Inflation data to show whether prices continued cooldown
(NEW YORK) — A fresh inflation report on Wednesday will show whether price increases have continued a monthslong cooldown as they fall toward normal levels.
Economists expect prices to have increased 2.6% over the year ending in August. That figure would mark a notable slowdown from the year-over-year rate of 2.9% recorded in the previous month.
After six consecutive months of slowing price increases, inflation stands at its lowest level since March 2021. However, inflation remains nearly a percentage point higher than the Federal Reserve’s target rate of 2%.
The new price data on Wednesday holds major implications for the course of widely expected interest rate cuts.
The chances of an interest rate cut at the Fed’s meeting next week are all but certain, according to the CME FedWatch Tool, a measure of market sentiment. Market observers are divided over whether the Fed will impose its typical cut of a quarter of a percentage point, or opt for a larger half-point cut.
So far this year, the job market has slowed alongside cooling inflation. That trend was underscored last week by a weaker-than-expected jobs report, though employers added a solid 142,000 jobs. The unemployment rate has ticked up this year from 3.7% to 4.2%.
The Fed is guided by a dual mandate to keep inflation under control and maximize employment. In theory, low interest rates help stimulate economic activity and boost employment, while high interest rates slow economic performance and ease inflation.
Recent trends have shifted the Fed’s focus away from controlling inflation and toward ensuring a healthy job market.
Speaking at an annual gathering in Jackson Hole, Wyoming last month, Fed Chair Jerome Powell said the “time has come” for the Fed to adjust its interest rate policy.
At previous meetings, Powell said the Fed needed to be confident that inflation had begun moving sustainably downward to its target rate of 2% before instituting rate cuts. Last month, Powell appeared to indicate that the Fed had achieved that objective.
“My confidence has grown that inflation is on a sustainable path down to 2%,” Powell said.
Since last year, the Federal Reserve has held interest rates at their highest level in more than two decades. High borrowing costs for everything from mortgages to credit card loans have helped slow the economy and lower inflation, but the policy risks tipping the U.S. into a recession.
Last month, Goldman Sachs economists raised the probability of a U.S. recession in the next year from 15% to 25%. However, economists disagree about whether current economic conditions warrant serious concern.
(NEW YORK) — Vice President Kamala Harris has received endorsements from most of the nation’s top labor unions, with a key exception: The International Brotherhood of Teamsters.
Teamsters President Sean O’Brien, who leads the union of 1.3 million members, drew attention last month when he spoke at the Republican National Convention, praising former President Donald Trump as “one tough SOB.”
The speech followed a visit by Trump to Teamsters headquarters in January, but little has been known about what Trump told some union members, the executive board and O’Brien at the meeting months before the RNC.
Details about Trump’s visit, first reported by ABC News, reveal an effort to woo meeting attendees with labor-friendly views and a promise of political access if the Teamsters went on to endorse him, according to an account published last month by the Teamsters in the union’s quarterly magazine.
“Before departing the union’s headquarters, the former President directly told those in attendance that the Teamsters would have a seat at the table if a potential endorsement was made for a second administration,” the Teamsters magazine said.
Speaking with Teamsters members at its national office in Washington, D.C., Trump described union contracts as an effective means of winning wage gains amid high inflation, the union said. Trump also said he agreed with attendees who voiced support for antitrust policy and who described the strong potential for growth in the U.S. labor movement, according to the union’s account.
Trump appeared to voice views friendlier to unions than he has shared in some other appearances on the campaign trail. Some positions he offered up with the Teamsters stood in contrast with stances his administration took while he was in office.
“The former President often pointed to persistent inflation as a detriment to any marginal gains achieved by workers to increase their wages but acknowledged that union workers like Teamsters were much more likely to get ahead thanks to strong collective bargaining agreements,” the magazine said.
The Teamsters did not immediately respond to a request for comment. Neither did the Trump campaign.
In response to a previous request for comment, Teamsters Assistant Director of Communications Kara Deniz told ABC News the Teamsters has traditionally endorsed a candidate for president after the party conventions.
“We are on our timeline and continuing to engage our members in this process,” Deniz added.
To be sure, the magazine sent by the Teamsters to its members included accounts of roundtables held with President Joe Biden, as well as third-party candidates Robert Kennedy Jr. and Cornel West. Last month, the Teamsters invited Vice President Kamala Harris for a discussion at the union’s headquarters, the union said in a post on X. The Harris campaign did not immediately respond to a request for comment about the invitation.
The Teamsters is currently carrying out a vote among its members on who the union should endorse, the union said in a post on X last week.
