Evelyn Reynolds

Federal Reserve policymakers are debating how much further they need to raise interest rates to ensure that inflation speedily returns to a normal pace, and that calculus is likely to depend heavily on the job market’s strength.Officials will closely watch the employment report on Friday, the last reading on job growth that they will receive before their July 25-26 meeting, for a hint at how much momentum remains in the American economy.Fed officials have been surprised by the economy’s staying power 16 months into their push to slow it down by raising interest rates, which makes borrowing money more expensive. While growth is slower, the housing market has begun to stabilize and the job market has remained abnormally strong with plentiful opportunities and solid pay growth. Fed officials worry that if wage growth remains unusually rapid, it could make it difficult to bring elevated inflation fully back to their 2 percent goal.That resilience — and the stubbornness of quick inflation, particularly for services — is why policymakers expect to continue raising interest rates, which they have already lifted above 5 percent for the first time in about 15 years. Officials have ratcheted up rates in smaller increments this year than last year, and they skipped a rate move at their June meeting for the first time in 11 gatherings. But several policymakers have been clear that even as the pace moderates, they still expect to raise interest rates further.“It can make sense to skip a meeting and move more gradually,” Lorie K. Logan, the president of the Federal Reserve Bank of Dallas, said during a speech this week, while noting that it is important for officials to now follow up by continuing to lift rates.She added that “inflation and the labor market evolving more or less as expected wouldn’t really change the outlook.”Fed officials predicted in June that they would raise interest rates twice more this year — assuming they move in quarter-point increments — and that the labor market would soften, but only slightly. They saw the unemployment rate rising to 4.1 percent from 3.7 percent currently.Investors widely expect Fed officials to raise interest rates at their July meeting, and the strength of the labor market could help to shape the outlook after that. While policymakers will not release new economic projections until September, Wall Street will monitor how policymakers are reacting to economic developments to gauge whether another move this year is likely. More

From movie theaters to military spending, here’s how one of the world’s most important economic relationships stacks up.China and the United States are locked in an increasingly intense rivalry when it comes to national security and economic competition, with American leaders frequently identifying China as their greatest long-term challenger.Yet the world’s two largest economies, which together represent 40 percent of the global output, remain integral partners in many ways. They sell and buy important products from each other, finance each other’s businesses, provide a home to millions of each other’s people, and create apps and movies for audiences in both countries.As Treasury Secretary Janet L. Yellen meets with top Chinese officials in Beijing this week, her challenge will be to navigate this multifaceted relationship, which ranges from conflict to cooperation. Here are some figures that illustrate the links between the two nations.Economic and military powerThe U.S. economy continues to outstrip China’s by dollar value: In 2022, Chinese gross domestic product was $18 trillion, compared with $25.5 trillion for the United States.But China’s population is more than four times America’s. And the economic picture looks different when adjusted for local prices: Based on purchasing power parity, China’s share of world G.D.P. is 18.9 percent, according to the International Monetary Fund, surpassing the United States at 15.4 percent.China has provided more than a trillion dollars for global infrastructure through its Belt and Road Initiative, which analysts see as an effort to project power around the world.The rapid growth and modernization of China’s military have sparked concerns in the United States. China has more naval vessels than the United States and more military personnel, with 2.5 million in 2019.But American armed forces are far better equipped, and the United States still spends more on defense than the next 10 countries combined — $877 billion in 2022, compared with $292 billion in reported spending by China.Trade relationsDespite the rising tensions, trade between the countries remains extremely strong. China is America’s third-largest trading partner, after Canada and Mexico.U.S. imports of goods and services from China hit a record $563.6 billion last year. But the share of U.S. imports that come from China has been falling, a sign of how some businesses are breaking off ties with China.China is also a major export market, with half of all soybeans that the United States sends abroad going to China. The U.S.-China Business Council estimated that U.S. exports to China supported nearly 1.1 million jobs in the United States in 2021.China dominates supply chains for both critical and everyday goods. It is the world’s largest producer of steel, solar panels, electronics, coal, plastics, buttons and car batteries, and it has quadrupled its car exports in just two years, becoming the world’s largest auto exporter through its growing clout in electric vehicles.The United States has steadily expanded sanctions against Chinese companies and organizations because of national security and human rights concerns, placing 721 Chinese companies, organizations and people on an “entity list” that restricts their ability to buy products from the United States, according to the Commerce Department.Financial and corporate tiesChina is one of America’s largest lenders and holds nearly $1 trillion of U.S. debt.Members of the S&P 500 index, which tracks the largest public companies in the United States, generate 7.6 percent of their revenue in mainland China, the biggest source of international sales by far, according to FactSet. The revenue that large U.S. firms derive from China is more than their revenue from the next three countries — Japan, Britain and Germany — combined.But the outlook for American companies doing business in China has turned grimmer. In the American Chamber of Commerce in China’s most recent survey of U.S. companies in China, 56 percent described their business as unprofitable in 2022, with some blaming China’s strict Covid-19 lockdown measures.Also in the survey, 46 percent of American companies thought that U.S.-China relations would deteriorate in 2023, while only 13 percent thought they would improve.Personal and cultural connectionsThe United States is home to nearly 2.4 million Chinese immigrants, making it the top destination for Chinese immigrants worldwide. Chinese immigrants in the United States are more than twice as likely as U.S.-born adults to have a graduate or professional degree.In the 2021-22 school year, 296,000 students from China attended U.S. institutions of higher learning, nearly a third of all international students in the United States.Roughly three in four Chinese Americans experienced racial discrimination in the previous 12 months, and 9 percent were physically intimidated or assaulted, according to a survey by Columbia University and the Committee of 100, a Chinese American leadership organization.Long considered a low-end manufacturer, China has become more of a source for innovation and cultural creation. TikTok, the popular social media app whose parent company is China’s ByteDance, says it has more than 150 million users in the United States.Last year, 20 American movies opened in China, and their box office total was roughly $673 million, according to Comscore. China had more than 80,000 movie screens by late 2021, compared with roughly 39,000 in the United States.Pandemic restrictions have made it much harder to travel between the countries. Air carriers are running only 24 flights a week between the United States and China, compared with about 350 before the pandemic.Sapna Maheshwari and Nicole Sperling contributed reporting. More

