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"

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: 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!"

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"

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"

“Best Ever” Economy?

@TBPInvictus here, with a simple question: How much credit does Trump deserve for the current state of the economy? This should be easy to answer, but it has Trump himself keeps confusing fact and fiction, making this blurry int he eyes of some. Objective observers wonder why the compulsion to exaggerate what would normally be considered … Read More The post “Best Ever” Economy? appeared first on The Big Picture.

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"

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"

Five Things to Watch in the August Jobs Report

The Labor Department releases its monthly snapshot of the nation’s labor market Friday. Economists surveyed by The Wall Street Journal expect it to show employers created 192,000 jobs in August and that the unemployment rate fell to 3.8% from 3.9% a month earlier. Here are five things to look for in the report. 1. Declining jobless rate Watch for the unemployment rate to tick down for the second straight month–and don’t rule out the possibility the jobless rate falls to 3.7%, the lowest level since 1969 during the Vietnam War. Jobless claims, a proxy for layoffs, have remained at historically low levels, a signal of labor-market strength. 2. Hiring to regain steam Hiring will likely pick up after a July slowdown. Employers have added an average 215,000 a month to payrolls this year, above the average 184,000 jobs added in the comparable prior-year period. July payrolls Continue reading "Five Things to Watch in the August Jobs Report"

Real Time Economics: There’s a Lot More to Trade Flows Than Just Tariffs

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 why the U.S. trade deficit is widening, what to expect in Friday’s jobs report, Trump’s latest comments on Nafta, wages, and Amazon’s latest foe: Bernie Sanders. TRADING PLACES The two main drivers of the trade balance are the differential between U.S. and foreign growth, and the dollar. Both point to a widening deficit: the U.S. is booming while foreign, in particular emerging market, growth falters. U.S. interest rates are rising, holding the dollar near a 15-year high. It’s taken a while for the predicted effect on trade to appear because of temporary factors. But in July exports dropped 1% and imports, led by autos and capital equipment, rose 0.9%. The monthly deficit jumped to $50 billion from $45.7 billion. Continue reading "Real Time Economics: There’s a Lot More to Trade Flows Than Just Tariffs"

Why West Virginia Metros Are the Nation’s Most Troubled Labor Markets

Nine years into the economic expansion, metros across the nation are posting double-digit job growth. But West Virginia cities have yet to share in these gains. The coal-based state is home to three of the 10 U.S. metro areas posting the steepest job losses since the recession ended in mid-2009, according to Labor Department data. In Charleston, West Virginia’s capital, employment declined by 7.7% from June 2009 through July of this year. Parkersburg and Weirton, other West Virginia cities in the northern region of the state, saw the number of jobs drop over this period by 6.8% and 9.5%, respectively. “The demise of coal [has] really battered the local economy,” said Matt Mowell, senior economist at Oxford Economics. “You really don’t have enough of a diverse industry base in the state to pick up any of the slack.” The coal industry has been steadily losing Continue reading "Why West Virginia Metros Are the Nation’s Most Troubled Labor Markets"

Real Time Economics: The U.S. Labor Market Looks Great. The Housing Market Not So Much.

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 the labor market is creating opportunity for more workers, a respite from emerging-market concerns, record orders for big rigs, Australia’s warning for the U.S., and the housing market’s soft summer. THE KIDS ARE ALRIGHT The unemployment rate among young Americans fell to its lowest level in more than 50 years this summer. That’s the latest sign a tight labor market is generating more opportunities for groups often overlooked by employers. The unemployment rate for adults without a high-school diploma fell to a record low in July. Among racial groups, the unemployment rates for Latinos and Blacks have touched record lows this year, Andrew Duehren reports. The latest hiring trend may also help explain so-so wage growth. Rather than bidding more for experienced workers, employers Continue reading "Real Time Economics: The U.S. Labor Market Looks Great. The Housing Market Not So Much."

Real Time Economics: Turkish Lira’s Collapse Ripples Through Financial Markets

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 what Turkey’s economic crisis means for other markets, a pivot on U.S. trade policy toward poorer nations, how homeowners are dodging one big source of inflation, and whether we’re running out of construction workers. RECORD LOWS FOR LIRA The Turkish lira hit fresh record lows on Monday, rattling emerging markets around the world. The South African rand fell to a nearly two-year low against the dollar while the Chinese yuan neared its weakest level in more than a year. That’s driving up the cost of servicing dollar-denominated debt in emerging markets at a time when investors were already skittish. Turkey’s central bank pledged to provide “all the liquidity the banks need.” Markets shrugged. And Federal Reserve policy also matters: Rising U.S. interest Continue reading "Real Time Economics: Turkish Lira’s Collapse Ripples Through Financial Markets"

Gig Economy is Shrinking

Torsten Sløk was our MIB guest this week; here is a recent chart of his worth sharing: Source: Torsten Sløk, Ph.D., Deutsche Bank Research Sløk: In the BLS employment data an Uber driver is a contingent worker. The definition of a contingent worker is someone who doesn’t have an implicit or explicit contract for ongoing… Read More The post Gig Economy is Shrinking appeared first on The Big Picture.

Real Time Economics: The U.S. Has More Job Openings Than Unemployed; Tariffs Take a Toll On Small Business

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 record number of job openings in the U.S., small businesses struggling with tariffs while the Trump administration readies round two for China, a speed bump for the revised U.S.-South Korea trade pact, and the long-lost Phillips curve’s reemergence in … Japan.  READY, AIM, HIRE Unfilled jobs are piling up across the U.S. economy. U.S. job openings reached 6.7 million last quarter, the highest level on record, as an expanding economy demands more workers and a historically low unemployment rate means fewer are available. The situation is particularly acute in the transportation, retail and business-services sectors, Eric Morath and Jennifer Smith report.
Case study: Scotlynn Group is turning down work for lack of employees. The Fort Myers, Continue reading "Real Time Economics: The U.S. Has More Job Openings Than Unemployed; Tariffs Take a Toll On Small Business"

Real Time Economics: U.S. Companies Look for Higher Prices to Offset Rising Costs

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 strong profits and rising prices, a Canadian boycott and other fallout from trade tensions, and the booming U.S. labor market. PROFITS, PRICES AND INFLATION America’s biggest companies are reporting some of the strongest earnings growth since the recession, boosted by lowered tax rates and a robust U.S. economy that is fueling demand. Profits at S&P 500 companies jumped an estimated 23.5% in the three months through June, Thomas Gryta reports. What could go wrong? Investor are wary of rising interest rates, trade tension and increasing costs for labor and supplies. Companies ranging from Kraft Heinz to Winnebago Industries are trying to push through price increases, which will help determine how the rest of the year shakes out.  Inflation watch: Continue reading "Real Time Economics: U.S. Companies Look for Higher Prices to Offset Rising Costs"

The July Jobs Report in 8 Charts

U.S. employers added 157,000 jobs and the unemployment rate fell back to 3.9% in July. Over the past year, the number of jobs increased by 1.6%. That’s down slightly from last month, and the rate has gradually been trending downward since 2015. Hourly wages rose 2.7%, while weekly wages rose 3%. Both figures are down somewhat since last month. With inflation picking up, hourly wages are running below the rate of inflation, meaning that real wages are slipping. After climbing last month, the primary measures of unemployment all fell slightly this month. The broadest measure of unemployment, which includes discouraged workers who’ve stopped searching for work as well as part-time workers who want full-time work, fell to a new 17-year low. 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. Continue reading "The July Jobs Report in 8 Charts"