President Biden cheered the report in a statement Thursday morning. “For months, doomsayers have been arguing that the U.S. economy is in a recession, and congressional Republicans have been rooting for a downturn,” he said. “But today we got further evidence that our economic recovery is continuing to power forward.”

By one common definition, the U.S. economy entered a recession when it experienced two straight quarters of shrinking G.D.P. at the start of the year. Officially, however, recessions are determined by a group of researchers at the National Bureau of Economic Research, who look at a broader array of indicators, including employment, income and spending.

Most analysts don’t believe the economy meets that more formal definition, and the third-quarter numbers — which slightly exceeded forecasters’ expectations — provided further evidence that a recession had not yet begun.

But the overall G.D.P. figures were skewed by the international trade component, which often exhibits big swings from one period to the next. Economists tend to focus on less volatile components, which have showed the recovery steadily losing momentum as the year has progressed. One closely watched measure suggested that private-sector demand stalled out almost completely in the third quarter.

Mortgage rates passed 7 percent on Thursday, their highest level since 2002.

“Housing is just the single largest trigger to additional spending, and it’s not there anymore; it’s going in reverse,” said Diane Swonk, chief economist at the accounting firm KPMG. “This has been a stunning turnaround in housing, and when things start to go really quickly, you start to wonder, what are the knock-on effects, what are the spillover effects?”

The third quarter was in some sense a mirror image of the first quarter, when G.D.P. shrank but consumer spending was strong. In both cases, the swings were driven by international trade. Imports, which don’t count toward domestic production figures, soared early this year as the strong economic recovery led Americans to buy more goods from overseas. Exports slumped as the rest of the world recovered more slowly from the pandemic.

Both trends have begun to reverse as American consumers have shifted more of their spending toward services and away from imported goods, and as foreign demand for American-made goods has recovered. Supply-chain disruptions have added to the volatility, leading to big swings in the data from quarter to quarter.

Few economists expect the strong trade figures from the third quarter to continue, especially because the strong dollar will make American goods less attractive overseas.

Jim Tankersley contributed reporting.

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Rhode Island Gov. Dan McKee Narrowly Wins Democratic Primary

McKee edged out former CVS executive Helena Foulkes, who saw a late surge in the polls and won an endorsement from The Boston Globe’s editorial board.

Rhode Island Gov. Dan McKee eked out a victory in his Democratic primary on Tuesday, beating back strong challenges from a pair of opponents as he seeks his first full term in office.

McKee, the former lieutenant governor who became the state’s chief executive a year and a half ago when two-term Gov. Gina Raimondo was tapped as U.S. commerce secretary, will be the heavy favorite in the liberal state in November against Republican Ashley Kalus, a business owner and political novice.

McKee edged out former CVS executive Helena Foulkes, who saw a late surge in the polls and won a last-minute endorsement from The Boston Globe’s editorial board. Secretary of State Nellie Gorbea, who was seeking to become the first Latina governor in New England, finished a close third.

“I’m proud to be here,” the 71-year-old governor said in his victory speech. “Because Rhode Island is positioned in a way where we’ve never had this momentum before and we’re going to take full advantage of it.”

In an awkward moment, a phone was handed toward McKee during the speech. When he was told it was Foulkes, McKee said, “No, that’s not going to happen.” As the crowd chanted “four more years,” McKee said, “Hang up on them, hang up on them.”

Foulkes told her supporters she was unhappy McKee wouldn’t answer her call.

In the last primaries before the November general election, voters in Rhode Island were choosing nominees for statewide offices, U.S. House, the state Legislature and local positions. New Hampshire and Delaware also held primaries on Tuesday.

With his victory, McKee avoided becoming the first governor to lose his primary since 2018, when Kansas Gov. Jeff Colyer narrowly lost the Republican nomination to Secretary of State Kris Kobach, who went on to lose the general election to Democrat Laura Kelly. Like McKee, Colyer took over when the sitting governor resigned for another job.

In his campaign, McKee touted his leadership in navigating the state’s economic recovery from the COVID-19 pandemic after he was sworn in as governor in March 2021. Foulkes said she would work to find new ways for companies to invest in Rhode Island and help existing companies find new markets. Gorbea argued the state needed better leadership on issues like housing, education and climate change.

Besides McKee, Foulkes and Gorbea, two other Democrats were also seeking the nomination: former Secretary of State Matt Brown, a progressive; and community activist Dr. Luis Daniel Muñoz.

Kalus easily defeated her lone Republican rival, Jonathan Riccitelli, whom the Globe reported had been arrested dozens of times since 2000 under a different name, on charges ranging from obstructing police officers to assault, according to court records.

