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    Supply-Chain Kinks Force Small Manufacturers to Scramble

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    Facing delays, shortages and higher prices for raw materials, small manufacturers are finding new sources. Not all are able to pass along the costs.Peak season has arrived for DPS Skis, a manufacturer and distributor of mountain sports gear in Salt Lake City. But this year, the winter challenges began far from the slopes.A kinked-up global supply chain has forced Alex Adema, the chief executive, to find new sources for the wood used in his company’s skis and to get crucial items like bindings and poles.“The window is really short,” he said. “Skiers get excited when they know snow is coming.”Facing long delays in getting finished goods and raw material from Asia and Europe because of a lack of freighter space and overloaded ports, small to medium-size manufacturers like DPS are being forced to adapt quickly.Unlike giants such as Walmart, they lack the means to charter their own cargo ships — or to design their own semiconductors, as Ford Motor said it would do this month. Instead, they are revisiting some of the practices — lean inventories, just-in-time deliveries, and reliance on components from China and other faraway suppliers — that were part of the established factory playbook.“The more control you have over your own supply chain, the better,” said Scott Paul, president of the Alliance for American Manufacturing, a policy group representing manufacturers and the United Steelworkers.In practice, that means meeting needs through less-distant sources. “That way,” Mr. Paul said, “you’re either first in line or have a leg up.” But that can push up costs — a burden that is sometimes passed along to customers, and in other cases is absorbed by the businesses.Until this year, DPS bought the Paulownia species of hardwood for the core of many of its skis from China, but shipping delays meant that running out of the material was a real possibility. At one point as supplies dwindled in October, “we were holding our breath,” Mr. Adema said.DPS found a supplier of Paulownia in North Carolina, and after much testing, the specifications matched up. “You can’t just swap species,” Mr. Adema said. “We’re excited about getting the wood from North Carolina in terms of sustainability and less environmental imprint. Any time you can throw something on a train in the U.S., it’s better than a ship or plane.”Not everything is available domestically, however. Ski poles and ski bindings still come from Europe, and DPS has been forced to resort to airfreight to bring in supplies of these items, even though it’s four times as expensive as shipping by sea.And while DPS ships by boat whenever possible, it’s hardly cheap — the price of shipping a container has gone from roughly $5,000 to $20,000 in some cases, Mr. Adema said. Overall, raw material costs for DPS are up 10 to 15 percent..css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-3btd0c{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-3btd0c{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-3btd0c strong{font-weight:600;}.css-3btd0c em{font-style:italic;}.css-1kpebx{margin:0 auto;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-family:nyt-cheltenham,georgia,’times new roman’,times,serif;font-weight:700;font-size:1.375rem;line-height:1.625rem;}@media (min-width:740px){#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-size:1.6875rem;line-height:1.875rem;}}@media (min-width:740px){.css-1kpebx{font-size:1.25rem;line-height:1.4375rem;}}.css-1gtxqqv{margin-bottom:0;}.css-19zsuqr{display:block;margin-bottom:0.9375rem;}.css-12vbvwq{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;}@media (min-width:740px){.css-12vbvwq{padding:20px;width:100%;}}.css-12vbvwq:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-12vbvwq{border:none;padding:10px 0 0;border-top:2px solid #121212;}.css-12vbvwq[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-12vbvwq[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-12vbvwq[data-truncated] .css-5gimkt:after{content:’See more’;}.css-12vbvwq[data-truncated] .css-6mllg9{opacity:1;}.css-qjk116{margin:0 auto;overflow:hidden;}.css-qjk116 strong{font-weight:700;}.css-qjk116 em{font-style:italic;}.css-qjk116 a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;text-underline-offset:1px;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:visited{color:#326891;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:hover{-webkit-text-decoration:none;text-decoration:none;}These kind of increases are coursing through the economy, and are a primary reason inflation is running at the fastest pace in 31 years, with a 6.2 percent increase in prices in October from a year earlier. But unlike many other companies, DPS hasn’t been able to pass on the higher costs to consumers.“Our ski shop customers place their orders in the spring, and they’ve committed to pricing and delivery dates for this upcoming season,” Mr. Adema said. Designed for backcountry touring as well as resort trails, the company’s skis sell for about $800 to $1,400 a pair. Poles begin at $99. “For us to change prices in midstream would not be good for relations with our community,” Mr. Adema added. “We have to absorb the costs.”Other manufacturers face many of the same issues but have more flexibility on prices. Honey-Can-Do, a maker of housewares like storage carts and shelving in Chicago, has been able to pass along its higher costs, said Steve Greenspon, the company’s owner and chief executive.“Everybody knows what’s going on,” Mr. Greenspon said. “It’s become commonplace and accepted this year for retailers to accept cost increases. I’ve heard from merchants that over 90 percent of vendors are giving them price increases.”This trend marks a turnabout from prepandemic days. “If you tried to pass along a major price increase to a big retailer a couple of years ago, there’d be concerns about your relationship,” Mr. Greenspon said. “But in the current atmosphere, it’s the norm.”Honey-Can-Do’s prices are up roughly 10 percent to 25 percent, depending on the raw materials, freight costs and how much corrugated packaging is used in shipping. Its products include a 65-inch baker’s rack with a cutting board and hanging storage that retails for $119.99 and a toy organizer with 12 bins that sells for $59.99.The company has streamlined its product offerings, narrowing the focus to its top sellers. “We don’t want to use up our container capacity with slower-moving items,” Mr. Greenspon said. “We want to use that space for high-velocity items.”“Instead of multiple colors and many variations, companies are making things more neutral,” he added. “We’re focusing on proven winners.”The company is also increasing the inventory it keeps on hand, buying three additional warehouses to hold goods. “Everybody is loading up on inventory,” Mr. Greenspon said, “and prices for warehouses have spiked.”DPS Skis has had to overcome a kinked-up supply chain with steps like changing the source of the wood that goes into skis.Alex Goodlett for The New York TimesThe company’s production facilities are in Asia, so “the supply chain issue is something that dominates every conversation.” Mr. Greenspon said. He has explored moving production to Mexico or the United States — shortening the supply chain, as experts advise — but hasn’t been able to find a satisfactory supplier yet. “You can’t sell what you don’t have,” he said.Reshoring is a buzzword these days, but it’s premature to expect a domestic manufacturing renaissance as a result of the supply-chain mess, said Willy C. Shih, a professor at Harvard Business School. “We will bring things back, but it’s harder than you think,” he said.Understand the Supply Chain CrisisCard 1 of 5Covid’s impact on the supply chain continues. More

