Announcing CPTR

The Robert Schalkenbach Foundation and Center for the Study of Economics are pleased to announce the creation of the “Center for Property Tax Reform” (CPTR), a new, joint undertaking between these long-time collaborators.

Both RSF and CSE share a commitment to increasing understanding and adoption of Land Value Tax (LVT), a form of property tax that differs from the traditional approach because it only levies taxes on land, not improvements. 

Josh Vincent, Josie Faass, and Brendan Hennigan at the National Conference of State Legislatures Annual Conference in Nashville in August 2019.

Under the banner of CPTR, Josh Vincent (CSE’s ED), Brendan Hennigan (RSF’s Program Director), and Josie Faass (RSF’s ED), will orchestrate an ambitious program of outreach, coupled with the creation of customized case studies and impact assessments informed by their experiences in Pennsylvania, Connecticut, and elsewhere.  These efforts will be structured so as to to raise awareness among state and local officials, community groups, and other audiences, of the potential benefits they could realize by adopting smarter tax policies.

Needless to say, we’re excited for this new undertaking, and look forward to everything the future holds!

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Newsletter Special Report: Millions of Jobs Added, Millions More to Goon August 7, 2020 at 4:20 pm

This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here.

Employers added 1.8 million jobs in July and the unemployment rate fell to 10.2%, marking only partial progress toward recouping massive losses tied to the coronavirus pandemic. Jeff Sparshott and Greg Ip here to take you through the key numbers.

Maybe Not a V, but Not a U Either

July’s payroll growth, at 1.8 million, still leaves total payrolls 12.9 million lower than in February. And yet if job gains continued at July’s pace, that deficit will be erased by March, 2021. If payrolls reclaim their last peak in 13 months, that would be remarkably fast. It took more than six years after the last recession. So can they maintain that pace? In July, job gains were blunted by a resurgence of the virus in the South and West which put the brakes on economic reopening. With cases slowly trending down now, economic activity should pick up, though that hasn’t shown up yet in private data such as credit card spending. Spending could also take a hit from the recent expiration of enhanced unemployment insurance benefits; Congress is struggling with an extension. And it’s unlikely that the pandemic is going to completely disappear by next year, so neither will the damage to many industries such as tourism and retailing. —Greg Ip


Labor-Market Churn

The unemployment rate fell for mostly the right reasons. Some people dropped out of the labor force but not nearly as many as found a job. Measures across the board improved, including the share of workers who wanted full-time work but were stuck in a part-time job.

The number of workers on temporary layoff fell and the number of permanent job losses was little changed last month, suggesting that many workers are getting recalled to old jobs or are able to switch into new ones. “The rate of churn in the labor market remains incredibly high, but a notable positive detail in this month’s report was the downtick in the rate of new permanent layoffs,” economists at Morgan Stanley wrote.

One potentially worrisome sign: The number of long-term unemployed is on the rise. That suggests that some people are at risk of getting locked out of the labor market—and ultimately exhausting unemployment benefits.

Job losses and gains haven’t been evenly distributed. Initially Blacks were less hard-hit than some other racial groups in the early stages of the recession, but the drop in their unemployment rate in July was the smallest among racial groups. —Greg Ip

Some of that was due to growing labor force participation; the Black employment-to-population ratio rose more than for Hispanics and whites. —Greg Ip

Who’s Hiring?

Some of the industries hit hardest by March and April lockdown orders experienced some of the biggest gains last month. Bars and restaurants, retailers, healthcare, laundry services and gambling halls posted big gains from June to July, reflecting efforts to reopen the economy by relaxing social distancing requirements.

While positive, July’s gains only begin to retrace earlier losses. And it’s not clear that the Labor Department data fully captured rising Covid-19 caseloads toward the end of July, which caused state and local governments to halt or roll back reopening plans and consumers to show renewed caution.

Not everything may be as it seems with the monthly figures. Government jobs, mainly in public schools, rose by a seasonally adjusted 300,000 in July. That’s welcome relief for a sector that typically stabilizes the economy in downturns, but which has been hard hit by the pandemic. However, it may be a mirage. On an unadjusted basis public-school jobs continued to decline in July, but the decrease was smaller than seasonal factors expected—because so many jobs have already been cut. Bottom line: If large school districts holding class online this fall don’t rehire staff, job losses will resume in the public sector soon. —Eric Morath

Can We Fix It?

