Tag Archives: taming

Big US job gains give Fed ‘a lot more work to do’ on taming inflation

The Federal Reserve will face more urgency in its fight to cool down the US economy with steep interest rate increases after the latest batch of labour market data showed an unexpected acceleration in jobs gains and strong wage growth.

The figures released on Friday eased concerns that the American economy was sharply slowing down or already in recession after two consecutive quarters of contraction in output this year. However, it will increase worries that high inflation may become entrenched as wages keep rising, requiring even more intervention by the central bank.

The Fed has already moved its main interest rate up from the rock-bottom levels of the coronavirus pandemic to a target range of 2.25 per cent to 2.5 per cent this year, including two consecutive 0.75 percentage point increases in June and July.

On the back of the latest jobs report, economists and Fed watchers say the likelihood of another aggressive upward move next month has risen, although the central bank will still be examining upcoming economic data closely, including inflation figures due next week.

“Today’s numbers should mollify recession fears but amplify concerns that the Fed has a lot more work to do, and we now think a 75 basis point hike in September looks likely. The inflation worries motivating the Fed will only be heightened by this jobs report,” Michael Feroli, a senior economist at JPMorgan, wrote in a note on Friday.

“Jobs haven’t slowed at all in response to Federal Reserve tightening. This is a double-edged sword,” added Michael Gapen, chief US economist at Bank of America, noting that while the chance of a “near-term recession is lower”, the “risk of a hard landing is rising”.

David Mericle, chief US economist at Goldman Sachs, said the report cleared up some “ambiguity” over the strength of wage growth in the US economy, suggesting it was not easing as much as the Fed might hope.

“The overall message is that wage growth is going sideways at a rate that is probably a couple of percentage points stronger than what would be compatible with achieving 2 per cent inflation”, which is the Fed’s long-held inflation target, he said. “The Fed has even further to go than we thought before today.”

Fed chair Jay Powell is expected to lay out his latest thinking on the path of US interest rates and the central bank’s strategy to bring down inflation at the annual Jackson Hole, Wyoming, conference set for late August.

During his last press conference in July, Powell said that “another unusually large increase” in interest rates in September “could be appropriate” but that decision had not been made.

“It’s one that we’ll make based on the data we see. And we’re going to be making decisions meeting by meeting,” he added.

Financial market moves may also be a factor in the Fed’s next step. Traders began pricing in expectations of higher interest rate increases after the jobs data, predicting that rates will peak in March at 3.64 per cent, compared with the 3.46 per cent expected prior to the report. Fed fund futures show the chances of a 0.75 percentage point increase in September have risen to 67 per cent, versus 33 per cent on Thursday.

While the strong jobs number increases pressure on the Fed, it was welcomed by the Biden administration, since it means a sharp economic downturn is less likely ahead of the November midterm elections.

It comes as Congress is preparing to vote on a $700bn package of measures designed to curb inflation by raising taxes on large corporations, reducing the cost of prescription drugs and bringing down the budget deficit — even though it would also boost spending on clean energy incentives in order to fight climate change.

“This bill is a gamechanger for working families and our economy. I look forward to the Senate taking up this legislation and passing it as soon as possible,” Biden said on Friday.

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Powell says taming inflation ‘absolutely essential,’ and a 50 basis point hike possible for May

Federal Reserve Chairman Jerome Powell affirmed the central bank’s determination to bring down inflation and said Thursday that aggressive rate hikes are possible as soon as next month.

“It is appropriate in my view to be moving a little more quickly” to raise interest rates, Powell said while part of an International Monetary Fund panel. “I also think there is something to be said for front-end loading any accommodation one thinks is appropriate. … I would say 50 basis points will be on the table for the May meeting.”

Powell’s statements essentially meet market expectations that the Fed will depart from its usual 25-basis-point hikes and move more quickly to tame inflation running at its fastest pace in more than 40 years. A basis point equals 0.01 percentage points.

At its March meeting, the Fed approved a 25-basis-point move, but officials in recent days have said they see a need to move more quickly with consumer inflation running at an annual pace of 8.5%.

“Our goal is to use our tools to get demand and supply back in synch, so that inflation moves down and does so without a slowdown that amounts to a recession,” Powell said. “I don’t think you’ll hear anyone at the Fed say that that’s going to be straightforward or easy. It’s going to be very challenging. We’re going to do our best to accomplish that.”

“It’s absolutely essential to restore price stability,” he added. “Economies don’t work without price stability.”

