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Good morning. Today we look at trade negotiations, tariff exemptions, why U.S. women are rejoining the labor force and how kids fit into the dynamic, the pervasive gender wage gap, and another solid day for Chinese equities as officials talk up the economy.
ZERO TARIFFS
U.S. and European trade negotiators are chasing quick wins to cement a July cease-fire. Problem is, even seemingly simple trade moves can take years. The sides meet in Washington on Tuesday to start fulfilling President Trump’s goal of “zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods.” The focus for now is aligning American and European regulations on goods and services, Emre Peker reports.
Because of the cost of adapting products to slightly different standards, coordination could yield huge savings for both sides. But this is the third U.S.-EU attempt since 2007 to eliminate non-tariff barriers. Finding common ground on regulations is tough. That could frustrate the U.S. side: Commerce Secretary Wilbur Ross last week insisted on “quick negotiations that produce tangible results.”
STEEL YOURSELF
U.S. steel producers prevailed in their push this past spring for the Trump administration to impose tariffs on imported steel and aluminum. Leading up to the round of duties on $200 billion in Chinese goods that took effect last month, the steel industry also succeeded at the opposite job: making some tariffs disappear. Steel producers in September petitioned the U.S. Trade Representative for relief on 132 tariff lines, primarily for raw materials and chemicals used in the steelmaking process. They were able to get 66, or half, of them removed from the final list.
Most other major industry groups had a much lower success rate in petitioning for exemptions on the grounds that tariffs would hurt members’ ability to do business. The greater rate of success has sparked criticism of preferential treatment, Inti Pacheco and Josh Zumbrun report.
Below, we look at lagging labor-force participation among U.S. women. Do you think the government should do more to encourage women to join the workforce? 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 THIS WEEK
Monday is quiet on the economic data front. The highlight of the week is Friday’s third-quarter gross domestic product report. It should be a good one—economists expect a 3.4% annual pace for growth. That would add up to the best back-to-back quarters since mid-2014. Annual growth is running significantly above the 2% average for the current expansion. Look for solid consumer spending, slower but still decent business spending and a runup in inventories to boost growth. Housing and trade will likely be drags.
Outside the realm of data, Verizon and Caterpillar report earnings on Tuesday, and Google parent Alphabet, Amazon and Twitter all release results on Thursday. We’ll be looking for comments on the state of the consumer, inflation and broader economy. Caterpillar executives, in particular, have a nice big window into the global outlook.
TOP STORIES
WOMEN AT WORK
For most of the last two decades, the share of women participating in the U.S. labor force was in decline. Thanks to a strong economy, that long-running trend shows signs of reversing. The reason: A plenitude of jobs and a gradual rise in wages, notably for those at the low end of the skill spectrum, Harriet Torry reports.
When participation slows it means fewer workers to manage machines or wait tables and becomes a headwind to growth. In 2000, the U.S. had the highest female participation rate among large advanced economies. It has since dipped below the rate in Canada, Australia and the U.K. Participation rose in countries like Germany, Italy and Japan in the past 17 years while declining 3 percentage points in the U.S.
THE KIDS ARE ALRIGHT
Why is female labor-force participation in the U.S. lagging other developed nations? In part because European countries and Japan pushed to increase women’s participation in the workforce with government-funded parental-leave policies and child-care programs. That’s an approach the U.S. didn’t take.
The typical American family has increased its child-care spending by 70% since 1995, according to the U.S. Education Department. Those costs ballooned to a total of $4.9 billion in 2016, which is bad news for women, who tend to shoulder more child-care-related responsibilities and housework than their male partners. Economists say mothers are more likely than fathers to drop down to part-time work or leave the labor force altogether when child care gets pricey, Rachel Feintzeig reports.
PAID IN FULL
Even when women set their own salaries, it is often less than what male entrepreneurs pay themselves. Part of the reason: Companies founded by women get substantially less venture money than those founded by men, and female entrepreneurs can face extra pressure not to come across to backers as extravagant, Vanessa Fuhrmans reports. In an analysis of more than 160 early-stage private companies—or those with less than $15 million in investor financing—San Francisco compensation-data firm J. Thelander Consulting found the average female founder/chief executive paid herself an annual salary of $179,444, compared with $232,659 for her male counterpart.
CHART OF THE DAY: REBOUND
Chinese stocks soared for a second day as officials talked up the economy and released new details on proposed personal income tax cuts. The Shanghai Composite has surged more than 7% since Thursday. For the year, not so much.
TWEET OF THE DAY
[wsj-responsive-sandbox id = "0" ]WHAT ELSE WE’RE READING
Pregnancy-related discrimination can exact an exorbitant toll. “The New York Times reviewed thousands of pages of court and other public records involving workers who said they had suffered miscarriages, gone into premature labor or, in one case, had a stillborn baby after their employers rejected their pleas for assistance—a break from flipping heavy mattresses, lugging large boxes and pushing loaded carts,” Jessica Silver-Greenberg and Natalie Kitroeff write.
Yes, the rent is too damn high. “Changes in housing expenditures have dramatically exacerbated (in terms of real disposable income) the rise in income inequality,” Christian Dustmann, Bernd Fitzenberger and Markus Zimmermann write at the Center for Economic Policy Research. “At the bottom of the income distribution, increasing housing expenditures and falling real incomes cause a disproportionate decline in consumption and savings.”
UP NEXT: TUESDAY
The Richmond Fed manufacturing survey for October is out at 10 a.m. ET.
The Minneapolis Fed’s Neel Kashkari speaks at an education conference at 9:30 a.m. ET, and the Dallas Fed’s Robert Kaplan speaks in Galveston, Texas, at 2:15 p.m. ET.
The Bank of England’s Mark Carney speaks at a University of Toronto conference at 11:20 a.m. ET.
from Real Time Economics https://ift.tt/2EDS2Ky
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