Business Highlights: US growth rate upgraded; GM says it can handle rising labor costs
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US economic growth for last quarter is revised up to a 5.2% annual rate
WASHINGTON (AP) — Shrugging off higher interest rates, America’s consumers spent enough to help drive the economy to a brisk 5.2% annual pace from July through September, the government said in an upgrade from its previous estimate. The government had previously estimated that the economy grew at a 4.9% annual rate last quarter. In the current fourth quarter, though, economists say growth is likely slowing sharply from the cumulative effects of higher borrowing rates on consumer and business spending. TD Economics, for example, expects growth in the October-December period to come in at a 1.8% annual rate. Wednesday’s second estimate of growth for the July-September quarter confirmed that the economy sharply accelerated from its 2.1% rate from April through June.
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GM says it can handle rising labor costs as it announces huge share buyback and dividend increase
DETROIT (AP) — Clearly frustrated with its languishing share price, General Motors is announcing a massive stock buyback plan, raised its dividend and told investors it can absorb increased labor costs from a six-week autoworkers strike. The Detroit company said Wednesday that it lost production of 95,000 vehicles due to the United Auto Workers walkouts, costing $1.1 billion. But due to $2 billion worth of annual efficiency gains and cost reductions, the company said it can can handle $9.3 billion in labor cost increases expected through April of 2028. The company plans to buy back $10 billion of its shares over the next year, about one quarter of its $44 billion market value. In January, GM will raise its dividend by a third to 12 cents per share.
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Consumer Reports: Electric vehicles less reliable, on average, than conventional cars and trucks
DETROIT (AP) — Electric vehicles have proved far less reliable, on average, than gasoline-powered cars, trucks and SUVs, according to the latest survey by Consumer Reports, which found that EVs from the 2021 through 2023 model years encountered nearly 80% more problems than did vehicles propelled by internal combustion engines. Consumer Reports said EV owners most frequently reported troubles with battery and charging systems as well as flaws in how the vehicles’ body panels and interior parts fit together. The magazine noted that EV manufacturers are still learning to construct completely new power systems, and it suggested that as they do, the overall reliability of electric vehicles should improve.
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Blackstone acquires pet care app Rover in $2.3 billion all-cash deal
Private equity giant Blackstone will acquire the pet care app Rover in an all-cash deal valued at $2.3 billion, the companies announced Wednesday. Shares of Rover climbed about 28% on news of the deal, which will pay Rover shareholders $11 per share. Blackstone said that amounts to a 61% premium over the Rover’s average share price during the past 90 trading days. The deal is expected to close in the first quarter of 2024, at which time Rover will no longer be a publicly-traded company. Rover was founded in 2011, connecting pet owners with care providers who provide boarding, in-home pet sitting and dog walking, among other services.
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Stock market today: Wall Street drifts to a mixed close, weighed down by Big Tech
NEW YORK (AP) — Stocks drifted to a mixed close on Wall Street as drops in several Big Tech companies offset gains in other parts of the market. The S&P 500 gave up an early gain and closed down 0.1% Wednesday. The Nasdaq composite fell 0.2% and the Dow eked out a gain of 13 points. Facebook parent company Meta fell 2% and Google’s parent company Alphabet gave up 1.6%. General Motors jumped 9.4% after the automaker announced a big stock buyback, raised its dividend and said it wouldn’t have any trouble absorbing the costs of its new labor contract. Treasury yields fell.
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The world economy will slow next year because of inflation, high rates and war, OECD says
WASHINGTON (AP) — The global economy, which has proved surprisingly resilient this year, is expected to falter next year under the strain of wars, still-elevated inflation and continued high interest rates. The Paris-based Organization for Economic Cooperation and Development estimated Wednesday that international growth will slow to 2.7% in 2024 from an expected 2.9% pace this year. That would amount to the slowest growth since the pandemic year of 2020. A key factor is that the OECD expects the world’s two biggest economies, the United States and China, to decelerate next year. The U.S. economy is forecast to expand just 1.5% in 2024, from 2.4% in 2023, as the Federal Reserve’s interest rate increases restrain growth.
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UAW will try to organize workers at all US nonunion factories after winning new contracts in Detroit
DETROIT (AP) — The United Auto Workers union has announced plans to try to simultaneously organize workers at more than a dozen nonunion auto factories. The drive comes less than two weeks after the union ratified new contracts with Detroit automakers. The UAW said Wednesday that its effort will cover nearly 150,000 workers at factories largely in the South, where the UAW has had little success in recruiting new members. The drive will target U.S. plants run by Toyota, Honda, Hyundai, Nissan, Subaru, Mazda, Volkswagen, Mercedes, BMW and Volvo. Also on the union’s list are U.S. factories run by electric vehicle sales leader Tesla, as well as EV startups Rivian and Lucid.
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Buffett’s Berkshire Hathaway says Haslams offered bribes to inflate Pilot truck stops earnings
OMAHA, Neb. (AP) — Warren Buffett’s Berkshire Hathaway says the billionaire Haslam family tried to bribe at least 15 executives at the Pilot truck stop chain with millions of dollars to get them to inflate the company’s profits this year because that would force Berkshire to pay more for the Haslams’ remaining 20% stake in the company. Last month, the Haslam family, which includes Cleveland Browns owner Jimmy Haslam and former Tennessee governor Bill Haslam, accused Berkshire of trying to understate Pilot’s earnings this year by changing its accounting practices. A hearing on Berkshire’s counter lawsuit is planned for Thursday. Pilot’s earnings will be used to determine how much Berkshire will pay whenever the Haslams decide to sell their remaining stake.
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Feminist website Jezebel will be relaunched by Paste Magazine less than a month after shutting down
NEW YORK (AP) — The irreverent feminist website Jezebel is making a comeback less than a month after it was shut down. Paste Magazine, a digital pop culture publication, announced Wednesday that it was buying Jezebel.com from G/O Media, which closed Jezebel and laid off its staff earlier this month. In an announcement on its website, Paste said it had “moved quickly to try and save” Jezebel after learning of its closure. The acquisition was first reported by the New York Times, which said it was an all-cash deal. G/0 Media said it closed Jezebel after trying unsuccessfully for months to find a buyer.
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The S&P 500 fell 4.31 points, or 0.1%, to 4,550.58. The Dow Jones Industrial Average rose 13.44 points, or less than 0.1%, to 35,430.42. The Nasdaq composite shed 23.27 points, or 0.2%, to 14,258.49. The Russell 2000 index of smaller companies gained 11 points, or 0.6% to 1,803.81.