Economy

(Reuters) -Rivian slashed its full-year production forecast on Friday and missed third-quarter deliveries expectations due to a parts shortage and slowing growth in electric-vehicle demand, sending shares of the startup down nearly 9%.The company said the shortage of the part, used in its R1 SUV and R1T pickups as well as its delivery vans, began in the third quarter and has become more acute in recent weeks. Rivian did not identify the part or the supplier for the component. Amazon (NASDAQ:AMZN).com-backed Rivian (NASDAQ:RIVN) now expects full-year production to be between 47,000 and 49,000 vehicles, down from its earlier forecast of 57,000 vehicles. The forecast cut means the company now expects to make fewer vehicles than it did last year.Slowing growth in electric-vehicle demand has affected the entire industry, as Americans dealing with high interest rates turn to cheaper hybrids. U.S. market leader Tesla (NASDAQ:TSLA) also missed quarterly deliveries estimates earlier this week.”The cut to its production guidance was substantial and it is likely to raise a variety of questions surrounding RIVN’s ability to turn the corner towards generating a gross profit,” said Garrett Nelson, senior equity analyst at CFRA Research.The company said it plans to turn its first profit in the last three months of the year. To aid that effort, Rivian had closed its only manufacturing facility, in Normal, Illinois, for three weeks earlier this year to simplify its manufacturing processes and cut the cost of building its vehicles. Lowering costs is crucial for Rivian as it looks to weather the demand slowdown and increase production of its R1 models, while gearing up to manufacture its smaller R2 models in 2026.The company said it handed over 10,018 vehicles in the quarter ended Sept. 30, compared with estimates of 12,078, according to 15 analysts polled by Visible Alpha.Rivian reaffirmed its annual deliveries forecast of 50,500 to 52,000 vehicles. Analysts were expecting 53,491, according to Visible Alpha.German automaker Volkswagen (ETR:VOWG_p) said earlier this year it will invest up to $5 billion in Rivian as part of a joint venture which could help it boost its cash reserves and turn cash flow positive.  More

(Reuters) -The resolution of a U.S. port strike is likely to keep global supply chain pressures on a calm footing, allowing for a continued slowdown in inflation, an index tracked by the New York Federal Reserve showed on Friday.The regional Fed bank’s global supply chain pressure index, which measures how readings deviate from historical averages, eased to a reading of 0.13 in September. That ended an upward trend which saw the index move from -0.96 in April to 0.2 in August. Global supply chain pressures have hovered right around normal or less than normal since early 2023, and their relative softness has played a key role in an ebbing of inflation that allowed the Fed to kick off its interest rate-cutting cycle last month. Supply chain disruptions during the onset of the COVID-19 pandemic and its early stage played a key role in driving U.S. inflation to 40-year highs in 2022.Progress in lowering inflation pressures had been threatened by the now-suspended port strike on the U.S. East Coast and Gulf Coast. Speaking on Friday after the U.S. government reported that job growth last month surged, Chicago Fed President Austan Goolsbee told Bloomberg Television that “you really couldn’t ask realistically for a better report for the economy, coupled with finding out that the port strike is not going to be an extended matter … those are two pieces of very good news for the economy.” There had been fears in financial markets that an extended strike could reignite inflation by disrupting trade, which in turn could raise doubts about the Fed’s ability to continue on the rate-cut path that it’s policymakers have outlined. The deal struck between the alliance of port operators and the union representing thousands of dockworkers late on Thursday removes a risk to the economy and eases the threat of “a potential near-term resurgence in supply chain disruptions and inflation,” Joseph Brusuelas, chief economist at RSM US LLP, said in a note to clients. The U.S. economy, however, is not fully out of the woods because of the tentative nature of the agreement, which calls for the two sides to fully hash out the details of a new contract by Jan. 15, 2025.That deadline “threatens to exacerbate supply chain bottlenecks as it coincides with critical shipping cycles, including replenishment of inventories post-holiday, spring season product positioning and preparations for the Chinese New Year,” said John Donigian, senior director of supply chain strategy at Moody’s (NYSE:MCO).”If an agreement isn’t reached by January, we could see a repeat of delays and cost surges, impacting consumer prices and market stability,” he added. More

