• Financial stress is mounting in the Farm Belt, pushing more growers to take on high-interest loans outside traditional banks to stay in business Link
    Real Time Economics Fri 15 Nov 2019 20:31

    After his local farm bank wouldn’t lend him as much as he said he needed in 2017, Iowa farmer James Kron turned to Ag Resource Management LLC, a Texas-based financial-services firm. Now, when he takes his corn and soybeans to grain elevators near his farm, he signs the checks over to ARM until his loan is paid back in full.

    He is one of many farmers leaning on alternative lenders to make it through the steepest agricultural downturn in a generation. With crop prices stuck at low levels, traditional farm banks are placing stricter terms on farm loans and doling out less money, leaving cash-strapped farmers such as Mr. Kron to seek capital from more lightly regulated entities.

    While firms including ARM, FarmOp Capital LLC and Fora Financial LLC can be a lifeline for farmers, their loans can carry interest rates double those of traditional farm banks, said farmers, agricultural economists and lenders. The funding can require closer monitoring of how farmers spend as...

  • Fed’s Jerome Powell signals comfort with current interest-rate stance Link
    Real Time Economics Fri 15 Nov 2019 19:56

    WASHINGTON—Federal Reserve Chairman Jerome Powell told lawmakers the central bank saw little need to cut interest rates further after making three reductions since July.

    “We see the current stance of monetary policy as likely to remain appropriate as long as incoming information about the economy remains broadly consistent with our outlook of moderate economic growth, a strong labor market” and stable inflation, Mr. Powell told Congress’s Joint Economic Committee on Wednesday.

    ...
  • Fed flags elevated asset prices, high debt as U.S. financial risks Link
    Real Time Economics Fri 15 Nov 2019 19:21

    WASHINGTON— The Federal Reserve identified elevated asset prices and historically high debt owed by U.S. businesses as top vulnerabilities facing the U.S. financial system, according to the latest copy of the central bank’s financial stability report.

    The Fed cited potential risks tied to non financial corporate borrowing, particularly leveraged loans—a $1.1 trillion market that the Fed warned is growing quickly despite consistently “weak” credit standards.

    ...
  • The U.S. and China are near a trade deal, but President Trump isn’t ready to sign off, White House economic adviser Lawrence Kudlow says. Link
    Real Time Economics Fri 15 Nov 2019 18:51

    WASHINGTON—The U.S. and China are nearing a trade deal, but President Trump isn’t ready to sign off, White House economic adviser Lawrence Kudlow said Thursday.

    They are getting close to an agreement, Mr. Kudlow said in an event held at the Council on Foreign Relations.

    “The mood music is pretty good,” he said, adding that Mr. Trump “likes...

  • Boston Fed leader Eric Rosengren warned many top central banks have a limited tool kit to deal with the next downturn Link
    Real Time Economics Fri 15 Nov 2019 18:21

    Boston Fed leader Eric Rosengren warned on Monday many top central banks have a limited tool kit to deal with the next downturn, and added efforts to roll back regulations on banks may be exacerbating risks to the financial sector.

    “With rates this low, there is very little room to reduce short-term rates should the economy stumble, as the Fed normally cuts rates well over 4 percentage points during a recession,” Mr. Rosengren said in the text of a speech to be delivered at a conference in Norway.

    ...
  • The Fed's John Williams said that after three rate cuts, the U.S. central-bank interest-rate policy is in the right place to deal with the current environment of uncertainty Link
    Real Time Economics Fri 15 Nov 2019 17:46

    Federal Reserve Bank of New York President John Williams echoed the views of many of his colleagues Thursday, saying that after three rate cuts, U.S. central-bank interest-rate policy is in the right place to deal with the current environment of uncertainty.

    “The economy is in a good place, and monetary policy is as well,” Mr. Williams said in the text of a speech to be presented at a conference at the San Francisco Fed. “My forecast is for moderate GDP growth, the labor market remaining strong, and inflation moving back to...

  • The increase in retail sales suggests consumers continue to hold up well, despite lingering global trade tensions and a broader slowdown in the manufacturing sector Link
    Real Time Economics Fri 15 Nov 2019 17:16

    WASHINGTON—Americans spent more on shopping in October, signaling consumer spending remains on solid footing.

    Retail sales—a measure of purchases at stores, restaurants and online—rose a seasonally adjusted 0.3% in October from a month earlier, the Commerce Department said Friday. Economists surveyed by The Wall Street Journal expected a 0.2% increase. The rise in October follows a drop in September, when sales fell 0.3%, the same as previously estimated.

    ...
  • A strong labor market also means many jobless people today quit their jobs voluntarily and so are ineligible for benefits in most cases. Link https://t.co/qDMsnDdF2d
    Real Time Economics Fri 15 Nov 2019 16:41

    Fewer jobless Americans are relying on unemployment insurance amid tighter state rules on obtaining the benefits and a strong job market.

    The share of jobless people receiving unemployment benefits fell after the 2007-09 recession and has stagnated at a historically low level since. Last year, 28% of jobless people received benefits, down from 37% in 2000—a period of similarly low unemployment.

