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Tag: economic indicators

  • Another rally for Alphabet leads the US stock market higher

    NEW YORK (AP) — The U.S. stock market rallied on Monday, at the start of a week with shortened trading because of the Thanksgiving holiday.

    The S&P 500 climbed 1.5% for one of its best days since the summer and added to its jump from Friday, finding some strength following a shaky few weeks. The Dow Jones Industrial Average rose 202 points, or 0.4%, and the Nasdaq composite jumped 2.7%.

    Stocks got a lift from rising hopes that the Federal Reserve will cut its main interest rate again at its next meeting in December, a move that could boost the economy and investment prices.

    The market also benefited from strength for stocks caught up in the artificial-intelligence frenzy. Alphabet, which has been getting praise for its newest Gemini AI model, rallied 6.3% and was one of the strongest forces lifting the S&P 500. Nvidia rose 2.1%.

    Monday’s gains followed sharp swings in recent weeks, not just day to day but also hour to hour, caused by uncertainty about what the Fed will do with interest rates and whether too much money is pouring into AI and creating a bubble. All the worries are creating the biggest test for investors since an April sell-off, when President Donald Trump shocked the world with his “Liberation Day” tariffs.

    Despite all the recent fear, the S&P 500 remains within 2.7% of its record set last month.

    “It’s reasonable to expect that stocks will experience periods of pressure from time to time, which, historically, is quite healthy for longer-term strength,” Anthony Saglimbene, Ameriprise chief market strategist, wrote in a note to investors.

    Several more tests lie ahead this week for the market, which could create more swings, though none loom quite as large as last week’s profit report from Nvidia or the delayed jobs report from the U.S. government for September.

    One of the biggest tests will arrive Tuesday, when the U.S. government will deliver data showing how bad inflation was at the wholesale level in September.

    Economists expect it to show a 2.6% rise in prices from a year earlier, the same inflation rate as August. A worse-than-expected reading could deter the Fed from cutting its main interest rate in December for a third time this year, because lower rates can worsen inflation. Some Fed officials have already argued against a December cut in part because inflation has stubbornly remained above their 2% target.

    Traders are nevertheless betting on a nearly 85% probability that the Fed will cut rates next month, up from 71% on Friday and from less than a coin flip’s chance seen a week ago, according to data from CME Group.

    U.S. markets will be closed on Thursday for the Thanksgiving holiday. A day later, it’s on to the rush of Black Friday and Cyber Monday.

    On Wall Street, U.S.-listed shares of Danish drugmaker Novo Nordisk fell 5.6% Monday after it reported that its Alzheimer’s drug failed to slow progression of the disease in a trial.

    Grindr dropped 12.1% after saying it’s breaking off talks with a couple of investors who had offered to buy the company, which helps its gay users connect with each other. A special committee of the company’s board of directors said it had questions about the financing for the deal by the investors, who collectively own more than 60% of Grindr’s stock.

    All told, the S&P 500 rose 102.13 points to 6,705.12. The Dow Jones Industrial Average climbed 202.86 to 46,448.27, and the Nasdaq composite jumped 598.92 to 22,872.01.

    Bitcoin, meanwhile, continued it sharp swings. It was sitting around $89,000 after bouncing between $82,000 and $94,000 over the last week. It was near $125,000 last month.

    In stock markets abroad, indexes were mixed in Europe and Asia.

    Hong Kong’s Hang Seng jumped 2% for one of the world’s biggest moves. It got a boost from a 4.7% leap for Alibaba, which has reported strong demand for its updated Qwen AI app. Alibaba is due to report earnings on Tuesday.

    In the bond market, Treasury yields eased a bit. The yield on the 10-year Treasury fell to 4.03% from 4.06% late Friday.

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    AP Business Writers Matt Ott and Elaine Kurtenbach contributed.

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  • Stocks climb on hopes for lower interest rates as Dow rallies 660 points

    NEW YORK (AP) — The U.S. stock market climbed again Tuesday on hopes for a coming cut to interest rates.

    The S&P 500 rose 0.9% after breaking out of a morning lull and is back within 1.8% of its all-time high. The Dow Jones Industrial Average rallied 664 points, or 1.4%, and the Nasdaq composite gained 0.7%.

    Stocks got a boost from easing yields in the bond market. Lower interest rates can cover up many sins in financial markets, including prices going too high, and hopes are strong that the Federal Reserve will cut its main interest rate at its next meeting to juice the economy further.

    A raft of mixed economic data on Tuesday left traders betting on a nearly 83% probability that the Fed will cut in December, according to data from CME Group. That’s roughly the same as a day before and up sharply from the coin flip’s chance that they saw just a week ago.

    One of Tuesday’s reports said that shoppers bought less at U.S. retailers in September than economists expected. Another said confidence among U.S. consumers worsened by more in November than expected, a second signal that the economy could potentially use the help of lower interest rates.

    Easier rates can boost the economy by encouraging households and companies to borrow more and investors to pay higher prices for investments than they would otherwise.

    A third report, meanwhile, said inflation at the wholesale level was a touch worse in September than economists expected, but a closely tracked underlying trend was slightly better. That’s important because lower interest rates can make inflation worse, and high inflation is the main deterrent that could keep the Fed from cutting rates.

    After taking all the data together, economists suggested the Fed and its chair, Jerome Powell, could be leaning toward cutting rates on Dec. 10. The Fed has already cut rates twice this year in hopes of shoring up the slowing job market.

    “Taking a pause on rate cuts would probably do more damage to sentiment than a cut would help,” according to Brian Jacobsen, chief economist at Annex Wealth Management, who also said “Powell doesn’t need to be the Grinch that stole Christmas.”

    Easier interest rates can give particularly big boosts to smaller companies, because many of them need to borrow to grow. The Russell 2000 index of the smallest U.S. stocks jumped 2.1% to lead the market.

    Elsewhere on Wall Street, several retailers leaped after delivering stronger profits for the summer than analysts expected.

    Abercrombie & Fitch soared 37.5% after the apparel seller reported a better profit than expected. It also raised the bottom end of its forecasted range for revenue and profit over the full year.

    Kohl’s surged 42.5% after reporting a profit for the latest quarter, when analysts were expecting a loss. Best Buy rose 5.3% after boosting its profit forecast for the full year following a better-than-expected third quarter, citing strength across computing, gaming and mobile phones.

    Dick’s Sporting Goods erased an early drop of 4% to add 0.2%. It raised its forecast for results at its Dick’s stores, though its purchase of Foot Locker is requiring some work. Executive Chairman Ed Stack said the company is “cleaning out the garage” at Foot Locker by clearing inventory, closing poorly performing stores and making other moves.

    Swings also continued in the artificial-intelligence industry, which has battled concerns that too many dollars are pouring into data centers and may not produce the revolution of bigger profits and productivity that proponents are predicting.

    Alphabet rose another 1.5%, continuing a strong run on excitement about its recently released Gemini AI model. Chinese giant Alibaba, meanwhile, saw its stock that trades in the United States fall 2.3% after losing an early gain. It reported stronger revenue than analysts expected for the latest quarter thanks in part to the AI boom, but its overall profit fell short of forecasts.

    Some chip companies dropped sharply following a report from The Information that Meta Platforms is in talks to spend billions of dollars on AI chips from Alphabet instead of them. Nvidia sank 2.6% and Advanced Micro Devices dropped 4.1%.

    All told, the S&P 500 rose 60.76 points to 6,765.88. The Dow Jones Industrial Average rallied 664.18 to 47,112.45, and the Nasdaq composite gained 153.59 to 23,025.59.

    In the bond market, the yield on the 10-year Treasury eased to 4.00% from 4.04% late Monday.

    In stock markets abroad, indexes rose across Europe and Asia. Germany’s DAX returned 1%, and stocks in Shanghai climbed 0.9% for two of the world’s bigger moves.

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    AP Business Writer Elaine Kurtenbach contributed.

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  • Nvidia’s strong earnings and a solid report on the job market boost US index futures

    NEW YORK — U.S. stock index futures added to their gains after the government reported that employers added twice as many jobs as expected in September. Futures were already higher on enthusiasm for a strong earnings report from AI bellwether Nvidia. Futures for the S&P 500 were up 1.5% before the opening bell, while futures for the Dow Jones Industrial Average gained 0.8%. Futures for the Nasdaq shot 1.9% higher. The Labor Department said employapners added 119,000 jobs in September, more than double the 50,000 economists had forecast. The market also focused on Nvidia as Wall Street’s most influential company jumped 5.1% overnight after reporting better-than-expected results.

    THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

    Wall Street surged on Thursday after Nvidia reported stronger than expected quarterly earnings, tempering worries that AI-related stocks may have become overvalued.

    Futures for the S&P 500 were up 1.1% before the opening bell, while futures for the Dow Jones Industrial Average gained 0.5%. Futures for the Nasdaq shot 1.6% higher.

    The market’s focus remained on Nvidia as Wall Street’s most influential stock jumped 5.1% overnight after the chipmaker reported third-quarter earnings of $31.9 billion. That’s a 65% increase over last year and more than analysts were expecting.

    The Santa Clara, California company also forecast revenue for the current quarter covering November-January will come in at about $65 billion, nearly $3 billion above analysts’ projections, an indication that demand for its AI chips remains feverish.

    Nvidia is the most valuable company by market capitalization on Wall Street, having briefly topped $5 trillion in value. That means its movements have more of an effect on the S&P 500 than any other stock, and it can single-handedly steer the index’s direction some days.

    By continuing to deliver big profits for investors, Nvidia has mostly quieted recent criticism that its shares shot too high, too fast.

    Nvidia has become a bellwether for the broader frenzy around artificial-intelligence technology, because other companies are using its chips to ramp up their AI efforts.

    Walmart also reported its latest quarterly results Thursday. The Arkansas retailer delivered another standout quarter, posting strong sales and profits that blew past Wall Street expectations as it continues to lure cash-strapped Americans who have grown increasingly anxious about the economy and prices.

