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    in Economy

    Starbucks Tells Union It Wants to Resume Contract Talks

    After the coffeehouse chain proposed terms for contract negotiations, Workers United, which represents 9,000 employees, said it was open to productive steps.Starbucks said Friday that it wanted to get back to the bargaining table after a deadlock of more than six months with the union that represents more than 9,000 of its workers.The company is proposing that bargaining continue with a set of organized stores in January, Sara Kelly, Starbucks’s vice president and chief partner officer, said in a letter to Lynne Fox, president of Workers United, the parent union of Starbucks Workers United.“We collectively agree, the current impasse should not be acceptable to either of us,” Ms. Kelly said in the letter. “It has not helped Starbucks, Workers United or, most importantly, our partners. In this spirit, we are asking for your support and agreement to restart bargaining.”Starbucks said it would like to conduct these meetings without audio or video recording “so that all participants are comfortable with open, honest discussions.” The union has previously fought for the negotiations to be conducted by videoconference so that more members could take part.Ms. Fox said in a statement that the union was reviewing the letter and still determining how to respond. “We’ve never said no to meeting with Starbucks,” she said. “Anything that moves bargaining forward in a positive way is most welcome.”Starbucks workers began organizing in 2021 with three Buffalo-area stores. Now more than 350 of the company’s roughly 9,300 corporate-owned stores in the United States are organized.In those two years, the coffee giant and its workers have sparred over issues ranging from Pride Month décor to accusations of company retaliation. The two sides have blamed each other for stalled talks since their last meeting on May 23.Most recently, workers at more than 200 stores walked out on Nov. 16, which fell on Starbucks’ promotional Red Cup Day.The union has filed hundreds of charges with the National Labor Relations Board complaining of unfair labor practices, with accusations including unjust firings and withholding certain health care benefits for organized workers. The agency itself has sided with workers in many of those disputes.The company has also sued the union over allegations of using the company’s intellectual property in pro-Palestinian messaging. More

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    The runway is getting clearer, but the U.S. economy still isn’t assured of a soft landing

    The U.S. economy can take another win with a small “W” as it looks to navigate through what had been the highest inflation level in more than 40 years.
    Despite a high level of anxiety heading into the Labor Department’s nonfarm payrolls report, the details were fairly benign.
    Still, the solid report couldn’t dispense the lingering feeling that the economy isn’t out of the woods yet.
    Key to whether the so-called landing is soft or hard will be the consumer, which collectively accounts for nearly 70% of all U.S. economic activity and has been pressured by inflation.

    A UPS seasonal worker delivers packages on Cyber Monday in New York on Nov. 27, 2023.
    Stephanie Keith | Bloomberg | Getty Images

    November’s solid jobs report did not assure that the economy will come in for a soft landing, but it did help to clear the runway a little more.
    After all, there’s nothing about a 3.7% unemployment rate and another 199,000 jobs that even whispers “recession,” let alone screams it.

    At least for now, then, the U.S. economy can take another win with a small “W” as it looks to navigate through what had been the highest inflation level in more than 40 years — and a still-uncertain path ahead.
    “Overall, the jobs market is doing its part to get us to a soft landing,” said Daniel Zhao, lead economist at jobs rating site Glassdoor. “It’s boring in all the right ways. That’s a welcome change after a few years of less-boring reports.”
    Indeed, despite a high level of anxiety heading into the Labor Department’s nonfarm payrolls report, the details were fairly benign.
    The level of job creation was just above the Wall Street estimate of 190,000. Average hourly earnings rose 4% from a year ago, exactly in line with expectations. The unemployment rate unexpectedly declined to 3.7%, easing worries that it could trigger a historically dead-on signal known as the Sahm Rule, which coordinates increases of the unemployment rate by half a percentage point to recessions.

    Still, the solid report couldn’t dispense the lingering feeling that the economy isn’t out of the woods yet. The fear primarily comes from worries that the Federal Reserve’s aggressive interest rate increases haven’t exacted their full toll and still could trigger a painful downturn.

