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      The Guardian view on US gun violence: another desperate day | Editorial

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      The Guardian view on US gun violence: another desperate dayEditorialFirearm sales and deaths have soared in the last two years. All killings – not just mass shootings – must be addressed To see the smiling faces of the children murdered at Robb elementary school in Uvalde, Texas, is unbearable. The killing of at least 19 pupils and two teachers is not, as it should be, unthinkable. It comes a decade after 20 children and six staff members were shot dead at Sandy Hook elementary school in Connecticut, and only 10 days after the racist murder of 10 mostly black shoppers at a supermarket in Buffalo, New York.Gun sales have risen sharply since the pandemic began, although the US already had more guns than citizens, far ahead of any other country. The murder rate has soared by nearly 30%. Firearms are the leading cause of death for America’s children, claiming the lives of more than 1,500 under-18s last year. Mass shootings account for at most 3% of gun violence deaths; many occur in ones or twos, and largely in disadvantaged neighbourhoods of colour. Unlike Tuesday’s tragedy, these victims go mostly unremarked, even when they are school age. Yet they, too, are irreplaceable to those who loved them.Attempts to curb mass shootings, for example through banning assault weapons, are therefore both necessary and wholly inadequate. Yet lawmakers have struggled to enact and defend even these. Many believed that Sandy Hook had to prove a turning point. The passionate efforts of bereaved parents, vilified and attacked as they grieved, have led to a gunmaker being found liable for a mass shooting in the US for the first time. But the most wide-reaching change resulting from school shootings has been that millions of children now go through drills – traumatising those who will, thankfully, never encounter a shooter.On Tuesday, Joe Biden asked – as so many have – why the US is “willing to live with this carnage”. Support for tighter gun controls has dropped in recent years, though most still want them, and backing usually rises after mass shootings. Texan Republican leaders have prided themselves on expanding gun rights. Governor Greg Abbott, along with state senator Ted Cruz and Donald Trump, is due to speak at the NRA’s meeting in Houston this weekend. The Republican grip on the country’s institutions, skewing the executive, the legislature and the judiciary rightward, is another problem. A conservative, pro-gun supreme court will rule shortly on a New York law restricting who can carry guns in public, potentially imperilling restrictions elsewhere.Local gun violence prevention programmes work: the Biden administration is right to have dramatically increased funding, but more must be done. It is also essential that misogyny is addressed: most mass shooters have a history of expressing hatred of women and attacking female family members, and most women shot by their partners have previously been abused by them.It is hard to feel any optimism when persistent campaigning by survivors and bereaved families has failed to shift the nation. The question is not merely what might save children like those at Uvalde, but whether anything will be done to save Americans more broadly if even these deaths do not force the US to address gun violence seriously. These deaths were not unthinkable. Inaction, in the face of them, must be.TopicsTexas school shootingOpinionUS gun controlUS domestic policyUS economyUS politicsTexaseditorialsReuse this content More

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      US economy is on a downhill slide. But Republicans can’t fix it, Biden warns

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      US economy is on a downhill slide. But Republicans can’t fix it, Biden warnsThe president says frustrated Americans ‘have a choice between two paths’ but that the GOP is not focused on fighting inflation On a recent visit to a family farm in rural Illinois, thousands of miles away from the front lines of the grinding war in Ukraine, Joe Biden lashed out at his Russian counterpart, Vladimir Putin, blaming him for destabalizing global food supplies and driving up the cost of groceries at home.Russia’s assault on Ukraine, Biden explained after a tour of the farm’s fields and grain bins, has dramatically reduced food exports from the warring nations that together supply more than a quarter of the world’s wheat, causing food prices to spiral.Biden targets America’s wealthiest with proposed minimum tax on billionairesRead more“Right now, America is fighting on two fronts,” the president said. “At home, it’s inflation and rising prices. Abroad, it’s helping Ukrainians defend their democracy and feeding those who are left hungry around the world because Russian atrocities exist.”With less than six months before the midterm congressional elections, Biden is talking about the economy – a lot. It is thetop issue on voters’ minds and, worryingly for Democrats, one of the biggest political liabilities for the president and his party.Despite a streak of steady job growth and low unemployment, Americans are deeply pessimistic about the state of the economy. Inflation, running at nearly its fastest rate in four