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    The jobs report comes as the Fed considers the timing of interest rate cuts.

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    The Federal Reserve is considering when and how much to cut interest rates, and the employment report on Friday will give policymakers an up-to-date hint at how the economy is evolving ahead of their next policy meeting.Fed officials meet on March 19-20, and they are widely expected to leave interest rates unchanged at that gathering. But investors think that they could begin to lower interest rates as early as June, a view that Jerome H. Powell, the Fed chair, did little to either strongly confirm or upend during his congressional testimony this week.“We’re waiting to become more confident that inflation is moving sustainably to 2 percent,” Mr. Powell told lawmakers on Thursday. “When we do get that confidence, and we’re not far from it, it will be appropriate to dial back the level of restriction.”The Fed is primarily watching progress on inflation as it contemplates its next steps, but it is also keeping an eye on the labor market. If job growth is strong and the labor market is so robust that wages rise quickly, that could keep price increases higher for longer as companies try to cover their costs. On the other hand, if the job market begins to slow sharply, that could nudge Fed officials toward earlier interest rate cuts.For now, unemployment has remained low and wage growth has been solid — but not as strong as the peaks it reached in 2022. That has given Fed officials comfort that the supply of workers and the demand for new employees is coming back into balance, even without a painful economic slowdown.“Although the jobs-to-workers gap has narrowed, labor demand still exceeds the supply of available workers,” Mr. Powell said this week.If the recent progress in restoring balance continues, it could allow the Fed to pull off what is often called a “soft landing”: a situation in which the economy cools and inflation moderates so the Fed can back away from aggressive interest rate policy without a recession. More

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    Auto Insurance Spike Hampers the Inflation Fight

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    Costlier vehicles and repairs are pushing premiums higher even as the increase in U.S. consumer prices is tapering overall.Job growth, wage growth and business growth are all lively, and inflation has steeply fallen from its 2022 highs. But consumer sentiment, while improving, is still sour.One reason may be sticker shock from some highly visible prices — even as overall inflation has calmed. The cost of car insurance is a key example.Motor vehicle insurance rose 1.4 percent on a monthly basis in January alone and has risen 20.6 percent over the past year, the largest jump since 1976. It has been a huge hit for those driving the roughly 272 million private and commercial vehicles registered in the country. And it has played a part in dampening the “mission accomplished” mood on inflation that was bubbling up in markets at the beginning of the year.According to a recent private-sector estimate, the average annual premium for full-coverage car insurance in 2024 is $2,543, compared with $2,014 in 2023 and $1,771 in 2022.That spike has a variety of causes, but the central one is straightforward: Cars and trucks are pricier now, so insurance for them is, too.The annual change in the cost of car insurance

    Note: Data is the year-over-year percentage change in motor vehicle insurance per the U.S. city average, not seasonally adjusted.Source: U.S. Bureau of Labor StatisticsBy The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Housing Costs Are Running Hot, but Is the Data Missing a Cooling Trend?

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    Pandemic disruptions may have muddled the measurement of home prices in inflation data. That could complicate the Fed’s course on interest rates.The Federal Reserve may have a housing problem. At the very least, it has a housing riddle.Overall inflation has eased substantially over the past year. But housing has proved a tenacious — and surprising — exception. The cost of shelter was up 6 percent in January from a year earlier, and rose faster on a monthly basis than in December, according to the Labor Department. That acceleration was a big reason for the pickup in overall consumer prices last month.Listen to This ArticleOpen this article in the New York Times Audio app on iOS.The persistence of housing inflation poses a problem for Fed officials as they consider when to roll back interest rates. Housing is by far the biggest monthly expense for most families, which means it weighs heavily on inflation calculations. Unless housing costs cool, it will be hard for inflation as a whole to return sustainably to the central bank’s target of 2 percent.“If you want to know where inflation is going, you need to know where housing inflation is going,” said Mark Franceski, managing director at Zelman & Associates, a housing research firm. Housing inflation, he added, “is not slowing at the rate that we expected or anyone expected.”Those expectations were based on private-sector data from real estate websites like Zillow and Apartment List and other private companies showing that rents have barely been rising recently and have been falling outright in some markets.For home buyers, the combination of rising prices and high interest rates has made housing increasingly unaffordable. Many existing homeowners, on the other hand, have been partly insulated from rising prices because they have fixed-rate mortgages with payments that don’t change from month to month.The Housing ConundrumHousing costs, as measured in the Consumer Price Index, are still rising faster than before the pandemic, even as overall inflation has eased.

