(WASHINGTON) — President Joe Biden announced Monday he will nominate Federal Reserve Chairman Jerome Powell to a second four-year term amid new concerns about controlling inflation.
He also said he would nominate Dr. Lael Brainard, a longtime Federal Reserve official and former Treasury Department undersecretary, to serve as vice chair of the Board of Governors of the Federal Reserve System.
“While there’s still more to be done, we’ve made remarkable progress over the last 10 months in getting Americans back to work and getting our economy moving again. That success is a testament to the economic agenda I’ve pursued and to the decisive action that the Federal Reserve has taken under Chair Powell and Dr. Brainard to help steer us through the worst downturn in modern American history and put us on the path to recovery,” Biden said in a statement.
The announcement follows recent questions surrounding whether Biden would renominate Powell, a Republican, who was nominated to chair the Federal Reserve in 2017 by then-President Donald Trump. Powell was first nominated to the Federal Reserve Board of Governors by then-President Barack Obama in 2011 before Trump elevated him to succeed Janet Yellen, who now serves as Biden’s treasury secretary.
“Fundamentally, if we want to continue to build on the economic success of this year we need stability and independence at the Federal Reserve — and I have full confidence after their trial by fire over the last 20 months that Chair Powell and Dr. Brainard will provide the strong leadership our country needs,” he added.
Biden is expected to speak about the announcement Monday afternoon with Powell and Brainard joining him for the appearance, according to the White House.
As the president faced mounting political pressure in recent weeks to shake up the leadership by nominating Brainard to replace Powell, he talked with both Powell and Brainard about his decision on Friday, according to a source familiar with the matter.
The president regularly engaged with members and stakeholders around the decision, including with both progressives and moderate Democrats on Capitol Hill, the source said. Biden recently met with Sen. Elizabeth Warren, D-Mass., at the White House to get her input on the decision after Warren had publicly called Powell a “dangerous man” to lead the agency.
“Your record gives me grave concerns. Over and over, you have acted to make our banking system less safe, and that makes you a dangerous man to head up the Fed, and it’s why I will oppose your renomination,” Warren said in a hearing on Sept. 28.
Biden and his team had also been in regular and close consultation with Sen. Sherrod Brown, D-Ohio, who chairs the Senate Banking Committee, according to the source.
Despite Brainard winning over progressives like Warren who argue she is tougher on bank regulation and climate change, by keeping Powell in place, Biden appears to be sending a message reaffirming the central bank’s independence from politics.
“Overall, with Mr. Powell remaining Chair, communication will remain clear and transparent and policy will not veer too far off from the current dovish path,” Rubeela Farooqi, chief U.S. economist at High Frequency Economics, an economic research consultancy firm, said in a statement to ABC News.
The nomination comes at a critical moment for the central bank, which has a mandate to contain inflation and sustain job growth. Powell has tilted “dovish” on inflation in recent months, insisting the run-up in prices will abate as the pandemic recedes and the supply chain untangles.
Powell oversaw a busy time at the Federal Reserve as it pumped unprecedented stimulus into the financial system in response to the pandemic and now starts to unwind some of that stimulus. Wall Street had been betting on his re-nomination as a way to keep continuity in policy at a tumultuous time in the economy.
If both are confirmed by the Senate, the White House will still have several seats to fill on the Federal Reserve Board, including the lead banking supervisor, allowing Biden the opportunity to reshape the central bank in a more drastic way with those picks.
Economists told ABC News they expect swift confirmation in the Senate for the nominees.
“We believe that Biden paired the announcement of the more Democratic-leaning nominee Lael Brainard with the Republican-leaning Jerome Powell to allay objections from the progressive members of the Democratic party,” said Kathy Bostjancic, Oxford Economics Chief U.S. Financial Economist.
Although at least three Democrats have signaled their opposition to Powell’s nomination, at least four Republicans have voiced support — so it appears he will be confirmed but not without multiple Republicans supporting Biden’s nominee. There were nine Democrats who opposed Powell’s nomination in 2018 when he was confirmed by the Senate in an 84-13 vote.
ABC News’ Allison Pecorin contributed to this report.
(WASHINGTON) — President Joe Biden announced Monday he will nominate Federal Reserve Chair Jerome Powell to a second four-year term.
“While there’s still more to be done, we’ve made remarkable progress over the last 10 months in getting Americans back to work and getting our economy moving again. That success is a testament to the economic agenda I’ve pursued and to the decisive action that the Federal Reserve has taken under Chair Powell and Dr. Brainard (as vice-chair) to help steer us through the worst downturn in modern American history and put us on the path to recovery,” Biden said in a statement.
“Fundamentally, if we want to continue to build on the economic success of this year we need stability and independence at the Federal Reserve — and I have full confidence after their trial by fire over the last 20 months that Chair Powell and Dr. Brainard will provide the strong leadership our country needs,” he added.
This is a developing story. Please check back for updates.
(NEW YORK) — Prices on household essentials like groceries and gas are climbing at a rapid clip, causing new financial distress for Americans right as they plan their first holiday gatherings since the rollout of a COVID-19 vaccine.
After hibernating out of sight for a generation, inflation has made an insidious and unwelcome return to the U.S. economy — fueled by supply chain snags, a shortage of workers in the service industry and pandemic-era economic policies that aimed to alleviate the financial suffering wrought by the public health crisis.
