Category: Business

Oil exports from the Middle East have improved substantially in recent weeks, according to a post on X from private tracking firm Kpler, but gas prices still stand above $4.30, and diesel prices remain close to an all-time high.

Credit card debt held by Americans stands near an all-time high, according to the Federal Reserve Bank of New York, just as a rise in the Fed’s benchmark interest rate threatens to drive up borrowing costs.

The spending crunch may push some debt holders to tap their 401(k) accounts as a means of paying down what they owe and resetting their finances. But experts who spoke to ABC News cautioned against the move, saying any immediate benefits are typically outweighed by taxes, penalties and years of lost investment returns.

Though some budget-busting emergencies could warrant reaching into a 401(k), they said, the advantages and drawbacks differ, depending on circumstances and execution.

“It’s definitely a tempting option, particularly when credit card debt feels overwhelming and you’ve got this balance of cash sitting in another spot. But the costs of taking out retirement funds to pay down debt are very high,” Timi Joy Jorgensen, a professor and director of financial education and wellbeing at the American College of Financial Services, told ABC News.

Total U.S. credit card debt registered at $1.26 trillion in the second quarter of this year, marking an increase of $21 billion from the previous three-month period, a recent New York Federal Reserve study found, also noting it’s the second-highest debt load on record.

Credit card interest rates, meanwhile, have jumped significantly in recent years. In the second quarter of 2026, the average interest rate on all credit card accounts with a commercial bank stood at 20.94%, up from 15.13% at the same time in 2022, Federal Reserve data shows.

Many borrowers who find themselves squeezed between surging prices and heightened borrowing costs may turn to their 401(k) accounts to escape a cycle of high monthly payments and mounting interest. The prospect of short-term relief, however, could carry life-altering financial damage over the long term, some experts said.

People who withdraw directly from their 401(k) accounts usually incur a 10% early distribution tax if they are under age 59½, in addition to a standard income tax paid on the funds. Depending on an individual’s tax bracket, those payments can result in a combined 401(k) deduction of about 30% or more, Jorgensen said.

“If you want to pay down $20,000 in credit card debt, you need to take out almost $30,000 from your 401(k). It’s pretty expensive as a repayment plan,” Jorgensen added.

To be sure, borrowers can sometimes earn an exemption from the early distribution tax. Some 401(k) plans offer qualified hardship withdrawal, allowing individuals to access their funds under particularly dire financial circumstances. The Internal Revenue Service also allows exemptions from the early distribution tax under certain conditions, including disability, home purchase and terminal illness.

Yet even after taxes, the largest downside of early withdrawal from a 401(k) may still remain. The immediate amount paid to access the funds could pale in comparison to the lost income suffered as a result of years of lost investment returns on the withdrawn funds.

A $20,000 withdrawal, for example, may eliminate the opportunity to earn three or four times as much over the ensuing years. If invested at an annual rate of 7% return, $20,000 would grow to more than $75,000 in two decades, according to Jorgensen.

“You’re taking an asset that’s growing in order to pay down an asset that’s already in the past,” Jorgensen said.

Instead of a direct withdrawal of the funds, 401(k) account holders could take a different approach: a loan.

Under this strategy, a person borrows a set amount from his or her 401(k) account and slowly replenishes the account over time through payments deducted automatically from pay stubs. This option allows a person to avoid the taxes associated with a direct 401(k) withdrawal while accessing funds at an interest rate lower than he or she may otherwise find in a consumer loan, some experts said.

“There are times when the loan makes sense if you’re able to pay it back and your cash flow is keeping up,” Kiersten Saunders, a personal finance author and co-author of “Cashing Out: Win the Wealth Game by Walking Away.”

The main downside of a 401(k) loan is the risk a borrower may lose his or her job before the loan is repaid. Under those circumstances, the full loan amount is typically due by the next tax deadline.

If a person is in truly dire financial straits, he or she may benefit from turning to bankruptcy rather than a 401(k) withdrawal, some experts said. Since federal law shields 401(k) accounts from bankruptcy, the retirement funds may sustain hope for one’s financial future, even if present-day difficulties appear insurmountable, they added.

