1 big thing: Feeling the pinch

Illustration of a gas station covered in an American flag

2. Catch up quick

3. Monopolies' role in inflation

4. It's expensive to be the U.S.

5. Crypto buys attention in Davos

⛅️Morning folks. Matt here. Plenty of economic data due this morning, with updates on GDP, pending home sales and jobless claims on tap. We already know lower-income Americans are feeling the pressure of rising inflation, which we detail below. 

Plus, we’re talking monopoly, government debt and crypto excess in Davos. 

Today's newsletter, edited by Kate Marino, is 1,154 words, 4.5 minutes.

National

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Stay on top of the latest market trends and economic insights

Axios Markets

1 big thing: The Fed ate the housing boom 

2. Chart:  New housing backlog builds  

3. Catch up quick

4. Jobs strength

5. 🛒 Everyone loves groceries 

Good morning everyone. It's Emily. We're here with the latest on housing and jobs today, as ever. But what happened yesterday in Texas is weighing on my mind — and my heart. Sometimes there are no words.

Today's newsletter is 954 words, 4 minutes.

1 big thing: Why Sri Lanka matters

Illustration of a pile of Sri Lankan rupees with a hole torn in the center

2. Sovereign debt wild card: China

4. More evidence of housing pullback

5. Digital dollar warning

TGIF people. Today, Kate Marino explains what's going on in Sri Lanka, and surfaces a new wild card in the sovereign debt world. But first, some business: We'll be off on Monday for Memorial Day.

Today's newsletter is 1,078 words, 4 minutes.

Have a great long weekend folks! We'll be back here on Tuesday.

1 big thing: Workers with disabilities struggle to find jobs

3. Another borrower squeeze 

4. Bond market warning signals

5. Axios Harris Poll 100: Brands poisoned by politics

😎 Rise and shine Markets friends! It's Tuesday and, with some inspiration from British Prime Minister Boris Johnson, we're looking forward to walking downstairs to the fridge, and hacking off a small piece of cheese for a snack. 

Today's newsletter, edited by Kate Marino, is 1,096 words, 4.5 minutes.

1 big thing: Shrinking growth forecasts

Illustration of a pair of hands holding binoculars 

3. Remote work drove home price surge — report 

4. Charted: 🐶 Memecoins!

Morning. It's Matt. The Fed's trying to slow the economy, and guess what? It seems like the economy is slowing. Also, quantifying the impact of WFH on home prices. Plus, dogecoin and Shiba for crypto-lolz. Happy Monday! 

Today's newsletter, edited by Kate Marino, is 1,025 words, 4 minutes.

High levels of corporate concentration — where just a few companies make up an entire industry — contribute to inflation, finds a new paper from economists at the Federal Reserve Bank of Boston.

Why it matters: There's currently a raging debate over what exactly is causing record inflation in the U.S. This paper, coming from a less partisan source than, say, the White House, boosts the arguments of Democratic lawmakers and progressive economists who say companies are taking advantage of this moment to push prices up.

Details: The paper's authors looked at company data from 2005 to 2018 in 35 industries to see how businesses of varying sizes within sectors reacted to "positive cost shocks" (when the price to make stuff goes up). 

In more concentrated industries, companies passed 25 percentage points more of those costs on to consumers. 

The paper's estimates are "conservative," the authors write, because concentration increased sharply after 2018.

The US economy is at least 50% more concentrated today than in 2005, they write.

Crucial: The authors are not arguing that monopoly power causes inflation, but that it's "an amplifying factor" that allows companies to pass on more of the costs of "supply shortages, energy price shocks, and labor market tightness."

The other side: Many economists — notably Larry Summers — argue that inflation has more to do with supply chains, record pandemic-driven demand and increasing wages for workers. 

Of note: The paper doesn't name specific industries, but the issue of corporate concentration is of particular urgency in the current baby formula shortage crisis.

Just four companies — Abbott Laboratories, Mead Johnson, Perrigo and Nestle — account for more than 87% of the market, according to IBISWorld, as Axios' Nathan Bomey recently reported.

Similarly, just four companies supply about 70% of the beef in the U.S., according to data from the North American Meat Institute cited by Reuters. The White House argues that helped drive the huge increases in meat prices last year.

What to watch: A more detailed version of this Boston Fed paper is forthcoming.

