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    Powell Bets the Fed Can Slow Inflation Despite Recession Fears

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    Jerome H. Powell, the Federal Reserve chair, thinks his central bank can defy history to clinch slower inflation and a soft economic landing.The Federal Reserve’s push to slow the economy and bring inflation under control is often compared to an airplane descent, one that could end in a soft landing, a bumpy one or an outright crash.Jerome H. Powell, the Fed chair, is betting on something more akin to the Miracle on the Hudson: a touchdown that is gentle, all things considered, and unlike anything the nation has seen before.The Fed has raised rates sharply over the past year, pushing them just above 5 percent on Wednesday, in a bid to cool the economy to bring inflation under control. Staff economists at the central bank have begun to forecast that America is likely to tip into a recession later this year as the Fed’s substantial policy moves combine with turmoil in the banking sector to snuff out growth.But Mr. Powell made it clear during a news conference on Wednesday that he does not agree.“That’s not my own most likely case,” he said, explaining that he expects modest growth this year. That sunnier forecast has hinged, in part, on trends in the labor market.America’s job market is still very strong — with rapid job growth and unemployment hovering near a 50-year low — but it has shown signs of cooling. Job openings have dropped sharply in recent months, falling to 9.6 million in March from a peak of more than 12 million a year earlier. Historically, such a massive decline in the number of available positions would have come alongside layoffs and rising joblessness, and prominent economists had predicted a painful economic landing for exactly that reason.But so far, unemployment has not budged.Relationship Status: It’s ComplicatedJoblessness usually increases when job openings fall. But that relationship is in question now as job openings drop while unemployment remains low.

    Note: Data is seasonally adjustedSource: Bureau of Labor StatisticsBy The New York Times“It wasn’t supposed to be possible for job openings to decline by as much as they have declined without unemployment going up,” Mr. Powell said this week. While America will get the latest update on unemployment when a job market report is released Friday, unemployment has yet to rise meaningfully. Mr. Powell added that “there are no promises in this, but it just seems to me that it is possible that we can continue to have a cooling in the labor market without having the big increases in unemployment that have gone with many prior episodes.”America’s economic fate rests on whether Mr. Powell’s optimism is correct. If the Fed can pull it off — defying history to wrangle rapid inflation by sharply cooling the labor market without causing a big and painful jump in joblessness — the legacy of the post-pandemic economy could be a tumultuous but ultimately positive one. If it can’t, taming price increases could come at a painful cost to America’s employees.The Fed has raised rates sharply over the past year, pushing them just above 5 percent as of their meeting this week, in a bid to cool the economy in order to wrestle inflation under control.Hiroko Masuike/The New York TimesSome economists are skeptical that the good times can last.“We haven’t seen this trade-off, which is fantastic,” said Aysegul Sahin, an economist at the University of Texas at Austin. But she noted that productivity data appeared glum, which suggests that companies got burned by years of pandemic labor shortages and are now hanging onto workers even when they do not necessarily need them to produce goods and services.“This time was different, but now we are getting back to the state where it is a more normal labor market,” she said. “This is going to start playing out the way it always plays out.”The Fed is in charge of fostering both maximum employment and stable inflation. But those goals can come into conflict, as is the case now.Inflation has been running above the Fed’s 2 percent goal for two full years. While the strong labor market did not initially cause the price spikes, it could help to perpetuate them. Employers are paying higher wages to try to hang onto workers. As they do that, they are raising prices to cover their costs. Workers who are earning a bit more are able to afford rising rents, child care costs and restaurant checks without pulling back.In situations like this, the Fed raises interest rates to cool the economy and job market. Higher borrowing costs slow down the housing market, discourage big consumer purchases like cars and home improvement projects, and deter businesses from expanding. As people spend less, companies cannot keep raising prices without losing customers.But setting policy correctly is an economic tightrope act.Policymakers think that it is paramount to act decisively enough to quickly bring inflation under control — if it is allowed to persist too long, families and businesses could come to expect steadily rising prices. They might then adjust their behavior, asking for bigger raises and normalizing regular price increases. That would make inflation even harder to stamp out.On the other hand, officials do not want to cool the economy too much, causing a painful recession that proves more punishing than was necessary to return inflation to normal.Striking that balance is a dicey proposition. It is not clear exactly how much the economy needs to slow to fully control inflation. And the Fed’s interest rate policy is blunt, imprecise and takes time to work: It is hard to guess how much the increases so far will ultimately weigh on growth.That is why the Fed has slowed its policy changes in recent months — and why it appears poised to pause them altogether. After a string of three-quarter point rate moves last year, the Fed has recently adjusted borrowing costs a quarter point at a time. Officials signaled this week that they could stop raising rates altogether as soon as their mid-June meeting, depending on incoming economic data.Hitting pause would give central bankers a chance to see whether their rate adjustments so far might be sufficient.It would also give them time to assess the fallout from turmoil in the banking industry — upheaval that could make a soft economic landing even more difficult.Three large banks have collapsed and required government intervention since mid-March, and jitters continue to course through midsize lenders, with several regional bank stocks plummeting on Wednesday and Thursday. Banking troubles can quickly translate into economic problems as lenders pull back, leaving businesses less able to grow and families less able to finance their consumption.The labor market could be in for a more dramatic slowdown, given the bank tumult and the Fed’s rate moves so far, said Nick Bunker, the director of North American economic research at the job site Indeed.He said that while job openings have been coming down swiftly, some of that might reflect a shift back to normal conditions after a bout of pandemic-inspired weirdness, not necessarily as a result of Fed policy.For instance, job openings in leisure and hospitality industries had spiked as restaurants and hotels reopened from lockdowns. Those were now disappearing, but that might be more about a return to business as usual.“A soft landing is happening, but how much of that is gravity and how much of it is what the pilot is doing with the plane?” Mr. Bunker said. Going forward, it could be that the normal historical relationship between declining job openings and rising joblessness will kick in as policy begins to bite.Or this time truly could be unique — as Mr. Powell is hoping. But whether the Fed and the American economy get to test his thesis could depend on whether the banking system issues clear up, Mr. Bunker said.“We might not get the answer if the financial sector comes and tips the table over,” he said. More