Kalus, who owns a COVID-19 testing company that’s in a dispute with the state over a canceled contract, moved to Rhode Island last year from Illinois and previously worked for former Illinois Republican Gov. Bruce Rauner. She said Rhode Island needs a fighter like her, now more than ever, because every day gets harder for working families.

In another top race on Tuesday, voters were choosing nominees in the 2nd Congressional District for the seat being vacated by Democratic Rep. Jim Langevin, who is retiring after more than 20 years representing the district. Langevin was the first quadriplegic to serve in Congress.

State Treasurer Seth Magaziner, who was endorsed by Langevin, won the crowded Democratic primary. Republican Allan Fung, the former mayor of Cranston, was unopposed in his bid for the Republican nomination. National Republican leaders think this is their best chance to flip the seat in more than three decades. House Republican leader Kevin McCarthy visited Rhode Island in August to raise money for Fung.

Magaziner had been running for governor but switched races after Langevin’s announcement to try to keep the seat in Democratic control. Magaziner told supporters Tuesday night that the election is about values and preserving democracy for the next generation.

In the 1st Congressional District, Democratic U.S. Rep. David Cicilline will face Republican Allen Waters in November. Both were unopposed Tuesday. Cicilline is seeking his seventh term.

But the top race in Rhode Island on Tuesday was the Democratic gubernatorial primary. Both McKee and Gorbea benefited from the base of support and name recognition they have gotten since both were elected to statewide office in 2014. Foulkes proved to be an adept fundraiser and spent heavily on the race in her first bid for public office.

Late in the primary, Gorbea’s campaign aired an attack ad to criticize McKee over the awarding of a controversial state contract that the FBI is now investigating. It had to pull the ad because of errors in it, including featuring an article by a conservative commentator who was criticizing McKee on another issue. McKee’s campaign said the governor would continue to rise above dirty politics and false attacks, and show “leadership when it matters most.”

McKee was endorsed by a host of large unions, including those representing teachers, firefighters, building trades and auto workers. He highlighted his efforts to help the state’s economy recover from COVID-19, the gun control bills he signed into law and his efforts to protect access to abortion care.

He had a memorable ad of his own, called “motha,” featuring his 94-year-old mother. As he plays cards with her, he discusses the state’s economic recovery from COVID-19, eliminating the state’s car tax, creating affordable housing and passing gun safety laws to keep families safe.

“Not bad for a year and a half,” the governor says.

His mother, Willa, replies, “Not bad for a governor that lives with his motha.”

During his victory speech, McKee ticked off his accomplishments and asked the crowd, “Are you ready?” He said, “Not bad for 18 months.” Laughing, some of his supporters said Willa’s line, “Not bad for a governor that lives with his mother.”

Additional reporting by The Associated Press.

Source: newsy.com

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How Pharmacy Work Stopped Being So Great

If any group of workers might have expected their pay to rise last year, it would arguably have been pharmacists. With many drugstores dispensing coronavirus tests and vaccines while filling hundreds of prescriptions each day, working as a pharmacist became a sleep-deprived, lunch-skipping frenzy — one in which ornery customers did not hesitate to vent their frustrations over the inevitable backups and bottlenecks.

“I was stressed all day long about giving immunizations,” said Amanda Poole, who left her job as a pharmacist at a CVS in Tuscaloosa, Ala., in June. “I’d look at patients and say to them, ‘I’d love to fill your prescriptions today, but there’s no way I can.’”

Yet pay for pharmacists, who typically spend six or seven years after high school working toward their professional degree, fell nearly 5 percent last year after adjusting for inflation. Dr. Poole said her pay, about $65 per hour, did not increase in more than four years — first at an independent pharmacy, then at CVS.

data collected by a team of economists at the University of California, Berkeley.

The gap is part of a long-term trend made worse by a slowdown in pay gains for middle- and upper-middle-income workers in the 2000s. “If you’re going to a hedge fund or investment bank or a tech company, you’ve done enormously well,” said Lawrence Katz, a labor economist at Harvard. Typical college graduates, he said, “have not done that great.”

The stagnation appears to have moved up the income ladder in the last few years, even touching those in the top 10 percent.

In some cases, the explanation may be a temporary factor, like inflation. But pharmacists illustrate how slow wage growth can point to a longer-term shift that renders once sought-after jobs less rewarding financially and emotionally.

wages in the profession surged as the country faced a pharmacist shortage driven by an aging population and a rise in chronic conditions.

typically take two or three years of college-level prerequisites before earning a four-year professional degree.)

