Evelyn Reynolds

China calls for heavy government spending and lending, as its leaders seek to project confidence in the face of global uncertainty over the pandemic and war in Ukraine.BEIJING — Plowing past global anxieties over the war engulfing Ukraine, China set its economy on a course of steady expansion for 2022, prioritizing growth, job creation and increased social welfare in a year when the national leader, Xi Jinping, is poised to claim a new term in power.The annual government work report delivered to China’s National People’s Congress by Premier Li Keqiang on Saturday did not even mention Russia’s invasion of Ukraine, and it took an implacably steady-as-it-goes tone on China’s economic outlook.The implicit message appeared to be that China could weather the turbulence in Europe, and would focus on trying to keep the Chinese population at home contented and employed before an all-important Communist Party meeting in the fall, when Mr. Xi is increasingly certain to extend his time in power.“In our work this year, we must make economic stability our top priority and pursue progress while ensuring stability,” Mr. Li said.By announcing a target for China’s economy to expand “around 5.5 percent” this year, Mr. Li reinforced the government’s emphasis on shoring up growth in the face of global uncertainty from the coronavirus pandemic and the war in Ukraine. That goal is slower than the 8.1 percent rebound in the economy that China reported last year, but higher than many economists believe the country can achieve without big government spending programs.Mr. Li disappointed anyone who might have thought he would have anything to say about Ukraine. The Chinese government’s annual work reports generally avoid new announcements on foreign policy, and this year’s was no exception. Beijing has sought to maintain its partnership with Russia while trying to distance China from President Vladimir V. Putin’s decision to go to war.“China will continue to pursue an independent foreign policy of peace, stay on the path of peaceful development, work for a new type of international relations,” Mr. Li said in his report — the closest he came to a comment on international developments.Still, leaders in Beijing also signaled — in numbers, rather than words — that they were preparing for an increasingly dangerous world. China’s military budget will grow by 7.1 percent this year to about $229 billion, according to the government’s budget report, also released Saturday. Mr. Li indicated that there would be no slowing in China’s efforts to modernize and overhaul its military, which includes expanding the navy and developing an array of advanced missiles.Chinese military planes at an aviation expo in Zhuhai, China, last year.Ng Han Guan/Associated Press“While economic development provides a foundation for a possible defense budget increase, the security threats China is facing and the demands for national defense capability enhancement caused by those threats are the driving factors,” Global Times, a Communist Party-run newspaper, wrote in a report this week that predicted China’s rise in military spending. “Over the past year, the U.S. also rallied its allies and partners around the world to provoke and confront China militarily.”In December, the United States Congress approved a budget of $768 billion for the American military. But salaries and equipment manufacturing costs are far higher in the United States, which has prompted some analysts to suggest that China’s military budget is rapidly catching up in actual purchasing power.The plan Mr. Li outlined suggests that China values economic growth more than trying to make potentially painful adjustments to shift the economy toward greater reliance on domestic consumer spending. Beijing has been trying, with limited success, to move the economy away from dependence on debt-fueled infrastructure and housing construction.China had managed to reduce slightly last year its debt relative to economic output. It needed to do so because this ratio had climbed, during the first year of the pandemic, to a level that economists regarded as unsustainable.But meeting this year’s growth target would require more borrowing, undoing most or all of the progress made last year in reducing the debt burden, said Michael Pettis, an economist with Peking University. He said that it was hard to see how China could break its dependence on achieving high growth targets at least partly through heavy borrowing.Mr. Li acknowledged that the Chinese economy would face challenges this year, pointing to the sluggish recovery of consumption and investment, flagging growth in exports and a shortage of resources and raw materials. By the last three months of last year, the economy was growing only 4 percent.Part of that economic slowdown reflected a series of government policy shifts aimed at reining in unsustainable expansion in some sectors. Housing speculation was discouraged. Stringent limits were imposed on the after-school tutoring industry. And national security agencies imposed tighter scrutiny on the tech sector.China’s huge construction industry is stalling as home buyers turn wary, with developers beginning to default on debts. Dwindling revenues from land sales have made some local governments more cautious about building additional roads and bridges. Continued lockdowns and travel restrictions to prevent the coronavirus from spreading have caused a downturn in spending at hotels and restaurants.A shopping district in Shanghai in January.Aly Song/ReutersMr. Li gave few clues to whether China might shift away from its stringent “zero Covid” pandemic strategy, which has relied on mass testing and occasional lockdowns. He urged officials to handle local outbreaks in a “scientific and targeted manner.”The Latest on China: Key Things to KnowCard 1 of 3National People’s Congress. More

