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Real Time Economics |
Good morning. Jeff Sparshott here with the latest on the economy. You can send questions, comments and suggestions by replying to this email. |
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These Aren't the Jobs You're Looking For |
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The number of job openings held at record levels headed into the summer as employers sought to fill positions from a limited pool of workers. The Labor Department said job openings rose at the end of May by 16,000, pushing the total to a new high of 9.2 million in records dating back to 2000. The number of available jobs nearly matched the 9.3 million Americans who were unemployed but actively seeking work in May, reflecting an unusual tightness in the job market. The number of unemployed workers has typically exceeded available jobs, except for a period from 2018 to early 2020 when the unemployment rate trended near a 50-year low, Bryan Mena reports. |
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Employers are doing what they can to hang on to workers. The layoffs and discharges rate, which shows the share of workers who faced involuntary separations initiated by their employer, was the lowest on record. Workers were a little more opportunistic. The quits rate matched the second-highest on record, tied with March and just below April's reading. |
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The Beveridge Curve (named for British economist William Beveridge) illustrates the relationship between job openings and unemployment. Data from the latest recession and rebound show a big rightward shift in the curve, suggesting a significant disconnect between employers and potential employees. That disconnect, if it persists, could ripple through the economy, pushing wages and inflation higher, and possibly slowing the recovery. |
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The European Central Bank announces the outcome of a strategy review at 7 a.m. ET, and releases minutes from its June 9-10 meeting at 7:30 a.m. ET. U.S. jobless claims are expected to fall to 350,000 in the week ended July 3 from 364,000 a week earlier. Follow our coverage here. (8:30 a.m. ET) The Federal Reserve releases its May consumer credit report at 3 p.m. ET. China's producer-price index for June is expected to rise 8.8% from a year earlier, and the consumer-price index is forecast to rise 1.2% from a year earlier. (9:30 p.m. ET) 📰 Enjoying this newsletter? Get more from WSJ and support our work with a special subscription offer. |
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Ketchum, Idaho, has plenty of jobs available. The problem: Workers can’t afford housing. Like many towns in the West with economies built around tourism, Ketchum is facing a cascading housing crisis caused by a rush of new residents during the Covid-19 pandemic, growing demand for workers during the economic boom that has followed, and a shortage of affordable homes that was years in the making. Businesses in this community of 2,700 are struggling to fill open positions, forcing some to cut hours. Some workers live in trailers or tents in the Sawtooth National Forest. And the waiting list for the 113 affordable-housing units for sale or rent in surrounding Blaine County is yearslong, Dan Frosch reports. |
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“Idaho is a beautiful place. People are willing to compromise low wages to live here. Well, now they don’t have a place to live.” | — Ketchum Mayor Neil Bradshaw |
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Australia could face a surge in wage growth and inflation if the country’s international borders remain closed to foreign workers for some time, Reserve Bank of Australia Gov. Philip Lowe said Thursday. Mr. Lowe said the most significant challenge to labor supply in the country was the closed border, which has normally been a major source of skilled workers for the economy over many decades, James Glynn reports. |
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Federal Reserve officials suggested that they might need to pull back their support for the economy sooner than they had anticipated because of stronger-than-expected growth this year. Fed officials discussing the matter at their June 15-16 policy meeting weren’t ready to reduce their $120 billion in monthly purchases of Treasury and mortgage securities, according to minutes of the gathering released Wednesday. But an unspecified number thought that time could be approaching. The minutes offer a strong sign officials will ramp up more formal deliberations at their next meeting, July 27-28, over when and how to reduce the bond buying, Nick Timiraos reports. Yields on U.S. government bonds reached fresh multimonth lows on Wednesday, reflecting investors’ anxiety about the economic outlook and new concerns about the highly contagious Delta variant of Covid-19. Yields have been dragged down in recent months by investors reassessing their more optimistic economic forecasts amid signs that Congress and the Fed might not provide quite as much stimulus as previously anticipated, Hardika Singh and Sam Goldfarb report. Bonds extended their decline early Thursday as investors continued to pull back from bets on a spell of high growth and inflation. |
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Americans are borrowing again, in some cases at levels not seen in more than a decade. Consumer demand for auto loans and leases, general-purpose credit cards and personal loans was up 39% in April compared with the same period last year, according to credit-reporting firm Equifax, and up 11% compared with April 2019. Lenders are meeting the moment. Equifax said lenders extended a record number of auto loans and leases in March, the latest month for which data are available. They also bumped up credit-card originations, issuing more general-purpose credit cards than any other March in records dating back to 2010, AnnaMaria Andriotis reports. |
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Passengers have flocked back to airports more quickly than airlines anticipated, triggering headaches like delayed and canceled flights and highlighting the complexity of resurrecting the industry after more than a year of near-hibernation. Bad weather has caused some of the problems, but union officials and industry observers also cite staff shortages after too many pilots, mechanics and other workers were let go to cut costs during the pandemic, Alison Sider reports. |
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The Biden administration will push regulators to confront consolidation and perceived anticompetitive pricing in the ocean shipping and railroad industries as part of a sweeping executive order expected this week. The Democratic president is trying to blunt big business while introducing more competition in areas across the economy, Ted Mann reports. |
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Coal use is surging in some of the world’s largest economies as electricity demand rebounds from the pandemic. Coal was in decline for years in many countries amid growing pressure from governments, investors and environmentalists to curb carbon emissions. The leading reason for the resurgence—which has pushed coal prices to multiyear highs—is rising power demand as economies reopen rapidly from the pandemic, Sarah McFarlane and Katherine Blunt report. |
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What would happen if the U.S. introduced a universal basic income? "Our bounds demonstrate that the introduction of a UBI will have a large effect on earnings and tax rates. For example, even if one abstracts from any disincentive effects from higher taxes that are needed to finance this transfer program, each dollar of UBI will reduce total earnings by at least 52 cents. With the relatively modest disincentive effects of a Marshallian earnings elasticity of 0.3, a UBI crowds out earnings essentially one for one," the University of Chicago's Mikhail Golosov and colleagues write in a wide-ranging paper on how Americans respond to windfall gains in income. |
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