“Farmers and ranchers are very resilient and will try to survive,” he said. “But they might figure out in a year or two that there’s just no way to come back from a loss like this.”

Some of the damage is to corn and soybeans that farmers had in storage this year as they ride out the U.S.-China trade war. One farmer in southwestern Iowa reported having flooded bins and grain valued at about $900,000.

According to Iowa officials, most of the grain exposed to floodwaters this month is not insured.

That said, farmers and ranchers with livestock deaths might be eligible to receive assistance from the U.S. Department of Agriculture’s Farm Service Agency. The department also provides loans to help producers recover from flooding.

Iowa’s governor projected the total impact statewide at $1.6 billion, including damage to more than 23,000 structures.

The initial estimate for Iowa’s agriculture-related damages is $214 million, according to Kelly Coppess, a representative for the state’s Department of Agriculture. “We’ll know more after the water recedes and farmers have the opportunity to assess their properties,” she said in an email.

The recent flooding and storms also idled grain processing operations in Nebraska and slowed rail and truck transportation.

Archer Daniels Midland, a major processor of agricultural commodities, said Monday weather impacts would cause negative pretax operation impact to the company of $50 million to $60 million for the first quarter.

On Thursday, crop protection and seed company DowDuPont warned first-quarter results would be negatively affected due to transportation disruptions in the Midwest region that “halted farming operations, limited the ability to deliver products to customers, and delayed pre-season application.”

The Senate this week debated a $13 billion federal aid package that includes money for the Midwest, but one sticking point has been President Donald Trump‘s opposition to more funding for hurricane-battered Puerto Rico.

Earlier this month, the president issued major disaster declarations for severe storms and flooding in Nebraska and Iowa.

Flooding caused extensive damage to infrastructure, including rural roads, bridges and levees. The Army Corps of Engineers this week identified at least 52 breaches of levees on the Missouri, Platte and Elkhorn rivers.

“Areas where we’ve lost levees may not be able to be farmed because we’re going to have repeat floods until those levees are repaired,” said Brad Rippey, a meteorologist with the USDA. He said the crops impacted are predominantly corn and soybeans.

U.S. Treasury Secretary Steven Mnuchin said in a tweet on Friday that he and U.S. Trade Representative Robert Lighthizer had concluded “constructive” trade talks in Beijing.

“I look forward to welcoming China’s Vice Premier Liu He to continue these important discussions in Washington next week,” he said in the tweet.

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Mnuchin and Lighthizer were in the Chinese capital for the first face-to-face meetings between the two sides in weeks after missing an initial end-of-March goal for a summit between U.S. President Donald Trump and Chinese President Xi Jinping to sign a pact.

Trump imposed tariffs on $250 billion of Chinese imports last year in a move to force China to change the way it does business with the rest of the world and to pry open more of China’s economy to U.S. companies.

On Thursday, Chinese Premier Li Keqiang said Beijing will sharply expand market access for foreign banks and securities and insurance companies, adding to speculation that China may soon announce new rules to allow foreign financial firms to increase their presence at home.

White House economic adviser Larry Kudlow said the United States may drop some tariffs if a trade deal is reached while keeping others in place to ensure Beijing’s compliance.

“We’re not going to give up our leverage,” he told reporters in Washington on Thursday.

Mnuchin and Lighthizer greeted a waiting Liu at the Diaoyutai State Guest House just before 9 a.m. (0100) on Friday for what China’s Commerce Ministry has said would be a full day of talks.

Among Trump’s demands are for Beijing to end practices that Washington alleges result in the systematic theft of U.S. intellectual property and the forced transfer of American technology to Chinese companies.

U.S. companies say they are often pressured into handing over technological know-how to Chinese joint venture partners, local officials or regulators as a condition for doing business in China.

The U.S. government says that technology is often subsequently transferred to and used by Chinese competitors.

The issue has proved a tough one for negotiators as U.S. officials say China has previously refused to acknowledge the problem exists to the extent alleged by the United States, making discussing a resolution difficult.

China says it has no technology transfer requirements enshrined in its laws and any such transfers are a result of legitimate transactions.

