Check out this week’s Business Briefs, an encompassing look at top business news this week from the Associated Press, with a special spotlight on national business and the economy.
Cyber Monday deals lure in consumers amid high inflation
NEW YORK (AP) — Days after flocking to stores on Black Friday, consumers are turning online for Cyber Monday to score more discounts on gifts and other items that have ballooned in price because of high inflation. Adobe Analytics, which tracks transactions for top online retailers, forecasts Cyber Monday will remain the year’s biggest online shopping day and rake in up to $11.6 billion in sales. Some analysts expect the amount of items consumers purchase could remain unchanged – or even fall – compared to prior years. And profit margins are expected to be tight for retailers offering deeper discounts to attract budget-conscious consumers and clear out their bloated inventories.
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EXPLAINER: What to know on Congress’ bid to bar rail strike
WASHINGTON (AP) — President Joe Biden is asking Congress to intervene to avert a potentially crippling freight rail strike before Christmas, even if it means handing a defeat to Democratic allies in the labor movement. The legislation urged by Biden and being voted on Wednesday by the House would impose a compromise labor agreement brokered by his administration that was ultimately voted down by four of the 12 unions that represent about 115,000 employees at the freight railroads. At issue is paid sick leave. Biden’s deal would leave out provisions on that while preventing a rail stoppage that would cost the economy $2 billion a day. But forcing the deal could also cost him his good standing among unions.
GivingTuesday raises $3.1B for charities in tough economy
NEW YORK (AP) — Some $3.1 billion was donated to charitable causes in the U.S. in the 24 hours that are called Giving Tuesday. The movement to donate on the Tuesday after Thanksgiving started as a hashtag in 2012 and 10 years later has become a staple of fundraising for nonprofits. Asha Curran is the CEO of the organization GivingTuesday, which grew out of the hashtag. She said despite a difficult economic year, people we as generous as they had the capacity to be.
Applications for jobless benefits decline last week
WASHINGTON (AP) — The number of Americans applying for unemployment benefits came back down last week and continue to hover around levels suggesting the U.S. labor market has been largely unaffected by the Federal Reserve’s aggressive interest rate hikes. Applications for jobless aid fell to 225,000 for the week ending Nov. 26, a decline of 16,000 from the previous week’s 241,000, the Labor Department reported Thursday. The four-week moving average of claims, which evens out week-to-week swings, inched up by 1,750 to 227,000. The Labor Department said Thursday that 1.61 million people were receiving jobless aid the week that ended Nov. 19, up 57,000 from the week before.
Biden sees economy avoiding recession, but risks remain
WASHINGTON (AP) — President Joe Biden is assuring the nation that the U.S. economy is chugging along. But along with his upbeat words on Friday, a new jobs report showed that high inflation remains a threat. At the White House, the president signed a bill to avoid a rail strike that he said could have caused 765,000 job losses in two weeks and plunged the country into recession. But many voters and economists already fear that a downturn is nigh and that the price of reducing inflation will be layoffs. Biden pointed to the addition of 263,000 jobs and the unemployment rate holding steady at 3.7% last month as proof that his policies have bulked up the economy.
Two Federal Reserve officials said they favor raising the Fed’s key rate to roughly 5% or more and keeping it at its peak through next year — longer than many on Wall Street have expected. John Williams, president of the Federal Reserve Bank of New York, said that the central bank has “more work to do” to reduce inflation closer to its 2% target. And James Bullard, president of the St. Louis Fed, suggested that financial markets are underestimating the likelihood the Fed will have to be more aggressive in its fight against the worst inflation bout in four decades.
Irish regulators have slapped Facebook parent Meta with a 265 million euro fine in what is the company’s latest punishment for breaching strict European Union data privacy rules. The Data Protection Commission said Meta Platforms infringed sections of the EU rules that cover technical and organizational measures aimed at protecting user data. The watchdog opened an investigation last year into news reports that data on more 533 million users was found dumped online. Meta says the data had been “scraped” from Facebook using tools designed to help people find their friends through phone numbers using search and contact import features. The company said it had “cooperated fully” with the Irish watchdog.
