THE WASHINGTON EXAMINER
"White House downplays inflation-fueled stock market losses"
Christian Datoc
14 SEPTEMBER 2022
On Wednesday, White House press secretary Karine Jean-Pierre suggested that President Joe Biden and his administration were not concerned by his viral, split-screen moment from the day prior.
On Tuesday, both the Dow Jones and S&P 500 posted their largest losses dating back to January 2020, fueled largely by higher-than-expected yearly inflation posted in August's consumer price index report.
"The stock market is just one measure of how the economy is doing, and we are watching this closely," Jean-Pierre told reporters traveling with Biden to Detroit Wednesday morning.
"It's also important to look at what's happening on Main Street."
"We have one of the strongest job markets on record."
"More people are looking for work," she said.
"Because of the president's economic plan, businesses are investing in America at record rates, and we are making even more in America."
Jean-Pierre closed by reiterating that the administration understands "there's more progress to be done" and vowed to "continue to do that."
Biden critics have roundly attacked the White House's post-summer victory lap on the economy.
"Biden and Democrats throwing themselves a party for raising taxes on families during a recession proves just how out-of-touch they are," Republican National Committee Chairwoman Ronna McDaniel said in a statement Tuesday.
"After ramming through the Bidenflation Scam bill under the guise of reducing inflation it is clear Democrats don’t care about lying to the American people, they only care about power."
https://www.msn.com/en-us/news/politics ... bc922754e1
THE ECONOMY
Re: THE ECONOMY
CNBC
"Retail sales growth sluggish in August as consumers fight to keep up with inflation"
Jeff Cox @JEFF.COX.7528 @JEFFCOXCNBCCOM
PUBLISHED THU, SEP 15 2022
KEY POINTS
* Retail sales rose 0.3% in August, better than expected but boosted largely by a big jump in motor vehicles and parts dealer receipts.
* Weekly jobless claims declined to 213,000, also better than estimates.
* Manufacturing readings from the New York and Philadelphia regions suggested the sector is in contraction.
Retail sales numbers were better than expected in August as price increases across a multitude of sectors offset a considerable drop in gas station receipts, the Census Bureau reported Thursday.
Advance retail sales for the month increased 0.3% from July, better than the Dow Jones estimate for no change.
The total is not adjusted for inflation, which rose 0.1% in August, suggesting that spending outpaced price increases.
Inflation as gauged by the consumer price index rose 8.3% over the past year through August, while retail sales increased 9.3%.
However, excluding autos, sales decreased 0.3% for the month, below the estimate for a 0.1% increase.
Excluding autos and gas, sales rose 0.3%.
Sales at motor vehicle and parts dealers led all categories, rising 2.8%, helping to offset the 4.2% decline in gas stations, whose receipts tumbled as prices fell sharply.
Online sales also decreased 0.7%, while bar and restaurant sales rose 1.1%.
Revisions to the July numbers pointed to further consumer struggles, with the initially reported unchanged but to a decline of 0.4%.
Also, the “control” group that economists use to boil down retail sales, was unchanged from July.
The group excludes sales from auto dealers, building materials retailers, gas stations, office supply stores, mobile homes and tobacco stores, and is what the government uses to calculate retail’s share of GDP.
“Higher inflation drove the top line sales figure but volumes are obviously falling because on a real basis, sales are negative,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group.
“Core retail sales being well below expectations will result in a cut to GDP estimates for Q3 as stated.”
Ian Shepherdson, chief economist at Pantheon Macroeconomics, called the release “a mixed report, but we see no cause for alarm.”
He said the slump in housing will depress some related sales numbers, but overall spending should up as real incomes rise.
The retail numbers led a busy day for economic data.
Elsewhere, initial jobless claims for the week ended Sept. 10 totaled 213,000, a decrease of 5,000 from the previous week and better than the 225,000 estimate.
Import prices in August fell 1%, less than the expected 1.2% decline.
Two manufacturing gauges showed mixed results: The New York Federal Reserve’s Empire State Manufacturing Index for September showed a reading of -1.5, a massive 30-point jump from the previous month.
However, the Philadelphia Fed’s gauge came in at -9.9, a big drop from the 6.2 in August and below the expectation for a positive 2.3 reading.
The two Fed readings reflect the percentage of companies reporting expansion versus contraction, suggesting manufacturing was broadly in a pullback for the month.
The reports, however, pointed to some softening in price pressures.
For New York, the prices paid and prices received indexes respectively declined 15.9 and 9.1 points, though both remained solidly in growth territory with readings of 39.6 and 23.6.
In Philadelphia, prices paid fell nearly 14 points but prices received increased 6.3 points.
Those indexes respectively were 29.8 and 29.6, indicating that prices are still rising overall but at a slower pace.
https://www.cnbc.com/2022/09/15/retail- ... -2022.html
"Retail sales growth sluggish in August as consumers fight to keep up with inflation"
Jeff Cox @JEFF.COX.7528 @JEFFCOXCNBCCOM
PUBLISHED THU, SEP 15 2022
KEY POINTS
* Retail sales rose 0.3% in August, better than expected but boosted largely by a big jump in motor vehicles and parts dealer receipts.
* Weekly jobless claims declined to 213,000, also better than estimates.
* Manufacturing readings from the New York and Philadelphia regions suggested the sector is in contraction.
Retail sales numbers were better than expected in August as price increases across a multitude of sectors offset a considerable drop in gas station receipts, the Census Bureau reported Thursday.
Advance retail sales for the month increased 0.3% from July, better than the Dow Jones estimate for no change.
The total is not adjusted for inflation, which rose 0.1% in August, suggesting that spending outpaced price increases.
Inflation as gauged by the consumer price index rose 8.3% over the past year through August, while retail sales increased 9.3%.
However, excluding autos, sales decreased 0.3% for the month, below the estimate for a 0.1% increase.
Excluding autos and gas, sales rose 0.3%.
Sales at motor vehicle and parts dealers led all categories, rising 2.8%, helping to offset the 4.2% decline in gas stations, whose receipts tumbled as prices fell sharply.
Online sales also decreased 0.7%, while bar and restaurant sales rose 1.1%.
Revisions to the July numbers pointed to further consumer struggles, with the initially reported unchanged but to a decline of 0.4%.
Also, the “control” group that economists use to boil down retail sales, was unchanged from July.
The group excludes sales from auto dealers, building materials retailers, gas stations, office supply stores, mobile homes and tobacco stores, and is what the government uses to calculate retail’s share of GDP.
“Higher inflation drove the top line sales figure but volumes are obviously falling because on a real basis, sales are negative,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group.
“Core retail sales being well below expectations will result in a cut to GDP estimates for Q3 as stated.”
Ian Shepherdson, chief economist at Pantheon Macroeconomics, called the release “a mixed report, but we see no cause for alarm.”
He said the slump in housing will depress some related sales numbers, but overall spending should up as real incomes rise.
The retail numbers led a busy day for economic data.
