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  • The US economy added 311,000 jobs in February, outpacing expectations | CNN Business

    The US economy added 311,000 jobs in February, outpacing expectations | CNN Business

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    Minneapolis
    CNN
     — 

    The US economy added 311,000 jobs in February, according to the latest monthly employment snapshot from the Bureau of Labor Statistics, released Friday.

    That’s a pullback from the blockbuster January jobs report, when a revised 504,000 positions were added, but shows the labor market is still emitting plenty of heat.

    The unemployment rate ticked up to 3.6% from 3.4%.

    February’s net job gains surpassed economists’ estimates for a more modest month, with only 205,000 to be added. Separately, downward revisions to December’s and January’s totals weren’t that drastic.

    While Friday’s report is a strong one, that’s actually bad news in the broader context of the Federal Reserve’s campaign to curb high inflation, said PNC Financial Services chief economist Gus Faucher.

    “It’s much hotter than the economy can run, and so this means the Fed is going to have to continue to hike interest rates,” he told CNN. “And that makes a recession more likely.”

    Barring a surprisingly low Consumer Price Index inflation report next week, Faucher said he expects the Fed to go forward with a half-point rate hike at its March 21-22 meeting, which would be a higher pace than the recent, more moderate quarter-point increase.

    The Fed has been battling for almost a year to slow the economy and crush the highest inflation in 40 years, but the labor market continues to defy those efforts.

    “Coming up on the one-year anniversary of the Fed’s first rate hike, we never thought we would see the economy churning out 311,000 more jobs this month,” said Chris Rupkey, chief economist of FwdBonds, in a statement. “The party is on and the labor market is having a blast. The economy clearly is not landing, it is soaring.”

    The monthly job gains remain well above pre-pandemic norms, when roughly 180,000 jobs were added per month between 2010 and 2019, BLS data shows. However, the labor market remains tight and imbalances continue to persist in the ongoing recovery efforts from the devastating pandemic.

    Labor turnover data released earlier this week for January showed that there were 1.9 job openings for every person looking for one. Fed Chair Jerome Powell has frequently highlighted how the labor market remains short of pre-pandemic growth projections by more than 3 million people.

    The pandemic accelerated expected demographic trends (the aging out of the massive Baby Boom generation) with increased retirements; people also dropped out of the workforce for care-related needs and health concerns such as long Covid; and there were hundreds of thousands of workers who died from Covid.

    February’s employment report showed a 0.1 percentage point increase in the labor force participation rate to 62.5% — the highest its been since April 2020. However, it remains below pre-pandemic levels of 63.4%.

    Additionally, there was some upward movement in the jobless rate, which increased 0.2 percentage points to 3.6%.

    “Contributing to upward pressure here, there were more people looking for work,”said Mark Hamrick, senior economic analyst at Bankrate.

    Industries with notable job gains included leisure and hospitality, retail trade, government and health care. After being crushed during the pandemic, the leisure and hospitality has been steadily adding back employees and trying to meet increased demand from consumers shifting their spending from goods to services.

    Average hourly earnings — a closely watched metric as the Fed seeks to evaluate the impact of rising wages on inflation — grew 0.2% month-on-month and were up 4.6% over the year before.

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  • Everyone hates switching the clocks for Daylight Saving Time. So why is it so hard to get rid of? | CNN Business

    Everyone hates switching the clocks for Daylight Saving Time. So why is it so hard to get rid of? | CNN Business

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    Everyone hates switching the clocks for Daylight Saving Time. So why is it so hard to get rid of?

    CNN’s Harry Enten tells “Nightcap’s” Jon Sarlin why Americans switch the clocks back and forth twice a year, even though the time change is pretty universally hated. Plus, Los Angeles Times columnist LZ Granderson on how legal sports betting has changed March Madness. And CNN’s Clare Duffy explains why the FTC’s investigation of Twitter could be a real problem for Elon Musk. To get the day’s business headlines sent directly to your inbox, sign up for the Nightcap newsletter.

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  • Credit Suisse delays annual report after ‘late call’ from the SEC | CNN Business

    Credit Suisse delays annual report after ‘late call’ from the SEC | CNN Business

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    London
    CNN
     — 

    Credit Suisse can’t catch a break.

    In the latest piece of troubling news, the beleaguered Swiss bank has delayed the publication of its 2022 annual report following a “late call” from the US Securities and Exchange Commission on Wednesday evening.

    The SEC got in touch over revisions the bank had previously made to its cash flow statements for 2019 and 2020, Credit Suisse

    (CS)     said in a statement Thursday.

    Shares in the bank, which have been trading around record lows, slid 5%.

    “Management believes it is prudent to briefly delay the publication of its accounts in order to understand more thoroughly the comments received,” the company said.

    Credit Suisse added that its 2022 financial results were not impacted. Those revealed the biggest annual loss since the financial crisis in 2008, laying bare the scale of the challenge the bank faces as it attempts a turnaround.

    Thursday’s news underscores that challenge and will also add to concerns about governance at Credit Suisse. It is already in the crosshairs of Switzerland’s financial regulator, which is reportedly looking into comments the lender’s chairman made about the health of its finances.

    Customers withdrew 111 billion Swiss francs ($121 billion) in the final three months of 2022, when the bank was hit by social media speculation that it was on the brink of collapse.

    The rumors, which sparked a selloff in the lender’s shares, followed a series of missteps and compliance failures that have hurt the bank’s reputation and profit, as well as costing top executives their jobs.

    Finma, the Swiss regulator, is seeking to establish the extent to which Axel Lehmann, and other bank representatives, were aware that clients were still withdrawing funds when he told reporters that outflows had stopped, Reuters reported last month, citing people familiar with the matter.

    Finma declined to comment and Credit Suisse told CNN it did not “comment on speculation.”

    In October, Credit Suisse embarked on a “radical” restructuring plan that entails cutting 9,000 full-time jobs, spinning off its investment bank and focusing on wealth management.

    “We have a clear plan to create a new Credit Suisse and intend to continue to deliver on our three-year strategic transformation by reshaping our portfolio, reallocating capital, right-sizing our cost base, and building on our leading franchises,” CEO Ulrich Körner said on February 9.

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  • NTSB investigating Norfolk Southern’s safety culture after conductor is killed in accident involving dump truck in Ohio | CNN

    NTSB investigating Norfolk Southern’s safety culture after conductor is killed in accident involving dump truck in Ohio | CNN

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    CNN
     — 

    A Norfolk Southern conductor was killed Tuesday after being struck by a dump truck at a facility in Ohio, prompting a National Transportation Safety Board investigation of the railway’s safety culture due to the “number and significance” of recent accidents.

    The conductor, identified as 46-year-old Louis Shuster, was fatally injured early Tuesday morning at the Cleveland-Cliffs Cleveland Works property, the railroad said in a news release. It is the third incident involving the railroad in the state in just over a month.

    Shuster was struck when a dump truck carrying limestone collided with the front left side of the first car of the train. He was outside the car when he was struck, a Cleveland police spokesperson told CNN.

    Norfolk Southern is working with Ohio Gov. Mike DeWine, the Cleveland Police Department and Cleveland-Cliffs representatives to learn more, it said.

    The National Transportation Safety Board said on Twitter that it had sent crews to the scene.

    The NTSB said in a statement later that its safety culture probe encompasses multiple incidents and three deaths since December 2021, including the toxic East Palestine derailment and the employee killed earlier Tuesday. It is already investigating a October 28 derailment in Sandusky, Ohio.

    “The NTSB is concerned that several organizational factors may be involved in the accidents, including safety culture,” the board said in a statement. “The NTSB will conduct an in-depth investigation into the safety practices and culture of the company. At the same time, the company should not wait to improve safety and the NTSB urges it to do so immediately.”

    Norfolk Southern’s CEO is scheduled to testify before a Senate committee Thursday.

    “Norfolk Southern has been in touch with the conductor’s family and will do all it can to support them and his colleagues. We are grieving the loss of a colleague today. Our hearts go out to his loved ones during this extremely difficult time,” the railroad said.

    Shuster was member of the Brotherhood of Locomotive Engineers and Trainmen (BLET) and employed as a Norfolk Southern conductor, according to the union.

    “Lou was a passionate and dedicated union brother,” said Pat Redmond, Local Chairman of BLET Division 607. “He was always there for his coworkers. He was very active in helping veterans who worked on the railroad and veterans all across our community.”

    Shuster, a resident of Broadview Heights, Ohio, was president of BLET Division 607 in Cleveland. Shuster has a 16-year-old son and cared for his elderly parents, and was an Army veteran, the union said.

    “This was a tragic situation and it’s a devastating loss for the Shuster family as well as the members of this union,” said BLET National President Eddie Hall. “All railroad accidents are avoidable. This collision underscores the need for significant improvements in rail safety for both workers and the public.”

    Cleveland-Cliffs is a flat-rolled steel company, according to its website, and its Cleveland Works facility sits on the Cuyahoga River in Cleveland.

    CNN has reached out to Cleveland-Cliffs, Cleveland police and the Ohio governor’s office for more information.

    The conductor’s death comes as Norfolk Southern is facing criticism for two recent derailments in Ohio, including one in East Palestine last month that resulted in the release and burning of a toxic chemical that left nearby residents complaining of headaches, coughing and rashes they believe are tied to the fiery crash.

    As the railroad works with the Environmental Protection Agency to remediate the site, it announced a new six-point safety plan Monday designed to help prevent similar derailments in the future.

    And in Springfield, about 200 miles southwest of East Palestine, another Norfolk Southern freight train derailed Saturday.

    The crash knocked out power and the area and resulted in a temporary shelter-in-place order for homes within 1,000 feet of the scene. Crews later determined nothing had spilled from the derailed cars and there was no environmental harm.

