(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.
The Boeing company logo (Photo by Patrick Pleul/picture alliance via Getty Images)
(NEW YORK) — The Department of Justice and Boeing have finalized their plea agreement — the manufacturer will plead guilty to conspiracy to defraud the United States and pay a fine of $243.6 million, according to a court filing.
Boeing will also serve a three-year term of organizational probation; invest $455 million in compliance, quality and safety programs; and the board of directors will meet with the families of victims of the two MAX crashes. An independent compliance monitor will also be appointed.
This is not a done deal until it is approved by U.S. District Judge Reed O’Connor in the Northern District of Texas, who can either approve the deal or reject it.
According to court documents, “the plea agreement will not provide Boeing with immunity for any other conduct, including any conduct that may be the subject of any ongoing or future Government investigation of the Company.”
In a statement, Boeing said, “Boeing and the Justice Department have filed a detailed plea agreement in federal court, which is subject to court approval. We will continue to work transparently with our regulators as we take significant actions across Boeing to further strengthen our safety, quality and compliance programs.”
Lawyers representing the families of MAX crash victims have voiced their displeasure to ABC News.
Paul Cassell, who represents 15 MAX crash victim families, said: “The proposed plea has all the problems in it that the families feared it would have. We will file a strong objection to the preferential and “sweetheart” treatment Boeing is receiving within seven days with Judge O’Connor. We will strongly urge him to reject this proposed plea.”
Mark Lindquist, who also represents victim families, said: “Most importantly this plea agreement fails to acknowledge that the charged crime of Conspiracy to Defraud caused the death of 346 people. This is a sore spot for victim families who want accountability and acknowledgment.”
Boeing was accused of misleading the Federal Aviation Administration about aspects of the Max before the agency certified the plane for flight. Boeing did not tell airlines and pilots about the new software system, called MCAS, that could turn the plane’s nose down without input from pilots if a sensor detected that the plane might go into an aerodynamic stall.
Max planes crashed in 2018 in Indonesia and 2019 in Ethiopia after a faulty reading from the sensor pushed the nose down and pilots were unable to regain control. After the second crash, Max jets were grounded worldwide until the company redesigned MCAS to make it less powerful and to use signals from two sensors, not just one.
(NEW YORK) — Shares of Tesla fell 12% in early trading on Wednesday after an earnings release showed slumping profits in the face of strengthened competition and sluggish sales.
The earnings report fell short of Wall Street expectations for profit.
“There have been quite a few competing electric vehicles that have entered the market and mostly, they have not done well, but they have discounted their EVs quite substantially, which has made it more a bit difficult for Tesla,” Tesla CEO Elon Musk told analysts on Wednesday.
Tesla shares plummeted more than 25% at the outset of 2024 but the company had recovered all of those losses this month after it released a better-than-expected report on vehicle deliveries. The stock price decline on Wednesday puts shares at their lowest level in more than three weeks.
The earnings results released on Tuesday mark two consecutive quarters of declining profits. Revenue from government credits increased to $890 million in the most recent quarter, accounting for more than half of the company’s profits.
Gordon Johnson, CEO and founder of data firm GLJ Research, who is bearish on Tesla, said the boost in revenue from government credits afforded the company a financial lifeline even as it struggled in its main line of business: selling vehicles.
“What is the core business doing?” Johnson told ABC News, suggesting the decline in performance was even worse than the earnings indicate.
Critics say demand for the company’s vehicles has slowed as a result of its failure to release a new, affordable model, as well as a softening in the overall EV market. As competitors roll out alternatives, Tesla faces a difficult path to regain its previous breakneck growth, analysts previously told ABC News.
Proponents, however, point to the company’s record of industry-leading innovation, suggesting the breakthroughs that fueled its sprint ahead of the competition could reemerge as it readies for new EV models and perfects its autonomous driving software.
Dan Ives, a managing director of equity research at the investment firm Wedbush, who is bullish on Tesla, downplayed the weaker-than-expected earnings report and highlighted potential gains from the company’s development of autonomous vehicles.
“We were not looking for major fireworks this quarter from Tesla,” Ives said on Wednesday in a note to investors. “The next phase of the Tesla growth story is around autonomous, Robotaxis, and AI playing out for Musk & Co. in our view and that vision is on the doorstep.”
