Evelyn Reynolds

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 5.40% from 5.33%.
Applications for a mortgage to purchase a home fell 7% for the week and were 21% lower than the same week one year ago.
Refinance demand dropped 6% for the week and was down 75% year over year.

Mortgage rates are back on the upswing, after a brief decline in May, and the housing market is still suffering from a lack of listings. As a result, mortgage demand continues to drop.
Total mortgage application volume fell 6.5% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Demand hit the lowest level in 22 years.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($647,200 or less) increased to 5.40% from 5.33%, with points rising to 0.60 from 0.51 (including the origination fee) for loans with a 20% down payment.
Refinance demand, which is most sensitive to weekly rate moves, fell another 6% for the week and was 75% lower than the same week one year ago. The vast majority of mortgage holders now have rates considerably lower than the current one, and even those who would like to pull cash out of their homes are choosing second mortgages, rather than refinancing their first liens.

Real estate agents Rosa Arrigo, center, and Elisa Rosen, right, work an open house in West Hempstead, New York.
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“While rates were still lower than they were four weeks ago, they remained high enough to still suppress refinance activity. Only government refinances saw a slight increase last week,” said Joel Kan, an MBA economist.
Applications for a mortgage to purchase a home fell 7% for the week and were 21% lower than the same week one year ago.
“The purchase market has suffered from persistently low housing inventory and the jump in mortgage rates over the past two months. These worsening affordability challenges have been particularly hard on prospective first-time buyers,” Kan said.

Mortgage rates moved even higher to start this week, according to a separate survey by Mortgage News Daily. Rates have been in a narrow range for several weeks after moving decidedly higher in the previous months.
“There’s some chance that the upper boundaries of that range end up being a ceiling for rates, but that will depend on inflation and other incoming economic data,” wrote Matthew Graham, chief operating officer at Mortgage News Daily. “With a key inflation report set to release on Friday morning, the potential for volatility remains high.”

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Inflation is upending voter confidence and posing a glaring political liability that looms over the Biden administration’s major policy decisions.WASHINGTON — President Biden was at a private meeting discussing student debt forgiveness this year when, as happens uncomfortably often these days, the conversation came back to inflation.“He said with everything he does, Republicans are going to attack him and use the word ‘inflation,’” said Representative Tony Cárdenas, Democrat of California, referring to Mr. Biden’s meeting with the Congressional Hispanic Caucus in April. Mr. Cárdenas said Mr. Biden was aware he would be attacked over rising prices “no matter what issue we’re talking about.”The comment underscored how today’s rapid price increases, the fastest since the 1980s, pose a glaring political liability that looms over every major policy decision the White House makes — leaving Mr. Biden and his colleagues on the defensive as officials discover that there is no good way to talk to voters about inflation.The administration has at times splintered internally over how to discuss price increases and has revised its inflation-related message several times as talking points fail to resonate and new data comes in. Some Democrats in Congress have urged the White House to strike a different — and more proactive — tone ahead of the November midterm elections.But the reality the White House faces is a hard one: There is little politicians can do to quickly bring price increases to heel. Federal Reserve policy is the nation’s main solution to inflation, but the central bank tempers price gains by making money more expensive to borrow to cool off demand, a slow and potentially painful process for the economy.“For a president, inflation is the problem from hell — you can’t win,” said Elaine Kamarck, a senior fellow at the Brookings Institution and the founding director of the Center for Effective Public Management. “Because it’s so difficult economically, politically it is even worse: There’s nothing you can do in the short run to solve it.”Consumer prices increased by 8.3 percent in the year through April, and data this week is expected to show inflation at 8.2 percent in May. Inflation averaged 1.6 percent annual gains in the five years leading up to the pandemic, making today’s pace of increase painfully high by comparison. A gallon of gas, one of the most tangible household costs, hit an average of $4.92 this week. Consumer confidence has plummeted as families pay more for everyday purchases and as the Fed raises interest rates to cool the economy, which increases the risk of a recession.A gallon of gas surpassed $5 at a Sunoco station in Sloatsburg, N.Y., last month.An Rong Xu for The New York TimesThe White House has long realized that rising prices could sink Mr. Biden’s support, with that risk telegraphed in a series of confidential memos sent to Mr. Biden last year by one of his lead pollsters, John Anzalone. Inflation has only continued to fuel frustration among voters, according to a separate memo compiled by Mr. Anzalone’s team last month, which showed the president’s low approval rating on the economy rivaling only his approach to immigration.“Economic sentiment among the public remains poor, with most worried about both inflation and the possibility of a recession in the coming months,” according to the memo, dated May 20. The information was sent to “interested parties,” and it was not clear if the White House had received or reviewed the memo.The polling data shows that about eight in 10 Americans “consider the national economy to be in poor condition” and that “concerns are high about the potential for an economic recession in the near future.”Economic anxieties have been echoed by members of Congress, leading academics and pop culture standard bearers. “When y’all think they going to announce that we going into a recession?” Cardi B, the Grammy-winning rapper, wrote in a tweet that went viral this weekend.The White House knows it is in a tricky position, and the administration’s approach to explaining inflation has evolved over time. Officials spent the early stages of the current price burst largely describing price pressures as temporary.When it became clear that rising costs were lasting, administration officials began to diverge internally on how to frame that phenomenon. While it was clear that much of the upward pressure on prices came from supply chain shortages exacerbated by continued waves of the coronavirus, some of it also tied back to strong consumer demand. That big spending had been enabled, in part, by the government’s stimulus packages, including direct checks to households, expanded unemployment insurance and other benefits.Some economists in the White House have begun to emphasize that inflation was a trade-off: To the extent that Mr. Biden’s stimulus spending spurred more inflation, it also aided economic growth and a faster recovery.“Inflation is absolutely a problem, and it’s critical to address it,” Janet L. Yellen, the Treasury secretary, recently told members of Congress. “But I think at the same time, we should recognize how successful that plan was in leading to an economy where instead of having a large number of workers utterly unable to find jobs, exactly the opposite is true.”Treasury Secretary Janet Yellen has said she supports relaxing tariffs on Chinese goods to ease prices.Jason Andrew for The New York TimesBut the president’s more political aides have tended to sharply minimize that the March 2021 package, known as the American Rescue Plan, helped to goose inflation, even as they have claimed credit for strong economic growth.“Some have a curious obsession with exaggerating impact of the Rescue Plan while ignoring the degree high inflation is global,” Gene Sperling, a senior White House adviser overseeing the implementation of the stimulus package, wrote on Twitter last week, adding that the law “has had very marginal impact on inflation.”Brian Deese, the director of the National Economic Council, acknowledged in an interview last week that there were some disagreements among White House economic officials when it came to how to talk about and respond to inflation, but he portrayed that as a positive — and as something that is not leading to any kind of dysfunction.“If there wasn’t healthy disagreement, debate and people feeling comfortable bringing issues and ideas to the table, then I think we would be not serving the president and the public interest well,” he said.He also pushed back on the idea that the administration was deeply divided on the March 2021 package’s aftereffects, saying in a separate emailed comment that “there is agreement across the administration that many factors contributed to inflation, and that inflation has been driven by elevated demand and constrained supply across the globe.”How to portray the Biden administration’s stimulus spending is far from the only challenge the White House faces. As price increases last, Democrats have grappled with how to discuss their plans to combat them.The president and his top political aides have trotted out a few main talking points, including blaming President Vladimir V. Putin’s invasion of Ukraine for what Mr. Biden calls the “Putin price hike,” pointing to deficit reduction as a way to lower inflation and arguing that Republicans have a bad plan to deal with rising costs. Mr. Biden regularly acknowledges the pain that higher prices are causing and has emphasized that the problem of taming inflation rests largely with the Fed, an independent entity whose work he has promised not to interfere with.The administration has also highlighted that inflation is widespread globally, and that the United States is better off than many other nations.Student Loans: Key Things to KnowCard 1 of 4Corinthian Colleges. More