The U.S. economy added 678,000 jobs in February and unemployment fell to 3.8 percent, the lowest level since the pandemic took hold.Monthly change in jobs More

Lawmakers have passed legislation granting benefits and protections, but allowing Lyft and Uber to continue to treat drivers as contractors.The Washington State Senate on Friday passed a bill granting gig drivers certain benefits and protections while preventing them from being classified as employees — a longstanding priority of ride-hailing companies like Uber and Lyft.While the vote appears to pave the way for ultimate passage after a similar measure passed the state House of Representatives last week, the two bills would still have to be reconciled before being sent to the governor for approval. Gov. Jay Inslee has not said whether he intends to sign the legislation.Mike Faulk, a spokesman for Mr. Inslee, said Friday that the governor’s office usually did not “speculate on bill action,” adding, “Once legislators send it to our office, we’ll evaluate it.”The Senate legislation — the result of a compromise between the companies and at least one prominent local union, the Teamsters — was approved 40 to 8.The action follows the collapse of similar efforts in California and New York amid resistance from other unions and worker advocates, who argued that gig drivers should not have to settle for second-class status.Under the compromise, drivers would receive benefits like paid sick leave and a minimum pay rate while transporting customers. The bill would also create a process for drivers to appeal so-called deactivations, which prevent them from finding work through the companies’ apps.But the minimum wage wouldn’t cover the time they spend working without a passenger in the car — a considerable portion of most drivers’ days. And like independent contractors, they could not unionize under federal law.One especially controversial feature of the bill is that it would block local jurisdictions from regulating drivers’ rights. A similar feature helped ignite opposition that killed the prospects for such a bill in New York State last year.Looming in the background of the legislative action in Washington State was the possibility of a ballot measure that could have enacted similar changes with weaker benefits for drivers. After California passed a law in 2019 that effectively classified gig workers as employees, Uber, Lyft and other gig companies spent roughly $200 million on a ballot measure that rolled back those protections. The legislation is still being litigated after a state judge deemed it unconstitutional. More

