Business

The housing market is cooling again. Here's why.

Thomas Northcut/Getty Images

(NEW YORK) -- A sluggish housing market for most of last year began to heat up as the calendar turned to 2024.

In recent weeks, however, the market has cooled once again.

A surge in mortgage rates accounts for the slowdown in the housing market, experts told ABC News, pointing to elevated home prices pushed out of reach for most consumers when combined with high borrowing costs.

The jump in mortgage rates is due to stubbornly high inflation that has delayed interest rate cuts at the Federal Reserve, experts said. Mortgage rates track yields on 10-year treasury bonds, which are highly sensitive to the Fed's benchmark rate.

"High mortgage rates and high housing prices have led to an affordability problem of a dimension that we haven't seen in decades," Susan Wachter, a professor of real estate at University of Pennsylvania's Wharton School of Business, told ABC News.

The average interest rate for a 30-year fixed mortgage has soared to 6.9%, rebounding after a steady decline at the end of last year, according to a report from Freddie Mac on Thursday.

Meanwhile, home sales have plummeted. Mortgage-purchase applications fell 10% from a week earlier, data from the Mortgage Bankers Association on Wednesday showed.

"Existing home sales have fallen off a cliff," Lu Liu, also a professor at the Wharton School at the University of Pennsylvania, told ABC News.

The housing market dynamic traces back to a highly anticipated announcement in December, during which the central bank revealed expectations of interest rate cuts in 2024.

The signal elicited a boost of optimism among key market players, who foresaw the end of the Fed's fight against inflation and the decline of interest rates from near-historic highs. In turn, yields fell on 10-year treasury bonds, and mortgage rates soon followed suit.

Inflation, however, has refused to cooperate. Stronger than expected economic performance and resilient consumer demand have helped buoy price increases, keeping them above the Fed's target rate.

"The strengthening of the economy is a surprise," Wachter said. "It does raise questions about the Fed's next steps."

Consumer prices rose 3.1% in January compared to a year ago, slowing markedly from the previous month but missing expectations of an even larger cooldown, a report from the Bureau of Labor Statistics earlier this month showed.

Inflation stands well below a peak of 9% last year but remains more than a percentage point above the Fed's target rate of 2%.

"The inflation rate is reflected in the 10-year treasury rate, which pushes mortgages up," Wachter said.

When the Fed initiated the rise of bond yields with its first rate hike of the current series in March 2022, the average 30-year fixed mortgage rate stood at just 4.45%. The average mortgage is now nearly 2.5 percentage points higher.

Each percentage point increase in a mortgage rate can add thousands of dollars, or even tens of thousands, in additional costs each year, depending on the price of the house, according to Rocket Mortgage.

The rising mortgage rates have put a freeze on the housing market in part because home prices remain high, Liu said. Potential homebuyers would rather stick with mortgages that have comparatively low rates rather than shift to higher rates that would compound the elevated home prices, she added.

"A lot of people are holding back from moving or selling," Liu said.

Observers would expect home prices to fall amid low consumer demand, but the stubbornly high housing costs may be owed to that reluctance among prospective homebuyers to first put their own homes up for sale, Liu added.

"It's a little bit of a puzzle why home prices have remained stable or even ticked up," Liu said. "Home owners may be buying, but they're not selling."

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New lawsuit claims Stanley tumblers 'failed to disclose presence of lead'

Stanley tumblers are displayed on a shelf at a Dick's Sporting Goods store, Feb. 2, 2024, in Daly City, Calif. (Justin Sullivan/Getty Images)

(NEW YORK) -- The trendy oversized Stanley thermos that reached viral fame on social media and became a must-have item is facing new criticism from customers.

The parent company of the viral tumblers is facing two lawsuits after Stanley acknowledged that part of the insulation at the bottom of the bottle -- which people do not come into contact with -- contains some lead.

In one of the lawsuits filed last week, Mariana Franzetti alleges the company, Pacific Market International, "engaged in a campaign of deceiving customers by failing to disclose the presence of lead in its tumbler products."

The lawsuit also claims the company "knew or reasonably should have known about this lead issue for years but chose to conceal it from the public presumably to avoid losing sales."

The cups are still available for sale online.

Pacific Market International did not immediately respond to ABC News' request for comment.

"When I discovered that lead was possibly in the Stanley cup, I was really upset," Franzetti told ABC News. "I tried to treat my body as well as possible. I wouldn't have bought any sort of product that had lead in it, to my knowledge. And I just thought, why is a company like this being so deceptive?"

Last month, several customers said they performed at-home tests on the cups -- with some allegedly testing positive for lead.

Stanley released a statement in response saying the material used for the insulation seal at the bottom of the products does contain "some lead," but that it is covered with stainless steel and "no lead is present on the surface of any Stanley product that comes into contact with the consumer nor the contents of the product."

The company told USA Today in response to the lawsuits that it will "vigorously defend itself against meritless claims."

"My trust has been shaken in the company, but I would like to see them not just with the Stanley cups currently, but with all their products, make a commitment to being lead-free," Franzetti said.

Stanley cups have gained massive popularity in recent months. In January, videos across social media showed shoppers at Target clamoring for the brand's limited edition "Galentine's Day" red and pink tumblers.

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Boeing replaces Ed Clark, leader of 737 Max program, in wake of midair incident

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(NEW YORK) -- Boeing has announced it is replacing the head of its 737 Max program as part of a reshuffling of the company in the wake of the much-publicized incident of a door plug blowing out of an Alaska Airlines flight last month.

Katie Ringgold will be replacing Ed Clark – an 18-year veteran of the company – as vice president and general manager of the 737 Max program and Renton site, Boeing said.

The company also announced other leadership changes.