Payrolls have been growing by hundreds of thousands of jobs a month, totaling nearly 1.6 million in the first five months of 2023 alone.
The consensus estimate is that payrolls rose by another 240,000 in June, and the unemployment rate is projected to nudge lower to 3.6%.
The market will be parsing Friday’s report for additional points that will inform Fed policy. One key will be wages.

A man walks past a “now hiring” sign posted outside of a restaurant in Arlington, Virginia on June 3, 2022.
Olivier Douliery | AFP | Getty Images

The U.S. jobs market is still on fire, no matter how much effort policymakers put into cooling it off.
Despite a series of interest rate hikes aimed specifically at fixing an imbalance between company demand and the supply of workers, payrolls have been growing by hundreds of thousands of jobs a month, totaling nearly 1.6 million in the first five months of 2023 alone.

A Labor Department report Friday is expected to show that the trend continued through June. The Dow Jones consensus estimate is that payrolls rose by another 240,000, and the unemployment rate is projected to nudge lower to 3.6%.
Those waiting for the jobs picture to deteriorate, then, are going to have to continue to be patient.
“The demise of the labor market has been something that has seemed to be just around the corner for the last nine months or so. It keeps ticking in a way that we didn’t think is possible,” said Thomas Simon, an economist at Jefferies. “I think that we are going to get strong numbers [Friday]. But my longer-term stance is that this is basically the last gasp of strength.”
Lately, however, that has proven a familiar refrain.
Much like economists for the past year or so have been expecting the U.S. to tip into recession any day now, they’ve been looking for the labor market to lead the way. The payroll numbers have managed to beat consensus estimates for all but a few months since January 2022 as companies keep hiring and consumers keep spending.

But with the full impact of 10 rate hikes from the Federal Reserve starting to be felt, there’s growing feeling that a reconciliation is coming.
“Combined with the fact that labor force participation rates are essentially where they were for most of these cohorts before the pandemic, it just suggests to me that there aren’t really that many more people to hire,” Simon said.

