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    Fed Chair Says Policymakers Should Focus on Full Employment

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    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesSee Your Local RiskNew Variants TrackerVaccine RolloutAdvertisementContinue reading the main storySupported byContinue reading the main storyThe Fed Chair Is Worried About Getting People Back to WorkPlaying down inflation worries, Jerome H. Powell said policymakers needed to focus on restoring maximum employment.Jerome H. Powell, chair of the Federal Reserve, said reaching maximum employment after the pandemic would require “a societywide commitment” in a speech to the Economic Club of New York on Wednesday.CreditCredit…Al Drago for The New York TimesFeb. 10, 2021, 4:39 p.m. ETAs some prominent economists fret that the government might overdo its pandemic response and prompt prices to shoot higher, the nation’s top inflation fighter has a countermessage: Policymakers should stay focused on restoring full employment.“Given the number of people who have lost their jobs and the likelihood that some will struggle to find work in the postpandemic economy, achieving and sustaining maximum employment will require more than supportive monetary policy,” Jerome H. Powell, the chair of the Federal Reserve, said in speech to the Economic Club of New York on Wednesday. “It will require a societywide commitment.”Mr. Powell called policies that would bring the coronavirus pandemic to an end as soon as possible “paramount” and said both workers and businesses that had been disrupted by the crisis “are likely to need continued support.”Unemployment remains sharply elevated at 6.3 percent, up from 3.5 percent before the pandemic, and jumps to about 10 percent when adjusted for misclassified job statuses and recent dropouts from the work force.The pain has also been uneven. Employment has dropped just 4 percent for workers earning high wages but “a staggering 17 percent” for the bottom quartile of earners, Mr. Powell pointed out.Separately, he noted that “inflation has been much lower and more stable over the past three decades than in earlier times,” and later added that he did not expect it to accelerate in a sustained way coming out of the pandemic.Economists have often treated high employment and low inflation as conflicting goals. Policies that foster strong demand and pull workers back into the labor market can push up wages as businesses compete for talent, prompting them to raise prices both because they need to pass along their rising costs and because eager consumers will accept such increases — at least in theory. But the arithmetic has shifted in recent decades, as annual inflation remained stuck below the Fed’s 2 percent goal even during long periods of very low joblessness.President Biden and top Democrats are moving quickly to try to approve a $1.9 billion pandemic relief package. But some economists, including former Treasury Secretary Lawrence H. Summers, have warned that the large package could touch off long-dormant price increases. Many Republican lawmakers have also cited that risk as a reason to oppose the package.Mr. Powell did not weigh in on the package specifically, but he did seem to rebut many of those concerns. He and his colleagues have been unusually vocal in pushing for more fiscal support for the economy throughout the coronavirus era, with some saying the bigger risk is doing too little rather than doing too much.“I’m reluctant to get into what is clearly a very active debate,” Mr. Powell said when asked specifically about fiscal policy. But he added that “it is the essential tool for this situation.”The Coronavirus Outbreak More

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    In Canada, Americans Are Missed, With Limits