Boeing Commercial Airplanes President Stan Deal said, "I am announcing several leadership changes as we continue driving BCA's enhanced focus on ensuring that every airplane we deliver meets or exceeds all quality and safety requirements. Our customers demand, and deserve, nothing less."

The door plug fell off a few minutes after Alaska Flight 1282 took off from Portland International Airport on Jan. 5. Passengers captured footage showing a hole where the door plug came loose on the Boeing 737 Max 9 plane. The plane safely made an emergency landing and no one was seriously injured.

The National Transportation Safety Board released a preliminary report Feb. 6 saying four bolts designed to prevent the door plug from falling off the plane were missing before the plug blew off.

Records reviewed by the NTSB showed that damaged rivets on the edge frame forward of the plug were replaced by Spirit AeroSystems employees at Boeing's factory in Renton, Washington, on Sept. 19, 2023, according to the agency's report. Boeing had to open the plug by removing the two vertical movement arrestor bolts and two upper guide track bolts for the rivets to be replaced, but photo documentation obtained from Boeing showed evidence that the plug was closed with no bolts in three visible locations, according to the NTSB report.

Boeing CEO Dave Calhoun took responsibility for the incident during an earnings call on Jan. 31.

"Boeing is accountable for what happened," Calhoun said. "Whatever the specific cause of the accident might turn out to be, an event like this must simply not happen on an airplane that leaves one of our factories. We simply must be better. Our customers deserve better."

The Federal Aviation Administration issued an emergency airworthiness directive on Jan. 6, temporarily grounding certain Boeing 737 MAX 9 planes while operators conduct specific inspections before returning the aircraft to service. The decision affected more than 170 planes worldwide.

Alaska Airlines returned its fleet of 737s to the air on Jan. 26, two days after the FAA released final instructions to airlines to begin conducting inspections of their 737 Max 9 planes.

ABC News' Meredith Deliso and Julia Jacobo contributed to this report.

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More student loan borrowers to receive debt relief beginning Wednesday

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(WASHINGTON) -- The Biden administration will begin automatically relieving student debt for another 153,000 people on Wednesday, bringing the total number of Americans approved for debt relief to nearly 3.9 million.

President Joe Biden will tout the new debt relief in a speech from Los Angeles, and thousands of people will receive an email from the president informing them that they now qualify for relief.

"Congratulations — all or a portion of your federal student loans will be forgiven because you qualify for early loan forgiveness under my Administration's SAVE Plan," the email from the president will read.

The people receiving debt relief beginning Wednesday are those who enrolled in the newest student loan payment plan, called the SAVE Plan, which the Department of Education calls the most affordable plan for the majority of borrowers.

Anyone enrolled in the SAVE Plan who took out less than $12,000 in initial loans and has been paying them down for the past 10 years or more will have them forgiven.

"This plan reflects our unapologetic commitment to deliver as much relief as possible to as many borrowers as possible, as quickly as possible," Education Secretary Miguel Cardona said on a call with reporters on Tuesday.

Roughly 7.5 million Americans are enrolled in the SAVE Plan, which just launched this past summer.

The 153,000 who are getting automatic relief starting Wednesday are the first tranche of borrowers to benefit from this aspect of the plan. Moving forward, anyone else who enrolls in the plan and meets this criteria will also get debt relief.

As of Wednesday, there are many Americans who could actually qualify for this debt relief but aren’t enrolled in the SAVE Plan, something the Biden administration says it's working to improve outreach on as an estimated 27 million Americans are currently in repayment for student loans.

Who are the other 3.7 million people who have been approved for debt relief under Biden?

At least 513,000 borrowers have, so far, been approved for debt relief after filing for a total and permanent disability, while 1.3 million borrowers have been approved for debt relief because it has been deemed their college defrauded them.

Some of the most well-known debt relief programs under Biden, however, have been the fixes to the program for people working in public service and to income-driven repayment plans.

The Biden administration has now processed relief for more than 793,000 borrowers through fixes to the Public Service Loan Forgiveness program (PSLF), which allows for debt relief for people in jobs like firefighting, nursing and teaching after 10 years of continuous payment.

The other large tranche of borrowers to receive relief are those enrolled in income-driven repayment plans, which allow people to pay a certain percentage of their income towards their loans for 20 or 25 years before their debts are forgiven.

Around 930,500 borrowers have been identified as paying for their allotted time, but not getting relief. They have now had their debts approved for relief.

The PSLF and income-driven repayment fixes are considered minor fixes to an already-broken system in the student loan apparatus that the Biden administration has now addressed.

They are not debt relief to the tune of $10,000 to 20,000 in blanket forgiveness for anyone who makes below a certain income, as Biden hoped to do last year before the Supreme Court determined his plan was unlawful.

Still, the Biden administration continues to push efforts on debt relief while on the campaign trail, something Biden himself will do on Wednesday in Los Angeles.

“These actions have allowed nearly 4 million people to afford other expenses in their lives -- buy homes, start businesses, pursue dreams that they had to put on hold because of their student loans,” Natalie Quillian, White House Deputy Chief of Staff, said on a call with reporters Tuesday.

“Now, because of the president and the Biden Harris administration, millions of borrowers and their families are no longer weighed down by the burden of student debt,” she said.

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Two Black GM workers share their experiences in the automotive industry

GM chief engineer Dom Lester mentors young minorities and women who are pursuing careers in vehicle engineering. (General Motors)

(NEW YORK) -- Dom Lester has a long and enviable list of accomplishments at General Motors, where's he worked for the last 25 years.

As the company's chief engineer for performance variants, parts and motorsports engineering, he is responsible for the development of GM's bestselling trucks and performance vehicles. His greatest achievement, though, may be fostering a more diverse and accepting place for minorities and women to work.

