We saw in our earlier report about the inflation numbers that the news was not good for the American consumer — that core CPI went up sharply in August, even with gas prices dropping. That’s not a good sign and an indication that the rosy picture that the Biden team would like to paint of inflation is not reality.
The report has many economists concerned, and stock futures took a tumble Tuesday morning at the news, as the markets reacted to the new CPI data. Economists had predicted a lower annual inflation rate for August, and the 8.3 percent finding sent future tied to the S&P 500 down 1.4 percent, while contracts tied to the tech-oriented Nasdaq fell 1.9 percent.
Unfortunately, there’s another problem coming up that may make it worse, if inflation weren’t bad enough.
There’s a potential railroad strike that may hit on Friday that could cost the country $2 billion a day and throw transportation of goods and people into a mess.
Biden is trying to head it off. He knows that if it hits, it could be toast for the Democrats in the midterms because it would further drive the economy into the dumper. Biden has been making calls and his team has been holding meetings with the union heads but it hasn’t worked so far.
The freight industry has warned that the strike would shut down 30 percent of the country’s freight and “halt most passenger and commuter rail services.” A freight railroad shutdown could “devastate” Amtrak operations, according to the Association of American Railroads, with roughly half of commuter rail systems running at least partially on tracks or rights of way owned by freight railroads. Hundreds of thousands of daily commuter trips would be disrupted, the association said earlier this month. [….]
The Brotherhood of Maintenance of Way Employees, a division of the Teamsters, on Sunday announced a tentative agreement with national rail carriers, leaving only two of the 12 unions without a deal in place. Those two groups, representing engineers and conductors, are politically powerful and the two largest rail unions in the country. The remaining 10 unions are expected to refuse to work in solidarity. [….]
The Federal Railroad Administration, a part of the Transportation Department, has estimated that failure to reach an agreement could cost the U.S. economy as much as $2 billion per day in lost economic output. U.S. Chamber of Commerce President and CEO Suzanne P. Clark on Monday said a strike would be an “economic disaster” with “catastrophic economic impacts,” calling for urgent action to resolve the standoff.
This would just make supply chain issues even worse. Treasury Secretary Janet Yellen said it would mean a “damaging supply shock to the economy.”
So best to stock up on whatever you might need before this hits because who knows what it might affect and what shortages could result if they do in fact strike. Add that to the thousands of nurses going on strike and we may have some big problems on the horizon.
Story cited here.
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