decades, has become inescapable. Gas prices have surged to record highs as many families struggle to afford the basic necessities like food and rent. Now economists are warning of possible recession. Compounding matters, a shortage of baby formula has left parents in one of the world’s wealthiest countries scrounging to feed their infants.Amid the national tumult over the economy, Biden’s approval ratings have fallen sharply, dipping to the lowest point of his presidency – 39% – this month, according to the latest AP-NORC poll.The visit to the Illinois farm was part of a wider effort by the White House to reset the narrative around the economy after months of unyielding criticism from Republicans, who have used inflation as a political cudgel against Biden.In recent days, Biden has sought to tell a textured story about the economy, one that concludes with the sharp warning that as bleak as it can seem now, the alternative – Republican control of Congress – would be much worse.In his telling, the administration pulled the nation back from the brink of economic catastrophe with a massive stimulus bill and mass vaccination campaign that saved lives and livelihoods during the depths of the pandemic. Two years on, there is much more to do. Naming inflation as his “top domestic priority”, Biden has touted the administration’s efforts to put the economy on a sturdier path by strengthening the nation’s supply chains, cracking down on price gouging and releasing oil from the strategic reserve.Under mounting pressure in recent weeks, he invoked the Defense Production Act to ramp up baby formula production and launched “Operation Fly Formula” to rush shipments into the US from overseas.Yet those actions, he charged, are being undermined by Putin’s aggression in Ukraine that has sent fuel and food prices soaring; new Covid-19 lockdowns in China that are straining supply chains anew; alleged price-gouging by oil companies; and an “ultra-Maga” Republican party intent on obstructing the president at every turn.Biden says he understands Americans’ frustration with rising costs and the slow pace of progress in Washington – so deeply, in fact, he could “taste” it. But electing Republicans, he argued, would not ease their troubles.“Americans have a choice right now between two paths, reflecting two very different sets of values,” Biden said. He charged that the Republican party, still in the thrall of Donald Trump, had no serious plan to tackle inflation and was instead more focused on fighting issues such as banning textbooks from classrooms.In a press release, the Republican National Committee accused Biden of being “desperate to blame anyone but himself for the worst inflation in 40 years”.“But,” it added, “the American people know he is responsible.”For Democrats who hold narrow majorities in both chambers of Congress, asking voters for two more years of unified government in Washington is a risk that Biden himself acknowledged.Voters historically punish the president’s party in the midterm elections. And this cycle, Democrats have struggled to energize their base, deflated over the party’s failure to pass Biden’s sweeping agenda, designed to remedy longstanding economic challenges. At the same time, Democrats are struggling to persuade independent and moderate Republicans voters who recoiled from Donald Trump in 2018 and 2020.Whether Democrats can change voters’ attitudes on the economy weighs heavily on their prospects.Public opinion surveys have consistently found that voters have more trust in Republicans to handle the economy and inflation than Democrats. A recent ABC News/Washington Post poll found that only 28% of Americans approved of the job Biden was doing to tackle inflation, while 68% disapproved. The same poll showed that 50% of Americans believe Republicans were better able to handle the economy. Just 36% said the same about Democrats.The political headwinds against them, Democrats believe they have found an opening that will undercut Republicans’ advantage.A plan written by Senator Rick Scott of Florida, the chairman of the National Republican Senatorial Committee, would require all Americans to pay some income tax, including families that don’t earn enough to owe taxes now and would require Congress to reauthorize all federal legislation every five years.Biden recently used his bully pulpit to elevate Scott’s 11-Point Plan to Rescue America, which he attacked as an “extreme” vision for the country.Many Republicans, including Senate minority leader Mitch McConnell have distanced themselves from the proposal. Downplaying the disagreement, the White House said it was the only comprehensive plan Republicans have put forward for the midterm elections. “This is not the last you’ve heard from us about chairman Scott’s tax plan that will raise taxes,” Jen Psaki, in her last week as White House press secretary, said.In a withering response, Scott called Biden unfit for office and challenged him to a debate.