Evelyn Reynolds

Blockades of U.S.-Canada border crossings could hurt the auto industry, factory workers and the economy, which are still recovering from pandemic disruptions.After two years of the pandemic, semiconductor shortages and supply chain chaos, it seemed as if nothing else could go wrong for the auto industry and the millions of people it employs. But then came thousands of truckers who, angry about vaccine mandates, have been blocking major border crossings between Canada and the United States.With Canadian officials baffled about what to do, the main routes that handle the steel, aluminum and other parts that keep car factories running on both sides of the border were essentially shut down Wednesday and Thursday.Ford Motor, General Motors, Honda and Toyota have curtailed production at several factories in Michigan and Ontario, threatening paychecks and offering a fresh reminder of the fragility of global supply chains and of the deep interdependence of the U.S. and Canadian economies, which exchange $140 million in vehicles and parts every day.No one knows how this is going to end. The protests are expected to swell in the coming days and could spread, including to the United States. Canada’s transport minister has called the bridge blockades illegal. Marco Mendicino, Canada’s minister of public safety, said on Thursday that the Royal Canadian Mounted Police, the national force, was sending additional officers to the Canadian capital, Ottawa, and to Windsor, Ontario. The mayor of Windsor has threatened to remove the protesters. But those statements have seemed to have little impact. Gov. Gretchen Whitmer of Michigan pleaded with Canadian officials to quickly reopen traffic.“They must take all necessary and appropriate steps to immediately and safely reopen traffic so we can continue growing our economy,” Ms. Whitmer said in a statement on Thursday.The chaos is already starting to take an economic toll. The pain is likely to be most acute for smaller auto parts suppliers, for independent truckers and for workers who get paid based on their production. Many of these groups, unlike large automakers like G.M., Ford and Toyota, lack the clout to raise prices of their goods and services. Companies and workers in Canada are more likely to suffer because they are more dependent on the United States.The longer crossings between the countries remain blocked, the more severe the damage, not only to the auto industry but also to the communities that depend on manufacturing salaries. Workers at smaller firms typically receive no compensation for lost hours, said Dino Chiodo, the director of auto at the giant Canadian union Unifor. Workers who have been sent home early because of parts shortages will spend less at stores and restaurants.“People say, ‘I have $200 less this week, what do I do?’” Mr. Chiodo said. “It affects the Canadian and U.S. economy as a whole.”Auto factories and suppliers in the United States generally keep at least two weeks of raw materials on hand, said Carla Bailo, the president of the Center for Automotive Research in Ann Arbor, Mich. If the bridges remain blocked for longer than that, she said, “then you’re looking at layoffs.”The blockades came after a demonstration in Ottawa that started nearly two weeks ago. The protests began over a mandate that truck drivers coming from the United States be vaccinated against the coronavirus and have grown to include various pandemic restrictions. Some have demanded that Prime Minister Justin Trudeau resign. The truckers have been joined by various groups, including some displaying Nazi symbols and damaging public monuments. Police in Ottawa said on Thursday that the protesters and their supporters, including some in the United States, had almost overwhelmed the city’s 911 system with calls.The crossing that has the auto industry and government officials most concerned is the Ambassador Bridge, which connects Windsor and Detroit. It carries roughly a quarter of the trade between the two countries, which has been relatively unrestricted for decades. While food and other products are also affected, about a third of the cargo that uses the bridge is related to the auto industry, Ms. Bailo said.The blockade has been felt as far south as Kentucky, where production has been disrupted at a Toyota factory, the company said on Thursday. The shutdown at the border also will prevent manufacturing at Toyota’s three Canadian plants for the rest of the week, a spokesman for the automaker, Scott Vazin, said.Demonstrators blocking access to the Ambassador Bridge in Windsor. The bridge accounts for roughly a quarter of the trade between the United States and Canada.Nathan Denette/The Canadian Press, via Associated PressG.M. said it had canceled two shifts on Wednesday and Thursday at a factory in Lansing, Mich., that makes Buick Enclave and Chevrolet Traverse sport utility vehicles. The company also sent workers from the first shift at a plant in Flint, Mich., home early. Ford said Thursday that plants in Windsor and Oakville, also in Ontario, were running at reduced capacity.Shortages of semiconductors and other components have not been all bad for giant automakers, creating scarcity that has driven up prices of cars in the last year. Ford and G.M. both reported healthy profits for 2021. And the economic damage will not be severe if the bridge and other crossings reopen soon, industry experts said.But the last two years have shown that, because supply chains are so complex, problems at obscure parts makers can have far-reaching and unpredictable impact. Last year, Ford had to shut down plants for weeks at a time in part because of a fire at a chip factory in Japan.“If it stretches on for weeks it could be catastrophic,” said Peter Nagle, an analyst who covers the car industry at IHS Markit, a research firm.Mr. Nagle said the bridge blockade was worse than the semiconductor shortage for carmakers. They “were already running pretty tight because of other supply chain shortages,” he said. “This is just bad news on top of bad news.”The auto industry operates relatively seamlessly across Canada, the United States and Mexico. Some parts can travel back and forth across borders multiple times as raw materials are processed and are turned into components and, eventually, vehicles.An engine block, for example, might be cast in Canada, sent to Michigan to be machined for pistons, then sent back to Canada for assembly into a finished motor. The blockades have stranded some truckers on the wrong side of the border, creating a chain reaction of missed deliveries.The slowdown in Canadian trade will disproportionately affect New York, Michigan and Ohio, said Arthur Wheaton, the director of labor studies at Cornell’s School of Industrial and Labor Relations. At the same time, he added, the protests were “certainly raising concerns for all U.S. manufacturers.”“There is already a shortage of truck drivers in North America, so protests keeping truckers off their routes exacerbates problems for an already fragile supply chain,” Mr. Wheaton said.Carmakers had hoped that shortages of computer chips and other components would ease this year, allowing them to concentrate on the long-term: the transition to electric vehicles.A larger fear for many elected officials and business executives is that the scene at the Ambassador Bridge could inspire other protests. The Department of Homeland Security warned in an internal memo that a convoy of protesting truckers was planning to travel from California to Washington, D.C., potentially disrupting the Super Bowl and President Biden’s State of the Union address on March 1.“While there are currently no indications of planned violence,” the memo, which was dated Tuesday, said, “if hundreds of trucks converge in a major metropolitan city, the potential exists to severely disrupt transportation, federal government operations, commercial facilities and emergency services through gridlock and potential counter protests.”Mr. Chiodo, the Canadian union leader, said that “the people who are demonstrating are doing it for the wrong reasons. They want to get back to the way things were before the pandemic, and in reality they are shutting things down.”The scene in Ottawa remained a raucous party Thursday, with hundreds of people on the street, many wearing Canadian flags like capes. The song “Life Is a Highway,” by the Canadian musician Tom Cochrane, pumped from loudspeakers set up on the back of an empty trailer that had been converted into a stage.But there was a thinning out of protesters — with some empty spaces where trucks had been the day before.Johnny Neufeld, 39, a long-haul trucker from Windsor, Ontario, said the vaccine mandate would spell the end of his job transporting molds into the United States since he had chosen not to be inoculated out of fear the shots had been developed too quickly. He got his first ticket from the police Thursday morning, a fine of 130 Canadian dollars (about $100) for being in a no-stopping zone.“This is a souvenir,” he said.Dan Bilefsky More

