The daily business briefing: November 1, 2018

1. Trump, Brady say no middle-class tax cut this year

President Trump and Rep. Kevin Brady (R-Texas), the top Republican tax-writer in Congress, acknowledged that there was no way to deliver on Trump's pledge to pass a tax cut for middle-class Americans this year. Trump made the promise at a Nevada rally less than two weeks ago. Critics said Trump was making an empty promise to win Republican votes in next week's midterm elections. "There was never a plan," said Howard Gleckman, a senior fellow at the Tax Policy Center. Trump and Brady, chairman of the House Ways and Means Committee, said they remained "committed to delivering an additional 10 percent tax cut to middle-class workers across the country," but that it would have to be passed by the new Congress next year.

CNN

2. GM aims to cut costs with buyout to longtime salaried employees

General Motors on Wednesday said it was offering buyouts to longtime salaried employees in a stepped-up effort to cut costs. The automaker had previously promised investors $6.5 billion in cost reductions this year, and the buyouts would come on top of that, a company spokesman said. "Our structural costs are not aligned with the market realities," CEO Mary Barra told salaried employees with 12 or more years of service in an email. The news came after GM reported third-quarter profit that far exceeded Wall Street expectations. GM shares surged more than 8 percent to their highest in nearly six weeks.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

Reuters

3. U.S. workers get biggest wage increase in years

Wages for U.S. workers rose by 2.9 percent from September 2017 to September 2018, their biggest increase (not adjusted for inflation) since 2008, the Labor Department reported Wednesday. The gains came as the unemployment rate dropped to a 49-year low and companies faced increasingly tough competition for recruiting and keeping qualified employees. The jump in wages came as prices rose, especially for gas and rent. Adjusting for inflation, wages rose by 0.6 percent, still the largest increase since 2016. Slow pay growth has been a key problem through the recovery from the Great Recession. "Wages are grinding higher as the labor market continues to tighten," said Justin Weidner, an economist at Deutsche Bank.

The Washington Post

4. U.S. stock futures point to higher open after 2 days of gains

U.S. stocks climbed for a second straight day on Wednesday, ending a month of big losses on a positive note with a boost from strong earnings from such companies as Facebook and General Motors. Global markets also mostly gained on Wednesday and Thursday thanks to the better-than-expected corporate reports and strong U.S. hiring data. Still, the S&P 500 finished October down 6.9 percent, dragged through its worst month since September 2011 by concerns about rising interest rates and trade tensions. Futures for the Dow rose by 0.4 percent early Thursday, and those of the S&P 500 edged up by 0.3 percent. DowDuPont shares jumped by 4 percent in pre-market trading after the company reported better-than-expected earnings and a $3 billion stock repurchase program.

The Associated Press MarketWatch

5. Report: May reaches Brexit financial services deal with EU

British Prime Minister Theresa May has reached a deal with the European Union to give U.K. financial services companies continued access to European markets after Britain's looming exit from the trading bloc, The Times reported on Thursday. Government sources said the two sides had reached a "tentative agreement" on the matter, the British newspaper reported. Dominic Raab, the Brexit secretary, said in a letter to a Parliament Brexit committee that the government expected a broader Brexit deal within three weeks. The issue of how to avoid a hard border between Ireland, part of the EU, and the U.K.'s Northern Ireland remained a "concern," but "the end is firmly in sight," Raab wrote. Other government insiders said it was "very premature" to say a deal on the trading relationship was close.

The Times The Guardian