New paper finds monopolies contribute to inflation

Companies in the most concentrated industries pass along 25 percentage points more of their costs

Monopolies

High levels of corporate concentration — where just a few companies make up an entire industry — contribute to inflation, finds a new paper from economists at the <a class="gtmContentClick" data-vars-link-text="Federal Reserve Bank of Boston" data-vars-click-url="https://www.bostonfed.org/publications/current-policy-perspectives/2022/cost-price-relationships-in-a-concentrated-economy.aspx" data-vars-content-id="4475af59-78a7-43f9-b056-c02b2bd69478" data-vars-headline="New paper finds monopolies contribute to inflation" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.bostonfed.org/publications/current-policy-perspectives/2022/cost-price-relationships-in-a-concentrated-economy.aspx" target="_blank">Federal Reserve Bank of Boston</a>.Why it matters: There&#x27;s currently a raging debate over what exactly is causing record inflation in the U.S. This paper, coming from a less partisan source than, say, the White House, boosts the arguments of Democratic lawmakers and progressive economists who say companies are taking advantage of this moment to push prices up.

After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

Economy & Business

Data: Chicago Board of Trade, FactSet; Chart: Simran Parwani/Axios

Bread is one of the more crucial ingredients in maintaining world stability — and it's getting dangerously expensive.

Why it matters: As food prices rise around the world due to the war, extreme weather and inflation, more countries are putting these kinds of export controls in place — but that only exacerbates the issue.

At least 43 such protectionist measures have been implemented since the Russian invasion, according to data cited by the New York Times earlier this month. 

These include restrictions put in place by Russia and its ally, Belarus, along with Indonesia's ban on palm oil exports and China's prohibition on fertilizer exports.

Driving the news: Wheat prices surged to near record-high levels Monday after India said it would ban exports as it deals with an extended, climate-change-driven heat wave. 

What they're saying: "These measures threaten to further tighten global supplies, and will create price pressure on food as we head further into 2022," Kelly Goughary, a senior research analyst at Gro Intelligence, tells Axios. 

Goughary hasn't seen this level of export controls in her 15 years in the industry.

State of play: Russia's invasion of Ukraine cut off exports from that region — responsible for more than a quarter of the world's supply — and sent buyers scrambling to find other source countries, like India. 

India is the ninth-largest wheat exporter in the world, according to USDA stats.

Initially, Indian officials said the country would increase wheat production, before reversing course on Saturday.

Zoom out: There are few commodities more important than wheat, as Axios wrote in March. Rising prices for bread have led to social unrest throughout history from the French and Russian revolutions to the Arab spring. 

Over the weekend, bread prices sparked protests in Iran, Reuters reported.

What to watch: More headwinds in the wheat market are coming, Goughary said. There are issues with drought in France that could drive up prices, while production in the U.S. is down. 

The U.S. is not a big exporter of wheat because it's too costly to ship overseas, but it's a supplier of "last resort," she added. 

Editor's note: This story originally published on May 17.

Food protectionism is on the rise

More countries are putting these kinds of export controls in place — but that only exacerbates the issue

Food

The real estate frenzy is over

"The market's shifted from irrational to more rational."

Real estate

Looks like America&#x27;s home buying binge is winding down. There&#x27;s a vibe shift visible in both the official data and in the anecdata from sellers, buyers and brokers.Why it matters: This is just what Jerome Powell ordered. The slowdown means the Fed&#x27;s rate hikes are working — cooling demand in an overheated market.

Axios Media Trends

Data: The Harris Poll; Chart: Kavya Beheraj/Axios

Grocery brands like Trader Joe's, Wegmans and H-E-B are some of the most reputable companies in America, transcending generational and political divides, according to this year's Axios Harris Poll 100.

Why it matters: At a time when politics divides opinion nationally on many big brands, grocery brands have been able to maintain loyalty and trust across demographics by maintaining a steady presence in their communities. 

The Axios Harris Poll 100 is an annual survey to gauge the reputations of the most visible brands in the country.

Details: For the first time in the poll’s six-year history, three grocery brands —Trader Joe’s, H-E-B and Wegmans — landed in the poll’s top 10. 

Survey respondents noted that these brands have especially high commitment to “citizenship," meaning they share community values. Grocery brands also were the most consistently high performers compared to other sectors. 

Other grocers, like Kroger, Publix and Costco, also ranked in the top 20 most reputable companies. 

Between the lines: Grocery stores rank highly amongst Democrats and Republicans, despite some brands having more of a political affiliation among consumers. 

Trader Joe’s ranks in the top 10 companies among Democrats and Republicans alike. H-E-B, despite its roots in Texas and the Southeast U.S., ranks second to Trader Joe's across the board. 

Wegmans and Trader Joe's have long maintained a cult-like status among shoppers devoted to their stores. Both chains have expanded in recent years.  

Zoom out: Not so long ago, it was mostly women who did the grocery shopping in American households. Now everyone goes to the market. 

92% of U.S. adults are responsible for at least some of their household's grocery shopping, according to a report out Tuesday from FMI, the food industry association. 

That means these brands are firmly rooted in people's every day lives — even throughout the pandemic, which changed so many Americans' habits.

"Food has come to be appreciated as a requirement and a respite," the report says.

Grocery brands surge in popularity

Trader Joe's, Wegmans and H-E-B topped the rankings in the latest Axios Harris Poll 100.

