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China maps out plan to raise incomes and boost consumption

China will take steps to revive consumption by boosting people’s incomes, according to the official Xinhua News Agency, as part of a plan that adds to recent pledges by the government to support demand in an economy threatened by Donald Trump’s tariffs.
The guidelines that came from a State Council report set out other measures such stabilizing the stock and real estate markets, and offering incentives to raise the country’s birth rate. Investors await further clues from top officials during a press conference set to be held 3 p.m. Monday on steps to boost consumption.
Policymakers in China increasingly recognize that a broad recovery in incomes is necessary to encourage people to boost spending. At parliamentary meetings this month, the country’s leadership made boosting consumption the top priority of the annual work report for the first time since President Xi Jinping came to power over a decade ago.
“Households can’t spend what they don’t have,” said Lynn Song, chief economist for Greater China at ING Bank. “While there are few new details on how the government will increase spending, the details of the plan show a greater determination to tackle China’s consumption problem this year.”
The latest effort, which covers eight areas, outlines plans to improve childcare and includes a pledge to enforce China’s paid leave system. Local governments have already started to increase support for social wellbeing, with Hohhot, the capital of the Inner Mongolia Autonomous Region, announcing new childcare subsidies.
Ambitious goal
The program made public on Sunday elaborates on some of the measures announced by Premier Li Qiang earlier this month when he delivered the government’s annual work report to the national parliament in Beijing. China has set an ambitious economic growth goal at about 5% for 2025 and brought its fiscal deficit target to the highest in over three decades.
Lifting consumer spending is key to countering US policies that are upending global trade and causing a slowdown of Chinese exports, which contributed to nearly a third of the country’s economic expansion in 2024. At the same time, China is still grappling with a prolonged property slump that has suppressed demand and kept prices low throughout the economy while wages stagnate.
Reviving consumption has been a challenge for the government since the end of the pandemic. Retail sales have been anemic while consumer prices fell into deflation in February for the first time in over a year.
Beijing will promote “reasonable growth” in wages and establish a sound mechanism for adjusting the minimum wage, Xinhua reported. It will also look at setting up a childcare subsidy system, as well as strengthening how investment can support consumption.
“Compared to previous plans focused solely on supply-side improvements or old-for-new policies, the plan also touches on the need to improve income,” Jefferies analysts including Anne Ling wrote in a note. “We believe the government is placing more focus on securing the welfare of lower-income groups.”
Chinese stocks rallied the most in two months on Friday after the State Council, China’s cabinet, announced that officials from the finance ministry, the central bank and other government departments plan to discuss measures to boost consumption on Monday.
“With a few measures taking place such as trade-in extensions and maternity support by some cities, the guidelines could be read positively by the market amid the current rally,” Morgan Stanley analysts including Lillian Lou wrote in a note.
This story was originally featured on Fortune.com
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Builders say Trump tariffs will add $7,500 to $10,000 to the cost of building a home. The outcome? More expensive or smaller houses

Shopping for a new home? Ready to renovate your kitchen or install a new deck? You’ll be paying more to do so.
The Trump administration’s tariffs on imported goods from Canada, Mexico and China — some already in place, others set to take effect in a few weeks — are already driving up the cost of building materials used in new residential construction and home remodeling projects.
The tariffs are projected to raise the costs that go into building a single-family home in the U.S. by $7,500 to $10,000, according to the National Association of Home Builders. Such costs are typically passed along to the homebuyer in the form of higher prices, which could hurt demand at a time when the U.S. housing market remains in a slump and many builders are having to offer buyers costly incentives to drum up sales.
We Buy Houses in San Francisco, which purchases foreclosed homes and then typically renovates and sells them, is increasing prices on its refurbished properties between 7% and 12%. That’s even after saving $52,000 in costs by stockpiling 62% more Canadian lumber than usual.
“The uncertainty of how long these tariffs will continue has been the most challenging aspect of our planning,” said CEO Mamta Saini.
