Holiday shopping surges, flexing strength of US economy

(WASHINGTON) — The Federal Reserve cut interest rates by a quarter of a percentage point on Wednesday, delivering relief for borrowers at the central bank’s last meeting before President-elect Donald Trump takes office next month.

The central bank predicted fewer rate cuts next year than it had previously indicated, however, suggesting concern that inflation may prove more difficult to bring under control than policymakers thought just a few months ago.

The major stock indexes inched downward in trading after the announcement in response to the forecast of fewer rate cuts.

Speaking at a press conference in Washington D.C. on Wednesday, Fed Chair Jerome Powell said the central bank may proceed at a slower pace with future rate cuts, in part because it has now lowered interest rates a substantial amount.

Powell also said a recent resurgence of inflation influenced the Fed’s expectations, noting that some policymakers considered uncertainty tied to potential policy changes under Trump.

“It’s common-sense thinking that when the path is uncertain, you get a little slower,” Powell said. “It’s not unlike driving on a foggy night or walking around in a dark room full of furniture.”

The move marked the third consecutive interest rate cut since the Fed opted to start dialing back its fight against inflation in the fall. The Fed has lowered interest rates by a percentage point in recent months.

However, the Fed’s forecast on Wednesday said it anticipates only a half a percentage point of rate cuts next year and another half-percent cut in 2026.

The benchmark interest rate helps determine loan payments for everything from credit cards to mortgages. Even after recent cuts, the Fed’s interest rate remains at a historically high level of between 4.25% and 4.5%.

The size of the interest rate cut on Wednesday matched investors’ expectations.

The latest rate cut may prove the Fed’s last for many months, experts previously told ABC News.

A recent bout of stubborn inflation could prompt central bankers to freeze interest rates in place as they bring price increases under control. A humming economy, meanwhile, shows little need for the jolt of activity that lower borrowing costs may provide, the experts said.

Consumer prices climbed 2.7% in November compared to a year ago, marking two consecutive months of accelerating inflation, government data last week showed.

Inflation has slowed dramatically from a peak of more than 9% in June 2022. But the recent uptick has reversed some progress made at the start of this year that had landed price increases right near the Fed’s target of 2%.

In August, Trump said the president should have a role in setting interest rates. The proposal would mark a major shift from the longstanding norm of political independence at the Fed.

Powell struck a defiant tone last month when posed with the question of whether he would resign from his position if asked by Trump.

“No,” Powell told reporters assembled at a press conference in Washington, D.C., blocks away from the White House.

When asked whether Trump could fire or demote him, Powell retorted: “Not permitted under the law.”

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(NEW YORK) — Walmart, the world’s largest retailer, is rolling back its diversity, equity and inclusion policies.

This brings it in line with several major corporations that have reviewed their operational practices after facing considerable pressure from conservatives.

No longer considering race and gender as a way to increase diversity when it offers supplier contracts, is an example of the retailer’s reported rollbacks, according to the Associated Press.

The company said it didn’t currently have quotas and didn’t plan to going forward; however, it planned to stop collecting demographic data when determining financing eligibility for grants.

In a statement to ABC News, Walmart said, “Our purpose, to help people save money and live better, has been at our core since our founding 62 years ago and continues to guide us today. We can deliver on it because we are willing to change alongside our associates and customers who represent all of America.”

“We’ve been on a journey and know we aren’t perfect,” the statement continued, “but every decision comes from a place of wanting to foster a sense of belonging, to open doors to opportunities for all our associates, customers and suppliers and to be a Walmart for everyone.”

Walmart will also be “reviewing grants to Pride events to make sure it is not financially supporting sexualized content targeting kids,” the retail giant told AP.

The changes also extend to Walmart’s sizable third-party marketplace.

For example, those third-party retailers would no longer be able to list and sell “sexual and transgender products aimed at minors,” the company said. An example is chest binders for young people who may be using the products as part of their gender-affirming care.

The world’s largest retailer confirmed the changes on Monday.

They were first announced in a post on X by conservative political commentator Robby Starbuck.

He said that he had been in touch with the Arkansas-based corporation about a story he was doing about “wokeness,” which turned into “productive conversations” — and, ultimately, led to reversals in Walmart’s approaches to DEI.

Other changes that Starbuck listed in his announcement included: discontinuing racial equity training through the Racial Equity Institute, no longer participating in the Human Rights Coalition’s Corporate Equity Index (a national benchmarking tool for LGBTQ individuals) and eliminating the use of Latinx (a gender-neutral word for anyone of Latin descent).

He also stated that Walmart will be eliminating the use of the phrase “DEI” altogether.

“This is the biggest win yet for our movement to end wokeness in corporate America,” wrote Starbuck, who has also gone after companies including Boeing, Lowe’s, Tractor Supply and Deere & Co.

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(WASHINGTON) — U.S. hiring surged in November, bouncing back from a dismal performance in the previous month and returning to strong growth.

Employers added 227,000 workers last month, exceeding economist expectations of 214,000 additional jobs, U.S. Bureau of Labor Statistics data on Friday showed. The unemployment rate ticked up to 4.2%, which remains historically low.

The fresh data offered a key clue about the health of the economy as the nation hurtles toward end-of-the-year holidays and the inauguration of President-elect Donald Trump. The findings could also help determine whether the Federal Reserve cuts interest rates when officials meet later this month.

U.S. hiring has defied doomsayers for years. Stubborn inflation, high interest rates and a contentious presidential campaign have proven no match for a resilient labor market.

A weaker-than-expected reading may have raised alarm and caused observers to revisit disappointing results in October, which many economists have attributed to one-off disruptions of data collection.

The labor market hit a rare speed bump in October as the economy added 12,000 jobs, its weakest performance since December 2020.

The data appeared to offer little more than a blurry snapshot due to data-gathering disruptions, however. A combination of hurricanes and work stoppages likely caused an undercount of hiring that month, experts told ABC News.

Despite an overall slowdown this year, the labor market has continued to grow. Hiring has persisted at a solid pace; meanwhile, the unemployment rate has climbed but remains near a 50-year low.

Overall, inflation has eased and the economy has expanded, giving rise to hope that the U.S. could achieve a soft landing.

U.S. GDP grew at a 2.8% annualized rate over three months ending in September, U.S. Bureau of Economic Analysis data last month showed. That figure fell slightly below economists’ expectations, but demonstrated brisk growth that was propelled by resilient consumer spending.

Inflation has slowed dramatically from a peak of more than 9% in June 2022, but price increases remain slightly higher than the Fed’s target of 2%.

The jobs report marks one of the last pieces of significant economic data before the Fed announces its next interest rate decision on Dec. 18.

The Fed is expected to cut interest rates by a quarter of a percentage point, according to the CME FedWatch Tool, a measure of market sentiment.

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