AFP

A key US inflation measure showed price increases held steady in the 12 months ended in May, while consumer spending growth slowed sharply, a good sign in the battle against soaring prices.

Any sign of moderation will be a boon to President Joe Biden whose approval ratings have tumbled, as his administration has struggled to find effective tools to help American families feeling the pain of surging gasoline, food and housing prices.

The trend also offers comfort to the Federal Reserve, showing its aggressive interest rate strategy is starting to have an impact to quell the fastest surge in inflation in more than 40 years.

The personal consumption expenditures (PCE) price index rose 6.3 percent compared to May 2021, still high but the same pace as in the prior month, the Commerce Department reported Thursday.

The index jumped 0.6 percent compared to April, much faster than in the prior month, but slightly below what economists had projected.

But spending edged up just 0.2 percent, less than half the increase in April and part of a steady downward drift as consumers pull back amid surging prices.

Buoyed by a stockpile of savings, helped by massive government aid, consumers have been the lynchpin in the rapid US recovery from the pandemic downturn.

But strong demand clashed with global supply chain snarls and the world’s largest economy has been battered for months by a cresting inflation wave, made more painful by the surge in energy prices sparked by the Russian invasion of Ukraine in late February.

Excluding volatile food and energy prices, “core” PCE rose 0.3 percent in the month, the same as in April, while the 12-month pace slowed slightly to 4.7 percent, the report said.

– Fed inflation battle –

Brian Deese, head of the White House National Economic Council, noted that the three-month annual average for core PCE fell to four percent from 5.2 percent.

“That is important moderation that we’re seeing,” he said on CNBC. 

However, he said the headline continues to be driven by higher energy prices.

Energy prices jumped four percent in the month, after dropping in April, and are 35.8 percent higher than May 2021, the data showed.

The PCE price index is the Federal Reserve’s preferred inflation gauge, as it reflects consumers’ actual spending, including shifts to lower cost items, unlike the more well-known consumer price index, which jumped 8.6 percent in May.

PCE also gives less weight to things like rent, vehicles and airline fares, which have contributed to the blistering pace of the CPI rise.

The Fed early this month announced the biggest hike in the benchmark lending rate in nearly 30 years, a three-quarter point increase that was the third step in its counteroffensive against rising inflation, as it aims to cool demand.

Policymakers have signaled there is a good chance of another similar increase in late July, followed by more big steps in coming months.

That has raised concerns the Fed could push the economy into a recession — a price Fed Chair Jerome Powell signaled the central bank is willing to pay to control inflation.

– Slower spending –

The signs of consumers pulling back will weigh on second quarter GDP growth, after the Commerce Department revised first-quarter consumer spending sharply lower, cutting it to 1.8 percent from 3.1 percent, as the economy contracted 1.6 percent.

Diane Swonk of Grant Thornton estimates that “consumers have drained about $600 billion of the excess $2.5 trillion in savings they amassed during the pandemic to deal with the bite of higher prices.”

The key driver of the slower consumption growth in May was the sharp drop in spending on big-ticket manufactured items, that economists note reflects a pull back on vehicle sales.

Spending on services rose 0.7 percent in the month, the same as in April.

The US Supreme Court on Thursday gave the administration of President Joe Biden the green light to end the so-called Remain in Mexico policy instituted by Donald Trump as part of his hardline approach to immigration.

Under the policy, some non-Mexicans who entered the United States illegally across the southern border were sent back to Mexico to wait while their immigration cases played out in court, rather than being detained or provisionally released.

Since the beginning of his term, Biden has been trying to wind down the policy as part of what he claims is a more humane take on immigration.

Advocates for migrants said the policy exposed asylum-seekers to dangerous conditions in Mexico as overwhelmed US courts slowly work through a backlog of cases.

Thursday’s ruling in favor of the Biden administration was split 5-4, with Chief Justice John Roberts joining fellow conservative Brett Kavanaugh and the court’s three liberal justices in the majority.

Roberts, who authored the majority opinion, argued that federal immigration law allows the executive branch to return asylum seekers to Mexico, but does not force it to do so.

“Congress conferred contiguous-territory return authority in expressly discretionary terms,” the opinion states.

Biden’s attempt to terminate the policy, instituted by Trump in 2019, was challenged by a group of Republican-governed states led by Texas. 

These states argued that his move violated US immigration law by forcing authorities to release migrants they had detained onto US territory. They also said that Biden officials had not followed proper administrative procedure.

A lower court in August 2021 ruled against the Biden administration and the case eventually ended up before the nation’s highest court.

