It would require action on the part of Congress to suspend the federal gas tax in order to bring about an 18.4-cent decrease in the cost per gallon.
In light of the fact that high gas prices are having a significant impact on holiday travelers and shoppers in the United States, Vice President Joe Biden stated on Monday that he is considering supporting a one-time exemption from the federal gas tax.
Biden told reporters in Rehoboth Beach, Delaware, where the first couple is spending the Juneteenth holiday weekend, that he is “Yes, I’m considering it, I hope to have a decision based on the data I’m looking for by the end of the week.”
The cost of a gallon of gas could be reduced by 18.4 cents if the federal gas tax was suspended, but this would need action from Congress, which is not likely given how little traction the notion has gained.
The state taxes on gasoline, which range from less than a penny in Alaska to a national high of 53.9 cents per gallon in California, would not be impacted in any way by this proposal.
Highways receive around 85 percent of the funding from federal gas taxes, while mass transit receives the remaining 15 percent. These funds are used to support the nation’s transportation infrastructure. If the tax on gasoline were temporarily suspended, it would make driving less expensive for motorists and might even make things cheaper to buy as a result of the reduction in the cost of transportation. However, this also means that there will be less money available to spend on highways.
According to AAA, the national average price of a gallon of gas is currently $4.98. This marks the first time in the previous week that prices have fallen below $5 per gallon. Despite the fact that gas prices are determined on a global scale – as a result of supply and demand, in addition to commodity futures markets – the administration of President Joe Biden is under a lot of pressure to take action to reduce the cost of living for Americans, who are having to pay not only higher prices for gas but also higher prices for other goods.
Even if President Biden has given the order to release oil from the Strategic Petroleum Reserve, this is only a short-term solution to a problem that will continue to exist for a longer period of time.
Biden has placed some of the responsibility for the rise in prices on Russia’s invasion of Ukraine and the epidemic; however, he also blames oil business executives for contributing to the problem. According to the president, the price of a gallon of gas is far more than it was back when the price of a barrel of oil was comparable to what it is right now. In addition, he has stated on multiple occasions that oil firms are currently sitting on more than 9,000 unused oil drilling permits that were issued by the federal government.
The President of the United States stated that representatives of his administration will meet this week with executives from oil companies to discuss the problem; however, the President himself will not be present at the talks.
A tax holiday on gasoline was referred to by Energy Secretary Jennifer Granholm on Sunday as “one of the instruments” available to the government for lowering costs.
Granholm stated that “It’s certainly one of the things the president is evaluating.” “I know this is what’s been happening in many states as well. Honestly, the whole array of tools is still being pressed. He’s used the biggest tool that he has, but he’s obviously very concerned about this continued upward pressure on prices”
Biden also mentioned that he was examining the possibility of providing Americans with petrol rebate cards.
According to what the president had to say, “That’s part of what we’re considering, that’s part of the whole operation”
More Than 400 Industry Organizations Ask Congress To Stop Rail Strike
The leaders of Congress are being urged by more than four hundred different business organizations to be ready to avoid a freight train strike that could begin wreaking havoc on the economy as early as the following week.
In a statement sent on Monday, industry groups sponsored by the Chamber of Commerce wrote to House Speaker Nancy Pelosi, Senate Majority Leader Chuck Schumer, House Minority Leader Kevin McCarthy, and Senate Minority Leader Mitch McConnell that “No one wins when the railroads stop operating.” In accordance with the Railway Labor Act of 1926, the Congress has the authority to impose a contract on both parties or to extend a “cooling-off period” for discussion in order to keep the railroads operating and prevent interruptions to interstate commerce. The laws governing employees’ time off are at the center of the disagreement between the railroad companies and their workforce.
The 449 different business associations, which range from the Aluminum Association and the Beer Institute to the US Apple Association and the Window & Door Manufacturers Association, have all stated that this is a matter of “grave urgency” due to the fact that even a temporary stoppage of work would result in a significant amount of issues. They stated that a consensual agreement between the freight train unions and the freight railroads would be the greatest possible outcome, but they emphasized that Congress needed to prepare for the worst possible outcome. “Absent a voluntary agreement, we call on you to take immediate steps to prevent a national rail strike and the certain economic destruction that would follow,” the groups wrote, pointing out that Congress has intervened 18 times in labor negotiations since 1926 when interstate commerce was threatened. “Absent a voluntary agreement, we call on you to take immediate steps to prevent a national rail strike and the certain economic destruction that would follow,” the groups wrote.