But by the 2010s, the market for pharmacists was cooling thanks to some of the same factors that have weighed on other middle-class professions. Large chains such as Walgreens and CVS were buying up competitors and adjacent businesses like health insurers.

Consolidation among benefit managers gave them more leverage over pharmacies to drive prices lower. (CVS merged with a large benefits manager in 2007.)

Big drugstore chains often responded by trying to rein in labor costs, according to William Doucette, a professor of pharmacy practice at the University of Iowa. Several pharmacists who worked at Walgreens and CVS said the formulas their companies used to allocate labor resulted in low levels of staffing that were extremely difficult to increase.

According to documents provided by a former CVS pharmacist, managers are motivated by bonuses to stay within these aggressive targets. CVS said it made staffing decisions to ensure “the safe and accurate filling of prescriptions.”

The day that Dr. Poole began seriously reconsidering her CVS job in Tuscaloosa came in May 2021 when, nearly eight months pregnant, she fainted at work.

The loss of consciousness was nothing serious in itself — she and the baby were unharmed, and an adjustment to her blood-pressure medication solved the problem. Much more alarming to her was what the episode said about working conditions: Despite the additional responsibilities of the pandemic, like coronavirus vaccines and catering to Covid-19 patients, there was no co-worker around to notice that she had hit the deck.

contract signed in March by a union of Chicago-area Walgreens pharmacists reflected a similar approach. It provided maximum base pay of $64.50 per hour, the same as the previous contract, but lowered the starting wage from $58 per hour to $49.55 per hour by September. (Like many retail pharmacists, the union members also receive bonuses.)

CVS and Walgreens said they had made hiring pharmacists a priority during the pandemic — CVS said it employed nearly 6 percent more pharmacists today than it did in early 2020; Walgreens declined to provide a figure. CVS said its compensation was “very competitive” for pharmacists, and Walgreens cited “ongoing phased wage increases”; both chains have offered signing bonuses to recruit pharmacists. The Chicago union said Walgreens had recently offered to raise pay for about one-quarter of its lowest-paid members.

To explain the wage stagnation of upper-middle-class workers during the pandemic, some economists have suggested that affluent workers are willing to accept lower wage growth for the ability to work from home. Dr. Katz, of Harvard, said the wages of many affluent workers might simply be slower to adjust to inflation than the wages of lower-paid workers.

But Marshall Steinbaum, an economist at the University of Utah, said the fact that upper-middle-class workers were not able to claim a larger share of last year’s exceptionally high corporate profits “speaks to the disempowerment of workers at all levels of status.”

change in state regulations would allow pharmacy technicians to administer shots. “They expected the techs to transition into that role,” Dr. Knolhoff said.

Overall, the industry added more than 20,000 technicians — an increase of about 5 percent — from 2020 to 2021. In that time, prescription volume increased roughly the same percentage, according to data from Barclays.

The effective replacement of higher-paid workers with lower-paid workers has also occurred in other sectors, such as higher education. But at drugstores, where pharmacists must sign off on every prescription, this shift has left little margin for error.

In August 2020, Dr. Wommack, the Walgreens pharmacist in Missouri, got Covid. A colleague covered her first two days out but couldn’t cover the third, at which point the store simply closed because there was no backup plan.

Several pharmacists said they were especially concerned that understaffing had put patients at risk, given the potentially deadly consequences of mix-ups. “It was so mentally taxing,” said Dr. Poole, the Tuscaloosa pharmacist. “Every day, I was like: I hope I don’t kill anyone.”

Asked about safety and staffing, CVS and Walgreens said they had made changes, like automating routine tasks, to help pharmacists focus on the most important aspects of their jobs.

Many pharmacists contacted for this article quit rather than face this persistent dread, often taking lower-paying positions.

Still, none had regrets about the decision to leave. “I was 4,000 pounds lighter the moment I sent my resignation email in,” said Dr. Wommack, who left the company in May 2021 and now works at a small community hospital.

As for the medication she had taken for depression and anxiety while at Walgreens, she said, “Shortly after I stopped working there, I stopped taking those pills.”

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Japan Cabinet Sets Abe State Funeral Amid Mixed Public View

By Associated Press
July 22, 2022

Japan’s Cabinet will now hold a state funeral for the assassinated former Prime Minister Shinzo Abe in September.

Japan’s Cabinet on Friday formally decided to hold a state funeral on Sept. 27 for assassinated former Prime Minister Shinzo Abe amid national debate over the plan, which some criticize as an attempt to glorify a divisive political figure.

Abe was gunned down earlier this month during a campaign speech in the western city of Nara, shocking a nation known for safety and strict gun control. The alleged gunman was arrested immediately after the shooting and is being detained for interrogation as authorities seek to formally press murder charges.

