ReportWire

Tag: Economic policy

  • China’s economy slows to 4.8% annual growth

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    HONG KONG — HONG KONG (AP) — China’s economy expanded at the slowest annual pace in a year in July- September, growing 4.8%, weighed down by trade tensions with the United States and slack domestic demand.

    The July-September data was the weakest pace of growth since the third quarter of 2024, and compares with a 5.2% pace of growth in the previous quarter, the government said in a report Monday.

    In January-September, the world’s second largest economy grew at a 5.2% annual pace. Despite U.S. President Donald Trump’s higher tariffs on imports from China, the country’s exports have remained relatively strong as companies shifted their sales to other world markets.

    Tensions between Beijing and Washington remain elevated, and it’s unclear if Trump and Chinese leader Xi Jinping will go ahead with a proposed meeting during a regional summit at the end of this month.

    Xi and other ruling Communist Party members are convening one of China’s most important political meetings for the year on Monday, where they will map out economic and social policy goals for the country for the next five years.

    The economy slowed in the last quarter as the authorities moved to curb fierce price wars in sectors such as the auto industry that resulted from overcapacity.

    China is also facing challenges including a prolonged property sector downturn which has been affecting consumption and demand.

    Ratings agency S&P estimates nationwide new home sales will fall by 8% in 2025 from the year before and by 6% to 7% in 2026.

    The World Bank expects China’s economy to grow at a 4.8% annual rate this year. The government’s official growth target is around 5%.

    China’s stronger economic growth in the first half of this year has given it “some buffer” to achieve the growth target, said Lynn Song, chief economist for Greater China at ING Bank.

    However, spending during China’s eight-day Golden Week national holiday in October was “mildly disappointing,” reflecting sluggish consumer confidence and demand, Morningstar analysts said in a note this month.

    There’s room for the government to do more, Song said.

    “(We) are looking to see if there will be further measures to support consumption and the property market, as the impact from previous policies begins to weaken,” Song said.

    Economists are also expecting a rate cut by China’s central bank by the end of the year, which could encourage more spending and investment.

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  • Regional banks’ bad loans spark concerns on Wall Street

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    NEW YORK — NEW YORK (AP) —

    Wall Street is concerned about the health of the nation’s regional banks, after a few of them wrote off bad loans to commercial customers in the last two weeks and caused investors to wonder if there might be more bad news to come.

    Zions Bank, Western Alliance Bank and the investment bank Jefferies surprised investors by disclosing various bad investments on their books, sending their stocks falling sharply this week. JPMorgan Chase CEO Jamie Dimon added to the unease when he warned there might be more problems to come for banks with potentially bad loans.

    “When you see one cockroach, there are probably more,” Dimon told investors and reporters on Tuesday, when JPMorgan reported its results.

    The KBW Bank Index, a basket of banks tracked by investors, is down 7% this month.

    There were other signs of distress. Data from the Federal Reserve shows that banks tapped the central bank’s overnight “repo” facilities for the second night in a row, an action banks have not needed to take since the Covid-19 pandemic. This facility allows banks to convert highly liquid securities like mortgage bonds and treasuries into cash to help fund their short-term cash shortfalls.

    Zions Bancorp shares sank Thursday after the bank wrote off $50 million in commercial and industrial loans, while Western Alliance fell after the bank alleged it had been defrauded by an entity known as Cantor Group V LLC. This came on top of news from Jefferies, which told investors it was holding $5.9 billion in debt of bankrupt auto parts company First Brands. All three stocks recovered a bit by midday Friday.

    Even larger banks were not immune. Several Wall Street banks disclosed losses in the bankruptcy of Tricolor, a subprime auto dealership company that collapsed last month. Fifth Third Bank, a larger regional bank, recorded a $178 million loss from Tricolor’s bankruptcy.

    While the big Wall Street banks get most of the media and investor attention, regional banks are a major part of the economy, lending to small-to-medium sized businesses and acting as major lenders for commercial real estate developers. There are more than 120 banks with between $10 billion and $200 billion in assets, according to the FDIC.

    While big, these banks can run into trouble because their businesses are not as diverse as the Wall Street money center banks. They’re often more exposed to real estate and industrial loans, and don’t have significant businesses in credit cards and payment processing that can be revenue generators when lending goes south.

    The last banking flare up, in 2023, also involved mid-sized and regional banks that were overly exposed to low-interest loans and commercial real estate. The crisis caused Silicon Valley Bank to fail, followed by Signature Bank, and led to the eventual sale of First Republic Bank to JPMorgan Chase in a fire sale. Other banks like Zions and Western Alliance ended up seeing their stocks plummet during that time period.

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  • Slowdown in US hiring suggests economy still needs rate cuts, Fed’s Powell says

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    WASHINGTON (AP) — A sharp slowdown in hiring poses a growing risk to the U.S. economy, Federal Reserve Chair Jerome Powell said Tuesday, a sign that the Fed will likely cut its key interest rate twice more this year.

    Powell said in a speech in Philadelphia that despite the federal government shutdown cutting off official economic data, “the outlook for employment and inflation does not appear to have changed much since our September meeting,” when the Fed reduced its key rate for the first time this year.

    Fed officials at that meeting also forecast that the central bank would reduce its rate twice more this year and once in 2026. Lower rates from the Fed could reduce borrowing costs for mortgages, car loans, and business loans. Powell spoke before a meeting of the National Association of Business Economics.

    Powell reiterated a message he first delivered after the September meeting, when he signaled that the Fed is slightly more worried about the job market than its other congressional mandate, which is to keep prices stable. Tariffs have lifted the Fed’s preferred measure of inflation to 2.9%, he said, but outside the duties there aren’t “broader inflationary pressures” that will keep prices high.

    “Rising downside risks to employment have shifted our assessment of the balance of risks,” he said.

    Economists said Powell’s remarks solidified expectations for further rate cuts, starting at its next meeting Oct. 28-29.

    “While there was little doubt the (Fed) was angled to cut rates at its next meeting, today’s remarks were strong confirmation of that expectation,” Michael Feroli, chief U.S. economist at JPMorgan Chase, said in a note to clients.

    Powell also said that the central bank may soon stop shrinking its roughly $6.6 trillion balance sheet. The Fed has been allowing roughly $40 billion of Treasuries and mortgage-backed securities to mature each month without replacing them.

    “We may approach that point in coming months,” Powell said.

