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      Will A.I. Boost Productivity? Companies Sure Hope So.

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      Wendy’s ordering kiosks. Ben & Jerry’s grocery store freezers. Abercrombie & Fitch’s marketing. Many mainstays of the American customer experience are increasingly powered by artificial intelligence.The question is whether the technology will actually make companies more efficient.Rapid productivity improvement is the dream for both companies and economic policymakers. If output per hour holds steady, firms must either sacrifice profits or raise prices to pay for wage increases or investment projects. But when firms figure out how to produce more per working hour, it means that they can maintain or expand profits even as they pay or invest more. Economies experiencing productivity booms can experience rapid wage gains and quick growth without as much risk of rapid inflation.But many economists and officials seem dubious that A.I. — especially generative A.I., which is still in its infancy — has spread enough to show up in productivity data already.Jerome H. Powell, the Federal Reserve chair, recently suggested that A.I. “may” have the potential to increase productivity growth, “but probably not in the short run.” John C. Williams, president of the New York Fed, has made similar remarks, specifically citing the work of the Northwestern University economist Robert Gordon.Mr. Gordon has argued that new technologies in recent years, while important, have probably not been transformative enough to give a lasting lift to productivity growth.“The enthusiasm about large language models and ChatGPT has gone a bit overboard,” he said in an interview.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? Log in.Want all of The Times? Subscribe. More

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      Buttigieg Calls on Congress for More Money to Collapsed Baltimore Bridge

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      Mr. Buttigieg, the transportation secretary, was joined by the Baltimore mayor and Maryland governor in describing the collapse as a matter of national importance.Transportation Secretary Pete Buttigieg and Maryland Democrats on Sunday urged Congress to authorize additional federal dollars needed to rebuild the Francis Scott Key Bridge in Baltimore after it collapsed last week.“I hope and expect this, too, will be a bipartisan priority,” Mr. Buttigieg said on CBS News’s “Face the Nation.” He cited the case of a Minnesota bridge whose $250 million reconstruction plan was approved by Congress in a unanimous vote two days after its collapse in August 2007, and added that “the pitch is, your district could be next, and this has historically been bipartisan.”The Department of Transportation announced on Thursday that it had allocated $60 million in emergency federal highway funding toward rebuilding the bridge. That initial batch of money, which the department called “a down payment,” is unlikely to cover the full cost of construction that experts say could require hundreds of millions of dollars.The push for additional federal funding reflects officials’ belief that a prolonged disruption to the Port of Baltimore would cause ripple effects across the U.S. economy. The harbor has one of the largest facilities in the nation for wheeled cargo such as cars and trucks, and it serves as a key logistics hub for the auto industry for both imports and exports.“People have to remember: This is not a Baltimore catastrophe, not a Maryland catastrophe. This is a national economic catastrophe,” Gov. Wes Moore of Maryland, a Democrat, said on Sunday on CNN’s “State of the Union.” “We need to make sure we’re actually moving quickly to get the American economy going again because the Port of Baltimore is instrumental in our larger economic growth.”Mayor Brandon Scott of Baltimore, also a Democrat, echoed Mr. Moore’s argument that the bridge collapse — which has shut down the harbor — is not a local tragedy but a choke on the U.S. economy.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? Log in.Want all of The Times? Subscribe. More

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      Why It’s So Expensive to Live in Phoenix

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      In the five years since they began their life together in the desert sprawl of greater Phoenix, Devon Lawrence and Eren Mendoza have bounced from one itinerant home to another.They have camped alongside a freeway off-ramp, using a gas station sink as their bath and a plastic tarp as their refuge from the relentless sun. They have slept on an air mattress in a friend’s living room. For the last two years, they have crammed into rooms at motels, paying as much as $650 a week.Ms. Mendoza and Mr. Lawrence are both 32, and both have jobs. She works at a supermarket deli counter. He stocks shelves at a convenience store. Together, they earn about $3,500 a month. Yet they have been stymied in their reach for a modest dream: They cannot find an affordable home in a safe neighborhood in Phoenix, where rents have roughly doubled over the last decade.“These prices are just wild,” Ms. Mendoza said. “It’s pretty much all anybody talks about. The fact that a dual income can’t support us is insanity.”The impossible arithmetic of housing is a potent source of economic anxiety in Phoenix, and in many major American cities — a reality that could influence control of the White House.Devon Lawrence and Eren Mendoza earn about $3,500 a month together, but they have been unable to find affordable housing in Phoenix.Cassidy Araiza for The New York TimesWe 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? Log in.Want all of The Times? Subscribe. More

