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(WASHINGTON) — The release of inflation data on Wednesday will reveal the latest movement for consumer prices, which continue to strain households and top surveys of voter priorities less than five months before the November election.

The data will arrive hours before the Federal Reserve announces a decision about whether to move its benchmark interest rate.

Economists expect prices to have risen 3.4% over the year ending in May, which would leave the inflation rate unchanged from the previous month. Such a reading would extend a bout of stubborn inflation that stretches back to last year.

Price increases have slowed significantly from a peak of about 9%, but inflation still stands more than a percentage point higher than the Federal Reserve’s target rate of 2%.

For nearly a year, the Fed has held interest rates steady at their highest level since 2001, hoping that elevated borrowing costs would slow economic activity, reduce consumer demand and lower prices.

Instead, the economy has hummed and price increases have stalled.

A jobs report released on Friday blew past economist expectations, demonstrating the resilient strength of the economy. Blockbuster hiring in May exceeded the average number of jobs added each month over the previous year, the U.S. Bureau of Labor Statistics said.

Average hourly wages surged 4.1% over the year ending in May, the report found. That rate of pay increase exceeds the pace of inflation, indicating that the spending power of workers has grown even as prices jump.

The data marks a boon for workers but could give pause to policymakers, since they fear that a rise in pay could prompt businesses to raise prices in order to cover the added labor cost.

Economic output slowed markedly at the outset of 2024, though it continued to grow at a solid pace.

The Fed, in turn, has all but abandoned a previous forecast of three interest rate cuts by the end of the year.

The Federal Open Market Committee, the Fed’s decision-making body on interest rates, said last month that it does not anticipate cutting interest rates until it retains confidence that inflation is moving sustainably downward.

“So far the data has not given us that greater confidence,” Fed Chair Jerome Powell said at a press conference in Washington, D.C., last month. “It is likely that gaining such greater confidence will take longer than previously expected.”

Economists expect the Fed to hold interest rates steady for the seventh consecutive time at the close of its meeting on Wednesday.

The Fed risks a rebound of inflation if it cuts interest rates too quickly, since stronger consumer demand on top of solid economic activity could lead to an acceleration of price increases.

A prolonged period of high interest rates, however, risks placing downward pressure on economic growth and plunging the U.S. into a recession.

Price increases have drawn attention from voters as the U.S. hurtles toward what appears to be a closely contested presidential election in the fall.

Eighty-five percent of U.S. adults surveyed by ABC News/Ipsos last month said inflation is an important issue, making it the second-highest priority among adults surveyed. The top priority, the economy, also relates to individuals’ perceptions of price increases.

On each of those issues, the economy and inflation, those surveyed by ABC News/Ipsos said they trusted former President Donald Trump over President Joe Biden by a margin of 14 percentage points.

“Inflation is something that affects absolutely everybody,” Elaine Kamarck, a senior fellow in the Governance Studies program at the Brookings Institution, previously told ABC News. “People notice it, whether they’re rich or poor.”

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(WASHINGTON) — The Federal Reserve on Wednesday will announce its latest decision on interest rates, just hours after fresh inflation data is set to reveal the status of the central bank’s fight to slow price increases.

At six consecutive meetings spanning nearly a year, the Fed has opted to hold rates steady in response to elevated inflation and robust economic performance. Economists expect the Fed to continue that approach on Wednesday.

In theory, the prolonged stretch of high interest rates should weigh on economic activity, reduce consumer demand and cut prices. Instead, a resilient economy and stubborn inflation have defied the Fed’s efforts.

Inflation has fallen significantly from a peak of 9.1%, but price increases have held steady in recent months and remain more than a percentage point higher than the Fed’s target rate of 2%.

The Fed has all but abandoned a previous forecast of three interest rate cuts by the end of the year.

The Federal Open Market Committee, the Fed’s decision-making body on interest rates, said last month that it does not anticipate cutting interest rates until it retains confidence that inflation is moving sustainably downward.

“So far the data has not given us that greater confidence,” Fed Chair Jerome Powell said at a press conference in Washington, D.C., last month. “It is likely that gaining such greater confidence will take longer than previously expected.”

Some observers expect the Fed to forgo interest rate cuts for the remainder of 2024.

Roger Aliaga-Diaz, chief economist at the investment giant Vanguard, said in a statement to ABC News that the Fed would keep interest rates at current levels for at least the next six months.

The forecast, Aliaga-Diaz added, owes to “inadequate progress in the inflation fight and continued growth and labor momentum.”

In a note to clients, Deutsche Bank echoed skepticism about rate cuts anytime soon. 

“Fed officials have clearly signaled that they are in a wait-and-see mode with respect to the timing and magnitude of rate cuts,” the note said.

The Fed risks a rebound of inflation if it cuts interest rates too quickly, since stronger consumer demand on top of solid economic activity could lead to an acceleration of price increases.

A prolonged period of high interest rates, however, threatens to place downward pressure on economic growth and plunge the U.S. into a recession.

