Real Time Economics: Sears Declares Bankruptcy But U.S. Retail Sales Look Strong

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 consumer spending despite another retail bankruptcy, a fizzling housing market, U.S. tariffs and Chinese tensions, setbacks for Theresa May and Angela Merkel, and the unraveling of Saudi Arabia’s plans to become a regional investment hub.  TOUGH DAY FOR TOUGHSKINS Here’s a juxtaposition: Retail icon Sears is filing for bankruptcy, while U.S. retail sales for September are expected to grow a robust 0.7% from the prior month. For Sears, it’s a familiar story: Dozens of retailers have sought chapter 11 protection in recent years because of the consumer shift to online shopping, expensive store leases and heavy debt burdens, Lillian Rizzo and Suzanne Kapner write. The U.S. economy will barely notice. American consumers are feeling pretty good right now—confidence Continue reading "Real Time Economics: Sears Declares Bankruptcy But U.S. Retail Sales Look Strong"

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: Can U.S. Workers Get More Productive? | IMF Warning for Emerging Markets | Trump Dumps On the Fed

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"

Real Time Economics: IMF Downgrades Global Growth | China’s Yuan Stumbles | U.S.-China Relations Getting Frostier

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 trouble in emerging markets, China’s efforts to spur growth and stem capital flight, deteriorating relations between Washington and Beijing, bets on $100-a-barrel oil, and why men—but not women—who retire earlier die younger. SO MUCH TROUBLE IN THE WORLD The U.S. economy is roaring. That’s a problem. Pakistan’s decision to start bailout talks with the International Monetary Fund is the latest in a series of threats to hit emerging markets challenged by weakening currencies and rising U.S. interest rates. Pakistan has unique issues, but the stronger dollar and higher U.S. rates more broadly are leading capital to flow out of emerging markets. That has caused financial strain, including challenges paying off U.S. dollar debt and pressure on developing-economy stock markets, Josh Zumbrun, Continue reading "Real Time Economics: IMF Downgrades Global Growth | China’s Yuan Stumbles | U.S.-China Relations Getting Frostier"

Real Time Economics: Why U.S. Tariffs On Chinese Goods Are Here to Stay

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 trade strategy and China’s slowing economy, ultra-low U.S. unemployment, stocks and bonds, infrastructure investment,  holiday shopping, and Brazil’s presidential election. And congratulations to William Nordhaus and Paul Romer, winners of this year’s Nobel Prize in economics. HERE TO STAY While the White House is progressing on trade deals with allies in Canada, Mexico, Korea and Europe, its dispute with China looks increasingly intractable. Tariffs between the world’s two largest economies are likely cemented in place for years. President Trump has used tariffs as leverage to reach deals with Canada and Mexico. China is different. Tariffs aren’t simply a negotiating tactic for the U.S., but a way to change economic incentives. Using tariffs to make it more expensive for companies to export from Continue reading "Real Time Economics: Why U.S. Tariffs On Chinese Goods Are Here to Stay"

Real Time Economics: Why Employers Can’t Find Blue-Collar Workers | Trump’s New Trade Template | ‘The Fed Is Independent’

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’"

Real Time Economics: How Long Can the U.S. Economic Expansion Last? ‘Effectively Indefinitely.’

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.’"

Real Time Economics: Amazon Lifts Minimum Wage | ‘Extraordinary Times’ for the Fed | U.S.-China Talks Back On?

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 falling supply and rising demand for workers, the Fed’s extraordinary take on the economy, trade talks with China, Hurricane Florence’s limited impact on the labor market, and the market’s response to climate change. DEAL OF THE DAY Amazon.comid it will pay its employees at least $15 an hour starting next month. That’s fresh evidence the strong job market is forcing businesses to compete for lower-skilled workers and spreading the benefits of a long-running economic expansion, Eric Morath and Lauren Weber report. Will more companies be forced to follow? The supply of workers with advanced skills is always relatively limited, so their wages aren’t entirely tied to broader economic trends. But low-wage workers feel the peaks and valleys. When unemployment is high, they have to Continue reading "Real Time Economics: Amazon Lifts Minimum Wage | ‘Extraordinary Times’ for the Fed | U.S.-China Talks Back On?"

Real Time Economics: After a North America Deal, White House Refocuses on Trade With 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 the next challenge for White House trade policy, warnings on the global economy, complications for North American automakers, berry-picking robots, worker wages, and the IMF’s new chief economist. NAFTA DOWN, CHINA TO GO White House officials are betting that the U.S.-Mexico-Canada Agreement will give them more ammunition in their high-stakes battle with China. The pact removes the possibility of a North American trade war and will make the continent a more attractive place for investment. The administration figures that when combined with U.S. tariffs, foreign companies will start moving investment out of China. That would weaken China’s ability to produce next-generation technology and put additional pressure on Beijing to make trade concessions, Bob Davis writes. In addition to the new Nafta, the Continue reading "Real Time Economics: After a North America Deal, White House Refocuses on Trade With China"

Real Time Economics: Goodbye Nafta, Hello USMCA | China’s Economy Sputters | Is Oil Heading to $100?

