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Business Highlights

·5 min read

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Powell: Higher inflation temporary, no rate hikes in sight

WASHINGTON (AP) — Federal Reserve Chair Jerome Powell says inflation will likely pick up in the coming months but the increase will be temporary, and won’t be enough for the Fed to alter its low-interest rate policies. Powell also said Thursday that the outlook for the economy has improved, after three months of weak job gains, but warned that the economy and job market are still far from fully recovered. As the economy reopens in the coming months with vaccines more widely distributed, many economists expect a spending boom that will stretch available supplies of goods and services. That additional spending could send prices up in some sectors of the economy.

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US jobless claims tick up to 745,000 as layoffs remain high

WASHINGTON (AP) — The number of Americans applying for unemployment benefits edged higher last week to 745,000, a sign that many employers continue to cut jobs despite a drop in confirmed viral infections and evidence that the overall economy is improving. Thursday’s report from the Labor Department shows that jobless claims rose by 9,000 from the previous week. Though the pace of layoffs has eased since the year began, they remain high by historical standards. Before the virus flattened the U.S. economy a year ago, applications for unemployment aid had never topped 700,000 in any week, even during the Great Recession. All told, 4.3 million Americans are receiving traditional state unemployment benefits.

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OPEC, Russia send oil price up with deal to contain output

FRANKFURT, Germany (AP) — Members of oil producer cartel OPEC and allied countries have agreed to leave most of their existing oil production cuts in place. OPEC countries led by Saudi Arabia joined with non-members led by Russia to reach the deal in an online meeting Thursday. Most significantly, one million barrels per day in voluntary cuts from Saudi Arabia will remain in place at least through April. The decision pushed the price of crude oil sharply higher in global markets. The U.S. contract spiked 5.6% higher to $64.70 a barrel.

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Tech pulls stocks lower as bond yields continue upward march

NEW YORK (AP) — Stocks turned lower on Wall Street as bond yields made another upward spike, renewing pressure on high-flying technology companies. The S&P 500 fell 1.3% Thursday, its third straight loss. The Nasdaq pulled back 2.1%. The losses came as the yield on the 10-year Treasury rose sharply during a question-and-answer session with Federal Reserve Chair Jerome Powell during which Powell said that any pickup in inflation in coming months would likely be temporary, disappointing investors who were hoping for a firmer stance against inflation. The price of oil rose 4.2% after OPEC members agreed to leave most of their existing production cuts in place.

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US suspends tariffs on UK goods to resolve aircraft dispute

LONDON (AP) — The U.S. has agreed to suspend millions of dollars’ worth of tariffs on U.K. exports including Scotch whisky as part of an effort to resolve a long-running trans-Atlantic trade dispute over aerospace subsidies. The two countries said in a joint statement on Thursday that Washington will suspend tariffs for four months on a range of goods. It’s a fresh move to de-escalate trade tensions centred around aid for Boeing and Airbus. Scotch whisky distillers cheered the news that the 25% tariff would be cut to zero. Scottish cashmere producers, pig farmers, and Stilton cheese makers will also benefit from the suspension of tariffs.

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AP Interview: DOE reviving loan program, Granholm says

WASHINGTON (AP) — The Biden administration is reviving an Energy Department program that disbursed billions of dollars in loan guarantees to companies such as electric car maker Tesla and the failed solar company Solyndra. In an interview with The Associated Press, Energy Secretary Jennifer Granholm says that up to $40 billion in guarantees will be made available for a variety of clean-energy projects. They include wind, solar and hydro power, advanced vehicles, geothermal and even nuclear. The loan program helped launch the country’s first utility-scale wind and solar farms as part of the Obama administration’s efforts to create “green jobs,? but it largely went dormant under President Donald Trump.

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EU wants employers to report pay levels to fix gender gap

BRUSSELS (AP) — The European Union executive wants to force employers to be much more open about how much their staff earn to make it easier for women to challenge wage imbalances and close the gender pay gap. Although the gender pay gap across the 27-nation bloc has been reduced to 14% for people doing exactly the same work, the European Commission wants to eliminate the disparity by imposing specific rules to make pay levels public. EU Commission President Ursula von der Leyen says that “For equal pay, you need transparency. Women must know whether their employers treat them fairly.”

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The S&P 500 fell 51.25 points, or 1.3%, to 3,768.47. The Dow Jones Industrial Average lost 345.95 points, or 1.1%, to 30,924.14. The Nasdaq composite dropped 274.28 points, or 2.1%, to 12,723.47. The Russell 2000 index of smaller companies gave up 60.87 points, or 2.8%, to 2,146.92.

The Associated Press