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☆ Email ‘Mistake’ on Inflation Data Prompts Questions on What Is Shared
▼ + stars: | 2024-03-19 | by ( Ben Casselman | Jeanna Smialek | ) www.nytimes.com time to read: +1 min

One afternoon in late February, an employee at the Bureau of Labor Statistics sent an email about an obscure detail in the way the government calculates inflation — and set off an unlikely firestorm. Economists on Wall Street had spent two weeks puzzling over an unexpected jump in housing costs in the Consumer Price Index. Several had contacted the Bureau of Labor Statistics, which produces the numbers, to inquire. Now, an economist inside the bureau thought he had solved the mystery. In an email addressed to “Super Users,” the economist explained a technical change in the calculation of the housing figures.

Organizations: Bureau of Labor Statistics, Wall, of Labor Statistics, Federal Reserve

☆ Fed Meets Amid Worries That Inflation Progress Might Stall
▼ + stars: | 2024-03-19 | by ( Jeanna Smialek | ) www.nytimes.com time to read: +1 min

Slowing America’s rapid inflation has been an unexpectedly painless process so far. That flatline is stoking questions about whether the final phase in fighting inflation could prove more difficult for the Federal Reserve. Fed officials will have a chance to respond to the latest data on Wednesday, when they conclude a two-day policy meeting. The Fed’s most recent economic estimates, released in December, suggested that Fed officials would make three quarter-point rate cuts by the end of 2024. Some economists think it’s possible that officials could dial back their rate cut expectations, projecting just two moves this year.

Organizations: Federal Reserve, Fed

☆ Japan’s Labor Market Has a Lesson for the Fed: Women Can Surprise You
▼ + stars: | 2024-03-19 | by ( Jeanna Smialek | ) www.nytimes.com time to read: +1 min

But there’s another, longer-running trend happening in the Japanese economy that could prove interesting for American policymakers: Female employment has been steadily rising. Working-age Japanese women have been joining the labor market for years, a trend that has continued strongly in recent months as a tight labor market prods companies to work to attract new employees. The jump in female participation has happened partly by design. Since about 2013, the Japanese government has tried to make both public policies and corporate culture more friendly to women in the work force. The goal was to attract a new source of talent at a time when the world’s fourth-largest economy faces an aging and shrinking labor market.

Organizations: Bank of Japan

☆ Should China Own TikTok?
▼ + stars: | 2024-03-13 | by ( David Leonhardt | ) www.nytimes.com time to read: +2 min

After Hamas’s Oct. 7 terrorist attack, TikTok flooded users with videos expressing extreme positions from both sides of the Israeli-Palestinian conflict, tilted toward the Palestinian side, a Wall Street Journal analysis found. On Monday, the top U.S. intelligence official released a report saying that the Chinese government had used TikTok to promote its propaganda to Americans and to influence the 2022 midterm elections. TikTok is also owned by a company, ByteDance, that’s based in a country that is America’s biggest rival for global power: China. ByteDance executives say that they operate separately from China’s government and that they regularly remove misleading content from TikTok. The most likely scenario, experts say, is that officials aligned with the Chinese government shape TikTok’s algorithm to influence what content Americans see.

Persons: Jeanna Smialek, Jim Tankersley, “, Sapna Maheshwari, China’s, Xi Jinping, Xi Organizations: Rutgers University, Rutgers, Communist Party, Soviet NBC Locations: U.S, Tibet, Hong Kong, United States, China, Soviet

☆ Inflation Ticked Up Last Month, Backing the Fed’s Caution on Rate Cuts
▼ + stars: | 2024-03-12 | by ( Jeanna Smialek | ) www.nytimes.com time to read: +1 min

Inflation sped up slightly in February on an overall basis and a closely watched measure of underlying price increases was firmer than economists had expected. The Consumer Price Index climbed 3.2 percent last month from a year earlier, up from 3.1 percent in January. That’s down notably from a 9.1 percent high in 2022, but it is still quicker than the roughly 2 percent that was normal before the pandemic. After stripping out volatile food and fuel costs for a better sense of the underlying trend, inflation came in at 3.8 percent, slightly faster than economists had forecast. And on a monthly basis, core inflation climbed slightly more quickly than anticipated as airline fares and car insurance prices increased, even as one closely watched housing measure climbed less rapidly.