    Casualties, including injuries and deaths, involving railroad employees are not uncommon, according to data from the Federal Railroad Administration, which shows there were more than 13,500 incidents involving on-duty employees across the industry in 2022, including 1,060 involving Norfolk Southern employees.

    Forty-two rail employees died while on duty last year, the administration said. Five of those individuals were Norfolk Southern employees.

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  • FCC nominee withdraws her nomination after Manchin opposition | CNN Politics

    FCC nominee withdraws her nomination after Manchin opposition | CNN Politics

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    CNN
     — 

    President Joe Biden’s candidate for the Federal Communications Commission, Gigi Sohn, has withdrawn her nomination after West Virginia Democratic Sen. Joe Manchin announced he’d vote against her confirmation.

    In a statement, Sohn says she’d asked Biden to withdraw her nomination Monday evening, blasting what she detailed as “unrelenting, dishonest and cruel attacks on my character and my career as an advocate for the public interest.”

    “It is a sad day for our country and our democracy when dominant industries, with assistance from unlimited dark money, get to choose their regulators. And with the help of their friends in the Senate, the powerful cable and media companies have done just that,” Sohn wrote.

    The Washington Post first reported Tuesday that Sohn was withdrawing her nomination after Manchin announced he would oppose her confirmation, citing what he called “her years of partisan activism, inflammatory statements online, and partisan alliances with far-left groups.”

    White House press secretary Karine Jean-Pierre declined to detail who, if anyone, the White House was considering to replace Sohn’s nomination.

    “We appreciate Gigi Sohn’s candidacy for this important role. She would have brought tremendous talent, intellect and experience, which is why the President nominated her in the first place,” Jean-Pierre told reporters during Tuesday’s press briefing. “We also appreciate her dedication to public service, her talent, and her years of work as one of the nation’s leading public advocates on behalf of American consumers and competition.”

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  • What’s changed since Powell last headed to Capitol Hill | CNN Business

    What’s changed since Powell last headed to Capitol Hill | CNN Business

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    Minneapolis
    CNN
     — 

    Federal Reserve Chair Jerome Powell is set to appear before the Senate Banking Committee Tuesday to deliver the first part of his two-day semiannual monetary policy testimony before Congress.

    It’s his first appearance before the committee since June last year, when inflation was on its way to 9%.

    Powell is expected to speak to the progress the US central bank has made in its yearlong campaign to rein in high inflation by ratcheting up its benchmark interest rate from near zero to between 4.5% to 4.75%.

    Inflation has slowed in recent months, measuring 6.4% in January after hitting a 40-year high of 9.1% in June. However, the battle is not yet won, and Powell and other Fed officials have cautioned that disinflation will be bumpy and there’s a long “ways to go.”

    Fed policymakers have warned in recent weeks that interest rates will likely have to remain higher for longer in order for inflation to settle down to the central bank’s 2% target.

    This time last year, Powell’s congressional address came on the heels of Russia’s invasion of Ukraine, surging gas prices and a significant escalation in US inflation. The economy continuing to rebound and repair itself from the lingering effects of the pandemic — including the disruptions of the Omicron variant.

    Faced with a strong labor market, uncertain geopolitical developments and surging inflation, Powell told members of Congress then that he’d likely propose a quarter-point rate hike at the central bank’s forthcoming meeting.

    It’s now March 2023, and the central bank is faced with an “extraordinarily strong” labor market, ongoing geopolitical uncertainty and stubborn inflation. However, there are signals that some inflationary pressures have eased: China’s economic growth was recently downgraded; and supply chain disruptions are easing, the Federal Reserve Bank of New York reported Monday.

    The markets are currently expecting the Fed to make another quarter-point rate hike during its next meeting two weeks from now: The CME FedWatch Tool is showing a 69.4% probability of such a hike. However, the perceived chances of a half-point increase (at 30.6%) have grown considerably during the past few weeks. One month ago, the probability for a half-point increase was 3.3%, according to the CME FedWatch Tool.

    Still, several major pieces of economic data — including the latest labor turnover report, monthly jobs report, Consumer Price Index, Producer Price Index, and retail sales — are all due ahead of the Fed’s next policymaking meeting on March 21-22.

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  • Norfolk Southern announces new safety measures after East Palestine disaster as NTSB probes another Ohio train derailment | CNN

    Norfolk Southern announces new safety measures after East Palestine disaster as NTSB probes another Ohio train derailment | CNN

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    CNN
     — 

    As federal investigators visit the site of another Norfolk Southern train derailment in Ohio, the company vowed new safety measures in response to its toxic train wreck that ravaged the town of East Palestine.

    Norfolk Southern will revamp its hot bearing detector network as part of a new six-point safety plan, the company announced Monday.

    “Hot bearing” or “hot box” detectors use infrared sensors to record the temperatures of railroad bearings as trains pass by. If they sense an overheated bearing, the detectors trigger an alarm, which notifies the train crew they should stop and inspect the rail car for a potential failure.

    After the February 3 toxic derailment in East Palestine, investigators discovered hot bearing sensors detected a wheel bearing heating up miles before it eventually failed – but didn’t alert the train’s crew until it was too late, according to a February 23 preliminary report by the National Transportation Safety Board.

    Currently, the average distance between detectors on the Norfolk Southern network is 13.9 miles. On Monday, the company announced it would examine every area where the distance between detectors is greater than 15 miles and would develop a plan to deploy additional detectors where needed.

    Norfolk Southern said other new safety measures would include:

    • Working with manufacturers of “multi-scan” hot bearing detectors, which are able to “scan a greater cross-section of a railcar’s bearings and wheels” to accelerate development and testing.

    • Adding 13 “acoustic bearing” detectors that analyze the acoustic signature of vibration inside the axle and would be able to identify potential problems that a visual inspection could not. These detectors would be added to “high-traffic” routes in Norfolk Southern’s core network.

    • Collaborating with Georgia Tech to advance safety inspection technology using “machine vision and algorithms powered by artificial intelligence to identify defects and needed repairs.”

    • Accelerating the installation of new inspection technology, including the use of high-resolution cameras stationed in strategic locations on its Premier Corridor, which is the train line that connects the Northeast and the Midwest and runs through East Palestine.

    About 200 miles southwest of East Palestine, NTSB investigators arrived Monday in Springfield Ohio – where a Norfolk Southern freight train derailed Saturday.

    Investigators will be “looking at the condition of the track, the mechanical condition of the train, operations, the position of the cars in the train, and signal and train control among other things,” the NTSB said in a statement. “They will also be collecting event recorder data, on-board image recorders, and will conduct interviews with the crew and other witnesses.”

    Investigators with the agency are expected to release a preliminary report in two to three weeks.

    The 212-car freight train was heading south through Clark County en route to Birmingham, Alabama, when 28 of its cars derailed – downing large power lines, knocking out power and temporarily prompting shelter-in-place orders for homes within 1,000 feet.

    Crews later determined there were no spills from the derailed cars, and authorities said there was no environmental harm.

    “There was no release of any chemical or any hazardous material to the soil, to the air, to the water,” Ohio Environmental Protection Agency Director Anne Vogel said Sunday.

    The cause of the derailment remains under investigation, Norfolk Southern said.

    Four of the derailed tank cars had previously been carrying diesel exhaust fluid and an additive commonly used in wastewater treatment, but they were empty when they derailed, Norfolk Southern General Manager of Operations Kraig Barner said.

    “There’s always a small residual amount left in the tanks,” Smith told CNN. “The derailed tank cars are not hazardous.”

    Those empty tankers carried residual product in “very minor amounts” that “dried very quickly,” Springfield Fire Assistant Chief Matt Smith said. He said his team checked the crash site and confirmed nothing had spilled onto the ground.

    But one car was carrying PVC pellets that affected the soil at the crash site, Vogel said. She said that the EPA “will be onsite ensuring that as cars are removed by Norfolk Southern that the soil is not impacted under the ground.”

    After the derailment, authorities sought to assure the community in Clark County that their air, water and soil are safe.

    “Since there have been no releases, we’re looking at clean air, clean soil and clean water for our residents,” Clark County Health Commissioner Charles Patterson said. “Technicians will continue to be on site to ensure that there isn’t any contamination that has been missed.”

    While the two recent train derailments in Ohio have made national news, data from the Federal Railroad Administration Office of Safety Analysis shows there have been at least 1,000 derailments in the United States each year during the past decade.

    The process of removing soil from under the tracks at the East Palestine derailment site started Saturday, the federal Environmental Protection Agency said. The agency had ordered Norfolk Southern to remediate the site, including the excavation of potentially contaminated soil.

    The work could take up to two months, depending on weather conditions and other unforeseen delays, the agency said. The EPA said nearby residents might notice additional odors during that time.

    Some 1,900 feet of rail has been fully removed from the crash site, and about one half of the contaminated soil beneath the removed line has been excavated, Ohio Gov. Mike DeWine’s office said Monday.

    About 3.2 million gallons of liquid waste and about 2,000 tons of solid waste have been removed, DeWine’s office said, citing the state’s EPA.

    While the soil work is underway, Norfolk Southern has agreed to provide financial assistance to residents for various necessities, including temporary lodging, travel, food and clothing, the EPA said.

    Impacts from the East Palestine derailment were also felt in other nearby communities in Pennsylvania, where Norfolk Southern has made an “initial agreement” to pay millions for damages there, officials said Monday.

    The railroad will establish a $1 million community relief fund to support local businesses and residents impacted by the crash in Beaver and Lawrence counties, a news release from Gov. Josh Shapiro’s office said.

    Norfolk Southern also agreed to pay $5 million to reimburse Pennsylvania fire departments that have to replace damaged or contaminated equipment after responding to the derailment, the release said. The agreement also includes money to cover some operating and response costs for Pennsylvania’s environmental protection, health and emergency management departments.

