U.S. Employers Give Gift to Fed: Easing Demand for Workers By James Christie

Good day. Demand for workers in the U.S. slipped slightly in June to the lowest level in more than two years, providing additional welcome data for Federal Reserve officials eager to see the economy, and inflation, cool. The decline reflects a labor market that is gradually cooling, though it remains solid more than a year after the Fed began lifting interest rates to slow the economy and combat high inflation. Recent private-sector numbers from Indeed also show labor demand is easing steadily. Total postings on the job site for mid-July were down 16% from a year earlier, though those openings remain above prepandemic levels.

Now on to today's news and analysis.

Top News Jobs Market Shows Signs of the Gradual Cooling the Fed Wants

The U.S. labor market is showing fresh signs of easing, with slowly falling job openings adding to figures that show the Federal Reserve is making progress in cooling the economy and lowering inflation .

Job openings declined by 34,000 to a seasonally adjusted 9.6 million in June from the prior month, the Labor Department said Tuesday, the lowest level since April 2021. Layoffs held nearly steady at 1.5 million in June.

Pro Take: U.S. Diners to Fork Over Almost $1 Trillion at Restaurants This Year (Tips Excluded) By Bob Fernandez

American consumers' tab for eating and ordering out is expected to reach $1 trillion this year, fattened by inflation and a postpandemic appetite for everything from chicken tenders to skirt steaks.

The National Restaurant Association estimates that consumers will spend a record $997 billion in restaurants, bars and eateries in the U.S. in 2023 before tips. That would mark an increase of 6.4% from 2022. Read more .

U.S. Economy Foreign Purchases of U.S. Homes Slump to All-Time Low

International buyers purchased 84,600 U.S. homes in the year ended in March, down 14% from the prior year , and the dollar volume of residential real estate purchased by these buyers fell 9.6% to $53.3 billion.

Miami Sees Its First Population Drop in Decades Why Trucking Giant Yellow's Shutdown Could Cost Taxpayers Money

The collapse of trucking giant Yellow, which received a $700 million government loan during the height of the Covid-19 pandemic, risks saddling American taxpayers with financial losses.

Key Developments Around the World Ukraine Intensifies Drone Attacks on Russia, Moscow Says

Ukrainian drones struck Moscow for a second time this week and forced the closure of a key airport , while unmanned boats attacked Russian merchant ships as well as naval vessels in the Black Sea, Russian authorities said Tuesday.

Tensions Between Russian, Western Allies Grow Over Niger Coup

European governments began evacuating their citizens from Niger after a coup in the West African country triggered a tense standoff between Moscow's regional allies and states that have worked more closely with Western powers.

Chinese Investors Warm to Sweetened U.S. Cash-for-Visa Program

A popular U.S. program that offers permanent American residency to foreigners who invest in qualified job-creating projects has sweetened the offer-and attracted fresh interest from wealthy Chinese seeking a way out of their country.

Hong Kong's Property Market Is a Mess-the Fed is Partly to Blame

Hong Kong's notoriously expensive property market is in a slump. A key reason is high interest rates . The Hong Kong dollar's peg to the U.S. dollar forces monetary authorities in the city to track U.S. interest-rate decisions.

Financial Regulation Roundup Crypto Is Illegal in China. Binance Does $90 Billion of Business There.

Binance was supposed to leave China behind when the country made cryptocurrency trading illegal in 2021. Almost two years later, users traded $90 billion of cryptocurrency-related assets in China in a single month.

Carbon Offset Market Opens to Small Southern Timberland Owners

One of the country's largest forest-carbon firms is launching a platform to enable Southern timberland owners to sell carbon offsets on properties as small as 40 acres , expanding a market mostly limited to owners of vast tracts.

Forward Guidance Wednesday (all times ET)

8:15 a.m.: ADP National Employment Report

Thursday

4 a.m.: Eurozone Services PMI for July

4:30 a.m.: S&P Global / CIPS Services PMI for July

5 a.m.: EU producer price index for June; ECB's Panetta participates in webinar on 'Getting disinflation right' organized by Bocconi University, Milan

7 a.m.: Bank of England interest rate decision

8:30 a.m.: U.S. weekly jobless claims; U.S. productivity and costs, preliminary for second quarter; Richmond Fed's Barkin speaks to Montgomery County Chamber of Commerce in Blacksburg, Va.

10 a.m.: ISM Report on Business Services PMI

Research ECB May Lean to September Rate Increase

Eurozone labor-market data released Tuesday boosts the arsenal of hawks at the European Central Bank, economist Melanie Debono at Pantheon Macroeconomics writes in a note. Eurozone joblessness stood at a record low in June at 6.4%, in line with revised figures for the previous month and below forecasts. Barring revisions, the data point toward an interest rate increase by the ECB next month, Debono writes, as the central bank struggles to bring down core inflation amid persistently high wage growth.

-Joshua Kirby

Commentary It Might Not Be Quitting Time Yet for the Fed's Rate Hawks

The realignment of the labor market that the pandemic kicked off, with lower- and middle-income workers in particular searching for, and finding, better opportunities, looks as if it hasn't played out, Justin Lahart writes.

Is a Stronger Yen Lurking Around the Corner?

More flexible monetary policy in Tokyo translates into substantial uncertainty for global markets, as the yen has been a popular funding currency for so-called carry trades due to its low interest rates, Jacky Wong writes.

Basis Points Oil prices have surged to the highest levels in three months , as the economic outlook improves and supply cuts from some of the world's biggest producers start to bite. The U.S.'s long-term foreign-currency issuer default rating was downgraded by Fitch Ratings from "AAA" to "AA+" to reflect expected financial deterioration in the coming years and the government's growing debt burden. (Dow Jones Newswires) Spending on construction projects in the U.S. rose 0.5% in June to $1.94 trillion, the Commerce Department reported Tuesday. Economists expected a 0.9% increase. The government revised spending on construction in May to 1.1% from an initial read of a 0.9% increase. Over the past year, construction spending is up 3.5%. (MarketWatch) Activity among U.S. goods producers contracted for the ninth consecutive month in July. The Institute for Supply Management said its index of manufacturing activity rose from 46.0 in June to 46.4 last month, suggesting output is more in line with weaker demand as the outlook for the second half of the year deteriorates. Economists polled by The Wall Street Journal expected a 46.8 level. (DJN) Canadian manufacturing activity picked up in July with a rise in output, as the S&P Global Canada manufacturing Purchasing Managers Index edged up to 49.6 from 48.8 in June, a third straight month below the 50 threshold separating expansion from contraction. (DJN) Thailand's central bank raised its policy rate as it continued its efforts to tame inflation. The Bank of Thailand said Wednesday that its policy committee voted unanimously to increase its one-day repurchase rate by 25 basis points to 2.25%, effective immediately. Feedback Loop

This newsletter is compiled by James Christie in San Francisco.

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This article is a text version of a Wall Street Journal newsletter published earlier today.


(END) Dow Jones Newswires

08-02-23 0715ET