    The shift could slightly lower borrowing costs over time. Economists at BMO Capital Markets estimated that the yields on Treasury securities ticked down slightly after Powell’s remarks.

    Separately, Powell spent most of his speech defending the Fed’s practice of buying longer-term Treasury bonds and mortgage-backed securities in 2020 and 2021, which were intended to lower longer-term interest rates and support the economy during the pandemic.

    Yet those purchases have come under a torrent of criticism from Treasury Secretary Scott Bessent, as well as some of the candidates floated by the Trump administration to replace Powell when his term as Chair ends next May.

    Bessent said in an extended critique published earlier this year that the huge purchases of bonds during the pandemic worsened inequality by boosting the stock market, without providing noticeable benefits to the economy.

    Other critics have long argued that the Fed kept implementing the purchases for too long, keeping interest rates low even as inflation began to spike in late 2021. The Fed beginning in 2021 stopped the purchases and then sharply boosted borrowing costs to combat inflation.

    “With the clarity of hindsight, we could have—and perhaps should have—stopped asset purchases sooner,” Powell said. “Our real-time decisions were intended to serve as insurance against downside risk.”

    Yet Powell said that moving earlier would not have prevented the COVID-era inflation spike: “Stopping sooner could have made some difference, but not likely enough to fundamentally alter the trajectory of the economy.”

    Powell also said the purchases were intended to avoid a breakdown in the market for Treasury securities, which could have sent interest rates much higher.

    The Fed chair also addressed a move by a bipartisan group of senators to stop the central bank from paying interest on the cash reserves banks park at the Fed. A measure to prevent the Fed from doing so was defeated in the Senate last week by the lopsided vote of 83-14.

    Still, it garnered support from both parties, including Republican senators Rand Paul from Kentucky and Ted Cruz from Texas, as well as Massachusetts Democratic Sen. Elizabeth Warren.

    Powell said that without the ability to pay interest on reserves, the Fed “would lose control over rates” and wouldn’t be able to carry out its mission. The Fed lifts the short-term interest rate it controls when it wants to cool borrowing and spending and slow inflation, while it cuts the rate to encourage borrowing, growth, and hiring.

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

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    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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  • Political crisis in France eases for now as prime minister survives no-confidence vote

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    PARIS — PARIS (AP) — France’s latest political crisis eased — for now — when Prime Minister Sébastien Lecornu survived two consecutive no-confidence votes on Thursday, averting another government collapse and giving President Emmanuel Macron a respite before an even tougher fight over the national budget.

    The immediate danger may have receded but the core problem is still very much center stage. The eurozone’s second-largest economy is still run by a minority government in a splintered parliament where no single bloc or party has a majority.

    Every major law now turns on last-minute deals, and the next test is a spending plan that must pass before the end of the year.

    On Thursday, lawmakers in the 577-seat National Assembly rejected a no-confidence motion filed by the hard-left France Unbowed party. The 271 votes were 18 short of the 289 needed to bring down the government.

    A second motion from the far-right National Rally also failed.

    Had Lecornu lost, Macron would have faced only unpalatable options: call new legislative elections, try to find yet another prime minister — France’s fifth in barely a year — or perhaps even resign himself, which he has ruled out.

    Macron’s decision to dissolve the National Assembly in June 2024 backfired on him, triggering legislative elections that stacked the powerful lower house with opponents of the French leader but producing no outright winner.

    Since then, Macron’s minority governments have sought to barter support bill by bill and have fallen in quick succession.

    That collides with the architecture of the Fifth Republic, founded in 1958 under Charles de Gaulle.

    The system was built for a strong presidency and stable parliamentary majorities, not for coalition horse-trading or a splintered house.

    With no single bloc near an absolute majority of 289 seats, the machinery is grinding against its design, turning big votes into cliffhangers and raising existential questions about the governance of France.

    For French voters and observers, it’s jarring. France, once a model of eurozone stability, is now stumbling from crisis to crisis, testing the patience of markets and allies.

    To peel away opposition votes, Lecornu offered to slow the rollout of Macron’s flagship 2023 pension law, which raises the retirement age from 62 to 64.

    The proposed slowdown could push the law back roughly two years, easing near-term pressure on people nearing retirement while leaving the end goal intact.

    The government puts the short-term cost of the delay at 400 million euros ($430 million) for next year and 1.8 billion euros ($1.9 billion) for 2027, saying it will find offsets.

    For many in France, pensions touch a nerve — the 2023 law triggered massive protests and strikes that left heaps of trash rotting on Paris streets.

    The government then used Article 49.3 — a special constitutional power that lets a prime minister push a law through without a parliamentary vote. But the backlash only hardened.

    With Thursday’s reprieve, Macron’s government has some breathing room. It shifts the battle to the 2026 budget, with a debate opening on Oct. 24.

    Lecornu has vowed not to use Article 49.3 to pass a budget without a vote — which means no shortcuts: every line must win support in a fractured chamber.

    The government and its allies hold fewer than 200 seats. For a majority, they need opposition support.

    That math makes the Socialists, with 69 lawmakers, and the conservative Republicans, with 50, both potential swing blocs. But their backing isn’t a given, even though they both lent support to Lecornu against Thursday’s no-confidence motions.

    The Socialists say the budget draft still lacks “social and fiscal justice.”

    France’s deficit sits near 5.4% of GDP. The plan is to bring it to 4.7% next year with spending restraint and targeted tax changes while trying to protect growth.

    The left is preparing a renewed push for a wealth-side measure aimed at ultra-high fortunes.

    The government rejects that path and prefers narrower, lower-yield steps, including measures on holding companies.

    Analysts predict hard bargaining over benefit freezes, higher medical deductibles and savings demanded of local authorities — each concession risking votes on one flank even as it gains them on another.

    The clock is ticking: Against a year’s end budget deadline, the government must show how it will pay for the pension slowdown and negotiate, in parallel, with the Socialists and conservatives over taxes and spending.

    For the president, success would mean proving that France can pass a credible budget and start to rein in its deficit without extraordinary procedural force.

    If the talks crack — on pensions, taxes or spending — the risks of Lecornu’s government collapsing return, and at the end of the year, France could find itself back where it started: deadlocked.

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  • Average long-term US mortgage rate slips to 6.27%, nearing a low for 2025

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    The average rate on a 30-year U.S. mortgage declined again this week, easing to just above its lowest level this year.

    The average long-term mortgage rate slipped to 6.27% from 6.3% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.44%.

