Evelyn Reynolds

It’s just 60 miles from El Dorado Dairy in Ontario, Calif., to the nation’s largest container port in Los Angeles. But the farm is having little luck getting its products onto a ship headed for the foreign markets that are crucial to its business.The farm is part of one of the nation’s largest cooperatives, California Dairies Inc., which manufactures milk powder for factories in Southeast Asia and Mexico that use it to make candy, baby formula and other foods. The company typically ships 50 million pounds of its milk powder and butter out of ports each month. But roughly 60 percent of the company’s bookings on outbound vessels have been canceled or deferred in recent months, resulting in about $45 million in missed revenue per month.“This is not just a problem, it’s not just an inconvenience, it’s catastrophic,” said Brad Anderson, the chief executive of California Dairies.A supply chain crisis for imports has grabbed national headlines and attracted the attention of the Biden administration, as shoppers fret about securing gifts in time for the holidays and as strong consumer demand for couches, electronics, toys and clothing pushes inflation to its highest level in three decades.Yet another crisis is also unfolding for American farm exports.The same congestion at U.S. ports and shortage of truck drivers that has brought the flow of some goods to a halt has also left farmers struggling to get their cargo abroad and fulfill contracts before food supplies go bad. Ships now take weeks, rather than days, to unload at the ports, and backed-up shippers are so desperate to return to Asia to pick up more goods that they often leave the United States with empty containers rather than wait for American farmers to fill them up.The National Milk Producers Federation estimates that shipping disruptions have cost the U.S. dairy industry nearly $1 billion in the first half of the year in terms of higher shipping and inventory costs, lost export volume and price deterioration.“Exports are a huge issue for the U.S. right now,” said Jason Parker, the head of global trucking and intermodal at Flexport, a logistics company. “Getting exports out of the country is actually harder than getting imports into the country.”Agriculture accounts for about one-tenth of America’s goods exports, and roughly 20 percent of what U.S. farmers and ranchers produce is sent abroad. The industry depends on an intricate choreography of refrigerated trucks, railcars, cargo ships and warehouses that move fresh products around the globe, often seamlessly and unnoticed.U.S. farm exports have risen strongly this year, as the industry bounces back from the pandemic and benefits from a trade deal with China that required purchases of American agricultural products. Strong global demand for food and soaring commodities prices have lifted the value of U.S. agricultural exports more than 20 percent over last year.Still, exporters say they are leaving significant amounts of money on the table as a result of supply chain problems. And many farmers are now struggling to keep up with soaring costs for materials like fertilizer, air filters, pallets and packaging, as well as find farmhands and drivers to move their goods.A survey by the Agriculture Transportation Coalition, which represents exporters, found that 22 percent of foreign agriculture sales on average were being lost as a result of transportation challenges.Delays at ports have particularly hurt products that move in corrugated metal containers, like cheese, butter, meat, walnuts and cotton.One company, Talmera USA Inc., which exports milk powder, cheese and dairy ingredients like lactose, had a shipment delayed so many times that its load finally wound up on the original vessel it was assigned to after the ship had left the port in Seattle, circumnavigated Asia and returned weeks later.Mr. Anderson said that his company’s customers were beginning to look to suppliers in Europe, New Zealand and other countries for their purchases, even though the U.S. dairy industry has a reputation for high quality. “Frankly none of that matters to the customer if we can’t get it there,” he said.Part of the problem is that shipping companies are able to charge far more to ferry goods from Asia to the United States than vice versa, so they don’t want to waste time waiting for a less lucrative load departing from the West Coast.According to data from Freightos, an online freight marketplace, the cost to ship a 40-foot container from Asia to the U.S. West Coast soared to $18,730 in November — more than 17 times what it cost to make the reverse trip.As a result, more than 80 percent of the 434,000 20-foot containers exported out of the Port of Los Angeles in September were empty — up from about two-thirds in September 2020 and September 2019.Mario Cordero, the executive director of the Port of Long Beach, said that the price differential encouraged shipping companies to get their containers “back to Asia A.S.A.P. so you can load it with import items.”