(NEW YORK) — United Airlines flight attendants, represented by the Association of Flight Attendants, moved closer to a strike Wednesday after the union announced that 99.99% of service members voted in favor of strike authorization.
The vote included 90% of the United Airlines flight attendant staff.
Among the strike requests, flight attendants are demanding significant double-digit base pay increases, being compensated for time at work outside of flights, schedule flexibility and work rule improvements, job security, retirement and more, according to the union.
The historic vote marked the first time in 20 years that United flight attendants have authorized a strike, since the airline’s 2005 bankruptcy negotiations.
However, a strike will not occur immediately and despite the vote, there will be no immediate disruptions to airline operations.
Experts say it’s highly unlikely United flight attendants will actually walk off the job. There are a number of steps that must happen before a strike can take place and the president and Congress have the power to stall or stop an airline strike.
“To be clear, there is no work stoppage or labor disruption,” United told ABC News in a statement Wednesday. “Off-duty flight attendants are simply exercising their right to conduct an informational picket.”
The results of the strike authorization vote were announced as nearly 20 informational picket lines were seen at airports across the country.
“We deserve an industry-leading contract. Our strike vote shows we’re ready to do whatever it takes to reach the contract we deserve,” Ken Diaz, president of the United chapter of the Association of Flight Attendants, said in a statement Wednesday.
“We are the face of United Airlines and planes don’t take off without us. As Labor Day travel begins, United management is reminded what’s at stake if we don’t get this done,” he added.
After this week, the union walked away from federally mandated negotiations. The union will now ask the National Mediation Board to release them into a 30-day “cooling-off” period, which would set a potential strike deadline.
“The United management team gives themselves massive compensation increases while Flight Attendants struggle to pay basic bills,” Diaz continued. “The 99.99% yes vote is a clear reminder that we are unified in the fight against corporate greed and ready to fight for our fair share of the profits we create.”
Similar strike authorization votes have been cast at competing airlines including American, Alaska, Southwest, and more.
(NEW YORK) — This summer brought lots of buzz around “tourist taxes” and other fees that can get tacked on to normal travel expenses. Now, another fee that may be familiar to avid cruisers is increasing on one major cruise line.
The so-called “Crew Appreciation” fee is a daily amount that’s automatically added to a guests’ onboard accounts with Princess Cruises “to recognize the efforts of a wide variety of crewmembers who contribute to the experiences of all our guests” and are pooled and distributed throughout the year in compensation and bonuses.
Travelers will pay slightly more starting later this month depending on the type of accommodations they book, according to the cruise line, which last raised the price in February 2023.
Echoing recent headlines surrounding updates to airline baggage prices, Princess Cruises’ Crew Appreciation fee is rising by just $1 per person, per day in various classes of cabins.
Travelers in suites will see a $19 daily fee, while those in mini suites, cabanas or Club Classes will pay $18. Guests in all other staterooms will pay $17.
“The crewmembers eligible to receive these funds work in various departments, many of whom rotate among different ships, throughout our fleet of ships,” Princess states on its website. “Guests have complete discretion to adjust these crew appreciation [fees] while onboard; however, crew appreciation may only be adjusted prior to disembarking the ship and not refundable post cruise.”
Travelers can choose a prepaid crew appreciation option while managing their booking, but if it’s not adjusted up to the time a passenger settles up the account prior to disembarkation, the payment becomes final and nonrefundable.
Full details of the policy are available on the Princess Cruises website.
(NEW YORK) — More than 9,500 cases of 100% apple juice that were sold at Walmart have been recalled due to high levels of arsenic.
The U.S. Food and Drug Administration upgraded the level of the apple juice recall, originally issued on Aug. 15, from unclassified to class 2, which indicates “a situation in which use of, or exposure to, a violative product may cause temporary or medically reversible adverse health consequences,” but is unlikely to cause “serious adverse health consequences.”
“Product contains inorganic arsenic above action level set in industry guidance (13.2ppb),” meaning parts per billion, the FDA said of the juice.
The agency’s enforcement report stated that 9,535 cases of Great Value brand apple juice sold at Walmart in 25 states, Puerto Rico and the District of Columbia had been voluntarily recalled by the manufacturer Refresco Beverages US Inc.
A representative for Refresco told ABC News in a statement, “We are aware that certain lots of the 100% apple juice we previously manufactured contains inorganic arsenic slightly above the FDA’s 10 ppb (parts per billion) action level in the FDA Final Guidance to Industry on Action Level for Inorganic Arsenic in Apple Juice, which aims at reducing the dietary exposure of contaminants to as low as possible. As a result, impacted products are being voluntarily recalled.”
