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"
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?"
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"
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"
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"
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"
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"
The U.S. government releases its broad measure of the October labor market on Friday. Economists surveyed by The Wall Street Journal expect the Labor Department to report employers added 188,000 jobs during the month and unemployment held at 3.7%. Here are five things to watch in the report. 1. Wage Breakthrough Workers’ wages are poised to break through a 3% annual growth ceiling that’s held firm for nearly a decade. Economists surveyed by The Wall Street Journal project that average hourly earnings advanced 0.2%, or about 5 cents an hour, in October from September. Such an increase would result in wages advancing 3.1% from a year earlier. Wages haven’t exceed 3% year-over-year growth since April 2009. The strong annual gain in October in part reflects that wages declined, on a monthly basis, in October 2017. Still, the broader trend is one of improving pay for workers. Continue reading "5 Things to Watch in the October Jobs Report"
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"
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"
Puerto Rico lost 35,000 jobs in the month after Hurricane Maria struck. One year later, employment in the storm-battered island still hasn’t recovered. Maria—the worst storm to hit Puerto Rico in nearly a century—knocked out electricity across the island and ravaged roads and infrastructure. Thousands of small businesses closed, a huge blow to the island’s already suffering economy. “Most of the jobs are generated by small businesses, and small businesses were hit the hardest by the hurricane,” said Edwin Meléndez, director of the Center for Puerto Rican Studies at Hunter College, City University of New York. Employment in the U.S. territory had been on a steady descent since 2006. The storm brought on a far starker fall. In September 2017, when Hurricane Maria made landfall, there were 871,000 jobs. While Puerto Rico was able to recover some of the lost jobs in subsequent months, payrolls clocked in at Continue reading "What Puerto Rico’s Job Market Looks Like a Year After Hurricane Maria"
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"
How would female job hunters fare in the next recession? Likely better than men, if history is any indication. While the unemployment rate for women has moved in tandem with that of men since the 1980s, there is one notable exception—during recessions. When the economy contracts, joblessness spikes higher among men than women. The recent downturn offered the latest glimpse of this phenomenon. The male rate hit a high of 11.1% in 2009, well above the female peak of 9.0% in 2010. This gap reflects the gender concentrations in different industries and occupations, economists say. “Women are more likely to be in education and health…you don’t fire all teachers…and doctors during a recession,” said Heidi Shierholz, senior economist at the left-leaning Economic Policy Institute. Male workers, meantime, hold disproportionate shares of the jobs in sectors such as manufacturing and construction, which are typically hard-hit by recessions. As employment in Continue reading "What a Recession Could Mean for Women’s Unemployment"
I heard about a cool program that helps NYC tech companies build more diverse teams. It is called Winternships. The program is run by a group called WiTNY (Women in Tech and Entrepreneurship in NY) which is a three year-old collaboration between Cornell Tech and CUNY to drive more female students into tech majors or minors, and into the NYC tech ecosystem. It works like this: A Winternship is a paid, three-week internship experience during the January academic recess for freshman and sophomore women in tech. Participating companies design an ‘immersion’ experience in their business – students sit in on meetings, meet executives, go on site visits — and they work together on a challenge project that they pitch on the last day. WiTNY identifies students based on a match between your needs and their skills. Their team will even help you craft the Wintern experience if you want. Here
Continue reading "Winternships"
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 Fed might react to President Trump’s criticism, the steep cost of unwinding globalization, more evidence the U.S. economy is firing on all cylinders, and the most competitive economy in the world. TRUMP ATTACKS THE FED (AGAIN) President Trump again said the Federal Reserve is raising short-term interest rates too fast, calling the U.S. central bank “my biggest threat.” The president acknowledged Jerome Powell was his pick to lead the Fed but demurred when asked directly if the chairman would be out of a job if his decisions prove misguided, Kate Davidson reports. “I put him there, and maybe it’s right, maybe it’s wrong,” he said in an interview with the Fox Business Network. “I put a couple of other people Continue reading "Real Time Economics: Trump’s Fed Criticism Intensifies | Brexit’s Toll On the U.K. | The U.S. Economy Is Booming"