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    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesSee Your Local RiskNew Variants TrackerVaccine RolloutAdvertisementContinue reading the main storySupported byContinue reading the main storyIn Canada, Americans Are Missed, With LimitsU.S. visitors usually mean big business for Canada’s tourism industry. But the pandemic has blunted lonesomeness for the country’s best friend.Before the pandemic, American visitors were frequent guests at the Fairmont le Château Frontenac, a castlelike hotel in Quebec City.Credit…GettyFeb. 10, 2021, 5:00 a.m. ETDavid McMillan, the co-owner of Montreal’s famed temple of gluttony, Joe Beef, used to spend his days obsessing over his signature dishes like rabbit with mustard sauce, and lobster spaghetti. These days, however, he has another preoccupation: Studying American vaccination rates.Before the pandemic, so many American gastronomy pilgrims from New York, Boston and Los Angeles came each week to Joe Beef that many local residents, facing a 10-week waiting list, all but gave up trying. The Americans, Mr. McMillan recalled wistfully, thought nothing of buying expensive bottles of Champagne and sucking down oysters until midnight, before purchasing his prophetic-sounding cookbook “Surviving the Apocalypse.”“Ah, how I miss the Americans,” said Mr. McMillan, who presides over a mini-empire of four restaurants in the city, including Liverpool House, where Justin Trudeau once bromanced President Obama. American tourists, he added, accounted for half of Joe Beef’s pre-pandemic weekly revenue of about $118,000, or about 150,000 Canadian dollars. “When the Americans were here every night it felt like we were putting on a Broadway show.”David McMillan is the co-owner of Montreal’s Joe Beef, a restaurant which attracted American gastronomy pilgrims before the pandemic.Credit…David Giral for The New York Times“Now, I look every day at how the U.S. vaccination is going,” he added. “And I get messages every day from American clients asking when they can get back in.”It’s a question many in the Canadian tourism industry have also been asking, ever since the Canada-U. S. border was closed to nonessential travelers in March. The loss of American visitors, armed with their strong dollars and consuming zeal, has buffeted popular destinations like Montreal, Quebec City and Vancouver, already reeling from a debilitating pandemic. Canadian airlines have been forced to make thousands of layoffs.More than two thirds of the 21 million international tourists who came to Canada in 2019 were from the United States, according to government data, with Americans pumping about $8.7 billion into the economy. That’s compared to the nearly $1.3 billion spent by Chinese visitors, about $1 billion by Britons and about $735 million by the French.The absence of American tourists feels acute in many quarters of Canada. Above, a deserted stretch of Rue Notre Dame West in Montreal.Credit…David Giral for The New York TimesAbsence makes the heart grow fonder — but not enough to open borders.Canadians have long had a love-hate relationship with their larger, showier neighbor south of the border. That ambivalence was magnified during the Trump administration, when the mercurial American president slapped punishing tariffs on the country, suggested Canada had burned down the White House during the War of 1812 (the country didn’t then exist) and called its prime minister, Justin Trudeau, “very dishonest” and “weak.”But it has always been more love than hate when it comes to travel between the two countries, with Americans drawn by Canada’s proximity, its common language in most regions and its mix of cosmopolitan cities and natural landscapes.The inauguration of President Joe Biden and Vice President Kamala Harris, who spent her disco-dancing teenage years in Montreal, has renewed the ardor between the two allies, while vaccination has created cautious optimism about taming the pandemic. Still, while the tourism industry is experiencing one of its worst crises since World War II, recent polls show that the vast majority of Canadians want the borders to remain closed. Canadians, a typically rule-abiding people with a deference to scientific authority, have looked with some horror at the spiraling infection rates in the United States, and the handling of the coronavirus during the Trump administration.Mélanie Joly, Canada’s minister of economic development, who is responsible for tourism, said keeping the borders closed was a matter of pragmatism. “We can’t talk about reopening the economy until we stop the spread of the virus,” she said in an interview. Lamenting the absent Americans, she added: “It’s a bit like losing your best friend but you are sick and your best friend is sick and everyone is better off staying at home.”She said she hoped the travel industry would be “back on its feet” by September, as vaccination in Canada and the United States accelerated. The border, she stressed, would remain closed until the pandemic is contained.The Musée d’Art Contemporain de Montréal is popular with American visitors. Credit…David Giral for The New York TimesAt the Musée d’Art Contemporain de Montreal, American museum-goers from New York, Massachusetts and Vermont helped turn a pre-pandemic exhibition on Leonard Cohen, the gravelly-voiced Montreal-born balladeer, into a blockbuster. But the museum’s director, John Zeppetelli, said knowing friends and colleagues in the art world who had contracted the virus while attending art fairs last year in the United States and elsewhere had underscored the need for caution. “Public health has to supersede economic concerns,” Mr. Zeppetelli said.Covid-19 tests, quarantines and a cruise ship ban create obstacles to travel.As it is, Canada itself is experiencing a lethal second wave, with a curfew in effect in Quebec, a lockdown in most parts of Ontario, the country’s most populous province, and border restrictions in each of the country’s Atlantic coast provinces that have required even Canadians from other provinces to quarantine.The Coronavirus Outbreak More

