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    U.S. Economic Growth Accelerated in the Third Quarter

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    Gross domestic product expanded at a 4.9 percent annual rate over the summer, powered by prodigious consumer spending. But the pace is not expected to be sustained.The United States economy surged in the third quarter as a strong job market and falling inflation gave consumers the confidence to spend freely on goods and services.Gross domestic product, the primary measure of economic output, grew at a 4.9 percent annualized rate from July through September, the Commerce Department reported Thursday. It was the strongest showing since late 2021, defying predictions of a slowdown prompted by the Federal Reserve’s interest rate increases.The acceleration was made possible in part by slowing inflation, which lifted purchasing power even as wage growth weakened, and a job market that has shown renewed vigor over the past three months.It’s a far cry from the recession that many had forecast at this time last year, before economists realized that Americans had piled up enough savings to power spending as the Fed moved to make borrowing more expensive.“There’s been an enormous increase in wealth since Covid,” said Yelena Shulyatyeva, senior economist for the bank BNP Paribas, referring to recent Fed data that showed median net worth climbed 37 percent from 2019 to 2022. “People still take not just one vacation, not just two, but three and four.”That level of spending in turn fueled robust job growth in service industries like hotels and restaurants even as sectors that benefited from pandemic shopping trends, like transportation and warehousing, returned to more normal levels. And with layoffs still near record lows, workers have little reason to hold off on making purchases, even if it means using a credit card — an increasingly pricey option as interest rates drift higher.One beneficiary of those open pocketbooks is Amanda McClements, who owns a home goods store in Washington, D.C., called Salt & Sundry. Sales are up about 15 percent from last year and have finally eclipsed 2019 levels.“People can’t get enough candles; that continues to be our top seller,” Ms. McClements said. They are also “entertaining more post-pandemic, so we do really well in glassware, tableware, beautiful linens.”Ms. McClements said business hadn’t been uniformly strong, though: Her plant store, Little Leaf, never snapped back from the depths of the pandemic, and it closed this year. “We’ve been experiencing a really uneven recovery,” she said.Although consumers propelled the bulk of the economy’s growth in the third quarter, other factors contributed as well. Residential investment, for example, provided a boost even in the face of higher interest rates: Those who already own homes have little incentive to sell, so newly constructed homes are the only ones on the market.“The third quarter would be that sweet spot where higher mortgage rates kept people in place, builders capitalized on the lack of existing supply, and that showed up as an improvement from prior quarters,” said Bernard Yaros, lead U.S. economist at Oxford Economics.The rebound in growth will probably be brief. Pitfalls loom in the fourth quarter, including the depletion of savings, the resumption of mandatory student loan payments and the need to refinance maturing corporate debt at higher rates.But for now, the United States is outperforming other large economies, in part because of its aggressive fiscal response to the pandemic and in part because it has been more insulated from impact of the Ukraine war on energy prices.“We’re talking about the eurozone and U.K. certainly looking like being on the cusp of recession, if not already in recession,” said Andrew Hunter, deputy U.S. economist for Capital Economics, an analysis firm. “The U.S. is still the global outlier.”Jeanna Smialek More

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    Why U.A.W. President Shawn Fain Has Taken a Hard Line