One final note: The Labor Department appears to have largely solved misclassification problems that had artificially suppressed the unemployment rate. In March, April and May the agency counted millions of workers as absent—something that usually applies to vacation or sick leave—when they probably should have been classified as unemployed. That subtracted as many as 5 percentage points from the headline rate. The issue now accounts for less than 1 percentage point, Labor said Friday.


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“This is not a V-shaped recovery. Adding 1.8 million jobs is not sufficient for any sort of speedy recovery after the astronomical job losses of early spring.” —Nick Bunker, Indeed

“The pace of job growth slowed in July, but the gains over the past three months represent an impressive rebound during the ongoing economic challenges brought forth by the pandemic.” —Mike Fratantoni, Mortgage Bankers Association

“Recovery in jobs to pre-pandemic levels will likely be slow and prolonged, one that will restrain the pace of recovery.” —Rubeela Farooqi, High Frequency Economics

“These numbers suggest that the surge in virus cases since late June has so far not prevented the continued re-opening of the economy at the national level.” —Brian Coulton, Fitch Ratings

“The slowdown we’re seeing is a reminder that a return to economic stability is ultimately hinged on addressing the public health crisis.” —Daniel Zhao, Glassdoor

“The economy is expanding, but the pace of improvement has slowed.” —Jim Baird, Plante Moran Financial Advisors

“The huge remaining level gap in employment—still 12.9m lower than in February before the Covid shock hit—will keep the Fed firmly focused on supporting the recovery.” —Krishna Guha, Evercore ISI

“The payroll count still reveals a slowing in the pace of the labor market recovery. In the absence of additional fiscal aid, the broad economy risks losing momentum as it shifts into the second phase of its rehabilitation.” —Kathy Bostjancic, Oxford Economics


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.


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Newsletter: Labor Painson August 5, 2020 at 10:39 am

This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here.

Is the U.S. Labor Market Already Losing Steam?

The Labor Department’s July jobs report is out Friday at 8:30 a.m. ET. Economists are forecasting a net gain of 1.482 million jobs, a figure that in normal times would be blowout fantastic but in current circumstances would be a disappointing slowdown from the prior two months.

Where do we see a slowdown? Labor Department data show the number of people filing claims for unemployment insurance ticking up toward the end of July. And separate research from the Census Bureau and payroll software provider Homebase show employment stagnating or declining since June.

The shift is correlated with a rise in Covid-19 cases. By the end of July, small-business employment in states that were initially hit hard by Covid-19 and late to reopen was roughly the same as states that had reopened early but then faced a rising number of infections, Homebase data shows. Neither set of states was trending in the right direction.

Another reaction to rising caseloads? More social distancing. Measures of mobility in early openers versus late openers have converged. One possible benefit of renewed caution: Four virus hot spots—Arizona, California, Texas and Florida—started showing tentative signs of improvement after being pummeled by the virus in July. One possible takeaway: “The economic recovery going forward is likely to be geographically uneven, dictated by local infection conditions,” Dallas Fed economists wrote in a new research brief.

What do the developing trends mean for Friday’s employment report? Don’t be surprised if there’s a surprise in either direction. Forecasts are especially fraught in an economy whipsawed by any crisis, and especially this crisis. But some economists are warning of a marked deterioration. “We conclude that the pace of improvement in the labor market has stalled and begun to roll over, though it is not clear this will be fully captured in [Friday’s] July jobs report,” Deutsche Bank economists wrote in a note to clients. —J.S.


Bank of Japan Gov. Haruhiko Kuroda speaks at a Columbia Business School webinar at 8 a.m. ET.

The ADP employment report for July is expected to show a gain of 1 million jobs from the prior month. (8:15 a.m. ET)

The U.S. trade deficit for June is expected to narrow to $50.3 billion from $54.6 billion a month earlier. (8:30 a.m. ET)

IHS Markit’s U.S. services index for July is expected to register at 49.6, unchanged from a preliminary reading. (9:45 a.m. ET)

The Institute for Supply Management’s nonmanufacturing index for July is expected to fall to 55 from 57.1 a month earlier. (10 a.m. ET)

Cleveland Fed President Loretta Mester speaks on the economic outlook at 5 p.m. ET.


