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    Auto Sales Withstand Higher Interest Rates, So Far

    General Motors and several rivals cited robust demand in the first quarter. But affordability is a growing challenge for many buyers.Automakers have mostly overcome the supply-chain challenges that upended production early in the pandemic. Now they are trying to weather a new challenge: higher borrowing costs for their customers.General Motors and several other automakers reported on Monday that new-vehicle sales increased substantially in the first three months of the year, thanks to improved supplies of key components and firm demand from both consumers and commercial customers.But the steady interest rate increases in the last 12 months have raised questions about whether the industry can maintain its sales momentum throughout 2023.Jonathan Smoke, the chief economist at the market research firm Cox Automotive, said higher rates were already starting to put new vehicles out of the reach of buyers with lower incomes or weaker credit scores.According to Cox, “subprime” borrowers — those with weaker credit profiles — make up just under 6 percent of all new-car purchases, down from 18 percent five years ago. Car buyers paid an average interest rate of 8.95 percent last month, up from 5.66 percent in March 2022.The average monthly payment on new vehicles was $784 in February, compared with $681 a year earlier, Cox calculated.“Affordability challenges are limiting access to the vehicle market,” Mr. Smoke said. “Higher interest rates are having a huge impact.”Sticker prices have also challenged buyers. Auto prices — for new and used vehicles alike — have been a prominent driver of inflation over the last two years, although there are signs they are cooling off. The average price for a new car or light truck in February was $48,763, according to Cox — up from $46,297 a year earlier, but down from $49,468 in January.Mr. Smoke said automakers got off to a strong start in January and February, but saw credit tighten somewhat in March after the banking industry was shaken by the collapse of Silicon Valley Bank and Signature Bank.G.M. said its new-vehicle sales in the United States rose 18 percent in the first three months of the year, to 603,208 cars and trucks. Sales to consumers rose 15 percent and sales to rental, corporate and government fleet customers increased 27 percent.In the last several months, G.M. has been able to keep its factories humming as a result of steadier supplies of computer chips and other critical parts. The company ended the quarter with 412,285 vehicles in dealer stocks, up slightly from what it had at the end of 2022, but nearly 140,000 more than it had a year earlier.Honda Motor reported that its U.S. sales increased 7 percent to 284,507 cars and trucks, while Nissan saw a gain of 17 percent, to 235,818. Hyundai said its U.S. sales rose 16 percent to 184,449.Toyota Motor, however, has continued to suffered from parts shortages that have left its dealers with slim inventories. Its first-quarter sales fell 9 percent to 469,558 cars and trucks. Stellantis, formed through the merger of Fiat Chrysler and Peugeot SA, also reported a decline. Its sales fell 9 percent to 368,327 cars and trucks.Ford Motor is scheduled to report its latest sales figures on Tuesday.G.M. has forecast a rapid increase this year in sales of electric vehicles; so far, it is off to an uneven start. The company sold 19,700 Chevrolet Bolt compacts in the first quarter, more than three times the total a year earlier, but other models have yet to make a splash.Sales of the Cadillac Lyriq, an electric sport-utility vehicle, totaled just 968, and G.M. sold only two GMC Hummer E.V.s, down from 99 in the first quarter of 2022.G.M. started production last summer at a new plant in Ohio that is supposed to provide battery packs for the Hummer E.V., the Lyriq and several other vehicles scheduled to arrive in showrooms this year. They include electric versions of the Chevrolet Silverado pickup and the Chevy Equinox and Blazer S.U.V.s. More

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    Biden’s Reluctant Approach to Free Trade Draws Backlash

