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    Why Are Jobless Claims Still High? For Some, It’s the Multiple Layoffs.

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    A California study shows the extent of dependence on benefits over the last year and how many people have shuttled in and out of work.Jobs are coming back. Businesses are reopening. But a year after the pandemic jolted the economy, applications for unemployment benefits remain stubbornly, shockingly high — higher on a weekly basis than at any point in any previous recession, by some measures.And headway has stalled: Initial weekly claims under regular and emergency programs, combined, have been stuck at just above one million since last fall, and last week was no exception, the Labor Department reported Thursday.“It goes up a little bit, it goes down, but really we haven’t seen much progress,” said AnnElizabeth Konkel, an economist for the career site Indeed. “A year into this, I’m starting to wonder, what is it going to take to fix the magnitude problem? How is this going to actually end?”The continued high rate of unemployment applications has been something of a mystery for many economists. With the pandemic still suppressing activity in many sectors, it makes sense that joblessness would remain high. But businesses are reopening in much of the country, and trends on employment and spending are generally improving. So shouldn’t unemployment filings be falling?New evidence from California may offer a partial explanation: According to a report released Thursday by the California Policy Lab, a research organization affiliated with the University of California, nearly 80 percent of the unemployment applications filed in the state last month were from people who had been laid off earlier in the pandemic, gotten back to work, and then been laid off again.Such repeat claims were particularly common in the information sector — which in California includes many film and television employees who have been sidelined by the pandemic — and in the hard-hit hotel and restaurant industries, as well as in construction.The Policy Lab researchers had access to detailed information from the state that allowed them to track individual workers through the system, something not possible with federal data.California’s economy differs from that of the rest of the country in myriad ways, and the pandemic has played out differently there than in many other places. But if the same patterns hold elsewhere, it suggests that the ups and downs of the pandemic — lockdowns and reopenings, restrictions that tighten and ease as virus cases rise and fall — have left many workers stuck in a sort of limbo.A restaurant may recall some workers when indoor dining is allowed, only to lay them off again a few weeks later when restrictions are reimposed. A worker may find a temporary job at a warehouse, or pick up a few hours of work on a delivery app, but be unable to find a more stable job.“This shows the oscillation of employed, unemployed, employed, unemployed — people cycling back into the system,” said Elizabeth Pancotti, policy director at Employ America, a group in Washington that has been an advocate for the unemployed. “We did not see that in previous recessions.”What that instability will mean for workers’ long-term prospects remains unclear. Economic research has found that extended periods of unemployment can leave workers at a permanent disadvantage in the labor market. But there is little precedent for a period of such prolonged instability.Distributing food in Inglewood, Calif., in January. The pandemic’s economic effects hit Black workers in the state especially hard.Jenna Schoenefeld for The New York Times“We don’t know what happens if you’re out of work for two months, you come back to work for two months, you’re out of work for two months, you keep going back and forth,” Ms. Pancotti said.The California data shows how the economic effects of the pandemic have been concentrated among certain industries and demographic groups — and how the consequences continue to mount for the most affected workers, even as the crisis eases for many others.Nearly 90 percent of Black workers in the state have claimed unemployment benefits at some point in the pandemic, according to the Policy Lab analysis, compared with about 40 percent of whites. Younger and less-educated workers have been hit especially hard.Those totals include filings under the federal Pandemic Unemployment Assistance program, which covers people left out of the regular unemployment system, a group that disproportionately includes Black workers. The record-keeping for that program has been plagued by overcounting and fraudulent claims. But even a look at the state’s regular unemployment insurance program, which hasn’t faced the same issues, reveals remarkable numbers: Close to three in 10 California workers have claimed benefits during the crisis, and more than four in 10 Black workers.“That degree of inequality is mind-blowing,” said Till von Wachter of the University of California, Los Angeles, one of the report’s authors.Many of those who lost jobs early in the crisis have since returned to work. But millions have not. The Policy Lab found that nearly four million Californians had received more than 26 weeks of benefits during the pandemic, a rough measure of long-term unemployment.“We have solidly shifted into a world where a large-scale problem of long-term unemployment is now a reality,” Dr. von Wachter said. Black workers, older workers, women and those with less education have been more likely to end up out of work for extended periods.Nationally, nearly six million people were enrolled as of late February in federal extended-benefit programs that cover people who have exhausted their regular benefits, which last for six months in most states. The aid package signed by President Biden last week ensures that those programs will continue until fall, but benefits alone won’t prevent the damage that prolonged joblessness can do to workers’ careers and mental and physical health.“The recovery needs to be on the scale of being a once-in-a-generation economic upswing to really pull those people back into the labor market,” Ms. Konkel said.The latest data provides little sign of that happening. More than 746,000 people filed first-time applications for state unemployment benefits last week, up 24,000 from the previous week, according to the Labor Department. In addition, 282,000 filed for Pandemic Unemployment Assistance.Most forecasters expect the labor market recovery to accelerate in coming months, as warmer weather and rising vaccination rates allow more businesses to reopen, and as the new injection of government aid encourages Americans to go out and spend. Policymakers at the Federal Reserve said on Wednesday that they expected the unemployment rate to fall to 4.5 percent by the end of the year, a significant upgrade over the 5 percent they forecast three months ago.“We’re already starting to see improvement now, and I think that will start to accelerate fairly quickly,” said Daniel Zhao, an economist at the career site Glassdoor.But government aid can do only so much as long as the pandemic continues to limit consumers’ behavior. The pace of the recovery now, Mr. Zhao said, depends on a factor beyond the scope of normal economic analysis.“The dominating factor right now is how quickly we can get vaccines in arms,” he said. More