Speaking to analysts on Tuesday, Musk said the company had made “a lot of progress” on its full self-driving software over the most recent quarter.
“We think customers will experience a step-change improvement in how well supervised full self-driving works,” Musk added.
That product has faced challenges, however. In December, Tesla recalled about 2 million cars over a safety issue tied to its autopilot system. Two months later, the company recalled about 360,000 more cars over crash risks tied to its self-driving system. Musk said on Tuesday that the company is delaying the launch of its Robotaxi service until October.
Johnson, of GLJ Research, voiced skepticism about the Robotaxi initiative.
“Tesla doesn’t have one Robotaxi on the road,” Johnson said.
Travelers wait to board their delayed flight at the Hartsfield-Jackson Atlanta International Airport on July 23, 2024 in Atlanta, Georgia. (Brandon Bell/Getty Images)
(NEW YORK) — Delta Air Lines passengers are voicing outrage over the growing chaos with the carrier that has yet to rebound its operations since the global tech outage.
The Atlanta-based airline is in its sixth day of flight disruptions leaving ticketed passengers stranded at airports, following the CrowdStrike outage on Friday that impacted industries from banks to hospitals.
“This is our fourth cancellation,” one frustrated traveler, Sarah Lassig, told ABC News Bay Area station KGO-TV.
“I just wish we had given up and stayed home,” her husband, Nathan Lassig, added.
As of time of publication, according to the U.S. Department of Transportation, Delta has canceled more than 6,000 flights since Friday’s IT issues began. The airline is now the subject of a federal investigation.
“We estimate that more than half a million passengers have been impacted by this,” Transportation Secretary Pete Buttigieg said in a press briefing. “There is something unique to Delta, that requires specific attention … we want to understand how this could have happened.”
In a company memo, Delta said they’re seeing day over day progress and that “teams are working around the clock to reposition planes and people to where they need to be so we can return to normal operations by the end of the week.”
Rachelle Akuffo told ABC News that Delta canceled her and her daughter’s flight to London and the airline rebooked them with a layover of more than 340 hours.
“The math is not mathing, like in what world would I have a two-week layover?” she questioned.
There have also been reports of unaccompanied minors who have been stranded as a result of the tech meltdown that forced Delta to suspend its program for unaccompanied minors, leaving parents frustrated and concerned.
JR Reed told ABC News Atlanta station WSB-TV that he was scrambling to get his three children home after visiting relatives across the country.
“They have kids on connecting flights every day all the time,” Reed said. “It appears that they don’t want to dedicate the agents to go handle it. And I don’t think they thought through. What about all the kids that were halfway through their trips?”
According to FlightAware, at least 10,672 flights have been canceled and 54,420 flights have been delayed since Friday, as of Wednesday morning.
A Delta Airlines plane sits on the tarmac at the Charlotte Douglas International Airport on July 23, 2024 in Charlotte, North Carolina. Delta Airlines has canceled and delayed hundreds of additional flights as problems from the outage caused by the Crowdstrike software update continue into a fifth day. (Brandon Bell/Getty Images)
(NEW YORK) — Delta apologized for its widespread cancellations and delays over the last several days, issuing a new message Wednesday to customers affected by the fallout from the global IT outage last Friday.
The airline also says it plans to issue 10,000 bonus miles and offers to reimburse “reasonable expenses.”
“Please accept our sincere apologies for the disruption to your recent travel plans caused by a vendor technology outage affecting airlines and companies worldwide,” the airline said. “Delta teams have been working tirelessly to restore our operation to get our customers safely to their final destinations. We understand that unexpected disruptions like this are difficult for everyone and do not reflect the operational reliability and experience you have come to know and expect from us.”
Delta also said that if passengers incurred “any hotel, meal, or transportation expenses while in transit resulting from this flight disruption,” they may submit a claim to the airline for a reasonable expenses reimbursement.
“Please note that we do not reimburse prepaid expenses, including but not limited to hotel reservations at your destination, vacation experiences, lost wages, concerts, or other tickets,” Delta said.
