It Can Cost $750,000 to Build an Affordable Housing Unit in California. Here’s Why.

A single unit of housing for a low-income family can cost nearly $750,000 to build in California, according to a government report that provides new details on the cost to taxpayers of building affordable housing in states with high land prices and heavy land-use regulations. A new report from the Government Accountability Office highlights stark disparities in the cost to build affordable housing that qualifies for tax credits between states like California, which has more land-use regulations, and Texas, where it is much easier to get approval to build. A typical unit for a low-income family in San Francisco and Los Angeles costs around $400,000 to build. In Texas, where land-use regulations are much looser, the cost is about a third of that. Median costs in Chicago and New York City were also high, at $315,000 and $282,000 respectively, the GAO found. The investigation into the efficiency and effectiveness of Continue reading "It Can Cost $750,000 to Build an Affordable Housing Unit in California. Here’s Why."

Real Time Economics: U.S. Stocks Hit Fresh High and Jobless Claims a Fresh Low

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 buoyant U.S. economy, a sluggish European economy, the U.K.’s decision to play Chequers while the EU plays chess, the U.S.-Korea trade deal, Swiss contrarianism, and why you should stay away from hedge-fund managers who drive fast cars.   THE STOCK MARKET ISN’T THE ECONOMY Both stocks and underlying economic fundamentals are looking pretty good at the moment. The Dow Jones Industrial Average and S&P 500 set new highs. Household net worth hit another record. New claims for jobless benefits hit a fresh half-century low. Investors see next week’s expected increase in interest rates from the Federal Reserve as a testament to the strength of the economy. And the stock-market rally is expected to keep going. Accelerating economic growth has Continue reading "Real Time Economics: U.S. Stocks Hit Fresh High and Jobless Claims a Fresh Low"

Real Time Economics: U.S. Stocks Hit Fresh High and Jobless Claims a Fresh Low

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 buoyant U.S. economy, a sluggish European economy, the U.K.’s decision to play Chequers while the EU plays chess, the U.S.-Korea trade deal, Swiss contrarianism, and why you should stay away from hedge-fund managers who drive fast cars.   THE STOCK MARKET ISN’T THE ECONOMY Both stocks and underlying economic fundamentals are looking pretty good at the moment. The Dow Jones Industrial Average and S&P 500 set new highs. Household net worth hit another record. New claims for jobless benefits hit a fresh half-century low. Investors see next week’s expected increase in interest rates from the Federal Reserve as a testament to the strength of the economy. And the stock-market rally is expected to keep going. Accelerating economic growth has Continue reading "Real Time Economics: U.S. Stocks Hit Fresh High and Jobless Claims a Fresh Low"

Links (9/20/18)

Real Time Economics: The U.S. Housing Pipeline Is Clogged | China Trade Spat Gets Testy | Oktoberfest Inflation

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. economy’s soft spot, U.S.-China trade friction and fallout, Europe’s Amazon investigation, million-dollar relocation packages, and the price of a beer during Oktoberfest. WHAT’S WRONG WITH THE HOUSING MARKET? New-home construction jumped in August, though underlying numbers suggest the housing market is stuck in the mud. Notably, the pipeline for new homes is moving in the wrong direction. Permits for multifamily homes are at the lowest level in years. Single-family homes aren’t much better—permits hit the lowest level in a year at an annual pace of 820,000. During the 1990s, single-family permits averaged more than 1 million a year.
HOME SWEET APARTMENT Rising mortgage rates, a tight labor market, high prices for materials and a limited supply of desirable lots Continue reading "Real Time Economics: The U.S. Housing Pipeline Is Clogged | China Trade Spat Gets Testy | Oktoberfest Inflation"

Real Time Economics: Trump Threatens Tariffs On Almost All Chinese Imports

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, home improvement and higher interest rates, why employers are offering bonuses rather than raises, and where to find negative interest rates. CALL AND RESPONSE China’s government responded to fresh U.S. tariffs on $200 billion of its goods with $60 billion in retaliation. President Trump promised to punch back with another $267 billion in levies against China. The next U.S. tranche is months away and could be avoided altogether if the sides negotiate a truce. ADD IT UP Trump administration tariffs against China—implemented, on the way and threatened—would cover just about all imports from that country. That’s going to leave a mark. It’s hard to forecast precisely how much the economy could slow or inflation would rise. Continue reading "Real Time Economics: Trump Threatens Tariffs On Almost All Chinese Imports"

Real Time Economics: The Unintended Consequences of U.S. Tariffs | Apple Dodges a Bullet | Merry Christmas!

