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(NEW YORK) — Dozens of families who are suing Snap Inc., the parent company of Snapchat, won a legal victory Tuesday when a judge in California ruled their lawsuit against the social media giant may continue.

Over 60 family members of children who allegedly obtained illegal drugs through Snapchat are part of the lawsuit, Neville et al v. Snap Inc., which was first filed in October 2022. In all but two cases, the child died after ingesting the drugs allegedly obtained through Snapchat.

Snap previously attempted to get the lawsuit dismissed back in October, but Los Angeles Superior Court Judge Lawrence P. Riff ruled Tuesday that the parents’ lawsuit may continue to trial.

In his ruling, the judge overruled Snap’s objections to 12 of 16 claims in the lawsuit.

The lawsuit alleges that “Snap and Snapchat’s role in illicit drug sales to teens was the foreseeable result of the designs, structures, and policies Snap chose to implement to increase its revenues,” according to court filings shared by the Social Media Victims Law Center, which is representing the families.

Some of Snapchat’s features that set it apart from other apps — like automatically deleted messages, geolocation functionality and the My Eyes Only privacy feature — make illegal activities harder to track and are especially attractive to drug dealers, the lawsuit alleges.

Television host Dr. Laura Berman and her husband Sam Chapman’s son Sammy was 16 years old and a junior in high school when he died in 2021 after overdosing on a fentanyl-laced pill from a person he allegedly met on Snapchat, according to Chapman and Berman.

“He did not mean to take fentanyl. He did not want to take fentanyl,” Berman, whose family is part of the lawsuit, told ABC News in December. “But what he took was counterfeit, and it was fentanyl.”

Amy Neville, the lead plaintiff in the lawsuit, told ABC News’ Good Morning America in October that her son Alexander was 14 years old and preparing for his freshman year of high school when he died in 2020 after taking a fentanyl-laced oxycodone pill that Neville said he allegedly obtained from a person he met on Snapchat.

“Kids are losing their lives, and they swept it under the rug. They had their chance to do the right thing, and they chose profits over people,” Neville told GMA, referring to Snapchat. “The way that we are going to bring Snapchat and other social media companies to the table is through lawsuits and legislation. That is plain and simple.”

In response to the judge’s ruling allowing the lawsuit to move forward, Ashley Adams, a spokeswoman for Snap Inc., told GMA the social media company will “continue to defend” itself in court.

“The fentanyl epidemic has taken the lives of too many people and we have deep empathy for families who have suffered unimaginable losses,” Adams said in a statement. “At Snap, we are working diligently to stop drug dealers from abusing our platform, and deploy technologies to proactively identify and shut down dealers, support law enforcement efforts to help bring dealers to justice, and educate our community and the general public about the dangers of fentanyl.”

Adams continued, “While we are committed to advancing our efforts to stop drug dealers from engaging in illegal activity on Snapchat, we believe the plaintiffs’ allegations are both legally and factually flawed and will continue to defend that position in court.”

Snap Inc. has said previously that the company uses “cutting-edge technology” in trying to keep users safe. The company has also pointed to its work supporting law enforcement investigations into drug dealers, and its work creating a Family Center to help provide parents with more visibility into their kids’ actions on Snapchat.

Matthew P. Bergman, the attorney for the families, said that Tuesday’s ruling marks a “first” in the effort to “hold social media companies accountable.”

“Today’s ruling marks the first time a court has allowed parents to hold social media companies accountable for facilitating the sale of deadly drugs,” Berman said in a statement Tuesday. “Fentanyl is the largest killer of kids under 18 and social media plays a huge role the deadly drug sales that have resulted in a 350% increase in teen deaths over the past three years.”

He continued, “Parents who lost children to fentanyl poisoning will now be able to move forward with lawsuit, uncover evidence of Snapchat’s contribution to illegal drug sales and by holding Snap legally accountable spare other families the unspeakable grief they experience every day.”

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(NEW YORK) — Mortgage rates have plummeted in recent weeks, boosting the prospects of homebuyers previously stifled by high borrowing costs.

Many forecasters predict mortgage rates will drop further, however, since the Federal Reserve expects to cut its benchmark interest rate this year.

