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    Flood of Workers Has Made the Fed’s Job Less Painful. Can It Persist?

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    Federal Reserve officials thought job gains would taper off more, but they’ve remained strong. An improving supply of workers has been crucial.Hotels in New York’s Adirondack Mountains are having an easier time hiring this summer, partly as immigrants enter the country in greater numbers and provide a steady supply of seasonal help that was hard to come by in and just after the pandemic.It is making staffing less stressful for companies like Weekender, a brand that includes seven rustic hotels in and around the region. The company has managed to get six cultural exchange workers this summer, up from four last year. And similar stories are playing out across the country, offering good news for the Federal Reserve.Fed officials are trying to wrestle inflation down by raising interest rates and slowing the economy. A big part of the task hinges on restoring balance to the labor market, which for 23 straight months had notably more jobs available than workers to fill them. Officials worry that if competition for workers remains fierce and wages continue to rise as quickly as they have been, it will be hard to fully stamp out fast price increases. Companies that are paying up to lure workers will try to charge more to cover their climbing labor bills.The Fed can help to cool the labor market by lowering demand, but the central bank has been getting more help than expected from a growing supply of workers. In recent months, workers have piled into the labor market in numbers that have surprised policymakers and many economists.The development is owed partly to a rebound in immigration as the United States has eased pandemic-related restrictions, cleared processing backlogs and enacted more permissive policies. Labor supply has also received a boost as some demographic groups — including women in their prime working years — have returned to the job market in bigger numbers than anticipated, pushing their employment rates to record highs.That influx has made the Fed’s job a little less painful. Hiring has been able to chug along at a solid clip without further overheating the labor market because job seekers are becoming available to replace those who are getting snapped up. Unemployment has held steady around 3.5 percent, and some data even suggests that staffing is becoming less strained. Wage growth has begun to slow, for instance, and workers are no longer pulling such long hours.“Monetary policy is part of the story to get demand moving towards supply, but any help we can get from supply increasing, that’s good news,” John C. Williams, the president of the Federal Reserve Bank of New York, said in an interview with The Financial Times this month.Employers have added about 280,000 workers per month so far in 2023. Job gains have been gradually slowing, but that is nearly triple the 100,000 pace that Jerome H. Powell, the Fed chair, suggested he expected would be necessary to provide jobs for a steadily growing population.The expanding supply of workers has allowed the Fed to accept the faster-than-expected hiring without slamming the brakes on the economy even more aggressively. Fed officials, who have raised interest rates above 5 percent from near zero in March 2022, have nudged them up more and more slowly over recent months. Policymakers are expected to raise rates by a quarter-point at their meeting this week, to a range of 5.25 to 5.5 percent. Many investors are betting the decision, which will be announced on Wednesday, could be the Fed’s final move for now.What the Fed does in the remainder of 2023 will depend on economic data. Does inflation, which slowed considerably from its peak in June 2022, continue to moderate? Do job gains and wage growth continue to drift lower? If the economy keeps a lot of momentum, officials might feel the need to make another move this year. If it cools, they might feel comfortable stopping rate increases. In either case, policymakers have been signaling that rates will probably need to remain high for some time.When it comes to the labor market part of that puzzle, key officials have signaled that they think the next phase of restoring balance could be the more difficult one. Policymakers have welcomed newfound labor supply in recent months, but some doubt the trend can continue. Mr. Williams suggested that immigration could remain strong, but that it might be difficult for participation — the share who are working or looking — to climb much higher.Great Pines is part of Weekender, a brand that includes seven rustic hotels in and around the Adirondacks.Amrita Stuetzle for The New York Times“I don’t think there is a lot of space for that to continue to be a big driver of the rebalancing of supply and demand,” Mr. Williams said in his July interview — explaining that the Fed will need to keep using policy to slow labor demand in order to lower inflation.Some economists and labor groups think officials like Mr. Williams are being overly glum about the prospects for continued improvement in labor supply: Immigration numbers are still climbing, and flexible and remote work arrangements might mean that people who could not work in past eras now can.“That ability for the labor supply side to continue to improve, I think the Fed has probably undersold it,” said Skanda Amarnath, executive director at Employ America, a research and advocacy group focused on the job market. “I think they’re probably underselling it even now.”Worker shortages began to bite in late 2020, after deep layoffs and curbs on immigration shrank the labor pool. The civilian labor force — which includes people who are working or looking for work — plummeted by eight million people in early 2020.But the supply of workers has since rebounded by about 10.6 million people. That recovery has owed partly to a pickup in the foreign-born labor force, which has accounted for roughly one in every three potential workers added since the pandemic low point, based on Labor Department data.Legal immigration has been gaining steam as processing backlogs clear and Biden administration policies allow more refugees into the country, said Julia Gelatt, associate director of the U.S. Immigration Policy Program at the Migration Policy Institute. Undocumented immigration has also been notable, increased by political turmoil abroad and the draw of a comparatively strong and stable American economy.“We are seeing a sizable increase in immigration,” Ms. Gelatt said. “Certainly a rebound to the pre-Trump, prepandemic normal.”The recovery in documented immigration is clear in visa data. About 1.7 million workers may enter the country this year if current trends continue, about 950,000 more than at the low point during the pandemic, Courtney Shupert, an economist at MacroPolicy Perspectives, found in an analysis.In fact, immigration may be even stronger than before the pandemic, when policies by President Donald J. Trump reduced the number of foreigners entering the United States. The number of potential workers coming into the country on visas in May alone stood about 50,000 more than was normal from 2017 to 2019, she found.Weekender’s six cultural-exchange visa workers are spread across three of its seven properties, and are a small but important chunk of its 85-person work force.Amrita Stuetzle for The New York TimesImmigration is not the only potential source of new labor supply. Employment rates have been climbing across the board, with the share of disabled people and women between the ages of 25 to 54 who work reaching new highs, possibly bolstered by a shift to more remote work and more flexible hours that took place amid the pandemic.“It’s given us a supply of workers we haven’t had before, because workplaces are more flexible,” said Diane Swonk, chief economist at KPMG.The result has been helpful for businesses like the Weekender hotels in the Adirondacks. The firm’s six cultural-exchange visa workers are spread across three of its seven properties, said Keir Weimer, the founder of the company, and are a small but important chunk of its 85-person work force.The company has also been having an easier time competing for employees in general after a few years of adaptation. Mr. Weimer estimated that pay was up 10 to 15 percent over the past 15 months, but said wage growth was beginning to cool.“We’re starting to now get more defined on career-track progression and having wages tied to performance and promotion, rather than just market,” he said. “There’s definitely less wage pressure than there was a year ago.”Of course, new labor supply can also bolster demand: As more people work, they earn money and spend it, said Jason Furman, an economist at Harvard, counteracting any drag on inflation. That does not mean that improving labor supply is not helpful.“It is a way to have a higher pace of job growth without inflationary pressure,” he said.But even as employers and economists embrace a slowly normalizing labor market, the supply of workers faces a big headwind: an aging population. America is graying as baby boomers, a big generation, move into their retirement years, and older people are much less likely to work.That is why some officials at the Fed doubt that climbing labor supply can do a lot of the heavy lifting when it comes to rebalancing the labor market — a skepticism some economists share.“I think we will have a lack of supply, still,” said Yelena Shulyatyeva, senior economist at BNP Paribas. More

