Consumer prices jumped more than expected last month, with food, rent and furniture costs surging as a limited supply of housing and a shortage of goods tied to supply chain troubles combined to fuel rapid inflation.
The Consumer Price Index climbed 5.4 percent in September when compared with the prior year, more than expected in a Bloomberg survey of economists and faster than its 5.3 percent increase through August. The data raise the stakes for both the Federal Reserve and the White House, which are now facing a much longer period of rapid inflation than they had expected.
From August to September, the index rose 0.4 percent, also above expectations. Monthly price gains have slowed from their breakneck pace earlier this year — they popped as much as 0.9 percent this summer — but they remain abnormally rapid. And price pressures have not been fading as quickly as policymakers had hoped.
The September gains came as food — especially meat and eggs — cost consumers more. Housing prices also accelerated, something that raised alarm bells among many economists. Shelter is an important part of overall inflation and upward pressure in that index tends to last for some time.
Change in monthly Consumer Price Index from a year ago
In recognition of how persistent the price increases are proving, the Social Security Administration said on Wednesday that benefits will increase 5.9 percent in 2022, the biggest boost in 40 years. The increase, known as a cost of living adjustment, is tied to rising inflation.
The reality that American households are paying more for dinner, fuel and housing is a major political problem for the Biden administration and an economic dilemma for the Fed. Voters could punish Democrats at the polls as wage gains, while decent, fail to fully cover higher costs. And as prices move up in key areas like rent, chances are rising that fast price gains could last for some time.
“You have the sticky, important and cyclical piece of inflation surprising to the upside,” said Laura Rosner-Warburton, an economist at MacroPolicy Perspectives. “It is certainly a very significant development.”
Inflation jumped early in 2021 as prices for airfares, restaurant meals and apparel recovered after slumping as the economy locked down during the depths of the pandemic. That was expected. But more recently, prices have continued to climb as supply shortages mean businesses cannot keep up with fast-rising demand. Factory shutdowns, clogged shipping routes and labor shortages at ports and along trucking lines have combined to make goods difficult to produce and transport.
The snarls show no obvious signs of easing, and although Fed officials still think inflation will fade, they are increasingly concerned that supply disruptions could last long enough to prompt consumers and businesses to expect higher prices. If people believe that their lifestyles will cost more, they may demand higher compensation — and as employers lift pay, they may charge more for their goods to cover the costs, setting off an upward spiral.
Wages are already heading up, though typically too little to fully offset the amount of inflation that has occurred this year. There are notable exceptions to that, including in leisure and hospitality jobs, where pay has accelerated faster than prices.
The Fed aims for 2 percent inflation on average over time, which it defines using a different but related index, the Personal Consumption Expenditures measure. That gauge is released at more of a delay, and has also jumped this year.
Central bankers have said that they are willing to look past surging prices because the gains are expected to prove transitory, and they expect long-run trends that had kept inflation low for years to come to dominate over time. But they have acknowledged that rapid price gains have lasted longer than they had expected, and have expressed wariness.
“I believe, as do most of my colleagues, that the risks to inflation are to the upside, and I continue to be attuned and attentive to underlying inflation trends,” Richard H. Clarida, the central bank’s vice chair, said in a speech on Tuesday.
Fed officials are already planning to soon dial back their $120 billion in monthly asset purchases, a process often called tapering and the first step away from crisis-era policy. The Fed’s more traditional tool, the federal funds rate, remains set to near zero and is expected to stay there for some time.
The fact that the Fed is poised to begin tapering could mean that it will be more nimble if it does have to raise rates to control inflation next year.
Central bankers have signaled that they would use the Fed’s policies to control inflation if it proves persistent — but they would prefer to leave borrowing costs at low levels until the job market is more fully healed. Those potentially conflicting goals could set the stage for a tense 2022.
Some officials may begin to push to raise rates earlier thanks to the price pop.
“We’re already seeing officials beginning to stake out arguments on liftoff,” said Matthew Luzzetti, chief U.S. economist at Deutsche Bank. “It’s mostly an inflation story, and an inflation expectations story.”
Wall Street is watching every fresh inflation data point closely, because higher rates from the Fed could dent growth and stock prices. Plus, climbing costs can cut into corporate profits, denting earning prospects.
And the White House is under pressure to come up with whatever fixes it can. Later on Wednesday, President Biden is expected to address the supply-chain problems — which are weighing on his approval ratings as they push prices higher.
The administration is scrambling to alleviate pressures, to the extent that it is able to do so. Ahead of Mr. Biden’s speech, administration officials said they had brokered a deal to move the Port of Los Angeles toward 24/7 operations, joining Long Beach, which is already operating around the clock. UPS, Walmart and FedEx are also expected to announce that they are moving to work more off-peak hours.
