Business Highlights: Fed’s Powell warns on inflation; Home sales continue to fall
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Fed Chair Powell: Slower economic growth may be needed to conquer stubbornly high inflation
WASHINGTON (AP) — Federal Reserve Chair Jerome Powell said inflation remains too high and that bringing it down to the Fed’s target level will likely require a slower-growing economy and job market. Powell noted that inflation has cooled significantly from a year ago. But he cautioned that it’s not yet clear whether inflation is on a steady path back to the Fed’s 2% target. “A few months of good data are only the beginning of what it will take to build confidence that inflation is moving down sustainably toward our goal,” Powell said in remarks to the Economic Club of New York. “We cannot yet know how long these lower readings will persist or where inflation will settle over coming quarters.”
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Home sales fell again in September as surging mortgage rates, rising prices discouraged homebuyers
LOS ANGELES (AP) — Sales of previously occupied U.S. homes fell for the fourth month in a row in September, held back by surging mortgage rates and a thin supply of properties on the market. Existing home sales fell 2% last month from August to a seasonally adjusted annual rate of 3.96 million, the National Association of Realtors said Thursday. That’s just above the 3.9 million unit pace that economists were expecting, according to FactSet. Sales sank 15.4% compared with the same month last year. The national median sales price rose 2.8% from September last year to $394,300. It slipped 3.1% from August.
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EU demands Meta, TikTok detail efforts to curb disinformation from Israel-Hamas war
LONDON (AP) — The European Union has demanded Meta and TikTok detail their efforts to curb illegal content and disinformation during the Israel-Hamas war. The 27-nation bloc’s executive branch on Thursday formally requested that the social media companies provide information on how they’re complying with pioneering new digital rules aimed at cleaning up online platforms. Meta and TikTok were asked to explain what they’ve done to reduce the risk of spreading and amplifying terrorist and violent content, hate speech and disinformation. The Israel-Hamas war is putting the new digital rules to the test. Elon Musk’s social media platform X faced the EU’s first formal request under the rules last week.
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Applications for jobless benefits fall to lowest level in more than 8 months
Applications for U.S. unemployment benefits fell to their lowest level in eight months last week as businesses continue to retain workers despite elevated interest rates meant to cool the economy and labor market. The Labor Department reported Thursday that jobless claim applications fell by 13,000 to 198,000 for the week ending Oct. 14. That’s the fewest since January. Jobless claim applications are considered a proxy for layoffs. Despite the low level of weekly first-time jobless benefit applications, the number of Americans remaining on the unemployment rolls — known as “continuing claims” — jumped to its highest level in three months.
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Average long-term mortgage rate surges to 7.63%, holding at highest level since 2000
LOS ANGELES (AP) — The cost of financing a home surged again this week, keeping the average long-term U.S. mortgage rate at its highest level since December 2000. The average rate on the benchmark 30-year home loan rose to 7.63% from 7.57% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.94%. As mortgage rates rise, they can add hundreds of dollars a month in costs for borrowers, limiting how much they can afford in a market already out of reach for many Americans. They also discourage homeowners who locked in far low rates two years ago, when they were around 3%, from selling.
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American Airlines posts $545 million loss on higher labor costs in a time of big profits for rivals
DALLAS (AP) — American Airlines is reporting a $545 million loss for the third quarter due to higher labor costs. And it is cutting its forecast of full-year profit. The airline said Thursday that its results were dragged down by nearly $1 billion in special charges related to a new contract with pilots. American’s loss stands in contrast with profits of more than $1 billion turned in by its two closest rivals, United and Delta, which also have expensive new contracts with their pilots. American’s revenue is about flat with last year, while United and Delta saw increases of more than 10% each.
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Union Pacific railroad’s quarterly profit falls 19% as volumes slow and costs remain high
OMAHA, Neb. (AP) — Union Pacific’s third-quarter profit fell 19% as the railroad hauled about 3% fewer shipments and costs remained high, but the average speed of its trains improved 5% as new CEO Jim Vena began to tweak the operations. Union Pacific said Thursday it earned $1.53 billion, or $2.51 per share. Those results topped Wall Street expectations. Vena says he’s focused on improving safety and service at the railroad. More cuts are possible but major changes aren’t expected because Union Pacific already overhauled its operation several years ago. The railroad’s revenue slipped 10% to $5.9 billion in the quarter because of the lower volumes and the lag between when fuel prices increase and when the railroad’s fuel surcharge kicks in.
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Nokia plans to cut up to 14,000 jobs after sales and profits plunge in a weak market
HELSINKI (AP) — Telecom gear maker Nokia says it’s planning to cut up to 14,000 jobs worldwide, or 16% of its workforce, as part of a push to reduce costs following a plunge in third-quarter sales and profit. The Finnish company that is one of the world’s main suppliers of high-speed 5G wireless networks said Thursday that it’s trying “to navigate the current market uncertainty.” Nokia says it’s aiming to slash 800 million euros to 1.2 billion euros in costs by the end of 2026. That’s expected to lead to a reduction from 86,000 employees to between 72,000 and 77,000 over that time period.
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The S&P 500 fell 36.60 points, or 0.8%, to 4,278.00. The Dow Jones Industrial Average fell 250.91 points, or 0.7%, to 33,414.17. The Nasdaq composite fell 128.13 points, or 1%, to 13,186.18. The Russell 2000 index of smaller companies fell 26.11 points, or 1.5% to 1,702.70.