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    Illegal Immigration Is Down, Changing the Face of California Farms

    Listen to This ArticleTo hear more audio stories from publications like The New York Times, download Audm for iPhone or Android.GONZALES, Calif. — It looks like a century-old picture of farming in California: a few dozen Mexican men on their knees, plucking radishes from the ground, tying them into bundles. But the crews on Sabor Farms’ radish patch, about a mile south of the Salinas River, represent the cutting edge of change, a revolution in how America pulls food from the land.For starters, the young men on their knees are working alongside technology unseen even 10 years ago. Crouched behind what looks like a tractor retrofitted with a packing plant, they place bunches of radishes on a conveyor belt within arm’s reach, which carries them through a cold wash and delivers them to be packed into crates and delivered for distribution in a refrigerated truck.The other change is more subtle, but no less revolutionary. None of the workers are in the United States illegally.Both of these transformations are driven by the same dynamic: the decline in the supply of young illegal immigrants from Mexico, the backbone of the work force picking California’s crops since the 1960s.The new demographic reality has sent farmers scrambling to bring in more highly paid foreign workers on temporary guest-worker visas, experiment with automation wherever they can and even replace crops with less labor-intensive alternatives.“Back in the day, you had people galore,” said Vanessa Quinlan, director of human resources at Sabor Farms. These days, not so much: Some 90 percent of Sabor’s harvest workers come from Mexico on temporary visas, said Jess Quinlan, the farm’s president and Ms. Quinlan’s husband. “We needed to make sure we had bodies available when the crop is ready,” he said.For all the anxiety over the latest surge in immigration, Mexicans — who constitute most of the unauthorized immigrants in the United States and most of the farmworkers in California — are not coming in the numbers they once did.There are a variety of reasons: The aging of Mexico’s population slimmed the cohort of potential migrants. Mexico’s relative stability after the financial crises of the 1980s and 1990s reduced the pressures for them to leave, while the collapse of the housing bubble in the United States slashed demand for their work north of the border. Stricter border enforcement by the United States, notably during the Trump administration, has further dented the flow.“The Mexican migration wave to the United States has now crested,” the economists Gordon Hanson and Craig McIntosh wrote.As a consequence, the total population of unauthorized immigrants in the United States peaked in 2007 and has declined slightly since then. California felt it first. From 2010 to 2018, the unauthorized immigrant population in the state declined by some 10 percent, to 2.6 million. And the dwindling flow sharply reduced the supply of young workers to till fields and harvest crops on the cheap.The state reports that from 2010 to 2020, the average number of workers on California farms declined to 150,000 from 170,000. The number of undocumented immigrant workers declined even faster. The Labor Department’s most recent National Agricultural Workers Survey reports that in 2017 and 2018, unauthorized immigrants accounted for only 36 percent of crop workers hired by California farms. That was down from 66 percent, according to the surveys performed 10 years earlier.The immigrant work force has also aged. In 2017 and 2018, the average crop worker hired locally on a California farm was 43, according to the survey, eight years older than in the surveys performed from 2007 to 2009. The share of workers under the age of 25 dropped to 7 percent from a quarter.The radish harvest at Sabor Farms. “Back in the day, you had people galore,” the company’s human resources director said. Desperate to find an alternative, farms turned to a tool they had largely shunned for years: the H-2A visa, which allows them to import workers for a few months of the year.The visa was created during the immigration reform of 1986 as a concession to farmers who complained that the legalization of millions of unauthorized immigrants would deprive them of their labor force, as newly legalized workers would seek better jobs outside agriculture.But farmers found the H-2A process too expensive. Under the rules, they had to provide H-2A workers with housing, transportation to the fields and even meals. And they had to pay them the so-called adverse effect wage rate, calculated by the Agriculture Department to ensure they didn’t undercut the wages of domestic workers.It remained cheaper and easier for farmers to hire the younger immigrants who kept on coming illegally across the border. (Employers must demand documents proving workers’ eligibility to work, but these are fairly easy to fake.)That is no longer the case. There are some 35,000 workers on H-2A visas across California, 14 times as many as in 2007. During the harvest they crowd the low-end motels dotting California’s farm towns. A 1,200-bed housing facility exclusive to H-2A workers just opened in Salinas. In King City, some 50 miles south, a former tomato processing shed was retrofitted to house them.