Trade Talks

The U.S. and China have agreed to high-level talks on Aug. 15 to assess Beijing’s compliance with the bilateral trade agreement signed early this year, according to people briefed on the matter. The trade pact has emerged as one of the few remaining avenues for the two countries to engage on matters of mutual concern. Relations have deteriorated in recent months, with the Trump administration hammering Beijing over the coronavirus outbreak, Hong Kong and the treatment of Uighurs in western China. The focus will be on the so-called phase-one deal, which includes China’s commitment to boost its U.S. imports by $200 billion over two years. So far, China has fallen well short of the pace needed to reach the target, Lingling Wei and Bob Davis report.

The latest point of contention: Washington’s ultimatum to the Chinese owner of TikTok—sell the app’s U.S. operations or leave the country.

Rescue Me

White House negotiators said they aim to reach a deal with Democrats on a new coronavirus-relief package by the end of the week, with both sides saying they made progress in talks to bridge differences in unemployment payments and other aid proposals. Neither side disclosed whether progress had been made on the most intractable of the issues, including aid for states and localities and how much money the federal government would provide to supplement state jobless aid, Siobhan Hughes and Kristina Peterson report.

Democrats are trying to use the coronavirus relief law to repeal the cap on state and local tax deductions. Republicans are mocking the effort as a tax cut for the rich, Richard Rubin reports.

Businesses owned by Black people were hit especially hard by the coronavirus pandemic because of a combination of geography, limited reach of a key federal aid program and weaker ties to banks, a new report from the Federal Reserve Bank of New York finds. The authors suggest their findings can offer insight for federal policy makers as they consider additional coronavirus aid, Amara Omeokwe reports. “To have the greatest impact, the next round of Covid-19 relief should be more targeted geographically to focus on the hardest-hit areas and communities that lack critical infrastructure (hospitals, banks) to ameliorate the gaps,” the report said.

Do Not Pass Go

The number of businesses seeking chapter 11 protection rose 52% in July from a year earlier as the coronavirus pandemic roiled the economy and upended businesses from coast to coast. Personal bankruptcy filings were also up, according to legal-services firm Epiq Systems. The upward trend in bankruptcy filings in the U.S. is expected to continue in the coming months as government-funded assistance programs come to an end, Aisha Al-Muslim reports.

Cheers (Drink to That)

North America has been one of the most resilient liquor markets in the world since the Covid-19 pandemic began. It is a pity for Diageo that America’s exceptional drinking habits can’t be exported. The London-based maker of Johnnie Walker scotch and Guinness stout said Tuesday that sales in North America fell just 1% over the six months through June compared with the same period of 2019. Far tougher conditions everywhere else dragged group sales down 23% overall, Carol Ryan reports.


A second wave of U.S. layoffs is under way. A new Cornell-JQI-RIWI survey finds 31% of recalled workers have been laid off a second time and another 26% have been told by their employer they may be laid off again, with a notable rise in “healthy” states. The results suggest “repeat layoffs and furloughs are not directly related to resurgence of the Covid-19 virus (and renewed economic shutdowns in affected states), but are rather linked to overall economic conditions in the U.S. and–likely–the exhaustion of the [Paycheck Protection Program] funds by businesses.”


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.


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Newsletter: Truth and Consequenceson August 3, 2020 at 10:39 am

This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here.

About 30 million Americans have lost an extra $600 a week in unemployment benefits, the dollar posted its worst month in nearly a decade and the next jobs report could be make-or-break for policy makers and politicians. Jeff Sparshott here with the latest on the economy.

