ReportWire

Tag: us government independent agencies

  • America capped off an extraordinary year for job growth, adding 223,000 positions in December | CNN Business

    America capped off an extraordinary year for job growth, adding 223,000 positions in December | CNN Business

    [ad_1]


    Minneapolis
    CNN
     — 

    The US economy added 223,000 jobs in December, according to the monthly employment report from the Bureau of Labor Statistics, capping a year of extraordinary job growth and marking the second-best year for the labor market in records that go back to 1939.

    The unemployment rate fell back to a record low of 3.5% from a revised 3.6% in November.

    Economists were expecting 200,000 job gains for the last month of the year, according to Refinitiv. December’s job total is lower than the downwardly revised 256,000 jobs added in November.

    Including last month’s gains, which are subject to revision, the economy added about 4.5 million jobs in 2022. That’s the second-highest-ever total, after the 6.7 million jobs added in 2021 — a boomerang from 2020’s 9.3 million job losses.

    The labor market slowed in 2022, compared to the previous year’s tear. December’s jobs total represents the lowest monthly gains in two years.

    Those latest gains come following months of jumbo interest rate increases from the Federal Reserve in its attempt to cool off the economy after inflation last year hit its highest level since the 1980s. Those efforts have, so far, remained mostly elusive.

    That means the Fed is entering 2023 looking for a considerably softer and looser labor market — notably, increased labor participation, a better alignment of job seekers to open positions, and lower levels of wage growth.

    “This is about the best report one could hope for, given a still very hot US labor market,” said Joe Brusuelas, principal and chief economist for RSM US.

    Wall Street responded positively to Friday’s jobs data, with the Dow rising by almost 500 points by mid-morning — mostly a reaction to the slower pace of wage growth. Average hourly earnings increased 0.3% over the previous month and 4.6% annually. That’s compared to 0.4% month-on-month growth in November and 4.8% annual growth.

    The December report showed that the labor force participation rate, an estimation of the active workforce and people looking for work, ticked up to 62.3% from 62.2%.

    Labor force participation rates have been on a decline — largely due to demographic changes and aging Baby Boomers — since hitting a high of 67.3% in early 2000, and had fallen to 63.3% in the month before the onset of the pandemic. The participation rate has not returned to pre-pandemic levels, vexing economists and the Fed, while also contributing to an imbalance of worker supply and demand.

    “The labor market is moving in the right direction for the Federal Reserve, according to the December employment report, but is not there yet,” Gus Faucher, senior economist for PNC Financial services said in a statement. “Job growth is slowing to a more sustainable pace, and wage growth is softening as demand in the job market slackens somewhat.”

    However, with job growth well above pre-pandemic levels, when job gains averaged 164,000 in 2019, and the unemployment rate returning to a 50-year low, there is little indication that there will be enough of a boost in the labor force to help cool off the job market, he said.

    Some of the largest monthly gains were in industries such as leisure and hospitality, health care, and accommodation and food services, which all were hit hard during the pandemic. There were also notable monthly job losses in technology and interest-rate-sensitive sectors that surged during the pandemic and are now rebalancing as consumers shift spending toward services.

    Industries such as information, finance and professional and business services, shed jobs between November and December.

    The losses seen in areas such as professional and business services are likely an effect of the waves of mass layoffs hitting the tech industry, said Ken Kim, a senior economist at KPMG.

    “We are seeing a little bit of spread to other areas,” he said.

    In addition to Friday’s strong jobs numbers, several other pieces of jobs data released this week continue to reflect a healthy labor market. Wednesday’s Job Openings and Labor Turnover Survey (JOLTS) report showed that the number of available jobs remained steady at 10.5 million in November. It also showed that quits, layoffs and hires didn’t really show any major signs of cooling that month.

    ADP’s private-sector employment report on Thursday also showed a robust labor market, with 235,000 jobs added in the private sector during December, well exceeding expectations of 150,000.

    And Thursday’s weekly jobless claims fell by 21,000 to 204,000 for the week ending November 26, while continuing claims decreased to 1.69 million from 1.72 million to 1.61 million.

    —CNN’s Matt Egan contributed to this report.

    [ad_2]

    Source link

  • Global markets struggle to put last year’s misery behind them | CNN Business

    Global markets struggle to put last year’s misery behind them | CNN Business

    [ad_1]


    London
    CNN
     — 

    European and Asian stocks pushed higher on the first major trading day of 2023 as investors try to look beyond a gloomy outlook for the world economy, China’s worst Covid outbreak and stubbornly high inflation in Europe.

    But after a positive start, Wall Street succumbed to fear again. The S&P 500 gained 0.4% in early trading Tuesday, while the Nasdaq Composite was up 0.8%. By midday, however, both indexes were trading weaker, down 0.3% and 1.2% respectively.

    Shares of Tesla

    (TSLA)     plunged more than 13% after the electric car giant reported weaker than expected global sales for the fourth quarter. Apple sank 3.8%, bringing its market cap to $2 trillion. An impressive number, for sure, but about $1 trillion less than its valuation at this time last year.

    Europe’s Stoxx 600 index rose 1.2% by 12.10 p.m. ET, off earlier highs but extending strong gains posted Monday when Chinese and US markets were closed. Germany’s DAX rose 0.8%, while France’s CAC gained 0.4%.

    US markets are waiting for the first major economic news of the year, due later this week. A key report on manufacturing, new data on labor market openings and the minutes from the latest Federal Reserve meeting are due out Wednesday. The jobs report for December will be released Friday.

    Investors in Europe were buoyed by survey data, released Monday, showing that supply chain and inflation pressures were easing slightly for manufacturers in the economies that use the euro currency.

    Shortages of parts in Germany, the biggest economy in Europe, have also abated, according to data released by the Institute for Economic Research (Ifo) on Tuesday. Inflation in the country continues to trend downwards. Data published Tuesday by the German Federal Statistics Office showed that consumer prices rose 8.6% in December, compared with 10% the previous month, and 10.4% in October.

    London’s FTSE 100 index clocked up gains of 2.3% in morning trading, before easing slightly to stand 1.4% higher.

    Holger Schmieding, chief economist at Berenberg bank, struck a cautiously optimistic note about the year ahead.

    “Unless a major new geopolitical shock intervenes, the new year could be far less unsettled than 2022. Especially for Europe, the outlook continues to become substantially less negative,” he wrote in note Tuesday.

    In Asia, markets ended the day firmly in positive territory, recovering from early losses.

    Hong Kong’s Hang Seng Index dropped by as much as 2% after a closely watched private survey showed China’s economy ended last year with a slump in factory activity. But the index soon reversed course to gain 1.8% by the close, as hopes for the reopening of the city’s border with mainland China on January 8 boosted stocks.

    Stocks in mainland China also had a choppy first-day trading. The Shanghai Composite opened lower, but then clawed back losses to close 0.9% higher.

    Tuesday’s market gains provide cheery news for investors after a rollercoaster 2022 that saw $33 trillion wiped off global equity markets.

    Many suffered deep losses in 2022 as central banks hiked interest rates at an unprecedented clip in a bid to control surging inflation.

    The S&P 500 lost 19.4% over the past 12 months — its worst year since 2008 — despite hitting an all-time high last January. Europe’s Stoxx 600 index fell 12.9%, its steepest annual loss since 2018. Hong Kong’s Hang Seng dropped 15.5%, its weakest performance since 2011.

    Predicting the state of markets is notoriously tricky — and often downright wrong — but it looks likely that many of last year’s economic headwinds will stick around, and some could get even worse.

    Kristalina Georgieva, head of the International Monetary Fund, warned in an interview with CBS that aired on Sunday that 2023 will be tougher on the global economy than 2022 was.

    Georgieva said that the world’s three biggest economies, the United States, the European Union and China, are all “slowing down simultaneously,” and the IMF expected “one third of the world economy to be in recession” this year.

    “Almost everyone is going into 2023 with a healthy dose of trepidation,” Craig Erlam, senior market analyst at Oanda, said in a Tuesday note.

    “The outlook is understandably gloomy and will remain so unless something significant changes, either on the war in Ukraine or inflation,” he added.

    Investors can expect the world’s central banks to continue hiking interest rates to tame historic levels of inflation, despite signs that price rises globally have started to cool, in part due to a drop in energy prices.

    Both the European Central Bank and US Federal Reserve have said they plan to continue to raise the cost of borrowing in the near term, a move that typically hurts companies’ profits — and their investors.

    China is also unpredictable. While investors are broadly happy that the country ditched its strict zero-Covid policy last month — promising to lift demand across the world’s second-biggest economy — rocketing numbers of cases and a potential contraction in the early part of 2023 could limit gains.

    — Paul LaMonica, Julia Horowitz and Laura He contributed reporting.

    [ad_2]

    Source link

  • Incoming Kansas attorney general fined for 2020 Senate campaign finance violations | CNN Politics

    Incoming Kansas attorney general fined for 2020 Senate campaign finance violations | CNN Politics

    [ad_1]



    CNN
     — 

    The Federal Election Commission has levied a $30,000 fine on incoming Kansas Attorney General Kris Kobach and a private border wall organization he was once affiliated with due to campaign finance violations committed during his unsuccessful 2020 Senate bid.

    In an agreement approved by the FEC last month, about a week after Kobach was elected, he admitted to illegally accepting an in-kind contribution from We Build the Wall, a Steve Bannon-linked group which ran a fundraising campaign to build a private border wall but became ensnarled in allegations of fraud.

    CNN has reached out to attorneys for Kobach and We Build the Wall for comment.

    In 2019, Kobach’s campaign rented We Build the Wall’s 295,000-person email list for just $2,000, a price significantly below the normal rate.