    With other retailers dialing back projections, the nation’s largest retailer raised its financial outlook Thursday after its strong third quarter, setting itself up for a strong holiday shopping season.

    Traders also made their final moves ahead of a September jobs report coming from the U.S. government on Thursday. The labor market data, usually released during the first week of every month, was delayed due to the six-week federal government shutdown.

    The Labor Department said Wednesday that it will not be releasing a full jobs report for October because the 43-day shutdown meant it couldn’t calculate the unemployment rate and some other key numbers.

    The job market has been slowing enough this year that the Fed has already cut its main interest rate twice. Lower rates can give a boost to the economy and to prices for investments, and the expectation on Wall Street had been for more cuts, including at the Fed’s next meeting in December.

    But some Fed officials are hinting that they should pause next month, in part because inflation has stubbornly remained above the Fed’s 2% target. Lower interest rates can worsen inflation.

    At midday in Europe, Germany’s DAX rose 0.8%, while Britain’s FTSE 100 and the CAC 40 in Paris each added 0.6%.

    In Asia, Japan’s Nikkei 225 index initially surged as much as 4.2% before giving up some early gains. It closed nearly 2.7% higher at 49,823.94 as technology stocks rallied, with investor sentiment boosted by Nvidia’s strong quarterly results after trading closed in the U.S.

    South Korea’s Kospi added 1.9% to 4,004.85, with gains led by technology and energy stocks. Investors were encouraged by Nvidia’s earnings and reports that the U.S. may delay planned semiconductor tariffs.

    Samsung Electronics gained 4.2%, while SK Hynix added 1.6%.

    Chinese markets ended mixed as reports said the government might be planning more measures to try to revive the ailing property sector.

    Hong Kong’s Hang Seng Index was barely changed at 25,835.57, while the Shanghai Composite index lost 0.4% to 3,931.05 after China’s central bank kept its one- and five-year loan prime rates unchanged at 3% and 3.5%, respectively.

    Taiwan’s Taiex closed 3.2% higher while India’s BSE Sensex added nearly 0.7%.

    Australia’s S&P/ASX 200 gained 1.2% to 8,552.70, also led by gains for technology stocks.

    In energy markets, benchmark U.S. crude oil gained 59 cents, or 1%, to $59.61 per barrel. Brent crude, the international standard, rose 62 cents to $64.13 per barrel.

    The U.S. dollar climbed to 157.66 Japanese yen from 157.06 yen. It has been trading at nearly the highest level this year on expectations that the government will delay efforts to rein in Japan’s national debt as Prime Minister Sanae Takaichi raises spending to help spur the economy.

    The euro fell to $1.1515 from $1.1538.

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  • U.S. employers added surprisingly solid 119,000 jobs in September, government says in delayed report

    WASHINGTON — U.S. employers added a surprisingly solid 119,000 jobs in September, the government said, issuing a key economic report that had been delayed for seven weeks by the federal government shutdown.

    The unemployment rate rose to 4.4% in September, highest since October 2021 and up from 4.3% in August, the Labor Department said Thursday. The unemployment rate rose partly because 470,000 people entered the labor market — either working or looking for work — in September and not all of them found jobs right away.

    The increase in payrolls was more than double the 50,000 economists had forecast. But Labor Department revisions showed that the economy lost 4,000 jobs in August instead of gaining 22,000 as originally reported. Altogether, revisions shaved 33,000 jobs off July and August payrolls.

    Healthcare and social assistance firms added more than 57,000 jobs in September, construction companies 19,000 and retailers almost 14,000. But factories shed 6,000 jobs and the federal government lost 3,000.

    Average hourly wages rose just 0.2% from August and 3.8% from a year earlier, edging closer to the 3.5% year-over-year increase that the Federal Reserve’s inflation fighters like to see.

    During the 43-day U.S. government shutdown, investors, businesses, policymakers and the Federal Reserve were groping in the dark for clues about the health of the American job market because federal workers had been furloughed and couldn’t collect the data.

    The report comes at a time of considerable uncertainty about the economy. The job market has been strained by the lingering effects of high interest rates and uncertainty around Trump’s erratic campaign to slap taxes on imports from almost every country on earth. But economic growth at midyear was resilient.

    Fed policymakers are divided over whether to cut interest rates for the third time this year when they meet next month.

    Economists expected to see a continuation of what was happening in the spring and summer: weak hiring but few layoffs, an awkward pairing that means Americans who have work mostly enjoy job security – but those who don’t often struggle to find employment.

    The job market has been strained this year by the lingering effects of high interest rates engineered to fight a 2021-2022 spike in inflation and uncertainty around Trump’s campaign to slap taxes on imports from almost every country on earth and on specific products — from copper to foreign films.

    Labor Department revisions in September showed that the economy created 911,000 fewer jobs than originally reported in the year that ended in March. That meant that employers added an average of just 71,000 new jobs a month over that period, not the 147,000 first reported.

    Since March, job creation has slowed even more — to an average 53,000 a month. During the 2021-2023 hiring boom that followed COVID-19 lockdowns, by contrast, the economy was creating 400,000 jobs a month.

    President Donald Trump’s crackdown on illegal immigration is expected to reduce the number of people looking for work, which means that the economy can create fewer jobs without sending the unemployment rate higher.

    With September numbers out, businesses, investors, policymakers and the Fed will have to wait awhile to get another good look at the numbers behind the American labor market.

    The Labor Department said Wednesday that it won’t won’t release a full jobs report for October because it couldn’t calculate the unemployment rate during the government shutdown.

    Instead, it will release some of the October jobs data — including the number of jobs that employers created last month — along with the full November jobs report on Dec. 16, a couple of weeks late.

    That puts an even more intense focus on September jobs numbers released Thursday. They are the last full measurement of hiring and unemployment that Fed policymakers will see before they meet Dec. 9-10 to decide whether to cut their benchmark interest rate for the third time this year.

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    AP Economics Writer Christopher Rugaber contributed to this report.

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  • Japan’s economy contracts as exports get hit by US tariffs

    TOKYO (AP) — Japan’s economy sank at an annualized rate of 1.8% in the July-September period, government data showed Monday, as President Donald Trump’s tariffs sent the nation’s exports spiraling.

    On a quarter-by-quarter basis, Japan’s gross domestic product, or GDP, or the sum value of a nation’s goods and services, slipped 0.4%, in the first contraction in six quarters, the Cabinet Office said.

    The annualized rate shows what the economy would have done if the same rate were to continue for a year. The fall was still smaller than the 0.6% drop the market had expected.

    A big decline during the quarter came in exports, which were 1.2% down from the previous quarter.

    Some businesses had sped up exports, when they could, to beat the tariffs kicking in, inflating some of the earlier data for exports.

    On an annualized basis, exports dropped 4.5% in the three months through September.

    Imports for the third quarter slipped 0.1%. Private consumption edged up 0.1% during the quarter.

    Tariffs are a major blow to Japan’s export-reliant economy, led by powerful automakers like Toyota Motor Corp., although such manufacturers have over the years moved production abroad to avert the blunt of tariffs.

    The U.S. now slaps a 15% tariff on nearly all Japanese imports. Earlier the tariffs were 25%.

    Japan also faced political uncertainty recently, until Sanae Takaichi became prime minister in October.

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    Yuri Kageyama is on Threads: https://www.threads.com/@yurikageyama

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  • Japan’s economy contracts as exports get hit by US tariffs

    TOKYO — Japan’s economy sank at an annualized rate of 1.8% in the July-September period, government data showed Monday, as President Donald Trump’s tariffs sent the nation’s exports spiraling.

    On a quarter-by-quarter basis, Japan’s gross domestic product, or GDP, or the sum value of a nation’s goods and services, slipped 0.4%, in the first contraction in six quarters, the Cabinet Office said.

    The annualized rate shows what the economy would have done if the same rate were to continue for a year. The fall was still smaller than the 0.6% drop the market had expected.

    A big decline during the quarter came in exports, which were 1.2% down from the previous quarter.

    Some businesses had sped up exports, when they could, to beat the tariffs kicking in, inflating some of the earlier data for exports.

    On an annualized basis, exports dropped 4.5% in the three months through September.

    Imports for the third quarter slipped 0.1%. Private consumption edged up 0.1% during the quarter.

    Tariffs are a major blow to Japan’s export-reliant economy, led by powerful automakers like Toyota Motor Corp., although such manufacturers have over the years moved production abroad to avert the blunt of tariffs.

    The U.S. now slaps a 15% tariff on nearly all Japanese imports. Earlier the tariffs were 25%.

    Japan also faced political uncertainty recently, until Sanae Takaichi became prime minister in October.

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    Yuri Kageyama is on Threads: https://www.threads.com/@yurikageyama

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  • ‘If voters feel like things aren’t working, they fire their politicians’: K-shaped economy math shows why Trump’s base feels betrayed | Fortune

    Days before President Donald Trump was sworn in for his second term, he acknowledged the high prices Americans were seeing at the gas pump and grocery store, pledging to bring them down.

    “It’s always hard to bring down prices when somebody else has screwed something up like [President Joe Biden] did,” Trump said in a news conference in early January. “We’re going to have prices down. I think you’re going to see some pretty drastic price reductions.”

    According to exit polls from the November 2024 election, Americans resonated with Trump’s messaging around prices. Exit polls indicated a higher proportion of voters without college degrees and those making less than $100,000 per year cast their ballot for Trump, cementing a rightward shift for the working class that has been trending in that direction for about a decade.

    But those patterns are shifting once more as emerging economic data shows that the K-shaped economy, coined on Twitter during the pandemic as a half-joking response to debates about whether the recovery would be “U” or “V” shaped, is real. One year into Trump 2.0, the notion is becoming reality of diverging fortunes for wealthy and poor Americans. It has tanked confidence in the economy—and the president who promised to solve the affordability crisis in the U.S. 

