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    If the Job Market Is So Good, Why Is Gig Work Thriving?

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    Conventional employment opportunities abound, but online platforms still have appeal — for flexibility or additional income.American workers are experiencing, by many measures, one of the best job markets ever. The unemployment rate has matched a 53-year low. Job listings per available worker are at historic highs. Wages, while not quite keeping up with inflation, are rising at their fastest pace in decades.So why would people keep doing gig work, a notoriously difficult and insecure way to make a living?Online platforms like Uber and Lyft say the number of people providing services on their networks is rebounding steadily after a sharp decline early in the pandemic, while businesses like hotels and restaurants are breaking work into hour-by-hour increments available on demand.Picking up shifts offers something that traditional permanent employment still generally doesn’t: the ability to work when and as much as you want, demand permitting, which is often essential to balance life obligations like school or child care.And lately, inflation has provided an extra incentive. As the cost of rent and food soars, gig work can supplement primary jobs that don’t provide enough to live on or are otherwise unsatisfying.Lexi Gervis, an executive at a financial management app called Steady, said that users’ data showed that more people were involved in gig work — and that the average gig income per worker grew — from the start of the pandemic through this summer.“We were seeing this move towards multiple income streams, because that work was picked up as a stopgap and then continued,” Dr. Gervis said.Take Denae Bettis, a 23-year-old Steady user living in Severn, Md. After dropping out of college, she got a job at UPS, and after a few years rose to become a safety supervisor, usually starting at 4 a.m. During the pandemic, she took on more responsibilities.“The job got really stressful, and I felt like I had no way out,” Ms. Bettis said. So in June 2020, she started a side gig through Instacart, shopping for people holed up at home. The next month, she quit her job, making it easier for her to pursue her passion: working as a personal makeup artist, which often requires taking early-morning appointments.Surviving on income from gigs — which for Ms. Bettis now include DoorDash as well as Instacart — isn’t easy. But Ms. Bettis thinks she can save enough money to open her own storefront.“We just went through a period where millions died, so are you going to spend your time at your job if it doesn’t fulfill you?” Ms. Bettis said, summing up gig work’s appeal. “Everybody loves stability, but if the flexibility isn’t there, I don’t think a lot of people are going to go back.”The State of Jobs in the United StatesEmployment gains in July, which far surpassed expectations, show that the labor market is not slowing despite efforts by the Federal Reserve to cool the economy.July Jobs Report: U.S. employers added 528,000 jobs in the seventh month of the year. The unemployment rate was 3.5 percent, down from 3.6 percent in June.Care Worker Shortages: A lack of child care and elder care options is forcing some women to limit their hours or has sidelined them altogether, hurting their career prospects.Downsides of a Hot Market: Students are forgoing degrees in favor of the attractive positions offered by employers desperate to hire. That could come back to haunt them.Slowing Down: Economists and policymakers are beginning to argue that what the economy needs right now is less hiring and less wage growth. Here’s why.Labor advocates have long been concerned about businesses that depend on independent contractors, since those workers aren’t entitled to the rights and benefits that come with employee status, like employer contributions to payroll taxes and unemployment insurance. But while the model has gained traction, it has been difficult to pin down how fast the ranks of gig workers are growing.The most accurate measure is Internal Revenue Service data on 1099 tax forms — the freelancers’ counterpart to the W-2 forms filed for employees — but that is available only to select researchers and released with a lag of several years. At last count, in 2018, a team of economists found that about 1.2 percent of workers with any earnings had at least some income from online platform work. (A Pew survey from 2021 found that the share of all adults with gig income in a 12-month period was about 9 percent.)The closest government metric that is more timely comes from the Bureau of Labor Statistics, which asks people whether they count themselves as self-employed. That number rose significantly as a share of the labor force from early 2020 to early this year. But it generally captures people for whom self-employment is the main source of income — which, for most gig workers, it isn’t. More likely, the bump represents an increase in the number of people working as home improvement contractors and owner-operator truck drivers — two longtime means of self-employment that surged during the