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    UK inflation falls from 41-year high as fuel price surge eases

    Brexit has added more than £200 to the average U.K. household food bill, according to a new study from the London School of Economics.
    Nathan Stirk | Getty Images News | Getty Images

    LONDON — U.K. inflation came in slightly below expectations at 10.7% in November, as cooling fuel prices helped ease price pressures, though high food and energy prices continued to squeeze households and businesses.
    Economists polled by Reuters had projected an annual increase in the consumer price index of 10.9% in November, after October saw an unexpected climb to a 41-year high of 11.1%. On a monthly basis, the November increase was 0.4%, down from 2% in October and below a consensus estimate of 0.6%.

    The Office for National Statistics said the largest upward contributions came from “housing and household services (principally from electricity, gas, and other fuels), and food and non-alcoholic beverages.”
    The largest downward contributions over the month came from “transport, particularly motor fuels, with rising prices in restaurants, cafes and pubs making the largest, partially offsetting, upward contribution.”
    The Bank of England will announce its next monetary policy move on Thursday. It is widely expected to raise interest rates by 50 basis points, as it juggles sky-high inflation and an economy that policymakers say is already in its longest recession on record.
    The country faces widespread industrial action over the Christmas period, as workers strike to demand pay rises closer to the rate of inflation and better working conditions.
    The independent Office for Budget Responsibility projected that the U.K. will suffer its largest fall in living standards since records began, as real household income is expected to decline by 4.3% in 2022-23.

    U.K. Finance Minister Jeremy Hunt last month announced a sweeping £55 billion ($68 billion) fiscal plan, including a slew of tax rises and spending cuts, in an attempt to plug a substantial hole in the country’s public finances.
    A positive step, but risks remain
    While the dip in Wednesday’s figures is a step in the right direction, the persistent problem of rising food prices and household energy bills remains a thorn in the side of the British economy, noted Richard Carter, head of fixed interest research at Quilter Cheviot.
    However, Carter suggested inflation may finally be passing its peak, after the U.S. also posted a better-than-expected CPI print on Tuesday.
    “Temperatures have taken a sharp dive in the last week or so, and the demand for gas will no doubt have increased as people are forced to heat their homes,” Carter added.
    “As the autumn had been rather mild, we will only now begin to see the real impact of higher energy bills. While the government support remains in place for now, any changes made once the April deadline is reached could have a knock-on effect on inflation.”
    The Bank of England faces a tricky task in trying to drag inflation back towards its 2% target while remaining cognizant of a weakening economy. This was evident in the latest U.K. labor market data earlier this week, which showed an uptick in both unemployment and wage growth.
    “While inflation is falling, it remains well ahead of wages, and we are heading into a new winter of discontent with strikes concentrated in the unionised public sector and former nationalised industries as a result,” Carter said.
    The market is pricing a 50 basis point interest rate hike from the Bank on Thursday, taking the benchmark rate to 3.5%. Policymakers have signaled a potential slowing of the pace of hikes in 2023. However, inflation remains well above target.
    “The Chancellor’s Autumn Statement in November helped to settle the waters following months of significant turbulence, but inflation remains far above the Bank’s 2% target, which means there is still a long way to go yet,” Carter said.
    “A rapid fall in inflation is highly unlikely, but it is positive to see it finally moving in the right direction.”
    This is a breaking news story, please check back later for more.

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    Inflation Cooled Notably in November, Good News for the Fed

    Inflation slowed more sharply than expected in November, an encouraging sign for both Federal Reserve officials and consumers that 18 months of rapid and unrelenting price increases are beginning to meaningfully abate.The new data is unlikely to alter the Fed’s plan to raise interest rates by another half point at the conclusion of its two-day meeting on Wednesday. But the moderation in inflation, which affected used cars, some types of food and airline tickets, caused investors to speculate that the Fed could pursue a less aggressive policy path next year — potentially increasing the chances of a “soft landing,” or one in which the economy slows gradually and without a painful recession.Stock prices jumped sharply higher after government data showed that inflation eased to 7.1 percent in the year through November, down from 7.7 percent in the previous reading and less than economists had expected.The Fed, which has been rapidly raising rates in three-quarter point increments, is expected to make a smaller move on Wednesday, bringing rates to a range between 4.25 and 4.5 percent. Central bankers will also release economic projections showing how much they expect to raise interest rates next year, and investors are now betting that they will slow to quarter-point adjustments by their February meeting as fading price pressures give them latitude to proceed more cautiously.“The overall picture is definitely improving,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics. “It’s unambiguously good news, but it would not be fair to say that inflation is falling everywhere — there are still pockets of big increases.”While price increases are not yet slowing across the board, they are moderating for key goods and services that consumers buy every day, including gas and meat. That is good news for President Biden, who has struggled to convince Americans that the economy is strong as the surging cost of living erodes voter confidence.“Inflation is coming down in America,” Mr. Biden said during remarks at the White House on Tuesday morning. He hailed the report as “news that provides some optimism for the holiday season, and I would argue, the year ahead.”Inflation F.A.Q.Card 1 of 5What is inflation? More

