Shares in Amazon.com Inc. finished the day up almost 4%, giving the Seattle-based company a stock market valuation of $2.01 trillion. Its stock has gained 52% in the past 12 months, partly driven by enthusiasm for the company’s investments in artificial intelligence.

Amazon now joins Google’s parent Alphabet, software behemoth Microsoft, iPhone maker Apple and chip maker Nvidia among companies with valuations of at least $2 trillion.

Last week, Nvidia hit $3 trillion and briefly became the most valuable company on Wall Street. Nvidia’s chips are used to power many AI applications and its valuation has soared as a result.

Amazon has also been making big investments in AI as global interest has grown in the technology. Most of the focus has been on business-focused products, including AI models and a chatbot called Q, which Amazon makes available to businesses that use its cloud computing unit AWS.

“A big part of the valuation boost has been cloud and AI,” said Wedbush tech analyst Dan Ives. “Amazon is going to be a major player in the AI revolution.”

In April, Amazon CEO Andy Jassy said that AI capabilities have reaccelerated AWS’ growth and that it was on pace for $100 billion in annual revenue. The unit’s growth slowed last year as companies cut down on costs amid high inflation.

Amazon has also invested $4 billion in the San Francisco-based AI company Anthropic to develop so-called foundation models that underpin generative AI systems. In addition, Amazon makes and designs its own AI chips.

Outside of its cloud business, Amazon has cut costs significantly since late 2022, laying off more than 27,000 corporate employees across several divisions. It reported revenue and profits for the first quarter of the year, aiding by growth in AWS as well as its core retail business and advertising. All those things are boosting investor sentiments, said Neil Saunders, the managing director at GlobalData Retail.

“Certainly, there are downsides, but these are mostly external — such as the threat from the FTC,” Saunders said, alluding to the federal agency’s antitrust lawsuit against the company.

But, he said, “investors see these clouds as a long way off so they are not dampening the current valuation.”

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For the first time, 30% of electricity produced worldwide was from clean energy sources as the number of solar and wind farms continued to grow fast.

Of the types of clean energy generated last year, hydroelectric dams produced the most. That’s the same as in most years. Yet droughts in India, China, North America and Mexico meant hydropower hit a five-year low. Research shows climate change is causing droughts to develop more quickly and be more severe.

People used more electricity than ever last year, about 2% more, an increase of about as much as Canada uses in a year. Some of this new demand was for heat pumps, which are an efficient way to both heat and cool buildings, and for electric vehicles. It was also for electrolyzers, special machines used to get hydrogen out of water, for energy. These are all technologies that provide solutions to climate change.

Other increased demand was for electricity to feed new data centers and for air conditioning as places around the world become hotter.

Solar made up the biggest share of new clean energy last year. More than twice as much solar power was added as coal power. It was the 19th year in a row that solar was the fastest-growing source of electricity generation. A surge in solar installations happened at the end of the year and the report predicts 2024 will see an even larger jump.

China added more renewable energy than any other country last year — 51% of the new solar power and 60% of the new wind power globally. China, the European Union, the United States and Brazil together accounted for 81% of new solar generation in 2023.

Yet China was also responsible for 55% of coal generation globally and 60% of China’s electricity generation came from coal. The International Energy Agency says coal is the most carbon-intensive of the fossil fuels.

Scientists say emissions from burning fuels like coal must ramp steeply down to protect Earth’s climate, yet there was an increase in electricity made from burning fossil fuels. China, India, Vietnam and Mexico were responsible for nearly all of the rise.

The report said some countries burned coal to make up for the loss of hydroelectric power they experienced when drought caused their reservoirs to dry up. This is an example of a vicious cycle — when climate change prompts the use of more of the substances that cause climate change in the first place.

Despite all the growth in clean energy, fossil fuels still made up the majority of global electricity generated last year, causing a 1% rise in global power sector emissions. Scientists say even if we slashed all greenhouse gas emissions today, the planet would continue to warm for years because of the amount of pollutants already added to the atmosphere.

Analysts expect the world to use even more electricity in 2024. But renewable energy generation is forecast to grow even faster. That could mean a 2% drop (333 terawatt-hours) in energy generated from fossil fuels.

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Once or twice a year, she visits her two adult children in different states. She’s planning multiple other trips, including to a science fiction convention in Scotland and a Disney cruise soon after that, along with a trip next year to neolithic sites in Great Britain.

“I really have more money to spend now than when I was working,” said Harris, 64, an engineer who worked 29 years for the federal government and lives in Albuquerque, New Mexico.

Back then, she and her now-ex-husband were paying for their children’s college educations and piling money into savings accounts. Now, she’s splurging a bit and, for the first time, is willing to pay for first-class plane tickets. She plans to fly business class to Scotland and has arranged for a higher-level suite on the cruise.

“I suddenly realized, with my dad getting old and my mom dying, it’s like, ‘No, you can’t take it with you,’ ” she said. “I could become incapacitated to the point where I couldn’t enjoy something like going to Scotland or going on a cruise. So I better do it, right?”

Older Americans like Harris are fueling a sustained boost to the U.S. economy. Benefiting from outsize gains in the stock and housing markets over the past several years, they are accounting for a larger share of consumer spending — the principal driver of economic growth — than ever before.

And much of their spending is going toward higher-priced services like travel, health care and entertainment, putting further upward pressure on those prices — and on inflation. Such spending is relatively immune to the Federal Reserve’s push to slow growth and tame inflation through higher borrowing rates, because it rarely requires borrowing.

Affluent older Americans, if they own government bonds, may even be benefiting from the Fed’s rate hikes. Those hikes have led to higher bond yields, generating more income for those who own such bonds.

The so-called “wealth effect,” whereby rising home and stock values give people confidence to increase their spending, is a big reason why the economy has defied expectations of a sharp slowdown. Its unexpected strength, which is contributing to stickier inflation, has forced a shift in the Fed’s plans.

As recently as March, the Fed’s policymakers had projected that they would cut their benchmark rate three times this year. Since then, though, inflation measures have remained uncomfortably high, partly a consequence of brisk consumer spending. Chair Jerome Powell made clear recently that the Fed isn’t confident enough that inflation is sustainably easing to cut rates.

