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Tag: Inflation

  • Four takeaways from the Georgia governor’s debate | CNN Politics

    Four takeaways from the Georgia governor’s debate | CNN Politics

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    CNN
     — 

    Republican Gov. Brian Kemp and Democrat Stacey Abrams sparred over health care, crime and punishment, and voting rights in a Monday debate as they made their closing arguments to voters in a reprise of their fiercely contested 2018 race for the same job.

    The stakes for this night were arguably higher for Abrams, who has trailed in most recent polling of the race. Kemp, one of the few prominent Republicans to resist former President Donald Trump’s lies about a stolen election in 2020, has positioned himself as a more traditional, pro-business conservative – a tack that his gentle resistance to Trump reinforced with swing voters. Abrams has argued that Kemp shouldn’t get any special credit for doing his job and not breaking the law.

    Kemp and Abrams were joined by Libertarian nominee Shane Hazel, who took shots at both his opponents and plainly stated his desire to send the election to a run-off. (If no one receives a clear majority on Election Day, the top two finishers advance to a one-on-one contest.) But it was the two major party candidates, who ran tight campaigns four years ago with Kemp emerging the narrow victor, who dominated the debate stage. Their disagreements were pointed, as they were in 2018, their attacks and rebuttals well-rehearsed and, to a large degree, predictable.

    Here are the four main takeaways from the Georgia governor’s debate:

    Like Republican Senate candidate Herschel Walker did in his debate with Democratic Sen. Raphael Warnock last week, Kemp took every opportunity – and when they weren’t there, tried anyway – to connect Abrams to Biden, who, despite winning the state in 2020, is a deeply unpopular figure there now.

    “I would remind you that Stacey Abrams campaigned to be Joe Biden’s running mate,” Kemp said, referring to the chatter around Abrams potentially being chosen as his running mate two years ago.

    During an exchange with the moderators about abortion, Kemp pivoted to the economy – and again, invoked Biden and Democrats on Capitol Hill.

    “Georgians should know that my desire is to continue to help them fight through 40-year high inflation and high gas prices and other things that our Georgia families are facing right now, quite honestly, because of bad policies in Washington, DC, from President Biden and the Democrats that have complete control,” he said.

    Abrams, unlike so many other Democrats running this year, has not sought to distance herself from the President and recently said publicly that she would welcome him in Georgia. First lady Jill Biden visited last week for an Abrams fundraiser, where she criticized Kemp over his position on abortion as well as his refusal to expand Medicaid and voting rights.

    Early on in the night, Kemp was questioned about remarks he made – taped without his knowledge – at a tailgate with University of Georgia College Republicans in which he expressed some openness to a push to ban contraceptive drugs like “Plan B.”

    Asked if he would pursue such legislation if reelected, Kemp said, “No, I would not” and that “it’s not my desire to” push further abortion restrictions, before pivoting to an attack on Biden, national Democrats and more talk about his economic record.

    Pressed on the remarks, Kemp suggested he was just humoring a group of people he didn’t know.

    On the tape, Kemp, though he didn’t seem enthusiastic, said, “You could take up pretty much everything, but you’ve got to be in legislative session to do that.”

    When asked if it was something he could do, Kemp said, “It just depends on where the legislators are,” and that he’d “have to check and see because there are a lot of legalities.”

    Georgia in 2019 passed and Kemp signed a so-called “heartbeat” bill, which bans abortions at around six weeks, and went into effect soon after the Supreme Court overturned Roe. v. Wade. Before the ruling, abortion was legal in the state until 20 weeks into pregnancy.

    Abrams has promised to work to “reverse” the law, though she would face significant headwinds in the GOP-controlled state legislature, and called the state law “cruel.”

    One of the first questions posed to Abrams centered on her speech effectively – but not with the precise language – conceding the 2018 election to Kemp.

    In those remarks, Abrams made a symbolic point in arguing that she was not conceding the contest, because Kemp, as the state’s top elections official, and his allies had unfairly worked to suppress the vote. Instead, Abrams said then, she would only “acknowledge” him as the winner.

    Some Republicans have tried to make hay over the speech, in a measure of whataboutism usually attached to Trump’s refusal to accept the 2020 results. Abrams, apart from a court challenge, never tried to overturn the outcome of her race.

    Still, she was asked on Monday night whether she would accept the results of the coming election – and said yes – before again accusing Kemp of, through the state’s new restrictive voting law, SB 202, seeking to make it more difficult for people to cast ballots.

    “Brian Kemp was the secretary of state,” Abrams said, recalling her opponent’s old job. “He has assiduously denied access to the right to vote.”

    Kemp countered by pointing to high turnout numbers over the past few elections and, as he’s said before, insisted the law made it “easy to vote and hard to cheat.”

    When the candidates were given the chance to question one another, Kemp asked Abrams to name all the sheriffs who had endorsed her campaign.

    The answer, of course, was that most law enforcement groups in the state are behind the Republican – a point he returned to throughout the debate.

    “Mr. Kemp, what you are trying to do is continue the lie that you’ve told so many times I think you believe it’s true. I support law enforcement and did so for 11 years (in state government),” Abrams said. “I worked closely with the sheriff’s association.”

    Abrams also accused Kemp of cynically trying to weaponize criminal justice and public safety issues by pitting her against police. The reality, she said, was less cut-and-dry.

    “Like most Georgians, I lead a complicated life where we need access to help but we also need to know we are safe from racial violence,” she said, before turning to Kemp. “While you might not have had that experience, too many people I know, have.”

    Kemp, though, kept the message simple. “I support safety and justice,” he said, often pointing to his anti-gang initiatives – especially when he was pressed on the effect of his loosening gun laws on crime.

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  • France plays bad cop as transatlantic trade tensions ramp up

    France plays bad cop as transatlantic trade tensions ramp up

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    PARIS — U.S. President Joe Biden needs to watch out; France is resuming its traditional role as Europe’s troublemaker on the transatlantic trade front.

    It had seemed like the bad blood between Brussels and Washington was easing on Biden’s watch. Facing a common foe in China, the EU and the U.S. last year struck a truce on the tariffs that former President Donald Trump slapped on European steel and aluminium. Over this year, Russia’s war against Ukraine has meant that America and Europe needed to present a united front, at least politically.

    Cracks are now starting to re-emerge, however. The EU is furious that the U.S. is pouring subsidies into the homegrown electric car industry. Accusing Washington of protectionism, Europe is now threatening to draw up its own defenses.

    Unsurprisingly, French President Emmanuel Macron is leading the charge. “The Americans are buying American and pursuing a very aggressive strategy of state aid. The Chinese are closing their market. We cannot be the only area, the most virtuous in terms of climate, which considers that there is no European preference,” Macron told French daily Les Echos.

    Upping the ante, he called on Brussels to support consumers and companies that buy electric cars produced in the EU, instead of ones from outside the bloc. 

    There are good reasons why the Europeans are fretting about their trade balances.

    The war has delivered a huge terms-of-trade shock, with spiraling energy costs hauling the EU into a yawning bloc-wide trade deficit of €65 billion in August, from only €7 billion a year earlier. In one manifestation of those strains, Europe’s growing reliance on American liquefied natural gas to substitute for lost Russian supplies has re-ignited tensions.

    Macron’s comments are a reflection of EU consternation over Washington’s Inflation Reduction Act, which incentivizes U.S. consumers to “Buy American” when purchasing a greener car. The EU argues that requiring that car needs to be assembled in North America and contain a battery with a certain percentage of local content discriminate against the EU and other trade partners.

    The European Commission hopes to convince Washington to find a diplomatic compromise for European carmakers and their suppliers. If not, that leaves the EU no choice but to challenge Washington at the World Trade Organization, EU officials and diplomats told POLITICO — even if a new transatlantic trade war is the last thing both sides want to spend their time and money on.

    Macron’s comments “are clearly a response against the Inflation Reduction Act,” noted Elvire Fabry, a trade policy expert at the Institut Jacques Delors in Paris. “Macron plays the role of the bad cop, compared to the European Commission, which left Washington some political room to make adjustments,” she noted. 

