Parsing the Fed: How the August Statement Changed From June

The Federal Reserve releases a statement at the conclusion of each of its policy-setting meetings, outlining the central bank’s economic outlook and the actions it plans to take. Much of the statement remains the same from meeting to meeting. Fed watchers closely parse changes between statements to see how the Fed’s views are evolving. This tool compares the latest statement with its immediate predecessor and highlights where policy makers have updated their language. This is the August statement compared with June. [wsj-responsive-sandbox id = "0" ] RELATED Federal Reserve Holds Rates Steady, Says Economy Is Strong Federal Reserve Likely to Keep Rates Steady Fed Looks for Goldilocks Path as Jobless Rate Drops (July 29)

Real Time Economics: Trump Advisers Push for Higher Tariffs on China

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 Trump administration deliberations on tariffs, how the U.S. economy is growing while others are slowing, signs of stronger wages and rising inflation, and what to expect when the Federal Reserve’s policy meeting concludes today. LET’S TALK Some White House advisers are pushing President Donald Trump to apply tariffs as high as 25% on $200 billion of Chinese goods, up from an original proposal for 10%. The hope is that the harsher measures would bring Chinese negotiators to the table. The White House won’t make a final decision until at least late August, Bob Davis and Lingling Wei report. Meanwhile, the administration is split internally on the best way forward. Hawks and doves: U.S. Trade Representative Robert Lighthizer pushing for more tariffs. Treasury Secretary Steven Mnuchin Continue reading "Real Time Economics: Trump Advisers Push for Higher Tariffs on China"

Real Time Economics: China Signals Slower Growth, Europe’s Economy Sputters

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 signs of weaker growth in Asia and Europe, the best-case scenario for the Fed, a massive deficit for U.S. pensions, and the so-so startup scene in the U.S. TARIFFS SQUEEZE CHINA’S ECONOMY China’s business activity faltered in July. Official surveys of factories and service providers highlighted sluggish domestic demand, and slower production and investment, Liyan Qi and Grace Zhu report. The manufacturing purchasing managers’ index fell to a five-month low, while the import subindex of slipped to a 23-month low. Exports held steady thanks to a weaker yuan. The first official data reflecting the impact of U.S. tariffs adds to signs that trade tensions have started to pinch China’s economic growth. EUROPE DECELERATES The eurozone’s economy slowed in the three months Continue reading "Real Time Economics: China Signals Slower Growth, Europe’s Economy Sputters"

Real Time Economics: The Labor Market Is Tight, the Economy Is Strong, and Companies Are Raising 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 how companies are trying to expand the pool of potential workers, more fallout from tariffs, China’s shrinking trade deficit, and the economy’s strength and sustainability.  NO EXPERIENCE? NO DEGREE? NO PROBLEM! Employers are slowly abandoning preferences for college degrees and specific skill sets to speed up hiring and broaden the pool of job candidates. Only 23% of entry-level jobs now ask applicants for three or more years of experience, compared with 29% back in 2012, putting an additional 1.2 million jobs in closer reach of more applicants, Kelsey Gee reports. What’s happening? Many companies added requirements to job postings after the recession, when millions were out of work and human-resources departments were stacked with résumés. Now, the tightest job market in decades has Continue reading "Real Time Economics: The Labor Market Is Tight, the Economy Is Strong, and Companies Are Raising Prices"

Two Views of U.S.-China Trade Relations That Shape American Diplomacy

WASHINGTON—U.S.-China trade relations have largely been shaped by two veteran trade lawyers with very different views of how to influence Beijing. Charlene Barshefsky, President Bill Clinton’s trade representative, now 67 years old, negotiated China’s accession to the World Trade Organization. She is a multilateralist who sees herself as part of a tradition dating back to the Roosevelt administration of officials who nurtured international organizations, like the United Nations and the WTO, to build a peaceful and prosperous world. Adding China to the WTO in 2001 was the latest expansion of that U.S.-dominated system, she told a Senate panel in 2000.  “WTO accession represents a potentially profound and historic shift, building upon but going much further than China’s domestic reforms to date,” she said. In a July interview, she counted the gains. China has opened its economy in many sectors and become the world’s second-largest importer, giving Continue reading "Two Views of U.S.-China Trade Relations That Shape American Diplomacy"

What Fueled Second-Quarter U.S. Growth – At A Glance

Getty Images/Justin Sullivan
Heftiest Growth Rate in Four Nearly Four Years This is the strongest growth rate since 2014’s third quarter when the economy grew at a 4.9% rate. Last quarter’s surging growth came from accelerating spending by consumers and federal and state governments. Exports also picked up. Economists and policy makers are watching these data closely for signs the Trump administration’s late-2017 tax cuts are encouraging consumers and businesses to ramp up their spending. Climbing Capital Expenditures Fixed nonresidential investment grew at a 7.3% annual rate in the second quarter, the Commerce Department said. This gauge of capital expenditures has grown robustly since the beginning of 2017, after moderating since 2014. The Trump administration’s late-2017 tax cuts were intended to spur such business investment. Some have argued because investment by companies had already been rising, the tax cuts may not have been the main factor in that growth. Continue reading "What Fueled Second-Quarter U.S. Growth – At A Glance"

Why Fourth Quarters Are the New Growth Laggards

The economy has often appeared weaker than it is at the beginning of the year because of how the government measures growth. But after years of grumbling from financial heavyweights, officials say they have have solved the problem. First-quarter gross domestic product growth from 2012 through 2017 has averaged an annual rate of 2.1%, according to fresh data the Bureau of Economic Analysis released Friday in a periodic revision. That is substantially higher than the previous 1.6% average, which made it the weakest of the four quarters. Changes to seasonal adjustment typically increase growth in some quarters at the expense of others with no impact on the year as a whole. That effect, along with other revisions, resulted in the fourth quarter now clocking the slowest average growth at 1.7%. When not seasonally adjusted, economic growth is typically slower in the first three months of a year Continue reading "Why Fourth Quarters Are the New Growth Laggards"

