Evelyn Reynolds

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    Why Coupons Are Harder to Find Than Ever

    Jill Cataldo is a master of coupons.She began cutting them out to save a dollar here and 50 cents there in the Great Recession, when she had two children in diapers and money was tight. Starting with a training session at the library in her Chicago suburb, she shared what she learned with others, and now has a syndicated column and a website where she writes about coupon deals and other ways to spend less.The pandemic, however, upended Ms. Cataldo’s world. Paper coupon inserts in the Sunday newspaper seemed flimsier. Even increasingly popular digital coupons were hard to come by.“There are brands that I’ve followed for over a decade that are just not issuing a lot of coupons right now,” Ms. Cataldo said. “It’s kind of frustrating, because it’s something we came to count on for a long time.”Now the steepest rise in the cost of living in four decades is making bargains even more coveted. “With inflation, this is what should go up tremendously as a tool to help customers,” said Sanjay Dhar, a marketing professor at the University of Chicago’s Booth School of Business.But that tool is getting ever harder to come by. In 2021, Kantar Media estimates, 168 billion circulated, across both print and digital formats. That was down from about 294 billion in 2015.The shrinking coupon market includes not just the number of coupons distributed but also the share turned in at checkout. Redemption rates declined to 0.5 percent of all print and digital coupons in 2020 from about 3.5 percent in the early 1980s, according to a paper by economists at Harvard University, Georgetown University and Heinrich Heine University Düsseldorf.The economists see a larger phenomenon: Increasingly time-strapped consumers don’t want to deal with even small hassles to save a few dollars on toothpaste.“The declining use of coupons and the declining redemption rates indicate a fundamental shift in consumer shopping behavior,” the authors wrote. They added, “We view this as additional evidence that declining price sensitivity reflects a longer-run secular trend.”At the same time, mobile phones have made all kinds of other incentives possible, including cash-back rewards, points that can be redeemed for store credit and contest prizes.“Practitioners often want to get discounts to consumers in a seamless manner,” said Eric Anderson, a professor of marketing at Northwestern University’s Kellogg School of Management. “It’s not clear that traditional coupons do this.”That explanation offers little consolation to people who’ve come to depend on coupons to keep their grocery costs down, like Ms. Cataldo’s readers.“I don’t think from the consumer perspective that they’re like, ‘Oh, we don’t care.’ We do care,” Ms. Cataldo said. “It’s just that we have fewer tools right now to play the game.”A Venerable IncentiveThe couponing industry as we know it started in the early 1970s when a Michigan printing company, Valassis Communications, began distributing booklets of discounts on particular products that could be redeemed at any store.Valassis would total up the slips of paper, and the manufacturer reimbursed the retailer for the discount. Soon, grocers saw the value of coupons in driving traffic to their own stores, and began newspaper inserts of their own. The number of print coupons distributed peaked in 1999 at 340 billion, as newspaper circulation also crested, according to Inmar Intelligence, the other large coupon settlement company, alongside Valassis.But a slide in redemption rates had already begun. It’s difficult to pin down why, but people close to the industry believe it’s related to the rise of the two-income household, as more women entered the work force. Ms. Cataldo remembers growing up in the 1980s, when, she said, her mother used coupons enthusiastically.“Back then it was a little bit of a different culture because we had so many stay-at-home parents who had time to do this,” she said. “It’s time that pays well, but you have to have that time, and if you are working eight hours a day, you probably don’t.”Coupon use enjoyed a resurgence during the recession of 2007-9, which left millions of people out of work much longer and with much less financial assistance than they would receive during the pandemic recession a decade later. “Couponing” became a widely used verb courtesy of the reality show “Extreme Couponing,” which brought people into the practice with promises of stackable discounts that could bring the cost of a shopping cart’s worth of purchases close to zero.But what delighted serious couponers dismayed manufacturers, which are focused on getting people to buy things they wouldn’t otherwise, not giving discounts to people who’d buy the product anyway. That’s why brands started pulling back on promotions and limiting the number of coupons that could be used in a given trip.At the same time, grocers and big-box stores were coming under pressure from e-commerce platforms like Amazon. They responded by beefing up their store brand offerings as well as asking companies like Procter & Gamble to lower prices on name-brand items.“They want to get the best deals so they are competitive at the shelf,” said Aimee Englert, who directs client strategy for consumer packaged goods companies at Valassis, now part of a company called Vericast. “What that ends up doing is constricting the budgets that manufacturers have to pull levers, like to provide a coupon.”As their wiggle room on discounts shrank, brands wanted to make sure they were squeezing as many extra purchases as possible out of their promotion dollars. The average value of coupons shrank, as did the time over which they could be used. And the rise of smartphones provided an opportunity that seemed far superior to blanketing neighborhoods with newsprint: Offers could be personalized and aimed at specific demographic profiles. Coupons could be linked to a supermarket loyalty card, which gave retailers data on whether the coupons prompted a shopper to switch brands.Greg Parks is another coupon blogger who got started in the wake of the Great Recession, looking to stretch his income to feed three children. Although he began with newspaper clippings all over his floor, he now does instructional videos exclusively using digital coupons, which can be used nationwide rather than in a single distribution area.Greg Parks is on the high end of coupon user sophistication.Luke Sharrett for The New York TimesMr. Parks at a CVS store where he often films videos on couponing.Luke Sharrett for The New York Times“I like to say that I’m a lazy couponer now,” Mr. Parks said. Plus, he has noticed that digital coupons cut down on dirty looks from cashiers when they have to process a stack of paper.“Some of them act like we’re stealing, or taking something from them,” Mr. Parks said. “They don’t want to deal with all those paper coupons, they’re such a headache. With digital, everything just automatically comes off.” (While only 5 percent of coupons distributed are digital, they represent about a third of all coupons redeemed, according to Inmar.)Mr. Parks, however, is on the high end of coupon user sophistication. Many people who depended most on print coupons — older shoppers on fixed incomes — may not have the computer or smartphone literacy to adopt the digital version. Dr. Dhar, the University of Chicago professor, said the switch to digital hit the wrong demographic.“That’s not the coupon-using population — they don’t use digital media very much,” said Dr. Dhar, who remembers surviving on coupons 30 years ago as a graduate student in Los Angeles. “A lot of this isn’t driven by the response to coupons. It’s driven by coupons not reaching the right people.”To be sure, manufacturers have not abandoned the pure reach of physical coupons. The free-standing insert still works as an advertising vehicle: In fact, the ideal outcome for a manufacturer is that a shopper sees a coupon and then goes to the store to buy the item without redeeming it.A Sudden Shake-UpIf coupons had been slowly dying for years, the pandemic delivered a sharp blow.Seemingly overnight, roiling supply chains and the lurch from office to home left consumers desperate to buy anything they could get their hands on; brand preferences went out the window. When inflation started to spike last year, not only did retailers have trouble keeping shelves stocked, they weren’t even sure they could maintain stable prices until the coupons expired.“The last thing those manufacturers want to do is put more incentives on those because it’s going to spike demand up even more,” said Spencer Baird, Inmar’s interim chief executive. “This is what we very consistently hear: ‘We’ve got a budget, we’re ready to go, but until we get my fill rate where it needs to be, I don’t want to mess up my supply chain.’”Use of even digital coupons sank in 2020, for the first time, before rebounding. While most of those are tethered to a specific retailer, the coupon industry is working on a universal standard that will allow shoppers to redeem digital coupons at any retailer that signs up.But there’s no guarantee that retailers will stick with coupons, when other incentives are gaining in popularity.Lisa Thompson works for Quotient, a company formerly known as Coupons.com, which started in 1998 as a website where you could print coupons rather than clipping them. The company is phasing out printable coupons, and the Coupons.com app already mostly offers cash-back promotions instead.“Honestly, it’s a dying form of savings, and we know that,” Ms. Thompson said. “A lot of my work has been working with the marketing team to make ‘coupon’ sound sexy.”Plenty of dedicated couponers still prefer the old-fashioned way.“I agree, it’s going down, and at some point it will die,” Ms. Cataldo said. “I’m not looking forward to that. But it’s not happening nearly as quickly as they thought it would.” More