    ‘American domination’

    The Commission hopes to find a diplomatic compromise with the U.S. for European carmakers and their suppliers | Ludovic Marin/AFP via Getty Images

    France has traditionally been the bloc’s most outspoken country when it came to confronting Washington on a wide range of trade files. Paris, for instance, played a key role in killing a transatlantic trade agreement between the EU and U.S. (the so-called “TTIP”). Its digital tax angered U.S. Big Tech and triggered a trade war with the Trump administration.

    More recently, during its rotating Council of the EU presidency, Paris focused on trade defense measures, which will give Brussels the power to retaliate against unilateral trade measures, including from the U.S.

    New tensions are bad news for the upcoming meeting of the Trade and Tech Council early December, which so far has had trouble to show that it’s more than a glorified talking shop. 

    France won’t be left alone in a possible trade war on electric cars. According to Fabry, these tensions will bring Paris and Berlin closer, as the German car industry is also particularly affected by the U.S. measures.

    But the “Buy American” approach is not the only bone of contention. The fact that Europe is increasingly relying on gas imports from the U.S. brought European discontent to the next level.

    Although gas import prices fell in September from their all-time highs in August, they were still more than 2.5 times higher than they were a year ago. And, taking into account increased purchase volumes, France’s bill for imports of LNG multiplied more than tenfold in August, year on year, by one estimate.

    Economy and Finance Minister Bruno Le Maire last week warned that Russia’s war against Ukraine should not result in “American economic domination and a weakening of Europe.” Le Maire criticized the U.S. for selling LNG to Europe “at four times the price at which it sells it to its own companies,” and called on Brussels to take action for a “more balanced economic relationship” between the two continents.

    That very same concern is shared by some Commission officials, POLITICO has learned, but also among French industrialists.

    It is “hardly contestable” that the U.S. had some economic benefits from the war in Ukraine and suffered less than Europe from its economic consequences, said Bernard Spitz, head of international and European affairs at France’s business lobby Medef. 

    This article is part of POLITICO Pro

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    Giorgio Leali and Barbara Moens

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  • Economist Betsey Stevenson says core inflation rate is “the stuff that’s hard to bring down”

    Economist Betsey Stevenson says core inflation rate is “the stuff that’s hard to bring down”

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    Economist Betsey Stevenson says core inflation rate is “the stuff that’s hard to bring down” – CBS News


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    University of Michigan professor Betsey Stevenson, the former top economist at the U.S. Department of Labor, said the 6.6% core inflation rate is what really worries economists. “That’s the stuff that’s hard to come down,” she told “Face the Nation.”

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  • Halloween spending expected to increase by $500 million — as candy prices soar at the highest rate on record

    Halloween spending expected to increase by $500 million — as candy prices soar at the highest rate on record

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    It’s going to be a big year for Halloween, despite millions of Americans feeling under financial pressure due to inflation.

    Total spending is expected to hit $10.6 billion, an increase of 5% or $500 million on last year, the National Retail Federation estimates. That’s up $2 billion or 20% on the $8.8 billion Halloween expenditure in 2019 before the COVID-19 pandemic. 

    Spending on costumes expect to reach $3.6 billion this year, the NRF survey finds, the highest since 2017. Adult costume spending could reach $1.7 billion this year, $200 million more than last year.

    More than half (57%) of Americans said that inflation did impact their Halloween spending, according to a separate LendingTree Halloween spending survey. In fact, nearly a quarter of this group said they were buying less candy.

    Inflation was 8.2% in September compared to last year, according to Bureau of Labor Statistics data. It was among the highest level in the past four decades.

    Candy and chewing gum rose 13.1% year-on-year in September, the highest increase on record, the BLS said. To put that in context: Candy and chewing gum increased 13% from December 1997 to December 2006.

    Candy and chewing gum rose 13.1% year-on-year in September, the highest increase on record.

    For those who haven’t started, the competition was already on. In July, Home Depot
    HD,
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    announced that its popular 12-foot skeleton was sold out, three months before the celebration. 

    A Home Depot spokesperson confirmed the initial sellout of the skeleton in summer, and said the company has been releasing more of these items periodically since then.

    Supply-chain disruptions could also complicate the competition. During Hershey’s
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    second-quarter earnings call in July, Chief Executive Officer Michele Buck said the candy manufacturer had to prioritize the everyday candy packaging over the Halloween ones. She said that decision was “critical to enable us to increase advertising and merchandising levels.”

    In an email to MarketWatch, however, a Hershey’s spokesperson said this decision was not a sign of shortage, adding that the brand had produced more candies for the season than they had in previous years, as Halloween demand remains high. 

    “Like every season over the past few years, sell-through at retail remains high with people purchasing candy, décor and other seasonal items earlier and more often. As a result, seasonally packaged candy may be more limited on the shelf as we get to the final week of the season. Fortunately, the same great brands in snack sizes are available to help fill trick-or-treat bags and buckets,” she said.  

    On average, Americans plan to spend between $100 and $169 on Halloween candy, décor, cards and costumes.

    On average, Americans plan to spend $100 on average for Halloween candy, décor, cards and costumes, the National Retail Federation said. LendingTree estimates that households will spend $169 this year, with six-figure salary earners and parents with young children planning to spend the most — $340 and $309 respectively.

    More than a third of the consumers surveyed admit they plan to spend more than they can afford this year. Generation Z — those aged 18 to 24 — and parents with younger children are the most likely to admit to overspending.

    “With the worst of the pandemic further in the rearview mirror, people are excited to get back to spending on the things they love most —, particularly the things they maybe couldn’t fully enjoy over the last few years,” LendingTree chief credit analyst Matt Schulz said.

    The most common reason for overspending: 44% of respondents said they spent more than they had expected, while 34% said they were making their children happy.

    The NRF concluded that 40% of people are shopping at discount stores this Halloween, 36% at specialty Halloween costume stores, and 31% online. Another 11% said they will shop at thrift stores and resale shops.

    “Social media is playing an increasingly important role in consumer behavior, and Halloween is no different,” Phil Rist, executive vice-president of strategy at Prosper Insights & Analytics, said. “Younger consumers, particularly those under the age of 25, will look to platforms like Instagram and TikTok for costume inspiration this year.”

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  • 3 inflation-savvy money moves to make now

    3 inflation-savvy money moves to make now

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    Inflation is proving to be a stubborn, unwanted houseguest.

    No one particularly likes paying more for food, fuel and other living costs. But so far, the Federal Reserve’s attempts since March to evict inflation with higher interest rates haven’t worked. Because we may be stuck with this unpleasant roommate for a while, we should consider how best to cope.

    The following moves could help.

    Craft a better plan for your cash

    Many people live paycheck to paycheck with little savings. Other people have the opposite problem: They’re letting too much cash sit idle in bank accounts that aren’t earning their keep.

    As of October, the national average interest rate on savings accounts is just 0.17%, according to the Federal Deposit Insurance Corp. Meanwhile, inflation as measured by the consumer price index is over 8%.

    “There’s just no way that cash in the bank is going to keep up with inflation, so it’s going to lose value,” says certified financial planner Ben Henry-Moreland, who blogs at Kitces.com, a site for financial advisers.

    You can get inflation-beating returns by using savings to pay down any high-rate, variable debt, such as credit card balances. If your credit card charges 18% interest, for instance, you’re effectively getting an 18% guaranteed return by paying off that balance.

    Setting goals and timelines for your cash also may help you get more for your money, Henry-Moreland says. For example, financial planners typically recommend maintaining an emergency fund equal to three to six months’ worth of expenses. That money should remain somewhere safe and accessible, such as an FDIC-insured bank account, because you may need it at any time. But you don’t have to accept a brick-and-mortar bank’s negligible return; several online banks are offering interest rates of 2% or more on savings accounts.