Cryptocurrency lender BlockFi filed for Chapter 11 bankruptcy protection Monday, the latest casualty of the collapse of crypto exchange FTX. New Jersey-based BlockFi had been struggling for much of this year, but was given a lifeline this summer in the form of an FTX line of credit. FTX’s own bankruptcy, however, all but sealed BlockFi’s financial fate. BlockFi suspended withdrawals after FTX’s failure, and it had hired bankruptcy specialists in recent days. BlockFi was one of several crypto currency lenders to pop up in recent years. The company gave loans to customers using their crypto assets as collateral.
The defense has rested at the Trump Organization’s criminal tax fraud trial after a contentious day in court, putting the case involving former President Donald Trump’s real estate empire on track for deliberations next week. Trump Organization lawyers contend that Manhattan prosecutors are seeking to punish the company for longtime finance chief Allen Weisselberg’s scheme to avoid personal income taxes on company-paid perks, such as an apartment and luxury cars. The defense rested Monday and closing arguments are scheduled for Thursday and Friday, with jurors expected to begin deliberating next Monday, Judge Juan Manuel Merchan said. Prosecutors said they might spent four or five hours summarizing the case for jurors. Defense lawyers said they’ll likely need up to four hours.
Russian energy giant Gazprom announced Monday that it will not further reduce natural gas to Moldova as it had threatened to do after claiming that bills went unpaid and that flows crossing through Ukraine were not making it to Moldova. Gazprom tweeted Monday that Moldovagaz has “eliminated the violation of payment” for November supplies and that “funds for the gas deposited on the territory of Ukraine, intended for consumers in Moldova, have been received.” Last week, Moldova and Ukraine hit back at Gazprom’s claim that Russian gas moving through the last pipeline to Western Europe was being stored in Ukraine. They said all supplies Russia sends through the war-torn country get “fully transferred” to Moldova.
Asian shares are trading mostly higher as market jitters decline over protests in China set off by growing public anger over COVID-19 restrictions. Benchmarks rose in early trading in Australia, South Korea and China, while shares fell in Japan. Oil prices fell. Japanese government data showed that the unemployment rate for October was unchanged from September at 2.6%, while the available jobs per job seeker increased. China’s economy has been stifled by a “zero COVID” policy which includes lockdowns that continually threaten the global supply chain. Stocks fell broadly on Wall Street.
The Biden administration is easing some oil sanctions on Venezuela in an effort to support newly restarted negotiations between the Venezuelan government and its opposition. The Treasury Department is allowing Chevron to resume “limited” energy production in Venezuela after years of sanctions that have dramatically curtailed oil and gas profits that have flowed to President Nicolás Maduro’s government. Earlier this year the Treasury Department again allowed the California-based Chevron and other U.S. companies to perform basic upkeep of wells it operates jointly with state-run oil giant PDVSA. Under the new policy, profits from the sale of energy would be directed to paying down debt owed to Chevron, rather than providing profits to PDVSA.
The head of the International Monetary Fund says it’s time for China to move away from mass lockdowns under its “zero-COVID” approach. Kristalina Georgieva said in an interview Tuesday with The Associated Press that a “recalibration” of the tough approach could shift to more targeted restrictions. That would be easier on the Chinese people and reduce spillover effects on the global economy. She also said it’s not time yet for the U.S. Federal Reserve to ease off on its rapid interest rate increases. High inflation numbers in the U.S. and Europe mean its “too early to step back.” She said the Fed “has no option but to stay the course” until there’s a credible decline in inflation.
U.S. consumer confidence fell for the second straight month in November amid ongoing high inflation, rising interest rates, and layoff announcements by several large tech companies. The Conference Board reported Tuesday that its consumer confidence index fell to 100.2 this month, down from 102.2 in October.
