(NEW YORK) — Boeing has announced it is replacing the head of its 737 Max program as part of a reshuffling of the company in the wake of the much-publicized incident of a door plug blowing out of an Alaska Airlines flight last month.
Katie Ringgold will be replacing Ed Clark – an 18-year veteran of the company – as vice president and general manager of the 737 Max program and Renton site, Boeing said.
The company also announced other leadership changes.
Boeing Commercial Airplanes President Stan Deal said, “I am announcing several leadership changes as we continue driving BCA’s enhanced focus on ensuring that every airplane we deliver meets or exceeds all quality and safety requirements. Our customers demand, and deserve, nothing less.”
This is a developing story. Please check back for updates.
(WASHINGTON) — The Biden administration will begin automatically relieving student debt for another 153,000 people on Wednesday, bringing the total number of Americans approved for debt relief to nearly 3.9 million.
President Joe Biden will tout the new debt relief in a speech from Los Angeles, and thousands of people will receive an email from the president informing them that they now qualify for relief.
“Congratulations — all or a portion of your federal student loans will be forgiven because you qualify for early loan forgiveness under my Administration’s SAVE Plan,” the email from the president will read.
The people receiving debt relief beginning Wednesday are those who enrolled in the newest student loan payment plan, called the SAVE Plan, which the Department of Education calls the most affordable plan for the majority of borrowers.
Anyone enrolled in the SAVE Plan who took out less than $12,000 in initial loans and has been paying them down for the past 10 years or more will have them forgiven.
“This plan reflects our unapologetic commitment to deliver as much relief as possible to as many borrowers as possible, as quickly as possible,” Education Secretary Miguel Cardona said on a call with reporters on Tuesday.
Roughly 7.5 million Americans are enrolled in the SAVE Plan, which just launched this past summer.
The 153,000 who are getting automatic relief starting Wednesday are the first tranche of borrowers to benefit from this aspect of the plan. Moving forward, anyone else who enrolls in the plan and meets this criteria will also get debt relief.
As of Wednesday, there are many Americans who could actually qualify for this debt relief but aren’t enrolled in the SAVE Plan, something the Biden administration says it’s working to improve outreach on as an estimated 27 million Americans are currently in repayment for student loans.
Who are the other 3.7 million people who have been approved for debt relief under Biden?
At least 513,000 borrowers have, so far, been approved for debt relief after filing for a total and permanent disability, while 1.3 million borrowers have been approved for debt relief because it has been deemed their college defrauded them.
Some of the most well-known debt relief programs under Biden, however, have been the fixes to the program for people working in public service and to income-driven repayment plans.
The Biden administration has now processed relief for more than 793,000 borrowers through fixes to the Public Service Loan Forgiveness program (PSLF), which allows for debt relief for people in jobs like firefighting, nursing and teaching after 10 years of continuous payment.
The other large tranche of borrowers to receive relief are those enrolled in income-driven repayment plans, which allow people to pay a certain percentage of their income towards their loans for 20 or 25 years before their debts are forgiven.
Around 930,500 borrowers have been identified as paying for their allotted time, but not getting relief. They have now had their debts approved for relief.
The PSLF and income-driven repayment fixes are considered minor fixes to an already-broken system in the student loan apparatus that the Biden administration has now addressed.
They are not debt relief to the tune of $10,000 to 20,000 in blanket forgiveness for anyone who makes below a certain income, as Biden hoped to do last year before the Supreme Court determined his plan was unlawful.
Still, the Biden administration continues to push efforts on debt relief while on the campaign trail, something Biden himself will do on Wednesday in Los Angeles.
“These actions have allowed nearly 4 million people to afford other expenses in their lives — buy homes, start businesses, pursue dreams that they had to put on hold because of their student loans,” Natalie Quillian, White House Deputy Chief of Staff, said on a call with reporters Tuesday.
“Now, because of the president and the Biden Harris administration, millions of borrowers and their families are no longer weighed down by the burden of student debt,” she said.
(NEW YORK) — Capital One’s decision to acquire Discover could establish a new megafirm that shakes up the credit card industry.
The move may hold long-term implications for credit card holders, regardless of whether they bank with Capital One or shop with Discover, experts told ABC News.
If approved by shareholders and regulators, the merger would leave Capital One in a stronger market position, potentially allowing the company to offer more attractive bonuses and perks, some experts said. The potential challenge to industry juggernauts Visa and Mastercard, meanwhile, could elicit innovations and fresh offerings for consumers industrywide, they said.
