Evelyn Reynolds

Federal Reserve officials raised interest rate at their July 26 meeting, and freshly released minutes showed they remained focused on inflation risks.Federal Reserve officials welcomed a recent slowdown in inflation at their July meeting, minutes released on Wednesday showed, but they stopped short of declaring victory. Instead, officials stressed that inflation remained “unacceptably” high and “most” saw continued risks of higher inflation that might prod the central bank to raise interest rates further.Fed policymakers raised interest rates to a range of 5.25 to 5.5 percent on July 26, the highest since 2001. Officials have lifted borrowing costs sharply over the past 17 months — first adjusting them rapidly, and more recently at a slower pace — to slow the economy. By making it more expensive to borrow and spend, they have been hoping to cool demand and wrangle inflation.But given how much rates have risen in recent months and how much inflation has recently cooled, investors have been questioning whether policymakers are likely to lift borrowing costs again. Inflation eased to 3.2 percent in July on an overall basis, down sharply from a high of more than 9 percent in mid-2022.Officials at the Fed meeting did welcome recent progress on slowing price increases, but many of them stopped short of signaling that it could prompt them to back down on their campaign to cool the economy. The minutes showed that “a couple” of the Fed’s policymakers did not want to raise interest rates in July, but most supported the move — and suggested that there could still be further adjustment ahead.“Participants noted the recent reduction in total and core inflation rates” but stressed that “inflation remained unacceptably high and that further evidence would be required for them to be confident that inflation was clearly on a path” back to normal, the minutes showed.With inflation still unusually high and the labor market strong, “most participants continued to see significant upside risks to inflation, which could require further tightening of monetary policy,” the minutes added.Still, Fed officials did acknowledge that they would need to take the potential costs to the economy into account. Higher interest rates can slow hiring sharply, partly by making it more expensive for companies to get business loans, potentially pushing up unemployment and even tipping the economy into a recession.“It was important that the committee’s decisions balance the risk of an inadvertent overtightening of policy against the cost of an insufficient tightening,” a “number” of policymakers noted.Fed officials are facing a complicated economic picture as they try to assess whether they have sufficiently adjusted policy to return inflation to 2 percent over time. On one hand, the job market shows signs of cooling and the rate moves that the Fed has already made are still slowly trickling out to restrain the economy. Yet consumer spending remains surprisingly strong, unemployment is very low, and wage growth is solid — momentum that could give companies the wherewithal to charge their customers more.Officials noted that there was a “high degree of uncertainty” about how much the moves they have already made will continue to temper demand. Financial conditions are tight, meaning it is tough and expensive to borrow, which officials thought could weigh on consumption. At the same time, the housing market seems to be stabilizing, and some officials suggested that “the housing sector’s response to monetary policy restraint may have peaked.”The resilience of the economy has prompted the Fed’s staff economists — an influential bunch of analysts whose forecasts inform policymakers — to revisit their previous expectation that the economy would fall into a mild recession late this year.“Indicators of spending and real activity had come in stronger than anticipated; as a result, the staff no longer judged that the economy would enter a mild recession toward the end of the year,” the minutes said. They did still expect a “small increase in the unemployment rate relative to its current level” in 2024 and 2025.It is tricky to guess how quickly inflation will slow going forward, because there are a lot of moving parts. For instance, cheaper gas had been helping to drag price increases lower — but gas costs began to rebound in the second half of July, a trend that has continued into August.At the same time, rental costs continue to ease in official inflation data, which should help calm the overall numbers. And China is growing more slowly than many economists had expected, which could help weigh on global commodity prices and slow American inflation around the edges.“Participants cited a number of tentative signs that inflation pressures could be abating,” the minutes showed. Those included softer increases in goods prices, slowing online price gains, and “evidence that firms were raising prices by smaller amounts than previously,” among other factors.Fed officials have also been shrinking their balance sheet of bond holdings, a process that can take some steam out of asset prices but that will also leave the central bank with a smaller footprint in financial markets. Officials suggested in the minutes that the process of winnowing it could continue even after interest rates begin to come down, something they have forecast to begin next year — illustrating their continued commitment to paring back their holdings.“A number of participants noted that balance sheet runoff need not end when the Committee eventually begins to reduce the target range for the federal funds rate,” the minutes said.Joe Rennison More

