Regulation and Deregulation of Industry

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4 Big Airlines Face U.S. Inquiry Over Frequent Flier Programs

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The Transportation Department ordered American, Delta, Southwest and United to share more information about their rewards practices to ensure they are fair to consumers and rivals.The Transportation Department announced on Thursday that it was investigating the rewards programs of the country’s four biggest airlines, part of the agency’s continuing efforts to bolster protections for air travelers.As part of the inquiry, Transportation Secretary Pete Buttigieg ordered the carriers — United Airlines, Delta Air Lines, American Airlines and Southwest Airlines — to furnish the agency with records and detailed information about their loyalty programs.The agency said its investigation was “focused on the ways consumers participating in airline rewards programs are impacted by the devaluation of earned rewards, hidden or dynamic pricing, extra fees, and reduced competition and choice.”Mr. Buttigieg said in a statement that such programs “are controlled by a company that can unilaterally change their value.”“Our goal is to ensure consumers are getting the value that was promised to them,” he added, “which means validating that these programs are transparent and fair.”Airlines’ policies have been in the Biden administration’s cross hairs for months as it has tried to clamp down on practices that it sees as unfavorable to consumers. In April, the Transportation Department issued new rules requiring airlines to offer refunds when flights are canceled or delayed and to reveal all fees before a ticket is purchased.Mr. Buttigieg expressed concerns about loyalty programs in May during a joint hearing of the Transportation Department and the Consumer Financial Protection Bureau on airline loyalty and credit card programs. He said the agency was examining whether the companies were being straightforward with customers about what they would receive and whether they were “getting the deal that they were promised.”The agency, he added at the time, was also looking into the impact of the programs on competition in the industry, and whether some were “being operated in a way that has the potential to block the entry or growth of smaller airline competitors, which could ultimately limit options for consumers.”In statements, Delta and Southwest defended their loyalty programs. American and United referred requests for comment to Airlines for America, a trade association that represents the country’s biggest airlines, which said in a statement that “U.S. carriers are transparent about these programs, and policymakers should ensure that consumers can continue to be offered these important benefits.”Last year, Delta prompted an outcry among travelers when it announced changes to its SkyMiles frequent flier program. The airline later adjusted its modifications. More

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    The Fed’s Preferred Inflation Gauge Stays Cool, Keeping a Rate Cut Imminent

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    Inflation remained cool in July, based on the Personal Consumption Expenditures index, keeping the Federal Reserve on track for rate cuts.Inflation held steady in July on a yearly basis and consumer spending was robust, fresh data released on Friday showed, the latest sign that progress toward cooler price increases remains firmly intact even as the economy holds up.The release of the Federal Reserve’s favorite inflation number, the Personal Consumption Expenditures index, showed that yearly inflation was 2.5 percent. That was in line with both the previous month and with economist forecasts.After stripping out food and fuel prices, both of which jump around, a “core” index was up 2.6 percent from a year earlier. That figure gives economists a clearer grasp on the underlying trend in inflation.This month, Fed officials and Wall Street analysts are likely to look closely at the monthly inflation numbers. Because inflation climbed slowly last summer, the annual numbers are being measured against cool readings from last year. When comparing July’s prices to June’s, inflation climbed slightly: 0.2 percent in both the headline and the core measures.The likely takeaway for Fed officials is that inflation continues to gradually moderate — keeping them on track to begin lowering interest rates next month. While the yearly number remains above the Fed’s 2 percent goal, it is down substantially from a peak of more than 7 percent in 2022.This is the last P.C.E. report the Fed will receive before its Sept. 17-18 policy meeting, although officials will get a Consumer Price Index report on Sept. 11. That inflation measure comes out earlier in the month than the personal consumption measure and feeds into the P.C.E. report.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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    Kroger and Albertsons Confront a Skeptical F.T.C. in federal court

