US manufacturing contraction deepens in June

Washington — U.S. manufacturing activity edged lower in June, deepening a recent slump on continued weak demand, according to industry survey data published Monday.

The Institute for Supply Management’s (ISM) manufacturing index came in at 48.5% last month, down 0.2 percentage points from May.

The June data came in below market expectations of 49.1%, according to Briefing.com, and marked the third consecutive month where the reading was below the 50-point mark separating expansion from contraction.

“U.S. manufacturing activity continued in contraction at the close of the second quarter,” ISM survey chief Timothy Fiore said in a statement.

“Demand remains subdued, as companies demonstrate an unwillingness to invest in capital and inventory due to current monetary policy and other conditions,” he continued, referring to the U.S. Federal Reserve’s ongoing battle against rising prices.

Inflation has fallen sharply since the Fed began hiking interest rates in 2022, but remains stuck above its long-term target of 2% — keeping borrowing costs high for both consumers and producers.

“Production execution was down compared to the previous month, likely causing revenue declines, putting pressure on profitability,” Fiore said.

June’s data extends the recent slump, which began after a positive reading in March briefly snapped 16 straight months of contraction.

The ISM survey found that eight manufacturing industries reported growth in June, including petroleum and coal products, and chemical products, while nine contracted, including textile mills, transportation equipment, and electrical equipment.

“Manufacturing activity remained in contraction territory in June, but in a sign of moderating inflation pressure, the prices paid component fell 4.9 points,” Wells Fargo economists wrote in a note to clients.

“New orders rose more than any other component but remains in contraction,” they added.

 

Street medicine teams search for homeless people to deliver lifesaving IV hydration in extreme heat

Phoenix — Alfred Handley leaned back in his wheelchair alongside a major Phoenix freeway as a street medicine team helped him get rehydrated with an intravenous saline solution dripping from a bag hanging on a pole.

Cars whooshed by under the blazing 96-degree morning sun as the 59-year-old homeless man with a nearly toothless smile got the help he needed through a new program run by the nonprofit Circle the City.  

“It’s a lot better than going to the hospital,” Handley said of the team that provides health care to homeless people. He’s been treated poorly at traditional clinics and hospitals, he said, more than six years after being struck by a car while he sat on a wall, leaving him in a wheelchair.

Circle the City introduced its IV rehydration program as a way to protect homeless people from life-threatening heat illness as temperatures regularly hit the triple-digits in America’s hottest metro. Homeless people accounted for nearly half of the record 645 heat-related deaths last year in Maricopa County, which encompasses metro Phoenix.

Dr. Liz Frye, vice chair of the Street Medicine Institute that provides training to hundreds of health care teams worldwide, said she didn’t know of groups other than Circle the City administering IVs on the street.

“But if that’s what needs to happen to keep somebody from dying, I’m all about it,” Frye said.

As summers grow warmer, health providers from San Diego to New York are being challenged to better protect homeless patients.

Even the Boston Health Care for the Homeless Program, featured in last year’s book, “Rough Sleepers,” now sees patients with mild heat exhaustion in the summer after decades of treating people with frostbite and hypothermia during the winter, said Dr. Dave Munson, the street team’s medical director.

“It’s certainly something to worry about,” said Munson, noting that temperatures in Boston hit 100 degrees with 70% humidity during June’s heat wave. Homeless people, he said, are vulnerable to very hot and very cold weather not only because they live outside, but they often can’t regulate body temperature due to medication for mental illness or high blood pressure, or because of street substance use.

The Phoenix team searches for patients in homeless encampments in dry riverbeds, sweltering alleys and along the canals that bring water to the Phoenix area. About 15% are dehydrated enough for a saline drip.  

“We go out every day and find them,” said nurse practitioner Perla Puebla. “We do their wound care, medication refills for diabetes, antibiotics, high blood pressure.”

Puebla’s street team ran across Handley and 36-year-old Phoenix native Phillip Enriquez near an overpass in an area frequented by homeless people because it’s near a facility offering free meals. Across the road was an encampment of tents and lean-tos along a chain-link fence.  

Enriquez sat on a patch of dirt as Puebla started a drip for him. She also gave him a prescription for antibiotics and a referral to a dentist for his dental infection.

Living outside in Arizona’s broiling sun is hard, especially for people who may be mentally ill or use sedating drugs like fentanyl that make them less aware of surroundings. Stimulants like methamphetamine contribute to dehydration, which can be fatal.