    “The key uncertainty for the labor market in 2024 is whether job growth slows to a more sustainable pace, or whether the economy moves from monthly job gains to monthly job losses. The former would be consistent with the Fed’s soft-landing scenario, while the latter would mean recession,” said Gus Faucher, chief economist at PNC Financial Services. “PNC still thinks recession is the more likely outcome in 2024, but it is a close call.”

    All about consumers and inflation

    Key to whether the so-called landing is soft or hard will be the consumer, who collectively accounts for nearly 70% of all U.S. economic activity.
    On that front, there was another round of good news Friday: The University of Michigan’s closely watched consumer sentiment survey showed that inflation expectations, a key economic variable for prices, plummeted in December. Respondents put one-year inflation expectations at 3.1%, a stunning 1.4 percentage point drop.
    However, such gauges can be “fluky” and are not in line with some other signals coming from consumers, said Liz Ann Sonders, chief investment strategist at Charles Schwab. Debates over soft landings and inflation expectations and interest rate outlooks tend to miss bigger points, Sonders added.

    Prior to 2023, Sanders and Schwab had been stressing the notion of “rolling recessions,” meaning that contractions could hit certain sectors individually while not dragging down the economy as a whole. The distinction may still apply heading into 2024.
    “The recession versus soft landing debate sort of misses the necessary nuances of this unique cycle,” Sonders said. “A best-case scenario is not so much a soft landing, because that ship has already sailed for [some] segments. It’s that we continue to roll through such that if and when services gets hit more than the brief ding so far and it takes the labor market with it, you’re already in stabilization or recovery mode in areas that already took their big hits.”
    Getting to the soft landing, then, likely will require navigating some of those peaks and valleys, none more so than establishing confidence that inflation really has been vanquished and the Fed can take its foot off the brake. Inflation, according to the Fed’s preferred gauge, is running at 3.5% annually, well above the central bank’s 2% goal, though is consistently falling.

    Still nervous about rates

    There was one other good piece of inflation news Friday: Rental costs nationally declined 0.57% in November and were down 2.1% year over year, the latter being the biggest slide in more than 3½ years, according to Rent.com.
    However, one interesting development from the latest economic data was a bit less market confidence that the Fed will be cutting interest rates quite as aggressively as traders previously believed.
    While the traders in the fed funds futures space still roundly expect that the Fed is done hiking, it now expects only about a 45% chance of a previously expected cut in March, according to CME Group data. Traders previously had been expecting 1.25 percentage points worth of cuts in 2024 but lowered that outlook as well to a toss-up with just a full point of decreases following the data releases.
    That may in itself seem like only a nuanced change, but the move in pricing reflects uncertainty over whether the Fed keeps talking tough on inflation, or concedes that policy no longer needs to be as tight. The fed funds rate is targeted in a range between 5.25% and 5.5%, its highest level in more than 22 years.

    “The key thing though, from a broader perspective, is that they can cut if the economy were to see more of a slowdown than we expect. Then the Fed could cut, could provide some support,” Jan Hatzius, chief economist at Goldman Sachs, said Friday on CNBC’s “Squawk on the Street.” “That means the risk of recession is in my view quite low.”
    Goldman Sachs thinks there’s about a 15% chance of a recession next year.
    If that forecast, which is about the standard probability given normal economic conditions, holds up, it will require continued strength in the labor market and for consumers.
    Periods of labor unrest this year indicate, though, that not all may be well on Main Street.
    “If things were going great, then people would not be marching in the cold and rain because they want more pay because the cost of living is going up,” said Giacomo Santangelo, an economist at job search site Monster.
    Workers won’t need economists to tell them when the economy has landed, he added.
    “The alleged definition of a soft landing is to bring inflation down to 2% to 2½% and have unemployment go up to that full employment level. That’s really what we’re looking for, and we’re not there yet,” Santangelo said. “When you’re on an airplane, you know what it feels like when a plane lands. You don’t need the person in the cockpit to come on and go, ‘Alright, we’re going to be landing now.”Don’t miss these stories from CNBC PRO: More

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    U.S. Job Growth Holds Up as Economy Gradually Cools

