Economy

“Many are worried that the Fed might be acting too aggressively and maybe tip the economy into recession,” San Francisco Fed President Mary Daly said in an interview on LinkedIn. “I am myself worried that left unbridled, inflation would be a major constraint and threat to the U.S economy and continued expansion.”The Fed, she said, is therefore “tapping the brakes” by raising interest rates to cool demand.”We are working towards that as quickly as we possibly can, and hopefully Americans everywhere will start to see some relief in their pocketbooks,” she said, adding that she expects the economy to slow but not stop growing.The Fed earlier this month raised rates by three-quarters of a percentage point — its biggest rate hike since 1994 — to a range of 1.5%-1.75% to battle inflation that is at a 40-year high. Daly last week said she believes another 75 basis-point rate hike next month will be warranted, though on Tuesday she was not asked specifically about July’s meeting.New York Federal Reserve Bank President John Williams also said he sees the need to act decisively to curb inflation.”We need to move expeditiously,” Williams said in an interview on CNBC. “In terms of our next meeting I think 50 (basis points) or 75 is clearly going to be the debate.” Both Daly and Williams said they expect the unemployment rate to move up a few tenths of a percentage point, from its current 3.6% level, but they both said the labor market is strong and the economy has enough momentum that they do not expect a recession.In an essay published Tuesday https://www.stlouisfed.org/publications/regional-economist/2022/june/getting-ahead-of-inflation-lesson-1974-1983, St. Louis Fed President James Bullard pointed to two past examples, in 1983 and 1994, when the Fed raised rates but did not trigger a recession, and said the central bank should aim to follow that example.The Fed’s “forward guidance that additional policy rate increases are likely in coming months is a deliberate step to help the FOMC more quickly move policy as necessary to bring inflation back in line with the Fed’s 2% target,” Bullard wrote.The Federal Open Market Committee, known as the FOMC, is the Fed’s policy-setting body.U.S. consumer confidence dropped to a 16-month low in June on worries about inflation, data from the Conference Board showed Tuesday, a signal that Daly said she is watching closely.”Getting people to feel comfortable that the dollar they earn today will pay for the goods they want tomorrow — that is no longer something people feel that confident in, and we’ve got to restore that confidence,” she said. More

The debt stock reached 5.702 trillion reais ($1.08 trillion) in May after it had increased 0.45% in April over the previous month. April data had not yet been published due to a protest for higher salaries by Treasury employees.According to the Treasury, the average interest rate on the domestic federal debt grew to 11.69% against 11.29% in April, its highest level since May 2017, amid appreciation in inflation-linked and interest rate bonds.The Brazilian central bank has already raised its key interest rate to 13.25% from a record low of 2% in March last year, indicating there is room for another hike in its battle to tame double-digit inflation in Latin America’s largest economy.($1 = 5.2557 reais) More

Talking heads have spent much of the past month reviving the post-financial-crisis mantra that bad economic news is good news for markets, and vice versa. Their chorus reached fever pitch last week. Deep breath now:Last week’s gloomy US and European PMI numbers suggest “a sharp downturn” in both regions, says Ben Seager-Scott of advisory group Evelyn Partners. “But bad news might be good news” if that means central banks no longer have to tighten as hard and fast as originally planned.Business expectations across the UK might be at their lowest ebb since May 2020, but fear not! “Growing evidence pointing towards a weakening real economy could slow the path of Bank of England rate rises,” says Adrian Lowery, analyst at investing platform Bestinvest.Florian Ielpo at Lombard Odier said last week’s decelerating macro data had boosted market valuations; analysts at ING noted that Jay Powell’s recession-mongering was “good news” for equities; while Solita Marcelli at UBS Global Wealth said almost exactly the same. In topsy-turvy marketland, talk of an impending recession and the likely hit to employment was enough to push the S&P 500 to its first week of gains in a month. The previously runaway S&P GSCI Commodity Index, on the other hand, fell 2.6 per cent, while 5 and 10-year US break-evens slipped further from their early-spring highs. As Charlie McElliot at Nomura writes, US policymakers now seem to be pushing the Fed to prioritise growth over fighting inflation — a shift encapsulated by senator Elizabeth Warren’s grilling of Jay Powell last week. “Inflation is like an illness,” she said . . . . . . and the medicine needs to be tailored to the specific problem, otherwise you could make things a lot worse. Right now, the Fed has no control over the main drivers of rising prices, but the Fed can slow demand by getting a lot of people fired and making families poorer. While President Biden is working to increase energy supplies, straighten out supply chain kinks and break up monopolies and bring down prices, you could actually tip this economy into recession. In other words, policymakers still hope there will be a so-called soft landing, and inflation will slow without a recession induced by an overzealous Fed. Yet there remains a risk that economies could end up with the worst of both worlds.

