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    in Finance

    China’s retail sales and industrial data miss expectations in August

    Retail sales rose by 2.1% in August from a year ago, missing expectations of 2.5% growth among economists polled by Reuters. That was also slower than the 2.7% increase in July.
    Industrial production rose by 4.5% in August from a year ago, lagging the 4.8% growth forecast by Reuters. That also marked a slowdown from a 5.1% rise in July.
    Fixed asset investment rose by 3.4% for the January to August period, slower than the forecast of 3.5% growth.

    Pictured here is a shopping mall in Hangzhou, China, on Sept. 9, 2024.
    Nurphoto | Nurphoto | Getty Images

    BEIJING — China’s retail sales, industrial production and urban investment in August all grew slower than expected, according to National Bureau of Statistics data released Saturday.
    Retail sales rose by 2.1% in August from a year ago, missing expectations of 2.5% growth among economists polled by Reuters. That was also slower than the 2.7% increase in July.

    Online sales of physical goods rose by just under 1% in August from a year ago, according to CNBC calculations of official data.
    Industrial production rose by 4.5% in August from a year ago, lagging the 4.8% growth forecast by Reuters. That also marked a slowdown from a 5.1% rise in July.
    Despite the miss, industrial production still grew faster than retail sales, “reflecting the structural imbalance imbedded in China’s economy, with stronger supply and weaker demand,” said Darius Tang, associate director, corporates, at Fitch Bohua.
    The firm expects the Chinese government will likely announce more, gradual stimulus in the fourth quarter to support consumption and real estate, Tang said.

    Fixed asset investment rose by 3.4% for the January to August period, slower than the forecast of 3.5% growth.

    The urban unemployment rate was 5.3% in August, an uptick from 5.2% in July.
    Among fixed asset investment, infrastructure and manufacturing slowed in growth on a year-to-date basis in August, compared to July. Investment in real estate fell by 10.2% for the year through August, the same pace of decline as of July.
    National Bureau of Statistics spokesperson Liu Aihua attributed the uptick in unemployment to the impact of graduation season. But she said that stabilizing employment requires more work.
    This year, the statistics bureau has been releasing the unemployment rate for people ages 16 to 24 who aren’t in school a few days after the wider jobless release. The youth unemployment rate in July was 17.1%.
    “We should be aware that the adverse impacts arising from the changes in the external environment are increasing,” the bureau said in an English-language statement. A “sustained economic recovery is still confronted with multiple difficulties and challenges.”
    This weekend, Saturday is a working day in China in exchange for a holiday on Monday. The country is set to celebrate the Mid-Autumn Festival, also known as the Mooncake Festival, from Sunday to Tuesday. The next and final major public holiday in China this year falls in early October.

    Growth in the world’s second-largest economy has slowed after a disappointing recovery from Covid-19 lockdowns. Policymakers have yet to announce large-scale stimulus, while acknowledging that domestic demand is insufficient.
    Other data released in the last week has underscored persistent weakness in consumption.
    Imports rose by just 0.5% in August from a year ago, customs data showed, missing expectations. Exports rose by 8.7%, beating expectations.
    Beijing’s consumer price index for August also disappointed analysts’ expectations with an increase of 0.6% from a year ago. More

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    Shein and Temu prices are set to get a lot higher as Biden takes aim at retailers linked to China

    Prices on Shein and Temu could rise by as much as 20% if the Biden administration successfully closes the so-called “de minimis loophole.”
    The loophole allows packages valued under $800 to avoid import duties and scrutiny at the border.
    Shein and Temu have said their low prices aren’t related to the de minimis exemption and instead, their innovative business models.

    A man walking past a logo of fast fashion e-commerce company Shein outside its office in Guangzhou in southern China’s Guangdong province. 
    Jade Gao | Afp | Getty Images

    The bottom of the barrel prices that have made Chinese-linked e-tailers Shein and Temu so popular with American consumers could soon rise if the Biden administration curtails their use of a trade law loophole.
    The companies, known for their $5 T-shirts and $10 sweaters, could see prices rise by at least 20% if the so-called de minimis provision is changed, a spokesperson for the Republican majority of the House Select Committee on the Chinese Communist Party told CNBC. The committee made the estimate after launching investigations into Shein and Temu more than a year ago.