The workers, at a store in western Massachusetts, cited health and safety concerns and cuts to benefits at the grocery chain.In a sign that service industry workers continue to have a strong interest in unionizing after successful votes at Starbucks, REI and Amazon, employees at a Trader Joe’s in western Massachusetts have filed for a union election. If they win, they will create the only union at Trader Joe’s, which has more than 500 locations and 50,000 employees nationwide.The filing with the National Labor Relations Board late Tuesday seeks an election involving about 85 employees who would form an independent union, Trader Joe’s United, rather than affiliate with an established labor organization. That echoes the independent union created by Amazon workers on Staten Island and the worker-led organizing at Starbucks.“Over the past however many years, changes have been happening without our consent,” said Maeg Yosef, an 18-year employee of the store who is a leader of the union campaign. “We wanted to be in charge of the whole process, to be our own union. So we decided to go independent.”Ms. Yosef said the union had support from over 50 percent of workers at the store, known as crew members.“We have always said we welcome a fair vote and are prepared to hold a vote if more than 30 percent of the crew wants one,” said a company spokeswoman, Nakia Rohde, alluding to the N.L.R.B. threshold for an election. “We are not interested in delaying the process in any way.”The company shared a similar statement with workers after they announced their intention to unionize in mid-May.In explaining their decision, Ms. Yosef and four colleagues, all of whom have been with the company for at least eight years, cited changes that had made their benefits less generous over time, as well as health and safety concerns, many of which were magnified during the pandemic.“This is probably where we get to all of these things coming together,” said Tony Falco, another worker involved in the union campaign, alluding to Covid-19.Mr. Falco said the store, in Hadley, took several reassuring steps during the first 12 to 15 months of the pandemic. Management enforced masking requirements and restrictions on the number of customers who could be in the store at once. It allowed workers to take leaves of absence while continuing to receive health insurance and gave workers additional “thank you” pay as high as $4 per hour.But Mr. Falco and others said the company was too quick to roll back many of these measures — including additional pay — as vaccines became widely available last year, and noted that the store had suffered Covid outbreaks in the past several weeks after masking became laxer. The store followed the policy of the local health board, which altered its mask mandate at various points, lifting it most recently in March.Some employees were also upset that the company did not inform them that the state had passed a law requiring employers to provide up to five paid days off for workers who missed work because of Covid.“It was in effect seven months, and they never announced it,” Ms. Yosef said. “I figured that out at the end of December, early January.”Ms. Rohde, the spokeswoman, said this account was incorrect, but four other employees who support the union also said the company had not told them of the policy.A Trader Joe’s store in New York. Early in the pandemic, the chief executive wrote that union advocates “clearly believe that now is a moment when they can create some sort of wedge in our company.”Benjamin Norman for The New York TimesTrader Joe’s has generally resisted unionization over the years, including earlier in the pandemic. In March 2020, the chief executive, Dan Bane, sent employees a letter referring to “the current barrage of union activity that has been directed at Trader Joe’s” and complaining that union advocates “clearly believe that now is a moment when they can create some sort of wedge in our company through which they can drive discontent.”The company’s response to the current campaign appears somewhat less hostile, though union organizers have recently filed charges of unfair labor practices, such as asking employees to remove pro-union pins.Several employees said a broader issue was underlying their frustrations: what they saw as the company’s evolution from a niche outlet known for pampering customers and treating employees generously to an industrial-scale chain that is more focused on the bottom line.The company’s employee handbook urges workers to provide a “Wow customer experience,” which it defines as “the feelings a customer gets about our delight that they are shopping with us.” But longtime employees say the company, which is privately held, has gradually become stingier with workers.For years, the company offered health care widely to part-timers. In the early 2010s, the company raised the average weekly hours that employees needed to qualify for full health coverage to 30 from roughly 20, informing those who no longer qualified that they could receive coverage under the federal Affordable Care Act instead. (The company dropped the threshold to 28 hours more recently.)“It was done under the guise of ‘You can get these plans, they’re the same plans,’ but they were not the same plans,” said Sarah Yosef, the Hadley store’s manager at the time, who later stepped back from the role and is now a frontline worker there.“I had to sit there individually with crew members saying you’re going to be losing health insurance,” added Ms. Yosef, who is married to Maeg Yosef.Retirement benefits have followed a similar trajectory: Around the same time, Trader Joe’s lowered its retirement contribution to 10 percent of an employee’s earnings from about 15 percent, for employees 30 and older. Beginning with last year’s benefit, the company lowered the percentage again for many workers, who saw the contribution fall to 5 percent. The company is no longer specifying any set amount.Tony Falco and Sarah Yosef at the Trader Joe’s store in Hadley. She said, “I had to sit there individually with crew members saying you’re going to be losing health insurance.”Holly Lynton for The New York TimesMs. Rohde, the spokeswoman, said the change was partly a response to indications from many workers that they would prefer a bonus to a retirement contribution.Workers said the company’s determination to provide an intimate shopping experience had often come at their expense amid a rapid increase in business over the past decade, and then again with the resurgence of business as pandemic restrictions lifted.For example, Trader Joe’s doesn’t have conveyor belts at checkout lines and instructs cashiers to reach into customers’ carts or baskets to unload items. This can appear to personalize the service but takes a physical toll on workers, who typically bend over hundreds of times during a shift.(The company asks workers to perform different tasks throughout the day so they are not constantly ringing up customers.)Maeg Yosef and her co-workers began discussing the union campaign over the winter, angry over the store’s failure to publicize the state-mandated paid leave benefit and the change in retirement benefits, and some have drawn inspiration from the successful union elections at Starbucks, Amazon and REI.Their union campaign may also benefit from the same leverage that workers at those companies enjoyed as a result of the relatively tight job market.“People just keep leaving — I know they want to hire people now,” Maeg Yosef said. “It’s hard to keep people around.” More

