As the nation’s economy was still reeling from the body blow of the Great Recession, Seattle’s was about to take off.

In 2010, Amazon opened a headquarters in the little-known South Lake Union district — and then expanded eight-fold over the next seven years to fill 36 buildings. Everywhere you look, there are signs of a thriving city: Building cranes looming over streets, hotels crammed with business travelers, tony restaurants filled with diners.

 

Seattle is among a fistful of cities that have flourished in the 10 years since the Great Recession officially began in December 2007, even while most other large cities — and sizable swaths of rural America — have managed only modest recoveries. Some cities are still struggling to shed the scars of recession.

 

In Las Vegas, half-finished housing developments, relics of the housing boom, pockmark the surrounding desert. Families there earn nearly 20 percent less, adjusted for inflation, than in 2007.

 

In the decade since the recession began, the nation as a whole has staged a heartening comeback: The unemployment rate is at a 17-year low of 4.1 percent, down from 10 percent in 2009. Employers have added jobs for 86 straight months, a record streak. And last year, income for a typical U.S. household, adjusted for inflation, finally regained its 1999 peak.

 

Yet the rebound has been uneven. It’s failed to narrow the country’s deep regional economic disparities and in fact has worsened them, according to data analyzed exclusively for The Associated Press. A few cities have grown much richer, thanks to their grip on an outsize share of lucrative tech jobs and soaring home prices. Others have thrived because of surging oil and gas production.

 

But many Southern and Midwestern cities — from Greensboro, North Carolina, to Janesville, Wisconsin — have yet to recover from the loss of manufacturing jobs that have been automated out of existence or lost to competition from China, before and during the recession. Like others, they have fewer jobs and lower household incomes than before the downturn.

 

Those disparities complicate the rosy picture painted by most nationwide economic data. With the nation enduring a widening wealth gap, an overall robust U.S. economy doesn’t necessarily translate into widely shared prosperity.

 

“There’s definitely a pattern of the coasts pulling away from the middle of the country on income,” said Alan Berube, an expert on metro U.S. economies at the Brookings Institution. “There are a large number of places around the country that haven’t gotten back to where they were 15 years ago, never mind ten years ago.”

 

That said, for all the economic might the top-flight cities have gained in the past decade, many city officials and business leaders have become concerned that their success is running up against limits. Surging home prices and rents have made housing unaffordable for many. With cities like Seattle and San Francisco choked with traffic, engulfed by homeless people and requiring ever-larger incomes to live comfortably, quality of life may be at risk.

 

In the Western United States, inflation reached nearly 3 percent in October compared with a year earlier, according to government data. By contrast, inflation rose just 1.5 percent in the Midwest and New England.

 

“It’s the first time I have noticed a persistent spread between inflation in one area and the rest of the country,” says Steve Cochrane, an economist at Moody’s Analytics who has studied regional economics for 25 years.

 

Mindful of the financial burden on employees, some tech companies have decided to set up shop or expand where expenses are more manageable. Snapchat and Hulu have put down roots on the slightly more affordable west side of Los Angeles, joining outposts of Google and Facebook in an area now known as “Silicon Beach.”

 

Last year, nearly as many people moved out of Silicon Valley — defined as Santa Clara and San Mateo counties — as moved in, according to a report by Joint Venture Silicon Valley, a civic group. It was the first time since 2010 that the number of arrivals and departures have been roughly equal.

 

The trend isn’t entirely surprising given that commuting times in San Francisco have lengthened by 40 minutes a week in the past decade, the report said. The price of a typical San Francisco home has reached an eye-watering $1.2 million, according to Trulia, an online real estate data provider.

 

Housing costs, inflated by local regulations restricting home-building, can act as a barrier to opportunity. They make it harder for people in poorer areas to move for better opportunities. With fewer people able to move to places with more jobs and higher pay, the national economy tends to suffer, economists say.

 

Among the nation’s 100 largest metro areas, San Francisco experienced the biggest gain in median household income in the decade after the recession began. Adjusted for inflation, it jumped 13.2 percent, according to data compiled by Moody’s Analytics. San Jose, which is part of Silicon Valley, enjoyed the second-largest increase, at 12.7 percent, followed by Austin, Texas, with 8.8 percent.

 

By comparison, median household income in the 100 largest metro areas actually fell 2.7 percent, on average. And the income gap between the 10 richest and 10 poorest metro areas has widened in the past decade, Moody’s data shows.