    While a wave of working-class voters flooded the Republican party ahead of the 2024 presidential election, that same group sent a loud message in the early November off-year elections, electing Democrats in every single race in which they were running. This included moderates Mikie Sherrill and Abigail Spanberger in New Jersey and Virginia, respectively, and firebrand democratic socialist mayors in New York and Virginia: Zohran Mamdani, and Katie Wilson. Their common theme: affordability.

    Economists have made it clear that something real is shifting: The rich are getting richer, and the poor are getting poorer. This week, Apollo chief economist Trosten Slok noted wage growth for the lowest-income Americans plummeted to its lowest in about a decade, while wage growth for the highest-income group surpassed all other income levels, citing data from the Federal Reserve Bank of Atlanta. Moody’s Analytics found last month that for the second quarter of 2025, the top 10% of households made up nearly 50% of all consumer spending. According to calculations by New York University economics professor Edward Nathan Wolff, the top 20% of America’s wealthiest households own nearly 93% of all stock. 

    Comments from executives in third-quarter earnings made clear that the Fortune 500 see a “bifurcated” economy. Delta seemed almost surprised at how its premium and business travel seats are due to eclipse the main cabin in 2026, a year ahead of schedule. While McDonald’s CEO talked about a “bifurcated consumer base,” with traffic growth strong among higher-income consumers. By and large, fast-food companies boomed in the quarter while higher-priced “slop bowl” chains such as Sweetgreen, Cava and Chipotle have been struggling to arrest a decline in same-store sales as consumers trade down.

    The housing market, only in recent memory a booming segment of the economy where many locked in huge equity gains at low mortgage rates, has become nearly frozen because of the “lock-in effect.” It’s simply unaffordable to sell your house and buy another one with mortgage rates above 6%. The first-time homebuyer age hit 40 years old in 2025, according to the National Association of Realtors, revealing that only people with some degree of wealth accumulated over many years of adulthood can afford to make purchases in the housing sector.

    “We’ve probably made housing unaffordable for a whole generation of Americans,” The Amherst Group CEO Sean Dobson said at the ResiDay real-estate conference in New York in November, telling Fortune on the sidelines that people have done what they’ve been told by getting an education and good jobs “and then they didn’t get what they were promised.”

    Trump’s role in the K-shaped economy

    Some of these indicators can be traced back to Trump, who himself rode affordability concerns to a 2024 election victory that once seemed implausible. Pantheon Macroeconomics analysts Samuel Tombs and Oliver Allen said in a September research note that suppressed income growth was a result of Trump’s tariff policies, which had forced businesses to slash wages in order to preserve margins that took a hit from the import taxes. In the wake of the November elections

    “Data show wage growth has slowed more in the trade and transportation sector, and to a lower level, than any other major sector since the end of last year. Fears workers would be able to secure larger wage increases in response to the tariffs look highly unlikely to be realized,” the analysts wrote.

    Peter Loge, a professor of media and public affairs at George Washington University, who served as senior advisor to the FDA commissioner under President Barack Obama, told Fortune that Trump’s economic priorities can be ascertained by whom he surrounds himself with.

    “President Trump has installed very wealthy people with very senior positions in government, which isn’t a bad thing, but it’s limiting,” Loge told Fortune, naming in particular Elon Musk, who served as head of the Department of Government Efficiency in the administration’s first months.

    Loge said the installation of these wealthy figures, as well as the courtship of powerful tech CEOs like Larry Ellison and Sam Altman, illustrates priorities to serve these individuals. The president signed a law in July for a roughly $4 trillion package of tax cuts, primarily benefiting companies and wealthy Americans. Those wealthy individuals, in turn, pour their money into the stock market, feeding the top half of the K, Loge noted.

    These factors are on top of the administration’s controversial decision to halt funding for SNAP benefits during the government shutdown and require millions of low-income Americans to reapply for the benefits in an effort to combat “fraud,” according to Agriculture Secretary Brooke Rollins.

    But to be sure, the K-shaped economy has existed for decades, economists say, and other economic factors have little to do with the president’s policies. The “low-hire, low-fire” labor market of 2025, for example—which has in particular battered lower-income, entry-level workers such as Gen Z—is more a result of businesses becoming more conservative in their hiring and firing practices following a pandemic-era labor shortage and a hiring binge that may have gone too far during the so-called “Great Resignation.”

    Changing sentiments

    Lower-income Americans are noting these changes, with consumer sentiment similarly diverging in a K-shape, something Peter Atwater, adjunct professor of economics at William & Mary, who popularized the term “K-shaped economy”, believes is being overlooked in the K-shaped conversation. Last month, the bottom third of income levels felt much less confident about the U.S. economy compared to the top third, according to data from the University of Michigan’s Survey of Consumers.

    “What we have today is a small group of individuals who feel intense certainty paired with relentless power control—and on the other, it is a sea of despair,” he told Fortune. “And that’s the piece that never gets talked about.”

    Atwater’s diagnosis rhymed with a Financial Times column from Robert Armstrong, of Unhedged, who wrote this week that America has always been unequal, but what makes this moment K-shaped is a loss of faith in future earnings among the lower-income cohort. “It could be,” he wrote, “that after five years of going nowhere, households in the bottom half of the wealth and income distributions have started to anticipate a bleaker future and are changing their spending habits accordingly.”

    Nose-diving confidence in the U.S. economy is reflected in the attitudes of Republicans and independents who voted for Trump. About 30% of Republicans believe Trump has fallen short of their expectations regarding the economy, according to a national NBC News poll this month. Two-thirds of independents blamed Trump for increasing inflation, per an ABC News/Washington Poll poll conducted in October. CNN polling data meanwhile shows Trump’s approval rating has reached its lowest level since he took office the second time.

    “People want to know that they can afford a medical bill if they get sick, their kids will have a better future than they do, or have a chance of a better future,” Loge told Fortune. “And if voters feel like things aren’t working, they fire their politicians in charge to hire new ones.”

    “Voters are pretty well saying, ‘We don’t think whatever the Republicans are doing is making stuff less expensive. We need life to be more affordable and less chaotic. It’s pretty unavoidably chaotic. Now we’re going to bring in new people to try a new thing,’” Loge said.

    Trump has noted the changing political attitudes following the election, floating a raft of proposals aimed at easing consumers’ pain, such as a 50-year mortgage and $2,000 rebate checks coming from tariff revenue. He said in a Fox News interview earlier this month his party has not done enough to assure Americans about the state of the economy.

    “We learned a lot,” Trump said. “Republicans don’t talk about it. They don’t talk about the word affordability.”

    UBS Wealth Management’s global chief economist, Paul Donovan, warned that “affordability” may prove to be an enduring, even intractable problem in both economic and political discourse. In his weekly blog, Donovan wrote that the concept is “subtly different” from both “inflation” and from the “cost-of-living crisis.” It’s an anger about the feeling “I can’t afford that,” he added, one that could be tricky to disprove.

    “People want things (generally ‘better’ things than they currently have) and are upset that they cannot afford those things,” Donovan wrote. “This may make affordability a more enduring problem than in the past.” He added that social media “fuels resentment” about affordability, as it presents “carefully curated, idealized lifestyles” that are just out of reach to anyone with a smartphone.

    Shifting political tides

    Loge hesitated to make predictions about what this changing sentiment means for upcoming elections, particularly if Trump’s tariffs are indeed successful, which could result in an outpouring of support for future Republican candidates. However, he suggested legacy or incumbent politicians from both major parties will have challenges getting elected. Atwater believes the desire—and need—for affordability transcends party lines.

    “We, particularly those on the left and the right and the establishment, woefully underappreciate how purple the bottom is,” he said. “The unified despair, the sheer desperation on both sides of the aisle, and that will continue to lead to an anti-establishment vote,” he said.

    Atwater suggested that so long as Americans perceive a broadening wealth gap, lower- and middle-income consumers will continue to harbor resentment for the ultra-wealthy that could simmer over. He cited a 2011 study from the New England Complex Systems Institute, which linked social unrest in North Africa and the Middle East during the Arab Spring of 2010 to rising food prices.

    “This is a crisis of confidence,” Atwater said. “Sadly, those who are in the best position to address it seem at best indifferent, and that does not go unnoticed by those at the bottom.”

    Nick Lichtenberg contributed reporting

    Sasha Rogelberg

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  • Trump is ramping up a new effort to convince a skeptical public he can fix affordability worries

    WASHINGTON (AP) — President Donald Trump is adjusting his messaging strategy to win over voters who are worried about the cost of living with plans to emphasize new tax breaks and show progress on fighting inflation.

    The messaging is centered around affordability, and the push comes after inflation emerged as a major vulnerability for Trump and Republicans in Tuesday’s elections, in which voters overwhelmingly said the economy was their biggest concern.

    Democrats took advantage of concerns about affordability to run up huge margins in the New Jersey and Virginia governor races, flipping what had been a strength for Trump in the 2024 presidential election into a vulnerability going into next year’s midterm elections.

    White House officials and others familiar with their thinking requested anonymity to speak for this article in order to not get ahead of the president’s actions. They stressed that affordability has always been a priority for Trump, but the president plans to talk about it more, as he did Thursday when he announced that Eli Lilly and Novo Nordisk would reduce the price of their anti-obesity drugs.

    “We are the ones that have done a great job on affordability, not the Democrats,” Trump said at an event in the Oval Office to announce the deal. “We just lost an election, they said, based on affordability. It’s a con job by the Democrats.”

    The White House is keeping up a steady drumbeat of posts on social media about prices and deals for Thanksgiving dinner staples at retailers such as Walmart, Lidl, Aldi and Target.

    “I don’t want to hear about the affordability, because right now, we’re much less,” Trump told reporters Thursday, arguing that things are much better for Americans with his party in charge.

    “The only problem is the Republicans don’t talk about it,” he said.

    The outlook for inflation is unclear

    As of now, the inflation outlook has worsened under Trump. Consumer prices in September increased at an annual rate of 3%, up from 2.3% in April, when the president first began to roll out substantial tariff hikes that suddenly burdened the economy with uncertainty. The AP Voter Poll showed the economy was the leading issue in Tuesday’s elections in New Jersey, Virginia, New York City and California.

