Stocks mixed; AMC plunges
NEW YORK (AP) — Stock indexes are mixed in afternoon trading on Wall Street as investors weigh the latest economic reports showing that unemployment is falling, but labor costs are rising. Labor costs rose at a 1.7% rate in the first quarter, up from the Labor Department’s initial estimate that costs had fallen 0.3% in the first quarter. Technology companies, whose pricey stock values make them more sensitive to inflation fears, are the biggest weight on the market. AMC Entertainment plunged after the movie theater operator said it would sell more shares following a huge run-up in its stock price on surge of interest from individual investors. The stock is still up about 2,000% this year.
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US jobless claims drop to 385,000, another pandemic low
WASHINGTON (AP) — The number of Americans seeking unemployment benefits has fallen for a fifth straight week to a new pandemic low, the latest evidence that the U.S. job market is regaining its health as the economy further reopens. The Labor Department says jobless claims dropped to 385,000 last week, down 20,000 from the week before. The decline in applications reflects a swift rebound in economic growth and the job market’s steady recovery from the coronavirus recession. More Americans are venturing out to shop, travel, dine out and congregate at entertainment venues. All that renewed spending has led companies to seek new workers.
US service sector growth surges in May
SILVER SPRING, Md. (AP) — Growth in the services sector, where most Americans work, hit an all-time high in May as people flock to bars, restaurants and other venues across the country that now have fewer or no capacity restrictions. The Institute for Supply Management says its monthly survey of service industries jumped to a reading of 64, topping the previous high of 63.7 in March. Any reading above 50 indicates the sector is expanding. May marks the 12th straight month of expansion in the services sector following a two-month contraction in April and May of last year at the height of coronavirus pandemic closures.
US productivity growth unrevised at 5.4% rate in Q1
WASHINGTON (AP) — U.S. productivity growth was unrevised at a 5.4% rate in the first three months of the year while labor costs rose at an even faster rate. The Labor Department says first quarter gain in productivity was unchanged from the initial estimate a month ago. The 5.4% gain at a seasonally adjusted annual rate followed a steep plunge at a 3.8% rate in the fourth quarter. Labor costs rose at a 1.7% rate in the first quarter, up from the initial estimate that labor costs had fallen 0.3% in the first quarter. Productivity, the amount of output per hour of work, turned in weak gains over the record-long economic expansion that ended with the pandemic-triggered recession last year.
Little change in mortgage rates
WASHINGTON (AP) — Mortgage rates are flat to higher this week. The benchmark 30-year home loan remained below the 3% mark amid continued positive indications of the economy’s recovery from the pandemic recession. Mortgage buyer Freddie Mac reported Thursday that the average for the 30-year rate rose to 2.99% from 2.95% last week. At this time last year, the average long-term rate stood at 3.18%. The rate for a 15-year loan, popular among those seeking to refinance, was unchanged from last week at 2.27%.
GENERAL MOTORS-CHIP SHORTAGE
GM raises forecast, says chip shortage not as bad as feared
DETROIT (AP) — General Motors says efforts to manage the global computer chip shortage have worked better than expected, so its financial results will improve over previous forecasts. The company says it has made engineering changes, prioritized semiconductor use and pulled some potential deliveries into the second quarter, so first-half earnings will be significantly better than earlier forecasts. The company also says it’s optimistic about the full year but gave no further details. In May, GM had predicted a pretax profit of around $5.5 billion for the first half of 2021. In the first quarter the company turned a $2.98 billion net profit as strong U.S. consumer demand and higher prices offset production cuts brought on by the chip shortage.
Biden announces international COVID-19 vaccine sharing plan
WASHINGTON (AP) — The White House says the U.S. will share more COVID-19 vaccines with the world, including directing 75% of excess doses through the UN-backed COVAX global program. The White House has previously stated its intent to share 80 million vaccine doses with the world by the end of June. The administration says 25% of doses will be kept in reserve for emergencies and for the U.S. to share directly with allies and partners. The long awaited vaccine-sharing plan comes as demand for shots in the U.S. has dropped significantly. More than 63% of U.S. adults have received at least one dose, and global inequities in supply have become more glaring.
Alarm in Africa: Virus surges, vaccines grind to ‘near halt’
CAPE TOWN, South Africa (AP) — The World Health Organization says COVID-19 vaccine shipments have ground to “a near halt” in Africa while virus cases have spiked 20% over the last two weeks. South Africa alone saw a more than 60% rise in new cases last week as the country with the highest coronavirus caseload in Africa continued to face delays in its effort to roll out the single-dose Johnson & Johnson vaccine. More than 1 million J&J doses that should have already been put to use remain on hold at a pharmaceuticals plant in South Africa because of contamination concerns at a U.S. factory. The head of the Africa CDC said he expects an announcement from the U.S. Food and Drug Administration on those contamination issues soon and maybe even on Friday.
California considers new workplace mask rules
SACRAMENTO, Calif. (AP) — California is set to fully reopen in less than two weeks and do away with nearly all mask and social distancing requirements for vaccinated people. But those who regulate workplaces in the state aren’t ready to go that far. The California Occupational Safety and Health Standards Board will consider new workplace rules that would only allow workers to go maskless if everyone in a room is fully vaccinated against the coronavirus. The rules could remain in place into early next year even though coronavirus cases have fallen as more people are vaccinated. Recent CDC guidance says that fully vaccinated people can skip face coverings and distancing in nearly all situations, and the state is set to follow that recommendation starting June 15.
