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    Why This Jobs Report Could Be the Most Pivotal One in Years

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    It’s tough to overstate how much hinges on Friday’s employment update, from the path for interest rates to the economic outlook.A fresh jobs report set for release on Friday could mark a turning point for the American economy, making it one of the most important and closely watched pieces of data in years.The employment numbers will shed crucial light on whether a recent jump in the unemployment rate, which tracks the share of people who are looking for work but have not yet found it, was a blip or the start of a problematic trend.The jobless rate rose notably in July after a year of creeping higher. If that continued in August, economists are likely to increasingly worry that the United States may be in — or nearing — the early stages of a recession. But if the rate stabilized or ticked down, as economists forecast, July’s weak numbers are likely to be viewed as a false alarm.The answer is coming at a pivotal moment, as the Federal Reserve moves toward its first rate cut since the 2020 pandemic.Central bankers have been clear that they will lower interest rates at their meeting on Sept. 17-18. Whether that cut is a normal quarter-point reduction or a larger half-point move could hinge on how well the job market is holding up. It is rare for so much to ride on a single data point.“It matters a lot,” said Julia Coronado, founder of MacroPolicy Perspectives, a research firm. “It’s going to set the tone for the Fed, and that’s going to set the tone for global monetary policy and markets.”Unemployment and UnderemploymentThe jobless rate historically jumps during recessions.

    Unemployment is the share of people actively looking for work; underemployment also includes people who are no longer actively looking and those who work part time but would prefer full-time jobs.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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    The Fed’s Preferred Inflation Gauge Stays Cool, Keeping a Rate Cut Imminent

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    Inflation remained cool in July, based on the Personal Consumption Expenditures index, keeping the Federal Reserve on track for rate cuts.Inflation held steady in July on a yearly basis and consumer spending was robust, fresh data released on Friday showed, the latest sign that progress toward cooler price increases remains firmly intact even as the economy holds up.The release of the Federal Reserve’s favorite inflation number, the Personal Consumption Expenditures index, showed that yearly inflation was 2.5 percent. That was in line with both the previous month and with economist forecasts.After stripping out food and fuel prices, both of which jump around, a “core” index was up 2.6 percent from a year earlier. That figure gives economists a clearer grasp on the underlying trend in inflation.This month, Fed officials and Wall Street analysts are likely to look closely at the monthly inflation numbers. Because inflation climbed slowly last summer, the annual numbers are being measured against cool readings from last year. When comparing July’s prices to June’s, inflation climbed slightly: 0.2 percent in both the headline and the core measures.The likely takeaway for Fed officials is that inflation continues to gradually moderate — keeping them on track to begin lowering interest rates next month. While the yearly number remains above the Fed’s 2 percent goal, it is down substantially from a peak of more than 7 percent in 2022.This is the last P.C.E. report the Fed will receive before its Sept. 17-18 policy meeting, although officials will get a Consumer Price Index report on Sept. 11. That inflation measure comes out earlier in the month than the personal consumption measure and feeds into the P.C.E. report.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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    Harris and Trump Have Differing Plans to Solve Housing Crisis

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    The two presidential nominees are talking about their approaches for solving America’s affordability crisis. But would their plans work?America’s gaping shortage of affordable housing has rocketed to the top of voter worry lists and to the forefront of campaign promises, as both the Democratic nominee, Kamala Harris, and the Republican candidate, Donald J. Trump, promise to fix the problem if they are elected.Their two visions of how to solve America’s affordable housing shortage have little in common, and Ms. Harris’s plan is far more detailed. But they do share one quality: Both have drawn skepticism from outside economists.Ms. Harris is promising a cocktail of tax cuts meant to spur home construction — which several economists said could help create supply. But she is also floating a $25,000 benefit to help first-time buyers break into the market, which many economists worry could boost demand too much, pushing home prices even higher. And both sets of policies would need to pass in Congress, which would influence their design and feasibility.Mr. Trump’s plan is garnering even more doubt. He pledges to deport undocumented immigrants, which could cut back temporarily on housing demand but would also most likely cut into the construction work force and eventually limit new housing supply. His other ideas include lowering interest rates, something that he has no direct control over and that is poised to happen anyway.Economist misgivings about the housing market policy plans underline a somber reality. Few quick fixes are available for an affordable housing shortfall that has been more than 15 years in the making, one that is being worsened by demographic and societal trends. While ambitious promises may sound good in debates and television ads, actual policy attempts to fix the national housing shortfall are likely to prove messy and slow — even if they are sorely needed.Here’s what the candidates are proposing, and what experts say about those plans.Harris: Expand Supply Using Tax Credits.Ms. Harris is promising to increase housing supply by expanding the Low-Income Housing Tax Credit, providing incentives for state and local investment in housing and creating a $40 billion tax credit to make affordable projects economically feasible for builders.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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    Why Interest Rate Cuts Won’t Fix a Global Housing Affordability Crisis

