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    The Economy Is Booming but Far From Normal, Posing a Challenge for Biden

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    High inflation, ghostly downtowns and a resurgent virus have rattled consumers and created new obstacles as the president tries to push his broader economic agenda.The American economy is growing at its fastest clip in a quarter-century, yet it remains far from normal, with some workers and small-business owners facing increasingly tough times while others thrive. That divergence poses a challenge to President Biden, who has promoted the nation’s economic recovery as a selling point in his quest to win support for a multitrillion-dollar spending agenda that could cement his legacy. A summer that many business owners and consumers had hoped would bring a return to prepandemic activity has delivered waves of disappointment in key areas. Restaurants are short on staff and long on wait times. Prices have spiked for food, gasoline and many services. Shoppers are struggling to find used cars. Retailers are struggling to hire. Beach towns are jammed with tourists, but office towers in major cities remain ghost towns on weekdays, with the promised return of workers delayed by a resurgent coronavirus.The University of Michigan’s Consumer Sentiment Index suffered one of its largest monthly losses in 40 years in August, driven by the rapidly spreading Delta variant and high inflation. The survey’s chief economist, Richard Curtin, said the drop also reflected “an emotional response, from dashed hopes that the pandemic would soon end and lives could return to normal.”Mr. Biden and his advisers are confident that many of those issues will improve in the fall. They expect hiring to continue at a strong pace or even accelerate, fattening worker paychecks and powering consumer spending. They remain hopeful that a reinvigorated labor market will take the place of the fading stimulus from the president’s $1.9 trillion economic aid bill signed in the spring, and that the latest wave of the virus will not dampen growth significantly.On Friday, they released new projections forecasting that growth will hit 7.1 percent this year after adjusting for inflation, its highest rate since 1983.“Our perspective is one of looking at an economy that is growing at historic rates,” Brian Deese, the director of Mr. Biden’s National Economic Council, said in an interview.But there is mounting evidence that the coming months of the recovery could be more halting and chaotic than administration officials predict, potentially imperiling millions of left-behind workers as their federal support runs dry.Private forecasters have pared back growth expectations for the end of the year, citing drags on spending from the spread of the Delta variant and from the nationwide expiration of enhanced unemployment benefits next Monday. Emerging research suggests the end of those benefits might not immediately drive Americans back to the work force to fill the record level of open jobs nationwide.“People will be surprised at how much the economy decelerates over the next year as the stimulus boost fades,” said Jim O’Sullivan, the chief U.S. macrostrategist for TD Securities.Administration officials do acknowledge some potential hurdles. Some big-city downtowns may never return to their prepandemic realities, and the economy will not be fully “normal” until the virus is fully under control. They stress that increasing the nation’s vaccination rate is the most important economic policy the administration can pursue to accelerate growth and lift consumer confidence, which has slumped this summer..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;}“I don’t want to put a timeline on this,” said Cecilia Rouse, the chair of the White House Council of Economic Advisers. “We won’t feel totally completely normal until we have, whether we want to call it herd immunity or a greater fraction or percentage of the American population is vaccinated.”“As we conquer the virus,” she said, “we will regain normalcy.”The hospitality sector still employs millions fewer people than it did in February 2020.Gabriela Bhaskar/The New York TimesThe construction sector has regained most of the jobs lost early in the pandemic. Alyssa Schukar for The New York TimesThe economy’s rebound this year has been stronger than almost anyone predicted last winter, a result of the initial wave of vaccinations and the boost from Mr. Biden’s stimulus bill. Gross domestic product returned to its prepandemic level last spring, and retail sales have soared far beyond their pre-Covid path. Yet the recovery remains uneven and rattled by a rare set of economic crosswinds. In some sectors, consumer demand remains depressed. In others, spending is high but supply constraints — whether for materials or workers or both — are pushing up prices.For instance, the construction sector has regained most of the jobs lost early in the pandemic, and other industries, such as warehousing, have actually grown. But restaurants and hotels still employ millions fewer people than they did in February 2020. The result: There are more college graduates working in the United States today than when the pandemic began, but five million fewer workers without a college degree.Compounding the problem, employment in the biggest cities fell further than in smaller cities and rural areas, and