The statement continued, “At this time there are no reported complaints or incidents of illness caused by the product. Per the FDA, it is not possible to completely prevent arsenic from entering the food supply, yet exposure to high levels of inorganic arsenic can have adverse health effects.”
The representative added that “the safety of consumers and the satisfaction of our customers are our top priorities” and that the company is “working diligently to address the situation.”
Product details of recalled apple juice
The contaminated Great Value beverages in question were sold in six-packs of 8-ounce plastic bottles with the UPC code 0-78742-29655-5.
The recalled apple juice has a “Best if used by” date code of DEC2824 CT89-6.
(NEW YORK) — Rising inflation has driven mortgage rates up, making it difficult for many Americans to find an affordable home. As a result, many potential buyers find themselves waiting for an interest rate cut to bring mortgage prices down.
For more than a year, LaToya Trotter has worked closely with trusted real estate agent Shannon Welch to find an ideal new home in the vibrant Chicago area. Trotter purchased their current home in 2020 for $45,000 in an all-cash offer.
Interest rates have dropped from their 23-year high in 2023 but are nowhere near the 3% homeowners enjoyed in 2020. This puts home prices at an all-time high, dramatically increasing moving costs.
According to the National Association of Realtors, the current monthly payment for a median-priced home has more than doubled since 2019. Buying a starter home in more than 200 U.S. cities now costs $1 million.
“It’s sad because there are people in America that will never make $1 million in their lifetime,” Welch said. “So how can they afford a million-dollar home?
Trotter, a single mother and electrical engineer, is searching for a new home priced at $400,000 to secure her 14-year-old daughter Adoniah’s future. She wants to move closer to her daughter’s school. The teenager attends a private Catholic high school located 30 minutes away from their South Chicago home.
She visited a three-bedroom, two-bath home listed for $340,000 and a five-bedroom, three-bath home with an asking price of more than $459,000.
Welch is keeping a keen eye on the market for her client. She doesn’t dismiss Democratic presidential nominee Vice President Kamala Harris’ promise to build 3 million new housing units if elected, but she thinks that plan misses the mark in Chicago.
“We have tons of inventory throughout Chicago land,” Welch said. “We have hundreds of properties on auction. We have properties that are abandoned.”
Harris proposed a plan to assist first-generation homebuyers by providing a down payment of up to $25,000.
While Harris’ Republican rival Donald Trump has yet to outline a housing plan if he wins back the White House in November, the Republican National Party this year pledged to promote homeownership through tax incentives.
According to a recent ABC News/Washington Post/Ipsos poll, more respondents trust Trump over Harris to handle the economy and inflation by 9 points. Over 85% of adults consider this a top issue in their presidential vote.
When asked who she’ll vote for this November, Trotter noted that she’ll back the candidate whose policies seem likely to offer her the best future.
“I’ll just again look to find whoever has policies that align more closely with what I’m looking to do today,” Trotter said. “It’s not about the past. It’s about looking forward.”
(WASHINGTON) — Borrowers eager for the Federal Reserve to abandon high interest rates could not have scripted a better four-word declaration than the one on Friday from Fed Chair Jerome Powell: “The time has come.”
Powell indicated that the Fed would soon bring interest rates down from a 23-year high. The shift could lower borrowing costs for everything from credit cards to auto loans to mortgages.
The pace and scale of rate cuts remains unknown, however. A cautious approach could leave borrowers saddled with high costs for the next several years while an aggressive reset could ease loan rates substantially within months.
“The question now is how far and how fast should the Fed cut rates?” Mark Zandi, chief economist at Moody’s Analytics, said in a post on X on Sunday.
The chances of an interest rate cut at the Fed’s next meeting in September are all but certain, according to the CME FedWatch Tool, a measure of market sentiment.
Market observers are divided over whether the Fed will impose its typical cut of a quarter of a percentage point or opt for a larger half-point cut. The tool indicates a roughly 60% chance of a quarter-point cut and a 40% chance of a half-point cut.
Over the remainder of the year, the most likely scenario is a quarter-point rate cut at each of the Fed’s three scheduled meetings in September, November and December, the CME FedWatch Tool shows.
The Fed is guided by a dual mandate to keep inflation under control and maximize employment. In theory, low interest rates help stimulate economic activity and boost employment; high interest rates slow economic performance and ease inflation.
In recent months, the labor market has slowed alongside cooling inflation. That trend was highlighted last month by a weaker-than-expected jobs report that raised concern among some economists that the U.S. may be headed toward a recession.
