Evelyn Reynolds

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    U.S. job growth totaled 175,000 in April, much less than expected, while unemployment rose to 3.9%

    The U.S. economy added fewer jobs than expected in April while the unemployment rate rose, reversing a trend of robust job growth that had kept the Federal Reserve cautious as it looks for signals on when it can start cutting interest rates.
    Nonfarm payrolls increased by 175,000 on the month, below the 240,000 estimate from the Dow Jones consensus, the Labor Department’s Bureau of Labor Statistics reported Friday. The unemployment rate ticked higher to 3.9% against expectations it would hold steady at 3.8%.

    Average hourly earnings rose 0.2% from the previous month and 3.9% from a year ago, both below consensus estimates and an encouraging sign for inflation.
    The jobless rate tied for the highest level since January 2022. A more encompassing rate that includes discouraged workers and those holding part-time jobs for economic reasons also edged up, to 7.4%, its highest level since November 2021. The labor force participation rate, or those actively looking for work, was unchanged at 62.7%.
    Wall Street already had been poised for a higher open, and futures tied to major stock market averages added to gains following the report. Treasury yields tumbled after being little changed prior to the release. The report raised the prospect of a “Goldilocks” climate where growth continues but not at such a rapid pace to force the Fed to tighten policy further.
    “With this report, the porridge was just about right,” said Dan North, senior economist at Allianz Trade. “What would you like at this point the cycle? We’ve had interest rates jacked up pretty high, so you would expect to see the labor market slow down a little. But we’re still at pretty high levels.”

    Consistent with recent trends, health care led job creation, with a 56,000 increase.

    Other sectors showing significant increases included social assistance (31,000), transportation and warehousing (22,000) and retail (20,000). Construction added 9,000 positions while government, which had shown solid gains in recent months, was up just 8,000 after averaging 55,000 over the previous 12 months.
    Revisions to previous months took the March gain to 315,000, or 12,000 from the initial estimate, and February to 236,000, a decline of 34,000.
    Household employment, which is used to calculate the unemployment rate, increased by just 25,000 on the month. Workers holding full-time jobs soared by 949,000 on the month, while those hold part-time jobs slumped by 914,000.
    The report comes two days after the Fed again voted to hold borrowing costs steady, keeping its benchmark overnight borrowing rate in a targeted range between 5.25%-5.5%, the highest in more than 20 years.
    Following the decision, Chair Jerome Powell characterized the jobs market as “strong” but noted that inflation is “too high” and this year’s economic data have indicated “a lack of further progress” in getting inflation back to the Fed’s 2% target.
    “This is the jobs report the Fed would have scripted,” said Seema Shah, chief global strategist at Principal Asset Management. “The first downside payrolls surprise in several months, as well as the dip in average hourly earnings growth, will bring the rate cutting dialogue back into the market and perhaps explains why Powell was able to be dovish on Wednesday.”
    Though inflation has come well off its highs in mid-2022, it is still considerably above the central bank’s comfort zone. Most reports this year have shown inflation around 3% annually; the Fed’s own preferred measure, the core personal consumption expenditures price index, most recently was at 2.8%.
    Higher prices have been putting upward pressure on wages, part of an inflation picture that has kept the Fed on the sidelines despite widespread market expectations that the central bank would be cutting interest rates aggressively this year.

    Most Fed officials in fact had been mentioning the likelihood of reductions in their public comments. However, Powell at his post-meeting news conference Wednesday made no mention of the likelihood that rates would be lowered at some point this year, as he had in the past.
    In turn, markets have pushed out pricing of the first cut until September, with no more than two quarter-percentage-point reductions by the end of the year seen as likely, according to the CME Group’s measure of futures pricing.
    This is breaking news. Please check back here for updates. More

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    Turkey’s inflation accelerates to nearly 70% in April

    Turkey’s inflation accelerated to 69.8% annually for the month of April, the Turkish Statistical Institute reported Friday.
    On a monthly basis, Turkey’s consumer prices increased 3.18%, led by price rises in alcoholic beverages and tobacco, and hotels, cafes and restaurants.
    While an eye-watering figure, April’s CPI read was actually a smaller jump than many analysts had expected. But any hopes of interest rate cuts are a long way off, economists said.

    A Turkish national flag, left, and a flag bearing the portrait of Kemal Ataturk, founder of the modern Turkish republic, hang from the exterior of a building in the Sisli district of Istanbul, Turkey, on Monday, Aug. 29, 2022.
    Bloomberg | Bloomberg | Getty Images

    Turkey’s inflation accelerated to 69.8% annually for the month of April, the Turkish Statistical Institute reported Friday.
    The highest consumer price increases year-on-year were in education, with a 103.86% jump, and hotels, cafes and restaurants, with an increase of 95.82%.

