Business Highlights: Climbing US prices, oil company profits
Inflation and wage data suggest US prices will keep climbing
WASHINGTON (AP) — Inflation surged in June and workers’ average wages accelerated in the spring — signs that Americans won’t likely feel any relief from rising prices anytime soon and that the Federal Reserve will feel compelled to further raise borrowing costs. An inflation gauge closely tracked by the Fed jumped 6.8% in June from a year ago, the biggest such jump in four decades. On a month-to-month basis, too, prices surged 1% in June, the biggest month-over-month rise since 2005. Friday’s figures underscored the persistence of the inflation that is eroding Americans’ purchasing power, dimming their confidence in the economy and threatening Democrats in Congress in the run-up to the November midterm elections.
Unprecedented profit for major oil drillers as prices soared
NEW YORK (AP) — Oil companies were swimming in record profits the last few months. They were benefiting from high energy costs at a time when Americans struggled to pay for gasoline, food and other basic necessities. Consumers faced high fuel prices not just at the pump, but also baked into delivery costs, which drove up the cost of everything. Exxon and Chevron both reported record profits in the second quarter. When a gallon of gasoline soared above $5 last month, President Joe Biden blamed major oil producers, saying “Exxon made more money than God this year.”
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Senate deal should make it easier to buy electric vehicles
DETROIT (AP) — The surprise deal by Senate Democrats on a pared-down bill to support families, boost infrastructure and fight climate change is likely to jump-start sales of electric vehicles. The measure agreed to by Majority Leader Chuck Schumer and holdout Sen. Joe Manchin would give EV buyers a $7,500 tax credit starting next year, through the end of 2032. There’s also a new $4,000 credit for those buying used EVs. The vehicles have to be assembled in North America, and there are limits on annual income for buyers. There also are caps on the sticker prices of new EVs and a $25,000 cap on the price that can be paid for used electric vehicles.
Stocks rally again, close out best month since Nov. 2020
NEW YORK (AP) — Stocks finished higher on Wall Street Friday as investors closed out the best month for the S&P 500 since November 2020. New data showed inflation jumped by the most in four decades last month, but sentiment was buoyed by positive earnings news out of technology giants Apple and Amazon, as well as oil giants Exxon and Chevron. The technology-heavy Nasdaq ended July with the biggest gains since April 2020. Stocks have gained momentum this month, fueled by better-than-expected corporate earnings and falling bond yields, which have pulled back after soaring much of this year on expectations of higher interest rates.
Inflation hits record 8.9% in euro area, but economy grows
LONDON (AP) — Inflation in the European countries using the euro currency shot up to another record in July, pushed by higher energy prices driven partly by the war in Ukraine. But the economy still managed better-than-expected, if meager, growth in the second quarter. The European Union statistics agency said Friday that annual inflation in the eurozone’s 19 countries rose to 8.9% in July, up from 8.6% in June. Inflation has been running at its highest level since record-keeping for the euro began in 1997. The economy grew from April through June, expanding by 0.7% compared with the previous quarter. Economists expect that to be the last glimmer of good news and the region to tip into recession later this year.
California aims to make its own insulin brand to lower price
SACRAMENTO, Calif. (AP) — California plans to make its own insulin. The state budget includes $100 million to develop three types of insulin products and invest in a manufacturing facility. The state would contract with a private company to make the insulin under the CalRx brand. This would not be the first time California made its own medicine. The state also makes the only treatment for the rare disease of infant botulism. But millions of people suffer from diabetes. Advocates say the health care industry has conspired to keep the price of insulin high. People with Type 1 diabetes require insulin to survive.
Sony sees profit rise despite waning interest in video games
TOKYO (AP) — Sony has reported its profit edged up 3% in the last quarter, weathering production setbacks from COVID-19 lockdowns in Shanghai and a trend away from video games as pandemic restrictions eased elsewhere. Tokyo-based Sony’s April-June profit totaled 218 billion yen, or $1.6 billion. Quarterly sales rose 2% on the back of strong demand for music, including Harry Styles’ “Harry’s House” and Doja Cat’s “Planet Her.” In movies, Sony is hoping “Bullet Train,” starring Brad Pitt and set for release in August, will do well at the box office. Chief Financial Officer Hiroki Totoki says people are doing less gaming as COVID restrictions ease.
P&G’s sales climb in Q4, but cautious on fiscal 2023 outlook
NEW YORK (AP) — Procter & Gamble’s sales rose 3% in the fiscal fourth quarter, but the world’s largest consumer products maker gave a lackluster fiscal 2023 sales forecast as it contends with rising commodity and freight costs. P&G’s revenue climbed to $19.52 billion from $18.9 billion during the quarter, helped by higher prices. This topped the $19.39 billion that analysts surveyed by Zacks Investment Research were looking for. For fiscal 2023, P&G foresees sales to be flat to up 2% from the prior year.
The S&P 500 rose 57.86 points, or 1.4%, to 4,130.29. The Dow Jones Industrial Average advanced 315.50 points, or 1%, to 32,845.13. The Nasdaq gained 228.09 points, or 1.9%, to 12,390.69. The Russell 2000 index of smaller companies rose 12.20, or 0.7%, to 1,885.23.