Eric Rosengren, president of the Federal Reserve Bank of Boston, said his outlook for the U.S. economy has improved this year despite the recent Covid-19 outbreaks associated with the Delta variant, and he expects strong hiring to allow the central bank to soon begin reversing the extremely accommodative monetary policy adopted at the height of the coronavirus pandemic.

The Fed could be in a position to start reducing its $120 billion in monthly asset purchases this fall and, if strong economic growth continues, the Fed might be able to end those purchases toward the middle of 2022, Mr. Rosengren said in an interview on Thursday, August 12.

Here is a partial transcript of the interview, lightly edited for clarity and length.

NICK TIMIRAOS, The Wall Street Journal: Can you walk me through how your outlook for the economy and for policy changed since March of this year?

ERIC ROSENGREN, Boston Fed: So it’s changed in a couple of ways. One, we’ve...

Federal Reserve Chairman Jerome Powell said it remains to be seen how the U.S. economy will weather the recent Covid-19 surge, in comments that offered no views on the outlook for monetary policy.

“It’s not yet clear whether the Delta [coronavirus] strain will have important effects on the economy; we’ll have to see about that,” Mr. Powell told students and teachers Tuesday during a virtual event held by the central bank.

Mr. Powell’s comments on the health situation follow those he made on the topic after the Fed’s policy meeting in late July. He said then that “with successive waves of Covid over the past year and some months now, there has tended to be less economic—less in the way of economic implications from each wave, and we will see whether that is the case with the Delta variety.” He added, “We don’t have a strong sense of how that might work out. So we’ll just be monitoring it.”

Mr. Powell, in a question-and-answer session with students and...

Federal Reserve Chairman Jerome Powell said it remains to be seen how the U.S. economy will weather the recent Covid-19 surge, in comments that offered no views on the outlook for monetary policy.

“It’s not yet clear whether the Delta [coronavirus] strain will have important effects on the economy; we’ll have to see about that,” Mr. Powell told students and teachers Tuesday during a virtual event held by the central bank.

Mr. Powell’s comments on the health situation follow those he made on the topic after the Fed’s policy meeting in late July. He said then that “with successive waves of Covid over the past year and some months now, there has tended to be less economic—less in the way of economic implications from each wave, and we will see whether that is the case with the Delta variety.” He added, “We don’t have a strong sense of how that might work out. So we’ll just be monitoring it.”

Mr. Powell, in a question-and-answer session with students and...

Spending at U.S. retailers fell sharply in July, amid cooling purchases of goods and signs of some pullback in consumer demand as U.S. Covid-19 cases tied to the Delta variant rose.

Retail sales—a measure of purchases at stores, at restaurants and online—fell 1.1% last month compared with June, the Commerce Department reported Tuesday. Excluding autos—a category where supply-chain issues have limited available inventory—sales were down 0.4%.

Tuesday’s report suggested Americans continued to shift spending toward services in July. Sales dropped across several categories, primarily autos—which was down 3.9%—but also clothing, sporting goods and furniture. The retail sales figures capture spending mostly on goods, and don’t include services such as travel, entertainment and recreation.

Restaurants and bars were a bright spot, with sales rising 1.7% over the month, while sales at nonstore retailers—a proxy for online retail sales—fell 3.1%.

Retail...

Repercussions from the Delta variant of Covid-19 are starting to ripple across companies, raising staffing costs in senior housing, disrupting production of potato chips and leading some companies to rein in profit projections.

Still unclear: whether the highly contagious strain of the virus will be a momentary stumble in an improving global economy—one that businesses and consumers are now better equipped to handle—or something more serious.

In recent weeks, Kellogg Co. said Delta’s spread in Malaysia slowed production of Pringles there. Online travel company Booking Holdings Inc. said overall bookings declined as Delta took root in July. U.S. healthcare companies say elective medical procedures are slowing once again in some places.

And, as more employers postpone their return to offices, the outlook is darkening for such disparate companies as a 25-person Houston cable installer and a company with a $1.3 billion market-capitalization that sells...

Federal Reserve Chairman Jerome Powell said the coronavirus pandemic has borne down particularly hard on the nation’s students and educators and will change how young people view the world and their place in it.

America’s schoolchildren “have been forced, sooner than most people, to consider what in life is truly important,” Mr. Powell said in the text of a speech prepared for delivery before a gathering of educators and students Tuesday. He didn’t comment on monetary policy or the economic outlook in his prepared remarks.