“In the United States we have an aging and settled illegal work force,” said Philip Martin, an expert on farm labor and migration at the University of California, Davis. “The fresh blood are the H-2As.” Immigrant guest workers are unlikely to fill the labor hole on America’s farms, though. For starters, they are costlier than the largely unauthorized workers they are replacing. The adverse effect wage rate in California this year is $17.51, well above the $15 minimum wage that farmers must pay workers hired locally.So farmers are also looking elsewhere. “We are living on borrowed time,” said Dave Puglia, president and chief executive of Western Growers, the lobby group for farmers in the West. “I want half the produce harvest mechanized in 10 years. There’s no other solution.”Produce that is hardy or doesn’t need to look pretty is largely harvested mechanically already, from processed tomatoes and wine grapes to mixed salad greens and tree nuts. Sabor Farms has been using machines to harvest salad mix for decades.“Processed food is mostly automated,” said Walt Duflock, who runs Western Growers’ Center for Innovation and Technology in Salinas, a point for tech entrepreneurs to meet farmers. “Now the effort is on the fresh side.”“It scares me that they are coming with H-2As and also with robots,” said José Luis Hernández, who emigrated from Mexico as a teenager.“We used to prune the leaves on the vine with our hands, but they brought in the robots last year,” said Ancelmo Zamudio, a vineyard worker.Apples are being grown on trellises for easy harvesting. Scientists have developed genetically modified “high rise” broccoli with long stems to be harvested mechanically. Pruning and trimming of trees and vines is increasingly automated. Lasers have been brought into fields for weeding. Biodegradable “plant tape” packed with seeds and nutrients can now be germinated in nurseries and transplanted with enormous machines that just unspool the tape into the field.A few rows down from the crew harvesting radish bunches at Sabor Farms’ patch, the Quinlans are running a fancy automatic radish harvester they bought from the Netherlands. Operated by three workers, it plucks individual radishes from the ground and spews them into crates in a truck driving by its side.And yet automation has limits. Harvesting produce that can’t be bruised or butchered by a robot remains a challenge. A survey by the Western Growers Center for Innovation and Technology found that about two-thirds of growers of specialty crops like fresh fruits, vegetables and nuts have invested in automation over the last three years. Still, they expect that only about 20 percent of the lettuce, apple and broccoli harvest — and none of the strawberry harvest — will be automated by 2025.Some crops are unlikely to survive. Acreage devoted to crops like bell peppers, broccoli and fresh tomatoes is declining. And foreign suppliers are picking up much of the slack. Fresh and frozen fruit and vegetable imports almost doubled over the last five years, to $31 billion in 2021.Consider asparagus, a particularly labor-intensive crop. Only 4,000 acres of it were harvested across the state in 2020, down from 37,000 two decades earlier. The state minimum wage of $15, added to the new requirement to pay overtime after 40 hours a week, is squeezing it further after growers in the Mexican state of Sinaloa — where workers make some $330 a month — increased the asparagus acreage almost threefold over 15 years, to 47,000 acres in 2020.H-2A workers won’t help fend off the cheaper Mexican asparagus. They are even more expensive than local workers, about half of whom are immigrants from earlier waves that gained legal status; about a third are undocumented. And capital is not rushing in to automate the crop.“There are no unicorns there,” said Neill Callis, who manages the asparagus packing shed at the Turlock Fruit Company, which grows some 300 acres of asparagus in the San Joaquin Valley east of Salinas. “You can’t seduce a V.C. with the opportunity to solve a $2-per-carton problem for 50 million cartons,” he said.While Turlock has automated where it can, introducing a German machine to sort, trim and bunch spears in the packing shed, the harvest is still done by hand — hunched workers walk up the rows stabbing at the spears with an 18-inch-long knife.These days, Mr. Callis said, Turlock is hanging on to the asparagus crop mainly to ensure its labor supply. Providing jobs during the asparagus harvest from February to May helps the farm hang on to its regular workers — 240 in the field and about 180 in the shed it co-owns with another farm — for the critical summer harvest of 3,500 acres of melons.Workers harvested asparagus by hand on a farm in Firebaugh, Calif.Losing its source of cheap illegal immigrant workers will change California. Other employers heavily reliant on cheap labor — like builders, landscapers, restaurants and hotels — will have to adjust.Paradoxically, the changes raking across California’s fields seem to threaten the undocumented local work force farmers once relied on. Ancelmo Zamudio from Chilapa, in Mexico’s state of Guerrero, and José Luis Hernández from Ejutla in Oaxaca crossed into the United States when they were barely in their teens, over 15 years ago. Now they live in Stockton, working mostly on the vineyards in Lodi and Napa.They were building a life in the United States. They brought their wives with them; had children; hoped that they might be able to legalize their status somehow, perhaps through another shot at immigration reform like the one of 1986.Things to them look decidedly cloudier. “We used to prune the leaves on the vine with our hands, but they brought in the robots last year,” Mr. Zamudio complained. “They said it was because there were no people.”Mr. Hernández grumbles about H-2A workers, who earn more even if they have less experience, and don’t have to pay rent or support a family. He worries about rising rents — pushed higher by new arrivals from the Bay Area. The rule compelling farmers to pay overtime after 40 hours of work per week is costing him money, he complains, because farmers slashed overtime and cut his workweek from six days to five.He worries about the future. “It scares me that they are coming with H-2As and also with robots,” he said. “That’s going to take us down.” More