The Atlanta Federal Reserve’s GDPNow tracker is now pointing to an annualized gain of just 0.9% for the second quarter, down from an estimated 1.3% increase less than a week ago.
With first-quarter growth down 1.5%, a second consecutive quarter of negative growth meets a rule-of-thumb definition for recession.
The National Bureau of Economic Research, the official arbiter, says a recession can include two straight negative GDP prints, but that’s not necessarily the case.

Federal Reserve Chairman Jerome Powell testifies during the House Financial Services Committee hearing titled Monetary Policy and the State of the Economy, in Rayburn Building on Wednesday, March 2, 2022.
Tom Williams | CQ-roll Call, Inc. | Getty Images

A widely followed Federal Reserve gauge is indicating that the U.S. economy could be headed for a second consecutive quarter of negative growth, meeting a rule-of-thumb definition for a recession.
In an update posted Tuesday, the Atlanta Fed’s GDPNow tracker is now pointing to an annualized gain of just 0.9% for the second quarter.

Following a 1.5% drop in the first three months of the year, the indicator is showing the economy doesn’t have much further to go before it slides into what many consider a recession.
GDPNow follows economic data in real time and uses it to project the way the economy is heading. Tuesday’s data, combined with other recent releases, resulted in the model downgrading what had been an estimate of 1.3% growth as of June 1 to the new outlook for a 0.9% gain.

Personal consumption expenditures, a measure of consumer spending that is responsible for nearly 70% of gross domestic product, saw a cut to a 3.7% gain from a previous 4.4% estimate. Also, real gross private domestic investment now is expected to shave 8.5% off growth, from the previous 8.3%.
At the same time, an improvement to the trade outlook resulted in a mild boost to the estimate.
The U.S. trade deficit with its global partners fell to $87.1 billion in April — still a large number by historical standards but down more than $20 billion from March’s record. On net, trade is expected to subtract 0.13 percentage point from GDP in the second quarter, from a previous estimate of -0.25 percentage point, according to the Atlanta Fed.

Talk of recession has accelerated this year amid surging inflation that has put a damper on corporate profit outlooks. Many on Wall Street are still expecting the combination of resilience in consumer spending and job growth to the keep the U.S. out of recession.