When the Fed meets this week, it is sure to keep its benchmark rate unchanged at a 23-year high, the result of 11 rate hikes. The Fed’s hikes have forced up borrowing costs across the economy — for everything from home and auto loans to credit cards and business loans.

Even as the Fed has jacked up borrowing costs, stock and home values have kept rising, enlarging the net worth of affluent households. Consider that household wealth grew by an average of 5.5% a year in the decade after the 2008-2009 Great Recession but that since 2018, it’s accelerated to nearly 9%.

Stock prices, as measured by the S&P 500 index, are about 72% higher than they were five years ago. Home values soared 58% from the end of 2018 through 2023, according to the Federal Reserve.

All told, Americans’ wealth has ballooned from $98 trillion at the end of 2018 to $147 trillion five years later. Adjusting for inflation, the gains are less dramatic, but still substantial.

“People have had significant wealth gains in stocks, significant wealth gains in fixed income, significant wealth gains in home prices, significant wealth gains even in crypto,” said Torsten Slok, chief economist at the Apollo Group, an asset manager. “All that adds up to still a very significant tailwind.”

The gains are hardly universal. The wealthiest one-tenth of Americans own two-thirds of all household wealth. Still, wealth for the median household — the midpoint between the richest and poorest — rose 37% from 2019 to 2022, the sharpest rise on record since the 1980s according to the Fed, to $193,000.

Wealth is also disproportionately held by older Americans. People ages 55 and over now own nearly three-quarters of all household wealth, up from 68% in 2010, according to the Fed. In percentage terms since the pandemic, household net worth has also surged for younger households. But because younger adults started from a much lower level, their gains haven’t been anywhere near enough to keep pace with older Americans.

“The baby boomers are the richest retiring generation we’ve ever had,” said Edward Yardeni, president of Yardeni Research. “Not everybody is well-off, but we’ve never had a retiring generation with this much wealth. That’s one of the major reasons why the economy is strong.”

That said, many older Americans face significant financial challenges. One-quarter of Americans over age 50 have no retirement savings, according to a survey by the AARP.

Even so, as the huge baby boom generation has aged and, on average, has accumulated more assets, they have accounted for a rising share of consumer spending. Americans ages 65 or over supplied nearly 22% of consumer spending in 2022, the most recent year for which data is available. That’s the highest such figure on records dating to 1989, up from about 16% in 2010.

One result of the Fed’s higher rates has been a kind of bifurcated economy, by age. Older, wealthier Americans who already own homes and cars have been much less affected by the Fed’s rate hikes. By contrast, younger Americans are enduring a combination of expensive home prices and high mortgage rates, making it much harder to buy a first home.

Harris, for one, sees this divide in her own family: Her home and car are paid off, and higher interest rates have had little effect on her finances. She recently visited a home in her neighborhood that she was surprised to see priced at $500,000. She bought hers, which she thinks could fetch a higher price, for $162,000 in 1991.

Her 25-year-old daughter, Ruby, had a vastly different experience during a recent visit to an open house near her boyfriend’s apartment in the Boston area. An older two-bedroom apartment was on sale for $800,000; it sold within a week.

Ruby considers herself fortunate to have a well-paying job as a materials engineer. But that apartment price still seemed astronomical. She loves the area, especially for its walkability, but doubts she’ll ever be able to afford a house there.

“In the long term, it probably won’t be affordable to stay here,” she said. “Whereas the Midwest is more affordable but won’t have the neighborhoods that I like.”

Economists calculate that while the wealth effect generally has a relatively modest effect on spending, it may be larger now. That’s because retirement-age Americans, who are more likely to spend out of their wealth, constitute a larger proportion of the nation: Americans ages 65 and over make up about 17% of the population, up from 13% in 2010. And people with stock holdings can now easily access their account balances online, increasing their awareness of increases in their net worth.

Research by Michael Brown, an economist at Visa and others has also found that significant stock market wealth typically boosts spending on discretionary items such as restaurants, travel and entertainment — sectors of the economy where spending is surging and inflation remains elevated.

The Conference Board, a business research group, asks Americans in its monthly survey of consumer confidence whether they plan an overseas vacation in the next six months. Slok noted that more than one in five households say they are — a record-high proportion on records dating to 1967.

The cruise provider Royal Caribbean just reported blowout earnings and strong demand, “leading to higher pricing for all our key products,” CEO Jason Liberty told investors. “Customer sentiment remains very positive, bolstered by resilient labor markets, wage growth, stabilizing inflation and record-high household net worth.”

Last week, the Fed’s preferred inflation gauge, excluding volatile food and energy costs, rose 2.8% from a year earlier, a sign that inflation remains sticky. Solid consumer spending, particularly on services, was one key factor. In one measure of services inflation that the Fed watches closely, prices climbed 3.5% from a year earlier, far higher than is consistent with its 2% inflation target.

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Lower rates give home shoppers more financial breathing room, so holding out for a more attractive rate can make a big difference, especially for first-time homebuyers who often struggle to find an affordable home.

However, there’s a potential downside to waiting. Lower rates can attract more prospective homebuyers, heating up the market and driving up prices.

Acting now would likely saddle a buyer with a rate of around 6.9% on a 30-year mortgage. In late October, the rate surged to a 23-year high of nearly 8%, according to mortgage buyer Freddie Mac. Economists generally expect the average rate on a 30-year mortgage to decline later in the year.

“If mortgage rates do in fact drop as expected, I would expect there to be more competition from increased demand, so that’s one reason to potentially act now,” said Danielle Hale, chief economist at Realtor.com. “And then those buyers, if mortgage rates do fall, would presumably have an opportunity to refinance.”

Gagan Hegde, a software engineer in Durham, North Carolina, is leaning toward the proactive approach as he looks to buy his first home.

Hegde, 29, worries that delaying his search would eventually put him up against others also looking for lower rates in a market that’s already plenty competitive.

Just recently, he matched the $450,000 list price on a townhome, but another buyer offered more than what the seller was asking.

Rather than dwell too much on mortgage rates, he’s now focusing on finding a three-bedroom, three-bath home he can afford. Once rates fall, he’ll look to refinance.