Elsewhere, initial jobless claims for the week ended Sept. 10 totaled 213,000, a decrease of 5,000 from the previous week and better than the 225,000 estimate.
Import prices in August fell 1%, less than the expected 1.2% decline.
Two manufacturing gauges showed mixed results: The New York Federal Reserve’s Empire State Manufacturing Index for September showed a reading of -1.5, a massive 30-point jump from the previous month.
However, the Philadelphia Fed’s gauge came in at -9.9, a big drop from the 6.2 in August and below the expectation for a positive 2.3 reading.
The two Fed readings reflect the percentage of companies reporting expansion versus contraction, suggesting manufacturing was broadly in a pullback for the month.
The reports, however, pointed to some softening in price pressures.
For New York, the prices paid and prices received indexes respectively declined 15.9 and 9.1 points, though both remained solidly in growth territory with readings of 39.6 and 23.6.
In Philadelphia, prices paid fell nearly 14 points but prices received increased 6.3 points.
Those indexes respectively were 29.8 and 29.6, indicating that prices are still rising overall but at a slower pace.
https://www.cnbc.com/2022/09/15/retail- ... -2022.html
Re: THE ECONOMY
REUTERS
"U.S. retail sales unexpectedly rise, but inflation hampering spending"
By Lucia Mutikani
September 15, 2022
Summary
* Retail sales increase 0.3% in August
* July data revised down to show sales falling 0.4%
* Core retail sales unchanged; July sales revised lower
* Weekly jobless claims fall 5,000 to 213,000
* Manufacturing production edges up 0.1% in August
WASHINGTON, Sept 15 (Reuters) - U.S. retail sales unexpectedly rebounded in August as Americans ramped up purchases of motor vehicles and dined out more amid lower gasoline prices, but demand is cooling as the Federal Reserve aggressively raises interest rates to fight inflation.
Consumer spending, however, is likely to remain supported by persistent strength in the labor market, with other data on Thursday showing the number of people filing new claims for unemployment benefits last week fell to the lowest level in more than three months.
The data was among the last batch of reports released before the Fed's policy meeting next Wednesday.
Together with a surprise increase in consumer prices in August, the reports likely give the U.S. central bank ammunition to deliver a third consecutive 75-basis-point rate hike.
"Demand appears to be slowing this quarter, but job losses look modest at this point of the economic cycle," said Christopher Rupkey, chief U.S. economist at FWDBONDS in New York.
"The storm clouds of recession threatening the economy have blown further offshore and this will likely convince Fed officials to keep their foot down even harder on the brakes."
Retail sales increased 0.3% last month, also lifted by back-to-school shopping.
But data for July was revised down to show retail sales falling 0.4% instead of being unchanged as previously reported.
Economists polled by Reuters had forecast sales would be unchanged, with estimates ranging from as low as a 0.5% decline to as high as a 0.5% increase.
Retail sales, which are mostly goods and are not adjusted for inflation, increased 9.1% year-on-year in August.
Some economists were disappointed that monthly sales did not reverse July's drop, despite consumers getting a reprieve from higher gasoline prices.
They said this was a sign that stubbornly high inflation was forcing some cutbacks on discretionary spending as consumers focused on essential items.
"While consumers remain generally willing to spend, many families, especially those at the lower-to-median end of the income spectrum, are feeling increasingly constrained by elevated prices," said Gregory Daco, chief economist at EY-Parthenon in New York.
Though inflation remains a headache, it is unlikely becoming entrenched, with a separate report from the Labor Department on Thursday showing import prices declining for a second straight month in August, thanks to lower commodity prices and a strong dollar.
Gasoline prices have dropped about 20% from their record peak in June, according to data from the U.S. Energy Information Administration.
Sales at service stations tumbled 4.2% last month, while receipts at auto dealerships increased 2.8%.
Sales at clothing and general merchandise stores increased solidly, driven by back-to-school shopping.
But online and mail-order retail sales fell 0.7% after being boosted in the prior month by Amazon's Prime Day promotion.
Receipts at furniture stores dropped 1.3%, while sales at building material and garden equipment retailers increased 1.1%.
Sales at electronics and appliance stores dipped 0.1%.
There were strong gains in sales at hobby, musical instrument and book stores.
Receipts at bars and restaurants, the only services category in the retail sales report, increased 1.1%.
Stocks on Wall Street were lower.
The dollar was steady against a basket of currencies.
U.S. Treasury prices fell.
TIGHT LABOR MARKET
Excluding automobiles, gasoline, building materials and food services, retail sales were unchanged last month.
Data for July was revised lower to show these so-called core retail sales increasing 0.4% instead of 0.8% as previously reported.
Core retail sales correspond most closely with the consumer spending component of gross domestic product.
A steady pace of consumer spending and strong export growth helped to limit the drag on the economy from a moderation in the pace of inventory accumulation in the second quarter.
Economists estimated that inflation-adjusted core retail sales fell at least 0.5% in August.
This together, with July's downward revision, likely kept real consumer spending on a moderate growth path.
Economic growth estimates for the third quarter are mostly below a 2% annualized rate.
The economy contracted at a 0.6% rate last quarter after declining at a 1.6% pace in the January-March period.
But it is not in recession, with the income side of the growth ledger showing a 1.4% rate of expansion in the second quarter, thanks to labor market resilience.
A third report from the Labor Department showed initial claims for state unemployment benefits fell 5,000 to a seasonally adjusted 213,000 for the week ended Sept. 10, the lowest level since the end of May.
Despite the hand wringing about a possible recession next year due to higher borrowing costs, there has not been a surge in layoffs.
Economists say companies are hoarding workers after experiencing difficulties hiring in the past year as the COVID-19 pandemic forced some people out of the workforce in part because of prolonged illness caused by the virus.
There were 11.2 million job openings at the end of July, with two jobs for every unemployed person.
"We expect employers to slow the pace of hiring before conducting any major layoffs," said Nancy Vanden Houten, lead U.S. economist at Oxford Economics in New York.
While tighter monetary policy has not significantly slowed the labor market, manufacturing is starting to feel the pinch.
Production at factories barely increased in August, a fourth report from the Fed showed.
Manufacturing's struggles were amplified by a fifth report from the Philadelphia Fed showing factory activity in the mid-Atlantic region contracting in September.
In New York State, manufacturing held steady this month, but at weaker levels, a sixth report from the New York Fed showed.
"Supply chain constraints and price pressures appear to be easing, which is a positive for manufacturing," said Rubeela Farooqi, chief U.S. economist at High Frequency Economics in White Plains, New York.
"But factory activity is likely to moderate in response to slowing demand amid a rising interest rate backdrop."
Reporting by Lucia Mutikani; Editing by Paul Simao and Andrea Ricci
https://www.reuters.com/markets/us/us-r ... 022-09-15/
"U.S. retail sales unexpectedly rise, but inflation hampering spending"
By Lucia Mutikani
September 15, 2022
Summary
* Retail sales increase 0.3% in August
* July data revised down to show sales falling 0.4%
* Core retail sales unchanged; July sales revised lower
* Weekly jobless claims fall 5,000 to 213,000
* Manufacturing production edges up 0.1% in August
WASHINGTON, Sept 15 (Reuters) - U.S. retail sales unexpectedly rebounded in August as Americans ramped up purchases of motor vehicles and dined out more amid lower gasoline prices, but demand is cooling as the Federal Reserve aggressively raises interest rates to fight inflation.
