What the Federal Reserve wants to see before raising rates
WASHINGTON (AP) — So what will it take for the Federal Reserve to finally raise interest rates?
The U.S. economy is now in its seventh straight year of expansion. It's growing at a steady if unexciting 2.2 percent annual rate. Unemployment has sunk from a 10 percent peak to a reassuring 5.1 percent. Auto and home sales have accelerated.
Yet on Thursday, Fed officials declined to lift rates from record lows.
The decision left some Fed watchers mystified over what the central bank needs to see to begin phasing out a policy it launched in 2008 to help save a collapsing economy. Many economists believe that it will take at least three things to make the Fed move: a stable dollar, steady oil prices and further improvement in the U.S. job market.
Yuan devaluation could weigh on Chinese buyers of US homes
Chinese have been snapping up U.S. real estate of all kinds, looking for a safer place to put their money than their own slowing economy. Investors from China are now second only to Canadians in the number of U.S. homes they buy.
In the last few months, amid signs that China's economy is slowing even more than expected, Chinese investors have stepped up their buying even more. The government's decision last month to downgrade the country's currency added to their urgency, since a weaker yuan makes buying real estate in dollars more expensive.
US airlines step up campaign against rivals from Middle East
The CEOs of American Airlines and Delta Air Lines met with Secretary of State John Kerry as they stepped up their fight against what they say is unfair competition from the three biggest Middle East airlines.
It remains unclear, however, whether the Obama administration will accept the CEOs' argument that the Middle East carriers are heavily subsidized by their governments. The U.S. airlines first lodged their complaints early this year.
American Airlines CEO Doug Parker and Delta CEO Richard Anderson met with Kerry in Washington on Thursday. The State Department said Kerry indicated that the administration is still reviewing the CEOs' complaints.
EPA says VW intentionally violates clean air standards
WASHINGTON (AP) — The Environmental Protection Agency said Friday that Volkswagen intentionally skirted clean air laws by using a piece of software that enabled about 500,000 of its diesel cars to emit fewer smog-causing pollutants during testing than in real-world driving conditions.
The agency ordered VW to fix the cars at its own expense. The German automaker also faces billions of dollars in fines, although exact amounts were not determined.
Coca-Cola: IRS says we owe $3.3 billion in back taxes
NEW YORK (AP) — Coca-Cola was notified by the IRS that it owes $3.3 billion more in federal taxes, as well as interest, for 2007 to 2009, the company said Friday.
The Atlanta-based company said in a regulatory filing that it believes the assessments from the Internal Revenue Service are without merit and plans to pursue "all administrative and judicial remedies necessary to resolve the matter."
The maker of Sprite, Dasani, Powerade and other drinks says the disagreement is over how much it should report as taxable income in the U.S., in relation with licensing that allows its foreign affiliates to sell products like soft drink concentrates to bottlers overseas.
Once-thriving Puerto Rico mountain town faces economic abyss
LARES, Puerto Rico (AP) — Lares has become emblematic of the economic stagnation that is overwhelming Puerto Rico, and those who live here believe it is a warning sign of things to come across the island if it doesn't emerge soon from a nearly decade-long financial slump.
The town of some 30,000 people has lost more residents than any other municipality in Puerto Rico in the last four years, and it has the island's second-highest unemployment rate, at 22 percent. In the past five years, more than 25 percent of businesses have closed and more than a third of farms have collapsed as families flee to the U.S. or to other more prosperous parts of the island.
Jobless rates fall in 29 states in August amid job gains
WASHINGTON (AP) — Unemployment rates fell in 29 states in August and held steady in 11 as hiring remained solid nationwide. Falling oil and coal prices continued to take a toll on energy-producing states.
The Labor Department said Friday that rates rose in the remaining 10 states. Employers added jobs in 32 states and shed them in 18.