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 President Trump’s newest trade deal, signs of trouble at China’s factories, job creation in Europe, better days for part-time workers, rising oil prices, and how a strong labor market is hitting Harvard.  U.S., CANADA CROSS THE FINISH LINE The U.S. and Canada reached a last-minute deal to revise the North American Free Trade Agreement, lifting a cloud of uncertainty over the quarter-century-old commercial bloc. The pending agreement will allow Canada to join an accord reached in late August between the U.S. and Mexico, and diminishes the prospects for President Trump to kill Nafta outright, Jacob M. Schlesinger, Kim Mackrael and Vivian Salama report. The U.S.-Mexico-Canada Agreement, or USMCA, makes significant changes to the continent’s commercial rulebook. The Continue reading "Real Time Economics: Goodbye Nafta, Hello USMCA | China’s Economy Sputters | Is Oil Heading to $100?"

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: U.S.-China Grievances Grow, Japan’s In and Canada’s Out

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 China is prying technology from American companies, White House pressure on Canada, trade progress with Japan, trouble in the Farm Belt, and the Fed’s steady path to higher interest rates. TECH TACTICS President Trump says China steals American know-how, and forced technology transfer is now a central part of the spiraling U.S.-China trade fight. Here’s what the WSJ’s Lingling Wei and Bob Davis found: Beijing leans on an array of levers to pry technology from American companies—sometimes coercively so. China’s tactics include pressuring U.S. partners in joint ventures to relinquish technology, using local courts to invalidate American firms’ patents and licensing arrangements, dispatching antitrust and other investigators, and filling regulatory panels with experts who may pass trade secrets to Chinese Continue reading "Real Time Economics: U.S.-China Grievances Grow, Japan’s In and Canada’s Out"

Real Time Economics: How Much Higher Will the Fed Lift Rates? | U.S. Ready to Boot Canada from Nafta | Consumer Confidence Hits 18-Year High

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 Federal Reserve’s path for interest rates, the future of Nafta, and absolutely exuberant American consumers. HIGHER AND HIGHER The Federal Reserve is set to raise short-term interest rates Wednesday—the eighth increase since late 2015 and third this year. It doesn’t look like officials are ready to stop. At their June meeting, a narrow majority projected the Fed would raise rates a total of four times in 2018. That group is likely to grow this week. The bigger question: What happens next year? The WSJ’s Nick Timiraos writes that there are two schools of thought. 1.) Conventional wisdom: Low and falling unemployment means the Fed will need to raise rates to slow the economy and prevent it from overheating. 2.) Radical departure Continue reading "Real Time Economics: How Much Higher Will the Fed Lift Rates? | U.S. Ready to Boot Canada from Nafta | Consumer Confidence Hits 18-Year High"

Real Time Economics: Trump Turns to Allies On Trade | Oil Tops $80 a Barrel | Fed Poised to Raise Rates

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 Trump administration’s efforts to isolate China on trade, oil prices climbing to the highest level in almost four years, the Federal Reserve’s two-day policy meeting, and how the rising supply of Uber drivers is driving down their pay. ONE DOWN President Trump signed a revised free-trade pact with South Korea, his first successful effort to open rather than close off trade channels. The big question: Will other countries in Asia and Europe follow? Mr. Trump hopes this week to persuade Japan to enter formal bilateral trade talks, part of a commercial diplomacy effort on the sidelines of United Nations meetings in New York, Jacob M. Schlesinger and Vivian Salama report. Trump aides also have meetings planned with their European Union counterparts to advance Continue reading "Real Time Economics: Trump Turns to Allies On Trade | Oil Tops $80 a Barrel | Fed Poised to Raise Rates"

Real Time Economics: U.S. and China Impose Tariffs, Put Off Talks

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 in the U.S.-China trade fight, happy days for used-car salesmen, why unions are going on strike more often, zombies, and the confluence of economics, earthquakes and God. TRADE FIGHT HEATS UP (AGAIN) China scotched trade talks with the U.S. that were planned for the coming days and accused the Trump administration of being a trade bully. Beijing’s latest moves followed the White House’s decision to implement $200 billion in tariffs on Chinese goods Monday. China is responding with $60 billion in tariffs against the U.S., a measure that President Trump promised to meet with yet another $267 billion in levies. If the White House goes ahead with the final tranche in a few weeks or months, just about Continue reading "Real Time Economics: U.S. and China Impose Tariffs, Put Off Talks"

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: 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"