An ‘overcooked’ jobs picture

Asked to describe the general state of the labor market, Simon called it “overcooked.”
“It’s remarkable how long it has withstood a really high degree of pressure. But I can’t see it going on indefinitely, unless something were to change radically with demographics,” he said.
Recent numbers, though, suggest the jobs picture again could defy expectations.
Payroll processing firm ADP on Thursday reported that private sector companies added a stunning 497,000 jobs in June, more than double the expectation. While ADP has had a spotty track record in aligning with the government’s official count, the tally at the very least suggests possible upside to Friday’s report.
Markets recoiled at the signs of labor strength, selling off Thursday afternoon as expectations rose that the Fed might have to get even more aggressive with rate hikes.
“It’s difficult for the market to digest the possibility that the Fed has more work to do,” said Quincy Krosby, chief global strategist at LPL Financial. “It’s become trite to say that good news is bad news. If you want to put it within the framework that the Fed wants to complete its mission by the end of the year, then this is actually good news for the market.”

Investors didn’t see it that, way, viewing the prospect of higher rates as heightening the chances that the much-predicted recession would become a reality.
Dallas Fed President Lorie Logan gave a speech Thursday morning, saying she expects more work to do on inflation and acknowledging that she was one of the central bankers who would have welcomed a rate hike at the June meeting. The Federal Open Market Committee ultimately voted to take a break from tightening, but officials indicated more rate increases are on the way.

What to look for in the report

The market will be parsing Friday’s report for additional points that will inform Fed policy.
One key will be wages. Average hourly earnings are projected to rise 0.3% on the month and 4.2% from a year ago. That would bring the annual pace down to its lowest since June 2021, a move in the right direction even if still above what the Fed considers consistent with its 2% inflation goal.
The average work week also will be a key metric, having been on a steady but gentle decline since early 2021 to its lowest level since April 2020.
Another point of interest will be any disparity between the survey of establishments, used to determine the headline payrolls number, and the survey of households, which determines the unemployment rate. In May, payrolls increased by 339,000, while the household survey showed a decline of 331,000, due almost completely to a big drop in self employment.
On Wall Street, most economists think the ADP report probably was inflated by seasonal factors, and see more moderate gains Friday.
Goldman Sachs, for instance, said it expects an above-consensus 250,000 gain for June, while Citigroup is looking for a much tamer 170,000, which it still sees as consistent with more rate hikes.
“A too-tight labor market that is inconsistent with 2% price inflation should keep Fed officials raising rates again in July and September,” Citigroup economist Veronica Clark said in a client note.
Another report Thursday indicated that the jobs market could be loosening at least a little. The Labor Department said job openings fell by nearly half a million in May, possibly indicating some relief ahead.
“It’s not great news, but it’s good news,” said Lightcast senior economist Rachel Sederberg. “This is the slow contraction in numbers we wanted – it’s comforting to see.” More

The NewsJob openings fell in May while the number of workers quitting their jobs increased, the Labor Department reported Thursday.There were 9.8 million job openings in May, down from 10.3 million in April, according to the Job Openings and Labor Turnover Survey, known as JOLTS. The report shows that the labor market is maintaining ample opportunities for workers, but that it is losing momentum.“This is a labor market that is moderating, where things are cooling down, but is still hot,” said Nick Bunker, the director of North American economic research at the job search website Indeed.The quits rate, which is often used to gauge a worker’s confidence in the job market, increased in May, particularly in the health care, social assistance and construction industries. A rise in quitting often signals workers’ confidence that they will be able to find other work, often better paying. But fewer workers are quitting their jobs than were doing so last year at the height of what was called the “great resignation.”Layoffs were relatively steady after decreasing in previous months, a sign that employers are hesitant to let go of workers.College students waiting to speak with representatives of tech companies at a job fair in Atlanta.Alex Slitz/Associated PressWhy It Matters: The Fed’s next move on interest rates is unclear.Policymakers at the Federal Reserve have worried about the strength of the labor market as they continue to tackle stubbornly high inflation.The Fed chose to leave interest rates unchanged in its June meeting after 10 consecutive increases. The JOLTS report is one of several factors that will inform the Fed’s next decision on rates.Some economists worry that the Fed will push interest rates too high and set off a recession.But the JOLTS report as well as previous economic temperature checks have led others to believe that a “soft landing” — an outcome in which inflation eases to the Fed’s goal of 2 percent without a recession — is within reach. The biggest question is whether wage growth can continue to cool as workers switch jobs, said Aaron Terrazas, chief economist at the career site Glassdoor.“A tight labor market does not necessarily have to be inflationary,” he said.Background: A cooling labor market retains underlying strength.The labor market has remained resilient amid the Fed’s efforts to slow down the economy but has shown signs of cooling in recent months. Job openings were down for three consecutive months until April.Initial jobless claims during the week that ended Saturday, also released by the Labor Department on Thursday, nudged higher from the week before, though the four-week trend shows initial claims declining.Although job openings are cooling, the reading of 9.8 million in May is high compared with prepandemic levels. In 2019, for example, the monthly totals hovered around seven million.“To some degree, I worry we’ve become desensitized to numbers that were once upon a time eye-popping,” Mr. Terrazas said.What’s Next: The June jobs report comes Friday.The June employment report — another indicator closely watched by the Fed — will be released by the Labor Department on Friday. Economists surveyed by Bloomberg expect the report to show a gain of 225,000, down from the initial reading of 339,000 for May.The unemployment rate jumped to 3.7 percent in May, from 3.4 percent a month earlier. Although still historically low, the rate was the highest since October and exceeded analysts’ expectations.Fed policymakers will hold their next meeting July 25-26. More

