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The Fed’s Favorite Price Index Rose 4 Percent. What Comes Next?

The Federal Reserve’s preferred measure of inflation climbed by 4 percent in June compared with a year earlier, as a rebounding economy and strong demand for goods and services helped to push prices higher.The gains in the Personal Consumption Expenditures inflation index were the fastest since 2008, but in line with economists’ expectations. That rapid pace is not expected to last — and how much and how quickly it will fade is the economic question of the moment.Inflation has been surprisingly quick this year. Economists knew prices would post strong increases as they were measured against weak figures from 2020, when …

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Is the U.S. Economy Too Hot or Too Cold? Yes.

Here’s a riddle: What is both too hot and too cold? The answer: the United States economy in the summer of 2021.That is the common thread that comes through in economic data; shifts in financial markets; anecdotes from businesses; and experiences of ordinary people who are simultaneously enjoying higher incomes and facing higher prices and shortages.In the mid-2021 economy, employers are offering higher pay to attract scarce workers; airports and car lots are bustling; and a G.D.P. report due out next week will probably show blockbuster growth. It is also an economy in which inflation is …

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Inflation? Not in Japan. And That Could Hold a Warning for the U.S.

TOKYO — In the United States, everyone is talking about inflation. The country’s reopening from the coronavirus pandemic has unleashed pent-up demand for everything from raw materials like lumber to secondhand goods like used cars, pushing up prices at the fastest clip in over a decade.Japan, however, is having the opposite problem. Consumers are paying less for many goods, from Uniqlo parkas to steaming-hot bowls of ramen. While in the United States average prices have jumped by 5.4 percent in the past year, the Japanese economy has faced deflationary pressure, with prices dipping by 0.1 percent in May from the previous …

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Inflation Rose in June With C.P.I. Up 5.4 Percent

The Fed targets 2 percent annual price gains on average over time, a goal it defines using a different index. Still, the C.P.I. is closely watched because it comes out more rapidly than the Fed’s preferred gauge and it feeds into the favored number, which has also accelerated.Republicans have pointed to rapid price gains as a sign of the Biden administration’s economic mismanagement, and an argument against the kind of additional spending that President Biden has called for as part of his $4 trillion economic agenda, including investments to fight climate change, bolster education and improve child …

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The Bond Market Is Telling Us to Worry About Growth, Not Inflation

“The overriding concern being reflected in the bond market is that peak growth has been reached, and the benefits from fiscal policy are starting to fade,” said Sophie Griffiths, a market analyst with the foreign exchange brokerage Oanda, in a research note.The evidence of a more measured growth path was evident, for example, in a report from the Institute for Supply Management this week. It showed the service sector was continuing to expand rapidly in June, but considerably less rapidly than it had in May. Anecdotes included in the report supported the idea that supply problems were holding back …

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Why Is There a Blue Crab Shortage in Maryland?

“We send our kids to school, we send them to college,” he said. “A person doesn’t go to high school, grade school or community college for some type of fishing and become a waterman. You don’t have your kids educated to pick crabs.” Seasonal workers, he said, have traditionally filled a critical labor gap.Heather Mizeur, a Democrat running for Congress from a district on Maryland’s Eastern Shore, said the Biden administration can help address the labor shortage by authorizing more of the temporary visas. “The seafood industry out here on the shore desperately needs a reliable …

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Gas Price Increase Poses Challenge to U.S. Economy

Policymakers at the Federal Reserve have said they expect the increase in inflation to be short-lived, and they are unlikely to change that view based on an increase in energy prices, which are often volatile even in normal times, said Jay Bryson, chief economist at Wells Fargo.But if rising oil prices lead consumers and businesses to believe that faster inflation will continue, that could be a harder problem for the Fed. Economic research suggests that prices of things that consumers buy often, such as food and gasoline, weigh particularly heavily on their expectations for inflation. With public opinion surveys …

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Oil Nations Again Fail to Reach Deal as U.A.E. Demands Higher Quota

OPEC, Russia and other major oil producers failed to reach an agreement on proposed production increases on Monday — a third straight day of scheduled meetings without a deal.The main sticking point has been the insistence of the United Arab Emirates, an important OPEC member, on a revision of its output quota. Efforts at mediation did not make enough progress for Monday’s meeting to even begin. OPEC said in a news release that the timing of its next meeting would be “decided in due course.”Some analysts say that OPEC Plus, the 23-nation alliance of oil producers, will likely …

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How The Restaurant Delivery Business Holds Strong as In-Person Dining Returns

OAKLAND, Calif. — Last fall, as the weather cooled and coronavirus cases began to rise, May Seto, the owner of Grand Lake Kitchen in Oakland, refurbished a used pizza oven and started a takeout and delivery pizza business out of an extra kitchen where she had cooked for catering and private events.Now, one of Grand Lake’s two locations serves as a hub for couriers picking up the restaurant’s cafe fare and pizzas. Ms. Seto also has plans to rebuild the entryway at her other location to provide more space for the flocks of delivery drivers picking up food.“ …

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Markets Work, but Untangling Global Supply Chains Takes Time

Now, there are higher prices for base materials like steel and aluminum. There are suppliers being forced to raise wages sharply to keep assembly lines operating. There are semiconductor manufacturers stretched too thin to provide enough computer chips to make as many cars as consumers wish to buy. There have even been shortages of resin, needed in the plastics that are part of a car, caused by Texas winter storms this year. And adding to it all, there are logjams of shipping capacity for materials imported from overseas.“It’s almost like a patient who’s fighting cancer and heart …

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