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Inflation has risen in three of the last four months and is slightly higher than it was a year ago, when it helped sink then-Vice President Kamala Harris’ presidential campaign. Yet you wouldn’t know it from listening to President Donald Trump or even some of the inflation fighters at the Federal Reserve.Trump told the United Nations General Assembly late last month: “Grocery prices are down, mortgage rates are down, and inflation has been defeated.”And at a high-profile speech in August, just before the Fed cut its key interest rate for the first time this year, Federal Reserve Chair Jerome Powell said: “Inflation, though still somewhat elevated, has come down a great deal from its post-pandemic highs. Upside risks to inflation have diminished.”Yet dismissing or even downplaying inflation while it is still above the Fed’s target of 2% poses big risks for the White House and the Federal Reserve. For the Trump administration, it could find itself on the wrong side of a potent issue: Surveys show that many Americans still see high prices as a major burden on their finances.The Fed may be taking an even bigger gamble: It has cut its key interest rate on the assumption that the Trump administration’s tariffs will only cause a temporary bump up in inflation. If that turns out to be wrong if inflation gets worse or remains elevated for longer than expected the Fed’s inflation-fighting credibility could take a hit.That credibility plays a crucial role in the Fed’s ability to keep prices stable. If Americans are confident that the central bank can keep inflation in check, they won’t take steps such as demanding sharply higher pay when prices rise that can launch an inflationary spiral. Companies often increase prices further to offset higher labor costs.But Karen Dynan, a senior fellow at the Peterson Institute for International Economics, said this week that with memories of pandemic-era inflation still fresh and tariffs pushing up the cost of imported goods, consumers and businesses could start to lose confidence that inflation will stay low.“If that proves to be the case, in hindsight it will be that the Fed cuts and I do expect several more are going to be seen as a mistake,” Dynan said.So far, the Trump administration’s tariffs haven’t lifted inflation as much as as many economists expected earlier this year. And it remains far below its 9.1% peak three years ago. Still, consumer prices increased 2.9% in August from a year earlier, up from 2.6% at the same time last year and above the Fed’s 2% target.The government is scheduled to release the September inflation report on Wednesday, but the data will probably be delayed by the government shutdown.Tariffs have pushed up the cost of many imported items, including furniture, appliances, and toys. Overall, the cost of long-lasting manufactured goods rose nearly 2% in August from a year earlier. It was a modest gain, but comes after nearly three decades when the cost of such items mostly fell.The cost of some everyday goods are still rising more quickly than before the pandemic: Grocery prices moved up 2.7% in August from a year ago, the largest gain, outside the pandemic, since 2015. Coffee prices have soared nearly 21% in the past year, partly because Trump has slapped 50% import taxes on Brazil, a leading coffee exporter, and also because climate change-induced droughts have cut into coffee bean harvests. Most Fed officials are still concerned that inflation is too high, according the minutes of its Sept. 16-17 meeting. Yet they still chose to cut their key interest rate, because they were more worried about the risk of worsening unemployment than about higher inflation.But the concern for some economists is that the ongoing rollout of tariffs and the fact that many companies are still implementing price hikes in response could result in more than just a temporary boost to inflation.“It is a big gamble after what we’ve been going through to count on it being transitory,” said Jason Furman, an economist at Harvard University and a former top adviser to President Barack Obama. “Once upon a time, (3% inflation) would have been considered really high.”Just two weeks ago, Trump slapped new tariffs on a range of products, including 100% on pharmaceuticals, 50% on kitchen cabinets and bathroom vanities, and 25% on heavy trucks. On Friday, he threatened “a massive increase of tariffs” on imports from China in response to that country’s restrictions on rare earth exports.Some companies are still raising prices to offset the tariff costs. Duties on steel and aluminum imports have pushed up the cost of the cans used by Campbell Soups, leading the company’s CEO to say in September that it will implement “surgical pricing initiatives.”Chris Butler, CEO of National