When oil prices fall, many costs for industry and agriculture, including chemicals and fertilizer, generally follow. And shipping becomes more economical. But when they rise sharply, as they did in 2008 and in the 1970s, they tend to increase other prices and suppress the overall economy. And political fallout often ensues.

Predicting energy prices has always been a fool’s game because there are so many factors, including the expectations of traders who buy and sell fuel, the political fortunes of unstable producing countries like Venezuela, Nigeria and Libya, and the investment decisions of state and private oil company executives.

Today those complexities are particularly difficult to assess.

“(When) Will Oil Bulls Start Revising Forecasts Down?” was the title of a recent Citigroup commodities report. With a global recession “on the horizon,” it said, “which is more likely, a robust hurricane season, seeing prices skyrocketing? A return of Iranian barrels? Or a recession, with oil in the $60s by year-end/early 2023?” If a barrel of oil should drop to $60 a barrel, average gasoline prices in the United States would probably fall at least another dollar a gallon.

But a few days after Citi’s projections, Goldman Sachs Commodities Research predicted a price bounce as fuel demand rebounds. “We see growing tail risks to commodity prices inherent in the scenario of sustained growth, low unemployment and stabilized household purchasing power,” the report concluded.

The war in Ukraine remains a major variable in the worldwide supply outlook since Russia normally supplies one of every 10 barrels of the global 100-million-barrel-a-day market. Since the invasion of Ukraine, daily Russian exports have declined by about 580,000 barrels. European sanctions on Russian oil are expected to tighten somewhat more by February, reducing daily Russian exports by an additional 600,000 barrels.

And as Russia further tightens its grip on natural gas sales to Europe in tit-for-tat sanctions retaliation, European utilities will be forced to burn more oil to substitute for gas.

Article source: https://www.nytimes.com/2022/08/15/business/energy-environment/oil-prices.html

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.

Article source: https://www.nytimes.com/2022/08/15/business/economy/gig-work.html

Still, like the other former Soviet republics Lithuania and Latvia, as well as former Communist bloc countries like Poland, Estonia was always more wary of Russia’s power plays.

Two days before the war started, the Estonian prime minister chided “countries which don’t border Russia” for not thinking through the risks of depending on Russian energy.

By contrast, Poland moved to quit itself of Russian natural gas and began work in 2013 on a pipeline that will deliver supplies from Norway. It is scheduled to be completed in October. Lithuania — which at one point had received 100 percent of its supply through a single pipeline from the Russian monopoly Gazprom — went ahead and completed its own small L.N.G. terminal in 2014, the year that Russia annexed Crimea.

Liquefied natural gas terminals are not the only energy source that European countries once disdained and are now compelled to explore. In a hotly disputed decision, the European Parliament last month reclassified some gas and nuclear power as “green.” The Netherlands is re-examining fracking. And Germany is refiring coal plants and even rethinking its determined rejection of nuclear energy.

In Paldiski, enormous wind turbines are along the coast of the Pakri peninsula. On this day, gusts were strong enough not only to spin the blades but also to halt work on the floating terminal. A giant tracked excavator was parked on the sand. At the end of a long skeletal pier, the tops of 200-foot-long steel pipes that had been slammed into the seabed poked up through the water like a skyline of rust-colored chimney stacks.

Paldiski Bay, which is ice-free year-round and has direct access to the Baltic Sea, has always been an important commercial and strategic gateway. Generations before the Soviets parked their nuclear submarines there; the Russian czar Peter the Great built a military fortress and port there in the 18th century.

Now, the bay is again playing a similar role — only this time not for Russia.

Article source: https://www.nytimes.com/2022/08/12/business/economy/estonia-natural-gas-lng.html

“On the surface, this is good news for the Fed,” said Omair Sharif, founder of Inflation Insights. “This is the first baby step toward the moderation they want to see on a regular basis.”