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    Could This Covid Wave Reverse the Recovery? Here’s What to Watch.

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    Some businesses are still hurting, and federal aid has wound down. But economists see sources of resilience and signs of strength.The spread of the Delta variant has delayed office reopenings, disrupted the start of school and generally dashed hopes for a return to normal after Labor Day. But it has not pushed the U.S. economic recovery into reverse.Now that recovery faces a new test: the removal of much of the aid that has helped keep households and businesses afloat for the past year and a half.The Paycheck Protection Program, which distributed hundreds of billions of dollars in grants and loans to thousands of small businesses, concluded last spring. A federal eviction moratorium ended last month after the Supreme Court blocked the Biden administration’s last-minute effort to extend it. Most recently, an estimated 7.5 million people lost unemployment benefits when programs that expanded the system during the pandemic were allowed to lapse.Next up: the Federal Reserve, which on Wednesday indicated it could start pulling back its stimulus efforts as early as November.The one-two punch of a resurgent pandemic and waning aid has led Wall Street forecasters, who were once rosy about the economy’s prospects this fall and winter, to turn increasingly glum. Goldman Sachs said this month that it expected third-quarter data to show a decline in consumer spending, the linchpin of the recovery for the past year. Many economists expect jobs numbers for September to show a second straight month of anemic growth.Yet economists also see important sources of strength that could help the recovery overcome the latest coronavirus wave and possibly fuel a strong rebound on the other side of it. Few believe the overall economy is headed for another recession, let alone a repeat of last year’s collapse.“There’s been a clear deceleration, but I would stress deceleration rather than retrenchment,” said Jay Bryson, chief economist for Wells Fargo. “We certainly think that the expansion will continue.”Rather than posing an immediate threat, what the withdrawal of aid does is leave the recovery with less of a safety net if economists are wrong or if the public health situation worsens — both scenarios that have recurred throughout the pandemic.“I think one should be concerned that we could see the recovery weaken further and that appetite for putting in place more fiscal stimulus has diminished,” said Karen Dynan, a Harvard professor who was a Treasury official under President Barack Obama.And even if the recovery stays on course, it will almost certainly leave out some individuals and businesses, who face an increasingly uncertain fall with little government help. Even under the most optimistic scenarios, it will take months for all the workers who lost benefits this month to find jobs.“Fall will be slower for all of us because we’ve withdrawn the support,” said William E. Spriggs, a Howard University professor and chief economist for the A.F.L.-C.I.O. “There will be a slowdown in the labor market, and it will be disproportionately Black and brown workers who will have to deal with it.”The pandemic isn’t holding back activity as it once did.The Delta variant has caused a clear slowdown in certain sectors, particularly dining and air travel. But so far the decline in activity is nothing like the economywide pullback that the United States experienced in previous Covid waves.State and local government officials have not reimposed the lockdown orders and business restrictions put in place in earlier waves of the pandemic, and they appear disinclined to do so. Consumers appear to have become more careful, but they haven’t abandoned in-person activities, and many businesses have found ways to adapt.Restaurant reservations on OpenTable, for example, have fallen less than 10 percent from their early-July peak. That is a far smaller decline than during the last Covid surge, last winter.“It has moved down, but it’s not the same sort of decline,” Mr. Bryson said of the OpenTable data. “We’re living with it.”One wild card is how the Delta variant could affect the supply of workers. If virus rates remain high, people may hesitate to take jobs requiring face-to-face interaction, particularly where vaccination rates are low. And if schools and day care centers can’t stay open consistently, parents may have difficulty returning to work.The government is still providing a boost.Government aid hasn’t dried up entirely. The Federal Reserve said Wednesday that it could soon begin to pare its $120 billion in monthly bond purchases — which have kept borrowing cheap and money flowing through the economy — but it will almost certainly keep interest rates near zero into next year. Millions of parents will continue to receive monthly checks through the end of the year because of the expanded child tax credit passed in March as part of President Biden’s $1.9 trillion aid package.That bill, known as the American Rescue Plan, also provided $350 billion to state and local governments, $21.6 billion in rental aid and $10 billion in mortgage assistance, among other programs. But much has not been spent, said Wendy Edelberg, director of the Hamilton Project, an economic-policy arm of the Brookings Institution.“Those delays are frustrating,” she said. “At the same time, what that also means is that support is going to continue having an effect over the next several quarters.”Household savings could provide a buffer — if they last.Economists, including officials in the Biden administration, say that as the economy heals, there will be a gradual “handoff” from government aid to the private sector. That transition could be eased by a record-setting pile of household savings, which could help prop up consumer spending as government aid wanes.A lot of that money is held by richer, white-collar workers who held on to their jobs and saw their stock portfolios swell even as the pandemic constrained their spending. But many lower-income households have built up at least a small savings cushion during the pandemic because of stimulus checks, enhanced unemployment benefits and other aid, according to researchers at the JPMorgan Chase Institute.