Chief Cabinet Secretary Hirokazu Matsuno said a state funeral is appropriate because of Abe’s “distinguished contributions” as the longest-serving Japanese leader and his “outstanding leadership and decisive actions” in broad areas including economic recovery, the promotion of diplomacy centered on the Japan-U.S. alliance, and reconstruction following the 2011 tsunami disaster.

Matsuno said the funeral will be a non-religious ceremony held at the Nippon Budokan, an arena originally built for the 1964 Tokyo Olympics that has since become a popular venue for sports, concerts and cultural events. The government also holds an annual memorial service on Aug. 15 marking Japan’s World War II defeat at the arena.

Foreign dignitaries will be invited to Abe’s state funeral, Matsuno said, though further details, including the estimated cost and number of attendees, are yet to be determined.

Prime Minister Fumio Kishida last week announced plans for a state funeral that some see as a move to stabilize his grip on power by pleasing ultra-conservatives who backed Abe, who led the biggest party wing.

The plan has received a mixed reaction from opposition leaders and the public. Some oppose the use of tax money on the event, while others criticize Kishida’s governing party for politicizing Abe’s death to glorify him and attempt to end debate over his highly divisive legacy, including his hawkish diplomatic and security policies and revisionist stance on wartime history.

On Thursday, a civil group opposing plans for Abe’s state funeral submitted an injunction request asking the Tokyo District Court to suspend the Cabinet decision and budget for the event, saying a state-sponsored funeral without Parliament approval violates the constitutional right to freedom of belief.

Dozens of protesters stood outside the Prime Minister’s Office on Friday to oppose the Cabinet decision. An opposition leader, Mizuho Fukushima, said the decision was not based on public consensus, has no legal basis and should be scrapped.

Abe’s private funeral was already held at a Tokyo temple and attended by about 1,000 mourners, including lawmakers, business leaders and others.

Abe’s assassination shed a light on his and his party’s decades-long questionable links to the Unification Church.

The alleged assassin, Tetsuya Yamagami, 41, has told police that he killed Abe because of his links to a religious group that he hated. His reported accounts and other evidence suggest he was distressed because his mother’s massive donations to the church had bankrupted the family.

Additional reporting by The Associated Press. 

Source: newsy.com

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Biden to unveil economic partnership for Americas – U.S. official

A LAPD helocopter flies near the LA Convention Center during the first day of the Ninth Americas Summit in Los Angeles, U.S., June 6, 2022. REUTERS/Daniel Becerril

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WASHINGTON, June 6 (Reuters) – President Joe Biden will announce this week at the Summit of the Americas an economic partnership for the Western hemisphere focusing on promoting economic recovery by building on existing trade agreements, U.S. administration officials said on Monday.

Dubbed the “Americas Partnership for Economic Prosperity”, the plan will cover five areas including mobilizing investments, reinvigorating institutions, clean energy jobs, resilient supply chains and sustainable trade.

“The overall objective is to build our economies from the bottom up and middle out by building on the foundation established by our free trade agreements with the region to better address inequality and lack of economic opportunity,” a senior administration official told reporters in a call.

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The plan would aim to offer an alternative in a region where China has been expanding its sphere of influence. It was unclear, however, how many countries in economically troubled Latin America would buy into such an arrangement.

The United States is hosting the Summit of the Americas in Los Angeles, a gathering where Biden aims to address regional migration and economic challenges. On Monday, the White House said it was not inviting Cuba, Venezuela and Nicaragua, prompting Mexico’s president to skip the event.

The summit is being convened in the United States for the first time since the first such gathering in Miami in 1994, as Biden seeks to reassert U.S. leadership and counter China’s growing clout. He is due to formally open the summit on Wednesday.

Biden will put forward “an ambitious reform” of the Inter-American Development Bank (IDB), the official said, adding that the United States would also seek an equity stake at the bank’s private sector lending arm to support the deployment of private capital.

“Because the private sector has a central role to play,” the official said.

Eric Farnsworth, vice president of the Council of the Americas think tank, told a Senate subcommittee last week that the Biden administration should push for a regional trade initiative similar to the one for the Indo-Pacific that Biden announced during his Asia tour in May.

But the idea of creating a hemisphere-wide trade bloc has never gotten off the ground, partly because of protectionism sentiment among U.S. labor unions and some lawmakers.

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Additional reporting by Matt Spetalnick in Los Angeles; Reporting by Humeyra Pamuk and Eric Beech; Editing by Chris Reese and Stephen Coates

Our Standards: The Thomson Reuters Trust Principles.