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    Biden and the Fed Leave 1970s Inflation Fears Behind

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    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesSee Your Local RiskNew Variants TrackerVaccine RolloutAdvertisementContinue reading the main storySupported byContinue reading the main storyBiden and the Fed Leave 1970s Inflation Fears BehindAdministration and Fed officials argue that workers not getting enough stimulus help is a larger concern than potential spikes in consumer prices.Federal Reserve Chair Jerome H. Powell has brushed off concerns about inflation, saying the bigger risk to the economy is doing too little rather than doing too much.Credit…Pool photo by Susan WalshJim Tankersley and Feb. 15, 2021Updated 5:54 p.m. ETWASHINGTON — Presidents who find themselves digging out of recessions have long heeded the warnings of inflation-obsessed economists, who fear that acting aggressively to stimulate a struggling economy will bring a return of the monstrous price increases that plagued the nation in the 1970s.Now, as President Biden presses ahead with plans for a $1.9 trillion stimulus package, he and his top economic advisers are brushing those warnings aside, as is the Federal Reserve under Chair Jerome H. Powell.After years of dire inflation predictions that failed to pan out, the people who run fiscal and monetary policy in Washington have decided the risk of “overheating” the economy is much lower than the risk of failing to heat it up enough.Democrats in the House plan to spend this week finalizing Mr. Biden’s plan to pump nearly $2 trillion into the economy, including direct checks to Americans and more generous unemployment benefits, with the aim of holding a floor vote as early as next week. The Senate is expected to quickly take up the proposal as soon as it clears the House, in the hopes of sending a final bill to Mr. Biden’s desk early next month. Fed officials have signaled that they plan to keep holding rates near zero and buying government-backed debt at a brisk clip to stoke growth.The Fed and the administration are staying the course despite a growing outcry from some economists across the political spectrum, including Lawrence Summers, a former Treasury secretary and top adviser in the Clinton and Obama administrations, who say Mr. Biden’s plans could stir up a whirlwind of rising prices.No one better embodies the sudden break from decades of worry over inflation — in Washington and elite circles of economics — than Janet L. Yellen, the former Federal Reserve chair and current Treasury secretary. Ms. Yellen spent the bulk of her career fighting in a war against inflation that economists have been waging for more than a half century. But at a time when the American economy remains 10 million jobs short of its pre-pandemic levels, and millions of people face hunger and eviction, she appears to be ready to move on.President Biden and Janet Yellen, the Treasury secretary, are pursuing a $1.9 trillion stimulus package to help struggling households and businesses make it through the pandemic downturn.Credit…Pete Marovich for The New York Times“I have spent many years studying inflation and worrying about inflation,” Ms. Yellen told CNN earlier this month. “But we face a huge economic challenge here and tremendous suffering in the country. We have got to address that. That’s the biggest risk.”In the guarded language of a Fed chair, Mr. Powell used a speech last week to push back on the idea that the economy was at risk of overheating. He said that prices could show a brief pop in the coming months, as they rebound from very low readings last year, and he said the economy could see a “burst” of spending and temporarily higher inflation when it fully reopened. But he said he expected such increases to be short-lived — not the sustained spiral that many economists worry about.“That’s really not going to mean very much,” Mr. Powell said, noting that inflation has trended lower for decades. “Inflation dynamics will evolve, but it’s hard to make the case why they would evolve very suddenly, in this current situation.”A small but influential group of economists is questioning that view — in particular, calling for Mr. Biden to scale back his economic aid plans, which include sending direct payments to most American households, increasing the size and duration of benefits for the long-term unemployed and spending big to accelerate Covid vaccine deployment across the country.They argue that the size of the package outstrips the size of the hole the coronavirus has left in the economy. With so many dollars chasing a limited supply of goods and services, the argument goes, purchasing power could erode or the Fed might need to abruptly lift interest rates, which could send the economy back into a downturn.“It’s hard to look at all those factors and not conclude there’s going to be inflationary pressure,” said Michael R. Strain, an economist at the conservative American Enterprise Institute who supported relief efforts earlier in the recession but was among the first economists to warn Mr. Biden’s plans could set off price spikes. “My worry is that by pushing the economy so hard, that will lead to some overheating.”The Coronavirus Outbreak More