    The campaign was also accused of additional campaign finance violations in connection with We Build the Wall, but the FEC, which is made up of three Democrats and three Republicans, either dismissed those allegations or was equally divided.

    Kobach is an immigration hardliner and a longtime spreader of false election claims who served as Kansas’ secretary of state from 2011 to 2019 and has close ties to former President Donald Trump.

    Kobach was narrowly elected Kansas attorney general in November, defeating Democrat Chris Mann 51% to 49% in the reliably red state. His victory came after two consecutive defeats in recent election cycles – losing bids for the governorship in 2018 and for the GOP nomination for US Senate in 2020.

    He previously served on We Build the Wall’s board and as the organization’s general counsel.

    Two men have pleaded guilty in federal court, and another was convicted of defrauding donors in connection with We Build The Wall. Bannon and the organization itself are now facing charges in New York state. Bannon, who has pleaded not guilty to state charges, had previously been indicted in federal court but was pardoned by then-President Trump at the end of his term.

    [ad_2]

    Source link

  • Fed watch 2023: When will rate hikes slow down | CNN Business

    Fed watch 2023: When will rate hikes slow down | CNN Business

    [ad_1]


    Minneapolis
    CNN
     — 

    America’s central bank found itself in a glaring spotlight for much of this past year, as Federal Reserve Chairman Jerome Powell wielded blunt tools of interest rate hikes and quantitative tightening to curb surging inflation.

    As 2022 draws to a close, inflation metrics show some of that may have worked: Consumer prices are cooling, home sales have ground to a halt, and some of America’s best-known companies have made plans to slow their roll and pull back on capital investment.

    The latest measure of inflation showed that the Consumer Price Index for November came in at 7.1%, down from the 40-year high of 9.1% hit in June; prices for used cars, lumber and gas — once poster children for the painfully steep price hikes — have come down; and housing prices and rents have also been on a downward trajectory.

    “This idea of peak inflation, which people have been talking about for most of the year, is starting to look like it’s valid,” said Thomas Martin, senior portfolio manager at Globalt Investments. “It’s just how quickly does that come down?”

    In a matter of weeks, the Fed’s Act II gets underway.

    The Fed’s recently revised script calls for the federal funds rate, the central bank’s benchmark borrowing rate, to move higher, but at a slower pace than in the past several months.

    While the Fed has — finally — eked out some small victories in slowing the economy, after seven bumper rate hikes, the robust and historically tight labor market has remained a thorn in the central bank’s side. When the number of available jobs far outpaces those looking for work, wages can rise, which in turn could keep prices higher for longer.

    That means the Fed, with its “laser focus on the job market,” could be “continually hawkish” at the start of 2023, said Ross Mayfield, investment strategy analyst at Baird.

    There are already signs that the labor market is softening: Quits and hires have edged downward, while layoffs have moved higher; continuing claims have grown to their highest level since February; and the number of jobs added each month has started to nudge slowly lower.

    However, a “structural labor shortage” remains a major headwind, Powell noted in December, attributing the lack of workers to early retirements, caregiving needs, Covid illnesses and deaths, and a plunge in net immigration.

    As such, employers are hesitant to lay people off, and other areas of the economy are showing such strength that those who are unemployed are able to get rehired quickly, Mayfield said.

    “This latent strength in the job market could be the reason that the Fed over-tightens,” he told CNN. “The rest of the economy, to us, is very clearly signaling slowdown, imminent recession. And when you see the Fed revising their unemployment projections up, revising their GDP growth number down, it seems that they agree.”

    He added: “So, I would hope that they would take their own advice and pause fairly soon.”

    The December projections showed a more aggressive monetary policy tightening path, with the median forecast rising to a new interest rate peak of 5%-5.25%, up from 4.5%-4.75% in September. That would mean Fed officials expect to raise rates by half a percent more than they did three months ago, when the Fed’s economic predictions were last released.

    Jerome Powell, chairman of the US Federal Reserve, from right, Lael Brainard, vice chair of the board of governors for the Federal Reserve System, and John Williams, president and chief executive officer of the Federal Reserve Bank of New York, during a break at the Jackson Hole economic symposium in Moran, Wyoming, on Aug. 26, 2022.

    Policymakers also projected that PCE inflation, the Fed’s favored price gauge, would remain far above its 2% target until at least 2025. Further projections showed souring expectations for the health of the US economy, with Fed officials now predicting that unemployment will rise to 4.6% by the end of 2023 and remain at that level through 2024. That’s 0.2 percentage points higher than the 4.4% rate they were expecting in September and significantly higher than the current 3.7% rate.

    Based on projections from Fed officials and other economists, the pathway has narrowed for the desired “soft landing” of reining in inflation while avoiding recession or significant layoffs.

    “It’s been pretty impressive how well the consumer has held up over the past 18 months, and not pulling the rug out from under the consumer is pretty much how you get to the soft landing,” Mayfield said.

    “I think it’s a really, really narrow path, and the Fed’s tone [during its December meeting] doesn’t give me a lot of optimism that they can navigate that without hitting a recession. … If a soft landing is avoiding a recession altogether, then I think that’s a pretty tough task. If it’s a milder recession than recent history, I think that’s still in the cards.”

    The Federal Open Market Committee, the central bank’s policymaking arm, holds eight regularly scheduled meetings per year. Over the course of two days, the 12-member group looks through economic data, assesses financial conditions and evaluates monetary policy actions that are announced to the public following the conclusion of its meeting on the second day, along with a press conference led by Chair Powell.

    Below are the meetings tentatively scheduled for 2023. Those with asterisks indicate the meeting with a Summary of Economic Projections, which includes the chart colloquially known as the “dot plot” that shows where each Fed member expects interest rates to land in the future.

    • January 31-February 1
    • March 21-22*
    • May 2-3
    • June 13-14*
    • July 25-26
    • September 19-20*
    • October 31-November 1
    • December 12-13*

    — CNN’s Nicole Goodkind contributed to this report.

    [ad_2]

    Source link

  • Microsoft tells judges its $69 billion Activision deal would benefit gamers | CNN Business

    Microsoft tells judges its $69 billion Activision deal would benefit gamers | CNN Business

    [ad_1]

    Microsoft Corp said on Thursday its $69 billion bid to buy “Call of Duty” maker Activision Blizzard would benefit gamers and gaming companies alike.

    Microsoft

    (MSFT)     made the argument in a filing aimed at convincing a judge at the US Federal Trade Commission to allow the deal to proceed, after FTC commissioners said the merger would hamper competition in the gaming industry in a complaint this month aimed at blocking the deal.

    In a complaint on Dec. 8, the FTC said its concern was that Activision’s popular games, including “World of Warcraft” and “Diablo,” potentially would stop being offered on devices that rival Microsoft’s Xbox. It set a hearing before an administrative law judge for August 2023.

    Microsoft President Brad Smith said in mid-December the company had offered to sign a legally binding consent decree with the FTC to provide “Call of Duty” games to rivals including Sony and others for a decade.

    “The acquisition of a single game by the third-place console manufacturer cannot upend a highly competitive industry. That is particularly so when the manufacturer has made clear it will not withhold the game,” Microsoft said in Thursday’s filing.

    Smith said in a statement this week he was still confident in the company’s legal case but remained “committed to creative solutions with regulators.”

    Activision CEO Bobby Kotick said in a statement on Thursday he believes that the companies will prevail in a legal fight with the trade commission.

    The Biden administration has taken a more aggressive approach to antitrust enforcement. The US Department of Justice recently stopped a $2.2 billion merger of Penguin Random House, the world’s largest book publisher, and smaller US rival Simon & Schuster.

    The Microsoft deal is also facing scrutiny outside the United States, with the European Union saying it would decide by March 23, 2023, whether to clear or block the deal.

    [ad_2]

    Source link

  • Zuckerberg weighed naming Cambridge Analytica as a concern in 2017, months before data leak was revealed | CNN Business

    Zuckerberg weighed naming Cambridge Analytica as a concern in 2017, months before data leak was revealed | CNN Business

    [ad_1]



    CNN
     — 

    Mark Zuckerberg considered disclosing in 2017 that Facebook

    (FB)     was investigating “organizations like Cambridge Analytica” alongside Russian foreign intelligence actors as part of an election security assessment before ultimately removing the reference at his advisers’ suggestion, according to a 2019 deposition conducted by the Securities and Exchange Commission and reviewed by CNN.

    The omitted reference provides insight into Zuckerberg’s thinking on Cambridge Analytica in the critical months before press reports would reveal that the data analysis firm affiliated with Donald Trump’s 2016 presidential campaign had improperly gained access to tens of millions of Facebook users’ personal information. The data leak prompted a global outcry that led to hearings, an apology tour from Zuckerberg and Facebook’s $5 billion privacy settlement with the US government.

    The deposition transcript suggests that in 2017, Zuckerberg considered Cambridge Analytica a potential election concern on par with Russian election meddling efforts even though he said he did not know about the data leak first discovered by Facebook staffers in 2015. It also points to how Facebook staffers had opportunities to brief Zuckerberg on that leak, but chose not to, prior to reports about the incident that surfaced in 2018.

    Zuckerberg’s remarks in the deposition offer the clearest picture yet of what Zuckerberg knew about Cambridge Analytica, and when. The timeline of events has previously been scrutinized intensely by US lawmakers, state attorneys general and investors who have sued Facebook, now known as Meta, for allegedly breaching its fiduciary duties in connection with the data leak incident.

    Meta declined to comment on the release of the transcript, saying its case with the SEC involving the deposition had been settled for more than three years. The settlement in 2019 for $100 million resolved US government allegations that Facebook had misled investors for years after staffers first discovered the data leak.

