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    World Bank makes big cut to its 2023 growth outlook, says globe is ‘perilously close’ to recession

    The World Bank slashed its 2023 global economy growth outlook to 1.7% for 2023 from its earlier projection of 3%.
    It would mark “the third weakest pace of growth in nearly three decades, overshadowed only by the global recessions caused by the pandemic and the global financial crisis,” the World Bank said.

    The World Bank slashed its global growth forecasts from projections it made in mid-2022 on the back of what it sees as broadly worsening economic conditions.
    The international development institution downgraded almost all of its forecasts for advanced economies in the world, cutting its growth outlook for the global economy to 1.7% for 2023, it said in its latest report, Global Economic Prospects. The organization earlier projected the world economy to expand by 3% in 2023.

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    The adjustment was led by a significant downgrade to its prospects for the U.S. economy — it now forecasts 0.5% growth from an earlier projection of 2.4%.
    The World Bank cut its growth outlook for China for 2023 from 5.2% to 4.3%, Japan from 1.3% to 1% , and Europe and Central Asia from 1.5% to 0.1%.
    “Global growth has slowed to the extent that the global economy is perilously close to falling into recession,” the World Bank said, attributing an “unexpectedly rapid and synchronous” global monetary policy tightening behind the sluggish growth.
    The downgraded estimates would mark “the third weakest pace of growth in nearly three decades, overshadowed only by the global recessions caused by the pandemic and the global financial crisis.”

    Global growth has slowed to the extent that the global economy is perilously close to falling into recession.

    World Bank

    The World Bank said that tighter monetary policies from central banks around the world may have been necessary to tame inflation, but they have “contributed to a significant worsening of global financial conditions, which is exerting a substantial drag on activity.”

    “The United States, the euro area, and China are all undergoing a period of pronounced weakness, and the resulting spillovers are exacerbating other headwinds faced by emerging market and developing economies,” it said.
    The global financial organization adjusted its 2024 forecasts lower as well, to 2.7% from an earlier prediction of 3% growth.

    China is ‘key variable’

    A faster-than-expected China reopening poses great uncertainty for its economic recovery, the World Bank said in its report.
    “The economic recovery [in China] may be delayed if reopening results in major outbreaks that overburden the health sector and sap confidence,” the report said. “There is significant uncertainty about the trajectory of the pandemic and how households, businesses, and policy makers in China will respond.”

    A pedestrian in Pudong’s Lujiazui Financial District in Shanghai, China, on Tuesday, Jan. 3, 2023.
    Bloomberg | Bloomberg | Getty Images

    World Bank President David Malpass said on CNBC’s “Closing Bell” on Tuesday that “China is a key variable and there may be an upside for China if they push through Covid as quickly as they seem to be doing.”
    “China’s big enough by itself to really lift global demand and supply,” he said.
    “One of the questions for the world would be, which does it do most — if it’s mostly putting upward pressure on global demand, then that raises commodity prices. But it also means that the Fed will be hiking for a longer period of time,” he said.

    Read more about China from CNBC Pro

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    Powell Says Fed Will Not Be a ‘Climate Policymaker’

    In a speech on Federal Reserve independence, Chair Jerome H. Powell emphasized that climate change should be addressed by elected officials.Jerome H. Powell, the Federal Reserve chair, said that to retain its independence from politics, the central bank must “stick to its knitting” — and that means it is not the right institution to delve into issues like mitigating climate change.“Without explicit congressional legislation, it would be inappropriate for us to use our monetary policy or supervisory tools to promote a greener economy or to achieve other climate-based goals,” said Mr. Powell, who delivered his comments at a conference held by Sweden’s central bank. “We are not, and will not be, a ‘climate policymaker.’”Mr. Powell’s comments responded to occasional calls from Democrats for the Fed to take a more active role in policing climate change, and to skepticism from some Republicans that it can guard against climate-related risks to the financial system without overstepping and actively influencing whether industries like oil and gas can access credit.While the central bank is working on ways to better monitor climate-related risks at financial institutions, officials including Mr. Powell have been clear that they should not try to incentivize banks to lend to green projects or discourage them from lending to carbon-producing ones.“Addressing climate change seems likely to require policies that would have significant distributional and other effects on companies, industries, regions, and nations,” Mr. Powell said in his remarks.Inflation F.A.Q.Card 1 of 5What is inflation? More

