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    in Economy

    Fed Minutes Show a Cut ‘Likely’ to Come in September

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    Even before a disappointing July jobs report, Federal Reserve officials thought they would probably cut rates at their Sept. 17-18 meeting.Federal Reserve officials held off on cutting interest rates at their July meeting, but minutes from that gathering showed that they were clearly poised to lower them at their meeting in September, just weeks before the presidential election.“The vast majority” of officials thought that “if the data continued to come in about as expected, it would likely be appropriate to ease policy at the next meeting,” according to notes from the meeting released on Wednesday.Days after the Fed’s July gathering, a disappointing employment report showed that employers hired more slowly than expected. And in the weeks since, fresh data have showed that inflation continues to cool.That leaves the Fed primed to cut rates at their next meeting on Sept. 17-18, though just how much they will lower borrowing costs is still an open question. Investors think that a quarter-point reduction is most likely, but they see a half-point cut as a possibility.While the Fed is independent of politics, that move is likely to draw attention to the central bank. A reduction would come just weeks before November’s presidential election, and at a time when the Fed’s policies — especially its effort to fight inflation and its effect on the housing market through mortgage costs — have become a common topic of conversation on the campaign trail.The Fed has held interest rates steady at 5.3 percent, the highest level in more than two decades, since July 2023. At that level, interest rates are hefty enough to discourage many families and businesses from borrowing money, which weighs on demand and helps to cool the economy, making it harder for companies to lift 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

  • 63 Shares179 Views

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    Judge Blocks F.T.C.’s Noncompete Rule

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    The Federal Trade Commission was deemed to lack the authority to bar companies from restricting their employees’ ability to go to work for rivals.A federal judge on Tuesday upheld a challenge to the Federal Trade Commission’s ban on noncompete agreements, blocking it from taking effect in September as scheduled.Judge Ada Brown of U.S. District Court for the Northern District of Texas ruled that the antitrust agency lacked authority to issue substantive rules related to unfair methods of competition, including the noncompete rule, which would have prohibited companies from restricting their employees’ ability to work for rivals.The push to adopt the rule is part of the Biden administration’s effort to crack down on practices that regulators argue are anticompetitive, unfairly constraining workers.Judge Brown had temporarily blocked the ban in July. Her decision on Tuesday renders that injunction permanent, and nationwide in scope.Banning noncompete agreements would increase workers’ earnings by at least $400 billion over the next decade, the F.T.C. has estimated. The agreements affect roughly one in five American workers, or around 30 million people, according to the agency, whose purview includes antitrust and consumer protection issues.Victoria Graham, an F.T.C. spokeswoman, said the agency was disappointed by Judge Brown’s decision and would “keep fighting to stop noncompetes that restrict the economic liberty of hardworking Americans, hamper economic growth, limit innovation and depress wages.”“We are seriously considering a potential appeal, and today’s decision does not prevent the F.T.C. from addressing noncompetes through case-by-case enforcement actions,” Ms. Graham added.A tax firm, Ryan, sued to block the rule just hours after the F.T.C. voted 3 to 2 in April to adopt it. The U.S. Chamber of Commerce later joined the case as a plaintiff, as did the Business Roundtable and two Texas business groups.The Chamber of Commerce and other groups have asserted that the F.T.C. lacks constitutional and statutory authority to adopt the rule, with Ryan calling it “arbitrary, capricious and otherwise unlawful” — a position with which Judge Brown agreed. Business groups have also argued that the ban would limit their ability to protect trade secrets and confidential information.In response to Judge Brown’s ruling, G. Brint Ryan, chief executive of Ryan, called the rule “continuing overreach and overregulation” by the federal government, adding that the firm was “happy we were able to successfully stop the overreach in this instance.”But the three Democrats on the five-member F.T.C. maintain that it can legally issue rules defining unfair methods of competition under the Federal Trade Commission Act of 1914, the law that created the agency.In a separate case, a federal judge in Pennsylvania declined last month to block the rule. Diverging rulings on the fate of the ban could leave the door open to review by higher courts.“Many businesses will welcome the reprieve, but the uncertainty continues as the fight now moves to the appellate courts,” said Kevin Goldstein, an antitrust partner at Winston & Strawn. More