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    A ‘Rocky and Bumpy’ Economy Where Wages Are Up and Inflation Persists

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    Key pay and inflation gauges have stayed stubbornly high as Federal Reserve officials consider when to stop raising interest rates.Inflation isn’t as high as it was last year. The job market isn’t as hot. The economy is slowing down. But none of this is happening as quickly or as smoothly as Federal Reserve officials would like.The latest evidence came on Friday, when a set of government reports painted a picture of an economy that is generally headed in the direction that policymakers want, but is taking its time to get there.“We knew that inflation was going to be rocky and bumpy,” said Megan Greene, chief economist for the Kroll Institute. “We found peak inflation, but it’s not going to be a smooth path down.”Consumer prices were up 4.2 percent in March from a year earlier, according to the Fed’s preferred measure of inflation, the Personal Consumption Expenditures index, the Commerce Department said Friday. That was the slowest pace of inflation in nearly two years, down from a peak of 7 percent last summer.But after stripping out food and fuel prices, a closely watched “core” index held nearly steady last month. That measure rose by 4.6 percent over the year, compared with 4.7 percent in the previous reading — a figure that was revised up slightly.Wages, meanwhile, continue to rise rapidly — good news for workers trying to keep up with the rising cost of living, but a likely source of concern for the Fed.Data from the Labor Department on Friday showed that wages and salaries for private-sector workers were up 5.1 percent in March from a year earlier. That was the same growth rate as in December, and defied forecasters’ expectations of a modest slowdown. A broader measure of compensation growth, which includes the value of benefits as well as pay, actually accelerated slightly in the first quarter.Labor Department on Friday showed that wages and salaries for private-sector workers were up 5.1 percent in March from a year earlier.Hailey Sadler for The New York TimesThe Fed has been raising interest rates for more than a year in an effort to cool off the economy and bring inflation down to the central bank’s target of 2 percent per year. The data on Friday is likely to add to policymakers’ conviction that their work is not done — officials are widely expected to raise rates a quarter percentage point, to just above 5 percent, when they meet next week. That would be the central bank’s 10th consecutive rate increase.Wage data is a particular focus for Fed officials, who believe that the labor market, in which there are far more available jobs than workers to fill them, is pushing up pay at an unsustainable rate, contributing to inflation. Other measures had suggested a more significant slowdown in wage growth than showed up in the data on Friday, which is less timely but generally considered more reliable“If any Fed officials were wavering on a May rate hike,” Omair Sharif, founder of Inflation Insights, wrote in a note to clients on Friday, the wage data “will likely push them to support at least one more hike.”But a crucial question is what comes after that. Central bankers forecast in March that they might stop raising interest rates after their next move. Jerome H. Powell, the Fed chair, could explain after the central bank’s rate announcement next week if that is still the case. The decision will hinge on incoming economic and financial data.Investors largely shrugged off the data on Friday morning, focusing instead on a week of robust profit reports that suggest corporate America has yet to fully feel the pinch of higher interest rates. The S&P 500 index rose 0.5 percent in midday trading. The yields on Treasury bonds, which track the government’s cost to borrow more money and are sensitive to changes in interest-rate expectations, fell slightly.The Fed faces a delicate task as it seeks to raise borrowing costs just enough to discourage hiring and ease pressure on pay, but not so much that companies begin laying off workers en masse.Higher interest rates have already taken a toll on housing, manufacturing and business investment. And data from the Commerce Department on Friday suggested that consumers — the engine of the economic recovery to date — are beginning to buckle. After rising strongly in January, consumer spending barely grew in February and was flat in March. Americans saved their income in March at the highest rate since December 2021, a sign that consumers may be becoming more cautious.“You’re seeing some of that robustness to start the year really start to reverse a little bit,” said Stephen Juneau, an economist at Bank of America.Many forecasters believe the recovery will continue to slow in the months ahead — or may already have done so. The data from March does not capture the full impact of the collapse of Silicon Valley Bank and the financial turmoil that followed.“If you take a picture of the data as it was in the first quarter, you’re left with this impression of still robust economic activity and inflation that’s still too high and too persistent,” said Gregory Daco, chief economist at EY, the consulting firm previously known as Ernst & Young. If there was real-time data on spending, credit standards and business investment, he said, “that would tell a very different picture from what the first-quarter data would indicate.”The challenge or Fed officials is that they cannot wait for more complete data to make their decisions. Some evidence points to a more substantial slowdown, but other signs suggest that consumers continue to spend, and companies continue to raise prices.“If we see inflation that warrants us needing to take additional pricing, we’ll take it,” Brian Niccol, chief executive at the burrito chain Chipotle, said during an earnings call this week. “I think we’ve now demonstrated we do have pricing power.” The company raised its menu prices by 10 percent in the first quarter versus the same period last year.Wage growth is a particularly thorny issue for the Fed. Faster pay gains have helped workers, particularly those at the bottom of the earnings ladder, keep up with rapidly rising prices. And most economists, inside and outside the Fed, say wage growth has not been a dominant cause of the recent bout of high inflation.But Fed officials worry that if companies need to keep raising pay, they will also need to keep raising prices. That could make it hard to rein in inflation, even as the pandemic-era disruptions that caused the initial pop in prices recede.“It always feels good as a worker to see more money in your paycheck,” said Cory Stahle, an economist for the employment site Indeed. “But it also feels bad to walk into the store and pay $5 for a dozen eggs.”Joe Rennison More

