Playbook PM: Inflation stays high, but glimmers of hope emerge

From: POLITICO Playbook - Friday Apr 29,2022 05:48 pm

Apr 29, 2022

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Including food and energy costs, prices rose 6.6% year over year in March — the highest increase since January 1982 — spurred in part by Russia’s invasion of Ukraine. | Peter Dejong, File/AP Photo

Could this be the inflation apex? Americans — and the White House — will certainly hope so, because the latest dump of economic data released today shows prices still at sky-high levels. But there are glimmers of hope in the numbers, providing fresh optimism that this may be the peak.

Let’s break down the new information we got this morning about how Americans are spending, earning and feeling the squeeze:

— Prices: The Fed’s preferred measure of core inflation jumped 5.2% year over year (and 0.3% on a monthly basis) in March. There’s no getting around the fact that U.S. prices remain quite high: When you include food and energy costs, the rate was 6.6% — the highest increase since January 1982 — spurred in part by Russia’s invasion of Ukraine. Headline inflation almost doubled from the previous month. The high number likely won’t change the Fed’s plan to raise interest rates.

But, but, but: The 5.2% increase was a tick below February’s 5.3%, and below economists’ 5.3% prediction for this month.

The upshot: Inflation may finally be peaking, and some experts say it could fall a bit faster over the course of the year than was previously expected. More from CNBC

— Wages: The first quarter saw spending on worker compensation surge 4.5% year over year, the largest such increase in records back to 2001 and a half-percentage-point jump over the previous quarter, the Labor Department said today. The jump left workers better off with higher pay and benefits. But it also helped drive inflation nationwide, mitigating the salutary effects of more money in the pocket. More from the WSJ

— Consumer spending: Here’s a surprise: Prices may be high, but Americans are still shelling out. Consumer spending rose in March by 0.2% adjusted for inflation (or by 1.1% not adjusted). Economists had expected a decline. “The gain was driven by services, while merchandise buying dropped, signaling a shift in consumer behavior as pandemic concerns wane,” Bloomberg’s Olivia Rockeman writes.

Speaker NANCY PELOSI knows the score: She batted down reporters’ questions about Republicans at her presser this morning, insisting that Democrats had to focus on kitchen-table issues. Touting legislation to target “price gouging” by oil and gas companies as well as the Competes Act, Pelosi said, “All of this is about lowering prices.”

Still, Pelosi got in one jab at House Minority Leader KEVIN MCCARTHY over new audio that showed he was worried about far-right lawmakers inciting violence against other members of Congress after Jan. 6. “They can’t say on the one breath, ‘I’m afraid that they’re going to cause danger to other members,’ and at the same time complain about my having magnetometers on the floor of the House.”

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THE WHITE HOUSE

HIT THE ROAD, JOE — The president is frustrated and ready to get aggressive in the midterms, CNN’s Isaac Dovere and Kevin Liptak report. JOE BIDEN has been “letting loose” in private recently, with the White House annoyed at other Democrats (Sen. ELIZABETH WARREN is name-checked) as well as journalists who they say haven’t held the GOP to account. Biden is reportedly “eager to unleash on the GOP ahead of the midterm elections, but worries that doing so could endanger his last remaining hopes for bipartisan legislative wins.”

— Worth flagging: Biden’s expected to announce a reelection bid by next spring, they report.

STUDENT LOAN LATEST — The latest reporting on White House deliberations over erasing some student loan debt: “The White House is considering forgiving at least $10,000 in student loans per borrower through executive action,” Bloomberg’s Nancy Cook, Jarrell Dillard and Emma Kinery scooped. That would align with his campaign pledge, but could also provoke backlash from the left and the right (in opposite directions).

ANOTHER ONE — White House comms director KATE BEDINGFIELD has Covid-19 with mild symptoms, having tested positive this morning, she said. Bedingfield hasn’t had what’s defined as recent close contact with Biden, per her statement.

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JAN. 6 AND ITS AFTERMATH

HALL OF HANNITY — In their newest download from thousands of MARK MEADOWS texts the Jan. 6 committee has obtained, CNN’s Jamie Gangel, Jeremy Herb, Elizabeth Stuart and Brian Stelter dive into Meadows’ several dozen texts with SEAN HANNITY and other Fox News hosts between the 2020 election and the Capitol insurrection. The messages trace Hannity’s arc from backing lies about election fraud to distancing himself from the fringiest elements. “Throughout the logs, Hannity both gives advice and asks for direction, blurring the lines between his Fox show, his radio show and the Trump White House.”

Among the texts drawing attention: Hannity appearing to propose business ventures with Meadows: “if this doesn’t end the way we want, you me and Jay are doing 3 things together. 1- Directing legal strategies vs Biden 2- NC Real estate 3- Other business I talked to Rudy. Thx for helping him.” And MARIA BARTIROMO sending Meadows questions she planned to ask DONALD TRUMP pre-interview.