Those circumstances pose a quandary for buyers: Jump into a newly attractive market that promises thousands of dollars in gains or wait for the possibility of an even more favorable one.

Homebuyers would be well-served by a leap into the current market, since the movement of mortgage rates often proves difficult to predict and purchasers reserve the ability to refinance if rates continue to fall, experts told ABC News.

But that approach does carry risks, some experts added, noting the loss of additional time to pad one’s finances as well as the possibility of a decline in home value after the purchase if the market worsens.

“If you need to buy a property, go ahead and buy it,” Marti Subrahmanyam, a professor of finance and business at New York University, told ABC News. “Don’t try to time the market.”

Last year, mortgage rates reached their highest level in more than two decades.

But rates have declined sharply over the past few months. As of last week, the average interest rate for a 30-year fixed mortgage stood at roughly 6.6%, according to FreddieMac. That amounts to more than a percentage point drop from a peak reached in October.

Each percentage point decrease in a mortgage rate can take away thousands or tens of thousands of dollars in costs each year, depending on the price of the house.

The fall of mortgage rates coincided with an announcement from the Fed that it expects to cut interest rates this year by an amount equivalent to three quarter-point reductions.

Such plans would reverse a near-historic series of rate increases over the past year that sent mortgage rates soaring.

Mortgage rates closely track with 10-year treasury bond yields, which last month reached lows last seen in August. Those yields are highly sensitive to the Fed’s interest rate moves.

“Treasury rates are coming down — and as treasury rates come down, so will mortgage rates,” Susan Wachter, a professor of real estate at University of Pennsylvania’s Wharton School of Business, told ABC News.

Even though mortgage rates could continue to fall, experts said, it makes sense to jump into the market because shifts in rates often defy expectations.

“I would be wary of advising prospective homebuyers to delay their purchase in hopes of better terms in the future,” Julia Fonseca, a professor at the Gies College of Business at the University of Illinois at Urbana-Champaign. “It’s very hard to time the market.”

Lu Liu, a professor at the Wharton School at the University of Pennsylvania, echoed this view.

“Households should make their housing decisions in line with their needs,” Liu told ABC News. “It’s very hard to accurately predict long-term interest rates.”

Plus, experts added, homebuyers can opt to refinance their homes at relatively low cost if rates move further downward.

“It’s quite efficient to refinance,” Wachter said.

This approach does carry some downsides, however, some experts noted.

If homebuyers move quickly, they cut down the time available to add to their savings before taking on the significant expense of a mortgage.

Purchasers also run the risk of snatching up a house right before the market declines, in which case the home could lose value almost immediately.

“The risks are that housing prices may plummet,” Wachter said, noting that such an outcome would likely require a severe recession that triggers layoffs and tanks demand for homes.

Optimism has grown about the outlook for the U.S. economy, however. Experts widely expect the economy to slow but not shrink over the next year.

“That risk of significant declines in housing prices I believe is off the table,” Wachter said.

Ultimately, the decision to buy a house requires a case-by-case assessment of factors that extend well beyond borrowing costs, some experts said.

“Whether now is a good time to jump back in depends on your personal situation,” Liu said.

 

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(NEW YORK) — Days after Elon Musk bought X for $44 billion last year, he strolled through the glass doors at company headquarters carrying a kitchen sink.

“Let that sink in,” he said.

Now, Musk faces a difficult reality of his own: A sharp decline in the value of X totaling tens of billions of dollars in losses.

The mutual fund Fidelity values the company at less than a third of its worth at the time of the acquisition, Axios recently reported.

That revelation adds urgency to a lingering question among some observers: Would Musk sell?

An ongoing advertiser boycott and continued payments on the company’s debt pose challenges that could make a sale attractive, experts told ABC News.

Musk, however, is unlikely to sell because economic incentives appear secondary in his approach to the company and such a move could be construed as an acknowledgment of defeat, some experts said. Plus, they added, the losses have put Musk in a weak position if he were to unload the ailing asset.

“It’s never a good look if you’re trying to sell a melting ice cube to the ice market,” Eric Talley, a law professor at Columbia University who focuses on mergers and acquisitions, told ABC News.

X, formerly known as Twitter, did not immediately respond to a request for comment.

