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Tag: Inflation

  • Global stocks mixed ahead of US employment update

    Global stocks mixed ahead of US employment update

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    BEIJING — Global stock markets were mixed Friday ahead of U.S. employment data investors hope will show the economy is weakening and persuade the Federal Reserve to ease off plans for more interest rate hikes.

    London and Frankfurt opened higher. Tokyo and Hong Kong declined. Oil prices rose.

    The future for Wall Street’s S&P 500 index was unchanged after the market benchmark fell Thursday following a private sector report that said U.S. employers hired slightly more workers than forecast in September. That gives ammunition to Fed officials who say more rate hikes are needed to cool the economy and rein in inflation that is at a four-decade high.

    U.S. government data due out Friday are expected to show fewer people were hired compared with previous months. Investors hope that will help persuade the Fed five rate hikes this year are working and it can scale down plans for more.

    “What the market seems to be crying out for is a Fed pivot,” said Robert Carnell of ING in a report. “For its part, the Fed is sticking to its ‘higher for longer’ mantra.”

    In early trading, the FTSE 100 in London gained 0.1% to 7,007.32 and the DAX in Frankfurt added 0.1% to 12,487.27. The CAC 40 in Paris advanced 0.1% to 5,943.54.

    On Wall Street, the future for the Dow Jones Industrial Average was up 0.1%.

    On Thursday, the S&P 500 lost 0.2%. The index is up 4.4% for the week following its best two-day rally in 2 1/2 years. The Dow slid 1.1%. The Nasdaq composite gave up 0.7%.

    In Asia, the Nikkei 225 in Tokyo sank 0.7% to 27,116.11 and Hong Kong’s Hang Seng tumbled 1.5% to 17,740.05.

    The Kospi in Seoul shed 0.2% to 2,232.84 while Sydney’s S&P ASX 200 lost 0.8% to 6,762.80.

    India’s Sensex lost less than 0.1% to 58,213.21. New Zealand and Southeast Asian markets declined.

    The Fed and central banks around the world are focused on extinguishing inflation that is running at multi-decade highs, but investors worry the unusually large and rapid pace of their rate hikes might tip the global economy into recession.

    Strong U.S. hiring is positive for job hunters but a sign of enduring economic strength, which might make the Fed think more rate hikes are needed.

    U.S. government data showed the number of applications for unemployment benefits hit a four-month high last week. That suggests the job market might be cooling.

    Forecasters expect the government to report the economy added 250,000 jobs last month, well below the past year’s monthly average of 487,000 but still a strong number despite inflation and two straight quarters of U.S. economic contraction.

    In energy markets, benchmark U.S. crude gained 56 cents to $89.01 per barrel in electronic trading on the New York Mercantile Exchange. The contract advanced 69 cents on Thursday to $88.45. Brent crude, the price basis for trading international oils, advanced 45 cents to $94.87 per barrel in London. It rose $1.05 the previous session to $94.42.

    The dollar declined to 144.84 yen from Thursday’s 145.07 yen. The euro gained to 98.06 cents from 97.94 cents.

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  • IMF warns of higher recession risk and darker global outlook

    IMF warns of higher recession risk and darker global outlook

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    WASHINGTON (AP) — Two principal economists painted very different pictures Thursday of what the global economy will look like in the coming years.

    Kristalina Georgieva, managing director of the International Monetary Fund, told an audience at Georgetown University on Thursday that the IMF is once again lowering its projections for global economic growth in 2023, projecting world economic growth lower by $4 trillion through 2026.

    “Things are more likely to get worse before it gets better,” she said, adding that the Russian invasion of Ukraine that began in February has dramatically changed the IMF’s outlook on the economy. “The risks of recession are rising,” she said, calling the current economic environment a “period of historic fragility.”

    Meanwhile, U.S. Treasury Secretary Janet Yellen, on the other side of town at the Center for Global Development, focused on how the U.S. and its allies could contribute to making longer-term investments to the global economy.

    She called for ambitious policy solutions and didn’t use the word “recession” once. But despite Yellen’s more measured view, she said “the global economy faces significant uncertainty.”

    The war in Ukraine has driven up food and energy prices globally — in some places exponentially — with Russia, a key global energy and fertilizer supplier, sharply escalating the conflict and exposing the vulnerabilities to the global food and energy supply.

    Additionally, the ongoing COVID-19 pandemic, rising inflation and worsening climate conditions are also impacting world economies and exacerbating other crises, like high debt levels held by lower-income countries.

    Georgieva said the IMF estimates that countries making up one-third of the world economy will see at least two consecutive quarters of economic contraction this or next year and added that the institution downgraded its global growth projections already three times. It now expects 3.2% for 2022 and now 2.9% for 2023.

    The bleak IMF projections come as central banks around the world raise interest rates in hopes of taming rising inflation. The U.S. Federal Reserve has been the most aggressive in using interest rate hikes as an inflation-cooling tool, and central banks from Asia to England have begun to raise rates this week.

    Georgieva said “tightening monetary policy too much and too fast — and doing so in a synchronized manner across countries — could push many economies into prolonged recession.” Maurice Obstfeld, an economist at the University of California, Berkeley, recently wrote that too much tightening by the Federal Reserve could “drive the world economy into an unnecessarily harsh contraction.”

    Yellen agreed Thursday that “macroeconomic tightening in advanced countries can have international spillovers.”

    The two economists’ speeches come ahead of annual meetings next week of the 190-nation IMF and its sister-lending agency, the World Bank, which intend to address the multitude of risks to the global economy.

    Georgieva said the updated World Economic Outlook of the fund set to be released next week downgrades growth figures for next year.

    Many countries are already seeing major impacts of the invasion of Ukraine on their economies, and the IMF’s grim projections are in line with other forecasts for declines in growth.

    The Organization for Economic Cooperation and Development last week said the global economy is set to lose $2.8 trillion in output in 2023 because of the war.

    The projections come after the OPEC+ alliance of oil-exporting countries decided Wednesday to sharply cut production to support sagging oil prices in a move that could deal the struggling global economy another blow and raise politically sensitive pump prices for U.S. drivers just ahead of key national elections in November.

    Yellen said since many developing countries are facing all challenges simultaneously, from debt to hunger to exploding costs, “this is no time for us to retreat.”

    “We need ambition in updating our vision for development financing and delivery. And we need ambition in meeting our global challenges,” she said.

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  • US applications for jobless benefits increased last week

    US applications for jobless benefits increased last week

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    WASHINGTON (AP) — More Americans filed for unemployment benefits last week, the largest number in four months, but the labor market remains strong in the face of persistent inflation and a slowing overall U.S. economy.

    Jobless claims for the week ending Oct. 1 rose by 29,000 to 219,000, the Labor Department reported Thursday. The previous week’s number was revised down by 3,000 to 190,000.

    The four-week moving average inched up by 250 to 206,500.

    The total number of Americans collecting unemployment aid rose by 15,000 to 1.36 million for the week ending Sept. 24.

    Applications for jobless aid generally reflect layoffs, which have remained historically low since the initial purge of more than 20 million jobs at the start of the coronavirus pandemic in the spring of 2020.

    Recent employment data has indicated that the job market may be cooling slightly, an important consideration for the Federal Reserve when it meets early next month to decide whether or not to raise its main lending rate again.

    On Tuesday, the government reported that the number of available jobs in the U.S. plummeted in August compared with July as businesses grow less desperate for workers, a trend that could put a dent in chronically high inflation.

    Payroll processor ADP said Wednesday that businesses added 208,000 jobs in September, ahead of analysts’ estimates of 200,000, but below the 250,000 that Wall Street expects the government to report in September jobs data coming Friday. The ADP survey does not always mirror the government’s tally.

    The Federal Reserve is aiming to bring down inflation by rapidly raising its key interest rate, which is currently in a range of 3% to 3.25%. A little more than six months ago, that rate was near zero. The sharp rate hikes have pushed mortgage rates up to 15-year highs, and made other borrowing costlier. The Fed hopes that higher interest rates will slow borrowing and spending and push inflation closer to its traditional 2% target.

    Fed officials are increasingly warning that the unemployment rate will likely have to rise as part of their fight against rising prices. If it remains at or near its current 3.7%, most economists believe it would likely mean more rate hikes from the Fed.

    Last week, the government reported that the U.S. economy shrank for the second straight quarter, but so far, that has done little to cool the job market, part of the Fed’s inflation-fighting strategy.

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  • EXPLAINER: How will OPEC+ cuts affect gas prices, inflation?

    EXPLAINER: How will OPEC+ cuts affect gas prices, inflation?

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    FRANKFURT, Germany (AP) — Major oil-producing countries led by Saudi Arabia and Russia have decided to slash the amount of oil they deliver to the global economy.

    And the law of supply and demand suggests that can only mean one thing: higher prices are on the way for crude, and for the diesel fuel, gasoline and heating oil that are produced from oil.

    The decision by the OPEC+ alliance to cut 2 million barrels a day starting next month comes as the Western allies are trying to cap the oil money flowing into Moscow’s war chest after it invaded Ukraine.

    Here is what to know about the OPEC+ decision and what it could mean for the economy and the oil price cap:

    WHY IS OPEC+ CUTTING PRODUCTION?

    Saudi Arabia’s Energy Minister Abdulaziz bin Salman says that the alliance is being proactive in adjusting supply ahead of a possible downturn in demand because a slowing global economy needs less fuel for travel and industry.

    “We are going through a period of diverse uncertainties which could come our way, it’s a brewing cloud,” he said, and OPEC+ sought to remain “ahead of the curve.” He described the group’s role as “a moderating force, to bring about stability.”

    Oil prices had fallen after a summer of highs. Now, after the OPEC+ decision, they are heading for their biggest weekly gain since March. Benchmark U.S. crude rose 3.2% on Friday, to $91.31 per barrel. Brent crude, the international standard, rose 2.8% to $97.09, though it’s still down 20% from mid-June, when it traded at over $123 per barrel.