"Walking around the hallways here, you see more minorities, more women," Lester told ABC News. "To have folks with different thoughts, folks who come from different regions, that's the true intellectual horsepower in the company. Diversity of thought is really the fuel that will propel us forward."

Lester started his automotive career after graduating from Lafayette College with a degree in mechanical engineering. He worked his way up the ranks and now oversees the full execution -- marketing, design, budgeting and engineering -- of new vehicles like Chevy's ZR2 family of trucks, the Escalade V-Series and Cadillac's CT5-V and CT4-V Blackwing sedans.

"I am still pushing the envelope, stretching the company, as chief engineer of performance variants," he said. "The customer comes in all different colors, shapes and sizes ... and I like to see people [on my team] who have different angles and perspectives."

He added, "There are a lot of us in automotive and the door is open ... it's a great field to be in."

Lester visits college campuses across the country to recruit top talent for GM and regularly contributes to the company's resource groups for minorities. Every week he sets aside time in his hectic schedule to mentor young GM employees. Plus, he sits on the board of a nonprofit that supports women of color in motorsports.

His efforts to add more inclusivity to the auto industry has inspired his oldest daughter to study science, technology, engineering and math, he noted.

"She's really into STEM and robotics and sees the excitement and potential in it," Lester said.

GM has long touted its recruiting efforts and diverse workforce. Company executives have participated in events hosted by groups like the Society of Women Engineers (SWE), Society of Hispanic Professional Engineers (SHPE) and National Society of Black Engineers (NSBE), among others.

The company has also found talented workers through development programs with HBCUs including Morgan State, Tuskegee University, North Carolina A&T and Howard University. Moreover, GM partners with Advancing Minorities' Interest in Engineering (AMIE), an organization representing 15 engineering-accredited HBCUs, according to a GM spokesperson.

There are currently more than 93,200 GM employees in the U.S. Minorities make up a large part of the company: 17,702 are Black/African American, 8,565 are Asian and 6,118 are Hispanic/Latino, according to company data.

In 2019, Black Americans totaled 17.2% of workers in automotive manufacturing, according to a 2020 U.S. International Trade Commission report. To compare, Black workers made up 12.3% of the labor market that year.

Moreover, Black employment in automotive manufacturing rose from 159,000 in 1995 to more than 250,000 in 2019, the report said. Women, however, continue to experience steep obstacles in the industry: just 23.6% of workers employed by automotive manufacturers were female in 2019.

Brandon Lynum, a colors, material and finishes designer who worked on the all-electric Cadillac Escalade IQ, said his role model was Ed Welburn, the first Black head of global design for GM. Welburn retired in 2016 though his legacy at the automaker lives on.

"He helped create a more diverse culture," Lynum told ABC News. "He's definitely a catalyst for having more minorities in the field, especially at GM Design."

Lynum himself did not know automotive design jobs existed until he was a sophomore in high school. Students at the Cleveland Institute of Arts (CIA) visited Lynum's high school one day and "they mentioned industrial design and automotive design," said Lynum.

"Suddenly it clicked: 'Hey, people go to school to design cars,'" he went on. "A lot of times students are creative and have art backgrounds but they ask, 'What can I do with this background as a professional?'"

Lynum is now following in the footsteps of those CIA college students who first opened his eyes to a career in autos. He travels to the CIA campus, where he's also an alum, to meet with and potential job prospects. His main objective: bringing awareness to the field, especially for minorities.

"Exposure is key," he said. "We have studios across the globe ... we have people who are white, Black, brown. GM Design in general is a very diverse place."

Lester agreed that "seeing is believing" when it comes to getting more minorities and women interested in automotive jobs. His biggest advice to those pursuing careers in competitive industries? "Use your voice," he said.

"Do not let obstacles be roadblocks -- use them as stepping stones into the future," he said. "Everyone has faced obstacles but it's what you do with them. For me, I see them as opportunities. One of the skills I've learned over the years is how to be comfortable being uncomfortable. Mastering how to be comfortable has served me well."

And for those who ever doubted Lester's abilities, he pointed to his prestigious "Boss" Kettering award, given to GM workers who have achieved engineering excellence, and his many patents at the automaker.

"I pushed the envelope, pushed the comfort level and thought outside the box," he said. "Don't sell yourself short."

Copyright © 2024, ABC Audio. All rights reserved.


Dunkin' launches six new menu items for spring, here's a sneak peek

Dunkin'

(NEW YORK) -- Dunkin' is spicing up its spring menu with six new seasonal items rolling out nationwide on Wednesday, including an energy-boosting iced beverage innovation.

The coffee chain that recently made headlines for its Super Bowl commercial starring Ben Affleck and J. Lo announced the lineup of new products, plus a special promo for Leap Day.

New spring menu at Dunkin'

The first new addition is the SPARKD' energy by Dunkin', described by the brand as an iced drink "that provides a revitalizing burst of energy, made with vitamins, minerals and a kick of caffeine" available in two flavors, berry burst and peach sunshine.

The new churro signature latte, available iced or hot, combines smooth espresso with the sweet cinnamon sugar flavors of a churro, topped with whipped cream, caramel drizzle and a dusting of cinnamon sugar.

The second seasonal coffee offering is a cinnamon vanilla coffee, which blends Dunkin's original coffee and cream with notes of churro and vanilla flavors, which customers can order iced or hot.

Dunkin' is also introducing the churro donut, made to pair with the new churro signature latte. The deep-fried cake donut is rolled in cinnamon sugar for a sweet, crunchy exterior.

The coffee chain has also added two new food items: Breakfast empanada and banana chocolate chip bread.

The first, a hot and savory option, is made with scrambled eggs, sausage and cheddar cheese inside a flaky pastry crust.

