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    Families Struggle as Pandemic Program Offering Free School Meals Ends

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    A federal benefit guaranteeing free school meals to millions more students has expired as food prices have risen. Many families are feeling the pinch.Like other parents, April Vazquez, a school nutrition specialist in Sioux Falls, S.D., is cutting coupons, buying in bulk and forgoing outings and restaurant meals. Still, a hot lunch in the school cafeteria for her three children is now a treat she has to carefully plan in her budget.The expiration of waivers that guaranteed free school meals for nearly 30 million students across the United States during the pandemic has meant that families like Ms. Vazquez’s who earn just over the income threshold no longer qualify for a federal program allowing children to eat at no cost.As pandemic-era assistance programs lapse and inflation reaches record highs, Ms. Vazquez is hardly alone. The number of students receiving free lunches decreased by about a third, to around 18.6 million in October, the latest month with available data. In comparison, about 20.3 million students ate free in October 2019, before the pandemic. That drop can be attributed to several factors, like being on the cusp of eligibility, lack of awareness that the program had ended by the start of the school year and fewer schools participating in the program overall.“It’s just making things a hell of a lot harder at the most difficult moment that I think American families have seen in a generation,” said Keri Rodrigues, co-founder and president of the National Parents Union network.For Ms. Vazquez, returning to a reality where she must pay full price for a school meal — about $3 or $4 for each child — is trying, and most days, her children bring a packed lunch. (Bagels, cream cheese and apples are typical; grapes and strawberries are rare because they are too expensive.)“It’s painful to know that my kids aren’t going to get free or reduced,” she said.The number of students receiving free lunches decreased by about a third, to about 18.6 million last October.Amber Ford for The New York TimesBefore the pandemic, Ms. Vazquez worked part-time as a special education assistant and her children teetered between qualifying for free or reduced-price meals year to year. But when she took a full-time job as a nutritionist in August 2021, her salary was just enough to bump her family above the income threshold for either benefit: about $42,000 annually for free meals for a family of five and $60,000 for reduced-price meals.“That was actually a worry when I applied for this position, because you don’t know what’s going to happen, am I going to get disqualified for this?” she said, adding that she ultimately took the job with a view toward long-term financial stability.Even as some parents have seen their wages increase and the criteria for free and reduced-price meals expand, those boons have done little to blunt the impact of rising food costs.From the 2019-20 school year to this school year, the income eligibility for free and reduced-price meals has increased by about 7.8 percent. Average hourly wage growth in that same period grew by 15.1 percent. Consumer prices, though, have risen by 15.4 percent, and food prices by 20.2 percent, surpassing wage growth.More on U.S. Schools and EducationChatGPT: OpenAI’s new chatbot is raising fears of students cheating on their homework. But its potential as an educational tool outweighs its risks, our columnist writes.Boosting Security: New federal data offers insight into the growing ways that schools have amped up security over the past five years, as gun incidents on school grounds have become more frequent.Teaching Climate Change: Many middle school science standards don’t explicitly mention climate change. But some educators are finding ways to integrate it into lessons. In Florida: The state will not allow a new Advanced Placement course on African American studies to be offered in its high schools, stating that the course is not “historically accurate.”In the Sioux Falls School District — where Ms. Vazquez works and where her children attend school — about 41 percent of children qualified for free or reduced-price lunch this school year, compared with about 49 percent before the pandemic, said its nutrition director, Gay Anderson. Some parents have remarked that they would be “better off missing half a week’s work to get that free meal,” she said.“The income eligibility guidelines are just not keeping pace with inflation, and families are barely making ends meet. So what we’re seeing is a lot of people are saying, ‘I can’t believe I don’t qualify as I always did.’ If they are making a dollar more, or whatever, that will do it,” Ms. Anderson said.At Wellington Exempted Village Schools in northeastern Ohio, Andrea Helton, the nutrition director, described denying the program to nearly 50 families in a school district of about 1,000 students. She recalled a single mother who lamented, “I missed the cutoff for reduced meals by $100 of gross income.”But Ms. Helton said, “There’s nothing I can do, and it’s heartbreaking.”Andrea Helton is the nutrition director at Wellington Exempted Village Schools in northeastern Ohio. Amber Ford for The New York TimesFamilies are also struggling to navigate a maze of new rules or, unaware that the program had ended, contending with having to pay for meals that had once been free.Megan, a mother of three school-aged children in Ms. Helton’s district who asked to be identified only by her first name because of privacy concerns, said that she had grown accustomed to the program. So when the school pressed her for money owed for unpaid lunches, “it was a shocker.”By the end of the fall semester, she had racked up $136 in debt.When Megan learned that holiday donations to the school district had wiped out that sum, “I just melted into a puddle because when you’re down to that last $100, the last thing you want to have to worry about is whether your kids are eating or not,” she said through tears.It is difficult to estimate how many students are now going hungry. But school officials and nutrition advocates point to proxy measurements — debt owed by families who cannot afford a school meal, for example, or the number of applications for free and reduced-price meals — as evidence of unmet need.In a survey released this month by the School Nutrition Association, 96.3 percent of school districts reported that meal debt had increased. Median debt rose to $5,164 per district through November, already higher than the $3,400 median reported for the entire school year in the group’s 2019 survey.The end of universal school meals has led fewer schools to participate in the program overall: 88 percent of public schools are operating a meal program this school year.Alyssa Schukar for The New York TimesAt school, Ms. Vazquez described witnessing children sitting in the cafeteria with packed lunches consisting of only a bag of chips or an apple. Others have inched toward the cash register with a lunch tray, a look of fear and recognition flashing across the “kid’s eyes when they see the computer, like, ‘Yeah, I know I’m negative, but I want to eat,’” she said.“You see other kids struggle and knowing, hey, I’m in the same boat,” she added. “I know exactly what you’re going through.”The end of universal school meals has led fewer schools to participate in the program overall: About 88 percent of public schools are operating a meal program this school year, compared with 94 percent in the previous school year, and 27.4 million children were eating a school lunch in October, compared with about 30 million in May, the last month of the school year with the program in place. That can create a vicious cycle in which lower participation translates to higher costs per meal, forcing schools to raise the price of a meal and squeezing out even more families, said Crystal FitzSimons of the Food Research and Action Center, which routinely talks to schools about their nutrition programs. Schools and families alike face other administrative and financial complications as school officials grapple with soaring wholesale costs and labor shortages, highlighting other challenges in increasing participation. Now officials must process paperwork to verify income eligibility, devote time and personnel for debt collection and plan ahead for expected revenue and reimbursement rates.At Prince William County Schools in Virginia, Adam T. Russo, the nutrition director, said his office has had to dedicate more resources for outreach and education to inform parents of the policy change. Already, he relies on a multilingual staff to serve the 90,000 students in his district, one of the most diverse in the state.Adam T. Russo relies on a multilingual staff to serve the 90,000 students in his district.Alyssa Schukar for The New York TimesFor many parents, he said, the process was new and potentially confusing given that universal free meals had been in place since some of their children had started school.“If your kid was in kindergarten, first grade, second grade, this is a completely foreign process to your family,” he said. “It’s been table stakes, and we’ve pulled the tablecloth out from under our families.”The application process, as well as the stigma associated with receiving a free or reduced-price lunch, can be prohibitive, advocates say. In 2019, even as some 29.6 million students were eligible for free or reduced-price meals, only 22 million received one, according to research. And about 20 percent of eligible households whose children did not receive either benefit reported food insecurity.“The effort it takes to make sure these resources actually hit those kids, for what that costs, it’s a hell of a lot easier to just say, listen, food is free,” Ms. Rodrigues said.The universal free school meal program pushed the federal cost of school nutrition programs from $18.7 billion in the 2019 fiscal year to $28.7 billion in the 2022 fiscal year, according to data from the Agriculture Department, which administers the program. The department does not have an official estimate of the cost of permanently enacting the policy, a spokeswoman said.Such an initiative has drawn widespread support, with polls showing 74 percent of voters and 90 percent of parents favoring the idea, but federal enactment seems unlikely. Republican lawmakers in Congress oppose permanently extending the policy, arguing that free meals should serve only the neediest and that pandemic-era policies must eventually end.Still, some states — and some parents — have been spurred to take action. For Amber Stewart, a mother of five in Duluth, Minn., the program was lifesaving.Before the pandemic, when the family owed money for meals, her daughter would receive a cold cheese sandwich and a carton of milk, signaling to classmates she could not afford the hot meal. Stern letters demanded repayment and warned of consequences.“Then the pandemic rolled around and everybody was eligible for the free meals, and they delivered it or you could go pick it up,” said Ms. Stewart, who asked to be identified by her maiden name. “It was amazing.”Intent on seeing the program enacted permanently, Ms. Stewart is now lobbying the Minnesota legislature to adopt universal free schools meals statewide, a policy that the governor recently endorsed. Under the new income guidelines, Ms. Stewart’s children now qualify for reduced-price meals. And because of a state law that covers the fees normally owed by families in that category, they are not charged the 35 or 50 cents for breakfast or lunch.That has been crucial, she said, because even after weekly trips to the food bank, she does not have nearly enough to get by.“Our money is really tight,” she said. “With the cost of groceries and everything, we’re barely making it.” More