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    ‘Quick and dirty’: France’s Macron expected to push through pension reforms after years of pushback

    French President Emmanuel Macron will present new pension reforms Tuesday, and is expected to face some backlash.
    France’s legal retirement age is currently 62 — lower than many developed markets, including much of Europe and the U.S.
    “Quick and dirty maybe, but much more likely to pass than five years ago,” Renaud Foucart, senior lecturer in Economics at Lancaster University, told CNBC’s “Squawk Box Europe” Tuesday morning.

    The French government is presenting new plans to update the pension system. Analysts expect some backlash from some workers.
    Nurphoto | Nurphoto | Getty Images

    French President Emmanuel Macron is going at it again: a new pension reform will be presented Tuesday, and is expected to face some backlash.
    Macron is serving his second term as France’s president but overhauling the pension system is a long-standing promise that dates all the way back to when he was first elected in 2017.

    France’s legal retirement age is currently 62 — lower than many developed markets, including much of Europe and the U.S. The public sector also has “special regimes,” or sector-specific deals that allow workers to retire before they’re 62.
    In late 2019, Macron’s government proposed a single, points-based system, which enabled a person to retire once they had gained a certain number of points. The idea was a harmonization of the rules across sectors.
    But the plan was met with uproar. Public sector workers — arguably the ones with the most to lose from potential reforms — protested for several days in some of the country’s biggest strikes in decades. Amid such strong opposition and the coronavirus pandemic, Macron decided in early 2020 to put the plans on hold.

    This year will be one of pension reform.

    Emmanuel Macron
    President of France

    There was some talk of revisiting the plans in early 2022, but it was judged to be too close to the presidential election, which took place in April last year.
    “This year will be one of pension reform, aiming to balance our system in the years and decades to come,” Macron said during his New Year’s address.

    “As I promised you, this year will indeed be that of a pension reform, which aims to ensure the balance of our system for the years and decades to come.”
    He added that he wants to conclude negotiations in time for new rules to be applicable from the end of summer 2023.
    “There will be disruption, there will be strikes, [but Macron] has decided to go quick: the current procedure is supposed to last no more than 90 days,” Renaud Foucart, senior lecturer in Economics at Lancaster University, told CNBC’s “Squawk Box Europe” Tuesday morning.
    “Quick and dirty maybe, but much more likely to pass than five years ago,” he added.
    Étienne Ollion, sociology professor at Ecole Polytechnique, told CNBC’s Street Signs on Tuesday that Macron “is keen on keeping the image of a reformist president.”
    His first term was dominated by key reforms, touching on items such as labor laws and taxation.

    What to expect

    One of the main issues will be the new retirement age. In the past, Macron suggested this could be raised from 62 to 65, but at a gradual pace with increases of about 4 months per year until 2031.
    French media have reported that the government is considering increasing the amount those on the lowest pensions receive in an effort to make the transition to a longer working life more acceptable to the public. CNBC could not independently verify this information.

    Macron’s first proposal, from 2019, also envisaged addressing the so-called “special regimes.”
    Any new change to these accords is likely to lead to backlash from the industries affected.
    France’s comparably low retirement ages is a drag on its public finances. The country’s pensions advisory council has reportedly estimated a deficit in the pension system of around 10 billion euros ($10.73 billion) each year between 2022 and 2032.

