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Tag: economic conditions

  • 3 Strategies to Reach Customers in an Economic Downturn

    3 Strategies to Reach Customers in an Economic Downturn

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    Opinions expressed by Entrepreneur contributors are their own.

    A recessionary environment can be a make-or-break time for businesses. Some of today’s most successful companies were founded during recessions, such as Google during the dot-com bust of the early 2000s or Uber during the Great Recession of 2008. But for every company that thrives during a recession, there are many more that fail.

    One of the key reasons that some companies succeed while others falter is how they handle their marketing and advertising spend during these difficult times. When a recession hits, businesses are quick to cut marketing budgets as they seek to reduce costs. But this can be a mistake.

    Recessions provide opportunities for businesses to reach customers who may be more price-sensitive and receptive to new offers. Instead of cutting marketing spend, businesses should focus on reallocating their ad budgets to more efficient channels and developing interactive content that will capture the attention of customers who may be spending more time at home. Here are three ways businesses can reach and engage customers despite a market slowdown:

    Related: 6 Recession-Proof Business Marketing Strategies

    1. Develop interactive content

    Customers are spending more time than ever online, so it’s important to develop content that is interactive and engaging. In a recession, ROI becomes even more important, so businesses should focus on creating content that will drive leads and sales.

    Traditional paid advertising can be expensive and is subject to banner blindness, which is when users tune out online ads. Interactive content, such as quizzes, polls and surveys, can be a more effective and cost-efficient way to reach and engage customers.

    Instead of non-consensually slapping users in the face with a commercial message, interactive content allows businesses to provide valuable information or entertainment while also gathering data that can be used to improve marketing campaigns.

    For example, a fashion company might run a style quiz that helps users find the right clothing for their body type. Not only is this quiz interactive and fun, but it also provides the company with valuable data about its customers’ preferences.

    2. Target recession-proof industries

    A recession doesn’t impact all sectors equally. In fact, some industries have seen tremendous growth. The energy industry, for instance, has seen a resurgence as renewed consumer demand and limited oil supply have led to higher prices. Year-to-date, as the S&P500 has fallen by around 15%, the United States Oil ETF is up over 30%.

    Healthcare is another industry that is relatively resilient to economic downturns. As people age, they require more medical care, and government spending on healthcare tends to increase during periods of economic hardship.

    Other so-called “defensive” industries, such as food and beverage, household staples and personal care, also tend to do well during recessions.

    Businesses that target these recession-proof industries can still find success even when the economy is struggling. That isn’t to say that your business needs to be in one of these industries to survive a recession, but it may be worth researching how your product or service can be positioned to appeal to these industries.

    Related: Why You Should Never Skimp on Brand Marketing in a Recession

    3. Focus on ROI-positive marketing channels

    When businesses are cutting costs, they often reduce their marketing spend across the board. But not all marketing channels are created equal. Some, such as paid search and social media advertising, can be very effective in driving leads and sales but can also be expensive.

    Other marketing channels, such as email marketing and content marketing, can be less expensive and just as effective in reaching and engaging customers. In a recession, businesses should focus on allocating their marketing budgets to the channels that will provide the most ROI.

    Email marketing, for example, can be very effective in reaching potential customers who may be interested in your product or service but may not be actively searching for it. And because email is a permission-based channel, you’re more likely to reach people who are receptive to your message.

    Content marketing can also be an effective way to reach and engage customers. By creating high-quality, informative content, businesses can attract customers who are looking for answers to their questions or solutions to their problems.

    In a recessionary environment, it’s more important than ever to focus on ROI-positive marketing channels. By allocating your marketing budget wisely, you can still reach and engage customers despite a slowdown in the economy.

    With the right approach, a recession can be an opportunity for businesses to thrive. By focusing on interactive content, targeting recession-proof industries and allocating your marketing budget to ROI-positive channels, you can weather the economic storm and come out ahead.

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    Vlad Gozman

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  • Inflation in Europe drops for the first time in 17 months | CNN Business

    Inflation in Europe drops for the first time in 17 months | CNN Business

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    London
    CNN Business
     — 

    For the first time in 17 months, inflation in Europe is easing.

    Consumer prices rose by 10% in the year to November, according to the first look at official data for the 19 countries that use the euro. That’s down from a record 10.6% jump the previous month, and is lower than economists had expected.

    In Germany, the bloc’s biggest economy, annual inflation slid to 11.3% from 11.6%, while price gains in France held steady at 7.1%, Wednesday’s data showed. Inflation in Italy ticked down to 12.5% from 12.6%, while Spain saw a larger decline, to 6.6% from 7.3%.

    Prices are still climbing at an uncomfortably fast clip, however, driven up by the increasing cost of energy and food.

    While energy price inflation fell to roughly 35% year-over-year, compared to nearly 42% in October, prices for food, alcohol and tobacco continued to rise sharply. They leaped by 13.6% in November, versus 13.1% the previous month.

    And core inflation, which excludes volatile food and energy prices, held firm at 5%.

    But the eurozone data supports hopes that inflation in many top economies may have peaked, allowing central banks to dial back aggressive interest rate hikes that are piling pressure on the global economy. Consumer prices in the United States rose by 7.7% in the year to October, the lowest annual reading since January.

    “The fact that we’re seeing that these numbers are lower than most of us were expecting, that’s good news,” said Bert Colijn, senior eurozone economist at ING. “You’ve got to start somewhere.”

    Prices for oil have dropped sharply since the summer as recession fears and coronavirus lockdowns in China changed the outlook for demand. Natural gas prices in Europe have also come down from all-time highs following a successful campaign to fill up storage facilities and because of relatively mild weather heading into the winter.

    Double-digit inflation remains a huge problem for policymakers, who have indicated they will press ahead with efforts to get prices under control. Still, the November numbers could give the European Central Bank space to boost rates by half a percentage point instead of by three-quarters of a percentage point when it meets next month.

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  • Biden faces a broad set of challenges at home this holiday season | CNN Politics

    Biden faces a broad set of challenges at home this holiday season | CNN Politics

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    CNN
     — 

    This holiday season looks very different from the last for many Americans, when Covid-19 test shortages and an Omicron variant surge disrupted numerous family celebrations.

    But the country is contending with a new set of complex challenges this late fall and winter. Even though Covid tests as well as an updated booster are largely accessible and Thanksgiving holiday travel nearly returned to pre-pandemic levels, a slew of pressures on the global economy and a recent surge in respiratory illnesses are expected to continue to impact on Americans in the coming months, leaving President Joe Biden with the challenge of addressing how to quell national anxieties over matters sometimes outside of the executive branch’s control.

    The latest data from the University of Michigan’s consumer sentiment index shows American consumers are still not feeling very confident about the state of the US economy this holiday season. Concerns remain, for example, about high costs across spending categories associated with the holidays, despite some moderation in inflation.

    While prices on airfares, gas and hotel rooms are down from the record levels hit earlier in 2022, they’re still among the highest on record for this time of year. The ingredients for a traditional Thanksgiving meal had been estimated to cost shoppers 13.5% more this year compared to last, the market research firm IRI predicted earlier this month, using data from October – although some food costs appear to have declined closer to the holiday.

    The White House maintains that Biden remains laser focused on tackling inflation and lessening the impacts of high prices – a major strain this year that’s been felt globally as a result of a myriad of factors, including supply chain disruptions and Russia’s war on Ukraine.

    “We are seeing signs of progress ahead of the Holiday season – grocery prices rose by 0.4% in October, a significant deceleration from the increases this summer, and the smallest increase since December of last year,” a White House official told CNN, adding that input costs (the cost to produce a good or service) “have declined for the last 2 months, which points to more progress on grocery prices in the months ahead.”

    Other potential product shortages and price hikes could be seen as early next year, as concerns over a potential rail strike have resurfaced after the largest rail union recently announced its rank-and-file members rejected a tentative agreement forged in September.

    Brian Dodge, president of the Retail Industry Leaders Association, had told CNN that Christmas holiday inventories are not likely be broadly impacted by a strike. But he conceded that a rail strike in early December could disrupt the shipment of some larger and bulky items that are transported by rail this holiday season.

    Biden got personally involved in discussions to reach the tentative deal that averted a strike with the nation’s major freight railroads earlier this fall. And White House press secretary Karine Jean-Pierre had said he’s been directly involved in discussions once again. But on Thursday, the president appeared to contradict his top messenger, saying he is “not directly engaged” with railway and labor negotiators. “I can’t (comment) because it’s the middle of negotiations, still. My team has been in touch with all the parties… and I have – I have not directly engaged yet because they’re still talking,” Biden said.

    Ahead of this week’s holiday, White House officials shared a new graphic highlighting the president’s accomplishments “for chatting with your Uncle at Thanksgiving.” The talking points led with lines on efforts to lower costs and contended that “despite global challenges, we’re making progress.” One bullet point, however, misstated that there would be “NO taxes on people making above $400k – he kept his promise.”

    Along with deploying a messaging strategy aimed at highlighting existing accomplishments, as Biden heads into the new year, the White House is looking to highlight ways the Inflation Reduction Act will lower everyday costs, the official told CNN. Since getting back from his latest foreign trip, Biden has already touted several provisions in the law that go into effect on January 1 – including home energy efficiency tax credits and a $35 cap on the cost of insulin for seniors on Medicare.

    Home heating costs are also on the rise – up 18% nationwide on top of last year’s 17% spike, according to the National Energy Assistance Directors Association.

    Several factors are driving hikes in home heating prices, including the war in Ukraine, OPEC+ cuts, a surge in energy exports, lower energy inventories, and a high demand for natural gas in the US electric power sector, according to the Energy Information Administration.

    The Biden administration in November announced the distribution of $4.5 billion in federal assistance to help lower many Americans’ heating bills this winter through the Low Income Home Energy Assistance Program. However, advocates say additional funding is needed. This month the Department of Energy also announced the allocation of nearly $9 billion to states and tribes for home efficiency programs under the Inflation Reduction Act.

    And just as Americans gather with loved ones across the country this holiday season, there have also been concerns about cases of respiratory syncytial virus, or RSV, influenza and Covid-19.

    The administration is embarking on a new, six-week push to deliver more updated Covid-19 boosters into arms. More than 35 million people in the United States have already received the updated bivalent booster shot, but that’s just a fraction of those eligible to get it.

    Dr. Ashish Jha, the White House Covid-19 response coordinator, said on “CNN This Morning” Wednesday that he is confident that the US will get through the current influx of respiratory viruses that are going around the country.

    When it comes to RSV, Jha said “certainly a problem, we have seen it now, looks like it has peaked nationally, starting to turn down.”