S&P 500 More

The Biden administration and European officials are crushing the Russian economy and stirring mass anxiety to pressure President Vladimir V. Putin to end his war in Ukraine.WASHINGTON — As they impose historic sanctions on Russia, the Biden administration and European governments have set new goals: devastate the Russian economy as punishment for the world to witness, and create domestic pressure on President Vladimir V. Putin to halt his war in Ukraine, current and former U.S. officials say.The harsh penalties — which have hammered the ruble, shut down Russia’s stock market and prompted bank runs — contradict previous declarations by U.S. officials that they would refrain from inflicting pain on ordinary Russians. “We target them carefully to avoid even the appearance of targeting the average Russian civilian,” Daleep Singh, the deputy national security adviser for international economics, said at a White House briefing last month.The escalation in sanctions this week has occurred much faster than many officials had anticipated, largely because European leaders have embraced the most aggressive measures proposed by Washington, U.S. officials said.With Russia’s economy crumbling, major companies — Apple, Boeing and Shell among them — are suspending or exiting operations in the country. The Biden administration said on Thursday that it would not offer sanctions relief amid Mr. Putin’s increasingly brutal offensive.The thinking among some U.S. and European officials is that Mr. Putin might stop the war if enough Russians protest in the streets and enough tycoons turn on him. Other U.S. officials emphasize the goals of punishment and future deterrence, saying that the carcass of the Russian economy will serve as a visible consequence of Mr. Putin’s actions and a warning for other aggressors.But Russia’s $1.5 trillion economy is the world’s 11th largest. No countries have tried pushing an economy of that size to the brink of collapse, with unknown consequences for the world. And the actions of the United States and Europe could pave the way for a new type of great-power conflict in the future.The moves have also ignited questions in Washington and in European capitals over whether cascading events in Russia could lead to “regime change,” or rulership collapse, which President Biden and European leaders are careful to avoid mentioning.“This isn’t the Russian people’s war,” Secretary of State Antony J. Blinken said in a news conference on Wednesday. But, he added, “the Russian people will suffer the consequences of their leaders’ choices.”“The economic costs that we’ve been forced to impose on Russia are not aimed at you,” he said. “They are aimed at compelling your government to stop its actions, to stop its aggression.”The harshest sanctions by far are ones that prevent the Central Bank of Russia from tapping into much of its $643 billion in foreign currency reserves, which has led to a steep drop in the value of the ruble. Panic has set in across Russia. Citizens are scrambling to withdraw money from banks, preferably in dollars, and some are fleeing the country.The United States and Europe also announced new sanctions this week against oligarchs with close ties to Mr. Putin. Officials are moving to seize their houses, yachts and private jets around the world. French officials on Thursday snatched the superyacht of Igor Sechin, the chief executive of Rosneft, the Russian state oil giant.“The sanctions have turned out to be quite unprecedented,” said Maria Snegovaya, a visiting scholar at George Washington University who has studied U.S. sanctions on Russia. “Everybody in Russia is horrified. They’re trying to think of the best way to preserve their money.”The French finance minister, Bruno Le Maire, has used some of the harshest language yet to articulate the mission, telling a radio program on Tuesday that Western nations were “waging an all-out economic and financial war on Russia” to “cause the collapse of the Russian economy.” He later said he regretted his words.Evidence of shock and anger among Russians — mostly anecdotal in a country with restricted speech and little public opinion polling — has raised the specter of mass political dissent, which, if strong enough, could threaten Mr. Putin’s grip on power.Senator Lindsey Graham, Republican of South Carolina, said on Fox News, “The best way for this to end is having Eliot Ness or Wyatt Earp in Russia, the Russian Spring, so to speak, where people rise up and take him down.”Mr. Graham added: “So I’m hoping somebody in Russia will understand that he’s destroying Russia, and you need to take this guy out by any means possible,” reiterating his Twitter post on Thursday calling for an assassination of Mr. Putin.A spokesman for Prime Minister Boris Johnson of Britain said on Monday that the sanctions were “intended to bring down the Putin regime.” Mr. Johnson’s office quickly corrected the statement, saying that it did not reflect his government’s view and that the goal of the measures was to stop Russia’s assault on Ukraine.Michael A. McFaul, a former U.S. ambassador to Moscow, called the talk of Mr. Putin’s overthrow unhelpful, emphasizing that the sanctions should be tailored and described as a means of stopping the invasion. “The objective should be to end the war,” he said.But while the Biden administration has said it is still open to diplomacy with Russia, it has not offered to reverse any of the sanctions in exchange for de-escalation.“Right in this moment, they’re marching toward Kyiv with a convoy and continuing to take reportedly barbaric steps against the people of Ukraine,” Jen Psaki, the White House press secretary, said on Thursday. “So, no, now is not the moment where we are offering options for reducing sanctions.”But in an interview on Friday with the Russian news agency TASS, Victoria J. Nuland, the U.S. under secretary of state for political affairs, suggested terms for possible sanctions relief, albeit maximalist ones. She said that Mr. Putin had to end the war, help to “rebuild” Ukraine and recognize its sovereignty, borders and right to exist. Those are conditions that the Russian leader is highly unlikely to consider.Families in Kyiv, Ukraine, waited for a train west on Friday.Lynsey Addario for The New York TimesAll the while, Biden officials have sought to assure the Russian people that they take no pleasure in their suffering. The United States and Europe have tried to spare Russians some of the effects, including allowing sales of consumer technology to Russia despite sweeping new limits on exports.They have also refrained from imposing energy sanctions because of Europe’s dependence on Russian gas and the risk of higher oil prices.Even so, Mr. Putin and his aides are doing their best to find some political advantage in the sanctions, arguing that the real goal for the West has always been to weaken Russia. As he launched his invasion last week, Mr. Putin said the United States would have sanctioned his country “no matter what.”Russia-Ukraine War: Key Things to KnowCard 1 of 4Nuclear plant seized. More