Recent trends have shifted the Fed’s focus away from controlling inflation and toward ensuring a healthy labor market, Powell said Friday.
“A cooldown in the labor market is unmistakable,” Powell said, adding that he would let economic performance dictate the course of rate cuts.
“The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook and the balance of risks,” Powell said.
Gregory Daco, chief economist at accounting firm EY, said in a statement to ABC News that he expects a quarter-point rate cut at each of the Fed’s next three meetings in an effort to soften the ongoing economic slowdown. However, worries about an imminent recession are overstated, Daco added.
The Fed aims to “buffer the economic downshift,” Daco said.
Deutsche Bank, which also projects three quarter-point rate cuts before the end of the year, said in a note to clients on Friday that a weak jobs report early in September could push the Fed to opt for a larger half-point cut at its meeting later that month.
“The softer-than-expected July jobs report and recent bouts of market volatility have shifted risks towards the Fed cutting more aggressively upfront,” Deutsche Bank said.
Analysts differ widely over the course of interest rate cuts in the next year or two. Zandi said the Fed should bring interest rates down significantly from the current target rate of between 5.25% and 5.5%. By the end of next year, interest rates should stand at 3%, he added.
By contrast, former Treasury Secretary Larry Summers cautioned against an aggressive approach to interest rate cuts. “We need to be rather more cautious about the medium term outlook for monetary policy,” Summers said in a post on X on Saturday.
Still, Summers added, the need for some rate cutting is beyond question.
“Inflation is coming down. The economy is slowing. On current facts, absolutely the next move should be towards monetary policy easing,” Summers said.
The Rimac Nevera electric hypercar holds more than 20 performance records. — Rimac Group
(NEW YORK) — Mate Rimac has a tall order: trying to convince drivers that electric supercars are superior to combustion vehicles.
Rimac, the 36-year-old engineering savant from Croatia who started his namesake company 15 years ago, recently pulled the sheet of his latest creation: the Nevera R, an aerodynamically perfected supercar designed to hug every tight corner and give maximum driving pleasure. The performance numbers are nearly impossible to comprehend: 2,107 horsepower and a 0-60 mph time of 1.74 seconds.
This insanely powerful supercar is breaking industry records. There are, however, snags in Rimac’s master plan. He has acknowledged that turning enthusiasts to electric proselytes could take months, if not years.
Rimac spoke to ABC News earlier this month about the challenges of selling his seven-figure sports cars, taking over French marque Bugatti as CEO and why government officials are making a mistake by pushing electric-vehicle mandates. He’s also a big supporter of autonomous driving.
The interview below has been edited.
ABC News: You introduced the Nevera R electric hypercar to the world at Monterey Car Week. The horsepower that car produces — 2,107! — is mind-blowing. How did you accomplish this?
Mate: I started the company 15 years ago when I was like 20 years old in order to push the limits and show what technology can bring to the table … that the future of automotive is not going to be boring. And the whole goal, my whole focus of the company and of me the last few years, has been to achieve that. It’s not just the car. It’s building the capabilities, the company around it, to actually do it in Croatia, a country that has never built cars before.
The last 15 years of this journey has been leading up to developing this technology, the team, the resources, the factory, the equipment and actually a whole industry.
ABC News: Is horsepower the one metric that matters most to your customers?
Mate: No, absolutely not. It’s the whole package. So performance is being commoditized right now. More and more cars come to the market at a relatively affordable cost that offer quite good performance, incredible performance actually when you compare it to a few years ago when it was only reserved for extreme hypercars. It’s all about emotions and that’s always a challenge with electric cars: How do you convey emotion without the sound of a combustion engine? But everyone who tries a Nevera is like, “Yes, we can see that this car was developed by people who love cars, like proper car guys.” Despite being electric, the Nevera offers a lot of emotion. That’s the most important thing.
ABC News: And how exactly are you delivering that emotion?
Mate: Well, there’s different things. The Nevera has four electric motors that can do crazy drift modes and on a flip of a switch it’s like a track monster. Everything changes — the suspension, the power distribution, it goes from rear-wheel drive to all-wheel drive, it can adjust it exactly as you want. Like it gives a totally different experience.
Emotion for me is the ability to go sideways, to control the car, stuff like that. And we can do all of that with this car.
ABC News: Why are you limiting production of the Nevera R to 40 units? When does production begin?
Mate: The Nevera was 150 units, and the Nevera R is 40 additional. We want to keep exclusivity. The Bugatti Tourbillon is limited to 250 and we could have sold a lot more, but for us it’s important to have exclusivity and it’s also important for the value of the cars later.