it has rebounded more slowly. Employment among workers without a college degree living in the biggest cities is down more than 5 percent since February 2020, compared with about 2 percent for workers without a college degree in other parts of the country.Even as millions of people remain out of work, businesses across the country are struggling to fill a record number of job openings. Many businesses have blamed expanded unemployment benefits for the labor shortage. If they are right, a flood of workers should be returning to the job market when the benefits end after Labor Day. But recent research has suggested that the benefits are playing at most a small role in keeping people out of the work force. That suggests that other factors are holding potential workers back, such as health concerns and child care issues, which might not ease quickly.The Michigan sentiment data and the fade-out of stimulus benefits suggest consumers may be set to pull back spending further. But other data shows Americans increased their savings during the pandemic, in part by banking previous rounds of government support, and could draw on those funds to maintain spending for months to come.Administration officials hope to buck up consumers and workers by pushing Congress to pass the two halves of Mr. Biden’s longer-term economic agenda: a bipartisan infrastructure bill and a larger spending bill that could extend expanded tax credits for parents, subsidize child care and reduce prescription drug costs, among other initiatives.“Our hope is that the new normal coming out of this crisis is not simply a return to the status quo and the economy, which was one that was not working for most working families,” Mr. Deese said.The virus remains the biggest wild card for the outlook. There is little evidence in government data that the spread of the Delta variant has suppressed spending in retail stores. But air travel, as measured by the number of people screened at airport security checkpoints, has tailed off in recent days after returning to about 80 percent of where it was during the same week in 2019.Restaurant bookings on OpenTable, which had nearly returned to normal in June and July, are back down to 10 percent below their prepandemic level. Data from Homebase, which provides time-management software to small businesses, shows a sharp decline in the number of hours worked at restaurants and entertainment venues.Restaurant bookings on OpenTable, which had nearly returned to normal in June and July, are back down to 10 percent below their prepandemic level.Karsten Moran for The New York TimesAir travel has tailed off in recent days after returning to about 80 percent of its prepandemic level this summer.Stefani Reynolds for The New York TimesThe variant is already casting a shadow over the new school year, with some schools, including a middle school in Fredericksburg, Va., temporarily returning to virtual learning amid new outbreaks.Urban downtowns, once hopeful for a fall rebound in activity, are bracing for prolonged delays in white-collar workers returning to their offices.“Our No. 1 job is to get office workers back — that’s the driver of the downtown,” said Paul Levy, the president and chief executive of the Center City District, a local business-development group in Philadelphia.Mr. Levy’s group estimates that 30 percent of downtown office workers have returned so far to Philadelphia. It had been expecting that number to hit 75 to 80 percent after Labor Day, and had built an advertising campaign around the idea that the fall would mark a milestone in the return to normalcy. But now major employers such as Comcast have delayed their return dates, worrying business owners.Yehuda Sichel signed a lease for Huda, his gourmet sandwich shop in Philadelphia, on Feb. 29, 2020 — two weeks before the pandemic sent virtually his entire prospective customer base home indefinitely.He made it through the pandemic winter with takeout orders, holiday meal kits and some creativity. A short-rib special on a snow day when many other restaurants were closed helped him make payroll during a particularly grim period. Last spring, business began to improve, and Mr. Sichel invested in new equipment and a new kitchen floor in hopes of a surge in business once office workers returned. Now he doubts he will see one.“September was supposed to be this huge boom,” he said. “Now, September is going to be fine. I’m sure we’ll see a little bump, but not the doubling in business that I was hoping for.” More

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    Supreme Court Ends Biden’s Eviction Moratorium