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    The Fed’s favorite inflation measure rose 4.9% in April in a sign that price increases could be slowing

    The core personal consumption expenditures price index, the Fed’s preferred inflation gauge, rose 4.9% from a year ago in April, in line with estimates and a deceleration from March.
    Personal income rose slightly less than expected, but spending beat estimates as consumers tapped savings.
    Headline PCE rose just 0.2%, a sharp reduction from March’s 0.9% increase.

    The Federal Reserve’s preferred inflation gauge rose 4.9% in April from a year ago, a still-elevated level that nonetheless indicated that price pressures could be easing a bit, the Commerce Department reported Friday.
    That increase in the core personal consumption expenditures price index was in line with expectations and reflected a slowing pace from the 5.2% reported in March. The number excludes volatile food and energy prices that have been a major contributor to inflation running around a 40-year peak.

    The 0.3% increase on a monthly basis was the same as March and in line with Dow Jones estimates. The monthly gain was held back by a decline in energy prices during April that has since reversed.
    Including food and energy, headline PCE increased 6.3% in April from a year ago. That also was a deceleration from the 6.6% pace in the previous month. However, the monthly change showed a more marked pullback, with an increase of just 0.2% compared with the 0.9% surge in March.

    People shop in a supermarket in Washington, DC, on May 26, 2022, as Americans brace for summer sticker shock as inflation continues to grow.
    Nicholas Kamm | AFP | Getty Images

    The data showed that consumers continued to spend but were tapping into their savings to do so.
    “Consumers remained undaunted by inflation last month, strongly increasing spending and changing their mix to more services such as at bars and restaurants, and travel and recreation as the weather warms,” said Robert Frick, corporate economist at Navy Federal Credit Union. “The spending was fueled in part by higher wages, and also by Americans drawing more money out of savings, which is a giant stockpile of at least $2 trillion.”
    Along with the inflation data, the BEA reported that personal income rose 0.4% during the month, a 0.1 percentage point decline from March and a slight miss on the 0.5% estimate. Consumer spending, however, held up, rising a better-than-expected 0.9%, though that was below March’s upwardly revised 1.4%.

    Income after taxes and other charges was flat for the month after falling 0.5% in March.
    Inflation for the past several months has been moving at a pace not seen since the early 1980s. The inability of supply to keep up with demand has pushed prices higher, fed by unprecedented fiscal stimulus during the Covid pandemic, clogged global supply chains and the war in Ukraine that has sent energy prices soaring and led to fears of food shortages.
    While the lower level of inflation generated some relief in the White House, gas will be a factor again when the May numbers come out next month. Prices at the pump have jumped again in May, surging more than 11% from a month ago and 51% from this time last year, according to AAA.
    In a statement, President Joe Biden noted April’s report was “a sign of progress, even as we have more work to do.”
    Responding to the price pressures, the Fed has implemented two interest rate increases totaling 75 basis points and has indicated that a series of hikes are likely ahead until inflation comes closer to the central bank’s 2% goal.
    The PCE numbers reported Friday are lower than the consumer price index used by the Bureau of Labor Statistics. Headline CPI for April rose 8.3% from last year.
    The two numbers differ in that the CPI tracks data from consumers while PCE is extracted from businesses. The Fed considers PCE a broader-based measure of what is happening with prices on a variety of levels.