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 new U.S. tariffs, China’s response and corporate trade concerns, Larry Kudlow’s odd deficit math, and why retailers are already searching for holiday shopping-season workers.  HOW U.S. TARIFFS HELP CHINA U.S. tariffs have an unintended consequence: They’re forcing Chinese companies to make higher-quality products. Beijing in recent years has embarked on a campaign to ship low-skill factory work out of the country and build an economy that uses advanced manufacturing techniques to produce high-value goods. Tariffs have accelerated the process: they make selling low-cost goods to American consumers less profitable, Liza Lin and Dan Strumpf report. Case study: LTS Group plans to trim costs by using more robots at its Shenzhen operations, which make lamps, bulbs and other lighting products sold Continue reading "Real Time Economics: The Unintended Consequences of U.S. Tariffs | Apple Dodges a Bullet | Merry Christmas!"

Links (9/17/18)

Real Time Economics: U.S. Threatens China With $200B More In Tariffs, China Promises Retaliation

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.-China trade tensions, lessons from the last housing bust, a slow trickle for repatriated profits, and the limited economic fallout from hurricanes and other natural disasters.  TRADE FIGHT HEATS UP The Trump administration plans to unveil fresh tariffs on $200 billion in Chinese products as soon as this week. Beijing is debating new ways to retaliate. The threats from both sides of the Pacific risk upending negotiations aimed at staving off a new round of tit-for-tat penalties. Already, China has threatened to pull out of preliminary trade talks, Jacob M. Schlesinger, Lingling Wei and Bob Davis report. With the expected new round of U.S. tariffs, combined with earlier rounds, the Trump administration will have levied duties on roughly half of the Continue reading "Real Time Economics: U.S. Threatens China With $200B More In Tariffs, China Promises Retaliation"

Real Time Economics: Inflation Eases Up | China’s Economy Stumbles | Budget Deficit Balloons

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 worker pay amid slowing inflation, the biggest risk to the economy, another sign of a Chinese slowdown, misleading jobless claims, the fast-growing U.S. budget deficit, and Ben Bernanke‘s reflection on the financial crisis. INFLATION TAKES A BREATHER Inflation has been eating away at worker paychecks, so August’s consumer-price index was a welcome reprieve. The CPI, which gauges what Americans pay for everything from rent to razorblades, was up 2.7% from a year earlier, a slowdown from the prior two months. Core inflation, which excludes food and energy, rose 2.2%, slightly slower than in July, Eric Morath reports. Worker pay gains, by contrast, are accelerating. Adjusted for inflation, hourly earnings rose 0.2% from a year earlier. While modest, that’s an improvement from Continue reading "Real Time Economics: Inflation Eases Up | China’s Economy Stumbles | Budget Deficit Balloons"

Links (9/13/18)

Real Time Economics: The Trump Administration Reaches Out To 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 White House efforts to restart trade talks with China, a rush of central bank activity, a hawkish signal from the Fed, and (maybe not really) record household income in the U.S. A LITTLE MORE CONVERSATION The Trump administration asked China for a fresh round of trade talks later this month. The invitation from Treasury Secretary Steven Mnuchin comes as some White House officials said they sense a new vulnerability—and possibly more flexibility—among Chinese officials pressured by U.S. tariffs, Lingling Wei and Jacob M. Schlesinger report. It also follows a steady rise in political pressure on President Trump to ease up on trade fights ahead of November elections. No guarantee: Chinese officials have grown wary of the Trump administration’s unpredictable decision-making process and may Continue reading "Real Time Economics: The Trump Administration Reaches Out To China"

Real Time Economics: U.S. Workers Are Quitting Jobs at the Fastest Rate In 17 Years

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 pushback on Trump’s tariffs, a slightly softer China stance on trade, and how lots of job openings and low unemployment are encouraging workers to hop from one job to the next.  TROUBLE IN THE HEARTLAND Businesses are joining forces to try to persuade President Trump that tariffs are hurting U.S. industries. Organizations representing thousands of companies in industries including retailing, toy manufacturing, farming and technology plan to announce they are cooperating on a lobbying campaign called Tariffs Hurt the Heartland to oppose tariffs on imports, Brody Mullins and Andrew Duehren report. Some businesses are concerned about rising costs of imported materials; others, particularly farmers, about retaliatory tariffs imposed by China and Europe on U.S. exports. Swamp Thing: As of June 30, nearly Continue reading "Real Time Economics: U.S. Workers Are Quitting Jobs at the Fastest Rate In 17 Years"

