Wages and Salaries

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    How Pharmacy Work Stopped Being So Great

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    If any group of workers might have expected their pay to rise last year, it would arguably have been pharmacists. With many drugstores dispensing coronavirus tests and vaccines while filling hundreds of prescriptions each day, working as a pharmacist became a sleep-deprived, lunch-skipping frenzy — one in which ornery customers did not hesitate to vent their frustrations over the inevitable backups and bottlenecks.“I was stressed all day long about giving immunizations,” said Amanda Poole, who left her job as a pharmacist at a CVS in Tuscaloosa, Ala., in June. “I’d look at patients and say to them, ‘I’d love to fill your prescriptions today, but there’s no way I can.’”Yet pay for pharmacists, who typically spend six or seven years after high school working toward their professional degree, fell nearly 5 percent last year after adjusting for inflation. Dr. Poole said her pay, about $65 per hour, did not increase in more than four years — first at an independent pharmacy, then at CVS.For many Americans, one of the pandemic’s few bright spots has been wage growth, with pay rising rapidly for those near the bottom and those at the top. But a broad swath of workers in between has lagged behind.In the two years after February 2020, income for those between the middle and the top tenth of earners grew less than half as quickly as income for those in the top 1 percent, according to data collected by a team of economists at the University of California, Berkeley.The gap is part of a long-term trend made worse by a slowdown in pay gains for middle- and upper-middle-income workers in the 2000s. “If you’re going to a hedge fund or investment bank or a tech company, you’ve done enormously well,” said Lawrence Katz, a labor economist at Harvard. Typical college graduates, he said, “have not done that great.”The stagnation appears to have moved up the income ladder in the last few years, even touching those in the top 10 percent.In some cases, the explanation may be a temporary factor, like inflation. But pharmacists illustrate how slow wage growth can point to a longer-term shift that renders once sought-after jobs less rewarding financially and emotionally.Growing Chains, Falling WagesIn 2018, Suzanne Wommack moved from western Missouri, where she had worked for several years as a pharmacist at a Hy-Vee supermarket, to the eastern part of the state, where she and her husband had relatives. The job she landed as a Walgreens pharmacy manager in Hannibal, roughly an hour-and-a-half outside St. Louis, paid her about $62 per hour — nearly $6 below her previous hourly wage, though regional pay differences helped to explain the drop.More striking was how few pharmacists Walgreens appeared to employ. At Hy-Vee, Dr. Wommack worked with one or two other pharmacists for most of the day. At Walgreens, the volume of business was similar, she said, but she was almost always the only pharmacist on duty during her shift, which often ran from 8 a.m. until the pharmacy closed at 8 p.m.Inflation F.A.Q.Card 1 of 5Inflation F.A.Q.What is inflation? More

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    Britons Brace for More Hardship as Prices Soar Amid Inflation