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    UPS Contract Talks Go Down to the Wire as a Possible Strike Looms

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    With the Teamsters contract set to expire Aug. 1, pay for part-time workers is a major hurdle. A walkout could rattle the U.S. economy.Barely a week before the contract for more than 325,000 United Parcel Service workers expires, union and company negotiators have yet to reach an agreement to avert a strike that could knock the American economy off stride.UPS and the union, the International Brotherhood of Teamsters, have resolved a variety of thorny issues, including heat safety and forced overtime. But they remain stalemated on pay for part-time workers, who account for more than half the union’s workers at UPS.A strike, which could come as soon as Aug. 1, could have significant consequences for the company, the e-commerce industry and the supply chain.UPS handles about one-quarter of the tens of millions of packages that are shipped daily in the United States, according to the Pitney Bowes Parcel Shipping Index. Experts have said competitors lack the scale to seamlessly replace that lost capacity.The Teamsters have cited the risks its members took to help generate the company’s strong pandemic-era performance as a reason that they deserve large raises. UPS’s adjusted net income rose more than 70 percent between 2019 and last year, to over $11 billion.The contract talks broke down on July 5 in vituperation. The two sides are to resume negotiations in the coming days, but the window for an agreement before the current five-year contract expires is tight.In a Facebook post this month, the union said the company’s latest offer would have “left behind” many part-timers, whose jobs include sorting packages and loading trucks. The post said part-timers earned “near-minimum wage in many parts of the country.”UPS, which says it relies heavily on part-timers to navigate bursts of activity over the course of a day and to ramp up its work force during busier months, said it had proposed significant wage increases before the talks broke down. According to the company, part-timers currently earn about $20 an hour on average after 30 days as well as paid time off, health care and pension benefits. The company noted that many part-timers graduated to jobs as full-time drivers, which pay $42 an hour on average after four years.The union has gone out of its way to highlight the challenges facing part-time workers. In television interviews and at rallies, the Teamsters president, Sean O’Brien, has emphasized what the union calls “part-time poverty” jobs. He has frequently been joined by leaders of other unions and politicians, including Representative Alexandria Ocasio-Cortez, the New York Democrat.UPS said Wednesday that it was “prepared to increase our industry-leading pay and benefits.” But it is unclear if the company will satisfy the union’s demands.“UPS certainly wants to reach an agreement, but not at the expense of its ability to compete long-term,” said Alan Amling, a former UPS executive and a fellow at the University of Tennessee’s Global Supply Chain Institute.Professor Amling estimated that it would cost the company $850 million per year to increase wages $5 an hour for all part-time employees represented by the Teamsters.The company, which normally reports its second-quarter earnings in late July, has delayed the report this year until after the strike deadline. UPS said that the timing was within the required window for reporting its earnings and that it had never published a date other than Aug. 8 for the coming release.The sometimes-volatile negotiations began in April, and the Teamsters announced in mid-June that their UPS members had voted, with a 97 percent majority, to authorize a strike.Less than two weeks later, the union said that it was walking away from the table over an “appalling counterproposal” from the company on raises and cost-of-living adjustments and that a strike “now appears inevitable.”The two sides resumed their discussions the week before the Fourth of July and soon resolved what was arguably their most contentious issue: a class of worker created under the existing contract.UPS said the arrangement was intended to allow workers to take on dual roles, like sorting packages some days and driving on other days — especially Saturdays — to keep up with growing demand for weekend delivery.UPS handles about one-quarter of the tens of millions of packages that are shipped daily in the United States.Maansi Srivastava/The New York TimesBut the Teamsters said that the hybrid idea hadn’t come to pass, and that in practice the new category of workers drove full time Tuesday through Saturday, only for less pay than other drivers. (The company said some employees did work under the hybrid arrangement.)Under the agreement reached this month, the lower-paid category would be eliminated and workers who drove Tuesday through Saturday would be converted to regular full-time drivers.That agreement also stipulated that no driver would be required to work an unscheduled sixth day in a week, which drivers had at times been forced to do to keep up with Saturday demand.Despite progress on these issues, Mr. O’Brien could face a delicate test persuading members to approve a deal if it falls short of the lofty expectations he helped set. He won the union’s top position in 2021 while regularly criticizing his immediate predecessor, James P. Hoffa, for being too accommodating toward employers.Mr. O’Brien argued that Mr. Hoffa had effectively forced UPS workers to accept a deeply flawed contract in 2018, even after they voted it down, and accused his rival in the race to succeed Mr. Hoffa of being reluctant to strike against the company.He began focusing members’ attention on the contract and a possible strike even before formally taking over as president in March last year, and has spoken in superlative terms about the union’s goals for a new contract.“This UPS agreement is going to be the defining moment in organized labor,” he told activists with Teamsters for a Democratic Union, a group that backed his candidacy, in a speech last fall.The union under Mr. O’Brien has held training sessions in recent months for strike captains and contract action team members, who rally co-workers to help pressure the company.And he has strongly urged the White House not to wade into the contract negotiation. In his Boston youth, “if two people had a disagreement, and you had nothing to do with it, you just kept walking,” he said during a recent webinar with members. “We echoed that to the White House on numerous occasions.” (Administration officials have said they are in touch with both sides.)In some ways the context for this year’s negotiations resembles the circumstances of the nationwide Teamsters strike at UPS in 1997. UPS was also in the midst of several profitable years, and the rapid growth in its part-time work force loomed large.Sean O’Brien, the Teamsters president, right, at the Los Angeles rally. He was elected in 2021 after criticizing his predecessor as having been too accommodating toward employers.Jenna Schoenefeld for The New York TimesBut while a reformist president, Ron Carey, had mobilized the union for a fight, its ranks appeared divided between his supporters and those of Mr. Hoffa, who had narrowly lost an election for the union’s presidency the year before. The union may have more leverage this time because its members appear far more unified under Mr. O’Brien.Barry Eidlin, a sociologist at McGill University in Montreal who studies labor and follows the Teamsters closely, said that while the ramp-up to the current contract fight had lagged in some parts of the country, where more conservative local officials are less enthusiastic, Mr. O’Brien had no serious opposition within the union.“Not everybody is a fan of O’Brien, but they’re not actively organizing to undermine him the way people were with Ron Carey in the ’90s,” Dr. Eidlin said. “It’s a huge, huge difference.”Still, for all his pugilistic statements, Mr. O’Brien remains an establishment figure who appears to prefer reaching a deal to going on strike, and he has subtly acted to make one less likely.Earlier in the negotiations, Mr. O’Brien had said that UPS employees wouldn’t work beyond Aug. 1 without a ratified contract, and that the two sides needed to reach a deal by July 5 to give members a chance to approve it in time. But last weekend he said UPS employees would continue working on Aug. 1 as long as the two sides had reached a tentative deal.“This isn’t a shift,” a Teamsters spokeswoman said Friday by email. “This is how you get a contract. Our pressure and deadline on UPS forced them to move in ways they hadn’t before.”Niraj Chokshi More

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    How TV Writing Became a Dead-End Job