“Joe Biden can blame me all he wants,” the Florida senator said. “Here’s the truth: he’s the president of the United States, Democrats control the House of Representatives and the Senate. Democrats’ agenda is hurting American families and no amount of spin can change that.”A polling memo by Navigator Research, a Democratic messaging group, underscores why the party is seizing on Scott’s plan. It found that the proposal, when described as a plan that would “raise taxes” on millions of working class families and potentially threaten entitlement programs like Social Security and Medicare,” was deeply unpopular, even among Republican voters. And when contrasted with the Democrats economic agenda, voters’ views of Biden and his party on the economy improved.Isaiah Bailey, an advisor to Navigator Research, said it was incumbent on Democrats to make voters aware of these dueling visions for the country.“Unpopular positions are only politically meaningful when they permeate public consciousness,” Bailey said. He added that Democrats demonstrate that they are trying to deliver on their promises, even in the face of Republican opposition and procedural challenges like the filibuster.“Democrats really need to look like fighters,” he said.Maria Cardona, a veteran Democratic strategist who has urged her party’s leaders to talk more about the economy with more urgency and empathy, agreed.“For way too long Republicans have gotten away with blaming Democrats, pointing the finger and talking about Biden’s policies,” she said.With so much at stake this fall, including the push to ban abortion if the supreme court overturns Roe v Wade, as is expected, Cardona said it was imperative that Democrats draw a clear contrast with the opposition party.“There’s no question in my mind that we are not taking advantage of the moment in time, when handing over control of Congress to the Republican party is more dangerous for the future of our democracy and for the well-being of our citizenship than it has been in at least a generation,” she said.Surveys suggest that voters broadly understand – and support – the decision to impose sanctions on Russia, even if there are consequences for their pocketbooks. And many cite the ongoing pandemic as a leading cause of the nation’s economic woes. Yet there are signs dissatisfaction with the president’s economic leadership is hardening.“It does not blunt their desire to have you produce a solution,” said Patrick Gaspard, president and chief executive of the Center for American Progress thinktank in Washington. “They’re clear on what the causation is but also clear that they want this president, this Congress, to solve the problem.”A president’s ability to tackle inflation is limited. That power rests largely with the Federal Reserve.Wendy Edelberg, director of The Hamilton Project and a senior fellow in Economic Studies at the Brookings Institution, said there are indications that the president’s efforts to shore up the nation’s supply chains are taking root.One of the best steps the White House can take, she said is to “not create additional hurdles for monetary policymakers”.“Let monetary policy run its course,” she said, adding that on that front she believes “they’re doing the right things there”.Aiming to cool the economy, the central bank recently approved the sharpest rise in interest rates in more than 20 years. But Jerome Powell, fresh from being confirmed by the Senate for a second term as chair of the Federal Reserve, acknowledged the challenge of attempting to control inflation without tipping the US economy into a recession.Ahead of Biden’s visit to Illinois, the White House received a dash of good news in an otherwise discouraging report: inflation slowed for the first time in months, though the annual rate remained high. But speaking at a fundraiser in Chicago later that day, Biden acknowledged the difficulty of the task ahead.“It’s going to be hard because inflation is going to scare the living hell out of everybody,” he said. “We have a problem we have to deal with. In the meantime, we can’t take our eye off all that could happen if we do not prevail.”David Smith contributed to this reportTopicsJoe BidenUS economyBiden administrationRepublicansUS politicsnewsReuse this content More

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      US inflation rate slows but remains close to 40-year high

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      US inflation rate slows but remains close to 40-year highConsumer price index reveals costs rising by a monthly rate of 0.3% in April, down from 1.2% in March, the first fall since August 2021 Price rises slowed in the US in April but the annual inflation rate remained close to a 40-year high, leaving many Americans struggling to afford necessities including food, shelter and fuel.The latest consumer price index (CPI) figures – which measure a broad range of goods and services – showed prices rising by a monthly rate of 0.3% in April, down from 1.2% in March, the first fall since August 2021.But it is still too early to say whether inflation has peaked. At 8.3% the annual rate of inflation in April was down from 8.5% in March but remains at a level unseen since the 1980s. Over the year the CPI’s food index increased 9.4%, the largest 12-month increase since April 1981. The so-called core-price index – which excludes the volatile categories of food and energy – increased 0.6% on the month, up from March’s 0.3% gain.The figures come as the Federal Reserve is moving to sharply increase interest rates in an attempt to bring prices back under control. The pace of rate rises, and fears that they may trigger a recession, have spooked investors and sent stock markets reeling.Soaring demand and a lack of supply thanks to the pandemic