    Grocery prices continue to climb, and recently, electricity bills have emerged as a new worry. At the same time, the pace of job gains has slowed, plunging 23% from the pace a year ago.

    The White House maintains a list of talking points about the economy, noting that the stock market has hit record highs multiple times and that the president is attracting foreign investment. Trump has emphasized that gasoline prices are coming down, and maintained that gasoline is averaging $2 a gallon, but AAA reported Thursday that the national average was $3.08, about two cents lower than a year ago.

    “Americans are paying less for essentials like gas and eggs, and today the Administration inked yet another drug pricing deal to deliver unprecedented health care savings for everyday Americans,” said White House spokesman Kush Desai.

    Trump gets briefed about the economy by Treasury Secretary Scott Bessent and other officials at least once a week and there are often daily discussions on tariffs, a senior White House official said, noting Trump is expected to do more domestic travel next year to make his case that he’s fixing affordability.

    But critics say it will be hard for Trump to turn around public perceptions on affordability.

    “He’s in real trouble and I think it’s bigger than just cost of living,” said Lindsay Owens, executive director of Groundwork Collaborative, a liberal economic advocacy group.

    Owens noted that Trump has “lost his strength” as voters are increasingly doubtful about Trump’s economic leadership compared to Democrats, adding that the president doesn’t have the time to turn around public perceptions of him as he continues to pursue broad tariffs.

    New hype about income tax cuts ahead of April

    There will be new policies rolled out on affordability, a person familiar with the White House thinking said, declining to comment on what those would be. Trump on Thursday indicated there will be more deals coming on drug prices. Two other White House officials said messaging would change — but not policy.

    A big part of the administration’s response on affordability will be educating people ahead of tax season about the role of Trump’s income tax cuts in any refunds they receive in April, the person familiar with planning said. Those cuts were part of the sprawling bill Republicans muscled through Congress in July.

    This individual stressed that the key challenge is bringing prices down while simultaneously having wages increase, so that people can feel and see any progress.

    There’s also a bet that the economy will be in a healthier place in six months. With Federal Reserve Chair Jerome Powell’s term ending in May, the White House anticipates the start of consistent cuts to the Fed’s benchmark interest rate. They expect inflation rates to cool and declines in the federal budget deficit to boost sentiment in the financial markets.

    But the U.S. economy seldom cooperates with a president’s intentions, a lesson learned most recently by Trump’s predecessor, Democrat Joe Biden, who saw his popularity slump after inflation spiked to a four-decade high in June 2022.

    The Trump administration maintains it’s simply working through an inflation challenge inherited from Biden, but new economic research indicates Trump has created his own inflation challenge through tariffs.

    Since April, Harvard University economist Alberto Cavallo and his colleagues, Northwestern University’s Paola Llamas and Universidad de San Andres’ Franco Vazquez, have been tracking the impact of the import taxes on consumer prices.

    In an October paper, the economists found that the inflation rate would have been drastically lower at 2.2%, had it not been for Trump’s tariffs.

    The administration maintains that tariffs have not contributed to inflation. They plan to make the case that the import taxes are helping the economy and dismiss criticisms of the import taxes as contributing to inflation as Democratic talking points.

    The fate of Trump’s country-by-country tariffs is currently being decided by the Supreme Court, where justices at a Wednesday hearing seemed dubious over the administration’s claims that tariffs were essentially regulations and could be levied by a president without congressional approval. Trump has maintained at times that foreign countries pay the tariffs and not U.S. citizens, a claim he backed away from slightly Thursday.

    “They might be paying something,” he said. “But when you take the overall impact, the Americans are gaining tremendously.”

    _____

    Associated Press writers Will Weissert and Michelle L. Price contributed to this report.

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  • ‘No hire’ job market leaves unemployed in limbo as threats to economy multiply

    WASHINGTON — When Carly Kaprive left a job in Kansas City and moved to Chicago a year ago, she figured it would take three to six months to find a new position. After all, the 32-year old project manager had never been unemployed for longer than three months.

    Instead, after 700 applications, she’s still looking, wrapped up in a frustrating and extended job hunt that is much more difficult than when she last looked for work just a couple of years ago. With uncertainty over interest rates, tariffs, immigration, and artificial intelligence roiling much of the economy, some companies she’s interviewed with have abruptly decided not to fill the job at all.

    “I have definitely had mid-interview roles be eliminated entirely, that they are not going to move forward with even hiring anybody,” she said.

    Kaprive is caught in a historical anomaly: The unemployment rate is low and the economy is still growing, but those out of work face the slowest pace of hiring in more than a decade. Diane Swonk, chief economist at KPMG, calls it a “jobless boom.”

    While big corporate layoff announcements typically grab the most attention, it has been the unwillingness of many companies to add workers that has created a more painful job market than the low 4.3% unemployment rate would suggest. It is also more bifurcated: The “low hire, low fire” economy has meant fewer layoffs for those with jobs, while the unemployed struggle to find work.

    “It’s like an insider-outsider thing,” Guy Berger, head of research at the Burning Glass Institute said, “where outsiders that need jobs are struggling to get their foot in, even as insiders are insulated by what up until now is a low-layoff environment.”

    Several large companies have recently announced tens of thousands of job cuts in the past few weeks, including UPS, Target, and IBM, though Berger said it is too soon to tell whether they signal a turn for the worse in the economy. But a rise in job cuts would be particularly challenging with hiring already so low.

    For now, it’s harder than ever to get a clear read on the job market because the government shutdown has cut off the U.S. Department of Labor’s monthly employment reports. The October jobs report was scheduled for release Friday but has been delayed, like the September figures before it. The October report may be less comprehensive when it is released because not all the data may be collected.

    Before the shutdown, the Labor Department reported that the hiring rate — the number of people hired in a given month, as a percentage of those employed — fell to 3.2% in August, matching the lowest figure outside the pandemic since March 2013.

    Back then, the unemployment rate was a painful 7.5%, as the economy slowly recovered from the job losses from the 2008-2009 Great Recession. That is much higher than August’s 4.3%.

    Many of those out of work are skeptical of the current low rate. Brad Mislow, 54, has been mostly unemployed for the past three years after losing a job as an advertising executive in New York City. Now he is substitute teaching to make ends meet.

    “It is frustrating to hear that the unemployment rate is low, the economy is great,” he said. “I think there are people in this economy who are basically fighting every day and holding on to pieces of flotsam in the shark-filled waters or, they have no idea what it’s like.”

    With the government closed, financial markets are paying closer attention to private-sector data, but that is also mixed. On Thursday, the outplacement firm Challenger, Gray & Christmas unnerved investors with a report that announced job cuts surged 175% in October from a year ago.

    Yet on Wednesday, payroll processor ADP said that net hiring picked up in October as businesses added 42,000 jobs, after two months of declines. Still, the gain was modest. ADP’s figures are based on anonymous data from the 26 million workers at its client companies.

    Separately, Revelio Labs, a workplace analytics company, estimated Thursday that the economy shed 9,000 jobs in October. The Federal Reserve Bank of Chicago estimates that the unemployment rate ticked up to 4.4% last month.

    Even when the government was releasing data, economists and officials at the Federal Reserve weren’t sure how healthy the job market was or where it was headed next. A sharp drop in immigration and stepped-up deportations have helped keep the unemployment rate low simply by reducing the supply of workers. The economy doesn’t need to create as many jobs to keep the unemployment rate from rising.

    Jerome Powell, chair of the Federal Reserve, has called in a “curious balance” because both the supply of and demand for workers has fallen.

    Economists point to many reasons for the hiring slowdown, but most share a common thread: Greater uncertainty from tariffs, the potential impact of artificial intelligence, and now the government shutdown. While investment in data centers to power AI is booming, elevated interest rates have kept many other parts of the economy weak, such as manufacturing and housing.

    “The concentration of economic gains (in AI) has left the economy looking better on paper than it feels to most Americans,” Swonk said.

    Younger Americans have borne the brunt of the hiring slowdown, but many older workers have also struggled.

    Suzanne Elder, 65, is an operations executive with extensive experience in health care, and two years ago the Chicago resident also found work quickly — three months after she left a job, she had three offers. Now she’s been unemployed since April.

    She is worried that her age is a challenge, but isn’t letting it hold her back. “I got a job at 63, so I don’t see a reason to not get a job at 65,” she said.

    Like many job-hunters, she has been stunned by the impersonal responses from recruiters, often driven by hiring software. She received one email from a company that thanked her for speaking with them, though she never had an interview. Another company that never responded to her resume asked her to fill out a survey about their interaction.

    Weak hiring has meant unemployment spells are getting longer, according to government data. More than one-quarter of those out of work have been unemployed for more than six months or longer, a figure that rose sharply in July and August and is up from 21% a year ago.

    Swonk said that such increases are unusual outside recessions.

    A rising number of the unemployed have also given up on their job searches, according to research by the Federal Reserve Bank of Minneapolis. That also holds down the unemployment rate because people who stop looking aren’t counted as unemployed.

    But Kaprive is still sticking with it — she’s taken classes about Amazon’s web services platform to boost her technology skills.

    “We can’t be narrow-minded in what we’re willing to take,” she said.

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  • ‘No hire’ job market leaves unemployed in limbo as threats to economy multiply

    WASHINGTON — When Carly Kaprive left a job in Kansas City and moved to Chicago a year ago, she figured it would take three to six months to find a new position. After all, the 32-year old project manager had never been unemployed for longer than three months.

    Instead, after 700 applications, she’s still looking, wrapped up in a frustrating and extended job hunt that is much more difficult than when she last looked for work just a couple of years ago. With uncertainty over interest rates, tariffs, immigration, and artificial intelligence roiling much of the economy, some companies she’s interviewed with have abruptly decided not to fill the job at all.

    “I have definitely had mid-interview roles be eliminated entirely, that they are not going to move forward with even hiring anybody,” she said.

    Kaprive is caught in a historical anomaly: The unemployment rate is low and the economy is still growing, but those out of work face the slowest pace of hiring in more than a decade. Diane Swonk, chief economist at KPMG, calls it a “jobless boom.”