Consumer spending, however, is likely to remain supported by persistent strength in the labor market, with other data on Thursday showing the number of people filing new claims for unemployment benefits last week fell to the lowest level in more than three months.
The data was among the last batch of reports released before the Fed's policy meeting next Wednesday.
Together with a surprise increase in consumer prices in August, the reports likely give the U.S. central bank ammunition to deliver a third consecutive 75-basis-point rate hike.
"Demand appears to be slowing this quarter, but job losses look modest at this point of the economic cycle," said Christopher Rupkey, chief U.S. economist at FWDBONDS in New York.
"The storm clouds of recession threatening the economy have blown further offshore and this will likely convince Fed officials to keep their foot down even harder on the brakes."
Retail sales increased 0.3% last month, also lifted by back-to-school shopping.
But data for July was revised down to show retail sales falling 0.4% instead of being unchanged as previously reported.
Economists polled by Reuters had forecast sales would be unchanged, with estimates ranging from as low as a 0.5% decline to as high as a 0.5% increase.
Retail sales, which are mostly goods and are not adjusted for inflation, increased 9.1% year-on-year in August.
Some economists were disappointed that monthly sales did not reverse July's drop, despite consumers getting a reprieve from higher gasoline prices.
They said this was a sign that stubbornly high inflation was forcing some cutbacks on discretionary spending as consumers focused on essential items.
"While consumers remain generally willing to spend, many families, especially those at the lower-to-median end of the income spectrum, are feeling increasingly constrained by elevated prices," said Gregory Daco, chief economist at EY-Parthenon in New York.
Though inflation remains a headache, it is unlikely becoming entrenched, with a separate report from the Labor Department on Thursday showing import prices declining for a second straight month in August, thanks to lower commodity prices and a strong dollar.
Gasoline prices have dropped about 20% from their record peak in June, according to data from the U.S. Energy Information Administration.
Sales at service stations tumbled 4.2% last month, while receipts at auto dealerships increased 2.8%.
Sales at clothing and general merchandise stores increased solidly, driven by back-to-school shopping.
But online and mail-order retail sales fell 0.7% after being boosted in the prior month by Amazon's Prime Day promotion.
Receipts at furniture stores dropped 1.3%, while sales at building material and garden equipment retailers increased 1.1%.
Sales at electronics and appliance stores dipped 0.1%.
There were strong gains in sales at hobby, musical instrument and book stores.
Receipts at bars and restaurants, the only services category in the retail sales report, increased 1.1%.
Stocks on Wall Street were lower.
The dollar was steady against a basket of currencies.
U.S. Treasury prices fell.
TIGHT LABOR MARKET
Excluding automobiles, gasoline, building materials and food services, retail sales were unchanged last month.
Data for July was revised lower to show these so-called core retail sales increasing 0.4% instead of 0.8% as previously reported.
Core retail sales correspond most closely with the consumer spending component of gross domestic product.
A steady pace of consumer spending and strong export growth helped to limit the drag on the economy from a moderation in the pace of inventory accumulation in the second quarter.
Economists estimated that inflation-adjusted core retail sales fell at least 0.5% in August.
This together, with July's downward revision, likely kept real consumer spending on a moderate growth path.
Economic growth estimates for the third quarter are mostly below a 2% annualized rate.
The economy contracted at a 0.6% rate last quarter after declining at a 1.6% pace in the January-March period.
But it is not in recession, with the income side of the growth ledger showing a 1.4% rate of expansion in the second quarter, thanks to labor market resilience.
A third report from the Labor Department showed initial claims for state unemployment benefits fell 5,000 to a seasonally adjusted 213,000 for the week ended Sept. 10, the lowest level since the end of May.
Despite the hand wringing about a possible recession next year due to higher borrowing costs, there has not been a surge in layoffs.
Economists say companies are hoarding workers after experiencing difficulties hiring in the past year as the COVID-19 pandemic forced some people out of the workforce in part because of prolonged illness caused by the virus.
There were 11.2 million job openings at the end of July, with two jobs for every unemployed person.
"We expect employers to slow the pace of hiring before conducting any major layoffs," said Nancy Vanden Houten, lead U.S. economist at Oxford Economics in New York.
While tighter monetary policy has not significantly slowed the labor market, manufacturing is starting to feel the pinch.
Production at factories barely increased in August, a fourth report from the Fed showed.
Manufacturing's struggles were amplified by a fifth report from the Philadelphia Fed showing factory activity in the mid-Atlantic region contracting in September.
In New York State, manufacturing held steady this month, but at weaker levels, a sixth report from the New York Fed showed.
"Supply chain constraints and price pressures appear to be easing, which is a positive for manufacturing," said Rubeela Farooqi, chief U.S. economist at High Frequency Economics in White Plains, New York.
"But factory activity is likely to moderate in response to slowing demand amid a rising interest rate backdrop."
Reporting by Lucia Mutikani; Editing by Paul Simao and Andrea Ricci
https://www.reuters.com/markets/us/us-r ... 022-09-15/
Re: THE ECONOMY
REUTERS
"UPDATE 1-China raises holdings of Treasuries in July, Japan cuts holdings - Treasury data"
By Reuters Staff
SEPTEMBER 16, 2022
NEW YORK, Sept 16 (Reuters) - China increased its holdings of Treasuries in July for the first time in eight months, while Japan reduced its U.S. government debt load, data from the U.S. Treasury department showed on Friday.
China’s stash of Treasuries rose to $970 billion in July, from $967.8 billion in June, which was the lowest since May 2010 when it had $843.7 billion.
Japan, on the other hand, reduced its Treasury debt holdings to $1.234 trillion in July from $1.236 trillion the previous month.
Japan remains the largest non-U.S. holder of Treasuries.
The fall in Japan’s holdings was more or less in line with moves in the currency market.
The yen firmed in July against the greenback, ending the month at 131.6 yen per dollar, from 135.22 yen at the beginning.
The yen’s steep fall against a resurgent dollar this year has raised the prospect of Japan intervening in the market to boost the Japanese currency.
Since the beginning of 2022, the yen has fallen 19.5% versus the dollar.
Overall, foreign holdings of Treasuries rose to $7.501 trillion in July, from 7.430 trillion in June.
On a transaction basis, U.S. Treasuries saw net foreign inflows of $23.12 billion in July, down from $58.9 billion the previous month.
U.S. Treasuries have posted foreign inflows for a third straight month.
The inflows generally tracked price action in the Treasuries market.
The benchmark 10-year Treasury yield started July at 2.904%, and ended the month at 2.642%.
In other asset classes, foreigners sold U.S. equities in July for a seventh straight month amounting to $60.32 billion, from outflows of $25.36 billion in June.