    Source: Labor DepartmentBy The New York TimesA Wider GapAfter surging in 2021 and 2022, rent growth has moderated. But the slowdown has been more gradual for single-family homes than for apartments.

    Notes: Data is shown as a 12-month change in a three-month moving average. “Houses” include both attached and detached single-family homes.Source: ZillowBy The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Fed Minutes Show Embrace of Inflation Progress but No Hurry to Cut Rates

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    Minutes from the Federal Reserve’s Jan. 30-31 meeting showed policymakers thought that risks of an inflation pickup had “diminished.”Federal Reserve officials welcomed a recent inflation slowdown at their last meeting in late January but were intent on proceeding carefully as they tiptoe toward rate cuts, according to minutes from that gathering, which were released on Wednesday.Central bankers raised interest rates sharply from March 2022 to July 2023, pushing them to 5.3 percent from a starting point near zero. Those moves were meant to cool consumer and business demand, which officials hoped would weigh down rapid inflation.Now, inflation is slowing meaningfully. Consumer prices climbed 3.1 percent in the year through January, down sharply from their recent peak of 9.1 percent. But that is still faster than the pace that was normal before the pandemic, and it is above the central bank’s goal: The Fed aims for 2 percent inflation over time using a different but related metric, the Personal Consumption Expenditures index.The economy has continued to grow at a solid clip even as price growth has moderated. Hiring has remained stronger than expected, wage growth is chugging along and retail sales data have suggested that consumers are still willing to spend.That combination leaves Fed officials contemplating when — and how much — to lower interest rates. While central bankers have been clear that they do not think they need to raise borrowing costs further at a time when inflation is moderating, they have also suggested that they are in no hurry to cut rates.“There had been significant progress recently on inflation returning to the committee’s longer-run goal,” Fed officials reiterated in their freshly released minutes. Officials thought that cooler rent prices, improving labor supply and productivity gains could all help inflation to moderate further this year. Policymakers also suggested that “upside risks to inflation” had “diminished” — suggesting that they are becoming more confident that inflation is coming down sustainably.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    U.S. Economy: Has an Era of Increased Productivity Returned?

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    Thirty years ago, the U.S. entered an era of productivity gains that enabled healthy growth. Experts are asking if it could happen again.The last time the American economy was posting surprising economic growth numbers amid rapid wage gains and moderating inflation, Ace of Base and All-4-One topped the Billboard charts and denim overalls were in vogue.Thirty years ago, officials at the Federal Reserve were hotly debating whether the economy could continue to chug along so vigorously without spurring a pickup in inflation. And back in 1994, it turned out that it could, thanks to one key ingredient: productivity.Now, official productivity data are showing a big pickup for the first time in years. The data have been volatile since the start of the pandemic, but with the dawn of new technologies like artificial intelligence and the embrace of hybrid work setups, some economists are asking whether the recent gains might be real — and whether they can turn into a lasting boom.If the answer is yes, it would have huge implications for the U.S. economy. Improved productivity would mean that firms could create more product per worker. And a steady pickup in productivity could allow the economy to take off in a healthy way. More productive companies are able to pay better wages without having to raise prices or sacrifice profits.Several of the trends in place today have parallels with what was happening in 1994 — but the differences explain why many economists are not ready to declare a turning point just yet.The Computer Age vs. the Zoom AgeBy the end of the 1980s, computers had been around for decades but had not yet generated big gains to productivity — what has come to be known as the productivity paradox. The economist Robert Solow famously said in 1987, “You can see the computer age everywhere but in the productivity statistics.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    ‘Zombie Offices’ Spell Trouble for Some Banks

