Evelyn Reynolds

The United Automobile Workers union has been pressing the automaker, which owns Chrysler and Jeep, to revive the plant in Belvidere, Ill.Stellantis, the company that owns Chrysler and Jeep, said on Wednesday it planned to reopen a factory in Illinois and increase production elsewhere in the United States, a move that is likely to resolve several simmering disputes with the United Automobile Workers union.The reopening is also likely to help the company in its relations with the Trump administration, and is among the first big changes made by an interim management team that has been running the company since its chief executive, Carlos Tavares, resigned in December.“These actions are part of our commitment to invest in our U.S. operations to grow our auto production and manufacturing here,” Antonio Filosa, the company’s chief operating officer in North America, said in a statement.The announcement follows a recent meeting between Stellantis’s chairman, John Elkann, and President Trump, the company said. Mr. Elkann told the president that Stellantis, whose headquarters are in Amsterdam, aimed to strengthen its U.S. manufacturing base and was committed to safeguarding American jobs and to the broader U.S. economy.Stellantis, which also owns Fiat, Dodge, Ram and Peugeot, idled the Illinois plant, in Belvidere, in early 2023. Later that year, it agreed in a new contract with the U.A.W. to reopen it. In August 2024, the company said it was delaying the reopening after its sales and profit tumbled.The U.A.W. responded by filing grievances with the National Labor Relations Board, alleging that Stellantis was not abiding by the 2023 contract.Stellantis said on Wednesday that it planned to make a medium-size pickup truck in Belvedere, and that it would rehire some 1,500 union workers.The company also said it would move forward with plans to produce a new Dodge Durango sport-utility vehicle at a plant in Detroit. The U.A.W. had feared Stellantis was preparing to move production of the vehicle to Mexico, and the union had filed grievances on that issue as well.“This victory is a testament to the power of workers standing together and holding a billion-dollar corporation accountable,” the U.A.W. president, Shawn Fain, said in a statement on Wednesday. “We’ve shown that we will do what it takes to protect the good union jobs that are the lifeblood of places like Belvidere, Detroit, Kokomo and beyond.”The White House press office did not immediately respond to a request for comment.In its statement, Stellantis also said it would make investments in its plants in Toledo, Ohio, where it makes the Jeep Wrangler and Gladiator models. Additional investments will also come to an engine plant in Kokomo, Ind., the company said. More

The share of active credit card holders just making minimum payments rose to 10.75% in the third quarter of 2024, the highest ever in data going back to 2012.
The share of card holders more than 30 days past due rose to 3.52%, an increase from 3.21%, for a gain of more than 10%.
Even with the rising delinquency rate, it is still well below the 6.8% peak during the 2008-09 financial crisis and not yet indicative of serious strains.

In this photo illustration the Visa, Mastercard and American Express logo on various credit cards and debit cards are seen beside US one dollar bills on January 4, 2025 in Somerset, England. 
Anna Barclay | Getty Images

Consumer stress has intensified, with an escalating share of credit card holders making only minimum payments on their bills, according to a Philadelphia Federal Reserve report.
In fact, the share of active holders just making baseline payments on their cards jumped to a 12-year high, data through the third quarter of 2024 shows.

The level rose to 10.75% for the period, part of a continuing trend that began in 2021 and has accelerated as average interest rates have soared and delinquencies also have accelerated. The increase also marked a series high for a data set that began in 2012.
Along with the trend in minimum payments came a move higher in delinquency rates.
The share of card holders more than 30 days past due rose to 3.52%, an increase from 3.21%, for a gain of more than 10%. It also is more than double the delinquency level of the pandemic-era low of 1.57% hit in the second quarter of 2021.
The news counters a general narrative of a healthy consumer who has kept on spending despite inflation hitting a more than 40-year high in mid-2022 and holding above the Fed’s 2% target for nearly four years.

Signs of strength

To be sure, there remain plentiful positive signs. Even with the rising delinquency rate, the pace is still well below the 6.8% peak during the 2008-09 financial crisis and not yet indicative of serious strains.

“A lot remains unknown. We’ve seen in the past few days how quickly things might be changing,” said Elizabeth Renter, senior economist at personal finance company NerdWallet. “The baseline expectation is consumers in aggregate economywide will remain strong.”
Adjusted for inflation, consumer spending rose 2.9% on an annual basis in November, according to Goldman Sachs, which noted Tuesday that it sees consumers as “a source of strength” in the economy. The firm estimates that consumer spending will slow some in 2025, but still grow at a healthy 2.3% real rate this year, and Goldman sees delinquency rates showing signs of leveling.

