USA Outlook, November 21 to 25, 2022

Weekly newsletter November 21 to November 25

November 21, 2022

November 22, 2022

Inflation and Thanksgiving: Expect to pay 20% more for turkey and all the trimmings The consumer price index rose at a 7.7% annual rate in the October inflation report, but most concerning to America's home chefs: Food prices were up 11% from last year when inflation was already hitting uncomfortable levels.

Last week, the American Farm Bureau Federation's 37th annual Thanksgiving dinner cost survey showed prices have jumped 20% based its volunteer shoppers' reporting.

Photo: MEDIANEWS GROUP VIA GETTY IMAGES

Oil prices plunge: gas prices could soon fall below $3 per gallon The price of West Texas Intermediate slipped more than 5% Monday to less than $75.50 per barrel—its lowest level since early January—while international benchmark Brent crude also tumbled 5% to roughly $82.50 per barrel.

September's inflation report listed four dozen items with "largest ever" annual increases since the Bureau of Labor Statistics started tracking them. Twenty of those largest-ever increases were foods or food categories. Looking at that same basket in October, all but one had a double-digit increase from last year and eight had new "largest ever" increases in October.

Butter and margarine 34%, frozen vegetables 17%, flour and prepare flour mixes 24%, uncooked poultry (including turkey) 17%, canned fruits 19% and frozen/refrigerated bakery products 19%.

Following the decline, Patrick De Haan, head of petroleum analysis at GasBuddy, said if oil markets hold at current levels, prices at the pump should fall “nearly coast-to-coast into the heavily traveled Thanksgiving holiday”—potentially even pushing the national average to less than $3 by around Christmas.

With oil prices tumbling more than 18% this month, the nation’s average gas price has fallen in tandem, shedding nearly 12 cents from a week ago to $3.64 per gallon.

The price of Brent crude has fallen more than 30% since its high of about $130 per barrel in March.

Further fueling Monday's decline, Saudi Arabia and other key oil-producing nations are reportedly discussing a deal to boost oil production.

Graphic: USA Today Source: https://www.forbes.com/sites/jonathanponciano/2022/11/21/oil-prices-plunge-aseconomic-woes-intensify-heres-why-that-means-gas-prices-could-soon-fall-below3-per-gallon/?sh=1301a70222ab

Source: https://www.usatoday.com/in-depth/graphics/2022/10/24/thanksgiving-turkeypotatoes-holiday-meal-prices-up-inflation/10540388002/

November 23, 2022

November 23, 2022

US Freight rail strike could cost US economy $1 billion in first week With a crippling freight rail strike looming in December, leaders of four railroad unions and management of the major US freight railroads are at the negotiating table.

A US freight rail strike could cost the US economy $1 billion in the first week of the strike, according to a new analysis from the Anderson Economic Group.

In the first three days alone, US workers and consumers could see potential losses of a quarter billion dollars as a transit strike involving rail is one of the most expensive and disruptive events that can happen to the economy.

Photo: BRANDON BELL/GETTY IMAGES

Black Friday Seen Kicking Off a Bumpy Holiday Shopping Season for Retailers Retailers offered promotions earlier than normal this year to clear through excess inventory. But executives voiced caution and repeatedly referred to economic uncertainty. And the cost of unloading piled-up inventory, while still dealing with inflation and staffing challenges, is expected to put pressure on profits.

Add it all up and the US economy is looking at the bleakest holiday outlook in recent memory, with sales that will struggle to top the record-setting levels of the past few years. Apparel companies across the board are conservative about expectations for the fourth quarter, citing an uncertain environment and declining sales activity in late October and early November.

Overall spending this holiday season is seen growing 2.5% from a year ago, compared with 8.6% last year and a whopping 32% in 2020, according to data from Adobe Inc. Those figures aren’t adjusted for inflation, meaning that sales could be down by volume. The challenges are especially acute for brands that cater to lower and middle-income consumers, who have become more cautious when it comes to spending on discretionary items.

Source: https://www.bloomberg.com/news/articles/2022-11-23/black-friday-seen-starting-abumpy-holiday-shopping-season-for-retail-industry?leadSource=uverify%20wall

“Economic impacts caused by a national railroad strike include lost wages for the industry’s workers and production slowdowns due to non-delivery of critical components in some vulnerable industries,” the report from Anderson Economic Group said.

Those industries could include ethanol, retail, and agriculture. The Retail Industry Leaders Association is calling on policy makers to intervene to “avoid a selfinflicted economic disaster.”

“Calculations show a first-day impact of approximately $60 million, including $30.9 million for lost freight, $3.8 million for long-term passenger rail disruption and $25 million in lost railroad industry wages,” the analysis revealed. It does not include indirect effects or losses on other industries or income losses for rail company investors and managers.

Photo: AP Photo/Gene J. Puskar Source: https://edition.cnn.com/2022/11/23/economy/us-freight-railroad-strikecosts/index.html

November 24, 2022

Photo: Mandel Ngan/AFP/Getty Images

Biden rails against access to assault weapons after recent spate of shootings President Joe Biden said Thursday that he would work with Congress to “try to get rid of assault weapons” after a recent spate of shootings in the US. “The idea (that) we still allow semiautomatic weapons to be purchased is sick, it’s just sick. It has no social redeeming value, zero, none. Not a single, solitary rationale for it,” Biden told reporters during a brief gaggle outside the Nantucket Fire Department in Massachusetts, where he greeted first responders.

Asked whether he would try to take action on guns, the president said, “I’m going to try. I’m going to try to get rid of assault weapons.” When pressed on whether he would try to do so during the lame duck session, he said, “I’m going to do it whenever – I’ve got to make that assessment as soon as I get in and start counting the votes.”

Congress returns next week with a jam-packed to-do list in the lame duck session, focused primarily on the must-pass government funding bill, as well as other priorities. But any action on gun legislation – particularly the assault weapons ban Biden has repeatedly called for – does not have the votes to pass. And the reality of a divided Congress in next year’s session makes it highly unlikely that anything will pass over the next two years.

Source: https://edition.cnn.com/2022/11/24/politics/biden-assault-weapons-massshootings/index.html