Business & Money

US economy unexpectedly accelerated to a 2.4% growth rate in April-June quarter despite Fed hikes Business News | The Hill

Published

2 years ago

July 28, 2023

The U.S. economy surprisingly accelerated to a 2.4% annual growth rate from April through June, showing continued resilience in the face of steadily higher interest rates resulting from the Federal Reserve’s 16-month-long fight to bring down inflation. “US Economy Accelerates” despite challenges, demonstrating robust performance.

Thursday’s estimate from the Commerce Department indicated that the gross domestic product — the economy’s total output of goods and services — picked up from the 2% growth rate in the January-March quarter. Last quarter’s expansion was well above the 1.5% annual rate that economists had forecast.

Driving last quarter’s growth was a burst of business investment. Excluding housing, business spending surged at a 7.7% annual rate, the fastest such pace since early 2022. Companies plowed more money into factories and equipment. Increased spending by state and local governments also helped fuel the economy’s expansion in the April-June quarter.

Consumer spending, the heart of the nation’s economy, was also solid last quarter, though it slowed to a 1.6% annual rate from a robust 4.2% pace in the first quarter of the year.

Investment in housing, though, fell, weakened by the weight of higher mortgage rates.

“This is a strong report, confirming that this economy continues to largely shrug off the Fed’s aggressive rate increases and tightening credit conditions,’’ said Olu Sonola, head of U.S. economics at Fitch Ratings. “The bottom line is that the U.S. economy is still growing above trend, and the Fed will be wondering if they need to do more to slow this economy.”

In fighting inflation, which last year hit a four-decade high, the Fed has raised its benchmark rate 11 times since March 2022, most recently on Wednesday. The resulting higher costs for a broad range of loans — from mortgages and credit cards to auto loans and business borrowing — have taken a toll on growth.

Still, they have yet to tip the United States into a widely forecast recession. Optimism has been growing that a recession isn’t coming after all, that the Fed can engineer a so-called “soft-landing” — slowing the economy enough to bring inflation down to its 2% annual target without wrecking an expansion of surprising durability.

This week, the International Monetary Fund upgraded its forecast for U.S. economic growth for all of 2023 to 1.8%. Though that would be down from 2.1% growth for 2022, it marked an increase from the 1.6% growth that the IMF had predicted for 2023 back in April.

At a news conference Wednesday after the Fed announced its latest quarter-point rate hike, Chair Jerome Powell revealed that the central bank’s staff economists no longer foresee a recession in the United States. In April, the minutes of the central bank’s March meeting had revealed that the Fed’s staff economists envisioned a “mild” recession later this year.

In his remarks, Powell noted that the economy has proved resilient despite the Fed’s rapid rate hikes. And he said he still thinks a soft landing remains possible.

By any measure, the American job market has shown itself to be remarkably strong. At 3.6% in June, the unemployment rate hovers just above a five-decade low. A surge in retirements after COVID-19 hit in early 2020 has contributed to a shortage of workers across the country, forcing many companies to raise wages to attract or keep staffers.

Higher pay and job security are giving Americans the confidence and financial wherewithal to keep shopping. Indeed, consumer spending, which drives about 70% of economic activity, rose at a 4.2% annual rate from January through March, the fastest quarterly pace in nearly two years. Americans have kept spending — crowding airplanes, traveling overseas and flocking to concerts and movie theaters.

And the Conference Board, a business research group, reported Tuesday that Americans this month are in their sunniest mood in two years, based on the board’s reading of consumer confidence.

Indeed, many consumers are finally enjoying some relief from spiking prices: Year-over-year inflation, which peaked at 9.1% in June 2022, has eased consistently ever since. Inflation-adjusted hourly pay rose 1.4% in June from a year earlier, the sharpest such gain since early 2021.

“Inflation is easing, moving in the right direction,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. ”In other words, the Fed is achieving what it wants without causing damage to the economy, so they don’t need to push too hard from this point on.”

Still, Farooqi suggested, the surprisingly healthy GDP report makes it somewhat more likely that the Fed will raise rates again because the economy appears to be “much stronger” than what the central bank would like to see. With stronger growth comes a greater likelihood of high inflation.

