People trying to buy appliances and other retail goods are waiting longer. According to J.D. Power, even at the highest-rated retailers, only 57 percent of customers were able to get customer service within five minutes this year, down from 68 percent in 2018.

Government statistics agencies try to take changes in product quality into account when calculating inflation. But that process, known as hedonic adjustment, most commonly applies to physical objects. It is relatively straightforward to estimate the value of, say, the quality of stitching on a shirt or the value of a backup camera on a new car. There is a whole world of inflation alarmists who argue that this process leads to the understating of true inflation.

But quality changes involving customer service can be ambiguous and hard to measure. The Bureau of Labor Statistics, which generates the Consumer Price Index, does not incorporate quality adjustment on 237 out of 273 components that go into the index, including the vast majority of services.

Alan Cole, a former staffer for Congress’s Joint Economic Committee who writes the newsletter Full Stack Economics, noticed these sorts of annoyances during a long drive through the Northeast this summer — fast food that took an awfully long time to come, poorly stocked condiment stations, soda machines that were out of stock. The dynamic became even more clear to him when he stayed in a hotel that had a large area designated for offering hot breakfast to guests — it was mostly empty, with a few sad mini-boxes of cereal.

For years, he had argued that official inflation measures actually overstated inflation, because there were many below-the-radar product improvements not captured by the data, like software that was becoming less buggy. Now, he concluded, the reverse seemed to be happening.

Article source: https://www.nytimes.com/2021/10/10/upshot/shadow-inflation-analysis.html

This year, Ms. Georgieva managed to create a special reserve fund of $650 billion to help struggling nations finance health care, buy vaccines and pay down debt during the pandemic.

That approach has not always sat well with conservatives in Washington and on Wall Street.

Former President Donald J. Trump immediately objected to the new reserve funds — known as special drawing rights — when they were proposed in 2020, and congressional Republicans have continued the criticism. They argue that the funds mostly help American adversaries like China, Russia, Syria and Iran while doing little for poor nations.

Ms. Georgieva’s activist climate agenda has also run afoul of Republicans in Congress, who have opposed carbon pricing and pushed to withdraw from multinational efforts like the United Nations Framework Convention on Climate Change and the Paris climate agreement.

So has her advocacy for a minimum global corporate tax like the one that more than 130 nations signed on Friday.

In July, Laurence D. Fink, who runs BlackRock, the world’s largest investment management company, and was at odds with the I.M.F.’s stance on Argentina, called the fund and the World Bank outdated and said they needed “to rethink their roles.”

The investigation into data rigging at the World Bank focused on what is known as the Doing Business Report, which contains an influential index of business-friendly countries. WilmerHale, the law firm that conducted the inquiry, said various top officials had exerted pressure to raise the rankings of China, Saudi Arabia, the United Arab Emirates or Azerbaijan in the 2018 and 2020 editions.

Article source: https://www.nytimes.com/2021/10/09/business/economy/imf-mission.html

Instead of hunting for easy house flips, Mr. Spicer said, he’s on the lookout for homes on abnormally large lots with a flat, neglected yard that is primed to start building on. Anything with a pool is out of the question, he said. A home with an elaborate garden can work but costs extra to rip out.

“If it’s all dirt back there, that’s the golden ticket,” he said.

Mr. Spicer’s turn of fortune was a byproduct of California’s efforts to fill its housing shortage. Over the past five years the Legislature has passed a half-dozen laws that make it vastly easier to build accessory dwelling units (A.D.U.s) — a catchall term for homes that are more colloquially known as in-law units and granny flats.

Cities have lost most of their power to prevent backyard units from being built, and state legislators have tried to speed construction by reducing development fees, requiring cities to permit them within a few weeks and prohibiting local governments from requiring dedicated parking spots. In contrast to the battles over S.B. 9 — this year’s duplex law, which was branded a bill of “chaos” that would “destroy neighborhoods” and be “the beginning of the end of homeownership in California” — the A.D.U. laws passed with no comparable controversy.

“‘Granny units’ doesn’t sound intimidating,” said Bob Wieckowski, a state senator from the Bay Area city of Fremont, who has passed three A.D.U. bills since 2016.

Last year, San Diego’s City Council voted unanimously to expand on state law by allowing bonus units, sometimes as many as a half-dozen per lot, if a portion are set aside for moderate-income households. Development has exploded on cue.

