Economy

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WHY IT’S IMPORTANTU.S. President Joe Biden has championed offshore wind as a key pillar of his climate change agenda. His Interior Department has set a goal of deploying 30 gigawatts of offshore wind capacity by 2030, and 15 GW of floating capacity by 2035.Wind turbines that float on the ocean’s surface are an emerging technology necessary for projects off the coasts of California, Oregon and Maine, where the depth of the water precludes the use of standard, fixed equipment.BY THE NUMBERSThe lease area covers 9,700 acres (3,920 hectares) and is 28 nautical miles (52 kilometers) from shore.The area could accommodate up to 12 floating offshore wind turbines that could generate about 144 megawatts of electricity.WHAT’S NEXT?Construction on the research array is not expected to occur for several years, the Interior Department said.The lease will allow researchers to gather information to inform future commercial floating offshore wind development.Interior’s Bureau of Ocean Energy Management is expected to hold an auction for a commercial offshore wind lease in the Gulf of Maine later this year.KEY QUOTE”Floating wind opens up opportunities to produce renewable energy in deeper water farther offshore,” bureau Director Elizabeth Klein said in a statement. “Signing the Gulf of Maine research lease demonstrates the commitment by both BOEM and the State of Maine to promote a clean energy future for the nation.” More

The New York Fed’s labor market survey showed cracks just as Jerome H. Powell, the Fed chair, prepares for a closely watched Friday speech.Americans are increasingly worried about losing their jobs, a new survey from the Federal Reserve Bank of New York released on Monday showed, a worrying sign at a moment when economists and central bankers are warily monitoring for cracks in the job market.The New York Fed’s July survey of labor market expectations showed that the expected likelihood of becoming unemployed rose to 4.4 percent on average, up from 3.9 percent a year earlier and the highest in data going back to 2014.In fact, the new data showed signs of the labor market cracking across a range of metrics. People reported leaving or losing jobs, marked down their salary expectations and increasingly thought that they would need to work past traditional retirement ages. The share of workers who reported searching for a job in the past four weeks jumped to 28.4 percent — the highest level since the data started — up from 19.4 percent in July 2023.The survey, which quizzes a nationally representative sample of people on their recent economic experience, suggested that meaningful fissures may be forming in the labor market. While it is just one report, it comes at a tense moment, as economists and central bankers watch nervously for signs that the job market is taking a turn for the worse.The unemployment rate has moved up notably over the past year, climbing to 4.3 percent in July. That has put many economy watchers on edge. The jobless rate rarely moves up as sharply as it has recently outside of an economic recession.But the slowdown in the labor market has not been widely backed up by other data. Jobless claims have moved up but remain relatively low. Consumer spending remains robust, with both overall retail sales data and company earnings reports suggesting that shoppers continue to open their wallets.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

