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US inflation slows in November in smallest spike in year

| By AFP | Beiyi Seow |

US consumer inflation eased in November, according to government data released Tuesday, bringing some relief to policymakers with the smallest annual increase in nearly a year.

Officials are closely eying the monthly inflation report for signs that painfully high consumer prices are definitively moderating at last, as surging costs of living force households to dip into their savings.

The consumer price index (CPI), a closely-watched measure of inflation, jumped 7.1 percent from a year ago, down from 7.7 percent in October, according to Labor Department figures.

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But the overall number is still about three times the pre-pandemic pace.

Prices ticked up 0.1 percent from October to November, a smaller-than-expected increase after a prior 0.4 percent jump, the latest data showed.

President Joe Biden reacted with cautious optimism about the US economy, saying the figures gave “a reason for some optimism for the holiday season and I would argue for the year ahead.”

Core prices, which exclude the volatile food and energy segments, rose 0.2 percent in November, down from a 0.3 percent pick-up in October.

“The index for shelter was by far the largest contributor to the monthly all items increase, more than offsetting decreases in energy indexes,” the Labor Department said in a statement.

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Food inflation nudged up as well, underscoring the financial squeeze that households are still experiencing.

While an improvement from before, the data likely reinforces official views that costs remain far too high, and US central bankers are poised to push on in their quest to cool the world’s biggest economy.

The Federal Reserve has raised the benchmark lending rate six times this year in hopes of lowering demand, walking a fine line between reining in prices and triggering a recession.

The lower inflation figure is likely to fuel optimism for easing in the Fed’s aggressive campaign as its policy-setting committee starts a two-day meeting Tuesday that is widely expected to culminate in a smaller rate hike.

Right direction

Consumer inflation remains much higher than the Fed’s longer-term goal of two percent, even as prices are “moving in the right direction,” said economist Rubeela Farooqi of High Frequency Economics Tuesday.

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But “further sustained improvement” over the coming months could allow the Fed to slow its pace of rate hikes more, she added.

While goods prices are decelerating, they still contribute heavily to CPI changes and a reversal of the trend will take time, she warned in an earlier analysis.

James Knightley of ING told AFP that while the asking price for rents appears to be falling in many cities, most people are still paying “considerably more” than last year.

Analysts have also been watching price increases in services, given that quickly rising wages feed into this segment and “continue to run hot,” he noted.

“This is clearly an area of concern for the Fed,” he said.

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International

Up to 13 hours of power cuts in Ecuador due to severe drought

Ecuador lives this Thursday with power cuts of up to 13 hours, a measure caused by the reduction of hydroelectric energy generated due to the drought and that led the Government to ask, without much success, that working hours be suspended.

The reservoirs register alarming storage levels on the eve of the holding of a binding referendum on the measures proposed by President Daniel Noboa to try to tackle the growing violence linked to drug trafficking.

The movement in the large urban transport stations of Quito was the usual one, despite the Government’s request. The buses left for several points in the capital, bypassing the lack of traffic lights in some sectors, where the electricity service had been suspended.

The cuts began on Sunday without warning, for shorter periods, but they have been getting longer with the passage of the days.

“Yesterday I was taken from eight to eleven (in the morning) and it is the time it takes to work. Today with eight hours (of suspension) it will be worse, it affects us a lot,” Segundo Guacho tells AFP.

The 45-year-old man owns a computer rental business in downtown Quito and maintains that in three days he has lost about $200 in income due to the interruption of the service.

The Executive suspended the working day in the public and private sectors on Thursday and Friday, as well as classes, after announcing that the Mazar (the most important) and Paute reservoirs, both in the south of the Andean area, are in “critical conditions” by registering storage levels of 0% and 4%, respectively.

The flow rate in the largest hydroelectric power plant, Coca Codo Sinclair (northern Amazon), with the capacity to generate 1,500 MW of power to cover 30% of national demand, is 60% of the historical average.

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International

U.S. Department of Justice. The United States will have to pay $100 million to the victims of Larry Nassar

The U.S. Department of Justice will pay $100 million to resolve lawsuits against the FBI for mishandling of the investigation into sexual abuse committed by former U.S. gymnastics team doctor Larry Nassar, the Wall Street Journal reported on Thursday.

The newspaper said that the agreement involves 100 victims of Nassar, who was convicted in late 2017 and early 2018 for sexually assaulting hundreds of athletes and is serving a sentence of up to 175 years in prison.

Olympic gold medalists Simone Biles, Aly Raisman and McKayla Maroney and other American gymnasts filed a billion dollar lawsuit against the FBI in June 2022 for not having acted properly to reports of sexual abuse by Nassar.

The Journal indicated that the agreement was reached several months ago and was initially accepted by the victims of Nassar, but it has not been finalized.

Citing a report by the inspector general of the Department of Justice, the newspaper said that there were multiple failures in the handling by the FBI of the complaints against Nassar filed by USA Gymnastics to the local FBI office in Indianapolis in July 2015.

The lack of action in the face of the complaints allowed Nassar to continue sexually assaulting dozens of victims before his arrest in 2016.

Nassar worked as a sports doctor at the U.S. Gymnastics Federation (USA Gymnastics) and at Michigan State University for more than two decades.

FBI director Christopher Wray acknowledged the organization’s failures during a testimony before a Senate committee in September 2021, saying that they were “unforgivable.”

Addressing the victims of Nassar, Wray said: “I especially regret that there were people in the FBI who had their own chance to stop this monster in 2015 and failed.”

The victims of Nassar reached a $380 million agreement with USA Gymnastics in 2021, one of the largest ever registered for victims of sexual abuse.

USA Gymnastics filed for bankruptcy in 2018 after a wave of accusations against Nassar flooded the organization.

Michigan State University reached a $500 million settlement with hundreds of Nassar victims in 2018.

Nassar was stabbed by another inmate in July last year in the state of Florida prison where he is serving his sentence but recovered from his injuries.

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International

The United States deported 52 migrants to Haiti

About fifty Haitians who were illegally in the United States were deported on Thursday by U.S. authorities to their country, hit by gang violence, a Haitian immigration official told AFP.

A total of 40 men and 12 women landed on Thursday at Cap-Haitien International Airport, the country’s second city, the official said.

At the end of March, more than 480 human rights organizations requested “a moratorium on expulsions to the Republic of Haiti” in a letter addressed to U.S. President Joe Biden, his Secretary of State, Antony Blinken, and his Secretary of Immigration, Alejandro Mayorkas.

“Today, due to the lack of functioning institutions, armed groups terrorize the population through systematic rapes, indiscriminate kidnappings and mass murders, with total impunity,” they stressed.

The United States, the European Union and the UN evacuated a large part of their staff in March due to the instability prevailing in Haiti.

The nine members of the Presidential Transitional Council in Haiti were appointed on Tuesday by official decree.

This Council must guarantee a transition when the questioned Prime Minister Ariel Henry, who agreed to resign in March, effectively leaves his position, paving the way for a presidential election. Henry has been out of the country for several weeks.

Without a president or parliament, Haiti has not had elections since 2016. The capital is 80% in the hands of criminal gangs, accused of numerous abuses, in particular murders, rapes, looting and extortionative kidnappings.

The International Organization for Migration (IOM) said last week that almost 100,000 people had fled the metropolitan area due to the increase in gang attacks.

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