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    Consumer prices rose less than expected in November, up 7.1% from a year ago

    The consumer price index rose just 0.1% from the previous month, and increased 7.1% from a year ago, compared with respective estimates of 0.3% and 7.3%.
    Core CPI rose 0.2% on the month and 6% on an annual basis, compared with respective estimates of 0.3% and 6.1%.
    Stocks roared higher following the report as investors look for signs that runaway inflation is ebbing.
    Inflation-adjusted average hourly earnings for workers rose 0.5% for the month, though they were still down 1.9% from a year ago.

    Prices rose less than expected in November, the latest sign that the runaway inflation that has been gripping the economy is beginning to loosen up.
    The consumer price index, which measures a wide basket of goods and services, rose just 0.1% from the previous month, and increased 7.1% from a year ago, the Labor Department reported Tuesday. Economists surveyed by Dow Jones had been expecting a 0.3% monthly increase and a 7.3% 12-month rate.

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    The increase from a year ago, while well above the Federal Reserve’s 2% target for a healthy inflation level, was tied for the lowest since November 2021.
    Excluding volatile food and energy prices, so-called core CPI rose 0.2% on the month and 6% on an annual basis, compared with respective estimates of 0.3% and 6.1%.

    Stocks initially roared higher following the report, with futures tied to the Dow Jones Industrial Average up more than 800 points initially before easing a bit. However, the rally lost much of its steam through the session, and the Dow was up just 50 points or so near 2:30 p.m. ET.
    “Cooling inflation will boost the markets and take pressure off the Fed for raising rates, but most importantly this spells real relief starting for Americans whose finances have been punished by higher prices,” said Robert Frick, corporate economist with Navy Federal Credit Union. “This is especially true for lower-income Americans who are disproportionately hurt by inflation.”
    Falling energy prices helped keep inflation at bay. The energy index declined 1.6% for the month, due in part to a 2% decrease in gasoline. Food prices, however, rose 0.5% and were up 10.6% from a year ago. Even with its monthly decline, the energy index was higher by 13.1% from November 2021.

    Shelter costs, which make up about one-third of CPI weighting, continued to escalate, rising 0.6% on the month and now up 7.1% on an annual basis.
    The easing of inflation pressures helped give workers a lift after months of seeing wage increases fall well short of inflation. Real average hourly earnings rose 0.5% for the month, though they were still down 1.9% from a year ago.

    The CPI report comes the same day the rate-setting Federal Open Market Committee begins its two-day meeting. Markets widely expect the FOMC on Wednesday to announce a 0.5 percentage point rate increase, regardless of Tuesday’s CPI reading.
    “The Fed could dismiss the better-than-expected October as just one month’s data, but the further slowdown in November makes this new disinflationary trend harder to dismiss,” Paul Ashworth, chief North America economist for Capital Economics, wrote in a post-CPI note titled, “Stick a fork in it, inflation is done.”
    Inflation spiked in spring 2021, the result of converging factors that took price increases to their highest levels since the stagflation days of the early 1980s. Among the main aggravating circumstances were a supply and demand imbalance brought on by the pandemic, Russia’s invasion of Ukraine and the impact on energy prices, and trillions of dollars in fiscal and monetary stimulus that sent an abundance of money chasing too few goods that were caught up in supply chain problems.
    Used vehicle prices, which had been a major contributor to the initial inflation burst, fell 2.9% for the month and are now down 3.3% from a year ago. As recently as February, the used cars and trucks index was up more than 40% on an annual basis, the result of higher demand as a microchip shortage caused a backlog in new car production.
    Medical care services costs also declined 0.7% on a monthly basis and were up 4.4% annually.
    Headline CPI peaked around 9% in June 2022 and has been on a slow but steady decline since.
    After spending months dismissing the inflation surge as “transitory,” Federal Reserve officials began raising interest rates in March. The central bank has boosted its short-term borrowing rate six times in all, pushing the benchmark up to a targeted range of 3.75%-4%.
    Fed Chairman Jerome Powell said recently that an important component in determining future monetary policy moves will be looking at services inflation excluding shelter costs. That gauge was little changed in November but is up nearly 7.3% from a year ago.