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    The ruling followed political and legal maneuvering by the administration to retain protections for tenants. It puts hundreds of thousands at risk of being put out of their homes.WASHINGTON — The Supreme Court on Thursday rejected the Biden administration’s latest moratorium on evictions, ending a political and legal dispute during a public health crisis in which the administration’s shifting positions had subjected it to criticism from adversaries and allies alike.The court issued an eight-page majority opinion, an unusual move in a ruling on an application for emergency relief, where terse orders are more common. The court’s three liberal justices dissented.The decision puts hundreds of thousands of tenants at risk of losing shelter, while the administration struggles to speed the flow of billions of dollars in federal funding to people who are behind in rent because of the coronavirus pandemic and its associated economic hardship. Only about $5.1 billion of the $46.5 billion in aid had been disbursed by the end of July, according to figures released on Wednesday, as bureaucratic delays at the state and local levels snarled payouts.The majority opinion, which was unsigned, said the Centers for Disease Control and Prevention had exceeded its authority.“The C.D.C. has imposed a nationwide moratorium on evictions in reliance on a decades-old statute that authorizes it to implement measures like fumigation and pest extermination,” the opinion said. “It strains credulity to believe that this statute grants the C.D.C. the sweeping authority that it asserts.”Justice Stephen G. Breyer, writing for the three dissenting justices, faulted the court for its haste during a public health crisis.“These questions call for considered decision-making, informed by full briefing and argument,” he wrote. “Their answers impact the health of millions. We should not set aside the C.D.C.’s eviction moratorium in this summary proceeding.”The majority said the issues were fully considered and straightforward. “It is indisputable that the public has a strong interest in combating the spread of the Covid-19 Delta variant,” the opinion said. “But our system does not permit agencies to act unlawfully even in pursuit of desirable ends.”“If a federally imposed eviction moratorium is to continue,” the opinion said, “Congress must specifically authorize it.”In dissent, Justice Breyer wrote that “the public interest is not favored by the spread of disease or a court’s second-guessing of the C.D.C.’s judgment.”The Biden administration and other moratorium proponents predicted that the decision would set off a wave of dire consequences.“As a result of this ruling, families will face the painful impact of evictions, and communities across the country will face greater risk of exposure to Covid-19,” Jen Psaki, the White House press secretary, said in a statement.The ruling also renewed pressure on congressional Democrats to try to extend the freeze over the opposition of Republicans.“Tonight, the Supreme Court failed to protect the 11 million households across our country from violent eviction in the middle of a deadly global pandemic,” said Representative Cori Bush, a Missouri Democrat who slept on the steps of the Capitol this month to protest the expiration of the previous moratorium. “We already know who is going to bear the brunt of this disastrous decision: Black and brown communities, and especially Black women.”But landlords, who have said the moratoriums saddled them with billions of dollars in debt, hailed the move.“The government must move past failed policies and begin to seriously address the nation’s debt tsunami, which is crippling both renters and housing providers alike,” said Bob Pinnegar, the president of the National Apartment Association, a trade association representing large landlords.It will most likely take a while for the backlog of eviction cases in many states to result in the displacement of renters. But tenant groups in the South, where fast-track evictions are common, are bracing for the worst.In recent days, Mr. Biden’s team has been mapping out strategies to deal with the likely loss of the moratorium, with a plan to focus its efforts on a handful of states — including South Carolina, Tennessee, Georgia and Ohio — that have large backlogs of unpaid rent and few statewide protections for tenants.The administration had at first concluded that a Supreme Court ruling in June had effectively forbidden it from imposing a new moratorium after an earlier one expired at the end of July. While the administration had prevailed in that ruling by a 5-to-4 vote, one member of the majority, Justice Brett M. Kavanaugh, wrote that he believed the moratorium to be unlawful and that he had cast his vote to temporarily sustain it only to allow an orderly transition. He would not support a further extension without “clear and specific congressional authorization (via new legislation),” he wrote.Congress did not act. But after political pressure from Democrats, a surge in the pandemic and new consideration of the legal issues, the administration on Aug. 3 issued the moratorium that was the subject of the new ruling.The administration’s legal maneuvering might have failed, but it bought some time for tenants threatened with eviction. In unusually candid remarks this month, President Biden said that was part of his calculus in deciding to proceed with the new moratorium, which was set to expire Oct. 3.Congress declared a moratorium on evictions at the beginning of the coronavirus pandemic, but it lapsed in July 2020. The C.D.C. then issued a series of its own moratoriums, saying that they were justified by the need to address the pandemic and authorized by a 1944 law. People unable to pay rent, the agency said, should not be forced to crowd in with relatives or seek refuge in homeless shelters, spreading the virus.The last moratorium — which was put in place by the C.D.C. in September and expired on July 31 after being extended several times by Congress and Mr. Biden — was effective at achieving its goal, 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.The challengers in the current case — landlords, real estate companies and trade associations led by the Alabama Association of Realtors — argued that the moratorium was not authorized by the law the agency relied on, the Public Health Service Act of 1944.That law, the challengers wrote, was concerned with quarantines and inspections to stop the spread of disease and did not bestow on the agency “the unqualified power to take any measure imaginable to stop the spread of communicable disease — whether eviction moratoria, worship limits, nationwide lockdowns, school closures or vaccine mandates.”The C.D.C. responded that the moratorium was authorized by the 1944 law. Evictions would accelerate the spread of the coronavirus, the agency said, by forcing people “to move, often into close quarters in new shared housing settings with friends or family, or congregate settings such as homeless shelters.”The moratorium, the administration told the justices, was broadly similar to quarantine. “It would be strange to hold that the government may combat infection by prohibiting the tenant from leaving his home,” its brief said, “but not by prohibiting the landlord from throwing him out.”The case was complicated by congressional action in December, when lawmakers briefly extended the C.D.C.’s moratorium through the end of January in an appropriations measure. When Congress took no further action, the agency again imposed moratoriums under the 1944 law.In its Supreme Court brief, the government argued that it was significant that Congress had embraced the agency’s action, if only briefly.The central legal question in the case was whether the agency was entitled to act on its own. In June, with the earlier moratorium about to expire, the court voted 5 to 4 in favor of the administration, allowing that measure to stand.But that victory was distinctly provisional. Justice Kavanaugh, who voted with the majority, wrote that he had cast his vote reluctantly and had taken account of the then-impending expiration of the earlier moratorium.“The Centers for Disease Control and Prevention exceeded its existing statutory authority by issuing a nationwide eviction moratorium,” Justice Kavanaugh wrote. “Because the C.D.C. plans to end the moratorium in only a few weeks, on July 31, and because those few weeks will allow for additional and more orderly distribution of the congressionally appropriated rental assistance funds, I vote at this time to deny the application” that had been filed by the challengers.The other members of the court did not give reasons for their votes in the June ruling. But four of them — Justices Clarence Thomas, Samuel A. Alito Jr., Neil M. Gorsuch and Amy Coney Barrett — voted to lift the earlier moratorium. Taken together with Justice Kavanaugh’s statement, that distinctly suggested that a majority of the justices would not look favorably on another extension unless it came from Congress.The Biden administration initially seemed to share that understanding, urging Congress to act and saying it did not have the unilateral power to impose a further moratorium through executive action. When Congress failed to enact legislation addressing the issue, the moratorium expired.Under pressure from Speaker Nancy Pelosi and other Democrats and wary of the rise of the Delta variant, the administration reversed course a few days later.The new moratorium was not identical to the earlier one, which had applied nationwide. It was instead tailored to counties where Covid-19 was strongest, a category that currently covers some 90 percent of counties in the United States.Mr. Biden was frank in discussing his reasoning, saying the new measure faced long odds but would buy tenants some time.“The bulk of the constitutional scholarship says that it’s not likely to pass constitutional muster,” he said on Aug. 3. “But there are several key scholars who think that it may — and it’s worth the effort.”Many states and localities, including New York and California, have extended their own moratoriums, providing another layer of protection for some renters. In some places, judges, aware of the potential for large numbers of people to be put out on the street even as the pandemic intensifies again, have said they would slow-walk cases and make greater use of eviction diversion programs. More

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    Delta’s Extra $200 Insurance Fee Shows Vaccine Dilemma for Employers

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    Charging unvaccinated workers more for health coverage may seem more appealing than a mandate but could be harder to carry out.For weeks, big employers like Citigroup, Google and the Walt Disney Company have been warming to the idea of requiring coronavirus vaccines for employees. Now that one vaccine has received full federal approval, President Biden wants more to follow suit.Delta Air Lines has chosen a very different tack — one that might seem to provide employees more choice but could be much harder to carry out. The company on Wednesday became the first large U.S. employer to embrace an idea that has been widely discussed but is mired in legal uncertainty: charging unvaccinated employees more for health insurance.Starting Nov. 1, Delta employees who have not received the vaccine will have to pay an additional $200 per month to remain on the company’s health plan. It is part of a series of requirements that unvaccinated workers will face in the months to come, the airline’s chief executive, Ed Bastian, said in a memo to staff.