pandemic — and some white-collar freelancers.Less comprehensive but more specific data comes from third-party platforms like Steady, which allows nearly six million workers to track their often-variable sources of income and posts incentives from gig platforms to try working for them. From February 2020 to June 2022, Steady recorded a 31 percent increase in the share of workers on the app with 1099 income. More of those were women than men, with particular growth among single mothers. Freelance income per gig worker increased 13 percent.Ms. Bettis hopes that doing deliveries will allow her to save enough money to open her own storefront.Rosem Morton for The New York TimesAt the same time, the lines between gig work and traditional employment are blurring.Staffing agencies have long supplied temporary workers for industries like warehousing and light manufacturing, where they would have to show up at a certain time on certain days until the business no longer needed the extra labor. Now, some agencies also offer one-off, no-commitment shifts in workplaces that rarely used temp labor before, like restaurants, hotels and retailers.Under this approach, while offering the flexibility of gig work, the staffing agencies usually serve as the employer and administer benefits. Workers are paid as W-2 employees, not independent contractors, which means that they’re still protected by federal labor laws and elements of the social safety net, including workers’ compensation in the event of an injury.Snagajob, an hourly work platform, says that those shifts tripled from 2020 to 2021, and that they will probably quintuple in 2022 — mostly as side income because people’s regular jobs weren’t sufficient.“I think if they were getting the ultimate flexibility and all the compensation they wanted from their full-time employer, there’s probably less of a need for shifts,” said Snagajob’s chief executive, Mathieu Stevenson. “But the reality is, at the overwhelming majority of businesses, you can’t offer as much flexibility. So this is a way to say, ‘If you do want to add an extra $150 because you need it, whether because you want to do something special with your family or you need to pay the light bill, this is an avenue.’”More so than online gig jobs, it can also be a springboard to other opportunities.It worked for Silvia Valladares, 24, who started picking up Snagajob shifts a few years ago to support herself as a college student studying fine arts in Richmond, Va., the company’s initial market. Dishwashing and catering at different places allowed her to fit work in between her classes. But while working at an event venue called Dover Hall, she took a shine to hospitality, and decided to make that her career.“I got to know the regular staff and the management, and they got to know me,” Ms. Valladares said. “Eventually I asked if I could just work here, and they just put me on the regular staff.” Now, as bed-and-breakfast director, she’s the one posting gigs on Snagajob — which lately have been filling quickly.Worker advocates say allowing many competing employers to post last-minute shifts through an intermediary is probably a better model than a world of platforms that change rates at will and lack many of the legal obligations that employers must meet. But they say it still leaves workers on the margins of the labor market. Research on labor outsourcing has generally shown that temp workers are compensated less generously than co-workers who are hired directly.“You can look at it and say, ‘This is great, people need jobs, these companies can do the matching, it’s a win-win,’” said Daniel Schneider, a professor of public policy at Harvard’s Kennedy School of Government who has studied low-wage work. “The broader context is that it’s really not. It’s just a way for companies to shift costs and avoid economic responsibility.”And while gig work has retained and even enhanced its appeal through the pandemic and recovery, it is not clear what will happen if the economy tips into recession and the number of conventional jobs starts to shrink.Gig companies say it will bolster their labor supply, as the hardship caused by rising prices has. Uber said on its second-quarter earnings call that for 70 percent of its new drivers, the cost of living influenced their decision to join. “There’s no question that this operating environment is stronger for us,” said Dara Khosrowshahi, the chief executive.But in an economic downturn, an increase in worker availability for online platforms could coincide with a fall in demand. If customers reduce delivery orders and take fewer cab rides, it would be harder for those who depend on the apps to make a living.That worries Willy Solis, a driver for the Target-owned delivery service Shipt in the Dallas area who has been an organizer for better conditions.“When people are desperate for work, that’s usually what they want to do, is find something that’s easily obtainable,” he said. But what is good for the gig-work companies may not be good for the workers, he added. “Whenever they do hiring sprees,” he said, “we see an influx in gig work and a decrease in the amount of work that’s available to us.” More