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    Sam Bankman-Fried’s Parents Under Scrutiny in FTX Collapse

    The FTX founder Sam Bankman-Fried’s mother and father, who teach at Stanford Law School, are under scrutiny for their connections to their son’s crypto business.At the height of its corporate power, the cryptocurrency exchange FTX convened a group of athletes and celebrities for a charity event in March at the Miami Heat’s N.B.A. arena. Local high school students competed for more than $1 million in prizes, pitching “Shark Tank”-style business ideas to a panel of judges that included David Ortiz, the former Boston Red Sox slugger, and Kevin O’Leary, an actual “Shark Tank” host.But the event’s organizer was a figure better known in academic circles — Joseph Bankman, a longtime tax professor at Stanford Law School and the father of Sam Bankman-Fried, the now-disgraced founder of FTX.Wearing a baseball cap with FTX’s logo, Mr. Bankman walked onstage to help announce the winners of two $500,000 checks. Behind the scenes, he played the role of FTX diplomat, introducing his son to the head of a Florida nonprofit organization that was helping adults in the area set up bank accounts linked to the crypto exchange’s platform. Two months later, Mr. Bankman-Fried promoted the partnership in testimony to Congress, where he was pushing crypto-friendly legislation.In the months before FTX filed for bankruptcy on Nov. 11, Mr. Bankman was a prominent cheerleader for the company, helping to shape the narrative that his son was using crypto to save the world by donating to charity and giving low-income people access to the financial system.He and his wife, the Stanford Law professor Barbara Fried, were more than just supportive parents backing their child’s business. Mr. Bankman was a paid FTX employee who traveled frequently to the Bahamas, where the exchange was based. Ms. Fried did not work for the company, but her son was among the donors in a political advocacy network that she orchestrated.Now Mr. Bankman and Ms. Fried are under scrutiny for their connections to a business that collapsed amid accusations of fraud and misuse of customer funds. No evidence has emerged linking them to the potentially criminal practices that caused the exchange to implode. But their son was arrested on Monday in the Bahamas after U.S. prosecutors filed criminal charges against him, and his fortune has dwindled to almost nothing. The charitable work that Mr. Bankman spearheaded has largely collapsed.The couple’s careers have been upended. Ms. Fried, 71, resigned last month as chairwoman of the board of a political donor network, Mind the Gap, which she had helped start to support Democratic campaigns and causes. Mr. Bankman, 67, has postponed a Stanford class he had been scheduled to teach in the winter, and he’s recruited a white-collar criminal defense lawyer to represent him. The family faces huge legal bills, and they have become the subject of gossip on Stanford’s campus.“I had a friend who said, ‘You don’t want to be seen with them,’” said Larry Kramer, a former dean of the law school and a close friend of the Bankman-Fried family. “I don’t see how this doesn’t bankrupt them.”In a statement, Risa Heller, a spokeswoman for the couple, said that Mr. Bankman worked for FTX for 11 months but that Ms. Fried had no role in the company. “Joe has spent a lot of his life trying to figure out ways to lift people up out of poverty,” Ms. Heller said. “Most of his time was spent identifying worthy health-related charities.”Mr. Bankman-Fried, 30, said in an interview that his parents “weren’t involved in any of the relevant parts” of the business. “None of them were involved in FTX balances or risk management or anything like that,” he said.Mr. Bankman-Fried said in an interview that his parents “weren’t involved in any of the relevant parts” of the business.Stefani Reynolds/BloombergLong before their son became a billionaire celebrity, Mr. Bankman and Ms. Fried were popular faculty members at Stanford, where they have taught since the late 1980s. At their home on campus, they regularly hosted Sunday dinners with friends and colleagues, which multiple attendees compared to a modern salon.A leading taxation expert, Mr. Bankman has been an outspoken advocate for simplifying the tax filing system and has testified in Congress on tax matters. He also has a degree in clinical psychology and practices as a therapist.The Aftermath of FTX’s DownfallThe sudden collapse of the crypto exchange has left the industry stunned.A Spectacular Rise and Fall: Who is Sam Bankman-Fried and how did he become the face of crypto? The Daily charted the spectacular rise and fall of the man behind FTX.Market Manipulation Inquiry: Federal prosecutors are said to be investigating whether Mr. Bankman-Fried manipulated the market for two cryptocurrencies, leading to their collapse.Congressional Testimony: The FTX founder said on Twitter that he would appear before a House committee, but he was quiet about a similar request from a Senate committee. Frantic Exchanges: Texts from a group chat that included crypto leaders from rival companies showed the chief executive of Binance, another crypto exchange, accusing Mr. Bankman-Fried of orchestrating trades to destabilize the industry.Ms. Fried, who retired this year, is an expert on the intersection of law and philosophy, and has written about effective altruism, the charitable movement embraced by Mr. Bankman-Fried that uses data to maximize the benefits of donations. In 2018, she helped start Mind the Gap, hoping to bring “Moneyball”-style analytics to political spending, people familiar with her role in the group said.The couple’s lives transformed after Mr. Bankman-Fried started FTX in 2019. He grew the company into a $32 billion business, cultivating a reputation as a hard-working do-gooder who barely slept and intended to