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      Fine, Call It a Comeback

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      If the Joe Biden who showed up to deliver the State of the Union address last week is the Joe Biden who shows up for the rest of the campaign, you’re not going to have any more of those weak-kneed pundits suggesting he’s not up to running for re-election. Here’s hoping he does.But that’s not the only thing from Thursday night that I hope Biden holds onto. So far, the Biden team has been more sure-footed attacking Donald Trump’s threat to democracy than it has been defending Biden’s incumbency. That reflects a strange problem they face. By virtually any measure save food prices, Biden is presiding over a strong economy — stronger, by far, than most peer countries. As Noah Smith has noted, the Biden economy looks far better than Ronald Reagan’s “Morning in America”: Unemployment is lower, inflation is lower, interest rates are lower, stock market returns are better.But Americans feel otherwise. The most recent Times/Siena poll found that 74 percent of registered voters rated the economy either “poor” or “fair.” By a 15-point margin, voters said Trump’s policies helped them personally. By a 25-point margin, they said Biden’s policies hurt them personally.Voters seem to remember the tail end of Trump’s third year, when the economy was strong, and not the utter calamity of his fourth year, when his Covid response was chaos and the economy was frozen. In November of 2020, unemployment was 6.7 percent and Trump had just turned a White House celebration into a superspreader event. Republicans who say Americans should ask whether they’re better off than they were four years ago should be careful what they wish for.But Biden is in a tough spot. You don’t want to run for re-election telling voters they’re wrong and the economy is actually great. Nor can you run for re-election telling voters that they’re right and the economy is bad. Biden has often seemed a little unsure what to say about his own record. Thursday night, he figured it out.“I came to office determined to get us through one of the toughest periods in the nation’s history,” Biden said. “We have. It doesn’t make news, news — in a thousand cities and towns, the American people are writing the greatest comeback story never told.”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? Log in.Want all of The Times? Subscribe. More

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      Why It’s Hard to Explain Joe Biden’s Unpopularity

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      Joe Biden is one of the most unpopular presidents in modern American history. In Gallup polling, his approval ratings are lower than those of any president embarking on a re-election campaign, from Dwight Eisenhower to Donald Trump.Yet an air of mystery hangs around his lousy polling numbers. As The Washington Free Beacon’s Joe Simonson noted recently, just surfing around most American media and pop culture, you probably wouldn’t realize that Biden’s job approval ratings are quite so historically terrible, worse by far than Trump’s at the same point in his first term.Apart from anxiety about his age, there isn’t a chattering-class consensus or common shorthand for why his presidency is such a political flop. Which is why, perhaps, there was a rush to declare his State of the Union address a rip-roaring success, as though all Biden needs to do to right things is to talk loudly through more than an hour of prepared remarks.When things went south for other recent chief executives, there was usually a clearer theory of what was happening. Trump’s unpopularity was understood to reflect his chaos and craziness and authoritarian forays. The story of George W. Bush’s descending polls was all about Iraq and Hurricane Katrina. When Barack Obama was at his polling nadir, most observers blamed the unemployment rate and the Obamacare backlash, and when Bill Clinton struggled through his first two years, there was a clear media narrative about his lack of discipline and White House scandals.With Biden, it has been different. Attempts to reduce his struggles to the inflation rate are usually met with vehement rebuttals, there’s a strong market for “bad vibes” explanations of his troubles, a lot of blame gets placed on partisan polarization even though Biden won a clear popular majority not so long ago, and even the age issue has taken center stage only in the past few months.Some of this mystification reflects liberal media bias accentuated by contemporary conditions — an unwillingness to look closely at issues like immigration and the border, a hesitation to speak ill of a president who’s the only bulwark against Trumpism.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? Log in.Want all of The Times? Subscribe. More

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      Fed Chair Powell Still Expects to Cut Rates This Year, but Not Yet

