The daily business briefing: January 13, 2023
Inflation falls for the sixth consecutive month, New York City nurses end a three-day strike after union and hospitals reach a contract deal, and more
Inflation falls for 6th straight month
The Consumer Price Index, a key inflation gauge, fell for a sixth straight month to an annual rate of 6.5 percent in December, the U.S. Labor Department reported Thursday. The December rate was down from 7.1 percent in November, and a peak of 9.1 percent in June. The core CPI, which excludes volatile food and energy prices, rose by 5.7 percent last month from a year earlier. The December figures were in line with expectations. Declining gas prices and airfares helped nudge down inflation, boosting hopes that the Federal Reserve is on track to continue slowing its aggressive campaign of interest-rate hikes intended to cool the economy and bring down inflation, which remains far above the Fed's 2 percent target.
NYC nurses end strike after union reaches contract deal
Thousands of New York City nurses ended a three-day strike on Thursday after their union reached a tentative contract deal with Mount Sinai Hospital in Manhattan and Montefiore Medical Center in the Bronx. The nurses walked out Monday to demand better staffing and working hours. The deal grants a raise of 19.1 percent over three years and creates 170 new nursing positions to address a staffing shortage that was exacerbated by the pandemic, The New York Times reported. Nancy Hagans, president of the New York State Nurses Association, said the nurses "went on strike for patient care." Montefiore said "this strike impacted everyone — not just our nurses," and it wanted to resolve it quickly.
Tesla cuts prices again in a bid to increase demand
Tesla is slashing prices for its electric vehicles in the United States and Europe in a push to boost demand. The company dropped the price of its cheapest Model Y by 20 percent. It trimmed up to $21,000 from the cost of its most expensive vehicles in the U.S., and made similar big cuts in major European markets, including Germany, France, and the United Kingdom. Tesla last week reduced prices in China for the second time in three months. The drastic moves came after Tesla fell short of its target for annual deliveries "despite year-end discounts and incentives that Chief Executive Officer Elon Musk swore off in the past," Bloomberg notes. The cuts could result in lower profit margins.
Stocks flat ahead of bank earnings
U.S. stock futures were little changed early Friday ahead of earnings reports from big banks. The Dow Jones Industrial Average and the tech-heavy Nasdaq gained 0.6 percent on Thursday, and the S&P 500 rose 0.3 percent after the Labor Department reported that a key inflation gauge fell for the sixth straight month in December, to an annual rate of 6.5 percent, which is still high but far below the 9.1 percent June peak. With Federal Reserve interest rate hikes to bring down inflation fueling fears that the economy could fall into a recession, "earnings reports from the banks, coupled with their guidance, should help clarify how businesses and consumers are managing," said Quincy Krosby, LPL Financial's chief global strategist.
SEC charges Genesis and Gemini with selling unregistered securities
The Securities and Exchange Commission on Thursday charged cryptocurrency lender Genesis Global Capital and cryptocurrency exchange Gemini Trust, which is run by Tyler and Cameron Winklevoss, with selling unregistered securities. The allegations are related to the Gemini Earn program, which Gemini and Genesis used to raise billions of dollars' worth of crypto assets from hundreds of thousands of investors, without registering the program. The companies pushed Earn as a way for customers to get annual returns as high as 7.4 percent on their crypto holdings, with a promise they could cash out any time. In November, Gemini's lending partner Genesis "paused withdrawals" amid the collapse of crypto exchange FTX, leaving 340,000 customers unable to access $900 million in assets.