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Tag: gasoline prices

As A 'Crisis,' Food Price Inflation Is A Turkey

Economists tell us that the current high rate of inflation is not forever. And it's not all bad, certainly not for workers whose rising wages play a part in the climbing prices. How seriously Americans are taking it may be reflected in this Wall Street Journal headline: "Retail Sales Rose by 1.7% in October Despite High Inflation."

Anyhow, the media angst over jumps in the broad consumer price index often overlooks the big price differences in the categories that go into it. And what more timely subject for those intent on squawking about inflation than the price of turkey?

As an example, CNN anchor John Berman recently declared, "There's a good chance that the grocery bill is going to be quite high on Thanksgiving." Business correspondent Christine Romans took it from there delivering the scary-sounding news about the Thanksgiving bird.

"We're expecting the price to top a record high of $1.36 per pound this holiday season," she said. That would be "22 bucks for a 16-pound turkey."

Let's unwrap this. A 16-pound turkey feeds something like 18 people. That would come to $1.22 per person. Put in perspective, a Sausage Biscuit with Egg at McDonald's costs $2.79.

But things could go downhill from there. You might not get any turkey at all, Romans warns. "Economists are saying, grocery stores are saying, they expect a run on turkeys, a run on birds." There's also a "risk," she goes on, that "you may not get the size bird you want."

Aha, just the thought that alarmed Americans might do a run on turkeys, fearing they won't get one, could cause ... a run on turkeys. Recall last year's ransacking of shelves for toilet paper. Though inexplicable, it did create some cute memes: Did you know that the Charmin bear was behind the coronavirus pandemic?

Oh, and there are other Thanksgiving food items. The price of potatoes was up 1.7 percent last month from a year ago. Potatoes in October 2020 cost about 82 cents a pound, which means Americans are now spending slightly over 1 cent more a pound this year for potatoes.

Consider the worst-case scenario. Just suppose the turkey shelves at the supermarket go bare in the days before Thanksgiving. So, you have eggplant parmesan for dinner or hamburger or chicken pot pie. No one is going to starve. After all, the American people did get through the Great Depression.

But let's not interrupt a good cry. As The New York Times reported, "Thanksgiving 2021 could be the most expensive meal in the history of the holiday." But then comes the line five paragraphs down that put things in a calmer light: "Granted, last year the cost of a Thanksgiving dinner for 10 was the lowest it had been since 2010, according to the American Farm Bureau."

In other words, the increase in prices comes on a low base. That is, prices a year ago were unusually depressed because of the pandemic.

That also applies to gasoline, an item whose price has truly surged. The national average is now about $3.41 for a gallon of regular, according to AAA. There are several causes, but a spike in demand after a year when far fewer people were driving is a big one.

By the way, back in July 2008, unleaded gas hit $4.11 a gallon — and $4.11 in 2008 would be worth $5.17 in today's dollars. Life went on then, too.

As for the price of turkeys, who's panicking, other than certain media desperate for a hot headline during the mid-November doldrums? No need to panic. Black Friday is right around the corner, and as national obsessions go, shoppers-gone-wild are hard to beat.

Follow Froma Harrop on Twitter @FromaHarrop. She can be reached at fharrop@gmail.com. To find out more about Froma Harrop and read features by other Creators writers and cartoonists, visit the Creators webpage at www.creators.com.

Biden Urges Federal Trade Commission To Probe High Gas Prices

Washington (AFP) - President Joe Biden called on US regulators Wednesday to look into the causes of the nationwide spike in gasoline prices, which he said is hurting workers.

The president last week made fighting inflation a top priority after data showed consumer prices hit a 30-year high in October, fueling a slump in his public approval.

In a letter to the Federal Trade Commission (FTC), Biden took aim at oil companies he says are raising prices at the pump even as their expenses decline and profits soar.

He instructed the agency to look into whether "illegal conduct" is behind the energy price spike.

"I do not accept hard-working Americans paying more for gas because of anti-competitive or otherwise potentially illegal conduct," Biden said in the letter.