    Interest rate increases have taken the edge off labor demand, but unemployment dipped in November, and wages rose more than expected.The U.S. economy continued to pump out jobs in November, suggesting there is still juice left in a labor market that has been slowing almost imperceptibly since last year’s pandemic rebound.Employers added 199,000 jobs last month, the Labor Department reported Friday, while the unemployment rate dropped to 3.7 percent, from 3.9 percent. The increase in employment includes tens of thousands of autoworkers and actors who returned to their jobs after strikes, and others in related businesses that had been stalled by the walkouts, meaning underlying job growth is slightly weaker.Even so, the report signals that the economy remains far from recession territory despite a year and a half of interest rate increases that have weighed on consumer spending and business investment. Reinforcing the picture of energetic labor demand, wages jumped 0.4 percent over the month, more than expected, and the workweek lengthened slightly.Wage growth held steady in NovemberYear-over-year percentage change in earnings vs. inflation More

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    Retail Group Retracts Startling Claim About ‘Organized’ Shoplifting

    The National Retail Federation had said that nearly half of the industry’s $94.5 billion in missing merchandise in 2021 was the result of organized theft. It was likely closer to 5 percent, experts say.A national lobbying group has retracted its startling estimate that “organized retail crime” was responsible for nearly half the $94.5 billion in store merchandise that disappeared in 2021, a figure that helped amplify claims that the United States was experiencing a nationwide wave of shoplifting.The group, the National Retail Federation, edited that claim last week from a widely cited report issued in April, after the trade publication Retail Dive revealed that faulty data had been used to arrive at the inaccurate figure.The retraction comes as retail chains like Target continue to claim that they are the victims of large shoplifting operations that have cut into profits, forcing them to close stores or inconvenience customers by locking products away.The claims have been fueled by widely shared videos of a few instances of brazen shoplifters, including images of masked groups smashing windows and grabbing high-end purses and cellphones. But the data show this impression of rampant criminality was a mirage.In fact, retail theft has been lower this year in most of the country than it was a few years ago, according to police data. Some exceptions, including New York City, exist. But in most major cities, shoplifting incidents have fallen 7 percent since 2019.Organized retail crime, in which multiple individuals steal products from several stores to later sell on the black market, is a real phenomenon, said Trevor Wagener, the chief economist at the Computer & Communications Industry Association, who has conducted research on retail data. But he said organized groups were likely responsible for just about 5 percent of the store merchandise that disappeared from 2016 to 2020.He emphasized that there’s “a lot of uncertainty and imprecision” in measuring losses, because it is difficult to parse out what is shoplifting and what is organized crime.Mr. Wagener testified in Congress in June about the discrepancy in the National Retail Federation’s report.Even as it retracted the figure and revised the report, the federation, which has more than 17,000 member companies, insisted in an emailed statement that its focus on the problem was appropriate.“We stand behind the widely understood fact that organized retail crime is a serious problem impacting retailers of all sizes and communities across our nation,” the statement said. “At the same time, we recognize the challenges the retail industry and law enforcement have with gathering and analyzing an accurate and agreed-upon set of data.”At issue is “total annual shrink” — the industry term for the value of merchandise that disappears from stores without being paid for, through theft, damage and inventory tracking mistakes.Mary McGinty, a spokeswoman for the federation, said the error was caused by an analyst from K2 Integrity, an advisory firm that helped produce the report.The analyst, who was not named, linked a 2021 National Retail Federation survey with a quote from Ben Dugan, the former president of the advocacy group Coalition of Law Enforcement and Retail, who said in Senate testimony in 2021 that organized retail crime “accounts for $45 billion in annual losses for retailers.”Mr. Dugan was citing the federation’s 2016 National Retail Security Survey, which was actually referring to the overall cost of shrink in 2015 — not the amount lost to just organized retail crime, Ms. McGinty said.Alec Karakatsanis, a civil rights lawyer who has studied and critiqued how the media has covered organized retail crime, said that the retraction underscored how some news organizations, which have extensively covered the issue of shoplifting, were “used as a tool by certain vested interests to gin up a lot of fear about this issue when, in fact, it was pretty clear all along that the facts didn’t add up.”One of the most prominent examples came in October 2021, when Walgreens said it would close five stores in San Francisco, citing repeated instances of organized shoplifting. The company’s decision had come months after a video seen millions of times showed a man, garbage bag in hand, openly stealing products from a Walgreens as others watched.But an October 2021 analysis by The San Francisco Chronicle showed that Police Department data on shoplifting did not support Walgreen’s explanation for the store closings.Eventually, Walgreens retreated from its claims. In January, an executive at the company said that Walgreens might have overstated the effects on its business, saying: “Maybe we cried too much last year.”Mr. Karakatsanis said the exaggerated narrative of widespread shoplifting was weaponized by the retail industry as it lobbied Congress to pass bills that would regulate online retailers, which they claim is where much of the stolen product ends up.Commentators and politicians have seized on the issue. Earlier this year, Gov. Gavin Newsom, Democrat of California, responded to reports of large-scale thefts in the state with a call for tough prosecution of shoplifters and a plan to invest millions of dollars to fight “organized retail theft.” Gov. Ron DeSantis, Republican of Florida, signed a bill last year aimed at retail theft, and former President Donald J. Trump called for violence, telling Republican activists in California this year that the police should shoot shoplifters as they are leaving a store.Mr. Wagener, the chief economist at the Computer & Communications Industry Association, said that the National Retail Federation’s report in April immediately stuck out to him as wrong. The error was troubling, he said, because the federation has long been viewed as a trusted provider of data for the industry.What made the federation’s mistake even more surprising, Mr. Wagener said, was how starkly the figure contrasted to the group’s own previous findings.In 2020, the federation said in a report that organized retail crime cost retailers an average of $719,548 per $1 billion in sales — a number that would point nowhere near the roughly 50 percent claim made in the April report.Another National Retail Federation survey showed that all external theft — including thefts unrelated to organized retail crime — accounted for 37 percent of shrink, a figure that would still be billions of dollars less than the incorrect estimate of 50 percent made in April.“It would be a bit like the census claiming that nearly half of the U.S. population lives in the state of Rhode Island,” Mr. Wagener said. More