The latter, hitting menus just in time for National Banana Bread Day on Friday, is Dunkin's take on the beloved baked good, loaded with chocolate chips and served prepackaged "to ensure a tender, moist crumb."

Dunkin' Rewards members can earn an additional 250 bonus points when they order the new items on Feb. 23.

On Feb. 29, in celebration of Leap Day, Dunkin' Rewards members can enjoy a $2 medium cinnamon vanilla coffee when they order in the Dunkin' mobile app. Plus, members will earn 4X points on all app orders on Leap Day.

Check the app and website for more offers tied to ordering the new products throughout spring.

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What to know about American Airlines' new policy changes: Checked bag fees, luggage size, earning loyalty points and miles

American Airlines passenger jets are lined up on the gates at Washingtons Reagan National Airport, Feb. 10, 2024, in Arlington, Va. (J. David Ake/Getty Images)

(NEW YORK) -- Delta made waves last year in announcing sweeping policy changes to its loyalty program, and now American Airlines has followed suit with changes of its own that will impact how travelers earn frequent-flyer points, as well as how much they pay for checked bags.

On Tuesday, the Fort Worth, Texas-based carrier announced increased costs for checked bags both online and at the airport.

In a push to get more flyers to book directly with American Airlines, the carrier is also "[updating] the way customers earn AAdvantage miles and Loyalty Points on flights, depending on where they book."

Vasu Raja, American's chief commercial officer, said in a statement that "the best fares" will come when booking directly with the airline, adding that the shift in policy will be most rewarding for members of its AAdvantage program.

American Airlines' new bag fees

Previously, a passenger's first checked bag on domestic flights cost $30. The airline has now raised that fee to $35 when purchased online, or $40 when purchased at the airport. A second checked item will cost $45, another $5 increase, both online and at the airport.

The changes will go into affect for flights booked on or after Feb. 20 for travel within the U.S., Canada, Mexico and the Caribbean.

There are a few exceptions: Passengers with status in the AAdvantage loyalty program, those who use an American-branded credit card, and those who buy a premium-class ticket will continue to receive complimentary bags on domestic and international flights.

American also offers complimentary bags to active-duty U.S. military personnel on all American flights.

The airline last raised its bag fees in 2018.

American Airlines lowers fees for oversize, overweight checked bags

In a bright spot for American customers, the airline has introduced its lowest fee ever for checked items that are only a few pounds heavier or a few inches larger than a standard bag, which the airline said can "result in savings of more than $350 for some customers."

American will also reduce the oversize checked baggage limit to 115 linear inches.

For bags over the weight limit between 50-53 pounds, the new fee will be $30, and overweight bags between 53-70 pounds will be charged a fee of $100 to $200. Bags weighing between 70-100 pounds will still be charged $450.

For bags that are over the size limit, between 62-65 linear inches, passengers will be charged a new fee of $30, with bags between 65-115 linear inches charged $150 to $200.

Previously, customers were charged $100 to $200 extra for overweight bags between 50-70 pounds, and all oversize bags between 62-126 linear inches were charged an extra $150 to $200.

Additionally, bags that are both oversized and overweight will now be charged a single fee, rather than two separate fees, ranging from $30 to $450, depending on size and weight.

The lower costs and simpler fee structure for oversize and overweight checked items will go into effect for travel on or after April 17.

Additionally, the airline has said it will no longer allow javelins, pole vaults or hang gliders to be checked starting April 17.

American Airlines updates how flyers earn AAdvantage miles, loyalty points

American is also updating the way customers can earn AAdvantage miles and Loyalty Points on flights, which is contingent upon where they book, "starting with tickets issued on May 1, 2024."

How to ensure you're earning miles and Loyalty Points

In order to earn points in the AAdvantage loyalty program, American Airlines said most customers will be required to purchase tickets directly from the airline or its eligible partner carriers. Additionally, Basic Economy fare tickets will only earn points when the flight is booked directly with American or its eligible partners.

Customers can book travel anywhere as an AAdvantage Business member or contracted corporate traveler to keep earning points and miles. Corporate travelers won't be affected by this change, the airline stated.

American said it will share a list of eligible preferred agencies on aa.com in late April, for customers who wish to book through those travel agencies to earn miles and points.

American Airlines loyalty members, credit card holder benefits

Certain AAdvantage members and credit card holders will still receive important benefits, such as complimentary bags on American Airlines flights.

AAdvantage members who book directly with the airline will also receive benefits like same-day standby and Trip Credit for canceled flights.

The airline said that booking directly will also help loyalty members reach AAdvantage status and unlock rewards faster.

Finally, for tickets purchased on or after Feb. 20, the pet-in-cabin fee will be $150. 

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Delta offering special flight to view total solar eclipse along the path of totality in April

A Delta Air plane takes off from Sydney Airport on Jan. 20, 2024 in Sydney, Australia. (Jenny Evans/Getty Images)

(NEW YORK) -- North America will experience its last total solar eclipse for 20 years in April, and now some skywatchers will have a front-row view.

Delta Airlines announced its chartering a flight from Austin, Texas, to Detroit on April 8 that is specifically intended for passengers to have an up-close view of the solar eclipse along the path of totality -- the specific locations on Earth that fall in the center of the moon's shadow during an eclipse.

A total solar eclipse occurs when the moon passes between the sun and the Earth and, for a short time, completely blocks the face of the sun, according to NASA.

The flight is scheduled to depart from Austin at 12:15 p.m. CT and arrive in Detroit at 4:20 p.m. ET. It's timed "to give those on board the best chance of safely viewing the solar eclipse at its peak," Delta said in a press release on Monday.

The one-way flight is $1,129 and can be purchased through the Delta website.