A jobs report released on Friday blew past economist expectations, demonstrating the resilient strength of the economy. Blockbuster hiring in May exceeded the average number of jobs added each month over the previous year, the U.S. Bureau of Labor Statistics said.

Average hourly wages surged 4.1% over the year ending in May, the report found. That rate of pay increase exceeds the pace of inflation, indicating that the spending power of workers has grown even as prices jump.

The data marks a boon for workers but could give pause to policymakers, since they fear that a rise in pay could prompt businesses to raise prices in order to cover the added labor cost.

Economic output slowed markedly at the outset of 2024, though it continued to grow at a solid pace.

While the Fed has resisted lowering interest rates, consumers have faced high borrowing costs for everything from mortgages to credit cards.

The average rate for a 30-year fixed mortgage stands at 6.99%, according to Freddie Mac data released last week.

When the Fed imposed its first rate hike of the current series in March 2022, the average 30-year fixed mortgage stood at just 3.85%, Freddie Mac data showed.

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(WASHINGTON) — In a sweeping change that could improve millions of Americans’ ability to own a home or buy a car, the Biden administration will propose a rule Tuesday to ban medical debt from credit reports.

The rule, which will be announced by Vice President Kamala Harris and Consumer Financial Protection Bureau Director Rohit Chopra, comes as President Joe Biden beefs up his efforts to convince Americans his administration is lowering costs, a chief concern for voters in the upcoming election.

The rule, which has been in the works since September, could go into effect sometime next year, Chopra told ABC News in an exclusive interview ahead of the policy announcement.

“Our research shows that medical bills on your credit report aren’t even predictive of whether you’ll repay another type of loan. That means people’s credit scores are being unjustly and inappropriately harmed by this practice,” Chopra said.

CFPB’s research estimates that the new rule would allow 22,000 more people to get approved for safe mortgages each year — meaning lenders could also benefit from the positive impact on peoples’ credit scores, by being able to approve more borrowers.

Some major credit report companies have already stopped using medical debt to calculate peoples’ credit worthiness, including Equifax, TransUnion and Experian. FICO and VantageScore also recently started factoring medical debt less heavily into their scores.

But 15 million Americans still have $49 billion of medical debt that is hampering their scores, the CFPB found. This rule would extend the practice to all credit reporting in the U.S.

Medical debt is extensive in the U.S. It affects two in every five Americans, according to the health policy research organization KFF, and a vast majority have debt in the thousands.

Once those debts go to collections, credit scores take a hit, which means car and home loans are harder to come by or are only offered with high interest rates — leading to a slippery slope for people who are already struggling with their bills.

Lexi Coburn, 33, first ran into that issue nearly a decade ago. She took on medical debt in 2013, when she was 23 years old and uninsured.

Her feet were too swollen to walk, so she went to the emergency room, unsure where else she could go to get medical care without insurance. She was told she had early onset arthritis.

The $425 bill from that visit was not in Coburn’s budget, so she left it unpaid. Growing up, her family frequently didn’t have the income to cover medical expenses, she said, and she felt ill-equipped to handle the medical system any differently as a young adult.

Though she was later able to enroll in health insurance through the Affordable Care Act, Coburn’s medical debt still grew to over $2,300 — including another $1,532 from dental work and a separate ER visit, both in 2019.

The consequences became clear when she tried to get a car.

“Immediately my medical debt was in the way of qualifying for a good loan that didn’t have an outrageous payment per month,” Coburn said.

“The most frustrating aspect for me was in my mid 20s, when I wasn’t making a lot of money, I needed to be able to get transportation to get to my job,” Coburn said.

She saw a perilous financial cycle mounting. Coburn’s bills and subsequently low credit score got in the way of “being able to thrive enough to pay off the debt,” she said. “So it just felt like a domino effect.”

The new CFPB rule also seeks to address the issue of incorrect, confusing and complicated medical bills, which often lead to long, drawn-out disputes between patients and billing departments — a complaint that the CFPB, as the agency tasked with consumer empowerment, receives in droves, Chopra said.

“Too often, we see that people are receiving bills that are inaccurate. Many patients are fighting over these bills for months, only to find that it then appears on their credit report,” he said.

Experts who support the CFPB’s proposed rule also point to the already-low success rate for collecting on medical bills.

“We know empirically that the repayment rates are incredibly low for medical debt, and so it’s already the case that people aren’t really paying it down. So I don’t think this policy change is going to change the behavior that dramatically,” said Matt Notowidigdo, a professor at University of Chicago’s Booth School of Business who studies health economics.

Linda Davis, a 61-year-old resident of Grand Rapids, Michigan, has chronic obstructive pulmonary disease, a type of lung disease, and uses a power wheelchair because of a lower back injury. She said she doesn’t think she’ll ever pay off her medical bills, which she estimates to be between $45,000 and $50,000.

“People might be mistaken and think, oh, well, she’s got Medicare, she’s all set. That’s not the case at all, and it can screw your whole life up. It takes control of your whole life,” Davis said.

