Medical-Marijuana Legalization Leads to Baby Boomlet, Paper Says

Turn on, tune in, have babies. The tide of medical-marijuana legalization making its way through American states is leading to a notable uptick in the birth of babies, according to a new paper published by the National Bureau for Economic Research. According to the National Conference of State Legislatures, 33 states and Washington, D.C., allow the once verboten drug to be used for various health-related reasons. And in these states, the researchers—Michele Baggio and David Simon of the University of Connecticut and Alberto Chong of Georgia State University—found an uptick in marijuana use. And when more people smoke marijuana, they get friskier and, apparently, more careless. After legalization, there’s “increased frequency of sexual intercourse, decreased purchase of condoms and suggestive evidence on decreased condom use during sex,” the authors wrote in the paper. “In the specific case of marijuana, it is typically believed that its consumption heightens Continue reading "Medical-Marijuana Legalization Leads to Baby Boomlet, Paper Says"

Real Time Economics: Big Tech vs. Flyover Country

This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here. The divide between urban and rural America may only be getting worse. Amazon’s and Google’s plans to bulk up on the East Coast underscore the country’s diverging fortunes as some of the biggest companies look for a critical mass of workers with tech and other key skills.  Good morning. Jeff Sparshott here to take you through the day’s top economic news. U.S. retail sales data, a key barometer of consumer spending, are out this morning. We’re also monitoring signs of a global slowdown, the cost of “free” social media, and the fate of Prime Minister Theresa May’s government after two senior members quit over Brexit. Let us know what you think by replying to this email. TO HAVE AND HAVE NOT Amazon.com and Google’s decisions to add tens of Continue reading "Real Time Economics: Big Tech vs. Flyover Country"

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: 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"

Some Fed Bond Purchases Spurred Hiring, Central Bank Paper Says

WASHINGTON—At least some of the Federal Reserve’s bond buying in the wake of the 2008 financial crisis bolstered employment, according to a recent paper by staffers at the central bank’s board of governors.

The third round of such purchases, also known as quantitative easing, starting in late 2012, spurred banks with large holdings of mortgage-backed securities to lend more to companies, authors Stephan Luck and Tom Zimmermann found. Shortly thereafter, U.S. counties with such banks saw faster employment growth—up to 0.4 percentage point more per quarter—than counties where banks held fewer mortgage-backed securities.

Employment growth in the two sets of counties was similar for more than 18 quarters before the implementation of QE3, as the program was known.

The findings come as policy makers continue to debate the full impact of the unconventional stimulus measures taken by the Fed after interest rates, reduced to near zero by the end Continue reading "Some Fed Bond Purchases Spurred Hiring, Central Bank Paper Says"

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?"

Who Gets Credit for Economy, Obama or Trump? The Answer Is Both

President Trump and former President Obama sparred on the campaign trail about who deserves credit for the strong economy, but the record is more complex than either describes. While economic growth has been faster during Mr. Trump’s first 21 months in office than it was during Mr. Obama’s eight years, federal debt is growing faster now than it was during Mr. Obama’s second term. Mr. Obama, meantime, presided over faster overall growth in payroll jobs during his second term, but growth in manufacturing payrolls under Mr. Trump is faster than during Mr. Obama’s two terms. And while the stock market has rallied under Mr. Trump, it hasn’t measured up to the rebound during Mr. Obama’s first term from lows in the financial crisis. No comparison is perfect. Mr. Obama came to office during a deep recession and financial crisis. Mr. Trump came into office during a long run of steady Continue reading "Who Gets Credit for Economy, Obama or Trump? The Answer Is Both"

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"

How Can the Field of Economics Diversify? Here Are Janet Yellen’s Thoughts

To help economics become a field of more diverse thought, perhaps the profession should take a look at what sorts of research is rewarded, former Federal Reserve Chairwoman Janet Yellen contends. On a panel at a Pathways to Gender Equality conference in Washington, D.C., Friday, Ms. Yellen, the first female chief of the central bank in its more than 100-year history, emphasized the importance of diversifying economic research methods and topics. The economics profession, Ms. Yellen said, tends to value mathematical modeling and is increasingly becoming a harder science, which could be biasing economists against new ideas. “What’s happened in economics is that anything that could be called anecdotal or case study types of methods are simply ruled out,” Ms. Yellen said. “To my mind this is a serious methodological bias that is blinding the profession to very important phenomena.” Ms. Yellen highlighted economists’ failure to predict Continue reading "How Can the Field of Economics Diversify? Here Are Janet Yellen’s Thoughts"

Just How Good Is the October Job Market? Here’s How It Compares

U.S. employers added 250,000 jobs, the unemployment rate held steady at 3.7% and hourly wages posted their strongest growth since 2009 in October. Wage growth climbed 3.1% from a year ago, on an hourly basis, topping 3% for the first time since the recession. On a weekly basis, wages jumped an even stronger 3.4%. The number of jobs grew by 1.7% over the past year. That pace of gains is a slight acceleration from a year ago but below the postrecession highs seen in 2015. Broader measures of unemployment, such as those that include discouraged workers, and part-time workers who can’t find full-time work, have also continued to trend downward. The share of Americans participating in the labor force has been little changed for the past five years, as job gains have been partially offset by the ongoing retirement of the baby boomer generation. Among Continue reading "Just How Good Is the October Job Market? Here’s How It Compares"

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: 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"

The High Cost of Rising Tariffs

The collapse of the Soviet Union and the rise of emerging markets 30 years ago were accompanied by a string of economic papers arguing nations that liberalized trade grew much faster than those that didn’t. Country after country followed that advice to fight recessions. Three decades later, the phrase “trade liberalization” is often criticized as globalism. A new era of protectionism is being led by the world’s largest economy, the U.S., as it figures out how to extend an economic expansion. Four International Monetary Fund economists—Davide Fuceri, Swarnali Hannan, Jonathan Ostry and Andrew Rose—decided to take a look again at the relationship between trade and prosperity, only this time by analyzing the impact of trade restrictions during a time of economic growth. Specifically, they analyzed data from 151 nations between 1963 and 2014, looking for what occurred when tariffs rose by about 3.6 percentage points—small potatoes Continue reading "The High Cost of Rising Tariffs"

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"