“And unfortunately the American exporter is impacted by this approach,” he said.El Dorado is part of one of the nation’s largest cooperatives, California Dairies, which manufactures milk powder for factories in Southeast Asia and Mexico.Adam Perez for The New York TimesThe company ships more than a thousand 20-foot containers of dairy products out of the country each month.Adam Perez for The New York TimesIn recent months, up to 60 percent of the company’s bookings on outbound vessels have been canceled.Adam Perez for The New York TimesA supply crunch in the trucking industry is also affecting farmers, as truckers find better pay and hours delivering holiday gifts than hauling soybeans and swine.Tony Clayton, the president of Clayton Agri-Marketing Inc., in Jefferson City, Mo, exports live animals around the world for breeding. He said the company is competing at both ports and airports for space for dairy heifers, swine and goats. And many livestock truckers have found that they can earn more hauling dry freight.“It is a challenge,” Mr. Clayton said. “We’re all fighting and competing for those people who will sit behind the steering wheel.”The infrastructure bill that Congress passed on Nov. 5 aims to remedy supply chain backlogs by investing $17 billion in American ports, many of which rank among the least efficient in the world.The bill also includes funding to improve railways, roads and waterways, as well as a provision to fund pop-up container yards outside the Port of Savannah, in Georgia, to ease congestion. It will also lower the minimum age of truckers who can cross state lines to 18, in a bid to attract more workers to a profession that has become a key bottleneck in supply chains.In September, the U.S. Department of Agriculture also announced it would dispense $500 million to help farmers deal with transportation challenges and rising materials costs.John D. Porcari, the Biden administration’s port envoy, said farm exports are a “primary focus” for the administration, and that the White House was trying to encourage private sector companies, including ocean carriers, to get the supply chain moving.The White House held a round table with agricultural exporters on Friday, and Mr. Porcari plans to visit the Port of Oakland, in California, one of the biggest export points for agriculture, this week.“We know that some sectors have had more trouble than others, and we’re working to eliminate those bottlenecks,” Mr. Porcari said in an interview. While agricultural exporters have welcomed long-term infrastructure investments, they remain concerned about more immediate losses. Mr. Anderson — whose company is responsible for nearly 10 percent of America’s milk supply and a fifth of American butter production — said he had been frustrated that much of the public dialogue from the government and in the media had focused more on consumer imports.“Are we going to get toys for Christmas? Are we going to get chips for automobiles? We think those are real concerns and they need to be talked about,” he said. “What’s not being talked about is the long-term damage being done to exporters in the world market and how that’s going to be devastating to our family farms.”El Dorado is a third-generation dairy. Delayed and canceled shipments are having a devastating impact on farmers’ finances.Adam Perez for The New York TimesIncreased costs for gasoline, trucking and warehouse storage are also contributing to food price inflation.Adam Perez for The New York TimesIt has been difficult for farmers, who must negotiate contracts in advance, to pass on higher costs for fuel, fertilizer, pallets and other products.Adam Perez for The New York TimesAgricultural exporters have had to get creative to bypass congested ports and warehouses. Mr. Anderson said his company was considering rerouting some shipments more than a thousand miles to the port in Vancouver.Mike Durkin, the chief executive of Leprino Foods Company, the world’s largest maker of mozzarella cheese, told House lawmakers this month that nearly all of the company’s 2021 ocean shipments had been canceled and rebooked for a later date. More than 100 of the company’s bookings this year had been canceled and rebooked 17 times, Mr. Durkin said, equating to a five-month delay in delivering their cheese.In the interim, Leprino Foods has had to pay to hold its cheese in refrigerated containers in carrier yards, racking up an additional $25 million in fees this year. More

