Business Highlights: Inflation cools, Wall Street gains
US inflation and consumer spending cooled in December
WASHINGTON (AP) — The Federal Reserve’s preferred inflation gauge eased further in December, and consumer spending fell — the latest evidence that the Fed’s series of interest rate hikes are slowing the economy. Prices rose 5% last month from a year earlier, down from the 5.5% year-over-year increase in November. It was the third straight drop. Consumer spending fell 0.2% from November to December and was revised lower to show a drop of 0.1% from October to November. Last year’s holiday sales were sluggish for many retailers, and the overall spending figures for the final two months of 2022 were the weakest in two years.
Wall Street adds more to its big January after strong week
NEW YORK (AP) — Stocks closed higher on Wall Street, marking the market’s third winning week in the last four. The S&P 500 rose 0.2% Friday after giving up most of an earlier gain. The Nasdaq composite climbed 0.9%, and the Dow ended up about 0.1%. American Express helped lead the way. It jumped after giving a profit forecast that topped expectations. Next week could be even busier for markets. The Federal Reserve is expected to announce its latest increase to interest rates. A report on Friday showed that inflation is continuing to cool, raising hopes for a smaller increase that’s less painful.
Study: Enough rare earth minerals to fuel green energy shift
The world is trying to switch from electricity produced by burning fossil fuels to cleaner wind and solar power, but some people have worried that there aren’t enough rare earth minerals to make the green electricity switch. A new study Friday finds that the planet has enough of the 17 different types of materials needed, but will have to ramp up mining. Scientists say it will add a bit to pollution, but be offset by savings in getting rid of dirty power plants. The study doesn’t look at minerals, like lithium, for batteries or cars. That’s a tougher issue that will be studied next.
UK Treasury chief: Tax cuts must wait for inflation to fall
LONDON (AP) — Britain’s Treasury chief says taming inflation is more important than cutting taxes. Jeremy Hunt is resisting calls from some in the governing Conservative Party for immediate tax breaks for businesses and voters. At a speech Friday in London, Hunt said “the best tax cut right now is a cut in inflation.” The U.K.’s annual inflation rate hit a four-decade high of 11.1% in October, fueling a cost-of-living crisis and a wave of strikes. It has since eased but still reached a painful 10.5% in December and is the highest since the 1980s. Hunt said he wanted Britain to be a low-tax economy but “with volatile markets and high inflation, sound money must come first.”
Low-cost fashion chain H&M reports 4th-quarter loss
STOCKHOLM (AP) — Low-cost fashion brand H&M says its net profit for the year ending November 2022 fell 68%, while it took a hit of 864 million Swedish kronor ($84 million) in the fourth quarter. It said it was affected by closing its business in Russia and the hikes in raw materials and freight costs, combined with a historically strong U.S. dollar. Chief Executive Helena Helmersson said Friday that although 2022 was “a turbulent year,” the Sweden-based company noted overall full-year sales increased by 6%. After Russia’s offensive in Ukraine in February, H&M Group first paused all sales in Russia and later announced that it was winding down the business in the country.
AmEx profits fall 9% as customers fall behind on payments
NEW YORK (AP) — American Express saw its fourth-quarter profits fall by 9%, as the credit card giant had to set aside significantly more money to cover potentially bad loans. The company saw charge offs and delinquencies rise, a troubling sign for a company whose customer base is usually well-to-do and extremely creditworthy. The New York-based company said it earned a profit of $1.57 billion in the quarter, or $2.07 a share, that is down from $1.72 billion, or $2.18 a share, in the same period a year earlier. That is below what analysts had forecasted.
Third Trader Joe’s store votes to unionize
A Trader Joe’s store in Louisville, Kentucky, has voted to unionize. The National Labor Relations Board says workers at the store voted 48-36 in favor of the union on Thursday evening. The store will now join two other unionized Trader Joe’s stores that have already begun bargaining for a contract with the grocer. Trader Joe’s stores in Massachusetts and Minnesota were the first to unionize last summer. Workers say they’re seeking higher pay, better benefits and safer working conditions. Trader Joe’s didn’t respond to a request for comment Friday.
The S&P 500 rose 10.13 points, or 0.2%, to 4,070.56. The Dow Jones Industrial Average rose 28.67 points, or 0.1%, to 33,978.08. The Nasdaq composite rose 109.30 points, or 0.9%, to 11,621.71. The Russell 2000 index of smaller companies rose 8.39 points, or 0.4%, to 1,911.46.