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    After a Burst of New Businesses, a Cooling Economy Intrudes

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    The pandemic has brought a boom in entrepreneurship, but higher interest rates, a chill in venture capital and fears of recession now pose obstacles.An unexpected result of the pandemic era has been a surge in entrepreneurial activity. Since 2020, applications to start new businesses have skyrocketed, reversing a decades-long slump.The reasons for the boom are manifold. Millions of people were suddenly laid off, giving them the time, and inclination, to start new businesses. Personal savings jumped, buoyed partly by a frothy stock market and government stimulus payments, providing would-be entrepreneurs with the means to fulfill their visions. Rock-bottom interest rates made money cheap and widely available.But the ebullient economic environment that helped foster this entrepreneurial spirit has given way to high inflation, rising interest rates and dwindling savings. That has left these nascent businesses to navigate challenging financial crosscurrents — and a possible recession — at a moment when they are at their most fragile. Even under normal conditions, roughly half of new businesses fail within five years.“Young businesses are inherently vulnerable,” said John Haltiwanger, an economist at the University of Maryland who studies entrepreneurship. “They’re likely to fail, and they are especially likely to fail in a recession.”In 2021, Americans filed applications to start 5.4 million new businesses, according to data from the Census Bureau. That was on top of the 4.4 million applications filed in 2020, which had been the highest by far in the more than 15 years the government had been keeping track. (Filings last year through November were running ahead of 2020 but behind 2021; figures for December will be released this week.)Data on actual business formation will not become available for several years, so it is not possible yet to measure the effects of the cooling economy on new ventures. Whether these new businesses pull through could have broad implications for the health and dynamism of the overall economy.“Innovation drives gains in productivity,” said John Dearie, president of the Center for American Entrepreneurship, an advocacy organization. “And innovation comes disproportionately from new businesses.”Jennifer Sutton started a juice and wellness bar in Park City, Utah. She is worried about the prospect of a recession and how it would affect the tourism that supports her business.Kim Raff for The New York TimesBut he cautioned that the Federal Reserve’s monetary policy — intended to tamp down the fastest price increases in decades — is “ramping up the headwinds facing entrepreneurs to gale force by crushing demand and by increasing the price of money.”In interviews, entrepreneurs expressed a mix of resolve and resignation about the months ahead. Some said they had learned lessons from the pandemic’s upheaval about how to endure financial adversity that they believed had recession-proofed their business models. Others were cleareyed about needing outside funding that they feared would no longer arrive.Inflation F.A.Q.Card 1 of 5What is inflation? More

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    What TikTok Told Us About the Economy in 2022