“I’m just completely being agnostic to the financing prices because I think if you start paying too much attention to it, there’s no clear answer,” he said.

The rock-bottom mortgage rates that fueled a buying frenzy in 2021 and early 2022 are long gone. While an average rate on a 30-year home loan of just under 7% is not far from the historical average, that’s little consolation to homebuyers who, prior to the last couple of years, hadn’t seen average rates this high going back nearly two decades.

Combined with a nearly 44% increase in the national median sale price of previously occupied homes between 2019 and 2023, elevated mortgage rates have made buying a home less affordable for many Americans.

A recent analysis by Redfin found that the typical U.S. household earns about $30,000 less than the $113,520 a year it needs to afford a median-priced U.S. home, which the company estimated was $412,778 in February. Redfin defines a home as affordable if the buyer spends no more than 30% of their income on their monthly housing payment. The analysis factored in a 15% down payment and the average rate on a 30-year loan in February, which was around 6.8%.

Lower mortgage rates would boost homebuyers’ purchasing power. Financing a $400,000 home with a 30-year mortgage with a fixed rate at last week’s average of 6.82% works out to about $215 more a month than if the rate was at 6%, for example. Monthly payments on the same loan two years ago, when the mortgage rate averaged 4.72%, would be $534 less.

Many economists expect that mortgage rates will ease this year, but not before inflation has cooled enough for the Federal Reserve to begin lowering its short-term interest rate.

The Fed has indicated it expects to cut rates this year once it sees more evidence that inflation is slowing from its current level above 3%. How the bond market reacts to the Fed’s interest rate policy, as well as other factors can influence mortgage rates. Current indications are mortgage rates will remain higher for a while longer.

For now, the uncertainty in the trajectory of mortgage rates is working in favor of home shoppers like Shelby Rogozhnikov and her husband, Anton.

The couple owns a townhome in Dallas and want more space now that they’re planning on having their first child. They’re looking for a house with at least three bedrooms that’s priced within their budget of around $300,000.

They’re not feeling any urgency, but they are eager to avoid a surge in competition should mortgage rates decline in the coming months.

“I know interest rates will go down eventually, but I feel like when they go down housing prices might go back up again,” said Shelby Rogozhnikov, 38. a dental hygienist. “I have the mortgage rate thing to worry about and my biological clock, which has less time on it than the mortgage rates, so it’s now or never.”

Real estate agents from Los Angeles to New York say bidding wars are still happening, though not as often as in recent years in some places.

“Overall, the bidding wars are not nearly as extreme as they were in markets’ past,” said Tony Spratt, an agent with Century 21 Real Estate Judge Fite Co., in the Dallas-Fort Worth area. “We’re still in a sellers’ market, but it’s much more mild than it was.”

Home shoppers also have more properties to choose from this spring than a year ago. Active listings — a tally that encompasses all the homes on the market but excludes those pending a finalized sale — have exceeded prior-year levels for five straight months, according to Realtor.com. They jumped nearly 24% in March from a year earlier, though they were down nearly 38% compared to March 2019.

The still-relatively tight inventory is helping give sellers the edge in many markets around the country, but not all.

In Raleigh, North Carolina, home listings are taking longer to sell, and that’s made sellers more flexible on price or with helping cover repair costs, said Jordan Hammond, a Redfin agent.

“Before we saw sellers could really do what they wanted,” she said. “They didn’t have to contribute at all to the buyer’s purchase. And now that’s kind of flipped. I’m seeing more buyers pushing sellers.”

Still, the thin inventory of properties on the market means home shoppers who can find a property for sale in their price range may want to put in an offer rather than wait, because there’s no guarantee a better option will come along right away.

Those shopping in areas where new-home construction is more prevalent may have better luck this spring.

In response to higher mortgage rates, more than one-third of builders cut home prices in 2023. Many also offered buyers incentives like mortgage rate buydowns and below market-rate financing.

Builders also stepped up construction of smaller, less expensive homes, which helps explain why the median sale price of a new U.S. home fell nearly 8% in February from a year earlier to $400,500. That’s the lowest level since June 2021.

Home shoppers and sellers who wait until summer to test the market will also have to factor in how they may be affected by proposed changes to policies around real estate agent commissions.

Last month, the National Association of Realtors agreed to make policy changes in order to settle federal lawsuits that claimed the trade association and several of the country’s biggest real estate brokerages engaged in business practices that forced homeowners to pay artificially inflated commissions when they sold their home.

The policy changes, which are set to go into effect in July, could lead to home sellers paying lower commissions for their agent’s services. Buyers, in turn, may have to shoulder more upfront costs when they hire an agent.

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Reaching the United States was a harrowing ordeal. Silva, 25, her husband and their then-7-year-old daughter braved the treacherous jungles of Panama’s Darien Gap, traveled the length of Mexico, crossed the Rio Grande and then turned themselves in to the U.S. Border Patrol in Brownsville, Texas. Seeking asylum, they received a work permit last year and found jobs in Rock Hill, South Carolina.

“My plan is to help my family that much need the money and to grow economically here,” Silva said.

Her story amounts to far more than one family’s arduous quest for a better life. The millions of jobs that Silva and other new immigrant arrivals have been filling in the United States appear to solve a riddle that has confounded economists for at least a year:

How has the economy managed to prosper, adding hundreds of thousands of jobs, month after month, at a time when the Federal Reserve has aggressively raised interest rates to fight inflation — normally a recipe for a recession?

Increasingly, the answer appears to be immigrants — whether living in the United States legally or not. The influx of foreign-born adults vastly raised the supply of available workers after a U.S. labor shortage had left many companies unable to fill jobs.

More workers filling more jobs and spending more money has helped drive economic growth and create still-more job openings. The availability of immigrant workers eased the pressure on companies to sharply raise wages and to then pass on their higher labor costs to their customers via higher prices that feed inflation. Though U.S. inflation remains elevated, it has plummeted from its levels of two years ago.

“There’s been something of a mystery — how are we continuing to get such extraordinary strong job growth with inflation still continuing to come down?’’ said Heidi Shierholz, president of the Economic Policy Institute and a former chief economist at the Labor Department. “The immigration numbers being higher than what we had thought — that really does pretty much solve that puzzle.’’

