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New Hampshire
Latest inflation figures are good news – even if they give a lot of people heartburn • New Hampshire Bulletin
The U.S. economy is slowing, but not crashing. In the dismal science, this is what counts as good news.
That’s the message I took away from the latest inflation data, released May 15, 2024, which showed U.S. consumer prices rising 3.4 percent in the 12 months to April 2024. This is down slightly from the 3.5 percent year-over-year increase reported in March 2024.
In other words, while prices are rising, they’re not going up as sharply as they once were. That’s good news for shoppers; the U.S. economy is far from the 9.1 percent annual inflation seen in June 2022.
While energy and shelter prices increased in April, these gains were relatively modest. Meanwhile, food prices remained steady compared to last year and even declined by 0.2 percent compared to March. What’s more, people in the market for a car were in luck: New and used vehicle prices fell 0.4 percent and 6.9 percent, respectively, in April.
The “core” consumer price index – which doesn’t include volatile food and energy prices and is often considered better at predicting future inflation than so-called “headline” CPI figures – is also down slightly. After posting a year-over-year increase of 3.9 percent in January and 3.8 percent in February and March, it slowed to 3.6 percent in April.
So the overall report is relatively positive: It didn’t show the uptick in inflation that many consumers feared, and reported inflation rates were actually slightly lower than market expectations.
As an economist, I see this data report as yet more evidence that economic growth is slowing – in a good way. The economy grew at a lower-than-expected 1.6 percent rate in the first quarter of 2024, according to the most recent gross domestic product data from the Bureau of Economic Analysis. The most recent jobs report also showed a slowdown in hiring, and the latest data on job vacancies similarly showed the labor market cooling off.
Why the Fed is paying close attention
The Federal Reserve’s main objective is to strike a balance between two goals: maintaining stable employment and ensuring price stability. It does this by managing and influencing interest rates.
Lowering rates stimulates the economy, which encourages economic growth and job creation – but that can fuel inflation. Raising rates does the opposite: Economic growth slows, which dampens inflation, but also hinders employment.
So, when inflation started increasing dramatically after the COVID-19 pandemic, the Federal Reserve responded with a two-year campaign of rate hikes – they’re currently at a 23-year high. Since this raises the cost of borrowing, investors and potential homebuyers are keen for the Fed to dial back its rates.
After May’s report, I don’t believe the Federal Reserve will be in any rush to cut interest rates from their current elevated level. There’s a slowdown, to be sure, but the slowdown is so steady that it’s not pulling prices down in any rapid fashion.
This is no doubt frustrating for the Fed – which has an inflation target of 2 percent – as well as for potential homebuyers. But it’s evidence that the economy is stable at the moment. Inflation isn’t surging, and consumer spending, according to the Bureau of Economic Analysis, is still growing. In March, consumer spending increased 5.8 percent year over year, up from February’s 4.9 percent rate.
All eyes on the American shopper
Going forward, hopes for a “soft landing” – economist-speak for when the Fed slows inflation without triggering a recession – will depend in large measure on U.S. shoppers. Consumer spending makes up roughly two-thirds of U.S. gross domestic product.
If American shoppers suddenly stop spending, then inflation will slow considerably, job vacancies will evaporate, and gross domestic product could contract. At that point, the Fed will turn attention away from inflation and toward economic stimulus, and rates will fall.
I mention this because a recent report by the Federal Reserve Bank of St. Louis showed a troubling uptick in consumer credit card delinquency rates. If much of the recent increase in consumer spending is due to Americans relying more on credit cards, then the economy could be on shakier ground than it appears.
The good news is that delinquency rates are still way below where they were ahead of the Great Recession, which lasted from December 2007 through June 2009. So, while this data may be troubling, there’s no need to panic just yet.
In short, while inflation rates still aren’t to the Fed’s liking, the economy – for now – appears to be on a stable path.
This article is republished from The Conversation under a Creative Commons license. Read the original article.
New Hampshire
Possible 2028 Democratic White House contenders weigh in on Iran with New Hampshire voters
As the U.S.-Israeli war with Iran overtakes the foreign policy debate in Washington, two Democratic governors with potential 2028 presidential aspirations — Gavin Newsom and Andy Beshear — recently traveled to New Hampshire, introducing themselves to the state’s famously engaged voters. The two weighed in on the war and both criticized and questioned President Trump’s strategy and endgame.
“If a president is going to take a country into war, and risk the lives of American troops and Americans in the region, he has to have a real justification and not one that seems to change every five to 10 hours,” Beshear told CBS News after a Democratic fundraiser in Keene.
