Newsletter: Trump Considers Steps to Spur Economy, College-Educated Women Reshape the Workplace

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The White House is sending mixed messages on the economy, Fed officials don’t sound worried about a potential downturn, and companies are restructuring pay packages to attract a growing force in the labor market: college-educated women. Good morning. Jeff Sparshott here to take you through key developments in the global economy. Send us your questions, comments and suggestions by replying to this email.

Pick Me Up

President Trump said he is considering measures to bolster the economy and again pressed the Federal Reserve to lower interest rates while downplaying warnings signs of a possible slowdown, Rebecca Ballhaus, Andrew Restuccia and Richard Rubin report.

• The economic expansion this summer became the longest on record in the U.S. Unemployment is exceptionally low and consumer spending appears robust, though overall growth has slowed, factory activity has slumped and markets have flashed some warning signals.
• Mr. Trump: “We’re very far from a recession.”
• One possible cause of weaker growth: Mr. Trump’s trade war is making businesses more cautious. The president’s response: “Whether it’s good or bad, short term, is irrelevant. We have to solve the problem with China.”
• Possible stimulus: “We’re always looking at the capital gains tax, payroll tax. … I would love to do something on capital gains,” Mr. Trump said.

WHAT TO WATCH 

U.S. existing-home sales for July are expected to rise to an annual pace of 5.39 million from 5.27 million a month earlier. (10 a.m. ET)

The Congressional Budget Office releases its 10-year budget forecast at 11 a.m. ET. The new figures will include the latest two-year budget deal signed this month by President Trump.

The Federal Reserve releases minutes from its July 30-31 meeting at 2 p.m. ET.

The Minneapolis Fed’s Neel Kashkari moderates a panel on economic research at 6:30 p.m. ET.

TOP STORIES

No Panic! at the Disco

Federal Reserve officials are certainly aware of economic headwinds. But they don’t sound worried about an imminent recession.

San Francisco Fed President Mary Daly: “I don’t think we’re headed towards a recession right now. When I look at the data coming in, I see solid domestic momentum that points to a continued economic expansion. The labor market is strong, consumer confidence is high, and consumer spending is healthy.” (via Quora)

Boston Fed President Eric Rosengren: “We’re likely to have a second half of the year that’s much closer to 2% growth. When we have a low unemployment rate, a relatively low inflation, unless that changes—and it may change—I don’t see a lot of need to take action.” (via Bloomberg)

Minute by Minute

The Fed releases minutes from its July 30-31 meeting at 2 p.m. ET, shedding more light on its decision to cut interest rates for the first time in more than a decade. Officials left the door open to lowering rates again but Chairman Jerome Powell disappointed investors when he didn’t endorse market expectations for an aggressive series of rate cuts to follow, Nick Timiraos reports.

• Nearly half of the Fed’s 12 reserve bank presidents said they didn’t see a convincing case to cut interest rates in the run-up to last month’s policy meeting. Two of them, Mr. Rosengren and Kansas City’s Esther George, had a vote and dissented from the decision to cut.
• What to watch: Mr. Powell characterized the rate cut as a “mid-cycle adjustment” and said it was not the start of a “long cutting cycle” the Fed would adopt in a recession or severe downturn. The minutes will shed more light on how the rest of his Fed colleagues viewed that assessment and what might compel them to consider reducing rates by more than another quarter or half percentage point this year.

Achtung Baby

One country that does appear to be teetering on the brink of recession: Germany. But investors shouldn’t count on a meaningful fiscal push to lift the economy. Despite some talk of infrastructure spending, the German constitution caps the deficit at 0.35% of potential GDP—an ill-defined measure that allows some extra flexibility during recessions, but not much. And while German wages have been picking up in recent years and consumption is robust, the economy is still skewed towards exports rather than domestic spending, Jon Sindreu writes.

College-Educated Women Reshape the Workforce

Women for the first time make up a majority of the U.S. labor force with a college degree, a milestone that is changing the way companies structure compensation packages and could influence future family sizes, Likhitha Butchireddygari reports.

• The share of companies offering paid parental leave increased to 40% from 25% between 2015 and 2018, according to human resources consulting firm Mercer. During the same span, the share of companies with more than 20,000 employees offering egg freezing rose to 17% from 6%.
• As female college-attainment rises, the fertility rate goes down as educated women delay starting families. In the U.S., the rate has been below the replacement level of 2.1 since 1971 and hit a record-low of 1.7 last year. That can lower overall labor-force growth.
• Since 1999, women have received about 57% of all bachelor’s degrees. But the majors women choose in college remain heavily skewed toward professions like teaching or nursing, which have lower salaries than some male-dominated professions and can reinforce a persistent gender pay gap.

Share Buybacks Slow

U.S. corporations are repurchasing their own shares at the slowest pace in 18 months. That’s a possible sign executives are becoming more cautious as they grapple with new tariff threats in the long-simmering trade dispute with China; weakening corporate earnings; signs of a downturn in global growth; and uncertainty over the Fed’s interest-rate policy, Jessica Menton reports.

WHAT ELSE WE’RE READING

Medicine has become something of a stealth family-friendly profession. “Women are now half of medical students. In some specialties, like pediatrics, geriatrics and child psychiatry, they are the majority. Female doctors are likelier than women with law degrees, business degrees or doctorates to have children. They’re also much less likely to stop working when they do. Flexible, predictable hours are the key,” Claire Cain Miller writes in the New York Times.

The White House is bracing donors for an economic slowdown. “At a fundraising luncheon this week in Jackson, Wyo., headlined by both Jared Kushner and Ivanka Trump, acting White House chief of staff Mick Mulvaney acknowledged the risks to the GOP elite behind closed doors. If the U.S. were to face a recession, it would be ‘moderate and short,’ Mulvaney told roughly 50 donors,” Nancy Cook reports in Politico.

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