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    The Pandemic Is Testing the Federal Reserve’s New Policy Plan

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    Year 1 of the Fed’s framework, unveiled at its Jackson Hole conference in 2020, has included high inflation and job market healing. Now comes the hard part.When Jerome H. Powell speaks at the Federal Reserve’s biggest annual conference on Friday, he will do so at a tense economic moment, as prices rise rapidly while millions of jobs remain missing from the labor market. That combination promises to test the meaning of a quiet revolution the central bank chair ushered in one year ago.Mr. Powell used his remarks at last year’s conference, known as the Jackson Hole economic symposium and held by the Federal Reserve Bank of Kansas City, to announce that Fed officials would no longer raise interest rates to cool off the economy just because joblessness was falling and inflation was expected to heat up. They first wanted proof that prices were climbing sustainably, and they would welcome gains slightly above their 2 percent goal.He was laying groundwork for a far more patient Fed approach, acknowledging the grim reality that across advanced economies, interest rates, growth and inflation had spent the 21st century slipping lower in a strength-sapping downward spiral. The goal was to stop the decline.But a year later, that backdrop has shifted, at least superficially. Big government spending in response to the pandemic has pushed consumption and growth higher in the United States, and inflation has rocketed to levels not seen in more than a decade. The labor market is swiftly healing, though it has yet to fully recover. Now it falls to Mr. Powell to explain why full-blast support from the Fed remains necessary.Investors initially expected Mr. Powell to use Friday’s remarks at the Jackson Hole conference to lay out the Fed’s plan for “tapering” — or slowing down — a large-scale bond buying program it has been using to support the economy. Fed officials are debating the timing of such a move, which will mark their first step toward a more normal policy setting. But after minutes from the central bank’s July meeting suggested that the discussion remained far from resolved, and as the Delta variant pushes coronavirus infections higher and threatens the economic outlook, few now anticipate a clear announcement.“Two to three months ago, people were expecting the whole taper plan at Jackson Hole,” said Priya Misra, head of global rates strategy at TD Securities. “Now, it’s more the economic outlook that people are struggling with.”While Mr. Powell expects price increases to fade, he has been clear that the Fed will act to choke off inflationary pressures if they don’t abate.An Rong Xu for The New York TimesMr. Powell’s speech, which will be virtual, could instead give him a chance to explain how the Fed is thinking about Delta variant risks, recent rapid inflation and labor market progress — and how all three square with the central bank’s policy approach.The Fed is buying $120 billion in government-backed bonds each month, and it has kept its main interest rate near zero since March 2020. Both policies make borrowing cheap, fueling spending by businesses and households and bolstering the labor market.Officials have clearly linked their interest rate plans to their new framework: They said in September that they would not lift rates until the job market reached full employment. Bond buying ties back less directly, but it serves as a signal of the Fed’s continued patience.Critics of the Fed’s wait-and-see stance have questioned whether it is wise for the Fed to buy mortgage-backed and Treasury debt at a rapid clip when home prices have soared and inflation has been taking off. Republican lawmakers and some prominent Democrats alike have worried that the Fed is being insufficiently nimble as economic conditions change.“They chose a framework that was designed to provide a commitment to a highly dovish policy,” said Lawrence H. Summers, a Treasury secretary in the Clinton administration and an economist at Harvard University. “The problem morphed into overheating being the big concern, rather than underheating.”Inflation jumped to 4 percent in June, based on the Fed’s preferred measure. Most economists expect rapid price gains to fade as pandemic-related supply bottlenecks clear up, but it is unclear how quickly and fully that will happen.And while there are still nearly seven million fewer jobs than there were before the pandemic, unfilled positions have jumped, wages for lower earners are taking off, and employers widely complain about being unable to hire enough workers. If labor costs remain higher, that, too, could cause longer-lasting inflation pressures.Some Fed officials would prefer to slow bond purchases soon, and fast, so that the central bank is in a position to raise interest rates next year if price pressures do become pernicious.Other policymakers see today’s rising prices and job openings as trends that are destined to abate. Companies will work through supply-chain disruptions, and consumers will spend away savings they amassed from government stimulus checks and months stuck at home. Workers will settle into jobs. When things return to normal, they reason, the tepid inflation of years past will probably return.Given that view, and the fact that the labor market is still missing so many positions, they argue that the Fed’s new policy paradigm calls for patience.At the central bank’s meeting in late July, minutes showed, a few officials fretted that the Fed “would need to be mindful of the risk that a tapering announcement that was perceived to be premature could bring into question the committee’s commitment to its new monetary policy framework.”Mr. Powell typically tries to balance both concerns in his public remarks, acknowledging that inflation could remain elevated and pledging that the Fed will react if it does. But he has also emphasized that recent price pops are more likely to fade and that the central bank would prefer to remain helpful as the labor market healed.But in the months ahead, the Fed will need to make actual decisions, putting the meaning of its new framework to a very public test. Economists generally expect the central bank to announce a plan to slow its bond purchases in November or December.Once that taper is underway, attention will turn to interest rates, most likely with inflation still above 2 percent and the labor market recovery still at risk. When the Fed lifts rates will determine just how transformative the new policy framework has been.As of the Fed’s June economic forecasts, most officials did not expect to raise borrowing costs from rock bottom until 2023. If that transpires, it will be a notable shift from years past, one that allows the labor market to heal much more completely before significantly removing monetary help.In 2015, when the Fed last lifted interest rates from near zero, the joblessness rate was 5 percent and 77 percent of people between the ages of 25 and 54 worked. Already, joblessness is 5.4 percent and 78 percent of prime-age adults work.In fact, Fed officials projected that rates would remain on hold even as joblessness fell to 3.8 percent by the end of next year — below their estimate of the rate consistent with full employment in the longer run, which is about 4 percent.“That’s the most exciting part of what’s changed: They’re shooting for an ambitious prepandemic labor market,” said Skanda Amarnath, executive director of Employ America, a group that tries to persuade economic policymakers to focus on jobs. “Some fig leaf of progress is not enough.”But risks loom in both directions.If inflation remains high and an overly sanguine Fed has to rapidly reverse course to try to contain it, that could precipitate a painful recession.But if the Fed withdraws support unnecessarily, the labor market could take longer to heal, and investors might see the changes that Mr. Powell announced last year as a minor tweak rather than a meaningful commitment to raising inflation and fostering a more inclusive labor market.In that case, the economy might plunge back into a cycle of long-run stagnation, much like the one that has confronted Japan and much of Europe.“This is going to be an episode that will test the patience and credibility of the Federal Reserve,” said David Wilcox, a former Fed staff official who is now director of U.S. economics research at Bloomberg Economics. 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    What an Adult Tricycle Says About the World’s Bottleneck Problems

