today is May 21, 2022

Inflation accelerated, Russia’s invasion of Ukraine grew more intense, the Federal Reserve started to cool down the economy and some investors began to wonder if a recession is looming.

The stock market, though, managed to end March with a gain.

The SP 500 rose 3.6 percent for the month, snapping back after stocks had plunged to start the year. The turnaround means that the SP 500 has clawed back more than half of its losses from the lowest point of 2022, when it was down 12.5 percent.

This turn of events is a somewhat predictable reaction to Wall Street’s worst stretch of selling since the beginning of the coronavirus pandemic. The rebound came as stock investors realized that their worst fears about the economy hadn’t materialized, analysts said. The economy continued to show signs of strength in the face of new challenges, and the Fed’s long-awaited plan for interest rates fit in neatly with investors’ expectations. And many businesses said they were able to deal with record inflation by passing rising costs along to consumers — boosting their profits in the process.

“People realized that the fundamentals behind a lot of the stocks are really not that bad and that companies are still extremely profitable,” said Victoria Greene, chief investment officer at G Squared Private Wealth, an advisory firm.

“Hard corrections like we had in January and February tend to be like strong summer storms,” she said. They are “intense but tend to pass quickly.”

That’s not to say that financial markets are completely sanguine about the state of the world. If the Fed proves too aggressive in its effort to contain inflation, or if it suddenly shifts its plan, the central bank could spook investors in risky assets like stocks. And the conflict in Ukraine, which has led to thousands of civilian deaths and the displacement of millions, adds a high degree of uncertainty.

On Thursday, for example, the SP 500 ended with a loss of 1.6 percent after tumbling in the final hours of trading. For the first three months of the year, the index ended down 5 percent.

But the panic that gripped stock investors earlier in the year has certainly eased. That’s partly because several indicators showed that the American economy was still faring well. Employers added 678,000 jobs in February, and a report for March to come on Friday was expected to show that the robust pace of hiring has continued. That employment growth is keeping consumers spending even as prices shoot higher.

Businesses have capitalized on this consumer behavior. As they reported results for the end of 2021, companies like Starbucks and McDonald’s said they raised prices, boosting revenue without seeing a reduction in demand.


Companies like McDonald’s said they raised prices, boosting revenue without seeing a reduction in demand. Employment growth is keeping consumers spending even in the face of record inflation.
Companies like McDonald’s said they raised prices, boosting revenue without seeing a reduction in demand. Employment growth is keeping consumers spending even in the face of record inflation. Credit... Whitney Curtis for The New York Times

The fallout from the war in Ukraine also lifted shares of some companies. As oil prices surged, major oil producers rallied. The best performer among them was Occidental Petroleum, which climbed about 30 percent in March and has risen 47 percent since the invasion began on Feb. 24. The defense company Lockheed Martin is also up more than 13 percent since the start of the war.

Investors also bid up shares of some of the biggest technology companies, after share prices were hammered amid the panic over whether high interest rates would squelch interest in risky investments. Apple climbed 15.9 percent from its lowest point in March, while Tesla rose 40.6 percent. Because of their size — Apple’s gains have lifted its valuation to close to $3 trillion again — the big technology companies can carry the entire SP 500 higher. Alphabet, Microsoft and Meta were also higher in March.

Wall Street’s gain this month came even as the Federal Reserve raised interest rates in efforts to ease inflation by making borrowing costs more expensive. The central bank rolled out its first quarter-point rate increase in the middle of the month and projected six more increases this year. With inflation already running at its fastest pace in 40 years, and after the Fed signaled that it was teeing up a rate increase, investors expected the move.

But last week, the Fed’s chair, Jerome H. Powell, spurred new concerns when he said that the Fed was prepared to raise rates more quickly if necessary. Economists are worried that a more rapid approach in raising interest rates could lead the economy into a recession by slowing down consumer demand too much.

“The fear is that it’s always hard to know how many rate hikes will just slow the economy or whether it may go a bit too far and tip the economy into a recession,” said Franziska Palmas, a markets economist at Capital Economics. “There’s so many things going on in the economy that it’s not that easy for the central bank to calibrate exactly the right amount of tightening.”

As stocks rallied though, it was the bond market that signaled rising recession fears by narrowing the difference between short-term interest rates and long-term ones. In a growing economy, short-term interest rates are usually notably lower than long-term ones. For example, at the start of the year, the yield on 2-year Treasury notes stood at 0.78 percent, while the yield on 10-year Treasury notes was 1.63 percent.

Now, the two interest rates are nearly the same at about 2.3 percent. This type of move usually indicates that investors anticipate a slowdown in growth in the near future.

“If investors as a whole believe that interest rates will be flat or lower in the years ahead relative to today’s rates, it suggests the markets are pricing in a weakening economy,” said John Canavan, lead analyst at Oxford Economics.

Those predictions of a slowdown ramped up as oil prices soared, raising the prospect that inflation could persist. Oil prices surged above $130 a barrel as Western countries imposed sanctions on Russia, a major oil producer, and businesses suspended their operations in the country. The United States banned imports of Russian energy, and European nations pledged to gradually follow suit.

But oil fell off those highs, and that helped bolster stocks. By Thursday, after the Biden administration said it would release up to 180 million barrels of oil from its strategic petroleum reserve in the coming months, global oil prices stood at around $108 a barrel.

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Melissa Eddy Patricia Cohen

European leaders on Thursday pushed back against President Vladimir V. Putin’s latest threat that all natural gas imported from Russia must be paid for in rubles starting Friday — or risk having the supplies shut off. Mr. Putin said in a TV address that companies purchasing gas from Russia would need to open ruble accounts in Russian banks, effective Friday, and pay for the gas through those accounts.

“If such payments are not made, we will consider this a default on the part of buyers — with all the ensuing consequences,” Mr. Putin said. “Nobody sells us anything for free, and we are not going to do charity, either. That is, existing contracts will be stopped.”

At the same time, Mr. Putin said, Russia will comply with its “obligations” in its contracts with energy buyers and “continue to supply gas in the established volumes.”

It was unclear how the standoff would be resolved. At stake for European nations are vital supplies of natural gas that drives their economies. For Mr. Putin, it is the hundreds of millions of dollars that Russia pulls in every day in energy payments by Europe.