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    From Barbiecore to revenge travel, social media trends gave us a clear picture of the forces reshaping the economy.The unemployment rate has hovered at 3.7 percent for months. But it is the TikTok-famous “quiet quitting” and live-tweeted resignations that really explained what was going on in America’s job market in 2022, a moment of renewed worker power and remarkable upheaval.While government data can tell us that the world is rapidly changing three years into the pandemic, internet trends — the ones that took off and the apps we’ve come to rely on — illustrate how people are responding to a new and evolving normal.Negroni sbagliatos catapulted into fame and onto cocktail menus, underlining the fact that people were ready to get back to spending on fancy happy hours. Instagram feeds filled with beach and mountain pictures as “revenge travel” took flight. We collectively learned what “vibe shift” means just as we realized that the economy was experiencing one.Below is a rundown of a few of the year’s more colorful memes and moments — and what they herald for 2023.Break My SoulBeyoncé imprinted the moment with her instant hit titled “Break My Soul.”Chris Pizzello/Invision, via Associated PressBetween high inflation and years of workplace flux — including pandemic firings, work-from-home burnout and most recently a plodding return to office — the economic status quo seemed like an increasingly bad deal to many Americans in 2022. Beyoncé imprinted the discontent on your favorite music app, releasing an instant hit titled “Break My Soul.” Its lyrics included “And I just quit my job, I’m gonna find new drive,” inspiring the internet to ask whether Queen B was encouraging everyone to join the Great Resignation.In fact, people felt so conflicted about work this year that they needed new words to describe it. The TikTok discourse gave us “quiet quitting,” a trend in which workers do the bare minimum. Then came “career cushioning,” discreetly lining up a backup plan while in your current job. At the same time, employers reported “worker hoarding,” in which they avoided firing people after getting burned by long months in which open jobs far outnumbered applicants. The jobs data made it clear that the labor market was out of balance, but it was social discussion that showed just how much.Money Printer Go ‘Brrrr-oke’The Federal Reserve reversed two years of rock-bottom rates this year, raising borrowing costs at the fastest pace in decades in a bid to control rapid inflation. Actual prices have been slow to react, but Reddit wasn’t. Jerome H. Powell, the Fed chair, formerly featured in memes that sported the tagline “money printer go brrrr” and showed him cranking out cheap and easy cash. In 2022, the memes got an update — to Shrek. Today’s memes compare Mr. Powell to the 2001 movie character Lord Farquaad, who famously declared, “Some of you may die, but that is a sacrifice I’m willing to make.”The crankiness on the Reddit discussion boards came as the Fed’s actions cost many investors money. Prominent cryptocurrencies tanked, and asset prices in general swooned, with stocks down about 20 percent from the start of the year. Financial markets are likely to remain on edge into 2023: Inflation is slowing but remains high, and the Fed is poised to raise rates at least slightly more to control it. The memes, in short, are likely to remain grim.Butter BoardsTikTok spent part of this year going crazy for butter boards. Sizie Cornell, via Associated PressTikTok spent part of this year going crazy for butter boards: slabs of the spread covered in flowers, fancy salt, honey or other flavorings. Was this a delayed reaction to the low-fat, no-fat fads of decades past? Evidence that influencers can make us do anything? One thing we can say for sure: It was expensive.That’s because prices for food — and especially for dairy products — have jumped sharply this year. Butter and margarine costs were 34 percent higher in November than 12 months before. Food overall was up 10.6 percent.But as the butter board’s enduring popularity underscored, people buy food even when it is getting costlier. In fact, while retailers reported that some lower-income consumers began pulling back on discretionary purchases and giving priority to necessities, spending in general has been fairly resilient despite a year and a half of rapid price increases and months of Fed rate moves.So far, inflation also remains heady, and it extends well beyond the dairy aisle. A popular price index is still 7.1 percent above its level a year ago, far faster than the typical 2 percent annual pace.BarbiecoreActor Margo Robbie in character in the film “Barbie.”Jaap Buitendijk/Warner Bros. Pictures, via Associated PressAmericans continued to shop in 2022, but what they are buying has been undergoing a quiet change. Americans had been snapping up goods like couches and clothing early in the pandemic, but they are now slowly shifting their purchases back toward services.Social media popularized over-the-top fashions in 2022, including “Barbiecore” (very pink, named for the doll and upcoming movie) and “avant apocalypse,” which paid sartorial homage to the coming end days. But another big trend of the year — buying used clothes, #thrifted — may have more accurately captured the year’s changing economic energy. Clothing store sales are slowing down, official data show, and falling outright if you subtract out apparel inflation.Have a Reservation?As the world reopened and Americans returned to spending on experiences, restaurant tables, in particular, became a hot commodity. Walk-in tables were down 14 percent compared with 2019, while tables with online reservations increased by 24 percent, according to data from the table booking app OpenTable. The figures confirmed what denizens of New York and other cities could tell you (and did, in various media dissections): It was a battle to get a table in 2022 as waitstaff shortages collided with hot diner demand.OpenTable’s data show that happy hour especially surged in 2022. People are dining earlier, and, after years of missed work drinks, this is the overpriced cocktail’s comeback tour. It’s one added reason that Negronis made with Prosecco, popularized by a promotional video for the show “House of the Dragon” on HBO’s TikTok account, are having a moment.Negroni cocktails where popularized by a promotional video for the show “House of the Dragon.”Leah Nash for The New York TimesNo Room at the InnIt turns out people missed the beach just as much as they missed that 5 o’clock martini. Cue the “revenge travel.”Vacationers made up for pandemic-delayed trips en masse in 2022, and as they splurged on big adventures, air traffic rebounded sharply, getting close to its 2019 levels. Hotel revenues fully recovered. At the same time, some travel-related sectors skated by on extremely thin staffing. Employment in accommodation stands at just 83 percent of its February 2020 level. Air transport employment overall is up, but industry groups have complained of worker shortages in key areas like air traffic control.As hotels, motels and airlines struggled to operate at full capacity, room rates and fares rocketed higher and major disruptions became commonplace. Air travel service complaints were more than 380 percent above their 2019 level as of September, according to the Department of Transportation. The mismatch underscored that key parts of the American economy are struggling to reach a new equilibrium after pandemic-induced tumult, even if people want to be in #vacationmode.Peak WeddingIn some instances, pandemic trends are colliding with demographic trends — and nothing showed that more clearly than the many wedding photos that filled up Instagram feeds this year. After years of historically few ceremonies leading up to the pandemic, this was probably the biggest year for weddings since 1997, based on data and forecasts compiled by the Wedding Report, a trade publication.Always, Always, Always a BridesmaidYou might have noticed a lot of wedding invitations in 2022. It was probably the biggest year for tying the knot since 1997.