    “In terms of hospital capacity, we have been in touch with every jurisdiction around the country, we have been very clear if you need extra help, the federal government is ready to help, ready to send in support staff, ready to support, send in additional supplies,” he said. “I am confident we’re going to get through this, particularly if people step up and protect their families by getting the Covid and flu vaccine.”

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  • The Fed offers more clues about rate hikes | CNN Business

    The Fed offers more clues about rate hikes | CNN Business

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    New York
    CNN Business
     — 

    Americans are getting ready for food, family and football on Thursday, but investors were still holding off until Wednesday afternoon before starting to give thanks.

    That’s because the Federal Reserve released the minutes from its latest meeting at 2pm ET Wednesday, which provided more clues about the central bank’s thinking on inflation and interest rate hikes.

    At its November 2 meeting the Fed raised rates by three-quarters of a percentage point — its fourth straight hike of such a large magnitude. But Fed chair Jerome Powell suggested at a press conference that the Fed may soon begin to slow the pace of hikes.

    The minutes from that meeting showed that several other Fed policymakers agreed with Powell’s assessment.

    “A number of participants observed that, as monetary policy approached a stance that was sufficiently restrictive to achieve the Committee’s goals, it would become appropriate to slow the pace of increase in the target range for the federal funds rate,” the Fed said in the minutes.

    The Fed added that “a substantial majority of participants judged that a slowing in the pace of increase would likely soon be appropriate.”

    Stocks, which were relatively flat and meandering before the minutes came out, popped after their release. The Dow ended the day up more than 95 points, or 0.3%. The S&P 500 jumped 0.6% and the Nasdaq rose 1%.

    Other Fed members, most notably vice chair Lael Brainard, had also hinted n recent speeches at a slower pace of hikes. Yet there have been confusing signals from other Fed officials, who have continued to stress that inflation isn’t going away and must be brought under control.

    To that end, the Fed said in the minutes that inflation remains “stubbornly high” and “more persistent than anticipated.”

    With that in mind, traders are now pricing in a more than 75% chance that the Fed will raise rates by only a half-point at its December 14 meeting, according to futures contracts on the CME. That’s up from odds of 52% for a half-point hike a month ago, but lower than an 85% likelihood of a half-point increase that was priced in just last week.

    A recent batch of inflation reports seem to suggest that the pace of runaway price increases is finally starting to slow to more manageable levels. The job market remains relatively healthy as well, although the most recent jobless claims figures ticked up from a week ago.

    But as long as the labor market remains firm and inflation pressures continue to ebb, the Fed will likely pull back on the magnitude of its rate hikes.

    Some experts are growing concerned that if the Fed goes too far with rates, the increases could eventually slow the economy too much and potentially lead to much higher unemployment, job losses and even a recession.

    The Fed’s rate hikes have had a clear impact on the housing market, with surging mortgage rates helping to put a dent into home sales.

    Still, Wall Street is growing more confident that the Fed might be able to pull off a so-called soft landing. The Dow soared 14% in October, its best month since January 1976. The Dow is up another 4.5% in November and is now only down 6% this year.

    The S&P 500 and Nasdaq also have rebounded significantly since October, but both of those broader market indexes remain down more sharply for the year than the Dow.

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  • Why Investing in Art and Creativity Is Crucial in Today’s Economy

    Why Investing in Art and Creativity Is Crucial in Today’s Economy

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    Opinions expressed by Entrepreneur contributors are their own.

    There’s no denying that art inspires us and brings us joy. It bridges the gap between cultures and validates our experiences. Art is also part of a healthy community — and a healthy mind, body and soul. Science validates this. And yet, as entrepreneurs and business owners, we tend to think of art as “nice to have,” as something that’s not as important to the world as the other businesses we create. But the truth is, we need art and the artists who create art more than ever, especially in this economy. Here’s why.

    Art makes us feel seen

    Art validates the human experience. Through art, artists communicate their thoughts, ideas and emotions. They put those feelings out into the world with the hope that even one other person will be able to connect with them.

    When we open our minds and connect through art, we’re exchanging knowledge and thought on an intensely personal level, possibly with people who we never thought we’d connect with. Artists allow the door to open between cultural backgrounds; what they create can break down cultural barriers. Art can heal.

    Art bridges the gap between communities, creates empathy in situations where communications are strained and helps to remind us that, at the end of the day, we are all human beings with similar experiences, no matter what community we belong to or language we speak.

    Related: The Art of Investing in Art

    Art defines culture

    Art also preserves history. Think of everything one piece of art represents:

    • The time period in which it was made

    • The reason the artist created it

    • The medium and tools used

    • The public’s response to the piece

    All of these details (and more) paint a picture of a moment in time. Not only has art survived through time and traversed all around the world, but it also doesn’t discriminate amongst age, gender, race or status. Art explores every culture, every class and all spectrums of the human experience from childhood to old age.

    Culture can be studied through art and not just the famed artists that history favors, like your Da Vincis and van Goghs. Artists in every corner of the world, even the most unexplored or unthought-of places, can guide us through the culture their work represents.

    Related: Experiencing a Creative Block? Look to the Art on Your Walls for Fresh Inspiration

    Art is good for the economy

    As if art doesn’t do enough good for our health and our local communities, it also strengthens the economy. Really. Creative industries provide jobs, encourage tourism and boost revenue to local businesses. Labor studies also show that the value added by arts and culture to the U.S. economy is five times greater than the value from the agricultural sector.

    Fashion, film, television, performing arts, publishing, music — all of these creative industries and many more directly benefit our local and overall economies. These sectors even grew during the pandemic, while many industries struggled.

    Now that the point for supporting artists has been made, let’s talk about the how. Here are a few tips on how to support artists:

    Buy from the artist directly

    How can you support artists who have contributed to the world and made an impact on your life? The first and most obvious way, of course, is to buy art. More specifically, buy work directly from the artist rather than a distributor. Buying art directly without the middleman ensures that every penny you spend will support the artist directly.

    Keep in mind that the price of a piece of art not only reflects value, but time, effort and resources as well. If you’d spend a certain amount of money on a print of a famous artist’s work — one who might not even be living anymore — expect to pay a similar amount, if not more, for work from a living, breathing artist who is producing equally great work.

    You can’t catapult an already famous artist like Monet into much more success. Your purchase typically goes toward an estate or fund, which doesn’t impact Monet as a person. When you buy from a current artist, you’re directly investing in the artist’s future and career. You’re encouraging them to keep producing art.

    Related: Science Shows How Creativity Can Reduce Stress

    Vote with your dollars

    Another way to support artists is to vote. Vote to keep nonprofits and programs that value the arts, fund them and keep them alive. Despite all their benefits, the arts are often first to go when budgets are limited in schools and other facilities.

    Vote with your dollars, too. Voting with your dollars means to mindfully spend, invest or donate your money to causes you care about. Find people and organizations in the arts that you can support. Charity Navigator and GuideStar are great tools that can help you find nonprofits involved in the arts. Or look for a local business to buy from rather than a big box store or corporation that doesn’t need your money.

    Art is vital to our survival and well-being as a species. Despite everything that art provides, artists often don’t get the appreciation or support that they need. So, invest in creativity by becoming an art advocate, not just for your favorite artist, but for the future of artists. Let’s hope we never have to know what life would be like without art.

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    Jodie King

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  • Fed officials crushed investors’ hopes this week | CNN Business

    Fed officials crushed investors’ hopes this week | CNN Business

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    New York
    CNN Business
     — 

    Investors sleuthing for clues about what the Federal Reserve will decide during its December policy meeting got quite a few this week. But those hints about the future of monetary policy point to an outcome they won’t be very happy about.

    What’s happening: Federal Reserve officials made a series of speeches this week indicating that aggressive interest rate hikes to fight inflation would continue, souring investors’ hopes for a forthcoming central bank policy shift. On Thursday, St. Louis Federal Reserve President James Bullard said the central bank still has a lot of work to do before it brings inflation under control, sending the S&P 500 down more than 1% in early trading. It later pared losses.

    Bullard, a voting member on the rate-setting Federal Open Market Committee (FOMC), said that the moves the Fed has made so far to fight inflation haven’t been sufficient. “To attain a sufficiently restrictive level, the policy rate will need to be increased further,” he said.

    Those comments come a day after Kansas City Fed President Esther George, a voting member of the FOMC, said to The Wall Street Journal that she’s “looking at a labor market that is so tight, I don’t know how you continue to bring this level of inflation down without having some real slowing, and maybe we even have contraction in the economy to get there.”

    San Francisco Fed President Mary Daly added on Wednesday that a pause in rate hikes was “off the table.”

    A numbers game: Fed officials should increase interest rates to somewhere between 5% and 7% to tamp inflation, Bullard said Thursday. Those numbers shocked investors, as they would require a series of significant and economically painful hikes which increase the chance of a hard landing.

    The current interest rate sits between 3.75% and 4% and the median FOMC participant projected a peak funds rate of 4.5-4.75% in September. If those numbers hold steady, Fed members would only raise rates by another three-quarters of a percentage point.

    But Fed Chair Powell said at the November meeting that the projections are likely to rise in December and if Bullard is correct, that means investors can expect another one to three percentage points in rate hikes.

    Dreams of a pivot: October’s softer-than-expected CPI and producer price reading bolstered investors’ hopes that the Fed might ease its aggressive rate hikes and sent markets soaring to their best day since 2020 last week.

    But messaging from Fed officials this week has brought Wall Street back down to earth.

    That’s because market rallies help to expand the economy, said Liz Ann Sonders, Managing Director and Chief Investment Strategist at Charles Schwab, which is the opposite of what the Fed is trying to do with its tightening policy. Fed officials could be attempting to do some “jawboning” via excessively hawkish speeches in order to bring markets down, she said.

    The bottom line: Investors listen closely to Bullard’s comments because he’s known for having looser lips than other Fed officials, Peter Boockvar, chief investment officer of Bleakley Financial Group, wrote in a note Thursday. But his hawkish predictions may have been “overboard,” especially since he won’t be a voting member of the FOMC next year.

    Still, Wall Street analysts are listening. Goldman Sachs raised its peak fed funds rate forecast on Thursday to 5-5.25%, up from 4.75-5%.

    A series of high-profile layoffs have rattled Big Tech this month.

    Amazon confirmed that layoffs had begun at the company and would continue into next year, just days after multiple outlets reported the e-commerce giant planned to cut around 10,000 employees. Facebook-parent Meta recently announced 11,000 job cuts, the largest in the company’s history. Twitter also announced widespread job cuts after Elon Musk bought the company for $44 billion.

    The series of high-profile layoff announcements prompted fears that the labor market was weakening and that a recession could be around the corner.

    Those fears aren’t unwarranted: The Federal Reserve is actively working to slow economic growth and tighten financial conditions to rebalance the white-hot labor market. Further layoffs in both tech and other industries are likely inevitable as the Fed continues to raise interest rates.