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    Trader Joe’s Workers Vote to Unionize at a Second Store

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    Workers at a Trader Joe’s in Minneapolis voted on Friday to unionize, adding a second unionized store to the more than 500 locations of the supermarket chain.Employees at a Trader Joe’s in Massachusetts voted to unionize last month, part of a trend of recent union victories involving service workers at companies like Starbucks, Apple and Amazon.The Minneapolis vote was 55 to 5, according to the National Labor Relations Board, which held the election.The Minneapolis workers voted to join Trader Joe’s United, the same independent union that represents workers in Hadley, Mass. Workers at a third Trader Joe’s store, in Colorado, have filed for a union election, but the labor board has not yet authorized a vote or set an election date.In a statement referring to the election results in Minneapolis, a Trader Joe’s spokeswoman, Nakia Rohde, said, “While we are concerned about how this new rigid legal relationship will impact Trader Joe’s culture, we are prepared to immediately begin discussions with their collective bargaining representative to negotiate a contract.”Sarah Beth Ryther, a Trader Joe’s worker in Minneapolis who was involved in the organizing campaign, said her co-workers had been motivated in part by dissatisfaction with pay and benefits, issues that helped prompt the union campaign in Massachusetts. Workers have complained that the company has made its benefits less generous in recent years, though some benefits have improved more recently.But Ms. Ryther said she and her colleagues were also concerned that the store, which is in an area where some residents struggle with drug dependency and mental health challenges, appeared not to have protocols or systems in place to handle certain emergencies. She cited a person who came into the store last fall with what appeared to be a gunshot wound and collapsed into her arms.Police officers arrived quickly, Ms. Ryther said, but Trader Joe’s did little to address the aftermath, such as explaining to workers what had happened. Several days passed before she was told that she could collect workers’ compensation while taking time off to deal with the trauma, she said.Trader Joe’s did not respond to a request for comment on Ms. Ryther’s account of the workers’ complaints and the store’s conditions, but, in her statement, Ms. Rohde said the company was “committed to responding quickly when circumstances change to ensure we are doing the right thing to support our crew.”In March 2020, the company’s chief executive, Dan Bane, sent a letter to employees referring to “the current barrage of union activity that has been directed at Trader Joe’s” and asserting that union advocates “clearly believe that now is a moment when they can create some sort of wedge in our company through which they can drive discontent.” More

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    Chipotle Agrees to Pay Over $20 Million to Settle New York City Workplace Case

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    New York City said Tuesday that it had reached a settlement potentially worth more than $20 million with the fast-food chain Chipotle Mexican Grill over violations of worker protection laws, the largest settlement of its kind in the city’s history.The action, affecting about 13,000 workers, sends a message “that we won’t stand by when workers’ rights are violated,” Mayor Eric Adams said in a statement.The city said the settlement covered violations of scheduling and sick leave laws from late November 2017 to late April of this year. Under the settlement, hourly employees of Chipotle in New York City will receive $50 for each week that they worked during that period. Employees who left the company before April 30 will have to file a claim to receive their compensation.The Fair Workweek Law enacted by the city in 2017 requires fast-food employers to provide workers with their schedules at least two weeks in advance or pay a bonus for the shifts.The employers must also give workers at least 11 hours off between shifts on consecutive days or get written consent and pay them an extra $100. And the employers must offer workers more shifts before hiring additional employees, to make it easier for them to earn a sustainable income.Under a separate city law, large employers like Chipotle must provide up to 56 hours of paid sick leave per year.The city accused Chipotle of violating all these policies.“We’re pleased to be able to resolve these issues,” Scott Boatwright, the company’s chief restaurant officer, said in a statement. Mr. Boatwright added that the company had carried out a number of changes to ensure compliance with the law, such as new time-keeping technology, and that Chipotle looked forward to “continuing to promote the goals of predictable scheduling and access to work hours for those who want them.”The city filed an initial legal complaint in the case, involving a handful of Chipotle stores, in September 2019, then expanded the case last year to include locations across the city. At the time, the city said the company owed workers over $150 million for the scheduling violations alone. Advocates for the workers said civil penalties could far exceed that amount.In addition to as much as $20 million in compensation, Chipotle will pay $1 million in civil penalties. A city spokeswoman said the settlement was the fastest way to win relief for workers.The city said in its statement that it had closed more than 220 investigations and obtained nearly $3.4 million in fines and restitution under the scheduling law, and that it had closed more than 2,300 investigations and obtained nearly $17 million in fines and restitution under the sick leave law. Neither figure includes the settlement announced Tuesday.The city spokeswoman said the city had filed more than 135 formal complaints under the two laws, and that many employers settle before the city can file a case.Chipotle faces pressure over its labor practice on other fronts. Local 32BJ of the Service Employees International Union, which helped prompt the investigation at Chipotle by filing initial complaints in the case, is seeking to unionize Chipotle workers in the city.Chipotle employees at stores in Maine and Michigan have filed petitions for union elections. The Maine store has been closed, a move that the employees assert was retaliation for the organizing effort. Chipotle has said the closing was a result of staffing issues and had “nothing to do with union activity.” More