Pushed by angry members, unions representing actors, autoworkers and UPS employees are becoming increasingly assertive under new leadership.Shawn Fain is not a typical president of the United Automobile Workers union.Mr. Fain recently declined a symbolic handshake with the chief executives of the major Detroit automakers, a gesture that traditionally kicks off contract negotiations. He is seeking an ambitious 40 percent wage increase for rank-and-file members — in line, he says, with the pay gains of those corporate leaders over the past four years. And in a video meeting with members last week, Mr. Fain threw a list of proposals from Stellantis, the maker of Chrysler and Jeep, into a wastebasket, saying it belonged in the trash “because that’s what it is.”On one level, the circumstances that produced the union’s more aggressive leadership are idiosyncratic. Mr. Fain, who won his position in March, is the first president in the union’s history, dating back nearly 90 years, to be elected directly by its members. The change took place after a major corruption scandal engulfed two of his predecessors and several more union officials.But on another level, the forces that swept Mr. Fain into power are the same ones that have borne down on unions across a variety of industries: a feeling among members that they have spent years enduring out-of-touch leaders, meager wage growth and concession-filled labor agreements, which forced some to do similar jobs as co-workers for less pay.“We kept being told, ‘This is a good contract,’” said Shana Shaw, a U.A.W. member who has worked at a General Motors plant in Missouri since 2008. “And our members are saying, ‘It’s not a good contract!’”The long-simmering rage helps explain why, in addition to Mr. Fain, several prominent unions are now in the hands of outspoken leaders who have taken their membership to the brink of high-stakes labor stoppages — or beyond.Sean O’Brien, president of the International Brotherhood of Teamsters, has repeatedly referred to corporate leaders as a “white-collar crime syndicate” and warned that a strike of the union’s 300,000-plus United Parcel Service members appeared inevitable. (The union recently reached a tentative agreement that members are voting on.)Just after a union of more than 150,000 Hollywood actors called a strike in July, Fran Drescher, president of SAG-AFTRA, said that she was “shocked by the way the people that we have been in business with are treating us.” She added: “It is disgusting. Shame on them!”The companies, including UPS and the automakers, have indicated that they are willing to increase compensation but cannot jeopardize their long-term viability. The large Hollywood studios have offered actors pay increases but say they must be able to adapt to the decline of traditional television.Some executives have called out the unions’ more confrontational gestures. “The theatrics and personal insults will not help us reach an agreement,” Mark Stewart, a top Stellantis official, said in a letter to employees after Mr. Fain literally discarded the company’s proposals.And channeling members’ anger is not without risk: It can raise expectations and make it difficult for leaders to finalize contracts. Mr. O’Brien is facing a “vote no” campaign organized largely by UPS part-timers who argue that the union did not secure large enough raises.The populist approach is not unique to labor unions. The 2008 financial crisis and the grindingly slow recovery produced a more militant style of politics that upended established institutions around the world. The crisis helped lay the groundwork for the unexpected support of Bernie Sanders and Donald Trump in the 2016 presidential race.If anything, unions were slower to adapt to the rising anger than other institutions, largely because they were less democratic.In 2018, UPS employees voted down a labor contract negotiated by the Teamsters leadership, which created a new category of lower-paid drivers. The union’s president, James P. Hoffa, who had served in the position for nearly 20 years, used a procedural rule to impose the contract anyway.But even the change-averse labor movement could not withstand a final blow: Covid-19, and union members’ anger over their perilous working conditions as corporate profits grew at one of the fastest rates in decades.“There’s a historical memory of all the concessions they made,” said Ruth Milkman, a sociologist of labor at the Graduate Center of the City University of New York, referring to union members. “And they feel shafted. The C.E.O.s are sitting pretty with all this pandemic money that didn’t go into their pockets.”Many nonunion workers saw their wages rise rapidly thanks to a tight job market, but contracts negotiated before the pandemic often locked union members into smaller wage increases as inflation surged.Mr. O’Brien has tapped into that resentment.A vice president and ally of Mr. Hoffa in the mid-2010s, Mr. O’Brien ran to replace him in 2021, deriding his predecessor for foisting concessionary contracts onto members. He vowed to raise pay for part-timers at UPS — an unusual concern for a would-be Teamster president, even though part-timers make up a majority of the union’s members there — and secured a significant wage increase.Fran Drescher, center, president of SAG-AFTRA, came to channel her members’ anxiety over declining pay because of the rise of streaming.Jenna Schoenefeld for The New York TimesOther union leaders have followed a similar arc. In 2021, Ms. Drescher ran for president of SAG-AFTRA, the actors’ union now on strike, on the union’s moderate slate and narrowly won. But she came to channel her members’ anxieties over the rise of streaming, which has led to longer gaps in work for many actors and more limited royalties as shows are reused less often.