When the unemployment rate hit double-digits last March, lawmakers rallied to send stimulus money to American households and businesses shuttered for months. The Federal Reserve pulled out all the stops to keep financial markets healthy, flushing them with liquidity and easing interest rates. As the economy reopens, Americans now have a pent-up demand to consume on all the things they couldn’t for the past year — and having spent most of the year at home, many have pandemic savings to do so.
Issues with the global supply chain, coupled with struggles of major companies to find staff, however, means production is unable to keep up with the surging demand. Simplistically, this ongoing supply-demand imbalance is why economists say we are seeing prices rise right now.
Navigating inflation can cause headaches for those buying gifts for or hosting loved ones this holiday season, and can inflict further pain for households with less means to absorb higher prices on essentials.
Here is a look at where consumers are feeling the price pinch as the holidays approach, and what they can do about inflation.
Where are prices rising?
In short, prices are rising across the board, but the biggest jumps are being seen in the cost of energy, gas and used cars. Moreover, online shoppers this year likely won’t see the big holiday discounts they are used to in traditional gift items such as electronics and apparel.
Consumer prices surged at their fastest rate in more than three decades, the Labor Department said last week, reporting a 6.2% jump over the last 12 months in its consumer price index. This was the largest one-year increase since November 1990 for the index, which tracks price stickers on a market basket of everyday goods and services.
Breaking the government’s data down further indicates that the overall price hikes were driven by large increases over the past year in the energy index (a 30% jump) and used cars and trucks index (a 26.4% spike). The gasoline index soared 49.6% over the past 12 months, and the energy services (electricity and gas) index ticked up 11.2%.
While it can be hard for some to wrap their heads around what this data on rising prices means, “It’s a big deal,” Matt Schulz, a personal finance expert and chief industry analyst at LendingTree, an online lending company, told ABC News.
“Most people’s financial margin for error is pretty tiny anyway, then when you factor in inflation, an already dicey situation gets to be even more so,” Schulz said. “When you’re making that budget for your holiday spending, it’s important that you don’t just take your budget from last year and move it forward.”
Americans will likely “see a lot of inflation in things that are really close to home,” Connel Fullenkamp, a professor and director of undergraduate studies at Duke University’s Department of Economics, told ABC News.
“We’ve already seen a lot of inflation at the gas pump,” he said. And as the weather chills, he predicted, “We’re definitely going to see it in the price of heating this winter.”
The inflation we’re seeing now is especially sneaky and unpredictable, Fullenkamp added, because of all the issues contributing to it this year from many different angles.
“I think people are going to be surprised occasionally by big price hikes in certain types of items, especially ones that have been affected by the supply chain issues that a lot of companies are having,” Fullenkamp said. “And those are frankly pretty hard to predict, because for some companies it’s parts that they can’t get, and for some companies, it’s just the cost of shipping, so it’s really going to be difficult to predict, but it is definitely going to cause some sticker shock among holiday shoppers.”
How will inflation impact Thanksgiving plans?
As for how inflation is expected to affect Thanksgiving celebrations, Agriculture Secretary Tom Vilsack said that Americans should expect Turkey Day staples to be up 5% in price compared to last year.
Overall, this means the cost of “large” turkeys “will only cost $1 dollar more than last year,” Vilsack said in a statement Wednesday.
This is in line with DOL’s data, which indicates the price of food at home rose 5.4% over the past 12 months — with the index for meats, poultry, fish, and eggs spiking 11.9%, the beef index soaring 20.1% and the pork index climbing 14.1%.
Consumers should keep these figures in mind as they plan their Thanksgiving menus and celebrations. And with gas prices rising at among the fastest rates, people should also factor that into their travel plans.
“If you’re planning on doing a road trip during the holiday season, gas is probably going to be a good bit more expensive than it was last year and that’s a big deal, especially if you’re traveling a good distance to get to grandma’s house,” Schulz said.
What about online deals on Black Friday or Cyber Monday?
Data compiled by Adobe Digital indicates that holiday shoppers likely won’t see the Black Friday or Cyber Monday deals they are used to in the past while shopping online for gifts this year.
“Consumers are now seeing a double hit to their pocketbooks, with everyday expenses like rent and gas rising, while the big holiday shopping season is going to get more expensive,” Vivek Pandya, the lead analyst at Adobe Digital Insights, said in a statement Thursday. “After 17 consecutive months of online inflation, we are entering a new normal in the digital economy.”
Online prices were up 1.9% year-over-year in October, according to Adobe’s Digital Price Index released Thursday. For comparison, prices in October 2019 were down 6.6% year-over-year going into the holiday season. In early November, discount levels for electronics were at 8.7%, the Adobe data indicates, well below the 13.2% discount level at the same point last year.
In categories like tools and home improvements — popular gift items — prices are up 1.2% compared to being discounted 6.8% at the same time last year. Apparel is up 9.81% year-over-year in October, compared to usually being down 1.08%. Fresh flowers and related gifts are also up 14.14%, the data shows, compared to usually being down by a fraction of a percentage point.
The Adobe Digital Price Index reveals that in all the 18 categories tracked, all but one (books) saw higher prices online this year when compared to the historical averages. Persistent supply chain challenges may be partly to blame, the Adobe researchers say, as consumers saw over 2 billion “out-of-stock” messages while online shopping in October.