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    Cutting back on meat. Choosing cheaper supermarket brands. Stockpiling soap. Soaring prices force more sacrifices.LONDON — Stacey Smith grabbed some boxes of tea from a low shelf of a London supermarket on Wednesday, and then phoned the neighbor who had asked her to buy them.“They have gone up 20 pence,” she said. “Do you still want them?”Her neighbor agreed to accept the price increase, something that Ms. Smith, a teaching assistant and a single mother of three, has been unable to do with her own shopping. After she bought the tea, she headed to Aldi, a cheaper supermarket, to shop for her family.In the past months, as food prices have soared in Britain, she has cut down on meat and relied on pasta and sauces instead. Her children have stopped attending swimming lessons, she has limited their trips to the fridge for snacks and she has turned down their requests for money to spend at the bowling alley.“We need that money for food,” said Ms. Smith, who makes 1,200 pounds (about $1,400) a month. “Before, we were keeping our head just above the water. Now, we are literally sinking.”In Britain, inflation rose 10.1 percent in July compared to a year earlier, with consumer prices growing at their fastest pace since 1982. Many Britons, especially the most vulnerable, who have borne the brunt of the effects of inflation, braced for more sacrifices: for saying “no” more often to their children, for making more trips to multiple supermarkets to find discounts, for joining lines at the food banks and for making more compromises to their health.Many Britons are concerned that their leaders have left the country rudderless during the growing economic crisis. The government is embroiled in a leadership transition, with Prime Minister Boris Johnson working out his last few weeks in Downing Street before a successor is announced on Sept. 5. Parliament itself is not in session, and vacation season is in full swing, with Mr. Johnson being spotted in Greece over the weekend — his second foreign holiday in recent weeks.In the meantime, residents are scrambling to cope, often forced to make hard choices.At Iceland, a low-cost supermarket with an emphasis on frozen food, Tainara Graciano, 51, a housekeeper in London, carried a basket with two cartons of eggs and discounted chicken nuggets that were expiring on the same day. She had cut back on bottled water since prices began spiraling up.“He drinks a lot,” she said of the water, looking at her 11-year-old son as he strolled by. Then she pointed at her half-empty basket and said, “Five months ago, I carried two of those.”Britons have been making more trips to multiple supermarkets to seek out lower prices.Andy Rain/EPA, via ShutterstockAcross the street, Arwen Joseph, 47, was shopping for house supplies at the low-cost store Poundland.Ms. Joseph, who is on government benefits and sometimes uses a food bank, said it had been harder to buy healthful food that was compatible with her allergies, which give her severe eczema. As a result, she has cut back on other items.“We used to have ice cream or bubble tea maybe once a week,” said her 9-year-old daughter, Georgia Gold. “Now we haven’t had it so much.”Volunteers at food banks say they have been caught off guard and are now struggling to keep up as more people arrive asking for help.Solomon Smith, who runs the Brixton Soup Kitchen in South London, which provides hot meals and other food bank services to those in need, said the number of people using the service had more than doubled in recent months.“People are telling us they haven’t eaten properly for days,” he said. “Some of them have been forced to go into shops to steal. Others don’t know if they should pay their gas bills or eat food.”The food bank itself has not escaped the inflation squeeze. It has had to cut back on hot meals and food purchases, and has seen public donations dry up, according to Mr. Smith.“We just don’t have enough to give to everyone,” he said, his voice wavering. “I don’t know what is going to happen next week.”People across Britain are confronting similar problems.At the Blackburn Food Bank, in the north of England, more people with full-time employment are turning up as wages have not kept up with the inflation.“People are very shocked that they have to be here,” said Gill Fourie, operations manager at Blackburn. “People don’t even have gas and electricity to cook,” she said, referring to mounting household energy prices which are forecast to climb to 3,500 pounds (about $4,240) a year in October, triple what they were a year ago. She added, however, that the facility continued to receive support from the community. Even people who are in less vulnerable situations have had to watch their wallets.“I would love to get some Mutti, but I cannot afford it,” said Melanie McHugh, an actress, as she looked at cans of tomato sauce at her local supermarket in south London. She said she was going to make shakshuka, a vegetable dish that could last for several days. She went for a cheaper brand of sauce.Ms. McHugh, who has stopped buying butter, also grabbed a lower cost brand of chorizo.“I am aware that I am lucky,” she said. “But I am also aware my habits have changed.”The British government has allocated £15 billion (about $18 billion) in benefits for the most vulnerable families. Ms. Smith, the mother of three, said she had received about 300 pounds this month. She has also stockpiled laundry soap, but said that did not ease her worries. She has started thinking of giving up her car and getting another job, as a cleaner, on weekends.“It’s not what I would like to do,” she said. “But you have to do what you need to survive.” More

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    If the Job Market Is So Good, Why Is Gig Work Thriving?