    Neil Saunders, a retail analyst and the managing director of GlobalData, agreed the policy change would likely increase prices, but couldn’t say by how much. 
    “If the de minimis exemption is removed, then the cost of products from marketplaces like Shein and Temu will rise. They will still be cheap marketplaces but they won’t have quite the competitive edge on price that they do now,” Saunders told CNBC in an email. “That may lose them some market share or slow their growth, but they will likely respond by pushing into some higher-priced items to balance out their propositions.”
    On Friday morning, the Biden administration announced plans to bar overseas shipments of products that are subject to U.S.-China tariffs from being eligible for the de minimis exemption. 
    An obscure tariff law loophole that’s been around since the 1930s, the exemption allows packages with a value of less than $800 to enter the United States without the shippers paying import duties and with less scrutiny than larger containers. 
    The announcement comes after more than a year of scrutiny into the companies from lawmakers on both sides of the aisle and in particular, the House Select Committee on the CCP. 

    Both Shein and Temu declined to tell CNBC if they will raise prices due the proposed changes. The companies also disputed that their low prices are driven by the de minimis exemption and said their business models allow them to offer their ultra-affordable rates.
    A spokesperson for Shein noted that the company supports de minimis reform and was recently accepted into a voluntary, pilot program with U.S. Customs and Border Protection where it agreed to provide additional data about packages and shipments.

    A risk to their competitive edge 

    Over the last couple of years, the two companies have taken U.S. consumers by storm with their ultra-low prices and their ability to rapidly churn out trending styles far faster than competitors can. Shein is estimated to take in more than $30 billion in revenue annually, but it’s unclear what Temu’s sales are. Its parent company, PDD Holdings, saw $34.9 billion in revenue in fiscal 2023 — a 90% increase from the year ago period.
    As the companies have become go-to shopping destinations, they’ve taken market share from rivals that cater to similar consumer segments, such as H&M, Zara, Target, Walmart and Amazon.
    If Shein’s prices were to rise by 20%, it would put its assortment closer in line with those competitors, which could make it harder for it to compete.
    For example, the average price of a dress on Shein was $28.51 as of June 1, according to data from Edited, a London-based research firm that analyzed the company’s pricing strategy and shared metrics with Reuters.
    At the time, that price was well below the average cost for dresses at H&M and Zara, which were $40.97 and $79.69, respectively, according to Edited’s data. However, if costs were to rise by 20%, that would make the average dress price on Shein $34.21 – far closer to H&M’s average price.
    There’s no guarantee prices would rise 20% if the Biden administration’s proposal takes effect. Still, taken together with the company’s long shipping times, a smaller discount relative to Shein’s rivals may lead some consumers to opt for retailers that are closer to home. 
    “Ultimately, while reforming the de minimis rules makes for a fairer and more level playing field, like any tariff it will end up costing consumers more,” said Saunders. 

    Scrutiny of a digital darling

    Last year, the committee began investigating Shein and Temu for slave labor in their supply chains and zeroed in on their use of the de minimis exemption, claiming in a June 2023 report that both companies didn’t pay any import duties in 2022. Shein disputed that claim and said the company paid millions of import duties in 2022 and 2023. It has, however, acknowledged that cotton from banned regions has been found in its supply chain and said it’s working to rectify the issue. Temu didn’t respond to inquiries about slave labor in its supply chain.
    “As the Select Committee’s investigation into Shein and Temu revealed, the majority of products from Shein and Temu fall under the de minimis exception. This allows them to dodge U.S. Customs and evade the scrutiny other retailers face. The U.S. must urgently curb these shipments and force these companies to correct their anemic compliance practices,” a spokesperson for the committee told CNBC.
    The spokesperson added that “Congress must urgently make de minimis reform law.”
    As scrutiny of Shein intensified, its hopes of pulling off a long awaited U.S. public offering dwindled. 
    Lawmakers, eager to curtail the influence that Chinese-linked retailers were having on the U.S. economy and take steps they said would level the playing field for American companies, were unlikely to propose an outright ban of Shein and Temu, similar to what was done with social media company TikTok. 
    Instead, numerous lawmakers called for the U.S. Securities and Exchange Commission to block Shein’s IPO and targeted the de minimis exemption as the best way to curtail the company’s growth. 
    Now, more than a year into those efforts and Shein’s own sputtering charm offensive, its plans for a New York IPO are all but dead and it has turned to London in hopes of finding a friendlier reception. 
    In June, CNBC reported that Shein had confidentially filed for a public listing in London as it faced backlash in the U.S. 
    It’s unclear what impact the proposed de minimis changes will have on Shein’s IPO plans. More

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    Boeing warns strike will ‘jeopardize’ recovery, hurt aircraft production

    Chief Financial Officer Brian West said the financial impact of the strike will depend on how long it lasts, but noted it will affect the company’s production of its bestselling planes.
    Boeing workers overwhelmingly rejected a tentative labor agreement and walked off the job after midnight on Friday.
    The potential production disruption comes as the plane maker has been facing a slew of issues.