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    Highest Mortgage Rates Since 2008 Housing Crisis Cool Sales

    As the Federal Reserve tries to fight high inflation, costly mortgage rates have begun to price people out of the housing market.For the past two years, anyone who had a home to sell could get practically any asking price. Good shape or bad, in cities and in exurbs, seemingly everything on the market had a line of eager buyers.Now, in the span of a few weeks, real estate agents have gone from managing bidding wars to watching properties sit without offers, and once-hot markets like Austin, Texas, and Boise, Idaho, are poised for big declines.The culprit is rising mortgage rates, which have spiked to their highest levels since the 2008 housing crisis in response to the Federal Reserve’s recent efforts to tame inflation. The jump in borrowing costs, adding hundreds of dollars a month to the typical mortgage payment and coming on top of two years of home price increases, has pushed wishful home buyers past their financial limits.“We’ve reached the point where people just can’t afford a house,” said Glenn Kelman, chief executive of Redfin, a national real estate brokerage.Weekly average 30-year fixed mortgage rate

    Source: Freddie MacBy The New York TimesMore than any other part of the economy, housing — a purchase that for most buyers requires taking on huge amounts of debt — is especially sensitive to interest rates. That sensitivity becomes even more pronounced when homes are unaffordable, as they are now. As a result, home prices and new construction are a central component of the Federal Reserve’s efforts to slow rapid inflation by raising interest rates, which the central bank has done several times this year. But the Fed’s moves come with an inherent risk that the economy will spiral into a recession if they stifle home purchases and development activity too much.While housing does not account for a huge amount of economic output, it is a boom-bust industry that has historically played an outsize role in downturns. The sector runs on credit, and new home purchases are often followed by new furniture, new appliances and new electronics that are important pieces of consumer spending.“We need the housing market to bend to rein in inflation, but we don’t want it to break, because that would mean a recession,” said Mark Zandi, chief economist at Moody’s Analytics.Home prices are still at record levels, and they are likely to take months or longer to fall — if they ever do. But that caveat, which real estate agents often hold up as a shield, cannot paper over the fact that demand has waned considerably and that the market direction has changed.Sales of existing homes fell 3.4 percent in May from April, according to the National Association of Realtors, and construction is also down. Homebuilders that had been parsing out their inventory with elaborate lotteries now say their pandemic lists have shriveled to the point that they are lowering prices and sweetening incentives — like cheaper counter and bathroom upgrades — to get buyers over the line.Understand Inflation and How It Impacts YouInflation 101: What’s driving inflation in the United States? What can slow the rapid price gains? Here’s what to know.Inflation Calculator: How you experience inflation can vary greatly depending on your spending habits. Answer these seven questions to estimate your personal inflation rate.An Economic Cliff: Inflation is expected to remain high later this year even as the economy slows and layoffs rise. For many Americans, it’s going to hurt.Greedflation: Some experts say that big corporations are supercharging inflation by jacking up prices. We take a closer look at the issue. “There was this collective belief that housing was invincible — that it was so undersupplied and demand so high that nothing could stop price growth,” said Ali Wolf, chief economist with Zonda, a housing data and consulting firm. “A very rapid increase in interest rates and home prices has proven that theory to be false.”It is a stark change for a market that blossomed soon after the initial shock of the pandemic, which for many people turned out to be a perfect time to buy a home. Rock-bottom mortgage rates lowered borrowing costs, while the shift to home offices and Zoom meetings opened up new swaths of the country to buyers who had been struggling to penetrate the market near the jobs they once commuted to.That caused prices to explode in far-flung exurbs and once-affordable places like Spokane, Wash., where a crush of new home buyers decamped from pricey West Coast cities. People became so willing to move long distances to buy a home that “the normal laws of supply and demand didn’t apply,” Mr. Kelman said.After two years of swift price increases, however, places that once seemed cheap no longer are. Home values have risen about 40 percent over the past two years, according to Zillow, forcing buyers to stretch ever further in price even as they run out of geography.Now add in mortgage rates, which have nearly doubled this year. And inflation, which is eating into savings for some families as it increases household expenses. And a wobbly stock market, which has reduced the value of portfolios that many buyers intended to tap for a down payment.Larisa Kiryukhin and her husband are renting a home in Sarasota, Fla., after higher interest rates thwarted their purchase of a house.Todd Anderson for The New York TimesLarisa Kiryukhin and her family were long ago priced out of the San Francisco Bay Area, where they had lived for decades. Ms. Kiryukhin, 44, is a medical assistant who was tied to her hospital, but the pandemic gave her husband, who works in information technology, the flexibility to move to a more affordable city. So Ms. Kiryukhin switched jobs, and this year the couple and their two children moved to Tampa, Fla., in hopes of buying a home.Inflation F.A.Q.Card 1 of 5What is inflation? More

