Evelyn Reynolds

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    U.S. Faces Economic Turbulence Just as Recession Fears Eased

    War in the Middle East, a strike by port workers and a devastating hurricane injected uncertainty into the U.S. economy.The United States economy is suddenly staring down new and potentially damaging crises, with tensions flaring in the Middle East and several states grappling with fallout from a devastating hurricane.The events hit just as American policymakers were gaining confidence that they had successfully tamed inflation without pushing the economy into a recession and as polls and consumer surveys suggested that Americans’ sour economic mood had begun to improve. But in just a week, new risks have emerged.The economy now faces the prospect of an oil price spike and the aftermath of a storm that could inflict more than $100 billion in damage upon large swaths of the Southeast. Economists have also been tracking potential consequences of a port workers’ strike, which was suspended on Thursday evening.“There’s new uncertainty,” said Joseph E. Gagnon, senior fellow at the Peterson Institute for International Economics. “If we lose oil output in the Middle East, if the ports are not functioning, then both are inflationary.”That uncertainty is arriving just weeks before a presidential election in which the economy — in particular, inflation — is one of the biggest factors on voters’ minds and less than a month after the Federal Reserve began cutting interest rates from more than a two-decade high. The central bank has gained confidence that inflation is coming back to its 2 percent goal, but has been wary about the labor market weakening.Even before the new risks emerged, the International Monetary Fund was projecting that the U.S. economy would slow next year.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Here’s everything to expect when the September jobs report is released Friday

    September’s jobs picture is expected to look a lot like August’s — a gradual slowdown in hiring and a modest increase in wages.
    Markets will be watching the report closely for indications as to whether the Fed will be able to loosen policy and lower interest rates in a gradual manner.
    For the past several months, labor market indicators have been trending lower, though far from off a cliff.

    Attendees at the Albany Job Fair in Latham, New York, US, on Wednesday, Oct. 2, 2024. 
    Angus Mordant | Bloomberg | Getty Images

    September’s jobs picture is expected to look a lot like August’s — a gradual slowdown in hiring from earlier this year, a modest increase in wages and a labor market that is looking a lot like many policymakers had hoped it would.
    Nonfarm payrolls are projected to show growth of 150,000, from 142,000 the month before, with a steady unemployment rate of 4.2%, according to the Dow Jones consensus. On the wage side, the forecast is for a 0.3% monthly gain and a 3.8% increase from a year ago — the annual rate being the same as August.

    Should the numbers come in as expected, they would hit close to a sweet spot allowing the Federal Reserve to continue to lower interest rates without a sense of urgency that it could be behind the curve and at risk of causing a recession.
    “The jobs market is slowing down and becoming less tight,” said Katie Nixon, chief investment officer at Northern Trust Wealth Management. “The balance of power has shifted back to employers and away from employees, and that certainly will alleviate the wage pressure, which has been a key component of inflation. We’ve been team soft-landing for a while, and this is exactly what a soft landing looks like.”
    Of course, there’s always the possibility of a substantial upside or downside surprise to the numbers. Then there are the monthly revisions that have been dramatic at times, causing the Labor Department to overcount hiring by more than 800,000 for the 12-month period through March 2024, adding uncertainty to jobs market analysis.

    “While we’re looking at 150,000 jobs added, I would not be surprised if it comes in at 50,000 and I would not be surprised if it comes in at 250,000,” said David Kelly, chief global strategist at JPMorgan Asset Management. “I don’t think people should get too freaked out either way about this number.”
    The Bureau of Labor Statistics will release the report at 8:30 a.m. While there will still be one more nonfarm payrolls count before the presidential vote next month, the October report is expected to be distorted by the dock workers’ strike as well as Hurricane Helene — making September the last “clean” report before Election Day.

    Looking for clues

    Still, markets will in fact be watching the report closely.
    Specifically, they’ll be looking for indications as to whether the Fed will be able to loosen policy and lower interest rates in a gradual manner more in keeping with prior easing cycles, or will have to repeat the dramatic half percentage point interest rate cut it implemented in September.
    At the same meeting where they approved the reduction, policymakers indicated another half percentage point, or 50 basis points, in cuts before the end of 2024 and another full percentage point in 2025. Markets, though, are pricing in a more aggressive schedule.
    “A strong number wouldn’t really change their position,” JPMorgan’s Kelly said. “A weak number could tempt them to another 50 basis points.”
    However, Kelly said the Fed is more likely to look at the employment picture as a “mosaic” rather than just an individual data point.

