Real Time Economics: Signs of Trouble 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. Suddenly, the global economy isn’t looking so great. German and Japanese GDP shrank in the third quarter, momentum in China is vanishing, oil prices are tanking, the U.S. and China are still sparring over trade, and the big U.S. fiscal stimulus is set to fade as deficits grow. Good morning. Jeff Sparshott here to take you through the day’s top economic news. It’s not all glum: Germany and Japan were hit by temporary factors, cheaper oil could help consumers, and Amazon is set to add 50,000 jobs and sop up spare office space along the East Coast. Let us know what you think by replying to this email. BREAKING BAD The global economy took a bad turn last quarter with gross domestic product in Japan and Germany—the world’s third- Continue reading "Real Time Economics: Signs of Trouble for the Global Economy"

Real Time Economics: U.S. and China Resume Trade Talks

This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here. Here we go again. The U.S. and China resumed trade talks last week, though divisions within the Trump administration make it hard to figure out whether we’re heading for a truce or more tariffs. Good morning. Jeff Sparshott here to take you through the day’s top economic news. We’ll also look at Amazon’s new headquarters, tech’s battle for talent, oil prices, and why foreigners are shunning U.S. colleges and British jobs.  LET’S TALK Treasury Secretary Steven Mnuchin spoke with his Chinese counterpart, Vice Premier Liu He, about a deal to ease trade tension. Friday’s phone call didn’t lead to a breakthrough but the renewed discussions indicate the two sides are trying to make progress ahead of a meeting between President Trump and Chinese President Xi Jinping at the end Continue reading "Real Time Economics: U.S. and China Resume Trade Talks"

Real Time Economics: Too Much Oil | U.S. Debt Piles Up | Christmas Shopping Season

This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here. Saudi Arabia and its OPEC allies are trying to get a handle on supply and demand dynamics in the oil market. That hasn’t been easy with U.S. shale producers pumping, global growth fading and Iran facing new American sanctions.  Good morning. Jeff Sparshott here to take you through the day’s key economic news. We’ll also look at how much the U.S. is spending to finance its growing debt, the mortgage market, holiday shopping, and runaway inflation in a dollar-denominated economy.  SAUDIS TO CUT OIL OUTPUT OPEC is nearing a deal to cut oil output. Saudi representatives said that the kingdom would slash its exports unilaterally next month as the wider alliance debated its next move. Russia, the world’s largest producer, sent mixed signals on whether it would Continue reading "Real Time Economics: Too Much Oil | U.S. Debt Piles Up | Christmas Shopping Season"

Real Time Economics: Fed Stays the Course | How to Pay for Roads and Bridges | Iran’s Appetite for American Soybeans

This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here. The Federal Reserve spoke volumes while saying hardly anything on Thursday. The takeaway: expect another rate increase next month.  Good morning. Jeff Sparshott here to take you through the day’s economic news. We’ll also look at the looming political struggle to pay for American infrastructure, how Iran is filling some of the void after China stopped buying U.S. soybeans, another low for jobless claims, and how Brexit is a bit like legalizing prostitution.  STEADY AS SHE GOES The Federal Reserve held interest rates steady and highlighted the economy’s strength after its two-day policy meeting. It offered nothing to dispel market expectations that it would deliver its fourth rate rise of the year in December, Nick Timiraos reports. Broad strength in the economy and labor market—powered in recent Continue reading "Real Time Economics: Fed Stays the Course | How to Pay for Roads and Bridges | Iran’s Appetite for American Soybeans"

Real Time Economics: Trump’s Trade Agenda | Who Cares About the Economy? | It’s Fed Day!

This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here. President Trump and Democrats have a shared skepticism of free trade. That doesn’t mean they’ll agree on a renegotiated Nafta—or the rest of the White House’s trade agenda. The new deal with Mexico and Canada could prove an early test when the administration seeks approval from a Democrat-controlled House next year.  Good morning. Jeff Sparshott here to take you through the latest developments affecting the global economy, including lessons and fallout from midterms, what to expect from the Fed, China’s surging exports, and big tech and dying startups. DON’T BET THE HOUSE ON IT President Trump said split control of Congress “could be a beautiful, bipartisan-type of situation.” He praised likely House Speaker Nancy Pelosi, saying he was prepared to negotiate over issues ranging from infrastructure to the environment. Continue reading "Real Time Economics: Trump’s Trade Agenda | Who Cares About the Economy? | It’s Fed Day!"

