Risks up, except in investor behaviour

<p>Kia ora,</p><p>Welcome to Thursday's Economy Watch where we follow the economic events and trends that affect New Zealand.</p><p>I'm David Chaston and this is the International edition from Interest.co.nz.</p><p>Today we lead with news of rising risks but markets betting they won't come to anything.</p><p>Firstly, <a href="http://www.cdc.gov/nchs/data/vsrr/vsrr015-508.pdf" target="_blank"><strong>life expectancy in the United States declined</strong></a> by a year and a half in 2020 and the pandemic is largely to blame. In fact, more precisely, the US lack of response to the pandemic is largely to blame. It was a decline from 78.8 years in 2019 to 77.3 years (at birth) in 2020 and was the largest one-year decline since World War II, when life expectancy dropped by -2.9 years between 1942 and 1943. Hispanic and Black communities saw the biggest declines. (The last time it was measured in New Zealand, it was 81.8 years.)</p><p>And staying in the US, <a href="https://www.corelogic.com/press-releases/domino-effect-single-family-rent-growth-rate-spikes-in-may-as-housing-economy-challenges-persist-corelogic-reports/" target="_blank"><strong>rents for single family homes are spiking higher</strong></a> all of a sudden. They are rising at a +6.6% annual rate, and some southern state markets show rises above +10%. Strong job and income growth, as well as fierce competition for for-sale housing, is fueling demand for housing where work-from-home options are preferred.</p><p>Rents and house price inflation are emerging as a key focus of Fed analysts.</p><p>In yesterday's report, we noted flooding of China's Yellow River, and especially in Henan province. If you have a moment <a href="https://www.washingtonpost.com/world/2021/07/20/china-henan-flood/" target="_blank"><strong>take a look at this</strong></a>. <a href="https://www.caixinglobal.com/2021-07-21/gallery-heavy-rains-wreak-havoc-across-china-101743283.html" target="_blank"><strong>And this</strong></a>. And making matters worse, there are <a href="https://asia.ni