(WASHINGTON) — Consumer prices rose 7.1% in November, continuing a months-long decline from a 40-year record reached over the summer.
Economists had predicted a CPI increase of 7.2%.
Monthly inflation also fell significantly. Prices rose 0.1% in November, cooling down from a 0.4% increase in October.
The top contributor to the monthly price increase came from shelter costs, which rose 0.6% in November. Food prices also jumped over the month, rising 0.5%.
But prices fell for a host of goods, including gasoline, used cars and trucks and medical services.
The decline in inflation follows a string of aggressive rate hikes from the Federal Reserve aimed at bringing prices down to normal levels.
The inflation data arrives a day before the Fed is expected to impose another borrowing cost increase. Economists project the Fed will raise rates by 0.5% on Wednesday, a slowdown from three consecutive jumbo-sized rate hikes of 0.75% but still a significant intensification of its fight against price increases.
By raising borrowing costs, the Fed has tried to slash inflation by cooling the economy and choking off demand. The approach, however, risks tipping the U.S. into a recession and putting millions out of work.
So far, however, the labor market has proven resilient, bolstering the hopes of policymakers seeking to avert a shutdown but also raising fears of a prolonged bout of inflation driven by wage gains.
Hiring last month exceeded expectations and wages grew a blistering 5.1% compared to a year earlier, offering welcome relief for workers strained by price hikes.
But rising wages often push companies to hike prices to make up for the added costs, which can worsen inflation and make it more difficult to reverse.
Despite the robust job market, growing evidence suggests the Fed’s rate hikes have put the brakes on some economic activity.
Home sales fell for the ninth month in a row in October, the most recent month on record. Sales of existing homes, such as single-family homes and condominiums, were down about 28% from a year earlier.
Meanwhile, the personal savings rate fell to 2.3% last month, the lowest rate in nearly two decades, according to data from the Commerce Department. The failure to stash extra funds suggests that savings stockpiled during the pandemic have strained under the weight of high prices.
(NEW YORK) — United Airlines said Tuesday it planned to purchase 100 Boeing 787 Dreamliners, with options to buy an additional 100.
The airline said the order for up to 200 aircraft amounted to the “the largest widebody order by a U.S. carrier in commercial aviation history.”
United CEO Scott Kirby said in a statement that the airline had exited the COVID-19 pandemic as “the world’s leading global airline.”
“This order further solidifies our lead and creates new opportunities for our customers, employees and shareholders by accelerating our plan to connect more people to more places around the globe and deliver the best experience in the sky,” he said.
The order for 787 aircraft comes a few months after the Federal Aviation Administration’s August announcement that Boeing could resume Dreamliner deliveries. Boeing had been forced to halt 787 deliveries in May 2021 after manufacturing quality issues and structural issues were discovered. The FAA first raised 787 concerns in September 2020, when the agency said it was investigating manufacturing flaws.
Boeing shares rose about 2% in pre-market trading on Tuesday, with United shares trading down by about 1%.
The airline also said it had exercised an option to purchase 44 Boeing 737 MAX aircraft for delivery before 2026, along with 56 more MAX aircraft for delivery before 2028.
United said it now plans to take delivery of a total of about 700 new narrow and widebody planes by the end of 2032, “including an average of more than two every week in 2023 and more than three every week in 2024.”
The 100 widebody aircraft announced on Tuesday are expected to be delivered between 2024 and 2032, according to the airline. The planes will replace United’s fleet of 767 planes and many of its 777 aircraft. United has said it plans to retire all of its 767 aircraft by 2030.
Retiring the ageing planes will give United an environmentally friendly boost, the airline said, with per-seat carbon emissions expected to drop by about 25%.
Gerry Laderman, United’s EVP and CFO, said, “This order solves for our current widebody replacement needs in a more fuel-efficient and cost-efficient way, while also giving our customers a best-in-class experience.”
United said in October that it expected its fourth-quarter adjusted margin to top the same 2019 quarter for the first time since the pandemic began.
“Earnings recovery out of the pandemic has kept pace with, if not led, peers and messaging has been very confident,” analysts at Morgan Stanley said in a note to clients ahead of the announcement on Tuesday morning.
The number of travelers passing through U.S. airports has almost returned to pre-pandemic levels, according to daily checkpoint data from the Transportation Security Administration.