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    Unemployment among Asian workers and Black men rises in November while the overall rate declines

    The overall unemployment rate declined 0.2% to 3.7% last month, against a forecast that it would hold steady at 3.9%.
    On the other hand, Asian Americans saw a 0.4 percentage-point jump in the unemployment rate to 3.5%.
    The unemployment rate for Black Americans — the demographic with the highest jobless percentage in the U.S. — held steady last month at 5.8%.

    Commuters arrive at the Oculus Center in Manhattan, New York City, on Nov. 17, 2022.
    Spencer Platt | Getty Images

    The labor market deteriorated for both Asian and Black workers in November, according to data released Friday by the U.S. Department of Labor.
    The overall unemployment rate declined 0.2% to 3.7% last month, against a forecast that it would hold steady at 3.9%. Overall, the labor force participation rate ticked up to 62.8% alongside a surge of 532,000 workers into the labor force.

    For white Americans, the jobless rate fell 0.2 percentage points to 3.3%. Hispanic Americans also saw their unemployment rate slip 0.2 percentage points to 4.6%.

    On the other hand, Asian Americans saw a 0.4 percentage-point jump in the unemployment rate to 3.5%. This was accompanied by a decline in the participation rate for Asian workers to 65% from 65.3% in October.
    “That uptick in unemployment is not because more Asian workers are flooding into the labor market, feeling optimistic about getting jobs. It’s actually accompanied by a fall in participation as well as a fall in employment,” Elise Gould, senior economist at the Economic Policy Institute, told CNBC.

    The unemployment rate for Black Americans — the demographic with the highest jobless percentage in the U.S. — held steady last month at 5.8%. The jobless rate for Black men age 20 or older spiked more than 1 percentage point to 6.4% from October’s 5.3%. That said, those gains came as the participation rate for this cohort increased to 69.2% from 67.5%.
    “The rise in unemployment is because more workers are optimistic, coming back in or entering the labor market for the first time, and many of them are finding jobs. And many of them are not, which is why the unemployment rate went up,” Gould added.

