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    Will Food Prices Stop Rising Quickly? Many Companies Say Yes.

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    Food companies are talking about smaller price increases this year, good news for grocery shoppers, restaurant diners and the White House.Few prices are as visible to Americans as the ones they encounter at the grocery store or drive-through window, which is why two years of rapid food inflation have been a major drag for U.S. households and the Biden administration.Shoppers have only slowly regained confidence in the state of the economy as they pay more to fill up their carts, and President Biden has made a habit of shaming food companies — even filming a Super Bowl Sunday video criticizing snack producers for their “rip off” prices.But now, the trend in grocery and restaurant inflation appears to be on the cusp of changing.After months of rapid increase, the cost of food at home climbed at a notably slower clip in January. And from packaged food providers to restaurant chains, companies across the food business are reporting that they are no longer raising prices as steeply. In some cases that’s because consumers are finally pushing back against price increases after years of spending through them. In others, it’s because the prices that companies pay for inputs like packaging and labor are no longer rising as sharply.

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    Year-over-year change in consumer price indexes
    Source: Bureau of Labor StatisticsBy The New York TimesEven if food inflation cools, it does not mean that your grocery bill or restaurant check will get smaller: It just means it will stop climbing so quickly. Most companies are planning smaller price increases rather than outright price cuts. Still, when it comes to the question of whether rapid jumps in grocery and restaurant prices are behind us, what executives are telling investors offer some reason for hope.Some, but not all, consumers are saying no.Executives have found in recent months that they can raise prices only so high before consumers cut back.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Three Lessons From a Surprisingly Resilient Job Market

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    The recovery from the pandemic lockdowns has prompted economists to consider whether their playbook is outdated or just missing a page.The pandemic created an economic crisis unlike any recession on record. So perhaps it shouldn’t be surprising that the aftermath, too, has played out in a way that almost no economists expected.When unemployment soared in the first weeks of the pandemic, many feared a repeat of the long, slow rebound from the Great Recession: years of joblessness that left many workers permanently scarred. Instead, the recovery in the labor market has been, by many measures, the strongest on record.In early 2021, some economists foresaw a surge in inflation. Others were skeptical: Similar predictions in recent years — in some cases from the same forecasters — had failed to come true. This time, however, they were right.And when the Federal Reserve began trying to tamp down inflation, there were warnings that the job market was sure to buckle, as it had threatened to do every time policymakers began raising interest rates too rapidly in the decade before the pandemic. Instead, the central bank has raised rates to their highest level in decades, and the job market is holding steady, or perhaps even gaining steam.The final chapter on the recovery has not been written. A “soft landing” is not a done deal. But it is clear that the economy, particularly the job market, has proved far more resilient than most people thought probable.Interviews with dozens of economists — some of whom got the recovery partly right, many of whom got it mostly wrong — provided insights into what they have learned from the past two years, and what they make of the job market right now. They didn’t agree on all the details, but three broad themes emerged.

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    Unemployment usually rises when job openings fall. Not this time.
    Notes: Job openings are shown as a share of employment. Unemployment is shown as a share of the labor force. All data is seasonally adjusted.Source: Bureau of Labor StatisticsBy The New York Times

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    The racial unemployment gap is narrowing
    Note: Data is seasonally adjusted.Source: Bureau of Labor StatisticsBy The New York Times

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    Job growth has far surpassed prepandemic expectations
    Notes: Change since fourth quarter 2014. Projection based on 2015 Congressional Budget Office forecast.Source: Bureau of Labor Statistics; Congressional Budget OfficeBy The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Can America Turn a Productivity Boomlet Into a Boom?

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    After drooping in 2022, the output of U.S. businesses per worker has surged. Economists wonder if the trend can continue, and who will benefit most.Kevin Rezvani came of age in kitchens: spending summers at his grandfather’s bakery in Japan, doing work-study in his college cafeteria and working for years as a line cook at mid-tier restaurants, along with some stints in fast food.By his late 20s, the biggest takeaway Mr. Rezvani had from his experience “working in every kind of thing in food” was the industry’s widespread inability to reconcile the art of a kitchen, and the science of a restaurant, with the math of a business.Too many ventures, he says, are not profitable enough to justify all the work hours needed from managers and employees to stay afloat, much less grow. In other words, they fall short on productivity.“There’s a very fine line between doing OK, and doing well in this business,” said Mr. Rezvani, now 36. “And if you’re doing OK, it’s not worth your time.”He and two partners opened a casual sit-down restaurant near Rutgers University a few years after his graduation. But in early 2020, they split from him over personal and business disagreements, and he was on his own.To pay bills, he worked for a moving company and made deliveries for Amazon, which was booming during the lockdowns, as people idled at home spent their disposable income on buying goods.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Why Are Americans Wary While the Economy Is Healthy? Look at Nevada.