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    North of Atlanta, a Trove of Wineries

    Georgia actually has a long history with vineyards. About 90 miles from Atlanta, in the shadow of the Blue Ridge Mountains, there are more than 40 wineries and tasting rooms.La Tanya Eiland is from Compton, Calif. and has a passion for wine. So when she moved to Atlanta in 2013, she asked locals the question she always asks when she travels anywhere new: “Where is wine country?”In Atlanta, the most common answer was “north.”About 90 miles north of Atlanta, nestled in the foothills of the Blue Ridge Mountains, the city of Dahlonega has a dozen wine tasting rooms and eight wineries. Nearby communities, including Helen, Cleveland and Sautee Nacoochee, are also home to several establishments that offer local, regional and international wines. In total, North Georgia has more than 40 wineries and tasting rooms in a region that is becoming an increasingly popular destination for day trips and weekends away. More

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    New York Fed President John Williams says a U.S. recession is not his base case

    New York Federal Reserve President John Williams told CNBC the economy is likely to avoid recession even with higher interest rates.
    The Fed has been raising rates to control inflation, and Williams said that will continue as “we’re far from where we need to be.”

    New York Federal Reserve President John Williams said Tuesday he expects the U.S. economy to avoid recession even as he sees the need for significantly higher interest rates to control inflation.
    “A recession is not my base case right now,” Williams told CNBC’s Steve Liesman during a live “Squawk Box” interview. “I think the economy is strong. Clearly financial conditions have tightened and I’m expecting growth to slow this year quite a bit relative to what we had last year.”

    Quantifying that, he said he could see gross domestic product gains reduced to about 1% to 1.5% for the year, a far cry from the 5.7% in 2021 that was the fastest pace since 1984.
    “But that’s not a recession,” Williams noted. “It’s a slowdown that we need to see in the economy to really reduce the inflationary pressures that we have and bring inflation down.”
    The most commonly followed inflation indicator shows prices increased 8.6% from a year ago in May, the highest level since 1981. A measure the Fed prefers runs lower, but is still well above the central bank’s 2% target.

    ‘Far from where we need to be’

    In response, the Fed has enacted three interest rate increases this year totaling about 1.5 percentage points. Recent projections from the rate-setting Federal Open Market Committee indicate that more are on the way.
    Williams said it’s likely that the federal funds rate, which banks charge each other for overnight borrowing but which sets a benchmark for many consumer debt instruments, could rise to 3%-3.5% from its current target range of 1.5%-1.75%.

    He said “we’re far from where we need to be” on rates.
    “My own baseline projection is we do need to get into somewhat restrictive territory next year given the high inflation, the need to bring inflation down and really to achieve our goals,” Williams said. “But that projection is about a year from now. Of course, we need to be data dependent.”
    Some data points lately have pointed to a sharply slowing growth picture.
    While inflation runs at its highest level since the Regan administration, consumer sentiment is at record lows and inflation expectations are rising. Recent manufacturing surveys from regional Fed offices suggest activity is contracting in multiple areas. The employment picture has been the main bright spot for the economy, though weekly jobless claims have been ticking slightly higher.
    An Atlanta Fed gauge that tracks GDP data in real time is pointing to just a 0.3% growth rate for the second quarter after a 1.5% decline in Q1.
    Williams acknowledged that “we’re going to have lower growth, but still growth this year.”
    In addition to rate hikes, the Fed has begun to shed some of the assets on its balance sheet — particularly Treasurys and mortgage-backed securities. The New York Fed is in the early stages of a program that eventually will see the central bank allow up to $95 billion in proceeds from maturing bonds roll off each month.
    “I’m not seeing any signs of a taper tantrum. The markets are functioning well,” Williams said.
    A St. Louis Fed indicator of market stress is running around record lows in data that goes back to 1993.