Fed officials remain committed to wrestling America’s rapid inflation lower, and they have raised interest rates at the quickest pace since the 1980s to try to slow the economy and bring supply and demand into balance — making supersize rate moves of three-quarters of a percentage point at each of their past two meetings. Another big adjustment will be up for debate at their next meeting in September, policymakers have said.

But investors interpreted July’s unexpectedly pronounced inflation slowdown as a sign that policymakers could take a gentler route, raising rates a half-point next month. Stocks soared more than 2 percent on Wednesday, as Wall Street bet that the Fed might become less aggressive, which would decrease the chances that it would plunge the economy into a recession.

“It was as good as the markets and the Fed could have hoped for from this report,” said Aneta Markowska, chief financial economist at Jefferies. “I do think it removes the urgency for the Fed.”

Still, officials who spoke on Wednesday remained cautious about inflation. Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, called the report the “first hint” of a move in the right direction, while Charles Evans, president of the Federal Reserve Bank of Chicago, said that it was “positive” but that price increases remained “unacceptably high.”

Policymakers have been hoping for more than a year that price increases will begin to cool, only to have those expectations repeatedly dashed. Supply chain issues have made goods more expensive, Russia’s invasion of Ukraine sent commodity prices soaring, a shortage of workers pushed wages and service prices higher and a dearth of housing has fueled rising rents.

Article source: https://www.nytimes.com/2022/08/10/business/economy/july-inflation-biden-fed.html

“We will bring these jobs back to our shores and end our dependence on foreign chips,” said Senator Chuck Schumer, Democrat of New York and the majority leader, who pumped his fists as he stepped toward the lectern.

Mr. Schumer, who helped spearhead the measure, at one point hinted at the yearslong quest to secure its passage when he noted that it had once been called the Endless Frontier Act — one of a handful of names for the bill as it made its way through Congress.

“I still love that name,” Mr. Schumer said.

“I’ve always said that Democrats would be ready to work with Republicans when possible,” he added. “And at today’s signing, we celebrate such an accomplishment.”

Democrats are hoping that the passage of the industrial policy legislation and a few other notable bills, along with falling gas prices, can help drive a turnaround for the party ahead of the midterm congressional elections in November. Democrats have faced a bleak outlook heading into the fall, with Mr. Biden suffering from dismal approval numbers amid soaring inflation and painful prices at the pump.

Mr. Biden is planning to sign a bill on Wednesday that would expand medical care for veterans exposed to toxic burn pits on military bases, another measure that Congress approved with bipartisan support. And on Friday, the House is expected to pass the climate, health and tax bill that cleared the Senate over the weekend, handing the president a legislative triumph that he and Democratic candidates can highlight in the weeks to come.

The effort to promote the recent series of victories comes after Mr. Biden was forced to isolate during a bout with Covid-19, followed by a rebound case. He left isolation on Sunday and then traveled on Monday to meet with survivors of the severe flooding in Kentucky, his first work trip since testing positive for the virus on July 21.

Article source: https://www.nytimes.com/2022/08/09/us/politics/biden-semiconductor-chips-china.html

The lease lasts only a year, however, and Ms. Clarke is worried about finding somewhere to live if it isn’t renewed. Even now, she is barely making ends meet: She lost her car keys recently and had to spend nearly $500 replacing them, wiping out nearly all her small rainy-day fund and leaving her one crisis away from financial disaster.

“When you don’t have money, you’re on a fixed income, you’re constantly thinking, ‘Well, maybe I shouldn’t have bought that,’” she said. “There’s no cushion. There really never was.”

More financially secure families also face headwinds, of course, which could eventually prompt them to slow down spending. The cash savings they built up during the pandemic won’t last forever, and rising prices could prompt many households to pull back their spending.

And swooning stock markets could prompt richer families, who tend to have more money invested, to spend less than they otherwise would. Some economists think that the people in this demographic have mostly kept spending recently — despite their falling economic confidence — because they are eager to take vacations that they had put off earlier in the pandemic.