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    Shawn Fain owes his rise within the United Automobile Workers to a group determined to make the union far more confrontational toward automakers.When Shawn Fain sought the presidency of the United Automobile Workers union last year, he ran on a platform that promised: “No corruption. No concessions. No tiers.”That pledge encapsulated many members’ frustrations with years of union scandal and concessions to the three big Detroit automakers, including the creation of a lower tier of wages for newer employees. The platform helped propel Mr. Fain to the top job — where he has led a mounting wave of walkouts in recent weeks to demand more favorable contract terms.But the platform largely predated Mr. Fain’s candidacy. It was devised by a group called Unite All Workers for Democracy, which was officially formed in 2020 as a caucus — essentially, a political party within the union.The group set out to topple the ruling party, known as the Administration Caucus, which had run the union for more than 70 years. In 2022, Unite All Workers hashed out its party line, recruited candidates and ramped up a campaign operation to elect them.When the dust settled, the slate had won half the seats on the union’s 14-member executive board, with Mr. Fain, previously a union staff member, as president. Unite All Workers’ role helps explain why the union has taken such a hard line with the automakers.“We had a platform we ran on, and we’re trying to push that platform forward,” said Scott Houldieson, a founder of the group and a longtime Ford Motor worker in Chicago. “Shawn has been really upfront about what we’re trying to accomplish.”The first fruits of that approach may have emerged Wednesday, when negotiators for the union and Ford agreed on terms for a new four-year contract, including a wage increase of roughly 25 percent over the four years, according to the union.“We hit the companies to maximum effect,” Mr. Fain said in a Facebook livestream. The deal is subject to ratification by the company’s union workers.Since at least the 1980s, U.A.W. members have formed groups to challenge the union’s top officials, or at least prod them to be more confrontational with automakers. The efforts took on added urgency in 2007, when the union accepted tiers as a way to stabilize the automakers’ financial footing. (General Motors and Chrysler later filed for bankruptcy anyway; Ford avoided it.)Scott Houldieson, a founder of United Auto Workers for Democracy, said, “We had a platform we ran on, and we’re trying to push that platform forward.”Jamie Kelter Davis for The New York TimesBut the Administration Caucus always held a trump card: The union leadership wasn’t elected directly by members. Rather, future leaders were effectively chosen by existing leaders, then approved by delegates to a convention every four years.That changed after a corruption scandal in which two recent U.A.W. presidents were charged with embezzlement in 2020. As part of a consent decree with the federal government, members voted in a referendum on whether to directly elect union leaders. Unite All Workers, which was pressing for the change, waged an all-out campaign to persuade union members to support “one member one vote.”When the initiative passed by nearly a two-to-one ratio, Unite All Workers, whose members paid an annual fee, was poised to become a kingmaker of sorts in the union’s 2022 elections. The group had a budget of over $100,000, two full-time staff members and hundreds of volunteer organizers.“It was obvious that we could use the same infrastructure” of staff and volunteers to compete in the election, said Mike Cannon, a retired U.A.W. member who serves on the Unite All Workers steering committee. “The only question at that point was, were we going to have any candidates?”Unite All Workers announced that anyone who wanted to join its campaign slate would have to fill out a detailed questionnaire and attend at least one meeting with its members.The group wanted to ensure that the candidates it backed were committed to running the union with extensive input from rank-and-file members, and to driving a much harder bargain with employers. It wanted an end to wage tiers, which it said divided and demoralized workers, and a focus on organizing new members, especially among electric vehicle and battery workers.Among those responding to the call was Mr. Fain, then a staff member in the union division responsible for Stellantis, the parent of Chrysler, Jeep and Ram. During his interview process, Mr. Fain explained how, as a local official in Indiana in 2007, he had helped lead opposition to the two-tier wage structure the union had agreed to, and how he had argued for more favorable contract terms after joining the headquarters staff.Some members of the group were skeptical that an employee of the old guard could be a reformer. But other U.A.W. dissidents