    One big reason for the slide is fears that large parts of the global economy are slipping into recession as high energy prices — for oil, natural gas and electricity — drive inflation and rob consumers of spending power.

    Another reason: The summer highs came about because of fears that much of Russia’s oil production would be lost to the market over the war in Ukraine.

    As Western traders shunned Russian oil even without sanctions, customers in India and China bought those barrels at a steep discount, so the hit to supply wasn’t as bad as expected.

    Oil producers are wary of a sudden collapse in prices if the global economy goes downhill faster than expected. That’s what happened during the COVID-19 pandemic in 2020 and during the global financial crisis in 2008-2009.

    HOW IS THE WEST TARGETING RUSSIAN OIL?

    The U.S. and Britain imposed bans that were mostly symbolic because neither country imported much Russia oil. The White House held off pressing the European Union for an import ban because EU countries got a quarter of their oil from Russia.

    In the end, the 27-nation bloc decided to cut off Russian oil that comes by ship on Dec. 5, while keeping a small amount of pipeline supplies that some Eastern European countries rely on.

    Beyond that, the U.S. and other Group of Seven major democracies are working out the details on a price cap on Russian oil. It would target insurers and other service providers that facilitate oil shipments from Russia to other countries. The EU approved a measure along those lines this week.

    Many of those providers are based in Europe and would be barred from dealing with Russian oil if the price is above the cap.

    HOW WILL OIL CUTS, PRICE CAPS AND EMBARGOES CLASH?

    The idea behind the price cap is to keep Russian oil flowing to the global market, just at lower prices. Russia, however, has threatened to simply stop deliveries to a country or companies that observe the cap. That could take more Russian oil off the market and push prices higher.

    That could push costs at the pump higher, too.

    U.S. gasoline prices that soared to record highs of $5.02 a gallon in mid-June had been falling recently, but they have been on the rise again, posing political problems for President Joe Biden a month before midterm elections.

    Biden, facing inflation at near 40-year highs, had touted the falling pump prices. Over the past week, the national average price for a gallon rose 9 cents, to $3.87. That’s 65 cents more than Americans were paying a year ago.

    “It’s a disappointment, and we’re looking at what alternatives we may have,” he told reporters about the OPEC+ decision.

    WILL THE OPEC PRODUCTION CUT MAKE INFLATION WORSE?

    Likely yes. Brent crude should reach $100 per barrel by December, says Jorge Leon, senior vice president at Rystad Energy. That is up from an earlier prediction of $89.

    Part of the 2 million-barrel-per-day cut is only on paper as some OPEC+ countries aren’t able to produce their quota. So the group can deliver only about 1.2 million barrels a day in actual cuts.

    That’s still going to have a “significant” effect on prices, Leon said.

    “Higher oil prices will inevitably add to the inflation headache that global central banks are fighting, and higher oil prices will factor into the calculus of further increasing interest rates to cool down the economy,” he wrote in a note.

    That would exacerbate an energy crisis in Europe largely tied to Russian cutbacks of natural gas supplies used for heating, electricity and in factories and would send gasoline prices up worldwide. As that fuels inflation, people have less money to spend on other things like food and rent.

    Other factors also could affect oil prices, including the depth of any possible recession in the U.S. or Europe and the duration of China’s COVID-19 restrictions, which have sapped demand for fuel.

    WHAT WILL THIS MEAN FOR RUSSIA?

    Analysts say that Russia, the biggest producer among the non-OPEC members in the alliance, would benefit from higher oil prices ahead of a price cap. If Russia has to sell oil at a discount, at least the reduction starts at a higher price level.

    High oil prices earlier this year offset much of Russia’s sales lost from Western buyers avoiding its supply. The country also has managed to reroute some two-thirds of its typical Western sales to customers in places like India.

    But then Moscow saw its take from oil slip from $21 billion in June to $19 billion in July to $17.7 billion in August as prices and sales volumes fell, according to the International Energy Agency. A third of Russia’s state budget comes from oil and gas revenue, so the price caps would further erode a key source of revenue.

    Meanwhile, the rest of Russia’s economy is shrinking due to sanctions and the withdrawal of foreign businesses and investors.

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  • Europe hails united stand over Russia’s war in Ukraine

    Europe hails united stand over Russia’s war in Ukraine

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    PRAGUE (AP) — Leaders across Europe hailed on Thursday their united front against Russia’s war on Ukraine at a summit that also saw the heads of old foes Turkey and Armenia meet face-to-face for the first time since they agreed last year to put decades of bitterness behind them.

    The inaugural summit of the European Political Community brought together the 27 European Union member countries, aspiring partners in the Balkans and Eastern Europe, as well as neighbors like Britain — the only country to have left the EU.

    Russia was the one major European power not invited to the gathering at Prague Castle along with Belarus, its neighbor and supporter in the war against Ukraine; a conflict fueling an energy crisis and high inflation that are wreaking havoc on Europe’s economies.

    “Leaders leave this summit with greater collective resolve to stand up to Russian aggression. What we have seen in Prague is a forceful show of solidarity with Ukraine, and for the principles of freedom and democracy,” said U.K. Prime Minister Liz Truss.

    Her Belgian counterpart, Alexander De Croo, said “if you just look at the attendance here, you see the importance. The whole European continent is here, except two countries: Belarus and Russia. So it shows how isolated those two countries are.”

    Latvian Prime Minister Krisjanis Karins said the fallout from the war is something they all have in common.

    “It’s affecting all of us in the security sense, and its affecting all of us through our economies, through the rising energy costs. So the only way that we can handle this is working together, and not just the European Union. All the European countries need to work together,” he said.

    Ukrainian Prime Minister Denys Shmyhal was in Prague for the meeting, while Ukrainian President Volodymyr Zelenskyy addressed the leaders by video link.

    “There are no representatives of Russia with us here — a state that geographically seems to belong to Europe, but from the point of view of its values and behavior is the most anti-European state in the world,” Zelenskyy said.

    “We are now in a strong position to direct all possible powers of Europe to end the war and guarantee long-term peace,” he said. “For Ukraine, for Europe, for the world.”

    The new forum is the brainchild of French President Emmanuel Macron and is backed by German Chancellor Olaf Scholz. They say it should aim to boost security and prosperity across the continent.

    Critics claim the new forum is an attempt to put the brakes on EU enlargement. Others fear it may become a talking shop, perhaps convening once or twice a year but devoid of any real clout or content.

    “We will never accept (a situation) where this platform brings harm to our accession negotiations,” Turkish President Recep Tayyip Erdogan told reporters. “Our expectation is for the European Political Community to help strengthen and contribute to our relations with the EU.”

    But the host of the event, Czech Prime Minister Petr Fiala, said it had been a success.

    “We don’t replace existing formats of cooperation. We did not adopt any official resolution. We just feel the need of having space for informal exchange of views on ongoing events in Europe and beyond,” Fiala told reporters. He said the next meeting will be held in Moldova, then others in Spain and the U.K.

    The summit did create space for a series of meetings. Erdogan and Armenian Prime Minister Nikol Pashinyan held landmark talks. Azerbaijani President Ilham Aliyev was also present at what appeared to be an informal gathering of the three leaders.

    Turkey and Armenia, which have no diplomatic relations, agreed last year to start talks aimed at putting decades of enmity behind them and reopen their joint border. Special envoys appointed by the two countries have held four rounds of talks since then.

    Truss, Macron and Dutch Prime Minister Mark Rutte held talks on migration, as the U.K. seeks further help in preventing migrants from reaching its shores without authorization. Macron was even cautiously optimistic that the EU and the U.K. might be able to be put their Brexit differences behind them.

    “I do hope this is a new phase of our common relations and that this is the beginning of the day after,” he told reporters.

    Macron listed topics on which leaders agreed to work by the next summit in Moldova, including protecting “key facilities” like pipelines, undersea cables, satellites. “We need a European strategy to protect them,” he said, after two gas pipelines in the Baltic Sea were apparently sabotaged.

    But some old enmities also found a new forum to air themselves in. Referring to Greek Prime Minister Kyriakos Mitsotakis, Erdogan said that “a certain gentleman became very disturbed” by his remarks in one meeting. Erdogan was also critical of the Greek leadership in Cyprus.

    ___

    Suzan Fraser in Ankara and Frank Jordans in Berlin contributed to this report.

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  • Fed’s Cook says more rate hikes needed to combat inflation

    Fed’s Cook says more rate hikes needed to combat inflation

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    WASHINGTON (AP) — More interest rate increases will be necessary to wrestle inflation under control, Federal Reserve Governor Lisa Cook said Thursday, echoing several tough speeches by other central bank officials this week.

    Cook said she has revised her views on inflation in the past several months and now sees it as more persistent. And while real-time, private-sector data is showing signs that inflation could cool in the coming months, the Fed should only slow rate hikes when inflation actually falls, she said.

    “With inflation running well above our 2% longer-run goal, restoring price stability likely will require ongoing rate hikes, and then keeping policy restrictive for some time until we are confident that inflation is firmly on the path” back to 2%, she said at the Peterson Institute for International Economics.

    Cook’s speech, her first as Fed governor, comes after hawkish comments earlier Thursday by Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, and Raphael Bostic, president of the Atlanta Fed, on Wednesday. “Hawks” in Fed-speak typically support higher interest rates to quell inflation, while “doves” are often more focused on keeping rates low to support more hiring.

    Their remarks ran counter to speculation among many Wall Street that the Fed may soon slow the pace of its rate increases or even cut rates next year, as the U.S. and world economies struggle with higher energy costs and the threat of recession. The Fed is increasing its benchmark short-term rate at the fastest pace in four decades, causing the U.S. dollar to strengthen sharply against other major currencies. A stronger dollar typically draws more capital to the U.S., disrupting overseas economies.

