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U.S. inflation accelerated last month as the cost of groceries, gas, and used cars rose, a trend that will likely underscore the Federal Reserve’s resolve to delay any further interest rate cuts.The consumer price index increased 3% in January from a year ago, Wednesday’s report from the Labor Department showed, up from 2.9% the previous month. It has increased from a 3 1/2 year low of 2.4% in September.The figures show that after inflation steadily declined in 2023 and for much of last year, it has remained stubbornly above the Fed’s 2% target for roughly the past six months. Elevated prices created a major political problem for former President Joe Biden. President Donald Trump pledged to reduce prices in last year’s campaign, though most economists worry that his many proposed tariffs could at least temporarily increase costs.Excluding the volatile food and energy categories, core consumer prices rose 3.3% in January compared with a year ago, up from 3.2% in December. Economists closely watch core prices because they can provide a better read of inflation’s future path.Inflation also worsened on a monthly basis, with prices jumping 0.5% in January from December, the largest increase since August 2023. Core prices climed 0.4% last month, the most since March 2024.Inflation often jumps in January as many companies raise their prices at the beginning of the year, though the government’s seasonal adjustment process is supposed to filter out those effects.Later Wednesday, Federal Reserve Chair Jerome Powell will testify before the House Financial Services Committee, where he will likely be asked about inflation and the Fed’s response to it. The Fed raised its benchmark rate in 2022 and 2023 to a two-decade high of 5.3% to combat inflation. With inflation down significantly from its 9.1% peak in June 2022, it cut its rate to about 4.3% in its final three meetings last year.Early Wednesday, Trump said on social media that interest rates should be lowered, “something which would go hand in hand with upcoming Tariffs!!!” Yet the tick up in consumer prices makes it less likely the Fed will cut rates anytime soon.Fed officials are mostly confident that inflation over time will head lower, but they want to see further evidence that it is declining before cutting their key rate any further. The Fed’s rate typically influences other borrowing costs for things like mortgages, auto loans, and credit cards.Inflation’s recent uptick is a major reason the Federal Reserve has paused its interest rate cuts, after implementing three of them last year. On Tuesday, Fed Chair Jerome Powell said “we do not need to be in a hurry” to implement further reductions in testimony to the Senate Banking Committee.The Trump administration’s tariff policy could lift prices in the coming months. Trump on Monday imposed 25% taxes on steel and aluminum imports, and has pledged to impose more tariffs. Economists at Goldman Sachs forecast that yearly core inflation would fall almost a full percentage point, to 2.3%, by the end of this year, absent any import duties. But they expect tariffs will raise end-of-year inflation to 2.8%.On Tuesday, Fed Chair Powell acknowledged that higher tariffs could lift inflation and limit the central bank’s ability to cut rates, calling it “a possible outcome.”But he emphasized that it would depend on how many imports are hit with tariffs and for how long.“In some cases it doesn’t reach the consumer much, and in some cases it does,” Powell said. “And it really does depend on facts that we we haven’t seen yet.” Christopher Rugaber, AP Economics Writer
Category:
E-Commerce
I first learned that my American identity was a matter of public perception rather than personal history about a decade ago. I was at journalism school in New York City and meeting with a career counselor. You should print U.S. citizen at the top of your résumé, she said as soon as I sat down. I did not understand. I was born and brought up in the United States. At the time, my very short résumé consisted of college in the U.S., two years of federal government service, and one year teaching English in Malaysia under the auspices of a Fulbright grant, which also requires U.S. citizenship. Look at you, the counselor continued. Its not obvious. The light started to dawn on me. Ethnically, Im half-Chinese-Indonesian and half-Indian, which is to say Im as brown as a chocolate-chip-cookie. Ive been mistaken for Hispanic, Black, and a dozen varieties of Asian. Still, I speak English with an American twang, and in Malaysia my students had cooed over how I sounded like Miley Cyrus. (I decided it was a compliment.) Whats more American than being a racial mutt with a valley girl accent? In the end, my practical side won out. The counselor was an immigrant herself and it was clear that she had my best interests at heart. I decided getting a job was more important than any tender feelings I had about race and identity, and printed U.S. citizen on my résumé right under my name. It turned out to be good advice. At one of my first job interviews, and editor hemmed and hawed and then came out straight with it. Look, she said. You seem great, but I need to ask. Are you cleared to work in the U.S.? I pointed to the U.S. citizen under my name. Oh, she said. I missed that. Later, I checked with a white friend who was half-French and half-American. Shed grown up in South America, Africa, and Southeast Asia, and then completed her undergrad degree in the U.K. Had anyone asked her for her citizenship during job interviews? I asked. Never, she said. Despite my skin color, or perhaps because of my career counselors advice, I did manage to land a job. On the first day, I brought in my passport and gave it to HR. A few hours later, I received a noteHR had some questions. I need to see proof of citizenship, the man said. Hed somehow managed to ignore the cover of my passportwhich read United States of Americaand missed the front page with all of my identifying information including birthplace, and skipped to the very middle where my Malaysian visa was buried. Are you Malaysian? he asked. It’s not just about feelings You could argue these matters of perception arent important in the large scheme of thingsand for a long time thats what I told myself. So what if my feelings were hurt? I had deeply talented colleagues who were struggling to get hired because they didnt have U.S. citizenship. At the end of the day, HR eventually apologized and I kept the job. I had the birthright and the papers. Yet, it turns out these questions do matter because they get to the heart of who the government wants to stay and who people are willing to protect. While President Trump is ostensibly only going after people who are illegally in the United States, fundamentally hes asking a question thats been simmering in the background of