    Union members hold picket signs during a news conference following a vote count on the union contract at the IAM District 751 Main Union Hall in Seattle, Washington, US, on Thursday, Sept. 12, 2024. 
    M. Scott Brauer | Bloomberg | Getty Images

    Boeing CFO Brian West said the labor strike that began just after midnight Friday will hurt aircraft deliveries and “jeopardize” the company’s recovery, hours after factory workers overwhelmingly rejected a new labor contract and walked off the job.
    West said the financial impact of the strike will depend on how long it lasts, but that it will affect the company’s production of its bestselling planes, including its cash cow bestseller, the 737 Max, which is produced in Renton, Washington.

    “The strike will impact production and deliveries and our operations and will jeopardize our recovery,” West said at a Morgan Stanley conference on Friday. “So our immediate focus is to the laser-like focus on actions to conserve cash, and we will.”

    Boeing factory workers gather on a picket line during the first day of a strike near the entrance of a production facility in Renton, Washington, U.S., September 13, 2024. 
    Matt Mills Mcknight | Reuters

    He said Boeing’s priority is to get back to the bargaining table and “reach an agreement that’s good for our people, their families, our community.”
    Boeing shares fell sharply on Friday after Moody’s put all of Boeing’s credit ratings on review for a downgrade and Fitch Ratings said a prolonged strike could put Boeing at risk of a downgrade, actions that could drive up the borrowing costs of a manufacturer that already has mounting debt.
    Boeing shares closed nearly 4% lower Friday.
    West declined to say whether the company could meet a rate of producing 38 737 Max planes per month by the end of the year.

    Jefferies aerospace analyst Sheila Kahyaoglu had previously estimated that a 30-day strike could be a $1.5 billion hit for Boeing.
    West said Boeing’s immediate focus would be “on actions to conserve cash” and added that new CEO Kelly Ortberg would be working to restore relationships with the union.
    Boeing and the International Association of Machinists and Aerospace Workers had unveiled a tentative labor agreement on Sunday that included 25% wage increases over four years and other improvements to health-care and retirement benefits. But workers had been looking for raises of 40% and argued that it didn’t cover the increased cost of living.

    Read more CNBC airline news

    Workers in the Seattle area and in Oregon voted 94.6% to reject the proposal, and 96% voted in favor of a strike.
    They walked off the job after midnight on Friday.
    Boeing machinists last went on strike in 2008, a work stoppage that lasted nearly two months.
    The potential production disruption comes as the manufacturer has been facing a slew of issues. It’s struggled to ramp up production and restore its reputation following safety crises.
    A door plug blowout on a nearly new Boeing 737 Max 9 in January led the Federal Aviation Administration to bar Boeing from increasing output of its Max planes and the FAA to boost inspections at production plants, until the regulator is satisfied with its safety and quality procedures there.
    An FAA spokeswoman told CNBC on Friday that the agency will keep its inspectors at Boeing facilities during the strike.

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    Stocks often drop in September — but many investors shouldn’t care

    September is historically weak for U.S. stocks.
    However, long-term investors likely shouldn’t sell out of the market.
    The seasonal weakness was tied to banking and farming practices before the early 1900s. Nowadays, it’s likely entrenched in investor psychology, experts said.

    Traders on the New York Stock Exchange floor on Sept. 9, 2024.
    Spencer Platt | Getty Images News | Getty Images

    September historically hasn’t been kind to stock investors.
    Since 1926, U.S. large-cap stocks have lost an average 0.9% in September, according to data from Morningstar Direct.  

    September is the only month during that nearly century-long period in which investors experienced an average loss, according to Morningstar. They saw a profit in all other months.