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    Conventional employment opportunities abound, but online platforms still have appeal — for flexibility or additional income.American workers are experiencing, by many measures, one of the best job markets ever. The unemployment rate has matched a 53-year low. Job listings per available worker are at historic highs. Wages, while not quite keeping up with inflation, are rising at their fastest pace in decades.So why would people keep doing gig work, a notoriously difficult and insecure way to make a living?Online platforms like Uber and Lyft say the number of people providing services on their networks is rebounding steadily after a sharp decline early in the pandemic, while businesses like hotels and restaurants are breaking work into hour-by-hour increments available on demand.Picking up shifts offers something that traditional permanent employment still generally doesn’t: the ability to work when and as much as you want, demand permitting, which is often essential to balance life obligations like school or child care.And lately, inflation has provided an extra incentive. As the cost of rent and food soars, gig work can supplement primary jobs that don’t provide enough to live on or are otherwise unsatisfying.Lexi Gervis, an executive at a financial management app called Steady, said that users’ data showed that more people were involved in gig work — and that the average gig income per worker grew — from the start of the pandemic through this summer.“We were seeing this move towards multiple income streams, because that work was picked up as a stopgap and then continued,” Dr. Gervis said.Take Denae Bettis, a 23-year-old Steady user living in Severn, Md. After dropping out of college, she got a job at UPS, and after a few years rose to become a safety supervisor, usually starting at 4 a.m. During the pandemic, she took on more responsibilities.“The job got really stressful, and I felt like I had no way out,” Ms. Bettis said. So in June 2020, she started a side gig through Instacart, shopping for people holed up at home. The next month, she quit her job, making it easier for her to pursue her passion: working as a personal makeup artist, which often requires taking early-morning appointments.Surviving on income from gigs — which for Ms. Bettis now include DoorDash as well as Instacart — isn’t easy. But Ms. Bettis thinks she can save enough money to open her own storefront.“We just went through a period where millions died, so are you going to spend your time at your job if it doesn’t fulfill you?” Ms. Bettis said, summing up gig work’s appeal. “Everybody loves stability, but if the flexibility isn’t there, I don’t think a lot of people are going to go back.”The State of Jobs in the United StatesEmployment gains in July, which far surpassed expectations, show that the labor market is not slowing despite efforts by the Federal Reserve to cool the economy.July Jobs Report: U.S. employers added 528,000 jobs in the seventh month of the year. The unemployment rate was 3.5 percent, down from 3.6 percent in June.Care Worker Shortages: A lack of child care and elder care options is forcing some women to limit their hours or has sidelined them altogether, hurting their career prospects.Downsides of a Hot Market: Students are forgoing degrees in favor of the attractive positions offered by employers desperate to hire. That could come back to haunt them.Slowing Down: Economists and policymakers are beginning to argue that what the economy needs right now is less hiring and less wage growth. Here’s why.Labor advocates have long been concerned about businesses that depend on independent contractors, since those workers aren’t entitled to the rights and benefits that come with employee status, like employer contributions to payroll taxes and unemployment insurance. But while the model has gained traction, it has been difficult to pin down how fast the ranks of gig workers are growing.The most accurate measure is Internal Revenue Service data on 1099 tax forms — the freelancers’ counterpart to the W-2 forms filed for employees — but that is available only to select researchers and released with a lag of several years. At last count, in 2018, a team of economists found that about 1.2 percent of workers with any earnings had at least some income from online platform work. (A Pew survey from 2021 found that the share of all adults with gig income in a 12-month period was about 9 percent.)The closest government metric that is more timely comes from the Bureau of Labor Statistics, which asks people whether they count themselves as self-employed. That number rose significantly as a share of the labor force from early 2020 to early this year. But it generally captures people for whom self-employment is the main source of income — which, for most gig workers, it isn’t. More likely, the bump represents an increase in the number of people working as home improvement contractors and owner-operator truck drivers — two longtime means of self-employment that surged during the pandemic — and some white-collar freelancers.Less