Real Time Economics: Trump Complains About the Fed, China Weakens the Yuan

This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here. Good morning! Today we look at President Trump’s interest-rate lament, China’s currency, the first big change to foreign-investment rules in a decade, auto tariffs, manufacturing’s shifting politics, and the White House’s new estimate on deficits.  I AM NOT HAPPY ABOUT IT President Donald Trump delivered a rare presidential critique of the Federal Reserve, saying he hoped the central bank would stop raising interest rates. “I am not happy about it,” Mr. Trump said. Central bankers have long argued for independence from political pressure, saying it gives investors greater confidence that officials will make unpopular decisions in the long-run best interest of the economy, Nick Timiraos writes. And for the past few decades, presidents have refrained from speaking specifically on monetary policy. So what? Mr. Trump’s comments appear unlikely to sway Continue reading "Real Time Economics: Trump Complains About the Fed, China Weakens the Yuan"

Real Time Economics: Trump Complains About the Fed, China Weakens the Yuan

This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here. Good morning! Today we look at President Trump’s interest-rate lament, China’s currency, the first big change to foreign-investment rules in a decade, auto tariffs, manufacturing’s shifting politics, and the White House’s new estimate on deficits.  I AM NOT HAPPY ABOUT IT President Donald Trump delivered a rare presidential critique of the Federal Reserve, saying he hoped the central bank would stop raising interest rates. “I am not happy about it,” Mr. Trump said. Central bankers have long argued for independence from political pressure, saying it gives investors greater confidence that officials will make unpopular decisions in the long-run best interest of the economy, Nick Timiraos writes. And for the past few decades, presidents have refrained from speaking specifically on monetary policy. So what? Mr. Trump’s comments appear unlikely to sway Continue reading "Real Time Economics: Trump Complains About the Fed, China Weakens the Yuan"

Real Time Economics: Trump Complains About the Fed, China Weakens the Yuan

This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here. Good morning! Today we look at President Trump’s interest-rate lament, China’s currency, the first big change to foreign-investment rules in a decade, auto tariffs, manufacturing’s shifting politics, and the White House’s new estimate on deficits.  I AM NOT HAPPY ABOUT IT President Donald Trump delivered a rare presidential critique of the Federal Reserve, saying he hoped the central bank would stop raising interest rates. “I am not happy about it,” Mr. Trump said. Central bankers have long argued for independence from political pressure, saying it gives investors greater confidence that officials will make unpopular decisions in the long-run best interest of the economy, Nick Timiraos writes. And for the past few decades, presidents have refrained from speaking specifically on monetary policy. So what? Mr. Trump’s comments appear unlikely to sway Continue reading "Real Time Economics: Trump Complains About the Fed, China Weakens the Yuan"

Real Time Economics: Trump Complains About the Fed, China Weakens the Yuan

This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here. Good morning! Today we look at President Trump’s interest-rate lament, China’s currency, the first big change to foreign-investment rules in a decade, auto tariffs, manufacturing’s shifting politics, and the White House’s new estimate on deficits.  I AM NOT HAPPY ABOUT IT President Donald Trump delivered a rare presidential critique of the Federal Reserve, saying he hoped the central bank would stop raising interest rates. “I am not happy about it,” Mr. Trump said. Central bankers have long argued for independence from political pressure, saying it gives investors greater confidence that officials will make unpopular decisions in the long-run best interest of the economy, Nick Timiraos writes. And for the past few decades, presidents have refrained from speaking specifically on monetary policy. So what? Mr. Trump’s comments appear unlikely to sway Continue reading "Real Time Economics: Trump Complains About the Fed, China Weakens the Yuan"

Real Time Economics: Trump Complains About the Fed, China Weakens the Yuan

This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here. Good morning! Today we look at President Trump’s interest-rate lament, China’s currency, the first big change to foreign-investment rules in a decade, auto tariffs, manufacturing’s shifting politics, and the White House’s new estimate on deficits.  I AM NOT HAPPY ABOUT IT President Donald Trump delivered a rare presidential critique of the Federal Reserve, saying he hoped the central bank would stop raising interest rates. “I am not happy about it,” Mr. Trump said. Central bankers have long argued for independence from political pressure, saying it gives investors greater confidence that officials will make unpopular decisions in the long-run best interest of the economy, Nick Timiraos writes. And for the past few decades, presidents have refrained from speaking specifically on monetary policy. So what? Mr. Trump’s comments appear unlikely to sway Continue reading "Real Time Economics: Trump Complains About the Fed, China Weakens the Yuan"

