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    Egg Shortages Are Driving Demand for Raise-at-Home Chickens

    Which shortage came first: the chicks or the eggs?Spooked by a huge spike in egg prices, some consumers are taking steps to secure their own future supply. Demand for chicks that will grow into egg-laying chickens — which jumped at the onset of the global pandemic in 2020 — is rapid again as the 2023 selling season starts, leaving hatcheries scrambling to keep up.“Everybody wants the heavy layers,” said Ginger Stevenson, director of marketing at Murray McMurray Hatchery in Iowa. Her company has been running short on some breeds of especially prolific egg producers, partly as families try to hedge their bets against skyrocketing prices and constrained egg availability.“When we sell out, it’s not like: Well, we can make another chicken,” she said.McMurray’s experience is not unique. Hatcheries from around the country are reporting that demand is surprisingly robust this year. Many attribute the spike to high grocery prices, and particularly to rapid inflation for eggs, which in December cost 59.9 percent more than a year earlier.“We’re already sold out on a lot of breeds — most breeds — until the summer,” said Meghan Howard, who runs sales and marketing for Meyer Hatchery in northeast Ohio. “It’s those egg prices. People are really concerned about food security.”Google search interest in “raising chickens” has jumped markedly from a year ago. The shift is part of a broader phenomenon: A small but rapidly growing slice of the American population has become interested in growing and raising food at home, a trend that was nascent before the pandemic and that has been invigorated by the shortages it spurred.“As there are more and more shortages, it’s driving more people to want to raise their own food,” Ms. Stevenson observed on a January afternoon, as 242 callers to the hatchery sat on hold, presumably waiting to stock up on their own chicks and chick-adjacent accessories.The Cackle Hatchery received eggs from local farms in Missouri. Hatcheries could theoretically hatch more chicks to meet the surge in demand, but is difficult in today’s economy.Neeta Satam for The New York TimesRaising chickens for eggs takes time and upfront investment. Brown-egg-layer chicks at McMurray’s cost roughly $4 a piece, and coops can cost hundreds or thousands of dollars to construct.Mandy Croft, a 39-year-old from Macon, Ga., serves as administrator on a Facebook group for new chicken farmers and is such an enthusiastic hobbyist that family members call her the “poultry princess.” Even she warned that raising chickens may not save dabblers money, but she said her group was seeing huge traffic nonetheless.“We get hundreds of requests a day for new members, and that’s due to the rising egg cost,” she said.Inflation F.A.Q.Card 1 of 5What is inflation? More

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    U.S. Survey Shows an Uptick in Job Openings, and Not in Layoffs

    The Labor Department found a rise in the number of posted jobs per worker in December, despite the Fed’s efforts to cool the labor market.The nation’s demand for labor only got stronger in December, the Labor Department reported on Wednesday, as job openings rose to 11 million.That brings the number of posted jobs per available unemployed worker, which had been easing in recent months, back up to 1.9 — not what the Federal Reserve has been hoping for as it seeks to quell inflation.“It does make you question whether we continue to see that slowing in net job creation,” said Kathy Bostjancic, chief economist at the financial services company Nationwide. “There’s still a strong demand for workers, and that suggests that the labor market is still running very tight, and too hot.”The 5.5 percent increase in job openings was largely driven by hotels and restaurants, which have been steadily recovering from the pandemic, and jumped sharply to 1.74 million positions posted. Jerome H. Powell, the Fed chair, has been particularly focused on wage inflation in the services sector, but like wages more broadly, increases in hourly earnings in private services have been decelerating.In another sign of confidence among workers, people voluntarily left their jobs at about the same rate as they did in November. Quits as a share of the overall employment base have fallen slightly from 3 percent at the end of 2021, but plateaued over the past few months. Overall, in 2022, about 50 million Americans quit their jobs.Layoffs were also steady in December, staying at the unusually low level that has prevailed since a spike during the pandemic. While pink slips in the tech industry have mounted swiftly — most recently with 22,000 between Microsoft and Google — the bulk of the separations may have occurred after the labor turnover survey ended.Other indicators that employers are shedding workers, such as initial claims for unemployment insurance, have also remained very low by historical standards. Those leaving tech jobs, especially with software development and engineering skills, may have found new opportunities so quickly that they didn’t file for unemployment benefits. More

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    Biden and McCarthy Are Set to Discuss Debt Limit as Both Sides Trade Barbs

