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Good morning. This is Jeff Sparshott with the latest on the economy. You can send questions, comments and suggestions by replying to this email.
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Signs of a Weakening Job Market
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The hot labor market that underpinned a surprisingly strong economy this year is showing signs of cooling. The number of available jobs at the end of October was the lowest since March 2021, the Labor Department said Tuesday. Fewer openings come as the unemployment rate has edged higher this year and Americans are taking longer to find new jobs, Austen Hufford writes.
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Job openings fell in October to 8.7 million. That is well down from a record high of 12 million in March 2022, though higher than before the pandemic began. There are still plenty of jobs available—more than the 6.5 million unemployed Americans seeking work—but that gap has narrowed.
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The jump in resignations earlier in the pandemic recovery has dissipated. Workers might have good reason not to leave their jobs without another lined up. The rate of hiring ticked lower in October from the prior month, extending a slow decline this year, suggesting employers are less desperate to fill roles. At the same time, layoffs remain historically low.
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The job openings rate has trended down this year while the unemployment rate moved up. The relationship between the two readings—an economics concept known as the Beveridge curve—has moved close to prepandemic readings after trending well higher for the past two and half years. That adds to signs the labor market is normalizing.
The November jobs report, out Friday, will offer additional clues on the state of the labor market.
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ADP's employment report is expected to show that the private sector added 128,000 jobs in November, up from 113,000 one month earlier. (8:15 a.m. ET)
U.S. nonfarm labor productivity for the third quarter is expected to rise at an annual pace of 4.9% from the prior quarter, a slight upward revision from the previously reported 4.7% gain. (8:30 a.m. ET)
The U.S. trade deficit is expected to widen to $64.1 billion in October from $61.54 one month earlier. (8:30 a.m. ET)
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The Latest on the Economy
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Why Gold Prices Are Hitting Records
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The prospect that interest rates might have peaked is powering gold prices to record highs. Futures for delivery of gold in December settled at $2,071 a troy ounce Friday, topping their previous high of $2,051.50 an ounce hit in August 2020. Gold has advanced for seven of the past eight weeks, bringing its gain this year to 11%. That puts futures on track for their best annual performance since 2020, when Covid-19 crashed the economy and lifted the precious metal 24%. WSJ's Bob Henderson and Yusuf Khan follow the money as falling inflation, economic forecasts, interest-rate expectations and investor nerves all buffet gold prices.
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Treasury Yields Fall to Lowest Levels Since Summer (Read)
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Supreme Court Wary of Remaking Income Tax
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The Supreme Court looked unlikely to impose strict new limits on Congress’s power to tax income, with some conservative and liberal justices alike signaling wariness about upending long-settled principles of the federal tax code. WSJ's Jess Bravin and Richard Rubin report on Tuesday’s arguments over whether "unrealized" income could be taxed—and some justices' apparent concern over a broad ruling that could affect statutes long familiar to investors, tax advisers and businesses.
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The U.S. Can Afford a Bigger Military. We Just Can’t Build It.
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Intensifying security challenges from the western Pacific to Ukraine to the Middle East have fueled debate over whether the U.S. can afford a bigger military. In fact, the more pressing question is whether it can build one. Even when money’s available, America’s industrial base struggles to ramp up defense production. China, meanwhile, controls entire industrial supply chains and is able to churn out ever more weapons. WSJ's Greg Ip explores the vast gulf in industrial capacity between the two nations and what it means for national security.
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The NCAA’s Radical Proposal to Pay Division I Athletes
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National Collegiate Athletic Association President Charlie Baker on Tuesday unveiled a proposal that would allow Division I schools to pay their athletes for the first time. WSJ's Laine Higgins looks at a groundbreaking move that would transform how college athletics has operated for more than a century.
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“Colleges and universities need to be more flexible, and the NCAA needs to be more flexible, too.”
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—NCAA President Charlie Baker
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Climate Change Made Their Homes Unsafe. Who Pays for Their Move?
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The fertile highlands of Mount Elgon, an extinct volcano straddling Uganda’s border with Kenya, have become too dangerous for people to live and farm on, the Ugandan government says. The mountain has long produced some of the world’s finest Arabica beans for U.S. brands like Starbucks and Blue Bottle Coffee. But a series of deadly landslides that climate scientists say were caused by extreme changes in local rainfall patterns have thrust this mountain—and the people who live here—to the center of one of the most divisive battles in international climate negotiations. WSJ's Nicholas Bariyo visits the region, where the government started relocating about 100,000 residents. How to pay for climate damage is one of the central points of discussion
at the COP28 climate conference in Dubai.
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Inflation has come down sharply to 3.2% in October from an eye-watering 9.1% just 16 months earlier. Americans are still unhappy, with the University of Michigan's consumer sentiment index stuck in recession-era readings around the low 60s. What gives? Consumers are still digesting the impact of prior years’ price increases. Stanford University's Ryan Cummings and Neale Mahoney devised a formula showing that the impact of inflation on consumer sentiment decays at a rate of about 50% per year. “The estimates imply that current sentiment is being dragged down by 16 index points by the inflation we have experienced over the last 3 years, down 40% from the peak negative impact of 27 index points in June 2022. If inflation next year slows to 2.5%,
the negative impact on consumer sentiment from inflation would decline by another 50% relative to the current value."
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Real Time Economics comes to you from WSJ reporters and editors around the world. Today's issue was curated and edited by Jeff Sparshott (@jeffsparshott) and Greg Ip (@greg_ip) in Washington, D.C., and editors in London.
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