With the experience gained in the pandemic, “I hope this will cause you to think about how you want to make your mark, knowing that things do change, and sometimes they change quickly,” Mr. Powell said. “This is an extraordinary time, and I believe that it will result in an extraordinary generation,” he added.

Mr. Powell weighed in as he and his colleagues are preparing for a pullback in the support the central bank has been offering...

Spending at U.S. retailers fell sharply in July, amid cooling purchases of goods and signs of some pullback in consumer demand as U.S. Covid-19 cases tied to the Delta variant rose.

Retail sales—a measure of purchases at stores, at restaurants and online—fell 1.1% last month compared with June, the Commerce Department reported Tuesday. Excluding autos—a category where supply-chain issues have limited available inventory—sales were down 0.4%.

Tuesday’s report suggested Americans continued to shift spending toward services in July. Sales dropped across several categories, primarily autos—which was down 3.9%—but also clothing, sporting goods and furniture. The retail sales figures capture spending mostly on goods, and don’t include services such as travel, entertainment and recreation.

Restaurants and bars were a bright spot, with sales rising 1.7% over the month, while sales at nonstore retailers—a proxy for online retail sales—fell 3.1%.

Retail...

House Speaker Nancy Pelosi (D., Calif.) on Sunday asked a top committee to look at moving forward on a $1 trillion bipartisan infrastructure bill along with the $3.5 trillion budget framework in an effort to balance the demands of her party’s ideological factions.

The request came after nine centrist House members said Thursday they “will not consider voting for a budget resolution until” the House approves the infrastructure bill.

The threat complicated the timeline Mrs. Pelosi had previously set. She had said the infrastructure package wouldn’t move ahead until Senate passage of the $3.5 trillion antipoverty and healthcare legislation. Progressives have demanded that the two move on parallel tracks to guarantee their priorities.

“I have requested that the Rules Committee explore the possibility of a rule that advances both the budget resolution and the bipartisan infrastructure package. This will put us on a path to advance the infrastructure...

What's News brings you the headlines and business news that move markets and the world—twice every weekday. In 10-12 minutes, get caught up on the best Wall Street Journal scoops and exclusives, with insight and analysis from the award-winning reporters that broke the stories. Hosted by Annmarie Fertoli and Marc Stewart.

The federal government has declared the first-ever shortage of water on the Colorado River, triggering cutbacks in several states that will hit farmers particularly hard during a drought that has punished the Southwest with little letup since the turn of the century.

The U.S. Bureau of Reclamation made the declaration Monday after forecasting that Nevada’s Lake Mead, the river’s biggest reservoir, would remain below 1,075 feet above sea level—the mark previously set to trigger mandatory cutbacks—through at least early next year. As of Monday, Lake Mead measured 1,068 feet, the lowest since the reservoir was created by construction of the Hoover Dam in the 1930s. The bureau estimates the level will dip further to 1,066 by Jan. 1 next year.

The cuts, set to take effect in 2022, will primarily affect Arizona, which stands to lose 512,000 acre-feet, or 18% of its annual allocation—enough water to meet the annual household needs of a city the size of Phoenix....

Tens of thousands of downtown small businesses that have been scraping by were eagerly awaiting the week of Labor Day, when many companies expected that their employees would return to the office.

Now, the Covid-19 Delta variant is dashing hopes that workers will be back in large numbers, causing these business owners to scramble again to make rent payments and keep their operations alive.

Some are scaling back staff hours, postponing hiring or making additional cuts so they can hold on. Others say they are ready to shut their doors for good if return-to-work plans fizzle in the coming weeks.

“They were hanging on by their fingernails to get to September,” said Bob Luz, chief executive of the Massachusetts Restaurant Association. “We’re greatly concerned they’re not going to make it.”

The survival of corner retail stores, coffee shops and restaurants is being watched closely by office-building owners, who are counting on traditional work patterns...

Spending at U.S. retailers fell sharply in July, amid cooling auto purchases and signs of some pullback in consumer demand as U.S. Covid-19 cases tied to the Delta variant rose.

Retail sales—a measure of purchases at stores, at restaurants and online—fell 1.1% last month compared with June, the Commerce Department reported Tuesday. Excluding autos—a category where supply-chain issues have limited available inventory—sales were down 0.4%.