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    Do Fed Policies Fuel Bubbles? Some See GameStop as a Red Flag

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    #masthead-section-label, #masthead-bar-one { display: none }GameStop vs. Wall StreetGameStop Stock FallsYoung, Fearless and Shaking Up Wall StreetHow to Win the Stock MarketGameStop and Your TaxesAdvertisementContinue reading the main storySupported byContinue reading the main storyDo Fed Policies Fuel Bubbles? Some See GameStop as a Red FlagAnalysts warn that low-interest rates are promoting speculative bubbles. The Fed itself has downplayed the possibility that it’s behind asset prices.GameStop’s share price last month when a rush of retail traders coordinated to push up the company’s stock value.Credit…Tony Cenicola/The New York TimesJeanna Smialek and Feb. 9, 2021Updated 5:33 p.m. ETBefore it fueled the run-up in GameStop’s stock, WallStreetBets, the Reddit message board, had another claim to fame: It helped popularize a series of memes centered on the Federal Reserve chair, Jerome H. Powell, and his central bank’s policy of keeping interest rates near rock bottom while buying government bonds to bolster the economy.“Money printer go brrrrr,” many of them read, suggesting that the Fed chair was essentially printing money and propping up markets by pumping cash into them through its program to buy government-backed bonds.Reddit and Twitter made images playing on Mr. Powell’s persona — he’s referred to almost exclusively as “JPOW” on WallStreetBets — so ubiquitous that they’ve become paraphernalia. Amazon now sells sweatshirts (Prime eligible!) printed with an image of the Fed chair as a Christ figure ringed in a halo of golden light. In place of the Bible, the gospel he holds declares, “Recession canceled, stocks only go up.”The blind optimism embodied in that statement — one might call it irrational exuberance — runs the risk of inflating bubbles in markets. Some experts see the saga of GameStop as a cautionary example of problems that can develop when investors get swept up in market momentum, driven to some extent by the Fed’s attempts to keep the economy humming along with low rates and bond purchases.“We’re observing a market mania, and the cost of money has something to do with this,” said Peter Fisher, who teaches finance at Dartmouth’s Tuck School of Business and once served in the Treasury Department and Federal Reserve. “It’s just not credible to suggest that the momentum in equity markets has nothing to do with the Fed’s efforts to keep interest rates so low for so long.”To be clear, GameStop has been an unusual situation.Hedge funds had been betting against the retailer’s stock, or “shorting” it, assuming its share price would fall. A rush of retail traders coordinated to make that bet go bad by pushing up GameStop’s price. Because of the way short selling works, the hedge funds were forced to buy GameStop themselves to limit their losses. The stock price skyrocketed, jumping more than 600 percent in days.A mass of newly minted retail investors has poured into the stock market over the last year, thanks to a confluence of factors including fewer social opportunities and work-from-home arrangements, temporary disruption of sports betting and the rise of trading that is billed as “commission free.” Retail trading of individual stocks now represents roughly 25 percent of overall stock market volume compared with just 10 percent in 2019, according to Goldman Sachs.But a shared belief that this is a good time to buy stocks is also fueling that trend.Leaving aside the surge — and then the crash — in so-called meme stocks, the market appears to be flirting with euphoria. Price-to-earnings ratios and other market barometers are at heights not seen in two decades, since the tail end of the dot-com boom.Much as they did in the tech stock frenzy of the 1990s, individuals are pushing levels of trading activity sharply higher, traders are borrowing on margin to buy stock, and investors are snapping up public offerings from unprofitable or unproven companies.Analysts across Wall Street say the traditional drivers of stock price movements — changing expectations for corporate profits and revenues — have in many cases become less relevant.In fact, the surge has come when the American economy remains damaged by the coronavirus pandemic. Fresh data released on Friday showed the economy in January was still nearly 10 million jobs short of employment levels that prevailed before the virus struck.Some of the bump has come because investors are placing their bets based on expectations about corporate prospects once demand has snapped back and the job market has healed. But analysts said a combination of