Unions made 2023 the year of the strike. What will happen next?

Unions made 2023 the year of the strike. What will happen next?
Unions made 2023 the year of the strike. What will happen next?
ArtistGNDphotography/Getty Images

(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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Attacks on freight ships in the Red Sea could increase inflation. Here’s how.

Attacks on freight ships in the Red Sea could increase inflation. Here’s how.
Attacks on freight ships in the Red Sea could increase inflation. Here’s how.
Chris Sattlberger/Getty Images

(NEW YORK) — Inflation is falling toward normal levels, according to fresh data released Friday from the Federal Reserve’s preferred measure, the Personal Consumption Expenditures price index.

The information is the latest in a string of good news for price increases, but a major disruption of global trade could threaten that progress, some experts said.

Attacks on ships along a key route through the Suez Canal have forced freight companies to divert deliveries, sharply escalating shipping costs and risking higher prices for everything from oil to electronics to furniture, they said.

“If this continues, we’re going to see increased shipping costs stacked onto the price of goods,” Rob Handfield, professor of operations and supply chain management at North Carolina State University, told ABC News.

“Just when we see inflation under control, hopefully this won’t be another force to increase it again,” Handfield added.

Other experts, by contrast, downplayed the implications for prices, saying the shipping industry could weather the fallout with little effect on U.S. consumers.

Since October, Yemen-based Houthi militias have launched over 100 attacks targeting at least 10 merchant vessels, according to a statement from the Pentagon.

Indicating the significance of the disruption, the U.S. launched an international task force this week aimed at safeguarding the area from such attacks.

The Houthis have targeted commercial ships traveling through the Red Sea as they approach the Suez Canal, which the U.S. Naval Institute says facilitates roughly 12% of global shipping traffic.

Major shipping companies MSC, Maersk and Hapag-Lloyd, as well as British oil giant BP, have responded to the attacks by diverting their ships to alternative routes.

Freight re-routed from the Suez Canal typically travels around the southern tip of Africa, extending the length of the trip by roughly 30%, Jason Miller, a professor of supply-chain management at Michigan State University, told ABC News

The increased travel time has strained the supply of ships, since longer routes mean fewer ships are available to carry goods at any given time, Miller said. That bottleneck, he added, has driven up short-term rates known as spot prices, which companies negotiate for the transport of their goods.

“We’re starting to see those spot prices increase very rapidly,” Miller said.

Prices have reached as high as $10,000 for a 40-foot container ship, up from roughly $2,400 last week, CNBC reported on Thursday.

The disruption holds significant implications for oil prices, since the Suez Canal is an important shipping route for crude oil coming from the Middle East, experts said.

Oil prices play a direct role in the price of gasoline and factor indirectly into costs associated with the delivery of goods.

The price of Brent Crude oil, a key industry metric, has risen about 3% this week.

The crisis in the Red Sea could also increase prices for a range of consumer products imported from countries in Southeast Asia, such as India and Vietnam, since those goods travel through the Suez Canal, some experts said.

Top products imported to the U.S. from India so far this year include solar panels, bed linens, wooden furniture, shrimp and honey, according to U.S. census data reviewed by ABC News.

“This could trigger a domino effect that will push prices up eventually,” Christopher Tang, a professor at the UCLA Anderson School of Management, who focuses on supply chains, told ABC News.

Still, some experts cautioned that the trade disruption could ultimately have little or no effect on U.S. prices.

The high-traffic holiday season is nearly over, Miller said, meaning those products have already been shipped. Plus, he added, imported goods make up only 11% of U.S. consumer spending, citing data from the San Francisco Federal Reserve.

“This could have a very minor impact,” Miller said.

Even so, the experts acknowledged that the outcome of the conflict in the Red Sea remains unclear. A wider regional war could intensify the potential effect on prices, while a speedy resolution of the Houthi attacks could ease the inflation risk, they said.

“It’s too early to make a prediction of how this plays out,” Miller said. “There’s just so much uncertainty.”