As Powell spoke, market pricing for rate hikes got somewhat more aggressive,

Expectations for a 50-basis-point move in May rose to 97.6%, according to the CME Group’s FedWatch Tool. Traders also priced in an additional hike equivalent through year’s end that would take the fed funds rate, which sets overnight the borrowing level for banks but also is tied to many consumer debt instruments, to 2.75%.

The Fed had resisted raising rates through 2021 even though inflation was running well above the central bank’s 2% longer-run target. Under a policy framework adopted in late 2021, the Fed said it would be content with letting inflation running hotter than normal in the interest of achieving full employment that was inclusive across income, racial and gender demographics.

Until several months ago, Powell and Fed officials had insisted that inflation was “transitory” and would dissipate as pandemic-related factors such as clogged supply chains and outsized demand for goods over services abated. However, that those expectations “disappointed” and the Fed has had to change course.

“It may be that the actual [inflation] peak was in March, but we don’t know that, so we’re not going to count on it,” he said. “We’re really going to be raising rates and getting expeditiously to levels that are more neutral and then that are actually tight … if that turns out to be appropriate once we get there.”

These will be Powell’s last remarks before the May 3-4 meeting of the Federal Open Market Committee, which sets interest rates. He is the latest Fed official to say rapid action is needed to take down inflation.

Along with the rate hikes, the Fed is expected soon to start reducing the amount of bonds it is holding. The central bank balance sheet now stands at close to $9 trillion, primarily consisting of Treasurys and mortgage-backed securities.

Discussions at the March meeting indicated the Fed eventually will allow $95 billion of proceeds from maturing bonds to roll off each month.

Powell noted that the other than pernicious inflation, the U.S. economy is “very strong” otherwise. He characterized the labor market as “extremely tight, historically so.”

Earlier in the day, he referenced former Fed Chairman Paul Volcker, who tamed inflation in the late 1970s and early ’80s with a series of rate hikes that ultimately led to a recession. Volcker “knew that in order to tame inflation and heal the economy, he had to stay the course,” Powell said.

The Volcker Fed ultimately took the benchmark rate to nearly 20%; it currently sits in a range between 0.25% and 0.5%.

This is breaking news. Please check back here for updates.

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China’s success taming virus could make exit strategy harder

TAIPEI, Taiwan (AP) — The sweeping “zero-tolerance” strategy that China has used to keep COVID-19 case numbers low and its economy functioning may, paradoxically, make it harder for the country to exit the pandemic.

Most experts say the coronavirus around the world isn’t going away and believe it could eventually become, like the flu, a persistent but generally manageable threat if enough people gain immunity through infections and vaccines.

In countries like Britain and the U.S., which have had comparatively light restrictions against the omicron wave, there is a glimmer of hope that the process might be underway. Cases skyrocketed in recent weeks but have since dropped in Britain and may have leveled off in the U.S., perhaps because the extremely contagious variant is running out of people to infect. Some places already are talking about easing COVID-19 precautions.

China, which will be in the international spotlight when the Beijing Winter Olympics begin in two weeks, is not seeing the same dynamic.

The communist government’s practice throughout the pandemic of trying to find and isolate every infected person has largely protected hospitals from becoming overwhelmed and staved off the deaths that have engulfed most of the world.

But the uncompromising approach also means most people in China have never been exposed to the virus. At the same time, the effectiveness of China’s most widely used vaccines has been called into question. New studies suggest they offer significantly less protection against infection from omicron, even after three doses, than people get after booster shots of the leading Western vaccines.

Together, those factors could complicate China’s effort to get past the pandemic. Experts say if the country of 1.4 billion people were to relax restrictions, it could face a surge similar to what Singapore or Australia experienced, despite a highly vaccinated population.

“China’s susceptibility to outbreaks is likely to be more because most people have not been exposed to the virus due to the stringent measures that were put in place, thus lacking hybrid immunity, which is supposed to prove better protection than vaccination alone,” said Dr. Vineeta Bal, an immunologist at the Indian Institute of Science Education and Research.

“It is risky for China to reopen right now because omicron is spreading globally, and even if the variant doesn’t cause major illness, it’ll spread like wildfire,” she added.

Dali Yang, a professor who studies Chinese politics at the University of Chicago, said, “It’s a big challenge, for leaders, especially their rhetoric on saving lives. How do you justify opening up and then having tens of thousands of people dying in the process?”

Chinese President Xi Jinping has cited China’s approach as a “major strategic success” and evidence of the “significant advantages” of its political system over Western liberal democracies.

