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    PCE Index Probably Popped Again in November

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    Federal Reserve policymakers are likely to finish a year that has been colored by surprisingly high inflation with yet more bad news: Their preferred price measure could touch its highest level since 1982 when the latest reading is published on Thursday morning.The Personal Consumption Expenditures price index, which is the indicator that the Fed officially targets when it aims for 2 percent annual inflation on average over time, is expected to have climbed by 5.7 percent in November from a year earlier, economists surveyed by Bloomberg estimate. That would be the fastest pace of increase in nearly 40 years.Part of the jump will be caused by gasoline prices, which were up sharply in November, and have moderated this month. But a so-called “core” index that excludes food and fuel prices is also expected to increase sharply, to 4.5 percent.Rapidly rising prices are lasting longer than policymakers had hoped, and they have become broader in recent months. Earlier this year, big price increases were largely limited to goods that were in short supply as demand surged and as overtaxed shipping lines struggled to keep up. More recently, they have spread into categories like rent — which can be more long-lasting.Fed officials are tasked with keeping inflation moderate and helping the country achieve full employment, and they have grown increasingly worried about the surge in prices. This month they pivoted on policy, speeding up plans to cut back on economic support and preparing to raise interest rates early next year if that proves necessary. Higher interest rates can weaken demand for everything from homes to cars, helping to slow down the economy and restrain inflation.What to Know About Inflation in the U.S.Inflation, Explained: What is inflation, why is it up and whom does it hurt? We answered some common questions.The Fed’s Pivot: Jerome Powell’s abrupt change of course moved the central bank into inflation-fighting mode.Fastest Inflation in Decades: The Consumer Price Index rose 6.8 percent in November from a year earlier, its sharpest increase since 1982.Why Washington Is Worried: Policymakers are acknowledging that price increases have been proving more persistent than expected.The Psychology of Inflation: Americans are flush with cash and jobs, but they also think the economy is awful.The big question for officials at the central bank — and in the Biden administration — is what will come next. With the Omicron variant of the coronavirus surging around the world, it is unlikely that tangled supply chains will get back to normal quickly. At the same time, rising housing costs could keep inflation high even as some of the most painful trends of 2021, including a surge in used-car prices tied to a computer chip shortage, moderate.Fed officials do expect inflation to ease to 2.6 percent by the end of next year, their most recent economic forecasts showed, but that would remain substantially above their 2 percent goal. None of the Fed’s 18 top officials expect inflation to drop below 2 percent next year. High inflation also is sapping consumer confidence as people face down rising costs, even at a time when job openings far exceed available workers and wages are rising.“It’s a devastating thing for people who are working class and middle-class,” President Biden said at the White House on Tuesday, adding: “It really hurts.”The administration is trying to pull what levers it can — increasing the supply of oil and gas and trying to keep ports open longer in an effort to clear shipping backlogs.But costs also are increasing because households have saved a lot after repeated government stimulus checks and months locked at home. People are spending voraciously, giving companies the power to raise prices without losing customers.Inflation F.A.Q.Card 1 of 6What is inflation? More

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    Kellogg Workers Ratify Contract After Being on Strike Since October

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    About 1,400 striking Kellogg workers have ratified a new contract, their union said Tuesday, ending a strike that began in early October and affected four of the company’s U.S. cereal plants.“Our striking members at Kellogg’s ready-to-eat cereal production facilities courageously stood their ground and sacrificed so much in order to achieve a fair contract,” Anthony Shelton, the president of the workers’ union, the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, said in a statement. “This agreement makes gains and does not include any concessions.”Steve Cahillane, the company’s chairman and chief executive, said in a statement that he was pleased that the workers approved the deal. “We look forward to their return and continuing to produce our beloved cereal brands for our customers and consumers,” he added.The strike had become especially contentious after workers rejected an agreement on a five-year contract between their union and the company in early December, and the company announced that it would move ahead with hiring permanent replacement workers.President Biden waded into the dispute a few days later, saying in a statement that the plan to replace workers was “deeply troubling” and calling it “an existential attack on the union and its members’ jobs and livelihoods.”The company and the union announced the second tentative agreement the next week, just before Senator Bernie Sanders, an independent from Vermont, was scheduled to hold a rally on behalf of workers in Battle Creek, Mich., home of the company’s headquarters and one of the cereal plants where workers had walked off the job.The contract dispute revolved partly around the company’s two-tier compensation system, in which workers hired after 2015 typically received lower wages and less generous benefits than veteran workers. The company has said that the longer-tenured workers make more than $35 an hour on average, while the more recent workers average just under $22 per hour.Veteran workers had complained that the two-tier system put downward pressure on their wages and benefits because they could effectively be outvoted or replaced with newer, cheaper workers.Under the agreement that workers rejected in early December, the company would have immediately granted veteran pay and benefit status to all workers with four or more years’ experience at Kellogg. It would have also granted veteran status to a number equal to 3 percent of a plant’s head count in each year of the contract.The initial agreement would have given veteran workers a 3 percent wage increase in the first year and cost-of-living adjustments.In the agreement that workers just approved, the proposal for converting newer workers to veteran status remained unchanged, but the company expanded cost-of-living wage adjustments to cover all employees in each year of the contract, according to a Kellogg spokeswoman.Newer workers will see their wages immediately rise to just over $24 an hour and veteran workers will immediately receive a wage increase of $1.10 per hour. More