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    Unemployment Is Low. Inflation Is Falling. But What Comes Next?

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    Despite hopeful signs, economists worry that a recession is on the way or that the Federal Reserve will cause one in trying to rein in inflation.There are two starkly different ways of looking at the U.S. economy right now: what the data says has happened in the past few months, and what history warns could happen next.Most of the recent data suggests that the economy is strong. The job market is, incredibly, better today than it was in February 2020, before the coronavirus pandemic ripped a hole in the global economy. More people are working. They are paid more. The gaps between them — by race, gender, education or income — are smaller.Even inflation, long the black cloud in the economy’s sunny sky, is showing signs of dissipating. Government data released on Wednesday showed that consumer prices were up 5 percent in March from a year earlier, the slowest pace in nearly two years. Over the past three months, prices have risen at the equivalent of a 3.8 percent annual rate — faster than policymakers would like, but no longer the five-alarm fire it was at its peak last year.Yet for all the good news, economists remain worried that a recession is on the way or that the Federal Reserve will cause one in trying to rein in inflation.“The data has been reassuring,” said Karen Dynan, a Harvard economist and former Treasury official. “The things that we’re nervous about are all the things that we don’t have a lot of hard data about.”Beginning with the banks: Most of the recent data predates the collapse of Silicon Valley Bank and the upheaval in the banking system that followed. Already, there are signs that small and midsize lenders have begun to tighten their credit standards in response to the crisis, which, in turn, could push the businesses that are their clients to cut back on hiring and investment. The extent of the economic effects won’t be clear for months, but many forecasters — including economists at the Fed — have said that the turmoil has made a recession more likely.The Fed began raising interest rates more than a year ago, but the effect of those increases is just beginning to show up in many parts of the economy. Only in March did the construction industry begin to shed jobs, even though the housing market has been in a slump since the middle of last year. Manufacturers, too, were adding jobs until recently. And consumers are still in the early stages of grappling with what higher rates mean for their ability to buy cars, pay credit card balances and take on other forms of debt.The economic data that paints such a rosy picture of the economy is “a look back into an old world that doesn’t exist anymore,” said Ian Shepherdson, chief economist of Pantheon Macroeconomics.The Federal Reserve began raising interest rates more than a year ago, but the effect of those increases is just beginning to show up in many parts of the economy.Stefani Reynolds for The New York TimesMr. Shepherdson expects overall job growth to turn negative as soon as this summer, as the combined impact of the Fed’s policies and the bank-lending crunch hit the economy, leading to job cuts. Fed policymakers “have done more than enough” to tame inflation, he said, but appear likely to raise rates again anyway.Other economists, however, argue that the Fed has little choice but to keep raising rates until inflation is definitively in retreat. The recent slowdown in consumer price growth is welcome, they argue, but it is partly a result of the declines in the price of energy and used cars, both of which appear poised to resume climbing. Measures of underlying inflation, which strip away such short-term swings, have fallen only gradually.“Inflation is coming down, but I’m not sure that the momentum will continue if they don’t do more,” said Raghuram Rajan, an economist at the University of Chicago Booth School of Business and a former governor of India’s central bank.The Fed’s goal is to do just enough to bring down inflation without causing such a severe pullback in borrowing and spending that it leads to widespread job cuts and a recession. Striking that balance perfectly, however, is difficult — especially because policymakers must make their decisions based on data that is preliminary and incomplete.“It is going to be extremely hard for them to fine-tune the exact point,” Mr. Rajan said. “They would love to have more time to see what’s happening.”A miss in either direction could have serious consequences.The recovery of the U.S. job market over the past three years has been nothing short of remarkable. The unemployment rate, which neared 15 percent in April 2020, is down to the half-century low it achieved before the pandemic. Employers have added back all 22 million jobs lost during the early weeks of the pandemic, and three million more besides. The intense demand for labor has given workers a rare moment of leverage, in which they could demand better pay from their bosses, or go elsewhere to find it.The strong rebound has especially helped groups that are frequently left behind in less dynamic economic environments. Employment has been rising among people with disabilities, workers with criminal records and those without high school diplomas. The unemployment rate among Black Americans hit a record low in March, and pay gains have in recent years been fastest among the lowest-paid workers.All of that progress, critics say, could be lost if the Fed goes too far in its effort to fight inflation.Consumers are still in the early stages of grappling with what higher rates mean for their ability to buy cars, make credit card payments and take on other forms of debt.Gabby Jones for The New York Times“For this tiny moment, we finally see what a labor market is supposed to do,” said William Spriggs, a Howard University professor and chief economist for the A.F.L.-C.I.O. And the workers benefiting most from the labor market’s current strength, he said, will be the ones who suffer most from a recession.“You should see from this moment what you are truly risking,” Mr. Spriggs said. With inflation already falling, he said, there is no reason for policymakers to take that risk.“The labor market is finally hitting its stride,” he said. “And instead of celebrating and saying, ‘This is fantastic,’ we have the Fed hanging over everybody and casting shade on this unbelievable set of circumstances and saying, ‘Actually this is bad.’”But other economists caution that there are also risks in the Fed’s doing too little. So far, businesses and consumers have treated inflation mostly as a serious but temporary challenge. If they instead begin to expect high rates of inflation to continue, it could become a self-fulfilling prophecy, as companies set prices and workers demand raises in anticipation of higher costs.If that happens, the Fed may need to take much more aggressive action to bring inflation to heel, potentially causing a deeper, more painful recession. That, at least according to many economists, is what happened in the 1970s and 1980s, when the Fed, under Paul Volcker, brought inflation under control at the cost of what was, outside of the Great Depression and the pandemic, the highest unemployment rate on record.The real debate isn’t between the relative evils of inflation or unemployment, argued Jason Furman, a Harvard economist and former top adviser to President Barack Obama. It is between some unemployment now and potentially much more unemployment later.“You’re risking losing millions of jobs if you wait too long,” Mr. Furman said.There have been some encouraging — though still tentative — signs in recent weeks that the Fed may be succeeding at the delicate task of slowing the economy just enough but not too much.Data from the Labor Department this month showed that employers were posting fewer open positions and that workers were changing jobs less frequently, both signs that the job market was beginning to cool. At the same time, the pool of available workers has grown as more people have rejoined the labor force and immigration has rebounded.The combination of increased supply and reduced demand should, in theory, allow the labor market to come back into balance without leading to widespread job cuts. So far, that appears to be happening: Wage growth, which the Fed fears is contributing to inflation, has slowed, but layoffs and unemployment remain low.Jan Hatzius, chief economist for Goldman Sachs, said the recent job market data made him more optimistic about avoiding a recession. And while that outcome is far from certain, he said, it is worth keeping the current debate in perspective.“Given the incredible downturn in the economy that we saw in 2020 — with obvious fears of a much, much, much worse outcome — if you actually manage to get back to a reasonable inflation rate and high employment levels in, say, a three- to four-year period, it would be a very good outcome,” Mr. Hatzius said. 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    How Janelle Jones’s Story About Black Women and the Economy Caught On