fiscal stimulus — including checks that put money into consumers’ pockets — and the Fed’s cheap money policies have also helped bolster stock prices.The timing checks out. When the Covid-19 crisis first gripped the United States last February and March, the market plunged. The S&P 500 — which had been at record highs — collapsed by nearly 34 percent in a matter of weeks. Conditions became so volatile that even typically stable markets, such as that for Treasury bonds, began to malfunction under the strain.To keep the panic from freezing the financial system and worsening the economic damage, the Fed cut interest rates nearly to zero on March 15 and announced a series of major actions on March 23. The central bank said that it was willing to buy unlimited quantities of government-backed debt, and that it would tiptoe into the corporate bond market for the first time ever to prevent the pandemic’s market fallout from turning into a full-blown financial crisis.Jerome H. Powell, the Federal Reserve chair, said in late January that monetary policy should not be the first line of defense in containing financial risks.Credit…Al Drago for The New York TimesMarkets rejoiced. Stocks bottomed out and then ricocheted higher, climbing a 9.4 percent the next day and ultimately staging the best three-day performance for the index since 1933.“When essentially your central bank has drawn a line in the sand, as they did last March, then people understand that it’s a one-way bet,” said Paul McCulley, former chief economist of Pimco, a giant asset management shop.The S&P 500 stock index has jumped more than 70 percent since then. To put the breakneck speed of that run-up into context, the S&P 500 has climbed about as much over the past 10 months than it had in the four years leading up to the pandemic.When it comes to the Fed’s influence on stock prices, some of it is purely mechanical. When companies can borrow for less, it allows for bigger profits and cheaper business expansion opportunities, which could elevate their worth in the eyes of stockholders. Some of the increase probably reflects the reality that super-low rates push investors out of bonds and into riskier assets like stocks as they seek better returns.But analysts warn that part of the run-up simply owes to sentiment: Investors believe stocks will go up, in some cases because they believe in the Fed, and so they keep buying.The downside is that people can lose faith in an ever-rising stock market. And when the music stops, an optimism-fueled bubble can become a pessimism-pricked burst.GameStop in particular “does illustrate some of the financial vulnerabilities that can stem from ultra-loose monetary and fiscal policies,” Neil Shearing at Capital Economics wrote in a research note last week, noting that super-low interest rates, government stimulus payments, lockdowns and platforms that democratize trading have all come against a backdrop of “longstanding societal strains and the perception of a widening schism between Wall Street and Main Street.”Still, Mr. Shearing said in an interview, the stock market as a whole does not yet look dramatically overextended, and the Fed needs to focus on righting a pandemic-damaged economy — which is the goal of its low-rate and bond buying policies.The Fed argues that it is not driving asset prices to the degree that many believe. While Mr. Powell, the Fed chair, declined to discuss GameStop specifically at a news conference in late January, he painted financial risks over all as “moderate.” “If you look at where it’s really been driving asset prices, really in the last couple of months, it isn’t monetary policy: It’s been expectations about vaccines, and it’s also fiscal policy,” Mr. Powell said. “I think that the connection between low interest rates and asset values is probably something that’s not as tight as people think because a lot of different factors are driving asset prices at any given time.”But if, as many believe, the Fed’s low rates are a substantial part of the story, it’s unclear that raising them slightly would stop a run-up in stock prices. While slowing bond purchases probably could take the shine off investors’ enthusiasm, that could come at a cost to the real economy.Regardless, Fed officials are unlikely to try to cool things off in the market any time soon.“If one group of speculators wants to have a battle of wills with another group of speculators over an individual stock, God bless them,” Neel Kashkari, the Minneapolis Fed president, said at a virtual town hall event last week. He added that he was not “at all thinking about modifying my views on monetary policy because of speculators in these individual stocks.”AdvertisementContinue reading the main story More

