Evelyn Reynolds

More stories

  • 125 Shares169 Views

    in Economy

    What Kalamazoo (Yes, Kalamazoo) Reveals About the Nation’s Housing Crisis

    A decade ago, the city — and all of Michigan — had too many houses. Now it has a shortage. The shift there explains today’s costly housing market in the rest of the country.For years, when Michigan politicians talked about the state’s housing problem, they were referring to a surplus: too many run-down houses, stripped of valuable copper, sitting empty and blighting neighborhoods. Now the message has flipped. In her State of the State address this year, Gov. Gretchen Whitmer lamented the housing shortage and landed one of her biggest applause lines with, “The rent is too damn high, and we don’t have enough damn housing. So our response is simple: ‘Build, baby, build!”If you want to know what the housing crisis for middle-income Americans looks like in 2024, spend some time in Michigan. The surplus-to-shortage whipsaw here is a mitten-shaped miniature of what the entire country has gone through.I’ve been writing about housing and the economy for two decades, and have watched as the nation’s housing market has made the journey from boom to bust to deficit, seemingly without pausing for a normal middle. There are lots of reasons this happened, but they center on a big one: the late-2000s housing bust, which the country has never fully recovered from. Or as Ali Wolf, chief economist at Zonda, a data and consulting firm, put it: “The Great Recession broke the U.S. housing market.”At first, rapidly rising housing costs seemed like a regional problem. It made sense that places like San Francisco, which was already expensive, filled with well-paid tech workers and hamstrung by stringent building regulations, would be in crisis. Much of the rest of the country was still affordable, however, so high-cost “superstar cities” were seen as an exception instead of a warning.Now California’s problem is everywhere. Double-income couples with good jobs are priced out of homeownership in Spokane, Wash. Homeless encampments sprawl in Phoenix. The rent is too damn high in Kalamazoo.The housing crisis has moved from blue states to red states, and large metro areas to rural towns. In a time of extreme polarization, the too-high cost of housing and its attendant social problems are among the few things Americans truly share. That and a growing rage about the country’s inability to fix it.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

  • 150 Shares149 Views

    in Economy

    While the Public Awaited Jobs Data, Wall Street Firms Got a Look

    A report was delayed on the Bureau of Labor Statistics website, but some investors got it in the meantime, raising new questions about agency practices.For more than half an hour on Wednesday morning, economists and investors were stuck repeatedly refreshing their browsers, looking for a delayed report on the U.S. job market from a government website.Not everyone had to wait that long.A number of Wall Street investment firms obtained details about the report — which showed a large downward revision to job growth in 2023 and early 2024 — at least 15 minutes before the information was posted on the Bureau of Labor Statistics website. That head start could, at least in theory, have given in-the-know investors an opportunity to profit on the information before the public at large.It isn’t clear how many people got early access to the data, or whether anyone actually traded on it. Markets seemed to react little to the revision in jobs data either before or after the general release. But the episode was the latest in a series of incidents in which the agency provided information to investors that wasn’t available to the general public.In February, an employee of the labor bureau sent information about housing inflation — at the time, an issue of intense interest to many investors — to a group of “super users” that included a number of hedge funds. The information turned out to be inaccurate, but even if that had not been the case, agency leaders said, it was inappropriate to share information selectively.Then, in May, the agency said it had inadvertently posted data on the Consumer Price Index — one of the highest-profile monthly economic reports — 30 minutes before the scheduled release time. The files in question are closely monitored by Wall Street firms but not by less sophisticated users.Taken together, the incidents raise concerns about the agency’s handling of sensitive information, said Julia Coronado, founder of MacroPolicy Perspectives, a research firm with Wall Street clients.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