During the roundtable discussion in January, which the union said lasted more than an hour, Trump declined to offer a firm view on potential legislation enshrining “right to work” nationwide, the union said. Rather, Trump said, such legislation should be left up to the states to decide for themselves, according to the union.
Currently, 26 states have enacted right-to-work laws, which allow workers to opt out of membership in a union at their workplace. The laws are widely opposed by unions in part because studies have shown that states with right-to-work laws have lower unionization rates.
In declining to support a nationwide right-to-work law, Trump bucked the position of more than half of the Republican members of Congress, who’ve signed onto such a measure introduced last year.
As president, however, Trump voiced support for right-to-work laws.
“The president believes in right to work,” then-Press Secretary Sean Spicer said at a White House press conference in February 2017.
More generally, the favorable attitude toward union contracts that Trump expressed in the meeting contrasts with efforts taken by the Trump administration that made it more difficult for workers to form a union.
Trump appointees at the National Labor Relations Board, a federal agency that sets labor rules, for instance, expanded the length of time between when a union files for representation and when an election takes place. That additional time affords greater opportunity for anti-union employers to dissuade workers.
At the meeting, Trump also told Teamsters members that he felt public sector workers should have the same rights as union members at private companies, according to the account published by the Teamsters last month.
However, the Trump administration filed a brief in support of plaintiffs in a 2018 Supreme Court case that struck a major blow to public sector unions.
In Janus v. American Federation of State, County, and Municipal Employees, Trump-appointee Neil Gorsuch cast a decisive fifth vote that made it illegal for public sector unions to charge so-called “fair share fees” to workers who opt out of belonging to a union at their workplace.
Labor unions widely condemned the decision, saying it would deny unions crucial funds that allow them to advocate for all workers at a given employer.
The remarks made by Trump at the meeting with the Teamsters sounded a more positive tone toward unions than he has expressed in some other settings during the campaign.
In an interview on Monday with billionaire entrepreneur Elon Musk, Trump praised Musk for what he described as a willingness to fire employees who go out on strike. Federal labor law prohibits the termination of workers for engaging in a collective labor action, such as a strike.
“They go on strike. I won’t mention the name of the company but they go on strike and you say, ‘That’s OK. You’re all gone. You’re all gone. Every one of you is gone.’ You are the greatest,” Trump told Musk in an interview broadcast on X.
O’Brien sharply criticized the comments on Tuesday.
“Firing workers for organizing, striking, and exercising their rights as Americans is economic terrorism,” O’Brien said.
The United Auto Workers filed federal charges against Trump and Musk on Tuesday over the remarks, alleging that the comments amounted to threats that workers would be fired for going on strike. Musk did not immediately respond to ABC News’ request for comment.
At multiple fundraisers this year, Trump urged CEOs to make large donations because unions are giving significant funds to Democrats, the The Washington Post reported last month.
Art Wheaton, the director of labor studies at Cornell University’s School of Industrial and Labor Relations in Buffalo, New York, said the comments made at the Teamsters meeting appear to be in keeping with efforts Trump has made to woo other constituencies.
“He likes to speak to whoever the audience is and say good things about them,” Wheaton told ABC News. “With this audience, he did not want to appear anti-union.”
“He seems to pander to his audience, which is not unusual for a politician,” Wheaton added.
(NEW YORK) — United Airlines flight attendants, represented by the Association of Flight Attendants, moved closer to a strike Wednesday after the union announced that 99.99% of service members voted in favor of strike authorization.
The vote included 90% of the United Airlines flight attendant staff.
Among the strike requests, flight attendants are demanding significant double-digit base pay increases, being compensated for time at work outside of flights, schedule flexibility and work rule improvements, job security, retirement and more, according to the union.
The historic vote marked the first time in 20 years that United flight attendants have authorized a strike, since the airline’s 2005 bankruptcy negotiations.
However, a strike will not occur immediately and despite the vote, there will be no immediate disruptions to airline operations.
Experts say it’s highly unlikely United flight attendants will actually walk off the job. There are a number of steps that must happen before a strike can take place and the president and Congress have the power to stall or stop an airline strike.
“To be clear, there is no work stoppage or labor disruption,” United told ABC News in a statement Wednesday. “Off-duty flight attendants are simply exercising their right to conduct an informational picket.”
The results of the strike authorization vote were announced as nearly 20 informational picket lines were seen at airports across the country.
“We deserve an industry-leading contract. Our strike vote shows we’re ready to do whatever it takes to reach the contract we deserve,” Ken Diaz, president of the United chapter of the Association of Flight Attendants, said in a statement Wednesday.
“We are the face of United Airlines and planes don’t take off without us. As Labor Day travel begins, United management is reminded what’s at stake if we don’t get this done,” he added.