“The first thing I would do is put that retirement funding and savings out of my mind, because the courts will treat it that way,” Jorgensen said. “If the court isn’t going to touch it, then I wouldn’t touch it.”

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A sports car with a naturally aspirated V12 engine and a manual transmission? It’s every enthusiast’s dream.

Buying one, however, requires deep pockets. The S1, Gordon Murray’s latest supercar creation, reportedly costs at least seven figures. All 64 units were sold even before collectors, industry insiders and admirers of Murray got a sneak peek at the S1 in August.

Murray himself has described the 681-horsepower car as “more elegant, more refined” but also “analog and deeply driver focused,” a seeming affirmation that manual gearboxes, gauges and ear-piercing revs (12,100 rpm!) can still exist in a world of increasing technology and electrification.

“A lot of customers are not too excited about hybrid supercars,” Matt Farah, host of “The Smoking Tire” podcast, told ABC News. “Regulations are making the new cars worse. People want an analog experience.”

The safety tech found in daily commuters — lane keep assist, emergency automatic braking, blind spot monitoring — has hindered the driving experience in sports cars, he argued. And hybrid powertrains — which boost output, speed and miles per gallon — can actually become a liability for owners, he said.

“Cars have just gotten insanely fast but that does not make them more fun, it makes them more braggable,” he said. “There’s no difference between 800 hp and 1,000 hp … you can only use so much on the street. I drive all this stuff and it’s boring.”

Enthusiasts are now splurging on older sports cars that have been “reimagined” by high-end restomod companies like Singer and Gunther Werks.

“The elite of the elite get real knobs and gauges and real stick shifts,” said Farah. “These small outfits are charging a lot to make old cars go faster.”

He added, “Everyone else gets stuck with a computer. The new stuff has become very digital but doesn’t have a lot of feel.”

Tony Roma, executive chief engineer for the global Corvette and performance cars team, called the latest supercars built by Murray, Czinger and others as “trendsetters,” adding that these boutique carmakers purposely keep production small.

“A lot of what they do is for show,” Roma told ABC News. “Corvette will never compete with these [supercars].”

He added, “This is a fashion industry. We sell a fashion product and people are buying the greatest and latest shiny thing.”

Roma declined to say whether a manual transmission would return in the Corvette, though he acknowledged the appeal of rowing one’s own gears and the desire for a more raw driving experience.

“What makes a great sports car? That is the question,” he said. “People want a visceral connection to their car. Customers want precise steering, a linear range of handling, they want the car to feel natural, to be a modern interpretation of the sports car in their youth. And they want it to sound great. The weight of the throttle and brake pedal — do they feel like the same person tuned them? And the car has to be confidence inspiring.”

Roma said Corvette’s customers also request a comfortable ride, which he said was achievable in all six Vettes currently sold, from the Stingray to the new Grand Sport to even the beastly ZR1X.

“Our niche, our draw, is that we’re affordable performance,” he said. “Most of our customers are not buying race cars.”

The backlash to big screens has helped propel sales of older Corvettes, like the C5 generation with manuals, Roma noted. As for the constant chatter about the unwelcome safety tech, Roma said the objections may be exaggerated.

“The people complaining about the tech … I am not sure they hate it,” he said.

Dan Pund, editor-in-chief of Road & Track, has driven many of the top supercars with hybrid powertrains. He said he’s astonished at what these machines can deliver when pushed hard on the track.

“The Ferrari 296 and F80 are amazing … they’re maintaining the sound of the engine, the gear shift, the dual clutch,” he told ABC News.

The 296 pairs a twin-turbocharged V6 with a plug-in hybrid system, which makes 819 hp. The F80’s twin-turbo V6 gets an assist from three electric motors for a terrifying 1,184 hp.

He also had high praise for McLaren’s new W1 supercar and its 916-hp twin-turbo V8, noting in his review that the electric motor is “fed by a tiny 1.4-kWh battery — might as well be a high-capacity pump flooding the driver’s brain with adrenaline, norepinephrine, and endorphins through a fire hose.”

