The expanded child tax credit increased the subsidy to $3,600 for every child under the age of 6 and $3,000 for those 6 to 17, and extended it to parents not working. It was responsible for removing 2.1 million children of the 3.4 million who left poverty. Making it permanent, as progressives have advocated, would signify a departure from a trend toward incentivizing work that began in the 1990s with tougher welfare laws.

Some economists have argued that permanently expanding the child tax credit would over the long term lead some parents to work less, increasing poverty. The census report found poverty among year-round, full-time workers to be almost nonexistent, at 2 percent. But others have found the credit’s potential effects on work force participation to be much more minor, and the impact on children to be beneficial nonetheless.

“Maybe you will have a few people stop working, but regardless, there’s going to be a big decrease in child poverty,” said Jacob Bastian, an economist at Rutgers University. “We should encourage people to work as much as we can, but I don’t think that means we don’t help people.”

In 2021 alone, surveys show, the child tax credit prompted low-income families to eat more healthy meals, pay for more tutoring and extracurricular activities for children and spend more on their own professional development. Even if 2021 marks a low point in the poverty rate — and measures of financial hardship are already on the rise — some beneficial effects may persist.

“Even temporary support can have lasting impact,” said Christopher Wimer, who directs the Center on Poverty and Social Policy at the Columbia University School of Social Work. “There is a great literature that shows — not just suggests, but shows — that improvements in income, especially at early ages, have long-term payoffs for kids.”

Margot Sanger-Katz contributed reporting.

Article source: https://www.nytimes.com/2022/09/13/business/economy/income-poverty-census-bureau.html

But the country’s economic reality remains more muddled than Mr. Biden’s rosy message, as the inflation report underscored. Food prices are continuing to spike, straining lower-income families in particular. The global economy is slowing sharply, and threats remain to the American recovery if European sanctions force millions of barrels of Russian oil off the global market in the months to come.

A possible railroad strike could disrupt domestic supply chains. The White House press secretary, Karine Jean-Pierre, told reporters on Tuesday that the president had called union and company leaders on Monday in an attempt to broker an agreement to avert the strike.

Most important — and perhaps most damaging for Mr. Biden and Democrats — Americans’ wages have struggled to keep pace with fast-rising prices, an uncomfortable truth for a president who promised to make real wage gains a centerpiece of his economic program. Inflation-adjusted average hourly earnings ticked up across the economy in August, the Labor Department said on Tuesday, but they remain down nearly 3 percent from a year ago.

Republicans were quick to criticize Mr. Biden after the report on Tuesday. “Every day, Americans endure Biden’s economic crisis,” said Representative Blaine Luetkemeyer of Missouri, the top Republican on the Small Business Committee. “The Democrats’ inflation continues to drive up costs and leads more and more small businesses and families questioning their future.”

Mr. Biden and his aides have celebrated falling gasoline prices on a daily basis throughout the summer. Those decreasing prices have helped inflation moderate from its high point this year, though not enough to offset rising rent, food and other costs last month.

Even as he acknowledges the pain of rapid price increases across the economy, Mr. Biden has claimed progress in the fight against inflation, including with the signing last month of the energy, health care and tax bill that Democrats called the Inflation Reduction Act. On Tuesday morning, he sought to put a positive shine on the August data, saying in a statement issued by the White House that it was a sign of “more progress” in bringing down inflation.

Article source: https://www.nytimes.com/2022/09/13/us/politics/biden-inflation-report-economy.html

Prices climbed 0.1 percent from July as rapid increases hit a variety of products and services, including food away from home, new cars, dental care and vehicle repair. Given how much gas prices fell in August, the price index had been forecast to decline on a monthly basis.

The upshot is that inflation retains a surprising amount of underlying momentum, which is bad news for Fed officials. Central bankers have been looking for a sustained slowdown in price increases as evidence that their policies are working to cool demand and nudge the economy back toward a healthy environment in which inflation is slow, steady and barely noticeable.

Until that happens, officials have pledged to continue raising interest rates quickly, which can slow borrowing, constrain consumer demand and tamp down hiring and wage growth.

“Inflation is far too high, and it is too soon to say whether inflation is moving meaningfully and persistently downward,” Christopher Waller, a Fed governor, said in a speech last week. “This is a fight we cannot, and will not, walk away from.”

So far, there is little sign that the Fed’s efforts are tanking consumer and business demand. Growth has slowed, but it has not plummeted, and both hiring and wage gains remain rapid. Employers added 315,000 jobs last month, job openings remain high and consumer spending has continued to eke out gains, albeit decelerating ones, this summer.

“Inflation remains hot, financial conditions have seen some improvement and the labor markets are humming along,” Neil Dutta, head of U.S. economics at Renaissance Macro, wrote in a research note after the release. “If the goal is to slow things down and create some pain, the Fed is failing by its own standard.”

Article source: https://www.nytimes.com/2022/09/13/business/economy/inflation-cpi-federal-reserve.html

Mr. Tubbs’s passion for the idea is rooted in personal experience. He grew up in Stockton with a single mother, and they lived on a tight budget. Guaranteed income programs like those sprouting now, he said, could have helped his family.