 

Eight of the 10 cities with the largest income gains are “tech hubs,” with heavy concentrations of software architects, data analysts and cloud-computing engineers. They include Denver, Portland, Oregon; Provo, Utah; and Raleigh, North Carolina.

 

Pittsburgh has experienced the ninth-largest income gain, thanks to increased tech and health care jobs. Oklahoma City, where inflation-adjusted incomes are up 5.5 percent, has benefited from the oil and gas boom.

 

Most Americans haven’t received raises anywhere near that large. Data compiled by Brookings shows that 65 percent of Americans who live in urban areas _ defined as cities with populations above 65,000 _ live in places where the typical household income is still below its 1999 level.

 

Max Versace, CEO of artificial intelligence startup Neurala, who arrived in Boston in 2001 from Italy, has watched the city transform itself into a boomtown, filled with innovative companies working on robotics, AI and self-driving cars. Boston enjoyed the 11th-best income gain in the past decade, Moody’s data shows.

 

“I have never experienced a slowdown in Boston,” said Versace, whose company is based in Boston’s Seaport neighborhood, a formerly rundown industrial area now crowded with startups and high-end restaurants. “Boston is one of those bubbles  — good bubbles — that have been saved by the two locomotives of computer sciences and biotechnology.”

Versace launched Neurala in 2013, and it now has 36 employees, including eight with PhDs. While most workers across the country have endured scant pay gains, Versace estimates that salaries for AI researchers with Ph.D.’s have doubled since 2008.

 

Neurala is working to incorporate AI in drones, including one aimed at energy firms that will use its technology to spot cracks in pipelines or wind turbines without needing humans to monitor video feeds.

 

One other change Versace is happy to observe: “I no longer have to spit out espressos or pasta,” because the quality of each has improved so much since he arrived.

 

The divergence between the richest and poorest U.S. cities predates the Great Recession. But it is historically unusual. For a period of 100 years ending in the 1980s, income gaps between richer and poorer cities narrowed steadily.

 

Economists cite three reasons why such convergence ended. The nature of high-tech work, for one thing, makes it productive for higher-skilled workers to cluster in the same cities.

 

Elisa Giannone, an economist at the University of Chicago, notes that in past decades, highly paid professionals _ doctors, say _ might have congregated in cities with fewer physicians to capitalize on the lack of competition and earn more. Likewise, many companies that employed high-skilled workers would move to lower-cost cities to take advantage of cheaper labor.

 

But her research has found that both trends have been upended by the rise of highly skilled information technology work. People with such skills prefer to work in cities with their peers. And the companies that employ them seem to care just as much about the right skills as they do about lower costs. What’s more, higher educated employees typically become more efficient when they cluster together and exchange ideas.

 

“It’s more beneficial and more productive to go where there are more people like me,” Giannone says, referring to how such workers think. “I don’t want to be left out.”

 

Jed Kolko, chief economist at Indeed, the job listings website, calculates that one quarter of tech job openings in the first half of this year were located in just eight tech hubs: Baltimore, Washington, Boston, San Jose, San Francisco, Seattle, Austin and Raleigh, North Carolina.

 

A second factor is swelling home prices and rents, particularly where regulations make it harder to build more. People in poorer areas often used move to wealthier cities to find better opportunities. Now, that option is increasingly available only to those with advanced skills or education.

 

Two public policy experts, Peter Ganong and Daniel Shoag, concluded in a paper last year that both janitors and lawyers used to fare better financially in New York City than in poorer cities, even accounting for the higher cost of living.

Now, because of rocketing home prices in richer areas, that’s no longer true. Lawyers can still come out ahead. But janitors and other lower-skilled workers don’t.

 

“Skilled workers move to high cost, high productivity areas, and unskilled workers move out,” Ganong and Shoag wrote.

 

In the 10 cities with the fastest income growth, housing prices have soared by an average of 31.1 percent in the past decade, Trulia found. That compares with a national average increase of just 5.1 percent.

 

One result has been huge wealth gains for a fortunate few. A resident of San Francisco who bought a typical home, paying nearly $816,000 in the spring of 2007 — just as the housing market nationwide was collapsing — has gained $365,000 in the past decade.

 

In Cincinnati, a homeowner who bought at the same time would have paid just $143,000 but would have gained only $6,500.