While helping fuel economic growth, immigrants also lie at the heart of an incendiary election-year debate over the control of the nation’s Southern border. In his bid to return to the White House, Donald Trump has attacked migrants in often-degrading terms, characterizing them as dangerous criminals who are “poisoning the blood” of America and frequently invoking falsehoods about migration. Trump has vowed to finish building a border wall and to launch the “largest domestic deportation operation in American history.” Whether he or President Joe Biden wins the election could determine whether the influx of immigrants, and their key role in propelling the economy, will endure.

The boom in immigration caught almost everyone by surprise. In 2019, the Congressional Budget Office had estimated that net immigration — arrivals minus departures — would equal about 1 million in 2023. The actual number, the CBO said in a January update, was more than triple that estimate: 3.3 million.

Thousands of employers desperately needed the new arrivals. The economy — and consumer spending — had roared back from the pandemic recession. Companies were struggling to hire enough workers to keep up with customer orders.

The problem was compounded by demographic changes: The number of native-born Americans in their prime working years — ages 25 to 54 — was dropping because so many of them had aged out of that category and were nearing or entering retirement. This group’s numbers have shrunk by 770,000 since February 2020, just before COVID-19 slammed the economy.

Filling the gap has been a wave of immigrants. Over the past four years, the number of prime-age workers who either have a job or are looking for one has surged by 2.8 million. And nearly all those new labor force entrants — 2.7 million, or 96% of them — were born outside the United States. Immigrants last year accounted for a record 18.6% of the labor force, according to the Economic Policy Institute’s analysis of government data.

And employers welcomed the help.

Consider Jan Gautam, CEO of the lodging company Interessant Hotels & Resort Management in Orlando, Florida, who said he can’t find American-born workers to take jobs cleaning rooms and doing laundry in his 44 hotels. Of Interessant’s 3,500 workers, he said, 85% are immigrants.

“Without employees, you are broken,” said Gautam, himself an immigrant from India who started working in restaurants as a dishwasher and now owns his own company.

“If you want boost the economy,” he said, “it definitely needs to have more immigrants coming out to this country.”

Or consider the workforce of the Flood Brothers farm in Maine’s “dairy capital’’ of Clinton. Foreign-born workers make up fully half the farm’s staff of nearly 50, feeding the cows, tending crops and helping collect the milk — 18,000 gallons each day.

“We cannot do it without them,” said Jenni Tilton-Flood, a partner in the operation.

For every unemployed person in Maine, after all, there are two job openings, on average.

“We would not have an economy, in Maine or in the U.S. if we did not have highly skilled labor that comes from outside of this country,” Tilton-Flood said in a phone interview with The Associated Press from her farm.

“Without immigrants — both new asylum-seekers as well as our long-term immigrant contributors — we would not be able to do the work that we do,” she said. “Every single thing that affects the American economy is driven by and will only be saved by accepting immigrant labor.”

A study by Wendy Edelberg and Tara Watson, economists at the Brookings Institution’s Hamilton Project, has concluded that over the past two years, new immigrants raised the economy’s supply of workers and allowed the United States to generate jobs without overheating and accelerating inflation.

In the past, economists typically estimated that America’s employers could add no more than 60,000 to 100,000 jobs a month without overheating the economy and igniting inflation. But when Edelberg and Watson included the immigration surge in their calculations, they found that monthly job growth could be roughly twice as high this year — 160,000 to 200,000 — without exerting upward pressure on inflation.

“There are significantly more people working in the country,” Fed Chair Jerome Powell said last week in a speech at Stanford University. Largely because of the immigrant influx, Powell said, “it’s a bigger economy but not a tighter one. Really an unexpected and an unusual thing.’’

Trump has repeatedly attacked Biden’s immigration policy over the surge in migrants at the Southern border. Only about 27% of the 3.3 million foreigners who entered the United States last year did so through as “lawful permanent residents’’ or on temporary visas, according to Edelberg and Watson’s analysis. The rest — 2.4 million — either came illegally, overstayed their visas, are awaiting immigration court proceedings or are on a parole program that lets them stay temporarily and sometimes work in the country.

“So there you have it,’’ Douglas Holtz-Eakin, a former CBO director who is president of the conservative American Action Forum, wrote in February. “The way to solve an inflation crisis is to endure an immigration crisis.”

Many economists suggest that immigrants benefit the U.S. economy in several ways. They take generally undesirable, low-paying but essential jobs that most U.S.-born Americans won’t, like caring for children, the sick and the elderly. And they can boost the country’s innovation and productivity because they are more likely to start their own businesses and obtain patents.

Ernie Tedeschi, a visiting fellow at Georgetown University’s Psaros Center and a former Biden economic adviser, calculates that the burst of immigration has accounted for about a fifth of the economy’s growth over the past four years.

Critics counter that a surge in immigration can force down pay, particularly for low-income workers, a category that often includes immigrants who have lived in the United States longer. Last month, in the most recent economic report of the president, Biden’s advisers acknowledged that “immigration may place downward pressure on the wages of some low-paid workers” but added that most studies show that the impact on the wages of the U.S.-born is “small.”

Even Edelberg notes that an unexpected wave of immigrants, like the recent one, can overwhelm state and local governments and saddle them with burdensome costs. A more orderly immigration system, she said, would help.

The recent surge “is a somewhat disruptive way of increasing immigration in the United States,” Edelberg said. “I don’t think anybody would have sat down and said: ‘Let’s create optimal immigration policy,’ and this is what they would come up with.”

Holtz-Eakin argued that an immigration cutoff of the kind Trump has vowed to impose, if elected, would result in “much, much slower labor force growth and a return to the sharp tradeoff’’ between containing inflation and maintaining economic growth that the United States has so far managed to avoid.

For now, millions of job vacancies are being filled by immigrants like Mariel Marrero. A political opponent of Venezuela’s authoritarian President Nicolás Maduro, Marrero, 32, fled her homeland in 2016 after receiving death threats. She lived in Panama and El Salvador before crossing the U.S. border and applying for asylum.

Her case pending, she received authorization to work in the United States last July. Marrero, who used to work in the archives of the Venezuelan Congress in Caracas, found work selling telephones and then as a sales clerk at a convenience store owned by Venezuelan immigrants.