Pund recognized that hybrid powertrains can add weight, a nightmare for purists. Automakers, however, have realized that “this is the reality of the situation … hybrid is the best option at this point. To be competitive in the industry, there has to be noise and vibration because that’s what sports car buyers want.”

And enthusiasts are clearly choosing hybrids over fully electric sports cars, he said.

“The Rimac [Nevera] was a darling of the industry but it did not sell. It feels like any electric car. You dip into the throttle and holy s— it’s fast. But you don’t hear anything and you don’t shift gears,” he said.

Ivan Drury, director of insights at Edmunds, said there will be “no end to how much people spend” on restomods as vintage sports cars with three pedals become sought after by consumers.

“As we layer in more tech and more electrification, sports cars become faster and easier to drive. But this slowly hacks away at the soul of the car,” he told ABC News. “These cars are borderline autonomous. There are so many warnings. The vehicle has more control than you do at this point.”

Fuel economy has never been a selling point for sports cars, he noted, which make up less than 1% of industry sales. Drury said he, too, has become nostalgic for older models like the Honda Prelude, which was his first car.

“Honda brought back the Prelude nameplate as a throwback,” he said. “Prelude looks the part but doesn’t back it up with speed and innovation. It would not surprise me at all if Honda pulls the plug on the Prelude after two to three years.”

A Honda spokesperson told ABC News that the company is meeting sales targets of the sports car.

“We announced during the launch of the Prelude that we expected annual sales volume of approximately 4,000 units,” the spokesperson said. “We also noted that Prelude wasn’t meant to be a volume model, but instead a halo for our hybrid lineup, as it attracts faithful Honda fans while also bringing new buyers to the Honda brand. In fact, more than a third of Prelude buyers have come from another brand.”

Farah said he was impressed with the Nissan Z Nismo, a manual sports car that costs a fraction of the price of supercars he regularly test drives.

“It’s under $70,000 and very engaging. That car has a lot of poise, great brakes and is very good dynamically — there’s not a lot of computer intervention,” he said.

But the Nissan is an exception, he admitted.

“It’s very telling that people would rather spend $3 million to $4 million on a [restomod] supercar than $700,000 on a new one,” he said.

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OpenAI on Friday revealed another hack into a second Australian government agency, a week after the disclosure of an initial hack fueled public backlash against the ChatGPT-maker.

An AI model gained access to fire statistics kept by a state agency in New South Wales (NSW) that were not publicly available from the department, OpenAI said in a statement to ABC News on Friday.

The company discovered the incident as part of a wider investigation into “misaligned model activity,” OpenAI said.

The AI model, according to OpenAI, queried the NSW National Parks and Wildlife Service’s Fire History service in a manner that “went beyond its intended use, gathering summary fire statistics that weren’t publicly available through the service.”

“The results we reviewed do not show that the model retrieved any personal information,” OpenAI added.

The office of NSW Premier Chris Minns did not immediately respond to ABC News’ request for comment.

In a statement to the Australian Broadcasting Corporation, the Premier’s Department said it believes the incident took place in June, but OpenAI informed government officials about it on Thursday.

A host of NSW government agencies is working to “to investigate the matter and assess its impact,” the Premier’s Department said in the statement.

The cybersecurity breach marks the second disclosure of an OpenAI hack of an Australian government agency in a matter of days, and the revelation adds to a flurry of security incidents revealed by the San Francisco-based tech company in recent months.

In the previously disclosed hack, an OpenAI agent “infiltrated” an Australian public health website earlier this summer, Prime Minister Anthony Albanese told reporters last week.

The incident happened in June and involved a rogue AI agent gaining access to both public and non-public files associated with the Australian Medicare Statistics Reporting Portal, Albanese said.

Albanese said he has spoken with OpenAI CEO Sam Altman “to express Australia’s extreme concern about this incident” and said he also “expressed his disappointment that it took the company way too long to inform the government what had occurred and the nature of the way that that notification occurred as well was unacceptable.”

In a statement at the time, an OpenAI spokesperson said the incident was discovered in August as the company conducted what it called an extensive review of “misaligned model activity.”