White House officials and many Wall Street data watchers tend to emphasize a “core” index of inflation, which strips out volatile food and fuel prices. Core inflation climbed at 4 percent in the year through last month, but the monthly gain did look less pronounced, at 0.2 percent.
Some economists welcomed that moderation as good news, along with the cooling in key prices, like airfares, that had popped earlier in the economic reopening. Others emphasized that once supply chain kinks were worked out, prices could drop on products like couches, bikes and refrigerators, providing a counterweight to rising housing expenses.
“I don’t think there’s any reason to panic,” said Omair Sharif, founder of Inflation Insights.
Mr. Sharif said he expected consumer price inflation to moderate, coming in at 2.75 percent to 3 percent on a headline basis by next July, and for core inflation to cool down even more. Given that, he thinks policymakers at the Fed have room to be patient.
“They can wait this out for longer,” he said.
Ana Swanson and Ben Casselman contributed reporting.
Facebook told employees on Tuesday that it was making some of its internal online discussion groups private, in an effort to minimize leaks.
Many Facebook employees join online discussion groups on Workplace, an internal message board that workers use to communicate and collaborate with one another. In the announcement on Tuesday, the company said it was making some groups focused on platform safety and protecting elections, an area known broadly as “integrity,” private instead of public within the company, limiting who can view and participate in the discussion threads.
The move follows the disclosure by Frances Haugen, a former employee, of thousands of pages of internal documents to regulators, lawmakers and the news media. The documents showed that Facebook was aware of some of the harms it was causing. Ms. Haugen, a former member of Facebook’s civic misinformation team, has filed a whistle-blower complaint with the Securities and Exchange Commission and testified to a Senate subcommittee this month.
“As everyone is likely aware, we’ve seen an increase in the number of Integrity-related leaks in recent months,” an engineering director wrote in the announcement, which was reviewed by The New York Times. “These leaks aren’t representative of the nuances and complexities involved in our work and are often taken out of context, leading to our work being mischaracterized externally.”
Facebook had been known for an open culture that encouraged debate and transparency, but it has become more insular as it has confronted leaks about issues such as toxic speech and misinformation and grappled with employee unrest. In July, the communications team shuttered comments on an internal forum used for companywide announcements, writing, “OUR ONE REQUEST: PLEASE DON’T LEAK.”
“Leaks make it harder for our teams to work together, can put employees working on sensitive subjects at risk externally and lead to complex topics being misrepresented and misunderstood,” Andy Stone, a Facebook spokesman, said in a statement. Mr. Stone also said Facebook had been planning the changes for months.
Tuesday’s announcement stated that Facebook plans to comb through some of the online discussion groups to remove individuals whose work isn’t related to safety and security. The changes will occur in “the coming months” and “with the expectation that sensitive Integrity discussions will happen in closed, curated forums in the future.”
In internal comments, which were shared with The Times, some employees supported the move while others denounced the loss of transparency and collaboration. They called the change “counterproductive” and “disheartening,” with one person suggesting that it could lead to even more leaks from disgruntled employees.
“I think every single employee at the company should be thinking about and working on integrity as part of their day-to-day role, and we should work to foster a culture where that’s the expectation,” one Facebook employee wrote. “Siloing off the people who are dedicated to integrity will harm both active efforts to collaborate and reduce the cultural expectation that integrity is everyone’s responsibility.”
Mike Isaac contributed reporting.
Federal Reserve officials were preparing to begin slowing down monetary policy support as soon as the middle of November, minutes from their September meeting showed, and policymakers debated when they might need to raise rates amid rising inflation risks.
The Fed has been buying $120 billion in bonds each month and holding the federal funds rate near zero to make borrowing cheap and keep money flowing through the economy, stoking demand and speeding up the recovery. But the central bank’s officials signaled after their Sept. 21-22 meeting that they might announce a plan to pare back those asset purchases as soon as early November. Minutes from the gathering, released Wednesday, provided additional details on that plan.
The minutes suggested that “if a decision to begin tapering purchases occurred at the next meeting, the process of tapering could commence with the monthly purchase calendars beginning in either mid-November or mid-December.”
The process could end by the middle of next year, the minutes indicated. That backed up the timeline that Jerome H. Powell, the Fed chair, laid out during his news conference after the meeting.
At the same time, Fed officials have been clear that they will continue to support the economy with low interest rates as the job market continues to heal. Their hopes of moving very gradually when it comes to rate increases could be complicated by rapidly rising prices, though, as supply chain disruptions tied to the pandemic persist and rising rents raise the prospect of sustained increases.
The minutes showed that “various” meeting participants thought that rates should stay at or near zero for a couple of years, warning that long-run trends that had dragged inflation down before the pandemic would again come to dominate. But “in contrast, a number” of Fed officials said that rates would need to increase next year, and that “some of these participants saw inflation as likely to remain elevated in 2022 with risks to the upside.”
