Playbook PM: Why today’s inflation numbers hit different

From: POLITICO Playbook - Tuesday Apr 12,2022 05:06 pm

Apr 12, 2022

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The brutal inflation numbers that the White House was bracing for landed this morning, and they were, in fact, quite bruising.

Here are the toplines, via AP’s Paul Wiseman:

What the CPI report said: “The Labor Department said Tuesday that its consumer price index jumped 8.5% in March from 12 months earlier.”

The month-over-month numbers: “The government’s report also showed that inflation rose 1.2% from February to March, up from a 0.8% increase from January to February.”

The context: “The March inflation numbers were the first to capture the full surge in gasoline prices that followed Russia’s invasion of Ukraine on Feb. 24.”

WHAT THESE NUMBERS MEAN: CNBC’s Jeff Cox has the download, noting that the 8.5% CPI reading was “above even the already elevated Dow Jones estimate for 8.4%.” But “excluding food and energy, the CPI increased 6.5%, in line with the expectation.”

“The data reflected price rises not seen in the U.S. since the stagflation days of the late 1970s and early ’80s. March’s headline reading in fact was the highest since December 1981. Core inflation was the hottest since August 1982. However, core inflation appeared to be ebbing, rising 0.3% for the month, less than the 0.5% estimate,” Cox writes.

Related read: WaPo has a helpful explainer of all the inflation data that has led to today’s numbers: “Five charts explaining why inflation is at a 40-year high”

THE POLITICAL IMPACT: WaPo’s Jeff Stein and Evan Halper write about President JOE BIDEN’s efforts to project confidence and curb some of the spiking figures — and how it’s playing among the electorate ahead of this year’s midterms.

“The White House’s attempts to deflect blame may prove insufficient politically. As recently as this fall, senior Democrats were still expressing cautious optimism that inflation could fade from the national discourse by the 2022 midterm elections and in time for the party to recover its footing. That optimism is fading. …

“‘I think the economic backdrop is as dark as it has been since the start of the administration,’ said MARK ZANDI, an economist whose analyses are frequently cited by the White House. ‘It’s just a very, very dark and deep problem. … There’s nothing more pernicious on the collective psyche than having to pay more. And it’s only set to get worse.’”

“AARON KLEIN, a former Treasury official now at the Brookings Institution, a Washington-based think tank, emphasized that substantial uncertainty surrounds the next few months that make it hard to decipher whether inflation will ease ahead of the midterms. ‘We don’t know when war in Europe is going to end; we don’t know when covid is going to be adjusted for; we don’t know when the global supply chain will adjust to the periodic covid flare-ups that seem to be a hallmark of the new normal,’ Klein said. ‘We just don’t know.’”

Good Tuesday afternoon.

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LATEST FROM BROOKLYN — “At least 16 people were injured, 10 of them by gunfire, in the subway in Brooklyn during the Tuesday morning rush, officials said, after a man released a canister of smoke and opened fire on an N train,” per the NYT . “The Fire Department said that five people were in critical condition, but none of them had suffered life-threatening injuries. The violent episode came amid a heightened fear of public safety as New York City struggles to recover from the pandemic.”

“This is an active-shooter situation right now in the city of New York,” Gov. KATHY HOCHUL said at a press conference, per the NY Post . The gunman is still at large.

WAR IN UKRAINE

— “The United States is willing to consider sending more weapons systems that require additional training to Ukraine, according to a senior defense official, based on ongoing conversations between the two militaries,” CNN’s Oren Liebermann reports.

— “President VLADIMIR PUTIN said peace talks with Ukraine are ‘at a dead end’ and vowed to continue Russia’s invasion as Kyiv accused Moscow of sabotaging the negotiations,” per Bloomberg. His message for the West: “The Russian president said he hoped that ‘good sense’ will ultimately prevail in the West, leading to the easing of sanctions. He also said that while rising inflation related to the crisis ‘inevitably’ will cause political problems for Western leaders, Russian public support for his policy remains strong.”

—MARINA OVSYANNIKOVA, the Russian journalist who protested the war on a live TV broadcast on Russian state television, “has been hired by the German media company Die Welt,” writes WaPo’s Kim Bellware and Andrew Jeong.

— Former President BARACK OBAMA weighed in on the war, telling NBC’s Al Roker in an interview that “what we’ve seen with the invasion of Ukraine is [Putin] being reckless in a way that you might not have anticipated eight, 10 years ago,” though he added: “The danger was always there.”

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ALL POLITICS

AFTERNOON READ — N.Y. Mag’s Olivia Nuzzi has an interesting look at NICHOLAS KRISTOF’s failed gambit for Oregon governor, speaking to the former NYT columnist at length about the process. The piece is rife with fascinating quotes, but this passage seemed to sum things up the best: “‘Running for office does involve — “self-confidence” is a polite way of putting it,’ Kristof said. He paused when he said the word polite, as if to politely emphasize that the question (I had asked about ‘hubris’) was not. Anyway, it was no more hubristic, he said, than the journalism he produced about foreign affairs and far-flung conflicts and cultures that he was not of. ‘Bouncing into a country and, in 800 words, telling them how to do a better job,’ he said with a laugh.