“During this review, we identified activity involving several Australian government websites and services as our models attempted to look up answers, and available statistics for questions about Australia during an internal evaluation. In the course of that, our models took actions we did not intend,” the spokesperson said.

The spokesperson said Australian officials were notified on Sept. 10.

“Our review found no evidence of patient records being accessed. The information accessed included aggregate health statistics and internal file names,” the spokesperson added.

OpenAI issued an apology for the security breach last week.

“We are sorry and working to do better in the future,” OpenAI said in a statement. “One of the ways we intend to take accountability for the situation is to be intentional in working with Australia to help develop practical approaches to how AI developers and governments identify, disclose, and respond to AI cyber behavior, whether malicious or unintentional.”

Some analysts expressed serious concern about AI safety risks after an autonomous cyberattack disclosed by OpenAI in August. The company said that its AI models had escaped a “sandboxed testing environment” and gained access to the open internet.

A swarm of about 700 AI agents, in turn, hacked into AI firm Hugging Face and attempted to cover their tracks as they sought to complete the test, according to reports issued by research organizations METR and Redwood Research.

“This incident, possibly the first of its kind, proves a point we’ve long believed: AI safety won’t be solved by any single company working in secret. It will be solved in the open, collaboratively, with broad access to AI for every defender, everywhere,” Clem Delangue, the co-founder and CEO of Hugging Face, said in a statement on at the time of OpenAI’s disclosure in July.

Altman announced that the company dialed back the pace of its AI development earlier this month. “The world deserves confidence that American companies developing increasingly capable AI will act responsibly, especially as the trajectory of progress has steepened,” Altman said in a post on X at the time.

OpenAI signaled further restraint toward its AI models this week, pausing the release of its latest AI model, GPT-6.1 Astra, due to security concerns.

ABC News’ Jack Moore contributed to this report.

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A jobs report on Friday will provide a key gauge of economic health as the United States weathers a surge of inflation set off by the Iran war seven months ago.

The fresh data is set to arrive weeks after the Federal Reserve imposed its first interest rate hike in three years. The move aims to dial back price increases, but it risks an eventual slowdown in hiring as borrowing costs weigh on businesses.

The economy has shown signs of strain in recent months, including a bond selloff that threatens to raise consumer borrowing costs and a resurgence in oil and gasoline prices.

Consumer sentiment dropped last month close to the lowest level ever recorded in the 74-year history of the University of Michigan’s survey.

Despite these headwinds, the labor market has proven sturdy so far this year — and such growth is expected to have continued in September.

Economists expect U.S. employers to have added 84,000 jobs in September, which would mark solid performance but a slowdown from 162,000 jobs added in August.

The U.S. added an average of about 80,000 jobs per month over the first eight months of this year, financial services firm Raymond James found in an analysis of Bureau of Labor Statistics data. That pace exceeded Raymond James’ expectations of 70,000 jobs added each month over that period.

The Iran war drove up gasoline prices and catapulted inflation to a three-year high. Inflation eased over the summer, but continued fighting has kept prices increases well above pre-war levels.

The annual inflation rate stands at 3.4% as of August, the most recent month on record, putting inflation more than a percentage point above the Fed’s target rate of 2%.

The combination of elevated inflation and a resilient labor market prompted the Fed to raise interest rates a quarter of a percentage point last month.

Investors peg the chances of another rate increase in October at one in three, meaning borrowing costs could rise further within weeks, according to CME Group’s FedWatch Tool, a measure of market sentiment.

“The plain fact is that inflation is too high and has been for too long,” Fed Chair Kevin Warsh said at a press conference in Washington, D.C., last month.

An increase to the benchmark interest rate raises borrowing costs for consumers and businesses, which in theory should slash inflation by slowing the economy and eating away at demand.

The policy risks a downshift in hiring and an uptick in the unemployment rate, though such fallout typically takes hold after a lag time lasting several months.

By some measures, the economy remains robust.

Gross domestic product grew over three months ending in June, defying fear of a downturn triggered by the Iran war. Consumer spending, which accounts for about two-thirds of U.S. economic activity, rose 0.6% in August from July, the largest monthly increase since March 2025, government data on Wednesday showed.