July’s outflow was the largest since March.
U.S. corporate bonds posted inflows in July of $8.78 billion, slightly down from $13.99 billion in June.
Foreigners were net buyers of U.S. corporate bonds for seven straight months.
The Treasury data also showed U.S. residents once again sold their holdings of long-term foreign securities, with net sales of $27.2 billion, from sales of $50.5 billion in June.
(Reporting by Gertrude Chavez-Dreyfuss; Editing by Chris Reese and Jonathan Oatis)
https://www.reuters.com/article/usa-tre ... SL1N30N2YK
"UPDATE 1-China raises holdings of Treasuries in July, Japan cuts holdings - Treasury data"
By Reuters Staff
SEPTEMBER 16, 2022
NEW YORK, Sept 16 (Reuters) - China increased its holdings of Treasuries in July for the first time in eight months, while Japan reduced its U.S. government debt load, data from the U.S. Treasury department showed on Friday.
China’s stash of Treasuries rose to $970 billion in July, from $967.8 billion in June, which was the lowest since May 2010 when it had $843.7 billion.
Japan, on the other hand, reduced its Treasury debt holdings to $1.234 trillion in July from $1.236 trillion the previous month.
Japan remains the largest non-U.S. holder of Treasuries.
The fall in Japan’s holdings was more or less in line with moves in the currency market.
The yen firmed in July against the greenback, ending the month at 131.6 yen per dollar, from 135.22 yen at the beginning.
The yen’s steep fall against a resurgent dollar this year has raised the prospect of Japan intervening in the market to boost the Japanese currency.
Since the beginning of 2022, the yen has fallen 19.5% versus the dollar.
Overall, foreign holdings of Treasuries rose to $7.501 trillion in July, from 7.430 trillion in June.
On a transaction basis, U.S. Treasuries saw net foreign inflows of $23.12 billion in July, down from $58.9 billion the previous month.
U.S. Treasuries have posted foreign inflows for a third straight month.
The inflows generally tracked price action in the Treasuries market.
The benchmark 10-year Treasury yield started July at 2.904%, and ended the month at 2.642%.
In other asset classes, foreigners sold U.S. equities in July for a seventh straight month amounting to $60.32 billion, from outflows of $25.36 billion in June.
July’s outflow was the largest since March.
U.S. corporate bonds posted inflows in July of $8.78 billion, slightly down from $13.99 billion in June.
Foreigners were net buyers of U.S. corporate bonds for seven straight months.
The Treasury data also showed U.S. residents once again sold their holdings of long-term foreign securities, with net sales of $27.2 billion, from sales of $50.5 billion in June.
(Reporting by Gertrude Chavez-Dreyfuss; Editing by Chris Reese and Jonathan Oatis)
https://www.reuters.com/article/usa-tre ... SL1N30N2YK
Re: THE ECONOMY
REUTERS
"U.S. consumer inflation expectations fall in September; sentiment rises"
By Lucia Mutikani
September 16, 2022
WASHINGTON, Sept 16 (Reuters) - U.S. consumers' near-term inflation expectations fell to a one-year low in September and the outlook over the next five years also improved, easing fears that the Federal Reserve could raise interest rates by a full percentage point next week.
The University of Michigan's survey on Friday followed in the wake of data this week showing a surprise increase in consumer prices in August, which raised concerns that high inflation was becoming entrenched.
"This more or less silences those calls for a 100-basis-point hike next week," said Jennifer Lee, a senior economist at BMO Capital Markets in Toronto.
The University of Michigan survey's reading of one-year inflation expectations dropped to 4.6%, the lowest since September 2021, from 4.8% in August.
The survey's five-year inflation outlook slipped to 2.8%, falling below the 2.9%-3.1% range for the first time since July 2021.
"The Fed will likely find some reassurance that inflation expectations on this measure do not appear to have become unmoored," said Conrad DeQuadros, senior economic advisor at Brean Capital in New York.
"The Fed’s messaging on inflation expectations has shifted to the importance of keeping expectations anchored compared to relying on that to play down higher inflation rates."
U.S. stocks were trading lower while the dollar dipped against a basket of currencies.
U.S. Treasury prices were mixed.
Following the release on Tuesday of strong August consumer price readings, financial markets priced in the likelihood that the U.S. central bank would raise its benchmark overnight interest rate by 75 basis points at its Sept. 20-21 policy meeting, with the potential for a 100-basis-point hike, according to CME's FedWatch Tool.
The Fed hiked its policy rate by three-quarters of a percentage point at both its June and July meetings.
Since March, it has lifted that rate from near zero to the current 2.25%-2.50% target range.
Consumer sentiment improved moderately in September, lifted by lower gasoline prices, the University of Michigan survey showed.
Its preliminary reading on the overall index on consumer sentiment came in at 59.5 this month, slightly up from 58.6 in August.
Economists polled by Reuters had forecast a preliminary reading of 60.0 in September.
"With gasoline prices continuing to decline, sentiment should rise further," said Scott Hoyt, senior economist at Moody's Analytics in West Chester, Pennsylvania.
"However, recession concerns, rising interest rates, and the impending softening in the labor market could limit the improvement in confidence."
Reporting by Lucia Mutikani; Editing by Paul Simao
https://www.reuters.com/markets/us/us-c ... 022-09-16/
"U.S. consumer inflation expectations fall in September; sentiment rises"
By Lucia Mutikani
September 16, 2022
WASHINGTON, Sept 16 (Reuters) - U.S. consumers' near-term inflation expectations fell to a one-year low in September and the outlook over the next five years also improved, easing fears that the Federal Reserve could raise interest rates by a full percentage point next week.
The University of Michigan's survey on Friday followed in the wake of data this week showing a surprise increase in consumer prices in August, which raised concerns that high inflation was becoming entrenched.
"This more or less silences those calls for a 100-basis-point hike next week," said Jennifer Lee, a senior economist at BMO Capital Markets in Toronto.
The University of Michigan survey's reading of one-year inflation expectations dropped to 4.6%, the lowest since September 2021, from 4.8% in August.
The survey's five-year inflation outlook slipped to 2.8%, falling below the 2.9%-3.1% range for the first time since July 2021.
"The Fed will likely find some reassurance that inflation expectations on this measure do not appear to have become unmoored," said Conrad DeQuadros, senior economic advisor at Brean Capital in New York.
"The Fed’s messaging on inflation expectations has shifted to the importance of keeping expectations anchored compared to relying on that to play down higher inflation rates."
U.S. stocks were trading lower while the dollar dipped against a basket of currencies.
U.S. Treasury prices were mixed.
Following the release on Tuesday of strong August consumer price readings, financial markets priced in the likelihood that the U.S. central bank would raise its benchmark overnight interest rate by 75 basis points at its Sept. 20-21 policy meeting, with the potential for a 100-basis-point hike, according to CME's FedWatch Tool.
The Fed hiked its policy rate by three-quarters of a percentage point at both its June and July meetings.
