Business

(Reuters) – Honda’s U.S. financing arm was ordered on Friday by the U.S. Consumer Financial Protection Bureau to pay $12.8 million for reporting inaccurate information that affected the credit reports of 300,000 drivers of Honda and Acura vehicles.

The CFPB said American Honda Finance deferred some drivers’ loan payments during the COVID-19 pandemic, only to then tell credit reporting agencies that the drivers were delinquent when they should have been reported as current.

“False accusations on a credit report can have serious implications for Americans seeking a job, housing or a loan,” CFPB Director Rohit Chopra said in a statement faulting the financing arm’s “sloppy practices.”

The $12.8 million payment includes a $2.5 million civil fine and $10.3 million in restitution to drivers.

(Reporting by Jonathan Stempel in New York)

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WASHINGTON (AP) — The national debt is slated to rise by $23.9 trillion over the next decade, a sum that does not include trillions of dollars in additional tax cuts being championed by President-elect Donald Trump.

The nonpartisan Congressional Budget Office released its 10-year budget outlook on Friday that showed a slightly brighter picture as higher taxable incomes will relieve some pressure on the rising national debt. Still, annual budget deficits are expected to be equal to 6.1% of U.S. gross domestic product in 2035, which the CBO noted is “significantly more than the 3.8 percent that deficits have averaged over the past 50 years.”

The analysis paints a difficult picture for an incoming Republican administration bent on cutting taxes in ways that further widen deficits unless they’re also paired with major spending cuts. Trump’s proposed extension of his 2017 tax cuts that are set to expire after this year along with new cuts could easily exceed $4 trillion and his nominee to be treasury secretary, Scott Bessent, warned Thursday that the economy could crash without them.

“We do not have a revenue problem in the U.S.,” Bessent insisted at his confirmation hearings. “We have a spending problem.”

The CBO numbers suggest more bluntly that there is a persistent and possibly worsening gap between the taxes that Americans are willing to pay and the services they expect government to provide. The CBO noted that cumulative deficits from 2025-2034 would be smaller by $1 trillion relative to its June forecast, largely because the amount of taxable income is expected to increase.

Still, the budget deficit is expected to be $1.87 trillion this year, a slight decline from the $1.91 trillion shortfall last year.

Deficits as share of the total economy would then narrow through 2027 as tax collections would increase faster than outlays, a trend that would then reverse as spending grew faster due to the costs of Social Security, Medicare and servicing the national debt.

The federal government is poised to spend $7 trillion this fiscal year, a sum that would equal about 23.3% of GDP.

While tax revenues as a share of the total U.S. economy are close to the 50-year average, government spending is poised to continue growing. Discretionary spending on national security and social programs will account for $1.85 trillion next year. The CBO already has spending in these categories on a downward trajectory as discretionary spending would equal 5.3% of GDP, down from the half-century average of 7.9%.

With an aging population, government spending would largely increase because of Social Security and Medicare — two programs popular with voters that many Republicans and Democrats alike have vowed to protect, despite clear signs that they’re on an unsustainable path.

Michael Peterson, CEO of the Peter G. Peterson Foundation — which among other things tracks the federal debt — said in a statement that “as lawmakers consider the range of expiring tax policy at the end of the year, they should make a commitment to at least ‘do no fiscal harm’.”

“They should avoid budget gimmicks and base their assumptions on neutral, nonpartisan estimates like this one from CBO,” he said.

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Associated Press reporter Fatima Hussein contributed to this report.

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U.S. auto safety regulators have opened an investigation into complaints that General Motors vehicles equipped with certain V8 engines, including its best-selling Silverado, can seize up without warning.

The National Highway Transportation Safety Administration on Thursday said it was investigating an estimated 877,710 vehicles after receiving 39 complaints from users of GM vehicles equipped with L87 V8 engines.

The NHTSA said complainants reported “no detectability prior to the engine failure,” which can lead to an increased risk of a crash resulting in injury and/or property damage. A bearing failure can cause the engine to seize or a breaching of the engine block by a connecting rod, regulators said.

The vehicles included in the preliminary investigation include: 2019-2024 Chevrolet Silverado 1500; 2021-2024 Chevrolet Tahoe; 2021-2024 Chevrolet Suburban; 2019-2024 GMC Sierra 1500; 2021-2024 GMC Yukon; 2021-2024 GMC Yukon XL; 2021-2024 Cadillac Escalade; and 2021-2024 Cadillac Escalade ESV.