    For example, February saw a positive 0.4% return, on average. While that performance is the second-lowest among the 12 months, is still eclipses September’s by 1.3 percentage points. July reigns supreme with an average return of almost 2%.
    The monthly weakness also holds true when looking just at more recent periods.
    For example, the S&P 500 stock index has lost an average 1.7% in September since 2000 — the worst monthly performance by more than a percentage point, according to FactSet.
    More from Personal Finance:Don’t expect ‘immediate relief’ from Fed rate cutAmericans have more than $32 trillion in home equityHow a top capital gains tax rate of 28% compares with history

    Historically, the last two weeks of September are generally the weakest part of the month, said Abby Yoder, U.S. equity strategist at J.P Morgan Private Bank.
    “Starting next week is when it would [tend to get] get a little bit more negative, in terms of seasonality,” Yoder said.

    Trying to time the market is a losing bet

    Alistair Berg | Digitalvision | Getty Images

    Investors holding their money in stocks for the long-term shouldn’t bail, Yoder said.
    Trying to time the market is almost always a losing bet, according to financial experts. That’s because it’s impossible to know when good and bad days will occur.
    For example, the 10 best trading days by percentage gain for the S&P 500 over the past three decades all occurred during recessions, according to a Wells Fargo analysis published earlier this year.

    Plus, average large-cap U.S. stock returns were positive in September for half the years since 1926, according to Morningstar. Put another way: They were only negative half of the time.
    As an illustration, investors who sold out of the market in September 2010 would have foregone a 9% return that month — the best monthly performer that year, according to Morningstar.
    “It’s all just random,” said Edward McQuarrie, a professor emeritus at Santa Clara University who studies historical investment returns. “Stocks are volatile.”

    Don’t put faith in market maxims

    Similarly, investors shouldn’t necessarily accept market maxims as truisms, experts said.
    For example, the popular saying “sell in May and go away” would have investors sell out of stocks in May and buy back in November. The thinking: November to April is the best rolling six-month period for stocks.

    It’s all just random.

    Edward McQuarrie
    professor emeritus at Santa Clara University

    “History shows this trading theory has flaws,” wrote Fidelity Investments in April. “More often than not, stocks tend to record gains throughout the year, on average. Thus, selling in May generally doesn’t make a lot of sense.”
    Since 2000, the S&P 500 saw gains of 1.1% from May to October, on average, over the six-month period, according to FactSet. The stock index gained 4.8% from November to April.

    Historical reason for September weakness

    There is a historical reason why stocks often fared poorly in September prior to the early 1900s, McQuarrie said.
    It ties into 19th century agriculture, banking practices and the scarcity of money, he said.
    At the time, New York City had achieved dominance as a powerful banking hub, especially after the Civil War. Deposits flowed to New York from the rest of the country during the year as farmers planted their crops and farmer purchases accumulated in local banks, which couldn’t put the funds to good use locally, McQuarrie said.

    New York banks would lend funds to stock speculators to earn a return on those deposits. In the early fall, country banks drew down balances in New York to pay farmers for their crops. Speculators had to sell their stock as New York banks redeemed the loans, leading stock prices to fall, McQuarrie said.
    “The banking system was very different,” he said. “It was systematic, almost annual and money always got tight in September.”
    The cycle ended in the early 20th century with the creation of the Federal Reserve, the U.S. central bank, McQuarrie said.

    ‘It gets in the psyche’

    Golero | E+ | Getty Images

    September’s losing streak is somewhat more baffling in modern times, experts said.
    Investor psychology is perhaps the most significant factor, they said.
    “I think there’s an element of these narratives feeding on themselves,” said Yoder of J.P Morgan. “It’s the same concept as a recession narrative begetting a recession. It gets in the psyche.”
    There are likely other contributing elements, she said.
    For example, mutual funds generally sell stock to lock in profits and losses for tax purposes — so-called “tax loss harvesting” — near the end of the fiscal year, typically around Oct. 31. Funds often start giving capital-gains tax estimates to investors in October.
    Mutual funds seem to be “pulling forward” those tax-oriented stock sales into September more often, Yoder said.

    I think there’s an element of these narratives feeding on themselves.

    Abby Yoder
    U.S. equity strategist at J.P Morgan Private Bank

    Investor uncertainty around the outcome of the U.S. presidential election in November and next week’s Federal Reserve policy meeting, during which officials are expected to cut interest rates for the first time since the Covid-19 pandemic began, may exacerbate weakness this September, Yoder said.
    “Markets don’t like uncertainty,” she said.
    But ultimately, “I don’t think anybody has a good explanation for why the pattern continues, other than the psychological one,” McQuarrie said. More

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    in Business

    U.S. lawmakers introduce bill to put regulations on sports betting operators

    Two U.S. lawmakers have introduced a bill to address sports betting at the federal level.
    The proposed legislation would focus on affordability, advertising and artificial intelligence.
    Operators, meanwhile, say the sports betting industry has brought benefits, such as tax contributions, and state regulations are adequate.

