This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here.
Economists debate the cause of a hiring slowdown, it’s still not entirely clear what a U.S.-China phase one deal would look like, the Fed is putting a price on climate change and the California dream may be dying. Let’s head into the weekend with a look at today’s top economic news.
Economists Split on Cause of Hiring Slowdown
The data is clear: Hiring in the U.S. is slowing. But is that because of a shortage of workers or softening demand for labor? In The Wall Street Journal’s latest survey of economists, 45% blamed the slowdown on the tight labor market, which has made it harder for many employers to find enough workers; 38% of respondents said the issue was ebbing desire to expand payrolls. The first explanation would suggest the economic expansion can continue at a solid pace if more potential workers can be drawn off the sidelines and into the labor force. The latter could indicate employers are becoming more cautious about hiring—perhaps because of slowing global growth or other uncertainties, or because they see weakening domestic demand for goods and services—which could portend a loss of U.S. economic momentum in the months ahead, Harriet Torry reports.
WHAT TO WATCH TODAY
The University of Michigan’s consumer sentiment index for November is expected to tick down to 95.3 from 95.5 at the end of October. (10 a.m. ET)
U.S. wholesale inventories for September are expected to fall 0.3% from the prior month. (10 a.m. ET)
The Baker Hughes rig count is out at 1 p.m. ET.
The San Francisco Fed’s Mary Daly speaks at a research conference on the economics of climate change at 11:45 a.m. ET, the New York Fed’s John Williams speaks in New York at 8 p.m. ET, and governor Lael Brainard speaks at a conference on the economics of climate change at 8:35 p.m. ET.
China’s consumer-price index for October is out at 8:30 p.m. ET.
TOP STORIES
Unfazed
Beijing’s announcement that the U.S. and China agreed to roll back tariffs as part of a “phase one” trade accord lifted financial markets. The Trump administration’s response, however, was more cautious, Josh Zumbrun, William Mauldin and Chao Deng report.
- Chinese Commerce Ministry spokesman Gao Feng on Thursday said the two sides agreed to “remove the same proportion of tariffs simultaneously” if they finalize a phase one pact.
- One U.S. official concurred. “If there’s a phase one trade deal, there are going to be tariff agreements and concessions,” White House economic adviser Larry Kudlow told Bloomberg.
- Others disputed that. “There is no agreement at this time to remove any of the existing tariffs as a condition of the phase one deal,” White House senior trade adviser Peter Navarro said on Fox Business Network.
- The U.S. has hit about $360 billion of Chinese imports with tariffs, in four tranches, and it was unclear Thursday how many of these tariffs could be affected or under what timeline.
Heard on the Street’s Nathaniel Taplin: Investors may be reading too much into a Chinese Commerce ministry statement about an agreement to lift tariffs in phases. Chances are, there will be some kind of agreement this year, including some initial tariff relief. Beyond that, the future of Sino-U.S. trade relations remains as opaque as ever.
The latest reports on Chinese and German exports, meanwhile, beat expectations, an early sign that global demand may be picking up as trade tensions ease.
The Cost of Climate Change
A top New York Fed official put a price tag on climate- and weather-related events and said financial firms need to take seriously such dangers in their risk-management decisions. “The U.S. economy has experienced more than $500 billion in direct losses over the last five years due to climate and weather-related events,” said Kevin Stiroh, an executive vice president at the New York Fed. “Climate change has significant consequences for the U.S. economy and financial sector through slowing productivity growth, asset revaluations and sectoral reallocations of business activity.”
The San Francisco Fed on Friday will hold a conference on climate change and economic risks, a first for the central bank. The Fed has been taking increased interest in how a changing climate will affect the economy and the financial system, Michael S. Derby reports.
Brexit Boost
The Bank of England said it expects the U.K. economy to pick up modestly over the next three years if lawmakers back Prime Minister Boris Johnson’s Brexit deal and the country pursues a free-trade accord with the European Union. The forecast marks the first time the central bank has assessed Mr. Johnson’s Brexit plan. While it said the deal would create new barriers to trade with a bloc that currently buys around half of U.K. exports, it added the removal of uncertainty could boost investment, which has stalled since mid-2016, Jason Douglas and Paul Hannon report.
Ain’t No Sunshine
Does anyone still want to live in California? Long known as the home of easy living, with its beaches and year-round sunshine, the state is increasingly seen as a perilous and unlivable place where the government and corporate institutions can’t reliably offer basic services. California has the highest gas prices in the country. Housing prices are the second-highest in the nation. Homelessness is surging in major cities. A drought left some towns without clean water. And now, more than two million people have lost power in Northern and Southern California in the past month and hundreds of thousands have evacuated their homes to avoid fire danger, a number likely to grow before the year ends, Ian Lovett reports. “It’s like living in a third-world country,” said Marilyn Dalton, 78, a resident of Potter Valley, Calif.
TWEET OF THE DAY
[wsj-responsive-sandbox id = "0" ]WHAT ELSE WE’RE READING
Are we headed for another Victorian era of income inequality? Research by J. Rodrigo Fuentes and Edward Leamer finds that from 1980 to 2016, U.S. incomes rose only for those with advanced degrees working more than 40 hours a week. The loss of manufacturing jobs, meanwhile, wiped out a key opportunity for high school grads to put in the effort and pile up the hours needed to get ahead. What’s left are low-wage service jobs, akin to the work performed by servants in the 1800s. “We suggest we may be returning to the income inequality of the Victorian age but with talent replacing land as the source of inherited wealth and power,” they write in a National Bureau of Economic Research working paper.
Trade war? Phooey. “Nearly three quarters of U.S. businesses feel that protectionism is increasing in their key markets, but it’s a growing trend that’s viewed quite positively in the United States. In fact, more businesses feel they’ve gained more than they’ve lost,” HSBC finds in its latest Navigator Report.
SIGN UP FOR OUR CALENDAR
Real Time Economics has launched a downloadable calendar with concise previews, forecasts and analysis of major U.S. data releases. To add to your calendar, please click here.
from Real Time Economics https://ift.tt/2Q1hb5N
No comments:
Post a Comment