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Postage stamp prices scheduled to increase in 2024

Postage stamp prices scheduled to increase in 2024
Postage stamp prices scheduled to increase in 2024
Forever Stamp display at Costco, Queens, New York on March 1, 2023. UCG/Universal Images Group via Getty Images, FILE

(NEW YORK) — While we welcome the new year, we’ll also be welcoming an increase in the cost of mailing letters and packages.

Starting Jan. 21, the U.S. Postal Service will increase stamp prices from 66 cents to 68 cents for letters weighing one ounce or less.

Package shipping costs are also slated to increase by nearly six percent, with Priority Mail Express costs going up by 5.9 percent, Priority Mail increasing 5.7 percent, and Ground Advantage going up 5.4 percent.

The price hikes, the fifth increase in two years, are part of the Postal Service’s ten-year ‘Delivering for America’ plan to raise rates and recover from plunging profits – a projected $160 billion loss over the next ten years.

Some of the cost-cutting measures have already translated into slower deliveries, while the increased prices will more significantly affect residents in the non-contiguous states and territories, like Alaska and Hawaii. Those areas will see an increase of more than nine percent, prompting lawmakers like Alaska Sen. Dan Sullivan to ask Postmaster General and USPS CEO Louis DeJoy to reconsider the plan.

“No state, including Alaska, should be punished by our own federal government because of geography,” Sullivan said in part in a statement Tuesday. “These hikes have the potential to severely negatively impact Alaskans – already reeling from inflation – who are more reliant on the USPS for basic goods and services than other Americans.”

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Wells Fargo workers form first union at a US megabank

Wells Fargo workers form first union at a US megabank
Wells Fargo workers form first union at a US megabank
Wells Fargo logo is seen on the building in Los Angeles, United States. Credit: NurPhoto/Getty Images

(NEW YORK) — Workers at a Wells Fargo branch in New Mexico voted to form a union late Wednesday, becoming the first employees at a U.S. megabank to unionize.

Employees at an Albuquerque location favored unionization by a margin of 5-3, establishing a small outpost for organized labor at a company that operates more than 4,000 branches and employs over 225,000 workers in the U.S.

The union breakthrough arrives as Wells Fargo faces a wider labor campaign. Two branches, one in Daytona Beach, Florida, and another in Atwater, California, have filed petitions for union representation that could trigger balloting, according to information from the National Labor Relations Board shared with ABC News.

In response to ABC News’ request for comment, a Wells Fargo spokesperson said the company opposes unionization but acknowledged that the decision lies with employees.

“We respect our employees’ rights to vote for union representation,” the spokesperson said. “At the same time, we continue to believe our employees are best served by working directly with the company and its leadership.”

The spokesperson pointed to a five-employee branch in Bethel, Alaska, which withdrew a petition for unionization ahead of a vote scheduled for Thursday.

“We are pleased with this development and look forward to continuing to directly engage with our employees,” the spokesperson said.

The Communication Workers of America, the union that’s organizing Wells Fargo employees, did not immediately respond to ABC News’ request for comment.

Seven worker complaints over alleged illegal anti-union activity carried out by Wells Fargo remain under review at the NLRB, the government agency said in a statement to ABC News.

The charges cover a range of claims alleging illegal retaliation, discipline and alteration of the terms of employment, the NLRB said. The complaints span five Wells Fargo facilities in Texas, Iowa, Arizona and California.

At a store in Salt Lake City, Utah, Wells Fargo settled over a union-related worker complaint, agreeing to not engage in coercive statements, surveillance or interrogation, the NLRB said.

In a statement last month about two of the worker complaints, the Communication Workers of America criticized Wells Fargo for the alleged conduct.

“We are organizing a union to build a better Wells Fargo for workers and customers, yet the bank continues to try to resist change,” the CWA said.

“Rather than join us in our efforts to address the toxic culture that has led to scandal after scandal and cost the bank billions of dollars in fines, Wells Fargo has chosen to break the law by attempting to silence us,” the union added.

When asked about worker complaints of illegal anti-union conduct during a Senate hearing earlier this month, Wells Fargo CEO Charles Scharf reaffirmed the company’s opposition to unionization and defended its freedom to discuss the subject with workers.