    Note: Future data represent forecastsSource: The Wedding ReportBy The New York TimesThe pop, the combined result of pandemic-delayed nuptials and a big group of marriage-age millennials, translated into booked-up venues and vendors. It has also raised questions about the economic ripple effects: Will those couples have children, sending up birth data, which already ticked up slightly in 2021? Will they buy houses? We could start to find out in 2023.GrandmillennialTikTok sensation Tariq, known for his love of corn.OK McCausland for The New York TimesAmerica’s younger generations are doing more than getting married. They have been forming their own households and buying houses in greater numbers since the start of the pandemic. In the process, they have helped to fuel strong demand for houses and popularized interior decorating trends — including “grandmillennial,” also affectionately called “granny chic” on Pinterest, in which the young-ish repurpose floral wallpaper and old-style lamps for a cozy but updated look.But many millennials, who are roughly ages 26 to 41 and in their peak home-buying years, may be losing their shot at becoming real estate influencers. As the Fed lifted interest rates to stifle rapid inflation this year, a wave of would-be homeowners began to find that the combination of heftier mortgage costs and high home prices meant they could not afford to buy. New home sales have declined notably. Fed rates are expected to continue climbing in 2023, which could make for a tough road ahead for a generation struggling to make the leap in homeownership. And after a year of serious economic changes and major policy adjustments, it’s uncertain what is coming next: A recession? A benign inflation cool-down?On the bright side, we will have social trends to help us interpret the data, and occasionally to help us find its lighter side. To quote corn kid, a precocious vegetable lover who ascended to TikTok royalty in 2022: “I can’t imagine a more beautiful thing.”Reporting was contributed by More

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    Why It’s Hard to Predict What the Economy Will Look Like in 2023

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    Historical data has always been critical to those who make economic predictions. But three years into the pandemic, America is suffering through an economic whiplash of sorts — and the past is proving anything but a reliable guide.Forecasts have been upended repeatedly. The economy’s rebound from the hit it incurred at the onset of the coronavirus was faster and stronger than expected. Shortages of goods then collided with strong demand to fuel a burst in inflation, one that has been both more extreme and more stubborn than anticipated.Now, after a year in which the Federal Reserve raised interest rates at the fastest pace since the 1980s to slow growth and bring those rapid price increases back under control, central bankers, Wall Street economists and Biden administration officials are all trying to guess what might lie ahead for the economy in 2023. Will the Fed’s policies spur a recession? Or will the economy gently cool down, taming high inflation in the process?With typical patterns still out of whack across big parts of the economy — including housing, cars and the labor market — the answer is far from certain, and past experience is almost sure to serve as a poor map.“I don’t think anyone knows whether we’re going to have a recession or not, and if we do, whether it’s going to be a deep one or not,” Jerome H. Powell, the Fed chair, said during a news conference last week. “It’s not knowable.”Doubt about what comes next is one reason the Fed is reorienting its monetary policy approach. Officials are now nudging borrowing costs up more gradually, giving them time to see how their policies are affecting the economy and how much more is needed to ensure that inflation returns to a slow and steady pace.As policymakers try to guess what lies ahead, the markets that have been most disrupted in recent years illustrate how big changes — some spurred by the pandemic, others tied to demographic shifts — continue to ricochet through the economy and make forecasting an exercise in uncertainty.Housing is strange.The pandemic era has repeatedly upended the housing market. The virus’s onset sent urbanites rushing for more space in suburban and small-city homes, a trend that was reinforced by rock-bottom mortgage rates.Then, reopenings from lockdown pulled people back toward cities. That helped push up rents in major metropolitan areas — which make up a big chunk of inflation — and, paired with the Fed’s rate increases, it has helped to sharply slow home buying in many markets.The question is what happens next. When it comes to the rental market, new lease data from Zillow and Apartment List suggests that conditions are cooling. The supply of available apartments and homes is also expected to climb in 2023 as long-awaited new residential buildings are finished.The Biden PresidencyHere’s where the president stands after the midterm elections.A New Primary Calendar: President Biden’s push to reorder the early presidential nominating states is likely to reward candidates who connect with the party’s most loyal voters.A Defining Issue: The shape of Russia’s war in Ukraine, and its effects on global markets, in the months and years to come could determine Mr. Biden’s political fate.Beating the Odds: Mr. Biden had the best midterms of any president in 20 years, but he still faces the sobering reality of a Republican-controlled House for the next two years.2024 Questions: Mr. Biden feels buoyant after the better-than-expected midterms, but as he turns 80, he confronts a decision on whether to run again that has some Democrats uncomfortable.“The frame I would put on 2023 is that we’re really going to enter the year back in a demand-constrained environment,” said Igor Popov, chief economist at Apartment List. “We’re going to see more apartments competing for fewer renters.”Mr. Popov expects “small growth” in rents in 2023, but he said that outlook is uncertain and hinges on the state of the labor market. If unemployment soars, rents could fall. If workers do really well, rents could rise more quickly.At the same time, existing leases are still catching up to the big run-up that has happened over the past year as tenants renew at higher rates. It is hard to guess both how much official inflation will converge with market-based rent data, and how long the trend will take to fully play out.“It could resolve in months, or it could take a year,” said Adam Ozimek, the chief economist at the Economic Innovation Group.Then there’s the market for owned housing, which does not count into inflation but does matter for the pace of overall economic growth. New home sales have fallen off a cliff as surging mortgage costs and the recent price run-up has put purchasing a house out of reach for many families. Even so, new mortgage applications have ticked up at the slightest sign of relief in recent months, evidence that would-be buyers are waiting on the sidelines.Demographics explain that underlying demand. Many millennials, the roughly 26- to 41-year-olds who are America’s largest generation, were entering peak home-buying ages right around the onset of the pandemic, and many are still in the market — which could put a floor under how much home prices will moderate.Plus, “sellers don’t have to sell,” said Mike Fratantoni, chief economist at the Mortgage Bankers Association, who expects home prices to be “flattish” next year as demand wanes but supply, which was already sharply limited after a decade of under-building following the 2007 housing crash, further pulls back.Given all the moving parts, many analysts are either much more optimistic or very pessimistic.“It’s almost comical to see the house price growth forecasts,” Mr. Popov said. “It’s either 3 percent growth or double-digit declines, with almost nothing in between.”The car market remains weird, too.The car market, a major driver of America’s initial inflation burst, is another economic puzzle. Years of too little supply have unleashed pent-up demand that is spurring unusual consumer and company behavior.Used cars were in especially short supply early in the pandemic, but are finally more widely available. The wholesale prices that dealers pay to stock their lots have plummeted in recent months.But car sellers are taking longer to pass those steep declines along to consumers than many economists had expected. Wholesale prices are down about 14.2 percent from a year ago, while consumer prices for used cars and trucks have declined only 3.3 percent. Many experts think that means bigger markdowns are coming, but there’s uncertainty about how soon and how steep.The new car market is even stranger. It remains undersupplied amid a parts shortages, though that is beginning to change as supply chain issues ease and production recovers. But both dealers and auto companies have made big profits during the low-supply, high-price era, and some have floated the idea of maintaining leaner production and inventories to keep their returns high.Jonathan Smoke, chief economist at Cox Automotive, thinks the normal laws of supply and demand will eventually reassert themselves as companies fight to retain customers. But getting back to normal will be a gradual, and perhaps halting, process.Still, “we’re at an inflection point,” Mr. Smoke said. “I think new vehicles are going to be less and less inflationary.”Labor markets are the most important question mark.Perhaps the most critical economic mystery is what will happen next in America’s labor market — and that is hard to game out.Part of the problem is that it’s not entirely clear what is happening in the labor market right now. Most signs suggest that hiring has been strong, job openings are plentiful, and wages are climbing at the fastest pace in decades. But there is a huge divergence between different data series: The Labor Department’s survey of households shows much weaker hiring growth than its survey of employers. Adding to the confusion, recent research has suggested that revisions could make today’s labor growth look much more lackluster.“It’s a huge mystery,” said Mr. Ozimek from the Economic Innovation Group. “You have to figure out which data are wrong.”That confusion makes guessing what comes next even more difficult. If, like most economists, one accepts that the labor market is hot right now, Fed policy is clearly poised to cool it down: The central bank has raised interest rates from near zero to about 4.4 percent this year, and expects to lift them to 5.1 percent in 2023.Those moves are explicitly aimed at slowing down hiring and wage growth, because central bankers believe that inflation for many types of services will remain elevated if pay gains remain as strong as they are now. Dentist offices and restaurants will, in theory, try to pass climbing labor costs along to consumers to protect their profits. But it is unclear how much the job market needs to slow to bring pay gains back to the more normal levels the Fed is looking for, and whether it can decelerate sufficiently without plunging America into a painful recession.Companies seem to be facing major labor shortages, partly as a wave of baby boomers retires, and Fed officials hope that will make firms more inclined to hang onto their workers even if the broader economy slows drastically. Some policymakers have suggested that such “labor hoarding” could help them achieve a soft landing that bucks historical precedent: Unemployment could rise notably without spiraling higher, cooling the economy without tipping it into a painful downturn.Typically, when the unemployment rate rises by more than 0.5 percentage points, like the Fed forecasts it will do next year, the jobless rate keeps rising. Loss of economic momentum feeds on itself, and the nation plunges into a recession. That pattern is so established it has a name: the Sahm Rule, for the economist Claudia Sahm.Yet Ms. Sahm herself said that if the axiom were to break down, this wacky economic moment would be the time. Consumers are sitting on unusual savings piles that could help sustain middle-class spending even through some job losses, preventing a downward spiral.“The thing that has never happened would have to happen,” she said. “But hey, things that have never happened have been happening left and right.” More

