WSJ What’s News - Trump Blames D.C. Plane Crash on Diversity Initiatives

Episode Date: January 30, 2025

P.M. Edition for Jan. 30. No survivors have been found in a midair collision of a plane and a military helicopter last night outside Washington, D.C. Plus, new data show that the U.S. economy grew more slowly last year than the year before. We hear from WSJ economics correspondent Harriet Torry about what that means for the economy in 2025. And investors that up until recently shied away from office space seem to be coming back. Journal reporter Peter Grant explains why. Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Consumers were really the driving force of economic growth in 2024. They really performed very strongly. And is the office real estate market finally starting to turn around? It's Thursday, January 30th. I'm Alex Osoleff for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today. lines and business stories that move the world today. Let's start with last night's deadly air crash.

As we've been reporting, a plane carrying 64 passengers collided with a military helicopter carrying three troops near Washington, D.C.'s Reagan National Airport, which has one of the most congested air spaces in the U.S. No survivors have been found. Among the jet's passengers were U.S. figure skaters, coaches, and relatives returning from a training camp. Russian media said three former world champions were on board. The crash is the deadliest on U.S. soil in more than two decades.

The National Transportation Safety Board, which is overseeing the investigation of the crash, said the aircraft's flight data recorders haven't been recovered yet. In an address this morning, President Trump claimed that the Federal Aviation Administration changed its standards under former President Joe Biden. The FAA is actively recruiting workers who suffer severe intellectual disabilities, psychiatric problems, and other mental and physical conditions

under a diversity and inclusion hiring initiative spelled out on the agency's website. It wasn't immediately clear whether the Biden administration had changed hiring standards at the FAA. When asked by reporters how he concluded that diversity initiatives were at fault, Trump said, Because I have common sense, okay, and unfortunately a lot of people don't. The president added later that he wasn't sure whether air traffic controllers were the cause of the crash. Former Transportation Secretary Pete Buttigieg called President Trump's criticism of the FAA and the prior administration, quote, despicable at a time of tragedy and disputed his characterization of events.

The U.S. economy grew last year, more slowly than the year before, but still at a solid pace. The Commerce Department said today that gross domestic product grew 2.5% in 2024 compared to 3.2% of growth in 2023. Here to tell us more about the numbers is WSJ economics correspondent Harriet Torry. Harriet, what drove this growth? Consumers, in a word. Consumers were really the driving force of economic growth in 2024. They really performed very strongly.

And in the fourth quarter, consumer spending even picked up, which I think came as a surprise to a lot of people. Consumers enjoyed a low unemployment rate for most of the year and wages grew, inflation eased. So there were some good ingredients for people to feel comfortable about continuing their spending and they did that. Is the picture universally rosy though for consumers? There's a lot of uncertainty headed into 2025. We of course have some proposals,

policy proposals that some economists are worried will fire up inflation again, like for instance, worker deportations and tariffs on imports that could make goods more expensive. But generally speaking, you know, the labor market remains pretty steady and the Fed is holding rates at its current pretty high level in order to keep inflation in check. So things look pretty good from the consumer side. There are a few other things going on. We did see a bit of a dip in business investment in the fourth quarter. Businesses drew down their inventories rather than buying new stuff to put on their stock shelves. But when you look at a lot of the underlying demand, it's clear that the economy does still remain very strong. But one thing that we are seeing that is of some concern to the Fed is inflationary pressures picked up a bit in the fourth quarter.

If you look at core inflation in the fourth quarter, it was slightly higher than it was in the third quarter. And that is definitely a negative development. That was WSJ Economics correspondent Harriet Torry. Thank you, Harriet. Thanks so much. As we heard, consumers are buying, but apparently not all of them. For me, I love getting new clothes for my baby, but I love it even more when I don't

have to pay for them. And I'm not the only one. The No Buy 2025 trend on social media encourages people to purchase as little new stuff as possible. The Your Money Briefing podcast spoke with Anne-Marie Alcantara, who covers internet culture for the Wall Street Journal, about what's driving the trend. It seems to come down to three reasons this year. Inflation, of course, has been top of mind for so many consumers. Just the ebb and flow of prices going up and down, feeling like they actually never

go down. And then, of course, a lot of people have accumulated debt for various reasons, medical, personal, sorts of things like that. And then the holiday season. It felt like this year for some people they overspent on gifts for friends and family and are realizing now the wrapping paper is in the trash and the toys are cluttering their homes that maybe they overdid it a bit. To hear more from Anne-Marie Alcantara, listen to tomorrow's episode of the Your Money Briefing podcast. All three major U.S. stock indexes ended higher today. The Nasdaq was up a quarter of a percent, the Dow rose about 0.4 percent, and the S&P

500 gained about half a percent. American Airlines shares declined 2.5 percent after the plane crash in Washington, D.C. that involved a jet operated by the carrier. The European Central Bank has lowered interest rates by a quarter point and signaled more rate cuts to come. It's an effort by the ECB to boost economic activity in the stagnant Eurozone. According to data published today, economic growth came to a standstill in the three months through December. Europe's export-oriented economy is highly exposed

to trade tariffs from the US, the continent's biggest export destination. Coming up, why investors are finally making new bets on offices. That's after the break. Miller Lite. The light beer brewed for people who love the taste of beer and the perfect pairing for your game time. When Miller Lite set out to brew a light beer, they had to choose great taste or 90 calories per can. They chose both because they knew the best part of beer is the beer. Your game time tastes like Miller time. Learn more at MillerLite.ca.