All of this is important to keep in mind so Americans aren’t surprised by their credit card bills at the end of the month, experts say.
What can Americans do to protect themselves from inflation this holiday season?
As Americans look forward to celebrating the holidays with their families and friends again this year, experts say it is more crucial than ever to budget, plan and be as thoughtful as possible with purchases. While small increases in everyday items can seem manageable or ignorable, this is one of the biggest dangers of inflation that economists urge Americans to keep their eyes on.
Many Americans now are too young to remember the pain and uncertainty inflation wreaked on the economy in the 1970s, when it snowballed out of control, eating away at the value of savings before a painful correction that led to double-digit unemployment rates in the early 1980s. While policymakers are better-equipped to respond to inflation now and prices are rising under very different circumstances than before, many consumers a generation later are having trouble grasping inflation’s risks.
“I’m in my upper 40s and I don’t ever remember inflation. I was tiny during the gas shortages of the late ’70s and all that,” Schulz told ABC News. “It’s just important to understand that you’re not going to be able to necessarily predict what individual things get more expensive or by how much.”
“The best thing that you can do is just create your budget and assume a certain amount of increase, and just assume that everything that you buy is going to be a little bit more expensive,” he said. “If you end up overshooting, then that’s great, maybe you’ll end up having extra money at the end of the month.”
“But the danger in a time of inflation is when people think that it’s not going to affect them as much as it does, and they find themselves short at the end of the month more before that paycheck comes in,” Schulz added.
Now it is more important than ever to keep close track of how much money is coming in and going out of your household each month, Schulz said, and practice financial planning and building up a rainy day fund to protect as much as possible from unexpected price increases.
Duke’s Fullenkamp added that the new generation of Americans “just don’t have a good feel for how relentless and kind of sneaky inflation is.”
“I think people who haven’t experienced it don’t really have a good feel for how much it can really drive prices up if you let it go long enough,” Fullenkamp said. “That’s the thing that is most threatening to the individual budgets and spending, you take your eye off that ball for very long and then you’ll always be surprised, and in a really bad way, because prices keep going up.”
“One of the things that is most dangerous about inflation is it’s just so darn insidious,” he added. “Once it gets into the system — it does really, eventually, percolate through to everything.”
This is why planning ahead of time and sticking to a budget can help protect Americans from financial pain down the line as inflation sets in.
“Any holiday shopping season, impulse buying is what gets you in trouble,” Schulz said. “If you can take the time to make that list and check it twice, and shop around to look for the best deal that you can get on things, it’s as important this year as ever since we’ve seen prices increase.”
Schulz said it might also be worth looking into things like credit card reward offers if you know you are going to spend a lot this season, adding, “Obviously, you have to use the card wisely, and not just see it as a reason to go crazy spending.”
Fullenkamp noted that the more you can gather information ahead of time and comparison shop, the better. He also recommends keeping an eye on online subscription services that many Americans flocked to during the e-commerce boom of the pandemic, saying, “A lot of people aren’t paying a lot of attention before they buy stuff, and they’re getting shocked after the fact.”
Looking beyond consumerism this holiday season, families who are going to be hit hardest by inflation overall are those living paycheck-to-paycheck or without the extra funds to absorb even slightly higher prices on household essentials. But even for those with savings stashed away, the value of cash will start to erode as a result of inflation, so storing investments in things like high-interest savings accounts, money market mutual funds and inflation-protected bonds could help provide some protection.
Meanwhile, while the stock market historically has responded negatively to inflation — in large part due to uncertainty among investors and other macroeconomic factors — experts say it has also been a good vehicle for long-term investing for those who don’t need to touch their money for a few decades or until retirement.
Finally, as inflation lingers and drives up the prices of some items faster than others, Fullenkamp said consumers should not assume that the cheapest stores during times of low-inflation will still be offering the best prices.
“We might see a return to the to the good old days of more comparison shopping,” Fullenkamp said. “That’s really the best thing to do — is to make sure make sure you’re familiar with what the prices are going to be before you go out and buy.”
(NEW YORK) — This week marks twenty years since Microsoft unveiled the very first XBox.
On November 15, 2001, at an event that included a guest appearance from Duane “The Rock” Johnson, then-Microsoft CEO Bill Gates pulled the wraps off the black and green gaming console. Since then the device has been through four generations, each of which have added a myriad of features and garnered huge followings. But the console’s success wasn’t always a sure thing.
“They were a boring tech company,” says IGN Executive Editor Ryan McCaffrey. “Games were not something you associated Microsoft with.”
“The company took a huge risk,” says Danny Peña, Games Editorial Lead at G4TV and host of the podcast Gamertag Radio. “They were not a hundred percent sure if the concept was going to be successful or not.”
Early XBox consoles came with Ethernet ports, which supported Microsoft’s online gaming service XBox Live. Launched a year after the original XBox, the service allowed gamers to play with their friends over high-speed internet at a time when many systems still used slower, dial-up connections.
According to McCaffrey, “with broadband gaming you could just have a better quality game experience, and it really changed everything.” He adds Microsoft was ahead of its competitors when it came to offering faster connection speeds.
“They were well out in front of Sony on this. They were well out in front of Nintendo. And now it’s sort of taken as – taken for granted I’d say.”