Real Time Economics: The Midterm Results Are In | Gridlock Likely To Limit Policy Shifts | Remember the Debt Ceiling?

This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here. Democrats retook the House, Republicans added a seat in the Senate—and the short-term economic outlook is pretty much the same as before the midterms. Political gridlock is likely to temper major shifts in American economic and tax policy for the next couple years but could also leave Washington looking over the next fiscal cliff. Good morning. Jeff Sparshott here to take you through the latest developments affecting the global economy. HELP WANTED. SERIOUSLY. Before we dive into the election, here’s some bright news for workers: Unfilled jobs in the U.S. exceeded the number of unemployed Americans by more than one million as the summer came to a close. Before March, job openings had never exceeded unemployed workers in more than 17 years of monthly records, Eric Morath reports. It’s a Continue reading "Real Time Economics: The Midterm Results Are In | Gridlock Likely To Limit Policy Shifts | Remember the Debt Ceiling?"

Real Time Economics: Amazon Does the Splits | U.S. Midterms Are Here | Why Iran Sanctions Aren’t Raising Oil Prices

This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here. It’s Election Day! Today we look at Amazon’s decision to split its second headquarters between two cities, U.S. midterms, the “real” unemployment rate, and Iran sanctions. AMAZON SPLITS HQ2 Amazon.com plans to split its second headquarters evenly between two locations rather than picking one city. The WSJ’s Laura Stevens and Shayndi Raice report that the surprise decision is to allow the company to recruit more of the best tech talent, and ease potential issues with housing, transit and other areas where adding tens of thousands of workers could cause problems. Under the new plan, Amazon would divide the workforce with about 25,000 employees in each place. Amazon is in advanced talks with multiple cities but hasn’t made a final decision on which two locations it will pick. An announcement Continue reading "Real Time Economics: Amazon Does the Splits | U.S. Midterms Are Here | Why Iran Sanctions Aren’t Raising Oil Prices"

Real Time Economics: U.S. Companies Feel Tariff Pinch | Strongest Wage Growth In a Decade | Election Day Nears

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 fallout from U.S. trade policy, another milestone for workers, how opioid addiction is affecting the labor market, and where midterm elections could affect economic policy. THE LONG ARM OF HIGHER TARIFFS U.S. companies said they are tempering the effects of escalating tariffs with China through price increases or changes to their supply chains, but they warn investors that the picture could worsen next year. Tariffs have slowed U.S. timber and grain exports, raised the cost of imported clothes hangers and heavy-equipment materials, and compressed profit margins for computer chip and tool makers, among other effects, according to an analysis of results and comments from third-quarter earnings. While the negative impact is widespread, it’s so far mostly modest, Theo Francis reports. The tariff Continue reading "Real Time Economics: U.S. Companies Feel Tariff Pinch | Strongest Wage Growth In a Decade | Election Day Nears"

Real Time Economics: U.S. Jobs Numbers On Tap, Trump Signals Progress With China

This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here. It’s jobs day! The U.S. employment report for October is out at 8:30 a.m. ET. Today we also look at progress and prospects for resolving the U.S.-China trade fight, slower growth at U.S. factories, so-so worker productivity, labor disruptions, and the company that’s following you by tracking your smartphone. GOOD COP President Trump said he had a “very good conversation” with President Xi Jinping of China, signaling progress in the nations’ trade dispute. The president’s upbeat assessment came as an impasse over trade has threatened to undermine a planned meeting between the two leaders at the Group of 20 leaders summit in Buenos Aires later this month, Vivian Salama, Aruna Viswanatha and Kate O’Keeffe report. Mr. Trump said the two discussed many issues by telephone on Thursday, Continue reading "Real Time Economics: U.S. Jobs Numbers On Tap, Trump Signals Progress With China"

Real Time Economics: Americans Are Finally Getting Fatter Paychecks

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 wages, signs the labor market has further to run, a hiring frenzy for $300,000-a-year jobs, where foreign students work, and how the U.S. Treasury is adding to its growing pile of debt.  PAY DAY! Americans paychecks rose at the fastest rate in more than a decade over the past year, showing a tight labor market is paying dividends for more workers, Eric Morath reports. The latest wage data comes from the slightly obscure employment-cost index, which accounts for both wages and benefits paid to civilian workers. A more closely watched pay gauge—average hourly earnings for private-sector employees—is out with the October jobs report on Friday. It’s expected to rise just more than 3% from a year earlier, which would be the strongest Continue reading "Real Time Economics: Americans Are Finally Getting Fatter Paychecks"