Mr. Putin’s insistence on being paid in rubles — instead of taking dollars or euros and converting them to rubles on his end — has been rejected by European leaders. It has also raised questions about his real motives. The Russian government and central bank have already taken several measures to increase the demand for rubles and prop up the currency, which plunged in value after sanctions froze the Russian central bank’s foreign assets.

The heads of state of two of Russia’s largest gas customers in Europe — Chancellor Olaf Scholz of Germany and Prime Minister Mario Draghi of Italy — refused the call for payments in rubles, saying it was not part of the terms of existing contracts.

“It remains the case that companies want, can and will pay in euros,” Mr. Scholz told reporters in Berlin on Thursday, a day after he spoke with Mr. Putin by telephone about the impending decree.

“It is absolutely not easy to change the currency for payments without breaching the contracts,” Mr. Draghi told reporters in Italy. A former president of the European Central Bank, he drew a parallel to a previous attempt by the European Union to impose its currency in a series of global transactions, with little success, given the challenges of altering existing contracts.

He added that he did not believe that Europe was “in danger” of having its gas deliveries shut off, citing his own phone call with Mr. Putin on Wednesday, in which he said he understood that the Russian president had granted a “concession” to European countries. The conversion of payments from dollars or euros into rubles was “an internal matter of the Russian Federation,” Mr. Draghi said.

“Contracts are contracts,” said Bruno Le Maire, the economy minister of France, after meetings in Berlin.

Robert Habeck, Mr. Scholz’s minister for the economy and energy, repeated the insistence of the Group of 7 industrial countries that existing contracts for Russian gas must be respected. “It is important for us not to give a signal that we will be blackmailed by Putin,” he said.

On Wednesday, Mr. Habeck activated the first step of a national gas emergency plan — that could lead to the rationing of gas — to prepare Germany’s citizens and its powerful industrial base for the possibility that gas deliveries could be stopped.

Both Germany and Italy have been scrambling over the past month to diversify their natural gas resources, after years of depending heavily on imports from Russia. Last year, Russian imports accounted for 55 percent of Germany’s gas needs, while roughly 40 percent of gas burned in Italy came from Russia.

With his demand, Mr. Putin seems to be seeking to force Europe and other buyers to violate their own sanctions by making them purchase rubles, which would also prop up the Russian currency, said Eswar Prasad, an economist at Cornell University.

“Putin seems determined to show that he can dictate terms and force countries that are dependent on his country’s natural gas exports to sing to his tune,” he said.

Jeffrey Schott, a senior fellow at the Peterson Institute for International Economics, said that “it seems Putin’s motivation is to prevent hard currency payments from being frozen,” so he is requiring the money to be delivered directly to Russian banks.

Anton Troianovski and Gaia Pianigiani contributed reporting.

Gas pipeline at Wingas in Germany.


Gas pipeline at Wingas in Germany.
Gas pipeline at Wingas in Germany. Credit... Arno Burgi/DPA, Via European Pressphoto Agency

Melissa Eddy Stanley Reed

BERLIN — European Union and German regulators carried out unannounced inspections at several companies involved in the supply, transmission and storage of natural gas, on suspicion of violating E.U. competition regulations, the authorities said on Thursday.

None of the companies targeted in the raids, which took place on Tuesday, were identified, and both the European Commission, the executive arm of the bloc, and Germany’s antitrust regulator, the Bundeskartellamt, refused to comment further.

Reuters and German media reported that two companies subjected to the inspections were Gazprom Germania and Wingas, both subsidiaries of Gazprom, Russia’s state-owned gas supplier. Neither company responded to requests for comment.

The commission said the surprise raids were part of “a preliminary investigatory step into suspected anticompetitive practices.” If sufficient evidence of wrongdoing is found, a formal investigation can proceed.

Earlier in the month, the commission singled out Gazprom for possible violations of market regulations on competition.

“The commission continues its investigation into the gas market in response to concerns about potential distortions of competition by operators, notably Gazprom,” it said in a March 8 statement that laid out its plans to diversify Europe’s sources of natural gas.

In 2018, the commission reached a settlement with Gazprom, after a long-running antitrust investigation into its dominance in regional gas markets across Europe. Unlike competition inquiries into companies like Google and Intel, this one did not result in a fine, provoking criticism from officials in Poland who feared the deal did not go far enough to prevent similar behavior.

Last year, Russia provided about 45 percent of the European Union’s natural gas imports; in Germany, Russia’s share amounted to 55 percent.

In addition to Wingas and Gazprom Germania, Gazprom holds stakes in several other companies that own or operate natural gas storage facilities and thousands of miles of pipeline.

Europe's largest underground tank for natural gas, in Rehden, Germany, is owned by Astora, another subsidiary of Gazprom. But the amount of gas that it holds on reserve had dropped to historic lows even before Russia’s invasion of Ukraine on Feb. 24. Last week, European Union leaders proposed requiring underground storage facilities to be at least 90 percent full by Oct. 1 each year.

Gazprom is also involved in four long-distance pipelines, through joint ventures with the Germany-based Wintershall Dea, including Nord Stream, which owns the original pipeline carrying natural gas directly to Germany from Russia under the Baltic Sea. A second, parallel pipeline that the Russians had rushed to complete last year over vociferous objections from Washington, called Nord Stream 2, was effectively frozen two days before Russia invaded Ukraine.


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President Biden said the United States would release up to 180 million barrels of oil from a strategic reserve to lessen the impact of Russia’s invasion of Ukraine on consumer gasoline costs. Credit Credit... Leigh Vogel for The New York Times

Clifford Krauss Michael D. Shear

By Clifford Krauss and Michael D. Shear

Clifford Krauss, an energy correspondent, reported this article from Houston. Michael D. Shear covers the White House.

Under growing pressure to bring down high energy prices, President Biden announced on Thursday that the United States would release up to 180 million barrels of oil from a strategic reserve to counteract the economic impact of Russia’s invasion of Ukraine.

With midterm elections just months away, gasoline prices have risen nearly $1.50 a gallon over the last year, undercutting consumer confidence. And the cost of diesel, the fuel used by most farmers and shippers, has climbed even faster, threatening to push up already high inflation on all manner of goods and services.

“I know how much it hurts,” Mr. Biden said Thursday as he announced the plan. “As you’ve heard me say before, I grew up in a family like many of you where the price of a gallon gasoline went up, it was a discussion at the kitchen table.”