We start production early next year and the cost of a Nevera R is 2.3 million euros.
ABC News: Here we are, talking about the electric Nevera R, an engineering triumph, but you made a comment this past spring that high-end buyers don’t want electric supercars. Is that still true? Are you having trouble selling the Nevera to enthusiasts?
Mate: I think electric cars, in any category, need to bring something special. Just making an car electric is not going to cut it. People are thinking, “Let’s just make an electric car and it will sell … or the regulation will force people to go electric.” And I am not totally against that — I am totally against forcing this on people who don’t want an electric car. I am all for bringing something unique, something cool, something different that’s better and maybe more affordable — maybe not in this market segment but in general.
An electric car should be better in every aspect, including price, compared to its competition and then people will buy it.
ABC News: There’s another trend in the industry where automakers are taking electric sports cars but giving them gearboxes and fake engine sounds. Is this something you’ve thought about?
Mate: No, we don’t do this. We have decided from the beginning we only do authentic things. There are no fake sounds, there are no artificial gear shift changes. The Hyundai Ioniq 5 Ns have that, it’s a gimmick. But we don’t think that’s appropriate for this category of cars.
ABC News: When do you think electric sports and supercars cars will be widely accepted?
Mate: Oh, I think that will be a while. People in this segment still prefer combustion cars. But I think we are the player when it comes to electric performance in this segment.
ABC News: So will the next Rimac sports car or Nevera successor have an internal combustion engine?
Mate: It could be anything. From the beginning, I never said that we are exclusively electric. We were whatever is most exciting. The Nevera R has four electric motors — that is not something you can achieve with a combustion engine. But when it comes to power source, it can be anything. It could be a combustion engine with an interesting fuel, it could be fuel cell that does not run on hydrogen. We are really looking at lots of stuff. The next car doesn’t necessarily have to be purely electric — whatever is most exciting and most technically interesting. I have been doing electric cars now for 15 years … I am very excited to look at other stuff as well.
ABC News: Where are you seeing the most demand for your cars?
Mate: The U.S. is the biggest customer base, closely after that is Europe. So like 40% [of sales] are in the U.S., 30% is Europe and then the rest of the world.
ABC News: What are the challenges of running two high performance and ultra luxe brands like Bugatti and Rimac? They compete for the same customers and that’s a very limited pool.
Mate: These customers have multiple cars, it’s not just like they buy just one car. They want to be a part of something. It’s about the people behind it, it’s about the events, meeting each other. [Customers] are becoming part of a story. They’re also becoming a part of history. We are creating history together.
Many of the customers decided to join Rimac because they’re also part of Bugatti or vice versa and they deal with the same people, they go to Croatia, they have the Croatia experience, so it actually works well. With Bugatti you have to be careful, it’s an old brand with a lot of heritage. You have to be very respectful to the brand. You cannot do something that’s crazy. A lot of our Nevera customers are also Bugatti customers.
ABC News: What is the biggest obstacle for all automakers and the industry right now?
Mate: There are three big topics. One is electrification. A lot of people invested a lot into electrification and maybe it was a bit too fast. The other area is China. The third one is autonomous driving and finding new ways of moving around where ownership isn’t really necessary anymore. The lower-end brands are really in the trenches, they have issues. It’s for sure an interesting time and in the next year we’ll see lots of changes in the industry.
ABC News: There are concerns about a recession in the U.S. Has the company been impacted at all?
Mate: This talk has been going on for years, basically since COVID started. We have never been more successful. We sold out of the Tourbillon — all 250 cars. We just presented it two months ago. It’s completely sold out. We are basically sold out until the end of this decade with Bugatti for a car that’s $4.6 million. The market is still strong in this segment.
ABC News: You’re also developing a driverless robotaxi that could be in service as soon as 2026. These types of vehicles have received a lot of bad press lately and have been involved in serious safety accidents. Why robotaxis? You design cars for real-life drivers.
Mate: Yeah, but do you really like to drive in every situation? Like how many times would you rather spend your time doing something else — watching a movie, or typing on your phone or typing some emails but you can’t because you’re driving or even worse you’re doing it while you’re driving. Not every drive is necessarily exciting and let’s be honest — how many people really care about it? I am not saying car ownership should go away or people shouldn’t drive cars anymore. God forbid.
We just think it makes sense. When an autonomous car in this stage has an accident, even if it’s a minor one, of course it will be blown out of proportion. But eventually autonomous cars will be a lot safer, a lot safer than human drivers and they will save millions of lives.