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Number of People Who Left Their Jobs Voluntarily by Month
Note: Seasonally adjusted. Voluntary quits exclude retirements.Source: Bureau of Labor StatisticsBy The New York TimesEmployers are still struggling to fill millions of open jobs — and to hold on to the workers they already have.More than 4.4 million workers quit their jobs voluntarily in September, the Labor Department said Friday. That was up from 4.3 million in August and was the most in the two decades the government has been keeping track. Nearly a million quit their jobs in the leisure and hospitality industry alone, reflecting the steep competition for workers there as businesses recover from last year’s pandemic-induced shutdowns.There were 10.4 million job openings in the United States at the end of September. That is down a bit from the record 11.1 million posted in July, before the spread of the Delta variant of the coronavirus led to a slump in sales in some businesses. But demand for labor remains extraordinarily high by historical standards — before the pandemic, the record for job openings in a month was 7.6 million in November 2018. The Labor Department revised its estimate of job openings in August to 10.6 million.There were roughly 75 unemployed workers for every 100 job openings in September, the lowest ratio on record. Separate data released last week by the Labor Department showed that job growth rebounded in October but that the labor force barely grew.“You’re essentially seeing demand continuing to increase without an offsetting increase in talent,” said Ryan Sutton, a district director for Robert Half International, a staffing firm. “Until some new talent comes in, until we get employees who are on the sidelines back into the market, it’s very likely this is going to continue.”A hiring sign at a store in Manhattan. There were 10.4 million job openings in the United States at the end of September.Jeenah Moon for The New York TimesEconomists cite a number of reasons for the slow return. The pandemic is still disrupting child care, making it hard for some parents to work; other workers are worried about contracting the virus or spreading it to high-risk family members. Many Americans have also built up their savings during the pandemic, allowing them to be choosier about jobs..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;}Those factors are likely to ease as the pandemic ebbs and savings dwindle. But other shifts could prove more lasting. In a research note published Friday, economists at Goldman Sachs observed that roughly two-thirds of the people who had left the labor force during the pandemic were over 55; many of them have retired and are unlikely to go back to work.The labor crunch is giving workers the upper hand in negotiations. Wages have risen sharply in recent months, particularly in service jobs, although in other industries pay is lagging behind the pace of inflation.The recent rise in the number of workers quitting suggests that many are taking advantage of their leverage to accept better-paying jobs, or to look for them. At the same time, understaffing in many businesses may be putting stress on remaining workers, leading even more people to leave their jobs. Industries that require most employees to work in person, such as manufacturing, retail and health care — as well as leisure and hospitality — report the biggest increases in the rate of workers leaving their jobs.“We are seeing big pickups in quits in the industries that are having the hardest time hiring right now,” said Nick Bunker, director of economic research for the job site Indeed.Kaylie Sweeting worked as a bartender in Millburn, N.J., through most of the pandemic, despite concerns about interacting with unmasked customers and frustration about low wages. But when the restaurant pressured a colleague to come to work sick this summer, Ms. Sweeting quit.“The job was absolutely no longer worth it,” she said. “I was hurt that a company that I gave my time to did not seem to prioritize me or my safety.”So Ms. Sweeting, 23, and her partner, a cook, decided to take the money they had saved to buy a house and open their own vegan restaurant instead. They recently signed a lease and are beginning renovations, with plans to open early next year. They are trying to apply the lessons they have learned as employees, promising good wages, paid time off and other basic benefits that restaurant jobs have often failed to provide.“I genuinely love the industry,” Ms. Sweeting said. “I just don’t love the way it’s managed. I feel like the only way to change it is to implement the change yourself.” More