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    As Infrastructure Money Lands, the Job Dividends Begin

    It has never exactly been boom times for the archaeology profession, but this past year comes close — thanks to Congress.Kim Redman runs Alpine Archaeological Consultants, a firm that searches for historically or culturally valuable artifacts in the path of construction — an essential step for federally assisted projects. For decades, she has hired temporary workers (affectionately known as “shovel bums”) to comb the ground.These days, she’s bringing on as many full-timers as she can, as billions of dollars in infrastructure appropriations make their way down through the states.“If you’re going to build a road, we’re at the beginning of the process,” Ms. Redman said. “The opportunities in archaeology are immense right now — everybody’s trying to hire so we can meet the demand.”Archaeologists are on the leading edge of a wave of jobs that will result from $1.2 trillion in direct government spending from the 2021 Infrastructure Investment and Jobs Act. Two subsequent initiatives — $370 billion in incentives and grants for lower-emissions energy projects provided by the Inflation Reduction Act, and $53 billion in subsidies for semiconductor manufacturing funded by the CHIPS Act — are expected to leverage tens of billions more in private capital.An archaeological crew excavating an Ancestral Pueblo pit house in southwestern Colorado in advance of a highway project.Rand Greubel/Alpine Archaeological ConsultantsThe primary purpose of the three laws isn’t to stimulate the economy; they are mainly intended to combat climate change, rebuild infrastructure and reduce dependence on foreign semiconductors. But they will affect the labor market, including a reallocation of workers across sectors.The funding comes as the economy is decelerating, and it may avert a sharper dip in employment brought on by the Federal Reserve’s attempts to contain inflation by raising interest rates. The construction industry, in particular, has been buffeted by a slowdown in new-home sales and stagnant demand for new offices.“By spring or summer, the job market will basically go flat,” said Mark Zandi, chief economist for Moody’s Analytics. “The infrastructure spending won’t kick in until late 2023, going into 2024. It feels like the handoff here could be reasonably graceful.”Nevertheless, the exact number of jobs produced by the three pieces of legislation is uncertain and may be difficult to notice in the aggregate.The State of Jobs in the United StatesEconomists have been surprised by recent strength in the labor market, as the Federal Reserve tries to engineer a slowdown and tame inflation.Noncompete Agreements: A sweeping proposal by the Federal Trade Commission would block companies from limiting their employees’ ability to work for a rival.Retirees: About 3.5 million people are missing from the U.S. labor force. A large number of them, roughly two million, have simply retired.Switching Jobs: A hallmark of the pandemic era has been the surge in employee turnover. The wave of job-switching may be taking a toll on productivity.Delivery Workers: Food app services are warning that a proposed wage increase for New York City workers could mean higher delivery costs.The only jobs that are possible to count precisely are those created directly by the federal government. The Office of Personnel Management, which set up a handy filter for jobs associated with the infrastructure law, aims to hire 7,000 people by the end of September.The Taiwan Semiconductor Manufacturing Company, one of the largest chip-makers in the world, is planning to expand and upgrade a factory in Arizona.Adriana Zehbrauskas for The New York TimesThe actual number, of course, is larger. Dr. Zandi’s analysis of the infrastructure law found that it would add nearly 360,000 jobs by the end of this year, and 660,000 jobs at its peak employment impact at the end of 2025. He does not expect the Inflation Reduction Act to affect employment significantly, given its lower public expenditure.A group at the University of Massachusetts Amherst disagreed, forecasting the Inflation Reduction Act’s impact at 900,000 additional people employed on average each year for a decade. Betony Jones, director of energy jobs at the Department of Energy, thinks the number could be even higher because the bill includes incentives for domestic sourcing of materials that may create more jobs along the supply chain than traditional economic models account for.“It will change those assumptions in significant ways,” Ms. Jones said.But a number of mitigating forces make that number less powerful than it appears.Some of the jobs already exist, for example, since much of the money will go to extend tax credits that would have expired. The estimate includes jobs that are supported by infrastructure workers’ wages, from hairdressers to plumbers.It’s also a gross number, not accounting for the employment that the Inflation Reduction Act could subtract through the taxes it imposes on corporations, or the fossil fuel jobs that might disappear as renewable energy capacity increases. And plenty of the new infrastructure jobs will be filled by people who might otherwise be working in other sectors, especially if they’re better paid.At the same time, inflation has made construction materials more expensive, decreasing the purchasing power of public agencies. For the first portion of money from the infrastructure law, which was allocated to states by a formula in the first half of 2022, that largely meant salvaging large projects already underway that might otherwise have been stymied by rising costs.For all of those reasons, said Alec Phillips, chief political economist for Goldman Sachs, the infusions of cash haven’t increased his payroll employment projections