Sales dropped across categories, primarily autos, but also clothing, sporting goods and furniture.

Restaurants and bars were a bright spot, with sales rising 1.7% over the month.

Retail sales rose briskly earlier in the summer as shoppers directed spending toward services, such as dining out and traveling, and away from goods. That shift occurred as more Americans became vaccinated and state and local governments eliminated many Covid-19-related restrictions, some of which have now been reimposed with the recent...

Home prices surged in almost every corner of the U.S. in the second quarter as robust demand continued to overwhelm the supply of homes for sale.

While the homebuying frenzy has shown signs of a slowdown in recent months, home-price growth has yet to cool.

The median sales price for single-family existing homes was higher in the second quarter compared with a year ago for 182 of the 183 metro areas tracked by the National Association of Realtors, the association said Thursday. In 94% of those metro areas, median prices rose by more than 10% from a year earlier.

Nationwide, the median single-family existing-home sales price rose 22.9% in the second quarter to $357,900 from a year ago, a record in data going back to 1968, NAR said.

Home prices have climbed in the past year as low interest rates and increased remote work spurred new homebuying demand. At the same time, the inventory of homes on the market has dropped as potential sellers canceled or...

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The metropolitan area competing for the tightest labor market in the nation isn’t a tech hub on the West Coast, or a boomtown in Texas. It is Birmingham, Ala., a southern city with an unemployment rate that is nearly half the national level and similar to Salt Lake City’s.

Birmingham, the most populous metro area in Alabama, had the second-lowest unemployment rate of metropolitan areas with more than one million people in June, according to the Labor Department’s latest rankings. Its seasonally adjusted unemployment rate for that month was 3.1%, near its pre-pandemic level of 2.4% in February 2020, and slightly above Salt Lake City’s 2.8% rate for June. Birmingham’s June unemployment rate was lower than other southern cities such as Atlanta, Charlotte and Houston—and compares with July’s national rate of 5.4%.

Economists say the city’s diversified economy, Alabama’s relatively relaxed Covid-19 restrictions and resilient consumer behavior have helped the...

EL PASO, Texas—When the Covid-19 pandemic caused the U.S.-Mexico border to shut down in the spring of 2020, many retail and other businesses on the U.S. side lost a swath of customers. Gregoria Flores is still waiting for their return.

Ms. Flores’ store, Novedades Yeya’s, sits a few blocks away from the Paso del Norte port of entry in downtown El Paso. She estimates that before border restrictions banned nonessential travel, about 90% of her customers were Mexican nationals from the neighboring city of Ciudad Juárez  who would regularly cross into El Paso to shop, eat or visit family.

Now, the stretch of South El Paso Street where Ms. Flores’s shop is located sees fewer border crossers than in pre-pandemic times, and further away from the port, foot traffic is sparser, she, other business owners and employees said.

While retail, restaurants and other establishments have been springing back to life across much of the U.S. as more people get...

Repercussions from the Delta variant of Covid-19 are starting to ripple across companies, raising staffing costs in senior housing, disrupting production of potato chips and leading some companies to rein in profit projections.

Still unclear: whether the highly contagious strain of the virus will be a momentary stumble in an improving global economy—one that businesses and consumers are now better equipped to handle—or something more serious.

In recent weeks, Kellogg Co. said Delta’s spread in Malaysia slowed production of Pringles there. Online travel company Booking Holdings Inc. said overall bookings declined as Delta took root in July. U.S. healthcare companies say elective medical procedures are slowing once again in some places.

And, as more employers postpone their return to offices, the outlook is darkening for such disparate companies as a 25-person Houston cable installer and a company with a $1.3 billion market-capitalization that sells...

Spending at U.S. retailers likely fell in July, amid cooling auto purchases and signs of some pullback in consumer demand as Covid-19 cases tied to the Delta variant rose, economists say.

Economists surveyed by The Wall Street Journal estimate the Commerce Department will report Tuesday that retail sales—a measure of purchases at stores, at restaurants and online—fell by 0.3% last month compared with June. Excluding autos—a category where supply-chain issues have limited available inventory—sales are estimated to have risen by 0.2%.

Retail sales rose briskly in June, as shoppers directed spending toward services, such as dining out and traveling, and away from goods. That shift occurred as more Americans became vaccinated and state and local governments eliminated many Covid-19-related restrictions, some of which have now been reimposed with the recent rise in coronavirus cases.