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    Lingering Virus, Lasting Inflation: A Fed Official Explains Her Pivot

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    Mary Daly, president of the Federal Reserve Bank of San Francisco, wanted to withdraw economic help slowly. Now, she might support a rate increase as soon as March.SAN FRANCISCO — Mary C. Daly was in line behind a woman in her neighborhood Walgreens in Oakland, Calif., this fall when she witnessed an upsetting consequence of inflation. The shopper, who was older, was shuffling uncomfortably as the clerk rang up her items.“She starts ruffling in her pockets, and in her purse,” Ms. Daly said in an interview. “And she says: This is a lot more expensive than it usually is. I buy these things — these are my monthly purchases.”The woman had to put something back — she chose potato chips — because she couldn’t afford everything in her basket.It would have been sobering to watch for anyone, but the moment hit especially hard for Ms. Daly, who is president of the Federal Reserve Bank of San Francisco. As one of the Fed’s 18 top officials, she is one of the people who sets economic policy to help to ensure a strong job market and to keep prices for goods and services stable.Like many of her colleagues, Ms. Daly initially expected inflation to fade relatively quickly in 2021 as the economy reopened and got back to normal. But continued waves of virus that have interrupted and complicated the recovery and increasingly broad price increases have made central bankers nervous that rapid inflation and pandemic-caused labor shortages might linger.Those risks have prompted the Fed to speed up its plans to pull back policies meant to stimulate the economy. Officials had previously suggested that they would keep interest rates low for a long time to allow more people who lost or quit their jobs during the pandemic to return to the job market. But in recent weeks, they announced a plan to more rapidly scale back their other main policy to boost the economy — large-scale bond purchases that have kept long-term borrowing costs low and kept money flowing around the financial system. Concluding that program promptly could put them in position to raise interest rates as soon as March.Ms. Daly, who spoke to The New York Times in two interviews in November and December, has shifted her tone particularly dramatically in recent weeks. How she came to change her mind highlights how policymakers have been caught off guard by the persistence of high inflation and are now struggling to strike the right balance between addressing it while not harming the labor market.As recently as mid-November, she had argued that the Fed should be patient in removing its support, avoiding an overreaction to inflation that might prove temporary and risk unnecessarily slowing the recovery of the labor market. But incoming data have confirmed that employers are still struggling to hire even as consumer prices are rising at the fastest clip in nearly 40 years. Rising rents and tangled supply chains could continue to push up inflation. And she’s running into more people like that woman in Walgreens.“My community members are telling me they’re worried about inflation,” Ms. Daly said last week. “What influenced me quite a lot was recognizing that the very communities we’re trying to serve when we talk about people sidelined” from the labor market “are the very communities that are paying the largest toll of rising food prices, transportation prices and housing prices.”Ms. Daly said she supported ending bond buying quickly so that officials were in a position to begin raising interest rates. A higher Fed policy rate would percolate through the economy, lifting the costs of mortgages, car loans and even credit cards and cooling off consumer and business demand. That would eventually tamp down inflation, while also likely slowing job growth.Ms. Daly said it was too early to know when the first rate increase would be warranted, but suggested she could be open to having the Fed begin raising rates as soon as March.“I’m comfortable with saying that I expect us to need to raise rates next year,” Ms. Daly said last week. “But exactly how many will it be — two or three — and when will that be — March, June, or in the fall? For me it’s just too early to know, and I don’t see the advantage of a declaration.”Many investors and economists now expect the Fed to lift rates from their current near-zero level in March, and Christopher Waller, a Fed governor, suggested last week that he could support a move then.That higher rates could be coming so soon is a big change from what officials were signaling — and what people who watch the Fed closely were expecting — until very recently.Fed officials have long said they want the economy to return to full employment before they lift interest rates. Early in the pandemic, many policymakers suggested that they would like to see the number of people with jobs rebound to levels approaching those that prevailed in early 2020, suggesting a long period of low rates would be needed.But increasingly, officials have argued that the economy is close to achieving their employment target by focusing on the overall unemployment rate and the rates for different racial groups.The jobless rate has fallen to 4.2 percent, and Fed officials expect it to drop to 3.5 percent next year. That would match the rate that prevailed before the pandemic, and would be a marked improvement from a pandemic high of 14.8 percent in April 2020. Black unemployment is dropping swiftly, too.“The economy has been making rapid progress toward maximum employment,” Jerome H. Powell, the Fed chair, said during a news conference this month.Yet that unemployment rate tells just part of the story, because it counts only people who are actively applying for jobs. The share of people in their prime employment ages, between 25 and 54, who are either working or looking for work has dropped notably, and is only starting to recover. Ms. Daly said she was thinking about the Fed’s full employment target in terms of what is achievable in the short term, as the coronavirus keeps many workers at home, and in the longer term, when more employees may be able to return because the virus is more under control.“There’s the labor market we can get eventually, after Covid,” she said. “And there’s the labor market that we have to deal with today.”For now, job openings far exceed the number of people applying for positions, and wages are climbing briskly, two signs that suggest that workers are — at least temporarily — scarce.It may be the case that “in the short run, this is all the workers we have,” Ms. Daly said. “But in the long run, we expect more workers to come.”Retailers in her area are cutting hours on busy shopping days because they can’t hire enough staff. Production lines are shuttered. And with virus infections rising again and the new Omicron variant spreading rapidly, there is no immediate end in sight.“If we get past Covid, inflation comes down, the labor supply recovers — then definitely we want more patience, because we want time for that to work itself through,” she said. “But we have Covid, and it won’t go away.” More