The committee as a whole fretted about supply chain disruptions, which have been pushing inflation higher and curbing growth. They discussed several bottlenecks, including in the housing industry.
“Participants noted that residential construction had been restrained by shortages of materials and other inputs and that home sales had been held back by limited supplies of available homes,” the minutes showed. Later, they added that “firms in a number of industries were facing challenges keeping up with strong demand due to widespread supply chain bottlenecks as well as labor shortages.”
And officials noted that they might take time to fade.
“Most participants saw inflation risks as weighted to the upside because of concerns that supply disruptions and labor shortages might last longer and might have larger or more persistent effects on prices and wages than they currently assumed,” the minutes showed.
“Participants noted that their district contacts generally did not expect these bottlenecks to be fully resolved until sometime next year or even later.”
Consumer prices jumped more than expected last month, data released on Wednesday showed. The Consumer Price Index climbed 5.4 percent in September from a year earlier, faster than its 5.3 percent increase through August. From August to September, the index rose 0.4 percent, also above expectations.
Housing prices rose, and food — especially meat and eggs — cost consumers more. When volatile food and fuel prices are stripped out, inflation is still rapid, at 4 percent in the year through last month.
Fed officials have repeatedly said they expect price gains to moderate as the economy gets back to normal, but they have stuck an increasingly wary tone as inflation has been slow to moderate.
“I believe, as do most of my colleagues, that the risks to inflation are to the upside, and I continue to be attuned and attentive to underlying inflation trends,” Richard H. Clarida, the Fed’s vice chair, said during a speech Tuesday.
Among the causes for concern: Inflation expectations seem to be picking up, at least by some measures.
The Federal Reserve Bank of New York’s Survey of Consumer Expectations showed this week that medium-term inflation expectations — those for three years ahead — climbed to 4.2 percent in September from 4 percent in August. That is the highest level since the series started in 2013. Short-term expectations jumped to 5.3 percent, also a new high.
President Biden said Wednesday afternoon that his administration is taking steps to untangle supply chains and clear disruptions that have threatened the holiday shopping season, including moving a key port and some large retailers toward round-the-clock operations.
Speaking from the White House, Mr. Biden said the country must “take a longer view” and invest in shoring up supply chain vulnerabilities that have been exposed by the Covid-19 pandemic.
The remarks came as the White House sought to spotlight its efforts to address the problems in ports, factories and shipping lanes that have helped produce shortages, long delivery times and rapid price increases for food, televisions, automobiles and much more.
The resulting inflation has chilled consumer confidence and weighed on Mr. Biden’s approval ratings. On Wednesday, the Labor Department announced that the Consumer Price Index, a key reading of monthly inflation, jumped 5.4 percent in September when compared with the prior year, raising the stakes for the White House and the Federal Reserve.
Mr. Biden cheered an announcement that the Port of Los Angeles will begin operating around the clock as his administration struggles to relieve growing backlogs in the global supply chains that deliver critical goods to the United States.
“Today’s announcement has the potential to be a game-changer,” Mr. Biden said, but added that its success would depend on private retailers taking steps to more rapidly move products from ports to stores around the country.
Administration officials say that they have brokered a deal to move the Port of Los Angeles toward 24/7 operations, joining Long Beach, which is already operating around the clock, and that they are encouraging states to accelerate the licensing of more truck drivers. UPS, Walmart and FedEx will also announce they are moving to work more off-peak hours.
Mr. Biden’s team, including a supply chain task force he established earlier this year, is working to make tangible progress toward unblocking the flow of goods and helping the retail industry return to a prepandemic normal.
But it is unclear how much the White House’s efforts can realistically help. The blockages stretch up and down supply chains, from foreign harbors to American rail yards and warehouses. Companies are exacerbating the situation by rushing to obtain products and bidding up their own prices. Analysts say some of these issues may last into late next year or even 2023.
Reporters peppered Jen Psaki, the White House press secretary, with questions Wednesday about lingering effects on holiday shopping, including whether she could guarantee it would not be disrupted by supply chain issues. “We cannot guarantee,” she said. “What we can do is use every lever at the federal level to reduce delays.”
Social Security benefits will increase 5.9 percent in 2022, the Social Security Administration said on Wednesday, the biggest boost in 40 years as prices for food, cars and rent continue to surge.
The increase, known as a cost of living adjustment, is the largest since 1982 and will affect nearly 70 million recipients, according to data from the Social Security Administration. It comes as consumer prices in the United States have seen their sharpest increase in years. The adjustment is tied to the Labor Department’s Consumer Price Index, which rose 5.4 percent in September from a year earlier.
Inflation has accelerated this year as the global economy recovers from pandemic-driven lockdowns. Early on, the price gains were driven by rebounding airfares, rates and other items that had seen a collapse in demand in 2020. More recently, shortages of products or challenges transporting them to consumers have added to the gains.