At first, the Supreme Court simply refused to freeze the lower court ruling, forcing the administration to restart the policy, formally called Migration Protection Protocols (MPP), while it pressed ahead with its appeal.

From the start of the policy in January 2019 until its suspension under Biden, nearly 70,000 people were sent back to Mexico, according to the American Immigration Council.

Since its most recent reinstatement, far fewer migrants have been sent back through the program.

During Biden’s tenure as president, more than 200,000 people attempting to enter the country illegally have been interdicted at the border each month and sent back, under MPP or a separate Covid-related policy blocking people at the border.

Illegal border crossings are often dangerous, both for the physical conditions in the region and mistreatment by human traffickers. This week 53 people died after being packed inside a tractor trailer truck without air conditioning that was later abandoned in San Antonio, Texas.

The American Civil Liberties Union praised the court’s ruling on Thursday.

“The Supreme Court was right to reject the spurious argument that this cruel policy is statutorily required,” said Judy Rabinovitz of the ACLU Immigrants’ Rights Project.

Ketanji Brown Jackson does not have the background typical of US Supreme Court judges, and not just because she will be first Black woman ever to serve at the pinnacle of the legal profession.

While many judges have made their mark as prosecutors, Jackson — who was sworn in on Thursday — spent two years as a federal public defender representing clients who could not afford their own lawyer.

The 51-year-old — who replaces retiring fellow Democratic appointee Stephen Breyer — has served on the US Sentencing Commission, an independent agency addressing disparities in jail terms.

And she has personal experience with the harsh sentences meted out for drug crimes in the United States — an uncle was sentenced to life in prison in 1989 for cocaine possession.

“For Ketanji, the law isn’t just an abstract set of concepts… Her family’s experience does inform her awareness of the real impact the law has on people’s lives,” a friend and former colleague from the public defender’s office told The Washington Post.

Jackson noted her non-traditional background in her 2021 Senate confirmation hearing for a seat on the US Circuit Court of Appeals.

“I’ve experienced life in perhaps a different way than some of my colleagues because of who I am, and that might be valuable — I hope it would be valuable — if I was confirmed to the court,” she said at the time.

Jackson spent more than 20 hours being grilled by senators in April this year as part of her Supreme Court confirmation process on her sentencing record, past statements and political views.

“I have dedicated my career to ensuring that the words engraved on the front of the Supreme Court building — equal justice under law — are a reality and not just an ideal,” the trailblazing jurist said.

– ‘Lovely one’ –

Her nomination hearings teased out Jackson’s approach to a wide array of legal matters, but also shone a light on the kind of person friends and family see when she is not in her judge’s robes.

They also allowed Jackson to flesh out her perspective on a milestone for Black American girls who rarely see powerful role models that look like them.

“Since I was nominated to this position, I have received so many notes and letters and photos from little girls around the country who tell me that they are so excited for this opportunity,” Jackson told senators.

Raised with an African given name that means “lovely one,” Ketanji Onyika Brown moved at a young age from the nation’s capital to the Miami suburbs.

Her interest in the law was inspired in part by her father, who earned his law degree after working as a teacher and went on to be the chief attorney for the Miami-Dade school system in Florida.

Jackson told the Senate Judiciary Committee she had learned the value of diligence and tenacity from her family, including uneducated grandparents who were the “hardest working people I’ve ever known.”

“I stand on the shoulders of people from that generation,” she said.

On her own role as a mother of two grown-up children and one of the country’s most high profile judges, she was disarmingly candid.

“Juggling motherhood and job responsibilities, I didn’t always get the balance right,” she said in an acknowledgement that will have struck a chord with working mothers nationwide.

– Political awakening –

Jackson’s political awakening began in the late 1980s, when a fellow freshman at Harvard hung a Confederate flag from his window and she joined protests of the “huge affront.”

She pursued her dream of becoming a lawyer after graduating in 1996, the year she married medic Patrick Jackson.

She worked for a series of elite law firms in Boston and Washington and as a law clerk for Breyer in 1999 and 2000.

Jackson became an assistant special counsel with the US Sentencing Commission in 2003 and worked for the Office of the Federal Public Defender in Washington from 2005 to 2007.

While she was at the public defender’s office, her father’s incarcerated older brother, Thomas Brown Jr, reached out to her asking for help getting him out of prison, according to the Post.

She passed on his appeal to a top private law firm and Brown eventually had his sentence commuted, in November 2016 by Barack Obama — one of hundreds of nonviolent drug offenders who had their sentences reduced during his presidency.