The world’s most populous nation was the only major economy to grow in 2020, and it accounted for a fraction of global deaths and infections.

As part of the country’s tough-minded strategy for keeping the virus at bay, residents in Chinese cities must display their infection status on a government-monitored app to enter supermarkets, offices or even the capital.

But weeks ahead of the Olympics, omicron is testing this approach with outbreaks in the southern province of Guangdong, as well as Beijing.

Organizers of the Olympics announced they will not sell tickets locally and will allow only select spectators in. Foreign fans are not allowed.

Authorities have also asked people to not visit their hometowns around the Lunar New Year at the start of February, a move that will dampen spending during China’s most important family holiday. And the major city of Xi’an in the west and parts of Ningbo, a busy port south of Shanghai, are under lockdown.

With the Communist Party gearing up for a major meeting this fall, at which Xi is expected to be appointed to a third term as party leader, China is unlikely to relax its policies in a major way any time soon.

“If the numbers from COVID start to skyrocket to big levels, then this will reflect badly on his leadership,” said Willy Lam, an expert on Chinese political leadership at the Chinese University of Hong Kong.

China relies heavily on its own Sinovac and Sinopharm vaccines, along with several others made domestically. It has not approved the Pfizer shot, even though a Chinese company bought distribution rights in 2020.

Instead, the focus is on developing China’s own mRNA vaccines, like the Pfizer and Moderna formulas. One such vaccine is in late trials.

Another option for China may be to track how the virus is evolving and put off opening its borders until it becomes even milder. But it’s anyone guess when or if that might happen.

“What will the next variant be? How serious will it be? You can’t tell,” Bal said.

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Ghosal reported from New Delhi, India. Associated Press Business Writer Joe McDonald in Beijing contributed to this report.

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The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Department of Science Education. The AP is solely responsible for all content.

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China ends 2021 with worst COVID week since taming original epidemic

A medical worker in protective suit collects a swab sample from a man for nucleic acid testing at a residential compound, during another round of mass testing following the coronavirus disease (COVID-19) outbreak in Xian, Shaanxi province, China December 27, 2021. cnsphoto via REUTERS/File Photo

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  • Mainland China reported 1,151 new local symptomatic cases in past week
  • Latest outbreak driven by infections in city of Xian

BEIJING, Jan 1 (Reuters) – China ended its final week of 2021 with its biggest tally of local coronavirus cases for any seven-day period since subduing the country’s first epidemic nearly two years ago, despite an arsenal of some of the world’s toughest COVID-19 measures.

The National Health Commission reported on Saturday 175 new community infections with confirmed clinical symptoms for Dec. 31, bringing the total number of local symptomatic cases in mainland China in the past week to 1,151.

The surge has been driven mostly by an outbreak in the northwestern industrial and tech hub of Xian, a city of 13 million.

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The deepening outbreak in Xian will likely firm authorities’ resolve to curb transmissions quicklyas and when cases emerge. The city, under lockdown for 10 days as of Saturday, has reported 1,451 local symptomatic cases since Dec. 9, the highest tally for any Chinese city in 2021.

While China’s case count is tiny compared to many outbreaks elsewhere in the world, forestalling major flare-ups in 2022 will be important. Beijing will be hosting the Winter Olympic Games in February, and the ruling Communist Party will hold a once-every-five-years congress, expected in the fall, where President Xi Jinping will likely secure a third term as party secretary.

The emergence of the highly transmissible Omicron variant will also drive Beijing to stick to its high vigilance against the virus. China has reported a handful of imported Omicron cases and at least one locally transmitted case.

Since August, China has tried to get any outbreak under control within about two weeks, much shorter than the four to six weeks in earlier battles against sporadic flare-ups following the initial nationwide epidemic, according to the National Health Commission.

Cities along China’s borders are at higher virus risk, either due to the presence of overland transport links or entry of infected travellers from other countries. Some were hit by Delta outbreaks that resulted in harsh travel curbs last year.

Yunnan, which shares a border with Myanmar, Laos and Vietnam, reported new local symptomatic cases on 92 out of 365 days last year, or 25% of the time, more often than any other province, autonomous region or municipality.

Reuters Graphics

XIAN LOCKDOWN

The Xian outbreak, which led to cases in other cities including Beijing, could be traced back to a flight arriving from Pakistan, but it was unclear how it spread to local communities.

Many people have been forbidden from leaving their residential compounds, but a city government official said on Friday curbs would be loosened in less risky compounds when the time was right.