“The good news is that people are going into the fall with some reserves, more reserves than normal,” said Fiona Greig, co-director of the institute. “That can give them some runway in which to look for a job.”The risk, for individual households and the broader economy, is that aid will run out before the private sector can take the baton.Michael Ernette, 48, lost his job assembling manufactured homes in January and despite applying to four to five jobs a day, he hasn’t found work. He used his last unemployment check to pay off as many outstanding bills as possible, and now he is on a countdown to when he can’t make rent.“I took the last payment that we had and I paid everything and I’m roughly good through the end of October,” said Mr. Ernette, who lives near Pittsburgh. “That gives me 60 more days to find employment.”Businesses are entering a critical period.Eighty percent of small businesses are worried about the impact of the Delta variant, according to a recent survey by Alignable, a social network for small business owners. Not all have had sales turn lower, said Eric Groves, the company’s chief executive. But the uncertainty is hitting at a crucial moment, heading into the holiday season.“This is a time of year when business owners in the consumer sector in particular are trying to pull out their crystal ball,” he said. “Now is when they have to be purchasing inventory and doing all that planning.”“We pride ourselves on taking hits and getting back up,” said Ken Giddon, co-owner of the men’s clothing store Rothmans.Mohamed Sadek for The New York TimesRothmans, a century-old men’s clothing retailer in New York, is in one of the hardest-hit sectors in one of the nation’s hardest-hit cities. Yet a co-owner, Ken Giddon, is betting on the future: Last week, the company announced it would open a new location as part of a development project on the West Side of Manhattan.“We pride ourselves on taking hits and getting back up,” he said.The pandemic has been hard, Mr. Giddon said, but it has also created opportunities by driving down commercial rents and leaving fewer competitors. The Delta variant has delayed the return-to-office boom that retailers had been hoping for, but Mr. Giddon expects workers to return eventually — and to need new clothes when they do.“We don’t really care if people go back to work in suits or jeans,” he said. “We just want men to think about buying new clothes again.”In Minneapolis, however, Nicole Pomije is still struggling to make payroll.Ms. Pomije opened her baking business, the Cookie Cups, in 2018 after several years of selling at farmers’ markets and other events in the area. Much of her revenue came from cooking classes and birthday parties — activities that were virtually impossible for much of the past year and a half.Ms. Pomije closed one of her two locations for good in June. The other is hanging on, but barely — the store restarted cooking classes this year, which brought in some money, but parents are nervous about signing up their unvaccinated children for indoor activities.“I can’t tell you how many payrolls I’ve pulled out of my savings account the past two years,” Ms. Pomije said.Last year, Nicole Pomije introduced a set of baking kits aimed at children, which she is selling online.Caroline Yang for The New York TimesMs. Pomije is trying to adapt. Last year, she created a set of baking kits aimed at children, which she is selling online. The product has been a success — she has sold nearly 3,500 kits, and is expanding her offerings — but she has been plagued by supply-chain issues. A crucial shipment from Asia, containing the boxes she uses to package her kits, was held up at the Los Angeles port complex for 60 days.Ms. Pomije said she would be out of business already if she hadn’t received help from the federal government. Now, with more help unlikely, she is hoping holiday sales will help save her business.“This fourth quarter is going to be really critical to our success,” she said. “If we do sell enough product online even to just pay our payroll, rent and critical bills to stay afloat, with enough inventory still to sell, I think we’ll be fine.”Supply issues are putting policymakers in a bind.Early in the pandemic, economists had a simple message for policymakers: Go big. If some aid ended up going to people or businesses that didn’t really need help, that was a reasonable trade-off for the benefit of getting money to the millions who did.Today, the calculus is different. The impact of the pandemic is more tightly focused on a few industries and groups. At the same time, many businesses are having trouble getting workers and materials to meet existing demand. Traditional forms of stimulus that seek to stoke demand won’t help them. If automakers can’t get needed parts, for example, giving money to households won’t lead to more car sales — but it might lead to higher prices.That puts policymakers in a tight spot. If they don’t get help to those who are struggling, it could cause individual hardship and weaken the recovery. But indiscriminate spending could worsen supply problems and lead to inflation. That calls for a more targeted approach, focusing on the specific groups and industries that need it most, said Nela Richardson, chief economist for ADP, the payroll processing firm.“There are a lot of arrows in the quiver still, but you need them to go into the bull’s-eye now rather than just going all over,” Ms. Richardson said. More

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    New York City’s Economy Is Dealt a New Blow by the Delta Variant