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    The first Black woman to serve as chief economist at the Labor Department advanced the idea that lifting up people on the margins helps everyone else, too.“Transforming Spaces” is a series about women driving change in sometimes unexpected places.It takes approximately 30 seconds of conversation with Janelle Jones, the chief economist and policy director of one of the largest labor unions in the United States, to learn where she’s from and why it matters.“I’m from Ohio! Is that not obvious?” she exclaimed, at a decibel level that reflects how core the state is to her identity. Lorain, Ohio, to be exact, where her mother and her mother’s mother (and aunts, uncles and cousins) worked in the local Ford plant.Those union jobs, and the upward mobility they provided to millions of Black people who migrated from the South in search of freedom and opportunity, taught Ms. Jones what it means to move from the margins to the middle class. She noticed the difference when her mother switched to making Econoline vans after years serving Happy Meals at McDonald’s — a business that her current employer, the Service Employees International Union, is in a long-running battle to unionize.Now she is fighting to make more jobs as good as the union jobs that supported her family — or, even better, jobs with new safeguards that protect workers’ physical health.“It is a town where one of the best jobs you can have is to work at Ford,” Ms. Jones, 39, said of Lorain. “And while I love that for a lot of the people I know, it’s not the only way a town of 70,000 should be able to have economic security.”Last year, Ms. Jones left the U.S. Labor Department, where she served as chief economist, for the Service Employees International Union, which represents nearly two million security guards, nurses, teachers, airport retail workers and janitors. About two-thirds of the members are women, and more than half are people of color. That’s why the position seemed tailor made for the philosophy she’d developed and advanced over her entire career — that targeting policies to assist some of the most disadvantaged members of society will lift everyone else up in the process.Ms. Jones with Aparna Kumar, assistant director of communications for the Service Employees International Union, at the organization’s headquarters in Washington, D.C.Lexey Swall for The New York TimesMs. Jones’s superpower, according to her colleagues, is her ability to translate the economy into a framework that helps workers.For the past several years, Ms. Jones has been developing one central philosophy: Because Black women have historically been concentrated in low-paid caregiving jobs, which are often excluded from labor laws and benefits like Social Security, they have accumulated less wealth and experienced worse health outcomes. Furthermore, Ms. Jones argues, helping Black women — through measures like raising wages in care professions and canceling more student debt — is the best way to construct an economy that functions better for everyone.In 2020, she gave her narrative a name, “Black Women Best.” She came up with it while working for a progressive nonprofit called Groundwork Collaborative, which conducted focus groups across the country to find a narrative about how the economy should work for working people.“They were like, ‘I would like to not be tired,’” Ms. Jones recalled of the participants. “‘I want to buy school supplies.’ ‘I want to know that if my car breaks down, because I think it might, I won’t lose my apartment.’” Solving those basic problems for people with the least resources, she thought, would buoy the labor market from the bottom up.Her premise, which she articulated in a working paper for the Roosevelt Institute, a left-leaning think tank, found an eager audience under President Biden, who owed his victory in large part to Black women. It was embraced by influential figures, including corporate economists and a Federal Reserve president, and formed the basis of a 133-page report commissioned by the Congressional Caucus on Black Women and Girls.It hasn’t escaped pushback: Some scholars, including Tommy J. Curry at the University of Edinburgh, counter that Black men are more disadvantaged than Black women. Dr. Curry, a professor specializing in Africana philosophy and Black male studies at the university, said that, while he understands the “political popularity” of Ms. Jones’s theory, the evidence did not back it up. Black women, he said, “have seen higher levels of labor participation, entrepreneurial endeavors supported by government grants, and higher rates of college degree attainment since the 2000s, while Black men have been shown to have greater unemployment, less earnings per dollar — at 51 cents by some measures — and an overall downward mobility.”Ms. Jones declined to respond to Dr. Curry’s critique, but emphasized that her policy recommendations are generally not a zero-sum game.Ms. Jones in her office, meeting remotely with government relations colleagues about their lobbying efforts to increase the federal minimum wage to $15.Lexey Swall for The New York TimesMs. Jones’s desk chronicles her history in photos, books and a letter from President Biden.Lexey Swall for The New York Times“I do think that, in a really short period of time, she’s been able to get traction because people do see it as an additive vision,” said Angela Hanks, who worked with Ms. Jones at Groundwork and is now the chief of programs at the think tank Demos. “In a world where there aren’t a ton of totally new ideas, it’s a new idea. And one that’s resonant because it’s explicit but not exclusionary.”While few concrete policy changes are the result of one person’s efforts, it’s possible to see Ms. Jones’s message in actions as small as a guaranteed income program for Black mothers in Mississippi (now in its fourth round of funding) and as large as the expanded child tax credit and unemployment insurance provisions in the American Rescue Plan Act of 2021. Both federal policies helped low-income people in service professions, where Black women are overrepresented.