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    The Pandemic Flight of Wealthy New Yorkers Was a Once-in-a-Century Shock

    New tax data reveal a steep population loss in 2020, toward the start of the pandemic. The exodus was temporary, but how much of its effects could be permanent?When roughly 300,000 New York City residents left during the early part of the pandemic, officials described the exodus as a once-in-a-century shock to the city’s population.Now, new data from the Internal Revenue Service shows that the residents who moved to other states by the time they filed their 2019 taxes collectively reported $21 billion in total income, substantially more than those who departed in any prior year on record. The IRS said the data captured filings received in 2020 and as late as July 2021.Many new or returning residents have since moved in. But the total income of those who had initially left was double the average amount of those who had departed over the previous decade, a potential loss that could have long-term effects on a city that relies heavily on its wealthiest residents to support schools, law enforcement and other public services.The sheer number of people who left in such a short period raises uncertainty about New York City’s competitiveness and economic stability. The top 1 percent of earners, who make more than $804,000 a year, contributed 41 percent of the city’s personal income taxes in 2019.About one-third of the people who left moved from Manhattan, and had an average income of $214,300. No other large American county had a similar exodus of wealth.Early in the pandemic, Sam Williamson, 51, a white-collar defense lawyer living on the Upper West Side of Manhattan, first relocated to Utah, then to Long Island. After a return to the city, he and his family permanently moved to Miami last year when his law firm opened an office there.“I love New York City, but it’s been a challenging time,” Mr. Williamson said. “I didn’t feel like the city handled the pandemic very well.”The average income of city residents who moved out of state was 24 percent higher than of those who moved the year prior, according to a New York Times analysis of federal tax returns that were due in 2020. It was the biggest one-year income increase among people who left the city for other states in at least a decade.The tax data is in line with the most recent Census Bureau estimates, which showed that in the first year of the pandemic, the number of New York City residents who left was more than triple the typical annual outflow before the pandemic. International immigration, a key source of growth in New York, plummeted to one-fourth the level prepandemic. And the death rate surged, as approximately 17,000 more residents died than in a typical year.All of this led to a loss of about 337,000 people in New York City between April 2020 and June 2021, according to census estimates, a startling drop after the city’s population reached 8.8 million residents, a record high, in early 2020.New York City’s official demographers say that the pandemic was a blip in the city’s long-term population growth and that migration trends have returned to prepandemic levels, pointing to indicators like change-of-address requests and soaring rents that suggest people are flooding back.But, they said, it is too soon to conclude when the population that was lost will be completely replaced.And other indicators suggest flight from the city may be continuing. Public school enrollment this year is down 6.4 percent compared with before the pandemic, according to New York City Department of Education data, and private school enrollment decreased by 3 percent, according to state data, potentially signaling a reduction in the number of families that could hurt the city’s ability to foster a diverse work force.“All of these are underlying trends that are concerning,” said Andrew Rein, president of the Citizens Budget Commission, a nonpartisan fiscal watchdog. “We don’t know what this means permanently, but things have shifted in a way that should give anybody looking at this some serious pause.”In the years before 2019, the people who left and the people who stayed in New York City had similar average incomes, the IRS data showed. But during the pandemic, the residents who moved had average incomes that were 28 percent higher than the residents who stayed.Still, New York City collected more tax revenue in both 2020 and 2021 than in 2019, thanks in part to at least $16 billion in federal pandemic aid.The outlook for this year has become much less certain as the stock market has plummeted in recent months and certain forms of federal aid, like stimulus checks and expanded unemployment benefits, have ended.The city’s Independent Budget Office said it was not possible to calculate the tax revenue lost from the people who had moved because some of them could be working remotely for New York-based companies and paying city income tax. In the long term, the office said, their tax status could become a major policy issue as states fight for their share of taxes from remote workers.Sophia and Charlie Blackett relocated last year to Rowayton, Conn., from Brooklyn, partly because both of their jobs in tech allowed them to permanently work from home. Ms. Blackett, 27, had previously considered raising children in the city, but the confinement of the pandemic shifted her thinking.“I used to thrive on the hustle and bustle,” she said. Now, she said, “I think about waking up in my bed in an apartment, and I just feel a little bit anxious.”The issue has become a talking point in the governor’s race. Gov. Kathy Hochul, a moderate Democrat, said earlier this year that the steep population drop in New York State, driven by the city losses, was “an alarm bell that cannot be ignored.” Representative Tom Suozzi of Long Island, a centrist challenging her in this month’s primary, has blamed the exodus on crime, high taxes and an unaffordable cost of living.Gergana Ivanova, 28, a clothing designer and social media influencer, said her decision to move to Miami was less about taxes. The pandemic made the downsides of living in New York City more noticeable, she said, including the lack of space in her tiny Queens apartment and the trash piling up on the sidewalks. She felt less safe walking around when the streets were emptier.“It didn’t feel happy and positive like it used to,” she said.Gergana Ivanova at Margaret Pace Park in Miami, where she moved from Queens.Scott McIntyre for The New York TimesUrban planners and economists have long debated the extent to which policymakers should be concerned about the outflow of New Yorkers to other states. Some see it as a positive sign of mobility for people who start their careers in New York, making way for new arrivals to inject vibrancy into neighborhoods.In a new report published Thursday, the Department of City Planning said federal immigration levels and change-of-address data from the Postal Service show that New York City’s population trends likely returned to prepandemic levels by the second half of 2021. And deaths from Covid-19 are significantly lower than early in the pandemic.Since the 1950s, New York City has had a net loss of residents to other states, but the population still grew because the number of immigrants and new births surpassed the number of people who moved away.The pandemic spurred a flight to many of the same suburbs that have long attracted New Yorkers seeking more space, including Connecticut’s Fairfield County and New Jersey’s Bergen and Essex Counties. But it also triggered residents to leave for more far-flung destinations, including Hawaii, the Florida Keys and ski towns in Colorado, Utah and Wyoming.Charlie and Sophia Blackett moved to Rowayton, Conn., from Brooklyn.Anthony Nazario for The New York TimesThe exodus to Florida was especially robust, and not just for the retiree crowd. In 2020, New York City had a net loss of nearly 21,000 residents to Florida, IRS data showed, almost double the average annual net loss from before the pandemic.The pandemic accelerated the relocation of several New York-based financial firms to new offices or headquarters in Florida. Many of them have landed in Palm Beach, Fla., including the hedge fund Elliott Management, whose co-chief executive, Jonathan Pollock, is now a full-time Florida resident, according to records obtained by The New York Times.The Manhattan residents who moved to Palm Beach County had an average income of $728,351, IRS data showed.Many New Yorkers also moved because they lost their jobs in the industries hardest hit by the pandemic. In New York City, the unemployment rate is almost double the nation’s, in part because the city still has at least 61,000 fewer leisure and hospitality jobs than before the pandemic, according to the most recent jobs report.Zak Jacoby was the general manager of a bar on the Lower East Side when the pandemic hit. Throughout 2020, his employment status fluctuated with the city’s changing indoor dining rules, a stressful period that put him on and off unemployment benefits.Mr. Jacoby, 37, flew to Miami in January 2021 to see a friend — and decided to stay permanently after getting a job offer at a local restaurant group. If there was another virus surge, he said, the state would be less likely to shut down businesses, giving him more job security.“My mind-set was, Florida’s more lenient on Covid, and there’s going to be less regulation,” he said.During his first six months in office, Mayor Eric Adams visited cities like Miami and Los Angeles as part of what he said were efforts to lure businesses and residents back to New York.Jonathan Koplovitz, 53, an executive at an automotive engineering and design start-up, is among the residents who came back.As the virus began sweeping through New York, Mr. Koplovitz and his family moved from their apartment in Manhattan’s Chelsea neighborhood to Aspen, Colo., the upscale ski resort town. Expecting to stay permanently, they bought a home about a mile from the ski lifts, where his two teenage sons finished the rest of the school year with virtual classes.But on a trip back to New York, he found the city to be far more vibrant than the darkest days of the pandemic. Once in-person schooling resumed in fall 2020, the family decided to return.“There’s no place like New York,” Mr. Koplovitz said. More