Caitlin Ochs | Bloomberg | Getty Images

A New York Department of City Administrative Services representative, left, speaks with job seekers during a Catalyst Career Group job fair in New York.

The number of Americans filing applications for unemployment benefits unexpectedly fell last week, suggesting labor market conditions remained solid, despite slowing job growth.

Initial claims for state unemployment benefits dropped 5,000 to a seasonally adjusted 211,000 for the week ended March 23, the Labor Department said on Thursday. Data for the prior week was revised to show 5,000 fewer applications received than previously reported.

Economists polled by Reuters had forecast claims rising to 225,000 in the latest week. The Labor Department said no states were estimated. The government revised the claims data and the so-called seasonal factors from 2014 through 2018. It also updated the seasonal factor for 2019.

The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 3,250 to 217,250 last week.

Job growth has slowed after last year’s robust gain. The pace, however, remains more than enough to keep up with growth in the working age population. The unemployment rate is currently at 3.8 percent. The moderation in job growth also reflecting a shortage of workers and softening economic growth as the stimulus from a $1.5 trillion tax cut package fades.

Thursday’s claims report showed the number of people receiving benefits after an initial week of aid rose 13,000 to 1.76 million for the week ended March 16. The four-week moving average of the so-called continuing claims fell 4,250 to 1.75 million.

The continuing claims data covered the survey week for March’s unemployment rate. The four-week average of continuing claims rose slightly between the February and March survey periods, suggesting little change in the unemployment rate.

Economic growth in the U.S. slowed in the final part of 2018, with GDP posting a gain of just 2.2 percent in the fourth quarter, the Commerce Department reported Thursday.

The final reading was in line with expectations of economists surveyed by Dow Jones. That was down from the previous estimate of 2.6 percent and leaves full-year growth at 2.9 percent. Third-quarter growth registered 3.4 percent. In all, 2018 was the best year for the economy since 2015 and well above the 2.2 percent increase in 2017. The economy grew 3 percent when compared with the fourth quarter of 2017.

Consumer spending as well as government expenditures at the state and national levels and nonresidential fixed investment all were revised down and subtracted from the GDP. Imports also were revised lower amid continuing tensions between the U.S. and its global trading partners.

However, exports also rose, helping fuel the GDP rise.

Overall, the fourth quarter increase tied for the slowest gain since the first quarter of 2018.

Nonresidential fixed investment, a key sign of business activity, rose 5.4 percent, up from 2.5 percent in the third quarter. Equipment spending increased 6.6 percent but investment in structures fell 3.9 percent, its second consecutive decline. Residential investment also fell, down 4.7 percent for its fourth straight negative quarter.

Exports increased by 1.8 percent while imports were up 2 percent.

In addition to the waning GDP growth, corporate profits edged lower in the fourth quarter but finished the year up 7.8 percent, compared with 3.2 percent in 2017. Companies benefited from the White House-backed tax cut that slashed the corporate rate to 21 percent.

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Nobel Prize winner Robert Shiller: Housing market ‘looking a little bit weaker’

Li also sought on Thursday to ease investors’ concerns over China’s cooling economy, saying Beijing has enough policy tools to fight a “hard battle.”

Li said China will cut “real interest rate levels” and lower financing costs for Chinese companies, but did not elaborate on which interest rate he was referring to. Li had made similar comments in a speech earlier this month.

Positive changes in China’s economy in March exceeded the government’s expectations, he said.

Some analysts say shockingly weak industrial profit data on Wednesday have added urgency for more policy easing.

China’s industrial firms posted their worst slump in profits since late 2011 in the first two months of this year amid slowing demand at home and abroad.

Analysts at Capital Economics said they believe the benchmark lending rate will be cut in the weeks ahead, though sources have told Reuters such a move may be a last resort if the economy does not show signs of responding to previous support measures.

Other China watchers say policymakers may be waiting for March and first-quarter data in mid-April for a better picture of whether conditions are starting to stabilize, and how much additional policy easing may be needed.

Li said he could not rule out the possibility that there would be some fluctuations in the world’s second-largest economy this year, but added that earlier policy steps were gaining traction.