have led to price rises across a broad swath of goods and services. Air fares are up 40% over the last three months. A booming house market has made housing unaffordable for many Americans, especially people of color, and 49% of people recently told Pew Research that affordable housing is a large problem in their community.Randall Kroszner, an economics professor at the University of Chicago and former Fed governor, said the sharp rise in core inflation would worry the Fed. “That is where you look for evidence that inflation is becoming entrenched,” he said.Kroszner said global issues including the war in Ukraine and China’s Covid woes had combined with rising rates to deliver a “one-two punch” to the US economy. He believes the chances of the US entering a recession have risen and that the housing and jobs markets may be the next to suffer.“I’m generally an optimist but this is challenging,” he said.The rising cost of living has become a leading political issue as the US prepares for November’s midterm elections. Rising prices have battered Joe Biden’s approval ratings. This week an Investors Business Daily/TIPP poll found that Biden’s approval had fallen to 39%, approaching his previous record low of 38% set in February, and confidence in the US economy was close to an eight-year low.On Tuesday, Biden said his administration was doing all it could to tackle inflation. “I want every American to know that I’m taking inflation very seriously,” he said in remarks from the White House. “It’s my top domestic priority.The Biden administration has made attempts to bring down prices. In March the White House announced plans to release up to 1m barrels of oil a day from the strategic reserve, in an attempt to dampen high gasoline prices exacerbated by the war in Ukraine. But gas prices remain elevated at a national average of $4.37 a gallon compared with $2.96 a year ago, according to AAA.Republicans have blamed Biden’s stimulus programs for rising prices, a claim he disputes. ​​ The president said his policies had “helped not hurt” the nation’s economic outlook.MIT economics professor Kristin Forbes said the US recovery had shown the US economy lacked skilled workers in industries where demand for jobs was high, pushing up wages – a problem that also afflicted the UK in the wake of the pandemic.The former Bank of England policymaker told a committee of MPs in the UK parliament that she expected inflation in the US to fall, especially once increases in borrowing costs feed through into more expensive mortgages and loans.However, she said the UK faced an acute inflationary spiral that would continue into the autumn because Britain was the only country affected by all six drivers of global inflation. Inflation is running at 7% in the UK, but is forecast by the Bankto exceed 10% later this year. She highlighted the impact on the UK of higher energy prices, a falling exchange rate, trade restrictions that pushed up goods prices, a decade of modest inflation going into the pandemic, expectations among businesses and consumers of much higher inflation in a year’s time and a tight labour market, forcing wages higher.“The UK is the only country to tick every box with inflation pressures coming from all six areas,” she said.TopicsUS economyInflationEconomicsUS politicsBiden administrationnewsReuse this content More

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      ‘What am I going to do?’: soaring prices fuel calls for US government to step in

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      ‘What am I going to do?’: soaring prices fuel calls for US government to step inLarge corporations are passing on higher-than-needed price increases to customers under the cover of inflation, war and supply chain squeezes, experts say Outside a Dollar Tree in Detroit, Latasha Holmes lamented the rising cost of toilet paper, beverages, food and other items she had just purchased. The price increases, she said, were forcing her to choose among necessities for her and four kids.“What am I going to do? Prices are up everywhere, all over town,” she said. “I can’t afford everything.”But while Holmes struggles, Dollar Tree thrives. The retailer increased its prices by 25% as profits jumped 269% between 2019 and 2021, and its profit margins widened. Shareholders won too. The company also announced a stock buyback program worth $1bn that will deliver cash from those price increases to its investors.Dollar Tree and other large corporations are juicing profits by passing on higher-than-needed price increases to customers like Holmes under the cover of inflation, war and supply chain squeezes, consumer advocates and economists say. They are calling for the federal government to take bold steps to rein in the companies.Revealed: top US corporations raising prices on Americans even as profits surgeRead moreAmong proposed prescriptions are price controls, improved price fixing rules, commodity market intervention, stock buyback regulation and antitrust enforcement. Ranged against those proposals are a powerful business lobby and a divided Congress that seems unable to pass major legislation.