Since March, it has lifted that rate from near zero to the current 2.25%-2.50% target range.
Consumer sentiment improved moderately in September, lifted by lower gasoline prices, the University of Michigan survey showed.
Its preliminary reading on the overall index on consumer sentiment came in at 59.5 this month, slightly up from 58.6 in August.
Economists polled by Reuters had forecast a preliminary reading of 60.0 in September.
"With gasoline prices continuing to decline, sentiment should rise further," said Scott Hoyt, senior economist at Moody's Analytics in West Chester, Pennsylvania.
"However, recession concerns, rising interest rates, and the impending softening in the labor market could limit the improvement in confidence."
Reporting by Lucia Mutikani; Editing by Paul Simao
https://www.reuters.com/markets/us/us-c ... 022-09-16/
Re: THE ECONOMY
REUTERS
"FedEx warning drives worst decline in stock, deepens slowdown fears"
By Medha Singh and Bansari Mayur Kamdar
September 16, 2022
Sept 16 (Reuters) - FedEx Corp's shares had their worst day ever and closed at the lowest price since early pandemic months, after the delivery heavyweight pulled its forecast, feeding into fears of a global demand slowdown while piling more pressure on its new chief executive for a quick turnaround.
The company's preliminary results for the fiscal first quarter sent the stock tumbling over 24% to a session low of $155, the lowest since July 2020, with the company wiping off about $12.5 billion in market capitalization.
The stock's drop on Friday surpassed its previous steepest one-day percentage decline of 16.4% on Black Monday in 1987.
FedEx's gloomy outlook for fiscal 2023 comes amid investor anxiety that the U.S. Federal Reserve's rapid pace of interest rate hikes to tame soaring inflation threatens to tip the economy into a recession.
"We suspect that headwinds from an inflation-fatigued U.S. economy, a resource-constrained European economy, and second-order effects from lockdowns in China proved too much to overcome," Cowen analyst Helane Becker said.
The U.S. firm joins global logistics peers such as Hong Kong's Cathay Pacific Airways and France-based transporter CMA CGM in signaling that consumers are saving for essentials such as gas and food ahead of the holiday season as surging prices discourage casual shopping.
Rival United Parcel Service shed 4.5%, XPO Logistics dropped 4.7% and e-commerce giant Amazon.com slipped 2.1%.
The Dow Jones Transport index slipped nearly 5%, while the broader S&P 500 fell about 0.69%.
Across the Atlantic, Germany's Deutsche Post shed 6.6%, London's Royal Mail fell 8.1% and Copenhagen-based DSV dropped 6.2% after the news.
WORK CUT OUT
Analysts also blamed company-specific problems and missteps over the last few years for the woes, stepping up pressure on CEO Raj Subramaniam, who was appointed to the job in March, to do more to win back investor confidence.
"We have noted high levels of investor skepticism directed at management's ability to reach its long-term targets."
"With earnings misses like this, that skepticism seems increasingly warranted," Credit Suisse analysts said.
The results raise "uncomfortable questions regarding whether the organization may simply be too complex and too unwieldy to be capable of achieving satisfactory financial results over the long-term," they added.
FedEx also faced activist investor demands after stiff competition and easing growth in parcel volume dented its profitability.
The Memphis-based company is also dealing with contractor unrest after it misjudged holiday season volume last year.
One of its largest contractors, a Tennessee businessman, pressured FedEx last month to boost compensation.
FedEx later cut ties and sued him.
FedEx on Friday declined to comment beyond the press release on its preliminary results.
Subramaniam warned on CNBC on Thursday that he believes a global downturn was impending.
In response to a question of whether the economy is "going into a worldwide recession," Subramaniam said "I think so."
"But you know, these numbers, they don't portend very well."
Reporting by Medha Singh, Bansari Mayur Kamdar in Bengaluru, additional reporting by Kannaki Deka; Editing by Devika Syamnath, Sriraj Kalluivila and Shinjini Ganguli
https://www.reuters.com/business/retail ... 022-09-16/
"FedEx warning drives worst decline in stock, deepens slowdown fears"
By Medha Singh and Bansari Mayur Kamdar
September 16, 2022
Sept 16 (Reuters) - FedEx Corp's shares had their worst day ever and closed at the lowest price since early pandemic months, after the delivery heavyweight pulled its forecast, feeding into fears of a global demand slowdown while piling more pressure on its new chief executive for a quick turnaround.
The company's preliminary results for the fiscal first quarter sent the stock tumbling over 24% to a session low of $155, the lowest since July 2020, with the company wiping off about $12.5 billion in market capitalization.
The stock's drop on Friday surpassed its previous steepest one-day percentage decline of 16.4% on Black Monday in 1987.
FedEx's gloomy outlook for fiscal 2023 comes amid investor anxiety that the U.S. Federal Reserve's rapid pace of interest rate hikes to tame soaring inflation threatens to tip the economy into a recession.
"We suspect that headwinds from an inflation-fatigued U.S. economy, a resource-constrained European economy, and second-order effects from lockdowns in China proved too much to overcome," Cowen analyst Helane Becker said.
The U.S. firm joins global logistics peers such as Hong Kong's Cathay Pacific Airways and France-based transporter CMA CGM in signaling that consumers are saving for essentials such as gas and food ahead of the holiday season as surging prices discourage casual shopping.
Rival United Parcel Service shed 4.5%, XPO Logistics dropped 4.7% and e-commerce giant Amazon.com slipped 2.1%.
The Dow Jones Transport index slipped nearly 5%, while the broader S&P 500 fell about 0.69%.
Across the Atlantic, Germany's Deutsche Post shed 6.6%, London's Royal Mail fell 8.1% and Copenhagen-based DSV dropped 6.2% after the news.
WORK CUT OUT
Analysts also blamed company-specific problems and missteps over the last few years for the woes, stepping up pressure on CEO Raj Subramaniam, who was appointed to the job in March, to do more to win back investor confidence.
"We have noted high levels of investor skepticism directed at management's ability to reach its long-term targets."
"With earnings misses like this, that skepticism seems increasingly warranted," Credit Suisse analysts said.
The results raise "uncomfortable questions regarding whether the organization may simply be too complex and too unwieldy to be capable of achieving satisfactory financial results over the long-term," they added.
FedEx also faced activist investor demands after stiff competition and easing growth in parcel volume dented its profitability.
The Memphis-based company is also dealing with contractor unrest after it misjudged holiday season volume last year.
One of its largest contractors, a Tennessee businessman, pressured FedEx last month to boost compensation.
FedEx later cut ties and sued him.
FedEx on Friday declined to comment beyond the press release on its preliminary results.
Subramaniam warned on CNBC on Thursday that he believes a global downturn was impending.
In response to a question of whether the economy is "going into a worldwide recession," Subramaniam said "I think so."
"But you know, these numbers, they don't portend very well."