At first, she lived for free at the house of an uncle. But now she earns enough to pay rent on a two-bedroom house she shares with three other Venezuelans in Doral, Florida, a Miami suburb with a large Venezuelan community. After rent, food, electricity and gasoline, she has enough left over to send $200 a month to her family in Venezuela.

“One hundred percent — this country gives you opportunities,’’ she said.

Marrero has her own American dream:

“I imagine having my own company, my house, helping my family in a more comfortable way.”

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Sen. Bernie Sanders, the far-left independent from Vermont, this week introduced a bill that would shorten to 32 hours the amount of time many Americans can work each week before they’re owed overtime.

Given advances in automation, robotics and artificial intelligence, Sanders says U.S. companies can afford to give employees more time off without cutting their pay and benefits.

Critics say a mandated shorter week would force many companies to hire additional workers or lose productivity.

Here’s what to know about the issue:

What would Sanders’ proposal do?
The bill Sanders introduced Wednesday in the Senate would reduce the standard workweek from 40 hours to 32 hours. Employers would be prohibited from reducing their workers’ pay and benefits to match their lost hours.

That means people who currently work Monday through Friday, eight hours per day, would get to add an extra day to their weekend. Workers eligible for overtime would get paid extra for exceeding 32 hours in a week.

Sanders says the worktime reductions would be phased in over four years. He held a hearing on the proposal Thursday in the Senate Health, Education, Labor and Pensions Committee, of which Sanders is the chairman.

How would a shorter workweek affect employees and productivity?
One recent study of British companies that agreed to adopt a 32-hour workweek concluded that employees came to work less stressed and more focused while revenues remained steady or increased.

In 2022, a team of university researchers and the nonprofit 4 Day Week Global enlisted 61 companies to reduce working hours for six months without cutting wages. Afterward, 71% of the 2,900 workers said they were less burned out and nearly half reported being more satisfied with their jobs.

Meanwhile, 24 of the participating companies reported revenue growth of more than 34% over the prior six months. Nearly two dozen others saw a smaller increase.

“The majority of employees register an increase in their productivity over the trial. They are more energized, focused and capable,” Juliet Shor, a Boston College sociology professor and a lead researcher on the UK study, told Sanders’ Senate committee.

Critics say a 32-hour workweek might work for companies where employees spend most of their time at computers or in meetings, but could be disastrous for production at manufacturing plants that need hands-on workers to keep assembly lines running.

“These are concepts that have consequences,” Roger King, of the HR Policy Association, which represents corporate human resource officers, told the Senate committee. “It just doesn’t work in many industries.”

What’s the response in Washington?
With considerable opposition from Republicans, and potentially some Democrats, don’t expect Sanders’ proposal to get very far in the Senate. A companion bill by Democratic Rep. Mark Takano of California is likely doomed in the GOP-controlled House.

GOP Sen. Bill Cassidy of Louisiana said paying workers the same wages for fewer hours would force employers to pass the cost of hiring more workers along to consumers.

“It would threaten millions of small businesses operating on a razor-thin margin because they’re unable to find enough workers,” said Cassidy, the ranking Republican on the committee. “Now they’ve got the same workers, but only for three-quarters of the time. And they have to hire more.”

Sanders has used his platform as the committee’s chairman to showcase legislation aimed at holding big corporations more accountable to workers. He blamed greedy executives for pocketing extra profits as technology has boosted worker productivity.

“Do we continue the trend that technology only benefits the people on top, or do we demand that these transformational changes benefit working people?” Sanders said. “And one of the benefits must be a lower workweek, a 32-hour workweek.”

How did we decide a 40-hour workweek was the standard?
The Fair Labor Standards Act, signed into law by President Franklin D. Roosevelt in 1938, restricted child labor and imposed other workplace protections that included limiting the workweek to 44 hours. The law was amended two years later to make it a 40-hour week.

The landmark law followed a century of labor-union efforts seeking protections for the many overworked people in the U.S., said Tejasvi Nagaraja, a labor historian at Cornell University’s School of Industry and Labor Relations.

“The issue of time was always as important, or more important, than money for labor unions and labor advocates,” Nagaraja said.

In the 1830s, coal miners and textile workers began pushing back against workdays of up to 14 hours. After the Civil War, the abolition of slavery caused those in the U.S. to take a fresh look at workers’ rights. Unions rallied around the slogan: “Eight hours for work, eight hours for rest, eight hours for what you will.”

The federal government took tentative steps toward limiting working time. In 1869, President Ulysses S. Grant ordered an eight-hour workday for government employees. In 1916, Congress mandated the same for railroad workers.

Other reforms came from private industry. In 1926, Henry Ford adopted a 40-hour week for his automobile assembly workers more than a decade before Congress mandated it.

Ford wrote: “It is high time to rid ourselves of the notion that leisure for workmen is either lost time or a class privilege.”

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President Joe Biden recently announced that he was canceling federal student loans for nearly 153,000 borrowers enrolled in the plan, known as the SAVE plan. Forgiveness was granted to borrowers who had made payments for at least 10 years and originally borrowed $12,000 or less.

The SAVE plan was created last year to replace other existing income-based repayment plans offered by the federal government. More borrowers are now eligible to have their monthly payments reduced to $0, and many will qualify for lower payments compared to other repayment plans.

For Lauran Michael and her husband, the SAVE plan has reduced student loan payments by half.

Since getting married, they’ve both been paying off her husband’s student loans, which would have amounted to about $1,000 a month when payments resumed after a pause during the pandemic. Under the SAVE plan, their payments are now $530 a month.

“We don’t want our loans dictating our life choices, and us not being able to do other things because we’re paying so much money. The SAVE plan is definitely a game changer for us,” said Michael, a 34-year-old interior designer in Raleigh, North Carolina.

Michael’s family is paying for daycare for their two children using the money they saved from not making payments during the pandemic and the reduced payments under the SAVE plan.