“There are reasons to have a profit incentive, but there are also reasons to have an overall regulatory body that can say, ‘This is actually profiteering … while everyone is hurting,’” said Krista Brown, a policy analyst with the American Economic Liberties Project.A Guardian analysis of 100 top corporations’ Securities Exchange Commission filings found a median increase of 49% in profits between the most recent quarter and the same quarter two years ago, pre-pandemic. It shows companies have largely shielded themselves from inflationary pain by passing most or all of their increased costs on to customers via price hikes.So far, the federal government’s most visible attempt to address inflation has been to increase interest rates, rates look set to rise again this week. But the Guardian’s data suggests such a measure may miss an important mark. Raising rates effectively takes money out of consumers’ pockets to cool the economy.If corporate profits are contributing in a meaningful way, then raising rates would only reduce the amount of money people have to spend on products and services for which prices are still going up.“That would mean you’re exacerbating this dynamic instead of doing anything to help it,” said Isabella Weber, University of Massachusetts Amherst economist.Instead, limited and targeted price controls could work for essentials like bread, she said, but stressed those would have to be coupled with a bailout plan for negatively affected companies.“Increased prices for basic items like bread can exert enormous pressure on wages” and send inflationary ripples throughout the economy, Weber added. Though price controls are controversial and generally regarded as a leftist idea, the last president to enact them was Richard Nixon, who imposed a 90-day freeze on wages and prices to address inflation in 1970. Price controls were also enacted during and following the second world war, when, again, supply chain issues and pent up demand led to soaring prices.Table of 100 US companies’ profit growthBut price rises are not the only issue critics would like to see the Biden administration address. Others, like Groundwork Collective’s executive director, Lindsay Owens, have called for a ban or new restrictions on stock buyback programs. Joe Biden’s 2023 budget proposes prohibiting executives from selling their stock three to five years after enacting a buyback program.“The other big winner besides the shareholders in excess cash that’s going to buybacks are the executives,” Owens said. “They announce the buybacks, their stock prices soar, then they sell their shares and there are a number of ways to make this work better.”The Guardian’s analysis found companies’ buyback programs over the last 15 months totaled $544bn. That cash could have been reinvested to keep prices down, or increase workers’ wages, consumer advocates say.Others levelled accusations of price fixing and gouging. The American Economic Liberties Project is helping draft legislation that would make it easier for businesses to sue companies for price fixing by making private corporate communications more accessible. As of now, only 3% of price fixing cases make it to trial, Brown said.“Reinvigorating price fixing laws and going after price gouging in moments like this, where a war or Covid are used as excuses for companies to raise rates just because they can, could help a lot,” she added.Fixing is especially a problem in highly consolidated industries, consumer advocates say. Companies have benefited from “decades long under-enforcement of consolidation laws”, added Martin Schmalz, an Oxford University economist.Just four companies control most of the US beef industry, four airlines control about 80% of domestic passenger traffic, Walmart accounts for the majority of grocery sales in the majority of US states, the list goes on and on.And it’s not just the companies that have outsized control. Large investors also a role to play.Schmalz pointed to the Investment Company Act, which limits investment funds to holding no more than 10% of a corporation’s securities. Vanguard on average holds 10% of all S&P 500 companies, Schmalz research has found, but it is not violating the law because companies within its fund family own the shares, not Vanguard itself. But Vanguard still executes the voting rights of more than 10% of shareholders.“The law is written at the fund level so technically speaking they don’t violate the law, but they are violating the spirit of the law,” Schmalz said.Economists and attorneys working on US antitrust law have proposed prosecuting mutual funds like BlackRock or Vanguard that own large stakes in multiple companies in the same sector. Such shareholders can exert an outsize influence on companies’ pricing decisions, Schmalz said, and he noted Investment Company Act language that specifically targets this scenario: “The national public interest … is adversely affected … when investment companies [have] great size [and] excessive influence on the national economy.”Schmalz said there’s little discussion among policymakers to address that specific issue.Biden’s budget includes over $220m for antitrust enforcement, and bills that would break up large tech companies have bipartisan Senate and House support.The Guardian’s analysis highlighted the commodity market boom as companies trading in grain, steel, mining, wood, rubber, meat, oil, homes and other materials generally recorded higher profit increases than companies across the rest of the economy.However, many commodity companies operate in what analysts characterize as “feast and famine” cycles in which they’re unprofitable for years before cashing in. The pendulum has swung for many commodity companies in the day’s economic climate.