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The Bank for International Settlements on Monday laid out the danger as follows:The mix of high inflation, high and volatile commodity prices and significant geopolitical tensions bears an uncomfortable resemblance to past episodes of global stagflation. An uncertain growth outlook in China reinforces the downside risks. Unlike in the past, stagflation today would occur alongside heightened financial vulnerabilities, including stretched asset prices and high debt levels, which could magnify any growth slowdown.In such an environment, “bad news” might still be just that. More

Rishi Sunak is cooling on the idea of a windfall tax on electricity generators, with the UK chancellor increasingly likely to use broader reforms to electricity markets to prevent excess profits in the industry, senior government figures have said.The chancellor announced in May that the Treasury was examining “appropriate steps” to ensure that the electricity generation sector contributed to a £15bn support package for households hit with rising bills.Officials had briefed that electricity companies could be hit with a windfall tax — similar to one already imposed on UK oil and gas producers — that would raise £3bn-£4bn.One minister told the Financial Times that the government was increasingly worried about the “perverse consequences” of applying a windfall tax.“A lot of companies are telling us they’ll cut investment if we go ahead with the tax,” he said. Another senior figure said that Downing Street had pushed back against the proposal that it first announced a month ago.Billions of pounds have been wiped off the value of London-listed electricity companies since the FT first revealed Sunak’s plans for a windfall tax on the sector.But since then officials have privately signalled to the industry that the plan was proving to be too complicated to instigate.The electricity sector is diverse, ranging from gas-fired power to offshore wind farms, and generators sell their output under a multitude of different contracts. Many have argued that they often sell their electricity far in advance so have not benefited from current high market prices.Some of the biggest electricity companies, including the UK’s SSE and RWE of Germany, have pushed back against a windfall tax. They have warned that it would deter investment in clean energy technologies, which the government is relying on to increase the country’s domestic energy supplies following Russia’s invasion of Ukraine and to reach longer-term climate goals.Sunak said he wanted to tax the excess profits generated by the industry because companies producing nuclear or wind energy were receiving windfall profits due to the price of electricity being closely linked to gas, which has soared in recent months.The government had already signalled in April that it wanted to carry out “comprehensive” reforms of the electricity market, which would decouple electricity prices from those of gas.Now there is a growing belief in government that those reforms could be another way to tax excess profits in the industry without some of the downsides of a straightforward windfall tax, although they could take much longer to implement.Business secretary Kwasi Kwarteng said on Tuesday the fact that the price of electricity was directly related to the marginal cost of gas made sense 40 years ago when most electricity came from coal and gas.“In the 2020s . . . we have a huge diversity of sources of power. So the price you’re paying doesn’t reflect — if it’s being priced off the marginal cost of gas — it doesn’t reflect the cost of generation,” he told the House of Commons business, energy and industrial strategy select committee.Kwarteng said officials were “trying to work at pace” on the electricity market reforms and were looking at two alternative approaches.One was a “bifurcated” market through which renewables would be priced differently to gas-fired power stations. Another alternative would be to look at the average cost of generation across different technologies, he told MPs.“It cannot be the case that we can forever link directly our electricity prices to gas prices when gas is only a portion of the electricity generating mix,” he added.Oil and gas operators lambasted Sunak in Aberdeen last week after he raised taxes on their profits from 40 per cent to 65 per cent.Trade body Offshore Energies UK wrote to the chancellor on Tuesday warning that some banks had reduced oil and gas operators’ borrowing capacity by 15 to 20 per cent in response to Sunak’s so-called energy profits levy, which was “acutely impacting companies that rely on debt capacity to fund and grow their business”.A government spokesperson said: “As the chancellor announced last month . . . we are consulting with the power generation sector and investors to drive forward energy market reforms and ensure that the price paid for electricity is more reflective of the costs of production.“Those reforms will take time to implement, so in the meantime, we are evaluating the scale of these extraordinary profits and the appropriate steps to take.” More