Roller Coaster

The July jobs report, to be released Friday, could be among the most politically consequential of the economic downturn caused by the coronavirus pandemic. The labor market has swung wildly since the virus nearly halted the economy in mid-March. Consumer fear of infection and government-mandated shutdowns of businesses caused the loss of more than 20 million jobs in April, the largest decline in a single month in Labor Department records back to the late 1930s. Allowing employers to reopen and recall workers subsequently resulted in the best back-to-back months of hiring in May and June, with employers adding a combined 7.5 million jobs. The July report will show whether the healing continued or sputtered amid rising Covid-19 cases and deaths, as some jurisdictions halted or rolled back reopening plans. The information could influence policy makers’ next steps, businesses’ hiring strategies, consumers’ confidence and voters’ moods, Eric Morath reports.


IHS Markit’s U.S. manufacturing index for July is out at 9:45 a.m. ET.

The Institute for Supply Management’s U.S. manufacturing index for July is expected to rise to 53.8 from 52.6 a month earlier. (10 a.m. ET)

U.S. construction spending for June is expected to rise 1.2% from a month earlier. (10 a.m. ET)

Federal Reserve: St. Louis’s James Bullard speaks at a virtual meeting on the economy and monetary policy at 12:30 p.m. ET, Richmond’s Thomas Barkin speaks to the Northern Virginia Chamber of Commerce at 1 p.m. ET, and Chicago’s Charles Evans speaks at a virtual roundtable on the economy and monetary policy at 2 p.m. ET.

Japan’s Tokyo consumer-price index for July is out at 7:30 p.m. ET.


Neither a Borrower nor a Lender Be

When unemployment soared this spring at the start of coronavirus lockdowns, credit-card debt and delinquencies were widely expected to surge. Instead, amid the deepest economic crisis since the Great Depression, credit-card debt in the U.S. and other advanced economies has fallen. Fewer people are late on their credit-card payments. Consumer demand for new borrowing—through credit cards, personal loans and even pawnshops—is down sharply. The main reason, according to economists and financial executives, is government stimulus programs launched in the U.S. and other advanced economies that have worked unexpectedly well. The flood of money, along with debt-relief measures such as deferred-mortgage and student-loan payments, has stabilized the finances of many households and even left some in better shape than before the pandemic—at least for now, Matthew Dalton and AnnaMaria Andriotis report.

Yeah, but, what happens next? Democrats and Republicans remained at odds in weekend negotiations on a new coronavirus economic relief package, including aid to replace the federal $600-a-week boost to unemployment benefits that expired Friday, Josh Zumbrun reports.

The extra $600 propped up household income and helped lift consumer spending in May and June. As of mid-July, just over 30 million Americans received unemployment benefits through state, long-running federal or new pandemic programs. “In the absence of a new supplemental jobless benefit, the hit to aggregate U.S. household income will be somewhere in the neighborhood of $72 billion and is likely to weigh meaningfully on consumer spending,” economists at Wells Fargo said.

Cases of the new coronavirus in the U.S. reached a record for the month of July. White House coronavirus coordinator Dr. Deborah Birx said the pandemic had reached a new stage and is more widespread than ever. She warned that residents face increased risks of infection and asked schools located in areas experiencing a surge in cases to use distance learning instead of in-person classes.

Areas outside the U.S. are dealing with a coronavirus resurgence. Cases are rising in Europe as young people hit beaches and bars. Melbourne, Australia’s second-largest city, is imposing a tough, new six-week citywide lockdown in a bid to more quickly suppress the spread of the coronavirus.

Markets are weighing in on the U.S. response to the pandemic. The ICE Dollar Index, which measures the dollar against a basket of other major currencies, in July notched its worst month in nearly a decade and recently hit a two-year low. The fall extended a reversal that began in late March, spurred lately by ballooning worries that mounting coronavirus cases will stall the U.S. economic rebound, Amrith Ramkumar reports.

The Official Unofficial GDP Data

With the economy buffeted by unprecedented uncertainty, analysts have turned to a wide range of unofficial, private data to track the economy. It turns out the official scorekeeper does the same. To arrive at Thursday’s estimate of a 32.9% annualized contraction in gross domestic product, the Bureau of Economic Analysis (part of the Commerce Department) made assumptions where data is incomplete, especially June. In a technical note, the agency said those assumptions “were based on a variety of sources, most notably: private high-frequency credit card transactions data to better capture shifts in consumer spending, news reports on reopenings, and industry and trade association reports, that include volume data, such as health care patient visits and traveler throughput.” —Greg Ip

Inner City Blues

A sharp rise in homicides this year is hitting large U.S. cities. The murder rate is still low compared with previous decades, and other types of serious crime have dropped in the past few months. But researchers, police and some residents fear the homicide spike, if not tamed, could threaten an urban renaissance spurred in part by more than two decades of declining crime, Jon Hilsenrath reports.

