News of the Day

U.S. wholesale prices fell in March, a sign that inflationary pressures in the economy are easing more than a year after the Federal Reserve began aggressively raising interest rates.

Plunging energy prices pulled the government’s producer price index down 0.5% from February to March; it had been unchanged from January to February.  The Labor Department’s producer price index reflects prices charged by manufacturers, farmers and wholesalers. It can provide an early sign of how fast consumer inflation will rise.

A huge drop in wholesale gasoline accounted for much of the sharp slowdown in producer prices. But even excluding volatile food and energy prices, so-called core wholesale inflation fell 0.1% in March, the first such drop in nearly three years. The Fed and many private economists regard core prices as a better gauge of underlying inflation. Core wholesale inflation was up just 3.4% from March 2022, the lowest year-over-year rise since 2021.

Behind last month’s drop in core prices was a sharp decline in wholesale costs for warehousing and transportation. Overall services prices fell 0.3%, the first such drop since November 2020. Household appliance prices fell 1.4%, car prices 0.3%. But wholesale food prices rose 0.6%, including a 34% jump in egg prices.

Wholesale inflation has come down steadily — from a record 11.7% year-over-year increase in March 2022 — since the Fed began raising its benchmark interest rate to fight the worst inflation bout in four decades. Beginning in March of last year, the Fed has raised its key short-term rate nine times and is expected to do so again at its next meeting, May 2-3.

The Environmental Protection Agency proposed limits on vehicle emissions Wednesday that would require two-thirds of all new car and pickup truck sales and a quarter of heavy-duty trucks sold to be electric by 2032. That’s intended to meet President Joe Biden’s goal for electric cars to make up half of all new car sales by 2030. Nationally, electric vehicles made up nearly 6 percent of new car sales last year.

The announcement comes as Republican lawmakers in Wisconsin have introduced legislation to prevent state and local governments from barring the sale of vehicles based on their energy source. So far, seven states plan to ban sales of gas-powered vehicles after 2035.

In a hearing Tuesday, Rep. Ellen Schutt, R-Clinton, said the bill would prevent communities from barring sales of gas-powered cars and trucks, as well as prohibit banning sales of electric vehicles. Evers has set a goal for the state to go carbon-neutral by 2050, and Schutt noted other communities intend to “go green.”

“We just want to make sure that the government doesn’t get involved to reach their green energy goals by doing mandates,” Schutt said.

The Alliance for Automotive Innovation said in a memo the success of any proposed regulations would be tied to policies and favorable market conditions beyond electric cars that include affordability, utility capacity, charging infrastructure, supply chains and access to critical minerals.

Citing ongoing hurdles in those areas, Bill Sepic said the proposed rules don’t seem achievable in the proposed time frame. Sepic is president and CEO of the Wisconsin Automobile and Truck Dealers Association, which represents 700 licensed dealers statewide.

“Two years ago, we were at 3.2 percent of our vehicles (sold) were electric. That’s an astronomical leap,” Sepic said of the proposed regulations. “So, right now, you have a lot of concern, a lot of questions because there are no specifics that have been asked. This is a classic case of saying we’re going some place, we’re going to get there, but without a roadmap or a plan.”

The U.S. national emergency to respond to the COVID-19 pandemic ended Monday as President Joe Biden signed a bipartisan congressional resolution to bring it to a close after three years — weeks before it was set to expire alongside a separate public health emergency.

The national emergency allowed the government to take sweeping steps to respond to the virus and support the country’s economic, health and welfare systems. Some of the emergency measures have already been successfully wound-down, while others are still being phased out. The public health emergency — it underpins tough immigration restrictions at the U.S.-Mexico border — is set to expire on May 11.

The White House issued a one-line statement Monday saying Biden had signed the measure behind closed doors, after having publicly opposed the resolution though not to the point of issuing a veto. More than 197 Democrats in the House voted against it when the GOP-controlled chamber passed it in February. Last month, as the measure passed the Senate by a 68-23 vote, Biden let lawmakers know he would sign it.

The administration said once it became clear that Congress was moving to speed up the end of the national emergency it worked to expedite agency preparations for a return to normal procedures. Among the changes: The Department of Housing and Urban Development’s COVID-19 mortgage forbearance program is set to end at the end of May, and the Department of Veterans Affairs is now returning to a requirement for in-home visits to determine eligibility for caregiver assistance.

Yesterday, the United States Postal Service filed notice with the Postal Regulatory Commission (PRC) of mailing services price changes to take effect July 9, 2023. The new rates include a three-cent increase in the price of a First-Class Mail Forever stamp
from 63 cents to 66 cents.

The price for 1-ounce metered mail will increase to 63 cents, and the price to send a domestic postcard will increase to 51 cents. A 1-ounce letter mailed to another country would increase to $1.50. There will be no change to the single-piece letter and flat additional-ounce price, which
remains at 24 cents. The Postal Service is also seeking price adjustments for Special Services products including Certified Mail, Post Office Box rental fees, money order fees and the cost to purchase insurance when mailing an item.

The PRC will review the changes before they are scheduled to take effect. The complete Postal Service price filing, with prices for all products, can be found on the PRC website under the Daily Listings section at prc.gov/dockets/daily. The Mailing Services filing is Docket Number R2023-2. The price tables are also available on the Postal Service’s Postal Explorer website at pe.usps.com/PriceChange/Index.