General Motors is the latest automaker to suspend production because of protests at a crucial Canadian border crossing that have disrupted supply chains already in turmoil because of the pandemic.G.M. said it had canceled two shifts on Wednesday and Thursday at a factory in Lansing, Mich., that makes sport utility vehicles. The plant depends on components that normally travel across a bridge between Windsor, Ontario, and Detroit that was closed by truck drivers and far-right groups angry about vaccine mandates and demanding the resignation of Prime Minister Justin Trudeau.Ford Motor and Toyota have also shut down some operations because factories could not get parts manufactured in Canada.The shutdown at the border will prevent manufacturing at Toyota’s three Canadian plants for the rest of this week, Scott Vazin, a spokesman for Toyota Motor North America, said Thursday.As long as the shutdowns are short lived, the impact on automaker sales and worker livelihoods should be limited. Companies are likely to make up for any lost production by running extra shifts or other measures.“A couple of days shouldn’t be that significant,” Mr. Vazin said. “We’re certainly hoping the blockade ends.”Said Deep, a spokesman at Ford, said Thursday morning that the company was running its plants in Oakville and Windsor, both in Ontario, at reduced capacity.“This interruption on the Detroit-Windsor bridge hurts customers, autoworkers, suppliers, communities and companies on both sides of the border that are already two years into parts shortages resulting from the global semiconductor issue, Covid and more,” Mr. Deep said. “We hope this situation is resolved quickly because it could have widespread impact on all automakers in the U.S. and Canada.”John Bordignon, a spokesman for Honda Canada, said Thursday morning that the company’s plant in Alliston, Ontario, had temporarily suspended one production line Wednesday evening but was back online on Thursday.The company will continue to monitor the flow of goods between Canada and the United States, and further disruptions were “certainly possible,” he said.Protesters challenging Canada’s vaccine requirements and other pandemic restrictions began cutting off traffic Monday on the Ambassador Bridge, the vital span that connects Detroit and Windsor.The bridge accounts for roughly a quarter of the trade between the United States and Canada. Trucks carry an estimated $300 million worth of goods across the bridge each day, about a third of which are related to the automobile industry.Companies have begun rerouting shipments to alternative crossing routes, like the Blue Water Bridge, which links Port Huron, Mich., and Sarnia, Ontario. But a new blockade on Wednesday on a route to that bridge, as well as a surge of diverted cars and trucks, slowed traffic there.The closings are likely to lead to losses for other industries, as well. On Wednesday, Jen Psaki, the White House press secretary, said that the Biden administration was tracking potential disruptions to agricultural exports to Canada.Gretchen Whitmer, the governor of Michigan, said in a statement on Thursday that the blockade was putting the state’s economy at risk.“The blockade is having a significant impact on Michigan’s working families who are just trying to do their jobs,” she said. “Our communities and automotive, manufacturing, and agriculture businesses are feeling the effects.”Carmakers worldwide have struggled with shortages of semiconductors and other parts that severely curtailed production and sales. They had hoped that the flow of components and materials would start to return to normal this year.Ford said last Friday that it would be forced to shut down some production lines and reduce work hours at plants across North America this week because of chip shortages.Most carmakers operate on a “just-in-time” system that dispatches parts and materials to their factories as they are needed. The system has helped manufacturers reduce costs.But it has also left companies vulnerable as the pandemic closed foreign ports and factories and overloaded shipping companies, warehouses and truckers.David C. Adams, the president at Global Automakers of Canada, which represents Toyota and Honda, said auto facilities typically had about two days of inventory on hand. “Then things start to become problematic in terms of having enough parts to keep the lines running.” More

