As virus rages, US economy struggles to sustain a recovery
WASHINGTON (AP) — Home sales are booming. Stocks are setting record highs. Industrial production is clambering out of the ditch it fell into early this year. And yet the U.S. economy is nowhere close to regaining the health it achieved, with low unemployment, free-spending consumers and booming travel, before the coronavirus paralyzed the country in March. Not while the viral outbreak still rages and Congress remains deadlocked over providing more relief to tens of millions of people thrown out of work and to state and local governments whose revenue has withered.
Fed: Rates to stay ultra-low even after inflation picks up
WASHINGTON (AP) — The Federal Reserve announced a significant change in how it manages interest rates by saying it plans to keep rates near zero even after inflation has exceeded the Fed’s 2% target level. The change signifies that the Fed is prepared to tolerate a higher level of inflation than it generally has in the past. And it means that borrowing rates for households and businesses — for everything from auto loans and home mortgages to corporate expansion — will likely remain ultra-low for years to come. The new goal says that “following periods when inflation has been running persistently below 2%, appropriate monetary policy will likely aim to achieve inflation moderately above 2% for some time.”
More than 1 million Americans file for unemployment, again
WASHINGTON (AP) — Just over 1 million Americans applied for unemployment benefits last week, a sign that the coronavirus outbreak continues to threaten jobs even as the housing market, auto sales and other segments of the economy rebound from a springtime collapse. The Labor Department reported Thursday that the number of people seeking jobless aid last week dropped by 98,000 from 1.1 million the week before.
U.S. economy plunged an annualized 31.7% in second quarter
BALTIMORE (AP) — The U.S. economy shrank at an alarming annual rate of 31.7% during the April-June quarter as it struggled under the weight of the viral pandemic, the government estimated Thursday. It was the sharpest quarterly drop on record. The Commerce Department upgraded its earlier estimate of the U.S. gross domestic product last quarter, finding that the devastation was slightly less than the 32.9% annualized contraction it had estimated at the end of July.
More companies pledge to give workers time to vote
NEW YORK (AP) — A growing number of U.S. companies are pledging to give workers time off to vote in the presidential election this November. Starbucks said Thursday it will give its 200,000 U.S. partners information on registering and time off to vote or work at polling places. Walmart says it will give its 1.5 million U.S. workers up to three hours paid time off to vote and Apple is giving workers four hours off. Coca-Cola, Twitter and Uber are giving employees the day off. Organizers of such get-out-the-vote efforts say companies are eager to boost civic participation in response to the unrest across the country this year.
Walmart may join Microsoft in bid for video app TikTok
NEW YORK (AP) — Walmart said Thursday it may join Microsoft to buy the U.S. business of TikTok, the popular Chinese-owned video app that has come under fire from the Trump administration. Microsoft did not immediately respond to a request for comment Thursday. TikTok, through its fun, goofy videos, has gained hundreds of millions of users globally. But the U.S. is pushing its Chinese owner to sell the U.S. business if it wants to keep operating in the country. Walmart said in a statement that a partnership with Microsoft and TikTok could help it expand its advertising business and reach more shoppers.
Oil and gas industry assesses damage at refineries, plants
NEW YORK (AP) — The energy industry is assessing damage caused by storm surges and high winds as Hurricane Laura cut a dangerous path across the coastlines of Texas and Louisiana. Oil and gas producers evacuated more than half of their platforms and nearly all the rigs in the Gulf of Mexico. Companies had shut down refineries in the storm’s path. More than half of U.S. refining capacity is built along the Gulf Coast, where the storm made landfall early Thursday.
S&P 500 ticks up as ‘era of easy money’ looks set to last
NEW YORK (AP) — The S&P 500 ticked further into record territory on Thursday after the Federal Reserve made a major overhaul to its strategy, one that could keep interest rates low for longer. The benchmark index rose 0.2%, to another all-time high, but it veered through a jumbled day of trading to get there. Prices for stocks, bonds and gold all made several U-turns after Fed Chair Jerome Powell gave a highly anticipated speech. In it, he essentially said the Fed may continue efforts to prop up the economy even if inflation rises above its target level of 2% in some cases.
The S&P 500 gained 5.82 points, or 0.2%, to 3,484.55. The Dow Jones Industrial Average climbed 160.35 points, or 0.6%, to 28,492.27. The Nasdaq composite fell 39.72 points, or 0.3%, to 11,625.34. The Russell 2000 index of smaller-company stocks rose 4.37, or 0.3%, to 1,564.56.