“This President seems to use force before ever trying diplomacy, and he has a duty to sell it to the American people and to address Congress with it,” Beshear continued. “He hasn’t done any of that. In fact, it appears there isn’t even a plan for what success looks like. He’s gone from regime change to strategic objectives and now is talking about unconditional surrender, which isn’t realistic where he is.”
Beshear also said he thought that Congress should have reined in Mr. Trump’s war powers.
“He is trying to ignore Congress. He’s trying to even ignore the American people,” Beshear said.
He went on to note that the president’s State of the Union address took place “three — four days before he launched this attack,” and Mr. Trump “didn’t even have the respect to tell the American people the threat that he thought Iran posed to us.”
Last week, both the House and the Senate failed to pass resolutions to limit Mr. Trump’s war powers and stop him from taking further military action against Iran without congressional support.
For Newsom, the war with Iran constitutes part of a broader criticism of Israeli Prime Minister Benjamin Netanyahu.
At an event last Tuesday in Los Angeles, Newsom had compared Israel to an “apartheid state.” Later, in New Hampshire, he sought to clarify his comment.
“I was specifically referring to a Tom Friedman [New York Times] column last week, where Tom used that word of apartheid as it relates to the direction Bibi is going, particularly on the annexation of the West Bank,” Newsom explained during a book tour event Thursday night in Portsmouth. “I’m very angry, with what he is doing and why he’s doing it, what he’s going to ultimately try to do to the Supreme Court there, what he’s trying to do to save his own political career.”
Friedman wrote that at the same time that the U.S. and Israel are prosecuting a war in Iran, within Israel, Netanyahu’s government has undertaken efforts to annex the West Bank, driving Palestinians from their homes; fire the attorney general who is leading the prosecution against Netanyahu for corruption; and block the government’s attempt to establish a commission to examine the failures that led up to the Oct. 7, 2023, massacre of Jews by Hamas.
CBS News has reached out to the Israeli Embassy in Washington, D.C., for comment.
On Iran, Newsom said, “I’m very angry about this war, with all due respect, you know, not because I’m angry the supreme leader is dead. Quite the contrary. I’m not naive about the last 37 years of his reign. Forty-seven years since ’79 — the revolution,” Newsom said. “But I’m also mindful that you have a president who still is inarticulate and incapable of giving us the rationale of why? Why now? What’s the endgame?”
Many attendees at Newsom’s book event said that the situation in Iran is a top-of-mind issue for them, too. Some said they’re “horrified” by what is happening.
29-year-old Alicia Marr told CBS News she decided to attend Newsom’s event because of his social media response to the war with Iran.
“There was one spot left, and I decided to pick it up, and it was due to his response to the war, that it is just unacceptable, and I would agree with that,” Marr said.
While some voters like Marr are eager to hear about where potential candidates stand on foreign policy, many at Newsom’s event said they care most about how potential candidates plan to address domestic issues.
“I’m more focused on getting the middle class back on track and fighting the oligarchy, and I’m less invested in international issues,” said Anita Alden, who also attended Newsom’s event,
“I wouldn’t call myself America first, but we have so many problems at home that are my priority,” she told CBS News.
Former Vice President Kamala Harris, who may also be weighing another White House bid, told Fox 2 Detroit last week that she “unequivocally opposes” the Trump administration’s military action in Iran and urged Congress to take action.
“If we want to stop Donald Trump with this random decision that he has arrived at, then Congress must act, and Congress must act immediately. The American people do not want our sons and daughters to go into this unauthorized war of choice,” Harris said.
Mr. Trump has lashed out against Democrats who have pushed back on his Iran strategy, calling them “losers” last week and arguing that they would criticize any decision he made on Iran.
“If I did it, it’s no good. If I didn’t do it, they would have said the opposite, that you should have done this,” the president said.
Local News
Police say the Attleboro man was driving 104 mph in a 55 mph zone on Route 202 near in Rindge, New Hampshire.
A Massachusetts man was arrested late Wednesday night after police say he was driving more than 100 mph on a New Hampshire roadway.
Officers with the Rindge Police Department stopped a vehicle shortly after 11 p.m. on Route 202 near Sears Drive in Rindge following a report of a car traveling at excessive speed, according to a statement from Chief Rachel Malynowski.
The vehicle, a 2020 Kia Stinger, was spotted traveling at 104 mph in a posted 55 mph zone, Malynowski said.
The driver, a 21-year-old man from Attleboro, was arrested and charged with reckless operation of a motor vehicle, according to police.
He is scheduled to be arraigned April 5. If convicted, the man faces a fine of at least $750, in addition to the court’s penalty assessment, and a 90-day license suspension, Malynowski said.
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