The deal, however, could also have an adverse effect for consumers, leaving the industry with fewer competitors overall and easing pressure on companies to attract customers with favorable terms, some experts and consumer advocates said.
“It could be a little from column A and a little from column B,” Sara Rather, a credit card expert at NerdWallet, told ABC News, noting that the move may improve conditions for consumers in some ways and damage them in others.
“On the one hand, it means less competition and on the other hand it’ll potentially propel Capital One into a bigger entity that has even more innovation and product offerings. And the other companies are paying close attention,” Rather added.
Capital One did not immediately respond to ABC News’ request for comment. Neither did Discover.
The deal arrives at a precarious moment for credit card holders. Credit card debt stands at a new record high $1.13 trillion, according to data released earlier this month by the Federal Reserve Bank of New York.
Credit card balances increased by $50 billion in the fourth quarter of 2023 alone, a 4.6% jump from the previous quarter, the report said.
Experts who spoke to ABC News said the merger would not carry short-term impacts for customers at Capital One or Discover, or those at rival firms, since the two companies at issue may take over a year to finalize the agreement.
“This isn’t going to have any effect on consumers in the short term,” Matt Schulz, chief credit analyst at LendingTree, told ABC News. “These sorts of mergers tend to move glacially.”
“There’s nothing that Capital One or Discover customers need to really do or worry about today,” Schulz added.
Customers will likely receive communication from Capital One and Discover if the deal results in changes to their services, said Rather.
If the deal closes, it may ultimately influence consumer terms across the credit card industry, though it remains unclear whether that effect would be positive or negative, experts said.
As of Tuesday, the combined value of the two companies stands at approximately $83 billion. By comparison, the value of Mastercard and Visa are about $422 billion and $564 billion, respectively.
The potential arrival of a company made up of Capital One and Discover could heighten the competition faced by Mastercard and Visa, pushing them to improve the credit card terms available to customers, Mark Hamrick, senior economic analyst at Bankrate, told ABC News.
“Certainly when you get more vibrant competition the existing enterprises in that space would obviously be concerned about facing greater competition,” Hamrick said.
But further concentration at the top of the industry may serve to loosen competition and harm consumers. “It’s a hard question to answer,” he added.
Some consumer advocates echoed the concern about possible damage to consumers.
Jesse Van Tol, president and CEO of the National Community Reinvestment Coalition, a consumer advocacy group, said in a statement that the move risks undercutting competition and harming offerings.
The merger “poses massive antitrust concerns, given the vertical integration of Capital One’s credit card lending with Discover’s credit card network,” Van Tol said.
Despite the success of a few giant companies, the credit card industry remains highly competitive, said Schulz. That fight for customers will limit any adverse impact after the merger, he added.
“The credit card marketplace is still so competitive that I think any worries about this having a negative effect on things like rewards is probably a little overstated,” Schulz said.
Regardless of where experts stand, they agreed that the deal may not gain approval from regulators.
“I wouldn’t count my credit card chickens before they hatch,” Hamrick said.
ABC News’ Elizabeth Schulze contributed reporting.
(NEW YORK) — A sunbathed Dalmatian tiptoes across a windowsill, a Chinese New Year parade engulfs a city street, an archeologist digs up a chair from desert sand.
Videos posted online display these events, but none of them happened. They make up the first publicly available work created by OpenAI’s newly unveiled video-generation tool Sora.
Sora composes videos, lasting up to one-minute long, based on user prompts, just as ChatGPT responds to input with written responses and Dall-E offers up images.
The video-generator is currently in use by a group of product testers but is not available to the public, OpenAI said in a statement on Thursday.
These products carry the potential to improve and ease video storytelling, but they could also supercharge internet misinformation and enhance government propaganda, blurring the already-faint line between real and fake content online, experts told ABC News.
AI-generated videos, meanwhile, threaten to reinforce hateful or biased perspectives picked up from the underlying training materials that make their creation possible, they added.
“The clarity of truth we thought we had with recorded photography and video is gone,” Kristian Hammond, a professor of computer science at Northwestern University who studies AI, told ABC News. “We’ve inadvertently built a world of propaganda engines.”
In response to ABC News’ request for comment, OpenAI pointed to a webpage that outlines measures taken by the company to prevent abuse of Sora.
