Evelyn Reynolds

The furniture capital of the state is ground zero for inflation, labor shortages, hot demand and limited supply. It’s debating how to cope.HICKORY, N.C. — Six months into the coronavirus pandemic, as millions of workers lost their jobs and companies fretted about their economic future, something unexpected happened at Hancock & Moore, a purveyor of custom-upholstered leather couches and chairs in this small North Carolina town.Orders began pouring in.Families stuck at home had decided to upgrade their sectionals. Singles tired of looking at their sad futons wanted new and nicer living room furniture. And they were willing to pay up — which turned out to be good, because the cost of every part of producing furniture, from fabric to wood to shipping, was beginning to swiftly increase.More than a year later, the furniture companies that dot Hickory, N.C., in the foothills of the Blue Ridge Mountains, have been presented with an unforeseen opportunity: The pandemic and its ensuing supply chain disruptions have dealt a setback to the factories in China and Southeast Asia that decimated American manufacturing in the 1980s and 1990s with cheaper imports. At the same time, demand for furniture is very strong.In theory, that means they have a shot at building back some of the business that they lost to globalization. Local furniture companies had shed jobs and reinvented themselves in the wake of offshoring, shifting to custom upholstery and handcrafted wood furniture to survive. Now, firms like Hancock & Moore have a backlog of orders. The company is scrambling to hire workers.“Not to sound trite, but it’s unprecedented,” said Amy Guyer, vice president for human resources and benefits for the parent company that includes Rock House Farm furniture brands such as Hancock & Moore and Century Furniture.Yet the same forces that are making it difficult for overseas manufacturers to sell their goods in the United States — and giving American workers a chance to command higher wages — are also throwing up obstacles.Many of the companies are dependent on parts from overseas, which have been harder — and more expensive — to obtain. Too few skilled workers are seeking jobs in the industry to fill open positions, and businesses are unsure how long the demand will last, making some reluctant to invest in new factories or to expand to towns with bigger potential labor pools.“We would love to expand capacity,” Ms. Guyer said, “but we’re the furniture mecca of North Carolina — every other furniture company is in the same boat we are.”Even if there were enough workers, said Alex Shuford, the chief executive of the company that owns Rock House Farm furniture brands, “the surge isn’t going to last as long as it would take to go to a completely trained work force and get them up to speed.”The current moment, he added, “is abnormal in every way, and not sustainable in any way.”For now, companies in Hickory are seeing a huge upswing thanks to strong demand and limited supply. Prices for couches, beds, kitchen tables and bedding have shot up this year, climbing by 12 percent nationally through October. Furniture and bedding make up a small slice of the basket of goods and services that the inflation measure tracks — right around 1 percent — so that increase has not been enough to drive overall prices to uncomfortable levels on its own. But the rise has come alongside a bump in car, fuel, food and rent costs that have driven inflation to 6.2 percent, the highest level in 31 years..css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-3btd0c{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-3btd0c{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-3btd0c strong{font-weight:600;}.css-3btd0c em{font-style:italic;}.css-1kpebx{margin:0 auto;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-family:nyt-cheltenham,georgia,’times new roman’,times,serif;font-weight:700;font-size:1.375rem;line-height:1.625rem;}@media (min-width:740px){#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-size:1.6875rem;line-height:1.875rem;}}@media (min-width:740px){.css-1kpebx{font-size:1.25rem;line-height:1.4375rem;}}.css-1gtxqqv{margin-bottom:0;}.css-19zsuqr{display:block;margin-bottom:0.9375rem;}.css-12vbvwq{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;}@media (min-width:740px){.css-12vbvwq{padding:20px;width:100%;}}.css-12vbvwq:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-12vbvwq{border:none;padding:10px 0 0;border-top:2px solid #121212;}.css-12vbvwq[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-12vbvwq[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-12vbvwq[data-truncated] .css-5gimkt:after{content:’See more’;}.css-12vbvwq[data-truncated] .css-6mllg9{opacity:1;}.css-qjk116{margin:0 auto;overflow:hidden;}.css-qjk116 strong{font-weight:700;}.css-qjk116 em{font-style:italic;}.css-qjk116 a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;text-underline-offset:1px;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:visited{color:#326891;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:hover{-webkit-text-decoration:none;text-decoration:none;}The question for policymakers and consumers alike is how long the surge in demand and the limitations in supply will last. A key part of the answer lies in how quickly shipping routes can clear up and whether producers like the craftsmen in Hickory can ramp up output to meet booming demand. But at least domestically, that is proving to be a more challenging task than one might imagine.The production floor at Century Furniture’s case goods factory in Hickory.Travis Dove for The New York TimesA Century Furniture upholstery plant in Hickory. Demand for furniture is booming, and domestic producers are raising prices.Travis Dove for The New York TimesOn a wet morning in late October, the sound of electrical sanders whirring and the steady thunks of a craftsman planing a chair leg echoed through one of Century Furniture’s cavernous warehouses. The factory once housed 600 workers tending assembly lines. Now about 250 busily construct tables, chairs and desks.The plant typically has 2,000 orders in the pipeline, but these days that is more like 4,000, said Brandon Mallard, its manager. Deliveries of ordered furniture used to happen within six to eight weeks; now they can take six months.The same supply chain problems afflicting nearly every industry are also hitting Century. Dresser drawer handles are trapped on container ships somewhere between Vietnam and North Carolina. For some products, imported wood has faced delays.Component delivery dates “just keep moving out,” Mr. Mallard said.Labor has also been a challenge. Employees at Century have been working overtime to catch up with the backlog, but workers burn out, and furniture margins are so thin that paying overtime labor rates can eat into profits. Several of Mr. Shuford’s brands have been raising prices, but because pieces are preordered weeks or months in advance, they have sometimes failed to increase them quickly enough to keep up. The experience in Hickory is a microcosm of what is playing out on a larger scale across the global economy.Jonathan Smith is studying upholstering at the Catawba Valley Furniture Academy. Too few young people are entering the furniture industry to replace those who are retiring. Travis Dove for The New York TimesDemand has bounced back after falling early in the pandemic, fueled by government stimulus checks and savings amassed during the pandemic. Spending has lurched away from services and toward goods, and that mix is only slowly normalizing.The sudden change has thrown a finely balanced global supply chain out of whack: Shipping containers have struggled to get to stockyards where they are needed, container ships cannot clear ports quickly enough, and when imported goods get to dry land, there are not enough trucks around to deliver everything. All of that is compounded by foreign factory shutdowns tied to the virus.With foreign-made parts failing to reach domestic producers and warehouses, prices for finished goods, parts and raw materials have shot higher. American factories and retailers are raising their own prices. And workers have come into short supply, prompting companies to lift their wages and further fueling inflation as they increase prices to cover those costs.Chad Ballard, 31, has gone from making $15 per hour building furniture in Hickory at the start of the pandemic to $20 as he moved into a more specialized role.Mr. Ballard said he came to town four years ago after working construction jobs and at tree services in Florida. He was ready for something more stable and less weather-exposed, and he found it in furniture making. The job has provided stability and enough financial security that he was able to pay off his Jeep and make plans to buy a house with his wife, who also works in the industry.But there is a flip side to some of the factors that are helping to buoy workers like Mr. Ballard: If inflation continues to rise in the hot-demand economy, it will mean rising costs for them and other consumers that eat into paychecks and make it harder to afford everyday necessities like food and shelter. Already, the heating economy means that Mr. Ballard’s goal of buying a house will be slightly tougher. The typical price for a house in Hickory has shot up 21 percent over the past year to $199,187, according to data from Zillow.Fabric and leather templates for furniture designs at a Hancock & Moore factory in Taylorsville, N.C.Travis Dove for The New York TimesBeverly Houston organized pieces of leather as they came off the cutting machine at the Hancock & Moore factory.Travis Dove for The New York TimesAs price increases drag on, economic policymakers worry that consumers and businesses might come to expect sustained inflation and demand steadily higher pay, resulting in a spiral where wages and prices push each other up.There is reason to believe that such a dire outcome can be avoided. Many economists, including those in the Biden administration, believe that demand will eventually moderate as life shifts back toward more normal patterns and consumers spend down their savings, allowing supply to catch up — possibly by the end of next year.Understand the Supply Chain CrisisCard 1 of 5Covid’s impact on the supply chain continues. More