“Where I’m budgeting, it’s to make room for travel,” said Mr. Trevino of Los Angeles. “I feel like I’ve missed out on that a little bit.”

Economists have speculated that richer consumers’ resilience could fade as autumn approaches and they take stock of their finances amid a slowing economy. But for now, the reality that America’s wealthier consumers have yet to sharply pull back in the face of rising prices may be setting up a tough road ahead for the nation’s poorer ones.

“We really, in a way, haven’t noticed the inflation very much,” Mr. Schoenfeld said. “This economy is very unfair.”

Jason Karaian contributed reporting.

Article source: https://www.nytimes.com/2022/08/08/business/economy/inflation-jobs-economy.html

“It will make it harder to hire more workers, raise wages and invest in our communities,” said Chad Moutray, the chief economist of the manufacturing association. “Arizona’s manufacturing voters are clearly saying that this tax will hurt our economy.”

Ms. Sinema has expressed opposition to increasing tax rates and had reservations about a proposal to scale back the special tax treatment that hedge fund managers and private equity executives receive for “carried interest.” Democrats scrapped the proposal at her urging.

When an earlier version of a corporate minimum tax was proposed last October, Ms. Sinema issued an approving statement.

“This proposal represents a common sense step toward ensuring that highly profitable corporations — which sometimes can avoid the current corporate tax rate — pay a reasonable minimum corporate tax on their profits, just as everyday Arizonans and Arizona small businesses do,” she said. In announcing that she would back an amended version of the climate and tax bill on Thursday, Ms. Sinema noted that it would “protect advanced manufacturing.”

That won plaudits from business groups on Friday.

“Taxing capital expenditures — investments in new buildings, factories, equipment, etc. — is one of the most economically destructive ways you can raise taxes,” Neil Bradley, chief policy officer of the U.S. Chamber of Commerce, said in a statement. He added, “While we look forward to reviewing the new proposed bill, Senator Sinema deserves credit for recognizing this and fighting for changes.”

Emily Cochrane contributed reporting.

Article source: https://www.nytimes.com/2022/08/06/us/politics/corporate-minimum-tax.html

Indeed, the Federal Reserve is trying to cut it off. Jerome H. Powell, the Fed chair, has described the labor market, with twice as many open jobs as unemployed workers, as “unsustainably hot,” and is trying to cool it through aggressive interest rate increases. He and his colleagues have argued repeatedly that a more normal economy — less like a boomtown, with lower inflation — will be better for workers in the long term.

“We all want to get back to the kind of labor market we had before the pandemic, where differences between racial and gender differences and that kind of thing were at historic minimums, where participation was high, where inflation was low,” Mr. Powell said last month. “We want to get back to that. But that’s not happening. That’s not going to happen without restoring price stability.”

Mr. Biden and his advisers, too, have argued that a cooling economy is inevitable and even necessary as the country resets from its reopening-fueled surge. In an opinion article in The Wall Street Journal in May, Mr. Biden warned that monthly job growth was likely to slow, to around 150,000 a month from more than 500,000, in “a sign that we are successfully moving into the next phase of the recovery.”

So far, that transition has been elusive. Forecasters had expected hiring to slow in July, to a gain of about 250,000 jobs. Instead, the figure was above 500,000, the highest in five months, the Labor Department reported on Friday. But the labor force — the number of people who are either working or actively looking for work — shrank and remains stubbornly below its prepandemic level, a sign that the supply constraints that have contributed to high inflation won’t abate quickly.

Ms. Sinclair said it shouldn’t be surprising that it was taking time to readjust after the coronavirus disrupted nearly every aspect of life and work. As of July, the U.S. economy, in the aggregate, had recovered all the jobs lost during the early weeks of the pandemic. But beneath the surface, the situation looks drastically different from what it was in February 2020. There are nearly half a million more warehouse workers today, and nearly 90,000 fewer child care workers. Millions of people are still working remotely. Others have changed careers, started businesses or stopped working.