If you are interested in applying for the SAVE plan, here’s what you need to know:

WHAT IS AN INCOME-DRIVEN REPAYMENT PLAN?
The U.S. Education Department offers several plans for repaying federal student loans. Under the standard plan, borrowers are charged a fixed monthly amount that ensures all their debt will be repaid after 10 years. But if borrowers have difficulty paying that amount, they can enroll in one of several plans that offer lower monthly payments based on income and family size. Those are known as income-driven repayment plans.

Income-driven options have been offered for years and generally cap monthly payments at 10% of a borrower’s discretionary income. If a borrower’s earnings are low enough, their bill is reduced to $0. And after 20 or 25 years, any remaining debt gets erased.

HOW IS THE SAVE PLAN DIFFERENT?
More borrowers in the SAVE plan are eligible for $0 payments. This plan won’t require borrowers to make payments if they earn less than 225% of the federal poverty line — $32,800 a year for a single person. The cutoff for other plans, by contrast, is 150% of the poverty line, or $22,000 a year for a single person.

Also, the SAVE plan prevents interest from piling up. As long as borrowers make their monthly payments, their overall balance won’t increase. Once they cover their adjusted monthly payment — even if it’s $0 — any remaining interest is waived.

Other major changes will take effect in July 2024. Payments on undergraduate loans will be capped at 5% of discretionary income, down from 10% now. Those with graduate and undergraduate loans will pay between 5% and 10%, depending on their original loan balance.

The maximum repayment period is capped at 20 years for those with only undergraduate loans and 25 years for those with any graduate school loans.

WHO QUALIFIES FOR THE SAVE PLAN?
The SAVE plan is available to all student loan borrowers in the Direct Loan Program who are in good standing on their loans.

Read more about the SAVE plan here.

HOW DO I APPLY FOR THE SAVE PLAN?
Borrowers can apply to the SAVE plan using the Income-Driven Repayment Plan request through the Education Department’s website.

HOW WILL I KNOW THAT MY DEBT HAS BEEN CANCELED?
If you are one of the borrowers who is benefitting from forgiveness under the SAVE plan, you will receive an email from the Education Department.

WHAT ARE OTHER PROGRAMS THAT CAN HELP WITH STUDENT LOAN DEBT?
If you’ve worked for a government agency or a nonprofit, the Public Service Loan Forgiveness program offers cancellation after 10 years of regular payments, and some income-driven repayment plans cancel the remainder of a borrower’s debt after 20 to 25 years.

Borrowers should make sure they’re signed up for the best possible income-driven repayment plan to qualify for these programs.

Borrowers who have been defrauded by for-profit colleges may also apply for relief through a program known as Borrower Defense.

If you’d like to repay your federal student loans under an income-driven plan, the first step is to fill out an application through the Federal Student Aid website.

WILL THERE BE FUTURE FORGIVENESS?
Several categories of borrowers would be eligible for relief under Biden’s second try at widespread cancellation after the Supreme Court rejected his first plan last year.

The proposed plan includes relief for borrowers who have been paying their loans for at least 20 or 25 years, automatic forgiveness for borrowers who are eligible for income-driven repayment plans but are not enrolled, and loan cancellation for borrowers who attended a for-profit college that left them unable to pay their student loans, among others.

Whether any of the relief will materialize is a looming question as conservatives vow to challenge any attempt at mass student loan cancellation. The new proposal is narrower, focusing on several categories of borrowers who could get some or all of their loans canceled, but legal challenge is almost certain.

Currently, borrowers who are eligible for forgiveness under the SAVE program will get their loans discharged on a rolling basis, according to the Education Department.

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Job seekers were scarce.

“You could count on one hand how many people in the town were unemployed,” said Jody Fledderman, the CEO. “It was just crazy.’’

Batesville Tool & Die managed to fill just 40 of its vacancies.

Enter the robots. The company invested in machines that could mimic human workers and in vision systems, which helped its robots “see” what they were doing.

The Batesville experience and others like it have been replicated countlessly across the United States for the past couple of years. Chronic worker shortages have led many companies to invest in machines to do some of the work they can’t find people to do. They’ve also been training the workers they do have to use advanced technology so they can produce more with less.

The result has been an unexpected productivity boom, which helps explain a great economic mystery: How has the world’s largest economy managed to remain so healthy, with brisk growth and low unemployment, despite brutally high interest rates that are intended to tame inflation but that typically cause a recession?

To economists, strong productivity growth provides an almost magical elixir. When companies roll out more efficient machines or technology, their workers can become more productive: They increase their output per hour. A result is that companies can often boost their profits and raise their employees’ pay without having to jack up prices. Inflation can remain in check.

Austan Goolsbee, president of the Federal Reserve Bank of Chicago, has likened surging productivity to “magic beanstalk beans for the economy. … You can have faster income increases, faster wage growth, faster GDP without generating inflation.’’

Joe Brusuelas, chief economist at the tax and consulting firm RSM, said, “The last time we saw anything like this was the late 1990s.”

That was when a productivity surge — an early payoff from the sudden embrace of laptops, cellphones and the internet — helped allow the Federal Reserve to keep borrowing rates low because inflation remained under control even as the economy and the job market sizzled.

This time, the Fed’s aggressive streak of rate hikes — 11 of them starting in March 2022 — has managed to help cool inflation from a four-decade high of 9.1% to 3.1% while causing little economic hardship.

“I would have said it’s not possible,’’ said Sal Guatieri, senior economist at BMO Capital Markets. “But that’s exactly what happened.’’

A year ago, nearly every economist was warning that a recession was all but inevitable. Fed Chair Jerome Powell himself warned in 2022 that beating inflation would inflict “some pain” in the form of widespread layoffs and higher unemployment.

By last month, Powell was sounding a different note. With unemployment barely above a half-century low, the Fed chair told reporters, “We’ve had a very strong labor market, and we’ve had inflation coming down.”

He did caution that the central bank wants to see further progress in slowing inflation. Yet the Fed is so optimistic that inflation is heading toward its 2% goal that it hasn’t raised rates since July and is expected to cut rates multiple times this year.

Perhaps the likeliest explanation is the greater efficiencies that companies like Batesville Tool & Die have managed to achieve in the past year or so. Before productivity began its resurgent growth last year, a rule of thumb was that average hourly pay could rise no more than 3.5% annually for inflation to stay within the Fed’s 2% target. That would mean that today’s roughly 4% average annual pay growth would have to shrink. Yet higher productivity has changed that equation: There’s now more leeway for wage growth to stay elevated without igniting inflation.