But Thursday’s GDP report contained some encouraging news for the Fed’s inflation fighters: One measure of prices — the personal consumption expenditures index — rose at a 2.6% annual rate last quarter, down from a 4.1% pace in the January-March quarter, to the lowest level since the end of 2020.

Though that is still above the Fed’s 2% inflation target, it amounts to “another welcome sign of disinflation,” said Mike Fratantoni, chief economist at the Mortgage Bankers Association.

The Biden White House’s Council of Economic Advisers estimated Thursday that investment in factories and other manufacturing facilities added 0.4 percentage point of growth last quarter, the largest such proportion since 1981. President Joe Biden pushed the Inflation Reduction Act and the CHIPS Act last year to encourage domestic manufacturing. Michael Feroli, chief U.S. economist at JP Morgan Chase, agreed that much of last quarter’s uptick in business investment was “likely in response to recent federal incentives.’’

“This progress wasn’t inevitable or accidental,’’ the president said in a statement. “It is Bidenomics in action.’’

The risk remains that the weight of ever-higher interest rates will eventually slow borrowing so much — for homes, cars, renovations, business expansions and other costly expenses — as to pull the economy into recession.

Among the economy’s weakest links has been the housing market. In June, sales of previously occupied homes sank to their slowest pace since January. The problem is that a near-historic low number of homes for sale and higher mortgage rates kept many would-be homebuyers on the sidelines. Sales fell 19% compared with June 2022 and were down 23% through the first half of the year.

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AP Writer Josh Boak contributed to this report.

Business, AP Business WASHINGTON (AP) — The U.S. economy surprisingly accelerated to a 2.4% annual growth rate from April through June, showing continued resilience in the face of steadily higher interest rates resulting from the Federal Reserve’s 16-month-long fight to bring down inflation. Thursday’s estimate from the Commerce Department indicated that the gross domestic product — the economy’s…

Business

Houston’s Black Entrepreneurs Are Thriving—But Are Their Businesses Built to Last?

Published

1 week ago

May 29, 2025

Bolanle Media Staff

Marietta Hamilton speaking at the BET tour by Doing Far More LLC captured by Credit : Law Vision

Houston is home to one of the most vibrant Black entrepreneurial communities in the nation, with Black-owned businesses now accounting for up to 4.7% of all local businesses—well above both the Texas and national averages. From 2017 to 2020 alone, the number of Black-owned businesses in Texas surged by an impressive 13.6%, and these firms generated over $141 billion in revenue in 2020, providing employment to more than 1.3 million Texans. The city consistently ranks among the top metros for minority-owned startups, with nearly 5,600 minority-owned startups—about 30% of all new companies—calling Houston home.

But behind this success story lies a critical question: Are these businesses truly built to last?

Despite this remarkable growth, over 70% of Black-owned businesses in Houston lack a formal succession or legacy plan. Without these crucial plans, businesses are at risk of closure or costly legal battles if the owner becomes incapacitated or passes away, threatening to erase years of hard work and generational progress. Only 1 in 5 Black families in Houston pre-plan for funerals or final expenses, compounding the risk of financial hardship for families and communities.

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Systemic barriers such as limited access to capital, lower rates of financial planning, and a lack of generational wealth continue to challenge Black entrepreneurs in Houston.While the entrepreneurial spirit is strong, the infrastructure to ensure these businesses endure for generations is still being built.

Chef Shay, Mrs. Donna Marshall-Payne and the owner of Esthers Cafe

That’s why Doing Far More LLC, led by Mrs. Donna Marshall-Payne, is hosting the Spring Formal—a pivotal event dedicated to empowering Houston’s Black entrepreneurs with the knowledge and tools to secure their business legacy. As part of the Black Entrepreneur Tour, the event will be held at 23161 Morton Ranch Rd, Katy, TX 77449 and will feature influential voices like Marcus Bowers (CEO of She’s Happy Hair and Cinema Anywhere Houston), Martel Matthews (co-owner of Black Wall Street), Brittany Hall (owner of La Lutte Empire and La Lutte Bartending), and event sponsor YetundeO (founder and creative director of The UpperRoomEvents).

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The evening will also include special experiences: Flume TV and Eyeconic Television will be covering the event alongside Bolanle Media, Chef Shay will present an elegant spread table, and La Lutte Bartending will offer a signature mimosa bar drink crafted especially for Doing Far More.