NEW YORK/PARIS (Reuters) -French President Emmanuel Macron has given top U.S. financiers a candid assessment of his country’s financial woes, flagging the potential for looming tax increases, sources said this week, in an effort to tamp down concerns over France’s gaping deficit. Macron, a former investment banker, met with more than a dozen Wall Street executives in New York during the U.N. General Assembly late last month, aiming to reassure them about France’s deteriorating fiscal outlook, according to three people who heard Macron speak. In a more than one-hour meeting with 13 senior financiers and asset managers including Goldman Sachs President John Waldron and Blackstone (NYSE:BX) CEO Stephen Schwarzman, Macron offered a frank view of the French and European economies, they said.Mary Erdoes, CEO of JPMorgan asset and wealth management, Jim Zelter, president of Apollo Global Management (NYSE:APO) and Morgan Stanley’s co-president Dan Simkowitz also attended the meeting.Macron spoke about increasing taxes to fund the country’s budget, one of the participants told Reuters, speaking on condition of anonymity because the meeting was private. The president was also candid about France’s economic challenges, the source said.He also touted France as a potential investment destination and discussed how to expand business from multinational companies.Macron was well acquainted with the meeting participants after seven years of holding “Choose France” summits. Those gatherings sought to shift investor perceptions of France as a dynamic, pro-business nation instead of a sclerotic, high-tax country.He met the bankers on Sept. 24 just as his new minority government was starting to thrash out a budget to address a deficit that risks topping 6% this year, fueling speculation about tax hikes.The meeting followed a smaller, but similar gathering during the Olympics in Paris this summer.Europe’s economic slowdown has spurred the need to consolidate public finances through targeted, and temporary, tax increases, Macron said, according to a second person who was present at the meeting.The hikes would mark a U-turn for France, which cut taxes for big business under Macron. He asked investors at the meeting to not over react to any tax increases, and said his goal was primarily to cut spending.Foreign investors own around 50% of France’s overall government debt, much higher than other euro zone countries including Italy, Spain and Germany. Macron aides said the president has been focused on France’s credibility with investors since the summer’s snap election, which resulted in a hung parliament and political uncertainty. Macron’s office declined to comment beyond the brief statement it made last week announcing the meeting.In a clear sign of investor nerves, French borrowing costs, which are typically lower than Spain’s because the country is seen as less risky, have exceeded Spanish ones.Still, Macron avoided making promises to the assembled financiers, the first participant said.The president is taking a proactive approach in meeting with business leaders, a third person said. The Wall Street gathering came a week before Prime Minister Michel Barnier announced that he planned to bring the deficit down to 5% in 2025 by cutting spending and raising some taxes temporarily on big corporations and wealthy individuals. Barnier’s budget minister has spoken of a 60-billion-euro belt-tightening drive next year.Macron also discussed artificial intelligence, nuclear energy and regulations, the participants said.  More

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The September jobs report was surprisingly strong, and the details show that growth came from many different areas of the economy.
The biggest contributions came from leisure and hospitality, with 78,000 new positions, and health care and social assistance, at 71,700. If private education was added to the health-care group, as some economists do, that category would have been the biggest growth area of the month.

Within hospitality, food services and drinking places saw jobs jump by 69,000. That is a notable increase from the average monthly gain of 14,000 over the past year, according to the Bureau of Labor Statistics.
Government and construction were also bright spots, adding 31,000 and 25,000 jobs, respectively. Professional and business services grew by 17,000 jobs, which is a notable change for a category that had shed jobs in recent months.
LPL Financial’s chief economist, Jeffrey Roach, said in a note to clients that the report showed “fairly broad-based” job growth, but did highlight that the percent of workers holding multiple jobs rose 5.3%.
“This solid report increases the odds that the economy will continue to grow above trend in the next quarter. … The only caution flag could be the rise in those with multiple jobs,” Roach said.
Two key areas that lost jobs last month were manufacturing and transportation and warehousing, though each category shrank by fewer than 10,000 jobs.

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Black and Hispanic workers experienced a decline in unemployment, while the rate held steady for Asian workers.
The jobless rate fell significantly for both Black and Hispanic men.
The labor force participation rate rose for Black workers, while slipping for Asian and Hispanic workers

Job seekers attend the JobNewsUSA.com South Florida Job Fair held at the Amerant Bank Arena in Sunrise, Florida, on June 26, 2024.
Joe Raedle | Getty Images

The unemployment rate for men in Black and Hispanic racial groups declined in September while staying little-changed for other racial groups, according to data released Friday by the Department of Labor.
In September, Black men saw their jobless rate fall to 5.1% from 5.9% in the month prior. The jobless rate similarly fell for Hispanic men to 4.1% from 4.8% last month.

The overall unemployment rate inched lower to 4.1% in September, down just 0.1 percentage point from August.

“The Black unemployment rate is still 1.5 times that of white workers, but it edged down in September to the lowest level since April,” said Bankrate economic analyst Sarah Foster. “Black unemployment typically holds about two times higher than White unemployment, among the first to be laid off. Meanwhile, the unemployment rate for Hispanic workers hit the lowest since June.”
This marks the first fall in unemployment for Black workers in five months, Foster added.
Meanwhile, the jobless rates for other racial groups remained little changed or fell slightly. Unemployment for Asian workers held steady at 4.1%. For white workers, it inched down to 3.6% from 3.8% in September.
The jobless rate for women across racial groups recorded small declines. Black and Hispanic women both experienced a 0.2% drop in unemployment in September to 5.3% and 4.8%, respectively. Unemployment for white women also ticked lower to 3.1% from 3.4%. The jobless rates for Asian workers separated by gender were not readily available.

The employment-to-population ratio for female prime-age workers, or those ages 25 to 54, fell to its lowest level since May.
“Prime-age labor force participation still remains near a historic high despite ticking down from its recent record-setting high in August,” said Foster.
Last month, the labor force participation rate — the percentage of the population that is either employed or actively seeking work — was unchanged at 62.7%.

Among white workers, the rate inched up just 0.1 percentage point to 62.4%, while it fell to 67.4% from 67.8% for Hispanic workers. Among Asian workers, participation slipped to 65.3% from 65.5%, and rose among Black workers to 62.9% from 62.7%.
— CNBC’s Gabriel Cortes contributed to this report.

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By Katie PaulNEW YORK (Reuters) – Facebook (NASDAQ:META) owner Meta announced on Friday it had built a new AI model called Movie Gen that can create realistic-seeming video and audio clips in response to user prompts, claiming it can rival tools from leading media generation startups like OpenAI and ElevenLabs. More