Recovery Takes Hold in China

A private gauge of China’s manufacturing activity rose in July to its highest level in more than nine years, boosted by accelerated production and recovering demand. The Caixin China manufacturing purchasing managers index, which is weighted toward small private manufacturers, rose to 52.8 in July from 51.2 in June, Caixin Media Co. and research firm IHS Markit said Monday. July’s reading marked the third consecutive month that the Caixin PMI stood above the 50 level separating contraction from expansion. Total new orders, reflecting demand from home and abroad, also increased at the fastest rate since the start of 2011.


Political party matters more than local health policy. “We document four facts: (1) mask use is robustly correlated with partisanship; (2) the impact of partisanship on mask use is not offset by local policy interventions; (3) partisanship is the single most important predictor of local mask use, not Covid severity or local policies; (4) Trump’s unexpected mask use at Walter Reed on July 11, 2020 significantly increased social media engagement with and positive sentiment towards mask-related topics. These results unmask how partisanship undermines effective public responses to collective risk and how messaging by political agents can increase public engagement with mask use,” the University of Chicago’s Maria Milosh and co-authors write in a Becker Friedman Institute working paper.


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.


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Newsletter: Expiration Dateon August 6, 2020 at 10:39 am

This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here.

Next Level?

New applications for unemployment benefits have held persistently at high levels in recent weeks, suggesting layoffs remain elevated and the labor market’s momentum is easing. Initial claims for jobless benefits have held nearly flat at more than 1.3 million a week since late June, according to the Labor Department. That halted what had been a swift decline from a peak of 6.9 million in late March, when the pandemic and business closures shut down parts of the U.S. economy. Similarly, the number of workers receiving unemployment benefits through regular state programs—which covers the majority of workers—has plateaued near 17 million in recent weeks. The stable number suggests that new hires and recalls of workers are offsetting layoffs, but no longer significantly pushing down the number on jobless assistance, Eric Morath reports.

The Labor Department releases jobless claims data at 8:30 a.m. ET.


U.S. jobless claims are expected to register at 1.423 million in the week ended Aug. 1, down slightly from 1.434 million a week earlier. (8:30 a.m. ET)

Dallas Fed President Robert Kaplan speaks about the economy at 10 a.m. ET, and Fed governor Lael Brainard speaks about instant payments at 12 p.m. ET.

Japan household spending for June is out at 7:30 p.m. ET.


Spending Setback

Many economists expect last week’s expiration of $600 in enhanced weekly unemployment benefits to lead to a sharp drop-off in household spending and a setback for the U.S. economy’s near-term recovery, even if the lapse turns out to be temporary. The payments, economists say, allowed consumers to pay rent, utilities, car loans and credit-card bills, protecting the economy from the cascading effects of a sudden drop in consumer demand as the coronavirus pandemic swept across the U.S., Kate Davidson reports.

In normal times, spending by unemployed workers typically falls about 7%, because benefits only replace a fraction of their wages. Since Congress authorized the enhanced payments in March, spending among laid-off workers climbed 10% from before the pandemic, while aggregate spending among people with jobs fell 10%, researchers at the University of Chicago and the JPMorgan Chase Institute found.

There’s still no deal to replace the enhanced benefits, which ran out at the end of July. The White House moved to increase the pressure on Democratic leaders to give ground in their coronavirus-aid negotiations, saying Republicans were prepared to walk away and rely on executive actions by President Trump if an agreement isn’t within reach by the end of the week, Siobhan Hughes reports.

Chicago Fed President Charles Evans said the U.S. economy would face a much steeper climb should Congress fail to at least partially extend more generous unemployment benefits and take broader fiscal policy action. “Trouble is brewing with the expiration of these relief policies,” Mr. Evans told reporters. “If we go very long without somehow addressing the reduction and evaporation of that support, I think it’s going to show up in lower aggregate demand. And that would be very costly for the economy.”