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    Fed Could Raise Rates 3 Times in 2022 and Speeds End of Bond-Buying

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    With the economy healing, but price gains pinching consumers, officials are dialing back bond purchases and getting in position to raise interest rates (three are possible next year).Federal Reserve policymakers moved into inflation-fighting mode on Wednesday, saying they would cut back more quickly on their pandemic-era stimulus at a moment of rising prices and strong economic growth, capping a challenging year with a policy shift that could usher in higher interest rates in 2022.The central bank’s policy statement set up a more rapid end to the monthly bond-buying program that the Fed has been using throughout the pandemic to keep money chugging through markets and to bolster growth. A fresh set of economic projections released on Wednesday showed that officials expect to raise interest rates, which are now set near-zero, three times next year.“Economic developments and changes in the outlook warrant this evolution,” Jerome H. Powell, the Fed chair, said of the decision to pull back on bond purchases more quickly.By tapering off its bond buying faster, the Fed is doing less to stimulate the economy with each passing month, and putting the program on track to end completely in March.That would place Fed policymakers in a position to raise interest rates — their more traditional and more powerful tool — sooner. The Fed has made clear it wants to end its bond-buying program before it raises rates, which would cool off demand by making it more expensive to borrow for a home, a car or expanding a business. That would in turn weigh on growth and, eventually, price gains. The Fed’s new economic projections suggested rates, which have been at rock-bottom since March 2020, might rise to 2.1 percent by the end of 2024. More

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    Jobless for a Year? Employment Gaps Might Be Less of a Problem Now.