She said her monthly income covers rent, electricity, her cell phone bill and groceries, but that she doesn’t have room in her budget for her medical bills.

“You find out [after the procedure], you’ve got all these medical bills, and what are you supposed to do with them all? You know, there’s no way on God’s green earth I could pay all those medical bills. Even if I paid a small amount every month, I wouldn’t live long enough to pay them all,” Davis said.

To Notowidigdo and many other health economists, addressing the root cause of America’s medical debt issue would mean enrolling more people in adequate health care coverage on the front end, “rather than dealing with unpaid medical bills from lack of insurance or not generous enough insurance on the back end,” he said.

Of course, for now, those large bills and low repayment rates are already a challenge for hospitals and health care systems.

If the CFPB rule leads to fewer people paying the bills, it could be the patients who suffer, some experts warned.

Ge Bai, a professor who studies accounting health policy at Johns Hopkins University, predicted that hospitals will have to make up for that loss in other ways. More stringent payment efforts, like requiring payment before patients receive medical care, could leave low-income patients worse off.

“I think in the short run, it will be great news for patients, and probably we’ll see patient advocacy groups pushing it. However, I think in the long-run, when the long-term negative effects emerge, probably we’re going to see more pushback,” Bai said.

Industry groups, like the Association of Credit and Collection Professionals, have echoed Bai’s concerns.

“There’s too much at stake for Americans’ access to quality health care by taking actions that only negatively affect the cash flow to the health care community without finding ways to replace those funds,” ACA CEO Scott Purcell said when CFPB first announced it was looking into the policy change.

Chopra rejected the notion that more people will default on their health care debts as a result of the rule, saying they’ll still have to face other penalties that come with debt.

“Those individuals will still be subject to collection actions, lawsuits and more. There are plenty of ways that people get penalized for not paying their bills. I just don’t want to see the credit reporting system be weaponized against people who already paid them,” Chopra said.

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(SAN FRANCISCO) — Disgraced Theranos founder Elizabeth Holmes’ appeal will be heard at a federal courthouse in San Francisco on Tuesday.

The hearing arrives one year after Holmes began a more than 11-year sentence at a Texas prison for defrauding investors with false claims about her company’s blood-testing technology.

In a 47-page court filing in November, Holmes’ attorneys said the prosecution failed to prove a cornerstone of its case: that Holmes hoodwinked investors while knowing full well the deficiencies of her product.

“The public narrative regarding the spectacle of Theranos’ downfall is that the company’s technology simply did not work and Holmes knew it,” Holmes’ attorneys wrote. “But Holmes’ intent and knowledge on this central question were intensely contested at trial.”

“Substantial evidence showed that Holmes and Theranos’ scientists believed in good faith that Theranos had developed technology that could accurately run virtually any blood test,” the attorneys added.

Holmes’ attorneys focused their appeal on the judge’s decision to permit testimony from ex-Theranos clinical lab director Kingshuk Das as a source of information about key events rather than as an expert witness.

The defense also took issue with limits placed on cross-examination of another key witness and the case’s treatment of voided blood test results.

In a previous filing, the prosecution strongly rebuked the alleged grounds for appeal. Prosecution attorneys challenged allegations of missteps in the case and cited evidence of misrepresentations about the product made by Holmes.

“Her claims are meritless, but, regardless, unavailing given the overwhelming evidence and independent categories of fraudulent statements Holmes made,” prosecutors said in a court filing last August.

Judge Edward Davila, who oversaw the trial of Holmes, ordered her to report to prison last year after the U.S. Court of Appeals for the Ninth Circuit denied her request to remain free pending an appeal.

In denying a previous attempt to delay Holmes’ prison sentence, Davila said she had failed to raise a “‘substantial question of law or fact’ that is ‘likely to result in a reversal or an order for a new trial on all counts.'”

The appeal hearing on Tuesday marks the latest development in a legal saga that turned the former billionaire entrepreneur, who swore her startup could run hundreds of tests on a single drop of blood, into a symbol of excess and deception in Silicon Valley.

Ramesh “Sunny” Balwani, the former romantic partner of Holmes and president of the now defunct blood testing company, began serving his nearly 13-year sentence at a prison in San Pedro, California, last April. Balwani, who was second in command to Holmes at Theranos, was convicted of fraud and conspiracy.

In November 2022, Holmes was sentenced to 135 months, or 11 1/4 years, in prison.

Holmes was convicted the following January on four counts of investor fraud and conspiracy while at the helm of Theranos.

The verdict followed a four-month trial that detailed Holmes’ trajectory from a Stanford University dropout in 2003 to a star business leader on the cover of Fortune magazine a little more than a decade later.

But in October 2015, a bombshell Wall Street Journal report came out, detailing the turmoil within Theranos. As Holmes and her company were hit with official scrutiny, her fortune quickly dwindled. Less than a year later, Forbes downgraded its assessment of Holmes’ net worth from $4.5 billion to $0.

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(CUPERTINO, Calif.) — Apple unveiled artificial intelligence-fueled features across several key products on Monday, heralding the long-awaited entry of the tech giant into the high-stakes AI race.