Persons: That’s Organizations: Federal

☆ Insurance Costs Are Pushing Up Overall Inflation
▼ + stars: | 2024-03-12 | by ( Jeanna Smialek | More About Jeanna Smialek | ) www.nytimes.com time to read: +1 min

It is costing Americans more to protect against disaster, a development that is pushing up official inflation figures. Various kinds of insurance — including car, medical and property protection — are costing more, at least as official inflation figures measure them. “Insurance of various different kinds — housing insurance, but also automobile insurance, and things like that — that’s been a significant source of inflation over the last few years,” Jerome H. Powell, the Federal Reserve chair, said during congressional testimony last week. “And it’s to do with a million different factors.”Vehicle insurance is the one adding notably to overall inflation, said Omair Sharif, founder of the research firm Inflation Insights. Part of the increase in car insurance comes from the fact that parts and replacement vehicles have become a lot more expensive over recent years, and that is slowly feeding through to insurance premiums, he said.

Persons: ” Jerome H, Powell, Omair Sharif Organizations: “ Insurance, Federal Reserve

☆ February Inflation Report Consumer Price Rises Likely Held Steady
▼ + stars: | 2024-03-12 | by ( Jeanna Smialek | ) www.nytimes.com time to read: +3 min

PinnedThe Consumer Price Index inflation report set for release on Tuesday morning could be a big news event for the Federal Reserve and many in markets. Overall inflation is expected to hold steady at 3.1 percent on an annual basis. In particular, economists are likely to keep an eye on housing costs and other services’ prices in the measure. Fed officials have been debating how long they need to leave rates at their current level, about 5.3 percent. And Fed officials want to avoid lowering interest rates too early, only to find out that inflation is not fully quashed.

Persons: ” Jerome H, Powell, we’re, ”, Omair Sharif Organizations: Federal Reserve, Fed

☆ The jobs report comes as the Fed considers the timing of interest rate cuts.
▼ + stars: | 2024-03-08 | by ( Jeanna Smialek | More About Jeanna Smialek | ) www.nytimes.com time to read: +1 min

The Federal Reserve is considering when and how much to cut interest rates, and the employment report on Friday will give policymakers an up-to-date hint at how the economy is evolving ahead of their next policy meeting. Fed officials meet on March 19-20, and they are widely expected to leave interest rates unchanged at that gathering. “We’re waiting to become more confident that inflation is moving sustainably to 2 percent,” Mr. Powell told lawmakers on Thursday. If job growth is strong and the labor market is so robust that wages rise quickly, that could keep price increases higher for longer as companies try to cover their costs. On the other hand, if the job market begins to slow sharply, that could nudge Fed officials toward earlier interest rate cuts.

Persons: Jerome H, Powell, “, Mr, we’re Organizations: Federal

☆ Fed Chair Powell Still Expects to Cut Rates This Year, but Not Yet
▼ + stars: | 2024-03-06 | by ( Jeanna Smialek | ) www.nytimes.com time to read: +1 min

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.”

Persons: Jerome H, Powell, Mr, ” Organizations: Federal Reserve, Financial Services, Fed

☆ Bank Runs Spooked Regulators. Now a Clampdown Is Coming.
▼ + stars: | 2024-03-05 | by ( Jeanna Smialek | Rob Copeland | ) www.nytimes.com time to read: +1 min

One year after a series of bank runs threatened the financial system, government officials are preparing to unveil a regulatory response aimed at preventing future meltdowns. After months of floating fixes at conferences and in quiet conversations with bank executives, the Federal Reserve and other regulators could unveil new rules this spring. The interagency clampdown would come on top of another set of proposed and potentially costly regulations that have caused tension between big banks and their regulators. Taken together, the proposed rules could further rankle the industry. The goal of the new policies would be to prevent the kind of crushing problems and bank runs that toppled Silicon Valley Bank and a series of other regional lenders last spring.

