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The World
Global inflation pressures could become harder to manage in coming years, research suggests. Rising trade barriers. Aging populations. A broad transition from carbon-spewing fossil fuels to renewable energy. The prevalence of such trends across the world could intensify global inflation pressures in the coming years and make it harder for the Federal Reserve and other central banks to meet their inflation targets. That concern was a theme sounded in several high-profile speeches and economic studies presented Friday and Saturday at the Fed’s annual conference of central bankers in Jackson Hole, Wyoming. For decades, the global economy had been moving toward greater integration, with goods flowing more freely between the United States and its trading partners. Lower-wage production overseas allowed Americans to enjoy inexpensive goods and kept inflation low, though at the expense of many U.S. manufacturing jobs. Since the pandemic, though, that trend has shown signs of reversing. Multinational corporations have been shifting their supply chains away from China. They are seeking instead to produce more items — particularly semiconductors, crucial for the production of autos and electronic goods — in the United States, with the encouragement of massive subsidies by the Biden administration. (Associated Press)
European Commission experts will visit Romania to advise on how to boost the flow of Ukrainian grain exports along the river Danube after a series of Russian attacks on storage facilities and ports. The group will visit on September 1 as part of attempts to convince Romania, Poland and three other EU members to drop a ban on imports of grain as agreed on September 15. The five states are pressing for an extension of measures allowing them to block shipments except those in transit to other countries because of a glut of supplies. (Financial Times)
China's 'aggressive behavior' in South China Sea must be challenged, US Navy official says. China's "aggressive behavior" in the South China Sea, including the use of water canon by its coast guard against a Philippine vessel, must be challenged and checked, the commander of the U.S. Navy's Seventh Fleet said on Sunday. Vice Admiral Karl Thomas assured the Philippines of U.S. backing in the face of "shared challenges" in the region, saying: "My forces are out here for a reason." The largest of the U.S. Navy's forward-deployed fleets, the Seventh Fleet, headquartered in Japan, operates as many as 70 ships, has around 150 aircraft and more than 27,000 sailors. It operates over an area of 124 million square km (48 million square miles) from bases in Japan, South Korea and Singapore. "You have to challenge people I would say operating in a grey zone. When they're taking a little bit more and more and pushing you, you've got to push back, you have to sail and operate," Thomas told Reuters. "There's really no better example of aggressive behavior than the activity on 5 August on the shoal," he added. On Aug. 5, a Chinese coast guard ship used water cannon against a Philippine boat carrying supplies to troops aboard a warship Manila intentionally grounded on a shoal in the South China sea, a fault line in the rivalry between the U.S. and Beijing in the region. (Reuters)
China has launched bigger, faster version of 054A guided missile frigate, online photos suggest. Photos suggest the ship features the 054A’s phased radar and a stealth mast also used on the country’s most advanced destroyers. New frigate likely to be powered by integrated electric propulsion system developed under top PLA naval engineer, observer in Taiwan says. (South China Morning Post)
Biden to visit Vietnam after G20 in India for meeting with Nguyen Phu Trong. (South China Morning Post)
Libyan Foreign Minister Najla Mangoush was dismissed Monday over a meeting she held last week with her Israeli counterpart Eli Cohen, amid ballooning political fallout in both Jerusalem and Tripoli over the decision by Israel’s top diplomat to reveal that the two ministers held a “historic” sit-down last week in Rome. Following Cohen’s announcement of the meeting on Sunday, which was met with outrage in Libya, Prime Minister Abdul Hamid al-Dbeibeh suspended Mangoush from her role and said an investigation panel would be formed to look into the meeting. Libya’s foreign ministry denied any formal talks were held with Cohen as scattered protests broke out in Tripoli and other western Libyan towns. (Times of Israel)
New York business leaders urge Washington to assist with migrant influx: Dozens of New York’s top business leaders have urged Washington to do more to tackle the pressures caused by the arrival of tens of thousands of asylum seekers in US cities. In an open letter to Joe Biden and Congressional leaders of both parties, executives including Jamie Dimon of JPMorgan Chase and Jane Fraser of Citigroup called for federal funding to address migrants’ educational, housing and healthcare needs. They also urged Washington to move faster on processing asylum applications and work permits, noting the labour shortages in many US industries. The letter, which was also signed by the leaders of BlackRock, Blackstone, EY and Goldman Sachs, follows requests by New York governor Kathy Hochul for federal aid to offset the costs of handling the influx. (Financial Times)
Tropical Storm Idalia lashed western Cuba and was expected to strengthen into a major hurricane as it crawled toward Florida's Gulf Coast, where officials ordered evacuations and urged residents to prepare for an expected Wednesday landfall. Idalia was churning about 80 miles (130 km) off the western tip of Cuba as it barreled north, packing maximum sustained winds of 70 mph (112 kph), the Miami-based National Hurricane Center said in its latest advisory. (Reuters)
Greece battles Europe's deadliest fire of the summer for 10th day. (Reuters)
Economy