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(NEW YORK) — A nonprofit artificial intelligence safety group has sued OpenAI over a July incident in which the company’s autonomous AI agents accessed the computer systems of another firm, Hugging Face, without authorization during a cybersecurity test.

Legal Advocates for Safe Science & Technology (LASST) filed the lawsuit late Tuesday in San Francisco Superior Court, alleging roughly 700 of the company’s AI agents participated in the breach.

The AI agents stole credentials, uploaded malicious files and gained access to parts of Hugging Face’s production infrastructure, the lawsuit claims.

A spokesperson for OpenAI said the lawsuit was “without merit” in a statement to ABC News.

“Hugging Face was a serious incident and we’ve taken a series of actions in response to it, but this lawsuit is completely without merit,” said Drew Pusateri, a spokesperson for OpenAI.

The lawsuit seeks a court order barring OpenAI’s AI agents from accessing third-party computer systems without permission and requiring changes to what LASST calls unsafe AI development practices.

LASST “suffered harm” as a result of the hack into Hugging Face, the lawsuit says. In the aftermath of the incident, the group was “required to divert resources from its normal activities to educate regulators, civil society, and the public about the facts, legal issues, and potential dangers,” according to the lawsuit.

The self-directed hack into Hugging Face took place as OpenAI tested the capabilities of a pair of its AI models, the company said in July, describing how the technology had escaped and gained access to the open Internet.

A swarm of about 700 AI agents, in turn, hacked into AI firm Hugging Face and attempted to cover their tracks as they sought to complete the test, according to reports issued by research organizations METR and Redwood Research.

“We care very deeply about AI safety,” OpenAI CEO Sam Altman wrote on X in August. “We believe the entire field will have to coordinate on shared safety standards, but will act unilaterally in the meantime.”

“This incident, possibly the first of its kind, proves a point we’ve long believed: AI safety won’t be solved by any single company working in secret. It will be solved in the open, collaboratively, with broad access to AI for every defender, everywhere,” Clem Delangue, the co-founder and CEO of Hugging Face, said in a statement in July.

Hugging Face did not immediately respond to ABC News’ request for comment about the lawsuit filed against OpenAI.

Altman dialed back the pace of his company’s AI development earlier this month. “The world deserves confidence that American companies developing increasingly capable AI will act responsibly, especially as the trajectory of progress has steepened,” Altman said in a post on X at the time.

OpenAI signaled further restraint toward its AI models this week, pausing the release of its latest AI model, GPT-6.1 Astra, due to security concerns.

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(WASHINGTON) A United States ban of hundreds of millions of dollars worth of Canadian products took effect on Tuesday, escalating a trade war between the longtime allies and pinching imports from one of the top U.S. trade partners.

The ban applies to an array of products spanning from alcohol to motorcycles to dairy goods, White House documents show.

In all, the affected products account for $967 million worth of annual imports from Canada, Jacob Jensen, director of trade policy at the right-leaning American Action Forum, said in a blog post.

Nearly $9 of every $10 worth of impacted products belongs to the category of alcoholic beverages, making them the primary target of the ban, Jensen said. The move comes after some Canadian provinces pulled U.S.-made alcohol off of liquor store shelves, crimping sales for American producers.

The list of banned alcoholic products includes beer, wine, whiskey, vodka, rum and brandy.

The policy also bars some mopeds and motorcycles, as well as some food items featuring whey, a popular protein-rich additive derived from dairy. Molasses and non-alcoholic beer also stand among the banned imports.

Still, the U.S. ban applies to a small fraction of U.S. imports from Canada. The U.S. imported roughly $381 billion worth of goods in 2025, the Office of the United States Trade Representative found, meaning the ban covers 0.2% of Canadian products shipped to the U.S.

The Toasts Not Tariffs Coalition — a trade group representing farmers, retailers and other members of the U.S. alcohol supply chain — issued a statement on Tuesday criticizing the ban.

“We appreciate the Trump administration’s commitment to encouraging Canada to reopen its market to American spirits and wine products,” the organization told ABC News.