    A law intended to bolster clean energy manufacturing has ignited debate over whether the U.S. should work to break down international trade barriers — or keep them intact to protect American workers.WASHINGTON — Since President Biden came into office two years ago, the United States has declined to pursue new comprehensive free-trade agreements with other countries, arguing that most Americans have turned against the kind of pacts that promote global commerce but that also help to send factory jobs overseas.But in recent months, with the rollout of a sweeping climate bill intended to bolster clean energy manufacturing, the lack of free-trade agreements with some of America’s closest allies has suddenly become a major headache for the administration.The dispute, which centers on which countries can receive benefits under the Inflation Reduction Act, has caused significant rifts with foreign governments and drawn blowback from Congress. And it is helping to reignite a debate over whether the United States should be working to break down trade barriers with other countries — or keep them intact in an attempt to protect American workers.The law as written offers tax credits for electric vehicles that are built in North America or that are made with battery minerals from the United States and countries with which it has a free-trade agreement.Those provisions have angered allies in Europe and elsewhere that, despite close ties with America, do not actually have free-trade agreements with the United States. They have complained that companies in their countries would be put at a disadvantage to U.S. firms that can receive the subsidies. To soothe relations, the Biden administration has developed a complicated workaround, in which it is signing limited new trade deals with Japan and the European Union.But that solution has vexed lawmakers of both parties, who say that these agreements are not valid and that the administration needs to ask Congress to approve the kind of free-trade agreement the law envisions.“It’s a fix,” said Edward Alden, a senior fellow at the Council on Foreign Relations who specializes in trade, adding that they were not free-trade agreements “by any reasonable definition of the term.”The World Trade Organization defines a free-trade agreement as covering “substantially all trade” between countries. In the United States, such broad agreements need the approval of Congress, though the executive branch has the authority to negotiate much narrower agreements.Administration officials argue that because the Inflation Reduction Act does not define the term “free-trade agreement,” these narrower pacts are allowed. But in hearings before the House and the Senate last month, lawmakers criticized the administration for bypassing Congress in making these agreements.Some lawmakers argued for more traditional free-trade deals, while others voiced support for new deals with higher labor and environmental standards, like the North American agreement Congress approved in 2020.In hearings, Katherine Tai, the U.S. trade representative, highlighted efforts to raise global labor standards and decarbonize industries, and said she and her colleagues were “writing a new story on trade.”Mariam Zuhaib/Associated PressIn her opening statement at the hearings, Katherine Tai, the United States trade representative, set out a vision for a trade policy that was different from those of previous administrations, focused more on defending American workers from unfair foreign competition than opening up global markets. Ms. Tai said she and her colleagues were “writing a new story on trade” that would put working families first and reflect the interests of a wider cross section of Americans.Speaking before the Senate on Thursday, Ms. Tai said she remained “open minded” about doing more trade agreements if they would help address the challenges the country has today.The Biden administration has long insisted that past approaches to trade policy — in which other countries gained access to the U.S. market through low or zero tariffs — ended up hurting American workers and enriching multinational companies, which simply moved U.S. jobs and factories overseas. In contrast, Biden officials have pledged to strengthen the economy and to make the country more competitive with China by expanding the country’s infrastructure and manufacturing, rather than negotiating new trade deals.The administration is currently negotiating trade frameworks for the Indo-Pacific region and the Americas, and is engaging in trade talks with Taiwan, Kenya and other governments. But, to the dissatisfaction of some lawmakers in both parties, none of these agreements are expected to involve significantly opening up foreign markets by lowering tariffs, as more traditional trade deals have done..css-1v2n82w{max-width:600px;width:calc(100% – 40px);margin-top:20px;margin-bottom:25px;height:auto;margin-left:auto;margin-right:auto;font-family:nyt-franklin;color:var(–color-content-secondary,#363636);}@media only screen and (max-width:480px){.css-1v2n82w{margin-left:20px;margin-right:20px;}}@media only screen and (min-width:1024px){.css-1v2n82w{width:600px;}}.css-161d8zr{width:40px;margin-bottom:18px;text-align:left;margin-left:0;color:var(–color-content-primary,#121212);border:1px solid var(–color-content-primary,#121212);}@media only screen and (max-width:480px){.css-161d8zr{width:30px;margin-bottom:15px;}}.css-tjtq43{line-height:25px;}@media only screen and (max-width:480px){.css-tjtq43{line-height:24px;}}.css-x1k33h{font-family:nyt-cheltenham;font-size:19px;font-weight:700;line-height:25px;}.css-1hvpcve{font-size:17px;font-weight:300;line-height:25px;}.css-1hvpcve em{font-style:italic;}.css-1hvpcve strong{font-weight:bold;}.css-1hvpcve a{font-weight:500;color:var(–color-content-secondary,#363636);}.css-1c013uz{margin-top:18px;margin-bottom:22px;}@media only screen and (max-width:480px){.css-1c013uz{font-size:14px;margin-top:15px;margin-bottom:20px;}}.css-1c013uz a{color:var(–color-signal-editorial,#326891);-webkit-text-decoration:underline;text-decoration:underline;font-weight:500;font-size:16px;}@media only screen and (max-width:480px){.css-1c013uz a{font-size:13px;}}.css-1c013uz a:hover{-webkit-text-decoration:none;text-decoration:none;}How Times reporters cover politics. We rely on our journalists to be independent observers. So while Times staff members may vote, they are not allowed to endorse or campaign for candidates or political causes. This includes participating in marches or rallies in support of a movement or giving money to, or raising money for, any political candidate or election cause.Learn more about our process.Representative Adrian Smith, a Nebraska Republican who leads the House Ways and Means trade subcommittee, said in the hearing that he was concerned the United States had “lost momentum on trade” even as China continued to aggressively broaden its own partnerships.“I cannot express strongly enough,” he added, “that the administration cannot just come up with new definitions of what a trade agreement is for some reason, and certainly not to give handouts for electric vehicles.”“You have to appreciate that we live in a very different world,” Ms. Tai responded. She said the Biden administration sought to adapt its policies to respond “to the world we’re living in, and not the world that we want to live in.”Part of the pressure stems from the fact that other countries — including China — are continuing to pursue more traditional trade deals that lower their tariffs with trading partners, giving their companies an advantage over businesses based elsewhere. On Friday, British officials announced that they had reached an agreement to join a Pacific trade pact that, despite being devised by the Obama administration, does not include the United States.Membership in the so-called Comprehensive and Progressive Agreement for Trans-Pacific Partnership will allow Britain to export products tariff-free to 11 other countries. With the inclusion of Britain, the pact will represent 15 percent of the global economy, British officials said.Jake Colvin, the president of the National Foreign Trade Council, a U.S. group that lobbies on behalf of major multinational companies, called the news “a stark reminder that the world isn’t waiting for the United States.”“While we congratulate the U.K. government for being part of this massive agreement, it’s frustrating to see America’s allies writing global rules and creating new market opportunities without the United States,” he said.Politicians of both parties have found support for free-trade agreements to be controversial in the United States in recent years. The Trans-Pacific Partnership — the original deal negotiated by the Obama administration with 11 other nations circling the Pacific Ocean — received criticism from labor unions and other progressive Democrats who said it would ship jobs overseas. Hillary Clinton opposed it as a candidate in the 2016 presidential election.As president, Donald J. Trump also criticized the deal and officially withdrew the United States from it in 2017. He also scrapped a negotiation over a comprehensive trade deal the Obama administration had been carrying out with the European Union.The Biden administration is trying to reach trade frameworks for the Indo-Pacific region and the Americas, but none of these agreements are expected to involve significantly opening up foreign markets by lowering tariffs.Coley Brown for The New York TimesMr. Trump went on to sign a series of limited trade deals with Japan and China without congressional approval. He also oversaw an update to the North American Free Trade Agreement that was ratified by Congress, which he named the U.S.-Mexico-Canada Agreement.Democrats also came to support that deal after adding significant protections for workers and the environment.Some trade experts have speculated that the Biden administration will try to build on the success of the U.S.M.C.A. by adding more nations to the pact, or by applying its terms to negotiations elsewhere. But so far, the Biden administration has not announced any such plans.Two top Democratic lawmakers focused on trade issued a statement last week criticizing the limited agreement the Biden administration had signed with Japan and urging officials to try to replicate the success of the U.S.M.C.A. by working with Congress to draft new deals with enforceable environmental and labor protections.“U.S.M.C.A. is a prime example of what’s possible when the executive and Congress collaborate, and its enforcement mechanisms should be the floor for future agreements,” Representative Richard E. Neal of Massachusetts, the top Democrat on the Ways and Means Committee, and Senator Ron Wyden, a Democrat of Oregon who leads the Finance Committee, said in the statement.Republicans have also been split over how aggressively to pursue new free-trade agreements. More traditional free-traders — like those from agricultural states that depend on exporting goods overseas — have been at odds with a growing populist contingent that favors industrial policy and trade barriers to protect American workers.Still, Kelly Ann Shaw, a partner with Hogan Lovells in Washington and a former economic adviser to the Trump administration, said that “the amount of inaction by the administration is doing a lot to unify Republicans” around pursuing more free-trade deals.“If you would ask me two years ago, I would have thought that Republicans were more split on this issue than they really are,” she said. “But it’s pretty clear that we’re losing out on opportunities by sitting on our hands and doing nothing.” More