  • 125 Shares189 Views

    in Economy

    Americans Growing Worried About Losing Their Jobs, Labor Survey Shows

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    The New York Fed’s labor market survey showed cracks just as Jerome H. Powell, the Fed chair, prepares for a closely watched Friday speech.Americans are increasingly worried about losing their jobs, a new survey from the Federal Reserve Bank of New York released on Monday showed, a worrying sign at a moment when economists and central bankers are warily monitoring for cracks in the job market.The New York Fed’s July survey of labor market expectations showed that the expected likelihood of becoming unemployed rose to 4.4 percent on average, up from 3.9 percent a year earlier and the highest in data going back to 2014.In fact, the new data showed signs of the labor market cracking across a range of metrics. People reported leaving or losing jobs, marked down their salary expectations and increasingly thought that they would need to work past traditional retirement ages. The share of workers who reported searching for a job in the past four weeks jumped to 28.4 percent — the highest level since the data started — up from 19.4 percent in July 2023.The survey, which quizzes a nationally representative sample of people on their recent economic experience, suggested that meaningful fissures may be forming in the labor market. While it is just one report, it comes at a tense moment, as economists and central bankers watch nervously for signs that the job market is taking a turn for the worse.The unemployment rate has moved up notably over the past year, climbing to 4.3 percent in July. That has put many economy watchers on edge. The jobless rate rarely moves up as sharply as it has recently outside of an economic recession.But the slowdown in the labor market has not been widely backed up by other data. Jobless claims have moved up but remain relatively low. Consumer spending remains robust, with both overall retail sales data and company earnings reports suggesting that shoppers continue to open their wallets.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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    Los Angeles 2028 Olympic Games Planners See Economic Upside

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    The 2028 Games will be the third for Los Angeles as host, but it will be a challenge to repeat the success of 1984.What Paris Olympics? Los Angeles is already looking ahead.As the city prepares to host the 2028 Games, construction crews have fanned out, racing to bolster the area’s infrastructure to accommodate hundreds of thousands of visitors.Three main projects — expanding the rail system, revamping the airport and renovating the downtown convention center, which will be the competition venue for five sports — will have lasting effects on the region. The projects are funded through a mix of federal and city dollars as well as airport fees. And there will also be the tourist dollars spent while the Games take place.The city sees the Olympics as a revenue producer, not an expense. Now it must disprove the skeptics who say it could be a boondoggle.In 2019, two years after Los Angeles was awarded the Games, Eric Garcetti, then the mayor, said he expected the city to turn a $1 billion profit.For the current mayor, Karen Bass, hosting the Olympics is more than an opportunity to showcase familiar attractions like Hollywood or Venice Beach. It’s also about connecting visitors with small businesses citywide.“What determines success is for everybody to benefit,” Ms. Bass said in an interview. “They need to know about Little Bangladesh and Little Ethiopia and Little Armenia.”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

  • 113 Shares199 Views

    in Economy

    How Economic Grievances Were Exploited in Britain’s Violent Unrest

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    Nationalist hatred has been linked to forces like stagnant wages and declining services, even though research shows immigration helps many economies.Like many cities around Britain shaken by anti-immigrant riots over the past week, Hartlepool, a seaside town on the northeast coast, has partly recovered from the devastating waves of industrial decline that began washing over the country in the 1980s.Still, the scars linger. Disposable income is below the national average, and more people are out of the work force, according to the Office for National Statistics. There are fewer active businesses, healthy life expectancy is lower and the crime rate is 89 percent higher.In Britain, as well as throughout Europe and in the United States, economic problems — like stagnant wages, roaring inequality and declining public services — have been linked to the rise of anti-immigrant attitudes.Even though research shows that immigration is an overall plus for most economies, far-right politicians have been able to exploit those frustrations to energize supporters and gain political power.In Britain, Nigel Farage, the leader of the populist, anti-immigration party Reform, has regularly made false claims that refugees and migrants drained public budgets. He has complained, for instance, about Britain having to “build a house every two minutes” to accommodate legal migrants and warned of “those arriving on the back of lorries” trying to get benefits.Mr. Farage, who was elected to Parliament in July, added to the web of disinformation that helped kindle the riots by inaccurately suggesting the man who fatally stabbed three young children at a dance class in Southport was an undocumented immigrant. He later came out against the violence.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

  • 175 Shares119 Views

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    Stellantis to Lay Off Up to 2,450 at Ram Truck Plant in Warren, Michigan