The Job Openings and Labor Turnover Survey showed that listings in May fell to 9.82 million, down 496,000 from April and below the 9.9 million estimate.
Quits, often an indication of a tight labor market where workers feel confident they can leave their current jobs for better opportunities, increased by 250,000.
The ISM services index for June posted an unexpected increase to 53.9.

There were about half a million fewer job openings in May than the previous month, providing at least a modest sign that the ultra-tight labor market could be loosening a bit, the Labor Department reported Thursday.
The closely watched Job Openings and Labor Turnover Survey showed that listings fell to 9.82 million, down 496,000 from April and below the 9.9 million consensus estimate from FactSet. Openings outnumbered the available labor pool by 1.6 to 1 for the month, a level that had been closer to 2 to 1 just a few months ago.

The decline would have been even more had there not been an increase of some 61,000 in government-related positions. Openings tumbled in health care and social assistance (-285,000) as well as finance and insurance (-139,000).
The report comes amid conflicting signs of where the labor market is heading.
Earlier Thursday, payroll services firm ADP reported a stunning 497,000 new private sector jobs in June, more than double the 220,000 Dow Jones estimate.
That report raised fears that the Federal Reserve would have to stay tough on inflation and continue to push up interest rates.
In a speech Thursday morning, Dallas Fed President Lorie Logan said she is concerned that inflation is not coming down rapidly enough and that more restrictive monetary policy will be necessary, particularly to address labor market imbalances.

“Job openings remain far above the 2019 level. Layoffs remain low. There is no indication of an abrupt deterioration in labor market conditions,” Logan said in remarks delivered at Columbia University in New York.
“The continuing outlook for above-target inflation and a stronger-than-expected labor market calls for more restrictive monetary policy,” she added.
The JOLTS report showed a rise in the quits level, often an indication of a tight labor market where workers feel confident they can leave their current jobs for better opportunities. Quits increased by 250,000, taking the rate up to 2.6%, a 0.2 percentage point increase.
Hires rose slightly while layoffs and discharges nudged lower.
In a separate report Thursday morning, the ISM services index for June posted an unexpected increase to 53.9, representing the share of businesses that reported expansion. That was up from 50.3 in May and above the 51.3 estimate. A reading above 50 indicates expansion.
The employment index rose back into expansion, climbing 3.9 points to 53.1. However, the prices index fell back 2.1 points to 54.1. Business activity and production jumped to 59.2, an increase of 7.7 points. More

The furious pace of job-switching in recent years has led to big gains for low-wage workers. But the pendulum could be swinging back toward employers.Tens of millions of Americans have changed jobs over the past two years, a tidal wave of quitting that reflected — and helped create — a rare moment of worker power as employees demanded higher pay, and as employers, short on staff, often gave it to them.But the “great resignation,” as it came to be known, appears to be ending. The rate at which workers voluntarily quit their jobs has fallen sharply in recent months — though it edged up in May — and is only modestly above where it was before the pandemic disrupted the U.S. labor market. In some industries where turnover was highest, like hospitality and retail businesses, quitting has fallen back to prepandemic levels.Quits Are High, But Falling