The latest version of Apple’s operating system will deliver customizable tools using generative AI for iPhones, Mac and iPad, Apple said at the Worldwide Developers Conference hosted at the company’s headquarters in Cupertino, California. Language tools will be able to improve or summarize text, and image generators will supplement photos with extra adornment.

The AI capability, called Apple Intelligence, amounts to the “next big step for Apple,” CEO Tim Cook said on Monday. The advance results from an agreement between Apple and OpenAI, the firm behind popular text bot ChatGPT, Cook added.

A revamped Siri, for instance, will draw on generative chat technology to improve its language comprehension and retain context from previous requests, the company said.

Since its launch in 2011, Siri has functioned primarily as a hands-free tool for responses to specific prompts, such as queries about the weather or a user’s upcoming calendar. The new version, Apple said, will carry out extended conversations and aid in intricate tasks.

Further, Siri will be able to take actions within a user’s product, pulling up photos or adding text to the Notes app, the company said.

Apple, the world’s second largest company in terms of market capitalization, has lagged behind its behemoth competitors in the battle to develop and offer AI products.

OpenAI retains a longstanding partnership with Microsoft, which holds a minority stake in the firm and integrates ChatGPT into its Bing search engine. Last year, Google announced its own AI model called Bard, which provides brief summaries in response to some search queries.

The announcement on Monday amounts to the most important decision for Apple — and Cook — over the last decade, Dan Ives, a managing director of equity research at the investment firm Wedbush, told clients in a research note ahead of the conference.

“The pressure to bring a generative AI stack of technology for developers and consumers is front and center,” Ives said.

The fresh product arrives at a moment of relatively sluggish performance for Apple.

In its latest earnings report, Apple last month revealed a sales slump for some of its mainstay products. Smartphone sales dropped 10% over the three months ending in March, when compared with the same period a year earlier. iPad sales fell 17% over that period, the earnings report said.

In recent years, the company has relied on new models of its signature items, instead of transitioning to the next big product, analysts previously told ABC News.

The approach allows Apple to capitalize upon its loyal customer base and popular devices while it develops new products like Apple Vision Pro, the company’s mixed reality headset, analysts said.

With a starting cost of $3,499 and a higher-powered version at around $4,000, Apple Vision Pro remains far from a price point that would make it affordable for a wide audience.

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(NEW YORK) — It’s nearly impossible not to smile when you squeeze the throttle on the new Aston Martin Vantage.

Aston executives may wax on about the Vantage’s state-of-the-art infotainment system, but what’s under the hood is more exciting: a heavily reworked, hand-built 4.0 twin-turbo V8 that delivers 656 horsepower and a thunderous howl.

Take it for a spin on winding roads or test its limits on a race track — the car’s rowdy, brash exhaust note reacts to every input the driver decrees. The latest version of the British marque’s 60-year-old sports car clearly answers enthusiasts’ demands: give us a mighty engine that we can see, smell and experience.

The Vantage is not for environmentalists who are searching for performance and zero emissions. In fact, Aston executives have pushed back their timeline for building an all-electric sports car, citing the lack of interest from consumers. Instead, resources are going toward launching a powerful, “fearsome” V12 engine that could produce 824 hp.

Aston is far from alone. Bugatti’s new hypercar, coming June 20, still features a W16 engine. Lamborghini, the Italian supercar brand, said the successor to the Huracan packs a twin-turbo V8 engine.

“Enthusiasts absolutely want a V8 in the supercar segment,” Alex Long, director of product and strategy at Aston Martin, told ABC News. “They want the sound quality it brings, the feel through the cabin, everything. Our customers are not asking for an electric Aston.”

The anti-electric attitude extends beyond the enthusiast community. Forty-six percent of Americans say they are “not too likely or not at all likely to purchase” an EV, according to a recent poll by The Associated Press -NORC Center for Public Affairs Research and the Energy Policy Institute at the University of Chicago.

Earlier this year, luxury German automaker Mercedes delayed its electrification plans by five years, with CEO Ola Kaellenius telling investors the company was still committed to producing combustion engine cars. Last month, Toyota executives announced its engineers were developing smaller, next-gen engines that can run on alternative fuels like liquid hydrogen.

Industry insiders are calling the trend “return to ICE,” or internal combustion engines.

“Maybe there was a little bit of a hype [around EVs]. There are challenges with an all EV world,” McKeel Hagerty, CEO of Hagerty, an automotive enthusiast brand, told ABC News. “There’s a place for EVs for people who really want them, especially the high-performance ones, but they don’t seem to be selling and I think that tells us something.”

Tony Quiroga, editor-in-chief of Car and Driver and co-host of the magazine’s new “Into Cars” podcast, noted that EVs can work for some Americans though the inconvenience of charging can outweigh the pros.

“Everyone who wanted an EV has one now,” he told ABC News.

For enthusiasts, the attraction of owning an electric sports car is waning, he argued.