    These payments would be separate from other “applicable legal obligations” that may be imposed, the release said.

    Norfolk Southern earned a record $3.3 billion in net income last year, more than 400 times greater than the $7.4 million that Shapiro said the company agreed to pay to Pennsylvania communities.

    The company spent $4.2 billion on share repurchases and dividends to shareholders and has plans to repurchase another $7.5 billion in shares going forward, or more than 1,000 times the initial amount it has promised to Pennsylvania.

    The East Palestine derailment fueled outcry among residents who have reported headaches, coughing and other ailments after the fiery crash.

    The train was hauling the dangerous chemical vinyl chloride and other chemicals that are feared to have leaked into the surrounding ecosystem.

    Some employees who responded to the East Palestine crash site were not given proper protective equipment and have experienced migraines and nausea, the American Rail System Federation – a union for railroad workers – said in a letter last week.

    Norfolk Southern said it had not received any reports of injury or illness from employees involved in the initial response.

    “Norfolk Southern was on-scene immediately after the derailment and coordinated our response with hazardous material professionals,” the railroad said in a statement.

    The company also said “required PPE was utilized, all in addition to air monitoring that was established within an hour.”

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  • More rate hikes are needed, says Fed’s Mary Daly | CNN Business

    More rate hikes are needed, says Fed’s Mary Daly | CNN Business

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    New York
    CNN
     — 

    Federal Reserve policymakers will need to raise interest rates higher and keep them there longer to tackle the higher prices caused by sticky inflation, San Francisco Fed President Mary Daly said Saturday.

    “It’s clear there is more work to do,” Daly said in a speech at Princeton University. “In order to put this episode of high inflation behind us, further policy tightening, maintained for a longer time, will likely be necessary.”

    Daly acknowledged that high inflation and the aggressive policy action taken by the Fed to bring it down have caused panic on Main Street and Wall Street. “The responses range from fearing these actions will tip the economy into a recession to fearing they won’t be enough to get the job done,” she said.

    That fear has led volatile market swings upon each release of new economic data as uncertainty leads investors to “look for answers in the immediate,” said Daly, “but achieving our mandated goals takes time and a broader view.” The Fed’s current tightening regimen, she said, “was and remains appropriate given the magnitude and persistence of elevated inflation readings.”

    High inflation levels in goods, housing and other sectors along and strong economic data, she said, has led her to question the momentum of disinflation.

    Daly does not currently vote on Fed policy decisions but is a member of the Federal Open Market Committee and participates in policy meetings.

    Her speech followed a week of similar warnings from the Federal Reserve.

    Minneapolis Federal Reserve President Neel Kashkari said last Wednesday that he’s “open to the possibility” of a larger interest rate increase in the Fed’s March policy meeting, “whether it’s 25 or 50 basis points.” (That’s a quarter or half of a percent. A basis point is one hundredth of one percent).

    Atlanta Fed President Raphael Bostic also said Wednesday that he believes the Fed needs to raise its policy rate by half a percentage point at the next meeting.

    On Thursday, Fed Governor Christopher Waller warned that painful interest rates could go higher than expected, citing a slew of recent stronger-than-expected economic data.

    The Federal Reserve has lifted its target range for interest rates from near zero to between 4.5% to 4.75% over the past year in their fight against inflation. In February, they slowed the pace of their hikes to a quarter of a percentage point, down from half a percent in December. Inflation reached a 40-year high in 2022 but began to fall in the final quarter of the year. January’s inflation data showed that the rate of prices increases had inched up once again.

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  • CFPB: What it does and why its future is in question | CNN Business

    CFPB: What it does and why its future is in question | CNN Business

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    New York
    CNN
     — 

    The US Supreme Court decided this week to hear a case that will consider the constitutionality of funding for the Consumer Financial Protection Bureau and, in doing so, test the constraints of US regulators’ power. The case would be heard in the fall, with a decision likely by summer 2024.

    But what is the CFPB? How does its work affect your wallet? And why is its future potentially at risk?

    The agency was created after the 2008 financial meltdown, as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. That law was passed in the wake of the 2007 subprime mortgage crisis and the Great Recession that followed.

    The broad purpose of the CFPB is to protect consumers from financial abuses and to serve as the central agency for consumer financial protection authorities.

    Prior to its creation, as the agency notes on its site, “[c]onsumer financial protection had not been the primary focus of any federal agency, and no agency had effective tools to set the rules for and oversee the whole market.”

    The CFPB has regulatory authority over providers of many types of financial products and services, including credit cards, banking accounts, loan servicing, credit reporting and consumer debt collection.

    It is charged with implementing and enforcing consumer protection laws, making rules and issuing guidance for consumer financial institutions. And it is the place consumers can go to lodge complaints about financial products and services.

    Importantly, Dodd-Frank also gave the agency new authority to determine whether any given consumer financial product or service is unfair, deceptive or abusive and therefore unlawful.

    While there are critics of the agency’s current structure and funding, it has saved consumers money, made it easier for them to seek redress and to get better clarity and more tailored responses from companies when they have a problem with their accounts, loans or credit reports.

    “It has completely changed the consumer financial marketplace. Overall it has had a tremendous impact on making it more fair and transparent,” said Lauren Saunders, associate director of the National Consumer Law Center.

    For instance, the CFPB has taken action against bank overdraft policies. “Arguably, the focus on overdraft practices has led some banks to eliminate or reduce their overdraft fees,” said Christine Hines, legislative director of the National Association of Consumer Advocates.

    And it has gone after institutions for saddling consumers with pointless products, excessive fees and punitive terms.

    Both Hines and Saunders made a special note of CFPB’s actions against Wells Fargo, after the agency found the bank had been engaging in multiple abusive and unlawful consumer practices across several financial products between 2011 and 2022 — from auto loans to mortgage loans to bank accounts.

    Last month, the agency required the bank to pay more than $2 billion to customers who were harmed by such practices, plus a $1.7 billion fine that will go into a relief fund for victims.

    “More than 16 million accounts at Wells Fargo were subject to their illegal practices, including misapplied payments, wrongful foreclosures, and incorrect fees and interest charges,” the agency said in a blog post.

    In the area of mortgages, “CFPB has written rules to implement new protections so that mortgage lenders don’t make loans with tricks and traps that lead people to lose their homes,” Saunders said.

    It also has created other safeguards, including rules on how service providers should communicate with borrowers who want to find alternatives to foreclosure, Hines noted.

    Currently, the agency is in the midst of an effort to curb excessive or “junk” fees on a range of consumer financial products, such as credit card late fees.

    Critics of the CFPB have been trying for years to limit its power and independence, attacking the way the agency is structured and funded. Like federal banking regulators, its funding is not determined by lawmakers in Congress as part of the annual appropriations process. Rather, it gets its money from the Federal Reserve System’s earnings.

    “This nontraditional funding source limits congressional oversight of the agency and is the subject of legal challenges,” according to the Congressional Research Service.

    The latest challenge — arising from a federal appeals court ruling that CFPB’s funding violates the Constitution’s Appropriations Clause and separation of powers — is what the Supreme Court will take up in its October term.

    While it’s impossible to predict how the justices will rule, should they decide to uphold the appeals court ruling, that will put in doubt how the agency will be funded going forward, and whether it can continue to function effectively.

    It’s also unclear whether the agency’s actions and rule-making over the past 11 years would be invalidated, nor what impact it would have on banks and other financial institutions that have set up systems to be in compliance with CFPB rules and safe harbors.

    “The agency would be unable to do anything if the funding is invalidated. And prior rules could be challenged as the agency did not have a legal funding source that it could use to write those rules,” Cowen Washington Research Group analyst Jaret Seiberg said in a note to clients.

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  • East Palestine residents voice frustrations, frequently interrupt train company official at tense town hall | CNN

    East Palestine residents voice frustrations, frequently interrupt train company official at tense town hall | CNN

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    CNN
     — 

    Angry residents repeatedly interrupted a railroad company official at a contentious town hall in East Palestine, Ohio, on Thursday, with questions and concerns regarding cleanup efforts at the site of a toxic train derailment nearly one month ago.

    “We’re going to do the right thing, we’re going to clean up the site,” said Norfolk Southern representative Darrell Wilson as shouts were raised from those in attendance. “We’re going to test until we get all the contamination gone.”

    “No, you’re not!” one voice cried out.

    Norfolk Southern, the operator of the train that derailed on the evening of February 3, has faced continued criticism from residents in the area, some of whom report illnesses they believe stem from the crash.

    After the derailment, the dangerous chemical vinyl chloride was released and burned to prevent a potentially deadly explosion, and other chemicals of concern that were being transported are feared to have leaked into the surrounding ecosystem in Ohio and Pennsylvania – with potentially damaging health consequences. Crews involved in the cleanup have also reported medical symptoms, according to a letter on behalf of workers’ unions.

    During Thursday’s town hall, officials with the Environmental Protection Agency said Norfolk Southern’s plans to remediate the site were under consideration that night, and Mark Durno, Regional Response Coordinator for the EPA, told CNN’s Brenda Goodman that teams were poised to approve it.

    That paved the way for the process to begin on Friday morning. The EPA has ordered the freight rail company to fully clean up the site of the wreck.

    Remediation started Friday a quarter mile from the derailment site on the south track, video from CNN’s Miguel Marquez shows.

    The process will involve removing one side of the tracks, digging out the contaminated soil, conducting sampling, and then replacing the tracks. The same would then be done on the other side of the tracks.

    While work is being done on the south track, trains will continue to run on the north track where there are still tank cars that can’t be removed until they’re inspected, Wilson said.

    “The sooner they pick it up, the sooner they can get it out of town,” EPA Region 5 Administrator Debra Shore said at the town hall. “This is going to be a complicated, big project.”