“We’ll be taking several important safety steps ahead of making Sora available in OpenAI’s products,” the company website says. “We are working with red teamers — domain experts in areas like misinformation, hateful content, and bias — who will be adversarially testing the model.”
The company plans to use some safety features already in palace for its image generator Dall-E, the website says, including a tool that polices text prompts to ensure they do not violate rules against “extreme violence, sexual content, hateful imagery, celebrity likeness, or the IP of others.”
Experts who spoke to ABC News emphasized the difficulty of evaluating a demo product that has yet to be released to the general public. They sounded alarm, however, over the opportunities for misuse of the video generator and the challenges of implementing fully effective safeguards.
“Realistic images of events play into people’s assumptions about what’s going on in the real world and can be used to deceive people,” Sam Gregory, executive director of Witness, an advocacy group that aims to ensure the use of video to protect human rights, told ABC News.
The risks posed by AI-generated content have stoked wide concern in recent weeks.
Fake, sexually explicit AI-generated images of pop star Taylor Swift went viral on social media in late January, garnering millions of views. A fake robocall impersonating President Joe Biden’s voice discouraged individuals from voting in the New Hampshire primary last month.
Experts commended the steps taken by OpenAI to prohibit abuses of Sora along these lines. They warned though of the product’s likely capability to create deep fakes and the difficulty of preventing such videos.
“They can probably put in a filter that says, ‘Don’t generate any videos with Taylor Swift,’ but people will find ways around it,” Gary Marcus, an emeritus professor at New York University and author of the book ”Rebooting AI,” told ABC News.
Sora, like other generative AI products, is trained on troves of online data, leaving it susceptible to widely reproduced biases, such as racial and gender stereotypes.
“There are biases in society and those biases will be reflected in these systems,” Hammond said.
In addition to moderating video prompts and the resulting content, OpenAI plans to implement a “detection classifier” that can identify when a video has been produced by Sora, the online statement said. The company said it will also include a popular recognized digital tag, which essentially amounts to a digital watermark.
Such precautions drew applause from experts, though they warned that videos could potentially be reproduced or altered as means of removing the labels.
“People will be trying to get around the guardrails put in place,” Hammond said. “It’s an arms race.”
(NEW YORK) — The number of striking workers in the U.S. more than doubled last year due to massive work stoppages carried out by autoworkers, nurses and Hollywood writers and actors, according to a study released by Cornell University on Thursday.
The total number of striking workers climbed 141% in 2023, amounting to nearly 540,000 workers who walked off the job, the report found.
“This rise in strike action after many years of diminished activity indicates a union resurgence that is shifting the balance of power back toward labor,” Alexander Colvin, dean of Cornell University’s School of Industrial and Labor Relations, told ABC News in a statement.
Four large strikes accounted for more than half of the workers involved in work stoppages last year, the report said, pointing to multi-state campaigns among actors, autoworkers, healthcare employees, as well as an action carried out by school staff in Los Angeles.
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 healthcare workers at Kaiser Permanente won major wage gains after a work stoppage, as did thousands of TV writers.
The total number of work stoppages ticked up by 9% in 2023 compared to the previous year, due to the sizable share of workers who participated in large strikes, the report said.
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 previously told ABC News.
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, previously told ABC News.
Despite the surge in work stoppages last year, union membership stagnated. In 2023, the unionization rate among private sector employees stood at 6%, little changed from the previous year, according to data released by the Bureau of Labor Statistics in January.
The private sector unionization rate has generally trended down over four decades since the U.S. began collecting data, in 1983, when the rate stood at about 17%, the BLS said.
Still, last year brought a surge in strikes in the private sector, in contrast with the burst of labor militancy five years ago mostly among public school teachers, Johnnie Kallas, an assistant professor at the University of Illinois, who founded Cornell University’s Labor Action Tracker, told ABC News in a statement.
“Large strikes were much more dispersed this past year throughout numerous private sector industries,” Kallas said.
(NEW YORK) — The City of New York on Wednesday sued the companies behind SnapChat, Instagram, YouTube and TikTok, accusing them of fomenting a “nationwide youth mental health crisis” by exposing children “to a nonstop stream of harmful content.”
The lawsuit, filed in California Superior Court, alleged the companies intentionally designed their platforms to purposefully manipulate and addict children and teens to social media applications. The lawsuit pointed to the use of algorithms to generate feeds that keep users on the platforms longer and encourage compulsive use.