    But this wave of layoffs isn’t as significant as headlines might lead Americans to believe. Thursday’s weekly jobless claims actually fell by 4,000 to 222,000 in spite of the surge in tech job cuts.

    In a note on Thursday Goldman Sachs analysts outlined three reasons why the layoffs may not point to a looming recession in the US.

    First off, the tech industry accounts for a small share of aggregate employment in the US. While information technology companies account for 26% of the S&P 500 market cap, it accounts for less than 0.3% of total employment.

    Second, tech job openings remain well above their pre-pandemic level, so laid-off tech workers should have good chances of finding new jobs.

    Finally, tech worker layoffs have frequently spiked in the past without a corresponding increase in total layoffs and have not historically been a leading indicator of broader labor market deterioration, Goldman analysts found.

    “The main problem in the labor market is still that labor demand is too strong, not too weak,” they concluded.

    Mortgage rates dropped sharply last week following a series of economic reports that indicated inflation may finally be easing, reports my colleague Anna Bahney

    The 30-year fixed-rate mortgage averaged 6.61% in the week ending November 17, down from 7.08% the week before, according to Freddie Mac, the largest weekly drop since 1981.

    But that’s still significantly higher than a year ago when the 30-year fixed rate stood at 3.10%.

    “While the decline in mortgage rates is welcome news, there is still a long road ahead for the housing market,” said Sam Khater, Freddie Mac’s chief economist. “Inflation remains elevated, the Federal Reserve is likely to keep interest rates high and consumers will continue to feel the impact.”

    Affording a home remains a challenge for many home buyers. Mortgage rates are expected to remain volatile for the rest of the year. And prices remain elevated in many areas, especially where there is a very limited inventory of available homes for sale.

    Meanwhile, inflation and rising interest rates mean many would-be buyers are also facing tightened budgets.

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  • UK to raise $65 billion from windfall tax on energy companies | CNN Business

    UK to raise $65 billion from windfall tax on energy companies | CNN Business

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    London
    CNN Business
     — 

    The UK government is hiking a windfall tax on oil and gas companies and extending the levy to electricity generators, as it scrambles to balance its budget amid an economic downturn. It is also investing in nuclear power for the first time in decades.

    UK finance minister Jeremy Hunt announced the measures on Thursday while delivering the government’s medium-term budget, which laid out plans for higher taxes and cuts to public spending.

    Beginning January 1, the Energy Profits Levy on oil and gas companies will increase from 25% to 35% and remain in place until the end of March 2028. That takes the total tax on the sector to 75%, according to the Treasury.

    There will also be a new, temporary 45% levy on the excess profits of electricity generators over this period. In the United Kingdom, electricity prices are tied to wholesale gas prices, which means many power generators are also enjoying mega profits.

    Together, these measures will raise £14 billion ($16.5 billion) next year and more than £55 billion ($65 billion) between 2022 and 2028.

    There have been growing calls in Britain for higher taxes on the windfall profits of oil and gas companies, which have enjoyed record earnings this year thanks to rising prices driven by Russia’s invasion of Ukraine.

    At the same time, households and businesses are being squeezed by decades-high inflation as a result of spiraling energy and food bills. The annual rate of UK inflation rose to 11.1% in October, its highest level in 41 years.

    “I have no objection to windfall taxes if they are genuinely about windfall profits caused by unexpected increases in energy prices,” Hunt said in parliament on Thursday. “Any such tax should be temporary, not deter investment and recognize the cyclical nature of energy businesses,” he added.

    The United Kingdom will spend an additional £150 billion ($176.9 billion) on energy bills this year compared to pre-pandemic levels, according to Hunt. That’s the equivalent to paying for a second National Health Service.

    Hunt on Thursday also extended government support for energy bills by another 12 months until April 2024, but said average households should expect to pay £3,000 ($3,451) annually, up from £2,500 ($2,951) currently.

    As well as hiking energy taxes, Hunt affirmed a £700 million ($824 million) investment into Sizewell C, a nuclear power station operated by France’s EDF in the east of England.

    The deal was first announced by former prime minister Boris Johnson last September and is the first state backing for a nuclear project in over 30 years.

    It will provide power to the equivalent of six million homes for over 50 years and represents “the biggest step” in Britain’s “journey to energy independence,” Hunt said.

    Hunt reaffirmed the United Kingdom’s commitment to a 68% reduction in carbon emissions by 2030. “Last year nearly 40% of our electricity came from offshore wind, solar and other renewable sources,” he said.

    He added that from April 2025 electric vehicle drivers will no longer be exempt from paying car taxes.

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  • Target warns of a weak holiday season. Shares are tumbling | CNN Business

    Target warns of a weak holiday season. Shares are tumbling | CNN Business

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    New York
    CNN Business
     — 

    Target’s profit plunged 52% in the third quarter and the retailer warned of a sluggish holiday.

    Target blamed inflation and a deteriorating economic outlook for its miserable quarter — and also lowered its outlook for the rest of the year. That sent shares down more than 12% in premarket trading.

    CEO Brian Cornell said that in recent weeks that “sales and profit trends softened meaningfully, with guests’ shopping behavior increasingly impacted by inflation, rising interest rates and economic uncertainty.”

    Still, it wasn’t all bleak: Sales of necessities were strong, including food and house essentials. Similar to Walmart, Target said sales in “discretionary categories” like electronics and clothing hampered its bottom line.

    Target

    (TGT)
    plans to reduce costs by $3 billion over the next three years in an effort to “simplify and gain efficiencies across its business with a focus on reducing complexities and lowering costs,” it said.

    Looking forward to the busy holiday shopping season, Cornell said the “rapidly evolving consumer environment means we’re planning the balance of the year more conservatively.” Target forecasts a low-single digit percentage decline in sales at stores open at least a year.

    “This quarter confirms that the middle-class consumer has been hit hard by inflation and is changing the way they spend by trading down, buying more value-priced goods, and shifting to white label products,” said Hilding Anderson, head of retail strategy at digital consultancy Publicis Sapient, in an email. “It suggests continued headwinds for the non-value players in big box retail during the balance of this holiday season.”

    Earlier this year, Target’s inventory glut forced the company to hold massive discounts on big-ticket items to alleviate the problem. It marked down prices on some discretionary purchases that consumers have pulled back on and canceled pending orders from suppliers.

    Target shares are down more than 20% for the year.

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  • Britain is bringing back austerity. Here’s why | CNN Business

    Britain is bringing back austerity. Here’s why | CNN Business

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    London
    CNN Business
     — 

    The last time a British finance minister revealed tax and spending plans, markets went haywire and the country’s prime minister ultimately lost her job. The new government is not looking for a repeat performance.

    On Thursday, Chancellor Jeremy Hunt is due to unveil a budget that will aim to restore confidence in the United Kingdom’s ability to manage its public finances. But that may be easier said than done.

    The country is staring down the barrel of a grueling recession, and investors remain on edge as interest rates rise. That requires Hunt, who has acknowledged that Britain faces “extremely difficult” decisions, to pull off a delicate balancing act.

    Media reports indicate that the government is looking to come up with between £50 billion ($59 billion) and £60 billion ($70 billion) through a mix of tax increases and spending cuts, many of which may not take effect until after the next election in 2024.

    “If you do too much, too soon, you risk worsening the recession,” said Ben Zaranko, a senior research economist at the Institute for Fiscal Studies. “If you delay everything until after the next election, you risk not being seen as credible.”

    A new wave of austerity could help restore the government’s reputation with financial markets after the budget from former Prime Minister Liz Truss — which featured an unorthodox combination of major tax cuts and ramped-up borrowing — unleashed panic.

    But it will do little to ease fears about the country’s grim economic prospects. The United Kingdom is one of two G7 economies to have contracted in the third quarter. It’s now smaller than it was before the coronavirus pandemic. The Bank of England is forecasting a lengthy recession, which could stretch into 2024.

    New cuts could make matters worse. When the government adopted an austerity program in 2010 on the heels of the Great Recession, it shaved 1% off the country’s GDP, according to the UK budget watchdog. Just four years ago, former Prime Minister Theresa May pledged to bring nearly a decade of austerity to a close.

    Now, tax rises could further depress consumer confidence — already near a record low — and spending cuts risk placing further strain on public services that are already buckling under enormous pressure.

    Still, Hunt intends to show he has a plan to reduce government debt as a proportion of GDP in the medium-term. It currently stands at 98%. The Office for Budget Responsibility said in July that it could reach nearly 320% in 50 years.

    “We do have to do some tax rises, do some spending cuts, if we’re going to show we’re a country that pays our way,” Hunt told Sky News on Sunday.

    How did the United Kingdom get here? There’s no shortage of finger pointing.

    Part of the problem is global in nature. Interest rates have risen rapidly around the world as central banks attempt to rein in inflation. That’s pushed up borrowing costs for the government, dealing a shock after years in which money was cheap.

    At the same time, skyrocketing energy costs, exacerbated by Russia’s war in Ukraine, have compelled governments to step in to cushion the blow of crippling energy bills — shortly after they spent significant sums helping households and businesses through the pandemic.

    Hunt has scrapped plans to cap energy bills for typical households at £2,500 ($2,981) for the next two years. Instead, support will only be guaranteed until next spring. But the measures will still prove costly.

    The government can’t blame all its problems on the rest of the world, however.

    “You can just look at how the UK is performing relative to every other country in Europe, and it’s obvious there’s a UK-specific element to this,” Zaranko said.

    The United Kingdom’s exit from the European Union has weighed on trade and contributed to shortages of workers in key industries.

    “The UK economy as a whole has been permanently damaged by Brexit,” former Bank of England official Michael Saunders told Bloomberg TV this week. “If we hadn’t had Brexit, we probably wouldn’t be talking about an austerity budget this week. The need for tax rises, spending cuts wouldn’t be there.”

    And while inflation in the United States cooled more than expected in October, falling to 7.7%, it’s still rising sharply in the United Kingdom, reaching a 41-year high of 11.1% last month.

    That’s bolstering expectations that the Bank of England will need to keep raising interest rates and could hold them higher for longer, though recession may complicate those forecasts.

    The country’s labor market also remains extremely tight, with an employment rate lower than before the coronavirus hit and a record number of people who aren’t working due to long-term illness.

    “The UK does stand out in that labor supply has been very constrained, perhaps more so than in other countries,” said Ruth Gregory, senior UK economist at Capital Economics.

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  • Yet another key economic report is showing inflation pressures are easing | CNN Business

    Yet another key economic report is showing inflation pressures are easing | CNN Business

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    Minneapolis
    CNN Business
     — 

    A key measure of inflation, wholesale prices, rose by 8% in October from a year before, according to the latest report from the Bureau of Labor Statistics.