    Among...

  • Taken together, the Trump administration's price-disclosure initiatives could reshape the $3.5 trillion health-care industry. Link
    Real Time Economics Fri 15 Nov 2019 16:06

    The administration proposed extending the disclosure requirement to the $670 billion health-insurance industry. Insurance companies and group health plans that cover employees would have to disclose negotiated rates, as well as previously paid rates for out-of-network treatment, in file formats that are computer-searchable, officials said.

    The insurers, including Anthem Inc. and Cigna Corp. , would have to provide a transparency tool to give cost information to consumers in advance, senior administration officials said.

    The requirements are more far-reaching than many industry leaders had expected and could upend commercial health-care markets, which are rife with complex systems of hidden charges and secret discounts. The price-disclosure initiative has become a cornerstone of the president’s 2020 re-election health strategy, despite threats of legal action from industry.

    “Right now there is too much arbitrage in the system,” a senior administration...

  • The Fed’s market interventions are aimed at ensuring that the financial system has enough liquidity and that short-term borrowing rates remain well-behaved Link
    Real Time Economics Fri 15 Nov 2019 15:36

    The Federal Reserve Bank of New York added $68.343 billion to financial markets on Friday.

    The liquidity came in the form of a repurchase agreement operation that will expire on Monday. The Fed accepted $61.043 billion in Treasurys, $1 billion in agencies and $6.3 billion in mortgage bonds, and took everything eligible banks offered.

    Fed repo...

  • Elizabeth Warren’s tax proposals would push federal rates on some billionaires and multimillionaires above 100% to finance social programs. Link
    Real Time Economics Fri 15 Nov 2019 15:21

    WASHINGTON—Democratic presidential candidate Elizabeth Warren has unveiled sweeping tax proposals that would push federal tax rates on some billionaires and multimillionaires above 100%.

    That prospect raises questions for taxpayers and the broader economy that experts are starting to ponder: Under which circumstances would taxpayers have to pay those rates? How might that change their behavior? And would investment and economic growth suffer?

    ...
  • Consumer spending on big-ticket items in October was mixed: Vehicle sales were up, while furniture and home-furnishing sales dropped. Link
    Real Time Economics Fri 15 Nov 2019 14:51

    WASHINGTON—Americans spent more on shopping in October, signaling consumer spending remains on solid footing.

    Retail sales—a measure of purchases at stores, at restaurants and online—rose a seasonally adjusted 0.3% in October from a month earlier, the Commerce Department said Friday. Economists surveyed by The Wall Street Journal expected a 0.2% increase. The rise in October follows a drop in September, when sales fell 0.3%, the same as previously estimated.

    ...
  • The U.S. and China are near a trade deal, but President Trump isn’t ready to sign off, White House economic adviser Lawrence Kudlow says. Link
    Real Time Economics Fri 15 Nov 2019 14:25

    WASHINGTON—The U.S. and China are nearing a trade deal, but President Trump isn’t ready to sign off, White House economic adviser Lawrence Kudlow said Thursday.

    They are getting close to an agreement, Mr. Kudlow said in an event held at the Council on Foreign Relations.

    “The mood music is pretty good,” he said, adding that Mr. Trump “likes...

  • Consumer spending on big-ticket items in October was mixed: Vehicle sales were up, while furniture and home-furnishing sales dropped. Link
    Real Time Economics Fri 15 Nov 2019 13:55

    WASHINGTON—Americans spent more on shopping in October, signaling consumer spending remains on solid footing.

    Retail sales—a measure of purchases at stores, at restaurants and online—rose a seasonally adjusted 0.3% in October from a month earlier, the Commerce Department said Friday. Economists surveyed by The Wall Street Journal expected a 0.2% increase. The rise in October follows a drop in September, when sales fell 0.3%, the same as previously estimated.

    Spending at gas stations was up 1.1% during October, helping drive the overall advance in sales last month.

  • Newsletter: Why aren’t more Americans claiming jobless benefits? Link
    Real Time Economics Fri 15 Nov 2019 13:50

    Good morning. Jeff Sparshott here to take you through the latest on the labor market, consumer spending, trade, the Fed and bond markets. Send us your questions, comments and suggestions by replying to this email.

    Holes in the Safety Net?

    Fewer jobless Americans are relying on unemployment insurance. One reason: Tighter state rules on obtaining the benefits, Sarah Chaney reports.

  • Mexico’s economy barely grew in the third quarter, with GDP rising 0.1% from the second, as industrial output shrank 0.1% and services were unchanged Link
    Real Time Economics Fri 15 Nov 2019 01:55

    MEXICO CITY—Mexico’s economy barely grew in the third quarter amid weakness in industrial production and a slowdown in services, keeping the economy on track this year for its weakest performance in a decade.

    Gross domestic product, a measure of output of goods and services, expanded 0.1% in seasonally adjusted terms from the second quarter, the National Statistics Institute said Wednesday. Industrial production shrank 0.1%, services were unchanged and agricultural production grew 3.5%.