Oil prices that are sharply lower than a year ago contributed to job losses and higher unemployment in several states, including Alaska, North Dakota, and Texas. And falling demand for coal has devastated West Virginia, which has the nation's highest unemployment rate at 7.6 percent. That is up from 7.5 percent in July.
US household wealth reaches new high of $85.7 trillion
WASHINGTON (AP) — Rising home values drove a modest increase in Americans' household wealth to a new high of $85.7 trillion in the April-June quarter.
The Federal Reserve said Friday that Americans' stock portfolios climbed $61 billion in value, while housing wealth increased $499 billion. Total household wealth is up from $85 trillion in the first quarter.
Rising household wealth can help boost growth by making consumers feel wealthier and more likely to spend. Economists estimate that consumer spending rises 3 to 5 cents for every dollar increase in wealth. Household spending drives about two-thirds of the economy.
Index of US economy shows small 0.1 percent gain in August
WASHINGTON (AP) — An index of future U.S. economic health edged up slightly in August after a flat reading in July. The outcome in both months signaled economic growth could be moderating.
The Conference Board said Friday that its index of leading indicators rose 0.1 percent in August following no change in July and a 0.6 percent jump in June. The July reading had initially been reported as a decline of 0.2 percent.
AP Source: UAW-Fiat Chrysler pact raises pay, profit-sharing
DETROIT (AP) — Hourly pay, profit sharing and performance bonuses will rise, but car production will move to lower-cost Mexico and be replaced by trucks and SUVs under a new contract between Fiat Chrysler and the United Auto Workers, a person briefed on the deal said.
Union leaders will explain details of the four-year pact to factory-level leaders at a meeting Friday afternoon in Detroit. They'll vote on it, and if approved, it will go to FCA's 39,000 union workers for another ratification vote that's likely to be finished next week.
Moody's downgrades credit rating of France
NEW YORK (AP) — Moody's Investors Service is downgrading the credit rating of France, saying the French economy will grow slowly for the rest of this decade while the country's debt remains high.
The firm lowered its rating to "Aa2" from "Aa1." That means France has Moody's third-highest possible rating.
Moody's said Friday the outlook for economic growth in France is weak, and it does not expect that to change soon. It says the high national debt burden probably will not be reduced in the next few years because of low growth and institutional and political constraints.
Novel plan to curb drug costs seeks candidates' attention
WASHINGTON (AP) — Consumer-friendly ratings of the benefits of new drugs. Limits on what patients pay. Requiring drug companies to disclose how much they actually spend on research.
With the public concerned about the high cost of new medications, these are some of the proposals offered Friday by a policy center often aligned with the Obama administration.
The multistep plan from the Center for American Progress aims to get the attention of the 2016 Democratic presidential candidates. Hillary Rodham Clinton and Vermont Sen. Bernie Sanders are both on record advocating action against overpriced medications.
US eases rules for travel, doing business in Cuba
WASHINGTON (AP) — The Obama administration eased rules Friday for U.S. citizens wishing to travel to Cuba or do business with its growing ranks of independent entrepreneurs, hoping to kindle greater economic freedom on the island.
The Treasury and Commerce departments said the regulations that take effect Monday simplify procedures for tourism, telephone and Internet investments, and money transfers to Cuba.
By The Associated Press=
The Dow Jones industrial average ended down 290.16 points, or 1.7 percent, to 16,384.58. The S&P 500 slumped 32.17 points, or 1.6 percent, to 1,958.03. The Nasdaq composite shed 66.72 points, or 1.4 percent, to 4,827.23.
U.S. oil dropped $2.22, or 4.7 percent, to $44.68 per barrel. Brent crude, the global benchmark, fell $1.61, or 3.3 percent, to $47.47 per barrel in London. Wholesale gasoline fell 2 cents to $1.356 per gallon. Heating oil slipped 3.9 cents to $1.491 per gallon. Natural gas fell 4.7 cents to $2.605 per 1,000 cubic feet.