“The streaming contracts negotiated back at the beginning of this, when certain individuals thought this would be a fad, set us up for failure,” said Linsay Rousseau, a SAG-AFTRA member who works primarily as a voice actor. She said Ms. Drescher’s outspokenness had won over even members who voted against her.In some cases, outraged rank-and-filers have taken matters into their own hands. Edward Hall, a rail worker and local union official in Tucson, said he decided to run for the presidency of the more than 25,000-member Brotherhood of Locomotive Engineers and Trainmen in early 2022. The union’s longtime president had arrived to hold a town-hall meeting about labor negotiations that had dragged on for over two years. But, Mr. Hall said, he was unable to provide frustrated members with a timetable for a deal. (Dennis Pierce, the former president, declined to comment.)Mr. Hall was elected last fall, shortly after Congress intervened to enact a labor agreement that members of several rail unions had voted down. Many workers felt the agreement did not go far enough to rein in a system of railroad operations that sought to minimize equipment and employees.“It was profitable for them,” Mr. Hall said, referring to rail carriers. “But for lack of a better way to put it, it made life on the railroad hell for regular employees.”The combination of agitated members and more assertive leaders can sometimes pry loose concessions from employers even without a strike, especially amid a worker shortage. This year, rail carriers began voluntarily addressing one of the workers’ biggest concerns: the lack of paid sick days.At UPS, Mr. O’Brien spent months preparing his members for a possible strike, even holding training sessions for strike captains and practice pickets. The pressure appeared to yield significant gains in the recent tentative agreement between the two sides, including more than $7 an hour in raises over the five years of the contract.In an interview last month, Mr. O’Brien said the Teamsters’ actions under his leadership had made the strike threat credible. “We’ve been striking since I took over,” said Mr. O’Brien, pointing to other companies where the union represents workers. David Pryzbylski, a labor lawyer at Barnes & Thornburg who represents employers, said the strident rhetoric of union leaders often reflected a genuine shift in workers’ attitudes. Still, he added, negotiations more often hinge on fundamentals like a company’s profitability and the union’s ability to disrupt operations through a strike, making it wise for employers to ignore the bluster.“A lot of times that stuff stops: They go out and say what they wanted to say, they send up a signal flare and move on,” Mr. Pryzbylski said. “If you start responding, it stays in the news cycle.”Sean O’Brien, president of the International Brotherhood of Teamsters, in white, has repeatedly referred to corporate leaders as a “white-collar crime syndicate.”Jenna Schoenefeld for The New York TimesThe full-throated demands can also backfire in economic terms. Yellow, a trucking company with 30,000 employees, declared bankruptcy several months after talks with the Teamsters broke down. The company’s chief executive said in a statement that the Teamsters’ intransigence drove Yellow out of business, though analysts note that the company showed signs of mismanagement for years.The risks may be even higher in industries under pressure to embrace a new business model.The major U.S. automakers have said that they need the ability to team up with nonunion battery manufacturers to secure additional capital and expertise. But Mr. Fain, the new U.A.W. president, has said that the failure to organize more battery workers was a major failure of his predecessors, and that battery workers must receive the same pay and working conditions that union workers enjoy at the Big Three.Many U.A.W. members say the tension between the automakers’ goals and the union’s indicates that a strike will be hard to avoid when their contract expires in mid-September. But they do not appear to be shrinking from that possibility.“We have an extremely well-oiled machine,” said Ms. Shaw, who also serves as a co-chair of the organizing committee of Unite All Workers for Democracy, a reform group within the union that assembled the slate of candidates Mr. Fain ran on. “We’ll be ready to go if happens.” More