    Yet the comments by Cook, Kashkari, and Bostic suggest the Fed is unlikely to slow its campaign against inflation anytime soon. Fed officials have pushed up their short-term rate by a hefty three-quarters of a percentage point three times in a row, bringing it to a range of 3% to 3.25%, the highest in 14 years.

    Fed officials projected last month that they would push rates to roughly 4.4% by the end of this year, and 4.6% by early 2023.

    Earlier Thursday, Kashkari acknowledged that because the Fed’s rate hikes take time to work their way through the economy — as long as 12 to 18 months — there is a risk the central bank could raise borrowing costs too high and unnecessarily cause a recession. For that reason, some economists have said the Fed should pause its increases soon and take time to evaluate the impact of its moves on the U.S. and global economies.

    But Kashkari, who has shifted from one of the most dovish officials to among the most hawkish, said he was more worried about stopping the rate hikes too soon.

    He also said that he, like other Fed officials, had mistakenly thought last year that inflation was temporary and mostly due to supply chain shocks and shortages, only to see inflation persist.

    “Until I see some evidence that underlying inflation has solidly peaked and is hopefully headed back down, I’m not ready to declare a pause,” he said at a conference sponsored by the Bremer Financial Corp. “I think we’re quite a ways away from a pause.”

    Bostic also delivered hawkish remarks late Wednesday that sought to downplay any chance of rate hikes next year.

    “You no doubt are aware of considerable speculation already that the Fed could begin lowering rates in 2023 if economic activity slows and the rate of inflation starts to fall,” Bostic said in a speech at Northwestern University Wednesday.

    “I would say: not so fast,” Bostic concluded. “We are still decidedly in the inflationary woods, not out of them.”

    In her remarks, Cook said the Fed is aware of slowing growth overseas, which will likely slow U.S. exports.

    But she added that the Fed’s goals of stabilizing prices and seeking maximum employment “is a domestic mandate.”

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  • Gas prices rise as OPEC announces oil production cut

    Gas prices rise as OPEC announces oil production cut

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    Gas prices rise as OPEC announces oil production cut – CBS News


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    It now costs nearly $100 to fill up a mid-size car with gas in California. Though gas prices are rising amid the decision by OPEC+ to cut 2 million barrels of oil per day, California prices have little to do with it. Jonathan Vigliotti takes a look.

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  • What New Entrepreneurs Should Know Amid Rising Inflation

    What New Entrepreneurs Should Know Amid Rising Inflation

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    Opinions expressed by Entrepreneur contributors are their own.

    Setting up a new enterprise can be both exciting and daunting. You’ll have a lot to think about, but one thing you may not have considered is the impact of inflation on your new enterprise. Open up any newspaper or watch any news report. The higher inflation rates are likely to be a talking point.

    How should new entrepreneurs navigate their new business amid rising interest rates? Here are eight things you need to know:

    1. Increased Prices

    The first way inflation can impact new entrepreneurs is the increased prices in the marketplace. If you are a producer, you may need to budget for the higher cost of raw materials. You need to consider what you need to buy to make your items and look at the price of each component. With higher inflation rates, you could be paying 5% to 8% more for your raw materials, which you will need to factor into your pricing and business plan.

    Even if you are not producing a physical product and instead offer services, your enterprise is not immune to the increased prices. You’ll need to consider the additional cost of heating, lighting, gas, and all the other essentials for your workplace.

    Related: 3 Strategies To Protect Your Business From Inflation

    2. Labor costs

    Higher inflation will also impact wages. With the cost of living increasing, workers are more likely to demand higher wages to compensate for the disparity. If your enterprise employs a team or outsourcing any aspect of your business, you will need to look at your labor costs. If you cannot pay higher wages, you will need to anticipate staff attrition or pilfering, as found this study, which will impact your bottom line.

    Another aspect of labor costs is the risk of a drop in employee productivity. If you’ve already agreed on rates for your team or freelancers, there is a chance that they will feel less motivated if you cannot increase their wages. This means that even if you keep your labor costs to the same level as your original business plan, you could suffer efficiency issues and produce fewer products, reducing your income/expenditure balance.

    3. Currency fluctuations

    Even if your enterprise is not a massive importer or exporter, it could still be hit by currency fluctuations. If you purchase raw materials or goods overseas or have overseas freelancers paid in local currency, you will likely find that your dollars don’t stretch as far. While you may have agreed on a rate with a weaker currency, you’ll be paying more. You will need to account for these increases in your enterprise cost analysis.

    Related: Inflation Is a Different Beast for Entrepreneurs. Here’s How to Protect Yourself.

    4. Borrowing limitations

    Borrowing is also subject to the whims of inflation. Many lenders are aware of the increased risks within the market and will increase their rates. Additionally, the Federal Reserve uses interest rates to curb rising inflation. The Fed typically increases the base interest rate to address higher inflation rates and return them to optimal levels. Unfortunately, this rate increase is passed on to personal and business customers.

    If you need to borrow funds for your enterprise, you may find that loans are cost prohibitive. Additionally, lenders may be more hesitant to offer loans to new businesses, so you may struggle to qualify with a limited financial track record.

    If you already have a business loan for your enterprise and it is not on a fixed-rate deal, you will need to factor the higher interest costs into your expenses. Variable rate loans are subject to rate changes, so you are likely to have your lender contact you to let you know your new rate and when it will apply. This makes it very difficult to budget for your typical monthly expenses as your loan repayments could be higher from one month to the next.

    5. Tips to lessen the impact of inflation on your enterprise

    Fortunately, there are some things that you can do to lessen the impact of inflation on your new enterprise:

    6. Reallocate your business capital

    While having cash on hand is a good thing to address any issues that arise with your enterprise, when inflation rates are high, having lots of cash sitting around is not a good idea. The buying power of the dollar is reduced when inflation is high. Let’s say you had $10,000 last year that could buy X number of products. The following year, the same $10,000 would only cover the cost of fewer items.

    This means you’ll need to think carefully about what to do with your business cash. If you don’t want to tie up your funds, as you may need access to them, consider a high-yield savings account or short-term bond. While this may not be as inflation-proof as the stock market or real estate, you won’t sacrifice liquidity.

    7. Negotiate in the dollar

    If you are outsourcing to freelancers or workers outside of the U.S., make sure that you negotiate rates in the dollar. Regardless of currency fluctuations, you will still be paying the same amount. This will eliminate some of the uncertainty, and it will allow you to budget for your costs.

    8. Evaluate your expenses

    Finally, evaluating your enterprise expenses is one of the most effective strategies to lessen the impact of higher inflation. Have a serious look at all your costs and operating expenses. There may be areas where you can make savings, so you can create a buffer to compensate for any increased costs.

    It may be worth reassessing where and how you source raw materials. It may be able to find a better deal or set up a fixed-rate contract to protect against increased costs soon.

    Related: 6 Ways to Protect Your Small Business From Inflation Pressure

    While higher inflation is daunting, being prepared is the best possible defense against the potential rising costs. With a proactive approach, you can address the potential implications of higher inflation. This will allow you to continue your enterprise with minimal disruption and allow you to weather possible financial storms to succeed with your operation.

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    Baruch Mann (Silvermann)

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  • Mortgage rates take a breather after rising for several weeks in a row | CNN Business

    Mortgage rates take a breather after rising for several weeks in a row | CNN Business

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    After rising for six weeks in a row, mortgage rates retreated last week.

    The 30-year fixed-rate mortgage averaged 6.66% in the week ending October 5, down from 6.70% the week before, according to Freddie Mac.

    Mortgage rates have more than doubled since the start of this year as the Federal Reserve continues its unprecedented campaign of hiking interest rates in order to tame soaring inflation. But uncertainty about the possibility of a recession and the impact of rate hikes on the economy have made mortgage rates more volatile.

    “Mortgage rates decreased slightly this week due to ongoing economic uncertainty,” said Sam Khater, Freddie Mac’s chief economist. “However, rates remain quite high compared to just one year ago, meaning housing continues to be more expensive for potential homebuyers.”

    The average mortgage rate is based on a survey of conventional home purchase loans for borrowers who put 20% down and have excellent credit, according to Freddie Mac. But many buyers who put down less money upfront or have less than perfect credit will pay more.

    Investors and analysts have been scrutinizing each piece of economic data, searching for clues about the Fed’s next steps and the future of the US and global economies, said Danielle Hale, Realtor.com’s chief economist.

    The Fed does not set the interest rates borrowers pay on mortgages directly, but its actions influence them. Mortgage rates tend to track the yield on 10-year US Treasury bonds. As investors see or anticipate rate hikes, they often sell government bonds, which sends yields higher and mortgage rates rise.

    Over the past month, yields on 10-year Treasuries soared from 3.25% to nearly 4% before falling back around 3.75% this week.

    Hale likened investors’ actions to a driver navigating a road in dense fog, prone to over-correcting at each turn.

    “Signs that we are closer to the end of the tightening cycle – such as a surprisingly steep decline in job openings – tend to cause rates to slip, while rates bounce higher on signals like robust activity in the services sector,” Hale said.

    Even though rates dipped slightly this week, the average interest rate for a 30-year, fixed-rate loan is still more than double what it was at this time last year.

    A year ago, a buyer who put 20% down on a $390,000 home and financed the rest with a 30-year, fixed-rate mortgage at an average interest rate of 2.99% had a monthly mortgage payment of $1,314, according to calculations from Freddie Mac.

    Today, a homeowner buying the same-priced house with an average rate of 6.66% would pay $2,005 a month in principal and interest. That’s $691 more each month.

    As rates have been rising over the last several weeks, fewer people have been applying for mortgages said Bob Broeksmit, president and CEO of the Mortgage Bankers Association.

    Ongoing economic uncertainty together with Hurricane Ian’s devastation in Florida resulted in a 14% decline in mortgage applications last week from the week before, he said.

