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 all appear to be limiting construction of new single-family homes. Builders, meanwhile, have been more focused on apartments—the number of multifamily units under construction has plateaued around the highest level since the early 1970s. With the Federal Reserve set to lift rates again next week, it doesn’t look like any kind of turnaround is imminent. Today: Existing-home sales for August are out at 10 a.m. ET.
Do you think it’s better to buy or rent a home right now? Write to Jeffrey Sparshott at realtimeeconomics@wsj.com, tweet to @WSJecon and visit wsj.com/economy for the latest news. (Responses may be quoted in this newsletter.)
WHAT TO WATCH TODAY
U.S. jobless claims, out at 8:30 a.m. ET, are expected to remain near half-century lows.
The Philadelphia Fed manufacturing survey for September is expected to rise to 15.0 from 11.9 a month earlier.
U.S. existing-home sales for August, out at 10 a.m. ET, are expected to inch up to an annual pace of 5.38 million from 5.34 million a month earlier.
The Conference Board’s leading economic index for August, out at 10 a.m. ET, is expected to rise 0.5%.
European Union heads of state gather at an informal meeting in Salzburg, Austria, Wednesday and Thursday. Brexit is the big item on the agenda. There’s a formal press conference at 9 a.m. ET on Thursday.
Japan’s consumer-price index for August is out at 7:30 p.m. ET.
TOP STORIES
U.S. TO CHINA: TALK IS CHEAP
Chinese Premier Li Keqiang promised to improve intellectual-property protections in his country. U.S. lawmakers weren’t buying it. “I’m not sure what the Chinese adage is, but in the United States we say talk is cheap and actions are what matter,” Rep. Todd Rokita (R., Ind.) said at a global economic forum in Tianjin, China. The comments briefly fractured the usual decorous calm of such high-profile gatherings, Shan Li reports. China’s premier had spoken minutes earlier and promised to lower tariffs and improve the business environment for foreign companies.
MADE IN CHINA
President Trump says there’s an easy way for Apple to avoid his tariffs on China: make its products in the U.S. But this would be a hollow victory, Greg Ip writes. If Apple follows his advice, Mr. Trump will have grabbed the least valuable link in the electronics supply chain with little net benefit to Americans, without addressing the real contest in global trade. That contest is over the more valuable production steps like research, design and the manufacture of more sophisticated components where the U.S. is dominant but China is closing the gap.
AUTO ZONE
Need new wiper blades? Trump administration tariffs might make them more expensive. The latest round of duties will hammer Chinese auto-parts makers, likely raising prices for their U.S. customers, who have few options to buy key parts elsewhere, Trefor Moss and Chester Dawson report. The latest tariffs are expected to hit a range of auto-related imports—from crankshafts and spark plugs to windshield-wiper blades—and reverberate through the supply chain, potentially impacting the prices of new and used cars alike.
OPEN SESAME
Chinese technology tycoon Jack Ma promised then-President-elect Trump he would create 1 million jobs in the U.S. The trade spat between the countries means that won’t happen: “Trade is not a weapon. It can’t be used for war. It should be used as a tool to promote peace,” Mr. Ma said in an interview with China’s state news agency Xinhua.
Grain of salt: Mr. Ma’s pledge to create 1 million jobs drew skepticism at the time, with some critics saying the promise was vague.
LIGHTNING DEAL
President Trump isn’t the only one with a skeptical eye on Amazon. European Union antitrust authorities have begun a preliminary investigation into the company’s treatment of other merchants that sell products using its platform, opening a new regulatory front against an American tech giant. The probe focuses on whether Amazon is gaining a competitive advantage from data it gathers on its platform, Sam Schechner and Valentina Pop report.
Trustbuster: The EU’s antitrust chief, Margrethe Vestager, has emerged as one of the world’s major technology regulators. Most recently, she fined Alphabet’s Google twice, for a total of €6.76 billion.
I LIKE TO MOVE IT
Walmart, AT&T, Comcast and other companies made a splash a few months back with announcements they’d pay $1,000 or $2,000 bonuses to thousands of workers. LendingClub spent nearly $6.4 million to bring two new top officers and their families to the San Francisco Bay Area in 2017.
Move It: In a strong economy and tight labor market, executives don’t have to disrupt their lives to take a distant job. That is why more companies are offering rich relocation packages, flexible schedules, extended temporary-housing contracts and bigger sums to cover money lost on home sales, Joann S. Lublin reports.
PROST!
Economists often refer to tighter monetary policies as central banks “taking the punchbowl away.” In the European Central Bank’s case, maybe it should take the keg away? Annual beer-price inflation at Germany’s Oktoberfest is expected to hit 3.8% this year, the highest since 2012, according to UniCredit’s annual estimate timed to Oktoberfest, which starts Saturday. That’s twice Germany’s annual inflation rate of 1.9%. The average price of a mass (meaning one liter) of beer is EUR 11.24 ($13.12). Higher beer prices don’t seem to be derailing spending, with consumption per visitor up steadily since the early 1990s. – Brian Blackstone
QUOTE OF THE DAY
The [global] expansion may now have peaked. Global growth is projected to settle at 3.7% in 2018 and 2019, marginally below pre-crisis norms, with downside risks intensifying. – OECD Interim Economic Outlook
TWEET OF THE DAY
[wsj-responsive-sandbox id = "0" ]WHAT ELSE WE’RE READING
A police officer is more likely to let you off the hook if you’re the same race. “I find State Police officers issue significantly more traffic citations to drivers whose race differs from their own. This bias is evident for both moving and nonmoving violations, the latter indicating a preference for discriminatory leniency towards same-race individuals,” UC Santa Cruz’s Jeremy West writes in a working paper.
Take the scenic route. “By analyzing trip-level data from NYC, we find that taxi drivers tend to detour more relative to Uber drivers on airport routes and especially routes taken by non-local riders, while Uber drivers tend to detour more relative to taxi drivers on airport routes with greater surge pricing,” Meng Liu, Erik Brynjolfsson and Jason Dowlatabad write in a National Bureau of Economic Research working paper.
UP NEXT: FRIDAY
Markit’s eurozone manufacturing and services indexes for September are out at 4 a.m. ET.
Canada’s consumer-price index for August is out at 8:30 a.m. ET.
Markit’s U.S. manufacturing and services indexes for September, out at 9:45 a.m. ET, are both expected to firm slightly.
from Real Time Economics https://ift.tt/2xyq9Nf
No comments:
Post a Comment