This article is an onsite version of our Disrupted Times newsletter. Subscribers can sign up here to get the newsletter delivered three times a week. Explore all of our newsletters hereToday’s top storiesMike Lynch, one of the UK’s best-known tech entrepreneurs, is among those missing after a luxury yacht sank off the coast of Sicily.Democrats are on the defensive after Kamala Harris’s economic plans were criticised for being gimmicky.US secretary of state Antony Blinken termed today’s ceasefire talks in Israel as “maybe the last opportunity” to end the fighting and avoid a regional escalation.For up-to-the-minute news updates, visit our live blogGood evening.Hostilities over shipping waters have led to increased tensions between China and the US and its allies today. This morning, China and the Philippines traded barbs over an incident in the disputed South China Sea, in which both countries accused the other of ramming its ships. The reef belongs to the Philippines’ exclusive economic zone although Beijing claims sovereignty over it. China’s coastguard condemned the Philippine vessel for having “illegally intruded” its waters.Flashpoints over the past year have long threatened the maritime détente between the two countries, including an occasion in June when Beijing’s coastguard used axes to puncture Philippine boats, injuring one sailor.The event was a microcosm of wider global tensions between China, the world’s second-largest economy, and western allies in the region, underlining the delicate balance that countries wedged between the two superpowers have to strike to keep both parties on side. Analysts have suggested that China is responding to concerns about the US’s attempts to suppress its rise.Singapore’s premier, Lawrence Wong, echoed that sentiment. The city state is one of many across the globe caught in the crosshairs of the rivalry. “The mutual suspicion and distrust will continue,” Wong said, adding that it would bring grave consequences for international trade, security and co-operation.The Biden administration is not innocent. The global race for dominance in fields such as AI has soured relations further while increasing curbs on chip exports to China has caused Beijing to respond in turn, leaving the rest of the global economy hanging in the balance.The tensions threaten to erode co-operation in other fields too. Researchers are currently trying to salvage a 45-year old science and technology pact signed by Jimmy Carter and Deng Xiaoping, with its future uncertain.Anxieties abound in Washington over the potential of a Trump victory to add fuel to the fire as the former president has pledged a 60 per cent tariff on Chinese goods. However, the real issue for China will be its inability to rely on exports to manage its deflation-debt doom-loop, Morgan Stanley’s Chetan Ahya argues. Tariffs are just one of a raft of issues blighting its economy. And, he adds: “Investors hoping that volatility eases for the rest of the year may not like what they see on the calendar.”Need to know: UK and Europe economyThe UK’s commercial real estate market has begun to recover faster than the rest of Europe, after a difficult two-year downturn for the sector brought on by high interest rates. Nigel Farage, leader of the UK’s populist Reform party, is the country’s highest earning MP, making £1.2mn a year, according to figures published by the parliamentary authorities.Germany’s finance minister Christian Lindner has come under attack, after it emerged that he wrote to colleagues to veto new military aid for Ukraine. Germany is Ukraine’s largest military donor after the US.Need to know: Global economyInvestors anticipate a “soft landing” for the US economy, but they are growing increasingly concerned that the major central banks are moving too slowly to cut rates, according to a Bank of America survey.In an interview with the FT, Mary Daly, president of the San Francisco Fed, said the central bank needs to take a gradual approach to cutting rates. Investors who cut their equity exposure during the tumult in markets earlier this month sharply increased their positions in the week to last Friday, Deutsche Bank flow data shows.Need to know: businessStart-up failures in the US have risen by 60 per cent over the past year, according to data from Carta, as cash raised during the pandemic-era technology boom dries up.Iron ore prices have hit their lowest level in two years, cumulatively wiping out about $100bn in market capitalisation of the “big four” iron ore miners — BHP, Rio Tinto, Vale and Fortescue.Japan’s 7-Eleven, the world’s biggest store chain, has received a takeover offer from Canadian retailer Alimentation Couche-Tard. The news caused shares in Seven & i Holdings to jump almost 23 per cent today.AMD has agreed to acquire AI infrastructure group ZT Systems in a $4.9bn cash and stock transaction, extending a spate of investments by the chip company as it seeks to challenge market leader Nvidia.Water consumption by dozens of facilities in Virginia’s “data centre alley”, home to the world’s largest concentration of data centres, has jumped by almost two-thirds since 2019, amid warnings from environmental campaigners.The World of WorkWhat’s the most annoying thing about young people at work? That they are often right, the FT’s Pilita Clark argues.The FT’s business book of the year longlist has been released, with various compelling tomes on management styles and organisational structure making the cut.Brian Niccol, the new Starbucks chief executive, has persuaded the coffee chain to set up a “small remote office” for him in Newport Beach, California. Will his style of working set a wider trend?Some good newsParkinson’s disease affects 10mn people worldwide. However, researchers at the University of California, San Francisco have found that a new technology that deploys deep brain implants to continuously adjust electrical stimulus to an individual’s neural activity can provide enhanced therapy. It’s the first clinical trial of its kind.Recommended newslettersWorking it — Discover the big ideas shaping today’s workplaces with a weekly newsletter from work & careers editor Isabel Berwick. Sign up hereOne Must-Read — Remarkable journalism you won’t want to miss. Sign up hereThanks for reading Disrupted Times. If this newsletter has been forwarded to you, please sign up here to receive future issues .And please share your feedback with us at [email protected]. Thank you More

A New York Fed survey released Monday showed that of those who were employed at the time of the last survey in March, 88% still had jobs, the lowest in data going back to 2014.
Those who expected to become unemployed rose to 4.4%, a 0.5 percentage point increase from a year ago and the highest in the survey’s history.

