The daily business briefing: October 19, 2016

1. Yahoo traffic edges up despite data breach

Yahoo reported Tuesday that its traffic had increased slightly since it disclosed a month ago that 500 million email accounts had been hacked. The news appeared to contradict an assertion by Verizon Communications last week that the data breach caused enough damage to warrant renegotiating its $4.8 billion deal to buy Yahoo's internet operations. Yahoo said its revenue fell in the quarter compared to the same period last year, but reported adjusted quarterly earnings of 20 cents per share, beating analysts' average estimate of 14 cents. The company's stock gained more than 1 percent in after-hours trading Tuesday.

The New York Times

2. U.S. inflation rises toward Fed target

Rising rents and gas prices pushed the Labor Department's Consumer Price Index up by 0.3 percent last month, its biggest gain in five months. That boosted the one-year increase in consumer prices to 1.5 percent over the year that ended in September. The increase in inflation closer to the Federal Reserve's target of 2 percent was widely seen as strengthening the case for raising interest rates. "The upward creep of prices weakens any argument against a rate increase in December," said Anthony Karydakis, chief economic strategist at Miller Tabak in New York. "The economy is close to full employment and prices are starting to respond to that reality."

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Reuters

3. China GDP growth meets expectations

China's economy grew by 6.7 percent in the third quarter, meeting expectations, according to data released Wednesday. The gains kept the world's second largest economy on track to meet the government's target for full-year growth and suggested the economy is stabilizing. The growth was highly dependent, however, on stronger government spending, record bank lending, and a sizzling real estate market. "It's amazing what a housing bubble and crazy debt increases can achieve," said Michael Every, head of financial markets research at Rabobank in Hong Kong. "This is not sustainable — but then the alternative is nothing anyone wants to think about."

Bloomberg Reuters

4. Morgan Stanley, Goldman Sachs beat expectations as trading surges

Morgan Stanley on Wednesday reported quarterly profits that beat analysts' expectations thanks to increased bond trading after the U.K. Brexit vote. Goldman Sachs shares rose by 2.1 percent on Tuesday after the investment bank reported surging trading boosted its quarterly profit higher than expected. Goldman Sachs said its revenue reached $8.17 billion, up from $6.86 billion in the same period last year. The earnings amounted to $4.88 per share, which easily beat analysts' average expectations of $3.82 a share. Bottom-line profit jumped by 58 percent. UnitedHealth and Netflix also beat expectations, helping to lift U.S. stocks on Tuesday.

Reuters CNBC

5. Social Security beneficiaries to get slight cost-of-living increase

The federal government announced Tuesday that the nation's 65 million Social Security beneficiaries will receive a 0.3 percent cost-of-living adjustment in 2017. The change will amount to an increase of less than $4 a month for the average recipient, bringing the average monthly benefit check to $1,238. Many recipients will never see the increase, because it will be deducted along with any other money necessary to cover an expected increase in Medicare Part B premiums. The announcement of the low cost-of-living adjustment came as inflation has picked up, nearing the Federal Reserve's target rate of 2 percent.

The Associated Press USA Today