Inflation increased in January, posing obstacle for Trump tariff plans
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(NEW YORK) — Consumer prices rose 3% in January compared to a year ago, ticking up from the previous month and posing an obstacle for Trump administration tariff policies that many economists expect to raise some prices, government data on Wednesday showed. The inflation reading came in higher than economists had predicted.
The fresh data extends a bout of resurgent inflation that stretches back to last year. Two weeks ago, the Federal Reserve opted to hold interest rates steady in part out of concern regarding the stubborn price increases.
Egg prices, a closely watched symbol of rising costs, soared 53% in January compared to a year ago. An avian flu has decimated the egg supply, lifting prices higher.
Beef prices climbed 5% and bacon prices jumped 6% in January compared to a year ago, data showed. By contrast, prices dropped over that same period for bread, rice and tomatoes.
Core inflation — a measure that strips out volatile food and energy prices — increased 3.3% over the year ending in December, ticking lower than the previous month, the data showed. That gauge also sped up from the previous month.
Inflation has slowed dramatically from a peak in June 2022, but price increases remain a percentage point higher than the Fed’s target rate.
Since Trump took office on Jan. 20, he has announced a series of tariffs, which economists say could push prices higher. Tariffs on steel and aluminum announced by Trump this week could raise prices for a set of products that includes refrigerators, beer and automobiles, experts previously told ABC News.
In a post on Truth Social on Wednesday morning, Trump appeared to fault former President Joe Biden for the uptick in inflation, writing: “BIDEN INFLATION UP!”
Biden served during more than half of the month of January, leaving office on Jan. 20. Trump, however, said during the presidential campaign earlier this year that he would bring down prices “starting on day one.”
This is a developing story. Please check back for updates.
(NEW YORK) — Cryptocurrencies affiliated with President Donald Trump and first lady Melania Trump plummeted in the initial hours after Trump was sworn into office Monday.
“Official Trump,” a recently launched crypto token, plunged more than 20% in value over a 24-hour stretch ending Tuesday morning, according to crypto tracking site CoinGecko. After the drop, Official Trump stood at $38.
The decline for Trump’s meme coin reverses some of the gains enjoyed in an initial surge after it hit crypto markets last week. The coin’s price climbed from about $10 on Saturday morning to a high of about $74.59 before it began to slide.
“Melania Meme,” which also launched last week, dropped in value by more than half over a 24-hour timespan ending on Tuesday morning, CoinGecko data showed. The price of the Melania Meme was $4.19 on Tuesday morning.
The recent decline for the coins associated with Trump and Melania coincided with a slight drop for bitcoin, the world’s largest cryptocurrency. In early trading on Tuesday, bitcoin fell nearly one percentage point, putting its price at $102,853.
Many digital assets have climbed since Trump won the November election, indicating investor enthusiasm about declarations Trump made in support of cryptocurrency.
In July, Trump told the audience at a cryptocurrency conference in Nashville, Tennessee, that he wanted to turn the U.S. into the “crypto capital of the planet.”
Trump also has promised to ease regulations for the sector and establish the federal government’s first National Strategic Bitcoin Reserve.
On Monday, Securities and Exchange Commission Chair Gary Gensler officially resigned from his position, marking the departure long-sought by some crypto boosters who viewed Gensler as overly restrictive toward digital assets.
There have been reports that Trump would sign an executive action that would prioritize cryptocurrency policy. However, no such order was among the dozens of actions Trump signed
(NEW YORK) — Online holiday shopping soared to a fresh record high in 2024, driven by an array of e-commerce discounts and adoption of AI-fueled shopping assistants, according to data released on Tuesday by Adobe.
E-commerce sales topped $240 billion in November and December, climbing nearly 9% when compared with the gift-buying season a year prior, data showed.
The data indicated that three product categories accounted for more than half of the online holiday spending: electronics, apparel and home goods.
Spending on cosmetics totaled nearly $8 billion, jumping more than 12% compared to a year prior. That marked the largest year-over-year spending increase for any product category, the data showed.
Discounts helped drive strong sales for some high-priced items, Adobe said, pointing to a 20% jump in units sold for expensive goods.
The fresh data indicated a spike in use of shopping assistants powered by generative AI, suggesting the technology has seeped into the retail sector’s busiest time of the year.
Traffic to retail sites from generative AI-powered chatbots skyrocketed 1,300% over November and December when compared to the same period a year prior, the data showed.
The share of consumers arriving via AI shopping assistants remains modest, however, Adobe said. Shoppers arrived at retail sites via links shared by the chatbots.
“The 2024 holiday season showed that e-commerce is being reshaped by a consumer who now prefers to transact on smaller screens and lean on generative AI-powered services to shop more efficiently,” Vivek Pandya, a lead analyst at Adobe Digital Insights, said in a statement.
The e-commerce data comes weeks after initial indicators pointed to a robust holiday shopping season.
Overall holiday spending surged in 2024, blowing past expectations and outpacing customer purchases over the gift-buying season last year, according to data released by Mastercard SpendingPulse last month.
The end-of-year flex of consumer strength marks the latest indication of resilient U.S. buying power, which has kept the economy humming despite a prolonged stretch of high interest rates.
Gross domestic product grew at a solid 2.8% annualized rate over three months ending in September, the most recent quarter for which data is available.
The labor market has slowed but proven sturdy. The unemployment rate stands at 4.2%, a historically low figure.