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    Forget Stock Predictions for Next Year. Focus on the Next Decade.

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    Wall Street’s market forecasts for 2023 are worthless, our columnist says. But the long view is much clearer.The Federal Reserve raised interest rates again on Wednesday, but by less than it has in previous rounds this year. A day earlier, the government reported that the annual rate of inflation, though still painfully high, dropped a bit in November, to 7.1 percent from 7.7 percent in October.If you want to know what these, and other economic developments, mean for the stock market in the year ahead, there are plenty of forecasts coming out of Wall Street.It is December, after all, when investment strategists gear up and produce earnest, specific forecasts for where the S&P 500 will be at the end of the next calendar year.With inflation soaring, the Fed raising interest rates, Russia’s war in Ukraine and China’s decision to drop its “zero Covid” policy, a recession all but certain in Europe and increasingly likely in the United States, clear maps of the future would be particularly welcome now.But that’s not what the one-year forecasts from Wall Street are providing.These attempts at clairvoyance are stymied by a fundamental problem: It’s simply impossible to forecast the path of the markets six months or a year ahead with accuracy and consistency, as many academic studies have shown. That the financial services industry continues to label these unreliable numbers as forecasts is a triumph of breathtaking chutzpah — a technical term for shameless audacity.It goes a long way in explaining why the vast majority of active investment managers can’t regularly and convincingly outperform the market — a failure I reported in a recent column about mutual funds. If you have no idea where stocks are going, it doesn’t make much sense to place specific bets on them, as active managers do.Accepting UncertaintyThese annual reports often contain impressive erudition. I pore through this stuff compulsively in search of nuggets that I can file away for some future column.Our Coverage of the Investment WorldThe decline of the stock and bond markets this year has been painful, and it remains difficult to predict what is in store for the future.Tech Stocks Sputter: Big Tech stocks have suffered staggering losses this year. But is this a good time to buy? Maybe, if you’re in it for the long term, our columnist says.Navigating Uncertainty: There seems to be growing acceptance that some kind of a recession might be coming. Here is how investors should approach the situation.A Bad Year for Bonds: This has been the most devastating time for bonds since at least 1926. But much of the damage is already behind us and the outlook for 2023 is better.Weathering the Storm: The rout in the stock and bond markets has been especially rough on people paying for college, retirement or a new home. Here is some advice.But with a high degree of confidence, I will repeat a prediction I’ve made before: The consensus forecast this year will be wrong.Read these things if you find them interesting, but don’t rely on them — or those who produce them — to guide your investing.Instead, embrace uncertainty.Accept that you need to invest without knowing what will happen to your money over the short term. So be sure, first, to put aside enough money in a safe place, like a bank account or money-market fund, to pay the bills in the months ahead.But because the stock market tends to rise over long periods, and because bonds are now generating reasonable income (as I explained last week), it’s wise to invest for a horizon of a decade or more in low-cost index funds that track the entire stock and bond markets.Don’t base your investments on specific predictions of where the stock market is heading over the short term, because nobody knows. Making bets on the basis of these forecasts is gambling, not investing.The History. Consider how bad Wall Street forecasts have been.In 2020, I noted that the median Wall Street forecast since 2000 had missed its target by an average 12.9 percentage points a year. That error over two decades was astonishing: more than double the actual average annual performance of the stock market!Imagine a weather forecast as bad as that. A meteorologist says the high temperature the next day will be 25 degrees Fahrenheit and it will snow, so you dress for a winter storm. Actually, the temperature turns out to be 60 degrees and the skies are clear. That’s about the level of accuracy for Wall Street strategists through 2020.They continued their errant ways the next year, issuing a median forecast of 3,800 for the closing level of the S&P 500 in 2021. But the index ended the year at 4,766.18, an error of about 25 percent. In a word, the forecast was horrible.The forecasts for 2022 look inaccurate, as usual, though we won’t know for sure until the end of this month. A year ago, the Wall Street consensus was that the S&P 500 would reach 4,825 at the end of 2022, a modest increase from 2021. But at the moment, the index is hovering around 4,000. In other words, a year ago, strategists were saying that 2022 would be just fine for stocks. It hasn’t been.The FutureAfter forecasts that were too low for 2021 and too high for 2022, Wall Street strategists are holding steady for 2023. The consensus is that the S&P 500 will end the year at 4,009, roughly around where it has traded in recent days.That could be right. Who knows? But if it does turn out to be correct, it will be an accident, not the result of uncanny knowledge about 2023.This inability to forecast the future goes way beyond Wall Street. Pandemics are part of human history and we know there will be more of them. But no one was capable of anticipating the specific Coronavirus pandemic that started in 2020, or the 6.6 million deaths, 646.2 million cases, and the complex economic and financial damage it continues to cause.Wall Street didn’t know that Vladimir Putin would order Russia’s invasion of Ukraine this year — or that fossil fuel companies would end up leading the stock market in 2022. The war in Ukraine and China’s attempt to shift from its Covid lockdown policy will both influence the stock market in the United States in the year ahead. But how, exactly? We can guess, but anyone who claims to know is delusional.No doubt, enormous changes that aren’t visible yet are coming in 2023. Inflation and interest rates preoccupy financial markets now, but there is no assurance that will be the case a year from now.Lack of specific knowledge about the future is a fact of life. Guessing, or betting wildly, isn’t a prudent solution.Instead, diversify. Hedge your bets so you are prepared whether specific markets move up or down, and be ready to ride out extended losses, like those of 2022. This strategy has been painful this year, though it has paid off over longer periods.A simple, classic investment strategy — a diversified portfolio made up of broad stock and bond index funds, with 60 percent allocated to stock and 40 percent to bonds, did terribly in 2022. The Vanguard Balanced Fund, which takes just this approach (though it is limited to U.S. and not global assets, which I’d favor), has lost nearly 14 percent this calendar year.But even including this year’s awful returns, this portfolio has gained more than 6 percent annualized, over the last 20 years. At that rate, it doubles in value every 11 or 12 years. There is no guarantee that it will continue to generate those returns in the future, but Vanguard said this week that it probably would.Vanguard doesn’t bother with year-ahead market forecasts because it recognizes that they are pointless. It does make estimates for market returns over a 10-year horizon. Stock market projections of longer duration have much greater accuracy than those for the next six months or a year, as Robert Shiller, the economist, demonstrated in the 1980s. He was recognized for that insight when he received the Nobel in economic science in 2013.At the moment, Vanguard’s 10-year outlook is fairly auspicious. The falling markets of the last year have led to better stock and bond valuations.It’s possible to be intelligently optimistic about financial markets over the next few decades, without knowing where the markets are heading over the next year. I wouldn’t bet on any single financial asset just because a Wall Street expert says it is about to rise.Using your money that way — whether you are buying stocks, bonds or far less solid assets like cryptocurrency — is gambling, not investing. But if you stay humble, invest in the total stock and bond markets and manage to hang in for decades, your chances of prospering are much greater. That prediction is reliable. More

