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    Here's where the jobs are for August 2022 — in one chart

    The strongest areas within professional and business services include computer systems design, management and technical consulting, and architectural and engineering. The sector has now added 1.1 million jobs over the past 12 months, according to the U.S. Bureau of Labor Statistics.
    Health care came in second for the month, with 48,200 jobs added. If health-care jobs were added to education and social services, as some economists do, that broad sector would have matched the 68,000 gain by professional and business services.
    Retail trade was another bright spot, growing by 44,000 jobs. That was an acceleration from the 29,100 jobs added in July.
    Even though job growth was positive across the board, it was significantly slower in some areas. Leisure and hospitality, for example, added 31,000 jobs in August after growing by 95,000 in July. The sector is still 1.2 million short of its pre-pandemic level.

    Transportation and warehousing added just 4,800 jobs after growing by more than 24,000 in July.
    Roach also pointed to a rise in part-time workers by 225,000, with 69,000 saying they could not find full-time employment, as a potential area of concern going forward.

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    Fed Officials May Be Encouraged by the Latest Labor Data

    Federal Reserve officials are likely to see the August jobs numbers as a sign their policies are working — though not that their job is done.Policymakers are closely parsing labor market data as they try to figure out how much underlying momentum the economy has and how much they need to raise interest rates to restrain growth and lower inflation.Fed officials have raised rates to a range of 2.25 to 2.5 percent in July from near zero in March, but they are still waiting for signs that those higher borrowing costs are cooling consumer spending and business expansions, lowering demand and giving supply a chance to catch up. So far, the evidence of a major slowdown has been spotty.In that context, the data released on Friday was encouraging. Job growth slowed, but not by so much that it suggested a recession was imminent. The unemployment rate rose, but mostly because more people joined the labor force, which should make it easier for companies to fill open positions. Wage growth slowed.“Overall there’s a lot to like if you’re a Fed official right now,” said Sarah House, an economist at Wells Fargo. “Hiring remains robust but on a more sustainable basis. Yes, unemployment was up, but it was for all the right reasons. We saw a surge in job seekers.”Still, Ms. House said, one good report will not convince the Fed that it is time to back off its efforts to tame inflation.Central bankers have been clear that they are carefully watching data on both employment and inflation — which is showing hopeful, but not yet conclusive, signs of slowing — as they decide how quickly to raise interest rates. Fed officials are contemplating an increase of either a half percentage point or three-quarters of a point at their meeting on Sept. 20-21.Higher interest rates work to counter inflation partly by weighing on the labor market. As businesses face steeper borrowing costs, they grow less and cut back on hiring. As job opportunities dwindle, competition for workers eases and wage growth slows — reining in consumer spending. As demand wanes, companies become less able to raise prices, lowering inflation.That process can push unemployment up and prove painful as people lose or struggle to find jobs. But Fed officials have argued that getting inflation under control is critical — and that delaying the tough choices now would only make the situation worse down the road. More

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    Payrolls rose 315,000 in August as companies keep hiring

    Nonfarm payrolls rose by 315,000 jobs in August, just below the Dow Jones estimate for 318,000.
    The unemployment rate rose to 3.7%, two-tenths of a percentage point higher than expectations.
    Wages also rose, with average hourly earnings up 5.2% from a year ago, slightly lower than the estimate.
    The biggest sector gainers were professional and business services, health care and retail.

    Nonfarm payrolls rose solidly in August amid an otherwise slowing economy, while the unemployment rate ticked higher as more workers rejoined the labor force, the Bureau of Labor Statistics reported Friday.
    The economy added 315,000 jobs for the month, just below the Dow Jones estimate for 318,000 and well off the 526,000 in July ad the lowest monthly gain since April 2021.