    On a monthly basis, Turkey’s inflation increased 3.18%, led by price rises in alcoholic beverages and tobacco, and hotels, cafes and restaurants.
    April’s inflation rate marks the highest annual increase since November 2022, when inflation was around 85%.
    While an eye-watering figure, April’s nearly-70% CPI read was actually a smaller jump than many analysts had expected. But any hopes of interest rate cuts are a long way off, economists said.
    Turkey’s central bank has hiked its key interest rate to 50%, citing the continuing need to counter climbing inflation in the country. The bank said in March that “tight monetary stance will be maintained until a significant and sustained decline in the underlying trend of monthly inflation is observed.”
    “The slightly smaller-than-expected rise in Turkish inflation in April to 69.8% y/y (consensus 70.3%) offers encouraging signs that price pressures have softened again,” Liam Peach, senior emerging markets economist at London-based Capital Economics, wrote in a note Friday.
    “We think that inflation will fall in the second half of this year, but we are not quite as optimistic on the pace of disinflation … Against this backdrop, we still don’t expect the central bank to shift to cuts until next year.” More

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    Here’s what to expect from the April jobs report on Friday

    Nonfarm payrolls are expected to show a gain of 240,000 for the month, according to the Dow Jones consensus that also sees the unemployment rate holding steady at 3.8%.
    The labor market has been full of surprises this year, topping Wall Street estimates at a time when many economists expected hiring to have slowed down.
    Markets also will be closely watching the wage numbers.

    A jobseeker takes a flyer at a job fair at Brunswick Community College in Bolivia, North Carolina, on April 11, 2024.
    Allison Joyce | Bloomberg | Getty Images

    Hiring likely continued at a brisk pace in April as investors look for any cracks in the labor market that could sway the Federal Reserve.
    Nonfarm payrolls are expected to show a gain of 240,000 for the month, according to the Dow Jones consensus that also sees the unemployment rate holding steady at 3.8%.

    If that top-line number is accurate, it actually would reflect a small step back from the average 276,000 jobs a month created so far in 2024. In addition, such growth could add to the Fed’s reluctance to lower interest rates, with the labor market humming along and inflation still above the central bank’s 2% target.
    “There are definitely still tailwinds left,” said Amy Glaser, senior vice president of business operations at job staffing site Adecco. “For April, the name of the game is steady-Eddie as resiliency continues, and then we’re looking forward to some of the seasonal trends we would expect going into the summer.”
    April’s jobs market featured more strength in health care and leisure and hospitality, Glaser added. Those have been two of the major sectors for employment growth this year, with health care adding about 240,000 jobs so far and leisure and hospitality contributing 89,000 jobs.

    However, growth in the coming months could spread to areas such as education, manufacturing and warehousing, part of the usual seasonal trends as educators look for alternative employment in the summer and students head out seeking jobs, she said.
    “I don’t expect to see major surprises this month based on what I’m seeing on the ground,” Glaser said. “But we’ve been surprised before.”

    Beating expectations

    Indeed, the labor market has been full of surprises this year, topping Wall Street estimates at a time when many economists expected hiring to have slowed down. The 303,000 gain in March shattered forecasts and were part of a glut of data showing that the labor economy remains strong, wages continue to rise and inflation has not moved much after receding sharply in 2023.
    That has pushed the Fed into a box as officials are reluctant to start cutting interest rates until they get more convincing evidence that inflation is under control.
    Policymakers will be watching several pieces in tomorrow’s report for evidence that job growth is not helping fuel price pressures.

    If the payrolls growth misses expectations by a little and wage pressures diminish while more people enter the labor force, that would be an ideal scenario for the Fed, said Drew Matus, chief market strategist at MetLife Investment Management.
    “The Goldilocks scenario is an unemployment rate rise with a participation rate rise,” Matus said. “What that’s suggesting is there’s a little bit of weakness that should translate into less wage pressure and take some of the concerns about sustained sticky high levels of inflation off the table.”

    Investors on the lookout

    Markets also will be watching the wage numbers closely.
    Consensus estimates put average hourly earnings growth at 0.3% on the month, near the March move, and the yearly increase at 4%, or just below the 4.1% the month before. However, Matus said the wage numbers could be distorted by immigration patterns as well as California’s minimum wage increase this year to $16 an hour.

    Fed Chair Jerome Powell said Wednesday that wage pressures have eased over the past year as the labor market has moved into better balance between supply and demand.
    “Inflation has eased substantially over the past year, while the labor market has remained strong, and that’s very good news,” he said at his news conference after the central bank’s latest meeting. “But inflation is still too high.”
    Markets have been in a state of flux as uncertainty over the Fed’s rate path has grown, though Wall Street was in rally mode Thursday, the day before the Bureau of Labor Statistics report drops at 8:30 a.m. ET.
    “What you’re seeing in markets reflects the uncertainty around the path forward. What’s going to be more important to the Fed, unemployment or inflation?” Matus said. “If unemployment starts moving higher, is the Fed going to care as much about inflation as they do today? Or vice versa? And I don’t think even with all the information the Fed’s given us, that we know. I don’t think anyone knows and I think that’s why you’re seeing the market behave the way it is.”