The advanced retail sales report showed a seasonally adjusted increase of 0.7% for the month, while spending increased 1% excluding autos. Both were better than the 0.4% estimates.
July’s numbers were boosted by a 1.9% jump in spending at online retailers, while sporting goods and related stores increased 1.5% and food service and drinking places rose 1.4%.
A separate report showed that import prices moved 0.4% higher in July, more than the 0.2% estimate. However, virtually the entire increase was driven by fuel prices.
The Empire State Manufacturing Survey slumped 20 points in August to a reading of -19, though the index for future conditions posted a sharp gain.

Shoppers at Brickell City Centre in Miami, Florida, US, on Wednesday, June 14, 2023. 
Eva Marie Uzcategui | Bloomberg | Getty Images

Consumer spending held up well in July as inflation slowed, with retail sales turning in a stronger than expected showing for the month, the Commerce Department reported Tuesday.
The advanced retail sales report showed a seasonally adjusted increase of 0.7% for the month, better than the 0.4% Dow Jones estimate. Excluding autos, sales rose a robust 1%, also against a 0.4% forecast. Both readings were the best monthly gains since January.

As the numbers are not adjusted for inflation, they showed a consumer able to keep ahead of price increases that have been prevalent over the past two years. The consumer price index rose 0.2% on the month, indicating solid demand.
July’s numbers were boosted by a 1.9% jump in spending at online retailers, while sporting goods and related stores increased 1.5% and food service and drinking places rose 1.4%.
On the downside, furniture sales slumped 1.8% and electronics and appliance stores reported a 1.3% drop. Gas station sales rose just 0.4% on the month despite rising prices at the pump.
The report adds to the narrative that the U.S. economy may be able to avoid a much-predicted recession brought on by a series of Federal Reserve interest rate hikes aimed at controlling inflation.
In a series of 11 increases since March 2022, the central bank has taken up its key borrowing rate by 5.25 percentage points to hits highest level in more than 22 years. Regardless, consumers, who power about two-thirds of the entire $26.8 trillion U.S. economy, have persevered.

As saving has begun to dry up, shoppers have shown a willingness to use credit cards, the balances of which exceeded $1 trillion for the first time in the second quarter of 2023.
July’s data showed that spending was widespread, with most categories showing increases. However, motor vehicle sales fell 0.3% as well. On a 12-month basis, sales rose 3.2%, which is exactly in line with the annual increase in the CPI.
A separate report Tuesday, however, showed that inflation pressures linger after hitting their highest level in more than 40 years in the summer of 2022.
Import prices move 0.4% higher in July, higher than the 0.2% estimate, according to the Bureau of Labor Statistics. That was only the second monthly gain in 2023, as the year-over-year rate declined 4.4%. A year ago, the annual increase was 8.8%.
Virtually all of the increase came from a 3.6% rise in imported fuel prices. Import prices were unchanged when excluding fuel, according to the BLS.
Export prices, though, rose even more, gaining 0.7% on the month. However, they are down 7.9% from a year ago, after surging 12.9% from July 2021 to July 2022.
An additional report Tuesday presented another mixed bag of data.
The Empire State Manufacturing Survey, which gauges activity in the New York region, slumped 20 points in August to a reading of -19. That represents the difference between companies reporting expansion against contraction, and was much lower than the -1.4 Dow Jones estimate.
New orders and shipments dropped sharply on the month, while prices paid and received both moved considerably higher.
Despite the poor August reading, the index for future business conditions, which measures expectations six months out, increased to 19.9, a move up of 6 points. That came as new orders and shipments, the big drag in the current conditions survey, to “increase significantly,” while employment is “expected to grow considerably.”
Capital spending expectations also rose sharply. More

The Russian ruble slid past 100 to the U.S. dollar on Monday, nearing a 17-month low as President Vladimir Putin’s economic advisor blamed loose monetary policy for the rapid depreciation.
The ruble has lost around 30% against the greenback since the turn of the year.
The Bank of Russia has blamed the country’s shrinking balance of trade, as Russia’s current account surplus fell 85% year on year from January to July.

This pool image distributed by Sputnik agency shows Russian President Vladimir Putin meeting with the Tver region governor at the Kremlin in Moscow on August 9, 2023.
Mikhail Klimentyev | AFP | Getty Images

The Russian ruble slid past 100 to the U.S. dollar on Monday, nearing a 17-month low as President Vladimir Putin’s economic advisor blamed loose monetary policy for the rapid depreciation.
The ruble has lost around 30% against the greenback since the turn of the year. The Bank of Russia has blamed the country’s shrinking balance of trade, as Russia’s current account surplus fell 85% year on year from January to July.