Real Time Economics: U.S. Wages Poised for a Breakout | China’s Factories Slow | Millennials Drive Homeownership

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. labor market, inflation, homeownership in America, a two-year low for China manufacturing activity, and warnings on tariffs.  BREAK ON THROUGH U.S. workers’ wages are poised to break through a 3% annual growth ceiling that’s held firm for nearly a decade when the Labor Department releases the October jobs report on Friday. Economists project that average hourly earnings advanced 0.2% on the month in October. That roughly 5-cent-an-hour gain would result in wages advancing 3.1% from a year earlier. Wages haven’t exceed 3% year-over-year growth since April 2009. (At that time, wages were growing because employers we’re letting go of less-experienced, lower-paid workers, leaving higher-earning workers on payrolls.) The strong annual gain in October in part reflects that Continue reading "Real Time Economics: U.S. Wages Poised for a Breakout | China’s Factories Slow | Millennials Drive Homeownership"

Real Time Economics: China’s Currency Slides | U.S. Guards Tech | Americans Slower to Upgrade Cell Phones

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 pressure on the yuan, slower growth in Europe, the U.S.-China battle for tech supremacy, why the U.S. Treasury is issuing more than $1 trillion in debt, inflation’s steady path, and how rising prices and changing plans are driving Americans to hang on to old cell phones. MAGNIFICENT 7 China guided the yuan to its weakest official level in a decade on Tuesday, a move that could fuel expectations of a further, self-reinforcing slide. The yuan’s depreciation puts pressure on Chinese policy makers, who want to give investors a bigger say in determining the currency’s value but appear uncomfortable with letting the yuan fall beyond a symbolic seven to the dollar, Saumya Vaishampayan and Mike Bird report. The yuan has been hit this Continue reading "Real Time Economics: China’s Currency Slides | U.S. Guards Tech | Americans Slower to Upgrade Cell Phones"

Real Time Economics: Why U.S. Economic Growth Is Poised to Slow

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 whether U.S. economic growth has already peaked, the mystery of low inflation, how tariffs are reshaping the Farm Belt, and key elections in Latin America and Europe. THE TIDE IS HIGH The U.S. economy just posted one of the best six-month stretches of the past decade. There’s a good chance it’s all downhill from there. Economists surveyed by The Wall Street Journal estimate growth will slow in the coming quarters. The Fed is expecting a lowly 1.8% rate by 2021. “We think U.S. growth may have just peaked,” said Michael Gapen, chief U.S. economist for Barclays Capital. Few believe a recession is near, and the expansion is widely expected to become the longest on record next year, Jon Hilsenrath and Harriet Continue reading "Real Time Economics: Why U.S. Economic Growth Is Poised to Slow"

Real Time Economics: Why U.S. Economic Growth Is Poised to Slow

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 whether U.S. economic growth has already peaked, the mystery of low inflation, how tariffs are reshaping the Farm Belt, and key elections in Latin America and Europe. THE TIDE IS HIGH The U.S. economy just posted one of the best six-month stretches of the past decade. There’s a good chance it’s all downhill from there. Economists surveyed by The Wall Street Journal estimate growth will slow in the coming quarters. The Fed is expecting a lowly 1.8% rate by 2021. “We think U.S. growth may have just peaked,” said Michael Gapen, chief U.S. economist for Barclays Capital. Few believe a recession is near, and the expansion is widely expected to become the longest on record next year, Jon Hilsenrath and Harriet Continue reading "Real Time Economics: Why U.S. Economic Growth Is Poised to Slow"

Real Time Economics: The Best Major for College Grads | U.S.-China Impasse | Slower Growth Ahead for the U.S.?

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 college grads stuck working in jobs that don’t require a degree, U.S.-China trade talks, trade policy fallout, early signs that the economy may cool in the final months of the year, and the rising supply and strong demand for marijuana that won’t get you high. FRIES WITH THAT BACHELOR’S DEGREE? It’s a tight job market, but some college majors aren’t much help in landing a job that requires a college degree. No, we’re not talking about English literature. Some more vocationally geared majors—like fitness studies, criminal justice and business—can be worse choices than English or gender studies, according to a new report by labor analytics firm Burning Glass Technologies. College graduates who studied homeland security and law enforcement had a 65% probability of Continue reading "Real Time Economics: The Best Major for College Grads | U.S.-China Impasse | Slower Growth Ahead for the U.S.?"

