In the United States, the average price for a gallon of regular gasoline jumped 11 cents on Friday, to $3.83, the biggest one-day rise since 2005, when Hurricane Katrina slammed into oil fields in the Gulf of Mexico and shut down refineries. Over the last week, the price rose 26 cents, from $3.57 a gallon, as traders feared that Russian oil exports would be blocked. A year ago, the price was $2.75.
The Russia-Ukraine War and the Global Economy
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Shortages of essential metals. The price of palladium, used in automotive exhaust systems and mobile phones, has been soaring amid fears that Russia, the world’s largest exporter of the metal, could be cut off from global markets. The price of nickel, another key Russian export, has also been rising.
Financial turmoil. Global banks are bracing for the effects of sanctions intended to restrict Russia’s access to foreign capital and limit its ability to process payments in dollars, euros and other currencies crucial for trade. Banks are also on alert for retaliatory cyberattacks by Russia.
The release of a robust employment number for the U.S. wasn’t enough to stop the selling on Friday. The government said U.S. employers added 678,000 job last month, a continuation of the rapid rebound in the labor market. The report also showed that the unemployment rate fell to 3.8 percent.
The report comes as the Federal Reserve has been preparing to pull back on its economic support and raise interest rates this year in an effort to tame inflation. February’s jobs report also showed that wage growth came in flat after a series of brisk increases, which is good news for the Fed and economists who are concerned about the start of an inflationary spiral in which wage and price increases push each other higher.
Between the flat number on wage growth and the uncertainty over the ripple effects of the Ukraine conflict, “there is less pressure on the Fed to front-load rate hikes,” said Ms. Gaggar. The central bank’s chair, Jerome H. Powell, has said that interest rates will rise by a quarter point later this month.
The approach the Fed could take moving forward was echoed by Charles Evans, president of the Federal Reserve Bank of Chicago, on CNBC on Friday. Mr. Evans said that the jobs report “doesn’t really change anything that Chair Powell was sort of pre-positioning the Fed for, the other day.”
Next week, investors will be monitoring the release of the Consumer Price Index, a closely watched inflation gauge released by the Department of Labor. January’s exceeded analysts forecasts and showed that prices jumped 7.5 percent over the year and 0.6 percent from the prior month.
Jeanna Smialek and Clifford Krauss contributed reporting.
Article source: https://www.nytimes.com/2022/03/04/business/economy/stock-market-today.html
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