California cities issued about 13,000 permits for accessory units in 2020, which is a little over 10 percent of the state’s new housing stock and up from less than 1 percent eight years ago. The effect is already visible throughout Southern California: four-unit buildings rising behind one-story bungalows; prefabricated studio apartments being hoisted into backyards via crane; blocks where a new front-yard apartment sits across the street from a new backyard apartment down the way from a new side-yard apartment.

In response to the new legislation, entrepreneurs have started a host of companies that specialize in helping people plan, design and build backyard units and the coming wave of duplexes. Venture capitalists have put hundreds of millions of dollars into start-ups like Abodu, which is based in Redwood City, Calif., and builds backyard units in a factory, then delivers them on a truck. Until recently, their business was driven by homeowners building A.D.U.s on their property. But over the past year there has been a surge in interest from upstart developers like Mr. Spicer, according to interviews with planners, lenders and contractors.

Article source: https://www.nytimes.com/2021/10/08/business/economy/california-housing.html

“I was actually in Austin for that snowstorm in a house with no electricity, no lights, no power, no heating, no internet,” he said. “This went on for several days. However, if we had the solar plus Powerwall, we would have had lights and electricity.”

Tesla is a leading maker of solar panels and batteries — the company calls one of its products Powerwall — for homeowners and businesses to store renewable energy for use when the sun has gone down, when electricity rates are higher or during blackouts. The company reported $1.3 billion in revenue from the sale of solar panels and batteries in the first six months of the year.

Mr. Musk’s announcement that Tesla would be moving its headquarters from Palo Alto, Calif., came with few details. It is not clear, for example, how many workers would move to Austin. It’s also unknown whether the company would maintain a research and development operation in California in addition to its factory in Fremont, which is a short drive from headquarters and which it said it would expand. The company has around 750 employees in Palo Alto and about 12,500 in total in the Bay Area, according to the Silicon Valley Institute for Regional Studies.

It is also not clear how much money Tesla will save on taxes by moving. Texas has long used its relatively low taxes, which are less than California’s, to attract companies. County officials have already approved tax breaks for the company’s new factory, and the state might offer more.

Over the years, California granted Tesla hundreds of millions of dollars in tax breaks, something that Gov. Gavin Newsom noted on Friday. But because Tesla will continue to have operations in California, it may still have to pay income tax on its sales in the state, said Kayla Kitson, a policy analyst at the California Budget Policy Center.

Whatever incentives they offer Tesla, Texas officials are not likely to change their support for the fossil fuel industries with which the company competes.

Article source: https://www.nytimes.com/2021/10/08/business/tesla-texas-headquarters.html

Jerome H. Powell, the Fed chair, and his colleagues have been pumping $120 billion into markets each month and holding interest rates near zero to keep borrowing costs cheap and credit flowing easily, helping to stoke demand and encouraging employers to expand and hire.

Officials have signaled that they will soon begin to slow the bond purchases — something they could announce as early as November, based partly on progress in the labor market. The September jobs report probably will probably not thwart those plans, which officials have said were based on cumulative job gains and not a single month’s data. The United States has regained more than 17 million jobs since the worst depths of the pandemic.

Yet Fed policymakers have repeatedly promised that even as they pull back on bond buying, they will continue to support the economy with low rates — their more traditional and more powerful tool — for as long as it needs their help. If rapid inflation looks poised to stick around and the labor market is taking a long time to heal, though, they may find themselves forced to lift rates sooner in the jobs rebound than they would like.

“This is not the situation that we have faced for a very long time, and it is one in which there is a tension between our two objectives,” Mr. Powell said during a recent public appearance. He later added that “managing through that process over the next couple years, I think, is the highest and most important priority, and it’s going to be very challenging.”

Central bank officials are hoping that jobs lost during the pandemic return soon, but progress in recent months has been stop and start as coronavirus infections tied to the Delta variant surged, keeping diners away from restaurants and causing rolling school closures. Employers added 194,000 jobs last month, disappointing compared with economist forecasts, which had called for half a million.

Article source: https://www.nytimes.com/2021/10/08/business/economy/fed-jobs-full-employment-inflation.html

“There is complacency in a lot of things,” said Luca Paolini, chief strategist at Pictet Asset Management. He enumerated some of his worries: “‘Inflation is temporary.’ Maybe. Maybe not. Six months ago, consumption was booming. People had money and time. Now they have less money and less time. Earnings momentum has peaked, clearly, relative to six months ago. I’m concerned the market isn’t pricing in deterioration in the economic outlook.”