As for the games XBox players were interested in, McCaffrey says it’s difficult to separate the success of the XBox from the popularity of its flagship Halo franchise – a series of sci-fi action titles which launched alongside the console in 2001.
“I’ve never experienced a first person shooter like this ever in my life,” says Peña, who was one of the first to play the original Halo: Combat Evolved game at a Microsoft launch event in 2001. “That was the game that put XBox on the map.”
“The original [Halo] was what we call in the games business a ‘killer app,’” says McCaffrey. “You had to have the game, and therefore you had to have the system to play the game on.”
“There’s an argument to be made – a very good argument – that we would not even be having this conversation if not for Halo. Because the original XBox might not have survived if Halo had not been this incredibly big deal,” he adds.
But the road to the XBox’s 20th anniversary has had its fair share of potholes as well. The controller for the original XBox was widely panned for being too big and uncomfortable to hold. One Twitter user joked it was so large it “had its own weather systems” and “affected tides.”
Early examples of the second generation XBox “360” were prone to hardware issues. According to a 2009 study, nearly a quarter of the consoles experienced some form of system failure – four times the rate of its contemporary competitor, Sony’s Playstation 3. Reliability problems were so pervasive that Microsoft issued a recall to address the most common failure, nicknamed the “Red Ring of Death” because it caused the ring around the console’s power button to glow red.
Over the last two decades, the company has added hardware and software features including things like XBox Live, a motion-tracking “Kinect” system, voice controls, and even a streaming service for games called “xCloud.”
According to Peña, a theme that distinguishes the XBox brand from competitors like Sony and Nintendo is a focus on making video games accessible to people with disabilities.
“Microsoft has been very supportive when it comes to accessibility,” says Peña, citing the recently released Forza Horizon 5 racing game, an XBox exclusive title, as an example.
The game can be customized with high-contrast colors or color-blind options intended for players with sight impairments, or set to run at a reduced speed, which gives players more time to react to the high-speed action.
Microsoft says it will also soon allow people with hearing impairments to play the game with on-screen interpreters for American or British Sign Language.
“They’re the one the company has been doing the most out of every other company out there right now,” says Peña. “I have family members that – they’re deaf, you know, and now they could also play the game and have that same experience that I have… I think that’s very, very important.”
At an anniversary event on Monday – which also featured a cameo from The Rock – Microsoft announced it would start allowing gamers to try out a beta version of the upcoming Halo: Infinite a few weeks early, ahead of the game’s release early next month. But not all of those gamers will be standing in line outside retailers awaiting its release, as many Halo fans in the past have done. Recent XBox consoles, like the current “Series S” and a version of the high-end “Series X,” don’t feature disk drives. Instead, Microsoft has been pushing digital game downloads and even streaming games via xCloud. Peña says that could give us a hint as to the future of the console.
“Without buying the physical version, they can just play it through their phone, through their smart TVs – I could definitely see that.”
Listen to ABC’s Mike Dobuski take a look back at 20 years of XBox:
(SAN JOSE, Calif.) — Federal prosecutors have rested their nearly 11-week case against Elizabeth Holmes, the former Theranos CEO accused of misleading investors to bankroll her one-time multibillion-dollar Silicon Valley start-up despite no evidence its blood-testing technology could perform as promised.
“The United States rests,” Prosecutor Jeff Schenk told the court Friday morning.
Holmes’ defense team is expected to call witnesses before the case goes to the jury. She was charged with 10 counts of wire fraud — one of which was dropped — and two counts of conspiracy to commit wire fraud.
The 37-year-old faces decades in prison if convicted. She has pleaded not guilty to all charges related to Theranos, which received hundreds of millions of dollars from investors by claiming its breakthrough technology could quickly diagnose a variety of diseases from a few drops of human blood.
The government called 29 witnesses to the stand, starting in early September, including former U.S. Defense Secretary James Mattis, a former Theranos board member who said he was in the dark about the technology’s shortcomings.
Prosecutors also questioned investors, including white-shoe lawyer Dan Mosley, whose long-time client Henry Kissinger was on the Theranos board and introduced him to Holmes. Mosley personally invested $6 million and put Holmes in touch with many of his wealthy clients, such as the Waltons, the family behind Walmart; the Coxes, the billionaires behind Cox Enterprises; and the DeVoses, the Amway heirs and family of former Secretary of Education Betsy DeVos.
Jurors also heard from former Theranos employees who gave insight into the company’s labs and other dealings, and patients who described receiving purportedly inaccurate Theranos test results after getting blood drawn at various Walgreens locations.
Prosecutors concluded their case with testimony from journalist Roger Parloff, who wrote a 2014 cover story on the ascending Silicon Valley CEO for Fortune Magazine.
ABC News spoke to Parloff for “The Dropout” podcast in 2019.
“I got caught up in this woman’s story,” Parloff told ABC News at the time. “I began to drink the Kool-Aid. … I think I asked the right questions. I just got the wrong answers.”
The reporter recorded around 10 hours of interviews with Holmes, excerpts of which the government played in court on Thursday.
Santa Clara Law Professor Ellen Kreitzberg, who has sat through much of the trial, said the government likely ended with Parloff because his article was seen by many of the investors, and the jury got to hear the statements Holmes made to him in her own voice.