However, if the trend of solid consumer spending holds, it will come against some daunting headwinds.
Average credit card rates have climbed to 21.5%, or about 50% higher than three years ago, according to Fed data. Investopedia puts the average rate even higher, at 24.4%, noting that so-called low-cost cards that are given to borrowers with poor or no credit history have topped 30%. Consumers haven’t gotten any help from the Fed: Even as the central bank cut its benchmark interest rate by a full percentage point last year, credit card costs remained elevated.
Those rates are hitting much higher balances, with money owed on revolving credit swelling to $645 billion, up 52.5% since hitting a decade low of $423 billion in the second quarter of 2021, according to the Philadelphia Fed.
Renter noted that an increasing number of respondents — now at 48% — to the firm’s own consumer survey reported using credit cards for essentials. Moreover, the NerdWallet survey also found an even higher level, more like 22%, saying they are only making minimum payments.
With average credit card balances at $10,563, it would take 22 years and cost $18,000 in interest when just paying the minimum, according to NerdWallet.
“With higher prices, people are going to turn to credit cards more to use for necessities. You tack on higher interest rates and then you have more difficulty getting by,” Renter said. “If they’re only making the minimum payment, you can go very quickly from getting by to drowning.”
The trend in that direction is not encouraging. A recently released New York Fed survey for December found that the average perceived probability for missing a minimum debt payment over the next three months stood at 14.2%, tied with September for the highest since April 2020.

Home loans slow

It’s also not just credit cards where households are feeling the pinch.
Mortgage originations hit a more than 12-year low in the third quarter as well, according to the Philadelphia Fed report. After peaking at $219 billion in third quarter of 2021, originations are just $63 billion three years later.
“With high mortgage rates, consumers who have locked in low fixed-rate mortgages have little motivation to refinance, reducing mortgage demand,” the central bank branch said in the report.
Moreover, debt-to-income ratios on home loans also are on the rise, hitting 26% most recently, or 4 percentage points higher over the past five years.
The typical 30-year mortgage rate recently has swelled above 7%, posing another obstacle for housing and homeownership.

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The president wants to begin renegotiating a U.S. trade deal with Canada and Mexico earlier than a scheduled 2026 review, people familiar with his thinking said.The Trump administration intends to push to renegotiate the U.S. trade deal with Canada and Mexico ahead of a required 2026 review of it, seeking to shore up U.S. auto jobs and counter Chinese firms that are making inroads into the Mexican auto sector, people familiar with the deliberations said.The U.S.-Mexico-Canada Agreement, which Mr. Trump signed in 2020, required the three countries to hold a “joint review” of the deal after six years, on July 1, 2026. But Mr. Trump intends to begin those negotiations sooner, according to the people, who spoke on the condition of anonymity to discuss plans that had not been made public.Trump officials particularly want to tighten the pact’s rules governing the auto sector, to try to discourage auto factories from leaving the United States, they said. They are also seeking to block Chinese companies making cars and auto parts from being able to export to the United States through factories in Mexico.Mr. Trump has also threatened to impose a 25 percent tariff on products from Canada and Mexico, saying those countries are allowing drugs and migrants to flow across American borders. Speaking from the Oval Office on Monday night after his inauguration, he said he planned to move forward with the tariffs on Feb. 1.Members of the Trump team believe that Mexico has been violating the terms of a separate agreement to limit metal exports to the United States, and they are eager to show the Mexican government that they mean to take action against such trade violations, one person familiar with the conversations said.The Wall Street Journal earlier reported that Mr. Trump was pushing for an early renegotiation of his North American trade deal. The three countries are required to meet to discuss the terms of the trade deal six years after the agreement went into force, but trade experts have expected the Trump team to speed up work on the issue.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

