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<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107355659-1704744261664-gettyimages-1917749607-c85i5859_jdwm3op4-820x461.jpeg" alt="" class="wp-image-456438" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107355659-1704744261664-gettyimages-1917749607-c85i5859_jdwm3op4-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107355659-1704744261664-gettyimages-1917749607-c85i5859_jdwm3op4-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107355659-1704744261664-gettyimages-1917749607-c85i5859_jdwm3op4-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107355659-1704744261664-gettyimages-1917749607-c85i5859_jdwm3op4-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107355659-1704744261664-gettyimages-1917749607-c85i5859_jdwm3op4-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107355659-1704744261664-gettyimages-1917749607-c85i5859_jdwm3op4.jpeg 1600w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">New York City Mayor Eric Adams holds a press availability at a news conference on January 08, 2024 in New York City. Spencer Platt | Getty Images</figcaption></figure>



New York City Mayor Eric Adams said Wednesday that his administration has filed a lawsuit against the parent companies of TikTok, Instagram, Facebook, Snapchat and YouTube, alleging that their services are damaging to the mental health of young adults and children in the largest U.S. city.



The city of New York along with plaintiffs including the school district and health organizations filed the lawsuit in the Los Angeles county branch of the California Superior Court because of the companies’ ties to the area, attorneys wrote in the filing.



The suit alleges that Meta, Snap, ByteDance and Google (whose parent company is Alphabet) knowingly “designed, developed, produced, operated, promoted, distributed, and marketed their platforms to attract, capture, and addict youth, with minimal parental oversight.”



The plaintiffs allege that the tech companies violated several city laws related to public nuisance and gross negligence through the design and marketing of their addictive products. They claim that New York’s school districts and various health and social services have been severely impacted by children who have suffered negative mental health consequences stemming from their use of popular social media apps.



“Over the past decade, we have seen just how addictive and overwhelming the online world can be, exposing our children to a non-stop stream of harmful content and fueling our national youth mental health crisis,” Adams said in a statement. “Today, we’re taking bold action on behalf of millions of New Yorkers to hold these companies accountable for their role in this crisis, and we’re building on our work to address this public health hazard. This lawsuit and action plan are part of a larger reckoning that will shape the lives of our young people, our city, and our society for years to come.”



A TikTok spokesperson said in an statement that the company has “industry-leading safeguards” for teens, including parental controls and features for age restrictions.



“We regularly partner with experts to understand emerging best practices, and will continue to work to keep our community safe by tackling industry-wide challenges,” the spokesperson said.



A Google representative said the allegations are “simply not true.”



“Providing young people with a safer, healthier experience online has always been core to our work,” Google said. “In collaboration with youth, mental health and parenting experts, we’ve built services and policies to give young people age-appropriate experiences, and parents robust controls.”



Meta said it’s “spent a decade working on these issues” and wants “teens to have safe, age-appropriate experiences online, and we have over 30 tools and features to support them and their parents.”



A Snap spokesperson said that “Snapchat was intentionally designed to be different from traditional social media,” focusing on facilitating conversations with close friends.



“Snapchat opens directly to a camera – rather than a feed of content that encourages passive scrolling – and has no traditional public likes or comments,” the Snap spokesperson said. “While we will always have more work to do, we feel good about the role Snapchat plays in helping close friends feel connected, happy and prepared as they face the many challenges of adolescence.”



New York’s lawsuit echoes similar allegations made against Meta, Snap, TikTok and Alphabet in litigation filed in 2022 in the Northern District of California. Multiple school districts and individuals claim the companies’ products “are defective because they are designed to maximize screen time” and that they have resulted in various emotional and physical harms, including death.”



Social media companies have come under fire from lawmakers who are pushing multiple bills like the Kids Online Safety Act, or KOSA, as part of a broader appeal for regulation. Meta CEO Mark Zuckerberg, TikTok CEO Shou Zi Chew and Snap CEO Evan Spiegel attended a Senate Judiciary hearing in late January and faced tough questions from a bipartisan group of lawmakers about their alleged negligence in protecting kids.