vouched for him. “I knew the claims were legit,” said Martha Grevatt, a longtime Chrysler employee on the steering committee of Unite All Workers.Martha Grevatt said she had found Mr. Fain’s pledges to shake up the union “legit” even though he had been a staff member under the previous leadership.Daniel Lozada for The New York TimesThe group backed Mr. Fain and six other candidates for the union’s 14-member executive board, and all seven won.As president, Mr. Fain has appointed critics of the former leadership as his top aides, including one who served on the Unite All Workers steering committee. Board members, including Mr. Fain, have attended some of the group’s monthly membership meetings and taken part in one of its WhatsApp chats.Many of the group’s priorities became demands in the union’s contract negotiations, and Mr. Fain has indicated that he hopes to use momentum from the strike to organize nonunion companies like Tesla and Honda, a key objective of Unite All Workers.But for all the connections between the group and the union leadership, they are not one and the same.Some board members who ran on the Unite All Workers slate have at times taken positions in tension with the group’s priorities. In recent weeks, Margaret Mock, the union’s second-ranking official, has expressed concern to fellow board members about the walkout’s cost to the union’s budget. At a special board meeting last week, she offered a proposal intended to scale back spending on organizing during the strike, according to two people familiar with the meeting. The board set aside the proposal; Ms. Mock did not respond to a request for comment.For its part, Unite All Workers considers itself accountable to rank-and-file members, not an extension of the leaders it helped elect. On a tentative deal with any of the three large automakers, Unite All Workers plans to appoint a task force to provide an assessment of the proposal to the union’s members. The group’s members will then decide whether to support it.“I would say it’s not automatic that the caucus endorses” an agreement, said Andrew Bergman, who serves on the Unite All Workers steering committee.Still, as a practical matter, the group is highly unlikely to oppose an agreement, since Mr. Fain has forcefully pressed for its core priorities.“For years, we’ve been playing defense at every step, and we’ve been losing,” Mr. Fain said in a video streamed online on Friday, explaining why the strike would continue. “When we vote on a tentative agreement, it will be because your leadership and your council thinks we’ve gotten absolutely every dollar we can.” This week, the union expanded the strike to the largest U.S. factories at Stellantis and General Motors.The approach has raised concerns among employers and business groups. John Drake, a vice president at the U.S. Chamber of Commerce, said that the Detroit automakers could struggle to remain competitive after the strike, and that Mr. Fain appeared to be overreaching in extracting concessions.“It feels like there’s not really a strategy here,” Mr. Drake said. “It’s like pain is the goal.”Mr. Fain has indicated that he hopes to use momentum from the strike to organize nonunion companies like Tesla and Honda, a key objective of the insurgent group that endorsed his candidacy.Jamie Kelter Davis for The New York TimesThe best analogy for Unite All Workers may be to a group called Brand New Congress, created by supporters of Senator Bernie Sanders, the progressive Vermont independent, to help elect congressional candidates beginning in 2018.Not long after the 2016 presidential election, Brand New Congress urged an obscure New York bartender and activist named Alexandria Ocasio-Cortez to challenge a longtime incumbent in a Democratic congressional primary. A sister group provided her with training and campaign infrastructure. After she won, two people involved with the groups joined her staff.Ms. Ocasio-Cortez has since become far more prominent than those early backers, and in principle she could take positions at odds with their progressive stands. But in practice, it’s unlikely. The worldview is embedded in her political identity.Mr. Fain’s story is similar: a once-obscure progressive who was catapulted to a position of power by a group of insurgents and was determined to enact their shared principles once he got there. Except that, in backing him and his colleagues, Unite All Workers helped win not just a few legislative seats, but the reins of an entire union.After Vail Kohnert-Yount, a Unite All Workers steering committee member, seconded Mr. Fain’s nomination for president at the union’s convention last year, he spoke to her about relying on government assistance as a new parent decades ago.“I remember thinking this guy has not forgotten where he came from — he’s very much stayed that person,” Ms. Kohnert-Yount said. “We did our best to endorse a candidate we believed in.” More

