Evelyn Reynolds

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    For Generations of Alaskans, a Livelihood Is Under Threat

    Petersburg, Alaska, is as pretty a seaside town as any you’ll find across the filigree of fjords and foggy islands that make up the state’s maritime coast. Statuary and floral designs evidence its proud Scandinavian heritage, and bald eagles soar across the narrow strait that separates it from a national forest. It doesn’t have room for the giant cruise ships that disgorge thousands of passengers into Ketchikan and Juneau, but it is perfectly situated for its sustaining industry: fishing.Norwegian fishermen settled in Petersburg in the 1800s, finding it an ideal jumping off point to pursue salmon, crab and halibut. Hundreds of vessels now dock in there and sell their catch to the two major processors, which head and gut the fish before either canning or freezing it on its eventual path to the dinner table. One of the plants was built more than a century ago, and its owner is the town’s largest private employer.Few people know the business better than Glorianne Wollen, a fisherman’s daughter who operates a large crab boat in a partnership and also serves as harbor master, working from a tiny desk tucked into a bustling office with a little dog at her feet. A Petersburg native, she’s seen a lot of change.“In the good old days, the town was very alive with discussion, everybody was involved so everybody had a stake, everybody knew what was going on, things happened in real time,” Ms. Wollen recalled. That buzz receded as boats got bigger and more efficient, pursued more species and stayed on the water for more of the year to maximize their investment.“It takes two guys to do what 20 used to,” she said. “There’s just fewer of us.”Petersburg doesn’t have room for the giant cruise ships that dock in other Alaskan cities, but it is perfectly situated for its sustaining industry: fishing“There’s just fewer of us,” said Glorianne Wollen, a Petersburg native and fisherman’s daughter who now serves as the town’s harbor master.The Ranks of Alaska Fishermen Are ThinningAcross all fisheries, the number of people holding permits who harvest fish commercially each year has fallen precipitously since the 1980s.

    Source: Commercial Fisheries Entry Commission, State of AlaskaBy The New York TimesSalmon Prices Have Been Mostly Flat for DecadesAdjusted for inflation, prices that fishermen are paid per pound of salmon they deliver to processors rose slightly in the 2010s and took a big hit in 2023.

    Source: Alaska Department of Fish and GameBy The New York Times More

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    The Fed’s Preferred Inflation Gauge Stays Cool, Keeping a Rate Cut Imminent

    Inflation remained cool in July, based on the Personal Consumption Expenditures index, keeping the Federal Reserve on track for rate cuts.Inflation held steady in July on a yearly basis and consumer spending was robust, fresh data released on Friday showed, the latest sign that progress toward cooler price increases remains firmly intact even as the economy holds up.The release of the Federal Reserve’s favorite inflation number, the Personal Consumption Expenditures index, showed that yearly inflation was 2.5 percent. That was in line with both the previous month and with economist forecasts.After stripping out food and fuel prices, both of which jump around, a “core” index was up 2.6 percent from a year earlier. That figure gives economists a clearer grasp on the underlying trend in inflation.This month, Fed officials and Wall Street analysts are likely to look closely at the monthly inflation numbers. Because inflation climbed slowly last summer, the annual numbers are being measured against cool readings from last year. When comparing July’s prices to June’s, inflation climbed slightly: 0.2 percent in both the headline and the core measures.The likely takeaway for Fed officials is that inflation continues to gradually moderate — keeping them on track to begin lowering interest rates next month. While the yearly number remains above the Fed’s 2 percent goal, it is down substantially from a peak of more than 7 percent in 2022.This is the last P.C.E. report the Fed will receive before its Sept. 17-18 policy meeting, although officials will get a Consumer Price Index report on Sept. 11. That inflation measure comes out earlier in the month than the personal consumption measure and feeds into the P.C.E. report.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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    Gaza Debate Reopens Divisions Between Left-Wing Workers and Union Leaders