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    For New York City and its trillion-dollar economy, September was supposed to mark a return to normal, a moment when Broadway theaters reopened, stores and restaurants hummed, and tourists and office workers again filled the streets.But that long-awaited milestone has been upended by the Delta variant of the coronavirus. One big company after another has postponed plans to come back to Manhattan’s soaring towers. Trade shows have been canceled. Some small businesses have had orders evaporate.It is a setback for a city that has lagged behind the rest of the country in its economic recovery, with a 10.5 percent unemployment rate that is nearly twice the national average. Now, rather than seeing the fuller rebound it was counting on, New York is facing fresh challenges.“The Delta variant is a meaningful threat to the city’s recovery,” said Mark Zandi, the chief economist at Moody’s Analytics. “This is not going to be easy. It’s going to be a long time before New York City gets its economic groove back.”Covid-19 cases have risen sharply in the city since early July, reaching the highest level since April. Hospitalizations have not risen as greatly, and the death rate has remained low. The situation is worrisome enough, however, that the city has begun requiring patrons and employees of bars, restaurants, gyms and indoor entertainment venues to show proof of vaccination — a development unforeseen when the summer began.Staff members checking the vaccination status of patrons at the Beacon Theater.The city has established a vaccination mandate for some indoor establishments. Beginning Sept. 13, it will fine businesses that do not comply. There are signs of hope, or at least determination. Broadway shows, a major tourist magnet, are on track for a September reopening, as is in-person instruction in city schools, which will free some caregivers to return to the work force. But even as the city sponsored an official Homecoming Week, capped by a concert on Saturday in Central Park that was cut short by lightning, cancellations of trade shows and other big events have mounted.Regaining momentum could be painfully slow. James Parrott, an economist with the Center for New York City Affairs at the New School, expects the city to add 20,000 to 30,000 jobs a month in the fall, instead of 40,000 to 50,000, because of Delta.Overall employment remains more than half a million jobs below where it was before the pandemic, with steep losses persisting in the leisure and hospitality industries and in other blue-collar fields. Recouping those service jobs depends in part on the return of white-collar workers who have worked remotely — and have even left the city.Many companies had aimed to bring employees back to the office shortly after Labor Day, at least part-time. But those plans have been scrapped. Facebook, which employs 4,000 people in New York, has put off a return until January, while the financial giants BlackRock and Wells Fargo are now planning a return in October.“Data, not dates, is what drives our approach for returning to the office,” Facebook said in a statement. “We continue to monitor the situation and work with experts to ensure our return to office plans prioritize everyone’s safety.”Boston Properties, which owns nearly 12 million square feet of space in the New York region, said about 40 percent of prepandemic occupants had returned to its buildings earlier in the summer, based on lobby badge swipes. In August, amid Delta’s rise and vacation getaways, that figure had dipped to around 30 percent, said Owen Thomas, the company’s chief executive.“I think the return to the office is a ‘when’ question, not an ‘if’ question,” he said. “Delta is affecting the when.”There are some “if” questions nonetheless. As remote work extends well into a second year, and as much of the contact between professionals and clients continues to be conducted online, it is less clear whether some suburban workers will ever return to the city and to their sometimes-arduous commutes.As companies put off bringing employees back to offices, service businesses that cater to office workers have suffered.An empty plaza in Midtown Manhattan.A shuttered newsstand.As remote work extends well into a second year, the eventual return of some suburbanites to Manhattan’s office towers becomes more uncertain.Greenberg Traurig, a global law firm, was planning to move into four floors of a new building near Grand Central Terminal in October. But many of Greenberg’s lawyers and investor clients relocated to Long Island during the pandemic, prompting the firm to reduce its office space in Midtown to three floors. It plans to open two new offices on Long Island, including one in Bridgehampton.“For me, this is a no-brainer,” said Richard Rosenbaum, the executive chairman. “We accept that this is likely a permanent change in the way people work.”At the same time, corporate get-togethers are in renewed jeopardy. Mr. Zandi, the Moody’s economist, had two in-person speaking engagements set for September and October, but they were recently turned into remote events.“People are nervous about the variant,” he said. “At the very least, it dents New York’s recovery, and if cases continue to mount, then it will delay the recovery.”The on-again, off-again situation among big companies, as well as for events like weddings and parties, has been destabilizing for businesses that depend on them.Patrick Hall, a co-owner of Elan Flowers in the SoHo neighborhood of Manhattan, has been dealing with a flurry of changes as clients have grown more skittish about the virus.Soon-to-be brides are cutting their guest lists in half and changing venues at the last minute. One client, who has not yet paid a deposit, had been emailing Mr. Hall about a nonprofit organization’s gala in October for 300 people and recently went silent.Some large companies had asked Mr. Hall to prepare flowers for return-to-office parties in the fall, but Mr. Hall wonders whether he can bank on those. He had planned to expand his staff of seven people to handle an increase in business in September but is now unsure about how many employees to hire.“I’m trying to hang on and not lose it,” Mr. Hall said. “I need these larger events in September for my business to survive.”New York’s huge travel and leisure industry is also having an uneven recovery.More than any other American city, New York counts on international tourists. So the Biden administration’s decision in late July to continue barring entry to visitors from Europe and several other parts of the world was a blow.“It’s just reinforcing that the recovery isn’t going to happen in a straight line,” said Fred Dixon, the chief executive of NYC & Company, the city’s tourism promotion agency.Having written off the bulk of foreign tourism in August, when New York is usually awash with European vacationers, tourism industry officials fear that the Delta variant could keep visitors away during the crucial holiday season, too.New York’s travel and leisure industry is experiencing an uneven recovery, punctuated by the ups and downs of virus cases.Tourism officials fear that the Delta variant could keep visitors away during the usually bustling holiday season.Domestic travelers have returned to New York in rising numbers, Mr. Dixon said — foot traffic in Times Square has been above 200,000 a day, higher than in May and June — but they do not stay as long or spend as much as overseas tourists.At the Loews Regency, a Park Avenue hotel known as a gathering spot for local power brokers and tourists alike, occupancy has been around 75 percent, according to Jonathan M. Tisch, the chief executive of Loews Hotels. But getting to the full-occupancy levels of late 2019 and early 2020, he said, would require a return of business travelers and especially international tourists.“If you could tell me the impact of the Delta variant, I could tell you the occupancy for the rest of the year,” Mr. Tisch said. “It’s a great unknown.”The Javits Convention Center was preparing to host its first trade show in more than a year when the organizers of the New York International Auto Show said in early August they were calling off their 10-day event there. A week later, the Specialty Food Association announced that its annual Fancy Food Show, scheduled for late September at Javits, would not take place.“Given the current significant national upswing in Covid-19 cases due to the Delta variant, we believe that holding a large indoor event and protecting the general safety of all show participants will be nearly impossible,” the food show’s organizers said.New York City’s largest hotel, the 2,000-room Hilton in Midtown, began taking reservations with a plan to reopen in August. But the hotel’s managers canceled those bookings and tentatively reset the reopening for Sept. 1.Still, some businesses have plowed ahead. Genting Group, a Malaysian operator of casinos, opened a 400-room Hyatt Regency hotel at its Resorts World gambling parlor near Kennedy International Airport in early August.After spending $400 million and three years getting the hotel built, the company did not want to wait any longer to open it, said Bob DeSalvio, the president of Genting Americas East.“We understand that it’s going to take a while for travel to fully ramp back up,” he said, so the hotel was staffed for 50 percent occupancy. But there clearly was pent-up demand, because the hotel’s first weekend was sold out, Mr. DeSalvio said.Caroline Hirsch, the owner of Carolines on Broadway, has not canceled any shows at her comedy club and is moving forward with the New York Comedy Festival, which is scheduled to begin on Nov. 8 and feature more than 100 shows across the city.But this month, she noticed for the first time since reopening in May that some people who bought tickets for the club did not show up.“We were off to a great start,” Ms. Hirsch said. “We thought we were going to be over this hump. Now there’s another hump. We’re all up in the air again.”Ms. Hirsch hopes that the city’s new executive order requiring proof of at least one vaccination to enter many indoor establishments will make audience members more comfortable. The mandate went into effect on Tuesday, and on Sept. 13 the city will begin fining businesses that fail to comply.Other business owners are less sanguine about the mandate; it has produced at least one legal challenge. And as September approaches, the prospect of business as usual, which seemed tantalizingly close a few months ago, is proving elusive.At the Shambhala Yoga & Dance Center in Prospect Heights, Brooklyn, a wave of students signed up after in-person classes resumed in late April, when vaccination efforts were in full swing. But in recent days, attendance has ebbed and flowed with news of the Delta variant’s outbreak, said Deanna Green, Shambhala’s owner.“Once we saw uncertainty around the vaccines and the Delta variant, I have noticed a little bit of a lull,” Ms. Green said. Some yoga classes that typically had 10 students dropped last week to six or seven, she said.“We’re really dependent on a steady flow of people coming through the doors,” she said. “I wish there was more of a level of certainty.”Eduardo Porter More