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    The writers say Hollywood studios are increasingly limiting their roles in television productions, highlighting a trend for white-collar workers.For the six years he worked on “The Mentalist,” beginning in 2009, Jordan Harper’s job was far more than a writing gig. He and his colleagues in the writers’ room of the weekly CBS drama were heavily involved in production. They weighed in on costumes and props, lingered on the set, provided feedback to actors and directors. The job lasted most of a year.But by 2018, when he worked on “Hightown,” a drama for Starz, the business of television writing had changed substantially. The writers spent about 20 weeks cranking out scripts, at which point most of their contracts ended, leaving many to scramble for additional work. The job of overseeing the filming and editing fell largely to the showrunner, the writer-producer in charge of a series.“On a show like ‘The Mentalist,’ we’d all go to set,” Mr. Harper said. “Now the other writers are cut free. Only the showrunner and possibly one other writer are kept on board.”The separation between writing and production, increasingly common in the streaming era, is one issue at the heart of the strike begun in May by roughly 11,500 Hollywood writers. They say the new approach requires more frequent job changes, making their work less steady, and has lowered writers’ earnings. Mr. Harper estimated that his income was less than half what it was seven years ago.While their union, the Writers Guild of America, has sought guarantees that each show will employ a minimum number of writers through the production process, the major studios have said such proposals are “incompatible with the creative nature of our industry.” The Alliance of Motion Picture and Television Producers, which bargains on behalf of Hollywood studios, declined to comment further.SAG-AFTRA, the actors’ union that went on strike last week, said its members had also felt the effects of the streaming era. While many acting jobs had long been shorter than those of writers, the union’s executive director, Duncan Crabtree-Ireland, said studios’ “extreme level of efficiency management” had led shows to break roles into smaller chunks and compress character story lines.But Hollywood is far from the only industry to have presided over such changes, which reflect a longer-term pattern: the fracturing of work into “many smaller, more degraded, poorly paid jobs,” as the labor historian Jason Resnikoff has put it.In recent decades, the shift has affected highly trained white-collar workers as well. Large law firms have relatively fewer equity partners and more lawyers off the standard partner track, according to data from ALM, the legal media and intelligence company. Universities employ fewer tenured professors as a share of their faculty and more untenured instructors. Large tech companies hire relatively fewer engineers, while raising armies of temps and contractors to test software, label web pages and do low-level programming.Over time, said Dr. Resnikoff, an assistant professor at the University of Groningen in the Netherlands, “you get this tiered work force of prestige workers and lesser workers” — fewer officers, more grunts. The writers’ experience shows how destabilizing that change can be.The strategy of breaking up complex jobs into simpler, lower-paid tasks has roots in meatpacking and manufacturing. At the turn of the 20th century, automobiles were produced largely in artisanal fashion by small teams of highly skilled “all around” mechanics who helped assemble a variety of components and systems — ignition, axles, transmission.By 1914, Ford Motor had repeatedly divided and subdivided these jobs, spreading more than 150 men across a vast assembly line. The workers typically performed a few simple tasks over and over.For decades, making television shows was similar in some ways to the early days of automaking: A team of writers would be involved in all parts of the production. Many of those who wrote scripts were also on set, and they often helped edit and polish the show into its final form.The “all around” approach had multiple benefits, writers say. Not least: It improved the quality of the show. “You can write a voice in your head, but if you don’t hear it,” said Erica Weiss, a co-showrunner of the CBS series “The Red Line,” “you don’t actually know if it works.”Ms. Weiss said having her writers on the set allowed them to rework lines after the actors’ table read, or rewrite a scene if it was suddenly moved indoors.She and other writers and showrunners said the system also taught young writers how to oversee a show — essentially grooming apprentices to become the master craftspeople of their day.But it is increasingly rare for writers to be on set. As in manufacturing, the job of making television shows is being broken down into more discrete tasks.In most streaming shows, the writers’ contracts expire before the filming begins. And even many cable and network shows now seek to separate writing from production. “It was a good experience, but I didn’t get to go to set,” said Mae Smith, a writer on the final season of the Showtime series “Billions.” “There wasn’t money to pay for me to go, even for an established, seven-season show.”Showtime did not respond to a request for comment. Industry analysts point out that studios have felt a growing need to rein in spending amid the decline of traditional television and pressure from investors to focus on profitability over subscriber growth.In addition to the possible effect on a show’s quality, this shift has affected the livelihoods of writers, who end up working fewer weeks a year. Guild data shows that the typical writer on a network series worked 38 weeks during the season that ended last year, versus 24 weeks on a streaming series — and only 14 weeks if a show had yet to receive a go-ahead. About half of writers now work in streaming, for which almost no original content was made just over a decade ago.Members of the Writers Guild of America have been on strike since May.Mark Abramson for The New York TimesMany have seen their weekly pay dwindle as well. Chris Keyser, a co-chair of the Writers Guild’s negotiating committee, said studios had traditionally paid writers well above the minimum weekly rate negotiated by the union as compensation for their role as producers — that is, for creating a dramatic universe, not just completing narrow assignments.But as studios have severed writing from production, they have pushed writers’ pay closer to the weekly minimum, essentially rolling back compensation for producing. According to the guild, roughly half of writers were paid the weekly minimum rate last year — about $4,000 to $4,500 for a junior writer on a show that has received a go-ahead and about $7,250 for a more senior writer — up from one-third in 2014.Writers also receive residual payments — a type of royalty — when an episode they write is reused, as when it is licensed into syndication, but say opportunities for residuals have narrowed because streamers typically don’t license or sell their shows. The Alliance of Motion Picture and Television Producers said in its statement that the writers’ most recent contract had increased residual payments substantially.(Actors receive residuals, too, and say their pay has suffered in other ways: The streaming era creates longer gaps between seasons, during which regular characters aren’t paid but often can’t commit to other projects.)The combination of these changes has upended the writing profession. With writing jobs ending more quickly, even established writers must look for new ones more frequently, throwing them into competition with their less-experienced colleagues. And because more writing jobs pay the minimum, studios have a financial incentive to hire more-established writers over less-established ones, preventing their ascent.“They can get a highly experienced writer for the same price or just a little more,” said Mr. Harper, who considers himself fortunate to have enjoyed success in the industry.Writers also say studios have found ways to limit the duration of their jobs beyond walling them off from production.Many junior writers are hired for a writers’ room only to be “rolled off” before the room ends, leaving a smaller group to finish the season’s scripts, said Bianca Sams, who has worked on shows including the CBS series “Training Day” and the CW program “Charmed.”“If they have to pay you weekly, at a certain point it becomes expensive to keep people,” Ms. Sams said. (The wages of junior writers are tied more closely to weeks of work rather than episodes.)The studios have chafed at writers’ description of their work as “gig” jobs, saying that most are guaranteed a certain number of weeks or episodes, and that they receive substantial health and pension benefits.But many writers fear that the long-term trend is for studios to break up their jobs into ever-smaller pieces that are stitched together by a single showrunner — the way a project manager might knit together software from the work of a variety of programmers. Some worry that eventually writers may be asked to simply rewrite chatbot-generated drafts.“I think the endgame is creating material in the cheapest, most piecemeal, automated way possible,” said Zayd Dohrn, a Writers Guild member who oversees the screen and stage master’s degree program at Northwestern University, “and having one layer of high-level creatives take the cheaply generated material and turn it into something.”He added, “It’s the way coders write code — in the most drone-like way.” More