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    How This Economic Moment Rewrites the Rules

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    Jobs aplenty. Sizzling demand. If the United States is headed into a recession, it is taking an unusual route, with many markers of a boom.To understand the strange, conflicting signals being sent by the U.S. economy right now, it helps to look at Williston, N.D., in about 2010.North Dakota was in the midst of an oil boom. Scores of rigs were drilling hundreds of wells, filling up train cars with crude because there hadn’t been time to build a pipeline. Pretty much anyone who wanted a job could find one, even the teenagers who dropped out of high school to work in the oil fields. Wages soared. Fast-food restaurants offered signing bonuses. State coffers filled up with tax revenue.Yet as good as the economy was, it also felt unstable. Restaurants couldn’t hire enough workers. Housing was in short supply, and costly. Local infrastructure couldn’t withstand the sudden surge in demand. Prices for practically everything soared.“It was chaotic,” said David Flynn, an economist at the University of North Dakota who lived through the boom and has studied it. “The economy was doing well, revenues for the local areas were up across the board, but you were still short of workers and businesses were having trouble.”“That sounds a lot like the stories you’ve been hearing at the national level for the past couple years,” he added.Economists and politicians have spent weeks arguing about whether the United States is in a recession. If it is, the recession is unlike any previous one. Employers added more than half a million jobs in July, and the unemployment rate is at a half-century low.Typically, in recessions, the problem is that businesses don’t want to hire and consumers don’t want to spend. Right now, businesses want to hire, but can’t find the workers to fill open jobs. Consumers want to spend, but can’t find cars to buy or flights to book.Recessions, in other words, are about too much supply and too little demand. What the U.S. economy is facing is the opposite. Just like North Dakota in 2010.The underlying causes are different, of course. Williston was hit by a surge in demand as companies and workers flooded into what had been a small city in the Northern Plains. The United States was hit by a pandemic, which caused a shift in demand and disrupted supply chains around the world. And the comparison goes only so far: Williston’s population roughly doubled from 2010 to 2020. No one expects that to happen to the country as a whole.Still, whether local or national, the most obvious consequence is the same: inflation. When demand outstrips supply — whether for steel-toe boots in an oil boomtown or for restaurant seats in the aftermath of a pandemic — prices rise. Mr. Flynn recalled going out to eat during the boom and discovering that hamburgers cost $20, a feeling of sticker shock familiar to practically any American these days.There is also a subtler consequence: uncertainty. No one knows how long the boom will last, or what the economy will look like on the other side of it, which makes it hard for workers, businesses and governments to adapt. In Williston, companies and governments were reluctant to invest in the apartment buildings, elementary schools and sewage-treatment plants that the community suddenly needed — but might not need by the time they were complete.A family at a Williston campground in 2010. The local infrastructure couldn’t withstand the sudden surge in demand.Todd Heisler/The New York TimesThe full parking lot of the El Rancho Motel in Williston in 2010.Todd Heisler/The New York Times“Think of it as a situation of every day, seemingly, was a new shock, so you couldn’t even adjust before a new one was hitting,” Mr. Flynn said. “It’s that constant adjustment. Completely unpredictable.”Businesses have now spent two and a half years in a state of constant adjustment. In early 2020, practically overnight, Americans traded restaurant meals for home-baked bread, and gym memberships for socially distanced bike rides. Those shifts caused huge disruptions, in part because businesses were reluctant to make long-term investments to address short-term spikes in demand.“That was always going to cause its own problems on prices and shortages,” said Adam Ozimek, chief economist for the Economic Innovation Group, a Washington research organization. “Businesses were never going to be like, ‘I’m going to build 10 new bicycle factories right now because we’re in a long-term bicycling boom.’”Some other shifts caused by the pandemic are likely to prove longer lasting. But it is hard for businesses to know which.