    Officials are hoping to begin the process on the north side around March 28, with the entire process finishing by the end of April, Wilson said.

    Approximately 2.1 million gallons of liquid waste and approximately 1,400 tons of solid waste have already been removed from the derailment site, Ohio Gov. Mike DeWine’s office announced in a news release Thursday, citing the state’s EPA. The wastewater and solid waste have been transported to sites in Ohio and elsewhere, including Michigan, Indiana and Texas, according to the release.

    “We’re very sorry for what happened. We feel horrible about it,” Wilson said – which spurred an uproar from the crowd.

    Last week, Ohio Lt. Gov. Jon Husted had suggested the company should temporarily or permanently relocate residents who feel unsafe.

    “I think that the railroad should consider buying property of people who may not feel safe or would want to relocate as a result of the spill,” he told CNN on February 23. “This is the railroad’s responsibility, and it’s up to the government officials at the federal, state and local levels to hold them accountable and do right by the citizens of East Palestine.”

    In response to a resident’s question at the town hall meeting, Wilson said there has not been any talk about relocating residents.

    “This will be an evolving conversation that’s going to go on for quite a while,” he said, adding the company will continue to collect data to inform its decisions.

    This week, Norfolk Southern CEO Alan Shaw sold $448,000 worth of the company’s stock and Shaw personally set up a $445,000 scholarship fund for seniors at East Palestine High School that an unspecified number of students will be able to use to attend college or vocational schools.

    Norfolk Southern did not respond to request for comments about the stock sale, and whether Shaw plans to reduce or donate more of his salary in the wake of the accident.

    In addition to the site cleanup, the EPA is requiring Norfolk Southern to test directly for the presence of dioxins – compounds considered to have significant toxicity and can cause disease. The testing will be conducted with oversight by the agency, according to a statement released Thursday.

    The EPA will direct immediate cleanup of the area if dioxins are found at a level that poses any unacceptable risk to human health or the environment, according to the statement. The EPA will also require Norfolk Southern to conduct a background study to compare any dioxin levels around East Palestine to dioxin levels in other areas not impacted by the train derailment.

    The agency noted dioxins may be found in the environment as a result of common processes such as burning wood or coal, and they break down slowly, so the source of dioxins found in an area may be uncertain.

    The effort comes in direct response to concerns the EPA heard from East Palestine residents, the statement said.

    “This action builds on EPA’s bipartisan efforts alongside our local, state, and federal partners to earn the trust of this community and ensure all residents have the reassurances they need to feel safe at home once again,” EPA Administrator Michael Regan said.

    As of February 28, the EPA had collected at least 115 samples in the potentially impacted area, which include samples of air, soils, surface water, and sediments, the statement said.

    To date, EPA’s monitoring for indicator chemicals has suggested a low probability for release of dioxin from this incident, according to the statement.

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  • What you need to know about this earnings season | CNN Business

    What you need to know about this earnings season | CNN Business

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


    New York
    CNN
     — 

    About 99% of all S&P 500 companies have reported fourth quarter earnings and the results aren’t great.

    Companies listed in the S&P 500 index beat analysts’ earnings estimates by an average of just 1.3% last quarter. For context, that’s way down on the index’s 5-year average of 8.6%, according to FactSet data.

    What’s happening: There have been some steep and disappointing profit misses as corporate America feels the sting of sticky inflation and the Federal Reserve’s interest rate hikes.

    Tech companies fared poorly this season: Apple

    (AAPL)     recorded a rare earnings miss while Intel

    (INTC)     and Google-parent company Alphabet also fell short of expectations.

    But it wasn’t all doom-and-gloom. Energy companies brought in yet another quarter of record profits, with Big Oil companies — such as Chevron, ConocoPhillips, Exxon and Shell — notching their most profitable years in history. Elsewhere, Tesla

    (TSLA)     reported record revenue gains and beat earnings expectations. Big box retailers Target

    (TGT)     and Walmart

    (WMT)     also surpassed estimates as US consumers kept on spending.

    Here’s what else traders need to know about the final few months of last year and beyond.

    Corporate profits could drop for the first time since 2020

    S&P 500 companies are on track to report a 4.6% drop in earnings year-over-year, according to FactSet data. That would mark their first earnings decline since the third quarter of 2020, when Covid shut down large swaths of the economy.

    Gloomy forecasts abound

    About 81 S&P 500 companies have issued negative earnings-per-share guidance for the first quarter of 2023, according to FactSet. That’s a lot higher than the 23 companies reporting positive guidance.

    There was no shortage of foreboding forecasts from top execs on earnings calls this season.

    Walmart beat estimates last quarter, but they also lowered expectations for future earnings.

    Home Depot

    (HD)     CEO Ted Decker said he was concerned that consumers were becoming less resilient to the economy. “We noted some deceleration in certain products and categories, which was more pronounced in the fourth quarter,” he said on an analyst call.

    Lowe’s executives, meanwhile, warned that they were preparing for a “more cautious consumer” this year.

    Investors feel like celebrating

    Wall Street traders appear to be taking this dour earnings season in their stride. The market is “rewarding positive earnings surprises more than average and punishing negative earnings surprises much less than average for the fourth quarter,” reports FactSet.

    Inflation is (still) a big deal

    More than 325 S&P 500 companies have cited the term “inflation” during their earnings calls for the fourth quarter. That’s well above the 10-year average of 157, according to FactSet document searches.

    But the worries over price hikes appear to be waning, at least a little bit. This marks the lowest number of S&P 500 companies using the “I”-word on their calls since the third quarter of 2021. Since last quarter, the number of inflation mentions has fallen by about 20%.

    ▸ ISM Services PMI — a report that measures the strength of the US service sector — is due out at 10 a.m. ET. The data is expected to show a slight slowdown in growth between January and February (54.5 in February vs. 56.5 in January. For context, a reading above 50 means the services economy is expanding).

    That deceleration would be a big deal. It would signal that the economy is beginning to cool and that the Fed’s efforts to fight inflation by raising interest rates are working. If services sector growth accelerates, however, it could signal that more aggressive rate hikes are ahead and send markets lower.

    ▸ Wall Street is anticipating (or dreading, depending on who you ask) next Friday’s unemployment report. The February data is expected to shed some light on a shockingly resilient labor market.

    Another unexpected surge in non-farm payrolls, like the 517,000 new jobs added in January, could indicate more Fed rate hikes are ahead. That could roil markets in this “good news is bad news” environment.

    Analysts expect that the economy added 200,000 new jobs last month, according to Refinitiv data.

    ▸ The Chinese economy surprised investors this week by quickly bouncing back from its zero-Covid shutdowns. China’s first consumer price index, producer price index and trade figures of 2023 are set to be released next week, which will show the full extent of the country’s rebound.

    “These numbers will offer the first official indications of mainland China’s reopening effect following the rebound seen in PMI numbers,” wrote analysts at S&P Global.

    Global manufacturing rose in February for the first time in seven months, according to the latest PMI surveys compiled by S&P Global. That growth was largely spurred on by China’s reopening.

    Shares of Silvergate Capital, a large lender to cryptocurrency firms, plunged nearly 60% — a record drop — on Thursday after the company told the Securities and Exchange Commission that it won’t be able to file its annual report on time and cited concerns about its ability to remain in business.

    The majority of Silvergate’s crypto clients, including Coinbase, Paxos, Galaxy Digital and Crypto.com, quickly cut ties with the bank amid the chaos.

    So what does it all mean?

    My colleague Allison Morrow explains: The California-based lender reported a $1 billion loss for the fourth quarter as investors panicked over the collapse of FTX, the exchange founded by Sam Bankman-Fried that is now at the center of a massive federal fraud investigation.

    FTX’s collapse in November rippled through the digital asset sector, forcing several firms to halt operations and even declare bankruptcy as liquidity dried up and investors fled.

    But unlike FTX, BlockFi, Celsius, Voyager and other crypto companies that folded last year, Silvergate is a traditional, federally insured lender that has positioned itself as a gateway to the crypto sector.

    It’s among the first major instances of crypto’s volatility spilling into the mainstream banking system — a scenario regulators and crypto skeptics have long feared.

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  • ‘Have not heard of him’: George Santos has a new campaign treasurer but questions persist | CNN Politics

    ‘Have not heard of him’: George Santos has a new campaign treasurer but questions persist | CNN Politics

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    CNN
     — 

    More than a week after embattled Rep. George Santos named his new campaign treasurer, questions persist over the identity of the person who has filled that role and the campaign’s filings with federal regulators.

    Andrew Olson, listed as treasurer of Santos’ federal political committees on February 21, does not serve as treasurer for any federal committees beyond those associated with the Republican congressman who represents parts of Nassau County, New York. And election officials in New York say no one with that name is registered as treasurer of any political committee in the state. The address associated with Olson and Santos’ campaign is that of a mixed-use apartment and commercial building in Elmhurst, New York, where the congressman’s sister resided until earlier this year.

    “Do not know him. Have not heard of him,” Nassau County Republican Party spokesman Mike Deery told CNN. County GOP chair Joseph Cairo “is not acquainted (with) him,” Deery added.

    On Capitol Hill on Wednesday, Santos did not answer any questions about his treasurer posed by CNN’s Manu Raju. Questions to Olson through an email address provided on the Federal Election Commission filing have gone unanswered. And Santos’ personal lawyer has not responded to inquiries.

    Santos – who has lied about his biography, family background and school and work history – is the subject of federal and local investigations into his finances.

    This year, questions emerged about who serves as treasurer. On January 25, Santos’ campaign listed a Wisconsin political consultant as replacing the congressman’s longtime treasurer Nancy Marks. But the consultant’s lawyer says the campaign had done so without his authorization, and his client had turned down the job.