the American psyche for both Democrats and Republicans: Who is an American? Who deserves access to job opportunities and government benefits? The answers to the question who belongs in America is complicated. According to new data from Pew Research Center, about 52% of Americans (whoever we are) believe this has to do with where you are born, 79% say it has to do with language (bad news for naturalized citizens like my parents who speak with heavy accents), and 70% say it has to do with culture and traditionwhich is a tricky statement for a colonized country made up of immigrants. Discourse aside, were already seeing some answers at play. In the wake of Trumps executive order, which attempts to rescind birthright citizenship from children born in the United States to parents who are not citizens or green card holders, Native Americanswho are indubitably more American than anyone else in the countryare getting harassed by U.S. Immigration and Customs Enforcement (ICE). There are also reports of citizens getting swept up in ICE raids: Between 2015 and 2020, over 650 citizens were detained in such raids. This becomes even more pressing when you consider that Missouri state Senator David Gregory has introduced a bill that would give people a $1,000 reward for turning in illegal aliens. However, there is no punishment for turning in a legitimate citizen. If this bill should come to pass, the question becomes who seems like they dont belong? Its tempting to rage (and believe me I have) at the current administration, but there are larger questions all of us need to confront. Were in a country made up of immigrants, built ostensibly for immigrants, where the population is becoming increasingly browner and race relations are becoming worse, not better, according to survey data from Pew Research. What will it take for us to stop linking American identity to skin color? What will it take for us to treat all Americans equally? Should Missouris bill come to pass, I doubt people will be turning in white people, although they do make up about 20% of illegal immigrants. There is no way to tell just by looking at someone whether they are an American citizen or legally here, but I do know who will be looked at with suspicion: me and people who look like me.
Category:
E-Commerce
President Donald Trump’s tariffs on steel imports this week could wreak havoc on American auto manufacturing, industry leaders say. The moves align with the Trump administration’s aggressive global trade agenda and ambitions to strengthen U.S. industry, but they could have an inverse effect. On March 12, all steel imports will be taxed at a minimum of 25%, the result of two orders the president signed Monday that also include a 25% tariff on aluminum. That could have a serious impact on domestic auto companies including Ford, GM and Stellantis and make these companies’ vehicles more expensive for the nation’s car buyers. Tariffs on crucial products coming from outside of the U.S. places pressure on domestic sourcing of the materials, experts say. The basic rules of supply and demand could drive up costs. Steel producers have to find ways to increase capacity, and aluminum and steel might be in short supply in the short term, said Sam Fiorani, analyst at AutoForecast Solutions, which studies the industry. Producing vehicles has a lot of moving parts, and raising the price of what is among the most important components of the vehicle is only going to raise the price of an already expensive product. The average transaction price for a new vehicle in the U.S. in January was $48,641, according to auto-buying resource Kelley Blue Book a hefty investment for an inflation-sensitive consumer. Tariffs such as these do nothing to enhance the automotive industry directly, Fiorani said. To Ford CEO Jim Farley, Trump’s early actions in office which also include 25% tariffs on goods coming from Mexico and Canada, although delayed by a month are already challenging the Dearborn, Michigan, automaker. The Trump administration has also upended electric vehicle policy put in place under former President Joe Biden, targeted EV charging infrastructure, as well as directed review of vehicle emissions and fuel economy rules all of which could play a role in automaker plans to decarbonize. Already, auto companies have pulled back some electrification plans amid shifts in the market. Most of the three automakers steel and aluminum already comes from North America, Ford included; CFO Sherry House noted Tuesday during a Wolfe Research conference that 90% of the company’s steel comes from the U.S., and that aluminum is also not that competitive. Still, Farley said Tuesday during the same conference that So far what were seeing is a lot of cost, and a lot of chaos.” Farley said: The reality is, though, our suppliers have international sources for aluminum steel. So that price will come through and it may be a speculative part in the market where price would come up because the tariffs are even rumored. A spokesperson for Ford deferred to Farley’s comments when reached out to for additional comment. A spokesperson for Stellantis declined to comment. GM did not respond to request for comment before publication. Were concerned about the downstream effects on consumer products like automobiles, said Glenn Stevens Jr., executive director of MichAuto, a state auto industry association. The concern whenever you have a scenario like this, and Im not an economist, but I follow this very closely, is that the short-term benefits of higher prices for steel and aluminum for domestic production are outweighed by a decrease in downstream effects. The auto industry, its a very competitive business,” he added. “You cant change supply chains very quickly and you certainly cant change manufacturing locations very quickly. Trump also placed tariffs on steel and aluminum in 2018 during his first stint in the White House. Automakers had to revise their financial plans for the year as their outlooks fell as a result, according to Fiorani. Industries like automotive have built their entire financial plan based on sourcing products where they can; locally, if its possible, globally, if it makes the most sense, he added. Interfering with the natural order of things slows down the progress and raises costs. ___ Associated Press reporter Isabella Volmert contributed to this report from Lansing, Mich. ___ Alexa St. John is an Associated Press climate solutions reporter. Follow her on X: @alexa_stjohn. Reach her at ast.john@ap.org. ___ Read more of APs climate coverage at http://www.apnews.com/climate-and-environment ___ The Associated Press climate and environmental coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find APs standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org. Alexa St. John, Associated Press
Category:
E-Commerce
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