Source: Keys and Mulder, National Bureau of Economic Research (2024) Note: State average is shown in counties with few or no observations. Enid, Okla., surrounded by farms about 90 minutes north of Oklahoma City, has an unwelcome distinction: Home insurance is more expensive, relative to home values, than almost anywhere else in the country. Enid […] More
A gain of 206,000 in June exceeded forecasts. Hiring was concentrated in a few parts of the economy, however, and unemployment rose to 4.1 percent.Halfway through the year, and four years removed from the downturn set off by the coronavirus pandemic, the U.S. job engine is still cruising — even if it shows increased signs of downshifting.Employers delivered another solid month of hiring in June, the Labor Department reported on Friday, adding 206,000 jobs in the 42nd consecutive month of job growth.At the same time, the unemployment rate ticked up one-tenth of a point to 4.1 percent, up from 4 percent and surpassing 4 percent for the first time since November 2021.The gain in jobs was slightly greater than most analysts had forecast. But totals for the two previous months were revised downward, and the uptick in unemployment was unexpected. That has led many economists and investors to shift from having full faith in the jobs market to having some concern for it.“These numbers are good numbers,” said Claudia Sahm, the chief economist for New Century Advisors, cautioning against overly negative interpretations of the report.But “the importance of the unemployment rate is it can actually tell us a bit about where we might be going,” she added, noting that the rate had been drifting up since hitting a half-century low of 3.4 percent early last year.Wage growth slowed in JuneYear-over-year percentage change in earnings vs. inflation More
Investors are poised for a report on Friday to show a slowdown in the pace of hiring in June, building on weak services and manufacturing data, and to firm up their expectations of interest rate cuts starting as soon as September.Signs of lower rates in the near future, which would make it cheaper for consumers and companies to borrow, have typically been accompanied by market rallies.Stock indexes tracking larger companies have been buoyed in recent weeks. The S&P 500 has repeatedly set fresh records and is up more than 16 percent this year. However, the Russell 2000 index, which tracks smaller companies that are more sensitive to the ebb and flow of the economy, has largely flatlined, with weaker economic data this week nudging the index 0.5 percent lower ahead of the Independence Day holiday.Economists are forecasting that the June jobs report will show a healthy labor market, albeit with fewer jobs added and an easing in wage growth. Earlier this week, widely watched surveys of manufacturing and services activity both came in lower than forecast.Coupled with signs of cooling inflation, a deceleration in economic growth would give the Federal Reserve a justification for cutting rates, which have been held at high levels for months.Jerome H. Powell, the Fed chair, said at a conference this week that if the economic data continued to come in as it has recently, the Fed could consider cutting interest rates.“We’ve made quite a bit of progress in bringing inflation back down to our target, while the labor market has remained strong and growth has continued,” Mr. Powell said. “We want that process to continue.”Mr. Powell didn’t specify when the Fed would start to cut rates but investors are forecasting that it will take action in September, with roughly two quarter-point cuts expected for the year. Those bets have increased from the start of the week, when a cut in September was seen as more of a 50/50 proposition.The data has come in “a bit weaker than expected,” noted analysts at Deutsche Bank, “and it all added to the theme that the economy was losing momentum as we arrive in the second half of the year.” More
Owners of some rental buildings are starting to struggle because of rising interest rates and waning demand in some once booming Sun Belt cities.It might seem like a great time to own apartment buildings.For many landlords, it is. Rents have soared in recent years because of housing shortages across much of the country and a bout of severe inflation.But a growing number of rental properties, especially in the South and the Southwest, are in financial distress. Only some have stopped making payments on their mortgages, but analysts worry that as many as 20 percent of all loans on apartment properties could be at risk of default.Although rents surged during the pandemic, the rise has stalled in recent months. In many parts of the country, rents are starting to fall. Interest rates, ratcheted higher by the Federal Reserve to combat inflation, have made mortgages much more expensive for building owners. And while homes remain scarce in many places, developers may have built too many higher-end apartments in cities that are no longer attracting as many renters as they were in 2021 and 2022, like Houston and Tampa, Fla.These problems haven’t yet turned into a crisis, because most owners of apartment buildings, known in the real estate industry as multifamily properties, haven’t fallen behind on loan payments.Only 1.7 percent of multifamily loans are at least 30 days delinquent, compared with roughly 7 percent of office loans and around 6 percent of hotel and retail loans, according to the Commercial Real Estate Finance Council, an industry association whose members include lenders and investors.But many industry groups, rating agencies and research firms are worried that many more apartment loans could become distressed. Multifamily loans make up a majority of loans newly added to watch lists compiled by industry experts.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