Home Sweet Home, Office, Classroom…

In a world of zero interest rates and bubbly stock markets, your house may offer the best returns of any asset class—provided you think of “return” the right way. Total return is capital gains plus income. With stocks and bonds, the income is dividends or interest—cold, hard cash. But with your house, it is the services it provides, which may not be cashable but are very tangible. Traditionally, the most important service your house delivered was shelter. But since the pandemic, its services have expanded way beyond that: office, classroom, recreation space, Greg Ip writes.

Speaking of services, the Institute for Supply Management’s index of activity in industries such as travel, health care, restaurants and real estate rose to 58.1 from 57.1 in June. Readings above 50 indicate expansion, while a level below that shows a contraction. “Respondents remain concerned about the pandemic; however, they are mostly optimistic about business conditions and the economy as businesses continue to reopen,” said survey director Anthony Nieves.

Trade Trouble

U.S. exports and imports both rose in June for the first time in six months. But trade flows remained well below prepandemic levels, reflecting an only partial economic recovery, Paul Kiernan reports.

The U.S. has become dependent on China for vital pharmaceutical supplies. Acetaminophen, antibiotics and high blood pressure treatments are among a slew of pharmaceutical ingredients made predominantly by China. Pandemic-related disruptions and high demand have expanded concerns about the supply of medicines, Chuin-Wei Yap reports.

Top of the Pops

The Bank of England held its benchmark interest rate steady and said the U.K. economy would take until the end of 2021 to make up the ground lost during the coronavirus pandemic. Officials estimate the economy shrunk by around 20% in the second quarter as a nationwide lockdown to contain the outbreak came into force. That compares with estimates of 9.5% for the U.S. and 12% for the eurozone, highlighting the scale of the U.K.’s economic hit, Jason Douglas reports.

Explosion Brings Lebanon to the Brink

Lebanon was already grappling with an economic and political crisis. Tuesday’s catastrophic explosion destroyed one of Lebanon’s economic arteries, the port of Beirut, and caused billions of dollars in damage. Rebuilding the unraveling economy will be much harder now, Jared Malsin and Nazih Osseiran report.


What if Covid-19 is here to stay? “We do not yet know whether individuals who recover from Covid-19 can be reinfected. If immunity wanes, the disease will become endemic, in sharp contrast to a model in which recovery confers permanent immunity. This column considers the possibility that immunity is indeed only temporary, and derives a stylised optimal containment policy to reduce the initial wave of contagion and then manage persistent infections. In practice, this means that partial lockdowns and social distancing measures may be the norm for years to come,” Chryssi Giannitsarou and Flavio Toxvaerd write at the Center for Economic Policy Research.


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.


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Newsletter: Jobs, Jobs, Jobson August 7, 2020 at 10:35 am

This is the web version of the WSJ’s newsletter on the economy. You can sign up for daily delivery here.

It’s jobs day! We’ll have a special edition of the newsletter after official U.S. employment numbers are out. First, Jeff Sparshott here with the latest on the economy.

Fresh Low, Still High

Filings for jobless benefits fell to their lowest level since the coronavirus hit the U.S. in March—a sign layoffs eased somewhat in a still struggling labor market. Initial unemployment claims fell by a seasonally adjusted 249,000 to 1.2 million for the week ended Aug. 1, the Labor Department said. While lower, the figure remained at a historically high level for the 20th straight week and well above the pre-pandemic record of 695,000 in 1982. The number of people receiving benefits through regular state programs, which cover the majority of workers, decreased to its lowest level since April, Eric Morath reports.

The decline in applications came as an extra $600 a week in pandemic-related unemployment benefits ended. Analysts were split on the degree to which the end of enhanced unemployment benefits caused the slight drop. Lawmakers and the White House continue to negotiate benefit levels as part of a broader stimulus package.


U.S. nonfarm payrolls for June are expected to rise by 1.482 million from the prior month and the unemployment rate is expected to fall to 10.6% from 11.1%. (8:30 a.m. ET)

The Baker Hughes rig count is out at 1 p.m. ET.