New York Federal Reserve President John Williams told CNBC the economy is likely to avoid recession even with higher interest rates.
The Fed has been raising rates to control inflation, and Williams said that will continue as “we’re far from where we need to be.”

New York Federal Reserve President John Williams said Tuesday he expects the U.S. economy to avoid recession even as he sees the need for significantly higher interest rates to control inflation.
“A recession is not my base case right now,” Williams told CNBC’s Steve Liesman during a live “Squawk Box” interview. “I think the economy is strong. Clearly financial conditions have tightened and I’m expecting growth to slow this year quite a bit relative to what we had last year.”

Quantifying that, he said he could see gross domestic product gains reduced to about 1% to 1.5% for the year, a far cry from the 5.7% in 2021 that was the fastest pace since 1984.
“But that’s not a recession,” Williams noted. “It’s a slowdown that we need to see in the economy to really reduce the inflationary pressures that we have and bring inflation down.”
The most commonly followed inflation indicator shows prices increased 8.6% from a year ago in May, the highest level since 1981. A measure the Fed prefers runs lower, but is still well above the central bank’s 2% target.

‘Far from where we need to be’

In response, the Fed has enacted three interest rate increases this year totaling about 1.5 percentage points. Recent projections from the rate-setting Federal Open Market Committee indicate that more are on the way.
Williams said it’s likely that the federal funds rate, which banks charge each other for overnight borrowing but which sets a benchmark for many consumer debt instruments, could rise to 3%-3.5% from its current target range of 1.5%-1.75%.

He said “we’re far from where we need to be” on rates.
“My own baseline projection is we do need to get into somewhat restrictive territory next year given the high inflation, the need to bring inflation down and really to achieve our goals,” Williams said. “But that projection is about a year from now. Of course, we need to be data dependent.”
Some data points lately have pointed to a sharply slowing growth picture.
While inflation runs at its highest level since the Regan administration, consumer sentiment is at record lows and inflation expectations are rising. Recent manufacturing surveys from regional Fed offices suggest activity is contracting in multiple areas. The employment picture has been the main bright spot for the economy, though weekly jobless claims have been ticking slightly higher.
An Atlanta Fed gauge that tracks GDP data in real time is pointing to just a 0.3% growth rate for the second quarter after a 1.5% decline in Q1.
Williams acknowledged that “we’re going to have lower growth, but still growth this year.”
In addition to rate hikes, the Fed has begun to shed some of the assets on its balance sheet — particularly Treasurys and mortgage-backed securities. The New York Fed is in the early stages of a program that eventually will see the central bank allow up to $95 billion in proceeds from maturing bonds roll off each month.
“I’m not seeing any signs of a taper tantrum. The markets are functioning well,” Williams said.
A St. Louis Fed indicator of market stress is running around record lows in data that goes back to 1993.