    Black Americans were hit harder by business shutdowns during the Covid-19 pandemic. The unemployment rate for Black workers peaked at 16.8% in 2020, versus the overall unemployment rate’s April 2020 high of 14.7%.
    Gould added the caveat that the Asian workers in the survey made up a relatively smaller demographic group, and that both of these series are incredibly volatile from month to month.Don’t miss these stories from CNBC PRO: More

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    Amazon Is Cracking Down on Union Organizing, Workers Say

    More than a year and a half after Amazon workers on Staten Island voted to form the company’s first union in the United States, the company appears to be taking a harder line toward labor organizing, disciplining workers and even firing one who had been heavily involved in the union campaign.The disciplinary actions come at a time when union organizers appear to be gaining ground at a major air hub operated by Amazon in Kentucky, where they say they have collected union authorization cards from at least one-quarter of hourly employees. Workers must typically demonstrate at least 30 percent support to prompt a union election.In disciplining the employees, Amazon has raised questions about the extent to which they are free to approach co-workers to persuade them to join a union, a federally protected right. The general counsel of the National Labor Relations Board has said Amazon is breaking the law through a policy governing the access that off-duty workers have to its facilities, which Amazon invoked in the recent firing. The board is seeking to overturn the policy at an upcoming trial.Lisa Levandowski, an Amazon spokeswoman, said the recent disciplinary actions were strictly a response to rule violations, not to union organizing. “Employees have the choice of whether or not to join a union,” she said.The company’s off-duty access rule is “a lawful, common-sense policy,” she said, “and we look forward to defending our position.”The fired worker, Connor Spence, was a founder of the Amazon Labor Union, which won last year’s election on Staten Island. After a split within the union leadership, Mr. Spence helped start a separate group that sought to pressure the company to negotiate a contract at the warehouse, known as JFK8.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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    U.S. payrolls rose 199,000 in November, unemployment rate falls to 3.7%

    Nonfarm payrolls rose by a seasonally adjusted 199,000 in November, slightly better than the 190,000 Dow Jones estimate and ahead of the October gain of 150,000.
    The unemployment rate declined to 3.7%, compared with the forecast for 3.9%, as the labor force participation rate edged higher.
    Average hourly earnings, a key inflation indicator, increased by 0.4% for the month and 4% from a year ago, close to expectations.
    Health care was the biggest growth industry, adding 77,000. Other big gainers included government (49,000), manufacturing (28,000), and leisure and hospitality (40,000).

    Job creation showed little signs of a letup in November, as payrolls grew even faster than expected and the unemployment rate fell despite signs of a weakening economy.
    Nonfarm payrolls rose by a seasonally adjusted 199,000 for the month, slightly better than the 190,000 Dow Jones estimate and ahead of the unrevised October gain of 150,000, the Labor Department reported Friday. The numbers were boosted by sizeable gains in government hiring as well as workers returning from strikes in the auto and entertainment industries.

    The unemployment rate declined to 3.7%, compared with the forecast for 3.9%, as the labor force participation rate edged higher to 62.8%. A more encompassing unemployment rate that includes discouraged workers and those holding part-time positions for economic reasons fell to 7%, a decline of 0.2 percentage point.
    “The job market continues to be resilient after a year of dodging recession fears,” said Daniel Zhao, lead economist at job ratings site Glassdoor. “Really the one concern that we had coming in today’s report was the recent rise in the unemployment rate. So the improvement in unemployment was a welcome relief.”

    The department’s survey of households, used to calculate the unemployment rate, showed much more robust job growth of 747,000 and an addition of 532,000 workers to the labor force.
    Average hourly earnings, a key inflation indicator, increased by 0.4% for the month and 4% from a year ago. The monthly increase was slightly ahead of the 0.3% estimate, but the yearly rate was in line.
    Markets showed mixed reaction to the report, with stock market futures modestly negative while Treasury yields surged.

    “What we wanted was a strong but moderating labor market, and that’s what we saw in the November report,” said Robert Frick, corporate economist with Navy Federal Credit Union, noting “healthy job growth, lower unemployment, and decent wage increases. All this points to the labor market reaching a natural equilibrium around 150,000 jobs [per month] next year, which is plenty to continue the expansion, and not enough to trigger a Fed rate hike.”