    The hours leading up to the meeting have highlighted the differences between the White House and the Republicans who now control the House.WASHINGTON — President Biden will meet with Speaker Kevin McCarthy at the White House on Wednesday afternoon for a discussion that carries high stakes: the need to raise the nation’s borrowing limit in order to avoid a financial crisis.The meeting will be the first between the two leaders since Republicans assumed control of the House and conveyed the speaker title on Mr. McCarthy after a protracted fight.Republicans have refused to raise the statutory debt limit unless Mr. Biden accepts deep cuts in federal spending. The president has said repeatedly that he expects Congress to raise the borrowing cap with no strings attached — and that he will not negotiate conditions for an increase.Wednesday’s meeting will take place behind closed doors, but the hours leading up to it have highlighted the differences between the White House and the Republicans who now control the House. On Tuesday, Mr. Biden and Mr. McCarthy blamed each other for the impasse in raising the debt ceiling. The president called the speaker a “decent man” who had caved to extremists in his party to take power.He made “commitments that are just absolutely off the wall for a speaker of the House to make,” Mr. Biden told reporters on Tuesday.Understand the U.S. Debt CeilingCard 1 of 5What is the debt ceiling? More

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    U.S. Wages Grew More Slowly Than Expected Late Last Year

    The Employment Cost Index, which Federal Reserve officials watch closely as a gauge of pay trends, is picking up more slowly.A measure of pay and benefits that the Federal Reserve has been watching closely amid a strong labor market rose less than expected at the end of 2022, fresh data showed Tuesday.The Employment Cost Index climbed 1 percent in the final quarter of 2022 versus the prior three months, more slowly than the 1.1 percent that economists expected and a slowdown from the previous 1.2 percent reading.The data will probably reaffirm to central bankers that the economy and labor market are cooling, which could help inflation return to normal over time. While wage gains are still faster than normal, the moderation could help central bankers feel comfortable as they adjust interest rates less aggressively than they did throughout 2022.The employment cost measure picked up by 5.1 percent on a yearly basis, close to the 5 percent reading in the previous quarter’s report. In the decade leading up to the pandemic, the index averaged 2.2 percent yearly gains, underscoring the continued rapidness of today’s pace. But a measure of private-sector wages not including benefits, which economists see as a particularly good indicator of labor market tightness, slowed slightly.Fed officials are closely watching the labor market — and wages in particular — as they try to gauge how much further they have to go in their campaign against stubbornly high inflation. While goods price increases that are tied to supply chain snarls are beginning to fade, central bankers are worried that rapid pay gains could keep services costs rising rapidly. Labor is a big expense for service companies, like hotels and restaurants, and firms might pass higher wage costs on to customers in the form of higher prices. Bigger paychecks could also help sustain consumer demand, keeping pressure on prices.The Fed’s next interest-rate decision will be announced on Wednesday. Central bankers are widely expected to raise rates by a quarter of a percentage point, after raising them by three-quarters of a point per meeting for much of 2022 and by half a point at their last gathering, in December.The new adjustment would push rates up to a range of 4.5 to 4.75 percent. The question now is how many more moves the Fed will make — and how long policymakers will hold interest rates at a high level.Steeper borrowing costs deter consumers from making big purchases and businesses from expanding, which can slow the economy and weaken the labor market. Fed officials are hoping that they can cool the economy by just enough to allow supply and demand to come back into balance — causing inflation to moderate — without causing a punishing recession. But they have been clear that they are willing to accept some pain to bring price increases back under control.And they have underlined that they think the labor market needs to slow down to put inflation on a more sustainable path.“We want strong wage increases,” Jerome H. Powell, the Fed chair, said at his last news conference in December. “We just want them to be at a level that’s consistent with 2 percent inflation,” he said, referring to the Fed’s target inflation rate.For now, America’s rate of price increases remains much faster, at 5 percent.Mr. Powell will give another news conference on Wednesday, after the release of the Fed’s rate decision at 2 p.m. Eastern time. More

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    IMF Upgrades Global Economic Outlook as Inflation Eases