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    Bank tremors serve as a reminder: Just because a crisis hasn’t hit immediately doesn’t mean commercial real estate pain isn’t coming.Graceful Art Deco buildings towering above Chicago’s key business district report occupancy rates as low as 17 percent.A set of gleaming office towers in Denver that were full of tenants and worth $176 million in 2013 now sit largely empty and were last appraised at just $82 million, according to data provided by Trepp, a research firm that tracks real estate loans. Even famous Los Angeles buildings are fetching roughly half their prepandemic prices.From San Francisco to Washington, D.C., the story is the same. Office buildings remain stuck in a slow-burning crisis. Employees sent to work from home at the start of the pandemic have not fully returned, a situation that, combined with high interest rates, is wiping out value in a major class of commercial real estate. Prices on even higher-quality office properties have tumbled 35 percent from their early-2022 peak, based on data from Green Street, a real estate analytics firm.Those forces have put the banks that hold a big chunk of America’s commercial real estate debt in the hot seat — and analysts and even regulators have said the reckoning has yet to fully take hold. The question is not whether big losses are coming. It is whether they will prove to be a slow bleed or a panic-inducing wave.The past week brought a taste of the brewing problems when New York Community Bank’s stock plunged after the lender disclosed unexpected losses on real estate loans tied to both office and apartment buildings.So far “the headlines have moved faster than the actual stress,” said Lonnie Hendry, chief product officer at Trepp. “Banks are sitting on a bunch of unrealized losses. If that slow leak gets exposed, it could get released very quickly.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Fed Chair Powell Says Officials Need More ‘Good’ Data Before Cutting Rates

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    Federal Reserve officials are debating when to lower rates. An interview with Jerome H. Powell confirms a move is coming, but not immediately.Jerome H. Powell, the chair of the Federal Reserve, made clear during a “60 Minutes” interview aired on Sunday night that the central bank is moving toward cutting interest rates as inflation recedes, but that policymakers need to see continued progress toward cooler price increases to make the first move.Mr. Powell was interviewed on Thursday, after the Fed’s meeting last week but before Friday’s blockbuster jobs report. He reiterated his message that lower borrowing costs are coming. But he also said that the Fed’s next meeting in March is probably too early for policymakers to feel sure enough that inflation is coming under control to reduce rates.“We think we can be careful in approaching this decision just because of the strength that we’re seeing in the economy,” Mr. Powell said during the interview, based on a transcript released ahead of its airing. He added that officials would want to see a continued moderation in price increases, even after several months of milder readings.The progress on inflation “doesn’t need to be better than what we’ve seen, or even as good. It just needs to be good,” Mr. Powell said.His remarks reaffirm that lower borrowing costs are likely coming this year — a change that could make mortgages, car loans and credit card debt cheaper for Americans. They also underscore how much better today’s economic situation is proving to be than what economists and Fed officials expected just a year ago.Many forecasters had predicted that the Fed’s rapid campaign of interest rate increases, which pushed borrowing costs from near zero to a range of 5.25 to 5.5 percent from March 2022 to July 2023, would slow the economy so much that it might even spur a recession. Central bankers themselves — including Mr. Powell — believed that some economic pain would probably be needed to cool consumer and business demand enough to prod businesses to stop raising prices so quickly.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Job Market Starts 2024 With a Bang

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    U.S. employers added 353,000 jobs in January, far exceeding forecasts, and revised figures showed last year was even stronger than previously reported.The United States produced an unexpectedly sizable batch of jobs last month, a boon for American workers that shows the labor market retains remarkable strength after three years of expansion.Employers added 353,000 jobs in January on a seasonally adjusted basis, the Labor Department reported on Friday, and the unemployment rate remained at 3.7 percent.The report also put an even shinier gloss on job growth for 2023, including revisions that added more than 100,000 to the figure previously tallied for December. All told, employers added 3.1 million jobs last year, more than the 2.7 million initially reported.After the loss of 14 percent of the nation’s jobs early in the Covid-19 pandemic, the labor market’s endurance despite aggressive interest rate increases has caught economists off guard.“I think everyone is surprised at the strength,” said Sara Rutledge, an independent economics consultant. “It’s almost like a ‘pinch me’ scenario.”Ms. Rutledge helped tabulate the National Association for Business Economics’ latest member survey, which found rising optimism that the country would avoid a recession — matching a turnaround in measures of consumer sentiment as inflation has eased.Unemployment has been under 4 percent for 24 monthsUnemployment rate More