“However, as this ban on Canadian spirits and wines takes effect today, America’s restaurants, bars, retailers and consumers are being pulled further into a trade dispute that has already taken a significant toll on U.S. wine and spirits producers,” the group added.

A tit-for-tat trade war erupted in August after official negotiations collapsed and a fresh round of U.S. levies took hold. Within days, Canadian officials unveiled what they described as a set of matching tariffs.

Canada’s retaliatory measure, which took effect earlier this month, targets about $20 billion worth of U.S. products, mirroring the size of the U.S. levies.

The goods impacted by both countries’ levies total about 4.5% of annual trade between the U.S. and Canada, the Office of the United States Trade Representative said. For now, levies apply to a sliver of goods that travel between the U.S. and Canada, limiting the impact of the trade dispute.

Trump has carried out on-again, off-again trade negotiations with Canada since he took office, aiming to resolve a dispute that began with tariffs announced by Trump early in his second term.

Trump has repeatedly claimed Canada takes advantage of its proximity to the large U.S. consumer market, while preventing many U.S. sellers from reaching Canadian shoppers.

“On Trade, and in other ways, also, they are among the worst Nations in the World to deal with,” Trump said on his social media platform in August. “They feel entitled, and yet, WE DON’T NEED CANADA, THEY NEED US!”

Canadian Prime Minister Mark Carney has criticized fresh U.S. tariffs as a pressure campaign that disadvantages Canadian exporters, describing retaliatory levies as an effort to protect Canada’s economy.

“I don’t believe in escalating the conflict. That’s not constructive, but our tariffs are necessary to protect our workers, protect our companies and our communities. We can’t let American goods into Canada tariff-free while they charge our companies to export,” Carney said in a video message posted earlier this month.

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(NEW YORK) — Nvidia, a top chipmaker whose products fuel many artificial intelligence agents, released a software platform on Monday designed to prevent security incidents revealed by AI firms in recent months.

The software aims to provide a “trust layer” for AI agents that insulates them from inadvertent exposure to other AI agents, digital products and the open internet over the duration of their existence, Nvidia said in a blog post.

“Recent security incidents have underscored the need to equip organizations with open, customizable tools that enforce more control over long-running agents,” Nvidia said in a statement.

Dozens of companies partnered with Nvidia on the project, including IBM, Microsoft, Palantir, Anthropic and xAI-parent company SpaceX.

The move comes after a flurry of AI security incidents disclosed by firms such as OpenAI, Anthropic, Meta and Alphabet-owned Google.

Those security breaches prompted warnings from some of most powerful executives in the artificial intelligence industry, who cautioned of a grave threat posed by the technology and called for a slowdown in AI development.

OpenAI CEO Sam Altman, Anthropic CEO Dario Amodei and SpaceX CEO Elon Musk belong to a group of industry leaders who have issued acute warnings about the risk of AI slipping out of human control.

Some analysts warn of a pathway called recursive self-improvement, in which AI becomes increasingly effective at training itself, eliciting a cycle of rapid advancement. At that point, they say, AI could take charge of critical systems using its superior capabilities to evade protections devised by humans.

By contrast, Nvidia CEO Jensen Huang has downplayed such doomsday scenarios, instead pushing for safety measures that would keep AI in check as firms continue to develop it.

“Artificial intelligence is extraordinary technology that will advance discovery, productivity, security, health, and prosperity for generations to come,” Nvidia CEO Jensen Huang said in a post on X on Monday. “But its full promise can only be realized when people have confidence that AI is being built to be safe and deployed with wisdom and responsibility.”

Anthropic and SpaceX joined in partnership with Nvidia on the AI safety software platform, Nvidia said. OpenAI is not listed among the corporate partners unveiled by Nvidia on Monday; nor are Meta or Google.

Public concern grew after an autonomous cyberattack disclosed by OpenAI in late July. The ChatGPT-maker revealed that its AI models had escaped a “sandboxed testing environment” and gained access to the open internet, OpenAI said.

A swarm of about 700 AI agents, in turn, hacked into AI firm Hugging Face and attempted to cover their tracks as they sought to complete the test, according to a report issued by research organizations METR and Redwood Research on Aug. 26.