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“Right now, it looks like any talk of a recession is a 2023 story. It’s not this year,” said Joseph Brusuelas, chief economist at consulting firm RSM. “We would need to see future shocks to the business cycle. My sense is the economy is going to slow, but only really back to its long-term trend growth rate of 1.8%.”
To be sure, while the notion of two consecutive negative GDP quarters is often considered a recession, that’s not necessarily true.
The National Bureau of Economic Research, the official arbiter of recessions, says that rule of thumb often holds true but not always. For instance, the recession of 2020 saw just one quarter of negative growth.
Instead, the NBER defines a recession as “a significant decline in economic activity that is spread across the economy and that lasts more than a few months.”
“Most of the recessions identified by our procedures do consist of two or more consecutive quarters of declining real GDP, but not all of them,” the NBER says on its site. “There are several reasons. First, we do not identify economic activity solely with real GDP, but consider a range of indicators. Second, we consider the depth of the decline in economic activity.”
However, there has never been a period with consecutive negative-growth quarters that did not entail a recession, according to data going back to 1947.
One major source of inflation fears is the Federal Reserve, which is on a rate-hiking cycle in an effort to quell runaway inflation. Chair Jerome Powell said last month he sees “a good chance to have a soft or softish landing,” even with policy tightening.
“It’s not going to be easy. And it may well depend, of course, on events that are not under our control. But our job is to use our tools to try to achieve that outcome, and that’s what we’re going to do,” Powell said.
Earlier Tuesday, Treasury Secretary Janet Yellen told a Senate panel that “bringing inflation down should be our No. 1 priority” and noted that attempts to bring down the cost of living are coming “from a position of strength” in the economy.

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WASHINGTON — At her confirmation hearing in early 2021, Treasury Secretary Janet L. Yellen told lawmakers that it was time to “act big” on a pandemic relief package, playing down concerns about deficits at a time of perpetually low interest rates and warning that inaction could mean widespread economic “scarring.”A year and a half later, prices are soaring and interest rates are marching higher. As a result, Ms. Yellen’s role in crafting and selling the $1.9 trillion American Rescue Plan, which Congress passed in March of last year, is being parsed amid an intensifying blame game to determine who is responsible for the highest rates of inflation in 40 years. After months of pinning rising prices on temporary supply chain problems that would dissipate, Ms. Yellen acknowledged last week that she had gotten it “wrong,” putting the Biden administration on the defensive and thrusting herself into the middle of a political storm.“I think I was wrong then about the path that inflation would take,” Ms. Yellen said in an interview with CNN, adding that the economy had faced unanticipated “shocks” that boosted food and energy prices.Republican lawmakers, who have spent months blaming President Biden and Democrats for rising prices, gleefully seized upon the admission as evidence that the administration had mismanaged the economy and should not be trusted to remain in political control.The Treasury Department has scrambled to clarify Ms. Yellen’s remarks, saying her acknowledgment that she misread inflation simply meant that she could not have foreseen developments such as the war in Ukraine, new variants of the coronavirus or lockdowns in China. After a book excerpt suggested Ms. Yellen favored a stimulus package smaller than the $1.9 trillion that Congress approved last year, the Treasury released a statement denying that she had urged more spending restraint.At this tenuous moment in her tenure, Ms. Yellen is expected to face tough questions on inflation when she testifies before the Senate Finance Committee on Tuesday and the House Ways and Means Committee on Wednesday. The hearings are ostensibly about the president’s budget request for the 2023 fiscal year, but Republicans are blaming Mr. Biden’s policies, including the $1.9 trillion stimulus package, for high prices for consumer products, and Ms. Yellen’s comments have given them grist to cast his first term as a failure.“How can Americans trust the Biden administration when the same people that were so wrong are still in charge?” said Tommy Pigott, rapid response director for the Republican National Committee.Understand Inflation and How It Impacts YouInflation 101: What is inflation, why is it up and whom does it hurt? Our guide explains it all.Measuring Inflation: Over the years economists have tweaked one of the government’s standard measures of inflation, the Consumer Price Index. What is behind the changes?Inflation Calculator: How you experience inflation can vary greatly depending on your spending habits. Answer these seven questions to estimate your personal inflation rate.Interest Rates: As it seeks to curb inflation, the Federal Reserve began raising interest rates for the first time since 2018. Here is what that means for inflation.The glare is particularly uncomfortable for Ms. Yellen, an economist and former chair of the Federal Reserve, who prides herself on giving straight answers and staying above the political fray.In recent weeks, Ms. Yellen has had to defend the Biden administration’s economic policies even as fault lines have emerged within the economic team. She has expressed reservations about the lack of progress in rolling back some of the Trump administration’s China tariffs, which she views as taxes on consumers that were “not strategic,” and she has been reluctant to support student debt forgiveness proposals, which could further fuel inflation if people have more money to spend.Over the weekend, Ms. Yellen came under fire again after an excerpt from a forthcoming biography of her indicated that she had sought unsuccessfully to pare down the pandemic aid bill because of inflation concerns. The Treasury Department released a rare Saturday statement from Ms. Yellen denying that she argued that the package was too big.“I never urged adoption of a smaller American Rescue Plan package,” she said, insisting that the funds have helped the United States economy weather the pandemic and the fallout from Russia’s war in Ukraine.Throughout the last year, Ms. Yellen has been an ardent public defender of the Biden administration’s economic agenda. She has clashed publicly at times with critics such as Lawrence H. Summers, a former Treasury secretary, who warned that too much stimulus could overheat the economy.For months, Ms. Yellen — and many other economists — talked about inflation as “transitory,” saying rising prices were the result of supply chain problems that would dissipate and “base effects,” which were making the monthly numbers look worse in comparison with prices that were depressed during the early days of the pandemic.By May of last year, Ms. Yellen appeared to acknowledge that the Biden administration’s spending proposals had the potential to overheat the economy. She noted at The Atlantic’s Future Economy Summit that the policies could spur growth and that the Fed might have to step in with “modest” interest rate increases if the economy revved up too much.“It may be that interest rates will have to rise somewhat to make sure that our economy doesn’t overheat, even though the additional spending is relatively small relative to the size of the economy,” Ms. Yellen said.But economic indicators still suggested that inflation remained under control through much of that spring. In an interview with The New York Times last June, Ms. Yellen said she believed that inflation expectations were in line with the Federal Reserve’s 2 percent target and that while wages were increasing, she did not see a “wage price spiral” on the horizon that could cause inflation to become entrenched.“We don’t want a situation of prolonged excess demand in the economy that leads to wage and price pressures that build and become endemic,” she said, adding that she did not see that happening.Inflation F.A.Q.Card 1 of 5What is inflation? More