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    ‘We Are Forgotten’: Grocery Workers Hope for Higher Pay and Vaccinations

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    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesSee Your Local RiskVaccine InformationCalifornia Anti-Vaccine ProtestsAdvertisementContinue reading the main storySupported byContinue reading the main story‘We Are Forgotten’: Grocery Workers Hope for Higher Pay and VaccinationsBooming business during the pandemic hasn’t always meant better wages, and they have largely been left off vaccine priority lists.Workers protesting outside the Food 4 Less in Long Beach, Calif. Kroger plans to close the store after the city required “hero pay” for grocery workers.Credit…Maggie Shannon for The New York TimesSapna Maheshwari and Feb. 8, 2021, 5:00 a.m. ETIt has been an exhausting 10 months for Toni Ward Sockwell, an assistant manager at Cash Saver, a grocery chain, in Guthrie, Okla. She has been helping to oversee about 40 anxious employees during a deadly pandemic, vigilantly disinfecting counters at the store and worrying about passing the coronavirus to her elderly mother while dropping off produce.News of the vaccines initially boosted her spirits, but her optimism faded as she learned that grocery store workers in Oklahoma would not be eligible for them until spring.“When they said we were Phase 3, I wanted to laugh,” Ms. Sockwell, 45, said. “We’re around just as many sick people as we are around nonsick people, just like health care workers, because we are always going to be open to supply food to the public.“Health care workers are heroes in my eyes,” she added. “But we are forgotten.”The race to distribute vaccines and the emergence of more contagious variants of Covid-19 have put a renewed spotlight on the plight of grocery workers in the United States. The industry has boomed in the past year as Americans have stayed home and avoided restaurants. But in most cases, that has not translated into extra pay for its workers. After Long Beach, Calif., mandated hazard pay for grocery workers, the grocery giant Kroger responded last week by saying it would close two locations.And now, even as experts warn people to minimize time spent in grocery stores because of new coronavirus variants, The New York Times found only 13 states that had started specifically vaccinating those workers.“Grocers are known to have these very thin margins, which they do, but they have been very profitable during the pandemic,” said Molly Kinder, a fellow at the Brookings Institution who has researched retailers’ pay during the pandemic. “Employers by and large, with only a few exceptions like Trader Joe’s and Costco, ended hazard pay months and months ago.”She added, “If you look at how the virus has gone since then, it’s so much more deadly now.”“We’re around just as many sick people as we are around nonsick people,” Toni Ward Sockwell said of grocery store workers like her. Credit…Nick Oxford for The New York TimesBrookings found that while 13 of the largest retail and grocery companies in the United States earned $17.7 billion more in the first three quarters of 2020 than they did a year earlier, most stopped offering extra compensation to their associates in the early summer. At the same time, some opted to buy back shares and gave big sums to executives.The tension is especially high on the West Coast, where cities like Los Angeles and Seattle have moved forward with mandates that require hazard pay for essential grocery workers — and are now facing threats of store closures and even an end to food bank donations from grocers.Bertha Ayala, who works at a Food 4 Less store in Long Beach, was ecstatic after the city enacted an ordinance last month requiring her store, which is owned by Kroger, to pay its workers an additional $4 per hour of “hero pay” to compensate them for the risks they face.“I love my job,” Ms. Ayala said. “But it has been very stressful.” She said the extra pay was welcome considering the high cost of living in Southern California and as a validation of her sacrifices in going to work.But only days after the additional money started flowing to Ms. Ayala and her colleagues, supervisors told the staff last week that Kroger was shutting down the store because of the hero pay requirement. Kroger also said it was closing a second store in Long Beach. The employees’ union said it had not been told whether Kroger would move the workers to other locations.Bertha Ayala, who works at the Food 4 Less in Long Beach, said the job “has been very stressful.”Credit…Maggie Shannon for The New York Times“Kroger is sending a message, more than anything else,” said Andrea Zinder, president of Local 324 of the United Food and Commercial Workers, which represents about 160 employees at the two stores. “They are trying to intimidate workers and communities: If you pass these types of ordinances, there will be consequences.”The Coronavirus Outbreak More

