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    Email ‘Mistake’ on Inflation Data Prompts Questions on What Is Shared

    Traders are closely watching once-obscure economic data, prompting more scrutiny of how widely the government distributes the information.One afternoon in late February, an employee at the Bureau of Labor Statistics sent an email about an obscure detail in the way the government calculates inflation — and set off an unlikely firestorm.Economists on Wall Street had spent two weeks puzzling over an unexpected jump in housing costs in the Consumer Price Index. Several had contacted the Bureau of Labor Statistics, which produces the numbers, to inquire. Now, an economist inside the bureau thought he had solved the mystery.In an email addressed to “Super Users,” the economist explained a technical change in the calculation of the housing figures. Then, departing from the bureaucratic language typically used by statistical agencies, he added, “All of you searching for the source of the divergence have found it.”To the inflation obsessives who received the email — and other forecasters who quickly heard about it — the implication was clear: The pop in housing prices in January might have been not a fluke but rather a result of a shift in methodology that could keep inflation elevated longer than economists and Federal Reserve officials had expected. That could, in turn, make the Fed more cautious about cutting interest rates.“I nearly fell off my chair when I saw that,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics, a forecasting firm.Huge swaths of Wall Street trade securities are tied to inflation or rates. But the universe of people receiving the email was tiny — about 50 people, the Bureau of Labor Statistics later said.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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    The jobs report comes as the Fed considers the timing of interest rate cuts.

    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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    Brighter Economic Mood Isn’t Translating Into Support for Biden

    Voters feel slightly better about the economy as inflation recedes, but partisan divides remain deep, a Times/Siena poll found.Eight months before the election, Americans feel slightly better about the state of the economy as inflation recedes and the labor market remains stable, but President Biden doesn’t appear to be benefiting.Among registered voters nationwide, 26 percent believe the economy is good or excellent, according to polling in late February by The New York Times and Siena College. That share is up six percentage points since July. The movement occurred disproportionately among older Democrats, a constituency already likely to vote for Mr. Biden.And the share of voters saying they approve of the job Mr. Biden is doing in office has actually fallen, to 36 percent in the latest poll, from 39 percent in July.Inflation has pervaded economic sentiment since mid-2022, confronting voters daily with the price of everything from eggs to car insurance. Even as inflation has been falling since mid-2023 — and wage growth has lately outpaced the rate of price increases, at least on average — many Americans don’t yet see the problem as solved. Nearly two-thirds of registered voters in the Times/Siena poll rated the price of food and consumer goods as poor.Mr. Biden’s team has pointed to an array of indications that the economy has rebounded remarkably well since he assumed office, including an unemployment rate that has been under 4 percent for two years and a stock market that has set record after record.But in a persistent trend that has confounded pollsters and economists, those fundamentals largely haven’t been reflected in surveys. Forty percent of those surveyed said the economy was worse than it was a year earlier, compared with 23 percent who thought it was better — even though a narrow majority rated their personal financial situation as good or excellent.

    Source: New York Times/Siena College poll of 980 registered voters conducted Feb. 25 to 28, 2024By Christine Zhang

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    How would you rate each of the following aspects of the economy today?
    Source: New York Times/Siena College poll of 980 registered voters conducted Feb. 25 to 28, 2024By Christine ZhangWe 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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    Reduflación: qué pasa cuando los comestibles pesan menos y cuestan igual

    Los compradores de comestibles están notando algo raro. Bolsas de papas fritas llenas de aire. Latas de sopa que se han encogido. Paquetes de detergente más pequeños.Las empresas están reduciendo el tamaño de sus productos sin reducir los precios, y los comentarios de los consumidores, desde Reddit a TikTok, pasando por la sección de comentarios de The New York Times, rebosan indignación por esta tendencia, conocida como reduflación (shrinkflation en inglés).La práctica no es nueva. Los vendedores llevan siglos reduciendo discretamente los productos para evitar subir los precios, y los expertos creen que ha sido una obvia estrategia corporativa al menos desde 1988, cuando la marca Chock Full o’Nuts redujo su bote de café de 455 gramos a 368 gramos y sus competidores siguieron el ejemplo.Pero la indignación hoy es más pronunciada. El presidente Joe Biden se hizo eco del enojo en un video reciente. (“Lo que más rabia me da es que los envases de helado han disminuido de tamaño, pero no de precio”, lamentó). Las propias empresas explotan esta práctica con trucos publicitarios. Una cadena canadiense presentó una pizza growflation . (“En términos de pizza”, bromeaba el comunicado de prensa de la empresa, “una tajada más grande”).Pero, ¿cómo funciona la reduflación desde el punto de vista económico? ¿Sucede con más frecuencia en Estados Unidos y, si es así, significa que los datos oficiales no reflejan el verdadero alcance de la inflación? A continuación te explicamos la tendencia y lo que significa para tu bolsillo.La reduflación fue galopante en 2016Puede resultar difícil de creer, pero la reduflación parece estar ocurriendo con menos frecuencia hoy que hace unos años.Los mayores efectos de la reduflaciónCuando los productos encogen, aumentan la inflación. Estos bienes experimentaron el mayor aumento de precios por la reduflación.