Inflation is not something new for the U.S. as the nation has weathered seven such episodes of lasting price surges including the current run, since World War II.
Post-World War II and the crippling stagflationary period of the 1970s and early 1980s offer the closest parallels.
“The question is, how long it remains elevated and when it backs off and at what rate does it settle out?” said Peter Boockvar, chief investment officer at Bleakley Advisory Group.
While Fed policymakers have been slow to tighten in the present day, they have vowed that if inflation expectations become unhinged, they’ll act. The worry, though, is that the Fed is already too late.

A customer’s groceries are rung up at a store in San Francisco, California, U.S., on Thursday, Nov. 11, 2021.
David Paul Morris | Bloomberg | Getty Images

Critical supply chains are choked off. Demand soars. Prices surge and everyone starts freaking out about inflation and wonder how long it will last.
Is it 1945? 1916? 1974?

The answer, of course, is all of the above, and you can throw 2021 in there as well.
Inflation is not something new for the U.S. as the nation has weathered seven such episodes of lasting price surges since World War II including the current run, which is the strongest in 30 years. Getting out of the pandemic shock has been a difficult exercise for the world’s largest economy, and inflation has been a painful side effect.
But trying to find a historical parallel – and, thus, perhaps a way out – isn’t easy. Virtually every cycle bears at least some similarities to others, but each is unique in its own way.
The most common comparison to these days is the stagflation – low growth, high prices – environment of the 1970s and early ’80s. And while there’s probably at least some validity to that, the reality is more complicated.
“In terms of how widespread inflation is, it’s pretty much touching everything. It’s widespread, or more than what we saw in the 1970s,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. “The question is, how long it remains elevated and when it backs off and at what rate does it settle out?”

Most U.S. policymakers reject the 1970s connection.
Leaders such as Federal Reserve Chairman Jerome Powell, Treasury Secretary Janet Yellen and Biden administration officials view inflation as temporary and almost wholly driven by factors unique to the pandemic. Once those factors subside, they see inflation drifting lower, eventually getting around the 2% level the Fed considers emblematic of a healthy and growing economy.
Some White House economists have asserted that the current stretch looks not like the stagflation era, but more like the immediate post-World War II climate, when price controls, supply problems and extraordinary demand fueled double-digit inflation gains that didn’t subside until the late 1940s.

Episodes of U.S. inflation

Consumer price index, percent change from a year ago

Oil shocks

Korean War

Supply ​

Iraq invades ​

Late 1960’s ​

Gas price ​

economic ​

disruptions

Note: Periods of heightened inflation are shaded.
Source: Bureau of Labor Statistics (CPI), White House (inflationary periods through ‘08). Data is
seasonally adjusted and as of Oct. ’21.

Episodes of U.S. inflation

Consumer price index, percent change from
a year ago

Korean War

Late 1960’s economic expansion

Oil shocks

Iraq invades Kuwait

Gas price spike

Supply chain disruptions

Note: Periods of heightened inflation are shaded.
Source: Bureau of Labor Statistics (CPI), White
House (inflationary periods through ‘08).
Data is seasonally adjusted and as of Oct. ’21.

Episodes of U.S. inflation

Consumer price index, percent change from a year ago

Oil shocks

Korean ​

Supply ​

invades ​

1960’s ​

economic ​

Gas price ​

disrup-
tions

Note: Periods of heightened inflation are shaded.
Source: Bureau of Labor Statistics (CPI), White House (inflationary periods through
‘08). Data is seasonally adjusted and as of Oct. ’21.

“Today’s shortage of durable goods is similar — a national crisis necessitated disrupting normal production processes,” a team of White House economists wrote in a July 2021 paper. “Instead of redirecting resources to support a war effort, however, manufacturing capabilities were temporarily shut down or reduced to avoid COVID contagion.”
Once the supply chain disruptions are remedied – and there are signs that at least the major ports are becoming less crowded in recent days – “inflation could quickly decline once supply chains are fully online and pent-up demand levels off,” the paper stated.

Transitory, permanent or ‘in between’

The idea that inflation is “transitory” – a well-worn term that is transitioning out of vogue – is central to the insistence from fiscal and monetary authorities that excessively easy policy is not to blame for the inflation surge.
However, easy policy has been at the core of many previous cycles, and trying to blame everything on the pandemic hasn’t gone over especially well with consumers, whose confidence is running at decade lows, and on Wall Street, where investors are getting antsy over how long inflation will last.
Whether inflation is temporary, in fact, is probably the biggest debate happening in investing circles these days.

A customer pumps gas into her vehicle at a gas station on November 22, 2021 in Miami, Florida.
Joe Raedle | Getty Images

“The debate is always couched in black and white. The reality is, it’s probably in between there,” said Jim Paulsen, chief investment strategist at the Leuthold Group.
In fact, Paulsen has studied inflation over the past century or so and found that while there may been many periods where it has become problematic, there are only two where it proved lasting: after World War I and in the aforementioned 1970s-early ’80s.
He’s largely in the camp that this run, too, will pass as it has been fueled largely by supply chain problems that ultimately will resolve.
Still, he’s wary of being wrong.
“It’s not as temporary as we first thought, but I still think that’s the best odds” that it will pass in the coming months, Paulsen said. “But I’d also say that it is undoubtedly the biggest risk that it’s not. If it’s not, then it’s a disastrous outcome not only for stocks but also for the economy if it’s truly runaway.”
The inflation danger comes because this cycle is unlike any other in one important way: Policymakers have never thrown anything close to this amount of money at the economy.

What if sometime next year we not only declare pseudo-victory over Covid, but we declare it over inflation, too?

Jim Paulsen
chief investment strategist, the Leuthold Group

‘Abuse of policy’

While President Joe Biden and Yellen have insisted that all the fiscal and monetary stimulus is not the underlying cause of inflation, the argument that nearly $10 trillion between Congress and the Fed hasn’t pushed prices higher is hard to swallow for some.
Even though Paulsen believes the present conditions will fade in 2022, he worries about what he calls “global synchronized abuse of policy.” In essence, the meaning is that policymakers remain in emergency posture for an economic picture that seems long past crisis stage, with the potential for boiling over should officials continue to turn up the heat.