By mid-afternoon in London, the ruble was trading just above 101 to the dollar.
Putin’s economic advisor, Maxim Oreshkin, told Russia’s state-owned Tass news agency that the depreciation of the currency and acceleration of inflation was mainly due to “loose monetary policy” and that the central bank has “all the necessary tools to normalize the situation in the near future.”
“A weak ruble complicates the restructuring of the economy and negatively affects the real incomes of the population. In the interests of the Russian economy — a strong ruble,” he said, according to a Google translation.
The central bank on Thursday halted foreign currency purchases for the rest of the year in a bid to shore up the currency, which is fueling fears of rising inflation as Russia attempts to fundamentally transform its economy in the face of increasing isolation and punitive Western sanctions.
Russian GDP exceeded expectations to grow by 4.9% year on year in the second quarter, new figures from the Federal State Statistics Service showed Friday, rebounding from a 1.8% contraction in the first quarter.

But William Jackson, chief emerging markets economist at Capital Economics, noted that limited slack in the economy is likely to further fuel inflation pressures and result in monetary policy tightening, potentially weakening growth over the remainder of the year and into 2024.
“Perhaps the key risk to the economy is if the government keeps fiscal policy loose to support the war effort, which would cause Russia’s economic vulnerabilities to worsen further,” Jackson added. More

The sharply worded comments are the latest example of the president’s willingness to criticize China even as he tries to ease tensions.President Biden warned on Thursday that China’s struggles with high unemployment and an aging work force make the country a “ticking time bomb” at the heart of the world economy and a potential threat to other nations.“When bad folks have problems, they do bad things,” the president told a group of donors at a fund-raiser in Park City, Utah.Mr. Biden’s comments are the latest example of the president’s willingness to criticize China — often during fund-raising events with contributors to his presidential campaign — even as his administration seeks to ease tensions between the world’s two largest economies.Earlier this summer, at a fund-raiser in California, Mr. Biden called President Xi Jinping of China a “dictator” who had been kept in the dark by his own officials about the spy balloon that flew over much of the United States from late January to early February before being shot down by the U.S. military.On Thursday night, Mr. Biden said he was trying to make sure the United States has a “rational relationship with China,” but he signaled that he continues to view Beijing as America’s biggest economic competitor.“I don’t want to hurt China, but I’m watching,” Mr. Biden said in Utah.The remarks underscore the complicated diplomacy that the president and his administration are engaged in as they attempt to ease tensions with China while limiting the economic and military threats posed by the country and its Communist leadership.Relations between the two countries grew icy after the spy balloon incident and the more recent discovery that China has been inserting malicious computer code deep inside the networks controlling power grids, communications systems and water supplies around U.S. military bases.Mr. Biden has said he seeks “competition, not conflict” with China, taking steps to minimize the possibility of direct military clashes with Beijing over the South China Sea and the future of Taiwan.Top American officials have visited in recent weeks with their counterparts in China. Gina Raimondo, the commerce secretary, is expected to go there in coming weeks.But the president has moved aggressively to contain China’s rise and to restrict its ability to benefit militarily from the use of technologies developed in the United States.Mr. Biden signed an executive order this week banning American investment in some Chinese technology industries that could be used to enhance Beijing’s military capabilities. In response, the Chinese government hinted that it would retaliate and accused the United States of trying to “politicize and weaponize trade.”The president’s comments on Thursday could complicate efforts by both countries to schedule a face-to-face meeting between the two leaders in the coming months. Mr. Biden and Mr. Xi have not met in person since last November, during the Group of 20 summit of world leaders in Indonesia.The White House has not said whether the two men will have an in-person meeting at the Asia-Pacific Economic Cooperation summit, which is scheduled for later this year in San Francisco. Mr. Xi is expected to attend. More

The producer price index rose 0.3% for the month, slightly higher than the 0.2% estimate.
On a year-over-year basis, headline PPI was up just 0.8%. Prices excluding food, energy and trader moved up by 2.7%.

A measure of wholesale prices rose more than expected in July, countering recent trends showing that inflation pressures are easing.
The producer price index, which gauges the costs that goods and services producers receive for their products as opposed to those that consumers pay, rose 0.3% for the month, the Bureau of Labor Statistics reported Friday.