    MBA also found that an increasing number of borrowers are applying for adjustable rate mortgages, or ARMs. Applications for ARMs climbed to nearly 12% of all applications last week.

    The average rate for the ARM tracked by Freddie Mac (a 5-year Treasury-indexed hybrid ARM) was 5.36%, more than a percentage point lower than the 30-year fixed rate.

    “While rate increases are needed to tame inflation and alleviate the burden it places on household budgets, higher borrowing costs have caused consumers to think twice about major purchases like homes and cars,” said Hale.

    With more prospective buyers sitting on the sidelines, those still looking to buy have a little more breathing room.

    Correction: “Today’s home shoppers have more choices, but for many, the increased cost of financing and higher home prices mean fewer affordable options,” Hale said. “As challenging as it may be to set and stick to a budget in this environment of rising prices and rates, it’s more important than ever to do so.”
    A previous version of this story misstated the number of weeks mortgage rates have been rising. Rates rose for six consecutive weeks before falling this week.

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  • IMF warns of higher recession risk and darker global outlook

    IMF warns of higher recession risk and darker global outlook

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    WASHINGTON — The International Monetary Fund is once again lowering its projections for global economic growth in 2023, projecting world economic growth lower by $4 trillion through 2026.

    Kristalina Georgieva, managing director of the IMF, told an audience at Georgetown University on Thursday that “things are more likely to get worse before it gets better,” saying the Russian invasion of Ukraine that began in February has dramatically changed the IMF’s outlook on the economy.

    The ongoing COVID-19 pandemic, rising inflation and worsening climate conditions are also impacting world economies, exacerbating other crises, like food insecurity and high debt levels held by lower-income countries.

    “The risks of recession are rising,” she said, adding that the IMF estimates that countries making up one-third of the world economy will see at least two consecutive quarters of economic contraction this or next year.

    Georgieva said the institution downgraded its global growth projections already three times. It now expects 3.2% for 2022 and now 2.9% for 2023.

    The bleak projections come as central banks around the world raise interest rates in hopes of taming rising inflation. The U.S. Federal Reserve has been the most aggressive in using interest rate hikes as an inflation-cooling tool, though central banks from Asia to England have begun to raise rates this week.

    Georgieva said “tightening monetary policy too much and too fast — and doing so in a synchronized manner across countries — could push many economies into prolonged recession.”

    Many countries are already seeing major impacts of the invasion of Ukraine on their economies, and the IMF’s grim projections are in line with other forecasts for declines in growth.

    The Organization for Economic Cooperation and Development last week said the global economy is set to lose $2.8 trillion in output in 2023 because of the war.

    The projections come after the OPEC+ alliance of oil-exporting countries decided Wednesday to sharply cut production to support sagging oil prices in a move that could deal the struggling global economy another blow and raise politically sensitive pump prices for U.S. drivers just ahead of key national elections in November.

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  • Bobbing for apples: Inflation, labor shortages could put future of U.S. orchards in jeopardy

    Bobbing for apples: Inflation, labor shortages could put future of U.S. orchards in jeopardy

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    Apples are the center of many autumn traditions, like trips to the orchard or the farmers’ market and making pies. But for the people who grow them, and those of us who love the fall fruit, this year’s harvest comes with a unique set of challenges, including inflation and labor shortages.

    Barron Shaw runs a family farm and apple orchard in York County, Pennsylvania, which got its start in 1841. He told CBS News that he’s facing challenges unlike anything he’s seen before.

    “Inflation makes it very stressful,” he said. “I mean the fuel prices, the energy costs, the electricity prices … all of it is going up.”

    Inflation is squeezing industries of all sorts, but the apple industry is seeing a perfect storm down the supply chain that is hitting growers hard.

    An Apple Harvest As Production Forecast To Increase
    Gala apples on a tree at an orchard in Britton, Michigan, U.S., on Monday, Sept. 13, 2021.

    Emily Elconin/Blooomberg


    “You don’t go into this business unless you’ve got a lot of faith; a lot of faith in God, a lot of faith in the family members around you,” Shaw said. “You know, that’s what keeps me going.”

    Unlike other items in the produce aisle that benefit from automated farming practices, apples are picked by hand and require intensive and specialized labor to harvest.

    Shaw said his orchard just cannot find domestic workers for the intensely physical job. The industry relies heavily on international migrant workers using H-2A visas, whose wages are set by the federal government and vary state by state.

    Shaw saw the wage for H-2A workers increase 10% from last year, up to $15.78 an hour. Across the U.S., H-2A wages have been going up 5-10% a year.

    “We just have to pay what the government tells us,” he said. “Completely out of our control.”

    The U.S. Apple Industry Association estimates total labor costs have spiked 30% this year. Apples, on average, also cost 6% more this year.

    An Apple Harvest As Production Forecast To Increase
    An worker picks Gala apples from a tree at an orchard in Britton, Michigan, U.S., on Monday, Sept. 13, 2021.

    Emily Elconin/Blooomberg


    Most apple farmers said they aren’t seeing more money in their pockets, though, despite the cost increase.

    In Montgomery County, Maryland, public schools won’t be able to serve a fresh seasonal apple for lunch for the first year ever. County officials said local apples cost three times as much this fall, and they’ll have to stick with cheaper, prepackaged slices instead.

    To weather the economic storm, farmers like Shaw are trying to entice people to buy from the orchard itself — cutting out the middlemen.

    The orchards can offer you a lower price and get a bigger profit if you pick apples directly off the trees than off a grocery store shelf.

    Shaw said for some orchards, that could be the tipping point.

    “These businesses really are not sustainable unless they’re profitable, and because there’s no reason for the next generation to do this if they can’t make a living, can’t make a retirement doing it,” he said. (double-check quote)

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  • Lettuce at $8? Inflation in Australia is hurting everyone from restaurant owners to diners

    Lettuce at $8? Inflation in Australia is hurting everyone from restaurant owners to diners

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    The restaurant scene such as the one in Chinatown should brace for change amid rising inflation.

    Anadolu Agency | Anadolu Agency | Getty Images

    SYDNEY — In Sydney’s food mecca, Chinatown, menu prices at long-time restaurant Mother Chu’s have risen between 20% and 30% since the start of the pandemic. 

    Alan Chu, owner of the Taiwanese eatery, said price increases in lettuce and most vegetables, as well as other food ingredients in Australia, have driven up prices at his restaurant — known for serving affordable meals for roughly under $30 Australian dollars, or about $20, a dish.

    “There’s been a very large increase in the price of vegetables, for example even a small cabbage or lettuce can go up to A$10 to A$12 dollars which is unheard of,” Chu said. 

    “One of the most difficult things many businesses are facing as a result of inflation is also the cost of wages. This is also in part due to Covid and as businesses have to balance this, as well as the rise of ingredients, it’s really difficult for them to keep on going.”

    Food prices soar

    People are hesitant to spend more, everyone’s tightening their belts, being more selective with the things that they buy.

    Prices of dumplings and other tasty Shanghainese fare at well-known Australian restaurant, Taste of Shanghai, have also gone up between 6% and 8% since the start of the year.

    Owner Jennifer Du said she had to balance staying ahead of inflation and not raising prices too quickly for fear of alienating customers.

    The east coast floods this year exacerbated price increases pushing up the price of a head of lettuce to A$12 a head.

    Pool | Getty Images News | Getty Images

    “I don’t want to reduce food sizes and plates for example .. sure, we need to raise prices, but we need to raise it slowly,” she said. 

    For Du, the rise in prices of vegetables and raw ingredients — including those that are imported — has been particularly sharp this year. 

    “Prices shot up at the end of lockdowns and coupled with the floods, goods like vegetables and fresh foods have become very expensive,” Du said. 

    Spending habits change

    Businessman Chris Lam, who runs a grocery store in Chinatown agreed that the price spike in food was particularly acute this year, and said it had started to rise quickly after Easter.

    Lam said prices have been rising since the start of the pandemic as pressures from disruptions in supply chains and high freight costs built up. The rise in energy and fuel — largely exacerbated by the war in Ukraine — also contributed to the cost of transporting food, he said.  

    Inflation in Australia could be nearing its peak, says HSBC

    The biggest price hikes were in rice and cooking oil, which were imported, Lam said. He said many Australian consumers are now cutting back. 

    “We see it every day, you know, with our customers. Shopping habits have been impacted,” Lam told CNBC. 

    “People are hesitant to spend more, everyone’s tightening their belts, being more selective with the things that they buy.”

    Inflation vs. wage growth

    Australian personal finance comparison platform Finder, which has been tracking prices of consumer goods, said increased prices have outstripped wages growth across Australia since the pandemic started. 

    In that time, aside from vegetables, prices of beef and veal also rose sharply by 33% while staples like milk, cheese and eggs also jumped by nearly 12%, according to Finder’s Consumer Sentiment Tracker.

    Petrol prices have risen over 30% since 2019. 

    “It’s something we’ve all experienced. I ordered a pot of tea in the Sydney [central business district] last week and I was shocked when I saw the price: A$6.70!” said money expert at Finder, Sarah Megginson. 

    “These figures confirm that, overall, the cost of living has increased significantly for Australians.”

    RBA decision in line with expectations: Strategist

    Household stress over grocery bills has also increased in the past year, Finder said. 

    The expenses stressing out Australians are rent and mortgage repayments, groceries, petrol and energy, according to its Consumer Sentiment Tracker for September.

    The tracker also shows 56% of Australians are “somewhat stressed” about their current financial situation, and almost 1 in 5 are extremely stressed. But a quarter of Australians are not stressed at all.  

    End in sight?

    Many restaurants are not able to pass on increased costs to consumers which will result in lower profits.

    Jack Zhang

    accountant, Accentor Associates

    Most, however, say Australia can tolerate up to the top end of the Reserve Bank of Australia’s 2% to 3% target band, or just above it.

