Economy

The pledge is unprecedented for Big Tech and makes it easier for roughly 100,000 workers to unionize.Punctuating a year of major gains for organized labor, Microsoft has announced that it will stay neutral if any group of U.S.-based workers seeks to unionize.Roughly 100,000 workers would be eligible to unionize under the framework, which was disclosed Monday by Microsoft’s president, Brad Smith, and the A.F.L.-C.I.O. president, Liz Shuler, during a forum at the labor federation’s headquarters in Washington.The deal effectively broadens a neutrality agreement between Microsoft and a large union, the Communications Workers of America, under which hundreds of the company’s video game workers unionized early this year without a formal National Labor Relations Board election. Officially, it provides a framework in which any group of Microsoft workers can negotiate their own neutrality agreements with similar terms.As part of Monday’s announcement, Microsoft and the A.F.L.-C.I.O. said they would collaborate to resolve issues that arise from the adoption of artificial intelligence in the workplace.Mr. Smith and Ms. Shuler said the partnership would include meetings in which artificial intelligence experts from Microsoft brief labor leaders and workers on developments in the field. Microsoft’s experts will also seek input from workers so they can develop technology in a way that addresses their concerns, such as the risk of job elimination.The two sides said they would work together to help enact policies that would prepare workers for jobs that incorporate artificial intelligence.“Never before in the history of these American tech giants, dating back 50 years or so ago, has one of these companies made a broad commitment to labor rights,” Ms. Shuler said at the forum. “It is historic. Not only have they made a commitment, they formalized it and put it in writing.”Liz Shuler, president of A.F.L.-C.I.O., noted polling that found widespread concern among workers about losing their jobs because of artificial intelligence.Susan Walsh/Associated PressWorkers’ anxiety over artificial intelligence appears to have grown over the past few years. Hollywood writers and actors cited concerns about A.I. as a key reason for their monthslong strikes this year, while Ms. Shuler pointed to recent polling showing widespread concern among workers that artificial intelligence could cost them their jobs.“I can’t sit here and say it will never displace a job,” Mr. Smith said at the forum, alluding to artificial intelligence. “I don’t think that would be honest.” But he added that “the key is to try to use it to make jobs better,” saying the technology could eliminate tasks that people consider tedious.The unveiling of the A.I. initiative comes a few weeks after the board of the start-up OpenAI, which makes ChatGPT, fired the company’s chief executive, Sam Altman, only to accept his reinstatement days later. The episode added to widespread concerns over how to ensure that companies develop and deploy artificial intelligence safely.Microsoft is OpenAI’s biggest investor and played a role in reinstating Mr. Altman.Asked if the OpenAI controversy was an impetus for the new partnership with organized labor, Mr. Smith demurred and said the labor initiative had been in the works for months.“I wouldn’t say what happened in the board room at OpenAI changed it,” he said in an interview after Monday’s forum. “But it raised questions about how A.I. is governed and perhaps it gave even more credence to the kind of partnership we’re announcing today.”When Microsoft announced a neutrality agreement with the communications workers union in June 2022, the offer was conditional: The company was in the process of acquiring the video game maker Activision Blizzard for nearly $70 billion. Microsoft pledged to stay neutral in union elections at Activision if the acquisition succeeded. (The acquisition has since been completed.)The key to artificial intelligence, said Brad Smith, Microsoft’s president, is “to try to use it to make jobs better.”Michael A. McCoy for The New York TimesA few months later, when roughly 300 workers sought to unionize at ZeniMax Media, a video game company owned by Microsoft, Microsoft agreed to abide by the neutrality agreement in that case as well. The agreement allowed them to indicate their preference for a union either by signing authorization cards or anonymously through an electronic platform, a more efficient process than an N.L.R.B. election.The 300 employees unionized — a rarity in Big Tech — and are negotiating a labor contract that includes language restricting the use of A.I. in their workplace.The Communications Workers of America is one of several dozen unions affiliated with the A.F.L.-C.I.O., the country’s largest labor federation. After the ZeniMax campaign, communications union officials believed that Microsoft would probably agree to stay neutral if the union sought to organize workers elsewhere at the company. But Microsoft had never explicitly agreed to do so beyond Activision or ZeniMax. More