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    The supply-chain problems rocking companies may get worse heading into the holidays, as delays continue to snarl global trade and shipping prices jump even higher.Catrike has 500 of its three-wheeled bikes sitting in its workshop in Orlando, Fla., nearly ready to be sent to expectant dealers. The recumbent trikes have been waiting for months for rear derailleurs, a small but crucial part that is built in Taiwan.“We’re sitting on $2 million in inventory for one $30 part,” said Mark Egeland, the company’s general manager.The company’s problems offer a window into how supply-chain disruptions are rocking companies in the United States and around the world, pushing inflation higher, delaying deliveries and exacerbating economic uncertainty.It is unclear when the snarls will clear up — and it’s possible they will get worse before they get better. The holiday season is right around the corner, American companies are running light on inventory, and coronavirus outbreaks continue to shut factories around the world. Demand for goods remains strong as households use money saved during months stuck at home to buy athletic equipment, couches and clothing.That could keep pressure on global goods producers and the transportation routes that serve them even as consumers begin to redirect their spending back toward dinners out and theater tickets — a shift that many analysts had hoped would help supply chains return to normal.The critical questions for economic policymakers are how long the problems will last and how much they will feed into consumer prices, which have jumped sharply this year, both because of data quirks and bottlenecks. Federal Reserve officials regularly say they expect the faster price gains to prove “transitory,” but they are careful to stress that supply chains are a major source of lingering uncertainty, making it unclear how quickly rapid gains will fade.“I’m less in that ‘transitory’ camp,” said Phil Levy, the chief economist at Flexport, which tracks ocean shipments and helps importers plan so that their parts can get in by desired dates. “And more in the ‘we have reason to be concerned’ camp.”Container costs have rocketed up. Earlier this month, container shipping rates from China and East Asia to the United States’ East Coast climbed above $20,000, compared with about $4,000 a year ago, according to data from the freight-tracking firm Freightos. Those attractive high prices are encouraging ships to abandon other routes, causing the problem to spread. And shipping issues have been exacerbated by related imbalances: Boats are backing up at ports, and as demand for goods booms in the United States, empty shipping containers haven’t been able to get back to China fast enough.Chris Miller assembling a wheel for a Catrike. The company thinks that sorting out its supply issues could take 12 to 18 months.Octavio Jones for The New York TimesSome suppliers are eating higher production and transport costs. Full Speed Ahead, which produces crank sets for Catrike, has seen expenses increase as the demand for raw aluminum has risen. Shipping costs are also four to five times what they were a year ago, said Mark Vandermolen, the company’s managing director.Full Speed Ahead has passed “very little, if any at all,” of those cost increases on to customers, he said, and he hopes to “maintain pricing for as long as possible until it is no longer sustainable.”But not all of Catrike’s suppliers have absorbed climbing costs, and whether higher prices for components make for more expensive consumer products — actual inflation, as it is conventionally measured — depends on how companies like Catrike and the dealers they work through decide to adjust.Catrike raised prices by $200 early this year, its first adjustment since 2010, to cover costs. But the company is at a “sweet spot” where it’s outperforming competitors by offering affordable products, so it would prefer to leave prices steady now, Mr. Egeland said.He’s also cautious: Catrike hasn’t printed prices in its newest catalog, in case rising expenses make another increase necessary.The Fed — which has primary responsibility for keeping inflation steady — has made clear that it is content to look past a recent pop in inflation. If companies lift prices once or twice amid reopening challenges, the central bank can tolerate that as a one-off change.Officials would worry more if price increases dragged on for months or years. If that happens, consumers and businesses alike could come to expect consistently higher prices. They might demand higher pay, and a cycle of inflationary increases could take off.It will take time to know whether the bottlenecks will lead to more permanent damage. Supply chains are still badly snarled. The time it takes for parts from one of Catrike’s suppliers to arrive by sea in North America from a factory in Indonesia has jumped to three months, and sometimes it takes four — double what it took before. Estimates from Flexport confirm the problem is widespread along that shipping route. More

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    China’s Vaccine Diplomacy Stumbles in Southeast Asia

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    Several Southeast Asian nations are raising doubts about the efficacy of China’s vaccines. The Biden administration has recently offered to provide shots, “no strings attached.”SINGAPORE — The arrival of the Chinese vaccines was supposed to help stop the spread of the coronavirus in Southeast Asia.Instead, countries across the region are quickly turning elsewhere to look for shots.Residents in Thailand vaccinated with one dose of China’s Sinovac are now given the AstraZeneca shot three to four weeks later. In Indonesia, officials are administering the Moderna vaccine as a booster to health care workers who had received two doses of Sinovac.Malaysia’s health minister said the country would stop using Sinovac once its supply ran out. Even Cambodia, one of China’s strongest allies, has started using AstraZeneca as a booster for its frontline workers who had taken the Chinese vaccines.Few places benefited from China’s vaccine diplomacy as much as Southeast Asia, a region of more than 650 million that has struggled to secure doses from Western drugmakers. Several of these countries have recorded some of the fastest-growing number of cases in the world, underscoring the desperate need for inoculations.China, eager to build good will, stepped in, promising to provide more than 255 million doses, according to Bridge Consulting, a Beijing-based research company.Half a year in, however, that campaign has lost some of its luster. Officials in several countries have raised doubts about the efficacy of Chinese vaccines, especially against the more transmissible Delta variant. Indonesia, which was early to accept Chinese shots, was recently the epicenter of the virus. Others have complained about the conditions that accompanied Chinese donations or sales.The setback to China’s vaccine campaign has created a diplomatic opening for the United States when relations between the two countries are increasingly fraught, in part because of the coronavirus. China has criticized the American handling of the crisis at home and even claimed, with no evidence, that the pandemic originated in a military lab at Fort Detrick, Md., not in Wuhan, where the first cases emerged in late 2019.As more countries turn away from Chinese shots, vaccine aid from the United States offers an opportunity to restore relations in a region that American officials have mostly ignored for years while China extended its influence. The Biden administration has dispatched a crowd of senior officials, including Vice President Kamala Harris, who is scheduled to arrive on Sunday to visit Singapore and Vietnam. It has also, at last, made its own vaccine pledges to Southeast Asia, emphasizing that the American contribution of roughly 23 million shots as of this week comes with “no strings attached,” an implicit reference to China.Anti-China sentiment runs high in Vietnam, but the country accepted a donation of 500,000 doses of Sinopharm in June, causing a backlash among citizens who said they did not trust the quality of Chinese shots.Linh Pham/Getty ImagesSeveral countries in the region have been eager to receive the more effective, Western doses. Although they remain far outnumbered by Chinese shots, they present an attractive alternative. China’s “early head-start advantage has lost its magic already,” said Hoang Thi Ha, a researcher with the Asean Studies center of the ISEAS-Yusof Ishak Institute in Singapore.For most of the year, many developing countries in Southeast Asia did not have much of a choice when it came to vaccines. They struggled to acquire doses, many of which were being made by richer nations that have been accused of hoarding them.China sought to fill those needs. The country’s foreign minister, Wang Yi, traveled through the region in January, promising to help fight the pandemic. In April, he declared that Southeast Asia was a priority for Beijing. About a third of the 33 million doses that China has distributed