Mr. Biden has few tools to control commodity prices that are set on global markets, so he is turning to the Strategic Petroleum Reserve, ordering the largest release since that emergency stockpile was established in the early 1970s. But the move will most likely have a modest impact because it cannot make up for all the oil, diesel and other fuels that Russia used to sell to the world but is no longer able to.

“Our prices are rising because of Putin’s action,” Mr. Biden added, referring to President Vladimir V. Putin of Russia. “There isn’t enough supply. And the bottom line is if we want lower gas prices, we need to have more oil supply right now.”

Mr. Biden’s plan, to release one million barrels of oil a day for 180 days, would represent roughly 5 percent of American demand and 1 percent of global demand. To put that in context, Russian oil exports are down about three million barrels a day. The U.S. benchmark oil price fell about 6 percent on Thursday.

The administration’s announcement came as Russia conveyed mixed signals about its aims for the war in Ukraine, now in its sixth week. Despite Kremlin claims that it was withdrawing from the outskirts of Kyiv, the capital, fighting continued in that area on Thursday, and Western officials said they saw little evidence of a Russian pullback.

“Russia maintains pressure on Kyiv and other cities, so we can expect additional offensive actions, bringing even more suffering,” the NATO secretary general, Jens Stoltenberg, said at a news conference.

Russian officials also said they would allow a respite for greater humanitarian access to the devastated southeast port of Mariupol, once home to 400,000 people, which has come to symbolize Russia’s battlefield tactic of indiscriminate destruction. Previous agreements for pauses in fighting around Mariupol have repeatedly broken down.

Largely as a result of the ceaseless war, energy experts expect oil prices to stay high for a while without big interventions like the U.S. reserve release.

Reaction from the oil industry to Mr. Biden’s announcement was muted. The reserve has mostly been used to increase the supply of oil during wars, foreign threats to energy supplies or natural disasters. Smaller reserve releases by the Biden administration starting late last year have had little impact on the prices that drivers and businesses pay for fuel.

“It will lower the oil price a little and encourage more demand,” said Scott Sheffield, chief executive of Pioneer Natural Resources, a major Texas oil company. “But it is still a Band-Aid on a significant shortfall of supply.”

The American Petroleum Institute, which represents oil and gas companies, said Mr. Biden ought to encourage domestic oil production by reducing regulations. The reserve “was put in place to reduce the impact of significant supply chain disruptions,” said Mike Sommers, the group’s president, “and while today’s release may provide some short-term relief, it is far from a long-term solution to the economic pain Americans are feeling at the pump.”

After sinking to historically low levels during the early months of the coronavirus pandemic, oil prices have been climbing for the last year, reaching their highest levels in nearly a decade.

Oil exploration and production in the United States and elsewhere slid during the pandemic, and still has not quite recovered. American companies, under pressure from investors, have been cautious about spending too much money to drill new wells, lest prices fall again. Instead, many have been paying out larger dividends and buying back their stock.

While that calculation might make sense for individual businesses, it has caused political problems for Democrats who had hoped to reduce the use of fossil fuels to address climate change. Now, under attack from Republicans for high prices, Mr. Biden and Democrats are trying to get the oil industry to drill more.


An ExxonMobil refinery near Joliet, Ill. In an effort to push down rising oil prices, the Biden administration announced plans to release up to 180 million barrels of oil from the nation’s strategic reserve.
An ExxonMobil refinery near Joliet, Ill. In an effort to push down rising oil prices, the Biden administration announced plans to release up to 180 million barrels of oil from the nation’s strategic reserve. Credit... Tannen Maury/EPA, via Shutterstock

Both sides of the political divide are eyeing the November congressional election, when inflation is expected to be a major issue.

Reacting to news of the release from the reserve, a spokesman for Representative Kevin McCarthy, the Republican leader in the House, accused the president of “attacks on American energy production in order to fulfill his campaign promise to ‘get rid of fossil fuels.’”

Mark Bednar, the spokesman, added: “As a result, the American people are paying the price, as gas is more than $4 per gallon, and we are more reliant on other countries for energy.”

But Senator Joe Manchin III, Democrat of West Virginia, welcomed the Biden announcement, saying it would “provide much-needed relief while also allowing for the simultaneous ramping up of domestic oil and gas production to backfill Russian energy resources.”

Aides to Mr. Biden are hoping to blunt Republican criticisms by taking actions to try to lower prices. In a statement about the oil release Thursday morning, the White House said that Mr. Biden was “committed to doing everything in his power to help American families who are paying more out of pocket as a result.”

They are also trying to pin some of the blame for high prices on oil companies, which the administration argues are not producing more energy to increase their profits. The administration plans to call on Congress to require companies to produce oil on more than 12 million acres of federal lands that are already permitted for extraction or pay fines, a proposal that will probably face an uphill climb.

Energy experts said the reserve release would pack more punch if other countries, like China, also sold oil from their stockpiles. The International Energy Agency, an organization of more than 30 countries, will meet Friday and may recommend further releases from national reserves.

Russian oil exports normally represent more than one of every 10 barrels the world consumes. The United States, Britain and Canada have stopped importing Russian oil, and many oil companies and shippers in Europe have voluntarily stopped buying Russia’s energy products. That has produced a deficit so far of about three million barrels a day.

The average price of regular gasoline in the United States is $4.23 a gallon, according to AAA, the motor club. That’s about the same as it was a week ago but up 62 cents a gallon in the last month.

Oil prices had dropped this week after peace talks between Russia and Ukraine showed the first signs of progress. Energy traders are also concerned that demand could fall as China, the world’s largest oil importer, imposes lockdowns in Shanghai and other places to deal with coronavirus outbreaks.

“The price effect is likely to be short term,” David Goldwyn, who was a senior State Department official in the Obama administration, said about Mr. Biden’s announcement. “But part of the benefit of this release is that it will provide a bridge to when new physical supply comes online in the second half of this year from the U.S., Canada, Brazil and other countries.”

Some environmentalists criticized the reserve release. “Putting more oil on the market is not the solution to our problem but the perpetuation of our problem,” said Mark Brownstein, a senior vice president at the Environmental Defense Fund.

But Meghan L. O’Sullivan, director of the Geopolitics of Energy Project at Harvard’s Kennedy School, said releasing reserves to ease shortages would not imperil the transition to clean energy. “What the last month has told us is that if there is no energy security today, the appetite for taking hard steps on the path of transition will evaporate,” she said.