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Voluntary quits per 100 workers
Note: Data is seasonally adjustedSource: Labor DepartmentBy The New York TimesNow the question is whether the gains that workers made during the great resignation will outlive the moment — or whether employers will regain leverage, particularly if, as many forecasters expect, the economy slips into a recession sometime in the next year.Already, the pendulum may be swinging back toward employers. Wage growth has slowed, especially in the low-paying service jobs where it surged as turnover peaked in late 2021 and early 2022. Employers, though still complaining of labor shortages, report that it has gotten easier to hire and retain workers. And those who do change jobs are no longer receiving the supersize raises that became the norm in recent years, according to data from the payroll processing firm ADP.“You don’t see the signs saying $1,000 signing bonus anymore,” said Nela Richardson, ADP’s chief economist.Ms. Richardson compared the labor market to a game of musical chairs: When the economy began to recover from pandemic shutdowns, workers were able to move between jobs freely. But with recession warnings in the air, they are becoming nervous about getting caught without a job when fewer are available.“Everyone knows the music is about to stop,” Ms. Richardson said. “That is going to lead people to stay put a bit longer.”Aubrey Moya joined the great resignation about a year and a half ago, when she decided she had had enough of the low wages and backbreaking work of waiting tables. Her husband, a welder, was making good money — he, too, had changed jobs in search of better pay — and they decided it was time for her to start the photography business she had long dreamed of. Ms. Moya, 38, became one of the millions of Americans to start a small business during the pandemic.Today, though, Ms. Moya is questioning whether her dream is sustainable. Her husband is making less money, and living costs have risen. Her customers, stung by inflation, aren’t splurging on the boudoir photo sessions she specializes in. She is nervous about making payments on her Fort Worth studio.“There was a moment of empowerment,” she said. “There was a moment of ‘We’re not going back, and we’re not going to take this anymore,’ but the truth is yes, we are, because how else are we going to pay the bills?”But Ms. Moya isn’t going back to waiting tables just yet. And some economists think workers are likely to hold on to some of the gains they have made in recent years.“There are good reasons to think that at least a chunk of the changes that we’ve seen in the low-wage labor market will prove lasting,” said Arindrajit Dube, a University of Massachusetts professor who has studied the pandemic economy.The great resignation was often portrayed as a phenomenon of people quitting work altogether, but the data tells a different story. Most of them quit to take other, typically better-paying jobs — or, like Ms. Moya, to start businesses. And while turnover increased in virtually all industries, it was concentrated in low-wage services, where workers have generally had little leverage.For those workers, the rapid reopening of the in-person economy in 2021 provided a rare opportunity: Restaurants, hotels and stores needed tens of thousands of employees when many people still shunned jobs requiring face-to-face interaction with the public. And even as concerns about the coronavirus faded, demand for workers continued to outstrip supply, partly because many people who had left the service industry weren’t eager to return.The result was a surge in wages for workers at the bottom of the earnings ladder. Average hourly earnings for rank-and-file restaurant and hotel workers rose 28 percent from the end of 2020 to the end of 2022, far outpacing both inflation and overall wage growth.In a recent paper, Mr. Dube and two co-authors found that the earnings gap between workers at the top of the income scale and those at the bottom, after widening for four decades, began to narrow: In just two years, the economy undid about a quarter of the increase in inequality since 1980. Much of that progress, they found, came from workers’ increased ability — and willingness — to change jobs.Pay is no longer rising faster for low-wage workers than for other groups. But importantly in Mr. Dube’s view, low-wage workers have not lost ground over the past two years, making wage gains that more or less keep up with inflation and higher earners. That suggests that turnover could be declining not only because workers are becoming more cautious but also because employers have had to raise pay and improve conditions enough that their workers aren’t desperate to leave.The strong labor market gave Danny Cron, a restaurant server, the confidence to keep changing jobs until he found one that worked for him.Yasara Gunawardena for The New York TimesDanny Cron, a restaurant server in Los Angeles, has changed jobs twice since going back to work after pandemic restrictions lifted. He initially went to work at a dive bar, where his hours were “brutal” and the most lucrative shifts were reserved for servers who sold the most margaritas. He quit to work at a large chain restaurant, which offered better hours but little scheduling flexibility — a problem for Mr. Cron, an aspiring actor.So last year, Mr. Cron, 28, quit again, for a job at Blue Ribbon, an upscale sushi restaurant, where he makes more money and which is more accommodating of his acting schedule. The strong postpandemic labor market, he said, gave him the confidence to keep changing jobs until he found one that worked for him.“I knew there were a plethora of other jobs to be had, so I felt less attached to any one job out of necessity,” Mr. Cron wrote in an email.But now that he has a job he likes, he said, he feels little urge to keep searching — partly because he senses that the job market has softened, but mostly because he is happy where he is.“Looking for a new job is a lot of work, and training for a new job is a lot of work,” he said. “So when you find a good serving job, you’re not going to give that up.”The labor market remains strong, with unemployment below 4 percent and job growth continuing, albeit more slowly than in 2021 or 2022. But even optimists like Mr. Dube concede that workers like Mr. Cron could lose leverage if companies start cutting jobs en masse.“It’s very tenuous,” said Kathryn Anne Edwards, a labor economist and policy consultant who has studied the role of quitting in wage growth. A recession, she said, could wipe away gains made by hourly workers over the past few years.Still, some workers say one thing has changed in a more lasting way: their behavior. After being lauded as “essential workers” early in the pandemic — and given bonuses, paid sick time and other perks — many people in hospitality, retail and similar jobs say they were disappointed to see companies roll back benefits as the emergency abated. The great resignation, they say, was partly a reaction to that experience: They were no longer willing to work for companies that didn’t value them.Amanda Shealer, who manages a store near Hickory, N.C., said her boss had recently told her that she needed to find more ways to accommodate hourly workers because they would otherwise leave for jobs elsewhere. Her response: “So will I.”“If I don’t feel like I’m being supported and I don’t feel like you’re taking my concerns seriously and you guys just continue to dump more and more to me, I can do the same thing,” Ms. Shealer, 40, said. “You don’t have the loyalty to a company anymore, because the companies don’t have the loyalty to you.” More

