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China is still cranking out plenty of jobs and moving global markets, low-income Americans are doing more job hopping, U.S. farmers are swapping photosynthesis for photovoltaics, and Brazil is bucking global trends by slashing tariffs and opening up its economy. Here’s a look at some of today’s key economic news.
China’s Labor Market Is Changing, But Not Because of a Trade War
President Trump says U.S. tariffs are battering the Chinese economy, throwing millions of Chinese workers out of jobs—and pressuring the country’s president, Xi Jinping, to strike a trade deal. But Western economists point to relative stability amid a shift to service jobs, Chao Deng reports.
- China is grappling with slowing growth and weaker sentiment among businesses and consumers. The country’s official measure of urban unemployment was near a record in August.
- Much of this, however, is the result of the Chinese economy’s shift over the past decade from one reliant on manufacturing and exports to one where services and domestic consumption have gained importance as pillars of growth. Western economists who focus on China say its economy appears relatively robust, and its labor market is mostly stable—at least for now.
All of that could give officials in Beijing more breathing room as they negotiate with Washington on everything from tariffs to intellectual-property rights in China. The two sides are expected to hold high-level talks in early October.
WHAT TO WATCH TODAY
The S&P/Case-Shiller home-price index for July is out at 9 a.m. ET.
The Conference Board’s consumer confidence index for September is expected to fall to 133 from 135.1 in August. (10 a.m. ET)
The Richmond Fed’s September survey is out at 10 a.m. ET.
President Trump is in New York City for the United Nations General Assembly.
TOP STORIES
Breaking: The U.K.’s top court ruled that Prime Minister Boris Johnson acted unlawfully when he suspended Parliament this month for five weeks. The ruling represents another victory for anti-Brexit campaigners who are seeking to limit the British government’s ability to pursue the U.K.’s withdrawal from the European Union without the close involvement of Parliament.
High Steaks
China is on a meat-buying spree, pushing up beef, pork and poultry prices around the globe. Buyers for China are ramping up purchases after a swine disease hit hog farms across the country and reduced its pig herd—the world’s largest—by more than a third. Domestic pork prices have surged and China’s meat imports are swelling in response, Lucy Craymer and Jacob Bunge report.
- In Brazil, poultry shipments to China have jumped 31% from a year ago and retail prices for chicken breasts, thighs and legs have increased roughly 16%.
- Shoppers in Europe are on average paying 5% more for pork, because more domestically produced meat is being sent to China.
- Lamb prices in Australian grocery stores have jumped 14%, while ground beef on shelves in New Zealand now fetches record prices.
- American shoppers so far haven’t felt much price impact, but that could soon change. December-dated U.S. lean hog futures have climbed 4.5% so far this month.
Hip, Hip, Hop You Don’t Stop
Lower-income Americans are increasingly job hopping. A New York Fed survey showed the share of lower-income heads of household—those with a household income of $60,000 a year or less—who moved to new jobs earlier this year jumped to the highest rate for records dating back to 2014, Sarah Chaney reports.
- The figures suggest rising confidence in the labor market among workers left behind earlier in the expansion.
- A crucial factor driving job switching is the prospect for higher wages, as job hoppers tend to see bigger pay bumps than those who stay in their current roles.
- Job changes among higher-income workers have been declining since early 2018.
China’s Central Bank Won’t Follow Easy Path
People’s Bank of China Gov. Yi Gang said Tuesday the bank won’t follow the course of Western counterparts with new stimulus as the economy is still performing within expectations. Central bankers in Japan and the U.S. signaled a more wait-and-see approach. St. Louis Fed President James Bullard said Monday that rate cuts had already offered an economic boost but that tensions in global trade were unlikely to stabilize. Bank of Japan Governor Haruhiko Kuroda said Tuesday that cuts to short-term rather than long-term interest rates would be more effective in supporting the economy, but also that he had no set expectations for the central bank’s next move at its meeting in October.
Let It Grow
U.S. farmers are embracing an alternative means of turning sunlight into revenue during a sharp downturn in crop prices: solar power. Solar panels are being installed across the Farm Belt for personal and external use on land where growers are struggling to make ends meet. The tit-for-tat tariffs applied by the U.S. and China to each other’s goods have cut demand for American crops. Futures prices for corn, soybeans and wheat are all trading around their lowest levels since 2010. Making matters worse, record spring rainfall left many farmers no time to plant a decent crop. The result: More are taking the risk of leasing land to energy companies or installing their own solar panels, Kirk Maltais reports.
‘Protectionism has Failed’
Brazilian President Jair Bolsonaro’s administration is opening up one of the world’s most closed big economies, slashing import tariffs on more than 2,300 products and exposing local industries long accustomed to protectionism to the challenges of free trade. The new opening is a central feature in Economy Minister Paulo Guedes’s plans to make the country of 210 million more competitive, part of an effort to rekindle a moribund economy historically shielded from foreign competition and bogged down by bureaucracy, Paulo Trevisani reports. “Brazil’s model of protectionism has failed,” said Deputy Economy Minister for Trade Marcos Troyjo.
WHAT ELSE WE’RE READING
Union workers on strike at GM face a dilemma. “When it comes to the manufacturing sector, where the United States faces global competition, restoring the generous pay and benefits that used to accompany these jobs becomes impossible without jeopardizing the jobs themselves,” President Obama’s former ‘car czar’ Steven Rattner writes in the New York Times.
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