    The latest dip brings the average rate to just above 6.26%, where it was four weeks ago after a string of declines brought down home loan borrowing costs to their lowest level since early October 2024.

    Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also eased this week. The average rate dropped to 5.52% from 5.53% last week. A year ago, it was 5.63%, Freddie Mac said.

    Mortgage rates are influenced by several factors, from the Federal Reserve’s interest rate policy decisions to bond market investors’ expectations for the economy and inflation. They generally follow the trajectory of the 10-year Treasury yield, which lenders use as a guide to pricing home loans.

    The 10-year yield was at 4.02% at midday Thursday, down from around 4.14% the same time last week.

    Mortgage rates started declining in July in the lead-up to the Federal Reserve’s decision last month to cut its main interest rate for the first time in a year amid growing concern over the U.S. job market.

    At their September policy meeting, Fed officials forecast that the central bank would reduce its rate twice more this year and once in 2026. Still, the Fed could change course if inflation jumps amid the Trump administration’s expanding use of tariffs and the recent trade war escalation with China.

    Even if the Fed opts to cut its short-term rate further that doesn’t necessarily mean mortgage rates will keep declining. Last fall, after the Fed cut its rate for the first time in more than four years, mortgage rates marched higher, eventually reaching just above 7% in January this year.

    The average rate on a 30-year mortgage has remained above 6% since September 2022, the year mortgage rates began climbing from historic lows. The housing market has been in a slump ever since.

    Sales of previously occupied U.S. homes sank last year to their lowest level in nearly 30 years. So far this year, sales are running below where they were at this time in 2024.

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  • Uncertainty over economy, tariffs forces retailers to be cautious on holiday hiring

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    NEW YORK — NEW YORK (AP) — Uncertainty over the economy and tariffs is forcing retailers to pull back or delay plans to hire seasonal workers who pack orders at distribution centers, serve shoppers at stores and build holiday displays during the most important selling season of the year.

    American Christmas LLC, which creates elaborate holiday installations for commercial properties such as New York’s Rockefeller Center and Radio City Music Hall, plans to hire 220 temporary workers and is ramping up recruitment nearly two months later than usual, CEO Dan Casterella said. Last year, the company took on 300 people during its busy period.

    The main reason? The company wants to offset its tariff bill, which Casterella expects to be as big as $1.5 million this year, more than double last year’s $600,000.

    “The issue is if you overstaff and then you underperform, it’s too late,” Casterella said. ”I think everyone’s more mindful now than ever. ”

    Job placement firm Challenger, Gray & Christmas forecasts hiring for the last three months of the year will likely fall under 500,000 positions. That’s fewer than last year’s 543,000 level and also marks the smallest seasonal gain in 16 years when retailers hired 495,800 temporary workers, the firm said. The average seasonal gain since 2005 has been 653,363 workers, the firm said.

    Among other companies cutting holiday payrolls: Radial, which powers deliveries for roughly 120 brands like Lands’ End and Cole Haan and operates 20 fulfillment sites. It plans to hire 6,500 workers, fewer than last year’s 7,000, and is waiting to the last minute to ramp up hiring for some of its clients, chief human resources officer Sabrina Wnorowski, said.

    Bath & Body Works, based in Reynoldsburg, Ohio, said it plans to hire 32,000 workers, lower than the 32,700 a year ago.

    Among the bright spots: Online behemoth Amazon Inc. said Monday it intends to hire 250,000 full-, part-time and seasonal workers for the crucial shopping period, the same level as a year ago.

    “We saw real strong signals that there’s been a cooling in the labor market, even beyond what our expectations were in the first nine months of the year,” Challenger’s senior vice president Andy Challenger said. “We are having lots of regular conversations with companies about pending layoffs and changes they’re making to their workforce.”

    In addition to overall economic uncertainty, Challenger noted companies are using artificial intelligence bots to replace some workers, particularly those working in call centers. And he’s also seeing companies hiring workers closer to when they need them.

    Meanwhile, the list of companies staying mum about their specific holiday hiring goals keeps growing. Target Corp., UPS and Macy’s are declining to offer figures, a departure from the past. UPS had hired 125,000 seasonal hires last year, while Target announced last year it planned to hire 100,000 workers. Macy’s last year said it would hire 31,500 seasonal workers.

    Retailers’ hiring plans mark the first clues to what’s in store for the U.S. holiday shopping season and come as the U.S. job market has lost momentum this year, partly because Trump’s trade wars have created uncertainty that’s paralyzing managers trying to make hiring decisions.

    The Labor Department reported in early September that U.S. employers — companies, government agencies and nonprofits — added just 22,000 jobs in August, down from 79,000 in July and well below the 80,000 that economists had expected.

    The government shutdown, which started Oct. 1 and has delayed the release of economic reports, could worsen the job picture.

    In an attempt to exert more pressure on Democratic lawmakers as the government shutdown continues, the White House budget office said Friday that mass firings of federal workers have started.

    The firings are happening as hundreds of thousands are already furloughed and still others are being required to report to duty without pay.

    Analysts will be closely monitoring the shutdown’s impact on spending. For now, many retailers say that consumers, while resilient, are choosy about what they buying. Analysts will also be closely watching how shoppers will react as retailers push through price increases as a result of high tariff costs in the next few months, experts said.

    Given an economic slowdown, holiday spending growth is expected to be smaller than a year ago, according to several forecasts.

    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 during the year-ago period.

    Deloitte Services LP forecasts holiday retail sales to be up between 2.9% to 3.4% from Nov. 1 through Jan. 31. That’s compared to the same year-ago period when retail sales increased 4.2% from the year before.

    Adobe expects U.S. online sales to hit $253.4 billion this holiday season from Nov. 1 to Dec. 31, representing a 5.3% growth. That’s smaller than last year’s 8.7% growth.

    Given the uncertainty, companies increasingly want to hire workers closer to when they need them, experts said.

    “In today’s environment, brands are really looking for us to be agile,” Radial’s Wnorowski said. “Radial is meeting that need of the customer and the consumer with a more flexible and disciplined approach to hiring.”

    So for some of its clients, Radial will now be hiring two weeks before Thanksgiving weekend, the traditional start for the holiday shopping season, instead of four weeks before the kickoff, she said. Radial is also speeding up training of holiday hires due to new technology that’s simplifying their tasks. It used to take a couple of days to train a worker, but now it only takes a couple of hours, she said.