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    Small Businesses Have Surged in Black Communities. Was It the Stimulus?

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    New research finds a big rise in new businesses despite the pandemic, particularly in predominantly Black neighborhoods.Over the last year, multiple stimulus measures from the federal government have helped families buy groceries, pay rent and build a financial cushion. This aid might have also helped start a new era of entrepreneurship.There has been a surge in start-ups in America that experts have yet to fully explain. But a new study — using data that allows researchers to more precisely track new businesses across time and place — finds that the surge coincides with federal stimulus, and is strongest in Black communities. More

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    As Trillions Flow Out the Door, Stimulus Oversight Faces Challenges

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    A sprawling system meant to police trillions of dollars is showing signs of strain as watchdogs warn of waste, fraud and abuse.WASHINGTON — Lawmakers have unleashed more than $5 trillion in relief aid over the past year to help businesses and individuals through the pandemic downturn. But the scale of that effort is placing serious strain on a patchwork oversight network created to ferret out waste and fraud. More

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    ‘We’re Suffering’: How Remote Work Is Killing Manhattan’s Storefronts

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    #styln-signup .styln-signup-wrapper { max-width: calc(100% – 40px); width: 600px; margin: 20px auto; padding-bottom: 20px; border-bottom: 1px solid #e2e2e2; } A big shift toward working from home is endangering hundreds of locally owned Manhattan storefronts that have been hanging on, waiting for life to return to the desolate streets of Midtown and the Financial District. The […] More

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    China's First Quarter Growth is Expected to Boom on Paper