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Japan’s Economy Shrank 1 Percent as Consumers Fled Covid

TOKYO — Last December, after two years of stop-and-go growth, Japan’s economic engine seemed like it might finally be revving up. Covid cases were practically nonexistent. Consumers were back on the town, shopping, eating out, traveling. The year 2021 ended on a high note, with the country’s economy expanding on an annual basis for the first time in three years.

But the Omicron variant of the coronavirus, geopolitical turmoil and supply chain snarls have once again set back Japan’s fragile economic recovery. In the first three months of the year, the country’s economy, the world’s third largest after the United States and China, shrank at an annualized rate of 1 percent, government data showed on Wednesday.

A combination of factors contributed to the decline in growth. In January, Japan had put into place new emergency measures as coronavirus case numbers, driven up by Omicron, moved toward the highest levels of the pandemic. In February, Russia invaded Ukraine, spiking energy prices. And that was before China, Japan’s largest export market and a key supplier of parts and labor to its manufacturers, imposed new lockdowns in Shanghai, throwing supply chains into chaos.

The contraction has not been as “extreme” as previous economic setbacks thanks to high levels of vaccine uptake and less wide-ranging emergency measures than during previous waves of the coronavirus, according to Shinichiro Kobayashi, principal economist at the Mitsubishi UFJ Research Institute.

traced to the outbreak of Covid-19, which triggered an economic slowdown, mass layoffs and a halt to production. Here’s what happened next:

Consumer spending “will recover from the downward pressure, but because there are these negative factors, the question is how broad will that recovery be?” said Yoshiki Shinke, a senior economist at Dai-ichi Life Research Institute.

Japan’s prime minister, Fumio Kishida, has tried to offset the effects of price increases with large government subsidies for fuel and cash handouts for families with children. But Japanese consumers, wary of the pandemic’s economic effects, have largely been putting rounds of stimulus money into savings.

Japan’s growth is facing diverse challenges, but ultimately its recovery will depend on Covid, analysts said, a common refrain over the last two years.

While Japan has high vaccination rates and has performed better than most other wealthy countries at keeping the pandemic in check, the virus’s protean nature has made it difficult to predict its path. And that has made experts hesitant to commit to any forecasts about its future impact on global economies.

“The big risk is that corona starts to spread again,” said Naoyuki Shiraishi, an economist at the Japan Research Institute. “If a new variant appears, there will be new restrictions on activity, and that will suppress consumption.”

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Stock Markets Off to Worst Start Since 2016 as Fed Fights Inflation

After falling for a fourth day in a row on Friday, the stock market suffered its worst week in nearly two years, and so far in January the S&P 500 is off to its worst start since 2016. Technology stocks have been hit especially hard, with the Nasdaq Composite Index dropping more than 10 percent from its most recent high, which qualifies as a correction in Wall Street talk.

That’s not all. The bond market is also in disarray, with rates rising sharply and bond prices, which move in the opposite direction, falling. Inflation is red hot, and supply chain disruptions continue.

Until now, the markets looked past such issues during the pandemic, which brought big increases in the value of all kinds of assets.

Yet a crucial factor has changed, which gives some market watchers reason to worry that the recent decline may be consequential. That element is the Federal Reserve.

intervened to save desperately wounded financial markets back in early 2020.

This could be a good thing if it beats back inflation without derailing the economic recovery. But removing this support also inevitably cools the markets as investors move money around, searching for assets that perform better when interest rates are high.

“The Fed’s policies basically got the current bull market started,” said Edward Yardeni, an independent Wall Street economist. “I don’t think they are going to end it all now, but the environment is changing and the Fed is responsible for a lot of this.”

The central bank is tightening monetary policy partly because it has worked. It helped stimulate economic growth by holding short-term interest rates near zero and pumping trillions of dollars into the economy.

This flood of easy money also contributed to the rapid rise in prices of commodities, like food and energy, and financial assets, like stocks, bonds, homes and even cryptocurrency.

said in 1955, the central bank finds itself acting as the adult in the room, “who has ordered the punch bowl removed just when the party was really warming up.”

The mood of the markets shifted on Jan. 5, Mr. Yardeni said, when Fed officials released the minutes of their December policymaking meeting, revealing that they were on the verge of embracing a much tighter monetary policy. A week later, new data showed inflation climbing to its highest level in 40 years.

Putting the two together, it seemed, the Fed would have no choice but to react to curb rapidly rising prices. Stocks began a disorderly decline.

Financial markets now expect the Fed to raise its key interest rate at least three times this year and to start to shrink its balance sheet as soon as this spring. It has reduced the level of its bond buying already. Fed policymakers will meet next week to decide on their next steps, and market strategists will be watching.