General Motors was the U.S. leader in 2024 auto sales, posting a 4.3% increase in sales for the year, its best performance since 2019. Its Silverado pickup truck was the second-best selling vehicle in the U.S. last year.

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By Jody Godoy

(Reuters) – The U.S. Federal Trade Commission sued Pepsi on Friday for offering preferential pricing to a larger retailer, whom a source familiar with the matter confirmed was Walmart.

The practices fed high consumer prices by leaving other retailers, from large grocery chains to independent convenience stores, to pay more, the FTC said.

The lawsuit filed in New York alleges that the soft drink manufacturer violated the Robinson-Patman Act, a law that went largely unenforced for decades by the federal government.

Walmart and PepsiCo did not immediately respond to Reuters requests for a comment.

“The FTC’s action will help ensure all grocers and other businesses—no matter the size—can get a fair shake and compete on the merits of their skill, efficiency, and talent,” outgoing FTC Chair Lina Khan said in a statement.

The FTC’s two Republican commissioners, including Andrew Ferguson, who will chair the commission after President-elect Donald Trump takes office on Monday, voted against the case.

(Reporting by Jody Godoy in California; Editing by Chizu Nomiyama)

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By Allison Lampert

(Reuters) – The largest U.S. aerospace trade group on Friday opened the door to discussions on specific tariffs, after incoming President-elect Donald Trump suggested slapping duties on countries like Mexico and Canada.

Aerospace Industries Association (AIA), which represents U.S. planemaking and defense giants like Boeing and General Dynamics, waded in on the prospect of tariffs for the first time, saying in a statement it would discuss how to tailor them to protect national security and key industries.

The statement did not give specifics.

“We are eager to work with the Trump administration to discuss where tariff policy may support our products, while also ensuring the industry is empowered to continue growing in a way that supports U.S. national security needs and maintains our position as a leading high-technology, U.S.-centered manufacturing sector,” the statement said.

Trump’s warning in November about potential 25% tariffs on imports from Mexico and Canada have already triggered threats of retaliation from Ottawa and raised concerns among sectors like automotive that the move could also hit U.S. industry.

In 2023, Canada was the top import country and third largest export destination for aerospace and defense trade with the United States, according to AIA. Mexico was not among the top five.

(Reporting By Allison Lampert in Montreal. Additional reporting by Tim Hepher in Paris and Mike Stone in Washington; Editing by Chizu Nomiyama)

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By Yuka Obayashi

TOKYO (Reuters) – Oil prices climbed on Friday, heading for a fourth weekly gain, driven by concerns over tighter supply following U.S. sanctions on Russian oil producers and signals from a Federal Reserve official of potential interest rate cuts.

Brent crude futures rose 13 cents, or 0.2%, to $81.42 per barrel by 0113 GMT, after declining 0.9% in the previous session. U.S. West Texas Intermediate crude futures were up 27 cents, or 0.3%, to $78.95 a barrel after dropping 1.7% on Thursday.

Both contracts fell on Thursday with Yemen’s Houthi militia expected to halt attacks on ships in the Red Sea. Still, they remain on course for a fourth weekly gain, with Brent up 9% and WTI rising 10% year-to-date.

“Supply concerns from U.S. sanctions on Russian oil producers and tankers, combined with expectations of a demand recovery driven by potential U.S. interest rate cuts, are bolstering the crude market,” said Toshitaka Tazawa, an analyst at Fujitomi Securities.

“The anticipated increase in kerosene demand due to cold weather in the U.S. is another supportive factor,” he added.

Investors are assessing the Biden administration’s latest round of sanctions targeting Russia’s military-industrial base and sanctions-evasion efforts, following broader measures against Russian oil producers and tankers.

Moscow’s top customers are now scouring the globe for replacement barrels, driving a surge in shipping rates.

Inflation is likely to continue to ease and possibly allow the U.S. central bank to cut interest rates sooner and faster than expected, Federal Reserve Governor Christopher Waller said on Thursday, countering recent market bets on a shallower rate path.

In the U.S., natural gas futures jumped about 4% to a two-year high on Thursday on colder weather forecasts for the Martin Luther King Jr. Day holiday weekend.