President Joe Biden’s call for Congress to intervene in the railroad contract dispute undercuts efforts to address workers’ quality of life concerns and unions decried the move. But businesses stress that it is crucial to avoid a strike that would devastate the economy. Biden and House Speaker Nancy Pelosi said Monday that lawmakers will be asked to vote this week to impose the terms of the deals the 12 unions agreed to before the original strike deadline in September even though four of those unions representing more than half of the 115,000 rail workers rejected them. Biden said he reluctantly agreed that it would be best to override the union votes because the potential damage to the economy would be too great.
Twitter is no longer enforcing its policy against misinformation about COVID-19. The change was announced in an online update to Twitter’s rules and comes after the platform was purchased by Elon Musk, who in the past has himself spread misleading COVID claims on Twitter. The platform enacted its COVID misinformation policy in early 2020 and since then has suspended more than 11,000 accounts and removed nearly 100,000 pieces of content that it deemed potentially harmful. Some users celebrated the change Tuesday while public health experts warned it could discourage vaccination and other efforts to combat the still-spreading virus.
President Xi Jinping says China is ready to “forge closer partnership” with Russia in energy. A state news agency says Xi made the comment in a letter to a China-Russia business forum. That might expand ties that irk Washington by helping the Kremlin resist sanctions over its war on Ukraine. The announcement gave no details. China’s energy-hungry economy is one of the biggest customers for Russian oil and gas. Purchases more than doubled over a year ago in October to $10.2 billion as Chinese importers took advantage of discounts offered by Moscow. Washington, Europe and Japan cut purchases of Russian energy and expelled the country from the global banking system in retaliation for President Vladimir Putin’s Feb. 24 attack on Ukraine.
A Walmart employee who survived the mass shooting at a store in Virginia has filed a $50 million lawsuit against the company. Employee Donya Prioleau claims in her lawsuit that Walmart continued to employ the shooter “who had known propensities for violence, threats and strange behavior.” The lawsuit was filed Tuesday in Chesapeake Circuit Court. Walmart, which is headquartered in Bentonville, Arkansas, didn’t immediately respond to a request seeking comment. Prioleau’s suit alleges that she has experienced post-traumatic stress disorder from witnessing the rampage in the store’s breakroom. Police said that store supervisor Andre Bing fatally shot six employees and wounded several others. Police said he died at the scene from an apparent self-inflicted gunshot wound.
President Joe Biden is telling Americans he is a “pro-union” president, just a day after he sided with business leaders in asking Congress to pass legislation to stave off a crippling rail strike. He toured a technology plant in Michigan on Tuesday to highlight a $300 million expansion. The South Korean company SK Siltron is expected to quadruple its production in the coming years at the plant. Biden said, as he often does, that he’s been pro-union his entire career. He said he spoke with the plant owners about how American workers were “the best workers in the world, you’re the most qualified workers in the world.”
Asian shares are trading mostly lower ahead of a closely watched speech by the Federal Reserve chief that may give clues about future interest rate hikes. Markets are also eyeing developments in China, where protests have erupted recently over the “zero-COVID” strategy that has confined millions of people to their homes, sometimes for months. Shares fell in Tokyo but were higher in Sydney, Seoul, Hong Kong and Shanghai. Authorities in China have eased some controls after demonstrations in at least eight mainland cities and Hong Kong. Security forces have detained an unknown number of people. Wall Street finished mixed.
Fed Chair Jerome Powell says the Federal Reserve will push rates higher than previously expected and keep them there longer to fight a stubborn bout of inflation. In a speech to the Brookings Institution on Wednesday, Powell also signaled that the Fed may increase its key interest rate by a smaller increment at its December meeting, only a half-point after four straight three-quarter point hikes. But Powell also stressed that the smaller size shouldn’t be seen as a sign the Fed will let up on its inflation fight anytime soon. Financial markets rallied in response to Powell’s suggestion that rate increases will slow.