Low interest rates made certain sectors especially appealing, foremost among them tech stocks. The S&P 500 information technology sector, which includes Apple and Microsoft, has risen 54 percent on an annualized basis since the market’s pandemic-induced trough in March 2020. One reason for this is that low interest rates amplify the value of the expected future returns of growth-oriented companies like these. If rates rise, this calculus can change abruptly.

The very prospect of higher interest rates has made technology the worst-performing sector in the S&P 500 this year. Since its peak in late December, it has fallen more than 11 percent.

The S&P’s three best-performing sectors in the early days of 2022, on the other hand, are energy, financial services and consumer staples.

like Netflix and Peloton, have begun to flag as people venture out more.

Some astute market analysts foresee bigger problems. Jeremy Grantham, one of the founders of GMO, an asset manager, predicts a catastrophic end to what he calls a “superbubble.”

But the current losses could be beneficial if they let a little air out of a potential bubble, without bursting investor portfolios. This year’s declines erase only a small share of the market’s gains in recent years: The S&P 500 rose nearly 27 percent last year, more than 16 percent in 2020 and nearly 29 percent in 2019.

And the prospects for corporate earnings remain good. Once the Fed starts to act, and the effects are better understood, the stock market party could continue — at a less giddy pace.

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The Achilles’ Heel of Biden’s Climate Plan? Coal Miners.

All of that has raised the stakes for courting coal miners.

“Our guiding principle is the belief that we don’t have to choose between good jobs and a clean environment,” said Jason Walsh, the executive director of the BlueGreen Alliance, which has united labor and environmental groups to marshal support for initiatives like Mr. Biden’s. “But our ability to continue to articulate that belief with a straight face depends on the policy choices we make.”

“Coal miners,” he added, “are at the center of that.”

It is impossible to explain mine workers’ jaundiced view of Mr. Biden’s agenda without appreciating their heightened economic vulnerability: Unlike the carpenters and electricians who work at power plants but could apply their skills to renewable-energy projects, many miners are unlikely to find jobs on wind and solar farms that resemble their current work. (Some, like equipment operators, have more transferable skills.)

It is also difficult to overstate the political gamesmanship that has shaped the discourse on miners. In her 2016 presidential campaign, Hillary Clinton proposed spending $30 billion on economic aid for coal country. But a verbal miscue — “We’re going to put a lot of coal miners and coal companies out of business,” she said while discussing her proposal at a town hall — allowed opponents to portray her as waging a “war on coal.”

“It is a politicized situation in which one political party that’s increasingly captured by industry benefits from the status quo by perpetuating this rhetoric,” said Matto Mildenberger, a political scientist at the University of California, Santa Barbara, who studies the politics of climate policy.

And then there is Mr. Manchin, a complicated political figure who is among the Senate’s leading recipients of campaign money from the fossil fuel industry.

Mr. Manchin has sometimes resisted provisions favored by the miners’ union, such as wage-replacement payments to coal workers who must accept a lower-paying job. “At the end of the day, it wasn’t something he was interested in doing,” said Mr. Smith, the union’s lobbyist. A spokeswoman for Mr. Manchin declined to comment.

Yet in other ways Mr. Manchin has channeled his constituents’ feelings well, suggesting that he might be more enthusiastic about renewable-energy legislation if they were.

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As Omicron Threat Looms, Inflation Limits Fed’s Room to Maneuver

The Omicron variant of the coronavirus comes at a challenging moment for the Federal Reserve, as officials try to pivot from containing the pandemic’s economic fallout toward addressing worryingly persistent inflation.

The central bank has spent the past two years trying to support a still-incomplete labor market recovery, keeping interest rates at rock bottom and buying trillions of dollars’ worth of government-backed bonds since March 2020. But now that inflation has shot higher, and as price gains increasingly threaten to remain too quick for comfort, its policymakers are having to balance their efforts to support the economy with the need to keep price trends from leaping out of control.

That newfound focus on inflation may limit the central bank’s ability to cushion any blow Omicron might deal to America’s growth and the labor market. And in an unexpected twist, the new variant could even speed up the Fed’s withdrawal of economic support if it intensifies the factors that are causing inflation to run at its fastest pace in 31 years.

“In every one of the previous waves of the virus, the Fed was able to react by effectively focusing on downside risks to growth, and trying to mitigate them,” said Aneta Markowska, chief financial economist at Jefferies. “They’re no longer able to do that, because of inflation.”

said in an interview last week.