    Meanwhile, Target said it’s again embracing a three-prong approach. It starts first by offering current workers additional hours and then taps into a separate pool of workers— 43,000— who pick up shifts that work for their schedules. The Minneapolis-based company also hires seasonal workers across its nearly 2,000 stores and more than 60 distribution facilities to meet demand, it said.

    For the past few years, Walmart, the nation’s largest retailer and the largest private employer, has been offering the extra hours available during the holidays to its workers, a Walmart spokesperson said, noting it’s worked well and the feedback from customers and workers has been “overwhelmingly positive.”

    The Bentonville, Arkansas-based retailer said there may be some seasonal hiring on a store-by-store basis, but the majority of stores will dole out those hours to current workers.

    Waiting until the last minute to hire workers could mean a mad scramble to find talent, but companies say that due to the slowing economy, they don’t anticipate having a hard time finding the needed pool.

    Meanwhile, the temporary halting of the release of economic reports leaves retailers in the dark about forecasting sales and the workers they need to meet the demand.

    “Certainly, for our customers not having access to data will put more of a challenge on their ability to forecast,” Wnorowski of Radial said. “But we’ll stay very close to them as we go into peak and we’ll adjust as soon we see things changing.”

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  • Report: Mass. cities, towns face ‘historic’ fiscal crisis

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    BOSTON — Massachusetts cities and towns are facing a “historic fiscal crisis” amid rising operating costs, lackluster state aid and restraints on property tax increases, according to a new report.

    The “Perfect Storm” report, released by the Massachusetts Municipal Association, found that while state government spending has increased by an average of 2.8% per year since 2010 to meet its needs, restraints on local revenue sources – including Proposition 2 1⁄2 – have held city and town spending to just 0.6% per year.


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    By Christian M. Wade | Statehouse Reporter

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  • Asian shares skid after Wall Street tumbles to its worst day since April as China trade woes worsen

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    BANGKOK — BANGKOK (AP) — Asian shares tumbled on Monday as escalating trade tensions with China shattered a monthslong calm on Wall Street.

    U.S. stocks skidded on Friday after President Donald Trump threatened to crank tariffs higher on China, signaling more trouble ahead between the two biggest economies. He was responding to restrictions Beijing is imposing on exports of rare earths, which are materials that are critical for the manufacturing of everything from consumer electronics to jet engines.

    But U.S. futures advanced, with the contract for the S&P 500 gaining 1.4% while that for the Dow Jones Industrial Average gained 1%.

    China reported its global exports rose 8.3% in September from a year earlier, the strongest growth in six months and further evidence that its manufacturers are shifting sales from the U.S. to other markets.

    Exports to the U.S. tumbled 27% year-on-year last month, customs data showed.

    In Hong Kong, the Hang Seng sank 2.2% to 25,700.07.

    Most other major regional markets logged losses of more than 1%.

    The Shanghai Composite index edged 0.2% lower to 3,889.50 and the Kospi in South Korea gave up 0.7% to 3,584.55.

    Australia’s S&P/ASX 200 declined 0.8% to 8,882.80. Taiwan’s Taiex shed 1.4% and India’s Sensex was down 0.4%.

    Markets in Tokyo were closed for a holiday.

    On Friday, the S&P 500 sank 2.7% in its worst day since April, closing at 6,552.51. The Dow Jones Industrial Average dropped 1.9% to 45,479.60, and the Nasdaq composite lost 3.6% to 22,204.43.

    The setback reflected signs of a re-escalation of the trade war.

    “We have been contacted by other Countries who are extremely angry at this great Trade hostility, which came out of nowhere,” Trump wrote on Truth Social, alluding to Beijing. He also said “now there seems to be no reason” to meet with China’s leader, Xi Jinping, after earlier agreeing to do so as part of an upcoming trip to South Korea.

    Roughly six out of every seven stocks within the S&P 500 fell. Nearly everything weakened, from Big Tech companies like Nvidia and Apple to stocks of smaller companies looking to get past uncertainty about tariffs and trade.

    The market may have been primed for a slide. U.S. stocks were already facing criticism that their prices had shot too high following the S&P 500’s nearly relentless 35% run from a low in April. The index, which dictates the movements for many 401(k) accounts, is still near its all-time high set earlier in the week.

    Critics say the market looks too expensive after prices rose much faster than corporate profits. Worries are particularly high about companies in the artificial-intelligence industry, where pessimists see echoes of the 2000 dot-com bubble that imploded. For stocks to look less expensive, either their prices need to fall, or companies’ profits need to rise.

    In the bond market, the yield on the 10-year Treasury sank to 4.05% from 4.14% late Thursday.

    It had already been lower before Trump made his threats, as a report from the University of Michigan suggested that sentiment among U.S. consumers remains in the doldrums.

    Some of Friday’s strongest action was in the oil market, where the price of a barrel of benchmark U.S. crude sank 4.2% to $58.90.

    It fell as a ceasefire between Israel and Hamas came into effect in Gaza. An end to the war could remove worries about disruptions to oil supplies, which had kept crude’s price higher than it otherwise would have been.

    Losses accelerated following Trump’s tariff threat, which could gum up global trade and lead the economy to burn less fuel.

    Brent crude, the international standard, dropped 3.8% to $62.73 per barrel. However, early Monday it was trading 85 cents higher at $63.58 per barrel. U.S. benchmark crude oil gained 72 cents to $59.62 per barrel.

    In other dealings early Monday, the dollar rose 152.22 Japanese yen from 151.89 yen late Friday. The euro fell to $1.1605 from $1.1614.

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  • Trump says inflation is ‘defeated’ and the Fed has cut rates

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    WASHINGTON — WASHINGTON (AP) — Inflation has risen in three of the last four months and is slightly higher than it was a year ago, when it helped sink then-Vice President Kamala Harris’ presidential campaign. Yet you wouldn’t know it from listening to President Donald Trump or even some of the inflation fighters at the Federal Reserve.

    Trump told the United Nations General Assembly late last month: “Grocery prices are down, mortgage rates are down, and inflation has been defeated.”

    And at a high-profile speech in August, just before the Fed cut its key interest rate for the first time this year, Federal Reserve Chair Jerome Powell said: “Inflation, though still somewhat elevated, has come down a great deal from its post-pandemic highs. Upside risks to inflation have diminished.”