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    Broadcast News Is at Center of Fight Over Noncompete Clauses

    Job-switching barriers are routine at TV stations, even for workers not on the air. A proposed federal rule would curb the practice across all fields.Of all the professions, perhaps none is more commonly bound by contracts that define where else an employee can go work than local television news.The restrictions, known as noncompete clauses, have been a condition of the job for reporters, anchors, sportscasters and meteorologists for decades. More recently, they’ve spread to off-air roles like producers and editors — positions that often pay just barely above the poverty line — and they keep employees from moving to other stations in the same market for up to a year after their contract ends.For that reason, there’s probably no industry that could change as much as a result of the Federal Trade Commission’s effort to severely limit noncompete clauses — if the proposed rule is not derailed before being finalized. Business trade associations are lobbying fiercely against it.“The vast majority of people who work in this country, if they find themselves in a bad situation and they don’t like it, they have options to leave, and they don’t have to move,” said Rick Carr, an agent who represents broadcast workers. “And TV doesn’t allow that.”The pending rule would most likely help people like Leah Rivard, who produces the 6 p.m. and 10 p.m. newscasts at WKBT in La Crosse, Wis.She was hired in the summer of 2021, at an hourly rate of $15. A year later, the station brought on a cohort of recent journalism school graduates as part of a new training program that promised to pay off a chunk of their student loans. Several longer-tenured producers left, and Ms. Rivard wanted to leave, too, since she ended up having to teach a bunch of inexperienced young people how to write scripts and edit video.When Ms. Rivard spoke to her managers, she was told that if she left for another station anywhere in the country before her contract expired this year, they could sue her. So she has continued to work for the station, an experience she’s called “absolute hell.” But even after her contract ends in June, a noncompete clause will prevent her from working for any of the other stations in La Crosse or Eau Claire, an hour and a half north, for a year after that.Ms. Rivard plans to look for work in Milwaukee, and since she doesn’t have much to tie her down in La Crosse, she’s eager to leave. But for plenty of older employees with children in school and mortgages to pay, a noncompete means there’s no easy way out.“If your station is so toxic that it’s affecting you, and you want to leave, you have to leave news altogether and find a public relations job,” Ms. Rivard said. “It leaves no accountability for the company to be a good company for employees.”Chris Palmer, WKBT’s general manager, said he believed noncompetes benefited both employers and employees.“We invest a lot of time and money training and publicly marketing an individual journalist, which, in turn, increases the value of that journalist in the local market,” he said. “These employees also have access to proprietary local research and strategic investments. It would be unfair for that to benefit a direct competitor without protection.”Noncompete clauses have become standard in many workplaces and cover about 18 percent of the U.S. labor force, according to research by economists at the University of Maryland and the University of Michigan.In broadcasting, though, noncompetes are ubiquitous. According to a survey of TV news directors by Bob Papper, an adjunct professor at the S.I. Newhouse School of Public Communications at Syracuse University, about 90 percent of news anchors, 78 percent of reporters and 87 percent of weathercasters were bound by noncompetes in 2022. Those numbers have been fairly stable for decades.Amy DuPont quit her job as an anchor at WKBT and went to work in public relations, knowing that she wouldn’t be allowed to work locally in broadcasting for another year.Narayan Mahon for The New York TimesIn recent years, however, noncompetes have grown to cover a far wider swath of the newsroom. About half of digital writers and content managers, 71 percent of producers and 86 percent of multimedia journalists have clauses restricting their ability to work elsewhere in the market after their contracts end. That’s up significantly from when Mr. Papper started tracking contract provisions in depth two decades ago.That growth has occurred despite a campaign by the one of the biggest labor unions in television, SAG-AFTRA, to limit noncompetes for broadcast employees. Since the mid-90s, the group has been successful in a handful of states — like Massachusetts and Illinois — while failing in others, like Michigan and Pennsylvania. Some states, most notably California, decline to enforce most noncompetes, regardless of the industry.In states that circumscribe noncompetes, where SAG-AFTRA also tends to have the most members, the union says workers enjoy higher wages and more freedom to escape bad workplace conditions — particularly important for women, in a field notorious for sexual harassment.“We have seen more flexibility within our membership, and also nonunion shops, for employees who decide at the end of their contract that they’d like to move on,” said Mary Cavallaro, the chief broadcast officer for SAG-AFTRA. But the National Association of Broadcasters — which signed on to a multiindustry letter opposing the federal government’s proposed ban — says that because stations promote their reporters and anchors to develop their local brand recognition, they should be able to prevent them from “crossing the street,” in industry parlance.“While there are certainly some cases where noncompete clauses are overly restrictive, we believe a categorical ban goes too far and that broadcasting presents a unique case for the use of reasonable noncompete clauses for on-air talent,” said Alex Siciliano, a spokesman for the association.Mr. Siciliano did not respond to a further inquiry about why noncompetes were needed for employees not appearing on air.To many broadcasting veterans, the main reason that stations impose noncompetes is clear: There’s a recruiting crunch in broadcast news, particularly for producers. It’s a difficult job, with either very early or very late hours and tight deadlines. It requires a college degree and sometimes a master’s degree in journalism, and pay is no longer competitive for people with media skills. The median salary for a producer is $38,000, according to Mr. Papper’s survey.“There is a belief on the part of non-news executives that working in TV news is still glamorous enough that people are lining up to go into the business,” Mr. Papper said. “But what I’m hearing is that they’re not lining up anymore. And the fact is that the skill set you learn in college that allows you to start in TV news also allows you entry into a whole lot of other, better-paying jobs.”The apparent disconnect between television news management and the pool of available talent has meant that job postings stay open longer. When an offer is extended, it comes with an almost inescapable time commitment.Beth Johnson, a television talent agent, says she had to move from exclusively representing clients to more training and consulting, since newsroom employees were no longer able to move around enough to negotiate significant pay raises. The rapid consolidation in local news, with major companies like Nexstar and Sinclair buying out smaller ownership groups, has further diminished the employees’ options.“It’s really hard for these journalists to make a good living, and it’s getting harder to leverage to make sure they can,” Ms. Johnson said. “So we wanted to pivot to say to journalists, ‘It doesn’t make sense for you to pay me for three years, because you’re not going to make enough to keep me for three years, but you’re really going to need help with that promotion for a year.’”Although reporters and anchors are paid slightly better than producers, they are routinely forced to move if they need to earn more. If they can’t leave town, they often leave the business. The docket for the Federal Trade Commission’s proposed noncompete ban is peppered with examples of reporters and producers whose careers had been constrained or cut short by the inability to leave their employer for similar work nearby.Take Amy DuPont, one of Ms. Rivard’s former colleagues at WKBT. After working as an anchor in San Diego and Milwaukee, she moved with her husband to La Crosse, her hometown, after he retired from the military. When Ms. DuPont felt she had reached a breaking point at the station, she quit for a job in public relations. Other stations in town asked if she was interested in switching over, but she didn’t even try.“Even if I wanted to, I’m not legally able to go there,” said Ms. DuPont, who now represents Kwik Trip, the Midwestern gas station chain. “For someone like me, who’s married and 43 years old with two children, and I own my home, it prevents me from doing my career, something I’ve spent 22 years doing.”Ultimately, when journalists have to switch cities to earn enough to keep up with the cost of living, local residents lose a trusted source of reporting.David Jones worked in broadcast news for 23 years, mostly in management roles that required him to recruit and hire. He quit in 2021 to join a public relations firm, and posted a long meditation on LinkedIn about how inhospitable the industry had grown for employees.Not mentioned, but under the surface, were noncompetes, which hurt the public as well as the people bound by them, he said in an interview.“You really want someone with market knowledge,” Mr. Jones said, “which isn’t to say that someone can’t come in and learn the market quickly, but there’s so much benefit to the community when you’re able to do that. With noncompetes, you almost never get to do that.” More