    Perhaps you’ll earmark some savings for the vacation you want to take in a year or the down payment on a house in five years. You could lock your vacation money into a one-year certificate of deposit (some online banks are offering 3% on those ), while the down payment could be invested in a Series I savings bond, which is yielding 9.62%

    That’s a great rate, obviously, but Series I-bonds have several restrictions: You can’t withdraw money for the first 12 months, and you’ll forfeit three months of interest if you withdraw money in the first five years. You’re limited to buying $10,000 in I-bonds electronically at TreasuryDirect.gov each year and $5,000 more in paper bonds annually using your tax refund.

    Consider using excess cash to beef up your retirement accounts or investing that money in a taxable brokerage account, Henry-Moreland says. A diversified portfolio of stocks is likely to outpace inflation over the long run, although the potential for short-term losses means you shouldn’t invest any money you’ll need within five years or so.

    Review your homeowners insurance coverage

    Building costs have been soaring, and your homeowners insurance coverage may not be keeping up.

    About two-thirds of homeowners who lose their houses to wildfires or other disasters discover their insurance won’t cover the complete cost of rebuilding, says Amy Bach, executive director of United Policyholders, an insurance-focused consumer advocacy group.

    You can ask your insurance company or agent to review your coverage and recommend appropriate limits, Bach says. But those estimates may rely on problematic industry software that could underestimate the costs, she says. She recommends you also talk to a contractor or appraiser who can give you an estimate of rebuilding costs per square foot in your area.

    Lookout for “bracket creep”

    If your earnings increased this year, you may be at risk for “bracket creep.” That’s when you’re pushed into a higher tax bracket — and face higher tax bills — even if your pay isn’t keeping up with inflation.

    Dozens of federal tax provisions can be adjusted for inflation each year, including tax brackets, standard deduction amounts, limits for retirement contributions and certain credits, says Melanie Lauridsen, director for tax practice and ethics at the American Institute of CPAs. 


    Concerns about more aggressive rate hike after hot inflation data

    03:44

    Since 2018, however, Congress has required that the IRS use a measure of inflation called the chained consumer price index that typically lags the consumer price index. What’s more, inflation adjustments for the following year are determined using the inflation rate in August, Henry-Moreland notes. If inflation spikes later in the year, as it did in 2021, bracket creep is more likely.

    Let’s say you got an 8% raise this year to cope with inflation. But the standard deduction and tax brackets increased by only about 3% for 2022. That means you could find yourself in a higher tax bracket when you file your returns in April.

    Calculating your likely 2022 taxes now can alert you to any looming tax bill and give you some time to cope — by stuffing more money into pre-tax retirement accounts, for example, or filling out a new W-4 to adjust your withholding.

    This column was provided to The Associated Press by the personal finance site NerdWallet. The content is for educational and informational purposes and does not constitute investment advice. Liz Weston is a columnist at NerdWallet, a certified financial planner and author of “Your Credit Score.”

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  • September Inflation Figures Are No Cause For Alarm

    September Inflation Figures Are No Cause For Alarm

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    The headlines for last week’s inflation figures look very familiar. The Federal Reserve is “losing the war against inflation” and it can’t let up in the face of the “alarming US inflation figures.”

    These kinds of headlines are great for grabbing people’s attention, but otherwise they are not very helpful. As I (and others) have pointed out repeatedly, the year-to-year inflation rates will remain elevated for many more months even if the price level stays perfectly flat. That’s simply the math that we’re stuck with because the initial spike in prices was so high.

    But those year-to-year rates say little about whether the Fed is currently failing to tame inflation or if the current rate of inflation is alarming.

    To get a handle on these questions, one must look at the month-to-month inflation trends. The year-to-year changes reveal more about how the price level behaved earlier in the year. So, let’s check out those month-to-month changes that were released on October 13th.

    From August to September, the Consumer Price Index rose 0.4 percent.

    Is that figure alarming? Is inflation out of control? Those terms are rather subjective, but the monthly rate is well shy of the 8.2 percent annual rate reported for September.

    As for the monthly trend, starting with July, the previous three rate increases were zero, 0.1, and 0.4 percent. So, the September rate is a bit higher than August when the monthly change was just 0.1 percent. Still, the last three months look better than the previous four, when the CPI increased by 1.2 percent (March), 0.3 percent (April), 1.0 percent (May), and 1.3 percent (June).

    For the last three months, the rate of inflation averaged 0.17 percent. It averaged almost one percent for the previous four months.

    Then, there’s the bigger question of what should the Fed do? To answer that question, let’s take a closer look at the details underlying the last two monthly CPI releases.

    Many of the individual categories driving the overall inflation rate (i.e., driving the full CPI) were essentially unchanged from September to August. Changes in both major food categories and shelter, for example, were identical. New vehicle prices were only 0.1 percentage point different.

    One of the main reasons the overall CPI rate was up a bit is that transportation services increased 1.9 percent in September, while it had only increased 0.5 percent in August. Moreover, energy prices fell just 2.1 percent in September after declining five percent in August. (Gasoline prices fell 4.9 percent in September after falling 10.6 percent in August, and fuel oil fell 2.7 percent in September versus 5.9 percent in August.)

    A deeper look at those transportation numbers reveals what caused the 1.9 percent spike in September. The transportation services category includes the following three smaller items: (1) Motor vehicle maintenance and repair; (2) Motor vehicle insurance; and (3) Airline fares. From August to September, the first two items changed very little. However, airline fires increased 0.8 percent in September after having declined 4.6 percent in August.

    Given that so many of the other CPI categories were essentially unchanged from August, if airline fares had declined at the same rate as the previous month, the overall CPI would have been flat. In that case, the average rate for the last three months would have been very close to zero.

    Either way, there’s not much cause for alarm in the September numbers compared to the last few months. When the overall CPI barely moves for two consecutive months, and only increases by 0.3 percentage points because airline ticket prices rose (after having declined in the previous month), it’s hard to say the United States is experiencing runaway inflation.

    This finer level of detail also has broader implications for the Fed and the way that it conducts monetary policy. The Fed adjusts its rate targets based on the overall rate of inflation to either slow down the overall flow of credit or boost it. For the last year or so, the Fed has been tightening, trying to slow down the overall flow of credit to slow down the economy and, therefore, the rate of inflation.

    Whatever the Fed does right now with rates, it will likely have very little effect on airline fares. The Fed has poor price setting powers regarding specific categories of goods. Monetary policy is a very blunt instrument, and the past year has been a textbook case for why a central bank should not target prices at all.

    So, while it makes sense for the Fed to stay its current course–talking tough on inflation and raising its targets if market rates continue to rise–it must avoid the clickbait.

    Put differently, the Fed can ignore the dire headlines and avoid tightening so much that it causes a recession. If inflation expectations stay anchored–and there are indications that the Fed has succeeded on this front–the Fed won’t have to go crazy.

    As I’ve argued before, journalists can help the Fed manage these inflation expectations. Just give more weight to the recent direction of the price level and stop fixating on the “record” annual rates. Those are going to stay high for many more months unless the Fed engineers a massive, rapid price deflation. And nobody, least of all the Fed, wants that outcome.

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    Norbert Michel, Contributor

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  • March against inflation turns up political heat in France

    March against inflation turns up political heat in France

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    PARIS (AP) — Thousands of protesters, including France’s newly crowned Nobel literature laureate, piled into the streets of Paris on Sunday, in a show of anger against the bite of rising prices and cranking up pressure on the government of President Emmanuel Macron.

    The march for wage increases and other demands was organized by left-wing opponents of Macron and lit the fuse on what promises to be an uncomfortable week for his centrist government.

    Transport strikes called for Tuesday threaten to dovetail with wage strikes that have already hobbled fuel refineries and depots, sparking chronic gasoline shortages that are fraying nerves among millions of workers and other motorists dependent on their vehicles, with giant lines forming at gas stations.

    Macron’s government is also on the defensive in parliament, where it lost its majority in legislative elections in June. That is making it much harder for his centrist alliance to implement his domestic agenda against strengthened opponents, and parliamentary discussion of the government’s budget plan for next year is proving particularly difficult.