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    The world’s traditional growth engine is expected to report a double-digit first-quarter jump. But consumers and small business aren’t fully sharing in the spoils.Factories are whirring, new apartments are being snapped up, and more jobs are up for grabs. When China releases its new economic figures on Friday, they are expected to show a remarkable postpandemic surge.The question is whether small businesses and Chinese consumers can fully share in the good times.China is expected to report that its economy grew by a jaw-dropping double-digit figure in the first three months of the year compared with the same period last year. Economists widely estimate the number to be 18 percent to 19 percent. But the growth is as much a reflection of the past — the country’s output shrank 6.8 percent in the first quarter of 2020 from a year earlier — as it is an indication of how China is doing now.A year ago, entire cities were shut down, planes were grounded and highways were blocked to control the spread of a relentless virus. Today, global demand for computer screens and video consoles that China makes is soaring as people work from home and as a pandemic recovery beckons. That demand has continued as Americans with stimulus checks look to spend money on patio furniture, electronics and other goods made in Chinese factories.China’s recovery has also been powered by big infrastructure. Cranes dot city skylines. Construction projects for highways and railroads have provided short-term jobs. Property sales have also helped strengthen economic activity.The port container terminal in Lianyungang, a city in China’s Jiangsu Province. Global demand for Chinese goods is soaring.Hector Retamal/Agence France-Presse — Getty ImagesBut exports and property investment can carry China’s growth only so far. Now China is trying to get its consumers to return to their prepandemic ways, something that other countries will soon have to grapple with as more vaccines become available.Demand for Chinese exports is expected to weaken later in the year. Policymakers have moved to tamp down overheating in the property market and in the corporate sector, where many firms have borrowed beyond their means. Many economists are looking for signs of a broader recovery that relies less on exports and the government and more on Chinese consumers to juice growth.A slow vaccination rollout and fresh memories of lockdowns have left many consumers in the country skittish. Restaurants are still struggling to bounce back. Waiters, shopkeepers and students are not ready yet for the “revenge spending” that economists hope will power growth. When virus outbreaks occur, the Chinese authorities are quick to put new lockdowns in place, hurting small businesses and their customers.To avoid a wave of outbreaks in February, the authorities canceled the travel plans of millions of migrant workers for the Lunar New Year holiday, the biggest holiday in China.“China’s Covid strategy has been to crush it when it reappears, but there seems to be a lot of voluntary social distancing, and that’s affecting services,” said Shaun Roache, chief economist for Asia Pacific at S&P Global. “It’s holding back normalization.”A worker producing engineering equipment for export at a factory in Nantong in Jiangsu Province. Demand for Chinese exports is expected to weaken later in the year. Agence France-Presse — Getty ImagesWu Zhen runs a family business of 13 restaurants and dozens of banquet halls in Yingtan, a city in China’s southeastern Jiangxi Province. When China began to bounce back last year, more people started going to her restaurants for their favorite dishes, like braised pork. But just as she and her employees began preparing for the Lunar New Year, a new Covid-19 outbreak prompted the authorities to limit the number of people allowed to gather in one place to 50.“It should have been the best time of the year for our business,” said Ms. Wu, 33.This year, Ms. Wu decided that closing the entire business over the holiday would be cheaper. “If we want to serve Lunar New Year’s Eve dinner, the labor wage for one day is three times higher than the usual time. We save more money by just closing the doors and the business,” she said. It will be the second year in a row that the restaurants shut their doors over the holiday.Ms. Wu inherited the business from her father two years ago and employs more than 800 people. Before the pandemic, three-quarters of the business revenue came from big banquets for weddings and family reunions. She said business had yet to return to normal after months of crushing virus restrictions.The setbacks facing small-business owners like Ms. Wu are also affecting regular consumers who are jittery about opening their wallets. According to Zhaopin, China’s biggest job recruitment platform, more jobs in hotels and restaurants, entertainment services and real estate are available than a year ago. But households are still being cautious about spending.Families continue to save at a higher rate than they did before the pandemic, something that worries economists like Louis Kuijs, who is head of Asian economics at Oxford Economics. Mr. Kuijs is looking at household savings as an indication of whether Chinese consumers are ready to start splurging after months of being stuck at home.“More people still seem to not go all the way in terms of carefree spending,” he said. “At times there are still some lingering Covid concerns, but there is perhaps also a concern about the general economic situation.”Many families took on more debt last year to buy property and cover expenses during the pandemic. China still largely lacks the kind of social safety net that many wealthy countries provide, and some families have to dip into savings for health care and other big costs.Unlike much of the developed world, China doesn’t subsidize its consumers. Instead of handing out checks to jump-start the economy last year, China ordered state-owned banks to lend to businesses and offered tax rebates.Retail figures on Friday will give a better sense of where consumers are picking up their old spending habits. But data from the first two months of the year already show that consumers like Li Jinqiu are spending less and saving more.Mr. Li, 25, who recently got married, has a 1-month-old baby at home. He had planned to work for the family business, but it has been hit by the pandemic and he doesn’t think there is much opportunity for him if he stays.“The whole family has some sense of crisis,” Mr. Li said. “Because of the pandemic and because of family business, I have a sense of crisis.”Mr. Li said he had received a job offer in sales at a financial firm in Beijing but had delayed the start date to help take care of his newborn. He said he had once borrowed to spend on items like his $150,000 Mercedes. Now he drives a $46,000 electric car and has put off buying new clothes.“When I spend,” he said, “I am more cautious.” More

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    Biden Highlights Small-Business Help, as Problems Persist With Lending Program