    Beyond interest rate raises, many cited winding back government spending as a means to cool inflation. About a third polled said the government should impose a super-profits tax on fossil fuel producers, with the proceeds used to reduce cost of services.

    In the interim, restaurant owners should brace for change, Jack Zhang, an accountant with Accentor Associates told CNBC. 

    Zhang said he has been helping many restaurants restructure their businesses since the government withdrew financial support after the lockdowns ended.

    Some have gone into voluntary administration. Others have had to cut shifts for staff, while food wastage is becoming a challenge, Zhang added. 

    “Many restaurants are not able to pass on increased costs to consumers which will result in lower profits,” the accountant said. 

    Why everyone is so obsessed with inflation

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  • U.S. starts fiscal year with record $31 trillion in debt, approaching debt ceiling

    U.S. starts fiscal year with record $31 trillion in debt, approaching debt ceiling

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    The nation’s gross national debt has exceeded $31 trillion, according to a U.S. Treasury report released Tuesday that logs America’s daily finances.

    Nearing the statutory ceiling of roughly $31.4 trillion — an artificial cap Congress placed on the U.S. government’s ability to borrow — the debt numbers are hitting an already tenuous economy facing the highest inflation in 40 years, rising interest rates and a strong U.S. dollar.

    Even as President Joe Biden has touted his administration’s deficit reduction efforts this year and recently signed the so-called Inflation Reduction Act, which attempts to tame high price increases caused by a variety of economic factors, economists say the latest debt numbers are a reason for concern.

    Owen Zidar, a Princeton economist, said rising interest rates will exacerbate the nation’s growing debt issues and make the debt itself more costly. The Federal Reserve has raised rates several times this year in an effort to combat inflation.

    Zidar said the debt “should encourage us to consider some tax policies that almost passed through the legislative process but didn’t get enough support,” like imposing higher taxes on the wealthy and closing the carried interest loophole, which allows money managers to treat their income as capital gains.

    “I think the point here is if you weren’t worried before about the debt before, you should be — and if you were worried before, you should be even more worried,” Zidar said.


    Food bank demand spikes amid inflation

    02:37

    The Congressional Budget Office earlier this year released a report on America’s debt load, warning in its 30-year outlook that, if unaddressed, the debt will soon spiral upward to new highs that could ultimately imperil the U.S. economy. If unchecked, investors could lose confidence in the U.S. government’s ability repay its debt, which would result in a spike in interest rates and rising inflation, the CBO warned.

    And as interest rates rise — as they are now under the Federal Reserve’s regime of rate hikes — the U.S. will be forced to spend “substantially” more on interest payments, the CBO added. That could weaken the fiscal position of the U.S., it noted.

    “Addicted to debt”

    In its August Mid-Session Review, the administration forecasted that this year’s budget deficit will be nearly $400 billion lower than it estimated back in March, due in part to stronger than expected revenues, reduced spending and an economy that has recovered all the jobs lost during the multiyear pandemic.

    In full, this year’s deficit will decline by $1.7 trillion, representing the single largest decline in the federal deficit in American history, the Office of Management and Budget said in August.

    Maya MacGuineas, president of the Committee for a Responsible Federal Budget said in an emailed statement Tuesday, “This is a new record no one should be proud of.”

    “In the past 18 months, we’ve witnessed inflation rise to a 40-year high, interest rates climbing in part to combat this inflation, and several budget-busting pieces of legislation and executive actions,” MacGuineas said. “We are addicted to debt.”

    A representative from the Treasury Department was not immediately available for comment.

    Sung Won Sohn, an economics professor at Loyola Marymount University, said “it took this nation 200 years to pile up its first trillion dollars in national debt, and since the pandemic we have been adding at the rate of 1 trillion nearly every quarter.”

    Predicting high inflation for the “foreseeable future,” he said, “when you increase government spending and money supply, you will pay the price later.”

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  • The bond market is crumbling. That’s bad for Wall Street and Main Street | CNN Business

    The bond market is crumbling. That’s bad for Wall Street and Main Street | CNN Business

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    A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.


    New York
    CNN Business
     — 

    The global bond market is having a historically awful year.

    The yield on the 10-year US Treasury bond, a proxy for borrowing costs, briefly moved above 4% on Wednesday for the first time in 12 years. That’s a bad omen for Wall Street and Main Street.

    What’s happening: This hasn’t been a pretty year for US stocks. All three major indexes are in a bear market, down more than 20% from recent highs, and analysts predict more pain ahead. When things are this bad, investors seek safety in Treasury bonds, which have low returns but are also considered low-risk (As loans to the US government, Treasury notes are seen as a safe bet since there is little risk they won’t be paid back).

    But in 2022’s topsy-turvy economy, even that safe haven has become somewhat treacherous.

    Bond returns, or yields, rise as their prices fall. Under normal market conditions, a rising yield should mean that there’s less demand for bonds because investors would rather put their money into higher-risk (and higher-reward) stocks.

    Instead markets are plummeting, and investors are flocking out of risky stocks, but yields are going up. What gives?

    Blame the Fed. Persistent inflation has led the Federal Reserve to fight back by aggressively hiking interest rates, and as a result the yields on US Treasury bonds have soared.

    Economic turmoil in the United Kingdom and European Union has also caused the value of both the British pound and the euro to fall dramatically when compared to the US dollar. Dollar strength typically coincides with higher bond rates as well.

    So while we’d normally see a rising 10-year yield as a signal that US investors have a rosy economic outlook, that isn’t the case this time. Gloomy investors are predicting more interest rate hikes and a higher chance of recession.

    What it means: Portfolios are aching. Vanguard’s $514.5 billion Total Bond Market Index, the largest US bond fund, is down more than 15% so far this year. That puts it on track for its worst year since it was created in 1986. The iShares 20+ Year Treasury bond fund

    (TLT)     (TLT) is down nearly 30% for the year.

    Stock investors are also nervously eyeing Treasuries. High yields make it more expensive for companies to borrow money, and that extra cost could lower earnings expectations. Companies with significant debt levels may not be able to afford higher financing costs at all.

    Main Street doesn’t get a break, either. An elevated 10-year Treasury return means more expensive loans on cars, credit cards and even student debt. It also means higher mortgage rates: The spike has already helped push the average rate for a 30-year mortgage above 6% for the first time since 2008.

    Going deeper: Still, investors are more nervous about the immediate future than the longer term. That’s spurred an inverted yield curve – when interest rates on short-term bonds move higher than those on long-term bonds. The inverted yield curve is a particularly ominous warning sign that has correctly predicted almost every recession over the past 60 years.

    The curve first inverted in April, and then again this summer. The two-year treasury yield has soared in the last week, and now hovers above 4.3%, deepening that gap.

    On Monday, a team at BNP Paribas predicted that the inverted gap between the two-year and 10-year Treasury yields could grow to its largest level since the early 1980s. Those years were marked by sticky inflation, interest rates near 20% and a very deep recession.

    What’s next: The bond market may face fresh volatility on Friday with the release of the Federal Reserve’s favored inflation measure, the Personal Consumption Expenditure Price Index for August. If the report comes in above expectations, expect bond yields to move even higher.

    The Bank of England held an emergency intervention to maintain economic stability in the UK on Wednesday. The central bank said it would buy long-dated UK government bonds “on whatever scale is necessary” to prevent a market crash.

    Investors around the globe have been dumping the British pound and UK bonds since the government on Friday unveiled a huge package of tax cuts, spending and increased borrowing aimed at getting the economy moving and protecting households and businesses from sky-high energy bills this winter, reports my colleague Mark Thompson.

    Markets fear the plan will drive up already persistent inflation, forcing the Bank of England to push interest rates as high as 6% next spring, from 2.25% at present. Mortgage markets have been in turmoil all week as lenders have struggled to price their loans. Hundreds of products have been withdrawn.

    “This repricing [of UK assets] has become more significant in the past day — and it is particularly affecting long-dated UK government debt,” the central bank said in its statement.

    “Were dysfunction in this market to continue or worsen, there would be a material risk to UK financial stability. This would lead to an unwarranted tightening of financing conditions and a reduction of the flow of credit to the real economy.”

    Many final salary, or defined-benefit, pension funds were particularly exposed to the dramatic sell-off in longer dated UK government bonds.

    “They would have been wiped out,” said Kerrin Rosenberg, UK chief executive of Cardano Investment.

    The central bank said it would buy long-dated UK government bonds until October 14.

    Steep drops in bond prices may be signaling doom and gloom for the economy, but some analysts say short-term bonds are still looking more attractive than equities right now.

    “Record low yields have kept fixed income in the shadow of equities for decades,” said analysts at BNY Mellon Wealth Management in a research note. “But the aggressive shift in Fed policy is beginning to change this.”

    Central banks around the globe have responded to elevated inflation by hiking interest rates– and bond yields have increased alongside them. The two-year US Treasury bond is currently yielding nearly 4%. That’s still a relatively low return, but better than the S&P 500’s dividend yield of around 1.7%.

    “For the first time in several years, bonds are attractive investment options. In addition to providing diversification versus equities…you now get paid for owning them,” wrote Barry Ritholtz of Ritholtz Wealth Management on Wednesday.

    Consider the alternative: the S&P is down more than 20% year to date.

    The US Bureau of Economic Analysis releases its third estimate for Q2 GDP and US weekly jobless claims.

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  • OPEC+ makes big oil cut to boost prices; pump costs may rise

    OPEC+ makes big oil cut to boost prices; pump costs may rise

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    FRANKFURT, Germany — The OPEC+ alliance of oil-exporting countries on Wednesday decided to sharply cut production to support sagging oil prices, a move that could deal the struggling global economy another blow and raise politically sensitive pump prices for U.S. drivers just ahead of key national elections.