Organizations: Federal Reserve, Bank Locations: Silicon

☆ It’s Me, Hi, I’m the Problem. I’m 33.
▼ + stars: | 2024-03-02 | by ( Jeanna Smialek | ) www.nytimes.com time to read: +1 min

I have covered economics for 11 years now, and in that time, I have come to the realization that I am a statistic. Every time I make a major life choice, I promptly watch it become the thing that everyone is doing that year. When I moved to a big coastal city after graduation, so did a huge crowd of people: It was the age of millennial urbanization. My partner and I bought a house in 2021, along with (seemingly and actually) a huge chunk of the rest of the country. What I am is 32, about to be 33 in a few weeks.

Organizations: Craigslist Locations: America

☆ Shrinkflation 101: The Economics of Smaller Groceries
▼ + stars: | 2024-03-01 | by ( Jeanna Smialek | ) www.nytimes.com time to read: +1 min

Companies are downsizing products without downsizing prices, and consumer posts from Reddit to TikTok to the New York Times comments section drip with indignation at the trend, widely known as “shrinkflation.”The practice isn’t new. President Biden tapped into the angst in a recent video. (“What makes me the most angry is that ice cream cartons have actually shrunk in size, but not in price,” he lamented.) One Canadian chain unveiled a growflation pizza. (“In pizza terms,” the company’s news release quipped, “a larger slice of the pie.”)

Persons: Sellers, Biden, ” Organizations: New York Times Locations: Reddit, TikTok

☆ Trump and Inflation
▼ + stars: | 2024-02-27 | by ( Jeanna Smialek | ) www.nytimes.com time to read: +1 min

If there is a simple political truth, it’s that voters hate inflation. But Trump also criticizes high interest rates — the Federal Reserve’s key tool for lowering inflation. And the second-term agenda he is proposing contains few policies that economists believe would reduce inflation. Trump has also pledged to deport many undocumented immigrants, which could cause labor shortages that lift prices on food and other items. And while Trump has not laid out his plans in sufficient detail for economists to judge how his agenda as a whole would affect inflation, there’s little to suggest that his policies would stamp out price increases.

Persons: Donald Trump’s, Biden, Trump, ”, Michael Strain Organizations: American Enterprise Institute

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Persons: ’, Haley Organizations: Voters, Trump Locations: South Carolina

☆ Productivity Is Up, Along With Hopes It Will Fuel the Economy
▼ + stars: | 2024-02-21 | by ( Jeanna Smialek | ) www.nytimes.com time to read: +1 min

Thirty years ago, officials at the Federal Reserve were hotly debating whether the economy could continue to chug along so vigorously without spurring a pickup in inflation. And back in 1994, it turned out that it could, thanks to one key ingredient: productivity. Now, official productivity data are showing a big pickup for the first time in years. If the answer is yes, it would have huge implications for the U.S. economy. And a steady pickup in productivity could allow the economy to take off in a healthy way.

Organizations: Base, Federal Reserve Locations: U.S

Former President Donald J. Trump, the front-runner for the Republican nomination, has repeatedly attacked central elements of the Inflation Reduction Act, including tax credits for purchasing electric vehicles. “Otherwise it’s all going to be on the chopping block.”The Inflation Reduction Act contains various tax credits and other subsidies to incentivize companies to deploy more clean energy projects. It also includes tax breaks for consumers to offset the cost of electric vehicles, heat pumps and other energy-efficient appliances. That could cut the number of eligible vehicles, potentially hindering progress toward the Biden administration’s goal of having electric vehicles make up half of new car sales by 2030. The estimated cost of the Inflation Reduction Act’s energy incentives has effectively doubled since it passed, largely because forecasters believe the legislation will be more popular than they originally expected.