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    Goldman says signs that inflation is peaking could be positive for stocks

    Traders on the floor of the NYSE, May 27, 2022.
    Source: NYSE

    Signs that inflation is at least starting to abate from a 40-year high could be a positive for stocks, according to Goldman Sachs.
    Markets rallied Friday as a government report showed the pace of inflation slowed a bit in April, primarily due to falling gas prices but also from other factors that at least suggested the run-up was cooling.

    Goldman analysts said history indicates the market will react positively when inflation shows signs of peaking.
    “The market usually falls in the run up to the peak in headline inflation, just as we have seen in recent months,” a team of analysts led by Sharon Bell said in a note. “But after the peaks, there is a little more variance and on average the market does recover.”
    In 13 inflation runs since 1951, the market was higher 12 months later nine times. The biggest gain was a 33.2% increase from the March 1980 top; the worst was a 17.3% decline from the January 2001 peak, a time when the market languished after the dotcom bubble popped.
    “In truth the peak in inflation might be helpful but equities really need other supports, especially if investors fear a sharper downturn,” Goldman’s team wrote.
    Key components needed to boost market momentum include a strong economy, low valuations and falling interest rates.

    All of those issues present a challenge in the current environment.

    The economy contracted at 1.5% annualized rate in the first quarter, stock market valuations have come down significantly but remain just above their 10-year average, and interest rates are on the rise, though bond yields are off their highs.
    October 1990 was positive in all three regards and saw a 29.1% increase in the S&P 500 over the next year, a “very different set-up from the one we have today,” Goldman said.
    Markets also drew encouragement this week from the Federal Reserve. Minutes from the policy meeting earlier this month indicated that officials are willing to reexamine the pace of interest rate hikes later this year, but they also noted the possibility of rates going into a “restrictive” level aimed at slowing the economy.
    The Goldman strategists said the picture for Europe and the U.S. is similar.
    The firm reiterated its positive outlook on European stocks with strong balance sheets, high and stable profit margins and companies that benefit from rising capital expenditures and government investment. Goldman is still cautious on consumer stocks even with the potential for falling inflation.

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    Pakistan Raises Fuel Prices in Effort to Stabilize Economy