donate his fortune to causes backed by the effective altruist movement.Mr. Bankman and Ms. Fried supported their son’s work, though Ms. Fried expressed concerns about his lifestyle. “The sleep worries me,” she said in an interview with The New York Times in May. “I just hope that it’s not exacting a high price on him.”Mr. Bankman-Fried’s business and political empire was always a family affair. The FTX founder was a prolific political donor, and he was part of a network of contributors who gave money to groups recommended by Mind the Gap, people familiar with the organization said. He also helped bankroll a nonprofit organization called Guarding Against Pandemics that was run by his 27-year-old brother, Gabe Bankman-Fried.Mr. Bankman was deeply involved in FTX. In its early days, he helped the company recruit its first lawyers. Last year, he joined FTX staff in meetings on Capitol Hill and advised his son as Mr. Bankman-Fried prepared to testify to the House Financial Services Committee, a person familiar with the matter said. FTX employees occasionally consulted him on tax-related matters, the person said.“From the start whenever I was useful, I’d lend a hand,” Mr. Bankman said on an FTX podcast in August.Mr. Bankman visited the FTX offices in the Bahamas as often as once a month, a person who saw him there said. Among the much-younger staff, he cultivated an avuncular persona, regaling employees with stories from his son’s youth, the person said. He and Ms. Fried stayed in a $16.4 million house in Old Fort Bay, a gated community in Nassau, the capital of the Bahamas; the couple’s names appear on real estate documents, according to Reuters, though Mr. Bankman-Fried has said the house was “intended to be the company’s property.”Ms. Heller, the couple’s spokeswoman, said Mr. Bankman and Ms. Fried “never intended to and never believed they had any beneficial or economic ownership in the house.”As an employee, Mr. Bankman focused on FTX’s charitable operations. He put together the Miami event, selecting the teams of high school students who competed for $1 million in FTX grants. Mr. Bankman also leveraged family connections to expand FTX’s reach. His sister, Barbara Miller, works in Florida as a political consultant and introduced him to Newton Sanon, the chief executive of OIC of South Florida, a nonprofit organization that helps people with work force development training to promote economic mobility. (Ms. Miller did not respond to a request for comment.)Mr. Sanon worked with Mr. Bankman on a financial literacy initiative for low-to-moderate-income adults enrolled in education programs. As part of the collaboration, students who did not have bank accounts could open one linked to FTX’s platform, giving them the option to spend their money on cryptocurrency. Nobody was pushed to buy digital currencies through FTX, Mr. Sanon said, but one participant chose to do so.In Washington, Mr. Bankman-Fried invoked the Florida program as he pressed for legislation to make the United States more hospitable to the crypto industry, testifying to a House committee that the initiative would help low-income people “build savings.”After FTX collapsed, however, Mr. Sanon informed Mr. Bankman that some participants in the FTX initiative may have lost funds they had stored on the platform (including money students had received as a stipend for joining the program).“They wired money in for us to be able to take care of students,” Mr. Sanon said. He declined to specify the amount that the organization received, but he said it was “substantial and very kind.”Mr. Bankman used his personal funds to cover the losses, according to his spokeswoman. Mr. Sanon said that “none of us are happy with how this played out,” but that “those folks were very good to us.”Not all of Mr. Bankman’s partners were so lucky. On Nov. 11, the day that FTX filed for bankruptcy, Mr. Bankman wrote to a Chicago nonprofit that had been promised $600,000 by FTX’s charitable arm. The money wasn’t going to materialize, Mr. Bankman explained, and he couldn’t afford to make up for the shortfall himself.“I’ll be spending substantially all of my resources on Sam’s defense,” he wrote in an email, which was obtained by The Times.Mr. Bankman-Fried’s whole family has felt the effects of his actions. Gabe Bankman-Fried resigned from Guarding Against Pandemics in November. (He did not respond to requests for comment.) Ms. Fried stepped down from Mind the Gap, which held a meeting last month to elect an interim chair and discuss how to proceed without her, people familiar with the matter said. The stress of the situation is exacting a toll: Mr. Bankman looks as if he’s aged 10 years in one month, a friend said.Mr. Bankman and Ms. Fried are part of a small group offering Mr. Bankman-Fried legal advice, according to a person familiar with the matter. The couple has also turned to the Stanford faculty for support: David Mills, a criminal law professor at Stanford and a close family friend, is part of Mr. Bankman-Fried’s legal team. Mr. Bankman has his own lawyer, the former federal prosecutor Ronald G. White.Colleagues and family acquaintances are wrestling with what to say the next time they run into Mr. Bankman and Ms. Fried. Their son has widely been compared to Bernie Madoff, the notorious fraudster who ran the largest Ponzi scheme in history.Still, many people in the family’s social circle view the situation through a sympathetic lens, according to interviews with more than a dozen friends and colleagues. They insist that Mr. Bankman and Ms. Fried couldn’t have known about any wrongdoing at FTX, while acknowledging that Mr. Bankman may have been naïve in his embrace of crypto.“It’s like a Greek tragedy,” said John Donohue, a colleague who has attended Sunday dinners at the Bankman-Fried home. “The story of flying too close to the sun, and having your wings singed.”Emily Flitter More