JMART/BURNS LATEST — During the insurrection, Sen. MITT ROMNEY (R-Utah) called Utah Gov. SPENCER COX “to ask him to dispatch the state police to his home outside Salt Lake City,” Jonathan Martin and Alex Burns report in their new book, “This Will Not Pass,” per Insider’s Nicole Gaudiano and Bryan Metzger.

ALL POLITICS

AD WARS — The DSCC is laying out its initial ad reservations this fall, spending $33 million in the Arizona, Georgia, Nevada, New Hampshire, Pennsylvania and Wisconsin races, Burgess Everett reports. The biggest sums will go to protect Sens. CATHERINE CORTEZ MASTO (Nev.), MARK KELLY (Ariz.) and RAPHAEL WARNOCK (Ga.). The NRSC’s ad reservations are expected next month.

THE LIMITS OF TRUMPISM — A wave of Republican insurgents backed by Trump or running in his image are trying to take down incumbent GOP governors in primaries. But just about all of them seem to be falling flat, NYT’s Reid Epsten reports. JIM RENACCI has stopped fundraising in Ohio. Similar challenges in Alabama, Georgia and Idaho haven’t found much traction, while one in Nebraska remains a bit more unsettled. The resilience of the sitting governors “stems, in some cases, from voters’ desire for more moderation in their state executives than in their members of Congress,” Epstein writes. “But it is also clear evidence of the enduring power of incumbency.”

2022 WATCH — Democratic gaslighting or Republican lies? The L.A. Times’ Seema Mehta and Anh Do have an interesting report on the recent ugly turn of a California congressional race pitting GOP Rep. MICHELLE STEEL against Democrat JAY CHEN. After Chen said Steel, a Korean immigrant, was a “lousy speaker” and “you kind of need an interpreter to figure out exactly what she’s saying,” Republicans decried Chen’s remarks as racist. Democrats countered that Chen was referring to Steel’s convoluted answers, not her accent, and accused the GOP of “disinformation.”

It’s a surprising battle between two Asian American candidates in a district created to give Asian Americans more political power. But Mehta and Do find many voters care more about the candidates’ substantive plans than the recent mudslinging.

CONGRESS

PAGING JOE MANCHIN — Sen. JOSH HAWLEY (R-Mo.) told WSJ’s Alex Leary, Lindsay Wise and Emily Glazer that he wouldn’t rule out higher corporate tax rates, and Sen. MARCO RUBIO (R-Fla.) sounds open to the prospect as well. It’s part of a broader article about the divide between traditionally pro-business Republicans and the more populist breed who are more willing to take on Disney, corporate stock buybacks and what they call elitist big companies. One person who’s not too concerned: GROVER NORQUIST, who says the Hawley types can mouth off because they don’t have the votes. “It’s a freebie, because you’re not firing with real bullets.”

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WAR IN UKRAINE

FALLOUT IN D.C. …

— The view from 1600 Penn: The White House is trying to figure out how to handle the G-20 summit in November amid news today that Russian President VLADIMIR PUTIN will attend and Russia won’t be kicked out, CNN’s Kevin Liptak reports. “Officials said there wouldn’t likely be a decision in the near-term as they weigh the downsides of skipping the event and ceding the table to Russia and China.”

— The new GOP: WaPo’s Ashley Parker, Marianna Sotomayor and Isaac Stanley-Becker have a broad examination of the Republican Party’s growing isolationist/America First bent, with some interestingly mixed results. Almost a third of the House GOP recently voted against a bill supporting NATO — but the reporters find that many of those no votes still strongly back NATO, they just disagreed with provisions in the bill. On the other hand … Rep. BARRY LOUDERMILK (R-Ga.) says he disliked that the bill made mention of opposing “illiberalism,” because he found it to be too close to opposing conservatism.

LATEST ON THE GROUND …

— The U.K. is sending 8,000 troops to Eastern Europe, one of the country’s biggest deployments in decades. More from The Guardian

— Naming and shaming: Ukraine released the names of 10 Russians it says are suspected of torturing people and committing war crimes in Bucha. More from Radio Free Europe/Radio Liberty

— RFE/RL journalist VIRA HYRYCH was killed in Russia’s latest attack on a Kyiv apartment block, where rescuers are still making their way through debris, reports WSJ’s Isabel Coles.

POLICY CORNER

CLIMATE FILES — The Commerce Department’s tariff investigation of Chinese solar panel companies has all but ground the American solar industry to a halt, postponing or killing hundreds of projects, NYT’s David Gelles reports.

COME TO YOUR CENSUS — NYT’s Michael Wines digs into this week’s news that many detailed 2020 census results won’t be released until more than a year from now: “It is the longest delay of census data in memory — as much as two years past a normal release date — and it is causing consternation among some who rely on those numbers to plan for the future.”

THE PANDEMIC

VACCINE LATEST — A senior FDA leader told WaPo’s Laurie McGinley and Carolyn Johnson that regulators won’t postpone approval of one Covid-19 vaccine for kids under 5 just to wait and review it alongside another. PETER MARKS said the Moderna shot, if approved, could be available for young kids by June.

