The Tyson Plant That Shaped This Nebraska Town Is Closing. What Comes Next?

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Alex Ossola (0:18)

Consumer spending helped the US economy grow in the third quarter by its fastest rate in two years. Plus, what happens to a community when its main employer closes up shop? Take Lexington, Nebraska, population 11,000.

Patrick Thomas (0:32)

It's hard to understate how important that plant has been. It's a massive economic engine. It's the cornerstone of that town. It's the largest employer. Like, when you think of Lexington, it is a meatpacking town.

Alex Ossola (0:46)

And what's driving the rise of the eight-year auto loan? It's Tuesday, December 23rd. I'm Alex Ossola 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. In a good sign for the US economy, GDP grew at a 4.3% annual rate from July through September. That's the strongest growth in two years, and it beat economists' expectations. The Commerce Department released its report today after delays from the government shutdown. For more on what drove that growth, I'm joined now by Chao Deng, who covers the US economy for the Journal. Chao, break this down for us. What's behind this growth?

Chao Deng (1:26)

It was clear that consumer spending was very strong. Economists think that that's due to high-income consumers carrying a lot of that spending. And then the trade component played a role, too, as it did in the second quarter. Imports continued to contract, which bumped up the headline growth figure. And then lastly, investment in AI continued to help economic growth, although the pace of that investment slowed down a bit.

Alex Ossola (1:53)

You said that this growth was really driven by consumer spending. What are the kinds of things consumers are spending on?

Chao Deng (2:00)

The report showed that consumers were spending on things like healthcare, which includes outpatient services and nursing homes. The Commerce Department also flagged that there was an uptick in spending on recreational goods and vehicles and that this is a sweeping category that includes spending on personal computers and software. The other thing to flag is that spending in services was especially strong. That grew 3.7% accelerating from 2.6% in the prior quarter. And that's another indication, economists think, that a lot of the spending is coming from higher income households. There were some signs of weakness. Business spending on stuff like commercial buildings and factories contracted. Investment in housing was down for a second quarter in a row. Consumer spending on durable goods, which is stuff like washing machines and dishwashers, that was still up, but the pace slowed from the prior quarter. And that was another indication, economists said, that perhaps lower income households aren't replacing their stock or spending as much.

Alex Ossola (3:09)

That was WSJ reporter Chao Deng. Thank you, Chao.

Chao Deng (3:12)

Thanks.

Alex Ossola (3:13)

Even though consumer spending has helped drive the economy's growth, many consumers aren't feeling great about the jobs market and business conditions. The Conference Board, a research group, said today that its consumer confidence index fell to 89.1 in December, declining for its fifth straight month. Another sign of potential weakness, this holiday season, more shoppers are buying gifts from thrift stores and secondhand sites, like Thread Up and Savers Value Village. The companies usually see sales slow during the holidays, but this year there's more interest from shoppers. Secondhand stores have also been fixing up their shops and trying to reduce the stigma of giving used gifts.

In news on the Trump administration, we're exclusively reporting that the US moved a large number of special operations aircraft, troops and equipment into the Caribbean this week. That's according to US officials and open source flight tracking data. The move gives the US more options for possible military action in Venezuela as the Trump administration increases the pressure on the country's leader, Nicolas Maduro. The White House and Defense Department didn't return requests for comment. The US. Supreme Court has blocked President Trump from sending the National Guard to the Chicago area. The decision, issued in a brief order today, is preliminary and applies only to Illinois. But it's a rare loss for the president on an issue of executive power and suggests that the court is unwilling to rubber-stamp Trump's assertions of broad authority to use the National Guard to manage protests and violent crime. And the Justice Department has released a second batch of files related to the late Jeffrey Epstein. The 30,000 pages posted on the department's website today included court records and emails tied to the cases against Epstein, as well as documents that reference President Trump. The Justice Department said on social media that some of the documents contained, quote, untrue and sensationalist claims made against the president. Coming up, what's in store for a Nebraska town after its economic engine sputters out, and how to be a little less miserable when flying economy. That's after the break.