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      Blockbuster Jobs Report Backs Up Fed’s Patience as It Waits to Cut Rates

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      Federal Reserve officials left interest rates unchanged this week and signaled that their next move is likely to be a cut — but they also signaled that they are in no hurry to make that change. Friday’s jobs data is likely to support their cautious stance.Employers hired much more rapidly than expected in January, and average hourly earnings climbed 4.5 percent over the year, the fastest pace since September and a reversal after months of cooling.While Jerome H. Powell, the Fed chair, made it clear during his news conference on Wednesday that the central bank is not bent on keeping interest rates high just to slow down the labor market, the report suggested that the economy may not be cooling quite as much as policymakers had expected.And given that continued strength, the Fed is unlikely to feel pressure to cut interest rates at its next meeting in March. While policymakers do not want to hold borrowing costs too high for too long and risk a painful recession, the data suggest that a possible downturn remains very much at bay. Instead of faltering, the job market is booming.The central bank’s policy rate is now set to 5.25 to 5.5 percent, a level high enough that economists think it will cool the economy as it trickles through financial markets and weighs on mortgage, credit card and business borrowing.The Fed’s goal in trying to cool the economy is to rein in inflation, and price increases have been receding: Over the past six months, inflation data have been close to normal.But that has come without much of a broader economic slowdown. While job openings have come down and the housing market slowed in reaction to higher rates, both hiring and consumer spending have remained surprisingly resilient.Mr. Powell suggested this week that the Fed would like to see more evidence that inflation is coming under control before it begins to cut interest rates, and that it was unlikely to have enough data to feel confident in that before March.Markets sharply dialed back the chances of a rate cut at that gathering following Friday’s jobs data.But notably, Mr. Powell said that the Fed is willing to be patient — rather than wary and reactive — as it waits for wage growth to slow to normal levels. Some economists think that today’s relatively quick pace of wage gains could prevent inflation from stabilizing at 2 percent over time, were they to prevail.“I think the labor market by many measures is at or near normal, but not totally back to normal,” Mr. Powell said. “Job openings are not quite back to where they were,” and wage increases “are not quite back to where they were.”He added that wage increases “probably will take a couple of years to get all the way back, and that’s OK.” More

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      Economists Expected a Hiring Slowdown. So Much for That.

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      Job gains remain rapid, unemployment is near a historic low and wage gains are robust nearly two years into the Federal Reserve’s campaign to cool the economy with higher interest rates — an outcome that has surprised policymakers and economic forecasters alike.At this time last year, Fed officials were predicting that unemployment would have spiked to 4.6 percent by now. Instead, it stands at 3.7 percent.Central bankers have for months said that they were hearing anecdotal evidence that the job market had begun to slow down: The Fed’s recent Beige Book summaries of anecdotal reports from around the country have suggested that hiring was slight or even flat in parts of the country. But while hiring cooled somewhat last year, no big fissures have shown through to the actual data.In fact, there are signs that the labor market is still very solid — something Jerome H. Powell, the Fed chair, acknowledged this week.“We’ve had a very strong labor market, and we’ve had inflation coming down,” Mr. Powell said. “So I think whereas a year ago, we were thinking that we needed to see some softening in the economy, that hasn’t been the case. We look at stronger growth — we don’t look at it as a problem.”Mr. Powell and his colleagues have suggested that the labor market has come back into balance as the supply of workers has recovered, something that has been helped along by a rebound in immigration and a recent jump in labor force participation. The number of job openings in the economy has slowly nudged down.But few if any economists expected job gains to remain this robust at a time when higher interest rates were expected to meaningfully weigh down the economy. In fact, many forecasters were predicting an outright recession early last year.The question for the Fed is what it means if the job market not only fails to slow down as anticipated, but actually accelerates again. While one month of data does not make a trend, officials are likely to keep an eye on strong hiring and wage growth.Mr. Powell said this week that robust growth in and of itself would not worry the Fed — or necessarily prevent them from lowering interest rates this year — so long as inflation continued to come down. But central bankers could become more wary if solid wage gains and a booming economy help to keep consumers spending so much that it gives companies the wherewithal to keep raising prices.“If there was a real concern that we were getting a re-acceleration, it might get them to pause a little bit,” said Kathy Bostjancic, the chief economist at Nationwide. But for now, “they’re more apt now to respond to a weakening in the labor market than to continued strength.” More