Chef Shay speaking at the BET tour by Doing Far More LLC captured by Credit : Law Vision

If you’re an entrepreneur in Houston, this is the conversation you can’t afford to miss. Don’t let your business become a statistic. Secure your spot at the Spring Formal and join a community committed to building generational wealth and lasting legacies. For more information or to RSVP, contact Mrs. Donna Marshall-Payne at 832.745.1114 or email info@doingfarmore.com

Let’s ensure Houston’s Black-owned businesses don’t just thrive today, but are truly built to last for generations to come.

Business

Trump’s New Tax Bill: Major Breaks and Big Changes Ahead

Published

2 weeks ago

May 28, 2025

Bolanle Media Staff

The newly passed Trump tax bill is making headlines for introducing some of the most significant tax breaks and policy changes in years. Whether you’re a worker, parent, homeowner, or business owner, there’s a good chance something in this bill will impact your finances. Here’s a clear, detailed breakdown of what’s inside, who benefits, and what you need to know.

1. No Tax on Tips (With Restrictions)

Who Benefits: Workers in industries where tipping is customary (servers, bartenders, hair stylists, taxi drivers).

Key Details:

Eligibility: Must work in a tipping industry, earn less than $150,000/year, and tips must be paid voluntarily (not as a service charge).
Cash Only: Only cash tips are eligible (though there’s some debate if credit card tips count).
Cap: Maximum of $25,000 in tax-free tips per year.

Fine Print:
This change won’t apply to office workers or high earners. For many, the main benefit is being able to report cash tips for things like loan approval, without paying extra tax.

2. No Tax on Overtime Pay

Who Benefits: Employees earning less than $150,000/year who work more than 40 hours a week.

Key Details:

Deduction: You can deduct the full amount of your overtime pay from your taxable income, making it effectively tax-free.
Time Frame: Applies to income earned from 2025 to 2028.
Note: Only a small percentage of workers regularly receive overtime, but for those who do, the savings could be substantial.

3. $40,000 State and Local Tax (SALT) Deduction

Who Benefits: Taxpayers in high-tax states who itemize deductions.

Key Details:

New Cap: Raises the SALT deduction limit from $10,000 to $40,000.
Income Limit: Only for those with adjusted gross income under $500,000.
Must Itemize: You’ll need to itemize deductions instead of taking the standard deduction ($30,000 for most).

Fine Print:
This mostly helps people in states like California, New York, and New Jersey. If your state/local/property taxes are high, this could mean thousands in savings.

4. Deduct Interest on Personal Car Loans

Who Benefits: Buyers of American-made vehicles with loans.

Key Details:

Deduction: Up to $10,000 in interest paid on a personal car loan can be deducted each year (2025–2028).
Income Phase-Out: Deduction phases out for singles earning over $100,000 and married couples over $200,000, disappearing entirely at $150,000/$300,000.
Car Must Be Made in the USA.

Caution:
Don’t take out a bigger loan just for the deduction—only buy what you can afford!

5. $1,000 “Trump Account” for Newborns

Who Benefits: Children born in the U.S. from 2025–2028.

Key Details:

One-Time Credit: $1,000 per eligible child, deposited into a special account.
Investment Growth: Money can be invested and used for education, a first home, or starting a business—taxed at favorable rates.
Unused Funds: If not used by age 31, the account is cashed out and taxed as regular income.

6. Clean Vehicle and Energy Credits Ending

Key Details:

The $7,500 electric vehicle tax credit and other clean energy incentives will end by 2026.
If you want these rebates, act fast before they’re gone!

7. Extension of 2018 Tax Cuts and Jobs Act

Who Benefits: Business owners, high earners, and estates.

Key Details:

Top Tax Bracket: Remains at 37% (was set to rise).
Business Deductions: 20% pass-through deduction and 100% bonus depreciation for business investments extended.
Estate Tax: Higher exemption amount continues.

8. Social Security Income Relief

Who Benefits: Retirees collecting Social Security.

Key Details:

Extra Deduction: $4,000 added to the standard deduction for those on Social Security (phases out above $75,000 single/$150,000 married).
Not All Income Tax-Free: This shields some, but not all, Social Security income from taxes.

What Does This Mean for You?