“Youth are now addicted to Defendants’ platforms in droves, resulting in substantial interference with school district operations and imposing a large burden on cities, school districts and public hospital systems that provide mental health services to youth,” the lawsuit said. “While presented as ‘social,’ Defendants’ platforms have in a myriad of ways promoted disconnection, disassociation, and a legion of resulting mental and physical harms.”
The lawsuit accused the social media companies of manipulating users by making them feel compelled to respond to one positive action with another positive action.
SnapChat addressed the lawsuit via a statement, denying the allegations.
“Snapchat was intentionally designed to be different from traditional social media, with a focus on helping Snapchatters communicate with their close friends. Snapchat opens directly to a camera – rather than a feed of content that encourages passive scrolling – and has no traditional public likes or comments. While we will always have more work to do, we feel good about the role Snapchat plays in helping close friends feel connected, happy and prepared as they face the many challenges of adolescence,” the statement, provided by Ashley Adams, a spokeswoman for Snap Inc., said.
TikTok also responded to the city’s lawsuit.
“TikTok has industry-leading safeguards to support teens’ well-being, including age-restricted features, parental controls, an automatic 60-minute time limit for users under 18, and more. We regularly partner with experts to understand emerging best practices, and will continue to work to keep our community safe by tackling industry-wide challenges,” a TikTok spokesperson said.
Meta, which owns Instagram, stated the safety of teens is a top priority.
“We want teens to have safe, age-appropriate experiences online, and we have over 30 tools and features to support them and their parents. We’ve spent a decade working on these issues and hiring people who have dedicated their careers to keeping young people safe and supported online,” a company spokesperson said.
“Providing young people with a safer, healthier experience online has always been core to our work. In collaboration with youth, mental health and parenting experts, we’ve built services and policies to give young people age-appropriate experiences, and parents robust controls. The allegations in this complaint are simply not true,” said José Castañeda, a Google spokesperson.
“These platforms take advantage of reciprocity by, for example, automatically telling the sender when their message was seen or sending notifications when a message was delivered, encouraging teens to return to the platform again and again, and perpetuating online engagement and immediate responses,” the lawsuit said.
“Over the past decade, we have seen just how addictive and overwhelming the online world can be, exposing our children to a non-stop stream of harmful content and fueling our national youth mental health crisis,” New York City Mayor Eric Adams said. “Our city is built on innovation and technology, but many social media platforms end up endangering our children’s mental health, promoting addiction and encouraging unsafe behavior.”
“Over the past decade, we have seen just how addictive and overwhelming the online world can be, exposing our children to a non-stop stream of harmful content and fueling our national youth mental health crisis,” New York City Mayor Eric Adams said. “Our city is built on innovation and technology, but many social media platforms end up endangering our children’s mental health, promoting addiction and encouraging unsafe behavior.”
(NEW YORK) — While snow and frigid temps are sweeping parts of the country, travel deals for spring break are heating up.
Experts like Going.com founder Scott Keyes explained to ABC News’ Good Morning America why now may be the best time to book flights for spring travel.
Spring break travel tips: Book flights before March
“I would not be putting it off much longer if you’re hoping to fly somewhere, because chances are once March rolls around, spring break flights are going to get more expensive, not less,” he cautioned. “Right now we are in the Goldilocks window for cheap spring break flights.”
The so-called “Goldilocks window”, Keyes said, is the ideal time to book your flight — it’s not too early or too late for the price to be just right.
“If you book 11 months in advance, you don’t see many cheap flights, but also, if you wait until a week or two before, your likelihood of a cheap flight at that point is gonna be very low,” he explained.
Spring break travel tips: Find the cheapest destination
When it comes to booking trips for the family, Keyes said to be flexible with your destination.
For example, if a beach getaway is at the top of your vacation list, look for the one with cheapest airfare, and for bigger families, Keyes suggests booking the tickets individually.
“When you do one booking of four tickets, all four tickets have to have the same price, and if there’s only 3 tickets left at the cheapest price they’re gonna sell you the next most expensive one,” he said. “Instead, book three tickets at once at the cheapest price — then book the fourth ticket.”
Spring break travel tips: Round trip vs. one-way flights
Keyes also advises travelers looking to book for spring break to compare round-trip and one-way fares.