A top European Union official has warned Elon Musk that Twitter needs to beef up to protect users from hate speech, misinformation and other harmful content to avoid violating new rules. The EU’s commissioner for digital policy, Thierry Breton, told Musk on Wednesday that the social media platform will have to significantly increase efforts to comply with the rules that threaten big fines or even a ban in the 27-nation bloc if tech giants don’t comply. The two held a video call to discuss Twitter’s preparedness for the rules. Breton says Musk told him that the new EU rules were “a sensible approach to implement on a worldwide basis.”
The U.S. economy grew at a 2.9% annual rate from July through September despite high interest rates and chronic inflation, the government said Wednesday in an upgrade from its initial estimate. Last quarter’s rise in the U.S. gross domestic product, or the economy’s total output of goods and services, followed two straight quarters of contraction. That decline in output had raised fears that the economy might have slipped into a recession in the first half of the year. Since then, though, most signs have pointed to a resilient if slow-moving economy. Wednesday’s report showed that the restoration of growth in the July-September period was led by solid gains in exports and consumer spending that was stronger than originally reported.
The former CEO of the failed cryptocurrency exchange FTX says that he did not “knowingly” misuse customers’ funds. He also says he believes his millions of angry customers will eventually be made whole. The comments from Sam Bankman-Fried came during an interview with Andrew Ross Sorkin at conference put on by The New York Times. Bankman-Fried has done a handful of media interviews since FTX collapsed in mid-November, but Wednesday’s was his first video interview since it filed for bankruptcy protection on Nov. 11. FTX failed in the cryptocurrency version of a bank run.
Congress is moving urgently to head off the looming U.S. rail strike. The House passed a bill Wednesday that would bind companies and workers to a proposed settlement reached in September that failed to gain the support of all 12 unions involved. The bill now goes to the Senate for consideration. It would impose a compromise labor agreement brokered by President Joe Biden’s administration. That agreement was ultimately voted down by four of the 12 unions representing more than 100,000 employees at large freight rail carriers. The unions have threatened to strike if an agreement can’t be reached before a Dec. 9 deadline.
Rose Bowl game organizers have cleared the way for the College Football Playoff to expand to 12 teams starting in the 2024 season. They’ve told CFP officials they are willing to alter agreements for the first two years of the larger playoff. A person with knowledge of the discussions between game organizers and CFP officials told The Associated Press that the Rose Bowl is prepared to be flexible and wants to continue to be part of the College Football Playoff beyond 2025. The person spoke on condition of anonymity because the presidents and chancellors who oversee the playoff still needed to give final approval on expansion plans.
U.S. officials approved the first pharmaceutical-grade version of the fecal transplant procedures that doctors have increasingly used to treat a potentially life-threatening intestinal infection. The Food and Drug Administration on Wednesday approved the drug for adult patients at risk for reinfection with the infection commonly referred to as C. diff. The bacterial infection is particularly dangerous when it reoccurs and is linked to about 15,000 to 30.000 deaths a year. For more than a decade, some U.S. doctors have used stool samples from healthy donors to treat the condition. The new therapy from Ferring Pharmaceuticals Inc. is manufactured from stool donations by donors who are screened for dozens of conditions.
Inflation in Europe has eased for the first time in more than a year as energy prices drifted down from painful highs. But the double-digit rate still hovers near a record that has robbed consumers of their spending power and led economists to predict a recession. The European Union’s statistics agency said Wednesday that consumer price index in the 19 countries that use the euro currency hit 10% in November from a year earlier. That was a drop from 10.6% in October, the first decrease since June 2021. The figure reflected prices for food, alcohol and tobacco rising faster even as energy prices slipped to a 34.9% rate of increase from an astronomical 41.5% in October.
Mexico’s economy secretary has proposed yet another round of talks with the United States on a dispute over Mexico’s energy sector. Mexico hopes to stave off a full-fledged trade complaint under the U.S.-Mexico-Canada trade agreement. The United States says Mexico is unfairly favoring its state-owned electricity and oil companies over American competitors and clean-energy suppliers. U.S. Trade Representative Katherine Tai appears willing to keep talking, but her office says she “underscored the urgency of prompt and meaningful progress” at a Thursday meeting. The two countries also appear headed for another commercial dispute over a Mexican ban on imports of genetically modified yellow corn.
