US economy grew much faster than expected in second quarter
(NEW YORK) — The U.S. economy grew much faster than expected over three months ending in June, accelerating from the previous quarter and defying concerns about a possible slowdown.
U.S. GDP grew at a 2.8% annualized rate over three months ending in September. That figure doubled the annualized rate of growth undertaken over the previous quarter.
The economic expansion reflected a surge in consumer spending, the U.S. Bureau of Economic Analysis said on Thursday. The uptick in spending included purchases of housing, and cars, among other items, the BEA added.
The fresh data delivers a strong bill of health for the nation’s economy. The robust performance defies a years-long period of high interest rates, which typically weigh on demand and slow economic activity.
However, the continued growth could complicate the path toward a widely expected interest rate cut from the Federal Reserve in September.
Until the most recent quarter, the economy had been cooling. That trend gave the Federal Reserve confidence that its high interest rates had indeed slowed output and contributed to a slowdown of price increases.
Price increases have slowed significantly from a peak of more than 9%, though inflation remains more than a percentage point higher than the Fed’s target rate of 2%. An outright drop in prices in June compared to the month prior marked a major sign of progress in slowing inflation.
If the Fed cuts interest rates as the economy is heating up, however, the central bank risks rekindling rapid price increases.
The chances of an interest rate cut at the Fed’s meeting in September stand at more than 80%, according to the CME FedWatch Tool, a measure of market sentiment.
(NEW YORK) — Apple is unveiling its new iPhone 16 on Monday replete with artificial intelligence-driven features as the company introduces the buzzy technology into its signature smartphone.
The Cupertino, California-based company is also releasing fresh versions of its Apple Watch and Apple AirPods.
The announcements arrive months after Apple raised the curtain on an AI-fueled operating system to be used across many of its products.
The generative AI capability, called Apple Intelligence, will allow users to summarize messages and enhance photos, among other features, the company said.
The product rollout on Monday marks the first time consumers get a look at exactly how the firm is incorporating AI into some of its top items, analysts told ABC News.
“There is still a large question mark around AI of, ‘Should I care?’” Ben Bajarin, an analyst at research firm Creative Strategies, told ABC News. “That’s the question that the industry has to address.”
For Apple, Bajarin added, the latest round of product updates are a “big deal.”
Investors, however, appeared unimpressed about an hour after the product release event began. The stock dipped roughly 1.5%.
Here are the new products released by Apple on Monday:
Apple Watch Series 10
Nearly 10 years after Apple announced the debut of its Apple Watch, the company released its Series 10 model, featuring a wider display, brighter screen and new processor.
The display screen on the Series 10 is as much as 30% larger than previous models of the Apple Watch, the company said. The larger display eases typing and reading on the product, Apple said.
Meanwhile, the screen is nearly 40% brighter than previous models. The display updates once per second in always-on mode instead of once per minute.
The updates are powered by a new chip: the S10 SiP. The improved processing enables better crash and fall detection, among other benefits, the company said.
The Series 10 Apple Watch starts at $399. It can be preordered today and will be available beginning on Sept. 20, the company said.
The company also released a new model of its high-powered Apple Watch Ultra. The Apple Watch Ultra II starts at $799. It can also be preordered today and will be available on Sept. 20.
AirPods 4
The company released AirPods 4, the latest model of its ear-bud headphones. The new product features the capacity for noise cancellation, as well as an upgraded processor and improved surround sound, the company said.
AirPods 4 allows users to nod their head “yes” or “no” in response to prompts from Siri, Apple said. Meanwhile, the product uses what Apple calls “noise isolation” in order to automatically remove background noise during a phone conversation.
When a user begins a conversation with someone in his or her immediate environment, AirPods 4 automatically turns down music or other media perviously playing through the ear buds, the company said.
A new H2 chip fuels the new features, Apple said.
AirPods 4 begin at $129. A version of the ear buds that includes noise cancellation will cost $179. The product is available for preorder and will go on sale on Sept. 20, the company said.
An enhanced version of the product, AirPods 4 Max, will begin at $249.
iPhone 16
The iPhone 16 will incorporate Apple Intelligence for summaries of emails and texts, aid in composing messages, enhanced camera functions and improved Siri, the company said.
The generative AI technology designed for iPhone 16 will help users draft or revise text written in third-party apps, such as Slack messages or Goodreads reviews, Apple said.
In addition, users can create novel emojis by writing a description of the desired animation.
Apple Intelligence will also improve the function of the iPhone 16 camera, allowing users to instantly learn information about the subject captured in a photo, such as a restaurant’s hours of operation or a dog’s breed, the company said.
Meanwhile, Siri will draw on Apple Intelligence to better understand prompts, even when a user stumbles on their words, the company. The new version of Siri will also respond to written prompts.