    The bigger picture

    For the past several months, labor market indicators have been trending lower, though far from falling off a cliff. Manufacturing and services sector surveys have pointed to slower hiring, while Fed Chair Jerome Powell earlier this week characterized the labor market as solid but softening.
    Excluding a brief slump at the onset of the Covid pandemic, the last time the monthly hiring rate was the level seen this summer — 3.3% of the labor force in both June and August — was in October 2013 when the unemployment rate was 7.2%, according to Labor Department data.
    Job openings also have fallen and pushed the ratio of available positions to unemployed workers down to 1.1 to 1, from 2 to 1 just a couple years ago.
    However, a kind of stasis has hit a labor market that not that long ago was wrestling with the “Great Resignation” as workers confident they could find better deals elsewhere left their jobs en masse.
    Excluding the pandemic gyrations in 2020, the quits rate hasn’t been lower than its current 1.9% since December 2014, while the separations rate, even including Covid, was last lower than the current 3.1% in December 2012.
    “Whatever leverage labor had, [it] has dissipated or just eased as the economy’s normalized,” said Joseph Brusuelas, chief economist at tax consultancy RSM. “So we’re going to have a lot less turnover. We’re seeing it in our business. We’re hearing it from our clients.”
    Still, had someone told Brusuelas back during the Covid tumult four years ago that the economy would be adding nearly 150,000 jobs a month now with an unemployment rate in the low 4% range, he said, “I’d have bought you a steak dinner.” More

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    Harold Daggett, Port Strike Leader, Seeks Big Raises for Dockworkers

    Harold J. Daggett is seeking big raises for longshoremen on the East and Gulf Coasts who have fallen behind workers on the West Coast.Nearly two decades ago, Harold J. Daggett was accused of being part of the mob’s efforts to control a powerful union, the International Longshoremen’s Association.He was a midlevel official of the union. After a high-profile trial, a jury acquitted him of fraud and extortion conspiracy, and he joined reveling supporters outside the Brooklyn federal courthouse. Motioning toward the building, he asked onlookers, “What doorway do I have to go through to get my reputation back?”Now, after 13 years as the union’s president, Mr. Daggett is seeking a different type of victory.He is leading a strike that began on Tuesday, shutting down most trade at a dozen big ports on the East and Gulf Coasts. The union, whose members move containers and other cargo on and off ships, is demanding much higher wages, improved benefits and limits on labor-saving technology.Mr. Daggett has cast the strike as a battle against large multinational corporations that earned outsize profits during the pandemic-related supply chain chaos. He has asserted that his 47,000 members have the upper hand because their work is essential to the automakers, retailers and other businesses that depend on the ports.“We’re going to win this thing,” Mr. Daggett, 78, said on Tuesday, along with an expletive, as members picketed outside a port terminal in New Jersey. “They can’t survive too long.”Some labor experts say Mr. Daggett is well positioned to get a good deal. “If they stop working, the goods stop moving,” said William Brucher, an assistant professor at the Rutgers School of Management and Labor Relations. “They have real economic power and leverage.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Trump and Harris Want to Revive Manufacturing, but How Much Could They Actually Do?

