WSJ What’s News - Why Economists Are Urging Caution About November’s Inflation Report

Episode Date: December 18, 2025

P.M. Edition for Dec. 18. Inflation eased to 2.7% in November, lower than economists expected. WSJ’s Chao Deng explains why they are taking the report with a grain of salt. President Trump’s media company and a fusion energy company announced a merger valued at $6 billion. Read more about the Trump family’s growing business empire. And WSJ security reporter Benoit Faucon discusses what the attack at Sydney’s Bondi Beach reveals about the threat posed by ISIS. Sabrina Siddiqui hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

President Trump's media company struck a $6 billion deal to merge with a fusion power company. Plus, November inflation dropped to 2.7%. But why are economists taking the report with a grain of salt? Even before this report came out, Fed Chairman Jerome Powell was warning that there could be potential distortions and really playing down the data. And the Kennedy Center's board voted. to rename it as the Trump Kennedy Center. It's Thursday, December 18th. I'm Sabrina Siddiqui for the Wall Street Journal,

sitting in for Alex Ossala. This is the PM edition of What's News, the top headlines and business stories that move the world today. The Bureau of Labor Statistics said today that inflation fell to 2.7% in November, lower than economists expected. It was also down from 3% in September,

and there was no October report because of the government shutdown. Economists have warned that the shutdown caused issues with data collection for the November report that may have distorted those numbers. Chow Dang, a Wall Street Journal reporter, covering the U.S. economy, joins us now to discuss. Chow, you write that economists feel the inflation rate might be understated in this report. Why is that? Well, there was a government shutdown that lasted to mid-November that prevented the labor

department from collecting some of the data that they normally would have to compile the report. So even going into today's release, economists were warning that some of the technical workarounds the agency had to use meant that the November figure might be biased a bit downwards. Because the Labor Bureau wasn't able to collect data in October, economists think that they made this assumption that housing cost didn't move much that month. And because the housing component composes a big part of the headline inflation, that workaround could have put downward pressure on the headline inflation reading. And then because the government shut down lasted through November 12th, at that point, when the labor statistics officials came back to survey data,

it was right around Black Friday and Thanksgiving where you traditionally see a lot of holiday discounting. And so again, some of the numbers collected could have been distorted by that. And what's the thinking around how this affects the Fed's approach to interest rates? The Federal Reserve will have December inflation numbers before it meets next time to talk about interest rates. So in some ways, it's going to be waiting for that. Even before this report came out Fed chairman Jerome Powell was warning that there could be potential distortions and really playing down the data. That was the Wall Street Journal's Chao Ding.

Stock markets turned higher after the inflation reading, with the NASDAQ leading the gains and closing up 1.4%. The S&P and Dow both rose by less than 1%. Trump Media and Technology Group will merge with Fusion Energy Company T-A-E Technologies in a merger valued at $6 billion. The merger would split ownership of the combined company roughly down the middle. With this deal, President Trump's media company aims to capitalize on the artificial intelligence booms need for power.

The combined company says he'll start building a fusion power plant next year and hopes to generate its first power in 2013. But fusion energy isn't yet considered to be commercially viable. Trump media is the parent company of the truth social platform where the president posts frequently. Its shares rose 42% today, but for the year, the stock is still down by 56%. For more on how the Trump family's business empire is growing, visit WSJ.com to read a story that maps it all out. We'll leave a link in the show notes. In more MNA news, Hogan Lovels and Cadwallader will merge to form a $3.6 billion firm with over 3,000 lawyers. The combined company would be the fifth largest law firm

by revenue. Partners at both firms will vote next year to finalize the deal. There's been a consolidation trend in the legal industry driven by pressure to compete for market share and talent. And hedge fund Elliott Investment Management is considering taking Barnes & Noble and the UK bookchain waterstones public. That's according to people familiar with the matter. The IPO could come as early as the second half of next year, but Elliott hasn't committed to an offering in 26. Coming up, the president is reclassifying marijuana and what the attack in Sydney says about the threat posed by ISIS. That and more, after the break. More than six years after the collapse of Islamic State's Middle East Caliphate,