for the coming year.The archaeological crew at a prehistoric campsite in the Colorado Rockies. Archaeologists are on the leading edge of a wave of jobs that will be created from federal infrastructure spending.Rand Greubel/Alpine Archaeological Consultants“This is not happening in a vacuum,” Mr. Phillips said. “Once you go through all those factors, it’s one of those things that wouldn’t influence our employment forecast all that much.”Nonetheless, the industry-level impact will be significant. The nation will need more people working in construction and manufacturing in the next few years — even if they come from other professions or, ideally, the ranks of people who aren’t working.That has given organized labor a rare opportunity to expand. In a policy reversal, the infrastructure law allows federally funded transportation projects to require hiring from the local community, which can aid union organizing. The Biden administration also issued an executive order in early 2022 favoring collective bargaining agreements with unions.The infrastructure law includes $42.5 billion for expanding broadband access — part of about $100 billion provided across several measures — and the agency running the program expects work on the cables and cellphone towers to start in 2024. The Government Accountability Office estimated that 23,000 more people would be needed when deployment peaked. The Communications Workers of America, a union that represents about 130,000 telecommunications workers, said that members had often left for other occupations as industry conditions deteriorated and that many would come back for the right salary and benefits.“There’s a lot of people sitting on the sidelines,” said Nell Geiser, the union’s research director. “They are not willing to take what’s on offer.”It’s clear, however, that new workers will be needed to meet the demand.A piece of an adobe wall from an Ancestral Pueblo pit house that has the 1,200-year-old handprint of a builder.Kristin Braga Wright for The New York TimesA reconstructed pot, found during excavation of an Ancestral Pueblo hamlet in Colorado, being prepared for curation.Kristin Braga Wright for The New York TimesThat’s why unions are gearing up training programs and recruiting apprentices, or even “preapprentices,” some directly out of high school or prison — times when people sometimes struggle to find work.Mike Hellstrom, Eastern regional manager of the Laborers’ International Union of North America, said the union’s apprenticeship applications had been snapped up within minutes of release. His region — New York, New Jersey, Delaware and Puerto Rico — stands to get $45 billion just from the infrastructure law.“It’s going to be a really unique time of our lives of being construction workers and watching this building boom we’re about to come into,” Mr. Hellstrom said.Recognizing the need for new workers, the infrastructure law in particular allows state agencies enormous flexibility in using funds for work force development. So far, they’ve been slow to take advantage of it. One reason: You can train people, but if you’re not able to compensate them competitively because of limits set by the state legislature, they’ll go somewhere else.“I think the biggest challenge for state departments of transportation on the work force side are what wages they’re able to pay,” said Jim Tymon, executive director for the American Association of State Highway and Transportation Officials. “That really isn’t tied to the federal dollars as much as it is to the restrictions that each individual state has because of their government employee pay scales.”Partly for that reason, as has long been the case, much of the work will be awarded to construction firms, which have more flexibility to offer higher wages. Their capacity isn’t infinite, however. Already, the wave of impending business has prompted concerns that some projects may not attract enough bids to ensure competition.President Biden was in Kentucky this month to highlight funding for infrastructure projects, including building and rehabilitating bridges.Pete Marovich for The New York TimesThat may not be a problem for huge undertakings, like a $935 million award to rebuild two locks on the upper Ohio River, a project that the Army Corps of Engineers expects to directly support 8,900 jobs. But it can prove more difficult for smaller jurisdictions that may lack the staff to solicit bids.Emily Feenstra, chief policy and external affairs officer for the American Society of Civil Engineers, said more coordination would be needed to ensure that all the money that Congress allocated was spent.“On that smaller scale, it’s almost like matchmaking — finding the firm, finding the agency and seeing where the needs are,” she said.All of that is good news for people doing the work, like Roger Oberdier, 33, who was hired at Alpine Archaeological Consultants in October. He was happy to find a staff position after picking up jobs all over the country and is applying to Ph.D. programs to advance his career, in which he plans to specialize in zooarchaeology (which means a lot of digging up butchered animals).And the increasing demand for talent affects the whole field. Even friends who don’t want permanent jobs are doing pretty well, hopscotching the country looking for evidence of ancient human activity, Mr. Oberdier said. Job websites like archaeologyfieldwork.com are stacked with listings at pay rates significantly higher than they were in previous years.“Right now, the job market is in favor of the job seeker,” Mr. Oberdier said. “My friends who are committed shovel bums — who never want to sit in an office and write a report, they just want to travel the world and hike to new places and be the first person to see something in 10,000 years — they are taking the jobs they want right now.” More