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    U.S. Recession Appears Less Likely, Economists Say

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    Rising interest rates were widely expected to put the U.S. economy in reverse. Now things are looking rosier, but don’t pop the Champagne corks yet.The recession was supposed to have begun by now.Last year, as policymakers relentlessly raised interest rates to combat the fastest inflation in decades, forecasters began talking as though a recession — economic contraction rather than growth — was a question not of “if” but of “when.” Possibly in 2022. Probably in the first half of 2023. Surely by the end of the year. As recently as December, less than a quarter of economists expected the United States to avoid a recession, a survey found.But the year is more than half over, and the recession is nowhere to be found. Not, certainly, in the job market, as the unemployment rate, at 3.6 percent, is hovering near a five-decade low. Not in consumer spending, which continues to grow, nor in corporate profits, which remain robust. Not even in the housing market, the industry that is usually most sensitive to rising interest rates, which has shown signs of stabilizing after slumping last year.At the same time, inflation has slowed significantly, and looks set to keep cooling — offering hope that interest-rate increases are nearing an end. All of which is leading economists, after a year spent being surprised by the resilience of the recovery, to wonder whether a recession is coming at all.“The chances of a soft landing are higher — there’s no question about that,” said Diane Swonk, chief economist at KPMG US, referring to the possibility of bringing down inflation without causing an economic downturn. “I’m more optimistic than I was six months ago: That’s the good news.”The public is feeling sunnier, too, though hardly ebullient. Measures of consumer confidence have picked up recently, although surveys show that most Americans still expect a recession, or believe the country is already in one.There is still plenty that could go wrong, which Ms. Swonk noted. Inflation could, again, prove more stubborn than expected, leading the Federal Reserve to press on with interest rate increases to curb it. Or, on the flip side, the steps the Fed has already taken could hit with a delay, sharply cooling the economy in a way that has not surfaced yet. And even a slowdown short of a recession could be painful, leading to layoffs that are likely to disproportionately hit Black and Hispanic workers.“Soft is in the eye of the beholder,” said Nick Bunker, director of North American economic research at the career site Indeed.Economists are wary of declaring victory prematurely — burned, perhaps, by past episodes in which they did just that. In early 2008, for example, a string of positive economic data led some forecasters to conclude that the United States had navigated the subprime mortgage crisis without falling into a recession; researchers later concluded that one had already begun.But for now, at least, talk of worst-case scenarios — runaway inflation that the Fed struggles to tame, or “stagflation” in which prices and unemployment rise in tandem — has been ceding the conversation to cautious optimism.“We have seen a huge string of shocks, so I can’t predict what the future will hold,” Lael Brainard, a top White House economic adviser, said in an interview last week. “But so far, the data is very much consistent with moderating inflation and a still-resilient job market.”Inflation has come down.Economists have become more optimistic for two main reasons.The first is inflation itself, which has cooled rapidly in recent months. The Consumer Price Index in June was up just 3 percent from a year earlier, compared with a peak of 9 percent last summer. That is partly a result of factors that are unlikely to repeat — no one expects oil prices to keep falling 30 percent per year, for example.But measures of underlying inflation have also shown significant progress. And consumers and businesses appear to expect price increases to return to normal over the next few years, which makes it less likely that inflation will become embedded in the economy.Cooling inflation could allow the Fed to continue to slow its campaign of interest rate increases, or perhaps even to stop raising rates altogether earlier than planned. That could reduce the chances that policymakers go too far in their effort to control inflation and cause a recession by mistake.“Things have been going in the direction you would need them to go in order for you to get a soft landing,” said Louise Sheiner, a former Fed economist who is now at the Brookings Institution. “It doesn’t mean you’re guaranteed to get it, but certainly it’s more likely than if inflation was still 7 percent.”The job market has been resilient.The second reason for optimism has been the gradual cooling of the labor market from a rolling boil to a strong simmer.The rapid reopening of the economy in 2021 led to a huge imbalance between supply and demand: Restaurants, hotels, airlines and other businesses suddenly had hundreds of thousand of jobs to fill and not enough people to fill them. For workers, it was a rare moment of leverage, resulting in the fastest wage growth in decades. But economists worried that those rapid gains could make it hard to get inflation under control.In recent months, however, the frenzy has subsided. Employers are not posting as many openings. Employees are not hopping from job to job as freely in search of higher pay. At the same time, millions of workers have joined or rejoined the work force, helping to ease the labor shortage.So far, however, that easing has happened without a significant increase in unemployment. The jobless rate is roughly where it was in the strong labor market that preceded the pandemic. Some industries, such as tech and finance, have laid off employees, but most of those workers have found other jobs relatively quickly.“Labor market overheating is diminishing substantially, to levels where it’s no longer so worrisome,” said Jan Hatzius, chief economist for Goldman Sachs.Mr. Hatzius, who has long been more optimistic about the prospects for a soft landing than many of his peers on Wall Street, on Monday lowered his estimated probability of a recession to 20 percent from 25 percent. He said the recent progress in inflation and the labor market — as well as in consumer spending and other areas — suggested that the economy was gradually moving past the disruptions of the past few years.“We’re seeing the other side of the pandemic,” he said. “The pandemic created all of this enormous turbulence in economies, and now I think it’s going away, and to me that’s the overriding theme.”Risks remain.Still, many economists are less sanguine. Inflation, at least excluding volatile food and energy prices, remains well above the Fed’s 2 percent annual target, at 4.8 percent in June. And although the progress on inflation so far may have been relatively painless, there is no guarantee that will continue — employers that initially responded to higher interest rates by hiring fewer workers may soon begin cutting jobs outright.“People taking victory laps declaring a soft landing I think are premature,” said Laurence M. Ball, a Johns Hopkins economist who last year wrote an influential paper concluding that it would be difficult for the Fed to get inflation back to 2 percent without a significant increase in unemployment.Part of the problem is that the Fed has little margin for error. Act too aggressively to tame inflation, and the central bank could push the economy into a recession. Do too little, and inflation could pick back up — forcing policymakers to clamp back down.Neil Dutta, head of economic research at Renaissance Macro, said he worried that the strong labor market would fuel a new acceleration in the economy, leading to a resumption of rapid price increases — an “inflationary boom” that reverses much of the recent progress.“The next three to six months, the inflation dynamics will look pretty good — it will feel like a soft landing,” he added. “The question is, what comes after?”Then there are the factors outside policymakers’ control. Oil prices, which soared last year when Russia invaded Ukraine, could do so again. Food prices could start rising again, too — a possibility that became more real this week when Russia canceled a deal to allow Ukraine to export grain on the Black Sea.With the economy already slowing, even relatively small developments — such as the looming resumption of student loan payments, which will strain the finances of many younger adults in particular — could be enough to knock the recovery off course, said Jay Bryson, chief economist for Wells Fargo.“The student loan thing is not, in and of itself, enough to cause a recession, but if you do have a downturn, it could be a kind of death by a thousand paper cuts,” he said.Mr. Bryson still expects a recession to start this year. But he has become less certain in recent months. He recently asked the nearly 20 people on his team to write down how likely they thought a recession was in the next year. Answers ranged from 30 percent to 65 percent, with an average of exactly 50 percent — coin-flip odds for a soft landing that many people once thought impossible.“Keep the Champagne on ice,” Mr. Bryson said. “Hopefully early next year we can start popping it.” More