    Energy ministers meeting at the Vienna headquarters of the OPEC oil cartel cut production by 2 million barrels per day starting in November at their first face-to-face meeting since the start of the COVID-19 pandemic.

    Besides a token trim in oil production last month, the major cut is an abrupt turnaround from months of restoring deep cuts made during the depths of the pandemic and could help alliance member Russia weather a looming European ban on oil imports.

    In a statement, OPEC+ said the decision was based on the “uncertainty that surrounds the global economic and oil market outlooks.”

    The impact of the production cut on oil prices — and thus the price of gasoline made from crude — will be limited somewhat because OPEC+ members are already unable to meet the quotas set by the group.

    The alliance also said it was renewing its cooperation between members of the OPEC cartel and non-members, the most significant of which is Russia. The deal was to expire at year’s end.

    The decision comes as oil trades well below its summer peaks because of fears that major global economies such as the U.S. or Europe will sink into recession due to high inflation, rising interest rates meant to curb rising consumer prices, and uncertainty over Russia’s war against in Ukraine.

    The fall in oil prices has been a boon to U.S. drivers, who saw lower gasoline prices at the pump before costs recently started ticking up, and for U.S. President Joe Biden as his Democratic Party gears up for congressional elections next month.

    White House press secretary Karine Jean-Pierre told reporters Tuesday that the U.S. would not extend releases from its strategic reserve to increase global supplies.

    Biden has tried to receive credit for gasoline prices falling from their average June peak of $5.02 — with administration officials highlighting a late March announcement that a million barrels a day would be released from the strategic reserve for six months. High inflation is a fundamental drag on Biden’s approval and has dampened Democrats’ chances in the midterm elections.

    Oil supply could face further cutbacks in coming months when a European ban on most Russian imports takes effect in December. A separate move by the U.S. and other members of the Group of Seven wealthy democracies to impose a price cap on Russian oil could reduce supply if Russia retaliates by refusing to ship to countries and companies that observe the cap.

    The EU agreed Wednesday on new sanctions that are expected to include a price cap on Russian oil.

    Russia “will need to find new buyers for its oil when the EU embargo comes into force in early December and will presumably have to make further price concessions to do so,” analysts at Commerzbank wrote in a note. “Higher prices beforehand — boosted by production cuts elsewhere — would therefore doubtless be very welcome.”

    Dwindling prospects for a diplomatic deal to limit Iran’s nuclear program have also lowered prospects for a return of as much as 1.5 million barrels a day in Iranian oil to the market if sanctions are removed.

    Oil prices surged this summer as markets worried about the loss of Russian supplies from sanctions over the war in Ukraine, but they slipped as fears about recessions in major economies and China’s COVID-19 restrictions weighed on demand for crude.

    International benchmark Brent has sagged as low as $84 in recent days after spending most of the summer months over $100 per barrel.

    At its last meeting in September, OPEC+ reduced the amount of oil it produces by 100,000 barrels a day in October. That token cut didn’t do much to boost lower oil prices, but it put markets on notice that the group was willing to act if prices kept falling.

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  • Inflation is crimping many Americans’ holiday travel plans

    Inflation is crimping many Americans’ holiday travel plans

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    Inflation could dash some of the holiday cheer for many Americans who plan on traveling for the season.

    Surging gas, airfare and hotel costs are making travelers especially budget-conscious, according to a new survey from Bankrate. Americans said they plan to travel shorter distances, spend fewer days out of town and engage in fewer activities that cost money. More people are also planning to drive to their destination instead of flying, while others are planning to use credit card points to book trips, the personal finance site found. 

    Travel costs are up sharply compared to last year. Lodging away from home, which includes hotel stays, was up 4% in August from a year ago, according to the Consumer Price Index. Gasoline rose 26% during that same period, and airline fares jumped 28%, inflation data shows. 

    The days between November 24 and January 1 are the busiest times for domestic travel. The price of plane tickets and hotel stays during the holidays are expected to continue growing, with airfares reaching some of their highest points in the past five years, according to travel booking app Hopper. 


    How to maximize your hotel stay

    03:05

    Domestic flights on Christmas Day are roughly $435 on average for a round-trip fare, up 55% from last year, while Thanksgiving airfare prices are about $281 round-trip, a 25% increase from last year, Hopper’s data shows. The average hotel stay over the Thanksgiving holiday will be $189 per night, up 13% from last year, and $218 a night during Christmas, up 32% from last year.

    Holiday travel also proved a challenge earlier this year, particularly around Memorial Day, when passengers experienced thousands of canceled or delayed flights. The cancellations stemmed from a combination of bad weather, staffing shortages and TSA and airlines over-scheduling some flights. 

    “Hopefully this holiday season won’t be as messy, but I suspect there will be more travel disruptions due to weather, high demand, lingering staff and equipment shortages,” Bankrate senior industry analyst Ted Rossman said. 

    Khristopher J. Brooks

    Khristopher J. Brooks is a reporter for CBS MoneyWatch covering business, consumer and financial stories that range from economic inequality and housing issues to bankruptcies and the business of sports.

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  • US starts fiscal year with record $31 trillion in debt

    US starts fiscal year with record $31 trillion in debt

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    WASHINGTON — The nation’s gross national debt has surpassed $31 trillion, according to a U.S. Treasury report released Tuesday that logs America’s daily finances.

    Edging closer to the statutory ceiling of roughly $31.4 trillion — an artificial cap Congress placed on the U.S. government’s ability to borrow — the debt numbers hit an already tenuous economy facing high inflation, rising interest rates and a strong U.S. dollar.

    And while President Joe Biden has touted his administration’s deficit reduction efforts this year and recently signed the so-called Inflation Reduction Act, which attempts to tame 40-year high price increases caused by a variety of economic factors, economists say the latest debt numbers are a cause for concern.

    Owen Zidar, a Princeton economist, said rising interest rates will exacerbate the nation’s growing debt issues and make the debt itself more costly. The Federal Reserve has raised rates several times this year in an effort to combat inflation.

    Zidar said the debt “should encourage us to consider some tax policies that almost passed through the legislative process but didn’t get enough support,” like imposing higher taxes on the wealthy and closing the carried interest loophole, which allows money managers to treat their income as capital gains.

    “I think the point here is if you weren’t worried before about the debt before, you should be — and if you were worried before, you should be even more worried,” Zidar said.

    The Congressional Budget Office earlier this year released a report on America’s debt load, warning in its 30-year outlook that, if unaddressed, the debt will soon spiral upward to new highs that could ultimately imperil the U.S. economy.

    In its August Mid-Session Review, the administration forecasted that this year’s budget deficit will be nearly $400 billion lower than it estimated back in March, due in part to stronger than expected revenues, reduced spending, and an economy that has recovered all the jobs lost during the multi-year pandemic.

    In full, this year’s deficit will decline by $1.7 trillion, representing the single largest decline in the federal deficit in American history, the Office of Management and Budget said in August.

    Maya MacGuineas, president of the Committee for a Responsible Federal Budget said in an emailed statement Tuesday, “This is a new record no one should be proud of.”

    “In the past 18 months, we’ve witnessed inflation rise to a 40-year high, interest rates climbing in part to combat this inflation, and several budget-busting pieces of legislation and executive actions,” MacGuineas said. “We are addicted to debt.”

    A representative from the Treasury Department was not immediately available for comment.

    Sung Won Sohn, an economics professor at Loyola Marymount University, said “it took this nation 200 years to pile up its first trillion dollars in national debt, and since the pandemic we have been adding at the rate of 1 trillion nearly every quarter.”

    Predicting high inflation for the “foreseeable future,” he said, “when you increase government spending and money supply, you will pay the price later.”

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  • U.S. economy, labor market still rebounding from pandemic

    U.S. economy, labor market still rebounding from pandemic

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    U.S. economy, labor market still rebounding from pandemic – CBS News


    Watch CBS News



    The U.S. economy and labor market are still rebounding from the COVID-19 pandemic. Several workplace trends, such as working from home, still remain prevalent. Aki Ito, senior correspondent for Business Insider, joined CBS News to discuss.

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  • Is Tesla seeing a slowdown in demand?

    Is Tesla seeing a slowdown in demand?

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    As recently as July, Tesla Chief Executive Elon Musk said the electric-car maker did not have a problem with customer demand, simply a problem making and shipping all the Model Ys and Model 3s consumers were ready to buy.

    That may no longer be true.

    Analysts see early signs of caution for the world’s most valuable car maker, including for its increasingly premium pricing, at a time when the global economy is slowing and expectations for global auto sales are being dialed back.

    Tesla has navigated supply-chain challenges better than most of its rivals and analysts expect it to post strong growth through next year as it expands output, but there are also indications it is being forced to respond to a tougher market.

    The most immediate concern: Tesla made more than 22,000 more electric vehicles (EVs) than it delivered to customers in the third quarter, data released this week showed. That is the first time it has had to finance that many cars in inventory.

    For most of the past three years, Tesla has been selling more EVs in a quarter than it can produce. The one notable exception was in early 2020, when the COVID-19 pandemic disrupted deliveries.

    While Tesla’s numbers remain low, building inventory has historically been a down-cycle indicator for automakers, forcing markdowns in past recessions of the kind Tesla has not yet faced.

    Tesla blamed transport issues for a delivery total that fell short of Wall Street expectations.

    If Tesla needs to hold more inventory in coming quarters to smooth deliveries and avoid the end-of-quarter rush that has been its norm, that would add to the $1.2bn in undelivered cars it held at the end of the second quarter.

    Analysts believe Tesla still has more demand than it can supply, the bedrock assumption behind its aggressive expansion plan over the next year as it ramps up production at factories in Shanghai, Berlin and Austin, Texas.

    Morgan Stanley analyst Adam Jonas said he believed Tesla did not face an immediate demand problem, but added a caution on pricing and Tesla’s ability to buck the economic cycle.