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    U.A.W. and Ford Negotiators Reach Accord on Contract Terms

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    The deal, subject to approval by union members, could ease the way for deals with General Motors and Stellantis and end a growing wave of walkouts.Negotiators for the United Automobile Workers and Ford Motor have agreed on terms of a new four-year labor contract, people briefed on the talks said Wednesday, nearly six weeks after the union began a growing wave of walkouts against the three Detroit automakers.The deal includes a roughly 25 percent pay increase over four years, those people said. Any agreement would be subject to the approval of the U.A.W. council that oversees relations with Ford, and then ratification by the company’s union workers.The union continues to negotiate with General Motors and Stellantis, whose brands include Chrysler, Jeep and Ram.Two weeks ago — when it said it had reached the limit of what it could afford without hurting its business — Ford offered to increase wages 23 percent, adjust pay in response to inflation and cut the time for new hires to rise to the top wage, to four years from eight. The other companies have made similar offers.But the U.A.W. and its president, Shawn Fain, have pressed for greater concessions, ratcheting up the walkouts and aiming them at factories producing some of the automakers’ most profitable models.Altogether, about 45,000 workers at Ford, G.M. and Stellantis are on strike across the country, including 8,700 workers at Ford’s Kentucky truck plant in Louisville, the company’s largest, and almost 10,000 others at Ford factories in Illinois and Michigan.The tentative deal with Ford could increase pressure on the other companies to reach an agreement with the union. In the past, once the union reached a deal with one automaker, tentative agreements with the others quickly followed. But that history may not be as relevant now because the U.A.W. had never struck all three companies simultaneously until this year.The companies are investing billions in a transition to battery-powered vehicles, which they say makes it harder for them to pay substantially higher wages. Last week, Ford’s executive chairman, William C. Ford Jr., said the union’s demands risked damaging the ability of Detroit automakers to compete against nonunion companies like Tesla and foreign rivals.“Toyota, Honda, Tesla and the others are loving the strike, because they know the longer it goes on, the better it is for them,” he said. “They will win, and all of us will lose.”The U.A.W. makes a different case: that success in its contract battle with the Big Three will give it momentum to organize autoworkers at other companies as well.The U.A.W. began its walkouts when the companies’ union contracts expired in mid-September. It won immediate support from President Biden, who called on the automakers to “ensure record corporate profits mean record contracts” and briefly joined workers on a picket line at a G.M. plant near Detroit late last month.The union initially demanded a 40 percent wage increase over four years — an amount that union officials have said matches the raises the top executives at the three companies have received over the last four years. Those raises are also meant to compensate for more modest increases the autoworkers received in recent years and concessions the union made to the companies beginning in 2007.In addition, the union has called for an end to a system that pays new hires just over half of the top wage of $32 an hour. It has been seeking cost-of-living adjustments that would nudge wages higher to compensate for inflation. And it wants a reinstatement of pensions for all workers, improved retiree benefits and shorter work hours.G.M. and Stellantis faced the most recent escalation of the U.A.W. walkouts when the union called out 6,800 workers at a large Ram pickup truck plant in Michigan on Monday and 5,000 workers at a G.M. plant in Arlington, Texas, that makes large sport utility vehicles including the Chevrolet Tahoe, the GMC Yukon and the Cadillac Escalade.On Tuesday, G.M. reported a third-quarter profit of $3.1 billion, a 7 percent decline from the same period last year, owing in part to the ongoing strike. Ford is scheduled to announce its third-quarter earnings on Thursday. More