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    The Pandemic’s Job Market Myths

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    Remember the “she-cession”? What about the early-retirement wave, or America’s army of quiet quitters?For economists and other forecasters, the pandemic and postpandemic economy has been a lesson in humility. Time and again, predictions about ways in which the labor market had been permanently changed have proved temporary or even illusory.Women lost jobs early in the pandemic but have returned in record numbers, making the she-cession a short-lived phenomenon. Retirements spiked along with coronavirus deaths, but many older workers have come back to the job market. Even the person credited with provoking a national conversation by posting a TikTok video about doing the bare minimum at your job has suggested that “quiet quitting” may not be the way of the future — he’s into quitting out loud these days.That is not to say nothing has changed. In a historically strong labor market with very low unemployment, workers have a lot more power than is typical, so they are winning better wages and new perks. And a shift toward working from home for many white-collar jobs is still reshaping the economy in subtle but important ways.But the big takeaway from the pandemic recovery is simple: The U.S. labor market was not permanently worsened by the hit it suffered. It echoes the aftermath of the 2008 recession, when economists were similarly skeptical of the labor market’s ability to bounce back — and similarly proved wrong once the economy strengthened.“The profession has not fully digested the lessons of the recovery from the Great Recession,” said Adam Ozimek, the chief economist at the Economic Innovation Group, a research organization in Washington. One of those lessons, he said: “Don’t bet against the U.S. worker.”Here is a rundown of the labor market narratives that rose and fell over the course of the pandemic recovery.True but Over: The ‘She-cession’Women lost jobs heavily early in the pandemic, and people fretted that they would be left lastingly worse off in the labor market — but that has not proved to be the case.

    Note: Data is as of June 2023 and is seasonally adjusted.Source: Bureau of Labor StatisticsBy The New York TimesIn the wake of the pandemic, employment has actually rebounded faster among women than among men — so much so that, as of June, the employment rate for women in their prime working years, commonly defined as 25 to 54, was the highest on record. (Employment among prime-age men is back to where it was before the pandemic, but is still shy of a record.)Gone: Early RetirementsAnother frequent narrative early in the pandemic: It would cause a wave of early retirements.Historically, when people lose jobs or leave them late in their working lives, they tend not to return to work — effectively retiring, whether or not they label it that way. So when millions of Americans in their 50s and 60s left the labor force early in the pandemic, many economists were skeptical that they would ever come back.

    Notes: Percentages compare June 2023 with the 2019 average. Data is seasonally adjusted.Source: Bureau of Labor StatisticsBy The New York TimesBut the early retirement wave never really materialized. Americans between ages 55 and 64 returned to work just as fast as their younger peers and are now employed at a higher rate than before the pandemic. Some may have been forced back to work by inflation; others had always planned to return and did so as soon as it felt safe.The retirement narrative wasn’t entirely wrong. Americans who are past traditional retirement age — 65 and older — still haven’t come back to work in large numbers. That is helping to depress the size of the overall labor force, especially because the number of Americans in their 60s and 70s is growing rapidly as more baby boomers hit their retirement years.Questionable: The White-Collar RecessionTechnology layoffs at big companies have prompted discussion of a white-collar recession, or one that primarily affects well-heeled technology and information-sector workers. While those firings have undoubtedly been painful for those who experienced them, it has not shown up prominently in overall employment data.

    Note: Data is seasonally adjusted.Source: Bureau of Labor StatisticsBy The New York TimesFor now, the nation’s high-skilled employees seem to be shuffling into new and different jobs pretty rapidly. Unemployment remains very low both for information and for professional and business services — hallmark white-collar industries that encompass much of the technology sector. And layoffs in tech have slowed recently.Nuanced: The Missing MenIt looked for a moment like young and middle-aged men — those between about 25 and 44 — were not coming back to the labor market the way other demographics had been. Over the past few months, though, they have finally been regaining their employment rates before the pandemic.That recovery came much later than for some other groups: For instance, 35-to-44-year-old men have yet to consistently hold on to employment rates that match their 2019 average, while last year women in that age group eclipsed their employment rate before the pandemic. But the recent progress suggests that even if men are taking longer to recover, they are slowly making gains.False (Again): The Labor Market Won’t Fully Bounce BackAll these narratives share a common thread: While some cautioned against drawing early conclusions, many labor market experts were skeptical that the job market would fully recover from the shock of the pandemic, at least in the short term. Instead, the rebound has been swift and broad, defying gloomy narratives.This isn’t the first time economists have made this mistake. It’s not even the first time this century. The crippling recession that ended in 2009 pushed millions of Americans out of the labor force, and many economists embraced so-called structural explanations for why they were slow to return. Maybe workers’ skills or professional networks had eroded during their long periods of unemployment. Maybe they were addicted to opioids, or drawing disability benefits, or trapped in parts of the country with few job opportunities.In the end, though, a much simpler explanation proved correct. People were slow to return to work because there weren’t enough jobs for them. As the economy healed and opportunities improved, employment rebounded among pretty much every demographic group.The rebound from the pandemic recession has played out much faster than the one that took place after the 2008 downturn, which was worsened by a global financial blowup and a housing market collapse that left long-lasting scars. But the basic lesson is the same. When jobs are plentiful, most people will go to work.“People want to adapt, and people want to work: Those things are generally true,” said Julia Coronado, the founder of MacroPolicy Perspectives, a research firm. She noted that the pool of available workers expanded further with time and amid solid immigration. “People are resilient. They figure things out.” More

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    ‘Training My Replacement’: Inside a Call Center Worker’s Battle With A.I.