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    Inflation Forecasts Were Wrong Last Year. Should We Believe Them Now?

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    Economists misjudged how much staying power inflation would have. Next year could be better — but there’s ample room for humility.At this time last year, economists were predicting that inflation would swiftly fade in 2022 as supply chain issues cleared, consumers shifted from goods to services spending and pandemic relief waned. They are now forecasting the same thing for 2023, citing many of the same reasons.But as consumers know, predictions of a big inflation moderation this year were wrong. While price increases have started to slow slightly, they are still hovering near four-decade highs. Economists expect fresh data scheduled for release on Tuesday to show that the Consumer Price Index climbed by 7.3 percent in the year through November. That raises the question: Should America believe this round of inflation optimism?“There is better reason to believe that inflation will fall this year than last year,” said Jason Furman, an economist from Harvard who was skeptical of last year’s forecasts for a quick return to normal. Still, “if you pocket all the good news and ignore the countervailing bad news, that’s a mistake.”Economists are slightly less optimistic than last year.Economists see inflation fading notably in the months ahead, but after a year of foiled expectations, they aren’t penciling in quite as drastic a decline as they were last December.The Fed officially targets the Personal Consumption Expenditures index, which is related to the consumer price measure. Officials particularly watch a version of the number that illustrates underlying inflation trends by stripping out volatile food and fuel prices — so those forecasts give the best snapshot of what experts are anticipating.Last year, economists surveyed by Bloomberg expected that so-called core index to fall to 2.5 percent by the end of 2022. Instead, it is running at 5 percent, twice that pace.This year, forecasters expect inflation to fade to 3 percent by the end of 2023.The Federal Reserve’s predictions have followed a similar pattern. As of last December, central bankers expected core inflation to end 2022 at 2.7 percent. Their September projections showed price increases easing to 3.1 percent by the end of next year. Fed officials will release a new set of inflation forecasts for 2023 on Wednesday following their December policy meeting.Supply chains are healing.A worker at a garment factory in Vernon, Calif.Mark Abramson for The New York TimesOne reason to think that the anticipated but elusive inflation slowdown will finally show up in 2023 ties back to supply chains.At this time last year, economists were hopeful that snarls in global shipping and manufacturing would soon clear; consumer spending would shift away from goods and back to services; and the combination would allow supply and demand to come back into balance, slowing price increases on everything from cars to couches. That has happened, but only gradually. It has also taken longer to translate into lower consumer prices than some economists had expected.Inflation F.A.Q.Card 1 of 5What is inflation? More

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    Why Are Middle-Aged Men Missing From the Labor Market?

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    Men ages 35 to 44 are staging a lackluster rebound from pandemic job loss, despite a strong economy.For the past five months Paul Rizzo, 38, has been delivering food and groceries through the DoorDash app. But he spent the first half of 2022 earning no paycheck at all — reflecting a surprising trend among middle-aged men.After learning last Christmas that his job as an analyst at a hospital company was being automated, Mr. Rizzo chose to stay at home to care for his two young sons. His wife wanted to go back to work, and he was discouraged in his own career after more than a decade of corporate tumult and repeated disappointment. He thought he might be able to earn enough income on his investments to pull it off financially.Mr. Rizzo’s decision to step away from employment during his prime working years hints at one of the biggest surprises in today’s job market: Hundreds of thousands of men in their late 30s and early 40s stopped working during the pandemic and have lingered on the labor market’s sidelines since. While Mr. Rizzo has recently returned to earning money, many men his age seem to be staying out of the work force altogether. They are an anomaly, as employment rates have rebounded more fully for women of the same age and for both younger and older men.About 87 percent of men ages 35 to 44 were working as of October, down from 88.3 percent before the pandemic struck in 2020. The stubborn decline has spanned racial groups, but it has been most heavily concentrated among men who — like Mr. Rizzo — do not have a four-year college degree. The pullback comes despite the fact that wages are rising and job openings are plentiful, including in fields like truck driving and construction, where college degrees are not required and men tend to dominate.Economists have not determined any single factor that is keeping men from returning to work. Instead, they attribute the trend to a cocktail of changing social norms around parenthood and marriage, shifting opportunities, and lingering scars of the 2008 to 2009 downturn — which cost many people in that age group jobs just as they were starting their careers.“Now, all of a sudden, you’re kind of getting your life together, and if you’re in the wrong industry …” Mr. Rizzo said, trailing off as he discussed his recent labor market experience. “I wasn’t the only one who dropped out. I can tell you that.”How male employment shifted during the pandemicMen ages 35-44 are working at a notably lower rate than before the pandemic.