By some measures, stocks are as expensive as at almost any time in history. The SP 500 trades at about 34 times the last 12 months of earnings. Sarah Ketterer, chief executive of Causeway Capital Management, worries that corporate profits face numerous headwinds and that their impact on stocks could be especially high with valuations so rich.

“Inflation is up, economic growth is down,” she said. “The supply chain disruption phenomenon is global, creating cost increases and margin pressure.” Companies in many industries have reported trouble sourcing some commodities and important components of manufactured goods, such as semiconductors, hindering production and making what they do produce more expensive.

Rising prices have sent interest rates in the bond market higher, driving down bond prices and keeping a lid on bond funds in the third quarter. The average one rose 0.2 percent, dragged down by a 2.9 percent decline in emerging-market portfolios.

“I’m hard pressed to find an area of costs that haven’t gone up, and this may continue for some time,” Ms. Ketterer said. “No one knows how long it will take to unravel the tangled supply chain situation.”

The situation seems most tangled in Asia, where many raw and intermediate materials originate. China has been the source of several worrying recent events, including power cuts that have impeded manufacturing, and financial instability at the China Evergrande Group, a giant, heavily indebted developer.

Some specialists in Asian markets see little chance of Evergrande’s woes spilling over to the wider Chinese financial system, let alone beyond. Matthews Asia, a mutual fund manager, said in a note to investors that mortgage lending standards in China are fairly tight, with large down payments required and the packaging of loans into securities sold to investors minimal.

Article source: https://www.nytimes.com/2021/10/08/business/economy/fed-markets-stocks.html

Instead of hunting for easy house flips, Mr. Spicer said, he’s on the lookout for homes on abnormally large lots with a flat, neglected yard that is primed to start building on. Anything with a pool is out of the question, he said. A home with an elaborate garden can work but costs extra to rip out.

“If it’s all dirt back there, that’s the golden ticket,” he said.

Mr. Spicer’s turn of fortune was a byproduct of California’s efforts to fill its housing shortage. Over the past five years the Legislature has passed a half-dozen laws that make it vastly easier to build accessory dwelling units (A.D.U.s) — a catchall term for homes that are more colloquially known as in-law units and granny flats.

Cities have lost most of their power to prevent backyard units from being built, and state legislators have tried to speed construction by reducing development fees, requiring cities to permit them within a few weeks and prohibiting local governments from requiring dedicated parking spots. In contrast to the battles over S.B. 9 — this year’s duplex law, which was branded a bill of “chaos” that would “destroy neighborhoods” and be “the beginning of the end of homeownership in California” — the A.D.U. laws passed with no comparable controversy.

“‘Granny units’ doesn’t sound intimidating,” said Bob Wieckowski, a state senator from the Bay Area city of Fremont, who has passed three A.D.U. bills since 2016.

Last year, San Diego’s City Council voted unanimously to expand on state law by allowing bonus units, sometimes as many as a half-dozen per lot, if a portion are set aside for moderate-income households. Development has exploded on cue.

California cities issued about 13,000 permits for accessory units in 2020, which is a little over 10 percent of the state’s new housing stock and up from less than 1 percent eight years ago. The effect is already visible throughout Southern California: four-unit buildings rising behind one-story bungalows; prefabricated studio apartments being hoisted into backyards via crane; blocks where a new front-yard apartment sits across the street from a new backyard apartment down the way from a new side-yard apartment.

In response to the new legislation, entrepreneurs have started a host of companies that specialize in helping people plan, design and build backyard units and the coming wave of duplexes. Venture capitalists have put hundreds of millions dollars into start-ups like Abodu, which is based in Redwood City, Calif., and builds backyard units in a factory, then delivers them on a truck. Until recently, their business was driven by homeowners building A.D.U.s on their property. But over the past year there has been a surge in interest from upstart developers like Mr. Spicer, according to interviews with planners, lenders and contractors.

Article source: https://www.nytimes.com/2021/10/08/business/economy/suburbs-housing-density.html

The financial sector had been projecting a grim two weeks ahead. A report released by Goldman Sachs said that there was little reason to believe Congress would meet the Oct. 18 deadline, but that “the public and financial market response would likely force a quick political resolution.”

Senate Democrats are still weighing their options for a path forward. Jen Psaki, the White House press secretary, told reporters on Wednesday that the White House did not want to keep prolonging things with an extension. “We don’t need to go through a cumbersome process that every day brings additional risks,” Ms. Psaki said.

Asked why the White House does not support a short-term debt ceiling increase that could, at least temporarily, calm financial markets, Ms. Psaki replied, “Why not just get it done now?” She said Mr. Biden and Mr. McConnell had not yet spoken about the debt limit.