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      Trump Rages at U.A.W. President After Biden Endorsement

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      A few days after the United Auto Workers endorsed President Biden for re-election, former President Donald J. Trump raged at the union’s leader, Shawn Fain, on Sunday night.Mr. Trump wrote on his social media platform that Mr. Fain “is selling the Automobile Industry right into the big, powerful, hands of China.”He claimed that Mr. Biden’s support for electric vehicles would destroy the American auto industry and send jobs overseas. “Shawn Fain doesn’t understand this or have a clue,” he wrote. “Get rid of this dope & vote for DJT. I will bring the Automobile Industry back to our Country.”The provocation for Mr. Trump’s comments appeared to be a CBS News interview on Sunday in which Mr. Fain said that Mr. Biden had “a history of serving others and serving the working class,” while Mr. Trump had “a history of serving himself and standing for the billionaire class.”Mr. Fain also emphasized Mr. Biden’s decision to meet with striking U.A.W. workers in September, which made him the first sitting president to join a picket line. Mr. Trump has sought to position himself as a champion of the workers’ interests, and he tried to court blue-collar workers with a speech the same week — but at a nonunion factory.Michael Tyler, a spokesman for Mr. Biden’s campaign, said in a statement, “Apparently losing the U.A.W. endorsement to Joe Biden has left Donald Trump’s wounded ego with quite the SCAB.” He argued that the corporate tax changes Mr. Trump signed as president had themselves encouraged companies to move jobs overseas. More

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      Walmart Offers Store Managers Company Stock to Make Them Feel Like ‘Owners’

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      The retailer has been raising wages for store associates. It’s now turning its attention to improving salaries and benefits for their bosses.Walmart, the nation’s largest private employer, is raising salaries and benefits for store managers as it looks for ways to retain them.Walmart said on Monday that managers of its U.S. stores would be eligible for grants of up to $20,000 in company stock every year. The stock will vest over a three-year period, with a percentage vested each quarter.The announcement came a few weeks after Walmart said it would increase the average salary for store managers to $128,000, up from $117,000. The big-box retailer also said bonuses for store managers could reach up to 200 percent of base salary, with a store’s profitability becoming a bigger factor in the calculation.Store managers are crucial in driving sales and profitability within their stores and keeping morale high in a dynamic business. The managers are also seen as an important pipeline for leadership at the company.A store manager at a Walmart Supercenter oversees hundreds of associates who work across a variety of departments, including food, apparel, pharmacies and auto centers. These stores often attract scores of shoppers and bring in millions of dollars in sales each year. At the start of the Covid pandemic, store managers were given even more responsibilities as the company adapted to changing consumer behavior, including managing e-commerce capabilities like in-store pickup for online orders and navigating goods that are out of stock as well as excess inventory.“It’s fair to say that we’re asking them to act like owners and to think like owners,” John Furner, the chief executive of Walmart U.S. who was previously a manager at a company store, said in a briefing with reporters. We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber?  More

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      Economists Predicted a Recession. So Far They’ve Been Wrong.

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      A widely predicted recession never showed up. Now, economists are assessing what the unexpected resilience tells us about the future.The recession America was expecting never showed up.Many economists spent early 2023 predicting a painful downturn, a view so widely held that some commentators started to treat it as a given. Inflation had spiked to the highest level in decades, and a range of forecasters thought that it would take a drop in demand and a prolonged jump in unemployment to wrestle it down.Instead, the economy grew 3.1 percent last year, up from less than 1 percent in 2022 and faster than the average for the five years leading up to the pandemic. Inflation has retreated substantially. Unemployment remains at historic lows and consumers continue to spend even with Federal Reserve interest rates at a 22-year high.The divide between doomsday predictions and the heyday reality is forcing a reckoning on Wall Street and in academia. Why did economists get so much wrong, and what can policymakers learn from those mistakes as they try to anticipate what might come next?It’s early days to draw firm conclusions. The economy could still slow down as two years of Fed rate increases start to add up. But what is clear is that old models of how growth and inflation relate did not serve as accurate guides. Bad luck drove more of the initial burst of inflation than some economists appreciated. Good luck helped to lower it again, and other surprises have hit along the way.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber?  More