“We believe it’s best that we have a direct relationship with those employees, and we do intend to exercise our right to speak with them to make sure they make an informed decision,” Scharf said.

The union drive at Wells Fargo comes amid an uptick in labor campaigns this year, including efforts involving employees at some of the nation’s largest companies, such as Starbucks and Amazon.

Workers filed nearly 2,600 petitions for union representation in 2023, marking an increase of 3% from the previous fiscal year, the NLRB said in October.

Charges filed by workers over illegal anti-union activity rose 10% in 2023 compared to the same period last year, the NLRB added.

The nascent unionization at Wells Fargo aligns with a surge in organizing across the labor movement, Harry Katz, a professor of collective bargaining at Cornell University, told ABC News.

“It’s further evidence of the growing interest in unionization, even among workers that haven’t traditionally been organized in the U.S.,” Katz said.

Katz cautioned, however, that the workers could face difficulty reaching an agreement with Wells Fargo on new terms for the workplace. All of the thousands of Starbucks workers across more than 300 unionized stores, for instance, remain without a single union contract.

“Even if you unionize, it doesn’t mean you have bargaining power,” Katz said. “But this is still noteworthy.”

 

Copyright © 2023, ABC Audio. All rights reserved.

General Mills cereal sales drop as demand for pricey brand names diminishes

General Mills cereal sales drop as demand for pricey brand names diminishes
General Mills cereal sales drop as demand for pricey brand names diminishes
Boxes of General Mills cereal are displayed on a grocery store shelf on Dec. 20, 2023 in San Anselmo, Calif. (Justin Sullivan/Getty Images)

(NEW YORK) — Breakfast foods maker General Mills, the brand behind familiar cereals like Cheerios, Lucky Charms and Wheaties, may not be a consumer favorite anymore as the company experiences slowing sales and increasing price hikes.

In the company’s latest quarterly financial report, General Mills’ CEO Jeff Harmening blamed the drop on “stronger-than-anticipated value-seeking behaviors,” meaning that people are finding cheaper alternatives to high-priced cereals.

The pandemic turned around what had until then been a steady slide in cereal sales, as everyone ate breakfast at home. During 2020, General Mills reported a 5% boost in sales, but sales in 2021 fell 8.7% and nearly a further 4% last year.

General Mills also raised its prices in order to offset pandemic-related supply chain issues and inflation.

Now that Americans are once again out and about, and as a result making breakfast choices outside the cereal aisle, they’re less inclined to pay premium prices for their usual cereal. Instead, sales of cheaper generic store brands spiked 20%.

General Mills has now forecast that the company’s sales may not be able to return to its usual volume until next summer, at the soonest.

On top of tepid consumer demand for the brand-name cereals, shoppers are becoming increasingly aware of how much bang they are actually getting for their buck.

“Many brands are shrinking the size or weight of their products and charging the same price,” smart shopping expert Trae Bodge told ABC News’ Good Morning America.

She encouraged shoppers to always check and compare unit prices when selecting items off the shelf at a grocery store.

“‘Shrinkflation’ is a term used to describe implicitly increasing the price of an item by slightly decreasing the amount or quantity in a package,” Steve Reed, an economist at the Bureau of Labor Statistics, previously told ABC News.

While the Bureau of Labor Statistics (BLS) doesn’t have any evidence on why this occurs, or insight into seller strategies, Reed said, “the conventional explanation would be that consumers may not notice small decreases in size or quantity, or react less negatively to them compared to an explicitly higher price.”

The BLS does attempt to compute for shrinkflation, however, in its Consumer Price Index, which measures what consumers pay for everyday goods and services and is often used as an inflation barometer, according to Reed.

Copyright © 2023, ABC Audio. All rights reserved.

Rite Aid banned from use of facial recognition in stores after thousands of false matches

Rite Aid banned from use of facial recognition in stores after thousands of false matches
Rite Aid banned from use of facial recognition in stores after thousands of false matches
Westend61/Getty Images

(NEW YORK) — Drugstore chain Rite Aid has accepted a ban of its use of facial recognition software for five years due to false accusations stemming from the technology that disproportionately affected people of color, the Federal Trade Commission said.