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We have now moved into a third epoch in the history of the postwar global economic order. The first went from the late 1940s to the 1970s and was characterised by liberalisation, principally among the high-income countries closely allied to the US in the context of the cold war. From the 1980s and especially after the fall of the Soviet Union, more radical forms of economic liberalism, known as “neoliberalism”, spread across the world. The creation of the World Trade Organization in 1995 and the accession of China in 2001 were high water marks of this second era.We are now moving into a new era of world disorder, marked by domestic mistakes and global friction. Domestically, there has been a failure, particularly in the US, to adopt policies that cushion the adjustments to economic change and provide security and opportunity for those adversely affected. The rhetorical ploys of nationalism and xenophobia have instead focused anger on “unfair” competitors, especially China. In the US, the idea of strategic competition with China has also become increasingly bipartisan, while China itself has become more repressive and inward-looking. With the war in Ukraine, these divisions have deepened.How in such a world might a liberal trading order be sustained? “With great difficulty” is the answer. Yet so much is at stake for so many that everybody who has influence must try.Fortunately, a large number of less powerful countries understand what is at stake. They should be willing to take the initiative, so far as possible, regardless of what the battling superpowers decide to do. In this context, even the limited successes of the WTO ministerial meeting in Geneva are significant. They have at the least kept the machine working.It is more important, however, to clarify and then tackle the more fundamental challenges to the liberal trading system. Here are five of them.First, sustainability. Managing the global commons has become humanity’s most important collective challenge. Trade rules must be made fully compatible with this objective. The WTO is an obvious forum for tackling destructive subsidies, notably for fishing. More broadly, it must be compatible with enlightened policies, such as carbon pricing. Border price adjustments, needed to prevent shifting of production to locations without appropriate pricing, are both an incentive and a penalty. These must be combined with large-scale assistance to developing countries with the climate transition.Second, security. Here one must distinguish the economic from the more strategic and the issues business can handle from those that must concern governments. Supply chains have, for example, shown a lack of robustness and resilience. Businesses need to achieve greater diversification. But this is also costly. Governments may help by monitoring supply chains at the industry level. But they cannot do the job of managing such complex systems.Governments do have a legitimate interest in whether their economies are over-reliant on imports from potential enemies, as Europe is on gas from Russia. Similarly, they must be concerned with technological development, especially in areas relevant to national security. A way to go about this is to construct a negative list of products and activities deemed of security interest, exempting them from standard rules of trade or investment, but keeping the latter for the rest.Third, blocs. Janet Yellen, US Secretary of the Treasury, has recommended “friendshoring” as a partial response to security concerns. Others recommend regional blocs. Neither makes sense. The former assumes “friends” are forever and would exclude most developing countries, including strategically vital ones: is Vietnam friend, foe or neither? It would also create uncertainty and impose heavy costs. Similarly, the regionalisation of world trade would be expensive. Above all, it would lock North America and Europe out of Asia, the world’s most populous and most economically dynamic region, effectively leaving it to China. This idea is an economic and strategic nonsense.Fourth, standards. Debates over standards have become a central element in trade negotiations, too often by imposing the interests of high-income countries on others. A controversial example is intellectual property, where the interests of a limited number of western companies are decisive. Another is labour standards. Yet there are also areas where standards are essential. In particular, as the digital economy develops, shared data standards will be needed. In their absence, global commerce will be substantially thwarted by incompatible requirements. This, by the way, was why the EU single market required the substantial regulatory harmonisation that the Brexiters loathed.Finally, domestic policy. Sustaining an open trading system will be impossible without better domestic institutions and policies aimed at educating the public on the costs of protection and helping all those adversely affected by big economic changes. In their absence, an ill-informed nationalism is bound to sever the bonds of commerce, which have brought such benefits to the world.This new epoch of the world is creating huge challenges. It is possible — perhaps even probable — that the world system will shatter. In such a world, billions of people will lose hope of a better future and shared global challenges will remain unmet. World trade is only one element in this picture. But it is an important one. The idea of liberal trade subject to multilateral rules was noble. It must not be allowed to perish. If the US cannot help, others [email protected] Martin Wolf with myFT and on Twitter More

