The most important events and reports on the economy, central banks and politics from the Dow Jones Newswires program
Scholz: NATO will defend all of its members
Chancellor Olaf Scholz (SPD) has warned Russia not to target other countries after the attack on Ukraine. The Western allies “agree to prevent this with all the means at our disposal,” said Scholz in a televised speech on Thursday. Russian President Vladimir “Putin should not underestimate NATO’s determination to defend all of its members”.
US economy grows as expected in 4Q – GDP up 7.0%
Economic growth in the USA in the fourth quarter was marginally higher than previously assumed. According to the Bureau for Economic Analyzes in its second publication, the price-adjusted gross domestic product (GDP) increased by an annualized 7.0 percent compared to the previous quarter, after increasing by 2.3 percent in the third quarter. Economists polled by Dow Jones Newswires had forecast growth of 7.0 percent after an initial release had reported 6.9 percent.
Initial US jobless claims slightly lower than expected
Initial claims for US unemployment insurance decreased slightly more than expected for the week ended February 19, 2022, with the number of unemployment benefit recipients reaching the lowest level in more than 50 years. Compared to the previous week, the number of initial claims on a seasonally adjusted basis fell by 17,000 to 232,000, as announced by the US Department of Labor in Washington. Economists polled by Dow Jones Newswires had predicted a drop to 235,000.
Chicago Fed economic index rises in January
Economic activity in the US picked up in January. The Chicago Fed National Activity Index (CFNAI) rose to plus 0.69 points, the Federal Reserve Bank of Chicago said. For December, the index level was revised to plus 0.07 after a value of minus 0.15 had initially been mentioned. The more meaningful 3-month moving average deteriorated, trading at plus 0.42 in January. A revised reading of plus 0.46 was reported for December, having previously reported a reading of plus 0.33.
ECB/Schnabel warns of further rising inflation
According to ECB Director Isabel Schnabel, inflation in the euro area could initially continue to rise before falling over the course of the year. In a lecture at the London School of Economics, Schnabel warned that price pressure had recently become more widespread. “The broad-based nature of the recent inflation surprises, going well beyond the energy component, means that there is considerable uncertainty about when inflation will eventually peak,” she said.
Wheat price rises to record high
The price of wheat has risen to a new high due to the Russian invasion of Ukraine. On the European stock exchange Euronext, a ton of wheat for delivery in March was traded for 344 euros on Thursday afternoon. The price of corn also rose sharply. Ukraine is an important grain supplier on the world market. The country is the world’s fourth-largest exporter of maize and fifth-largest when it comes to wheat.
Habeck: Sanctions are intended to hit the Russian economy hard
According to Federal Economics Minister Robert Habeck (Greens), the European Union (EU) intends to adopt a “severe package of sanctions” that will significantly restrict Russian access to the European and American markets. The measures would “decouple the Russian economy from its industrial lead,” said Habeck in a statement in Berlin. They are designed in such a way “that they will hit the Russian economy hard and the German economy as little as possible”. Nevertheless, there are effects on German companies.
Defense Commissioner expresses doubts about the operational capability of the Bundeswehr
Against the background of the Russian invasion of Ukraine, the Bundestag Defense Commissioner Eva Hgl (SPD) has expressed doubts about the Bundeswehr’s readiness for action. “The Bundeswehr’s cold start capability is not what it should be,” Hgl told the Phoenix broadcaster on Thursday. She therefore called for a quick inventory.
Sweden and Finland refuse to join NATO despite Russia’s attack on Ukraine
Despite the “shock” over the large-scale Russian attack on Ukraine, Sweden and Finland still do not want to join NATO. Swedish Prime Minister Magdalena Andersson condemned the “very clear violation of international law and the European security order” on Thursday. Despite the debate about NATO membership fueled by the Ukraine crisis, Sweden is sticking to its stance of not joining the defense alliance, Andersson said.
Macron: Russian invasion of Ukraine is turning point in European history
French head of state Emmanuel Macron has described the Russian invasion of Ukraine as a “watershed moment in European history” and announced a tough reaction from the western community. “We will respond to this act of war without weakness and with calm, determination and unity,” Macron said in a speech to the nation on Thursday. The sanctions would affect “the military and economic sectors as well as the energy sector”.
China shows understanding for Russia’s “justified security concerns”.
After the Russian attack on Ukraine, China expressed understanding for Russia’s “well-founded security concerns”. “China has always respected the sovereignty and territorial integrity of all countries,” Chinese Foreign Minister Wang Yi said in a phone call with his Russian counterpart Sergey Lavrov on Thursday, according to the Foreign Ministry in Beijing. However, China is aware “that the Ukrainian question has a special and complicated history”.
+++ economic data +++
USA
New Home Sales Jan -4.5% to 801k (PROG: 803k)
New home sales Dec revised to 839,000 (previous: 811,000)
New build sales Dec Inventory 6.1 months
DJG/DJN/AFP/hab/brb
(END) Dow Jones Newswires
February 24, 2022 13:00 ET (18:00 GMT)