    The policy focus on the industry has changed from job quantity to job quality. And while federal incentives matter, local factors are more important.In recent weeks, the presidential candidates have been tussling over a familiar campaign issue in postindustrial America: how to reinvigorate manufacturing.Former President Donald J. Trump has proposed stiff tariffs on nearly all imports as a way of forcing foreign companies to make their goods in the United States, an escalation of a strategy that did not work during his term. “We’re going to take their factories,” Mr. Trump declared recently.Building on the Biden administration’s approach, Vice President Kamala Harris has promised tax credits and more apprenticeships to strengthen factory towns and invest in advanced technologies, ensuring they “are not just invented in America but built here.”In truth, no president can single-handedly control the growth of specific industries. Larger economic forces like recessions and exchange rates tend to play a much more powerful role. But some policies can help or hinder their progress.Over the last four years, policy and macroeconomic factors have combined to begin reshaping the manufacturing industry. While job growth has been flat for the past two years — as interest rates have clamped down on expansion and a strong dollar has dulled exports — shifts in the composition and location of it are underway beneath the surface.But first, a more fundamental question: Why do politicians care so much about manufacturing, anyway?Which manufacturing sectors have been growing fastest?Domestic output of semiconductors and other electrical components has expanded by 30 percent since the beginning of 2020. Other products, not as much.

    Notes: The semiconductor category includes other components. Source: Federal ReserveBy The New York TimesWhere manufacturing jobs have shifted since the pandemicBetween January 2020 and March 2024, the West Coast and Northeast have lost factory employment while many states in the Southeast have gained.

    Source: Quarterly Census of Employment and Wages, Labor DepartmentBy The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    World Braces for Bigger Trade Wars if Trump Wins

    Business owners and foreign governments are preparing for high tariffs and trade disruptions, depending on the outcome of the election.When you’re in the whiskey business, you’re always making predictions about the future.From the time grain grown around the Midwest enters Sonat Birnecker Hart’s distillery on the North Side of Chicago, it will be four to 10 years before the whiskey is shipped to buyers. So running her business requires careful projections about demand.Those calculations have become harder of late. With the U.S. presidential election looming, many businesses around the world are facing uncertainty about the future of American trade policy and the tariffs that products will face in global markets.For the whiskey industry, the stakes are particularly high. In March, a 50 percent tariff on American whiskey exports to Europe will snap into effect unless the European Union and the United States can come to an agreement to stop the levies.The outcome may depend on who is in office. Both former President Donald J. Trump and Vice President Kamala Harris have embraced tariffs, but their plans differ significantly. Ms. Harris’s campaign has said she would use tariffs in a “targeted” fashion — possibly mirroring the approach of President Biden, who recently imposed tariffs on Chinese electric vehicles, silicon chips and solar panels. Like Mr. Biden, she has emphasized working closely with allies.Mr. Trump, in contrast, has said his approach to trade would be even more aggressive than the trade wars of his first term, when he imposed stiff tariffs on allies and rivals to obtain concessions and try to bolster American manufacturing. He has proposed a 60 percent tariff on products from China and a tariff of more than 10 percent on other goods from around the world.A 50 percent tariff on American whiskey exports to Europe will take effect in March unless the United States and European Union reach an agreement.Taylor Glascock for The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Hurricane Helene Deaths Will Continue for Years, Study Suggests

    Research on hundreds of tropical storms finds that mortality keeps rising for more than a decade afterward, for reasons you might not expect.Over the past week, the official death toll from Hurricane Helene has surpassed 100 as the vortex creeping inland from Florida submerged homes and swept away cars. But the full weight of lost lives will be realized only years from now — and it could number in the thousands.A paper published in the journal Nature on Wednesday lays out the hidden toll of tropical storms in the continental United States. Looking at 501 events from 1930 to 2015, researchers found that the average tropical storm resulted in an additional 7,000 to 11,000 deaths over the 15 years that followed.Overall during the study period, tropical storms killed more people than automobile crashes, infectious diseases and combat for U.S. soldiers. It’s such a big number — especially compared with the 24 direct deaths caused by hurricanes on average, according to federal statistics — that the authors spent years checking the math to make sure they were right.“The scale of these results is dramatically different from what we expected,” said Solomon Hsiang, a professor of global environmental policy at the Doerr School of Sustainability at Stanford University, who conducted the study with Rachel Young, the Ciriacy-Wantrup postdoctoral fellow at the University of California, Berkeley.The pair used a technique that has also provided a more complete understanding of “excess deaths” caused by Covid-19 and heat waves. It works by looking at typical mortality patterns and isolating anomalies that could have been caused only by the variable under study — in this case, a sizable storm.Previously, researchers examined deaths and hospitalizations after hurricanes over much shorter periods. One study published in Nature found elevated hospitalizations among older Medicaid patients in the week after a storm. Another, in The Journal of the American Medical Association, associated higher death rates with U.S. counties hit by cyclones. A study in The Lancet found that across 14 countries, cyclones led to a 6 percent bump in mortality in the ensuing two weeks.Deaths from tropical storms in the U.S. have been spiking Fatalities connected to storms that struck as many as 15 years ago – measured as the number of deaths above what would otherwise be expected – are rising faster as storms increase in frequency.