  • 100 Shares149 Views

    in Economy

    U.S. Added 818,000 Fewer Jobs Than Reported Earlier

    The Labor Department issued revised figures for the 12 months through March that point to greater economic fragility.The U.S. economy added far fewer jobs in 2023 and early 2024 than previously reported, a sign that cracks in the labor market are more severe — and began forming earlier — than initially believed.On Wednesday, the Labor Department said monthly payroll figures overstated job growth by roughly 818,000 in the 12 months that ended in March. That suggests employers added about 174,000 jobs per month during that period, down from the previously reported pace of about 242,000 jobs — a downward revision of about 28 percent.The revisions, which are preliminary, are part of an annual process in which monthly estimates, based on surveys, are reconciled with more accurate but less timely records from state unemployment offices. The new figures, once they’re made final, will be incorporated into official government employment statistics early next year.The updated numbers are the latest sign of vulnerability in the job market, which until recently had appeared rock solid despite months of high interest rates and economists’ warnings of an impending recession. More recent data, which wasn’t affected by the revisions, suggests job growth slowed further in the spring and summer, and the unemployment rate, though still relatively low at 4.3 percent, has been gradually rising.Federal Reserve officials are paying close attention to the signs of erosion as they weigh when and how much to begin lowering interest rates. In a speech in Alaska on Tuesday, Michelle W. Bowman, a Fed governor, highlighted “risks that the labor market has not been as strong as the payroll data have been indicating,” although she also said the increase in the unemployment rate could be overstating the extent of the slowdown.This year’s revision was unusually large. Over the previous decade, the annual updates had added or subtracted an average of about 173,000 jobs. Still, substantial updates are hardly without precedent. Job growth for the year ending March 2019, for example, was revised down by 489,000, or about 20 percent.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

  • 125 Shares189 Views

    in Economy

    Nonfarm payroll growth revised down by 818,000, Labor Department says

    As part of its preliminary annual benchmark revisions to the nonfarm payroll numbers, the Bureau of Labor Statistics said the actual job growth was nearly 30% less than the initially reported
    The revision to the total payrolls level of -0.5% is the largest since 2009.
    At the sector level, the biggest downward revision came in professional and business services, where job growth was 358,000 less than initially reported.

    The U.S. economy created 818,000 fewer jobs than originally reported in the 12-month period through March 2024, the Labor Department reported Wednesday.
    As part of its preliminary annual benchmark revisions to the nonfarm payroll numbers, the Bureau of Labor Statistics said the actual job growth was nearly 30% less than the initially reported 2.9 million from April 2023 through March of this year.

    The revision to the total payrolls level of -0.5% is the largest since 2009. The numbers are routinely revised each month, but the BLS does a broader revision each year when it gets the results of the Quarterly Census of Employment and Wages.
    Wall Street had been waiting for the revisions numbers, with many economists expecting a sizeable reduction in the originally reported figures. The new numbers, if they hold up when the BLS issues its final revisions in February, imply monthly job gains of 174,000 during the period, as opposed to the initial indication of 242,000.
    Even with the revisions, job creation during the period stood at more than 2 million, but the report could be seen as an indication that the labor market is not as strong as the previous BLS reporting had made it out to be. That in turn could provide further impetus for the Federal Reserve to start lowering interest rates.
    “The labor market appears weaker than originally reported,” said Jeffrey Roach, chief economist at LPL Financial. “A deteriorating labor market will allow the Fed to highlight both sides of the dual mandate and investors should expect the Fed to prepare markets for a cut at the September meeting.”
    At the sector level, the biggest downward revision came in professional and business services, where job growth was 358,000 less. Other areas revised lower included leisure and hospitality (-150,000), manufacturing (-115,000), and trade, transportation and utilities (-104,000).