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    Central bankers are lowering borrowing costs, but that won’t be a cure-all for a widespread lack of affordable housing.To Moira Gallagher, 38, buying a house in Anchorage would be a step toward financial stability for her growing family. But even with a six-figure household income and stable jobs, she and her husband have struggled to make a purchase.High mortgage rates, limited housing supply and historically poor affordability have kept buying a home stubbornly out of reach for Ms. Gallagher, an economic researcher who is expecting her third child. Three- or four-bedroom homes in good school districts are both hard to come by and prohibitively expensive.“It makes it hard to feel secure,” she said. “It affects everything.”From Anchorage to Amsterdam, many developed and even emerging economies are confronting a similar problem: Housing supply is failing to meet demand, helping to push home prices to levels that are out of reach even for middle-income families.Affordability problems have been exacerbated by high central bank interest rates, which officials across the globe have been using to tackle rapid inflation. Those policy rates trickle through financial markets to elevate mortgage rates — making it even more expensive for borrowers to buy a home and for builders to finance construction for new houses and apartments.The second part of that equation is now poised to change. Central banks in many economies are lowering interest rates or preparing to do so imminently. The European Central Bank and Bank of England are already cutting borrowing costs, and the chair of the U.S. Federal Reserve signaled last week that it would start reductions in September.But those rate cuts are unlikely to be a panacea for housing affordability.While the shift in central bank stance is already translating into somewhat lower mortgage rates in many countries, borrowing costs are not expected to fall back to the levels that prevailed during the 2010s. Several economists said 30-year mortgage rates in the United States, for instance, could end up in the 5.5 to 6 percent range, down from their 7.5 percent peak last year but still up notably from the 4 percent that was normal before the pandemic.Home Prices Jump in Developed WorldHow inflation-adjusted home prices are shaping up across advanced economies.

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    O.E.C.D. house price indexes, 2015=100
    Data reflects first quarter of each year.Source: Organisation for Economic Co-operation and DevelopmentBy The New York TimesWhat Share of Income Does a Typical Home Cost? Across metro areas in the United States, the cost of owning a typical home has been rising as a share of the local median income.

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    Share of income that would go to owning standard home
    Source: The Atlanta Fed’s Home Ownership Affordability MonitorBy 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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    Stocks Rise as Fed Chair Powell Signals Rate Cuts in Jackson Hole Speech

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    Jerome H. Powell made it clear that the Federal Reserve will cut rates on Sept. 18, as the central bank turns the corner in its fight against inflation.Speaking in his most closely watched speech of the year, Jerome H. Powell, the chair of the Federal Reserve, clearly signaled on Friday that the central bank was poised to cut interest rates in September.And while Mr. Powell stopped short of giving a clear hint at just how large that move might be, he forcefully underscored that the central bank stands prepared to adjust policy to protect the job market from weakening further and to keep the economy on a path for a soft landing.“The time has come for policy to adjust,” Mr. Powell said during the Kansas City Fed’s annual conference at Jackson Hole in Wyoming. “The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook and the balance of risks.”He then added: “We will do everything we can to support a strong labor market as we make further progress toward price stability.”Mr. Powell’s speech was his firmest declaration yet that the Fed is turning a corner in its fight against inflation. After more than a year of holding interest rates at 5.3 percent, the highest level in more than two decades, officials finally have enough confidence to change their stance by cutting rates at their Sept. 17-18 meeting.Policymakers have been using those high rates to try to cool the economy and, by doing so, wrestle down rapid inflation. But as price increases slow substantially and the job market shows signs of wobbling, officials no longer need to hit the brakes quite so hard.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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    Why the Fed’s Jackson Hole Confab Matters for Wall St. and the Economy