Consumer Price Index data released on Wednesday showed that prices jumped more than expected last month. The price gains came as housing prices firmed, and as food — especially meat and eggs — cost consumers more.
The maximum amount of earnings subject to the Social Security tax will also increase to $147,000 from $142,800, the administration said.
Jo Ann Jenkins, chief executive of AARP, said the increase was necessary for families and beneficiaries to keep up with rising costs.
“The guaranteed benefits provided by Social Security and the COLA increase are more crucial than ever as millions of Americans continue to face the health and economic impacts of the pandemic,” Ms. Jenkins said in a statement released after the announcement.
Among the beneficiaries, 37 percent of men and 42 percent of women receive at least half of their income from Social Security, according to an administration fact sheet. Nearly nine out of 10 people age 65 and older were receiving a benefit as of the end of last year.
Older Americans, people with disabilities and children and spouses of recipients who are deceased are eligible for the benefits.
The federal government’s top auto-safety regulator is looking into why Tesla did not issue a recall last month when it updated software in its cars to improve their ability to spot stopped emergency vehicles such as police cars and fire trucks.
The regulator, the National Highway Traffic Safety Administration, has also ordered Tesla to provide data about its Full Self-Driving software, which it has allowed a small set of owners to test on public roads.
NHTSA opened a formal investigation over the summer into 12 crashes in which Tesla cars operating in Autopilot mode — a driver-assistance system that can steer, brake and accelerate a car on its own — failed to detect stopped emergency vehicles that had their lights flashing in low light.
In a letter to Tesla on Tuesday, the agency reminded the company that federal law requires automakers to initiate recalls if they find defects that pose a safety risk.
NHTSA told the company to provide detailed information on a software update sent in late September that modified Autopilot and enhanced its ability to detect emergency lights.
The letter told Tesla to state whether it intends to issue a recall related to the update, and if not, any legal or technical reasons that it declines to do so.
“Any manufacturer issuing an over-the-air update that mitigates a defect that poses an unreasonable risk to motor vehicle safety is required to timely file an accompanying recall notice,” the agency said in the letter.
The letter was sent by Gregory Magno, the chief of NHTSA’s vehicle defects division in its office of defects investigation, to Eddie Gates, Tesla’s director of field quality.
NHTSA also ordered Tesla to provide the number of owners who have been given Full Self-Driving software and copies of any agreements the company has with the owners. Tesla’s chief executive, Elon Musk, has described Full Self-Driving as a technology that would allow cars to drive autonomously in most circumstances. But the software is not capable of piloting a car without active engagement of a human driver.
Blackstone, the giant private equity firm, will require employees who want to work in its London office to be vaccinated beginning next week, as the American company takes a more forceful approach to vaccinations than many other businesses in Britain.
Across the United States, vaccine mandates, which require employees to be inoculated to remain in their jobs, are becoming increasingly common ahead of a rule by President Biden that will apply to companies with more than 100 employees.
But in Britain, data protection and employment discrimination laws have prevented companies from mandating their own “no jab, no job” policies and have made it harder to physically separate unvaccinated workers. Instead, companies have been advised to encourage vaccinations rather than enforce them.
Beginning Oct. 18, only fully vaccinated employees will be allowed to work at Blackstone’s London office, according to a memo seen by The New York Times. The company is asking employees to voluntarily upload proof of vaccination to an internal system. Though it has been encouraging its staff to return to the office, working in the office is voluntary. Vaccinated employees will still need to have a negative Covid test to go to the office, where more than 400 people work.
“The health and well-being of our people is our number-one priority,” Blackstone said in a statement. “Data shows that vaccines prevent serious illness or hospitalization and we believe that this is the best way, for now, to help protect our employees and their families.”
This is one of the challenges facing international companies as they bring workers back to their offices, with employees facing different requirements in different countries. In the United States, Blackstone asked vaccinated dealmakers to return to the office three months ago. An American law firm, Morrison & Foerster, reportedly said in August that its London staff needed to be vaccinated to return to the office in mid-September.
Requiring vaccinations to return to a British office is “not entirely unheard-of but not too many companies that I’m aware of have taken that step yet,” said Holly Cudbill, an employment lawyer at Blake Morgan. “At the moment, the focus very much has been on encouragement rather than mandating that people are vaccinated.” But companies have been asking if this is something they can, or should, do, she added.
One of the challenges in mandating vaccinations is that it would require proof of a jab, and medical records have special protection under British data privacy laws, which means there needs to be a good legal reason to hold this information.
Another related concern is that if someone isn’t vaccinated for medical or religious reasons and then they are treated differently from other staff because they are not in the office, the company could be accused of discrimination. But if companies can show they have a justifiable reason for collecting this data and the request is a proportionate measure to achieve a legitimate aim, then the legal risks are diminished, said Lucy Lewis, an employment lawyer and partner at Lewis Silkin.