    Within the trade category, retail trade numbers were cut by 129,000.
    A few sectors saw upward revisions, including private education and health services (87,000), transportation and warehousing (56,400), and other services (21,000).
    Government jobs were little changed after the revisions, picking up just 1,000.
    Nonfarm payroll jobs totaled 158.7 million through July, an increase of 1.6% from the same month in 2023. There have been concerns, though, that the labor market is starting to weaken, with the rise in the unemployment rate to 4.3% representing a 0.8 percentage point gain from the 12-month low and triggering a historically accurate measure known as the “Sahm Rule” that indicates an economy in recession.
    However, much of the gain in the unemployment rate has been attributed to an increase in people returning to the workforce rather than a pronounced surge in layoffs.
    “This preliminary estimate doesn’t change the fact that the jobs recovery has been and remains historically strong, delivering solid job and wage gains, strong consumer spending, and record small business creation,” White House economist Jared Bernstein said in a statement.
    To be sure, economists at Goldman Sachs said later Wednesday that they think the BLS may have overstated the revisions by as much as half a million. The firm said undocumented immigrants who now are not in the unemployment system but were listed initially as employed amounted for some of the discrepancy, along with a general tendency for the initial revision to be overstated.
    Federal Reserve officials nonetheless are watching the jobs situation closely and are expected to approve their first interest rate cut in four years when they next meet in September. Chair Jerome Powell will deliver a much-anticipated policy speech Friday at the Fed’s annual retreat in Jackson Hole, Wyoming, that could lay the groundwork for easier monetary policy ahead.

    Don’t miss these insights from CNBC PRO More

  • 125 Shares119 Views

    in Economy

    Fed Minutes Show a Cut ‘Likely’ to Come in September

    Even before a disappointing July jobs report, Federal Reserve officials thought they would probably cut rates at their Sept. 17-18 meeting.Federal Reserve officials held off on cutting interest rates at their July meeting, but minutes from that gathering showed that they were clearly poised to lower them at their meeting in September, just weeks before the presidential election.“The vast majority” of officials thought that “if the data continued to come in about as expected, it would likely be appropriate to ease policy at the next meeting,” according to notes from the meeting released on Wednesday.Days after the Fed’s July gathering, a disappointing employment report showed that employers hired more slowly than expected. And in the weeks since, fresh data have showed that inflation continues to cool.That leaves the Fed primed to cut rates at their next meeting on Sept. 17-18, though just how much they will lower borrowing costs is still an open question. Investors think that a quarter-point reduction is most likely, but they see a half-point cut as a possibility.While the Fed is independent of politics, that move is likely to draw attention to the central bank. A reduction would come just weeks before November’s presidential election, and at a time when the Fed’s policies — especially its effort to fight inflation and its effect on the housing market through mortgage costs — have become a common topic of conversation on the campaign trail.The Fed has held interest rates steady at 5.3 percent, the highest level in more than two decades, since July 2023. At that level, interest rates are hefty enough to discourage many families and businesses from borrowing money, which weighs on demand and helps to cool the economy, making it harder for companies to lift prices.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

  • 113 Shares149 Views

    in Economy

    Harris’s Price-Gouging Ban: Price Controls or No Quick Effect?

    The plan does not appear to amount to government price controls. It also might not bring down grocery bills anytime soon.Vice President Kamala Harris threw her support behind a federal ban on price-gouging in the food and grocery industries last week. It was the first official economic policy proposal of her presidential campaign, and it was pitched as a direct response to the high price of putting food on the table in America today.“To combat high grocery costs, VP Harris to call for first-ever federal ban on corporate price-gouging,” the Harris campaign proclaimed in the subject line of a news release last week, ahead of a speech laying out the first planks of her economic agenda.It is still impossible to say, from publicly available details, what exactly the ban would do. Republicans have denounced the proposal as “communist,” warning that it would lead to the federal government setting prices in the marketplace. Former President Donald J. Trump has mocked the plan on social media as “SOVIET Style Price Controls.”Progressives have cheered the announcement as a crucial check on corporate greed, saying it could immediately benefit shoppers who have been stunned by a 20 percent rise in food costs since President Biden took office.But people familiar with Ms. Harris’s thinking on the ban now say it might not resemble either of those characterizations. The ban, they also suggest, might actually not do anything to bring down grocery prices right now. Those who spoke about the strategy behind the emerging policy did so on the condition of anonymity.Ms. Harris’s campaign has created the space for multiple interpretations, by declining to specify how that ban would work, when it would apply or what behaviors it would prohibit.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