    While big corporate layoff announcements typically grab the most attention, it has been the unwillingness of many companies to add workers that has created a more painful job market than the low 4.3% unemployment rate would suggest. It is also more bifurcated: The “low hire, low fire” economy has meant fewer layoffs for those with jobs, while the unemployed struggle to find work.

    “It’s like an insider-outsider thing,” Guy Berger, head of research at the Burning Glass Institute said, “where outsiders that need jobs are struggling to get their foot in, even as insiders are insulated by what up until now is a low-layoff environment.”

    Several large companies have recently announced tens of thousands of job cuts in the past few weeks, including UPS, Target, and IBM, though Berger said it is too soon to tell whether they signal a turn for the worse in the economy. But a rise in job cuts would be particularly challenging with hiring already so low.

    For now, it’s harder than ever to get a clear read on the job market because the government shutdown has cut off the U.S. Department of Labor’s monthly employment reports. The October jobs report was scheduled for release Friday but has been delayed, like the September figures before it. The October report may be less comprehensive when it is released because not all the data may be collected.

    Before the shutdown, the Labor Department reported that the hiring rate — the number of people hired in a given month, as a percentage of those employed — fell to 3.2% in August, matching the lowest figure outside the pandemic since March 2013.

    Back then, the unemployment rate was a painful 7.5%, as the economy slowly recovered from the job losses from the 2008-2009 Great Recession. That is much higher than August’s 4.3%.

    Many of those out of work are skeptical of the current low rate. Brad Mislow, 54, has been mostly unemployed for the past three years after losing a job as an advertising executive in New York City. Now he is substitute teaching to make ends meet.

    “It is frustrating to hear that the unemployment rate is low, the economy is great,” he said. “I think there are people in this economy who are basically fighting every day and holding on to pieces of flotsam in the shark-filled waters or, they have no idea what it’s like.”

    With the government closed, financial markets are paying closer attention to private-sector data, but that is also mixed. On Thursday, the outplacement firm Challenger, Gray & Christmas unnerved investors with a report that announced job cuts surged 175% in October from a year ago.

    Yet on Wednesday, payroll processor ADP said that net hiring picked up in October as businesses added 42,000 jobs, after two months of declines. Still, the gain was modest. ADP’s figures are based on anonymous data from the 26 million workers at its client companies.

    Separately, Revelio Labs, a workplace analytics company, estimated Thursday that the economy shed 9,000 jobs in October. The Federal Reserve Bank of Chicago estimates that the unemployment rate ticked up to 4.4% last month.

    Even when the government was releasing data, economists and officials at the Federal Reserve weren’t sure how healthy the job market was or where it was headed next. A sharp drop in immigration and stepped-up deportations have helped keep the unemployment rate low simply by reducing the supply of workers. The economy doesn’t need to create as many jobs to keep the unemployment rate from rising.

    Jerome Powell, chair of the Federal Reserve, has called in a “curious balance” because both the supply of and demand for workers has fallen.

    Economists point to many reasons for the hiring slowdown, but most share a common thread: Greater uncertainty from tariffs, the potential impact of artificial intelligence, and now the government shutdown. While investment in data centers to power AI is booming, elevated interest rates have kept many other parts of the economy weak, such as manufacturing and housing.

    “The concentration of economic gains (in AI) has left the economy looking better on paper than it feels to most Americans,” Swonk said.

    Younger Americans have borne the brunt of the hiring slowdown, but many older workers have also struggled.

    Suzanne Elder, 65, is an operations executive with extensive experience in health care, and two years ago the Chicago resident also found work quickly — three months after she left a job, she had three offers. Now she’s been unemployed since April.

    She is worried that her age is a challenge, but isn’t letting it hold her back. “I got a job at 63, so I don’t see a reason to not get a job at 65,” she said.

    Like many job-hunters, she has been stunned by the impersonal responses from recruiters, often driven by hiring software. She received one email from a company that thanked her for speaking with them, though she never had an interview. Another company that never responded to her resume asked her to fill out a survey about their interaction.

    Weak hiring has meant unemployment spells are getting longer, according to government data. More than one-quarter of those out of work have been unemployed for more than six months or longer, a figure that rose sharply in July and August and is up from 21% a year ago.

    Swonk said that such increases are unusual outside recessions.

    A rising number of the unemployed have also given up on their job searches, according to research by the Federal Reserve Bank of Minneapolis. That also holds down the unemployment rate because people who stop looking aren’t counted as unemployed.

    But Kaprive is still sticking with it — she’s taken classes about Amazon’s web services platform to boost her technology skills.

    “We can’t be narrow-minded in what we’re willing to take,” she said.

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  • National Retail Federation predicts first $1 trillion holiday shopping season

    NEW YORK — American shoppers are expected to spend more during this holiday shopping season than last year despite economic uncertainty and rising prices.

    The 2025 forecast from the National Retail Federation on Thursday estimates that shoppers will collectively spend between $1.01 trillion and $1.02 trillion in November and December, an increase of 3.7% to 4.2% compared with last year.

    Retailers rung up $976 billion in holiday sales last year, the group said.

    “We’re seeing really positive behavior and engagement from consumers, ” NRF President and CEO Matthew Shay told reporters on a call Thursday. “In fairness, that’s been somewhat of a surprise.”

    But Shay said more Americans are growing selective and they’re focused on discounts. And while spending is expected to be up again, the growth of that spending may be in decline.

    That is still greater than the average increase of 3.6% between 2010 to 2019. Americans ramped up spending after that during the coronavirus pandemic. Holiday season sales rose 8.9% in 2020 and soared 12.5% in 2021, according to the NRF.

    The group’s holiday forecast is based on economic modeling using various key economic indicators including consumer spending, disposable personal income, employment, wages, inflation and previous monthly retail sales releases. NRF’s calculation excludes automobile dealers, gasoline stations and restaurants to focus on core retail.

    Holiday spending accounts for 19% of annual sales for the retail industry, though for some retailers the number is a lot higher, according to the NRF. And consumer spending in the U.S. is monitored closely because it drives about 70% of the nation’s gross domestic product.

    The forecast this year, however, arrives during the longest government shutdown in U.S. history. There has been no government data released on the jobs market or retail sales since the shutdown began 37 days ago.

    “Forecasting is increasingly challenging in this environment,” Shay acknowledged.

    The NRF forecast is in line with other estimates, however, which point to slowing growth.

    Mastercard SpendingPulse, which tracks spending across all payment methods including cash, predicts that holiday sales will be up 3.6% from Nov. 1 through Dec. 24. That compares with a 4.1% increase last year.

    Deloitte Services LP forecasts holiday retail sales to be up between 2.9% to 3.4% from Nov. 1 through Jan. 31, compared with last year’s 4.2%.

    Adobe expects U.S. online sales to hit $253.4 billion this holiday season, representing 5.3% growth. That’s smaller than last year’s 8.7% growth.

    Consumer spending in the U.S. has remained resilient even as consumer confidence has eroded.

    Mark Matthews, NRF’s chief economist and executive director of research, said consumer behavior is changing with a sharper focus on finding deals. And the frequency of family nights out at a restaurant is on the decline, NRF executives said.

    The timing of the government shutdown is “absolutely problematic,” Matthews said, noting that it’s led to a loss in private sector income, which erodes consumer demand.

    Spending should recover once the shutdown ends, Matthews said, yet there are broader issues of concern that will not be solved when the government shutdown ends.

    The gap between wealthy and lower-income households is widening, according to analysts.

    Based on spending from its credit card and bank customers, Bank of America found that spending growth among lower income households rose 0.6% in September compared with the same period last year. Among higher income brackets, spending rose at more than four times that speed, or 2.6%, in September. And wages are growing faster for higher income households.

    That is making it more difficult for lower income households to keep up when tariffs and other economic factors are pushing prices higher.

    In a separate report this week, Bank of America estimated that U.S. consumers are bearing 50% to 70% of the U.S. tariff costs, and it expects that load to grow.

    “We think there is overwhelming evidence that tariffs have pushed inflation higher for consumers,’’ Bank of America economists Stephen Juneau and Aditya Bhave wrote.

    At the same time, U.S. companies have announced tens of thousands of job cuts. Some companies have cited rising operational costs from new tariffs under the Trump administration, as well as shifting consumer spending, corporate restructuring, or increased spending on artificial intelligence.

    That has led retailers to pull back on the hiring of seasonal workers.

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  • Delayed inflation report expected to show US prices ticked up last month

    WASHINGTON — Friday’s inflation report is likely to show that consumer prices worsened in September for the second straight month as President Donald Trump’s tariffs have lifted the cost of some groceries and other goods.

    The report on the consumer price index is being issued more than a week late because of the government shutdown, now in its fourth week. The Trump administration recalled some Labor Department employees to produce the figures because they are used to set the annual cost-of-living adjustment for roughly 70 million Social Security recipients.

    Friday’s inflation report will be the first comprehensive economic data to be released in more than three weeks and will attract intense interest from Wall Street and officials at the Federal Reserve. Fed officials are cutting their short-term interest rate to buoy the economy and hiring, but they are taking some risk doing so because inflation is still above their 2% target.

    The issues of affordability and the cost of necessities are gaining in political importance. Concerns over the costs of rent and groceries have played a key role in the mayoral race in New York City. And Trump, who has acknowledged that the spike in grocery prices under President Joe Biden helped him win the 2024 election, has been considering importing Argentine beef to reduce record-high U.S. beef prices, angering U.S. cattle ranchers.

    The cost of ground beef has jumped to $6.32 a pound, a record, in part because of tariffs on imports from countries such as Brazil, which faces a 50% duty. Years of drought that have reduced cattle herds have also raised prices.

    Friday’s report is forecast to show that inflation rose 3.1% in September from a year earlier, according to a survey of economists by data provider FactSet. That would be up from 2.9% in August and the highest in 18 months. On a monthly basis, inflation is projected to be 0.4% in September, the same as in August.