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    The Fed Is Eyeing the Job Market, but It’s Difficult to Read

    Fed officials are watching labor trends as they contemplate when to cut rates. But different measures are telling different stories.The Federal Reserve spent much of 2022 and 2023 narrowly focusing on inflation as policymakers set interest rates: Prices were rising way too fast, so they became the central bank’s top priority. But now that inflation has cooled, officials are more clearly factoring the job market into their decisions again.One potential challenge? It’s a very difficult moment to assess exactly what monthly labor market data are telling us.Jerome H. Powell, the Fed chair, said during a news conference on Wednesday that the way the job market shaped up in coming months could help to guide whether and when the central bank lowered interest rates this year. A substantial weakening could prod policymakers to cut, he suggested. If job growth remains rapid and inflation remains stuck, on the other hand, the combination could keep the Fed from lowering interest rates anytime soon.But it is tough to guess which of those scenarios may play out — and it is trickier than usual to determine how hot today’s job market is, especially in real time. Fed officials will get their latest reading on Friday morning, when the Labor Department releases its April employment report.Hiring has been rapid in recent months. That would typically make economists nervous that the economy was on the cusp of overheating: Businesses would risk competing for the same workers, pushing up wages in a way that could eventually drive up prices.But this hiring boom is different. It has come as a wave of immigrants and workers coming in from the labor market’s sidelines have helped to notably increase the supply of applicants. That has allowed companies to hire without depleting the labor pool.Yet the jump in available workers has also meant that a primary measure that economists use in assessing the job market’s strength — payroll gains — is no longer providing a clear signal. That leaves economists turning to other indicators to evaluate the strength of the job market and to forecast its forward momentum. And those measures are delivering different messages.Wage growth is still very strong by some gauges, but it seems to be cooling by others. Job openings have been coming down, the unemployment rate has ticked up recently (particularly for Black workers) and hiring expectations in business surveys have wobbled.The takeaway is that this seems to be a strong job market, but exactly how strong is hard to know. It is even harder to guess how much oomph will remain in the months to come. If job gains were to slow, would that be a sign that the economy was beginning to buckle, or just evidence that employers had finally sated their demand for new hires? If job gains were to stay strong, would that be a sign that things were overheating, or evidence that labor supply was still expanding?“Through a pre-pandemic lens, the economy looks quite strong, maybe even hot,” said Ernie Tedeschi, a research scholar at Yale Law School who was, until this spring, a White House economic adviser. But given all of the gains to labor supply, “maybe we shouldn’t use a pre-pandemic lens for thinking about the economy right now,” he said.Friday’s report is expected to show that job gains remained rapid in April: Economists are forecasting a 240,000 person jump in payrolls, according to a Bloomberg survey.That would continue the trend over the past year. The economy added 247,000 jobs per month on average from March 2023 to March 2024. To put that in context, the economy had added 167,000 jobs a month in the year through March 2019, the spring before the onset of the coronavirus pandemic.The Fed’s policy committee voted this week to keep interest rates at 5.3 percent, where they have been set since July. Mr. Powell signaled that they are likely to stay at that relatively high level longer than previously expected, as officials await evidence that inflation is poised to cool further after months of stalled progress.But while the path ahead for price increases will be the main driver of policy, Mr. Powell said that “as inflation has come down, now to below 3 percent,” employment also “now comes back into focus.”For now, Fed officials have not been overly worried about rapid job gains. Mr. Powell noted on Wednesday that the economy had been able to grow more strongly in 2023 partly because the labor supply had expanded so much, both because of immigration and because more people were participating in the job market.“Remember what we saw last year: very strong growth, a really tight labor market and a historically fast decline in inflation,” Mr. Powell said. “I wouldn’t rule out that something like that can continue.”On the other hand, Mr. Powell hinted that Fed officials were keeping an eye on wage growth. He suggested repeatedly that strong wage increases alone would not be enough to drive the Fed’s decisions.But the Fed chair still signaled that recent wage gains were stronger than the Fed thought would be consistent with low and stable inflation over time. As companies pay more to attract workers, many economists think that they are likely to raise prices to cover climbing labor costs and protect profit margins.Pay gains remain strong by key measures. Data this week showed that a measure of wages and benefits that the Fed watches closely, called the Employment Cost Index, climbed more rapidly than expected at the start of 2024.“We don’t target wage increases, but in the longer run, if you have wage increases running higher than productivity would warrant, there will be inflationary pressures,” Mr. Powell said this week. When it comes to slowing down wage gains to a sustainable pace, “we have a ways to go on that.”Whether job gains and wage gains will remain so rapid is unclear.Bill Kasko, the president of a white-collar employment placement agency in Texas, said that while he continued to see strong demand for workers, he also noticed employers becoming pickier as the outlook for interest rates and the looming presidential election stoked uncertainty. They wanted to see more job candidates, and take longer to make decisions.“There’s still demand, it’s just not moving as quickly,” Mr. Kasko said.If employers start to pull back more concertedly, Mr. Powell made clear this week that a “meaningful” jump in joblessness could prod the central bank to lower rates.The upshot? It seems as if officials would be more alarmed by a marked job market slowdown than by strong continued payroll gains, especially when it is hard to tell whether robust hiring numbers signal that the labor market is hot or simply that it is changing.“There’s an asymmetry in how they view the labor market,” said Michael Feroli, the chief U.S. economist at J.P. Morgan.Ben Casselman More