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    Pandemic’s Toll on Housing: Falling Behind, Doubling Up

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    #masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesSee Your Local RiskVaccine InformationWuhan, One Year LaterAdvertisementContinue reading the main storySupported byContinue reading the main storyPandemic’s Toll on Housing: Falling Behind, Doubling UpEviction moratoriums don’t keep arrears from piling up, and aid to renters may not reach the most vulnerable.Angelica Gabriel and Felix Cesario of Mountain View, Calif., moved out of the bedroom they shared with their two youngest children so they could rent it out. They now sleep in the living room.Credit…Sarahbeth Maney for The New York TimesFeb. 6, 2021Updated 2:54 p.m. ETAs the pandemic enters its second year, millions of renters are struggling with a loss of income and with the insecurity of not knowing how long they will have a home. Their savings depleted, they are running up credit card debt to make the rent, or accruing months of overdue payments. Families are moving in together, offsetting the cost of housing by finding others to share it.The nation has a plague of housing instability that was festering long before Covid-19, and the pandemic’s economic toll has only made it worse. Now the financial scars are deepening and the disruptions to family life growing more severe, leaving a legacy that will remain long after mass vaccinations.Even before last year, about 11 million households — one in four U.S. renters — were spending more than half their pretax income on housing, and overcrowding was on the rise. By one estimate, for every 100 very low-income households, only 36 affordable rentals are available.Now the pandemic is adding to the pressure. A study by the Federal Reserve Bank of Philadelphia showed that tenants who lost jobs in the pandemic had amassed $11 billion in rental arrears, while a broader measure by Moody’s Analytics, which includes all delinquent renters, estimated that as of January they owed $53 billion in back rent, utilities and late fees. Other surveys show that families are increasingly pessimistic about making their next month’s rent, and are cutting back on food and other essentials to pay bills.On Friday, as monthly jobs data provided new evidence of a stalling recovery, President Biden underscored the housing insecurity faced by millions. The rental assistance in his $1.9 trillion relief plan, he said, is essential “to keep people in their homes rather than being thrown out in the street.”Bobbing above the surface of a missed payment, the most desperate are already improvising by moving into even more crowded homes, pairing up with friends and relatives, or taking in subtenants.That is the case with Angelica Gabriel and Felix Cesario, residents of a two-story apartment complex in Mountain View, Calif., largely inhabited by cooks and waitresses and maids and laborers — the kinds of workers hit hardest by the pandemic.With their incomes reduced, Ms. Gabriel, a fast-food worker, and her husband, a landscaper, recently moved out of the bedroom they shared with their two youngest children, 6 and 8. They now rent the bedroom to a friend of a friend, while the couple and the kids sleep on a mattress in the living room. (Two daughters, 14 and 20, continue to share the other bedroom.)The arrangement has kept them current by bringing in $850 toward the $2,675.37 monthly rent, which Ms. Gabriel reeled off to the penny.“We weren’t able to pay the rent by ourselves,” she said in Spanish. “Suddenly the hours fell. You couldn’t pay, buy food.”Such changes are not directly reflected in rent rolls or credit card bills, but various studies show that disrupted and overcrowded households have a host of knock-on effects, including poorer long-term health and a decline in educational attainment.Reflecting the broader economy, the pain in the U.S. housing market is most severe at the bottom. Surveys of large landlords whose units tend to be higher quality and more expensive have been remarkably resilient through the pandemic. Surveys of small landlords and low-income tenants show that late fees and debt are piling up.One measure of relief came when Mr. Biden extended — by two months — a federal eviction moratorium that was scheduled to expire at the end of January, as states and cities also moved to extend their own eviction moratoriums. In addition, $25 billion in federal rental aid approved in December is set to be distributed.But for every million or so households who are evicted in the United States each year, there are many more millions who move out before they miss a payment, who cut back on food and medicine to make rent, who take up informal housing arrangements that exist outside the traditional landlord-tenant relationship.The Coronavirus Outbreak More

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    Biden Reinstates Aluminum Tariffs, Reversing Trump's Decision

