Evelyn Reynolds

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    GDP Gain in First Quarter Revised Downward in U.S.

    Consumers eased up on spending in the face of rising prices and high interest rates, Commerce Department data shows.Economic growth slowed more sharply early this year than initially estimated, as consumers eased up on spending amid rising prices and high interest rates.U.S. gross domestic product, adjusted for inflation, grew at a 1.3 percent annual rate in the first three months of the year, the Commerce Department said on Thursday. That was down from 3.4 percent in the final quarter of 2023 and below the 1.6 percent growth rate reported last month in the government’s preliminary first-quarter estimate.The data released on Thursday reflects more complete data than the initial estimate, released just a month after the quarter ended. The government will release another revision next month.The preliminary data fell short of forecasters’ expectations, but economists at the time were largely unconcerned, arguing that the headline G.D.P. figure was skewed by big shifts in business inventories and international trade, components that often swing wildly from one quarter to the next. Measures of underlying demand were significantly stronger.The revised data may be harder to dismiss. Consumer spending rose at a 2 percent annual rate — down from 3.3 percent in the fourth quarter, and 2.5 percent in the preliminary data for the last quarter — and measures of underlying demand were also revised down. An alternative measure of economic growth, based on income rather than spending, cooled to 1.5 percent in the first quarter, from 3.6 percent at the end of 2023.Still, the new data does little to change the bigger picture: The economy has slowed but remains fundamentally sound, buoyed by consumer spending that remains resilient even after the latest revisions. That spending is supported by rising incomes and the result of a strong job market that features low unemployment and rising wages. There is still no sign that the recession that forecasters spent much of last year warning about is imminent.Business investment, a sign of confidence in the economy, was actually revised up modestly in the latest data. Income growth, too, was revised up.Inflation, however, remains stubborn. Consumer prices rose at a 3.3 percent annual rate in the first three months of the year, slightly slower than in the preliminary data but still well above the Federal Reserve’s long-run target of 2 percent.In response, policymakers have raised interest rates to their highest level in decades and have said they will keep them there until inflation cools further. The modestly slower growth reflected in Thursday’s data is unlikely to change that approach.The Fed will get a more up-to-date snapshot of the economy on Friday, when the government releases data on inflation, income and spending in April. More

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    Will Billions More in New Aid Save Family Farms?

    Agriculture Secretary Tom Vilsack has a line about the state of small-scale agriculture in America these days.It’s drawn from the National Agricultural Statistics Service, which shows that as the average size of farms has risen, the nation had lost 544,000 of them since 1981. “That’s every farm today that exists in North Dakota and South Dakota, added to those in Wisconsin and Minnesota, added to those in Nebraska and Colorado, added to those in Oklahoma and Missouri,” Mr. Vilsack told a conference in Washington this spring. “Are we as a country OK with it?”Even though the United States continues to produce more food on fewer acres, Mr. Vilsack worries that the loss of small farmers has weakened rural economies, and he wants to stop the bleeding. Unlike his last turn in the same job, under former President Barack Obama, this time his department is able to spend billions of dollars in subsidies and incentives passed under three major laws since 2021 — including the biggest investment in conservation programs in U.S. history.The plan in a nutshell: Multiply and improve revenue streams to bolster farm balance sheets. Rather than just selling crops and livestock, farms of the future could also sell carbon credits, waste products and renewable energy.“Instead of the farm getting one check, they potentially could get four checks,” Mr. Vilsack said in an interview. He is also helping schools, hospitals and other institutions to buy food grown locally, and investors to build meatpacking plants and other processing facilities to free farmers from powerful middlemen.American Farms Are DisappearingAs agriculture consolidates, fewer operations grow more crops.

    Source: U.S. Department of AgricultureBy 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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    Home Insurance Is Clobbering Consumers. Yet It’s Barely Counted in Inflation.

    Skyrocketing premiums are hitting homeowners hard, but they barely factor into common price measures.Holly Meyer Lucas estimates that as many as 30 of the 100 houses her real estate team sold in and around Jupiter, Fla., last year were put on the market because their owners could no longer keep up with skyrocketing home insurance.“It is the housing crisis that nobody is talking about,” Ms. Meyer Lucas said. The houses sold easily, but often to well-off cash buyers who could drop the insurance altogether because they did not have a mortgage that required them to carry it.Jumping insurance rates are acute in coastal Florida, with its exposure to big risks like hurricanes and coastal erosion, but they are also a nationwide phenomenon. Last year, premium rates for owner-occupied housing were up 11.3 percent on average nationally, based on data from S&P Global Market Intelligence.Insurance rates have been climbing for a number of reasons: Storms have become more frequent and severe, inflation and labor shortages have driven up the cost of repairs and home values have increased, requiring larger policies. The biggest jumps occurred in Texas, Arizona and Utah, which were among 25 states in total that posted double-digit surges last year. In some places, including Florida, rates are up more than 40 percent over the past five years.That can add up to a major additional annual expense for owners: The typical single-family homeowner with a mortgage backed by Freddie Mac was paying $1,522 in 2023, up from $1,081 in 2018. And that’s simply an average. Anecdotally, many people report seeing their premiums jump by thousands of dollars.Those higher insurance rates are bringing pain to many homeowners, forcing people out of their homes and communities while leaving others taking big risks as they drop insurance altogether. But the rising costs are not meaningfully boosting the nation’s official inflation data, which could help to explain a small part of the disconnect between how people feel about the economy and how it looks on paper. Economic confidence remains depressed and consumers continue to fret about high price levels, dogging the Biden administration, even though inflation has been cooling and the job market is strong.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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    Global debt has grown to $315 trillion this year — here’s how we got here