The release is not without risk. Goldman Sachs analysts wrote in a research note that a large discharge could cause “congestion” on the Gulf Coast, keeping new oil production from fields in West Texas out of pipelines and storage tanks.

Mr. Biden’s move could also discourage Saudi Arabia and other producers from increasing supply to reduce prices. OPEC Plus, a group led by Saudi Arabia that includes Russia, on Thursday decided to maintain a policy of only modestly increasing supply.

Bob McNally, who was an energy adviser to President George W. Bush, said the release was “not big enough to offset the potential loss of Russian oil exports should the conflict and sanctions pressure continue to extend.”

The oil market tends to go in cycles, so the release may allow the government to sell high and, later, buy low, potentially earning billions of dollars for the Treasury. The government will use the money it makes from oil sales to refill the reserve, which in turn could help raise prices again.

While pushing up those prices, Jason Bordoff, founding director of Columbia University’s Center on Global Energy Policy and a former aide to President Barack Obama, said an eventual refill could also “send a signal to shale producers that may help encourage them to invest in more production, which may help with today’s potential shortages.”

The U.S. reserve contains nearly 600 million barrels, approximately a month of total American consumption, and it can release up to 4.4 million barrels a day. The stockpile was established after the 1973 energy crisis, when Saudi Arabia and other Arab producers proclaimed an oil embargo.

Megan Specia contributed reporting from Krakow, Poland, and Steven Erlanger from Brussels.

An oil storage facility in Ust-Luga, Russia. The war in Ukraine has led to a kind of  buyers’ strike against Russian oil. 


An oil storage facility in Ust-Luga, Russia. The war in Ukraine has led to a kind of  buyers’ strike against Russian oil. 
An oil storage facility in Ust-Luga, Russia. The war in Ukraine has led to a kind of  buyers’ strike against Russian oil.  Credit... Vladimir Soldatkin/Reuters

Stanley Reed

With analysts warning of a coming oil supply crunch, OPEC and its allies, including Russia, decided on Thursday to stick with their previously agreed plan of modest monthly increases. The group, known as OPEC Plus, said it would increase oil output in May by 432,000 barrels a day, a slight uptick from the usual increase of 400,000 barrels a day for technical reasons.

In a news release after what was probably a very brief meeting, OPEC Plus repeated its thinking of a month earlier. The group said that the outlook was for “a well-balanced market” and that recent volatility in prices was “not caused by fundamentals, but by ongoing geopolitical developments,” apparently meaning the war in Ukraine.

In contrast, many analysts are warning that with oil storage tanks at low levels, sanctions over the war in Ukraine and a kind of buyers’ strike underway against Russian oil, a major supply crunch could develop, lowering global economic growth and stoking inflation.

OPEC Plus acted just before the White House made public plans to release up to 180 million barrels of oil from emergency reserves in response to the rising oil prices and in anticipation of possible spikes in demand or drops in supply. White House officials said they expected other countries to announce additional contributions at a meeting of the International Energy Agency on Friday.

After months of fruitlessly asking OPEC Plus to increase oil production to calm roiled markets, Washington seems to have decided to take charge.

“We know that consumers need relief now, and that is why the president has acted,” a senior administration official said.

Prince Abdulaziz bin Salman, Saudi Arabia’s oil minister, likes to describe the Organization of the Petroleum Exporting Countries as a kind of central banker of oil, smoothing market fluctuations by adding and subtracting supplies, although analysts dispute how effectively it has played this role. In current circumstances, though, OPEC Plus may not be able to act because Russia, while not an OPEC member, has been an integral part and a co-chair of the larger group since it was formed in 2016.

Alexander Novak, Russia’s deputy prime minister, is said to have participated in Thursday’s teleconference. A decision to pump up oil output might have been seen as aiding the West in support of Ukraine and detrimental to Moscow’s interests.

OPEC, whose de facto leader is Saudi Arabia, seems to be trying to ignore the problem caused by Russia’s presence in the group. For instance, OPEC’s latest oil market report, published in mid-March, forecast that Russia’s oil production would be 11.8 million barrels a day in 2022, an increase of nearly one million barrels a day over 2021 levels.

Not reducing those estimates because of the war and sanctions “partly reflects the political sensitivity of downgrading forecasts for Russia,” wrote analysts at Energy Aspects, a research firm.

Other analysts, including those at the International Energy Agency in Paris, are forecasting a substantial decline in the range of three million barrels a day as sanctions bite and companies like Shell and France’s TotalEnergies phase out purchases of Russian oil. In particular, concerns about supplies of diesel fuel, which Russia exports in large volumes to Europe, are emerging.

And OPEC Plus does not have much more oil to contribute to the world market. The group is already falling about 1.3 million barrels a day short of its targets, and is unlikely to come close to adding 432,000 barrels a day in May. Russia, for instance, along with Saudi Arabia, is marked down to increase by more than 100,000 barrels a day, to 10.5 million; because of sanctions, Moscow is very unlikely to be able to increase output.

Analysts say only Saudi Arabia and the United Arab Emirates have the ability to add substantial volumes of additional oil. These producers may be holding back until it becomes clearer how much Russian production will be lost. There are also doubts among market watchers about how much oil they could add quickly.

News that the Biden administration would release one million barrels a day from U.S. strategic reserves beginning in May, comparable to about 1 percent of global output, may also encourage these countries to save what additional volumes they have for a more opportune moment.

Wheel loaders filling trucks with ore at the MP Materials rare earth mine in Mountain Pass, Calif.


Wheel loaders filling trucks with ore at the MP Materials rare earth mine in Mountain Pass, Calif.
Wheel loaders filling trucks with ore at the MP Materials rare earth mine in Mountain Pass, Calif. Credit... Steve Marcus/Reuters

Ana Swanson

WASHINGTON — President Biden took steps on Thursday to try to increase domestic production of critical minerals and metals needed for advanced technologies like electric vehicles, in an attempt to reduce America’s reliance on foreign suppliers.

Mr. Biden invoked the Defense Production Act, a move that will give the government more avenues to provide support for the mining, processing and recycling of critical materials, such as lithium, nickel, cobalt, graphite and manganese. Those are used to make large-capacity batteries for electric cars and clean-energy storage systems. Yet except for a handful of mines and facilities, they are almost exclusively produced outside the United States.