free worldwide were sent to the region, according to the figures provided by Bridge Consulting.Much of Beijing’s focus has been directed at the more populous countries, such as Indonesia and the Philippines, and its longstanding allies like Cambodia and Laos.Indonesia was China’s biggest customer in the region, buying 125 million doses from Sinovac. The Philippines obtained 25 million Sinovac shots after the president, Rodrigo Duterte, said he had turned to Xi Jinping, China’s top leader, for help. Cambodia received more than 2.2 million of China’s Sinopharm doses. It has inoculated roughly 41 percent of its population, achieving the second-highest vaccination rate in the region, after Singapore.Then, signs started emerging that the Chinese vaccines were not as effective as hoped. Indonesia found that 10 percent of its health care workers had become infected with Covid-19 as of July, despite being fully vaccinated with the Sinovac shot, according to the Indonesian Hospital Association.In July, a virologist at Chulalongkorn University in Bangkok said a study of people who had received two doses of the Sinovac vaccine showed that their level of antibodies, 70 percent, was “barely efficacious” against the Alpha variant of the coronavirus, first detected in Britain, or against the Delta variant, first detected in India.The governments in both Indonesia and Thailand decided that they had to make a switch to other vaccines, like those provided by the United States, Britain and Russia.“Now that they have more choices, they can make other decisions,” said Nadège Rolland, senior fellow at the National Bureau of Asian Research in Washington. “I don’t think it’s politically motivated. I think it’s pragmatic.”Yaowares Wasuwat, a noodle seller in Thailand’s Bangsaen Chonburi Province, said that she hoped to get the AstraZeneca vaccine for her second shot after being inoculated with Sinovac, but that she would take whatever was available.“I have nothing to lose,” she said. “The economy is so bad, we are gasping for air. It’s like dying while living, so just take whatever protection we can.”Lloyd J. Austin III, the U.S. secretary of defense, met with President Rodrigo Duterte in Manila in July. The United States said it would deliver millions of doses of the Johnson & Johnson and Moderna vaccines to the country.Malacanang Presidential Photo/via ReutersChina’s early moves in the region stand in marked contrast with the United States, which was slow to provide assistance..css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-3btd0c{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-3btd0c{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-3btd0c strong{font-weight:600;}.css-3btd0c em{font-style:italic;}.css-w739ur{margin:0 auto 5px;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}#NYT_BELOW_MAIN_CONTENT_REGION .css-w739ur{font-family:nyt-cheltenham,georgia,’times new roman’,times,serif;font-weight:700;font-size:1.375rem;line-height:1.625rem;}@media (min-width:740px){#NYT_BELOW_MAIN_CONTENT_REGION .css-w739ur{font-size:1.6875rem;line-height:1.875rem;}}@media (min-width:740px){.css-w739ur{font-size:1.25rem;line-height:1.4375rem;}}.css-9s9ecg{margin-bottom:15px;}.css-16ed7iq{width:100%;display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-align-items:center;-webkit-box-align:center;-ms-flex-align:center;align-items:center;-webkit-box-pack:center;-webkit-justify-content:center;-ms-flex-pack:center;justify-content:center;padding:10px 0;background-color:white;}.css-pmm6ed{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-align-items:center;-webkit-box-align:center;-ms-flex-align:center;align-items:center;}.css-pmm6ed > :not(:first-child){margin-left:5px;}.css-5gimkt{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:0.8125rem;font-weight:700;-webkit-letter-spacing:0.03em;-moz-letter-spacing:0.03em;-ms-letter-spacing:0.03em;letter-spacing:0.03em;text-transform:uppercase;color:#333;}.css-5gimkt:after{content:’Collapse’;}.css-rdoyk0{-webkit-transition:all 0.5s ease;transition:all 0.5s ease;-webkit-transform:rotate(180deg);-ms-transform:rotate(180deg);transform:rotate(180deg);}.css-eb027h{max-height:5000px;-webkit-transition:max-height 0.5s ease;transition:max-height 0.5s ease;}.css-6mllg9{-webkit-transition:all 0.5s ease;transition:all 0.5s ease;position:relative;opacity:0;}.css-6mllg9:before{content:”;background-image:linear-gradient(180deg,transparent,#ffffff);background-image:-webkit-linear-gradient(270deg,rgba(255,255,255,0),#ffffff);height:80px;width:100%;position:absolute;bottom:0px;pointer-events:none;}.css-uf1ume{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-box-pack:justify;-webkit-justify-content:space-between;-ms-flex-pack:justify;justify-content:space-between;}.css-wxi1cx{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-flex-direction:column;-ms-flex-direction:column;flex-direction:column;-webkit-align-self:flex-end;-ms-flex-item-align:end;align-self:flex-end;}.css-12vbvwq{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;}@media (min-width:740px){.css-12vbvwq{padding:20px;width:100%;}}.css-12vbvwq:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-12vbvwq{border:none;padding:10px 0 0;border-top:2px solid #121212;}.css-12vbvwq[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-12vbvwq[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-12vbvwq[data-truncated] .css-5gimkt:after{content:’See more’;}.css-12vbvwq[data-truncated] .css-6mllg9{opacity:1;}.css-qjk116{margin:0 auto;overflow:hidden;}.css-qjk116 strong{font-weight:700;}.css-qjk116 em{font-style:italic;}.css-qjk116 a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;text-underline-offset:1px;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:visited{color:#326891;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:hover{-webkit-text-decoration:none;text-decoration:none;}The calculus has now changed under President Biden. Both Lloyd J. Austin III, the American secretary of defense, and Antony J. Blinken, the secretary of state, had meetings with top officials in Southeast Asia in recent weeks. They noted the donations of roughly 20 million shots.After Mr. Austin visited the Philippines, Manila restored a defense agreement that had been stuck in limbo for more than a year after Mr. Duterte threatened to terminate it. The agreement, which would continue to allow American troops and equipment to be moved in and out of the Philippines, could thwart China’s goal to push the American military out of the region.Part of the reason for Mr. Duterte’s turnaround: the delivery of millions of doses of Johnson & Johnson and Moderna vaccines.Still, some Southeast Asian analysts have misgivings about Washington’s belated vaccine diplomacy.“The fact remains that the U.S. was really slow off the bat,” said Elina Noor, director of political-security affairs at the Asia Society Policy Institute. “And given that rich countries were hoarding vaccines when they became available, I think that sour taste still lingers.”China continues to be seen to be a reliable supplier for the vaccines it has produced. It has delivered 86 percent of the doses that it has promised to sell. And there remain concerns that the American companies have been slow to make deliveries. For those reasons, most Southeast Asian countries have not openly criticized China — and have not abandoned Chinese vaccines.Anti-China sentiment runs high in Vietnam, but the country accepted a donation of 500,000 doses of Sinopharm in June, causing a backlash among citizens who said they did not trust the quality of Chinese shots.“Even right in the middle of this emergency, I have no reason to trade my life or my family’s for a Chinese vaccine,” said Nguyen Hoang Vy, a manager for health care operations at a hospital in the city of Ho Chi Minh.It later emerged that the donated Sinopharm shots were meant for priority groups outlined by Beijing, deepening the cynicism toward China.“There are always some conditions attached,” said Huong Le Thu, a senior analyst at the Australian Strategic Policy Institute who specializes in Southeast Asia, referring to China’s vaccine deals.Vietnam continues to battle an outbreak, and vaccines remain in short supply. Despite the earlier public anger, a private Vietnamese company acquired five million doses of Sinopharm for distribution, which local authorities began to administer this month.Muktita Suhartono More

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    People Are Now Spending More Money at Amazon Than at Walmart