comprehensive but more specific data comes from third-party platforms like Steady, which allows nearly six million workers to track their often-variable sources of income and posts incentives from gig platforms to try working for them. From February 2020 to June 2022, Steady recorded a 31 percent increase in the share of workers on the app with 1099 income. More of those were women than men, with particular growth among single mothers. Freelance income per gig worker increased 13 percent.Ms. Bettis hopes that doing deliveries will allow her to save enough money to open her own storefront.Rosem Morton for The New York TimesAt the same time, the lines between gig work and traditional employment are blurring.Staffing agencies have long supplied temporary workers for industries like warehousing and light manufacturing, where they would have to show up at a certain time on certain days until the business no longer needed the extra labor. Now, some agencies also offer one-off, no-commitment shifts in workplaces that rarely used temp labor before, like restaurants, hotels and retailers.Under this approach, while offering the flexibility of gig work, the staffing agencies usually serve as the employer and administer benefits. Workers are paid as W-2 employees, not independent contractors, which means that they’re still protected by federal labor laws and elements of the social safety net, including workers’ compensation in the event of an injury.Snagajob, an hourly work platform, says that those shifts tripled from 2020 to 2021, and that they will probably quintuple in 2022 — mostly as side income because people’s regular jobs weren’t sufficient.“I think if they were getting the ultimate flexibility and all the compensation they wanted from their full-time employer, there’s probably less of a need for shifts,” said Snagajob’s chief executive, Mathieu Stevenson. “But the reality is, at the overwhelming majority of businesses, you can’t offer as much flexibility. So this is a way to say, ‘If you do want to add an extra $150 because you need it, whether because you want to do something special with your family or you need to pay the light bill, this is an avenue.’”More so than online gig jobs, it can also be a springboard to other opportunities.It worked for Silvia Valladares, 24, who started picking up Snagajob shifts a few years ago to support herself as a college student studying fine arts in Richmond, Va., the company’s initial market. Dishwashing and catering at different places allowed her to fit work in between her classes. But while working at an event venue called Dover Hall, she took a shine to hospitality, and decided to make that her career.“I got to know the regular staff and the management, and they got to know me,” Ms. Valladares said. “Eventually I asked if I could just work here, and they just put me on the regular staff.” Now, as bed-and-breakfast director, she’s the one posting gigs on Snagajob — which lately have been filling quickly.Worker advocates say allowing many competing employers to post last-minute shifts through an intermediary is probably a better model than a world of platforms that change rates at will and lack many of the legal obligations that employers must meet. But they say it still leaves workers on the margins of the labor market. Research on labor outsourcing has generally shown that temp workers are compensated less generously than co-workers who are hired directly.“You can look at it and say, ‘This is great, people need jobs, these companies can do the matching, it’s a win-win,’” said Daniel Schneider, a professor of public policy at Harvard’s Kennedy School of Government who has studied low-wage work. “The broader context is that it’s really not. It’s just a way for companies to shift costs and avoid economic responsibility.”And while gig work has retained and even enhanced its appeal through the pandemic and recovery, it is not clear what will happen if the economy tips into recession and the number of conventional jobs starts to shrink.Gig companies say it will bolster their labor supply, as the hardship caused by rising prices has. Uber said on its second-quarter earnings call that for 70 percent of its new drivers, the cost of living influenced their decision to join. “There’s no question that this operating environment is stronger for us,” said Dara Khosrowshahi, the chief executive.But in an economic downturn, an increase in worker availability for online platforms could coincide with a fall in demand. If customers reduce delivery orders and take fewer cab rides, it would be harder for those who depend on the apps to make a living.That worries Willy Solis, a driver for the Target-owned delivery service Shipt in the Dallas area who has been an organizer for better conditions.“When people are desperate for work, that’s usually what they want to do, is find something that’s easily obtainable,” he said. But what is good for the gig-work companies may not be good for the workers, he added. “Whenever they do hiring sprees,” he said, “we see an influx in gig work and a decrease in the amount of work that’s available to us.” More