    The interim government’s move was seen as a bid to revive a $6 billion bailout from the International Monetary Fund.ISLAMABAD, Pakistan — Pakistan’s government on Friday sharply increased fuel prices for consumers, paving the way to revive a $6 billion bailout package from the International Monetary Fund and stabilize the country’s cratering economy amid deepening political turmoil.The move raising gasoline and diesel prices by about 20 percent — or about 15 cents — a liter staved off concerns that Pakistan, which already faces double-digit inflation, would join a wave of global defaults as the financial shocks from the pandemic, the war in Ukraine and rising interest rates batter many poorer nations.But the decision may cost the new coalition government popular support, analysts say, adding to the political uncertainty that has embroiled the country since Prime Minister Imran Khan was ousted in a no-confidence vote in Parliament early last month.“The price hike signals that the government has decided to bite the bullet and make choices that are necessary, even if they cost near-term political capital,” said Uzair Younus, the director of the Pakistan Initiative at the Atlantic Council. “The hike will ease markets and reduce uncertainty. It will be critical for the government to maintain momentum and continue making decisions that get Pakistan out of the current crisis.”Since his ouster, Mr. Khan has held a series of political rallies, drawing huge crowds and heavily criticizing the current coalition government and the military, blaming them for his removal from office. Some officials now fear that the government’s move to appease the I.M.F. could hand Mr. Khan a wave of public outrage that he could manipulate on the streets.Former Prime Minister Imran Khan, at top center in dark vest, leading an antigovernment rally in Islamabad on Thursday.Aamir Qureshi/Agence France-Presse — Getty ImagesDiscussions between the I.M.F. and the new interim government, led by Shehbaz Sharif, had been deadlocked for weeks over the terms of reviving the bailout, which was announced in 2019 and later suspended after Pakistan’s previous government failed to meet some loan conditions, like cutting energy subsidies.Pakistan has hoped for a release of a roughly $900 million seventh tranche of the $6 billion I.M.F. bailout package. Earlier this week, a fresh round of talks between the I.M.F. and the new Pakistani government in Doha, Qatar, appeared to fail after fund officials declined to accept the Pakistani request to delay the ending of government subsidies.Mr. Sharif had been reluctant to end government energy subsidies and roll back unfunded subsidies to oil and power sectors — a key I.M.F. demand — fearing public backlash that could diminish his party’s chance of success in the next general elections.Those elections are scheduled to be held next year, but the new government has come under mounting public pressure from Mr. Khan’s supporters to hold them earlier.On Thursday, Mr. Khan warned the government to announce the next elections and dissolve Parliament within six days. The warning came just after he led thousands of supporters to the capital Wednesday evening. Angry supporters clashed with the police in the capital and several other Pakistani cities. At least 1,700 protesters were arrested by the police in Punjab, the country’s most populous province.That political pressure has added to the new government’s reluctance to embark on meaningful economic reforms that, while important to stabilize the economy in the years to come, would cause immediate pain to Pakistanis’ wallets, analysts say.The interim government, led by Shehbaz Sharif, center, has been deadlocked in talks with the International Monetary Fund.Saiyna Bashir for The New York TimesLate Thursday night, drivers desperate to fill their tanks before the price increase went into effect after midnight flocked to gas stations across major cities. Many drivers’ incomes have already been squeezed by soaring inflation in recent years that has pushed up the price of basic goods.“There is no rise in our income proportional to the rise in the price of fuel and other essential items,” said Saleem Khan, 44, as he waited to fill his motorcycle’s tank at a gas station in the port city of Karachi.Mr. Khan makes around 18,000 rupees, or about $90, a month working in a restaurant in the city. In previous months, he could send nearly 10,000 rupees every month to his relatives in Bajaur, a tribal district bordering Afghanistan.“This month, it seems I’ll be able to send barely 7,000 rupees to my family,” he said.Nearby, Rasheed Ahmed, a garment factory worker, sat on his motorcycle, worrying how he would pay for basics like food and rent with the fuel price increase.“We thought the ousting of Imran Khan will help the country in decreasing the fuel prices, but the current rulers are crueler than the previous government,” Mr. Ahmed, 34, said.The new coalition government has struggled to find its bearings since coming to power in early April and is in a particularly precarious position. It has no electoral mandate, but was chosen by Parliament to take over after Mr. Khan’s ouster. And it is a tenuous coalition of political parties that previously clashed frequently and only came together around the singular aim of removing Mr. Khan from office. Mr. Sharif’s party also faces internal divisions over policy decisions.A market in Islamabad last month. Many Pakistanis are worried about their ability to afford basic necessities as inflation rises.Saiyna Bashir for The New York TimesMr. Khan’s government, before its removal from office, was also facing increasing public discontent over rising inflation. Mr. Khan claims that the economy was improving under his government, but in order to soothe the public’s flaring tempers, he announced he was cutting petroleum and energy prices — a move that eased public discontent but added to the country’s fiscal deficit.Understand the Political and Economic Turmoil in PakistanCard 1 of 5A chaotic time. More

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    Inflation moderated in April but was still close to its highest level in 40 years.