“The cheapest non-stop flight from New York to San Diego for a week in late April is $448 per person round trip. But if you book each leg separately, you can fly one-way to San Diego for $139 and back to New York for $254 — totaling $393. That’s a savings of $55 per person,” he said.
Expert’s top travel tip for booking flights: Follow the 21-day rule
Keyes reminded travelers to follow his golden rule of air travel, back-timing when to book based on your departure date, in order to align with an airline’s “advanced purchase requirement” found in the fine print of the fare terms and conditions.
“Pull up a calendar and circle 21 days before your travel date,” he said. “That needs to be your sort of drop-dead date to get your flights booked by.”
Other deals and thinking ahead to summer travel
It’s also a great time to book a cruise, now that we’re in what’s known as the wave season — the first three months of the year when cruise lines often offer a wide range of discounts.
AAA shows discounts between 30% to 60% off, and travelers will likely see cabin upgrades, as well as buy one, get one offers and possible onboard credits.
While most searchers are in spring break mode, experts also say now is a good time to start thinking about summer travel.
If you’re looking for domestic vacations, plan to try to book them one to three months out from the travel dates, while we are still in the opposite season.
Finally, remember to turn on flight alerts via Google flights or a price tracker app.
(NEW YORK) — Dole Fresh Vegetables, Inc. has announced a voluntary recall of a “limited number” of Dole-branded and private label salad kits due to potential cross contamination with cheeses recalled for possible listeria contamination.
A company recall notice posted on the U.S. Food and Drug Administration website and Dole’s company website states that the salad kits were recalled because they were processed on the same line as a cheese product from Rizo-Lopez Foods, which had previously been recalled for the “possible presence of Listeria monocytogenes.”
“This recall notification is being issued due to the potential for cross-contamination of cheese contained in certain masterpacks by cheese potentially contaminated with Listeria monocytogenes from our packaged cheese supplier,” the Monterey, California-based company wrote in its recall announcement. “At this time, we are unaware of any specific illnesses associated with our products, or by other purchasers of their recalled cheese.”
The recalled salad kits were sold in 25 states as well as the Canadian provinces of Alberta, British Columbia, New Brunswick, Ontario, and Quebec.
Eight salad kit products are affected by the recall, including the Dole Chopped Kit Avocado Ranch, Premium Kit Southwest Salad, Cajun Ranch Chopped Kit, Premium Kit Endless Summer and Chopped Salad Kit Bacon Ranch Crunch, among others.
The products have “Best if used by” dates between Feb. 3 and 21. Click here for specific “use by” dates, lot codes, UPC numbers and specific product names and details, as well as photos of the recalled items.
Dole has advised customers in possession of any recalled products to dispose of them immediately.
“Dole retailers have been advised to check store shelves and warehouse inventories to confirm that no recalled product is available for purchase by consumers,” the company added, stating that it is “coordinating closely with regulatory officials” on the matter.
Dole Fresh Vegetables did not immediately respond to ABC News’ request for comment.
Customers and retailers with questions about the recall may contact the Dole Consumer Response Center at 800-356-3111, Monday through Friday from 8 a.m. to 3 p.m. Pacific Time.
Dole’s announcement stems from an earlier recall issued by Rizo-López Foods, which voluntary recalled all cheeses and other dairy products made in its Modesto facility “because they have the potential to be contaminated with Listeria monocytogenes,” the company said in a press release on Feb. 5.
The company said in the release that the recall was being carried out with the knowledge of the U.S. Food and Drug Administration, which shared the company announcement on its website the following day.
The Centers for Disease Control and Prevention also issued a food safety alert for recalled cheeses, yogurts and sour creams potentially linked to a multistate outbreak of listeria that has sickened 26, hospitalized 23 and left two people dead.
In a statement provided to ABC News, Edwin Rizo, CEO and owner of Rizo Lopez Foods, Inc., said this was the first time “any product that we manufacture has been linked to a foodborne illness.”
“As soon as we were aware of this, we made the immediate decision to stop production and voluntarily recall all our products manufactured in our facility. We are working hard and diligently to find the root cause of the problem and take corrective actions to prevent it from happening again. The health and well-being of our customers is our top priority,” the statement read.
According to the CDC, listeria can cause severe illness “when the bacteria spread beyond the gut to other parts of the body” after a person consumes contaminated food. Those at higher risk include pregnant people, those aged 65 or older, or anyone who has a weakened immune system, the CDC says.