WASHINGTON — The Biden administration on Monday announced a two-year pause on imposing any new tariffs on the solar industry, a decision that follows an outcry from importers who have complained the levies are threatening broader adoption of solar energy in the United States.The move is a victory for domestic solar installers, who said the tariffs would put at risk the Biden administration’s goal of significantly cutting carbon emissions by the end of the decade by reducing the flow of products into the United States. But it goes against the wishes of some American solar manufacturers and their defenders, who have been pushing the administration to erect tougher barriers on cheap imports to help revive the domestic industry.It was the latest example of President Biden’s being caught between competing impulses when it comes to trying to steer the United States away from planet-warming fossil fuels, as he has pledged to do. By limiting tariffs, Mr. Biden will ensure a sufficient and cheap supply of solar panels at a time of high inflation and attempt to put stalled solar projects back on track. But the decision will postpone other White House efforts that might have punished Chinese companies for trade violations and lessened Beijing’s role in global supply chains.To counteract complaints by the domestic solar industry, the administration said that Mr. Biden would attempt to speed U.S. manufacturing of solar components, including by invoking the authorities of the Defense Production Act, which gives the president expanded powers and funding to direct the activities of private businesses.The prospect of additional tariffs stemmed from an ongoing investigation by the Commerce Department, which is looking into whether Chinese solar firms — which are already subject to tariffs — tried to get around those levies by moving their operations out of China and into Southeast Asia.Auxin Solar, a small manufacturer of solar panels based in California, had requested the inquiry, which is examining imports from Vietnam, Malaysia, Thailand and Cambodia.In 2020, 89 percent of the solar modules used in the United States were imported, with Southeast Asian countries accounting for the bulk of the shipments.If the Commerce Department determines that the factories were set up to circumvent U.S. tariffs, the administration could retroactively impose tariffs on shipments to the United States. But under the tariff “pause” that Mr. Biden ordered on Monday, such levies could not be imposed for the next two years.The decision is the latest turn in a long game of whack-a-mole the U.S. government has played against low-priced imports in the solar industry.While U.S. companies were some of the first to introduce solar technology, China came to dominate global solar manufacturing in recent decades by subsidizing production and creating a vibrant domestic market for solar installation. In 2011, the United States imposed duties on Chinese products to counteract subsidies and unfairly low prices. U.S. installers then started buying more products from Taiwan, but in 2015 the United States imposed duties on Taiwan as well.Trade experts said that pausing the tariffs could undercut trade laws aimed at protecting American workers by allowing companies in China to continue flooding the United States with cheap imports.Auxin Solar, a California manufacturer of solar panels.Anastasiia Sapon for The New York TimesMamun Rashid, chief executive of Auxin Solar.Anastasiia Sapon for The New York TimesOn Monday, Auxin’s chief executive, Mamun Rashid, said President Biden was interfering with the investigation.“By taking this unprecedented — and potentially illegal — action, he has opened the door wide for Chinese-funded special interests to defeat the fair application of U.S. trade law,” Mr. Rashid said in a statement.To pause the tariffs, a Biden administration official said the administration was invoking a section of the 1930 Tariff Act, which allows the president to suspend certain import duties to address an emergency. Commerce Department officials said their investigation would continue and that any tariffs that resulted from their findings would begin after the 24-month pause expired.“The president’s emergency declaration ensures America’s families have access to reliable and clean electricity while also ensuring we have the ability to hold our trading partners accountable to their commitments,” Gina Raimondo, the Commerce secretary, said in a release.The possibility of tariffs has touched off an ugly battle in recent months over the future of the U.S. solar industry.American solar companies have said that the prospect of more — and retroactive — tariffs was already having a chilling effect on imports. Groups such as the Solar Energy Industries Association, whose members include several Chinese manufacturers with U.S. operations, have been lobbying the White House against the tariffs and on Monday welcomed news that the administration would pause any new levies.“Today’s actions protect existing solar jobs, will lead to increased employment in the solar industry and foster a robust solar manufacturing base here at home,” Abigail Ross Hopper, the president and chief executive of S.E.I.A., said in an emailed statement.