Real Time Economics: Trump Threatens Europe With Auto Tariffs, Auto Industry Pushes Back

This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here. Good morning! Today we look at President Trump’s warning to Europe, Fed Chairman Jerome Powell’s outreach to Congress, fallout from tariffs, Republican policy shifts on trade and deficits, and how health-care coverage is increasingly determined by where you live.  ‘CARS IS THE BIG ONE’ President Donald Trump threatened “tremendous retribution” against the European Union if the bloc doesn’t lift trade barriers on farm goods, cars, medical equipment and other products. The U.S. hammer: “Cars is the big one,” Mr. Trump said. The president’s warning of sweeping tariffs on automobile imports comes despite strong and growing resistance from foreign and domestic auto makers, auto dealers, parts manufacturers and some lawmakers, Chester Dawson and Joshua Zumbrun report. Auto tariffs are the subject of a Commerce Department hearing Thursday and are expected to be Continue reading "Real Time Economics: Trump Threatens Europe With Auto Tariffs, Auto Industry Pushes Back"

Real Time Economics: Is the U.S. Running Out of Workers?

This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here. Good morning! Today we look at Fed Chairman Jerome Powell’s take on the economy, a U.S. labor market that’s short on workers, how a stronger dollar is squeezing profits, your retirement savings, robust global growth, and the EU’s record fine for Google. NOT FOREVER, JUST FOR NOW Federal Reserve Chairman Jerome Powell said the economy’s performance justifies continued interest rate increases. But he opened the door to a potential policy shift and outlined risks if escalating trade tensions result in permanently higher tariffs. The WSJ’s Nick Timiraos highlights two key quotes: The central bank’s rate-setting committee “believes that for now the best way forward is to keep gradually raising the federal funds rate.” “For now” is a big caveat, emphasizing that policy decisions aren’t on autopilot. “In general, countries Continue reading "Real Time Economics: Is the U.S. Running Out of Workers?"

Real Time Economics: Whirlpool Applauded U.S. Tariffs. Then Things Got Complicated.

This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here. Good morning! Today we look at the unintended consequences of U.S. tariffs, warning signs for China’s economy, booming growth in the U.S., volatility in oil markets, and a push to grow meat in labs instead of on ranches.   SPIN CYCLE Tariffs are good, and tariffs are bad. Ask Whirlpool. After the Trump administration announced duties on washing machines in January, CEO Marc Bitzer said: “This is, without any doubt, a positive catalyst for Whirlpool.” Nearly six months later, the company’s share price is down 15%. One factor is a separate set of tariffs on steel and aluminum, imposed by the U.S. in March and later expanded, that helped drive up Whirlpool’s raw-materials costs, Andrew Tangel and Josh Zumbrun report. The upshot: Tariffs are a Continue reading "Real Time Economics: Whirlpool Applauded U.S. Tariffs. Then Things Got Complicated."

Real Time Economics: Why the Productivity Gap Is Bad for the Global Economy

This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here. Good morning! Today we look at the global economy’s haves and have-nots, China’s growing but slowing economy, soaring demand for jets, and the lessons from Australia’s 27-year economic expansion. THE PRODUCTIVITY GAP The global economy has a big problem: While top companies are getting more productive, gains are stalling for everyone else. The gap between the two is widening. Why it matters: Raising the amount of goods and services produced by each worker is one of the most important long-term drivers of rising living standards. Any gap between top companies and the rest can exacerbate income and wealth disparities.   Why it’s happening: As far back as the industrial revolution, major innovations have traveled swiftly from company to company and industry to industry, an economy-boosting phenomenon called diffusion. That mechanism Continue reading "Real Time Economics: Why the Productivity Gap Is Bad for the Global Economy"

Real Time Economics: Inflation Is Gobbling Up Worker Wages

This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here. Good morning! Today we look at rising inflation and stagnating blue-collar wages, how trade skirmishes are rippling through the economy, Trump’s Brexit warning, and expectations that the U.S. unemployment rate will fall to the lowest level since 1969. THE PRICE IS RIGHT U. S. inflation hit its highest rate in more than six years, with rising consumer prices eating away at modest wage gains for American workers. Prices rose 2.9% in June from a year earlier, the fastest pace since February 2012, Paul Kiernan reports. For a second month in a row, annual inflation fully offset average hourly wage growth over the previous year. Production and nonsupervisory employees, a category which includes blue-collar workers, saw their real average hourly wages fall 0.2% in June from a year earlier Continue reading "Real Time Economics: Inflation Is Gobbling Up Worker Wages"

Real Time Economics: Inflation Is Perking Up. Will Tariffs Push Consumer Prices Even Higher?

