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Business Highlights: Powell on the Economy, Claiming Help for the Unemployed

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Powell: Rising interest rates unlikely to trigger deep US recession

WASHINGTON (AP) — The last time the Federal Reserve faced inflation like today was in the early 1980s, raising interest rates to double-digit levels. In the process, it caused a deep recession and a steep rise in unemployment. On Thursday, Chairman Jerome Powell suggested he didn’t have to go very far for the Fed this time around. “I think we can avoid the very high social costs that Paul Volcker and the Federal Reserve had to bring to bring inflation down,” Powell said in an interview at the Cato Institute. . Raise the short-term borrowing rate to around 19% to keep very high inflation in check.

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Stocks recover from Wall Street stumble, close higher

NEW YORK (AP) — The stock market has recovered from a midday stumble and is on track for its first weekly gain in four weeks. The S&P 500 rose 0.7% on Thursday. The Nasdaq Composite and Dow Jones Industrial Average also closed higher after a tumultuous period. As the European Central Bank hiked interest rates the most in history, interest rate policy came under the spotlight as moves by the US Federal Reserve and other central banks to combat inflation. Meanwhile, Federal Reserve Chairman Jerome Powell reaffirmed the Fed’s commitment to keeping interest rates high “until the job is done” to control inflation.

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Yellen Pushes Biden’s Economic Plan in Battleground Michigan

WASHINGTON (AP) — Treasury Secretary Janet Yellen visited Ford’s Rouge electric car assembly plant in presidential battlefield Michigan to urge support for Democratic economic policies. After a tour of the production line, Yellen touted the Biden administration’s recent legislative successes. Yellen said she was more optimistic about the economy than she has been “for quite some time” and said she knew “we are headed in the right direction”. President Yellen’s visit to Detroit will highlight new legislation aimed at supporting the economy, boosting computer chip manufacturing, lowering prescription drug prices, expanding clean energy and revamping the nation’s infrastructure. It was part of a month-long tour, as well as the larger White House campaign.

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The number of Americans applying for unemployment assistance fell last week

WASHINGTON (AP) — The number of Americans filing for unemployment benefits hit its lowest level since May last week, despite repeated attempts by the Federal Reserve to cool the economy and keep inflation in check. depressed. Applications for unemployment assistance for the week ending Sept. 3 fell by 6,000 to 222,000, the Labor Department reported Thursday. First-time applications usually reflect layoffs. Smoothing out the weekly ups and downs, his four-week billing average dropped by 7,500 to 233,000. Employment in the US in 2022 is very strong despite the country facing higher interest rates and weaker economic growth.

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Long-term mortgage rates hit highest since 2008

WASHINGTON (AP) — Average US long-term mortgage rates rose again this week to their highest level in nearly 14 years. The Federal Reserve is sure to keep more potential buyers out of the housing market, which has cooled significantly since it began increasing benchmark borrowing. rate. Mortgage buyer Freddie Mac reported on Thursday that the 30-year rate jumped to 5.89%, his highest since November 2008, just after the collapse of the housing market sparked the Great Recession. did. The average interest rate on his 15-year fixed-rate mortgage, popular with people looking to refinance their mortgage, has topped 5% for the first time since 2009.

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UK ends fracking ban to limit energy prices and ease crisis

LONDON (AP) — UK Prime Minister Liz Truss says her Conservative government will cap domestic energy prices for homes and businesses to ease the cost of living crisis. She also said she would approve more North Sea oil drilling and lift a ban on fracking to boost Britain’s domestic energy supply. Truss told MPs on Thursday that the two-year ‘energy price guarantee’ means the average home bill for heating and electricity will be under £2,500 a year. The bill was due to increase to £3,500 annually from October. That’s three times what she cost a year ago. Critics say this means taxpayers will have to pay, not the energy companies that happen to be profitable.

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Homebuyers regain clout as housing market cools

LOS ANGELES (AP) — Homebuyers are regaining leverage at the bargaining table as the housing market slows, as new data from Redfin shows. On average, US homes purchased during his four weeks in August sold for less than the asking price. It hasn’t happened since at least March 2021, according to the real estate broker. Years of soaring home prices and skyrocketing mortgage rates remain a hurdle for many homebuyers, but as more homes sell for less than their asking price. , the housing market is at least tilted in favor of sellers.

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Cheaper Electric Vehicles Coming Despite High Battery Costs

WARREN, Mich. (AP) — Auto companies are rolling out more affordable electric vehicles that should appeal to a wider group of buyers. That’s despite the rising cost of batteries. The latest EV came out Thursday from General Motors, the Chevrolet Equinox small SUV. Prices start at around $30,000, and range is 250 miles (400 kilometers) on a single charge. For an additional fee, you can get ranges of 300 miles or 500 kilometers. GM won’t announce the exact price of the Equinox EV until closer to the launch date, which is about this time next year. But the SUV sits at the bottom of Edmunds.com’s price list of electric vehicles sold in the US. Currently, the average price of an EV is around $65,000.

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European Central Bank makes biggest interest rate hike in history

FRANKFURT, Germany (AP) — The European Central Bank has hiked its biggest interest rate in history to fight record inflation that is weighing on consumers and pushing 19 euro-using countries into recession. . The bank’s 25-member board has lifted key benchmarks by an unprecedented three-quarters of a percentage point. The ECB has been caught in a storm of rapid global interest rate hikes, following the US Federal Reserve and other central banks. Russia’s war in Ukraine has sped up inflation in Europe, and Russia has slashed its supply of cheap natural gas, which is used to heat homes, generate electricity and run factories. This caused gas prices to jump more than 10 times her.

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The S&P 500 was up 26.31 points (0.7%) to 4,006.18. The Dow Jones Industrial Average rose 193.24 points (0.6%) to 31,774.52. Nasdaq was up 70.23 points (0.6%) to 11,862.13. The Russell 2000 Index of Small Businesses rose 14.90 points, or 0.8%, to 1,846.91.

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