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    U.A.W. Expands Strike to a Ram Plant in Michigan

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    The United Automobile Workers union called on 6,800 workers to walk off the job at a large factory that makes one of Stellantis’s most profitable vehicles.In a major escalation of its six-week strike at the three large U.S. automakers, the United Automobile Workers union on Monday told 6,800 workers at a large Ram pickup truck plant in Michigan to walk off the job.Union workers at the Sterling Heights plant, which is owned by Stellantis, the parent of Ram, Chrysler and Jeep, joined the strike on Monday morning. Shutting down production at the plant, the largest Stellantis factory in the United States, suggests there are still big gaps in contract negotiations between the automakers and the U.A.W., which is seeking raises of 40 percent over four years, better retirement benefits and other changes.The union’s strategy in this strike is a departure from its past practice of striking all locations of one automaker before beginning negotiations with the next automaker. This time, the union started with a strike at one plant at each of the three carmakers — Ford Motor, General Motors and Stellantis — and has expanded them to other factories and warehouses to increase the pressure on companies that it said were not doing enough to improve their offers.The new approach has kept the automakers off balance because they don’t know when or where the union will walk out next. It is also a way for the union to play the companies off one another. The union’s president, Shawn Fain, has offered side-by-side comparisons of the three companies’ offers on wages, retirement benefits and other negotiating terms in online videos.On Friday, General Motors put forward a more lucrative contract proposal. By calling for the strike at the Sterling Heights plant, the U.A.W. is trying to pressure Stellantis into at least matching the terms that G.M. offered.“Stellantis has the worst proposal on the table regarding wage progression, temporary worker pay and conversion to full-time, cost-of-living adjustments, and more,” the U.A.W. said in a statement on Monday.In its offer, G.M. proposed raising workers’ wages by 23 percent over four years. That would lift the wage for all full-time workers from $32 an hour to more than $40, giving them a base pay of about $84,000 a year, not including overtime or profit-sharing bonuses.The walkout at the Ram plant is the first escalation in the strike since the U.A.W. called 8,700 workers to leave their jobs at Ford’s largest plant, in Louisville, Ky., on Oct. 11. That plant produces the Super Duty version of the popular F-series pickup trucks and the Ford Expedition, a full-size sport utility vehicle.In a statement, Stellantis said the company was “outraged” by the expansion of the strike, noting that it made a comprehensive new proposal to the union on Thursday morning and was waiting for a counterproposal from the U.A.W.“Our very strong offer would address member demands and provide immediate financial gains for our employees,” the company said. “Instead, the U.A.W. has decided to cause further harm to the entire automotive industry as well as our local, state and national economies.”U.A.W. members were already on strike at one other Stellantis plant, a factory in Toledo, Ohio, that makes the Jeep Wrangler and the Jeep Gladiator. The union has also struck 20 Stellantis spare-parts distribution warehouses around the country.Where Autoworkers Are Walking Out More