Tree Company, the nation’s largest artificial Christmas tree seller, says his company will raise prices by about 10% this holiday season on its trees, wreaths, and garlands to offset tariff costs. About 45% of its trees are made in China, with the rest from Southeast Asia, Mexico, and other countries. The cost of labor and real estate is too high to make them in the United States, he said.Butler also expects there will be a reduced supply of artificial trees and decorations this year, which could lift industry-wide prices further, because most production in China shut down when tariffs on that country hit 145% earlier this year. Production resumed after Trump reduced the duties to 30% but at a slower pace.Butler has pushed his suppliers to absorb some of the cost of the tariffs, but they won’t pay all of it.“At the end of the day, we can’t absorb the entirety of it and our factories can’t absorb the entirety of it,” he said. “So we’ve had to pass along some of the increases to consumers.”Many Fed policymakers are aware of the risks. Jeffrey Schmid, president of the Federal Reserve Bank of Kansas City, who votes on interest rate decisions, said Monday that high inflation that results from a loss of confidence in the central bank is harder to fight than other price spikes, such as those that result from supply disruptions.“The Fed must maintain its credibility on inflation,” Schmid said. “History has shown that while all inflations are universally disliked, not all inflations are equally costly to fight.”Yet some Fed officials say that other trends are offsetting the impact of tariffs. Fed governor Stephen Miran, whom Trump appointed just before the central bank’s September meeting, said Tuesday that a steady slowdown in rental costs should reduce underlying inflation in the coming months. And the sharp drop in immigration as a result of the administration’s clampdown will reduce demand, he said, cooling inflation pressures.“I’m more sanguine about the inflation outlook than a lot of other people are,” he said. Christopher Rugaber, AP Economics Writer
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E-Commerce
Weve spent the better part of the past few years glued to our screensclicking, swiping, streaming. Endless tabs, endless scrolls. And yet, despite all the infinite access, we’re still craving the one thing the web cannot render: real presence. That collective craving has rewritten the rules of marketing. Five years after COVID, brands are finding the antidote to Zoom fatigue by showing up in person again. Canva, the Australian graphic design platform, is moving quickly to meet this demand with the launch of the Canva World Tour, a global initiative spanning 40 cities across 30 countries and five continents, with the goal of training one million people in just a month. The tour features 250 workshops and community-led sessions, from campus pop-ups to hands-on tutorials and certification programs. With a massive online footprint1 in 24 internet users worldwideCanva boasts 240 million monthly active users across 190 countries and 100 languages, generating more than 370 designs every second. Amid a booming online presence, its move to live events is about taking the experience from URL to IRL, Jimmy Knowles, Canva’s global head of experiential, told Fast Company. Its not the first time Canva has embraced face-to-face interactions. This year, Canva Create, the companys annual event, had a tentpole moment with 105 speakers across six stages, drawing more than 4,300 attendees in person at California’s SoFi Stadium, with 6.6 million tuning in online. Knowles describes the events as a chance to be unapologetically ourselves, adding, Tech brands are all straight lines and rounded boxes, as opposed to coloring outside the lines. [Photo: Canva] Experience the economy Canva’s headfirst dive into experiential marketing is perhaps no surprise. As reported by eMarketer, experiential marketing spending has surged past $128 billion, with activity signaling a resurgent comeback above pre-pandemic levels. According to the 2023 Trust Report from live events company Freeman, 77% of consumers say their trust in a brand increases following a live event interaction, and 64% retain positive impressions of brands they engage with in person. Building on insights like this, Canva designed its world tour to connect with people directly on their own terms. This enables us to get super local and relevant to the communities were serving, Knowles explains. Kristine Segrist, Canva’s global head of consumer marketing, adds, Meeting them where they are makes the experience feel immediate and personal. The tour took off at the Texas State Fair in Dallas and will culminate in Sydney, Australia, with a 4,000-person keynote and, according to Canva, a major product announcement.