In the Middle East, maritime security officials said the Houthi militia is expected to announce a halt in its attacks on ships in the Red Sea, after a ceasefire deal in the war in Gaza between Israel and the militant Palestinian group Hamas.

The attacks have disrupted global shipping, forcing firms to make longer and more expensive journeys around southern Africa for more than a year.

But investors remained cautious, as the Houthis leader said his group would monitor the implementation of the ceasefire deal, and continue its attacks on vessels or Israel if the deal is breached.

(Reporting by Yuka Obayashi; Editing by Stephen Coates)

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By Katie Paul

NEW YORK – Chinese social media app RedNote, known in China as Xiaohongshu, gained nearly 3 million U.S. users in one day earlier this week as a flood of self-proclaimed “TikTok Refugees” joined, according to new data from analytics firm Similarweb.

The Chinese-language app had about 3.4 million daily active users across both iOS and Android devices in the United States as of Monday, up from fewer than 700,000 the day prior, and around 300,000 the week prior, according to the Similarweb estimate.

The influx of users has been driven by a looming U.S. ban on TikTok, used by 170 million Americans, on national security concerns.

The data suggests an even larger shift to RedNote by U.S. users this week than was previously known, explaining its dramatic rise to the top of U.S. app store download rankings. Reuters reported on Tuesday that more than 700,000 new users had joined the app in only two days.

It also shows the platform racing ahead of TikTok sister app Lemon8, which experienced a moderate surge of its own after parent company ByteDance linked the login functions of the two apps in November.

Lemon8 had 1.7 million daily active users in the United States on Monday, up from around 1.1 million in previous weeks, according to Similarweb.

Meanwhile, U.S. usage of TikTok declined ahead of the ban, down 2.1% week over week to about 82.2 million daily active users, Similarweb said.

Many Chinese users on RedNote welcomed the newcomers and responded eagerly to questions on topics such as popular Chinese dishes, city tourist sights and even China’s birth policies, although there were also signs that U.S. users were testing limits established by Beijing’s censors.

China for years has tightly controlled cyberspace through its “Great Firewall” censorship architecture and blocked foreign social media networks such as Instagram and X.

U.S. users who have amassed followings and careers on TikTok had hoped for months that it would find a way to avoid a U.S. ban passed into law in 2023, but resignation appeared to set in this week as the Jan. 19 deadline approached.

(Reporting by Katie Paul in New York; Editing by Matthew Lewis)

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BEIJING (Reuters) -China’s economy ended 2024 on better footing than expected helped by a flurry of stimulus measures, although the threat of a new trade war with the United States and weak domestic demand could hurt confidence in a broader recovery this year.

For the full-year 2024, the world’s second-largest economy grew 5.0%, meeting the government’s annual growth target of around 5%. Analysts had forecast 4.9% growth.

The economy grew 5.4% in the fourth quarter from a year earlier, significantly beating analysts’ expectations and marking the quickest since the second quarter of 2023.

KEY POINTS

* 2024 GDP +5.0% (versus target of around 5%)

* Q4 GDP +5.4% y/y (f’cast +5.0%, Q3 +4.6%)

* Q4 GDP +1.6% q/q s/adj (f’cast 1.6%, Q3 +1.3% revised)

* Dec industrial output +6.2% y/y (f’cast +5.4%, Nov +5.4%)

* Dec retail sales +3.7% y/y (f’cast +3.5%, Nov +3.0%)

* 2024 fixed asset investment +3.2% (f’cast +3.3%, Jan-Nov +3.3%)

* 2024 property investment -10.6% (Jan-Nov -10.4%)

* Fears of more U.S. trade tariffs clouding 2025 outlook

MARKET REACTION:

China’s main Shanghai stock market was up 0.3%, while the blue-chip CSI 300 index was 0.4% higher after the data release. The yuan was little changed against the dollar.

COMMENTARY:

ELLIOT CLARKE, SENIOR ECONOMIST, WESTPAC, SYDNEY

“Overall, these are outcomes as expected, and what’s driving them is expected as well that external sector. And really to make sure they’re in a strong position to weather the uncertainty around U.S. tariffs, and to make sure consumers don’t get stuck, they need to do more with policy through February and March when we get the congress meeting.

