meanwhile, some prices rose dramatically. As mentioned, used car prices are up nearly 30 percent, due to supply chain disruptions in the new car market, including a global shortage of semiconductor computer chips. Prices for some fruits, like strawberries and blueberries, are up 27 and 16 percent, respectively, as demand for the fruits surged during the pandemic and outpaced supply. Produce prices are always subject to high volatility since there are so many variables with planting and harvesting.
While the price changes of cheese varied widely by type (Brie down 6 percent, cheddar up 0.4 percent), overall the average unit price of cheese rose about 4 percent in the past year. That growth reflects the fact that many people bought more premium cheeses at home since they couldn’t get them out, according to NielsenIQ.
There were a few notable exceptions where prices actually declined since last year. The average cost per unit of flour and yeast, the ingredients to make last year’s ubiquitous homemade bread, fell 1 percent and 4 percent respectively. That doesn’t necessarily mean they’re getting less expensive, but rather that people are more likely to wait for sales than they were in spring 2020, when, if people could find staples in stock, they’d buy them regardless of price. Similarly, the price of eggs went down 4 percent. Prices for hard seltzer, the unofficial summer drink of 2019, declined nearly 6 percent, perhaps reflecting the increased selection available, with everyone from Budweiser to Topo Chico getting in on the action.
Lumber mania: An update
One of the biggest price surge stories of the year thus far has been lumber. (Vox has a full explainer on it here.) The lumber industry struggled in the years following the Great Recession, and production slowed accordingly. When Covid-19 hit, many in the industry assumed that the situation was only about to get worse, so they dialed back production even more. In the case of many mills and yards, economic shutdowns wouldn’t let them work anyway.
“They really dialed back, thinking that demand would fall, and the reality is that demand never slowed,” Dustin Jalbert, senior economist and lumber industry specialist at Fastmarkets RISI, told Vox in the spring.
It turns out lots of people stuck at home had the same idea to undertake home renovation and remodeling projects. They built out decks and garages and offices and found ways to make the houses they were stuck in 24/7 more pleasant. Others went looking for new homes, snapping up preexisting ones and starting to build.
The supply-demand imbalance threw much of the industry out of whack, and lumber prices soared. In the summer of 2019, 1,000 board feet of lumber (one board foot is 12x12x1 inches) out of a sawmill would have run somewhere in the $300 range, according to data from Fastmarket Random Lengths. In May, the same amount of wood was going for more than $1,500 at some points.
Now prices have begun to come down, falling back below $1,000. It could be a sign that the supply chain is starting to balance itself out and that the demand side, in the face of high prices, has taken a breath that’s allowed some of the supply side to catch up.
This is what some economists say is likely to happen across the economy as some of the post-pandemic kinks get worked out. The supply side will catch up with the demand side as supply chains normalize, and in some cases, pent-up demand will ease, too. “The prices that are driving that higher inflation are from categories that are being directly affected by the recovery from the pandemic and the reopening of the economy,” Federal Reserve Chair Jay Powell said at a press conference in June.
He specifically invoked lumber: “The thought is that prices like that have moved up really quickly because of the shortages and bottlenecks and the like. They should stop going up and at some point, in some cases should actually go down. And we did see that in the case of lumber.”
The big question mark right now is how long this will last
There is no denying that some prices are rising at a quicker clip than they have in recent years; the big unknown right now is how long this will go on. The Fed and the White House are betting that the current level of inflation is transitory, meaning this is a temporary bump as the economy rebounds from the pandemic, and soon things will settle back down.
In testimony before Congress in June, Powell laid out the factors contributing to recent inflation increases, including falling prices at the start of the pandemic, supply bottlenecks, the pass-through of oil and energy prices, and increased consumer spending accompanying reopening. “I will say that these effects have been larger than we expected, and they may turn out to be more persistent than we’ve expected, but the incoming data are very much consistent with the view that these are factors that will wane over time and then inflation will then move down toward our goals,” he said.
The big fear among some economists is that the US will see a repeat of the 1970s, when the country saw a sustained period of high inflation that was only brought to an end when the Fed took harsh measures and pushed the economy into a recession in the early 1980s. If inflation takes off and jobs and wages don’t go with it, then everyday items can become prohibitively expensive for many people. In the ’70s, for example, beef became super pricey. Sustained inflation can also reduce the value of savings.
Some more extreme corners even warn that the US could see runaway hyperinflation like what’s happened in places such as Argentina and Venezuela, where the value of their currencies has declined rapidly and it’s nearly impossible for people’s paychecks to keep up with skyrocketing prices.
Amid those concerns, it’s important to remember that the Fed is paying attention to inflation. If the economy really doesn’t settle down, the Fed has tools to fight it, such as raising interest rates. Fed officials have already moved up their expected timeline for increasing interest rates to 2023 from 2024, though forecasts can always change.
It’s understandable to worry about inflation — a scenario where prices go up and paychecks don’t isn’t one the country wants to see. But is it time to start hoarding gold under your mattress? Probably not. That post-pandemic vacation you wanted to take is probably going to run you a little more than you thought it would, at least for now. The good news is, compared to a year ago, it’s much safer in the US to take a vacation at all.