The U.S. Senate on Thursday voted 80-15 in favor of a bill that would prevent a rail strike by imposing a deal on freight-rail workers, after rejecting a separate House-passed measure that would require rail companies to provide those workers with seven days of paid sick leave per year.
The vote for the bill imposing a deal keeps Washington on track to block a strike, as the House of Representatives passed it Wednesday. President Joe Biden is expected to sign the legislation into law given that he called on Monday for Congress to act.
The deal that would be imposed on rail employees includes a 24% increase in wages from 2020 through 2024, but workers have remained concerned about a lack of paid sick time.
In the vote on sick leave, there were 52 senators in favor, while 43 were opposed, and 60 votes for it were needed. A half dozen Republican senators were in favor, while Sen. Joe Manchin of West Virginia was the only Democrat in opposition.
“While I am sympathetic to the concerns union members have raised, I do not believe it is the role of Congress to renegotiate a collective bargaining agreement that has already been negotiated,” Manchin said in a statement.
Earlier Thursday, the Senate also voted against an amendment from Republican senators that aimed to deliver a cooling-off period so talks between rail companies and their workers could continue.
Railroad operators’ stocks finished with gains Tuesday as traders reacted to Washington’s moves to prevent a strike, but Norfolk Southern Corp. NSC, -0.05%,
CSX Corp. CSX, -0.03%
and Union Pacific Corp. UNP, -0.69%
all lost ground Thursday as the broad market SPX, -0.09%
Apple Inc. said Sunday that it now expects lower shipments of its high-end iPhone 14 Pro and iPhone 14 Pro Max devices than it did previously, as COVID-19 issues hamper production in China.
“We continue to see strong demand for iPhone 14 Pro and iPhone 14 Pro Max models,” the company announced in a Sunday evening press release. “However, we now expect lower iPhone 14 Pro and iPhone 14 Pro Max shipments than we previously anticipated and customers will experience longer wait times to receive their new products.”
Apple AAPL, -0.19%
acknowledged in its release that COVID-19 issues have “temporarily impacted” production of the devices at the Zhengzhou site that is the “primary” assembly facility for the iPhone 14 Pro and iPhone 14 Pro Max. That facility is currently seeing “significantly reduced” operating capacity.
“We are working closely with our supplier to return to normal production levels while ensuring the health and safety of every worker,” the company added in the release.
“Although Apple earnings were only a week ago, supply shortages at the high end of the market and recent COVID lockdowns in China impacting a Foxconn plant could negatively impact iPhone units in the December quarter,” UBS analyst David Vogt wrote Wednesday, ahead of Apple’s press release. “While we believe iPhone demand tends to not be perishable, a slippage of a couple of million units is possible below our 86 million forecast.”
The numbers: The economy gained surprisingly strong 261,000 new jobs in October, underscoring the persistent strength of a labor market that the Federal Reserve worries will exacerbate high inflation.
Economists polled by The Wall Street Journal had forecast 205,000 new jobs.
The unemployment rate, meanwhile, rose to 3.7% from 3.5%, the government said Friday, as more people lost jobs and the size of the labor force shrank a little bit.
Fed Chairman Jerome Powell said on Wednesday the labor market is “out of balance” because there’s too many job openings and too few people to fill them.
Fed officials worry the labor shortage is driving up wages and making it harder for them to reduce inflation back to precrisis levels of 2% or so. The cost of living has risen 8.2% in the past year, one of the highest increases since the early 1980s.
Layoffs and unemployment are likely to increase, however, if the Fed keeps raising U.S. interest rates as expected. The central bank could push a key short-term rate to as high as 5% by next year from near zero just nine months ago.
Rising interest rates slow the economy and sometimes trigger recessions. Many economists predict a downturn is likely by next year. Powell himself admitted the odds of avoiding a recession have fallen due to persistently high inflation.
In October, wages grew 0.4%. Average hourly pay rose slightly in September to $32.58, lowering the increase over the past year to 4.7% from 5%.
It’s the first time in almost a year that the rate of wage growth has dropped below 5%. Before the pandemic, they were rising around 3% a year.
Another potential pressure valve for the economy showed little progress, however. The so-called participation rate — or share of working-age people in the labor force — dipped to 62.2% from 62.3%.
Big picture: The economy is slowing — almost every major indicator is much softer compared to earlier in the year.
The labor market is one of the few exceptions.
Normally that’s a good thing, but the Fed thinks the the labor market is too strong for its own good. The series of rate hikes undertaken by the central bank is bound to slow hiring even further and cause unemployment to rise in the months ahead.
The potential saving grace, Powell and some other economists say? Businesses have struggled so hard to hire people amid a labor shortage that they might not lay off as many people as they usually do when the economy goes sour.
Market reaction: The Dow Jones Industrial Average DJIA, -0.46%
and S&P 500 SPX, -1.06%
were set to open lower in Friday trades. The yield on the 10-year Treasury note TMUBMUSD10Y, 4.158%
rose to 4.19%.
