Business briefing

The daily business briefing: January 24, 2018

The Senate confirms Jerome Powell as Fed chair, U.S. officials reassure Davos crowd ahead of Trump's arrival, and more

1

Senate confirms Jerome Powell as next Fed chair

The Senate on Tuesday confirmed Jerome Powell as the next chairman of the Federal Reserve. Senators voted 85-12 to approve Powell, who has served more than five years on the U.S. central bank's board and was nominated by President Trump to replace the current chair, Janet Yellen, when her term ends on Feb. 3. Yellen was the first woman to serve in the post, and she has received high marks for her performance. Trump, however, was critical of the Fed during his campaign, and Powell's support for easing some banking regulations puts him in sync with one of Trump's major objectives. Still, most observers expect Powell to stick to Yellen's cautious approach to raising interest rates as the economy improves.

2

Trump aides in Davos say 'America First' doesn't mean 'America alone'

Top Trump administration officials made their first comments at the World Economic Forum in Davos, Switzerland, on Wednesday, reassuring global leaders and business executives that President Trump's "America First" agenda doesn't mean the U.S. is unwilling to work with other countries. "America First is not America alone," said Gary Cohn, head of Trump's National Economic Council. While members of Trump's Cabinet fight the perception that he is against free trade and globalization, they are also touting the new Republican tax cuts as evidence that Trump is making the economy stronger. Anti-capitalist demonstrators staged protests against Trump in several Swiss cities, including Davos, where he is to deliver a keynote address on Friday.

3

Disney credits tax reform for decision to give workers bonuses, education program

Disney on Tuesday became the latest in a string of major companies to announce that it would share some of its newly passed Republican tax cuts with employees. The entertainment giant said it would pay a one-time $1,000 cash bonus to more than 125,000 employees. Disney also said it would invest $50 million in an education program that will be available to nearly 88,000 hourly employees. Disney said both initiatives were made possible by the tax reform. Boeing, AT&T, Wells Fargo, Comcast, Bank of America, and Walmart, among other companies, recently announced similar moves.

4

U.S., Mexico, and Canada head into crucial NAFTA talks

Negotiators from the U.S., Canada, and Mexico started crucial, week-long talks in Montreal on Tuesday, seeking to break an impasse on U.S. demands for changes to the North American Free Trade Agreement, or NAFTA. President Trump has called the trade pact a bad deal that has damaged the U.S. economy. His administration is threatening to pull out of NAFTA if it doesn't get the changes, despite fears that scrapping NAFTA would roil financial markets. Canada and Mexico reportedly are open to making concessions on at least one Trump demand — increasing the North American content required in automobiles for them to qualify for duty-free status. This is the sixth round of the talks, which are scheduled to wrap up in March.

5

Kimberly-Clark to cut 5,500 jobs in plan to become 'leaner, stronger'

Kimberly-Clark announced Tuesday that it plans to cut up to 5,500 jobs, roughly 13 percent of its workforce, and shed 10 manufacturing plants under its new restructuring plan. Chairman and CEO Thomas J. Falk said the changes would save as much as $550 million and "make our company leaner, stronger, and faster." The savings for Kimberly-Clark, maker of popular brands such as Kleenex, Huggies, and Kotex, will come as stores that sell its goods struggle to compete with online retailers, many of which frequently offer discounts. Proctor & Gamble also has said sales of its grooming products have been hurt by store discounts. Kimberly-Clark also reported Tuesday that its fourth-quarter operating profit was $812 million, down from $839 million in the same period of 2016.

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