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    Trader Joe’s Workers Vote to Unionize at a Second Store

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    Workers at a Trader Joe’s in Minneapolis voted on Friday to unionize, adding a second unionized store to the more than 500 locations of the supermarket chain.Employees at a Trader Joe’s in Massachusetts voted to unionize last month, part of a trend of recent union victories involving service workers at companies like Starbucks, Apple and Amazon.The Minneapolis vote was 55 to 5, according to the National Labor Relations Board, which held the election.The Minneapolis workers voted to join Trader Joe’s United, the same independent union that represents workers in Hadley, Mass. Workers at a third Trader Joe’s store, in Colorado, have filed for a union election, but the labor board has not yet authorized a vote or set an election date.In a statement referring to the election results in Minneapolis, a Trader Joe’s spokeswoman, Nakia Rohde, said, “While we are concerned about how this new rigid legal relationship will impact Trader Joe’s culture, we are prepared to immediately begin discussions with their collective bargaining representative to negotiate a contract.”Sarah Beth Ryther, a Trader Joe’s worker in Minneapolis who was involved in the organizing campaign, said her co-workers had been motivated in part by dissatisfaction with pay and benefits, issues that helped prompt the union campaign in Massachusetts. Workers have complained that the company has made its benefits less generous in recent years, though some benefits have improved more recently.But Ms. Ryther said she and her colleagues were also concerned that the store, which is in an area where some residents struggle with drug dependency and mental health challenges, appeared not to have protocols or systems in place to handle certain emergencies. She cited a person who came into the store last fall with what appeared to be a gunshot wound and collapsed into her arms.Police officers arrived quickly, Ms. Ryther said, but Trader Joe’s did little to address the aftermath, such as explaining to workers what had happened. Several days passed before she was told that she could collect workers’ compensation while taking time off to deal with the trauma, she said.Trader Joe’s did not respond to a request for comment on Ms. Ryther’s account of the workers’ complaints and the store’s conditions, but, in her statement, Ms. Rohde said the company was “committed to responding quickly when circumstances change to ensure we are doing the right thing to support our crew.”In March 2020, the company’s chief executive, Dan Bane, sent a letter to employees referring to “the current barrage of union activity that has been directed at Trader Joe’s” and asserting that union advocates “clearly believe that now is a moment when they can create some sort of wedge in our company through which they can drive discontent.” More

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    In an Unequal Economy, the Poor Face Inflation Now and Job Loss Later

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    For Theresa Clarke, a retiree in New Canaan, Conn., the rising cost of living means not buying Goldfish crackers for her disabled daughter because a carton costs $11.99 at her local Stop & Shop. It means showering at the YMCA to save on her hot water bill. And it means watching her bank account dwindle to $50 because, as someone on a fixed income who never made much money to start with, there aren’t many other places she can trim her spending as prices rise.“There is nothing to cut back on,” she said.Jordan Trevino, 28, who recently took a better paying job in advertising in Los Angeles with a $100,000 salary, is economizing in little ways — ordering a cheaper entree when out to dinner, for example. But he is still planning a wedding next year and a honeymoon in Italy.And David Schoenfeld, who made about $250,000 in retirement income and consulting fees last year and has about $5 million in savings, hasn’t pared back his spending. He has just returned from a vacation in Greece, with his daughter and two of his grandchildren.“People in our group are not seeing this as a period of sacrifice,” said Mr. Schoenfeld, who lives in Sharon, Mass., and is a member of a group called Responsible Wealth, a network of rich people focused on inequality that pushes for higher taxes, among other stances. “We notice it’s expensive, but it’s kind of like: I don’t really care.”Higher-income households built up savings and wealth during the early stages of the pandemic as they stayed at home and their stocks, houses and other assets rose in value. Between those stockpiles and solid wage growth, many have been able to keep spending even as costs climb. But data and anecdotes suggest that lower-income households, despite the resilient job market, are struggling more profoundly with inflation.That divergence poses a challenge for the Federal Reserve, which is hoping that higher interest rates will slow consumer spending and ease pressure on prices across the economy. Already, there are signs that poorer families are cutting back. If richer families don’t pull back as much — if they keep going on vacations, dining out and buying new cars and second homes — many prices could keep rising. The Fed might need to raise interest rates even more to bring inflation under control, and that could cause a sharper slowdown.In that case, poorer families will almost certainly bear the brunt again, because low-wage workers are often the first to lose hours and jobs. The bifurcated economy, and the policy decisions that stem from it, could become a double whammy for them, inflicting higher costs today and unemployment tomorrow.“That’s the perfect storm, if unemployment increases,” said Mark Brown, chief executive of West Houston Assistance Ministries, which provides food, rental assistance and other forms of aid to people in need. “So many folks are so very close to the edge.”America’s poor have spent part of the savings they amassed during coronavirus lockdowns, and their wages are increasingly struggling to keep up with — or falling behind — price increases. Because such a big chunk of their budgets is devoted to food and housing, lower-income families have less room to cut back before they have to stop buying necessities. Some are taking on credit card debt, cutting back on shopping and restaurant meals, putting off replacing their cars or even buying fewer groceries.But while lower-income families spend more of each dollar they earn, the rich and middle classes have so much more money that they account for a much bigger share of spending in the overall economy: The top two-fifths of the income distribution account for about 60 percent of spending in the economy, the bottom two-fifths about 22 percent. That means the rich can continue to fuel the economy even as the poor pull back, a potential difficulty for policymakers.The Federal Reserve has been lifting interest rates rapidly since March to try to slow consumer spending and raise the cost of borrowing for companies, which will in turn lead to fewer business expansions, less hiring and slower wage growth. The goal is to slow the economy enough to lower inflation but not so much that it causes a painful recession.Officials at West Houston Assistance Ministries said its food bank served 200 households on Friday.Meridith Kohut for The New York TimesBut job growth accelerated unexpectedly in July, with wages climbing rapidly. Consumer spending, adjusted for inflation, has cooled, but Americans continue to open their wallets for vacations, restaurant meals and other services. If solid demand and tight labor market conditions continue, they could help to keep inflation rapid and make it more difficult for the Fed to cool the economy without continuing its string of quick rate increases. That could make widespread layoffs more likely.“The one, singular worry is the jobs market — if demand is constrained to the point that companies have to start laying off workers, that’s what hits Main Street,” said Nela Richardson, chief economist at the job market data provider ADP. “That’s what hits low-income workers.”8 Signs That the Economy Is Losing SteamCard 1 of 9Worrying outlook. More