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    To many people, chatbots and other technology feel like a ticking time bomb, sure to explode their work. But to some, the threat is already here.“This A.I. stuff is getting really crazy.”The voices of Charlamagne tha God, host of the nationally syndicated radio show “The Breakfast Club,” and his guests Mandii B and WeezyWTF filled Ylonda Sherrod’s car as she sped down Interstate 10 in Mississippi during her daily commute. Her favorite radio show was discussing artificial intelligence, specifically an A.I.-generated sample of Biggie.“Sonically, it sounds cool,” Charlamagne tha God said. “But it lacks soul.”WeezyWTF replied: “I’ve had people ask me like, ‘Oh, would you replace people that work for you with A.I.?’ I’m like, ‘No, dude.’”Ms. Sherrod nodded along emphatically, as she drove past low-slung brick homes and strip malls dotted with Waffle Houses. She arrived at the AT&T call center where she works, feeling unsettled. She played the radio exchange about A.I. for a colleague.“Yeah, that’s crazy,” Ms. Sherrod’s friend replied. “What do you think about us?”Like so many millions of American workers, across so many thousands of workplaces, the roughly 230 customer service representatives at AT&T’s call center in Ocean Springs, Miss., watched artificial intelligence arrive over the past year both rapidly and assuredly, like a new manager settling in and kicking up its feet.Suddenly, the customer service workers weren’t taking their own notes during calls with customers. Instead, an A.I. tool generated a transcript, which their managers could later consult. A.I. technology was providing suggestions of what to tell customers. Customers were also spending time on phone lines with automated systems, which solved simple questions and passed on the complicated ones to human representatives.Ms. Sherrod, 38, who exudes quiet confidence at 5-foot-11, regarded the new technology with a combination of irritation and fear. “I always had a question in the back of my mind,” she said. “Am I training my replacement?”Ms. Sherrod, a vice president of the call center’s local union chapter, part of the Communications Workers of America, started asking AT&T managers questions. “If we don’t talk about this, it could jeopardize my family,” she said. “Will I be jobless?”In recent months, the A.I. chatbot ChatGPT has made its way into courtrooms, classrooms, hospitals and everywhere in between. With it has come speculation about A.I.’s impact on jobs. To many people, A.I. feels like a ticking time bomb, sure to explode their work. But to some, like Ms. Sherrod, the threat of A.I. isn’t abstract. They can already feel its effects.When automation swallows up jobs, it often comes for customer service roles first, which make up about three million jobs in America. Automation tends to overtake tasks that repeat themselves; customer service, already a major site for outsourcing of jobs abroad, can be a prime candidate.The AT&T call center where Ms. Sherrod works, in Ocean Springs, Miss. The company has increasingly been integrating A.I. into many parts of its customer service work.Bryan Tarnowski for The New York TimesA majority of U.S. call center workers surveyed this year reported that their employers were automating some of their work, according to a 2,000-person survey from researchers at Cornell. Nearly two-thirds of respondents said they felt it was somewhat or very likely that increased use of bots would lead to layoffs within the next two years.Technology executives point out that fears of automation are centuries old — stretching back to the Luddites, who smashed and burned textile machines — but have historically been undercut by a reality in which automation creates more jobs than it eliminates.But that job creation happens gradually. The new jobs that technology creates, like engineering roles, often demand complex skills. That can create a gap for workers like Ms. Sherrod, who found what seemed like a golden ticket at AT&T: a job that pays $21.87 an hour and up to $3,000 in commissions a month, she said, and provides health care and five weeks of vacation — all without the requirement of a college degree. (Less than 5 percent of AT&T’s roles require a college education.)Customer service, to Ms. Sherrod, meant that someone like her — a young Black woman raised by her grandmother in small-town Mississippi — could make “a really good living.”“We’re breaking generational curses,” Ms. Sherrod said. “That’s for sure.”In Ms. Sherrod’s childhood home, a one-story, brick A-frame in Pascagoula, money was tight. Her mother died when she was 5. Her grandmother, who took her in, didn’t work, but Ms. Sherrod remembers getting food stamps to take to the corner bakery whenever the family could spare them. Ms. Sherrod cries recalling how Christmas used to be. The family had a plastic tree and tried to make it festive with ornaments, but there was typically no money for presents.To students at Pascagoula High School, she recalled, job opportunities seemed limited. Many went to Ingalls Shipbuilding, a shipyard where work meant blistering days under the Mississippi sun. Others went to the local Chevron refinery.“It felt like I was going to always have to do hard labor in order to make a living,” Ms. Sherrod said. “It seemed like my lifestyle would never be something with ease, something I enjoyed.”When Ms. Sherrod was 16, she worked at KFC, making $6.50 an hour. After graduating from high school, and dropping out of community college, she moved to Biloxi, Miss., to work as a maid at IP Casino, a 32-story hotel, where her sister still works. Within months of working at the casino, Ms. Sherrod felt the toll of the job on her body. Her knees ached, and her back thrummed with pain. She had to clean at least 16 rooms a day, fishing hair out of bathroom drains and rolling up dirty sheets.When a friend told her about the jobs at AT&T, the opportunity seemed, to Ms. Sherrod, impossibly good. The call center was air-conditioned. She could sit all day and rest her knees. She took the call center’s application test twice, and on her second time she got an offer, in 2006, starting out making $9.41 an hour, up from around $7.75 at the casino.“That $9 meant so much to me,” she recalled.So did AT&T, a place where she kept growing more comfortable: “Out of 17 years, my check hasn’t ever been wrong,” she said. “AT&T, by far, is the best job in the area.”‘Your Biggest Nightmare’Sam Altman, the chief executive of OpenAI, testified before a Senate subcommittee in May. In recent months, OpenAI’s ChatGPT chatbot has made its way into courtrooms.Win McNamee/Getty ImagesThis spring, lawmakers in Washington hauled forward the makers of A.I. tools to begin discussing the risks posed by the products they’ve unleashed.“Let me ask you what your biggest nightmare is,” Senator Richard Blumenthal, Democrat of Connecticut, asked OpenAI’s chief executive, Sam Altman, after sharing that his own greatest fear was job loss.“There will be an impact on jobs,” said Mr. Altman, whose company developed ChatGPT.That reality has already become clear. The British telecommunications company BT Group announced in May that it would cut up to 55,000 jobs by 2030 as it increasingly relied on A.I. The chief executive of IBM said A.I. would affect certain clerical jobs in the company, eliminating the need for up to 30 percent of some roles, while creating new ones.AT&T has begun integrating A.I. into many parts of its customer service work, including routing customers to agents, offering suggestions for technical solutions during customer calls and producing transcripts. The company said all of these uses were intended to create a better experience for customers and workers. “We’re really trying to focus on using A.I. to augment and assist our employees,” said Nicole Rafferty, who leads AT&T’s customer care operation and works with staff members nationwide.“We’re always going to need in-person engagement to solve those complex customer situations,” Ms. Rafferty added. “That’s why we’re so focused on building A.I. that supports our employees.”Economists studying A.I. have argued that it most likely won’t prompt sudden widespread layoffs. Instead, it could gradually eliminate the need for humans to do certain tasks — and make the remaining work more challenging.“The tasks left to call center workers are the most complex ones, and customers are frustrated,” said Virginia Doellgast, a professor at the New York State School of Industrial and Labor Relations at Cornell.Ms. Sherrod has always enjoyed getting to know her customers. She said she took about 20 calls a day, from 9:30 to 6:30. While she’s resolving technical issues, she listens to why people are calling in, and she hears from customers who just bought new homes, were married or lost family members.“It’s sort of like you’re a therapist,” she said. “They tell you their life stories.”She is already finding her job growing more challenging with A.I. The automated technology has a hard time understanding Ms. Sherrod’s drawl, she said, so the transcripts from her calls are full of mistakes. Once the technology is no longer in a pilot phase, she won’t be able to make corrections. (AT&T said it was refining the A.I. products it used to prevent these kinds of errors.)It seems likely, to Ms. Sherrod, that at some point as the work gets more efficient, the company won’t need quite as many humans answering calls in its centers. Ms. Sherrod wonders, too: Doesn’t the company trust her? For two consecutive years, she won AT&T’s Summit Award, placing her in the top 3 percent of the company’s customer service representatives nationally. Her name was projected on the call center’s wall.“They gave everyone a little gift bag with a trophy,” Ms. Sherrod recalled. “That meant a lot to me.”‘Look at My Life’Ms. Sherrod at the Communications Workers of America’s regional labor union office where she is a vice president.Bryan Tarnowski for The New York TimesAs companies like AT&T embrace A.I., experts are floating proposals meant to protect workers. There’s the possibility of training programs helping people make the transition to new jobs, or a displacement tax levied on employers when a worker’s job is automated but the person is not retrained.Labor unions are wading into these battles. In Hollywood, the unions representing actors and television writers have fought to limit the use of A.I. in script writing and production.Just 6 percent of the country’s private-sector workers are represented by unions. Ms. Sherrod is one, and she has begun fighting her company for more information about its A.I. plans, sitting in her union hall nine miles from the call center, where she works under a Norman Rockwell painting of a wireline technician.For years, Ms. Sherrod’s demands on behalf of the union have been rote. As a steward, she typically asked the company to reduce penalties for colleagues who got in trouble.But for the first time, this summer, she feels that she is taking up an issue that will affect workers beyond AT&T. She recently asked her union to establish a task force focused on A.I.In late May, Ms. Sherrod was invited by the Communications Workers of America to travel to Washington, where she and dozens of other workers met with the White House’s Office of Public Engagement to share their experience with A.I.A warehouse worker described being monitored with A.I. that tracked how speedily he moved packages, creating pressure for him to skip breaks. A delivery driver said automated surveillance technologies were being used to monitor workers and look for potential disciplinary actions, even though their records weren’t reliable. Ms. Sherrod described how the A.I. in her call center created inaccurate summaries of her work.Her son, Malik, was astonished to hear that his mother was headed to the White House. “When my dad told me about it, at first I said, ‘You’re lying,’” he said with a laugh. With her pay and commissions, Ms. Sherrod has been able to buy a home and give her son, Malik, the childhood she never had.Bryan Tarnowski for The New York TimesMs. Sherrod sometimes feels that her life presents an argument for a type of job that one day might no longer exist.With her pay and commissions, she has been able to buy a home. She lives on a sunny street full of families, some of whom work in fields like nursing and accounting. She is down the road from a softball field and playground. On the weekends, her neighbors gather for cookouts. The adults eat snowballs, while the children play basketball and set up splash pads.Ms. Sherrod takes pride in buying Malik anything he asks for. She wants to give him the childhood she never had.“Call center work — it’s life-changing,” she said. “Look at my life. Will all that be taken away from me?” More