Axios-Harris Poll 100

Grocery brands like Trader Joe&#x27;s, Wegmans and H-E-B are some of the most reputable companies in America, transcending generational and political divides, according to this year&#x27;s <a class="gtmContentClick" data-vars-link-text="Axios Harris Poll 100" data-vars-click-url="https://www.axios.com/2022/05/24/2022-axios-harris-poll-100-rankings" data-vars-item="in_content_link" href="https://www.axios.com/2022/05/24/2022-axios-harris-poll-100-rankings" target="_self">Axios Harris Poll 100</a>.Why it matters: At a time when politics <a class="gtmContentClick" data-vars-link-text="divides opinion" data-vars-click-url="https://www.axios.com/2022/05/24/axios-harris-poll-100-corporate-brands-politics?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=newsletter_axiosam&amp;stream=top" data-vars-item="in_content_link" href="https://www.axios.com/2022/05/24/axios-harris-poll-100-corporate-brands-politics?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=newsletter_axiosam&amp;stream=top" target="_self">divides opinion</a> nationally on many big brands, grocery brands have been able to maintain loyalty and trust across demographics by maintaining a steady presence in their communities.

Data: BLS; Note: Not seasonally adjusted; Chart: Axios Visuals

Even in a remarkably tight labor market, Americans with disabilities are struggling to land jobs.

Why it matters: These are folks who are willing and able to work, and getting them into jobs would help alleviate the labor shortage. 

The big picture: Individuals with disabilities have always faced higher unemployment rates, in no small part because of employer discrimination and biases in the hiring process. 

What's new: In tight labor markets, the gap between unemployment rates for people with and without disabilities typically narrows. Yet now the gap is widening, as the chart above shows. There are a few factors that could help explain this:

Sectors like retail or hospitality that are most acutely in need of workers are more challenging for people with disabilities — they might be more physically demanding or require longer hours.

Plus, COVID risk is still something that many of these folks have to consider.

Meanwhile, more Americans have disabilities now. The pandemic drove a surge in the number of disabled people in the U.S, many of whom suffer from long COVID.  

State of play: In April, 8.3% of disabled Americans were unemployed, compared with 3.1% of those without a disability.

The labor department relies on a monthly survey to figure out the number of workers with disabilities, asking respondents to identify whether anyone in their household is deaf, blind, or has difficulty walking, for example. 

A report released Tuesday morning by the Center for American Progress finds that removing obstacles for disabled workers would strengthen the labor market.

If disabled workers were employed at the same rate as those without a disability, nearly 14 million more would have been working in 2021, according to the analysis in the report. 

The report also found that Black and Hispanic workers with disabilities saw higher unemployment rates than their white counterparts in 2021.

What they're saying: Stephanie Corrigan, a 40-year-old woman with a disability, tells Axios that "it's only been ghosting and silence from companies." She's applied to around 200 jobs in graphic design with no luck since 2020. She usually discloses her disability in applications when asked. 

She's received advice not to disclose because employers could be turned off, Corrigan says. But she worries that disclosing after the fact would also imperil her job prospects.

"There's discrimination at all levels of the pipeline," said Mia Ives-Rublee, the director of the disability justice initiative at the Center for American Progress who coauthored the report.

For instance, job requirements could be listed that would discourage those with a disability, but that actually aren't relevant to the job. Say, a note that you'd have to lift 25 pounds for an office job. 

Employers might not provide accommodations in an interview. 

Or, there's just flat out bias: "They see you as a disabled person and decide you can't do the job," she said.

Worth noting: Discrimination isn't the only factor at play. Americans with disabilities often work part-time — or not at all — so they don't lose access to Medicaid or social security benefits, which have strict and low limits on how much you can earn. Advocates like Ives-Rublee are seeking to change those rules.  

What to watch: The EEOC recently warned employers about the potential for discrimination in using algorithms or online job applications to screen candidates. For example, an employer's online application might not work with a blind applicant's computer screen reader. 

"New technologies should not become new ways to discriminate," chairwoman Charlotte Burrows said in a statement.

Disabled workers are struggling to get jobs, even in a labor shortage

Typically, the gap in unemployment rates for people with and without disabilities narrows at moments like these. But this time is different.

Jobs

Unemployment rates for people with and without a disability

Even in a remarkably tight labor market, Americans with disabilities are struggling to land jobs.Why it matters: These are folks who are willing and able to work, and getting them into jobs would help alleviate the labor shortage.

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Stories

The real estate frenzy is over

New paper finds monopolies contribute to inflation

Grocery brands surge in popularity

Disabled workers are struggling to get jobs, even in a labor shortage

Food protectionism is on the rise

Newsletter editions

💰 Doom loop

💰 The pinch

Housing frenzy is over

"Ghosting and silence"

⚠️ Tapping the brakes