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Monday, November 30, 2020
Finances affect people of all ages, but we are quickly becoming a world in which older generations have significant wealth. For example, it is estimated that people older than the age of 50 are the wealthiest segment of society within the United States. A study from 2016 shows that...
The American economy continues to heal from the devastating effects of the first wave of the coronavirus pandemic last spring, but a new wave of cases threatens prospects for sustained growth.The Labor Department reported Friday that employers added 638,000 jobs in October, a figure that would have been larger without a drop in temporary census workers.But the engines behind much of the gain — bars and restaurants, which added 192,000 jobs, and retailing, which picked up 104,000 — represent some of the jobs most at risk from a resurgence in coronavirus cases.Public health experts have linked a return to indoor dining and drinking establishments with increased cases of Covid-19, and those businesses face renewed restrictions as the outbreak worsens. Cooler temperatures are already curtailing outdoor dining, a lifeline for restaurants in many parts of the country.Similarly, if apprehensive consumers stay away from shopping centers, retail hiring could be curtailed as the year-end shopping season approaches.Job openings have been weaker than expected as retailers gear up for the holidays, according to Daniel Zhao, senior economist at the jobs site Glassdoor. “This could point to more muted spending and hiring,” he said. And despite the recent gains, employment in the leisure and
WASHINGTON — Federal Reserve officials made only minor adjustments to their policy statement Thursday, leaving rates unchanged and pledging to act as needed to protect the economy and sustain its recovery from the depths of the pandemic-spurred recession.“Economic activity and employment have continued to recover but remain well below their levels at the beginning of the year,” policymakers said in their post-meeting statement. Fed Chair Jerome H. Powell, speaking at a news conference following the meeting, said the economic outlook is “extraordinarily uncertain” and called the rise in new coronavirus cases in both the United States and overseas “particularly concerning.”“The pace of improvement has moderated,” Mr. Powell said, adding that while the housing market has recovered and spending on goods has been strong, “spending on services remains low,” in large part because people cannot gather closely. The Fed slashed interest rates to nearly zero in March and has been buying huge quantities of government-backed bonds in an attempt to keep markets functioning smoothly and to stimulate demand.Low rates do seem to be helping to fuel a recovery. Housing has been a bright spot in the pandemic-damaged economy, for instance, as families refinance to take advantage of mortgage savings and as
COUNTRIES NOTCHED up absurdly high growth rates in the third quarter. America’s GDP rose by 7.4%, compared with the second (an annualised rate of 33%). Output in the euro area grew by 12.7%. But there is little reason for cheer. The resurgence of covid-19, and lockdowns to contain the virus, seem likely to stop the economic recovery in its tracks. Such fears drove oil prices to a five-month low on November 2nd. Using mobility data from Google, The Economist has constructed an index of real-time economic activity. This suggests that America’s recovery has come to a halt as recorded covid-19 cases have risen again. Europe, with a higher number of infections, is faring worse. Activity in Britain and France seems to have peaked in September and performance is set to slip given that Britain, France and Germany returned to varying degrees of lockdown in the past week or so. It is too soon to see the full impact of these new lockdowns in our index. They should at least be less damaging than those earlier in the year: more manufacturing and construction firms, for instance, will stay open this time. Still, the experience of places that have
FOR THE past quarter-century, growth came so easily to the developing world that it can be hard to remember it was ever otherwise. Fuelled by globalisation, real GDP per person in emerging economies more than doubled from 1995 to 2019, in purchasing-power-parity terms. In advanced countries, by contrast, it grew by only 44%. The burst of growth consigned to the scrapheap decades’ worth of arguments about whether and how poor countries could catch up with rich ones. But explosive trade growth has ended, and the industrialised world is turning inward. Some governments are therefore dusting off old ideas. Among them is “import-substituting industrialisation” (ISI), a strategy that seeks to develop industrial capacity by shielding domestic producers from foreign competition. Many countries may feel they have little choice but to give the idea a try, but as the conditions that might allow it to succeed are generally absent in the poorest of economies, the revival seems doomed to fail. Between 1990 and 2008, global trade as a share of GDP rose from 39% to 61%. This “hyperglobalisation”, as Martin Kessler and Arvind Subramanian of the Peterson Institute for International Economics dubbed it, facilitated rapid, broad-based economic expansion. After the late
CAN YOU identify what or whom the following describes: is widely disliked around the world; might have been ditched by some supporters earlier had convincing alternatives existed; has had a difficult six months; and refuses to go quietly? Here’s another clue: this is not a column about politics. The answer is the dollar. It is the most unloved of major currencies, apart from all the others. And, oddly, it has been given a fillip by a messy election result at home. Or perhaps that is not so odd. The dollar’s resilience has been one of the more monotonous motifs in financial markets in recent years. Dollar strength is twinned with another hardy theme—the growing heft of America’s companies, notably its tech giants, in global equity markets. The dollar matters for America, but it matters for everywhere else, too. A weaker dollar would trigger a period of catch-up by the rest of the world’s economies and asset markets. Such a prospect is seemingly delayed. A reason for dollar resilience is growing doubts over fiscal stimulus in America. The election was supposed to be the start of a new era of fiscal largesse. Agreeing on any