    Yet dismissing or even downplaying inflation while it is still above the Fed’s target of 2% poses big risks for the White House and the Federal Reserve. For the Trump administration, it could find itself on the wrong side of a potent issue: Surveys show that many Americans still see high prices as a major burden on their finances.

    The Fed may be taking an even bigger gamble: It has cut its key interest rate on the assumption that the Trump administration’s tariffs will only cause a temporary bump up in inflation. If that turns out to be wrong — if inflation gets worse or remains elevated for longer than expected — the Fed’s inflation-fighting credibility could take a hit.

    That credibility plays a crucial role in the Fed’s ability to keep prices stable. If Americans are confident that the central bank can keep inflation in check, they won’t take steps — such as demanding sharply higher pay when prices rise — that can launch an inflationary spiral. Companies often increase prices further to offset higher labor costs.

    But Karen Dynan, a senior fellow at the Peterson Institute for International Economics, said this week that with memories of pandemic-era inflation still fresh and tariffs pushing up the cost of imported goods, consumers and businesses could start to lose confidence that inflation will stay low.

    “If that proves to be the case, in hindsight it will be that the Fed cuts — and I do expect several more — are going to be seen as a mistake,” Dynan said.

    So far, the Trump administration’s tariffs haven’t lifted inflation as much as as many economists expected earlier this year. And it remains far below its 9.1% peak three years ago. Still, consumer prices increased 2.9% in August from a year earlier, up from 2.6% at the same time last year and above the Fed’s 2% target.

    The government is scheduled to release the September inflation report on Wednesday, but the data will probably be delayed by the government shutdown.

    Tariffs have pushed up the cost of many imported items, including furniture, appliances, and toys. Overall, the cost of long-lasting manufactured goods rose nearly 2% in August from a year earlier. It was a modest gain, but comes after nearly three decades when the cost of such items mostly fell.

    The cost of some everyday goods are still rising more quickly than before the pandemic: Grocery prices moved up 2.7% in August from a year ago, the largest gain, outside the pandemic, since 2015. Coffee prices have soared nearly 21% in the past year, partly because Trump has slapped 50% import taxes on Brazil, a leading coffee exporter, and also because climate change-induced droughts have cut into coffee bean harvests.

    Most Fed officials are still concerned that inflation is too high, according the minutes of its Sept. 16-17 meeting. Yet they still chose to cut their key interest rate, because they were more worried about the risk of worsening unemployment than about higher inflation.

    But the concern for some economists is that the ongoing rollout of tariffs and the fact that many companies are still implementing price hikes in response could result in more than just a temporary boost to inflation.

    “It is a big gamble after what we’ve been going through … to count on it being transitory,” said Jason Furman, an economist at Harvard University and a former top adviser to President Barack Obama. “Once upon a time, (3% inflation) would have been considered really high.”

    Just two weeks ago, Trump slapped new tariffs on a range of products, including 100% on pharmaceuticals, 50% on kitchen cabinets and bathroom vanities, and 25% on heavy trucks. On Friday, he threatened “a massive increase of tariffs” on imports from China in response to that country’s restrictions on rare earth exports.

    Some companies are still raising prices to offset the tariff costs. Duties on steel and aluminum imports have pushed up the cost of the cans used by Campbell Soups, leading the company’s CEO to say in September that it will implement “surgical pricing initiatives.”

    Chris Butler, CEO of National Tree Company, the nation’s largest artificial Christmas tree seller, says his company will raise prices by about 10% this holiday season on its trees, wreaths, and garlands to offset tariff costs. About 45% of its trees are made in China, with the rest from Southeast Asia, Mexico, and other countries. The cost of labor and real estate is too high to make them in the United States, he said.

    Butler also expects there will be a reduced supply of artificial trees and decorations this year, which could lift industry-wide prices further, because most production in China shut down when tariffs on that country hit 145% earlier this year. Production resumed after Trump reduced the duties to 30% but at a slower pace.

    Butler has pushed his suppliers to absorb some of the cost of the tariffs, but they won’t pay all of it.

    “At the end of the day, we can’t absorb the entirety of it and our factories can’t absorb the entirety of it,” he said. “So we’ve had to pass along some of the increases to consumers.”

    Many Fed policymakers are aware of the risks. Jeffrey Schmid, president of the Federal Reserve Bank of Kansas City, who votes on interest rate decisions, said Monday that high inflation that results from a loss of confidence in the central bank is harder to fight than other price spikes, such as those that result from supply disruptions.

    “The Fed must maintain its credibility on inflation,” Schmid said. “History has shown that while all inflations are universally disliked, not all inflations are equally costly to fight.”

    Yet some Fed officials say that other trends are offsetting the impact of tariffs. Fed governor Stephen Miran, whom Trump appointed just before the central bank’s September meeting, said Tuesday that a steady slowdown in rental costs should reduce underlying inflation in the coming months. And the sharp drop in immigration as a result of the administration’s clampdown will reduce demand, he said, cooling inflation pressures.

    “I’m more sanguine about the inflation outlook than a lot of other people are,” he said.

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  • US buys Argentine pesos, finalizes $20 billion currency swap

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    WASHINGTON — WASHINGTON (AP) — The U.S. directly purchased Argentine pesos on Thursday and finalized a $20 billion currency swap framework with Argentina’s central bank, Treasury Secretary Scott Bessent said in a social media post.

    The intent is to provide assistance from the Latin American country’s economic turmoil.

    “U.S. Treasury is prepared, immediately, to take whatever exceptional measures are warranted to provide stability to markets,” Bessent said, adding that the Treasury Department conducted four days of meetings with Argentinian Finance Minister Luis Caputo in Washington D.C. to come up with the deal.

    Bessent has insisted that the Argentina credit swap is not a bailout. Last month, President Donald Trump stopped short of promising Argentina’s President Javier Milei a financial bailout from the Latin American country’s economic turmoil.

    Still, U.S. farmers and Democratic lawmakers have criticized the deal as a bailout of a country that has benefited from sales of soybeans to China, to the detriment of U.S. farmers.

    Argentina is one of the biggest Latin American economies and the biggest borrower from the International Monetary Fund — its total outstanding credit as of Aug. 31 is $41.8 billion.

    The offer to financially help Argentina comes as Trump has frequently promoted his “America First” agenda. Critics contend that the planned intervention is a way to reward a personal friend of Trump’s who is facing a critical midterm election next month.

    Milei celebrated Bessent’s announcement on social media, hailing his economy minister, Luis Caputo, as “far and away, the best Minister of Economy in all of Argentine history…!!!”

