(WASHINGTON DC) — Falling gas prices are raising hopes that inflation is slowing. Unfortunately, a potential nationwide railroad strike threatens to cripple the economy.
Gas could dip below $3 a gallon just in time for the midterm elections as oil prices plummet. This in conjunction with relief already ordered by Florida Governor Ron DeSantis to suspend the gas tax for the month of October. The Florida Motor Fuel Tax Relief Act of 2022 reduces the tax rate on motor fuel by 25.3 cents per gallon. Passed by the Florida Legislature and signed into law by Governor Ron DeSantis, the tax rate reduction begins Saturday, October 1, and extends through Monday, October 31.
Also, US inflation rose by a higher-than-expected 8.3% in August despite falling gasoline prices. The grim numbers add pressure on the Federal Reserve to impose another interest rate hike next week.
Economists believe the report will cement whether the Federal Reserve raises interests rates by half or three-quarters of one-percent. The next policy announcement from the Fed will happen on September 21st.
The higher-than-expected number was driven partly by stubbornly high prices for food and housing that continue to slam American households. Core inflation, which excludes volatile food and gas prices, rose 6.3% year-over-year — up sharply from the rate of 5.9% seen in June and July.
And another potential blow to the economy is looming. A nationwide rail shutdown is set to go into effect after midnight on Friday. Amtrak has started to cancel some long-distance routes with news that the first national railroad strike in 30 years could start Friday.
The freight industry warns that the strike would shut down 30 percent of the country’s freight and “halt most passenger and commuter rail services.”
The Federal Railroad Administration says failure to reach an agreement could cost the U.S. economy as much as $2 billion per day in lost economic output.
President and CEO Suzanne P. Clark on Monday said a strike would be an “economic disaster” with “catastrophic economic impacts,” calling for urgent action to resolve the standoff.
One sticking point, unions are angry about a lack of sick days and attendance policies that penalize workers.
The president is adamant defender of union workers, but he does not want a strike to breakdown the nation’s transportation infrastructure.