(NEW YORK) — Elon Musk elicited backlash from liberal leaders and cheers from some conservative ones in response to a viral tweet on Sunday that called for Anthony Fauci, the nation’s top expert on infectious disease, to be prosecuted.
The polarizing tweet, which garnered more than a million “likes,” arrived about six weeks after Musk told advertisers that he sought to make Twitter “a common digital town square, where a wide range of beliefs can be debated in a healthy manner.”
Musk, a longtime critic of COVID-19 lockdowns, who has voiced a series of conservative opinions since acquiring Twitter in October, tweeted: “My pronouns are Prosecute/Fauci.”
The message to Musk’s 120 million followers appeared to attack Fauci while mocking members of the LGBTQ community and allies who sometimes state their pronouns to communicate their gender identity.
Fauci, the chief medical advisor to President Joe Biden, is the director of the National Institute of Allergy and Infectious Diseases. He will step down from his current roles later this month.
Many liberal lawmakers and commentators condemned Musk’s tweet, defending Fauci and expressing support for LGBTQ people.
“I’m a big fan of Dr. Fauci and how he’s calmly guided our country through crisis,” Sen. Amy Klobuchar, D-Minn., said. “Courting vaccine deniers doesn’t seem like a smart business strategy, but the issue is this: could you just leave a good man alone in your seemingly endless quest for attention?”
Astronaut Scott Kelly, the twin brother of Sen. Mark Kelly, D-Ariz, tweeted to his 5.3 million followers: “Elon, please don’t mock and promote hate toward already marginalized and at-risk-of-violence members of the #LGBTQ+ community.”
“Furthermore, Dr Fauci is a dedicated public servant whose sole motivation was saving lives,” Kelly added.
Some far-right conservative leaders, by contrast, praised the message from Musk.
Rep. Marjorie Taylor Green, R-Ga., whom Musk reinstated on Twitter after a previous permanent ban over the spread of COVID-19 misinformation, applauded the attack on Fauci.
“I affirm your pronouns Elon,” Greene said.
Robert F. Kennedy Jr., a prominent anti-vaccine activist, celebrated Musk for “looking beyond the propaganda.”
The tweet targeting Fauci came hours after Musk shared a meme that mocked Fauci over his handling of the COVID-19 pandemic. The comments from Musk are the latest in a series of conservative Twitter posts, including an endorsement last month for Republican candidates in the midterm elections.
Since he acquired Twitter in October, Musk has made some changes long sought by conservatives. He reinstated some formerly suspended accounts such as those belonging to Republican leaders like former President Donald Trump and Greene, and he stopped enforcement of a policy prohibiting the spread of COVID-19 misinformation.
Musk also revamped Twitter’s subscription service, Twitter Blue, allowing users to access verification if they pay a monthly fee of $8. The service was suspended after it gave rise to a flood of fake accounts impersonating public figures and brands but has since been reinstated.
A slew of major companies, including General Motors and Pfizer, have announced a pause of advertising on Twitter. Some of the companies have said they need time to evaluate their advertising presence on Twitter as the company pursues a new direction.
Musk, who said he overpaid for the platform at the purchasing price of $44 billion, faces pressure to boost the company’s revenue. Last month, he said that the company is losing $4 million each day.
On the same day as the tweet targeting Fauci, Musk endured an extended chorus of loud boos after being brought on stage at a comedy performance by Dave Chappelle at the Chase Arena in San Francisco.
A video posted on Twitter shows crowd members booing Musk while he stands on stage alongside Chappelle.
“Ladies and gentlemen, make some noise for the richest man in the world,” Chappelle told the audience.
After the boos, Musk told Chappelle: “You weren’t expecting this, were you?”
(HAMPTON, Va.) — Incoming freshmen at Virginia’s Hampton University will be the recipients of a large-scale school donation through the digital investing platform Stackwell Capital aimed at decreasing what research has shown is a yawning racial wealth gap.
According to Federal Reserve data, white households hold on average eight times more wealth than Black households, with that figure more than doubling for millennials and members of Gen Z.
Stackwell Capital — with that discrepancy in mind, its leaders and the university says — will be helping to provide each of the roughly 860 students in the class of 2026 at Hampton, a historically Black university, with a funded investment account coupled with a free financial literacy course available for all students and their families.