    While still historically high, it was the smallest increase since July of last year and significantly better than forecasts. It’s the second inflation report this month to show signs of cooling in the rising prices that have plagued the economy.

    Economists expected the Producer Price Index, which measures prices paid for goods and services before they reach consumers, to show an annual increase of 8.3%, down from September’s revised 8.4%.

    On a monthly basis, producer prices rose 0.2%, below expectations and even with the revised 0.2% increase seen in September.

    Year-over-year, core PPI — which excludes food and energy, components whose pricing is more prone to market volatility — measured 6.7%, down from September’s revised annual increase of 7.1%.

    Month-over-month, core PPI prices were flat, the lowest monthly reading since November 2020. In September, core PPI increased by a revised 0.2% from the month before.

    Economists had expected annual and monthly core PPI to measure 7.2% and 0.3%, respectively, according to estimates on Refinitiv.

    President Joe Biden heralded October’s PPI report Tuesday calling it “more good news for our economy this morning, and more indications that we are starting to see inflation moderate.”

    “Today’s news – that prices paid by businesses moderated last month – comes a week after news that prices paid by consumers have also moderated,” Biden wrote Tuesday. “And, today’s report also showed that food inflation slowed – a welcome sign for family’s grocery bills as we head into the holidays.”

    For much of this year, the Federal Reserve has sought to tamp down decades-high inflation by tightening monetary policy, including issuing an unprecedented four consecutive rate hikes of 75 basis points, or three-quarters of a percentage point.

    The better-than-expected PPI data reflects an economy that has slowed, with supply moving more into balance, said Jeffrey Roach, chief economist for LPL Financial.

    Costs associated with transportation and warehousing, for example, declined for the fourth consecutive month, a likely result of the improved global shipping climate, he said. Producer costs for new cars fell the most since May 2017, he added.

    “Barring geopolitical or financial crises, inflation should continue its deceleration into 2023,” he said in a statement.

    Since PPI captures price changes happening further upstream, the report is considered by some to be a leading indicator for broader inflationary trends and a predictor of what consumers will eventually see at the store level.

    “The PPI read certainly adds more fuel to the fire for those who feel we may finally be on a downward inflation trend,” Mike Loewengart, Morgan Stanley’s head of model portfolio construction, said in a statement.

    Last week’s Consumer Price Index showed inflation slowed to 7.7% from 8.2% year-over-year for consumer goods, surprising investors and giving Wall Street its biggest boost since 2020.

    The CPI data was “reassuring,” Fed vice chair Lael Brainard said on Monday, signaling that the rate hikes appear to be taking hold, and if the economic data continues to show inflation on the decline, then the central bank could scale back the extent of its future rate hikes.

    “When you look at the inflation numbers, there’s some evidence that we’ve peaked, but are we coming down quickly?” Steven Ricchiuto, chief economist for Mizuho Americas told CNN Business.

    Ricchiuto noted that the October figures are only a couple steps lower than what was seen in September.

    “These aren’t the types of things that tell the Fed to stop tightening rates,” he said. However, “they may tell you [that] you don’t need 75 basis points.”

    CNN’s DJ Judd and Matt Egan contributed to this report.

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  • Free Webinar | November 16: How to Lead Through Times of Economic Uncertainty

    Free Webinar | November 16: How to Lead Through Times of Economic Uncertainty

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    Opinions expressed by Entrepreneur contributors are their own.

    Transparency and simplicity about the credit industry, especially in a world of financial uncertainty, is exactly what Kenneth Lin’s goal was when he launched Credit Karma in 2007. Best known for pioneering free credit scores, the platform offers everything related to a person’s financial goals, from identity monitoring, credit cards, and loans — all for free. Now an Intuit (NASDAQ: INTU) company, Credit Karma serves over 120 million people across the U.S., U.K., and Canada – including almost half of all U.S. millennials. In the next Leadership Lessons episode, Lin talks with series host Jason Nazar about how he’s led the company from a team of three to 1,500 employees. Other topics include:

    Register Now

    About The Speakers

    Prior to founding Credit Karma in 2007 as its CEO, Kenneth Lin founded Multilytics Marketing, a data-driven marketing agency that actively managed more than $40 million a year in online marketing dollars for clients such as Wells Fargo, Liberty Mutual and eBay. He has a B.A. in mathematics and economics from Boston University. He was selected to join the esteemed Aspen Institute’s Henry Crown Fellows in 2018.

    Jason Nazar is co-founder/CEO of Comparably, a leading workplace culture employee review site. He was previously co-founder/CEO of Docstoc (acquired by Intuit). Jason was named one of Los Angeles Business Journal’s Most Admired CEOs and appointed the inaugural Entrepreneur in Residence for the city of Los Angeles in 2016. The Los Angeles native received his BA from the University of California Santa Barbara and his JD and MBA from Pepperdine University.

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  • Degrowth: A dangerous idea or the answer to the world’s biggest crisis? | CNN Business

    Degrowth: A dangerous idea or the answer to the world’s biggest crisis? | CNN Business

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    London
    CNN Business
     — 

    Conventional economic logic hinges on a core assumption: Bigger economies are better, and finding ways to maintain or boost growth is paramount to improving society.

    But what if growth is at best doing little to fix the world’s problems, and at worst fostering the destruction of the planet and jeopardizing its future?

    That’s the radical message from the “degrowth” movement, which has spent decades on the political fringes with its warning that limitless growth needs to end. Now, after the pandemic gave people in some parts of the world a chance to rethink what makes them happy, and as the scale of change necessary to address the climate crisis becomes clearer, its ideas are gaining more mainstream recognition — even as anxiety builds over what could be a painful global recession.

    For economists and politicians of all stripes, growth has long served as a North Star. It’s a vehicle for creating jobs and generating taxes for public services, increasing prosperity in rich countries and reducing poverty and hunger in poorer ones.

    But degrowthers argue that an endless desire for more — bigger national economies, greater consumption, heftier corporate profits — is myopic, misguided and ultimately harmful. Gross domestic product, or GDP, is a poor metric for social wellbeing, they stress.

    Plus, they see expanding a global economy that’s already doubled in size since 2005 — and, at 2% growth annually, would be more than seven times bigger in a century — putting the emissions goals necessary to save the world out of reach.

    “An innocent 2 or 3% per year, it’s an enormous amount of growth — cumulative growth, compound growth — over time,” said Giorgos Kallis, a top degrowth scholar based at the Universitat Autònoma de Barcelona. “I don’t see it being compatible with the physical reality of the planet.”  

    The solution, according to the degrowth movement, is to limit the production of unnecessary goods, and to try to reduce demand for items that aren’t needed.

    This unorthodox school of thought has no shortage of critics. Bill Gates has called degrowthers unrealistic, emphasizing that asking people to consume less for the sake of the climate is a losing battle. And even believers acknowledge their framework can be a political nonstarter, given how difficult it is to imagine what weaning off growth would look like in practice.

    “The fact that it’s an uncomfortable concept, it’s both a strength and a weakness,” said Gabriela Cabaña, a degrowth advocate from Chile and doctoral candidate at the London School of Economics.

    Yet in some corners, it’s becoming less taboo, especially as governments and industry fall behind in their efforts to stop the planet from warming beyond 1.5 degrees Celsius, after which some effects of climate change will become irreversible.

    Climate activists, including degrowth supporters, gathered in Munich on November 12, 2021.

    The UN’s Intergovernmental Panel on Climate Change recently cited degrowth in a major report. The European Research Council just allocated roughly $10 million to Kallis and two peers to explore practical “post-growth” policies. And the European Parliament is planning a conference called “Beyond Growth” next spring. European Commission President Ursula von der Leyen is expected to attend.

    Even some on Wall Street are beginning to pay closer attention. Investment bank Jefferies said investors should consider what happens if degrowth gathers steam, noting “climate-anxious” younger generations have different consumer values.

    In the debate over how to avoid climate catastrophe, there’s a key point of consensus: If the worst effects of global warming are to be averted, the world needs to slash annual carbon emissions by 45% by 2030. After that, they need to decline steeply, and fast.

    Most roadmaps laying out a plan to achieve this involve a dramatic reconfiguration of economies around clean energy and other emissions-reducing solutions, while promoting new technologies and market innovations that make them more affordable. This would allow the global economy to keep growing, but in a way that’s “green.”

    Yet proponents of degrowth are skeptical that the world can reduce emissions in time — and protect delicate, interconnected ecological systems — while pursuing infinite economic expansion, which they argue will inevitably require the use of more energy.

    A construction site in Belgrade, Serbia in heavy smog on Nov. 1, 2022.

    “More growth means more energy use, and more energy use makes it more difficult to decarbonize the energy system in the short time we have left,” said Jason Hickel, a degrowth expert who is part of the team that received funding from the European Research Council. “It’s like trying to run down an escalator that is accelerating upward against you.”

    Even if energy can become green, growth also requires natural resources like water, minerals and timber.

    It’s a concern that’s been echoed by Greta Thunberg, arguably the most famous climate activist. She’s criticized “fairy tales about non-existent technological solutions” and “eternal economic growth.” And she’s touched on another point degrowthers raise: Is our current system, which has produced rampant inequality, even working for us?

    This question resonates in the Global South, where there are fears the green energy revolution could simply replicate existing patterns of exploitation and excessive resource extraction, but with minerals like nickel or cobalt — key components of batteries — instead of oil.

    The “love for growth,” said Felipe Milanez, a professor and degrowth advocate based in the Brazilian state of Bahia, is “extremely violent and racist, and it’s just been reproducing local forms of colonialism.”

    Degrowth can be hard to talk about, especially as fears grow about a global recession, with all the pain of lost jobs and shattered businesses that implies.

    But advocates, which often speak about recessions as symptoms of a broken system, make clear they aren’t promoting austerity, or telling developing countries that are eager to raise living standards they shouldn’t reap the benefits of economic development.

    Instead, they talk about sharing more goods, reducing food waste, moving away from privatized transportation or health care and making products last longer, so they don’t need to be purchased at such regular intervals. It’s about “thinking in terms of sufficiency,” Cabaña put it.

    Cars make their way in New Jersey on April 22, 2022. The United States is the second-largest contributor of CO2 emissions.

    Adopting degrowth would require a dramatic rethink of the market capitalism that has been embraced by just about every society on the planet in recent decades.

    Yet some proposals could exist within the current system. A universal basic income — in which everyone receives a lump sum payment regardless of employment status, allowing the economy to reduce its reliance on polluting industries — is often mentioned. So is a four-day work week.

    “When people have more economic security and have more economic freedoms, they make better decisions,” Cabaña said.