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    Good News on Jobs May Mean Bad News Later as Hiring Spree Defies Fed

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    Employers hired rapidly and paid more in July, suggesting the Federal Reserve may have to remain aggressive in its effort to cool the economy.America’s job market is remarkably strong, a report on Friday made clear, with unemployment at the lowest rate in half a century, wages rising fast and companies hiring at a breakneck pace.But the good news now could become a problem for President Biden later.Mr. Biden and his aides pointed to the hiring spree as evidence that the United States is not in a recession and celebrated the report, which showed that employers added 528,000 jobs in July and that pay picked up by 5.2 percent from a year earlier. But the still-blistering pace of hiring and wage growth means the Federal Reserve may need to act more decisively to restrain the economy as it seeks to wrestle inflation under control.Fed officials have been waiting for signs that the economy, and particularly the job market, is slowing. They hope that employers’ voracious need for workers will come into balance with the supply of available applicants, because that would take pressure off wages, in turn paving the way for businesses like restaurants, hotels and retailers to temper their price increases.The moderation has remained elusive, and that could keep central bankers raising interest rates rapidly in an effort to cool down the economy and restrain the fastest inflation in four decades. As the Fed adjusts policy aggressively, it could increase the risk that the economy tips into a recession, instead of slowing gently into the so-called soft landing that central bankers have been trying to engineer.“We’re very unlikely to be falling into a recession in the near term,” said Michael Gapen, head of U.S. economics research at Bank of America. “But I’d also say that numbers like this raise the risk of a sharper landing farther down the road.”Interest rates are a blunt tool, and historically, big Fed adjustments have often set off recessions. Stock prices fell after Friday’s release, a sign that investors are worried that the new figures increased the odds of a bad economic outcome down the line.Even as investors zeroed in on the risks, the White House greeted the jobs data as good news and a clear sign that the economy is not in a recession even though gross domestic product growth has faltered this year.“From the president’s perspective, a strong jobs report is always extremely welcome,” Jared Bernstein, a member of the White House Council of Economic Advisers, said in an interview. “And this is a very strong jobs report.”Still, the report appeared to undermine the administration’s view of where the economy is headed. Mr. Biden and White House officials have been making the case for months that job growth would soon slow. They said that deceleration would be a welcome sign of the economy’s transition to more sustainable growth with lower inflation.The lack of such a slowdown could be a sign of more stubborn inflation than administration economists had hoped, though White House officials offered no hint Friday that they were worried about it.“We think it’s good news for the American people,” the White House press secretary, Karine Jean-Pierre, told reporters in a briefing. “We think we’re still heading into a transition to more steady and stable growth.”The State of Jobs in the United StatesEmployment gains in July, which far surpassed expectations, show that the labor market is not slowing despite efforts by the Federal Reserve to cool the economy.July Jobs Report: U.S. employers added 528,000 jobs in the seventh month of the year. The unemployment rate was 3.5 percent, down from 3.6 percent in June.Care Worker Shortages: A lack of child care and elder care options is forcing some women to limit their hours or has sidelined them altogether, hurting their career prospects.Downsides of a Hot Market: Students are forgoing degrees in favor of the attractive positions offered by employers desperate to hire. That could come back to haunt them.Slowing Down: Economists and policymakers are beginning to argue that what the economy needs right now is less hiring and less wage growth. Here’s why.The Fed, too, had been counting on a cool-down. Before July’s employment report, a host of other data points had suggested that the job market was decelerating: Wage growth had been moderating fairly steadily; job openings, while still elevated, had been declining; and unemployment insurance filings, while low, had been edging higher.The Fed had welcomed that development — but the new figures called the moderation into question. Average hourly earnings have steadily risen since April on a monthly basis, and Friday’s report capped a streak of hiring that means the job market has now returned to its prepandemic size.