The University of Michigan Consumer Sentiment Index tumbled to 66.8 for November, representing the lowest level in 10 years.
Inflation concerns weighed on consumers, with 1 in 4 reporting scaled-back standards of living.
A separate report showed that more than 4.4 million workers left their jobs, a fresh record.

A pedestrian walks by a now hiring sign at a Lamps Plus store on September 16, 2021 in San Francisco, California.
Justin Sullivan | Getty Images

Consumer confidence hit a 10-year low in November as inflation climbed to the highest levels since the early 1990s, complicating efforts from policymakers to sell the case that the current surge of price increases is temporary.
The plunge in sentiment happened as workers quitting their jobs hit a fresh record in a labor market that has nearly three million more positions available than there are people looking or jobs.

In a sign of confidence in the labor market, 4.43 million people quit, part of what some have called “The Great Resignation,” the Labor Department reported Friday. That number topped August’s 4.27 million and bought the quits rate as a percentage of the labor force to 3%, also a record.
At the same time, the University of Michigan Consumer Sentiment Index tumbled to 66.8 for November, according to a preliminary reading Friday. That was the lowest since November 2011 and well below the Dow Jones estimate of 72.5. October’s reading was 71.7, meaning that the November level represented a 6.8% drop.
The survey showed consumers expecting still-higher rates of inflation, with the 12-month forecast nudging up to 4.9%.
“Consumer sentiment fell in early November to its lowest level in a decade due to an escalating inflation rate and the growing belief among consumers that no effective policies have yet been developed to reduce the damage from surging inflation,” said Richard Curtin, the survey’s chief economist.
The survey showed 1 in 4 consumers reducing their living standards due to price increases, while half of all families anticipated lower real income in the year ahead when adjusted for inflation.

Seemingly robust increases in average hourly earnings, which rose 4.9% in October from a year ago, still have not kept pace with inflation, bringing real wages down by 1.2% from the same period in 2020.
“Rising prices for homes, vehicles, and durables were reported more frequently than any other time in more than half a century,” Curtin added.
The gauge also indicated a low level of belief that policymakers are acting appropriately to handle inflation, which ran at a 6.2% rate for October, according to the consumer price index released Wednesday.

The news on consumer sentiment comes with President Joe Biden’s popularity levels dropping as consumers increasingly worry about inflation.
Earlier this week, the White House rolled out a few proposals to try to help, including trying to alleviate cargo backlogs at major ports. Tie-ups in supply chains are helping drive the price increases, as is strong demand from consumers and escalating gas prices as the administration has sought to clamp down on fossil fuels.
The Federal Reserve faces a similar dilemma as it seeks to meet its mandate for price stability without raising interest rates. Central bank officials said last week they expect to start withdrawing their policy support, but only incrementally with small reductions in monthly bond purchases until the program is finished, likely by early summer 2022.
Republican critics blame the trillions in government spending and loose Fed policy for helping fan the inflation fire. Both Biden and Fed Chairman Jerome Powell have said they expect the inflationary pressures to ease later next year.

Job quits hit a record

Despite the continued decline in how people feel about the economy, workers again left their jobs in record numbers during September.
The September total was 1.1 million higher for the same month a year ago, when the quits rate was just 2.3%.
At the industry level, the quits rate for leisure and hospitality rose to 6.4%, a 0.3 percentage point gain from a month ago and owing to a big jump in arts, entertainment and recreation, which surged to 5.7% from 3.2%. Accommodation and food services held steady at 6.6%, the highest of any industry, as is typical.
Those who have quit their jobs this year largely have gone onto positions with higher salaries.
The Atlanta Fed’s wage growth tracker shows pay up 3.6% overall in September from a year ago, with job switchers seeing a 4.3% increase. Gains have been skewed to higher earners, with the top quartile seeing a 12-month increase of 4.9%.
Hires totaled 6.46 million for the month, a slight decline from August.
That exodus from current positions came as available jobs remained elevated.
The Labor Department in its Job Openings and Labor Turnover Survey said there were 10.44 million employment openings, well above the 7.68 million people looking for jobs in September. JOLTS data runs a month behind the department’s widely watched nonfarm payrolls report.
Job openings in September were expected to total 10.46 million, according to FactSet.