“I think businesses are correct that the current state of the economy can’t really hold — something has to give,” Mr. Ozimek said.To most people, of course, this doesn’t feel like a boom. Measures of consumer confidence are at record lows, and Americans overwhelmingly say they are dissatisfied with the economy. That perception is grounded in reality: High inflation is eroding — and in some cases erasing — the benefits of a strong job market for many workers. Hourly earnings, adjusted for inflation, are falling at their fastest pace in decades.“I know people will hear today’s extraordinary jobs report and say they don’t see it, they don’t feel it in their own lives,” President Biden said Friday. “I know how hard it is. I know it’s hard to feel good about job creation when you already have a job and you’re dealing with rising prices — food and gas and so much more. I get it.”Tara Sinclair, an economist at George Washington University, said the United States wasn’t experiencing a true boom. That would imply a virtuous circle, in which prosperity begets investment, which begets more prosperity and makes the economy more productive in the long term — a rising tide that lifts all boats.The State of Jobs in the United StatesEmployment gains in July, which far surpassed expectations, show that the labor market is not slowing despite efforts by the Federal Reserve to cool the economy.July Jobs Report: U.S. employers added 528,000 jobs in the seventh month of the year. The unemployment rate was 3.5 percent, down from 3.6 percent in June.Care Worker Shortages: A lack of child care and elder care options is forcing some women to limit their hours or has sidelined them altogether, hurting their career prospects.Downsides of a Hot Market: Students are forgoing degrees in favor of the attractive positions offered by employers desperate to hire. That could come back to haunt them.Slowing Down: Economists and policymakers are beginning to argue that what the economy needs right now is less hiring and less wage growth. Here’s why.Instead, the lingering disruptions of the pandemic, uncertainty over what the post-Covid economy will look like and fears of a recession have made businesses reluctant to make bets on the future. Business investment fell in the most recent quarter. Employers are hiring, but they are leaning heavily on one-time bonuses rather than permanent pay increases.“It’s not an economic boom in the sense of wanting to invest long term,” Ms. Sinclair said. “It’s a boomtown situation where everyone’s just waiting for it to get cut off.”The current economic climate doesn’t feel like a boom to many, with measures of consumer confidence at record lows.Hiroko Masuike/The New York TimesIndeed, the Federal Reserve is trying to cut it off. Jerome H. Powell, the Fed chair, has described the labor market, with twice as many open jobs as unemployed workers, as “unsustainably hot,” and is trying to cool it through aggressive interest rate increases. He and his colleagues have argued repeatedly that a more normal economy — less like a boomtown, with lower inflation — will be better for workers in the long term.“We all want to get back to the kind of labor market we had before the pandemic, where differences between racial and gender differences and that kind of thing were at historic minimums, where participation was high, where inflation was low,” Mr. Powell said last month. “We want to get back to that. But that’s not happening. That’s not going to happen without restoring price stability.”Mr. Biden and his advisers, too, have argued that a cooling economy is inevitable and even necessary as the country resets from its reopening-fueled surge. In an opinion article in The Wall Street Journal in May, Mr. Biden warned that monthly job growth was likely to slow, to around 150,000 a month from more than 500,000, in “a sign that we are successfully moving into the next phase of the recovery.”So far, that transition has been elusive. Forecasters had expected hiring to slow in July, to a gain of about 250,000 jobs. Instead, the figure was above 500,000, the highest in five months, the Labor Department reported on Friday. But the labor force — the number of people who are either working or actively looking for work — shrank and remains stubbornly below its prepandemic level, a sign that the supply constraints that have contributed to high inflation won’t abate quickly.Ms. Sinclair said it shouldn’t be surprising that it was taking time to readjust after the coronavirus disrupted nearly every aspect of life and work. As of July, the U.S. economy, in the aggregate, had recovered all the jobs lost during the early weeks of the pandemic. But beneath the surface, the situation looks drastically different from what it was in February 2020. There are nearly half a million more warehouse workers today, and nearly 90,000 fewer child care workers. Millions of people are still working remotely. Others have changed careers, started businesses or stopped working.“We have to remember that we are still sorting that out,” Ms. Sinclair said. “It was a big economic shock, and the fact that we came out of it as quickly as we did is still incredibly impressive. These residual pains are us just still adjusting to it.”Jim Tankersley More