    Health care was the biggest growth industry, adding 77,000 jobs. Other big gainers included government (49,000), manufacturing (28,000), and leisure and hospitality (40,000).
    Heading into the holiday season, retail lost 38,000 jobs, half of which came from department stores. Transportation and warehousing also showed a decline of 5,000.
    Duration of unemployment fell sharply, dropping to an average 19.4 weeks, the lowest level since February.
    The report comes at a critical time for the U.S. economy.
    Though growth defied widespread expectations for a recession this year, most economists expect a sharp slowdown in the fourth quarter and tepid gains in 2024. Gross domestic product is on pace to rise at just a 1.2% annualized pace in the fourth quarter, according to an Atlanta Fed data gauge, and most economists expect growth of around 1% in 2024.

    Federal Reserve officials are watching the jobs numbers closely as they continue to try to bring down inflation that had been running at a four-decade high but has shown signs of easing.
    Futures markets pricing strongly points to the Fed halting its rate-hiking campaign and beginning to cut next year, though central bank officials have been more circumspect about what lies ahead. Pricing had been pointing to the first reduction happening in March, though that swung following the jobs report, pushing a higher probability for the first expected cut now to May.
    The Fed will hold its two-day policy meeting next week, its last of the year, and investors will be looking for clues about how officials view the economy.
    Policymakers have been aiming to bring the economy in for a soft landing that likely would feature modest growth, a sustainable pace of wage increases and inflation at least receding back to the Fed’s 2% target.
    Consumers hold the key to the U.S. economy, and by most measures they’ve held up fairly well.
    Retail sales fell 0.1% in October but were still up 2.5% from the previous year. The numbers are not adjusted for inflation, so they indicate that consumers at least have nearly kept pace with higher prices. A gauge the Fed uses showed inflation running at a 3.5% annual rate in October, excluding food and energy prices.
    However, there is some worry that the end of Covid-era stimulus payments and the continued pressure from higher interest rates could eat into spending.
    Net household wealth fell by about $1.3 trillion in the third quarter to about $151 trillion, owing largely to declines in the stock market, according to Fed data released this week. Household debt rose 2.5%, close to the pace where it has been for the past several quarters.
    Fed officials have been watching wage data closely. Rising prices tend to feed into wages, potentially creating a spiral that can be difficult to control.
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    Here’s where the jobs are for November 2023 — in one chart

    The U.S. job market once again surprised to the upside in November, as strong growth in health care and a few other sectors helped the economy add nearly 200,000 jobs and push the unemployment rate down.
    Health care and social assistance added more than 93,000 jobs for the month, making it the top category for job growth, according to the U.S. Bureau of Labor Statistics. Government jobs grew by 49,000, while leisure and hospitality added 40,000 jobs.

    The job gains for health care and social assistance rise to 99,000 when including private education, as some economists do.
    Much of the labor market story over the past two years has been tied to the economic rebound from the Covid-19 pandemic, but the health-care growth appears to be part of a longer-term trend.
    “We’re back to 2019 in some ways. If prior to the pandemic, you would have said, ‘Hey, health care’s going to be one of the largest sources of hiring in late 2023,’ no one would have been surprised by that, I think. There are very long-term structural tailwinds here,” Nick Bunker, director of economic research at Indeed Hiring Lab, told CNBC.
    Bunker also pointed out that health care is less sensitive to higher interest rates or other cyclical factors that affect the U.S. labor market.
    Another key part of the jobs growth story in November was returning strike workers.

    Manufacturing employment rose by 28,000, helped by the 30,000 jobs gained in motor vehicles and parts as the United Auto Workers strike ended. The information sector was also bolstered by the addition of 17,000 jobs from the motion picture and sound recording industries, as Hollywood production restarts after the actors’ strike was resolved.
    Retail trade was an outlier area to the downside, losing more than 38,000 jobs. The sector is roughly flat year over year in terms of total jobs, according to the Labor Department.
    “I’m not spooked by it right now. … If you look at the nonseasonally adjusted gains for that sector, it’s roughly in line with what we saw last year. So maybe the seasonal adjustments need to catch up or change. I think we’ve seen this with a variety of data,” Bunker said.Don’t miss these stories from CNBC PRO: More