"The April 8 eclipse is the last total eclipse we'll see over North America until 2044," Warren Weston, Delta Air Lines lead meteorologist, said in the press release. "This eclipse will last more than twice as long as the one that occurred in 2017, and the path is nearly twice as wide."

Delta says passengers will have "premium viewing" due to the A200-300 aircraft's extra-large windows.

In the U.S., the path of totality begins in Texas and will travel through Oklahoma, Arkansas, Missouri, Illinois, Kentucky, Indiana, Ohio, Pennsylvania, New York, Vermont, New Hampshire and Maine. Small parts of Tennessee and Michigan will also experience the total solar eclipse, according to NASA.

Passengers aboard preexisting flights on April 8 will also have the chance to view the total solar eclipse, and Delta encourages those individuals to come prepared with solar eclipse viewing glasses.

These Delta flights will fly within the path of totality:

  • DL 5699, DTW-HPN, 2:59 pm EST departure, ERJ-175
  • DL 924, LAX-DFW, 8:40 am PST departure, A320
  • DL 2869, LAX-SAT, 9:00 am PST departure, A319
  • DL 1001, SLC-SAT, 10:08 am MST departure, A220-300
  • DL 1683, SLC-AUS, 9:55 am MST departure, A320

Solar eclipse experts suggest -- whether on the ground or in the sky -- that avoiding clouds is the best and only way to fully experience a total solar eclipse.

"You want to avoid any type of cloud, if you can," Fred Espenak, a former astrophysicist from NASA Goddard Space Flight Center and author of Road Atlas for the Total Solar Eclipse of 2024, told ABC News of Eclipse Day.

Delta noted that weather changes and air traffic control factors are out of the airline's control on eclipse days.

"Let's say it's on a sunny day with some puffy cumulus clouds around. All you need is for one of those clouds to be in front of the sun and you've missed the total eclipse. So, you're really looking for a place with as few clouds as possible," Espenak said.

"So I wish everybody fair skies next April," Espenak noted.

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What a possible Capital One and Discover merger means for consumers

Angus Mordant/Bloomberg via Getty Images

(NEW YORK) -- Capital One's decision to acquire Discover could establish a new megafirm that shakes up the credit card industry.

The move may hold long-term implications for credit card holders, regardless of whether they bank with Capital One or shop with Discover, experts told ABC News.

If approved by shareholders and regulators, the merger would leave Capital One in a stronger market position, potentially allowing the company to offer more attractive bonuses and perks, some experts said. The potential challenge to industry juggernauts Visa and Mastercard, meanwhile, could elicit innovations and fresh offerings for consumers industrywide, they said.

The deal, however, could also have an adverse effect for consumers, leaving the industry with fewer competitors overall and easing pressure on companies to attract customers with favorable terms, some experts and consumer advocates said.

"It could be a little from column A and a little from column B," Sara Rather, a credit card expert at NerdWallet, told ABC News, noting that the move may improve conditions for consumers in some ways and damage them in others.

"On the one hand, it means less competition and on the other hand it'll potentially propel Capital One into a bigger entity that has even more innovation and product offerings. And the other companies are paying close attention," Rather added.

Capital One did not immediately respond to ABC News' request for comment. Neither did Discover.

The deal arrives at a precarious moment for credit card holders. Credit card debt stands at a new record high $1.13 trillion, according to data released earlier this month by the Federal Reserve Bank of New York.

Credit card balances increased by $50 billion in the fourth quarter of 2023 alone, a 4.6% jump from the previous quarter, the report said.

Experts who spoke to ABC News said the merger would not carry short-term impacts for customers at Capital One or Discover, or those at rival firms, since the two companies at issue may take over a year to finalize the agreement.

"This isn't going to have any effect on consumers in the short term," Matt Schulz, chief credit analyst at LendingTree, told ABC News. "These sorts of mergers tend to move glacially."

"There's nothing that Capital One or Discover customers need to really do or worry about today," Schulz added.

Customers will likely receive communication from Capital One and Discover if the deal results in changes to their services, said Rather.

If the deal closes, it may ultimately influence consumer terms across the credit card industry, though it remains unclear whether that effect would be positive or negative, experts said.

As of Tuesday, the combined value of the two companies stands at approximately $83 billion. By comparison, the value of Mastercard and Visa are about $422 billion and $564 billion, respectively.

The potential arrival of a company made up of Capital One and Discover could heighten the competition faced by Mastercard and Visa, pushing them to improve the credit card terms available to customers, Mark Hamrick, senior economic analyst at Bankrate, told ABC News.

"Certainly when you get more vibrant competition the existing enterprises in that space would obviously be concerned about facing greater competition," Hamrick said.

But further concentration at the top of the industry may serve to loosen competition and harm consumers. "It's a hard question to answer," he added.

Some consumer advocates echoed the concern about possible damage to consumers.

Jesse Van Tol, president and CEO of the National Community Reinvestment Coalition, a consumer advocacy group, said in a statement that the move risks undercutting competition and harming offerings.

The merger "poses massive antitrust concerns, given the vertical integration of Capital One's credit card lending with Discover's credit card network," Van Tol said.

Despite the success of a few giant companies, the credit card industry remains highly competitive, said Schulz. That fight for customers will limit any adverse impact after the merger, he added.

"The credit card marketplace is still so competitive that I think any worries about this having a negative effect on things like rewards is probably a little overstated," Schulz said.

Regardless of where experts stand, they agreed that the deal may not gain approval from regulators.

"I wouldn't count my credit card chickens before they hatch," Hamrick said.

ABC News' Elizabeth Schulze contributed reporting.

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OpenAI video-generator Sora risks fueling propaganda and bias, experts say

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(NEW YORK) -- A sunbathed Dalmatian tiptoes across a windowsill, a Chinese New Year parade engulfs a city street, an archeologist digs up a chair from desert sand.