ABC News: So you have taken over Bugatti, you’re building electric hypercars and you also want to build robotaxis.
What is next on your list to accomplish?
Mate: [laughs]. Oh Jesus Christ, nothing. I made a vow to myself to finish all these things and then I don’t know. I might take a long vacation.
(NEW YORK) — Two major Canadian freight rail companies locked out thousands of workers on Thursday, shutting down cross-border shipping routes and risking serious damage for the U.S. economy, industry experts told ABC News.
The rail lines carry everything from chemical inputs to auto parts, holding the potential to cause shortages for a range of products American consumers and businesses depend on. While the damage is minimal so far, a prolonged shutdown of weeks or months could slow U.S. economic growth, rekindle inflation and put some workers out of a job, the experts said.
“Right now, I do not think the sky is falling,” Joseph Schofer, a professor emeritus of civil and environmental engineering at Northwestern University, told ABC News. “In a week or two, effects will begin to develop.”
The shutdown will cost the Canadian economy about $250 million per day, according to Brendan La Cerdaa, director of economic research at Moody’s Analytics. If the strike continues for a week or two, the U.S. economy could start suffering costs of about $70 million per day, La Cerda said.
More than 9,000 Teamsters workers are off their jobs after Canadian National Railway Co. (CN) and Canadian Pacific Kansas City Ltd. (CPKC) locked them out when they failed to reach a deal on a new contract. It’s the first time both railways have been simultaneously halted.
“Throughout this process, CN and CPKC have shown themselves willing to compromise rail safety and tear families apart to earn an extra buck. The railroads don’t care about farmers, small businesses, supply chains, or their own employees. Their sole focus is boosting their bottom line, even if it means jeopardizing the entire economy,” Teamsters Canada Rail Conference President Paul Boucher said in a statement on Thursday.
In a statement, CN said it had negotiated with workers in good faith for nine months, offering better wages and shorter hours.
“Without an agreement or binding arbitration, CN had no choice but to finalize a safe and orderly shutdown and proceed with a lockout,” the company said on Thursday.
Similarly, CPKC said the lockout came about after months of unsuccessful negotiations.
“We fully understand and appreciate what this work stoppage means for Canadians and our economy. CPKC is acting to protect Canada’s supply chains, and all stakeholders, from further uncertainty and the more widespread disruption that would be created should this dispute drag out further resulting in a potential work stoppage occurring during the fall peak shipping period,” the statement said.
What does the Canadian rail shutdown mean for the U.S. economy?
A brief shutdown of the top two Canadian freight rail companies would not meaningfully impact the U.S. economy, experts told ABC News. However, they added, a prolonged lockout would damage the nation’s economic performance and risk accelerating inflation.
Many companies rely on Canadian rail lines to deliver raw goods that play a vital role in the supply chain. Affected industries include auto companies, chipmakers and fertilizer manufacturers, experts said. Perishable goods also reach U.S. consumers on trains from Canada.
As a smaller-scale version of the supply blockage incurred during the COVID-19 pandemic, a Canadian freight rail shutdown could hinder economic activity of businesses that import raw materials, rising prices for consumers who encounter shortages for some products.
“The producers will probably absorb some of those price increases in the short term, but eventually they could get passed on to consumers,” Kyle Handley, a professor of economics at the University of California, San Diego, told ABC News.
Over the coming weeks, a shutdown could slow gross domestic product growth and cause layoffs at directly impacted firms, such as auto factories, Jeff Macher, a professor of strategy and economics at Georgetown University’s Center for Business and Public Policy, told ABC News.
“A prolonged stoppage could lead to a certain amount of job losses,” Macher said.
The potential supply disruption could arrive at a vulnerable period for the U.S. economy. Growth is cooling but remains solid. Price increases have slowed dramatically but remain higher than the Federal Reserve’s target level.
For now, questions remain over the duration and scale of the U.S. economic fallout, experts said.
“If the stoppage ends within a week or so, it’ll have no effect on U.S. GDP,” Macher said. “If it extends beyond that, then it could bleed into and impact the U.S.”
ABC News’ Aaron Katersky and Zunaira Zaki contributed reporting.
A Hawaiian Airlines airplane takes off near an Alaska Airlines airplane at Los Angeles International Airport (LAX), Dec. 5, 2023, in Los Angeles. (Eric Thayer/Bloomberg via Getty Images)
(NEW YORK) — Hawaiian Airlines and Alaska Airlines are one step closer to closing a $1.9 billion deal that would mark the largest consolidation of any U.S. carrier since 2016.