Reporting by Medha Singh, Bansari Mayur Kamdar in Bengaluru, additional reporting by Kannaki Deka; Editing by Devika Syamnath, Sriraj Kalluivila and Shinjini Ganguli
https://www.reuters.com/business/retail ... 022-09-16/
Re: THE ECONOMY
CNBC
"Ford warns investors of an extra $1 billion in supply chain costs during the third quarter"
Michael Wayland @MIKEWAYLAND
PUBLISHED MON, SEP 19 2022
KEY POINTS
* Ford Motor on Monday warned investors that the company expects to incur $1 billion more in costs than previously expected during the third quarter due to inflation and supply chain issues.
* Ford said supply problems have resulted in parts shortages affecting roughly 40,000 to 45,000 vehicles, largely high-margin trucks and SUVs, that haven’t been able to reach dealers.
* The company expects to complete and deliver the vehicles to dealers in the fourth quarter and reaffirmed its full-year guidance.
DETROIT – Ford Motor on Monday warned investors that the company expects to incur $1 billion more in costs than previously expected during the third quarter due to inflation and supply chain issues.
Ford said supply problems have resulted in parts shortages affecting roughly 40,000 to 45,000 vehicles, largely high-margin trucks and SUVs, that haven’t been able to reach dealers.
The company expects to complete and deliver the vehicles to dealers in the fourth quarter and is still projecting 2022 adjusted earnings before interest and taxes of between $11.5 billion to $12.5 billion.
Shares of the company fell about 5% in extended trading following the update.
Ford said based on recent negotiations, inflation-related supplier costs during the third quarter will run about $1 billion higher than originally expected.
The automaker anticipates third-quarter adjusted earnings before interest and taxes to be in the range of $1.4 billion to $1.7 billion.
The company said executives will “provide more dimension about expectations for full-year performance” when the automaker reports its third-quarter results on Oct. 26.
Automakers have been battling supply chain problems since the coronavirus pandemic brought manufacturing to a standstill in early 2020.
Demand continued to be strong, followed by ongoing issues with the availability of parts, specifically, semiconductor chips.
Ford’s largest crosstown rival, General Motors, announced similar issues earlier this year.
GM on July 1 warned investors that supply chain issues would impact its second-quarter earnings, as it had about 95,000 vehicles in its inventory that were manufactured without certain components.
GM at the time also reconfirmed its yearly guidance and said it expects that “substantially all of these vehicles” will be completed and sold to dealers before the end of 2022.
https://www.cnbc.com/2022/09/19/ford-wa ... arter.html
"Ford warns investors of an extra $1 billion in supply chain costs during the third quarter"
Michael Wayland @MIKEWAYLAND
PUBLISHED MON, SEP 19 2022
KEY POINTS
* Ford Motor on Monday warned investors that the company expects to incur $1 billion more in costs than previously expected during the third quarter due to inflation and supply chain issues.
* Ford said supply problems have resulted in parts shortages affecting roughly 40,000 to 45,000 vehicles, largely high-margin trucks and SUVs, that haven’t been able to reach dealers.
* The company expects to complete and deliver the vehicles to dealers in the fourth quarter and reaffirmed its full-year guidance.
DETROIT – Ford Motor on Monday warned investors that the company expects to incur $1 billion more in costs than previously expected during the third quarter due to inflation and supply chain issues.
Ford said supply problems have resulted in parts shortages affecting roughly 40,000 to 45,000 vehicles, largely high-margin trucks and SUVs, that haven’t been able to reach dealers.
The company expects to complete and deliver the vehicles to dealers in the fourth quarter and is still projecting 2022 adjusted earnings before interest and taxes of between $11.5 billion to $12.5 billion.
Shares of the company fell about 5% in extended trading following the update.
Ford said based on recent negotiations, inflation-related supplier costs during the third quarter will run about $1 billion higher than originally expected.
The automaker anticipates third-quarter adjusted earnings before interest and taxes to be in the range of $1.4 billion to $1.7 billion.
The company said executives will “provide more dimension about expectations for full-year performance” when the automaker reports its third-quarter results on Oct. 26.
Automakers have been battling supply chain problems since the coronavirus pandemic brought manufacturing to a standstill in early 2020.
Demand continued to be strong, followed by ongoing issues with the availability of parts, specifically, semiconductor chips.
Ford’s largest crosstown rival, General Motors, announced similar issues earlier this year.
GM on July 1 warned investors that supply chain issues would impact its second-quarter earnings, as it had about 95,000 vehicles in its inventory that were manufactured without certain components.
GM at the time also reconfirmed its yearly guidance and said it expects that “substantially all of these vehicles” will be completed and sold to dealers before the end of 2022.
https://www.cnbc.com/2022/09/19/ford-wa ... arter.html
Re: THE ECONOMY
REUTERSAMERICAN AUTOCRAT JOSEPH ROBINETTE BIDEN, JUNIOR, BEING INTERVIEWED BY SOFTBALL PITCHER SCOTT PELLEY ON 60 MINUTES ON 18 SEPTEMBER 2022:
Scott Pelley: It's the highest inflation rate, Mr. President, in 40 years.
President Joe Biden: I got that.
But guess what we are.
We're in a position where, for the last several months, it hasn't spiked.
It has just barely-- it's been basically even.
And in the meantime, we created all these jobs and-- and prices-- have-- have gone up, but they've come down for energy.
The fact is that we've created 10 million new jobs.
We're in-- since we came to office.
We're in a situation where the-- the unemployment rate is about 3.7%. one of the lowest in history.
We're in a situation where manufacturing is coming back to the United States in a big way.
And look down the road, we have mas-- massive investments being made in computer chips and-- and employment.
So, I-- look, this is a process.
This is a process.
"Ford stock has biggest daily drop since 2011 after inflation warning"
By Kannaki Deka and Noel Randewich
September 20, 2022
Sept 20 (Reuters) - Ford Motor Co's stock tumbled over 12% on Tuesday in its deepest one-day decline in over a decade after the automaker said inflation-related costs would be $1 billion more than expected in the current quarter and that parts shortages had delayed deliveries.
The stock ended at $13.09, making its percentage decline for the session its largest since January 2011.
Ford's preliminary third-quarter results, released late on Monday, sent shares of rival General Motors Co down 5.6% as analysts said it might take more time for automakers to recover from chip shortages.
"It appears that across the industry, chip and components shortages may be improving at a slower pace than anticipated," Deutsche Bank analyst Emmanuel Rosner said.
In July, Ford said it expected commodity costs to rise $4 billion for the year.
The greater Detroit manufacturer's warning comes less than a week after delivery company FedEx Corp withdrew its financial forecast due to slowing global demand.
Ford's inflation troubles and FedEx's weak demand highlight the bind the Federal Reserve finds itself in ahead of the U.S. central bank's policy-making meeting on Wednesday.
The Fed is widely expected to hike rates by 75 basis points in its battle against decades-high inflation.
Its aggressive monetary policy campaign has battered the U.S. stock market in recent weeks, with investors worried the Fed's measures could hobble the economy.
Ford also estimated it would have 40,000 to 45,000 vehicles in inventory lacking parts.