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    Proof that the online future has arrived: The biggest e-commerce company outside China has unseated the biggest brick-and-mortar seller.SEATTLE — Amazon has eclipsed Walmart to become the world’s largest retail seller outside China, according to corporate and industry data, a milestone in the shift from brick-and-mortar to online shopping that has changed how people buy everything from Teddy Grahams to teddy bears.Propelled in part by surging demand during the pandemic, people spent more than $610 billion on Amazon over the 12 months ending in June, according to Wall Street estimates compiled by the financial research firm FactSet. Walmart on Tuesday posted sales of $566 billion for the 12 months ending in July.Alibaba, the giant online Chinese retailer, is the world’s top seller. Neither Amazon nor Walmart is a dominant player in China.In racing past Walmart, Amazon has dethroned one of the most successful — and feared — companies of recent decades. Walmart perfected a thriving big-box model of retailing that squeezed every possible penny out of its costs, which drove down prices and vanquished competitors.But even with all of that efficiency and power, the quest to dominate today’s retail environment is being won on the internet. And no company has taken better advantage of that than Amazon. Indeed, the company’s delivery (many items land on doorsteps in a day or two) and wide selection first drew customers to online shopping, and it has kept them buying more there ever since. It has also made Jeff Bezos, the company’s founder, one of the richest people in the world.An employee sorting items into the robots at an Amazon warehouse on Staten Island.Chang W. Lee/The New York Times“It is a historic moment,” said Juozas Kaziukenas, founder of the Marketplace Pulse, a research company. “Walmart has been around for so long, and now Amazon comes around with a different model and replaces them as a No. 1.”Wall Street firms had been expecting this retail baton to change hands in the coming years. But the pandemic accelerated the timeline, as people stuck at home relied on deliveries. Walmart’s sales rose sharply during the pandemic, but it has not matched Amazon, which has added hundreds of new warehouses and hired about 500,000 workers since the start of last year.Walmart’s sales grew $24 billion in the last year, the company said Tuesday. During roughly the same period, the total value of everything people bought on Amazon rose by nearly $200 billion, analysts estimate.While the figures are calculated differently, analysts regularly use them as a rough comparison. Knowing the full value of Walmart’s sales is simple, because they nearly all come from its own inventory and are disclosed publicly each quarter. But analysts must calculate an estimate of the value of Amazon’s overall sales because most of what people buy on its site are products owned and listed by outside merchants. The company publicly reports only the fees it takes from those transactions.With Amazon’s success has come greater scrutiny. And the company has started to receive many of the same complaints — over its treatment of workers and impact on local and national economies — that Walmart faced during its biggest periods of expansion more than a decade ago.“The Big Bad Wolf is Amazon now,” said Barbara Kahn, a professor of marketing at University of Pennsylvania’s Wharton School of Business who has written several books on retailing.Amazon and Walmart declined to comment.Over the last century, very few companies could stake a claim to world’s biggest retailer. The grocery chain A.&P. was such a force that antitrust authorities pursued it in the 1940s. Sears overtook A.&P. as the largest retailer in the early 1960s by targeting middle-class shoppers in the suburbs and expanding the department store model.Then came Walmart.President George H.W. Bush awarded Sam Walton the Medal of Freedom in 1992, with Barbara Bush, at Walmart’s headquarters in Bentonville, Ark.J. Scott Applewhite/Associated PressThe original Walton five-and-dime store on the square in Bentonville.Terra Fondriest for The New York TimesIn 1962, Sam Walton founded the retailer in small-town Arkansas. Mr. Walton had “a true passion — some would say obsession — to win,” he wrote in his autobiography, and he sold a huge variety of products at low prices, including eventually fresh food. But his true innovation was building a vast logistics network that operated with such precision and efficiency that it crushed many competitors that couldn’t compete.By the 1990s, Walmart had surpassed Sears. And then it kept growing, opening thousands of stores and acquiring other retailers across the world.Just as Mr. Walton founded Walmart as Sears was ascendant, Mr. Bezos started Amazon in the early 1990s as Walmart was king.Guru Hariharan, who worked on Amazon’s retail business, said Amazon had eclipsed Walmart by playing a different game. Walmart has hardened its lock on physical stores and the grocery business. But shopping online is growing far faster than in physical stores, even as it accounts for only about a seventh of U.S. retail sales. Amazon captures 41 cents of every dollar spent online in the United States, while Walmart takes just 7 cents, according to eMarketer.Shopping in Walmart in 1996. Getty ImagesFriday night traffic in 1992.Getty Images“They have their own turfs that they are the kings of,” said Mr. Hariharan, who left Amazon and eventually founded CommerceIQ, which advises brands like Colgate and Kimberly-Clark on e-commerce.Amazon has ascended in part because it opened its website to let third-party sellers list their products alongside items that Amazon buys and resells itself. This marketplace greatly increased the assortment of available items. Almost two million sellers offer products on Amazon, and they account for 56 percent of the items sold.The marketplace makes it harder to determine Amazon’s true influence in the retail industry. The company captures and reports only the fees it charges sellers to list, ship and market their goods, not the total money that flows through its business. The model is more profitable, but produces less revenue.“It makes Amazon appear smaller,” Mr. Kaziukenas said. “They are obfuscating their reality.”Jeff Bezos, right, with David Robichaud, center, who became the company’s 10 millionth customer when he ordered golf clubs from Gregory Nixon, left, on Amazon in 1999.Paul Conors/Associated PressThat has led analysts at investment banks like J.P. Morgan, BMO Capital Markets and Cowen to estimate what is known as the “gross merchandise value,” calculating how much customers buy on Amazon, regardless of whether it comes from Amazon’s inventory or from a seller’s. The analysts make the estimates based on data the company releases, such as revenue it collects from sellers and the marketplace’s share of total units sold, and their own research. FactSet compiles and averages the estimates. In the last 12 months, Amazon reported total retail revenue of $390 billion. But total product sales, including third-party transactions, was nearly 60 percent higher, according to the analysts’ estimates.Amazon has not regularly disclosed its gross merchandise value, but in 2019, facing antitrust pressure, Mr. Bezos shared the measure — then $277 billion — for the first time as a way to show that the third-party sellers were growing faster than Amazon’s direct retail business. “Third-party sellers are kicking our first-party butt,” he wrote.When Mr. Bezos testified in Congress last summer, he pointed to Walmart’s size as evidence of a competitive retail industry. “We compete against large, established players, like Target, Costco, Kroger and, of course, Walmart,” he said, “a company more than twice Amazon’s size” — presumably referring to Walmart’s revenue.Walmart is still the largest private employer in the United States, with 1.6 million workers. And it sells more in the United States than Amazon, though J.P. Morgan estimates that Amazon will surpass Walmart in the United States next year.A Walmart worker delivering online orders in Charlottesville, Va.Eze Amos for The New York TimesDuring the pandemic, Walmart honed its ability to use its stores as mini-distribution centers, where shoppers drive to retrieve their purchase “curbside,” a far less costly way to fulfill online orders than delivery. On Tuesday, Walmart said it expected to generate $75 billion in total online sales this year. The company has been expanding its effort to build its own marketplace, but the vast majority of its online sales still come from its own inventory, Mr. Kaziukenas said.Edward Yruma, a retail analyst and managing director at KeyBanc Capital Markets, said Amazon had only started to come to grips with the reality of its size.“Walmart is big, and they know it,” he said. Amazon has long played the role of the upstart, even as it became enormous. Just this summer, when it already employed about 1.3 million people, it added a new leadership principle that acknowledged the responsibility of its scale.“We started in a garage,” the new principle starts, “but we’re not there anymore.” More

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    Will the Pandemic Productivity Boom Last?