After this week, the union walked away from federally mandated negotiations. The union will now ask the National Mediation Board to release them into a 30-day “cooling-off” period, which would set a potential strike deadline.
“The United management team gives themselves massive compensation increases while Flight Attendants struggle to pay basic bills,” Diaz continued. “The 99.99% yes vote is a clear reminder that we are unified in the fight against corporate greed and ready to fight for our fair share of the profits we create.”
Similar strike authorization votes have been cast at competing airlines including American, Alaska, Southwest, and more.
(NEW YORK) — Are a 1938 Alfa Romeo 8C 2900B Lungo Spider and a 1960 Ferrari 250 GT SWB California enough to convince wealthy collectors to shell out millions of dollars at California’s Monterey Car Week?
As thousands descend on Monterey and Carmel for the world’s largest car event, deep-pocketed collectors have pulled back their spending on vintage and classic cars in the past year. Some insiders worry the recent stock market turmoil and murmurs of a potential recession may have convinced interested buyers to instead wait out the uncertainty.
Five auction houses — RM Sotheby’s, Bonhams, Mecum, Broad Arrow and Gooding & Company — have assembled more than 500 vintage and rare cars for serious collectors and enthusiasts to bid on starting Thursday. Some cars could fetch $5 million, or even $30 million. At least 150 may soon be worth seven figures.
“We have all seen a tougher market in 2024. The market is normalizing after pent-up demand during COVID,” Bryon Madsen, president of RM Sotheby’s, told ABC News. “Geo-political events have more influence on the mindsets of buyers [than] any economic indicators. The U.S. election, regardless of who wins, will have an impact.”
RM Sotheby’s is offering 201 cars this year, nearly the same number as 2023. Twenty cars could sell in the $2 million to $5 million range, Madsen said, noting that a 1995 Ferrari F50 “could do well above its estimate” of $4.5 million to $5 million.
“Investing in cars … has proven positive over several decades,” he said. “Automobiles have long been regarded as alternative assets, as well as an inflation hedge. Cash exists with the buyers in this market.”
According to Hagerty Automotive Intelligence, this year’s Monterey auctions could rake in a combined $459 million. Last year the auction receipts totaled $403 million, down from $471 million in 2022.
McKeel Hagerty, the CEO of Hagerty, an automotive enthusiast brand that also owns Broad Arrow, said once-in-a-lifetime consignments, such as the 1938 Alfa Romeo 8C 2900B Lungo Spider from Gooding & Co., will draw strong demand and bidding. He said he’s optimistic that buyers will spend as usual when the cars roll up to the auction stage.
“The stock market volatility can be correlated with Monterey sales … sometimes these market conditions result in folks pulling back and waiting while sometimes they encourage enthusiasts to deploy capital in nonpecuniary ways,” he told ABC News. “The classic car market is about 10% below its December 2022 peak so it’s already had a healthy reset.”
He added, “Why not own, drive and enjoy a classic if stock market returns are going to be flat? We’re just going to have to wait-and-see a few more days.”
Even the rising cost of buying a hotel room is Monterey and paying hundreds — if not thousands — for a ticket to the prestigious Pebble Beach Concours or The Quail have done little to dissuade enthusiasts from attending these famous events, according to Bring a Trailer founder Randy Nonnenberg.
“I hear people saying, ‘I am coming, I missed it last year,'” he told ABC News. “It’s not a financial decision … people will find a way to come to Pebble. Automakers are using Monterey as the primary place to release cars and that brings a different audience and a different energy. There are way more eyes on Monterey than in the past and bigger visibility leads to bigger auction results.”
Sandra Button, chairman of the Pebble Beach Concours d’Elegance, pointed out that automotive fans will make the pilgrimage to Pebble “even in a year when car values are going down.”
She said she tries to make her show “accessible as much as possible” to all enthusiasts and attendance on Sunday could reach 20,000, on par with previous years. Moreover, there will be 215 cars on the show field — including 50 from outside the country — a sign, she said, that investors are returning to Pebble in force.
“We sold out on hotel rooms and VIP tickets,” she told ABC News. “The collectors are getting younger and there’s a generational shift happening. The balance of cars shown is shifting to post war. There is a 125-year span of cars on the field — that has never happened before.”
Eric Minoff, a vice president at Bonhams, said 2024 could still be a banner year for car auctions, even though prices have been flat since January. Last year Bonhams sold a 1967 Ferrari 412P Berlinetta for $30.25 million, the top-selling car that entire week. Minoff said he hopes he can replicate that success this year.
“If the COVID period taught us anything, it’s that there’s value to get away from everywhere else,” he told ABC News. “Cars give you an opportunity to escape everything else that’s going on. There are plenty of folks still eager to buy cars.”