Business Highlights: ‘Soft landing’ signs emerge at central banker meeting; Wall Street wilts
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Hopeful signs of an economic ‘soft landing’ emerge in Jackson Hole as Fed meets with world watching
JACKSON HOLE, Wyoming (AP) — Business these days in Jackson Hole, Wyoming, is still good — just not as robust as it was after the U.S. economy roared out of the pandemic recession. As the Federal Reserve prepares to hold its annual economic conference there, its policymakers are trying to guide the nation’s economy toward something akin to what’s happening in Jackson Hole. They have jacked up their key interest rate to a 22-year high to try to slow growth and bring inflation down to their 2% target. Even as they do so, the Fed’s policymakers hope to avoid tipping the economy into a recession — a notoriously difficult achievement that economists call a “soft landing.”
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Stock market today: Wall Street wilts as yields rise ahead of speech by Federal Reserve’s Powell
NEW YORK (AP) — Wall Street slumped to its worst day in three weeks, despite a blowout profit report from Nvidia. The S&P 500 fell 1.3% Thursday. The Dow sank 373 points, and the Nasdaq lost 1.9%. Nvidia is one of Wall Street’s most influential stocks and seemed to be headed toward a record close. But its gain faded through the day and nearly disappeared by the close. The rest of the stock market dropped as rising Treasury yields cranked up the pressure. Yields could rise more depending on what the Federal Reserve’s chair says in a highly anticipated speech Friday.
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Turkey’s central bank unleashes a big interest rate hike in another sign of an economic shift
ANKARA, Turkey (AP) — Turkey’s central bank has raised its key interest rate by an aggressive 7.5 percentage points, in a new sign of a return to more traditional economic policies. The bank hiked its policy rate to 25% on Thursday. The bank is backtracking from a rate-cutting course set by President Recep Tayyip Erdogan that’s been blamed for inflaming a cost-of-living crisis. Many households have been left struggling to afford rent and basic goods as inflation has surged. Central banks worldwide have been hiking rates to bring consumer price rises under control, but the Turkish central bank started cutting rates in late 2021 under pressure from Erdogan. He appointed a new economic team after being reelected in May.
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Starbucks’ Pumpkin Spice Latte turns 20, whether you like it or not
The seasonal drink that made pumpkin spice a star is marking two decades in the world. And unlike the autumn days it celebrates, there seems to be no chill in customer demand. Starbucks’ Pumpkin Spice Latte goes on sale Thursday in the U.S. and Canada. It’s the coffee giant’s most popular seasonal beverage, with hundreds of millions sold since its launch in 2003. And it has spawned a huge and growing industry. In the year ending July 29, Nielsen says U.S. sales of pumpkin-flavored products reached $802.5 million. That’s up 42% from the same period in 2019.
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Fewer Americans apply for jobless benefits as labor market keeps humming along
Applications for unemployment benefits fell again last week as America’s labor market continues to hum along despite attempts by the Federal Reserve to cool the economy and bring down inflation that’s still higher than optimal. The number of Americans applying for jobless benefits fell last week by 10,000, to 230,000 the week ending August 19, the Labor Department reported Thursday. Jobless claim applications are seen as reflective of the number of layoffs in a given week. In total, about 1.7 million people were collecting unemployment benefits the week that ended August 12, about 9,000 fewer than the previous week.
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Journalism has seen a substantial rise in philanthropic spending over the past 5 years, a study says
NEW YORK (AP) — A study points to a “substantial” increase in philanthropic funding for journalism over the past five years, particularly to outlets that serve poor and minority communities. The struggling news industry is increasingly relying on donors and subscriptions to make up for the collapse of the advertising market over the past two decades. A bigger push for philanthropic spending for journalism is expected this fall. The author of the study, by NORC at the University of Chicago, said news organizations need to tighten their ethical rules to reflect this new reality, by writing specific guidelines that govern what money they take and how it is disclosed to consumers.
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Shein and Forever 21 team up in hopes of expanding reach of both fast-fashion retailers
NEW YORK (AP) — Fast fashion retailers Shein and Forever 21 are going into business together. Under a partnership agreement announced Thursday, the Chinese-founded Shein will acquire about one-third interest in Sparc Group, Forever 21’s operator. Sparc will also become a minority shareholder in Shein. The deal is expected to expand Forever 21’s distribution on Shein’s global e-commerce platform, which has attracted 150 million online users. In turn, the partnership “also offers the opportunity to test” Shein product sales and returns in physical Forever 21 stores across the U.S., the companies said.
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Nordstrom’s results reflect cautious consumer spending, echoing department store sector blues.
NEW YORK (AP) — Nordstrom says its sales and profits fell in its fiscal second quarter, joining its department store peers coping with shoppers’ cautious spending. But the Seattle-based upscale department store’s results Thursday still topped Wall Street expectations. Nordstrom’s sales were affected by the timing of the company’s anniversary sale, with one week falling into the third quarter this year compared to one day in 2022. Moreover, last year’s results included a full quarter of sales from its Canadian operations, which it wound down in June of this year. Nordstrom said it expects a revenue decline between 4% to 6% for the year compared with a year ago. Its stock rose 4% in after-hours trading.
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Average long-term US mortgage rate jumps to 7.23% this week to highest level since June 2001
LOS ANGELES (AP) — The average long-term U.S. mortgage rate climbed further above 7% this week to its highest level since 2001, another blow to prospective homebuyers grappling with rising home prices and a stubbornly low supply of properties on the market. Mortgage buyer Freddie Mac said Thursday that the average rate on the benchmark 30-year home loan climbed to 7.23% from 7.09% last week. A year ago, the rate averaged 5.55%. It’s the fifth consecutive weekly increase for the average rate. High rates can add hundreds of dollars a month in costs for borrowers, limiting how much they can afford in a market already unaffordable to many Americans.
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Nigeria’s unemployment rate falls to 4.1%, using new methodology. Analysts say it’s an undercount
ABUJA, Nigeria (AP) — Nigeria’s statistics agency says the unemployment rate now stands at 4.1%. It’s a multi-decade low but analysts say it’s an undercount. The National Bureau of Statistics, which classifies the employed as those working for at least one hour a week, reported the unemployment data in a new labor force report on Thursday. Analysts say it doesn’t reflect the true number of the unemployed in Nigeria, where many have lost their jobs as a result of surging inflation.
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The S&P 500 fell 59.70 points, or 1.3%, to 4,736.31. The Dow Jones Industrial Average fell 373.56 points, or 1.1%, to 34,099.42. The Nasdaq composite fell 257.06 points, or 1.9%, to 13,463.97. The Russell 2000 index of smaller companies fell 23.75 points, or 1.3%, to 1,846.28.