    The world is mired in $315 trillion of debt, according to the latest May report by the Institute of International Finance. 
    This latest global debt wave has been the biggest, fastest, and most wide-ranging rise since World War II, coinciding with the Covid-19 pandemic.

    The world is mired in $315 trillion of debt, according to a report from the Institute of International Finance.
    This global debt wave has been the biggest, fastest and most wide-ranging rise in debt since World War II, coinciding with the Covid-19 pandemic.

    “This increase marks the second consecutive quarterly rise and was primarily driven by emerging markets, where debt surged to an unprecedented high of over $105 trillion—$55 trillion more than a decade ago,”  the IIF said in its quarterly Global Debt Monitor report released in May.
    Around two-thirds of the $315 trillion owed originates from mature economies, with Japan and the United States contributing the most to that debt pile.
    However, the debt-to-GDP ratio for mature economies — which is seen as a good indicator of a country’s ability to service its debts — has been falling in general. 
    On the other hand, emerging markets held $105 trillion in debt, but their debt-to-GDP ratio hit a new high of 257%, pushing the overall ratio up for the first time in three years.
    China, India and Mexico were the biggest contributors, the report noted.

    The IIF identified stubborn inflation, rising trade friction and geopolitical tensions as factors that could pose a significant risk to debt dynamics, “putting upward pressure on global funding costs.”
    “While the health of household balance sheets should provide a cushion against ‘higher for longer rates’ in the near term, government budget deficits are still higher than pre-pandemic levels,” the IIF added.
    Of the $315 trillion debt stock, household debt, which includes mortgages, credit cards and student debt, among others, amounted to $59.1 trillion.
    Business debt, which corporations use to finance their operations and growth, stood at $164.5 trillion, with the financial sector alone making up $70.4 trillion of that amount. Public debt made up the rest at $91.4 trillion. More

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    If A.I. Can Do Your Job, Maybe It Can Also Replace Your C.E.O.

    Chief executives are vulnerable to the same forces buffeting their employees. Leadership is important, but so is efficiency — and cost-cutting.As artificial intelligence programs shake up the office, potentially making millions of jobs obsolete, one group of perpetually stressed workers seems especially vulnerable.These employees analyze new markets and discern trends, both tasks a computer could do more efficiently. They spend much of their time communicating with colleagues, a laborious activity that is being automated with voice and image generators. Sometimes they must make difficult decisions — and who is better at being dispassionate than a machine?Finally, these jobs are very well paid, which means the cost savings of eliminating them is considerable.The chief executive is increasingly imperiled by A.I., just like the writer of news releases and the customer service representative. Dark factories, which are entirely automated, may soon have a counterpart at the top of the corporation: dark suites.This is not just a prediction. A few successful companies have begun to publicly experiment with the notion of an A.I. leader, even if at the moment it might largely be a branding exercise.A.I. has been hyped as the solution to all corporate problems for about 18 months now, ever since OpenAI rolled out ChatGPT in November 2022. Silicon Valley put $29 billion last year into generative A.I. and is selling it hard. Even in its current rudimentary form, A.I. that mimics human reasoning is finding a foothold among distressed companies with little to lose and lacking strong leadership.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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    Teamsters Struggle to Unionize Amazon and FedEx Delivery Workers