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    AdvertisementContinue reading the main storySupported byContinue reading the main storyBiden Reinstates Aluminum Tariffs in One of His First Trade MovesThe move suggests the Biden administration may be inclined to maintain President Trump’s hefty tariffs, a decision that will please unions but disappoint manufacturers.President Biden at the Wisconsin Aluminum Foundry in Manitowic, Wis., in September. The tariffs on foreign aluminum, which were imposed by the Trump administration, aim to protect American producers.Credit…Erin Schaff/The New York TimesFeb. 2, 2021Updated 5:36 p.m. ETWASHINGTON — President Biden reinstated tariffs on aluminum exported from the United Arab Emirates on Monday evening, reversing President Donald J. Trump’s decision to lift them on his last day in office.The decision is one of Mr. Biden’s first significant moves on trade and suggests that his administration may be inclined to maintain the type of hefty tariffs Mr. Trump imposed on foreign metals to protect domestic industry. That position found favor with unions, but disappointed industries and businesses that have argued the tariffs raise costs.Mr. Biden and his deputies have so far declined to say whether they would keep or remove the spate of tariffs Mr. Trump imposed on a range of products, from steel and aluminum to Chinese imports. Instead, his top officials have said that the administration plans to carry out a comprehensive review of the tariffs’ economic effects before making any decisions.The tariffs on foreign aluminum are designed to protect American producers, which have struggled to compete with low-priced foreign products and been forced to shut down many domestic smelters.In March 2018, Mr. Trump imposed a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports from a variety of countries, including the United Arab Emirates, saying their metal exports had put American aluminum producers out of business and therefore threatened national security. He subsequently exempted aluminum from Argentina, Australia, Canada and Mexico and, just hours before his term ended, lifted the aluminum tariffs on the UAE.Mr. Trump’s decision appeared to be motivated more by political than economic considerations. The decision to lift tariffs on the United Arab Emirates was led by White House officials, including Mr. Trump’s son-in-law, Jared Kushner, who had just carried out extensive negotiations to normalize relations between Israel and the United Arab Emirates. It was made without the support of many specialists in the Commerce Department and the United States Trade Representative, according to a person familiar with the deliberations.Before coming into office, Mr. Trump also pursued various real estate projects in the United Arab Emirates, including hotels and golf courses. The Trump International Golf Club in the city of Dubai opened for business in early 2017, soon after Mr. Trump became president.Jen Psaki, the White House press secretary, said in a briefing on Tuesday that Mr. Trump’s decision to lift the tariffs on the U.A.E. “at the last hour was made clearly, in our view, on the basis of foreign policy issues unrelated to trade.” She said the Biden administration was still reviewing other tariffs to determine what steps need to be taken.In lifting the tariffs, Mr. Trump said the United States and the U.A.E., a major exporter of aluminum, had an important security relationship, and had carried out talks to find another way to address the threat to American national security. The Trump administration replaced the tariffs on aluminum with a quota, which would limit export surges from the country.But in a proclamation issued late Monday evening, Mr. Biden said the concerns that had fueled the tariffs in the first place still existed. “In my view, the available evidence indicates that imports from the U.A.E. may still displace domestic production, and thereby threaten to impair our national security,” Mr. Biden said.Tom Conway, the president of the United Steelworkers International union, applauded the move, saying that Mr. Trump’s actions had constituted “a blatant attack on American workers.”“Trump’s plan to lift tariffs on imports from the United Arab Emirates would undermine the effectiveness of the program and essentially exempt the vast majority of aluminum imports,” Mr. Conway said.The United Arab Emirates is one of the world’s largest aluminum exporters, the result of an abundant petroleum supply that keeps the cost of the energy-intensive aluminum production process low. Between January and November of last year, it exported more aluminum to the United States than any other country except Canada.American aluminum producers have struggled to compete with a surge in production from state-funded factories in countries like China, Russia and the United Arab Emirates, as well as growing aluminum production in countries with a lower cost of energy, like Canada. Because of various trade curbs, the United States imports a limited amount of aluminum directly from China, but China’s massive production still pushes down metal prices worldwide, making it harder for American businesses to compete.The United States went from being the world’s top producer of aluminum two decades ago to to being surpassed by China, Russia, the U.A.E., Canada and other countries. It produced 741,000 metric tons of primary aluminum in 2017, the lowest level since 1951 and just 1.2 percent of the global supply.But the tariffs have sparked an outcry from downstream American industries that use steel and aluminum to make products like cars, boats, recreational vehicles and cans. These producers say the tariffs have increased their costs, narrowing their profit margins and making it more difficult for their products to compete on the global market.Some critics have also denounced the national security rationale for the tariffs, pointing out that the bulk of American aluminum imports come from Canada, a close military ally.AdvertisementContinue reading the main story More

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    Is Rivian the Next Tesla? Investors Bet Big on Electric Truck Maker