Still, he also sees declining commodity prices – with oil at the center – as well as falling shipping costs and the lessening of clogs at the ports as hopeful signs that inflation will, at least in historical terms, prove temporary.
“What if sometime next year we not only declare pseudo-victory over Covid, but we declare it over inflation, too?” Paulsen said.
The emergence of a new Covid variant in South Africa complicates both questions. Even Powell, Bush and others in the inflation-is-transitory camp say that the pandemic has been the root cause of price pressures, so if the new variant turns into a larger threat, that means inflation stays higher for longer.
Beside that, though, most mainstream economists are sticking to the belief that 2022 will say a significant drop in inflation.

How it all ends

Mark Zandi, the chief economist at Moody’s Analytics, feels that way even though he says there are close parallels between the current predicament and the runaway inflation of the 1970s.
For one, he said the waves in that inflation shock were both demand-driven and the product of supply issues because of the oil embargoes back then. Unions that were able to negotiate cost of living increases in contracts also boosted the wage-price spiral.
A sentient Fed also contributed to the problems by taking inflation too lightly and resisting the interest rate hikes that could have slowed the economy.
While Fed policymakers have been slow to tighten in the present day, they have vowed that if inflation expectations become unhinged, they’ll act. The worry, though, is that the Fed is already too late.
“The wage spiral that we suffered back then was because of the COLAs and the explosion if inflation expectations. They did rise and the Fed did not recognize that and did not respond to it,” Zandi said. “Assuming each future wave of the virus is less disruptive, then, yeah, I think we would see signs of moderation.”

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The pandemic is not over but with the help of vaccinations and Covid-19 safety precautions, Santa Claus is feeling much better about coming to town this year.Stephen Arnold, president of the International Brotherhood of Real Bearded Santas, a trade group with more than 1,800 members, appeared at only a single tree lighting event last year. It was a frightening time, he said, particularly for a group of elderly men who are often overweight and have diabetes.But this season, Mr. Arnold said that all five of his tree lighting ceremonies are back, including a splashy event that he loves at Graceland, Elvis Presley’s estate in Mr. Arnold’s hometown, Memphis. He plans to participate in more than 200 appearances, on par with his prepandemic schedule in 2019. At times, he may perform from inside a life-size snow globe like last year, and a sizable chunk of his events will be held virtually, but it’s a world apart from 2020.“I think almost all of our Santas intend to work a great deal more than they did last year, and a much higher percentage, probably 65 to 70 percent of us, will return to what we consider some kind of normal schedule,” Mr. Arnold, 71, said. “I’m trying to be prepared for a season of relatively close contact.”And so it goes as the United States enters a holiday shopping season that is much more physically present than 2020, but not quite as carefree as it was prepandemic. People are more comfortable shopping at stores, but the number who return will likely vary by geography, and the employees will typically be wearing masks.The Macy’s Thanksgiving Day Parade was massively expanded, with more floats and a longer route, though children under 12 were not allowed to participate in the parade itself. Big chains will offer certain festivities, like Champagne bars, that were missing last year. Gift ideas and decorations will feature more prominently in stores as retailers anticipate more people browsing and planning bigger gatherings.Stephen Arnold was happy to be able to return to Graceland in Memphis as Santa last week.Houston Cofield for The New York TimesThis year promises to be different. “I’m trying to be prepared for a season of relatively close contact,” Mr. Arnold said.Houston Cofield for The New York Times“There’s a lot of pent-up energy to do things,” said Marie Driscoll, managing director of luxury and fashion at Coresight Research, an advisory and research firm. “Everything old is new again.”But hallmarks of a changed season remain. Many stores closed on Thanksgiving and holiday hours at certain malls and chains will be shortened, in part because of a national labor shortage. And many people are bracing for a dearth of products like popular toys as “supply chain issues” becomes the refrain of 2021. There are also those customers who will stay away from stores, based on new habits adopted during the pandemic or ongoing concerns about the virus, and opt to shop online or using curbside pickups.Ms. Driscoll said that signs of precautions would likely be visible throughout stores. “Retailers are going out of their way to make everybody feel comfortable, so at your own discretion you’re wearing a mask, there will be cleansers everywhere, there are options for self-checkout to not necessarily have to queue up and wait in lines,” she said..css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-3btd0c{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-3btd0c{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-3btd0c strong{font-weight:600;}.css-3btd0c em{font-style:italic;}.css-1kpebx{margin:0 auto;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-family:nyt-cheltenham,georgia,’times new roman’,times,serif;font-weight:700;font-size:1.375rem;line-height:1.625rem;}@media (min-width:740px){#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-size:1.6875rem;line-height:1.875rem;}}@media (min-width:740px){.css-1kpebx{font-size:1.25rem;line-height:1.4375rem;}}.css-1gtxqqv{margin-bottom:0;}.css-1g3vlj0{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-1g3vlj0{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-1g3vlj0 strong{font-weight:600;}.css-1g3vlj0 em{font-style:italic;}.css-1g3vlj0{margin-bottom:0;margin-top:0.25rem;}.css-19zsuqr{display:block;margin-bottom:0.9375rem;}.css-12vbvwq{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;}@media (min-width:740px){.css-12vbvwq{padding:20px;width:100%;}}.css-12vbvwq:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-12vbvwq{border:none;padding:10px 0 0;border-top:2px solid #121212;}.css-12vbvwq[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-12vbvwq[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-12vbvwq[data-truncated] .css-5gimkt:after{content:’See more’;}.css-12vbvwq[data-truncated] .css-6mllg9{opacity:1;}.css-qjk116{margin:0 auto;overflow:hidden;}.css-qjk116 strong{font-weight:700;}.css-qjk116 em{font-style:italic;}.css-qjk116 a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;text-underline-offset:1px;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:visited{color:#326891;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:hover{-webkit-text-decoration:none;text-decoration:none;}The retail industry is still recovering from a plummet in store shoppers last year. In November and December 2020, foot traffic to department stores plunged more than 30 percent from the prior year, according to data from Vince Tibone, a senior analyst at Green Street, a real estate analytics firm. That picture seems to be improving, though, with department store foot traffic down 9 percent in October compared with October 2019, the data showed.Jeff Gennette, Macy’s chief executive, said in a recent interview that foot traffic at stores had recovered significantly from 2020 but remained down about 19 percent from 2019. The decline has been “stubborn,” he said, adding that the retailer expected it to improve in 2022.Shoppers may be returning, but they are also bracing for shortages because of supply chain issues.Jeenah Moon for The New York TimesTom Nolan, chief executive of Kendra Scott, a fashion jewelry business with 119 locations, said that in-store visits varied by region.“In the Northeast and West Coast, the numbers aren’t what they have been in Texas and the Southeast,” he said in an interview. While the chain’s sales were robust compared with 2019 or 2020, he noted that it was a boost for business when customers came in to browse, especially with family and friends.People are much more likely to make purchases when they’re at a store than while browsing the store’s website, said Meredith Darnall, senior vice president in the retail division of Brookfield Properties, which oversees more than 130 malls. “The ability to touch and see and talk to somebody about the product is real. They also have add-on sales — you come in for the T-shirt, you’re likely to buy the denim.” Adding to the appeal of in-store shopping for retailers, she said, is the fact that return rates are much higher for e-commerce purchases, especially in apparel and shoes.Plenty of consumers seem eager to shop in person this year. The NPD Group recently surveyed more than 1,000 people about holiday traditions that they missed most in 2020 and hoped to return to this year. About 36 percent said they missed browsing retail stores, while 30 percent said they looked forward to returning to shopping in malls and the “Thanksgiving and Black Friday frenzy.”The experience of shopping was drastically transformed last year as many people avoided lingering in stores and were discouraged from touching and testing products. Fitting rooms were closed or limited in many places. Makeup counters were not offering makeovers or samples of lipstick or perfume. Plastic partitions, hand sanitizer and reminders to socially distance peppered the landscape. Shopper events were downsized or canceled.Ralph Lauren offered a pop-up hot chocolate cart at Bloomingdale’s in Manhattan. Other retailers are back to offering drinks and snacks.Jeenah Moon for The New York TimesThis week, Saks Fifth Avenue unveiled its holiday window display and 10-story-tall light show at its New York flagship store. The retailer, which took a pause from its annual tradition of shutting down Fifth Avenue for a musical performance last year, returned to it this year with a performance by the Young People’s Chorus of New York City and an appearance from Michelle Obama. About 22 Nordstrom stores will have “immersive” photo booths.At the flagship Bloomingdale’s on 59th Street, the store is offering fewer events than the 400-plus it held in 2019, but many more than 2020, when its limited activities were held outdoors. There will be more food and drink for shoppers this season, including Champagne and cups of espresso, though they are being handled more carefully than in years past. The store hosted a performance by Bebe Rexha when it unveiled its holiday windows this month, but kept it to roughly 15 minutes and carefully managed capacity and spacing.“If you would have talked to me in 2019, we would have had elaborate spreads with caterers coming in and passed hors d’oeuvres and Champagne flowing,” said Frank Berman, Bloomingdale’s chief marketing officer. Now, the food is more likely to be prepackaged, and events like cooking demonstrations have been smaller.Still, he said, the retailer has been seeing a recent uptick in tourists and a growing willingness from shoppers to spend time wandering the store.Champagne and espresso are available to shoppers at Bloomingdale’s.Jeenah Moon for The New York Times“As it relates to Covid, they’re feeling safer, and you’re seeing more of that inspirational shopping, people going to make a day of it in our store,” Mr. Berman said. “They’re moving through the store and it’s not about, ‘I need to get this item and get out.’”There are also significant shifts in what people are buying compared to last year. Dressy clothing and luggage are popular again as people have resumed traveling and socializing. And the boom in pet adoptions has led to an explosion in clothing for dogs, which are welcome in the store, Mr. Berman said.The imprint of technology on physical retail has never been starker. Bloomingdale’s is still offering dozens of virtual events in addition to in-store activities. Shoppers now expect the ability to see whether products are in stock before they head to stores and for associates to help mail them, free of charge, when they’re not available, Ms. Driscoll of Coresight said.Nordstrom is among retailers using space at the front of its stores for shelves dedicated to online pickup, Ms. Darnall of Brookfield Properties said. Curbside pickup remains popular at malls and other big box stores.Photos with Santa were a rarity last year, but have largely returned.Jeenah Moon for The New York TimesAs for Santa Claus, Mr. Arnold is busier than ever as virtual visits add to his in-person gigs. Some parents prefer them after last year because the experience can be more magical once Santa is prepped by parents.“You have so much information, you become so real and have a real conversation,” he said. “Then you stop talking and solicit things from them, maybe about elves or reindeer or Mrs. Claus and what she bakes in the kitchen. Once in a while you get a hard question like, ‘Can you bring back Grandpa?’ and you try to wiggle your way out of that one.”Still, it is a rebuilding year.Mr. Arnold’s group, which had more than 2,000 members last year, shrank after many performers who could not or did not want to work in 2020 failed to renew their memberships. Mr. Arnold is confident in a robust return next year by the time of the International Santa Celebration event in Atlanta in April, which had been delayed by the pandemic.“You’re going to see the majority of Santas are going to feel like they’re returning to relatively normal conditions,” he said, adding that he was prepared with his vaccine and a booster. “And most of us who are smart enough will practice safety measures.” More

