What’s Got Economists Rooting for a Slowdown

Are there too many jobs?

This morning, the Labor Department is reporting how many jobs employers added in May. Yesterday, data from payroll operator ADP signaled a significant drop-off in hiring. But the official employment report showed that companies added 390,000 jobs to their payrolls last month, the 17th straight monthly gain. That will disappoint some economists who believe a slowdown now could be a good thing.

Normally, when hiring slows it’s a troubling sign for the economy as a whole, but these are not normal times. With nearly twice as many open jobs as available workers and inflation running at its fastest pace in four decades, many economists and policymakers say a slowdown is just what the economy needs, reports The Times’s Ben Casselman.

That makes interpreting this morning’s jobs number trickier than usual. While the overall jobs number — how many employees were added or cut from corporate payrolls — usually gets the most attention, that may not be the case this month. The key factor to look for is how the supply of workers and the demand of employers interacted. For instance, the ADP report showed that most small businesses reduced their payrolls in May, but economists believe that was the result of not being able to find the right workers, not because hiring for those firms has stopped.

Here are two numbers economists will be looking at:

• An increase in the labor force participation rate from April’s 62.2 percent could mean the labor market is coming back into balance, even if overall job gains are slower than hoped.

• And with inflation worries still running hot, expect there to be a lot of eyes on wages. Pay was up 5.5 percent from a year ago in April, which was the biggest jump since the early 1980s. A drop in that number would be a positive sign, at least to economists, that inflation is getting under control. Workers, however, might have different thoughts.

Nonetheless, a cooling economy carries its own risks. If the recovery slows too much, it could undo much of that progress. However, the Biden administration argues that the rapid economic recovery we have had is not sustainable, and that a cooling job market is welcome. That’s what will lead to “more economic opportunities and more economic security for middle-class families than the prepandemic economy did,” Brian Deese, a top economic adviser to Mr. Biden, told The Times.

For full coverage of today’s jobs report, see The Times’s special briefing, which will be updated throughout the day.

HERE’S WHAT’S HAPPENING

Elon Musk reportedly wants to cut 10 percent of Tesla jobs. The Tesla C.E.O. wrote in an email to executives yesterday that he had a “super bad feeling” about the economy, according to Reuters. The email, which was titled, “pause all hiring worldwide,” came days after Musk told staff members to return to the office full time or to “pretend” to work somewhere else.

The New York State Legislature passes a crypto mining moratorium. In the early hours of Friday, New York lawmakers passed a bill to ban certain bitcoin mining operations, a measure intended to curb the state’s carbon footprint. If Gov. Kathy Hochul signs the bill into law, New York would become the first state to ban blockchain technology infrastructure.

Frontier Airlines sweetens the terms of its proposal to merge with Spirit Airlines. Frontier’s offer to pay a $250 million breakup fee if regulators don’t approve the merger comes days after Institutional Shareholder Services, which advises large investors, advised Spirit shareholders to vote against a proposed merger with Frontier in favor of a competing offer from JetBlue Airways. JetBlue had already pledged to pay Spirit a $200 million breakup fee if its merger isn’t approved.

Ford invests $3.7 billion in its U.S. factories. The automaker said yesterday that it was adding 6,200 union manufacturing jobs in Michigan, Ohio and Missouri, and that much of its investment would go toward factories building electric vehicles.

President Biden calls for assault weapon bans. In a rare White House evening address yesterday, he also called on Congress to expand background checks after the mass shootings in Texas and New York. Neither of those measures are seen as likely to pass in Congress, where fierce Republican opposition has stood in their way.

Crypto’s hiring spree gets put on cryo

Crypto companies, which until recently were on a recruiting spree, picking up developers, lawyers and lobbyists, have just as rapidly put those plans on ice, or in some cases reversed them.

Yesterday, two of the highest-profile companies in crypto pressed pause on their expansion plans.

• Coinbase said it was indefinitely extending a hiring freeze that the crypto exchange had put in place two weeks ago. That freeze, the company said, included any recent job offers the company had made, which “with limited exceptions,” have been rescinded. “It made sense for us to take stronger action to manage our expenses,” a company spokesman told DealBook.

• Gemini, which was founded by Cameron and Tyler Winklevoss, of Facebook fame, said yesterday that it was laying off 10 percent of its staff. “This is where we are now, in the contraction phase that is settling into a period of stasis — what our industry refers to as ‘crypto winter,’” the Winklevoss twins said in a blog post. Separately, also yesterday, the C.F.T.C. accused Gemini of making misleading statements about a proposed crypto product in 2017. A company spokeswoman said the layoffs and the C.F.T.C. case were not connected, and that the company looks forward to proving it followed the law.