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    Fewer workers are making more stuff. If it lasts, that’s big news for the economy of the 2020s.For most of the last 15 years, the United States economy was mired in a period of low productivity growth. Who would have guessed that the pathway out of it might include a pandemic?Yet that is what the numbers show. Since the second quarter of 2020, labor productivity — the amount of output per hour of work — has risen at a 3.8 percent annual rate, compared with 1.4 percent from 2005 to 2019. New data published Tuesday showed the trend persisted this spring, with a 2.3 annual rate of productivity growth in the second quarter.A different way to look at it: Since the pandemic recession bottomed out in the spring of 2020, the nation’s gross domestic product has more than fully recovered, with second-quarter output 0.8 percent higher than before coronavirus. The number of jobs decreased 4.4 percent in the same span. Productivity growth accounts for most of the wedge between those.What is less clear, though, is how much this growth represents real progress toward deploying the work force in ways that will make Americans richer over time. It’s a murky story — like any attempt to connect big-picture productivity numbers to what’s happening in the guts of the economy — but crucial for understanding the economic outlook for the 2020s.There are several parts to the story, and each has different implications for the future.The jobs lost were low-productivityIn terms of economic output, not all jobs are created equal. A worker in a well-managed factory with state-of-the-art equipment produces more economic output for each hour of work than a counterpart in a poorly run place with worse equipment.The differences are even starker when you compare productivity across sectors, and that’s where there is a clear pandemic story. Many more job losses were in low-productivity sectors than in higher ones.Restaurant employment, by contrast, was down 8 percent in the same period.Emily Elconin for The New York TimesFor example, on the eve of the pandemic, manufacturing jobs — highly productive, with lots of automation — paid on average $28.23 an hour, while restaurant jobs paid $15.23 on average. Employment in manufacturing in July was down 3.4 percent from its February 2020 level, while restaurant employment was down 8 percent.As people currently out of work return to the labor force, how many will take higher-productivity jobs vs. lower-productivity ones? That’s vital in determining the economy’s future growth potential.Doing more with lessThe labor shortage facing many types of businesses, especially in the service sector, is forcing some hard decisions. And in many cases, companies unable to return to normal staffing levels are getting creative.Restaurants are experimenting with people ordering on their phones rather than through a waiter. Retailers are offering more self-checkout options. And there is evidence that the difficulty recruiting workers is making companies invest more in training employees — potentially shifting people from low-productivity jobs to higher-productivity ones.Sometimes there are tricky measurement questions. For example, if a hotel charges the same prices but, with fewer housekeepers on the payroll, no longer provides a daily cleaning service, that arguably is a worsening in the quality of the product and therefore a form of inflation, rather than higher labor productivity.But to the degree that something fundamental is shifting in terms of businesses’ willingness to make labor-saving investments, rethink processes to be less labor-intensive, and move individual workers higher up the skill ladder, there’s opportunity for a productivity surge that outlasts the pandemic.Running themselves raggedThe flip side of this could be that the apparent productivity boom, especially in the first half of this year, simply reflects people working harder than usual.If a restaurant normally has 10 waiters for its dinner shift and cuts back to seven, each of whom has to work that much harder, it could look like a productivity gain. Fewer person-hours of work would be generating the same economic output. It also may or may not be sustainable.Having customers order with their phones, as at this bar in San Francisco, is one way restaurants are dealing with their labor shortage.Ulysses Ortega for The New York TimesBut perhaps people will be willing to work harder at certain jobs if compensation is higher. There is a theory of “efficiency wages” that suggests, in effect, that employers get what they pay for — that paying more means a higher-performing work force.“If you want extra effort, you pay people extra,” said Steven J. Davis, an economist at the University of Chicago Booth School of Business. “You would expect to see some positive productivity benefits of compensating people to put forth more effort per hour than they normally would. Will it be sustained? Maybe if wages stay high.”The work-from-home effectIn the space of just a few weeks in 2020, millions of American workers who once commuted to an office most of the time learned how to work from home. It could have lasting economic ripple effects if even a modest portion of them continue to work from home some or all of the time.“Employers are embracing this as a long-term solution and taking the steps to invest in the appropriate technology to make it really effective,” said Julia Pollak, a labor economist at ZipRecruiter. “There is a lot of soul-searching going on and companies sharing best practices on how to create corporate cultural virtually.”.css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-3btd0c{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-3btd0c{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-3btd0c strong{font-weight:600;}.css-3btd0c em{font-style:italic;}.css-w739ur{margin:0 auto 5px;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}#NYT_BELOW_MAIN_CONTENT_REGION .css-w739ur{font-family:nyt-cheltenham,georgia,’times new roman’,times,serif;font-weight:700;font-size:1.375rem;line-height:1.625rem;}@media (min-width:740px){#NYT_BELOW_MAIN_CONTENT_REGION .css-w739ur{font-size:1.6875rem;line-height:1.875rem;}}@media (min-width:740px){.css-w739ur{font-size:1.25rem;line-height:1.4375rem;}}.css-9s9ecg{margin-bottom:15px;}.css-uf1ume{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-box-pack:justify;-webkit-justify-content:space-between;-ms-flex-pack:justify;justify-content:space-between;}.css-wxi1cx{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-flex-direction:column;-ms-flex-direction:column;flex-direction:column;-webkit-align-self:flex-end;-ms-flex-item-align:end;align-self:flex-end;}.css-12vbvwq{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;}@media (min-width:740px){.css-12vbvwq{padding:20px;width:100%;}}.css-12vbvwq:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-12vbvwq{border:none;padding:10px 0 0;border-top:2px solid #121212;}.css-12vbvwq[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-12vbvwq[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-12vbvwq[data-truncated] .css-5gimkt:after{content:’See more’;}.css-12vbvwq[data-truncated] .css-6mllg9{opacity:1;}.css-qjk116{margin:0 auto;overflow:hidden;}.css-qjk116 strong{font-weight:700;}.css-qjk116 em{font-style:italic;}.css-qjk116 a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;text-underline-offset:1px;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:visited{color:#326891;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:hover{-webkit-text-decoration:none;text-decoration:none;}At the height of the pandemic, the vast majority of office workers worked from home. In the post-pandemic world, those jobs that most require in-person collaboration may return to offices, but those that can be easily done remotely may stay remote.“The important thing to understand is that it’s not that working from home is better for everybody, but that once the pandemic is over, the kinds of people for whom it doesn’t work very well won’t continue it,” Professor Davis said. “It’s a selection of people who have figured out how to make remote work work, and that’s where the productivity gains are coming from.”Empty office buildings in Midtown Manhattan earlier this year. How many office workers will return to their offices, and how quickly, remains a question, and one with big implications for productivity.George Etheredge for The New York TimesThere are several implications for the years ahead. For one, companies would be likely to need less office space, desks and cubicles relative to the size of their work force than in the past. That could mean higher “total factor productivity,” which takes into account not just the efforts of workers, but the capital investments that they use to do their jobs.For another, workers themselves say in surveys that they are more productive working at home — though not necessarily in ways that show up big in the official productivity numbers.A working paper by Jose Maria Barrero, Professor Davis and Nicholas Bloom that is based on a survey of 30,000 workers finds that widespread working from home could generate a 4.8 percent boost to productivity relative to the pre-pandemic economy, but that only 1 percent of that should be expected to show up in the official statistics.The reason? Much of the gain comes from time saved commuting, and official labor productivity statistics do not include commute time in the “hours worked” denominator.In effect, the pandemic forced a lot of innovation around office work practices to happen far more rapidly than would otherwise be the case.“The adoption of technology has accelerated, new firms are being created at an historic pace, and the shift to remote work is likely to outlast the crisis,” said Lydia Boussour, lead U.S. economist at Oxford Economics, in a note analyzing the new productivity data. “While some of the pandemic-driven efficiencies could take years to be fully realized, we think these four forces will lead to a sustained productivity revival in the medium run.”The future is always uncertain, and economists’ understanding of what truly drives productivity gains is poor. But for now, the evidence suggests that many of the key drivers of this particular pandemic bump aren’t likely to go away anytime soon. More