Excluding food and energy, core PPI also increased 0.3%.
Economists surveyed by Dow Jones had been expecting an increase of 0.2% for both readings. Excluding food, energy and trade services, PPI increased 0.2%.
On a year-over-year basis, headline PPI was up just 0.8%. Prices excluding food, energy and trade services moved up by 2.7%.
Markets moved lower following the report, with futures tied to the Dow Jones Industrial Average down about 70 points. Treasury yields advanced, with the benchmark 10-year note last at 4.137%, up about 0.06 percentage points on the session.
Services costs pushed the index higher, rising 0.5% for the month, the largest gain since August 2022. Much of that came from a 7.6% surge in prices for portfolio management. In addition, there was a 0.7% jump in prices for trade services, along with a 0.5% increase in transportation and warehousing.

Goods prices rose just 0.1%, though food prices increased 0.5% while prices excluding food and energy were unchanged. Within the food category, meats surged 5%. Energy was a mixed bag: Costs for many gas fuels increased, but diesel declined by 7.1%.
The PPI release comes a day after the BLS reported that the more widely followed consumer price index also rose 0.2% for the month, both on the headline and core readings.
However, the 3.2% 12-month rate of change in the CPI was slightly less than economists had anticipated, bolstering the case for easing inflation.
Federal Reserve officials watch both measures closely. While the CPI often gets more attention, the wholesale price measure is seen as more of a leading indicator as it looks at pipeline costs for various products and services.
Policymakers have been debating how much further they need to push interest rates, following 11 increases totaling 5.25 percentage points since March 2022. In recent days, some officials have indicated the rate hikes could be at an end as inflation drifts back to the Fed’s 2% long-run goal.
Markets have assigned a near-certainty to the Fed skipping a rate hike at its September meeting. More

Economists looked past the first acceleration in overall inflation in more than a year and saw signs that price pressures continued to moderate in July.Fresh inflation data offered the latest evidence that price increases were meaningfully cooling, good news for consumers and policymakers alike more than a year into the Federal Reserve’s campaign to slow the economy and wrestle cost increases back under control.The Consumer Price Index climbed 3.2 percent in July from a year earlier, according to a report released on Thursday. That was the first acceleration in 13 months, and followed a 3 percent reading in June.But that tick up requires context. Inflation was rapid in June last year and slightly slower the next month. That means that when this year’s numbers were measured against 2022 readings, June looked lower and July appeared higher than if the year-earlier figures had been more stable.Economists were more keenly focused on another figure: the “core” inflation index, which strips out volatile food and fuel prices. That picked up by 4.7 percent from last July, down from 4.8 percent in June. And on a monthly basis, core inflation roughly matched an encouragingly low pace from the previous month.The upshot was that inflation continued to show signs of seriously receding after two years of rapid price increases that have bedeviled policymakers and burdened shoppers — and the details of the July report offered positive hints for the future. Rent prices have been moderating, a trend that is expected to persist in coming months and that should help to weigh down inflation overall. An index that tracks services prices outside of housing is picking up only slowly.“This is continuing the kind of progress I think that you want to see,” said Omair Sharif, the founder of Inflation Insights, a research firm. Airfares fell sharply, and hotel costs eased last month. Big drops in those categories may be difficult to sustain but are helping to limit price increases for now.Used cars were also cheaper last month, a trend that some economists expect to intensify in the months ahead, based on declines that have already materialized in the wholesale market where dealers purchase cars. More