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    UK to suffer slowest growth of all rich nations next year, OECD says

    The U.K.’s “sluggish” growth prospects have put it on course to be the worst-performing economy of all advanced nations next year, according to the OECD.
    The downbeat prediction comes as the global economy shows signs of recovery, with growth forecast to remain steady at 3.1% in 2024 before rising modestly to 3.2% in 2025.
    Alvaro Pereira, director of the OECD’s policy studies branch, told CNBC the forecasts indicated that central banks’ efforts to quell inflation were working.

    People walk in the rain over London Bridge in central London. Picture date: Tuesday March 12, 2024.
    Lucy North – Pa Images | Pa Images | Getty Images

    The U.K.’s “sluggish” growth prospects have put it on course to be the worst-performing economy of all advanced nations next year, according to new forecasts from the Organization for Economic Cooperation and Development.
    U.K. gross domestic product is expected to grow 0.4% in 2024, the Paris-based think tank said Thursday in its latest global economic outlook. That figure is down from a previous prediction of 0.7% and less than all other G7 countries besides Germany, which is expected to be 0.2%.

    The British economy is then forecast to expand by 1% in 2025, behind Canada, France, Germany, Japan and the U.S. as the lingering effects of high interest rates and inflation continue to weigh.
    The downbeat prediction comes as the global economy shows signs of recovery, with growth forecast to remain steady at 3.1% in 2024 before rising modestly to 3.2% in 2025.
    “We start seeing some recovery in many parts of the world,” Alvaro Pereira, director of the OECD’s policy studies branch, told CNBC’s Silvia Amaro Thursday.

    Growth among advanced nations next year is set to be led by North America, which Pereira said follows “strong growth” forecasts of 2.6% in the U.S. in 2024. Growth in Europe, meanwhile, is expected to pick up next year after a sluggish 2024.
    Among emerging economies, the OECD said there were also signs of strength. In China, where the economy has struggled in part due to a protracted downturn in the property market, growth projections were revised upward slightly from earlier forecasts, which Pereira said was due to “stronger performance than in the recent past.”

    The OECD said the global outlook was an indication that central banks’ efforts to quell inflation were working.

    “Monetary policy is doing what it should be doing,” Pereira said. “Real incomes are starting to recover. This will help consumption. We also think inflation is starting to come down.”
    However, he added that questions remain over how robust the global recovery would be, particularly as central banks show signs of divergence on the future path of interest rates.
    “The risk is obviously if inflation continues to be stickier than we expect, then obviously it’s possible that monetary policy will have to remain restrictive for a bit longer,” Pereira noted.
    According to the OECD, headline inflation among its 38 member nations is expected to dip to 5% in 2024 from 6.9% in 2023, and then fall further to 3.4% in 2025. By the end of 2025, inflation is expected to return to targets of around 2% in most major economies, the OECD said.

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    North Carolina Triad Tries to Reinvent Its Economy

