The daily business briefing: August 31, 2017
Gasoline prices keep rising as Harvey forces major pipeline to close, Trump urges Congress to back his tax overhaul plan, and more
Gasoline prices keep climbing as Harvey disruption spreads
Gasoline futures continued to rise overnight, jumping by 7 percent after rising nearly 6 percent on Wednesday as a major pipeline from Houston to the East Coast and another refinery shut down due to flooding from Harvey. The surge set another two-year high, and pushed down crude oil prices. On Tuesday refineries capable of pumping out 4.4 million barrels per day — nearly 24 percent of U.S. production — were closed, and Valero shut its Port Arthur facility due to flooding on Wednesday as the storm pushed through eastern Texas and western Louisiana after making its second U.S. landfall. The closings raised the risk of fuel shortages even as the first refineries began reopening, because it can take a week or more to restart plants. Pump prices have risen 7 cents a gallon in the last week.
Trump says his business and middle-class tax cuts will lift economy
President Trump on Wednesday urged Congress to support his tax overhaul plan, offering few details but saying, "What could possibly be more bipartisan than allowing families to keep more of what they earn?" Trump, speaking at a Springfield, Missouri, rally, said his plan would boost the middle class by slashing business taxes and bringing back "trillions" in wealth "parked overseas." Trump reiterated he would "ideally" like to lower the business tax from 35 percent to 15 percent. In a statement after Trump's speech, Treasury Secretary Steven Mnuchin did not elaborate on the specifics of the plan and its effects on the nation's debt, but insisted it would create jobs, grow wages, offer tax relief, and make American businesses "more competitive."
Economy grows at 3 percent rate in second quarter, best in 2 years
The U.S. economy grew at a 3 percent pace in the second quarter of the year, the strongest growth in more than two years, the Commerce Department said Wednesday. President Trump seized on the report as evidence he was delivering on a promise to unleash faster growth. "We just announced that we hit 3 percent in GDP. It just came out," Trump said Wednesday at a Missouri rally. "I think we can go much higher." The economic improvement came as American consumers spent more and businesses invested in equipment and research. The growth came without Trump's promised tax cuts. The pace was all the more "impressive given the lack of policy reforms out of Washington, D.C.," said Joseph Brusuelas, chief economist at RSM, a tax and consulting firm.
Uber's new CEO says company culture 'has to change'
Uber's incoming CEO, former Expedia chief Dara Khosrowshahi, took over the troubled ride-sharing company on Wednesday. "Uber's next chapter begins today," co-founder Travis Kalanick, who was ousted over the summer following months of turmoil, told employees as he introduced Khosrowshahi. "This company has to change," Khosrowshahi reportedly said. "What got us here is not what's going to get us to the next level." He promised to change the company's culture after allegations of sexual harassment and other problems, and said he wanted to bring in a new board chairman to be his "partner at the board level." Khosrowshahi also said Uber could have its initial public offering of stock as soon as 18 months from now.
Markets get a lift from strong economic growth rate
U.S. stock futures pointed to modest gains early Thursday following strong data on second-quarter economic growth and private-sector jobs. S&P 500 futures rose by 0.3 percent, putting the big-stock index on the path toward a fourth day of gains, although it is headed to its first monthly drop since March. Dow Jones Industrial Average and Nasdaq-100 futures also were up by 0.3 percent before the open. Better-than-expected figures on Chinese manufacturing also lifted investor spirits after an August slump. The markets could be affected by inflation figures due out Thursday, and the August jobs report on Friday.