    Caputo was in Washington last week for talks with Bessent about the swap line.

    Argentina’s deregulation minister, Federico Sturzenegger, also congratulated Caputo and the rest of the economic team. “Let’s keep working so that our children want to stay and live in Argentina,” he wrote, adding a pitch to voters to support Milei in the crucial midterm elections later this month.

    _____

    Associated Press writer Isabel DeBre in Buenos Aires contributed reporting.

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  • Average long-term US mortgage rate eases to 6.3%, back to its lowest level in about a year

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    The average rate on a 30-year U.S. mortgage edged lower this week, returning to its lowest level in about a year.

    The average long-term mortgage rate slipped to 6.3% from 6.34% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.32%.

    The modest drop brings the average rate back to where it was two weeks ago, after a string of declines brought down home loan borrowing costs to their lowest since early October 2024.

    Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also eased this week. The average rate dropped to 5.53% from 5.55% last week. A year ago, it was 5.41%, Freddie Mac said.

    Mortgage rates are influenced by several factors, from the Federal Reserve’s interest rate policy decisions to bond market investors’ expectations for the economy and inflation. They generally follow the trajectory of the 10-year Treasury yield, which lenders use as a guide to pricing home loans.

    The 10-year yield was at 4.13% at midday Thursday, up from around 4.09% the same time last week. The yield has been trending higher since it slid to around 4.02% on Sept. 11.

    In late July, mortgage rates started declining in the lead-up to the Federal Reserve’s widely anticipated decision last month to cut its main interest rate for the first time in a year amid growing concern over the U.S. job market.

    However, Fed Chair Jerome Powell has since signaled a cautious approach to future interest rate cuts. That’s in sharp contrast with other members of the Fed’s rate-setting committee, particularly those who were appointed by President Donald Trump, who are pushing for faster cuts.

    Even if the Fed opts to cut its short-term rate further that doesn’t necessarily mean mortgage rates will keep declining. Last fall, after the Fed cut its rate for the first time in more than four years, mortgage rates ticked higher, eventually reaching just above 7% in January this year.

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  • Ferrari reveals features of first fully electric vehicle

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    MILAN — MILAN (AP) — Italian luxury sports carmaker Ferrari raised its 2025 guidance on Thursday, despite global 15% tariffs on foreign car imports to the United States, as the company unveiled the new powertrain and chassis of its first fully electric production vehicle.

    Ferrari CEO Benedetto Vigna declined to give target production numbers or a price for the Ferrari Elettrica, which will be delivered beginning late next year, with the design to be revealed in the spring.

    Under the carmaker’s new five-year plan, 40% of the product lineup will be the brand’s core internal combustion engines, 40% will be hybrid and 20% will be electric by 2030, with an average of four new launches a year in the period. The new business plan calls for more models with lower volumes of each.

    The fully electric vehicle Ferrari Elettrica represents a new segment that Vigna said would bring new buyers to Ferrari. It builds on 15 years of electrification research at Ferrari, starting with Formula 1 technology that was first incorporated into the limited edition La Ferrari hybrid supercar that debuted in 2013.

    To maintain the sports car feel and emotions integral to the Ferrari experience, the Elettrica will capture powertrain vibration through accelerometers on the rear axle that will be amplified to create a sports car roar. Drivers also can select five power levels using steering panels to create the sensation of continuous acceleration.

    Ferrari also is manufacturing most critical components internally, including the battery system and software. The chassis and body shell will be made out of 75% recycled aluminum, saving 6.7 tons of carbon dioxide per vehicle.

    In raising its forecast, Ferrari said that revenues this year would top 7.1 billion euros ($8.2 billion), up from more than 7 billion euros in the previous guideline. Ferrari also targets earnings before interest, taxes, depreciation and amortization, or EBITDA, of 2.7 billion euros with a margin of more than 38.3%.

    Presenting its five-year plan, the Formula 1 racing team and sports carmaker that has expanded into luxury goods is projecting net revenues of 9 billion euros by 2030 with and EBITDA of at least 3.6 billion euros on 40% margins.

    Chief Financial Officer Antonio Picca Piccon said that the confirmation of 15% tariffs on European car imports to the U.S. removed “an important element of uncertainty.” The targets were raised based on solid business performance and increased revenues from the sports car business.

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  • Ferrari reveals features of first fully electric vehicle

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    MILAN — MILAN (AP) — Italian luxury sports carmaker Ferrari raised its 2025 guidance on Thursday, despite global 15% tariffs on foreign car imports to the United States, as the company unveiled the new powertrain and chassis of its first fully electric production vehicle.

    Ferrari CEO Benedetto Vigna declined to give target production numbers or a price for the Ferrari Elettrica, which will be delivered beginning late next year, with the design to be revealed in the spring.

    Under the carmaker’s new five-year plan, 40% of the product lineup will be the brand’s core internal combustion engines, 40% will be hybrid and 20% will be electric by 2030, with an average of four new launches a year in the period. The new business plan calls for more models with lower volumes of each.

    The fully electric vehicle Ferrari Elettrica represents a new segment that Vigna said would bring new buyers to Ferrari. It builds on 15 years of electrification research at Ferrari, starting with Formula 1 technology that was first incorporated into the limited edition La Ferrari hybrid supercar that debuted in 2013.

    To maintain the sports car feel and emotions integral to the Ferrari experience, the Elettrica will capture powertrain vibration through accelerometers on the rear axle that will be amplified to create a sports car roar. Drivers also can select five power levels using steering panels to create the sensation of continuous acceleration.

    Ferrari also is manufacturing most critical components internally, including the battery system and software. The chassis and body shell will be made out of 75% recycled aluminum, saving 6.7 tons of carbon dioxide per vehicle.

    In raising its forecast, Ferrari said that revenues this year would top 7.1 billion euros ($8.2 billion), up from more than 7 billion euros in the previous guideline. Ferrari also targets earnings before interest, taxes, depreciation and amortization, or EBITDA, of 2.7 billion euros with a margin of more than 38.3%.

    Presenting its five-year plan, the Formula 1 racing team and sports carmaker that has expanded into luxury goods is projecting net revenues of 9 billion euros by 2030 with and EBITDA of at least 3.6 billion euros on 40% margins.

    Chief Financial Officer Antonio Picca Piccon said that the confirmation of 15% tariffs on European car imports to the U.S. removed “an important element of uncertainty.” The targets were raised based on solid business performance and increased revenues from the sports car business.