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    Good News on Jobs May Mean Bad News Later as Hiring Spree Defies Fed

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    Employers hired rapidly and paid more in July, suggesting the Federal Reserve may have to remain aggressive in its effort to cool the economy.America’s job market is remarkably strong, a report on Friday made clear, with unemployment at the lowest rate in half a century, wages rising fast and companies hiring at a breakneck pace.But the good news now could become a problem for President Biden later.Mr. Biden and his aides pointed to the hiring spree as evidence that the United States is not in a recession and celebrated the report, which showed that employers added 528,000 jobs in July and that pay picked up by 5.2 percent from a year earlier. But the still-blistering pace of hiring and wage growth means the Federal Reserve may need to act more decisively to restrain the economy as it seeks to wrestle inflation under control.Fed officials have been waiting for signs that the economy, and particularly the job market, is slowing. They hope that employers’ voracious need for workers will come into balance with the supply of available applicants, because that would take pressure off wages, in turn paving the way for businesses like restaurants, hotels and retailers to temper their price increases.The moderation has remained elusive, and that could keep central bankers raising interest rates rapidly in an effort to cool down the economy and restrain the fastest inflation in four decades. As the Fed adjusts policy aggressively, it could increase the risk that the economy tips into a recession, instead of slowing gently into the so-called soft landing that central bankers have been trying to engineer.“We’re very unlikely to be falling into a recession in the near term,” said Michael Gapen, head of U.S. economics research at Bank of America. “But I’d also say that numbers like this raise the risk of a sharper landing farther down the road.”Interest rates are a blunt tool, and historically, big Fed adjustments have often set off recessions. Stock prices fell after Friday’s release, a sign that investors are worried that the new figures increased the odds of a bad economic outcome down the line.Even as investors zeroed in on the risks, the White House greeted the jobs data as good news and a clear sign that the economy is not in a recession even though gross domestic product growth has faltered this year.“From the president’s perspective, a strong jobs report is always extremely welcome,” Jared Bernstein, a member of the White House Council of Economic Advisers, said in an interview. “And this is a very strong jobs report.”Still, the report appeared to undermine the administration’s view of where the economy is headed. Mr. Biden and White House officials have been making the case for months that job growth would soon slow. They said that deceleration would be a welcome sign of the economy’s transition to more sustainable growth with lower inflation.The lack of such a slowdown could be a sign of more stubborn inflation than administration economists had hoped, though White House officials offered no hint Friday that they were worried about it.“We think it’s good news for the American people,” the White House press secretary, Karine Jean-Pierre, told reporters in a briefing. “We think we’re still heading into a transition to more steady and stable growth.”The State of Jobs in the United StatesEmployment gains in July, which far surpassed expectations, show that the labor market is not slowing despite efforts by the Federal Reserve to cool the economy.July Jobs Report: U.S. employers added 528,000 jobs in the seventh month of the year. The unemployment rate was 3.5 percent, down from 3.6 percent in June.Care Worker Shortages: A lack of child care and elder care options is forcing some women to limit their hours or has sidelined them altogether, hurting their career prospects.Downsides of a Hot Market: Students are forgoing degrees in favor of the attractive positions offered by employers desperate to hire. That could come back to haunt them.Slowing Down: Economists and policymakers are beginning to argue that what the economy needs right now is less hiring and less wage growth. Here’s why.The Fed, too, had been counting on a cool-down. Before July’s employment report, a host of other data points had suggested that the job market was decelerating: Wage growth had been moderating fairly steadily; job openings, while still elevated, had been declining; and unemployment insurance filings, while low, had been edging higher.The Fed had welcomed that development — but the new figures called the moderation into question. Average hourly earnings have steadily risen since April on a monthly basis, and Friday’s report capped a streak of hiring that means the job market has now returned to its prepandemic size.