Before the acquisition, advertising sales made up the vast majority of the company’s income, earnings reports showed.

Since Musk acquired the company last year, advertising revenue has fallen about 50%, Musk said in a post on X in July.

That decline came before a wave of advertising exits from X in November after Musk made an antisemitic remark on X. The ad exodus included Comcast, IBM, Warner Bros. Discovery and Disney, the parent company of ABC News.

Musk apologized for the post in November but added a crude denunciation of the advertisers that had withdrawn from the platform in protest.

“I don’t want them to advertise,” Musk said at The New York Times DealBook Summit in New York. “If someone is going to blackmail me with advertising money, go f— yourself.”

Musk, who describes himself as a “free speech absolutist,” has characterized the acquisition of X as an effort to establish a digital town square unencumbered by limits on expression.

On top of that, he holds an ambitious long-term vision for Twitter as an “everything app” that serves not only as a messaging and media-sharing platform but also a versatile tool in which users pay friends, purchase products and book reservations.

“It’s very hard to say whether he’d be willing to sell, and that’s because it’s not obvious to me he’s behaving as an economic actor,” Ann Lipton, a professor at Tulane University who studies corporate law, told ABC News. “He might view a sale at a discount as something like an admission of failure.”

Paul Barrett, a professor at New York University Law School and deputy director of the NYU Stern Center for Business and Human Rights, put it a different way: “Selling X at its current much-reduced value would constitute an enormous blow to a tech mogul who has an enormous ego.”

Still, some experts said Musk would go forward with a partial sale as soon as this year, precisely because he needs to raise funds to expand the capabilities of the platform.

“He’ll rip the Band-Aid off but raise outside capital,” Dan Ives, a managing director of equity research at the investment firm Wedbush, told ABC News.

To purchase the company, Musk borrowed roughly $12.5 billion from major lenders such as Morgan Stanley, Bank of America and Barclays.

So far, Musk has made hundreds of millions in payments on that debt. But the revenue losses have put pressure on him to renegotiate the terms of the loans, said Talley.

If the debt load persists and revenue declines further, Musk will encounter an increasingly difficult position.

“That’s when people get antsy,” Talley said.

Speaking at the conference in November, Musk acknowledged that the company faces existential risks but indicated a willingness to endure them.

“What the advertising boycott is going to do is it’s going to kill the company,” Musk added. “The whole world will know that those advertisers killed the company and we will document it in great detail.”

 

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(NEW YORK) — Over 675,000 cans of baby formula are being recalled for possible bacterial contamination, the company announced.

Reckitt and Mead Johnson Nutrition, the makers of Enfamil and Nutramigen, announced Saturday it was voluntarily recalling cans of Nutramigen Hypoallergenic Infant Formula Powder, a specialty formula given to infants with cow’s milk allergy, following product sample testing outside of the U.S.

“When we were alerted in December to a potential for cross-contamination in product samples outside the U.S., both Reckitt/Mead Johnson and the US FDA tested samples from the batch in question and all tests came back negative,” a Reckitt and Mead Johnson Nutrition spokesperson told ABC News in a statement. “However, Reckitt/Mead Johnson understands the incredible responsibility we have in providing what is often the sole nutrition for infants, and there can be no short cuts for this vulnerable population – therefore, we chose to recall select batches of Nutramigen out of an abundance of caution.”

“Parents should be reassured that they can continue to feed their infants with Reckitt/Mead Johnson Nutrition products, including other Nutramigen powder formula batches, with confidence,” the spokesperson added.

Currently, only Nutramigen Hypoallergenic Infant Formula 12.6 and 19.8 oz cans made in June 2023 are included in the recall. Reckitt said Nutramigen’s liquid formulas and their other nutrition products are not impacted by the recall.

The infant formula cans are being recalled due to possible contamination of Cronobacter sakazakii, a type of bacteria often found in dry goods such as powdered milk, infant formula and herbal tea, according to the Centers for Disease Control and Prevention, and the same type of bacteria behind past baby and infant formula recalls, including Abbott’s recall that shut down their Sturgis, Michigan plant in 2022.