The apology comes several days after a wave of IT outages swept across the globe on Friday morning, causing thousands of flight cancellations and stalling internal and external systems across a variety of industries including hospitals, banks, stock exchanges and other institutions, as some Microsoft-based computers ceased to work.
Thousands of flights were canceled in the U.S. after American Airlines, United and Delta asked the Federal Aviation Administration for a global ground stop on all flights.
At least 2,537 flights were canceled and 8,376 were delayed in the U.S., FlightAware data reported last Friday.
“Please know that we deeply value you and your experience as our customer. Despite this unexpected disruption to our operations, we are doing everything possible to ensure your future travel meets the high service and reliability standards that Delta is known for,” the airline said. “We appreciate your trust in us and look forward to providing an exceptional experience to you on your next Delta flight.”
(NEW YORK) — McDonald’s is extending its popular $5 meal deal as the value meal battle between fast food chains wages on.
In a company memo obtained by ABC News, McDonald’s executives said most U.S. locations will extend the deal through August.
The deal that first launched on June 25 was only supposed to stay on menus for a month, but executives said the deal has resonated with millions of customers and has helped boost traffic at restaurants.
The meal combo includes a choice of a McDouble or McChicken sandwich, small french fries, four-piece chicken nuggets and a small soft drink.
Several other fast food chains including Burger King, Wendy’s, Starbucks and Taco Bell have rolled out comparable discounts this summer to entice customers voicing frustrations over fast food high prices.
Wendy’s upped the ante on Monday, announcing a new mobile app exclusive where customers can get the Honey Buddy — its Honey Butter Chicken Biscuit breakfast sandwich — for just $1 every Monday through the end of September with any purchase.
According to the Bureau of Labor Statistics Consumer Price Index, the cost of going out to eat has outpaced the cost of groceries each month this year.
(WASHINGTON) — The U.S. Department of Transportation has opened an investigation into Delta Airlines over recent flight disruptions, Transportation Secretary Pete Buttigieg said on Tuesday in a post on X.
“All airline passengers have the right to be treated fairly, and I will make sure that right is upheld,” Buttigieg said.
The airline is struggling to resume normal service five days after a global IT outage at cybersecurity firm CrowdStrike. Delta canceled more than 400 flights on Tuesday morning, according to flight tracking site FlightAware. The airline with the second-most cancellations on Tuesday has nixed only 55 flights, FlightAware says.
The outage at CrowdStrike on Friday hindered services at airlines and hospitals in the U.S., banks in Europe and a media company in Canada.
Thousands of flights were cancelled across a host of airlines on Friday, but many companies have limited disruptions over the days since.
Buttigieg requested that Delta passengers share information with the Department of Transportation.
“While you should first try to resolve issues directly with the airline, we want to hear from passengers who believe that Delta has not complied with USDOT-enforced passenger protection requirements during the recent travel disruptions,” Buttigieg said.
U.S. Vice President Kamala Harris and second gentleman Douglas Emhoff descend from Air Force Two at Delaware National Air Guard base in New Castle, Delaware, on July 22, 2024. (ERIN SCHAFF/POOL/AFP via Getty Images)
(WASHINGTON) — When Kamala Harris ran for president in 2020, she released 15 years of her personal tax returns, the most of any 2020 presidential candidate. The disclosure offers a glimpse into how Harris, who has emerged as the front-runner for the Democratic presidential nomination after President Joe Biden’s sudden withdrawal from the race, became a millionaire as a public servant.
After Harris, in 2014, married Doug Emhoff, who was then an entertainment lawyer, her net worth increased significantly due to the couple’s combined assets, a review of her tax records and financial disclosures shows.
Before then, Harris’ income came mostly from her public salaries as district attorney of San Francisco and attorney general of California.
Before she was married, the highest annual income reported by Harris was in 2010, when she reported earning $263,000. The next year, when she became attorney general, her reported income dropped to less than $160,000 a year in 2011, 2012 and 2013.
After marrying Emhoff — whose clients have included retail giant Walmart and health care company Abbott Labs, as well as a Malibu real estate agent who found fame on The Real Housewives of Beverly Hills — Harris’ income went up significantly.
As a high-profile attorney for one of the world’s largest companies, Emhoff earned more than $1 million per year and held dozens of investments and stocks, according to financial documents reviewed by ABC News.