Christine Lagarde said the European Central Bank would act in “a determined and sustained manner” to tackle record inflation in the eurozone, especially if there were signs of price expectations rising sharply among consumers and businesses. “Inflation in the euro area is undesirably high and it is projected to stay that way for some time to come,” the ECB president told its annual forum in Sintra, Portugal, on Tuesday, in a hardening of her comments on price growth. “This is a great challenge for our monetary policy.”“Inflation pressures are broadening and intensifying,” Lagarde added. Eurozone wage growth was expected to double to 4 per cent this year, she said, adding that supply bottlenecks were likely to be persistent and there was no sign of an end to high energy and commodity prices caused by Russia’s invasion of Ukraine.The ECB is planning to start raising rates in July for the first time since 2011, and Lagarde on Tuesday stuck to the bank’s plan to begin with a quarter percentage point increase before a bigger move in September unless there is a rapid improvement in the inflation outlook. The bank will also stop buying more bonds from Friday in response to record annual inflation in the eurozone of 8.1 per cent in May, quadruple the ECB’s 2 per cent target.While most western central banks have started raising rates, the ECB’s benchmark deposit rate remains at minus 0.5 per cent, though it has said it expects this to rise above zero in September.Lagarde said the ECB needed to act “in a determined and sustained manner, incorporating our principles of gradualism and optionality” — a shift from her previous comments that had put more emphasis on a commitment to raise rates only “gradually”.There were “clearly conditions in which gradualism would not be appropriate”, said the ECB president. These included a “de-anchoring” of inflation expectations or “a more permanent loss of economic potential that limits resource availability” — such as one caused by a cut-off of Russian energy supplies to Europe — and would require it “to withdraw accommodation more promptly to stamp out the risk of a self-fulfilling spiral”.Eurozone rate-setters face a difficult balancing act between reversing almost a decade of ultra-loose monetary policy to address soaring prices while trying to avoid another debt crisis in Europe after borrowing costs rose sharply in weaker countries such as Italy.Some hawkish rate-setters plan to push for a bigger rate rise of 50 basis points in July if price pressures keep rising. “If we see that the situation has worsened, that inflation is high and we see negative news in terms of inflation expectations, then in my view front-loading the increase would be a reasonable choice,” Mārtiņš Kazāks, Latvia’s central bank governor, told Bloomberg TV.This month, the ECB called an emergency meeting to announce it was speeding up work on a new instrument to tackle divergence in the region’s bond markets as it tried to prevent borrowing costs from rising so high that they risked triggering a financial crisis.

Without giving new details of the planned new instrument, Lagarde said it would “have to be effective while being proportionate and containing sufficient safeguards to preserve the impetus of member states towards a sound fiscal policy”.She said a new “anti-fragmentation” bond-buying tool could be designed to keep it separate from its other monetary policy instruments and to avoid one interfering with the other. “There is no trade-off between launching this new tool and adopting the necessary policy stance to stabilise inflation at our target. In fact, one enables the other.” Lagarde said that from the start of July, the ECB would start tackling any “unwarranted fragmentation” in bond markets by using flexibility in the way it reinvests the proceeds of bonds that mature in the €1.7tn portfolio of assets bought to counter the impact of the coronavirus pandemic.Economists are concerned that rising interest rates could tip the eurozone economy into a painful period of stagflation, especially if Russia continues to squeeze its supply of natural gas and forces governments to ration energy supplies for industry.Lagarde said the erosion of households’ spending power by high inflation could hit demand and “test the resilience of the labour market and possibly temper the expected rise in labour income”. But she added that, although the ECB had downgraded its growth forecasts earlier this month, it still expected “positive growth rates due to the domestic buffers against the loss of growth momentum”. More