The gulf between higher- and lower-income consumers has been widening for years, but it is expected to show up especially clearly in travel this season.The travel industry is in the midst of another hot summer as Americans hit the road and make for the airport to take advantage of slightly cheaper flights and gas. But the 2024 vacation outlook isn’t all sunny: Like the rest of the American consumer experience this year, it is sharply divided.Many richer consumers — always the lifeblood of the travel industry — are feeling good this year as a strong stock market and rising home values boost their wealth. While they have felt the bite of rapid inflation over the last few years, they are likely to have more wiggle room in their budgets and more options to ease the pain by trading down from name brands to generic, or Whole Foods to Walmart.Poorer families have had less room to maneuver to avoid the brunt of high prices. Although the job market is strong, with low unemployment and wages that have risen especially rapidly at the bottom of the income scale in recent years, some signs of economic strain have been surfacing among lower-income Americans. Credit card delinquencies have risen, many lower earners report feeling less confident in their own household finances, and companies that serve lower-income groups report that they are under stress.The gulf between higher- and lower-income consumers has been widening for years, but it is expected to show up especially clearly in travel this summer. Surveys show that richer households are more optimistic about their ability to take trips, and services that they are more likely to use — like full-service hotels — are flourishing. Budget hotel chains, by contrast, are expected to report a pullback.“If you go to upscale, you’re actually seeing growth there,” said Adam Sacks, the president of tourism economics at Oxford Economics. “A lot of that has to do with the different financial situations of different income groups.”Bookings, survey responses and spending trends so far suggest that the travel industry will see muted but healthy growth this summer and in 2024 as a whole. That growth is expected even after several years of breakneck vacationing as people took “revenge” for the trips they missed during the 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
High interest rates, economic uncertainty and a cyberattack appear to have dampened sales in the three months through June.Much of the auto industry, with the notable exception of Tesla, reported modest sales growth in the three months through June as high interest rates, high vehicle prices and uncertainty about the economy weighed on consumers.Sales in late June were also slowed by disruptions at car dealers stemming from a cyberattack on a company that supplies software and data services to dealerships.Cox Automotive, a market research firm, estimated on Tuesday that 4.1 million new cars and trucks were sold in the second quarter in the United States, up a little from the period in 2023. That’s a marked slowdown from the year’s first three months, when sales grew 5 percent. In the first six months of 2024, 7.9 million new vehicles were sold, an increase of 3 percent from the first half of last year, Cox said.Slow growth is likely to continue through the end of the year, said Jonathan Smoke, Cox’s chief economist. “The market is roiled by uncertainty,” he said. “We probably can’t quite keep the pace of sales of the first half, but we aren’t expecting a collapse in sales.”Cox has forecast that 15.9 million new cars and trucks will be sold in the United States this year. That would be an increase from the 15.5 million sold last year, but still well below the 17 million vehicles sold annually before the pandemic.General Motors said on Tuesday that it sold nearly 700,000 cars and light trucks in the United States in the second quarter, an increase of less than 1 percent from the period last year. The company said it was its best performance since the fourth quarter of 2020.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
The economy appears to be downshifting and price gains are moderating, as Federal Reserve officials creep closer to beating inflation.The Federal Reserve’s preferred inflation measure continued to cool as consumer spending grew only moderately, good news for central bankers who have been trying to weigh down demand and wrestle price increases under control.The Personal Consumption Expenditures index climbed 2.6 percent in May from a year earlier, matching what economists had forecast and down from 2.7 percent previously.After stripping out volatile food and fuel prices to give a better sense of the inflation trend, a “core” price measure was also up 2.6 percent from a year earlier, down from 2.8 percent in the April reading. And on a monthly basis, inflation was especially mild, and prices did not climb on an overall basis.The Fed is likely to watch the fresh inflation data closely as central bankers think about their next policy steps. Officials raised interest rates sharply starting in 2022 to hit the brakes on consumer and business demand, which in turn can help to slow price increases. But they have held borrowing costs steady at 5.3 percent since July as inflation has slowly come down, and have been contemplating when to begin lowering interest rates.While officials went into 2024 expecting to make several rate cuts this year, they have pushed those expectations back after inflation proved stubborn early in the year. Policymakers have suggested that they still think they could make one or two rate cuts before the end of the year, and investors now think that the first reduction could come in September.Given Friday’s fresh inflation data, the sticky inflation early in 2024 looks “more and more like a bump in the road,” Omair Sharif, founder of Inflation Insights, wrote in note after the release. “However you want to slice and dice it, we’ve made considerable progress on core inflation over the last year.”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
What you need to know about the economy before Thursday’s showdown between President Biden and Donald J. Trump.President Biden.Doug Mills/The New York TimesFormer President Donald J. Trump.Haiyun Jiang for The New York TimesMany of the issues likely to dominate Thursday’s televised debate between President Biden and former President Donald J. Trump boil down to economics.Inflation, immigration, government taxing and spending, interest rates, and trade relationships could all take center stage — and both candidates could make sweeping claims about them, as they regularly do at campaign events and other public appearances.Given that, it could be handy to go into the event with an understanding of where the economic data stand now and what the latest research says. Below is a rundown of some of today’s hot-button topics and the context you need to follow along like a pro.Inflation has been high, but it’s slowing.Inflation jumped during the pandemic and its aftermath for a few reasons. The government had pumped more than $5 trillion into the economy in response to Covid, first under Mr. Trump and then under Mr. Biden.As families received stimulus checks and built up savings amid pandemic lockdowns, they began to spend their money on goods like cars and home gym equipment. That burst of demand for physical products collided with factory shutdowns around the world and snarls in shipping routes.Shortages for everything from furniture parts and bicycles to computer chips for cars began to crop up, and prices started to jump in 2021 as a lot of money chased too few 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