    Sen. Richard Blumenthal (D-CT) (L) and Rep. Paul Tonko (D-NY) hold a news conference to introduce online gambling legislation outside the U.S. Capitol on September 12, 2024 in Washington, DC. 
    Chip Somodevilla | Getty Images

    Sports gambling has exploded across the United States over the past six years and, in response, two lawmakers have introduced legislation that would implement federal regulations on the practice.
    Rep. Paul Tonko D-N.Y. and Sen. Richard Blumenthal, D-Conn., on Thursday introduced the Supporting Affordability and Fairness with Every Bet, or the SAFE Bet Act, which seeks to ensure sports betting operators comply with minimum federal standards and tries to address the public health implications resulting from the legalization of sports betting.

    “This relationship between the gambling industry and sports has reached intolerably dangerous levels, and it’s well past time for Congress to just to step up and make a difference,” Tonko said in a press conference on Thursday.
    The Supreme Court struck down the federal ban on sports betting in 2018. Six years later, sports betting has exploded across the United States, as 38 states have legalized it. The industry posted a record $11 billion in 2023, marking a 44% increase over the previous year, according to the American Gaming Association.
    It’s also brought billions in new revenue to states as they take a cut of the pie through taxes.
    The rapid growth has led to operators fronting big money to acquire customers through advertisements, promotions and enticements.
    “Now every single solitary moment of every sporting event across the globe has become a betting opportunity, whether you’re scrolling on social media, driving down the highway past billboards, or listening to your favorite podcast or radio station, sports betting ads are there to prompt you with an endless cascade of flashy promotions,” Tonko said.

    Gordon Douglas joined the lawmakers at the press conference and said he’s seen the challenges of gambling addiction firsthand with his son, 28-year-old Andrew Douglas. Gordon Douglas says his son, an athlete and coach, signed up with a gambling company and was then inundated with promotions and ads from at least six others.
    “He became a different person that would say anything to get money to gamble,” he said. “He reached a point of wanting to end his life because he saw no way out.”
    The Douglas family is not alone — an estimated 7 million people in the U.S. have a gambling problem, with one in five problem gamblers having attempted suicide, according to the National Institutes of Health and National Council on Problem Gambling.
    A July report found that the odds of bankruptcy filing in states with legal betting increased by as much as 25% to 30%.
    The lawmakers say they are not trying to ban gambling on sports — they are just trying to make it safe for the public to enjoy as a recreational activity by pushing for a national standard.
    “State regulation is faint-hearted and half-baked. That’s why we need a national standard — not to ban gambling — but simply to take back control over an industry that is out of bounds,” Blumenthal said Thursday.
    The bill addresses three key areas tied to sports betting: advertising, affordability and artificial intelligence.
    “This industry is exploiting the most advanced technology to make the most money,” Blumenthal said about AI.
    He said he wants to prohibit the use of AI to track player’s gambling habits and individual promotions.
    The bill is also pushing for changes to advertising, which includes prohibiting sportsbooks from advertising during live sporting events that are intended to induce gambling with “no sweat,” or “bonus” type bets.
    Finally, the legislation would limit customer deposits to five in a 24-hour period. It would mandate gambling operators ensure customers who wager more than $1,000 can afford to do so.
    “The gambling industry is following a playbook developed by the tobacco industry and this is a direct threat to public health,” said Richard Daynard, a law professor and president of the Public Health Advocacy Group at Northwestern.
    The sports betting operators, meanwhile, are fighting back and saying the industry has brought benefits.
    Chris Cylke, the American Gaming Association’s senior vice president of government relations, said the bill is “a slap in the face” to state regulators and gaming operators that have dedicated significant time and resources to developing the framework as the market evolves.
    “Today’s regulated sports wagering operators are contributing billions in state taxes across the U.S., protecting consumers from dangerous neighborhood bookies and illegal offshore websites, and working diligently with over 5,000 state and tribal regulators and other stakeholders to ensure a commitment to responsibility and positive play,” Clyke said.
    The bill has also received public opposition from Rep. Dina Titus, D-Nev., who called the SAFE Bet Act “outdated” and “unwarranted.”
    Douglas said his family has been able to get help for his son, but he wants to ensure that others don’t fall down a similar path.
    “We as a country should not allow him and others like him to be exploited,” he said. “We should do what is right to limit access to this type of gambling.”
    If you are having suicidal thoughts or are in distress, contact the Suicide & Crisis Lifeline at 988 for support and assistance from a trained counselor.
    — CNBC’s Contessa Brewer contributed to this report. More