Persons: Biden, Donald J, Trump, “ We’ve, Frank Pallone Jr, Thomas Pyle, ’, Pyle, Kevin Book, Sean Rayford, ” Mr, John Ketchum, Ketchum, “ It’s, Mr, Sasha Mackler, David Carroll, we’ve, Carroll, T.J . Kirkpatrick, ” Michael Kikukawa, Lori Esposito Murray, Ms, Murray, Jeanna Smialek Organizations: Republican, Democratic, Company, Biden, House Energy, Commerce, American Energy Alliance, ClearView Energy Partners, The New York Times, NextEra Energy, Republicans, Center, Engie, White, Economic Development, Conference Board, “ Locations: States, China, New Hampshire, America, Indiana, Texas, Irvine , Calif

☆ Will Food Prices Stop Rising Quickly? Many Companies Say Yes.
▼ + stars: | 2024-02-20 | by ( Jeanna Smialek | Jason Karaian | ) www.nytimes.com time to read: +1 min

Few prices are as visible to Americans as the ones they encounter at the grocery store or drive-through window, which is why two years of rapid food inflation have been a major drag for U.S. households and the Biden administration. But now, the trend in grocery and restaurant inflation appears to be on the cusp of changing. After months of rapid increase, the cost of food at home climbed at a notably slower clip in January. And from packaged food providers to restaurant chains, companies across the food business are reporting that they are no longer raising prices as steeply. In others, it’s because the prices that companies pay for inputs like packaging and labor are no longer rising as sharply.

Persons: Biden Organizations: Shoppers

☆ A Key Inflation Gauge Came In Hotter Than Expected Last Month
▼ + stars: | 2024-02-13 | by ( Jeanna Smialek | ) www.nytimes.com time to read: +1 min

Inflation cooled less than expected in January and showed worrying staying power after volatile food and fuel costs were stripped out — a reminder that bringing price increases under control remains a fraught, bumpy process. But after stripping out food and fuel, which bounce around in price from month to month, “core” prices held roughly steady on an annual basis, climbing 3.9 percent from a year earlier. American consumers, the White House and Federal Reserve officials had welcomed a recent moderation in inflation. Central bankers in particular are likely to take the fresh report as a reminder that they need to remain cautious. Policymakers have been careful to avoid declaring victory over inflation, insisting that they needed more evidence that it was coming down sustainably.

Organizations: White, Federal Reserve

In Mo i Rana, a small Norwegian industrial town on the cusp of the Arctic Circle, a cavernous gray factory sits empty and unfinished in the snowy twilight — a monument to unfulfilled economic hope. The electric battery company Freyr was partway through constructing this hulking facility when the Biden administration’s sweeping climate bill passed in 2022. Perhaps the most significant climate legislation in history, the Inflation Reduction Act promised an estimated $369 billion in tax breaks and grants for clean energy technology over the next decade. Its incentives for battery production within the United States were so generous that they eventually helped prod Freyr to pause its Norway facility and focus on setting up shop in Georgia. Its pivot was symbolic of a larger global tug of war as countries vie for the firms and technologies that will shape the future of energy.

Persons: Mo i Rana Organizations: Biden Locations: Mo, Norwegian, United States, Norway, Georgia

☆ A key inflation gauge came in hotter than expected last month.
▼ + stars: | 2024-02-13 | by ( Jeanna Smialek | ) www.nytimes.com time to read: +1 min

Inflation cooled less than expected in January and showed worrying staying power after stripping out volatile food and fuel costs — a reminder that bringing price increases under control remains a bumpy process. That figure is down from the latest peak of 9.1 percent in the summer of 2022. But after stripping out food and fuel, which bounce around in price from month to month, “core” prices held roughly steady on an annual basis, climbing 3.9 percent from a year earlier. Federal Reserve officials had welcomed a recent moderation in inflation, and will likely take the fresh report as an affirmation that they need to remain cautious. Policymakers have been careful to avoid declaring victory over inflation, insisting that they need more evidence that it is coming down sustainably.