Pooja Sriram, U.S. economist at Barclays, said she expects increased...

EL PASO, Texas—When the Covid-19 pandemic caused the U.S.-Mexico border to shut down in the spring of 2020, many retail and other businesses on the U.S. side lost a swath of customers. Gregoria Flores is still waiting for their return.

Ms. Flores’ store, Novedades Yeya’s, sits a few blocks away from the Paso del Norte port of entry in downtown El Paso. She estimates that before border restrictions banned nonessential travel, about 90% of her customers were Mexican nationals from the neighboring city of Ciudad Juárez  who would regularly cross into El Paso to shop, eat or visit family.

Now, the stretch of South El Paso Street where Ms. Flores’s shop is located sees fewer border crossers than in pre-pandemic times, and further away from the port, foot traffic is sparser, she, other business owners and employees said.

While retail, restaurants and other establishments have been springing back to life across much of the U.S. as more people get...

Many coffee drinkers can expect to pay more for their cup of joe at supermarkets and cafe registers, as producers grapple with higher coffee bean prices, constrained supplies and other costs.

Retail brands like Folgers, as well as independent coffee chains, are raising prices or plan to soon, executives said. Starbucks Corp. and Nestlé SA have said they could increase prices, while other coffee sellers try to hold prices steady, aiming to capture more business.

Coffee roasters and cafe operators are responding to poor harvests in major coffee-growing regions and logistics snarls that executives said have constrained bean supplies, delayed shipments and boosted costs. Companies are also raising wages to recruit and retain workers.

The supply chain issues are likely to worsen as a cold snap in Brazil, the world’s biggest coffee producer, is expected to reduce next year’s crop. The price of coffee futures traded on Intercontinental Exchange Inc. markets...

SYDNEY—As Australia battles to root out Covid-19 clusters that are locking down its major cities and fanning increasing talk of a coming recession, the Reserve Bank of Australia has adopted a more cautious posture that gives it room to change course on policy if things continue to go from bad to worse.

In minutes of its August policy meeting on Tuesday, the RBA moved to signal its growing concern that the Delta strain of the virus represents a new challenge for an economy that is expected to contract sharply in the third quarter,...

Zhang Jianli used to hire only male workers on his construction sites throughout Chifeng, Inner Mongolia, specifying in online job ads, “Women workers please don’t contact us.” Now with abundant work but not enough hands, Mr. Zhang says he has relented.

He now offers daily wages of about 160 yuan, roughly $25, for women workers to move wood and bricks, about one-fifth less than their male peers, and up to 200 yuan a day for urgent jobs. His ads say that both men and women can apply.

“They work hard and have few complaints,” Mr. Zhang said of the women he hires, most in their 40s and 50s.

Chinese women are increasingly taking on heavy-labor jobs long dominated by men in construction, transportation and other sectors, bucking traditional gender roles in China’s vast workforce.

A labor shortage caused by low birthrates and an aging population is pushing employers to recruit more women to build high-rises, maintain rail tracks and drive trucks, among...

Repercussions from the Delta variant of Covid-19 are starting to ripple across companies, raising staffing costs in senior housing, disrupting production of potato chips and leading some companies to rein in profit projections.

Still unclear: whether the highly contagious strain of the virus will be a momentary stumble in an improving global economy—one that businesses and consumers are now better equipped to handle—or something more serious.

In recent weeks, Kellogg Co. said Delta’s spread in Malaysia slowed production of Pringles there. Online travel company Booking Holdings Inc. said overall bookings declined as Delta took root in July. U.S. healthcare companies say elective medical procedures are slowing once again in some places.

And, as more employers postpone their return to offices, the outlook is darkening for such disparate companies as a 25-person Houston cable installer and a company with a $1.3 billion market-capitalization that sells...

We are delighted that you'd like to resume your subscription.

You will be charged $ + tax (if applicable) for The Wall Street Journal. You may change your billing preferences at any time in the Customer Center or call Customer Service. You will be notified in advance of any changes in rate or terms. You may cancel your subscription at anytime by calling Customer Service.

Please click confirm to resume now.

We are delighted that you'd like to resume your subscription.

You will be charged $ + tax (if applicable) for The Wall Street Journal. You may change your billing preferences at any time in the Customer Center or call Customer Service. You will be notified in advance of any changes in rate or terms. You may cancel your subscription at anytime by calling Customer Service.

Please click confirm to resume now.