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    Hedge fund billionaire and Trump donor John Paulson says market would ‘crash’ under Harris tax plans

    Hedge fund billionaire John Paulson, who made a name for himself by betting against the housing market during the financial crisis and who is today a prominent supporter of former President Donald Trump, said there could be a collapse in the financial markets and a recession if Vice President Kamala Harris’ proposed tax plans become a reality.
    “They want to raise the corporate tax rate from 21 to 28%, they want to raise the capital gains tax from 20% to 39% and then they want to add a tax on unrealized capital gains of 25%,” Paulson said in an interview on CNBC’s “Money Movers” on Friday with Sara Eisen. “I think if they implement those policies, we’ll see a crash in the markets, no question about it.”

    The Democratic presidential nominee proposed a 28% tax on long-term capital gains for any household with an annual income of $1 million or more, lower than the 39.6% rate that President Joe Biden laid out in his 2025 fiscal-year budget.
    Meanwhile, Harris previously endorsed the tax increases proposed by Biden that include a 25% tax on unrealized gains for households worth at least $100 million, known as the billionaire minimum tax. However, people close to the Harris campaign, including investor Mark Cuban, have said she has no interest in taxing unrealized gains and there are doubts if any such plan could make it through Congress.
    Paulson shot to fame and made a fortune after taking a massive bet against mortgage bonds using credit default swaps before the financial crisis. The founder and president of family office Paulson & Co. has been a major donor to Trump’s 2024 presidential campaign, reportedly advising him on the idea of building a U.S. sovereign wealth fund.
    The 68-year-old investor believes the economy could quickly tip into a recession as well if the specific plan to tax unrealized gains were to be implemented.
    “If the Biden-Harris team does come in, and they were to implement what’s on their platform, which is a tax on unrealized gain, that’s going to cause massive selling of homes, of stocks, of companies, of art and that could … put us immediately into a recession, so hopefully that if they are elected, they won’t pursue that,” he said.

    Some Wall Street economists and strategists do believe raising the corporate tax rate from the 21% where Trump lowered them could hit S&P 500 company earnings and weigh on share prices, but none from the major firms have said it would cause a pullback to the magnitude that Paulson is describing.
    There is also some concern that Trump’s economic plans would not be as market-friendly as Paulson believes with proposed tariffs reigniting some inflation and more tax cuts expanding the budget deficit.
    Paulson, who Trump has reportedly talked about as Treasury secretary in a second administration, said in the CNBC interview he does not believe that tariffs would be inflationary if targeted correctly. The investor also said the lower taxes would spark economic gains that help raise revenues and close the deficit gap.

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    United Airlines to offer free Wi-Fi using SpaceX’s Starlink

    United will start testing Starlink’s satellite Wi-Fi on its flights early next year.
    SpaceX has previously inked deals with Hawaiian Airlines and semi-private airline JSX.
    Delta and other carriers have been investing in faster inflight Wi-Fi and offering it for free.

    A United Airlines Boeing 737-MAX 8 aircraft departs at San Diego International Airport en route to New York on August 24, 2024 in San Diego, California. 
    Kevin Carter | Getty Images

    United Airlines said Friday that it plans to offer inflight Wi-Fi from SpaceX’s Starlink for free on its hundreds of jetliners, the biggest inflight internet deal yet for the SpaceX business.
    The team-up comes as airlines have been investing in faster inflight Wi-Fi, sometimes offering it for free, in a bid to attract higher paying customers like business travelers.