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    Disney Is Bringing Employees Back Four Days a Week

    The C.E.O., Robert A. Iger, said in a memo that he thought the move would benefit the company’s culture and creativity.Starting on March 1, the Walt Disney Company will require employees to report to the office four days a week, a relatively strict policy among large companies.Robert A. Iger, who came out of retirement in November to retake Disney’s chief executive reins, said in a memo to employees on Monday that a return to mostly in-person work — for the first time in nearly three years — would benefit the company’s culture in general and movie and TV creative processes in particular. Since his return, Mr. Iger has been trying to boost morale and galvanize Disney’s creative engines.“As you’ve heard me say many times, creativity is the heart and soul of who we are and what we do at Disney,” Mr. Iger said in the memo, which was viewed by The New York Times. “And in a creative business like ours, nothing can replace the ability to connect, observe and create with peers that comes from being physically together.”The memo said that employees would likely be asked to work from Disney offices Monday through Thursday. “Stay tuned for additional details,” Mr. Iger said.The shift did not come as a complete surprise to Disney employees; Mr. Iger signaled that a change was coming during a Nov. 28 meeting with them. CNBC earlier reported on his memo on Monday.Disney has required most employees to report to the office three days a week for roughly the last year, in line with most major media companies. NBCUniversal has a three-days-a-week policy (Tuesday, Wednesday and Thursday), while Warner Bros. Discovery requires three days between Monday and Thursday.Mr. Iger’s return-to-work edict was accompanied by praise for a wide array of Disney divisions, including Broadway productions and Imagineering, the company’s theme park design unit. Bob Chapek, who was chief executive from 2020 until he was fired in November, sometimes left certain groups in the company feeling overlooked or underappreciated.“I would be remiss not to mention how the ESPN team expertly handled Damar Hamlin’s tragic injury, showing grace under pressure, and presenting the facts to viewers with utter respect and sensitivity,” Mr. Iger said in the memo, referring to the Buffalo Bills player who collapsed and went into cardiac arrest on “Monday Night Football” on Jan. 2.Mr. Iger is also working on a sweeping restructuring involving the flow of content to Disney’s streaming services. He has also signaled that cost cutting lies ahead, including potential layoffs. More

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    Consumers see inflation—and spending—cooling off in the year ahead, New York Fed survey shows

    The one-year inflation outlook declined to 5%, the lowest level since July 2021, according to a New York Fed survey released Monday.
    Household spending expectations tumbled a full percentage point to 5.9%, the lowest level since January 2022.
    Consumers expect gas prices to increase 4.1% and food prices to rise 7.6% over the next year, in both cases a 0.7 percentage point decline from the previous month

    People shop for goods at a Publix in Nashville, Tennessee, on December 22, 2022, ahead of winter storm Elliot. 
    Seth Herald | AFP | Getty Images

    Consumers see the inflation burden easing while they expect to pull back considerably on their spending, according to a closely watched survey the New York Federal Reserve released Monday.
    The central bank district’s monthly Survey of Consumer Expectations for December showed that the one-year inflation outlook declined to 5%, down 0.2 percentage point from the previous month and the lowest level since July 2021.