Postgraduate student Li Jiaxin, 23, said nobody can leave the campus of her university. She spent New Year’s Eve with her three room mates and was unable to meet with her boyfriend and family.

“I may be what you would consider a person with a strong sense of ritual, so I still feel a little sad that we are not together at this time,” she said.

Reuters Graphics

ECONOMIC WOES

China’s tough epidemic policies have helped stop its sprawling industrial sector from sliding into prolonged shutdowns, reaping important export gains as other pillars of growth weakened.

But unpredictable disruptions have shaken consumer sentiment and hammered the catering, hospitality and tourism sectors.

An employee surnamed Wang at a traditional teahouse in Kunming, the capital of Yunnan, said her company’s revenues had been halved compared with pre-pandemic levels.

“Many guests from other provinces had came to our teahouse specially for a taste of Yunnan’s pu’er tea, but now there are fewer of them,” Wang said.

“My salary hasn’t been cut, but I feel I may lose my job at any time.”

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Reporting by Ryan Woo, Roxanne Liu, Martin Quin Pollard and Beijing Newsroom; Editing by Kim Coghill

Our Standards: The Thomson Reuters Trust Principles.

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Climate change: The Dutch are masters at taming water. The crisis is teaching them to let it flood

She loves the vista. She loves docking a boat just strides from her vegetable plot. She loves spotting eagles and beavers. But there is a reticence to her joy.

“The mixed feeling is that it was my neighbor’s land,” van Lelieveld says. “I’m sad because I know how sad my neighbor is. Because he was giving up his land.”

What used to be her neighbor’s farm, walled off from the nearby river that posed a constant threat, is now pockmarked with water. It is flooded, purposefully, to soak up water when the river swells. It’s not suitable for farming, but Van Lelieveld is able to live here. A simple small dike keeps her home and some others on the street dry, even if their backyards are not.

This is all part of an ambitious climate project aptly called Room for the Rivers.

The Dutch have battled for centuries to keep water off the land in their low-lying country, more than a quarter of which lies below sea level.

While “adaptation” sounds like a dull word in climate talk, the Dutch have been adapting to the whims of water for a long time. Pumps, dikes and giant moveable seawalls protect the country, at least half of which is threatened by floods.

Nothing about the Dutch example is perfectly replicable: Its landscape, tradition of political powersharing, and water-aware culture are unique. But there’s a lot to be learned.

The climate crisis is only intensifying that vulnerability. Erratic weather is no longer a problem for the future — it’s clearly here, in most parts of the world — nor is it a problem just of extremes, like blazing forest fires and flash floods. It’s also a matter of getting organized, as governments and people make life-or-death decisions now for potentially worse threats arriving in an even warmer world.

Dutch expertise has come in handy for people running into trouble with water around the world. In the 17th Century, King Charles I asked a Dutchman, Cornelius Vermuyden, to help drain the marshes in England’s Cambridgeshire. When New York City was devastated by Hurricane Sandy in 2012, the US Government turned to the Dutch for help. When the Ever Given ran aground in the Suez Canal, a Dutch company was contracted to get it out.

But climate change means that these brute-force methods that have worked for centuries won’t always cut it. A dike can only be so large before it collapses under its own weight, and heightening it only increases the risk when it fails.

In the 1990s, the Dutch government started to change tack, better understanding that the natural state of bodies of water exist for good reasons. One example is low-lying, uninhabited land next to rivers that could flood and help absorb water when it rains heavily upstream.

That meant doing something unusual for the Dutch: knocking down some of the walls that once held back water, and moving people off the land.

‘This is the result’ of climate change

To understand why the project is so vital, right now, the headwaters of the rivers that empty into the Netherlands offer an insight.

Some 300 kilometers (186 miles) up the Rhine River from Van Lelieveld’s humble house lies the Ahr, a tributary that snakes through picturesque hills of west German wine country.

It was here in July that floodwaters rose higher than they ever had in the collective memory of Dernau, a small town nestled between steep slopes of vineyards.

“It’s not easy to finds words for it,” says Lea Kreuzberg, 23, who on July 14 was sitting in her apartment above the winery she runs with her father.

Dernau, in Germany’s Ahr Valley, was devastated by flooding in June. Credit: Martin Bourke/CNN

In the space of just a few hours, floodwaters spilled into the courtyard, submerged the ground floor, and rose into her apartment. Kreuzberg, her boyfriend, and two winery employees retreated to the building’s top floor.”