“Real” hourly earnings (wage growth minus inflation) fell by 1.7% from January 2021 to January 2022, the U.S. Department of Labor said Thursday.
Employers have raised pay to attract workers in a competitive job market. But consumer prices rose at their fastest annual rate in 40 years.
There are indicators workers may start reclaiming some of their purchasing power. Some industry pay has even outpaced inflation over the past year.

People shop at a Los Angeles retail outlet on Jan. 28, 2022.
FREDERIC J. BROWN | AFP | Getty Images

High inflation overshadowed a big increase in wages over the past year, amounting to a nearly 2% smaller paycheck for the average worker, according to federal data published Thursday.
Employers have raised wages at about the fastest rate in 15 years, as they compete for talent amid record job openings and quit levels. But consumer prices for goods and services are rising at their fastest annual pace in four decades, eroding those gains for many Americans.

As a result, “real” hourly wages (earnings minus inflation) fell by 1.7%, to $11.22 from $11.41, in the 12 months through January 2022, the U.S. Department of Labor said Thursday.
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Net weekly earnings fell more over the same period — by 3.1%, to $387.06 from $399.52 — after accounting for a shorter workweek, likely due to pandemic-related impacts on worker schedules.
“The price pressures on households just don’t end,” according to Greg McBride, the chief financial analyst at Bankrate.
However, substantial pay boosts in some industries, like leisure and hospitality, means some workers still came out ahead.

And data suggests the trend may be reversing — the average worker saw their pay outpace inflation by 0.1% from December to January. It was the second consecutive monthly improvement in “real” earnings.
“You’re seeing it beat inflation, just barely,” said Elise Gould, a senior economist at the Economic Policy Institute, a left-leaning think tank.

If that monthly trend holds, workers would start to see an increase in their purchasing power, Gould said.
However, the direction of inflation and wages in coming months is difficult to predict.
The Federal Reserve is expected to start raising interest rates in March to bring inflation to heel — though it’s unclear how aggressively Fed officials will do so. And many economists believe inflation will moderate in 2022 if supply-chain issues improve and elevated consumer demand for physical goods decreases, for example.
It’s also unlikely the current pace of wage growth will continue if the pandemic recedes and workers are drawn back into the labor pool, Gould said. That would increase the supply of workers, making it easier to hire.