Preliminary research by Stacia West of the University of Tennessee and Amy Castro of the University of Pennsylvania, based on the first year of Stockton’s two-year program, found that giving families $500 each month reduced those households’ income fluctuations, enabling recipients to find full-time employment.

Researchers, for example, found that 28 percent of recipients had full-time employment when the program started in February 2019; a year later, the figure was 40 percent.

In one case, a participant had been studying to get his real estate license for more than a year — a pathway to more consistent, higher-paying work — but could not find time to study while piecing together an income doing gig jobs. The money from the pilot program, researchers found, gave him the time to study and get his license.

Now the lessons are being tested on a much broader scale.

Abigail Marquez, a general manager overseeing the Los Angeles pilot program, said the goal of her city’s effort was to promote changes to the ways federal public benefit programs were designed.

“Many, if not all, public benefit program regulations contradict each other, are difficult to navigate and are not focused on creating pathways to greater economic opportunity,” Ms. Marquez said. (Some states, including California, have built-in exemptions to ensure that accepting funding from the pilot programs does not put recipients at risk of losing certain state and federal assistance.)

Article source: https://www.nytimes.com/2022/09/10/business/economy/guaranteed-income.html

“Failure to finalize an agreement before the Sept. 16 deadline will hurt U.S. consumers and imperil the availability, affordability and accessibility of everyday essential products,” the Consumer Brands Association, which represents manufacturers of food, beverage, household and personal care products, said in a letter to Mr. Biden last week.

In a statement over the weekend, Corey Rosenbusch, the president of the Fertilizer Institute, an industry group, said a potential work stoppage would be “bad news for farmers and food security.”

The Association of American Railroads, a freight rail industry group, said a disruption to service would cost more than $2 billion per day in economic output, idle thousands of trains and result in widespread product shortages and job losses. Rail accounts for about 28 percent of U.S. freight movement, second only to trucking’s nearly 40 percent, according to federal data.

More than 460,000 additional trucks would be needed each day to carry the goods otherwise delivered by rail, the American Trucking Associations, another industry group, said in a letter last week asking lawmakers to be prepared to intervene. The trucking industry faces a shortage of 80,000 drivers, so a rail disruption would “create havoc in the supply chain and fuel inflationary pressures across the board,” it said.

In a message on Friday, Steve Bobb, the chief marketing officer of one of the rail carriers, BNSF, encouraged customers to ask Congress to intervene. His counterpart at Norfolk Southern echoed that request to its customers over the weekend, too.

Senator Roger Wicker of Mississippi, the top Republican on the Committee on Commerce, Science and Transportation, said on Friday that he was hopeful that a strike could be averted, but was prepared to act if not.

Article source: https://www.nytimes.com/2022/09/12/business/economy/freight-railroad-strike.html

In recent days, Germany, Sweden, France and Britain all announced sweeping billion-dollar relief programs to ease the strain on households and businesses, along with rationing and conservation plans.

The cost of all these measures would be enormous, at a time when government debt levels are already staggering. The worry about perilously high debt prompted the International Monetary Fund this week to issue a proposal to reform the European Union’s framework for government public spending and deficits.

Still, a pitiless and unyielding reality remains: a lack of energy that countries can afford.

At current prices, there is simply not enough to produce the steel, lumber, microchips, glass, cotton, plastic, chemicals and electricity that go into making the food, home heat, garage doors, tampons, bicycles, baby formula, wine glasses and more that consumers want.

The root of the shortage predates the Ukraine war.

Commodity prices started rising in 2020 as countries began emerging from pandemic restrictions, noted Sven Smit, a senior partner at the consulting firm McKinsey Company. In the United States alone, consumers were, in effect, buying $1 trillion more goods than expected, based on spending patterns before coronavirus hit.

And the sudden switch in spending on products like new kitchen tiles and cars rather than services like restaurant dining and entertainment added to the problem because more energy and materials are needed to make them.

Article source: https://www.nytimes.com/2022/09/08/business/economy/russia-ukraine-global-economy.html

Academics say the effect of these disasters, and of higher temperatures in general, will be particularly obvious when it comes to food trade. Some parts of the world, like Russia, Scandinavia and Canada, could produce more grains and other food crops to feed countries as global temperatures rise.

But those centers of production would be farther from hotter and more densely populated areas closer to the Equator. Some of those regions may struggle even more than they do now with poverty and food insecurity.

One danger is that increasing competition for food could encourage countries to introduce protectionist policies that restrict or stop the export of food, as some have done in response to the pandemic and Russia’s invasion of Ukraine. These export restrictions allow a country to feed its own population, but tend to exacerbate international shortages and push up food prices, further aggravating the problem.

The World Trade Organization, citing the damage that protectionist policies could pose, has urged countries to keep trade open to combat the negative effects of climate change.

In a 2018 report, the W.T.O. pointed out that the global food trade was particularly vulnerable to disruptions in transportation that might occur as a result of climate change, like rising sea levels threatening ports or extreme weather degrading roads and bridges. More than half of globally traded grains pass through at least one of 14 global “choke points,” including the Panama Canal, the Strait of Malacca or the Black Sea rail network, the report said.