Janet L. Yellen, the Treasury secretary and a former Fed chair, made similar remarks at an event on Thursday.

“The pandemic could be with us for quite some time and, hopefully, not completely stifling economic activity but affecting our behavior in ways that contribute to inflation,” she said of the new variant.

during congressional testimony last week. “I think the risk of higher inflation has increased.”

Fed officials initially expected a 2021 price pop to fade quickly as supply chains unsnarled and factories worked through backlogs. Instead, inflation has been climbing at its fastest pace in more than three decades, and fresh data set for release on Friday are expected to show that the ascent continued as a broad swath of products — like streaming services, rental housing and food — had higher prices.

Given that, Mr. Powell and his colleagues have pivoted to inflation-fighting mode, trying to ensure that they are poised to respond decisively should price pressures persist.

Mr. Powell said last week that officials would discuss speeding up their plans to taper off their bond-buying program — prompting many economists to expect them to announce a plan after their December meeting that would allow them to stop buying bonds by mid-March. The Fed announced early in November that it would slow purchases from $120 billion a month, making the possible acceleration a notable change.

Ending bond-buying early would put officials in a position to raise their policy interest rate, which is their more traditional and more powerful tool.

nearly four million people are still missing from the labor market compared with just before the pandemic began. Some have most likely retired, but surveys and anecdotes suggest that many are lingering on the sidelines because they lack adequate child care or are afraid of contracting or passing along the coronavirus.

If the Fed begins to remove its support for the economy, slowing business expansion and hiring, the labor market could rebound more slowly and haltingly when and if those factors fade.

But the balancing act is different from what it was in previous business cycles. The factors keeping employees on the sidelines right now are mostly unrelated to labor demand, the side of the equation that the Fed can influence. Employers appear desperate to hire, and job openings have shot up. People are leaving their jobs at historically high rates, such a trend that job-quitting TikTok videos have become a cultural phenomenon.

In fact, the at-least-temporarily-tight labor market is one reason inflation might last. As they compete for workers and as employees demand more pay to keep up with ballooning consumption costs, companies are raising wages rapidly. The Employment Cost Index, which the Fed watches closely because it is less affected by many of the pandemic-tied problems that have muddied other wage gauges, rose sharply in its latest reading — catching policymakers’ attention.

If companies continue to increase pay, they may raise prices to cover their costs. That could keep inflation high, and anecdotal signs that such a trend is developing have already cropped up in the Fed’s survey of regional business contacts, called the Beige Book.

“Several contacts mentioned that labor costs were already being passed along to consumers with little resistance, while others said plans were underway to do so,” the Federal Reserve Bank of Atlanta reported in the latest edition, released last week.

Still, some believe that inflation will fade headed into 2022 as the world adjusts to changing shopping patterns or as holiday demand that has run up against constrained supply fades. That could leave the Fed with room to be patient on rate increases, even if it has positioned itself to be nimble.

Lifting rates “before those people come back is a little bit like throwing in the towel,” Ms. Markowska said. “I have a hard time believing that the Fed would throw in the towel that easily.”

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How Omicron Could Knock Economic Recovery Off Track

LONDON — This week, Marisha Wallace finally had to admit that her planned five-day ski holiday in Switzerland in mid-December was not salvageable: The Swiss government’s sudden decision to impose a 10-day quarantine on some international travelers meant she wouldn’t be able to leave her hotel or return home to London on her scheduled flight.

“It’s the way of the world right now,” said Ms. Wallace, an actress and a singer. “You can’t plan anymore.”

That provisional state, amplified across the world, has left the still-fragile economy in a state of suspense as spiking coronavirus infections and the new variant Omicron have popped up around the globe.

“There’s no way to know how bad it will get,” said Ángel Talavera, head of European economics at Oxford Economics.

report released Wednesday from the Organization for Economic Cooperation and Development showed, although growth has been uneven, the world economy this year bounced back more quickly and strongly than had been anticipated. The report, compiled largely before the latest coronavirus news, nevertheless warned that growth was projected to slow: in the eurozone, to 4.3 percent next year from 5.2 percent in 2021; and in the United States, to 3.7 percent in 2022 from 5.6 percent.

The organization characterized its outlook as “cautiously optimistic.” But it reiterated how much economic fortunes are inextricably tied to the coronavirus: “The economic policy priority is to get people vaccinated,” the report concluded.

a fourth wave of infections transformed Europe into a Covid hot spot and prompted new restrictions like lockdowns in the Netherlands and Austria.

During earlier outbreaks, trillions in government assistance helped quickly resuscitate the struggling U.S. and European economies. It also brought some unexpected side effects. Combined with pent-up demand, that support helped produce a shortage of labor and materials and rising inflation.