“The challenge for employers is, is it justifiable if you’re taking other Covid-secure measures within the business?” Ms. Lewis said. “For example, if you’re continuing to retain social distancing, if there’s an element of mask wearing, can you satisfy that test that requiring vaccination is reasonable within an organization?”
It’s more common for companies to ask people to be double-vaccinated or show evidence of a negative Covid test, currently freely available in Britain, to go into the office, she said. She doesn’t expect requiring vaccines to work in the office to become the norm in Britain.
“Whether it’s possible comes down to you being able to essentially demonstrate to a court that doing it was necessary within your business,” Ms. Lewis said. “In types of businesses where you’ve got a lot of very vulnerable people it’s much more likely to be reasonable because the risk to those people is that much greater.”
The furthest Britain has gone in making vaccines compulsory for work is in nursing homes. The government has said anyone working or volunteering in nursing homes, unless medically exempt, must be vaccinated beginning Nov. 11. Even to take this step, Parliament had to pass a new piece of legislation, which is now the subject of legal challenges.
In Britain, vaccine uptake is high, with 78 percent of the population over the age of 12 vaccinated. But there are disparities across age groups, with younger cohorts less likely to be vaccinated. In the United States, there is some evidence that vaccine mandates have increased rates above 90 percent within companies.
Businesses can decide who does and doesn’t enter their premises, especially for health and safety reasons. But in the case of the coronavirus, if other measures like mask-wearing, ventilation and social distancing can reduce the risks, then it’s difficult to justify barring people’s entry, Ms. Cudbill said.
“I think that they can justify it, but they just need to think about how and make sure it’s not just a knee-jerk reaction,” she said. “Because it will be challenged. There’s absolutely no doubt.”
The Labor Department proposed rule changes on Wednesday that would make it easier for retirement plans to add investment options based on environmental and social considerations — and make it possible for such options to be the default setting upon enrollment.
In a reversal of a Trump-era policy, the Biden administration’s proposal makes clear that not only are retirement plan administrators permitted to consider such factors, it may be their duty to do so — particularly as the economic consequences of climate change continue to emerge.
Martin J. Walsh, the secretary of labor, said that the department consulted consumer groups, asset managers and others before writing the proposed rule, and that the change was considered necessary because the old one appeared to have a “chilling effect” on using environmental, social and governance — better known as E.S.G. — when evaluating investments.
“If these legal concerns were keeping fiduciaries on the sidelines, it could mean worse outcomes for workers and retirees,” Mr. Walsh said in an interview.
The new regulations would also make it possible for funds with environmental and other focuses to become the default investment option in retirement plans like 401(k)s, which the previous administration’s rules had prohibited. But the rule would not permit plan overseers to sacrifice returns or take on greater risks when analyzing potential investments with a focus on E.S.G., Labor Department officials said.
Aron Szapiro, head of retirement studies and public policy at Morningstar, said the proposed rule change would help bring retirement plans more in step with how the broader investment industry considers E.S.G. factors.
“The Trump regulation was poorly constructed, the economic analysis was deeply flawed and I think it was really out of step with what are increasingly common practices that are designed to incorporate E.S.G. as financially material pieces of information,” he said.
Under the Employee Retirement Income Security Act of 1974, known as ERISA, retirement plan administrators must act solely in the interest of the plan’s participants. Investments that focus on environmental, social and governance have been permitted, but only if they are expected to perform at least as well as alternatives that take similar levels of risk.
That has become known as the “tiebreaker” or “all things being equal” standard, a guiding principle that has effectively remained the same through Republican and Democratic administrations, though they have interpreted it differently.
The proposed change indicates that plan managers are allowed to consider E.S.G. factors in their initial analysis of investments instead of only at the very end — a change that Labor Department officials argued still maintains that principle, because managers still are not permitted to sacrifice returns for those kinds of ancillary benefits.
For example, the proposed rule said that accounting for climate change, “such as by assessing the financial risks of investments for which government climate policies will affect performance” can benefit retirement portfolios by mitigating longer-term risks.
“If an E.S.G. factor is material to the risk-return analysis, that is something we think fiduciaries should be taking into account,” Ali Khawar, an acting assistant secretary in the department, said in an interview. “That carries different weight than five or 10 or 15 years ago,” he said, given the increase in data quantifying the risks of ignoring E.S.G. and the benefits of taking them into account.
The investment category has grown significantly in recent years. Total assets in E.S.G. funds rose to $17.1 trillion at the start of 2020, up 42 percent from the start of 2018, according to the U.S. SIF, a nonprofit focused on sustainable investing. That investment total represents one in three dollars under professional management.
Just a small fraction of those investments are held by retirement plan investors, a U.S. SIF report said, even as interest is rising, particularly among younger investors.
The growing interest has prompted the Securities and Exchange Commission to seek public comment on requiring companies to disclose climate risks.
