Good morning. Motorists in the US will be cheering the news today that the average price of a gallon of gasoline has dropped to $3.99, tumbling from a record high of more than $5 in mid-June, according to AAA.
Cheaper US petrol has helped to rein in high inflation. Data on the Consumer Price Index showed that inflation rose 8.5 per cent in July from a year earlier, a slower uptick than had been expected, and a lot lower than the June rise of 9.1 per cent.
Signs that the world’s biggest economy could be past the peak of super-hot inflation offered some comfort to the Federal Reserve, which has been on a campaign to cool price surges by raising interest rates.
But Mary Daly, president of the San Francisco branch of the Fed, said it was not enough for a victory lap. Inflation is still way above the bank’s 2 per cent target rate, and “core” prices — which strip out volatile items such as energy and food — rose in July at an unchanged pace of 5.9 per cent year on year. Daly told the Financial Times that another rate rise in September was still on the table.
The prospect of lay-offs is also giving policymakers a headache. From Netflix to Walmart, businesses have warned of job cuts even as, a little confusingly, unemployment has dropped to a record low. Why are so many jobs under threat?
Thanks for checking in with FirstFT Americas today, see you tomorrow — Georgina
Five more stories in the news
1. Donald Trump pleads the Fifth in New York state probe The former US president refused to answer questions at a deposition in a New York state probe into his businesses yesterday, invoking his constitutional right against self-incrimination amid deepening legal woes.
2. Fox predicts record political ad spending in US midterms Fox Corporation chief Lachlan Murdoch has predicted that the November midterm election cycle will be the most lucrative in US history, outstripping the $12bn of spending in the 2020 Trump election year.
3. US charges Iranian national with plot to murder John Bolton Federal prosecutors said they believed 45-year-old Shahram Poursafi, a member of Iran’s elite Revolutionary Guards who also goes by the name Mehdi Rezayi, had plotted to assassinate Donald Trump’s former adviser.
4. Credit Suisse steps up legal claim against SoftBank The Swiss lender has intensified its legal fight against the Japanese tech investor as it seeks to recoup hundreds of millions of dollars on behalf of its wealthiest clients that it had lent through the defunct Greensill Capital.
SoftBank gain: The Japanese group is expected to post a gain of more than $34bn by turning over a chunk of its holdings in Chinese ecommerce group Alibaba.
5. Disney adds 14.4mn streaming subscribers Walt Disney defied concerns about an industry slowdown by adding subscribers to its Disney Plus service in the latest quarter, pushing its total number of paying customers to 221mn. But the media group reduced its long-term guidance due to its loss of rights to stream Indian Premier League cricket matches.
The day ahead
US jobless claims New applications for unemployment aid are estimated to have tallied 263,000 in the week that ended August 6.
Producer price index figures PPI, which tracks the prices that businesses receive for their goods, is forecast to have risen 0.2 per cent in July from the previous month, according to analysts polled by Refinitiv. The annual increase in July is expected to have decreased slightly from June.
Mexico interest rate decision Mexico’s central bank is expected to raise its benchmark interest rate 0.75 percentage points to 8.5 per cent at its monetary policy meeting this afternoon.
Corporate earnings Companies due to report earnings include Brookfield Asset Management, theme park company Six Flags and Canada Goose. Earlier, Siemens reported its first quarterly loss in nearly 12 years, after it was forced into a multibillion-euro write down on its spun-off energy business and wound down its 170-year-old operation in Russia. Electric carmaker Rivian and media group Endeavor are reporting after the bell.
Golf’s PGA tour playoffs begin A US judge has denied a request from three professional golfers to play in the first event of the playoffs in Memphis, Tennessee, after they defected this summer to the LIV Golf circuit, a start-up league backed by Saudi Arabia’s sovereign wealth fund.
Russian crude restored to southern Druzhba pipeline Hungarian energy company MOL has paid oil transit fees to Ukraine on behalf of a Kremlin-controlled company in order to restart flows of crude. The Energy Information Administration and Opec also publish their monthly oil market reports.
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What else we’re reading
Whatever happened to Mandela’s dream for South Africa? In the latest Rachman Review podcast, Gideon talks to the South African writer and political activist, Songezo Zibi, about the need to build a coalition for change to help restore some of the high hopes that accompanied the end of apartheid.
Social media’s big bet: shopping revolution will be livestreamed Internet platforms including TikTok, YouTube and Amazon are declaring live ecommerce as the future of retail. But early experiments in the UK and US suggest there is still a long way to go to overcome low viewing numbers, poor sales, clunky tech and logistical challenges.
In praise of boredom The last time Jemima Kelly was truly bored was a year ago, during a seemingly never-ending church service in France. But after the ordeal was over, she noticed that her feelings of pleasures had intensified. Boredom, it turns out, could help our ultra-connected lives.
Germany’s economy stutters The country’s prospects have become “fragile”, according to its finance minister, with growth forecasts downgraded and life becoming “much more expensive for lots of people”. Here’s how the eurozone’s powerhouse became a weak link.
What next for Brittney Griner — and for women’s sport? Griner is currently the most famous basketball player in the world, not for her two Olympic gold medals or her five professional championships across the EuroLeague and the WNBA, but because she’s become a political pawn.
Remembering a truly modern icon
Following the news of the death of Issey Miyake in Tokyo on August 5 2022 at the age of 84, take a tour around the fashion designer’s inimitable creations through the eyes of his fans, who praised the clothing’s inclusivity and “malleability”.
Source: Economy - ft.com