“A lot of that pressure on business finances — that normally causes them to raise prices — has been offset by strong productivity growth,’’ Guatieri said.

At a news conference this month, Powell was asked whether he believed higher productivity helps explain why the economy has kept growing steadily even while inflation has tumbled.

“That’s one way to look at it — yeah,” Powell replied.

The productivity boom marks a sharp shift from the pre-pandemic years, when annual productivity growth averaged around a tepid 1.5%, according RSM’s calculations. Everything changed as the economy rocketed out of the 2020 pandemic recession with unexpected vigor, and businesses struggled to re-hire the many workers they had shed.

The resulting worker shortage sent wages surging. Inflation jumped, too, as factories and ports buckled under the strain of rising consumer orders. Parts shortages arose.

Desperate, many companies turned to automation. Investment in equipment and in research and development and other forms of intellectual property accelerated. The efficiency payoff began to arrive almost a year ago. Labor productivity rose at a 3.6% annual pace from last April through June, 4.9% from July through September and 3.2% from October through December.

At Reata Engineering & Machine Works, “efficiency was kind of forced on us,’’ CEO Grady Cope said. With the job market roaring, the company, based in Englewood, Colorado, couldn’t hire fast enough. Meantime, its customers were starting to balk at paying higher prices.

So Reata installed robots and other technology to produce more with less. Software allowed it to automate the delivery of price quotes to customers. That process used to require two weeks. Now, it can be done in 24 hours.

Many economists and business people say they’re hopeful, if not certain, that the productivity boom can continue. Artificial intelligence, they note, is only beginning to penetrate factory floors, warehouses, stores and offices.

“Right now, AI is not a critical enabler for us; it’s an assistant and accelerator in certain roles,’’ said Peter Doyle, CEO of Hirsh Precision, which makes parts for the aerospace and medical device industries. “The world is still trying to understand what AI is capable of doing and how quickly it will advance.’’

The early evidence suggests that AI could sustain the productivity gains. A study last year by Erik Brynjolfsson of Stanford University and Danielle Li and Lindsey Raymond of the Massachusetts Institute of Technology tracked 5,200 customer-support agents at a Fortune 500 company who used a generative AI-based assistant in 2020 and 2021. The AI tool provided suggestions for dealing with customers and links to useful internal documents.

Those using the chatbot were found to be 14% more productive than colleagues who didn’t use the tool. They handled more calls and completed them faster. The biggest gains in productivity — 34% — came from the least-experienced, least-skilled workers.

Automation tends to raise fears that machines will replace human workers and thereby kill jobs. Some workers supplanted by robots do often struggle to find new work and end up settling for lower pay.

Yet history suggests that in the long run, technological improvements actually create more jobs than they destroy. People are needed to build, upgrade, repair and operate sophisticated machines. Some displaced workers are trained to shift into such jobs. And that transition is likely to be eased this time by the retirement of the vast baby boom generation, which is causing labor shortages.

Some of today’s productivity gains may be coming not just from advanced technology but also from more satisfied workers. The tight labor markets of the past three years allowed Americans to change jobs and find others that pay better and make them happier and more productive.

One of them was Justin Thompson, of Kalamazoo, Michigan, who had felt burned out by his job as a police officer, with its 16-hour workdays .

“I was literally running myself into the ground,’’ he said.

Thompson’s wife saw a job posting for operations manager at a charter airline. Even without airline experience, his wife felt he could use skills he gains as a Marine Corps infantryman — handling logistics for missions — during tours in Iraq and Afghanistan.

She was right. Omni Air International hired him in 2019.

Thompson, 43, said he he loves the new job, which allows him to work from home when he’s not traveling. And his Marine experience — which included developing ways to improve efficiency — has proved invaluable. Technology helps, too: Thompson travels with a laptop, iPad and mobile printer and uses proprietary software to manage logistics.

Other workers have switched from low-skill jobs to those that pay better and are more productive.

“The people who were rolling tacos on Dec. 31, 2019 … yeah, they’ve moved up,’’ RSM’s Brusuelas said. “They’re doing other things and making a lot more money.”

At Reata Engineering, staffers were trained to use new sophisticated equipment. One 19-year-old employee, a university engineering student, has used AI tools to make company training materials less cumbersome and time-consuming.

“The whole point is not to lay people off,’’ said Cope, the CEO of Reata Engineering. “The point is to make people do jobs that are more interesting’’ — and pay better, too.

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Walmart, which is based in Bentonville, Arkansas, and has almost 4,700 U.S. namesake stores, said Monday that starting with the company’s new fiscal year, which begins Thursday, U.S. store managers will receive up to $20,000 in Walmart stock grants every year.

Walmart shares have risen 15% in the past 52 weeks, with the stock closing at $164.27 on Friday — up nearly 1%, or $1.43, per share.

The moves follow an announcement made by the discounter earlier in the month that it would raise the starting base pay for store managers, while redesigning its bonus plan to emphasize profits more with these leaders. The pay raise and bonus change will also be effective Thursday.

Walmart said it hasn’t made any changes to store managers’ pay structure in more than a decade.

And though turnover rates for U.S. store managers and the rest of its workers have stabilized since 2022, pressures on employees have increased. The acceleration of online services like BOPIS, for “buy online pickup in stores,” since the pandemic have created more challenges for store leaders, as they balance inventory for both store customers and online shoppers.

Walmart said the amount of the annual stock grant is based on the store format. U.S. managers of the sprawling supercenters, which run about 180,000 square feet, will receive $20,000 in stock grants. Those leading the smaller Neighborhood Market stores — as well as the so-called “division 1” stores, which sell mostly general merchandise — will get $15,000 in stock grants. And those who lead the Hometown stores, a smaller version of the division 1 stores, will receive $10,000 in stock grants every year, the company said.

Walmart said the stock grants will vest over a three-year period, with ownership for one-twelfth of the grant total coming every quarter. The grants will be given in April, which is the company’s traditional time for its compensation period.