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    The Federal Trade Commission, which is trying to block Kroger’s plan to acquire Albertsons, said in court that the merger of grocery giants would also hurt workers’ pay and benefits.A trial that could determine whether the two largest supermarket chains in the United States can merge opened in Portland, Ore., on Monday, pitting the grocery giant Kroger against regulators who argue that its takeover of Albertsons would eliminate competition at the expense of consumers and workers.Before Judge Adrienne Nelson of U.S. District Court, the Federal Trade Commission and the supermarket chains laid out their arguments in court for the first time, as union representatives and workers protested the deal on the courthouse steps. Less competition, the agency’s lawyers said, would give Kroger more leverage to raise prices on millions of consumers.The highly anticipated proceedings, set to last three weeks, come as high food prices have become a critical focus in the presidential race. Vice President Kamala Harris, the Democratic presidential nominee, has backed a federal ban on price-gouging in the food and grocery industries to combat high grocery costs.Kroger and Albertsons defended the $24.6 billion deal, which would be the biggest supermarket merger in U.S. history, saying it would bolster their leverage with suppliers and improve competition against major retailers like Costco, Amazon and Walmart. But the F.T.C. — backed by a chorus of unions, consumer advocates, politicians and independent grocery chains — reiterated its position that the merger would probably result in higher prices for groceries and worse conditions for workers.The deal “would eliminate the competition that shoppers and workers depend on in one fell swoop,” Susan Musser, the F.T.C.’s chief trial counsel, said in her opening statement. “This lawsuit is part of an effort aimed at helping Americans feed their families.”In bringing the case, the F.T.C. has been joined by the attorneys general of eight states, including California and Illinois, as well as the District of Columbia. It’s part of a regulatory push under the Biden administration to rein in corporate consolidation in an array of industries, including airlines, Big Tech, book publishing and pharmaceuticals.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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    Stocks Rise as Fed Chair Powell Signals Rate Cuts in Jackson Hole Speech

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    Jerome H. Powell made it clear that the Federal Reserve will cut rates on Sept. 18, as the central bank turns the corner in its fight against inflation.Speaking in his most closely watched speech of the year, Jerome H. Powell, the chair of the Federal Reserve, clearly signaled on Friday that the central bank was poised to cut interest rates in September.And while Mr. Powell stopped short of giving a clear hint at just how large that move might be, he forcefully underscored that the central bank stands prepared to adjust policy to protect the job market from weakening further and to keep the economy on a path for a soft landing.“The time has come for policy to adjust,” Mr. Powell said during the Kansas City Fed’s annual conference at Jackson Hole in Wyoming. “The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook and the balance of risks.”He then added: “We will do everything we can to support a strong labor market as we make further progress toward price stability.”Mr. Powell’s speech was his firmest declaration yet that the Fed is turning a corner in its fight against inflation. After more than a year of holding interest rates at 5.3 percent, the highest level in more than two decades, officials finally have enough confidence to change their stance by cutting rates at their Sept. 17-18 meeting.Policymakers have been using those high rates to try to cool the economy and, by doing so, wrestle down rapid inflation. But as price increases slow substantially and the job market shows signs of wobbling, officials no longer need to hit the brakes quite so hard.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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    Judge Blocks F.T.C.’s Noncompete Rule