On the same day, OpenAI released its own report about the cyberattack, voicing concern about the implications of its findings.

“We consider this incident a ‘warning shot for us and for the world: evidence that, without proper safeguards, highly capable AI agents are now able to work around technical controls, collaborate through unapproved channels, and take dangerous actions that no human directed,” OpenAI said at the time.

“Preventing future incidents will require sustained investment in the alignment and control of sophisticated AI systems, as well as security and other safeguards that operate at the speed of the AI agents themselves,” the company added.

Nvidia said on Monday the newly unveiled software platform would have stopped the hack into Hugging Face, a company Nvidia has since acquired for nearly $13 billion. Hugging Face is a partner on the software platform, Nvidia noted.

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(WASHINGTON) — The Department of Transportation is easing fuel economy standards that were put in place during the Biden administration.

Transportation Secretary Sean P. Duffy said Monday that changing CAFE (corporate average fuel economy) standards for vehicles will make them more affordable by establishing “commonsense” guidelines for automakers.

“This administration is delivering relief to families and reviving the beating heart of American manufacturing,” Duffy said. “With our commonsense standards in place, we are making the American dream affordable again, putting safer cars on the road, and investing in the American autoworker.”

The new Trump administration rule reduces the previous average fuel economy requirement from 50.4 miles per gallon by 2031 to 34.9 miles per gallon by 2031. It also eliminates the need for automakers to invest in electric vehicle production to help meet those requirements. The rule reverses the requirements set by the Biden administration in 2024.

“This rule restores integrity to the national fuel economy program, balancing vehicle affordability and energy conservation goals while improving safety on our roadways,” National Highway Traffic Safety Administration Administrator Jonathan Morrison said in a statement. “Newer cars are safer cars. By reducing vehicle prices, more American families will be able to afford newer vehicles, and sensible standards allow automakers more freedom to design and produce vehicles consumers actually want. I’m proud of our fantastic team of expert engineers, economists, and lawyers for the tremendous job they’ve done finalizing this rule.”

The agency is also changing the classification of light truck and passenger vehicles beginning in 2030.

“This reclassification will eliminate the incentive to add equipment and alter designs for classification purposes, which will result in greater availability of lower-cost vehicle options for consumers,” the Department of Transportation said in a statement. “Instead, automakers will develop vehicles that meet consumer wants and needs. With the current vehicle classification, manufactures are disincentivized from making hatchbacks, wagons, and smaller footprint vehicles in general.”

NHTSA says current regulations have encouraged manufacturers to add features or make design changes primarily for regulatory purposes, reducing the availability of smaller, lower-cost vehicles. It also claims the change will cut the average cost of new vehicles by as much as $1,300 on average and could save Americans $138 billion over the next five years. The average price of a new vehicle was $49,855 in July, according to Kelley Blue Book.

These new standards are also expected to reduce U.S. yearly oil consumption by 1.3 billion barrels in 2050, according to the DOT.

President Donald Trump posted on social media over the weekend that these fuel economy standards for vehicles will “take the waste out of building cars in America” and subsequently lead to “LOWER PRICES.”

CAFE standards were established in 1975 to promote fuel conservation and reduce U.S. dependence on foreign oil. The standards require automakers to meet fuel economy targets across their fleets, which can also help reduce pollution and fuel costs for drivers. Since the standards are calculated using a manufacturer’s overall fleet average, electric and hybrid vehicles can improve that average, allowing automakers to sell less fuel-efficient vehicles, such as trucks and SUVs, while still meeting the requirements.

The Trump administration has argued that the previous CAFE standards effectively functioned as an EV mandate. However, NHTSA’s 2024 rule did not require vehicle manufacturers to make EV vehicles. The standards in the previous rule were “performance-based” and manufacturers were encouraged to “apply their expertise to find the appropriate technology path that best meets all desired outcomes.”

Environmental groups and climate experts quickly condemned the NHTSA’s decision, warning of potential adverse effects on air quality and human health.