    Scott Kidd didn’t expect a terribly busy job when he became the town manager of Liberty, N.C., a onetime furniture and textile hub whose rhythms more recently centered on a yearly antiques festival.Those quiet times, less than three years ago, soon became a whirlwind. Toyota announced it was building a battery factory on the town’s rural outskirts for electric and hybrid vehicles, and since then Mr. Kidd has reviewed ordinances, met with housing developers and otherwise sought to meet the needs of a seven-million-square-foot facility.The flurry of activity reflects new investments in a region of North Carolina that has lagged behind: the Triad. The average income in Randolph County, which includes Liberty, is $47,000, and some jobs at Toyota will offer an hourly wage comfortably above that. More people moving into the area could breathe life into Liberty’s downtown.But the potential dividends for the area — which includes Greensboro, Winston-Salem and High Point, in the center of the state — depend on equipping its workers with the skills needed for those new jobs. Mr. Kidd worried that many local workers lacked the education and skills to work at the plant.For those jobs, “they don’t write anything down — they put it in a computer,” Mr. Kidd said. “And if you don’t know how to do that, you kind of get x-ed out.”At the same time, some residents and local leaders who welcome the new industries worry about maintaining the area’s character, lest it become like the rapidly growing — and expensive — sprawls elsewhere in the South.“We don’t want to be Charlotte,” said Marvin Price, executive vice president of economic development at the Greensboro Chamber of Commerce, referring to the banking center 100 miles down Interstate 85. “We want to be the best version of Greensboro.”Like many states, North Carolina has drawn on new federal and state incentives to attract more advanced manufacturing and clean technology businesses. And the Triad, built on the tobacco, textile and furniture industries, is trying to pivot toward advanced manufacturing, offering a potential blueprint to other regions whose economic engines sputtered with globalization and the rise of automation.When it opens next year, Toyota’s Liberty factory will make batteries for vehicles built in Kentucky. Ten minutes away in Siler City, Wolfspeed, a semiconductor manufacturer, is building a factory with a $5 billion investment. Toyota has been awarded almost $500 million in incentives and tax breaks from the State of North Carolina, while federal legislation like the Inflation Reduction Act of 2022, the CHIPS Act and the Infrastructure Investment and Jobs Act have enticed investment.“The Biden administration policies have helped North Carolina and especially the Triad become a clean energy epicenter in this country,” Gov. Roy Cooper, a Democrat, said at a recent event in Greensboro.Toyota is building a battery factory for electric and hybrid vehicles on the rural outskirts of Liberty.A former furniture factory is being used as a warehouse in High Point, N.C., which is part of the Triad region.For decades, the Triad has been the state’s manufacturing base. High Point became known as the home furnishings capital of the world, with the city and surrounding areas accounting for 60 percent of the country’s furniture production at their peak. Along with furniture, Greensboro and Winston-Salem specialized in textiles and tobacco. And while the Research Triangle of Raleigh, Durham and Chapel Hill had renowned universities in the University of North Carolina, Duke and North Carolina State, the Triad had Wake Forest University.But like many manufacturing regions, its fortunes started to decline in the 1970s. Jobs in textiles started being moved overseas or automated, furniture contracted with the arrival of cheaper Chinese imports, and tobacco contracted because of a decline in smoking. Mills shut down, sitting vacant for decades, and downtowns languished.At the same time, the economy of the Triangle, which had the country’s largest corporate research park, took off as research and tech companies grew. In 2001, the Research Triangle and the Triad had roughly the same economic output; by 2021, the two had diverged. Both regions gained population, but the Triangle grew faster, buoyed by growing numbers of college-educated workers.Some industries have received a lifeline in recent years: Furniture boomed during the height of the pandemic from increased demand for home furnishings, and manufacturing has been resurging across the country. But hundreds of workers lost their jobs last year with the shuttering of several factories.