Links (9/11/18)

Real Time Economics: No Breakthrough In U.S.-EU Trade Talks | Which Way for the Dollar? | Small-Business Sentiment Booms

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 talks, White House hyperbole, a schizophrenic dollar and perhaps a little too much optimism about the economy. NO BREAKTHROUGH At least the U.S. and European Union are talking. The sides are working to avert a trans-Atlantic economic fight by slashing tariffs and boosting commerce. U.S. Trade Representative Robert Lighthizer and European Trade Commissioner Cecilia Malmström met and said they had a “constructive” and “forward-looking” encounter. But that’s it. With $1 trillion in annual bilateral goods-and-services trade, the U.S. and the EU have repeatedly tried and failed to cut already-low trans-Atlantic duties, align regulations and open new markets by liberalizing sectors including agriculture and public procurement, Emre Peker reports. President Trump and his EU counterpart, Jean-Claude Juncker, in July pledged to deescalate Continue reading "Real Time Economics: No Breakthrough In U.S.-EU Trade Talks | Which Way for the Dollar? | Small-Business Sentiment Booms"

Real Time Economics: Trade, Tariffs, Apple and Inflation. It’s Going To Be Another Busy Week

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 trade rumblings, rising wages and signs of inflation, and the Federal Reserve’s efforts to get ahead of the next crisis. MADE IN THE U.S.A. OR ELSE. President Trump threatened tariffs on pretty much all Chinese exports to the U.S., China’s trade surplus with the U.S. hit another record, and the president told Apple to start making its products in the U.S. to avoid potential levies on Chinese-made goods. Phew. It’s going to be another eventful week. Quick recap: the U.S. has already imposed 25% tariffs on $50 billion in Chinese goods, another $200 billion is teed up, and Mr. Trump Friday said tariffs on yet another $267 billion in tariffs are ready to go and could Continue reading "Real Time Economics: Trade, Tariffs, Apple and Inflation. It’s Going To Be Another Busy Week"

Links (9/7/18)

Job-Market Boost in the Midterms? Evidence Suggests No

Republicans and Democrats are arguing about who gets credit for a strong job market that has sent the unemployment rate to lows rarely seen in the past half century. But it might not matter all that much for upcoming midterm elections because the jobless rate alone shows little connection to who wins and loses when voters go to the polls. The chart above compares two sets of data:
  1. The change in unemployment rate from the previous presidential election to the midterm election.
  2. The change in House seats by the president’s party during the midterm election.

For example, Democrats lost 13 seats during the 2014 midterm election, even though the unemployment rate had dropped from 7.7% in the 2012 presidential election to 5.8% by the time midterm voters headed to the polls. What’s striking about the chart is how it reflects the truism that the president’s party Continue reading "Job-Market Boost in the Midterms? Evidence Suggests No"

The August Jobs Report in 8 Charts

U.S. employers added 201,000 jobs and the unemployment rate held steady at 3.9% in August. Over the past year, the number of jobs increased by 1.6%. The figure has been the same for three straight months. Hourly wages rose 2.9% from a year earlier, the fastest pace since mid-2009. Weekly wages rose 3.2%. Inflation is eating away at some of those gains, though overall pay appears to be firming as the labor market tightens. The primary measure of unemployment held steady at 3.9%. The broadest measure, which includes discouraged workers who’ve stopped searching for work as well as part-time workers who want full-time work, fell to the lowest level since 2001. The overall labor-force-participation rate, defined as the share of the adult population either working or looking for work, has been little changed over the past four years. The share of the population with Continue reading "The August Jobs Report in 8 Charts"

Real Time Economics: Chances for a U.S.-China Trade Deal Fade | U.S. Job Growth Expected to Accelerate

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 escalating U.S.-China trade tensions, signs the U.S. economy is picking up as Europe’s slows, and your newest coworkers: Generation Z. Bonus: Greg Ip offers a sneak peek of his story on the 10th anniversary of Lehman’s collapse.  TARIFFS TODAY? Prospect for a U.S.-China trade deal are fading. The White House is getting ready to ratchet up pressure on China further by hitting as much as $200 billion in Chinese goods with tariffs of 25%, on top of the $50 billion of Chinese exports already facing 25% levies, Bob Davis and Lingling Wei report. An announcement could come as soon as Friday, though some observers expect the U.S. Trade Representative’s office to take time to review industry comments Continue reading "Real Time Economics: Chances for a U.S.-China Trade Deal Fade | U.S. Job Growth Expected to Accelerate"