Job seekers attends the JobNewsUSA.com South Florida Job Fair held at the Amerant Bank Arena on June 26, 2024 in Sunrise, Florida. 
Joe Raedle | Getty Images

In another sign of cracks forming in the U.S. labor market, a New York Federal Reserve survey Monday showed a slide in people reporting they are employed, a surge in those looking for work and growing dissatisfaction with pay.
The thrice-yearly measure of labor activity, confidence and satisfaction reflected growing concern in July about job security and an increase in those expecting to work past typical retirement age. Workers are still looking for higher starting salaries but are getting lower offers.

The results come with the unemployment rate ticking higher and Wall Street and Fed policymakers watching the developments closely for clues about where things are headed for the U.S. economy.
Among the findings was that, of those who were employed at the time of the last survey in March, 88% still had jobs, the lowest in data that goes back to 2014. Similarly, those who expected to become unemployed rose to 4.4%, a 0.5 percentage point increase from a year ago and the highest in the survey’s history.
Moreover, the level of those searching for a new job in the previous four weeks popped to 28.4%, up 9 percentage points from a year ago and another historic high going back to March 2014.
On wages, satisfaction with current compensation dropped to 56.7%, down more than 3 percentage points from the same period in 2023. Satisfaction with benefits tumbled to 56.3%, off more than 8 points from a year ago, while satisfaction with opportunities for promotion slid to 44.2%, down from 53.5% last year, and was most pronounced among women, those without a college degree and respondents with household incomes less than $60,000.
The typical wage offering for full-time jobs in the past four months declined slightly to $68,905 while the average “reservation wage,” or the minimum level workers would accept for a new job rose to $81,147, up about $2,500 from a year ago but fractionally below the record high in the last survey.

Finally, the expected likelihood of working past age 62 nudged up to 48.3% of respondents and increased to 34.2% of those saying they expect to work past 67, an increase of more than 2 percentage points.
While the unemployment rate of 4.3% would be considered low by historical standards, it has been on the rise lately and spurring fears of a broader erosion in the economy. July saw a gain of just 114,000 in nonfarm payrolls, so the August report, to be released in early September, will be closely watched.
Following their most recent meeting, Fed officials described job growth as having “moderated.” The central bank is widely expected to reduce its key borrowing rate by a quarter percentage point at its next meeting in September, the first move lower in more than four years.