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    Pelosi and Yellen to Discuss Rental Assistance as Eviction Crisis Looms

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    WASHINGTON — The Biden administration on Tuesday imposed a new, 60-day federal moratorium on evictions in areas of the country ravaged by the Delta variant, a move aimed at protecting hundreds of thousands of renters at risk of being kicked out of their homes during a pandemic.The action was also intended to quell a rebellion among angry Democrats who blamed the White House for allowing a previous eviction ban to expire on Saturday — after the Democratic-controlled House was unable to muster enough votes to extend that moratorium.President Biden told reporters that the Centers for Disease Control and Prevention would seek to implement a new federal moratorium on evictions in communities across the country hardest hit by the virus.Tom Brenner for The New York TimesPresident Biden has been under intense pressure from activists and allies for the last week to protect people at risk of being driven from their homes for failing to pay their rent during the economic crisis brought on by the pandemic. The previous nationwide moratorium on evictions, which went into effect in September, expired on Saturday after the Supreme Court warned that an extension would require congressional action.The end of the rental protections has prompted a flurry of recriminations in Washington and a furious effort by the White House to find a solution that prevents working-class and impoverished Americans from being evicted from their homes on Mr. Biden’s watch as billions in aid allocated by Congress goes untapped.The Centers for Disease Control and Prevention late Tuesday announced the new order barring people from being driven out of their homes in many parts of the country, saying that “the evictions of tenants for failure to make rent or housing payments could be detrimental to public health control measures” aimed at slowing Covid-19.The order will expire on Oct. 3, the C.D.C. said, and applies to areas of the country “experiencing substantial and high levels of community transmission” of the virus. Mr. Biden, in remarks ahead of the official order, said the moratorium was expected to reach 90 percent of Americans who are renters.“This moratorium is the right thing to do to keep people in their homes and out of congregate settings where Covid-19 spreads,” Dr. Rochelle P. Walensky, the director of the C.D.C., said in a statement. “Such mass evictions and the attendant public health consequences would be very difficult to reverse.”The decision to impose a new and targeted moratorium, rather than extending the previous national ban, is aimed at sidestepping a Supreme Court ruling from late June that seemed to limit the administration’s ability to enact such policies. While the court upheld the C.D.C.’s moratorium, Justice Brett M. Kavanaugh issued a brief concurring opinion explaining that he had cast his vote reluctantly and believed the C.D.C. had “exceeded its existing statutory authority by issuing a nationwide eviction moratorium.”Mr. Biden conceded on Tuesday that the new approach might be struck down by the courts as executive overreach. But he suggested the move could help buy the administration time as it tried to get states to disburse billions of dollars of aid to help renters meet their obligations to landlords.Congress previously allocated $46.5 billion in rental assistance in two coronavirus relief packages, but only about $3 billion had been delivered to eligible households through June, according to Treasury Department data.“Whether that option will pass constitutional measure with this administration, I can’t tell you. I don’t know,” Mr. Biden said of a new moratorium. “There are a few scholars who say it will and others who say it’s not likely to. But at a minimum, by the time it gets litigated, we’ll probably give some additional time while we’re getting that $45 billion out to people who are in fact behind in rent and don’t have the money.”For days, some of Mr. Biden’s closest allies on Capitol Hill, including some of the most progressive Democrats in Congress, have been publicly and privately assailing his lack of action to help renters, accusing the president and his aides of failing to find a replacement for the eviction moratorium until it was too late.Just days before Saturday’s expiration of the ban, Mr. Biden called on Congress to pass legislation to extend it. But with the House about to leave town for a seven-week vacation and Republicans solidly opposed to an extension, progressive Democrats described the White House call as a cynical attempt to shift blame to lawmakers. The administration, for its part, feared that any unilateral move would open the White House to legal challenges that could ultimately erode Mr. Biden’s presidential powers.The expiration presented the president with a thorny choice: Side with the C.D.C. and his own lawyers, who saw an extension as a dangerous step that could limit executive authority during health crises, or heed the demands of his party’s progressive wing to take immediate action to halt what they saw as a preventable housing crisis.Under intense pressure from Speaker Nancy Pelosi and other Democrats, Mr. Biden’s team opted for an approach that would give them a chance to satisfy both camps, creating a new moratorium, based on a recent rise in infections from the Delta variant, that cited the risks associated with the movement of displaced tenants in areas where the virus is raging.But ultimately it came down to a simpler calculation: Mr. Biden could not ignore the call, led by Black Democrats, to reverse course.“Every single day that we wait, thousands of people are receiving eviction notices, and some of them are being put out on the street,” said Representative Cori Bush, Democrat of Missouri, who has been sleeping on the steps of the Capitol since the moratorium expired in a bid to pressure her party’s leadership. “People started sending me pictures of dockets, court dockets, that were all evictions. We cannot continue to sit back. We need this done today.”Ms. Pelosi and Senator Chuck Schumer, Democrat of New York and the majority leader, were briefed on Tuesday on the C.D.C.’s plan by Dr. Walensky, the agency’s director, and Xavier Becerra, the secretary of health and human services, according to a person familiar with the call. Ms. Pelosi hailed the idea of a new eviction moratorium as a victory for many Americans who were struggling because of the pandemic.“Today is a day of extraordinary relief,” she said in a statement. “Thanks to the leadership of President Biden, the imminent fear of eviction and being put out on the street has been lifted for countless families across America. Help is here!”Yet for two days it was unclear how — or whether — any help would arrive as landlords prepared to turn to housing courts to evict tenants who were behind on their rent.At a White House meeting with Mr. Biden on Friday, Ms. Pelosi and Mr. Schumer bluntly informed Mr. Biden they did not have the votes to pass an extension — and pressed him to take whatever action he could using his executive power, according to two Democratic congressional aides briefed on the meeting.On Tuesday, House Democrats summoned Treasury Secretary Janet L. Yellen to explain what the agency was doing to help struggling renters. In a private call between Democrats and Ms. Yellen, the Treasury secretary insisted that her team was using all available tools to get rental assistance money to states and to help governments distribute those funds to landlords and renters.“I thoroughly agree we need to bring every resource to bear,” Ms. Yellen said, according to a person who was on the call.The White House had been scrambling to figure out exactly what its legal options were for continuing the moratorium. On Monday, Jen Psaki, the White House press secretary, said that Mr. Biden had asked the C.D.C. on Sunday to consider extending the moratorium for 30 days, even just to high-risk states, but that the C.D.C. had “been unable to find legal authority for a new, targeted eviction moratorium.”A day later, however, the administration appeared ready to barrel through legal challenges and embrace a solution that did just that.The extension is likely to intensify a legal fight with landlord groups that have argued that the eviction ban has saddled them with debt.The National Apartment Association, which filed a lawsuit last week seeking to recoup lost rent, said the moratorium was jeopardizing the viability of the housing market. The group estimates that the apartment industry is shouldering $26.6 billion in debt as a result of the eviction ban.“The government has intruded into private property and constitutional freedoms, and we are proudly fighting to make owners whole and ensure residents’ debt is wiped from their record,” said Robert Pinnegar, the chief executive of the association.Legal experts said it was likely that the administration would face a new wave of lawsuits if the justification and structure of a new moratorium was similar to the one that had been in place.“The only logic by which this could be justified is a logic that would enable them to be able to suppress virtually any activity of any kind that they can claim might spread contagious disease,” said Ilya Somin, a law professor at George Mason University. More

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    Europe’s Pandemic Aid Is Winding Down. Is Now the Best Time?