Bad timing for builders
The timing of the tariffs couldn’t be worse for homebuilders and the home remodeling industry, as this is typically the busiest time of year for home sales. The prospect of a trade war has roiled the stock market and stoked worries about the economy, which could lead many would-be homebuyers to remain on the sidelines.
“Rising costs due to tariffs on imports will leave builders with few options,” said Danielle Hale, chief economist at Realtor.com. “They can choose to pass higher costs along to consumers, which will mean higher home prices, or try to use less of these materials, which will mean smaller homes.”
Prices for building materials, including lumber, have been rising, even though the White House has delayed its tariffs rollout on some products. Lumber futures jumped to $658.71 per thousand board feet on March 4, reaching their highest level in more than two years.
The increase is already inflating costs for construction projects.
Dana Schnipper, a partner at building materials supplier JC Ryan in Farmingdale, New York, sourced wooden doors and frames for an apartment complex in Nassau County from a company in Canada that cost less than the American equivalent.
Half the job has already been supplied. But once the tariff goes into effect it will be applied to the remaining $75,000, adding $19,000 to the at-cost total. Once JC Ryan applies its mark up, that means the customer will owe $30,000 more than originally planned, Schnipper said.
He also expects the tariffs will give American manufacturers cover to raise prices on steel components.
“These prices will never come down,” Schnipper said. “Whatever is going to happen, these things will be sticky and hopefully we’re good enough as a small business, that we can absorb some of that. We can’t certainly absorb all of it, so I don’t know. It’s going to be an interesting couple of months.”
Sidestepping the tariffs by using an alternative to imported building materials isn’t always an option.
Bar Zakheim, owner of Better Place Design & Build, a contracting business in San Diego that specializes in building accessible dwelling units, or ADUs, said Canada remains the best source for lumber.
By sticking with imported lumber, Zakheim had to raise his prices about 15% compared with a year ago. He also has 8% fewer jobs lined up compared with last year.
“I’m not about to go out of business, but it’s looking to be a slow, expensive year for us,” he said.
Tariffs rollercoaster
On March 6, the Trump administration announced a one-month delay on its 25% tariffs on certain imports from Mexico and Canada, including softwood lumber. Tariffs of 20% on imports from China are already in effect. A 25% tariff on steel and aluminum imports — 50% on those from Canada — kicked in on March 12.
Tariffs on Mexican and Canadian goods slated to go into effect next month will raise the cost of imported construction materials by more than $3 billion, according to the NAHB. Those price hikes would be in addition to a 14.5% tariff on Canadian lumber previously imposed by the U.S., ratcheting up tariffs on Canadian lumber to 39.5%.
On Air Force One, President Donald Trump said he was pushing forward with his plans for tariffs on April 2 despite recent disruption in the stock market and nervousness about the economic impact.
“April 2 is a liberating day for our country,” he said. “We’re getting back some of the wealth that very, very foolish presidents gave away because they had no clue what they were doing.”
Building materials costs overall are already up 34% since December 2020, according to the NAHB.
Builders depend on raw materials, appliances and many other components produced abroad. About 7.3% of all products used in single-family home and apartment building construction are imported. Of those, nearly a quarter come from Canada and Mexico, according to the NAHB.
Both nations also account for 70% of the imports of two key home construction materials: lumber and gypsum. Canadian lumber is used in everything from framing to cabinetry and furniture. Mexican gypsum is used to make drywall.
Beyond raw materials, refrigerators, washing machines, air conditioners and an array of other home components are manufactured in Mexico and China, which is also a key source of steel and aluminum.
The tariffs will mean higher prices for home improvement shoppers, said Dent Johnson, president of True Value Hardware, which operates more than 4,000 independently owned hardware stores.
“The reality is that many products on the shelves of your local hardware store will eventually be affected,” he said in a statement emailed to The Associated Press.
Chilling effect
Confusion over the timing and scope of the tariffs, and their impact on the economy, could have a bigger chilling effect on the new-home market than higher prices.
“If consumers can’t plan, if builders can’t plan, it gets very difficult to know how to price product because you don’t know what price you need to move it,” said Carl Reichardt, a homebuilding analyst at BTIG. “If people are worried about their jobs, worried about the future, it’s very difficult to make the decision to buy a new home, whatever the price.”