“During the two-year tariff suspension window,” she said, “the U.S. solar industry can return to rapid deployment while the Defense Production Act helps grow American solar manufacturing.”Companies that rely on imported products — and U.S. officials who are prioritizing the transition to solar energy — have been complaining that the Commerce Department inquiry has injected uncertainty into future pricing for the solar market, slowing the transition away from fossil fuels. NextEra Energy, one of the largest renewable energy companies in the country, had said it expected to delay the installation of between two and three gigawatts worth of solar and storage construction — enough to power more than a million homes.“The last couple of months we have had to pause all construction efforts,” said Scott Buckley, president of Green Lantern Solar, a solar installer based in Vermont. Mr. Buckley said his company had been forced to put about 10 projects on hold, which would have resulted in the installation of about 50 acres of solar panels.Mr. Buckley said there was no easy solution to the country’s reliance on imported products in the short term and that the White House’s actions on Monday would allow companies like his to resume installations this year.“This is a get back to work order,” he said. “That’s the way I think about it. Let’s clear the logjams.”Solar panels made in China. Major industry groups, some of which include Chinese manufacturers, had been lobbying the Biden administration to take action against the tariffs.Adam Dean for The New York TimesBut domestic solar producers and U.S. labor unions have said that the recent surge in imports from Chinese companies doing their manufacturing in Southeast Asia clearly violates U.S. trade law, which forbids companies to try to avoid U.S. tariffs by moving production or assembly of a product to another country.The domestic producers have accused importers — who have close commercial ties with China — of exaggerating their industry’s hardships to try to sway the Biden administration and preserve profit margins that stem from unfairly priced imports.“If you have a supply chain that depends on dumped and subsidized imports, then you’ve got a problem with your supply chain,” said Scott Paul, the president of the Alliance for American Manufacturing.“We’re getting dependent on hostile countries without sufficient domestic production to ensure against price hikes and supply shocks,” said Michael Stumo, chief executive of Coalition for a Prosperous America, a nonprofit group that promotes domestic manufacturing. “Whether it’s medicine, or PPE, or solar panels, you’ve got to have domestic production.”Some critics also said the legal rationale for the White House’s moves was specious, arguing that the administration was effectively declaring a state of emergency because of the consequences of its own trade laws.Scott Lincicome, a trade policy expert at the Cato Institute, a libertarian think tank, said that the administration’s actions seemed to be “quite the stretch of the statute.”The trade law provision that Mr. Biden invoked allows the president to “declare an emergency to exist by reason of a state of war, or otherwise,” and during such a state of emergency to import “food, clothing, and medical, surgical, and other supplies for use in emergency relief work” duty free.He said critics of U.S. tariffs had long proposed a “public interest” test that would allow levies to be lifted to mitigate broader economic harm, but Congress had never approved such an action.In a letter late last month, Senators Sherrod Brown of Ohio and Bob Casey of Pennsylvania, both Democrats, complained that solar importers had spent “millions of dollars on advertising and lobbying to urge political interference in the trade enforcement process.” Biden administration officials had previously said that the Commerce Department’s inquiry was immune to political interference, describing it as “quasi-judicial” and “apolitical.”Solar tariffs have been a source of contention for decades, but they have taken on renewed importance in recent years as the consequences of climate change became more apparent. Chinese companies have expanded internationally, allowing them to continue to ship products to the United States, while American companies have struggled to compete.The global solar industry’s dependence on China has complicated the Biden administration’s efforts to ban products linked with forced labor in Xinjiang, the northwest region where U.S. officials say Chinese authorities have detained more than one million Uyghurs and other minorities. Xinjiang is a major producer of polysilicon, the raw material for solar panels.Solar importers complained that a ban last year on solar raw materials made with forced labor by Hoshine Silicon Industry temporarily halted billions of dollars of American projects, as companies struggled to produce documentation to customs officials to prove that neither they nor their suppliers were obtaining material from Hoshine.After the Russia invasion of Ukraine in February, high gasoline prices have also impeded a broader desire to push the country away from oil and left Mr. Biden asking oil-producing nations in the Middle East and beyond to ramp up production.White House officials said Monday that Mr. Biden would sign a suite of directives meant to increase the domestic development of low-emission energy technologies. He is set to make it easier for domestic suppliers to sell solar systems to the federal government. And he will order the Department of Energy to use the Defense Production Act to “rapidly expand American manufacturing” of solar panel parts, building insulation, heat pumps, power grid infrastructure and fuel cells, the administration said in a fact sheet. More