Inflation and wage growth

The Consumer Price Index, a key inflation measure, jumped 7.5% in January from a year earlier, the fastest rate since February 1982, the Labor Department reported Thursday.
The index accounts for household costs across many goods and services, from alcohol to fruit, airfare, firewood, hospital services and musical instruments. On average, a consumer who paid $100 a year ago would pay $107.50 today.
Meanwhile, average hourly wages grew 5.7% in January relative to a year earlier, to $31.63, according to a separate Labor Department report, published Friday.
But inflation and pay don’t impact households equally — these are average statistics.

About half of the inflation growth in the past 12 months is attributable to energy (like gasoline), vehicles (new and used cars) and “pandemic-affected services” like airfare, hotels and event admissions, according to the White House Council of Economic Advisers.
Consumers who didn’t buy such goods and services would have kept more of their paychecks intact.
Monthly growth in consumer prices have decelerated since October, suggesting a slowdown in inflation. But inflation has also become more broad-based, affecting household staples like food, utilities and housing.
“Not only have home prices jumped 20% in the past year, but now many rents are too, rising 0.5% in the past month alone,” McBride said. “Nothing squeezes household budgets more than the outsized increases we’re currently seeing on costs for shelter and rent.”

Rank-and-file workers in some industries have seen their pay growth eclipse inflation, sometimes by a wide margin.
For example, leisure and hospitality workers (those at restaurants, bars and hotels) saw average pay jump 15%, to $17.08 an hour, in the 12 months through January 2022. Earnings jumped by 9.1% among the rank-and-file in transportation and warehousing, too.
Some of the annual inflation is also due the so-called “base effects,” Gould said. This means the current rate of inflation is being judged against January 2021, when consumer prices for gasoline and other items were depressed during the pandemic — amplifying the headline figure, she said.

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A survey finds that Americans’ top money concerns include rising gas prices, inflation and paying their bills.
Yet more than one-third of respondents are not investing any money at all, a key way to ensure their money grows faster than rising prices.
“There’s maybe barriers they’re dealing with, such as living paycheck to paycheck and not being able to save or invest,” one expert says.

Gasoline prices are displayed at a Los Angeles gas station on Feb. 8, 2022.
Mario Tama | Getty Images

As inflation climbs to historic highs, rising gasoline and other consumer prices are among Americans’ top concerns, a survey finds.
Yet more than one-third of respondents — 35% — have no investment account or any investments at all, the survey from eMoney Advisor found, even though investing would be a good way to have their money grow faster than inflation.

When asked what their biggest concerns were for 2022, the top responses included gas prices, with 43%; followed by paying bills, 42%; and inflation, 40%. Other worries included retirement savings, with 33% of respondents, and taxes, 32%.
“This survey is really showing that there’s a lot of financial anxiety that’s caused by inflation, market volatility and just that uncertainty coming out of the pandemic and the impact that that’s had on everyone in their everyday lives,” said Celeste Revelli, a certified financial planner and director of financial planning at eMoney.
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The survey, which included 2,000 adults ages 18 and up, was conducted in mid-December.
Government data for January released Thursday showed inflation notched a new record. The Consumer Price Index, which measures the costs of consumer goods, climbed 7.5% compared to one year ago, the highest reading since 1982.

Moreover, the national average for a gallon of gas hit a seven-year high last week, coming in at $3.423, according to AAA.
The eMoney survey respondents who are investing are turning to assets including stocks, with 48%; cryptocurrencies, 43%; mutual funds, 41%; and real estate and bonds, each with 36%.
But the lack of participation in any investments from more than a third of respondents points to bigger financial problems Americans may be dealing with in the current economic environment.

“What we’re uncovering here is a deeper need for Americans who currently aren’t being served by financial services,” Revelli said.
“There’s maybe barriers they’re dealing with, such as living paycheck to paycheck and not being able to save or invest,” she said.
Another survey from TIAA found that just 22% of respondents gave themselves the highest scores on financial wellness — a 9 or 10 on a scale of 1 to 10. Meanwhile, 21% of respondents gave themselves the lowest scores of 1 to 4.
When it comes to beating inflation, financial advisors generally recommend investing in equities, which have a record of surpassing consumer prices over time.
And other tips, such as negotiating down your debts, paring back your lifestyle and reducing your gas consumption where you can, can also help, experts say.