 

“Geography plays a critical role in wealth building,” said Ralph McLaughlin, chief economist at Trulia.

 

A final factor behind the diversion is that the industries and occupations in slower-growing regions were leveled by the recession. Manufacturing and mining are disproportionately located in red states. So are retail jobs. All those sectors have endured weak growth since the recession.

 

Robin Brooks, an economist at the Institute of International Finance, a trade group, says those job losses have opened a gap between so-called “red” states, which voted for Donald Trump in 2016, and “blue” states.

 

About 61 percent of blue state residents have jobs, compared with roughly 59 percent in red states, Brooks found. That cuts against recent historical patterns: From the 1990s through the mild recession of 2001, there was no gap at all.

 

Despite the persistence of regional inequality, some positive trends have emerged: More tech jobs are moving out of the tech hubs and spreading around the country. Software programming jobs have migrated to Dallas, Detroit, and Charlotte, among other cities, according to Brookings data. Software increasingly plays a vital role in banking and finance, auto manufacturing, and retail.

 

But many of those tech jobs are lower- or mid-level positions, such as technical support and help desk jobs, rather than higher-paying, cutting-edge positions. Kolko notes that the most highly-skilled tech jobs — in such areas as machine learning, a form of artificial intelligence; computer vision; and database engineering — are even more concentrated in tech hubs than are tech jobs overall.

 

“There’s a spreading out of the tech economy, but it remains a different tech economy in the middle of the country than what you find in the Bay Area, Boston, New York and Austin,” Berube said.

 

Software may be more widely used, but when it comes to actually inventing new software, “that is still a phenomenon you find in only four of five places in the United States.”
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Walt Disney Co on Thursday agreed to buy film, TV and international assets from Rupert Murdoch’s Twenty-First Century Fox Inc for $52.4 billion as Disney seeks greater scale to tackle growing competition from Netflix and Amazon.com.

Under the terms of the all-stock deal, Disney acquires significant assets from Fox, including the studios that produce the blockbuster Marvel superhero pictures and the “Avatar” franchise, as well as hit TV shows such as “The Simpsons”.

Fox shareholders will receive 0.2745 Disney shares for each share held. This translates to a value of $29.50 per share for the assets that Disney is buying, Reuters calculations based on Disney’s Wednesday market closing price show.

Immediately prior to the acquisition, Fox will separate the Fox Broadcasting network and stations, Fox News Channel, Fox Business Network, FS1, FS2 and Big Ten Network into a newly listed company that will be spun off to its shareholders.

The deal ends more than half a century of expansion by Murdoch, 86, who turned a single Australian newspaper he inherited from his father at the age of 21 into one of the world’s most important global news and film conglomerates.

Disney Chief Executive Bob Iger, 66, will extend his tenure through the end of 2021 to oversee the integration of the Fox businesses. He has already postponed his retirement from Disney three times, saying in March he was committed to leaving the company in July 2019.

Disney will also assume about $13.7 billion of Fox’s net debt in the deal.

Through Fox’s stake in the Hulu video streaming service, Disney will assume majority control of one of Netflix Inc’s main competitors. Hulu is also partially owned by Comcast Corp and Time Warner Inc.

Shares in both Disney and Fox were up nearly 1 percent in premarket trading.
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The European Union’s leaders are due to say Friday that the Brexit talks with Britain can move on to the next phase to include the key topic of trade, according to a draft statement seen by The Associated Press.

 

The progress comes after the sides reached a deal on the preliminary divorce issues, such as the status of Britain’s physical border with EU member Ireland. The EU had long said it wanted a deal on Britain’s exit terms before broadening the talks to include the subject of future relations.

 

British Prime Minister Theresa May will address EU leaders at a two-day summit on Thursday evening and welcome progress in the Brexit talks. But she is not expected to remain in Brussels on Friday when the leaders give the green light to broaden the negotiations.

 

The draft statement says that progress made in Brexit talks “is sufficient to move to the second phase” to discuss future relations and trade.

 

In the statement, which could be modified before Friday, the leaders emphasize the importance of organizing a transition period, probably of around two years, to ease Britain out of the EU from 2019.

 

That would buy time for all sides. Britain will leave the EU on March 29, 2019 but the Brexit negotiations must be wrapped up by the fall of 2018 to leave time for individual EU parliaments to endorse any agreement.