“Aside from acceleration, it’s not the same experience” as an ICE sports car, he said. “So many EVs can perform as quickly in a straight line for under $100K and buyers are realizing that.”

He went on, “V12 and even V8 engines are becoming increasingly rare — there is an exclusivity to it. Gearheads are realizing the experience is such an important part of the car and the engine is what makes these cars so special.”

Rimac CEO Matt Rimac acknowledged that wealthy drivers have shown little interest in his heavily trumpeted Nevera hypercar, which can generate a staggering 1,914 hp from four electric motors. Limited to 150 units, the Croatian company has struggled to find buyers.

“We started to develop [the] Nevera in 2016/2017, when electric was cool,” Rimac said at the Financial Times Future of the Car conference in May. “At that time, we were thinking electric cars would be cool in a few years — the best cars, or with the highest performance and so on. We notice [now] that as electrification is becoming mainstream, people at the top end of the sector want to differentiate themselves.”

Hagerty said he invites skeptical enthusiasts to drive his all-electric Porsche Taycan Turbo S in Michigan so that they, too, can realize the “undeniable performance” with electric sports cars.

“I put them behind the wheel and say try this Taycan — you don’t even have to put in sport mode,” he said. “The joke is that some EVs don’t feel like a car, that they’re an electronic appliance. The Taycan feels like a car, rides like a car and gets that torque and performance.”

He added, “I bought it because I am open to these things.”

Jason Cammisa, an award-winning automotive journalist and successful YouTube host, argued that electrification would always be a tough sell to the hardened automotive community that prefers the “old, screaming, antiquated tech” in ICE cars. There are positives to driving electric sports cars — the low center of gravity, the insane speeds — though many enthusiasts are clamoring for more than performance numbers, he said.

“For me, the most interesting cars in the world right now are naturally aspirated, high revving, manual transmission — a return to 20 years ago,” Cammisa told ABC News. “You can’t win a race with an ICE car [versus an electric one] so let’s go back to what makes these things great.”

Cammisa pointed out that even reducing cylinders in an engine can cause an uproar. He gave the example of when Porsche put in a turbocharged four-cylinder engine in the Boxster and Cayman. Owners revolted and sales slipped. To appease critics, Porsche offered a naturally aspirated flat-six engine in the cars and enthusiasts jockeyed for an allocation, paying above sticker price to get one.

“Everyone is a little hysterical right now. It’s always in response to fear,” Cammisa said. “The regulatory environment will determine what the mix of ICE and EV is. Consumers are trying to send a message to the government — stop pushing so hard on EVs — and we’re seeing a battle between the government and consumer right now.”

The solution for enthusiasts — and average motorists — may be a hybrid, which Cammisa and Quiroga both agree can satisfy drivers and environmentally conscious consumers.

For the sports car crowd, Cammisa liked the Corvette E-Ray so much that he called it “an example of a hybrid done correctly.”

It may not be tuned for efficiency, Quiroga said, but the E-Ray, the first electrified Vette with all-wheel-drive capability, is “spectacular.”

“The electric motor fills in the power before the gas engine does … it’s heavy but you can’t really notice the weight. It’s so quick and wonderful,” he added.

Karl Brauer, executive analyst at iSeeCars.com, said he expects to see more performance hybrids coming in the next few years. The Huracan successor pairs three electric motors with the V8 and even Aston Martin’s Valhalla, a mid-engine hypercar, features a hybrid powertrain.

Porsche recently announced that the 2025 911 Carrera GTS will have a uniquely T-Hybrid system that includes an electric exhaust gas turbocharger. The electric motor also functions as a generator.

“I am a huge fan of hybrids and they are the brilliant option now,” Brauer told ABC News. “We’re at an important reflection point of where we are and where things are going.”

Long, of Aston Martin, said the Vantage has even more to offer than a snarling V8 engine.

“It’s a complete reappraisal of vehicle dynamics from us,” he said. “Even people who have been with the brand for a long time, they cannot believe the level of sophistication in the ride, the lateral grip, the responsiveness. This is their trophy car.”

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(NEW YORK) — A better-than-expected jobs report on Friday displayed the resilient strength of the U.S. economy, even after years of high interest rates and stubborn inflation.

Employers hired 272,000 workers last month, blowing past economist expectations of 190,000 jobs added, U.S. Bureau of Labor Statistics data showed. The unemployment rate ticked up to 4%, reaching that level for the first time since January 2022.

The hiring exceeded the average number of jobs added each month over the previous year, and it accelerated notably from the 175,000 jobs added in April.

The blockbuster report defies the nation’s flagging economic growth. Gross domestic product slowed significantly at the outset of this year, suggesting that the prolonged policy of high interest rates had weighed on business investment and economic activity.

“The May jobs report was strong across the board,” Bret Kenwell, an investing analyst at eToro, told ABC News in a statement.

In theory, high interest rates depress consumer demand and slow price increases. Inflation has fallen significantly from a peak of 9.1%, but it remains more than a percentage point higher than the Fed’s target rate of 2%.