The government took steps this week to increase the supply of cabs after months of shortages, but critics say the problems with the industry run deeper.This summer, countless tourists, as well as residents of many top Italian destinations, found themselves in the fruitless pursuit of elusive game: a taxi.In Italy, where ride-sharing services like Uber, Lyft and Bolt have been met with strong resistance and are heavily restricted, social media sites channeled tirades describing hourslong taxi lines at train stations and airports. Callers to taxi dispatch numbers were put on hold for interminable waits. And regular taxi apps failed to find cars.Returning to Rome from Naples one Monday afternoon in June, a train trip that takes just over an hour, Daniele Renzoni said that he and his wife waited for more than an hour and a half at Termini station for a cab under a blazing sun.“Just image a long line of grumbling, frustrated people, complaining, cursing. Hot day, angry tourists, there’s not much else to say,” said Mr. Renzoni, who is retired. “Taxi drivers will tell you there’s too much traffic, too many requests, too much everything, but the fact is, the customer pays.”The situation is “a disgrace to Italy,” said Furio Truzzi, president of the consumer rights group Assoutenti, one of several associations that protested the shortage.Things got so bad that earlier this week the government intervened, introducing measures that would simplify procedures so that cities can issue new taxi licenses, including temporary ones to cover peak periods like the summer or major events like the Catholic Church’s Jubilee in 2025 and the Winter Olympics in Milan and Cortina d’Ampezzo in 2026.Major cities and those with international airports, like Rome, Milan and Naples, where the taxi crunch has been felt most keenly, will also be able to increase the number of licenses by 20 percent, though owners of the new permits must use electric or hybrid cars.In Rome, for example, there are now about 7,800 taxis, and if 20 percent more licenses were issued, there would be about 1,500 more. Parliament now has two months to convert the decree into law.But transportation experts said the decree falls far short of what they say is a needed overhaul of the industry, which holds outsized sway over local — and national — politics. Thanks to the taxi lobby, ride-sharing services are almost nonexistent in Italy, where Uber is the only platform in use, with many restrictions.The government lost an opportunity for real change, said Andrea Giuricin, a transportation economist at a research center at the University of Milan Bicocca. He said the best way to meet consumer needs would be to increase the number of licenses for Italy’s chauffeur services, known as N.C.C., which work with Uber.“It’s very difficult in Italy” because “there isn’t a culture of liberalization in general,” creating little opportunity for competition, said Professor Giuricin. Taxis “are a small but powerful lobby” that easily influences politics, “which is very weak” in Italy, he said.Taxis parked in the Piazza del Plebiscito in Naples during a strike last year. Taxi drivers are a powerful lobby, and ride-sharing services have only made timid inroads in Italy.Ciro Fusco/EPA, via ShutterstockAngela Stefania Bergantino, a professor of transportation economics at the University of Bari, pointed out that previous governments had tried to open up the taxi market. But they failed.“The problem is that taxis are regulated by municipal governments, which can find themselves captive in the sense that it is difficult for City Hall to implement policies that the cab lobby doesn’t like,” she said. “These are lobbies that have effective strike tools,” like wildcat strikes or traffic blockages that can paralyze entire cities, she said.Industry officials were dismissive of the new decree. “Much ado about nothing,” said Andrea Laguardia, director of Legacoop Produzione e Servizi, an association of taxi cooperatives. “The government presented these measures as crucial to resolving the taxi shortage,” he said, but city governments, which issue taxi licenses, could already issue more if warranted. The measures don’t “resolve the problem of urban mobility,” Mr. Laguardia said.According to a 2022 report by Italy’s transportation authority, Italy has roughly one taxi for every 2,000 people, fewer than other European countries like France or Spain.Italy’s competition watchdog said this month that it was also examining the industry.Representatives of drivers for chauffeur services, who have much to gain from any liberalization of the market, say they are being held hostage by the taxi lobby, even as the world becomes digital and a rebound in tourism increases demand.“We are losing out on rides because we can’t increase the number of cars on the road,” said Luigi Pacilli, the president of Federnoleggio, a group representing some N.C.C. drivers.“It’s a complete bluff,” he said of the new measures, which allow, but do not mandate, new licenses. Prime Minister Giorgia Meloni could shake things up, he said, “but I don’t know if she’ll have the will or desire to fight one of the strongest lobbies in Europe.”Taxi drivers say they are taking the hit for a plethora of problems: traffic in cities that slows cars to a snail’s pace, the surge in tourism after the pandemic’s peak and inefficient public transportation.“Let’s make local public transportation work well and then we can decide if more licenses are necessary,” said Loreno Bittarelli, the president of one of Italy’s largest taxi dispatch consortiums.The drivers say that critical shortages last only last a few months each year, and that demand slows to a standstill in winter. Adding new licenses would only stretch the winter fasting among more drivers.Above all, though licenses are issued by the city, they can then be sold by the drivers, for sums that can reach 250,000 euros, or about $276,000, depending on the city — a retirement nest egg for many. With an influx of new licenses, the value of an existing license would depreciate.City administrators fear cabbies could revolt and strike if the status quo changes. “If I decide to issue new licenses,” said Eugenio Patanè, Rome’s city councilor in charge of transportation, “I’m going to find 1,000 taxis blocking traffic in Piazza Venezia,” the downtown Rome square that taxi drivers habitually clog while protesting. More