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      Journalists at New York Daily News Walk Off Job for a Day

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      Newsroom workers at The Daily News Union, which formed in 2021, are in negotiations for their first contract.Journalists at The New York Daily News walked off the job on Thursday for the first time in more than three decades.Newsroom workers at The Daily News Union, which formed in 2021, are in negotiations for their first contract. The union called a one-day work stoppage to protest staffing cuts, as well as a new policy that requires workers to get advance approval for overtime.The Daily News, founded in 1919, was once a formidable city tabloid that raced for scoops against its rival, The New York Post, and was one of the largest newspapers in the country by circulation. But in recent years, the paper has been hollowed out by ownership changes and staffing cuts as it struggled against ever-declining circulation and dwindling revenue.In 2021, its parent company, Tribune Publishing, was purchased by Alden Global Capital, an investment firm that has bought up hundreds of newspapers across the country, acquiring a reputation along the way for making deep cuts to newsrooms.About a third of union members have left The Daily News since spring 2022, with membership now at 54 people, according to the union.“In reality, we’re being crushed for cash,” Michael Gartland, a Daily News reporter and union steward, said in a statement. “As a result, staff is diminished, which means our ability to cover the city is diminished.”A spokeswoman for Alden Global Capital did not immediately respond to a request for comment.The last work stoppage at The Daily News was a five-month strike in 1990 and 1991.On Thursday, Daily News journalists plan to picket outside a co-working space that now serves at their temporary office. The Daily News permanently closed its newsroom in Lower Manhattan in 2020. More

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      German Rail Workers Strike Over Pay and Hours

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      The walkout, one of the most significant to hit the country’s train service in years, is expected to affect long-distance and commuter travel nationwide.Passenger train drivers in Germany walked off the job on Wednesday and vowed not to return for six days in a strike over working conditions and pay that is expected to halt most long-distance and commuter rail travel across the country.The strike, one of the most significant on the national rail service in years, was announced on Monday by Claus Weselsky, the chairman of the G.D.L., a union that represents German train drivers. Mr. Weselsky, in a terse news conference, said that negotiations with rail bosses had broken down and accused the chief negotiator of the national rail company, Deutsche Bahn, of “trickery and deception,” especially with regard to the latest offer.The rail strike, the fourth in two months, comes amid a risk of reduced funding for the rail system after a court decision that stopped the government from repurposing money from a coronavirus pandemic fund for green projects. It also comes amid a trend of worsening performance of German trains. More broadly, there is general dissatisfaction with the administration of Chancellor Olaf Scholz, which is plagued by infighting and seen by some as being removed from the problems facing regular Germans.This time, the walkout is scheduled to run through the weekend and will therefore affect more leisure travelers than the recent previous strikes, which have taken place during the week and lasted no longer than three days. Drivers of cargo trains started the strike on Tuesday evening.About 7.3 million people ride trains in Germany operated by Deutsche Bahn every day, and the number is growing as more travelers switch to rail amid concerns about climate change. Deutsche Bahn trains also move roughly 600,000 tonnes of freight each day, according to federal data.Deutsche Bahn tried to obtain an emergency injunction before a three-day walkout this month, but a court in Frankfurt found that the union had the right to strike. The company said on Monday that it would not go back to the courts to try to force employees back to work.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber?  More

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      Brainard Pitches Biden’s Economic Efforts In Hard-Hit Regions

