DAVID McHUGH
Wed, Jul 31, 2024, 5:10 AM EDT2 min read
DAVID McHUGH
Wed, Jul 31, 2024, 5:10 AM EDT2 min read
FRANKFURT, Germany (AP) — Inflation in the 20 countries that use the euro ticked up to 2.6% in July, stubbornly above the European Central Bank’s target and complicating the ECB’s next decision on whether to cut interest rates and boost growth as the economy struggles to stage a convincing recovery after more than a year of stagnation.
Inflation rose from 2.5% in June, according to official figures Wednesday from the EU statistics agency Eurostat. Services inflation, a figure closely watched by the ECB, remained elevated at 4.0%, down from 4.1%
The uptick will intensify discussions around the ECB’s next move at its Sept. 12 meeting. The central bank for the eurozone countries made a first tentative interest rate cut in June, lowering its benchmark rate by a quarter percentage point to 3.75%. The bank’s governing council then hit pause at the July meeting, with ECB President Christine Lagarde saying the bank would take its next decisions meeting by meeting based on incoming data.
The ECB along with other central banks including the U.S. Federal Reserve rapidly raised interest rates to combat a spike in inflation sparked by Russia’s invasion of Ukraine and higher energy prices as well as by the sudden rebound of the economy after the pandemic, which strained supplies of parts and raw materials. Europe in particular was hit by higher energy prices after Russia cut off most supplies of natural gas.
Energy prices have fallen and inflation is now down from its peak of 10.6% in October 2022. But it has remained stuck between 2% and 3%, short of the ECB’s target of 2% which is considered best for the economy. Rate hikes combat inflation by raising the cost of credit for buying things, cooling demand for goods and taking the pressure off prices. But higher rates can hurt growth, and recent economic data have been downbeat as Europe struggles to show a convincing recovery after more than a year of near-zero growth figures.
Gross domestic product rose 0.3% in each of the first two quarters of this year, an improvement on zero or below. But recent indicators of economic activity going forward, such as S&P Global’s purchasing managers’ index, suggest that the economy is still barely growing.View comments
- Intel to Cut Thousands of Jobs to Reduce Costs, Fund Rebound
Mackenzie Hawkins and Jane Lanhee LeeTue, Jul 30, 2024, 5:22 PM EDT2 min read78In this article:(Bloomberg) — Intel Corp. plans to eliminate thousands of jobs to reduce costs and fund an ambitious effort to rebound from an earnings slump and market share losses.Most Read from Bloomberg
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- The workforce reduction may be announced as early as this week, according to people familiar with the company’s plans, who asked not to be identified because the information isn’t public. Intel, which is scheduled to report second-quarter earnings Thursday, has about 110,000 employees, excluding workers at units that are being spun out.Chief Executive Officer Pat Gelsinger is spending heavily on research and development aimed at improving Intel’s technology and helping it return to prominence in the semiconductor industry. The company’s once-dominant position eroded under Gelsinger’s predecessors as rivals, such as Advanced Micro Devices Inc., have caught up and taken market share. An Intel spokesperson declined to comment.Intel shares rose about 1% in late trading, reaching as high as $31.11, on the news.Other chipmakers led by Nvidia Corp. have sprinted ahead in the development of lucrative semiconductors tailored for demanding artificial intelligence-related tasks. Intel is also coming to grips with uneven demand for chips that run laptops and desktop computers, its main business.Gelsinger, betting that Intel can improve its technology, embarked on a plan to build factories to manufacture semiconductors for other chipmakers. Last week, Intel hired Naga Chandrasekaran from Micron Technology Inc. as chief global operations officer, putting him in charge of the company’s overall manufacturing efforts.Intel reduced its workforce about 5% in 2023 to 124,800 by year’s end after announcing job cuts beginning in October 2022. It also has slowed spending in other areas. The company expected those cost reductions would save as much as $10 billion by 2025.Analysts project that Intel will report that second-quarter revenue was flat, compared with a year earlier. Growth will pick up modestly in the second half of 2024, and total sales will increase 3% to $55.7 billion for the full year, according to Wall Street estimates. That would be the first annual revenue increase since 2021.–With assistance from Ian King.