“We’ve always known that vaccinations are the most effective tool to keep our people safe and healthy in the face of this global health crisis,” he said. “That’s why we’re taking additional, robust actions to increase our vaccination rate.”Every Delta employee who has been hospitalized because of the coronavirus in recent weeks was not yet fully vaccinated, with hospital stays costing the company an average of about $50,000. Like most large employers, Delta insures its own work force, meaning it pays health costs directly and hires an insurance company to administer its plans.Corporate executives have wrestled with how to restore some normalcy to their operations, including by letting workers return to offices. They are trying to achieve several goals that can at times come into conflict: keeping employees safe, retaining staff opposed to vaccines at a time of tremendous turnover, and showing customers that they are taking the pandemic seriously while not alienating others put off by masks and other restrictions.Several companies, particularly those in health care, have made vaccination a condition of employment. Under a recent Biden administration policy, any nursing home that receives federal funds will be required to mandate vaccines for workers.Nearly 14 percent of U.S. employers now require, or plan to require, staff to be vaccinated in order to work at a company site, according to a survey this month from Mercer, a benefits consulting firm. In a May survey, just 3 percent of employers planned to require vaccinations.Insurance surcharges may appeal to companies that are seeking a less coercive means to increase vaccination rates, said Wade Symons, a partner at Mercer. He has had conversations with about 50 large companies that are considering imposing such fees, he added.“They still want to have the appearance of a choice,” Mr. Symons said.The businesses, he said, tend to be in industries that involve a lot of in-person work: manufacturing, hospitality, financial services, retail and transportation. Many have already tried incentives like cash bonuses or raffles for large prizes but still have vaccine holdouts.Delta said 75 percent of its staff and more than 80 percent of its pilots and flight attendants were vaccinated. But when CNN asked Mr. Bastian on Wednesday why the airline hadn’t simply mandated vaccines, he framed the issue as one of corporate culture.“Every company has to make its own decision for its culture, its people, what works according to its values,” he said. “I think these added voluntary steps, short of mandating a vaccine, are going to get us as close to 100 percent as we can.”Legally speaking, insurance surcharges are more complicated than simple employment mandates, which are widely considered legally sound. Federal law bars employers and insurers from charging higher prices to people with pre-existing health conditions. But the vaccine surcharges are being structured as employer “wellness” incentive programs, which are permitted under the Affordable Care Act. Such programs must be voluntary but can involve rewards or penalties as large as 30 percent of an employee’s health insurance premium.(Insurance plans bought on the marketplaces created by the Affordable Care Act and government programs like Medicaid and Medicare are forbidden to impose such surcharges.)Starting Nov. 1, unvaccinated Delta Air Lines employees will be charged more to stay on the company health plan.Stefani Reynolds for The New York TimesUnder federal law, employers must provide accommodations for workers who cannot receive a vaccine for health reasons or sincerely held religious beliefs. A recent lawsuit successfully challenged wellness programs with large financial penalties, arguing that the provision violated the Americans With Disabilities Act.“This is not rocket science, but it is not easy,” said Rob Duston, a lawyer with Saul Ewing Arnstein & Lehr in Washington, D.C., whose focus includes employment and disability issues.“You are dealing with the overlap of at least three different laws,” he added, referring to the Employee Retirement Income Security Act, the Affordable Care Act, and the Equal Employment Opportunity Commission’s wellness plan and Covid-19 guidelines. The companies will have to abide by the Americans With Disabilities Act and health privacy laws, too.Wellness programs have become widespread in large corporations even though studies show that they have very little impact on employee health. In some cases, they have tended to nudge workers who are facing penalties to drop their workplace coverage.“It seems like a more complicated way to do it,” said Karen Pollitz, a senior fellow at the Kaiser Family Foundation, who has studied such plans extensively and recently wrote a paper on vaccine mandate options. “In the middle of a pandemic, you want people to have health insurance. Why are you making it more likely they’re going to drop their health insurance?”But vaccination may prove different from other health behaviors that employers are seeking to change. Unlike weight loss or smoking cessation, vaccination does not require a long-term behavior change..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;}Jeff Levin-Scherz, a population health leader at the consulting firm Willis Towers Watson, said he had his doubts.