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Inflation worries persist despite strong job figures

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Inflation worries persist despite strong job figures

This morning, the Labor Department will report how many employers added to their payrolls in February. Economists expect healthy gains. (For full coverage of the report, check out The Times’ special briefing, which will be updated throughout the day.)

Despite the strong job numbers, surveys show that the public thinks the US economy is headed in the wrong direction. The main culprit appears to be inflation, along with fears that rapidly rising prices will soon make people worse off – even in jobs where wages are rising.

Some concerns may be misplaced. High inflation occurs when both prices and wages are rising. Last month, the White House, based on data from a trio of top economists, reported that the average income, including what people earn at their jobs and from their investments, has outpaced inflation, with gains for the bottom half of earners. growing more and more. more than 10 percent. But people feel more of the pain of rising prices than the gains in their paychecks, which they often see less of.

Inflation becomes a problem when prices keep rising while wages are stable. This is what happened in the 1970s, and it is threatening to happen again. Inflation has been stifled by supply-chain problems during the pandemic, and now Russia’s invasion of Ukraine could prolong supply-chain issues and drive up energy costs. This persistent inflation can begin to impact economic growth, a key factor underlying wage packages and investment benefits.

  • That said, Nobel-winning economist Joseph Stiglitz announced yesterday that “we are not facing an inflationary crisis.” In a panel discussion organized by the Center for Economic and Policy Research, a liberal think tank, he argued that the economy “is unlikely to have the kind of wage-price inflation that we had in the 1970s.”

Policy makers are mobilizing. “People are unhappy with inflation,” said economist Jason Furman, a former top adviser to President Barack Obama. “And we should care about that.” President Biden said this week that fighting inflation was his “top priority” and Fed Chairman Jay Powell said he was ready to raise interest rates for the first time later this month. Fed Governor Chris Waller recently said he may support more aggressive rate hikes if inflation reports and February jobs data show the economy is still running too hot.

Some economists think the government should be more creative, trying things like paying people not to drive in order to lower the price of gas. Biden also expressed support for some price controls in his State of the Union speech this week. “It’s a political problem,” Stieglitz said. “We should try to protect people from the downside of inflation.”

Sacklers arrive at a new settlement on opioids. The billionaire family behind Purdue Pharma agreed to pay $6 billion to a group of holdout states to help them address the damage from the opioid crisis in exchange for protection from civil claims. The deal still has to be approved by a federal judge, and it won’t protect the Sacklers from criminal prosecution.

Biden administration asks Congress for $22.5 billion in aid to Covid. The money will help fund the White House’s new coronavirus response strategy. Meanwhile, the NFL became the first American pro sports league to abandon its COVID protocol.

Amazon reportedly pressured the FTC to pursue its MGM deal. As The Wall Street Journal reports, the tech giant recently certified that it had provided all information about the $6.5 billion transaction to the agency, forcing the regulator to decide within weeks. fell.

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US banks offer cash to workers in Hong Kong to cope with severe pandemic restrictions. JPMorgan Chase is giving $230 each to workers for post-lockdown meals for their families, while Goldman Sachs is offering money to entertain children stuck at home.

Rivian apologized for raising prices retroactively. The electric vehicle maker said it would honor base prices for customers who had previously ordered pickups or SUVs, after increasing prices by up to 20 percent this week. Rivian said the price hike was done to cover the rising cost of parts, but “wrongly decided” to implement the increase in existing limits.


The effects of the war in Ukraine are being felt by the retail industry, with companies worried about supply chain disruptions, inflation and declining consumer sentiment in their home markets. Western retailers have also withdrawn from Russia, halting sales in the country, suspending local operations or divestment altogether.

Here things stand:

Ikea Yesterday it said it would halt all exports and imports to Russia and Belarus and halt production and retail operations in Russia, affecting 15,000 of its workers. Retailers moved to Russia a decade after the collapse of the Soviet Union, drawn in by the country’s emerging middle class. The company will continue to operate its chain of shopping centers Mega in Russia.

