Inflation’s harsh realities on display as Fed officials meet
JACKSON HOLE, Wyoming (AP) — A half-hour drive or so from the resort where the high priests of international finance have convened in Jackson Hole, Wyoming, to discuss the world’s economic challenges, a food bank distributes meals from a commercial garage. Across the street, a collection of townhomes that will sell for millions is nearing completion. “Unparalleled luxury,” its website says, in a “truly relaxing oasis.” As the Federal Reserve’s annual economic symposium gets under way at a lodge in Grand Teton National Park, some of the very problems Fed officials are grappling with — high inflation, soaring rental costs and home prices, and stark economic inequality — are plainly visible near the idyllic setting.
Climate change alters life at Fed’s Jackson Hole conference
JACKSON HOLE, Wyoming (AP) — When officials of the Federal Reserve Bank of Kansas City sought a location for an annual economic symposium in 1981, they chose Jackson Hole, Wyoming, for a simple reason: It had fly-fishing. Paul Volcker, the Fed chairman at the time, was known to enjoy the pastime. Now, however, warmer waters in Jackson Lake and the Snake River it empties into have led the Park Service to urge anglers to restrict their fishing to the morning hours. Catch-and-release fishing is harder on the fish when water is warmer, and the fish are also harder to catch later in the day. It’s just one example of how climate change is confronting Fed officials during their annual summer symposium in Jackson Hole.
Government revision shows economy shrank 0.6% last quarter
WASHINGTON (AP) — The U.S. economy shrank at a 0.6% annual rate from April through June, the government said in an upgrade from its initial estimate. It marked a second straight quarter of economic contraction, which meets one informal sign of a recession. Most economists, though, have said they doubt the economy is in or on the verge of a recession, given that America’s job market remains robust, with strong hiring, low unemployment and widespread openings. In its revised estimate, the Commerce Department calculated that the nation’s gross domestic product contracted last quarter, though less than the 1.6% annual decline in the January-March period.
EXPLAINER: How do we know when a recession has begun?
WASHINGTON (AP) — The government has updated its estimate of the U.S. economy’s performance in the April-June quarter and confirmed what it had reported last month: That the economy shrank for two straight quarters. Six months of contraction is a long-held informal definition of a recession. Yet nothing is simple in the post-pandemic economy. Growth may be negative, but the job market is strong. Even as the economy shrank over the first half of this year, employers added 2.7 million jobs — more than in most entire years before the pandemic struck. While most economists — and Fed Chair Jerome Powell — have said they don’t think the economy is in recession, some analysts still predict that an economic downturn will begin later this year or next.
Labor board files complaint against Starbucks over pay offer
The National Labor Relations Board says Starbucks is violating U.S. labor law by withholding pay hikes and other benefits from stores that have voted to unionize. The labor board’s Seattle office filed the complaint late Wednesday. Starbucks offered $200 million in enhanced pay and benefits — including increased training — to non-union stores in May. The company says those benefits must be subject to bargaining at unionized stores. But the NLRB complaint says Starbucks is interfering with workers’ right to organize by making the offer. More than 220 U.S. Starbucks stores have voted to unionize since late last year.
Six months into war, Russian goods still flowing to US
BALTIMORE (AP) — Six months into the war in Ukraine, American companies — including federal contractors — continue to buy everything from birch wood flooring to weapons-grade titanium from major Russian corporations. This despite President Joe Biden’s insistence that the U.S. would crack down on Russia in response to its February 2022 invasion of its neighbor. The Associated Press found more than 3,600 shipments of wood, metals, rubber and more have arrived at U.S. ports from Russia since it began launching missiles and airstrikes into its neighbor in February. That’s a significant drop from the same period in 2021 when about 6,000 shipments arrived, but it still adds up to more than $1 billion worth of commerce a month.
Desert flooding damages Los Angeles to Phoenix highway
DESERT CENTER, Calif. (AP) — Officials say the main highway from Los Angeles to Phoenix has been damaged by a flash flood that washed out lanes on the eastbound side of Interstate 10 in the Southern California desert near the Arizona state line. Heavy rain from monsoonal thunderstorms Wednesday evening caused the latest round of flooding and also impacted other desert highways. The Interstate 10 washout occurred near the community of Desert Center in Riverside County, about 165 miles east of Los Angeles. The highway’s westbound lanes carrying Arizona to California traffic were initially closed but have reopened. Highway workers managed to open one eastbound lane Thursday morning. Forecasters say more flooding is possible.
Biden’s student loan plan: What we know (and what we don’t)
NEW YORK (AP) — President Joe Biden says many Americans will be able to have up to $10,000 in federal student loan debt forgiven in they make less than $125,000 a year. People who went to college on Pell grants can have up to $20,000 forgiven. Biden also says a pause on student loan payments will be extended until Dec. 31. Interest rates will remain at 0% until repayments start. Under an earlier extension announced in April, people who were behind on payments before the pandemic will automatically be put in good standing.
Congress wants to hear what Twitter whistleblower has to say
WASHINGTON (AP) — U.S. lawmakers are anxious to hear from Twitter’s former security chief, who has alarmed Washington with allegations that the influential social network misled regulators about its cyber defenses and efforts to control fake accounts. Leaders of several congressional panels are poring over the disclosures by respected cybersecurity expert Peiter Zatko, and calls on Capitol Hill for investigations are mounting. Zatko is due to testify next month at a Senate hearing. He has accused Twitter of deceptions involving its handling of “spam,” or fake, accounts, an allegation that is at the core of billionaire tycoon Elon Musk’s attempt to back out of his $44 billion deal to buy Twitter.
US stocks rise again as countdown to Fed speech nears end
NEW YORK (AP) — Stocks are rising to claw back more of their recent losses, as the countdown clicks closer to zero for a highly anticipated speech about interest rates. The S&P 500 was 0.7% higher Thursday in another relatively quiet day of trading. Stocks have drifted through mostly modest gains and losses since tumbling Monday to their worst day in months, as traders hold off on making big moves overall. Wall Street’s focus is on an economic summit at Jackson Hole, Wyoming, which has been the setting for market-defining announcements by the Federal Reserve in past years. The Fed’s chair is scheduled to speak Friday morning.