“They will cut interest rates a bit further this year and cut triple R to support liquidity. So that all continues, but really the driving force for the growth outlook has to be the fiscal side.

“They can achieve close to 5% growth in 2025. That’s on the assumption that they do take that active stance with policy and it’s on the assumption as we have seen with trade this year they have got themselves into a good position in terms of avoiding U.S. tariffs.”

GARY NG, SENIOR ECONOMIST, NATIXIS, HONG KONG

“The underlying headwind is fiercer than the headline GDP number suggests. With strong net export growth and more supportive stimulus, some positive momentum has been brewing in the economy towards stabilisation.

“However, domestic demand has remained weak without a rebound in industrial production and retail sales, especially as the property sector still drags investment. If China wants to achieve a growth rate above 4.5% in 2025, it will need sharper interest rate cuts and more demand-side fiscal policies.”

LYNN SONG, CHIEF ECONOMIST FOR GREATER CHINA, ING, BASED IN HONG KONG

“After reaching the growth target in 2024, the key question for 2025 is where policymakers will set the growth target at the upcoming Two Sessions in March. Our baseline scenario has policymakers electing to set a target of “around 5%” again or at the least “above 4.5%’. 

“Setting of such a target despite likely headwinds from tariffs and sanctions would imply that we will see stronger fiscal policy support as well as continued monetary policy easing and would likely be seen by markets as a signal of confidence.”

ALEX LOO, FX AND MACRO STRATEGIST, TD SECURITIES, SINGAPORE

“We don’t reckon the economy is on a strong footing despite the recent stimulus bump, and more fiscal funds are likely to be deployed at the Budget on March 5 to cushion China’s economy against the Trump (administration’s) policies. 

“Focus turns to Trump’s actions on China next week and a 60% tariff on China may prompt the PBOC to cut the 7-day reverse repo next week to boost activity through monetary easing.

“For 2025, we expect China’s GDP growth at 4.8%, as an around 5% target is likely to be unveiled at the Budget judging by the local government GDP targets.”

ANDY JI, ASIAN FX & RATES ANALYST, ITC MARKETS, SHANGHAI

“It is largely a mixed bag of economic data today to end 2024, with some data discrepancy and clearly carrying lacklustre momentum into 2025. In particular, the full-year pace of retail sales and investment growth, at 3.5% and 3.2%, respectively, remained significantly below the overall headline GDP growth of 5%.

“With U.S. trade policy change looming, this year’s growth target will be closely watched again in March, although too little attention was paid to the big miss in 2024 inflation target of ‘about 3%’, on the back of weak consumer spending.”

BEN BENNETT, ASIA-PACIFIC INVESTMENT STRATEGIST, LEGAL AND GENERAL INVESTMENT MANAGEMENT, HONG KONG

“The data is an endorsement of the economic shift that authorities have implemented. The property sector is still under pressure and authorities don’t want to see a return to the old days of leverage and big price rises, so investors still need to be patient.”

ZHIWEI ZHANG, CHIEF ECONOMIST, PINPOINT ASSET MANAGEMENT, HONG KONG

“The batch of macro data shows mixed messages. While the GDP growth surprised on the upside in Q4, the unemployment rate rose above 5%. I think the shift of policy stance last September helped the economy stabilise in Q4, but it requires large and persistent policy stimulus to boost economic momentum and sustain the recovery. To curb the rise in unemployment rate, fiscal policy must take a more proactive stance.”

ZHAOPENG XING, SENIOR CHINA STRATEGIST, ANZ, SHANGHAI

“GDP surprises the market at 5.4% y/y high on a low base as well as policy stimulus. IP is strong due to external frontloading demand, while retail sales normalise to annual average levels.

“The strong numbers pave the way to about 5% 2025 growth target and offer a chance for China to review the risk side in the economy. Recent liquidity tightness and Vanke saga both suggest macro prudential now carry more weight than growth in the policy agenda ahead of U.S. tariffs. We expect the PBoC to ease immediately against the possible tariff shock. Near-term RRR cut before LNY remains possible, but rate cut may delay.”

WOEI CHEN HO, UOB, ECONOMIST, SINGAPORE

“It’s mainly driven by the industrial sector in December. Part of this would be to do with front-loading of production and exports before (U.S. President-elect Donald) Trump comes back to office.