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    Hacking High Gas Prices: How People Are Changing Their Habits

    From changing their work hours to driving farther in search of cheaper deals, people have been making crafty calculations to grapple with expensive gasoline.“I SOLD MY GIRLFRIENDS CAR CAUSE GAS PRICES ARE HIGH 😳” reads the caption on the video Justice Alexander posted online this spring. In the clip, Mr. Alexander, a content creator in Los Angeles, sits atop a horse and declares that he will now travel on horseback.The video, which has been viewed nearly 10 million times so far on TikTok, struck a nerve. While Mr. Alexander later said in an interview that it was a stunt — an Instagram follower lent him the horse, and his household still drives — the sight of him in stirrups, staring defiantly off into the distance captured a once-in-a-generation moment of angst. Gas prices are at record highs. Even when adjusting for inflation, they are on average at levels rarely seen in the last half century.Beyond posting absurd public displays of frustration, many Americans are now grasping for ways to save money by changing work hours or by weighing the algebraic trade-offs of driving farther to find a cheaper pump.Some recognize they have little option to avoid paying more, especially when commuting is a matter of keeping a job or not, but others have been learning to make new trade-offs and crafty calculations. “It’s all about doing the math,” said Ava Patterson, a 25-year-old waitress at a seafood restaurant in East Peoria, Ill.When she notices her tank running low, Ms. Patterson gets out her phone and starts strategizing. Before she leaves her home about 30 minutes away from work, she checks GasBuddy, an app that shows prices at nearby stations. She then calculates what the total price at a given station will be to fill her tank when she stacks one of her three gas rewards accounts on top of the listed price. Ms. Patterson also stops at pumps in small farming towns on her route, where gas tends to be a bit cheaper, she said, and reports rates to GasBuddy to earn points to be entered in a raffle for free fuel.All told, these workarounds can save her up to $2.30 per tank. These days, it generally costs her about $80 to completely fill her 2017 Hyundai Sonata.Ms. Patterson has recently been trying hard to cut down on driving. She does not attend practices for her recreational softball league about an hour away. She has also been rethinking her work schedule. “I started doing more doubles because I want to make sure that it’s worthwhile to drive the distance to work,” Ms. Patterson said. “I’m a waitress, so the money that I make fluctuates,” she added. “It’s made me hesitate on when I want to leave the house.”According to a survey from AAA conducted earlier this year, 75 percent of American adults said they would start changing their lifestyles and habits when gas hit $5 a gallon.Eddie Perez, who owns Scottsdale Party Bus and Limo in Arizona, has been forced to raise rates, and he advises his drivers to stop idling whenever possible.Caitlin O’Hara for The New York TimesAndy Gross, a spokesman for AAA, said demand for gas dipped the week of June 18 for the first time in three weeks, possibly because of increased prices. Those who didn’t drive much before, for environmental or lifestyle reasons, are cutting back further.But for the most part, people are still driving as much as they had been before. For some, that has meant, paradoxically, driving more to find cheaper places to fill up — even if it’s a matter of only saving a few dollars.Tawaine Hall, 36, a network engineer in Fort Worth, said he has driven 45 minutes from his home to take advantage of gas prices that were around a dollar less than those near where he lives. He said he also buys Walmart gift cards, which provide a discount at Walmart gas stations.Jordan Rowe, 27, has driven 25 minutes out of his way to go to a station that accepts the Exxon Mobil rewards app so he can earn points toward future purchases. An assistant general manager at a McDonald’s near Richmond, Va., he commutes about 45 minutes each day to get to work. He has started giving friends rides to work, as well.In some cases, the high costs have given rise to car-pooling and other shared commuting options around the country.Jennifer Gebhard, the executive director of Central Indiana Regional Transportation Authority, said that during the pandemic, her team operated a fleet of 10 vans. Now, there are 30.“Especially in the Midwest, we’re a very drive-by-yourself community,” she said. But many local employers have reached out to her office about setting up van pools for their staffs in recent months. Passengers split the cost.“A hack I would love to have is car-pooling,” said Alexa Lopez. But she has not found a viable options near where she lives in Kissimmee, Fla. She has a long commute: 51 miles each day from her home to her job at a plumbing supply company in Melbourne. So to save money on gas, she has cut down on extracurricular driving, as well as some more essential activities.Ms. Lopez, 30, used to make trips to the grocery store without thinking twice. Now, because of inflation and the high prices of getting herself to the store, she goes only every two weeks. Previously, she said, she would buy “anything and everything,” including snacks like chips for her son. But, she said, “I can’t really buy too much of those any more.”She added, “I’m feeling like pretty much the average American right now: struggling.”For the first time in years, some who had been doing relatively well are facing hard trade-offs. As the war in Ukraine and the pandemic continue to roil the economy, concerns are growing that the U.S. economy may be on the brink of a recession. People are moving to ease their commutes. Family visits are being minimized. Future savings are being funneled toward ballooning grocery prices. It has been a hard jolt.Elizabeth Hjelvik, 26, a graduate student in materials science at the University of Colorado at Boulder, watches her budget closely. She recently started riding her bike to campus. She has also started working from home more often, using her parents’ Kroger fuel points to fill up the tank of her 2005 Honda and cutting back on spontaneous weekend trips.Ms. Hjelvik recalled saying, as she and her partner were recently driving back from a trip to Fort Collins, Colo., about 50 miles away, “This drive is so beautiful, but it might be something we can’t do in the future.” Her family lives in New Mexico, within driving distance of Boulder. “Ideally we would be able to go see them more often, but it’s a lot of gas,” she said.Kaitlyn Thomas, 25, a medical resident living in Horseheads, N.Y., said she sometimes Googles gas prices in nearby Pennsylvania. She also has a running note on her phone where she tracks what’s advertised at the stations she passes on her commute. Next week, she is moving to Sayre, Penn., in order to live within walking distance of work.Laura Romine, 22, took the balancing act one step further: She moved into her van two years ago in order to save money and travel. “Now it’s really not saving that much money,” she said. She keeps her van parked more and avoids traveling around.Gas prices have started to inch down across the United States in the last week, AAA data shows. As of Friday, the average was $4.93 a gallon, compared with $5 a week ago. But economists and industry analysts predict that prices will stay high in the near term, especially as the summer travel season continues and the global energy market remains uncertain. High prices are reaching every corner of the American consumer economy, and fuel costs are having a similar effect.Diesel, which fuels many commercial buses, vans and trucks, has risen similarly this year. That has forced companies to rethink how they conduct their businesses.Near Scottsdale, Ariz., where Eddie Perez owns a party bus company, it’s common to have vehicles idling while customers are at bars or dinner, partly to keep them cool during blazing hot months. He has told his drivers to turn off the buses when possible, and he has raised his prices.George Jacobs, the chief executive of Windy City Limousine and Bus Worldwide in Chicago, said that rising diesel price have “just decimated us.” To try to save fuel, his team has closely monitored software that shows if any of his buses are idling and that flags whether the buses are traveling at the most efficient speeds.He is exploring the idea of adding electric buses to his fleet, as well as other ways to make his operation more efficient. In the meantime, he said that his drivers try to purchase gas out of state, like in Indiana, when they are on the road.“Any time we can fuel up outside of Cook County we do that,” he said. “It’s very serious money.” More