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      Lael Brainard, the National Economic Council director, contends the administration deserves credit for recent gains in areas battered by past job losses.President Biden’s top economic adviser will argue on Monday that the administration is engineering a revival of economically disadvantaged communities across the nation, largely relying on anecdotal evidence and patterns of new federal spending in places like Eastern Pennsylvania and Milwaukee, Wis.Lael Brainard, who heads Mr. Biden’s National Economic Council, will use a speech to the Brookings Institution in Washington to lay out a detailed blueprint of the administration’s efforts to bring jobs, investment and innovation to areas hobbled by the loss of jobs and industries.Those “place-based” policies are often directed at former industrial strongholds that were battered by automation and foreign competition. They are a cornerstone of Mr. Biden’s economic agenda across several major pieces of legislation he has signed and a big part of his re-election pitch. Whether voters perceive them as successful could affect Mr. Biden’s chances in November, particularly in industrial swing states like Pennsylvania and Wisconsin.Mr. Biden “came to office determined to invest in all of America, to leave no community behind. It is working,” Ms. Brainard plans to say, according to a copy of her prepared remarks. “Communities that had been left behind are making a comeback.”Place-based efforts were included in several laws that Mr. Biden signed, including those aimed at infrastructure, climate change and clean-energy production and semiconductors and other advanced manufacturing, all of which Ms. Brainard plans to spotlight on Monday afternoon. The Commerce and Transportation Departments have launched pilot programs to support neighborhoods that have historically been cut off from opportunity.Ms. Brainard will make case studies of two areas in particular: Allentown, Pa., and Milwaukee, both of which Mr. Biden visited recently.After his Allentown visit, Mr. Biden told reporters that he was “really reassured that what we’ve done has had an impact not just here in Eastern Pennsylvania and — but — in the Northeast, but throughout the country. And we’re going to do more.”Ms. Brainard does not plan to offer comprehensive national statistics to support the administration’s revival claims, other than a Treasury Department analysis that finds low-emission energy investments spurred by Mr. Biden’s climate law have disproportionately boosted lower-income areas and communities that have been historically reliant on fossil fuels. Ms. Brainard will say that the Allentown area, for example, has experienced a “boom” in job creation and small business formation under Mr. Biden, after listing investments the administration has steered to the region’s roads, airports and more. But she does not explicitly link that spending and those trends.Administration officials acknowledge that many of Mr. Biden’s programs to help hard-hit communities are still in their infancy, and that it may be difficult to assess their effects yet. But Ms. Brainard, in an interview ahead of the speech, said it was fair for Mr. Biden to claim credit for gains in areas like Allentown and Milwaukee.“In many left-behind communities, unemployment rates have been well above the national average for years,” she said. “And what you’re seeing in those communities now is that unemployment rates have actually moved down below 4 percent, which are, in some cases, a level they haven’t seen in a very long time.”The unemployment rate in the Allentown area was 3.9 percent in November, according to the Labor Department. That’s down from nearly 9.5 percent after the 2008 financial crisis and 4.2 percent on the eve of the pandemic in February 2020, when Donald J. Trump was president. In November, unemployment was 3.1 percent in the Milwaukee area, the same rate as it was in February 2020, and down from 10 percent after the 2008 recession.Mr. Trump has long promised on the campaign trail and in the White House to revitalize hard-hit American communities. He is making similar promises as he attempts to defeat Mr. Biden this fall, a counterpoint that looms over the president’s place-based effort.While Ms. Brainard will not mention Mr. Trump by name, she plans to cast Mr. Biden’s place-based policies as the antidote to what the administration calls the failed promises of “trickle-down economics,” including those practiced by the previous administration. That term has long been associated with Republican tax policies. By cutting rates on high earners and corporations, conservative economists have long contended, policymakers would stoke fast economic growth that would lift incomes for all workers.The Biden administration has attempted to broaden that trickle-down phrase to include the outsourcing of jobs and factories to foreign shores.Mr. Trump’s signature 2017 tax-cut law included deep cuts to corporate and individual tax rates, but it also featured a place-based program: a tax-based incentive called Opportunity Zones that sought to entice investors to put money into designated lower-income areas. The program has continued under Mr. Biden, even as his aides have debated whether to attempt to change it. Asked whether the administration judged that program to be succeeding, Ms. Brainard did not answer directly.“I’ve been very focused on making sure the president’s policies are implemented and are having the effect of lifting up these communities,” Ms. Brainard said. “That’s been my focus.” More