Ford, which is set to report third-quarter results on Oct. 26, affirmed 2022 adjusted earnings before interest and taxes forecast of $11.5 billion to $12.5 billion.
It was unclear if chip and parts supply will normalize by the end of the year, Deutsche Bank's Rosner said.
Ford's shares are down 37% in 2022, well over the S&P 500's 19% decrease.
Reporting by Kannaki Deka in Bengaluru and Noel Randewich in Oakland, Calif.; Editing by Shounak Dasgupta, Richard Chang and David Gregorio
https://www.reuters.com/business/autos- ... 022-09-20/
Re: THE ECONOMY
REUTERS
"U.S. June budget deficit down sharply from 2021 as pandemic aid fades"
By David Lawder
July 13, 2022
July 13 (Reuters) - The U.S. government posted an $89 billion budget deficit during June, roughly half the gap in the same month last year, as pandemic-related outlays fell and revenues edged higher, the Treasury Department said on Wednesday.
For the first nine months of the 2022 fiscal year ending Sept. 30, the deficit fell 77% to $515 billion from $2.238 trillion in the same period of fiscal 2021, with the prior-year figure bloated by COVID-19 aid payments and benefits associated with President Joe Biden's $1.9 trillion American Rescue Plan Act.
Much of the decline in outlays was due to the wind-down of pandemic-related spending on extended unemployment aid, assistance to small businesses and other programs.
But some revenue and spending categories are seeing a shift due to higher interest rates, a Treasury official said.
Federal Reserve earnings in June fell 7% from a year earlier to $10 billion as the result of higher interest paid on bank reserve deposits and a reduction in the U.S. central bank's overall bond holdings as it seeks to tighten monetary policy.
The Treasury's outlays for interest on the public debt rose 24% to $521 billion for the first nine months of fiscal 2022.
The Treasury official said $89 billion of that $102 billion increase was due to higher payments on Treasury Inflation-Protected Securities, while $13 billion was due to higher weighted interest on the debt and a $2 trillion increase in debt outstanding compared to the prior-year period.
The weighted average yield on Treasury debt stood at 1.8% at the end of June, versus 1.61% a year earlier, the official said.
FOX NEWSRigzone
“Oil Falls Ahead of Interest Rate Hikes Expected This Week”
by Bloomberg | Ilena Peng and Julia Fanzeres
Tuesday, September 20, 2022
Oil fell ahead of several global interest-rate decisions that are expected to bring further monetary tightening.
Crude has lost about a third of its value since early June, erasing all the gains made in the wake of Russia’s invasion of Ukraine, amid concerns that a global slowdown will hit demand.
"CNBC host presses Biden economic adviser about how the admin continues to 'reject any blame' for inflation"
Hanna Panreck
19 SEPTEMBER 2022
CNBC "Squawk Box" host Joe Kernen pressed White House Council of Economic Advisers member Heather Boushey about how the Biden administration continues to "reject any blame" for high inflation.
"The administration, Biden Administration, usually rejects any blame for the highest inflation that we were just talking about in 40 years, blaming it on supply chain issues from the pandemic yet at the same time, again, you take credit for creating 10 million jobs, which was a direct result of reopening after the pandemic you also take credit for reducing the deficit by $1.7 trillion, never acknowledging it was simply from not spending those emergency sums that we spent dealing with that pandemic, which you’re admitting caused the inflation, I guess, but had nothing to do with these other two factors," Kernen said.
"It seems like you want to have it both ways."
Boushey said that the economy wasn't doing well when Biden came into office.
"This president put in place a set of policies that fixed the economy, put it on a better path, got jobs back."
"We created almost 10 million jobs under the president’s watch."
"That is an historic and impressive accomplishment that has been delivering for people around the country," she said.
She added that the U.S. was not the only country struggling to bounce back from the COVID-19 pandemic.
"We’re not the only country that struggled with supply chains inflation is a global phenomena, as are the high oil prices."
"But here’s the thing, this president has done what he could to bring down gas prices as fast as he can."
"I believe today is day 97 or maybe yesterday was day 97 of straight declines in gas prices nationwide they’re down by 27% now," she continued.
Biden and his administration consistently blamed high gas prices on Russian President Vladimir Putin and the war in Ukraine as the price of gas hit $5 per gallon over the summer.
Democrats and members of the administration were calling it the "Putin price hike."
The president sat down for an interview that aired over the weekend with CBS News' Scott Pelley that aired on "60 Minutes" on Sunday.
Pelley asked what the administration could be doing better in responding to inflation.
"Well, first of all, let's put this in perspective."
"Inflation rate month to month was just-- just an inch, hardly at all," Biden said.
Pelley added that it was the highest inflation rate in 40 years.
"I got that."
"But guess what we are."
"We're in a position where, for the last several months, it hasn't spiked."
"It has just barely-- it's been basically even."
"And in the meantime, we created all these jobs and -- and prices -- have-- have gone up, but they've come down for energy."
"The fact is that we've created 10 million new jobs."
"We're in -- since we came to office."
"We're in a situation where the -- the unemployment rate is about 3.7%."
"One of the lowest in history."
"We're in a situation where manufacturing is coming back to the United States in a big way.
"And look down the road, we have mas -- massive investments being made in computer chips and -- and employment."
"So, I -- look, this is a process."
"This is a process."
CNBC host Andrew Ross Sorkin asked Boushey about the president's comments.
"I believe what the president said was that he is working to get inflation under control, and it is good news that the monthly numbers have not been increasing at a rapid rate over the past couple months."
"It’s good to see that slowing," she said.
https://www.msn.com/en-us/news/politics ... f35c696ffa
Re: THE ECONOMY
THE WASHINGTON EXAMINER
"Biden flirts with inflation denial ahead of midterm elections"
W. James Antle III
19 SEPTEMBER 2022
President Joe Biden is minimizing inflation in a way that could become a problem in the midterm elections, as consumer prices remain stubbornly high.
Biden’s latest efforts to wave away inflation come on the heels of a White House party, complete with a musical performance by legendary boomer singer-songwriter James Taylor, celebrating a new law with “inflation” in the title on the same day the announcement of an 8.3% August inflation rate sent stock markets tumbling.
The president insisted inflation was up “hardly at all” from the previous months when asked about the consumer price index for August during a rare interview with 60 Minutes.
Biden said inflation has “been basically even" month over month.”
"Mr. President, as you know, last Tuesday, the annual inflation rate came in at 8.3%."
"The stock market nosedived."
"People are shocked by their grocery bills."
"What can you do better and faster?" CBS’s Scott Pelley asked.
“Well, first of all, let's put this in perspective."
"Inflation rate month to month was just an inch, hardly at all,” Biden replied.
Biden has tried to emphasize the monthly numbers because they are more favorable, although most of his prepared remarks on inflation state there is more work to be done.
He described “zero inflation” the previous month and cited a 0.1% price hike in August.
The president has also tried to put the focus on energy prices, especially gasoline at the pump, because they have seen some of the fastest declines, even though they remain higher than when he took office.