“There is a version of the myth of Nicholas Kristof in which he plays the fool, riding into town on his white horse only to get pulled over by a traffic cop. But there is another version in which the fools are the people who would never risk appearing foolish just to live by their political ideals. A second former Times colleague put it this way: ‘What a spectacular leap and fail, but good for him — and I mean that. Why not be a starry-eyed optimist who secretly hopes you can just break the residency rules?’”

THE NEW FIGHT ON LGTBQ RIGHTS — NYT’s Katie Glueck and Patricia Mazzei dive deep on the recent spate of Republican-led efforts to pass restrictive LGBTQ-focused laws in state legislatures across the country and what these debates will mean for each party in the midterms. “From state capitals to schools, Americans are increasingly at odds over issues of identity and language, who can play on which youth sports teams and what can and cannot be said in classrooms. These issues are pitting governors against their state legislatures, business leaders against conservative activists and, in some places, Republicans against one another, while Democrats calibrate their responses and some transgender people feel increasingly isolated.”

NY LT. GOV. ARRESTED — New York Lt. Gov. BRIAN BENJAMIN “surrendered early Tuesday morning to face a federal bribery conspiracy indictment in connection with a scheme to funnel fraudulent donations to a previous campaign,” NYT’s William Rashbaum and Nicholas Fandos report . “The indictment, the result of an investigation by the F.B.I. and the U.S. attorney for the Southern District of New York, accused Mr. Benjamin of conspiring to direct state funds to a Harlem real estate investor in exchange for orchestrating thousands of dollars in illegal campaign contributions to Mr. Benjamin’s unsuccessful 2021 campaign for New York City comptroller.”

BEYOND THE BELTWAY

GUNS AND ROAD RAGE — NYT’s J. David Goodman reports on a concerning trend of spiking “shootings and killings attributed to rage on the road” across the country in the past year. “These eruptions of sudden violence — a man in Tulsa, Okla., firing repeatedly after an argument at a red light; a Georgia driver shot while on a family road trip — are not unique to any part of America, among a population that is increasingly on edge and carrying guns.”

REPORT CARD — The National Urban League this morning “released its annual report on the State of Black America,” AP’s Michael Warren reports. The big takeaway: “Its findings are grim. This year’s Equality Index shows Black people still get only 73.9 percent of the American pie white people enjoy. While Black people have made economic and health gains, they’ve slipped farther behind whites in education, social justice and civic engagement since this index was launched in 2005. A compendium of average outcomes by race in many aspects of life, it shows just how hard it is for people of color to overcome systemic racism, the civil rights organization says.”

MEDIAWATCH

STREAMING STRUGGLES — CNN’s entry into the streaming wars appears to be on rocky footing in its early going, leading to questions about its future in the space. “Investment and projections for CNN+ are expected to be cut dramatically in response to a low adoption rate,” Axios’ Sara Fischer reports . “The news giant was initially planning to invest around $1 billion in the service over the next four years. Hundreds of millions of dollars are expected to be cut from that original investment total. To date, around $300 million has been spent on the subscription service, which includes a sizable marketing investment. The new company's leadership team still has yet to decide the ultimate fate of CNN+.”

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PLAYBOOKERS

SPOTTED: Second gentleman Doug Emhoff and Justice Stephen Breyer participated in the Shakespeare Theatre Company’s “Mock Trial Series” on Monday night at Sidney Harman Hall. Pic of Emhoff

SPOTTED at a discussion for Donald Ritchie and Terry Birdwhistell’s new book, “Washington’s Iron Butterfly: Bess Clements Abell, An Oral History” ($35), hosted by the White House Historical Association on Monday night at the Decatur House: Stewart McLaurin, Ann Stock, Desiree Rogers, Rickie Niceta, Amy Zantzinger, Capricia Marshall, Cathy Fenton, David Ferriero, Mary Claire Murphy, Lalo Valdez, Robert Gazzola, Peter McCarthy, Patrick Madden, Sally Bedell Smith, Tyler Abell, and Lyndon and Debra Abell.

MEDIA MOVE — Michelle Bocanegra is joining WNYC as a reporter. She most recently was a New York education reporter for POLITICO.

TRANSITION — Mindy Overbaugh is now director of operations at J.A. Green & Company. She previously was deputy chief of staff to the acting CFO/ASA at the Commerce Department.

WEDDING —Ellison Barber, an NBC News and MSNBC correspondent, and Andy Tongren, lead singer of Young Rising Sons, got married March 31 in an old manor along the coast of Scotland just days after she returned from Poland, where she was reporting on the war in Ukraine. The two met through a mutual friend after Andy saw a report of Ellison’s during the D.C. blizzard of 2016 for WUSA9. Pic … Another pic

WELCOME TO THE WORLD — CNN’s Phil Mattingly and his wife Chelsea, an account executive at Twilio, “welcomed their fourth child together, daughter Paige Catherine Mattingly, on Monday, April 11,” they announced in People Magazine.