    The latest report from the IPCC — the UN authority on global warming — noted that “addressing inequality and many forms of status consumption and focusing on wellbeing supports climate change mitigation efforts,” a nod to one of degrowth’s biggest objectives. The movement was name-checked, too.

    But degrowth is also the subject of significant opposition, even from climate scholars and activists with similar goals.

    “The degrowth people are living a fantasy where they assume that if you bake a smaller cake, then for some reason, the poorest will get a bigger share of it,” said Per Espen Stoknes, director of the Center for Green Growth at the BI Norwegian Business School. “That has never happened in history.”

    Steam and smoke rises from the coal-powered Belchatow Power Station in Rogowiec, Poland. The station emits approximately 30 million metric tons of carbon dioxide per year.

    Backers of green growth are convinced their strategy can work. They cite promising examples of decoupling GDP gains from emissions, from the United Kingdom to Costa Rica, and to the rapid rise in the affordability of renewable energy.

    Gates, the Microsoft co-founder who’s prioritized investing in climate innovations, admits that overhauling global energy systems is a Herculean task. But he thinks boosting the accessibility of the right technologies can still get there.

    Degrowthers know their critiques are controversial, though in some ways, that’s the intent. They think a starker, more revolutionary approach is necessary given the UN estimate that global warming is due to rise to between 2.1 and 2.9 degrees Celsius, based on the world’s current climate pledges.

    “The less time [that] is left now, the more radical change is needed,” said Kohei Saito, a professor at the University of Tokyo.

    Could a growing cohort agree? In 2020, his book on degrowth from a Marxist perspective became a surprise hit in Japan, where concerns about the consequences of stagnant growth has inflected the country’s politics for decades. “Capital in the Anthropocene” has sold nearly 500,000 copies.

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  • Layoffs could weaken Twitter in its biggest global growth markets | CNN Business

    Layoffs could weaken Twitter in its biggest global growth markets | CNN Business

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    New Delhi
    CNN Business
     — 

    It’s less than two weeks since Elon Musk completed his acquisition of Twitter and already there are concerns that the company is choosing to ignore key risks in its biggest international growth markets.

    Twitter laid off thousands of employees across the company on Friday, including staff in India and Africa. The California-based company already had a turbulent relationship with governments in these regions, and tech experts fear that a diminished workforce will leave the platform more vulnerable than ever to misinformation and political pressure.

    Musk’s Twitter laid off nearly all the employees in its only African office just four days after it opened in the Ghanaian capital Accra, multiple sources with knowledge of the situation told CNN.

    Twitter announced that it would open its first African office in Ghana in April 2021, but its employees had been working remotely until last week. The sources told CNN that only one employee appears to have been retained in the Ghana office after the global job cuts.

    “It’s very insulting,” one former employee said on condition of anonymity. “They didn’t even have the courtesy to address me by name. The email just said ‘see attached’ and yet they used my name when they gave me an offer.”

    The company has reportedly also made sweeping reductions in India, one of its biggest markets. It laid off more than 90% of its staff in Asia’s third-largest economy over the weekend, according to a Bloomberg report this week, which cited unnamed sources. Twitter did not respond to multiple requests for comment by CNN.

    The Bloomberg report came two days after the Economic Times newspaper reported that Twitter had let go of 180 of about 230 employees in the country, citing unnamed sources.

    Free speech advocates say that slashing the workforce is bad news for both employees and users in Twitter’s international markets.

    Raman Jit Singh Chima, senior international counsel and Asia Pacific policy director at digital rights group Access Now, said that Twitter had just begun “protecting vulnerable communities” on its platform in India, and now it has sent a “clear signal” that it won’t be investing in public policy and online safety teams anymore.

    Even before the layoffs, Twitter was going through a tough time in both India and Africa.

    India’s ruling party has intensified a crackdown on social media and messaging apps since last year. American tech firms have repeatedly expressed fears that the country’s rules may erode privacy and usher in mass surveillance in the world’s fastest growing digital market. India says it is trying to maintain national security.

    As a result, Twitter had spent months locked in a high-stakes standoff with the government of Prime Minister Narendra Modi over orders to take down content. This year, it even launched a legal challenge over orders to block content.

    Chima fears that Twitter’s depleted workforce may not have the ability to “challenge” the government and its problematic orders anymore. Musk’s other business interests — including a plan to sell Tesla vehicles in India — may further complicate the picture.

    “Musk’s simplistic understanding of free speech coupled with his desire to bring his other businesses to India and secure licensing for those,” make it hard for Twitter to push back, he explained.

    India’s tech ministry did not respond to a request for comment.

    The company also went through a challenging period in Nigeria last year.

    Last June, the Nigerian government suspended Twitter’s operations in the country, accusing the social media firm of allowing its platform to be used “for activities that are capable of undermining Nigeria’s corporate existence.”

    The ban was announced just two days after Twitter deleted a tweet by President Muhammadu Buhari that was widely perceived as offensive. In the tweet, Buhari threatened citizens in the southeast region following attacks on public property.

    Nigeria decided to lift the ban only in January this year.

    Tech experts now fear that the company will find it even harder to navigate new laws in emerging markets.

    “Given India’s adversarial stance against big tech, companies like Twitter have always needed an army of public policy experts in the country to deal with whatever is thrown at them,” said Nikhil Pahwa, Delhi-based founder of tech website MediaNama, adding that he fears Twitter will “struggle to keep pace” with policy changes in India.

    Twitter does not share user numbers, but according to India, the platform has 17.5 million users in the country. Last year, India released new technology rules, which were aimed at regulating online content and require companies to hire people who can respond swiftly to legal requests to delete posts, among other things.

    Pahwa said that while certain “statutory positions” Twitter was forced to fill in order to comply with these rules will stay, he is unsure about the fate of other departments, including public policy, business and content moderation — all of which are key to thriving in growth markets.

    Analysts are also concerned globally about the impact these layoffs will have on misinformation.

    In the United States, there are worries that the growing tumult inside Twitter could weaken its safeguards for the midterm elections.

    Yoel Roth, the company’s head of safety and integrity, said on Friday about 15% of workers in the trust and safety team were let go.

    There are similar concerns in India, where social media activity is expected to ramp up as the country prepares for major state elections in the coming months.

    Content moderation is particularly tricky in India, where over 22 languages and hundreds more dialects are spoken. Digital rights groups had been demanding an increase in investment in the activity for years.

    “Content moderation has to be specific to geography,” said Vivan Sharan, partner at Delhi-based tech policy consulting firm Koan Advisory Group.

    “Are they interested in treating all users equally?” he wondered.

    — Larry Madowo contributed to this report.

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  • Facebook parent company Meta will lay off 11,000 employees | CNN Business

    Facebook parent company Meta will lay off 11,000 employees | CNN Business

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    New York
    CNN Business
     — 

    Facebook parent company Meta on Wednesday said it is laying off 11,000 employees, marking the most significant job cuts in the tech giant’s history.

    The job cuts come as Meta confronts a range of challenges to its core business and makes an uncertain and costly bet on pivoting to the metaverse. It also comes amid a spate of layoffs at other tech firms in recent months as the high-flying sector reacts to high inflation, rising interest rates and fears of a looming recession.

    “Today I’m sharing some of the most difficult changes we’ve made in Meta’s history,” CEO Mark Zuckerberg wrote in a blog post to employees. “I’ve decided to reduce the size of our team by about 13% and let more than 11,000 of our talented employees go.”

    The job cuts will impact many corners of the company, but Meta’s recruiting team will be hit particularly hard as “we’re planning to hire fewer people next year,” Zuckerberg said in the post. He added that a hiring freeze would be extended until the first quarter, with few exceptions.

    In September, Meta had a headcount of more than 87,000, per a September SEC filing.

    Meta’s core ad sales business has been hit by privacy changes implemented by Apple, advertisers tightening budgets and heightened competition from newer rivals like TikTok. Meanwhile, Meta has been spending billions to build a future version of the internet, dubbed the metaverse, that likely remains years away from widespread acceptance.

    Last month, the company posted its second quarterly revenue decline and said that its profit was cut in half from the prior year. Once valued at more than $1 trillion last year, Meta’s market value has since plunged to around $250 billion.

    “I want to take accountability for these decisions and for how we got here,” Zuckerberg wrote in his post Wednesday. “I know this is tough for everyone, and I’m especially sorry to those impacted.”

    Shares of Meta rose 5% in trading Wednesday following the announcement.

    Meta is not alone in feeling the pain of a market downturn. The tech sector has been facing a dizzying reality check as inflation, rising interest rates and more macroeconomic headwinds have led to a stunning shift in spending for an industry that only grew more dominant as consumers shifted more of their lives online during the pandemic.

    “At the start of Covid, the world rapidly moved online and the surge of e-commerce led to outsized revenue growth,” Zuckerberg wrote Wednesday. “Many people predicted this would be a permanent acceleration that would continue even after the pandemic ended. I did too, so I made the decision to significantly increase our investments. Unfortunately, this did not play out the way I expected.”

    “I got this wrong, and I take responsibility for that,” he added.

    Meta’s headcount in September was nearly twice the 48,268 staffers it had at the start of the pandemic in March of 2020.

    A handful of tech companies have announced hiring freezes or job cuts in recent months, often after having seen rapid growth during the pandemic. Last week, rideshare company Lyft said it was axing 13% of employees, and payment-processing firm Stripe said it was cutting 14% of its staff. The same day, e-commerce giant Amazon said it was implementing a pause on corporate hiring.

    Also last week, Facebook-rival Twitter announced mass layoffs impacting roles across the company as its new owner, Elon Musk, took the helm.

    In addition to the layoffs, Zuckerberg said the company expects to “roll out more cost-cutting changes” in the coming months. Meta, which like other tech giants is known for its vast, perk-filled offices, is rethinking its real estate needs, he said, and “transitioning to desk sharing for people who already spend most of their time outside the office.”

    “Overall,” he said, “this will add up to a meaningful cultural shift in how we operate.”

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  • What midterm elections could mean for the US economy | CNN Business

    What midterm elections could mean for the US economy | CNN Business

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    A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.


    New York
    CNN Business
     — 

    Tuesday’s midterm elections come at a time of economic vulnerability for the United States. Recession predictions have largely turned to “when” not “if” and inflation remains stubbornly elevated. Americans are feeling the pain of rising interest rates and are facing a winter filled with geopolitical tension.

    The results of Tuesday’s election will determine the makeup of a Congressional body that holds the potential to enact policies that will fundamentally change the fiscal landscape.

    Here’s a look at what policy issues investors will pay particular attention to as they digest election results.

    Tax changes: Last week, President Joe Biden suggested he may impose a windfall tax on Big Oil companies after they recorded record profits on high gas prices. Republicans would be less likely to approve that windfall tax on oil company profits and also are generally not in favor of tax hikes on the wealthy, reports my colleague Paul R. La Monica.