Despite signs the US economy has bounced back strongly from the damage inflicted by the Covid-19 pandemic, Biden has paid a political cost as global supply chain snarls caused shortages and drove an uptick in prices of everything from cars to food to gasoline.

The president said the high pump prices are not justified, noting that while the cost of unfinished gasoline has dropped more than five percent over the past month, retail prices rose three percent.

At the same time, oil companies "are generating significant profits," with the two largest on track to nearly double net income compared to 2019 and planning major stock buybacks, he said in the letter.

No 'Nefarious' Actions?

Average US gas prices were at $3.41 a gallon as of Monday, 11 cents higher than a month ago, according to the American Automobile Association (AAA).

That average is 81 cents more than in 2019, before the pandemic hit and kept most Americans at home.

A White House spokesman told reporters that if the gap between refined fuel costs and pump prices were at typical pre-pandemic levels, "We'd be looking at prices at the pump that are 25 cents less a gallon."

Patrick De Haan, head of petroleum analysis at GasBuddy, a price tracking company, said Biden is implying "nefarious" actions are to blame, but energy is a global market where prices have been volatile for weeks.

The wild swings mean there is no trend, so retailers cannot pass on any cost savings when oil prices fall, he said.

"I think the president is just trying to come out with some positive optics... to insinuate that he will take control the situation," De Haan told AFP, noting that relief could be on the way as oil production rises.

Frank Macchiarola of the American Petroleum Institute (API) called Biden's initiative "a distraction," and blamed "ill-advised government decisions that are exacerbating this challenging situation."

Biden instructed the FTC to "bring all of the commission's tools to bear if you uncover any wrongdoing."

The agency declined to comment on its investigations, but spokesman Peter Kaplan told AFP, "The FTC is concerned about this issue, and we are looking into it."

In response to a previous request over the summer from Biden to examine gas prices, FTC Chair Lina Khan pledged to investigate any collusion that might be fueling the inflation, as well as take a closer look at mergers in the industry that reduce competition.

In June, the regulator ordered 7-Eleven and Marathon Petroleum to sell off nearly 300 gas stations after saying their $21 billion merger violated antitrust rules by leaving hundreds of communities without alternatives to buy fuel.

What Do The Stunning Statistics That Emerged From 2020 Actually Mean?

We're a statistics-happy society. We obsess over the latest numbers on just about everything — birthrates, jobs and population changes — mining them for trends.

Some stats are really obscure, such as the shocking amount of electricity Bitcoin uses. The digital currency's complex computing process devours 143 terawatt-hours a year — more than the country of Norway! Can you believe?

Anyhow, the commonly quoted stats are dribbling in, but because they are being compared to those of the wildly abnormal pandemic year of 2020, what should we do with them? The answer may be to marvel at the dramatic shifts but with asterisks attached.

Take changes in state and city populations. California reported a net loss in population last year, the first time since 1900, when the state started counting. The effects of the pandemic, says Hans Johnson of the Public Policy Institute of California, should put an asterisk on last year's shrinkage.

Two big reasons for the falloff were the large number of COVID-19 deaths and a sharp decline in international immigration. But as shots in Californian arms curb the disease and more normal immigration patterns return, the state should resume growing slowly, as it has in recent years, Johnson adds.

New York state also lost people last year. Some of it resulted from COVID lockdowns sending people out of its cities to less crowded parts of the country. As with California, however, more of it reflects a decline in foreign immigration, according to the Empire Center.

The country as a whole last year grew at its slowest pace since 1918 — by only 700,000 residents, or 0.2 percent. Some of that low count reflects deaths from COVID and a lower birthrate. The number of babies born in the U.S. hit a 4 million high in 2015 and has fallen every year since.

The pandemic may have accelerated the process. Last December, when babies conceived early in the health crisis would have been born, the U.S. birthrate posted its sharpest decline in history. Was a drop-off this severe a temporary phenomenon reflecting health and economic fears of those strange times? We will see.