    The Teamsters union has made little headway in organizing workers at Amazon and FedEx despite wage and other gains it secured at UPS last year.Last year, two unions representing workers at three large automakers and UPS negotiated new labor contracts that included big raises and other gains. Leaders of the unions — the United Automobile Workers and the Teamsters — hoped the wins would help them organize workers across their industry.The U.A.W. won one vote to unionize a Volkswagen factory in Tennessee last month and lost one this month at two Mercedes-Benz plants in Alabama. The Teamsters have made even less progress at UPS’s big nonunion rivals in the delivery business, Amazon and FedEx.Polling shows that public support for unions is the highest it has been in decades. But labor experts said structural forces would make it hard for labor groups to increase their membership, which is the lowest it has been as a percentage of the total work force in decades. Unions also face stiff opposition from many employers and conservative political leaders.The Teamsters provide an instructive case study. Many of the workers doing deliveries for Amazon and FedEx work for contractors, typically small and medium-size businesses that can be hard to organize. And delivery workers employed directly by FedEx in its Express business are governed by a labor law that requires unions to organize all similar workers at the company nationally at once — a tougher standard than the one that applies to organizing employees at automakers, UPS and other employers.Some labor experts also said the Teamsters had not made as forceful a push as the U.A.W. to organize nonunion workers after securing a new contract with UPS.“You didn’t have that energy that you saw with the U.A.W.’s leaders,” said Jake Rosenfeld, a sociologist who studies labor at Washington University in St. Louis.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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    How China Pulled So Far Ahead on Industrial Policy

    For more than half a century, concerns about oil shortages or a damaged climate have spurred governments to invest in alternative energy sources.In the 1970s, President Jimmy Carter placed solar panels on the roof of the White House as a symbol of his commitment to developing energy from the sun. In the 1990s, Japan offered homeowners groundbreaking subsidies to install photovoltaic panels. And in the 2000s, Germany developed an innovative program that guaranteed consumers who adopted a solar energy system that they would sell their electricity at a profit.But no country has come close to matching the scale and tenacity of China’s support. The proof is in the production: In 2022, Beijing accounted for 85 percent of all clean-energy manufacturing investment in the world, according to the International Energy Agency.Now the United States, Europe and other wealthy nations are trying frantically to catch up. Hoping to correct past missteps on industrial policy and learn from China’s successes, they are spending huge amounts on subsidizing homegrown companies while also seeking to block competing Chinese products. They have made modest inroads: Last year, the energy agency said, China’s share of new clean-energy factory investment fell to 75 percent.The problem for the West, though, is that China’s industrial dominance is underpinned by decades of experience using the power of a one-party state to pull all the levers of government and banking, while encouraging frenetic competition among private companies.China’s unrivaled production of solar panels and electric vehicles is built on an earlier cultivation of the chemical, steel, battery and electronics industries, as well as large investments in rail lines, ports and highways.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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    Big Sky, Big Growth: How Montana’s Newcomers Are Shaping Its Senate Duel

    In Montana, a recent influx of wealthy out-of-state transplants has led to a surge in luxury housing developments that obscure the mountain views in places like Bozeman.Soaring prices and cultural clashes are leading some longtime residents, like Dylan Heintz, to consider moving away.The new arrivals are an X-factor in the political landscape as Montana hosts one of this year’s top Senate races. Just how will they vote?Big Sky, Big Growth: How Montana’s Newcomers Are Shaping Its Senate DuelGrowing up in Bozeman, Mont., Dylan Heintz loved the picturesque views of the snow-capped mountains and the small-town charm. Things were cheap: His dad bought the family home for about $80,000.These days, Bozeman feels less quaint. A steady stream of out-of-state transplants to Big Sky Country became a deluge during the pandemic, leading to soaring prices, a boom in luxury apartments that blot out the rustic scenery and a rash of higher-end businesses like Whole Foods. Drawn by Montana’s natural beauty and easy access to outdoor activities, the newcomers have created an affordability crisis and a local backlash that are transforming the state’s economy and politics.“I love this place, but it’s just a tough place to live in,” said Mr. Heintz, 28, an auto body repairman. Rent has doubled in his trailer court, and he and his wife cannot afford to buy a home in town, leaving them considering a move to Florida. “There are a lot of out-of-staters that have some money, and they’re willing to pay above asking price. That definitely hurts people.”The fresh population of wealthier residents — often retirees, technology workers able to do their jobs remotely and other big-city transplants — is one of the largest question marks hanging over Montana’s crucial race for Senate. As Jon Tester, the Democratic incumbent, looks to fend off Tim Sheehy, a businessman and retired Navy SEAL who is expected to capture the Republican nomination, tensions over the exploding growth will be a top issue in November.And how the new Montanans vote could prove decisive.Senator Jon Tester of Montana, a Democrat, faces a tough re-election fight in his conservative state.Haiyun Jiang for The New York TimesTim Sheehy, a businessman and retired Navy SEAL, is expected to be the Republican nominee.Tailyr Irvine for The New York TimesOn the surface, their presence might seem to benefit the embattled Mr. Tester, because a sizable chunk of them — 35 percent of arrivals in 2022 — hail from left-leaning states like California, Colorado, Oregon and Washington, according to census data analyzed by the real estate firm CBRE. Some political experts, though, believe the arrivals could tilt more to the right, noting a broader phenomenon in which conservatives have left their home states in part because of what they see as liberal overreach.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