The CDC notes that cronobacter sakazakii infection is rare but can be especially dangerous for babies under 2 months, premature babies and babies with weakened immune systems, as well as older adults over the age of 65. Cronobacter sakazakii infections in babies can potentially cause fever, very low energy, difficulty feeding, seizures, inflammation around the brain and spinal cord, and can be life-threatening.

Reckitt and Mead Johnson Nutrition said they have not received any reports of illnesses.

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(NEW YORK) — The recent headlines for electric vehicles have been brutal: Sales are dropping. Momentum is slipping. Consumers are souring on the technology.

Experts say, however, that 2024 may be the year to finally pull the plug on gasoline-powered cars and trucks.

“Five years ago we did not have the array of EVs we have now. They account for 10% of the market,” John Voelcker, a contributing editor at Car and Driver, told ABC News. “The growth rate may flatten … but the cost of EVs will continue to come down.”

Price slashing by Tesla and its rivals has definitely juiced sales of battery-powered vehicles. In November, dealers increased the discounts on EVs, with the average transaction price (ATP) dropping 8.9%, according to Cox Automotive. EV incentives totaled less than 2% of ATP a year ago.

New models like the Kia EV9, Chevy Blazer EV and Volvo EX30 could also help convince Americans to permanently ditch their V6 and V8 engines.

Moreover, the decision by nearly every automaker to adopt the North American Charging Standard (NACS) port, which Tesla developed, will likely improve the charging experience and ameliorate range anxiety. Voelcker, though bullish on EVs, argued that automakers and the industry overall may have overestimated Americans’ initial fascination with them.

“Some of the manufacturers got overly ambitious,” Voelcker said. “It may be difficult to get to 50% [of new EV sales] by 2030. We’ve moved beyond the early adopters now.”

According to Ivan Drury, Edmunds’ director of insights, automakers — Tesla included — are selling EVs at a loss. The move by Hertz and other rental car companies to stop adding EVs to their fleets has contributed to sluggish sales, he argued.

“EVs are getting harder to move,” Drury told ABC News. “Earlier in the year they were still going for above MSRP. Once the average interest rate hit 7% EVs began to linger on the lot and now require a lot more work from automakers and dealers to sell.”

Ford announced in December it would cut 2024 production targets for its F-150 Lightning pickup truck, building 50% fewer units each week. Jim Farley, the company’s CEO, cited weaker-than-expected demand and a patchy national charging network for the decision. Ford has sold slightly more than 20,000 Lightnings since the end of November.

Last month, German automaker Audi said it would pare back its electric vehicle rollout in the coming year as growth slows, according to Bloomberg. After repeated delays, the company’s Q6 e-tron will finally enter production in the second quarter of 2024.

“Every EV on the market is being battered by bad news,” said Drury. “Nothing is meeting expectations. A new set of buyers now mean a new set of concerns.”

Ed Kim, president and chief analyst at AutoPacific, predicts EV sales in the U.S. will reach 1.5 million units in 2024 and two million by 2025, a slightly more conservative outlook compared to other forecasters.

“We’re not seeing the level of frenzied activity we saw earlier. There’s a slight tapering of demand and partially a market correction,” Kim told ABC News. “The rate of adoption has tailed off a little bit but it’s still growing. This is not a catastrophe for EVs. Don’t get panicked yet.”

He added, “A lot of automakers overestimated demand for high-priced EVs. But that does not mean EV demand is dropping.”

In fact, the Tesla Model Y was one of the top-selling vehicles in all of 2023, a huge triumph for EVs, Kim pointed out. Tesla, which commands 60% of the electric vehicle auto market, will roll out styling updates and substantial improvements to the Model Y and Model 3 next year, a move to ward off the competition, Kim said.

“We have an EV from a manufacturer that didn’t exist 15 years ago and it will be either the first or second top-selling non-pickup vehicle in 2023,” he said. “That’s shocking especially as EV demand is leveling off.”

Kim and Voelcker agreed that the launch of more three-row electric SUVs, a top priority for families with young children, will be needed to shore up sales. The EV9, Lucid Gravity, VinFast VF9 and ID.Buzz could fill the void.

“2024 will be the year we see three-row EVs coming to the marketplace,” said Kim.

Voelcker said the Volvo EX30, a compact SUV that starts under $35,000, would be a significant player in the market, giving mainstream Americans access to an affordable EV with 275 miles of range.