Gina McCarthy, a former EPA administrator during the Obama administration and the current chair of the advocacy group America Is All, said in a statement: “For fifty years, fuel economy standards have saved Americans money and cut pollution at the same time, creating cleaner air, lowering prices at the pump, and reducing our reliance on fossil fuels. Rather than keeping the U.S. at the forefront of innovation and improving affordability, this administration has chosen to do the opposite.”

“Cleaner, more efficient vehicles are good for consumers, good for jobs, and good for public health. Governors, mayors, and businesses are pressing forward to find solutions for America’s growing affordability crisis while reducing carbon emissions. And they will keep pressing forward – with or without Washington,” she added.

The Sierra Club said argued that less fuel-efficient vehicles will increase gas use, costs for drivers and air pollution.

“Less fuel-efficient cars mean more gas burned, spending more at the pump, and dirtier air in our communities,” said Katherine García, Sierra Club Clean Transportation for All Director. “The Sierra Club will fight this senseless rollback every step of the way. We’re going to continue to fight back against this administration’s dangerous and costly attacks on cleaner cars and public health.”

Supporters of the decision said changing the CAFE standards gives automakers greater flexibility in meeting fuel economy requirements.

In response to the new rule, Alliance for Automotive Innovation, a trade group representing major automakers, said it is “still reviewing the final rule, but NHTSA made the right call to better align fuel economy standards with the law and current market conditions.”

“The standards finalized under the previous administration effectively required a switchover to electric vehicles that was out of step with market realities and customer demand. Today’s final rule is an appropriate course correction,” John Bozzella, president and CEO of the Alliance for Automotive Innovation, said in a statement to ABC News.

“What the industry needs is long-term regulatory stability that includes balanced, durable and achievable fuel economy standards that continue to reduce emissions and improve fuel economy. As we’ve said before: This is the formula for preserving consumer vehicle choice and keeping the U.S. auto industry globally competitive,” he added.

The EPA calculates that the transportation sector is the largest contributor of direct greenhouse gas emissions in the country, with cars and trucks accounting for more than 75% of those emissions.Greenhouse gases are the leading contributor to climate change.

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(WASHINGTON) — Consumer sentiment dropped in September close to the lowest level ever recorded in the 74-year history of the University of Michigan’s monthly survey, fresh data on Friday showed.

Shopper attitudes soured as a monthlong bout of inflation squeezed consumers and an underlying oil supply shock showed little sign of imminent resolution.

The final reading of the University of Michigan index registered at 48.1 in September, marking the second-lowest final reading ever recorded. The index hit a historic low of 44.8 in May, just months after the outbreak of the Iran war, before ticking slightly upward to a level of 51.7 by August.

Prices rose at an annual rate of 3.4% in August, the most recent month on record, federal government data showed. Inflation stands more than a percentage point higher than the Federal Reserve’s target rate of 2%.

The average price of a gallon of gas in the U.S. is $4.49, according to AAA, marking a roughly 50% jump since the war began in late February.

Shoppers expect inflation to rise even more over the next year, the University of Michigan consumer survey found, while individuals’ view of their financial outlook has worsened.

Democrats and Republicans alike displayed sizable declines in consumer sentiment in September from the previous month, Surveys of Consumers director Joanne Hsu said in a statement on Friday.

In response to rising prices, a key long-term Treasury rate hit its highest level in nearly two decades on Wednesday, days after the Federal Reserve raised benchmark borrowing costs. The rise in borrowing costs has pushed up rates for loans like credit cards and mortgages, threatening to worsen the financial crunch.

Investors peg a two in three chance of another quarter-point interest rate hike next month, according to the CME FedWatch Tool, a measure of market sentiment.

Despite a stubborn bout of inflation, the economy remains fairly robust by some measures.

A blockbuster jobs report earlier this month showed employers added 162,000 workers in August, demonstrating continued resilience for the nation’s labor market. The economy grew over three months ending in June, defying fear of a downturn triggered by the Iran war.

Still, persistently elevated prices have continued to take a toll on shoppers, Fed Chair Kevin Warsh said at a press conference in Washington, D.C., last week.

“The plain fact is that inflation is too high and has been for too long,” Warsh said.

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