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Year-over-year changes in the Consumer Price Index
Not seasonally adjustedSource: Bureau of Labor StatisticsBy The New York TimesWant an optimistic take on the troubling January inflation report? Look at what’s happening with cars.Want a pessimistic take? Look at what’s happening with cars.New-car prices have skyrocketed over the past year, rising 12.2 percent as supply-chain disruptions and other issues have made it hard for manufacturers to keep up with strong consumer demand. Used-car prices are up by a remarkable 40.5 percent. Those rapid price gains have been a big factor in overall inflation, accounting for close to a quarter of the one-year increase in the Consumer Price Index.Optimists, including White House officials, have pointed to car prices as evidence that the recent bout of high inflation is likely to prove short-lived. The car market has been disrupted by a confluence of unusual forces, most of them related to the pandemic. As those forces recede, auto production should return to normal, and prices should moderate, or perhaps fall outright.The data released on Thursday provided support for that narrative. New-car prices were flat in January compared with December. Used-car prices rose 1.5 percent, their slowest pace since September, and data on wholesale prices suggests that moderation is likely to continue. Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a note to clients that he expects both new and used vehicle prices to fall in coming months, which would help bring down inflation overall.But a new development is threatening that progress. Protesters in Canada have blockaded some of the busiest routes linking Canada to the United States, disrupting supply chains of some of the biggest automakers. Ford, Toyota and General Motors have all had to pause production or reduce output at some plants as a result of the protests.It isn’t clear how long those disruptions will last, or how much of an impact they will have on auto supplies. But if they prevent the car market from returning to normal as quickly as expected, that could delay the moderation in inflation that economists had expected to see and that the Biden administration had been counting on. More

The consumer price index for all items rose 0.6% in January, driving up annual inflation by 7.5%.
That marked the biggest gain since February 1982 and was even higher than the Wall Street estimate.
Core inflation rose 6%, which also was a notch above expectations.
Real earnings for workers increased just 0.1% on the month when accounting for inflation.
Weekly jobless claims declined to 223,000, below the 230,000 estimate.

Consumer prices surged more than expected over the past 12 months, indicating a worsening outlook for inflation and cementing the likelihood of substantial interest rate hikes this year.
The consumer price index for January, which measures the costs of dozens of everyday consumer goods, rose 7.5% compared with a year ago, the Labor Department reported Thursday.

That compared with Dow Jones estimates of 7.2% for the closely watched inflation gauge. It was the highest reading since February 1982.

Stripping out volatile gas and grocery costs, the CPI increased 6%, compared with the estimate of 5.9%. Core inflation rose at its fastest level since August 1982.
The monthly CPI rates also came in hotter than expected, with headline and core CPI both rising 0.6%, compared with the estimates for a 0.4% increase by both measures.
Stock market futures declined following the report, with rate-sensitive tech stocks hit especially hard. Government bond yields rose sharply, with the benchmark 10-year Treasury note touching 2%, its highest since August 2019.
Markets also got more aggressive in pricing rate hikes ahead.

The chances of a 0.5 percentage point Fed rate increase in March rose to 44.3% following the data release, compared with 25% just before, according to CME data. Chances of a sixth quarter-percentage point hike this year rose to about 63%, compared with about 53% before the release.
“With another surprise jump in inflation in January, markets continue to be concerned about an aggressive Fed,” said Barry Gilbert, asset allocation strategist at LPL Financial. “While things may start getting better from here, market anxiety about potential Fed overtightening won’t go away until there are clear signs inflation is coming under control.”

Food, shelter costs up sharply

The inflation numbers come at a crossroads for the U.S. economy, with 2021’s rapid growth pace expected to slow this year as fiscal and monetary stimulus fades. Growth is still expected to be above trend, though sharper rate increases from an inflation-fighting Fed could prove troublesome.
On a percentage basis, fuel oil rose the most in January, surging 9.5% as part of a 46.5% year-over-year increase. Energy costs overall were up 0.9% for the month and 27% on the year.
Vehicle costs, which have been one of the biggest inflation contributors since they began surging higher in the spring of 2021, were flat for new models and up 1.5% for used cars and trucks in January. The two categories have posted respective increases of 12.2% and 40.5% over the past 12 months.
Shelter costs, which make up about one-third of the total CPI number, increased 0.3% on the month, which is the smallest gain since August 2021 and slightly below December’s rise. Still, the category is up 4.4% over the past year and could keep inflation readings elevated in the future.
Food costs jumped 0.9% for the month and are up 7% over the past year.
That combination of higher food and housing prices “underlines our view that a rapid cyclical acceleration in inflation is underway and, with labor market conditions exceptionally tight, it is unlikely to abate any time soon,” wrote Andrew Hunter, senior U.S. economist at Capital Economics.
“While we still expect more favorable base effects and a partial easing of supply shortages to push core inflation lower this year, this suggests it will remain well above the Fed’s target for some time,” he added.
The burst in inflation has muted the sizeable earnings growth workers have seen. Real average hourly earnings rose just 0.1% for the month, as the 0.7% monthly gain in wages was almost completely wiped out by the 0.6% inflation gain.
A separate report Thursday showed that weekly jobless claims totaled 223,000 for the week ended Feb. 5, a decline of 16,000 from the previous week and below the 230,000 estimate. It was the lowest total since Jan. 1.