It is possible that a rail strike will take place as early as December 9, which will result in a lack of goods, an increase in costs, and a stop in the production of goods in factories. According to the estimates provided by the business organizations, this might also result in a disruption of commuter rail services, which could affect up to seven million passengers per day, as well as the transportation of 6,300 carloads of food and farm products every day.
However, the trade groups warn in the letter that the effects of a nationwide well strike will be felt by many firms as early as December 5 in the form of service outages and other impacts. They mentioned that earlier this year, there was a prospective rail strike that caused “severe disruptions” for essential goods and products, such as fertilizer, chlorine, and other things, but the strike was averted with an 11th-hour preliminary arrangement.
According to the letter, “Congress must be prepared to intervene before the end of the current’status quo’ term on December 9 to ensure continuing rail service” in the event that an agreement cannot be reached. “The unpredictability of rail service in the midst of this year’s drawn-out contract negotiation has produced an immense amount of concern.”
Outside China, Protests Are Grabbing Headlines
In China, the censors are working nonstop. Thousands of protestors have gathered in the streets of more than a dozen Chinese cities in recent days, demanding an end to strict Covid lockdown restrictions and political freedoms in a rare display of rage against the Chinese Communist Party.
For major news outlets around the world, it is one of the top stories, if not the top story. However, the unprecedented challenge to Chairman Xi Jinping has received almost little publicity for the hundreds of millions of Chinese who rely on state-run media for their news.
This is due to the fact that Chinese media have mostly ignored the rebellion, which is thought to be one of the greatest to occur in recent memory, as Xi deploys a variety of iron-fist techniques to stifle coverage and suppress the totalitarian nation’s growing acts of dissent. For instance, the state-run Xinhua News Agency’s webpage lacked any coverage of the demonstrations on Monday. In reality, a scan of its website revealed that the propaganda organization had not used the word “protest” in any digital pieces since the protests started.
Xinhua is a common news source. Attempts are being made by additional state-run media sources to completely ignore the widespread protests, which have started in at least 16 locations. The websites of the People’s Daily and China Daily, two more well-known state-controlled media outlets, did not mention the protests on Monday.
According to Jonathan Yerushalmy of The Guardian, CCTV “spending most of the morning covering the announcement of the planned launch of the Shenzhou-15 spacecraft to China’s space station on Tuesday.”
According to Philip Hsu, director of the Center for China Studies at National Taiwan University and a visiting fellow at Brookings, “the lack of media coverage, due to Xi’s control, restricts the spread of information and helps, to some extent, prevent the protests from proliferating in an unbridled fashion.”
Hsu would not rule out the idea that some coverage choices were made out of self-censorship. But this situation, according to Hsu, “reflects an even more fundamental control by the Party than if there are the directives, because the media has been extensively conditioned on what they can and cannot do without being instructed individually.”
Young protesters across China held up sheets of white paper as a metaphor for the numerous critical posts, news stories, and vocal social media accounts that were removed from the internet in a symbolic protest against the ever-tightening censorship.
The deliberate attempt by the state-run media to put an end to the demonstrations and spread official messages exposed the depths to which Xi’s mouthpieces will go to quell dissension. Given that the absence of coverage has not been able to quell the escalating protests or conceal the reality from the world that is eluding the authoritarian hold via social media, it also raises concerns about the efficacy of his propaganda machine.
It’s possible that this is the reason why state-run media is currently adopting a slightly different strategy. In some cases, these pieces appear to be intended to quiet the uproar by implying that the government will strive to “refine” its harsh Covid measures. For instance, The People’s Daily’s site included a headline that said, “Precision” is required “as cities roll out optimal COVID response.” In other words, some wiggle room is needed for the rigid Covid limits.
It remains to be seen whether that strategy will be successful. But Hsu asserted that one “important” shift brought about by the protests will be “impossible to roll back,” “no matter what happens.”
Individual citizens now understand that there is a good probability that others may join their resistance, according to Hsu.