New tax data reveal a steep population loss in 2020, toward the start of the pandemic. The exodus was temporary, but how much of its effects could be permanent?When roughly 300,000 New York City residents left during the early part of the pandemic, officials described the exodus as a once-in-a-century shock to the city’s population.Now, new data from the Internal Revenue Service shows that the residents who moved to other states by the time they filed their 2019 taxes collectively reported $21 billion in total income, substantially more than those who departed in any prior year on record. The IRS said the data captured filings received in 2020 and as late as July 2021.Many new or returning residents have since moved in. But the total income of those who had initially left was double the average amount of those who had departed over the previous decade, a potential loss that could have long-term effects on a city that relies heavily on its wealthiest residents to support schools, law enforcement and other public services.The sheer number of people who left in such a short period raises uncertainty about New York City’s competitiveness and economic stability. The top 1 percent of earners, who make more than $804,000 a year, contributed 41 percent of the city’s personal income taxes in 2019.About one-third of the people who left moved from Manhattan, and had an average income of $214,300. No other large American county had a similar exodus of wealth.Early in the pandemic, Sam Williamson, 51, a white-collar defense lawyer living on the Upper West Side of Manhattan, first relocated to Utah, then to Long Island. After a return to the city, he and his family permanently moved to Miami last year when his law firm opened an office there.“I love New York City, but it’s been a challenging time,” Mr. Williamson said. “I didn’t feel like the city handled the pandemic very well.”The average income of city residents who moved out of state was 24 percent higher than of those who moved the year prior, according to a New York Times analysis of federal tax returns that were due in 2020. It was the biggest one-year income increase among people who left the city for other states in at least a decade.The tax data is in line with the most recent Census Bureau estimates, which showed that in the first year of the pandemic, the number of New York City residents who left was more than triple the typical annual outflow before the pandemic. International immigration, a key source of growth in New York, plummeted to one-fourth the level prepandemic. And the death rate surged, as approximately 17,000 more residents died than in a typical year.All of this led to a loss of about 337,000 people in New York City between April 2020 and June 2021, according to census estimates, a startling drop after the city’s population reached 8.8 million residents, a record high, in early 2020.New York City’s official demographers say that the pandemic was a blip in the city’s long-term population growth and that migration trends have returned to prepandemic levels, pointing to indicators like change-of-address requests and soaring rents that suggest people are flooding back.But, they said, it is too soon to conclude when the population that was lost will be completely replaced.And other indicators suggest flight from the city may be continuing. Public school enrollment this year is down 6.4 percent compared with before the pandemic, according to New York City Department of Education data, and private school enrollment decreased by 3 percent, according to state data, potentially signaling a reduction in the number of families that could hurt the city’s ability to foster a diverse work force.“All of these are underlying trends that are concerning,” said Andrew Rein, president of the Citizens Budget Commission, a nonpartisan fiscal watchdog. “We don’t know what this means permanently, but things have shifted in a way that should give anybody looking at this some serious pause.”In the years before 2019, the people who left and the people who stayed in New York City had similar average incomes, the IRS data showed. But during the pandemic, the residents who moved had average incomes that were 28 percent higher than the residents who stayed.Still, New York City collected more tax revenue in both 2020 and 2021 than in 2019, thanks in part to at least $16 billion in federal pandemic aid.The outlook for this year has become much less certain as the stock market has plummeted in recent months and certain forms of federal aid, like stimulus checks and expanded unemployment benefits, have ended.The city’s Independent Budget Office said it was not possible to calculate the tax revenue lost from the people who had moved because some of them could be working remotely for New York-based companies and paying city income tax. In the long term, the office said, their tax status could become a major policy issue as states fight for their share of taxes from remote workers.Sophia and Charlie Blackett relocated last year to Rowayton, Conn., from Brooklyn, partly because both of their jobs in tech allowed them to permanently work from home. Ms. Blackett, 27, had previously considered raising children in the city, but the confinement of the pandemic shifted her thinking.