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    President Biden visited a Black-owned flooring company as he continued his weeklong push to highlight the $1.9 trillion economic relief package.President Biden dropped by a flooring company in the Philadelphia suburbs on Tuesday to promote an assortment of measures in his $1.9 trillion aid package that are aimed at helping small employers and their workers endure the pandemic’s economic shocks.But Mr. Biden’s most immediate and sweeping small-business initiative — changes he made last month to the Paycheck Protection Program — has been mired in logistical challenges. With the relief program scheduled to end in just two weeks, the effect of his modifications will be blunted unless Congress extends it.Last month, Mr. Biden abruptly altered the rules of the $687 billion program to make business owners who employ only themselves eligible for more money. The move was intended to address a clear racial and gender disparity in the relief effort: Female and minority owners, who are much more likely to run tiny businesses than larger ones, were disproportionately hobbled by an earlier rule that based the size of sole proprietors’ loans on their annual profit.Many companies were shut out of the program because of that restriction, while others got loans as small as $1. The administration switched to a more forgiving formula that lets those businesses instead use their gross income, a change that significantly increased the money available to millions of business owners. Its implementation, though, has been a mess.The program’s government-backed loans are made by banks. The largest lender, JPMorgan Chase, refused to make the change, saying it lacked the time to update its systems before March 31, the program’s scheduled end date. The second-largest lender, Bank of America, decided to update all of its applications manually, causing anxiety and confusion among its borrowers. Wells Fargo released its revised application on Tuesday and told borrowers with pending applications that they had just three days to reapply using the new form.Compounding the problem is that Mr. Biden’s change was not retroactive, which has prompted backlash from the hundreds of thousands of borrowers who got much smaller loans than they would now qualify for. Many have used social media or written to government officials to vent their anger.JagMohan Dilawri, a self-employed chauffeur in Queens, got a $1,900 loan in February. Under the new rules, he calculates that he would have been eligible for around $15,000. That wide gulf frustrated Mr. Dilawri, who has struggled to keep up on his mortgage, car loan and auto insurance payments since the pandemic took hold.“When the Biden administration came, they said, ‘We will be fair with everyone,’” he said. “But this is unfair.”Officials at the Small Business Administration, which manages the program, said only Congress could fix that disparity. Absent legislative action, loans that were completed before the rule was revised “cannot be changed or canceled,” said Matthew Coleman, an agency spokesman.On Tuesday, the Senate confirmed Mr. Biden’s nominee to run the Small Business Administration, Isabel Guzman, by an 81-to-17 vote.Despite the concerns, Mr. Biden was met with praise in Chester, Pa., when he visited Smith Flooring, a Black-owned business that supplies and installs flooring. White House officials said the shop cut payroll over the last year, from 22 union employees to 12, after revenues declined by 20 percent during the pandemic. It has survived, the officials said, thanks in part to two rounds of loans from the Paycheck Protection Program, which Congress established last year during the Trump administration to help small businesses.“This is a great outfit. This is a union shop,” Mr. Biden said in brief remarks. Its employees, he said, “work like the devil, and they can make a decent wage, a living wage.”The owners of Smith Flooring, Kristin and James Smith, secured their second loan from the program as part of one of the Biden administration’s changes, which created a two-week exclusive period for certain very small businesses to receive loans. They thanked Mr. Biden for his efforts and for visiting Chester.Mr. Biden’s aid bill, signed last week, added $7 billion to the program and funded others to help struggling businesses, including a $28 billion grant fund for restaurants. The law also set aside additional money for other relief efforts run by the Small Business Administration, including a long-delayed grant program for music clubs and other live-event businesses, which the agency said would start accepting applications early next month.Lenders are scrambling to carry out the administration’s changes to the Paycheck Protection Program and finish processing a flood of applications before March 31. The American Institute of Certified Public Accountants called the deadline “unrealistic,” and 10 banking groups sent a letter to lawmakers urging Congress to give them more time.Advocacy groups are also calling, with increasing urgency, for both an extension and a fix to make the rule change for sole proprietors retroactive.Mr. Biden met with the owners of Smith Flooring, Kristin and James Smith, in Chester, Pa., on Tuesday.Doug Mills/The New York Times“We absolutely need those changes,” said Ashley Harrington, the federal advocacy director at the Center for Responsible Lending. In December, Congress made retroactive changes to Paycheck Protection Program loans for farmers that allowed those borrowers to recalculate and increase previously finalized loans..css-yoay6m{margin:0 auto 5px;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}@media (min-width:740px){.css-yoay6m{font-size:1.25rem;line-height:1.4375rem;}}.css-1dg6kl4{margin-top:5px;margin-bottom:15px;}.css-k59gj9{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-flex-direction:column;-ms-flex-direction:column;flex-direction:column;width:100%;}.css-1e2usoh{font-family:inherit;display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-box-pack:justify;-webkit-justify-content:space-between;-ms-flex-pack:justify;justify-content:space-between;border-top:1px solid #ccc;padding:10px 0px 10px 0px;background-color:#fff;}.css-1jz6h6z{font-family:inherit;font-weight:bold;font-size:1rem;line-height:1.5rem;text-align:left;}.css-1t412wb{box-sizing:border-box;margin:8px 15px 0px 15px;cursor:pointer;}.css-hhzar2{-webkit-transition:-webkit-transform ease 0.5s;-webkit-transition:transform ease 0.5s;transition:transform ease 0.5s;}.css-t54hv4{-webkit-transform:rotate(180deg);-ms-transform:rotate(180deg);transform:rotate(180deg);}.css-1r2j9qz{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-e1ipqs{font-size:1rem;line-height:1.5rem;padding:0px 