Consumer spending accounts for nearly three-quarters of U.S. economic activity.
The increase in holiday spending coincided with an initial bout of relief for borrowers, as the Federal Reserve cut interest rates by a total of one percentage point over the final few months of the year.
However, interest rates still stand at a historically high level of between 4.25% and 4.5%.
Lower interest rates typically stimulate economic activity by making it easier for consumers and businesses to borrow, which in turn fuels investment and spending. But interest rate cuts usually influence the economy after a lag of several months, meaning the recent lowering of rates likely had little impact on holiday spending.
(NEW YORK) — While some companies are steering away from diversity, equity, and inclusion (DEI) policies, others are sticking with their previous commitments.
Leaders at Goldman Sachs, Costco and JPMorgan Chase & Co have recently spoken out in support of their diversity programs, as anti-DEI activist shareholders continue to push proposals that would roll back company policies.
Costco’s Board of Directors unanimously voted Thursday against a proposal from the National Center for Public Policy Research that had called for Costco to evaluate and publish a report on any risks that may be associated with the company’s diversity and inclusion efforts, according to a Jan. 23 shareholders meeting statement.
“Our efforts around diversity, equity and inclusion follow our code of ethics,” the board statement on the proposal stated. “For our employees, these efforts are built around inclusion – having all of our employees feel valued and respected. Our efforts at diversity, equity and inclusion remind and reinforce with everyone at our Company the importance of creating opportunities for all. We believe that these efforts enhance our capacity to attract and retain employees who will help our business succeed.”
The board argued that its diversity programs comply with the law, and defended its commitments to diversifying its supplier base — including special attention to small businesses. The board statement ultimately argued the proposal reflected a “policy bias.”
Costco representatives have not responded to ABC News’ request for comment.
Amid ongoing pressure over its DEI initiatives, a Goldman Sachs spokesperson told ABC News in a statement: “We strongly believe that organizations benefit from diverse perspectives, and Goldman Sachs is committed to operating our programs and policies in compliance with the law.”
Goldman Sachs representatives directed ABC News to a Jan. 22 interview with CNBC from CEO David Solomon, in which Solomon said that the financial services company is looking at these issues “through the eyes of our clients.”
He added, “They think about decarbonization, they think about climate transition,” he said. They think about their businesses, how they find talent, the diversity of the talent they find all over the world. You know we operate a big global business and we serve global clients everywhere. We think about these issues through the lens of, how do we help our clients navigate these things? And we continue to stay focused on talking to our clients and doing the things we’ve always done.”
The company has come under scrutiny for its stated commitments to racial equity, gender equality and increasing diversity. Strategies listed on its website include expanded recruitment efforts, pay gap data collection, aspirational hiring goals and career development programs.
JPMorgan Chase CEO Jamie Dimon, in an interview with CNBC, said he’s “very proud of what we’ve done.”
“We will continue to reach out to the Black community, the Hispanic community, the veterans community, LGBTQ, we have teams with second chance initiatives — where I go, with blue states, red states, governors, they like what we do,” said Dimon.
JPMorgan Chase did not respond to request for comment.
DEI initiatives, according to ABC News interviews with DEI experts, are intended to address and correct discriminatory policies or practices that may be found within an organization. Experts told ABC News that some examples of DEI initiatives include: implementing accessibility measures for people with disabilities, addressing gender pay inequity, mitigating bias in hiring and recruitment practices, and holding anti-discrimination trainings and more.
Several other companies across industries — including Amazon, Meta and McDonalds — have stepped back and ended their diversity and inclusion initiatives that were largely pledged after the police killing of George Floyd and subsequent protests against racial inequality.
The reversal comes amid ongoing anti-DEI action from conservative politicians, who have implemented policies restricting diversity and equity programs in government, colleges, universities, and more. After taking office this week, President Donald Trump signed an executive order dismantling DEI programs in the federal government.
In an interview with ABC News, Ethan Peck, deputy director for the National Center for Public Policy Research’s Free Enterprise Project, said that diversity programs pose risks to shareholder value, as they may invite lawsuits from those claiming to have been discriminated against based on recent arguments made against affirmative action.
Some legal experts disagree, arguing that repealing DEI policies could leave companies vulnerable to potential lawsuits from marginalized groups alleging discrimination.
Peck, whose group mounts campaigns to pressure companies to disband DEI programs, argued that diversity programs sacrifice “excellence and innovation,” but said he did not provide examples of employment discrimination at these companies.
“Eventually you will drop DEI, and it’s better for your shareholders if you do it sooner rather than later,” said Peck, who noted that Boeing and John Deere were faced with similar proposals and later dropped their diversity, equity and inclusion programs.
“I believe that this is a fad,” he said.
Anti-DEI activists also argue that “aspirational” goals for increasing diversity and representation are a guise for quotas, which are largely considered illegal, according to the Equal Employment Opportunity Commission.
“You can be fair in hiring and promotions with candidates of all backgrounds and perspectives without resorting to quota systems and considerations based on immutable characteristics,” said Paul Chesser, the director of the Corporate Integrity Project at the National Legal and Policy Center, in an emailed statement.
Christie Smith, former vice president of inclusion and diversity at Apple and C-Suite adviser, argued that DEI commitments instead increase shareholder value.
DEI has prompted “increased innovation, increased growth in these organizations, increased opportunities in startup organizations, which mostly women and people of color are at, starting these kinds of companies and growing our economy in that way,” she told ABC News.
