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    Consumer prices fell 0.1% in December, in line with expectations from economists

    The consumer price index fell 0.1% in December, meeting expectations, for the biggest drop since April 2020.
    Excluding food and energy, core CPI rose 0.3%, also in line with estimates.
    On an annual basis, headline CPI rose 6.5% while core increased 5.7%.
    The biggest reason for the easing in inflation came from a sharp drop in gasoline prices, which are now lower on a year-over-year basis.

    Inflation closed out 2022 in a modest retreat, with consumer prices in December posting their biggest monthly decline since early in the pandemic, the Labor Department reported Thursday.
    The consumer price index, which measures the cost of a broad basket of goods and services, fell 0.1% for the month, in line with the Dow Jones estimate. That equated to the largest month-over-month decrease since April 2020, as much of the country was in lockdown to combat Covid.

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    Even with the decline, headline CPI rose 6.5% from a year ago, highlighting the persistent burden that the rising cost of living has placed on U.S. households. However, that was the smallest annual increase since October 2021.
    Excluding volatile food and energy prices, so-called core CPI rose 0.3%, also meeting expectations. Core was up 5.7% from a year ago, once again in line.

    A steep drop in gasoline was responsible for most of the monthly decline. Prices at the pump tumbled 9.4% for the month and are now down 1.5% from a year ago after surging past $5 a gallon in mid-2022.
    Fuel oil slid 16.6% for the month, also contributing to a total 4.5% decline in the energy index.
    Food prices increased 0.3% in December while shelter also saw another sharp gain up 0.8% for the month and now 7.5% higher from a year ago. Shelter accounts for about one-third of the total CPI index.

    Used vehicle prices, also an important initial driver of inflation, were off 2.5% for the month and are now down 8.8% year over year. Medical care services increased 0.1% after dropping for two straight months, while apparel prices rose 0.5% and transportation services were up 0.2% and are still 14.6% higher from a year ago. However, airline fares fell 3.1% for the month though are still up 28.5% from a year ago.
    Markets reacted little following the news, with stocks slightly lower at the open and Treasury yields also down across most durations.
    Both annual increases remain well above the Federal Reserve’s 2% target, but have been consistently moving lower.
    “Inflation is quickly moderating. Obviously, it’s still painfully high, but it’s quickly moving in the right direction,” said Mark Zandi, chief economist at Moody’s Analytics. “I see nothing but good news in the report except for the top-line number: 6.5% is way too high.”
    CPI is the most closely watched inflation gauge as it takes into account moves in everything from a gallon of gas to a dozen eggs and the cost of airline tickets.
    The Federal Reserve prefers a different gauge that adjusts for changes in consumer behavior. However, the central bank takes in a broad array of information when measuring inflation, with CPI being part of the puzzle.
    There was some indication in the data that consumer are shifting behavior. Along with that came a note of caution in that the December decline was largely fed by a a drop in gas prices that may not be sustainable given market dynamics and consumer demand.
    “We know that we won’t get the same kind of support from gasoline prices. So don’t expect the next report to look as good as this one,” said Simona Mocuta, chief economist at State Street Global Advisors. “But the trend is favorable.”
    Markets are watching the Fed’s moves closely as officials battle against inflation that at its peak was the highest in 41 years. Supply chain bottlenecks, the war in Ukraine, and trillions in fiscal and monetary stimulus helped contribute to surging prices that spanned across most areas of the economy.
    Policymakers are weighing how much further they need to go with interest rate hikes used to slow the economy and tame inflation. The Fed so far has raised its benchmark borrowing rate 4.25 percentage points to its highest level in 15 years. Officials have indicated the rate is likely to exceed 5% before they can step back to see the impact of the policy tightening.
    Following the CPI report, market pricing pointed toward an increased probability that the Fed would approve a 0.25 percentage point rate increase on Feb. 1. That would represent another step down for the central bank after it approved four consecutive 0.75 percentage point hikes last year before slowing down to a 0.5-point increase in December.

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    Time for the Fed to declare victory on inflation? Not yet

    December’s monthly decline in the consumer price index gets the Fed a step closer to beating inflation.
    Dean Baker, senior economist at the Center for Economic and Policy Research, insisted that it’s “Time for the Fed to declare victory and stop rate hikes!”
    Other economists, though, think it’s unlikely the Fed will signal an easing in policy.