President Trump has promised to generate a “massive” amount of revenue with tariffs on foreign products, an amount so big that the president said he would create a new agency — the External Revenue Service — to handle collecting the money.“Instead of taxing our citizens to enrich other countries, we will tariff and tax foreign countries to enrich our citizens,” Mr. Trump said on Monday in his inaugural address, where he reiterated a promise to create the agency. “It will be massive amounts of money pouring into our Treasury coming from foreign sources.”Much about the new agency remains unclear, including how it would differ from the government’s current operations. Trade experts said that, despite the name “external,” the bulk of tariff revenue would continue to be collected from U.S. businesses that import products.Here’s what you need to know about what Mr. Trump has proposed.The U.S. has an established system for collecting tariffs.Tariff revenue is currently collected by U.S. Customs and Border Protection, which monitors the goods and the people that come into the United States through hundreds of airports and land crossings.This has been the case nearly since the country’s inception. Congress established the Customs Service in 1789 as part of the Treasury Department, and for roughly a century tariffs were the primary source of government revenue, counted in stately customs houses that still stand in most major cities throughout the United States, said John Foote, a customs lawyer at Kelley, Drye and Warren.With the creation of the income tax in 1913, tariffs became a minor source of government revenue, and after the Sept. 11 attacks, the customs bureau was moved from the Treasury Department to the Department of Homeland Security.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

As Donald J. Trump took the oath of office in Washington on Monday, the crowd at a jam-packed party held by Ukrainian business groups in Davos, Switzerland, intently watched the ceremony on huge screens.The event, on the sidelines of the World Economic Forum’s annual conference, seemed to be a display of enthusiasm for the returned American president. Speakers praised Mr. Trump and predicted that he would be a valuable partner for Ukraine in its war against Russia, despite his criticism of U.S. spending on the military effort. Waiters served mini cheeseburgers on red-and-blue buns (“American food,” attendees whispered). A few people applauded at the end.Yet the apparent optimism was a thin veneer over deep uncertainty.“We expect President Trump to surprise us, but we do not know what the surprise will be,” Andy Hunder, president of the American Chamber of Commerce in Ukraine, said at the party.Mr. Trump’s return to the White House has plunged Europe’s business leaders and policymakers into a precarious era, and officials have been bracing for it behind the scenes. The European Commission — the European Union’s executive arm — formed a never-officially-announced group, sometimes colloquially referred to as a “Trump task force,” which spent much of 2024 working on possible responses to changes to American trade and foreign policy.There is almost no aspect of European policy that Mr. Trump does not seem poised to upend. He is threatening to impose sweeping tariffs and is pressing for much heftier European spending on defense. Two of his first acts as president were to withdraw from the Paris climate agreements and the World Health Organization.How he will adjust America’s stance toward Ukraine is one of the biggest questions: During his campaign, he pledged to end the war on his first day in office, though that timeline has crept back and he has not said how.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

President Trump will stop short of immediately imposing tariffs on imported products on Monday, but will issue an executive order directing federal agencies to begin studying a broad list of trade issues that could ultimately result in taxes on goods from China, Canada, Mexico and other countries in the coming months.The decision suggests that Mr. Trump is taking a more measured approach to fulfilling a key campaign promise of using tariffs to reorder America’s trading relationships. It will also delay — at least for now — fights that have been brewing with foreign governments, which have promised to answer Mr. Trump’s levies with tariffs of their own.The topics Mr. Trump will direct his officials to investigate in an executive order Monday will be extensive, including trade deficits and trade deals signed with China, Canada and Mexico. That could tee up the ability of the president to deploy tariffs on numerous targets for many different reasons, potentially scrambling international supply chains and spawning global trade wars in the weeks and months to come.The executive order will direct federal agencies to examine unfair trade and currency practices and to assess whether foreign governments have complied with terms of the two trade deals Mr. Trump signed in his first presidency. It will also require the government to assess the feasibility of creating an “External Revenue Service” to collect tariffs and dutiesMr. Trump is also ordering a study of tariffs that the United States has imposed for national security reasons, as well as the use of a special trade exemption, called de minimis, that allows low-value goods to come into the United States tariff free. That loophole has allowed large volumes of Chinese goods to escape the tariffs Mr. Trump slapped on China during his first term. The details of the executive order were earlier reported by The Wall Street Journal.While Mr. Trump has decided to hold off on tariffs for now, his advisers say he remains more convinced than ever that they can be used to great advantage.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

Joe Biden leaves the presidency with what appears to be a sterling economic record. There’s just one problem, and it is one that will forever taint the 46th president’s legacy.
Inflation and its onerous burden on households, particularly those at the lower end of the income spectrum, dwarfed all the other good that happened on Biden’s watch.
A look through various data points helps tell the story of inflation and how that has fed into the perception about the economy as a whole.