“That can be very powerful,” Kreitzberg said.
It’s unclear whether Holmes will testify. Kreitzberg said the defense likely will think “long and hard” before offering her up as a witness.
“From a lawyer’s perspective, I just can’t imagine that they want to put her on the stand,” she told ABC News. “There are too many questions and documents that are not easily explained.”
ABC News’ Victoria Thompson and Taylor Dunn contributed to this report.
(NEW YORK) — Walmart, Target and Macy’s say they are finding ways to bring products to shelves in time for the holiday season even though supply chain issues are still impacting the economy and other companies.
All three companies boasted strong numbers and good sales in their respective third quarter earnings calls this week. The news comes at a time when some U.S. ports are still congested and warehouses are stuffed to the brim.
There are signs of progress, with imports down about 25% at the port of Los Angeles, the port’s executive director, Gene Seroka, said Tuesday. However, there are still tens of thousands of empty cargo containers that need to be moved from the port, continuing delays.
The remaining vessels in port are mostly smaller and belong to a mix of retailers both large and small, Phillip Sanfield, director of media relations for the Port of LA, told ABC News.
The Biden administration last month announced that the port would begin running 24 hours a day, but that has yet to happen. Nevertheless, big retailers are predicting a successful holiday season.
“The holiday season is here, and we’re ready,” said Walmart CEO Doug McMillon. “We continue to have momentum. Sales were strong throughout the third quarter and we’ve seen a good start to the fourth quarter.”
Walmart said that its U.S. inventory is up 11.5% ahead of the holiday season as it was able to meet customer demand. Similar sentiments were echoed by Macy’s, as the company also discussed its response to the ongoing logistics crisis.
“We don’t expect to be materially impacted by supply chain issues during the critical holiday shopping season,” Jeffrey Gennette, Macy’s CEO, said on an earnings call this week.
How are they doing it?
These retailers seem to be side-stepping supply chain woes by rerouting ships to less-used ports, hiring new workers, unloading cargo during off-hours and switching to airfreight in some cases.
“We’re adding more than 30,000 permanent positions across our supply chain network to support the growth we expect to continue delivering in the fourth quarter and beyond,” said Brian Cornell, chairman and CEO of Target. “The team continues to work around significant port delays, diverting shipments to less-congested entry points and relying on airfreight in certain cases.”
Walmart is also rerouting deliveries; the company is adding extra lead times to orders and chartering their own ships.
These companies may be outrunning supply chain issues, but experts say that’s because they can afford the extra cost.
“I think that just with all the disruption that we’ve had, we’ve realized how quickly we can pivot and come up with new solutions. Sometimes those new solutions are expensive,” said Brandon Isner, head of retail research at CBRE, an American commercial real estate services and investment firm. “It’s true that bigger, mass-market retailers, they’re using their clout with carriers and suppliers to acquire as much product as possible in advance of the holiday season.”
Can other companies manage to do the same?
Many of these solutions, according to Isner, are too expensive and not cost-effective for smaller businesses. The options for creating a new supply chain from producer to consumer becomes easier as pockets get deeper and economies of scale get larger.
“They [larger retailers] have the ability to reroute profits to make sure they get delivery where smaller institutions don’t necessarily have that type of logistics capabilities,” said Steven Ricchiuto, U.S. economist for bank-holding company Mizuho.
In one example, Ricchiuto said a large retailer may opt to transport their items differently to avoid supply chain clogs.
“Typically putting freight on airplanes is more expensive than putting it on boats,” said Ricchiuto. “But in an environment in which you are restricted on one side of the equation and prices have gone up enough, suddenly it becomes more realistic to go the more expensive route.”
Could inflation help the supply chain?
All of this comes at a time when the U.S. economy is experiencing abnormal levels of inflation — the highest in 30 years.
“I do think that these production issues are getting themselves worked out, in part because of higher prices,” said Gus Faucher, the chief economist of PNC Financial Services. “Higher prices give businesses an incentive to sell more to consumers, so not only do they have higher values for volumes, but they’re getting more for their services and goods that they sell.”
Higher prices due to inflation may seem like an unlikely savior in fixing supply chain issues, but the rising costs present challenges as well.
“The cost of their workforce is up, the costs of getting products there is up, energy costs are up,” said Isner. “Some retail executives say that, ‘Yes, they’re definitely going to pass costs onto the consumers,’ but others have said, ‘No, they’re just going to eat the costs.’ … We can probably make an educated guess that it’s the larger companies.”
For retail shoppers and American families, all of this signals a warm welcome to the holiday season, according to the Biden administration.
“In short, families have seen an increase in real disposable income, and stores and restaurants have the supplies to drive this recovery,” Brian Deese, the director of the White House’s National Economic Council, said Tuesday.
“Today’s data show that even as we work to address the real challenge that elevated inflation from supply chain bottlenecks poses from Americans’ pocketbooks and outlook, the economy is making progress,” Deese said in response to Walmart’s successful third quarter and forecast for the holiday season.
Economists say the American supply chain could look different once the country emerges from the pandemic in a growing economy. Even though prices are more stable at larger retailers, there could be a rise across the board as the economy continues to heat up.