The first-year students will be able to start signing up for their accounts on Dec. 19 and, once they sign up using their Hampton accounts, at least $25 seeded with funds from a donation from the school will be loaded on within a few days.
“The biggest contributing factor to a person’s ability to build wealth is in fact time,” Stackwell’s co-founder and CEO Trevor Rozier-Byrd told ABC News. “That’s why we’re starting with freshmen in college because if they start now, the impacts for them, their families and generations to come will be massive.”
Rozier-Byrd, an asset management professional, said he believes the racial wealth gap is the greatest modern social justice issue. He said he is bringing his years of experience in financial markets to communities that have historically had the most acute racial income gaps.
Therefore, he said, some of Stackwell’s latest initiatives include providing investment education to Black communities across the Washington metropolitan region — where white households hold 81 times more wealth than Black households, according to the DC Fiscal Policy Institute — in part by teaming with professional basketball organizations like the Washington Wizards.
Last month, Stackwell also partnered with billionaire Robert Smith’s Student Freedom Initiative and Prudential Financial on a national investment program for historically Black colleges and universities (HBCUs) and minority-serving institutions.
“Developing relationships with HBCUs is important for us,” Rozier-Byrd said, as is “promoting the sense of confidence and empowerment to believe that this is something that they [HBCU students] can do and something that they can be successful with the right tools and support around them.”
Hampton freshman Joshua Elias Hoover, 18, said he started investing when he was 13. Hoover told ABC News he was excited for the Stackwell program because he and his peers won’t have to stress quite as much over budgetary concerns.
“I’m so happy we’re doing it because a lot of students need this,” said Hoover, a journalism major and minister in training from Louisiana. “It’s going to save us a lot of worry when we want to get some DoorDash or something like that and we’re scared because we’re trying to spend our own money that we’ve built over time. But with this set in stone, we have money we can actually budget and think thoroughly and analyze the importance of saving,” he added.
Hampton University President Darrell K. Williams is an alum and former “Mister Freshman.” He said he regrets not investing when he was his students’ ages but calls Monday’s announcement a chance for the Hampton Pirates to “get ahead of the game.”
“Start now,” he told ABC News. “The earlier you start, the smaller amounts of money you need to invest to achieve phenomenal results over time — don’t wait like I did, until two or three years after I graduated from college.”
Rozier-Byrd learned from his experiences too, and is paying it forward.
“Part of the way that I was able to pay back my [law school] student loans was by investing in the market,” he said. “There are a myriad of ways in which they [students] can address the financial challenges of college affordability and their ability to go to school, get a great education and pursue the careers that are aligned with their interests and their dreams.”
Williams lauded Stackwell’s involvement, saying it is elevating the student experience at Hampton — an HBCU widely considered among the “Black Ivy League” — not only for the investment accounts but also for the financial wellness of alums and their families.
“What we really hope is that one day, through this financial literacy program, some of our graduates will go out and become among the wealthiest people in America,” Williams said. “They will sow those financial seeds and the other legacy seeds back into the students who will be at Hampton 20 years from now. So this is not just about today. We understand how this will transform Hampton University, the communities that all of these students will go back to and eventually the world.”
A free, 10-hour virtual financial literacy course from the Society for Financial Education and Professional Development is already available at Hampton that the university is placing “phenomenal emphasis” on, Williams said.
Rozier-Byrd said Stackwell adds to that instruction.
“We believe that this can be a powerful tool to helping people meet their long-term financial goals and objectives, and we want to make sure that we’re continuing to invest in the future advancement of students on Hampton’s campus,” he said.
(LOS ANGELES) — Like many industries, graduate student workers at colleges and universities around the country are demanding better pay and living conditions from their employers as inflation and high costs, especially rent, drive them to the breaking point.
Graduate student workers throughout the industry are saying their pay is unlivable, failing to meet or catch up with inflation and soaring costs.
Leading into the pandemic, workers in academia, including graduate students and student researchers, felt their pay and benefits from colleges and universities did not match the cost of living, Rachael Kuintzle, a PhD candidate at CalTech University and co-founder of the Graduate Student Action Network, told ABC News.
This is an issue that was exacerbated by skyrocketing inflation and housing costs that have taken a “quantum leap,” Nelson Lichtenstein, the director of the Center for the Study of Work, Labor and Democracy at the University of California, Santa Barbara, told ABC News.
