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Jan 9, 2019

Real Time Economics: How Many Illegal Immigrants Are In the U.S. and Where Do They Work?

The Wall Street Journal.
Percentage logo.
Real Time Economics
Good morning. Jeff Sparshott here to take you through key economic developments as the partial government shutdown enters its 19th day, the U.S. and China make headway in trade talks, businesses hang fewer help-wanted signs, and the World Bank's outlook for global growth deteriorates. Let us know what you think by replying to this email.
 

Carry On

The U.S. and China narrowed their differences on purchases of U.S. goods and services, and improving access to China’s markets, though the two sides are far from striking a deal. Talks among midlevel negotiators will continue into Wednesday. Both sides believe they’re making enough progress for a next round of talks among cabinet-level officials, probably later this month in Washington, Lingling Wei reports.
Key issues: The U.S. wants to ensure Beijing keeps its promises on protecting intellectual property and stopping forced technology transfer.
 

What to Watch Today

The Atlanta Fed's Raphael Bostic speaks on the economic outlook at 8:20 a.m. ET, the Chicago Fed's Charles Evans speaks on monetary policy and the economy at 9 a.m. ET, and the Boston Fed's Eric Rosengren speaks on the economic outlook at 11:30 a.m. ET.
The Bank of Canada releases a policy statement at 10 a.m. ET.
Bank of England Governor Mark Carney participates on an online Q&A at 10:30 a.m. ET.
Federal Reserve minutes from the Dec. 18-19 meeting are out at 2 p.m. ET. The WSJ's Nick Timiraos says they'll show how central bank officials view risks to economic growth
President Trump attends the Senate Republican policy lunch at 1 p.m. ET and meets with Congressional leadership at 3 p.m. ET as the White House and lawmakers seek to end the shutdown.
China's consumer-price index for December is out at 8:30 p.m. ET.

Top Stories

Immigration By the Numbers

President Trump wants a wall along the southern border to stop illegal immigrants. The WSJ's Soo Oh, Paul Overberg and Alicia A. Caldwell dig into some of the numbers.
How many? The Department of Homeland Security estimated there were about 12 million immigrants in the U.S. illegally in 2015. The Pew Research Center puts the figure at 10.7 million in 2016.  

From where? The number of Mexicans living in the U.S. has been declining for several years, while those from Asia are rising. 

Education level? The share of the foreign-born population in the U.S. with a college degree has been rising. 

Where do they work? Immigrants are heavily represented in manufacturing, hospitality, construction and personal-care industries. 

Startup Shutdown

The government shutdown is threatening to spoil what was poised to be a banner year for IPOs. The partial closure of the Securities and Exchange Commission is forcing companies that were seeking to list shares in January to push back their plans, Corrie Driebusch, Maureen Farrell and Dave Michaels report. It now looks likely that no major company will tap the U.S. IPO market this month.

Fewer U.S. Job Openings

The number of unfilled jobs in the U.S. fell in November to the lowest level since June. Openings have edged lower since touching a record high of 7.29 million in August. Still, openings exceeded the number of unemployed by 870,000, Eric Morath reports. Takeaway: The labor market remains strong. 

Bullard: No Need To Raise Rates

St. Louis Fed President James Bullard remains upbeat about the U.S. economy, but said he fears it could be pushed into a recession if the central bank presses forward with more rate increases. “We’ve got a good level of the policy rate today” and there isn’t any pressing need to go higher.

World Bank Trims Forecast

The World Bank cut its forecasts for global growth in 2019 and 2020, citing factors from trade tensions to financial-market instability to currency challenges in a number of emerging markets. The bank now sees global growth of 2.9% in 2019, instead of 3%, Josh Zumbrun reports.
"When you think about the engines of the global economy, they’re all going to lose momentum," World Bank economist Ayhan Kose said.

Keep Calm

The Chinese yuan has been surprisingly stable amid broader market volatility. It is now close to its strongest in 3½ months, at 6.84 per dollar. Chinese bond yields, fresh trade talks between Beijing and Washington, and investor expectations that Beijing won't let the yuan weaken beyond 7 per dollar have all bolstered the currency, Mike Bird reports.  
Despite the calm, there are signs China policy makers are increasingly worried about slowing growth—look for more fiscal and monetary easing.

U.S. Carbon Emissions Jump

U.S. carbon emissions rose 3.4% in 2018, after three years of declines, as the effects of a strong economy outstripped a sharp decline in the number of power plants burning coal to generate electricity. The increase in carbon emissions was the biggest jump since 2010, Kris Maher reports.

Alpine Downhill

What a difference a year makes. One year after posting a record 54 billion franc ($55 billion) profit, the Swiss National Bank swung to a 15 billion franc loss in 2018 as a double whammy of weaker global equity markets and a stronger Swiss franc eroded the value of its massive holdings of foreign stocks and bonds, Brian Blackstone reports.

It's Easier To Be In Opposition

Italy’s populist government has offered to shore up an ailing bank with public funds, in a sharp U-turn after attacking mainstream politicians for years for bailing out banks with taxpayers’ money.
 

Quote of the Day

The shutdown is harming the American people, the business community, and the economy.
Neil Bradley, executive vice president and chief policy office for the U.S. Chamber of Commerce

What Else We're Reading

Working with friends doesn't always have benefits. "First, worker productivity declines when a friend is close enough to socialize with. ... Estimates suggest that a median worker is willing to pay 4.5 percent of her wage to work next to friends," University of Hong Kong's Sangyoon Park writes in the American Economic Journal: Applied Economics.
Single men, single women and married women all earn about the same. Married men earn a lot more. “It might be that men with higher wages are more likely to marry; therefore, the average married man earns a higher wage than the average single man,” St. Louis Fed economist Guillaume Vandenbroucke says in an article based on his research. 
 

Up Next: Thursday

The European Central Bank releases minutes from its Dec. 12-13 meeting at 7:30 a.m. ET.
U.S. jobless claims are out at 8:30 a.m. ET.
Fed Chairman Jerome Powell headlines a full roster of central bank remarks. Richmond's Tom Barkin speaks on long-term economic growth at 8:35 a.m. ET, Minneapolis's Neel Kashkari speaks on immigration and economic growth at 12:20 p.m. ET, St. Louis's James Bullard speaks on the economy and monetary policy at 12:30 p.m. ET, Mr. Powell speaks at the Economic Club of Washington at 12:45 p.m. ET, Chicago's Charles Evans speaks on monetary policy and the economy at 1 p.m. ET, and Vice Chairman Richard Clarida speaks on the economic outlook at monetary policy at 7 p.m. ET.