Videos posted online display these events, but none of them happened. They make up the first publicly available work created by OpenAI's newly unveiled video-generation tool Sora.

Sora composes videos, lasting up to one-minute long, based on user prompts, just as ChatGPT responds to input with written responses and Dall-E offers up images.

The video-generator is currently in use by a group of product testers but is not available to the public, OpenAI said in a statement on Thursday.

These products carry the potential to improve and ease video storytelling, but they could also supercharge internet misinformation and enhance government propaganda, blurring the already-faint line between real and fake content online, experts told ABC News.

AI-generated videos, meanwhile, threaten to reinforce hateful or biased perspectives picked up from the underlying training materials that make their creation possible, they added.

"The clarity of truth we thought we had with recorded photography and video is gone," Kristian Hammond, a professor of computer science at Northwestern University who studies AI, told ABC News. "We've inadvertently built a world of propaganda engines."

In response to ABC News' request for comment, OpenAI pointed to a webpage that outlines measures taken by the company to prevent abuse of Sora.

"We'll be taking several important safety steps ahead of making Sora available in OpenAI's products," the company website says. "We are working with red teamers  --  domain experts in areas like misinformation, hateful content, and bias  -- who will be adversarially testing the model."

The company plans to use some safety features already in palace for its image generator Dall-E, the website says, including a tool that polices text prompts to ensure they do not violate rules against "extreme violence, sexual content, hateful imagery, celebrity likeness, or the IP of others."

Experts who spoke to ABC News emphasized the difficulty of evaluating a demo product that has yet to be released to the general public. They sounded alarm, however, over the opportunities for misuse of the video generator and the challenges of implementing fully effective safeguards.

"Realistic images of events play into people's assumptions about what's going on in the real world and can be used to deceive people," Sam Gregory, executive director of Witness, an advocacy group that aims to ensure the use of video to protect human rights, told ABC News.

The risks posed by AI-generated content have stoked wide concern in recent weeks.

Fake, sexually explicit AI-generated images of pop star Taylor Swift went viral on social media in late January, garnering millions of views. A fake robocall impersonating President Joe Biden's voice discouraged individuals from voting in the New Hampshire primary last month.

Experts commended the steps taken by OpenAI to prohibit abuses of Sora along these lines. They warned though of the product's likely capability to create deep fakes and the difficulty of preventing such videos.

"They can probably put in a filter that says, 'Don't generate any videos with Taylor Swift,' but people will find ways around it," Gary Marcus, an emeritus professor at New York University and author of the book ''Rebooting AI," told ABC News.

Sora, like other generative AI products, is trained on troves of online data, leaving it susceptible to widely reproduced biases, such as racial and gender stereotypes.

"There are biases in society and those biases will be reflected in these systems," Hammond said.

In addition to moderating video prompts and the resulting content, OpenAI plans to implement a "detection classifier" that can identify when a video has been produced by Sora, the online statement said. The company said it will also include a popular recognized digital tag, which essentially amounts to a digital watermark.

Such precautions drew applause from experts, though they warned that videos could potentially be reproduced or altered as means of removing the labels.

"People will be trying to get around the guardrails put in place," Hammond said. "It's an arms race."

Copyright © 2024, ABC Audio. All rights reserved.


Number of striking US workers more than doubled last year, study shows

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(NEW YORK) -- The number of striking workers in the U.S. more than doubled last year due to massive work stoppages carried out by autoworkers, nurses and Hollywood writers and actors, according to a study released by Cornell University on Thursday.

The total number of striking workers climbed 141% in 2023, amounting to nearly 540,000 workers who walked off the job, the report found.

"This rise in strike action after many years of diminished activity indicates a union resurgence that is shifting the balance of power back toward labor," Alexander Colvin, dean of Cornell University's School of Industrial and Labor Relations, told ABC News in a statement.

Four large strikes accounted for more than half of the workers involved in work stoppages last year, the report said, pointing to multi-state campaigns among actors, autoworkers, healthcare employees, as well as an action carried out by school staff in Los Angeles.

SAG-AFTRA, a union representing roughly 160,000 actors, went out on strike for nearly 120 days, culminating in a 3-year contract that raised wages by roughly 14%.

The United Auto Workers, a union representing 150,000 employees at major car markers, ended a weekslong strike after a set of agreements that delivered a roughly 25% raise over a 4-year period.

Roughly 75,000 healthcare workers at Kaiser Permanente won major wage gains after a work stoppage, as did thousands of TV writers.

The total number of work stoppages ticked up by 9% in 2023 compared to the previous year, due to the sizable share of workers who participated in large strikes, the report said.

The sharp escalation in worker protests arose from widespread dissatisfaction with sluggish wage gains, which in many cases had failed to keep up with rapid price hikes, experts previously told ABC News.

Over a four-decade period beginning in the late-1970s, wages largely flattened, increasing 0.2% per year on an inflation-adjusted basis for a typical worker, a Harvard Business Review analysis found.

The cumulative effects of sluggish wage growth collided with sky-high inflation in recent years, leaving workers frustrated over diminished spending power, Johnnie Kallas, project director of Cornell University's Labor Action Tracker, previously told ABC News.

Despite the surge in work stoppages last year, union membership stagnated. In 2023, the unionization rate among private sector employees stood at 6%, little changed from the previous year, according to data released by the Bureau of Labor Statistics in January.

The private sector unionization rate has generally trended down over four decades since the U.S. began collecting data, in 1983, when the rate stood at about 17%, the BLS said.