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    People who were out of work for a while have typically found it much harder to get a job. The pandemic may have changed how employers view people who have been unemployed for months or years.Jamie Baxter used to be skeptical of job applicants who had not worked for long stretches of time, assuming that other employers had passed them over.“My mind would jump to the negative stigma of ‘Wow, why could this person not get a job for this long?’” said Mr. Baxter, who is chief executive of Qwick, a temporary staffing company for the hospitality industry.Yet recently, he has hired at least half a dozen people who had been out of work for several months or longer. The pandemic, he said, “made me open my eyes.”Mr. Baxter’s change of heart reflects an apparent willingness among employers in the pandemic era to hire applicants who have been jobless for long periods. That’s a break from the last recession, when long-term unemployment became self-perpetuating for millions of Americans. People who had gone without a job for months or years found it very difficult to find a new one, in part because employers avoided them.The importance of what are often referred to as “résumé gaps” is fading, experts say, because of labor shortages and more bosses seeming to realize that long absences from the job market shouldn’t taint candidates. This is good news for the 2.2 million people who have been out of work for more than six months, and are considered long-term unemployed, according to the Labor Department, double the number before the pandemic.But that change may not last if more people decide to return to the job market or if the economy cools because of another wave of coronavirus cases, experts say.Mr. Baxter, whose company is based in Phoenix, said he has learned from his own experience. Forced to lay off roughly 70 percent of his 54 employees when the pandemic hit, he realized he was responsible for creating the very employment gaps he had once used to screen out job applicants.“I knew I was creating employment gaps,” he said. “Maybe other people would have employment gaps for very justifiable reasons. It doesn’t mean that they are not a good employee.”Even in normal times, the long-term unemployed face steep odds. The longer applicants are out of work, the more they may become discouraged and the less time they may spend searching for jobs. Their skills may deteriorate or their professional networks may erode.Some employers regard applicants with long periods of unemployment unfavorably, research shows — even if many are reluctant to admit it.“Employers don’t often articulate why but the idea, they believe, is that people who are out of work are damaged in some way, which is why they are out of work” said Peter Cappelli, the director of the Center for Human Resources at the Wharton School of the University of Pennsylvania.Some economists believe the pandemic’s unique effects on the economy may have changed things. Notably, the pandemic destroyed millions of jobs seemingly all at once, especially in the travel, leisure and hospitality industries. Many people could not, or chose not to, work because of health concerns or family responsibilities.“For people who were just laid off because of Covid, will there be a stigma? I don’t really think so,” Mr. Cappelli said. Although monthly job-finding rates plummeted for both the short- and long-term unemployed during the early part of the pandemic, the rate for the long-term jobless has since rebounded to roughly the same level as before the pandemic, according to government data. While that does not imply the employment-gap stigma has disappeared, it suggests it is no worse than it has been.That was what Rachel Love, 35, found when she applied for a job at Qwick.After Ms. Love was furloughed, and then laid off from her sales job at a hotel in Dallas last year, she kept hoping that her former company would hire her back. She had been unemployed for about a year when she came to terms with the idea of getting a new job and became aware of a business development position at Qwick.Interviewers did not press her about why she had been out of work for so long. “I hope now, just with everything going on, I think people can look at the résumé and look at the time frame and maybe just infer,” said Ms. Love, who began working remotely for Qwick in June.The tight labor market is almost certainly a factor. In October, there were 11 million job openings for 7.4 million unemployed workers.“The fact of the matter is, there are far more jobs in the U.S. than there are people to fill them right now,” said Jeramy Kaiman, who leads professional recruitment for the western United States at the Adecco Group, a staffing agency, working primarily with accounting, finance and legal businesses. As a result, he added, employers have had to become more willing to consider applicants who had been out of work for a while.Even when the worker shortage eases, labor experts express optimism that employers will care less about employment gaps than before, partly because the pandemic has made hiring managers more sympathetic.Zoë Harte, the chief people officer at Upwork, a company that matches freelancers with jobs, said there had been a “societal shift” in how companies understand employment gaps.“It’s become more and more evident that opportunity isn’t equally distributed, and so it’s important for us as people who are creating jobs and interviewing people to really look at ‘What can this person contribute?’ as opposed to ‘What does this piece of paper say they have done in the past?’” she said.That aligns with Burton Amos’s experience. After he was laid off from his job as a program support specialist with a federal contractor at the start of the pandemic, Mr. Amos, 60, started an online wireless accessories business and began studying for a career in information technology but was unable to land other work.On his résumé and LinkedIn profile, he was open about his lack of full-time employment, an approach that seemed to appeal to interviewers.“Every job did ask about ‘What am I doing right now?’” he said. “They didn’t specifically say anything specific about the pandemic.” He recently received multiple job offers and has accepted a position as a public aid eligibility assistant with the State of Illinois.Many companies have also redoubled their efforts on diversity and are more willing to employ people with a range of backgrounds and experiences, including applicants with long employment gaps.Scott Bonneau, vice president of global talent attraction at the hiring site Indeed, said employment gaps are “not a part of our consideration.” His company instead tries to evaluate a candidate’s skills and capabilities. That practice began before the pandemic, as part of the company’s diversity and inclusion efforts, and it is a shift that he said he expected to see at other businesses.“I think there is the beginnings of a movement to stop focusing on employment gaps entirely at least in certain parts of the employment world,” said Mr. Bonneau, whose responsibilities include hiring people for jobs at Indeed.But other labor experts worry that the employment-gap stigma will return once the economy stabilizes.Employers may not be as forgiving of gaps on résumés that stretch into next year now that jobs, and vaccines, are more available, said Jesse Rothstein, a professor of public policy and economics at the University of California, Berkeley. The stigma may be more evident for lower-wage workers in industries where current job openings are especially high.“I would expect that to whatever extent that it exists, it will come back,” Mr. Rothstein said.History also suggests that the empathy that hiring managers may feel now will not last, said Maria Heidkamp, the director of program development at the Heldrich Center for Workforce Development at Rutgers University.In a study released in 2013 by the Heldrich Center, a quarter of American workers said they were directly affected through a job loss and nearly 80 percent said they knew at least someone who had lost a job in the previous four years. Those levels would seem to make hiring managers more understanding of those who had lost their jobs because the experience was so common, Ms. Heidkamp said. “But that’s not what we saw,” she said.“The equation may play out differently” now, she added. “That said, I’m still worried.”Ben Casselman More