    A man pumps gas at a gas station in the Brooklyn borough of New York, the United States, Dec. 13, 2022.
    Michael Nagle | Xinhua News Agency | Getty Images

    December’s monthly decline in the consumer price index gets the Federal Reserve a step closer to beating inflation, though they’re highly unlikely to signal an easing of policy anytime soon.
    The key inflation gauge fell 0.1% for the month, in line with market expectations and was the biggest drop since April 2020.

    Though the CPI for all items is still 6.5% ahead of where it was a year ago, the arc has been steadily lower — from its peak at around a 9% annual rate in June 2022 — amid a sharp drop in gas prices and some serious interest rate increases from the Fed.
    The question now is how much more evidence policymakers will need to see before they take their foot off the brake.
    “If they’re doing a forecast, which is what they should be doing, it strongly argues that their rate increases should be coming to an end soon,” said Mark Zandi, chief economist at Moody’s Analytics. “There’s nothing not to like about this report. Inflation is going to come [down] here.”
    Dean Baker, senior economist at the Center for Economic and Policy Research, was even more emphatic. In a tweet, Baker insisted that it’s “Time for the Fed to declare victory and stop rate hikes!” He cited a three-month decline in services inflation less shelter costs as evidence that inflation is on the run.
    But considering how aggressive central bankers have been since initiating rate hikes back in March 2022, and how cautious they’ve been about viewing isolated data points as part of a broader trend, the likelihood of taking the win now seems remote.

    After all, both headline and core (ex-food and energy) inflation — up 0.3% for the month and 5.7% on the year — are still way ahead of the Fed’s 2% target. Chair Jerome Powell has said recently that the services less shelter component of inflation is a key consideration as rent costs are likely to ebb later this year.
    But he and his colleagues also have emphasized the importance of keeping their guard up and have said they see more danger from easing than in continuing to push hard, even if it means grinding the economy to a near halt.

    ‘Goldilocks’ on the horizon?

    What the central bank has going for it now is a robust labor market that has withstood higher rates. But that’s a blessing and a curse, as wages have continued rising and threaten to send inflation higher.
    “If you can engineer a decline in inflation without crushing the jobs market, that’s the ‘Goldilocks’ soft landing,” said Randy Frederick, managing director of trading and derivatives for Charles Schwab. “That’s kind of what we’ve seen with the data we got last week and with inflation today.”
    December’s nonfarm payrolls report showed a solid 223,000 increase in jobs and an annual decline in average hourly earnings growth to 4.7%. Frederick expects the Fed when it next meets Jan. 31-Feb. 1 to note the data but not to commit to a switch in policy.

    “They’ll acknowledge that the data has been improving, which it has. But I don’t think they want to tip their hand on what’s going to happen in six weeks,” Frederick said, referring to the following Federal Open Market Committee meeting March 15-16.
    Markets are pricing in a near certainty — 93.2% as of midday Thursday — that the FOMC again will step down the level of its increase, to 0.25 percentage point on Feb. 1, according to CME Group. The expectation is for another quarter point in March, then a pause before the committee knocks as much as a half a percentage point off the fed funds rate before year-end.
    Philadelphia Fed President Patrick Harker said Thursday he favors the Fed stepping down to quarter-point increments and then pausing. His fellow policymakers have stated firmly that they don’t see any rate cuts ahead in 2023.
    But the market is trading otherwise.
    The hike following the March meeting will give the FOMC time to ponder the impact of all the increases, which will be nine in all, totaling 4.75 percentage points, if market pricing is correct.
    What’s not expected is any premature signaling of a victory over inflation.
    “I don’t think they are close to declaring victory,” said Simona Mocuta, chief economist at State Street Global Advisors. “They will be very cautious in verbalizing that even though they might downshift to [a quarter-point hike], which acknowledges the improvement in the data. But I would not expect the tone and language that comes out of the committee to shift dramatically for quite some time. They are taking the view of better to be safe than sorry again.”

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    Fed President Backs Slowdown as Support Mounts for Smaller Rate Move