    In a firebrand speech to the Paris march, far-left leader Jean-Luc Mélenchon charged that Macron is “fried” and that his leadership is plunging France into “chaos.”

    He predicted that Macron’s ministers would have to ram the budget through parliament’s lower house without giving lawmakers a vote — a controversial prospect that provoked loud boos from the crowd.

    Organizers claimed that more than 140,000 protesters marched. Paris police said they didn’t have an immediate estimate for the size of the dense flag-waving crowd that filled squares and streets. There were a few outbreaks of vandalism on the margins, with garbage bins set on fire and bank machines smashed. Riot police kept order.

    Demonstrating at Mélenchon’s side was French author Annie Ernaux, who won the Nobel Prize for literature this year. Mélenchon — twice beaten by Macron in presidential elections — declared the protest “an immense success.”

    Organizers called it a “march against the high cost of living and climate inaction.” As well as calling for massive investment against the climate crisis, they also demanded emergency measures against high prices, including freezes in the costs of energy, essential goods and rents, and for greater taxation of windfall profits.

    Lawmaker Christophe Bex of the left-wing party France Insoumise — or France Unbowed — called the march “a demonstration of strength” to show “that another world is finally possible if we are all together and all united.”

    Another marcher, retired railway worker Eric Doire, said: “What we want is for everyone to live decently with the purchasing power they had before.”

    ___

    John Leicester in Le Pecq and Masha Macpherson in Paris contributed to this report.

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  • Asian shares mixed as markets eye China meeting

    Asian shares mixed as markets eye China meeting

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    TOKYO — Asian shares were mixed Monday as investors kept their eyes on the weeklong Communist Party congress in China.

    Benchmarks dropped in Tokyo, Sydney and Hong Kong, but they recovered in afternoon trading in Seoul and Shanghai. Mumbai gained. Oil prices and U.S. futures rose.

    The meeting in China, which opened Sunday, is expected to reappoint Xi Jinping as leader for the next five years, reaffirming his grip on power and stronger state control over the economy. Analyst expect no change to the “zero-COVID policy.”

    “Fresh updates from China’s Party Congress are being scrutinized, with the emphasis on technological advancement and national security seemingly brought up as high priorities for China’s longer-term direction. Further de-coupling f rom U.S. technology seems to be the story,” said Yeap Jun Rong, market strategist at IG in Singapore.

    Japan’s benchmark Nikkei 225 slipped 1.2% in afternoon trading to 26,775.79. Australia’s S&P/ASX 200 dipped 1.4% to 6,664.40. South Korea’s Kospi rebounded to gain 0.3% to 2,219.71. Hong Kong’s Hang Seng lost 0.2% to 16,561.97, while the Shanghai Composite rose 0.5% to 3,086.38. In Mumbai, the Sensex gained 0.5%.

    Clifford Bennett, Chief Economist at ACY Securities, noted the U.S. dollar will likely continue to rise as interest rates are pushed higher to counter inflation.

    “The outlook is grim. The economic horizon is dark,” he said of the American economy. “”The U.S. dollar will continue to strengthen for the moment, particularly against other Western currencies.”

    In currency trading, the euro cost 97.37 cents, up from 97.21 cents.

    The U.S. dollar rose to 148.74 Japanese yen from 148.63 yen. That’s a nearly 32-year low for the yen against the dollar.

    Japan’s industrial production for August showed moderate signs of improvement, the government said. Industrial production rose 3.4% from the previous month, and 5.8% from the previous year, according to Ministry of Economy, Trade and Industry data released Monday.

    Worries about inflation, though cooling in some parts of the economy around the world, remain overall. On Wall Street, stocks ended last week with a broad slide, wiping out earlier gains.

    A report showing U.S. consumers’ expectations for inflation was another signal the Federal Reserve may keep aggressively raising interest rates, although that strategy raises the risks of a recession.

    The S&P 500 fell 2.4% on Friday. The Dow Jones Industrial Average fell 1.3% and the Nasdaq composite ended 3.1% lower. Both indexes also turned lower after marching higher in early trading.

    The Russell 2000 gave up 2.7%

    The Fed has already raised its benchmark interest rate five times this year, with the last three increases by three-quarters of a percentage point. Wall Street expects another raise of three-quarters of a percentage point at its next meeting in November.

    Investors have also been focusing on the latest earnings reports.

    In energy trading, benchmark U.S. crude added 66 cents to $86.27 a barrel in electronic trading on the New York Mercantile Exchange. U.S. crude oil prices fell 3.9% on Friday. Brent crude, the international standard, added 78 cents to $92.41 a barrel.

    ———

    Yuri Kageyama is on Twitter https://twitter.com/yurikageyama

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  • Small businesses brace for cautious holiday shoppers

    Small businesses brace for cautious holiday shoppers

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    NEW YORK (AP) — Small businesses are stocking the shelves early this holiday season and waiting to see how many gifts inflation-weary shoppers feel like giving.

    Holiday shopping was relatively strong during the past two years as shoppers flocked online to spend, aided by pandemic stimulus dollars. Sales in November and December have been averaging roughly 20% of annual retail sales, according to National Retail Federation, making the holiday season critical for many retailers.

    This year, small businesses are bracing for a more muted season, as some Americans spend more cautiously. AlixPartners, the global consulting firm, forecasts that holiday sales will rise between 4% to 7%, far below last year’s growth of 16%. With inflation running above 8%, retailers would see a decrease in real sales.

    To prepare, owners say they’re ordering inventory earlier to avoid the supply-chain snags that frustrated them the past two holiday seasons and to draw in early birds. They’re stepping up discounts as much as they can in the face of their own higher costs. And owners also hope more people will shop in stores and holiday markets after doing more of their shopping online during the pandemic.

    Max Rhodes, CEO of Faire, an online marketplace used by small businesses to sell their wares wholesale as well as buy goods for retail shops, said he’s seeing earlier ordering from merchants who for two years had trouble getting enough holiday inventory stocked in time for Christmas. Stores faced shortages of everything from holiday décor to gift items as COVID-19 lockdowns forced factories to shut, costs rose and fewer shipping containers and truckers were available — all causing delivery snarls.

    A study for the Council of Supply Chain Management Professionals by global consulting firm Kearney found U.S. business logistics costs surged 22.4% in 2021 to $1.85 trillion.

    “There’s a bit of a hangover from that, a bit of fear,” Rhodes said. While it’s too early for sales data, the term “Christmas” was the most searched for term on the site in mid-September. That’s two weeks earlier than last year, and eight weeks earlier than 2020, Rhodes said.

    “The one thing we’re certain of is it’s not going to be predictable … We really don’t know what to expect and our retailers feel the same way,” Rhodes said .

    Mat Pond operates The Epicurean Trader in San Francisco, including four brick-and-mortar stores, an online shop and a corporate gift basket business. In past years, he started building inventory in November, but this year he’s already stocking up on items such as gourmet food, chocolate, wine and giftware. He’s seeing corporations order holiday gift baskets earlier as well.

    “Everyone’s planning ahead,” Pond said. “I think everybody’s learning from the past two years.”

    While the pandemic’s economic impact has subsided somewhat, consumers are now being tag-teamed by high inflation and rising interest rates. Overall, spending has held up, although some Americans have been forced to pull back on discretionary items. Any decline can be meaningful because consumer spending makes up 70% of economic activity.

    Hannah Nash, the owner of the online jeweler Lucy Nash, expects sales of her earrings, bracelets and other jewelry to slow after two years of strong growth. The main culprit: inflation.

    “There is less money going around to the average person and we expect their living expenses to impact how much they can spend on holiday shopping,” Nash said.

    Nash also expects more people to shop in stores during these holidays. She started her business, based in Indianapolis, during the pandemic, when online shopping boomed. The percentage of total retail sales done online jumped from 11.5% in 2019 to 17.7% in 2020, then rose again to 18.8% last year, according the Mastercard SpendingPulse, which tracks all kinds of payments, including those by cash and debit card.

