Financial and Economic Brief - March 13, 2018by © Liberty Publishing, Inc.
Jobs Grow in February
According to ADP and Moody’s Analytics, companies added 235,000 jobs in the month of February. The total beat Wall Street expectations, but also decelerated slightly, as January posted an upwardly revised 244,000. “The job market is red hot and threatens to overheat,” Mark Zandi, chief economist at Moody's, said. “With government spending increases and tax cuts, growth is set to accelerate.” The gains come amid concerns that a tight jobs market could put upward pressure on wages and generate an inflation spike that would force the Fed to raise interest rates faster than the market anticipates.
Change to China’s Constitution
On Sunday China's parliament amended the constitution to remove the limit on the number of terms the president can serve. “Concentrating power in fewer hands is risky,” said Julian Evans-Pritchard, a China economist at Capital Economics. He says other top officials will be less likely to push back, even if the president's plans could harm the economy. The stakes are high. China's economy needs big reforms, particularly to address its escalating corporate debt. Analysts say the government hasn’t yet taken “real” steps to cut debt, which could do serious damage to the economy if left unchecked.
Dropbox Inc. IPO
On Monday, data-sharing business Dropbox Inc. filed for an initial public offering of 36 million shares, giving the company a value of more than $7 billion at the high end of the pricing range. Dropbox, which plans to raise $648 million, expects its price to be between $16 and $18 per share. The venture capital arm of Salesforce.com Inc. has agreed to buy $1 million of Dropbox’s Class A common stock in a private placement at a price per share equal to the IPO. Dropbox, which has 11 million paying users across 180 countries, said that about half of its 2017 revenue came from customers outside the U.S.