The retailer failed to impose reasonable precautions in its deployment of facial recognition, resulting in thousands of false-positive matches with customers accused of shoplifting and other inappropriate behavior, a legal complaint from the FTC said.

Acting on false-positive alerts, employees followed consumers around its stores, searched them, accused them of wrongdoing in front of friends and family, and called the police to remove them, the complaint said.

The company also chose not to inform customers of its use of facial recognition and discouraged employees from doing so, the FTC said.

“Rite Aid’s reckless use of facial surveillance systems left its customers facing humiliation and other harms, and its order violations put consumers’ sensitive information at risk,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in a statement.

“Today’s groundbreaking order makes clear that the Commission will be vigilant in protecting the public from unfair biometric surveillance and unfair data security practices,” Levine added.

In a statement, the company said it was “pleased to reach an agreement” with the FTC. However, Rite Aid added: “We fundamentally disagree with the facial recognition allegations in the agency’s complaint.”

“Rite Aid’s mission has always been and will continue to be to safely and conveniently serve the communities in which we operate,” the company said.

In all, Rite Aid collected tens of thousands of images of individuals, many of which were low-quality, the complaint said, noting that the activity took place between 2012 to 2020.

Mistakes made by the company’s technology included false matches with an image collected thousands of miles away, as well as an incorrect positive result flagged at dozens of stores nationwide, the complaint added.

Rite Aid violated the terms of a 2010 agreement reached with the FTC after a finding that the company had failed to protect sensitive financial and medical information, the agency said.

The FTC issued a warning earlier this year that the company would be closely monitoring issues around the collection of data tied to individuals’ physical characteristics, the agency said.

In addition to complying with the five-year ban, Rite Aid said it will impose safeguards for future use of its surveillance systems.

Those safety measures include deleting photos previously collected by its facial recognition software, informing customers when their physical characteristics are entered into a store database and providing notice to customers about use of the technology at a given location.

 

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Chick-fil-A could soon open on Sundays in some locations

Chick-fil-A could soon open on Sundays in some locations
Chick-fil-A could soon open on Sundays in some locations
ivanastar/Getty Images

(NEW YORK) — The famously “closed on Sundays” chicken sandwich fast-food chain could soon be required to fire up the fryers and serve hungry travelers in some locations.

The New York State Assembly has put forth a new bill, known as the Rest Stop Restaurant Act, that would require food and beverage companies contracted to provide services along the Thruway and at the Port Authority in New York and New Jersey to stay open seven days a week.

Applegreen, an Irish convenience store chain with a portfolio of companies including Chick-fil-A, took over the leases of all Thruway Authority service areas in 2021. To date, Chick-fil-A has opened at seven Thruway service areas. The fast-food chain currently operates 2,988 restaurants across 48 states.

“While there is nothing objectionable about a fast food restaurant closing on a particular day of the week, service areas dedicated to travelers is an inappropriate location for such a restaurant,” the bill states, in part. “Publicly owned service areas should use their space to maximally benefit the public. Allowing for retail space to go unused one seventh of the week or more is a disservice and unnecessary inconvenience to travelers who rely on these service areas.”

The only exception from the seven-day-a-week operations mandate in the new legislation is for “temporary concessions such as farmers markets or local vendors.”

One of the bill’s sponsors, Assemblyman Tony Simone, spoke to ABC News Albany affiliate WTEN-TV about the importance of ensuring that New York State’s transportation facilities offer reliable food services.

“You know, we get hungry when we’re traveling. We may not like our brother-in-law or sister-in-law’s cooking and wanna get a snack on Christmas Eve,” Simone said. “To find one of the restaurants closed on the thruway is just not in the public good.”

WTEN also reports that a Thruway official who also spoke with them said that, regarding the bill, “all 27 service areas that were a part of the $450 million project were built with no toll or tax dollars and that Chick-fil-A already signed a 33-year contract with the Thruway.”