    Nash is stepping up discounts and offering bundles to attract shoppers: Her plans include a 15% discount for new customers this year, up from 10%, starting in November. And she’ll offer bundles of products that are about 20% cheaper than buying items separately.

    Major retailers such as Amazon and Walmart are also offering holiday deals to cash-strapped Americans earlier this year. Amazon held a two-day discount event on Oct. 11-12 where the average order was $46.68, $13 less than what shoppers spent during the company’s Prime Day sales event in July, according to the data group Numerator.

    Some business owners are hoping to take advantage of any shift to shopping in holiday markets and in stores.

    Kimberly Behzadi operates Read It & Eat Box in Buffalo, N.Y., which sells themed boxes with food and a book in each box. She started the business in 2020, during the pandemic. She has an online shop but is hoping the return of holiday markets to full capacity will boost sales. She depends a lot on the holidays — 40% of her annual revenue comes between October and December.

    She’s planning on being at six markets this year, with two more applications pending.

    “Last year, holiday markets were still limited by the necessary safety protocols for Covid-19 ,” she said. “This year, gratefully, we are able to attend and sell at more holiday markets locally, so my expectation is to double my holiday revenue this year.”

    Behzadi also plans on being more promotional.

    “With inflation rates high this year I expect consumers to be looking for deals, so I have adapted my holiday strategy to include more bundles and deals,” she said. She’s offering a $60 box that’s bundled with a blind-date book worth $25 for Black Friday, for example.

    Mariana Leung-Weinstein sells alcohol infused jam and marshmallows and other farm-inspired gifts at about 25 stores via her Wicked Finch Farm brand in Pawling, N.Y. that she started in 2019. She’s focusing on stocking up in stores in case online sales slow.

    “I expect people will enjoy seeing and touching things in person this time around, which puts more of my focus in getting my products in physical stores in time for the holidays,” she said.

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  • A $1 trillion headache: China’s local fiscal shortfall poses broader growth risks

    A $1 trillion headache: China’s local fiscal shortfall poses broader growth risks

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    By any account, $1 trillion seems huge. That’s the scale of budget shortfalls facing Chinese provinces, reducing their fiscal firepower to fund infrastructure spending and tax cuts, and raising risks for the world’s second-biggest economy in 2023.

    The timing couldn’t be worse for policymakers in Beijing, as the economy wobbles under the weight of global recession risks, surging commodity costs, rising geopolitical tension and widespread COVID-19 lockdowns at home – spoiling the backdrop of a once-in-five-years congress of the ruling Communist Party that got underway on Sunday.

    Local governments have long been a pump-primer of China’s growth, but declining state land sales revenue in the wake of an ongoing crackdown on debt in the sector has severely eroded their financial power – a situation exacerbated this year by China’s feeble growth, weak tax income and crippling COVID restrictions. 

    Local governments must also make debt payments in coming months, portending more financial pain and limiting their ability to meet Beijing’s requests to boost spending. Already, many of them have resorted to cutting salaries, reducing headcounts, lowering subsidies and even imposing disproportionately hefty fines to meet budget shortfalls.

    In the first eight months, China’s 31 provincial-level regions reported a gap between general public revenue and expenditure totalling 6.74 trillion yuan ($948 billion). That’s the widest for the period since at least 2012, Reuters calculations from local government data in the past decade showed, with the populous provinces of Sichuan, Henan, Hunan and Guangdong suffering the largest shortfalls.

    In the same period, government land sales, counted separately, tumbled 28.5% year-on-year to 3.37 trillion yuan, adding urgency to the need to restore the financial health of indebted real estate firms. 

    “With the slower growth this year, we expect fiscal deficits for regional and local governments will remain substantial, reflecting the property slowdown and lingering effects of the coronavirus shock,” said Jennifer A. Wong, analyst at Moody’s, which expects 2022 economic growth to slow to 3.5% from 8.1% in 2021.

    In the past, shortfalls were largely offset by transfer payments from the central government and carryover funds from previous years, but analysts say cooling economic growth may limit any such help this time around.

    Policymakers will also be wary of picking up the fiscal slack with large-scale monetary stimulus as a wave of global interest rate hikes to rein in red-hot inflation has sent US bond yields soaring, widening the yield gap between U.S. and Chinese debt.

    DEBT STRESS

    Treasury bond quotas could be increased, so that some of them could be transferred to local governments to ease their fiscal stress, said Luo Zhiheng, chief macroeconomic analyst at Yuekai Securities.

    However, they face a squeeze on their already tight cash-flows as maturing local government debts peak in 2023 for the 2021-2025 period, Luo warned.

    Combined with some maturing debts of local government financing vehicles (LGFVs) – investment companies that build infrastructure projects – this year and the next will be most stressful for local governments, he said.

    Around 380 billion yuan of onshore LGFV bonds from economically weaker provinces are due for repayment in the next 12 months, according to a Moody’s report in August.

    Such fiscal constraints, together with weakening exports, doubts over a consumption revival and external uncertainties including the Ukraine war, would add pressure on policymakers to shore up the economy in 2023, said Nie Wen, a Shanghai-based economist at Hwabao Trust.

    Nie is forecasting GDP growth of 5.5% next year, assuming few or no COVID-19 disruptions, better than the broad 3.2%consensus for this year but still lagging the pre-pandemic 6.0% pace in 2019.

    ‘HEAVY BURDEN’

    Highlighting the pressure on finances, the provinces of Shandong, Shanxi, Henan, Zhejiang as well as the municipality of Tianjin said they had all shed budgeted headcounts at government agencies in recent months.

    Moreover, some grass-roots market regulators have even imposed excessively high fines on small businesses to boost revenue.

    According to financial media outlet Yicai, local governments’ revenue from fines and confiscations jumped 10.4% in January-July year-on-year.

    Additional spending on containing COVID outbreaks has also strained local government finances.

    The fiscal stress is cutting into some households’ income, a red flag for consumption and broader growth.

    “My annual income was slashed by 27% to around 80,000 yuan last year, due to the very heavy local fiscal burden,” an employee surnamed Gao at a government agency in Chongqing told Reuters.

    “Our leaders were very anxious these days as they said the current fiscal allocation is not enough at all. As there is no way out, they have had to ask the local government fiscal department for money.”

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  • Robust or vulnerable? Experts are split on Australia’s economic outlook

    Robust or vulnerable? Experts are split on Australia’s economic outlook

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    A customer looking at the price of limes at a fruit stand in Sydney. According to Australia’s Bureau of Statistics, Australia’s inflation rate rose to 6.1 in June, a 21-year high.

    Lisa Maree Williams | Getty Images News

    The Bank of Queensland said it’s “quite bullish” on Australia’s “very robust economy” — but not everyone agrees.

    “We’ve got a very robust economy, which I think when you look at the global challenges, the likelihood of us actually coming out of this in good shape is quite high,” George Frazis, CEO of Bank of Queensland, told CNBC on Wednesday.

    “The [Reserve Bank of Australia] has moved fairly quickly to deal with inflation … that’s why I think there’s a good chance that we’ll have a soft landing in Australia,” Frazis said.

    The RBA last week raised interest rates by 25 basis points to 2.6%, and cited the rising cost of living.

    As is the case in most countries, inflation in Australia is too high,” the Australian central bank said. “Global factors explain much of this high inflation, but strong domestic demand relative to the ability of the economy to meet that demand is also playing a role.”

    Frazis cited “very high household savings” and “very low unemployment” as driving forces for the robust economy, despite pressure on housing prices.

    “And this is on the backdrop where housing prices have actually increased by 39% over the last two years,” clarifying later that the figure referred to price increases in Australia between June 2019 to April this year.

    Figures from Corelogic, one of Australia’s leading property data providers, indicate that national Australian housing values increased by 28.6% in the past two years. Some capital cities experienced price rises of 39% and more.

