The daily business briefing: February 24, 2017
Trump meets with manufacturing CEOs, Sessions rescinds Obama order on phasing out private prisons, and more
Trump meets with manufacturing CEOs on increasing U.S. jobs
President Donald Trump met with 24 CEOs from the country's largest manufacturing companies on Thursday to discuss cutting taxes and regulations, and how to encourage companies to keep jobs in the U.S. instead of moving them abroad. "Everything's going to be based on bringing our jobs back, the good jobs, the real jobs," Trump said during the White House meeting. "I'm delivering on everything that we've said." Trump spoke favorably about a GOP plan to propose an export-boosting border adjustment tax. He said it would boost U.S. jobs, although large retailers such as Walmart and Target oppose it. "All the CEOs are very encouraged by the pro-business policies of President Trump," Dow Chemical CEO Andrew Liveris said after the meeting.
Attorney general rescinds Obama order on phasing out private prisons
Attorney General Jeff Sessions on Thursday rescinded the Obama administration's initiative to phase out the Federal Bureau of Prisons' use of private prisons. Sessions wrote in a Feb. 21 memo published Thursday that the Obama administration's September 2016 decision "impaired the Bureau's ability to meet the future needs of the federal correctional system." Shares in prison operators such as CoreCivic and Geo Group rose after President Trump's election as investors anticipated that his crime and immigration policies would create a need for more private prisons. Both companies' stocks gained in after-hours trading.
Treasury secretary says to expect 'very significant' tax reform by August
Treasury Secretary Steven Mnuchin said Thursday that he hoped Congress would pass "very significant" tax reform by August. In his first TV interview since assuming the post, Mnuchin told CNBC that tax cuts and deregulation would increase economic growth by three percent by the end of 2018. President Trump has promised to unveil his tax plan by early March. "We are committed to pass tax reform, it will be very significant," Mnuchin said. "It's going to be focused on middle income tax cuts, simplification, and making the business tax competitive with the rest of the world."
J.C. Penney to close 140 stores
J.C. Penney Co. said Friday that it was closing up to 140 stores over the next few months. The closed stores account for about 14 percent of J.C. Penney's store base, but less than 5 percent of its sales. The struggling department store chain made the cost-cutting announcement as it reported a 0.7 percent drop in same-store sales during the crucial holiday quarter. The company also said it would start a voluntary early retirement program for 6,000 eligible employees.
Norwegian Air challenges big carriers with $65 fares to Europe
Norwegian Air Shuttle ASA said Thursday that it would offer tickets starting at $65 one way on 10 new routes between the United States and Europe. The cheapest fares will be "extremely limited" and include no frills, Norwegian Air spokesman Anders Lindström said. "I pay for what I want, you pay for what you want. We don't pay for what everybody else on the plane wants," he said. The fares will be offered on flights to U.K. and Ireland destinations from airports in New York state, Providence, Rhode Island, and Hartford, Connecticut. The discounts are expected to increase pressure to lower fares at major U.S. and European airlines, which already are considering cheaper tickets to attract budget travelers.