3. Airlines profit from strong demand
Strong travel demand, even in the face of inflation and expensive fares, lifted American Airlines’ quarterly results, which were largely in line with analysts’ expectations. The company said Thursday it also expects to post a profit for the current period. United Airlines on Wednesday reported its first profit without government aid since the pandemic began, but the carrier’s results came in below Wall Street’s expectations. CEO Scott Kirby cited three big challenges the company faces over the next 18 months: “Industry-wide operational challenges that limit the system’s capacity, record fuel prices and the increasing possibility of a global recession.” Shares of both airlines declined before the bell Thursday.
4. Microsoft slows hiring
Add Microsoft to the list of tech giants that are getting more conservative when it comes to hiring and spending. The company said it would scale back on adding employees as inflation weighs on consumers and some see a potential recession on the horizon. “As Microsoft gets ready for the new fiscal year, it is making sure the right resources are aligned to the right opportunity,” a company spokesperson told CNBC. Google parent Alphabet and Facebook parent Meta are also slowing their hiring pace. Apple, too, is reportedly aiming to ease back on spending and hiring for certain teams.
5. Gas price peak?
Gasoline prices are coming down, and there’s a strong chance the United States saw a peak when the average price hit $5.01 in June. It’s likely due to two major factors: lower demand as people cut back on road travel and continue to work from home, and supply growth. Some drivers are now paying under $4 a gallon, although it’ll take a while to get the national average down to that point. It was at $4.440 per gallon as of Thursday, and there are still plenty of variables that could lead to another price spike, including the potential for hurricanes disrupting production in the Gulf of Mexico.
– CNBC’s Jesse Pound, Lora Kolodny, Leslie Josephs, Jordan Novet and Patti Domm contributed to this report.
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