The budget process of reconciliation would most likely involve two marathons of politically charged votes that Mr. Biden has predicted would be “fraught with all kinds of potential danger for miscalculation.” Democrats say there is no guarantee that Republicans wouldn’t drag those votes out to inflict procedural and political discomfort.

Another option would be to change Senate rules to weaken the ability to filibuster, a proposal that has become increasingly popular in recent years as partisan gridlock has worsened.

Lawmakers have carved out other exceptions to the filibuster. In 2017, Senate Republicans created an exception to clear a path for Neil M. Gorsuch, President Donald J. Trump’s first Supreme Court nominee, to take the bench. In 2013, Senate Democrats did so to overcome Republican opposition to President Barack Obama’s nominees for cabinet posts and judgeships.

On Tuesday evening, Mr. Biden called that route “a real possibility.” On Wednesday, he said he wanted to explain “in plain English” what was at stake should Republicans remain unmoved.

Article source: https://www.nytimes.com/2021/10/06/business/debt-ceiling-default-banks-mcconnell.html

South Korea boomed in the postwar era, making it one of the richest countries in Asia and leading some economists to call its rise the “miracle on the Han River.” But wealth disparity has worsened as the economy has matured.

“South Koreans used to have a collective community spirit,” says Yun Suk-jin, a drama critic and professor of modern literature at Chungnam National University. But the Asian financial crisis in the late 1990s undermined the nation’s positive growth story and “made everyone fight for themselves.”

The country now ranks No. 11 using the Gini coefficient, one measure of income inequality, among the members of the Organization for Economic Cooperation and Development, the research group for the world’s richest nations. (The United States is ranked No. 6.)

As South Korean families have tried to keep up, household debt has mounted, prompting some economists to warn that the debt could hold back the economy. Home prices have surged to the point where housing affordability has become a hot-button political topic. Prices in Seoul have soared by over 50 percent during the tenure of the country’s president, Moon Jae-in, and led to a political scandal.

“Squid Game” lays bare the irony between the social pressure to succeed in South Korea and the difficulty of doing just that, said Shin Yeeun, who graduated from college in January 2020, just before the pandemic hit. Now 27, she said she had spent over a year looking for steady work.

“It’s really difficult for people in their 20s to find a full-time job these days,” she said.

South Korea has also suffered a sharp drop in births, generated partly by a sense among young people that raising children is too expensive.

Article source: https://www.nytimes.com/2021/10/06/business/economy/squid-game-netflix-inequality.html

The administration is under pressure to make a prompt decision, in part because the Fed’s seven-person Board of Governors in Washington will soon face a spate of openings. One governor role is already open. Mr. Clarida’s term ends early next year, leaving another vacancy, and Randal K. Quarles’s term as the board’s vice chair for supervision will expire next week, although his term as a governor runs through 2032.

By announcing key picks soon, the Biden administration could ensure that someone was ready to step into Mr. Quarles’s leadership role. And nominating several officials at once could give the president a chance to show that he is heeding the concerns of Democrats in Congress, who want to see more diversity at the Fed and officials who favor tougher bank regulation.

But the ethics scandal threatens to complicate the picks.

Recent financial disclosures showed that Robert S. Kaplan at the Federal Reserve Bank of Dallas traded millions of dollars in individual stocks last year, and that Eric S. Rosengren at the Federal Reserve Bank of Boston traded real estate-tied securities even as he warned publicly about problems in that sector. The trades have drawn criticism because they occurred during a year in which the Fed hugely influenced a wide range of financial markets.

Both men resigned from their roles as regional presidents amid the controversy, though Mr. Rosengren said he was leaving for health reasons.

Attention has now turned to Mr. Clarida. All of his trades were in broad funds, not individual securities, and have been public since May, but have drawn attention amid the current reckoning. He sold a stake in a bond fund totaling at least $1 million and moved that money into stock funds on Feb. 27, 2020. The transaction gave him more exposure to stocks shortly before the Fed rolled out policies that goosed such investments.

The Fed has said Mr. Clarida’s trades were part of a planned portfolio rebalancing, but declined to specify when the planning happened.

Mr. Powell kicked off an internal ethics review last month. A Fed spokesperson said on Monday that an independent government watchdog would carry out an investigation into whether senior officials broke relevant ethics rules or laws.

Article source: https://www.nytimes.com/2021/10/05/business/economy/federal-reserve-jerome-powell-warren.html