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    The unemployment rate rose to 3.7%, two-tenths of a percentage point higher than expectations largely due to a rising labor force participation rate. A broader measure of unemployment that includes discouraged workers and those holding part-time jobs for economic reasons rose to 7% from 6.7%.
    Wages continued to rise, though slightly less than expectations. Average hourly earnings increased 0.3% for the month and 5.2% from a year ago, both 0.1 percentage point below estimates.
    Professional and business services led payroll gains with 68,000, followed by health care with 48,000 and retail with 44,000. Leisure and hospitality, which had been a leading sector in the pandemic-era jobs recovery, rose by just 31,000 for the month after averaging 90,000 in the previous seven months of 2022.
    Manufacturing rose 22,000, financial activities gained 17,000 and wholesale trade increased by 15,000.
    Markets reacted positive to the numbers, with Wall Street indicating a positive open for stocks while Treasury yields moved lower.

    “There’s something for everybody in this report,” said Michael Arone, chief investment strategist at State Street Global Advisors. “This report supports the Fed’s ability to engineer a soft landing. Markets like it.”
    The jobs numbers pose a quandary for a Federal Reserve trying to get inflation under control.
    Inflation is running near its fastest pace in more than 40 years as a combination of a supply-demand imbalance, massive stimulus from the Fed and Congress, and the war in Ukraine has sent the cost of living soaring.
    However, the labor market has held strong even as other aspects of the economy have weakened. Housing in particular is likely in a recession.
    “This is a unique period of time, where we have still a relatively tight labor market, where there is still job growth, but companies have started to announce hiring freezes, some companies have announced layoffs,” said Liz Ann Sonders, chief investment strategist at Charles Schwab. “This could very likely be a recession were you don’t see the kind of carnage in the labor market that you see in most recessions.”
    Those payroll and wage gains came amid soaring inflation and concerns over a slowing economy that posted negative GDP numbers in the first two quarters of the year, generally considered a telltale sign of recession.
    The Fed has been battling the inflation problem with a series of interest rate hikes totaling 2.25 percentage points that are expected to continue into next year. In recent days, leading central bank figures have warned that they have no intention on backing off their policy tightening measures and expect that even when they stop hiking, rates will stay elevated “for some time.”
    One key channel the Fed is looking for policy impact is the jobs market. In addition to robust hiring, job openings are outnumbering available workers by a nearly 2-to1 margin, pressuring wages and creating a feedback loop that is sending prices higher for not only gas and groceries but also shelter costs and a variety of other expenses.
    The jobs report is “not strong enough to get them to be more aggressive in terms of rate hikes, and not weak enough to have them slow down,” Arone said. “I don’t think today’s jobs report changes anything about the path the Fed was on.”
    August’s payroll numbers are generally more volatile than other months. In 2021, the initial estimate of 235,000 eventually was revised up to 483,000. Over the past decade, the average revision for August has been 82,700 higher.
    The BLS lowered the June payrolls count to 293,000 from 398,000 and July’s to 526,000 from 528,000, a combined net drop of 107,000 from previous estimates.

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    In California’s Housing Fight, It’s Newsom vs. NIMBY