The most common salary for student workers at the University of California is $24,000 per year, according to Neal Sweeny. Sweeny is the president of UAW 5810, a union representing over 11,000 Postdoctoral Scholars and Academic Researchers at the University of California and Lawrence Berkeley National Laboratory.
Sweeny said pay was a crisis even before inflation hit. The majority of student workers pay more than 30% of their salary toward rent. He said universities are not addressing this mismatch between pay and costs with enough urgency.
Graduate student workers, especially those living in metropolitan cities, are heavily impacted by inflation, with rents even outpacing inflation, Kuintzle said.
There is also less assurance that graduate students will be able to find tenure-track faculty positions or research positions upon completion of their degree. Pay is not as good as it used to be and there are not that many jobs available, Kuintzle said.
This is also echoed from labor experts who work in academia.
With institutions tight on money, jobs for graduate students have diminished, there are less positions available and universities have been reducing the number of regular tenure-track faculty, Lichtenstein said.
A few years ago, Lichtenstein’s department recognized that there was a big problem with getting jobs for graduate students decided they would cut back on the number of graduate students they admit.
“Well, the Dean came in and said, ‘You can’t do that we need the grad students to staff these big courses.’ Even though the chances of getting good jobs had diminished, nevertheless, we had to keep recruiting grad students, and then they came in to teach these classes,” Lichtenstein said.
Another labor expert agreed that graduate students’ incomes are not a livable wage, facing debt and a world worse off than their parents’. This is what is pushing so many workers toward unions, Kate Bronfenbrenner, a professor at the Cornell University School of Industrial and Labor Relations, told ABC News.
Organizing in higher education is new and universities are not used to bargaining with graduate students and they are not adapting to students’ costs of living, Bronfenbrenner said.
Withth Graduate students and student workers doing the majority of teaching and research at universities, but their pay is not reflecting that Bronfenbrenner said.
Bronfenbrenner also said universities are reacting to labor organizing that way any traditional private sector anti-union corporation does, by “playing hardball.”
The conditions are leaving many wondering why they put up with these working conditions.
“Folks are asking the question ‘why should we tolerate this, not only the wages but the treatment that we endure, the work-life-balance and the abuse that many students endure to get their PhDs. It’s not worth it anymore,” Kuintzle said.
Social media has played a role in the recent surge in worker organization, even evident in unionization of Starbucks workers, experts told ABC News.
Young people are very good at organizing online and employers can no longer keep their wages a secret. Workers across industries are sharing sessions form their successes at other schools more easily using social media, Bronfenbrenner said.
Kuintzle founded the Graduate Student Action Network, a group of graduate students and workers at colleges and universities around the country that was formed in the fallout of Roe v. Wade being overturned by the U.S. Supreme Court in June that ended federal protections for abortion rights in the U.S.
Since then, the group has grown to include graduate students from over 60 universities across 34 states and it has become a forum where they discuss common issues, labor organizing and compare what pay and benefits their universities provide. The transfer of information has allowed students able to make changes at their schools give advice to others, according to Kuintzle.
There is also a surge in graduate student and academic workers organizing, with students willing to take more risks, Kuintzle said.
Kuintzle said graduate students at several schools are working to unionize or recently voted to unionize.
Lichtenstein said one solution could be for universities to get more funding from the government, something he sees as doable in the U.S.
This is also an issue that is disproportionately impacting workers from low-income backgrounds or those who do not have a spouse or family members supporting them financially.
Bronfenbrenner warned that the cost of universities not adequately responding will be the quality of education at universities going down. This will also hit women, working class and low income workers the most.
Kuintzle warned that this could be an even bigger issue moving forward if universities and colleges are unable to meet the needs and demands of their workers. Many are even leaving academia all together to work in their industries.
“There are Caltech students who are actively seeking to transfer schools because, among our peer institutions, Caltech has the lowest stipend by far. And I know that is definitely going to start playing a larger role in what programs students are accepting offers at,” Kuintzle said.
(WASHINGTON) — Former FTX CEO Sam Bankman-Fried will appear before Congress to testify on the collapse of the giant, $32-billion cryptocurrency exchange.