The collective amount of money mortgage holders could pull out of their homes while retaining 20% equity rose by an unprecedented $1.2 trillion in the first quarter of this year, according to Black Knight, a mortgage software and analytics firm.
In total, the nation’s so-called tappable equity stood at $11 trillion, or two times the previous peak in 2006.
That boils down to an average of about $207,000 in tappable equity per homeowner.

Houses in Hercules, California, US, on Tuesday, May 31, 2022. Homebuyers are facing a worsening affordability situation with mortgage rates hovering around the highest levels in more than a decade.
David Paul Morris | Bloomberg | Getty Images

Homeowners are in the money, and it just keeps coming. Two years of rapidly rising home prices have pushed the the nation’s collective home equity to new highs.
The amount of money mortgage holders could pull out of their homes while still keeping a 20% equity cushion rose by an unprecedented $1.2 trillion in the first quarter of this year, according to a new analysis from Black Knight, a mortgage software and analytics firm. That is the largest quarterly increase since the company began tracking the figure in 2005.

Mortgage holders’ so-called tappable equity was up 34%, or by $2.8 trillion, in April compared with a year ago. Total tappable equity stood at $11 trillion, or two times the previous peak in 2006. That works out to an average of about $207,000 per homeowner.
Tappable equity is largely held by high-credit borrowers with low mortgage rates, according to Black Knight. Nearly three-quarters of those borrowers have rates below 4%. The current rate on the 30-year fixed mortgage is over 5%.
The flipside of rising home values is that prospective buyers are increasingly being priced out of the market. Mortgage rates have also been rising sharply, putting homeownership further out of reach for some.
“It really is a bifurcated landscape – one that grows ever more challenging for those looking to purchase a home but is simultaneously a boon for those who already own and have seen their housing wealth rise substantially over the last couple of years,” said Ben Graboske, president of Black Knight Data & Analytics. “Depending upon where you stand, this could be the best or worst of all possible markets.”
The housing market, however, is showing slight signs of cooling. Home prices, as measured by Black Knight in April, were up 19.9% year over year, down from the 20.4% gain seen in March. The slowed growth could be an early indication of the impact of rising rates.”April’s decline is more likely a sign of deceleration caused by the modest rate increases in late 2021 and early 2022 when rates first began ticking upwards,” Graboske said. “The March and April 2022 rate spikes will take time to show up in repeat sales indexes.”

Rising interest rates historically cool home prices, but supply remains pitifully low in the current market. Active listings are 67% below pre-pandemic levels, with about 820,000 fewer listings than a typical spring season.
Given the current market conditions, homeowners are less likely to sell their homes and more likely to tap some of that vast equity for renovations. Home equity lines of credit are preferable now, as an owner likely wouldn’t want to refinance their first mortgage to a higher rate, even to pull out cash.
A recent report from Harvard’s Joint Center for Housing projected home improvement spending to increase by nearly 14% this year.
“Record-breaking home price appreciation, solid home sales, and high incomes are all contributing to stronger remodeling activity in our nation’s major metros, especially in the South and West,” said Sophia Wedeen, a researcher in the Remodeling Futures Program at the Center.