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    Democrats to Unveil Up to $3,600 Child Tax Credit as Part of Stimulus Bill

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    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesSee Your Local RiskVaccine InformationCalifornia Anti-Vaccine ProtestsAdvertisementContinue reading the main storySupported byContinue reading the main storyDemocrats to Unveil Up to $3,600 Child Tax Credit as Part of Stimulus BillThe credit would send monthly payments to millions of Americans under certain income thresholds for a year starting in July.“This money is going to be the difference in a roof over someone’s head or food on their table,” said Representative Richard E. Neal of Massachusetts.Credit…Anna Moneymaker for The New York TimesEmily Cochrane and Feb. 7, 2021, 5:20 p.m. ETWASHINGTON —  Top House Democrats are preparing to unveil legislation that would send up to $3,600 per child to millions of Americans, as lawmakers aim to change the tax code to target child poverty rates as part of President Biden’s sweeping $1.9 trillion stimulus package.The proposal would expand the child tax credit to provide $3,600 per child younger than 6 and $3,000 per child up to 17 over the course of a year, phasing out the payments for Americans who make more than $75,000 and couples who make more than $150,000. The draft 22-page provision, reported earlier by The Washington Post and obtained by The New York Times, is expected to be formally introduced on Monday as lawmakers race to fill out the contours of Mr. Biden’s stimulus plan.“The pandemic is driving families deeper and deeper into poverty, and it’s devastating,” said Representative Richard E. Neal of Massachusetts, the chairman of the Ways and Means Committee and one of the champions of the provision. “This money is going to be the difference in a roof over someone’s head or food on their table. This is how the tax code is supposed to work for those who need it most.”The credits would be split into monthly payments from the Internal Revenue Service beginning in July, based on a person’s or family’s income in 2020. Although the proposed credit is only for a year, some Democrats said they would fight to make it permanent, a sweeping move that could reshape efforts to fight child poverty in America.The one-year credit appears likely to garner enough support to be included in the stimulus package, but it will also have to clear a series of tough parliamentary hurdles because of the procedural maneuvers Democrats are using to muscle the stimulus package through, potentially without Republican support.With House Democratic leadership aiming to have the stimulus legislation approved on the chamber floor by the end of the month, Congress moved last week to fast-track Mr. Biden’s stimulus plan even as details of the legislation are still being worked out. Buoyed by support from Democrats in both chambers and a lackluster January jobs report, Mr. Biden has warned that he plans to move ahead with his plan whether or not Republicans support it.Republicans, who have accused Mr. Biden of abandoning promises of bipartisanship and raised concerns about the nation’s debt, have largely balked at his plan because of its size and scope after Congress approved trillions of dollars in economic relief in 2020.The Coronavirus Outbreak More

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    Yellen Warns Jobs Will be Slow to Rebound Without Stimulus