    ...
  • Personal-consumption expenditures, or household spending, increased a seasonally adjusted 0.2% Link
    Real Time Economics Fri 15 Nov 2019 00:55

    WASHINGTON—Households increased spending heading into the fourth quarter, suggesting consumers have continued to help prop up U.S. economic growth.

    Personal-consumption expenditures, or household spending, rose a seasonally adjusted 0.2% in September from August, the Commerce Department said Thursday. Outlays rose at a similar pace in August after growing more briskly in the first half of 2019.

    Consumers...

  • Canada’s gross domestic product, which tracks broad activity in goods and services in the economy, climbed 0.1% in August from the previous month. Link
    Real Time Economics Thu 14 Nov 2019 23:50

    OTTAWA—Canadian economic output rebounded in August after stalling in the previous month, although growth was tepid and indicative of an economy grappling with the fallout from global-trade uncertainty.

    Canada’s gross domestic product, which tracks broad activity in goods and services in the economy, climbed 0.1% in August from the previous month to a seasonally adjusted 1.973 trillion Canadian dollars ($1.500 trillion), Statistics Canada said Thursday. The result matched market expectations, according to economists at BMO...

  • The pace of U.S. economic growth slowed slightly during the third quarter as business investment declined, although solid consumer spending and an improvement in the housing sector kept economic growth on track. Link
    Real Time Economics Thu 14 Nov 2019 22:50

    WASHINGTON—U.S. economic growth settled in at a lower gear in the third quarter, with consumer spending and housing investment increases offsetting a business investment drop.

    Gross domestic product—the value of all goods and services produced in the U.S.—rose at an annual rate of 1.9% from July through September—adjusted for inflation and seasonality, the Commerce Department said Wednesday, compared with 2.0% in the second quarter.

    ...
  • Sen. Elizabeth Warren’s health plan risks unintended consequences such as overuse of health care, fewer breakthrough drugs and potentially fewer doctors serving patients Link
    Real Time Economics Thu 14 Nov 2019 21:50

    At the heart of presidential candidate Sen. Elizabeth Warren’s ambitious Medicare for All plan is this tantalizing promise: the U.S. can spend less on health care than it does now yet get a lot more for it: 32 million people currently uninsured will have coverage, while copays and deductibles will disappear and everyone will get long-term care.

    How does she do it? By saving trillions of dollars spent on things she claims have zero value: administrative overhead, inflated salaries of hospital executives and surgeons, and exorbitant...

  • The @WSJ's calendar of key economic events is getting easier to use and will now work across multiple platforms, including Outlook, Google and Apple. Sign up here: Link https://t.co/tVCTaulpk8
    Real Time Economics Thu 14 Nov 2019 20:45

    Federal Reserve officials cut interest rates for the third time this year on Wednesday and began to downplay expectations of further cuts for now. We'll bring you live coverage and analysis through the close of markets.

  • Fewer jobless Americans are relying on unemployment insurance amid tighter rules on obtaining the benefits and a strong job market Link
    Real Time Economics Thu 14 Nov 2019 19:45

    Fewer jobless Americans are relying on unemployment insurance amid tighter state rules on obtaining the benefits and a strong job market.

    The share of jobless people receiving unemployment benefits fell after the 2007-09 recession and has stagnated at a historically low level since. Last year, 28% of jobless people received benefits, down from 37% in 2000—a period of similarly low unemployment.

    Among...

  • The U.S. government ran a $134 billion budget gap in the first month of the fiscal year, pushing the 12-month deficit past $1 trillion for the first time since February 2013. Link
    Real Time Economics Thu 14 Nov 2019 18:45

    WASHINGTON—The U.S. budget gap grew 34% in the first month of the fiscal year as federal spending outpaced revenue growth, pushing the 12-month deficit past $1 trillion for the first time since February 2013.

    The government ran a $134 billion budget deficit in October, the Treasury Department said Wednesday. Federal outlays totaled $380 billion, an 8% increase from a year earlier and a record for the month, driven by higher spending on the military, health care and Social Security.

    ...
  • Europe’s stuttering powerhouses start to steady but their Asian counterparts remain caught in a downward trajectory Link
    Real Time Economics Thu 14 Nov 2019 17:40

    The global economy shows few signs of rebounding from its slowdown, as fresh figures indicate that Germany and Japan are close to stagnation, while China continues to cool.

    Talks between the U.S. and China on resolving their trade dispute and signs the U.K. may leave the European Union on agreed terms have eased fears of a further sharp slide in global growth. But recent economic data suggest the diminished risk of a major rupture in the world trade system has yet to lift the outlook for 2020.

    ...
  • Fed’s Bullard says policy helping economy more than rate cuts would suggest Link
    Real Time Economics Thu 14 Nov 2019 17:40

    St. Louis Fed leader James Bullard said Thursday the U.S. economy is getting stimulus from central bank policy beyond what three rate cuts would indicate, even as he worried the economy could slow more than expected.

    “U.S. monetary policy is considerably more accommodative today than it was as of late last year,” Mr. Bullard said in a presentation for an event in Louisville, Ky. The Fed “has taken actions that have changed the outlook for shorter-term U.S. interest rates considerably over the last 12 months, ultimately providing...

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