Must be legal drinking age. We've talked a lot on the show about the troubled US office market. Well, for the first time in five years, the outlook for that market seems brighter. Investors who might've shunned offices in the past are coming back and making new bets on office properties. My colleague Anthony Bansi spoke with reporter Peter Grant about why investors are returning

to the market. Well, for one thing, the market basically crashed after the pandemic emptied out office districts and higher interest rates sent commercial property prices down. And so now as the market is beginning to stabilize, investors are looking at these low prices and say, wow, there are bargains to be had, and they're beginning to explore and they're beginning to start buying again. So are they looking out for any particular properties? There are a lot of different strategies that they're pursuing.

One is just to buy empty buildings and basically knock them down and turn them into apartment buildings. That's one play. Other plays are looking at the fact that leasing is beginning to stabilize and demand for offices beginning to come back because companies increasingly are requiring their workers to be back at the office more of the time. Not five days a week, but more of the time, and that's increasing office demand. The tricky part, though, is that it's not across the board.

Demand is focusing on those buildings which have great locations, a lot of amenities, and are the kind of places that businesses want to locate so their workers want to go to the office. Does that mean that this turmoil within the office market has been cleared? The office market is still very challenged. Yes, leasing activity is going up, but there are still record vacancies in most markets. And companies are not taking as much space as they used to have. So even though buying has restarted in the office market, it still pales in comparison to what it used to be before the pandemic.

For example, last year, we saw about $64 billion worth of office building sales in the U.S. That was up about 20% from 2023, but it was still only half of what it was in the years leading up to the pandemic. It's also important to look at the nature of who the buyers are that are now coming into the market. The big institutions like pension funds and college endowments that used to be big buyers of office, they're still on the sidelines.

They're still very wary of returning to the market. So it's mostly those players with a lot of real estate savvy that are beginning to do the buying. That was reporter Peter Grant speaking with my colleague, Anthony Bansi. That was reporter Peter Grant speaking with my colleague Anthony Bancy. ————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————— for health secretary seemed shaky as senators spelled out their concerns during his second hearing, this time in front of the Health, Education, Labor and Pensions Committee. Director of National Intelligence Pick Tulsi Gabbard disappointed Democrats and Republicans alike in the Intelligence Committee for refusing to denounce Snowden as a traitor, though she received a pass on it from

some GOP lawmakers. Democrats questioned whether Cash Patel, Trump's pick to be the director of the Federal Bureau of Investigation, could be independent for the president, but they unearthed no new bombshells that might threaten his nomination. Republicans seem to largely favor him. Apple's iPhone sales fell in the December quarter, a sign that its artificial intelligence software has yet to kick off a new cycle of growth for its most valuable product. Apple's total revenue was $124.3 billion, growing almost 4% from the same quarter last year.

The company reported a sales drop in China of more than 11% to $18.5 billion, missing analysts' expectations. And chipmaker Intel reported a slump in fourth quarter sales and gave a gloomy outlook for its current period. The company's sales were $14.3 billion in the fourth quarter, down 7% but better than what analysts expected. It reported a net loss of $126 million in the quarter. And finally, planetary scientists have discovered organic matter essential to life in a sample retrieved from an asteroid known as Bennu. The finding supports the theory that near-Earth asteroids like Bennu seeded life on our world.

Science reporter Eric Neiler tells us about the significance of the discovery detailed in two papers published yesterday. This asteroid contained the building blocks of life that have never ever seen before on any other asteroid or meteorite, chemical, organic matter from RNA and DNA, amino acids, minerals, salts, the basic material that you need to create life and what it does is it raises the idea, the possibility that this asteroid or asteroids like it could have seeded life on early Earth, early Mars, other moons and other planets in our solar system. That's why it's so important.

There are still a lot of questions, like why life didn't evolve on Bennu itself and whether similar conditions might be present today in other parts of the solar system. Meanwhile, more research is being conducted on the Bennu sample. And that's what's news for this Thursday afternoon. Today's show was produced by Pierre Bienneme and Anthony Bansi with supervising producer Michael Kosmitis. I'm Alex Osala for The Wall Street Journal. We'll be back with a new show tomorrow morning.

Thanks for listening.