“What Black Women Best is pushing us to do is to center those who have always been described as ‘deserving’ of their economic hardship,” said Azza Altiraifi, a senior policy manager at the racial justice advocacy group Liberation in a Generation. “Those sorts of stories were not common before. And it’s not because there weren’t people doing that research — it just didn’t seem to be a worthwhile exploration.”Ms. Jones’s path to influencing policy wasn’t a straight line. After majoring in math at Spelman, a historically Black college for women, she started two different Ph.D. programs and dropped out each time, after finding them to be only glancingly useful for the real work she wanted to do.“I felt like economics was the way I could do something for my grandmother, who was on a fixed income, or do something for my cousin, who’s a home health aide,” Ms. Jones said, explaining why she called off her pursuit of a doctorate. “I thought it was going to be labor economics, the things that I love, and it wasn’t. It was like advanced real analysis. It was honestly awful.”Fortunately for Ms. Jones, Washington is littered with Ph.D. dropouts who found policymaking more motivating than academic credentials. She spent years training with economists at the city’s labor-oriented think tanks. When Mr. Biden’s transition team went looking for a chief economist at the Department of Labor, in the wake of nationwide protests for racial equity in early 2020, she was an obvious choice — and became the first Black woman to hold the position.Ms. Jones with Alesia Lucas, assistant director of communications for the Service Employees International Union.Lexey Swall for The New York TimesWorking for Labor Secretary Martin J. Walsh, Ms. Jones found, was a unique opportunity to put her ideas into practice. She was charged with carrying out the president’s executive order on advancing racial equity, which instructed each agency to determine how it could eliminate barriers for minorities. Ms. Jones dug in, finding ways to make sure people of color got their share of procurement dollars, unemployment insurance, apprenticeships, jobs at the department, fair performance reviews and everything else that the Labor Department had to offer.Through it all, she argued that the economy hadn’t recovered until everyone was doing well. At times she even had to make that case inside the 17,000-person department, where some of her colleagues didn’t realize that the Black unemployment rate is almost always about twice as high as the white unemployment rate. Other times she had to make that case publicly, in regular videos breaking down the latest jobs report, for the better part of the year she worked at the Labor Department.While the average unemployment rate sank back to its prepandemic level in 2022, the racial gap remained wide. “It took forever — forever — for Black women to recover to even 2018 levels,” Ms. Jones said. She took this message to Twitter, sometimes using memes. In 2021, she didn’t hide her disappointment when the Senate backed off of legislation that came right out of the Black Women Best playbook — including beefed-up subsidies for child and elder care — in the face of opposition from Senator Joe Manchin III, the West Virginia Democrat.Mr. Walsh, who recently stepped down as labor secretary, said that Ms. Jones kept him focused on the idea that the prepandemic status quo wasn’t good enough.Ms. Jones is seven months into her new role at the Service Employees International Union.Lexey Swall for The New York Times“Janelle brought her brilliant economic mind, passion for building an accessible, equitable economy for all, and leadership to the Department of Labor at a critical time of transformation in the American economy,” Mr. Walsh said in an email, “insisting that this country’s workers — especially those usually left behind — remain at the forefront of the national policy response to tremendous upheaval.”Ultimately, Black men and women made strong gains as the pandemic waned, in part because in 2021 the Federal Reserve held off on raising interest rates for months in an attempt to cool off the economy, even as prices started to escalate. Raising interest rates makes businesses less willing to expand and often results in layoffs, which tend to hit people of color first. Ms. Jones, who now speaks for millions of union workers, had argued that a tight labor market would reduce racial inequality.“I care about all workers, obviously, but I really, really care about Black and brown women,” Ms. Jones said. “And to be in a place where those workers are centered, where it’s most of our members — it feels like the perfect place to do the things that make me excited.” More