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    While that pace would still be well above the Fed’s goal of 2% annual inflation, it represents progress in the fight against the surging cost of living. Economists believe that expectations are a key to inflation, as they influence the behavior of companies that will raise prices and workers who will demand higher wages if they think prices are going to keep rising.
    The New York Fed’s one-year expectations gauge had hit a record 6.8% in June, according to data going back to 2013, amid a surge in inflation to its highest point in more than 40 years
    Over the longer term, expectations were little changed, with the three-year outlook holding at 3% and the five-year projection edging higher to 2.4%.
    Consumers expect gas prices to increase 4.1% and food prices to rise 7.6% over the next year, but both figures represent 0.7 percentage point declines from the previous month.
    Though they see prices continuing to rise, consumers figure to be spending less.

    The one-year outlook for household spending tumbled a full percentage point to 5.9%, the lowest level since January 2022 and well below the record-high 9% hit in May 2022. At the same time, household income is expected to rise 4.6% over the next year, a series high.
    The results come amid the Fed’s move to use interest rate rises to tamp down inflation. In 2022, the central bank hiked benchmark rates by 4.25 percentage points and is expected to add a few more increases in the early part of this year before pausing.
    One primary target is the still-hot labor market, which saw growth of 223,000 nonfarm payroll jobs in December. Fed officials worry that a continued imbalance of labor demand for supply — 1.7 open jobs for every available worker — will continue to push wages and business costs higher.
    Despite the efforts, survey respondents grew more optimistic about the labor market, with 40.8% expecting the unemployment rate to be higher a year from now, a 1.4 percentage point decline from November. Unemployment was at 3.5% in December, tied for the lowest level since late 1969.
    Home prices also are expected to grow 1.3%, a 0.3 percentage point increase from November, according to the survey.

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    Britain’s Economic Health Is Withering With Sick Workers on the Sidelines

