US Launches Fresh China Tariff Probe Ahead Of Trump-Xi Meeting

Source: cnbc

The Bureau of Labor Statistics on Friday released its much-anticipated consumer price index report, delayed a week and a half because of the government shutdown.

Here are the five most important takeaways:

What they're saying:

"In aggregate today's inflation readings are encouraging, albeit still above the Federal Reserve's stated 2% inflation target. Yet, we think the overall inflation trend can continue to moderate over the next year ... as inflation breakevens have recently suggested, allowing the Fed to maintain its bias toward rate cuts." — Rick Rieder, head of fixed income at BlackRock and a finalist for Fed chair to succeed Jerome Powell next year.

"Look beneath the headline and what one sees on a year ago basis are large increases in the cost of food, meat, housing, and utilities. Middle class & down-market households experiencing a slowing pace of wage growth are clearly having difficulty adjusting to persisting increases in the cost of living ... It's only natural that those that inhibit the lower spur of the K ask: what is it that those celebrating a more modest increase in the pace of price increases see that indicates inflation is not eroding my bottom line & standard of living?" — Joseph Brusuelas, chief economist at RSK, on the K-shaped economy.

"Signs of spillovers from tariffs remain weak and support the view that tariff hikes will translate into a one-off bump in prices instead of persistent inflationary pressures," Krishna Guha, head of global policy and central bank strategy at Evercore ISM.

Source: CNBC

Source: Reuters

Key Takeaways

• The White House said October's inflation report is unlikely to be released.
  

• The ongoing government shutdown has closed the government's statistical agencies, leaving critical economic data unreported.
  

The Bureau of Labor Statistics is likely to skip a month of data collection for the Consumer Price Index for the first time in its history because of the ongoing government shutdown.The Consumer Price Index, a widely watched gauge of inflation, is unlikely to be released for October, the White House said on Friday. The CPI is based on prices collected by an army of surveyors, who are currently on furlough and not working because of the government shutdown."Because surveyors cannot deploy to the field, the White House has learned there will likely NOT be an inflation release next month for the first time in history—depriving policymakers and markets of critical data and risking economic calamity," the White House said in a statement.

What This Means For The Economy

Investors, government officials, and businesspeople rely on government data to assess the health of the economy. Those decision makers could be left in the dark about important economic trends as the government shutdown drags on.

If October's data collection is skipped, it would create a remarkable gap in a dataset that spans more than a century. The BLS first published data for a national Consumer Price Index in 1921, including estimates for the national inflation rate dating back to 1913.The CPI report is one of many pieces of economic data going unreported as the government's statistical agencies remain closed. Republican and Democratic lawmakers have voted down one another's bills to fund the government amid a dispute over health care policy. The White House statement deepened concerns among economists that the government will have to skip many of the monthly economic reports scheduled for release in October.

The ongoing data blackout is especially problematic for officials at the Federal Reserve who set the nation's monetary policy with the aim of keeping employment high and inflation low. Although private companies, universities, and other groups produce their own measures of the economy's health, the federal government's statistics, based on extensive surveys, are considered by economists to be the most comprehensive and reliable.The White House announcement occurred shortly after the BLS released its CPI report for September, showing price increases accelerated less than forecasters anticipated, although remaining well above the Federal Reserve's target of a 2% annual rate. The BLS brought back some employees during the shutdown to publish the September CPI report since it is used to calculate Social Security annual cost-of-living adjustments to benefits.

Source: Yahoo Finance

President Donald Trump is rattling his saber against Colombian President Gustavo Petro to punish him for accusing the US government of murdering Venezuelan fishermen. Trump has boasted of the killings by the US military but claims all the targets were drug smugglers. He has threatened to suspend all US government handouts for the Colombian government. Trump warned Petro that he "better close up" cocaine production "or the United States will close them up for him, and it won't be done nicely."Tapping his own psychiatric expertise, Trump proclaimed that Colombia has "the worst president they've ever had – a lunatic with serious mental problems." Is anyone in the Trump White House aware of the long history of U.S. failure in that part of the world? In 1989, President George H.W. Bush warned Colombian drug dealers that they were "no match for an angry America." But Colombia remains the world's largest cocaine producer despite billions of dollars of US government anti-drug aid to the Colombian government.

The Bill Clinton administration made Colombia its top target in its international war on drugs. Clinton drug warriors deluged the Colombian government with U.S. tax dollars as they literally deluged Colombia with toxic spray. The New York Times reported that U.S.-financed planes repeatedly sprayed pesticides onto schoolchildren, making many of them ill. Colombian environmental minister Juan Mayr publicly declared last year that the crop spraying program has been a failure and warned, "We can't permanently fumigate the country."