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    U.S. Job Growth Eases, but Extends Its Streak

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    Employers added 236,000 jobs as the Federal Reserve’s interest-rate increases appeared to take a toll. The unemployment rate fell to 3.5 percent.The U.S. economy generated hearty job growth in March, but at a slowing rate that appeared to reflect the toll of steadily rising interest rates.Employers added 236,000 jobs in the month on a seasonally adjusted basis, the Labor Department reported on Friday, down from an average of 334,000 jobs added over the prior six months. The unemployment rate fell to 3.5 percent, from 3.6 percent in February.The year-over-year growth in average hourly earnings also slowed, to 4.2 percent, the slowest pace since July 2021 — a sign the Federal Reserve has been looking for as it seeks to quell inflation. And the average workweek shortened with the easing of staffing shortages, which had required workers to cover extra hours.Preston Caldwell, chief U.S. economist at Morningstar Research, said the data offered fresh hope that the Fed could cool off the economy without causing a recession. “It does look like the range of options that are adjacent to what we might call a soft landing is expanding,” he said. “Wage growth has mostly normalized now without a massive uptick in unemployment. And a year ago, a lot of people were not predicting that.”Wage growth is slowing and is still behind inflationYear-over-year percentage change in earnings vs. inflation More

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    Wages May Not Be Inflation’s Cause, but They’re the Focus of the Cure

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    While fear of a “wage-price spiral” has eased, the Federal Reserve’s course presumes job losses and risks a recession. Some see less painful remedies.As Covid-19 eased its debilitating grip on the U.S. economy two years ago, businesses scrambled to hire. That lifted the pay of the average worker. But as one economic challenge ended, another potential problem emerged.Many economic analysts feared that a wage-price spiral was forming, with employers trying to recover the higher labor costs by increasing prices, and workers in turn continually ratcheting up their pay to make up for inflation’s erosion of their buying power.As wages and prices have risen at the fastest pace in decades, however, it has not been an evenly matched back and forth. Inflation has outstripped wage growth for 22 consecutive months, as calculated by economists at J.P. Morgan.That has prompted economists to debate how much, if at all, pay has driven the current bout of inflation. As recently as November, the Federal Reserve chair, Jerome H. Powell, said at a news conference, “I don’t think wages are the principal story for why prices are going up.”At the same time, influential voices on Wall Street and in Washington are arguing over whether workers’ earnings growth — which, on average, has already slowed — will need to let up further if inflation is to ease to a rate that policymakers find tolerable.Wage growth has not kept up with inflationYear-over-year percentage change in earnings vs. inflation through February More

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    Job Openings Fell in February, JOLTS Report Shows