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    Inflation Forecasts Were Wrong Last Year. Should We Believe Them Now?

    Economists misjudged how much staying power inflation would have. Next year could be better — but there’s ample room for humility.At this time last year, economists were predicting that inflation would swiftly fade in 2022 as supply chain issues cleared, consumers shifted from goods to services spending and pandemic relief waned. They are now forecasting the same thing for 2023, citing many of the same reasons.But as consumers know, predictions of a big inflation moderation this year were wrong. While price increases have started to slow slightly, they are still hovering near four-decade highs. Economists expect fresh data scheduled for release on Tuesday to show that the Consumer Price Index climbed by 7.3 percent in the year through November. That raises the question: Should America believe this round of inflation optimism?“There is better reason to believe that inflation will fall this year than last year,” said Jason Furman, an economist from Harvard who was skeptical of last year’s forecasts for a quick return to normal. Still, “if you pocket all the good news and ignore the countervailing bad news, that’s a mistake.”Economists are slightly less optimistic than last year.Economists see inflation fading notably in the months ahead, but after a year of foiled expectations, they aren’t penciling in quite as drastic a decline as they were last December.The Fed officially targets the Personal Consumption Expenditures index, which is related to the consumer price measure. Officials particularly watch a version of the number that illustrates underlying inflation trends by stripping out volatile food and fuel prices — so those forecasts give the best snapshot of what experts are anticipating.Last year, economists surveyed by Bloomberg expected that so-called core index to fall to 2.5 percent by the end of 2022. Instead, it is running at 5 percent, twice that pace.This year, forecasters expect inflation to fade to 3 percent by the end of 2023.The Federal Reserve’s predictions have followed a similar pattern. As of last December, central bankers expected core inflation to end 2022 at 2.7 percent. Their September projections showed price increases easing to 3.1 percent by the end of next year. Fed officials will release a new set of inflation forecasts for 2023 on Wednesday following their December policy meeting.Supply chains are healing.A worker at a garment factory in Vernon, Calif.Mark Abramson for The New York TimesOne reason to think that the anticipated but elusive inflation slowdown will finally show up in 2023 ties back to supply chains.At this time last year, economists were hopeful that snarls in global shipping and manufacturing would soon clear; consumer spending would shift away from goods and back to services; and the combination would allow supply and demand to come back into balance, slowing price increases on everything from cars to couches. That has happened, but only gradually. It has also taken longer to translate into lower consumer prices than some economists had expected.Inflation F.A.Q.Card 1 of 5What is inflation? More

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    Consumers see inflation easing considerably in the next year, New York Fed survey shows

    Shoppers carry bags of purchased merchandise at the King of Prussia Mall on December 11, 2022 in King of Prussia, Pennsylvania.
    Mark Makela | Getty Images

    Consumers grew more optimistic about inflation in November amid expectations that both food and energy price increases would be less severe in the coming year, according to a New York Federal Reserve survey released Monday.
    The central bank’s Survey of Consumer Expectations indicated that respondents see one-year inflation running at a 5.2% pace, down 0.7 percentage point from the October reading.