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    Paying more and earning less: How inflation disproportionately hurts women

    People shop at the Pioneer Supermarkets on January 12, 2023 in the Flatbush neighborhood of Brooklyn borough in New York City. 
    Michael M. Santiago | Getty Images

    There’s one group of people that’s being disproportionately hurt by high inflation: women.
    The relentless rise in prices hurts women two-fold. First, a jump in child care prices has started to pressure women out of the workforce. Child care costs in the U.S. have outpaced wage growth in recent years, with day care and preschool prices jumping 5.7% year over year in February 2023 and 25% over the last decade, according to the Bureau of Labor Statistics. Child care inflation, which has increased 214% from 1990 to 2022, has outpaced average family income gains, which have risen 143%. 

    At the same time, sectors with the highest share of female workers are seeing inflation outpace wage increases. The healthcare and education sectors, of which 75% of workers are women, had the second-to-lowest increase in nominal wages in 2022. 
    The Ellevest Women’s Financial Health Index, which examines indicators such as employment rates, inflation, reproductive autonomy and the pay gap, has found recent progress to be a mixed bag. While the index has slightly risen from its lowest levels in November 2022 — which was lower than at any point during the pandemic — ongoing inflation is casting an overhang on further improvements. Last year’s sharp drop in women’s financial health aligned with inflation levels reaching double digits.

    “While women are paying more, they also earn less,” according to Dimple Gosai, Bank of America’s head of U.S. ESG strategy. “The pandemic made the child care crisis undeniably worse, and inflationary pressures are adding fuel to the fire. Surprisingly, over 50% of parents spend over 20% of their income on child care in the US.” Gosai added that rising child care costs can both keep and push women out of the workforce, undoing progress made in recent years to close the gender parity. 
    “Caregiving responsibilities are preventing more women from getting into, remaining, and progressing in the labor force. This is more the norm than the exception,” said Gosai. “The pandemic worsened this gap, with women taking on more of the additional child care burden than men.”
    The supply crunch in the child care industry stems from low worker retention due to low wages, an issue that predates the Covid pandemic. Child care providers are now faced with a dilemma of offering competitive wages to their workers as well as affordable prices to families and caregivers. 