    Laws to encourage more development and denser housing don’t do much good if no one enforces them. As the state political calculus shifts, Gavin Newsom is trying to change that.By any objective measure, nothing that happens in Woodside, Calif., is going to make much difference to a state whose housing crisis is characterized by some of the nation’s highest rents and home prices and has more than 100,000 people living on its streets. The town, a wealthy enclave of the Silicon Valley, is less than 12 square miles and contains about 5,000 of California’s 40 million residents.But earlier this year, when Woodside’s government made a curious announcement that the town was being designated a sanctuary for mountain lions — a move that, as it happened, would also protect a hamlet of multimillion-dollar homes from a new law allowing duplexes across the state — the response was an object lesson in how California politics have shifted as housing has become voters’ primary concern.The Department of Housing and Community Development, California’s main housing agency, said it was investigating the mountain lion plan. The state attorney general followed with a letter (and a news release announcing the letter) that said the proposed sanctuary was illegal, and accused the town of “deliberately attempting to shut off the supply of new housing opportunities.”Along the way legislators, housing advocates and even the Sacramento-based Mountain Lion Foundation pilloried the move. Woodside reversed course after the Department of Fish and Wildlife advised city officials that it was impossible for the entire town to be considered a cougar habitat. Shortly after, the city announced it was taking applications for duplexes.Woodside, Calif., tried to declare itself a mountain lion habitat, a move that would have barred duplex housing in the town. The state pushed back.Jim Wilson/The New York TimesFor the past six years, through boom, bust and pandemic, California’s Legislature has ended each session with a blitz of new laws that aim to make housing more plentiful and affordable. Statewide rent control. Moves to encourage backyard units. A dismantling of single-family zoning rules. The barrage continued in this year’s session, concluded on Wednesday, when lawmakers passed a pair of measures that aim to turn retail centers, office buildings and parking lots into potentially millions of future housing units — moves that caused many political observers to reconsider what is politically possible.The laws received a decent amount of fanfare at each signing, signaling a turn in state policy and priorities. Until recently though, no one put much effort into enforcing them.That has started to change as Gov. Gavin Newsom has, for reasons practical and political, shifted toward an increasingly aggressive effort to enforce laws already on the books. This ranges from small-scale stings, like the state housing agency’s sending letters to local governments telling them that they are out of compliance with state housing regulations, to much larger efforts, like a first-of-its-kind investigation into San Francisco’s notoriously complex development process.In some cases, the governor’s office is working with the attorney general to initiate lawsuits against localities that they believe are breaking the law. Rob Bonta, the California attorney general, who along with Mr. Newsom is running for re-election this year, said he expected this to only get more intense.“We are just getting started,” he said in an interview.The policy is simple: Laws that are good enough to sign should be good enough to enforce. But there are political calculations as well, and they begin with a harsh reality. No matter how much legislation the state passes, its housing crisis is so deep and multifaceted that it will be nearly impossible to show real progress in any given political cycle, and probably not for decades.Read More on the Newsom AdministrationGasoline Cars: California is moving ahead with a ban on the sale of new internal-combustion vehicles in the state by 2035, as part of Gov. Gavin Newsom’s big climate plan,Injection-Site Bill: The governor vetoed a bill for supervised drug-injection sites in California, saying the state was not ready to put the idea into practice.Abortion: With the end of Roe v. Wade, Mr. Newsom vowed to “fight like hell” for abortion rights. His state is also looking to enshrine those rights in its constitution.Contentious Bills: The governor must decide whether to sign into law or veto several proposals that have drawn intense lobbying from both sides. Here is a closer look at some bills under consideration.That is a hard sell to voters who would like quick victories. Lacking a slam dunk to point to in campaign ads, Mr. Newsom and others have been applying the law, loudly. Take, for instance, the recent interview in which the governor told The San Francisco Chronicle that “NIMBYism is destroying the state” (referring to the “not in my backyard” attitude that impedes new housing). Or the mad rush to condemn Woodside. Or the Housing Strike Force that Mr. Bonta announced in November.“Over the last 50 or 60 years, cities have not made the right decisions collectively on housing,” said Jason Elliott, a senior counselor to Mr. Newsom who oversees housing policy. “That has left us in a place where the state has no choice but to enforce the law.”The notoriously complex development process in San Francisco is the focus of a state investigation.Jim Wilson/The New York TimesCalifornia has long been described as a look at the nation’s future, and in the case of housing, the good and bad, this frame has held true since the end of World War II. Today, as the rising cost of housing has ballooned into a national problem, state legislatures across the country have mirrored California by passing a host of new laws that aim to speed new development and allow denser forms of housing.The Biden administration is hoping to encourage these efforts with a “Housing Supply Action Plan,” which, among other things, would use grant funding as a carrot for local governments that liberalize their housing laws.Those reforms won’t amount to much if cities never follow them, however. And while that might sound obvious, passing laws that nobody follows has historically been where state housing policy began and ended. That’s because, in California and elsewhere, most of the power about where and how to build has traditionally been left to local governments, on the theory that land use is better handled by people closest to the problem.