Still, last year brought a surge in strikes in the private sector, in contrast with the burst of labor militancy five years ago mostly among public school teachers, Johnnie Kallas, an assistant professor at the University of Illinois, who founded Cornell University's Labor Action Tracker, told ABC News in a statement.

"Large strikes were much more dispersed this past year throughout numerous private sector industries," Kallas said.

 

Copyright © 2024, ABC Audio. All rights reserved.


New York City sues social media companies, accuses them of contributing to 'youth mental health crisis'

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(NEW YORK) -- The City of New York on Wednesday sued the companies behind SnapChat, Instagram, YouTube and TikTok, accusing them of fomenting a "nationwide youth mental health crisis" by exposing children "to a nonstop stream of harmful content."

The lawsuit, filed in California Superior Court, alleged the companies intentionally designed their platforms to purposefully manipulate and addict children and teens to social media applications. The lawsuit pointed to the use of algorithms to generate feeds that keep users on the platforms longer and encourage compulsive use.

"Youth are now addicted to Defendants’ platforms in droves, resulting in substantial interference with school district operations and imposing a large burden on cities, school districts and public hospital systems that provide mental health services to youth," the lawsuit said. "While presented as 'social,' Defendants’ platforms have in a myriad of ways promoted disconnection, disassociation, and a legion of resulting mental and physical harms."

The lawsuit accused the social media companies of manipulating users by making them feel compelled to respond to one positive action with another positive action.

SnapChat addressed the lawsuit via a statement, denying the allegations.

"Snapchat was intentionally designed to be different from traditional social media, with a focus on helping Snapchatters communicate with their close friends. Snapchat opens directly to a camera – rather than a feed of content that encourages passive scrolling – and has no traditional public likes or comments. While we will always have more work to do, we feel good about the role Snapchat plays in helping close friends feel connected, happy and prepared as they face the many challenges of adolescence," the statement, provided by Ashley Adams, a spokeswoman for Snap Inc., said.

TikTok also responded to the city's lawsuit.

"TikTok has industry-leading safeguards to support teens' well-being, including age-restricted features, parental controls, an automatic 60-minute time limit for users under 18, and more. We regularly partner with experts to understand emerging best practices, and will continue to work to keep our community safe by tackling industry-wide challenges," a TikTok spokesperson said.

Meta, which owns Instagram, stated the safety of teens is a top priority.

"We want teens to have safe, age-appropriate experiences online, and we have over 30 tools and features to support them and their parents. We’ve spent a decade working on these issues and hiring people who have dedicated their careers to keeping young people safe and supported online," a company spokesperson said.

"Providing young people with a safer, healthier experience online has always been core to our work. In collaboration with youth, mental health and parenting experts, we’ve built services and policies to give young people age-appropriate experiences, and parents robust controls. The allegations in this complaint are simply not true," said José Castañeda, a Google spokesperson.

"These platforms take advantage of reciprocity by, for example, automatically telling the sender when their message was seen or sending notifications when a message was delivered, encouraging teens to return to the platform again and again, and perpetuating online engagement and immediate responses," the lawsuit said.

"Over the past decade, we have seen just how addictive and overwhelming the online world can be, exposing our children to a non-stop stream of harmful content and fueling our national youth mental health crisis," New York City Mayor Eric Adams said. "Our city is built on innovation and technology, but many social media platforms end up endangering our children's mental health, promoting addiction and encouraging unsafe behavior."

"Over the past decade, we have seen just how addictive and overwhelming the online world can be, exposing our children to a non-stop stream of harmful content and fueling our national youth mental health crisis," New York City Mayor Eric Adams said. "Our city is built on innovation and technology, but many social media platforms end up endangering our children's mental health, promoting addiction and encouraging unsafe behavior."

Copyright © 2024, ABC Audio. All rights reserved.


Expert tips to book cheap spring break travel now

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(NEW YORK) -- While snow and frigid temps are sweeping parts of the country, travel deals for spring break are heating up.

Experts like Going.com founder Scott Keyes explained to ABC News' Good Morning America why now may be the best time to book flights for spring travel.

Spring break travel tips: Book flights before March

"I would not be putting it off much longer if you're hoping to fly somewhere, because chances are once March rolls around, spring break flights are going to get more expensive, not less," he cautioned. "Right now we are in the Goldilocks window for cheap spring break flights."

The so-called "Goldilocks window", Keyes said, is the ideal time to book your flight -- it's not too early or too late for the price to be just right.

"If you book 11 months in advance, you don't see many cheap flights, but also, if you wait until a week or two before, your likelihood of a cheap flight at that point is gonna be very low," he explained.

Spring break travel tips: Find the cheapest destination

When it comes to booking trips for the family, Keyes said to be flexible with your destination.

For example, if a beach getaway is at the top of your vacation list, look for the one with cheapest airfare, and for bigger families, Keyes suggests booking the tickets individually.

"When you do one booking of four tickets, all four tickets have to have the same price, and if there's only 3 tickets left at the cheapest price they're gonna sell you the next most expensive one," he said. "Instead, book three tickets at once at the cheapest price -- then book the fourth ticket."

Spring break travel tips: Round trip vs. one-way flights

Keyes also advises travelers looking to book for spring break to compare round-trip and one-way fares.

"The cheapest non-stop flight from New York to San Diego for a week in late April is $448 per person round trip. But if you book each leg separately, you can fly one-way to San Diego for $139 and back to New York for $254 -- totaling $393. That's a savings of $55 per person," he said.

Expert's top travel tip for booking flights: Follow the 21-day rule

Keyes reminded travelers to follow his golden rule of air travel, back-timing when to book based on your departure date, in order to align with an airline's "advanced purchase requirement" found in the fine print of the fare terms and conditions.

"Pull up a calendar and circle 21 days before your travel date," he said. "That needs to be your sort of drop-dead date to get your flights booked by."