Nonfarm payrolls rose by 678,000 in February and the unemployment rate fell to 3.8%.
Wall Street had been looking for respective figures of 440,000 and 3.9%.
Wages were little changed on the month and up 5.1% for the year, well below expectations.
Leisure and hospitality led job gains, followed by professional and business services and health care.

Job growth accelerated in February, posting the biggest monthly gain since July as the employment picture got closer to its pre-pandemic self.
Nonfarm payrolls for the month grew by 678,000 and the unemployment rate was 3.8%, the Labor Department’s Bureau of Labor Statistics reported Friday.

That compared with estimates of 440,000 for payrolls and 3.9% for the jobless rate.
In a sign that inflation could be cooling, wages barely rose for the month, up just 1 cent an hour, or 0.03%, compared with estimates for a 0.5% gain. The year-over-year increase was 5.13%, well below the 5.8% Dow Jones estimate as more lower-wage workers were hired and 12-month comparisons helped mute more recent gains.
For the labor market broadly, the report brought the level of employed Americans closer to levels before the Covid crisis, though still short by 1.14 million. Labor shortages remain a major obstacle to fill the 10.9 million jobs that were open at the end of 2021, a historically high gap that had left about 1.7 vacancies per available worker.
At least from an employment perspective, the February report confirms that the rampant omicron spread during the winter had little impact.
“This report indicates that the job market is healthy and resilient to the ebbs and flows of the pandemic,” said Daniel Zhao, senior economist for job placement site Glassdoor. “We’ve seen that job gains have been over 400,000 for 10 months in a row.”

“The labor market recovery remains very robust across the board as more Americans are returning to work,” added Eric Merlis, managing director of global markets at Citizens Financial Group. “Geopolitical issues and inflation pose ongoing threats to the U.S. economic recovery, but pandemic restrictions are being lifted and we continue to see strong job growth.”
Markets, however, reacted little to the news as investors remain focused on the Russia-Ukraine war. Stocks fell through the day Friday and government bond yields were sharply lower.
As has been the case for much of the pandemic era, leisure and hospitality led job gains, adding 179,000 for the month. The job gap for that sector, which was hit most by government-imposed restrictions, is 1.5 million from pre-Covid levels.
The unemployment rate for the industry tumbled to 6.6%, a slide of 1.6 percentage points from January and closer to the 5.7% of February 2020. Wages actually declined slightly, falling 2 cents an hour to $19.35. The increase in hiring for bars, restaurants, hotels and other similar businesses likely is contributing to the slower pace of pay increases.
“We’re getting back to pre-pandemic levels in terms of labor force participation. Job growth is still quite healthy and strong. So things are really good,” said Kathy Jones, chief fixed income strategist at Charles Schwab. “As more people come back to work and participation picks up, the level of wage gains should start to subside a little bit. In terms of the Fed worrying about inflation driven by people making more money, I guess that’s good news.”
Other sectors showing strong gains included professional and business services (95,000), Health care (64,000), construction (60,000), transportation and warehousing (48,000) and retail (37,000). Manufacturing contributed 36,000 and financial activities rose 35,000.