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E-Commerce
Vice President JD Vance on Sunday said there will be deeper cuts to the federal workforce the longer the government shutdown goes on, adding to the uncertainty facing hundreds of thousands who are already furloughed without pay amid the stubborn stalemate in Congress.Vance warned that as the federal shutdown entered its 12th day, the new cuts would be “painful,” even as he said the Trump administration worked to ensure that the military is paid this week and some services would be preserved for low-income Americans, including food assistance.Still, hundreds of thousands of government workers have been furloughed in recent days and, in a court filing on Friday, the Office of Management and Budget said well over 4,000 federal employees would soon be fired in conjunction with the shutdown. The effects of the shutdown also grew Sunday with the Smithsonian announcing its museums, research centers and the National Zoo are temporarily closed going forward for lack of funding.“The longer this goes on, the deeper the cuts are going to be,” Vance said on Fox News’ “Sunday Morning Futures.” “To be clear, some of these cuts are going to be painful. This is not a situation that we relish. This is not something that we’re looking forward to, but the Democrats have dealt us a pretty difficult set of cards.”Labor unions have already filed a lawsuit to stop the aggressive move by President Donald Trump’s budget office, which goes far beyond what usually happens in a government shutdown, further inflaming tensions between the Republicans who control Congress and the Democratic minority.The shutdown began on Oct. 1 after Democrats rejected a short-term funding fix and demanded that the bill include an extension of federal subsidies for health insurance under the Affordable Care Act. The expiration of those subsidies at the end of the year will result in monthly cost increases for millions.Trump and Republican leaders have said they are open to negotiations on the health subsidies, but insist the government must reopen first.For now, negotiations are virtually nonexistent. Dug in as ever, House leaders from both parties pointed fingers at each other in rival Sunday appearances on “Fox News Sunday.”“We have repeatedly made clear that we will sit down with anyone, anytime, anyplace,” said House Democratic leader Hakeem Jeffries of New York. “Republicans control the House, the Senate and the presidency. It’s unfortunate they’ve taken a my-way-or-the-highway approach.”House Speaker Mike Johnson blamed Democrats and said they “seem not to care” about the pain the shutdown is inflicting.“They’re trying their best to distract the American people from the simple fact that they’ve chosen a partisan fight so that they can prove to their Marxist rising base in the Democratic Party that they’re willing to fight Trump and Republicans,” he said. Progressive activists, meanwhile, expressed new support for the Democratic Party’s position in the shutdown fight.Ezra Levin, co-founder of the leading progressive protest group Indivisible, said he is “feeling good about the strength of Dem position.” He pointed to fractures in the GOP, noting that Georgia Rep. Marjorie Taylor Greene publicly warned last week that health care insurance premiums would skyrocket for average Americans including her own adult children if nothing is done.“Trump and GOP are rightfully taking the blame for the shutdown and for looming premium increases,” Levin said. “Their chickens are coming home to roost.”And yet the Republican administration and its congressional allies are showing no signs of caving to Democratic demands or backing away from threats to use the opportunity to pursue deeper cuts to the federal workforce.Thousands of employees at the departments of Education, Treasury, Homeland Security and Health and Human Services, as well as the Environmental Protection Agency, are set to receive layoff notices, according to spokespeople for the agencies and union representatives for federal workers.“You hear a lot of Senate Democrats say, well, how can Donald Trump possibly lay off all of these federal workers?” Vance said. “Well, the Democrats have given us a choice between giving low-income women their food benefits and paying our troops on the one hand, and, on the other hand, paying federal bureaucrats.”Democrats say the firings are illegal and unnecessary.“They do not have to do this,” said Democratic Sen. Mark Kelly of Arizona on CNN’s “State of the Union.” “They do not have to punish people that shouldn’t find themselves in this position.” Steve Peoples, AP National Political Writer
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E-Commerce
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