“The role the state was playing is that they would mostly advise cities on what to do and make recommendations,” said Ben Metcalf, who is managing director of the Terner Center for Housing Innovation at the University of California, Berkeley. He ran California’s Department of Housing and Community Development from 2016 to 2019.The problem is that homeowners and renters from a wide range of income levels are frequently antagonistic to having anything, and especially anything dense, built in their neighborhoods. And local elected officials are beholden to them. The result is that even though California has had various housing laws on its books for decades, cities regard them as pliable, and the state, in deference to local control, has rarely challenged them.“For decades there has been a pattern where cities flagrantly ignore state housing law and the state responds by halfheartedly saying, ‘Can you pretty please follow the law?’” said Laura Foote, executive director of YIMBY Action, a San Francisco Bay Area-based nonprofit that supports building more housing around the country. “Then the cities ignore them, and the state says, ‘OK, we’ll get you next time.’”Laura Foote, the executive director of YIMBY Action.Andrew Burton for The New York TimesUntil 2017, when a suite of new laws expanded the Department of Housing and Community Development’s authority, it wasn’t even clear if it had the power to penalize cities that weren’t following state housing dictates. Mr. Newsom’s administration has since used $4 million to create a housing Accountability and Enforcement unit to investigate cities and implement the laws, while legislators have usurped local authorities by forcing them to plan for more and denser housing, hemmed their options for stopping it, and created measures to strip them of land use power when they don’t comply.“It gives us something to ensure that these programs aren’t just writing,” said David Zisser, who heads the housing department’s new enforcement unit.As affordable housing problems spread, California’s enforcement kick could be an indication of an increasingly pitched battle between cities and states over housing. It also gives a clue into how Mr. Newsom might defend himself from political attacks over California’s housing and homelessness problems, something that is all but guaranteed to happen if he seeks higher office. (A Newsom run for the Democratic presidential nomination in 2024 is currently the stuff of political parlor games, and despite the chatter, the governor and everyone in his camp dismiss such ambitions.)In the interview, Mr. Elliott, the housing adviser, noted that the advantage the governor has in enforcing tough housing measures is that he draws votes from around the state instead of locally. The administration can play the heavy in a local dispute without having to worry about alienating its entire voting base.“It’s very logical, politically, for an individual city council person or an individual member of a board of supervisors to be against an individual project,” he said. “I think the job of the state is to change the political calculus so ‘yes’ becomes the default instead of ‘no.’”There is already some indication that years of state housing bills, combined with rising voter frustrations, have started to create such a shift. When the state housing department opened its investigation into San Francisco in August, London Breed, the city’s mayor, welcomed it with a tweet.“When I ran in 2018, it was a vulnerability to be an unapologetically pro-housing candidate,” said Buffy Wicks, a Democratic Assembly member from Oakland who wrote one of the two main housing bills passed by the Legislature this week. “Now it is absolutely an asset. I get up on the floor of the Assembly and I say, 10 times a week, ‘We have to build more housing in our communities, all of our communities need more housing, we need low-income, middle-income, market rate.’ You couldn’t do that in a comfortable way four years ago.”Cities seem to have absorbed the new reality of a state on closer watch. Last year, after the Legislature passed the duplex law, dozens of cities responded by adopting a slew of new ordinances that don’t explicitly prohibit the units but, through a series of tiny rules, tried to discourage anyone from actually building them.Woodside’s Mountain Lion proposal got the most attention but was far from the only one.When Temple City, in Los Angeles’s San Gabriel Valley, adopted rules for how it would carry out the duplex law — rules that required new units to have a large outdoor courtyard, the highest level of energy efficiency, and restricted future tenants from parking on site or obtaining permits to park on the street overnight — the City Council was clear what the aim was.“What we are trying to do here is to mitigate the impact of what we believe is a ridiculous state law,” said Councilman Tom Chavez, just before the Council unanimously passed the measure.By April, the Department of Housing and Community Development had warned Temple City that its new ordinance was likely in violation of at least five state housing laws. In an email, Bryan Cook, the city manager, said it was working with the state and would consider changing the ordinance after its work with the state was done. More