    “It would be unreasonable to assume that there is: (a) a limit to how much Tesla can continue to increase prices without demand suffering and (b) that the company was not exposed to decelerating macroeconomic growth,” he said in a research note.

    Tesla chief Musk has acknowledged that ‘demand falls off a cliff’ when prices shoot up [File: Bloomberg]

    Prices at ’embarrassing levels’

    Tesla’s average vehicle transaction price jumped 31 percent to $69,831 in August, compared with $53,132 at the start of 2021, according to the Kelley Blue Book. That outpaced industry-wide price hikes on new cars of 18 percent to $48,301 during the same period.

    The waiting time Tesla customers face between order and delivery has also been dropping in both the United States and China, Tesla’s largest markets. In China, that lag, one indicator of the supply-demand balance, has been cut four times since August to a minimum of a week for delivery.

    And Tesla, which has resisted marketing and incentives, offered Chinese buyers a rebate of 8,000 yuan ($1,124) if they took delivery before the end of September.

    Musk himself in July said Tesla prices were hitting “embarrassing levels” and that “demand falls off a cliff” when prices are rising to “some arbitrarily high level”.

    As Tesla pushes its own capacity expansion, it is running into a wave of new EV competition, especially in China from the likes of BYD, Nio and XPeng.

    A Tesla output plan reported last week by Reuters, before the third quarter delivery announcement, showed the automaker’s detailed plan to run and source its factories to hit output growth of 50 percent this year and next, a target just beyond the most bullish outside forecasts.

    The question of whether and how Tesla sees the supply-demand balance shifting will be central for investors when the company reports quarterly results on October 19.

    Evolving economic risks

    Musk has offered an evolving view on economic risks. In June, he told Tesla staff he had a “super bad feeling” about the economy, a reason he cited to pause hiring at the time. In August, he told investors he expected a “mild recession” that could last up to 18 months.

    Guidehouse Insights analyst Sam Abuelsamid said Tesla needed to get higher production from its newer factories in Austin and Berlin. Musk had earlier compared the start of production in those plants to “gigantic money furnaces.”

    “Tesla could end up running into some financial challenges in the third and fourth quarters (of 2023), if those factories continue to be underutilised,” Abuelsamid said.

    Fitch Solutions, which provides research on country risk and industries, said on Tuesday that it expected global auto sales to drop 5.4 percent in 2022, before bouncing back only partly in 2023.

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  • The 10 Senate seats most likely to flip in 2022 | CNN Politics

    The 10 Senate seats most likely to flip in 2022 | CNN Politics

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    CNN
     — 

    The race for the Senate is in the eye of the beholder less than six weeks from Election Day, with ads about abortion, crime and inflation dominating the airwaves in key states as campaigns test the theory of the 2022 election.

    The cycle started out as a referendum on President Joe Biden – an easy target for Republicans, who need a net gain of just one seat to flip the evenly divided chamber. Then the US Supreme Court’s late June decision overturning Roe v. Wade gave Democrats the opportunity to paint a contrast as Republicans struggled to explain their support for an abortion ruling that the majority of the country opposes. Former President Donald Trump’s omnipresence in the headlines gave Democrats another foil.

    But the optimism some Democrats felt toward the end of the summer, on the heels of Biden’s legislative wins and the galvanizing high court decision, has been tempered slightly by the much anticipated tightening of some key races as political advertising ramps up on TV and voters tune in after Labor Day.

    Republicans, who have midterm history on their side as the party out of the White House, have hammered Biden and Democrats for supporting policies they argue exacerbate inflation. Biden’s approval rating stands at 41% with 54% disapproving in the latest CNN Poll of Polls, which tracks the average of recent surveys. And with some prices inching back up after a brief hiatus, the economy and inflation – which Americans across the country identify as their top concern in multiple polls – are likely to play a crucial role in deciding voters’ preferences.

    But there’s been a steady increase in ads about crime too as the GOP returns to a familiar criticism, depicting Democrats as weak on public safety. Cops have been ubiquitous in TV ads this cycle – candidates from both sides of the aisle have found law enforcement officers to testify on camera to their pro-police credentials. Democratic ads also feature women talking about the threat of a national abortion ban should the Senate fall into GOP hands, while Republicans have spent comparatively less trying to portray Democrats as the extremists on the topic.

    While the issue sets have fluctuated, the Senate map hasn’t changed. Republicans’ top pickup opportunities have always been Nevada, Georgia, Arizona and New Hampshire – all states that Biden carried in 2020. In two of those states, however, the GOP has significant problems, although the states themselves keep the races competitive. Arizona nominee Blake Masters is now without the support of the party’s major super PAC, which thinks its money can be better spent elsewhere, including in New Hampshire, where retired Army Brig. Gen. Don Bolduc is far from the nominee the national GOP had wanted. But this is the time of year when poor fundraising can really become evident since TV ad rates favor candidates and a super PAC gets much less bang for its buck.

    The race for Senate control may come down to three states: Georgia, Nevada and Pennsylvania, all of which are rated as “Toss-up” races by Inside Elections with Nathan L. Gonzales. As Republicans look to flip the Senate, which Minority Leader Mitch McConnell has called a “50-50 proposition,” they’re trying to pick up the first two and hold on to the latter.

    Senate Democrats’ path to holding their majority lies with defending their incumbents. Picking off a GOP-held seat like Pennsylvania – still the most likely to flip in CNN’s ranking – would help mitigate any losses. Wisconsin, where GOP Sen. Ron Johnson is vying for a third term, looks like Democrats’ next best pickup opportunity, but that race drops in the rankings this month as Republican attacks take a toll on the Democratic nominee in the polls.

    These rankings are based on CNN’s reporting, fundraising and advertising data, and polling, as well as historical data about how states and candidates have performed. It will be updated one more time before Election Day.

    Incumbent: Republican Pat Toomey (retiring)

    Sarah Silbiger/Pool/Getty Images

    The most consistent thing about CNN’s rankings, dating back to 2021, has been Pennsylvania’s spot in first place. But the race to replace retiring GOP Sen. Pat Toomey has tightened since the primaries in May, when Republican Mehmet Oz emerged badly bruised from a nasty intraparty contest. In a CNN Poll of Polls average of recent surveys in the state, Democrat John Fetterman, the state lieutenant governor, had the support of 50% of likely voters to Oz’s 45%. (The Poll of Polls is an average of the four most recent nonpartisan surveys of likely voters that meet CNN’s standards.) Fetterman is still overperforming Biden, who narrowly carried Pennsylvania in 2020. Fetterman’s favorability ratings are also consistently higher than Oz’s.

    One potential trouble spot for the Democrat: More voters in a late September Franklin and Marshall College Poll viewed Oz has having policies that would improve voters’ economic circumstances, with the economy and inflation remaining the top concern for voters across a range of surveys. But nearly five months after the primary, the celebrity surgeon still seems to have residual issues with his base. A higher percentage of Democrats were backing Fetterman than Republicans were backing Oz in a recent Fox News survey, for example, with much of that attributable to lower support from GOP women than men. Fetterman supporters were also much more enthusiastic about their candidate than Oz supporters.

    Republicans have been hammering Fetterman on crime, specifically his tenure on the state Board of Pardons: An ad from the Senate Leadership Fund features a Bucks County sheriff saying, “Protect your family. Don’t vote Fetterman.” But the lieutenant governor is also using sheriffs on camera to defend his record. And with suburban voters being a crucial demographic, Democratic advertising is also leaning into abortion, like this Senate Majority PAC ad that features a female doctor as narrator and plays Oz’s comments from during the primary about abortion being “murder.” Oz’s campaign has said that he supports exceptions for “the life of the mother, rape and incest” and that “he’d want to make sure that the federal government is not involved in interfering with the state’s decisions on the topic.”

    Incumbent: Democrat Catherine Cortez Masto

    02 democrat immigration legislation 0717

    CNN

    Republicans have four main pickup opportunities – and right now, Democratic Sen. Catherine Cortez Masto’s seat looks like one of their best shots. Biden carried Nevada by a slightly larger margin than two of those other GOP-targeted states, but the Silver State’s large transient population adds a degree of uncertainty to this contest.

    Republicans have tried to tie the first-term senator to Washington spending and inflation, which may be particularly resonant in a place where average gas prices are now back up to over $5 a gallon. Democrats are zeroing in on abortion rights and raising the threat that a GOP-controlled Senate could pass a national abortion ban. Former state Attorney General Adam Laxalt – the rare GOP nominee to have united McConnell and Trump early on – called the 1973 Roe v. Wade ruling a “joke” before the Supreme Court overturned the decision in June. Democrats have been all too happy to use that comment against him, but Laxalt has tried to get around those attacks by saying he does not support a national ban and pointing out that the right to an abortion is settled law in Nevada.

    Incumbent: Democrat Raphael Warnock

    Sen Raphael Warnock 10 senate seats

    Megan Varner/Getty Images

    The closer we get to Election Day, the more we need to talk about the Georgia Senate race going over the wire. If neither candidate receives a majority of the vote in November, the contest will go to a December runoff. There was no clear leader in a recent Marist poll that had Democratic Sen. Raphael Warnock, who’s running for a full six-year term, and Republican challenger Herschel Walker both under 50% among those who say they definitely plan to vote.

    Warnock’s edge from earlier this cycle has narrowed, which bumps this seat up one spot on the rankings. The good news for Warnock is that he’s still overperforming Biden’s approval numbers in a state that the President flipped in 2020 by less than 12,000 votes. And so far, he seems to be keeping the Senate race closer than the gubernatorial contest, for which several polls have shown GOP Gov. Brian Kemp ahead. Warnock’s trying to project a bipartisan image that he thinks will help him hold on in what had until recently been a reliably red state. Standing waist-deep in peanuts in one recent ad, he touts his work with Alabama GOP Sen. Tommy Tuberville to “eliminate the regulations,” never mentioning his own party. But Republicans have continued to try to tie the senator to his party – specifically for voting for measures in Washington that they claim have exacerbated inflation.

