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EU Nears Employment Recovery While US Lags Behind

Impacted by the COVID-19 crisis, neither the United States nor the European Union is at pre-pandemic employment levels. The E.U., however, is closer to a full recovery than the U.S., according to BRINK analysis of OECD and U.S. Bureau Labor and Statistics data.

OECD data show that the European Union’s employment rate dropped less than 1% during the pandemic and has already recovered to nearly pre-pandemic levels. According to European Commission President Ursula von der Leyen, the limited impact was mainly “because governments were quick to expand their national job-retention schemes.”

The United States, on the other hand, suffered a substantial dip in the employment rate and — while its increase from 2020 is more dramatic than the E.U. — increased retirements among the great resignation and a mass refusal to work under “poor conditions” have contributed to a slow recovery in 2021, leaving 7.4 million Americans unemployed.

U.S. Mortgage Debt Rises to $11 Trillion

American household debt has risen to nearly $16 trillion, in large part driven by over $11 trillion in mortgage debt, shows a new report from The Federal Reserve Bank of New York. The record-high debt comes as inflation and interest rates also hit new highs.

Mortgage debt — which rose by $250 billion in the first quarter of 2022 — makes up 71% of all household debt. Mortgage originations have increased by $197 billion since the start of the pandemic, a result of Americans relocating from cities and buying homes in the suburbs. This urban flight, driven by a desire for more space amid lockdowns and remote work, has also pushed the median home price up by 30% over the last two years.

Non-housing debt, such as student loans, automobile loans and credit card debt, grew by $17 billion in the first quarter, largely due to a $14 billion increase in student loans. Overall, household debt has increased by nearly $2 trillion since before COVID-19.

Finland’s Support for NATO Soars

An overwhelming majority of Finns (76%) support joining the North Atlantic Treaty Organization (NATO) since Russia’s attack on Ukraine, whereas previously, a majority of Finns opposed joining the intergovernmental military alliance, a recent Yle poll reports.

As Russia’s invasion of Ukraine continues into a third month, the number of Finnish adults in favor of NATO membership has grown from 53% in February to 62% in March, and 76% in May. Support was strong across political parties, with the strongest support among backers of the Swedish People’s Party and the Centre.

Finland and Sweden, traditionally neutral countries, announced their bids to join NATO this week (though Turkey has blocked the start of the talks for both countries). Finland’s membership would double the alliance’s land border, adding the more than 800 miles of border that Finland shares with Russia and additional support in the Baltic Sea.

Climate Change Causes Heat Waves in India and Pakistan

Extreme heat waves have engulfed India and Pakistan since March, with temperatures rising to up to 122 degrees Fahrenheit (50 degrees Celsius), according to NASA. The temperatures, which are higher than average, are a result of climate change.

The effects of the heat waves include death, illness, reduced crop yields, poor air quality, and one of the worst electricity shortages in more than six years as power demands go up. While heat waves are common in the region this time of year, the number of spring heat waves has been increasing as global warming intensifies.

The deadly heat waves have also caused India — the world’s second-largest wheat producer — to ban wheat exports. India initially planned to fill the gap left by Ukraine and Russia, which together export more than a quarter of the world’s wheat. This and other factors have driven up global food prices — agricultural prices are up 41% compared to January 2021, with wheat prices up by 60%.

Russian Invasion Hurts Trade with Europe and Asia

Russia’s ongoing invasion of Ukraine will particularly affect the economies of neighboring countries in Eastern Europe and Central Asia, a new analysis by Statista shows. Both regions are more heavily dependent on Russia for trade in terms of GDP than other partners, like China (which imported $57 billion in Russian goods in 2020) or the U.K. ($24.5 billion in imports).

Belarus is the country most dependent on Russian exports, with nearly half of its imports coming from Russia (49.6%) — nearly 50% of its GDP. Armenia is a distant second, with Russian trade equivalent to 17% of its GDP. Neither Belarus nor Armenia voted in support of the March U.N. resolution to condemn Russia for its invasion of Ukraine.

Sudan, which imports Russian weapons, wheat, seed oils and oil, is the only country with a significant share of GDP impacted that is not from Eastern Europe or Central Asia.

The crisis in Ukraine is estimated to set back economic recovery from the pandemic, potentially causing a recession in Europe. Ukraine’s economy is forecast to contract by 35% as a result of its attacks, while Russia’s could decline by 8.5%.

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