The Biden administration has called on major companies to help fight the pandemic. Big chains want to get past the holiday staffing crunch first.The holiday shopping season has arrived, and retailers are ringing it in by doing everything from cutting prices to stocking showrooms to lure back customers who stayed at home last year. What the biggest of them are not doing is the one thing the White House and many public health experts have asked them to: mandate that their workers be vaccinated.As other industries with workers in public-facing roles, like airlines and hospitals, have moved toward requiring vaccines, retailers have dug in their heels, citing concerns about a labor shortage. And a portion of one of the country’s largest work forces will remain unvaccinated, just as shoppers are expected to flock to stores.At the heart of the retailers’ resistance is a worry about having enough people to work. In a tight labor market, retailers have been offering perks like higher wages and better hours to prospective employees in hopes of having enough people to staff their stores and distribution centers. The National Retail Federation, the industry’s largest trade group, has estimated that retailers will hire up to 665,000 seasonal workers this year.Walmart, the nation’s biggest private employer, declined to comment on its plans for vaccinations or testing.Eze Amos for The New York TimesMacy’s, for example, said it planned to hire 76,000 full- and part-time employees this season. The retailer has offered referral bonuses of up to $500 for each friend or relative whom employees recruit to join it. Macy’s asked corporate staff this fall to be vaccinated or test negative for Covid-19 to enter its offices. But store workers are a different story.“We have a lot of stores that have a lot of openings, and any ruling that we have to mandate those colleagues be vaccinated prior to Christmas is just going to exacerbate our labor shortage going into a really critical period for us,” Jeff Gennette, Macy’s chief executive, said in an interview.The industry showed how strongly it feels about the issue this month when the Biden administration directed companies with 100 or more workers to mandate vaccines or weekly tests by Jan. 4. Five days after that announcement, the National Retail Federation sued to stop the effort.“We all agree with the premise that vaccines are good and vaccines save lives,” Stephanie Martz, the chief administrative officer of the N.R.F., said in an interview Monday.“But by the same token, you can’t just say, ‘OK, make it so.’”The order is now held up in litigation, challenged by a number of lawsuits from a broad coalition of opponents, and could make its way to the Supreme Court. Court filings by the administration warn that blocking the rule would “likely cost dozens or even hundreds of lives per day.”Mr. Gennette, who sits on the board of the federation, said Macy’s would “love to see” the order put in place in the first quarter, which typically begins in February for the industry. That echoes the federation, which has said it wants to move the deadline back several months.“I support it — I would just love to have it on a timetable that works for us,” Mr. Gennette said. “We need more time.”Jeff Gennette, Macy’s chief executive, said he believed in the importance of employee vaccinations but didn’t want them required until after the holidays.Jeenah Moon for The New York TimesMany health experts say employee mandates are the only way to help the country emerge from the pandemic, as rampant misinformation and politicization of the coronavirus have helped suppress vaccination rates. The vaccination rate for those 12 and older in the United States is about 69 percent, with rates in some pockets of the country as low as 40 percent. Average daily case reports have increased more than 20 percent over the past two weeks.“It’s a pretty big ask, there’s no one denying that,” Crystal Watson, a senior scholar at the Center for Health Security at Johns Hopkins University, said of requiring vaccinations for retail employees. “But we’ve also tried a lot of other things to help people get vaccinated — and I think a mandate right now is what we need to get over that barrier.”Walmart, the nation’s biggest private employer, declined to comment on the federation’s lawsuit or its plans for vaccinations or testing. A spokeswoman for Target said the company had “started taking the necessary steps to meet the requirements of the new Covid-19 rules for large companies as soon as the details were announced.”Spokespeople for several retailers on the federation’s board, including Kohl’s, Dick’s Sporting Goods and Saks, declined to comment for this article.Concern about challenges in hiring workers is a major cause of retailers’ hesitancy.Jim Wilson/The New York Times“I think employers are embarrassed and ashamed by what they are objecting to and therefore use the N.R.F. as a cover,” said Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union.He added: “If you had a choice of going to a workplace, or as a customer to go to a store, that said, ‘All our employees are vaccinated or tested,’ or another store that says, ‘We have no idea who’s vaccinated or tested,’ which would you choose? And that’s why, let’s say, Acme Department Store doesn’t want to advertise that it’s promoting bad public policy.”Many employers in industries, like retail, that have mandated vaccines at corporate offices have not required them for frontline workers, sharing concerns about challenges in hiring. But those workers, including about four million at stores, are among the most vulnerable. They interact frequently with the public and are less likely to be vaccinated themselves. Mandates at Tyson, United Airlines and several health care companies indicate that when faced with the prospect of losing their job, employees most frequently choose inoculation.“We know vaccine requirements work,” said Kevin Munoz, a spokesman for the White House. “The federal government, the country’s largest employer, has successfully implemented its requirement in a way that has boosted vaccinations and avoids any disruptions to operations.”.css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-3btd0c{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-3btd0c{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-3btd0c strong{font-weight:600;}.css-3btd0c em{font-style:italic;}.css-1kpebx{margin:0 auto;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-family:nyt-cheltenham,georgia,’times new roman’,times,serif;font-weight:700;font-size:1.375rem;line-height:1.625rem;}@media (min-width:740px){#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-size:1.6875rem;line-height:1.875rem;}}@media (min-width:740px){.css-1kpebx{font-size:1.25rem;line-height:1.4375rem;}}.css-1gtxqqv{margin-bottom:0;}.css-16ed7iq{width:100%;display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-align-items:center;-webkit-box-align:center;-ms-flex-align:center;align-items:center;-webkit-box-pack:center;-webkit-justify-content:center;-ms-flex-pack:center;justify-content:center;padding:10px 0;background-color:white;}.css-pmm6ed{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-align-items:center;-webkit-box-align:center;-ms-flex-align:center;align-items:center;}.css-pmm6ed > :not(:first-child){margin-left:5px;}.css-5gimkt{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:0.8125rem;font-weight:700;-webkit-letter-spacing:0.03em;-moz-letter-spacing:0.03em;-ms-letter-spacing:0.03em;letter-spacing:0.03em;text-transform:uppercase;color:#333;}.css-5gimkt:after{content:’Collapse’;}.css-rdoyk0{-webkit-transition:all 0.5s ease;transition:all 0.5s ease;-webkit-transform:rotate(180deg);-ms-transform:rotate(180deg);transform:rotate(180deg);}.css-eb027h{max-height:5000px;-webkit-transition:max-height 0.5s ease;transition:max-height 0.5s ease;}.css-6mllg9{-webkit-transition:all 0.5s ease;transition:all 0.5s ease;position:relative;opacity:0;}.css-6mllg9:before{content:”;background-image:linear-gradient(180deg,transparent,#ffffff);background-image:-webkit-linear-gradient(270deg,rgba(255,255,255,0),#ffffff);height:80px;width:100%;position:absolute;bottom:0px;pointer-events:none;}.css-1g3vlj0{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-1g3vlj0{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-1g3vlj0 strong{font-weight:600;}.css-1g3vlj0 em{font-style:italic;}.css-1g3vlj0{margin-bottom:0;margin-top:0.25rem;}.css-19zsuqr{display:block;margin-bottom:0.9375rem;}.css-12vbvwq{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;}@media (min-width:740px){.css-12vbvwq{padding:20px;width:100%;}}.css-12vbvwq:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-12vbvwq{border:none;padding:10px 0 0;border-top:2px solid #121212;}.css-12vbvwq[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-12vbvwq[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-12vbvwq[data-truncated] .css-5gimkt:after{content:’See more’;}.css-12vbvwq[data-truncated] .css-6mllg9{opacity:1;}.css-qjk116{margin:0 auto;overflow:hidden;}.css-qjk116 strong{font-weight:700;}.css-qjk116 em{font-style:italic;}.css-qjk116 a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;text-underline-offset:1px;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:visited{color:#326891;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:hover{-webkit-text-decoration:none;text-decoration:none;}Still, companies mandating vaccines have faced protests or lawsuits. In some states litigation has been passed to impede it. Disney, for instance, paused a mandate for employees at Disney World in Florida after it became illegal for employers in the state to require workers to get the shot.The panic and precautions tied to Covid-19 have played out at retail stores throughout the pandemic and ensnared their workers.First, there was the divide between essential and nonessential businesses, which prompted chains like Guitar Center and Dillard’s to argue that they needed to stay open — and keep their employees coming in — despite the worsening public health crisis. Workers have been at the forefront of disputes around mask mandates and then mask enforcement. Retail chains like REI have been criticized for failing to inform employees about Covid cases in stores. Grocery store workers were not given priority access to vaccines in many states.Target’s chief executive attributed strong staffing numbers to perks and safety measures.Amr Alfiky/The New York Times“We’ve seen, throughout the pandemic, self-serving messages from employers who are putting profitability above their own employees’ health and safety,” Mr. Appelbaum said. “They have a misguided idea that it’s better for profits to take certain actions.”Business has boomed for some of the largest retailers, like Target and Walmart, throughout the pandemic. And while they are still facing rising prices and supply chain strain, executives have indicated recently that pressure on staffing has waned.“We feel really good about our staffing going into the holiday season,” Brian Cornell, Target’s chief executive, told CNBC last week. He added that the company’s retention numbers were “some of the strongest in our history,” which he attributed to perks and safety measures.Retailers are betting that consumers will be comfortable shopping in stores, where foot traffic is already higher than in 2020, regardless of the industry’s efforts to fight the new vaccination and testing requirements. And for those who are concerned about the lack of vaccinations, the companies have bolstered their e-commerce operations and curbside pickup offerings in the past year, though in-store shopping often leads to more purchases and fewer returns.When asked what Macy’s would tell concerned customers about shopping in stores, Mr. Gennette said: “What I would say is we encourage every one of our colleagues to be vaccinated and every colleague wears a mask in our stores and warehouses to protect themselves and others.”Last week, a number of health groups and experts, including the American Medical Association and the American College of Physicians, put out a statement imploring companies to move forward with the Labor Department rules.“The hope was to provide some perspective for business leaders to remind them this is not a political issue,” said Dr. Ashish K. Jha, dean of the Brown University School of Public Health, who was one of the signatories. Dr. Jha said it was important for companies in all industries to follow the rule, noting that retailers play a particular role, given the nature of their employee base. He said those measures should be put in place during the holiday season — not after — especially as that is when case numbers are expected to rise.“Do they really want to be superspreader places during the holiday season and be responsible for their employees getting sick and for their employees spreading it to customers?” Dr. Jha said. More