Consumer prices rose 3.1 percent in the year through November, and a closely watched core index was roughly the same rate as the previous month.Inflation data released on Tuesday showed that price increases remained moderate in November, the latest sign that inflation has cooled substantially from its June 2022 peak. That’s likely to keep the Federal Reserve on track to leave interest rates unchanged at its final meeting of the year, which takes place this week.The Consumer Price Index came out just hours before the Fed began its two-day gathering, which will conclude with the release of an interest rate decision and a fresh set of quarterly economic projections at 2 p.m. on Wednesday. Jerome H. Powell, the Fed chair, is then scheduled to hold a news conference.Central bankers have embraced a recent slowdown in price increases, and Tuesday’s data largely suggested that inflation remains lower than earlier this year. Overall inflation climbed 0.1 percent on a monthly basis, making for a 3.1 percent increase compared to a year earlier.That was cooler than 3.2 percent in October, and it is down notably from a peak above 9 percent in the summer of 2022.But some of the report’s underlying details could keep Fed officials wary as they contemplate what to do next with interest rates. Investors expect central bankers to begin lowering borrowing costs within the first half of 2024, though officials have been trying to keep their options open.After stripping out volatile food and fuel to give a clearer sense of underlying inflation trends, so-called core inflation climbed more quickly on a monthly basis. And a closely watched measure that tracks housing expenses also climbed more quickly; that measure is called “owners’ equivalent rent” because it estimates how much it would cost someone to rent a home that they own, and economists have been expecting it to decline.“It reinforces this idea that it’s going to be a bumpy road to disinflation,” said Blerina Uruci, chief U.S. economist at T. Rowe Price. “The Fed cannot cut interest rates too soon in the face of resilient services inflation.”Core inflation was up by 4 percent compared to a year earlier, holding steady from October. That pace remains well above the roughly 2 percent pace that was normal before the onset of the pandemic. More

The consumer price index, a closely watched inflation gauge, increased 0.1% in November, and was up 3.1% from a year ago.
Excluding volatile food and energy prices, the core CPI increased 0.3% on the month and 4% from a year ago.
A 2.3% decrease in energy prices helped keep inflation in check, as gasoline fell 6% and fuel oil was off 2.7%. Food prices increased 0.2%.

Prices across a broad range of goods and services edged higher in November but were mostly in line with expectations, further easing pressure on the Federal Reserve.
The consumer price index, a closely watched inflation gauge, increased 0.1% in November, and was up 3.1% from a year ago, the Labor Department reported Tuesday. Economists surveyed by Dow Jones had been looking for no gain and a yearly rate of 3.1%.

While the monthly rate indicated a pickup from the flat CPI reading in October, the annual rate showed another decline after hitting 3.2% a month earlier.

Excluding volatile food and energy prices, the core CPI increased 0.3% on the month and 4% from a year ago. Both numbers were in line with estimates and little changed from October.
The November numbers are still well above the Fed’s 2% target, though showing continuing progress. Policymakers focus more on core inflation as a signal for longer-term trends.
The report was “somewhat in line, although, I suppose not as good as what some might have hoped that we would start to see more deceleration on a month over month basis,” said Liz Ann Sonders, chief investment strategist at Charles Schwab. The Fed “will probably talk about continued disinflation being good news.”
Wall Street opened little changed following the news, with major indexes slightly negative in early trading. Treasury yields edged higher.

A 2.3% decrease in energy prices helped keep inflation in check, as gasoline fell 6% and fuel oil was off 2.7%. Food prices increased 0.2%, boosted by a 0.4% jump in food away from home. On an annual basis, food rose 2.9% while energy was down 5.4%.
Shelter prices, which make up about one-third of the CPI weighting, increased 0.4% on the month and were up 6.5% on a 12-month basis. However, the annual rate has showed a steady decline since peaking in early 2023. Lodging away from home fell 0.9%.
“Falling inflation does not mean that prices are falling. In fact, prices for just about everything are still higher than they were before the pandemic,” said Lisa Sturtevant, chief economist at Bright MLS. “Housing costs, in particular, are weighing on many individuals and families.”
After declining for five straight months, used vehicle prices rose 1.6% in November, and vehicle insurance increased 1% and was up 19.2% year over year. Medical care costs rose 0.6% while apparel fell 1.3%.
Worker paychecks increased on an inflation-adjusted basis, with real average hourly earnings rising 0.2% on the month and 0.8% from a year ago, the Labor Department said in a separate release.
The release comes as the Fed begins its two-day policy meeting, during which it is expected to hold interest rates steady for the third consecutive time.
However, markets are looking more closely at what the Fed signals for the future.
After hiking rates 11 times since March 2022, policymakers are expected to signal that the policy tightening is over, with the next step likely to be cuts at a still-to-be-determined pace. Following the release, futures pricing continued to indicate virtually no chance of any further rate increases, with the first cut likely to happen in May.
In fact, futures markets indicate the Fed will ease aggressively in 2024, cutting rates up to 1.25 percentage points by the end of the year. Respondents to the CNBC Fed Survey, though, think the central bank will move at a more measured pace, cutting about three times, assuming quarter percentage point increments.
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NEW YORK (Reuters) – U.S. small business sentiment edged down in November to the lowest level in six months, stoked by continued difficulties in hiring skilled labor and concerns about inflation.The National Federation of Independent Business (NFIB) said its small business optimism index fell to 90.6 last month from 90.7 in October. The index remained below its 50-year average of 98 for a 23rd straight month.Optimism has fallen since peaking this year in July as businesses report difficulties finding labor and battling inflation. A net negative 32% of businesses reported higher profits in November, unchanged from October.While difficulties filling open positions persist, the percentage of businesses describing few or no qualified job applicants fell to 50%, the lowest since January 2021. The fall brings it below the average of about 52 in the two years before the coronavirus pandemic.Fewer owners also reported difficulty filling open positions, with the figure falling three points from October to 40%, though the current pace of hiring remains weak.”The net percent of NFIB firms increasing employment has been negative since March, with more firms decreasing jobs than adding them,” the report said. “Openings remain elevated, but the surge in the economy did not bring a strong wave of workers to fill open positions.”As the Federal Reserve nears the close of its interest rate hiking cycle, 25% of owners surveyed paid a higher rate on their most recent loan, down three points from October. The outlook on business conditions has also been impacted by widespread economic uncertainty, according to the report.The portion of owners expecting better business conditions on a six-month basis rose one point to a net negative 42% in November. More