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    Change in male employment rate since Feb. 2020 by age group
    Note: Three-month rolling average of seasonally adjusted dataSource: Bureau of Labor StatisticsBy The New York TimesHow female employment shifted during the pandemicWomen’s employment has rebounded across age groups.

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    Change in female employment rate since Feb. 2020 by age group
    Note: Three-month rolling average of seasonally adjusted dataSource: Bureau of Labor StatisticsBy The New York TimesMen have been withdrawing from the labor force for decades. In the years following World War II, more than 97 percent of men in their prime working years — defined by economists as ages 25 to 54 — were working or actively looking for work, according to federal data. But starting in the 1960s, that share began to fall, mirroring the decline in domestic manufacturing jobs.What is new is that a small demographic slice — men who were early in their careers during the 2008 recession — seems to be most heavily affected.“I think there’s a lot of very discouraged people out there,” said Jane Oates, a former Labor Department official who now heads WorkingNation, a nonprofit focused on work force development. Men lost jobs in astonishing numbers during the 2008 financial crisis as the construction and home-building industries contracted. It took years to regain that ground — for men who were then in their 20s and early 30s and just getting started in their careers, employment rates never fully recovered. Economists came up with a range of explanations for the men’s slow return to the labor force. After the war on crime of the 1980s and 1990s, more men had criminal records that made it difficult to land jobs. The rise of opioid addiction had sidelined others. Video games had improved in quality, so staying home might have become more attractive. And the decline of nuclear family units may have diminished the traditional male role as economic provider.Now, recent history appears to be repeating itself — but for one specific age group. The question is why 35- to 44-year-old men seem to be staying out of work more than other demographics.Patricia Blumenauer, vice president of data and operations at Philadelphia Works, a work force development agency, said she had observed a dip in the number of men in that age range coming in for services. A disproportionately high share of those who do come in leave without taking a job.Ms. Blumenauer said that age range is a group “that we’re not seeing show up.” She thinks some men who lost their blue-collar jobs early in the pandemic may be looking for something with flexibility and higher pay. “The ability to work from home three days a week, or have a four-day weekend — things that other jobs have figured out — aren’t possible for those types of occupations.”When men don’t find those flexible jobs or can’t compete for them, they might choose to make ends meet by staying with relatives or doing under-the-table work, Ms. Blumenauer said.The pandemic has probably also slowed America’s already-weak family formation, giving single or childless men less of an incentive to settle into steady jobs, said the economist Ariel Binder. On the flip side, disruptions to schooling and child care meant that some men who already had families may have stopped doing paid work to take on more household tasks.“So on the one hand you get these men who are just not expecting to have a stable romantic relationship for most of their lives and are setting their time use accordingly,” Dr. Binder said. “Then there are men who are participating in these family structures, but doing so in nontraditional ways.”Like labor force experts, government data suggest that a combination of forces are at play.A growing number of men do seem to be taking on more child care duties, time use and other survey data suggests. But a shift toward being stay-at-home dads is unlikely to be the full story: Employment trends look the same for men in the age group who report having young kids living with them and those who don’t.What clearly does matter is education. The employment decline is more heavily concentrated among people who have not graduated from college and who live in metropolitan areas or suburbs, based on detailed government survey data.An education gap among menMen without a four-year college degree have returned to work more slowly than others in the same age group.

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    Change in employment rate for people ages 35-44
    Note: Three-month rolling average of seasonally adjusted data.Source: Current Population Survey via IPUMSBy The New York TimesSome economists speculate that the disproportionate decline could be because the age group has been buffeted by repeated crises, making their labor market footing fragile. They lost work early in their careers in 2008, faced a slow recovery after and found their jobs at risk again amid 2020 layoffs and an ongoing shift toward automation.“This group has been hit by automation, by globalization,” said David Dorn, a Swiss economist who studies labor markets.That fragility theory makes sense to Mr. Rizzo.He had seen the Navy as his ticket out of poverty in Louisiana and had expected to have a career in the service until he broke his back during basic training. He retired from the military after a few years. Then he pivoted, earning a two-year degree in Georgia and beginning a bachelor’s degree at Arizona State University — with dreams of one day working to cure cancer.Then the Great Recession hit. Mr. Rizzo had been working nights in a laboratory to afford rent and tuition, but the job ended abruptly in 2009. Phoenix was ground zero for the financial implosion’s fallout.Frantic job applications yielded nothing, and Mr. Rizzo had to drop out of school. Worse, he found himself staring down imminent homelessness. His tax refund saved him by allowing him and his wife to move back to Louisiana, where jobs were more plentiful. But after they divorced, he hit a low point.“I had nothing to show for my life after my 20s,” he explained.Mr. Rizzo spent the next decade rebuilding. He worked his way through various corporate positions where he taught himself skills in Excel and Microsoft SharePoint, married again, had two sons and bought a house.Yet he was regularly at risk of losing work to downsizing or technology — including late last year. The company he worked for wanted him to move into a new role, perhaps as a traveling salesperson, when his desk job disappeared. But his sons have special needs and that was not an option.He quit in January. He watched the kids, posted on his investment-related YouTube channel and watched Netflix. He thought he might be able to live on military payments and dividend income, becoming part of the “Financial Independence, Retire Early,” or FIRE, trend. But then the Federal Reserve raised interest rates and markets gyrated.“I got FIRE, all right,” he said. “My whole portfolio got set on fire.”Mr. Rizzo, who began working for DoorDash in July, making a delivery in Kenner.Emily Kask for The New York TimesMr. Rizzo turned to DoorDash, earning his first paycheck on July 4. While he is technically back in the labor market, gig work like his isn’t well measured in jobs data. If many men are taking a similar path but do not work every week, they might be overlooked in surveys, which ask if someone worked for pay in the previous week to determine whether they were employed.Mr. Rizzo is waiting to see what happens to his DoorDash income in an economic pullback before he rules out corporate work forever. Already, other dashers are complaining that business is slowing as people have spent down pandemic savings.The veteran counts himself fortunate. He knows men in his generation who have struggled to find any footing in the labor market.“It feels like it’s the after-affects of 2008 and 2009,” he said. “Everyone had to restart their lives from scratch.” More