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    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesSee Your Local RiskVaccine InformationCalifornia Anti-Vaccine ProtestsAdvertisementContinue reading the main storyCovid-19 News: South Africa Halts Use of AstraZeneca VaccineYellen Warns Jobs Will be Slow to Rebound Without StimulusFeb. 7, 2021, 12:02 p.m. ETFeb. 7, 2021, 12:02 p.m. ETEmpty storefronts in Manhattan last month. Treasury Secretary Janet Yellen is urging lawmakers to pass a sizable coronavirus aid package for the sake of the economy.Credit…Mohamed Sadek for The New York TimesThe U.S. labor market is stalling and in a “deep hole” that could take years to escape if lawmakers do not quickly pass an aid package that gives workers a bridge to the end of the pandemic, Treasury Secretary Janet L. Yellen warned on Sunday.By contrast, passing the $1.9 trillion package that President Biden has proposed could allow the economy to reach full employment by next year, Ms. Yellen said.She rebutted concerns that big spending would lead to inflation, and said that the economy would be stuck in the kind of long, slow recovery that followed the 2008 financial crisis if lawmakers do too little now.“The most important risk is that we leave workers and communities scarred by the pandemic and the economic toll that it’s taken,” Ms. Yellen said on the CNN program “State of the Union.” “We have to make sure this doesn’t take a permanent toll on their lives.”Lawrence H. Summers, a former Treasury secretary under President Bill Clinton, argued in The Washington Post on Thursday that Mr. Biden’s proposal was so big that it might overheat the economy. But Ms. Yellen, a former Federal Reserve chair, said on CNN that she had spent years studying inflation and that she was confident that policymakers had the tools to deal with it if it were to materialize.Democrats in Congress moved last week to fast-track Mr. Biden’s plan, but the details of the legislation are still being worked out. Ms. Yellen said it was important to ensure that not just low-income workers but also those in the middle class, like teachers and police officers, receive the additional support they need.“Of course it shouldn’t go to very well-off families that don’t need the funds,” Ms. Yellen said on the CBS program “Face the Nation,” adding that Mr. Biden was discussing with Congress where to set the income ceiling for eligibility.After a pandemic aid package passes, Ms. Yellen said, Mr. Biden wants to pass a jobs bill built around infrastructure investment, worker training and addressing climate change.AdvertisementContinue reading the main story More

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    Pandemic’s Toll on Housing: Falling Behind, Doubling Up

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    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesSee Your Local RiskVaccine InformationWuhan, One Year LaterAdvertisementContinue reading the main storySupported byContinue reading the main storyPandemic’s Toll on Housing: Falling Behind, Doubling UpEviction moratoriums don’t keep arrears from piling up, and aid to renters may not reach the most vulnerable.Angelica Gabriel and Felix Cesario of Mountain View, Calif., moved out of the bedroom they shared with their two youngest children so they could rent it out. They now sleep in the living room.Credit…Sarahbeth Maney for The New York TimesFeb. 6, 2021Updated 2:54 p.m. ETAs the pandemic enters its second year, millions of renters are struggling with a loss of income and with the insecurity of not knowing how long they will have a home. Their savings depleted, they are running up credit card debt to make the rent, or accruing months of overdue payments. Families are moving in together, offsetting the cost of housing by finding others to share it.The nation has a plague of housing instability that was festering long before Covid-19, and the pandemic’s economic toll has only made it worse. Now the financial scars are deepening and the disruptions to family life growing more severe, leaving a legacy that will remain long after mass vaccinations.Even before last year, about 11 million households — one in four U.S. renters — were spending more than half their pretax income on housing, and overcrowding was on the rise. By one estimate, for every 100 very low-income households, only 36 affordable rentals are available.Now the pandemic is adding to the pressure. A study by the Federal Reserve Bank of Philadelphia showed that tenants who lost jobs in the pandemic had amassed $11 billion in rental arrears, while a broader measure by Moody’s Analytics, which includes all delinquent renters, estimated that as of January they owed $53 billion in back rent, utilities and late fees. Other surveys show that families are increasingly pessimistic about making their next month’s rent, and are cutting back on food and other essentials to pay bills.On Friday, as monthly jobs data provided new evidence of a stalling recovery, President Biden underscored the housing insecurity faced by millions. The rental assistance in his $1.9 trillion relief plan, he said, is essential “to keep people in their homes rather than being thrown out in the street.”Bobbing above the surface of a missed payment, the most desperate are already improvising by moving into even more crowded homes, pairing up with friends and relatives, or taking in subtenants.That is the case with Angelica Gabriel and Felix Cesario, residents of a two-story apartment complex in Mountain View, Calif., largely inhabited by cooks and waitresses and maids and laborers — the kinds of workers hit hardest by the pandemic.With their incomes reduced, Ms. Gabriel, a fast-food worker, and her husband, a landscaper, recently moved out of the bedroom they shared with their two youngest children, 6 and 8. They now rent the bedroom to a friend of a friend, while the couple and the kids sleep on a mattress in the living room. (Two daughters, 14 and 20, continue to share the other bedroom.)The arrangement has kept them current by bringing in $850 toward the $2,675.37 monthly rent, which Ms. Gabriel reeled off to the penny.“We weren’t able to pay the rent by ourselves,” she said in Spanish. “Suddenly the hours fell. You couldn’t pay, buy food.”Such changes are not directly reflected in rent rolls or credit card bills, but various studies show that disrupted and overcrowded households have a host of knock-on effects, including poorer long-term health and a decline in educational attainment.Reflecting the broader economy, the pain in the U.S. housing market is most severe at the bottom. Surveys of large landlords whose units tend to be higher quality and more expensive have been remarkably resilient through the pandemic. Surveys of small landlords and low-income tenants show that late fees and debt are piling up.One measure of relief came when Mr. Biden extended — by two months — a federal eviction moratorium that was scheduled to expire at the end of January, as states and cities also moved to extend their own eviction moratoriums. In addition, $25 billion in federal rental aid approved in December is set to be distributed.But for every million or so households who are evicted in the United States each year, there are many more millions who move out before they miss a payment, who cut back on food and medicine to make rent, who take up informal housing arrangements that exist outside the traditional landlord-tenant relationship.The Coronavirus Outbreak More