Cities are reporting significant spikes in shootings. Experts have offered some pandemic-related explanations for that as well. Lost jobs, closed schools and suspended after-school activities have left vulnerable young people on the streets where violent youth gangs do their recruiting.

COVID knocked the economy on its rear, so a large jump to more normal levels of consumer spending is producing price numbers that just reflect a return to normal. Gasoline prices, for example, soared 50 percent in April compared with the same month of 2020. For perspective, though, they actually decreased 1.4 percent from March 2021.

Economists surveyed by the Wall Street Journal expect the economy to grow in the second quarter at an annual rate of 8.1 percent over the same time a year earlier. This would be the most torrid growth in about 40 years. Then again, consider the pathetic base we're starting at — the annus horribilis of 2020.

The Centers for Disease Control and Prevention says the number of new COVID cases — almost 350,000 a week early this month — could drop to below 10,000 by August if vaccinations continue apace. The scourge seems to be ending, and barring some other astounding turn of events, the trend lines could start becoming less dramatic.

Clearly, 2021 is turning into a whole new ballgame. Making comparisons to the sick, sick year of 2020 may offer opportunities to exclaim over the biggest year-to-year surge or drop in this or that since the nation's founding. We can have fun with that, but, hey, remember the asterisks.

Follow Froma Harrop on Twitter @FromaHarrop. She can be reached at fharrop@gmail.com. To find out more about Froma Harrop and read features by other Creators writers and cartoonists, visit the Creators webpage at www.creators.com.

Moody’s Analytics Election Model Predicts Big Clinton Win

(Reuters) – Low gas prices and President Barack Obama’s high approval ratings are key factors that favor Democrat Hillary Clinton winning the White House in next week’s election, according to a model from Moody’s Analytics that has accurately predicted the last nine U.S. presidential contests.

Clinton is forecast to pick up 332 Electoral College votes against 206 for Republican Donald Trump, Moody’s Analytics predicted on Tuesday in the final update of its model before Election Day on Nov. 8. That would match Obama’s margin of victory over Republican challenger Mitt Romney in 2012.

The Reuters-Ipsos States of the Nation project also predicts a Clinton win, with a 95 percent probability of her winning at least 278 electoral votes. A candidate needs to win at least 270 electoral votes to be elected president.

The Moody’s Analytics model is based on a combination of state-level economic conditions and political history, and has correctly called the outcome of each presidential election since Republican Ronald Reagan unseated Democrat Jimmy Carter in 1980.

Rather than focus on the individual candidates in a race, the model instead centers on whether current economic and political conditions favor the incumbent party in the White House. This year those factors point to Clinton becoming the 45th U.S. president.

The economic factors Moody’s measures include the two-year percentage changes in real personal income per household, as well as house and gasoline prices.

Among the political factors weighed, Moody’s said the most important is the share of the vote in any one state that went to the incumbent party in the previous election. It also takes into account voter fatigue and the incumbent president’s approval ratings.

This year, with Obama enjoying some of his highest job approval ratings since his first year in office in 2009 and gasoline prices holding steady at well-below-average levels, the model suggests the Democrats will win their third straight presidential election, Moody’s said. That would mark the first time since the 1988 election of Republican George H.W. Bush that one party has won three consecutive presidential contests.

Moody’s warns, however, that its model does not take into account any individual characteristics of specific candidates.

“Given the unusual nature of the 2016 election cycle to date, it is very possible that voters will react to changing economic and political conditions differently than they have in past election cycles, placing some risk in the model outcome, particularly state-by-state projections,” Moody’s analytics economist Dan White wrote in the report.

(Reporting By Dan Burns; Editing by Jonathan Oatis)

IMAGE: U.S. Democratic presidential nominee Hillary Clinton attends a campaign rally accompanied by vice presidential nominee Senator Tim Kaine (not pictured) in Pittsburgh, U.S., October 22, 2016. REUTERS/Carlos Barria/File Photoeconomic