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First-quarter GDP Declined 1.5%, Worse Than Thought; Jobless Claims Edge Lower

Katelyn Bailey

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A ‘We’re Hiring!’ sign is posted at a Starbucks in Los Angeles, California.
Mario Tama | Getty Images

The U.S. economic contraction to start the year was worse than expected as weak business and private investment failed to offset strong consumer spending, the Commerce Department reported Thursday.

First-quarter GDP declined at a 1.5% annual pace, according to the second estimate from the Bureau of Economic Analysis. That was worse than the 1.3% Dow Jones estimate and a writedown from the initially reported 1.4%.

Downward revisions for both private inventory and residential investment offset an upward change in consumer spending. A swelling trade deficit also subtracted from the GDP total.

The pullback in GDP represented the worst quarter since the pandemic-scarred Q2 of 2020 in which the U.S. fell into a recession spurred by a government-imposed economic shutdown to battle Covid-19. GDP plummeted 31.2% in that quarter.

Economists largely expect the U.S. to rebound in the second quarter as some of the factors holding back growth early in the year subside. A surge in the omicron variant slowed activity, and the Russian attack on Ukraine aggravated supply chain issues that had contributed to a 40-year high in inflation.

CNBC’s Rapid Update survey shows a median expectation of 3.3% growth in the second quarter; the Atlanta Fed’s GDPNow tracker also points to a rebound, but at a more subdued 1.8% pace.

One factor helping to propel growth is a resilient consumer fighting through inflation than accelerated 8.3% from a year ago in April.

Consumer spending as gauged by personal consumption expenditures increased 3.1%, better than the first estimate of 2.7%. That has come as the labor market has continued to be strong and wages are increasing rapidly, though still below the pace of inflation.

Initial jobless claims for the week ended May 21 totaled 210,000 ,a decrease from the previous 218,000, the Labor Department reported.

Continuing claims, after holding around their lowest level since 1969, edged higher for the week for the week ended May 14 to nearly 1.35 million.

Correction: An earlier version listed an incorrect figure for weekly jobless claims.

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Article: cnbc.com

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Intel Warns Ohio Factory Could Be Delayed Because Congress Is Dragging Its Feet on Funding

Katelyn Bailey

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Patrick Gelsinger, Intel CEO, at the WEF in Davos, Switzerland on May 23rd. 2022.
Adam Galica | CNBC

A large chip factory currently in the early stages of being built outside of Columbus, Ohio, could see its scope scaled back or construction delayed depending on what Congress does with the CHIPS Act, Intel said in a statement on Thursday.

The facility was announced in January and would be the most significant expansion of U.S.-based semiconductor manufacturing in years. Intel estimated the plant could cost as much as $100 billion and committed an initial investment of $20 billion.

“We are excited to begin construction on a new leading-edge semiconductor manufacturing plant in Ohio and grateful for the support of Governor DeWine, the state government and all our partners in Ohio. As we said in our January announcement, the scope and pace of our expansion in Ohio will depend heavily on funding from the CHIPS Act,” an Intel spokesperson said in a statement.

“Unfortunately, CHIPS Act funding has moved more slowly than we expected and we still don’t know when it will get done. It is time for Congress to act so we can move forward at the speed and scale we have long envisioned for Ohio and our other projects to help restore U.S. semiconductor manufacturing leadership and build a more resilient semiconductor supply chain,” the statement continued.

The Biden administration has hailed the Ohio factory as an example of the administration’s efforts to increase manufacturing capacity in the U.S. Intel CEO Pat Gelsinger was a guest of Biden’s at the State of the Union earlier this year.

“If you travel 20 miles east of Columbus, Ohio, you’ll find 1,000 empty acres of land. It won’t look like much, but if you stop and look closely, you’ll see a ‘Field of dreams,’ the ground on which America’s future will be built. This is where Intel, the American company that helped build Silicon Valley, is going to build its $20 billion semiconductor ‘mega site’,” Biden said in the speech.

Most manufacturing of high-end chips currently takes place in Taiwan and South Korea, and U.S. officials have said that increasing the amount of semiconductors fabricated on U.S. and European soil is important for national security.

This is breaking news. Please check back for updates.

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Original Article: cnbc.com

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Supreme Court Strikes Down NY Gun Law Restricting Concealed Carry in Major Second Amendment Case

Katelyn Bailey

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The Supreme Court on Thursday struck down a New York state law requiring applicants for a license to carry a gun outside of their homes to have a “proper cause” to do so, saying it violated the Second Amendment of the U.S. Constitution.

The 6-3 ruling in the case is a major victory for gun rights advocates who had challenged New York’s restrictive law, which makes it a crime to carry a concealed firearm without a license.