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    The move is the latest sign of trouble for the trans-Atlantic automaker, which has had sluggish North American sales and has said it needs to cut costs.Stellantis announced plans on Friday to lay off as many as 2,450 workers later this year at a pickup truck plant near Detroit, the latest sign of trouble for the trans-Atlantic automaker.The layoffs are expected to begin as early as Oct. 8 at the Ram truck plant in Warren, Mich., where production will be reduced to one shift from two, the company said on Friday.Stellantis’s chief executive, Carlos Tavares, has said the company needs to cut costs, and he has noted that at least one North American factory was operating at an unsatisfactory level.The company has been hit by sluggish sales in North America, where it generates most of its profits, as well as bloated costs and manufacturing inefficiencies. It reported last month that profits in the first six months of 2024 fell by nearly half to 5.6 billion euros (about $6 billion).“It is an understatement to say that the first-half 2024 results were disappointing and humbling,” Mr. Tavares said on a call with analysts after the earnings report. “This is a bump on the road that we are now fixing and that we are going to fight against to make sure that we can rebound from here, and that we fix the operational issues that we face.”The layoffs are related to a planned transition to a new version of the Ram pickup that is just going into production at a plant in Sterling Heights, Mich. The Warren plant will continue making an older version of the truck on one shift, the company said on Friday, adding that the actual number of workers affected will probably be lower than the 2,450 noted in a report to the state of Michigan.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

  • 88 Shares129 Views

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    Apple Store Workers Get First U.S. Contract

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    The agreement at a Maryland store, the first to unionize, raises wages roughly 10 percent over three years and guarantees benefits and severance pay.Workers at the first unionized Apple Store in the country ratified a labor contract with the tech giant on Tuesday, after a year and a half in which bargaining appeared to stall for long stretches and union campaigns at other stores fell short.After the union announced the outcome, Apple said it did not dispute the result and was pleased to have an agreement.The contract, covering about 85 workers at a Towson, Md., store who voted to join the International Association of Machinists and Aerospace Workers in June 2022, will provide a typical worker with a raise of roughly 10 percent over the next three years.The workers will also effectively receive the same benefits as those in nonunion stores — a point of contention since the company introduced new benefits that excluded union stores in the fall of 2022 — as well as guaranteed severance pay.“We are giving our members a voice in their futures and a strong first step toward further gains,” the store’s bargaining committee said in a statement after reaching a deal with the company. “Together, we can build on this success in store after store.”The contract talks had appeared to bog down over equal access to the benefits that other stores receive, and over a nationwide change in Apple’s scheduling and availability policy for part-time workers. The union said the policy change would have forced roughly half a dozen Towson workers to quit because of conflicts with other commitments.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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    To Avoid an Economic Recession, Consumer Spending Is Key

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    It has powered the economic recovery from the pandemic shock. Now wallets are thinner, and some businesses are feeling the difference.The economy’s resurgence from the pandemic shock has had a singular driving force: the consumer. Flush with savings and buoyed by a sizzling labor market, Americans have spent exuberantly, on goods such as furniture and electronics and then on services including air travel and restaurant meals.How long this spending will hold up has become a crucial question.Despite contortions in world markets, many economists are cautioning that there is no reason to panic — at least not yet. In July, there was a notable slowdown in hiring and a jump in the unemployment rate to its highest level since October 2021, but consumer spending has remained relatively robust. Wages are rising, though at a slower rate, and job cuts are still low.“Overall, there isn’t evidence of a retrenchment in consumer spending,” said Gregory Daco, chief economist at the consulting firm EY-Parthenon. The strength of spending helped power greater-than-expected economic growth in the spring.That could change if the labor market’s slowdown accelerates.Already, some consumers, especially those with lower incomes, are feeling the dual pinch of higher prices and elevated interest rates that are weighing on their finances. Credit card delinquencies are rising, and household debt has swelled. Pandemic-era savings have dwindled. In June, Americans saved just 3.4 percent of their after-tax income, compared with 4.8 percent a year earlier.On calls with investors and in boardrooms around the country, corporate executives are acknowledging that customers are no longer spending as freely as they used to. And they are bracing themselves for the slide to continue.“We are seeing cautious consumers,” Brian Olsavsky, Amazon’s chief financial officer, said on a call with reporters last week. “They’re looking for deals.”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