Real Time Economics: Markets Are Volatile But the Underlying Economy Is Steady As She Goes

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 third-quarter economic growth, how government spending is goosing while housing is hurting GDP, and why Fed Chairman Jerome Powell has a secret weapon against political pressure that Paul Volcker never did.  THE STOCK MARKET ISN’T THE ECONOMY U.S. stocks tumbled Wednesday, sending the Dow industrials into the red for the year and putting the Nasdaq Composite Index down more than 10% from its recent high. Few investors are predicting a recession in the near term, but some are debating whether the market will withdraw further under pressure from higher interest rates, softening global growth expectations and continued political tumult. The short-term economic outlook in the U.S., by contrast, is bright. Gross domestic product data out Friday is expected to show the Continue reading "Real Time Economics: Markets Are Volatile But the Underlying Economy Is Steady As She Goes"

Real Time Economics: Does Jerome Powell Look Happy? | Gut Check for Manufacturers | Capitalism Meets Coffee Prices

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 latest attack on the Fed, emerging risks for U.S. factories, international postal rates, Alaska’s long slog out of recession, a little competition among restaurants and retailers, the unprecedented rejection of Italy’s budget, and a White House history of socialism. JAY WALKING President Trump stepped up his attacks on Federal Reserve Chairman Jerome Powell, calling the Fed the biggest risk to the economy. “Every time we do something great, he raises the interest rates,” the president said. Mr. Powell “almost looks like he’s happy raising interest rates.” In an interview with the WSJ’s White House team, Mr Trump stopped short of saying he’d try to fire the Fed chief: “I’m just saying this: I’m very unhappy with the Fed because Obama Continue reading "Real Time Economics: Does Jerome Powell Look Happy? | Gut Check for Manufacturers | Capitalism Meets Coffee Prices"

Real Time Economics: Waiting for a Middle Class Tax Cut? Don’t Hold Your Breath

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 presidential pledges, the unintended consequences of a higher minimum wage, the world’s longest sea bridge and the state of American infrastructure spending, Hurricane Maria, how shipowners could affect airfares, and Germany’s concession to U.S. gas exporters. MORE TAX CUTS? “We’re giving a middle-income tax reduction of about 10%. We’re doing it now for middle-income people.”—President Trump, speaking to reporters Monday Well, don’t hold your breath. Congress is out of Washington until after the Nov. 6 election. It isn’t even clear whether the administration will put out any plan by then. There likely aren’t enough votes or time in the post-election Congress for a major tax cut, and a switch in control of the House or Senate would reshape the tax agenda for Continue reading "Real Time Economics: Waiting for a Middle Class Tax Cut? Don’t Hold Your Breath"

Real Time Economics: U.S., Europe Look For a Fast Start In Trade Talks

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 trade negotiations, tariff exemptions, why U.S. women are rejoining the labor force and how kids fit into the dynamic, the pervasive gender wage gap, and another solid day for Chinese equities as officials talk up the economy. ZERO TARIFFS U.S. and European trade negotiators are chasing quick wins to cement a July cease-fire. Problem is, even seemingly simple trade moves can take years. The sides meet in Washington on Tuesday to start fulfilling President Trump’s goal of “zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods.” The focus for now is aligning American and European regulations on goods and services, Emre Peker reports. Because of the cost of adapting products to slightly different standards, coordination could yield huge savings Continue reading "Real Time Economics: U.S., Europe Look For a Fast Start In Trade Talks"

Real Time Economics: Why China’s Stock Market Rebounded After Another Sign of Slowing Economic Growth

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 big-guns response to tepid economic data, volatility in U.S. markets, how trade tensions could lock U.S. hog farmers out of the world’s biggest pork market, and more speculation on where Amazon will plunk its HQ2. CHINA’S ECONOMY SLOWS… China’s economic expansion slowed to its weakest pace since the financial crisis. While the economy remains on track to meet Beijing’s full-year growth target of about 6.5%, the third-quarter performance underscores recent trouble—a scaleback of industrial production, slowing retail sales, anemic big-ticket investments and rising corporate defaults, Lingling Wei reports. Part of the slowdown is due to Beijing’s initiative of the past two years to contain debt and fend off financial risks. Even though the country started to loosen its control on credit Continue reading "Real Time Economics: Why China’s Stock Market Rebounded After Another Sign of Slowing Economic Growth"