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    The Rivian factory in Normal, Ill. The company is hoping to cash in on the same opportunity that Tesla identified and has advanced: the electrification of transportation.Credit…Lyndon French for The New York TimesSkip to contentSkip to site indexThe Next Tesla? Investors Bet Big on Electric Truck Maker RivianRivian, which has raised another $2.65 billion, plans to sell a pickup truck and S.U.V. it has worked on for more than a decade.The Rivian factory in Normal, Ill. The company is hoping to cash in on the same opportunity that Tesla identified and has advanced: the electrification of transportation.Credit…Lyndon French for The New York TimesSupported byContinue reading the main storyJan. 19, 2021Updated 6:24 p.m. ETPLYMOUTH, Mich. — It’s hard to imagine any company matching Tesla’s rocketlike rise. But if any electric car start-up could aspire to be the “next Tesla,” it would be Rivian.Founded in 2009, Rivian is preparing to produce an electric pickup truck and a sport utility vehicle. Both models are supposed to be on the road by the summer and will be made in a former Mitsubishi plant in Illinois. Rivian is also developing electric delivery trucks for Amazon.What distinguishes Rivian, however, is its extraordinary roster of investors. Amazon is not just a customer; it has put a lot of money into Rivian. Others backers include BlackRock, Fidelity, T. Rowe Price and Ford Motor, which plans to introduce a vehicle based on Rivian’s technology.The latest injection of capital was revealed Tuesday, when Rivian said it had raised $2.65 billion from a group led by funds and accounts advised by T. Rowe Price. Other investors included Fidelity and Amazon’s Climate Pledge Fund. The investment round values the company at more than $27 billion, and brings the total investment in the company to $8 billion since the beginning of 2019.“We have been eagerly anticipating the arrival of 2021 and, with it, the exhilaration of Rivian starting to deliver its revolutionary products to customers,” Joseph Fath, a T. Rowe Price portfolio manager, said in a statement.A hefty war chest is no guarantee of success, and producing a new car from scratch is a monumental task for established automakers, let alone a start-up.“The process of creating something like this is anything but simple,” RJ Scaringe, Rivian’s founder and chief executive, said in an interview. “It’s a complex orchestra, several thousand parts coming from several hundred suppliers. It’s definitely far more complex than people think and far more complex than I thought it would be.”Rivian is hoping to cash in on the same opportunity that Tesla identified and has advanced — the electrification of transportation. To most auto executives, there is now little doubt this is the way the world is going. In the last five years, Tesla has gone from making 50,000 cars annually to making 10 times that many last year. General Motors, Ford, Volkswagen and others are investing billions to develop electric cars and trucks that eventually will begin supplanting fossil fuel models.“In my lifetime, we are going to go from a world where electric vehicles are a tiny subset of the market to where electric vehicles represent 100 percent of the market,” Mr. Scaringe said. “Some existing players will be able to make that transition, but it also creates opportunities for new companies to enter that space.”Another big trend reshaping the auto industry is autonomous cars. On Tuesday, Cruise, a unit of G.M. that is working in that area, announced it had raised $2 billion from Microsoft, G.M., Honda and other investors. Rivian and Tesla are also working on automated-driving technology.Rivian is different from Tesla in several respects. Tesla so far has grown by selling sporty sedans, a type of vehicle that is falling out of favor with consumers. Tesla intends to begin making an oddly angular, futuristic pickup, the Cybertruck, this year. But it hasn’t yet put heavy focus on the trucks and S.U.V.s that make up 75 percent of the passenger vehicle market in the United States.Rivian, on the other hand, is focused on producing “adventure” vehicles that owners can take off road, an approach that means Rivian won’t often compete head to head with Tesla.“There’s a perception that this is winner take all, and that’s just wrong,” Mr. Scaringe said. “Consumers need to have different brands, different flavors. Our success is not at all mutually exclusive to others’ success.”Business & EconomyLatest UpdatesUpdated Jan. 19, 2021, 6:30 p.m. ETSmall-business relief loans start flowing again, with $5 billion worth approved in the first week.Representative introduces a resolution to recognize the journalists who covered the Capitol attack.Retailers drop MyPillow amid fallout from comments by its pro-Trump founder.Rebecca Puck Stair is the kind of car buyer Rivian hopes to attract. A movie location scout in Albuquerque, she has been interested in buying an electric vehicle for a few years, but needs high ground clearance and four-wheel drive for assignments that take her into the desert.“That didn’t exist in the market,” she said. “A Tesla doesn’t fit my needs.”About a year ago, she heard about Rivian for the first time and put a deposit down on an S.U.V. the next day — like Tesla, the company does not plan to sell through dealers. Ms. Stair has seen the Cybertruck, but the design is not for her. “It just screams ‘obnoxious guy truck,’” she said, laughing.Rivian’s truck and S.U.V., which start at $67,500, look more conventional, as if they could have been designed by Land Rover.Unlike Tesla, which is trying to grow quickly, Rivian is taking measured steps. Last year, before the pandemic struck, it said it planned to make around 20,000 pickup trucks and S.U.V.s in 2021 and some 40,000 in 2022. It has not yet offered an updated outlook. It is aiming to have production capacity of 250,000 vehicles a year at its plant in Normal, Ill., by the middle of the decade. The company has not disclosed how many orders it has taken, but a spokeswoman said it had customers lined up for all the vehicles it expected to make this year.And even as other auto start-ups go public by merging with shell companies that have bundles of cash and stock market listings, Rivian is not eager to do so. “We want to launch, demonstrate our capability and let our performance speak for itself before we can look into being public,” Mr. Scaringe, 38, said.That difference in the approaches favored by Rivian and Tesla probably has a lot to do with the men that lead the companies.RJ Scaringe, Rivian’s chief executive, is an engineer who tried to slash his carbon footprint at M.I.T. by getting around by foot and bike, taking cold showers and doing his laundry by hand.Credit…Lyndon French for The New York TimesTesla’s chief executive, Elon Musk, is a disruptive force unlike anything the auto industry had seen in decades, perhaps not since Henry Ford. He has powered his company to stock market heights while attracting an army of fans. But Mr. Musk has also courted controversy — he has called government efforts to limit the spread of the coronavirus “fascist.” His Twitter posts have gotten him and Tesla into legal jams, including with the Securities and Exchange Commission. Not long ago, he claimed Tesla would have a million self-driving cars on the road in 2020, but the company has yet to demonstrate a fully autonomous vehicle.Mr. Scaringe, by contrast, is a bookish engineer, with a Ph.D. from the Massachusetts Institute of Technology. He once tried to slash his personal carbon footprint at M.I.T. by getting around by foot and bike, taking cold showers and doing his laundry by hand. His Twitter feed is so tame that one recent post was about the car color preferences of his children (blue).In the second half of this year, Rivian hopes to start producing its Amazon delivery van in large numbers. Amazon is already testing prototypes on the road. The retail giant has made the trucks a central part of its strategy to reduce emissions, placing an order for 10,000 to be delivered by the end of 2022.Rivian still has a lot of work to do. On a recent afternoon, engineers at its labs in Plymouth were tinkering with a half-dozen R1T pickups in various stages of development. A few were hand-built models with screws visible in door wells — telltale signs of early prototypes. One was a more refined version that seemed a step or two away from the production version.“People are working all hours,” said Ryan Kalb, a special projects engineer. “We are trying to move quickly, and we want to be doing it. We all want to see this happen.”It was a similar story about 300 miles down the road at Rivian’s plant in Normal, a 3.4 million-square-foot factory that the company bought for $16 million in 2017. Since then, the plant has undergone an overhaul that cost more than $1 billion. Freshly painted and brightly lit, it has a long, winding assembly line where the R1T and R1S S.U.V. will be made. At the moment, only a few are built each day.Michael Ramsey, a Gartner analyst, said he was eager to see if Rivian could avoid the mistakes that hamstrung Tesla a few years ago, when Mr. Musk rushed to ramp up production of the Model 3 sedan only to end up in what he called “manufacturing hell.”“Is Rivian going to be a giant future competitor to Ford and G.M.? I don’t know,” Mr. Ramsey said. “But they have all these mega-investments. They have a strategic partner in Ford. They have contracts with Amazon. Of all the E.V. start-ups, they seem to have the best chance of making it.”AdvertisementContinue reading the main story More