    Many people who want to work can’t because of long-term health problems, a persistent issue that is causing Britain’s economy to go “into reverse.”Christina Barratt was used to the 12- to 14-hour days. For years, she would get into her car each morning and set out to department stores and other retailers all over northwest England, selling greeting cards for a large manufacturer.“It’s a very demanding, busy job,” she said, recalling how she had to make sales, manage client accounts and grow the business, while often traveling long distances.In March 2020, at the age of 50, Ms. Barratt got Covid. She hasn’t been able to work since.Ms. Barratt is among 3.5 million people — or about one in 12 working-age adults in Britain — who have long-term health conditions and are not working or looking for work. The number ballooned during the first two years of the pandemic when more than half a million more people reported they were long-term sick, with physical and mental health conditions, according to analysis by economists at the Bank of England. The sharp rise in ill health is a startling problem itself, but there has also been a growing awareness in Britain about the negative effects on the economy of having so many people unable to work.Sickness is adding to the growing sense of malaise in a country troubled by high inflation and the economic costs of Brexit, where the National Health Service is overwhelmed and workers across industries are striking in ever larger numbers, coming after a year of severe political upheaval.With the unemployment rate near its lowest point in half a century, businesses have loudly complained that they have been unable to hire enough workers, leaving the government grappling with how to expand the labor market. Before the pandemic, a growing labor market had been “the single cylinder of growth in the economic engine,” Andy Haldane, the former chief economist of the Bank of England, said in November during a lecture at the Health Foundation, a nonprofit organization. It “has now gone into reverse gear.”Britain is in “a situation where for the first time, probably since the Industrial Revolution, where health and well-being are in retreat” and acting as a brake on economic growth, said Mr. Haldane, who currently serves as the chief executive of the Royal Society of Arts, an organization in London that seeks practical solutions to social issues.The economy is probably already in a recession, according to forecasts by the Bank of England and others, and is expected to return to only meager growth in 2024. Some economists have warned that shortages of workers could deepen the cost-of-living crisis if it causes employers to raise wages to attract workers in a way that threatens to entrench high inflation into the economy. That could prompt the central bank to keep interest rates high, pushing up borrowing costs and restraining the economy.At the heart of the problem is a high economic inactivity rate that has barely budged despite the end of pandemic lockdowns, a boom in labor demand and a high cost of living. As of October, over half a million more people were counted as inactive than before the pandemic, according to the Office for National Statistics. In a separate study looking at data for the first two years of the pandemic, Jonathan Haskel and Josh Martin, economists at the Bank of England, found that nearly 90 percent of the increase in economic inactivity could be attributed to people who were long-term sick.The extent to which sickness is forcing people to leave the work force is still being debated among researchers in Britain because the reasons for not working can change over time. But there is little disagreement that the economy is being held back by having so many people who say ill health has kept them from working.A sign outside a pub in Hampshire, Britain, that takes a creative tack in advertising for workers.Chine Nouvelle, via ShutterstockBusinesses have loudly complained that they have been unable to hire enough employees.Paul Ellis/Agence France-Presse — Getty ImagesContributing to the rise in sickness are not only tens of thousands of cases of long Covid, which Ms. Barratt is suffering from, but also a vast backlog of people — about seven million — with a variety of health problems who are on waiting lists for N.H.S. care. The latest numbers add to a longer-term trend. In the 25 years before the pandemic, the tally of people reporting long-term sickness grew about half a percent a year. Since then, it accelerated to 4 percent a year, according to the study by Mr. Haskel and Mr. Martin.Britain’s aging population means there are more sick people, but “the prevalence of poor health has been growing” as well, said David Finch of the Health Foundation, which has studied links between illness and economic inactivity. In the past few years, the foundation found, there has been a large increase in the number of people with cardiovascular problems, mental illness, and a range of other ailments, which would include respiratory conditions and long Covid symptoms.Britain is one of just seven countries in the Organization for Economic Cooperation and Development that still has a higher rate of economic inactivity than it did before the pandemic, the Office for National Statistics reported. The United States is also in this group, but its missing workers are mostly explained by retirement and a decline in participation by middle-aged men without college degrees, rather than sickness. The increase in the rate of economic inactivity in Britain is more than twice as large as the increase in the United States. These missing workers face a number of barriers in returning to work. For some, the severity of their health condition prevents them from working, while others are unable to return to the job they used to do. . Ms. Barratt, the greeting card saleswoman, has no illusions about going back to a similar job.“There’s no way I could do that kind of role any more,” Ms. Barratt said. “I’m just not well enough to sustain any kind of level of energy.” Just getting up and down the stairs at home is a challenge, she said.She is feeling the strain of living on government benefits for more than two years and would like to return to work. “If I continue to have this condition, which can go up and down in severity, I’d have to find some kind of employment that was very flexible,” she added.Although there has been a worrying increase in the number of economically inactive people — sick or not — who don’t want to work, there are still 1.7 million who do but are unable to look for a job and start work soon, according to the Office for National Statistics.Kirsty Stanley said the transition back to work for people with long Covid can be difficult. “They basically expect people to go from potentially zero to 100” within four to six weeks, she said.Nicholas White for The New York Times“This has been a long-term issue in keeping people with disabilities in the workplace,” said Kirsty Stanley, an occupational therapist. There are a lot of challenges, including some employers not understanding legal requirements to make reasonable accommodations for employees with health problems, Ms. Stanley said. She is an associate for Long Covid Work, a group that works with unions and employment groups to improve access to work for people with long Covid. Mr. Haskel and Mr. Martin estimate that there are 96,000 people who are economically inactive because of long Covid.Ms. Stanley, who also suffers from long Covid, said one problem was that the gradual period for returning to work that employers offer to people after a long absence doesn’t work well for those with long Covid.“They basically expect people to go from potentially zero to 100” within four to six weeks, she said. “What happens is people crash.”A little over two years ago, Michael Borlase did a four-week phased return to work after being sick with Covid. But at the end of the period, after getting back to an eight-hour shift, he got sick again and could not go back to work.He was a newly qualified nurse working in a psychiatric ward for men with mental health issues who have committed a crime. He was there for just eight months before he got Covid in April 2020.Michael Borlase used to be a nurse in a psychiatric ward. Now he’s not sure he could go back to that work. Nicholas White for The New York Times“I’d been so poor for so long as a student nurse,” he said. “I was thrilled to be working, work for the N.H.S. and felt very proud of the work I was doing. And then Covid hit.”“I was very early on in my career,” he added. “And now I don’t know if I can ever go back again.”At age 36, he said he felt “stuck in a professional limbo,” where he could not do the job he spent years training for but was too unwell to train for something else. Until September, Mr. Borlase received full pay because of a provision for N.H.S. workers with Covid. Since then, Mr. Borlase has been receiving reduced wages from sick pay, which will expire in April.Delays in getting health treatment have made it difficult for Andrea Slivkova, 43, to return to work. A Czech native who came to Britain 10 years ago, she left her job cleaning offices in mid-2021 because of pain from a prolapsed pelvic organ. It was more than a year before she could have the surgery to address the problem. Since then, she said, she is still unwell but has not been able to have a follow-up appointment with a specialist. Last summer, she was told it would be a five-month wait.“They told me that the waiting list is long because other people are waiting, too,” Ms. Slivkova said, with her daughter, Kristyna Dudyova, translating from Czech.Ms. Slivkova still hasn’t returned to work. She described the strain of having a physical health condition but also the struggle to navigate the health care system and the financial stress of relying on government benefits.Ms. Dudyova recalled how her mother used to be a workaholic, who found time to bake, go to the gym, work multiple jobs if necessary, all while raising her and her younger brother.“But now everything is just gone,” she said. More