The House Financial Services Committee said Bankman-Fried will testify on Tuesday, Dec. 13 in a hearing titled “Investigating the Collapse of FTX, Part 1.”
John Ray, FTX’s new CEO guiding the company through bankruptcy proceedings, will also testify.
Bankman-Fried, in a series of tweets, said he’s “willing to testify” after initially resisting the committee’s request.
“I still do not have access to much of my data — professional or personal. So there is a limit to what I will be able to say, and I won’t be as helpful as I’d like,” Bankman-Fried wrote. “But as the committee still thinks it would be useful, I am willing to testify on the 13th.”
Bankman-Fried said he will try to “shed light” on issues surrounding FTX’s U.S. solvency, what he thinks led to the crash and his “own failings.”
“I had thought of myself as a model CEO, who wouldn’t become lazy or disconnected,” Bankman-Fried tweeted. “Which made it that much more destructive when I did. I’m sorry. Hopefully people can learn from the difference between who I was and who I could have been.”
Committee chairwoman Maxine Waters, D-Calif., amid Bankman-Fried’s initial resistance to appear before the committee, tweeted to him: “As you know, the collapse of FTX has harmed over one million people. Your testimony would not only be meaningful to Members of Congress, but is also critical to the American people.”
Lawmakers from both sides of the aisle have said they want to hear from Bankman-Fried after the downfall of his two companies — FTX and the hedge fund Alameda Research — and the mismanagement of customer funds.
Rep. Patrick McHenry, R-N.C., who will chair the committee in the next Congress, said it’s “essential that we hold bad actors accountable so responsible players can harness technology to build a more inclusive financial system.”
Democrat Sherrod Brown, the chair of the Senate Banking Committee, has requested that Bankman-Fried appear on Dec. 14 to address “significant unanswered questions” about how clients were treated during the companies’ collapse.
It’s unclear if Bankman-Fried will appear before the committee. Brown, in cooperation with Republican ranking member Sen. Pat Toomey, said they will issue a subpoena to compel him to appear on Dec. 14 if he didn’t voluntarily participate.
Brown told Bankman-Fried, “you must answer for the failure of both entities that was caused, at least in part, by the clear misuse of client funds and wiped out billions of dollars owed to over a million creditors.”
Democratic Sens. Elizabeth Warren and Sheldon Whitehouse have called for a criminal investigation from the Department of Justice into Bankman-Fried over “the disturbing allegations of fraud and illicit behavior.”
Bankman-Fried, in an interview with ABC News’ George Stephanopoulos, denied that he knew “that there was any improper use of customer funds.”
“I should have been on top of this, and I feel really, really bad and regretful that I wasn’t. A lot of people got hurt. And that’s on me,” he said.
-ABC News’ Allison Pecorin and Lauren Peller contributed to this report.
(NEW YORK) — The trustee for the liquidation of Bernie Madoff’s defunct and fraudulent investment firm announced on Friday a new distribution of recovered funds to swindled customers.
This is the 14th distribution to victims of Madoff’s Ponzi scheme and brings the total amount restored to more than $14 billion.
The trustee has been pursuing stolen customer funds since Madoff pleaded guilty in 2009 and signaled there would be additional recoveries in 2023.
“We are proud to continue our quest to recover additional funds and return them to defrauded claimants,” the trustee, Irving Picard, said in a statement.
When combined with the prior distributions, the fourteenth distribution will equal about 70% of each customer’s allowed claim amount, unless that claim has been fully satisfied. The aggregate amount distributed to eligible customers will total more than $14.36 billion. This recovery far exceeds any prior restitution effort related to Ponzi schemes both in terms of dollars and percentage of stolen funds recovered.
Madoff died of natural causes in April 2021 while being housed at the Federal Medical Center in Butner, North Carolina. He was 82.
(NEW YORK) — The economy has set off emergency sirens this year over growing recession fears, sky-high inflation and a battered stock market. But one area has allayed worries: jobs.
Hiring last month exceeded expectations and defied warnings of a downturn. Moreover, in November, wages grew a blistering 5.1% compared to a year earlier, offering welcome relief for workers strained by price hikes.
But the hiring boom could help send the economy into a prolonged downturn, turning the good jobs news into a grim omen, economists told ABC News.