 

During a transition period, Britain will have no seat at the EU’s table, no lawmakers in the European Parliament, and no judges in the bloc’s courts. But it will still be bound by European law, without having any say in decision-making, and the European Court of Justice will remain the final arbiter of any disputes.

 

Britain during this period “will no longer participate in or nominate or elect members of the EU institutions, nor participate in the decision-making of the Union bodies, offices and agencies,” the draft statement says.

 

Ahead of the summit, Britain’s chief Brexit negotiator said Thursday that a situation in which the U.K. crashes out of the EU without a deal has become “massively less probable” because of a preliminary agreement reached last week.

 

Brexit Secretary David Davis told lawmakers that a “no-deal” Brexit was now extremely unlikely, although “we continue to prepare for all outcomes.”

 

The British government is hailing progress in Brussels, but faces trouble at home over Brexit. Late on Wednesday, lawmakers won a House of Commons vote giving Parliament the final say on any deal with the EU.

 

 
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Revenge is sweet for the makers of France’s traditional “calisson” candies, who have won a months-long legal battle with a businessman who trademarked the product’s name in China.

The lozenge-shaped sweets, made of a mixture of candied fruit and ground almonds topped with icing, are widely enjoyed in France’s southern Aix-en-Provence region.

Their makers were none too pleased when Chinese entrepreneur Ye Chunlin spotted a sweet opportunity in 2015 to register the “Calisson d’Aix” name for use at home, as well as its Mandarin equivalent, “kalisong”.

The trademark was set to be valid until 2026, sparking angst among Provence’s sweetmakers who worried Ye’s move could have barred them from entering the huge Chinese market.

But China’s copyright office rejected Ye’s claim to the brand name in a decision seen by AFP on Wednesday, which said his request to use the label “could confuse consumers on the origin of the products”.

Laure Pierrisnard, head of the union of calisson makers in Aix, hailed the news as “a real victory”.

The union has fought the case for months in the name of 12 sweetmakers, accusing Ye of “opportunism.”

It is not uncommon for Western brands to try to crack the Chinese market only to find that their name or trademark has been registered by a local company.

An enterprising Chinese businessman in 2007 registered the brand name “IPHONE” for use in leather products, to the great displeasure of Apple, which lost a court case against him.

The courts similarly backed a Chinese company that wanted to use the name of sneaker brand New Balance.

Ye, who is from the eastern province of Zhejiang, did not respond to the French sweetmakers’ objections to Chinese authorities.

But he insisted in late 2016 that he acted in good faith, telling AFP he was “a salesman who does business within the rules.”

As far as French producers are aware, calissons have never rolled off a factory line in China.

Some makers, dreaming of the international success enjoyed by their rival the macaron, are seeking to expand abroad, including to the enticing Chinese market.

The Roy Rene chain – owned by Olivier Baussan, the entrepreneur behind Province’s best known brand internationally, L’Occitane cosmetics — has stores in Miami and Canada, and is eyeing Dubai.

The company says it has been contacted by several investors over the course of the Chinese court case seeking to bring the sweets to China.

The affair has also re-energized makers of the dainty candies in their bid for special European status as a product that comes specifically from Provence.

Beijing has already recognized the status of 10 such European foods, including France’s Comte and Roquefort cheeses and Italy’s Parma ham, as well as 45 different wines from Bordeaux.

Aix-en-Provence produces about 800 tons of calissons every year.

 
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Tanzanian president John Magufuli ordered the central bank on Wednesday to tighten controls on the movement of hard currency and take swift action against failing banks in a bid to tackle financial crimes and protect the local shilling currency.

The move comes as the International Monetary Fund (IMF) called on Tanzania to speed up reforms and spend more to prevent a slowdown in one of the world’s fastest-growing economies.

Magufuli pledged to reform an economy hobbled by red tape and corruption and begin a program to develop public infrastructure after he was elected in 2015.

“We now have some 58 banks in Tanzania, the [central] Bank of Tanzania should closely monitor these banks and take swift action against failing institutions. It’s better to have a few viable banks than many failing banks,” he said in a statement issued by his office.

“I also want restrictions on the use of U.S. dollars. As I speak, $1 million cash was confiscated at the … [main] airport in Dar es Salaam and there is no explanation on the movement of this money into the country. We have to be careful.”

Magufuli said his government was taking several monetary policy measures to improve lending to the private sector, and this had already started to ease pressure on shilling liquidity.