    While the housing sector is highly vulnerable to higher interest rates, actual housing construction should remain solid for a while…

    Shane Oliver

    chief economist, AMP Capital

    The linchpin of whether the housing market gets disrupted or not, according to Frazis, lies with the unemployment numbers, which he said were at an “all-time low.”

    Australia’s unemployment rate stood at 3.5% in August, and household savings ratio fell to 8.7% in the March to June quarter.

    “Our view is that [unemployment] is likely to continue and that is the key driver of housing getting disrupted or not.”

    The bank’s CEO also expressed confidence that Australia is “well buttressed” against any kind of cataclysmic event within the housing market, citing homeowners were saving up and being ahead on repayments.

    However, he maintained that disruption in the Australian housing market is “unlikely” to materialize.

    No room for complacency

    We're quite bullish on the Australian economy, says Bank of Queensland

    “Debt-servicing challenges will become more widespread if economic conditions, particularly the level of unemployment, turn out to be worse than expected and housing prices fall sharply,” the report continued. 

    In addition, Assistant Treasurer Stephen Jones cautioned that Australia’s economy is not “hermetically sealed” from the forecasted downturn of the international economy, Sky news reported. 

    Jones added that the country’s major trading partners are in a “precarious” and deteriorating” situation, which is going to impact Australia.

    He also noted that as inflation rises, the economy slows around the world. This will in turn have an impact on Australia’s growth forecast.

    “We just cannot be complacent about those numbers,” he said.

    The International Monetary Policy Fund recently announced that one-third of the world is headed for a recession, which could include economic superpowers like China and the U.S.

    Slower growth, but no recession

    One economist suggested a modest outlook for Australia’s economy, and predicted the country’s growth will slow to around 2%, as opposed to falling into recession.

    High household debt in Australia could could hurt consumer spending, according to Shane Oliver, chief economist at AMP Capital. However, inflation and lower wage growth also meant that this risk is lower, he added.

    Australian dollar banknotes of various denominations are arranged for a photograph in Sydney, Australia, on Friday, Aug. 4, 2017. High household debt in Australia could risk compromising consumer spending, according to Shane Oliver, chief economist at AMP Capital. However, inflation and lower wage growth also meant that this risk is lower, he added.

    Brendon Thorne | Bloomberg | Getty Images

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  • Despite What the Experts Told You, This Was Never ‘Inflation’

    Despite What the Experts Told You, This Was Never ‘Inflation’

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    “Dell has too many computers, Nike is swimming in summer clothes. And Gap is flooded with basics like t-shirts and shorts.” So wrote Washington Post reporter Abha Bhattarai last week. Bhattarai perhaps didn’t know it, but he was revealing something to readers bigger than the headline of the article that read “Overstocked retailers make deep price cuts.”

    That there are “deep price cuts” at a time of rising prices is really a statement of the obvious. A rising price by definition signals a falling price elsewhere. To see why, imagine $100 sitting in your pocket. If you’re suddenly paying $50 for the same groceries that used to cost $35, you logically have fewer dollars for other goods and services.

    In the past year or so, the news has been the “inflation” that was allegedly caused by rising prices. Such reasoning reverses causation. To say that rising prices cause inflation is the same as saying collapsed houses and buildings cause hurricanes. Actually, what’s destroyed is an effect of the hurricane, not the instigator. Inflation is no different.

    Inflation is a decline in the monetary unit of measure. Rising prices can be an effect of inflation, but they’re certainly not the cause of same. To presume otherwise is tantamount to pointing to wet sidewalks as the cause of rain.

    Some reading this will reply that CPI and other price measures are up, thus inflation, but CPI is once again prices of goods. The basket used right now signals higher prices, but restock the basket with Dell computers, broadband access, Nike summer apparel, and Gap t-shirts and you have a different reading. Which is why “prices” are paradoxically such a lousy way of divining inflation.

    That’s the case because prices can move for all sorts of reasons. Imagine if tangerines are suddenly discovered as a surefire way of curing the common cold. If so, demand for the fruit would almost surely exceed supply on the way to soaring prices of tangerines. Conversely, imagine if plant-based meat is revealed to cause jaundice. One guesses demand for same will decline, in concert with falling prices.

    Or, just think about production overall. Businesses and entrepreneurs are endlessly in the market for capital in order to mass produce former luxuries. Henry Ford rather famously turned the automobile from an impossible-to-get luxury into a common good via assembly-line production advances. What was once costly was increasingly inexpensive. Deflation? Not at all. See above. Just as a rising price for one good implies a falling price elsewhere, so does a falling price for one market good imply rising prices for other goods.

    The simple truth is that prices on their own are how a market economy organizes itself, and they rise and fall for all sorts of reasons that have nothing to do with inflation. Inflation is once again a decline in the monetary unit of measure.

    Taking all of this into the present, this column has made a case from Day One that the “inflation” of the moment is not inflation. This is no revelation, or shouldn’t be. Inflation is yet again a decline in the monetary unit, but over the last two years the dollar has risen against the major foreign currencies, plus it’s risen against gold; the most objective measure of all. Gold generally doesn’t move in value as much as the currencies in which it’s priced move in value. The dollar price of gold has fallen in the past two years, which should have neo-inflationists wondering. Indeed, their contention is that we have a major inflation problem as the dollar is rising. Sorry, but that’s not inflation.

    What we have right now is rising and sometimes nosebleed prices for certain goods. That we do should be a statement of the obvious. To see why, consider Henry Ford’s genius yet again. He was miraculously able to make automobiles affordable by dividing up their production among hundreds and thousands of specialized workers.

    Please think of this with the last two years top of mind. As I point out in my new book The Money Confusion, every market good in the world is the result of remarkably sophisticated global cooperation among workers and machines. Yet this sophisticated global symmetry was eviscerated to varying degrees by lockdowns in 2020 and beyond. Economic activity divided up by billions of workers around the world was suddenly halted altogether, or limited in various ways. Workers once free to work, and businesses once free to operate, suddenly were not. That prices are higher in the aftermath of this hideous imposition of command-and-control is more than tautological.

    What’s important is that higher prices born of force are hardly inflation, plus as we know from Bhattarai, the higher prices have logically reduced demand elsewhere. Bhattarai reports that there’s presently a record of $732 billion in unsold inventory among U.S. companies. Yes, it makes sense. We can’t have everything.

    In short, this is not inflation. Don’t let it be called what it isn’t. To errantly refer to rising prices as inflation is to let politicians off the hook for their monumental errors in 2020 and beyond. Don’t let them off of the hook. “Dell has too many computers, Nike is swimming in summer clothes. And Gap is flooded with basics like t-shirts and shorts.” So wrote Washington Post reporter Abha Bhattarai last week. Bhattarai perhaps didn’t know it, but he was revealing something to readers bigger than the headline of the article that read “Overstocked retailers make deep price cuts.”

    That there are “deep price cuts” at a time of rising prices is really a statement of the obvious. A rising price by definition signals a falling price elsewhere. To see why, imagine $100 sitting in your pocket. If you’re suddenly paying $50 for the same groceries that used to cost $35, you logically have fewer dollars for other goods and services.

    In the past year or so, the news has been the “inflation” that was allegedly caused by rising prices. Such reasoning reverses causation. To say that rising prices cause inflation is the same as saying collapsed houses and buildings cause hurricanes. Actually, what’s destroyed is an effect of the hurricane, not the instigator. Inflation is no different.

    Inflation is a decline in the monetary unit of measure. Rising prices can be an effect of inflation, but they’re certainly not the cause of same. To presume otherwise is tantamount to pointing to wet sidewalks as the cause of rain.

    Some reading this will reply that CPI and other price measures are up, thus inflation, but CPI is once again prices of goods. The basket used right now signals higher prices, but restock the basket with Dell computers, broadband access, Nike summer apparel, and Gap t-shirts and you have a different reading. Which is why “prices” are paradoxically such a lousy way of divining inflation.

    That’s the case because prices can move for all sorts of reasons. Imagine if tangerines are suddenly discovered as a surefire way of curing the common cold. If so, demand for the fruit would almost surely exceed supply on the way to soaring prices of tangerines. Conversely, imagine if plant-based meat is revealed to cause jaundice. One guesses demand for same will decline, in concert with falling prices.