VALLEY TALK

THE MUSK EFFECT — An ELON MUSK takeover of Twitter could change the company’s presence in Washington, where he’s upstaged his Tesla and SpaceX government affairs staffers and become known for a “brash, often disrespectful approach,” Emily Birnbaum reports.

Frequently upending his lobbyists’ and PR people’s plans, Musk would play a very different role than JACK DORSEY or other tech execs like MARK ZUCKERBERG and TIM COOK, who are generally pretty hands off on policy. His arrival at Twitter could bring to an end a period when it was known as being more open with Congress than other Big Tech companies. “Still, some argue that Musk isn’t as hands-on or overbearing as his reputation.”

— And Musk’s extensive business ties to China could also lead to complications for Twitter, NYT’s Steven Lee Myers and Paul Mozur report from San Francisco.

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BEYOND THE BELTWAY

BORDER TALES — “In the trauma wards of this city’s major hospitals, patients from the border have arrived every day with gruesome injuries: skull fractures, broken vertebrae and shattered limbs, their lower extremities twisted into deranged angles,” WaPo’s Nick Miroff writes in the lede of a new dispatch from Trump’s border wall in San Diego. New data reveals that Trump’s moves to make the wall harder to climb increased falling deaths from 0 to 16 since 2019, and prompted a fivefold increase in visits to a nearby trauma ward.

TRUMP CARDS

THE INVESTIGATIONS — Following the news that the grand jury empaneled for the Manhattan DA’s Trump investigation will end, NYT’s Ben Protess, Jonah Bromwich, William Rashbaum and Lananh Nguyen report more details indicating that Trump won’t be indicted: Multiple key witnesses haven’t heard anything in months. A crucial prosecutor isn’t focused on Trump anymore. And the office’s Trump “war room” has been disbanded.

PLAYBOOKERS

OUT AND ABOUT — The White House hosted a screening of HBO’s “The Survivor” on Thursday, Holocaust Remembrance Day, with Biden addressing the crowd in the first lady’s garden including Ben Foster, who portrays Holocaust survivor Harry Haft, and director Barry Levinson.SPOTTED: Harry’s son Alan Haft, producers Mattie Leshem and Jason Sosnoff, Casey Bloys, Tammy Haddad, Stuart Eizenstat, Rabbi Jacob Blumenthal, Ann Lewis, Rabbi Deborah Lipstadt, Daniel Lubetzky, Susan Wojcicki and David Zweibel.

— SPOTTED at a party to welcome Dave Urban to the BGR Group on Thursday night: Joint Chiefs of Staff Chair Gen. Mark Milley, Sen. Dan Sullivan (R-Alaska), Reps. Glenn “G.T.” Thompson (R-Pa.), Byron Donalds (R-Fla.), Dan Meuser (R-Pa.), Mark Green (R-Tenn.), Brett Guthrie (R-Ky.), Mike Kelly (R-Pa.) and Lloyd Smucker (R-Pa.), Haley Barbour, Bob Wood, Jonathan Swan,Josh Dawsey, Alex Azar, Gen. Dan Hokanson,Franco Nuschese, Mitch Rose, Ashley Gunn, Tim Pataki, David Drucker and Kraig Siracuse.

— SPOTTED at the Hispanic Federation’s annual gala, the first since the start of the pandemic, which raised $3 million at the American Museum of Natural History in New York City on Thursday: New York Gov. Kathy Hochul, NYC Mayor Eric Adams, Senate Majority Leader Chuck Schumer, Sen. Bob Menendez (D-N.J.), Frankie Miranda, Lin-Manuel Miranda, Camila Cabello, Carlos López Estrada, Kelly Marie Tran and NYC Council Speaker Adrienne Adams.

— SPOTTED at “Carrying the Torch: A Climate Reception with U.S. Olympians,” hosted by the American Conservation Coalition and Protect Our Winters Action Fund at Arc’teryx in CityCenter on Thursday evening: Reps. Mariannette Miller-Meeks (R-Iowa), Garret Graves (R-La.), John Curtis (R-Utah), David Valadao (R-Calif.) and Blake Moore (R-Utah) and Olympians Jessie Diggins, Wiley Maple and Troy Murphy.

— SPOTTED at a birthday celebration for MSNBC’s Jesse Rodriguez at Cafe Milano on Thursday night: Michael LaRosa, Adrienne Elrod, Alex Hornbrooke, Greg Martin, Susanna Quinn, Marc Adelina and Tommy McFly.

WHITE HOUSE DEPARTURE LOUNGE — Cameron Trimble is leaving the White House, where he’s been director of digital engagement, per The Source’s Shawn Grant.

MEDIA MOVES — Cathleen Decker will be editor of WaPo’s America desk. She most recently was campaign editor. Announcement … Anna Gawel is now managing editor at Devex. She most recently was managing editor of the Washington Diplomat and a part-time journalist for WTOP.

TRANSITION — Little Rock, Ark., Mayor Frank Scott Jr. was installed today as the new president of the African American Mayors Association, the youngest ever in the position.

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