“This area of the state has found itself in a situation where it has to diversify,” said Jerry Fox, an economics professor at High Point University. “This is an opportunity for people in our area to have better-paying jobs.”Signs of change are evident in downtowns. In High Point, a hosiery mill sat vacant for decades, opening only for biannual furniture showrooms. But in 2021, a group of local investors joined with the city’s Chamber of Commerce and a local foundation that donated more than $40 million to convert the site to a co-working space, Congdon Yards. Today, it houses around 50 employers and 360 employees.The Congdon Yards co-working space in High Point occupies a former hosiery mill.The former mill is now home to dozens of employers and hundreds of employees.The space sat vacant for decades before investors came together to raise funds for the conversion.The former R.J. Reynolds Tobacco Company factory in Winston-Salem is now part of the Wake Forest Innovation Quarter.Mike Belleme for The New York TimesSimilar projects have been undertaken in Winston-Salem and Greensboro. In downtown Winston-Salem, old cigarette factories have become the Wake Forest Innovation Quarter, a research-focused district that cost more than $500 million. In Greensboro, one of the city’s oldest textile mills has been converted into a mixed-use complex, with amenities like a pizzeria to go along with office space.Still, challenges remain.One is preparing the region’s workers for jobs that require different skills. Thomas Built, a bus manufacturer based in High Point since 1916, has been making electric buses over the past decade. It has nearly 2,000 employees in High Point, making it one of the city’s top employers.Kevin Bangston, the chief executive of Thomas Built, said the company had hired more than 300 workers over the past 15 months. But he has found it difficult to hire for more skilled jobs that handle automated processes in the factory.“Demand is very high for those positions, and supply is very low,” Mr. Bangston said.Key to that transition is the role of work force development programs, which involve partnerships between businesses and community colleges to provide the skills to work in advanced manufacturing.One school offering such training is Guilford Technical Community College, the site of Mr. Cooper’s Greensboro appearance. At the same event, Jill Biden, the first lady, highlighted what she saw as the importance of such programs to enacting President Biden’s economic agenda.The school offers apprenticeships, enabling students to work while earning an associate degree. One program, designed by Toyota, aims to qualify workers for jobs at the company.Guilford Technical Community College’s campus in Greensboro, N.C., where students learn skills they can use in advanced manufacturing jobs.Students at the school learn about electricity, motor controls and the components of car batteries.Devante Cuthbertson joined the apprenticeship program at Guilford Tech last year.The president of Guilford Tech said the arrival of Toyota had increased interest in the school’s programs.Devante Cuthbertson, 28, grew up in Greensboro and was working for a flooring company around 30 minutes away as a machine operator, but he left that job in 2023 to join the apprenticeship program at Guilford Tech. There, he takes classes twice a week and goes to the Toyota battery plant site three times a week for an apprenticeship program, applying classroom learning about electricity, motor controls and the components of car batteries.“I wanted to ensure I had an education,” said Mr. Cuthbertson, who said he intended to apply for a job at Toyota as a maintenance technician when he graduates in 2025.Anthony Clarke, the president of Guilford Tech, said the arrival of Toyota — with the promise of high-paying jobs — had boosted interest in the school’s programs.“Any time employers stand up and say, ‘Hey, we’ve got really good-paying jobs,’ students pay attention to that, and they flock to that,” Dr. Clarke said.Economic development leaders and elected officials have cited the area’s affordability as a draw for companies and workers alike, particularly as housing costs have skyrocketed nationally. According to Zillow, the average home valuation in the Triad’s three main cities is around $250,000, compared with more than $300,000 for the state as a whole and more than $400,000 in the Triangle.The Triad has become a destination for some college-educated workers leaving coastal cities. Along with her husband, who worked for Nike, Melissa Binder left Portland, Ore., in 2019 for Winston-Salem to raise their child. They bought their house for $315,000 in 2019, and Ms. Binder said it offered more space than the house they owned in Portland.After renting in New York’s West Village for several years, Julia and Ryan Hennessee knew they wanted a home to raise a family. In 2018, they chose Winston-Salem to be close to Mr. Hennessee’s family and bought a single-family home for $445,000.The Hennessees said they welcomed the growth offered by the arrival of companies like Toyota. At the same time, they want Winston-Salem to retain the smaller-town charm that drew them to the region — as well as the cost of living — and not become like other Southern cities.“Winston knows how it’s different from a place like Atlanta, and doesn’t have aspirations of becoming that,” Ms. Hennessee said.Julia and Ryan Hennessee moved to Winston-Salem from New York City in 2018.The Triad has become a destination for some college-educated workers leaving coastal cities. But for others in the Triad, particularly in more rural parts like Liberty, the transition could prove more challenging.Brenda Hornsby Heindl, a librarian in Liberty, said the Toyota plant could improve the town’s fortunes. But primary education in the county remains underfunded, she said, and literacy levels are lower than the state average.“While my goal for the future of our community is that anyone could apply as an engineer at Toyota, right now we’ve got adults and kids that couldn’t read an application,” Ms. Hornsby Heindl said. “It’s going to take more than Toyota to have that happen.” More