    Or, just think about production overall. Businesses and entrepreneurs are endlessly in the market for capital in order to mass produce former luxuries. Henry Ford rather famously turned the automobile from an impossible-to-get luxury into a common good via assembly-line production advances. What was once costly was increasingly inexpensive. Deflation? Not at all. See above. Just as a rising price for one good implies a falling price elsewhere, so does a falling price for one market good imply rising prices for other goods.

    The simple truth is that prices on their own are how a market economy organizes itself, and they rise and fall for all sorts of reasons that have nothing to do with inflation. Inflation is once again a decline in the monetary unit of measure.

    Taking all of this into the present, this column has made a case from Day One that the “inflation” of the moment is not inflation. This is no revelation, or shouldn’t be. Inflation is yet again a decline in the monetary unit, but over the last two years the dollar has risen against the major foreign currencies, plus it’s risen against gold; the most objective measure of all. Gold generally doesn’t move in value as much as the currencies in which it’s priced move in value. The dollar price of gold has fallen in the past two years, which should have neo-inflationists wondering. Indeed, their contention is that we have a major inflation problem as the dollar is rising. Sorry, but that’s not inflation.

    What we have right now is rising and sometimes nosebleed prices for certain goods. That we do should be a statement of the obvious. To see why, consider Henry Ford’s genius yet again. He was miraculously able to make automobiles affordable by dividing up their production among hundreds and thousands of specialized workers.

    Please think of this with the last two years top of mind. As I point out in my new book The Money Confusion, every market good in the world is the result of remarkably sophisticated global cooperation among workers and machines. Yet this sophisticated global symmetry was eviscerated to varying degrees by lockdowns in 2020 and beyond. Economic activity divided up by billions of workers around the world was suddenly halted altogether, or limited in various ways. Workers once free to work, and businesses once free to operate, suddenly were not. That prices are higher in the aftermath of this hideous imposition of command-and-control is more than tautological.

    What’s important is that higher prices born of force are hardly inflation, plus as we know from Bhattarai, the higher prices have logically reduced demand elsewhere. Bhattarai reports that there’s presently a record of $732 billion in unsold inventory among U.S. companies. Yes, it makes sense. We can’t have everything.

    In short, this is not inflation. Don’t let it be called what it isn’t. To errantly refer to rising prices as inflation is to let politicians off the hook for their monumental errors in 2020 and beyond. Don’t let them off of the hook.

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    John Tamny, Contributor

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  • White House economic adviser says US is ‘better positioned than most other countries’ to mitigate inflation | CNN Politics

    White House economic adviser says US is ‘better positioned than most other countries’ to mitigate inflation | CNN Politics

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    CNN
     — 

    White House economic adviser Cecilia Rouse on Sunday defended the limited progress the Biden administration has had on tamping down inflation, responding to comments from President Joe Biden last week that tried to put a positive spin on the high rate.

    “We’re starting to see signs that the actions they are taking is having an effect,” Rouse said of the Federal Reserve, which she said is focused on bringing down inflation.

    Rouse pointed to data from last month that employers are posting fewer job openings and the housing market is tapering off during an interview with CNN’s Dana Bash on “State of the Union.”

    “So we’re starting to see signs that our red-hot economy is starting to cool. And so we know that because of that strength … we’re better positioned than most other countries for the Fed to achieve its goals,” Rouse said.

    Data from the Bureau of Labor Statistics released earlier this week showed that annual inflation rose by 8.2% in September, a slower increase than the 8.3% rise seen in August. Economists had projected that the pace of price increases would slow to 8.1% last month, CNN reported last week. On a monthly basis, overall consumer prices increased by 0.4% from August.

    Asked by Bash about the high prices of food Americans are paying, Rouse pointed to the Inflation Reduction Act’s ability to lessen costs for Americans for prescription medicine – though she acknowledged it does nothing for food prices.

    But pushed on when it would start lowering inflation, Rouse said, “Many parts of the bill will start to take effect next year.”

    Rouse spoke about the energy tax credits in the law as having one of the most immediate tangible impact in lowering costs.

    “There are tax credits for energy to help people weatherize their homes and also bring down other forms of energy costs. So, we are focused on helping to make that transition to clean energy in a way that brings down energy costs for families,” Rouse said.

    “This is tough. There’s no question about it. This is a challenge,” she added about bringing down inflation generally.

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  • Joe Biden brands Liz Truss’ shelved tax-cut plan a ‘mistake’

    Joe Biden brands Liz Truss’ shelved tax-cut plan a ‘mistake’

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    U.S. President Joe Biden laid into beleaguered U.K. Prime Minister Liz Truss’ tax-cutting agenda Saturday, calling it a “mistake” and warning that a lack of “sound policy in other countries” could hold back the United States.

    Truss, just weeks into the job, is fighting for her political life after proposing — and then being forced to abandon — debt-funded tax reductions for Britain’s top earners and businesses that roiled the markets.

    The U.K. leader on Friday sacked her top finance minister, Kwasi Kwarteng, and junked a totemic commitment to reduce corporation tax.

    Speaking on a campaign stop in Oregon, Biden claimed it was “predictable” that Truss would have to row back on her agenda, which was also openly criticized by the International Monetary Fund.

    “I wasn’t the only one that thought it was a mistake,” the U.S. president said of Truss’ plans. “I think that the idea of cutting taxes on the super-wealthy at a time when […] I disagree with the policy, but that’s up to Great Britain.”

    With inflation expected to play a major part in the upcoming U.S. mid-term elections, Biden said the American economy remained “strong as hell,” but that he is “concerned about the rest of the world.”

    And he added: “The problem is the lack of economic growth and sound policy in other countries. It’s worldwide inflation, that’s consequential.”

    Biden’s swipe at the Truss agenda is an unusual move, given that presidents tend to avoid commenting on the domestic policy of allies.

    It came as Truss’ newly-appointed chancellor, Jeremy Hunt, signalled further fiscal U-turns could be on the cards.

    We have to be honest with people and we are going to have to take some very difficult decisions both on spending and on tax to get debt falling but the top of our minds when making these decisions will be how to protect and help struggling families, businesses and people,” Hunt said in a statement issued overnight.

    Truss and Hunt will on Sunday hold talks at the prime minister’s country retreat, Chequers, the BBC reported, ahead of a fresh economic plan due to be unveiled October 31.

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    Matt Honeycombe-Foster

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  • U.K. Prime Minister Liz Truss backpedals on tax cuts amid recession fears

    U.K. Prime Minister Liz Truss backpedals on tax cuts amid recession fears

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    U.K. Prime Minister Liz Truss backpedals on tax cuts amid recession fears – CBS News


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    Experts say public confidence in United Kingdom Prime Minister Liz Truss is steadily falling after she reversed course on her proposed tax reforms. Ian Lee has the latest.

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  • Biden makes late push across West aiming to deliver votes for Democrats

    Biden makes late push across West aiming to deliver votes for Democrats

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    President Joe Biden strode into the telephone bank at a crowded union hall and eagerly began making calls and eating doughnuts — one frosted, one glazed — to try and deliver votes for Democrats.

    “What a governor does matters,” the president said, giving a pep talk to volunteers who were making Friday night calls for gubernatorial hopeful Tina Kotek and other candidates. “It matters! It matters, it matters, it matters!”

    Before he left Portland on Saturday, the president planned to attend a reception for Kotek and speak about his administration’s efforts to bring down costs for Americans.

    It was the final stop on a four-day swing through Oregon, California and Colorado that has encapsulated Biden’s strategy for turning out voters on Election Day, Nov. 8: flex the levers of government to help boost candidates, promote an agenda aimed at strengthening an uncertain economy and haul in campaign cash.

    And this: show up for candidates when Mr. Biden can be helpful, but steer clear of places where a visit from a president with approval ratings under 50% may not be as welcome.