Apple Intelligence will be available in a U.S. dialect of English this year, and is expected to be released in other dialects of English next year. Months later, the company expects to release versions of Apple Intelligence in Mandarin Chinese, Spanish and other languages, the company said.
Beyond AI, the iPhone 16 will feature a wider screen display and new chip. The iPhone 16 will boast a 6.1-inch screen, while the iPhone 16 Pro will feature a 6.7-inch screen.
The new A18 chip will process up to 30% faster than the chip built into the company’s previous smartphone model.
The iPhone 16 begins at $799, while the high-powered iPhone 16 Plus begins at $899.
The price of the iPhone 16 matches the cost of last year’s iPhone 15. The unchanged price aligns with a trend initiated by Apple in recent years, said Bajarin of Creative Strategies.
“This is a priority for them to keep pricing in line,” Bajarin said.
(NEW YORK) — Keurig, the company behind the popular home brewing and single-serving coffee maker systems, will pay the SEC a $1.5 million civil penalty after it failed to disclose concerns from two major recycling companies about the K-Cup pods in its annual reports.
The Securities and Exchange Commission announced Tuesday that Keurig Dr Pepper Inc. will settle with the agency for the hefty fine after it was “charged with making inaccurate statements regarding the recyclability of its K-Cup single use beverage pods.”
“Public companies must ensure that the reports they file with the SEC are complete and accurate,” John T. Dugan, Associate Director for the regional Boston office of the SEC said in a press release. “When a company speaks to an issue in its annual report, they are required to provide information necessary for investors to get the full picture on that issue so that investors can make educated investment decisions.”
A spokesperson at Keurig Dr Pepper told ABC News that the company was “pleased to have reached an agreement that fully resolves this matter.”
“Our K-Cup pods are made from recyclable polypropylene plastic (also known as #5 plastic), which is widely accepted in curbside recycling systems across North America. We continue to encourage consumers to check with their local recycling program to verify acceptance of pods, as they are not recycled in many communities. We remain committed to a better, more standardized recycling system for all packaging materials through KDP actions, collaboration and smart policy solutions,” the statement continued.
In consecutive annual reports for the company’s fiscal years 2019 and 2020, the SEC found that “Keurig stated that its testing with recycling facilities ‘validated that [K-Cup pods] can be effectively recycled.’ But Keurig did not disclose that two of the largest recycling companies in the United States had expressed significant concerns to Keurig regarding the commercial feasibility of curbside recycling of K-Cup pods at that time and indicated that they did not presently intend to accept them for recycling.”
According to the government agency’s review of the 2019 report, “sales of K-Cup pods comprised a significant percentage of net sales of Keurig’s coffee systems business segment, and research earlier conducted by a Keurig subsidiary indicated that environmental concerns were a significant factor that certain consumers considered, among others, when deciding whether to purchase a Keurig brewing system.”
The SEC order found that “Keurig violated Section 13(a) of the Securities Exchange Act of 1934 and Rule 13a-1 thereunder.
Keurig agreed to a cease-and-desist order, according to the SEC, without admitting or denying the findings in the order.
The SEC investigation was conducted by Michael Franck, Cassandra H. Arriaza, Susan Cooke, and Michele T. Perillo of the Boston Regional Office.
(NEW YORK) — Stocks plummeted on Monday as markets worldwide reckoned with a disappointing jobs report last week that fueled concern of a possible recession.
The major stock indexes in the U.S. fell more than 2% in early trading. The S&P 500 fell about 4%, while the tech-heavy Nasdaq dropped more than 6%. The Dow Jones Industrial Average fell roughly 1,000 points, or nearly 3%.
The market downturn triggered calls for a large interest rate cut at the Federal Reserve’s next meeting in September. Some investors voiced an even more urgent request for a rare emergency rate cut as soon as this week.
Japan’s main Nikkei 225 stock index dropped more than 12%, its worst day of trading since 1987.
In early U.S. trading, chipmaker Nvidia plunged more than 14%. Apple fell more than 8%.
“Investors are feeling massive pain globally,” Dan Ives, a managing director of equity research at investment firm Wedbush, said in a note to clients.
U.S. markets, he added, are “trading heavy in the red across the board.”
Employers hired 114,000 workers in July, falling well short of economist expectations of 185,000 jobs added, U.S. Bureau of Labor Statistics data on Friday showed. The unemployment rate climbed to 4.3%, the highest level since October 2021.
The unemployment rate has soared this year from 3.7% to 4.3%. That trend has triggered a recession indicator known as the “Sahm Rule,” which says that a rise of 0.5 percentage points in the unemployment rate within a 12-month period typically precedes a recession.
On Sunday, Goldman Sachs economists raised the probability of a U.S. recession in the next year from 15% to 25%.