Real Time Economics: Did Trump Give Us a Hint on GDP? ‘If It Has a 4 In Front of It, We’re Happy’

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 U.S. economic growth, inflation expectations, Trump’s tactical shift on trade, slower growth in China and France, and how investors unfriended Facebook. TRUMP PREVIEWS GDP Hoping for a sneak peek of Friday morning’s GDP numbers? President Donald Trump outlined his expectations for the economic growth report: “Somebody actually predicted today, 5.3. I don’t think that’s going to happen; 5.3. If it has a 4 in front of it, we’re happy. If it has like a 3, but it’s a 3.8, 3.9, 3.7 we’re OK.” So, high 3s or low 4s? We’ll know for sure when the Commerce Department publicly releases its first official estimate of second-quarter gross domestic product at 8:30 a.m. ET. The president is privy to the report Continue reading "Real Time Economics: Did Trump Give Us a Hint on GDP? ‘If It Has a 4 In Front of It, We’re Happy’"

Real Time Economics: Trump Announces ‘New Phase’ For U.S.-EU Trade, Auto Tariffs On Hold

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 a thaw in U.S.-EU relations, trade fallout for Detroit’s Big Three, how China killed Qualcomm purchase of a Dutch chip maker, a big drop for Chinese investment in the U.S., and how many steel jobs there are in America. FRIENDSHIP NEVER ENDS President Donald Trump and European Commission President Jean-Claude Juncker turned down the heat on a trade dispute between two of the world’s largest economic powers. The leaders agreed to begin discussions on eliminating tariffs and subsidies, and to resolve U.S. Steel and aluminum tariffs as well as Europe’s retaliatory measures, Valentina Pop, Vivian Salama and Bob Davis report. The deal: The EU buys more natural gas and soybeans from the U.S., and the two sides “work together toward Continue reading "Real Time Economics: Trump Announces ‘New Phase’ For U.S.-EU Trade, Auto Tariffs On Hold"

Real Time Economics: White House Readies Aid for Farmers Hurt In Trade Battles

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 who’s vulnerable in escalating trade fights, President Trump’s warning ahead of the EU’s White House visit, how some (but not all) manufacturers are shrugging off tariffs, and why China is letting the yuan fall. RESCUE ME The Trump administration is extending $12 billion in emergency aid to farmers as U.S. agriculture feels the impact of escalating trade disputes. The U.S. government plans to provide incremental payments to support prices of some of the hardest-hit commodities, including soybeans, sorghum, cotton, corn, wheat and pork, Vivian Salama and Jacob Bunge report. It’s a short-term solution for a sector that’s taken a series of hits. China, a huge market for U.S. agricultural exports, has applied tariffs on $34 billion worth of U.S. goods, including soybeans and Continue reading "Real Time Economics: White House Readies Aid for Farmers Hurt In Trade Battles"

Why Treasury Hasn’t Labeled China, EU as Currency Manipulators

President Donald Trump said Friday that “China, the European Union and others have been manipulating their currencies and interest rates lower,” returning the spotlight to the issue. Mr. Trump was alleging that these economies take policy measures to lower the value of their currencies relative to others to make their exports cheaper on world markets. The U.S., by contrast, allows the value of the dollar to be determined by global financial markets. As a candidate, Mr. Trump repeatedly promised to designate China a currency manipulator—a label that would potentially open the country up to economic penalties. But his Treasury Department has three times declined to do so. The action would come in one of the Treasury’s semiannual foreign exchange reports; the next one is scheduled for October. Treasury hasn’t labeled any nation a manipulator because none of them meets its three-part test. These are the three components: 1. Continue reading "Why Treasury Hasn’t Labeled China, EU as Currency Manipulators"

Real Time Economics: The U.S. Housing Market Is Stuck In a Rut

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 sluggish U.S. housing market, the man President Trump called a “brutal killer,” a boost for uranium prices, stimulus and oil demand in China, and what it’s like to be bludgeoned to death with a Nerf bat. HOME SWEET HOME U.S. home sales are slumping, a potentially worrying trend for a key sector of the economy. Housing contributes about 15% to 18% of gross domestic product and drives home-improvement spending, construction and mortgage lending. For now, the housing slowdown is a blip in an otherwise booming stretch for GDP—Macroeconomic Advisers is tracking a 5% pace of growth in the second quarter. Longer term, a hot economy could compound problems: in this case with rising interest rates and spiraling construction costs. More entry-level buyers will end Continue reading "Real Time Economics: The U.S. Housing Market Is Stuck In a Rut"

Real Time Economics: $500B In Tariffs on Chinese Goods? ‘Definitely a Realistic Possibility’

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 Trump administration’s frustration with the Fed and China, U.S. industrial policy, how manufacturers are getting squeezed by rising costs, China’s tech catch-up, freezers full of meat, and why there aren’t enough caregivers for the elderly.  TARGET: THE FED, CHINA Last week ended with a bang. President Donald Trump signaled for a second straight day his frustration with the Federal Reserve’s policy of gradually raising interest rates, and then said he was prepared to impose U.S. tariffs on $500 billion worth of imports from China as part of his push to narrow U.S. trade deficits. The tough comments suggest the president could continue to escalate a feud with the Fed and take aim at currency markets, Nick Timiraos reports. Earlier in Continue reading "Real Time Economics: $500B In Tariffs on Chinese Goods? ‘Definitely a Realistic Possibility’"

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?"