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  • Fed minutes: Most officials supported further rate cuts as worries about jobs rose

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    WASHINGTON — WASHINGTON (AP) — Most members of the Federal Reserve’s interest-rate setting committee supported further reductions to its key interest rate this year, according to minutes from last month’s meeting released Wednesday.

    A majority of Fed officials felt that the risk unemployment would rise had worsened since their previous meeting in July, while the risk of rising inflation “had either diminished or not increased,” the minutes said. As a result, the central bank decided at its Sept. 16-17 meeting to reduce its key rate by a quarter-point to about 4.1%, its first cut this year.

    Rate cuts by the Fed can gradually lower borrowing costs for things like mortgages, auto loans, and business loans, encouraging more spending and hiring.

    Still, the minutes underscored the deep division on the 19-person committee between those who feel that the Fed’s short-term rate is too high and weighing on the economy, and those who point to persistent inflation that remains above the central bank’s 2% target as evidence that the Fed needs to be cautious about reducing rates.

    Only one official formally dissented from the quarter-point cut: Stephen Miran, who was appointed by President Donald Trump and was approved by the Senate just hours before the meeting began. He supported a larger, half-point cut instead.

    But the minutes noted that “a few” policymakers said they could have supported keeping rates unchanged, or said that “there was merit” in such a step.

    The differences help explain Chair Jerome Powell’s statements during the news conference that followed the meeting: “There are no risk-free paths now. It’s not incredibly obvious what to do.”

    Miran said in remarks Tuesday that he thinks inflation will steadily decline back toward the Fed’s 2% target, despite Trump’s tariffs, and as a result he doesn’t think the Fed’s rate needs to be nearly as high as it is. Rental costs are steadily declining and will bring down inflation, he said, while tariff revenue will reduce the government’s budget deficit and reduce longer-term interest rates, which gives the Fed more room to cut.

    Yet many other Fed officials remain concerned about stubbornly high inflation, the minutes showed. Jeffrey Schmid, president of the Federal Reserve’s Kansas City branch, said in a speech Monday that “inflation is too high” and argued that the Fed should keep rates high enough to cool demand and prevent inflation from worsening.

    And Austan Goolsbee, president of the Fed’s Chicago branch, said in an interview Friday with The Associated Press that he supported a cautious approach toward more cuts, and wanted to see evidence that inflation would cool further.

    “I am a little uneasy with front loading rate cuts, presuming that those upticks in inflation will just go away,” he said.

    The minutes provide insight into how the Fed’s policymakers were thinking last month about inflation, interest rates, and hiring. Since then, however, the federal government shutdown has cut off the flow of economic data that the Fed relies on to inform its decisions. The September jobs report wasn’t issued as scheduled last Friday, and if the shutdown continues, it could also delay the release of the inflation report set for next Wednesday.

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  • IMF chief warns of economic uncertainty: ‘Buckle up’

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    WASHINGTON — WASHINGTON (AP) — The global economy is holding up better than expected despite major shocks such as President Donald Trump’s tariffs, but the head of the International Monetary Fund says that resilience may not last.

    “Buckle up,” Managing Director Kristalina Georgieva said in a speech at a think tank Wednesday. “Uncertainty is the new normal and it is here to stay.”

    Her comments at the Milken Institute come on a day when gold prices hit $4,000 an ounce for the first time as investors seek safe haven from a weaker dollar and geopolitical uncertainty and before the IMF and World Bank hold their annual meetings next week in Washington. Trump’s trade penalties are expected to be in sharp focus when global finance leaders and central bankers gather.

    The worldwide economy is forecast to grow by 3% this year, and Georgieva is citing a number of factors for why it may not slip below that: Countries have put in place decisive economic policies, the private sector has adapted and the tariffs have proved less severe than originally feared.

    “But before anyone heaves a big sigh of relief, please hear this: Global resilience has not yet been fully tested. And there are worrying signs the test may come. Just look at the surging global demand for gold,” she said.

    On Trump’s tariffs, she says “the full effect is still to unfold. In the U.S., margin compression could give way to more price pass-through, raising inflation with implications for monetary policy and growth.”

    The Republican administration imposed import taxes on nearly all U.S. trading partners in April, including Canada, Mexico, Brazil, China and even the tiny African nation of Lesotho. “We’re the king of being screwed by tariffs,” Trump said Tuesday in the Oval Office during a meeting with Canadian Prime Minister Mark Carney.

    While the U.S. has announced some trade frameworks with nations such as the United Kingdom and Vietnam, the tariffs have created uncertainty worldwide.

    “Elsewhere, a flood of goods previously destined for the U.S. market could trigger a second round of tariff hikes,” Georgieva said.

    The Supreme Court next month will hear arguments about whether Trump has the authority to impose some of his tariffs under the International Emergency Economic Powers Act.

    In her wide-ranging remarks, Georgieva pointed to youth discontent around the world as many young people foresee a future where they earn less than their parents.

    “The young are taking their disappointment to the streets from Lima to Rabat, from Paris to Nairobi, from Kathmandu to Jakarta, all are demanding better opportunities,” she said. “And here in the U.S., the chances of growing up to earn more than your parents keeps falling and here too, discontent has been evident — and it has helped precipitate the policy revolution that is now unfolding, reshaping trade, immigration and many international frameworks.”

    She also called for greater internal trade in Asia, more business friendly changes in Africa and more competitiveness in Europe.

    For the United States, Georgieva urged the government to address the federal debt and to encourage household saving.

    The national debt is the total amount of money that the federal government owes to its creditors. The federal debt has increased from $380 billion in 1925 to $37.64 trillion in 2025, according to Treasury Department data.

    The Congressional Budget Office reported in July that Trump’s new tax and spending law will add $3.4 trillion to that total through 2034.

    The IMF is a 191-country lending organization that seeks to promote global growth and financial stability and to reduce poverty.

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

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    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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  • DC’s shutdown hasn’t stopped the stock market. Here’s what may

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    NEW YORK — NEW YORK (AP) — If the U.S. government’s latest shutdown can’t stop the stock market, what can?

    Stock prices keep rising, even as the shutdown delays important economic reports that usually steer trading. The S&P 500 and Dow Jones Industrial Average set all-time highs Friday.