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    Speaker Drama Raises New Fears on Debt Limit

    An emboldened conservative flank and concessions made to win votes could lead to a protracted standoff on critical fiscal issues, risking economic pain.WASHINGTON — Representative Kevin McCarthy of California finally secured the House speakership in a dramatic middle-of-the-night vote early Saturday, but the deal he struck to win over holdout Republicans also raised the risks of persistent political gridlock that could destabilize the American financial system.Economists, Wall Street analysts and political observers are warning that the concessions he made to fiscal conservatives could make it very difficult for Mr. McCarthy to muster the votes to raise the debt limit. That could prevent Congress from doing the basic tasks of keeping the government open, paying the country’s bills and avoiding default on America’s trillions of dollars in debt.The speakership battle suggests President Biden and Congress could be on track later this year for the most perilous debt-limit debate since 2011, when former President Barack Obama and a new Republican majority in the House nearly defaulted on the nation’s debt before cutting an 11th-hour deal.“If everything we’re seeing is a symptom of a totally splintered House Republican conference that is going to be unable to come together with 218 votes on virtually any issue, it tells you that the odds of getting to the 11th hour or the last minute or whatever are very high,” Alec Phillips, the chief political economist for Goldman Sachs Research, said in an interview Friday.Representative Kevin McCarthy won the speakership early Saturday only after making a deal with hard-right lawmakers.Kenny Holston/The New York TimesThe federal government spends far more money each year than it receives in revenues, producing a budget deficit that is projected to average in excess of $1 trillion a year for the next decade. Those deficits will add to a national debt that topped $31 trillion last year.Federal law puts a limit on how much the government can borrow. But it does not require the government to balance its budget. That means lawmakers must periodically pass laws to raise the borrowing limit to avoid a situation in which the government is unable to pay all of its bills, jeopardizing payments including military salaries, Social Security benefits and debts to holders of government bonds. Goldman Sachs researchers estimate Congress will likely need to raise the debt limit sometime around August to stave off such a scenario.Understand the U.S. Debt CeilingCard 1 of 4What is the debt ceiling? More