TJXThe owner of TJ Maxx and Marshalls said yesterday that it would sell its stake in Familia, an off-price retailer with more than 400 stores in Russia. TJX paid $225 million for its 25 percent stake in 2019, and selling it could result in a big loss.

nike Yesterday it said it would temporarily close 116 of its stores in Russia. It had already stopped selling online to customers in the country.

earlier this week, H&M said it would temporarily halt all sales in Russia, where it had 168 stores at the end of last year. Canada Goose Said it would stop wholesale and e-commerce sales to Russia.

But some luxury retailers in Russia are staying open. Brands like Bulgari have seen wealthy Russians rush to buy high-end goods as a hedge against the depreciation of the ruble. Bulgari CEO Jean-Christophe Babin told Bloomberg, “It may have boosted the business in the short term.” “We operate in many different countries where there are periods of uncertainty and stress.”


Stacey Abrams is most famous as a champion for voting rights and a rising star in the Democratic Party. His career as a writer of nonfiction, romance novels and Supreme Court thrillers is also noted. Little is discussed of his long career in business.

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Among other ventures, Abrams co-founded a fintech company. She delves into this aspect of her background in a new book out this month called “Level Up: Rise Above the Hidden Forces Holding Your Business Back.” Co-written with his business partner, Lara Hodgson, the book recounts the lessons he has learned in business – some of which have become relevant to politics as well.

“As an entrepreneur I think about not only my role in politics – it’s part of the way I think about law,” Abrams told DealBook. Here are highlights from our interview:

What is the difference between politics and business?

Delivery is different in business. Both have customers, but in business, you can choose your customers. You get to decide what type of products you want to deliver, and you can limit the type of customer who is likely to shop with you because of the type of product you want to deliver. Politics is about delivering to a very wide cross section, who have different and diverse needs.

Your book is about small businesses. How would you measure the success or failure of a paycheck protection program?

I think it was inefficient. I think for some communities, it was ultimately completely ineffective. I know that the first round of PPP, if you were a black-owned business, your ability to secure those loans was almost negligible. And the same was true for other communities of color. Small businesses were often alienated from larger companies, which had increasingly access to banks, which were willing to allocate those dollars. We have to treat small businesses as small businesses, and we have to reevaluate what we call a small business.

Following the assassination of George Floyd, several pledges were made by small businesses, especially black-owned businesses, to do better by minorities in Corporate America and especially by banks. Do you think it was real or rhetorical?

I think it was well intentioned, but it is positioned poorly. I mean, people want to do right. And I think he meant it. One of the issues is, how do you identify who should receive these funds? Large corporations make decisions at their scale, not at the scale of small business. There are existing and structural barriers to small businesses that major corporations either don’t understand or don’t remember. And it has to be addressed if we want to make those promises come true.

Read full interview here,

deal

  • financier Chamath Palihapitiya used the borrowed money to finance most of his investments in SPAC deals for Virgin Galactic and Clover Health; He and Richard Branson also face a shareholder lawsuit over what they knew about flaws in the Virgin Galactic spaceship. (FT, Insider)

  • Life Insurance Corporation of India’s massive IPO is likely to get delayed due to the war in Ukraine. (bloomberg)

  • Sony will buy the production company behind “American Idol” and “90 Day Fiancé” for $350 million. (time limit)

Policy

  • Have the cities’ vaccines and mask mandates worked? (vapo)

  • Representative Pete Sessions, Republican of Texas, opposes Congress’s ban on stock trading — but appears to have violated existing disclosure requirements for his investments. (insider)

  • “Economic relations between nations promote peace. Or do they?” (NYT)

the best of the rest

  • Netflix is ​​replacing Bozoma St. John as its head of marketing. (Diversity)

  • Peloton co-founder John Foley has reportedly listed his newly acquired $55 million Hampton mansion in damages. (NY Post)

  • Tech employees at The Times voted to certify their union. (NYT)

  • Instead of leaving, some burnt-out workers are choosing to coast. (insider)

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