“When there’s a chance to raise prices when markets are tight, companies are going to do so,” said Skanda Amarnath, executive director of the Employ America thinktank. “It’s some part opportunistic, some part greed, some part rationality, some part a response to uncertainty.”The oil industry highlights the dynamic. After seven years of low returns, it’s restricting supply to boost profits regardless of how that hits Americans at the pump. Earnings calls transcripts reveal executives eagerly “putting shareholders first” and an investor who described industry-wide supply suppression “one of the delights of this earnings season”.Bar chart of the monthly change in US wages since January 2019Bringing volatile commodity prices under control would require curtailing uncertainty and building supply chain resiliency, analysts who spoke with the Guardian say. That could involve some degree of government intervention to cut down on risk by establishing a floor on commodity prices. The government could do that by effectively becoming the “buyer of last resort” when material prices dip below a certain level.But the government should also set a ceiling above which it collects profits, said commodities analyst Alex Turnbull. He suggested the federal government set up what’s effectively a state reserve board.Turnbull pointed to lithium, which, amid increased demand for EV batteries and supply chain squeezes, jumped from $5,000 a ton to $45,000 a ton last year. Higher prices impact the pace of the clean energy transition, and the government could hypothetically set a $10,000 a ton floor price and $25,000 a ton ceiling that would limit the volatility, Turnbull said.The federal government could also increase stockpile reserves of products like grain or oil that are released when prices spike.“That sends the message ‘You should plant more wheat because if it goes really bad, you might have a lean year or two, but we will buy your wheat. But on the other hand don’t expect to buy a Lamborghini if you’re a farmer in Iowa because when prices get too high we’ll be out there selling the shit out of our stockpiles,’” Turnbull said.Stabilization may also spur investment in raw material production that’s risky, which would further bolster markets against future supply shortages. Few companies have built steel plants in recent years because the prices have been so low, Turnbull noted, and now the world is short on steel.Though price caps are “not politically palatable” Bespoke Investment analyst George Pearkes said, the government could take a number of measures to steer futures curves and markets for raw commodities like oil and wheat.“Something in between where there are strategic efforts to smooth volatility, and provide the private sector with enough certainty that they can make decisions is a lot more compelling,” he said.Spikes in investment for some commodities, like nickel, that are essential to the clean energy transition, can be a positive development, Turnbull said. Mining companies limped through the several years leading up to the pandemic, but reaped windfalls over the last year.“People say ‘Nickel producers are making too much money’, well, they didn’t make money for a decade,” Turnbull said. “At some point, somebody has to put money down to dig holes because people aren’t going to drive to the middle of fucking nowhere with a truck and work for free.”Another force in some commodity price spikes: Wall Street speculation. Commodity markets were once heavily regulated because they deal in raw materials that underpin the economy. An influx of investment capital followed the commodity markets’ deregulation about 20 years ago, and some are now treated like speculative assets similar to bitcoin, said Rupert Russell, who authored a book on the topic.The consequences of economy-addling commodity price spikes are real, he adds, pointing to the 2010 grain prices that helped trigger the Arab spring uprising in Tunisia.Supply chain back ups, inflation and war have generated “radical uncertainty” in which no one knows how much commodities are worth, because the prices are no longer anchored, Russell told the Guardian. He echoed others’ calls for stronger government intervention to tamp down the casino-like mentality.“Once there’s not just radical uncertainty but markets dominated by speculators, algorithmically driven speculation that is just kind of responding to headlines, then you’re going to get that kind of Bitcoin-esque volatility,” he said.But experts say there are few viable short-term solutions, and long-term measures don’t help Holmes. That’s forcing her to think about getting another job to survive as she feels the pressure of an economic system stacked against her.“I don’t want to. I’ve got four kids to take care of, but what am I supposed to do?” she asked.TopicsUS economyInflationEconomicsUS politicsUS income inequalityInequalityfeaturesReuse this content More

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      The Unholy Alliance Between the US Security Apparatus and Big Tech