    “We have seen a negative shock to the supply of child care providers in this recovery, and that could make this problem even worse going forward, but child care costs are more systemic than other shorter-term inflation pressures we’ve seen. Absent public investment, there’s just not much margin to give in this market, and that’s one reason the Treasury department found child care is a failed market,” said Mike Madowitz, director of macroeconomic policy at the Washington Center for Equitable Growth.
    It’s not just women with children who are disproportionately affected by inflation. Women and minorities are underrepresented in higher-wage industries, such as technology or finance, that are more insulated from inflation pressures, Gosai noted. The researcher deemed the phenomenon as “occupational segregation.”
    Furthermore, inflation has made women’s shopping carts become more expensive at a faster rate — exacerbating the problem of the “pink tax,” or the cost premium on goods and services market toward women compared to similar products for men. 

    Long-term implications

    The negative impact of rising prices on women is not just short-term but has long-term implications for their financial well-being. The Bank of America Institute found in January that women’s 401(k) balances are just two-thirds that of men.
    “Because of both [the] COVID and inflation crisis, women are much more likely to have broken into their retirement savings,” said Ariane Hegewisch, program director of employment and earnings at The Institute for Women’s Policy Research.
    “Debt is much higher, [and] rental costs have gone up. So, there’s now an even bigger hole in retirement or in wealth or any kind of security right the financial security that [women] may have, and that needs to be rebuilt.” 
    The Washington Center’s Madowitz said that the Federal Reserve’s aggressive interest rate hikes in its fight against inflation could be “the opposite of helpful in improving women’s economic health and opportunity” in the near-term. The Fed has been raising rates since last year, when the overnight was set at zero. Currently, it sits in a range between 4.75% and 5%.
    Because of this, some are worried that the process of cooling down the economy will have an outsized impact on women, particularly women of color.
    “If the FOMC raises interest rates too high in an effort to reach its 2% inflation target faster, that would hurt worker demand, and harm those already facing more labor market barriers — namely, women workers and workers of color,” Madowitz noted.
    Hegewisch also pointed out that higher rates could lead to higher unemployment, which would hurt women disproportionately.
    “Unemployment is always higher for women of color, and men of color, than it is for others,” noted Hegewisch. “Unemployment is double for black women compared to white women and almost as much for Latinos. And so, if it doubles, it goes [up] at a much higher rate for black women than it does for white women.”
    One solution that may alleviate the pressures of inflation on gender parity is if companies invest more in their employees’ well-being, Bank of America’s Gosai said. She named enhanced reproductive health care benefits, subsidized child care and flexible work arrangements as ways corporations can offset the pressures of higher costs on women. 

    What can be done?

    A critical step to rectifying some of the damage of high prices on women’s economic health and opportunity may also be passing more comprehensive social infrastructure legislation. Madowitz said policies such as President Joe Biden’s failed Build Back Better Act could not only help women’s economic prospects, but also prevent inflation from reaching such high levels in the future. 
    “Those investments in child care, eldercare and healthcare, public education, and income support programs would tackle consistently rising prices by increasing labor supply and women’s earnings, as well as help alleviate a good chunk of the pressure that keeps women out of the labor force and limits their upward mobility,” said Madowitz.
    Rising prices is one portion of the economic barriers that women face — meaning that even after inflation cools, further initiatives must be taken to ensure equal opportunities. 
    “This is an issue that’s ingrained. It’s a bigger issue and it touches so many different sectors and so many different geographies. That it isn’t something that’s just simply eradicated by inflation,” said Gosai. “Women earn 82 cents for every $1 that a man earns. That’s something that doesn’t change [even]  if inflation goes down tomorrow. It’s something that takes a long time to get fixed. … It’s a vicious cycle. 
    “You need more women that are financially independent and empowered to get educated, to enter the job force, and have those opportunities so they could have an equal footing and they can compete equally.”
    — CNBC’s Gabe Cortes contributed reporting More

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    Top Economist Leaves White House, and an Economy Not Yet ‘Normal’