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    Jobless claims total 232,000, the lowest level in two months

    Jobless claims totaled a seasonally adjusted 232,000 for the week ended Aug. 27, below the estimate for 245,000.
    Continuing claims increased to 1.44 million, up 26,000 from the previous week.
    Unit labor costs increased 9.3% over the past four quarters, the highest level since the first quarter of 1982.

    Initial filings for unemployment insurance fell to their lowest level since late June last week, a sign that the labor market is resilient amid a slowing economy.
    Claims totaled a seasonally adjusted 232,000 for the week ended Aug. 27, a decline of 5,000 from the previous period and the lowest since June 25, the Labor Department reported Thursday.

    Economists surveyed by Dow Jones had been looking for 245,000.
    Continuing claims increased to 1.44 million, up 26,000 from the previous level in data that runs a week behind the headline number.
    The numbers come a day ahead of the closely watched nonfarm payrolls report for August, though it is outside the survey week the Bureau of Labor Statistics uses to compile that count. Wall Street is expecting that report to show that job gains in August, a notoriously volatile month statistically, will total 318,000.
    Amid worries that the U.S. is teetering on recession, the jobs market has provided a bulwark indicating that hiring demand is strong and consumer spending has held up despite soaring inflation.
    Earlier this week, the BLS reported that job openings rose past 11.2 million and outnumber the available worker pool by just shy of 2 to 1. Data on Wednesday from payroll processing firm ADP indicated that private companies added just 132,000 jobs in August, but most economists thus far have held with their forecast for solid growth for the month.

    Federal Reserve officials have been trying to bridge the jobs gap and slow down inflation through a series of aggressive interest rate increases. Despite those moves, inflation remains near its highest level in more than 40 years.
    Over the past several days, multiple Fed officials have indicated the rate moves are likely to continue. In a speech Wednesday, Cleveland Fed President Loretta Mester said she expects the fed funds rate, a benchmark used by banks in overnight lending but also tied to many consumer debt instruments, to rise above 4% by early 2023. The rate is currently targeted in a range of 2.25%-2.5%.
    Separate data the BLS released Thursday showed that the productivity decline in the second quarter wasn’t as sharp as initially reported. The revised productivity level showed a drop of 4.1%, an upward revision of half a percentage point from the initial reading. Economists had been expecting a reading of minus-4.3%.
    Unit labor costs, or the amount of compensation compared to output, rose 10.2% for the quarter, 0.4 percentage point less than the estimate. However, the four-quarter increase of 9.3% is the highest level since the first quarter of 1982.
    This is breaking news. Please check back here for updates.

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    Portugal Could Hold an Answer for a Europe Captive to Russian Gas