US President Joe Biden delivers his farewell address to the nation from the Oval Office of the White House in Washington, DC, on Jan. 15, 2025. 
Mandel Ngan | Via Reuters

To the untrained eye, Joe Biden leaves the presidency with what appears to be a sterling economic record: hiring proceeding at a solid clip, gross domestic product on the rise and consumers still spending at a strong pace.
There’s just one problem, and it is one that will forever taint Biden’s legacy, the one that sank him and his party politically and for which he will always be remembered.

Inflation and its onerous burden on households, particularly those at the lower end of the income spectrum, has dwarfed all the other good that happened on Biden’s watch. Even with the pace of inflation slowing markedly from its mid-2022 peak, consumers, investors and business owners continually cite it as their most pressing issue.
“Biden inherited an economy that was flat on its back because of the pandemic, and he’s bequeathing an economy that’s flying high,” said Mark Zandi, chief economist at Moody’s Analytics. “Having said that, there are blemishes in the minds of many Americans … They feel ripped off.”
So even with an unemployment rate down dramatically from when he took office, even with growth at 3%, and even with an economy that is cited by top officials as the envy of the rest of the world, the Biden economic story is one that has an unhappy ending as Donald Trump prepares to head back to the White House on Monday.

“To me, that is the lasting legacy and differentiator between the two administrations,” said Joseph LaVorgna, chief U.S. economist at SMBC Nikko Securities and a senior economist in the first Trump administration. “Inflation was two-and-a-half times higher under President Biden than it was under President Trump. That essentially was the key catalyst for the return to Trump’s policy, which was one of very good growth and low and stable inflation.”
Biden leaves office with just a 36% approval rating overall, the lowest point of his presidency, with just 33% approving of the way he handled the economy, according to a CNN poll.

A look through various data points helps tell the story of inflation and how that has fed into the perception about the economy as a whole.
Biden by the numbers
Indeed, the cumulative inflation rate during Trump’s first term from 2017-21 was below 8%, as measured by the consumer price index. For Biden, it’s been 21%. That the economy has expanded in real terms by 11% under Biden — compared to 8.6% under Trump — doesn’t seem to matter. Inflation peaked above 9% in June 2022 and has stayed above the Federal Reserve’s 2% target every month since March 2021.

As the prices of various goods and services increased and stayed elevated, wages have struggled to keep pace. Even with a pickup in 2024, the 19% increase in average hourly earnings under Biden is still below the inflation rate.

Consequently, the disparity between wages and prices has pushed consumer confidence 6% lower under Biden than when he took office, as measured by the widely followed University of Michigan sentiment survey. That’s saying something considering that when Biden took office in January 2021 the economy was still under the shadow of Covid, with many folks choosing to spend the holiday season in late 2020 away from friends and family because of the spread of the omicron variant.

Why are consumers feeling so blue?
After all, even though the price of eggs has soared 180% in four years, household net worth has surged and consumers have continued spending. Retail sales have grown more than 20% and household net worth now totals $169 trillion, or 28% higher than at the end of 2020, according to Fed data.

The big contributors to the household balance sheet have been a meteoric if volatile rise in stocks as well as the value of real estate.
Since Biden took over, tech companies, powered by advancements in artificial intelligence, have pushed equity prices ever higher. The Dow Jones Industrial Average alone has risen more than 40%, and the Nasdaq Composite, which is weighted more towards Silicon Valley high-flyers, has jumped close to 50%.

Home prices during the same period have pushed 24% higher, while the value of real estate at the household level has risen 42%, according to the Fed.
Still, the dream of home ownership has grown more and more elusive as prices have risen and borrowing rates have gone with them. The typical 30-year mortgage rate is over 7% now, more than double where it was in January 2021.

The surge in wealth, particularly in the stock market, also has skewed benefits, mostly tilting toward those with the resources to buy stocks.
The share of total net worth held by the richest 1% stands at 30.8%, its highest in about three years, according to Fed data. Similarly, 1 percenters control just shy of 50% of all stock market-related wealth, a number that also has gradually increasedover the past few years. The lowest 50% of earners hold just 1% of stock market wealth, a number that actually has doubled during the Biden years.
All of the various metrics seem to tie back into the inflation question and how we got here.
A question of history
Economists and policymakers diagnose the issue similarly, though there are some diversions: Supply-demand imbalances at the beginning of the pandemic drove up the costs for goods over services by hitting supply chains. Trillions in fiscal and monetary stimulus aimed at stemming the damage from Covid exacerbated the issue by sending too much money chasing too few goods. Finally, a monetary response in the form of, first low then high interest rates that even Fed officials have admitted was slow-footed helped stoke prices further.
Biden lobbed a fusillade of fiscal ammunition at the post-Covid economy, including the controversial $1.9 trillion American Rescue Plan and the 2022 Inflation Reduction Act that critics say added to the inflation burden, though supporters say the measures provided critical infrastructure and climate mitigation spending that will yield benefits for years to come.
“We have had very good growth and we’ve had a reasonably strong labor market,” LaVorgna said. “The question is, at what price?”
The labor market in fact has been powerful, cranking out millions of jobs as employers sought to meet their own supply-demand mismatch that at one point had open positions outnumbering available workers by a 2-to-1 margin. The Biden economy has seen the unemployment rate slashed by more than 2 percentage points, and looking stable lately despite a blip higher in mid-2024.