Her most notable ruling came in 2019 when she said a former White House counsel to president Donald Trump had to obey a congressional subpoena.

“Presidents are not kings,” Jackson wrote.

In March 2021, she was nominated by Biden to serve as a US Circuit Judge for the US Court of Appeals for the District of Columbia, a position seen as a springboard to the Supreme Court.

“I don’t think that race plays a role in the kind of judge that I have been and would be,” Jackson said during her Senate confirmation hearing.

“I’m looking at the arguments, the facts and the law. I’m methodically and intentionally setting aside personal views, any other inappropriate considerations.” 

The US Supreme Court ruled Thursday that the government’s key environmental agency cannot issue broad limits on greenhouse gases, sharply curtailing the power of President Joe Biden’s administration to battle climate change.

By a majority of 6-3, the high court found that the Environmental Protection Agency did not have the power to set sweeping caps on emissions from coal-fired power plants, which produce nearly 20 percent of the electricity consumed in the United States.

The decision sets back Biden’s hopes of using the EPA to bring down emissions to meet global climate goals, set in 2015 under the Paris Agreement on climate change.

It was a significant victory for the coal mining and coal power industry, which was targeted that same year for tough limits by the administration of then-president Barack Obama in an effort to slash carbon pollution.

It also marked a victory for conservatives fighting government regulation of industry, with the court’s majority including three right-wing justices named by former president Donald Trump, who had sought to weaken the EPA.

Conservatives cheered the decision, while the Biden administration blasted it for undermining the fight against global warming.

“This is another devastating decision from the Court that aims to take our country backwards,” the White House said in a statement.

– Caps ‘may be sensible but …’ –

In the case pitting West Virginia and other coal-mining states against the government, the court said that while EPA had the power to regulate individual plants, Congress had not given it such expansive powers to set limits for all electricity generating units.

The majority justices said they recognized that putting caps on carbon dioxide emissions to transition away from coal-generated electricity “may be a sensible solution” to global warming.

But they said the case involved a “major question” of US governance and jurisprudence and that the EPA would have to be specifically delegated such powers by the legislature.

“A decision of such magnitude and consequence rests with Congress itself, or an agency acting pursuant to a clear delegation from that representative body,” they said.

The three-member liberal minority of the court castigated the majority for overruling powers they said EPA did in fact have.

“Today, the court strips the Environmental Protection Agency of the power Congress gave it to respond to ‘the most pressing environmental challenge of our time,'” they said in a dissent written by Justice Elena Kagan.

“The stakes here are high,” Kagan wrote. “Whatever else this court may know about, it does not have a clue about how to address climate change.”

– Excessive regulation –

Conservatives and Republicans applauded the decision.

“The Court has undone illegal regulations issued by the EPA without any clear congressional authorization and confirmed that only the people’s representatives in Congress —  not unelected, unaccountable bureaucrats — may write our nation’s laws,” wrote Senate Republican leader Mitch McConnell, who represents Kentucky, a state with a significant coal mining industry.

Republican Representative Yvette Herrell called it a “huge win” for the American people.

“The EPA was created to control toxic pollutants, not CO2. The insane mission creep of regulating normal atmospheric gasses threatened the livelihood and prosperity of countless Americans,” she said in a tweet.

But Senate Democratic leader Chuck Schumer said the decision “will cause more needless deaths” from pollution and “exacerbate the climate crisis.”

Dan Lashof, director of the US arm of the World Resources Institute, said the ruling backed an effort by coal companies and Republican-led states “to cripple the EPA’s ability to address climate change.”

The ruling “makes it much harder for the agency to achieve its core mission to protect human health and the environment,” he said in a statement.

– Court conservatives show muscle – 

Thursday’s decision capped a term for the court in which the new conservative majority flexed its muscles in ways that will have profound effects on American society.

Two similar 6-3 decisions last week shook the country. One expanded the rights of gun owners to wear their guns wherever they go, with few limitations.

The second ended a half-century-old constitutional right to abortion, setting off a chain reaction in which more than half of the 50 states are moving to ban or severely restrict the practice.

The EPA ruling, too, could have profound impacts. 

Conservative Justice Neil Gorsuch wrote separately that the decision was a statement that no government agency can make policies with far-reaching effect without express empowerment by Congress.

“When an agency claims the power to regulate vast swaths of American life, it not only risks intruding on Congress’s power, it also risks intruding on powers reserved to the States,” Gorsuch wrote.

“The Court has taken a real step to check not only the EPA but all administrative agencies,” said conservative law expert Ilya Shapiro.