    The SEC deposition transcript was released Tuesday by the Real Facebook Oversight Board, a watchdog group, that had obtained the document via a public records request. The transcript was first reported on Tuesday by Reuters, which had obtained the document through a separate records request.

    “This transcript reveals that something changed between January 2017 and September 2017 for Zuckerberg to deem Cambridge Analytica a threat commensurate with Russian Intelligence,” said Zamaan Qureshi, policy advisor at the Real Facebook Oversight Board. “But for reasons the Facebook CEO has still not disclosed, the world would only learn about Cambridge Analytica in March 2018.”

    In September 2017, Zuckerberg released a public statement about Facebook’s efforts to safeguard election integrity, saying the company would look into the impact that foreign actors, “Russian groups and other former Soviet states,” and “organizations like the campaigns” had on Facebook during the 2016 elections.

    But according to the court documents, Zuckerberg had originally proposed naming Russian foreign intelligence and Cambridge Analytica in the same breath.

    “We are already looking into foreign actors including Russian intelligence, actors in other former Soviet states and organizations like Cambridge Analytica,” Zuckerberg initially wrote, according to the draft the SEC produced in the deposition and that Zuckerberg testified was authentic.

    Zuckerberg testified that the reference to Cambridge Analytica was removed after a staffer recommended against naming specific organizations. “This was not something I think was particularly important to the overall communication,” he said, according to the transcript. “So I think when people raised this, I just took it out.”

    The testimony suggests he became aware of Cambridge Analytica around the same time as the general public, through press reporting around the 2016 election on the firm’s marketing claims. But it also suggests that he was kept in the dark about the Cambridge Analytica-linked data leak that predated the election and would eventually lead to Facebook’s broader reckoning with regulators and policymakers.

    The Cambridge Analytica saga began with a psychology professor who harvested data on millions of Facebook users through an app offering a personality test, then gave it to a service promising to use vague and sophisticated techniques to influence voters during a high-stakes election where the winning presidential candidate won narrowly in several key states.

    A 2020 report by the UK Information Commissioner’s Office later cast significant doubt on Cambridge Analytica’s capabilities, suggesting many of them had been exaggerated. But the improper sharing of Facebook data triggered a cascade of events that has culminated in numerous investigations and lawsuits.

    After hearing about Cambridge Analytica’s claims that it could use personal data to build “psychographic profiles” of voters who could then be targeted with effective political advertising, Zuckerberg began asking subordinates whether the firm’s marketing had any merit.

    In one January 2017 email produced by the SEC, Zuckerberg asked staffers to “explain to me what they actually did from an analytics and ad perspective and how advanced it was.”

    Explaining his thought process further, Zuckerberg testified: “Like, are these folks actually doing anything novel? Or are they just talking about data in a puffed-up way …. My understanding from those conversations is that, to summarize it very quickly, it was much closer to the latter.”

    But even though Facebook as an organization knew by that point, in 2017, that Cambridge Analytica had obtained Facebook users’ personal information in violation of the platform’s policies, that incident was never raised to Zuckerberg as a piece of potentially relevant context, according to the deposition. Following Facebook’s discovery of the leak, the company required Cambridge Analytica to delete the data it had improperly obtained through a third party and ordered the firm to sign a certification indicating its compliance.

    Zuckerberg testified that he did not get “fully up to speed” on the 2015 data leak, and Facebook’s response to it, until March 2018, when public reports about the incident emerged.

    In the deposition, Zuckerberg explained that he was not briefed earlier likely because Facebook considered the 2015 incident a “closed case until 2018, when new allegations came up that suggested that maybe Cambridge Analytica had lied to us” about having deleted the Facebook data. (The UK ICO’s report later found that Cambridge Analytica did appear to take some steps toward deleting the data, but it also expressed doubts about whether those steps were effective enough.)

    Zuckerberg reaffirmed in his testimony that had Facebook moved more swiftly to implement an existing and separate plan restricting app developers’ access to Facebook information, the data leak could likely have been avoided from the start.

    [ad_2]

    Source link

  • NASA and Russia weigh options for astronaut return after spacecraft leak | CNN

    NASA and Russia weigh options for astronaut return after spacecraft leak | CNN

    [ad_1]

    Sign up for CNN’s Wonder Theory science newsletter. Explore the universe with news on fascinating discoveries, scientific advancements and more.



    CNN
     — 

    Officials at NASA and Russia’s space agency, Roscosmos, are working to decide how to bring home several people at the International Space Station after a Russian Soyuz spacecraft sprang a leak last week.

    None of the seven people currently on board the ISS — including three Roscosmos cosmonauts, three NASA astronauts and one astronaut with Japan’s space agency — were ever in any danger as a result of the leak, officials have noted. But it’s not yet clear whether the spacecraft will be able to make a trip back home with its crew on board.

    The Soyuz MS-22 spacecraft ferried NASA’s Frank Rubio and two Russian cosmonauts, Sergey Prokopyev and Dmitry Petelin, to the space station on September 21. It was scheduled to bring them back to Earth in March. But Roscosmos is now evaluating whether to fly its next Soyuz mission to the ISS empty and move the launch up two to three weeks so that the spacecraft can serve as a rescue vehicle for Rubio, Prokopyev, and Petelin if Soyuz MS-22 is deemed not safe enough for the crew. If Roscosmos goes with that plan, the next Soyuz mission could lift off in February, according to Montalbano.

    The leak on the Soyuz MS-22, which is currently attached to the ISS at one of the orbiting laboratory’s eight docking ports, was identified on December 14. It forced the delay of a planned spacewalk by two cosmonauts last week, and live images during a NASA broadcast showed liquid spewing out from the spacecraft.

    Roscosmos determined that the leak occurred on an external cooling loop of the Soyuz. The leak is not expected to cause any external corrosion or damage to the exterior of the ISS, Montalbano noted, saying the leaked coolant “boils up very quickly” as it’s exposed.

    It’s not yet clear was caused the leak, which has been traced to a small hole that could have been caused by a collision with a piece of space debris, a mechanical problem or some other issue, according to Montalbano.

    Space debris was, however, the certain cause of a one-day delay for a spacewalk planned by the United States. Two astronauts were slated to venture out on Wednesday to install a new solar array to the space station’s exterior, but the ISS had to maneuver out of the way of a piece of spaceborne garbage. The debris was determined to be a piece of an old Russian rocket.

    The ISS was able to maneuver successfully, and the US spacewalk kicked off Thursday morning without issue.

    [ad_2]

    Source link

  • The US economy grew much faster than previously thought in the third quarter | CNN Business

    The US economy grew much faster than previously thought in the third quarter | CNN Business

    [ad_1]


    New York
    CNN
     — 

    America’s economy grew much faster than previously thought in the third quarter, a sign that the Federal Reserve’s battle to cool the economy to fight inflation t is having only limited impact.

    The Commerce Department’s final reading Thursday morning showed gross domestic product, the broadest measure of the US economy, grew at an annual pace of 3.2% between July and September. That was above the 2.9% estimate from a month ago. Economists surveyed by Refinitiv had expected GDP to stay unchanged from its previous reading.

    The report said the stronger-than-expected reading was due to increases in exports and consumer spending that were partly offset by a decrease in spending on new housing. Consumer spending is responsible for more than two-thirds of the nation’s economic activity.

    The Fed has been raising interest rates throughout the year to cool demand for goods and services and reduce inflation. Economists have been worried for quite some time that the Fed’s actions could tip the US economy into recession next year.

    Inflation has cooled in recent readings, but the US economy has stayed strong. Some surveys released this week suggest the Fed’s higher rates are not slowing spending by businesses or consumers.

    A recent survey of chief financial officers found the current level of interest rates have not impacted their spending plans. And consumer confidence improved in December according to a survey by the Conference Board, reaching the highest level since April.

    In addition, employers have continued to hire at a historically strong pace, although layoffs have increased in some industries, especially technology.

    A separate Labor Department report Thursday showed that unemployment claims remained relatively unchanged.

    Initial weekly claims for unemployment insurance benefits ticked up to 216,000 for the week ended, December 17. The previous week’s total was upwardly revised by 3,000 to 214,000.

    Economists were expecting initial claims to land at 222,000, according to Refinitiv.

    The weekly initial claims totals are hovering around pre-pandemic levels. In 2019, weekly claims averaged 218,000.

    Continuing claims, which include people who are collecting benefits on an ongoing basis, dropped slightly to 1.672 million for the week ended December 10. The prior week’s number of continuing claims were revised up to 1.678 million.

    The final GDP report is one of most backward-looking readings the government releases, looking at the state of the economy nearly three months ago. The current forecast from economists is that growth in the current period will be only 2.4%, significantly slower than Thursday’s reading.

    Still, Wall Street was concerned that the GDP report could give the Fed more runway to raise rates. Stocks fell modestly Thursday. Dow futures were 200 points, or 0.6% lower. S&P 500 futures fell 0.8%.

    [ad_2]

    Source link

  • ‘Fortnite’ maker Epic Games to pay $520 million in record-breaking FTC settlement | CNN Business

    ‘Fortnite’ maker Epic Games to pay $520 million in record-breaking FTC settlement | CNN Business

    [ad_1]



    CNN
     — 

    Epic Games, maker of the hit video game “Fortnite,” has agreed to pay a total of $520 million to settle US government allegations that it misled millions of players, including children and teens, into making unintended purchases and that it violated a landmark federal children’s privacy law.