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Americans have turned decidedly gloomy about their financial outlook, and inflation is the main cause of the anxiety, according to a survey released Friday.The University of Michigan reported that its survey of consumer sentiment fell to its lowest level in a decade in early November. It attributed the decline to “the growing belief among consumers that no effective policies have yet been developed to reduce the damage from surging inflation.”Hampered by supply chain disruptions and labor shortages in some industries, the economy has been straining under rising prices. The government this week reported the steepest inflation in 31 years, with a 6.2 percent increase in prices in October from a year earlier.In the Michigan survey, “rising prices for homes, vehicles and durables were reported more frequently than any other time in more than half a century.” But inflation is hardly limited to big-ticket purchases — food items like meat are getting more expensive, driving up the cost of preparing Thanksgiving meals.Many policymakers have assumed that higher inflation would be transitory, a result of the uneven reopening of the economy after widespread shutdowns because of the coronavirus pandemic.Investors, too, have shrugged off the threat of inflation, even though it can erode the value of financial assets. Bond yields, which move higher in times of inflation, remain low by historical standards. And the stock market is near record highs, despite the uptick in prices lately.But the Michigan survey is a sign that consumers are beginning to feel pinched. The survey reflected a downturn in assessments of both current conditions and economic prospects.“Consumers are angry about inflation,” said Diane Swonk, chief economist at the accounting firm Grant Thornton in Chicago.“Inflation will get worse before it gets better,” Ms. Swonk said. “It could moderate by the spring of 2022, and it does affect how people feel about the economy.”But consumers in the United States continue to spend at robust levels, she said, and the odds look good for a robust holiday shopping season. More

A record-high 4.4 million people, or 3% of workers, quit their job in September, according to the Labor Department’s latest Job Openings and Labor Turnover Survey released Friday.
The tight market, where workers have more leverage to move around and employers are doing everything they can to staff up, is already impacting the holiday shopping season, ZipRecruiter chief economist Julia Pollak tells CNBC Make It.

And there’s reason to believe quitting will continue well into 2022.

Where people are quitting

High turnover is primarily concentrated in essential frontline industries where jobs can’t be done remotely. Some of September’s biggest losses come from the already strained leisure and hospitality, retail, manufacturing and health services industries. People left their jobs fastest in the Southern region of the country.
With the pace of quitters, Pollak says, “employers are basically having to replace their entire staff in just a couple of months. It’s really quite dramatic.”
Quits increased the most in arts, entertainment and recreation (like people who staff live events); other services (which ranges from auto workers to hairstylists to laundry workers); and local and state government jobs.
So far, roughly 34.4 million people have quit their jobs this year, with more than 24 million doing so since April. By comparison, 36.3 million people quit their job in all of 2020.

Where the jobs are

The Labor Department reported 10.4 million job openings in September, consistent with previous months, with the largest increases in health care and social assistance; state and local government, excluding education; wholesale trade; and information roles.
But high job openings paired with high quits rates is leading to what Emsi Burning Glass senior economist Ron Hetrick refers to as a game of musical chairs. Employers in strained industries are fighting for the same workers who are quitting at record rates.
As of September, there were seven unemployed workers for every 10 job openings — a record low — giving people the upper hand in being choosy with their next role. Of course, those are nationwide averages. Hetrick says some markets, especially in the South and West, could have even fewer available workers for every job opening.
The largest gaps in openings versus available workers remain in health care, transportation and warehousing jobs that require in-person work and where the risk of contracting Covid-19 remain high, Pollak says.
The U.S. labor market added 531,000 jobs in October, an improvement from a sluggish September, led by roles in leisure and hospitality; professional and business services; manufacturing; and transportation and warehousing.

The tight labor market could impact the holidays

Businesses are doing everything they can to staff up for the holiday shopping season, including offering flashy hiring bonuses, retirement benefits, tuition assistance and other perks not usually offered to lower-wage workers, Pollak says.
Still, it may not be enough to get people into the workforce to keep pace with skyrocketing consumer demand. Already, airlines are having to cut flights and manufacturers are signaling shipping delays due in part to staffing shortages.
The high consumer demand paired with labor shortages is creating a “traffic jam” that will continue into the holiday season, Pollak says. Workers willing to take on seasonal, often in-person work, could benefit from higher wages and attractive benefits: “That huge additional demand is putting enormous strain on employers to expand their capacity in a constrained labor market,” Pollak says.

Will the Great Resignation cool off in 2022?