The uncertainty created by the Trump administration’s tariffs policy will probably result in increased volatility for home sales and new home construction this year, said Robert Dietz, the NAHB’s chief economist.
Still, because it can take several months for a home to be built, the larger impact of from building materials costs are going to happen “down the road,” Dietz said.
The impact tariffs are having on consumers is already evident at Slutsky Lumber in Ellenville, N.Y.
“There are not as many people getting ready for spring like they usually are,” said co-owner Jonathan Falcon. “It seems like people are just cutting back on spending.”
Falcon also worries that smaller businesses like his will have a tough time absorbing the impact of the tariffs.
“This is just like another thing that’s going to be harder for small lumber yards to handle than the big guys and just sort of keep driving businesses like us to not make it,” he said.
This story was originally featured on Fortune.com
Tech News
‘Stagflation’ is the bogeyman hanging over this week’s Federal Reserve meeting: ‘That’s the tangled web they’re in’

When Federal Reserve officials last met in late January, things looked pretty good: Hiring was solid. The economy had just grown at a solid pace in last year’s final quarter. And inflation, while stubborn, had fallen sharply from its peak more than two years ago.
What a difference seven weeks makes.
As the Fed prepares to meet Tuesday and Wednesday, the central bank and its chair, Jerome Powell, are potentially headed to a much tougher spot. Inflation improved last month but is still high and tariffs could push it higher. At the same time, ongoing tariff threats as well as sharp cuts to government spending and jobs have tanked consumer and business confidence, which could weigh on the economy and even push up unemployment.
The toxic combination of still-high inflation and a weak or stagnant economy is often referred to as “stagflation,” a term that haunts central bankers. It is what bedeviled the United States in the 1970s, when even deep recessions didn’t kill inflation.
Stagflation, should it emerge, is hard for the Fed because typically policymakers would lift rates — or keep them high — to combat inflation. Yet if unemployment also rises, the Fed would usually cut rates to reduce borrowing costs and lift growth.
It’s not yet clear the economy will sink into stagflation. For now, like businesses and consumers, the Fed is grappling with a huge amount of uncertainty surrounding the economic outlook. But even a mild version — with the unemployment rising from its current low level of 4.1%, while inflation stayed stuck above the Fed’s 2% target — would pose a challenge for the central bank.
“That’s the tangled web they’re in,” said Esther George, former president of the Federal Reserve’s Kansas City branch. “You have inflation stickiness on the one hand. At the same time, you’re trying to look at what impact could this have on the job market, if growth begins to pull back. So it is a tough scenario for them for sure.”
Fed officials will almost certainly keep their key rate unchanged at their meeting this week. Once the meeting concludes Wednesday, they will release their latest quarterly economic projections, which will likely show they expect to cut their rate twice this year — the same as they projected in December.
The Fed implemented three cuts last year and then signaled at the January meeting that they were largely on pause until the economic outlook becomes clearer.
Wall Street investors expect three rate reductions this year, in June, September, and December, according to futures prices tracked by CME Fedwatch, in part because they worry an economic slowdown will force more reductions.
One development likely to unnerve Fed officials is the sharp jump in inflation expectations this month in the University of Michigan’s consumer sentiment survey. It showed the biggest increase in long-term inflation expectations since 1993.
Such expectations — which basically measure whether Americans are worried inflation will get worse — are important because they can become self-fulfilling. If businesses and consumers expect higher costs, they may take steps that push up inflation, like demanding higher wages, which in turn can force companies to raise prices to offset higher labor costs.
Some economists caution that the University of Michigan’s survey is preliminary and for now based on only about 400 responses. (The final version to be released later this month typically includes about 800.) And financial market measures of inflation expectations, based on bond prices, have actually declined in recent weeks.
The most recent inflation readings have been mixed. The consumer price index dropped last week for the first time in five months to 2.8% from 3%, an encouraging change. But the Fed’s preferred price gauge, to be released later this month, is likely to be unchanged.