In 2014, Emhoff owned shares of at least 30 stocks from companies including Home Depot, St. Jude Medical, Comcast, and American Express, according to his statement of economic interest, a form required for California employees.
After Harris announced she would run for U.S. Senate in 2015, Emhoff sold off many of his stocks, including CVS Health and Oracle. Harris won her Senate seat in 2016.
From 2015 until 2019, Emhoff reported dozens of publicly traded investments known as “excepted investment funds,” according to annual reports filed by Harris when she was a senator.
As Harris’ profile grew, so did her earnings. According to a 2018 annual report filed by Harris, she received an advance of more than $300,000 for her memoir, The Truths We Hold, and she and Emhoff reported a gross joint income of $1,889,156 that year, according to tax returns.
Before Harris assumed the vice presidency in 2021, Emhoff announced in December 2020 that he would leave his law firm. He joined Georgetown University’s law school as a member of faculty, where he has earned nearly $200,000 per year.
As a result of the move, the couple’s income dropped significantly, from more than $3 million in 2019 to about $450,000 in 2023.
Nevertheless, with their real estate assets and pension, Forbes estimates Harris and Emhoff’s net worth to be about $8 million, up from $7 million in 2021. Property records reviewed by ABC News show Harris sold her Washington, D.C., condo in 2021 for $1.85 million, and the couple currently owns a house in Brentwood, California, that Emhoff purchased in 2012 for $2.7 million.
If Harris becomes the Democratic presidential nominee, she will face former President Donald Trump, who has long fought to keep his tax records private.
Forbes, in its most recent accounting, estimates Trump’s net worth to be $5.9 billion, which an earlier breakdown said consists of $2.5 billion mainly from his real estate properties, clubs and resorts, plus the value of his share of Truth Social’s parent company, minus the $540 million in legal liabilities from his civil trials over the last year.
(NEW YORK) — Families, friends, and even roommates are combining forces to create more savings on grocery products by buying in bulk and splitting the bill at big box retailers like Costco and Sam’s Club.
The idea of “bulk sharing,” as first reported by the Wall Street Journal, applies to the idea that’s catching on with more American shoppers hoping to find any savings they can on everyday items.
Marissa Verna told “Good Morning America” that she shops and splits bulk items with her sister Jill.
“I don’t need 40 bags of this toddler snack,” Verna said, adding that’s why she thought to ask her sister, “‘Do you want to go halves on it and I’ll send over 20 bags for you and I’ll keep 20 bags and vice versa.'”
Verna added, “It’s really also looking for the sale items as much as it is splitting the goods as well.”
For Kristy Davies’ family of five in New Jersey, it’s a strategy that she said has helped reduce food costs by nearly $75 every week.
“I think just ease and convenience,” she said.
Davies coordinates grocery runs to stores like Costco with her mom Janet and they split the bill afterward then divvy up the food, especially with things like fresh fruit.
“When I buy in bulk, sometimes it’s too much. So I’ll share it with Kristy,” her mom said.
Before spending for herself at a regular store, Davies thinks back to when the last time one of them shopped at a warehouse retailer to decide, “is this something that I can wait and we can get at Sam’s Club because I’d rather not spend that price from the grocery store if I can help it.”
New government data has shown a stabilization in grocery prices after rapid increases from the COVID-19 pandemic that has continued over the past three years.
According to the USDA, the typical family spends about 11% of its disposable income on food, which is the highest level in three decades.
Hitha Herzog, Retail analyst and chief research officer of H Squared Research, warned that shoppers shouldn’t assume that buying in bulk is always cheaper.
“For example, if your group are the type that would go and buy very expensive pre-wrapped charcuterie boards or pre-cut vegetables — then you try to split that up — the price that you are actually saving isn’t that much relative to you just going and purchasing the vegetables or the meat on your own,” Herzog said.
(NEW YORK) — The stock price of cybersecurity company CrowdStrike plummeted in early trading on Friday amid a global IT outage that has affected clients worldwide.
Shares fell nearly 15% on Friday morning, dropping the price to its lowest level since May.
“The issue has been identified, isolated and a fix has been deployed,” CrowdStrike CEO George Kurtz said in a post on X.
This is a developing story. Please check back for updates.