    Last week’s Democratic National Convention surfaced differences over the war in Gaza that could widen fissures between labor activists and union officials.When members of the Chicago Teachers Union showed up to march at the Democratic National Convention last week, many expressed two distinct frustrations.The first was over the war in Gaza, which they blamed for chewing up billions of dollars in aid to Israel that they said could be better spent on students, in addition to a staggering loss of life. The second was disappointment with their parent union, the American Federation of Teachers, which they felt should go further in pressuring the Biden administration to rein in Israel’s military campaign.“I was disappointed in the resolution on Israel and Palestine because it didn’t call for an end to armed shipments,” said Kirstin Roberts, a preschool teacher who attended the protest, alluding to a statement that the parent union endorsed at its convention in July.Since last fall, many rank-and-file union members have been outspoken in their criticism of Israel’s response to the Oct. 7 attacks, in which Hamas-led militants killed more than 1,000 people and took about 250 hostages. The leaders of many national unions have appeared more cautious, at times emphasizing the precipitating role of Hamas.“We were very careful about what a moral stance was and also what the implications of every word we wrote was,” the president of the American Federation of Teachers, Randi Weingarten, said of the resolution her union recently adopted.In some ways, this divide reflects tensions over Israel and Gaza that exist within many institutions — like academia, the media and government.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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    The Fed’s favorite inflation indicator increased 0.2% in July, as expected

    Core personal consumption expenditures prices increased 0.2% in July and 2.6% from a year ago. The 12-month figure was slightly softer than the 2.7% estimate.
    All-item inflation came in respectively at 0.2% and 2.5%, in line with forecasts.
    Personal income increased 0.3%, slightly higher than the 0.2% estimate, while consumer spending rose 0.5%, in line with the forecast.

    Inflation edged higher in July, according to a measure favored by the Federal Reserve as the central bank prepares to enact its first interest rate reduction in more than four years.
    The Commerce Department reported Friday that the personal consumption expenditures price index rose 0.2% on the month and was up 2.5% from the same period a year ago, exactly in line with the Dow Jones consensus estimates.

    Excluding volatile food and energy prices, core PCE also increased 0.2% for the month but was up 2.6% from a year ago. The 12-month figure was slightly softer than the 2.7% estimate.
    Fed officials tend to focus more on the core reading as a better gauge of long-run trends. Both core and headline inflation on a 12-month basis were the same as in June.
    Core prices less housing increased just 0.1% on the month. As other inflation components ease, shelter has proven to be stubborn, again rising 0.4% in July, according to Friday’s report.
    Elsewhere in the report, the department’s Bureau of Economic Analysis said personal income increased 0.3%, slightly higher than the 0.2% estimate, while consumer spending rose 0.5%, in line with the forecast. Spending continued at a solid clip even though the personal savings rate fell to 2.9%, the lowest since June 2022.
    From a prices standpoint, inflation changed little over the past month. The BEA said that goods prices fell by less than 0.1% though services increased 0.2%.

    On a 12-month basis, goods also were off by less than 0.1%, while services jumped 3.7%. Food prices were up 1.4% and energy accelerated 1.9%.
    Markets reacted little to the news, with equity futures pointing to a slightly higher open on Wall Street and Treasury yields higher as well.
    The report comes with the markets pricing in a 100% chance of a rate cut in September, with the only uncertainty being whether the Fed will take the incremental step of lowering benchmark rates by a quarter percentage point or being more aggressive and moving a half-point lower.
    In recent days, policymakers such as Chair Jerome Powell have expressed confidence that inflation is progressing back to the Fed’s 2% goal.
    The Fed is expected now to switch from a nearly complete focus on bringing down inflation to at least an equal concentration on supporting the labor market. Though the unemployment rate is still low at 4.3%, it has been trending higher over the past year, and surveys suggest a slowdown in hiring and a perception among workers that jobs are getting tougher to come by.

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    Euro zone inflation falls to 3-year low of 2.2%, backing September rate cut case

    Euro zone inflation dropped to a three-year low of 2.2% in August, flash figures from statistics agency Eurostat showed Friday.
    The core rate — excluding the more volatile components of energy, food, alcohol and tobacco — fell to 2.8% in August from 2.9% in July, also matching a Reuters poll.
    Markets have fully priced for the ECB to lower interest rates by another 25 basis points in September, after the institution made its first rate reduction in June, and for another 25 basis point cut before the end of the year.