“Reports like this emphasize just how much more the Fed needs to do to bring inflation down,” said Blerina Uruci, a U.S. economist at T. Rowe Price. “The labor market remains very hot.”Central bankers have raised borrowing costs three-quarters of a percentage point at each of their last two meetings, an unusually rapid pace. Officials had suggested that they might slow down at their meeting in September, lifting rates by half a point — but that forecast hinged partly on their expectation that the economy would be cooling markedly.Instead, “I think this report makes three-quarters of a point the base case,” said Omair Sharif, founder of Inflation Insights, a research firm. “The labor market is still firing on all cylinders, so this isn’t the kind of slowdown that the Fed is trying to generate to alleviate price pressures.”Fed policymakers usually embrace strong hiring and robust pay growth, but wages have been climbing so fast lately that they could make it difficult to slow inflation. As employers pay more, they must either charge their customers more, improve their productivity or take a hit to their profits. Raising prices is typically the easiest and most practical route.The blistering pace of hiring means the Federal Reserve may need to act more decisively to tame inflation.Scott McIntyre for The New York TimesPlus, as inflation has soared, even robust wage growth has failed to keep up for most people. While wages have climbed 5.2 percent over the past year, far faster than the 2 percent to 3 percent gains that were normal before the pandemic, consumer prices jumped 9.1 percent over the year through June.Fed officials are trying to steer the economy back to a place where both pay gains and inflation are slower, hoping that once prices start to climb gradually again, workers can eke out wage gains that leave them better off in a sustainable way.“Ultimately, if you think about the medium and longer term, price stability is what makes the whole economy work,” Jerome H. Powell, the Fed chair, said at his July news conference, explaining the rationale.Some prominent Democrats have questioned whether the United States should be relying so heavily on Fed policies — which work by hurting the labor market — to cool inflation. Senators Elizabeth Warren of Massachusetts and Sherrod Brown of Ohio, both Democrats, have been among those arguing that there must be a better way.But most of the changes that Congress and the White House can institute to lower inflation would take time to play out. Economists estimate that the Biden administration’s climate and tax bill, the Inflation Reduction Act, would have a minor effect on price increases in the near term, though it may help more with time.While the White House has avoided saying what the Fed should do, Mr. Bernstein from the Council of Economic Advisers suggested that Friday’s report could give the Fed more cushion to raise rates without harming workers.“The depth of strength in this labor market is not just a buffer for working families,” he said. “It also gives the Fed room to do what they need to do while trying to maintain a strong labor market.”Still, the central bank could find itself in an uncomfortable spot in the months ahead.An inflation report scheduled for release on Wednesday is expected to show that consumer price increases moderated in July as gas prices came down. But fuel prices are volatile, and other signs that inflation remains out of control are likely to persist: Rents are climbing swiftly, and many services are growing more expensive.And the still-hot labor market is likely to reinforce the view that conditions are not simmering down quickly enough. That could keep the Fed working to restrain economic activity even as overall inflation shows early, and perhaps temporary, signs of pulling back.“We’re going to get inflation slowing in the next couple of months,” Mr. Sharif said. “The activity part of the equation is not cooperating right now, even if inflation overall does cool off.”Isabella Simonetti More