    As part of the agreement, Epic will pay $275 million to the US government to resolve claims it violated the Children’s Online Privacy Protection Act (COPPA) by gathering the personal information of kids under the age of 13 without first receiving their parents’ verifiable consent. It is the largest fine the FTC has ever imposed for a rule that it enforces, the agency said Monday.

    In a second and separate settlement, Epic will pay $245 million as refunds to consumers who were allegedly harmed by user-interface design choices the FTC claimed were deceptive. That agreement is the largest administrative order in FTC history, the FTC added.

    In a blog post addressing the twin settlements, Epic said the agreement reflects an evolution in how US laws are applied to the video gaming industry.

    “No developer creates a game with the intention of ending up here,” Epic said in the blog post. “We accepted this agreement because we want Epic to be at the forefront of consumer protection and provide the best experience for our players.”

    FTC Chair Lina Khan said the settlement reflects the agency’s heightened focus on privacy and so-called “dark patterns,” a term used to describe design elements intended to nudge users toward a company’s preferred result.

    “Protecting the public, and especially children, from online privacy invasions and dark patterns is a top priority for the Commission, and these enforcement actions make clear to businesses that the FTC is cracking down on these unlawful practices,” Khan said in a statement.

    The FTC’s complaint and proposed settlement dealing with children’s privacy was filed in the US District Court for the Eastern District of North Carolina. In addition to the alleged illegal collection of children’s data, the FTC also claimed that Epic’s default settings for matchmaking and in-game communications exposed children to bullying and harassment.

    The allegations of Epic’s deceptive design choices were filed as an FTC administrative complaint. The complaint claims Epic made it extremely easy for children to purchase in-game items with a single click or button press without parental approval, resulting in more than one million parental complaints to Epic about unwanted charges.

    The FTC further alleged that Epic made it more difficult to cancel purchases of in-game items by burying the option at the bottom of the screen and by requiring consumers to push and hold a button on their controllers to complete the cancellation. Those design choices were allegedly implemented after surveys showed that, when the cancel button was more prominently displayed, accidental charges were the “number one ‘reason’” users clicked on the button, the FTC said.

    Epic’s agreement with the FTC, which is not yet final, prohibits the company from using dark patterns or charging consumers without their consent, and also forbids Epic from locking players out of their accounts in response to users’ chargeback requests with credit card companies disputing unwanted charges. The agreement will last for 20 years from the time it is adopted.

    In its blog post, Epic said it has agreed with the FTC to implement a feature that explicitly asks Fortnite users whether to save their payment information for future use. The feature is currently live, it added. The company also recently rolled out a more limited version of “Fortnite” for younger players that allows them to access some features while awaiting parental consent but that restricts chat and purchases.

    The FTC said that as part of its children’s privacy settlement, Epic may no longer enable text and voice chat by default for teenage Fortnite players or those under the age of 13. The company must also establish a comprehensive privacy program and delete the data it allegedly gathered in violation of COPPA.

    “We share the underlying principles of fairness, transparency and privacy that the FTC enforces, and the practices referenced in the FTC’s complaints are not how Fortnite operates,” Epic wrote. “We will continue to be upfront about what players can expect when making purchases, ensure cancellations and refunds are simple, and build safeguards that help keep our ecosystem safe and fun for audiences of all ages.”

    [ad_2]

    Source link

  • Housing slump likely to continue but some see hopeful signs ahead | CNN Business

    Housing slump likely to continue but some see hopeful signs ahead | CNN Business

    [ad_1]

    A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here.


    New York
    CNN
     — 

    Mortgage rates have ticked down recently, but are still up dramatically from a year ago thanks to the surge in long-term bond yields as the Federal Reserve hiked interest rates.

    While that’s already had a negative impact on the housing market, we’ll get more details this week about how much worse the damage has become.

    A long list of housing data is on tap. On Tuesday the US Census Bureau will report housing starts and building permits figures for November, followed by Friday’s release of new home sales data for the same month. In between that will be the November existing home sales numbers from the National Association of Realtors on Wednesday, as well as weekly data on mortgage rates and applications on Thursday.

    For the past few months, existing and new home sales have been steadily declining because of the spike in rates and the fact that home prices remain stubbornly high for first-time buyers. Housing starts and building permits have been choppier on a month-to-month basis, but those figures are both down from a year ago.

    Still, there are some promising signs that the worst could soon be over. Shares of Lennar

    (LEN)    , one of the largest homebuilders in the US, rallied after reporting earnings last week. Revenue topped forecasts and the company’s guidance for the number of homes it expected to deliver next year was a little higher than analysts’ estimates as well.

    Lennar investors “may be looking ahead to 2023, perhaps crossing the valley from recession to potential recovery,” according to CFRA Research analyst Kenneth Leon.

    Others in the industry are cautiously optimistic as well.

    According to data from Amherst Group, an investment firm that buys single-family homes to rent out, it’s important to put the recent slide in prices in context.

    Amherst said home prices are still up about 40% from pre-pandemic levels. So even a further drop of about 15% would merely bring them to mid-2021 levels. In other words, this isn’t like the mid-2000s real estate bubble bursting.

    It’s also worth noting that the job market is still strong and wages are growing. What’s more, many consumers still have decent levels of excess savings thanks to pandemic era government stimulus.

    That all amounts to a few good reasons why the housing market could avoid a severe and prolonged slump.

    “The U.S. housing market is still supported by a tight labor market, the lock-in effect of low fixed mortgage rates for existing homeowners, tight mortgage underwriting, low leverage in the mortgage sector, and low housing supply,” said Brandywine fixed-income analyst Tracy Chen in a report this month.

    “We believe we can avoid a severe housing downturn like the one in the Global Financial Crisis,” Chen added.

    Others point out that even though housing sales may remain weak due to high home prices and still elevated mortgage rates, the good news is that most existing homeowners are still paying their monthly mortgage on time.

    Again, that’s a stark contrast from 2008 when many people with subprime loans or borrowers with poor credit histories were unable to keep up with their mortgage payments.

    “Housing is not bringing down the economy. Yes, the housing market has been impacted. But mortgage delinquencies are still low,” said Gene Goldman, chief investment officer at Cetera Investment Management.

    There aren’t a ton of companies reporting their latest earnings this week. But the few that are could give more clues about the financial health of consumers and the state of corporate spending.

    Cereal giant General Mills

    (GIS)     will release earnings on Tuesday. Analysts are expecting a slight increase in both sales and profit. Consumers may be growing increasingly wary about inflation and the broader economy, but they’re still eating their Wheaties. Shares of General Mills

    (GIS)     have soared nearly 30% this year.

    Analysts are less optimistic about the outlooks for sneaker king and Dow component Nike

    (NKE)    , used car retailer CarMax

    (KMX)     and memory chip maker Micron

    (MU)    , whose semiconductors are used in devices ranging from cell phones and computers to cars.

    Earnings are expected to decline for these three companies. They won’t be the only leaders of Corporate America to report weak results.

    According to data from FactSet, fourth-quarter earnings for S&P 500 companies are expected to decline 2.8% from a year ago. Analysts have been busy cutting their forecasts too. John Butters, senior earnings analyst at FactSet, noted in a report that fourth-quarter profits were expected to rise 3.7% as recently as September 30.

    Investors are also going to be paying very close attention to what companies say in their earnings reports about their outlooks for 2023. Analysts currently are anticipating earnings growth of 5.3% for 2023. That could be too optimistic… especially if companies start cutting their own forecasts due to worries about the broader economy.

    “Odds of a recession are pretty high,” said Vincent Reinhart, chief economist and macro strategist at Dreyfus & Mellon. “That will have a knock-on effect for corporate earnings. Higher rates and weaker earnings suggest more pain for stocks.”

    Monday: Germany Ifo business climate index

    Tuesday: US housing starts and building permits; China sets loan prime rate; Bank of Japan interest rate decision; earnings from General Mills, Nike, FedEx

    (FDX)     and Blackberry

    (BB)

    Wednesday: US existing home sales; Germany consumer confidence; earnings from Rite Aid

    (RAD)    , Carnival

    (CCL)    , Cintas

    (CTAS)    , Toro

    (TTC)     and Micron

    Thursday: US weekly jobless claims; US Q3 GDP (third estimate); earnings from CarMax

    (KMX)     and Paychex

    Friday: US personal income and spending; US PCE inflation; US new home sales; US durable goods orders; US U. of Michigan consumer sentiment; Japan inflation; UK markets close early

    [ad_2]

    Source link

  • Why recession fears are back: Americans are losing faith | CNN Business

    Why recession fears are back: Americans are losing faith | CNN Business

    [ad_1]


    New York
    CNN
     — 

    From the executive suite to the grocery aisles to the halls of the Federal Reserve, the big question is: Can red-hot inflation be vanquished without tipping the economy into a recession?

    Ironically, all this talking about a recession can actually help cause one. How people feel is a huge driver of consumer behavior and business planning. The famous British economist John Maynard Keynes coined the phrase “animal spirits” to describe what drives investors, consumers and business leaders. Fear, hope, uncertainty, and confidence are all hard to measure — and hugely important to how the economy fares.

    Essentially, worrying about a recession and planning for one can be a self-fulfilling prophecy.

    “At the end of the day, a recession is a loss of faith,” said Mark Zandi, chief economist at Moody’s Analytics. Consumers worry about losing a job and so pull back on spending, and business leaders worry their sales will decline and start laying off workers.

    “You get into this kind of self-reinforcing negative cycle,” he told CNN’s Early Start. “So when sentiment is this bad and starting to feed on itself, we run the risk of talking ourselves into one.”

    The US economy grew at a 2.9% annual rate in the third quarter, and the unemployment rate is near a 50-year low. That’s not going to last. The Federal Reserve this week lowered its forecast for growth in the United States next year to just 0.5% and a jobless rate rising to 4.6% by the end of 2023.