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    Why New York City’s Jobless Rate Is Double the Rest of the Country's

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    The city has regained fewer than 6 of every 10 jobs it lost since the pandemic began, while the nation as a whole has regained more than 90 percent of lost jobs.Since the start of the year, nearly six million jobs have been added in the United States. The unemployment rate has plummeted to 4.2 percent, close to where it stood before the pandemic. But in New York City, the economy appears to be in a rut.After gaining 350,000 jobs in the last months of 2020, employment has slowed considerably this year, with just 187,000 jobs added since March. The city’s unemployment rate of 9.4 percent is more than double the national average, and its decline in recent months was largely caused by people dropping out of the labor force.From the start of the pandemic, no other large American city has been hit as hard as New York, or has struggled as much to replenish its labor force. Nearly a million people lost their jobs in the early months of the pandemic, and thousands of businesses closed.As the city plunged into its worst financial crisis since the Great Depression, the unemployment rate skyrocketed, peaking in June 2020 at 20 percent. Nearly every industry — from construction to finance to social services — has fewer people employed now than before the pandemic swept into New York in March 2020.Nearly two years later, New York has added back a little more than half the jobs it lost, according to the state Labor Department, far less than the rest of the country, underscoring how the pandemic ravaged some of the city’s core economic engines like tourism, hospitality and retail.The protracted pandemic has shut out tourists and scared off the crush of suburbanites who filled office towers every weekday — a “double whammy,” said Andrew Rein, president of the Citizens Budget Commission, a nonprofit watchdog group. Just 8 percent of office workers were back at work five days a week in early November, according to a survey by the Partnership for New York City, a business group.Crowds are thinner at Pennsylvania Station in Midtown Manhattan with so many suburban office employees still working remotely.Yuvraj Khanna for The New York Times“Commuters and tourists consume a lot of the same stuff,” Mr. Rein said. “They consume, in a certain sense, the vibrancy of New York City.”Their absence has contributed to the loss of more than 100,000 jobs in the city’s restaurants, bars and hotels, plus nearly 60,000 additional jobs in retailing, performing arts, entertainment and recreation. The reopening of Broadway theaters and the high rate of vaccinations has provided a boost this fall that lowered the city’s official unemployment rate to 9.4 percent in October.But the rise of the Omicron variant could threaten the fledgling recovery just as the next mayor, Eric Adams, takes office in January. Mr. Adams has pledged to use the full resources of city government to reinvigorate the economy, creating a citywide jobs training and placement program.So far, the city has regained fewer than six of every 10 jobs it lost since the pandemic began in early 2020, while the nation as a whole has regained more than nine out of 10 lost jobs, said James Parrott, an economist with the Center for New York City Affairs. “It certainly looks to me like we’re going to have a much slower, much more drawn-out recovery,” Mr. Parrott said.The short but sharp pandemic recession was particularly painful for those in lower-paying service jobs: Positions in retail, restaurants and hotels help underpin the city’s economy and were the first to be cut in spring 2020. The jobs have been slow to reappear while a large share of their customers — office workers — have still not returned to the city’s business districts.The story is far different for one major industry and its employees, finance, which has thrived, with companies like JPMorgan Chase posting record revenues during the pandemic.In the two previous recessions — those that started in 2000 and 2008 — Wall Street shrank and the city lost tens of thousands of high-paying finance jobs. This time, the job losses on Wall Street have been minimal, helping tax collections to hold up as the city has continued to collect income tax from high-paid professionals who are working remotely.“Wall Street is having a banner year, and they did really well last year,” said Ana Champeny, deputy research director at the Citizens Budget Commission. “That has helped prop up the city’s income tax revenues and business tax revenues.”A strong employment rebound has yet to take hold despite an easing of pandemic-related business restrictions over the summer, the ending of expanded unemployment benefits in September and the reopening of international travel last month.An estimated 800,000 New York City residents, about 10 percent of the population, were receiving the benefits when they expired. Republican lawmakers and small business owners had blamed the benefits for discouraging people from working, though recent studies have shown that the extra payments most likely had little effect on labor shortages, which