Temperatures this year have reached 115 degrees (45 Celsius) in metro Phoenix, where six heat-related deaths have been confirmed through June 22. Another 111 are under investigation.

“The number of patients with heat illnesses is increasing every year,” said Dr. Aneesh Narang, assistant medical director of emergency medicine at Banner Medical Center-Phoenix, which treats many homeless people with heat stroke.

Narang’s staff works frequently with Circle the City, whose core mission is providing respite care, with 100 beds for homeless people not well enough to return to the streets after a hospital stay.

Extreme heat worldwide requires a dramatic response, said physician assistant Lindsay Fox, who cares for homeless people in Albuquerque, New Mexico, through an initiative run by the University of New Mexico’s School of Medicine.

Three times weekly, Fox treats infections, cleans wounds and manages chronic conditions in consultation with hospital colleagues. She said the prospect of more heat illness worries her.

Highs in Albuquerque can hit the 90s and don’t fall enough for people living outside to cool off overnight, she said.

“If you’re in an urban area that’s primarily concrete, you’re retaining heat,” she said. “We’re seeing heat exposure that very quickly could go to heat stroke.”

Serious heat stroke is far more common in metro Phoenix, where Circle the City is now among scores of health programs for the homeless in cities like New York, San Diego and Spokane, Washington.

Circle the City, founded in 2012 by Sister Adele O’Sullivan, a physician and member of the Sisters of St. Joseph Carondelet, now has 260 employees, including 15 doctors, 13 physician assistants and 11 nurse practitioners. It annually sees 9,000 patients.

Grants, donations and other gifts account for about 20% of the funding. Most of the rest comes from insurance payments for services provided through Medicaid and Medicare.

Circle the City works with medical staff in seven Phoenix hospitals to help homeless patients get after-care when they no longer need hospitalization. It also staffs two outpatient clinics for follow-up.  

“This partnership allows us to offer the best outcomes for our patients,” said Craig Orsini, social work manager at St. Joseph’s Hospital and Medical Center in Phoenix.

Often that’s a few weeks in respite care or, for less acute needs, a stay in one of a handful of medical beds at the downtown shelter for things like dressing changes for wounds. Someone who needs months to heal might go to a skilled nursing facility.

While patients recover, Circle the City works to find longer-term transitional shelter such as those for people 55 and older, or in permanent housing. About 77% of respite patients are sent somewhere other than the street or an emergency shelter.

“We try to find the best fit for people,” said Wendy Adams, Circle the City’s community outreach supervisor.

Circle the City medical staff distributes tens of thousands of water bottles each summer and tries to educate people about hot weather dangers, said Dr. Matt Essary, who works at one of five mobile clinics that stop outside soup kitchens and other services for homeless people. 

Essary said Circle the City is also considering a blood analysis tool to detect electrolyte imbalances caused by dehydration.

“You can see right away how dehydrated they have become because it’s so hard to draw their blood,” he said. Other possible symptoms include headache, extreme thirst, dizziness and dry mouth.

“We also see a lot of people with surface burns,” Essary said of the wounds common in broiling Phoenix, where a medical emergency or intoxication can cause someone to fall on a sizzling sidewalk.

Rachel Belgrade waited outside Circle the City’s retrofitted truck with her black-and-white puppy, Bo, for Essary to write a prescription for the blood pressure medicine she lost when a man stole her bicycle. She accepted two bottles of water to cool off as the morning heat rose. 

“They make all of this easier,” said Belgrade, a Native American from the Gila River tribe. “They don’t give you a hard time.” 

Economic turmoil in Bolivia fuels distrust in government and its claim of a ‘failed coup’

LA PAZ — Signs reading “I’m buying dollars” line the doors of Víctor Vargas’ shoe shop in the heart of Bolivia’s biggest city, a desperate attempt to keep his family business alive.

Just a few years ago, the 45-year-old Vargas would unlock the doors at 8 a.m. to a crush of customers already waiting to buy tennis shoes imported from China. Now, his shop sits hopelessly empty.

“Right now, we’re in a dreadful crisis,” he said. “No one buys anything anymore. … We don’t know what’s going to happen.”

Bolivians like Vargas have been hit hard by economic turmoil in the small South American nation fueled by a longtime hyper-dependence on, and now shortage of, U.S. dollars.