    The International Monetary Fund said the world economy was poised for a rebound as inflation eases.WASHINGTON — The International Monetary Fund said on Monday that it expected the global economy to slow this year as central banks continued to raise interest rates to tame inflation, but it also suggested that output would be more resilient than previously anticipated and that a global recession would probably be avoided.The I.M.F. upgraded its economic growth projections for 2023 and 2024 in its closely watched World Economic Outlook report, pointing to resilient consumers and the reopening of China’s economy as among the reasons for a more optimistic outlook.The fund warned, however, that the fight against inflation was not over and urged central banks to avoid the temptation to change course.“The fight against inflation is starting to pay off, but central banks must continue their efforts,” Pierre-Olivier Gourinchas, the I.M.F.’s chief economist, said in an essay that accompanied the report.Global output is projected to slow to 2.9 percent in 2023, from 3.4 percent last year, before rebounding to 3.1 percent in 2024. Inflation is expected to decline to 6.6 percent this year from 8.8 percent in 2022 and then to fall to 4.3 percent next year.After a succession of downgrades in recent years as the pandemic worsened and Russia’s war in Ukraine intensified, the I.M.F.’s latest forecasts were rosier than those the fund released in October.Since then, China abruptly reversed its “zero Covid” policy of lockdowns to contain the pandemic and embarked on a rapid reopening. The I.M.F. also said that the energy crisis in Europe had been less severe than initially feared and that the weakening of the U.S. dollar was providing relief to emerging markets.The I.M.F. predicted previously that a third of the world economy could be in recession this year. However, Mr. Gourinchas said in a news briefing ahead of the release of the report that far fewer countries were now facing recessions in 2023 and that the I.M.F. was not forecasting a global recession.Lukoil oil field in the Baltic Sea. A coordinated plan by the United States and Europe to cap the price of Russian oil exports at $60 a barrel is not expected to substantially curtail its energy revenues.Vitaly Nevar/Reuters“We are seeing a much lower risk of recession, either globally, or even if we think about the number of countries that might be in recession,” Mr. Gourinchas said.Despite the more hopeful outlook, global growth remains weak by historical standards and the war in Ukraine continues to weigh on activity and sow uncertainty. The report also cautions that the global economy still faces considerable risks, warning that “severe health outcomes in China could hold back the recovery, Russia’s war in Ukraine could escalate and tighter global financing costs could worsen debt distress.”Growth in rich countries is expected to be particularly sluggish this year, with nine out of 10 advanced economies likely to have slower growth than they had in 2022.The I.M.F. projects growth in the United States to slow to 1.4 percent this year from 2 percent in 2022. It expects the jobless rate to rise from 3.5 percent to 5.2 percent next year, but that it is still possible that a recession can be avoided in the world’s largest economy.“There is a narrow path that allows the U.S. economy to escape a recession altogether, or if it has a recession, the recession would be relatively shallow,” Mr. Gourinchas said.The slowdown in Europe will be more pronounced, the I.M.F. said, as the boost from the reopening of its economies fades this year and consumer confidence frays in the face of double-digit inflation. In the euro area, growth is projected to slow to 0.7 percent from 3.5 percent.China is projected to pick up the slack with output accelerating to 5.2 percent in 2023 from 3 percent in 2022.Combined, China and India are expected to account for about half of global growth this year. I.M.F. officials said at a press briefing on Monday night that China’s economic trajectory would be a major driver for the world economy, noting that after a period of flux, China appears to have stabilized and is able to fully produce.However, Mr. Gourinchas noted that there were still signs of weakness in China’s property market and that its growth could moderate in 2024. The report described the sector as a “major source of vulnerability” that could lead to widespread defaults by developers and instability in the Chinese financial sector.A surprising contributor to global growth is Russia, suggesting that efforts by Western nations to cripple its economy appear to be faltering. The I.M.F. predicts Russian output to expand 0.3 percent this year and 2.1 percent next year, defying earlier forecasts of a steep contraction in 2023 amid a raft of Western sanctions.A coordinated plan by the United States and Europe to cap the price of Russian oil exports at $60 a barrel is not expected to substantially curtail the country’s energy revenues.“At the current oil price cap level of the Group of 7, Russian crude oil export volumes are not expected to be significantly affected, with Russian trade continuing to be redirected from sanctioning to non-sanctioning countries,” the I.M.F. said in the report.Among the I.M.F.’s most pressing concerns is the growing trend toward “fragmentation.” The war in Ukraine and the global response have divided nations into blocs and reinforced pockets of geopolitical tension, threatening to hamper economic progress.“Fragmentation could intensify — with more restrictions on cross-border movements of capital, workers and international payments — and could hamper multilateral cooperation on providing global public goods,” the I.M.F. said. “The costs of such fragmentation are especially high in the short term, as replacing disrupted cross-border flows takes time.” More

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    Wall St. Is Counting on a Debt Limit Trick That Could Entail Trouble