Meanwhile, a coalition of over 40 attorneys general filed a joint federal lawsuit against Meta alleging that its products are addictive and harm mental health.

107355659-1704744261664-gettyimages-1917749607-c85i5859_jdwm3op4

TikTok, Facebook and YouTube sued by New York City for alleged harm to kids’ mental health

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107350975-1703235128856-gettyimages-1245866118-70395549-820x547.jpeg" alt="" class="wp-image-456371" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107350975-1703235128856-gettyimages-1245866118-70395549-820x547.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107350975-1703235128856-gettyimages-1245866118-70395549-300x200.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107350975-1703235128856-gettyimages-1245866118-70395549-135x90.jpeg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107350975-1703235128856-gettyimages-1245866118-70395549-768x512.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107350975-1703235128856-gettyimages-1245866118-70395549-1536x1024.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107350975-1703235128856-gettyimages-1245866118-70395549-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">People shopping on Oxford Street in London. Picture date: Thursday December 29, 2022. (Photo by James Manning/PA Images via Getty Images) James Manning &#8211; Pa Images | Pa Images | Getty Images</figcaption></figure>



LONDON — The U.K. economy slipped into a technical recession in the final quarter of last year, initial figures showed Thursday.



The Office for National Statistics said U.K. gross domestic product shrank by 0.3% in the final three months of the year, notching the second consecutive quarterly decline.



Though there is no official definition of a recession, two straight quarters of negative growth is widely considered a technical recession.



Economists polled by Reuters had produced a consensus forecast of -0.1% for the October to December period.



All three main sectors of the economy contracted in the fourth quarter, with the ONS noting declines of 0.2% in services, 1% in production and 1.3% in construction output.



Across the whole of 2023, the British GDP is estimated to have increased by just 0.1%, compared to 2022. For the month of December, output shrank by 0.1%.



U.K. Finance Minister Jeremy Hunt said that high inflation remains “the single biggest barrier to growth,” since it is forcing the Bank of England to keep interest rates firm and stymie economic growth.



“But there are signs the British economy is turning a corner; forecasters agree that growth will strengthen over the next few years, wages are rising faster than prices, mortgage rates are down and unemployment remains low,” he added.



Inflation has come down markedly in the U.K., but remains well above that of the country’s economic peers and the Bank of England’s 2% target, squeezing household finances. The headline consumer price index reading came in at 4% year-on-year in January.



<h3 class="wp-block-heading" id="h-shallow-and-short-lived-recession">‘Shallow and short-lived’ recession</h3>



Marcus Brookes, chief investment officer at Quilter Investors, said that the figures most likely indicate that the recession will be a “potentially shallow and short-lived one that may not reflect the true state of the economy,” which is set to experience a “muted recovery” throughout 2024.



“U.K. GDP contracting in both December and the fourth quarter of 2023 is mainly due to persistently high inflation, structural weaknesses in the labour market and low productivity growth, but also adverse weather conditions,” Brookes said via email.



“These factors affected the performance of the services and construction sectors, which are the main drivers of the U.K. economy.”



He noted that some of these hindrances are temporary and have already started to ease, with the inflation print of January undershooting forecasts for a reacceleration.



“Over the coming months, we expect inflation to fall, potentially easing the pressure on U.K. households, and supporting the recovery of the consumer-driven economy,” Brookes added.



“The key indicator to watch is inflation in the services sector, which accounts for the bulk of the UK’s economic activity and employment and reflects the strength of wage growth and consumer demand, which are crucial for the U.K.’s recovery.”



Neil Birrell, chief investment officer at Premier Miton Investors, said Thursday’s figure and the softer-than-expected inflation data “may give rise to some concern over economic strength in the coming year.”



“Most sectors of the economy were weak, but the optimists will point to the fact that there is plenty of scope to cut interest rates should the current trend in inflation and growth accelerate.”