have continued after the payments ended.Before the pandemic, the tourism industry in New York City employed 283,000 people, with the majority of those jobs in Manhattan. By the end of 2020, roughly a third of those positions had been eliminated, according to the New York State comptroller’s office.Roughly a third of New York City’s 283,000 tourism positions had been eliminated by the end of 2020, though visitors have started to return in greater numbers in recent weeks.Gabby Jones for The New York TimesWhen the city locked down early last year, almost all of its tour guides were laid off, and most have not been rehired, said Patrick Casey, a board member of the Guides Association of New York City who is out of work himself.He had worked as a guide for New York Water Taxi, which operated a fleet of sightseeing boats, for more than 10 years before he was furloughed at the start of the pandemic. He had to fend for himself: Federal pandemic benefits have expired, and like many workers, he had exhausted his unemployment insurance.Mr. Casey said he had hoped to be rehired, but he gave up and started collecting Social Security when he turned 65 in early December. “It’s going to take a long time for my industry to come back,” he said.The pandemic has caused many workers to re-evaluate their own priorities, placing a greater importance on work-life balance, spending time with their families and protecting their health. It has led some workers to retire, while others are reluctant to rejoin the work force if it means taking a job that requires face-to-face interaction, economists say.Louisa Tatum, a career coach at the New York Public Library in the Bronx, said that more people with college degrees were seeking advice, and workers were more selective about what jobs they were willing to accept.While some businesses are hiring and some even have major staff shortages, many workers tell her that they are willing to wait to accept a position that pays well, has consistent hours and, in a reflection of how the pandemic has shifted priorities, offers greater flexibility for remote work.“There is a desire to work remotely and for opportunities that don’t put them at risk of anything,” Ms. Tatum said. The biggest barrier, she said, is the lack of desirable openings.For some industries in New York, the pandemic simply accelerated financial pressure that already existed. Retailers were already struggling with the rise of online shopping, and empty storefronts were adding up even on famed corridors like Madison Avenue.The apparel manufacturing business, a bedrock industry in New York a century ago that employed hundreds of thousands of people, shed more than 4,000 jobs during the pandemic, leaving just 6,100 employees in the city as of October.Taylor Grant moved back home to Alabama after being laid off from her clothing designing job and decided to stay after not being able to find a new job in New York.Julie Bennett for The New York TimesTaylor Grant was among those who lost a job in the apparel manufacturing trade. Ms. Grant, 25, accepted a job in early 2019 as a clothing designer at HMS Productions, a designer and manufacturer of women’s clothes sold at shops like TJ Maxx and Marshalls. Her office was in the garment district, the once booming textile neighborhood in Midtown Manhattan.Ms. Grant said she had survived rounds of layoffs in spring 2020 and had worked remotely for a couple of months in Dothan, Ala., her hometown. She lost her job that summer.Ms. Grant said she applied for a handful of jobs in the apparel business in New York through the rest of 2020, hoping to return while she still had an apartment in the city. Not one company responded, so she stopped looking. She now works as a manager at a women’s boutique started by her mother, Frou Frou Frocks in Dothan, and has helped increase its online sales and social media presence.“I definitely thought I would be with my company for at least five years,” Ms. Grant said. “Once I realized there were no job opportunities in New York, I decided to stay in Alabama.”The Hotel and Gaming Trades Council, a union that represents more than 30,000 hotel workers in New York, still has thousands of members who have been out of work for nearly two years. The outlook is so bleak that union officials have been counseling members on how to find work in other fields, even nonunion jobs. But replacing jobs that paid $35 an hour and provided free family health care is a tall order.“We have people waiting in line and anxious to go back to work,” said Rich Maroko, president of the union. “They’re having difficulty finding full-time work.”Kazi M. Hossain, 59, had served drinks at Bar Seine in the Hôtel Plaza Athénée in Manhattan for nearly 35 years when the pandemic forced the hotel to close in March 2020. It has never reopened, leaving Mr. Hossain without a full-time job for the first time since the mid-1970s.He has supported his family in Queens by taking on part-time work and borrowing $100,000 from his retirement savings. “If the hotel opens in the next three months, I could survive,” Mr. Hossain said. More

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    The Fed Meets Amid Faster Inflation and Prepares to React