In 2021, Dole recalled all Dole-branded and private label packaged salads processed at its facilities in Bessemer City, North Carolina and Yuma, Arizona after the FDA said a random analysis of packages of a Dole-branded garden salad from the two facilities found samples of a strain of Listeria monocytogenes.
(NEW YORK) — William “Bill” Post, the man often credited with inventing the beloved Pop Tart, has died at 96.
Born on June 27, 1927 in Grand Rapids, Michigan, Post was one of seven children born to Dutch immigrants and, at the age of 16, Post began working part-time washing trucks at Hekman Biscuit Company, according to his obituary.
After serving in the Army Air Corps in occupied Japan during World War II, Post would eventually return to Hekman at the age of 21 to work full as the personnel manager while also assisting with sales and production, along with many of the other elements of the business.
“Fast forward 20 years, and Bill as the plant manager of Hekman (later known as the Keebler Company) welcomed some executives from Kellogg’s who asked if he thought it would be possible for Keebler to create a new product they had in mind,” according to his obituary.
“It is at this juncture that Bill is often credited for having ‘invented’ the Pop Tart,” Post’s obituary states. “To be accurate, however, Bill would say, ‘I assembled an amazing team that developed Kellogg’s concept of a shelf-stable toaster pastry into a fine product that we could bring to market in the span of just four months.’”
Pop Tarts made their debut to the public in 1964 with the four original flavors of strawberry, blueberry, brown sugar cinnamon and apple-currant. Now, 60 years later, there are between 20 to 30 flavors on the market at any given time with new flavors constantly being in development and tested for an ever-changing market.
In the latter part of his life, Post would move his family to Elmhurst Illinois, to begin working at the corporate offices of the Keebler Company before leaving the company at age 56 and retiring to Glen Arbor, Michigan.
His retirement didn’t last long, however, and he accepted Kellogg’s request to be their consultant, a role he would hold for the next 20 years, which included “worldwide travel and the forging of international friendships. In 2003, Bill and Florence came full circle, moving back to Grand Rapids to be near their family,” according to his obituary.
“Bill’s immediate family also wishes to express their gratitude and thanks to his nieces and nephews who paid so much attention to him,” the obituary said.
(NEW YORK) — Consumer prices rose 3.1% in January compared to a year ago, slowing markedly from the previous month but missing expectations of an even larger cooldown, a report from the Bureau of Labor Statistics released on Tuesday showed.
Still, the falling inflation offered welcome news for the Federal Reserve as it weighs interest rate cuts.
Core inflation — a closely watched measure that strips out volatile food and energy prices — increased 3.9% over the year ending in January, matching the cooldown from the prior month.
The report from the U.S. Bureau of Labor Statistics follows a slight acceleration of price increases in December.
That jump in inflation had complicated the Federal Reserve’s plans to deescalate its inflation fight with a series of interest rate cuts this year.
Fewer than two weeks ago, the central bank decided to leave interest rates unchanged, opting to observe further economic performance before reversing a near-historic series of rate increases that began last year.
The slowdown of inflation in January amounts to a positive sign for the Fed ahead of its next rate decision in March.
Inflation has fallen dramatically from a peak last year, but it remains nearly a percentage point above the Fed’s target.
The U.S. economy has largely defied the central bank’s efforts to slow the economy by raising borrowing costs for households and businesses.
The economy far exceeded expectations by adding 353,000 jobs last month while holding the unemployment rate steady at 3.7%, a historically low figure, according to data released by the U.S. Bureau of Labor Statistics earlier this month.
Gross domestic product performed much better than expected at the end of last year, a report this month showed, while consumer sentiment soared in January.
The blockbuster performance, however, could pose a challenge for the inflation fight taken up by policymakers at the Federal Reserve.
The Fed risks a rebound of inflation if it cuts interest rates too quickly, since stronger consumer demand could lead to an acceleration of price increases.
Speaking in Washington, D.C., late last month, Fed Chair Jerome Powell celebrated the steady decline of inflation over recent months and welcomed the robust hiring occurring alongside it. However, he cautioned about the risks posed by an economy that runs too hot.
“We’re not looking for a weaker labor market,” Powell said. “We’re looking for inflation to continue to come down, as it has been coming down for the last six months.”
“We’re not declaring victory at this point,” he later added. “We think we have a ways to go.”