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    How High Interest Rates Sting Bakers, Farmers and Consumers

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    Home buyers, entrepreneurs and public officials are confronting a new reality: If they want to hold off on big purchases or investments until borrowing is less expensive, it’s probably going to be a long wait.Governments are paying more to borrow money for new schools and parks. Developers are struggling to find loans to buy lots and build homes. Companies, forced to refinance debts at sharply higher interest rates, are more likely to lay off employees — especially if they were already operating with little or no profits.Over the past few weeks, investors have realized that even with the Federal Reserve nearing an end to its increases in short-term interest rates, market-based measures of long-term borrowing costs have continued rising. In short, the economy may no longer be able to avoid a sharper slowdown.“It’s a trickle-down effect for everyone,” said Mary Kay Bates, the chief executive of Bank Midwest in Spirit Lake, Iowa.Small banks like Ms. Bates’s are at the epicenter of America’s credit crunch for small businesses. During the pandemic, with the Fed’s benchmark interest rate near zero and consumers piling up savings in bank accounts, she could make loans at 3 to 4 percent. She also put money into safe securities, like government bonds.But when the Fed’s rate started rocketing up, the value of Bank Midwest’s securities portfolio fell — meaning that if Ms. Bates sold the bonds to fund more loans, she would have to take a steep loss. Deposits were also waning, as consumers spent down their savings and moved money into higher-yielding assets.Higher Interest Rates Are Here More

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    Powell Says Strong Economic Data ‘Could Warrant’ Higher Rates

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    The Federal Reserve may need to do more if growth remains hot or if the labor market stops cooling, Jerome H. Powell said in a speech.Jerome H. Powell, the chair of the Federal Reserve, reiterated the central bank’s commitment to moving forward “carefully” with further rate moves in a speech on Thursday. But he also said that the central bank might need to raise interest rates more if economic data continued to come in hot.Mr. Powell tried to paint a balanced picture of the challenge facing the Fed in remarks before the Economic Club of New York. He emphasized that the Fed is trying to weigh two goals against one another: It wants to wrestle inflation fully under control, but it also wants to avoid doing too much and unnecessarily hurting the economy.Yet this is a complicated moment for the central bank as the economy behaves in surprising ways. Officials have rapidly raised interest rates to a range of 5.25 to 5.5 percent over the past 19 months. Policymakers are now debating whether they need to raise rates one more time in 2023.The higher borrowing costs are supposed to weigh down economic activity — slowing home buying, business expansions and demand of all sorts — in order to cool inflation. But so far, growth has been unexpectedly resilient. Consumers are spending. Companies are hiring. And while wage gains are moderating, overall growth has been robust enough to make some economists question whether the economy is slowing sufficiently to drive inflation back to the Fed’s 2 percent goal.“We are attentive to recent data showing the resilience of economic growth and demand for labor,” Mr. Powell acknowledged on Thursday. “Additional evidence of persistently above-trend growth, or that tightness in the labor market is no longer easing, could put further progress on inflation at risk and could warrant further tightening of monetary policy.”Mr. Powell called recent growth data a “surprise,” and said that it had come as consumer demand held up much more strongly than had been expected.“It may just be that rates haven’t been high enough for long enough,” he said, later adding that “the evidence is not that policy is too tight right now.”Economists interpreted his remarks to mean that while the Fed is unlikely to raise interest rates at its upcoming meeting, which concludes on Nov. 1, it was leaving the door open to a potential rate increase after that. The Fed’s final meeting of the year concludes on Dec. 13.“It didn’t sound like he was anxious to raise rates again in November,” said Michael Feroli, chief U.S. economist at J.P. Morgan, explaining that he thinks the Fed will depend on data as it decides what to do in December.“He definitely didn’t close the door to further rate hikes,” Mr. Feroli said. “But he didn’t signal anything was imminent, either.”Kathy Bostjancic, chief economist for Nationwide Mutual, said the comments were “balanced, because there is so much uncertainty.”The Fed chair had reasons to keep his options open. While growth has been strong in recent data, the economy could be poised for a more marked slowdown.The Fed has already raised short-term interest rates a lot, and those moves “may” still be trickling out to slow down the economy, Mr. Powell noted. And importantly, long-term interest rates in markets have jumped higher over the past two months, making it much more expensive to borrow to buy a house or a car.Those tougher financial conditions could affect growth, Mr. Powell said.“Financial conditions have tightened significantly in recent months, and longer-term bond yields have been an important driving factor in this tightening,” he said.Mr. Powell pointed to several possible reasons behind the recent increase in long-term rates: Higher growth, high deficits, the Fed’s decision to shrink its own security holdings and technical market factors could all be contributing factors.“There are many candidate ideas, and many people feeling their priors have been confirmed,” Mr. Powell said.He later added that the “bottom line” was the rise in market rates was “something that we’ll be looking at,” and “at the margin, it could” reduce the impetus for the Fed to raise interest rates further.The war between Israel and Gaza — and the accompanying geopolitical tensions — also adds to uncertainty about the global outlook. It remains too early to know how it will affect the economy, though it could undermine confidence among businesses and consumers.“Geopolitical tensions are highly elevated and pose important risks to global economic activity,” Mr. Powell said.Stocks were choppy as Mr. Powell was speaking, suggesting that investors were struggling to understand what his remarks meant for the immediate outlook on interest rates. Higher interest rates tend to be bad news for stock values.The S&P 500 ended almost 1 percent lower for the day. The move came alongside a further rise in crucial market interest rates, with the 10-year Treasury yield rising within a whisker of 5 percent, a threshold it hasn’t broken through since 2007.The Fed chair reiterated the Fed’s commitment to bringing inflation under control even at a complicated moment. Consumer price increases have come down substantially since the summer of 2022, when they peaked around 9 percent. But they remained at 3.7 percent as of last month, still well above the roughly 2 percent that prevailed before the onset of the coronavirus pandemic.“A range of uncertainties, both old ones and new ones, complicate our task of balancing the risk of tightening monetary policy too much against the risk of tightening too little,” Mr. Powell said. “Given the uncertainties and risks, and given how far we have come, the committee is proceeding carefully.”Joe Rennison contributed reporting. More