“We need to end our long-term reliance on China and other countries for inputs that will power the future,” Mr. Biden said during remarks at the White House, where he also announced the release of one million barrels of oil per day from the Strategic Petroleum Reserve.

The Defense Production Act is a Cold War-era statute that gives the president access to funding and other enhanced powers to shore up the American industrial base and ensure the private sector has the necessary resources to defend national security and face emergencies.

In a determination issued Thursday, the president said that the United States depended on “unreliable foreign sources” for many materials necessary for transitioning to the use of clean energy, and that demand for such materials was projected to increase exponentially.

Mr. Biden directed his secretary of defense to bolster the critical mineral supply by supporting feasibility studies for new projects, encouraging waste reclamation at existing sites, and modernizing or increasing production at domestic mines for lithium, nickel, cobalt, graphite and other so-called critical minerals.

The secretary of defense would also conduct a survey of the domestic industrial base for critical minerals and submit that to the president and Congress, the presidential determination said.

A person familiar with the matter said the actions being contemplated wouldn’t be loans or direct purchases of minerals, but rather funding studies and the expansion or modernization of new and existing sites.

The administration will also review potential further uses of the act in relation to the energy sector, according to a White House announcement on Thursday.

The United States imported more than half its supply of at least 46 minerals in 2020, and all of its supply of 17 of them, according to the U.S. Geological Survey. Many of the materials come from China, which leads the world in lithium ion battery manufacturing and has been known to shut off exports of certain products in times of political tensions, including rare earth minerals.

The Biden administration has warned that a dependence on foreign materials poses a threat to America’s security, and promised to expand domestic supplies of semiconductors, batteries and pharmaceuticals, among other goods. While the United States does have some unexplored deposits of nickel, cobalt and other crucial minerals and metals, developing mines and processing sites can take many years. Two-thirds of the world’s entire production of cobalt is in the Democratic Republic of Congo, where Chinese companies owned or financed 15 of the 19 largest mines as of 2020.

But bipartisan support for expanding American mining and processing of battery components has grown in recent years. In a March 11 letter to Mr. Biden, senators including Lisa Murkowski, a Republican of Alaska, and Joe Manchin III, a Democrat of West Virginia, proposed invoking the Defense Production Act to accelerate domestic production of the components of lithium-ion battery materials, particularly graphite, manganese, cobalt, nickel and lithium.

Todd M. Malan, the head of climate strategy for Talon Metals, which is developing a nickel mine in Minnesota, said Washington had reached a bipartisan consensus around providing more support for the domestic mining of electric vehicle battery minerals “driven by concern about reliance on Russia and China for battery materials as well as the energy transition imperative.”

But some domestic developments may face opposition from environmentalists in Mr. Biden’s own party.

Representative Raúl M. Grijalva, an Arizona Democrat who chairs the Natural Resources Committee, said in a statement Wednesday that mining companies were “making opportunistic pleas to advance a decades-old mining agenda that lets polluters off the hook and leaves Americans suffering the consequences.”

“Fast-tracking mining under antiquated standards that put our public health, wilderness, and sacred sites at risk of permanent damage just isn’t the answer,” he added.

Dionne Searcey contributed reporting.

Union canvassers outside Amazon’s warehouse in Bessemer, Ala., last year.


Union canvassers outside Amazon’s warehouse in Bessemer, Ala., last year.
Union canvassers outside Amazon’s warehouse in Bessemer, Ala., last year. Credit... Bob Miller for The New York Times

Noam Scheiber

Union supporters are narrowly trailing opponents in a union election at an Amazon warehouse in Alabama, the National Labor Relations Board said on Thursday. But the count was far closer than a vote at the same warehouse last year, when workers rejected the union by a more than 2-to-1 ratio.

The union had 875 yes votes versus 993 no votes, but the more than 400 challenged ballots are sufficient to potentially affect the outcome. The challenges will be resolved at a labor board hearing in the coming weeks.

Overall, roughly 2,300 ballots were cast in the election in Bessemer, Ala., out of more than 6,100 eligible employees.

The labor board mandated the revote, which was conducted by mail from early February to late March, after concluding that Amazon violated the so-called laboratory conditions that are supposed to prevail during a union election.

“Regardless of the final outcome, workers here have shown what is possible,” said Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union, which sought to organize the workers. “They have helped ignite a movement.”

Speaking in a videoconference with reporters after the vote count, Mr. Appelbaum said the organizing in Bessemer had helped spark union campaigns at other companies, like REI and Starbucks, and in other parts of the country.

Amazon did not respond to a request for comment.

The labor board is also counting votes in another high-profile election, at an Amazon warehouse on Staten Island. At the end of the first day of counting on Thursday, 57 percent of the ballots supported being represented by Amazon Labor Union, and 43 percent were opposed. The N.L.R.B. said the count should be finished Friday.

Workers who supported the union in Bessemer cited frustrations over low pay, inadequate breaks and overly aggressive productivity targets. Amazon has said its pay — just under $16 per hour for full-time, entry-level workers — is competitive for the area. It has also pointed to a benefits package that it says is attractive, including complete health care benefits for full-time employees as soon as they join the company. The company has said its performance targets reflect safety considerations and individual employees’ experience.

Several employees who backed the union said co-workers were generally less afraid to question management or show their union support this year than during last year’s election. “People are asking more questions,” Jennifer Bates, an employee who helped lead the organizing effort both last year and this year, said in an interview this month. “More employees are standing up and speaking out.”

The union also cited key differences in its approach to the more recent election. Last year, the union curtailed in-person organizing efforts because of Covid-19 safety concerns, but this time its organizers visited workers at home. Other unions dispatched organizers to Alabama to aid in these efforts.

Workers also appeared to be more active in organizing within the plant. They wore union T-shirts to work twice each week to demonstrate support, and one group delivered a petition to managers with more than 100 signatures complaining of inadequate breaks and break room equipment.

Still, Amazon retained advantages, not least of which was its high rate of employee turnover, which made it difficult for organizers to sustain momentum as disaffected workers simply left their jobs.

The company also appeared to spend generously on its effort to dissuade employees from backing the union, hiring consultants and holding more than 20 anti-union meetings with employees per day before mail ballots went out in early February. In a Labor Department filing released on Thursday, Amazon disclosed that it had spent more than $4 million on labor consultants last year. It has yet to reveal how much it spent on consultants this year.