They spent a terrifying night together, preserving phone battery to communicate with Kreuzberg’s father, who was on vacation in Austria. The water finally peaked, then slowly subsided. Finally, at 5pm the next day, they were rescued.

“In the first days, the rain made me feel very uncomfortable,” Kreuzbberg said, referring to the time immediately after the floods. “When it started raining a bit more, the emotions came up again and I start crying,” she added.

“When we will go back here, it will not be easy to live here without being afraid.”

The human impact of July’s flooding was devastating. In the state of Rhineland Palatinate alone, it killed 133 people. In total, 180 were killed in Germany and 39 in Belgium. One victim was never found.

Nearly 15 centimeters (6 inches) of rain fell in a single 24-hour period from July 14 to 15, according to The European Organisation for the Exploitation of Meteorological Satellites, causing widespread damage not only in Germany and Belgium, but also in France, Luxembourg, Switzerland and the Dutch province of Limburg.

The region is no stranger to floods. But EUMESTAT said that July’s rainfall was “particularly devastating” and that those kinds of intense storms “are becoming more likely with changing climate.”

To Franziska Schnitzler, standing in the ruins of her family hotel and restaurant, that connection is clear. The 350-year-old, timber-frame building it once occupied was deemed unsafe and torn down.

“We do live with the climate change,” Schnitzler says. “And this is the result.”

And for young and old alike, climate change is intersecting with a crisis of mental health. In the days after the floods, three people in Dernau took their own lives.

“It was the grandma of one of my best friends,” Schnitzler says. “One night she woke me up and she said, ‘My grandma, my grandma, my grandma.'”

“That was so hard, to lose someone after the flood.”

A wake-up call for the Netherlands

The people who have given up their homes and land in the Netherlands did it not primarily for themselves, but for others. They were asked to sacrifice to protect people in cities up- and down-river, for whom floods pose a much more acute threat.

It was major flooding from rivers in 1993 and 1995 that served as “a wake-up call,” says Hans Brouwer, who for years has managed projects for the Dutch government’s Ministry of Infrastructure and Water Management.

“We focused for decades on the sea, and defending us from storm surges,” he recalls. “And then we were surprised by our rivers. And in ’95 the decision was made to evacuate a quarter of a million people. So that really made an impression.”

Those floods coincided with some of the first reports from the United Nations’ Intergovernmental Panel on Climate Change ringing the climate alarm bells.

“We realized that we can expect even more water from the rivers, and at the same time it would be difficult to get rid of that water because of sea-level rise,” Brouwer said.

Nol Hoiijmaijer’s farm was relocated to a 20-foot-high mound, so that the surrounding fields could be used as a floodplain. Credit: Martin Bourke/CNN

Some 15 years ago, Brouwer’s colleagues came to Nol Hooijmaijers, a dairy farmer, and told him that that eye-shaped spit of land that he and 17 other families called home would soon need to be turned into a floodplain.

“We had been through ’93 and ’95. So we did think that something would have to be done at some point. What that was, we didn’t know,” Hooijmaijers, now 72, said. “Then when the government came and said that this area might be used as a floodplain, yeah, that was of course a huge shock.”

“We had been convinced that we could stay here and farm for generations.”

He and his fellow farmers got together and decided that would “try to turn a threat into an opportunity.”

While some left rather than deal with the heartache, Hooijmaijers, his wife, and seven other families decided to stay. They convinced the government to build enormous, six-meter-high artificial dwelling mounds, or “terps,” on which to relocate their farms and houses. The northern dike that had protected their land was in turn lowered, allowing floodwater to spill over the land.

Change, ‘even when it breaks your heart’

The Room for the Rivers project was a monument to planning, foresight, and what can be achieved when government and citizen engage in collective action. Thirty-four projects — coming in at a total cost of $2.66 billion — mean that Dutch rivers can now absorb about 25% more water than they could in 1995.

During July’s enormous rainfall, van Lelieveld watched as the river swelled, picked up speed, and turned brown from silt and debris.

“It’s then that you can see the function of the region, because we didn’t have any issues with high water here,” she said. “I hope that people understand that, what I have sacrificed to do that.”

Brouwer described a “paradigm shift” in which engineers realized “we don’t even always understand how nature acts, but we take nature seriously.”

The design for the area in which van Lelieveld lives, he explained, was based on a century-old map — “not knowing exactly why it functioned in that time, but having confidence that nature took the right choices.”