    “What do midterms mean for the markets? If Republicans get the House, tax hikes are dead in the water,” said David Wagner, a portfolio manager with Aptus Capital Advisors.

    What about tax cuts? If Republicans do take control of Congress, it would be difficult to enact any major tax reductions without some backing from Democrats or President Biden, meaning there could be grandstanding without much action.

    Debt limit: The federal debt ceiling was last lifted in December 2021 and will likely be hit by the Treasury at some point next year. That means it will need to be raised again in order to ensure that America can borrow the money it needs to run its government and ensure the smooth operation of the market for US Treasuries, totaling roughly $24 trillion.

    A fight seems to be brewing between Democrats and Republicans. House Republicans indicate that they may ask for steep spending cuts in exchange for boosting the ceiling.

    If the government ends up divided and brinkmanship continues, there could be bad news for markets. The last time such gridlock occurred, under the Obama administration in 2011, the United States lost its perfect AAA credit rating from Standard & Poor and stocks dropped more than 5%.

    Spending: Democrats have indicated that they intend to focus on parts of the fiscal agenda proposed by President Biden in 2021 that have not yet become law, including expanding health coverage and child care tax credits. A Republican win or gridlock could table that. Goldman Sachs economists also note that a Democratic victory could likely increase the federal fiscal response in the event of recession, while Republicans would be more likely to avoid costly relief packages.

    Social Security: Popular programs like Social Security and Medicare face solvency issues long-term and the topic has become a hot-button issue on both sides of the aisle. The topic is so closely watched that even debating changes could impact consumer confidence, say analysts.

    Democratic Senator Joe Manchin said last week that spending changes must be made to shore up Social Security and other programs which he said were “going bankrupt.” He said at a Fortune CEO conference that he was in favor of bipartisan legislation within the next two years to confront entitlement programs that are facing “tremendous problems.” Republican Senator Rick Scott has proposed subjecting almost all federal spending programs to a renewal vote every five years. Analysts say that could make Social Security and Medicare more vulnerable to cuts.

    The Federal Reserve: Lawmakers have been increasingly speaking out against the pace of the Federal Reserve’s interest rate hikes meant to fight inflation. Democratic Senators Elizabeth Warren, alongside Banking Chair Sherrod Brown, John Hickenlooper and others have called on Fed Chair Jerome Powell to slow the pace of hikes.

    Now, Republicans are getting involved. Senator Pat Toomey, the top Republican on the Banking Committee, asked Powell last week to resist buying government debt if market conditions remain subdued. Expect more scrutiny from both parties after the elections.

    The stock market under President Biden started with a boom, but as we head into midterm elections, markets are going bust, reports my colleague Matt Egan.

    As of Monday, the S&P 500 has fallen by 1.2% since Biden took office in January 2021. That marks the second-worst performance during a president’s first 656 calendar days in office since former President Jimmy Carter, according to CFRA Research.

    Out of the 13 presidents since 1953, Biden ranks ninth in terms of stock market performance through this point in office, besting only former Presidents George W. Bush (-32.8%), Carter (-8.9%), Richard Nixon (-17.2%) and John F. Kennedy (-2.1%), according to CFRA.

    By contrast, Biden’s two immediate predecessors headed into their first midterm election with stock markets surging. The S&P 500 climbed 52.2% during the first 656 calendar days in office for former President Barack Obama and 23.9% under former President Donald Trump, according to CFRA.

    American consumers borrowed another $25 billion in September, according to newly released Federal Reserve data, as higher costs led to further dependence on credit cards and other loans, reports my colleague Alicia Wallace.

    In normal economic times, that would be a concerningly large jump, said Matthew Schulz, chief credit analyst for LendingTree, wrote in a tweet. “However, it is actually the second-smallest increase in the past year.” Economists were anticipating monthly growth of $30 billion, according to Refinitiv consensus estimates.

    The data is not adjusted for inflation, which is at decade highs and weighing heavily on Americans, outpacing wage gains and forcing consumers to rely more heavily on credit cards and their savings.

    In the second quarter of this year, credit card balances saw their largest year-over-year increases in more than two decades, according to separate data from the New York Federal Reserve. The third-quarter household debt and credit report is set to be released Nov. 15.

    Correction: A previous version of this article incorrectly stated the number of calendar days in the analysis as well as the stock market performance under various US presidents during that period.

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  • Democrats confront their nightmare scenario on election eve as economic concerns overshadow abortion and democracy worries | CNN Politics

    Democrats confront their nightmare scenario on election eve as economic concerns overshadow abortion and democracy worries | CNN Politics

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    CNN
     — 

    Democrats close their midterm election campaign Monday facing the nightmare scenario they always feared – with Republicans staging a gleeful referendum on Joe Biden’s struggling presidency and failure to tame inflation.

    Hopes that Democrats could use the Supreme Court’s overturning of the right to an abortion and a flurry of legislative wins to stave off the classic midterm election rout of a party in power are now a memory. Biden faces a dark political environment because of the 40-year-high in the cost of living – and his hopes of a swift rebound next year are clouded by growing fears of a recession.

    On the eve of the election, Democrats risk losing control of the House of Representatives and Republicans are increasingly hopeful of a Senate majority that would leave Biden under siege as he begins his reelection bid and with ex-President Donald Trump apparently set to announce his own campaign for a White House return within days.

    It’s too early for postmortems. Forty million Americans have already voted. And the uncertainty baked into modern polling means no one can be sure a red wave is coming. Democrats could still cling onto the Senate even if the House falls.

    But the way each side is talking on election eve, and the swathe of blue territory – from New York to Washington state – that Democrats are defending offer a clear picture of GOP momentum.

    A nation split down the middle politically, which is united only by a sense of dissatisfaction with its trajectory, is getting into a habit of repeatedly using elections to punish the party with the most power.

    That means Democrats are most exposed this time.

    If the president’s party takes a drubbing, there will be much Democratic finger-pointing over Biden’s messaging strategy on inflation – a pernicious force that has punched holes in millions of family budgets.

    Just as in last year’s losing off-year gubernatorial race in Virginia, which the president won by 10 points in 2020, Democrats are closing the campaign warning about democracy and Trump’s influence while Republicans believe they are addressing the issue voters care about most.

    “Here’s where the Democrats are: they’re inflation deniers, they are crime deniers, they’re education deniers,” Republican National Committee Chair Ronna McDaniel said on CNN’s “State of the Union” on Sunday.

    Hilary Rosen, a longtime Democratic consultant, said on the same show that her party had misjudged the mood of the electorate.

    “I’m a loyal Democrat, but I am not happy. I just think that we are – we did not listen to voters in this election. And I think we’re going to have a bad night,” Rosen told CNN’s Dana Bash.

    “And this conversation is not going to have much impact on Tuesday, but I hope it has an impact going forward, because when voters tell you over and over and over again that they care mostly about the economy, listen to them. Stop talking about democracy being at stake.”

    Rosen is not the only key figure on the left uneasy with the midterm strategy. Former Democratic presidential candidate Bernie Sanders, an independent senator from Vermont, urged the White House to do more to stress economic concerns in recent weeks even while acknowledging the crisis of democracy and the importance of abortion rights. In retrospect, it appears Democrats were slow to recognize that a favorable period over the summer, spurred by falling gasoline prices and a hot streak for the president in passing legislation, wouldn’t last long enough to compensate for a ruinous political environment caused by the economy.

    In effect, Biden’s stress on the threat to US political institutions posed by Trump essentially asks voters to prioritize the historic foundation of America’s political system over their own more immediate economic fears.

    It’s a message that resonates strongly in Washington, DC, where the scars of the US Capitol insurrection are keenly felt. And it is undeniably important because the survival of the world’s most important democracy is at stake. After all, Trump incited an insurrection that tried to thwart the unbroken tradition of peaceful transfers of power between presidents.

    But outside the Beltway bubble of politicians and journalists, democracy feels like a far more distant, esoteric concept than the daily struggle to feed a family and to be able to afford to commute to work. From Pennsylvania to Arizona, the return to normality after the Covid-19 nightmare that Biden promised remains elusive to many as the economic after effects of the once-in-a century health emergency linger.

    The impossibility of the political environment for Democrats was laid bare in a CNN/SSRS poll released last week. Some 51% of likely voters said the economy was the key issue in determining their vote. Only 15% named abortion – a finding that explains how the election battleground has tilted toward the GOP. Among voters for whom the economy is their top concern, 71% plan to vote Republican in their House district. And 75% of voters think the economy is already in a recession, meaning that Biden’s efforts to stress undeniably strong economic areas – including the strikingly low unemployment rate – are likely to fall on deaf ears.

    It’s too simple to say that Biden has ignored the impact of inflation, or doesn’t understand the pain it’s bringing to the country.

    The premise of his domestic presidency and his entire political career has been based on restoring the balance of the economy and restoring a measure of security to working and middle class Americans. His legislative successes could bring down the cost of health care for seniors and create a diversified green economy that shields Americans from future high energy prices amid global turmoil. But the benefits from such measures will take years to arrive. And millions of voters are hurting now and haven’t heard a viable plan from the president to quickly ease prices in the short-term.

    There is no guarantee that plans by Republicans to extend Trump-era tax cuts and mandate new energy drilling would have much impact on the inflation crisis either. And divided government would likely mean a stalemate between two dueling economic visions. But the election has turned into a vehicle for voters to stress their frustration, with no imminent hope that things will get better soon.

    Biden has resorted to highlighting bright spots of the economy – claiming to have reignited manufacturing, high job creation and a robust effort to compete with China. He’s now warning that Republicans would gut Social Security and Medicare on which many Americans rely in retirement.

    And in practice, there is not much a president can do to quickly lower inflation on their own. The Federal Reserve is in the lead and the central bank’s strategy of rising interest rates could trigger a recession that could further haunt Biden’s presidency.

    Inflation and high gas prices are also a global issue and have been worsened by factors beyond Biden’s control, including the war in Ukraine and supply chain issues brought on by the pandemic. At the same time, however, economists are debating the wisdom of Biden’s high-spending bills that sent billions of dollars into an overheating economy. And the White House’s repeated downplaying of the soaring cost of living as “transitory” badly misjudged the situation and was another thing that battered Biden’s credibility – on top of the confidence some voters lost in him during the US withdrawal from Afghanistan last year.

    The Republican Party also got exactly what it wanted as Trump has delayed his expected campaign announcement until after the midterms, depriving Biden of the opportunity to shape this election as a direct clash with an insurrectionist predecessor whom he beat in 2020 and who remains broadly unpopular. Such a confrontation might have enabled the president to dampen the impact of his own low approval ratings and win over voters who still disdain the twice-impeached former president.