Union supporters accused Amazon of excluding them from meetings to mute criticism and pushback, but Amazon denied the accusation.

The tally announced on Thursday was consistent with a broader trend in rerun elections, more than half of which unions have lost since 2010.

Shoppers at Burlington Coat Factory in New York City this month. Prices through February rose at the fastest rate since 1982.


Shoppers at Burlington Coat Factory in New York City this month. Prices through February rose at the fastest rate since 1982.
Shoppers at Burlington Coat Factory in New York City this month. Prices through February rose at the fastest rate since 1982. Credit... Gabby Jones for The New York Times

Jeanna Smialek

Inflation continued to run at the fastest pace in 40 years in February, fresh data released on Thursday showed, at a moment when war in Ukraine and continued supply chain disruptions tied to the coronavirus promise to keep prices rising.

Prices as measured by the Personal Consumption Expenditures Index rose 6.4 percent in the year through February, up from the 6.1 percent increase in the year through January and the fastest inflation rate since 1982.

They climbed 5.4 percent after food and fuel costs, which can be volatile, are stripped out, the data showed. That pace was also faster than the prior month’s reading, which was 5.2 percent.

The pace far exceeds the 2 percent annual inflation that the Federal Reserve targets. While central bankers expect today’s rapid inflation to cool by the end of the year, falling to 4.3 percent by the final three months of 2022, that rate would still be too quick for comfort.

Central bankers began raising interest rates this month, lifting them a quarter of a percentage point, and have signaled more to come as they begin to wage an assault on rising prices. By making borrowing more expensive, the Fed can weigh on demand, allowing supply to catch up and eventually temper price increases.

“There is an obvious need to move expeditiously to return the stance of monetary policy to a more neutral level, and then to move to more restrictive levels if that is what is required to restore price stability,” Jerome H. Powell, the Fed chair, said during a recent speech.

The Personal Consumption Expenditures figures follow a more timely inflation release — the Consumer Price Index — and tend to be easy to forecast, so they do not come as a surprise to Wall Street. But because the gauge is the Fed’s preferred inflation measure, the fresh figures reinforce the challenge that economic officials face.

Policymakers are watching for any sign that inflation is slowing down or about to cool off. While the price index excluding food and energy did climb slightly more slowly on a monthly basis in February, there is little to suggest a meaningful pullback. Supply chains remained stressed, and recent shutdowns in China could pose further strain. Apartment rents are climbing, elevating housing costs. Workers are in short supply and wages are rising, which could bolster inflation in other service categories.

Russia’s invasion of Ukraine pushed up oil and gas prices, along with other commodity costs, which is likely to further elevate inflation when March data are released. While a few days of gas price increases happened in February, the bulk of them came this month.

Companies are trying to navigate the complicated moment, gauging whether input cost increases will continue for a second year — and whether and how to pass them on to consumers.

Chewy, the pet goods retailer, recently signed a new freight contract that will cost it more this year, and in the final quarter of 2021 it also faced higher labor costs. But it is hoping that those trends do not last, or that it can offset the climbing expenses through efficiencies.

“As we close the book on 2021 and move forward in 2022, we are already seeing improvements in labor availability, inbound shipping costs and pricing, while out-of-stock levels and outbound shipping costs remain elevated,” Sumit Singh, Chewy’s chief executive, said on an earnings call this week. “Ultimately, we believe most of these challenges are not permanent in nature.”

Other companies have been expecting consumer demand to face some challenges this year, as households get past the government stimulus checks that boosted their spending ability in 2021.

“For our business in the industry we’re in, the stimulus checks are a short-term impact from last year,” Jon Barker, chief executive at Sportsman’s Warehouse, said on an earnings call this week. “And while fuel costs and inflation will certainly have an impact on disposable income for our consumer, we actually believe and are confident that our industry is more — is able to weather those changes better than most.”

Thursday’s report showed that consumer spending fell in February when adjusted for inflation, pulling back by 0.4 percent from January, a slightly bigger decline than economists expected. It is still rising before price increases are accounted for, though. Personal income also continued to rise before being adjusted for inflation, as wage growth takes over where government help is leaving off.

Household balance sheets are still in decent shape even as some support payments lapse. Many people paid down debt during the pandemic, and others are seeing pay gains that could help them sustain spending in the months ahead. Households across the income spectrum built up savings during the pandemic, partly thanks to the government relief payments.

For the White House and Democrats, inflation is a political liability headed into midterm elections that have the potential to cost them control of Congress. Consumer sentiment and voter approval ratings have both swooned as prices have risen.

President Biden on Thursday announced a plan to release one million barrels of oil a day from the Strategic Petroleum Reserve for as long as 180 days, saying it could help alleviate some of the spike in gas prices that he attributed to Russia’s invasion of Ukraine.

The release would add a large amount of oil to the global market in an effort to blunt price increases at the pump.

“This is a wartime bridge to increase oil supply until production ramps up later this year,” Mr. Biden said.

Policymakers expected shopping to die down and inflation to slow as the pandemic waned.


Policymakers expected shopping to die down and inflation to slow as the pandemic waned.
Policymakers expected shopping to die down and inflation to slow as the pandemic waned. Credit... Gabby Jones for The New York Times

Jeanna Smialek Ben Casselman

Economists have been waiting for Americans to shift from buying goods, like furniture and appliances, and toward spending on vacations, restaurant meals and other services as the pandemic fades, betting the transition would take pressure off supply chains and help inflation to moderate.

Rapid wage growth could make that story more complicated. Demand for services is rising just as many employers are struggling to find workers, which could force them to continue raising wages. While positive for workers, that could keep overall inflation brisk as companies try to cover their labor costs, speeding up price increases for services even as they begin to moderate for goods.

Heavy spending on goods during the pandemic has been a driver of the recent inflation burst. Consumers began snapping up physical products a few months after pandemic lockdowns began and have kept on buying. Spending on services has also recovered, but much more slowly. That shift in what people are purchasing has roiled supply chains, which were not built to produce, ship and deliver so many cars, treadmills and washing machines.

Policymakers spent months betting that as the coronavirus waned and consumers resumed more normal shopping patterns, prices of goods would slow their ascent or even fall. That would pull down inflation, which has been running at its fastest pace in 40 years.

