Skip to content

This week in business: a job recovery

    The March report continued strong gains in recent months, with US employers adding 431,000 jobs. The unemployment rate fell and is now slightly higher than before the pandemic at 3.6 percent. The economy has recovered more than 90 percent of the 22 million jobs lost in the spring of 2020, far exceeding initial forecasts. The March showing could help tell a story about changing attitudes to the coronavirus, especially as companies continue to plan for return to the office – the proportion of office workers doing their work remotely fell to 10 percent in March – and as tourism and in-personal entertainment have largely resumed. The public “may be moving towards the idea that ‘the Covid era’ of the US economy is over,” said one economist.

    In an effort to bring down energy prices, which have skyrocketed since Russia went to war in Ukraine, President Biden said on Thursday the United States will release up to 180 million barrels of oil from its strategic reserves in the coming months. The announcement had the desired effect in the short term: Oil prices fell Wednesday evening, when Mr. Biden’s plans were first reported, and remained lower Thursday after the president spoke of record crude oil releases. And on Friday, the International Energy Agency said its 31 member states had agreed to a new release of emergency oil reserves. However, OPEC Plus, a group of oil producers that includes Russia, said it would stick to its previous plan for modest monthly increases.

    Toyota Motor said new car sales fell 15 percent in the first quarter as chip shortages persisted and production slowed. This isn’t just Toyota’s problem: General Motors also announced a significant drop in sales, and other automakers are also reported to report disappointing numbers as they continued to contend with shortages due to tangled supply chains and new challenges from the Russian invasion of Ukraine. But Toyota did see strong demand for its hybrid models, and reports expected from Tesla and Ford Motor in the coming days could provide an indication of whether 2022 will be a tipping point for electric vehicles. Ford is one of those trying to compete with Tesla and diversify its electric car offerings to appeal to a wider range of consumers — Tesla’s minimalist aesthetic isn’t for everyone, one argument goes.

    Workers from a huge Amazon warehouse union on Staten Island voted to unionize in a historic labor victory, becoming the first Amazon location in the United States to unionize. Workers cast 2,654 votes for the union and 2,131 against. The result of a union vote at another Amazon warehouse, in Bessemer, Ala., is pending, and a final count is expected in the coming weeks. The union in Bessemer appears to be heading for a close loss, but the election is much closer than last year, when workers opposed the union by a ratio of more than 2-to-1. The unexpected strength of union support in both elections portends more union struggles for Amazon as warehouse workers, such as Starbucks workers organizing, may be inspired to launch union campaigns in their own locations.

    Facing pressure from Democrats and warnings about losses in the midterm elections, President Biden may soon announce another extension of the pause on student loan payments. The hiatus began under President Donald J. Trump early in the pandemic and was extended several times during the administrations of both Mr. Trump and Mr. Biden. Mr Biden last extended the break in December amid a spate of coronavirus cases. In anticipation of the new May 1 deadline, more than 90 Democrats in Congress have signed a letter urging Biden to push it back. The call for him to cancel his student debt is also increasing.

    The Federal Reserve will release the minutes of its March policy meeting this week, and Fed chairman Jerome H. Powell has suggested they include plans for the central bank to reduce its balance sheet by nearly $9 trillion. Known as quantitative tightening, this is a maneuver the Fed may consider in times of low unemployment, rising wages and general growth. But the move, which could involve selling bonds, for example, could drastically reduce the money supply, raise interest rates and dampen lending and investment. Coupled with the Fed’s expected rate hikes, the possibility of a balance sheet shortening is leading to concerns that the central bank will hit the brakes too hard and plunge the country into recession. That fear is exacerbated by the bond market, which has had a terrible start to the year and is potentially signaling that a significant economic slowdown is imminent.

    President Biden’s budget proposal included a tax on billionaires. The S&P 500 rose 3.6 percent in March, regaining more than half of its losses from its lowest point this year. And Jen Psaki, the White House press secretary, is reportedly in talks to leave for MSNBC.