GEORGE AZZI no longer allows customers inside his pharmacy. Too many shops have been robbed. Instead he takes orders through a plexiglass window. But now, he jokes, there is not much left to steal. A currency crisis has left his shelves half-empty. A nearby petrol station has rationed supplies, limiting drivers to 20 litres. The supermarket around the corner has not stocked fresh chicken for weeks because poultry farmers will not sell at the government-mandated price. Lebanon has spent the past year lurching from one crisis to the next: protests, covid-19, the catastrophic explosion at Beirut’s port on August 4th. In the background all along has been a grinding economic collapse. Pegged for decades at 1,500 to the dollar, the Lebanese pound recently traded on the black market as low as 9,000. Annual inflation hit 120% in August. GDP may shrink by a quarter this year. Subsidies have kept a few essentials affordable: medicine, fuel, a morning manoucheh (flatbread). But the central bank, the Banque du Liban (BdL), has less than $2bn in usable foreign-currency reserves remaining. By the year’s end it will be unable to maintain its subsidy scheme, through which it grants
Helen Lachs Ginsburg, an economist and leading authority on full employment, or what has been called a job guarantee, died on Oct. 8 in a hospital in Queens. She was 91. Her family said she had multiple health problems.Dr. Ginsburg had retired as a professor of economics at Brooklyn College, where she specialized in labor and social welfare. She studied the public policy’s ramifications of full employment in the United States as well as in Sweden, and she received several awards from the U.S. Department of Labor.Full employment — defined as an economy in which anyone who wants a job can find one — has been part of the national conversation since the early 20th century.President Franklin D. Roosevelt was a strong proponent of full employment during the Depression. His hiring programs, including the Works Progress Administration and the Civilian Conservation Corps, provided significant relief for many workers, but their temporary nature made them insufficient to achieve the long-term benefits that he had hoped for.“Living-wage jobs as a right may seem unrealistic,” Dr. Ginsburg wrote in a 2011 article, “but so once did the right of all children to go to school, the right of women to vote and the
THE TREASURY market has long been able to strike fear into the hearts of the powerful. Frustrated by worries in the 1990s that bond yields would spike if Bill Clinton, then America’s president, pushed through economic stimulus, James Carville, his adviser, joked that he wanted to be reincarnated as the bond market, because “you can intimidate everybody”. In the quarter-century since then, Treasuries have only become more pivotal to the world’s financial system. The stock of tradable bonds amounts to $20.5trn, and is expected to approach 100% of America’s GDP this year, roughly double the share in the 1990s (see chart). The dollar’s dominance means that everyone holds them, from American banks and European pension schemes to Arab sovereign-wealth funds and Asian exporters. The yield on Treasuries is known as the “risk-free” interest rate, and underpins the value of every other asset, from stocks to mortgages. In times of stress investors sell racier assets and pile into Treasuries. The outcome of America’s presidential election is still unknown, and the likelihood of a Biden presidency and a Republican-controlled Senate is rising. The yield on ten-year Treasuries fell by 0.16 basis points to 0.78% on November 4th,
When the Church Brew Works opened in 1999, it amounted to a rare bit of good news for the Lawrenceville neighborhood of Pittsburgh. Its population had shrunk by half since 1960. A quarter of its residents were over 65, mostly old-timers who once worked at the steel mills that hugged the Allegheny River.The community had “its guts ripped out,” said Sean Casey, who opened the brewery in a Catholic church that had been deconsecrated six years before. Its immediate neighbor was a building where drug dealers made crack cocaine.It’s hard to recognize that Lawrenceville today. Carnegie Robotics has a facility in the neighborhood, as does the National Robotics Engineering Center and Caterpillar’s automation center. The population is much younger.The Church Brew Works had a hand in this transformation. “As the technology sector started to be more successful, it attracted young professionals with disposable income wanting to eat better,” said Michael Madison, a law professor at the University of Pittsburgh who has blogged about the city.The brewery not only provided food and beer. People “come in and discover the lost art of conversation,” Mr. Casey said.The coronavirus pandemic has shut down many of these conversations. Business has declined 75 percent. By
JACK MA WAS in a triumphant mood shortly after Ant Group, his Chinese fintech firm, priced its initial public offering—set to be the world’s biggest ever, with almost $40bn worth of shares sold. Speaking at a summit in Shanghai on October 24th, he chided regulators for being too focused on preventing financial risks. Red tape, he said, only held up innovation. Ten days later his words came back to haunt him. Less than 48 hours before its stock was to begin trading in Hong Kong and Shanghai, Ant was forced by Chinese regulators to halt the flotation. The group said in a regulatory notice to the Hong Kong exchange that the IPO, scheduled for November 5th, had been suspended because the company “may not meet listing qualifications or disclosure requirements”, after the regulator conducted an interview with Mr Ma and other executives. The filings also mentioned “recent changes in the fintech regulatory environment”, hinting that newly published rules may have got in the way. The sudden suspension also suggests that some powerful officials may be displeased with Mr Ma, a self-made man who, by the conservative standards of big business in China, has an outspoken streak.
The State of The Investment Market and Scam prevention Methods Seoul's economy in Korea has been growing even during the global financial crisis in 1998 and has maintained its stability since then. It is dominated by chaebols or more commonly known as family-owned conglomerates. However, Global Asset Managements' world-renowned economists...