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US economy sends mixed signals: Here’s what it all means
WASHINGTON (AP) — The U.S. economy is caught in a tough, painful spot. A confusing one, too. Growth appears weak, home sales are falling and economists warn of a possible recession ahead. But consumers continue to spend, businesses continue to post profits, and the economy continues to add hundreds of thousands of jobs each month. Amidst all this, prices have accelerated to four-decade highs and the Federal Reserve is desperately trying to douse the flames of inflation with higher interest rates. This is making borrowing more expensive for households and businesses. The Fed hopes to pull central banking’s triple axiom: Slow the economy enough to curb inflation without triggering a recession.
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Biden fights recession talks as key economic report approaches
WASHINGTON (AP) – President Joe Biden wants to convince a skeptical public that the U.S. is not, in fact, headed for a recession. He is sending that message ahead of the release of a key report on the overall health of the economy. The Commerce Department will release new gross domestic product figures on Thursday. Leading forecasts predict the figure will be negative for the second quarter in a row – an unofficial signal that the country is stuck in a recession. The Biden administration is upfront telling voters not to judge the economy by GDP or inflation alone. Republicans see political friendship in the water. They suggest that the GDP report will show a collapsing economy.
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Bill to boost semiconductor industry passes key Senate test
WASHINGTON (AP) — The Senate has advanced a $280 billion bill designed to boost the U.S. semiconductor industry and accelerate high-tech research that supporters say will be critical to the economy in the coming decades. The Senate needed 60 votes to advance the bill and the vote was 64-32. The legislation is now on track for final passage in the Senate later this week. The chamber is also expected to receive the package this week. The White House has led support for the bill, along with industry leaders who say the government subsidies are needed to compete with other nations that are spending billions of dollars to lure semiconductor makers.
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Google’s parent company reports slowest quarterly growth in 2 years
SAN FRANCISCO (AP) – Google’s revenue growth last quarter slowed to its slowest pace in two years as advertisers curbed their spending amid fears of an economic recession. The regression reported Tuesday by Google’s parent company, Alphabet, is the latest sign that the tailwinds pushing big tech companies during the pandemic have shifted in a challenging new direction. In Alphabet’s case, revenue during the April-June period reached $69.7 billion, an increase of 13% from the same period last year. That was the slowest growth rate since Alphabet posted a drop in revenue in the April-June 2020 period.
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Microsoft blames economic woes on missing profit targets
REDMOND, Wash. (AP) — Microsoft on Tuesday reported fiscal fourth-quarter profit of $16.7 billion, or $2.23 a share, falling short of analysts’ expectations of $2.29 a share — a rare disappointment from the tech giant that has consistently beat Wall Street expectations. in the last years. It posted revenue of $51.9 billion in the April-June period, up 12% from last year. Analysts had been looking for revenue of $52.94 billion, according to FactSet. The company blamed a number of “evolving macroeconomic conditions and other unforeseen items” for impacting its financial performance, including pandemic-related production shutdowns in China, a deteriorating PC market, reduced advertising spending and the war in Ukraine that brought Microsoft to scale. reduces its operations in Russia.
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Hampered by chips, other shortages, GM profit falls 40% in second quarter
DETROIT (AP) – General Motors’ second-quarter net income fell 40% from a year earlier as shortages of computer chips and parts hampered factory output and caused the company’s U.S. sales to drop more than 15%. The Detroit automaker said it earned $1.67 billion from April to June, in part because it couldn’t deliver 95,000 vehicles during the quarter because they were built without one part or another. Last year it reached 2.79 billion dollars. The company said it made an adjustment of $1.14 per share, falling short of Wall Street estimates of $1.27. Revenue was $35.76 billion for the quarter, beating estimates of $33.9 billion, according to FactSet. Like other automakers, GM has been forced to slow its factories since the end of 2020, largely due to a global shortage of semiconductors.
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Gloomy news from Walmart sends US markets lower
NEW YORK (AP) — Stocks are closing lower on Wall Street Tuesday after Walmart warned that inflation is hurting the spending power of American consumers. The S&P 500 index lost 1.2%, the Dow Jones Industrial Average fell 0.8% and the Nasdaq Composite fell 1.9%. Shares of Walmart fell after the retail giant cut its profit outlook for the second quarter and full year, saying rising food and gas prices are forcing shoppers to cut back on more profitable discretionary items, particularly clothing. Technology and communications stocks were also among the top weights in the market.
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Consumer confidence fell for the third month in a row in July
WASHINGTON (AP) – U.S. consumer confidence fell again in July as worries about higher food and gas prices continue to weigh on Americans. The Conference Board said Tuesday that its consumer confidence index fell to 95.7 in July from 98.4 in June, largely due to consumer anxiety over four-decade high inflation. The business research group’s current situation index – which measures consumers’ assessment of current business and labor market conditions – fell from 147.2 to 141.3. US inflation rose to a new four-decade high in June, squeezing household budgets and pressuring the Federal Reserve to aggressively raise interest rates — trends that raise the risk of a recession.
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The S&P 500 fell 45.79 points, or 1.2%, to 3,921.05. The Dow Jones Industrial Average fell 228.50 points, or 0.7%, to 31,761.54. The Nasdaq lost 220.09 points, or 1.9%, to 11,562.57. The Russell 2000 index of smaller companies fell 12.53 points, or 0.7%, to 1,805.25.