Other deals and thinking ahead to summer travel

It's also a great time to book a cruise, now that we're in what's known as the wave season -- the first three months of the year when cruise lines often offer a wide range of discounts.

AAA shows discounts between 30% to 60% off, and travelers will likely see cabin upgrades, as well as buy one, get one offers and possible onboard credits.

While most searchers are in spring break mode, experts also say now is a good time to start thinking about summer travel.

If you're looking for domestic vacations, plan to try to book them one to three months out from the travel dates, while we are still in the opposite season.

Finally, remember to turn on flight alerts via Google flights or a price tracker app.

Copyright © 2024, ABC Audio. All rights reserved.


Wendy's debuts new Cinnabon innovation on the breakfast menu

Wendy's

(NEW YORK) -- Everyone knows the best part of freshly made cinnamon rolls are the gooey melty center, so Wendy's worked with Cinnabon to create a sweet new pastry for its breakfast menu that delivers all the flavor, texture and nostalgia of the iconic confection.

On Wednesday, the Ohio-based fast food chain announced its newest breakfast innovation, Cinnabon Pull-Aparts, which will be available on menus starting Feb. 26.

Wendy's spin on the classic cinnamon roll is reminiscent of pull-apart monkey bread. It starts with small bite-size pieces of Danish dough that's dunked in glaze, baked with cinnamon, brown butter and sugar and enveloped in Cinnabon's signature cream cheese frosting.

Building on the breakfast momentum and success of its French toast sticks, the brand said it wanted to consider customer requests "for even more comfort food on the menu."

"We’re tapping into what our consumers want, based on our research. They crave comfort and nostalgic experiences, and from a food perspective, a sweet and indulgent item is perfect for bringing someone into that comfort zone," Global Vice President of Culinary Innovation John Li said of the new pull-aparts. "This product does that because we’ve partnered with the right brand who believes in quality and delivering that same emotional benefit."

Erynn Bennett, manager of Culinary Innovation, added that the latest addition to the menu is a great complement to items like the breakfast baconator and breakfast potatoes.

Check back for pricing later this month.

Copyright © 2024, ABC Audio. All rights reserved.


Dole announces voluntary recall of salad kits for potential listeria contamination

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(NEW YORK) -- Dole Fresh Vegetables, Inc. has announced a voluntary recall of a "limited number" of Dole-branded and private label salad kits due to potential cross contamination with cheeses recalled for possible listeria contamination.

A company recall notice posted on the U.S. Food and Drug Administration website and Dole's company website states that the salad kits were recalled because they were processed on the same line as a cheese product from Rizo-Lopez Foods, which had previously been recalled for the "possible presence of Listeria monocytogenes."

"This recall notification is being issued due to the potential for cross-contamination of cheese contained in certain masterpacks by cheese potentially contaminated with Listeria monocytogenes from our packaged cheese supplier," the Monterey, California-based company wrote in its recall announcement. "At this time, we are unaware of any specific illnesses associated with our products, or by other purchasers of their recalled cheese."

The recalled salad kits were sold in 25 states as well as the Canadian provinces of Alberta, British Columbia, New Brunswick, Ontario, and Quebec.

Eight salad kit products are affected by the recall, including the Dole Chopped Kit Avocado Ranch, Premium Kit Southwest Salad, Cajun Ranch Chopped Kit, Premium Kit Endless Summer and Chopped Salad Kit Bacon Ranch Crunch, among others.

The products have "Best if used by" dates between Feb. 3 and 21. Click here for specific "use by" dates, lot codes, UPC numbers and specific product names and details, as well as photos of the recalled items.

Dole has advised customers in possession of any recalled products to dispose of them immediately.

"Dole retailers have been advised to check store shelves and warehouse inventories to confirm that no recalled product is available for purchase by consumers," the company added, stating that it is "coordinating closely with regulatory officials" on the matter.

Dole Fresh Vegetables did not immediately respond to ABC News' request for comment.

Customers and retailers with questions about the recall may contact the Dole Consumer Response Center at 800-356-3111, Monday through Friday from 8 a.m. to 3 p.m. Pacific Time.

Dole's announcement stems from an earlier recall issued by Rizo-López Foods, which voluntary recalled all cheeses and other dairy products made in its Modesto facility "because they have the potential to be contaminated with Listeria monocytogenes," the company said in a press release on Feb. 5.

The company said in the release that the recall was being carried out with the knowledge of the U.S. Food and Drug Administration, which shared the company announcement on its website the following day.

The Centers for Disease Control and Prevention also issued a food safety alert for recalled cheeses, yogurts and sour creams potentially linked to a multistate outbreak of listeria that has sickened 26, hospitalized 23 and left two people dead.

In a statement provided to ABC News, Edwin Rizo, CEO and owner of Rizo Lopez Foods, Inc., said this was the first time "any product that we manufacture has been linked to a foodborne illness."

"As soon as we were aware of this, we made the immediate decision to stop production and voluntarily recall all our products manufactured in our facility. We are working hard and diligently to find the root cause of the problem and take corrective actions to prevent it from happening again. The health and well-being of our customers is our top priority," the statement read.

According to the CDC, listeria can cause severe illness "when the bacteria spread beyond the gut to other parts of the body" after a person consumes contaminated food. Those at higher risk include pregnant people, those aged 65 or older, or anyone who has a weakened immune system, the CDC says.

In 2021, Dole recalled all Dole-branded and private label packaged salads processed at its facilities in Bessemer City, North Carolina and Yuma, Arizona after the FDA said a random analysis of packages of a Dole-branded garden salad from the two facilities found samples of a strain of Listeria monocytogenes.

Copyright © 2024, ABC Audio. All rights reserved.


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