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Buy Now Pay Later Revenue Up 78% Despite Unparalleled Inflation
Inflation reached a 40-year high this year, yet it didn’t stop the famous Black Friday. Last Friday’s discount frenzy broke the previous record by selling $9.12 billion in merchandise, outperforming the previous year by 2.3%. However, compared to other years, that sales record’s structure is somewhat different. The growth of credit and buy-now-pay-later (BNPL) services seems to have offset the inflationary pressure.
Beyond All Expectations, Black Friday Week
The data from Adobe Analytics collected on Saturday shows that customers used eCommerce more than ever before. One example is the $3.36 billion in sales that Shopify Merchants achieved on Black Friday, shattering previous records. Buy-now-pay-later (BNPL) programs like Zip, Afterpay, Affirm, and PayPal’s Pay-in-4 have been enthusiastically adopted by consumers.
In the week of Nov. 19–25, point-of-sale loans climbed by 78%, and BNPL income increased by 81% from the previous week. Contrary to October, online sales increased by almost 200% in the following categories: toys accounted for the highest increase at 285%, followed by audio equipment (230%), electronics (221%), smart homes (271%), and fitness equipment (218%).
Gaming consoles, drones, Dyson vacuums, MacBooks, and gaming-related devices are among the most popular products. Overall, the yearly study from the National Retail Federation was accurate in predicting stronger consumer spending than it did before 2020. In addition to record BNPL orders, the Black Friday week saw a boom in mobile shopping, which, according to Salesforce, accounted for a record 48% of total online sales, up from 44% last year. With $5.29 billion and $9.12 billion respectively, Thanksgiving and Black Friday both exceeded forecasts and set records. Online buyers don’t often spend more than $3 billion every day. On Cyber Monday, which Adobe projects will generate $11.2 billion, a YoY rise of 5.1%, this trend is anticipated to continue.
Original Black Friday Created in an Inflationary Environment
After the Thanksgiving holiday and only in the US, Black Friday ushers in the start of the holiday shopping season. Beginning in the early 1950s, the term “Black Friday” referred to employees who called in sick after Thanksgiving, generally to extend the holiday into a 4-day weekend.
Since then, as consumer power increased, employees have expanded it to include escapades at the mall and clogged roads, particularly in the late 1970s and early 1980s. Black Friday was first acknowledged by The New York Times in 1975, a year after inflation reached 11.05%. Inflation peaked in 1980 at a record 13.55%.
One year later, on November 28, 1981, The Philadelphia Inquirer published the first description of Black Friday as the day when retailers collect their annual profits and turn their accounting books from red (negative) to black (positive). Where Can Customers Find Relief from Prices?
The NRF predicted that consumers will spend 6%–8% more than they did last year in the present macro environment, which is in line with the 7.7% inflation rate. The only significant product category that provided consumer comfort was clothes, with a 0.7% decrease in costs from September to October, except from used vehicle prices, which fell by 2.4%.
Nevertheless, there was a need for inventory clearance due to supply chain disruptions over the previous two years and an excessive number of orders that were carried over. This gave retail establishments plenty of room to get rid of inventory that was no longer in high demand. Clothing, TVs, appliances, and computers were included in that broad category by Adobe Analytics.
NRF estimates that households making under $75k should cut their holiday expenditures by $606 on average. Despite being fewer in number, households making over $150k should make up the difference in spending by increasing their average annual income by $1,304.
Is High Inflation Being Exit by the Economy?
The Consumer Price Index (CPI) for October decreased from 8.2% to 7.7%, yet the percentage still indicates an increase in prices. Having said that, it seems like inflation is gradually slowing down. Crude Oil (WTI) is currently down 3% year over year, which is the biggest drop since the beginning of 2021. Additionally, the Freightos Baltic Index (FBX), which measures global container freight prices, has fallen by roughly -300% from its top of $11,109 in late September to its lowest level since December 2020. Similarly, prices on the home market are dropping at their quickest rate since the Great Recession of 2008. The highest increase in more than 20 years, however, was a 15% YoY increase in credit card debt balances.
The third quarter of 2022 saw a continuation of the rise in credit card, mortgage, and auto loan balances due to both strong consumer demand and increased pricing. Donghoon Lee, a research advisor for economics at the New York Fed, says
It’s interesting to note that as of September, 2.7% of the total amount of outstanding debt still had a very low debt default rate for Q3 2022. This might alter, though, if the jobless rate keeps rising. It is currently 3.7% compared to 3.5% last month.
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