    Throughout the trip, Mr. Biden had to compete for the spotlight and contend with a troubling new inflation report and rising gas prices.

    In Oregon, Democratic officials hope that the president can help consolidate the party’s support behind Kotek. The party is in danger of losing the governor’s race in the traditional Democratic stronghold as Betsy Johnson — who has quit both the Democratic and Republican parties — has run a well-financed race against Kotek and the GOP nominee Christine Drazan.

    The settings throughout the president’s trip were tailor-made for him.

    In Los Angeles on Thursday, at a construction site for an extension on the city’s subway line, he spoke about his massive infrastructure law. Giant cranes rose up behind him as he stood before bulldozers and excavators. Many on hand were hard-hat workers in construction orange.

    The stop neatly combined many of the president’s agenda’s successes: investments in infrastructure, job creation, fighting climate change by promoting mass transit.

    “When you see these projects in your neighborhood — cranes going up, shovels in the ground, lives being changed — I want you to feel the way I do: pride,” Mr. Biden said. “Pride in what we can do when we do it together. This is what I mean when I say we’re building a better America.”

    But his remarks came as the government reported that consumer prices, excluding volatile food and energy costs, jumped 6.6% in September from a year ago — the fastest such pace in four decades. Mr. Biden acknowledged that people were being “squeezed by the cost of living. It’s been true for years, and folks don’t need a report to tell them they’re being squeezed.”

    President Biden Delivers Remarks In Southern California On Lowering Costs For American Families
    IRVINE, CALIFORNIA – OCTOBER 14: U.S. President Joe Biden (L) poses for photos after he delivered remarks on lowering costs for American families at Irvine Valley College in Orange County on October 14, 2022 in Irvine, California.

    Mario Tama / Getty Images


    Democratic candidates have been far more likely to appear with the president at official White House events underscoring their achievements than at overt campaign events. In California, Mr. Biden was joined by state lawmakers and the city’s mayor, and he called them out individually. Rep. Karen Bass, who is running for mayor of Los Angeles, made a takeout run with Mr. Biden to a taco shop.

    The president raised $5 million at a fundraiser in the Brentwood backyard of TV producer Marcy Carsey. Guests included fashion designer Tom Ford and actor-filmmaker Rob Reiner.

    In Colorado, the president designated the first national monument of his administration at Camp Hale, a World War II-era training site, with a group of Democrats by his side. His audience in a canyon of stunning views, tall pines and bright yellow aspens included Sen. Michael Bennet, who is facing a tough reelection campaign and had worked for the new monument. Democrats hope the designation, popular in the state, will boost Bennet’s numbers.

    Early voting is underway in California and begins next week in Oregon and Colorado. The president notably stayed away from states where his presence could hurt Democrats, so far skipping Nevada and Arizona, where Democratic senators are tough races.

    Democrats are trying to retain power in the face of widespread economic uncertainty and the traditional midterm headwinds against the party in power. Republicans, aiming to regain the House and Senate, think they can capitalize on gas prices, inflation and the economy.

    During his taco stop, Mr. Biden’s chicken quesadilla order ran to $16.45, but he handed the clerk $60 and asked him to use the change to pay the next patron’s bill.

    It was the kind of personal connection the president loves. But while the moment was unfolding, the headlines in Los Angeles focused on a bitter City Council clash over racist remarks, while in Washington, it was all about how the House voted to subpoena former President Donald Trump on his role in the Jan. 6 insurrection.

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  • 10/14: CBS News Weekender

    10/14: CBS News Weekender

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    10/14: CBS News Weekender – CBS News


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    Catherine Herridge has the latest on the battle over over a special master in the Mar-a-Lago probe, a federal judge’s ruling allowing DACA to continue with some restrictions, and the impact of inflation data for the month of September.

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  • Biden pushing lower prescription drug costs in midterm press

    Biden pushing lower prescription drug costs in midterm press

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    IRVINE, California — President Joe Biden is highlighting his administration’s efforts to lower prescription drug costs on Friday as part of his three-state Western tour this week, as he confronts a sobering inflation report in the waning weeks before midterm elections.

    Biden visited a community college in Irvine, California, to meet with older adults and tout his administration’s efforts to reduce inflation and drive down costs. The trip comes on the heels of an announcement that millions of Social Security recipients will get an 8.7% boost in their benefits in 2023, a historic increase but a gain that will be eaten up in part by the rising cost of everyday living.

    Biden said that still, seniors “are going to get ahead of inflation next year. For the first time in 10 years Social Security checks are going to go up while Medicare premiums go down.”

    “It’s a big deal for seniors,” he added.

    Despite the president’s efforts, inflation is rising, and Republicans are capitalizing on higher prices, seeing openings in California and elsewhere to potentially pick up U.S. House seats. The president will also travel to Oregon before heading back East as the usually Democratic-leaning governor’s race closes with an independent splitting votes.

    Consumer prices, excluding volatile food and energy costs, jumped 6.6% in September from a year ago — the fastest pace in four decades. And on a month-to-month basis, such “core” prices soared 0.6% for a second straight time, defying expectations for a slowdown and signaling that the Fed’s multiple rate hikes have yet to ease inflation pressures. Core prices typically provide a clearer picture of underlying price trends.

    Biden acknowledged the issue on Thursday, saying that “Americans are squeezed by the cost of living. It’s been true for years, and folks don’t need a report to tell them they’re being squeezed.”

    He also returned to a metaphor he used often during his first year in office, talking about issues that Americans talk about around the “kitchen table,” touting his administration’s efforts to lower costs even as inflation rises.

    “From prescription drugs, to health insurance, to energy bills, and so much more,” he said. “We’re standing up for working people and their right to get a raise and get a better job.”

    Biden also signed an executive order that will direct the U.S. Department of Health and Human Services to look for additional ways to lower drug costs.

    The Inflation Reduction Act signed into law earlier this year already requires that Medicare begin bargaining over the price of a handful of drugs starting next year. The agency is fine-tuning how that process will work, hiring new employees for a drug pricing division and is expected to pick the first 10 drugs that will be negotiated in 2023.

    The new law will lower drug costs for the 49 million people on Medicare in a number of other ways that have been less controversial. It makes vaccines free, caps monthly out-of-pocket insulin costs at $35, and limits out-of-pocket drug expenses at $2,000 starting in 2025.

    “We took on big pharma and we beat them, finally,” Biden said, but called on Congress to go even further to bring insulin prices down for all Americans, not just those on Medicare.

    “Imagine being a parent, imagine not having enough insurance, not being able to afford it, and looking at your son and daughter and know if they can’t get the insulin they could be permanently scarred” and die, Biden added.

    Any additional proposals to curb the cost of drug prices are likely to be met with resistance.

    That newly-acquired power to negotiate drug prices is controversial, with the powerful pharmaceutical industry lobbying against the rule and considering legal actions to prevent its implementation. Republicans have already proposed legislation that would strip Medicare’s negotiation ability before the haggling has even begun.

    Starting next year, drug companies will also have to pay penalties to Medicare if they raise the cost of their products at a rate that outpaces inflation.

    Biden also used the opportunity to provide a boost to Democratic Rep. Katie Porter, who is facing a close re-election fight this year. He praised the lawmaker as a “fighter,” adding that, “No drug company wants to testify in congress before Katie.”

    Biden added, “she is incredible at what she does.”

    ———

    Associated Press writers Zeke Miller and Amanda Seitz contributed to this report from Washington.

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  • 10/14: CBS News Mornings

    10/14: CBS News Mornings

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    10/14: CBS News Mornings – CBS News


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    Never-before-seen video from January 6 shows lawmakers in hiding, seeking help to stop the riot; California serial killer may also be connected to Chicago murders.

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  • U.S. inflation higher than expected in September

    U.S. inflation higher than expected in September

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    U.S. inflation higher than expected in September – CBS News


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    Inflation remains near a record high, and it shows no signs of slowing. The consumer price index for September was up 8.2% compared to a year ago. Nancy Cordes has the details.

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