    “Look, we’re planning as if there’s going to be a mild recession next year,” United Airlines CEO Scott Kirby told CNN This Morning. “And a lot of people in the business world are trying to talk ourselves into one is what it sometimes feels like to me.”

    But he added, “If I didn’t watch business shows or read the Wall Street Journal, the word recession wouldn’t be in my vocabulary because we just don’t see it in our data.”

    Federal Reserve Chairman Jerome Powell and plenty of economists — including Treasury Secretary Janet Yellen — still see a path to a so-called soft landing, where the economy slows enough to lower inflation but not cause a recession. Yellen explained this week that recession risks permanently exist.

    “There are always risks of a recession,” Yellen told CBS’s “60 Minutes” in an interview that aired on Sunday. “The economy remains prone to shocks.”

    But Zandi said there can be a bright side to the dark worries.

    “It may just, in an odd kind of way, help things out because if everyone’s so nervous about recession, they are cautious,” he said. “They don’t take big risks. They don’t take on a lot of debt. They don’t go out and make big expansion moves (and) that may cool things off sufficiently to bring inflation down so that (the Fed) doesn’t have to raise rates as much and we actually — weirdly enough — avoid a recession.”

    JPMorgan Chase CEO Jamie Dimon has expressed concern for months about an impending recession, citing higher interest rates and consumers spending down their excess pandemic savings.

    “When you’re looking out forward, those things may very well derail the economy and cause this milder or hard recession that people are worried about,” he said earlier this month.

    With inflation still at the highest level in a generation and central banks around the world continuing to raise interest rates, the risks for 2023 are undoubtedly high.

    “I think it’s reasonable to be nervous and cautious about the economy next year,” Zandi acknowledged.

    “But you know, having said that, I think we have a fighting chance of getting through the next year without an economic downturn.” He cites inflation “coming in here pretty quickly, consumers still have cash and middle- and high-income consumers are spending and businesses are reluctant to lay off workers because their number one problem is finding and retaining workers.”

    He forecasts “just a moderate, steady slowing (in the job market) and economic activity as we move into next year. Hopefully we don’t lose faith and run for the bunker and go into recession.”

    — CNN’s Elizabeth Yang contributed to this report.

    [ad_2]

    Source link

  • The Grinch comes for retailers | CNN Business

    The Grinch comes for retailers | CNN Business

    [ad_1]

    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
     — 

    Weaker-than-expected retail sales in November pummeled market sentiment on Thursday and raised the odds that the Federal Reserve’s inflation-fighting interest rate hikes would push the economy into recession.

    What’s happening: US retail sales, which measure the total amount of money that stores make from selling goods to customers, fell 0.6% in November, the weakest performance in nearly a year. The drop concerned economists who had expected monthly sales to shrink by just 0.1%. It’s also a sharp reversal from October’s sales increase of 1.3%.

    That’s a bad sign for the economy. Just last month Bank of America CEO Brian Moynihan told CNN that the continued strength of the US consumer is nearly single-handedly staving off recession. Consumer spending is a major driver of the economy, and the last two months of the year can account for about 20% of total retail sales — even more for some retailers, according to National Retail Federation data.

    Market mania: The weak report means that spending faltered just as the holiday season started, a critical time for retailers to ramp up profits and get rid of excess inventory. Investors weren’t too happy about that.

    Shares of Costco

    (COST)     closed Thursday 4.1% lower, Target

    (CBDY)     fell by 3.2%, Macy’s

    (M)     dropped 3.5% and Abercrombie & Fitch

    (ANF)     was down 6.2%.

    The entire sector took a blow — the VanEck Retail ETF, with Amazon

    (AMZN)    , Home Depot

    (HD)     and Walmart

    (WMT)    as its top three holdings, fell by 2.2%. The SPDR S&P Retail ETF, which follows all S&P retail stocks, was down 2.9%.

    Weak sales are likely to continue, say analysts, and if they do, then retailers’ bottom lines and fourth-quarter earnings will suffer.

    “The headwinds of the past year are catching up to consumers and forcing them to be more conservative in their holiday shopping this winter,” warned Morgan Stanley economist Ellen Zentner in a note.

    The Fed factor: November’s report could indicate that consumers are feeling the double-punch of sky-high inflation and painful interest rate hikes from the central bank. This retail sales data adds to recessionary concerns, as it suggests that consumers may be becoming more cautious with their spending.

    “Households are increasingly relying on their savings to sustain their spending, and many families are resorting to credit to offset the burden of high prices. These trends are unsustainable, and the current credit splurge is a true risk, especially for families at the lower end of the income spectrum,” said Gregory Daco and Lydia Boussour, economists at EY Parthenon.

    While American bank accounts are still fairly robust, they’re beginning to dwindle. In the third quarter of 2022, credit card balances jumped 15% year over year. That’s the largest annual jump since the New York Fed began keeping track of the data in 2004.

    “Against this backdrop, we expect consumers will rein in their spending further in coming months,” said Daco and Boussour. “Real consumer spending should see modest growth in the final quarter of the year, but we expect it will barely grow in 2023.”

    Bottom line: If Bank of America’s Moynihan was right, the US economy is in trouble.

    US mortgage rates came in lower once again this week, marking the fifth consecutive drop in a row.

    The 30-year fixed-rate mortgage averaged 6.31% in the week ending December 15, down from 6.33% the week before, according to Freddie Mac. A year ago, the 30-year fixed rate was 3.12%, reports my colleague Anna Bahney.

    That’s a sharp reversal from the upward trend in rates we’ve seen for most of 2022. Those increases were spurred by the Federal Reserve’s unprecedented campaign of harsh interest rate hikes to tame soaring inflation. But mortgage rates have tumbled in the last several weeks, following data that showed inflation may have finally reached its peak.

    The Fed announced on Wednesday that it will continue to raise interest rates — albeit by a smaller amount than it has been.

    “Mortgage rates continued their downward trajectory this week, as softer inflation data and a modest shift in the Federal Reserve’s monetary policy reverberated through the economy,” said Sam Khater, Freddie Mac’s chief economist.

    “The good news for the housing market is that recent declines in rates have led to a stabilization in purchase demand,” he added. “The bad news is that demand remains very weak in the face of affordability hurdles that are still quite high.”

    American regulators have been granted unprecedented access to the full audits of Chinese companies like Alibaba

    (BABA)     and JD.com

    (JD)     after threatening to kick the tech giants off US stock exchanges if they did not receive the data.

    The announcement marks a major breakthrough in a yearslong standoff over how Chinese companies listed on Wall Street should be regulated. It will come as a huge relief for these firms and investors who have invested billions of dollars in them, reports my colleague Laura He.

    “For the first time in history, we are able to perform full and thorough inspections and investigations to root out potential problems and hold firms accountable to fix them,” Erica Williams, chair of the Public Company Accounting Oversight Board, said in a statement Thursday, adding that such access was “historic and unprecedented.”

    More than 100 Chinese companies had been identified by the US securities regulator as facing delisting in 2024 if they did not hand over the audits of their financial statements.

    On Friday, China’s securities regulator said it’s looking forward to working with US officials to continue promoting future audit supervision of companies listed in the United States.

    There are more than 260 Chinese companies listed on US stock exchanges, with a combined market capitalization of more than $770 billion, according to recent calculations posted by the US-China Economic and Security Review Commission.

    [ad_2]

    Source link

  • US intel agencies likely missed chances to investigate Covid pandemic’s origin, House Democrats’ report says | CNN Politics

    US intel agencies likely missed chances to investigate Covid pandemic’s origin, House Democrats’ report says | CNN Politics

    [ad_1]


    Washington
    CNN
     — 

    Democratic investigators on the House Intelligence Committee have alleged that US intelligence agencies may have lost a critical opportunity to gather useful information on the Covid-19 pandemic’s origins by failing to pivot its collection resources earlier. In a report released on Thursday morning, the Democrats also laid out perhaps the most detailed timeline to date of the litany of warnings the intelligence community offered the Trump administration in the early days of the pandemic.

    The Democratic report comes just 24 hours after committee Republicans released their own report on the intelligence community’s examination of the pandemic’s origins in what has become an indirect battle for the narrative surrounding the Covid-19 pandemic just weeks before Republicans are poised to claim control of the House.

    The Democratic investigators’ report says that the intelligence community was slow to pivot its clandestine resources to the growing crisis – in ways that have likely undermined its efforts to understand how or where the virus emerged.

    “It’s a hypothetical – no one could say with certainty, yes or no,” said one committee investigator. “But hypothetically speaking, if you have more information from clandestine sources from the very earliest days of the virus – perhaps before Chinese authorities entirely know what’s going on – you may be better positioned to answer some of those questions [about the virus’s origins] that are I think still open questions.”

    Investigators declined to offer specifics about what resources should have been trained on the problem. But according to the report, “the first valuable piece of clandestine collection on the virus” was disseminated only in late January 2020. Analysts from the Defense Intelligence Agency unit that provided the intelligence community’s first warning of the pandemic told the House committee that by then, they had grown “frustrated at the lack of clandestine collection to inform their analysis.”

    “The lack of clandestine collection was a reflection of the Intelligence Community’s overall lack of preparedness to face an emerging pandemic,” the report found. “The first significant dissemination of intelligence this late in the development of the crisis demonstrates how the IC was underserving expert policymakers and analysts.”

    According to the Democrats’ report, the first warning the intelligence community offered to the Trump administration came from a little-known Defense Intelligence Agency unit in Fort Detrick, Maryland, which on December 31, 2019, published an open-source warning of an undiagnosed pneumonia in China, labeling it a “possible pandemic warning update.”