“The EX30 could be significant,” he said.

Voelcker, however, doubted that the Cybertruck, Tesla’s angular electric pickup, would sway traditional truck buyers.

“Call me when Tesla produces the first 10,000 units,” he said. “I continue to think the Cybertruck will be extremely difficult to get into volume production.”

Brands that have been more cautious on electrification are readying their first EVs for consumers. Jaguar Land Rover, for example, recently opened pre-orders for its electric Range Rover SUV.

“It’s going to be a real Range Rover, meaning it’s fully off-road capable … and it will address all the functional needs of a Range Rover without compromise, plus deliver on performance,” Joe Eberhardt, president and CEO of Jaguar Land Rover North America, told ABC News. “Up to this point all the competitors out there have made compromises. We won’t make any.”

Tyson Jominy, vice president of data and analytics at J.D. Power, anticipates EV market share to rise to 12% next year — though that percentage could be higher, he suggested. The Inflation Reduction Act negatively impacted sales by slashing the number of electrics eligible for federal tax credits, he asserted. The lack of cheap models also persuaded consumers to stay away.

“EV sales will go up next year, but there are challenges,” he said.

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(NEW YORK) — Wildfire smoke bathed New York City’s front-line workers in fumes, atmospheric rivers forced hundreds of thousands of California homes into darkness, and hurricane Idalia battered tourism in Florida.

Natural disasters nationwide in 2023 focused attention on the life-or-death stakes of climate change but also underscored a grave risk of a different type: economic distress.

A landmark report released by the federal government last month put a price tag on extreme weather events, saying they impose nearly $150 billion in costs for the United States each year.

Those losses fall disproportionately on low-income and historically marginalized people, worsening inequality, the Fifth National Climate Assessment found.

While the economic consequences of climate change became more clear this year, the response from companies, economic policymakers and private investors was mixed, analysts told ABC News.

The largest climate legislation in the nation’s history, the Inflation Reduction Act, or IRA, helped unleash a wave of clean energy projects and record sales of electric vehicles, some experts said.

However, a backlash against environmental, social and governance investing, or ESG, brought a decline in financing for funds focused on those issues. Meanwhile, the U.S. produced a record amount of oil, even though the burning of fossil fuels makes up a key driver of climate change, experts added.

“There are reasons to be both optimistic and pessimistic,” Glenn Rudebusch, a former economist at the Federal Reserve, told ABC News. “Policymakers have made some slow, halting progress. But progress has been made.”

This year marked the first since the IRA took effect, offering tax credits meant to incentivize private investment in clean energy, such as wind and solar, and, in theory, boost U.S. production of renewables.

Roughly 280 clean energy projects representing $282 billion of investment were announced over the measure’s first year, Goldman Sachs found in a report in October. In all, the study said, such projects created about 175,000 jobs.

New initiatives included a battery manufacturing plant in Georgia, a solar complex in Alabama and the expansion of a wind turbine facility in Colorado, American Clean Power, an industry group representing green energy companies, said in a report last December.

“The uptake has been vastly greater than what the Biden White House anticipated,” Robert Stavins, a professor of energy and economic development at Harvard University, told ABC News.

Alongside the growth of its clean energy industry, however, the U.S. set a record for oil output this year. As of December, the country was on pace to increase its supply of oil by an average of 1.4 million barrels per day, according to the International Energy Agency, a government group.

The added supply puts downward pressure on gasoline prices but worsens climate emissions.

“This transition is rapidly accelerating on the renewable side, but there’s a stubborn entrenchment of fossil fuel production,” Dave White, director of the Global Institute of Sustainability and Innovation at Arizona State University, told ABC News. “This is a tension playing out in the U.S. energy sector.”

The surge of investing in clean energy also came alongside a sharp decline of ESG financing, a major source of private-sector funds for some green businesses.

Prominent Republican politicians, such as Florida Gov. Ron DeSantis, have assailed ESG as “woke” capitalism that prioritizes liberal goals over investor returns.

Some on the left have questioned the rigor of such funds, warning that they establish insufficient standards for companies seeking to qualify.