    That’s the lowest level for that reading since August 2021 — the early days of the inflation surge that has gripped the economy and pushed the Fed into a series of aggressive interest rate hikes that is likely to continue this week. The most recent annual inflation rate as gauged by the consumer price index was 7.7% in October.
    In addition to the brightened short-term outlook, the inflation-rate projection for three years from now edged lower to 3%, down 0.1 percentage point from the previous month. A relatively new data series reflecting the five-year outlook declined by the same level, to 2.3%.

    The survey comes as Fed officials have indicated the likelihood of a 0.5 percentage point interest rate hike coming this week when policymakers conclude their two-day meeting Wednesday. If that happens, it would be the seventh rate increase of the year, taking the Fed’s benchmark short-term borrowing rate to a targeted range between 4.25%-4.5%, the highest in 15 years.
    However, the inflation news has gotten at least modestly better in recent days, a trend that would be reflected in post-meeting communications from the rate-setting Federal Open Market Committee and Chairman Jerome Powell.
    Respondents to the New York Fed survey said they see gas prices rising 4.7% and food up 8.3% in the year ahead. While those increases are still not consistent with an economy where inflation is running at the Fed’s 2% target rate, they are respective decreases of 0.6 percentage point and 0.8 percentage point from the previous month.

    The survey also indicated that wages are expected to grow 2.8% for the 12-month period, a 0.2 percentage point monthly decline and tied for the lowest level also going back to August 2021.
    However, household income is projected to grow 4.5%, with the 0.2 percentage point monthly increase taking the outlook to its highest level ever in a data series that goes back to June 2013.
    The unemployment outlook actually brightened, with 42.2% of respondents saying they think the jobless rate will be higher a year from now. The 0.7 percentage point decline came even though Fed officials have said they expect their efforts to slow the economy will hurt the labor market, which currently boasts a 3.7% unemployment rate.
    Also, worker expectations of being able to find a job in case of losing their current position rose to 58.2%, the highest level since February 2020, just before the Covid pandemic hit in full force.
    The next key inflation reading comes Tuesday with the Labor Department’s consumer price index for November. Economists surveyed by Dow Jones expect the report to show a 0.2% monthly increase and a 7.3% annual rise. Excluding food and energy, the respective forecasts for core CPI are for 0.4% and 6.1%.

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    Workers at E.V. Battery Plant in Ohio Vote to Unionize