“Premium surcharges might make intuitive sense, but based on their structure they are unlikely to lead to a large increase in vaccination rates,” Mr. Levin-Scherz said. “The surcharge approach has no impact on employees who waive coverage, and the penalties will be disproportionately imposed on lower-wage workers.”At Delta, the surcharge is one of several new requirements for unvaccinated workers. Starting immediately, those employees will have to wear masks indoors. In about two weeks, they will be subjected to weekly coronavirus tests. Then, on Sept. 30, unvaccinated employees will lose protections intended to cover pay for work missed while having to quarantine.The airline, which is based in Atlanta, its biggest hub, has a lot of employees in a state with a relatively low vaccination rate. Just over half of Georgia’s adult population is fully vaccinated, according to data from the Centers for Disease Control and Prevention.Delta’s decision not to require the vaccine may also help it to avoid criticism from Georgia’s conservative lawmakers, who have punished it in the past. In 2018, the state legislature voted to repeal a tax break on jet fuel after Delta ended a discount for members of the National Rifle Association, but the governor later ordered state officials to stop collecting the tax, effectively restoring the break. Lawmakers threatened to start collecting it again this year after Delta opposed new voting restrictions in the state.“It’s not an idle threat,” said Charles Bullock III, a professor of political science at the University of Georgia. “Doing this is probably more in keeping with where the Republican leadership would be,” he said of Delta’s approach on vaccination.American Airlines and Southwest Airlines, both based in Texas, have also not required vaccines. But United Airlines, which is based in Chicago, said this month that it would require vaccines, starting on Sept. 27.United’s chief executive, Scott Kirby, has lamented the dozens of letters he has had to write to families of employees who died from the virus. “We’re determined to do everything we can to try to keep another United family from receiving that letter,” he and Brett Hart, United’s president, told employees this month.One industry that has achieved high employee vaccination rates is Nevada’s casinos. State regulators allowed casinos to operate at full capacity once at least 80 percent of employees had received at least one shot of a coronavirus vaccination, a threshold some big properties achieved. Last week, MGM Resorts went further and said Covid vaccination would be a condition of employment for all salaried employees and new hires.“Vaccination is clearly the most effective tool in battling the pandemic, and it is one of our top priorities,” said Brian Ahern, a spokesman for MGM.Culinary Workers Union Local 226, which represents many casino workers, supports the mandate. “We would support stricter mandates, as the vaccine is the only way we can get through this pandemic,” Bethany Khan, director of communications and digital strategy for the union, said in an email.Peter Eavis More

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    In This Remote American Outpost, Pandemic Recovery Is a Faraway Dream

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    Tourism-dependent Guam has done almost everything it can to restart its economy. Its Asian neighbors may have to bounce back first.TAMUNING, Guam — Perched steps away from the prismatic seas off Guam’s western shore, a water sports shop sat shuttered on a recent weekend morning, its rack of neon kayaks and fleet of Jet Skis collecting fallen leaves.Down an oceanside road, in the tourist district of Tumon, the gift shop at the Hyatt Regency displayed its beach floaties and fidget spinners in total darkness. Nearby, a shopping plaza adorned with miniaturized street lamps had only one guest: a stray dog sunbathing in the tropical heat. Worn posters on its walls advertised a TV series that premiered last year.“The hustle and bustle here has just evaporated,” said Madelaine Cosico, the Hyatt’s director of sales and marketing.While much of the United States has returned to something resembling life before the coronavirus, the tiny American territory of Guam in the Western Pacific is stuck in time. A year and a half into the pandemic, the island’s tourism-dependent economy remains paralyzed, and officials say a full recovery is probably years away.The South Korean and Japanese visitors who once thronged Guam for its year-round sun and luxury boutiques are long gone, and with their home countries now in the throes of their worst Covid outbreaks, they aren’t coming back anytime soon. The island’s economy shrank by up to 18.9 percent in 2020, and would have contracted by as much as 49 percent without federal pandemic aid, according to estimates by economists at the University of Guam.The Hyatt Regency in Guam has let go about 100 full- and part-time employees.Anthony Henri Oftana for The New York TimesRecovery, the island’s leaders believe, starts with vaccination. Its population of 170,000 met the government’s goal of an 80 percent vaccination rate among adults by July, the same month it waived quarantine requirements for foreign tourists. It has also kept mask mandates, and compliance is nearly universal. Most businesses ask customers to record their contact information, and even small hotel elevators have markings on the floor for social distancing.The government has also poured hundreds of thousands of dollars into a program that aims to entice tourists with the promise of not just a vacation, but also vaccination. The program, called Air V&V, offers visitors their choice of any of the C.D.C.