The daily business briefing: February 16, 2023
Retail sales rebound after a weak holiday shopping season, Ford suspends F-150 Lightning production after battery fire, and more
Retail sales bounce back after weak holiday shopping season
Retail sales rebounded in January after a disappointing holiday shopping season, according to government data released Wednesday. Retail sales jumped 3 percent, the fastest pace in two years, after falling for two straight months. It was the biggest monthly increase since March 2021, when coronavirus-related stimulus checks gave American households more money to spend. An increase in auto sales contributed to the gains, as supply problems eased and dealers had more vehicles to meet pent-up demand. Brisk consumer demand keeps the economy strong, but it could also increase inflationary pressures. That would make it more likely the Federal Reserve will raise interest rates more than anticipated, which economists say could tip the economy into a recession.
Ford pauses electric F-150 Lightning production after vehicle fire
Ford Motor Co. on Wednesday suspended production of its electric F-150 Lightning pickups after a battery fire during a pre-delivery quality check. Ford said it expects that the shutdown at the Rouge Electric Vehicle Center in Dearborn, Michigan, will likely last at least through next week, and possibly take a "few" weeks. The company said it believes it has identified the problem. Ford said vehicles that have already been delivered to customers were not affected. The automaker has been trying to increase production of the popular pickups as part of a goal to boost annual electric-vehicle capacity output to 600,000, including 150,000 F-150 Lightnings, by the end of this year, and 2 million by the end of 2023.
China sanctions 2 U.S. defense contractors over Taiwan arms sales
China's Ministry of Commerce on Thursday announced that Beijing is imposing sanctions on U.S. military contractors Lockheed Martin and Raytheon, barring them from selling goods or investing in China for supplying weapons to Taiwan, an island democracy China claims as part of its territory. China on Wednesday also said it would sanction unspecified entities for their alleged links to the Feb. 4 downing of a suspected Chinese spy balloon off the South Carolina coast. China has said it was a civilian weather balloon and Washington overreacted to its flight through U.S. airspace. The Biden administration says the balloon had a camera and equipment capable of intercepting intelligence data. The Biden administration has sanctioned six Chinese entities linked to China's aerospace programs.
Stock futures hold steady ahead of next batch of data
U.S. stock futures were little changed early Thursday after strong retail sales numbers for January provided the latest indication of the economy's resilience despite persistent high inflation and rising interest rates. Futures tied to the Dow Jones Industrial Average and the S&P 500 were down less than 0.1 percent at 6:30 a.m. ET. Nasdaq futures were flat. The three major U.S. indexes closed higher on Wednesday. The Dow and the S&P 500 gained 0.1 percent and 0.3 percent, respectively. The tech-heavy Nasdaq rose 0.9 percent. The market has received a boost from upbeat corporate earnings reports and encouraging economic data recently. On Thursday, investors will be watching jobless claims and producer inflation data.
Tesla to open fast charges to other EVs in deal with Biden administration
Tesla has agreed to open 7,500 electric vehicle charging stations, including 3,500 fast superchargers, to other EVs by the end of 2024, the Biden administration announced Wednesday. Tesla's expansion of its network of fast chargers has helped it boost customers' confidence they will be able to keep powered up on long trips. The Biden administration is seeking to tap into this network to boost its push for more charging options as it encourages electric-vehicle use to fight climate change. Tesla's charging stations account for about half the nation's fast chargers. They can recharge a vehicle in about half an hour to an hour, and are widely seen as faster and more reliable than those that have been available to drivers of vehicles made by other companies.