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    The Jobs Crisis Is Broader Than It Seemed

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    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesSee Your Local RiskVaccine InformationWuhan, One Year LaterAdvertisementContinue reading the main storyUpshotSupported byContinue reading the main storyThe Jobs Crisis Is Broader Than It SeemedJanuary employment numbers suggest a stalling of progress toward a full recovery.Feb. 5, 2021Updated 1:09 p.m. ETCustomers at a taco restaurant in Manhattan this week. The past year has been brutal for the hospitality industry, but the most recent job figures suggest it’s far from the only sector suffering.Credit…Carlo Allegri/ReutersTo understand what is important about the new employment numbers released Friday, imagine two different varieties of economic downturn.In one, a handful of industries experience a near-shutdown for reasons beyond anyone’s control, driving millions of people out of their jobs. But most other industries carry on unfazed.In another, a broad contraction in spending causes job losses across the economy. The story is not so much about one or two industries being devastated, but lots of them experiencing moderate pain.Both would involve a lot of human suffering, and both would justify government help to the people affected. But they would have strikingly different implications for specific government action.In the first case, you would want very carefully targeted help to enable the people affected to stay on their feet until their industry can reopen. In the second, you would just want to pump money into the economy, to stimulate overall demand for goods and services.In the early phase of the coronavirus pandemic, we saw both types of downturns. Travel-related industries were most affected and experienced the worst job losses, and the pain was sufficiently widespread that there was a generalized crisis of inadequate demand.But as the year progressed, that changed. The federal government injected trillions of dollars into the economy, and the Federal Reserve’s actions to support the financial system generated a rally in markets. Industries that were less directly affected by the pandemic figured out how to get up and running safely. And there was a veritable boom in people who bought stuff — durable goods, to be precise, like furniture and exercise equipment — spending some of the money they couldn’t spend on services like restaurant meals.By the end of 2020, you could tell a story in which workers at hotels, airlines, restaurants and performance arenas desperately needed a hand, but most of the rest of the economy seemed comfortably on a path back to full health.The January employment numbers, however, undermine that story. They suggest a stalling, and in some areas a reversal, of progress toward a full recovery even in the segments of the economy not directly affected.There’s plenty of pain to be found in the leisure and hospitality sector, of course — it lost 61,000 additional jobs on top of a revised 536,000 lost in December. This is a brutal winter for the workers in restaurants, hotels and live entertainment venues. But if that were the extent of the pain, generous unemployment checks to the people affected might be enough to solve the problem. After all, we know what it will take to get those industries back to health: widespread vaccination and an easing of public health fears.The Coronavirus Outbreak More