It also represents the Supreme Court’s biggest expansion of gun rights in more than a decade — and casts doubt on laws in eight other states and the District of Columbia that restrict concealed-carry permits in ways similar to New York.

The Supreme Court’s six conservative justices voted to invalidate the law, which has been in existence since 1911. Justice Clarence Thomas wrote the majority opinion in the case, known as New York State Rifle & Pistol Association Inc. v. Bruen.

The court’s three liberals voted to uphold the law. Justice Stephen Breyer wrote a dissent to the ruling.

A U.S. Supreme Court police officer stands past gun-rights demonstrators outside the Supreme Court in Washington, D.C., U.S., on Monday, Dec. 2, 2019.
Andrew Harrer | Bloomberg | Getty Images

In his majority opinion, Thomas wrote that New York’s law violated the Constitution’s Fourteenth Amendment — which says citizens have a right to equal protection under the law — because it “prevents law-abiding citizens with ordinary self-defense needs from exercising their right to keep and bear arms” as authorized by the Second Amendment.

The ruling comes weeks after mass shootings at a Buffalo, New York, grocery store, and another in a Uvalde, Texas, elementary school, reignited a national debate about U.S. gun laws.

Democratic elected officials quickly condemned Thursday’s decision, which they said will imperil public safety.

President Joe Biden said he was “deeply disappointed” in the ruling, which he argued, “contradicts both common sense and the Constitution, and should deeply trouble us all.”

Citing the “horrific attacks in Buffalo and Uvalde,” Biden urged states to pass “commonsense” gun regulation “to make their citizens and communities safer from gun violence.”

New York Gov. Kathy Hochul said, “This decision isn’t just reckless, it’s reprehensible.”

Hochul said that because “the federal government will not have sweeping laws to protect us … our states and our governors have a moral responsibility to do what we can and have laws that protect our citizens because of what is going on — the insanity of the gun culture that has possessed everyone all the way up to the Supreme Court.”

New York City Mayor Eric Adams said, “This decision has made every single one of us less safe from gun violence.”

The case was brought by the New York State Rifle & Pistol Association and two of its members, Robert Nash and Brandon Koch, whose applications for concealed-carry handgun licenses for self-defense purposes were rejected.

New York Supreme Court Justice Richard McNally ruled that neither man had shown proper cause to carry guns in public because they failed to demonstrate that they had a special need for self-protection.

The plaintiffs then challenged that denial in a federal court in New York. They argued that the state law governing concealed-carry licenses, which allows them only for applicants with “good moral character” who have “proper cause” to carry guns outside the home, violates the Second Amendment.

After a federal judge in New York dismissed the case, the U.S. 2nd Circuit Court of Appeals affirmed that judgment. The U.S. Supreme Court then took the case.

Thomas, in his majority opinion, wrote that New York’s proper-cause requirement, as it has been interpreted by state courts, was inconsistent with the “Nation’s history of firearm regulation.”

“A State may not prevent law-abiding citizens from publicly carrying handguns because they have not demonstrated a special need for self-defense,” Thomas wrote.

But Breyer, in his dissent, wrote, “Only by ignoring an abundance of historical evidence supporting regulations restricting the public carriage of firearms can the Court conclude that New York’s law is not ‘consistent with the Nation’s historical tradition of firearm regulation.”

Breyer also wrote, “Many States have tried to address some of the dangers of gun violence just described by passing laws that limit, in various ways, who may purchase, carry, or use firearms of different kinds.”

“The Court today severely burdens States’ efforts to do so.”

– Additional reporting by CNBC’s Amanda Macias

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Original Article: cnbc.com

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United Airlines Will Cut 12% of Newark Flights in Effort to Tame Delays

Katelyn Bailey

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A United Airlines passenger airplane is landing on Newark Liberty International Airport in Newark, New Jersey, on January 19, 2022.
Tayfun Coskun | Anadolu Agency | Getty Images

United Airlines will cut about 50 daily flights from Newark Liberty International Airport next month in an effort to reduce delays that have disrupted travelers’ plans this year.

The cuts amount to about 12% of United’s schedule in its New Jersey hub and apply solely to domestic flights, starting July 1.

United executives have said the delays are the result of capacity constraints, airport construction and air traffic control — not airline staffing shortfalls.

Jon Roitman, United’s executive vice president and COO told staff in a note Thursday that “after the last few weeks of irregular operations in Newark, caused by many factors including airport construction, we reached out to the FAA and received a waiver allowing us to temporarily adjust our schedule there for the remainder of the summer.”

“Even though we have the planes, pilots, crews, and staff to support our Newark schedule, this waiver will allow us to remove about 50 daily departures which should help minimize excessive delays and improve on-time performance – not only for our customers, but for everyone flying through Newark,” he wrote.

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Original Article: cnbc.com

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