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 possible productivity breakout, an IMF warning on emerging markets, how the Fed isn’t listening to President Trump, and Turkey’s plan to Whip Inflation Now. RECIPE FOR SUCCESS One missing ingredient through much of the nine-year U.S. expansion: consistent gains in worker productivity. That may be changing. Productivity accelerated at the strongest pace in more than three years this spring. Since, the unemployment rate fallen to the lowest level in nearly 49 years and investors are expecting another quarter of double-digit growth as the third-quarter earnings season kicks off. That should be a recipe for investment in labor-saving technology. With low inflation, “the only way companies will be able to maintain profit margins is through efficiency (productivity) gains,” Natixis’s Joseph LaVorgna writes. Fed Continue reading "Real Time Economics: Can U.S. Workers Get More Productive? | IMF Warning for Emerging Markets | Trump Dumps On the Fed"
U.S. employers added 134,000 jobs and the unemployment rate fell to its lowest level since 1969 in September. The total number of nonfarm payroll jobs rose by 1.7% over the past year, a pace that’s been little changed over the past two years. Weekly wages increased about 3.4% while hourly wages are up about 2.8% over the past year. Most of those gains, however, are only a little bit higher than the inflation rate. The unemployment rate of 3.7% is now the lowest since 1969. Broader measures of unemployment, which include discouraged workers who have given up searching for work, touched the lowest level since that data began in 1994. The broadest measure of underemployment, which also includes part-time workers who would like full-time work, remains higher than in the late 1990s and early 2000s. The share of the population that is in the labor Continue reading "The September Jobs Report in 9 Charts"
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 September is out at 8:30 a.m. ET. Today’s newsletter looks at emerging labor market trends, White House strategy on trade and national security, Fed independence, and why there’s no such thing as a free lunch. NOW HIRING: NO DEGREE REQUIRED The September employment report is expected to show another solid month of job growth and a historically low unemployment rate. After a record 96 consecutive months of job creation, what do we have? “A view of the U.S. labor market that was inconceivable just a few years ago; the threat of labor shortages is more acute in blue-collar and low-paid services occupations than in white-collar occupations,” say Conference Board economists Gad Levanon and Frank Steemers. That’s showing up in Continue reading "Real Time Economics: Why Employers Can’t Find Blue-Collar Workers | Trump’s New Trade Template | ‘The Fed Is Independent’"
The Labor Department releases its broadest look at the U.S. job market for September on Friday. Economists surveyed by The Wall Street Journal expect employers added 180,000 jobs during the month and see the unemployment rate ticking down to 3.8%. Here are five things to watch in the report. 1. Weather Effect? Don’t expect Hurricane Florence, which struck the Carolinas in the middle of the month, to have a major impact on the unemployment rate or payroll growth. The projected payroll increase is just a shade below the 194,000 jobs added on average each month in the past year. The timing of the storm, falling late in the week that households were asked about employment status, means many of those affected wouldn’t be counted as unemployed. And the storm hit a relatively less populated area of the country in comparison with storms that struck Houston and New Continue reading "5 Things to Watch in the September Jobs Report"
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 extraordinary U.S. economic growth, rising bond yields, collateral damage in emerging markets, why U.S. worker wages might take a step back in September, and the continuing demise of the shopping mall. HOW ABOUT THAT ECONOMY! The 10-year U.S. Treasury yield rose to its highest level in more than seven years as investors bet on strong economic growth and rising inflation. The immediate cause: robust economic data and easing trade tensions after the U.S., Mexico and Canada hashed out a new pact. The 10-year Treasury is a closely watched barometer of sentiment toward growth and inflation. Investors appear to expect more of both. It’s also used as a reference for everything from auto loans to mortgages. Higher yields likely mean higher Continue reading "Real Time Economics: How Long Can the U.S. Economic Expansion Last? ‘Effectively Indefinitely.’"