U.S. consumer spending rose in July
U.S. consumer spending increased solidly in July as households bought a range of goods and services, which could further allay financial market fears of a recession, but the strong pace of consumption is unlikely to be sustained amid tepid income gains.
The report from the Commerce Department on Friday added to July trade and inventory data in suggesting that while the economy was slowing, it was not losing altitude rapidly for now. But risks to the longest economic expansion in history are mounting, mostly from a year-long trade war between the United States and China.
The trade fight between the two economic giants has spooked financial markets and caused an inversion of the U.S. yield curve, which has stoked fears that the economic expansion, in its 11th year, is in danger of being derailed.
Consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.6 percent last month after an unrevised 0.3 percent gain in June, the government said.
But with Washington due to slap additional tariffs on Chinese goods Sept. 1 and in December, there are concerns that consumer spending could take a hit.
A survey from the University of Michigan on Friday showed its consumer sentiment index in August dropping by the most since December 2012.
Vanguard to press firms on diversity
Top fund manager Vanguard Group will ask companies about the gender, age and race of their directors, adding pressure on U.S. companies to diversify their leadership.
Vanguard gave the guidance in its annual stewardship report released Friday morning. With about $5 trillion under management and known for products such as the Vanguard 500 index fund, the firm wields much influence over executives and directors at major U.S. companies.
In addition, Vanguard asked boards to spell out their views on diversity, to broaden their search for minority candidates, and “to prioritize adding diverse voices to their boards.”
Pressure has grown on U.S. companies to bring more women into senior leadership roles in recent years. It has been hastened by the #MeToo movement, a response to accusations of sexual assault and harassment in Hollywood and elsewhere.
Investors have not been as focused about adding minorities, however, and their gains have lagged.
Vanguard stopped short of seeking director-by-director details from companies, saying in its report it wanted descriptions “at least on an aggregate basis,” which a spokeswoman called sufficient. Other companies have gone further and detailed the specific race and gender of directors in their proxy statements.
Ford is recalling more than 550,000 trucks and SUVs in North America because seat backs may not properly restrain people in a crash. The recall covers certain 2018 through 2020 F-150 pickups, 2019 and 2020 Super Duty trucks, 2018 and 2019 Explorer SUVs, and 2019 and 2020 Expedition SUVs. All have manual driver or front passenger seat-back recliner mechanisms. Also included are some 2020 Explorer and Lincoln Aviator SUVs with rear seats with manual seat-back mechanisms.
Volkswagen must forfeit greenhouse gas emissions credits and is lowering the fuel economy ratings on 98,000 vehicles after the Environmental Protection Agency said vehicle software overstated real-world performance. Volkswagen said Friday it had agreed to a court settlement worth $96.5 million to reimburse eligible customers for the fuel economy restatement.
The U.S. Chamber of Commerce called on the Trump administration and California officials to find a middle ground on automobile efficiency standards that federal agencies plan to slash, warning of “potentially dire consequences” without a workable compromise that continues to improve fuel economy. The Chamber’s call is the latest sign of corporate opposition to the Trump administration’s proposal to cap vehicle fuel-efficiency and greenhouse gas standards after 2020 and revoke California’s authority to set their rules, a plan under final review.
— From news services