New inflation data comes out tomorrow and it’s not looking good for anybody. We’ll also look at an uptick in jobless claims and rising gas prices.
But first, a preview of tonight’s hearing conducted by the Jan. 6 committee.
Welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. For The Hill, we’re Sylvan Lane, Aris Folley and Karl Evers-Hillstrom. Someone forward you this newsletter? Subscribe here.
Biden, economy imperiled by predicted inflation spike
Another spike in monthly price growth is posing a serious threat to the U.S. economy — and President Biden’s political prospects.
New consumer price index (CPI) inflation data to be released Friday is expected to show consumer prices rising at a faster rate between April and May, due largely to surging oil prices and their ripple effects throughout the economy.
Shocks to the global food supply driven by the war in Ukraine and a sharp increase in summer travel and energy usage are other factors likely to push inflation even higher.
After months of downplaying inflation, inaccurately predicting its decline and blaming price growth on a wide range of outside forces, Biden and his top economic officials are coming to terms with the challenge in front of them. But Treasury Secretary Janet Yellen admitted Tuesday it would be “virtually impossible” for the U.S. to shield itself from one of the main forces behind high inflation: skyrocketing oil prices.
Sylvan explains here.
Weekly jobless claims rise by 27,000
New jobless claims jumped higher during the first week of June, according to data released Thursday by the Labor Department.
In the week ending June 4, initial applications for unemployment insurance totaled 229,000, a gain of 27,000 from the previous week’s revised total of 202,000 claims.
The U.S. has seen an average of 215,000 claims per week over the past four months, rising from an average of 207,000 claims in May.
Jobless claims have remained low for most of 2022 as employers struggle to fill a record number of open jobs from a workforce still smaller than it was before the onset of the coronavirus pandemic in March 2020.
With roughly two open jobs for every unemployed worker, businesses have avoided laying off employees already on payroll and have seen a steady stream of consumer spending to keep business relatively strong.
New jobless claims data is often volatile and subject to steep revisions, so last week’s jump in claims will not likely trigger alarms among economists. Even so, policymakers are carefully watching the labor market for signs of a slowdown as the Federal Reserve ramps up its fight against inflation.
Sylvan has more here.
UN warns of food catastrophe
The United Nations is warning of the potentially devastating impact of Russia’s invasion of Ukraine on global access to food.
U.N. Secretary-General António Guterres said on Wednesday during remarks in New York that “for people around the world, the war, together with the other crises, is threatening to unleash an unprecedented wave of hunger and destitution.”
“Food prices are at near-record highs. Fertilizer prices have more than doubled, sounding an alarm everywhere,” Guterres continued.
Russia is blocking access to the Black Sea, the main trade channel connecting Ukraine with its trade partners in the Middle East, forcing Ukraine to use trains and river ports to transport its massive supplies of wheat, corn and sunflower oil.
Ukrainian President Volodymyr Zelensky said Thursday that “millions of people may starve” if the blockade continues.
The Hill’s Monique Beals has more here.
Average gasoline price surpasses $5: GasBuddy
The average price of gasoline in the U.S. surpassed $5 per gallon for the first time ever on Thursday, according to gas price site GasBuddy.
The latest high price comes after months of rising prices and is likely to add to a political headache from the Biden administration even though presidents only have limited control over the price of the fuel.
GasBuddy, in a statement, attributed price increases to high seasonal demand — people tend to drive more in the summer — and pandemic-related supply constraints.
The Hill’s Rachel Frazin has more here.
Good to Know
More than three-quarters of chief financial officers said that they expect the U.S. will go through a recession during the first half of next year, according to a new CNBC–CFO Council survey.
The survey, published on Thursday, found that 77 percent of respondents said the country will experience a recession in the first half of 2023 due to the ongoing issue of inflation.
Here’s what else we have our eye on:
Two-thirds of Americans expect the economy to get worse over the next year, according to a new Washington Post-George Mason University Schar School of Policy and Government poll.
A coalition of nearly 900 small-business owners, executives and entrepreneurs on Thursday pressed senators to expand background checks on gun sales, citing the damage gun violence inflicts on their communities.
That’s it for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. We’ll see you tomorrow.