Price pressures have blossomed into a chief concern for the White House, which has ramped up efforts to remedy supply-chain interruptions.
But ask investors, economists and the American people for their thoughts on inflation, and no one sees inflation cooling off anytime soon.
“I think the hardest thing to communicate is that not every problem has a solution. Some of what needs to be done to heal our economy is to be patient,” says economist Jason Furman.

Customers stand in line to check out at a grocery store in San Francisco, California, U.S., on Thursday, Nov. 11, 2021.
David Paul Morris | Bloomberg | Getty Images

After lying dormant for years, inflation is once again chipping away at American wallets, and it has become a chief concern for the White House.
In recent months, the Biden administration ramped up its efforts to remedy the supply-chain interruptions economists blame for hot inflation. And President Joe Biden has been pushing his economic agenda as a remedy for inflation worries.

But ask investors, economists and the American people for their thoughts on inflation, and no one sees inflation cooling off anytime soon. That means everyone from the president to the everyday voter will likely need patience to get through this.
“I don’t think you want to promise people inflation is going away,” said Jason Furman, an economist and former chairman of the White House Council of Economic Advisers during the Obama administration.
“I think the hardest thing to communicate is that not every problem has a solution. Some of what needs to be done to heal our economy is to be patient,” he continued. “That’s a really hard a message for any president to deliver. They have to be seen as doing things.”

The politics of prices

Rising food and gas prices are weighing on Americans living on fixed or modest incomes. Retail grocery prices rose 1% in October, laundry and dry-cleaning costs are up 6.9% from a year ago, and in some parts of California gasoline is being sold north of $6 a gallon. General Mills notified retailers that it plans to soon hike prices on dozens of its brands, including Cheerios, Wheaties and Annie’s, according to a report published Tuesday.
In turn, the inflation messaging coming out of the White House has focused a great deal on two big, Biden-backed bills. One of the president’s favorite counters to inflation worries is to point out that many economists say his $1.75 trillion Build Back Better bill and a separate $1 trillion infrastructure plan will make businesses and workers more productive and ease inflation pressures over the long term.

Yet while better roads, access to child care and weatherization may help reduce costs years in the future, Democrats face critical midterm elections in less than 12 months.
Inflation appeared to be a hurdle for Democrat Terry McAuliffe, who lost to Republican Glenn Youngkin in Virginia’s recent gubernatorial election.

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Political strategists viewed that election as a gauge of voter attitude toward the current direction of policy with Democrats in control of the White House and Congress. The high-profile Democratic defeat in an increasingly blue Virginia is thought to have sparked compromise between party centrists and progressives on the infrastructure and anti-poverty and climate bills.
Americans’ angst about the economy, as measured by the percentage of those surveyed who mention any economic issue as the top problem facing the U.S., reached a pandemic-era high according to polling firm Gallup. (The survey polled a random sampling of 815 adults, and it had a margin of error of plus or minus 4 percentage points.)
Twenty-six percent of Americans now cite an economic concern as the nation’s top problem, while 7% say inflation, specifically, is their chief anxiety. In September, just 1% of Americans named inflation as their top worry, Gallup said. It has been more than 20 years since inflation was named as the most important problem by at least 7% of Americans.
“Moms and dads are worried, asking, ‘Will there be enough food we can afford to buy for the holidays? Will we be able to get Christmas presents to the kids on time?'” Biden said in a speech on Tuesday.

No major impact on gas

To help ease fuel costs during the holiday season, Biden announced that the U.S. and some of its allies will tap their national strategic petroleum reserves.
“The fact is we’ve faced even worst spikes before just in the last decade,” Biden said of rising gas prices. “But it doesn’t mean we should just stand by idly and wait for prices to drop on their own.”
While the Biden administration said it would put 50 million barrels of oil from government stockpiles onto global markets in the coming weeks, some analysts warned the action likely amounts at best to an attempt to pacify consumers.
Tapping the nation’s oil reserves will have a limited impact on fuel costs since “nearly 40% of the 50MM bbl release was already planned for 2022 as well as the fact that much of the oil will simply go into commercial stockpiles,” wrote Tom Essaye, founder of Sevens Report, a markets research firm.
That oil will eventually be repurchased “and later returned to the SPR, meaning the move is largely symbolic and not going to have a major impact on the actual physical markets,” he added.
Furman, who teaches economics at Harvard University, agreed. He said that drawing on the SPR falls into the “no-stone-left-unturned” category for a White House worried about the political impact of rising prices.
The current inflation, he said, is a function of broad shifts in aggregate demand and aggregate supply — beyond the influence of a one-time appeal to the SPR or any other quick fix.

Inflation expectations

A pesky characteristic of inflation is that today’s price increases are a product of what people think prices will be tomorrow. In other words, inflation expectations can, by themselves, cause inflation.
According to New York Federal Reserve Bank’s most-recent consumer survey, median inflation expectations in October increased to 5.7% for the coming year, the highest level ever recorded since the series began in 2013.
A measure of investors’ expectation for inflation over the next five years has spiked in recent months.

The difference between the yields on five-year Treasury inflation-protected securities, or TIPS, and the corresponding Treasury notes hit 3.17 on Wednesday, its highest level since at least 2003. That effectively means that investors think inflation will average about 3% over the next five years.
The recent uptick in market-based inflation expectations drew the attention of Federal Reserve officials during their November policy meeting. Their meeting minutes, released Wednesday, showed that some central bankers considered the jump as evidence that rising inflation forecasts are starting to go mainstream.
“A couple of participants pointed to increases in survey- and market-based indicators of expected inflation—including the notable rise in the five-year TIPS-based measure of inflation compensation—as possible signs that inflation expectations were becoming less well anchored,” the Fed minutes read.
“I’ve been teaching my students the model that would have helped them predict inflation this year. And that model is that, if you’re way short in demand, then extra demand can help,” he said.
“But if you try to push it too far, you run into a supply constraint,” he continued. “You’ll end up with higher prices rather than higher quantities.”

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A key measure of inflation showed consumer prices rising at the fastest pace in three decades, as energy prices and demand for goods and services soared, posing a challenge to both the White House and the Federal Reserve.Prices climbed by 5 percent in the 12 months through October, according to Personal Consumption Expenditures price index data released Wednesday. That was the fastest pace of increase since 1990.The gauge was lifted by a 30.2 percent annual increase in the price of energy and a 4.8 percent increase in the price of food. Prices rose 0.6 percent from September to October, as supply chain disruptions continued to clamp down on the availability of certain products and components.Inflation is increasing at its fastest pace in three decades.Personal Consumption Expenditures index, percent change from a year prior