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    The Federal Trade Commission was deemed to lack the authority to bar companies from restricting their employees’ ability to go to work for rivals.A federal judge on Tuesday upheld a challenge to the Federal Trade Commission’s ban on noncompete agreements, blocking it from taking effect in September as scheduled.Judge Ada Brown of U.S. District Court for the Northern District of Texas ruled that the antitrust agency lacked authority to issue substantive rules related to unfair methods of competition, including the noncompete rule, which would have prohibited companies from restricting their employees’ ability to work for rivals.The push to adopt the rule is part of the Biden administration’s effort to crack down on practices that regulators argue are anticompetitive, unfairly constraining workers.Judge Brown had temporarily blocked the ban in July. Her decision on Tuesday renders that injunction permanent, and nationwide in scope.Banning noncompete agreements would increase workers’ earnings by at least $400 billion over the next decade, the F.T.C. has estimated. The agreements affect roughly one in five American workers, or around 30 million people, according to the agency, whose purview includes antitrust and consumer protection issues.Victoria Graham, an F.T.C. spokeswoman, said the agency was disappointed by Judge Brown’s decision and would “keep fighting to stop noncompetes that restrict the economic liberty of hardworking Americans, hamper economic growth, limit innovation and depress wages.”“We are seriously considering a potential appeal, and today’s decision does not prevent the F.T.C. from addressing noncompetes through case-by-case enforcement actions,” Ms. Graham added.A tax firm, Ryan, sued to block the rule just hours after the F.T.C. voted 3 to 2 in April to adopt it. The U.S. Chamber of Commerce later joined the case as a plaintiff, as did the Business Roundtable and two Texas business groups.The Chamber of Commerce and other groups have asserted that the F.T.C. lacks constitutional and statutory authority to adopt the rule, with Ryan calling it “arbitrary, capricious and otherwise unlawful” — a position with which Judge Brown agreed. Business groups have also argued that the ban would limit their ability to protect trade secrets and confidential information.In response to Judge Brown’s ruling, G. Brint Ryan, chief executive of Ryan, called the rule “continuing overreach and overregulation” by the federal government, adding that the firm was “happy we were able to successfully stop the overreach in this instance.”But the three Democrats on the five-member F.T.C. maintain that it can legally issue rules defining unfair methods of competition under the Federal Trade Commission Act of 1914, the law that created the agency.In a separate case, a federal judge in Pennsylvania declined last month to block the rule. Diverging rulings on the fate of the ban could leave the door open to review by higher courts.“Many businesses will welcome the reprieve, but the uncertainty continues as the fight now moves to the appellate courts,” said Kevin Goldstein, an antitrust partner at Winston & Strawn. More

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    Americans Growing Worried About Losing Their Jobs, Labor Survey Shows

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    The New York Fed’s labor market survey showed cracks just as Jerome H. Powell, the Fed chair, prepares for a closely watched Friday speech.Americans are increasingly worried about losing their jobs, a new survey from the Federal Reserve Bank of New York released on Monday showed, a worrying sign at a moment when economists and central bankers are warily monitoring for cracks in the job market.The New York Fed’s July survey of labor market expectations showed that the expected likelihood of becoming unemployed rose to 4.4 percent on average, up from 3.9 percent a year earlier and the highest in data going back to 2014.In fact, the new data showed signs of the labor market cracking across a range of metrics. People reported leaving or losing jobs, marked down their salary expectations and increasingly thought that they would need to work past traditional retirement ages. The share of workers who reported searching for a job in the past four weeks jumped to 28.4 percent — the highest level since the data started — up from 19.4 percent in July 2023.The survey, which quizzes a nationally representative sample of people on their recent economic experience, suggested that meaningful fissures may be forming in the labor market. While it is just one report, it comes at a tense moment, as economists and central bankers watch nervously for signs that the job market is taking a turn for the worse.The unemployment rate has moved up notably over the past year, climbing to 4.3 percent in July. That has put many economy watchers on edge. The jobless rate rarely moves up as sharply as it has recently outside of an economic recession.But the slowdown in the labor market has not been widely backed up by other data. Jobless claims have moved up but remain relatively low. Consumer spending remains robust, with both overall retail sales data and company earnings reports suggesting that shoppers continue to open their wallets.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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    Michigan Supreme Court Ruling to Raise Minimum Wage in the State