That economic slowdown appeared to manifest in a dip in job openings reported earlier this week. Job openings fell in April to the lowest level since February 2021, BLS data on Tuesday showed.

However, the labor market surprised observers on Friday with a burst of hiring that improves the economic outlook but may complicate the Fed’s decision next week on a possible interest rate cut.

The Fed risks a rebound of inflation if it cuts interest rates too quickly, since stronger consumer demand on top of solid economic activity could lead to an acceleration of price increases.

Average hourly wages surged 4.1% over the year ending in May, the fresh data on Friday showed. That rate of pay increase exceeds the pace of inflation, indicating that the spending power of workers has grown even as prices jump.

The data marks a boon for workers but could give pause to policymakers, since they fear that a rise in pay could prompt businesses to raise prices in order to cover the added labor cost.

“Today’s data undermines the message that other recent economic data have been giving of a cooling U.S. economy, and slams the door shut on a July rate cut,” Seema Shah, chief global strategist at Principal Asset Management, told ABC News in a statement.

The major stock indexes fell slightly in pre-market trading in response to the jobs report.

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(NEW YORK) — Jessica Morrison and Jason West, a Philadelphia-area couple with a 4-year-old daughter, stood on the verge of a financial breakthrough.

West was breezing through the hiring process to become a driver at UPS, a job that paid $400 a week and would supplement Jessica’s salary as a state employee.

“It was exciting,” Morrison told ABC News, recounting a moment that took place five years ago. “This was something that could bring us up.”

Their hopes soured, however, when they realized child care would cost them all of the added income, even as the loss of West’s flexible schedule would complicate the family’s daily life. West withdrew his application.

“It was really disheartening,” said West, who has worked gig jobs ever since. 

Though their daughter has reached school age, the couple says child care costs have become even less affordable for their 5-year-old son.

As the November election approaches, inflation ranks as a top issue for voters beset by a yearslong surge in the price of essentials like gasoline, flour and housing. But less attention has been paid to the skyrocketing cost of child care, which strains the monthly budget for millions of families.

The affordability crisis in child care threatens not only strapped families but also a vast network of facilities struggling to stay in business as well as the nation’s overall economic strength, which depends on the capacity of parents to work outside the home, experts told ABC News.

Democrats and Republicans in Washington, D.C., differ significantly on the issue, amplifying the stakes of this year’s election, Rachel VanSickle-Ward, a professor of political studies at Pitzer College, told ABC News.

“Based on who wins in November — both at the presidential level and at the congressional level — it is make it or break it for child care policy,” VanSickle-War said.

Families in the U.S. spend an average of $11,000 on child care each year, which amounts to a nearly 250% increase since 1991, the advocacy group Child Care Aware found in 2022.

In recent months, the rise in prices has accelerated. The cost of child care climbed 4.1% over the year ending in April, outpacing the overall inflation rate by more than half a percentage point, U.S. Bureau of Labor Statistics data shows.

Joanne Sawicki Luszczak and her daughter Tiffany Martin, the owners of Teddy Bear College in Bensalem, Pennsylvania, say they have raised the price of tuition in recent years as a means of weathering increased costs of their own.

Teddy Bear College provides snacks and lunch for students each day, leaving its balance sheet vulnerable to the recent rise in food prices.

Meanwhile, the child care center has raised wages for its workers, trying to stem an exodus of entry-level employees who have sought better pay elsewhere. While pay has increased for workers the past few years, the median weekly wage in child care is $635, or about $33,000 a year, Axios reported in April.

“The challenge of actually retaining good quality staff is tricky, because what the tuition brings in is what we have to pay,” Sawicki Luszczak said. “If we raise tuition, we can give raises out. Well, there’s a limit to that.”

The squeeze faced by families and child care centers has elicited policy proposals at the state and federal level.

In Pennsylvania, a key swing state, a bipartisan measure last year expanded the state’s child tax credit.

Eligible families — those earning less than $43,000 a year with two or more children — receive a state tax credit of $2,100, delivering a 100% match to the federal tax credit. Families above the income threshold receive a tax credit of $1,200.

Democratic Rep. Tina Davis, a sponsor of the law, said it will lower the cost barrier for families and, in turn, help boost income at day care centers and other businesses.

“It just puts money in people’s pockets,” Davis said. “When you put money in people’s pockets, they’re going to spend it. It’s going to help small businesses.”

Republican Rep. Joe Hogan, who also backed the measure, said its benefits will extend economy-wide as it allows some parents to remain at their job or enjoy the latitude to pursue a new one.

“No party has a monopoly on good ideas,” Hogan said. “We’ve got to be putting families first. We need more policies so that people feel comfortable entering the workforce.”

Bipartisan agreement has proven elusive at the federal level, however. Congress has failed to renew a pandemic-era expansion of the federal child tax credit that expired in 2022.

President Joe Biden and former President Donald Trump offer dramatically different approaches to the issue, said VanSickle-Ward, of Pitzer College.

Biden has sought a role for the federal government to spend on making child care more affordable, she added. Child care subsidies were included in Build Back Better, a 2021 spending package backed by Biden that failed to garner sufficient support in Congress.