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    When Will Interest Rates Rise? Fed Chair Says ‘No Time Soon’

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    AdvertisementContinue reading the main storySupported byContinue reading the main storyWhen Will Interest Rates Rise? Fed Chair Says ‘No Time Soon’Jerome H. Powell, chair of the Federal Reserve, said the central bank remained far from dialing back support for the economy.Jerome H. Powell, the chair of the Federal Reserve, said the U.S. economy is a long way from recovery and the central bank would not raise interest rates anytime soon.CreditCredit…Pool photo by Greg NashJan. 14, 2021Updated 4:56 p.m. ETWith the incoming Biden administration pushing for more economic stimulus and with multiple coronavirus vaccines already approved, some investors have been wondering whether the Federal Reserve might soon start to ease off its support for the economy.Jerome H. Powell, the central bank’s chair, made it clear on Thursday that the central bank would be cautious in doing so — and that action was anything but imminent. During a webcast question-and-answer session, Mr. Powell said it would take time for the economy to recover from the pain of the pandemic era.“When the time comes to raise interest rates, we will certainly do that,” he said. “And that time, by the way, is no time soon.”Currently, dire short-term conditions — surging virus deaths, high unemployment, and partial state and local economic lockdowns — contrast sharply with the longer-term outlook. Economists think that the economy might come roaring back later in 2021 as vaccines allow normal life to resume and consumers spend money they saved during the pandemic.That split has led some investors to worry that the Fed might speed up its plans to reduce the pace of its enormous bond purchases, or even to lift interest rates from the near-zero setting that has been in place since March. The central bank has been buying about $120 billion in Treasury and mortgage-backed debt per month to keep markets operating smoothly and to help goose the economy.“We’ll let the world know” when it’s time to discuss plans for slowing purchases, Mr. Powell said, and that will happen only when it’s clear that they are well on their way toward their economic goals.“We’ll do so, by the way, well in advance of active consideration of beginning a gradual taper in asset purchases,” he added.Other top Fed officials, including Lael Brainard, who is a board governor, and Vice Chair Richard Clarida, had also struck a cautious tone when talking about the outlook for both economic growth and monetary policy in recent days. But their remarks had contrasted with more impatient ones from some of the Fed’s 12 regional bank presidents, a fact that had caught investor attention. Mr. Powell’s appearance put to rest any suggestion that the central bank is planning to hasten its return to a more normal policy setting.Mr. Powell and his colleagues must thread a needle. In 2013, markets gyrated wildly as the Fed made its initial moves away from huge bond purchases, in what became popularly known as the “taper tantrum.” Now, officials hope to offer investors plenty of information about what they are planning — to avoid spooking them — without signaling that a reduction in economic support is right around the corner.“They’re committed to ensuring that there is not another taper tantrum,” said Subadra Rajappa, head of U.S. rates strategy at Société Générale. The goal in reinforcing low rates and a steady course for asset purchases, she added, is “to talk down the market.”Fed officials and private forecasters are projecting a strong pickup in economic activity once vaccines become widely available. They have also acknowledged that inflation is likely to move higher in 2021, because of short-term technical factors, and that a short-lived spike in price increase would not necessarily worry Fed policymakers.Mary C. Daly, president of the Federal Reserve Bank of San Francisco, said in a Bloomberg television interview earlier on Thursday that temporary jumps in inflation would not necessarily signal that tepid price gains — the problem of the modern economic era — were a thing of the past.“It’s quite possible that we’ll see some spikes above 2 percent. In fact, the math of inflation would suggest that we’ll get some spikes in the middle of the year,” she said. “That’s not a victory on price stability.”Mr. Powell also acknowledged that inflation could increase temporarily, but said the bounce would be “very unlikely” to lead to persistently faster gains. If inflation does pick up substantially, the Fed knows how to use policy to counteract that.“Too-low inflation is the much more difficult problem to solve,” he said.He reiterated that the Fed, which has made a habit of lifting interest rates to prevent overheating in the labor market, would no longer do that — instead allowing the job market to continue to tighten so long as excesses do not appear.“We saw the social benefits that a strong labor market can and did bring,” Mr. Powell said, referring to the last business cycle, in which unemployment dropped to 3.5 percent but wage and price increases remained tame. “One of the big lessons of the last crisis was how much room there was in labor force participation.”And he said he believed that the economy could return to its pre-crisis levels.“I’m optimistic about the economy over the next couple of years, I really am,” Mr. Powell said. “We’ve got to get through this very difficult period this winter, with the spread of Covid.”AdvertisementContinue reading the main story More