    Portugal has no coal mines, oil wells or gas fields. Its impressive hydropower production has been crippled this year by drought. And its long-running disconnect from the rest of Europe’s energy network has earned the country its status as an “energy island.”Yet with Russia withholding natural gas from countries opposed to its invasion of Ukraine, the tiny coastal nation of Portugal is suddenly poised to play a critical role in managing Europe’s looming energy crisis.For years, the Iberian Peninsula was cut off from the web of pipelines and huge supply of cheap Russian gas that power much of Europe. And so Portugal and Spain were compelled to invest heavily in renewable sources of energy like wind, solar and hydropower, and to establish an elaborate system for importing gas from North and West Africa, the United States, and elsewhere.Now, access to these alternate energy sources has taken on new significance. The changed circumstances are shifting the power balances among the 27 members of the European Union, creating opportunities as well as political tensions as the bloc seeks to counter Russia’s energy blackmail, manage the transition to renewables and determine infrastructure investments.The Alto Tamega dam, part of a hydropower facility in northern Portugal that will be operational in 2024.Matilde Viegas for The New York TimesThe urgency of Europe’s task is on display this week. On Wednesday, Russia’s energy monopoly, Gazprom, again suspended already reduced gas deliveries to Germany through its Nord Stream 1 pipeline. With natural gas costing about 10 times what it did a year ago, the European Union has called for an emergency meeting of its energy ministers next week.As Brussels tries to figure out how to manage the crisis, the possibility of funneling more gas to Europe through Portugal and Spain is gaining attention.Portugal and Spain were among the first European nations to build the kind of processing terminals needed to accept boatloads of natural gas in liquefied form and to convert it back into the vapor that could be piped into homes and businesses.This imported liquefied natural gas, or L.N.G., was more expensive than the type much of Europe piped in from Russia. But now that Germany, Italy, Finland and other European nations are frantically seeking to replace Russian gas with substitutes shipped by sea from the United States, North Africa and the Middle East, this disadvantage is an advantage.Solar panels in Sintra. Connecting such panels to Europe’s electricity grid could help ease energy shortages on the continent.Matilde Viegas for The New York TimesTogether, Spain and Portugal account for one-third of Europe’s capacity to process L.N.G. Spain has the most terminals and the biggest, though Portugal has the most strategically located.Its terminal in Sines is the closest of any in Europe to the United States and the Panama Canal; it was the first port in Europe to receive L.N.G. from the United States, in 2016. Even before the war in Ukraine, Washington identified it as a strategically important gateway for energy imports to the rest of Europe.Spain also has an extensive network of pipelines that carry natural gas from Algeria and Nigeria, as well as large storage facilities.Understand the Decline in U.S. Gas PricesCard 1 of 5Understand the Decline in U.S. Gas PricesGas prices are falling. More

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    Private payrolls grew by just 132,000 in August, ADP says in reworked jobs report

    Private payrolls grew by just 132,000 for the month, a deceleration from the 270,000 gain in July, ADP said in its monthly payroll report.
    August’s numbers add to the inflation worries, as the firm reported annual pay up 7.6% for the month.

    A hiring sign is seen in a cafe as the U.S. Labor Department released its July employment report, in Manhattan, New York City, August 5, 2022.
    Andrew Kelly | Reuters

    Companies sharply slowed the pace of hiring in August amid growing fears of an economic slowdown, according to payroll processing company ADP.
    Private payrolls grew by just 132,000 for the month, a deceleration from the 270,000 gain in July, the firm said in its monthly payroll report.

    The Dow Jones estimate for the ADP count was 300,000.
    “Our data suggests a shift toward a more conservative pace of hiring, possibly as companies try to decipher the economy’s conflicting signals,” said ADP chief economist Nela Richardson. “We could be at an inflection point, from super-charged job gains to something more normal.”
    August payroll numbers are notoriously volatile. ADP’s release also comes at an uncertain time for a U.S. economy which saw negative growth for the first half of 2022 amid the highest inflation the nation has seen since the early 1980s. The more closely watched nonfarm payrolls report from the Bureau of Labor Statistics comes out Friday and is expected to show an increase of 318,000.
    The report had been on public hiatus through the latter part of the summer as the firm adjusted methodology and entered into a partnership with the Stanford Digital Economy Lab.
    While much of the changes are technical in nature, ADP’s count differs in how it accounts for issues such as weather and natural disasters. The company also differs from the BLS in that ADP’s count includes any employees active in the company, while the BLS measures only those who have been paid that month.