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      Jerome H. Powell, chair of the Federal Reserve, said policymakers still expect to lower rates in 2024 — but the timing hinges on data.Jerome H. Powell, the chair of the Federal Reserve, said on Wednesday that he thinks the central bank will begin to lower borrowing costs in 2024 but that policymakers still needed to gain “greater confidence” that inflation was conquered before making a move.“We believe that our policy rate is likely at its peak for this tightening cycle,” Mr. Powell said in remarks prepared for testimony before the House Financial Services Committee. “If the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year.”The Fed next meets on March 19-20, but few investors expect officials to lower interest rates at that gathering. Markets see the Fed’s June meeting as a more likely candidate for the first rate cut, and are betting that central bankers could lower borrowing costs three or four times by the end of the year.The Fed chair warned against cutting rates too early — before inflation is sufficiently snuffed out — noting that “reducing policy restraint too soon or too much could result in a reversal of progress we have seen in inflation and ultimately require even tighter policy.”He also acknowledged that there could be risks to waiting too long, adding that “reducing policy restraint too late or too little could unduly weaken economic activity and employment.”Mr. Powell and his colleagues are trying to strike a delicate balance as they figure out their next policy steps. Policymakers raised interest rates rapidly between March 2022 and July 2023, lifting them to a range of 5.25 to 5.5 percent, where they currently sit. That has made mortgages, business loans and other types of borrowing more expensive, helping to tap the brakes on an economy that otherwise retains substantial momentum.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? Log in.Want all of The Times? Subscribe. More

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      Inflation Fears Stalk Presidential Politics and the Markets

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      Lawmakers on Capitol Hill are set to grill Jay Powell, the Fed chair, about interest rates and the economy, topics that are top of mind for voters and investors alike.Jay Powell, the Fed chair, will begin two days of testimony on Capitol Hill with inflation a hot topic for voters and markets.Richard Drew/Associated PressInflationary pressure and presidential politics President Biden and Donald Trump dominated Super Tuesday, setting the stage for a rematch of the 2020 election. One topic that’s high on the agenda for voters: Inflation.That means all eyes will be on Jay Powell, as the Fed chair makes a two-day appearance on Capitol Hill this week, for any sign of what’s next on rate cuts.Inflation is kryptonite for any politician, and especially for Biden. Trump again pounded the president on high prices, an issue that’s lifting the Republican in polls even as a range of indicators show that the economy is performing strongly.(The White House is putting the blame on corporations that “try to rip off Americans.” Watch for that theme at Thursday’s State of the Union address.)Powell will appear before the House on Wednesday and before the Senate on Thursday. Data published in recent weeks shows that jobs are plentiful, wages are rising and consumers are still spending. Analysts have upgraded their economic forecasts, raising hopes that a soft landing is likely.But market pros see warning signs. Concerns remain that inflation will stick above the Fed’s 2 percent target, forcing the central bank to put the brakes on interest rate cuts that traders expect to begin in June. The futures market on Wednesday is forecasting three to four cuts this year — down from nearly seven just weeks ago — and the more cautious sentiment has helped drag the S&P 500 lower this week.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? Log in.Want all of The Times? Subscribe. More

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      Trump’s Tax Cut Fueled Investment but Did Not Pay for Itself, Study Finds

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      The most detailed research yet on corporate response to the 2017 Republican tax law shows modest gains for workers and high cost to the federal debt.The corporate tax cuts that President Donald J. Trump signed into law in 2017 have boosted investment in the U.S. economy and delivered a modest pay bump for workers, according to the most rigorous and detailed study yet of the law’s effects.Those benefits are less than Republicans promised, though, and they have come at a high cost to the federal budget. The corporate tax cuts came nowhere close to paying for themselves, as conservatives insisted they would. Instead, they are adding more than $100 billion a year to America’s $34 trillion-and-growing national debt, according to the quartet of researchers from Princeton University, the University of Chicago, Harvard University and the Treasury Department.The researchers found the cuts delivered wage gains that were “an order of magnitude below” what Trump officials predicted: about $750 per worker per year on average over the long run, compared to promises of $4,000 to $9,000 per worker.The study is the first to use vast data from corporate tax filings to draw conclusions about the Tax Cuts and Jobs Act, which passed with only Republican support. Its findings could help shape debate on renewing parts of the law that are set to expire or have begun to phase out.That includes a key provision targeting investment, which the authors identify as the most cost-effective corporate cut. That benefit, which allowed companies to immediately deduct investment spending from their income taxes, would be renewed as part of a bipartisan tax bill that passed the House in January.It also challenges narratives about the bill on both sides of the aisle. Democrats have claimed the tax cuts only rewarded shareholders and did not help the economy. Republicans have called them a cost-free boon to the middle class. Both appear to have been wrong.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? Log in.Want all of The Times? Subscribe. More