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West Coast dwelling costs are falling for the primary time since 2012, the hometown of Pixar Animation Studios now has the nation’s highest minimal wage, and the Justice Division is opening an antitrust evaluation on Huge Tech. Good morning. Jeff Sparshott right here to take you thru key developments within the international economic system. Ship us your questions, feedback and solutions by replying to this e-mail.

Home of Ache

House costs in main West Coast cities declined for the primary time since 2012 and the nation’s dwelling gross sales slumped in June, ending the spring promoting season with a thud, Laura Kusisto, Will Parker and Abigail Summerville report. The shortage of momentum is predicted to weigh on second-quarter financial progress.

House values within the Bay Space, Los Angeles and Seattle have roughly doubled over the previous seven years; costs might must retreat additional earlier than consumers do greater than look
Nationwide, existing-home gross sales fell 2.2% in contrast with a yr earlier, marking the 16th consecutive month of annual declines. 
Falling gross sales have puzzled economists: The economic system is increasing, borrowing charges have fallen to their lowest ranges in two years, wages are rising and unemployment is at a 50-year low.

WHAT TO WATCH TODAY

Caterpillar reviews earnings this morning. The producer is usually seen as a barometer for the broader economic system.

IHS Markit’s U.S. flash manufacturing index for July is predicted to tick as much as 51.zero from 50.6 on the finish of June. (9:45 a.m. ET)

U.S. new-home gross sales for June are anticipated to rise to an annual tempo of 659,000 from 626,000 a month earlier. (10 a.m. ET)

TOP STORIES

Face Time

A U.S. delegation is predicted to journey to China for commerce talks subsequent week, marking what could be the first in-person talks because the Group of 20 summit final month. U.S. Commerce Consultant Robert Lighthizer and Treasury Secretary Steven Mnuchin will meet with China’s Vice Premier Liu He and his crew in Shanghai, Vivian Salama, Rebecca Ballhaus and Josh Zumbrun report.

Start line: The U.S. needs China to agree to purchase extra American agricultural merchandise, White Home financial adviser Lawrence Kudlow mentioned. China seems prepared to take action as a “good-will gesture.”
The final spherical of face-to-face negotiations between U.S. and Chinese language officers came about in Washington in Could, and resulted in an deadlock. Mr. Trump subsequently raised tariff charges on $200 billion of Chinese language items.

Up

Emeryville, Calif., has America’s highest minimal wage. Proponents say a lift to $16.30 an hour was desperately wanted within the hometown of Pixar Animation Studios, the place the median lease for a one-bedroom condominium is $2,840, the median dwelling worth is greater than $560,000, and a salad prices greater than $15. However native companies are nervous about their monetary viability, Jim Carlton reviews. “There’s a tipping level,” mentioned Erik Hansen, a restaurant proprietor who’s deciding whether or not to lift sandwich costs by as a lot as $1.50 or lay off one among his three workers.

Value of Local weather Change

U.S. manufacturing of corn and soybeans may decline as a lot as 80% over the following 60 years if greenhouse gases are allowed to proceed to extend, a U.S. Division of Agriculture report discovered. Because of this, corn and soybean costs would skyrocket and the price of crop insurance coverage to the federal authorities may rise to $7.6 billion a yr for corn and $three.three billion for soybeans. By comparability, the USDA has spent roughly $300 million on insurance coverage for the 2019 crop yr as of mid-July, Kirk Maltais reviews. Federally backed crop insurance coverage covers as a lot as 85% of a farmer’s acres towards pure disasters or declines in commodity costs.

Breaking Up Is Exhausting to Do

The Justice Division is opening a broad antitrust evaluation into whether or not dominant expertise corporations are unlawfully stifling competitors. The brand new inquiry may ratchet up the already appreciable regulatory pressures on Fb, Google, Amazon.com, Apple and different prime U.S. tech corporations. There isn’t a outlined end-goal but for the Huge Tech evaluation aside from to know whether or not there are antitrust issues that want addressing, however the inquiry may finally result in extra centered investigations of particular firm conduct, Brent Kendall reviews.

German Manufacturing Worst in 7 Years

Germany’s manufacturing sector posted its worst efficiency in seven years. IHS Markit’s buying managers index for manufacturing fell to 43.1 in July from 45 on the finish of June, properly under the 50 stage that separates growth from contraction. The nation’s service sector continued to develop, holding the general economic system afloat for now. “The well being of German manufacturing went from dangerous to worse in July…elevating the chance of the euro space’s largest member state coming into a light technical recession,” mentioned Phil Smith, economist at IHS Markit.

Hi there My Valuable

Gold is hovering close to its highest stage in six years because the prospect of simpler international financial coverage burnishes the attract of proudly owning the steel. Central banks have bought practically 250 tons of gold this yr by means of Could after hoarding over 650 tons throughout 2018 of their largest shopping for spree in a long time, in line with information from the World Gold Council and TD Securities. Central banks “could also be involved over large U.S. finances deficits and imagine the Fed may very well be pretty aggressive in reducing charges,” mentioned Bart Melek, head of commodity technique at TD Securities.

WHAT ELSE WE’RE READING

The previous few years have been a jobs bonanza within the U.Okay. However they have been a pay catastrophe. “A powerful jobs restoration has not resulted in staff vigorously re-climbing the roles ladder. Each their willingness to climb, and the tempo of this climb, has been subdued relative to the power and tightness of the roles market. Publish-crisis danger aversion, and adjustments within the nature of labor, might have elevated insecurities and dimmed staff’ urge for food for a vertiginous profession climb–or certainly any climb. The end result has been subdued charges of pay and, particularly, productiveness progress,” Financial institution of England chief economist Andrew Haldane mentioned in a speech.

Authorities spending is the Trump economic system’s secret sauce. From 2011 by means of 2016, fiscal coverage on the federal, state and native ranges subtracted zero.5 proportion factors from GDP a yr. “Since Trump took workplace, fiscal coverage has against this contributed a median of zero.three proportion factors a yr to GDP progress. That represents a zero.eight proportion level shift. In the meantime, the typical actual GDP progress price has risen from 2.1% a yr throughout these six years to 2.eight% because the starting of 2017, a distinction of zero.7 proportion factors. Coincidence?” Justin Fox writes at Bloomberg Opinion.

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