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    The U.S. job market continues to ease off its red-hot pace, a government report shows, but there are still more openings than unemployed workers.Demand for workers in the United States eased in February, a sign that the red-hot labor market continues to cool off somewhat.There were 9.9 million job openings in February, down from 10.6 million on the last day of January, the Labor Department reported Tuesday in the Job Openings and Labor Turnover Survey, known as JOLTS.The drop in open positions is a signal that the labor market is slowing, but the report included data that points to a still-healthy environment for workers: Four million workers quit their jobs during the month, a slight increase from January, and the number of layoffs decreased slightly to 1.5 million.There were 1.7 jobs open for every unemployed worker in February, a decline from 1.9 in January. The Federal Reserve has been paying close attention to that ratio as it looks to slow hiring, part of its effort to contain inflation.Until recent months, the number of available jobs had risen substantially as the economy recovered from the pandemic recession, with companies rushing to hire workers after public health restrictions were rolled back.“The general trend in JOLTS in recent months has been a gradual movement back toward more normal labor market dynamics,” said Julia Pollak, the chief economist at ZipRecruiter. “This looks more like a rebalancing. Job openings were way up in the stratosphere.”The gradual slowing may be encouraging for policymakers. Fed officials worry that a tight job market is contributing to inflation, as employers may feel pressure to raise wages to compete for workers and then pass along price increases to consumers. The number of available openings has remained high in spite of climbing borrowing costs.The central bank has raised interest rates to about 5 percent, from near zero, over the past year, aiming to make it costlier for companies to expand and consumers to spend. But it also wants to avoid setting off widespread layoffs or causing lasting damage to the labor market.“We’re still in a market that is quite strong,” said Nick Bunker, economic research director for North America at the Indeed Hiring Lab. But, he added, “the cool-off is more apparent now.”One measure of inflation that the Fed watches closely — the Personal Consumption Expenditures index — showed that price gains slowed substantially in February, to 5 percent on an annual basis, down from 5.3 percent in January.Despite high-profile job cuts in the tech sector, layoffs overall have been historically low, a sign that employers may be reluctant to part with workers hired during pandemic-era spikes. The number of workers quitting their jobs voluntarily — a sign that they are confident they can find work elsewhere — rose slightly in February, to four million.“The layoffs we’re seeing all over the media in tech and finance are being more than offset by an absence of layoffs and discharges in the Main Street economy,” Ms. Pollak said. “Labor-market dynamics look pretty favorable to workers still,” she added.JOLTS is considered a lagging indicator, telling more about conditions in the recent past than offering information about what may come. On Friday, the Labor Department will release employment data for March. Economists surveyed by Bloomberg expect the report to show that employers added about 240,000 jobs, a slight slowdown from February but still a pace of hiring that reflects a robust labor market. More

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    Broadcast News Is at Center of Fight Over Noncompete Clauses