-approved vaccines for $100 or less per dose.By the end of August, at least 2,100 vaccine tourists will have arrived on chartered planes, according to the Guam Visitors Bureau, in addition to a relatively small number of others on regular flights. But that’s little consolation on an island that recorded 1.7 million arrivals the year before the pandemic began.“It’s not even a drop in the bucket,” said Bob Odell, the owner of a water sports shop called Guam Ocean Adventures. “I don’t think anybody here is faring well.”The island had hoped to draw people from Japan and South Korea, where the vaccination campaigns have lagged, but infrequent flights and strict quarantine requirements back home have kept people away.“That’s an impediment to really growing this,” said Gerry Perez, the visitors bureau’s vice president. “We’ve got a program of organizers who are trying to put butts on the seats of planes.”Tourists during the sunnier days of 2017.Nancy Borowick for The New York TimesAll of those arriving on chartered flights have been from Taiwan, where vaccines have been hard to come by and where travel agencies were quick to capitalize on the offer.One Taiwanese visitor, Yulin Lin, was hiding from the sun under a bright orange gazebo one recent day, watching as her teenage daughters took selfies before stepping into a translucent lagoon. Strapped into diving gear, they were headed for sea life that has overtaken underwater craters named after World War II bombs.Ms. Lin took her family to Guam to get the Pfizer vaccine before the school year started, spending thousands on a travel package that included a stay at the all-inclusive Pacific Islands Club. When she returns home, she will have to spend at least another $2,000, she said, on government-mandated quarantine in a hotel.“I think it’s good for them to be outdoors again. They’re not just locked away in the house in the city,” Ms. Lin said of her daughters. “I expected a lot of things to be closed down, so we’ll have to come back here again.”Across the island, only a few businesses said they had noticed the small bump in tourists. Many are instead relying on steady shipments of U.S. service members arriving for short-term assignments. Others said it simply cost too much to reopen for such a small clientele.At the Hyatt Regency, where the vast lobby bistro has only a few small tables in use and the nightclub has been chained up for months, roughly 100 full- and part-time staff members have been let go during the pandemic.Most of Guam’s luxury boutiques have been closed for months.Anthony Henri Oftana for The New York TimesSeveral gas stations have shortened their operating hours, and some car rental agencies have either sold off their inventories or begun leasing vehicles to local residents at a reduced rate. Independent taxi drivers have decided to find other work, and the local ride-share app, Stroll Guam, frequently tells users that it is out of drivers..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;}About 60 percent of the island’s revenue came from tourism as of 2019, and Guam has lost $200,000 in revenue per hour from Japan, South Korea and Taiwan since the pandemic began, said Mr. Perez, the tourism official.“We believe we will recover, but we won’t recover very quickly. Not for at least maybe two or possibly three years,” he said. “If the gods are with us, we should be able to bring in 80,000 visitors for the next fiscal year.” That would be less than 5 percent of Guam’s usual annual influx.Vaccination — of both the local population and any visitors who need it — is a first step.Standing in the basement of the Pacific Islands Club one recent day, Kai Akimoto guided a group of Taiwanese tourists to a line of black tables, where nurses waited to give them their shots. He has worked six or seven days a week for months now, he said, coordinating vaccine outreach programs for the American Medical Center, a local clinic.Guam once welcomed 1.7 million visitors a year. That number has fallen to a tiny trickle.Anthony Henri Oftana for The New York Times“We’re a community that is not so apprehensive about getting the vaccine. We don’t have as many people who have qualms about it here,” Mr. Akimoto said. “Their qualm is that Guam is still closed. And if this is the ticket to getting back to work and restimulating the economy, then they want people to get the shot.”Down the street, the once-popular Guam Reef Hotel tended to a small group of customers, its lobby and infinity pool nearly empty on a weekend.Jason LaMattery, the hotel’s customer service coordinator, said that the number of guests had dropped by about 98 percent between early 2020 and early 2021. In addition to military visitors, the hotel has had a small number of vaccination tourists.“Things are starting to look up,” he said. “We are slowly recovering from a terrible situation. But are we going to get 100, 200 people from this? No, I don’t think so.” More

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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. More

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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