    A woman takes a selfie photo, with the Eiffel Tower in the background, at Surcouf street in Paris, on July 23, 2024, ahead of the Paris 2024 Olympic Games. 
    Mauro Pimentel | Afp | Getty Images

    Euro zone inflation dropped to a three-year low of 2.2% in August, flash figures from statistics agency Eurostat showed Friday, boosting expectations for a September rate cut from the European Central Bank.
    The decline from 2.6% in July was in line with the forecast of economists polled by Reuters.

    The core rate — excluding the more volatile components of energy, food, alcohol and tobacco — fell to 2.8% in August from 2.9% in July, also matching a Reuters poll.
    The euro continued to slide against sterling following the release, trading 0.1% lower at 0.8408 pounds. The euro nudged 0.04% higher against the U.S. dollar to $1.1083 as investors gear up from a September rate cut from the Federal Reserve in its first step toward monetary easing in the current cycle.
    It come after price rises in Germany, the euro area’s biggest economy, cooled more than expected to 2% for the month, on a euro zone harmonized basis.
    Economists at ING expect euro zone core inflation to remain stubbornly above 2.5% for the rest of the year amid stickiness in goods and services.
    Markets have fully priced for the ECB to lower interest rates by another 25 basis points in September, after the institution made its first rate reduction in June, and for another 25 basis point cut before the end of the year.

    Kyle Chapman, foreign exchange markets analyst at Ballinger Group, said there were nonetheless details in the release that would concern ECB policymakers, particularly services inflation at 4.2%.
    “The positive headline is purely down to energy price effects, and it masks the fact that little real progress in underlying pressures has been made here,” Chapman said in a note.
    “Now at the highest level since last October, services inflation has been glued to the 4% area for almost a year now and has headed in the wrong direction since the spring.”
    Speaking ahead of the latest data print, Ed Smith, co-chief investment officer at Rathbones Asset Management, told CNBC’s “Squawk Box Europe” on Friday the central bank was on track for further rate cuts, noting ECB President Christine Lagarde’s focus on wage inflation.

    “Negotiated wages are a big thing in the euro zone, [they] account for about 80% of the workforce [who] have wage growth negotiated for them. Big drop in euro zone-wide negotiated wages in the second quarter, falls in other indicators like the Indeed.com listings … the ECB’s telephone survey of businesses … also points to falling wage intention.”
    “But there is some stickiness, the latest [purchasing managers’ index] numbers, service sector surveys showed some stickiness in the price components of that,” he added, noting that would keep some ECB voting members cautious. More

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    Harris and Trump Have Differing Plans to Solve Housing Crisis

    The two presidential nominees are talking about their approaches for solving America’s affordability crisis. But would their plans work?America’s gaping shortage of affordable housing has rocketed to the top of voter worry lists and to the forefront of campaign promises, as both the Democratic nominee, Kamala Harris, and the Republican candidate, Donald J. Trump, promise to fix the problem if they are elected.Their two visions of how to solve America’s affordable housing shortage have little in common, and Ms. Harris’s plan is far more detailed. But they do share one quality: Both have drawn skepticism from outside economists.Ms. Harris is promising a cocktail of tax cuts meant to spur home construction — which several economists said could help create supply. But she is also floating a $25,000 benefit to help first-time buyers break into the market, which many economists worry could boost demand too much, pushing home prices even higher. And both sets of policies would need to pass in Congress, which would influence their design and feasibility.Mr. Trump’s plan is garnering even more doubt. He pledges to deport undocumented immigrants, which could cut back temporarily on housing demand but would also most likely cut into the construction work force and eventually limit new housing supply. His other ideas include lowering interest rates, something that he has no direct control over and that is poised to happen anyway.Economist misgivings about the housing market policy plans underline a somber reality. Few quick fixes are available for an affordable housing shortfall that has been more than 15 years in the making, one that is being worsened by demographic and societal trends. While ambitious promises may sound good in debates and television ads, actual policy attempts to fix the national housing shortfall are likely to prove messy and slow — even if they are sorely needed.Here’s what the candidates are proposing, and what experts say about those plans.Harris: Expand Supply Using Tax Credits.Ms. Harris is promising to increase housing supply by expanding the Low-Income Housing Tax Credit, providing incentives for state and local investment in housing and creating a $40 billion tax credit to make affordable projects economically feasible for builders.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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    The Report Card on Guaranteed Income Is Still Incomplete