Asia’s richest man, coal magnate Gautam Adani, made his vast fortune betting on coal as an energy hungry India grew swiftly after its economy was liberalized in the 1990s. Adani says he wants to be known as the world’s largest renewable energy player by 2030, but he’s also investing heavily in petrochemicals and conventional power. Adani has profited mightily since Narendra Modi, India’s most influential prime minister in decades, took office in 2014. With a net worth around $125 billion, the tycoon has diversified into construction, data transmission, media, renewable energy, defense manufacturing and agriculture — industries aligned with the government’s strategic priorities.
A measure of inflation that is closely monitored by the Federal Reserve eased but remained at an elevated level in October, likely reinforcing the Fed’s intent to keep raising interest rates to cool the economy and slow the acceleration of prices. The report from the Commerce Department showed that prices rose 6% in October from a year earlier. That was down from 6.3% year-over-year increase in September. Excluding volatile food and energy prices, so-called core inflation over the previous 12 months was 5%, less than the 5.2% annual increase in September.
Legislation to avert a freight rail strike in the United States is headed to President Joe Biden’s desk. A bill to avoid the strike won final approval Thursday, clearing the Senate in a bipartisan vote. The bill will bind rail companies and workers to a proposed settlement that was reached between the rail companies and union leaders in September. That settlement had been rejected by four of the 12 unions involved, creating the possibility of a strike. The Senate vote was 80-15 and came one day after the House voted to impose the agreement. Biden has vowed to sign it quickly.
The European Union is edging closer to a $60-per-barrel price cap on Russian oil. It’s a highly anticipated and complex political and economic maneuver designed to keep Russian oil flowing into global markets while clamping down on President Vladimir Putin’s ability to fund his war in Ukraine. EU nations sought to push the cap across the finish line Thursday after Poland held out to get as low a figure as possible. There’s a deadline to set the price for discounted oil by Monday, when a European embargo on seaborne Russian crude and a ban on shipping insurance for those supplies take effect.
The average long-term U.S. mortgage rate ticked down for the third week in a row and have fallen more than a half-point since hitting a 20-year high less than a month ago. Mortgage buyer Freddie Mac reported Thursday that the average on the benchmark 30-year rate fell to 6.49% from 6.58% last week. A year ago the average rate was 3.11%. Mortgage rates are still more than double what they were in early January, which combined with still-climbing home prices, have created a significant affordability hurdle for many would-be homebuyers. Sales of existing homes have fallen for nine straight months.
Members of the United Auto Workers union appear to favor replacing many of their current leaders in an election that stemmed from a federal bribery and embezzlement scandal involving former union officials. Reform-minded candidates are leading in multiple key positions with about 84% of the vote counted. Many challengers campaigned on rescinding concessions made to companies in previous contract talks. That could raise costs for General Motors, Ford and Stellantis, and almost inevitably will drive up already expensive auto prices. With tallies from six of nine UAW regions counted, incumbent President Ray Curry had a small lead over international union official Shawn Fain. Curry had 38.4% of the vote to Fain’s 36%. The race likely will go to a runoff.
Austan Goolsbee, who was a top economic adviser to President Barack Obama, has been chosen as the next president of the Federal Reserve Bank of Chicago, the regional Fed bank announced. Goolsbee, 53, an economics professor at the University of Chicago who is a frequent commentator in opinion columns and television appearances, will succeed Charles Evans on Jan. 9. Evans is retiring after 15 years as head of the Chicago Fed. As head of a regional Fed bank, Goolsbee will have a rotating vote on the committee that determines the central bank’s interest rate moves.
For nearly nine months, the Federal Reserve has relentlessly raised interest rates to try to slow the U.S. job market and bring inflation under control. And for just as long, the job market hasn’t seemed to get the message. The November employment report was no exception. Employers added 263,000 jobs — a substantial gain that was far above economists’ expectations. Wages rose robustly, too, further intensifying the inflationary pressures the Fed has been struggling to contain. And the unemployment rate remained at 3.7%, barely above the half-century low of 3.5%. Friday’s hiring data left economists scratching their heads over the job market’s resilience and the continuing need of many employers for more workers.