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    He Won by a Landslide. Why Is He Fighting for His Political Life?

    Ben Houchen, a regional mayor in the north of England, faces a close re-election race, partly thanks to the broader troubles of Britain’s Conservative Party.The last time Ben Houchen ran to be mayor of Tees Valley, a struggling, deindustrialized region in northeastern England, he stormed to victory with almost 73 percent of the vote.Three years on, Mr. Houchen, a Conservative politician, faces a re-election contest in which even a narrow win would do.As voters in England prepare to vote in Thursday’s local and mayoral elections, the governing Conservatives, led by Prime Minister Rishi Sunak, are trailing badly in the opinion polls to the opposition Labour Party ahead of a general election expected later this year.So Mr. Houchen has campaigned on his own achievements, relying on his personal brand as the poster boy for “leveling up” — the Conservatives’ flagship policy of bringing prosperity to disadvantaged regions of England.But with Britain’s economy stagnating and its health service in crisis, will that be enough to outweigh the backlash facing the broader Conservative Party?“If Houchen loses, given the profile that he has, and given that in mayoral elections people are more likely to vote for the individual, that would suggest that it is actually his Conservative links that have done for him,” said Paul Swinney, director of policy and research at the Center for Cities, a research institute. “Him losing would be bad news for Rishi Sunak.”The result in Mr. Houchen’s region could determine not just his fate, but that of the embattled Mr. Sunak. Victory would give the prime minister something positive to talk about on Friday when results come in and the Conservatives expect losses elsewhere. Defeat could stir panic among Tory lawmakers and possibly prompt a push to replace Mr. Sunak.Leveling UpHeidi McCullagh, second from left, says business has picked up for her sandwich shop and catering company while Mr. Houchen has been mayor.Mary Turner for The New York TimesOnce an area controlled by the left-of-center Labour Party, Tees Valley is part of a swath of England’s formerly industrial North and Midlands where voters switched en masse to the Conservatives in the 2019 general election.Since Mr. Houchen first became mayor in 2017, a vast, derelict steelworks near the town of Redcar has been demolished and cleared for new projects, a failing airport has been saved and civil servants and filmmakers have been lured far from London to the northeast.Many people in the area give him credit for these achievements. Heidi McCullagh, 42, runs a sandwich shop and catering business near the historic Transporter Bridge across the River Tees.“We are 110 percent behind Ben Houchen because he has created so many jobs,” said Ms. McCullagh whose windows display his posters. “We do quite a lot of catering for businesses in the area; it’s definitely picked up,” she said. “Ben Houchen does everything he can to make Tees Valley a better place.”Not everyone agrees. At the heart of his regeneration plan is an ambitious project called Teesworks, where, on the site of the former steelworks, construction vehicles busy themselves on a moonscape-like tract of land.Land clearance on the Teesworks site, near Redcar.Mary Turner for The New York TimesRay Casey and Helen Taylor, members of a group opposing the re-election of Mr. Houchen.Mary Turner for The New York TimesThe idea is to convert this into a hub for low-carbon industries, but critics accuse Mr. Houchen of mishandling things to the financial advantage of two businessmen.The project, which has involved hundreds of millions of pounds in public investment, was initially half publicly owned, but a subsequent deal left the private-sector partners in the venture with 90 percent ownership. (Mr. Houchen declined requests for an interview, but has publicly defended the deal.)An independent review in January found no evidence of corruption but described “issues of governance and transparency” and said a number of decisions had not met “the standards expected when managing public funds.”Last week, Steve Gibson, a former collaborator on the project and the chairman of a major soccer club in the area, accused Mr. Houchen of “giving away everything they had worked for,” an intervention that may boost the chances of Labour’s candidate, Chris McEwan.‘An Emerald City’Hanging a protest banner against Mr. Houchen over a bridge near Redcar last week.Mary Turner for The New York TimesOn a bitingly cold day last week, five activists hung a banner from a road bridge near Redcar.“Honk if you want Houchen out,” the banner read, and a steady flow of motorists sounded their horns as the protesters, wearing masks of Mr. Houchen’s face, cheered and waved.“He promises that Teesside will become an emerald city,” said Ray Casey, a member of a small group that opposes Mr. Houchen, called Teesside Resistance. “It’s always just over the horizon, though — we never get there.”Sipping a beer later, Mr. Casey, 63, said he felt the mayor ran “an operation entirely based on public relations and spin.”Yet no one disputes that investment has come to a region of 304 square miles with a population of around 660,000 people, or that Mr. Houchen has good contacts. Last year he was nominated for a seat in the House of Lords by his ally Boris Johnson, the former prime minister. He also has ties to Michael Gove, the Conservative minister responsible for “leveling up.”In the town of Darlington, a shiny, modern building is now the northern base of the Treasury, Britain’s finance ministry. Rail stations are being spruced up. A film studio has risen from the site of an old bus depot in Hartlepool, a gritty seaside town a long way from Hollywood in every sense.Sacha Bedding, the chief executive of a charity, says the area is so far just “creating the conditions” for real regeneration.Mary Turner for The New York TimesThe Transporter Bridge, a major landmark in the Tees Valley.Mary Turner for The New York TimesThe question is how much this is benefiting local communities.Sacha Bedding, chief executive of the Wharton Trust, a charity based in Hartlepool, said investment was “creating the conditions that will give the area a proper stab” at regeneration, but that little had yet improved in the neighborhood.“The number of people who have fallen into financial insecurity has grown, and people who are working have struggled massively,” said Mr. Bedding, adding that many lacked hope. “When not a lot feels like it has changed, you almost end up with the attitude, ‘Well, what’s the point in voting?’”Sitting on a bench in Darlington, Ryan Walton, 19, said he planned to vote Labour. “Things have improved but not enough,” Mr. Walton said. “It would be better if they broadened their horizons and redeveloped areas where people live.”Green ShootsThe site of the Northern Studios, a regeneration project of television and film studios, in Hartlepool.Mary Turner for The New York TimesIn a fractious televised debate last week, Mr. Houchen defended his record against attacks from Labour’s Mr. McEwan and Simon Thorley of the centrist Liberal Democrats.In a dark suit, white shirt and striped tie, Mr. Houchen was confident and pugnacious, accusing critics of peddling conspiracies. “If you think you can turn around and change fortunes in just a few short years, that just doesn’t happen, but what we are seeing is the green shoots,” Mr. Houchen said when asked whether local people felt better off.For the filmmaking business, some of those green shoots can be seen in a movie called “Upgraded,” parts of which were filmed at Teesside International Airport, which stood in for a New York airport.Teeside International Airport, which Mr. Houchen took into public ownership.Mary Turner for The New York TimesMr. Houchen brought the loss-making airport into public ownership in 2019, an unusual market intervention for a Conservative politician.But in terms of its main business — aviation — Teesside International has yet to break even and offers only a handful of flights on most weekdays.Waiting in a largely deserted departure area before flying to Amsterdam, Derek Muir, 68, praised Mr. Houchen for saving the airport and said he would vote for him because “he gets things done and brings investment into the area.”Looking around the airport, however, he said that the lack of any flights to London was disappointing. “I would like it to be more busy,” he added. 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    Fed Holds Rates Steady, Noting Lack of Progress on Inflation