Funds worldwide categorized as “responsible investing” received $68 billion of net new deposits in 2023 through November, according to data from financial firm LSEG Lipper. That amount had fallen dramatically from $158 billion for all of 2022 and $558 billion for all of 2021.

“Over the course of 2023 we really saw a culmination of the backlash against ESG,” Robert Jenkins, global head of investment and wealth for LSEG Lipper, told ABC News. “This is not going to be helpful broadly for the world to reach [climate] goals.”

However, Jenkins added, the criticism has spurred a shift toward more sophisticated criteria for evaluating the environmental impact of a given business and assembling funds that reflect the values sought by investors.

“Good evolutionary things are happening when we look at this space,” Jenkins said.

Looking ahead, the analysts centered their attention on the 2024 presidential election. The outcome of that contest could ultimately propel green investment and galvanize corporate action, or reverse some of the recent progress, some experts said.

“It really requires another election to see where things are going,” Rudebusch said.

 

 

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(LOS ANGELES) — With the minimum wage in California increasing to $20 an hour for fast food workers in 2024, some Pizza Hut franchisees say they’re preparing to eliminate jobs as well as delivery options for customers.

As first reported by ABC News Los Angeles station KABC, two major Pizza Hut franchisees with restaurants in Orange, Los Angeles, Riverside, San Bernardino and Ventura counties are planning layoffs that would impact 1,200 workers.

The mass layoffs would also reportedly impact another 800 workers at Pizza Hut locations in Sacramento, Central California, Southern Oregon, and the Reno-Tahoe area, according to KABC.

The cuts would eliminate the franchisees’ delivery services for customers in those locations, they said. Customers will instead have to rely on services like Uber Eats or DoorDash.

“Pizza Hut is aware of the recent changes to delivery services at certain franchise restaurants in California,” a company spokesperson said Thursday. “Our franchisees independently own and operate their restaurants in accordance with local market dynamics and comply with all federal, state, and local regulations, while continuing to provide quality service and food to our customers via carryout and delivery.”

The chain, which is owned by Yum! Brands, said access to delivery would continue to be available via the Pizza Hut mobile app, website and phone ordering.

Other fast food companies including KFC and Taco Bell did not immediately respond to ABC News’ request for comment.

The wage legislation, AB 1228, which was signed into law by California Gov. Gavin Newsom in late September, is the catalyst for this decision by operators, the franchisees say.

The new law goes into effect in April and will boost minimum wage to $20 per hour for fast food workers, $4 more than the state minimum wage of $16 that will be effective Jan. 1.

Other fast food companies, including McDonald’s and Chipotle, previously said the new law would impact the respective chains’ operating costs and could potentially change menu pricing for customers.

Although a decision has not been made official, Chipotle CEO Jack Hartung said on a November earnings call that the pricing at the popular fast-casual Mexican restaurant would have to change “to take care of the dollar cost” and cover the new margins.

“We are definitely going to pass this on. We just haven’t made a final decision as to what level yet,” he said.

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(NEW YORK) — Amazon will begin displaying advertisements in movies and TV shows on its Prime Video streaming service next month, the company said in an email to subscribers this week viewed by ABC News.

Customers will be offered an ad-free alternative for an additional $2.99 per month, the company added.

“This will allow us to continue investing in compelling content and keep increasing that investment over a long period of time,” the company said. “We aim to have meaningfully fewer ads than linear TV and other streaming TV providers.”

The notice to customers follows an announcement in September setting out plans to add advertisements to video content on Prime in early 2024.

The ads will be introduced in the U.S., U.K., Germany and Canada in early 2024, followed by France, Italy, Spain, Mexico, and Australia later in the year, the company said in the announcement.

The move at Amazon comes amid an industrywide shift toward the inclusion of advertisements across major streaming services.

Netflix — the most popular streaming service worldwide — made headlines last year when it launched a subscription tier with advertisements for $6.99 per month.

Max, which launched an ad-supported tier in 2021, offers the option for $9.99 per month.

A Prime Video subscription costs $8.99 per month, or customers access the service as a complimentary offering along with the company’s Prime membership service.

The introduction of advertisements in Prime video content will take place on Jan. 29, the company said.

