Employment data can show peak employment

This morning the Labor Department will report how many positions employers added to their payrolls in March. Economists expect a healthy profit. But how long can the labor market keep going?

Jobs may be nearing their moment when it’s as good as it can be. Employers put an average of half a million workers a month on the payroll last year, with some states near their lowest-ever unemployment rates. (“I’m in hot demand, baby,” a bartender in Nebraska told The Times.) But a number of economists say rising inflation and higher interest rates could soon send the job market into a lower gear. Goldman Sachs top economist Jan Hatzius predicts the hiring rate will slow to 200,000 per month over the next quarter and trend down from there.

The big problem is the lack of workers. Well before the pandemic, the percentage of Americans participating in the labor force — those who had jobs or were actively looking for a job — had been declining. That had a lot to do with demographics, namely with the boomers in retirement. The participation rate has recovered from its pandemic low, but still has some way to go to regain pre-pandemic levels, let alone the higher rates of previous decades. If the long-term trend of falling participation rates continues, “there won’t be enough people to fill those jobs,” Joel Naroff of Naroff Economics told DealBook.

The pandemic accelerated the decline in labor force participation for all workers, not just older ones. It has also changed attitudes towards traditional ways of working. A recent survey by work force management firm MBO found that 30 percent of full-time employees and 70 percent of independent contractors believe they would have more job security if they worked for themselves. This has risen sharply since 2020.

Will the economy regain all the jobs lost during the pandemic before the next downturn? The economy is missing around two million jobs before its pre-pandemic peak. Goldman’s Hatzius predicts it would take until January to close that gap. That is, barring the US slipping into recession first, a possibility that more market watchers have been discussing. “It’s a question of when we’re going to have the next recession,” Deloitte economist Daniel Bachman told DealBook. “Eventually, and that’s likely to happen in the next 12 months, we’re going to hit the top of the job market.”

For full coverage of today’s job report, see The Times special briefingwhich is updated throughout the day.

Mortgage rates hit a four-year high. The average rate on a 30-year fixed-rate mortgage rose to 4.67 percent, according to Freddie Mac, the highest level since 2018. Although rates were expected to rise, they have accelerated more than expected. But analysts said that shouldn’t deter buyers for now.

European leaders reject Moscow’s demand to pay for Russian gas in rubles. President Vladimir Putin has insisted foreign buyers open ruble accounts in Russian banks to this day, likely to prop up his country’s currency. But Germany and Italy, Russia’s two biggest energy customers in Europe, said they would continue to pay in euros. How the standoff will be resolved is unclear.

The Senate is nearing agreement on a $10 billion Covid relief package. That’s less than half of the White House’s original request, but would advance legislation that has stalled after President Biden asked for more money to fund vaccines and therapeutics.

In an election for the Amazon warehouse union, the “no” vote is just ahead. So far, 875 votes have been cast in favor of unionizing an Alabama warehouse, versus 993, although over 400 ballots are being contested. But at another Amazon warehouse on Staten Island, due to be completed today, pro-union votes are leading.

Scientists unveil the first fully mapped human genome. The new results, announced this week, fill in gaps and correct errors in the original 2003 map. The achievement, made possible by advances in gene sequencing technology, could lead to future breakthroughs in medical research.

As gasoline prices have risen in the United States in recent years, sales of hybrid, electric, and compact vehicles have also increased. With the average price per gallon at its highest level in many years, SUVs and other gas guzzlers are still being pushed by many.

It’s about compromises: A shortage of fuel-efficient cars has pushed up the price of available vehicles to the point that fewer consumers see the point in making the switch. This is also reflected in the subdued performance of the shares of many electric vehicle manufacturers. Despite a surge in gas prices, shares of Lucid and Rivian have underperformed the market this year. The same was true for Tesla until recently, with a big gain in recent days tied to a stock split.

EV investors are more concerned about supply than demand. Nickel, a major Russian export, is a key ingredient in electric vehicle batteries. Dan Ives, who covers EV stocks for Wedbush Securities, estimated that nickel shortages and other rising costs could force EV makers to raise prices by $1,200 per vehicle. This puts a strain on the industry, even if higher gas prices would ultimately lead to higher demand for electric cars. The pandemic is also still an issue: Volkswagen and Tesla temporarily closed factories in Shanghai this week due to a lockdown there.