    Ironically, Biden’s struggles in framing a believable economic message could bring about the very crisis of democracy that he is warning about.

    Any incoming GOP majority would be dominated by pro-Trump radicals. Prospective committee chairs have already signaled they will do their best to deflect from Trump’s culpability on the January 6, 2021, insurrection and go after the Justice Department as it presses on with several criminal investigations into the ex-President’s conduct. And Tuesday’s election could usher in scores of election deniers in state offices who could end up controlling the 2024 presidential election in some key battlegrounds. GOP dominance of state legislatures could further curtail voting rights.

    High inflation has also always been a toxic force that brews political extremism and tempts some voters to be drawn to demagogues and radicals whose political creed is based on stoking resentment and stigmatizing outsiders.

    If Democrats do lose big on Tuesday night, Trump will be a beneficiary.

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  • Polling shows that most voters say economic concerns are top of mind | CNN Politics

    Polling shows that most voters say economic concerns are top of mind | CNN Politics

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    CNN
     — 

    Economic issues remain a top concern for most voters ahead of the 2022 election, a review of recent polling finds, with many also worried about America’s democratic process itself. But voters’ highest priorities are divided along partisan lines, with abortion rights continuing to resonate strongly for Democrats, while Republicans remain sharply focused on inflation. Concerns about other issues, from gun policy to immigration, are often similarly polarized. And some topics that drew attention in previous elections – like the coronavirus pandemic – are relatively muted this year.

    Recent polling provides a good general sense of which issues have become the focal points of this year’s elections, and for whom. But what voters truly consider important, and how those concerns influence their decisions, is too complicated to be fully captured in a single poll question.

    As we’ve noted previously, voters tend to say they care about a lot of different issues. That, however, doesn’t necessarily mean any of those issues will be decisive in a specific race, either by motivating people to vote when they wouldn’t have otherwise, or by convincing them to vote for a different candidate than they would have otherwise.

    In practice, few campaigns revolve around a single issue, with voters left to weigh the merits of entire platforms. In a recent NBC News poll, for instance, voters were close to evenly split on whether they placed more importance on “a candidate’s position on crime, the situation at the border, and addressing the cost of living by cutting government spending,” or on “a candidate’s position on abortion, threats to democracy and voting, and addressing the cost of living by raising taxes on corporations.”

    And in some cases, voters’ primary focus may not be on the issues at all. In CNN’s recent polls of Pennsylvania and Wisconsin, a majority of likely voters in both states said that candidates’ character or party control of the Senate played more of a role in their decision-making than did issue positions.

    Here’s a recap of what the polls are showing now.

    CNN’s most recent polls have examined voters’ priorities from two different angles. A survey conducted in September and early October asked voters to rate a series of different issues on a scale from “extremely important” to “not that important,” while a second survey conducted in late October asked them to select a single top priority. On both measures, the economy emerged as a top concern.

    In the first poll, nine in 10 registered voters said they considered the economy at least very important to their vote for Congress, with 59% calling it extremely important. And in the second poll, 51% of likely voters said the economy and inflation would be most important to them in their congressional vote, far outpacing any other issue.

    While economic concerns rank highly among both parties, the CNN surveys found a pronounced partisan divide. Among registered voters in the first poll, 75% of Republicans called the economy extremely important to their vote, compared with about half of independents (51%) and Democrats (50%). And in the second, 71% of Republican likely voters called the economy and inflation their top issue, while 53% of independents and 27% of Democrats said the same.

    The Republican Party also holds an advantage on economic issues. In a Fox News poll, voters said by a 13-point margin that the GOP would do a better job than the Democratic Party of handling inflation and higher prices. And in a mid-October CBS News/YouGov poll, voters were nine points likelier to say that GOP control of Congress would help the economy than to say it would hurt. Voters also said, by a 19-point margin, that Democratic economic policies during the last two years in Congress have hurt, rather than helped.

    At the same time, voters express concerns beyond pocketbook issues. In that CBS News/YouGov survey, 85% of likely voters said that their “personal rights and freedoms” will be very important in their 2022 vote, while a smaller 68% said the same of their “own household’s finances.”

    Following the Supreme Court’s overturn of Roe v. Wade, abortion has taken far higher precedence in this midterm than in recent past elections, particularly among Democrats.

    In CNN’s September/October poll, nearly three-quarters (72%) of registered voters called abortion at least very important to their vote, with 52% calling it extremely important. The share of voters calling abortion extremely important to their vote varied along both partisan and gender lines: 72% of Democratic women, 54% of independent women and 53% of Republican women rated it that highly, compared with fewer than half of men of any partisan affiliation.

    And in CNN’s latest poll, 15% of likely voters called abortion their top issue, placing it second – by some distance – to economic concerns. Democratic voters were about split between the two issues, with 27% prioritizing the economy and inflation, and 29% placing more importance on abortion.

    Abortion policy does stand out in some surveys as particularly likely to serve as a litmus test. In the Fox News poll, 21% of voters named abortion or women’s rights as an issue “so important to them that they must agree with a candidate on it, or they will NOT vote for them,” outpacing issues including the economy and immigration, and far greater than the 7% who named abortion when asked the same question in a 2019 survey.

    To the extent that abortion serves as a voting issue, it’s more of a factor for abortion rights supporters – something that was not necessarily the case in the past. In the mid-October CBS News/YouGov poll, just 17% of likely voters say they view their congressional vote this year as a vote to oppose abortion rights, while 45% say it’s in support of abortion rights, with the rest saying abortion is not a factor. In a recent AP-NORC survey, the Democrats hold a 23-point lead over Republicans on trust to handle abortion policy, their best showing across a range of issues; in a recent NPR/PBS NewsHour/Marist poll, the Democrats lead by 12 points.

    Immigration’s role as an electoral issue has grown increasingly polarized. In CNN’s September/October poll, 44% of registered voters called immigration extremely important, on par with concerns ahead of the 2018 midterms. But Republican voters were 35 percentage points likelier than Democratic voters to call immigration extremely important, up from a 17-point gap four years ago.

    That partisan dynamic also plays out in which party is more trusted to handle immigration-related topics: In the NPR/PBS NewsHour/Marist poll, voters say by a 14-point margin that the GOP would do a better job than the Democratic Party on dealing with immigration. In the Fox poll, voters say by a 21-point margin that they trust the GOP over the Democrats to handle border security, making it by far the Republicans’ strongest issue by that metric.

    But with Republicans overwhelmingly focused on the economy, immigration isn’t at the forefront of many voters’ minds this year. In the latest CNN poll, just 9% of Republican voters and 4% of Democratic voters called it their top issue.

    This year also finds voters concerned about the electoral process. An 85% majority of registered voters in CNN’s September/October poll called “voting rights and election integrity” at least very important to their vote, with 61% calling those topics extremely important. Both 70% of Democrats and 64% of Republicans said the issue was extremely important, in comparison with a smaller 47% of independents. Seven in 10 registered voters in a Pew Research survey out in October said that “the future of democracy in the country” will be very important to their vote this year, with 58% saying the same about “policies about how elections and voting work in the country” – in each case, that included a majority of both voters supporting Democratic candidates and those supporting Republicans.

    But levels of concern can vary depending on how the issue is framed. In the NPR/PBS NewsHour/Marist poll, 28% of registered voters, including 42% of Democrats, picked “preserving democracy” as the issue that’s top of mind for them in this election. In CNN’s latest poll, just 9% of likely voters, including 15% of Democrats, called “voting rights and election integrity” their top issue.

    The driving factors behind voters’ worries also vary significantly. In the Fox News poll, 37% of voters said they were extremely concerned about candidates and their supporters not accepting election results, while 32% were extremely concerned about voter fraud. In an October New York Times/Siena poll, about three-quarters (74%) of likely voters said they believed American democracy was currently under threat, but in a follow-up questioning asking them to summarize the threat they were envisioning, they diverged. Some cited specific politicians, most notably former President Donald Trump (10%) or President Joe Biden (6%), while others offered broad concerns about corruption or the government as a whole (13%).

    In CNN’s September/October poll, 43% of registered voters said that the phrase “working to protect democracy” better described the Democratic congressional candidates in their area, while 36% thought it better fit their local Republican candidates. In the NPR/PBS NewsHour/Marist poll, voters said, 44% to 37%, that the Democratic Party would do a better job than the Republican Party of “dealing with preserving democracy.”

    Most voters in this year’s elections express concerns about guns and violent crime, but relatively few voters call either their top issue. There’s also a notable partisan divide depending on the framing, with Republicans more concerned about crime, and Democrats more attentive to gun policy.

    In a late October CBS News/YouGov poll, 65% of likely voters said crime would be very important to their vote, and 62% said gun policy would be very important. An 85% majority of Republican likely voters, compared with 47% of Democratic likely voters, called crime very important. By contrast, while 74% of Democratic likely voters called gun policy very important, a smaller 53% of Republican likely voters said the same.

    According to Gallup, voters’ prioritization of gun policy spiked this summer following a wave of high-profile mass shootings, before fading as a concern in the fall; the Pew Research Center polling found less significant changes in voters’ priorities over that time.

    Neither issue is currently widespread as a top concern. In the latest CNN poll, 7% of likely voters called gun policy their top issue, and just 3% said the same of crime.

    In an October Wall Street Journal poll, 43% of registered voters said they trusted Republicans in Congress more to handle reducing crime, compared with the 29% who said they trust Democrats in Congress. Voters who were instead asked about reducing “gun violence” gave Democrats a 7-point edge.

    The polling also reveals a few issues that aren’t receiving similarly widespread public attention this year. Among them is coronavirus, which just 27% of likely voters in the latest CBS News/YouGov poll called very important to their vote, rising to 44% among Democrats. Despite this year’s major climate change legislation, that issue ranked last among the seven issues CNN asked about in the September/October poll, with only 38% of registered voters calling it extremely important to their vote – although the issue had far more resonance among Democrats (60% of whom called it extremely important) and voters younger than age 35 (46% of whom did). And relatively few in the electorate are substantially focused on the war in Ukraine: in Fox’s polling, just 34% of registered voters said they were extremely concerned about Russia’s invasion of the country.

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  • Interest rates will keep rising. How high will they go? | CNN Business

    Interest rates will keep rising. How high will they go? | CNN Business

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    A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.


    New York
    CNN Business
     — 

    What will the Federal Reserve do at its meeting in December? Analysts can speculate all they want, but Fed officials say they will be using hard economic data to make their next decision.

    That means key housing, labor, and inflation reports will likely have outsized effects on the market as investors speculate about what they might mean for the future of interest rates.