This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here. Good morning! Today we look at inflation pressures, economic fallout from U.S. trade policy, and Chinese telecoms giant ZTE getting back into business. INFLATION WATCH Inflation is back in the spotlight. Are we in for some surprises? First, let’s look at pipeline prices. The producer-price index, a gauge of what businesses are paying, jumped 3.4% from a year earlier in June. That’s the strongest gain since late 2011, when oil was going for more than $100 a barrel. Rising prices for transportation and warehousing services helped push overall costs higher, Sarah Chaney and Sharon Nunn report. Trucking freight prices, for example, saw the largest monthly increase on record, partly because of higher fuel and labor expenses. Companies can’t always pass on costs, so rising producer prices don’t necessarily Continue reading "Real Time Economics: Inflation Is Perking Up. Will Tariffs Push Consumer Prices Even Higher?"

Real Time Economics: Trade Wars, Job Churn and the Productivity of Working Moms

This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here. Good morning! Today we look at the escalating U.S.-China trade fight, newfound job security in factories alongside disruption in energy fields, the highest gasoline prices since 2014, and how women without children are penalized at work.  $34B + $16B + $200B + $200B = ? The White House said it would assess tariffs on another $200 billion in Chinese goods. The clear message to trading partners: The U.S. won’t back away from trade fights. U.S. Trade Representative Robert Lighthizer said he was open to talks with China about a resolution of the dispute, though officials in both nations say there are currently no negotiations scheduled, Bob Davis reports. The new tariffs won’t take effect for at least two months, giving U.S. industry time to comment on Continue reading "Real Time Economics: Trade Wars, Job Churn and the Productivity of Working Moms"

Real Time Economics: Tax Cuts, Trade Disputes, Messy Brexit and a Bag of Sliders

This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here. Good morning! Today we look at the economy’s response to tax cuts, trouble for America’s auto exports, how rising wages are eating into corporate profits, President Trump’s Supreme Court pick, more Brexit uncertainty, and why fewer White Castles will get renovated this year. ABOUT THAT ECONOMIC STIMULUS… Last year’s tax cuts and spending increases will likely provide less of a boost to economic growth than many forecasters predict—and possibly none at all. That’s because the changes took effect at a time when the economy was already firing on all cylinders. As a result, there are fewer unemployed workers, spare resources and idled factories ready to kick into action than there would have been during a downturn, Federal Reserve Bank of San Francisco economists said in a new report. Indeed, the next recession Continue reading "Real Time Economics: Tax Cuts, Trade Disputes, Messy Brexit and a Bag of Sliders"

Real Time Economics: As Tariffs Bite, Who Are the Winners and Losers?

This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here. Good morning! Today we look at how tariffs are rippling through the global economy, trouble for Theresa May’s Brexit plans, jockeying for position at the head of the European Central Bank, and research suggesting that robots helped swing the 2016 election for President Donald Trump. WINNERS AND LOSERS Who’s the biggest loser when tariffs are imposed on imports? The surprising answer: exporters. Though completely counterintuitive, theory and evidence show that taxes on imports act just like a tax on exports. While it’s early, the Trump administration’s recent round of tariffs is already rippling out to exporters: Soybean farmers face plunging prices, Harley-Davidson will move some production out of the U.S., and exports from BMW South Carolina plant may take a hit. It’s more than tariff retaliation, though. A country that shuts Continue reading "Real Time Economics: As Tariffs Bite, Who Are the Winners and Losers?"

Real Time Economics: The U.S.-China Trade War Is On

This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here. Good morning. Today we look at the start of the U.S.-China trade war and potential fallout across the economy, the Fed’s focus on bubbles, and the most important economic report of the month—it’s jobs day!  SHOT HEARD ‘ROUND THE WORLD The U.S. and China slapped levies on $34 billion of each other’s exports. China accused the U.S. of “launching the largest trade war in economic history.” The Trump administration blames China for starting the skirmish decades ago with mercantilist practices and intellectual property theft. And things are just getting warmed up. Bob Davis and Lingling Wei write that the battle may well stretch into next year—or longer—with a strong economy allowing the U.S. to shrug off any immediate ill effects. A second round of Continue reading "Real Time Economics: The U.S.-China Trade War Is On"