Organizations: Federal

☆ January Inflation Report Consumer Price Rises Expected to Cool
▼ + stars: | 2024-02-13 | by ( Jeanna Smialek | ) www.nytimes.com time to read: +3 min

The Consumer Price Index inflation measure is set for release at 8:30 a.m. Eastern. Economists expect that prices overall climbed 2.9 percent from a year earlier, the lowest reading in nearly three years. After stripping out food and fuel, which bounce around in price from month to month, a “core” price measure probably climbed 3.7 percent, slower than 3.9 percent in December. But as price increases ease up, people are beginning to report sunnier economic outlooks. More recently, price increases for key services have also begun to moderate.

Persons: Biden, Jerome H, Powell, “, ”, Goldman Sachs Organizations: Federal Reserve

☆ ‘Zombie Offices’ Spell Trouble for Some Banks
▼ + stars: | 2024-02-08 | by ( Jeanna Smialek | ) www.nytimes.com time to read: +1 min

Graceful art-deco buildings towering above Chicago’s key business district report occupancy rates as low as 17 percent. Office buildings remain stuck in a slow-burning crisis. Prices on even higher-quality office properties have tumbled by 35 percent from their early 2022 peak, based on data from the real estate analytics firm Green Street. Those forces have put the banks that hold a big chunk of America’s commercial real estate debt in the hot seat — and analysts and even regulators have said that the reckoning has yet to fully take hold. It is whether they will prove to be a slow bleed or a panic-inducing wave.

Organizations: Trepp, Washington , D.C, Employees Locations: Denver, Los Angeles, San Francisco, Washington ,

☆ Fed Chair Powell Says Officials Need More ‘Good’ Data Before Cutting Rates
▼ + stars: | 2024-02-04 | by ( Jeanna Smialek | ) www.nytimes.com time to read: +1 min

Mr. Powell was interviewed on Thursday, after the Fed’s meeting last week but before Friday’s blockbuster jobs report. “We think we can be careful in approaching this decision just because of the strength that we’re seeing in the economy,” Mr. Powell said during the interview, based on a transcript released ahead of its airing. He added that officials would want to see a continued moderation in price increases, even after several months of milder readings. The progress on inflation “doesn’t need to be better than what we’ve seen, or even as good. It just needs to be good,” Mr. Powell said.

Persons: Jerome H, Powell, Mr Organizations: Federal Reserve

☆ Fed officials aren’t bent on slowing the job market — but they’re watching it.
▼ + stars: | 2024-02-02 | by ( Jeanna Smialek | More About Jeanna Smialek | ) www.nytimes.com time to read: +1 min

But for now, job gains have continued at a solid pace and the economy is growing at a rapid clip. If that continues, the Fed is likely to focus more on inflation as it contemplates when and how much to lower rates. Notably, Mr. Powell suggested that the Fed is willing to be patient 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.

Persons: Powell, Mr Organizations: Mr

☆ Blockbuster Jobs Report Backs Up Fed’s Patience as It Waits to Cut Rates
▼ + stars: | 2024-02-02 | by ( Jeanna Smialek | ) www.nytimes.com time to read: +1 min

Federal Reserve officials left interest rates unchanged this week and signaled that their next move is likely to be a cut — but they also suggested that they are in no hurry to make that change. Friday’s jobs data is likely to reinforce their cautious stance. Given that continued strength, the Fed is unlikely to feel pressure to cut interest rates at its next meeting on March 19-20. Policymakers do not want to hold borrowing costs too high for too long and risk a painful recession, but the data suggests that a possible downturn remains very much at bay. Instead of faltering, the job market is booming.

Persons: Jerome H, Powell Organizations: Federal Reserve, Employers

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