The current period of historic turnover can be “an exciting moment for job seekers who are benefiting from employers offering hiring incentives and reducing their requirements” or time to hire, Pollak says.
People who change jobs are seeing faster wage growth than people who stay. And hiring incentives, along with a pandemic-low unemployment rate, could encourage people not in the labor force to re-enter while the market is hot.
But with the quits rate 30% higher today than it was in February 2020, Hetrick doesn’t expect record turnover to cool before the end of the year. He has his eye on the labor force participation rate, or a measure of how many people are working or actively looking for work, which has held steady for months at 61.6%, down 1.7 percentage points from pre-pandemic levels.
There are 5 million fewer people in the labor market today than there were prior to the pandemic. Hetrick expects more will re-enter the labor force as their personal savings rates, buoyed by stimulus funds, runs down, possibly as early as the spring of 2022.
“You’re seeing an economy where leaders have rushed to adapt by raising wages,” Pollak says, “and followers slower to adapt, due to regulation or institutional arrangements, will be under enormous pressure to make changes to catch up. As they play catch-up, you’ll see more demand for workers, and exciting outside opportunities for workers who can quit.”
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The Biden administration has argued that its infrastructure and broader economic package will slow rapid price increases. But that will take time.Rocketing inflation has become a headache for U.S. consumers, and President Biden has a go-to prescription. He says a key way to help relieve increasing prices is to pass a $1.85 trillion collection of spending programs and tax cuts that is currently languishing in the Senate.A wide range of economists agree with the president — but only in part. They generally accept his argument that in the long run, the bill and his infrastructure plan could make businesses and their workers more productive, which would help to ease inflation as more goods and services are produced across the economy.But many researchers, including a forecasting firm that Mr. Biden often cites to support the economic benefits of his proposals, say the bill is structured in a way that could add to inflation next year, before prices have had time to cool off.Some economists and lawmakers worry about the timing, arguing that the risk of fueling more inflation when it has reached record highs outweighs the potential benefits of passing a big spending bill that could help to keep prices in check while addressing other social goals. Prices have picked up by 6.2 percent over the past year, the fastest pace in 31 years and far above the Federal Reserve’s inflation target.Others say that any near-term effect on prices would be small and easy enough for the Fed to offset later with interest rate increases, which can temper demand and cool a hot economy. They argue that potential inflationary risks are not a good reason for the Biden administration to curb its ambitions on priorities like broadening access to child care and easing the transition to cleaner energy sources.“It’s more likely a small positive for inflation in 2022, because it’s preventing a big reduction in spending that would otherwise have happened that year,” said Jason Furman, an economist at Harvard and a former chairman of the White House Council of Economic Advisers during the Obama administration. “The pros and cons of Build Back Better with regard to improvements in climate change and opportunity vastly dwarf any pros or cons on inflation.”Republicans have criticized Mr. Biden on inflation for months, seeking to derail his sprawling proposal to fight climate change, guarantee universal prekindergarten, expand access to health insurance, cap child care costs for low earners and the middle class and extend a lucrative new tax break for parents. They have argued that the bill’s spending, much of which is spread over several years, will push prices higher.Some centrist Democrats have also voiced similar concerns. A key holdout, Senator Joe Manchin III of West Virginia, has questioned whether high and rising prices should persuade lawmakers to tone down their ambitions.“West Virginians are concerned about rising inflation,” he said on Twitter last week. “We cannot throw caution to the wind & continue to pile on debt that our country can’t afford.”The bill remains in legislative limbo, with Democrats preparing to push it to a House vote as early as next week. But timing is uncertain in the Senate, where a vote is likely to be changed or delayed in response to Mr. Manchin’s concerns.The extent to which Mr. Biden’s $1.85 trillion bill exacerbates inflation largely depends on how much it stimulates the economy and whether Americans increase their spending as a result of the legislation — and when all of that occurs.Many economists say it could create a short-term stimulus because the plan is structured to raise money gradually by taxing wealthier Americans, who are less likely to spend each additional dollar they have, and redistribute it quickly to people who earn less and are more likely to spend newfound cash.Because of the difference in timing between when the government spends money and when it starts to bring in more revenue, the bill is expected to pump money into the economy in its early years. Moody’s Analytics — the firm that the White House typically cites when arguing in favor of its legislation — estimates that the government will spend $163 billion more on the package than it takes in next year. And the redistribution could make the money more potent as economic stimulus.“The spending is designed to go to the people who are more likely to spend it than to save it,” said Ben Ritz, the director of the Progressive Policy Institute’s Center for Funding America’s Future. But more than any specific program, “the bigger inflationary issue is the math.”White House economists have countered those arguments. If the bill passes, they say, it would do relatively little to spur increased consumer spending next year and not nearly enough to fully offset the loss of government stimulus to the economy as pandemic aid expires. That the program spends more heavily next year is a feature, they say, because it will partly blunt the economic drag as fiscal help fades. They note that the bill is intended to be offset completely by tax increases and other revenue savings.And they argue that by increasing the economy’s capacity to churn out goods and services, the president’s infrastructure plan and his broader program could both help to moderate costs over time.“If anything, these measures push back on inflationary pressures,” said Jared Bernstein, a member of Mr. Biden’s Council of Economic Advisers.Shoppers in New York last month. White House officials say that by increasing the economy’s capacity to churn out goods and services, the president’s plans could help moderate costs over time.Jutharat Pinyodoonyachet for The New York TimesLawrence H. Summers, the Harvard economist who loudly criticized the $1.9 trillion economic aid legislation that Mr. Biden signed this year, has said that he does not see the current plans as an inflationary threat. The infrastructure and broader spending packages are both spread over time and paid for, Mr. Summers has argued.There is less economic or political debate about Mr. Biden’s $1 trillion infrastructure plan, which cleared Congress last week and which the president will sign on Monday. Economists — including conservative ones — largely agree that it is likely to eventually expand the capacity of the economy, and that it is small and spread out enough that it will not meaningfully fuel faster inflation in the near term.Among Democrats, there is widespread support for the economic ambitions contained in the administration’s broader spending bill, which aims to create more equity for low- and middle-class earners and a bigger safety net for working parents. But the measure is drawing more complicated reviews when it comes to its immediate effect on inflation.Economists at Moody’s found in a recent analysis that the administration’s full agenda would slightly increase inflation in 2022, though they did not expect the program to ultimately raise it because of benefits that would later ease supply constraints. It estimates that with the infrastructure bill alone, inflation will be running at a 2.1 percent annual rate by the final quarter of next year. If the larger spending bill also passes, that grows to 2.5 percent.Understand the Supply Chain CrisisCard 1 of 5Covid’s impact on the supply chain continues. More