Prime Video is often one of the top two drivers of customer sign-ups for the company’s Prime membership service, Amazon CEO Andy Jassy said on an earnings call last month.

“We also have increasing conviction that Prime Video can be a large and profitable business in its own right,” Jassy said.

Last year, Amazon closed its $8.5 billion acquisition of MGM, a decades-old Hollywood movie studio. As part of the deal, the company acquired global TV rights to the “Lord of the Rings” franchise.

The company debuted an initial season of “The Lord of the Rings: The Rings of Power” in September 2022 and a second season of the fantasy series is forthcoming.

 

 

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(NEW YORK) — Consumer spending grew solidly this holiday season, rebuking concerns of a slowdown and reinforcing positive signals about the U.S. economy as it approaches the end of a tumultuous year.

Buying among shoppers rose 3.1% over the holidays compared to the same period last year, according to data released on Tuesday by Mastercard SpendingPulse, which measures in-store and online purchases from Nov. 1 to Dec. 24 across all forms of payment. The data is not adjusted for inflation.

Robust spending during the holidays appears to have dispelled concern among some economists of a decline. Their fears centered on a drop-off in pandemic-era savings and a rise in borrowing rates for consumer loans such as credit cards.

But a significant reduction of inflation over the past year has delivered some relief for consumers. Strong hiring and resilient wage growth have bolstered shoppers, who account for nearly three-quarters of U.S. economic activity.

“This holiday season, the consumer showed up, spending in a deliberate manner,” Michelle Meyer, chief economist at the Mastercard Economics Institute, said in a statement.

“The economic backdrop remains favorable with healthy job creation and easing inflation pressures, empowering consumers to seek the goods and experiences they value most,” Meyer added.

Spending over the holidays surged fastest at restaurants, where buying amounted to 7.8% growth compared to the same period last year, Mastercard SpendingPulse data showed. The expansion of spending also grew markedly in apparel, which saw a 2.4% rise.

Purchases of electronics and jewelry, however, shrunk compared to the same stretch of 2022, the data showed.

Retail sales grew at a breakneck pace online, surging more than 6%. By contrast, the data showed, in-store purchases grew at a sluggish pace of 2%. The majority of purchases took place in person, resulting in the 3.1% overall growth rate, Mastercard SpendingPulse said.

The rush of holiday shopping aligns with a burst of optimism among observers following robust sales on Black Friday.

Consumers spent a record $9.8 billion online on Black Friday, which marked a 7.5% increase over the year prior, according to Adobe Analytics.

Shopper visits, a metric used to assess in-person sales, rose 4.6% compared on Black Friday compared to a year ago — a rate that nearly doubled the average overall increase in foot traffic this year up to that point, retail data firm Sensormatic Solutions said.

A host of key economic indicators marked a good omen for consumers as they entered the holiday season. The unemployment rate stood near a 50-year low, wage growth outpaced inflation and savings remained resilient for upper- and middle-income households.

The U.S. economy grew at an annualized pace of 4.9% over three months ending in September, more than doubling growth in the previous quarter, a government report in October showed.

Still, some warning signs threw the fate of the holiday retail season into doubt.

Credit card debt climbed to a record high in the third quarter of 2023, surging nearly 5% from the previous quarter and leaving a growing share of borrowers late on payments, a Federal Reserve report last month showed.

The growing debt emerged alongside a spike in borrowing costs for loans from credit cards to mortgages that stem from interest rate hikes at the Federal Reserve.

Since last year, the Fed has raised its benchmark interest rate at the fastest pace in more than two decades, seeking to slash price hikes by slowing the economy and reducing consumer demand.

But the central bank may soon reverse its policy of raising rates, according to a forecast released after the Fed’s meeting earlier this month.

Inflation has fallen significantly from a peak of about 9% last summer but remains more than a percentage point higher than the Fed’s target.

Members of a decision-making committee at the Fed expect to reduce rates next year amounting to three quarter-point cuts, the central bank said.

Speaking at a press conference in Washington, D.C., Fed Chair Jerome Powell cautioned that the exact course of interest rates remains unclear.

“Inflation has eased from its highs and this has come without the significant increase in unemployment. That’s very good news,” Powell said.

“But inflation is too high, ongoing progress in bringing it down is not assured, and the path is uncertain,” he added.