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    American Household Wealth Jumped in the Pandemic

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    Pandemic stimulus, a strong job market and climbing stock and home prices boosted net worth at a record pace, Federal Reserve data showed.American families saw the largest jump in their wealth on record between 2019 and 2022, according to Federal Reserve data released on Wednesday, as rising stock indexes, climbing home prices and repeated rounds of government stimulus left people’s finances healthier.Median net worth climbed 37 percent over those three years after adjusting for inflation, the Fed’s Survey of Consumer Finances showed — the biggest jump in records stretching back to 1989. At the same time, median family income increased 3 percent between 2018 and 2021 after subtracting out price increases.While income gains were most pronounced for the affluent, the data showed clearly that Americans made nearly across-the-board financial progress in the three years that include the pandemic. Savings rose. Credit card balances fell. Retirement accounts swelled.Other data, from both government and private-sector sources, hinted at those gains. But the Fed report, which is released every three years, is considered the gold standard in data about the financial circumstances of households. It offers the most comprehensive snapshot of everything from savings to stock ownership across racial, wealth and age groups.This is the first time the Fed report has been released since the onset of the coronavirus, and it offers a sense of how families fared during a tumultuous economic period. People lost jobs in mass numbers in early 2020, and the government tried to soften the blow with multiple relief packages.More recently, the job market has been booming, with very low unemployment and rapid wage growth that has helped to bolster incomes. At the same time, rapid inflation has eroded some of the gains by making everyday life more expensive.Without adjusting for inflation, median income would have risen 20 percent, for instance, based on the report released Wednesday.The job market has been booming, and at the same time, rapid inflation has eroded some of the gains by making everyday life more expensive.Hiroko Masuike/The New York TimesThe financial progress, particularly for poorer families, is especially remarkable when compared with the aftermath of the last recession, which lasted from 2007 to 2009. It took years for household wealth to rebound fully after that crisis, and for some families it never did.Income climbed across all groups between 2019 and 2022, though gains were biggest toward the top — meaning that income inequality widened.That made for a big difference between median income — the number at the midpoint among all households — and the average, which tallies all earnings and divides them by the number of households. Average income climbed 15 percent, one of the largest three-year pops on record.Wealth inequality was more complicated. Because the rich hold such a large share of financial assets in America, wealth gaps tend to grow in absolute terms when stocks, bonds and houses are climbing in price. True to that, wealth climbed much more in dollar terms for rich families.But in the three years covered by the survey, growth in wealth was actually the largest in percentage terms for poorer families. People in the bottom quarter had a net worth of $3,500 in 2022, up from $400 in 2019. Among families in the top 10 percent, median net worth climbed to $3.79 million, up from $3.01 million three years earlier.Because of the way the data is measured, it is difficult to break out just how much pandemic-related payments would have mattered to the figures. To the extent that families saved one-time checks and other help they received during the pandemic, those would have been included in the measures of net worth.Families were also still receiving some pandemic payments when the income measures were collected in 2021, which means that things like enhanced unemployment insurance probably factored into the data.Some Americans appear to have taken advantage of their improved financial positions to invest in stocks for the first time: 21 percent of families owned stocks directly in 2022, up from 15 percent in 2019, the largest change on record. Many of those new stock owners appear to have been relatively small investors, likely reflecting at least in part Americans’ enthusiasm for “meme stocks” like GameStop during the pandemic.The Fed’s newly released figures show that significant gaps in income and wealth persist across racial groups, although Black and Hispanic families saw the largest percentage gains in net worth during the pandemic period.Black families’ median net worth climbed 60 percent, to $44,900. That was a bigger jump than the 31 percent increase for white families, which lifted their household wealth to $285,000. Hispanic families saw a 47 percent increase in net worth.At the same time, racial and ethnic minorities saw slower income gains in the period through 2021. Black and Hispanic households saw small declines in earnings after adjusting for inflation, while white families saw a modest increase.For the first time, the report included data on Asian families, who had the highest median net worth of any racial or ethnic group.While the data in the report is slightly dated, it underscores what a strong position American families were in as they exited the pandemic. Solid net worth and growing incomes have helped people to continue spending into 2023, which has helped to keep the economy growing at a solid pace even when the Fed has been lifting interest rates to cool it down.That resilience has stoked hope that the Fed might be able to pull off a “soft landing,” one in which it slows the economy gently without crushing consumers so much that it plunges America into a recession. More