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    With Surge in July, U.S. Recovers the Jobs Lost in the Pandemic

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    U.S. job growth accelerated in July across nearly all industries, restoring nationwide employment to its prepandemic level, despite widespread expectations of a slowdown as the Federal Reserve raises interest rates to fight inflation.Employers added 528,000 jobs on a seasonally adjusted basis, the Labor Department said on Friday, more than doubling what forecasters had projected. The unemployment rate ticked down to 3.5 percent, equaling the figure in February 2020, which was a 50-year low.The robust job growth is welcome news for the Biden administration in a year when red-hot inflation and fears of recession have been recurring economic themes. “Today’s jobs report shows we are making significant progress for working families,” President Biden declared.The labor market’s continued strength is all the more striking as gross domestic product, adjusted for inflation, has declined for two consecutive quarters and as consumer sentiment about the economy has fallen sharply — along with the president’s approval ratings.“I’ve never seen a disjunction between the data and the general vibe quite as large as I saw,” said Justin Wolfers, a University of Michigan economist, noting that employment growth is an economic North Star. “It is worth emphasizing that when you try to take the pulse of the overall economy, these data are much more reliable than G.D.P.”But the report could stiffen the Federal Reserve’s resolve to cool the economy. Wage growth sped up, to 5.2 percent over the past year, indicating that labor costs could add fuel to higher prices.The Fed has raised interest rates four times in its battle to curb the steepest inflation in four decades, and policymakers have signaled that more increases are in store. That strategy is likely to lead to a slowdown in hiring later in the year as companies cut payrolls to match expected lower demand.Already, surveys of restaurateurs, home builders and manufacturers have reflected concern that current spending will not continue. Initial claims for unemployment insurance have been creeping up, and job openings have fallen for three consecutive months.“At this stage, things are OK,” said James Knightley, the chief international economist at the bank ING. “Say, December or the early part of next year, that’s where we could see much softer numbers.”Payrolls have fully recovered the jobs lost in the pandemic.Cumulative change in jobs since before the pandemic More

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    Is Biden Right About a Recession? The July Jobs Report Suggests Yes.

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    The strong jobs report was welcome news for President Biden, who has insisted in recent weeks that the United States is not in recession, even though it has suffered two consecutive quarters of economic contraction.But the report also defied even the president’s own optimistic expectations about the state of the labor market — and appeared to contradict the administration’s theory of where the economy is headed.Mr. Biden celebrated the report on Friday morning. “Today, the unemployment rate matches the lowest it’s been in more than 50 years: 3.5 percent,” he said in a statement. “More people are working than at any point in American history.”He added: “There’s more work to do, but today’s jobs report shows we are making significant progress for working families.”The president has said for months that he expects job creation to slow soon, along with wage and price growth, as the economy transitions to a more stable state of slower growth and lower inflation.“If average monthly job creation shifts in the next year from current levels of 500,000 to something closer to 150,000,” Mr. Biden wrote in an opinion piece for The Wall Street Journal in May, “it will be a sign that we are successfully moving into the next phase of recovery — as this kind of job growth is consistent with a low unemployment rate and a healthy economy.”White House officials prepped reporters this week for the possibility that job growth was cooling, in line with Mr. Biden’s expectations. The expectations-busting job creation number appeared to surprise them, again.But Mr. Biden will almost certainly cite the numbers as evidence that the economy is nowhere near recession. He and his aides have repeatedly said in recent weeks that the current pace of job creation is out of step with the jobs numbers in previous recessions, and proof that a contraction in gross domestic product does not mean the country is mired in a downturn. More

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    U.S. jobs report shows a gain of 528,000 in July.

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    U.S. employers added 528,000 jobs in July, the Labor Department said on Friday, again outstripping expectations for a labor market that is still rebounding from the pandemic but that has come under increasing pressure from inflation as well as from escalating interest rates meant to rein in prices.The impressive performance — which brings the total employment back to its level of February 2020, just before the pandemic lockdowns — indicates that a slowdown in some industries has not been enough to drag down overall hiring. And it provides new evidence that the United States has not entered a recession.But most forecasters expect that momentum to slow markedly later in the year, as companies cut payrolls to match lower demand.“At this stage, things are OK,” said James Knightley, the chief international economist at the bank ING. “Say, December or the early part of next year, that’s where we could see much softer numbers.”The unemployment rate was 3.5 percent, down from 3.6 percent in June, matching its 50-year low on the eve of the pandemic.Last week, the government reported that the nation’s gross domestic product, the broadest measure of economic output, had contracted for the second consecutive quarter when adjusted for inflation. The data showed a sharp decline in home building, a slackening of business investment and a sluggish rise in consumer spending.Those trends are bound to affect the labor market overall, even if not uniformly or immediately.Amy Glaser, a senior vice president at the global staffing agency Adecco, said her firm was still struggling to fill hourly jobs, especially in retail and logistics. Employers may not have made those positions attractive enough, and, increasingly, may do without them.“I think we do have a gap in the jobs that are available and the desire to do those jobs,” Ms. Glaser said. “We know there are tens of thousands of warehouse jobs out there, but standing on your feet for 10 hours a day isn’t everyone’s cup of tea.” More