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    The Federal Reserve could announce plans to cut economic support faster, and may signal 2022 rate increases, at its Dec. 14-15 meeting.Federal Reserve officials, worried about rising costs and buoyed by a healing labor market, are pivoting from bolstering the economic recovery to more quickly withdrawing the support that has aided the economy since the pandemic began.The policymakers, who meet this week for their final gathering of 2021, are widely expected to outline a faster end to their bond-buying campaign and will telegraph how aggressively they expect to raise rates from rock-bottom next year.The potential for major policy signals at the Fed’s meeting, which concludes at 2 p.m. on Wednesday, will make it one of the most closely watched of the pandemic era.Officials took their first step toward weaning the economy off the central bank’s support in November, when they said they would begin to slow a large-scale bond buying program that had been in place since early in the pandemic to keep money flowing around markets and support the economy. In the weeks since the Fed’s last meeting, fresh data has showed that consumer prices are climbing at the fastest pace in nearly 40 years and the unemployment rate has fallen to 4.2 percent, far below its pandemic peak.Given inflation and growth trends, Fed officials signaled clearly that they would discuss withdrawing support more quickly at this gathering, and economists think officials will signal a plan to taper off bond purchases so that the buying will stop altogether in March.Policymakers will also provide their latest thinking on the path for interest rates in their updated quarterly economic projections, and could pencil in two or three increases next year. When they last released the projections in September, officials were split on whether they would raise rates at all in 2022. Lifting the federal funds rate is arguably the Fed’s most powerful tool for pushing back on inflation, because it would slow demand and economic growth by percolating through the rest of the economy, lifting borrowing costs on mortgages, business loans and auto debt.In late November, Jerome H. Powell, the Fed chair, set the stage for the central bank’s shift from an economy-stoking stance to one that is more focused on keeping inflation under control.“At this point, the economy is very strong, and inflationary pressures are high, and it is therefore appropriate in my view to consider wrapping up the taper of our asset purchases, which we actually announced at our November meeting, perhaps a few months sooner,” Mr. Powell said during congressional testimony on Nov. 30.The Fed chair is expected to further explain during a post-meeting news conference on Wednesday how he is thinking about the central bank’s policy stance as it confronts rapid inflation and an uncertain economic path at a time when the virus shows no signs of abating and a new variant, Omicron, complicates the outlook.The Fed spent much of 2021 tiptoeing away from full-blast economic support, hoping to remove stimulus gradually enough that the job market would heal fully and quickly. But gradualism has given way to wariness in recent weeks, partly thanks to a new series of data points showing that inflation is still high and might stay elevated for some time.Central bankers knew that prices would climb quickly in early 2021 as the economy recovered from the depths of the pandemic, but the increases have been strikingly broad-based and long-lasting. The gains are broadening beyond pandemic-sensitive goods and into rent and some services, and both wages and inflation expectations are picking up. Policymakers have increasingly questioned the wisdom of adding juice to the economy with each passing month.“They’re realizing that they need to stop pouring gasoline on the fire,” said Gennadiy Goldberg, a rates strategist at T.D. Securities.The Fed has two key jobs: keeping prices stable and fostering maximum employment. Progress on the second goal has also been notable in recent months. The unemployment rate has dropped sharply, falling to 4.2 percent in November and improving faster than Fed officials or most economist expected.Even so, about four million jobs are still missing compared to before the pandemic. Some of those people may have retired, but others are expected to return to the job search once health concerns and pandemic-related child-care problems become less pronounced. Many Fed officials had been hoping to keep their policies very accommodative as those people came back.But inflation is forcing policymakers to balance their job market ambitions with their goal of keeping price gains under control. While an unhealed job market is bad for American households, so too are high and unpredictable price increases that chip away at paychecks and make it hard for businesses to plan. Plus, if the Fed waits too long to react to inflation, the fear is that they might have to lift rates sharply to bring it to heel, setting off a new recession.“We have to balance those two goals when they are in tension as they are right now,” Mr. Powell said in testimony on Dec. 1. “But I assure you we will use our tools to make sure that this high inflation that we are experiencing does not become entrenched.”Shoppers in New York last week. A burst in inflation has caught policymakers by surprise.George Etheredge for The New York TimesThe Biden administration announced in late November that it would reappoint Mr. Powell as Fed chair, which may have also given Mr. Powell a renewed mandate to lay out a plan to manage the risks around inflation and might explain the Fed’s sudden and notable pivot toward focusing more intently on inflation, said Krishna Guha, head of the global policy central bank strategy team at Evercore ISI.If Mr. Powell were leaving the central bank early next year when his term expires, it might have been tough for him to signal a plan for the future that his successor would have been stuck executing.Plus, “there is pressure from both sides of the aisle for the Fed to bring inflation under control,” Mr. Guha said. But he thinks the political element of the shift could be exaggerated; economic fundamentals also explain it.While many Fed officials say they still expect high inflation to fade, plenty of signs suggest it is at risk of remaining too high for too long. Businesses report that they are raising wages or setting aside money as they prepare to pay more. Companies — from dollar stores to pizza shops — are lifting prices and finding that consumers accept the change.Even companies taking a cautious approach to lifting prices express uncertainty about how long it will take to clear the supply chain snarls that are pushing up prices for inputs like food commodities and imported goods.“I think we’re living in elevated time of everything, right?” Randy Garutti, chief executive officer of Shake Shack, said at an investor conference early this month. “That will moderate. I can’t tell you when, I don’t know if it will be next year ’23 or ’24, or which product it will be? That’s unclear.”Fed officials are quick to acknowledge that the supply snarls seem likely to last into next year, and they seem to view the new coronavirus variant — about which much is still unknown — as something with the potential to prevent tortured supply routes from returning to normal.As they wrestle with the crosscurrents, Wall Street is debating how quickly the Fed might move to push rates higher next near, and will closely watch how many rate increases officials pencil into their fresh economic projections this week for any hint at the trajectory.“We think it’s a close call between two or three” estimated increases, J.P. Morgan economists wrote in a preview note, noting that they think three are more likely. They expect the Fed to first raise rates in June 2022, then lift them again every three months.The plan won’t necessarily be to try to constrain the economy by withdrawing support so rapidly that Fed policy becomes a big drag on growth — the equivalent of slamming the brakes. Instead, it will be to stop helping the economy so much, said Diane Swonk, chief economist at Grant Thornton LLP.“The Fed is going to take their foot off the gas pedal,” she said. The new development at this meeting is that the stimulus deceleration will be happening “even faster.” More