But that transition — assuming it happens — may do less to cool inflation than many had hoped. A big chunk of what the government defines as “services” inflation comes from rental housing costs, which often move up alongside wage growth, as households can afford more and bid up the cost of a limited supply of housing units. And when it comes to discretionary services, like salons and gyms, labor is a major cost of production. Rising pay is likely to mean higher prices.

Jason Furman, a Harvard economist who served as a top adviser to President Barack Obama, said the shortage of workers in many service industries meant that if demand for services went up, prices would, too. That means a shift in spending back to services won’t necessarily result in an overall slowdown in price increases.

“An awful lot of services are incredibly constrained,” he said. “As we shift back to services, we’ll get more services inflation and less goods inflation, and I don’t think it’s at all obvious that the result of that is less inflation.”

Inflation is running at the fastest pace since 1982, data released Thursday confirmed. Prices climbed 6.4 percent in the year through February, more than three times the Federal Reserve’s goal of 2 percent annual increases on average.

Rapid price changes have been spreading beyond goods and into services in recent months. While America has gotten used to thinking about shortages in products — couches are out of stock, shoes are back-ordered — labor shortfalls could mean that services will also end up oversubscribed, allowing providers to charge more.

MaidPro, a home-cleaning firm, has seen a surge in demand from professionals who are spending more time at home. But it is having trouble finding workers to keep up, said Tom Manchester, the company’s president.

“Our demand right now outstrips our supply of being able to service that demand,” he said. “Demand has just continued to be strong — like double-digit strong. And if we could find qualified pros to meet the demand, we’d be even more ahead than we are today.”


An Amazon employee delivering packages in Manhattan. Americans have continued to buy goods even as services have rebounded.
An Amazon employee delivering packages in Manhattan. Americans have continued to buy goods even as services have rebounded. Credit... Gabby Jones for The New York Times

Mr. Manchester said hourly wages were up $1 to $3, adding to costs when cleaning products have gotten pricier and higher gas prices have made travel reimbursements more expensive. MaidPro franchisees have been able to pass those costs on to their customers, both via fuel surcharges and outright price increases that have more or less kept up with inflation.

So far, they have lost few customers — in part because few competitors have capacity to take on new customers.

“If someone has someone that they really like coming in to clean their home, they don’t want to lose them,” Mr. Manchester said. “They don’t want to risk saying, ‘I want to move away from MaidPro and try to find someone else,’ because in nine out of 10 instances, that someone else isn’t available.”

Some economists argue that if goods inflation slows, that could still help price gains overall to moderate, even amid rising wages. Prices for products that last a long time rose 11.4 percent in the year through February — posting the first slight moderation in months, from 11.6 percent in January. Prices for shorter-lived products like cosmetics and clothing continued to accelerate on an annual basis, climbing 8.6 percent. Both are still much stronger than services inflation.

“We have in mind a big decline in goods prices,” said Roberto Perli, the head of global policy research at the investment bank Piper Sandler. “It would take a lot of increase in service prices to actually offset that.”

Outright declines in goods prices are not guaranteed. Take cars: Rapid price growth in new and used autos was a big driver of inflation last year, and many economists expect those prices to dip in 2022. But Jonathan Smoke, the chief economist at Cox Automotive, said that continued shortages meant prices for new cars were likely to continue rising, and that issues with new car supply could spill over to blunt the expected decline in used car costs.

And services inflation is now also coming in fast. It ran at 4.6 percent in the year through February, the quickest pace since 1991. If sustained, that is enough to keep inflation above the Fed’s 2 percent goal even if product prices stop accelerating.

While goods have taken up a bigger chunk of household budgets in recent months than they did before the pandemic, Americans still spend nearly twice as much on services as on goods overall.

“You don’t need a lot of extra services inflation to make up for your lost goods inflation,” Mr. Furman said.

Restaurants, hotels and other discretionary services aren’t the only places where persistent demand could run up against limited supply, Mr. Furman argued. Many nonurgent health care services saw a decline in demand during the pandemic and are now experiencing a rebound amid a shortage of nurses and other skilled workers.

Rent — which is the biggest monthly expense for many families and plays a big role in determining inflation overall — has also been rising at a rapid clip. In cities such as Tampa, Fla., Spokane, Wash., and Knoxville, Tenn., listed rents were up 30 percent or more in the fall from a year earlier, according to data from Apartment List.

Igor Popov, the chief economist at Apartment List, said the breakneck pace of new rent increases is unlikely to repeat itself this year. But many rents will be resetting at higher market rates this spring and summer, he said, adding that they are likely to continue rising as long as wages do.

“Rents are partially a function of what people are able and willing to pay,” Mr. Popov said.

The Fed’s recent move to raise interest rates — and its planned increases throughout the year — may cool off the housing market, which could eventually affect rents. But in the near term, higher interest rates might make purchasing homes expensive and out of reach for more people. That could temporarily increase rental demand.

Much hinges on what happens next with wages, and that is anyone’s guess.

Laura Rosner-Warburton, an economist at MacroPolicy Perspectives, said wages might be going through something of a “level reset,” where companies have been paying up in light of a newly tight labor market — in some cases, to get on a par with wages at Amazon or other big companies — but may not continue to lift pay so much month after month.

That may be what happened in accommodation and restaurants, she said, noting that both saw a surge in wage pressures that has since cooled off.


Americans still spend nearly twice as much on services — like meals at restaurants — than on goods.
Americans still spend nearly twice as much on services — like meals at restaurants — than on goods. Credit... Gabby Jones for The New York Times

Nick Bunker, the director of economic research for North America at the Indeed Hiring Lab, said conditions remained tight — there are 1.8 job openings for every active job seeker today — but the data suggest that labor shortages are no longer actively worsening, which could at least keep wage growth from accelerating further.

“The labor market is stronger, tighter, hotter than it was before the pandemic, but there are some signs that it is starting to level off,” he said.

It is also possible that higher wages will lure workers back into the job market, helping to offset labor shortages and allowing conditions to settle into a more sustainable path.

But the economy has repeatedly surprised economists and businesses over the past year — typically in ways that have stoked pay and inflation.

Mr. Manchester said many maid service executives had expected the labor crunch to ease when enhanced unemployment benefits from the federal government ended in September. But while there was some increase in willing workers, there was no sudden flood.