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    Job-switching barriers are routine at TV stations, even for workers not on the air. A proposed federal rule would curb the practice across all fields.Of all the professions, perhaps none is more commonly bound by contracts that define where else an employee can go work than local television news.The restrictions, known as noncompete clauses, have been a condition of the job for reporters, anchors, sportscasters and meteorologists for decades. More recently, they’ve spread to off-air roles like producers and editors — positions that often pay just barely above the poverty line — and they keep employees from moving to other stations in the same market for up to a year after their contract ends.For that reason, there’s probably no industry that could change as much as a result of the Federal Trade Commission’s effort to severely limit noncompete clauses — if the proposed rule is not derailed before being finalized. Business trade associations are lobbying fiercely against it.“The vast majority of people who work in this country, if they find themselves in a bad situation and they don’t like it, they have options to leave, and they don’t have to move,” said Rick Carr, an agent who represents broadcast workers. “And TV doesn’t allow that.”The pending rule would most likely help people like Leah Rivard, who produces the 6 p.m. and 10 p.m. newscasts at WKBT in La Crosse, Wis.She was hired in the summer of 2021, at an hourly rate of $15. A year later, the station brought on a cohort of recent journalism school graduates as part of a new training program that promised to pay off a chunk of their student loans. Several longer-tenured producers left, and Ms. Rivard wanted to leave, too, since she ended up having to teach a bunch of inexperienced young people how to write scripts and edit video.When Ms. Rivard spoke to her managers, she was told that if she left for another station anywhere in the country before her contract expired this year, they could sue her. So she has continued to work for the station, an experience she’s called “absolute hell.” But even after her contract ends in June, a noncompete clause will prevent her from working for any of the other stations in La Crosse or Eau Claire, an hour and a half north, for a year after that.Ms. Rivard plans to look for work in Milwaukee, and since she doesn’t have much to tie her down in La Crosse, she’s eager to leave. But for plenty of older employees with children in school and mortgages to pay, a noncompete means there’s no easy way out.“If your station is so toxic that it’s affecting you, and you want to leave, you have to leave news altogether and find a public relations job,” Ms. Rivard said. “It leaves no accountability for the company to be a good company for employees.”Chris Palmer, WKBT’s general manager, said he believed noncompetes benefited both employers and employees.“We invest a lot of time and money training and publicly marketing an individual journalist, which, in turn, increases the value of that journalist in the local market,” he said. “These employees also have access to proprietary local research and strategic investments. It would be unfair for that to benefit a direct competitor without protection.”Noncompete clauses have become standard in many workplaces and cover about 18 percent of the U.S. labor force, according to research by economists at the University of Maryland and the University of Michigan.In broadcasting, though, noncompetes are ubiquitous. According to a survey of TV news directors by Bob Papper, an adjunct professor at the S.I. Newhouse School of Public Communications at Syracuse University, about 90 percent of news anchors, 78 percent of reporters and 87 percent of weathercasters were bound by noncompetes in 2022. Those numbers have been fairly stable for decades.Amy DuPont quit her job as an anchor at WKBT and went to work in public relations, knowing that she wouldn’t be allowed to work locally in broadcasting for another year.Narayan Mahon for The New York TimesIn recent years, however, noncompetes have grown to cover a far wider swath of the newsroom. About half of digital writers and content managers, 71 percent of producers and 86 percent of multimedia journalists have clauses restricting their ability to work elsewhere in the market after their contracts end. That’s up significantly from when Mr. Papper started tracking contract provisions in depth two decades ago.That growth has occurred despite a campaign by the one of the biggest labor unions in television, SAG-AFTRA, to limit noncompetes for broadcast employees. Since the mid-90s, the group has been successful in a handful of states — like Massachusetts and Illinois — while failing in others, like Michigan and Pennsylvania. Some states, most notably California, decline to enforce most noncompetes, regardless of the industry.In states that circumscribe noncompetes, where SAG-AFTRA also tends to have the most members, the union says workers enjoy higher wages and more freedom to escape bad workplace conditions — particularly important for women, in a field notorious for sexual harassment.“We have seen more flexibility within our membership, and also nonunion shops, for employees who decide at the end of their contract that they’d like to move on,” said Mary Cavallaro, the chief broadcast officer for SAG-AFTRA. But the National Association of Broadcasters — which signed on to a multiindustry letter opposing the federal government’s proposed ban — says that because stations promote their reporters and anchors to develop their local brand recognition, they should be able to prevent them from “crossing the street,” in industry parlance.“While there are certainly some cases where noncompete clauses are overly restrictive, we believe a categorical ban goes too far and that broadcasting presents a unique case for the use of reasonable noncompete clauses for on-air talent,” said Alex Siciliano, a spokesman for the association.Mr. Siciliano did not respond to a further inquiry about why noncompetes were needed for employees not appearing on air.To many broadcasting veterans, the main reason that stations impose noncompetes is clear: There’s a recruiting crunch in broadcast news, particularly for producers. It’s a difficult job, with either very early or very late hours and tight deadlines. It requires a college degree and sometimes a master’s degree in journalism, and pay is no longer competitive for people with media skills. The median salary for a producer is $38,000, according to Mr. Papper’s survey.“There is a belief on the part of non-news executives that working in TV news is still glamorous enough that people are lining up to go into the business,” Mr. Papper said. “But what I’m hearing is that they’re not lining up anymore. And the fact is that the skill set you learn in college that allows you to start in TV news also allows you entry into a whole lot of other, better-paying jobs.”The apparent disconnect between television news management and the pool of available talent has meant that job postings stay open longer. When an offer is extended, it comes with an almost inescapable time commitment.Beth Johnson, a television talent agent, says she had to move from exclusively representing clients to more training and consulting, since newsroom employees were no longer able to move around enough to negotiate significant pay raises. The rapid consolidation in local news, with major companies like Nexstar and Sinclair buying out smaller ownership groups, has further diminished the employees’ options.“It’s really hard for these journalists to make a good living, and it’s getting harder to leverage to make sure they can,” Ms. Johnson said. “So we wanted to pivot to say to journalists, ‘It doesn’t make sense for you to pay me for three years, because you’re not going to make enough to keep me for three years, but you’re really going to need help with that promotion for a year.’”Although reporters and anchors are paid slightly better than producers, they are routinely forced to move if they need to earn more. If they can’t leave town, they often leave the business. The docket for the Federal Trade Commission’s proposed noncompete ban is peppered with examples of reporters and producers whose careers had been constrained or cut short by the inability to leave their employer for similar work nearby.Take Amy DuPont, one of Ms. Rivard’s former colleagues at WKBT. After working as an anchor in San Diego and Milwaukee, she moved with her husband to La Crosse, her hometown, after he retired from the military. When Ms. DuPont felt she had reached a breaking point at the station, she quit for a job in public relations. Other stations in town asked if she was interested in switching over, but she didn’t even try.“Even if I wanted to, I’m not legally able to go there,” said Ms. DuPont, who now represents Kwik Trip, the Midwestern gas station chain. “For someone like me, who’s married and 43 years old with two children, and I own my home, it prevents me from doing my career, something I’ve spent 22 years doing.”Ultimately, when journalists have to switch cities to earn enough to keep up with the cost of living, local residents lose a trusted source of reporting.David Jones worked in broadcast news for 23 years, mostly in management roles that required him to recruit and hire. He quit in 2021 to join a public relations firm, and posted a long meditation on LinkedIn about how inhospitable the industry had grown for employees.Not mentioned, but under the surface, were noncompetes, which hurt the public as well as the people bound by them, he said in an interview.“You really want someone with market knowledge,” Mr. Jones said, “which isn’t to say that someone can’t come in and learn the market quickly, but there’s so much benefit to the community when you’re able to do that. With noncompetes, you almost never get to do that.” More