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    As Russia Chokes Ukraine’s Grain Exports, Romania Tries to Fill In

    Stopping at the edge of a vast field of barley on his farm in Prundu, 30 miles outside Romania’s capital city of Bucharest, Catalin Corbea pinched off a spiky flowered head from a stalk, rolled it between his hands, and then popped a seed in his mouth and bit down.“Another 10 days to two weeks,” he said, explaining how much time was needed before the crop was ready for harvest.Mr. Corbea, a farmer for nearly three decades, has rarely been through a season like this one. The Russians’ bloody creep into Ukraine, a breadbasket for the world, has caused an upheaval in global grain markets. Coastal blockades have trapped millions of tons of wheat and corn inside Ukraine. With famine stalking Africa, the Middle East and elsewhere in Asia, a frenetic scramble for new suppliers and alternate shipping routes is underway.“Because of the war, there are opportunities for Romanian farmers this year,” Mr. Corbea said through a translator.The question is whether Romania will be able to take advantage of them by expanding its own agricultural sector while helping fill the food gap left by landlocked Ukraine.Catalin Corbea, in his trophy room showing stuffed animals from hunting expeditions, said the war in Ukraine had presented opportunities to Romanian farmers.Cristian Movila for The New York TimesIn many ways, Romania is well positioned. Its port in Constanta, on the western coast of the Black Sea, has provided a critical — although tiny — transit point for Ukrainian grain since the war began. Romania’s own farm output is dwarfed by Ukraine’s, but it is one of the largest grain exporters in the European Union. Last year, it sent 60 percent of its wheat abroad, mostly to Egypt and the rest of the Middle East. This year, the government has allocated 500 million euros ($527 million) to support farming and keep production up.Still, this Eastern European nation faces many challenges: Its farmers, while benefiting from higher prices, are dealing with spiraling costs of diesel, pesticides and fertilizer. Transportation infrastructure across the country and at its ports is neglected and outdated, slowing the transit of its own exports while also stymieing Romania’s efforts to help Ukraine do an end run around Russian blockades.Even before the war, though, the global food system was under stress. Covid-19 and related supply chain blockages had bumped up prices of fuel and fertilizer, while brutal dry spells and unseasonal floods had shrunk harvests.Since the war began, roughly two dozen countries, including India, have tried to bulk up their own food supplies by limiting exports, which in turn has exacerbated global shortages. This year, droughts in Europe, the United States, North Africa and the Horn of Africa have all taken additional tolls on harvests. In Italy, water has been rationed in the farm-producing Po Valley after river levels dropped enough to reveal a barge that had sunk in World War II.Rain was not as plentiful in Prundu as Mr. Corbea would have liked it to be, but the timing was opportune when it did come. He bent down and picked up a fistful of dark, moist soil and caressed it. “This is perfect land,” he said. “This is perfect land,” Mr. Corbea said after picking a handful of soil on his farm in Prundu.Cristian Movila for The New York TimesThunderstorms are in the forecast, but this morning, the seemingly endless bristles of barley flutter under a cloudless cerulean sky.The farm is a family affair, involving Mr. Corbea’s two sons and his brother. They farm 12,355 acres or so, growing rapeseed, corn, wheat, sunflowers and soy as well as barley. Across Romania, yields are not expected to match the record grain production of 29 million metric tons from 2021, but the crop outlook is still good, with plenty available to export.Mr. Corbea slips into the driver’s seat of a white Toyota Land Cruiser and drives through Prundu to visit the cornfields, which will be harvested in the fall. He has been mayor of this town of 3,500 for 14 years and waves to every passing car and pedestrian, including his mother, who is standing in front of her house as he cruises by. The trees and splashes of red-and-pink rose bushes that line every street were planted by and are cared for by Mr. Corbea and his workers.He said he employed 50 people and brought in €10 million a year in sales. In recent years, the farm has invested heavily in technology and irrigation.Amid rows of leafy green corn, a long center-pivot irrigation system is perched like a giant skeletal pterodactyl with its wings outstretched.Because of price rises and better production from the watering equipment he installed, Mr. Corbea said, he expected revenues to increase by €5 million, or 50 percent, in 2022.Investments like Mr. Corbea’s in irrigation and technology are considered