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    Governments want vaccinations and a business rebound to carry the economy now, but cutting aid too quickly could create economic aftershocks.PARIS — After almost 18 months of relying on expensive emergency aid programs to support their economies through the pandemic, governments across Europe are scaling back some of these measures, counting on burgeoning economic growth and the power of vaccines to carry the load from here.But the insurgent spread of the Delta variant of the coronavirus has thrown a new variable into that calculation, prompting concerns about whether this is the time for scheduled rollbacks in financial assistance.The tension can be seen in France, where the number of virus cases has increased more than 200 percent from the average two weeks ago, prompting President Emmanuel Macron to try to push the French into getting vaccinated by threatening to make it harder to shop, dine or work if they don’t.At the same time, some pandemic aid in France — including generous state funding that prevented mass layoffs by subsidizing wages, and relief for some businesses struggling to pay their bills — is being reduced.A government panel recently urged “the greatest caution” about winding down emergency aid even further at the end of the summer.The eurozone economy has finally exited a double-dip recession, data last week showed, reversing the region’s worst downturn since World War II. European Union governments, which have spent nearly 2 trillion euros in pandemic aid and stimulus, have released nearly all businesses from lockdown restrictions, and the bloc is on target to fully vaccinate 70 percent of adults by autumn to help cement the rebound.But the obstacles to a full recovery in Europe remain large, prompting worries about terminating aid that has been extended repeatedly to limit unemployment and bankruptcies.“Governments have provided very generous support through the pandemic with positive results,” said Bert Colijn, senior eurozone economist at ING. “Cutting the aid short too quickly could create an aftershock that would have negative economic effects after they’ve done so much.”In Britain, the government has halted grants for businesses reopening after Covid-19 lockdowns, and will end a special unemployment benefit top-up by October. At least half of the 19 countries that use the euro have already sharply curtailed pandemic aid, and governments from Spain to Sweden plan to phase out billions of euros’ worth of subsidies more aggressively in autumn and through the end of the year.Germany recently allowed the expiration of a rule excusing firms from declaring bankruptcy if they can’t pay their bills. Debt repayment holidays for companies that took cheap government-backed loans will soon wind down in most eurozone economies.And after repeated extensions, state-backed job retention schemes, which have cost European Union countries over €540 billion, are set to end in September in Spain, the Netherlands, Sweden and Ireland, and become less generous in neighboring countries in all but the hard-hit tourism and hospitality sectors.Aid programs that helped cushion income losses for 60 million people at the height of the crisis continue to pay for millions of workers on standby. Businesses and the self-employed have access to billions in low-interest loans, state-funded grants and tax holidays.Meanwhile, employees have begun returning to offices, shops and factory floors. Global automakers are working to adapt to supply-chain issues. Small retailers are offering click-and-collect sales, and cafes are providing takeout service.Governments are betting that the growth momentum will be enough to wean their economies off life support.“We can’t use public money to make up for losses in the private sector forever,” said Guntram Wolff, the director of Bruegel, an economic research institution based in Brussels. “That’s why we need to find a strategy for exiting.”Governments are looking to reallocate more spending toward areas of the economy that promise future growth.“It’s crucial to shift spending towards sectors that will outlast the pandemic,” said Denis Ferrand, the director of Rexecode, a French economic research organization. “We need to accelerate a transformation in digitalization, energy and the environment.”But swaths of workers risk losing their jobs when the income support is withdrawn, especially in the hospitality and travel industries, which continue to operate at up to 70 percent below prepandemic levels. The transition is likely to be painful for many.Diners in London last week. The Bank of England expects about a quarter of a million people to lose their jobs when Britain’s furlough program ends next month.Tolga Akmen/Agence France-Presse — Getty ImagesIn Britain, a furlough program that has saved 12 million jobs since the start of the pandemic today keeps fewer than two million workers on standby support. But after the scheme ends in September, around a quarter of a million people are likely to lose their jobs, the Bank of England has forecast.“A significant fraction of people coming off furlough and not being rehired will find themselves facing very large drops of income,” said Tom Waters, a senior research economist at the Institute for Fiscal Studies in London.Small businesses that wouldn’t have made it through the crisis without government assistance are now calculating how to stay on their feet without it..css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-3btd0c{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-3btd0c{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-3btd0c strong{font-weight:600;}.css-3btd0c em{font-style:italic;}.css-w739ur{margin:0 auto 5px;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}#NYT_BELOW_MAIN_CONTENT_REGION .css-w739ur{font-family:nyt-cheltenham,georgia,’times new roman’,times,serif;font-weight:700;font-size:1.375rem;line-height:1.625rem;}@media (min-width:740px){#NYT_BELOW_MAIN_CONTENT_REGION .css-w739ur{font-size:1.6875rem;line-height:1.875rem;}}@media (min-width:740px){.css-w739ur{font-size:1.25rem;line-height:1.4375rem;}}.css-9s9ecg{margin-bottom:15px;}.css-uf1ume{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-box-pack:justify;-webkit-justify-content:space-between;-ms-flex-pack:justify;justify-content:space-between;}.css-wxi1cx{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-flex-direction:column;-ms-flex-direction:column;flex-direction:column;-webkit-align-self:flex-end;-ms-flex-item-align:end;align-self:flex-end;}.css-12vbvwq{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;}@media (min-width:740px){.css-12vbvwq{padding:20px;width:100%;}}.css-12vbvwq:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-12vbvwq{border:none;padding:10px 0 0;border-top:2px solid #121212;}.css-12vbvwq[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-12vbvwq[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-12vbvwq[data-truncated] .css-5gimkt:after{content:’See more’;}.css-12vbvwq[data-truncated] .css-6mllg9{opacity:1;}.css-qjk116{margin:0 auto;overflow:hidden;}.css-qjk116 strong{font-weight:700;}.css-qjk116 em{font-style:italic;}.css-qjk116 a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;text-underline-offset:1px;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:visited{color:#326891;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:hover{-webkit-text-decoration:none;text-decoration:none;}Fabien Meaudre, who runs an artisanal soap boutique in central Paris, got over €10,000 in grants and a state-backed loan that allowed him to stay afloat during and after the three national lockdowns imposed in France since the pandemic hit.Now that his store is reopened, business is starting to get back to normal. “But there are no tourists, and it’s very calm,” he said.“We are very grateful for the aid we received,” Mr. Meaudre added. “But we know we will have to pay this money back.”Mr. Macron, who promised to steer Europe’s second-largest economy through Covid “no matter the cost,” is leading other countries in trying to push for a tipping point where the lockdowns that required massive government support become less and less necessary.But the Delta variant is upending even the most carefully calibrated efforts to keep economies open.In the Netherlands, where half the population is fully inoculated, the government recently reinstated some Covid restrictions days after lifting them, after Delta cases spiked.Spain and Portugal have been reeling from hotel cancellations as the variant spread in vacation hot spots that desperately need an economic boost. The Greek party island of Mykonos even banned music temporarily to stop large gatherings, sending tourists fleeing and creating fresh misery for businesses counting on a recovery.Moviegoers in France must present a “health pass” to enter the theater, which an industry group says has reduced the number of moviegoers.Rafael Yaghobzadeh/Associated PressAnd in France, trade organizations representing cinemas and sports venues are worried that Mr. Macron’s new requirement that people carry a so-called health pass — proving vaccination, a negative test or a recent Covid recovery — to get into crowded spaces is already killing a budding recovery.Some big movie halls lost up to 90 percent of customers from one day to the next when the health pass requirement went into effect this week, said Marc-Olivier Sebbag, a representative for the National Federation of French Cinemas. “It’s a catastrophe,” he said.Such precariousness helps explain why some officials are wary of letting the support expire entirely, and economists say governments are likely to have to keep spending, albeit at lower levels, well beyond when they had hoped to wind down.Withdrawing aid is “totally justified if there’s a rapid recovery,” Benoît Coeuré, a former European Central Bank governor and head of the French government panel assessing pandemic spending, told journalists last week.“But there is still uncertainty, and if the rebound doesn’t come or if it’s weaker than expected,” he said, “we’ll need to pace the removal of support.”Jack Ewing More