The deadline for regulatory review by the Department of Justice expired earlier this week without any interference, meaning the two companies have cleared the first major hurdle for their merger plans, which were first announced last December.
In order for the deal to move forward, it will need to pass scrutiny from the U.S. Department of Transportation — a customary closing condition — which includes an interim exemption application.
The Justice Department has already been skeptical of airline partnerships and most recently blocked the proposed merger of JetBlue and Spirit.
While it’s not immediately clear how long the approvals process could take, experts have said it can take years for the behind-the-scenes logistics to settle into place.
Pending the remaining approvals, this acquisition would be the second for Alaska Airlines within the past decade, after it beat out JetBlue in a bidding war for Virgin America.
Under the proposed Hawaiian-Alaska merger, both airlines would remain intact and continue to operate under their current names.
Alaska Airlines statement on next steps for Hawaiian merger
“This is a significant milestone in the process to join our airlines,” the SeaTac, Washington-based carrier announced in a statement this week. “During the HSR [Hart–Scott–Rodino Antitrust Improvements Act] time period, Alaska worked closely with the Hawai’i Attorney General to reinforce and expand upon our commitments for the future of Hawaiian Airlines and to Hawai’i consumers. These include plans to maintain the Hawaiian Airlines brand and local jobs and continue providing strong service between, to, and from the Islands.”
The airline also said that following the potential next steps, “we will complete work to close the transaction, and proceed with integrating the two companies, welcoming Hawaiian Airlines guests and employees into Alaska Air Group, and expanding benefits and choice for consumers throughout Hawai’i, the Asia-Pacific region, continental United States and globally.”
Governor of Hawaii comments on possible airline merger
After the latest details on the merger were released, Hawaii Gov. Josh Green said in a statement that he and his staff have worked with Alaska Airlines leadership over the past few months “to carefully review the potential impacts of a consolidation, and we insisted that any changes expand travel options for our residents and preserve union jobs.”
“Alaska has reinforced commitments to our state and will maintain the Hawaiian Airlines brand, preserve and grow union jobs in our Hawai’i, as well as continue to provide crucial passenger and air cargo service to, from, and within the islands,” he said. “The merger will vastly expand the number of destinations throughout North America for Hawai’i residents that can be reached nonstop or one-stop from the islands, and HawaiianMiles members will retain the value of their miles while gaining access to more destinations around the world.”
Green added that he’s “confident” this merger would “offer more travel options for Hawai’i residents and local businesses” and “enhance competition across the U.S. airline industry.”
What a merger of Alaska and Hawaiian Airlines means for travelers
The travel experts at Going.com — formerly Scott’s Cheap Flights — weighed in on the possible deal and what it could potentially mean for customers.
“Competition between airlines is the single biggest cause of cheap flights. A merger between two airlines — whose route maps have a portion of flights that overlap — would result not in more cheap flights for consumers but, to some extent, fewer,” Katy Nastro, a spokesperson for Going, told ABC News.
Additionally, the team of experts believe that certain markets may be affected worse than others.
“The Justice Department did not require concessions, meaning that Alaska could eventually make some cuts on routes that consistently underperform, such as the inter-island routes,” she explained.
There has been no official statement from the airline about when or where any possible changes to routes would take place.
(WASHINGTON) — Vice President Kamala Harris has unveiled a comprehensive agenda focused on cooling inflation, but many economists consider the fight against price increases to be nearly finished.
Inflation stands below 3% for the first time since 2021, U.S. government data earlier this month showed. The Federal Reserve is widely expected to cut interest rates at a meeting in September, suggesting that the central bank could retreat from its yearslong battle to slow prices.
Still, consumer prices have climbed more than 20% over the last three years, demoralizing shoppers and straining household budgets. Inflation continues to top lists of voter concerns.
Economists who spoke with ABC News described current price levels as an unfortunate reality that would be nearly impossible to undo, since an outright lowering of prices typically accompanies economic hardship that would require medicine more painful than the ailment.
However, some economists said Harris’ proposals could reduce prices for some essential goods, like food, while slowing inflation for items such as housing that are still seeing rapid price increases. Other economists said the measures amount to a solution for a problem that no longer exists, saying the tardy legislative fixes could stunt economic activity.
“We can’t unwind prices back to a certain place,” Catherine Pakaluk, a professor of economics at the Busch School of Business at Catholic University, told ABC News.
Since overall prices depend on a worldwide tug of war between supply and demand, general cost reductions would demand a significant economic shock to send that balance askew, Pakaluk added.
“All prices are linked together,” Pakaluk said. “We all have a sense, ‘If only we could reset prices back to where they were three years ago.’ But there’s no mechanism for that.”
