(NEW YORK) — Concerns about inflation have increasingly turned to concerns about the job market. Last month’s weaker than expected jobs report led to turmoil in stocks.
The U.S. added 142,000 jobs in August, according to the Bureau of Labor Statistics report on Friday. The figure was lower than expectations.
The reports showed a slowing but steady job market. The unemployment rate fell to 4.2%.
Jobs were added in construction and health care, according to the Bureau of Labor Statistics. July and June numbers were revised to show 86,000 fewer jobs than previously reported.
While these numbers are lower than expected, and do show a weakening job market, for now, this is still an economy that is adding a decent number of jobs. Given this latest data, the Fed is still on track to cut interest rates at its next meeting on Sept. 18.
Fed Chair Jerome Powell last month said “the time has come” to lower interest rates.
Powell indicated the Fed would soon bring interest rates down from a 23-year high. The shift could lower borrowing costs for everything from credit cards to auto loans to mortgages.
While the unemployment rate remains historically low, it ticked up to 3.8% last month. A sharp downward revision of job growth estimates in June and July lowered those totals by a combined 110,000 jobs.
(NEW YORK) — Tens of thousands of U.S. dockworkers are set to walk off the job early Tuesday morning, clogging dozens of ports along the East and Gulf coasts and potentially raising consumer prices ahead of the holiday season.
The ports account for more than half of the nation’s container imports, facilitating the transport of everything from toys to fresh fruit to nuclear reactors, JPMorgan senior equity analyst Brian Ossenbeck said in a report shared with ABC News.
A prolonged work stoppage of several weeks or months could rekindle inflation for some goods and trigger layoffs at manufacturers as raw materials dry up, experts said.
“A strike would be very, very disruptive,” said Jason Miller, a professor of supply-chain management at Michigan State University who closely tracks imports, told ABC News.
“You can’t take all this freight and either send it to other ports or put it on airplanes,” Miller added. “There is no plan B.”
The International Longshoreman’s Association (ILA), the union representing East Coast and Gulf Coast dockworkers, is seeking higher wages and a ban on the use of some automated equipment.
“ILA longshore workers deserve to be compensated for the important work they do keeping American commerce moving and growing,” the ILA told ABC News in a statement on Monday. “Meanwhile, ILA dedicated longshore workers continue to be crippled by inflation due to USMX’s unfair wage packages.”
The U.S. Maritime Alliance, or USMX, an organization bargaining on behalf of the dockworkers’ employers, declined to respond to an ABC News request for comment.
President Joe Biden retains the power to prevent or halt a strike under the 1947 Taft-Hartley Act. The U.S. Chamber of Commerce sent a letter to Biden on Monday urging the White House to intervene, which it has previously said it will not do. The White House told ABC News in a statement that it has been in contact with both the union and management in recent days.
“This weekend, senior officials have been in touch with USMX representatives urging them to come to a fair agreement fairly and quickly – one that reflects the success of the companies. Senior officials have also been in touch with the ILA to deliver the same message,” White House spokesperson Robyn Patterson said.
A prolonged East Coast and Gulf Coast port strike could moderately increase prices for a range of goods, experts told ABC News. That upward pressure on prices would result from a shortage of products caught up in the supply chain blockage, leaving too many dollars chasing after too few items, they added.
Food products are especially vulnerable to an uptick in prices, since food could spoil if suppliers sent the products ahead of time to minimize the strike impact, as they have done for some other goods, Adam Kamins, a senior director of economic research at Moody’s Analytics, told ABC News.
Additionally, a significant share of the nation’s imported auto parts pass through the ports impacted by a potential strike, which could cause an increase in vehicle prices if the strike persists.
Price increases have slowed dramatically from a peak in 2022, but inflation remains higher than the Federal Reserve’s target rate of 2%. A strike could prevent further progress, according to Kamins.
“We’re not talking about prices skyrocketing by any means, but I think it halts the momentum we’ve had over the last year or so getting inflation back in the bottle,” he said.
In 2002, a strike among workers at West Coast ports lasted 11 days before then-President George W. Bush invoked the Taft-Hartley Act and ended the standoff. However, the last time East Coast and Gulf Coast workers went on strike, in 1977, the work stoppage lasted seven weeks.
Tuesday’s potential work stoppage follows high-profile strikes undertaken last year by auto workers as well as Hollywood writers and actors. Most recently, 33,000 Boeing workers walked off the job in early September, demanding better pay and retirement benefits.
“Trade unions all over the country have been going out on strike,” Sriram Narayanan, a professor of supply chain management at Michigan State University, told ABC News. “We’re seeing that happen now at the ports.”
ABC News’ Elizabeth Schulze contributed this report.
(NEW YORK) — Sam Bankman-Fried, the founder of bankrupt crypto exchange FTX, was convicted because of a “false narrative” told by federal prosecutors at a trial “tainted” by errors, his attorneys argued in a new court filing Friday to a federal appeals court.
“Fair trial principles were swept away in a ‘Sentence first-verdict afterwards’ tsunami, as everyone rushed to judgment following FTX’s collapse,” defense attorneys wrote in the appeal. “Sam Bankman-Fried was never presumed innocent. He was presumed guilty—before he was even charged.”