    Cecilia Rouse says lingering effects of the coronavirus pandemic continue to haunt the recovery from recession — and drag on Americans’ optimism for the economy.WASHINGTON — Cecilia Rouse, the chair of the White House Council of Economic Advisers, stepped down on Friday to return to teaching at Princeton University. As a going-away present fit for an economist, her staff presented her with a chart showing every previous chair of the council, ranked by the number of jobs created during their tenure.Dr. Rouse’s name tops the list. In the two years since she was confirmed to be President Biden’s top economist, becoming the first Black chair of the council, the U.S. economy has created more than 11 million jobs. While that is a record for any presidential administration, it is also a direct result of the unusual circumstances of the fast-moving pandemic recession, which temporarily kicked millions of people out of the labor force before a swift recovery added back most of those jobs.As Dr. Rouse acknowledged in an interview this week, all that job growth has yet to restore a full sense of economic normality. Inflation remains much higher than normal. Consumers are pessimistic. The economy and the people who live and work in it, she said, are still to some degree stuck in the grip of the coronavirus pandemic.That phenomenon has scrambled markets like commercial real estate, Dr. Rouse said, exacerbated price growth and most likely hurt productivity across the economy by encouraging remote work. She said she believed in-person work was more likely to produce innovation that stokes economic growth.The effects have lingered longer than she initially expected.“We still have Covid with us,” Dr. Rouse said in her office at the Eisenhower Executive Office Building. “It is still impacting decisions that we’re making, whether it’s on our personal side, economic decisions.”She later added, “Sometimes I, in this course of the last few years, I wished my Ph.D. was in psychology.”In a wide-ranging interview reflecting on her time at the council, Dr. Rouse defended the Biden administration’s policy choices in responding to the pandemic and to deeper problems in the economy. She also repeatedly emphasized the need for “humility” in evaluating decisions that had been made in response to a wide range of possible risks.She did not directly answer questions about whether she agreed with previous chairs of the council who have argued that direct payments to lower-income Americans included in that legislation helped to inflame an inflation rate that hit a 40-year high last summer.But Dr. Rouse said the plan was an appropriate “insurance policy” in 2021 against the possibility of a double-dip recession. At the time, job growth had slowed and new waves of the coronavirus were colliding with a vaccine rollout that officials hoped would stabilize the economy but were unsure of.She also said that American workers were better off in their current situation — with low unemployment and strong job growth but higher-than-normal price growth — than they would have been if the economy had fallen back into recession and millions of people had been thrown out of work, potentially hurting their ability to find jobs in the future..css-1v2n82w{max-width:600px;width:calc(100% – 40px);margin-top:20px;margin-bottom:25px;height:auto;margin-left:auto;margin-right:auto;font-family:nyt-franklin;color:var(–color-content-secondary,#363636);}@media only screen and (max-width:480px){.css-1v2n82w{margin-left:20px;margin-right:20px;}}@media only screen and (min-width:1024px){.css-1v2n82w{width:600px;}}.css-161d8zr{width:40px;margin-bottom:18px;text-align:left;margin-left:0;color:var(–color-content-primary,#121212);border:1px solid var(–color-content-primary,#121212);}@media only screen and (max-width:480px){.css-161d8zr{width:30px;margin-bottom:15px;}}.css-tjtq43{line-height:25px;}@media only screen and (max-width:480px){.css-tjtq43{line-height:24px;}}.css-x1k33h{font-family:nyt-cheltenham;font-size:19px;font-weight:700;line-height:25px;}.css-1hvpcve{font-size:17px;font-weight:300;line-height:25px;}.css-1hvpcve em{font-style:italic;}.css-1hvpcve strong{font-weight:bold;}.css-1hvpcve a{font-weight:500;color:var(–color-content-secondary,#363636);}.css-1c013uz{margin-top:18px;margin-bottom:22px;}@media only screen and (max-width:480px){.css-1c013uz{font-size:14px;margin-top:15px;margin-bottom:20px;}}.css-1c013uz a{color:var(–color-signal-editorial,#326891);-webkit-text-decoration:underline;text-decoration:underline;font-weight:500;font-size:16px;}@media only screen and (max-width:480px){.css-1c013uz a{font-size:13px;}}.css-1c013uz a:hover{-webkit-text-decoration:none;text-decoration:none;}How Times reporters cover politics. We rely on our journalists to be independent observers. So while Times staff members may vote, they are not allowed to endorse or campaign for candidates or political causes. This includes participating in marches or rallies in support of a movement or giving money to, or raising money for, any political candidate or election cause.Learn more about our process.“I believe workers are better off today than they would have been had the federal government not intervened,” Dr. Rouse said. “But you know, some of this will depend on how long we have inflation with us. Because inflation is costly.” Asked when she expected it to return to more normal levels, she replied, “Hopefully by the end of the year.”Fiscal hawks have criticized Mr. Biden for signing a rescue plan that was not offset by spending cuts or tax increases and thus added to the national debt. Dr. Rouse said the plan “may well have” paid for itself in fiscal terms. She explained that possibility in terms of the debt the government incurred to finance the plan, offset by the consumer and business activity generated by the plan’s provisions that sent money to people, which increased gross domestic product.“If we hadn’t really provided that kind of support, G.D.P. would have been much smaller,” she said. “So the federal government might have spent less and so the debt might have been smaller, but G.D.P. might have been much smaller as well.”Previous administrations have claimed their policies will “pay for themselves” by spurring economic growth and higher tax revenues. Those include the tax cuts signed by President Donald J. Trump in 2017, which his administration said would pay for themselves, but which independent evidence showed added trillions to the national debt.Dr. Rouse repeatedly said in the interview that future researchers would have the final say on the impact of Mr. Biden’s policies — particularly on inflation. She and her staff were part of a modeling effort in early 2021 that concluded that even with Mr. Biden’s $1.9 trillion injection into the economy, there was little chance of prices rising so quickly that the Federal Reserve would not be able to control inflation.“I would say that we were all working under uncertainty,” she said on Thursday, when asked about those models. “I think time will tell as to whether that was the right move.”A labor economist at Princeton, Dr. Rouse pledged in the White House to advance Mr. Biden’s efforts to promote racial equity in the economy and American society. That included improving the data the federal government collects on economic outcomes by race and ethnicity.Asked about that work, Dr. Rouse pointed to new data from the Bureau of Labor Statistics that breaks out monthly job figures for Native Americans, along with a handful of other new efforts. “It’s a slow process,” she said.Mr. Biden praised Dr. Rouse and her role in helping to navigate the economic challenges of his administration in a statement issued by the White House on Friday. “No matter the challenge, Cecilia provided insightful analysis, assessed problems in a new way and insisted that we examine the accumulation of evidence in drawing conclusions,” he said. More

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    The Fed’s Preferred Inflation Gauge Cooled Notably in February