In response to ABC News’ request for comment, the Harris campaign pointed to a speech that she delivered on Friday.
“When I am elected president, I will make it a top priority to bring down costs and increase economic security for all Americans. As president, I will take on the high costs that matter most to most Americans, like the cost of food,” Harris said.
“We all know that prices went up during the pandemic when the supply chains shut down and failed, but our supply chains have now improved and prices are still too high,” Harris added.
While acknowledging the difficulty of achieving overall price decreases, some economists noted a potential for price reductions in certain industries, especially the food and grocery sector targeted by Harris’ proposals.
Harris points to the market power of large corporations in the grocery industry as a key cause of rapid price increases for food, saying companies use their outsized role to raise prices without fear of a competitor offering a comparable product at a more affordable price. Consumers, the Harris campaign says, are left with nowhere to turn.
“Extreme consolidation in the food industry has led to higher prices that account for a large part of higher grocery bills,” the campaign said in a statement on Friday.
Dan Scheitrum, a professor of agribusiness at California Polytechnic State University, San Luis Obispo, said Harris’ plan to crack down on potential anti-competitive practices within the food sector could end up lowering prices for some household staples.
“If price fixing is taking place and it gets addressed, I expect that could undo some of the price increases,” Scheitrum said.
While general inflation has moderated, price increases for housing remain highly elevated. Housing prices climbed 5.1% over the year ending in July, soaring at a pace more than twice as fast as the overall inflation rate.
The Harris campaign proposed restoring affordability through a combination of boosting home supply and easing the price pressures for some homebuyers.
Economists who spoke with ABC News largely applauded Harris’ efforts to boost the housing supply but offered mixed opinions about a potential $25,000 subsidy for first-time homebuyers.
“We as economists commonly disagree, but the question of housing supply is something we kind of all agree about,” Pakaluk said
On the other hand, a $25,000 subsidy for some homebuyers could allow them to increase their bids and send prices higher, Pakaluk added. “It might have the opposite effect on price than they want,” Pakaluk said.
Peter Morici, a professor emeritus at the University of Maryland’s School of Business, warned against the economic consequences of any attempt to cool prices when they’re well on their way to normal levels.
“The price increases that we’ve seen are very difficult to reverse,” Morici told ABC News. “It can’t be solved, except with draconian measures.”
Other economists indicated that a wide-ranging effort to address inflation could play an important preventative role, safeguarding the economy against a price spike in the event of an emergency, such as another pandemic.
“Even if you’re back to being on budget rather than on edge, you’re still scared. You’ve had a really terrible experience from no fault of your own,” Isabella Weber, an economics professor at the University of Massachusetts Amherst who studies price controls, told ABC News.
“We have to prepare for the next shock,” Weber added.
(NEW YORK) — Trump Media & Technology Group’s stock dropped more than 11% this week, suffering from sour sentiment after a weak earnings report and the return of former President Donald Trump to rival social media platform X.
The company’s woes stretch back to the middle of last month. Since then, the stock for the Truth Social parent company has plummeted by about 43%. Yet as the stock continues to slide, some of its investors remain unfazed, telling ABC News they are optimistic about the company’s financial outlook, or intend to stand by it as an expression of their support for Trump.
Todd Schlanger, an interior designer from West Palm Beach, told ABC News that he purchased shares in Trump Media because he supports Trump’s politics and believes in his businesses.
“I’m a Republican, so I supported him. When I found out about the stock, I got involved because I support the company and believe in free speech,” said Schlanger, who said he owns approximately a thousand shares of the company.
A frequent user of the social media platform, Schlanger boasted about the user interface – “It’s like a combination of X and Facebook” – and said he looked forward to the expansion of the company’s streaming services.
“I think it’s going to be as strong as Facebook or Twitter,” said Schlanger.
Other investors said they primarily saw Truth Social as a way to support the former president.
“I did it more as a statement to President Trump and to show support at the time. I wasn’t really looking to make a lot of money,” said Teri Lynn Roberson, who bought five shares of the company as the company neared its peak stock price after going public in March.
Roberson said she was unconcerned about the stock’s poor performance or the impact of Trump’s potential return to rival X, the latter of which she said could benefit Trump’s presidential campaign by expanding his audience of supporters beyond the “echo chamber” of Truth Social.
“I’m way at a loss, but I am OK with that. I am just watching it for fun,” Roberson said.
Truth Social’s stock performance holds significant financial implications for the former president, who owns a 65% stake in the company. Truth Social shares make up a large portion of Trump’s overall net worth, according to Fortune.