Given how much debt was racked up in the past 18 months, such aid is unlikely to recur even with a sharp downturn — and neither are wholesale closures. Vaccines provide some protection, and many people say they are unwilling to go back into hibernation.

People and business alike have shifted into a wait-and-see mode. “A lot of things do seem like they are on hold, like labor market or overall consumption decisions,” said Nick Bunker, director of economic research for the job site Indeed.

How that will affect unemployment levels and inflation rates is unclear. Jerome H. Powell, the Federal Reserve chair, indicated on Tuesday that concern about stubborn inflation was growing. The O.E.C.D. also warned that inflation could be higher and last longer than originally anticipated.

Omicron’s appearance just adds to the uncertainty, Laurence Boone, the organization’s chief economist, said in an interview.

governments have reacted with a confusing hodgepodge of stern warnings, travel bans, mask mandates and testing rules that further cloud the economic outlook. That patchwork response combined with people’s varying tolerance for risk means that, at least in the short term, the virus’s latest swerves will have a vastly different effect depending on where you are and what you do.

In France, Luna Park, an annual one-month amusement fair held in the southern city of Nice and slated to open this weekend, was called off after the government suddenly requisitioned the massive warehouse where roller coasters, shooting galleries and merry-go-rounds were being set up in order to convert the space to an emergency vaccination center.

“Today I find myself trying to save my company, and I’m not sure that I can,” said Serge Paillon, park’s owner. He feared he would face huge losses, including 500,000 euros (about $566,000) he had already invested in the event, as well as refunds for tickets that had been on sale for several months

Mr. Paillon furloughed 20 employees. Another 200 festival workers who were coming from around the country to manage the 60 games and rides were told to stay home.

“For a year and a half, it was already a disaster,” Mr. Paillon said. “And now it’s starting again.”

Israel’s decision on Saturday to shut its borders to all foreign tourists for two weeks is likely to reduce the number of tourists in Israel and the occupied territories this December by up to 40,000, or nearly 60 percent of what was expected, according to a government estimate.

Wiatt F. Bowers, an urban planner, had planned to leave Jacksonville, Fla., for Tel Aviv on Wednesday but had to cancel — the fifth time in 18 months that he had to scrap a planned trip to Israel. He will rebook, but doesn’t know when.

Foreign tourism, which brought a record 4.55 million tourists to Israel in 2019, had already nearly vanished. Between March 2020 and September 2021, nonresident foreigners were barred from entering Israel — and, by extension, the occupied territories, where entry and exit are controlled by Israel.

In Bethlehem, where tourism is the main industry, income consequently fell more than 50 percent, said the mayor, Anton Salman, in a phone interview.

Elias al-Arja, the chief of the Arab Hotel Association, which represents about 100 Palestinian hotels in the occupied territories, said he was concerned less about the short-term effect of the sudden travel ban than about the long-term message of unpredictability it sent to potential visitors.

“The disaster isn’t the groups who canceled over the next two weeks,” Mr. al-Arja said. “How can I convince people to come to the Holy Land after we promised them that you can come, but then the government closes the border?”

Reluctance to travel, though, could mean an upswing in other sectors if the new variant is not as harmful as people fear. Jessica Moulton, a senior partner at McKinsey & Company in London, said previous spending patterns during the pandemic showed that some money people would otherwise use for travel would instead be spent on dining.

She estimated that the roughly $40 billion that British consumers saved on travel last summer was used for shopping and eating out.

At the moment, Ms. Moulton said, “to the extent that Omicron decreases travel, which will happen as we head into Christmas, that will benefit restaurants.”

In Switzerland, where travelers from Britain and 22 other countries must now quarantine, the effect of the policy change on hotels was immediate.

“The majority of travelers from England — between 80 to 90 percent — have already canceled,” said Andreas Züllig, head of HotellerieSuisse, the Swiss hotel association.

Ms. Wallace, who canceled her trip to the Cambrian Hotel in Adelboden, was one of several people who changed their reservations at the hotel after the Swiss government made its announcement on Friday, just one week before the slopes open.

“This obviously has an impact on our very important winter and Christmas business,” said Anke Lock, the Cambrian’s manager, who estimated that 20 percent of the hotel’s December bookings were at risk.

For now, though, most guests are watching and waiting, Ms. Lock said: “We’ve changed the bookings from guaranteed to tentative.”

Extreme uncertainty about the economy may turn out to be the only certainty.

Patrick Kingsley contributed reporting from Jerusalem, Melissa Eddy from Berlin and Léontine Gallois from Paris.

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