“I used to thrive on the hustle and bustle,” she said. Now, she said, “I think about waking up in my bed in an apartment, and I just feel a little bit anxious.”The issue has become a talking point in the governor’s race. Gov. Kathy Hochul, a moderate Democrat, said earlier this year that the steep population drop in New York State, driven by the city losses, was “an alarm bell that cannot be ignored.” Representative Tom Suozzi of Long Island, a centrist challenging her in this month’s primary, has blamed the exodus on crime, high taxes and an unaffordable cost of living.Gergana Ivanova, 28, a clothing designer and social media influencer, said her decision to move to Miami was less about taxes. The pandemic made the downsides of living in New York City more noticeable, she said, including the lack of space in her tiny Queens apartment and the trash piling up on the sidewalks. She felt less safe walking around when the streets were emptier.“It didn’t feel happy and positive like it used to,” she said.Gergana Ivanova at Margaret Pace Park in Miami, where she moved from Queens.Scott McIntyre for The New York TimesUrban planners and economists have long debated the extent to which policymakers should be concerned about the outflow of New Yorkers to other states. Some see it as a positive sign of mobility for people who start their careers in New York, making way for new arrivals to inject vibrancy into neighborhoods.In a new report published Thursday, the Department of City Planning said federal immigration levels and change-of-address data from the Postal Service show that New York City’s population trends likely returned to prepandemic levels by the second half of 2021. And deaths from Covid-19 are significantly lower than early in the pandemic.Since the 1950s, New York City has had a net loss of residents to other states, but the population still grew because the number of immigrants and new births surpassed the number of people who moved away.The pandemic spurred a flight to many of the same suburbs that have long attracted New Yorkers seeking more space, including Connecticut’s Fairfield County and New Jersey’s Bergen and Essex Counties. But it also triggered residents to leave for more far-flung destinations, including Hawaii, the Florida Keys and ski towns in Colorado, Utah and Wyoming.Charlie and Sophia Blackett moved to Rowayton, Conn., from Brooklyn.Anthony Nazario for The New York TimesThe exodus to Florida was especially robust, and not just for the retiree crowd. In 2020, New York City had a net loss of nearly 21,000 residents to Florida, IRS data showed, almost double the average annual net loss from before the pandemic.The pandemic accelerated the relocation of several New York-based financial firms to new offices or headquarters in Florida. Many of them have landed in Palm Beach, Fla., including the hedge fund Elliott Management, whose co-chief executive, Jonathan Pollock, is now a full-time Florida resident, according to records obtained by The New York Times.The Manhattan residents who moved to Palm Beach County had an average income of $728,351, IRS data showed.Many New Yorkers also moved because they lost their jobs in the industries hardest hit by the pandemic. In New York City, the unemployment rate is almost double the nation’s, in part because the city still has at least 61,000 fewer leisure and hospitality jobs than before the pandemic, according to the most recent jobs report.Zak Jacoby was the general manager of a bar on the Lower East Side when the pandemic hit. Throughout 2020, his employment status fluctuated with the city’s changing indoor dining rules, a stressful period that put him on and off unemployment benefits.Mr. Jacoby, 37, flew to Miami in January 2021 to see a friend — and decided to stay permanently after getting a job offer at a local restaurant group. If there was another virus surge, he said, the state would be less likely to shut down businesses, giving him more job security.“My mind-set was, Florida’s more lenient on Covid, and there’s going to be less regulation,” he said.During his first six months in office, Mayor Eric Adams visited cities like Miami and Los Angeles as part of what he said were efforts to lure businesses and residents back to New York.Jonathan Koplovitz, 53, an executive at an automotive engineering and design start-up, is among the residents who came back.As the virus began sweeping through New York, Mr. Koplovitz and his family moved from their apartment in Manhattan’s Chelsea neighborhood to Aspen, Colo., the upscale ski resort town. Expecting to stay permanently, they bought a home about a mile from the ski lifts, where his two teenage sons finished the rest of the school year with virtual classes.But on a trip back to New York, he found the city to be far more vibrant than the darkest days of the pandemic. Once in-person schooling resumed in fall 2020, the family decided to return.“There’s no place like New York,” Mr. Koplovitz said. More