    It’s not just Big Tech driving the market, which has often been the case in recent years. Sure, Nvidia and other darlings of the artificial-intelligence frenzy are still climbing, but almost everything on Wall Street is coming up a winner. The Russell 2000 index of smaller stocks has set a record after taking nearly four years to get back to its prior all-time high. Gold also hit a record in an unusual confluence, while the most popular U.S. bond fund is on track for its best year in at least five.

    Past shutdowns have had minimal effect on the stock market or on the economy, and the bet on Wall Street is that something similar will happen again. Many professional investors expect the market to climb still more, even after a 35% surge from its low in April.

    That’s not to say there aren’t risks. Much of the optimism is built on expectations for certain things to happen. If they don’t, the pretty picture on Wall Street could become much uglier. Among the potential concerns:

    This is the easiest criticism to make about the stock market following its nearly relentless rally since April. Stock prices tend to follow the path of corporate profits over the long term, but stock prices have surged much faster than profits lately.

    One measure popularized by Nobel-winning economist Robert Shiller, which looks at profits over the preceding 10 years, shows the S&P 500 near its most expensive level since the 2000 dot-com bubble. Some critics have made parallels between that bubble, which saw the S&P 500 eventually halve in value, and the recent AI bonanza.

    It’s not just the big household names in the S&P 500 index raising concern. Ann Miletti, head of equity investments for Allspring Global Investments, has been struck by how much stock prices have shot up for speculative kinds of stocks, such as smaller, money-losing companies. They’ve done much better than their profitable counterparts in recent months.

    She said she’s feeling relatively optimistic about conditions for stocks going into 2026, but “it’s these little bubbles that are concerning to me. When you see things like this, it’s generally not a good thing.”

    To be sure, signals suggesting a too-expensive stock market are famously bad at predicting turning points in the market. Stocks can stay expensive for a while, as long as investors stay willing to pay the high prices.

    For stocks to look more typical in valuation, either stock prices need to drop, or corporate profits need to rise. That’s raising stakes for the upcoming profit reporting season.

    Companies are lining up to tell investors how much profit they made during the summer, with PepsiCo and Delta Air Lines scheduled to lead off on Thursday. JPMorgan Chase and other big banks will follow quickly afterward.

    Analysts are looking for S&P 500 companies to report collective growth of 8% in earnings per share from a year earlier, according to FactSet. They’ll need not only to hit that target, but also to forecast continued growth for the rest of this year into next.

    That’s even though companies are still trying to figure out how to deal with tariffs, stubbornly high inflation and other shifts in an uncertain economy.

    One of the main reasons the stock market has boomed is the expectation that the Fed will deliver a string of cuts to interest rates.

    Lower rates give the economy a boost by making it cheaper for U.S. households and companies to borrow and spend. They can also make investors willing to pay higher prices for stocks, bonds and other investments.

    Traders on Wall Street are largely expecting the Fed to cut interest rates at least three more times by the middle of next summer, according to data from CME Group. Fed officials themselves have indicated they’re likely to cut because the job market is slowing.

    But Chair Jerome Powell has insisted they may have to change plans quickly. That’s because inflation has remained stubbornly above the Fed’s 2% target, and lower interest rates can give inflation more fuel.

    “I feel like interest rates and expectations of what the Fed is going to do are driving everything right now,” Miletti said.

    “If the Fed doesn’t cut as much as people are expecting, any of these areas that look a little speculative, because they’re not based on fundamentals, those areas will have some real problems.”

    “This is the question of the decade,” said Yung-Yu Ma, chief investment strategist at PNC Asset Management Group.

    Ma does not feel that AI-related stocks look too expensive, even after their big climbs, but that’s only as long as gangbusters growth and sales for the industry keep going.

    Hopes for AI also seem to be helping to keep down longer-term interest rates and worries about inflation. AI will need to make the economy more productive in order to offset the upward pressure on inflation and interest rates that are coming from the huge mountains of debt that the U.S. and other governments worldwide are building.

    “If we do achieve these benefits for companies and for people’s lives, everything can go well for years,” said Ma. “I think everyone is tying their fortunes to that ship, whether they realize it or not.”

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

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    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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  • Average long-term US mortgage rate ticks up for second straight week, to 6.34%

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    WASHINGTON — The average rate on a 30-year U.S. mortgage ticked up for the second straight week following a string of declines that had brought down home borrowing costs to their lowest level in nearly a year.

    The average long-term mortgage rate rose this week to 6.34% from 6.3% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.12%.

    Mortgage rates are influenced by several factors, from the Federal Reserve’s interest rate policy decisions to bond market investors’ expectations for the economy and inflation. They generally follow the trajectory of the 10-year Treasury yield, which lenders use as a guide to pricing home loans.

    The 10-year yield was at 4.10% at midday Thursday, down from 4.19% the same time last week. Much of that decline has come in the past few days, driven by discouraging reports on the U.S. economy, particularly the job market.

    In late July, mortgage rates started declining in the lead-up to the Federal Reserve’s widely anticipated decision last month to cut its main interest rate for the first time in a year amid growing concern over the U.S. job market.

    However, Fed Chair Jerome Powell has since signaled a cautious approach to future interest rate cuts. That’s in sharp contrast with other members of the Fed’s rate-setting committee, particularly those who were appointed by President Donald Trump, who are pushing for faster cuts.

    The housing market has been in a slump since 2022, when mortgage rates began climbing from historic lows. Sales of previously occupied U.S. homes sank last year to their lowest level in nearly 30 years. So far this year, sales are running below where they were at this time in 2024.

    The second straight bump in rates could signal a repeat of what happened last year after the Fed cut its benchmark rate for the first time in more than four years. Back then, mortgage rates fell for several weeks prior to the Fed’s September rate cut. In the following weeks however, mortgage rates began rising again, eventually reaching just above 7% in mid-January this year.

    Like last year, the Fed’s rate cut doesn’t necessarily mean mortgage rates will keep declining, even as the central bank signals more cuts ahead.

    Still, the late-summer decline in mortgage rates has already encouraged many homeowners who bought in recent years after rates climbed well above 6% to refinance to a lower rate.

    Mortgage rates will have to sink below 6% to make refinancing an attractive option to a broader swath of homeowners, however. That’s because about 81% of U.S. homes have a mortgage with a rate of 6% or lower, according to Realtor.com.

    Economists generally forecast the average rate on a 30-year mortgage to remain near the mid-6% range this year.

    Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also inched up this week. The average rate rose to 5.55% from 5.49% the previous week. A year ago, it was 5.25%, Freddie Mac said.

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