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BENGALURU (Reuters) – The U.S. Federal Reserve will cut interest rates by 25 basis points at each of the remaining three meetings of 2024, one more reduction than predicted last month, according to a slim majority of economists polled by Reuters who said a recession is unlikely.The change in Fed rate cut calls follows a weaker-than-expected July U.S. jobs report, which encouraged interest rate futures traders to price in as much as 120 basis points of reductions in 2024 earlier this month. That pricing has reduced to roughly 100 now.Investors also said a violent, but brief market sell-off also was a driver of aggressive rate cut calls, related to the unwinding of large leveraged positions as a result of a sudden, sharp rise in the Japanese yen. Although some Fed officials have hinted rate cuts are coming, most economists in the Aug. 14-19 Reuters poll were not expecting a rapid series of rate cuts. Recent data, including last week’s strong retail sales report, suggests the economy is performing relatively well even as inflation recedes. The U.S. central bank will cut the federal funds rate by 25 basis points in September, November and December taking the range to 4.50%-4.75% by end-2024, according to 54% of those polled, 55 of 101.Markets, which were earlier betting on a half-percentage-point cut in September, are currently pricing around 70% probability of a quarter percentage point cut next month.Over a third, 34 of those polled, predicted two rate cuts this year and one respondent forecast only one rate reduction. Eleven economists expected the Fed to cut rates by 100 basis points or more.”The basis for the cuts that we have is mostly because inflation is coming down. It’s not so much that activity is slowing … We see a pretty resilient economy that’s growing near trend and with that, we think inflation only ebbs gradually,” said Jonathan Millar, senior U.S. economist at Barclays.”The labor market is hanging in there just fine. It’s gradually cooling, but we don’t expect it to have really material weakening. The unemployment rate is maybe going to add another 10th or so from where it is. There’s not really any reason for them (the Fed) to panic.”The unemployment rate is forecast at around the current 4.3% through 2026. Inflation is forecast to ease only slightly over the coming two years, according to median forecasts in the poll. All measures of inflation polled – the Consumer Price Index, core CPI, personal consumption expenditures price index and core PCE – are expected to stay above 2% until at least 2026.Despite recent easing, wage growth has remained above the 3.0%-3.5% range seen as consistent with the Fed’s 2% inflation target.The Fed was expected to deliver a 25 basis point cut each in the four quarters of 2025. Markets are currently pricing around 200 basis points of reductions by end-Q3 2025.RECESSION UNLIKELYThe U.S. economy grew 2.8% annualized in the second quarter, much faster than the 2.0% expected by economists. Growth is seen in the poll as averaging 2.5% this year, faster than what Fed officials currently see as the non-inflationary growth rate of 1.8%.Two thirds of common contributors upgraded their 2024 growth outlook from last month. The economy was predicted to grow 1.8% next year.Economists in the poll broadly expect the economy to expand at around its trend growth rate at least until 2027. The median forecast from a smaller sample who provided a view showed the probability of a recession at just 30% – an outlook which has not changed much since the start of this year.”We’re not convinced there’s a downdraft in activity around the corner that’s going to prompt large rate cuts from the Fed,” said Michael Gapen, chief U.S. economist at Bank of America.”There’s reason to believe the July employment report was adversely affected by weather and therefore was a false signal about the health of labor markets and the economy. We’re counting on subsequent data validating that story.”Markets and economists will keep a close eye on Fed Chair Jerome Powell’s remarks on the economic outlook on Friday, the first full day of the Kansas City Fed’s annual economic symposium in Jackson Hole, Wyoming.(Other stories from the Reuters global economic poll) More

In a note to clients on Friday, analysts at Goldman Sachs provided a detailed roadmap for navigating the conference, highlighting key aspects to watch.The symposium, set against a backdrop of global economic uncertainty, will feature prominent central bankers, including Fed Chair Jerome Powell, Bank of England Governor Andrew Bailey, and European Central Bank Board Member Philip Lane. Powell is scheduled to deliver the keynote address on Friday, August 23, at 10:00 a.m. EDT, with Bailey giving the luncheon address later that day at 3:00 p.m. EDT.Lane will participate in the conference’s closing overview panel on Saturday.Goldman Sachs notes that while the official schedule will be released on August 22, the most immediate policy insights are likely to come from the sideline interviews.These interviews, which often involve Federal Reserve officials and other international central bankers, typically start on Thursday and continue throughout the conference.Goldman Sachs says the theme of this year’s symposium, “Reassessing the Effectiveness and Transmission of Monetary Policy,” will guide the academic discussions.However, the investment bank expects Powell’s speech and subsequent interviews to emphasize data dependency and a cautious approach to rate cuts.The firm anticipates that Powell will reiterate the Fed’s readiness to act swiftly if economic conditions worsen but will avoid committing to aggressive easing without further data.Overall, Goldman Sachs views the symposium as a pivotal event for gauging the Fed’s near-term policy direction, with implications for market sentiment and global economic outlooks.However, they explain: “While the academic part of the symposium has the potential to impact the long-run direction of policy, the side interviews should shed more light on immediate policy questions. And we should note that this particular conference is one of many such events held throughout the year, with no particular extra relevance in this regard.” More

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