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    The Federal Reserve Bank of Kansas City’s annual conference in Wyoming gets a lot of buzz. Here’s why it matters for Wall Street and the economy.Anyone who has flipped through newspapers or business television channels this week might have noticed two words on repeat: Jackson Hole.They refer to the premier central banking conference of the year, which is held late each August at the Jackson Lake Lodge in Grand Teton National Park in Wyoming. This year’s conference kicks off Thursday and runs through Saturday.To the uninitiated, it might seem weird that what is arguably the most important economic event in the world is held in remote Wyoming, two time zones away from the Federal Reserve’s Washington-based Board of Governors and 1,047 miles from its host, the Kansas City Fed. And the symposium itself is hardly your average conference. Loafers cede to cowboy boots. Attendees snack on huckleberry pastries (or swill huckleberry drinks) while discussing the latest economic papers.But if Jackson Hole is a little bit incongruous, it is also unquestionably important, an invite-only gathering where paradigm-shaping research is presented and momentous policy shifts are announced. The event has long been an obsession on Wall Street.This year will be no exception. Jerome H. Powell, the Fed chair, is scheduled to speak Friday morning, and markets are waiting anxiously to parse his remarks for even the slightest hint about how much the Fed might cut interest rates at its meeting next month — and how quickly central bankers will reduce borrowing costs after that.Wondering how a monetary policy conference held at the tail end of August became such a big deal and why it has stayed that way? Curious whether this year’s Jackson Hole conference will matter for mortgage rates or job prospects?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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    30-Year Mortgage Rate Dips to 6.46%; Home Sales Rise

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    Home buyers this week saw the lowest average rate since early 2023, and existing-home sales rebounded in July. Analysts predict more relief ahead.Mortgage rates dipped this week to a recent low, with analysts predicting a sharper drop in the coming months that could motivate potential home buyers.The average rate on 30-year mortgages, the most popular home loan in the United States, fell slightly to 6.46 percent this week, Freddie Mac reported on Thursday. That was only a slight decline from the 6.49 percent average a week earlier, but was the lowest level since May 2023. Mortgage rates, which stood at around 3 percent in late 2021, began climbing when the Federal Reserve started raising its benchmark rate to combat inflation, reaching levels not seen in two decades. The 30-year rate has been steadily easing since April, when it rose above 7 percent.Sam Khater, chief economist at Freddie Mac, said mortgage rates hovering below 6.5 percent over the past two weeks had not been enough to prompt a significant uptick in home purchases.“We expect rates likely will need to decline another percentage point to generate buyer demand,” Mr. Khater said in a statement.More significant relief could be on the horizon. The Fed is expected to start lowering interest rates in September, after holding them at 5.3 percent for the past year. Although the Fed’s benchmark rate and mortgage rates aren’t directly connected, a Fed rate cut could indirectly put even more downward pressure on mortgages.And while borrowing costs remain twice as high as three years ago, there is some evidence that home buyers are starting to respond to the small but steady decline. Existing-home sales rose above expectations in July after four consecutive monthly declines, according to data released on Thursday by the National Association of Realtors. The 1.3 percent increase lifted sales to a seasonally adjusted annual rate of 3.95 million units.Consumers are “definitely seeing more choices” as affordability improves, Lawrence Yun, the association’s chief economist, said in a statement. But existing home sales are still down 2.5 percent from the prior year.“Despite the modest gain, home sales are still sluggish,” Mr. Yun said.Potential home sellers also continue to feel locked into lower rates on their existing loans, keeping their houses off the market. The median existing-home owner has a rate below 4 percent, said Chen Zhao, who leads the housing economics team at the real estate services company Redfin.More homeowners are starting to list their properties for sale to keep up with demand, Skylar Olsen, chief economist at Zillow, said in a statement. But the number of homes available at any given time is still lower than before the pandemic, she said. More