The economic downturn has been exacerbated by an ongoing feud between President Luis Arce and his ally-turned-rival former President Evo Morales in the lead-up to next year’s presidential election. Many Bolivians impacted by the crisis have lost trust in Arce, who denies the country is even in an economic crisis.

“Bolivia has an economy that’s growing. An economy in crisis doesn’t grow,” Arce told The Associated Press in an interview. That was contradicted by both economists and dozens of Bolivians.

That deep distrust came to a head on Wednesday following a spectacle which the government called a “failed coup d’etat” and opponents including Morales called a staged “self-coup” meant to earn the unpopular leader political points before elections.

Whether the coup attempt was real or not, most Bolivians who spoke to the AP said they no longer believe what their leader says, and say Arce would be better served addressing Bolivia’s gasping economy and less time carrying out political stunts.

“He should think about Bolivia’s economy, make a plan to move forward, find a way to get dollars and work to move Bolivia forward,” Vargas said. “No more of these childish ‘self-coups.’”

That simmering anger has paved the way for even more strife in a country that is no stranger to political unrest.

Bolivia’s economic crisis is rooted in a complex combination of dependence on the dollar, draining international reserves, mounting debt and failures to produce products like gas, once the Andean nation’s economic boon.

This has meant that Bolivia has largely become an import economy “totally dependent on dollars,” said Gonzalo Chávez, an economist with Bolivia’s Catholic University. That once worked in Bolivia’s favor, driving the country’s “economic miracle” as it became one of the region’s fastest growing economies.

Vargas’ family opened the shoe business nearly 30 years ago because they saw it as a surefire way to ensure stability for coming generations. The family imports shoes from China, which they pay for in dollars and sell them in Bolivia’s currency, bolivianos. Without dollars, they have no business.

The shortage of dollars has led to the emergence of a black market, with many sellers bringing in greenbacks from neighboring Peru and Chile and selling them at a gouged price.

Pascuala Quispe, 46, spent her Saturday walking around La Paz’s downtown going to different currency exchange shops, desperately searching for dollars to buy car parts. While the official exchange rate is 6.97 bolivianos to the dollar, she was told the real price was 9.30 bolivianos, far too high a price for her. So she kept walking, hoping to find luck elsewhere.

Gouged prices have trickled down to everything. People have stopped buying shoes, meat and clothing, and that has pushed working class people deeper into poverty. Bolivians make jokes about having “mattress banks,” storing cash at home because they don’t trust banks.

“There are no jobs. … and the money we earn isn’t enough for anything,” Quispe said. “Everyone suffers.”

Some vendors like Vargas paste signs on their business doors, hopeful sellers will trade dollars at a more reasonable price.

It’s a complicated economic bind that has few short-term solutions, said Chávez, the economist.

But Arce insists that Bolivia’s economy is “one of the most stable” and says he’s taking action to address problems ailing Bolivians, including shortages of dollars and gasoline. He said the government is also industrializing, investing in new economies like tourism and lithium.

While Bolivia sits on the world’s biggest stores of lithium, a high-value metal key to transitioning to a green economy, investment is only viable in the long term, largely due to government failures, said Chávez. Meanwhile, inflation has outpaced economic growth, and most Bolivians face unstable work conditions with minuscule pay.

That is only compounded by ongoing fights between Arce and Morales, who returned from exile after resigning during unrest in 2019, which Morales maintains was a coup against him. Now the former allies have slung insults and fought over who will represent their Movement for Socialism party, known by its Spanish acronym MAS, ahead of 2025 elections.

“Arce and Evo Morales, they fight over who is more powerful,” Vargas said. “But neither govern for Bolivia. … There’s a lot of uncertainty.”

Broad discontent has fueled waves of protests and strikes in recent months. Protests and road blocks have dealt another economic blow to Vargas, the shoe vendor, because customers from all over the country no longer travel to buy products because of the chaos of ubiquitous protests.

Morales, who still wields a great deal of power in Bolivia, blocked Arce’s government from passing measures in Congress to ease the economic turmoil, which Arce told the AP was a “political attack.”

Morales has fueled speculation that the military assault on the government palace last week allegedly led by former military commander José Zúñiga was a political stunt organized by Arce to gain sympathy from Bolivians. The claim was first made by Zúñiga himself upon his arrest.

“He tricked and lied to, not just the Bolivian people, but the entire world,” Morales said in a Sunday radio program.