The Federal Reserve wants inflation to average 2 percent annually over time.Source: U.S. Bureau of Economic AnalysisBy The New York TimesThe increases were in line with what analysts had expected, but the rise in the Federal Reserve’s preferred inflation gauge will only add pressure on the central bank to take quicker action to maintain stable prices.Price increases have shown few signs of fading, as some officials in the Biden administration and at the Fed argued they would earlier this year. The central bank is facing growing calls to hasten plans to end their stimulative bond-buying program and to begin to raise interest rates, a process that could risk slowing job gains and economic growth.While inflation has soured consumer sentiment and weighed on Mr. Biden’s approval ratings, those price increases have been spurred in part by a strong economic recovery. Separate data released by the Labor Department on Wednesday found that initial jobless claims dropped to their lowest point since 1969, falling by 71,000 to 199,000 last week.Mr. Biden hailed the drop in unemployment claims on Wednesday but conceded that the country was still far from a full recovery and that it had to address rising inflation.“We have more work to do before our economy is back to normal, including addressing prices increases that hurt Americans’ pocketbooks and undermine gains in wages and disposable income,” Mr. Biden said in a statement on Wednesday.In an attempt to drive down gas prices, the United States and five other world powers announced a coordinated effort on Tuesday to tap into their national oil stockpiles. Mr. Biden has ordered the Energy Department to release 50 million barrels of crude in the Strategic Petroleum Reserve, lower than what traders had expected from the emergency stockpile, which is the biggest in the world with 620 million barrels.Consumers have grown increasingly concerned about the spike in prices. A survey from the University of Michigan released on Wednesday found that consumers expressed less optimism in November than at any other time in the past decade about prospects for their finances and the overall growth of the economy. The decline in consumer sentiment was a result of the rapid increase in inflation and the lack of federal policies that would address the damage to household budgets, according to the report. More

FREMONT, Calif. — Harris Mojadedi’s parents fled Afghanistan’s communist revolution four decades ago and arrived as refugees in this San Francisco suburb in 1986, lured by the unlikely presence of a Farsi-speaking doctor and a single Afghan grocery store.Over the decades, as more refugees settled in Fremont, the eclectic neighborhood became known as Little Kabul, a welcoming place where Mr. Mojadedi’s father, a former judge, and his wife could both secure blue-collar jobs, find an affordable place to live and raise their children surrounded by mosques, halal restaurants and thousands of other Afghans.“When I went to school, I saw other Afghan kids. I knew about my culture, and I felt a sense of, like, that my community was part of Fremont,” Mr. Mojadedi recalled recently over a game of teka and chapli kebabs during lunch with other young Afghans from the area.But now, as the United States begins to absorb a new wave of refugees who were frantically evacuated from Kabul in the final, chaotic days of America’s 20-year war in Afghanistan, it is far from clear that a place like Fremont would be an ideal destination for them. Housing in the Bay Area city is out of reach, with one-bedroom apartments going for more than $2,500 a month. Jobs can be tougher to get than in many other parts of the country. The cost of living is driven up by nearby Silicon Valley. Even longtime residents of Little Kabul are leaving for cheaper areas.The alternative is to send the refugees to places like Fargo, N.D., or Tulsa, Okla., where jobs are plentiful, housing is cheap and mayors are eager for new workers.But those communities lack the kind of cultural support that Mr. Mojadedi experienced. The displaced Afghans would most likely find language barriers, few social services and perhaps hostility toward foreigners. Already, there are signs of a backlash against refugees in some of the states where economic statistics suggest they are needed most.Homaira Hosseini is a lawyer and Afghan refugee who grew up in Little Kabul.Gabriela Bhaskar/The New York TimesHarris Mojadedi’s parents fled Afghanistan after its communist revolution four decades ago and settled in Little Kabul.Gabriela Bhaskar/The New York TimesHousing is out of reach for many in Fremont, with small apartments going for more than $2,500 a month. Gabriela Bhaskar/The New York Times“Are we setting them up to fail there?” Homaira Hosseini, a lawyer and Afghan refugee who grew up in Little Kabul, asked during the lunch. “They don’t have support. Or are we setting them up to fail in places where there aren’t any jobs for them, but there is support?”That is the difficult question facing President Biden’s administration and the nation’s nonprofit resettlement organizations as they work to find places to live for the newly displaced Afghans. As of Nov. 19, more than 22,500 have been settled, including 3,500 in one week in October, and 42,500 more remain in temporary housing on eight military bases around the country, waiting for their new homes.Initial agreements between the State Department and the resettlement agencies involved sending 5,255 to California, 4,481 to Texas, 1,800 to Oklahoma, 1,679 to Washington, 1,610 to Arizona, and hundreds more to almost every state. North Dakota will get at least 49 refugees. Mississippi and Alabama will get at least 10.Where the refugees go from there is up to the resettlement agencies in each state. Sometimes, refugees will ask to live in communities where they already have family or friends. But officials said that many of the displaced Afghans who arrived this summer had no connection to the United States.Many of the Afghan refugees who arrived in the U.S. this summer had no friends or family in the country.Kenny Holston for The New York Times“These folks are coming at a time when the job market is very good,” said Jack Markell, the former Democratic governor of Delaware who is overseeing the resettlement effort. “But they’re also coming here at a time when the housing market is very tight.”