    An important measure of consumer prices showed that inflation slowed in April, but remained close to a four-decade high.The Personal Consumption Expenditures price index rose 0.2 percent last month from March and was up 6.3 percent from a year earlier, the Commerce Department said Friday. That is down from a 6.6 percent annual increase in March, which represented the fastest pace of inflation since 1982.Economists and investors closely watch the index, an alternative to the better-known Consumer Price Index, because the Federal Reserve prefers it as a measure of inflation. The central bank has been raising interest rates and announced that it will begin paring asset purchases in a bid to cool the economy and tame inflation.The slowdown in inflation in April was largely the result of a drop in the price of gasoline and other energy sources. Gas prices soared in February and March largely because of Russia’s invasion of Ukraine, then moderated somewhat in April. They have risen again in recent weeks, however, which could push measures of inflation back up in May. Food prices have also been rising quickly in recent months, a pattern that continued in April.Stripping out the volatile food and fuel categories, consumer prices were up 4.9 percent in April from a year earlier. That core measure, which some economists view as a more reliable guide to the underlying rate of inflation, was up 0.3 percent from a month earlier, little changed from the rate of increase in March.The comparatively tame increase in core prices in the data released Friday stood in contrast to the sharp acceleration in the equivalent measure in the Consumer Price Index report released by the Labor Department this month. The divergence was mostly the result of differences in the way the two measures count airline fares, however, and economists said the Fed was unlikely to take much comfort from the Commerce Department data.“My suspicion is they will probably look through the slowdown,” said Omair Sharif, the founder of the research firm Inflation Insights. He noted that the core index also slowed last fall, only to pick up again at the end of the year, catching the Fed off guard.Many forecasters believe that the headline inflation rate peaked in March and that April marked the beginning of a gradual cool-down. But the recent rebound in gas prices is threatening to complicate that picture. And even if inflation continues to ebb, prices are still rising far more quickly than the Fed’s target of 2 percent over time.“For the past year, inflation has been high and rising and we’re at a point now where it’s high and falling,” said Tim Quinlan, a senior economist at Wells Fargo.The public, Mr. Quinlan added, is unlikely to see the slight moderation in inflation as much to celebrate.“To them, the year over year growth in prices doesn’t matter,” he said. “It’s why does a crappy lunch cost $12 now?” More

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    First-quarter GDP declined 1.5%, worse than thought; jobless claims edge lower

    First-quarter GDP declined at a 1.5% annual pace, worse than the 1.3% Dow Jones estimate and a write-down from the initially reported 1.4%.
    The pullback in gross domestic product represented the worst quarter since the pandemic-scarred Q2 of 2020.
    Initial jobless claims totaled 210,000, a decline of 8,000 from the previous week.

    A ‘We’re Hiring!’ sign is posted at a Starbucks in Los Angeles, California.
    Mario Tama | Getty Images

    The U.S. economic contraction to start the year was worse than expected as weak business and private investment failed to offset strong consumer spending, the Commerce Department reported Thursday.
    First-quarter gross domestic product declined at a 1.5% annual pace, according to the second estimate from the Bureau of Economic Analysis. That was worse than the 1.3% Dow Jones estimate and a write-down from the initially reported 1.4%.

    Downward revisions for both private inventory and residential investment offset an upward change in consumer spending. A swelling trade deficit also subtracted from the GDP total.
    The pullback in GDP represented the worst quarter since the pandemic-scarred Q2 of 2020 in which the U.S. fell into a recession spurred by a government-imposed economic shutdown to battle Covid-19. GDP plummeted 31.2% in that quarter.
    Economists largely expect the U.S. to rebound in the second quarter as some of the factors holding back growth early in the year subside. A surge in the omicron variant slowed activity, and the Russian attack on Ukraine aggravated supply chain issues that had contributed to a 40-year high in inflation.
    CNBC’s Rapid Update survey shows a median expectation of 3.3% growth in the second quarter; the Atlanta Fed’s GDPNow tracker also points to a rebound, but at a more subdued 1.8% pace.
    “This year will be mixed. Declines should not be repeated, but growth will not match what has been seen since the economy began reopening,” said Scott Hoyt, senior director at Moody’s Analytics. “With the Federal Reserve seemingly totally focused on bringing inflation back down, recession risks are uncomfortably high, although perhaps more for next year than this.”

    One factor helping to propel growth is a resilient consumer fighting through inflation that accelerated 8.3% from a year ago in April.
    Consumer spending as gauged by personal consumption expenditures increased 3.1%, better than the first estimate of 2.7%. That has come as the labor market has continued to be strong and wages are increasing rapidly, though still below the pace of inflation.
    Initial jobless claims for the week ended May 21 totaled 210,000, a decrease from the previous 218,000, the Labor Department reported.
    Continuing claims, after holding around their lowest level since 1969, edged higher for the week for the week ended May 14 to nearly 1.35 million.
    Correction: An earlier version listed an incorrect figure for weekly jobless claims.