    On January 31, Marks informed the FEC that she had resigned. Later that day, Olson’s electronic signature appeared on a Santos filing that detailed the campaign’s activity in the final weeks of 2022 along with a note that said it been “filed based on the limited information provided to the campaign from the previous treasurer Nancy Marks.”

    Marks did not respond to CNN’s request for comment this week. Her assistant said they don’t know who Olson is.

    Confusion long has swirled around Santos’ filings with the FEC, which has sent more than two dozen letters requesting additional information from his campaign since he first ran for Congress in the 2020 election cycle.

    This week, the FEC sent yet another such letter, ordering the campaign to fix the statement of organization that listed Olson as the new treasurer, because the paperwork incorrectly described Santos’ campaign committee as a national Republican Party committee. The campaign has corrected the error.

    But Saurav Ghosh, a former FEC enforcement lawyer who now works with the Campaign Legal Center watchdog group, said the initial report “reflects a complete lack of sophistication and lack of diligence with the details about what they are filing.”

    “It seems like his campaign has never done any of kind of reasonable job of filing accurate and complete statements, which is why the FEC has asked them so many questions and why the public, justifiably, is asking them so many questions,” Ghosh added.

    Election watchdogs say they have been stumped when they have sought to learn more about Olson. “I’ve never seen this before: Having a complete mystery as a treasurer for a sitting member of Congress,” said Jordan Libowitz of Citizens for Responsibility and Ethics in Washington.

    The address listed for Santos’ committee and his treasurer on Queens Boulevard in Elmhurst, New York, is that of an apartment building that has been associated with Santos and his sister Tiffany Devolder Santos.

    The congressman’s sister vacated her apartment in that building in January, court records show, and recently reached an agreement with her former landlord to repay more than $19,000 in back rent.

    Her former residence is located in a six-story residential and commercial mixed-use building on Queens Boulevard in Elmhurst – the same building that Santos has listed as his address on campaign documents. In the most recent FEC filing designating Olson as treasurer, no details are given about an office or apartment number.

    Employees at the three businesses on the second floor – a Department of Labor office, beauty salon and finance firm – said the name Andrew Olson was unfamiliar. CNN was not able to access the floor, but the owner of the beauty salon said there were no other businesses or operating offices on the floor.

    The congressman’s sister and her attorney did not respond to CNN inquiries this week.

    State election records show Tiffany Santos controls a New York-based political action committee, Rise NY PAC, that has described itself on social media as working to boost voter registration and enthusiasm. She was paid nearly $26,000 by the PAC during the 2022 election cycle, according to filings with the New York State Board of Elections.

    State elections records also show that Marks has retained her position as treasurer of Tiffany Santos’ PAC.

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  • The US dollar is at a crossroads | CNN Business

    The US dollar is at a crossroads | CNN Business

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


    New York
    CNN
     — 

    Wall Street investors are reaching for their neck braces in preparation for yet another volatile swing in stock markets: A surging US dollar.

    The greenback — which is not just the dominant global currency but also “the key variable affecting global economic conditions,” according to the New York Federal Reserve — reached a 20-year high last year after the Fed turned hawkish with its aggressive rate hikes.

    Since then, inflation seemed to have softened, pushing the dollar down. But in recent weeks, as a slew of economic data has shown the Fed’s inflation battle is far from over, the currency soared by about 4% from its recent lows, and now sits near a seven-week high.

    Investors are stressing about this sudden rebound, since a stronger dollar means American-made products become more expensive for foreign buyers, overseas revenue decreases in value and global trade weakens.

    Multinational companies, naturally, aren’t thrilled about any of this. And around 30% of all S&P 500 companies’ revenue is earned in markets outside the US, said Quincy Krosby, chief global strategist for LPL Financial.

    What’s happening: The US dollar “finds itself at a significant crossroads yet again,” said Krosby. “While the Fed remains steadfastly data dependent, the dollar’s course as well remains focused on inflation and the Fed’s monetary response.”

    “The strong US dollar has been a headwind for international earnings and stock performance (for US investors),” wrote Wells Fargo analysts in a recent note.

    February was a rough month for markets: The Dow ended February down 4.19%, the S&P 500 fell 2.6% and the Nasdaq lost just over 1%.

    What’s next: Investors are clearly focused on the next Fed policy meeting, which is still three weeks away, for signals about the direction of rates. But until then, investors may gain some insight Tuesday when Fed Chairman Jerome Powell speaks before the Senate Banking Committee.

    They’ll also be watching next Friday’s jobs report for any softening in the labor market that could temper the Fed’s hawkish mood.

    Don’t forget the debt ceiling: Another significant threat to the dollar is looming in Congress — the ongoing debt ceiling fight. The United States could start to default on its financial obligations over the summer or in the early fall if lawmakers don’t agree to raise the debt limit — its self-imposed borrowing limit — before then, according to a new analysis by the Bipartisan Policy Center.

    That could potentially lead to a disastrous downgrade to America’s credit rating and could send the dollar spiraling as investors start to sell off their US assets and move their money to safer currencies.

    “It would certainly undermine the role of the dollar as a reserve currency that is used in transactions all over the world. And Americans — many people — would lose their jobs and certainly their borrowing costs would rise,” Treasury Secretary Janet Yellen told CNN in January.

    ▸ A lot has changed in the last twenty years. The gender pay gap hasn’t.

    In 2022, US women on average earned about 82 cents for every dollar a man earned, according to a new Pew Research Center analysis of median hourly earnings of both full- and part-time workers.

    That’s a big leap from the 65 cents that women were earning in 1982. But it has barely moved from the 80 cents they were earning in 2002.

    “Higher education, a shift to higher-paying occupations and more labor market experience have helped women narrow the gender pay gap since 1982,” the Pew analysis noted. “But even as women have continued to outpace men in educational attainment, the pay gap has been stuck in a holding pattern since 2002, ranging from 80 to 85 cents to the dollar.”

    ▸ Initial jobless claims, which measures the number of people who filed for unemployment insurance for the first time last week, are due out at 8:30 a.m. ET on Thursday.

    This will be the last official jobs data investors see before February’s heavily anticipated unemployment report next Friday.

    Economists are expecting 195,000 Americans to have filed for unemployment, which is higher than the seasonally adjusted 192,000 who applied two weeks ago.

    Initial claims have come in lower than expected in recent weeks and remain well below their pre-pandemic levels.

    The white-hot labor market in the US added more than 500,000 jobs in January, blowing analysts’ expectations out of the water and bringing the unemployment rate to its lowest level since May of 1969.

    That’s bad news for the Federal Reserve where policymakers have been attempting to tame inflation by cooling the economy through painful interest rate hikes.

    ▸ It’s a big day for groceries. Kroger (KR), Costco (COST) and Anheuser-Busch (BUD) all report earnings on Thursday.

    Investors will be watching closely for clues about consumer sentiment during an uncertain retail earnings season. On Tuesday, Kohl’s reported that it had a rough holiday season and executives at the company put the blame on inflation. The company said higher prices squeezed sales and forced it to mark down some products to entice shoppers — which hurt its profit margin.

    Those comments echoed those of other big box retailers like Walmart (WMT) and Target (TGT), who have said consumers are feeling the pinch of inflation.

    Still, Target and Walmart’s bottom lines were bolstered by food sales even as consumers pulled back on discretionary purchases.

    The US Senate voted on Wednesday to overturn a Biden administration retirement investment rule that allows managers of retirement funds to consider the impact of climate change and other ESG factors when picking investments.

    As my CNN colleagues Ali Zaslav, Clare Foran and Ted Barrett write: The rule is not mandated – it allows, but does not require, the consideration of environmental, social and governance factors in investment selection.

    Republicans complained that the rule is a “woke” policy that pushes a liberal agenda on Americans and will hurt retirees’ bottom lines.

    “This rule isn’t about saying the left or the right take on a given environmental, social, or governance issue is ‘correct,’” countered Senator Patty Murray (D-WA) on the Senate floor Wednesday. “It’s about acknowledging these factors are reasonable for asset managers to consider.”

    The measure will next go to President Joe Biden’s desk as it was passed by the House on Tuesday. The administration, however, has issued a veto threat. As a result, passage of the resolution could pave the way for Biden to issue the first veto of his presidency.

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  • US intelligence community cannot link ‘Havana Syndrome’ cases to a foreign adversary | CNN Politics

    US intelligence community cannot link ‘Havana Syndrome’ cases to a foreign adversary | CNN Politics

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    CNN
     — 

    The US intelligence community cannot link any cases of the mysterious ailment known as “Havana Syndrome” to a foreign adversary, ruling it unlikely that the unexplained illness was the result of a targeted campaign by an enemy of the US, according to a US intelligence assessment published on Wednesday.

    The latest conclusion comes years after the so-called syndrome first emerged and defies a theory that it could have been the result of a targeted campaign by an enemy of the US.

    The new assessment echoes an interim report from the CIA last year that found it unlikely that the “anomalous health incidents,” as they are formally known, were the caused by “a sustained worldwide campaign” by Russia or any other foreign actor.

    Wednesday’s assessment also goes further in finding that there is no credible evidence that a foreign adversary has a weapon or collection device that is capable of causing the mysterious incidents, US intelligence officials said.

    Officials also explained that the medical analysis has also evolved in a way that points away from adversarial involvement.

    “I can share with you that most IC agencies have now concluded that it is ‘very unlikely’ a foreign adversary is responsible for the reported AHIs. IC agencies have varying confidence levels because we still have gaps given the challenges collecting on foreign adversaries – as we do on many issues involving them,” said Director of National Intelligence Avril Haines.