    By the end of January, the Office of the National Director of Intelligence had issued a memo directing the intelligence community to direct more resources at gathering information on the burgeoning crisis, calling it “the top intelligence concern in East Asia,” and warnings began to ripple out through the senior levels of government.

    On January 24, the same DIA unit warned that there was a “roughly even” chance of a global pandemic. President Donald Trump received what Democratic investigators believe was likely his first formal Presidential Daily Briefing on the virus the day before, and another on January 28.

    According to a witness who spoke to the committee about the January 28 PDB briefing, deputy national security adviser Matt Pottinger “was ‘losing it’ when talking about the disease’s severity and trying to convince the President and those assembled that ‘this will be a really big thing.’”

    The chairman of the Joint Chiefs of Staff received a warning about the virus in an intelligence briefing on January 29, 2020, and the next day, the CIA began to produce what are known as “executive updates” on the virus – “shorter intelligence products that demonstrate the CIA’s taking a potential crisis serious,” according to the report.

    Still, Democratic investigators allege, despite the drumbeat of warnings from the IC, “White House messaging” failed to effectively inform the public of the risk from the virus. Trump’s rhetoric diverged “striking[ly]” from the intelligence communities late January conclusions, they said, demonstrating “an executive branch that was informed, but failed to warn the American people.”

    The report notes that on January 30 – two days after the January 28 briefing in which Pottinger was allegedly “losing it” – Trump told an audience in Michigan that, “We think we have it very well under control.”

    CNN has reached out to the Trump campaign. The Office of the Director of National Intelligence declined to comment on the reports.

    “There has been a lot of focus on the first warning to the President on January 28,” the committee investigator said. “There has been much less focus on the rhythm of warnings following that, and what we what we find with a pretty consistent rhythm of warnings starting in late January and then really dialing up the volume throughout February.”

    The committee did not receive access to the original PDBs given to Trump but based its conclusions on draft materials and interviews with different intelligence agencies who contributed to the final product, according to investigators.

    By February, according to the report, PDB staff “pivoted from ‘warning’ of the emerging virus to assessing what the virus would mean for the world as it continued to spread.” The report goes on to list reporting from the State Department and the Department of Health and Human Services throughout the month, as well as what appears to be two additional warnings provided on February 11 and February 13 that are completely redacted.

    “For six weeks, the President’s message – that the virus was not a significant threat – was flatly inconsistent with what the Intelligence Community was reporting,” the report found.

    On March 11, the World Health Organization declared the coronavirus outbreak a pandemic.

    Committee Democrats say that despite some improvements, the intelligence community remains unprepared for the next pandemic. In a series of recommendations, the report calls for the intelligence community to develop the ability to pivot collection faster, better coordinate with health security agencies like the Centers for Disease Control and Prevention, and leverage open-source data more aggressively.

    Although House Republicans have made clear that investigations of the government’s handling of the pandemic – including the investigation into its origins – are a key target next year, it’s not clear how aggressively the Intelligence Committee specifically will move to pursue the issue when Republican Rep. Mike Turner of Ohio takes the chairman’s gavel. Notably, the GOP report was authored by Rep. Brad Wenstrup, who will not be on the committee next year unless he receives a waiver from the incoming House speaker to serve.

    Republicans in their report, released on Wednesday night, are accusing the intelligence community of “downplay[ing] the possibility” that SARS-CoV-2, the virus that causes Covid-19, “was connected to China’s bioweapons program” – an assertion that directly challenges the intelligence community’s own declassified report, released earlier this year, that said that there was “broad agreement” that the virus was not developed as a biological weapon. The GOP report provides no details to back up its claims, citing classification concerns. CNN is unable to verify the GOP report’s claims.

    The Republican’s report also alleges that the classified version of the intelligence community’s report on the pandemic’s origins “omits additional vital information and dismisses important intelligence in a cursory manner.”

    “Although our unclassified summary cannot reveal details, we can state that the classified Updated Assessment claimed the IC lacked information regarding one key classified issue,” the report states. “However, the Committee otherwise found that very information in other intelligence reporting, and this information is particularly relevant to determining SARS-CoV-2’s potential links to China’s bioweapons program.”

    Wenstrup in a call with reporters on Thursday said that while “I can’t reveal it now because there’s a classification status… what we’re wanting to do is let America know that we have found some discrepancy between the two reports.”

    Panel Republicans also allege that the intelligence community’s unclassified report “likely skewed the public’s understanding” of the question of whether SARS-CoV-2 was created as part of a bioweapons program because it did not disclose the technical “confidence level” that it had in that assessment, as it did with some other assessments.

    When pressed by CNN to detail the discrepancies between the classified and unclassified versions of the report, Republican staff investigators noted that the classified version included the confidence level for the bioweapons assessment and suggested that this was part of why they were “making a big deal of it,” but declined to go into further detail.

    The intelligence community’s declassified report said that it has not reached a conclusion on the origins of Covid-19, instead confirming that officials were split about whether the virus originated naturally or escaped from a lab.

    The GOP report also claims, without evidence, that the unclassified report “omitted other key information that was in the classified version in a manner that likely skewed the public’s understanding of key issues” and stonewalled efforts by Congress to provide further oversight over the government’s investigation and its findings.

    Turner, in an interview with CNN earlier this week, also declined to offer any specifics about how he felt that the unclassified report did not accurately represent information in the classified record.

    “I personally do not believe that the unclassified version adequately reflects the assertions or conclusions in the classified version,” Turner said. “That discrepancy is one of great interest to us.”

    Wenstrup in the report and his remarks to reporters said that Republicans will move to subpoena the intelligence community for more information if officials do not testify voluntarily.

    “We’re not vindictive in our approach,” Wenstrup said. “We just want to get to the truth.”

    [ad_2]

    Source link

  • Soyuz spacecraft docked to International Space Station springs ‘fairly significant’ coolant leak | CNN

    Soyuz spacecraft docked to International Space Station springs ‘fairly significant’ coolant leak | CNN

    [ad_1]



    CNN
     — 

    A planned spacewalk by the Russian space agency Roscosmos has been called off following the discovery of a coolant leak coming from the Soyuz MS-22 spacecraft, which is currently docked to the International Space Station.

    NASA’s Rob Navias, speaking on the NASA TV broadcast, called it a “fairly significant” leak. Live images during the broadcast showed liquid spewing out from the Soyuz. Navias said the leak was first observed around 7:45 p.m. ET Wednesday.

    The Soyuz spacecraft is docked to the Russian segment of the space station.

    The crew is safe, and all systems of the space station and the ship are operating normally, according to Roscosmos, in a statement in Russian released Thursday morning on Twitter. (CNN translated the statement.)

    “The crew reported that the warning device of the ship’s diagnostic system went off, indicating a pressure drop in the cooling system,” according to Roscosmos. “A visual inspection confirmed the leak, after which it was decided to interrupt the planned extravehicular activities by the crew members of the ISS Russian Segment Sergey Prokopiev and Dmitry Petelin.”

    Navias said the cause of the coolant leak is “unknown and the effect at this point unknown as Russian managers continue to look over the data and consult with both NASA managers and engineers” and outside experts. He said the astronauts inside the space station were “never in any danger.”

    Russian cosmonaut Anna Kikina, using the camera on Russia’s Nauka module on the space station, “photographed and filmed the outer surface of the ship,” according to Roscosmos. “The data was transmitted to Earth, and the specialists have already begun to study the images.”

    “No decisions have been made regarding the integrity of the Soyuz MS-22 or what the next course of action will be,” Navias added, wrapping up NASA-TV coverage of the canceled spacewalk.

    Roscosmos added that the situation will be analyzed before a decision is made about what comes next.

    NASA took a similar tone in a Thursday statement: “NASA and Roscosmos will continue to work together to determine the next course of action following the ongoing analysis.”

    The Soyuz MS-22 ferried NASA astronaut Frank Rubio and two Russian cosmonauts to the space station on September 21 and is scheduled to bring them back to Earth in late March.

    [ad_2]

    Source link

  • The Fed lifts rates by half a point, acknowledging that inflation is easing | CNN Business

    The Fed lifts rates by half a point, acknowledging that inflation is easing | CNN Business

    [ad_1]


    Washington, DC
    CNN
     — 

    The Federal Reserve approved a half-point interest rate hike on Wednesday, a smaller increase than in recent months and an acknowledgment that inflation is finally easing.

    The increase marks a shift for the central bank after an unprecedented year that includes seven-straight rate hikes as part of an aggressive campaign to try and bring down the highest inflation since the early 1980s.

    While lower than the four consecutive three-quarter-point hikes approved at the Fed’s previous meetings, Wednesday’s rate hike is still twice the size of the central bank’s customary quarter-point increase and will likely deepen the economic pain for millions of American businesses and households by pushing up the cost of borrowing even further.

    Fed officials will increase the rate that banks charge each other for overnight borrowing to a range of 4.25-4.5%, the highest since 2007.

    The Fed also released its highly anticipated Summary of Economic Projections, which includes what is colloquially known as the dot plot. Investors pay close attention to these forecasts, which show where each of its 19 leaders expect interest rates to go in the future, for clues about the path of rate hikes in the new year and beyond.

    The December projections showed a more aggressive monetary policy tightening path, with the median “dot” rising to a new peak in federal fund rates of 5-5.25% up from 4.5-4.75% in September. That would mean Fed officials expect to raise rates by half a percent more than they did three months ago, when the plot was last released.