Private sector jobs surged by 497,000 in June, well ahead of the 267,000 gain in May and much better than the 220,000 estimate.
Leisure and hospitality led with 232,000 new hires, followed by construction with 97,000, and trade, transportation and utilities at 90,000.
The unexpected jump in payrolls comes despite more than a year’s worth of Federal Reserve interest rate increases.

A Now hiring sign at McDonald”u2019s restaurant in Yorba Linda, CA, on Monday, Sept. 13, 2021 offering pay from $15 an hour for new employees as signs around the region are getting the cold shoulder from workers reluctant to resume service-industry jobs.”
Jeff Gritchen | Medianews Group | Getty Images

The U.S. labor market showed no signs of letting up in June, as companies created far more jobs than expected, payroll processing firm ADP reported Thursday.
Private sector jobs surged by 497,000 for the month, well ahead of the downwardly revised 267,000 gain in May and much better than the 220,000 Dow Jones consensus estimate. The increase resulted in the biggest monthly rise since July 2022.

From a sector standpoint, leisure and hospitality led with 232,000 new hires, followed by construction with 97,000, and trade, transportation and utilities at 90,000.
Annual pay rose at a 6.4% rate, representing a continued slowing that nonetheless still is indicative of brewing inflationary pressures.
“Consumer-facing service industries had a strong June, aligning to push job creation higher than expected,” said Nela Richardson, chief economist at ADP. “But wage growth continues to ebb in these same industries, and hiring likely is cresting after a late-cycle surge.”
The unexpected jump in payrolls comes despite more than a year’s worth of Federal Reserve interest rate increases aimed in large part to cool a jobs market in which there are still nearly two open positions for every available worker.
ADP’s count comes a day ahead of the more closely watched nonfarm payrolls report from the Department of Labor. That is expected to show an increase of 240,000 after a 339,000 gain in May. While the two reports can differ broadly, the ADP numbers pose some upside risk for Friday’s report.