The political spats left many like 35-year-old Edwin Cruz, a truck driver, shaking their heads as they wait for hours, sometimes days, in long lines for diesel and gasoline because of intermittent shortages caused by lack of foreign currency.

“Diesel is like gold now,” he said. “People aren’t idiots. And with this whole thing with the ‘self-coup’ this government has to go.”

Cruz is among those who don’t want to vote for either Morales or Arce. While Bolivians have few other options, Chávez said discontent opened a “small window” for an outsider to gain traction, just as it has with a number of Latin American outsiders in recent years.

Most recently, self-described “anarcho-capitalist” Javier Milei has taken the helm of neighboring Argentina with promises to lift the country out of its economic spiral, which shares a number of similarities with Bolivia’s.

Meanwhile, Vargas doesn’t know what he’ll do with his family’s shoe store. Once a point of pride, the shop has turned into a financial drain. He would pass it down to one of his four children, but all of them want to leave Bolivia. One of his children has already migrated to China.

“They don’t want to live here anymore,” Vargas said in his empty store. “Here in Bolivia, there’s no future.”

Meta risks fines over ‘pay for privacy’ model breaking EU rules

Brussels, Belgium — The EU accused Facebook owner Meta on Monday of breaching the bloc’s digital rules, paving the way for potential fines worth billions of euros.

The charges against the US tech titan follow a finding last week against Apple that marked the first time Brussels had levelled formal accusations under the EU’s Digital Markets Act (DMA).

The latest case focuses on Meta’s new ad-free subscription model for Facebook and Instagram, which has sparked multiple complaints over privacy concerns.

Meta’s “pay or consent” system means users have to pay to avoid data collection, or agree to share their data with Facebook and Instagram to keep using the platforms for free.

The European Commission said it informed Meta of its “preliminary view” that the model the company launched last year “fails to comply” with the DMA.

“This binary choice forces users to consent to the combination of their personal data and fails to provide them a less personalized but equivalent version of Meta’s social networks,” the EU’s powerful antitrust regulator said in a statement.

The findings come after the commission kickstarted a probe into Meta in March under the DMA, which forces the world’s biggest tech companies to comply with EU rules designed to give European users more choice online.

Meta insisted its model “complies with the DMA.”

“We look forward to further constructive dialogue with the European Commission to bring this investigation to a close,” a Meta spokesperson said.

Meta can now reply to the findings and avoid a fine if it changes the model to address the EU’s concerns.

If the commission’s view is confirmed however, it can slap fines of up to 10 percent of Meta’s total global turnover under the DMA. This can rise to up to 20 percent for repeat offenders.

Meta’s total revenue last year stood at around $135 billion (125 billion euros).  

The EU also has the right to break up firms, but only as a last resort. 

In EU’s crosshairs

Under the DMA, the EU labels Meta and other companies, including Apple, as “gatekeepers” and prevents them forcing users in the bloc to consent to have access to a service or certain functionalities.

The commission said Meta’s model did not allow users to “freely consent” to their data being shared between Facebook and Instagram with Meta’s ads services.

“The DMA is there to give back to the users the power to decide how their data is used and ensure innovative companies can compete on equal footing with tech giants on data access,” the EU’s top tech enforcer, commissioner Thierry Breton, said.

The commission will adopt a decision on whether Meta’s model is DMA compliant or not by late March 2025.

The EU has shown it is serious about making big online companies change their ways.

The commission told Apple last week its App Store rules were hindering developers from freely pointing consumers to alternative channels for offers.

The EU is also probing Google over similar concerns on its Google Play marketplace.

Apple and Meta are not the only companies coming under the scope of the DMA. Google parent Alphabet, Amazon, Microsoft and TikTok owner ByteDance must also comply.

Online travel giant Booking.com will need to adhere to the rules later this year.

Privacy complaints

Meta has made billions from harvesting users’ data to serve up highly targeted ads. But it has faced an avalanche of complaints over its data processing in recent years.

The European data regulator in April has also said the ‘pay or consent’ model is at odds with the bloc’s General Data Protection Regulation (GDPR), which upholds the privacy of users’ information.

Ireland — a major hub for online tech giants operating in the 27-nation bloc — has slapped Meta with massive fines for violating the GDPR.

The latest complaint by privacy groups forced Meta last month to pause its plans to use personal data to train its artificial intelligence technology in Europe.