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    The Business Rules the Trump Administration Is Racing to Finish

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    #masthead-section-label, #masthead-bar-one { display: none }The Presidential TransitionLatest UpdatesHouse Moves to Remove TrumpHow Impeachment Might WorkBiden Focuses on CrisesCabinet PicksAdvertisementContinue reading the main storySupported byContinue reading the main storyThe Business Rules the Trump Administration Is Racing to FinishFrom tariffs and trade to the status of Uber drivers, regulators are trying to install new rules or reduce regulations before President-elect Joe Biden takes over.President Trump is rushing to put into effect new economic regulations and executive orders before his term comes to a close.Credit…Erin Schaff/The New York TimesJan. 11, 2021, 3:00 a.m. ETIn the remaining days of his administration, President Trump is rushing to put into effect a raft of new regulations and executive orders that are intended to put his stamp on business, trade and the economy.Previous presidents in their final term have used the period between the election and the inauguration to take last-minute actions to extend and seal their agendas. Some of the changes are clearly aimed at making it harder, at least for a time, for the next administration to pursue its goals.Of course, President-elect Joseph R. Biden Jr. could issue new executive orders to overturn Mr. Trump’s. And Democrats in Congress, who will control the House and the Senate, could use the Congressional Review Act to quickly reverse regulatory actions from as far back as late August.Here are some of the things that Mr. Trump and his appointees have done or are trying to do before Mr. Biden’s inauguration on Jan. 20. — Peter EavisProhibiting Chinese apps and other products. Mr. Trump signed an executive order on Tuesday banning transactions with eight Chinese software applications, including Alipay. It was the latest escalation of the president’s economic war with China. Details and the start of the ban will fall to Mr. Biden, who could decide not to follow through on the idea. Separately, the Trump administration has also banned the import of some cotton from the Xinjiang region, where China has detained vast numbers of people who are members of ethnic minorities and forced them to work in fields and factories. In another move, the administration prohibited several Chinese companies, including the chip maker SMIC and the drone maker DJI, from buying American products. The administration is weighing further restrictions on China in its final days, including adding Alibaba and Tencent to a list of companies with ties to the Chinese military, a designation that would prevent Americans from investing in those businesses. — Ana SwansonDefining gig workers as contractors. The Labor Department on Wednesday released the final version of a rule that could classify millions of workers in industries like construction, cleaning and the gig economy as contractors rather than employees, another step toward endorsing the business practices of companies like Uber and Lyft. — Noam ScheiberTrimming social media’s legal shield. The Trump administration recently filed a petition asking the Federal Communications Commission to narrow its interpretation of a powerful legal shield for social media platforms like Facebook and YouTube. If the commission doesn’t act before Inauguration Day, the matter will land in the desk of whomever Mr. Biden picks to lead the agency. — David McCabeTaking the tech giants to court. The Federal Trade Commission filed an antitrust suit against Facebook in December, two months after the Justice Department sued Google. Mr. Biden’s appointees will have to decide how best to move forward with the cases. — David McCabeAdding new cryptocurrency disclosure requirements. The Treasury Department late last month proposed new reporting requirements that it said were intended to prevent money laundering for certain cryptocurrency transactions. It gave only 15 days — over the holidays — for public comment. Lawmakers and digital currency enthusiasts wrote to the Treasury secretary, Steven Mnuchin, to protest and won a short extension. But opponents of the proposed rule say the process and substance are flawed, arguing that the requirement would hinder innovation, and are likely to challenge it in court. — Ephrat LivniLimiting banks on social and environmental issues. The Office of the Comptroller of the Currency is rushing a proposed rule that would ban banks from not lending to certain kinds of businesses, like those in the fossil fuel industry, on environmental or social grounds. The regulator unveiled the proposal on Nov. 20 and limited the time it would accept comments to six weeks despite the interruptions of the holidays. — Emily FlitterOverhauling rules on banks and underserved communities. The Office of the Comptroller of the Currency is also proposing new guidelines on how banks can measure their activities to get credit for fulfilling their obligations under the Community Reinvestment Act, an anti-redlining law that forces them to do business in poor and minority communities. The agency rewrote some of the rules in May, but other regulators — the Federal Reserve and the Federal Deposit Insurance Corporation — did not sign on. — Emily FlitterInsuring “hot money” deposits. On Dec. 15, the F.D.I.C. expanded the eligibility of brokered deposits for insurance coverage. These deposits are infusions of cash into a bank in exchange for a high interest rate, but are known as “hot money” because the clients can move the deposits from bank to bank for higher returns. Critics say the change could put the insurance fund at risk. F.D.I.C. officials said the new rule was needed to “modernize” the brokered deposits system. — Emily FlitterNarrowing regulatory authority over airlines. The Department of Transportation in December authorized a rule, sought by airlines and travel agents, that limits the department’s authority over the industry by defining what constitutes an unfair and deceptive practice. Consumer groups widely opposed the rule. Airlines argued that the rule would limit regulatory overreach. And the department said the definitions it used were in line with its past practice. — Niraj ChokshiRolling back a light bulb rule. The Department of Energy has moved to block a rule that would phase out incandescent light bulbs, which people and businesses have increasingly been replacing with much more efficient LED and compact fluorescent bulbs. The energy secretary, Dan Brouillette, a former auto industry lobbyist, said in December that the Trump administration did not want to limit consumer choice. The rule had been slated to go into effect on Jan. 1 and was required by a law passed in 2007. — Ivan PennAdvertisementContinue reading the main story More