Simone clarified that “the Thruways are meant to serve New York travelers first,” adding that he thinks it’s “ridiculous” that a food provider would be “able to close on Sunday – one of the busiest travel days of the week.”

Simone and the other bill sponsors are currently seeking co-sponsors to help pass the legislation during the current assembly session in Albany.

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TGI Fridays boneless chicken bites recalled over possible plastic contamination

TGI Fridays boneless chicken bites recalled over possible plastic contamination
TGI Fridays boneless chicken bites recalled over possible plastic contamination
USDA.gov

(NEW YORK) — Approximately 26,550 pounds of frozen TGI Fridays boneless chicken bites products have been recalled due to possible contamination with “clear, hard plastic,” the U.S. Department of Agriculture’s Food Safety and Inspection Service announced.

“The problem was discovered when the firm notified FSIS that it had received consumer complaints reporting that clear, hard plastic was found under the breading of the boneless chicken bites,” according to the recall announced Friday.

Simmons Prepared Foods issued the recall on its 15-ounce cartons of Honey BBQ flavor chicken bites that were produced on Oct. 3 by the Arkansas-based food manufacturer.

The recalled products bear the lot code KL3K03 and have a Best By date of Dec. 26, 2024, located on the side of the carton. The items also have an establishment number “P-20287” inside the USDA mark of inspection.

There have been no reports of injury or illness due to consumption of the chicken bites.

Those concerned about illness or an injury are encouraged to contact a health care provider.

“FSIS is concerned that some product may be in consumers’ freezers. Consumers who have purchased these products are urged not to consume them. These products should be thrown away or returned to the place of purchase,” the agency said in the recall notice.

Click here to see the full product label images and details.

Simmons Prepared Foods did not immediately respond to ABC News’ request for comment.

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What could interest rate cuts mean for the 2024 election?

What could interest rate cuts mean for the 2024 election?
What could interest rate cuts mean for the 2024 election?
Javier Ghersi/Getty Images

(NEW YORK) — When the Federal Reserve recently signaled interest rate cuts next year, the stock market soared to record highs and analysts voiced sunny hopes of a “soft landing.”

Arriving less than a year before the presidential contest, the announcement raised a separate consideration: What the rate cuts could mean for President Joe Biden’s reelection bid.

Analysts who spoke to ABC News said research shows that a strong economy benefits an incumbent presidential candidate, since voters factor their financial well being into an assessment of the leader’s job performance.

But the implications of interest rate cuts are more complicated, the analysts added.

“A good economy benefits an incumbent,” Ray Fair, a professor at Yale University who oversees a model that forecasts elections based on economic conditions, told ABC News. “A bad economy goes the other way.”

“How the economy does depends in part on what the Fed does, but it depends on other things, too,” Fair added.

He declined to comment on how this dynamic could be applied to the current presidential race.

In theory, lower interest rates make borrowing less expensive for businesses and consumers, propelling companies to invest in new projects and everyday people to stretch for bigger purchases. That all should help propel economic growth and buoy consumer optimism.

In turn, a major economic surge could benefit Biden, dispelling concern about a recession and improving the livelihoods of everyday people, some analysts said.

However, the benefits of forthcoming rate cuts could prove more limited, since rate moves take hold after a period of delay that can last months, some analysts said. Further, economic growth may not yield sufficient improvement in people’s direct experience, leaving sentiment about the economy unchanged, they added.

The Biden campaign did not immediately respond to a request for comment.

By some key measures, the U.S. economy demonstrates good health: The unemployment rate hovers near a 50-year low, economic growth surged in a recent three-month period and inflation stands well below a peak last year.

Still, many voters find fault in Biden’s stewardship of the economy. Nearly two-thirds of Americans disapprove of Biden’s handling of the economy, an ABC News/Ipsos poll found in August.

The economy, therefore, poses a challenge for Biden, some analysts said, noting that the policy plans at the Fed could alleviate some of the difficulty.

Even before the Fed institutes a potential rate cut, the announcement of its plans alone has delivered economic benefits, Joseph Gagnon, fellow at the nonprofit Peterson Institute and a former senior economist at the Federal Reserve, told ABC News.