    Policymakers also projected that PCE inflation, the Fed’s favored price gauge, would remain above its 2% target until at least 2025. Further projections showed souring expectations for the health of the US economy, with Fed officials now predicting that unemployment will rise to 4.6% by the end of 2023 and remain at that level through 2024. That’s 0.2 percentage points higher than the 4.4% rate they were expecting in September and significantly higher than the current 3.7% rate.

    GDP, a measure of economic output, is also projected to drop to 0.5% next year, down from 1.2% in September.

    The forecast will likely stoke investors’ and economists’ fear that the US economy will endure a recession next year. Federal Reserve Chair Jerome Powell said last month that there is still a chance the economy can avoid recession but said the odds are slim.

    “To the extent we need to keep rates higher longer, that’s going to narrow the path to a soft landing,” he said at an economic forum last month.

    Still, the economy has so far withstood the hikes. The job market is healthy, wages are growing, Americans are spending and GDP is strong. Business is also good: Companies are largely beating revenue expectations and reporting positive earnings results.

    Fed Chair Powell is schedule to hold a post-meeting press conference at 2:30 p.m. Wednesday.

    [ad_2]

    Source link

  • What to expect from this week’s Fed meeting | CNN Business

    What to expect from this week’s Fed meeting | CNN Business

    [ad_1]


    New York
    CNN
     — 

    The Federal Reserve is expected to raise interest rates by half a point at the conclusion of its two-day policy meeting on Wednesday, an indication that the central bank is pulling back on its aggressive stance as signs begin to emerge that inflation may be easing.

    Although that increase would be smaller than the three-quarter-point hikes announced at the past four Fed meetings, it’s nothing to scoff at.

    It’s still double the Fed’s customary quarter-point hike, and a sizable increase that will likely cause economic pain for millions of American businesses and households by pushing up the cost of borrowing for homes, cars and other loans.

    The Fed’s anticipated action would increase the rate that banks charge each other for overnight borrowing to a range of between 4.25% and 4.5%, the highest since 2007.

    Federal Reserve Chairman Jerome Powell confirmed last month that smaller rate hikes could be expected, saying: “The time for moderating the pace of rate increases may come as soon as the December meeting.”

    But while inflation is unlikely to slow dramatically any time soon, partly due to continued pressure on wages amid a shortage of workers, Wall Street appears to believe the Fed will eventually be forced to pivot away from, or even reverse its regimen of rate hikes. Traders are largely pricing in rate cuts in the second half of 2023.

    The Fed will conclude its rate hike regimen by the second quarter of next year, predicted JPMorgan analysts in a recent note. “With inflation continuing to fade and fiscal policy likely on hold, the Fed is likely to end its tightening cycle early in the new year and inflation could begin to ease before the end of 2023,” they wrote. The analysts expect two quarter-point hikes in the first half of 2023.

    But the average period between peak interest rates and the first reductions by the Fed is 11 months, which could mean that even if the central bank stops actively hiking rates, they could remain elevated into 2024.

    Investors will closely read the Fed’s economic outlook, the Summary of Economic Projections, which is also due out Wednesday. And they will watch Powell’s press conferences for clues about what’s to come — though they may end up sorely disappointed.

    ​”We expect Fed Chair Powell will insist on the need to hold policy at a restrictive level for some time to bring inflation down toward the 2% target,” wrote Gregory Daco, chief economist at EY-Parthenon, in a note to clients Monday. “This will serve to push back against current market pricing … Powell will stress that history cautions strongly against prematurely loosening policy.”

    The Fed has increased its benchmark lending rate six times this year in an attempt to discourage borrowing, cool the economy and bring down historically high inflation that peaked at 9.1% over the summer.

    Even if interest rate hikes do ease off, they will remain high, and economists are largely expecting that the US economy will endure a recession next year. Powell said in November that there is still a chance the economy avoids recession but the odds are slim, noting: “To the extent we need to keep rates higher longer, that’s going to narrow the path to a soft landing.”

    In an interview that aired on CBS on Sunday, Treasury Secretary Janet Yellen — Powell’s predecessor at the Fed — said there is “a risk of a recession. But it certainly isn’t, in my view, something that is necessary to bring inflation down.”

    And the economy has so far withstood the Fed’s aggressive rate hikes. The job market is healthy, wages are growing, Americans are spending and GDP is strong. Business is also good: Companies are largely beating revenue expectations and reporting positive earnings results.

    The Fed isn’t acting alone, it’s just one of nine central banks expected to make a rate announcement this week. Landing softly on the ever-narrowing path between high inflation and recession is a global concern as central banks across the world contend with similar economic problems.

    The European Central Bank, the Bank of England and the Swiss National Bank are expected to follow the United States with half-point moves of their own on Thursday. Norway, Mexico, Taiwan, Colombia and the Philippines will also likely increase their borrowing costs this week.

    The Federal Reserve announces its rate hike decision Wednesday at 2 p.m., followed by a press conference with Chair Powell at 2:30 p.m.

    [ad_2]

    Source link

  • Historic moon mission ends with splashdown of Orion capsule | CNN

    Historic moon mission ends with splashdown of Orion capsule | CNN

    [ad_1]

    Sign up for CNN’s Wonder Theory science newsletter. Explore the universe with news on fascinating discoveries, scientific advancements and more.



    CNN
     — 

    The Artemis I mission — a 25½-day uncrewed test flight around the moon meant to pave the way for future astronaut missions — came to a momentous end as NASA’s Orion spacecraft made a successful ocean splashdown Sunday.

    The spacecraft finished the final stretch of its journey, closing in on the thick inner layer of Earth’s atmosphere after traversing 239,000 miles (385,000 kilometers) between the moon and Earth. It splashed down at 12:40 p.m. ET Sunday in the Pacific Ocean off Mexico’s Baja California.

    This final step was among the most important and dangerous legs of the mission.

    But after splashing down, Rob Navias, the NASA commentator who led Sunday’s broadcast, called the reentry process “textbook.”

    “I’m overwhelmed,” NASA Administrator Bill Nelson said Sunday. “This is an extraordinary day.”

    The capsule is now bobbing in the Pacific Ocean, where it will remain until nearly 3 p.m. ET as NASA collects additional data and runs through some tests. That process, much like the rest of the mission, aims to ensure the Orion spacecraft is ready to fly astronauts.

    “We’re testing all of the heat that has come and been generated on the capsule. We want to make sure that we characterize how that’s going to affect the interior of the capsule,” NASA flight director Judd Frieling told reporters last week.

    A fleet of recovery vehicles — including boats, a helicopter and a US Naval ship called the USS Portland — are waiting nearby.

    The spacecraft was traveling about 32 times the speed of sound (24,850 miles per hour or nearly 40,000 kilometers per hour) as it hit the air — so fast that compression waves caused the outside of the vehicle to heat to about 5,000 degrees Fahrenheit (2,760 degrees Celsius).

    “The next big test is the heat shield,” Nelson had told CNN in a phone interview Thursday, referring to the barrier designed to protect the Orion capsule from the excruciating physics of reentering the Earth’s atmosphere.

    The extreme heat also caused air molecules to ionize, creating a buildup of plasma that caused a 5½-minute communications blackout, according to Artemis I flight director Judd Frieling.

    INTERACTIVE: Trace the path Artemis I will take around the moon and back

    As the capsule reached around 200,000 feet (61,000 meters) above the Earth’s surface, it performed a roll maneuver that briefly sent the capsule back upward — sort of like skipping a rock across the surface of a lake.

    There are a couple of reasons for using the skip maneuver.

    “Skip entry gives us a consistent landing site that supports astronaut safety because it allows teams on the ground to better and faster coordinate recovery efforts,” said Joe Bomba, Lockheed Martin’s Orion aerosciences aerothermal lead, in a statement. Lockheed is NASA’s primary contractor for the Orion spacecraft.

    “By dividing the heat and force of reentry into two events, skip entry also offers benefits like lessening the g-forces astronauts are subject to,” according to Lockheed, referring to the crushing forces humans experience during spaceflight.

    Another communications blackout lasting about three minutes followed the skip maneuver.

    As it embarked on its final descent, the capsule slowed down drastically, shedding thousands of miles per hour in speed until its parachutes deploy. By the time it splashed down, Orion was traveling about 20 miles per hour (32 kilometers per hour).

    While there were no astronauts on this test mission — just a few mannequins equipped to gather data and a Snoopy doll — Nelson, the NASA chief, has stressed the importance of demonstrating that the capsule can make a safe return.

    The space agency’s plans are to parlay the Artemis moon missions into a program that will send astronauts to Mars, a journey that will have a much faster and more daring reentry process.

    The Orion capsule captures a view of the lunar surface, with Earth in the background lit in the shape of a crescent by the sun.

    Orion traveled roughly 1.3 million miles (2 million kilometers) during this mission on a path that swung out to a distant lunar orbit, carrying the capsule farther than any spacecraft designed to carry humans has ever traveled.

    A secondary goal of this mission was for Orion’s service module, a cylindrical attachment at the bottom of the spacecraft, to deploy 10 small satellites. But at least four of those satellites failed after being jettisoned into orbit, including a miniature lunar lander developed in Japan and one of NASA’s own payload that was intended to be one of the first tiny satellites to explore interplanetary space.

    On its trip, the spacecraft captured stunning pictures of Earth and, during two close flybys, images of the lunar surface and a mesmerizing “Earth rise.”

    Nelson said if he had to give the Artemis I mission a letter grade so far, it would be an A.

    “Not an A-plus, simply because we expect things to go wrong. And the good news is that when they do go wrong, NASA knows how to fix them,” Nelson said. But “if I’m a schoolteacher, I would give it an A-plus.”

    With the success of the Artemis I mission, NASA will now dive into the data collected on this flight and look to choose a crew for the Artemis II mission, which could take off in 2024.

