Happy Thursday and welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. Subscribe here: digital-release.thehill.com/newsletter-signup.
Today’s Big Deal: Consumer prices keep rising — and we’ve got new data to show it. We’ll also look at another drop in jobless claims and the hurdles ahead for a congressional stock trading ban.
But first, Tom Brady may soon be honored by Congress.
For The Hill, we’re Sylvan Lane, Aris Folley and Karl Evers-Hillstrom. Reach us at slane@digital-release.thehill.com or @SylvanLane, afolley@digital-release.thehill.com or @ArisFolley and kevers@digital-release.thehill.com or @KarlMEvers.
Let’s get to it.
Annual inflation reaches 7.5 percent
Consumer prices rose 7.5 percent annually by the end of January, according to data released Thursday by the Labor Department, the fastest rate since February 1982.
The Labor Department’s consumer price index (CPI), which tracks inflation, rose on an annual basis for the sixth consecutive month and above the 7.2 percent increase projected by a consensus of economists.
Consumer prices also rose 0.6 percent in January, the same rate as in December, after falling for three consecutive months.
The background:
- The U.S. has faced high inflation since mid-2021 as a surprisingly strong rebound from the coronavirus recession also kindled price increases.
- While the U.S. economy added more than 6 million jobs last year, grew 5.7 percent and saw consumer spending return to pre-pandemic levels, the rush of demand collided with severe supply and labor shortages, shipping bottlenecks and other pandemic-related constraints.
What’s next:
- The Federal Reserve has all but formally confirmed it would raise interest rates in March from the current baseline, which was set near zero as the pandemic wracked the global economy in 2020.
- While the Fed typically hikes or cuts interest rates 0.25 percentage points at a time, some economists expect the Fed to consider a steeper 0.5 percentage point increase next month.
Sylvan has more here.
HIGHER PRICES
Here’s where prices rose and fell the most over last year
The price of gas, cars and food skyrocketed over the last year, while other products and services saw smaller increases and a handful of goods dropped in price.
Here’s a look at where prices have gone the most over the last year, according to the Labor Department’s latest report:
- Gasoline prices rose 40 percent between January 2021 and January 2022, while used car and truck prices increased 40.5 percent and new vehicle prices rose by 12.2 percent.
- The price of food rose by 7 percent, with the price of meat and eggs swelling by 13.6 percent and 13.1 percent respectively.
- The cost of furniture and bedding increased by 17 percent, the price of window coverings rose by 16.2 percent and the cost of major appliances grew by 9.9 percent.
Smartphones were one of the few products that decreased in price, seeing a 13.3 percent reduction.
The Hill’s Mychael Schnell recaps the price hikes here.
UNEMPLOYMENT CLAIMS DROP
Unemployment claims drop for third straight week
New applications for jobless aid declined by 16,000 last week, dropping for the third consecutive week, according to figures released by the Labor Department on Thursday.
For the week ending Feb. 5, seasonally adjusted initial claims reached 223,000, the data found. The four-week moving average was 253,250 last week, 2,000 less than the revised average from the previous week.
- In November, jobless claims decreased to levels not seen since before the onset of the pandemic. However, those numbers turned around in the weeks that followed, as applications for jobless aid rose while the omicron variant fueled a surge in coronavirus infections.
- Last month, the country’s unemployment rate remained around 4 percent, despite job gains, according to Labor Department data. At the same time, data released last month by the Census Bureau found that millions of people missed work at the start of the year because they, or a person they cared for, came down with the illness.
The Labor Department also recorded 6 million Americans in January who reported being unable to work last month due to a pandemic-related closure or lost business. The figure is nearly twice the level of 3.1 million the agency recorded in December.
Aris has more here.
UNSURE SENATORS
Stock trading ban gains steam but splits Senate GOP
Proposals to ban members of Congress from trading individual stocks are gaining major momentum in the House, but some Republicans in the Senate are raising early red flags, arguing that some of the leading proposals go too far or would be too difficult to implement.
Senate Republicans are also voicing concerns that restricting stock ownership will put the most burden on colleagues with less money and could dissuade otherwise well-qualified candidates from running for office.
- Sens. Chuck Grassley (R-Iowa), Roger Wicker (R-Miss.), Roy Blunt (R-Mo.) and Susan Collins (R-Maine) are among the lawmakers that expressed skepticism about the proposal.
- Sen. Josh Hawley (R-Mo.), who introduced his own bill to ban congressional stock trading, lamented that while most Republican voters support the measure, that popularity isn’t reflected in the Senate GOP conference.
Those comments come after Speaker Nancy Pelosi (D-Calif.), who has come under scrutiny over her husband’s stock trades, and Senate Majority Leader Chuck Schumer (D-N.Y.), backed a congressional stock trading ban, giving the push increased momentum.
Alexander Bolton has more on the GOP fissure here.
Good to Know
President Biden called on the Senate to pass his currently-stalled Build Back Better legislation, touting that it would lower prescription drug prices, a popular issue ahead of the midterm elections.
Biden traveled to the Virginia district of vulnerable Democratic Rep. Abigail Spanberger, saying that drug prices are “outrageously expensive” and calling for action. He also sought to address inflation concerns by arguing his package would “bring down the cost for average families,” and also noted it would “not increase the debt,” a concern of Sen. Joe Manchin’s (D-W.Va.).
Here’s what else we have our eye on:
- Sen. Joe Manchin (D-W.Va.) sounded the alarm on Thursday after the Labor Department announced that annual inflation had risen at its fastest rate in four decades, emphasizing that Congress should not add “more fuel to an economy already on fire.”
- General Motors announced it had to cancel two shifts at its Michigan-based production plant due to the ongoing trucking protests in Ottawa, Canada.
- The Senate Judiciary Committee unanimously advanced a bill aimed at holding tech platforms responsible for the spread of child sexual abuse material, despite widespread opposition from digital rights and industry groups.
- The mayors of Minneapolis and St. Paul lifted their vaccine-or-test requirements for restaurants and bars, citing the drop in COVID-19 cases and hospitalizations.
- Apple announced that it will be releasing a series of “advancements” to its AirTag product in response to complaints about the devices being used to stalk people, as well as other criminal activity.
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.