Continuing claims, which run a week behind, held at 1.62 million. The total of those receiving benefits under all programs rose slightly to about 2.1 million, according to Labor Department data through Jan. 22.

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Inflation in countries using the euro, which has soared to record-setting heights in recent months, is expected to peak in the first quarter of this year, the European Commission said on Thursday, as consumers feel the bite of higher energy prices and rising costs of key goods.Euro area inflation for the January-March period will reach 4.8 percent, up from 4.6 percent in the fourth quarter of last year, which was a record since the bloc started measuring inflation collectively in 1997, the commission said in its quarterly economic forecast. Inflation is expected to move down over the course of the year, but it won’t reach the 2 percent benchmark target set by the European Central Bank until 2023, the forecast said.Economies will continue to grow as the impacts of the pandemic ease, by an expected 4 percent in the euro area this year, according to the forecasts, and by the end of this year will have recovered all their pandemic-era economic losses.But inflation will outpace that average rate of economic expansion, eroding gains and the benefits that such growth would otherwise bring to Europeans.In comments to the news media, Paolo Gentiloni, the European commissioner for the economy, said that the mix of high energy prices and persistent staff shortages caused by the coronavirus were hitting Europe’s economic recovery.“Supply constraints have grown and energy prices have continued to be very high,” Mr. Gentiloni said. “This has contributed to dent further manufacturing production and again pushed inflation above expectations, with a negative impact on consumers’ purchasing power.” More

Consumer Price Index data released on Thursday could show the biggest annual price increase since early 1982.A key inflation measure set for release Thursday morning is expected to show that prices continued to climb at the fastest pace in 40 years.But the data could also show some moderation in how much costs are going up each month — a potential silver lining as consumers wait for price pressures to lessen after a bruising year.Economists expect the Consumer Price Index data for January to show that prices climbed by 7.2 percent over the past year, up from 7 percent in December. That would be the fastest clip since February 1982.But prices are expected to have climbed 0.4 percent in January from the prior month. That is unusually rapid, but it is a moderation from the biggest monthly increases last year, which came in as high as 0.9 percent.Forecasters anticipate that inflation will ease meaningfully in 2022: Many expect it to finish the year closer to 3 percent. But economists regularly predicted that price gains would fade quickly in 2021, only to have those projections foiled as booming consumer demand for goods collided with roiled global supply chains that could not ramp up production fast enough.The recent spike in prices for food, fuel, cars and other goods has become a problem for both the Federal Reserve, which is responsible for keeping prices stable, and the White House, which has found itself on the defensive as rising costs eat away at household paychecks and detract from a strong labor market with solid wage growth.On Wednesday, Jen Psaki, the White House press secretary, tried to put a positive spin on the numbers, acknowledging that the data to be released Thursday would most likely show a high reading for the year but that the trajectory is for prices to decrease.“We expect a high year inflation rate reading in tomorrow’s data, given what we know about the last year,” Ms. Psaki said, adding that “it’s not about the recent trends.”“Inflation is expected to decrease over the course — and moderate — over the course of this year,” she said.Even so, the new data could add to the urgency for the Fed to begin weaning the economy off the rock-bottom interest rates that have been in place since March 2020.Fed officials have signaled that they will begin raising rates at their meeting next month. Higher rates can slow down consumer and business spending by making it more expensive to finance a car, house or machine purchase. Policymakers have also suggested that they will soon begin to shrink their balance sheet of bond holdings, which should push up longer-term interest borrowing costs and further cool off the economy.Investors now expect that central bankers might lift interest rates six times this year as they try to slow down the economy and tamp down price gains. More