The jump in inflation expectations is also a problem for the Fed because officials, including Powell, have said they are willing to let inflation gradually return to their 2% target in 2027, because expectations have generally been low. If other measures show inflation worries rising, the Fed could come under more pressure to get inflation down more quickly.
“I do worry when I see consumer expectations moving in the opposite direction,” George said. “I think you just have to keep an eye on that.”
The last time President Donald Trump imposed tariffs — in 2018 and 2019 — overall inflation didn’t rise by much, in part because they weren’t nearly as broad as what he is currently proposing and some duties, such as those on steel and aluminum, were watered down with loopholes. Now that Americans have lived through a painful inflationary episode, they are likely to be more skittish about rising prices.
Powell referred such concerns in remarks earlier this month. He said tariffs could just have a one-time impact on prices without causing ongoing inflation. But that could change “if it turns into a series” of tariff hikes, he said March 7, or “if the increases are larger, that would matter.”
“What really does matter is what is happening with long-term inflation expectations,” Powell added.
A week after his comments, those expectations shot higher in the University of Michigan survey.
This story was originally featured on Fortune.com
Tech News
Newly minted millennials and Gen Z now make up 40% of new Ferrari buyers

The share of new Ferrari buyers who are under the age of 40 has soared in the last two years as newly minted millennials, undeterred by two-year-long wait lists, give a window into the luxury carmaker’s future customer base.
Ferrari CEO Benedetto Vigna says under 40s now account for 40% of Ferrari’s new clients, according to an interview with CNBC. That’s a marked jump on the 30% of new buyers who were estimated to be under the age of 40 when Vigna last gave a figure in 2023.
“I don’t know for other brands, but for us, it is an achievement that is thanks to our team,” Vigna told CNBC.
Buying a Ferrari is, arguably, intentionally difficult. The luxury carmaker sells a fraction of the cars mass-market carmakers ship each year.
Vigna says waiting lists for a new Ferrari currently sits at two years. This can create problems for older customers keen to get the most out of their car in their twilight years, as well as for its new, younger customers. Vigna told CNBC one 37-year-old customer was anxious to receive his Ferrari before his 40th birthday.
“Don’t worry, you will get it when you are 39,” Vigna recounted.
The difficulty of buying a Ferrari is reflected in its underlying numbers. Ferrari shipped just 13,663 cars in 2024 while raking in profits of €1.25 billion ($1.36 billion).
With a market cap of $80 billion, Ferrari is the 35th most valuable company in Europe. By contrast, it was only the 492nd largest company in Europe by revenue in 2023.
Most of Ferrai’s customer base has been forged over decades. In 2024, Ferrari sold approximately 81% of its new cars to existing Ferrari owners and 48% to buyers who currently own more than one Ferrari.
Meanwhile, more than 90% of Ferraris ever made are still on the road, with an established resale operation ensuring high-quality Ferraris stay in circulation years after their first sale.
However, the carmaker is no different to other luxury competitors in needing to find a new crop of younger customers to maintain their dominance through the rest of the century.
In some instances, this play for millennial drivers has focused on flexibility. Jaguar Land Rover (JLR), through its venture arm InMotion Studios, set up rental and subscription services that give drivers temporary access to Range Rovers and off-road Land Rover vehicles without the commitment of ownership.
JLR also announced plans to invest £65 million ($81 million) in two plants to expand its paint combinations, allowing superrich drivers to match the color of their car with their private jet.
Improving customization options has become carmakers’ main priority to lure new customers.
Ferrari is no different. The carmaker made a fifth of its revenues in 2024 from personalization. While customization represents a lucrative revenue stream, it does create a dilemma for Ferrari and its exclusivity proposition.
Vigna said the carmaker was considering pre-defining its color combinations to preserve a Ferrari car’s resale value, wary of buyers in Ferrari’s popular resale market being deterred by the design choices of early buyers.
“Our new clients are 10% younger than all the clients we have in the world. So the prancing horse is kicking strong,” Vigna said in 2023 when the new clients under 40 figure stood at 30%.
This story was originally featured on Fortune.com
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