    A three-year analysis of unconditional cash stipends concluded that the initiative has had some success, but not the transformational impact its proponents hoped for.Silicon Valley billionaires and anti-poverty activists don’t have a lot in common, but in recent years they’ve joined forces around a shared enthusiasm: programs that guarantee a basic income.Tech entrepreneurs like Sam Altman, chief executive of OpenAI, have promoted direct cash transfers to low-income Americans as a way to cushion them from what the entrepreneurs anticipate could be widespread job losses caused by artificial intelligence. Some local politicians and community leaders, concerned about growing wealth inequality, have also put their faith in these stipends, known as unconditional cash or, in their most ambitious form, a universal basic income.Dozens of small pilot projects testing unconditional cash transfers have popped up in communities around the country, from Alaska to Stockton, Calif. Andrew Yang, an entrepreneur, put the idea of $1,000 monthly payments for all adults at the center of his 2020 presidential campaign. The idea of cash transfers gained broader popularity during the pandemic, as the federal government introduced stimulus checks and child tax credits, and child poverty declined.While some pilot projects have shown encouraging results, they have been small scale. That changed this summer, when a research project involving several thousand people, backed by Mr. Altman and called OpenResearch, released findings from what is so far the country’s largest experiment with unconditional cash transfers.If proponents of unconditional cash hoped the findings of the OpenResearch study would prove its benefits once and for all, their hopes were at least partly dashed. People gained flexibility to spend on basic needs, but the cash didn’t transform their net worth or their mental or physical health. Some researchers and guaranteed income proponents argue that the study shows that cash transfers are only a small piece of the larger puzzle of how to improve the financial well-being of low-income people.“Cash transfers probably do less to improve people’s lives than the proponents of them thought that they would,” said Sarah Miller, an author of the study and economist at the University of Michigan’s Ross School of Business. “The flip side is that they probably don’t have the harmful effects that detractors were concerned about.”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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    Why Interest Rate Cuts Won’t Fix a Global Housing Affordability Crisis

    Central bankers are lowering borrowing costs, but that won’t be a cure-all for a widespread lack of affordable housing.To Moira Gallagher, 38, buying a house in Anchorage would be a step toward financial stability for her growing family. But even with a six-figure household income and stable jobs, she and her husband have struggled to make a purchase.High mortgage rates, limited housing supply and historically poor affordability have kept buying a home stubbornly out of reach for Ms. Gallagher, an economic researcher who is expecting her third child. Three- or four-bedroom homes in good school districts are both hard to come by and prohibitively expensive.“It makes it hard to feel secure,” she said. “It affects everything.”From Anchorage to Amsterdam, many developed and even emerging economies are confronting a similar problem: Housing supply is failing to meet demand, helping to push home prices to levels that are out of reach even for middle-income families.Affordability problems have been exacerbated by high central bank interest rates, which officials across the globe have been using to tackle rapid inflation. Those policy rates trickle through financial markets to elevate mortgage rates — making it even more expensive for borrowers to buy a home and for builders to finance construction for new houses and apartments.The second part of that equation is now poised to change. Central banks in many economies are lowering interest rates or preparing to do so imminently. The European Central Bank and Bank of England are already cutting borrowing costs, and the chair of the U.S. Federal Reserve signaled last week that it would start reductions in September.But those rate cuts are unlikely to be a panacea for housing affordability.While the shift in central bank stance is already translating into somewhat lower mortgage rates in many countries, borrowing costs are not expected to fall back to the levels that prevailed during the 2010s. Several economists said 30-year mortgage rates in the United States, for instance, could end up in the 5.5 to 6 percent range, down from their 7.5 percent peak last year but still up notably from the 4 percent that was normal before the pandemic.Home Prices Jump in Developed WorldHow inflation-adjusted home prices are shaping up across advanced economies.

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    O.E.C.D. house price indexes, 2015=100
    Data reflects first quarter of each year.Source: Organisation for Economic Co-operation and DevelopmentBy The New York TimesWhat Share of Income Does a Typical Home Cost? Across metro areas in the United States, the cost of owning a typical home has been rising as a share of the local median income.

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    Share of income that would go to owning standard home
    Source: The Atlanta Fed’s Home Ownership Affordability MonitorBy 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