“It’s confusing for people and rightfully so,” Betsey Stevenson, a professor of public policy and economics at the University of Michigan, told ABC News. “How can a lot of jobs be bad for the economy?”
A tight job market fuels rising wages, which often push companies to raise prices to make up for the added costs. In turn, inflation worsens and recession risks rise, they added.
In addition, rising wages have offered less to workers than they appear to have at first glance, since income gains have trailed the pace of inflation, effectively slapping workers with a pay cut, the economists said.
Here’s what you need to know about how the hiring spree could deepen inflation and help trigger a recession, while leaving some workers worse off:
An inflation crisis puts pressure on the jobs market
Robust job growth could deepen inflation, but it isn’t the primary cause of the current bout of high prices, economists said. Like so many economic problems, inflation comes down to an imbalance between supply and demand.
When billions of people across the globe faced lockdowns, they shifted consumption to goods like Peloton bikes and couches, in some cases bolstered by wallets fattened with government stimulus. Meanwhile, a pandemic-era supply chain bottleneck dramatically slowed the delivery of the goods people wanted. In turn, demand far outpaced supply, sending prices skyward.
This year, price hikes reached a 40-year high, triggering an aggressive series of interest rate hikes from the Federal Reserve meant to slash demand, slow the economy and curb costs. Price increases for some goods have cooled but remain highly elevated.
“I don’t think anybody out there would tell you the main reason we have inflation today is businesses trying to chase too few workers,” said Stevenson, of the University of Michigan.
But, she said, that could present a problem soon.
Fear of a wage-price spiral
Alongside the dearth of goods, a shortage of workers emerged. A speedy recovery from the pandemic-induced recession caused a hiring blitz, but employers struggled to find workers, some of whom feared COVID exposure or sought early retirement.
The lack of workers has driven wages upward.
“If there are a lot of jobs and people are taking those jobs and the economy is growing, that’s not bad. What’s bad is if employers want to hire people and can’t find people,” Stevenson said. “We could start to see a lot of inflation generated by businesses trying to chase too few workers.”
To be sure, some economists argue that a dearth of people seeking work owes to a lack of quality jobs that could lure potential workers off the sidelines, while others point out that record profits at some corporations suggest price increases owe in part to business opportunism, alongside supply-demand imbalance or wage pressure.
Still, it’s no coincidence that the breakneck pace of wage growth last month coincided with a drop in the number of people working or seeking work. If workers are in ample supply, it gives the labor market some slack and limits wage growth. However, workforce participation came in at 62.1% last month, markedly lower than the pre-pandemic level of 63.4%.
“The underlying issue is that the labor force has shrunk,” Beth Ann Bovino, chief U.S. economist at S&P Global, told ABC News. “I’m fearful that the wage gains put upward pressure on prices elsewhere.”
When facing high inflation, policymakers ultimately fear what’s referred to as a price-wage spiral, in which a rise in prices prompts workers to demand raises that help them afford goods, which in turn pushes up prices, leading to a self-perpetuating cycle of runaway inflation.
“Inflation is like a cancer where if you don’t derail it, it can become a fatal problem,” Diane Swonk, the chief economist at KPMG, told ABC News.
Interest rate hikes could plunge the economy into a recession
Seeing a relatively small workforce and strong wage growth, the Federal Reserve will likely continue its series of rate hikes to ward off a worst-case scenario of spiraling price increases, economists said.
While preventing a prolonged bout of inflation last seen in the 1980s, the continued interest rate hikes will put further brakes on the economy and increase the likelihood of a recession, they added.
“When the Fed comes in with higher rates, it takes the punch bowl away and the party is over,” said Bovino, of S&P Global. “If the Fed has to ramp up rates even higher because of wage pressures feeding into other areas, the Fed takes the punch bowl and smashes it to the ground.”
So far, the hiring boom has withstood the Fed’s effort to slow the economy. But the job market has shown signs of wobbling, such as a string of layoffs in the tech sector that has struck stalwarts like Amazon and Facebook-parent Meta.
As the economy slows, wage growth will cool and more workers will lose their jobs, but the economy will avert a more debilitating downturn, said Swonk, of KPMG. Eventually, inflation will fall to a rate below that of wage growth, no longer eating away at workers’ income, she added.
“Unemployment will rise a bit – that’s a hard thing, no question about it,” Swonk said. “But it is better to eradicate the risk that this inflation metastasizes and we have to take a much more severe scarring, a deep and disruptive recession.”