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<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107372713-1707821086281-gettyimages-1968040821-20240131-dsc_3484-820x547.jpeg" alt="" class="wp-image-456040" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107372713-1707821086281-gettyimages-1968040821-20240131-dsc_3484-820x547.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107372713-1707821086281-gettyimages-1968040821-20240131-dsc_3484-300x200.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107372713-1707821086281-gettyimages-1968040821-20240131-dsc_3484-135x90.jpeg 135w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107372713-1707821086281-gettyimages-1968040821-20240131-dsc_3484-768x512.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107372713-1707821086281-gettyimages-1968040821-20240131-dsc_3484-1536x1024.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107372713-1707821086281-gettyimages-1968040821-20240131-dsc_3484-scaled.jpeg 2048w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Pro-EU demonstrators protest outside Parliament against Brexit on the fourth anniversary of Britain’s official departure from the European Union in London, United Kingdom on January 31, 2024. Future Publishing | Getty Images</figcaption></figure>



LONDON — Post-Brexit Britain has “significantly underperformed” other advanced economies since the 2016 EU referendum, according to new analysis from Goldman Sachs, which aims to quantify the economic cost of the Leave vote.



In a note last week entitled “The Structural and Cyclical Costs of Brexit,” the Wall Street bank estimates that the U.K. economy grew 5% less over the past eight years than other comparable countries.



The true hit to the British economy could be anywhere from 4% to 8% of real gross domestic product (GDP), however, the bank said, acknowledging the difficulties of extracting the impact of Brexit from other simultaneous economic events including the Covid-19 pandemic and the 2022 energy crisis. Real GDP is a growth metric that has been adjusted for inflation.



Goldman Sachs attributed the economic shortfall to three key factors: reduced trade; weaker business investment; and labor shortages as a result of lower immigration from the EU.



The U.K. voted 52% to 48% to leave the EU on June 23, 2016, but officially exited the union on Jan. 31, 2020.



Over that period until today, U.K. goods trade has underperformed other advanced economies by around 15% since the Leave vote, according to the bank’s estimates, while business investment has fallen “notably short” of pre-referendum levels.



Meantime, immigration from the EU has fallen — a key pledge of the Vote Leave campaign — only to be replaced by a less economically active cohort of non-EU migrants, primarily students, the research said.



“Taken together, the evidence points to a significant long-run output cost of Brexit,” the report’s authors said.



The bank noted the reduction in trade was in line with expectations and the underperformance in investment was “more pronounced” that anticipated. However, it said the shifts in immigration patterns posed the most important cyclical repercussions for the U.K. economy — and inflation in particular.



“The post-Brexit change in immigration flows has reduced the elasticity of labor supply in the U.K., contributing to the post-pandemic surge in inflation and pointing to more cyclical labor market and inflation pressures going forward,” the report said.



U.K. real GDP per capita has barely risen above pre-Covid levels and currently stands 4% above the mid-2016 level, it said. That compares to 8% for the euro zone area and 15% for the U.S.



Meantime, the U.K. has recorded higher inflation over the period, with U.K. consumer prices rising 31% since mid-2016 compared with 27% in the U.S. and 24% in the euro zone, it added.



While the report noted that new non-EU trade agreements could potentially mitigate the costs of Brexit, estimates suggest that the benefit is likely to be small.



The British government estimates that its free trade agreement with Australia will boost U.K. GDP by 0.08% per year, while the economic impact of a new trade deal with Switzerland is unclear.



Meantime, the timelines for prospective new trade deals with major partners such as the U.S. and India have not yet been announced.