“Everyone is competing for hourly employees,” he said. “We’re competing with the Dunkin’ Donuts, the Home Depots, the Bed Bath Beyonds — anyone that relies on hourly workers.”

Red Square in Moscow last month. The U.S. Treasury Department issued new sanctions on Thursday aimed at interfering with Russia’s efforts to evade existing sanctions.


Red Square in Moscow last month. The U.S. Treasury Department issued new sanctions on Thursday aimed at interfering with Russia’s efforts to evade existing sanctions.
Red Square in Moscow last month. The U.S. Treasury Department issued new sanctions on Thursday aimed at interfering with Russia’s efforts to evade existing sanctions. Credit... Sergey Ponomarev for The New York Times

Alan Rappeport

WASHINGTON — The Treasury Department on Thursday leveled new sanctions on Russian technology companies and illicit procurement networks that the country is using to evade existing sanctions, expanding the Biden administration’s effort to punish Russia for its invasion of Ukraine by crippling its economy.

The new measures reflect the challenge that the United States and its allies continue to face in enforcing restrictions that have been imposed to cut off Russia’s central bank, financial institutions and oligarchs from the global financial system, and the need to disrupt Russian supply chains and efforts to conceal transactions.

“Russia not only continues to violate the sovereignty of Ukraine with its unprovoked aggression, but also has escalated its attacks striking civilians and population centers,” the Treasury secretary, Janet L. Yellen, said in a statement. “We will continue to target Putin’s war machine with sanctions from every angle until this senseless war of choice is over.”

Among the 34 organizations and individuals targeted are Serniya and Sertal, Moscow-based companies that illicitly procure dual-use equipment and technology for Russia’s defense sector.

The Treasury Department is also imposing sanctions on several technology companies that produce computer hardware, software and microelectronics that are used by Russia’s defense sector. Among them is Joint Stock Company Mikron, Russia’s largest chip-maker.

Adewale Adeyemo, the deputy Treasury secretary, foreshadowed the sanctions during a speech on Tuesday, when he said that Russia’s military industrial sector would be the next to face restrictions.

“We are planning to target additional sectors that are critical to the Kremlin’s ability to operate its war machine, where a loss of access will ultimately undermine Russia’s ability to build and maintain the tools of war that rely on these inputs,” Mr. Adeyemo said in his speech at Chatham House, an international affairs think tank in London. “In addition to sanctioning companies in sectors that enable the Kremlin’s malign activities, we also plan to take actions to disrupt their critical supply chains.”

A combine harvester in a wheat field in the Kyiv region of Ukraine.


A combine harvester in a wheat field in the Kyiv region of Ukraine.
A combine harvester in a wheat field in the Kyiv region of Ukraine. Credit... Valentyn Ogirenko/Reuters

Megan Specia

In the five weeks since Russia’s invasion began, Ukraine has missed out on at least $1.5 billion in grain exports, the country's deputy agriculture minister, Taras Vysotskiy, said on Thursday, the latest signal of the challenges facing the country, a major global grain exporter, because of the war.

International groups have warned that as the conflict continues, the detrimental impact on food security around the world could deepen as Ukraine’s exports falter. A substantial portion of the world’s wheat, corn and barley is stuck in Russia and Ukraine because of the war.

Mr. Vysotskiy, in a statement posted by the Ukrainian government, said that the country has 13 million tons of соrn and 3.8 million tons of wheat but cannot export them using its usual routes, as seaports are blocked.

“Currently, the ability to supply abroad has fallen to 0.5 tons of grain per month, because of which Ukraine has already lost $1.5 billion,” Mr. Vysotskiy said.

Wendy R. Sherman, the U.S. deputy secretary of state, said that the war posed “immediate and dangerous implications for global food security,” speaking during a United Nations Security Council meeting earlier this week.

Ukraine has three ways to export these grains that work around the Black Sea blockades — using ports on the Danube River, which flows into the country and stretches across Europe; by train; or by truck. Mr. Vysotskiy said that each has its own problems.

There is limited capacity in the Danube ports because Ukraine does not typically use them for exports. There are also issues with transport by train, as Ukraine has different track widths than are used elsewhere in Europe, so the country has to find narrower train cars for transport.

“We are currently actively working with European partners on this issue,” Mr. Vysotskiy said.

Antonio Guterres, the United Nations secretary general, warned earlier this month that the war in Ukraine was “already disrupting supply chains and causing the prices of fuel, food and transport to skyrocket.”

“We must do everything possible to avert a hurricane of hunger and a meltdown of the global food system,” he added.

Be on the lookout for increased phishing attempts this time of year — like this particularly obvious example.


Be on the lookout for increased phishing attempts this time of year — like this particularly obvious example.
Be on the lookout for increased phishing attempts this time of year — like this particularly obvious example.

Fraud is a year-round activity, but tax season brings an uptick in calculated schemes to steal money and personal information through spoofed messages and other means. Cybersecurity firms have also reported an increase in fraud attempts that exploit the conflict in Ukraine — a situation that has increased fears of potential cyberattacks on American companies. Our Tech Tip columnist, J.D. Biersdorfer, reports that you can better protect yourself if you know what’s out there. Here’s a guide.

  • Avoid the tax scam: The Internal Revenue Service doesn’t make first contact with taxpayers by email, text messages or social media channels to request personal or financial information — including bank-account or credit-card numbers, passwords, or PIN codes. Messages asking for that information are deceptive “phishing” attempts to steal money and identities.

  • Donate wisely: Opportunistic scammers are quick to take advantage of natural disasters and humanitarian crises, including the Covid-19 pandemic and the war in Ukraine. Be leery of messages from unfamiliar organizations requesting donations by credit card or cryptocurrency. Crowdfunding campaigns should be avoided or heavily scrutinized unless you know the organizer.

  • Report a scam attempt: If you get unsolicited email pretending to be from the I.R.S., you can report it by forwarding the message to You can make a general fraud report on the Federal Trade Commission’s site. Gmail and include menus to report phishing attempts, while Yahoo has a form to fill out.

  • Be wary: As the Federal Trade Commission notes, the common signs of a scam usually include someone who impersonates a familiar organization and tells you there’s a problem (or, sometimes, a prize). The scammer pressures you to act immediately and demands payment in a specific way.

READ MORE on how to protect yourself from common scams this spring →



Credit Credit... By Stephan Dybus

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