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    Eviction Moratorium Set to Lapse as Biden Aid Effort Falters

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    The administration made a last-ditch, failed appeal to extend the moratorium to buy more time for states to distribute rental aid.A nationwide moratorium on residential evictions is set to expire on Saturday after a last-minute effort by the Biden administration to win an extension failed, putting hundreds of thousands of tenants at risk of losing shelter, while tens of billions in federal funding intended to pay their back rent sit untapped.The expiration was a humbling setback for President Biden, whose team has tried for months to fix a dysfunctional emergency rent relief program to help struggling renters and landlords. Running out of time and desperate to head off a possible wave of evictions, the White House abruptly shifted course on Thursday, throwing responsibility to Congress and prompting a frenzied — and ultimately unsuccessful — rescue operation by Democrats in the House on Friday.The collapse of those efforts reflected the culmination of months of frustration, as the White House pushed hard on states to speed housing assistance to tenants — with mixed results — before the moratorium expired. Hampered by a lack of action by the Trump administration, which left no real plan to carry out the program, Mr. Biden’s team has struggled to build a viable federal-local funding pipeline, hindered by state governments that view the initiative as a burden and the ambivalence of many landlords.As a result, the $47 billion Emergency Rental Assistance program, to date, disbursed only $3 billion — about 7 percent of what was supposed to be a crisis-averting infusion of cash.Adding to the urgency, Justice Brett M. Kavanaugh warned last month, when the Supreme Court allowed a one-month extension of the eviction moratorium to stand, that any further extensions would have to go through Congress. But there was little chance that Republicans on Capitol Hill would agree, and by the time White House officials asked, only two days remained before the freeze expired, angering Democratic leaders who said they had no time to build support for the move.“Really, we only learned about this yesterday,” said Speaker Nancy Pelosi, who had publicly and privately urged senior Biden administration officials to deal with the problem themselves.“What a devastating failure to act in a moment of crisis,” said Diane Yentel, the president of the National Low Income Housing Coalition, which had pressed for an extension of the moratorium. “As the Delta variant surges and our understanding of its dangers grow, the White House punts to Congress in the final 48 hours and the House leaves for summer break.”The federal eviction moratorium, put in place by the Centers for Disease Control and Prevention in November, was effective, reducing by about half the number of eviction cases that normally would have been filed since last fall, according to an analysis of filings by the Eviction Lab at Princeton University.Advocates have argued it is also a public health imperative, because evictions make it harder for people to socially distance.The lapse of the federal freeze is offset by other pro-tenant initiatives that are still in place. Many states and localities, including New York and California, have extended their own moratoriums, which should blunt some of the effect. In some places, judges, cognizant of the potential for a mass wave of displacement, have said they would slow-walk cases and make greater use of eviction diversion programs.On Friday, several government agencies, including the Federal Housing Finance Agency, along with the Agriculture, Housing and Urban Development and Veterans Affairs Departments, announced that they would extend their eviction moratoriums until Sept. 30.Nonetheless, there is the potential for a rush of eviction filings beginning next week — in addition to the more than 450,000 eviction cases already filed in courts in the largest cities and states since the pandemic began in March 2020.An estimated 11 million adult renters are considered seriously delinquent on their rent payment, according to a survey by the Census Bureau, but no one knows how many renters are in danger of being evicted in the near future.Bailey Bortolin, a tenants’ lawyer who works for the Nevada Coalition of Legal Service Providers, said the absence of the moratorium would lead many owners to dump their backlog of eviction cases into the courts next week, prompting many renters who received an eviction notice to simply vacate their apartments rather than fight it out.“I think what we will see on Monday is a drastic increase in eviction notices going out to people, and the vast majority won’t go through the court process,” Ms. Bortolin said.The moratorium had been set to expire on June 30, but the White House and C.D.C., under pressure from tenants groups, extended the freeze until July 31, in the hopes of using the time to accelerate the flow of rental assistance.A crash effort followed, led by Gene Sperling, who was appointed in March to oversee Mr. Biden’s pandemic relief efforts, including emergency rental assistance programs created by coronavirus aid laws enacted in 2020 and 2021.Mr. Sperling, working with officials in the Treasury Department, moved to loosen application requirements and increase coordination among the state governments, legal aid lawyers, housing court officials and local nonprofits with expertise in mediating landlord-tenant disputes.In June, 290,000 tenants received $1.5 billion in pandemic relief, according to Treasury Department statistics released last week. To date, about 600,000 tenants have been helped under the program.But administration officials concede the improvements have not progressed quickly enough. Over the past week, Mr. Sperling; Brian Deese, the director of the National Economic Council; Susan Rice, Mr. Biden’s top domestic policy adviser; and Ms. Rice’s deputy on housing policy, Erika C. Poethig, made a late plea for Mr. Biden to extend the freeze, according to two people familiar with the situation who spoke on the condition of anonymity to describe internal deliberations.Dana Remus, the White House counsel, expressed concerns that an extension was not a legally available option, and other officials suggested it could prompt the Supreme Court to strike down the administration’s broad use of public health laws to justify a range of federal policies, and their view prevailed, the officials said.In a statement Friday evening, Mr. Biden sought to put the onus on local officials to provide housing aid, saying “there can be no excuse for any state or locality not accelerating funds to landlords and tenants.”“Every state and local government must get these funds out to ensure we prevent every eviction we can,” he added.In the past week, Wally Adeyemo, the deputy Treasury secretary overseeing the program, had sent letters to officials in several localities, including New York, warning that their share of the cash could be taken back if it was not spent by mid-September, according to two senior administration officials. The White House is especially concerned about the sluggish pace of spending in Florida.Emily A. Benfer, a professor at Wake Forest University who specializes in health and housing law, said it was not entirely fair to blame the states, because many local governments had to build their rental assistance programs from scratch.It has also been difficult to gain buy-in from landlords, who are required to fill out complex financial forms and follow strict eligibility rules. Some simply do not want to, especially if they have more informal arrangements with tenants. In addition, many landlords and tenants do not even know the aid program exists.Big and small landlords are nearly unanimous in their disdain for the C.D.C.’s moratorium and the patchwork of state and local moratoriums that have augmented it.“They just said ‘You cannot evict and that’s it,’” said Shaker Viswanathan, 65, who owns 16 units in San Diego. “The tenants are the ones that they are trying to take care of, and not anybody else. We still have to make mortgage payments.”If there is one point both tenants and landlords agree on, it is that gaining access to the money remains difficult, and the process must be streamlined.“These applications are just a bear,” said Zach Neumann, a lawyer who runs the Covid-19 Eviction Defense Project in Denver, which has received dozens of calls and emails from renters panicked by the end of the freeze. “It adds a ton of time onto the process and that increases the risk for tenants.”Evictions can be personal crises for all involved — so traumatic, in fact, that many tenants will often leave without resisting just to avoid the ordeal, according to marshals and sheriffs responsible for showing up at people’s doors, hauling out their belongings and locking them out.Kristen Randall, a constable who oversees evictions in the Tucson area, has been reaching out to people on both sides to figure out what happens next.It is a mixed, cloudy picture. Some landlords who are waiting for tenants to get rental assistance are in no rush to evict. Others are planning to take legal action next week to enforce judgments against tenants they have already taken to court.Ms. Randall spent part of Friday visiting renters who faced imminent eviction.“It has been an emotional day,” she said.Ms. Randall repeated what she has been telling those tenants: “When you leave on your own, it is better than me showing up and locking you out.”Ron Lieber More