The Public Service Commission of Wisconsin (PSC or Commission) today announced the creation of a new, additional area code to overlay the area in which the 920 area code is now in service. This area includes communities such as Appleton, Beaver Dam, Berlin, Fond du Lac, Fort Atkinson, Green Bay, Manitowoc, Oshkosh, Ripon, Sheboygan, Sturgeon Bay, and Watertown.

The 920 area code is expected to run out of assignable prefixes (the three numbers in a phone number following the area code) by the first quarter of 2024. The new 274 area code will be used to provide telephone numbers to new customers. All current customers will retain their existing telephone numbers and will continue to dial and receive calls without change.

The new 274 area code will be in service beginning May 5, 2023. NANPA will assign 274 area codes once all of the 920 area codes have been assigned, which could happen as soon as the end of the year.

An area code overlay adds a second area code to the geographic region served by the existing area code. Therefore, multiple area codes co-exist within the same geographic region. Customers will continue to dial the three-digit area code for all calls to and from telephone numbers with the 920 and 274 area codes. The price of a call will not change due to the overlay.

Customers can still dial just three digits to reach 911, as well as 211, 311, 411, 511, 611, 711, 811, and 988 – the new Suicide & Crisis Lifeline.

The Internal Revenue Service on Thursday unveiled its long-awaited spending plan for a controversial $80 billion cash infusion, pledging to hire thousands of new workers to audit wealthy Americans and big corporations.

The roadmap provides new details about how the tax-collecting agency will use the money over the next decade, including plans to modernize technology, improve customer service, deliver real-time alerts, provide “world-class” customer service and crack down on the so-called tax gap by enhancing enforcement of the wealthy.

The Treasury Department previously said the funding boost would allow the IRS to hire about 87,000 workers over the next 10 years, doubling the agency’s staff. However, the operating plan did not provide an estimate for the agency’s hiring plans beyond the next few years.

The IRS – which had about 78,700 employees as of 2021 – said that it plans to hire nearly 30,000 new employees by the end of fiscal year 2025, including 8,782 hires in enforcement and 13,883 in taxpayer services. The new enforcement employees will be “exclusively” focused on high-earning households, larger partnerships and companies, according to IRS Commission Danny Werfel.

The influx of money for the IRS over the next decade was included in the Democrats’ health care and climate change spending bill – dubbed the Inflation Reduction Act – that President Biden signed into law in August 2022. The funding is aimed at improving tax compliance among big corporations and wealthy Americans and shrinking the estimated $600 billion tax gap.

A bellwether of business conditions at U.S. companies fell to a three-month low of 51.2% in March and signaled slackening growth as strains mount on the economy.

The Institute for Supply Management’s services index fell from 55.1% in February.

Numbers above 50% indicate companies are expanding, but the latest survey suggests growth has taken a turn for the worse.

“The likelihood of a mild slowdown in the second half of 2023 or 2024 is still pretty high,” an executive at a professional company told ISM. “Layoffs will continue.”

The closely followed ISM reports are the first major indicators of each month to offer clues on how well the economy is performing. While the large service sector of the economy is still growing, manufacturers have fallen into a slump of sorts.

A Democratic-backed Milwaukee judge won the high stakes Wisconsin Supreme Court race Tuesday, ensuring liberals will take over majority control of the court for the first time in 15 years.  Milwaukee County Circuit Judge Janet Protasiewicz defeated former Justice Dan Kelly.

The new court controlled 4-3 by liberals is expected to decide a pending lawsuit challenging the state’s 1849 law banning abortion enacted a year after statehood. In addition to abortion, Protasiewicz’s win is likely to impact the future of Republican-drawn legislative maps, voting rights and years of other GOP policies. It will also ensure that liberals will have the majority leading up to the 2024 presidential election and immediately after.

Protasiewicz will serve a 10-year term starting in August replacing retiring conservative Justice Pat Roggensack.

Wisconsinites are heading to the polls to weigh in on an open state Supreme Court seat, three statewide referendums and a host of local candidates. Here’s what voters need to know before they cast their ballots.

Wisconsin Supreme Court

Although the race is officially nonpartisan, Milwaukee County Judge Janet Protasiewicz, a liberal, could shift the court’s ideological balance if she beats conservative former state Justice Daniel Kelly for a 10-year term.

Statewide Referendums

Questions 1 and 2 on statewide ballots would amend Wisconsin’s Constitution to expand criteria judges are directed to use when setting cash bail and other conditions that someone has to comply with to be released from jail before trial. A third non-binding question asks Wisconsinites their opinion on whether able-bodied adults should be required to look for work in order to receive taxpayer-funded welfare benefits.

A Crucial Election for the State Senate

In southeast Wisconsin, Republican Representative Dan Knodl and Democrat Jodi Habush Sinykin are competing for a District 8 state Senate seat that was vacated by a retirement.  The special election in an increasingly competitive district will determine whether Republicans secure a two-thirds majority in one chamber of the state Legislature.

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased 0.2% in February. Adjusting for inflation, consumer spending dipped 0.1%.

Consumers increased spending on housing and utilities as well as on healthcare, but cut back on spending at restaurants, bars and hotel accommodation. Overall, services spending rose 0.2% after advancing 1.2% in January.

Outlays on long-lasting manufactured goods dropped 1.4% as a plunge in purchases of motor vehicles offset gains elsewhere. Spending on nondurable goods increased 0.9%, reflecting higher gasoline prices. There were also increases in spending on pharmaceutical products as well as food and beverages.