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    Jerome Powell’s Prized Labor Market Is Back. Can He Keep It?

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    The Federal Reserve chair spent the early pandemic bemoaning the loss of a strong job market. It roared back — and now its fate is in his hands.Jerome H. Powell, the chair of the Federal Reserve, spent the early pandemic lamenting something America had lost: a job market so historically strong that it was boosting marginalized groups, extending opportunities to people and communities that had long lived without them.“We’re so eager to get back to the economy, get back to a tight labor market with low unemployment, high labor-force participation, rising wages — all of the virtuous factors that we had as recently as last winter,” Mr. Powell said in an NPR interview in September 2020.The Fed chair has gotten that wish. The labor market has recovered by nearly every major measure, and the employment rate for people in their most active working years has eclipsed its 2019 high, reaching a level last seen in April 2001.Yet one of the biggest risks to that strong rebound has been Mr. Powell’s Fed itself. Economists have spent months predicting that workers will not be able to hang on to all their recent labor market gains because the Fed has been aggressively attacking rapid inflation. The central bank has raised interest rates sharply to cool off the economy and the job market, a campaign that many economists have predicted could push unemployment higher and even plunge America into a recession.But now a tantalizing possibility is emerging: Can America both tame inflation and keep its labor market gains?Data last week showed that price increases are beginning to moderate in earnest, and that trend is expected to continue in the months ahead. The long-awaited cool-down has happened even as unemployment has remained at rock bottom and hiring has remained healthy. The combination is raising the prospect — still not guaranteed — that Mr. Powell’s central bank could pull off a soft landing, in which workers largely keep their jobs and growth chugs along slowly even as inflation returns to normal.“There are meaningful reasons for why inflation is coming down, and why we should expect to see it come down further,” said Julia Pollak, chief economist at ZipRecruiter. “Many economists argue that the last mile of inflation reduction will be the hardest, but that isn’t necessarily the case.”Inflation has plummeted to 3 percent, just a third of its 9.1 percent peak last summer. While an index that strips out volatile products to give a cleaner sense of the underlying trend in inflation remains more elevated at 4.8 percent, it, too, is showing notable signs of coming down — and the reasons for that moderation seem potentially sustainable.Housing costs are slowing in inflation measures, something that economists have expected for months and that they widely predict will continue. New and used car prices are cooling as demand wanes and inventories on dealer lots improve, allowing goods prices to moderate. And even services inflation has cooled somewhat, though some of that owed to a slowdown in airfares that may look less significant in coming months.All of those positive trends could make the road to a soft landing — one Mr. Powell has called “a narrow path” — a bit wider.For the Fed, the nascent cool-down could mean that it isn’t necessary to raise rates so much this year. Central bankers are poised to lift borrowing costs at their July meeting next week, and had forecast another rate increase before the end of the year. But if inflation continues to moderate for the next few months, it could allow them to delay or even nix that move, while indicating that further increases could be warranted if inflation picked back up — a signal economists sometimes call a “tightening bias.”Christopher Waller, one of the Fed’s most inflation-focused members, suggested last week that while he might favor raising interest rates again at the Fed meeting in September if inflation data came in hot, he could change his mind if two upcoming inflation reports demonstrated progress toward slower price increases.“If they look like the last two, the data would suggest maybe stopping,” Mr. Waller said.Interest rates are already elevated — they’ll be in a range of 5.25 to 5.5 percent if raised as expected on July 26, the highest level in 16 years. Holding them steady will continue to weigh on the economy, discouraging home buyers, car shoppers or businesses hoping to expand on borrowed money.Since 2020, the labor market has rebounded by nearly every major measure.Jamie Kelter Davis for The New York TimesSo far, though, the economy has shown a surprising ability to absorb higher interest rates without cracking. Consumer spending has slowed, but it has not plummeted. The rate-sensitive housing market cooled sharply initially as mortgage rates shot up, but it has recently shown signs of bottoming out. And the labor market just keeps chugging.Some economists think that with so much momentum, fully stamping out inflation will prove difficult. Wage growth is hovering around 4.4 percent by one popular measure, well above the 2 to 3 percent that was normal in the years before the pandemic.With pay climbing so swiftly, the logic goes, companies will try to charge more to protect their profits. Consumers who are earning more will have the wherewithal to pay up, keeping inflation hotter than normal.“If the economy doesn’t cool down, companies will need to bake into their business plans bigger wage increases,” said Kokou Agbo-Bloua, a global research leader at Société Générale. “It’s not a question of if unemployment needs to go up — it’s a question of how high unemployment should go for inflation to return to 2 percent.”Yet economists within the Fed itself have raised the possibility that unemployment may not need to rise much at all to lower inflation. There are a lot of job openings across the economy at the moment, and wage and price growth may be able to slow as those decline, a Fed Board economist and Mr. Waller argued in a paper last summer.While unemployment could creep higher, the paper argued, it might not rise much: perhaps one percentage point or less.So far, that prediction is playing out. Job openings have dropped. Immigration and higher labor force participation have improved the supply of workers in the economy. As balance has come back, wage growth has cooled. Unemployment, in the meantime, is hovering at a similar level to where it was when the Fed began to raise interest rates 16 months ago.A big question is whether the Fed will feel the need to raise interest rates further in a world with pay gains that — while slowing — remain notably faster than before the pandemic. It could be that they do not.“Wage growth often follows inflation, so it’s really hard to say that wage growth is going to lead inflation down,” Mary C. Daly, president of the Federal Reserve Bank of San Francisco, said during a CNBC interview last week.Risks to the outlook still loom, of course. The economy could still slow more sharply as the effects of higher interest rates add up, cutting into growth and hiring.Consumer spending has slowed, but it has not plummeted — a signal that the economy is absorbing higher interest rates without cracking.Amir Hamja/The New York TimesInflation could come roaring back because of an escalation of the war in Ukraine or some other unexpected development, prodding central bankers to do more to ensure that price increases come under control quickly. Or price increases could simply prove painfully stubborn.“One data point does not make a trend,” Mr. Waller said last week. “Inflation briefly slowed in the summer of 2021 before getting much worse.”But if price increases do keep slowing — maybe to below 3 percent, some economists speculated — officials might increasingly weigh the cost of getting price increases down against their other big goal: fostering a strong job market.The Fed’s tasks are both price stability and maximum employment, what is called its “dual mandate.” When one goal is really out of whack, it takes precedence, based on the way the Fed approaches policy. But once they are both close to target, pursuing the two is a balancing act.“I think we need to get a 2-handle on core inflation before they’re ready to put the dual mandates beside each other,” said Julia Coronado, an economist at MacroPolicy Perspectives. Forecasters in a Bloomberg survey expect that measure of inflation to fall below 3 percent — what economists call a “2-handle” — in the spring of 2024.The Fed may be able to walk that tightrope to a soft landing, retaining a labor market that has benefited a range of people — from those with disabilities to teenagers to Black and Hispanic adults.Mr. Powell has regularly said that “without price stability, we will not achieve a sustained period of strong labor market conditions that benefit all,” explaining why the Fed might need to harm his prized job market.But at his June news conference, he sounded a bit more hopeful — and since then, there has been evidence to bolster that optimism.“The labor market, I think, has surprised many, if not all, analysts over the last couple of years with its extraordinary resilience,” Mr. Powell said. More

