Business Highlights: Economic contraction, stopgap bill

September 29, 2022 GMT

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US economy drops at 0.6% annual rate from April through June

WASHINGTON (AP) — Battered by surging consumer prices and rising interest rates, the U.S. economy shrank at a 0.6% annual rate from April through June, the government announced Thursday, unchanged from its previous second-quarter estimate. It marked the second consecutive quarter of economic contraction, one informal rule of thumb for a recession. Most economists, citing a strong and resilient American job market, believe the world’s biggest economy is not yet in a downturn. Consumer spending grew at a 2% annual rate, but that gain was offset by a drop in business inventories and housing investment.

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Wall Street drops back to lowest since 2020 as fear returns

NEW YORK (AP) — Stocks are back to falling on Wall Street as worries about a possible recession and rising bond yields put the squeeze back on markets. The S&P 500 fell 2.1% Thursday, reaching its lowest level since late 2020. The washout erased the index’s gains in a big rally the day before. The Dow Jones Industrial Average fell 1.5% and the Nasdaq lost 2.8%. For markets to really turn higher, analysts say investors will need to see a break from the high inflation that’s swept the world. That hasn’t arrived yet, and even more data arrived Thursday showing the opposite.

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Senate passes stopgap bill to avert shutdown, aid Ukraine

WASHINGTON (AP) — Congress is moving quickly to avoid a government shutdown. The Senate on Thursday passed a short-term spending bill that would finance federal agencies into mid-December. The legislation also provides another round of military and economic aid to Ukraine as it seeks to repel Russia’s invasion. The bill finances the federal government through Dec. 16, giving lawmakers time to agree on a larger government funding package after the midterm election. Assistance and money to help low-income families afford their heating bills this winter was also included in the bill, which now heads to the House for consideration.

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House approves scaled-down bill targeting Big Tech dominance

WASHINGTON (AP) — The House has approved sharply scaled-down legislation targeting the dominance of Big Tech companies by giving states greater power in antitrust cases and increasing money for federal regulators. The bipartisan measure pales in comparison with a more ambitious package aimed at reining in Meta, Google, Amazon and Apple and cleared by key House and Senate committees. That proposal has languished for months, giving the companies time for vigorous lobbying campaigns against it. The Biden administration endorsed the more limited bill this week. It now heads to the Senate for consideration. House conservatives objected to the proposed revenue increase for the antitrust regulators, arguing there’s been brazen overreach by the Federal Trade Commission under Biden.

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UK’s Truss defends economic plan that sent pound tumbling

LONDON (AP) — British Prime Minister Liz Truss has defended her economic plan that roiled financial markets, saying she’s willing to make “difficult decisions” to get the economy growing. Truss gave her first public comments Thursday since her government last week announced billions in unfunded tax cuts that drove the pound currency to record lows. She says Britain is facing a “very, very difficult” economic situation. But she says the problems are global and spurred by Russia’s invasion of Ukraine. The turmoil has seen the opposition Labour Party open up a widening lead in opinion polls. A YouGov survey released Thursday gave Labour a 33-point lead over the Conservatives, up from an 8-point lead a week ago.

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US long-term mortgage rates up for 6th week; 30-year at 6.7%

WASHINGTON (AP) — Average long-term U.S. mortgage rates rose this week for the sixth straight week, marking new highs not seen in 15 years. Mortgage buyer Freddie Mac reports that the average on the key 30-year rate climbed to 6.70% from 6.29% last week. The average rate on 15-year, fixed-rate mortgages, popular among those looking to refinance their homes, jumped to 5.96% from 5.44% last week. Rapidly rising mortgage rates threaten to sideline even more homebuyers after more than doubling in 2022. Last year, prospective homebuyers were looking at rates well below 3%.

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Ex-eBay execs get prison time for bizarre harassment scheme

BOSTON (AP) — A former eBay Inc. executive has been sentenced to almost five years in prison for leading a scheme to terrorize the creators of an online newsletter that included sending live spiders, cockroaches, a funeral wreath and other disturbing deliveries to their home. David Steiner and Ina Steiner were the targets of the harassment campaign. David Steiner told the court Thursday that James Baugh and other eBay employees made their lives “a living hell.” Another former eBay executive, David Harville, was sentenced later Thursday to two years behind bars for his role in the scheme.

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Fewer people seek US unemployment aid amid solid hiring

WASHINGTON (AP) — The number of Americans filing for jobless benefits dropped last week, a sign that few companies are cutting jobs despite high inflation and a weak economy. Applications for unemployment benefits for the week ending Sept. 24 fell by 16,000 to 193,000, the Labor Department reported Thursday. Last week’s number was revised down by 4,000 to 209,000. First-time applications generally reflect layoffs. The current figures are very low historically and suggest Americans are benefiting from an unusually high level of job security.

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The S&P 500 dropped 78.57 points, or 2.1%, to 3,640.47. The Dow Jones Industrial Average shed 458.13 points, or 1.5%, to 29,225.61. The Nasdaq tumbled 314.13 points, or 2.8%, to 10,737.51. The Russell 2000 index of smaller companies fell 40.31 points, or 2.4%, to 1,674.93.