Your Friday Briefing: The U.S. Economy Grew, Slowly
U.S. economy grows, but slowly
The U.S. economy grew slowly over the summer, adding to fears of a looming recession while simultaneously keeping alive the hope that one might be avoided.
Gross domestic product, adjusted for inflation, increased by 0.6 percent after six months of decline, slightly exceeding forecasters’ expectations. That suggests that a path to “soft landing,” in which policymakers cool off red-hot demand without snuffing out the recovery entirely, remains open, but narrow.
There are still plenty of economic headwinds. Consumer spending slowed as inflation cut into households’ buying power, and mortgage rates rose to the highest level since 2002, leading to a steep contraction in the housing sector. Big tech companies like Meta and Microsoft, which are usually two drivers of U.S. growth, are also signaling that tough times might be ahead amid inflation.
In Europe: The European Central Bank raised interest rates again. In just three months, the bank has raised rates at the fastest pace in its history.
Ripple effects: Interest rate increases by the U.S. Federal Reserve have hurt other currencies — including those of Japan, China and India — by making it harder for foreign borrowers with debt in U.S. dollars to repay their loans.
Quotable: “Ignore the headline number — growth rates are slowing,” Michael Gapen, chief U.S. economist for Bank of America, said. “It wouldn’t take much further slowing from here to tip the economy into a recession.”
The war in Ukraine may boost clean energy
In response to natural gas shortages caused by the war in Ukraine, some countries are burning more coal. In the short term, European leaders looking for alternatives to Russian gas are turning to Africa to drill for more fossil fuels.
But the International Energy Agency said yesterday that the war could speed up the shift to clean energy rather than slowing it down. One major reason is that soaring fossil fuel prices have led to a wider embrace of wind turbines, solar panels, nuclear power plants, hydrogen fuels, electric vehicles and electric heat pumps.
The State of the War
The I.E.A. said global investment in clean energy is now expected to rise to more than $2 trillion annually by 2030 from $1.3 trillion in 2022.
Still, the shift is not happening fast enough to avoid dangerous levels of global warming. The agency said that for things to change, governments would have to take much stronger action to reduce their emissions over the next few years.
Notable: A climate protester glued his head to “Girl With a Pearl Earring,” a painting by Johannes Vermeer, at a museum in The Hague.
Beyond catastrophe: In The Times Magazine, David Wallace-Wells argues that while there’s plenty of bad climate news, thanks to real progress, the world is headed toward a less apocalyptic future.
From Opinion: The runoff election in Brazil on Sunday will determine the fate of the Amazon rainforest and Earth’s future.
China’s offshore police stations
The Dutch government is investigating reports that Chinese law enforcement agencies are illegally operating offices in the Netherlands to police Chinese citizens overseas.
The recent reports, which come from the news media and a human rights group, add to a growing body of evidence that suggests that Beijing surveils Chinese nationals from overseas outposts. The authorities in Canada are investigating similar operations there, and a rights group said that there are dozens of surveillance outfits around the world — including in New York, Paris, London, Madrid and Toronto.
China said that the operations, which it described as “service stations” meant to help Chinese citizens with administrative tasks like passport renewals, also have the aim of “resolutely cracking down on all kinds of illegal and criminal activities related to overseas Chinese people.”
Reaction: China’s Embassy in the Netherlands said it was “not aware” of and “not involved” with the offices. According to the Vienna Convention, an international pact that both China and the Netherlands signed, administrative matters are to be handled by consulates.
THE LATEST NEWS
Wang Xiaodong was once called the standard-bearer of Chinese nationalism.
Now, he warns that the movement he helped to ignite nearly 35 years ago has gone too far. “I’ve been called nationalism’s godfather,” he told my colleague Vivian Wang. “I created them. But I never told them to be this crazy.”
High-stakes talks on Ethiopia
After nearly two years of civil war, representatives from the Ethiopian government and rebel forces in the country’s Tigray region began holding formal peace talks this week.
The failure of the talks could exacerbate a conflict that began when fighting broke out after a contested election, and in which thousands have been killed and millions have been displaced.
Little has emerged so far from the negotiations, which are being held in South Africa and mediated by former African leaders on behalf of the African Union. Tigrayans in exile have said they have little hope that the talks will end the fighting.
“Ethiopia faces multiple challenges including major climatic stresses, an economy in deep distress, partly due to the war, and a number of other rebellions,” Murithi Mutiga, the Africa program director at the International Crisis Group, said.
“It can’t afford a years’ long war on its borders,” he added. “A collapse in the talks will mean even more carnage in a war that’s already one of the world’s deadliest.”
— Lynsey Chutel, reporter based in Johannesburg
PLAY, WATCH, EAT
What to Cook
That’s it for today’s briefing. See you next time. — Amelia
P.S. Vivian Nereim will be our new Gulf bureau chief, becoming the first Times correspondent to lead a bureau in Saudi Arabia.
The latest episode of “The Daily” is on the midterm elections in New York.
Lynsey Chutel wrote today’s Spotlight on Africa. You can reach Amelia and the team at firstname.lastname@example.org.