Real Time Economics: U.S. Workers Are Quitting Their Jobs. That’s Good For The Economy

This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here. Good morning! Today we look at the latest developments in the labor market ahead of Friday’s U.S. jobs report, China’s warning on trade, how global commerce is slowing even before tariffs take effect, the great American cheddar glut, and what to watch in minutes from the Federal Reserve’s latest meeting.  WORK VS. RETIREMENT A 3.8% unemployment rate shows the U.S. is facing the tightest labor market in two decades. Why then aren’t more people looking for a job? Perhaps Baby Boomers’ decision to work isn’t closely tied to the availability of jobs. The share of Americans working or seeking work has been stubbornly stuck at or below 63% in recent years, despite falling unemployment. For people between 25 and 54 years old, participation in the labor force Continue reading "Real Time Economics: U.S. Workers Are Quitting Their Jobs. That’s Good For The Economy"

Real Time Economics: What Do a Falling Yuan, Cheaper Soybeans and Rising Factory Activity Have in Common?

This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here. Good morning! Today we look at China’s plunging currency, suffering in the Farm Belt, a bump in factory activity, a reprieve for Germany’s governing coalition, more misery in strip malls, and happy news for students—a strong labor market is squeezing out unpaid internships. YUAN HITS FRESH LOW There’s more than one way to fight a trade war. China’s yuan slumped to its weakest value against the U.S. dollar in nearly a year. The currency’s drop follows the imposition of tariffs and rising trade tensions between the countries. The Trump administration sees China as a fairly juicy target for tariffs—China exported $505.5 billion in merchandise to the U.S. last year while the U.S. exported $129.9 billion to China. China could run out of stuff to hit with levies Continue reading "Real Time Economics: What Do a Falling Yuan, Cheaper Soybeans and Rising Factory Activity Have in Common?"

Real Time Economics: The U.S. Economic Expansion Enters Its 10th Year…How Much Longer Does It Have?

This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here. Good morning! Today we look at the U.S. economic expansion on its ninth birthday, a subtle Trump warning for the Fed, the automotive industry as collateral damage in the U.S. trade fight, Mexico’s presidential election, and all the signs that inflation really, finally—maybe—is here to stay.   HAPPY BIRTHDAY! The U.S. economic expansion turns nine this week on a high note, with second-quarter activity looking particularly strong. Another 12 months, and the economy will enter the longest stretch of growth in the country’s history. “This has understandably raised concerns that the clock is running down on the expansion and the next recession is around the corner,” J.P. Morgan Michael Feroli and Ben Jarman write in a research note. Indeed, economists polled by the WSJ have a rough consensus that the Continue reading "Real Time Economics: The U.S. Economic Expansion Enters Its 10th Year…How Much Longer Does It Have?"

Real Time Economics: Americans Are Working Less and Watching TV More

This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here. Good morning! Today we look at how Americans are spending their time, death by overwork in Japan, firming but still fairly subdued inflation, Europe’s economic clout, and China’s dawning realization that it still doesn’t match U.S. technical prowess.  TAKE IT EASY Americans worked less and played more last year. The average amount of time spent daily on relaxation and leisure jumped seven minutes, to three hours and 58 minutes. It’s not that the country is getting lazier. It’s getting older. The elderly—people 65 years or older—are growing as a share of the population and they just don’t work as much. People in their prime working years, however, spent more hours per day on the job than in any year since 2007, Paul Kiernan reports. For those who are relaxing, the most Continue reading "Real Time Economics: Americans Are Working Less and Watching TV More"

Real Time Economics: The U.S. Economy Is Absolutely Roaring—At Least For Now

This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here. Good morning! Today we look at the torrid pace of U.S. economic growth and why that might not last, new lows for the yuan and the rupee, the latest developments in President Trump’s trade policy, and the paltry personal saving rate of American consumers.  TAKE FIVE The U.S. economy is roaring, at least for now. Macroeconomic Advisers, which runs one of the more sophisticated forecasting models, is tracking a 5.3% growth rate in the second quarter. That would be the fastest pace in almost 15 years. A narrowing trade deficit, tax cuts coupled with more government spending, a resurgent consumer and decent business investment are all supporting what appears to be a strong rebound in growth. The Atlanta Fed’s GDPNow model shows a slightly less robust 4.5% growth Continue reading "Real Time Economics: The U.S. Economy Is Absolutely Roaring—At Least For Now"