Other industries seeing solid gains included education and health services (74,000), natural resources and mining (69,000), and the “other services” classification (28,000).
Manufacturing lost 42,000 jobs, while information was off 30,000 and financial activities saw a decline of 16,000.
Broadly speaking, service providers contributed 373,000 of the total, while goods producers added 124,000.
Companies with fewer than 50 employees were responsible for most of the job growth, adding 299,000 positions. Firms with more than 500 workers lost 8,000 jobs, while mid-size companies contributed 183,000. More

An estimated 60 percent of those leaving prison are unemployed a year later. But after a push for “second-chance hiring,” some programs show promise.The U.S. unemployment rate is hovering near lows unseen since the 1960s. A few months ago, there were roughly two job openings for every unemployed person in the country. Many standard economic models suggest that almost everyone who wants a job has a job.Yet the broad group of Americans with records of imprisonment or arrests — a population disproportionately male and Black — have remarkably high jobless rates. Over 60 percent of those leaving prison are unemployed a year later, seeking work but not finding it.That harsh reality has endured even as the social upheaval after the murder of George Floyd in 2020 gave a boost to a “second-chance hiring” movement in corporate America aimed at hiring candidates with criminal records. And the gap exists even as unemployment for minority groups overall is near record lows.Many states have “ban the box” laws barring initial job applications from asking if candidates have a criminal history. But a prison record can block progress after interviews or background checks — especially for convictions more serious than nonviolent drug offenses, which have undergone a more sympathetic public reappraisal in recent years.For economic policymakers, a persistent demand for labor paired with a persistent lack of work for many former prisoners presents an awkward conundrum: A wide swath of citizens have re-entered society — after a quadrupling of the U.S. incarceration rate over 40 years — but the nation’s economic engine is not sure what to with them.“These are people that are trying to compete in the legal labor market,” said Shawn D. Bushway, an economist and criminologist at the RAND Corporation, who estimates that 64 percent of unemployed men have been arrested and that 46 percent have been convicted. “You can’t say, ‘Well, these people are just lazy’ or ‘These people really don’t really want to work.’”In a research paper, Mr. Bushway and his co-authors found that when former prisoners do land a job, “they earn significantly less than their counterparts without criminal history records, making the middle class ever less reachable for unemployed men” in this cohort.One challenge is a longstanding presumption that people with criminal records are more likely to be difficult, untrustworthy or unreliable employees. DeAnna Hoskins, the president of JustLeadershipUSA, a nonprofit group focused on decreasing incarceration, said she challenged that concern as overblown. Moreover, she said, locking former prisoners out of the job market can foster “survival crime” by people looking to make ends meet.One way shown to stem recidivism — a relapse into criminal behavior — is deepening investments in prison education so former prisoners re-enter society with more demonstrable, valuable skills.According to a RAND analysis, incarcerated people who take part in education programs are 43 percent less likely than others to be incarcerated again, and for every dollar spent on prison education, the government saves $4 to $5 in reimprisonment costs.Last year, a chapter of the White House Council of Economic Advisers’ Economic Report of the President was dedicated, in part, to “substantial evidence of labor force discrimination against formerly incarcerated people.” The Biden administration announced that the Justice and Labor Departments would devote $145 million over two years to job training and re-entry services for federal prisoners.Mr. Bushway pointed to another approach: broader government-sponsored jobs programs for those leaving incarceration. Such programs existed more widely at the federal level before the tough-on-crime movement of the 1980s, providing incentives like wage subsidies for businesses hiring workers with criminal records.But Mr. Bushway and Ms. Hoskins said any consequential changes were likely to need support from and coordination with states and cities. Some small but ambitious efforts are underway.Training and CounselingJabarre Jarrett is a full-time web developer for Persevere, a nonprofit group, and hopes to build enough experience to land a more senior role in the private sector.Whitten Sabbatini for The New York TimesIn May 2016, Jabarre Jarrett of Ripley, Tenn., a small town about 15 miles east of the Mississippi River, got a call from his sister. She told Mr. Jarrett, then 27, that her boyfriend had assaulted her. Frustrated and angry, Mr. Jarrett drove to see her. A verbal altercation with the man, who was armed, turned physical, and Mr. Jarrett, also armed, fatally shot him.Mr. Jarrett pleaded guilty to a manslaughter charge and was given a 12-year sentence. Released in 2021 after his term was reduced for good conduct, he found that he was still paying for his crime, in a literal sense.Housing was hard to get. Mr. Jarrett owed child support. And despite a vibrant labor market, he struggled to piece together a living, finding employers hesitant to offer him full-time work that paid enough to cover his bills.