The nation’s employers kept hiring briskly in November despite high inflation and a slow-growing economy — a sign of resilience in the face of the Federal Reserve’s aggressive interest rate hikes. The economy added 263,000 jobs, while the unemployment rate stayed 3.7%, still near a 53-year low. November’s job growth dipped only slightly from October’s 284,000 gain. Last month’s hiring amounted to a substantial increase. All year, as inflation has surged and the Fed has imposed ever-higher borrowing rates, America’s labor market has defied skeptics, adding hundreds of thousands of jobs, month after month. With not enough people available to fill jobs, businesses are having to offer higher pay to attract and keep workers.
The Group of Seven nations and Australia have joined the European Union in agreeing to a $60-per-barrel price cap on Russian oil. It’s a key step as Western sanctions aim to reorder the global oil market to prevent price spikes and starve President Vladimir Putin of funding for his war in Ukraine. The nations needed to set the discounted price that other nations will pay by Monday, when an EU embargo on Russian oil shipped by sea and a ban on insurance for those supplies take effect. The price cap aims to prevent a sudden loss of Russian oil to the world that could lead to a new surge in energy prices.
The U.S., Europe and the Group of 7 democracies have agreed to put a price cap on Russian oil exports to other countries. The cap proposed by U.S. Treasury Secretary Janet Yellen aims to reduce Russia’s oil earnings that support its military and the invasion of Ukraine. But there are questions about how effective the cap will be. The Monday start date coincides with the European Union’s embargo on most Russian oil shipments. There’s uncertainty about how all this will affect oil markets, which are swinging between fears of lost Russian supply and weakening demand from the lagging global economy. Russia could retaliate by halting shipments, and Europe may struggle to replace imports of Russian diesel fuel.
A tiny Nevada toad at the center of a legal battle over a geothermal project has officially been declared an endangered species. U.S. wildlife officials had temporarily listed it on a rarely used emergency basis last spring. The Fish and Wildlife Service said in a formal rule published Friday that the Dixie Valley toad is at risk of extinction “primarily due to the approval and commencement of geothermal development” about 100 miles east of Reno. Other threats to the quarter-sized amphibian include groundwater pumping, agriculture, climate change, disease and predation from bullfrogs. The temporary listing in April marked only the second time in 20 years the agency had taken such emergency action.
Worries about inflation weighed on Wall Street, leaving major indexes mixed after another bumpy day of trading. The S&P 500 fell 0.1% and the Nasdaq lost 0.2% after being down even more earlier in the day. The Dow ended slightly higher. A government report showing that wage growth accelerated last month spooked investors since it could mean the Federal Reserve will be less able to ease up on its fight against inflation. The yield on the two-year Treasury, which tends to track expectations for future Fed action, rose following the release of the report, which also showed that hiring was stronger than anticipated.
A joint venture between General Motors and South Korean battery company LG Energy Solution says it will invest an additional $275 million to expand a Tennessee battery cell factory for electric vehicles. Officials with the companies had already pledged to spend $2.3 billion to build a battery plant in Spring Hill, Tennessee. The additional investment announced Friday is anticipated to result in 40% more battery cell output when the plant is fully operational. Production at the 2.8-million-square-foot facility is expected to begin in late 2023. The Tennessee plant is one of three lithium-ion battery factories being built by the joint venture, Ultium Cells LLC.
Twitter has suspended rapper Ye after he tweeted a picture of a swastika merged with the Star of David. It is the second time this year that Ye, who was formally known as Kanye West, has been suspended from the platform over antisemitic posts. Twitter CEO Elon Musk confirmed the suspension by replying to Ye’s post of an unflattering photo of Musk. Ye called it his “final tweet.” Ye has made a series of antisemitic comments in recent weeks. Also, the rightwing-leaning social media site Parler says a deal to be acquired by Ye, first announced in October, is off.