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    The ruling, raising the minimum wage and phasing out a lower wage for tipped workers, said legislators had acted improperly in dodging a referendum.The Michigan Supreme Court ruled on Wednesday that legislators had unconstitutionally subverted a voter-sponsored proposal to raise the state’s minimum wage.As a result of the 4-to-3 ruling, labor groups expect Michigan’s hourly minimum wage of $10.33 to increase by at least $2 in February, once the state treasurer calculates inflation adjustments. There will be subsequent cost-of-living increases through 2029.In addition, tipped workers, who currently can be paid as little as $3.84 per hour, will be subject to the same minimum as all other workers by 2029, putting Michigan on a path to be the eighth state to establish a standard wage floor for all workers.Labor activists and union groups celebrated the Michigan court’s decision.“We have finally prevailed over the corporate interests who tried everything they could to prevent all workers, including restaurant workers, from being paid a full, fair wage with tips on top,” Saru Jayaraman, the president of One Fair Wage, a national nonprofit organizing group, said in a statement.Her group is directly cited in the case because of its involvement in gathering the necessary signatures from Michiganders in 2018 to invoke the ballot initiative and send the proposal to the Legislature, which Republicans led at the time.To prevent the wage increase proposal from reaching the 2018 general election ballot, a large cohort of restaurateurs — led by the Michigan Restaurant and Lodging Association — pushed the Legislature to simply adopt the proposal sponsored by One Fair Wage and other groups, which the Legislature did. Legislators then rolled back the law’s provisions after the election.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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    Is the Labor Market About to Crack? It’s the Key Question for the Fed.

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    Central bankers are paying more attention to the strength of the job market as inflation cools. But it’s a tough time to gauge its resilience.David Gurley Jr.’s bank account benefited from a hot pandemic labor market. Mr. Gurley, a video game programmer, switched jobs twice in quick succession, boosting his salary and nabbing a fully remote position.By late last year, he was worried that a pullback in the tech industry could make his job precarious. But when it comes to the outlook now, “it seems like things are more or less OK,” Mr. Gurley, 35, said. Opportunities for rapid wage gains are not as widespread and some layoffs have happened, but he feels he could find a job if he needed one.Mr. Gurley’s experience — a rip-roaring labor market, then a wobbly one and now some semblance of normality — is the kind of postpandemic roller-coaster ride that many Americans have encountered. After breakneck hiring and wage growth in 2022 and 2023, conditions have moderated. Now economic officials are trying to figure out whether the labor market is settling into a new holding pattern or is poised to take a turn for the worse.The answer will be pivotal for the future of Federal Reserve policy.Central bankers spent 2022 and 2023 focused mainly on wrestling rapid inflation under control. They have left interest rates unchanged at 5.3 percent for more than a year now and are likely to keep them there at their meeting this week, making money expensive to borrow in a bid to restrain consumer demand and weigh down the overall economy.But now that inflation is returning to normal, officials are again concentrating keenly on their second major goal: maintaining a strong job market. They are trying to strike a careful balance in which they fully stamp out inflation without causing unemployment to spike in the process.The labor market still looks solid. Joblessness is low by historical standards, and claims for unemployment insurance have stabilized after moving up earlier this year. A fresh jobs report set for release Friday is expected to show that employers continued to hire in July, albeit at a slower pace.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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    Small Banks Say Their Commercial Real Estate Loans Are Fine

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    Community banks are big commercial real-estate lenders. But they say their loans are to sturdy local businesses, not those facing vacant office space.Small banks are feeling misunderstood.They see themselves as integral to neighborhoods across the country: backers of local dry cleaners, dentists and sandwich shops. Investors worry that those banks could be a crisis waiting to happen.The pride and the anxiety both reflect the fact that community banks are big lenders in the commercial real-estate market, which has been rocked by falling property values as large office buildings sit empty.But executives at these firms — which number about 4,100 in total — say there is an important distinction, and some industry analysts concur. They caution that small banks are being lumped in with lenders to the owners of half-empty towers in Manhattan, San Francisco and Chicago, which are in the most trouble.Instead, a majority of commercial building loans by community banks are for smaller buildings — like those housing doctors and local businesses — that tend to be fully leased. And while there are concerns about financial pressure on apartment building landlords if interest rates remain high, missed payments on those types of mortgages have not risen substantially.“The focus has been on office as that is the weak category,” said John Buran, the chief executive officer of Flushing Financial, based in Uniondale, N.Y., which operates branches as Flushing Bank in Queens, Manhattan and Brooklyn and on Long Island. “Most community banks don’t have the type of exposure.”All of Flushing Financial’s loans are performing well, said John Buran, the firm’s chief executive.Graham Dickie/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