“We’re going to be looking more and more for alternative paths and alternative distribution systems at the end of the day. We’re going to wind up with a much more complex network,” said Ricchiuto. “Does that mean we’re going to pay a higher cost? To some extent we are, and we’re going to pay them permanently.”
(NEW YORK) — The number of fliers this year will approach pre-pandemic levels, according to the Transportation Security Administration. However, experts said staffing shortages and a storm on the horizon threaten to disrupt Americans’ holiday plans.
“One of the things folks have not accounted for is that conditions have changed,” Willis Orlando, senior product operations specialist at Scott’s Cheap Flights, told ABC News. “If you’re checking in for a flight and it’s an international flight, airline agents now have to check many more layers of documentation depending on where you’re going. So those lines are going to take longer. Add to that lingering staffing shortages and you have a recipe for long lines and delays.”
Here’s what you need to know about the best and worst times to travel:
Sunday after Thanksgiving projected to be busiest travel day of year
The TSA is prepping for a busy Thanksgiving travel period — with travel volumes expected to reach 2019 pre-pandemic levels. The agency said it expects the Sunday after Thanksgiving to be the busiest travel day of the year — with an estimated 2.4 million passengers on Nov 28. It expects 2-2.1 million passengers on Nov. 23, 24, 27, and 29.
Despite a looming vaccine mandate on Monday for all TSA agents, the agency insists it’s “confident” that it has the staffing needed to manage the holiday travel crush.
But experts still recommend heading to the airport early next week.
“Don’t count on fast check-in lines,” Orlando said. “Get there two hours before a domestic flight and two and a half or three hours before an international flight. It’s better to get there early and be prepared than to get there late and be sorry.”
Hartsfield-Jackson Atlanta International Airport will be busiest US airport
Hartsfield-Jackson Atlanta International will be the busiest airport on Thanksgiving weekend, with 154,000 departing seats on Wednesday, Nov. 24, according to travel booking app Hopper.
Atlanta is followed by Dallas Fort Worth International Airport and Los Angeles International Airport as the second and third busiest airports, with 103,000 and 101,000 passengers expected respectively.
All three airports are expected “to be really busy” on Wednesday morning, Hopper Economist Adit Damodaran told ABC News.
“The Wednesday before Thanksgiving — Nov. 24 — will be the busiest travel day to depart at most airports across the U.S., especially in the morning,” Damodaran said.
Majority of Americans will drive to their destination over Thanksgiving.
AAA predicts 53.4 million people will travel on the roads and in the skies for the Thanksgiving holiday, which is up 13% from 2020. This year’s forecast marks the highest single-year increase in Thanksgiving travelers since 2005, bringing travel volumes close to pre-pandemic levels in 2019, according to AAA.
Of those 53.4 million, AAA says a majority of them, 48.3 million, will hit the road.
Worst time to drive is Wednesday afternoon.
Data from analytics company INRIX shows that anytime after noon all the way through 8 p.m. Wednesday will see the most congested roads.
The Sunday after Thanksgiving could have some traffic jams as well from 1 p.m. to 7 p.m.
In Atlanta, congestion during peak times will reach a high of 340% over normal, in New York a whopping 482% and in Los Angeles — 385%.
If you are driving, experts said to also be mindful you might be paying more at the pump than you’re used to at $3.35 per gallon.
“We’re just cents away from the highest Thanksgiving gas prices ever recorded,” Patrick De Haan, head of petroleum analysis at GasBuddy, said in a press release. “With global oil demand surging this year as the pandemic has eased, we find ourselves in unfamiliar territory – some of the highest Thanksgiving gas prices on record.”
(NEW YORK) — Amazon and Starbucks teamed up to launch a new cashier-less cafe in midtown Manhattan that opens to the public on Thursday.
The new concept store combines a traditional Starbucks pickup cafe with the so-called “Just Walk Out Shopping” experience of an Amazon Go market, allowing customers to order their coffee concoctions, pastries and sandwiches ahead of time on the Starbucks app and see the status of their order on a digital screen when they arrive.
Customers can then directly take items off the shelf to add to their Amazon Go virtual cart or put them back on the shelf to remove from their virtual cart. A customer will be charged for their items automatically when they leave the Amazon Go market, after using the Amazon app, Amazon One payment method or credit card to enter the store.
The coffee shop and market also feature a lounge and individual workplaces, expandable tables, power outlets and USB ports for those who want to work in the cashier-less cafe.
“The new Starbucks Pickup with Amazon Go is designed to provide our customers with an experience that delivers convenience and connection in an effortless way,” Katie Young, the senior vice president of global growth and development at Starbucks, said in a statement.
“Our goal with this new store concept is to give our customers the ability to choose which experience is right for them as they go through their day, whether it is utilizing the Starbucks and Amazon apps to purchase food and beverages on the go, or deciding to stay in the lounge for the traditional third place experience Starbucks is known for,” Young added.
The Seattle-based companies said they plan to open a second location in the New York Times Building next year, and a third one in New York City soon to meet “evolving customer preferences for convenience, higher levels of mobile ordering and contactless pay, and reduced time waiting in lines,” according to a joint statement Thursday.
The initiatives come as the service industry notably struggles to hire staffers in the wake of COVID-19-related shocks, but also as millennial and Gen Z shoppers have increasingly driven demand for unattended commerce.
The store also opens amid the backdrop of new unionization efforts emerging at both Amazon and Starbucks.