In his state of the union address, in March, Biden proposed a minimum tax for billionaires that would help fund federal support for families seeking child care.

“Imagine a future with affordable child care so millions of families can get the care they need and still go to work and help grow the economy,” Biden said.

In a statement to ABC News, the Biden campaign contrasted the policies taken up by the two major candidates.

“Donald Trump has no plan to help lower the costs of child care, in fact, his agenda raises costs on the typical American family by at least $1,700 annually, cuts Social Security and Medicare, and repeals the Affordable Care Act. President Biden knows that affordable child care lifts our economy, which is why he’s fighting everyday to lower costs and give families more breathing room,” Biden campaign spokesperson Seth Schuster said.

For his part, Trump proposed a $1,200 tax credit for child care during his 2016 campaign. A year later, Trump enacted his signature tax measure, which expanded the child tax credit from $1,000 to $2,000 per child. The expanded child tax credit was unavailable to more than 25 million low-income families, however, according to an analysis by the nonpartisan Center on Budget and Policy Priorities.

“I haven’t heard as much from Trump on childcare in this election cycle,” VanSickle-Ward said.

In a statement to ABC News, the Trump campaign touted his record on child care and faulted Biden for the price spike.

“President Trump doubled the Child Tax Credit, expanded access to quality, affordable childcare, and created the first paid family leave tax credit for job creators — easing the burden on hardworking parents and families,” said Karoline Leavitt, national press secretary for the Trump campaign. “Due to Joe Biden’s out-of-control spending, prices are up, real wages are down, and it’s harder than ever for families to make ends meet.”

“By making life affordable again and empowering parents, President Trump will ease the burden of Bidenflation, improve academic excellence for students, and strengthen our childcare system for all American families,” Leavitt added.

Regardless of what happens in November, the affordability of child care will hold major implications for the U.S. going forward, VanSickle-Ward said.

“It’s really impossible to overstate how impactful child care is to the economy,” VanSickle-Ward said.

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(NEW YORK) — Prominent backers have poured billions into a new Texas-based stock exchange that aims to attract companies with what it considers more business-friendly rules than those of the New York Stock Exchange and the Nasdaq.

The Texas Stock Exchange, which boasts funding from market maker Citadel Securities and asset manager BlackRock, intends to submit filing documents with the Securities and Exchange Commission later this year, TXSE Group, the company behind the exchange, said in a statement on Wednesday.

In recent years, some chief executives critical of what they deem to be “woke capitalism” have moved their companies to Texas, where more Fortune 500 companies are headquartered than any other state.

The new stock exchange could indicate an effort to attract conservative-minded firms, some experts told ABC News, but others downplayed the potential role of politics. In a statement, TXSE Group said that the exchange is apolitical.

TXSE Group acknowledged but declined to respond to ABC News’ request for comment.

Here’s what to know about the Texas Stock Exchange and what it says about the corporate culture wars

How will the Texas Stock Exchange work?

Headquartered in Dallas, the Texas Stock Exchange will be a fully electronic, national exchange that allows companies to list and trade on its platform.

The new exchange also plans to list exchange-traded products, a growing category of investment vehicles that allow customers to bet on a basket of assets. An exchange-traded bitcoin fund, for instance, allows clients to invest in bitcoin without holding the underlying cryptocurrency.

More than two dozen investors have backed the exchange with a total of more than $120 billion in funds, the TXSE Group said in a statement.

The exchange plans to attract businesses frustrated by stringent listing standards and the increasing costs they impose, the TXSE group added. For instance, the Nasdaq has imposed new rules setting targets for board diversity, the group said.

“Combined with the demand we are seeing from investors and corporations for expanded alternatives to trade and list equities, this is an opportune time to build a major, national stock exchange in Texas,” James Lee, founder and CEO of TXSE Group, said in a statement.

The Wall Street Journal first reported details about the exchange.

Is this an ‘anti-woke’ exchange?

The announcement coincides with a conservative backlash against climate-friendly business practices as well as diversity, equity and inclusion policies derided by some critics as “woke capitalism.”

Analysts who spoke to ABC News differed over the extent to which the Texas Stock Exchange serves as a listing or trading alternative for conservative-leaning companies.

Some said ‘anti-woke’ branding would make up a key selling point for the new exchange, while others downplayed the role of politics for an exchange that promises lower compliance costs, as the Texas Stock Exchange does.

“Texas has a pretty clear message: ‘If you’re anti-woke, come here,’” Larry Tabb, head of market structure research at Bloomberg Intelligence, told ABC News.

As technological advances have taken stock exchanges online and lowered the baseline cost of offering high-quality services, the exchanges have sought alternative means of attracting customers, Tabb said. These days, the primary features that distinguish exchanges are listing rules, branding, and liquidity, he noted, but he emphasized branding.

When companies list with the New York Stock Exchange or Nasdaq, they draw on the credibility associated with those highly visible exchanges, Tabb added.