    A closely watched measure of price increases provided encouraging news as the Fed considers when to stop raising rates.The measure of inflation most closely watched by the Federal Reserve slowed substantially in February, an encouraging sign for policymakers as they consider whether to raise interest rates further to slow the economy and bring price increases under control.The Personal Consumption Expenditures Index cooled to 5 percent on an annual basis in February, down from 5.3 percent in January and slightly lower than economists in a Bloomberg survey had forecast. It was the lowest reading for the measure since September 2021.After the removal of food and fuel prices, which are volatile from month to month, a “core” measure that tries to gauge underlying inflation trends also cooled more than expected on both an annual and a monthly basis.The data provides the latest evidence that inflation has turned a corner and is decelerating, though the process is gradual and bumpy at times. And the report is one of many that Fed officials will take into account as they approach their next interest rate decision, on May 3.Central bankers are watching how inflation, the labor market and consumer spending shape up. They will be monitoring financial markets and credit measures, too, to get a sense of how significantly recent bank failures are likely to weigh on lending, which could slow the economy.Fed officials have raised rates rapidly over the past year to try to rein in inflation, pushing them from near zero a year ago to just below 5 percent this month. But policymakers have suggested that they are nearing the end, forecasting just one more rate increase this year.Jerome H. Powell, the Fed chair, hinted that officials could stop adjusting policy altogether if the problems in the banking sector weighed on the economy significantly enough, and policymakers this week have reiterated that they are watching closely to see how the banking problems impact the broader economy.“I will be particularly focused on assessing the evolution of credit conditions and their effects on the outlook for growth, employment and inflation,” John C. Williams, the president of the Federal Reserve Bank of New York, said during a speech on Friday.But inflation remains unusually rapid: While it is slowing, it is still more than double the Fed’s 2 percent target. And the turmoil at banks seems to be abating, with government officials in recent days saying that deposit flows have stabilized.“Even with this report, the U.S. macro data is still on a stronger and hotter trajectory than appeared to be the case at the start of this year,” Krishna Guha, head of the global policy and central bank strategy team at Evercore ISI, wrote in a note after the release.In fact, officials speaking this week have suggested that they might need to do more to wrangle price increases, and they have pushed back on market speculation that they could lower rates this year.“Inflation remains too high, and recent indicators reinforce my view that there is more work to do,” Susan Collins, president of the Federal Reserve Bank of Boston, said at a speech on Thursday. Ms. Collins does not vote on policy this year.The report on Friday also showed that consumer spending eased in February from the previous month. A measure of personal spending that is adjusted for inflation fell by 0.1 percent, matching what economists expected. But the data was revised up for January, suggesting that consumer spending climbed more rapidly than previously understood at the start of the year.And when it comes to prices, some economists warned against taking the February slowdown as a sign that the problem of rapid increases was close to being solved. A measure of inflation that excludes housing and energy — which the Fed monitors closely — has been firm in recent months.“That acceleration in underlying inflation measures is what has set off alarm bells at the Federal Reserve and prompted officials to stick to rate hikes, despite the recent credit market volatility,” Diane Swonk, chief economist at KPMG, wrote in an analysis Friday.And Omair Sharif, founder of Inflation Insights, said much of the February slowdown came from price categories that are estimated using statistical techniques — and that can sometimes give a poor signal of the true trend.“I really would not bank on this number,” he said in an interview. “My expectation would be that we’ll probably see some of this bounce back next month.” More

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    How a Trump-Era Rollback Mattered for Silicon Valley Bank’s Demise