Bankman-Fried was found guilty of fraud, conspiracy and money laundering last November after federal prosecutors in New York accused him of orchestrating a scheme that collapsed the crypto-exchange he founded, FTX, and stole $8 billion in customer funds.
He is serving a 25-year prison sentence, which his attorneys called “draconian.”
In Friday’s appeal, defense attorney Alexandra Shapiro attacked the trial judge, Lewis Kaplan, and the U.S. Attorney’s Office for the Southern District of New York, accusing them of lacking objectivity or even-handedness.
“He was presumed guilty by the media. He was presumed guilty by the FTX debtor estate and its lawyers. He was presumed guilty by federal prosecutors eager for quick headlines. And he was presumed guilty by the judge who presided over his trial,” the appeal said.
The U.S. Attorney’s Office declined to comment, but will submit a written reply brief.
The defense asked for a reversal of Bankman-Fried’s conviction and a new trial before a different judge.
Former Alameda Research CEO Caroline Ellison, Bankman-Fried’s ex-girlfriend and a blockbuster witness for the prosecution, is set to be sentenced for her role in the fraud later this month.
Downed trees on a home in the aftermath of Hurricane Helene, Sept.r 29, 2024, in Rutherfordton, N.C. (Sean Rayford/Getty Images)
(NEW YORK) — Hurricane Helene flooded properties and devastated buildings in recent days as it tore across a vast stretch from Florida to Tennessee.
Over the coming days and weeks, households will start to rebuild — and the costs will be enormous. Some homeowners will struggle to afford it.
The devastation arrives after years of skyrocketing prices for home and flood insurance that have left some households without coverage and others choosing low-cost plans with weaker policies, experts told ABC News. The increase owes in part to a surge in costs for building materials as well as the risk of more frequent or intense storms posed by climate change, they said.
Homeowners at properties damaged by Helene are likely to see their insurance costs rise even further, imposing financial strain for years to come, the experts added.
“There’s no question that the burden on households’ budgets has increased in recent years,” Benjamin Keys, a professor of real estate at the University of Pennsylvania’s Wharton School, told ABC News. “It has gotten substantially more expensive to live in harm’s way.”
Helene, which made landfall in Florida’s Big Bend region Thursday night as a Category 4 hurricane, was the strongest hurricane to make landfall in the Big Bend on record.
More than 100 people have been killed by Helene.
Helene dumped more than 30 inches of rain on North Carolina, producing the biggest local flooding in recorded history. The path of the storm’s devastation has spanned more than 600 miles.
Homeowners are set to draw on insurance policies that have become much more expensive in recent years.
In 2023, the nationwide average premium for owner-occupied homeowners insurance climbed about 11%, rising three times more than the overall inflation rate, S&P Global found in January.
Beginning a few years earlier, insurance prices soared even higher for homeowners in the region impacted by Helene. In Florida, the average home insurance price jumped a staggering 43% from January 2018 to December 2023, S&P Global said. Over that same period, the average insurance price for homeowners increased about 36% in North Carolina.
Rising prices leave customers less likely to purchase strong plans with ample benefits in the event of a disaster, Shan Ge, a professor at New York University who studies insurance and climate change, told ABC News.
“With the costs going up, people are getting less insurance and that’s going to be a problem when a disaster like this hits,” Ge said. “The recovery will be slower and the financial effects will be bigger.”
Homeowners insurance sometimes includes separate hurricane insurance, which typically involves an additional deductible paid by the consumer for damage incurred by a hurricane.
Neither homeowners insurance nor hurricane insurance covers flood damage, however. Instead, consumers must purchase flood insurance, but a far lower share of homeowners enrolls in flood coverage than home insurance.
The damage caused by Helene could expose the difficulties caused by that relatively low enrollment rate in flood insurance, Jeff Waters, an analyst at Moody’s Analytics subsidiary RMS, told ABC News.
“With an event like Helene where we are seeing all of the water, there’s likely to be more uninsured losses happening due to water because you don’t have as much take up there as you would on the hurricane policy side of things,” Waters said.
The price of flood insurance has also increased in recent years, and it’s expected to rise at a faster rate for some households going forward as the National Flood Insurance Program puts in place what it has called “Risk Rating 2.0.”
The new approach will set the price of flood insurance based on a calculation of each home’s risk of flooding, altering a previous policy that examined whether a home belonged to a general at-risk area.
Some homes damaged by Helene will face a price crunch as they weather an increase in flood insurance costs, alongside the anticipated increase in homeowners insurance that typically follows a hurricane, some experts said.
“It’s pretty clear in the aftermath of these disasters that homeowners insurance premiums rise a lot,” Ishita Sen, a professor of finance at Harvard Business School who studies home insurance rates, told ABC News.
The prospect of higher insurance costs could prompt difficult choices for homeowners and their communities, said Keys.
“This higher cost of living in disaster-prone areas is hitting households’ pocket books in ways that we haven’t seen,” Keys said. “Eventually it’ll induce substantial chances in these communities, whether that’s deciding where to live or how to build.”