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      The Fair Observer website uses digital cookies so it can collect statistics on how many visitors come to the site, what content is viewed and for how long, and the general location of the computer network of the visitor. These statistics are collected and processed using the Google Analytics service. Fair Observer uses these aggregate statistics from website visits to help improve the content of the website and to provide regular reports to our current and future donors and funding organizations. The type of digital cookie information collected during your visit and any derived data cannot be used or combined with other information to personally identify you. Fair Observer does not use personal data collected from its website for advertising purposes or to market to you.As a convenience to you, Fair Observer provides buttons that link to popular social media sites, called social sharing buttons, to help you share Fair Observer content and your comments and opinions about it on these social media sites. These social sharing buttons are provided by and are part of these social media sites. They may collect and use personal data as described in their respective policies. Fair Observer does not receive personal data from your use of these social sharing buttons. It is not necessary that you use these buttons to read Fair Observer content or to share on social media. More

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      US inflation climbed to 8.5% in March, highest rate since 1981

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      US inflation climbed to 8.5% in March, highest rate since 1981War in Ukraine drives up energy costs as figures strengthen expectations Federal Reserve will raise interest rates next month Prices in the US climbed at their highest rates since 1981, rising 8.5% over the year to the end of March as the war in Ukraine drove up energy costs for Americans, the labor department announced on Tuesday.The latest Consumer Price Index (CPI) – which measures the prices of a basket of goods and services – comes after the index rose by 7.9% in the year through February, the fastest pace of annual inflation in 40 years.Driven up by continuing supply chain problems, soaring demand and rising energy prices, inflation is now at levels unseen in the US since Ronald Reagan took the White House from Jimmy Carter.Biden heads to Iowa to unveil plan to reduce gas prices as inflation soars – liveRead moreThe price increases are broad – with the cost of rent, gas and food causing particular hardship for lower income Americans and represent a major blow to the Biden administration, already facing tough odds of retaining control of Congress in November’s midterm elections.Soaring gas prices were the main driver of the rise. The gasoline index rose 18.3% in March and accounted for over half of all the items’ monthly increase. Gas prices have begun to fall, in a sign that some economists have argued may suggest inflation has reached its peak.The food index rose 1% in March compared with February, and is up 8.8% compared with the prior 12 months. Canned fruit and vegetable prices rose 3.8% from February to March, rice prices rose 3.2%, potatoes 3.2% and ground beef 2.1%.Andrew Hunter, senior US economist at Capital Economics, said energy prices would come down in the months ahead and there were signs that price pressures appear to be moderating.But, he added, the figures were likely to strengthen the Federal Reserve’s plan to increase interest rates as it struggles to tamp down inflation.“With Fed officials sounding more hawkish by the day, the March data won’t change their plans to up the pace of rate-hikes to 50 basis points per meeting from next month. Even so, it does support our view that, having been slow to realize that the initial surge wasn’t transitory, Fed officials are now being a bit too pessimistic about how quickly inflation will drop back,” he wrote in a note to investors.The White House warned ahead of the report it was expecting a bad set of figures. On Monday White House press secretary Jen Psaki told reporters that the labor department’s previous report had not included the majority of the jump in oil and gas costs caused by the Kremlin’s invasion of Ukraine.“We expect March CPI headline inflation to be extraordinarily elevated due to Putin’s price hike,” Psaki said.There are two versions of the CPI, one that includes all the prices consumers face and another – core CPI – which excludes food and energy prices, which tend to be more volatile. Core prices climbed 6.5% in the year through March, up from 6.4% in the year through February.The core index did suggest the pace of inflation was slowing, rising 0.3% from February, compared with 0.5% the prior month.Psaki said the administration expected a wide disparity between the two measures because of the soaring price of gas. Nationally the average price of a gallon of gas is now $4.11, compared with $2.86 a year ago, according to AAA.“At times, gas prices were more than one dollar above pre-invasion levels, so that roughly 25% increase in gas prices will drive tomorrow’s inflation reading,” Psaki said.Joe Biden addressed the latest inflation figures at a speech in Des Moines, Iowa, where he announced plans to use more ethanol in US fuel during the summer in an attempt to tackle high gas prices. “I am doing everything in within my executive power to bring down the Putin price hike,” he said. TopicsUS economyInflationEconomicsUS politicsnewsReuse this content More