The daily business briefing: October 13, 2022

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1. Fed minutes show commitment to extended rate hikes
2. Gannett announces newsroom cost-cutting
3. TikTok parent ByteDance in talks to expand music-streaming service
4. Social Security recipients expected to get big cost-of-living adjustment
5. Stock futures edge higher ahead of inflation report

published 13 October 2022

1. Fed minutes show commitment to extended rate hikes

Federal Reserve officials indicated at their September meeting that inflation had exceeded their expectations and they anticipated keeping interest rates high for an extended period to bring price increases down, according to minutes of the meeting released Wednesday. Members of the central bank's Federal Open Market Committee decided they "needed to move to, and then maintain, a more restrictive policy stance in order to meet the committee's legislative mandate to promote maximum employment and price stability," the meeting summary said. The Fed decided at the meeting to raise its benchmark short-term interest rate by 0.75 percentage points, the third straight time it made such an unusually big rate hike. Officials noted that inflation was "showing little sign so far of abating."

Gannett, the largest U.S. newspaper publisher, announced broad newsroom cost cuts on Wednesday. CEO Mike Reed said in a memo to staff, obtained by The New York Times, that the company will require employees to take unpaid leave in December. Reed said Gannett will also suspend 401(k) contribution matches and freeze most hiring, blaming a "deteriorating macroeconomic environment" for the measures. "In order to sustain the mission of our company to empower communities to thrive, sustain local journalism, and support small businesses with digital solutions, we need to ensure our balance sheet remains strong," Reed said in the memo. Gannett, which publishes USA Today and about 220 other dailies, cut 400 jobs two months ago and held off on hiring in 400 more in response to declining revenue.

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TikTok parent company ByteDance is in discussions with music labels as part of its effort to expand its music-streaming service to compete with Spotify and other leading competitors, The Wall Street Journal reported Wednesday, citing people familiar with the discussions. ByteDance reportedly hopes to integrate the service into its TikTok video-sharing app to create a leading global music-distribution platform. There are still significant obstacles for a deal, the Journal said, including disagreements about valuing the promotional benefits the music labels would get from TikTok. ByteDance has recently discussed expanding its Resso streaming service, now available in India, Indonesia, and Brazil, to reach more than a dozen new markets, some of the Journal's sources said.

The Social Security Administration is expected to announce its annual cost-of-living adjustment, or COLA, on Thursday, and it could be the biggest one in decades. The agency bases COLAs on third-quarter inflation. With inflation at its highest levels in decades this year, seniors could get a COLA of 8.7 percent, according to the Seniors Citizens League advocacy group. That would protect the purchasing power of the 66 million people who receive benefit checks, raising monthly payments by $144.10 on average, from $1,658 to roughly $1,802 per month. "That is going to the highest COLA since 1981," said Mary Johnson, Social Security and Medicare policy analyst at the Senior Citizens League. "People will be seeing, theoretically, a nice bump in their Social Security benefits this time."

U.S. stock futures rose early Thursday ahead of the release of the September consumer price index, expected to show still-high 8.1 percent annual inflation. Futures tied to the Dow Jones Industrial Average and the S&P 500 were up 0.4 percent at 6:30 a.m. ET. Nasdaq futures were up 0.2 percent. The three main U.S. indexes fell slightly on Wednesday after fluctuating throughout the day as investors digested newly released minutes from the Federal Reserve's September meeting, which ended with a third straight unusually large 0.75 percentage point interest rate hike to fight high inflation. The Dow and the tech-heavy Nasdaq fell 0.1 percent. The S&P 500 dropped 0.3 percent.

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Harold Maass is a contributing editor at The Week. He has been writing for The Week since the 2001 debut of the U.S. print edition and served as editor of TheWeek.com when it launched in 2008. Harold started his career as a newspaper reporter in South Florida and Haiti. He has previously worked for a variety of news outlets, including The Miami Herald, ABC News and Fox News, and for several years wrote a daily roundup of financial news for The Week and Yahoo Finance.