By ANDREW BROWNE

BOAO, China—The head of China’s sovereign wealth fund, China Investment Corp., said he sees gathering clouds over the global economy, with the continuing debt crisis in Europe, no end in sight to the U.S. property slump and natural disasters that have set back a nascent recovery in Japan. (more…)

Federal Reserve officials judged that the U.S. economy was gaining traction when they met three weeks ago, but highlighted the potential negative impact of rapidly rising commodity prices on inflation expectations, consumer spending and business investment.

At the meeting, the Fed maintained its easy-money policies while offering reassuring words about the economic outlook and signaling vigilance on inflation.

Officials at the meeting indicated increasing energy and commodity prices had fed a recent boost in headline inflation, but expected that rise to be temporary. They showed some concern, though, that businesses and consumers may not feel the same way.

“Accordingly, participants considered it important to pay close attention to the evolution not only of headline and core inflation but also of inflation expectations,” the minutes said.

Fed officials also discussed new sources of uncertainty in the economy, noting that “unfolding events in the Middle East and North Africa, along with the recent earthquake, tsunami, and subsequent developments in Japan, had further increased uncertainty about the economic outlook.”

Despite some risks, Fed officials said the economy is on firmer footing, with unemployment declining while consumer spending and business investment show signs of strength. The Fed also maintained its easy-money policies. (more…)

WSJ’s Yumiko Ono reports on fears surrounding the Japanese’s government’s decision to dump more than 11,000 tons of radioactive water into the Pacific Ocean.

Earthquake in Japan

See all the graphics on the situation in Japan — from before and after photos to the status of the reactors to survivors’ stories.

Japanese authorities said Tuesday they had discovered for the first time fish swimming off the country’s Pacific coast carrying high levels of radioactive materials. The finding, the latest blow from the nuclear crisis, is stoking concerns about environmental damage to local marine life, the safety of the nation’s food supply, and the viability of Japan’s iconic seafood industry, which was already struggling following the tsunami.

The two separate samples of tiny fish were caught before Tokyo Electric Power Co., the operator of the crippled Fukushima Daiichi reactors, began the process Monday night of dumping 11,500 tons of contaminated water into the sea, raising fears that the problem could spread significantly in coming days. Tepco has said that, before the authorized unloading of water, there was an uncontrolled leak of an uncertain quantity of highly radioactive water from the reactors into the sea.

(more…)

There’s an acidic remark by Dorothy Parker, the New Yorker wit of the 1920s, that just about sums up our present economic predicament. She was asked if she’d heard the news that President Calvin Coolidge was dead and responded: “How can they tell?”

How can we tell that our long-awaited recovery is alive? Once the pulse began to beat a little more strongly last year it was assumed that we were on course to something like full health. Recently attention has been mostly focused on the various deficits, the debt ceiling, and the budget battles. They’re all matters of concern but all of them will be more menacing if the nascent recovery is stalled or even reversed. Is that happening? Or are we on an ascent at last with 192,000 new jobs added to nonfarm rolls last month?

Three elements offer clues: consumer spending, housing and unemployment. (more…)

Agence France-Presse/Getty ImagesJapanese sailors rescue Hiromitsu Shinkawa Sunday, two days after the 60-year-old was washed to sea on the roof of his Minamisoma home by a tsunami caused by a powerful earthquake. Thousands are feared dead.

Japan’s quake-ravaged northern communities continued to be pinched by food and water shortages Monday, while even cities far from the damage experienced “aftershocks” as the effects from Friday’s disaster rippled through the economy and markets.

Rescue workers struggled to bring supplies to thousands of residents of towns along the northeast coast, hardest hit by the 8.9-magnitude quake and tsunami on Friday. Survivors appeared on television, saying they didn’t have power and were running out of food and water. People atop one building had written a huge Chinese character for “water” on the roof, so it could be seen by rescue helicopters.

Residents are dealing with a lack of rations in Northern Japan, as transportation equipment is hampered in the aftermath of Friday’s quake. WSJ’s Eric Bellman reports from Sendai.

The official death toll continued to climb, reaching around 1,800 by Monday afternoon. National broadcaster NHK reported that more than 450,000 people had moved to temporary shelters in the affected areas. (more…)