    Democrats are hoping that enough Georgians won’t see voting for Walker as an option – even if they do back Kemp. Democrats have amped up their attacks on domestic violence allegations against the former football star and unflattering headlines about his business record. And all eyes will be on the mid-October debate to see how Walker, who has a history of making controversial and illogical comments, handles himself onstage against the more polished incumbent.

    Incumbent: Republican Ron Johnson

    Sen Ron Johnson 10 senate seats

    Leigh VogelPool/Getty Images

    Sen. Ron Johnson is the only Republican running for reelection in a state Biden won in 2020 – in fact, he broke his own term limits pledge to run a third time, saying he believed America was “in peril.” And although Johnson has had low approval numbers for much of the cycle, Democrats have underestimated him before. This contest moves down one spot on the ranking as Johnson’s race against Democratic Lt. Gov. Mandela Barnes has tightened, putting the senator in a better position.

    Barnes skated through the August primary after his biggest opponents dropped out of the race, but as the nominee, he’s faced an onslaught of attacks, especially on crime, using against him his past words about ending cash bail and redirecting some funding from police budgets to social services. Barnes has attempted to answer those attacks in his ads, like this one featuring a retired police sergeant who says he knows “Mandela doesn’t want to defund the police.”

    A Marquette University Law School poll from early September showed no clear leader, with Johnson at 49% and Barnes at 48% among likely voters, which is a tightening from the 7-point edge Barnes enjoyed in the same poll’s August survey. Notably, independents were breaking slightly for Johnson after significantly favoring Barnes in the August survey. The effect of the GOP’s anti-Barnes advertising can likely be seen in the increasing percentage of registered voters in a late September Fox News survey who view the Democrat as “too extreme,” putting him on parity with Johnson on that question. Johnson supporters are also much more enthusiastic about their candidate.

    Incumbent: Democrat Mark Kelly

    Mark Kelly AZ 1103

    Courtney Pedroza/Getty Images

    Democratic Sen. Mark Kelly, who’s running for a full six-year term after winning a 2020 special election, is still one of the most vulnerable Senate incumbents in a state that has only recently grown competitive on the federal level. But Republican nominee Blake Masters is nowhere close to rivaling Kelly in fundraising, and major GOP outside firepower is now gone. After canceling its September TV reservations in Arizona to redirect money to Ohio, the Senate Leadership Fund has cut its October spending too.

    Other conservative groups are spending for Masters but still have work to do to hurt Kelly, a well-funded incumbent with a strong personal brand. Kelly led Masters 51% to 41% among registered voters in a September Marist poll, although that gap narrowed among those who said they definitely plan to vote. A Fox survey from a little later in the month similarly showed Kelly with a 5-point edge among those certain to vote, just within the margin of error.

    Masters has attempted to moderate his abortion position since winning his August primary, buoyed by a Trump endorsement, but Kelly has continued to attack him on the issue. And a recent court decision allowing the enforcement of a 1901 state ban on nearly all abortions has given Democrats extra fodder to paint Republicans as a threat to women’s reproductive rights.

    Incumbent: Republican Richard Burr (retiring)

    Sen Richard Burr 10 senate seats

    Demetrius Freeman/Pool/Getty Images

    North Carolina slides up one spot on the rankings, trading places with New Hampshire. The open-seat race to replace retiring GOP Sen. Richard Burr hasn’t generated as much national buzz as other states given that Democrats haven’t won a Senate seat in the state since 2008.

    But it has remained a tight contest with Democrat Cheri Beasley, who is bidding to become the state’s first Black senator, facing off against GOP Rep. Ted Budd, for whom Trump recently campaigned. Beasley lost reelection as state Supreme Court chief justice by only about 400 votes in 2020 when Trump narrowly carried the Tar Heel state. But Democrats hope that she’ll be able to boost turnout among rural Black voters who might not otherwise vote during a midterm election and that more moderate Republicans and independents will see Budd as too extreme. One of Beasley’s recent spots features a series of mostly White, gray-haired retired judges in suits endorsing her as “someone different” while attacking Budd as being a typical politician out for himself.

    Budd is leaning into current inflation woes, specifically going after Biden in some ads that feature half-empty shopping carts, without even mentioning Beasley. Senate Leadership Fund is doing the work of trying to tie the Democrat to Washington – one recent spot almost makes her look like the incumbent in the race, superimposing her photo over an image of the US Capitol and displaying her face next to Biden’s. Both SLF and Budd are also targeting Beasley over her support for Democrats’ recently enacted health care, tax and climate bill. “Liberal politician Cheri Beasley is coming for you – and your wallet,” the narrator from one SLF ad intones, before later adding, “Beasley’s gonna knock on your door with an army of new IRS agents.” (The new law increases funding for the IRS, including for audits. But Democrats and the Trump-appointed IRS commissioner have said the intention is to go after wealthy tax cheats, not the middle class.)

    Incumbent: Democrat Maggie Hassan

    Sen Maggie Hassan 10 senate seats

    Erin Scott/Getty Images

    A lot has been made of GOP candidate quality this cycle. But there are few states where the difference between the nominee Republicans have and the one they’d hoped to have has altered these rankings quite as much as New Hampshire.

    Retired Army Brig. Gen. Don Bolduc, who lost a 2020 GOP bid for the state’s other Senate seat, won last month’s Republican primary to take on first-term Democratic Sen. Maggie Hassan. The problem for him, though, is that he doesn’t have much money to wage that fight. Bolduc had raised a total of $579,000 through August 24 compared with Hassan’s $31.4 million. Senate Leadership Fund is on air in New Hampshire to boost the GOP nominee – attacking Hassan for voting with Biden and her support of her party’s health care, tax and climate package. But because super PACs get much less favorable TV advertising rates than candidates, those millions won’t go anywhere near as far as Hassan’s dollars will.

    A year ago, Republicans were still optimistic that Gov. Chris Sununu would run for Senate, giving them a popular abortion rights-supporting nominee in a state that’s trended blue in recent federal elections. Bolduc told WMUR after his primary win that he’d vote against a national abortion ban. But ads from Hassan and Senate Majority PAC have seized on his suggestion in the same interview that the senator should “get over” the abortion issue. Republicans recognize that abortion is a salient factor in a state Biden carried by 7 points, but they also argue that the election – as Bolduc said to WMUR – will be about the economy and that Hassan is an unpopular and out-of-touch incumbent.

    Hassan led Bolduc 49% to 41% among likely voters in a Granite State Poll conducted by the University of New Hampshire Survey Center. The incumbent has consolidated Democratic support, but only 83% of Republicans said they were with Bolduc, the survey found. Still, some of those Republicans, like those who said they were undecided, could come home to the GOP nominee as the general election gets closer, which means Bolduc has room to grow. He’ll need more than just Republicans to break his way, however, which is one reason he quickly pivoted on the key issue of whether the 2020 election was stolen days after he won the primary.

    Incumbent: Republican Rob Portman (retiring)

    Sen Rob Portman 10 senate seats

    TING SHEN/AFP/POOL/Getty Images

    Ohio – a state that twice voted for Trump by 8 points – isn’t supposed to be on this list at No. 8, above Florida, which backed the former President by much narrower margins. But it’s at No. 8 for the second month in a row. Republican nominee J.D. Vance’s poor fundraising has forced Senate Leadership Fund to redirect millions from other races to Ohio to shore him up and attack Rep. Tim Ryan, the Democratic nominee who had the airwaves to himself all summer. The 10-term congressman has been working to distance himself from his party in most of his ads, frequently mentioning that he “voted with Trump on trade” and criticizing the “defund the police” movement. Vance is finally on the air, trying to poke some holes in Ryan’s image.

    But polling still shows a tight race with no clear leader. Ryan had an edge with independents in a recent Siena College/Spectrum News poll, which also showed that Vance – Trump’s pick for the nomination – has more work to do to consolidate GOP support after an ugly May primary. Assuming he makes up that support and late undecided voters break his way, Vance will likely hold the advantage in the end given the Buckeye State’s solidifying red lean.

    Incumbent: Republican Marco Rubio

    Sen Marco Rubio 10 senate seats

    DREW ANGERER/AFP/POOL/Getty Images

    Democrats face an uphill battle against GOP Sen. Marco Rubio in an increasingly red-trending state, which Trump carried by about 3 points in 2020 – nearly tripling his margin from four years earlier.

    Democratic Rep. Val Demings, who easily won the party’s nomination in August, is a strong candidate who has even outraised the GOP incumbent, but not by enough to seriously jeopardize his advantage. She’s leaning into her background as the former Orlando police chief – it features prominently in her advertising, in which she repeatedly rejects the idea of defunding the police. Still, Rubio has tried to tie her to the “radical left” in Washington to undercut her own law enforcement background.

    Incumbent: Democrat Michael Bennet

    Sen Michael Bennett 10 senate seats

    DEMETRIUS FREEMAN/AFP/POOL/Getty Images

    Democratic Sen. Michael Bennet is no stranger to tough races. In 2016, he only won reelection by 6 points against an underfunded GOP challenger whom the national party had abandoned. Given GOP fundraising challenges in some of their top races, the party hasn’t had the resources to seriously invest in the Centennial State this year.

    But in his bid for a third full term, Bennet is up against a stronger challenger in businessman Joe O’Dea, who told CNN he disagreed with the Supreme Court’s decision to overturn Roe v. Wade. His wife and daughter star in his ads as he tries to cut a more moderate profile and vows not to vote the party line in Washington.

    Bennet, however, is attacking O’Dea for voting for a failed 2020 state ballot measure to ban abortion after 22 weeks of pregnancy and arguing that whatever O’Dea says about supporting abortion rights, he’d give McConnell “the majority he needs” to pass a national abortion ban.

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