.css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-3btd0c{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-3btd0c{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-3btd0c strong{font-weight:600;}.css-3btd0c em{font-style:italic;}.css-1kpebx{margin:0 auto;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-family:nyt-cheltenham,georgia,’times new roman’,times,serif;font-weight:700;font-size:1.375rem;line-height:1.625rem;}@media (min-width:740px){#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-size:1.6875rem;line-height:1.875rem;}}@media (min-width:740px){.css-1kpebx{font-size:1.25rem;line-height:1.4375rem;}}.css-1gtxqqv{margin-bottom:0;}.css-1g3vlj0{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-1g3vlj0{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-1g3vlj0 strong{font-weight:600;}.css-1g3vlj0 em{font-style:italic;}.css-1g3vlj0{margin-bottom:0;margin-top:0.25rem;}.css-19zsuqr{display:block;margin-bottom:0.9375rem;}.css-12vbvwq{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;}@media (min-width:740px){.css-12vbvwq{padding:20px;width:100%;}}.css-12vbvwq:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-12vbvwq{border:none;padding:10px 0 0;border-top:2px solid #121212;}.css-12vbvwq[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-12vbvwq[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-12vbvwq[data-truncated] .css-5gimkt:after{content:’See more’;}.css-12vbvwq[data-truncated] .css-6mllg9{opacity:1;}.css-qjk116{margin:0 auto;overflow:hidden;}.css-qjk116 strong{font-weight:700;}.css-qjk116 em{font-style:italic;}.css-qjk116 a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;text-underline-offset:1px;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:visited{color:#326891;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:hover{-webkit-text-decoration:none;text-decoration:none;}“Our job is to provide a safe and dignified welcome and to set people up for long-term success,” he said. “And that means doing everything we can to get them to the places where it’s affordable, where we connect them with jobs.”For Mr. Biden, failure to integrate the refugees successfully could play into the hands of conservatives who oppose immigration — even for those who helped the Americans during the war — and claim the Afghans will rob Americans of jobs and bring the threat of crime into communities. After initially welcoming the refugees, the Republican governor of North Dakota has taken a harder line, echoing concerns of his party about vetting them.Haomyyn Karimi, a former refugee who has been a baker at an Afghan market in Little Kabul for thirty years, choked up at the thought of another generation of Afghan refugees struggling to build a new life in the face of financial difficulty and discrimination.“They had lives in Afghanistan,” Mr. Karimi said through an interpreter during a brief interview at the Maiwand Market in downtown Fremont. “Their money was in banks in Afghanistan that are no longer available to them. So they’re literally starting with nothing.”Haomyyn Karimi, center, has been a baker at an Afghan market in Little Kabul for thirty years.Gabriela Bhaskar/The New York Times‘They need to find workers.’The refugees are arriving at a moment of severe economic need — labor shortages across the country mean that communities are desperate for workers. In Fargo, where the unemployment rate is 2.8 percent, many restaurants have to close early because they can’t find enough workers.“Everybody’s looking for people,” said Daniel Hannaher, the director of the Fargo resettlement office for the Lutheran Immigration and Refugee Service, which expects to receive several dozen refugees soon. “And, you know, it’s getting to the point now where everybody’s mad about the restaurants.”The same is true in Tulsa, where the unemployment rate is 3.5 percent and dropping. G.T. Bynum, the city’s Republican mayor, told Public Radio Tulsa that he’s eager for the new refugees to see that Tulsa “is a city where we help each other out, whether you’ve lived here your whole life or you just got off the plane from Afghanistan.”Financial help for the Afghan refugees flows through the resettlement agencies in the form of a one-time payment of up to $1,225 per person for food assistance, rent, furniture and a very small amount of spending money. An additional $1,050 per person is sent to resettlement agencies to provide English classes and other services.Because refugees are authorized to work in the United States, much of the help is directed toward helping them find a job, Mr. Markell said. Refugees are also eligible to receive Medicaid benefits and food stamps.Historically, refugees have quickly gotten to work in the U.S., without taking jobs from Americans.About one in five new refugees to the United States finds employment in the first year of arrival in the country, a high rate among wealthy nations, according to a paper published by a trio of researchers at University College London last year in the Journal of Economic Perspectives. Employment rates for refugees to America jump sharply in the years that follow.Sayed Mahboob, right, an elementary school teacher in Sacramento, Calif., often helps more recent Afghan transplants with paperwork as they settle in the U.S.Gabriela Bhaskar/The New York TimesAriana Sweets Inc. is a family-owned business in the Fremont area specializing in Afghan and Middle Eastern food.Gabriela Bhaskar/The New York TimesWorkers have been slow to return to jobs or industries they left in the pandemic, leaving many restaurants and retail stores desperate to hire.Gabriela Bhaskar/The New York TimesCritics of high levels of refugee acceptance, including top officials in the White House under former President Donald J. Trump, contend that refugees compete with American workers — particularly for low-wage jobs — and dramatically reduce how much those existing workers earn.The vast majority of empirical economic research finds that isn’t true. An exhaustive report published by the office of the chief economist at the State Department examined settlement patterns of past refugees to the United States, comparing the economic outcomes of areas where they did and did not settle. It found “robust causal evidence that there is no adverse long-term impact of refugees on the U.S. labor market.”If anything, economists say, the current labor market makes it even less likely that refugees would steal jobs or suppress wages for people already here. U.S. employers reported more than 10 million job openings nationwide in August, down slightly from a record 11 million in July. Workers have been slow to return to jobs or industries they left in the pandemic, leaving many restaurants and retail stores desperate to hire.Few, if any, previous waves of refugees have entered the country with such high labor demand across the country, or with the lure of worker-parched areas that could offer relatively high starting salaries for even inexperienced staff.And places like Fargo and Tulsa offer cheaper housing, too. The average rent for a one-bedroom apartment in Fargo is $730 a month, less than a third of what it is in Fremont. The average rent in Tulsa is $760.A donation center at the Matt Jimenez Community Center in Hayward, Calif.Gabriela Bhaskar/The New York Times‘Support is critical’But some have concerns about sending the Afghans to places where there are few familiar faces and prejudice is more common.Understand the Taliban Takeover in AfghanistanCard 1 of 6Who are the Taliban? More