    In addition to the changes in the way the jobs total is counted, ADP now is providing wage information. August’s numbers add to the inflation worries, as the firm reported annual pay up 7.6% for the month.
    From a sector standpoint, services-related industries accounted for most of the jobs, with 110,000 added positions. Leisure and hospitality grew by 96,000 while seeing pay increases of 12.1%. Trade, transportation and utilities contributed 54,000.
    However, several sectors saw decreases. They included financial activities (-20,000), education and health services (-15,000) and professional and business services (-14,000).
    On the goods-producing side, construction added 21,000 and natural resources and mining saw a 2,000 gain. Manufacturing was flat.
    From a business size perspective, companies with 500 or more employees grew by 54,000. Medium-sized businesses added 53,000 while those with fewer than 50 employees saw a 25,000 gain.

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    Why Totino’s Needs 25 Ways to Make Pizza Rolls

    It takes about 21 ingredients to make a Totino’s pizza roll, the bite-size snack that soared in popularity during the pandemic as people sought easy-to-make meals.And on any given day since last winter, at least one of those ingredients, if not many, has either been difficult to find or insanely expensive.The shortages became so bad at one point that General Mills, which makes Totino’s, simply couldn’t produce enough.“We had lots of empty shelves,” said Jon Nudi, the company’s president of North America. “Every time we had something fixed, something else popped up.”General Mills is not used to empty shelves. The company sells $19 billion worth of food a year, everything from Chex and Cheerios cereals, Annie’s organic Cheddar bunnies and Betty Crocker cake mixes to pet food under the Blue Buffalo brand. With 26 factories in North America, it juggles 13,000 ingredients from around the world for its many products.So the company’s scientists, supply chain heads and procurement managers began meeting daily late last year. The solution? The company found 25 ways — recipes, if you will — to make the pizza rolls, each with a slightly different list of ingredients, swapping in cornstarches, for example, for tapioca starch that had become hard to find, or substituting one kind of potato starch for another.From left, Nia Bowdoin, Conner Thompson, and Taylor May working in the Ingredion kitchen in Bridgewater, N.J.Lanna Apisukh for The New York TimesThe pizza roll conundrum is a microcosm of an issue that’s affecting the food industry more broadly. Managing soaring prices for most of the ingredients in cookies, chips and pizza is one thing. But for many food executives, the bigger headache now is wondering each week which ingredients will — or won’t — show up at their factories.For a while last year, sugar and low-calorie sweeteners like erythritol, which is used in products like yogurt and cereal, were tough to pin down. Then palm oil, an odorless and tasteless oil that’s in about half the packaged goods in supermarkets, became hard to find. After Russia invaded Ukraine, global supplies of sunflower oil, produced by both countries, disappeared. And more recently, because of the avian flu that swept across the United States this spring, egg prices soared, leading to shortages.While food companies have long had to manage scarcity of one or two ingredients because, say, drought reduced crop yields in a part of the world, the recent rolling shortages have affected multiple ingredients for a variety of reasons. And it’s not just ingredients that are M.I.A. Some packaging, such as aluminum cans, has been hard for soda and beer manufacturers to find.Many executives say the culprit is a combination of increased extreme weather patterns around the world because of the changing climate, global transportation and labor problems, the war in Ukraine, high energy prices, and ever-shifting consumer patterns in a post-Covid environment that make the years of data they collected to try to predict trends basically useless.“All of these wrinkles are cascading through the entire food system, and I don’t think anyone is banking on it resolving itself in the next 12 or 18 months,” said Joe Colyn, a partner at JPG Resources, which works with food companies and their supply chains. “Right now, supply trumps price. It’s more important to get surety of supply, because you can’t afford to shut the factory down because you don’t have what you need.”One ingredient being tested is pea protein, which adds texture to food.Lanna Apisukh for The New York TimesAfter years of whittling down the number of their suppliers to get better prices and keep up with quality control, food companies are racing to find alternatives. Just-in-time inventory systems that worked just