On The Money — Wholesale inflation sees record rise
Wholesale prices hit a record 11.2 percent annual increase last month, as rising inflation continues to take hold of the US economy. We’ll also look at data showing rent prices reached a new high last month, and administration plans to extend the federal mask mandate for transportation networks amid a coronavirus surge fueled by a new subvariant.
But first, see why lawmakers are urging federal agencies to cut ties with a top management consulting firm.
Welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. For The Hill, we’re Sylvan Lane, Aris Folley and Karl Evers-Hillstrom. Someone forward you this newsletter? Subscribe here.
Annual wholesale inflation rises record 11.2 percent
Wholesale prices jumped 1.4 percent in March from February to hit a record 11.2 percent annual increase, as widespread inflation affecting the US economy shows no signs of letting up.
The numbers released on Wednesday follow an 8.5 percent annual rise in consumer prices announced Tuesday, the highest increase since December 1981.
- More than half of the overall wholesale increase in March is due to a 5.7 percent jump in prices for energy, with a 20-percent jump in the price of diesel fuel in particular.
- On the service side, prices moved up 0.9 percent in March following a 0.3 percent jump in February. Most of the service increase is due to transportation and warehousing services, which climbed 5.5 percent.
- While economists agree that pandemic-induced supply chain disruptions lie at the heart of inflation now felt globally, some also point to the fiscal and budgetary response of the government in the pandemic’s aftermath.
The context: The Producer Price Index published by the Department of Labor’s Bureau of Labor Statistics measures the price of goods and services that businesses pay to each other, while the Consumer Price Index (CPI) measures retail prices that consumers pay directly.
While the CPI is considered the benchmark for inflation measurements, wholesale metrics reflect conditions in the supply chains and production pipelines where disruptions have been driving inflation since the beginning of the pandemic.
The Hill’s Tobias Burns has more on this here.
RENT’S GOING UP
Record-setting rent prices spiking nationwide
Rent prices in February hit a new high with a national average of $1,792 in the 50 largest metropolitan areas in the country, marking an over 17 percent increase from this time last year, according to a report.
The report from Realtor.com indicated that the spike in rent prices followed a notable dip in 2020 and into 2021 amid COVID-19-related rent deals. But now an increase in prices has been seen and felt in cities across the country.
- Since last year, rents are up nearly 24 percent in Manhattan, 22 percent in Nashville and 19 percent in Seattle, and are also increasing in more affordable cities.
- Experts say that the pandemic slowed construction and increased costs, and pent up demand from groups such as young adults who perhaps spent the early months of the pandemic at home with their parents skyrocketed.
- In addition, more people who may have considered buying a home have looked to rent due to spiking home prices.
The Hill’s Monique Beals has more here.
TSA extending travel mask mandate for two weeks
The Biden administration will extend the federal mask mandate for all transportation networks through May 3, 15 days after it had been set to expire amid a new coronavirus surge fueled by the omicron BA.2 subvariant.
The Transportation Security Administration’s mask mandate for travel on airplanes, in airports, on buses and on rail systems was set to expire on April 18. The two-week extension is from an order by the Centers for Disease Control and Prevention, based off the rise in cases from BA.2 since early April.
- White House press secretary Jen Psaki told reporters on Wednesday that the CDC needs more time to assess the BA.2 variant’s potential impact.
- U.S. airlines have been pressuring the Biden administration to lift the mandate, arguing that air travel is safer than going to a restaurant or bar.
The Hill’s Alex Gangitano has more here.
ROLLING BACK RULES
Delta drops $200 surcharge for unvaccinated employees
Delta Air Lines is ending its $200 monthly surcharge on unvaccinated employees enrolled in the company’s health care plan, CEO Ed Bastian said Wednesday.
“We’ve dropped as of this month the additional insurance surcharge given the fact that we really do believe that the pandemic has moved to a seasonal virus, and any employees that haven’t been vaccinated will not be paying extra insurance costs going forward,” Bastian said during an earnings call.
- The airline imposed the surcharge in November as a way to encourage employees to get vaccinated without mandating the shot.
- Carriers are gradually rolling back restrictions on their employees, noting that they need all the workers they can get to accommodate the recent surge in demand for travel.
Karl has more here.
Good to Know
President Biden announced Wednesday that his administration would authorize $800 million in additional security assistance to Ukraine, including artillery, helicopters and armored personnel carriers.
Biden said in a statement that he briefed Ukrainian President Volodymyr Zelensky on the new assistance in a phone call earlier Wednesday.
Here’s what else we have our eye on:
- A report by the Labor Department that inflation in March rose by 8.5 percent compared to a year ago is setting off new alarm among Democrats that their Senate majority is in serious trouble.
- Senate Majority Leader Charles Schumer (D-N.Y.) told activists on Wednesday that President Biden and his senior advisers are warming up to the idea of forgiving student debt, insisting they are closer to pulling the trigger “than ever before.”
- E-cigarette company Juul will pay $22.5 million to settle a lawsuit brought by Washington state that accused it of marketing its products to underage customers, state Attorney General Bob Ferguson (D) announced.
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.