The Congressional Budget Office (CBO) released a report on Wednesday warning Congress to address the debt limit before the government runs out of funds, potentially between July and September. The report notes that the government’s spending has increased due to the coronavirus pandemic, resulting in a $3.3 trillion deficit for the 2021 fiscal year. Treasury Secretary Janet Yellen has said that a default would be economically calamitous.
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The Walt Disney Co. announced Wednesday that it will be laying off 7,000 employees and cutting costs by $5.5 billion in the coming months as part of an effort to increase the profitability of its streaming business and focus more on core brands and franchises. Activist shareholder Nelson Peltz's demands for changes at Disney appear to have been satisfied by the announcement, and the reorganization is expected to be completed by the end of the fiscal year. No details have been released yet on which departments will be affected by the layoffs.
The Walt Disney Co. has announced that it will be cutting 7,000 jobs from its global workforce, amounting to about 3% of its total employees. The job cuts are part of a cost-cutting effort and are part of a “significant transformation” for the media and entertainment giant, as CEO Bob Iger is under pressure to revive the company's financial fortunes and its stock price. The job cuts come as a shock to many and it remains to be seen how the company will adjust to the changes and how its employees will be affected.
A new study has revealed that banks with the highest reliance on hidden fees are primarily located in low-income areas of the US, costing consumers at least $29 billion each year. In response, President Biden and the Consumer Financial Protection Bureau have taken steps to limit credit card late fees, and the President has vowed to ban “junk fees” in his State of the Union address. The study highlights the need for greater regulation of these fees to ensure they are not disproportionately impacting low-income communities.
Dell Technologies has announced plans to lay off 5% of its workforce due to the uncertain economic climate, following similar cost-cutting measures taken by other large tech companies. The announcement comes as the tech industry has been hit hard by the economic downturn, with interest rate hikes contributing to the financial woes of many companies. Despite the job cuts, Dell has reported several strong quarters due to the steps taken to stay ahead of the downturn impacts.
The average cost of full coverage auto insurance has risen to $2,014 a year nationally, a 13.7% increase from last year. This is due to higher inflation resulting from labor and parts shortages, driving up the cost of paying insurance claims. Drivers in some cities are paying up to $3,000 a year for coverage, and rates could climb even higher depending on inflation.
The U.S. economy showed strength in the fourth quarter of 2022, with GDP growth of 2.9% and an impressive 517,000 jobs added in January. The leisure and hospitality sector led payroll gains, with 128,000 jobs, followed by professional and business services and health care. The strong job growth could raise doubts about inflation easing further, as employers' steady demand for labor has contributed to high inflation.
The Federal Reserve has raised its benchmark interest rate for the eighth consecutive time in an effort to subdue inflation. This brings the federal funds rate to its highest level since late 2007, and Fed chair Jerome Powell has indicated that more rate hikes are on the way. Investors have responded positively to the news, with the Dow and other major indexes climbing steadily since the announcement.