    An under-the-radar change to the way regional banks are supervised may have helped the bank’s rapidly growing risks to go unresolved.WASHINGTON — Silicon Valley Bank was growing steadily in 2018 and 2019 — and supervisors at its primary overseer, the Federal Reserve Bank of San Francisco, were preparing it for a stricter oversight group, one in which specialists from around the Fed system would vet its risks and point out weak spots.But a decision from officials in Washington halted that move.The Federal Reserve Board — which sets the Fed’s standards for banking regulation — was in the process of putting into effect a bipartisan 2018 law that aimed to make regulation less onerous for small and midsize banks. As the board did that, Randal K. Quarles, the Trump-appointed vice chair for supervision, and his colleagues also chose to recalibrate how banks were supervised in line with the new requirements.As a result, Silicon Valley Bank’s move to the more rigorous oversight group would be delayed. The bank would previously have advanced to the Large and Foreign Bank Organization group after its assets had averaged more than $50 billion for a year; now, that shift would not come until it consistently averaged more than $100 billion in assets.The change proved fateful. Silicon Valley Bank did not fully move to the stronger oversight group until late 2021. Its assets had nearly doubled over the course of that year, to about $200 billion, by the time it came under more intense supervision.By that point, many of the issues that would cause its demise had already begun festering. Those included a customer base heavily dependent on the success of the technology industry, an unusually large share of deposits above the $250,000 limit that the government insures in the event of a bank collapse and an executive team that paid little attention to risk management.Those weak spots appear to have gone unresolved when Silicon Valley Bank was being overseen the way that small and regional banks are: by a small team of supervisors who were in some cases generalists.When the bank finally entered more sophisticated supervision for big banks in late 2021, putting it under the purview of a bigger team of specialist bank overseers with input from around the Fed system, it was immediately issued six citations. Those flagged various problems, including how it was managing its ability to raise cash quickly in times of trouble. By the next summer, its management was rated deficient, and by early 2023, intense scrutiny of the bank had stretched to the Fed’s highest reaches.Big questions remain about why supervisors didn’t do more to ensure that shortcomings were addressed once they became alarmed enough to begin issuing citations. The Fed is conducting an internal investigation of what happened, with results expected on May 1.Michael Barr, the Fed’s vice chair for supervision, told lawmakers this week that by the time Silicon Valley Bank came under intense oversight and problems were fully recognized, “in a sense, it was already very late in the process.”Shuran Huang for The New York TimesBut the picture that is emerging is one in which a slow reaction in 2022 was not the sole problem: Silicon Valley Bank’s difficulties also appear to have come to the fore too late to fix them easily, in part because of the Trump-era rollbacks. By deciding to move banks into large-bank oversight much later, Mr. Quarles and his colleagues had created a system that treated even sizable and rapidly ballooning banks with a light touch when it came to how aggressively they were monitored.That has caught the attention of officials from the Fed and the White House as they sort through the fallout left by Silicon Valley Bank’s collapse on March 10 and ask what lessons should be learned.“The way the Federal Reserve’s regulation set up the structure for approach to supervision treated firms in the $50 to $100 billion range with lower levels of requirements,” Michael Barr, the Fed’s vice chair for supervision, told lawmakers this week. By the time Silicon Valley Bank’s problems were fully recognized, he said, “in a sense, it was already very late in the process.”About five people were supervising Silicon Valley Bank in the years before its move up to big-bank oversight, according to a person familiar with the matter. The bank was subject to quarterly reviews, and its overseers could choose to put it through horizontal reviews — thorough check-ins that test for a particular weakness by comparing a bank with firms of similar size. But those would not have been a standard part of its oversight, based on the way the Fed runs supervision for small and regional banks.As the bank grew and moved up to large-bank oversight, the size of the supervisory team dedicated to it swelled. By the time it failed, about 20 people were working on Silicon Valley Bank’s supervision, Mr. Barr said this week. It had been put through horizontal reviews, which had flagged serious risks.But such warnings often take time to translate into action. Although the bank’s overseers started pointing out big issues in late 2021, banks typically get leeway to fix problems before they are penalized.“One of the defining features of supervision is that it is an iterative process,” said Kathryn Judge, a financial regulation expert at Columbia Law School.The Fed’s response to the problems at Silicon Valley Bank seemed to be halting even after it recognized risks. Surprisingly, the firm was given a satisfactory liquidity rating in early 2022, after regulators had begun flagging problems, Mr. Barr acknowledged this week. Several people familiar with how supervising operates found that unusual.“We’re trying to understand how that is consistent with the other material,” Mr. Barr said this week. “The question is, why wasn’t that escalated and why wasn’t further action taken?”Yet the high liquidity rating could also tie back to the bank’s delayed move to the large bank supervision group. Bank supervisors sometimes treat a bank more gently during its first year of tougher oversight, one person said, as it adjusts to more onerous regulator attention.There was also turmoil in the San Francisco Fed’s supervisory ranks around the time that Silicon Valley Bank’s risks were growing.Aaron Wojack for The New York TimesThere was also turmoil in the San Francisco Fed’s supervisory ranks around the time that Silicon Valley Bank’s risks were growing. Mary Daly, the president of the reserve bank, had called a meeting in 2019 with a number of the bank supervisory group’s leaders to insist that they work on improving employee satisfaction scores, according to people with knowledge of the event. The meeting was previously reported by Bloomberg.Of all the San Francisco Fed employees, bank supervisors had the lowest satisfaction ratings, with employees reporting that they might face retribution if they spoke out or had different opinions, according to one person.Several supervision officials departed in the following years, retiring or leaving for other reasons. As a result, relatively new managers were at the wheel as Silicon Valley Bank’s risks grew and became clearer.It’s hard to assess whether supervisors in San Francisco — and staff members at the Fed board, who would have been involved in rating Silicon Valley Bank — were unusually slow to respond to the bank’s problems given the secrecy surrounding bank oversight, Ms. Judge said.“We don’t have a baseline,” she said.Even as the Fed tries to understand why problems were not addressed more promptly, the fact that Silicon Valley Bank remained under less rigorous oversight that may not have tested for its specific weaknesses until relatively late in the game is increasingly in focus.“The Federal Reserve system of supervision and regulation is based on a tailored approach,” Mr. Barr said this week. “That framework, which really focuses on asset size, is not sensitive to the kinds of problems we saw here with respect to rapid growth and a concentrated business model.”Plus, the 2018 law and the Fed’s implementation of it probably affected Silicon Valley Bank’s oversight in other ways. The Fed would probably have begun administering full stress tests on the bank earlier without the changes, and the bank might have had to shore up its ability to raise money in a pinch to comply with the “liquidity coverage ratio,” some research has suggested.The White House called on Thursday for regulators to consider reinstating stronger rules for banks with assets of $100 billion to $250 billion. And the Fed is both re-examining the size cutoffs for stricter bank oversight and working on ways to test for “novel” risks that may not tie back cleanly to size, Mr. Barr said this week.But Mr. Quarles, who carried out the tailoring of the 2018 bank rule, has insisted that the bank’s collapse was not the result of changes that the law required or that he chose to make. Even the simplest rung of supervision should have caught the obvious problems that killed Silicon Valley Bank, he said, including a lack of protection against rising interest rates.“It was the simplest risk imaginable,” he said in interview. More

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    Key Fed inflation gauge rose 0.3% in February, less than expected

    An inflation gauge the Federal Reserve follows closely rose slightly less than anticipated in February, providing some hope that interest rate hikes are helping ease price increases.
    The personal consumption expenditures price index excluding food and energy increased 0.3% for the month, the Commerce Department reported Friday. That was below the 0.4% Dow Jones estimate and lower than the 0.5% January increase.

    On a 12-month basis, core PCE increased 4.6%, a slight deceleration from the level in January.
    Including food and energy, headline PCE increased 0.3% monthly and 5% annually, compared to 0.6% and 5.3% in January.
    The softer than expected data came with monthly energy prices decreasing 0.4% while food prices rose 0.2%. Goods prices rose 0.2% while services increased 0.3%.
    In other data from the report, personal income increased 0.3%, slightly above the 0.2% estimate. Consumer spending increased 0.2%, compared to the 0.3% estimate.
    Stock market futures held higher following the report while longer-duration Treasury yields declined.

    Market pricing Friday morning following the inflation report indicated a slight bias towards the Fed raising its benchmark rate another quarter percentage point in May.
    The Fed’s own unofficial projections released last week pointed to perhaps one more increase this year and no reductions. However, traders expect cuts this year, with end-year pricing for the federal funds rate at 4.25%-4.5%, half a point below the current target range.
    While inflation has ebbed in some areas, it has remained pernicious in others. Shelter costs in particular have risen sharply. Fed officials, though, are looking through that increase and expect rents to decelerate through the year.
    Still, inflation is likely to remain well above the Fed’s 2% target into 2024, and officials have said they remain focused on bringing down prices despite the current bank turmoil.
    Data released Thursday suggests that the problems in banking also may be at least under control. Borrowing through two emergency Fed lending programs decreased slightly last week, indicating that there has been no frantic liquidity dash for banks that may be undercapitalized.
    This is breaking news. Please check back here for updates. More