Workers: More take-home pay if you earn tips or overtime.
Families: $1,000 for each new child, plus potential savings if you itemize deductions.
Car Buyers: Big deduction if you buy American-made and finance your car.
Homeowners in High-Tax States: Major relief on state/local taxes.
Business Owners: Continued access to significant tax breaks.
Retirees: Extra deduction for Social Security recipients.

Share This!

If you found this breakdown helpful, share it with friends and family—these changes could mean thousands of dollars in savings for millions of Americans. Stay tuned for updates as the bill is implemented and more details emerge!

Have questions about how these changes affect you? Ask below!

Business & Money

The Collapse of Western Luxury Sales in China and the Rise of Local Brands

Published

2 months ago

April 20, 2025

Bolanle Media Staff

The luxury fashion industry is facing a profound reckoning in China, a market that once powered its global growth. In 2024, the Chinese mainland luxury market experienced a historic decline of 18–20%, reverting to 2020 levels and sending shockwaves through the sector (Bain & Company). This dramatic downturn is not only impacting sales figures but also reshaping the very perception of what luxury means for Chinese consumers.

Several key forces have converged to erode Western brands’ dominance. Economic stagnation, a persistent real estate slump, and widespread pay cuts—especially in the financial sector—have undermined consumer confidence and spending power (Jing Daily). The pandemic and ongoing economic headwinds have prompted consumers to re-evaluate luxury purchases with a more practical lens, moving away from status-driven consumption (Bain & Company).

As travel restrictions eased, there was a notable rebound in overseas luxury shopping, with Chinese consumers flocking to Japan and Europe for better prices and exclusive items. In 2024, only 60% of Chinese luxury spending occurred domestically, with the rest shifting abroad (Bain & Company). Continuous price hikes by Western brands, often without clear added value, have made even affluent shoppers more cautious (Bain & Company).

Adding to these challenges, viral social media content and investigative reports have exposed the reality that many luxury goods—Gucci, Prada, Chanel, and more—are produced in China at a fraction of their retail price, then labeled as European-made. This revelation has shaken consumer trust and eroded the mystique that once justified luxury markups (Pakistan Today). Younger Chinese shoppers, driven by rising nationalism and skepticism of Western consumerism, are increasingly turning to domestic brands that offer comparable quality at lower prices (Pakistan Today).

The numbers tell a stark story. China’s share of global luxury sales has plummeted from 50% a decade ago to just 12% in 2024 (Pakistan Today). The global luxury market saw a 2% decline in 2024, with China accounting for the bulk of that drop (Pakistan Today; Macao News). Leading Western luxury groups suffered steep losses, with all major categories—jewelry, watches, leather goods, and fashion—experiencing double-digit declines (Bloomberg; Retail Asia).

As Western brands stumble, Chinese luxury labels and alternative shopping channels are surging. Local companies are capitalizing on shifting tastes and national pride, offering high-quality products that resonate with younger consumers (Pakistan Today). Price-sensitive shoppers are flocking to grey market platforms and direct-from-factory channels, further undercutting traditional luxury retail (Bain & Company). There’s also a visible shift toward spending on experiences, travel, and unique products, as opposed to traditional status-symbol goods (Bain & Company). Younger generations, especially Gen Z, are gravitating toward brands that are culturally relevant, locally inspired, and digitally savvy (Jing Daily).

The era of easy growth for Western luxury brands in China is over. Brands must now compete fiercely for market share—not just through expansion, but by investing in brand differentiation, product innovation, and authentic consumer engagement (Bain & Company). As Chinese manufacturers and influencers continue to challenge the veneer of Western luxury, only those brands able to deliver genuine value and cultural relevance will survive. As one observer put it, “80% of anything you buy from Gucci is made in China, and over 60% of Prada comes from there too,” likening the revelation to “pulling the curtain back in The Wizard of Oz and realizing there’s no real magic behind the person running the show” (Pakistan Today).

In this new landscape, local brands are on the rise, and the global luxury industry is being forced to confront uncomfortable truths about value, authenticity, and the future of consumer desire.

Bolanle Media covers a wide range of topics, including film, technology, and culture. Our team creates easy-to-understand articles and news pieces that keep readers informed about the latest trends and events. If you’re looking for press coverage or want to share your story with a wider audience, we’d love to hear from you! Contact us today to discuss how we can help bring your news to life