WASHINGTON (AP) — Fed Chair Jerome Powell says the Federal Reserve will push rates higher than previously expected and keep them there longer to fight a stubborn bout of inflation. In a speech to the Brookings Institution on Wednesday, Powell also signaled that the Fed may increase its key interest rate by a smaller increment at its December meeting, only a half-point after four straight three-quarter point hikes. But Powell also stressed that the smaller size shouldn’t be seen as a sign the Fed will let up on its inflation fight anytime soon. Financial markets rallied in response to Powell’s suggestion that rate increases will slow.
EU warns Musk to beef up Twitter controls ahead of new rules
LONDON (AP) — A top European Union official has warned Elon Musk that the company needs to beef up to protect users from hate speech, misinformation and other harmful content to avoid violating new rules. The EU’s commissioner for digital policy, Thierry Breton, told Musk on Wednesday that the social media platform will have to significantly increase efforts to comply with the rules that threaten big fines or even a ban in the 27-nation bloc if tech giants don’t comply. The two held a video call to discuss Twitter’s preparedness for the rules. Breton says Musk told him that the new EU rules were “a sensible approach to implement on a worldwide basis.”
US revises up last quarter’s economic growth to 2.9% rate
WASHINGTON (AP) — The U.S. economy grew at a 2.9% annual rate from July through September despite high interest rates and chronic inflation, the government said Wednesday in an upgrade from its initial estimate. Last quarter’s rise in the U.S. gross domestic product, or the economy’s total output of goods and services, followed two straight quarters of contraction. That decline in output had raised fears that the economy might have slipped into a recession in the first half of the year. Since then, though, most signs have pointed to a resilient if slow-moving economy. Wednesday’s report showed that the restoration of growth in the July-September period was led by solid gains in exports and consumer spending that was stronger than originally reported.
House votes to avert rail strike, impose deal on unions
WASHINGTON (AP) — Congress is moving urgently to head off the looming U.S. rail strike. The House passed a bill Wednesday that would bind companies and workers to a proposed settlement reached in September that failed to gain the support of all 12 unions involved. The bill now goes to the Senate for consideration. It would impose a compromise labor agreement brokered by President Joe Biden’s administration. That agreement was ultimately voted down by four of the 12 unions representing more than 100,000 employees at large freight rail carriers. The unions have threatened to strike if an agreement can’t be reached before a Dec. 9 deadline.
Inflation in Europe eases but still in painful double digits
FRANKFURT, Germany (AP) — Inflation in Europe has eased for the first time in more than a year as energy prices drifted down from painful highs. But the double-digit rate still hovers near a record that has robbed consumers of their spending power and led economists to predict a recession. The European Union’s statistics agency said Wednesday that consumer price index in the 19 countries that use the euro currency hit 10% in November from a year earlier. That was a drop from 10.6% in October, the first decrease since June 2021. The figure reflected prices for food, alcohol and tobacco rising faster even as energy prices slipped to a 34.9% rate of increase from an astronomical 41.5% in October.
Raimondo: US isn’t seeking to sever economic ties with China
WASHINGTON (AP) — The United States isn’t seeking to sever economic ties with China — even as it takes steps to protect America’s technological and military prowess from Beijing. That’s according to U.S. Commerce Secretary Gina Raimondo. She spoke to reporters in advance of a speech Wednesday on the Biden administration’s China policy. Relations between the world’s two biggest economies have chilled over the last decade, partly because the communist government in Beijing has cracked down on dissent in Hong Kong and on Muslims in the northwestern region of Xinjiang. The Biden administration has kept President Donald Trump’s tariffs on China and has stepped up a campaign to keep the Chinese from acquiring sensitive technology that could speed its military buildup.
Higher food prices worsen hunger crisis this holiday season
WASHINGTON (AP) — What many Americans hoped would be the first normal holiday season in three years has instead been thrown into crisis by inflation, with Christmas on the horizon. Food banks and charities across the country are reporting higher than expected levels of food insecurity as prices rise and food becomes less accessible to millions of American families. Although the pandemic has largely faded, months of rising prices have driven working families back to the food bank lines. And that’s left charitable organizations struggling to meet the demand.
US job openings fell in October to still-high level
WASHINGTON (AP) — U.S. job openings dropped in October but remained high, a sign that businesses became slightly less desperate for workers as the Federal Reserve ramps up interest rates in an effort to cool the economy. Employers posted 10.3 million job vacancies in October, down from 10.7 million in September, the Labor Department said Wednesday. Even with the drop, openings were slightly lower in August, when they dipped below 10.3 million before rebounding the following month.
DoorDash cuts 1,250 jobs after pandemic hiring surge
Delivery company DoorDash is eliminating more than 1,200 corporate jobs, about 6% of its total workforce, saying it hired too many people when demand for its services increased during the COVID-19 pandemic. CEO Tony Xu said in a message to employees on Wednesday that DoorDash was undersized before the pandemic and sped up hiring to catch up with its growth. It is cutting approximately 1,250 people. Impacted employees will receive 17 weeks of compensation and their February 2023 stock vest. All health benefits will continue through March 31, 2023.
The S&P 500 rose 122.48 points, or 3.1%, to 4,080.11. The Dow Jones Industrial Average rose 737.24 points, or 2.2%, to 34,589.77. The Nasdaq rose 484.22 points, or 4.4%, to 11,468. The Russell 2000 index of smaller companies rose 50.03 points, or 2.7%, to 1,886.58.