 

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(NEW YORK) — Greg Iwinski, a late-night TV writer, walked off the job this year amid a dramatic surge of workers going out on strike — and he says the trend made its presence felt at the bargaining table.

“The ammunition that a company has, whether it’s an automaker or a TV studio, is telling you that a strike won’t work — your collective action won’t help,” Iwinski, who helped broker an agreement that delivered significant pay increases for 11,000 Hollywood writers, told ABC News.

A slew of contract breakthroughs over the course of 2023 dispelled that notion, Iwinski said. “If you hold out long enough, you will break them and win,” he said.

The Alliance of Motion Picture and Television Producers, or AMPTP, which negotiated on behalf of the TV studios, did not immediately respond to ABC News’ request for comment.

Iwinski was among more than 500,000 workers who went out on strike nationwide in 2023, nearly tripling the figure recorded over the same period a year earlier, according to data through the end of October from Cornell University’s School of Industrial and Labor Relations shared with ABC News.

The sharp escalation in worker protests arose from widespread dissatisfaction with sluggish wage gains, which in many cases had failed to keep up with rapid price hikes, experts told ABC News.

Emboldened by a tight job market and growing approval of unions, workers took a step that often frightens employees concerned about losing their livelihoods, they added.

“This is a demonstration of the anger that American workers have about their position in the economy,” Erik Loomis, a labor professor at the University of Rhode Island and author of “A History of America in 10 Strikes,” told ABC News.

“We’re in an era where people are seeing the strike as a tool once again,” Loomis added, noting that the number of workers on strike this year was last seen in the early 1980s.

Labor militancy will continue in 2024 since worker disaffection remains, experts added, though the potential for fewer contract disputes at large unions could result in a decline in the number of workers walking off the job.

Over a four-decade period beginning in the late-1970s, wages largely flattened, increasing 0.2% per year on an inflation-adjusted basis for a typical worker, a Harvard Business Review analysis found.

The cumulative effects of sluggish wage growth collided with sky-high inflation in recent years, leaving workers frustrated over diminished spending power, Johnnie Kallas, project director of Cornell University’s Labor Action Tracker, told ABC News.

“The root cause is the pent up pressure of long-term wage stagnation,” Kallas said. “That has really come home to roost.”

This year, that upswell of anger coincided with contract disputes involving some of the nation’s largest unions.

SAG-AFTRA, a union representing roughly 160,000 actors, went out on strike for nearly 120 days, culminating in a 3-year contract that raised wages by roughly 14%.

The United Auto Workers, a union representing 150,000 employees at major car markers, ended a weekslong strike after a set of agreements that delivered a roughly 25% raise over a 4-year period.

Roughly 75,000 health care workers at Kaiser Permanente won major wage gains after a work stoppage, as did thousands of TV writers like Iwinski.

While the number of workers on strike increased significantly this year, the total work stoppages remained roughly flat. Through Dec. 20, there were 405 strikes in 2023 compared with 407 strikes over that same period a year prior, according to Cornell University’s Labor Action Tracker.

The major uptick in striking workers this year owes in part to the incidental confluence of contract deadlines at large unions, Thomas Kochan, an emeritus management professor at the Massachusetts Institute of Technology, told ABC News.

“Some of it is contingent because we did have a significant number of larger contracts,” Kochan said, acknowledging that the scale of work stoppages could ebb next year.

Still, the certainty of some strikes, as well as the credible threat of others, should deliver workplace improvements for workers, Kochan added.

“It’s clear that rank-and-file workers are prepared to strike,” Kochan said.

Potential workplace disputes dot next year’s calendar, even if few approach the size of the high-profile confrontations of 2023.

Contracts covering 60,000 film and television crew workers are set to expire in July; while an agreement concerning 220,000 postal workers will come up for renewal in September 2024, according to an analysis from the pro-worker outlet Labor Notes.

“I don’t know if we’ll see the same number of high-profile strikes next year but I think we’re still going to see a lot of strikes,” Lynne Vincent, a professor of industrial and labor relations at Syracuse University, told ABC News.

“2023 set the stage that things are different,” Vincent added. “That conversation will continue in 2024.”

 

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