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The strong job market may be about to take a turn for the worse. That could come to haunt those who made choices based on today’s conditions.Shanna Jackson, the president of Nashville State Community College, is struggling with a dilemma that reads like good news: Her students are taking jobs from employers who are eager to hire, and paying them good wages.The problem is that students often drop their plans to earn a degree in order to take the attractive positions offered by these desperate employers. Ms. Jackson is worried that when the labor market cools — a near certainty as the Federal Reserve Board raises interest rates, slowing the economy in an attempt to control rapid inflation — an incomplete education will come back to haunt these students.“If you’ve got housing costs rising, gas prices going up, food prices going up, the short-term decision is: Let me make money now, and I’ll go back to school later,” Ms. Jackson said. Anecdotally, she said, the issue is most intense in hospitality-related training programs, where credentials are often valued but not technically required.Strong labor markets often encourage people to forgo training, but this economic moment poses unusually difficult trade-offs for students with families or other financial responsibilities. Cutting working hours to go to class right now means passing up the benefits of strong wage growth at a moment of soaring fuel, food and housing costs.Taking advantage of the plentiful job opportunities available now could come with upsides — employment can build résumés and provide people with valuable experience and skills. But labor economists say that deciding to skip school and training today could come at a cost down the road. Research consistently suggests that people with degrees and skills training earn more and have more job stability in the longer run.“It’s really great to have income, but you also want to keep your eye on the future,” Mary C. Daly, president of the Federal Reserve Bank of San Francisco, said in an interview last week. “Workers with higher skills will have higher wages and more upside potential.”Ms. Daly speaks from personal experience. She herself dropped out of high school at age 15 to earn money. She eventually earned her graduation equivalency and enrolled in a semester of classes at a local college, but had to work three part-time jobs — at a Target, a doughnut shop and a deli — to support herself while she studied. She went on to pursue a degree full time and later earned a Ph.D. in economics.“That hard work was the best choice I have ever made,” she said. Drawing on her own experience and on the data she parses as a labor economist, she often urges young people to stay in training to improve their own future opportunities, even if they have to balance it with work.“The jobs that are hot right now — restaurants, warehousing — these are things that won’t last forever,” Ms. Daly said.Many sectors are, unquestionably, booming. Today’s labor market has 1.9 open jobs for every available worker and the fastest wage growth for rank-and-file workers since the early 1980s. That’s especially true for lower-wage occupations in fields such as leisure and hospitality.The State of Jobs in the United StatesJob gains continue to maintain their impressive run, even as government policymakers took steps to cool the economy and ease inflation.May Jobs Report: U.S. employers added 390,000 jobs and the unemployment rate remained steady at 3.6 percent ​​in the fifth month of 2022.Slowing Down: Economists and policymakers are beginning to argue that what the economy needs right now is less hiring and less wage growth. Here’s why.Opportunities for Teenagers: Jobs for high school and college students are expected to be plentiful this summer, and a large market means better pay.Higher Interest Rates: Spurred by red-hot inflation, the Federal Reserve has begun raising interest rates. What does that mean for the job market?Against that backdrop, fewer students are opting to continue their education. The latest enrollment figures, released in May by the National Student Clearinghouse Research Center, showed that 662,000 fewer students enrolled in undergraduate programs this spring than had a year earlier, a decline of 4.7 percent.Community college enrollment is also way down, having fallen by 827,000 students since the start of the pandemic. The decline is likely partly demographic, and partly a result of choices made during the pandemic.The shift to online learning was challenging for many students, and, just as schools were allowing students back into the classroom, the job market heated up and opportunities suddenly abounded. Inflation began to ratchet up at the same time, making earning money more critical as the cost of rent, gas and food climbed. That confluence of factors is likely keeping many students from continuing to pursue their education.Gabby Calvo, 18, left the business administration program at Nashville State this year. She said she did not know what she wanted to do with the degree, and had begun making good money, $21 an hour, as a front-end manager at a Kroger grocery store. The job was an unusual one for someone her age to land.“They didn’t really have anyone, so they took a chance on me,” she said, explaining that nobody else stood ready to fill the position and she had worked closely with the person who held it previously.Teenagers are often finding they can land positions they might not have otherwise as companies stretch to find talent, and teenage unemployment is now hovering near the lowest level since the 1950s.Ms. Calvo is hoping to work her way up to the assistant store-manager level, which would put her in a salaried position, and thinks she has made the prudent choice in leaving school, even if her parents disagree.“They think it’s a bad idea — they think I should have quit working, gone to college,” she said. But she has made enough money to put her name on a lease, which she recently signed along with her boyfriend, who is 19 and works at the restaurant in a local Nordstrom.“I feel like I have a lot of experience, and I have a lot more to gain,” Ms. Calvo said.The question, then, is how people like Ms. Calvo will fare in a weaker labor market, because today’s remarkable economic strength is unlikely to continue.The Fed is raising rates in a bid to slow down consumer demand, which would in turn cool down job and wage growth. Monetary policy is a blunt instrument: There is a risk that the central bank will end up pushing unemployment higher, and even touch off a recession, as it tries to bring today’s rapid inflation under control.That could be bad news for people without credentials or degrees. Historically, workers with less education and those who have been hired more recently are the ones to lose their jobs when unemployment rises and the economy weakens. At the onset of the pandemic, to consider an extreme example, unemployment for adults with a high school education jumped to 17.6 percent, while that for the college educated peaked at 8.4 percent.The same people benefiting from unusual opportunities and rapid pay gains today could be the ones to suffer in a downturn. That is one reason economists and educators like Ms. Jackson often urge people to continue their training.“We worry about their long-term futures, if this derails them from ever going to college, for a $17 to $19 Target job. That’s a loss,” said Alicia Sasser Modestino, an associate professor at Northeastern University who researches labor economics and youth development. Still, Ms. Sasser Modestino said that taking high-paying jobs today and pursuing training later did not have to be mutually exclusive. Some people are getting jobs at places that offer tuition assistance while others can work and study at the same time.Other students, like Ms. Calvo, might use the time to figure out what they want to do with their futures in ways that will leave them better off in the long run.Plus, the economy could be shifting in ways that continue to keep workers in high demand. Baby boomers continue to age, and immigration has declined sharply during the pandemic, which could leave employers scrambling for employees for years. If that happens, degrees and certificates — labor market currency for much of the past two decades — may prove less essential.Luemettrea Williams, who holds down three jobs in order to pay her tuition and other bills, at her job in a doctor’s office in Nashville in May.Laura Thompson for The New York Times“There comes a point at which there are so few high school graduates to play with that you have to give your pool cleaner a raise,” said Anthony Carnevale, the director of Georgetown University’s Center on Education and the Workforce. Plus, Mr. Carnevale said, economic policies coming out of Washington could add to the need for high-school-educated workers for a time. President Biden’s infrastructure bill, passed last year, is expected to create jobs in construction and other fields as it directs investment toward bridge rebuilding and airport and port upgrades.“We’re about to go through an era when you don’t need to go through college. That’s going to be a popular story,” he said.Even before the pandemic, people were increasingly questioning the value of a college education. Many people do not complete their degree or certificate programs, leaving them without improved job prospects and often crushing student loan burdens. And higher education alone is not a panacea: Some certificates and qualifications confer much greater labor market benefits, while others offer a smaller wage premium.But data and research continue to suggest that staying in school benefits workers over the long run. Unemployment is consistently lower for people with college degrees, and wages increase notably as education levels climb. The typical worker with only a high school diploma earned $809 a week in 2021, while one with a bachelor’s degree earned $1,334.“The high school job market has been declining since 1983,” Mr. Carnevale said. His research has shown that after the early 1980s, degree holders began to widen their lifetime earnings advantage.The economic resiliency that comes with education is what Luemettrea Williams is banking on. Ms. Williams, 34, has recently transferred to Nashville State as a nursing student.She had been working for years as a medical assistant in a doctor’s office, but got the job because she already knew the doctor; she did not have the relevant credential. Early in the pandemic, the doctor asked her what she would do if he retired, and she realized it was time to return to school. She is working three jobs to pay her tuition, along with her rising gas and grocery bills. She and her 9-year-old daughter have moved in with her aunt, but Ms. Williams is confident she’ll end up with a sturdy career at the end of her two-year program.“That is No. 1: being able to have a stable income where I don’t have to work three jobs to make ends meet,” Ms. Williams said. “I just have to get through these two years, and my life will change.” More