International Distribution Services PLC said Friday that its U.K. division Royal Mail swung to an adjusted operating loss for the first half of fiscal 2023, mostly due to the effect of three days of industrial action.
The company IDS, -13.14%
said that Royal Mail’s adjusted operating loss for the six month period ended in September was 219 million pounds ($248.1 million) compared with an adjusted operating profit of GBP235 million for the first half of fiscal 2022. This included a GBP70 million of direct negative impacts stemming from three days of industrial action, it said.
Royal Mail might require between 5,000 to 6,000 redundancies by the end of August, 2023, IDS said.
The company said that it expects Royal Mail to post full-year adjusted operating loss–a metric which strips out exceptional and other one-off items–to be around GBP350 million. The company said this estimate includes the direct and immediate effect of eight days of industrial action which have taken place or been notified to Royal Mail, but excluding any charges for voluntary redundancy costs.
“This may increase to around a GBP450 million loss if customers move volume away for longer periods following the initial disruption,” it said.
The company said that the loss for the full year would materially increase and it might require “further operational restructuring and headcount reduction” if the Communication Workers Union proceeds with the 16 days of industrial action announced.
Write to Anthony O. Goriainoff at anthony.orunagoriainoff@dowjones.com
The U.S. is at risk of prolonging the COVID pandemic if it fails to back an initiative that aims to get vaccines, diagnostics and treatments to lower-income countries, a congressional group has told President Joe Biden.
In a letter to Biden from the group led by Earl Blumenauer, a Democrat from Oregon, the group urged him to back the World Trade Organization’s agreement in June to ease exports of lifesaving therapies.
“With more than 600 million shots in arms, 21,500 free testing sites, the ability to order at-home tests for free, and more treatments available now than at any point in the pandemic, the outlook in the United States is better than ever. Unfortunately, however, the prospect for many low-income countries is not so positive — putting the United States’ own success in jeopardy,” the lawmakers wrote.
The letter was sent ahead of a meeting of the WTO council for trade-related aspects of IP rights that is due to kick off Thursday.
The group noted that lower-income countries are facing a higher risk of severe illness, hospitalization and death as only a small percentage of their populations are vaccinated. Just 19% of people in those countries are vaccinated, compared with about 75% in high-income countries, according to the Multilateral Leaders Taskforce on COVID-19, a joint initiative of the International Monetary Fund, the World Bank, the World Health Organization and the WTO.
U.S. known cases of COVID are continuing to ease and now stand at their lowest level since late April, although the true tally is likely higher given how many people are testing at home, where the data are not being collected.
The daily average for new cases stood at 43,149 on Wednesday, according to a New York Times tracker, down 23% from two weeks ago. Cases are rising in most northeastern states by 10% of more, while cases in the western states Montana, Washington and Oregon are rising.
The daily average for hospitalizations was down 11% at 27,184, while the daily average for deaths is down 8% to 391.
The new bivalent vaccine might be the first step in developing annual Covid shots, which could follow a similar process to the one used to update flu vaccines every year. Here’s what that process looks like, and why applying it to Covid could be challenging. Illustration: Ryan Trefes
• China’s huge Xinjiang region has been hit with sweeping COVID travel restrictions ahead of a key Communist Party congress later this month, the Associated Press reported. Trains and buses in and out of the region of 22 million people have been suspended, and passenger numbers on flights have been reduced to 75% of capacity in recent days, according to Chinese media reports. The region is home to minorities who have been forced into prison-like re-education centers to force them to renounce their religion, typically Islam, and allegedly subjected to human-rights abuses.
• Five current or former Internal Revenue Service workers have been charged with fraud for illegally getting money from federal COVID-19 relief programs and using a total of $1 million for luxury items and personal trips, prosecutors said, the AP reported. The U.S. attorney’s office in Memphis said Tuesday that the five have been charged with wire fraud after they filed fake applications for the Paycheck Protection Program and the Economic Injury Disaster Loan Program, which were part of a federal stimulus package tied to the pandemic response in 2020.
• Peloton Interactive Inc. PTON, +3.84%
said it plans to cut about 500 jobs, roughly 12% of its remaining workforce, in the company’s fourth round of layoffs this year as the connected fitness-equipment maker tries to reverse mounting losses, the Wall Street Journal reported. After enjoying a strong run early on in the pandemic, Peloton has struggled since the start of the U.S. recovery, and CEO Barry McCarthy, who took over in February, said he is giving the unprofitable company another six months or so to significantly turn itself around and, if it fails, Peloton likely isn’t viable as a stand-alone company.
The U.S. leads the world with 96.6 million cases and 1,061,490 fatalities.
The Centers for Disease Control and Prevention’s tracker shows that 225.3 million people living in the U.S., equal to 67.9% of the total population, are fully vaccinated, meaning they have had their primary shots. Just 109.9 million have had a booster, equal to 48.8% of the vaccinated population, and 23.9 million of those who are eligible for a second booster have had one, equal to 36.6% of those who received a first booster.
Some 7.6 million people have had a shot of one of the new bivalent boosters that target the new omicron subvariants that have become dominant around the world.
