U.S. consumer spending rose by an inflation-adjusted 0.3 percent in September, led by increased spending on health care services and motor vehicles.
The Commerce Department also said Monday that the Federal Reserve’s preferred measure of inflation returned to the central bank’s 2 annual percent target after having been slightly elevated in prior months. In addition, personal incomes rose 0.2 percent in September — the smallest gain since June 2017. Roughly half of that increase was wiped out by inflation.
Consumer spending accounts for the majority of U.S. economic activity, and it was the key driver of overall growth during the July-September quarter. The economy climbed at an annual rate of 3.5 percent in that quarter, helped by the strongest jump in consumer spending in about four years, the Commerce Department said Friday.
But economic growth slowed from a 4.2 percent gain in the second quarter as the pace of business investment fell and continued growth may depend even more on consumer spending.
The Fed’s preferred inflation metric — personal consumption expenditures — found that prices ticked up just 0.1 percent in September.
The personal savings rate slipped to 6.2 percent in September, the lowest level in 2018.
IBM Buying North Carolina-Based Red Hat in $34B Deal
IBM says it will acquire North Carolina-based open-source software company Red Hat in a $34 billion stock deal.
The technology and consulting company announced Sunday it would buy all Red Hat shares at $190 apiece — 63 percent above Red Hat’s closing price Friday. The two companies said the deal is subject to Red Hat shareholder and regulatory approval and should be completed in the latter half of 2019.
IBM chief executive Ginni Rometty says the acquisition would make IBM the world’s No. 1 hybrid cloud provider — that’s when companies use a mix of on-site, private and third-party public cloud services.
The two companies said IBM intends to keep Red Hat’s headquarters in Raleigh, where Red Hat has more than 2,000 employees. Red Hat has over 12,000 workers worldwide.
Google to Give Away $25 Million to Fund Humane Ai Projects
Google will give away $25 million to projects that propose ways to use the artificial intelligence of computers to help create a more humane society.
The grant program announced Monday is part of a broader Google initiative called “AI for Social Good” aimed at easing concerns that advances in artificial intelligence will eliminate jobs and perhaps even be autonomously deployed by militaries to kill people.
Other technology companies have taken similar steps to address ethical issues in AI. For instance, Microsoft has committed $115 million to an “AI for Good” initiative that provides grants to organizations harnessing AI for humanitarian, accessibility and environmental projects.
Google says its AI technology already helps diagnose diseases and helps people with disabilities.
Google’s nonprofit arm will announce the AI grant winners next spring.
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