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    Fed minutes point to more rate hikes that go further than the market anticipates

    Fed minutes released Wednesday indicated that officials are prepared to move ahead with multiple 50 basis points interest rate increases.
    In addition, the Federal Open Market Committee said policy may have to move past “neutral” and into “restrictive” territory.
    The minutes indicate that members are hopeful they can bring down inflation, but also concerned about financial stability risks.

    Federal Reserve officials earlier this month stressed the need to raise interest rates quickly and possibly more than markets anticipate to tackle a burgeoning inflation problem, minutes from their meeting released Wednesday showed.
    Not only did policymakers see the need to increase benchmark borrowing rates by 50 points, but they also said similar hikes likely would be necessary at the next several meetings 

    They further noted that policy may have to move past a “neutral” stance in which it is neither supportive nor restrictive of growth, an important consideration for central bankers that could echo through the economy.
    “Most participants judged that 50 basis point increases in the target range would likely be appropriate at the next couple of meetings,” the minutes said. In addition, Federal Open Market Committee members indicated that “a restrictive stance of policy may well become appropriate depending on the evolving economic outlook and the risks to the outlook.”
    The May 3-4 session saw the rate-setting FOMC approve a half percentage point hike and lay out a plan, starting in June, to reduce the central bank’s $9 trillion balance sheet consisting mostly of Treasurys and mortgage-backed securities.
    That was the biggest rate increase in 22 years and came as the Fed is trying to pull down inflation running at a 40-year high.

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    Market pricing currently sees the Fed moving to a policy rate around 2.5%-2.75% by the end of the year, which would be consistent with where many central bankers view a neutral rate. Statements in the minutes, though, indicate that the committee is prepared to go beyond there.

    “All participants reaffirmed their strong commitment and determination to take the measures necessary to restore price stability,” the meeting summary stated.
    “To this end, participants agreed that the Committee should expeditiously move the stance of monetary policy toward a neutral posture, through both increases in the target range for the federal funds rate and reductions in the size of the Federal Reserve’s balance sheet,” it continued.
    On the balance sheet issue, the plan will be to allow a capped level of proceeds to roll off each month, a number that will reach $95 billion by August, including $60 billion Treasurys and $35 billion for mortgages. The minutes further indicate that an outright sale of mortgage-backed securities is possible, with notice of that happening well in advance.
    The minutes mentioned inflation 60 times, with members expressing concern about rising prices even amid confidence that Fed policy and the easing of several contributing factors, such as supply chain problems, combined with tighter monetary policy would help the situation. On the other hand, officials noted that the war in Ukraine and the Covid-associated lockdowns in China would exacerbate inflation.
    At his post-meeting news conference, Fed Chairman Jerome Powell took the unusual step of addressing the American public directly to stress the central bank’s commitment to taming inflation. Last week, Powell said in a Wall Street Journal interview that it would take “clear and convincing evidence” that inflation was coming down to the Fed’s 2% target before the rate increases would stop.
    Along with their resolve to bring down inflation came concerns about financial stability.
    Officials expressed concern that tighter policy could cause instability in both the Treasury and commodities market. Specifically, the minutes cautioned about “the trading and risk-management practices of some key participants in commodities markets [that] were not fully visible to regulatory authorities.”
    Risk management issues “could give rise to significant liquidity demands for large banks, broker-dealers, and their clients.”
    Still, officials remained committed to raising rates and reducing the balance sheet. The minutes stated that doing so would leave the Fed “well positioned later this year” to reevaluate the effect policy was having on inflation.

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    E. Gerald Corrigan, Who Helped Ease ’87 Stock Crash, Dies at 80