(NEW YORK) — The pandemic has slowed down the supply chain in many sectors, but Campbell’s CEO says he expects the company’s products to be fully available this holiday season.
Mark Clouse, CEO of Campbell’s Soup Company told “Good Morning America” a week ahead of Thanksgiving, that the company’s efforts are the result of “the amazing work of our teams on the front lines and plants and logistics and sales teams.”
“You’ll have all of your holiday favorites on the shelves ready to go. They’ve worked hard to do it and, you know, I would say plan early, but I think we’re in great shape going into the holidays,” he said.
But availability isn’t the only concern for consumers — paying more at checkout has also been a burgeoning issue nationwide.
After a full year into the pandemic, the Economic Research Service for the U.S. Department of Agriculture predicted the cost of food from grocery stores would rise 1-2% this year. The latest Consumer Price Index Summary from the Bureau of Labor Statistics found that the food-at-home index increased 1% over the month as all six major grocery store food group indexes continued to rise.
“Food-at-home” is defined by the U.S. Department of Agriculture as grocery store or supermarket food purchases.
“There’s also been a significant amount of inflation that we’ve seen over the last several months,” Clouse said. “We use every tool we’ve got to keep price affordable. We know how important it is, especially for this time of year and through holiday celebrations so we’ve worked hard to keep the prices reasonable but there has been an increase in price.”
The index for other food at home — not including meat, poultry fish or eggs — “rose 1.2% over the month, its largest monthly increase since April 2020, near the onset of the pandemic,” the BLS report stated. “Cereals and bakery products rose 1% in October following a 1.1% increase the prior month. The index for nonalcoholic beverages rose 0.8 percent in October, the index for dairy and related products rose 0.2%, and the index for fruits and vegetables advanced 0.1%.”
Clouse continued: “Inflation, I would expect to continue to see as we move forward into ’22, but count on us to be doing everything we can to find ways to keep the prices reasonable and affordable, especially through the holiday season.”
To help offset the rising production costs that could be passed on to consumers, Clouse said Campbell’s has relied on “a combination of bringing in a lot of new workers into our facilities as well as the teams performing very well.”
“I would expect as we go into ’22 you’re going to see steady improvement on that front and we’re expecting as we get into the new year to be fully back in supply on most of our products,” he added.
As shoppers head to the store before Thanksgiving, Clouse said “I’m hopeful for everybody that you have a wonderful happy Thanksgiving. My advice is get online, get your recipes, figure out those ingredients you need for your dishes, get out early to the store and get them ready to go.”
(NEW YORK) — When Kara Moore, a mom of three, returned to the workforce last year after nine years as a stay-at-home mom, she struggled to find a job.
Moore, 42, who holds a bachelor’s degree and spent nearly a decade working in corporate America, eventually took a part-time job with a local school district.
“The job wasn’t even a fit, it was just out of necessity that I took it,” Moore, of Delta, Pennsylvania, told “Good Morning America,” noting that a part-time role worked better for her financially because it meant she did not have to pay for child care.
Around six months into that job, the coronavirus pandemic struck the United States and Moore said her role was eliminated.
While home and unemployed, Moore, a single mom who had at the time recently separated from her husband, signed up to work with Instacart, a grocery delivery service.
Moore says she is now making nearly five times what she did in her school district job. And since she can set her own schedule, she does not have to put her children in daycare.
“If I was working in an office, corporate-style job, I would be paying for daycare and I wouldn’t have been able to afford it,” she said. “Now I’m home every night with my daughters. I’m able to take them to sports and be home with them for homework. I can take off if my kids are sick.”
When Moore signed on with Instacart, she joined a growing number of women who have recently jumped into the gig economy, an umbrella term that applies to all people who effectively work as their own bosses, whether on app-based platforms or as entrepreneurs and freelancers.
At Uber, the number of women who earn on the app has increased nearly 80% since the beginning of the year, while the number of men increased by about 40%. On Uber Eats, more than 40% of delivery drivers in the U.S. are female, and that share is growing, a company spokesperson told ABC News.
At Instacart, nearly 70% of its shoppers identify as women, and nearly half say they have children living at home, according to the company.
DoorDash, a technology that connects consumers with their favorite local and national businesses, says 58% of delivery workers on its platform are female and that the flexibility to design their own schedule is a top reason they choose DoorDash.
“In the past year, more women than men are coming to DoorDash to make up for lost income and to cover expenses,” said Elizabeth Jarvis-Shean, the company’s vice president of communications and policy. “When you think about the pandemic and the disproportionate impact on women, it makes a lot of sense that a flexible schedule that allows them to set their own hours is something that can be appealing.”
Since the start of the pandemic, around 3.5 million moms of school-age children have left active work, shifting into paid or unpaid leave, losing their job or exiting the labor market altogether, in many cases because of the demands of caregiving duties according to the U.S. Census Bureau.
“Women are still in a lot of cases predominantly responsible for a lot of care in the home and in families with children,” said Isabel Soto, director of labor market policy at the American Action Forum, a policy institute. “The gig economy allows you to make your own hours, set your own rates of pay and own your work in a way that the traditional work structure doesn’t allow you to do, so it makes sense that it’s attractive to women.”