‘Real’ unemployment edges up

Previous months saw upward revisions. December moved up to 588,000, an increase of 78,000 from the previous estimate, while January’s rose to 481,000. Together, the revisions added 92,000 more than previously recorded and brought the three-month average to 582,000.
The labor force participation rate, a closely watched metric indicating worker engagement, rose to 62.3%, still 1.1 percentage points from the February 2020 pre-pandemic level. An alternative measure of unemployment that includes discouraged workers and those holding part-time jobs for economic reasons, and is sometimes referred to as the “real” unemployment rate, also edged higher, to 7.2%.
The trend for jobs is clearly upward after a wintertime surge of Covid omicron cases, while exacting a large human toll, left little imprint on employment.
“If we see more numbers like this moving forward, we can be optimistic about this year,” wrote Nick Bunker, economic research director at job search site Indeed. “Employment is growing at a strong rate and joblessness is getting closer and closer to pre-pandemic levels. Still, in these uncertain times, we cannot take anything for granted. But if the recovery can keep up its current tempo, several key indicators of labor market health will hit pre-pandemic levels this summer.”
The economy also has been wrestling with pernicious inflation pressures running at their highest levels since the early 1980s stagflation days. The Labor Department’s main inflation gauge showed consumer prices rising at a 7.5% clip in January, a number that is expected to climb to close to 8% when February’s report is released next week.
Amid it all, companies continue to hire, filling broad gaps still left in the leisure and hospitality sector as well as multiple other pandemic-struck industries.
The Federal Reserve is watching the jobs numbers closely. Monetary policymakers widely view the economy as near full employment, adding pressure to prices that have soared amid supply shortages and demand surges related to the pandemic.
Inflation has come as Congress has pumped more than $5 trillion in stimulus into the economy while the Fed has kept benchmark borrowing rates anchored near zero and injected nearly $5 trillion into the economy through asset purchases.
Now, Fed officials expect this month to start raising interest rates, with market expectations that those hikes likely will continue through the year.
The February jobs report “will give the Fed greater confidence to push ahead with its planned policy tightening but, with wage growth now levelling off, there is arguably less pressure for officials to front-load an aggressive series of rate hikes over the coming months,” wrote Michael Pearce, senior U.S. economist at Capital Economics.
Traders continued to fully price in a 25 basis point rate hike at the March Fed meeting, and see a strong possibility of five more such increases through the end of the year, according to CME Group data.

WATCH LIVEWATCH IN THE APP More

Russia’s invasion of Ukraine is likely to go almost unmentioned at an annual gathering of China’s legislature, as leaders focus on stabilizing economic growth.BEIJING — When China’s legislature opens its weeklong annual session on Saturday, Chinese leaders will be eager to use the event to bolster confidence in the country’s economy.Beijing will use the National People’s Congress to pledge that China’s economy, the engine of global growth, will regain momentum despite a punishing slump in housing, rising commodity prices, scattered lockdowns to control coronavirus outbreaks and widespread uncertainty over the war in Ukraine.Beijing’s ability to maintain political and economic stability is paramount as the ruling Communist Party prepares the ground for Xi Jinping, China’s leader, to secure another term in power at a party congress late this year. Mr. Xi has used a nationalistic vision of rejuvenation to justify his strongman rule and the party’s expanding grip into everyday life, but the challenges his country faces are grave.The Chinese economy is slowing. Continued lockdowns and other stringent pandemic-control measures have hurt consumption. The average age of the population is rising fast, threatening to result in labor shortages. Officials are grappling with an unusually sustained wave of public anger about human trafficking and the shoddy protection of women.Stabilizing China’s weak economy will be the central focusOn Saturday, Premier Li Keqiang will announce the government’s target for economic growth this year. Economists expect the target to be at least 5 percent and possibly higher. That would signify continued gradual deceleration of the Chinese economy, although still faster growth than in most other countries.Economies have rebounded strongly over the past year in the West, helped by heavy consumer spending as the pandemic ebbs at least temporarily. But China is on the opposite track. China’s economy expanded 8.1 percent last year, but slowed markedly in the final months of last year, to 4 percent, as government measures to limit real estate speculation hurt other sectors as well.Residential housing construction last year in Guangdong, China.Gilles Sabrié for The New York TimesConsumers, sometimes kept home by lockdowns and domestic travel restrictions, are pulling back. A high level of household indebtedness, mainly for mortgages, has also dampened spending. Even exports appear to be growing a little less rapidly after spectacular growth through most of the pandemic.To offset weak consumption, Premier Li is expected to announce another round of heavy, debt-fueled spending on infrastructure and on assistance to very poor households, particularly in rural areas.Zhu Guangyao, a former vice minister of finance who is now a cabinet adviser, said at a news conference in late January that he expected the target to be about 5.5 percent. But Jude Blanchette, a China specialist at the Center for Strategic and International Studies in Washington, said that global supply chain difficulties and the economic and financial fallout from the war in Ukraine might prompt China to set a lower target.At the congress, Mr. Blanchette predicted, “the biggest concern and the central focus is going to be the economy.”How long will China seek to keep Covid out?China has kept the coronavirus almost completely under control within its borders after the initial outbreak in Wuhan two years ago, but at considerable cost: intermittent lockdowns, particularly in border cities, as well as lengthy quarantines for international travelers and sometimes domestic ones as well. Hints could emerge of how China intends to follow the rest of the world in opening up, although possibly not until next year.Experts say China is unlikely to throw open its borders before the Communist Party congress late this year. When China does start opening up, it will want to avoid the kind of uncontrolled outbreak that has overwhelmed nursing homes and hospitals in Hong Kong, largely taking a toll on the city’s oldest residents, many of whom are unvaccinated.But in interviews with state media, posts on social media and in public remarks in the past week, China’s top medical experts have begun dropping clues that the country is looking for a less stringent approach that protects lives without being overly disruptive to the economy.Coronavirus testing outside a shopping mall in Beijing last month.Andy Wong/Associated PressThe challenge for Beijing is increasing the rate of vaccination among the country’s older population. In December, a senior health official said that the country’s overall vaccination rate was high, but only half of citizens over 70 were vaccinated.China’s Covid strategy relies heavily on mass surveillance of the population’s movements, with mobile phone location tracking as well as swift containment of buildings and neighborhoods when cases emerge, to impose mass testing and quarantines. But in a sign of Beijing’s concern about the economic toll of such measures, the National Development and Reform Commission ordered local governments last month not to impose unauthorized lockdowns. The top economic planner said that governments “must not go beyond the corresponding regulations of epidemic prevention and control to lock down cities and districts, and must not interrupt public transportation if it’s unnecessary or without approval.”The Latest on China: Key Things to KnowCard 1 of 3National People’s Congress. More