    As president of the Federal Reserve Bank of New York, he favored flooding the financial system with cash to restore confidence among investors.E. Gerald Corrigan, who as the aggressive president of the New York Federal Reserve Bank helped cushion Wall Street’s crash in the late 1980s, died on May 17 in a memory-care center in Dedham, Mass. He was 80.The cause was complications of Alzheimer’s disease, his daughter Elizabeth Corrigan said.As president of the Federal Reserve Bank in Minneapolis from 1980 to 1984 and then of the New York Fed from 1985 to 1993, Mr. Corrigan used his prerogatives as a regulator to help resolve national and global financial crises, and to remedy some of the causes of episodic market instability.“He played a crucial role providing the psychological reassurance for a few critical days after the stock market crash,” Paul A. Volcker, the former Federal Reserve Board chairman, said when Mr. Corrigan retired from the Fed in 1993, referring to his actions after the Dow Jones industrial average dropped more than 22 percent in a single day in October 1987.In that upheaval, Mr. Corrigan urged the Fed chairman, Alan Greenspan, to reassure the markets that the Federal Reserve would pump whatever money was necessary into the financial system to reduce volatility. He also played vital roles in other crises: He helped the Fed to address the collapse of the investment bank Drexel Burnham Lambert in 1989 and of Salomon Brothers in 1991, and to deal with rising inflation, emerging market debt and the need to regulate worldwide credit risk.After Mr. Corrigan retired from the Fed, he joined Goldman Sachs, where he became managing director in 1996 and later chairman of the firm’s international advisers, co-chairman of its business standards committee and the first nonexecutive chairman of its commercial bank, now known as Goldman Sachs Bank. He retired from Goldman in 2016.Edward Gerald Corrigan, known as Jerry, was born on June 13, 1941, in Waterbury, Conn. His father, Edward, was a restaurant manager. His mother, Mary (Hardy) Corrigan, was a librarian.He earned a Bachelor of Social Science degree in economics from Fairfield University in Connecticut in 1963. At Fordham University in New York, he received a master’s degree in economics in 1965 and a doctorate in the same subject in 1971. (Years later, he donated $5 million to each university to establish professorships.)After teaching for a year at Fordham, he joined the Federal Reserve Bank of New York as a researcher in 1968 while still working on his doctorate. When Mr. Volcker, the New York Fed’s president, became chairman of the Federal Reserve Board in 1979, he recruited Mr. Corrigan as a special assistant.During his tenure at the Fed, Mr. Corrigan was named chairman of the Basel Committee on Banking Supervision by the governors of the world’s central banks, a position he held from 1991 to 1993. He also served as vice chairman of the Federal Open Market Committee from 1984 to 1993. In 1992 he was named a co-chairman of the Russian-American Bankers Forum, which helped the former Soviet Union develop a market-driven banking and financial system.In addition to his daughter Elizabeth, Mr. Corrigan is survived by another daughter, Karen Corrigan Tate, from his marriage to Linda Barlow, which ended in divorce; his wife, Cathy Minehan, who was president of the Federal Reserve Bank of Boston from 1994 to 2007; his stepchildren, Melissa Minehan Walters and Brian Minehan; a sister, Patricia Carlascio; and five grandchildren.Mr. Corrigan’s romance with Ms. Minehan raised questions of a possible conflict of interest when she was at the Fed and he was at Goldman Sachs in the mid-1990s, but he said at the time that they had consulted lawyers to prevent leaks of sensitive information that might benefit his company.During his stewardship, the Fed was criticized for failing to curb abuses by the scandal-scarred Bank of Credit and Commerce International. But Mr. Corrigan said when he retired that “if it wasn’t for the Fed, there is a pretty good chance that B.C.C.I. would still be in business.”In his remarks in 1993, Mr. Volcker said Mr. Corrigan had “a good conceptual understanding of the financial world, but most importantly he knows how to get things done.”“That’s a rare quality in the bureaucratic world in which he has grown up,” Mr. Volcker added.When the market crashed in 1987, for example, Fed officials planned to deliver a turgid technical response.“I said that’s the last damn thing we need,” Mr. Corrigan was quoted as saying in Sebastian Mallaby’s “The Man Who Knew: The Life and Times of Alan Greenspan” (2016). “What we need is a statement that has about 10 words in it.”Mr. Greenspan took Mr. Corrigan’s advice, saying (in 30 words) that the Fed would make available whatever money was needed while Mr. Corrigan importuned major banks to continue lending to undergird the markets.When Mr. Corrigan retired from the Fed, he said he would take a job in private industry where “I’ll try to limit myself to working six days a week, instead of seven.” The aftermath of the market crash in 1987, he said, had been his most memorable moment.“In terms of my pulse rate,” he said, “that one takes the prize.”Mr. Corrigan at a meeting of a European Union committee in Brussels in 2010 to discuss the Greek economy. 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