The IRS has announced higher federal income tax brackets for 2022 amid rising inflation.
And the standard deduction is increasing to $25,900 for married couples filing together and $12,950 for single taxpayers.
There are also changes to the alternative minimum tax, estate tax exemption, earned income tax credit and flexible spending account limits, among others.

The IRS announced higher federal income tax brackets and standard deductions for 2022 amid rising inflation.
The consumer price index surged by 6.2% in October compared to the previous year, the biggest jump in more than three decades.

As price hikes continue, the IRS has boosted the income thresholds for each bracket, applying to tax year 2022 for returns filed in 2023.

Standard deduction

The standard deduction, claimed by most taxpayers, will also increase for 2022, rising to $25,900 for married couples filing jointly, and to $12,950 for single filers.

Other adjustments

The IRS also made other inflation adjustments, such as changes to the alternative minimum tax, a parallel system for higher earners, and an increased estate tax exemption.

Moreover, there’s a boost for the earned income tax credit, a write-off for low- to moderate-income families, and higher flexible spending account limits, among other changes.
Workers may also save more to 401(k) plans in 2022, according to last week’s announcement. But there won’t be a higher limit for individual retirement accounts.

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As government economists work to combat soaring inflation and ease supply chain disruptions, President Biden is leaning on his natural ability to sympathize with average Americans.
“Did you ever think you’d be paying this much for a gallon of gas?” Biden asked a crowd Wednesday during a speech in Baltimore.
Yet with few concrete options available to tackle inflation, the White House is focusing much of its energy on fixing delays at major ports and other tangible supply chain issues.