Article source: https://www.nytimes.com/2022/08/06/business/economy/economy-jobs-inflation.html

“Carried interest has become the MacGuffin of the I.R.A. saga,” said James Lucier, an analyst at Capital Alpha Partners, a policy research firm in Washington, describing it as a literary device that authors include merely to make plots more interesting. “The MacGuffin distracted attention from the really important things going on in the story to make the startling conclusion even more surprising in the end.”

On Friday, some progressive policy experts shrugged off the elimination of the carried interest provision, which they considered only a modest improvement over current law.

“The proposal that was in the bill until last night made a technical adjustment in the holding period for assets that qualified for carried interest treatment,” said Jean Ross, a senior fellow at the Center for American Progress, a liberal research group in Washington. “A better approach would tackle the issue head-on and say that compensation for services managing an investment fund should be taxed like work and subject to ordinary tax rates.”

Ms. Ross added that she was pleased by the addition of the tax on stock buybacks, which some Democrats and their allies have long supported, arguing that companies are spending too much money buying back their own shares, rather than investing in research and development or giving workers raises.

Ms. Sinema herself has said little about why she considered it so important to preserve the carried interest tax treatment. She has said that she plans to work on legislation with Senator Mark Warner, Democrat of Virginia, to address the loophole. But if the legislation is not included in the current package, which is being fast-tracked under an arcane budget process, any reform will require support from at least 10 Republicans.

“I think we reached agreement that there are areas where there’s been abuse,” Mr. Warner said in an interview, adding, “I’m disappointed it didn’t get in this bill, but I’m looking forward to working with Senator Sinema — and others — to see if we can address this.”

In a statement on Thursday, Ms. Sinema said, “We have agreed to remove the carried interest tax provision, protect advanced manufacturing and boost our clean energy economy in the Senate’s budget reconciliation legislation.”

Emily Cochrane contributed reporting.

Article source: https://www.nytimes.com/2022/08/05/business/carried-interest-senate-bill.html

It’s an embrace of industrial policy not seen in Washington for decades. Gary Hufbauer, a nonresident senior fellow at the Peterson Institute for International Economics who has surveyed U.S. industrial policy, said the bill was the most significant investment in industrial policy that the United States had made in at least 50 years.

American politicians of both parties have long hailed the economic power of free markets and free trade while emphasizing the dangers and inefficiencies of government interference. Republicans, and some Democrats, argued that the government was a poor arbiter of winners and losers in business, and that its interference in the private market was, at best, wasteful and often destructive.

But China’s increasing dominance of key global supply chains, like those for rare earth metals, solar panels and certain pharmaceuticals, has generated new support among both Republicans and Democrats for the government to nurture strategic industries. South Korea, Japan, the European Union and other governments have outlined aggressive plans to woo semiconductor factories. And the production of many advanced semiconductors in Taiwan, which is increasingly under risk of invasion, has become for many an untenable security threat.

Semiconductors are necessary to power other key technologies, including quantum computing, the internet of things, artificial intelligence and fighter jets, as well as mundane items like cars, computers and coffee makers.

“The question really needs to move from why do we pursue an industrial strategy to how do we pursue one,” Brian Deese, the director of the National Economic Council, said in an interview. “This will allow us to really shape the rules of where the most cutting-edge innovation happens.”

Disruptions in the supply chains for essential goods during the pandemic have added to the sense of urgency to stop American manufacturing from flowing overseas. That includes semiconductors, where the U.S. share of global manufacturing fell to 12 percent in 2020 from 37 percent in 1990, according to the Semiconductor Industry Association. China’s share of manufacturing rose to 15 percent from almost nothing in the same time period.

Article source: https://www.nytimes.com/2022/08/03/business/economy/chip-industry-congress.html