Politicians are trying to do something about it. Yesterday, President Biden invoked the Defense Production Act to increase domestic production of minerals needed for electric vehicles, such as nickel, lithium and cobalt. The president said the country relies on “unreliable foreign sources” for many of the materials needed for the clean energy transition. The action is not expected to involve loans or outright purchases and may face opposition from environmentalists, including some in Biden’s own party.

— Joe Davis, Vanguard’s chief economist, on the outlook for the market as interest rates rise and Bonds get beat up.

Global mergers and acquisitions was worth just over $1 trillion in the first quarter, down 20 percent from the same period a year ago, according to Refinitiv. The dealmakers had expected a slowdown from the record pace of 2021 as rising inflation and the war in Ukraine made companies more cautious about what they do with their money.

But the data also shows a notable appetite for very large deals: The value and volume of $10 billion in acquisitions rose sharply in the first quarter, despite increased scrutiny from antitrust authorities and other factors fueling enthusiasm for smaller deals steamed

Can the power of pop culture be used to promote democracy? That question prompted the CAA Foundation — the philanthropic arm of Hollywood talent agency CAA — to team up with Democracy Works to create the Civic Alliance, a coalition of more than 1,250 corporations dedicated to election engagement. Members include Amazon, Coca-Cola, Levi’s, McDonald’s, Microsoft and Starbucks.

“2020 was a turning point,” Natalie Tran, executive director of the CAA Foundation, told DealBook. “I don’t think we can come back from this. Expectations of corporate citizenship have changed over the past two years.”

The origin story: Prior to the 2020 presidential election, Tran had sought guidance on civics through the company’s lens. She wanted to encourage engagement at CAA, but was no expert and quickly found that employees in her role at other companies were looking for similar information. They found little. “It’s impossible for organizations to respond to engagement expectations without tools and resources,” Tran said. The Alliance recently released the Corporate Civic Playbook, a guide it developed for members.

The playbook makes the business case for engagement. Civic engagement pays off through the performance of the coalition’s public companies: These companies outperformed the S&P 500 in the 2020 election campaign and in “the momentous moments for our democracy in the months that followed,” according to the coalition. “People always say democracy is good for business,” Tran said. “We wanted to prove that with data.”

The Midterms Generate “Energy for Presidential Elections” Tran said. The goal of the alliance is to enable civic engagement every day, in every election, down to the local level, Tran said: “We equip companies to build a sustainable culture of civic participation.”

Russia-Ukraine War

  • The US imposed sanctions on Russian tech companies in a bid to crack down on efforts to circumvent existing restrictions. (New York)

  • Moscow encourages illegal imports of Western goods. (Wealth)

  • The impact of sanctions on Russia is being felt in the startup world. (FT Lex)


  • The Justice Department is investigating at least one meeting between Activision Blizzard CEO Bobby Kotick and a stepson of Barry Diller as part of an investigation into unusual options trading days before the video game giant’s sale to Microsoft. (WSJ)

  • Automakers looking to compete with Tesla in electric vehicles are increasingly considering buying some of their suppliers to speed up research and production. (Reuters)

  • SPACs are slow to start in Hong Kong and Singapore equity markets. (FT)


  • US antitrust authorities reiterated their commitment to stricter scrutiny of tech giants. (Blumberg)

  • “The investigation that threatens to sink US solar power” (FT)

  • A plan by Florida Republican Senator Rick Scott that would impose income taxes on many Americans who don’t now pay is met with opposition from his own party. (New York)

  • “She took the photos of the White House. Trump moved to take the profit.” (New York)

The best of the rest

  • “This is what happens when globalization collapses” (NYT)

  • Some Ivy League universities downplay their low acceptance rates. (WSJ)

  • “Reverse mortgages are no longer just for cash-strapped homeowners” (NYT)

  • How celebrity-spotting Instagram account DeuxMoi is changing New York’s dining scene. (The cut)

  • Patrick Demarchelier, the fashion photographer known for his portraits of supermodels and Princess Diana, has died. He was 78. (NYT)

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