Worries about inflation dominated the Federal Reserve’s November policy meeting, with some policymakers suggesting that the central bank should move more quickly to reduce its bond-buying program in order to give it flexibility to raise interest rates sooner if necessary, minutes from the Fed’s November meeting showed.The Fed has been buying $120 billion in bonds each month and has kept interest rates near zero, policy moves that have helped make borrowing cheap and keep money flowing through the economy. Earlier this month, the Fed took the first step toward withdrawing support for the economy when it announced that it would begin scaling back its Treasury bond and mortgage-backed security purchases by $15 billion a month starting in November.“Some participants suggested that reducing the pace of net asset purchases by more than $15 billion each month could be warranted so that the committee would be in a better position to make adjustments to the target range for the federal funds rate, particularly in light of inflation pressures,” the minutes showed, referring to the Federal Open Market Committee, which sets interest rates.Those comments reflected uncertainty at the central bank over how long supply chain kinks and elevated prices might continue. Fed officials maintained their expectation that inflation would diminish “significantly during 2022,” but policymakers “indicated that their uncertainty regarding this assessment had increased.”“Many participants pointed to considerations that might suggest that elevated inflation could prove more persistent,” officials said..css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-3btd0c{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-3btd0c{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-3btd0c strong{font-weight:600;}.css-3btd0c em{font-style:italic;}.css-1kpebx{margin:0 auto;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-family:nyt-cheltenham,georgia,’times new roman’,times,serif;font-weight:700;font-size:1.375rem;line-height:1.625rem;}@media (min-width:740px){#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-size:1.6875rem;line-height:1.875rem;}}@media (min-width:740px){.css-1kpebx{font-size:1.25rem;line-height:1.4375rem;}}.css-1gtxqqv{margin-bottom:0;}.css-19zsuqr{display:block;margin-bottom:0.9375rem;}.css-12vbvwq{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;}@media (min-width:740px){.css-12vbvwq{padding:20px;width:100%;}}.css-12vbvwq:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-12vbvwq{border:none;padding:10px 0 0;border-top:2px solid #121212;}.css-12vbvwq[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-12vbvwq[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-12vbvwq[data-truncated] .css-5gimkt:after{content:’See more’;}.css-12vbvwq[data-truncated] .css-6mllg9{opacity:1;}.css-qjk116{margin:0 auto;overflow:hidden;}.css-qjk116 strong{font-weight:700;}.css-qjk116 em{font-style:italic;}.css-qjk116 a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;text-underline-offset:1px;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:visited{color:#326891;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:hover{-webkit-text-decoration:none;text-decoration:none;}Inflation has picked up over the past year, posing a challenge for the Fed, which is responsible for maintaining stable prices and fostering maximum employment. Prices have continued to surge since the Fed’s last meeting, a trajectory that could push policymakers to reduce their economic support more quickly than previously expected.Inflation has climbed as supply-chain snarls, soaring demand for goods and wage hikes have pushed prices higher; policymakers noted that increased rent and energy prices have also played a role. Inflation has become a persistent issue for the White House, depressing President Biden’s approval ratings and complicating the path to a full economic recovery from the pandemic.Data released on Wednesday showed that prices were rising at the fastest pace in three decades as consumers face higher prices for gas and food. Prices climbed by 5 percent in the 12 months through October, according to the Personal Consumption Expenditures index, the Fed’s preferred measure of inflation.Richard H. Clarida, the Fed’s vice chair, hinted last week that it could be appropriate for policymakers to consider speeding up their process of slowing bond purchases at their next gathering, saying that he will be looking “closely at the data that we get between now and the December meeting.”Mary Daly, the president of the Federal Reserve Bank of San Francisco, told Yahoo Finance this week that she would be open to supporting a quicker end to the bond-buying program if economic trends did not improve.Understand the Supply Chain CrisisCard 1 of 5Covid’s impact on the supply chain continues. More