Business Highlights: Biden and recession fears, Revlon woes
AP Interview: Biden says a recession is ‘not inevitable’
WASHINGTON (AP) — President Joe Biden says the American people are “really, really down” after a tumultuous two years with the coronavirus pandemic, volatility in the economy and now surging gasoline prices that are hitting family budgets. But in an interview with The Associated Press, Biden says a recession is not inevitable and he bristles at claims by Republican lawmakers that last year’s COVID-19 aid plan was fully to blame for inflation reaching a 40-year high. He calls that argument “bizarre.” Biden adds that while people are feeling down, he sees reason for optimism with the 3.6% unemployment rate and America’s relative strength in the world.
Wall Street tumbles on fears for economy as more rates rise
NEW YORK (AP) — Wall Street tumbled Thursday as worries roared back to the fore that the world’s fragile economy may buckle under higher interest rates. The S&P 500 fell 3.3% to more than reverse its brief rally from a day before. Analysts had warned of more big swings given deep uncertainties about whether other central banks can tiptoe the narrow path of hiking interest rates enough to get inflation under control but not so much that they cause a recession. Wall Street fell with stocks across Europe after central banks there followed up on the Federal Reserve’s big interest-rate hike on Wednesday with more of their own.
Fed’s aggressive rate hikes raise likelihood of a recession
WASHINGTON (AP) — Federal Reserve Chair Jerome Powell has pledged to do whatever it takes to curb inflation, now raging at a four-decade high and defying the Fed’s efforts so far to tame it. Increasingly, it seems, doing so might require the one painful thing the Fed has sought to avoid: A recession. A worse-than-expected inflation report for May helped spur the Fed to raise its benchmark interest rate by three-quarters of point Wednesday and to signal that more large rate hikes are likely coming. Economic history suggests that aggressive, growth-killing rate hikes could be necessary to finally control inflation. And typically, that is a prescription for a recession.
Musk aims to ease concerns in address to Twitter workers
SAN FRANCISCO (AP) — In an unusual move for what’s been an unusual takeover bid for Twitter by the world’s richest man, Tesla CEO Elon Musk addressed the social platform’s employees Thursday, even though his $44 billion offer has not yet been completed. Twitter CEO Parag Agrawal announced an all-hands meeting to employees in an email on Monday, saying they’d be able to submit questions in advance, according to The Wall Street Journal. Musk reached a deal to acquire Twitter in April, but he has clashed with the company repeatedly since then over the number of bots, or fake accounts, that exist on the social media platform.
Bank of England hikes interest rates but resists bolder move
LONDON (AP) — The Bank of England has raised interest rates by a quarter-percentage point, shrugging off pressure for a bolder move to combat price increases that have pushed inflation to a 40-year high. The bank’s monetary policy committee voted 6-3 on Thursday to boost its key rate to 1.25%, with the dissenters supporting a half-point increase. The U.S. Federal Reserve acted more aggressively Wednesday, raising its benchmark rate by three-quarters of a percentage point to a range of 1.5% to 1.75%. The U.K. central bank said its decision was based on an effort to contain inflation without choking off economic growth, which was just starting to recover from the coronavirus pandemic when food and energy prices began to rise worldwide.
Fewer Americans apply for jobless aid last week
WASHINGTON (AP) — Fewer Americans applied for unemployment benefits last week as the U.S. job market remains strong in the face of rising inflation and interest rates. Applications for jobless aid fell by 3,000 to 229,000 for the week ending June 11, the Labor Department reported Thursday. First-time applications generally represent the number of layoffs. Jobless claims application this week and last week, though still relatively low, were the highest since the first weeks of the year. The total number of Americans collecting jobless benefits for the week ending June 4 was 1,312,000. That figure has hovered near 50-year lows for months.
Biden signs new shipping law he says can cut consumer costs
WASHINGTON (AP) — President Joe Biden signed legislation Thursday meant to make shipping goods across oceans cheaper. It’s a move the White House says will help ease logistical costs for retailers that have remained high since the start of the coronavirus pandemic and helped fuel record inflation. The Ocean Shipping Reform Act passed unanimously by the Senate via voice vote in March after winning bipartisan House support. It empowers the Federal Maritime Commission to investigate late fees charged by carriers while prohibiting ocean carriers and marine terminals from refusing to fill available cargo space.
Revlon, beauty icon in crowded market, files for bankruptcy
NEW YORK (AP) — Revlon, a cosmetics maker that broke racial barriers and dictated beauty trends for much of the last century, is filing for Chapter 11 bankruptcy protection. The company has been a mainstay on store shelves since its founding 90 years ago in New York City as it oversaw a stable of household names, from Almay to Elizabeth Arden. Revlon failed to keep pace with changing tastes, however, slow to follow women as they traded flashy red lipstick for more muted tones in the 1990s. The company will continue to operate as it restructures debt.
The S&P 500 tumbled 123.22 points, or 3.3%, to 3,666.77. The Dow Jones Industrial Average fell 741.46 points, or 2.4%, to 29,927.07. The Nasdaq dropped 453.06 points, or 4.1%, to 10,646.10. The Russell 2000 index of smaller companies lost 81.30 points, or 4.7%, to 1,649.84.