A reflection of what’s broken in the labor market
The shift for women into the gig economy is as much about opportunity as it is a reflection of what’s broken in the labor market, according to Shelly Steward, director of the Aspen Institute’s Future of Work Initiative.
“When we’re in a crisis of child care and job quality — too many jobs do not pay enough and do not allow basic levels of flexibility — women will turn to gig work,” said Steward. “We do not have enough good jobs that allow people to balance different commitments or that allow flexibility of scheduling. We do not have an adequate system of child care. We do not pay [child] care workers enough and we do not ensure that care is provided to people and families who need it.”
Jackie Poole, 50, of Colorado, has for the past three years worked a full-time job and also delivered for DoorDash in order to help cover the costs of caring for her 15- and 12-year-old sons.
Poole, a single mom, is not alone as the majority of female DoorDash workers use the platform to earn additional income, according to the company.
I get aggravated sometimes that I have to work a second job to make extra income.
“I get aggravated sometimes that I have to work a second job to make extra income,” said Poole. “But on the other hand, I am so thankful and grateful to work where you don’t have to report to anybody, you can work [the job] on your terms and it can accommodate you.”
Shari Stephens, a mom of two from Rochester, Michigan, said she would not have been able to support her family during the pandemic had she not restarted her career two years ago as a freelance marketing expert.
Through her freelance work on the online platform Upwork, she is now able to set her own schedule and set her own income, two things she said she struggled with in previous corporate jobs.
Had she been in a corporate job during the pandemic, Stephens said she likely would have had to quit because of the demands of her caregiving duties.
“We would have lost everything,” said Stephens. “Because I was working at home and could do homeschool with my kids and still have finances coming in, we didn’t have to make some of those tough choices that I know so many mothers had to.”
Gig economy not a fix for women, some experts say
Though the gig economy works for many women, some experts, including Steward, say it should not be seen as a cure-all for the ways in which the traditional labor market has historically left women behind.
“It’s not a solution to those problems,” said Steward, adding that gig work is something women are, “forced into, because there are no other options.”
Often, when women step out of the workforce — to raise kids, for example — they often return to lower pay and career stagnation, a pay gap known as the “motherhood wage penalty.” Some experts worry the same will happen to women choosing the gig economy now because of caregiving demands.
Tiffany Stockton, a mother of two in Kentucky, left the corporate world when she became a mom. When she tried to rejoin the workforce, she said she was not able to find a job that was both well-paying and matched her skill set.
Frustrated, she started as a delivery person for Uber Eats, where 41% of delivery people are female, according to an Uber spokesperson.
“Employers wouldn’t hire me for the higher-level positions they had,” she said. “It was a big catch-22 and I just kind of threw in the towel and said, ‘Fine, I’m going to become an independent contractor and take control of my own work.'”
Stockton, whose husband has a full-time, salaried job with benefits, said she enjoys the work, but does think about what is next and the difficulties she may face if she tries again to return to the traditional workforce.
“I haven’t been in that corporate world for so long I would likely have to start at the bottom again, go through all of the rungs as I climb the ladder again,” she said. “And for now, the corporate world really isn’t designed for the mom that has kids at home.”
Likewise, Moore said she also worries her job delivering for Instacart does not offer a clear career path or benefits like retirement savings, but for now, it works.
“It’s a little bit on the backburner for me,” Moore said of planning for her future. “For right now, I don’t have to worry about how we’re going to get food or whether we can stop for a soft drink on the way home from a doctor’s appointment, and those were concerns before.”
Many women-focused policy groups, including the AAUW, are calling for more protections for gig workers, from health insurance to retirement savings plans.
Soto, of the American Action Forum, said she predicts that as the gig economy continues to grow, there will be more options that give gig workers more workplace protections, like benefits that are portable, meaning they are tied to the employee and not the employer.
Some companies have started offering some benefit options on their own. Instacart, for example, offers a comprehensive workplace insurance plan for all shoppers, and discounts to other services, like assistance with filing taxes.
The company also employs in-store shoppers that are employees of Instacart with access to benefits like paid sick time and a retirement plan, according to a company spokesperson.
In other cases the benefits a gig worker receives may depend on where they live. In California, for example, state lawmakers sought to require companies that employ drivers through apps to classify them as employees in order to get minimum wage and benefits .A ballot measure, Proposition 22, that passed in November keeps rideshare and related gig workers classified as independent contractors, but the legal battle over that measure continues in court.
Both Uber and DoorDash, which backed Proposition 22, say the majority of their drivers want to stay as independent contractors because of the flexibility and independence it provides, according to the companies.
And in a different approach, Uber has started offering support to its female drivers trying to get back into the workforce. After seeing the spike in women on the app this year, Uber partnered with Dress for Success to give drivers access to the organization’s coaching, networking and professional development services.
Some experts who question the sustainability of the gig economy for women say the onus still should not be on women to have to go outside the traditional labor market to make their careers work.
“I would shift the responsibility from working women and put it towards policymakers, business leaders, people in positions of power to change things,” said Steward. “To recognize that we don’t have enough good jobs, and we don’t have enough jobs that allows people to balance different commitments in life and we don’t have a basic care infrastructure that provides and values caretaking.”
“If we address those problems, then women will not be in a position of needing to find any means of earning a little bit of extra income at the hours that work for them as they balance so many different things in their lives,” she said.
