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The Latest on the Economy
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It Won’t Be a Recession—It Will Just Feel Like One
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The good news is the probability of a recession is down sharply, according to the WSJ’s latest survey of economists. The bad news is that, for a lot of people, it is still going to feel like a recession. Business and academic economists lowered the probability of a recession within the next year, to 39% from 48% in the October survey. Still, economists on average expect the economy to grow just 1% in 2024, about half its normal long-run rate, and job growth to fall below the growth of the labor force, pushing the unemployment rate from 3.7% in December 2023 to 4.3% by the end of this year, Harriet Torry and Anthony DeBarros report.
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Fed Tiptoes Toward Dialing Back Key Channel of Monetary Tightening
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Though the Federal Reserve stopped raising interest rates last summer, it is quietly tightening monetary policy through another channel: shrinking its $7.7 trillion holdings of bonds and other assets by around $80 billion a month. Now that, too, may change. Fed officials are to start deliberations on slowing, though not ending, that so-called quantitative tightening as soon as their policy meeting this month. WSJ's Nick Timiraos looks at how the Fed controls its balance sheet and the big implications for financial markets.
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The M.B.A.s Who Can’t Find Jobs
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Some 2023 M.B.A. graduates are struggling to find work as their job search collides with a slowdown in hiring for well-paid, white-collar positions. An M.B.A. can cost more than $200,000 at a top school but typically pays off as a launchpad for a new, more lucrative career. Many in the spring class of 2023 entered the job market just as three sectors that heavily recruit them—consulting, tech and finance—hit downturns and put the brakes on hiring, Lindsay Ellis reports.
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Medicare Patients on Pricey Drugs Are Saving Big This Year
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For the first time, Medicare Part D plan patients will hit a ceiling on how much they pay out of pocket for most prescriptions. Changes brought about by the 2022 Inflation Reduction Act mean that people on Part D plans now pay no more than roughly $3,300 on drugs annually—a number that could shift a bit based on whether they take brand or generic medications. In 2025, that cap will change again to a flat $2,000, Liz Essley Whyte reports.
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Inside a Plan to Save Homeowners Hundreds of Dollars Closing Their Mortgages
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A government-controlled mortgage giant has a plan that could help more Americans save around $1,000 on closing a mortgage, the latest attempt to chip away at high costs that officials say discourage home buying. Fannie Mae last month said it would expand the types of mortgages it will purchase that rely on a cheaper alternative to title insurance, which is one of the biggest fixed costs tied to closing a mortgage. WSJ's Andrew Ackerman explains the alternative.
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🎧 Will Home Prices Drop in 2024? What Zillow’s Founder Sees Ahead (Listen)
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Europe’s Growth Engine Is Broken
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Germany is stuck in a rut, and there is no quick way out. The European powerhouse’s economy, the largest on the continent and the world’s fourth biggest, shrank last year, extending a six-year slump that is raising fears of deindustrialization and sapping support for governments across the region. The downturn reflects a confluence of headwinds that are upending the country’s export-focused business model, from slower growth in China to higher energy prices and interest rates, mounting tensions around global trade, and a tricky transition to green energy, Tom Fairless writes.
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Global Battery Race Heats Up With Billions for Europe’s Northvolt (Read)
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Boeing’s Pile of Problems Gets Bigger as a Crucial Buyer Hesitates
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Boeing’s long-awaited delivery resumption of its 737 MAX jets to China faces fresh delays after the Alaska Airlines incident. China Southern Airlines, one of several Chinese carriers with undelivered MAX jets, has been readying to receive Boeing’s planes as early as January, people familiar with the matter said. Now the airline is planning to conduct additional safety inspections on those aircraft. Resuming deliveries of the 737 MAX jets is a crucial step for Boeing to bring its business back on course in China, Yoko Kubota and Raffaele Huang report.
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Apple Goes on the Offensive as iPhone Sales Slip in Its Biggest Overseas Market (Read)
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Wednesday: The Commerce Department reports December retail sales figures at 8:30 a.m. ET.
Thursday: The Labor Department reports weekly jobless claims at 8:30 a.m. ET. The Commerce Department releases housing starts data for December at 8:30 a.m.
Friday: The National Association of Realtors reports existing-home sales for December at 10 a.m. ET.
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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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