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    Biden Assails Kellogg’s Plan to Replace Striking Workers

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    President Biden on Friday waded into a strike involving 1,400 employees at four Kellogg plants, whom the company said it planned to permanently replace after workers voted down a proposed contract this week.“I am deeply troubled by reports of Kellogg’s plans to permanently replace striking workers,” Mr. Biden said in a statement, adding that “permanently replacing striking workers is an existential attack on the union and its members’ jobs and livelihoods.”The strike began on Oct. 5 and has largely focused on the company’s two-tier compensation system, in which employees hired after 2015 typically receive lower wages and less generous benefits than veteran workers. Many veteran Kellogg workers, who the company says earn about $35 per hour on average, believe that adding lower-paid workers puts downward pressure on their wages.Kellogg raised the possibility of hiring permanent replacements in November. The company and the union last week reached a tentative agreement in which the company would lift a cap on the number of workers in the lower tier, which was 30 percent under the previous contract. In exchange, the company agreed to move all workers with four or more years experience into the veteran tier, as well as an amount equivalent to 3 percent of workers at its plants in each of the five years of the contract.On Tuesday, the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, which represents the workers, said its members had “overwhelmingly voted” against the deal. In response to the result, Kellogg said that it would “hire permanent replacement employees in positions vacated by striking workers.”A Kellogg spokeswoman, Kris Bahner, said Friday that the company had posted job listings for permanent replacement roles in each of its four locations and that its hiring process was “fully operational.” The statement added: “Interest in the roles has been strong at all four plants, as expected. We expect some of the new hires to start with the company very soon.”After Mr. Biden’s statement, Ms. Bahner said that the company was “ready, willing and able to negotiate with the union” and that it agreed with the president “that this needs to be solved at the bargaining table.” Ms. Bahner indicated that the company had moved ahead with permanent replacements out of an obligation to consumers and other employees.Permanently replacing workers who are striking over economic issues like wages and benefits is legal, but Democrats, including Mr. Biden, have sought to outlaw the practice through the Protecting the Right to Organize Act, or PRO Act. The House approved the bill in March but it has stalled in the Senate.“I have long opposed permanent striker replacements and I strongly support legislation that would ban that practice,” Mr. Biden said in his statement Friday. “Such action undermines the critical role collective bargaining plays in providing workers a voice and the opportunity to improve their lives.”The statement is not the first time Mr. Biden has appeared to weigh in on a prominent labor action. The president appeared in a video during a union campaign at an Amazon warehouse in Alabama this year warning that “there should be no intimidation, no coercion, no threats, no anti-union propaganda” — an unusual interjection by a president during a union election.Mr. Biden has made no secret of his support for unions over the years. He quickly ousted government officials disliked by unions, reversed Trump-era rules that softened worker protections and signed legislation that allocated tens of billions of dollars to stabilize union pension plans.His $2 trillion climate and social policy bill, pending in the Senate, includes numerous pro-labor measures, including incentives for employers to offer union-scale wages on wind and solar projects. More