    Susan M. Collins, president of the Federal Reserve Bank of Boston, said she was leaning toward a quarter-point move at the central bank’s Feb. 1 meeting.Susan M. Collins, the president of the Federal Reserve Bank of Boston, said she was leaning toward a quarter-point interest rate increase at the central bank’s next meeting — a slowdown that would signal a return to a normal pace of monetary policy adjustment after a year in which officials took rapid action to slow the economy and contain inflation.Fed policymakers raised interest rates to a range of 4.25 to 4.5 percent in 2022 from near zero, an aggressive path that included four consecutive three-quarter point adjustments. Officials slowed down with a half-point rate move in December, and a few of the Fed’s regional presidents have in recent days suggested that an even smaller adjustment could be possible when the Fed releases its next decision on Feb. 1.Ms. Collins added her voice to that chorus — but even more declaratively, making it clear that she would at this point support slowing to rate adjustments of 25 basis points, or a quarter point. Changing policy more gradually would give the central bank more time to see how its actions affect the economy and whether they were working to contain rapid inflation.“I think 25 or 50 would be reasonable; I’d lean at this stage to 25, but it’s very data-dependent,” Ms. Collins said in an interview with The New York Times on Wednesday. “Adjusting slowly gives more time to assess the incoming data before we make each decision, as we get close to where we’re going to hold. Smaller changes give us more flexibility.”Ms. Collins is one of the Fed’s 12 regional bank presidents and among its 19 policymakers. She does not have a formal vote on rate changes this year, but she will join in deliberations as the decision is made.Ms. Collins said she favored raising interest rates to just above 5 percent this year, potentially in three quarter-point moves in February, March and May.“If we’ve gone to slower, more judicious rate increases, it could take us three rate increases to get there — and then holding through the end of 2023, that still seems like a reasonable outlook to me,” she said.Inflation F.A.Q.Card 1 of 5What is inflation? More

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    Why Hitting the Debt Ceiling Would Be Very Bad for the U.S. Economy

    If Congress fails to increase the government’s borrowing limit in time, the result would be a shock to the economy and financial markets.WASHINGTON — The new Republican majority in the House of Representatives has Washington and Wall Street bracing for a revival of brinkmanship over the nation’s statutory debt limit, raising fears that the fragile U.S. economy could be rattled by a calamitous self-inflicted wound.For years, Republicans have sought to tie spending cuts or other concessions from Democrats to their votes to lift the borrowing cap, even if it means eroding the world’s faith that the United States will always pay its bills. Now, back in control of a chamber of Congress, Republicans are poised once again to leverage the debt limit to make fiscal demands of President Biden.The fight over the debt limit is renewing debates about what the actual consequences would be if the United States were unable to borrow money to pay its bills, including what it owes to the bondholders who own U.S. Treasury debt and essentially provide a line of credit to the government.Some Republicans argue that the ramifications of breaching the debt limit and defaulting are overblown. Democrats and the White House — along with a variety of economists and forecasters — warn of dire scenarios that include a shutdown of basic government functions, a hobbled public health system and a deep and painful financial crisis.Speaker Kevin McCarthy signaled this week that he and his fellow Republicans would seek to use the debt limit standoff to enact spending cuts and reduce the national debt. He said that lawmakers likely have until summertime to find a solution before the United States runs out of cash, a threshold that is known as “X-date.”“One of the greatest threats we have to this nation is our debt,” Mr. McCarthy said on Fox News on Tuesday evening, adding, “We don’t want to just have this runaway spending.”Speaker Kevin McCarthy signaled this week that he and his fellow Republicans will seek to use the debt limit standoff to enact spending cuts and reduce the national debt.Kenny Holston/The New York TimesMr. Biden has repeatedly said he will refuse to negotiate over the debt limit, and that Congress must vote to raise it with no strings attached.That has introduced the very real likelihood of a debt limit breach. “Fiscal deadlines will pose a greater risk this year than they have for a decade,” Goldman Sachs economists wrote in a note.Here’s a look at what the debt limit is and why it matters.What is the debt limit?The debt limit is a cap on the total amount of money that the federal government is authorized to borrow to fulfill its financial obligations. Because the United States runs budget deficits — meaning it spends more than it brings in through taxes and other revenue — it must borrow huge sums of money to pay its bills. That includes funding for social safety net programs, interest on the national debt and salaries for troops. While the debt ceiling debate often elicits calls by lawmakers to cut back on government spending, lifting the debt limit does not authorize any new spending and in fact simply allows the United States to finance existing obligations. In other words, it allows the government to pay the bills it has already incurred.Understand the U.S. Debt CeilingCard 1 of 4What is the debt ceiling? More

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

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

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

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

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

    World Bank

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

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

    China is ‘key variable’

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

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

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

    Read more about China from CNBC Pro

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    Powell Says Fed Will Not Be a ‘Climate Policymaker’

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

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

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

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

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

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

    This year will be one of pension reform.

    Emmanuel Macron
    President of France

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

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

    What to expect

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

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

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    As Infrastructure Money Lands, the Job Dividends Begin

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