Exchanges everywhere are shedding employees. Coinbase-backed Rain Financial in the Middle East is reportedly laying off dozens. Last week, the Latin American exchange Bitso dropped more than 10 percent of workers. The crypto derivatives platform BitMEX has shed people, as has the Argentine exchange Buenbit, and crypto-friendly Robinhood, the online stockbroker that offers some digital assets, announced in late April that it would lay off 9 percent of full-time workers.

But some may go the other way. “If anything we’ll be more aggressive in this economic environment given the opportunities,” Sam Bankman-Fried, the founder of the FTX exchange, told DealBook. The company deliberately slowed growth about six months ago and is profitable, he added. Bankman-Fried expects his company will speed up hiring again “sometime soon.” Similarly, a spokeswoman for the exchange Binance said it planned to keep growing. The “cooler markets,” she said, offer a chance “to gain access to some of the industry’s best talent.” The crypto arm of Fidelity Investments, too, is adding tech workers.

The debate over “greedflation”

Since prices started to escalate a year ago, politicians and economists have seized on inflation to tell their preferred story about what’s going wrong in the economy, and what fixes would be needed, reports The Times’s Lydia DePillis.

The White House and progressive economists have landed on something they have dubbed “greedflation.” They contend that increasingly dominant corporations are taking the opportunity to jack up prices, which is squeezing consumers and supercharging inflation. They say industries have become too concentrated and companies have too much power. The fix: A return to trust busting, which the Biden administration appears to be gearing up to do.

Others say what is really happening is that unusual factors have pushed supply and demand far more out of line than they have been in decades. A pandemic, a trade war, a land war, huge government spending and a global economy that’s become vastly more integrated might be too complex for traditional macroeconomic theory to explain, but still just part of a normal economic cycle. The fix: Allow the Fed, as it is doing, to raise interest rates, to slow the economy.

What do you think? Is “greedflation” or the straightforward laws of supply and demand driving inflation? Let us know: dealbook@nytimes.com.

“People have just moved on from seeing women’s work lives as being determined by their own gumption.”

— Katha Pollitt, the feminist columnist, who recalled that many friends, and her own daughter, had found Sheryl Sandberg’s “Lean In” to be full of wise advice when it came out.

A Meta-mystery: Who’s now No. 2?

Sheryl Sandberg’s departure from Meta this week raised a number of questions, including who would succeed the tech giant’s founder, Mark Zuckerberg, should he decide, or be forced, to leave.

That, of course, is not likely to happen anytime soon. When Sandberg was chief operating officer she effectively ran all of the business operations while Zuckerberg focused on developing Facebook’s products. But Zuckerberg, 38, with more than 18 years experience under his belt, appears to want to be identified more clearly as Meta’s sole leader. Meta “has reached the point where it makes sense for our product and business groups to be more closely integrated,” Zuckerberg wrote in a Facebook post yesterday.

But scandals and unforeseen events have pushed other powerful executives out of their jobs. Sandberg’s departure, for example, once seen as unlikely, comes after recent friction with the company, The Wall Street Journal reported. She had been under review by Meta for pressuring a British tabloid several years ago not to publish an article about her boyfriend at the time, Bobby Kotick, the C.E.O. of Activision Blizzard, the WSJ reported. The company had also been reviewing her use of corporate resources to plan her upcoming wedding to Tom Bernthal, the article said, citing unnamed sources. A Meta spokeswoman said these factors were not related to her decision to leave. The WSJ reported that Sandberg had been feeling burned out and increasingly disconnected from the company.

That adds some importance to the executives Zuckerberg is promoting in the wake of Sandberg’s exit. That’s true even if it would be hard to call any of them a clear No. 2. Zuckerberg named Javier Olivan, a longtime executive, to take over Sandberg’s job. But unlike Sandberg, Olivan will be one of four top lieutenants who have equally large responsibilities and who answer to and run major decisions by Zuckerberg, write The Times’s Sheera Frenkel and Mike Isaac. The three other executives are Andrew Bosworth, the chief technology officer; Nick Clegg, the president of global affairs; and Chris Cox, the chief product officer.

THE SPEED READ

Deals

Policy

• President Biden will make it easier for states and tribes to block gas pipelines. (NYT)

• E.S.G. is the hottest trend on Wall Street. It’s also protectionism. (Bloomberg Opinion)

• OPEC said it would increase oil supply, but economists questioned whether it was enough to bring down high gas prices. (NYT)

Best of the rest

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