“It’s fair to say that we’re asking them to act like owners and to think like owners, ” said John Furner, CEO of Walmart U.S. division in a call to reporters on Sunday. “And with this announcement, they will all be owners, and many of them do own stock.”

In fact, Furner noted that Walmart has long had an employee stock program where employees can buy stock directly and then have the company match 15% of the employees’ purchase, up to $1,800 per year. However, Walmart doesn’t offer a discount for the stock.

The new starting annual base salary for U.S. store managers will range from $90,000 to $170,000. Previously, the range was from $65,000 to $170,000. That means that the average base pay for store leaders will go to $128,000 from $117,000, according to Cedric Clark, executive vice president of store operations at Walmart’s U.S. division.

Roughly 75% of its store management started out as hourly workers, Walmart said.

Walmart announced in January 2023 that U.S. workers would get pay raises the following month, increasing starting wages to between $14 and $19 an hour. Starting wages had previously ranged between $12 and $18 an hour, depending on location.

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Thursday’s report from the Commerce Department said the gross domestic product — the economy’s total output of goods and services — decelerated from its sizzling 4.9% growth rate the previous quarter. But the latest figures still reflected the surprising durability of the world’s largest economy, which U.S. voters are assessing ahead of the November elections.

The latest data marked the sixth straight quarter in which GDP has grown at an annual pace of 2% or more. Consumers, who account for about 70% of the total economy, drove the growth. Their spending expanded at a 2.8% annual rate, for items ranging from clothing, furniture, recreational vehicles and other goods to services like hotels and restaurant meals.

The GDP report also showed that despite the robust pace of growth in the October-December quarter, inflationary measures continued to ease. Consumer prices rose at a 1.7% annual rate, down from 2.6% in the third quarter. And excluding volatile food and energy prices, so-called core inflation came in at a 2% annual rate.

Those inflation numbers could reassure the Federal Reserve’s policymakers, who have already signaled that they expect to cut their benchmark interest rate three times in 2024, reversing their 2022-2023 policy of aggressively raising rates to fight inflation. Some economists think the Fed could begin cutting rates as early as May.

Nathan Sheets, global chief economist at Citi, said that recent experience suggests that economic growth can remain solid even as inflation cools.

“It underscores for the Fed that they don’t have to be in a hurry” to ease borrowing rates to aid the economy, said Sheets, who thinks the first rate cut will occur in June.

After an extended period of gloom, Americans are starting to feel somewhat better about inflation and the economy — a trend that could sustain consumer spending, fuel economic growth and potentially affect voters’ decisions this fall. A measure of consumer sentiment by the University of Michigan, for example, has jumped in the past two months by the most since 1991.

There is growing optimism that the Fed is on track to deliver a rare “soft landing” — keeping borrowing rates high enough to cool growth, hiring and inflation yet not so much as to send the economy into a tailspin. Inflation touched a four-decade high in 2022 but has since edged steadily lower without the painful layoffs that most economists had thought would be necessary to slow the acceleration of prices.

The economy has repeatedly defied predictions that the Fed’s aggressive rate hikes would trigger a recession. Far from collapsing last year, the economy accelerated — expanding 2.5%, up from 1.9% in 2022.

“Our expectation is for a soft landing, and it looks like things are moving that way,’’ said Beth Ann Bovino, chief economist at U.S. Bank. Still, Bovino expects the economy to slow somewhat this year as higher rates weaken borrowing and spending.

“People are going to get squeezed,’’ she said.

At an appearance Thursday, President Joe Biden pointed to the strength of the GDP report to tout his stewardship of the economy.

“The experts from the time I got elected were insisting that a recession was just around the corner,’’ he said during a visit to the swing state of Wisconsin. “ ‘Every month there’s gonna be a recession.’ Well, you know, we’ve got really strong growth.”

The economy’s outlook had looked far bleaker a year ago. As recently as April 2023, an economic model published by the Conference Board, a business group, had pegged the likelihood of a U.S. recession over the next 12 months at close to 99%.

Even as inflation in the United States has slowed significantly, overall prices remain nearly 17% above where they were before the pandemic erupted three years ago, which has exasperated many Americans. That fact will likely raise a pivotal question for the nation’s voters, many of whom are still feeling the lingering financial and psychological effects of the worst bout of inflation in four decades. Which will carry more weight in the presidential election: The sharp drop in inflation or the fact that most prices are well above where they were three years ago?

The Fed began raising its benchmark rate in March 2022 in response to the resurgence in inflation that accompanied the economy’s recovery from the pandemic recession. By the time its hikes ended in July last year, the central bank had raised its influential rate from near zero to roughly 5.4%, the highest level since 2001.

As the Fed’s rate hikes worked their way through the economy, year-over-year inflation slowed from 9.1% in June 2022, the fastest rate in four decades, to 3.4% as of last month. That marked a striking improvement but still leaves that inflation measure above the Fed’s 2% target.

The progress so far has come at surprisingly little economic cost. Employers have added a healthy 225,000 jobs a month over the past year. And unemployment has remained below 4% for 23 straight months, the longest such streak since the 1960s.

The once red-hot job market has cooled somewhat, easing pressure on companies to raise pay to keep or attract employees and then pass on their higher labor costs to their customers through price hikes.

It’s happened in perhaps the least painful way: Employers are generally posting fewer job openings rather than laying off workers. That is partly because many companies are reluctant to risk losing workers after having been caught flat-footed when the economy roared back from the brief but brutal 2020 pandemic recession.

“Businesses are getting rid of job openings, but they’re holding onto workers,” Bovino said.

Another reason for the economy’s sturdiness is that consumers emerged from the pandemic in surprisingly good financial shape, partly because tens of millions of households had received government stimulus checks. As a result, many consumers have managed to keep spending even in the face of rising prices and high interest rates.

Some economists have suggested that the economy will weaken in the coming months as pandemic savings are exhausted, credit card use nears its limits and higher borrowing rates curtail spending. Still, the government reported last week that consumers stepped up their spending at retailers in December, an upbeat end to the holiday shopping season.

Credit card balances and rates were at record highs even before the recent solid holiday shopping season. And buy-now-pay-later plans, which let shoppers break up the cost of an item over time, have spiked.

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