30px 0px 0px;}.css-e1ipqs a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;}.css-e1ipqs a:hover{-webkit-text-decoration:none;text-decoration:none;}.css-1o76pdf{visibility:show;height:100%;padding-bottom:20px;}.css-1sw9s96{visibility:hidden;height:0px;}#masthead-bar-one{display:none;}#masthead-bar-one{display:none;}.css-1cz6wm{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;font-family:’nyt-franklin’,arial,helvetica,sans-serif;text-align:left;}@media (min-width:740px){.css-1cz6wm{padding:20px;width:100%;}}.css-1cz6wm:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-1cz6wm{border:none;padding:20px 0 0;border-top:1px solid #121212;}Frequently Asked Questions About the New Stimulus PackageThe stimulus payments would be $1,400 for most recipients. Those who are eligible would also receive an identical payment for each of their children. To qualify for the full $1,400, a single person would need an adjusted gross income of $75,000 or below. For heads of household, adjusted gross income would need to be $112,500 or below, and for married couples filing jointly that number would need to be $150,000 or below. To be eligible for a payment, a person must have a Social Security number. Read more. Buying insurance through the government program known as COBRA would temporarily become a lot cheaper. COBRA, for the Consolidated Omnibus Budget Reconciliation Act, generally lets someone who loses a job buy coverage via the former employer. But it’s expensive: Under normal circumstances, a person may have to pay at least 102 percent of the cost of the premium. Under the relief bill, the government would pay the entire COBRA premium from April 1 through Sept. 30. A person who qualified for new, employer-based health insurance someplace else before Sept. 30 would lose eligibility for the no-cost coverage. And someone who left a job voluntarily would not be eligible, either. Read moreThis credit, which helps working families offset the cost of care for children under 13 and other dependents, would be significantly expanded for a single year. More people would be eligible, and many recipients would get a bigger break. The bill would also make the credit fully refundable, which means you could collect the money as a refund even if your tax bill was zero. “That will be helpful to people at the lower end” of the income scale, said Mark Luscombe, principal federal tax analyst at Wolters Kluwer Tax & Accounting. Read more.There would be a big one for people who already have debt. You wouldn’t have to pay income taxes on forgiven debt if you qualify for loan forgiveness or cancellation — for example, if you’ve been in an income-driven repayment plan for the requisite number of years, if your school defrauded you or if Congress or the president wipes away $10,000 of debt for large numbers of people. This would be the case for debt forgiven between Jan. 1, 2021, and the end of 2025. Read more.The bill would provide billions of dollars in rental and utility assistance to people who are struggling and in danger of being evicted from their homes. About $27 billion would go toward emergency rental assistance. The vast majority of it would replenish the so-called Coronavirus Relief Fund, created by the CARES Act and distributed through state, local and tribal governments, according to the National Low Income Housing Coalition. That’s on top of the $25 billion in assistance provided by the relief package passed in December. To receive financial assistance — which could be used for rent, utilities and other housing expenses — households would have to meet several conditions. Household income could not exceed 80 percent of the area median income, at least one household member must be at risk of homelessness or housing instability, and individuals would have to qualify for unemployment benefits or have experienced financial hardship (directly or indirectly) because of the pandemic. Assistance could be provided for up to 18 months, according to the National Low Income Housing Coalition. Lower-income families that have been unemployed for three months or more would be given priority for assistance. Read more.“To have that change be made for one group and not be made for another — especially for a group that has so many Black and Latino business owners that have struggled so much in this crisis — really raised alarms and red flags for us,” Ms. Harrington said.Some key Democratic lawmakers said they were willing to extend the date. Representative Nydia M. Velázquez, a New York Democrat who leads the House Small Business Committee, said she was working with the Small Business Administration and congressional Republicans “to find a path forward, whether that be through agency action or additional legislation.”“For those sole proprietors who applied before the new rules took effect, we understand their concerns and are eager to work with Congress to resolve them,” said Bharat Ramamurti, the deputy director of the National Economic Council and the White House’s point person on the relief program.Mr. Ramamurti said that “tens of thousands” of loans had been approved by around 4,000 lenders using the new formula, and that some large lenders — including the online lender Biz2Credit and two banks, Cross River Bank and Customers Bank, that make loans for dozens of partner companies — said they had successfully made the needed updates.But many applicants are struggling. Chase’s refusal to make the change provoked outrage on social media from its customers. “What a slap in the face,” one tweeted at the bank. “Please make this right,” another begged.And some Bank of America customers are mired in confusion over the bank’s process, which required loan seekers to apply in writing for an incorrect amount — one that used the older formula — and rely on the bank’s staff to correct their applications by hand.Asim Khan, an environmental consultant in Ann Arbor, Mich., has been trying for two weeks to get his Bank of America application untangled. He has spent hours on the phone and on hold. “I’ve had two reps tell me they’ve seen it work for people, but yet they can’t make it work for me,” he said. “It’s all super clumsy.”Bill Halldin, a Bank of America spokesman, said the bank was “working with each individual client to manually update their loan information, which is the best way for us to help them take advantage of the recently announced rule change.”While the program still has two weeks left, the big banks are already shutting down. Bank of America stopped accepting new applications last week, and Chase plans to close its application system on Friday. More