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    Chinese Unrest Over Lockdown Upends Global Economic Outlook

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    Growing protests in the world’s biggest manufacturing nation add a new element of uncertainty atop the Ukraine war, an energy crisis and inflation.The swelling protests against severe pandemic restrictions in China — the world’s second-largest economy — are injecting a new element of uncertainty and instability into the global economy when nations are already struggling to manage the fallout from a war in Ukraine, an energy crisis and painful inflation.For years, China has served as the world’s factory and a vital engine of global growth, and turmoil there cannot help but ripple elsewhere. Analysts warn that more unrest could further slow the production and distribution of integrated circuits, machine parts, household appliances and more. It may also encourage companies in the United States and Europe to disengage from China and more quickly diversify their supply chains.Millions of China’s citizens have chafed under a tight lockdown for months as the Communist Party seeks to overcome the spread of the Covid-19 virus, three years after its emergence. Anger turned to widespread protest after an apartment fire last week killed 10 people and comments on social media questioned whether the lockdown had prevented their escape.It is unclear whether the demonstrations flaring across the country will be quickly snuffed out or erupt into broader resistance to the iron rule of its top leader, Xi Jinping, but so far the most significant economic damage stems from the lockdown.“The biggest economic hit is coming from the zero-Covid policies,” said Carl Weinberg, chief economist at High Frequency Economics, a research firm. “I don’t see the protests themselves being a game changer.”“The world will still turn to China for what it makes best and cheapest,” he added.Police officers during a protest in Beijing on Sunday.Kevin Frayer/Getty ImagesAsked how the Biden administration assessed the economic fallout from the latest unrest, John Kirby, coordinator for strategic communications at the National Security Council, said Monday, “We don’t see any particular impact right now to the supply chain.”Concerns about the economic impact of the spreading unrest in China, nonetheless, appeared to be partly responsible for a decline in world markets. The S&P 500 index closed 1.5 percent lower, while the dollar, often a haven in turbulent times, moved higher. Oil prices began the day with a sharp drop before rebounding.The sheer magnitude of China’s economy and resources makes it a critical player in world commerce. “It’s extremely central to the global economy,” said Kerry Brown, an associate fellow in the Asia-Pacific program at Chatham House, an international affairs institute in London. That uncertainty “will have a massive impact on the rest on the world.”China now surpasses all countries as the biggest importer of petroleum. It manufactured nearly 30 percent of the world’s goods in 2021. “There is simply no alternative to what China offers in terms of scale and capacities,” Mr. Brown said.Delays and shortages related to the pandemic prompted many industries to re-evaluate the resilience of their supply chains and consider additional sources of raw materials and workers. Apple, which recently announced that it expected sales to decline because of stoppages at its Chinese plants, is one of several tech companies that have shifted a small portion of their production to other countries, like Vietnam or India.The tilt by some companies away from China predates the pandemic, reaching back to former President Donald J. Trump’s determination to start a trade war with China, a move that resulted in a spiral of punishing tariffs.Yet even if business and political leaders want to be less reliant on China, Mr. Brown said, “the brute reality is that’s not going to happen soon, if at all.”“We shouldn’t kid ourselves that we can quickly decouple,” he added.China’s size is a lure for American, European and other companies looking not only to make products quickly and cheaply, but also to sell them in great numbers. There is simply no other market as big.Tesla, John Deere and Volkswagen are among the companies that have bet on China for future growth, but they are likely to suffer some setbacks at least in the short run. Volkswagen announced last week that its sales in China had stagnated this year, running 14 percent below expectations.A Volkswagen stand at the Auto Shanghai trade show last year. Volkswagen is one of the companies counting on the Chinese market for sales growth.Alex Plavevski/EPA, via ShutterstockThe protests highlight the political risks associated with investing in China, but analysts say the recent wave doesn’t reveal anything that investors didn’t already know.“Many investors will be looking ahead and positioning their portfolios now for the reopening,” said Nigel Green, chief executive of deVere Group, a financial advisory firm. They will be “seeking to take advantage of the country’s transition from an export economy to a consumption one,” he added.Luxury brands continue to stake their future on growth in China.As interconnected as the global economy is, one way in which China’s slowdown may be helping other nations is by keeping down the price of energy. Over the last 20 years, the growth of the Chinese economy has been a primary driver of global demand for oil and hydrocarbons in general.Energy experts say rising numbers of Covid infections and growing doubts that China will ease restrictions in major cities are a major reason that oil prices have dropped over the last three weeks to levels last seen before the Russian invasion of Ukraine in late February.“Chinese demand is the largest single factor in world oil demand,” said David Goldwyn, a senior energy diplomat in the Obama administration. “China is the swing demander.”As the Chinese economy has softened in the grip of the Covid lockdown, fewer oil tankers have sailed into Chinese ports in recent weeks, forcing the major Middle Eastern and Russian oil producers to lower their prices. Now spreading protests create another uncertainty about future demand.Chinese oil demand is expected to average 15.1 million barrels a day this quarter, down from 15.8 million a year ago, according to Kpler, an analytics firm.Barriers at a security checkpoint in Guangzhou, a southern Chinese manufacturing hub, this month.Associated PressAs for supply chain disruptions, Neil Shearing, chief economist at Capital Economics, a research firm, said he thought excessive blame had been heaped on China. “Everything has been framed around supply shortages,” he said, but in China, industrial production increased during the pandemic. The problem was that global demand surged more.For now, the biggest economic impact will be within China, rather than on the global economy. Sectors that depend on face-to-face contact — retail, hospitality, entertainment — will take the biggest hit. Over the past three days, measures of people’s movements have drastically fallen, Mr. Shearing said.He added that more people were quarantined now than at the height of the Omicron epidemic last winter. The wave of infections and the government’s response to it — not the protests — are what’s having “the biggest impact on China’s economy,” he said.Clifford Krauss More