Business Highlights: Rising oil prices, the robust US job market
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Oil prices have risen. That’s making gas more expensive for US drivers and helping Russia’s war
FRANKFURT, Germany (AP) — Oil prices are up, and that affects people far and wide. Drivers pay more for gasoline, and truckers more for diesel. Russia is earning money that it can use to wage its war against Ukraine. Central bankers may see more inflation coming and keep interest rates high. Behind the recent bump in price is Saudi Arabia’s decision to slash how much oil it sends to global markets through the end of the year. Russia also is cutting back. And less supply means higher prices. Some analysts are betting oil could hit $100, while others foresee that mediocre growth in major economies like China will keep the lid on prices.
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Why the US job market has defied rising interest rates and expectations of high unemployment
WASHINGTON (AP) — Last year’s spike in inflation, to the highest level in four decades, was painful enough for American households. Yet the cure — much higher interest rates, to cool spending and hiring — was expected to bring even more pain. Grim forecasts from economists had predicted that as the Federal Reserve jacked up its benchmark rate ever higher, consumers and businesses would curb spending, companies would slash jobs and unemployment would spike as high as 7%. Yet so far, to widespread relief, the reality has been anything but: Inflation has tumbled from its peak of 9.1% in June 2022 to 3.7% on the back of the Fed’s rate hikes. Yet the unemployment rate, at a still-low 3.8%, has scarcely budged.
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Writers’ union reaches tentative deal with Hollywood studios to end historic strike
LOS ANGELES (AP) — The union representing screenwriters has reached a tentative agreement with Hollywood studios to end a historic strike after nearly five months. The deal is raising hopes that a crippling shutdown of movie and television filming could be near an end. Actors remain on strike, but the deal with writers could help them find a resolution soon as well. The Writers Guild of America announced the deal Sunday in a joint statement with the Alliance of Motion Picture and Television Producers. The agreement must be approved by the guild’s board and members. That could happen this week.
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Amazon is investing up to $4 billion in AI startup Anthropic in growing tech battle
SEATTLE (AP) — Amazon is investing up to $4 billion in artificial intelligence startup Anthropic and taking a minority stake in the company. The investment announced Monday underscores how Big Tech companies are pouring money into AI as they race to capitalize on the opportunities that a new generation of the technology is set to bring. Amazon and Anthropic said the deal is part of a broader collaboration to develop so-called foundation models, which underpin the wave of generative AI systems that have captured global attention. Under the agreement, Anthropic is making Amazon its primary cloud computing service and using the online retail giant’s custom chips as it part of its work to train and deploy its generative AI systems.
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Toymaker Lego will stick to its quest to find sustainable materials despite failed recycle attempt
COPENHAGEN, Denmark (AP) — Denmark’s Lego says it remains committed to its quest to find sustainable materials to reduce carbon emissions, even after an experiment by the world’s largest toymaker to use recycled bottles did not work. Lego said on Monday that it has “decided not to progress” with making its trademark colorful bricks from recycled plastic bottles made of polyethylene terephthalate, known as PET, after more than two years of testing “found the material didn’t reduce carbon emissions.” Still, the toymaker added that it remains “fully committed to making Lego bricks from sustainable materials by 2032.”
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Canadian auto workers to target General Motors after deal with Ford is ratified
DETROIT (AP) — Canadian auto workers say General Motors will be their next target after members ratified a new three-year labor contract with Ford. Unifor represents about 4,300 workers at three GM facilities in Canada It reached a strong deal with Ford and will try to negotiate a pattern agreement with GM. President Lana Payne said Monday the union has a lot of bargaining leverage with GM because a factory in Oshawa, Ontario, is working around the clock to build profitable Chevrolet pickups. Workers at Ford of Canada ratified a new deal on Sunday that raises base hourly pay for production workers by almost 20% over three years. So far Unifor has been able to avoid going on strike against the Detroit automakers, unlike its U.S. counterpart, the United Auto Workers.
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Interest rates will stay high ‘as long as necessary,’ the European Central Bank’s leader says
FRANKFURT, Germany (AP) — The head of the European Central Bank says interest rates will stay high long enough to restrict business activity for “as long as necessary” to beat back inflation because upward pressure on prices “remains strong.” Christine Lagarde said Monday that “strong spending on holidays and travel” and increasing wages were slowing the decline in price levels even as the economy in the 20 countries that use the euro currency stays sluggish. The ECB last week raised its benchmark deposit rate to an all-time high of 4% after a record pace of increases. Analysts think the ECB may be done raising rates given signs of increasing weakness in the European economy.
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Stock market today: Wall Street recoups some of last week’s loss but still on pace for an ugly month
NEW YORK (AP) — Wall Street clawed back some of its steep losses from last week, but September is still on track to be its worst month of the year. The S&P 500 rose 0.4% Monday, coming off its worst week in six months. The Dow added 43 points, and the Nasdaq composite gained 0.5%. Energy stocks led the way. Oil prices were mixed, but they’ve leaped since the summer. That’s helped raise expectations for interest rates to stay higher for longer as the Federal Reserve tries to drive down inflation. Treasury yields rallied, and they’re near their highest levels in more than a decade.
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Experimental treatment pushed by ALS patients gets day before FDA, but agency unconvinced it works
WASHINGTON (AP) — The Food and Drug Administration meets this week to consider a much-debated treatment for Lou Gehrig’s disease. The deadly neurological disease has few treatment options. NurOwn, a stem cell therapy, is at the center of a yearslong lobbying campaign by patients seeking access to experimental medicines. But the FDA has repeatedly rebuffed drugmaker Brainstorm. The agency says the company’s only study failed to show a benefit for patients. The review is the starkest test yet of FDA’s commitment to “regulatory flexibility” to help patients with rare, deadly conditions. Advocates see reasons for optimism. The FDA has approved two new treatments for ALS in the past year after intense lobbying by patients.
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The S&P 500 gained 17.38 points, or 0.4%, to 4,337.44. The Dow Jones Industrial Average rose 43.04 points, or 0.1%, to 34,006.88. The Nasdaq composite added 59.51 points, or 0.5%, to 13,271.32 The Russell 2000 index of smaller companies advanced 7.74 points, or 0.4% to 1,784.24.