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    Here Are The 8 Chinese Apps Trump Banned

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    AdvertisementContinue reading the main storySupported byContinue reading the main storyTrump Bans Alipay and 7 Other Chinese AppsThe White House took a surprise parting shot at China on Tuesday by banning the popular Chinese payment service and other applications.An executive order signed by President Trump on Tuesday banned the payment apps Alipay and WeChat Pay.Credit…Greg Baker/Agence France-Presse — Getty ImagesJan. 5, 2021, 6:43 p.m. ETWASHINGTON — President Trump on Tuesday signed an executive order prohibiting transactions with eight Chinese software applications, including Alipay, the payment platform owned by Ant Group, and WeChat Pay, which is owned by Tencent.The move, two weeks before the end of Mr. Trump’s term, could help lock in his administration’s harsher stance toward China and is likely to further rankle Beijing.The executive order, issued late Tuesday, will bar any transactions with “persons that develop or control” the apps of Alipay, CamScanner, QQ Wallet, SHAREit, Tencent QQ, VMate, WeChat Pay, and WPS Office and their subsidiaries after a period of 45 days.In the order, the president said that “the pace and pervasiveness of the spread in the United States of certain connected mobile and desktop applications and other software developed or controlled by persons in the People’s Republic of China” continued to threaten American national security. “At this time, action must be taken to address the threat posed by these Chinese connected software applications,” he wrote.The Trump administration has ramped up tariffs and waged a trade war against China in recent years. It has also targeted Chinese-owned social media services, saying they provide a conduit for Chinese espionage and pose a national security risk to the American public. Last fall, the Trump administration issued executive orders banning two other popular Chinese-owned social media services, TikTok and WeChat.But both of those bans have become entangled in litigation, and the services continue to operate in the United States. That raises the question of whether American courts will issue an injunction to stop Mr. Trump’s latest bans on Chinese services as well.In a statement, Wilbur Ross, the commerce secretary, said he had directed his department to begin enacting the orders, “including identifying prohibited transactions related to certain Chinese connected software applications.”“I stand with President Trump’s commitment to protecting the privacy and security of Americans from threats posed by the Chinese Communist Party,” he added.The incoming Biden administration has not clarified whether it will continue to try to enforce Mr. Trump’s bans. Reuters earlier reported the signing.This is a developing story. Check back for updates.AdvertisementContinue reading the main story More