U.S. consumer credit for June is out at 3 p.m. ET.


In Focus

Hiring gains are expected to have cooled in July, a sign of a slowing economic recovery amid rising coronavirus cases. Economists surveyed by The Wall Street Journal project payrolls grew by 1.5 million in July and forecast the unemployment rate dropped to 10.6% from 11.1% in June. Such job gains would signal the labor-market recovery continued, though at a weaker pace than in the previous two months. Before the coronavirus drove the U.S. into a deep recession this year, the unemployment rate was hovering around a 50-year low of 3.5%, Sarah Chaney reports.

Employers added more than 7 million jobs in May and June combined, as many states lifted lockdown restrictions on businesses. That partially offset the about 21 million jobs shed in March and April. “On balance, we’re still in a hole,” said Julia Coronado, economist at MacroPolicy Perspectives. “The pace of recovery has really been set back by the resurgence of the virus.”

Seller’s Market?

Foreign purchases of U.S. homes dropped to the lowest level since 2013, a boost for domestic buyers at a time when inventory has been tight. Chinese government control over foreign purchases, slowing global growth and a stronger dollar all contributed to the reduced foreign investment in U.S. housing, Nicole Friedman reports.

Alongside less competition from foreign purchasers, U.S. homebuyers are seeing record-low mortgage rates. Freddie Mac said a 30-year fixed-rate mortgage averaged 2.88% this week, the lowest in the survey’s history dating back to 1971.

But for new-home buyers, some commodity costs are rising. Lumber futures ended Thursday at a record high, propelled by a do-it-yourself remodeling boom and resurgent home builders. Prices have been sent soaring by saw mills that failed to anticipate the coronavirus pandemic setting off a building boom, Ryan Dezember reports.

Electric Avenue

Coronavirus shutdowns are shifting energy costs to individuals. Beginning in March, when businesses across the country snapped off the lights and sent employees home to curb the spread of Covid-19, overall electricity consumption declined. But household energy use surged, with some New York City apartments consuming, on average, 23% more electricity during business hours—a shift that, with the accompanying expense, could make things worse for those already suffering financially as a consequence of the pandemic, Jo Craven McGinty writes.

Taking Aim at China

The White House shot with both barrels at Sino-U.S. financial links Thursday, firing off a plan that could force Chinese companies to give up U.S. listings and executive orders restricting transactions related to ByteDance and Tencent Holdings, two major Chinese tech companies. The announcements are another big turn in the unwinding of a trans-Pacific commercial, financial and technological relationship built up over years, and a symbol of how quickly things are now deteriorating. The next couple of months particularly seem likely to bring even more, Mike Bird writes.

Despite rising political tensions between Washington and Beijing, American brands have suffered little commercial fallout among Chinese consumers, enabling them to capitalize on the economic rebound in China, Trefor Moss reports.

Global Demand Perks Up

German exports rose in June for the second consecutive month after suffering a record decline in April due to restrictions aimed at containing the coronavirus. And China’s exports posted a stronger-than-expected growth in July, as the gradual relaxation of lockdown policies in Europe and the U.S. boosted demand for Chinese goods.


The pandemic has devastated hundreds of thousands of businesses across Latin America, setting back the clock on the social and economic gains made over the past two decades when a global commodities boom powered breakneck growth. From 2003 to 2019, poverty fell from 45% to 30% regionwide, and poor Latin Americans by the millions, poised on the threshold of middle-class life, took their first airline flight, bought their own homes and paid university tuitions for their children. Now Latin America’s economy is expected to contract 9.4% this year, according to the International Monetary Fund, the worst downfall on record for a region that was already wrestling with political turmoil and social unrest before it became a hot spot for Covid-19, Ryan Dube and Juan Forero report.


The direct economic cost of school closures in the U.K. will be minor to moderate. “However, the panel was unanimous that school closures will increase inequality, with a large majority of the panel predicting a persistent increase in inequality. The panel also predicted harm to gender equality, with many predicting persistent increases in inequality along gender lines,” economists said in a Center for Macroeconomics survey.


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.


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