Ngozi Okonjo-Iweala, the W.T.O.’s director general, has described trade as “a mechanism for adaptation and resilience” that can help countries deal with crop failure and natural disasters. In a speech in January, she cited economic models estimating that climate change was on track to contribute to severe malnutrition, with as many as 55 million people at risk by 2050 because of local effects on food production. But greater trade could cut that number by 35 million people, she said.

Article source: https://www.nytimes.com/2022/09/08/business/economy/climate-change-supply-chain.html

For years during an extraordinary tech boom, recruiters were flush with work. As stock prices, valuations, salaries and growth soared, companies moved quickly to keep up with demand and beat competitors to the best talent. Amy Schultz, a recruiting lead at the design software start-up Canva, marveled on LinkedIn last year that there were more job postings for recruiters in tech — 364,970 — than for software engineers — 342,586.

But this year, amid economic uncertainty, tech companies dialed back. Oracle, Tesla and Netflix laid off staff, as did Peloton, Shopify and Redfin. Meta, Google, Microsoft and Intel made plans to slow hiring or freeze it. Coinbase and Twitter rescinded job offers. And more than 580 start-ups laid off nearly 77,000 workers, according to Layoffs.fyi, a crowdsourced site that tracks layoffs.

The pain was acute for recruiters. Robinhood, the stock trading app that was hiring so quickly last year that it acquired Binc, an 80-person recruiting firm, underwent two rounds of layoffs this year, cutting more than 1,000 employees.

Now some recruiters are adapting from blindly filling open jobs, known as a “butts in seats” strategy, to having “more formative” conversations with companies about their values. Others are cutting their rates as much as 30 percent or taking consulting jobs, internships or part-time roles. At some companies, recruiters are being asked to make sales calls to fill their time.

Article source: https://www.nytimes.com/2022/09/07/technology/recruiters-tech-layoffs.html

With midterm elections fast approaching, the Biden administration is under pressure to demonstrate that it can use this funding wisely and lure manufacturing investments back to the United States. The Commerce Department is responsible for choosing which companies receive the money and monitoring their investments.

In its strategy paper, the Commerce Department said that the United States remained the global leader in chip design, but that it had lost its leading edge in producing the world’s most advanced semiconductors. In the last few years, China has accounted for a substantial portion of newly built manufacturing, the paper said.

The high cost of building the kind of complex facilities that manufacture semiconductors, called fabs, has pushed companies to separate their facilities for designing chips from those that manufacture them. Many leading companies, like Qualcomm, Nvidia and Apple, design chips in the United States, but they contract out their fabrication to foundries based in Asia, particularly in Taiwan. The system creates a risky source of dependence for the chips industry, the White House says.

The department said the funding aimed to help offset the higher costs of building and operating facilities in the United States compared with other countries, and to encourage companies to build the larger type of fabs in the United States that are now more common in Asia. Domestic and foreign companies can apply for the funds, as long as they invest in projects in the United States.

To receive the money, companies will need to demonstrate the long-term economic viability of their project, as well as “spillover benefits” for the communities they operate in, like investments in infrastructure and work force development, or their ability to attract suppliers and customers, the department said.

Projects that involve economically disadvantaged individuals and businesses owned by minorities, veterans or women, or that are based in rural areas, will be prioritized, the department said. So will projects that help make the supply chain more secure by, for example, providing another production location for advanced chips that are manufactured in Taiwan. Companies are encouraged to demonstrate that they can obtain other sources of funding, including private capital and state and local investment.

Article source: https://www.nytimes.com/2022/09/06/business/economy/biden-tech-chips.html

“Unfortunately, as the demand and sales volumes pulled back, we had to account for that,” said Seth Barnes, who owns the company with his wife, Samantha. “We’re a little more comfortable saying, let’s be conservative, let’s hope for a good holiday, but let’s not overextend ourselves, whereas the past two years we were more like, let’s just go for it.”

But other companies see opportunities for growth.

Tyler Boynton expanded his oral surgery practice during the pandemic, buying a practice in Napa, Calif., to supplement his office in Sonoma. It was a gamble — he bought the business in August 2020, when many people were still avoiding the dentist — but one that paid off as the pandemic ebbed and demand rebounded.

For months, Mr. Boynton’s biggest challenge has been finding enough workers. In a single week this year, six people didn’t show up for scheduled interviews. But that has changed. He has hired three people in the past two weeks, and is looking for more.

“In the last month, we’ve had more qualified applicants than we’ve had in the last eight years,” he said. “I don’t know where these people are coming from — they’re just coming out of the woodwork.”

Inflation may be pulling more people back to work as they struggle with the rising cost of living. And headlines about layoffs and a possible recession may be spurring some people to return to work while they can. A recent survey conducted by the career site ZipRecruiter found that job seekers were feeling less confident about their searches, and were putting more importance on job security than on flexibility.

“People are spending down that pandemic nest egg a little more quickly than they expected because of rising prices, and now feel a bit more nervous and a bit more desperate to find a job,” said Julia Pollak, the chief economist at ZipRecruiter.

Article source: https://www.nytimes.com/2022/09/02/business/economy/august-jobs-report.html