    The mysterious illness first emerged in late 2016, when a cluster of diplomats stationed in the Cuban capital of Havana began reporting symptoms consistent with head trauma, including dizziness and extreme headaches. In subsequent years, there have been cases reported around the world, including clusters of at least 60 incidents in Bogota, Colombia and Vienna, Austria. There have been about 1,500 reported cases across the US government in 96 different counties including some cases reported this year, officials said Wednesday, but the number of reported incidents has dropped significantly in the last year.

    The assessment, the result of the work of seven intelligence agencies, draws on the immense resources of the US intelligence community, including a review of hundreds of incidents and a wide range of factors surrounding them, officials explained.

    Wednesday’s assessment, however, does not provide definitive answers on or what caused the ailment that has sickened hundreds of US government personnel and family members worldwide.

    There is no one explanation for these incidents. Instead, there are many different possible causes including environmental as well as social factors and preexisting medical conditions, officials said.

    The assessment is likely to lead to further frustration among those impacted who have chastised the US government for not taking the condition seriously enough or slow-rolling the investigation.

    “There is something counterintuitive to all of this. If doctors are diagnosing some of us with a qualified injury to the brain in the line of duty and we are not saying it was a foreign adversary, what was it from?” said one former CIA agency officer who experienced symptoms.

    The intelligence community workforce was notified of the assessment on Wednesday, officials said. Sufferers were notified in recent days that the assessment was coming and some received a call from CIA Director Bill Burns, one source said.

    In a statement, Burns said the assessment is “one of the largest and most intensive investigations in the Agency’s history,” stating that it “reflects more than two years of rigorous, painstaking collection, investigative work, and analysis by IC agencies, including CIA.”

    “I want to be absolutely clear: these findings do not call into question the experiences and real health issues that US Government personnel and their family members – including CIA’s own officers – have reported while serving our country,” he said.

    The investigative efforts were “extremely aggressive” and involved “a high degree of risk,” one official explained. Intelligence officers vigorously studied what happened in the hours, days and weeks surrounding the incidents, the official explained.

    In some instances they found malfunctioning HVAC systems, which can cause discomfort to humans, and in other cases there were computer mice that created surprising disruptions.

    “We weren’t finding what we expected to find,” said one of the US officials. “There is no one explanation for any of this.”

    There was also criminal activity that occurred around some of the incidents – such as the presence of weapons dealers. But when intelligence officials chased those leads – by looking into the criminals’ past, their family and their travels – they found no connection to the mysterious health incidents.

    Officials even considered extraterrestrials as a cause, but found no linkage, they said.

    Officials said that evidence pointed against foreign involvement, including citing “confusion” on the topic among key adversaries.

    On the whole, officials did not find evidence to validate one of their incoming assumptions that one or more state actor was causing the incidents, they explained.

    There is nothing to indicate that these incidents were the result of an insider attack, the officials said. The officials would not discuss if the US has a weapon that could have caused these incidents.

    The findings also follow a report from a panel of experts last year – including scientists inside and outside of government – that found that “pulsed electromagnetic energy” emitted by an external source could have “plausibly” caused the mysterious incidents. While the latest intelligence assessment doesn’t count out that possibility completely, it appears to cast doubt on it by concluding that no US adversary has the plausible weapon or mechanism that would be needed for that to happen.

    US officials said that one of the lessons learned from the investigation was that the US government needs to do a better job looking after the health and safety of the workforce.

    Over the last year, the CIA and the State Department began providing compensation to victims whose symptoms required at least a year of medical assistance. Compensation efforts are “separate and distinct” from the intelligence assessment and will continue to be implemented, officials said.

    Following the release of the assessment, administration officials were clear that support would continue.

    “We are going to continue to see to it that our colleagues who report these incidents are treated with respect and compassion, receive timely access to medical care and we’ll continue to process Havana Act payments based on the eligibility criteria that’s been spelled out in the law,” State Department spokesperson Ned Price said.

    However, the future of the US government’s probe into these incidents is a bit murky.

    Officials would not definitively say if the intelligence community’s task force devoted to this effort would stay up and running, but Haines said that the work “will and must endure.” The Pentagon also has a team of experts that continues to investigate the matter.

    This story has been updated with additional information.

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  • FAA is investigating a close call between 2 aircraft at Boston Logan | CNN

    FAA is investigating a close call between 2 aircraft at Boston Logan | CNN

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    CNN
     — 

    Air traffic controllers stopped a departing private jet from running into a JetBlue flight as it was coming in to land Monday night in Boston, according to the Federal Aviation Administration.

    The FAA says it is investigating the incident. This is the fifth close call involving a commercial airliner on a runway this year.

    The two planes involved in Monday night’s apparent close call at Boston Logan International Airport came within 565 feet (172 meters) of colliding, according to Flightradar24’s preliminary review of its data.

    Asked for comment on the Flightradar24 analysis, the agency told CNN, “The FAA will determine the closest proximity between the two aircraft as part of the investigation.”

    “According to a preliminary review, the pilot of a Learjet 60 took off without clearance while JetBlue Flight 206 was preparing to land on an intersecting runway,” the FAA said in a statement on Tuesday.

    “JetBlue 206, go around,” said the controller in Boston Logan’s tower, according to recordings archived by LiveATC.net.

    The FAA says its air traffic controller told the crew of the Learjet to “line up and wait” on Runway 9 as the JetBlue Embraer 190 approached the intersecting Runway 4 Right.

    “The Learjet pilot read back the instructions clearly but began a takeoff roll instead,” the FAA said in a statement. “The pilot of the JetBlue aircraft took evasive action and initiated a climb-out as the Learjet crossed the intersection.”

    The National Transportation Safety Board tells CNN it has not launched an investigation into the incident at Boston Logan, though it has investigated four other runway incursions involving commercial airliners at major US airports this year.

    On Friday, the agency announced it was investigating a possible “runway incursion” in Burbank, California, involving Mesa and SkyWest regional airliners.

    Three other incidents have occurred at Honolulu, Austin and New York’s JFK airport this year.

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  • Ohio toxic train disaster leads to more concerns in other states while scientists say chemical tests in East Palestine are unusually high | CNN

    Ohio toxic train disaster leads to more concerns in other states while scientists say chemical tests in East Palestine are unusually high | CNN

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    CNN
     — 

    The aftermath of the toxic train wreck in Ohio keeps spreading to more states as scientists say tests in East Palestine unusually high levels of some chemicals.

    Indiana Gov. Eric Holcomb is the latest out-of-state official to say he was stunned to learn hazardous waste from the Norfolk Southern train derailment and subsequent release of toxic chemicals was headed to his state.

    “After learning third-hand that materials may be transported to our state yesterday, I directed my environmental director to reach out” to the US Environmental Protection Agency, Holcomb said in a written statement Tuesday.

    “The materials should go to the nearest facilities, not moved from the far eastern side of Ohio to the far western side of Indiana,” Holcomb said. “I want to know exactly what precautions will be taken in the transport and disposition of the materials.”

    After surprise shipments of hazardous waste to Texas and Michigan, the EPA approved two sites in Ohio to handle safe disposal of the waste.

    Another two sites – Heritage Environmental Services’ hazardous waste landfill in Roachdale, Indiana, and Ross Incineration Services in Grafton, Ohio – will receive contaminated waste starting Tuesday, EPA Region 5 Administrator Debra Shore said Monday. She said Indiana officials and state partners were notified before the EPA approved “the shipment of any waste from the derailment to their state or district.”

    But US EPA Administrator Michael Regan said the agency is developing measures to give authorities a “heads up” about incoming waste shipments and to keep Norfolk Southern accountable for the material it is moving.

    On the other side of Ohio, the Pennsylvania Department of Health is opening a health resource center in Beaver County so residents “can talk to public health experts, sign up to have their well water tested, and learn about available resources from professionals there to help,” Gov. Josh Shapiro tweeted Tuesday.

    Beaver County is just across the state border from East Palestine, Ohio – a village of 5,000 struggling to understand the full breadth of consequences from the February 3 toxic train wreck that burned for days and led to the release of the dangerous chemical vinyl chloride.

    A new data analysis suggests nine out of the dozens of chemicals that the EPA has been monitoring are higher than what normally would be found in East Palestine, according to scientists from Texas A&M and Carnegie Mellon universities.

    If the levels of some chemicals remain high, it could pose a problem for residents’ health over time, the scientists said. Temperature changes or high winds might stir up the chemicals and release them into the atmosphere.

    The chemical with the highest concentration found in East Palestine was a substance called acrolein, the data analysis said.

    Acrolein is used to control plants, algae, rodents and microorganisms. It is a clear liquid at room temperature and is toxic. It can cause inflammation and irritation of the skin, respiratory tract and mucous membranes, according to the US Centers for Disease Control and Prevention.

    “It’s not elevated to the point where it’s necessarily like an immediate ‘evacuate the building’ health concern,” said Albert Presto, an associate research professor of mechanical engineering at Carnegie Mellon’s Wilton E. Scott Institute for Energy Innovation, who is working on the university’s chemical monitoring effort in East Palestine.

    “But, you know, we don’t know necessarily what the long-term risk is or how long that concentration that causes that risk will persist.”

    Some East Palestine residents have reported rashes, headaches, nausea and bloody noses since the derailment and the February 6 controlled release and burning of vinyl chloride.

    During his third visit to the town Tuesday, the EPA chief said ongoing tests of the air and municipal water show both are safe – but urged anyone who is feeling “any kind of adverse health impacts” to seek medical attention.

    Regan returned to East Palestine to mark the opening of the “EPA’s community welcome center,” which will be open daily so “residents and business owners can stop in to get their questions answered, sign up for home air monitoring, and learn more about cleaning services.”

    “We’ve been testing the air from the very beginning, and the state has been testing the water,” Regan said.

    “Every chemical that was on that train and every byproduct from those chemicals have been tested or are part of our testing regimen,” he said. “So we believe firmly that our testing regimen is protective.”