the group continues to inspire violence. The most recent example, the attack at a Hanukkah celebration in Sydney last week that killed 15 people. Australian authorities say ISIS influenced Sajid and Navid Akram, a father and son, who they said carried out the terrorist attack. The Wall Street Journal's security correspondent Benoit Falkhoun has the story. Benoit, you report that ISIS continues to recruit and radicalize people online. How is it doing so?

It relies on supporters as echo chambers, starting on servers rented by the supporters of the group. And then from there, they disseminate on social media and a very large number of platforms, very often for a relatively short period of time after a few hours is taken down. And that attract the attention of would-be recruits. And from there, they will find a way to contact ISIS members or more experienced ISIS supervisors, sometimes it's access to tutorials. And from that point on, the tools to carry an attack basically are in the hands of these perpetrators.

There's a lot of content that really detail how to carry such attacks. And all of that would be accessible for basically remote access. You don't need face-to-face contact with anybody. The attackers in Australia were linked to Islamic State. Do authorities consider them ISIS lone wolves? And what are other recent examples of similar style attacks? In this case, we have a flag found in a car belonging to one of the perpetrators in Australia. That was an Islamic State flag.

In Manchester a few months ago, similar attack, this time on a synagogue. Again, it was proved that it was an Islamic State-inspired attack because the perpetrator called the emergency services and claimed the attack as an Islamic State attack. Another example in the U.S. on New Orleans on U.S. Day, the perpetrator posting a video just before the attack and basically saying it was doing it on behalf of the Islamic State. None of these people had ever traveled that we know

to Pacific Islamic State's camps. We don't have that final conclusion for the Sydney perpetrators. We know they went to the Philippines. But as far as we know, in all these cases, there was never any evidence of a direct, you know, physical connection to the group. And how does that differ from how the group used to operate? So if we think about the Paris attacks

that killed 130 people in 2015, these perpetrators had been sort of in Syria, fought with ISIS and prepared, you know, the attacks in ISIS control territory before coming back to France. So we had a clear template of really Islamic State members perpetrating the attack with the consent, of course, of the group. Here's very different. We don't know about any operational connection, let her know physical connection of going to territories, you know, controlled by the group. Has there been any response from ISIS to the Sydney attack? So today, Al-Nabah, which is one of the main outlets of the group, went public and they were expressing pride about the attack.

But at the same time, they didn't claim the attack. So the idea here from the statement was that it's inspired by ISIS, but that they were not ISIS members. That was the Wall Street Journal's Benoit Focon. Benoit, thank you. Yeah, thank you. In Washington, President Trump signed an executive order today directing the federal government to reclassify cannabis. The move puts marijuana into a less restrictive category of drugs called Schedule 3, the same classification as drugs you can get with a prescription at a pharmacy like ketamine and testosterone.

It's a major shift in U.S. drug policy, and even though the president isn't legalizing marijuana federally, the legal cannabis industry is still getting a boost. Senior administration officials say they're aiming. to expand medical research opportunities. The change is also expected to lift tax burdens on cannabis companies. And lastly, the White House said today that the Kennedy Center will be renamed the Trump Kennedy Center after a vote by the Performing Arts Center's board. President Trump appointed many of the board's members. In 1964, Congress passed a law naming the Washington, D.C. institution, the John F. Kennedy Center for the Performing Arts. And it's not immediately clear if the board actually has

the legal authority to change the venue's name. But a person who attended the meeting where the vote was held says that the new name could appear on the building as early as this week. And that's what's news for this Thursday afternoon. Today's show was produced by Anthony Bansy with supervising producer Tali Arbell. I'm Sabrina Siddiqui for the Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.

Thank you.