fine for years are being overhauled, with companies adding warehouses, silos and storage tanks to hold raw ingredients and finished products for longer periods. They’re trying to reduce transportation costs, either by looking for manufacturers nearby or removing water from goods like vegetable and fruit juices — used frequently in beverages — and transporting them as concentrates.And, like General Mills, they’re revamping recipes, or “reformulating” in industry parlance. It’s not as easy as it sounds. Swapping out one oil or emulsifier for another not only can change the product’s texture or shelf life but can affect nutrition and allergy labeling.Testing substitute ingredients has become a greater focus at Ingredion, which food companies also hire to work on new products. Lanna Apisukh for The New York TimesThe Food and Drug Administration, which ensures that nutritional labels and other information on food are accurate, has put in temporary guidance to allow manufacturers to make “minor formulation changes” because of supply disruptions or shortages without updating the ingredient list.The leeway doesn’t apply to a change that increases the safety risk because it contains a food allergen or gluten, or that replaces a key ingredient or one featured in the name or marketing. For example, a product that claims to be made with “real butter” cannot now be made with margarine, and raisin bread must contain raisins.Before the pandemic, Ingredion, a company that makes sweeteners, starches and other ingredients used by large food companies, often had its 500 scientists and 26 labs all over the country working on new products for companies. But in recent months, much more of their time has been spent figuring out what happens to the taste, texture and shelf life of a food when one or two ingredients are switched out.“The overall reformulation of a product is a very complicated equation,” said Beth Tormey, a vice president and general manager of systems and ingredient solutions at Ingredion. “It has to meet parameters of texture and taste so that consumers like it, but it also has to fit into the regulatory box and the nutrition box. It all sounds simple from a distance, but it’s not.”Take eggs. They are, explained Leaslie Carr, a senior director at Ingredion, a key source of protein for many products, but they are more than that. For baked goods, for instance, they provide moisture and volume, helping make cakes light and fluffy.“Salad dressings also use a lot of egg for body and texture,” Ms. Carr said. “So we’re trying to figure out how to use different emulsifiers to reduce the amount of egg used, maybe reduce the egg amount by half, to produce the dressings. That gives you some flexibility to continue to manufacture the product until the egg situation stabilizes.”Mr. Thompson cutting out pizza rolls. “The overall reformulation of a product is a very complicated equation,” an Ingredion executive said.Lanna Apisukh for The New York TimesGeneral Mills started to notice the supply chain disruptions late last year.The company’s plant in Wellston, Ohio, which had churned out Totino’s pizza and pizza rolls, working to meet the surge in sales that accompanied the pandemic, suddenly couldn’t get key ingredients.“First it was the starch that we use for the cheeses,” Mr. Nudi said. “Then certain packaging and oils were hard to find. A lot of the materials that we use for Totino’s were challenged from an ingredient standpoint.”By February, there weren’t enough Totino’s pizza and pizza rolls to keep grocery freezer sections full.By then, the company had started daily meetings across its research and development, procurement and supply chain departments to figure out how to revamp and substitute ingredients. For instance when starch became difficult to find, the company began substituting and combining different starches in order to figure out what worked to make the pizza rolls look and taste the same.Ms. May removing pizza rolls from an oven. For General Mills, the starch in cheeses in its Totino’s pizza rolls was an early scarcity. Lanna Apisukh for The New York TimesIn March, the company had filled freezer sections again, Mr. Nudi said.But the lessons being learned from the “new normal” in the supply chain are being felt across the entire company.Before the pandemic, the packaged food industry was a stable environment, with a consistent level of growth, Mr. Nudi said. That made having a secure, steady supply of ingredients easier.Now General Mills is lining up multiple suppliers for each ingredient and keeping more ingredients on hand.“Just-in-time deliveries don’t work anymore,” Mr. Nudi said. “We’re adding to inventory, holding more dry ingredients and fats and oils, even though that’s tough too right now. We need tanks to store those liquids, and those just aren’t readily available.” More