U.S. President Joe Biden speaks on the bipartisan infrastructure deal at the Port of Baltimore in Baltimore, Maryland, on Wednesday, Nov. 10, 2021.
Samuel Corum | Bloomberg | Getty Images

As government economists work to find ways to combat soaring inflation and ease supply chain disruptions, President Joe Biden is leaning on his ability to sympathize with the economic fears of average Americans.
“Did you ever think you’d be paying this much for a gallon of gas?” Biden asked a crowd Wednesday during a speech in Baltimore. “In some parts of California, they’re paying $4.50 a gallon,” he said, incredulous.

Officially, the president’s speech was about how the Port of Baltimore will benefit from the infrastructure bill Biden plans to sign into law on Monday. Yet from the start, it was clear the speech was about much more than cargo ships.
“Today, I am here to talk about one of the most prescient economic concerns of the American people … and that is getting prices down, No. 1,” Biden said at the start of his speech. “No. 2, making sure our stores are fully stocked. And No. 3, getting a lot of people back to work while tracking and tackling these two above challenges.”
Inflation and supply chain issues have plagued the U.S. economy for months, but new developments this week brought fresh urgency to Biden’s remarks.
The latest inflation figures, released Wednesday morning, showed prices last month rose at the fastest rate in more than 30 years, 6.2% over October 2020. The news sent sent shivers through Wall Street.
The inflation report followed new data released Tuesday about the billions of goods “out of stock” online as consumers begin shopping for the holidays.

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“Too many people remain unsettled about the economy, and we all know why,” Biden said in Baltimore. “They see higher prices. They go to the store or go online, they can’t find what they always want, and when they want it. We’re tracking these issues and trying to figure out how to tackle them head on.”
Complicating this one-two punch for consumers is that other economic metrics show the country in the midst of a stronger-than-expected recovery.
October job growth outpaced expectations by some 80,000 jobs, while unemployment fell to a Covid pandemic-era low of 4.6%. Wages have risen 4.9% over a year ago.
But while the recovery looks strong to economists, Biden warned Wednesday that it does not look so powerful for average Americans.
“Everything from a gallon of gas to a loaf of bread costs more, and it’s worrisome even though wages are going up,” he said. “We still face challenges and we have to tackle them,” he said.
In reality, however, economists say there is little that Biden, or any president, can do to halt inflation. The roots of the current price increases lie in post-pandemic pent-up demand and global manufacturing issues.
Nonetheless, Republicans are eager to tie the current pandemic-related inflation and supply chain woes to Biden’s broader economic agenda – specifically his two major bills on infrastructure and social spending.
“Our early focus on runaway inflation and the growing supply chain crisis is hitting home with voters,” wrote Indiana GOP Rep. Jim Banks in a recent memo to fellow Republicans. “We need to keep hammering away,” said Banks, who chairs the influential Republican Study Committee.
With few concrete options available to tackle inflation, the White House is focusing much of its energy on fixing delays at major ports and other tangible supply chain issues.
On Tuesday, the administration rolled out a series of steps it is taking to address cargo backlogs at major ports, including $4 billion worth of construction at coastal ports and inland waterways. This work, led by the U.S. Army Corps of Engineers, is slated to begin within 60 days.
Increasing the supply of goods on U.S. shelves is also expected to ease some of the pressure on prices.
Long term, Biden argues that his Build Back Better agenda will put downward pressure on inflation by increasing labor participation and overall productivity. But these long-term effects will take years to impact the economy.
Right now, however, the future effect of Biden’s agenda seems to matter little to voters who are struggling to deal with sky-rocketing food and fuel prices.
Only 42% of Americans approved of Biden’s job performance in an NBC News poll in late October. The same poll revealed that 71% of voters believed the country was headed in the wrong direction.
Still, Biden insisted Wednesday that the short-term impacts of his administration’s policies would soon pay off.
“Thanks to those steps we’re taking, very soon we’re going to see the supply chain start catching up with demand,” he said. “So not only will we see more record-breaking job growth, we’ll see lower prices and faster deliveries as well.”

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