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    Amazon Union Group, Challenging Christian Smalls, Seeks Vote

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    A split over the stewardship of the union’s high-profile president, Christian Smalls, has led a rival faction to file a lawsuit seeking an election.A dissident group within the Amazon Labor Union, the only certified union in the country representing Amazon employees, filed a complaint in federal court Monday seeking to force the union to hold a leadership election.The union won an election at a Staten Island warehouse with more than 8,000 employees in April 2022, but Amazon has challenged the result and has yet to begin bargaining on a contract.The rise of the dissident group, which calls itself the A.L.U. Democratic Reform Caucus and includes a co-founder and former treasurer of the union, reflects a growing split within the union that appears to have undermined its ability to pressure Amazon. The split has also threatened to sap the broader labor movement of the momentum generated by last year’s high-profile victory.In its complaint, the reform caucus argues that the union and its president, Christian Smalls, illegally “refuse to hold officer elections which should have been scheduled no later than March 2023.”The complaint asks a federal judge to schedule an election of the union’s top officers for no later than Aug. 30 and to appoint a neutral monitor to oversee the election.Mr. Smalls said in a text message Monday that the complaint was “a ridiculous claim with zero facts or merit,” and a law firm representing the union said it would seek legal sanctions against the reform group’s lawyer if the complaint was filed.The complaint states that under an earlier version of the union’s constitution, a leadership election was required within 60 days of the National Labor Relations Board’s certification of its victory.But in December, the month before the labor board certification, the union’s leadership presented a new constitution to the membership that scheduled elections after the union ratifies a contract with Amazon — an accomplishment that could take years, if it happens at all.On Friday, the reform caucus sent the union’s leadership a letter laying out its proposal to hold prompt elections, saying it would go to court Monday if the leadership didn’t embrace the proposal.The reform group is made of up more than 40 active organizers who are also plaintiffs in the legal complaint, including Connor Spence, a union co-founder and former treasurer; Brett Daniels, the union’s former organizing director; and Brima Sylla, a prominent organizer at the Staten Island warehouse.The group said in its letter that enacting the proposal could “mean the difference between an A.L.U. which is strong, effective, and a beacon of democracy in the labor movement” and “an A.L.U. which, in the end, became exactly what Amazon warned workers it would become: a business that takes away the workers’ voices.”Mr. Smalls said in his text that the union leadership had worked closely with its law firm to ensure that its actions were legal, as well as with the U.S. Labor Department.Jeanne Mirer, a lawyer for the union, wrote to a lawyer for the reform caucus that the lawsuit was frivolous and based on falsehoods. She said that Mr. Spence had “improperly and unilaterally” replaced the union’s founding constitution with a revised version in June 2022, and that the revision, which called for elections after certification, had never been formally adopted by the union’s board.Retu Singla, another lawyer for the union, said in an interview that the constitution was never made final because there were disagreements about it within the union’s leadership.Mr. Spence said he and other members of the union’s board had revised the constitution while consulting extensively with the union’s lawyers. A second union official involved in the discussions corroborated his account.The split within the union dates from last fall, when several longtime Amazon Labor Union organizers became frustrated with Mr. Smalls after a lopsided loss in a union election at an Amazon warehouse near Albany, N.Y.In a meeting shortly after the election, organizers argued that control of the union rested in too few hands and that the leadership should be elected, giving rank-and-file workers more input.The skeptics also complained that Mr. Smalls was committing the union to elections without a plan for how to win them, and that the union needed a better process for determining which organizing efforts to support. Many organizers worried that Mr. Smalls spent too much time traveling the country to make public appearances rather than focus on the contract fight on Staten Island.Mr. Smalls later said in an interview that his travel was necessary to help raise money for the union and that the critics’ preferred approach — building up worker support for a potential strike that could bring Amazon to the bargaining table — was counterproductive because it could alarm workers who feared losing their livelihoods.He said a worker-led movement shouldn’t turn its back on workers at other warehouses if they sought to unionize. A top union official hired by Mr. Smalls also argued that holding an election before the union had a more systematic way of reaching out to workers would be undemocratic because only the most committed activists would vote.When Mr. Smalls unveiled the new union constitution in December, scheduling elections after a contract was ratified, many of the skeptics walked out. The two factions have operated independently this year, with both sides holding regular meetings with members.In April, the reform caucus began circulating a petition among workers at the Staten Island warehouse calling on the leadership to amend the constitution and hold prompt elections. The petition has been signed by hundreds of workers at the facility.The petition soon became a point of tension with Mr. Smalls. In an exchange with a member of the reform caucus on WhatsApp in early May, copies of which are included in Monday’s legal complaint, Mr. Smalls said the union would “take legal action against you” if the caucus did not abandon the petition.The tensions appeared to ease later that month after the union leadership under Mr. Smalls proposed that the two sides enter mediation. The reform caucus accepted the invitation and suspended the petition campaign.But according to a memo that the mediator, Bill Fletcher Jr., sent both sides on June 29 and that was viewed by The New York Times, the union leadership backed out of the mediation process on June 18 without explanation.“I am concerned that the apparent turmoil within the ALU E. Board means that little is being done to organize the workers and prepare for the battle with Amazon,” Mr. Fletcher wrote in the memo, referring to the union’s executive board. “This situation seriously weakens support among the workers.”Colin Moynihan More