    Still, the EPA is offering cleaning services – which will be reimbursed by Norfolk Southern – to any concerned resident in East Palestine.

    “There have been many residents here who have indicated that they worry about some residual, or some dust or some particles,” Regan said. “While we don’t believe that there are any adverse health impacts in homes or businesses as it relates to the derailment, this is an additional step we’re taking to alleviate concern and lower the angst.”

    Ohio officials have said East Palestine’s municipal water supply is safe to drink, citing multiple tests and the fact that the municipal water comes from five wells encased in steel deep underground.

    But health officials warn those using private well water should get it tested before using it. The Columbiana County Health District is posting test results online.

    Across the border in Pennsylvania, the state Department of Environmental Protection has collected samples from “nearly every private well” in the state within one mile of the derailment site, the governor said.

    The goal is to independently verify the safety of the water in Pennsylvania, Shapiro said.

    He reiterated that “Norfolk Southern will pay for the entire cost of the clean up,” including reimbursing Pennsylvania county fire departments for “equipment that was damaged or contaminated while responding to the derailment.”

    US Transporation Secretary Pete Buttigieg has called for Norfolk Southern and the rest of the freight rail industry to take a number of immediate actions, including committing to phase in safer tank cars by 2025.

    The Department of Transportation also wants Congress to take up legislation that would increase the maximum fines the DOT can issue to rail companies for violating safety regulations, Buttigieg said.

    He also called on the CEOs of major freight rail companies to “join a close-call reporting system that protects whistleblowers who spot issues that could lead to accidents,” Buttigieg told CNN on Tuesday.

    “We’re focusing on lessons learned when it comes to rail safety.”

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  • High levels of chemicals could pose long-term risks at Ohio train derailment site, researchers say | CNN

    High levels of chemicals could pose long-term risks at Ohio train derailment site, researchers say | CNN

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    CNN
     — 

    An analysis of data from the US Environmental Protection Agency’s measurements of pollutants released from the Norfolk Southern train derailment in East Palestine, Ohio, suggests that nine of the dozens of chemicals that the EPA has been monitoring are higher than would normally be found in the area, according to a group of scientists from Texas A&M and Carnegie Mellon University.

    If the levels of some of these chemicals remain high, it could be a problem for residents’ health in the long term, the scientists say. Temperature changes or high winds might stir up the chemicals and release them into the atmosphere.

    The highest levels found in East Palestine were of a chemical called acrolein, the analysis says.

    Acrolein is used to control plants, algae, rodents and microorganisms. It is a clear liquid at room temperature, and it is toxic. It can cause inflammation and irritation of the skin, respiratory tract and mucous membranes, according to the US Centers for Disease Control and Prevention.

    “It’s not elevated to the point where it’s necessarily like an immediate ‘evacuate the building’ health concern,” said Dr. Albert Presto, an associate research professor of mechanical engineering at Carnegie Mellon’s Wilton E. Scott Institute for Energy Innovation, who is working on the university’s chemical monitoring effort in East Palestine. “But, you know, we don’t know necessarily what the long-term risk is or how long that concentration that causes that risk will persist.”

    Much of what scientists know about chemical exposure comes from people’s contact with chemicals at work, Preston said, which generally means exposure for about eight hours a day. People now living in East Palestine are in constant contact with the chemicals, he said, and the impact of that kind of exposure on the human body is not fully understood.

    The EPA and local government officials have repeatedly said that their tests show the air quality in the area is safe and that the chemicals should dissipate. As of Sunday, officials have tested air in 578 homes, and they say chemical pollution levels have not exceeded residential air quality standards.

    EPA’s air monitoring data shows that levels of monitored chemicals “are below levels of concern for adverse health impacts from short-term exposures,” an agency spokesperson told CNN on Monday. “The long-term risks referenced by this analysis assume a lifetime of exposure, which is constant exposure over approximately 70 years. EPA does not anticipate levels of these chemicals will stay high for anywhere near that. We are committed to staying in East Palestine and will continue to monitor the air inside and outside of homes to ensure that these levels remain safe over time.”

    However, residents have reported rashes and trouble breathing, sometimes even in their own homes, Presto said.

    “When someone says to them then, ‘everything is fine everywhere,’ if I were that person, I wouldn’t believe that statement,” he said.

    So who’s right? The scientists say it’s not a black-and-white issue.

    “I think it’s important for the public to understand that all sides are right. No one’s lying to them,” said Dr. Ivan Rusyn, director of the Texas A&M University Superfund Research Center and part of the team that did the analysis. “It’s just that every time you’re sharing information, whether it’s Administrator of EPA Michael Regan or Governor [Mike] DeWine or someone from Ohio EPA, when they say certain things are ‘safe,’ they really need to explain what they mean.”

    Rusyn says the EPA and local officials need to do a better job of communicating with the public about the risk to residents when they are exposed to chemicals released in the crash.

    Communication struggles have been a consistent pattern over the years and over numerous environmental disasters, he said. Officials will often do a good job of collecting and releasing data but then fail to give the proper context that the public will understand.

    “That’s what I would like to encourage all parties to do rather than to point fingers,” Rusyn said. “The general public has to trust authorities. Cleanup is continuing. They are doing monitoring. We just need to do a better job communicating the results.”

    Government communication about residents’ real level of risk has been a significant source of frustration in East Palestine, Presto said.

    “People are furious. They feel like they’re getting this black-and-white answer – things are safe or not safe – when it’s not a black-and-white sort of situation,” Presto said.

    The EPA says it will continue to monitor the air quality in the area and in residents’ homes. It is also setting up a community center so residents and business owners can ask questions about agency activity there.

    The agency said it is collecting outdoor air samples for contaminants of concern, including vinyl chloride, a hard plastic resin used to make plastic products like pipes or packaging material that can be a cancer concern; n-butyl acrylate a clear liquid used to make resins and paint products that can cause eye, throat, nose and lung irritation or damage as well as a skin allergy; and ethylhexyl acrylate, another colorless liquid used to make paints, plastics and adhesives that can cause skin and eye irritation.

    The EPA also collected field measurements for hydrogen sulfide, benzene, hydrogen cyanide, hydrogen chloride, phosgene and particulate matter.

    Scientists from Texas A&M and Carnegie Mellon are monitoring the chemicals in the area using a mobile lab that they’ve used for the past decade to measure air pollution in real time in cities across the country. They expect to release data from their own tests in East Palestine on Tuesday.

    The mobile lab has extremely sensitive equipment that can measure pollution in the parts per trillion. Scientists would then be able to plot them on a graph to show, in real time, where the concentrations of chemicals may be and at what level, Presto said.

    Mobile lab workers will try to determine whether there are chemicals in the air that the EPA isn’t monitoring. They are also looking at pollution levels in places where the agency did not set up monitoring stations.

    “The situation has to be monitored, and the EPA should continue measurements, and they should also communicate to the general public as to what they’re seeing and put this into context of risk, rather than use the numbers and expect people to figure it out for themselves,” Rusyn said.

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  • As crews remove contaminated soil and liquid from Ohio toxic train wreck site, concerns emerge about where it’s going | CNN

    As crews remove contaminated soil and liquid from Ohio toxic train wreck site, concerns emerge about where it’s going | CNN

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    CNN
     — 

    After a brief pause, shipments of contaminated liquid and soil from the toxic train derailment in East Palestine, Ohio, have resumed after cross-country concerns about where the hazardous waste is going.

    Officials with the Environmental Protection Agency previously said they have approved the shipment of contaminated waste to two EPA-certified sites in Ohio: Heritage Thermal Services in East Liverpool and Vickery Environmental in Vickery. Region 5 Administrator Debra Shore said Monday two more sites – one in Ohio and one in Indiana – will also receive waste from the derailment scene.

    The move came after officials in Texas and Michigan complained they didn’t get any warning that waste from the toxic crash site would be shipped to their states for disposal. The EPA ordered the train’s operator, Norfolk Southern, to stop the shipments Friday so that it could review the company’s disposal plans.

    Shore said she spoke with officials from Ohio and Indiana on Monday regarding the shipment of hazardous waste material to their towns.

    Questions about the disposal of toxic waste from the February 3 derailment have added to the controversy surrounding the crash that has also left residents of the town worried about potential long-term health effects.

    The mayor of East Liverpool, one of the Ohio towns set to incinerate the waste, expressed concerns about the process but said the EPA has assured him that everyone has been following necessary guidelines.

    “We have a 2-year-old daughter and of course that’s a concern,” Mayor Gregory T. Bricker said. “But, again, I think this is a state-of-the-art facility that can handle this type of waste.”

    So far, about 1.8 million gallons of liquid waste and 4,832 cubic yards of solid waste have been pulled from the derailment site, according to the office of Ohio Gov. Mike DeWine.

    EPA Administrator Michael Regan is expected to make his third trip to East Palestine on Tuesday to mark the grand opening of a new community center, Shore said.

    US Transportation Secretary Pete Buttigieg has given Norfolk Southern and other major rail companies a deadline of this week to say whether they will participate in the Confidential Close Call Reporting System – a voluntary program that allows workers to report safety hazards.

    “This common-sense program encourages employees to report safety hazards, including conditions that could lead to derailments, by protecting these workers from reprisal when they come forward,” Buttigieg wrote in a Monday letter to Norfolk Southern CEO Alan Shaw.

    The transportation secretary said “not one major freight rail company participates” in the Confidential Close Call Reporting System, also known as C3RS.

    “By refusing to take this commonsense step, you are sending an undesirable message about your level of commitment to the safety of your workers and the American communities where you operate,” Buttigieg wrote.

    “I am asking you to join the C3RS program now, even as our Department proceeds to take appropriate steps toward making this program mandatory.”