Biden offers tax deal to Republicans in infrastructure talks
UNDATED (AP) — President Joe Biden is trying to break a logjam with Republicans on how to pay for infrastructure. He’s proposing a 15% minimum tax on corporations and the possibility of revenues from increased IRS enforcement. A person familiar with the talks says the offer was made to Republican Sen. Shelley Moore Capito of West Virginia only as part of the bipartisan negotiations and did not reflect a change in Biden’s overall vision. Biden has proposed increasing the corporate tax rate to 28% from 21% to help fund his plans for roads, bridges, electric vehicles and broadband. But the rate hike is a non-starter with Republicans.
INTERSTATE 40 BRIDGE CLOSED
Buttigieg to visit closed Interstate 40 bridge in Tennessee
MEMPHIS, Tenn. (AP) — U.S. Department of Transportation Secretary Pete Buttigieg is traveling to Tennessee to learn how the closure of the Interstate 40 bridge connecting that state and Arkansas has affected freight movement since it was shut down more than three weeks ago when a crack was found in the span. Buttigieg was set to meet with officials at a FedEx Corp. facility in Memphis before a planned tour of the Hernando De Soto bridge Thursday. Shipping giant FedEx operates its fleet of airplanes and trucks out of its headquarters in Memphis, which has seen road traffic problems since the I-40 bridge spanning the Mississippi River was closed May 11.
United Airlines sees a supersonic future
UNDATED (AP) — United Airlines hopes to bring back supersonic travel before the end of this decade. United said Thursday that it reached a deal with startup aircraft maker Boom Supersonic to buy 15 of Boom’s Overture jets. The planes haven’t been built yet, but Boom says they will fly at 1.7 times the speed of sound, or around 1,300 mph. That would be fast enough to zip passengers from London to New York in three and a half hours. It’s been nearly 20 years since the last Concorde supersonic plane was retired.
Major Russian fund to ditch dollar, buy euros, yuan, gold
MOSCOW (AP) — Russia says it will completely remove the dollar from its rainy day fund, a move intended to counter U.S. pressure two weeks before a summit of the two countries’ leaders. Finance Minister Anton Siluanov said Thursday that the National Wealth Fund will turn dollar-denominated assets into euros, yuan and gold. He said the shift will take a month, and once it’s completed the fund will have 40% of its holdings in euros, 30% in yuan and 20% in gold, with the rest in British pounds and Japanese yen. Russia has gradually moved to reduce the dollar’s share in its hard currency reserves as it has faced waves of U.S. sanctions.
China criticizes Western brands’ toys, clothes as unsafe
BEIJING (AP) — The Chinese government has accused H&M, Nike, Zara and other brands of importing unsafe or poor quality children’s clothes and other goods, adding to headaches for foreign companies after Beijing attacked them over complaints about possible forced labor in the country’s northwest. A list of “quality and safety unqualified” products from 16 companies including T-shirts, toys and toothbrushes was released by the customs agency to mark International Children’s Day this week. The announcement is a setback for foreign brands that were attacked by state media in March following accusations by governments and human rights groups that Beijing uses forced labor in Xinjiang in China’s northwest.
SUPREME COURT-HACKING LAW
Supreme Court limits prosecutors’ use of anti-hacking law
WASHINGTON (AP) — The Supreme Court is limiting prosecutors’ ability to use an anti-hacking law to charge people with computer crimes. Conservative and liberal justices joined to rule 6-3 on Thursday that prosecutors overreached when they used the federal Computer Fraud and Abuse Act to charge a Georgia police sergeant who used a database he had access to for work for a non-work purpose. Lawyers for the police sergeant had warned that if the court ruled against him it could make a federal crime out of using a computer for virtually any unauthorized purpose, from “checking sports scores at work to inflating one’s height on a dating website.”
EU plans digital ID wallet for bloc’s post-pandemic life
LONDON (AP) — The European Union has unveiled plans for a digital ID wallet that residents could use to access services across the 27-nation bloc. The European Digital Identity Wallet proposed by the EU’s executive commission is a smartphone app that would let users store electronic forms of identification and documents like prescriptions and school diplomas. Officials envision the wallet allowing a customer renting a car to complete the necessary ID checks and documents digitally and thereby skip the usual wait at an agency counter. Other potential uses for individuals include opening bank accounts, signing apartment leases and enrolling in universities outside their home countries. Accelerating the shift online is part of the EU’s post-pandemic recovery strategy.
Walmart aims to empower workers with own devices, new app
New York (AP) — Walmart is unveiling an app for its store workers’ phones that allows them to do a variety of tasks from digitally clocking into work to helping locate merchandise and answering customers’ questions. It also has a push-to-talk feature to directly communicate with colleagues. As part of the launch, the nation’s largest private employer says it plans to offer more than 740,000 store workers a new Samsung smartphone for free by year-end. That’s nearly 50% of its U.S. workforce, according to Drew Holler, senior vice president of people operations. The moves come as Walmart and others are trying to free up store workers from menial tasks to better serve customers.
FDA warns doctors to stop using heart pump tied to deaths
WASHINGTON (AP) — U.S. health regulators are warning surgeons to stop implanting a heart pump recently tied to cases of stroke and more than a dozen deaths. Medical device manufacturer Medtronic said Thursday it would stop selling its Heartware device, due to a power failure problem that could cause it to suddenly stop working. About 4,000 people currently have the device. Physicians will decide whether to remove a device, based on their patients health and the potential risks of surgery. The Medtronic device was for people with heart failure, many who are awaiting a transplant.
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