    Excluding the volatile food and energy categories, core inflation in September was likely 3.1% for the third straight month. On a monthly basis, core prices likely rose 0.3%, economists project, also for the third straight month.

    Such figures are unlikely to deter the Fed from cutting its key rate by another quarter-point when it meets next week, to about 3.9%. It would be the second cut this year and is driven by Fed Chair Jerome Powell’s concerns that hiring is weakening and poses a threat to the economy.

    Even as inflation has fallen sharply from its peak of 9.1% more than three years ago, it remains a major concern for consumers. About half of all Americans say the cost of groceries is a “major” source of stress, according to an August poll by The Associated Press-NORC Center for Public Affairs Research.

    And the Conference Board, a business research group, finds that consumers are still referencing prices and inflation in responses to its monthly survey on consumer confidence.

    Still, inflation has not risen as much as many economists feared when Trump first announced a sweeping set of tariffs. Many importers built up inventories of goods before the duties took effect, while Trump reduced many import taxes, including as part of trade deals with China, the United Kingdom, and Vietnam.

    And many economists, as well as some Fed officials, expect that the tariffs will create a one-time lift to prices that will fade by early next year. At the same time, inflation excluding the tariffs is cooling, they argue: Rental price increases, for example, are declining on average nationwide.

    Yet Trump is imposing tariffs in an ongoing fashion that could raise prices in a more sustained fashion.

    For example, the Trump administration is investigating whether to slap 100% tariffs on imports from Nicaragua over alleged human rights violations. The prospect of such steep duties is a major headache for Dan Rattigan, the co-founder of premium chocolate maker French Broad, based in Asheville, N.C.

    “We’ve been shouldering some significant additional costs,” Rattigan said. The United States barely produces any cocoa, so his company imports it from Nicaragua, the Dominican Republic, and Uganda. The imports from Nicaragua were duty-free because the country had a trade agreement with the United States, but now faces an 18% import tax.

    Cocoa prices have more than doubled over the past two years because of poor weather and blights in West Africa, which produces more than 70% of the world’s cocoa. The tariffs are an additional hit on top of that. Rattigan is also paying more for almonds, hazelnuts, and chocolate-making equipment from Italy, which has also been hit with tariffs.

    French Broad raised its prices slightly earlier this year and doesn’t have any plans to do so again. But after the winter holidays, “all bets are off … in what is a very unpredictable business climate,” Rattigan said.

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  • Trump says the US has secured $17 trillion in new investments. The real number is likely much less

    WASHINGTON (AP) — The economic boom promised by President Donald Trump centers on a single number: $17 trillion.

    That’s the sum of new investments that Trump claims to have generated with his tariffs, income tax cuts and aggressive salesmanship of CEOs, financiers, tech titans, prime ministers, presidents and other rulers. The $17 trillion is supposed to fund new factories, new technologies, more jobs, higher incomes and faster economic growth.

    “Under eight months of Trump, we’ve already secured commitments of $17 trillion coming in,” the president said in a speech last month. “There’s never been any country that’s done anything like that.”

    But based on statements from various companies, foreign countries and the White House’s own website, that figure appears to be exaggerated, highly speculative and far higher than the actual sum. The White House website lists total investments at $8.8 trillion, though that figure appears to be padded with some investment commitments made during Joe Biden’s presidency.

    The White House didn’t lay out the math after multiple requests as to how Trump calculated $17 trillion in investment commitments. But the issue goes beyond Trump’s hyperbolic talk to his belief that the brute force of tariffs and shaming of companies can deliver economic results, a strategy that could go sideways for him politically if the tough talk fails to translate into more jobs and higher incomes.

    Just 37% of U.S. adults approve of Trump’s handling of the economy, according to a September poll by The Associated Press-NORC Center for Public Affairs. That’s down from a peak of 56% in early 2020 during Trump’s first term — a memory he relied upon when courting voters in last year’s election.

    Adam Posen, president of the Peterson Institute of International Economics, said the public commitments announced by Trump do represent a “meaningful increase” — but one that amounts to hundreds of billions of dollars, not trillions. Even then, that comes with long-term costs as countries might be less inclined to invest with the U.S. after being threatened to do so.

    “It is a national security mistake because you’re turning allies into colonies of a sort — you’re forcibly extracting from them things that they don’t see as entirely in their interest,” Posen said. “Twisting the arms of governments to then twist the arms of their own businesses is not going to get you the payoff you want.”

    Trump banking on foreign countries making good on promises

    The Trump administration is betting that tariffs are an effective tool to prod other countries and international companies to invest in the United States, a big stick that other administrations failed to wield. Trump’s pitch to voters is that he will play a role in directly managing the investment commitments made by foreign countries — and that the allocation of that money starting next year will revive what has been a flagging job market.

    “The difference between hypothetical investments and ground being broken on new factories and facilities is good leadership and sound policy,” said White House spokesman Kush Desai.

    The White House said that Japan will invest $1 trillion, largely at Trump’s direction. The European Union will commit $600 billion. The United Arab Emirates made commitments of $1.4 trillion over 10 years. Qatar pledged $1.2 trillion. Saudi Arabia intends to pony up $600 billion, India $500 billion and South Korea $450 billion, among others.

    The challenge is the precise terms of those investments have yet to be fully codified and released to the public, and some numbers are under dispute, potentially fuzzy math or, in the case of Qatar, more than five times the annual gross domestic product of the entire country. The White House maintains that Qatar is good for the money because it produces oil.

    South Korea already has misgivings about its investment commitment, which is $100 billion lower than what the White House claims, after immigration agents raided a Hyundai plant under construction in Georgia and arrested Korean citizens. There are also concerns that an investment that large without a better way to exchange currencies with the U.S. could hurt South Korea’s economy.

    “From what I’ve seen, these commitments are worth about as much as the paper they’re not written down on,” said Jared Bernstein, who was the chairman of the Council of Economic Advisers in the Biden White House.

    As for the $600 billion committed by European companies, that’s based on those businesses having “expressed interest” and having stated “intentions” to do so through 2029 rather than an overt concession, according to European Union documents.

    Still too soon to see any investment impact in overall economy

    So far, there has yet to be a notable boost in business investment as a percentage of U.S. gross domestic product. As a share of the overall economy, business investment during the first six months of Trump’s presidency has been consistently bouncing around 14%, just as it was before the pandemic.

    But economists also note that Trump is double-counting and relying on investments that were initially announced during the Biden administration or investments that were already likely to occur because of the artificial intelligence build out.

    For example, the White House lists a $16 billion investment by computer chipmaker Global Foundries. But of that sum, more than $13 billion was announced during the Biden administration and supported by $1.6 billion in grants by the 2022 CHIPS and Science Act, as well as other state and federal incentives.

    Similarly, the White House is banking on $200 billion being invested by the chipmaker Micron, but at least $120 billion of that was announced during the Biden era.

    ‘The tariffs played a big role’

    For their part, White House officials largely credit Trump’s tariffs — like those imposed on Oct. 1 on kitchen cabinets, large trucks and pharmaceutical drugs — for forcing companies to make investments in the U.S., saying that the risk of additional import taxes if countries and companies fail to deliver on their promises will ensure that the promised cash comes into the economy.

    On Tuesday, Pfizer CEO Albert Bourla endorsed this approach after his pharmaceutical drug company received a three-year grace period on tariffs and announced $70 billion in investments in the U.S.

    “The president was absolutely right,” Bourla said. “Tariffs is the most powerful tool to motivate behaviors.”

    “The tariffs played a big role,” Trump added.

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  • With the BLS Shuttered, You Might Get Jobs Data From Private Companies

    Employers have grappled with high levels of uncertainty for the last six months, as concerns about the effects of tariffs, mass deportations, and stalled job creation stoked confusion and doubt about the economy. Now, with the government shutdown closing the doors at the federal agency that supplies most employment and labor data, private businesses are increasingly seeking to fill that void by releasing statistical insights of their own.

    The Department of Labor’s data gathering Bureau of Labor Statistics (BLS) had been scheduled to release its monthly job report for September on October 3. It was prevented from doing so by the ongoing government shutdown, which began just two days earlier. That cancellation may have come as something of a relief to President Donald Trump and governing Republicans, since BLS publications have reflected increasingly anemic hiring by businesses since May. Those weak figures suggest companies have largely limited recruitment to only replacing departing employees. That in turn appears to reflect executives’ worries that economic growth may be slowing — and their wider doubts about Trump’s management of the economy.

    But contrasting indicators have only served to increase business leaders’ confusion about where exactly the economy is headed.

    Official data earlier this year that showed the GDP contracted by 0.6 percent in the first quarter of 2025 was followed by more recent statistics reflecting the econmy came booming back with 3.8 percent growth in Q3. Other positive indicators since have led some observers to forecast continuing expansion in the third quarter, despite continued weak job growth and rising inflation suggesting otherwise.

    Now, with federal agencies no longer publishing reports under the government shutdown, most economic analysis is mostly speculation — although BLS has reportedly called in a small group of people to prepare the next consumer price data release. In the meantime, several private business are stepping up to offer any data-driven insights they can glean about the economy.

    For example, this week private equity firm Carlyle published data suggesting the BLS report for September would have again contained more disappointing job numbers if it had been released on October 3 as planned.

    Using proprietary information from 277 of its portfolio companies employing a total of 730,000 people, Carlyle estimated just 17,000 new jobs were likely created by U.S. businesses last month. That figure is even less than the 22,000 new hires BLS counted in August — dragging the monthly average since May down to just 26,750 new positions.

    But the modest numbers Carlyle estimated for September were far better than those from payroll services company ADP, which has long issued a private sector report around the time the BLS releases its own statistics. It said U.S. employers eliminated a net 32,000 jobs last month, basing that estimate on data it collected from the 26 million employees of its customer companies.

    Somewhere in between those two analyses  was last week’s report from executive outplacement and coaching specialist Challenger, Grey, and Christmas. It said businesses laid off a little over 54,000 people in September, without calculating a net gain or loss.