    Source: Solomon Hsiang and Rachel YoungBy The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Private payrolls show better-than-expected growth of 143,000 in September, ADP says

    Private companies added 143,000 jobs in September, an acceleration from 103,000 in August and better than the 128,000 consensus forecast, ADP reported Wednesday.
    Job gains were fairly widespread, with leisure and hospitality leading at 34,000, followed by construction (26,000) and education and health services (24,000).

    Private sector hiring picked up in September, indicating the labor market is holding its ground despite some signs of weakness, payrolls processing firm ADP reported Wednesday.
    Companies added 143,000 jobs for the month, an acceleration from the upwardly revised 103,000 in August and better than the 128,000 consensus forecast from economists polled by Dow Jones.

    While hiring increased, the rate of pay growth took another step down. The 12-month gain for those staying in their jobs nudged lower to 4.7%, while tumbling to 6.6% for job switchers, down 0.7 percentage point from August.
    Job gains were fairly widespread, with leisure and hospitality leading at 34,000, followed by construction (26,000), education and health services (24,000), professional and business services (20,000) and other services (17,000).
    Information services was the lone category posting a loss, down 10,000.
    Service providers accounted for 101,000 of the total, with goods producers adding the rest.
    From a size standpoint, all of the growth came from companies with more than 50 employees. Small firms saw a loss, with those employing fewer than 20 workers down by 13,000.

    The ADP count comes two days ahead of the Labor Department’s nonfarm payrolls report, which is expected to show growth of 150,000, following August’s disappointing showing of 142,000, of which 118,000 came from private sector hiring.
    While the ADP report serves as a precursor to the official count, the two can differ, sometimes by wide margins.
    Federal Reserve officials are watching the jobs numbers closely as they contemplate the next move for monetary policy and interest rates. In a speech Monday, Fed Chair Jerome Powell characterized the labor market as “solid” while noting that it has “clearly cooled” over the past year.
    The Fed is expected to follow up its half percentage point rate cut in September with further reductions in November and December. The main question is whether the central bank will move in the same large increment or pivot back to a more conventional quarter-point move.
    Futures market pricing currently points to a quarter-point cut in November then a half-point move in December. Powell indicated that consecutive quarter-point moves are the more likely scenario now, though policymakers remain attuned to the data and will adjust accordingly. More

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    Dockworkers’ Strike Halts Commerce at Newark Port, Affecting the Supply Chain Ecosystem

    The strike by longshoremen has halted commerce at Newark and other ports on the East and Gulf Coasts, affecting an ecosystem of supply-chain workers.Every workday, on his early-morning drive to his job overseeing a warehouse in northern New Jersey, Sean Murphy takes in the frenetic scene of the busiest port on the East Coast.Towering cranes lift shipping containers off vessels newly arrived at Newark from points around the globe. Mile-long freight trains pull cargo to and from the docks. Belching trucks clatter down the highway, hauling containers to distribution centers from Maine to Florida.Not on Tuesday. As 45,000 dockworkers began a strike, shutting most of Newark and three dozen other shipping terminals along the Gulf and East Coasts, Mr. Murphy was confronted with the spectacle of a busy industrial hub now largely devoid of activity.Here was a visual encapsulation of the challenge confronting the global economy: cargo marooned, commerce frozen and no clarity on when normalcy will return.“It was eerie, like a ghost town,” Mr. Murphy said. “It was really creepy, if I can be honest with you. It was dead silent. I’ve never seen that in my entire life.”Beyond the atmospherics, the effective shutdown of Newark and other major ports threatens the livelihoods of millions of people who work near the affected docks — and businesses that depend on the flow of exports and imports.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More