The IMF said late on Tuesday that Tanzania’s banking sector remained well-capitalized, but some small and mid-sized banks face a sizable reduction in capitalization ratios.

It said that progress has been slow, while a lack of public spending — coupled with private sector concerns over policy uncertainty — was curtailing growth in East Africa’s third-biggest economy.

“Improvements in the business environment — policy predictability based on a strong dialog with the private sector, regulatory reforms, timely payment of value-added tax [VAT] and other tax refunds, and eliminating domestic arrears — must be pursued with urgency,” the IMF said late on Tuesday.

Tanzania’s economy grew at an annual rate of 6.8 percent in the first half of this year from 7.7 percent in the same period in 2016.

The economy has been growing at around 7 percent annually for the past decade, but the World Bank said in November growth will likely slow to 6.6 percent in 2017.

The IMF said a sharp fall in lending to the private sector, prompted by high non-performing loans, pointed to a continued slowdown in growth.

In June, the IMF said Tanzania may have to delay implementing some of its infrastructure projects because its revenue expectations for 2017-2018 may not be achieved.

In a bid to profit from its long coastline, Tanzania wants to spend $14.2 billion over the next five years to build a 2,560 km (1,590 mile) railway network, part of plans that also include upgrading ports and roads to serve growing economies in the region.

The IMF said subdued government revenue collection and delays in securing financing for projects have held back development spending and hurt economic growth.
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The United States, European Union and Japan vowed Tuesday to work together to fight market-distorting trade practices and policies that have fueled excess production capacity, naming several key features of China’s economic system.

In a joint statement that did not single out China or any other country, the three economic powers said they would work within the World Trade Organization and other multilateral groups to eliminate unfair competitive conditions caused by subsidies, state-owned enterprises, “forced” technology transfer and local content requirements.

The move was a rare show of solidarity with the United States at a World Trade Organization meeting dominated by differences over U.S. President Donald Trump’s “America First” trade agenda and U.S. efforts to stall the appointment of WTO judges.

It reflected growing frustration among industrial countries over China’s trade practices, along with concerns that other developing countries will follow Beijing’s lead.

The statement said protectionist practices “are serious concerns for the proper functioning of international trade, the creation of innovative technologies and the sustainable growth of the global economy.”

EU Trade Commissioner Cecilia Malmstrom said China’s industry subsidies, including for aluminum and steel, were flooding global markets and hurting European workers in a “very, very dramatic” way.

“There’s no secret that we think that China is a big sinner here, but there are other countries that are as well,” Malmstrom told reporters on the sidelines of a business forum.

In the opening session of the WTO ministerial conference in Buenos Aires on Monday, the United States and Japan criticized a lack of transparency in some WTO members’ trade practices, a thinly veiled swipe at Beijing.

China, meanwhile, appealed for members to “join hands” and uphold WTO rules to protect globalization in the face of rising protectionism.

The joint statement came after Japan approached the European Union and the United States about overcapacity, according to an EU source, with both Tokyo and Brussels concerned about the possibility the Trump administration could act unilaterally.

“There is a thought that if we bring them into the fold, and can work jointly with them, then it reduces the risk of them going alone,” the source said.

​’Playing by the rules’

Washington, Brussels and Tokyo have previously raised complaints about China’s excess production capacity in a number of industrial sectors that has pushed down world prices and caused layoffs elsewhere.

The United States recently sided with the EU in arguing that such distortions mean the WTO should not grant China market economy status, a move that would severely weaken their trade defenses.

“We have been … reaching out to China to tell them they really must start playing by the rules,” Malmstrom told reporters.

The EU’s and Japan’s willingness to cooperate with the Trump administration comes despite disagreements over the role of the WTO and the future of multilateral trade deals. 

Trump has expressed his preference for bilateral negotiations, and his trade rhetoric has cast a cloud over the WTO meeting.

Efforts on Tuesday to make progress on a ministerial statement from all 164 WTO members were unsuccessful, since one country could not agree on the language, WTO spokesman Keith Rockwell told reporters, declining to name that country.

U.S. officials last month blocked WTO efforts to draft a statement of unity over the “centrality” of the global trading system and the need to aid development.

A spokeswoman for the office of the U.S. trade representative could not be immediately reached for comment.

The Trump administration is considering several unilateral tariff actions on steel, aluminum and China’s intellectual property practices that are likely to draw disputes from WTO members.
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