    While its figures on headcount reductions last month were lower than the 85,000 in August, Challenger, Grey, and Christmas noted the total 946,426 job cuts in 2025 so far were the highest since 2020. At the same time, the firm said U.S. employers were hiring at well under half the rate this year than they did in 2024 — generally reinforcing the picture of flattening employment creation.

    Those weren’t the only ways private companies trying to generate data capable of making sense of the economy in the absence of official reports during the government shutdown.

    According to an article this week in the Washington Post, that private sector search for clues about economic activity is leading observers to scrutinize “paychecks, credit card expenditures, restaurant reservations, Broadway show bookings, and even Statue of Liberty visitor numbers.” They then dive into that data to analyze how people are working and spending, and how fast inflation is pushing up the prices they’re paying.

    Carlyle’s findings for September even included the estimate that the economy grew at a 2.7 percent annualized pace in September. And this week, Moody’s Analytics released a report analyzing data from U.S. states showing 22 of them were already in recession, or on the brink of it.

    “We’re suddenly opening up new spreadsheets, looking at data we don’t usually turn to,” Apollo Global Management chief economist Torsten Slok told the Post. “Some of these indicators are really on the fringe, so we’re having to do different translations: What does this data mean? What might it tell us about the economy?”

    Is all that frantic digging really necessary, especially with history showing government shutdowns are typically short — the longest having lasted only 35 days?  Perhaps, given the concerns of some observers about trusting data from BLS once it starts issuing reports again.

    On August 1, Trump fired then-BLS director Erika McEntarfer after the agency issued downward revisions that dramatically reduced jobs creation numbers from previous months. The result was enduring uncertainty of business leaders and economists about how the economy was faring immediately got worse. In response, Trump took to social media to claim the lower numbers were “phony,” and called them intentionally “RIGGED in order to make the Republicans, and ME, look bad.”

    He then nominated an activist conservative economist to take over the BLS, despite his pick’s controversial track record that included calling for the agency to stop issuing reports on job creation and other important economic indicators.

    Though that nominee later withdrew from consideration, economists’ concerns generated by McEntarfer’s firing persist. Those are based on fears of the BLS and other federal departments potentially being forced to issue only data that reflects positively on Trump’s economic stewardship.

    That worry about the future reliability of official statistics is likely a big reason why private companies have gotten active in finding and analyzing economic data of their own — and may continue doing so even after the government shutdown ends.

    Bruce Crumley

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  • Trump says US has secured $17T in new investments. The number is likely much less.

    WASHINGTON — WASHINGTON (AP) — The economic boom promised by President Donald Trump centers on a single number: $17 trillion.

    That’s the sum of new investments that Trump claims to have generated with his tariffs, income tax cuts and aggressive salesmanship of CEOs, financiers, tech titans, prime ministers, presidents and other rulers. The $17 trillion is supposed to fund new factories, new technologies, more jobs, higher incomes and faster economic growth.

    “Under eight months of Trump, we’ve already secured commitments of $17 trillion coming in,” the president said in a speech last month. “There’s never been any country that’s done anything like that.”

    But based on statements from various companies, foreign countries and the White House’s own website, that figure appears to be exaggerated, highly speculative and far higher than the actual sum. The White House website lists total investments at $8.8 trillion, though that figure appears to be padded with some investment commitments made during Joe Biden’s presidency.

    The White House didn’t lay out the math after multiple requests as to how Trump calculated $17 trillion in investment commitments. But the issue goes beyond Trump’s hyperbolic talk to his belief that the brute force of tariffs and shaming of companies can deliver economic results, a strategy that could go sideways for him politically if the tough talk fails to translate into more jobs and higher incomes.

    Just 37% of U.S. adults approve of Trump’s handling of the economy, according to a September poll by The Associated Press-NORC Center for Public Affairs. That’s down from a peak of 56% in early 2020 during Trump’s first term — a memory he relied upon when courting voters in last year’s election.

    Adam Posen, president of the Peterson Institute of International Economics, said the public commitments announced by Trump do represent a “meaningful increase” — but one that amounts to hundreds of billions of dollars, not trillions. Even then, that comes with long-term costs as countries might be less inclined to invest with the U.S. after being threatened to do so.

    “It is a national security mistake because you’re turning allies into colonies of a sort — you’re forcibly extracting from them things that they don’t see as entirely in their interest,” Posen said. “Twisting the arms of governments to then twist the arms of their own businesses is not going to get you the payoff you want.”

    The Trump administration is betting that tariffs are an effective tool to prod other countries and international companies to invest in the United States, a big stick that other administrations failed to wield. Trump’s pitch to voters is that he will play a role in directly managing the investment commitments made by foreign countries — and that the allocation of that money starting next year will revive what has been a flagging job market.

    “The difference between hypothetical investments and ground being broken on new factories and facilities is good leadership and sound policy,” said White House spokesman Kush Desai.

    The White House said that Japan will invest $1 trillion, largely at Trump’s direction. The European Union will commit $600 billion. The United Arab Emirates made commitments of $1.4 trillion over 10 years. Qatar pledged $1.2 trillion. Saudi Arabia intends to pony up $600 billion, India $500 billion and South Korea $450 billion, among others.

    The challenge is the precise terms of those investments have yet to be fully codified and released to the public, and some numbers are under dispute, potentially fuzzy math or, in the case of Qatar, more than five times the annual gross domestic product of the entire country. The White House maintains that Qatar is good for the money because it produces oil.

    South Korea already has misgivings about its investment commitment, which is $100 billion lower than what the White House claims, after immigration agents raided a Hyundai plant under construction in Georgia and arrested Korean citizens. There are also concerns that an investment that large without a better way to exchange currencies with the U.S. could hurt South Korea’s economy.

    “From what I’ve seen, these commitments are worth about as much as the paper they’re not written down on,” said Jared Bernstein, who was the chairman of the Council of Economic Advisers in the Biden White House.

    As for the $600 billion committed by European companies, that’s based on those businesses having “expressed interest” and having stated “intentions” to do so through 2029 rather than an overt concession, according to European Union documents.

    So far, there has yet to be a notable boost in business investment as a percentage of U.S. gross domestic product. As a share of the overall economy, business investment during the first six months of Trump’s presidency has been consistently bouncing around 14%, just as it was before the pandemic.

    But economists also note that Trump is double-counting and relying on investments that were initially announced during the Biden administration or investments that were already likely to occur because of the artificial intelligence build out.

    For example, the White House lists a $16 billion investment by computer chipmaker Global Foundries. But of that sum, more than $13 billion was announced during the Biden administration and supported by $1.6 billion in grants by the 2022 CHIPS and Science Act, as well as other state and federal incentives.

    Similarly, the White House is banking on $200 billion being invested by the chipmaker Micron, but at least $120 billion of that was announced during the Biden era.

    For their part, White House officials largely credit Trump’s tariffs — like those imposed on Oct. 1 on kitchen cabinets, large trucks and pharmaceutical drugs — for forcing companies to make investments in the U.S., saying that the risk of additional import taxes if countries and companies fail to deliver on their promises will ensure that the promised cash comes into the economy.

    On Tuesday, Pfizer CEO Albert Bourla endorsed this approach after his pharmaceutical drug company received a three-year grace period on tariffs and announced $70 billion in investments in the U.S.

    “The president was absolutely right,” Bourla said. “Tariffs is the most powerful tool to motivate behaviors.”

    “The tariffs played a big role,” Trump added.

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  • Lack of jobs data due to government shutdown muddies the outlook for hiring and the economy

    WASHINGTON — WASHINGTON (AP) — From Wall Street trading floors to the Federal Reserve to economists sipping coffee in their home offices, the first Friday morning of the month typically brings a quiet hush around 8:30 a.m. eastern as everyone awaits the Labor Department’s crucial monthly jobs report.

    But with the government shut down, no information was released Friday about hiring in September.

    It’s the first time since a government shutdown in 2013 that the jobs report has been delayed. During the 2018-2019 partial government closure, the Labor Department was one of several agencies that remained open because Congress had agreed to fund them. September’s jobs figures will be released eventually, once the shutdown ends.

    The interruption in the data has occurred at a particularly uncertain time, when policymakers at the Federal Reserve and Wall Street investors would need more data on the economy, rather than less. Hiring has ground nearly to a halt, threatening to drag down the broader economy. Yet at the same time, consumers — particularly higher-income earners — are still spending and some businesses are ramping up investments in data centers developing artificial intelligence models. Whether that is enough to revive hiring remains to be seen.

    For now, economists are turning to alternative measures of the job market provided by nonprofits and private-sector companies. Those measures mostly show a job market with little hiring, but not many layoffs, either. Those who have jobs appear to be mostly secure, while those looking for work are having a tougher time.

    Payroll processor ADP, for example, said Wednesday that its estimate showed the economy had lost a surprising 32,000 private-sector jobs last month. Companies in the construction, manufacturing, and financial services industries all cut jobs, ADP found. Restaurants and hotels, and professional services such as accounting and engineering, also shed workers.

    Businesses in health care, private education, and information technology were the only sectors to add workers, ADP said.

    “We’ve seen a significant decline in hiring momentum throughout the year,” said Nela Richardson, ADP’s chief economist. “This is consistent with a low hire — even a no-hire — and low fire economy.”

    The shutdown has also meant the government isn’t releasing the weekly count of how many Americans have filed for unemployment benefits, a proxy for layoffs, which is published each Thursday.

    But Goldman Sachs used data provided by most states to produce their own estimates of unemployment claims. In a report late Thursday, they calculated that weekly claims ticked up to 224,000, up from 218,000 the previous week. Those are historically low figures, which suggest companies are still holding onto most of their workers.

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  • Asian shares trade mostly higher after Wall Street snaps its 3-day losing streak

    Shares were mostly higher Monday in Asia after Wall Street broke its three-day losing streak, trimming its losses for last week.

    China factory data are due out on Tuesday and a quarterly business sentiment survey by the Bank of Japan comes on Wednesday.