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    Toni Irizarry recognizes that the economy has improved. Compared with the first wave of the pandemic, when Las Vegas went dark, and joblessness soared to levels not seen since the Great Depression, these are days of relative normalcy.Ms. Irizarry, 64, oversees a cafe at the Orleans Hotel and Casino, a property just off the Las Vegas Strip that caters mostly to locals. Guests have returned, filling the blackjack and roulette tables amid the cacophony of jingling slot machines — the sound of money.She started in the hospitality industry busing tables when she was only 16. Her paychecks have allowed her to purchase a home, raise three children and buy each of them their first car. But as she contemplates the future, she cannot shake a sense of foreboding.The outlook of people like Ms. Irizarry could be crucial in determining who occupies the White House. Nevada is one of six battleground states that are likely to decide the outcome of November’s presidential election. Its economic centerpiece, Las Vegas, was constructed on dreams of easy money. That proved a winning proposition for generations of working people, yielding middle class paychecks for bartenders, restaurant servers, casino dealers and maids. Yet over the last two decades, a series of shocks have eroded confidence.Nevada remains heavily reliant on the willingness of people around the world to spend their money at casinos, restaurants and entertainment venues.First, a speculative bonanza in real estate went spectacularly wrong, turning the city into the epicenter of a national foreclosure crisis. The Great Recession inflicted steep layoffs on the hospitality industry, demolishing the notion that gambling was immune to downturns. Then in 2020, the pandemic turned Las Vegas into a ghost town.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

  • 150 Shares199 Views

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    Fed Chair Powell Says Officials Need More ‘Good’ Data Before Cutting Rates

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    Federal Reserve officials are debating when to lower rates. An interview with Jerome H. Powell confirms a move is coming, but not immediately.Jerome H. Powell, the chair of the Federal Reserve, made clear during a “60 Minutes” interview aired on Sunday night that the central bank is moving toward cutting interest rates as inflation recedes, but that policymakers need to see continued progress toward cooler price increases to make the first move.Mr. Powell was interviewed on Thursday, after the Fed’s meeting last week but before Friday’s blockbuster jobs report. He reiterated his message that lower borrowing costs are coming. But he also said that the Fed’s next meeting in March is probably too early for policymakers to feel sure enough that inflation is coming under control to reduce rates.“We think we can be careful in approaching this decision just because of the strength that we’re seeing in the economy,” Mr. Powell said during the interview, based on a transcript released ahead of its airing. He added that officials would want to see a continued moderation in price increases, even after several months of milder readings.The progress on inflation “doesn’t need to be better than what we’ve seen, or even as good. It just needs to be good,” Mr. Powell said.His remarks reaffirm that lower borrowing costs are likely coming this year — a change that could make mortgages, car loans and credit card debt cheaper for Americans. They also underscore how much better today’s economic situation is proving to be than what economists and Fed officials expected just a year ago.Many forecasters had predicted that the Fed’s rapid campaign of interest rate increases, which pushed borrowing costs from near zero to a range of 5.25 to 5.5 percent from March 2022 to July 2023, would slow the economy so much that it might even spur a recession. Central bankers themselves — including Mr. Powell — believed that some economic pain would probably be needed to cool consumer and business demand enough to prod businesses to stop raising prices so quickly.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Job Market Starts 2024 With a Bang