  • 88 Shares149 Views

    in Economy

    Ford Pulls Back Its Electric Vehicle Push

    The automaker said it would invest less in battery-powered cars and scrap a planned electric three-row sport utility vehicle.Ford Motor, which had once hoped to race ahead of other established automakers in electric vehicles, is again slowing the pace of its investments and new battery-powered models.The automaker said on Wednesday that it would delay the introduction of a new large electric pickup truck by about 18 months, to 2027, and scrap a three-row electric sport utility vehicle.The company is also reducing the amount of money it plans to spend on electric vehicles in an effort to stem multibillion-dollar losses on the technology, while adding plans to introduce a new electric delivery van in 2026. A new medium-size electric pickup is expected in 2027 as well, the company said.“The competitive nature of the market is changing globally,” Ford’s chief financial officer, John Lawler, said in a conference call. “That means these vehicles need to be profitable, and if not, we will pivot and adjust and make those tough decisions.”Mr. Lawler said investments in electric vehicles would now account for about 30 percent of the company’s capital budget, down from 40 percent. The company will take a charge of $400 million to account for the cost of manufacturing equipment it purchased for the production of the canceled electric S.U.V., and it may have up to $1.5 billion in additional expenses related to the project.“This is certainly not great news in terms of Ford’s progress on E.V.s,” said Sam Abuelsamid, a principal research analyst at Guidehouse Insights, a research firm. “Clearly they have not yet come to grips with cost-reduced E.V.s and getting more affordable products on the market.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

  • 63 Shares179 Views

    in Economy

    Judge Blocks F.T.C.’s Noncompete Rule

    The Federal Trade Commission was deemed to lack the authority to bar companies from restricting their employees’ ability to go to work for rivals.A federal judge on Tuesday upheld a challenge to the Federal Trade Commission’s ban on noncompete agreements, blocking it from taking effect in September as scheduled.Judge Ada Brown of U.S. District Court for the Northern District of Texas ruled that the antitrust agency lacked authority to issue substantive rules related to unfair methods of competition, including the noncompete rule, which would have prohibited companies from restricting their employees’ ability to work for rivals.The push to adopt the rule is part of the Biden administration’s effort to crack down on practices that regulators argue are anticompetitive, unfairly constraining workers.Judge Brown had temporarily blocked the ban in July. Her decision on Tuesday renders that injunction permanent, and nationwide in scope.Banning noncompete agreements would increase workers’ earnings by at least $400 billion over the next decade, the F.T.C. has estimated. The agreements affect roughly one in five American workers, or around 30 million people, according to the agency, whose purview includes antitrust and consumer protection issues.Victoria Graham, an F.T.C. spokeswoman, said the agency was disappointed by Judge Brown’s decision and would “keep fighting to stop noncompetes that restrict the economic liberty of hardworking Americans, hamper economic growth, limit innovation and depress wages.”“We are seriously considering a potential appeal, and today’s decision does not prevent the F.T.C. from addressing noncompetes through case-by-case enforcement actions,” Ms. Graham added.A tax firm, Ryan, sued to block the rule just hours after the F.T.C. voted 3 to 2 in April to adopt it. The U.S. Chamber of Commerce later joined the case as a plaintiff, as did the Business Roundtable and two Texas business groups.The Chamber of Commerce and other groups have asserted that the F.T.C. lacks constitutional and statutory authority to adopt the rule, with Ryan calling it “arbitrary, capricious and otherwise unlawful” — a position with which Judge Brown agreed. Business groups have also argued that the ban would limit their ability to protect trade secrets and confidential information.In response to Judge Brown’s ruling, G. Brint Ryan, chief executive of Ryan, called the rule “continuing overreach and overregulation” by the federal government, adding that the firm was “happy we were able to successfully stop the overreach in this instance.”But the three Democrats on the five-member F.T.C. maintain that it can legally issue rules defining unfair methods of competition under the Federal Trade Commission Act of 1914, the law that created the agency.In a separate case, a federal judge in Pennsylvania declined last month to block the rule. Diverging rulings on the fate of the ban could leave the door open to review by higher courts.“Many businesses will welcome the reprieve, but the uncertainty continues as the fight now moves to the appellate courts,” said Kevin Goldstein, an antitrust partner at Winston & Strawn. More