    Artemis II will aim to send astronauts on a similar trajectory as Artemis I, flying around the moon but not landing on its surface.

    The Artemis III mission, currently slated for a 2025 launch, is expected to put boots back on the moon, and NASA officials have said it will include the first woman and first person of color to achieve such a milestone.

    [ad_2]

    Source link

  • The Fed will raise rates again. But it’s playing with fire | CNN Business

    The Fed will raise rates again. But it’s playing with fire | CNN Business

    [ad_1]

    A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here.


    New York
    CNN
     — 

    The Federal Reserve is all but guaranteed to announce Wednesday that it will once again raise interest rates. But investors are hopeful it will be a smaller increase than the last four hikes.

    Traders are betting on just a half-point increase. Federal funds futures on the Chicago Mercantile Exchange show an 80% probability of a half-point hike.

    The Fed bumped up rates by three-quarters of a percentage point in the past four meetings (June, July, September and November). That followed two smaller rate hikes earlier this year. The central bank’s key short-term interest rate, which sat at zero at the beginning of the year, is now at a range of 3.75% to 4%.

    The hope is that inflation pressures are finally starting to abate enough that the Fed can pivot — Fed-speak for a series of smaller rate hikes -— to avoid crashing the economy into a recession.

    But it may not be that simple. The government reported Friday that a key measure of wholesale prices, the Producer Price Index, rose 7.4% over the past 12 months through November. That was a bit higher than the expected rate of 7.2% but a marked slowdown from the 8% increase through October.

    The more widely watched Consumer Price Index data for November comes out Tuesday, just a day before the Fed announcement. CPI rose 7.7% year-over-year through October.

    As long as inflation remains a problem, the Fed is going to have to tread cautiously.

    “Inflation has probably peaked but it may not come down as quickly as people want it to,” said Kathy Jones, chief fixed income strategist for the Schwab Center for Financial Research.

    Jones still thinks the Fed will raise rates by only half a point this week and may look to hike them just a quarter point in early 2023. But she conceded that the Fed is now sort of “making it up as they go along.”

    The other problem: The Fed’s rate hikes this year have had limited impact on the economy so far. Yes, mortgage rates have spiked and that has severely hurt demand for housing, but the job market remains strong. Wages are growing, and consumers are still spending. That can’t last indefinitely.

    “The cumulative impact of higher rates are just beginning. Hence, the Fed has to step down its pace a bit,” Jones said.

    So investors are going to need to pay attention not to just what the Fed says in its policy statement about rates and what Powell talks about in his press conference. The Fed also will release its latest projections for gross domestic product growth, the job market and consumer prices Wednesday.

    In September, the Fed’s consensus forecasts called for GDP growth of 1.2% in 2023, an unemployment rate of 4.4% and an increase in personal consumption expenditures, the Fed’s preferred measure or inflation, of 2.8%. It seems likely that the Fed will cut its GDP target and raise its expectations for the jobless rate and consumer prices.

    The likelihood of an economic downturn is increasing, and the Fed’s projections may reflect that. But the Fed is not expected to start cutting interest rates until 2024 at the earliest, so it may be too late for the central bank to prevent a recession.

    “A pivot or pause is not a cure-all for this market,” said Keith Lerner, co-chief investment officer at Truist Advisory Services. “Rate cuts may be too late. Recession risks are still relatively high.”

    The US economy isn’t in a recession yet. But are American shoppers tapped out? We’ll get a better sense of that Thursday after the government reports retail sales figures for November.

    Economists are actually forecasting a small dip of 0.1% in retail sales from October. But it’s important to put that number in context. Retail sales surged 1.3% from September and 8.3% over the past 12 months.

    So it’s possible consumers were simply getting a head start on holiday shopping. Inflation has an effect on the numbers too, since retail sales have been impacted (positively) by the fact that people have to spend more money for stuff.

    One market strategist also pointed out that as long as price increases continue to slow, consumers will feel more confident as well.

    “Everybody has been talking about inflation this year. Going forward, it will be more about disinflation in 2023 or 2024,” said Arnaud Cosserat, CEO of Comgest Global Investors.

    What does that mean for investors? Cosserat said people should be looking for quality consumer companies that still have pricing power and can maintain their profit margins. Two stocks that his firm owns that he said fit that bill: Luxury goods maker Hermes

    (HESAF)     and cosmetics giant L’Oreal

    (LRLCF)    .

    Monday: UK monthly GDP; earnings from Oracle

    (ORCL)

    Tuesday: US Consumer Price Index; Germany economic sentiment

    Wednesday: Fed meeting; EU industrial production; UK inflation; earnings from Lennar

    (LEN)     and Trip.com

    (TCOM)

    Thursday: US retail sales; US weekly jobless claims; ECB and Bank of England rate decisions; earnings from Jabil

    (JBL)

    Friday: Eurozone PMI; UK retail sales; earnings from Accenture

    (ACN)    , Darden Restaurants

    (DRI)     and Winnebago

    (WGO)

    [ad_2]

    Source link

  • DC attorney general sues Amazon for allegedly misusing driver tips | CNN Business

    DC attorney general sues Amazon for allegedly misusing driver tips | CNN Business

    [ad_1]


    Washington
    CNN Business
     — 

    Amazon faces a new lawsuit from the attorney general of Washington, D.C. that alleges the e-commerce giant used customer tips meant for delivery drivers to reduce what it owed in driver wages.

    The lawsuit by Attorney General Karl Racine further claims that Amazon covered up the practice, which allegedly began in 2016. The allegations are virtually identical to those leveled previously by the Federal Trade Commission, which announced a settlement with Amazon on the matter in 2021.

    The business practice at issue involved Amazon’s public claims that it would pay Amazon Flex delivery drivers a rate of at least $18 per hour, plus 100% of any tips that customers contributed. According to the FTC, and now Racine, Amazon in 2016 changed its payment model without notifying drivers or customers. The new model allegedly used a portion of customer tips to subsidize Amazon’s own labor costs, and tried to hide the change from drivers by reporting their tips and wages as a combined figure.

    Racine’s office said Tuesday it is bringing the new complaint because the FTC settlement, although it involved Amazon agreeing to pay drivers a total of $61.7 million to make them whole, did not impose any fines on the company.

    Amazon “has thus far escaped appropriate accountability, including any civil penalties, for consumer harm,” Racine’s office said in a release. It added that the DC lawsuit seeks civil penalties “for every violation” of DC’s consumer protection law stemming from the practice and a court order barring Amazon from such violations in the future.

    In a statement responding to Racine’s suit, Amazon spokesperson Maria Boschetti said the company revised its payment model for delivery drivers in 2019. In its earlier allegations, the FTC said Amazon only changed its payment model after the company learned that federal regulators were investigating the practice. (The 2019 changes, the FTC said at the time, appeared to largely revert the 2016 changes and provided more transparency to drivers about their earnings.)

    “This lawsuit involves a practice we changed three years ago and is without merit,” Boschetti said. “All of the customer tips at issue were already paid to drivers as part of a settlement last year with the FTC.”

    As part of the 2021 FTC settlement, Amazon agreed on a nationwide basis not to mislead drivers about their earnings, including tipped earnings, and to seek drivers’ explicit consent before changing how much of the customer tips they actually receive.

    [ad_2]

    Source link

  • Key inflation measure shows price pressures cooled off in November, but remain high | CNN Business

    Key inflation measure shows price pressures cooled off in November, but remain high | CNN Business

    [ad_1]


    New York
    CNN
     — 

    Another key inflation measure shows price pressures cooled off but remained stubbornly high in November, despite the Federal Reserve’s monthslong efforts to fight inflation through higher interest rates.

    The Producer Price Index, which measures prices paid for goods and services by businesses before they reach consumers, rose 7.4% in November compared to a year earlier, the Bureau of Labor Statistics reported Friday. That’s down from the revised 8.1% gain reported for October.

    US stocks fell immediately after the report, as economists surveyed by Refinitiv had expected wholesales prices to have risen just 7.2%, annually. The higher-than-expected inflation readings raised concerns about whether the Fed will be able to slow the pace of rate hikes.

    But futures for the Fed funds rate still show a strong likelihood of a half-point increase at the central bank’s policymaking meeting next week, rather than the three-quarter point hike instituted at the last four meetings.

    “Overall inflation is moving in the right direction, though at a slow pace,” said Kurt Rankin, senior economist at PNC. “The Federal Reserve’s tightening plans will remain aggressive until clear, consistent signs of inflation’s demise have been demonstrated.”

    The PPI report generally gets less attention that the corresponding Consumer Price Index, which measures prices paid by US consumers for goods and services. But this is a rare month in which the PPI report came out before the CPI report, which is due out Tuesday.

    That and the Fed meeting scheduled for Tuesday and Wednesday next week is making this inflation report of particular importance to investors.

    “Next Tuesday’s CPI release will be more important than today’s data, but with traders on edge, any indication that prices remain elevated and that inflation is more sticky than currently believed is a negative for markets,” said Chris Zaccarelli, Chief Investment Officer for Independent Advisor Alliance.

    Overall prices rose a seasonally adjusted 0.3% compared to October — the same monthly increase as was reported in both September and October — but were slightly higher than the 0.2% rise forecast by economists.

    Stripping out volatile food and energy prices, core PPI rose 6.2% for the year ending in November, down from the revised 6.8% increase the previous month. Economists had forecast only a 5.9% increase.

    Core PPI posted a 0.4% increase from October, a far bigger rise than the revised 0.1% month-over-month rise in that previous month, and twice as big as the 0.2% rise forecast by economists.

    [ad_2]

    Source link