(NEW YORK) — More than 1,000 journalists and other workers at The New York Times launched a 24-hour strike on Thursday, a protest over ongoing contract negotiations that marks the first such strike at the company in more than four decades.
“It’s never an easy decision to refuse to do work you love, but our members are willing to do what it takes to win a better newsroom for all,” the NewsGuild of New York, the union representing the workers, said on Thursday.
Workers and management have reached an impasse over the scale of pay increases, the balance between remote and in-office work and other issues, according to a letter signed by more than 1,000 employees.
A collective bargaining agreement between the workers and The Times expired last March, giving way to 20 months of negotiations, the letter said. Those negotiations spanned more than 120 hours across 40 bargaining sessions but the two sides still disagree on a host of concerns.
“The Times company is profitable,” the letter said. “It is time the unionized workers who made so much of this possible be properly compensated for their efforts.”
New York Times spokesperson Danielle Rhoades Ha expressed disappointment over the work stoppage, saying the two sides have taken steps toward an agreement.
“It is disappointing that they are taking such an extreme action when we are not at an impasse,” Rhoades Ha told ABC News.
“Though we’ve made progress and offered several new proposals this week to address issues identified as priorities by the Guild, we still have much more work to do when we return to the bargaining table,” Rhoades Ha added.
It was unclear whether the work stoppage would disrupt operations at the news outlet. The Times could publish some previously written work and workers outside of the union would be called upon to make up for the absence of colleagues, Dana Goldstein, a domestic correspondent at the national desk who participated in the work stoppage, told ABC News.
“This is a show of strength to show that we are ready to take these steps and do believe our incredible work over what’s been some of the hardest times of our lives during the pandemic should be rewarded,” she said.
Negotiations have stalled primarily over the scale of annual pay increases, Goldstein said.
The company has offered 2.75% in average annual guaranteed base-pay raises, according to the letter from Times employees.
That offer falls short of what workers need as they weather sky-high inflation and rising housing costs in New York City, where many employees live, said Goldstein, who has worked at The Times for six years.
“We’re not asking for raises to keep up with inflation,” she said. “We’re asking for more than what’s been offered.”
Despite the impasse on pay increases, the company has improved its offer on some benefits, Goldstein said.
The company, which had sought to replace a pension plan with a 401(k), is now offering employees a choice between the two, she said. The company also agreed to improve fertility benefits, she added.
Prominent supporters of Times workers, including actor Mark Ruffalo and Rep. Jamaal Bowman, D-NY, called on people to forego visiting The Times website and using Times products in an act of solidarity with the workers.
“Support the New York Times workers in solidarity and steer clear of the NY Times during their strike,” Ruffalo said. “Even Wordle.”
(NEW YORK) — Recession fears have mounted in recent weeks, as inflation continues to strain household budgets and the Federal Reserve appears set to raise interest rates and further slow the economy.
As if blissfully unaware, however, the job market has thrived. Hiring last month exceeded expectations and defied warnings of a downturn.
But the good jobs news could ultimately imperil the economy. Wages last month grew a blistering 5.1% compared to a year earlier, offering welcome relief for workers but also sobering news for Fed officials fearful of runaway inflation driven by income gains.
In turn, a lesser known data point has drawn outsized attention: the share of the adult population not working or actively looking for work. If workers are in ample supply, it gives the labor market some slack and limits wage growth. However, workforce participation came in at 62.1% last month, markedly lower than the pre-pandemic level of 63.4%.
The scant supply of workers keeps the labor market taut and helps fuel rising wages, which risk exacerbating inflation and pushing the economy into a recession, economists told ABC News.
Americans “should be worried about it,” Stephanie Roth, a senior market economist at J.P. Morgan Private Bank, told ABC News. The firm predicts a recession as the most likely outcome for the economy, she said, adding that “a continued tight labor market and high wage inflation would be a key reason.”
The alarm raises a key question at the heart of the economy: How can millions of missing workers stay on the sidelines while affording to pay their bills?
Here’s how unemployed people have kept up their lives and why it matters:
Retirement rates increased
The top explanation for why so many people have stayed out of the workforce centers on people who retired during the pandemic, economists said.