The Biden administration also proposed changes that would reverse another Trump-era rule, which required retirement plan administrators to consider a complex list of principles before casting proxy votes on shareholder proposals, which may have discouraged plans from voting altogether. If fiduciaries decided to vote, and the rule makes clear that isn’t required, they must only support causes and goals in the plan’s financial interest.
The proposal would remove that language, Labor Department officials said, and largely allow plan fiduciaries to decide when “it is or isn’t appropriate to act,” Mr. Khawar said.
The Biden administration had already signaled its plans: Just two months after the Trump-era rules took effect in January, the Biden administration said it would not enforce them and that a new proposal would be forthcoming.
Stakeholders will have 60 days after the proposal is published in the Federal Register to comment. A final regulation is typically issued after the department reviews the comments.
A union that represents roughly 150,000 entertainment workers gave Hollywood companies an ultimatum on Wednesday: You have five days to address demands about rest periods, meal breaks and pay before a strike begins.
The International Alliance of Theatrical Stage Employees said members would begin walking picket lines on Monday — halting production in Hollywood — unless an agreement was reached for a new contract that covers about 60,000 members. The previous three-year contract expired in July. Renewal negotiations started in May and stalled on Sept. 20, when studios declined to counter the union’s most recent proposal and IATSE, as the union is known, sought strike authorization from members. The results of the authorization vote, announced last week, were absolute. Nearly 99 percent of the votes were in favor of a strike.
Talks immediately resumed between IATSE and the Alliance of Motion Picture and Television Producers, a bargaining entity for studios, including Amazon, Apple and Netflix. But there has been little movement.
“The pace of bargaining doesn’t reflect any sense of urgency,” Matthew Loeb, the union’s president, said in a statement. “Without an end date, we could keep talking forever. Our members deserve to have their basic needs addressed now.”
A spokesman for the studio alliance, Jarryd Gonzales, said in an email, “There are five whole days left to reach a deal, and the studios will continue to negotiate in good faith in an effort to reach an agreement for a new contract that will keep the industry working.”
IATSE represents camera operators, cinematographers, script coordinators, prop makers, set builders, editors, makeup artists and other behind-the-scenes specialists. Members are asking for longer rest periods between shifts and on weekends, better pay for streaming-service work, higher wages for coordinators and assistants on all productions and strengthened requirements for meal breaks during marathon shoots.
When writers struck in 2007, studios used a backlog of scripts to keep shooting. If IATSE walks out, production will halt almost immediately: You can’t do much of anything in Hollywood without a camera operator.
Delta Air Lines on Wednesday reported a $1.2 billion profit for the three months ending in September, the latest sign of the resilience of the airline industry’s recovery, despite being slowed somewhat by the spread of the highly contagious Delta variant of the coronavirus.
Even after excluding temporary factors, such as federal pandemic aid, Delta generated a profit of $194 million.
“As the recovery progresses, I am confident in our path to sustained profitability,” Delta’s chief executive, Ed Bastian, said in a statement.
The airline offered optimism for the months ahead, saying it expects to sell about 80 percent as many tickets in the final three months of the year as it did in 2019, driven by strong holiday demand. Delta also said it expected to collect at least 70 percent as much revenue in the fourth quarter as in 2019. During the third quarter, it collected 63 percent as much revenue as in 2019.
Rising fuel prices will make it harder to turn a profit in the final three months of the year, and the airline expects a modest loss as a result. The airline expects jet fuel prices to rise to $2.25 to $2.40 per gallon in the coming months, up from $1.94 over the summer.
Delta, the only large carrier that has not announced a vaccine requirement for its workers, also said about 90 percent of its employees had been vaccinated as of Tuesday. The airline recently said it planned to charge unvaccinated workers $200 more per month for health insurance.
United Airlines was among the first major corporations to announce such a requirement and said recently that nearly all of its 67,000 employees had been vaccinated. American Airlines and Southwest Airlines have since announced mandates under pressure from President Biden, who ordered federal contractors to get vaccinated by early December.
The aviation industry had a strong summer as Americans emboldened by vaccinations started to travel again, mainly within the United States. But the spread of the Delta variant recently stifled that momentum, especially as companies delayed office reopenings and, subsequently, business travel.
With domestic leisure travel virtually restored, airlines are now waiting on the rebound in corporate and international travel to accelerate. The Biden administration plans to lift travel restrictions for foreigners next month, promising to revitalize a lucrative travel corridor between the United States and Europe.
Workers are also trickling back to offices. Corporate travel volume improved in July, but froze at about 40 percent of 2019 levels, Delta said. That has started to pick back up in recent weeks, driven by small and midsize business, the airline said. In the last week, domestic corporate travel was nearly 50 percent restored, the airline said.
Overall, travel has been relatively steady for weeks, with about 78 percent as many people flying over the past seven days, compared with a similar period in 2019, according to Transportation Security Administration passenger screening data. That’s only slightly lower than the high of 86 percent reached over the Fourth of July holiday, the peak of summer travel.