BEIJING (Reuters) -China will step up policy adjustments to support an economic recovery in 2024, state media said on Tuesday, following an agenda-setting meeting of the country’s top leaders.Investors are closely watching for clues on next year’s policy and reform agenda as Beijing has been struggling to spur a post-pandemic economic recovery amid a deepening housing crisis and mounting local government debt.China will focus on boosting effective demand next year, and make concerted efforts to expand domestic demand, state media said, citing the annual Central Economic Work Conference held from Dec. 11-12, during which top leaders set economic targets for 2024.“We must introduce more policies that are conducive to stabilising expectations, stabilising growth, and stabilising employment,” state media said, quoting top officials led by President Xi Jinping at the meeting.”It is necessary to strengthen counter-cyclical and cross-cyclical adjustments of macro policies, continue to implement a proactive fiscal policy and a prudent monetary policy, and strengthen innovation and coordination of policy tools.”The Politburo, a top decision-making body of the ruling Communist Party, said on Friday that fiscal policy would be moderately strengthened and will be “flexible, moderate, precise, and effective” to help spur the economic recovery.China plans to implement structural tax and fee cuts, and plans a new round of fiscal and tax reforms, state media said, adding that the government will improve the structure of fiscal spending to support strategic tasks.China will maintain reasonable and sufficient liquidity, and ensure that the scale of social financing and money supply match the expected goals of economic growth and price levels, according to state media.China will guide financial institutions to increase support for technological innovation, green transformation, inclusive small and micro businesses, and the digital economy.2024 GROWTH TARGET EYED Top leaders also pledged to “to facilitate stability through progress”, which may signal greater emphasis on growth, and “establish first before demolishing”, which could indicate more support for the troubled property sector.”To further promote economic recovery, we need to overcome some difficulties and challenges,” state media said. “The main problems are insufficient effective demand, overcapacity in some industries, weak public expectations, and many hidden risks.”Last week, Ratings agency Moody’s (NYSE:MCO) slapped a downgrade warning on China’s credit rating, saying costs to bail out debt-laden local governments and state firms and control its property crisis would weigh on the growth outlook.Prior to the meeting, government advisers had told Reuters they would recommend economic growth targets for 2024 ranging from 4.5% to 5.5%, with the majority favouring a target of around 5% – the same as this year.The government may set a growth target of around 5% for 2024 sources said. Hitting such targets would require Beijing to step up stimulus given that this year’s growth has been flattered by last year’s low-base effect of COVID-19 lockdowns, analysts say.Top leaders traditionally endorse a growth target at the December meeting, which is then publicly announced at the opening of the annual parliament meeting, usually held in March.China’s growth is see on track to hit the government’s target of around 5% this year.China will speed up the establishment of a new model of property development, quickening construction of affordable housing, and coordinate the resolution of local debt risks and stable development, according to state media. More

BUENOS AIRES (Reuters) – Argentina’s new government will lay out its economic “shock” therapy plans on Tuesday afternoon in a bid to rein in triple-digit inflation and rebuild depleted foreign currency reserves, with markets and ordinary Argentines on tenterhooks about the impact.Economy Minister Luis Caputo will announce the measures after markets close around 5 p.m. (2000 GMT), the spokesman for libertarian President Javier Milei, who took office on Sunday, told a news conference. They are expected to include sharp cuts to state spending, a reduction of the size of the public sector and a potential sharp devaluation of the local peso. The currency is currently kept artificially strong by strict capital controls.The measures would be in “in-line” with Milei’s campaign pledges, where he often appeared with a chainsaw to represent his planned cuts, presidential spokesman Manuel Adorni said, adding it was needed to avoid “deeper catastrophe”.On Tuesday trading in the peso in the official market was expected to be very restricted, as it had been on Monday, with the central bank allowing trades only on a priority basis, a source from the bank told Reuters.The person said that “the exchange rate movement will be the same as yesterday until the measures are announced”.Analysts polled by Reuters expect the official exchange rate to weaken sharply in the near future to around 650 per dollar, from around 365 currently. In parallel markets dollars trade for closer to 1,000 pesos.The central bank’s new leadership was confirmed overnight in the official gazette, formalising the appointment of Santiago Bausili, a close ally of Caputo, to replace outgoing bank president Miguel Pesce. More