    The result, at a plant owned by General Motors and a South Korean company, is a milestone for the auto union in organizing electric vehicle workers.In an early test of President Biden’s promise that the transition to electric vehicles will create high-paying union jobs, employees at a battery plant in eastern Ohio have voted to join the United Automobile Workers union.The outcome appears to create the first formal union at a major U.S. electric car, truck or battery cell manufacturing plant not owned entirely by one of the Big Three automakers. The factory, known as Ultium Cells, is a joint venture of General Motors and the South Korean manufacturer LG Energy Solution.A union statement early Friday said the result was 710 to 16 in two days of balloting.“As the auto industry transitions to electric vehicles, new workers entering the auto sector at plants like Ultium are thinking about their value and worth,” said Ray Curry, the U.A.W. president, in the statement. “This vote shows that they want to be a part of maintaining the high standards and wages that U.A.W. members have built in the auto industry.”The National Labor Relations Board said it had received the tally and would move to certify the result if no objections were filed.Mr. Biden issued a statement after the vote saluting the Ultium workers and declaring, “In my administration, American and union workers can and will lead the world in manufacturing once again.”While existing plants owned by the three legacy U.S. automakers have maintained a union presence as they have shifted production to electric vehicles, the union must start from scratch at plants like the one in Ohio and joint ventures through which Ford Motor is building battery factories in the South. Other electric vehicle companies, like Tesla, Rivian and Lucid, are also not unionized.The autoworkers union has long worried about the transition to electric vehicles, first noting in a 2018 research paper that electric vehicles require about 30 percent less labor to produce than internal combustion vehicles. The paper also pointed out that the United States was falling far behind Asian and European countries in establishing an electric vehicle supply chain.Read More on Electric VehiclesGoing Mainstream: U.S. sales of battery-powered cars jumped 70 percent in the first nine months of the year, as non-affluent buyers are choosing electric vehicles to save money on gas.A Bonanza for Red States: No Republican in Congress voted for the Inflation Reduction Act. But their states will greatly benefit from the investments in electric vehicles spurred by the law.Rivian Recall: The electric-car maker said that it was recalling 13,000 vehicles after identifying an issue that could affect drivers’ ability to steer some of its vehicles.China’s Thriving Market: More electric cars will be sold in the country this year than in the rest of the world combined, as its domestic market accelerates ahead of the global competition.A report last year by the Economic Policy Institute, a liberal think tank, estimated that the transition to electric vehicles could cost at least 75,000 U.S. auto industry jobs by 2030 if the government did not provide additional subsidies for domestic production, but could create 150,000 jobs if those subsidies were forthcoming.An ambitious climate and health care bill signed by Mr. Biden in August provided tens of billions of dollars in subsidies for the industry, raising the probability that auto industry jobs will be created rather than lost.But while Congress included certain incentives for union-scale wages in the construction of new plants, it ultimately removed elements of the legislation that would have helped ensure the creation of union jobs, such as a $4,500 incentive for vehicles assembled at a unionized facility in the United States.Josh Bivens, an author of the Economic Policy Institute report, said in an interview that he was pleasantly surprised that the administration managed to pass strong incentives for domestic production of electric vehicles. But whether the incentives will lead to good jobs, he added, is an open question.“There’s no real explicit subsidy or incentive to make these unionized or even high-wage,” Mr. Bivens said.Under the union’s contract with the Big Three automakers, veteran rank-and-file production workers make about $32 per hour. New hires start at a substantially lower wage and work their way up to that amount over several years.By contrast, companies that make electric vehicles or their components typically pay workers hourly wages in the midteens to the mid-20s.The union campaign at the Ohio plant was one of the easier tests facing U.A.W. organizers at electric vehicle facilities. The plant is in Warren, within a mile or two of a unionized General Motors facility in Lordstown that operated for decades before the company idled it and then sold it in 2019, making local residents familiar with the benefits of union membership.And while Ultium did not agree to a so-called card check process that could have bypassed a union election, it also did not wage a campaign seeking to dissuade workers from unionizing, according to a U.A.W. spokeswoman. Mary T. Barra, the General Motors chief executive, said in an interview on Bloomberg Television last week that the company was “very supportive” of the plant’s unionization.It is less clear how successful the union will be at organizing other new electric vehicle plants, such as an Ultium facility being built in Tennessee or three factories being built jointly by Ford and the South Korean battery maker SK Innovation in Kentucky and Tennessee, where the political culture is less hospitable to unions. Battery packs, which can cost around $15,000, are by far the most expensive component of an electric vehicle powertrain, the key parts and systems that power a car.The task may be even taller at plants owned solely by foreign manufacturers, such as an SK battery plant in Georgia or a huge plant that Hyundai is building in the state. The union has for decades struggled to organize so-called transplant facilities owned by foreign automakers in the South.Workers at the Ultium plant in Ohio, which began production this year, cited pay and safety issues as key reasons for unionizing. Dominic Giovannone, who helps fabricate battery cells, said he was now making about $16.50 per hour — a roughly $8 pay cut from his job at a plastic bag factory. He said the Ultium job attracted him because the plant was far closer to his home than his previous job had been.An Ultium spokeswoman said that hourly pay for rank-and-file workers ranged from $15 to $22 depending on experience and skills, and that the company paid a quarterly bonus and provided benefits as soon as employment began.Mr. Giovannone said that while the health care benefits were “phenomenal,” he wished the 401(k) match were more generous. He also said workers in his department were frequently required to handle harsh chemicals without enough information from the company to ensure that they did so safely.The lack of specific guidance on chemicals “is a big concern in the plant,” he said, adding that supervisors had not been very responsive when he and his co-workers prodded them on the issue.Ethan Surgenavic, a heating, ventilation and air-conditioning specialist at the plant, whose department is responsible for indoor conditions such as keeping humidity extremely low around certain components, said he, too, had taken a large pay cut to work there. He now makes $29 per hour, down from about $42, but he said the job also substantially reduced his commute.He agreed that the health benefits were strong but shared Mr. Giovannone’s concerns about safety. Mr. Surgenavic said that when workers raise questions about safety rules, “it feels like it lands on deaf ears.” He cited worries about having to change a machine’s air filter in a room that contains toxic material.The Ultium spokeswoman said that signs were posted throughout the plant with QR codes linking to safety information, and that paper handouts were also available. She said that the company had specific safety standards for issues like respiratory protection and chemical control and that it encouraged all workers to report concerns.The union campaign at Ultium took place against the backdrop of a recent U.A.W. election in which reformist candidates defeated several members of the longtime leadership caucus, citing rampant corruption within the union and members’ frustrations with limited improvements in their contracts over the past decade.In an interview, Shawn Fain, who will face the incumbent president, Mr. Curry, in a runoff election, said the union’s relative lack of progress in organizing electric vehicle plants reflected years of complacency with the union’s leadership.Mr. Fain said the Big Three automakers pursued electric vehicle joint ventures with foreign companies to make it harder for workers there to unionize. “The whole system is put together to circumvent the U.A.W. and any type of relationships with current members and employees,” he said. “At the first sign of that, our leadership should have went to war.”General Motors said it relied on joint ventures to bring in expertise that complemented its existing battery technology and to help meet the projects’ enormous capital requirements. The U.A.W. did not respond to a request for comment. More