Delta wasn’t alone in expressing optimism for the coming months. Last week, United Airlines said it planned to offer 3,500 daily flights in December, the most of any month since the pandemic began and 91 percent as many flights as the airline offered in the same month in 2019. Flight searches for holiday travel were up 16 percent from the same time in 2019, the airline said.
“We’re seeing a lot of pent-up demand in our data and are offering a December schedule that centers on the two things people want most for the holidays: warm sunshine and fresh snow,” said Ankit Gupta, United’s vice president of network planning and scheduling.
Delta is the first major airline to report financial results for the third quarter. American, United and Southwest are all scheduled to announce earnings next week. American provided a preview on Tuesday, saying it expects to report a profit, mainly because of a temporary bump from federal pandemic aid. American also said it expected to offer slightly more seats in the final three months of the year than it did over the summer.
JPMorgan Chase’s profit was better than expected in the third quarter, fueled by a record three-month run for its deal makers who advise on mergers and acquisitions.
The Wall Street bank on Wednesday reported earnings of $11.7 billion, or $3.74 per share, surpassing analyst estimates. Investment-banking fees surged 52 percent on a hot market for deals and initial public offerings. In the consumer division, debit and credit card spending rose 26 percent, the bank said in a statement.
It was enough for Jamie Dimon, the bank’s chief executive, to strike a hopeful note for the next year of the recovery. Growth has been fairly good, he said on a conference call, even with supply chains still in disarray and the coronavirus still causing problems for businesses and consumers.
“There’s a very good chance, a year from now, we’re not going to be talking about supply chains at all,” he said. “And I think there’s a very good chance, a year from now, Covid will be endemic, as opposed to a pandemic.”
JPMorgan’s investment bankers advised companies on 157 deals with a combined value of $331 billion in the third quarter. It also worked on several transactions with a value of more than $1 billion this year, including a merger between AT&T’s WarnerMedia and Discovery, and Dell’s spinoff of its 81 percent stake in software maker VMware.
The strength in investment banking bodes well for firms that lean heavily on their Wall Street operations, such as Goldman Sachs and Morgan Stanley, said David Konrad, an analyst at KBW.
JPMorgan executives also expressed optimism about the future because delinquencies on payments remained very low. The bank released $2.1 billion from a rainy-day fund it had stockpiled in case of a surge in loan defaults, which never materialized, thanks partly to government stimulus efforts.
“Two years ago, we were facing Covid, virtually a great depression,” Mr. Dimon told analysts. “That’s all in the back mirror, which is good.”
The earnings from JPMorgan — the first of the major U.S. banks to report — were a good sign as companies across all industries begin to release their results.
“JPMorgan has kicked off reporting season, setting a clearly positive tone,” Susan Roth Katzke, an analyst at Credit Suisse, wrote in a report. Four others lenders — Bank of America, Wells Fargo, Citigroup and Morgan Stanley — will post earnings on Thursday, with Goldman Sachs reporting on Friday.
Investors will pay close attention to bankers’ pronouncements on the economic outlook, which have remained relatively optimistic despite a bumpy economic recovery in recent months. Borrowing by consumers and businesses will be a key indicator of the prospect of future earnings, because more borrowing means more money from interest payments.
Demand is beginning to pick up for credit cards and commercial real estate lending, said Jeremy Barnum, JPMorgan’s chief financial officer.
“We’re certainly hoping for, and planning for, some loan growth in 2022,” he said.
Hasbro announced late Tuesday that Brian Goldner, its longtime chief executive who has been credited with helping the toymaker expand into international markets and building ties with the entertainment industry, died at age 58, two days after he went on medical leave.
Mr. Goldner disclosed in August 2020 that he was being treated for cancer. He joined Hasbro in 2000, and was named chief executive in 2008 and chairman in 2015.
The company’s interim chief executive, Rich Stoddart, described Mr. Goldner as “the heart and soul of Hasbro.” Edward M. Philip, the company’s lead independent director, said Mr. Goldner’s “inspiring leadership and exuberance left an indelible mark on everything and everyone he touched.”
Over the past 10 years, Hasbro’s revenue has grown to overcome that of its rival Mattel, reaching $5.5 billion in 2020.
Hasbro’s range of products includes Monopoly, My Little Pony and Transformers. Mr. Goldner was lauded for expanding the company’s reach into Hollywood with deals that turned properties like G.I. Joe and Battleship into movies and television programs.
“It’s a core-brand strategy,” Mr. Goldner told The New York Times in 2012. “We asked which brands have the potential to be reinvented and reignited.”
Turning its intellectual properties into entertainment franchises paid off for the toymaker. “Our four movies made $3 billion at the box office,” he said at the time. “But we made $1.6 billion in sales of merchandise because we own the I.P. and all the merchandising rights.”
