TikTok plans to keep paying U.S. employees even if the Supreme Court does not overturn a law that would force the sale of the short-video app in the U.S. or ban it, the company's leadership said in an internal memo reviewed by Reuters on Tuesday.
U.S. wholesale inflation rose last month on higher energy prices.
The Labor Department reported Tuesday that its producer price index — which tracks inflation before it hits consumers — rose 0.2% last month from November, down from a 0.4% gain the month before. Compared to a year earlier, producer prices rose 3.3%, the biggest jump since February 2023 and up from a 3% gain in November.
A 3.5% November-to-December increase in energy prices — led by a 9.7% increase in gasoline prices — pushed the overall index higher. Food prices dipped 0.1% in December.
Still, the overall increases were slightly less than economists had forecast. U.S. markets leaped higher immediately on the new inflation data.
Excluding food and energy prices, so-called core wholesale inflation was unchanged from November but up 3.5% from a year earlier.
The producer price report came out a day before the Labor Department reported on consumer prices. According to a survey of forecasters by the data firm FactSet, its consumer price index is expected to rise 0.3% from November and 2.8% from December 2023.
Wholesale prices can offer an early look at where consumer inflation might be headed. Economists also watch it because some components, notably health care and financial services, flow into the Federal Reserve’s preferred inflation gauge — the personal consumption expenditures, or PCE, index.
Inflation flared up in early 2021 as the economy rebounded with unexpected strength from COVID-19 lockdowns, overwhelming factories, ports, and freight yards and leading to shortages, delays, and higher prices.
In response, the Fed raised its benchmark interest rate — the fed funds rate — 11 times in 2022 and 2023.
Inflation came down from the four-decade highs it reached in mid-2022, giving the Fed enough confidence to reverse course and cut rates three times in 2024. But the progress on inflation has stalled in recent months, and year-over-year increases in consumer prices remain above the central bank’s 2% target.
So Fed officials signaled in December that they planned to be more cautious about cutting rates this year. They now project just two rate reductions in 2025, down from the four they forecast back in September. They are widely expected to leave rates unchanged at their next meeting Jan. 28-29.
Many economists are worried that President-elect Donald Trump’s promises to impose tariffs on foreign goods and cut taxes will push inflation higher.
“The Fed will not see any argument for pushing interest rates lower, sooner, in today’s figures,’' said Carl Weinberg, chief economist at High Frequency Economics. ”Better-than-expected is not what necessarily what the Fed wants to see before easing monetary conditions into a fast-growing economy, with tariffs and tax cuts on the agenda of the incoming administration.’'
The US plans to unveil more regulations aimed at keeping advanced chips made by Taiwan Semiconductor Manufacturing Co. and other producers from flowing to China, part of a flurry of measures introduced by the Biden administration during its final days in office.
The latest measures would seek to encourage chip producers like TSMC, Samsung Electronics Co. and Intel Corp. to more carefully scrutinize customers and increase due diligence, according to people familiar with the matter. The changes follow an incident where TSMC-made chips were secretly diverted to the blacklisted Chinese company Huawei Technologies Co.
The rules, which could be unveiled as soon as Wednesday, would build on global semiconductor restrictions that the Biden administration published on Monday. Those curbs limit the sale of AI chips by the likes of Nvidia Corp. and other advanced makers to data centers in most countries.
Washington is keen to eliminate backdoors through which Chinese customers such as Huawei are still acquiring advanced chips. The new regulations would target the world’s largest manufacturers of semiconductors, aiming to cut off supply at the source.
Under the draft regulations, all chips at a threshold of 14 or 16 nanometers and below would be presumed restricted under the separate worldwide controls and require a government license to sell in China and other covered nations, said the people, who asked not to be identified because the plans haven’t been announced.
But there are several ways for chipmakers to overcome that presumption, given the goal is to identify Chinese firms that may be trying to skirt US rules to make advanced chips.
The Commerce Department’s Bureau of Industry and Security, which oversees semiconductor export controls, declined to comment.
The proposed regulations aim to help chip manufacturers identify which designs, from which customers, are subject to US trade curbs. That’s based on the processors' power, which is determined by how many transistors — the tiny switches that process information — are crammed onto each chip.
Using more advanced production techniques, measured in nanometers, makes it possible to add more transistors. Generally speaking, chips with smaller nanometer counts are more sophisticated.
The 14 to 16 nm cutoff would generally capture more chips than are considered advanced and governed by existing trade curbs. But under the draft regulations, authorized customers with chips that fall under that threshold — based on a list of approved companies, as well as whether chipmakers are headquartered in the US, allied nations, or Taiwan — would be able to attest that their chip designs are not covered by US export controls.
Or, if a chip has fewer than 30 billion transistors and is packaged by a trusted company — which would also be spelled out in the rules — it would also not be considered an advanced chip subject to the curbs, according to several people.
All told, the combined effect of those parameters means the rules would target more sophisticated processors — namely, AI accelerators — designed by Chinese companies, said the people.
Still, the rules are more expansive than what government officials had earlier indicated to TSMC might be possible.
After TSMC chips were discovered in Huawei devices, the Commerce Department told the Taiwanese company to stop manufacturing chips at a 7-nm or below for Chinese customers, according to people familiar with the matter.
Representatives for McDonald’s Corp., Yum! Brands Inc., Wendy’s Co., Restaurant Brands Inc., and other companies met Tuesday with Lori Chavez-DeRemer, President-elect Donald Trump’s nominee to lead the labor department, according to people familiar with the matter.
The parties talked about pro-union legislation that Chavez-DeRemer co-sponsored as a congressional representative from Oregon, said the people, who asked to remain anonymous discussing a private meeting led by the International Franchise Association in Washington, DC. After her nomination, the IFA had urged Chavez-DeRemer to denounce the bill, which the group described as “job-killing.”
They also discussed the key issue of when a company is considered a “joint employer,” meaning that the firm could be legally liable for the treatment of workers who aren’t on its payroll, such as staff employed by franchisees.
The definition of joint employer is a top concern for the association, as well as its members, who argue that more stringent standards erode the franchising business model. Under the system, business owners pay for the right to run established brands, but they each manage their own operations. At McDonald’s, for example, franchisees run about 95% of US locations and get to set their own prices.
Chavez-DeRemer voted with other Republicans a broader joint-employer standard issued by President Joe Biden’s appointees that ended up being overturned in court. But she was one of the few Republican sponsors of a sweeping pro-union labor law reform bill, the PRO Act, that included a similarly broad standard. Attendees at the meeting said they favor the standard adopted under the first Trump administration, one of the people said, which is the one currently in place.
In addition to the restaurants, salon brands, and at least one hotel chain were also present in the meeting, according to the people. Both franchisors — the brands — and franchisees were in attendance. Representatives for McDonald’s and Restaurant Brands declined to comment. Representatives for Wendy’s and Yum didn’t immediately reply to a request for comment.
“We appreciate the opportunity to meet with Labor Secretary nominee Lori Chavez-DeRemer, and her previous support of the franchise business model,” IFA President and Chief Executive Officer Matt Haller said in a statement. “We discussed the impact of franchising in helping people go into business for themselves, but not by themselves. Franchising played an impactful role in the election, and IFA looks forward to working with President Trump, Lori Chavez-DeRemer, and the incoming economic team to support their agenda.”
The PRO Act would have also abolished laws that prohibit mandatory union fees and banned tactics such as compulsory “captive audience” meetings in which employers get to talk about their views on organizing.
The goal of the meeting was for franchised business to express their views and form relationships that, in their view, would improve the model, one of the people said.