Remote work is often favored by established employees who know their manager, are comfortable in their role and want to balance work with family responsibilities or other personal obligations. For those just starting their careers, working in isolation can make fitting into an organization — and eventually progressing up its ranks — more difficult.Companies have become more open to remote work during the pandemic. Now, as they plan for what work will look like going forward, they’re paying more attention to what it means to build a career without the traditional opportunities for networking, mentorship and visibility that come with a full-time physical office, Corinne Purtill reports for The New York Times.Prithwiraj Choudhury, an associate professor at Harvard Business School who focuses on the changing geography of work, said he had seen three common practices at companies that managed remote work successfully. These companies:Took the time to compile information and practices in handbooks or guides that employees can consult from anywhere.Paired remote workers with mentors outside their department so that they could speak frankly without endangering team relationships.And created what he called the “virtual water cooler.”In one study, Mr. Choudhury and his colleagues randomly assigned some interns at a global bank to take part in one-on-one video meetings with senior executives. Others met virtually with fellow interns, and some were assigned no extra meetings at all. Those assigned to meet with the senior employees had better performance reviews at the end of the summer and were more likely to receive job offers.Managed effectively, remote work can lead to more in-depth conversations, Mr. Choudhury said.Among the employees most likely to prefer remote work are women and people of color, who even before the pandemic often reported feeling underrepresented and isolated in the workplace. Going remote without proper support can create a vicious cycle that exacerbates that sense of alienation while also decreasing the chance that those workers will be pulled in for career- and morale-boosting projects.Sensitive to this unconscious tendency, which organizational psychologists have labeled “proximity bias,” The software developer HubSpot evaluated all of its roles and designated which positions have to be done in the office for legitimate business reasons.“‘I just prefer when I can see people on my team’ — that is not a good business reason,” said Katie Burke, the company’s chief people officer.Some of employees are also giving more thought to what long-term remote or hybrid work might mean for their futures. READ THE FULL ARTICLE → More