The daily business briefing: December 2, 2016
U.S. unemployment rate falls to 9-year low, Starbucks CEO to step down, and more
U.S. economy added a solid 178,000 jobs in November
The Labor Department reported Friday that the U.S. economy added a healthy 178,000 jobs in November, roughly in line with forecasts. Economists surveyed by Reuters had predicted 175,000 new nonfarm jobs; those surveyed by Bloomberg had forecast 180,000. The gains, an improvement over October, nudged the unemployment rate down to 4.6 percent, a nine-year low, as some Americans left the workforce. Consumer spending, inflation, the housing market, and manufacturing have improved recently, too. Together, the brightening data were seen as cementing the likelihood that the Federal Reserve would be able to resume its plan to push interest rates higher. "The economy is in good shape," said Jack McIntyre, portfolio manager at Brandywine Global in Philadelphia. "The Fed has the green light to raise interest rates this month, and most likely they are going to raise a couple of times next year."
Starbucks CEO Howard Schultz to step down in 2017
Starbucks CEO Howard Schultz said Thursday that he would step down next year. Schultz built the company into the world's biggest coffeehouse chain, with 25,000 outlets in 75 countries. The chain also sells its coffee through other retailers. On his watch, Starbucks also joined debates on hot-button issues from gun violence to gay rights to race relations. Schultz will be replaced by Starbucks president and longtime board member Kevin Johnson, a close friend. "This is a big day for me," Schultz said. "I love the company as much as I love my family."
Carrier to get $7 million for keeping 1,000 jobs in U.S.
President-elect Donald Trump visited a Carrier air-conditioner factory in Indiana on Thursday for the announcement of a deal to keep 1,000 jobs at the plant instead of moving them to Mexico. Another 600 jobs from the plant still will move to Mexico, and the company also plans to move about 700 jobs from another Indiana plant south of the border. The agreement that Trump struck with Carrier and its parent, United Technology, includes $7 million in tax credits and grants from Indiana in exchange for a $16 million investment in the plant over two years. Critics said Trump opened the door for other companies to request perks for keeping jobs in the U.S. Trump said his effort was "very presidential," and he warned of consequences for companies that move jobs overseas.
Dow pushes farther into record territory as energy stocks surge
The Dow Jones Industrial Average on Thursday rose to another in a series of records the stock index has set since the November presidential election. The Nasdaq Composite and S&P 500 indexes, the two other main U.S. benchmarks, fell due to a sharp decline in technology stocks, although they, too, have set numerous records in recent weeks. Facebook fell by 2.8 percent and Microsoft dropped by 1.8 percent, dragging the Nasdaq to its lowest close since Nov. 14. The Dow's 0.4 percent rise to 19,192 came thanks to gains by banks, and energy shares that were lifted by OPEC's deal to cut output.
Johnson & Johnson told to pay $1 billion for faulty artificial hips
A federal jury in Dallas on Thursday ordered Johnson & Johnson to pay more than $1 billion to six patients who said they were injured by flawed Pinnacle artificial hips made by the company's DePuy unit. The plaintiffs said the company hid flaws in the hips, which had to be surgically removed. The award was the third largest jury award of 2016. Johnson & Johnson and DePuy still face nearly 9,000 lawsuits over the artificial hips.