AP Business SummaryBrief at 11:37 p.m. EDT
Stocks end September down 9.3%, worst month since March 2020
Wall Street closed out a miserable September with a loss of 9.3%, the worst monthly decline since March 2020. The S&P 500 fell 1.5% Friday and is at its lowest level in almost two years. The benchmark index has lost ground for six of the last seven weeks and posted its third straight losing quarter. The Dow Jones Industrial Average lost 1.7% and the Nasdaq fell 1.5%. Nike fell sharply after the company had to slash prices to clear inventories, while Carnival dropped following weaker-than-expected quarterly results. Bond markets were showing more calm as yields relaxed.
Inflation hits record 10% in 19 EU countries using euro
FRANKFURT, Germany (AP) — Inflation in the European countries using the euro currency has broken into double digits as prices for electricity and natural gas soar. EU statistics agency Eurostat reported Friday that consumer prices in the 19-country eurozone rose a record 10% in September from a year earlier, up from an annual 9.1% in August. Only a year ago, inflation was as low as 3.4%. Price increases are at their highest level since record-keeping for the euro started in 1997. The rise in inflation signals a looming winter recession for one of the globe’s major economies as higher prices undermine consumers’ spending power.
Resilient US consumers spend slightly more in August
WASHINGTON (AP) — Consumers spent a bit more in August than the previous month, a sign the economy is holding up even as inflation lifts prices for food, rent, and other essentials. Americans boosted their spending at stores and for services such as haircuts by 0.4% in August, after it fell 0.2% in July, the Commerce Department said Friday. The government’s report also showed that an inflation gauge closely monitored by the Federal Reserve rose 0.3% last month, faster than July.
Newsom relaxes refinery rules as California gas prices soar
SACRAMENTO, Calif. (AP) — California Gov. Gavin Newsom has called on state regulators to relax rules on oil refineries in an effort to lower soaring fuel prices. According to AAA, the average cost of a gallon of gas in California is $6.30. That’s far above the national average of $3.80. Oil refineries have to produce a specific blend of gas in the summer months that is designed to lower pollutants. Newsom wants to allow them to switch to the cheaper winter blend earlier than normal. The oil industry says that’s an acknowledgement that state regulations play a role in rising prices. Newsom also called for a new tax on oil company profits.
Unpaid internships face new scrutiny as barriers to careers
Unpaid internships are facing new scrutiny from colleges, state lawmakers and student activists. Nearly half of all internships are unpaid, putting them out of reach for students who need wages to keep up with their bills, even if the work has nothing to do with their intended careers. Many students say they can’t afford to meet internship requirements, and shouldn’t be expected to work unpaid to make it in a given field. The people who can take unpaid internships have financial safety nets, and that means they tend to benefit students who are wealthier and white, perpetuating wealth gaps.
Hack puts Latin American security agencies on edge
MEXICO CITY (AP) — A massive trove of emails from Mexico’s Defense Department is among electronic communications taken by hackers from military and police security institutions in several Latin American countries. President Andrés Manuel López Obrador confirmed the breach Friday and Chile’s government said last week that emails had been taken from its Joint Chiefs of Staff. The 10 terabytes of data taken also include emails from the militaries in El Salvador, Peru and Colombia, as well as El Salvador’s National Police. The Mexico hack appeared to be the largest. The group responsible calls itself Guacamaya.
‘Big impact’: UK economic chaos, pound plunge hit businesses
LONDON (AP) — The British government’s economic stimulus plan is designed to help people and businesses by cutting taxes and growing the economy. But it’s had the opposite effect as the promise of huge unfunded tax cuts sparked turmoil in financial markets and sent the British pound tumbling to a record low against the U.S. dollar this week. For many small businesses already battling soaring costs, things have gone from bad to worse. The pound’s slide hits many businesses hard because imported materials and commodities like natural gas that are priced in dollars will be more expensive. Businesses will likely be forced to pass the costs on to consumers, which would further push up inflation.
UK’s budget watchdog promises initial analysis next week
LONDON (AP) — Britain’s independent budget watchdog says it would deliver an initial analysis of the government’s economic plan to Treasury officials on Oct. 7. That announcement Friday comes amid efforts to ease financial turmoil triggered by 45 billion pounds ($50 billion) of unfunded tax cuts. The announcement came after an unprecedented meeting between Prime Minister Liz Truss and officials from the Office for Budget Responsibility. It is unclear whether the preliminary analysis will be released to the public because the government didn’t mention it in its own statement on the meeting. The analysis is crucial to rebuilding confidence in British financial markets because the government’s failure to publish an independent assessment of the tax-cutting plan spooked investors last week.
Brainard warns US rates to stay high, notes global impact
WASHINGTON (AP) — Federal Reserve Vice Chair Lael Brainard said Friday that U.S. interest rates will likely have to remain high for an extended period to combat inflation, capping a week of tough rhetoric by Fed officials. In remarks at a conference hosted by the Federal Reserve Bank of New York, Brainard said that international turmoil still threatens to disrupt global supplies of commodities and manufactured parts, a key factor pushing inflation higher. Brainard also said that one cannot rule out additional inflationary shocks from Russia’s invasion of Ukraine, China’s COVID lockdowns, or severe weather events globally.
Supply chain issues could slow fix of Florida electric grid
Crews are starting to fix Florida’s electric grid by repairing and rebuilding where lines were damaged or flooded by Hurricane Ian. Florida Power & Light said Friday evening that it had restored power to 1.2 million customers but 850,000 remained without power. The company’s CEO says Florida Power & Light has enough poles, generators and wire in stockpile to the repair work, but power-industry officials warn supply chain issues could threaten the grid if there’s another natural disaster somewhere else in the U.S. They say there’s a shortage of distribution transformers that take electricity from high-voltage lines and reduce it to levels that can be used in homes and businesses.
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