Business News

Federal Reserve’s favored inflation gauge shows price pressures easing as rate cuts near

WASHINGTON (AP) — An inflation measure closely tracked by the Federal Reserve remained low last month, extending a trend of cooling price increases that clears the way for the Fed to start cutting its key interest rate next month for the first time in 4 1/2 years. Prices rose just 0.2% from June to July, up a tick from the previous month’s 0.1% increase. Compared with a year earlier, inflation was unchanged at 2.5%. The slowdown in inflation could upend Donald Trump’s efforts to saddle Vice President Kamala Harris with blame for rising prices. Still, despite the near-end of high inflation, many Americans remain unhappy with sharply higher average prices for such necessities as gas, food and housing compared with pre-pandemic levels.

Canadian rail union says it has filed lawsuits challenging back-to-work orders

The Teamsters union that represents workers at both of Canada’s largest freight railroads has filed the lawsuits it promised challenging the orders that forced employees back to work and got the trains moving again. The head of the Teamsters Canada Rail Conference said Friday that “we are confident that the law is on our side, and that workers will have their voices heard.” The union doesn’t want to let the precedent stand that the government can block a strike and take away a union’s leverage in negotiations. Prime Minister Justin Trudeau’s government intervened in this contract dispute after both Canadian National and CPKC locked out their workers Aug. 22.

Inflation fell to 2.2% in Europe, clearing the way for a European Central Bank rate cut in September

FRANKFURT, Germany (AP) — Inflation is down in Europe. August’s figure is only 2.2%, down from 2.6% in July. The pace of consumer price increases in the 20 countries that use the euro is now close to the 2% goal set out by the European Central Bank, the monetary authority for the eurozone. The figure is more evidence that the coast is clear for the ECB to cut interest rates at its September meeting.

In New Orleans, nonprofits see new money and new inclusive approach from the NBA Foundation

NEW ORLEANS (AP) — The National Basketball Association formalized its giving over the past four years through a new $300 million grantmaking arm. The NBA Foundation sends flexible funding to nonprofits focused on boosting economic opportunity for Black youth in its teams’ cities. Recipients report few strings attached and comprehensive application processes, a forward-thinking model they’d like to see adopted by other foundations and professional athletic teams. The research group Candid says funding specifically in support of Black people made up about 2% of overall philanthropy in the U.S. from 2006 to 2017. Candid says giving for Black people during that period peaked the year after a police officer in 2014 shot and killed Michael Brown in Ferguson, Missouri.

Wall Street rally helped boost gains for 401(k) plan savers in the first half of 2024

LOS ANGELES (AP) — Strong growth for stocks on Wall Street this year have helped juice gains for savers with retirement accounts. The average 401(k) plan balance stood at $127,100 at the end of the second quarter, up 13% from the same period last year, according to Fidelity Investments. The median 401(k) plan balance was just $29,200 at the end of the second quarter, an increase of 17% from a year earlier. The gains came as the stock market crushed multiple record highs amid a wave of investor enthusiasm over artificial intelligence developments that have fueled demand for shares in Big Tech stocks.

Stock market today: Wall Street drifts after inflation report confirms price increases are cooling

Stock indexes on Wall Street are mixed, shedding some of their early gains following a positive report on inflation. The S&P 500 was up 0.1% in midday trading Friday and the Nasdaq was up 0.3%. The Dow Jones Industrial Average slipped 84 points, or 0.2%, a day after setting an all-time high. An inflation measure closely tracked by the Federal Reserve remained low last month, keeping the central bank on track to cut rates at its upcoming meeting. Chipmakers were broadly higher, led by Marvell Technology, which climbed 8.9% after hitting Wall Street’s sales and profit targets. Treasury yields were mixed in the bond market. Oil prices fell.

Japan’s defense ministry seeks record budget as it faces growing threat from China

TOKYO (AP) — Japan’s Defense Ministry has sought a record 8.5 trillion yen or $59 billion budget for the next year to fortify its deterrence on southwestern islands against China’s increasing threat. Defense officials are also focusing on unmanned weapons and artificial intelligence to make up for the declining number of servicemembers as a result of the country’s shrinking population. The ministry’s request on Friday for 2025 marks the third year of Japan’s rapid five-year military buildup plan through 2027. It will make it the world’s third-largest military spender after the United States and China. Tokyo has been rapidly building up the defense of the southwestern region in recent years amid China’s growing military threats and tension in the regional seas.

US economic growth for last quarter is revised up to a solid 3% annual rate

WASHINGTON (AP) — The U.S. economy grew last quarter at a healthy 3% annual pace, fueled by strong consumer spending and business investment, the government said in an upgrade of its initial assessment. The Commerce Department had previously estimated that the nation’s gross domestic product expanded at a 2.8% rate from April through June. The second-quarter growth marked a sharp acceleration from a sluggish 1.4% growth rate in the first three months of 2024. Consumer spending, which accounts for about 70% of U.S. economic activity, rose at a 2.9% annual rate last quarter, up from 2.3% in the government’s initial estimate. Thursday’s report reflected an economy that remains resilient while still gradually slowing under the pressure of continued high interest rates.

Fewer Americans file for jobless claims as US labor market continues to defy elevated interest rates

The number of Americans filing for unemployment benefits fell slightly last week as the U.S. labor market remains healthy in the face of high interest rates. Jobless claims ticked down by 2,000 to 231,000 for the week of Aug. 24, the Labor Department reported Thursday. That’s just below the 232,000 new filings analysts were expecting. The four-week average of claims, which evens out some of the week-to-week volatility, fell by 4,750 to 231,500. Weekly filings for unemployment benefits, which are considered a proxy for layoffs, remain low by historic standards. The total number of Americans collecting jobless benefits rose by 13,000 to 1.87 million for the week of Aug. 17.

Average rate on a 30-year mortgage eases to 6.35%, its lowest level in more than a year

The average rate on a 30-year mortgage eased for the second week in a row and remains at its lowest level in more than a year. That’s good news for prospective homebuyers facing home prices near all-time highs. Mortgage buyer Freddie Mac said Thursday that the rate fell to 6.35% from 6.46% last week. A year ago, the rate averaged 7.18%. Mortgage rates are expected to keep trending lower overall this year. That’s due to signs of waning inflation and a cooling job market, which have raised expectations that the Federal Reserve will cut its benchmark interest rate next month for the first time in four years.