    If the debt limit is breached, investors expect Treasury to put bond payments first. It’d be politically and practically fraught.Washington’s debt limit drama has Wall Street betting that the United States will employ a fallback option to ensure it can make good on payments to its lenders even if Congress doesn’t raise the nation’s borrowing limit before America runs out of cash.But that untested idea has significant flaws and has been ruled out by the Biden administration, which could make it less of a bulwark against disaster than many investors and politicians are counting on.Many on Wall Street believe that the Treasury Department, in order to avoid defaulting on U.S. debt, would “prioritize” payments on its bonds if it could no longer borrow funds to cover all its expenses. They expect that America’s lenders — the bondholders who own U.S. Treasury debt — would be first in line to receive interest and other payments, even if it meant delaying other obligations like government salaries or retirement benefits.Those assumptions are rooted in history. Records from 2011 and 2013 — the last time the U.S. tipped dangerously close to a debt limit crisis — suggested that officials at the Treasury had laid at least some groundwork to pay investors first, and that policymakers at the Federal Reserve assumed that such an approach was likely. Some Republicans in the House and Senate have painted prioritization as a fallback option that could make failure to raise the borrowing cap less of a disaster, arguing that as long as bondholders get paid, the U.S. will not experience a true default.But the Biden administration is not doing prioritization planning this time around because officials don’t think it would prevent an economic crisis and are unsure whether such a plan is even feasible. The White House has not asked Treasury to prepare for a scenario in which it pays back investors first, according to multiple officials. Janet L. Yellen, the Treasury secretary, has said such an approach would not avoid a debt “default” in the eyes of markets.“Treasury systems have all been built to pay all of our bills when they’re due and on time, and not to prioritize one form of spending over another,” Ms. Yellen told reporters this month.Perhaps more worrisome is that, even if the White House ultimately succumbed to pressure to prioritize payments, experts from both political parties who have studied the temporary fix say it might not be enough to avert a financial catastrophe.Senator Ted Cruz, center, and other Republicans during a news conference on debt ceiling on Capitol Hill last week.Haiyun Jiang/The New York Times“Prioritization is really default by another name,” said Brian Riedl, formerly chief economist to former Republican Senator Rob Portman and now an economist at the Manhattan Institute. “It’s not defaulting on the government’s debt, but it’s defaulting on its obligations.”Congress must periodically raise the nation’s debt ceiling to authorize the Treasury to borrow to cover America’s commitments. Raising the limit does not entail any new spending — it is more like paying a credit-card bill for spending the nation has already incurred — and it is often completed without incident. But Republicans have occasionally attempted to attach future spending cuts or other legislative goals to debt limit increases, plunging the United States into partisan brinkmanship.Understand the U.S. Debt CeilingCard 1 of 5What is the debt ceiling? More

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    Falling Used-Car Demand Puts Pressure on Carvana and Other Dealers

    Dealerships are seeing sales and prices drop as consumers tighten their belts, putting financial pressure on companies like Carvana that grew fast in recent years.About a year ago, the used-car business was a rollicking party. The coronavirus pandemic and a global semiconductor shortage forced automakers to stop or slow production of new cars and trucks, pushing consumers to used-car lots. Prices for pre-owned vehicles surged.Now, the used-car business is suffering a brutal hangover. Americans, especially people on tight budgets, are buying fewer cars as interest rates rise and fears of a recession grow. And improved auto production has eased the shortage of new vehicles.As a result, sales and prices of used cars are falling and the auto dealers that specialize in them are hurting.“After a huge run up in 2021, last year was a reality check,” Chris Frey, senior manager of economic and industry insights at Cox Automotive, a market research firm. “The used market now faces a challenging year as demand weakens.”According to Cox, used-car values fell 14 percent in 2022 and are expected to fall more than 4 percent this year. That shift means many dealers may have no choice but to sell some vehicles for less than they paid.The industry’s difficulties have been exemplified by Carvana, which sells cars online and became famous for building “vending machine” towers where cars can be picked up. The company recently reported a quarterly loss of more than $500 million, and has laid off 4,000 employees.In the last 12 months, Carvana piled up debt. Its stock price has fallen by more than 95 percent in the last 12 months, and three states temporarily suspended its operating license after consumer complaints.“We think there’s a decent chance the company will end up having to file for bankruptcy protection,” said Seth Basham, an Wedbush analyst. “They have too much debt for the level of sales and profitability and can’t support that debt load, and likely will need to restructure.”In a statement to The New York Times, Carvana said it was confident it had “sufficient” funds to turn its business around, noting the company had $2 billion in cash and an additional $2 billion in “other liquidity resources” at the end of the third quarter.It has also hired the investment bank Moelis & Company and is working to reduce its inventory of vehicles and cut the cost of reconditioning them.Used-car values fell 14 percent in 2022. Some dealers may have no choice but to sell some vehicles for less than they paid.An Rong Xu for The New York Times“Millions of satisfied customers have responded positively to Carvana’s e-commerce model for buying and selling cars,” the company said. “Although the current environment and market has drawn attention to the near term, we continued to gain market share in the third quarter of 2022, and we remain focused on our plan to drive to profitability.”CarMax, another used-car giant, is also hurting, although it is on much steadier ground. In the three months that ended in November, its vehicle sales fell 21 percent to 180,000, and net income tumbled 86 percent, to $37.6 million.Inflation F.A.Q.Card 1 of 5What is inflation? More