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"

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"

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: Global Stocks Rebound | Trump Says Fed is ‘Out of Control’ | Social Security Boost for Seniors

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 global markets, President Trump’s unhappiness with the Fed, bond yields, Social Security payments, and the latest developments in U.S.-China relations. IS IT OVER? U.S. stocks tumbled for a second straight day Thursday. But global shares rebounded Friday, calming jittery investors who had been weighing whether this week’s deep selloff was the beginning of a broader downturn or simply a two-day blip, Avantika Chilkoti reports. Catalysts: China posted better-than-expected growth in exports, the U.S. Treasury Department next week is expected to find that China isn’t manipulating the yuan, and President Trump plans to meet with Chinese leader Xi Jinping next month, raising hopes that a further escalation in trade tensions may be averted. Next up: Investors are watching major Continue reading "Real Time Economics: Global Stocks Rebound | Trump Says Fed is ‘Out of Control’ | Social Security Boost for Seniors"

Real Time Economics: Global Markets Dive | ‘I Think Fed Has Gone Crazy’ | To Catch a Thief

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 spark for the latest stock selloff, President Trump’s shot at the Fed, inflation, another emerging-market bailout, and an industrial spying arrest. FOLLOW THE LEADER A sharp selloff in U.S. stocks spilled over into Asian and European markets Thursday. Tech stocks were hit the hardest as investors refocused on slowing global growth, rising bond yields and increasing trade tensions. U.S. stocks have largely been isolated from recent turbulence in emerging markets. That changed Wednesday, with the Dow Jones Industrial Average and the tech-heavy Nasdaq Composite falling sharply, Steven Russolillo and Mike Bird report. CRAZY TRAIN The latest rotation out of tech and other growth stocks was sparked in part by the recent jump in government-bond yields and the Federal Reserve’s interest-rate increases. President Continue reading "Real Time Economics: Global Markets Dive | ‘I Think Fed Has Gone Crazy’ | To Catch a Thief"

Real Time Economics: Has the U.S. Economy Already Peaked?

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, few signs of inflation, half-a-Nafta, a laconic Fed, Italy’s  free-spending government, and Japan’s strongest stock market in nearly three decades.  PEAK ECONOMY? The U.S. economy is growing at one of the fastest paces of the nine-year expansion. Is it all downhill from here? Gross domestic product came in at a high-flying 4.2% annual rate in the second quarter. The third quarter is looking good, but not nearly as good after data showing a widening trade deficit and softening business investment this summer. Economists knocked down their third-quarter GDP estimates: JPMorgan to 3% from 3.5%, Barclays to 2.8% from 3.2%, Morgan Stanley to 2.7% from 3.4% and the Atlanta Fed’s GDPNow tracker fell to Continue reading "Real Time Economics: Has the U.S. Economy Already Peaked?"

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: 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"

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"

Real Time Economics: Dollar Strengthens as Turkey’s Troubles Rattle Currency 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 a wild ride for currency markets, the economic outlook for the U.S., U.K. and Japan, and one high-class problem for a resurgent manufacturing sector—American factories are running short of parts. CURRENCY CRASH The dollar rose to its strongest point in more than a year while Turkey’s lira, Russia’s ruble and other currencies tumbled. Turkey: The lira has lost more than 20% over the week as international markets soured on the country’s capacity to repay its foreign-currency debts. Concerns about the health of Turkey’s financial system are rippling through global markets, Mike Bird writes.
Russia: U.S. sanctions roiled Russia’s currency and blue-chip stocks. Since 2014, Western sanctions have taken a severe toll on Russia’s economy, wiping out half of the ruble’s value, Continue reading "Real Time Economics: Dollar Strengthens as Turkey’s Troubles Rattle Currency Markets"

Real Time Economics: How the Supreme Court Affects Inflation; the Latest On Tariffs and the Dollar

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’s moving inflation, Alcoa bid to let more aluminum into the U.S., supply and demand in food and energy markets, the latest on the dollar’s ascent, and how owning a TV may not be the best thing for your sex life. INFLATION WATCH Inflation is back in the spotlight this week with release of July producer and consumer prices. Everyone wants to know how tariffs are affecting costs for business and consumers. But you know what may be an even bigger deal (for now)? The Supreme Court decision authorizing states to make online retailers collect sales tax. The government estimates the decision will generate $8 billion to $13 billion in additional taxes. Morgan Stanley economists figure that will feed into the Federal Reserve’s preferred Continue reading "Real Time Economics: How the Supreme Court Affects Inflation; the Latest On Tariffs and the Dollar"

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"

5 Things to Watch in the July 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 190,000 jobs in July and that the unemployment rate fell to 3.9% from 4.0% a month earlier. Here are five things to look for in the report. 1. Lower jobless rate Watch for the unemployment rate to tick down after a jump to 4.0% in June. Jobless claims, a proxy for layoffs, have remained at historically low levels, supportive of strong labor market conditions. Further, concerns that tariffs will cause companies to hold back hiring have yet to materialize in a widespread way. The question is, how low can unemployment fall without sparking overheating? 2. Hiring hits sweet spot Through the first half of the year, employers added an average of 215,000 a jobs a month, an unexpected acceleration from last year’s first-half Continue reading "5 Things to Watch in the July Jobs Report"

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: 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"