107372713-1707821086281-gettyimages-1968040821-20240131-dsc_3484

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<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="461" src="https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107365401-1706390936186-gettyimages-1958536825-AFP_34H26WJ-820x461.jpeg" alt="" class="wp-image-455790" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107365401-1706390936186-gettyimages-1958536825-AFP_34H26WJ-820x461.jpeg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107365401-1706390936186-gettyimages-1958536825-AFP_34H26WJ-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107365401-1706390936186-gettyimages-1958536825-AFP_34H26WJ-160x90.jpeg 160w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107365401-1706390936186-gettyimages-1958536825-AFP_34H26WJ-768x432.jpeg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107365401-1706390936186-gettyimages-1958536825-AFP_34H26WJ-1536x864.jpeg 1536w, https://cms.cnbcafrica.com/wp-content/uploads/2024/02/107365401-1706390936186-gettyimages-1958536825-AFP_34H26WJ.jpeg 1920w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption class="wp-element-caption">Photo: via CNBC</figcaption></figure>



Inflation rose more than expected in January as stubbornly high shelter prices weighed on consumers, the Labor Department reported Tuesday.



The consumer price index, a broad-based measure of the prices shoppers face for goods and services across the economy, increased 0.3% for the month, the Bureau of Labor Statistics reported. On a 12-month basis, that came out to 3.1%, down from 3.4% in December.



Economists surveyed by Dow Jones had been looking for a monthly increase of 0.2% and an annual gain of 2.9%.



Excluding volatile food and energy prices, so-called core CPI accelerated 0.4% in January and was up 3.9% from a year ago, unchanged from December. The forecast had been for 0.3% and 3.7% respectively.



Shelter prices, which comprise about one-third of the CPI weighting, accounted for much of the increase. The index for that category rose 0.6% on the month, contributing more than two-thirds of the headline increase, the BLS said. On a 12-month basis, shelter increased 6%.



Food prices moved higher as well, up 0.4% on the month. Energy helped offset some of the increase, down 0.9% due largely to a 3.3% slide in gasoline prices.



Stock market futures slid sharply following the release. Futures tied to the Dow Jones Industrial Average were off more than 250 points and Treasury yields surged higher.



Even with the rise in prices, inflation-adjusted earnings increased 0.3% for the month. However, adjusted for the decline in the average workweek, real weekly earnings fell 0.3%. Real average hourly earnings rose 1.4% from a year ago.



“Inflation is generally moving in the right direction,” said Bright MLS Chief Economist Lisa Sturtevant. “But it’s important to remember that a lower inflation rate does not mean that prices of most things are falling — rather, it simply means that prices are rising more slowly. Consumers are still feeling the pinch of higher prices for the things they buy most often.”



The release comes as Federal Reserve officials look to set the proper balance for monetary policy in 2024. Though financial markets have been looking for aggressive interest rate cuts, policymakers have been more cautious in their public statements, focusing on the need to let the data be their guide rather than preset expectations.



Fed officials expect inflation to recede back to their 2% annual target in large part because they think shelter prices will decelerate through the year. January’s increase could be problematic for a central bank looking to take its foot off the brake for monetary policy at its tightest in more than two decades.



“The much-anticipated CPI report is a disappointment for those who expected inflation to edge lower allowing the Fed to begin easing rates sooner rather than later,” said Quincy Krosby, chief global strategist at LPL Financial. “Across the board numbers were hotter than expected making certain that the Fed will need more data before initiating a rate cutting cycle.”



Generally, the inflation data had been encouraging, even if annual rates remain well above the Fed’s 2% target. Moreover, core inflation, which officials believe is a better guide of long-run trends, has been even more stubborn as housing costs have held higher than anticipated.



In recent days, policymakers including Chair Jerome Powell have said the broader strength of the U.S. economy gives the Fed more time to process data is it doesn’t have to worry about high rates crushing growth.



Market pricing prior to the CPI release indicated a tilt towards the first rate cut coming in May, with a likely total of five quarter-percentage point moves lower before the end of 2024, according to CME Group data. However, several Fed officials have said they think two or three cuts are more likely.



Outside of the jump in shelter costs, the rest of the inflation picture was a mixed bag.



Used vehicle prices declined 3.4%, apparel costs fell 0.7% and medical commodities declined 0.6%. Electricity costs rose 1.2% and airline fares increased 1.4%. At the grocery store, ham prices fell 3.1% and eggs jumped 3.4%.



This is breaking news. Please check back here for updates.

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