The project created the wetlands that flooded her former neighbor’s farm and are now home to vast flocks of birds. When she goes out in her boat, she thinks of the struggle that the farmer waged to get decent compensation for his land.

“On the one hand, I don’t dare to enjoy it, because I also experienced that sadness, and saw what it did to people,” she said.

“But on the other hand, I’m very proud of what we achieved in this region. And that we can also be an example, that it’s possible.”

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Israel’s COVID-19 vaccine boosters show signs of taming Delta

Less than a month into a COVID-19 vaccine booster drive, Israel is seeing signs of an impact on the country’s high infection and severe illness rates fueled by the fast-spreading Delta variant, officials and scientists say.

Delta hit Israel in June, just as the country began to reap the benefits of one of the world’s fastest vaccine roll-outs.

With an open economy and most curbs scrapped, Israel went from single-digit daily infections and zero deaths to around 7,500 daily cases last week, 600 people hospitalized in serious condition and more than 150 people dying in that week alone.

On July 30, it began administering a third dose of the Pfizer/BioNtech vaccine to people over 60, the first country to do so. On Thursday it expanded eligibility to 40-year-olds and up whose second dose was given at least 5 months prior, saying the age may drop further.

In the past 10 days, the pandemic is abating among the first age group, more than a million of whom have received a third vaccine dose, according to Israeli health ministry data and scientists interviewed by Reuters.

The rate of disease spread among vaccinated people age 60 and over – known as the reproduction rate – began falling steadily around Aug. 13 and has dipped below 1, indicating that each infected person is transmitting the virus to fewer than one other person. A reproduction rate of less than 1 means an outbreak is subsiding. 

Scientists said booster shots are having an impact on infections, but other factors are likely contributing to the decline as well.

“The numbers are still very high but what has changed is that the very high increase in the rate of infections and severe cases has diminished, as has the pace at which the pandemic is spreading,” said Eran Segal, data scientist at the Weizmann Institute of Science and an adviser to the government.

“This is likely due to the third booster shots, an uptake in people taking the first dose and the high number of people infected per week, possibly up to 100,000, who now have natural immunity,” Segal said.

BOOSTER VS LOCKDOWN

After reaching one of the highest per-capita infection rates in the world this month, the question now is whether Israel can battle its way out of a fourth outbreak without imposing another lockdown that would damage its economy.

Evidence has emerged showing that while the vaccine is still highly effective in preventing serious illness, its protection diminishes with time. But there is no consensus among scientists and agencies that a third dose is necessary, and the World Health Organization has said more of the world should be vaccinated with a first dose before people receive a third dose.
People waiting in line at an MDA station to receive their coronavirus vaccines in Tel Aviv, August 14 2021 (credit: AVSHALOM SASSONI/MAARIV)

The United States has announced plans to offer booster doses to all Americans, eight months after their second vaccine dose, citing data showing diminishing protection. Canada, France, and Germany have also planned booster campaigns.

About a million of Israel’s 9.3 million population have so far chosen not to vaccinate at all and children under 12 are still not eligible for the shots. On Thursday, health officials said they have identified waning immunity among people under 40, although relatively few have fallen seriously ill.

According to Doron Gazit, a member of the Hebrew University’s COVID-19 expert team which advises the government, the rise in cases of severely ill-vaccinated people in the 60 and older group has been steadily slowing to a halt in the last 10 days.

“We attribute this to the booster shots and to more cautious behavior recently,” Gazit said.

More than half of those over 60 have received a third jab, according to the Health ministry.

The rate of new severe cases among unvaccinated patients 70 and older is now seven times that of vaccinated patients, and the gap will continue to grow as long as infections rise, according to Gazit. Among those over 50, that gap is four-fold.

“We are optimistic, but very cautious,” Israeli Health Minister Nitzan Horowitz told public broadcaster Kan on Sunday. “It gives us more time, slows the spread and we’re moving away from lockdown.”

But even if the boosters are slowing the pandemic’s pace, it is unlikely to fend Delta off entirely.

Dvir Aran, a biomedical data scientist at Technion – Israel’s Institute of Technology, said that while cases are retreating, other measures are needed alongside boosters to stop the pandemic. “It will take a long time until enough people get a third dose and until then thousands more people will getting seriously ill.”

Since Delta’s surge, Israel has reimposed indoor mask-wearing, limitations on gatherings, and ramped up rapid testing.

Its “living with COVID” policy will be tested come September, when schools reopen after summer break and when the Jewish holiday season starts, with families traditionally gathering to celebrate.



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