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    Variación de precios de enero de 2019 a octubre de 2023
    Fuente: Oficina de Estadísticas Laborales de EE. UU.Por 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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    Shrinkflation 101: The Economics of Smaller Groceries

    Grocery store shoppers are noticing something amiss. Air-filled bags of chips. Shrunken soup cans. Diminished detergent packages.Companies are downsizing products without downsizing prices, and consumer posts from Reddit to TikTok to the New York Times comments section drip with indignation at the trend, widely known as “shrinkflation.”The practice isn’t new. Sellers have been quietly shrinking products to avoid raising prices for centuries, and experts think it has been an obvious corporate strategy since at least 1988, when Chock Full o’Nuts cut its one-pound coffee canister to 13 ounces and its competitors followed suit.But outrage today is acute. President Biden tapped into the angst in a recent video. (“What makes me the most angry is that ice cream cartons have actually shrunk in size, but not in price,” he lamented.) Companies themselves are blasting the practice in marketing gimmicks. One Canadian chain unveiled a growflation pizza. (“In pizza terms,” the company’s news release quipped, “a larger slice of the pie.”)But how does shrinkflation work, economically? Is it happening more often in the United States, and if so, does that mean official data are failing to capture the true extent of inflation? Below is an explainer of the trend — and what it means for your wallet.Shrinkflation was rampant in 2016.It might be hard to believe, but shrinkflation appears to be happening less often today than it was a few years ago.The Biggest Shrinkflation EffectsWhen products shrink, it adds to inflation. These goods saw the biggest bump to their price increases from “shrinkflation.”

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    Change in price from January 2019 to October 2023
    Source: 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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    Auto Insurance Spike Hampers the Inflation Fight

    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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    An Emboldened F.T.C. Bolsters Biden’s Efforts to Address Inflation

    With few unilateral options and little hope of legislation from Congress, the president’s early investment in competition policy could pay a political dividend.An independent federal agency has become one of the most reliable executors of President Biden’s attempts to fight inflation, at a time when the White House has few weapons of its own to quickly bring down stubbornly high prices of consumer staples like groceries.The Federal Trade Commission filed a lawsuit on Monday, joined by several state attorneys general, to challenge a merger between the supermarket giants Kroger and Albertsons. The agency’s rationale in many ways echoed Mr. Biden’s renewed attempts to blame corporate greed for rising prices and shrinking portions in grocery aisles.“If allowed, this merger would substantially lessen competition, likely resulting in Americans paying millions of dollars more for food and other essential household goods,” agency officials wrote in a legal complaint. Because grocery prices have risen significantly in recent years, they added, “the stakes for Americans are exceptionally high.”That is true for consumers, and it is true for the president. More Americans disapprove of his handling of the economy than approve of it. Consumer confidence, while improved in recent months, remains relatively weak for an economy with low unemployment and solid growth like the one Mr. Biden is presiding over.An internal analysis by White House economists suggests that no single factor is weighing more on consumer sentiment than grocery prices. Those costs soared in 2022 and have not fallen, though their rate of increase has slowed.White House officials concede that there is little more Mr. Biden can do unilaterally to reduce grocery prices and even less chance of legislative help from Congress. That is why Mr. Biden has resorted to the bully pulpit, calling on stores to reduce prices and chastising snack makers for engaging in “shrinkflation” — reducing portions while raising or maintaining prices.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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    Housing Costs Are Running Hot, but Is the Data Missing a Cooling Trend?

    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