    Delta Air Lines announced in early 2023 that onboard internet would be free for members of its SkyMiles loyalty program. Hawaiian Airlines, which has a deal with Starlink, also offers complimentary inflight Wi-Fi. JetBlue Airways has offered free Wi-Fi for years.
    SpaceX also previously made a deal with semi-private airline JSX.
    United currently offers inflight internet from a hodgepodge of providers, including ViaSat and Panasonic, and charges loyalty program members $8 and everyone else $10 for access on domestic and short-haul international flights.
    The carrier said it expects to have Starlink on its more than 1,000 planes over the “next several years” with the first passenger flights outfitted with the service starting early next year. United said the Wi-Fi will offer “gate-to-gate” connectivity.
    United praised SpaceX’s satellite service, saying it provides “internet access around the world, including over oceans, polar regions and other remote locations previously unreachable by traditional cell or Wi-Fi signals,” a selling point for the U.S. airline with the most service over both the Atlantic and Pacific.
    SpaceX has steadily expanded its Starlink network and product offerings since its debut in 2020. There are currently about 6,000 Starlink satellites in orbit that connect more than 3 million customers in 100 countries, according to the company. SpaceX initially targeted consumer customers, but has expanded into other markets, including aviation.

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    Boeing factory workers strike for first time since 2008 after overwhelmingly rejecting contract

    More than 30,000 Boeing workers, members of the company’s biggest unionized group, walked off the job early Friday after staff rejected a new labor contract and approved a strike with a 96% vote.
    The work stoppage halts production of most of the company’s aircraft, including its bestselling 737 Max.
    The strike is another costly blow Boeing, which is trying to increase output and improve its reputation.

    Boeing’s factory workers walked off the job after midnight on Friday, halting production of the company’s bestselling airplanes after staff overwhelmingly rejected a new labor contract.
    It’s a costly development for the manufacturer that has struggled to ramp up production and restore its reputation following safety crises.

    Workers in the Seattle area and in Oregon voted 94.6% against a tentative agreement that Boeing and the International Association of Machinists and Aerospace Workers unveiled Sunday. The workers voted 96% in favor of a strike, far more than the two-thirds vote required for a work stoppage.
    “We strike at midnight,” said IAM District 751 President Jon Holden at a news conference where he announced the vote’s results. He characterized it as an “unfair labor practice strike,” alleging that factory workers had experienced “discriminatory conduct, coercive questioning, unlawful surveillance and we had unlawful promise of benefits.”

    Union members cheer during a news conference following a vote count on the union contract at the IAM District 751 Main Union Hall in Seattle, Washington, US, on Thursday, Sept. 12, 2024. 
    M. Scott Brauer | Bloomberg | Getty Images

    He said Boeing needs to bargain in good faith.
    Boeing didn’t comment on his claims.
    “The message was clear that the tentative agreement we reached with IAM leadership was not acceptable to the members,” the company said in a statement. “We remain committed to resetting our relationship with our employees and the union, and we are ready to get back to the table to reach a new agreement.”

    Stephanie Pope, CEO of Boeing’s commercial airplane unit, told machinists earlier this week that the tentative deal was the “best contract we’ve ever presented.”
    “In past negotiations, the thinking was we should hold something back so we can ratify the contract on a second vote,” she said. “We talked about that strategy this time, but we deliberately chose a new path.”

    Workers with picket signs outside the Boeing Co. manufacturing facility during a strike in Renton, Washington, US, on Friday, Sept. 13, 2024. 
    M. Scott Brauer | Bloomberg | Getty Images

    The tentative proposal included 25% wage increases and other improvements to health-care and retirement benefits, though the union had sought raises of about 40%. Workers had complained about the agreement, saying that it didn’t cover the increased cost of living.
    The vote is a blow to CEO Kelly Ortberg, who has been in the top job for five weeks. A day before the vote, he had urged workers to accept the contract and not to strike, saying that it would jeopardize the company’s recovery.
    Under the tentative agreement, Boeing had promised to build its next commercial jet in the Seattle area, a bid to win over workers after the company moved the 787 Dreamliner production to a nonunion factory in South Carolina.

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    The agreement, if approved, would have been the first fully negotiated contract for Boeing machinists in 16 years. Boeing workers went on strike in 2008 for nearly two months.
    The ultimate financial impact of this strike will depend on how long it lasts. Boeing shares fell 4% in premarket trading Friday.
    Jefferies aerospace analyst Sheila Kahyaoglu estimated a 30-day cash impact from a strike could be a $1.5 billion hit for Boeing and said it “could destabilize suppliers and supply chains.” She forecast the tentative agreement would have had an annual impact of $900 million if passed.
    Boeing has burned through about $8 billion so far this year and has mounting debt. Production has fallen short of expectations as the company works to stamp out manufacturing flaws and faces other industrywide problems such as supply and labor shortages.
    A door plug blowout on a nearly new Boeing 737 Max 9 at the start of the year has brought additional federal scrutiny of Boeing’s production lines. 

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