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    For Bill Ford, ‘Every Negotiation Is a Roller Coaster’

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    As a 25-year-old junior executive at the car company that bears his last name, William Clay Ford Jr. had a bracing introduction to labor negotiations when a union official demanded that he stand up and vouch that he was made of the same stuff as his great-grandfather Henry Ford.Mr. Ford, now the company’s executive chair, harked back to the moment in an interview this week about how he and his company are navigating one of their most difficult labor negotiations in decades.The United Automobile Workers union has shut down three Ford plants, including its largest, and other plants and distribution centers at General Motors and Stellantis, which owns Chrysler. The union’s new president, Shawn Fain, has said he is prepared to call workers out at more plants if his demands for big raises, better benefits and job security are not met. He has referred to the companies as “the enemy,” and has said the union is fighting “corporate greed” and standing up to the “billionaire class.”In a speech this week, Mr. Ford said the strikes were helping nonunion automakers like Tesla, Toyota and Honda. Mr. Fain responded that workers at those companies were future U.A.W. members.In an interview after his speech, Mr. Ford said he had been counseling his executives not to let Mr. Fain’s words get to them and focus on getting a deal done. Mr. Ford also recalled his first difficult conversation with a union official.In 1982, Mr. Ford said, his father invited him to sit in the room for talks with the U.A.W. As a newcomer, he was not allotted a seat at a table where about 50 union negotiators sat on one side and an equal number of Ford executives on the other.Sitting against the wall, he was approached by an older union representative. “You, stand up,” the man said. “What are you made of? I knew your great-grandfather and your grandfather. I knew what they were made of. What the hell are you made of?”Mr. Ford said he had replied sheepishly that he had never known his great-grandfather and grandfather but that he shared their values. Similar confrontations followed daily — “I lived in terror of going to work,” Mr. Ford said.Then about a week later, the union officials invited him to a local bar. “Come with us,” Mr. Ford said they had told him. “You passed the test.”This interview was condensed and edited for clarity.Have you been involved in any talks that are comparable to the current negotiations?No, but every negotiation is different, and every leader is different. What I keep saying to our executives is: ‘Don’t take this personally. A lot of it is theater. The most important thing is get the deal done. The rhetoric doesn’t matter.’ Every negotiation is a roller coaster. Some are not pleasant, and some sting. Don’t overreact. And when it’s all over, we are still one team again, and have to go forward.Are you going to be on the same team at the end of these talks?I believe we will. I know many on their negotiating team personally, and some of them, I play hockey with them and consider them very close friends.You’ve said the real competition is not U.A.W. vs. Ford but the U.A.W. and Ford against Toyota, Honda, Tesla and the Chinese automakers. Do you think the union’s leadership agrees with that?I hope so, because if they don’t, it will be catastrophic. They can have disagreements with us and bargain hard, but we are not the enemy. I will never consider our employees the enemy. I think the employees know who the real competition is, and they will come together with us when this is over. We made a conscious decision to add jobs here in America when our competitors were moving production to Mexico.Would the offer you have on the table now put Ford at a significant disadvantage to other automakers?It certainly won’t be an advantage. We could live with the deal we have proposed, but just barely. If you go beyond that, we are going to have to start making hard decisions in terms of investments and future products.Shawn Fain has said the workers have fallen behind while the automakers and executives like Jim Farley, Ford’s chief executive, and Mary Barra, G.M.’s chief executive, have prospered. How do you respond?Everyone’s going to have their own viewpoint on executive compensation, and I totally get that. But I also know what the market is for top talent. You have entertainers and athletes who are making more than Jim Farley and Mary Barra. But that’s what the market is, and the company with the best talent wins, period.There were some years in the lean years when I took no pay, and I would do it again if I had to.You have three plants shut down by the strike. How is that affecting your operations?It’s messy, and it’s going to become messier. The most immediate effects will be on the suppliers. The supply base is very fragile. It barely survived Covid, and is not all the way back, so a prolonged strike will start collapsing the supply base, and then making anything in this country will be difficult.Manufacturing is a matter of national security, and we saw that during Covid. And I hope with all my heart we never get into another war, but if we did, this industry would be critical to defending our nation, as it was in World War I and World War II. Other industries can make small numbers of things. The auto companies can turn that into tens of thousands of things.“I never thought I would see the day when our products were so heavily politicized, but they are.” — William Clay Ford Jr.What’s your outlook on the U.S. economy?I think it’s fragile. Inflation is taking its toll. The consumer is still spending, but we’re watching it very carefully. On the other hand, there’s still strong employment, and we are seeing our sales hold up. There are conflicting signals, for sure.Let’s talk about electric vehicles. About 18 months ago, you launched the F-150 Lightning pickup. It seemed like electric vehicle sales were going to take off. But now Ford is slowing production of that truck. What happened?E.V. sales are still up 50 percent this year, so sales are growing very fast. But we’ve also seen a politicization of E.V.s. Blue states say E.V.s are great and we need to adopt them as soon as possible for climate reasons. Some of the red states say this is just like the vaccine, and it’s being shoved down our throat by the government, and we don’t want it. I never thought I would see the day when our products were so heavily politicized, but they are.The other is prices. Electric vehicles are expensive. We know prices will come down, and as that happens, we will have a bigger ramp-up of E.V.s. Keep this in mind: The most valuable company that our industry has ever seen is Tesla, and it’s growing. That’s a very instructive point when people say E.V.s are not desired.Are you concerned about some of Donald Trump’s comments? He just came into Michigan and said that the transition to electric vehicles is going to result in almost all auto production moving to China.I don’t want to personalize this, because, frankly, we have to pick a path forward and our lead times are longer than political lead times. So we can’t overreact to one bit of rhetoric or another. We have to deal with the most likely scenario, and how we can create the most value for our company, so we are pushing ahead with E.V.s because we do believe they have great application for a lot of people. And once people drive E.V.s, they will see that it’s a great experience.Electric vehicles are expensive. Did Tesla’s price cuts have a big effect on your business?That’s what we have seen with every new technology that has been adapted. You come down the cost curve pretty quickly as batteries get better.With our first-generation E.V.s, the Lightning and the Mustang Mach-E, they were done with a lot of internal combustion engineering in them. The next generation, which will start coming quite quickly, was developed with a clean sheet of paper. When you do that you can really start taking cost out, and then you can start pricing them accordingly.Tesla has been leading the price cuts, because they can with their scale. That’s something we are actually counting on in the future. And we will have products that compete and make money in that world. More