This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here.
Prime Minister Theresa May postponed a Brexit vote she was all but certain to lose, and French President Emmanuel Macron is promising tax cuts and higher wages to mollify protesters. What’s next for Europe?
Good morning. Jeff Sparshott here to take you through key developments in the global economy. We’ll also look at the start to U.S.-China trade talks, trouble filling low-skill jobs, the economics of climate change and one of Asia’s worst-performing currencies. Let us know what you think by replying to this email.
MY OFFER IS THIS: NOTHING
British Prime Minister Theresa May delayed a parliamentary vote on her proposal to leave the European Union, throwing her Brexit plans into disarray. Parliament was poised to reject the deal. Mrs. May plans to meet with European leaders to try to drum up support for changes to the withdrawal agreement, though EU officials appear unlikely to budge.
“I remain convinced that the #Brexit deal we have is the best – and only – deal possible. There is no room for renegotiation, but further clarifications are possible,” European Commission President Jean-Claude Juncker said on Twitter.
HARD EXIT
Businesses on both sides of the English Channel are bracing for a “no-deal” Brexit. Britain is scheduled to leave the EU on March 29. A hard exit could mean worker shortages, lengthy delays at the border and new tariffs on everything from cars to wine. Firms have been stockpiling goods, moving workers and plotting workarounds for disruption to supply lines and regulatory uncertainty, Saabira Chaudhuri and Robert Wall report.
“Unless a deal is agreed quickly, the country risks sliding towards a national crisis,” said Carolyn Fairbairn, director-general of the Confederation of British Industry.
WHAT TO WATCH TODAY
The U.S. producer price index for November, out at 8:30 a.m. ET, is expected to fall 0.1% from the prior month. Excluding food and energy, it’s expected to rise 0.1%.
President Trump meets with Senate Minority Leader Chuck Schumer and the House Speaker-Designate Nancy Pelosi at 11:30 a.m. ET in the Oval Office. Hot topic: funding vs. shutting down the government.
TOP STORIES
HELLO FROM THE OTHER SIDE
The U.S. and China started the latest round of trade talks with a phone call. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer spoke with Chinese Vice Premier Liu He to discuss Chinese purchases of agricultural products and changes to fundamental Chinese economic policies, Bob Davis reports.
By holding the phone call, both sides are suggesting a willingness to keep the negotiations from getting derailed by Chinese anger at the arrest of a senior executive at China’s Huawei Technologies Co.
CONNECT THE DOTS
A Chinese court ordered Apple to stop selling older iPhone models after finding the company infringed on two patents held by Qualcomm Inc. The decision casts uncertainty over Apple’s business in a critical market amid thorny trade relations between the U.S. and China. Apple relies on the country for about a fifth of its annual revenue, Tripp Mickle reports.
MAD SKILLZ
Low-skilled jobs are getting harder to fill. The number of unfilled jobs in the U.S. grew by 1.02 million at the end of October from a year earlier. More than a third of the new openings were in two fields typically packed with entry-level positions: accommodation and food service, and retail, Eric Morath reports. That suggests steady hiring and low unemployment is allowing workers of all stripes to look for higher-paying jobs in other industries.
“Many people who might otherwise look at those sectors are finding better alternatives in industries they view as more secure with better room for advancement,” says ZipRecruiter’s Julia Pollak.
WILDFIRES VS. THE ECONOMY
California wildfires are squeezing local economies even in cities spared their immediate wrath. Chico, Calif., escaped last month’s Camp Fire. But a major part of the city’s workforce lived in areas that were destroyed—about 20,000 have moved to Chico, worsening what was already a growing housing crisis. Others have had to move away, putting pressure on a tight labor market, Nour Malas and Harriet Torry report.
Chico had a rental vacancy rate of just 1% before the fires. There were zero apartment vacancies as of late November. The number of single-family homes for sale plunged to 50 from 250 before the fire. “The fear is that people are going to leave,” said Chico Mayor Sean Morgan.
THE MARKET FOR CLIMATE CHANGE
Why would Harvard get into the California grape-growing business? To acquire water rights where the earth’s warming is making the resource an ever-more-valuable asset. The school’s endowment fund values its vineyards at $305 million, up nearly threefold from in 2013, Russell Gold reports.
In a warming planet, few resources will be more affected than water. Even though there aren’t many ways to make financial investments in water, investors are starting to place bets. Buying arable land with access to it is one way.
WHO NEEDS AN INDEPENDENT CENTRAL BANK?
India’s currency, stocks and bonds fell after the governor of the central bank resigned, casting doubt on the independence of monetary policy in the world’s largest democracy. Reserve Bank of India Gov. Urjit Patel said he would leave his post, citing personal reasons. Economists quickly linked the departure to recent, unusually public tensions with the government over policies such as lending rules for state-run banks, pointing to New Delhi’s desire to boost growth ahead of next year’s national elections, Saumya Vaishampayan reports.
QUOTE OF THE DAY
We will respond to the economic and social urgency with strong measures, by cutting taxes more rapidly, by keeping our spending under control, but not with U-turns.-French President Emmanuel Macron, in a speech on “yellow vest” protests
TWEET OF THE DAY
[wsj-responsive-sandbox id = "0" ]WHAT ELSE WE’RE READING
Want to get more high-achieving, low-income kids into good colleges? Nudge them. “We conclude that an encouragement to apply, paired with a promise of aid, when communicated to students and influential adults, can substantially close income gaps in college choices,” Susan Dynarski, C.J. Libassi, Katherine Michelmore and Stephanie Owen write in a National Bureau of Economic Research working paper.
The Vatican’s Laudato Si Challenge is raising and spending money to support small businesses that tackle climate change and forced migration. It’s a good start. “But if more of the wealth commanded by the world’s religions were marshalled in an environmentally benign way, their contribution could go far beyond offering moral injunctions or even giving a boost to worthy start-ups,” The Economist writes.
UP NEXT: WEDNESDAY
The U.S. consumer price index for November, out at 8:30 a.m. ET, is expected be unchanged from a month earlier. Core prices, which exclude food and energy, are expected to tick up 0.2%. That would put headline prices and core up 2.2% from a year earlier.
The U.S. federal budget statement for November is out at 2 p.m. ET. The Congressional Budget Office estimates a $203 billion deficit for November, up $64 billion from a year earlier.
from Real Time Economics https://ift.tt/2rv54Av
No comments:
Post a Comment