    The next big event for Wall Street could be a looming shutdown of the U.S. government, with a deadline set for this week. But such political impasses have had limited impact on the market before.

    U.S. jobs data also will be in the spotlight.

    U.S. futures edged higher early Monday and oil prices fell.

    Tokyo’s Nikkei was the regional outlier, giving up 1% to 44,892.52.

    Chinese markets advanced, with the Hang Seng in Hong Kong adding 1.5% to 26,518.03, while the Shanghai Composite index gained 0.1% to 3,832.65.

    Australia’s S&P/ASX 200 rose 0.7% to 8,545.70, while the Kospi in South Korea surged 1.3% to 3,430.57.

    On Friday, U.S. stocks trimmed their losses for the week after a report showed that inflation is behaving roughly as economists expected, even if it’s still high.

    The S&P 500 rose 0.6% to 6,643.70. The Dow Jones Industrial Average gained 0.7% to 46,247.29, while the Nasdaq composite added 0.4% to 22,484.07. All three indexes pulled closer to the all-time highs they set at the start of the week.

    Stocks got some help from the report showing inflation in the United States accelerated to 2.7% last month from 2.6% in July, according to the measure of prices that the Federal Reserve likes to use. While that’s above the Fed’s 2% target, it was precisely what economists had forecast.

    That offered some hope that the Fed could continue cutting interest rates in order to give the economy a boost. Without such cuts, growing criticism that stock prices have become too expensive by rising too quickly would become even more powerful.

    The Fed just delivered its first rate cut of the year last week but is not promising more because they could worsen inflation.

    Another report said sentiment among U.S. consumers was weaker than economists expected. The survey from the University of Michigan said consumers are frustrated with high prices, but their expectations for inflation over the coming 12 months also ticked down to 4.7% from 4.8%.

    One factor threatening to push inflation higher, adding to consumer woes, is President Donald Trump’s tariffs, and he announced more late Thursday. They include taxes on imports of some pharmaceutical drugs, kitchen cabinets and bathroom vanities, upholstered furniture and heavy trucks starting on Oct. 1.

    Details were sparse about the coming tariffs, as is often the case with Trump’s pronouncements on his social media network. That left analysts unsure of their ultimate effects, and the announcement created ripples in the U.S. stock market instead of huge waves.

    Paccar, the company based in Bellevue, Washington, that’s behind the market-dominant Peterbilt and Kenworth truck brands, revved 5.2% higher, for example.

    Big U.S. pharmaceutical companies nudged higher. Eli Lilly rose 1.4%, and Pfizer added 0.7%.

    In other trading early Monday, U.S. benchmark crude oil lost 49 cents to $65.23 per barrel. Brent crude, the international standard, declined 42 cents to $68.80 per barrel.

    Reports that the OPEC plus oil producing nations might raise their production limits next month have added to worries over oversupply, analysts said.

    The U.S. dollar slipped to 148.93 Japanese yen from 149.51 yen. The euro rose to $1.1727 from $1.1703.

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  • Fed’s favored inflation gauge accelerates slightly in August

    WASHINGTON — The Federal Reserve’s favored inflation gauge accelerated slightly in August from a year earlier.

    The Commerce Department reported Friday that its personal consumption expenditures (PCE) price index was up 2.7% in August from a year earlier, a tick higher from a 2.6% year-over-year increase in July and most since February.

    Excluding volatile food and energy prices, so-called core PCE inflation showed a 2.9% increase in prices from August 2024, same as in July. The increases were what forecasters had expected.

    Inflation has come down since rising prices prompted the Fed to raise its benchmark interest rate 11 times in 2022 and 2023. But annual price gains remain stubbornly above the central bank’s 2% target.

    Last week, the Fed went ahead and reduced the rate for the first time this year, lowering borrowing costs to help a deteriorating U.S. job market. But it’s been cautious about cutting, waiting to see what impact President Donald Trump’s sweeping taxes on imports have on inflation and the broader economy.

    For months, Trump has relentlessly pushed the Fed to lower rates more aggressively, calling Fed Chair Jerome Powell “Too Late” and a “moron” and arguing that there is “no inflation.”

    Last month, Trump sought to fire Lisa Cook, a member of the Fed’s governing board, in an effort to gain greater control over the central bank. She has challenged her dismissal in court, and the Supreme Court will decide whether she can stay on the job while the case goes through the judicial system.

    The Fed tends to favor the PCE inflation gauge that the government issued Friday over the better-known consumer price index. The PCE index tries to account for changes in how people shop when inflation jumps. It can capture, for example, when consumers switch from pricier national brands to cheaper store brands.

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  • UK inflation remains nearly double target ahead of expected interest rate hold

    LONDON — Inflation in the U.K. held steady at 3.8% in the year to August, official figures showed Wednesday, a day before the Bank of England is widely expected to keep interest rates on hold.

    The Office for National Statistics found food and drink prices rose for the fifth month in a row, but airfares fell sharply after a big spike in July.

    Though inflation remains nearly double the Bank of England’s target rate of 2%, most economists had anticipated a modest increase in August.

    Stubbornly high inflation has been one of the reasons why the Labour government’s poll ratings have fallen sharply since it came to power in July 2024.

    Treasury chief Rachel Reeves will be hoping inflation starts to drop down towards target, as many forecasters predict, in the year to come as it will relieve some of the cost-of-living pressures that are hurting households and undermining the government’s support.

    “I know families are finding it tough and that for many the economy feels stuck,” she said after the figures were released. “That’s why I’m determined to bring costs down and support people who are facing higher bills.”

    Reeves’ economic plans will be in the spotlight over the coming weeks ahead of her annual budget on Nov. 26, where she is widely expected to increase taxes again to bolster revenues and simultaneously introduce policies to ease the cost-of-living pressures.

    Many critics blame Reeves personally for the increase inflation this year, saying her decision to increase taxes on businesses to plug a budget hole prompted firms to up prices.

    The inflation figures have cemented market expectations that the Bank of England will keep interest rates unchanged on Thursday.

    Since it started cutting borrowing rates in August 2024 after the unwinding of the previous spike in inflation in the wake of Russia’s invasion of Ukraine, the bank has done so in a gradual manner every three months. When it cut its main rate to 4% in August, it was largely expected there would be no further reduction at the September meeting.

    If the bank were to continue to cut interest rates in the manner it has been doing so, the next meeting in November would see a further reduction. However, economists remain split as to whether another cut is forthcoming since inflation has proven to be stickier than anticipated earlier this year, partly because of relatively high wage increases.

    “Several months of disappointing data has highlighted the U.K.’s unwanted position as an international outlier for ‘sticky’ inflation, with the highest headline inflation of any G-7 economy,” said James Smith, research director at the Resolution Foundation think tank.

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  • Wall Street edges back from its record heights

    NEW YORK — U.S. stocks edged back from their record heights on Tuesday as the countdown ticked toward what Wall Street expects will be the first cut of the year to interest rates by the Federal Reserve.

    The S&P 500 fell 0.1% from its latest all-time high. The Dow Jones Industrial Average dipped 125 points, or 0.3%, while the Nasdaq composite slipped 0.1% from its own record set the day before.

    Stocks have run to records on expectations that the Fed will announce the first of a series of cuts to rates on Wednesday in hopes of giving the economy a boost. The job market has slowed so much that traders believe Fed officials now see it as the bigger danger for the economy than the threat of higher inflation because of President Donald Trump’s tariffs.

    The Fed has been holding off on cuts to rates because inflation has remained above its 2% target, and easier interest rates could give it more fuel.

    A report on Tuesday said shoppers increased their spending at U.S. retailers by more last month than economists expected. A chunk of that could be due to shoppers having to pay higher prices for the same amount of stuff. But it could also indicate solid spending by U.S. households could continue to keep the economy out of a recession.

    The data did little to change traders’ expectations for a cut to interest rates on Wednesday, followed by more through the end of the year and into 2026.

    Such high expectations have sent stocks to records, but they can also create disappointment if unfulfilled. That’s why more attention will be on what Fed Chair Jerome Powell says about the possibility of upcoming cuts in his press conference following Wednesday’s decision than on the decision itself.

    Fed officials will also release their latest projections for where they see interest rates and the economy heading in upcoming years, which could provide another potential flashpoint.

    For now, global fund managers are tilting their portfolios toward stocks at the highest level in seven months, according to the latest survey by Bank of America. That’s even though a record 58% of them are also saying that stocks look too expensive at the moment.

    On Wall Street, Dave & Buster’s fell 16.7% after the entertainment chain reported a weaker profit for the latest quarter than analysts expected.

    New York Times Co. fell 1.6% after Trump filed a $15 billion defamation lawsuit against the newspaper and four of its journalists on Monday. The lawsuit points to several articles and a book written by Times journalists and published in the lead up to the 2024 election as “part of a decades-long pattern by the New York Times of intentional and malicious defamation against President Trump.”

    On the winning end of Wall Street was Steel Dynamics, which climbed 6.1% after it said it’s seeing improved earnings across its three business units. It credited strong demand for steel from the non-residential construction and auto industries, among other things.

    Chipotle Mexican Grill added 1.9% after its board said the company could buy back an additional $500 million of its stock. Such a move can send cash directly to investors and boost per-share results.

    Oracle rose 1.5% on speculation that it could be part of a deal that would keep TikTok operating in the United States.

    All told, the S&P 500 fell 8.52 points to 6,606.76. The Dow Jones Industrial Average dropped 125.55 to 45,757.90, and the Nasdaq composite sank 14.79 to 22,333.96.

    In stock markets abroad, indexes fell in Europe following a mixed showing in Asia.

    Japan’s Nikkei 225 added 0.3% to finish at another record. The rally comes despite political uncertainty after Japanese Prime Minister Shigeru Ishiba said he is stepping down. An election within the ruling Liberal Democratic Party to pick a new leader is expected Oct. 4.

    In the bond market, the yield on the 10-year Treasury eased to 4.03% from 4.05% late Monday.

    ___

    AP Business Writers Yuri Kageyama and Matt Ott contributed.

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