However, Chinese policymakers, including Li, have stressed that Beijing would not resort to “flood-like” stimulus that would unleash huge amounts of cheap credit, out of concern that could add to a mountain of debt.

The central bank has not cut benchmark rates since the last downturn in 2015, but it has been guiding financing costs lower since last year through various means including liquidity injections.

China’s economic growth cooled to 6.6 percent last year, the slowest pace in nearly 30 years, and analysts polled by Reuters expect a further pullback to 6.3 percent in 2019.

Borrowers and buyers awoke to a new normal in housing affordability last week, as mortgage rates dropped to the lowest level in more than a year and are now expected to stay low for a while.

Mortgage applications jumped 8.9 percent last week from the previous week and 5.7 percent from a year earlier, according to the Mortgage Bankers Association’s seasonally adjusted report.

Both refinance and purchase applications surged, but the more rate-sensitive refis were the real leader. Those applications jumped 12 percent for the week and were 8.5 percent higher than a year ago. For much of last year, the refinance market was minimal, down dramatically from 2017, as rates rose.

Last week, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 4.45 percent from 4.55 percent, with points decreasing to 0.39 from 0.42 (including the origination fee) for loans with a 20 percent down payment.

That was a reaction to the Federal Reserve announcement that it does not expect to raise rates anymore this year. Some are now suggesting the central bank could even lower rates. Bond yields fell even further on concerns of slowing economic growth overseas. Mortgage rates loosely follow the yield on the 10-year Treasury note.

“Rates dropped across all loan types, and the 30-year fixed-rate mortgage is now more than 70 basis points below last November’s peak,” said Joel Kan, an MBA economist. “The average loan size increased once again to new highs for both purchase and refinance loans, as borrowers with — or seeking — larger loans tend to be more reactive to the drop in rates.”

Homebuyers also reacted positively, with purchase applications surging 6 percent for the week, although just 4 percent higher annually. Consumers shopping for homes are still facing higher prices, but the gains are shrinking and have been for the past 10 months. Nationally, prices were up 4.3 percent annually, according to the latest S&P CoreLogic Case-Shiller home price index.

Some see the decline in prices as a potential boost to the spring housing market, while others see just the opposite.

“The housing market is cooling and appears to be in the early stages of a mild cyclical downturn, as evidenced by declining home sales (despite the last reported month’s resurgence),” wrote Issi Romem, chief economist at Trulia. “Changes in home prices tend to lag home sales by a year or two, so the current slowing of housing price appreciation aligns well with already-decreasing home sales.”

There is also concern that today’s lower mortgage rates could reignite some of the heat under home prices, as buyers are now more financially competitive than they were last fall. There is more supply of homes for sale now, but not a lot, especially at the entry level. Single family housing starts in February were more than 10 percent lower annually, although builders are reporting more buyer demand.

Mortgage rates continued to slide this week, and some are now predicting rates could soon be in the high 3 percent range.

The trade deficit between the U.S. and its global partners dropped sharply in January to $51.15 billion as exports rebounded from a slowdown at the end of 2018, the Commerce Department reported Wednesday.

Economists surveyed by Dow Jones had forecast that the balance fell to $57 billion in January, from the $59.9 billion recorded the previous month.

The decline of 14.6 percent represented the sharpest drop since March 2018 and comes amid continued efforts by the Trump administration to level the playing field with China and other global partners.

Exports rose to $207.3 billion, a $1.9 billion increase from December, while imports fell to $258.5 billion, off $6.8 billion. The goods deficit dropped 10 percent to $73.3 billion while the services surplus edged higher to $22.1 billion.

China specifically represented a good chunk of the reduction in the trade balance shortfall, as the deficit decreased $5.5 billion to $33.2 billion as imports fell 12.2 percent to $40.8 billion. The two nations have been involved in a tit-for-tat tariff battle as officials try to work out a long-range framework that opens up markets for U.S. goods.

Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer will begin additional negotiations with Chinese officials Thursday. The White House in 2018 slapped tariffs on $250 billion worth of imports from China, which retaliated with levies on $110 billion worth of American products.

In addition to the shift on China, the balance with Canada went from a deficit of $700 million to a surplus of $1.4 billion, though the shortfall with South Korea increased to $2.4 billion from $1.7 billion.