crucial for Romania’s agricultural growth to reach its potential.Cristian Movila for The New York TimesThe costs of diesel, pesticides and fertilizer have doubled or tripled, but, at least for now, the prices that Mr. Corbea said he had been able to get for his grain had more than offset those increases.But prices are volatile, he said, and farmers have to make sure that future revenues will cover their investments over the longer term.The calculus has paid off for other large players in the sector. “Profits have increased, you cannot imagine, the biggest ever,” said Ghita Pinca, general manager at Agricover, an agribusiness company in Romania. There is enormous potential for further growth, he said, though it depends on more investment by farmers in irrigation systems, storage facilities and technology.Some smaller farmers like Chipaila Mircea have had a tougher time. Mr. Mircea grows barley, corn and wheat on 1,975 acres in Poarta Alba, about 150 miles from Prundu, near the southeastern tip of Romania and along the canal that links the Black Sea with the Danube River.Drier weather means his output will fall from last year. And with the soaring prices of fertilizer and fuel, he said, he expects his profits to drop as well. Ukrainian exporters have lowered their prices, which has put pressure on what he is selling.Mr. Mircea’s farm is about 15 miles from Constanta port. Normally a major grain and trade hub, the port connects landlocked central and southeastern European countries like Serbia, Hungary, Slovakia, Moldavia and Austria with central and East Asia and the Caucasus region. Last year the port handled 67.5 million tons of cargo, more than a third of it grain. Now, with Odesa’s port closed off, some Ukrainian exports are making their way through Constanta’s complex.Grain from Ukraine being unloaded from a train car in Constanta, a Romanian port on the Black Sea.Cristian Movila for The New York TimesRailway cars, stamped “Cereale” on their sides, spilled Ukrainian corn onto underground conveyor belts, sending up billowing dust clouds last week at the terminal operated by the American food giant Cargill. At a quay operated by COFCO, the largest food and agricultural processor in China, grain was being loaded onto a cargo ship from one of the enormous silos that lined its docks. At COFCO’s entry gate, trucks that displayed Ukraine’s distinctive blue-and-yellow-striped flag on their license plates waited for their cargoes of grain to be inspected before unloading.During a visit to Kyiv last week, Romania’s president, Klaus Iohannis, said that since the beginning of the invasion more than a million tons of Ukrainian grain had passed through Constanta to locations around the world.But logistical problems prevent more grain from making the journey. Ukraine’s rail gauges are wider than those elsewhere in Europe. Shipments have to be transferred at the border to Romanian trains, or each railway car has to be lifted off a Ukrainian undercarriage and wheels to one that can be used on Romanian tracks.Truck traffic in Ukraine has been slowed by backups at border crossings — sometimes lasting days — along with gas shortages and damaged roadways. Russia has targeted export routes, according to Britain’s defense ministry.Romania has its own transit issues. High-speed rail is rare, and the country lacks an extensive highway system. Constanta and the surrounding infrastructure, too, suffer from decades of underinvestment.Bins storing corn, wheat, sunflower seeds and soybeans in Boryspil, Ukraine.Nicole Tung for The New York TimesOver the past couple of months, the Romanian government has plowed money into clearing hundreds of rusted wagons from rail lines and refurbishing tracks that were abandoned when the Communist regime fell in 1989.Still, trucks entering and exiting the port from the highway must share a single-lane roadway. An attendant mans the gate, which has to be lifted for each vehicle.When the bulk of the Romanian harvest begins to arrive at the terminals in the next couple of weeks, the congestion will get significantly worse. Each day, 3,000 to 5,000 trucks will arrive, causing backups for miles on the highway that leads into Constanta, said Cristian Taranu, general manager at the terminals run by the Romanian port operator Umex.Mr. Mircea’s farm is less than a 30-minute drive from Constanta. But “during the busiest periods, my trucks are waiting two, three days” just to enter the port’s complex so they can unload, he said through a translator.That is one reason he is less sanguine than Mr. Corbea is about Romania’s ability to take advantage of farming and export opportunities.“Port Constanta is not prepared for such an opportunity,” Mr. Mircea said. “They don’t have the infrastructure.”Constanta is bracing for backups at its port when the bulk of Romania’s harvest starts arriving in the coming weeks.Cristian Movila for The New York Times More