“That may not be sustained going forward, so the outlook for this year is still going to be weak. Retail sales is one of the most important things we should be watching now because it is a reflection of the consumer sentiment, which I think is still rather soft at this point.”

CHARU CHANANA, CHIEF INVESTMENT STRATEGIST, SAXO, SINGAPORE

“That’s a sigh of relief for Chinese assets, it signals that the stimulus measures of 2024 are having an impact. China markets still face structural headwinds as well as tariffs risks, and the response to those will be the ultimate driver of long-term returns. The beat is quite strong on industrial production – perhaps that’s because of the export front-loading to the U.S. before the new administration’s tariffs kick in. Property still weak, retail sales comes more from the stimulus impact.

“Positive signals, but we will need to see how stimulus and tariff risks develop from here for the momentum to sustain.”

BACKGROUND

* China’s economy has struggled for traction since a post-pandemic rebound quickly fizzled out, with a protracted property crisis, weak demand and high local government debt levels weighing heavily on activity.

* Policymakers have unveiled a blitz of stimulus measures since last September to revive sputtering growth, and have pledged to do more this year as U.S. President-elect Donald Trump, who has proposed hefty tariffs on Chinese goods, is set to return to the White House next week.

* Analysts say the scope and size of China’s moves may depend on how quickly and aggressively Trump implements tariffs or other punitive measures.

* China is expected to unveil growth targets and stimulus plans during the annual parliament meeting in March.

* The world’s second-largest economy is likely to slow to 4.5% in 2025 and cool further to 4.2% in 2026 amid U.S. tariff pressures, a Reuters poll showed.

(Reporting by Reuters Asia bureaus; Compiled and edited by Subhranshu Sahu)

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SEATTLE (Reuters) – Boeing resumed testing for its long-delayed 777X widebody jet on Thursday, with the first flight since the U.S. planemaker grounded the test fleet in August due to the failure of a key engine mounting structure. 

The grounding came just five weeks after it had started certification flights for the 777-9 with officials from the U.S. aviation regulator onboard. 

Federal Aviation Administration staff were not on board for Thursday’s flight, according to the company.  

The 777X is the successor to Boeing’s 777, one of the most commercially successful long-haul airliners. The company initially planned to deliver the first 777X to launch customer Qatar Airways in 2020. 

First delivery of the 777-9 has since been pushed back to 2026, followed by the smaller 777-8 and a freighter version later in the decade. 

Boeing’s other 777X airline customers include Emirates, Lufthansa, Singapore Airlines and Cathay Pacific Airways. The planemaker has 481 777X orders, including 170 from Emirates and 60 from Qatar, according to Cirium, an aviation industry analytics company.  

Boeing’s 777-9 test plane made a return flight from Boeing Field in Seattle to Moses Lake, Washington on Thursday. 

“We continue to execute a rigorous test program to demonstrate the safety, performance and reliability of the 777-9,” Boeing said after it landed in the afternoon.

A company spokesperson declined to comment on how the airplane performed during the flight. 

(Reporting by Dan Catchpole; Editing by Jamie Freed)

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BEIJING (Reuters) – China’s economy grew 5.4% in the fourth quarter from a year earlier, official data showed on Friday, significantly beating analysts’ expectations and enabling the government to meet its annual growth target.

Analysts polled by Reuters had forecast fourth-quarter gross domestic product (GDP) would expand 5.0% from a year earlier, quickening from the third-quarter’s 4.6% pace as a flurry of support measures began to kick in. The quarter’s growth marked the quickest since the second quarter of 2023.

For the full-year 2024, the world’s second-largest economy grew 5.0%, data from the National Bureau of Statistics data showed, meeting the government’s annual growth target of around 5%. Analysts had forecast 4.9% growth.

On a quarterly basis, GDP grew 1.6% in October-December, compared with a forecast 1.6% increase and a revised 1.3% gain in the previous quarter.

Chinese policymakers have unveiled a blitz of stimulus measures since September last year to revive sputtering growth, and have pledged to do more this year as U.S. President-elect Donald Trump, who has proposed hefty tariffs on Chinese goods, is set to return to the White House next week.

(Reporting by Kevin Yao; Writing by Ellen Zhang; Editing by Jacqueline Wong)

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