Again, though, it all seems to come back to inflation.
The price to which LaVorgna alluded came in the form of a bloated federal budget in which the deficit hit $1.8 trillion in 2024 and is tracking so far in well north of that in fiscal 2025 to finance a $36.2 trillion debt. Taxpayers last year shelled out more than $1 trillion just in interest costs on the debt, and are expected to pay some $1.2 trillion this year, a total that eclipses all other outlays except Social Security, defense and healthcare.
The 6% deficit to GDP ratio the government is running is unheard of in an expansionary economy. Prior to the 2008 financial crisis, the U.S. had not run a shortfall that massive relative to total output since 1945 as the nation was escaping the World War II economy.
The tab, then, will be picked up future generations saddled with today’s debt and deficits.
“That’s a problem, a big problem,” Zandi said.

In fact, much of the job growth has come in government and health care, both sectors linked to expansionary fiscal policy, as well as leisure and hospitality, a sector that took until May 2024 to regain the jobs it lost during Covid.
Despite the challenges that abound, most officials say the U.S. economy is healthy.
Zandi said his global clients frequently ask him what the “secret sauce” is that has kept the U.S. so vibrant compared to its global counterparts. Fed Chair Jerome Powell, who frequently has called the U.S. fiscal path “unsustainable,” said he gets similar questions.
“In these international meetings that I attend, this has been the story .. how well the U.S. is doing,” Powell said at a December news conference. “If you look around the world, there’s just a lot of slow growth and continued struggles with inflation. So I feel very good about where the economy is and the performance of the economy, and we want to keep that going.”
Uncertainty over where the Fed is headed, though, is a cloud that will hang over the Trump economy.
The central bank spiked its key borrowing rate by 5.25 percentage points during its inflation fight but has lowered it a full point since then as officials grow more comfortable with where inflation is heading. However, there’s considerable uncertainty over what happens from here, with markets cautiously pricing in another quarter- or half-point in cuts for the remainder of 2025.
As Biden walks away from the White House, he leaves behind myriad questions of what could have been done to make things better — and how it easily could have been worse.
“Economists looking at this 20 years from now are going to view this as quite an amazing performance,” Zandi said. “The story here is still not over. But my sense is history will judge this period as one to follow in future crises.” More

The incoming president has floated numerous tariff plans. Retailers say their livelihood could depend on which ultimately come to fruition.For Klem’s, a general store in rural Massachusetts, each year has seemed more challenging than the last.First, there was the pandemic, then a global supply chain breakdown that left the store short of lawn mowers and shoes. Next, a spate of inflation raided American pocketbooks. All along, Amazon continued to pull customers away from brick and mortar stores like Klem’s.Now Jessica Bettencourt, Klem’s owner, says she is facing a new challenge that has left her wondering if the store — which was started by her grandparents in 1949 — will survive. The sweeping tariffs that President-elect Donald J. Trump has promised to impose could raise the price of foreign-made products and cut into her business’s already slim profits, she says.“A huge tariff increase would potentially decimate us,” she said. “A retail store like mine has slim margins to begin with.” It wouldn’t take a whole lot before “all of a sudden, those slim little pennies that you might make are gone,” she said.Mr. Trump comes into office having floated a wide variety of tariff plans. He has proposed a universal tariff on nearly all imports, plus levies ranging from 10 to 200 percent on products from China, Canada, Mexico, the European Union and elsewhere.Mr. Trump has promised to use tariffs for multiple goals: cajoling companies to make their products in the United States, funding tax cuts, persuading other countries to stem the flows of drugs and migrants and even forcing Denmark to cede Greenland to the United States.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