“Reports like this emphasize just how much more the Fed needs to do to bring inflation down,” said Blerina Uruci, a U.S. economist at T. Rowe Price. “The labor market remains very hot.”Central bankers have raised borrowing costs three-quarters of a percentage point at each of their last two meetings, an unusually rapid pace. Officials had suggested that they might slow down at their meeting in September, lifting rates by half a point — but that forecast hinged partly on their expectation that the economy would be cooling markedly.Instead, “I think this report makes three-quarters of a point the base case,” said Omair Sharif, founder of Inflation Insights, a research firm. “The labor market is still firing on all cylinders, so this isn’t the kind of slowdown that the Fed is trying to generate to alleviate price pressures.”Fed policymakers usually embrace strong hiring and robust pay growth, but wages have been climbing so fast lately that they could make it difficult to slow inflation. As employers pay more, they must either charge their customers more, improve their productivity or take a hit to their profits. Raising prices is typically the easiest and most practical route.The blistering pace of hiring means the Federal Reserve may need to act more decisively to tame inflation.Scott McIntyre for The New York TimesPlus, as inflation has soared, even robust wage growth has failed to keep up for most people. While wages have climbed 5.2 percent over the past year, far faster than the 2 percent to 3 percent gains that were normal before the pandemic, consumer prices jumped 9.1 percent over the year through June.Fed officials are trying to steer the economy back to a place where both pay gains and inflation are slower, hoping that once prices start to climb gradually again, workers can eke out wage gains that leave them better off in a sustainable way.“Ultimately, if you think about the medium and longer term, price stability is what makes the whole economy work,” Jerome H. Powell, the Fed chair, said at his July news conference, explaining the rationale.Some prominent Democrats have questioned whether the United States should be relying so heavily on Fed policies — which work by hurting the labor market — to cool inflation. Senators Elizabeth Warren of Massachusetts and Sherrod Brown of Ohio, both Democrats, have been among those arguing that there must be a better way.But most of the changes that Congress and the White House can institute to lower inflation would take time to play out. Economists estimate that the Biden administration’s climate and tax bill, the Inflation Reduction Act, would have a minor effect on price increases in the near term, though it may help more with time.While the White House has avoided saying what the Fed should do, Mr. Bernstein from the Council of Economic Advisers suggested that Friday’s report could give the Fed more cushion to raise rates without harming workers.“The depth of strength in this labor market is not just a buffer for working families,” he said. “It also gives the Fed room to do what they need to do while trying to maintain a strong labor market.”Still, the central bank could find itself in an uncomfortable spot in the months ahead.An inflation report scheduled for release on Wednesday is expected to show that consumer price increases moderated in July as gas prices came down. But fuel prices are volatile, and other signs that inflation remains out of control are likely to persist: Rents are climbing swiftly, and many services are growing more expensive.And the still-hot labor market is likely to reinforce the view that conditions are not simmering down quickly enough. That could keep the Fed working to restrain economic activity even as overall inflation shows early, and perhaps temporary, signs of pulling back.“We’re going to get inflation slowing in the next couple of months,” Mr. Sharif said. “The activity part of the equation is not cooperating right now, even if inflation overall does cool off.”Isabella Simonetti More