    Buttigieg first called for the change in a letter to railroads dated February 14, but is now going directly to rail CEOs and asking them to reply to the Department of Transportation “by the end of the week.”

    After that, Buttigieg said, he will “present the public with a summary of which companies have agreed to this important safety measure and which have refused.”

    The hazardous waste that has already been sent to Michigan and Texas is being processed, EPA regional administrator Debra Shore said Sunday.

    About 2 million gallons of firefighting water from the train derailment site were expected to be disposed in Harris County, Texas, with about half a million gallons already there, the county’s chief executive said last week.

    In Michigan, contaminated soil from the derailment site was taken to the US Ecology Wayne Disposal in Belleville, Michigan, US Rep. Debbie Dingell of Michigan said.

    Vickery Environmental will process overflow water from the crash scene, according to the Sandusky County Emergency Management Agency.

    The agency didn’t comment on how much water the facility has received so far, saying only that it has been receiving three to four loads per day, but according to Ohio officials, more than 94,000 gallons have been disposed of at the facility so far.

    Until Friday, Norfolk Southern had been “solely responsible” for disposing of waste from the train derailment, but waste disposal plans “will be subject to federal EPA review and approval moving forward,” Shore said.

    Every aspect of transporting and disposing of the hazardous waste “from the moment trucks and rail cars are loaded until the waste is safely disposed of” will be closely regulated and overseen by federal, state, and local governments, Shore said Sunday.

    After speaking to residents in East Palestine, Shore said “we owe it to the people of East Palestine to move it out of the community as quickly as possible.”

    “At the same time,” Shore added, “I know there are folks in other states who have concerns, legitimate concerns, about how this waste is being transported and how it will be disposed of. EPA will continue to work with our local, state, and federal partners to use our longstanding experience and expertise in these matters to ensure the health and safety, and support the East Palestine community and to hold Norfolk Southern accountable.”

    The fiery derailment and subsequent intentional release of vinyl chloride from train cars left East Palestine residents with anxiety about the safety of their air and water. Some have reported rashes, headaches, nausea and bloody noses.

    So far, tests of East Palestine’s public drinking have found “no indication of risk to East Palestine public water system customers” and “treated drinking water shows no detection of contaminants associated with the derailment,” the EPA said in a Sunday update.

    And air quality tests inside 578 East Palestine homes detected no contaminants linked to the derailment, the EPA said.

    But residents are still concerned, and federal teams are going door-to-door to conduct health surveys and provide informational flyers after President Joe Biden directed the move, a White House official told CNN.

    And new wells will be drilled this week “to determine if ground water immediately below the derailment site is contaminated,” DeWine’s office announced Sunday.

    Four wells have already been installed and up to three more will be drilled this week after the soil under the rails is completely excavated, officials said.

    “These monitoring wells will also support a better understanding of the direction and rate of the ground water flow in the area,” DeWine’s office said.

    As for the wreckage, all rail cars except the 11 held by investigators have been removed from the site of the derailment, Ohio Environmental Protection Agency Director Anne Vogel said Sunday.

    “This is so critically important to moving on to next steps. We can now excavate additional contaminated soil and began installing monitoring wells,” Vogel said.

    The Ohio EPA will oversee the installation of water monitoring wells at the site of the derailment that will measure contaminant levels in the groundwater below.

    While the crash was “100% preventable,” it appears the train’s crew didn’t do anything wrong leading up to the derailment, said Jennifer Homendy, chair of the National Transportation Safety Board.

    An NTSB preliminary report found one of the train’s cars carrying plastic pellets was heated by a hot axle that sparked the initial fire, Homendy said last week. Video of the train before the crash showed what appeared to be an overheated wheel bearing, the report said.

    What caused the wheel bearing failure will be key to the investigation, Homendy added.

    The investigation will also look into the train’s wheelset and the bearing, the designs of tank cars and railcars, the maintenance procedures and practices, as well as the damage from the derailment, the NTSB report said.

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  • House GOP committees plot investigations into East Palestine derailment | CNN Politics

    House GOP committees plot investigations into East Palestine derailment | CNN Politics

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    CNN
     — 

    A series of House Republican committees are plotting to launch investigations into the toxic train disaster in East Palestine, Ohio, multiple committee aides told CNN.

    GOP lawmakers are vowing to use their oversight power to dig into what they describe as the Biden administration’s flawed response to the train wreck, which has left East Palestine’s residents afraid to use the city’s air and municipal water after a train carrying toxic chemicals derailed on February 3.

    They have also left the door open to holding hearings on the subject, including potentially bringing in Environmental Protection Agency Administrator Michael Regan and Transportation Secretary Pete Buttigieg to testify publicly, the aides said, though such decisions have not yet been made.

    The GOP’s increased urgency for oversight comes as several lawmakers have criticized President Joe Biden for not visiting East Palestine. Biden told reporters on Friday he has no plans to travel to the site of the derailment and defended his administration’s response to the wreck.

    The House committees on Transportation and Infrastructure, Energy and Commerce and Oversight are among the panels vowing to find answers to what happened, as well as hold the Biden administration and rail industry accountable for the fallout.

    Some GOP members of the committees are also discussing a potential field hearing in East Palestine, though no official plans have been made yet, sources familiar with the talks tell CNN.

    Axios first reported on the committees’ plans.

    The Energy and Commerce Committee has asked the EPA to appear before the panel’s Environment, Manufacturing & Critical Materials subcommittee chaired by GOP Rep. Bill Johnson, who represents East Palestine, a committee aide told CNN.

    Johnson and Energy and Commerce Chair Cathy McMorris Rodgers, a Washington state Republican, formally kicked off their probe on February 17, when they sent a letter to Regan demanding answers on a timeline of events relating to the train wreck, a list of the chemicals on board, materials relating to the EPA’s and local agencies’ response, as well as other information regarding the derailment.

    Johnson and McMorris Rodgers gave the EPA until March 3 to respond to their request.

    The Energy and Commerce Committee has asked for an all-members briefing, a committee briefing, as well as a hearing date from EPA officials. A source familiar told CNN they are still awaiting a response.

    The Transportation and Infrastructure Committee plans to “keep Members informed as facts come out,” committee spokesman Justin Harclerode told CNN. The committee is also closely watching the National Transportation Safety Board’s investigation into the incident.

    “The important thing is to learn exactly what happened, what factors played a role in the accident, and what factors did not. The Committee is staying engaged on this issue, but no one should jump to any conclusions or act without all the facts. Which is exactly what the NTSB is working to provide through their investigation,” Harclerode said.

    House Oversight Chairman James Comer, meanwhile, sent a letter to Buttigieg on Friday, in which he called the incident “an environmental and public health emergency that now threatens Americans across state lines.” The Kentucky Republican requested that Buttigieg turn over a series of documents relating to the derailment, including when the administration first learned of the incident and communications regarding the Pipeline and Hazardous Materials Safety Administration’s handling of materials in the derailment.

    “At this time, Chairman Comer is focused on acquiring the documents and information requested in his February 24 letter to Secretary Buttigieg,” Comer spokesman Austin Hacker told CNN.

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  • Economists’ crystal balls are growing cloudier. But they still expect a recession | CNN Business

    Economists’ crystal balls are growing cloudier. But they still expect a recession | CNN Business

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    Minneapolis
    CNN
     — 

    The US economy is confusing: Jobs are surging. Inflation has been cooling but still running relatively hot. Gas prices are on the rebound. Consumers keep spending, and their confidence is growing. But holiday sales were tepid. Corporate layoffs are mounting. Company earnings aren’t stellar. And mortgage rates are ticking higher.

    In a time when the economic data has delivered mixed messages or flat out busted expectations, economists’ predictions for the year ahead are growing increasingly opaque.

    The National Association for Business Economics’ latest survey, released Monday, shows a “significant divergence” among respondents about where they think the US economy is heading in 2023, the organization’s president said.

    “Estimates of inflation-adjusted gross domestic product or real GDP, inflation, labor market indicators, and interest rates are all widely diffused, likely reflecting a variety of opinions on the fate of the economy — ranging from recession to soft landing to robust growth,” Julia Coronado, NABE’s president, said in a statement.

    Nearly 60% of survey respondents said they believe the US had a more than 50% shot of entering a recession in the next 12 months.

    When such a recession would start was another matter: 28% said first quarter, 33% said second quarter, and 21% said third quarter.

    As the Federal Reserve’s battle against high inflation continues to loom large, economists anticipate that key inflation gauges will slow this year, landing around 2.7% to 3% in 2023 and inching closer to the 2% target by 2024.

    Creating some uncertainty among economists, however, is what the Fed might do during that time as well as the potential effect from external factors.

    “Panelists’ views are split regarding how high the Federal Reserve may raise interest rates, how long rates might stay at the peak, when cuts would begin, and what would signal the central bank’s actions on each of these fronts,” Dana M. Peterson, NABE Outlook Survey chair, and chief economist at the Conference Board, said in the report. “Respondents are also highly concerned but divided in their opinions regarding the consequences of other matters that might affect the US economy, including the impact of China’s reopening on global inflation and the looming debt ceiling.”

    In terms of the labor market, which remains strong and tight, panelists’ median projections for monthly payroll growth this year was 102,000, a significant upward revision from projections in December for 76,000 jobs per month.

    NABE economists said they expect unemployment to increase, but the majority doubt it’ll exceed 5%.

    On the housing front, they expect home prices and new home construction to continue to fall this year, projecting that housing starts could see their largest decline since 2009.

    But they don’t anticipate the downturn to swing into “bust” territory. A mere 2% of respondents said that a “housing market bust” was the greatest downside risk to the US economy in 2023.

    Instead 51% of respondents said the biggest downside risk was too much monetary tightening. Trailing far behind in second was the broadening of war in Ukraine, with 12%.

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