“One night somebody from my past called me, man, and they offered me an opportunity to get back in the game,” he said — with options like “running scams, selling drugs, you name it.”One reason he resisted, Mr. Jarrett said, was his decision a few weeks earlier to sign up for a program called Persevere, out of curiosity.Persevere, a nonprofit group funded by federal grants, private donations and state partnerships, focuses on halting recidivism in part through technical job training, offering software development courses to those recently freed from prison and those within three years of release. It pairs that effort with “wraparound services” — including mentorship, transportation, temporary housing and access to basic necessities — to address financial and mental health needs.For Mr. Jarrett, that network helped solidify a life change. When he got off the phone call with the old friend, he called a mental health counselor at Persevere.“I said, ‘Man, is this real?’” he recalled. “I told him, ‘I got child support, I just lost another job, and somebody offered me an opportunity to make money right now, and I want to turn it down so bad, but I don’t have no hope.’” The counselor talked him through the moment and discussed less risky ways to get through the next months.In September, after his yearlong training period, Mr. Jarrett became a full-time web developer for Persevere itself, making about $55,000 a year — a stroke of luck, he said, until he builds enough experience for a more senior role at a private-sector employer.Persevere is relatively small (active in six states) and rare in its design. Yet its program claims extraordinary success compared with conventional approaches.By many measures, over 60 percent of formerly incarcerated people are arrested or convicted again. Executives at Persevere report recidivism in the single digits among participants who complete its program, with 93 percent placed in jobs and a 85 percent retention rate, defined as still working a year later.“We’re working with regular people who made a very big mistake, so anything that I can do to help them live a fruitful, peaceful, good life is what I want to do,” said Julie Landers, a program manager at Persevere in the Atlanta area.If neither employers nor governments “roll the dice” on the millions sentenced for serious crimes, Ms. Landers argued, “we’re going to get what we’ve always gotten” — cycles of poverty and criminality — “and that’s the definition of insanity.”Pushing for ChangeDant’e Cottingham works full time for EX-incarcerated People Organizing, lobbying local businesses in Wisconsin to warm up to second-chance hiring.Akilah Townsend for The New York TimesDant’e Cottingham got a life sentence at 17 for first-degree intentional homicide in the killing of another man and served 27 years. While in prison, he completed a paralegal program. As a job seeker afterward, he battled the stigma of a criminal record — an obstacle he is trying to help others overcome.While working at a couple of minimum-wage restaurant jobs in Wisconsin after his release last year, he volunteered as an organizer for EXPO — EX-incarcerated People Organizing — a nonprofit group, mainly funded by grants and donations, that aims to “restore formerly incarcerated people to full participation in the life of our communities.”Now he works full time for the group, meeting with local businesses to persuade them to take on people with criminal records. He also works for another group, Project WisHope, as a peer support specialist, using his experience to counsel currently and formerly incarcerated people.It can still feel like a minor victory “just getting somebody an interview,” Mr. Cottingham said, with only two or three companies typically showing preliminary interest in anyone with a serious record.“I run into some doors, but I keep talking, I keep trying, I keep setting up meetings to have the discussion,” he said. “It’s not easy, though.”Ed Hennings, who started a Milwaukee-based trucking company in 2016, sees things from two perspectives: as a formerly imprisoned person and as an employer.Mr. Hennings served 20 years in prison for reckless homicide in a confrontation he and his uncle had with another man. Even though he mostly hires formerly incarcerated men — at least 20 so far — he candidly tells some candidates that he has limited “wiggle room to decipher whether you changed or not.” Still, Mr. Hennings, 51, is quick to add that he has been frustrated by employers that use those circumstances as a blanket excuse.“I understand that it takes a little more work to try to decipher all of that, but I know from hiring people myself that you just have to be on your judgment game,” he said. “There are some people that come home that are just not ready to change — true enough — but there’s a large portion that are ready to change, given the opportunity.”In addition to greater educational opportunities before release, he thinks giving employers incentives like subsidies to do what they otherwise would not may be among the few solutions that stick, even though it is a tough political hurdle.“It’s hard for them not to look at you a certain way and still hard for them to get over that stigma,” Mr. Hennings said. “And that’s part of the conditioning and culture of American society.” More