At points in recent years, Hasbro, based in Pawtucket, R.I., was said to have been in talks to acquire DreamWorks Animation, and Mattel, the maker of Barbie dolls.
More recently, Hasbro has introduced an e-commerce site where it can offer fans ways to order limited-edition toys.
New York deliveristas, or delivery workers, are organizing watch groups to protect themselves from bike thefts and assaults. “If we don’t do this, no one else will protect us,” one worker said. READ THE ARTICLE →
Stocks on Wall Street rose on Wednesday, with the S&P 500 ticking up 0.3 percent. The Nasdaq composite gained 0.7 percent.
The Consumer Price Index climbed 5.4 percent in September compared to the year before as supply shortages continue to disrupt businesses. The index rose 0.4 percent from August to September.
The gauge of inflation comes as the Federal Reserve is planning to remove its support economy with expectations this year’s rapid inflation will fade. President Biden announced on Wednesday that the Port of Los Angeles will operate 24/7 in push to untangle pandemic-related supply-chain problems, which are weighing on his approval ratings as they push prices higher.
Investors also reviewed minutes from the Fed’s September meeting of the Federal Open Market Committee, indicating officials were preparing to begin slowing down monetary policy support as soon as the middle of November. The minutes showed that meeting participants debated when they might need to raise rates amid rising inflation risks.
Delta Air Lines stock fell 5.7 percent after the airline stated in it financial report on Wednesday that rising fuel prices will make it harder to turn a profit in the final three months of the year.
European stock indexes rose, with the Stoxx Europe 600 closing 0.7 percent higher.
Number of People Who Left Their Jobs Voluntarily by Month
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Nearly 4.3 million workers voluntarily quit their jobs in August, the Labor Department said Tuesday. That was up from four million in July and is by far the most in the two decades the government has been keeping track. The explosion of quitting is the latest evidence that the balance of power in the labor market has swung toward workers, at least temporarily.
The number of open jobs actually fell somewhat in August, to 10.4 million from a record 11.1 million in July, as the latest wave of the pandemic took a bite out of consumer demand, especially in the service sector. But the slowdown did little to ease the hiring logjam: There were more open jobs than unemployed workers in August. READ MORE →
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Google responded to a lawsuit filed by Epic Games, the creator of the wildly popular video game Fortnite, by countersuing, accusing the game maker of a breach of contract. In its suit, which it filed on Monday, Google said Epic Games broke its agreement and introduced an update to its app that used its own payment system to circumvent Google’s billing system and in-app commissions. Google claimed that the move was part of a premeditated plan by Epic to draw the search giant into an antitrust legal fight.
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Boeing said on Tuesday that it would require all of its 125,000 U.S. employees to be vaccinated by Dec. 8, the deadline President Biden has set for federal contractors and their employees to be immunized. “We continue to prioritize the health and safety of all of our employees,” Boeing said in a statement. The company said it would allow some exemptions for medical or religious reasons.
Erin Griffith (@eringriffith) and Erin Woo (@erinkwoo), two of our tech reporters, are covering the trial of Elizabeth Holmes, who dropped out of Stanford University to create the blood testing start-up Theranos at age 19 and built it to a $9 billion valuation and herself into the world’s youngest self-made female billionaire — only to flame out in disgrace after Theranos’s technology was revealed to have problems.
Follow along here or on Twitter as she is tried on 12 counts of wire fraud and conspiracy to commit wire fraud. The trial is generally held Tuesdays, Wednesdays and Fridays.
1 hour ago
Erin Griffith
On cross-exam, Holmes lawyer Kevin Downey is building up how big of a deal this effort was to Walgreens. Miquelon said Walgreens hired a firm to come up with a list of 180 start-ups working on lab development, which the company evaluated.
1 hour ago
Erin Griffith
The fee hinged on the partnership hitting certain milestones, but in August 2013, Holmes emailed Walgreens asking to accelerate the payment and send the money sooner.
1 hour ago
Erin Griffith
WOW this might be public info but I wasn’t aware of it. Walgreens paid a $100 million “innovation fee” to Theranos for the privilege of partnering with them. The actual investment in equity only came in the form of a $40 million convertible note.
2 hours ago
Erin Griffith
🩸 After a two-hour delay caused by jurors raising issues about their questionnaires being made public, testimony in the Elizabeth Holmes trial (or, per the judge, “Our Holmes Matter”) is beginning with Wade Miquelon, former C.F.O. of Walgreens.
22 hours ago
Erin Griffith
Miquelon describes the art of credibility trading — in an email selling Theranos to his colleagues he notes Larry Ellison’s endorsement. The prosecutors also make the point that Theranos was seven years along — pre-empting the “just a young start-up” defense.
Today in the On Tech newsletter, Shira Ovide writes that young tech companies like DoorDash and Instacart are becoming addicted to ads — to our detriment and maybe theirs.
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