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    With Surge in July, U.S. Recovers the Jobs Lost in the Pandemic

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    U.S. job growth accelerated in July across nearly all industries, restoring nationwide employment to its prepandemic level, despite widespread expectations of a slowdown as the Federal Reserve raises interest rates to fight inflation.Employers added 528,000 jobs on a seasonally adjusted basis, the Labor Department said on Friday, more than doubling what forecasters had projected. The unemployment rate ticked down to 3.5 percent, equaling the figure in February 2020, which was a 50-year low.The robust job growth is welcome news for the Biden administration in a year when red-hot inflation and fears of recession have been recurring economic themes. “Today’s jobs report shows we are making significant progress for working families,” President Biden declared.The labor market’s continued strength is all the more striking as gross domestic product, adjusted for inflation, has declined for two consecutive quarters and as consumer sentiment about the economy has fallen sharply — along with the president’s approval ratings.“I’ve never seen a disjunction between the data and the general vibe quite as large as I saw,” said Justin Wolfers, a University of Michigan economist, noting that employment growth is an economic North Star. “It is worth emphasizing that when you try to take the pulse of the overall economy, these data are much more reliable than G.D.P.”But the report could stiffen the Federal Reserve’s resolve to cool the economy. Wage growth sped up, to 5.2 percent over the past year, indicating that labor costs could add fuel to higher prices.The Fed has raised interest rates four times in its battle to curb the steepest inflation in four decades, and policymakers have signaled that more increases are in store. That strategy is likely to lead to a slowdown in hiring later in the year as companies cut payrolls to match expected lower demand.Already, surveys of restaurateurs, home builders and manufacturers have reflected concern that current spending will not continue. Initial claims for unemployment insurance have been creeping up, and job openings have fallen for three consecutive months.“At this stage, things are OK,” said James Knightley, the chief international economist at the bank ING. “Say, December or the early part of next year, that’s where we could see much softer numbers.”Payrolls have fully recovered the jobs lost in the pandemic.Cumulative change in jobs since before the pandemic More

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    U.S. jobs report shows a gain of 528,000 in July.

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    U.S. employers added 528,000 jobs in July, the Labor Department said on Friday, again outstripping expectations for a labor market that is still rebounding from the pandemic but that has come under increasing pressure from inflation as well as from escalating interest rates meant to rein in prices.The impressive performance — which brings the total employment back to its level of February 2020, just before the pandemic lockdowns — indicates that a slowdown in some industries has not been enough to drag down overall hiring. And it provides new evidence that the United States has not entered a recession.But most forecasters expect that momentum to slow markedly later in the year, as companies cut payrolls to match lower demand.“At this stage, things are OK,” said James Knightley, the chief international economist at the bank ING. “Say, December or the early part of next year, that’s where we could see much softer numbers.”The unemployment rate was 3.5 percent, down from 3.6 percent in June, matching its 50-year low on the eve of the pandemic.Last week, the government reported that the nation’s gross domestic product, the broadest measure of economic output, had contracted for the second consecutive quarter when adjusted for inflation. The data showed a sharp decline in home building, a slackening of business investment and a sluggish rise in consumer spending.Those trends are bound to affect the labor market overall, even if not uniformly or immediately.Amy Glaser, a senior vice president at the global staffing agency Adecco, said her firm was still struggling to fill hourly jobs, especially in retail and logistics. Employers may not have made those positions attractive enough, and, increasingly, may do without them.“I think we do have a gap in the jobs that are available and the desire to do those jobs,” Ms. Glaser said. “We know there are tens of thousands of warehouse jobs out there, but standing on your feet for 10 hours a day isn’t everyone’s cup of tea.” More