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    U.S. employers added 353,000 jobs in January, far exceeding forecasts, and revised figures showed last year was even stronger than previously reported.The United States produced an unexpectedly sizable batch of jobs last month, a boon for American workers that shows the labor market retains remarkable strength after three years of expansion.Employers added 353,000 jobs in January on a seasonally adjusted basis, the Labor Department reported on Friday, and the unemployment rate remained at 3.7 percent.The report also put an even shinier gloss on job growth for 2023, including revisions that added more than 100,000 to the figure previously tallied for December. All told, employers added 3.1 million jobs last year, more than the 2.7 million initially reported.After the loss of 14 percent of the nation’s jobs early in the Covid-19 pandemic, the labor market’s endurance despite aggressive interest rate increases has caught economists off guard.“I think everyone is surprised at the strength,” said Sara Rutledge, an independent economics consultant. “It’s almost like a ‘pinch me’ scenario.”Ms. Rutledge helped tabulate the National Association for Business Economics’ latest member survey, which found rising optimism that the country would avoid a recession — matching a turnaround in measures of consumer sentiment as inflation has eased.Unemployment has been under 4 percent for 24 monthsUnemployment rate More

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    For Biden, a Sunny Economy Could Finally Be a Potential Gain

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    Recession fears have eased. Growth and job gains are beating expectations. Inflation is cooling. Consumers are happier. The president is waiting to benefit.A run of strong economic data appears to have finally punctured consumers’ sour mood about the U.S. economy, blasting away recession fears and potentially aiding President Biden in his re-election campaign.Mr. Biden has struggled to sell voters on the positive signs in the economy under his watch, including rapid job gains, low unemployment and the fastest rebound in economic growth from the pandemic recession of any wealthy country.For much of Mr. Biden’s term, forecasters warned of imminent recession. Consumers remained glum, and voters told pollsters they were angry with the president for the other big economic development of his tenure: a surge of inflation that peaked in 2022, with the fastest rate of price growth in four decades.Much of that narrative appears to be changing. After lagging price growth early in Mr. Biden’s term, wages are now rising faster than inflation. The economy grew 3.1 percent from the end of 2022 to the end of 2023, defying expectations, including robust growth at the end of the year. The inflation rate is falling toward historically normal levels. U.S. stock markets are recording record highs.The Federal Reserve, which sharply raised interest rates to tame price growth, signaled this week that it was likely to start cutting rates soon. “This is a good economy,” Jerome H. Powell, the Fed chair, whose central bank is independent from the White House, declared at a news conference this week.The Conference Board’s consumer confidence index has jumped in each of the past two months. A key component of it, in which consumers rate their current economic situations, is closing in on its recent high from February 2020, on the eve of the coronavirus pandemic.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Biden Takes Aim at Grocery Chains Over Food Prices

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    President Biden has begun to accuse stores of overcharging shoppers, as food costs remain a burden for consumers and a political problem for the president.President Biden, whose approval rating has suffered amid high inflation, is beginning to pressure large grocery chains to slash food prices for American consumers, accusing the stores of reaping excess profits and ripping off shoppers.“There are still too many corporations in America ripping people off: price gouging, junk fees, greedflation, shrinkflation,” Mr. Biden said last week in South Carolina. Aides say those comments are a preview of more pressure to come against grocery chains and other companies that are maintaining higher-than-usual profit margins after a period of rapid price growth.Mr. Biden’s public offensive reflects the political reality that, while inflation is moderating, voters are angry about how much they are paying at the grocery store and that is weighing on Mr. Biden’s approval rating ahead of the 2024 election.Economic research suggests the cost of eggs, milk and other staples — which consumers buy far more frequently than big-ticket items like furniture or electronics — play an outsized role in shaping Americans’ views of inflation. Those prices jumped by more than 11 percent in 2022 and by 5 percent last year, amid a post-pandemic inflation surge that was the nation’s fastest burst of price increases in four decades.The rate of increase is slowing rapidly: In December, prices for food consumed at home were up by just over 1 percent, according to the Labor Department. But administration officials say Mr. Biden is keenly aware that prices remain too elevated for many families, even as key items, like gasoline and household furnishings, are now cheaper than they were at their post-pandemic peak.And yet, there is a general belief across administration officials and their allies that there is little else Mr. Biden could do unilaterally to force grocery prices down quickly.Grocery store margins are rising

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    Operating profit margin by type of retailer
    Notes: Operating margin defined as sales, receipts and operating revenue as a share of operating expenses. Data shown as four-quarter rolling average.Source: Council of Economic AdvisersBy The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More