    The Federal Reserve left interest rates unchanged for a sixth straight meeting and suggested that rates would stay high for longer.Federal Reserve officials left interest rates unchanged and signaled that they were wary about how stubborn inflation was proving, paving the way for a longer period of high borrowing costs.The Fed held rates steady at 5.3 percent on Wednesday, leaving them at a more than two-decade high, where they have been set since July. Central bankers reiterated that they needed “greater confidence” that inflation was coming down before reducing them.“Readings on inflation have come in above expectations,” Jerome H. Powell, the Fed chair, said at a news conference after the release of the central bank’s rate decision.Jerome H. Powell, the Fed chair, said that the central bank needed “greater confidence” that inflation was coming down before it decided to cut interest rates, which are at a two-decade high.Susan Walsh/Associated PressThe Fed stands at a complicated economic juncture. After months of rapid cooling, inflation has proved surprisingly sticky in early 2024. The Fed’s preferred inflation index has made little progress since December, and although it is down sharply from its 7.1 percent high in 2022, its current 2.7 percent is still well above the Fed’s 2 percent goal. That calls into question how soon and how much officials will be able to lower interest rates.“What we’ve said is that we need to be more confident” that inflation is coming down sufficiently and sustainably before cutting rates, Mr. Powell said. “It appears that it’s going to take longer for us to reach that point of confidence.”The Fed raised interest rates quickly between early 2022 and the summer of 2023, hoping to slow the economy by tamping down demand, which would in turn help to wrestle inflation under control. Higher Fed rates trickle through financial markets to push up mortgage, credit card and business loan rates, which can cool both consumption and company expansions over time.But Fed policymakers stopped raising rates last year because inflation had begun to come down and the economy appeared to be cooling, making them confident that they had done enough. They have held rates steady for six straight meetings, and as recently as March, they had expected to make three interest rate cuts in 2024. Now, though, inflation’s recent staying power has made that look less likely.Many economists have begun to push back their expectations for when rate reductions will begin, and investors now expect only one or two this year. Odds that the Fed will not cut rates at all this year have increased notably over the past month.Mr. Powell made it clear on Wednesday that officials still thought that their next policy move was likely to be a rate cut and said that a rate increase was “unlikely.” But he demurred when asked whether three reductions were likely in 2024.He laid out pathways in which the Fed would — or would not — cut rates. He said that if inflation came down or the labor market weakened, borrowing costs could come down.On the other hand, “if we did have a path where inflation proves more persistent than expected, and where the labor market remains strong, but inflation is moving sideways and we’re not gaining greater confidence, well, that could be a case in which it could be appropriate to hold off on rate cuts,” Mr. Powell said.Investors responded favorably to Mr. Powell’s news conference, likely because he suggested that the bar for raising rates was high and that rates could come down in multiple scenarios. Stocks rose and bond yields fell as Mr. Powell spoke.“The big surprise was how reluctant Powell was to talk about rate hikes,” said Michael Feroli, chief U.S. economist at J.P. Morgan. “He really seemed to say that the options are cutting or not cutting.”Still, a longer period of high Fed rates will be felt from Wall Street to Main Street. Key stock indexes fell in April as investors came around to the idea that borrowing costs could remain high for longer, and mortgage rates have crept back above 7 percent, making home buying pricier for many want-to-be owners.Fed officials are planning to keep rates high for a reason: They want to be sure to stamp out inflation fully to prevent quickly rising prices from becoming a more permanent part of America’s economy.Policymakers are closely watching how inflation data shape up as they try to figure out their next steps. Economists still expect that price increases will start to slow down again in the months to come, in particular as rent increases fade from key price measures.“My expectation is that we will, over the course of this year, see inflation move back down,” Mr. Powell said on Wednesday. But he added that “my confidence in that is lower than it was because of the data that we’ve seen.”As the Fed tries to assess the outlook, officials are likely to also keep an eye on momentum in the broader economy. Economists generally think that when the economy is hot — when companies are hiring a lot, consumers are spending and growth is rapid — prices tend to increase more quickly. Growth and hiring have not slowed down as much as one might have expected given today’s high interest rates. A key measure of wages climbed more rapidly than expected this week, and economists are now closely watching a jobs report scheduled for release on Friday for any hint that hiring remains robust.But so far, policymakers have generally been comfortable with the economy’s resilience.That is partly because growth has been driven by improving economic supply: Employers have been hiring as the labor pool grows, for instance, in part because immigration has been rapid.Beyond that, there are hints that the economy is beginning to cool around the edges. Overall economic growth slowed in the first quarter, though that pullback came from big shifts in business inventories and international trade, which often swing wildly from one quarter to the next. Small-business confidence is low. Job openings have come down substantially.Mr. Powell said Wednesday that he thought higher borrowing costs were weighing on the economy.“We believe that our policy stance is in a good place and is appropriate to the current situation — we believe it’s restrictive,” Mr. Powell said.As the Fed waits to make interest rate cuts, some economists have begun to warn that the central bank’s adjustments could collide with the political calendar.Donald J. Trump, the former president and presumptive Republican nominee, has already suggested that interest rate cuts this year would be a political move meant to help President Biden’s re-election bid by pumping up the economy. Some economists think that cutting in the weeks leading up to the election — either in September or November — could put the Fed in an uncomfortable position, drawing further ire and potentially making the institution look political.The Fed is independent of the White House, and its officials have repeatedly said that they will not take politics into account when setting interest rates, but will rather be guided by the data.Mr. Powell reiterated on Wednesday that the Fed did not and would not take into account political considerations in timing its rate moves.“If you go down that road, where do you stop? So we’re not on that road,” Mr. Powell said. “It just isn’t part of our thinking.” More