Truth Social did not immediately respond to ABC News’ request for comment.
Truth Social’s recent losses
An earnings report released last Friday showed, Truth Social had lost more than $16 million over a three-month period ending in June. The company brought in revenue of about $836,000, down 30% from $1.2 million a year earlier, the earnings report showed.
In a statement released following the earnings report, Truth Social CEO Devin Nunes applauded the company’s balance sheet, including $344 million in cash and no debt.
“From the beginning, it was our intention to make Truth Social an impenetrable beachhead of free speech, and by taking extraordinary steps to minimize our reliance on Big Tech, that is exactly what we are doing,” Nunes said.
Investors, however, reacted poorly to the quarterly report when trading opened on Monday, and the stock price continued to drop when Trump then posted on rival X for the first time in roughly a year. It marked just his second post on the platform since January 2021, when the company suspended Trump in the aftermath of the Jan. 6 attack on the Capitol “due to the risk of further incitement to violence.”
After tech billionaire Elon Musk purchased what was then known as Twitter in Oct. 2022, he lifted the ban the following month. On Monday, Musk spoke with Trump in an interview that was broadcast on the platform.
While the former president is bound by an exclusivity agreement with Trump Media & Technology Group to post personal content first to Truth Social, Trump can make “politically-related” posts on other social media sites, according to the agreement. Other than a series of political posts on Monday, Trump has refrained from using social media sites beyond Truth Social.
Michael Rogers, who owns a masonry company in Asheville, North Carolina, said he first bought shares of Truth Social in 2022, before the company went public. Since then, Rogers has acquired more than 10,000 shares, he said.
Rogers, who said he plans to vote for Trump in November, bought the shares as both an expression of political support and as a sign of confidence in the company’s financial outlook, he said. “It’s a 50-50 balance of the reasons I started investing in Truth Social,” Rogers told ABC News.
Trump’s return to X this week did not bother Rogers, since the platform allows Trump to reach a larger audience, Rogers said. The weak earnings report last Friday did concern him, however.
“The revenue just isn’t there,” Rogers said. “That’s something the company has to work on.”
Despite the stock’s recent struggles, Rogers said he retains confidence in the business.
“I’m in it for the long haul,” Rogers said.
Analyst outlook
Analysts described the performance of Truth Social as the characteristic fluctuation of a so-called “meme stock.” The term – made famous by pandemic-era examples such as GameStop and AMC – indicates a company that largely appeals to investors on the basis of ideology, rather than financial outlook.
Truth Social’s value climbed about 30% in the immediate aftermath of an assassination attempt against Trump in July, reaching a price of $40 a share. That figure marked the highest level for the stock in more than a month, but shares still stood well below a peak of about $66.
The share price now stands at about $23, amounting to a drop of nearly two-thirds from its peak.
Tyler Richey, an analyst at Sevens Report Research, said the decline of the stock price in recent weeks has coincided with the emergence of Vice President Kamala Harris as the Democratic presidential nominee. A surge for Harris in voter surveys has damaged perception of Trump’s election prospects, Richey told ABC News.
“The stock has ebbed and flowed with sentiment toward former president Trump,” Richey said. “It doesn’t help that Trump was pretty much exclusively using Truth Social and decided to join Elon Musk with X.”
Jay Ritter, a professor of finance at the University of Florida, said Truth Social’s poor financial performance leaves it vulnerable to negative news and darkens its long-term outlook.
“For a long time, I’ve been saying that the stock will be volatile but that the long-run trend will be down,” Ritter said.
“What’s lacking for the true believer in the company story is, ‘OK, where is the business strategy that will be generating revenue?'” Ritter added, noting by contrast that it makes sense for die-hard Trump supporters to back the stock.
“I don’t think it’s irrational for people to do that,” Ritter said. “On the other hand, I generally don’t go out of my way to further line the pockets of billionaires.”
Trump supporters rushing to purchase shares in Truth Social provided other investors an opportunity to cash in on the company’s tumultuous stock price. With anticipation building ahead of Trump Media & Technology Group’s merger in March with Digital World Acquisition Corporation, Mitchell Standley exercised a few call options – contracts that allow an investor to buy a stock at a predetermined price – to make a 1,500% return on his investment.
“It was basically just a pump and dump,” Standley told ABC News. “I knew that once they merged, all of his supporters were going to dump a bunch of money into it and buy it up.”
Since March, Standley has avoided the company, he said, attributing its volatile stock performance to a lack of business fundamentals.
“I made my money and am staying away from it,” Standley said.
