Economics

Economists predict the Consumer Price Index will have risen to 3.8% in April, up another 0.6% from March.

The Consumer Price Index is widely expected to show inflation has risen to a nearly three-year high when April’s data is released Tuesday morning.

The Iran war’s wide-ranging economic fallout has caused prices to spike, and economists and analysts project that inflation will hit 3.8%, up 0.6% from March to April, according to a survey from Dow Jones.

April’s inflation reading follows an even sharper 0.9% jump from February to March. Last month’s increase was the largest month-to-month jump since 2022.

In a victory for importers and a setback for the Trump administration, the Court of International Trade struck down a second round of worldwide tariffs that the president ordered to replace import levies that were outlawed by the U.S. Supreme Court.

The court's decision was limited to two importers who challenged the tariffs, along with the state of Washington. It was not immediately clear whether other importers would have to keep paying the levies.

"That's a very good question and one we've sort of been wrestling with," said Jeffrey Schwab, who represented the importers on behalf of the Liberty Justice Center. "It's not entirely clear and probably will depend on what happens now."

The U.S. stock market fell from its record heights Monday, while oil prices jumped following escalations in the Middle East that may undermine the ceasefire in the war with Iran.

The S&P 500 sank 0.4%, coming off its latest all-time high. The Dow Jones Industrial Average dropped 557 points, or 1.1%, and the Nasdaq composite slipped 0.2%.

The action was stronger in the oil market, where the price for a barrel of Brent crude leaped 5.8% to settle at $114.44. It jolted higher after the United Arab Emirates, a U.S. ally, said it came under attack by Iran for the first time since the ceasefire took hold in early April. The attacks appeared to be in response to Donald Trump’s latest efforts to reopen the Strait of Hormuz.

Spirit Airlines, an impish upstart that shook the industry with its irreverent ads and deep discount fares, announced Saturday that it has gone out of business after 34 years.

The ultralow cost airline that once operated hundreds of daily flights on its bright yellow planes and employed about 17,000 people said it had “started an orderly wind-down of our operations, effective immediately.”

The airline said on its website that all flights have been canceled and customer service is no longer available. Some passengers arrived Saturday for flights and were stunned to find them canceled, while workers learned overnight they were out of a job.

cross-posted from: https://infosec.pub/post/45329238

Watch economist Justin Wolfers break down the state of the economy as Donald Trump's illegal war on Iran continues.

War, immigration crackdown, tariffs, broken alliances, and a shredded rule of law: Wolfers joins Zeteo’s John Harwood to unpack all the ways President Donald Trump is damaging the American economy. Some consequences are obvious now; others will show up later.

Donald Trump‘s administration plans to launch next Monday the system it will use for issuing refunds to American importers for $166 billion the companies paid in tariffs that the U.S. Supreme Court struck down in February as unlawful.

U.S. Customs and Border Protection said in a court filing on Tuesday that it has completed the development of the initial phase of the refund system, known as CAPE. The system will consolidate refunds so importers will receive one electronic payment, with interest when applicable, rather than processing refunds on an entry-by-entry basis.

When Donald Trump took us to war with Iran, he dismissed warnings from the experts, from the military, from the intelligence community, saying that this was a highly risky proposition. Now he wants to bring that same level of clarity and judgment to monetary policy and we should all be very afraid.

Following California implementing a law raising its minimum wage to $20 for more than 500,000 fast-food workers in the state in 2024, Christopher Thornberg, founding partner of research firm Beacon Economics, offered a warning about the state raising its minimum wage.

“California’s well-intended push to reduce income inequality via wage floors is beginning to have a significant negative impact on some of our most vulnerable workers—our youth, particularly those from lower-income households,” he wrote earlier this year.

His concerns echoed those of fast-food franchise owners, one of whom told Fortune in 2024 that higher wages would be unsustainable for smaller chains with slim margins.

But nearly two years after the law’s passage, economists are seeing very different results than what was initially feared. A working paper from University of California at Berkeley released this month found the policy increased average weekly wages for eligible workers by 11% and did not reduce employment. Prices increased modestly, about 1.5%, or the equivalent of about six cents for a $4 item.

Growth forecasts cut for US and global economy, while UK suffers sharpest downgrade in G7

A further escalation in the Iran war could trigger a global recession, spiralling inflation and a sharp backlash in financial markets, the International Monetary Fund has warned.

Against an increasingly volatile backdrop, the Washington-based fund said the economic damage from the Middle East conflict was steadily rising as it cut its growth forecasts for 2026 based on the impact from the war so far.

In its half-yearly update, the IMF said the UK would suffer the sharpest growth downgrade and joint highest inflation rate in the G7 this year, even if the fallout from soaring energy costs can be contained by the middle of 2026.

Deputy Defense Secretary Steve Feinberg set up a new unit to lead all the Pentagon’s work that involves fusing economic leverage and requirements into joint U.S. military planning and operations, according to a memorandum obtained by DefenseScoop.

The two-page memo formally establishes the Economic Defense Unit and the position of EDU director, who will oversee the new hub and report to Feinberg as the deputy secretary’s principal advisor for economic competition across the Defense Department.

“Economic Competition is the coordinated and deliberate application of economic tools including capital, procurement, policy, trade, tariffs, regulatory authorities, export controls, and other potential economic activities to expand the United States’ economic advantage by deterring, denying, disrupting, and helping to defeat adversaries through economic means,” Feinberg wrote to Pentagon leadership, combatant commanders, and Defense agency and field activity directors.

The Trump Administration is advancing efforts to structurally embed the weaponization of US economic and financial leverage within the US military. This is the kind of action that tends to fly under the radar but IMO has major implications for the future of geopolitics and global conflict. The US government, at least under this administration, intends to continue to use its remaining hegemonic economic leverage aggressively to the point of fusing it directly into military planning.