As I wrote in The American Spectator in 1999:

"Colombia has received almost a billion dollars of anti-narcotics aid since 1990. Coca production is skyrocketing–doubling since 1996 and, according to the General Accounting Office, expected to increase another 50 percent in the next two years. Colombia now supplies roughly three-quarters of the heroin and almost all the cocaine consumed in the United States."

The Clinton administration responded to the failure of its drug war by championing a far more destructive solution. As I noted in the Las Vegas Review Journal, Clinton officials "intensely pressured the Colombian government to allow a much more toxic chemical (tebuthiuron, known as SPIKE 20) to be dumped across the land, which would permit the planes to fly at much higher altitudes, Kosovo-style. Environmentalists warned that SPIKE 20 could poison ground water and permanently ruin the land for agriculture. Even as the Clinton administration decreed clean-air standards severely curtailing Americans' exposure to chemicals that pose little or no health threat, it sought to deluge a foreign land with a toxic chemical in a way that would be forbidden in the United States." Dow Chemical, the product's inventor, protested strongly that SPIKE 20 was not safe for use in the Andes and surrounding areas. Didn't matter.

Colombia at that time was wracked by a civil war—a fight between a corrupt government and corrupt leftist guerillas. The Dallas Morning News noted reports that "tens of millions of taxpayer dollars are going into covert operations across southern Colombia employing, among others, U.S. Special Forces, former Green Berets, Gulf War veterans and even a few figures from covert CIA-backed operations in Central America during the 1980's."Like Trump's attacks on Venezuelan boats, Clinton's aid for Colombia was lawless. Congress in 1996 prohibited any U.S. foreign aid to military organizations with a penchant for atrocities. The Colombian army had a poor human rights record but almost nobody in Congress gave a damn. Democrats winked at illicit conduct by their president and Republicans didn't care about any crimes committed in the name of eradicating drugs.

In a Baltimore Sun piece in June 2000, I observed, "The war on drugs is as unwinnable in Colombia as it is in the hills of Kentucky, where natives continue growing marijuana despite endless raids by police and the National Guard." I whacked the Clinton administration for "bumbling into a civil war." Colombia's ambassador to the United States vehemently attacked my piece, claiming that the Clinton administration aid package was carefully targeted to "strengthen law enforcement institutions and help protect human rights." Alas, U.S. aid was diverted to "carry out spying operations and smear campaigns against Supreme Court justices," The Washington Post reported, crippling the nation's judiciary.

At the same time that the Clinton administration was sacrificing the health of Colombian children in its quixotic anti-drug crusade, top U.S. antidrug officials made a mockery of the entire mission. Laurie Hiett, the wife of Colonel James Hiett, the top American military commander in Colombia, exploited U.S. embassy diplomatic pouches to ship fifteen pounds of heroin and cocaine to New York. She pocketed tens of thousands of dollars in narcotic profits.After she was caught and convicted, she received far more lenient treatment than most drug offenders—only five years in prison, "the same sentence a small-time dealer would get if he were caught with five grams of crack in his pocket," I noted in Playboy. Her husband—ridiculed as the "Coke Colonel" in the New York Post—received only six months in prison for laundering drug proceeds and concealing his wife's crimes.

Eric Sterling, president of the Criminal Justice Policy Foundation, explained the double standard:

"If Colonel Hiett had been Mr. Hiett, he would have been charged with conspiracy to traffic in more than a kilogram of heroin, with a mandatory minimum sentence of 10 years. He would possibly face life without parole…Mr. Hiett would, at a minimum, have been charged with aiding and abetting his wife's money laundering, facing 20 years."Most drug warriors pretended either that the Hiett case had never happened or that it didn't matter. Drug Czar Barry McCaffrey shrugged off the scandal:"What a tragedy…There are 3.6 million chronic cocaine addicts in America and every one of them produces that kind of criminality and tragedy."

"But when any of those 3.6 million is caught, they don't get coddled," as I wrote in Playboy.Donald Trump's victory in the 2024 presidential election did not entitle him to micromanage every acre of land in this hemisphere. The U.S. war on drugs has dismally failed in Colombia for more than a third of a century. There is no excuse for Trump or any other U.S. government official to burn American tax dollars by perpetuating Colombian pratfalls.

Source: Zero Hedge

Source: cnbc