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    Fed Confronts a ‘New World’ of Inflation

    Central banks had a longstanding playbook for how inflation worked. In the postpandemic era, all bets are off.Federal Reserve officials are questioning whether their longstanding assumptions about inflation still apply as price gains remain stubbornly and surprisingly rapid — a bout of economic soul-searching that could have big implications for the American economy.For years, Fed policymakers had a playbook for handling inflation surprises: They mostly ignored disruptions to the supply of goods and services when setting monetary policy, assuming they would work themselves out. The Fed guides the economy by adjusting interest rates, which influence demand, so keeping consumption and business activity chugging along at an even keel was the primary focus.But after the global economy has been rocked for two years by nonstop supply crises — from shipping snarls to the war in Ukraine — central bankers have stopped waiting for normality to return. They have been raising interest rates aggressively to slow down consumer and business spending and cool the economy. And they are reassessing how inflation might evolve in a world where it seems that the problems may just keep coming.If the Fed determines that shocks are unlikely to ease — or will take so long that they leave inflation elevated for years — the result could be an even more aggressive series of rate increases as policymakers try to quash demand into balance with a more limited supply of goods and services. That painful process would ramp up the risk of a recession that would cost jobs and shutter businesses.“The disinflationary forces of the last quarter-century have been replaced, at least temporarily, by a whole different set of forces,” Jerome H. Powell, the Fed chair, said during Senate testimony on Wednesday. “The real question is: How long will this new set of forces be sustained? We can’t know that. But in the meantime, our job is to find maximum employment and price stability in this new economy.”When prices began to pick up rapidly in early 2021, top Fed policymakers joined many outside economists in predicting that the change would be “transitory.” Inflation had been slow in America for most of the 21st century, weighed down by long-running trends like the aging of the population and globalization. It seemed that one-off pandemic shocks, especially a used-car shortage and ocean shipping issues, should fade with time and allow that trend to return.But by late last year, central bankers were beginning to rethink their initial call. Supply chain problems were becoming worse, not better. Instead of fading, price increases had accelerated and broadened beyond a few pandemic-affected categories. Economists have made a monthly habit of predicting that inflation has peaked only to see it continue to accelerate.Now, Fed policymakers are analyzing what so many people missed, and what it says about the unrelenting inflation burst.“Of course we’ve been looking very carefully and hard at why inflation picked up so much more than expected last year and why it proved so persistent,” Mr. Powell said at a news conference last week. “It’s hard to overstate the extent of interest we have in that question, morning, noon and night.”The Fed has been reacting. It slowed and then halted its pandemic-era bond purchases this winter and spring, and it is now shrinking its asset holdings to take a little bit of juice out of markets and the economy. The central bank has also ramped up its plans to raise interest rates, lifting its main policy rate by a quarter point in March, half a point in May and three-quarters of a point last week while signaling more to come.Understand Inflation and How It Impacts YouInflation 101: What’s driving inflation in the United States? What can slow the rapid price gains? Here’s what to know.Inflation Calculator: How you experience inflation can vary greatly depending on your spending habits. Answer these seven questions to estimate your personal inflation rate.An Economic Cliff: Inflation is expected to remain high later this year even as the economy slows and layoffs rise. For many Americans, it’s going to hurt.Greedflation: Some experts say that big corporations are supercharging inflation by jacking up prices. We take a closer look at the issue. It is making those decisions without much of an established game plan, given the surprising ways in which the economy is behaving.“We’ve spent a lot of time — as a committee, and I’ve spent a lot of time personally — looking at history,” Patrick Harker, president of the Federal Reserve Bank of Philadelphia, said in an interview on Wednesday. “Nothing quite fits this situation.”A recruiter at a job fair in North Miami Beach, Fla., last week. Labor shortages are pushing up wages, which is likely contributing to higher inflation. Scott McIntyre for The New York TimesGas prices have helped drive inflation higher.Scott McIntyre for The New York TimesThe economic era before the pandemic was stable and predictable. America and many developed economies spent those decades grappling with inflation that seemed to be slipping ever lower. Consumers had come to expect prices to remain relatively stable, and executives knew that they could not charge a lot more without scaring them away.Shocks to supply that were outside the Fed’s control, like oil or food shortages, might push up prices for a while, but they typically faded quickly. Now, the whole idea of “transient” supply shocks is being called into question.The global supply of goods has been curtailed by one issue after another since the onset of the pandemic, from lockdowns in China that slowed the production of computer chips and other goods to Russia’s invasion of Ukraine, which has limited gas and food availability.At the same time, demand has been heady, boosted by government pandemic relief checks and a strong labor market. Businesses have been able to charge more for their limited supply, and consumer prices have been picking up sharply, climbing 8.6 percent over the year through May.Research from the Federal Reserve Bank of San Francisco released this week found that demand was driving about one-third of the current jump in inflation, while issues tied to supply or some ambiguous mix of supply-and-demand factors were driving about two-thirds.That means that returning demand to more normal levels should help ease inflation somewhat, even if supply in key markets remain roiled. The Fed has been clear that it cannot directly lower oil and gas prices, for instance, because those costs turn more on the global supply than they do on domestic demand.“There’s really not anything that we can do about oil prices,” Mr. Powell told senators on Wednesday. Still, he added later, “there is a job to moderating demand so that it can be in better balance with supply.”Inflation F.A.Q.Card 1 of 5What is inflation? More