The central bank’s policy shift in recent days reduced yields on the all-important 10-year treasury bond. Lower bond yields make borrowing less costly for consumers on items big and small.

Last week, for instance, mortgage rates fell below 7% for the first time since August, Freddie Mac said in a statement.

“Bond yields fell and that actually does stimulate the economy,” Gagnon said.

The central bank’s pivot to rate cuts could also do away with a potential political liability for Biden: rate increases.

“That’s the absence of a negative political headwind for the Biden administration,” Steve Boms, founder and president of Washington, D.C.-based consulting firm Allon Advocacy, told ABC News.

The most recent Democratic presidential candidate who failed to win reelection, Jimmy Carter, lost his bid amid a historic series of rate hikes at the Fed.

Still, some analysts warned that potential rate cuts could have minimal impact on Biden’s reelection hopes, since voters already disapprove of his handling of the economy and potential improvement could prove too little or too late to change that sentiment.

The challenge stems in part from the conundrum surrounding Biden, in which strong economic measures have not translated into approval of his job, Boms said.

“One of the primary motivations, typically, of the Fed reducing rates is to bolster employment and reduce unemployment,” Boms added. “But in the current situation we’re already at historically low unemployment levels.”

Moreover, the economic benefits brought by rate cuts often arrive months after the Fed imposes the policy, Gagnon said. If the Fed begins to cut rates midway through next year, he added, the economic improvement may not manifest itself ahead of election day.

“The window is closing,” Gagnon said.

When asked about next year’s election at a press conference in Washington, D.C. on Wednesday, Fed Chair Jerome Powell said, “We don’t think about politics.”

“We’ll do the things that we think are right for the economy at what we think is the right time,” Powell added.

However, the Fed’s fight against inflation carries significant implications for the presidential election, Fair wrote in an article in February.

Over the coming months, Fair said, “the media will be dominated by stories about political candidates, debates, poll results, [and] campaign spending issues.”

He added: “But behind the scenes is what really matters, namely how successful will the Fed be?”

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Nikola founder Trevor Milton sentenced to 4 years in jail for fraudulent claims about electric vehicles

Nikola founder Trevor Milton sentenced to 4 years in jail for fraudulent claims about electric vehicles
Nikola founder Trevor Milton sentenced to 4 years in jail for fraudulent claims about electric vehicles
WIN-Initiative/Neleman/Getty Images

(NEW YORK) — Nikola founder Trevor Milton was sentenced to four years in prison Monday due to fraudulent claims about his electric vehicle company.

In court Monday, Milton portrayed himself as a generous and honest yet unsophisticated businessman who grew up milking cows, lacked a college degree and did not mean to defraud investors in his electric truck company.

“My intent was not to harm others,” Milton told Judge Edgardo Ramos. “Let me have probation.”

Ramos did not comply with Milton’s request, sentencing him to four years in prison, a $1 million fine, forfeiture of a ranch Milton purchased with ill-gotten gains and restitution to victims.

Milton was convicted of wire fraud and securities fraud after prosecutors said he embellished the success of his company and deceived retail investors, who they said lost more than $660 million combined.

One model of the Nikola electric pickup truck called the Badger, lacked certain parts, such as airbags and an operable HVAC, and many of the interior lights were not operable and were merely backlit, prosecutors said.

Prosecutors described Milton’s business practices as a “sustained scheme to take advantage of individual, non-professional investors” in order to inflate Nikola’s stock price and enrich himself.

“Milton over and over again exaggerated or outright lied about Nikola’s success in a way that misled investors about the risks and likely returns of their investments,” prosecutors said.

The defense claimed investors lost no money from Nikola and asked for a sentence for Milton that did not include prison time.

In July 2021, Milton was the at the center of a nearly 50-page indictment, in which prosecutors accused Milton of preying on vulnerable retail investors who had turned to trading after losing income due to the pandemic. In some cases, these victims lost their retirement savings, authorities said, as they outlined his web of false promises related to an electric truck that was never operable.

This is a developing story. Please check back for updates.

 

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