    What’s happening: No one can move markets like Federal Reserve Chair Jerome Powell — with just a few words on Wednesday he crushed investors’ hopes of an interest rate pivot and sent stocks plunging. “We have a ways to go,” said Powell of the Fed’s current hiking regime meant to fight persistent inflation. “It’s very premature, in my view, to think about or be talking about pausing.”

    But Powell did add an important caveat. The Fed could start to slow the pace of those painful hikes as soon as December. “Our decisions will depend on the totality of incoming data and their implications for the outlook for economic activity and inflation,” Powell said on Wednesday.

    So what will the Fed be looking at between today and its next policy decision on December 14?

    The labor market: The Fed’s biggest worry is the super-tight US labor market, and Friday’s jobs report isn’t likely to soothe any nerves.

    The government report is expected to show the economy added another 200,000 positions in October — down from last month, but still a very solid number as demand for employment continues to outpace the supply of labor.

    That means more inflation. Businesses have to pay higher wages to attract employees and are able to charge more for their goods and services. The Fed will be looking closely at hourly wage growth in the report. In September, wages rose by 5% from a year ago.

    There is a possible upside: Another jobs report in December is expected ahead of the Fed meeting. If both reports show a downward trajectory in employment, that could be enough to placate Fed officials, even if the unemployment rate remains historically low.

    Inflation data: Expect new data from two major indexes that measure the pace of inflation ahead of the next Federal Reserve meeting.

    The Consumer Price Index (CPI) for October, which tracks changes in the prices of a fixed set of goods and services, is out on November 10.

    Core CPI prices, which exclude oil and food, rose 0.6% in September month-over-month, matching August’s pace and coming in well above expectations of a 0.4% increase, not a great sign for the Fed. And analysts expect to see another large 0.5% increase in October.

    The Fed will also get to see October data from its favored measure of inflation, Personal Consumption Expenditures (PCE), on December 1.

    PCE reflects changes in the prices of goods and services purchased by consumers in the United States. The Fed believes the measure is more accurate than CPI because it accounts for a wider range of purchases from a broader range of buyers.

    Core PCE climbed by 5.1% on an annual basis in September, higher than the August rate of 4.9% but below the consensus estimate of 5.2%, per Refinitiv.

    Housing: The housing market has been deeply impacted by the Fed’s efforts to fight inflation, and is one of the first areas of the economy to show signs of cooling.

    The 30-year fixed-rate mortgage averaged 6.95% last week, up from 3.09% just a year ago, and elevated borrowing costs are leading to a decline in demand.

    “The housing market was very overheated for the couple of years after the pandemic as demand increased and rates were low,” said Powell on Wednesday. “We do understand that that’s really where a very big effect of our policies is.”

    October’s new and existing home sales numbers, due on November 18 and 23, will show the continued impact of that policy ahead of the next meeting.

    The US economy is still standing strong in the face of rising interest rates, but things are softening much more quickly across the pond.

    The United Kingdom will face hard economic times and elevated interest rates well into next year, officials warned this week.

    The Bank of England raised interest rates by three-quarters of a percentage point on Thursday, the biggest hike in 33 years, as it attempts to fight soaring inflation.

    But the bank also issued a stark warning. It said that economic output is already contracting and that it expects a recession to continue through the first half of 2024 “as high energy prices and materially tighter financial conditions weigh on spending.”

    A two-year recession would be longer than the one that followed the 2008 global financial crisis, though the Bank of England said that any declines in GDP heading into 2024 would likely be relatively small.

    The central bank also doesn’t think inflation will start to fall back until next year. That will require more interest rate hikes in the coming months, warned policymakers.

    Elon Musk has been busy over at Twitter HQ. Aside from tweeting and deleting a conspiracy theory, he’s talked about implementing some big changes at his $44 billion acquisition. Here’s what’s happened so far:

    Layoffs begin: Elon Musk began laying off Twitter employees on Friday morning, according to a memo sent to staff. The email sent Thursday evening notified employees that they will receive a notice by 12 p.m. ET Friday that informs them of their employment status.

    The email added that “to help ensure the safety” of employees and Twitter’s systems, the company’s offices “will be temporarily closed and all badge access will be suspended.”

    Twitter had around 7,500 employees prior to Musk’s takeover.

    Several Twitter employees have already filed a class action lawsuit claiming that the layoffs violate the federal Worker Adjustment and Retraining Notification Act.

    The WARN Act requires any company with over 100 employees to give 60 days’ written notice if it intends to cut 50 jobs or more at a “single site of employment.”

    Consolidating strength: In less than a week since Musk acquired Twitter, the company’s C-suite appears to have almost entirely cleared out, through a mix of firings and resignations.

    Twitter’s board of directors was also dissolved last week, according to a securities filing.

    The company filing states that all previous members of Twitter’s board, including recently ousted CEO Parag Agrawal and chairman Bret Taylor, are no longer directors “in accordance with the terms of the merger agreement.” That makes Musk, according to the filing, “the sole director of Twitter.”

    Cashing blue checks’ checks: Musk on Tuesday said he planned to charge $8 a month for Twitter’s subscription service, called “Twitter Blue,” with the promise to let anyone pay to receive a coveted blue check mark to verify their account. That’s a steep haircut from his original plan to charge users $19.99 a month to get or keep a verified account.

    In a tweet, the world’s richest man used an expletive to describe his assessment of “Twitter’s current lords & peasants system for who has or doesn’t have a blue checkmark.” He added: “Power to the people! Blue for $8/month.”

    Advertisers hit pause: Elon Musk wrote an open letter to advertisers just hours before cementing his acquisition of Twitter, explaining that he didn’t want the platform to become a “free-for-all hellscape.” But that attempt at reassuring the advertising industry, which makes up the vast majority of Twitter’s business, doesn’t appear to be working.

    General Mills

    (GIS)
    , Mondelez International

    (MDLZ)
    , Pfizer

    (PFE)
    and Audi

    (AUDVF)
    have reportedly joined a growing list of companies hitting pause on their Twitter advertising in the wake of Musk’s acquisition.

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  • Apple is weathering the economic downturn better than fellow tech giants | CNN Business

    Apple is weathering the economic downturn better than fellow tech giants | CNN Business

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    New York
    CNN Business
     — 

    Apple beat Wall Street analysts’ sales and income expectations for the quarter ended in September, despite an otherwise bruising earnings season for tech companies and worries that demand for the newest iPhones might have been weaker-than-expected.

    The tech giant posted sales of just over $90 billion during its fiscal fourth quarter, up 8% from the same period in the prior year. Profits reached $20.7 billion, a gain of just under 1% from the year-ago quarter.

    “Our record September quarter results continue to demonstrate our ability to execute effectively in spite of a challenging and volatile macroeconomic backdrop,” Apple CFO Luca Maestri said in a statement.

    Apple

    (AAPL)
    shares dipped just over 1% in after-hours trading Thursday following the report.

    Sales from Apple’s products segment grew 9% year-over-year to nearly $71 billion, a decline in growth rate from the prior year but one that was not unexpected. As consumers grapple with high inflation and fears of a possible recession — and, outside the United States, an unusually strong dollar — there had been questions about how successful Apple would be at convincing users to shell out for a device upgrade.

    During a call with analysts following the report, CEO Tim Cook said that the company hit a September quarter revenue record for iPhone.

    The company’s services segment, which includes paid subscriptions to products like Apple TV+ and Apple Music, posted $19.2 billion in sales, up nearly 5% from the year-ago quarter, marking a decline in growth rate from the prior year. The services segment is viewed as an increasingly important unit for the company, designed to offset slowing growth in parts of its hardware business. Apple now has more than 900 million paid subscriptions across its services, up 155 million from a year ago, Maestri said.

    Apple earlier this week raised the prices for its music and TV streaming services, which could help boost sales going forward.

    “Like other major tech companies, even Apple is suffering from the negative impact of a worsening macro backdrop and ongoing supply chain woes, though it has done a better job of navigating through the challenging environment,” Investing.com analyst Jesse Cohen said in a statement.

    Apple declined to provide revenue guidance for the all-important holiday quarter. However, Maestri said it expects year-over-year revenue growth to decelerate in the December quarter compared to the September quarter, citing the strength of the US dollar and ongoing macroeconomic weakness.

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  • Google’s core business is slowing down amid recession fears | CNN Business

    Google’s core business is slowing down amid recession fears | CNN Business

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    New York
    CNN Business
     — 

    Google may be the giant in the digital advertising world, but even it is not immune to the impact that the economic downturn and recession fears are having on the online ad market.

    Google parent company Alphabet

    (GOOGL)
    on Tuesday reported earnings results for the third quarter that fell short of Wall Street analysts’ estimates for both sales and profits, due in large part to a sharp slowdown in the growth of its core advertising business.

    It reported revenue of nearly $69.1 billion, up just 6% from the same period in the prior year. Google’s advertising revenues grew just 2.5% year-over-year, compared to the 43% growth it posted a year ago. YouTube’s ad business, which competes with TikTok, was especially hard hit, with revenue declining nearly 2% from the year-ago quarter.

    Google’s net income, meanwhile, came in at $13.9 billion, down more than 26% from the year prior and well below the $16.6 billion analysts had projected.

    The company’s shares fell 6% in after-hours trading Tuesday following the report.

    Sundar Pichai, CEO of Alphabet and Google, nodded to the tougher economic climate in a statement included with the results.

    “We’re sharpening our focus on a clear set of product and business priorities,” Pichai said. “We are focused on both investing responsibly for the long term and being responsive to the economic environment.”

    Tech companies, including Google, reported that they’d started to feel the impact of declining online ad spending in the prior quarter. High inflation, looming recession fears and the ongoing war in Ukraine have all continued to weigh on the industry.

    Growth in other areas of Google’s business also appear to be slowing. Google Cloud revenue grew 37% year-over year, a deceleration from the nearly 45% growth it posted in the year-ago quarter, and the segment’s net loss increased to $699 million from $644 million during the same quarter last year.

    Net loss from Google’s “Other Bets” segment, which includes business efforts such as its self-driving car unit Waymo, also accelerated year-over-year during the quarter to $1.6 billion.

    “Google delivered a disappointing quarter with the search giant underperforming our expectations across almost all business units, most importantly its core ad search segment,” said Investing.com Senior Analyst Jesse Cohen.

    During a call with analysts Tuesday, Pichai said the company has begun “realigning resources to invest in our biggest growth opportunities.”

    “Over the past quarter, we have made several shifts away from lower priority efforts to fuel highest growth priorities,” Pichai said, adding that the company plans to cut back on headcount additions during the final three months of the year.

    Google CFO Ruth Porat said on the call that strong growth in the fourth quarter of 2021 will make year-over-year ad revenue growth comparisons to the current quarter difficult, and that the strength of the US dollar is expected to increasingly weigh on the company’s results. The company did not provide detailed financial outlook for the current quarter.

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