He has been relatively quiet about high grocery bills, which are at least as important to ordinary consumers.
But there is a reason inflation tends to be measured at an annualized rate.
And the economic reality is that prices may have stabilized, but at a rate much higher than ordinary Americans are used to.
We have also seen months of stagnant inflation-adjusted wage growth, fueling negative perceptions of the economy that have not rebounded as much as Biden’s overall job approval ratings.
Biden remains underwater on both the economy and overall job approval just 50 days out from the midterm elections, in which Democrats are defending small congressional majorities.
There was also a risk that Biden would exaggerate the degree to which improvements in the data reflected a significant enhancement of voters’ living standards.
Thirty years ago, Democrats won an election running against a sluggish economy even though the recession had ended in March 1991 — before Bill Clinton, the party’s Biden-endorsed presidential nominee, had even formally declared his candidacy.
Voter perceptions are often a lagging indicator behind macroeconomic data, and prices can remain stubbornly high even as inflation crests.
Another risk of inflation continuing to run at a four decade high, as Pelley pointed out to Biden on 60 Minutes, is that the Federal Reserve could push the economy into recession to get the inflationary spike under control.
Biden has also been adamant that the economy is not in recession, citing jobs data that was generally positive all the way back when his economic approval ratings first began to tank.
Some of Biden’s recent comments about inflation come perilously close to denial about the problem, which runs the risk of making him appear out of touch to voters as Democrats defend their congressional seats.
It’s a far cry from over the summer, when Biden declared inflation his top domestic policy priority.
“The most important thing we can do now to transition from rapid recovery to stable, steady growth is to bring inflation down,” Biden wrote in a Wall Street Journal op-ed.
He conceded the pace of job growth may slow as a result of inflation-fighting measures.
“Americans are anxious."
"I know that feeling,” Biden added.
“I grew up in a family where it mattered when the price of gas or groceries rose.”
Biden has been touting what his spending bills will do to alleviate high costs of prescription drugs and other things.
That was a major theme of his Inflation Reduction Act event on the day the consumer price index numbers were released.
At the same time, he has been consistently wrong about his inflation predictions and unwilling to acknowledge any significant relationship between high spending and inflation.
Economists have expressed concern about possible inflationary effects of the student loan debt forgiveness plan.
Many dispute the Inflation Reduction Act will do anything to lower inflation, especially in the short term, and polls show much of the general public expects the law to make it worse.
Polls consistently show inflation a top voter concern ahead of the midterms, though Biden and Democrats have been trying to shift the focus to other issues, such as abortion or former President Donald Trump.
In the 60 Minutes interview, Biden also appeared uncertain about whether he will run for reelection, forced the White House to once again clean up after him on Taiwan, and was more opinionated about Trump’s handling of classified documents than the administration line has suggested.
https://www.msn.com/en-us/news/politics ... f35c696ffa
"Biden flirts with inflation denial ahead of midterm elections"
W. James Antle III
19 SEPTEMBER 2022
President Joe Biden is minimizing inflation in a way that could become a problem in the midterm elections, as consumer prices remain stubbornly high.
Biden’s latest efforts to wave away inflation come on the heels of a White House party, complete with a musical performance by legendary boomer singer-songwriter James Taylor, celebrating a new law with “inflation” in the title on the same day the announcement of an 8.3% August inflation rate sent stock markets tumbling.
The president insisted inflation was up “hardly at all” from the previous months when asked about the consumer price index for August during a rare interview with 60 Minutes.
Biden said inflation has “been basically even" month over month.”
"Mr. President, as you know, last Tuesday, the annual inflation rate came in at 8.3%."
"The stock market nosedived."
"People are shocked by their grocery bills."
"What can you do better and faster?" CBS’s Scott Pelley asked.
“Well, first of all, let's put this in perspective."
"Inflation rate month to month was just an inch, hardly at all,” Biden replied.
Biden has tried to emphasize the monthly numbers because they are more favorable, although most of his prepared remarks on inflation state there is more work to be done.
He described “zero inflation” the previous month and cited a 0.1% price hike in August.
The president has also tried to put the focus on energy prices, especially gasoline at the pump, because they have seen some of the fastest declines, even though they remain higher than when he took office.
He has been relatively quiet about high grocery bills, which are at least as important to ordinary consumers.
But there is a reason inflation tends to be measured at an annualized rate.
And the economic reality is that prices may have stabilized, but at a rate much higher than ordinary Americans are used to.
We have also seen months of stagnant inflation-adjusted wage growth, fueling negative perceptions of the economy that have not rebounded as much as Biden’s overall job approval ratings.
Biden remains underwater on both the economy and overall job approval just 50 days out from the midterm elections, in which Democrats are defending small congressional majorities.
There was also a risk that Biden would exaggerate the degree to which improvements in the data reflected a significant enhancement of voters’ living standards.
Thirty years ago, Democrats won an election running against a sluggish economy even though the recession had ended in March 1991 — before Bill Clinton, the party’s Biden-endorsed presidential nominee, had even formally declared his candidacy.
Voter perceptions are often a lagging indicator behind macroeconomic data, and prices can remain stubbornly high even as inflation crests.
Another risk of inflation continuing to run at a four decade high, as Pelley pointed out to Biden on 60 Minutes, is that the Federal Reserve could push the economy into recession to get the inflationary spike under control.
Biden has also been adamant that the economy is not in recession, citing jobs data that was generally positive all the way back when his economic approval ratings first began to tank.
Some of Biden’s recent comments about inflation come perilously close to denial about the problem, which runs the risk of making him appear out of touch to voters as Democrats defend their congressional seats.
It’s a far cry from over the summer, when Biden declared inflation his top domestic policy priority.
“The most important thing we can do now to transition from rapid recovery to stable, steady growth is to bring inflation down,” Biden wrote in a Wall Street Journal op-ed.
He conceded the pace of job growth may slow as a result of inflation-fighting measures.
“Americans are anxious."
"I know that feeling,” Biden added.
“I grew up in a family where it mattered when the price of gas or groceries rose.”
Biden has been touting what his spending bills will do to alleviate high costs of prescription drugs and other things.
That was a major theme of his Inflation Reduction Act event on the day the consumer price index numbers were released.
At the same time, he has been consistently wrong about his inflation predictions and unwilling to acknowledge any significant relationship between high spending and inflation.
Economists have expressed concern about possible inflationary effects of the student loan debt forgiveness plan.
Many dispute the Inflation Reduction Act will do anything to lower inflation, especially in the short term, and polls show much of the general public expects the law to make it worse.
Polls consistently show inflation a top voter concern ahead of the midterms, though Biden and Democrats have been trying to shift the focus to other issues, such as abortion or former President Donald Trump.
In the 60 Minutes interview, Biden also appeared uncertain about whether he will run for reelection, forced the White House to once again clean up after him on Taiwan, and was more opinionated about Trump’s handling of classified documents than the administration line has suggested.
https://www.msn.com/en-us/news/politics ... f35c696ffa