“They want to be affiliated with where you ring the bell or the exchange in Times Square,” Tabb said, noting that companies critical of sustainable practices or robust regulations may want an exchange affiliated with that point of view.

“The Texas exchange might draw energy companies; it might draw Tesla,” Tabb said, adding, “I’m not sure most companies want to be on the outer edge of the culture war issue.”

Christine Parlour, professor of finance and accounting at the University of California, Berkeley Haas School of Business, downplayed the role of politics in the Texas exchange. Instead, she said, most prospective clients are primarily focused on where they can find liquidity.

“All exchanges are money-making entities,” Parlour said. “At some point, people want to make money. So things can’t or won’t be completely driven by perception.”

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(NEW YORK) — Disney and appointees of Florida Gov. Ron DeSantis have officially approved an agreement that could result in the company investing $17 billion into its Florida properties, as well as a potential fifth major theme park.

The news comes two months after the two parties agreed to end their drawn-out legal battle, which centered on oversight of the Disney World district that provides municipal services like fire suppression, emergency medical services, law enforcement services, environmental protection and public utilities.

The DeSantis-appointed supervisors of the Central Florida Tourism and Oversight District — formerly the Reedy Creek Improvement District — are one step closer to cementing a final agreement with Walt Disney Parks and Resorts U.S., after the appointees unanimously voted Wednesday to accept proposed revisions and approve the new development agreement. Disney is the parent company of ABC News and Good Morning America.

Both sides had agreed to negotiate this new agreement after a March settlement, which ended their previous lawsuits against each other.

Final action for the development agreement will take place with Walt Disney Parks and Resorts in another public board meeting on June 12.

During a livestream of the first of the board’s two public hearings on the agreement on Wednesday, Katherine Luetzow, manager of planning and engineering for the district, highlighted details of the 15-year development agreement, which covers nearly 17,000 acres of land within the district that is currently owned by Walt Disney Parks and Resorts and its subsidiaries.

“Disney is currently planning up to $17 billion of capital investments within the district in the next 10 to 20 years, with a commitment of $8 billion in the next 10 years,” she said. “There are provisions for by local initiatives, including a minimum of 50% of goods and services related to the design, development and construction, to be retained with Florida businesses. There is $10 million going to attainable housing projects, and there are provisions for land, as well as wetland and threatening endangered species mitigation credits being donated to the district.”

The members of the Central Florida Tourism Oversight District board welcomed public comment from two small business owners that operate at Disney Springs, who both urged the board to approve the new deal.

Luetzow said their staff reviewed this agreement and recommended the board review and approve this development agreement.

The members of the Central Florida Tourism and Oversight District board welcomed public comment from two small-business owners who operate multiple food establishments at Disney Springs. Both urged the board to approve the investment from Disney, which they said would benefit thousands of restaurant workers, their families and anyone who lives and works in this district.

Woody Rodriguez, director of external affairs for Disney Parks, spoke at the meeting and thanked the board for considering the agreement.

“I especially thank your district administrator who definitely hit the ground running,” Rodriguez said. “The development agreement will enable us to continue to invest significantly in the district to benefit all parties. We hope that the board votes to approve it at your next public hearing. Thank you.”

As ABC News reported previously, DeSantis has been at odds with Disney since the company publicly criticized a DeSantis-backed controversial Florida law that restricts content concerning sexual orientation and gender identity in grades kindergarten through third grade. The Parental Rights in Education Law was dubbed by critics as the “Don’t Say Gay” law, with opponents arguing it painted LGBTQ topics as taboo or inappropriate.

DeSantis subsequently took control of Disney’s special tax district, which allows the theme park to govern itself, and the Florida Legislature voted to dissolve the former governing board of the district, creating the DeSantis-appointed Central Florida Tourism Oversight District in its place.

Disney sued DeSantis and various Florida officials in April 2023 over the decision, alleging the move was “patently retaliatory, patently anti-business, and patently unconstitutional.” The lawsuit took aim at the state oversight board’s decision to void “publicly noticed and duly agreed development contracts which had laid the foundation for billions of Disney’s investment dollars and thousands of jobs,” according to the legal filing.

The company called the move “a targeted campaign of government retaliation — orchestrated at every step by Gov. DeSantis as punishment for Disney’s protected speech” and said it “threatens Disney’s business operations, jeopardizes its economic future in the region, and violates its constitutional rights.”

A federal judge in Florida dismissed the lawsuit in January this year, stating at the time that Disney had not shown standing to sue the governor. Disney subsequently appealed the ruling.

In March, Disney agreed to end litigation in light of the proposed development agreements, which were approved on Wednesday, with Walt Disney World President Jeff Vahle stating at the time, “We are pleased to put an end to all litigation pending in state court in Florida between Disney and the Central Florida Tourism Oversight District. This agreement opens a new chapter of constructive engagement with the new leadership of the district and serves the interests of all parties by enabling significant continued investment and the creation of thousands of direct and indirect jobs and economic opportunity in the State.”

Disney is the parent company of ABC News and “Good Morning America.”

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