Labor shortages plague high-stakes industries. Labor shortages are plaguing high-stakes sectors like law enforcement, health care and aviation. Understaffing in some industries can have dire consequences for public health and safety — for example, a shortage of air traffic controllers has led to increase in near-miss airplane collisions, the New York Times recently reported. At the same time, a lack of available workers in AI and manufacturing threatens to slow productivity and growth in areas where the U.S. is otherwise poised for huge leaps forward. That's a problem not just for companies in those sectors, but for the broader economy. Parents are feeling the labor squeeze from multiple fronts as they try to take care of their kids. Schools across the country are understaffed, without enough teachers, bus drivers, or social workers. The child care industry is also dealing with a shortage of available workers. Parents often either can't find care or can't afford it, which can cause them to stay on the sidelines of the labor force — making the worker shortage that much worse. Police departments are also struggling to hire. So are prisons — 21% of correctional officer positions were unstaffed in federal prisons, according to a March report. A staffing shortage throughout the Bureau of Prisons is increasing incidents of violence and leading to more health issues for prisoners. (Axios)
Homeowners are increasingly forgoing home insurance, gambling that the likelihood of a disaster isn’t high enough to justify the cost of a policy. Some skipping insurance say they are doing so because they can no longer afford the rising premiums. The national average for home insurance based on $250,000 in dwelling coverage increased this year to $1,428 annually, up 20% from 2022. Others, particularly among the wealthy, say they have enough money saved to rebuild or move elsewhere should their home be destroyed. (Wall Street Journal)
You’ve Heard of Quiet Quitting. Now Companies Are Quiet Cutting: Workers are waking up to emails and team-meeting requests with a jarring message: They aren’t fired, but their jobs are gone. People on the receiving end of these memos describe running through a range of emotions, from relief that they’re still employed to a sense of dread that their bosses secretly want them to leave. They are also facing a labor market that isn’t as robust as a year ago, leaving many to believe that the best option is to stay put and hunt internally for a better fit. Adidas, Adobe, IBM and Salesforce, among others, have reassigned employees as part of corporate restructurings. Mentions of reassignment, or similar terms, during company earnings calls more than tripled between last August and this month, according to data from AlphaSense, a financial-research platform. “Reassigning is definitely a huge part of the dynamic right now,” said Andy Challenger, senior vice president at Challenger, Gray & Christmas, an outplacement firm. (Wall Street Journal)
American mothers re-enter the workforce at high rates: Pandemic labour shortage pushed employers to embrace policies that have drawn women back. Some 75 per cent of mothers participated in the labour force in July, the last month for which data is available, representing a rough return to pre-pandemic times. At the start of 2020, the labour force participation rate for mothers stood at about 74 per cent, before dropping to 70.5 per cent in April. Mothers’ return to the workforce was faster than that of women without children. (Financial Times)
Bitcoin trading volume is at its lowest in more than four years: An analysis of CryptoQuant data from both spot and derivatives exchanges shows the total volume of bitcoin held on all exchanges is 2019 lows. As of Aug. 26, bitcoin trading volume on all exchanges sat at 129,307 BTC, according to CryptoQuant. It’s now off the March high of 3.5 million BTC by about 94%, according to the data provider. (CNBC)
Technology
Elon Musk, Mark Zuckerberg, Sundar Pichai, Sam Altman, Jensen Huang, and others are expected to attend Sen. Schumer's closed-door AI forum on September 13. (The Hill)
OpenAI launches GPT-4-powered ChatGPT Enterprise, with improved privacy, performance, and data analysis features; pricing is “dependent on each company's usage”. (TechCrunch)
Google to begin selling maps data to companies building solar products, hopes to generate $100 million in first year. Google is planning to sell new mapping APIs that would allow companies to build products that use energy and environmental data. The company has data on over 350 million buildings, according to documents viewed by CNBC. The company sees a range of potential customers including Zillow, Marriot and Tesla and PG&E. (CNBC)
DoorDash launches AI-powered voice ordering tech, giving restaurants a multi-language personalized voice ordering system without missed calls or long wait times. (TechCrunch)
Large US tech companies face new EU rules. The world’s largest tech companies must comply with a sweeping new European law starting Friday that affects everything from social media moderation to targeted advertising and counterfeit goods in e-commerce — with possible ripple effects for the rest of the world. The unprecedented EU measures for online platforms will apply to companies including Amazon, Apple, Google, Meta, Microsoft, Snapchat and TikTok, among many others, reflecting one of the most comprehensive and ambitious efforts by policymakers anywhere to regulate tech giants through legislation. It could lead to fines for some companies and to changes in software affecting consumers. (CNN)
Smart Links
Goldman Sachs sells financial planning unit as part of consumer retreat. (Financial Times)
How Did Things Go So Wrong at This Arizona Park Built With Muni Bonds? (Wall Street Journal)
Amazon raises free shipping minimum to $35 for some customers who don’t have Prime. (CNBC)
3M Nears Roughly $5.5 Billion Earplugs Settlement: Litigation over hearing-loss complaints ranks as the largest mass tort in U.S. history. (Wall Street Journal)
American Airlines Hit With Largest-Ever Tarmac Delay Fine. (Bloomberg)
Remote workers' connection to companies' missions hits record low. (Axios)
How robotaxis are dividing San Francisco. (BBC)