At a product level, exports of soybeans increased by $900 million, passenger cars rose by $700 million and aircraft fell by $1.3 billion.

The 30-year fixed mortgage rate dropped to an average of 4.28 percent last week, the lowest in more than a year, from 4.31 in the prior week, according to data from mortgage finance agency Freddie Mac. House price inflation is also slowing.

Still, homebuilders remain constrained in their ability to construct more homes for the lower end of the market. A survey last week showed confidence among homebuilders was steady in March, with builders still complaining about the scarcity of skilled workers, land and zoning restrictions in many major metro areas.

Investment in homebuilding contracted 0.2 percent in 2018, the weakest performance since 2010.

Single-family homebuilding, which accounts for the largest share of the housing market, tumbled 17.0 percent to a rate of 805,000 units in February, the lowest level since May 2017. The percentage drop in single-family homebuilding was the largest since February 2015.

Single-family homebuilding fell in all four regions last month. Permits to build single-family homes were unchanged in February at a pace of 821,000. These permits are now leading housing starts, suggesting a rebound in single-family construction in the coming months.

Starts for the volatile multi-family housing segment jumped 17.8 percent to a rate of 357,000 units in February. Permits for the construction of multi-family homes fell 4.2 percent to a pace of 475,000 units last month.

The high-stakes trade decisions in Washington do not end there. Trump has also accused Europe of unfair trade practices, and sees tariffs on European cars as one means to address them.

The move would come with its own political risks. Trump’s tariff policy has sparked more backlash from Republicans on Capitol Hill than just about anything the president has done since he took office.

GOP lawmakers have in particular questioned the national security justification the Trump administration used to put duties on steel and aluminum imports last year. A group of lawmakers from both major parties led by Sen. Pat Toomey, R-Pa., wrote to Commerce Secretary Wilbur Ross last week asking him to publish the auto tariff report and answer questions about how he came to his conclusions.

Some GOP senators have already signaled they will oppose auto tariffs if Trump levies them.

“Section 232 is a vital trade remedy tool for genuine national security threats, but misusing it on autos is harmful for Ohio, its economy & auto manufacturing in our state,” Sen. Rob Portman, R-Ohio, said in a written statement. “I urge the administration to make public its recent report justifying its rationale in this case.”

Last week, Trump told Fox Business Network that he wants European automakers to build their cars in the U.S. Still, he may not exactly agree with the rationale his administration would use to levy the duties on automobiles.

Asked if he thought car imports threatened national security, the president answered, “Well, no.” He said “what poses a national security risk is our balance sheet,” in reference to trade deficits with the European Union.

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U.S. auto sales are falling as vehicle prices climb, indicating that buyers at the lower end are getting squeezed out of the new car market, according to a new industry forecast.

First-quarter auto sales are expected to drop by nearly 2.5 percent from a year earlier, to 4 million units, according to J.D. Power and LMC Automotive.

Retail sales, which exclude sales to rental car companies and other commercial businesses, are expected to drop by about 5 percent to 2.9 million units. It’s the first time first-quarter retail sales are projected to fall short of 3 million units in six years, said Thomas King, senior vice president of J.D. Power’s data and analytics division.

It’s more evidence that vehicle sales in the world’s second-largest auto market are sliding from the record levels they had achieved in the years following the financial crisis.

While sales volumes are softening, especially for cheaper cars, customers are still paying remarkably high prices for cars, King added. Prices are hitting monthly records while retail sales of vehicles that cost under $25,000 are expected to fall 12 percent in the quarter, more than double the overall decline.

The average price of a new vehicle is expected to hit $33,319, the highest ever for the first quarter. The average buyer is paying $1,000 more per purchase than in the first quarter of 2018.

The data suggest that more and more buyers are getting squeezed out of the new vehicle market and are likely turning to used cars as manufacturers pull back on cheaper vehicles, said LMC Automotive President of Global Forecasting Jeff Schuster.

“The challenge will be holding discipline as new vehicles launch and competitive pressure grows,” Schuster said. “The Fed’s decision to hold interest rates will help stabilize the interest element of the rising cost of buying a new vehicle.”