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    Wholesale prices rose 0.3% in November, more than expected, despite hopes that inflation is cooling

    The producer price index, a measure of what companies get for their products in the pipeline, increased 0.3% for the month and 7.4% from a year ago.
    A 38% surge in wholesale vegetable prices helped push the food index up by 3.3%, offsetting an identical 3.3% decline in energy costs.
    Markets now will turn their attention to the more closely watched consumer price index, which is due out Tuesday morning.

    Wholesale prices rose more than expected in November as food prices surged, dampening hopes that inflation could be headed lower, the Labor Department reported Friday.
    The producer price index, a measure of what companies get for their products in the pipeline, increased 0.3% for the month and 7.4% from a year ago, which was the slowest 12-month pace since May 2021. Economists surveyed by Dow Jones had been looking for a 0.2% gain.

    Excluding food and energy, core PPI was up 0.4%, also against a 0.2% estimate. Core PPI was up 6.2% from a year ago, compared with 6.6% in October.

    Stocks fell following the report after previously indicating a positive open on Wall Street. Treasury yields moved higher.
    Markets now will turn their attention to the more closely watched consumer price index, which is due out Tuesday morning. A day later, the Federal Reserve will conclude a two-day meeting with an announcement on where interest rates are heading.
    The hot inflation data keeps the Fed on track for another rate increase, likely a 0.5% hike that would push benchmark borrowing rates to a target range of 4.25%-4.5%. Policymakers have been pushing rates higher in an effort to quell stubborn inflation that has emerged over the past 18 months after being mostly dormant for more than a decade.
    “The monthly increase in producer prices illustrates the need for continued tightening, albeit at a slower pace,” said Jeffrey Roach, chief economist at LPL Financial. “The inflation pipeline is clearing and consumer prices will slowly move closer to the Fed’s long run target.”

    In other economic news Friday, the University of Michigan Index of Consumer Sentiment came in higher than expected, registering a 59.1 reading against the Dow Jones estimate for 56.5 and below November’s 56.8. One-year inflation expectations also moved lower, falling to 4.6%, 0.3 percentage point below a month ago.
    Also, wholesale trade inventories rose 0.5% in October, below the 0.8% estimate.
    The market was most focused on the PPI report, though the consumer sentiment survey provided some optimism on the inflation front.
    Services inflation accelerated for the month, rising 0.4% after being up just 0.1% the previous month. One-third of that gain came from the financial services industry, where prices surged 11.3%. That was offset somewhat by a sharp decline in passenger transportation costs, which fell 5.6%.
    On the goods side, the index rose just 0.1%, a steep decline from its 0.6% October gain. That modest gain came despite a 38.1% acceleration in prices for fresh and dry vegetables. Prices moved higher across multiple food categories even as the gasoline index tumbled 6%.
    Roach said the soaring food price index is “likely an anomaly and not necessarily reflecting a change in trend.”
    The release comes amid other signs that price increases were at least decelerating from a pace that had put inflation at its highest level in more than 40 years. However, the data Friday, which tends to be a leading indicator of underlying price pressures, shows that shaking off inflation could be a long slog.
    A year ago, headline PPI rose 1% for the month and 10% on a 12-month basis.
    “Month-over-month PPI rising slightly and coming in just over expectations is yet another reminder of how sticky inflation is and that it will take time before we see it normalize,” said Mike Loewengart, head of model portfolio construction for Morgan Stanley’s Global Investment Office. “Keep in mind compared to where we were a year ago, we are in a better place and headed in the right direction.”
    This was the third month in a row that headline PPI increased 0.3%. On an annual basis, the increase represents a decline from the 11.7% peak hit in March, but is still well ahead of the pre-pandemic pace at least going back to 2010.
    The increase came despite a 3.3% decline in final demand energy costs. That was offset by an identical 3.3% increase in the food index. The trade index rose 0.7%, while transportation and warehousing fell 0.9%.
    Excluding food, energy and trade services, PPI increased 0.3% from a month ago and was up 4.9% on an annual basis, the lowest since April 2021.

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