Over the past three months, there were 3.6 million more Americans who had left the labor force and said they didn’t want a job, compared with the same period in 2019, Aaron Sojourner, an economist at the Upjohn Institute, told ABC News. Among those 3.6 million people, individuals aged 55 and above made up about 90%, he added.
A stock market tear during the pandemic ballooned the assets of some older Americans, allowing them to subsist without income. Meanwhile, the heightened risk of severe illness faced by older Americans amid the COVID outbreak left them fearful of exposure at the workplace, Sojourner said.
“They had their finances in a position that enabled them to make the choice to stay out,” he said.
A stock market downturn this year has buffeted that financial stronghold for retirees, however, said Roth, of J.P. Morgan. Still, the reluctance of many older Americans to reenter the workforce owes to the endurance of their pandemic-era savings and the difficulty in reverting back to a bygone lifestyle.
“Now they’ve settled into their lives in retirement and they’re less inclined to come back into the labor force,” Roth said.
Savings strengthened
Another financial lifeline for unemployed Americans is the stockpile of savings that many built during the pandemic, economists said.
The COVID era strengthened household savings as government stimulus and high-flying asset prices combined with a lockdown lifestyle that did away with expenses like travel and eating out.
U.S. households amassed about $2.3 trillion in savings in 2020 and 2021, a Federal Reserve study showed last month. Moreover, households in the lower half of income distribution were still holding a combined $350 billion in excess savings as of the middle of this year, the study found.
Those savings afforded workers the flexibility to make major changes like quitting their jobs and cutting expenses to afford the lost income, Jesse Wheeler, an economic analyst with the research firm Morning Consult, told ABC News.
“The lifestyle choices that people made during the pandemic to move to a different place, work a little less and enjoy time with family – those sorts of choices are sticky,” Wheeler said.
Recently, however, savings for many have dwindled, Wheeler said.
Last month, the personal savings rate fell to 2.3%, the lowest rate in nearly two decades, according to data from the Commerce Department.
With persistent inflation hovering near a 40-year high, shoppers have drawn on savings to preserve a steady level of consumption while weathering elevated prices, he added.
“Clearly, it’s not going to be sustainable over the long term,” Wheeler said. “People eventually need to pull back on spending or reenter the labor force to increase their earnings.”
Informal work and self-employment
Data reporting a shrunken workforce likely overlooks some Americans who’ve continued to work, especially at self-run businesses or informal jobs, economists said.
During the pandemic, new business applications soared and they have remained above pre-pandemic levels, Census Bureau data showed. The Bureau reported nearly 433,000 new business applications in October, a marked increase from 313,000 in December 2019. In July 2020, new business applications reached as high as 552,000.
The government survey that calculates monthly U.S. hiring may leave out some self-employed people, said Roth.
Some people working gig jobs describe themselves as employed while others don’t, said Wheeler, of Morning Consult.
Typically, people who work formal gig jobs in delivery or ridehail service describe themselves as employed in response to queries. However, people who rely on jobs like babysitting, house sitting or dog walking often do not call themselves employed, Wheeler said.
The increase in gig work across the economy likely accounts for some of those missing from the workforce, said Sojourner.
“There are slightly more people who see informal work as an option for how to sell some of their time and skills,” he said.
Relying on a spouse or other family for support
The savings boom and rise of remote work during the pandemic led some married households to drop from two incomes to one, and pushed some workers to move in with family members, allowing previously employed people to subsist on support from loved ones, economists said.
While this shift likely accounts for a small portion of those outside of the labor force and data remains limited, the phenomenon highlights a lifestyle change enjoyed by some who have prioritized childcare or other activities above work, they said.
“People have changed up their lifestyles, maybe moved to the suburbs or consolidated households, maybe switched from one income to two,” Wheeler said. “They’ve realized that they like that lifestyle better and don’t want to go back.”
For instance, the workforce participation rate for women aged 25-34 fell nearly 5 percentage points after the outset of the pandemic, according to data from the Bureau of Labor Statistics. While employment in that group has rebounded, it remains below pre-pandemic levels.
The choice to give up work for childcare made up a key obstacle for women during the pandemic. While the problem remains, it has largely eased, Roth said.
“I wouldn’t say it’s the most important driver of wage inflation today but it’s an important piece of the puzzle,” Roth said.
