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Amazon Prime early access sale: Start saving big this October

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(NEW YORK) -- Amazon has announced a second Prime event happening next month, just ahead of the busy holiday season.

The retail giant has introduced Amazon Prime's early access sale which will take place Oct. 11-12, making it the first time there will be two Prime events in one year.

The 48-hour shopping event first took place in July and is back to give Prime members exclusive early access to holiday deals across all categories including electronics, fashion, home, kitchen, pets, toys and Amazon devices.

Amazon Prime's early access sale will include deals on big-name brands including Peloton, New Balance, Philips Sonicare and more.

For the first time, the company is also planning to curate a top 100 selection of some of its best deals including offerings from iRobot, KitchenAid and Samsung. Prime members will have the added benefit of shopping up to 80% off select Fire TV smart TVs, as well as additional savings on Alexa-enabled devices and products from Adidas, LEGO, Ashley Furniture and more.

"We are so excited to help Prime members kick off the holiday season with Amazon's new Prime Early Access Sale -- an exclusive opportunity for members to get deep discounts on top brands we know they are looking for this time of year," Jamil Ghani, vice president of Amazon Prime, said in a statement. "And members can start enjoying exclusive Prime benefits and offers now, plus find gift ideas for the family with our holiday gift guides and this year's Toys We Love list."

News of Amazon's fall Prime shopping event follows other retailers rolling out their own early pre-Black Friday sales shopping events.

Target Deal Days is slated to kick off Oct. 6-8 offering thousands of deals on everything from toys and gifts to everyday essentials.

Additionally, Walmart has shared news that the company will be hosting a sales event similar to Amazon and Target, but further details and dates have not yet been confirmed.

Experts agree that these earlier-than-usual sales may be a result of rising inflation.

"First, by starting earlier, retailers are giving holiday shoppers longer durations of time to stretch those paychecks that are already tight," ABC News technology and consumer correspondent Becky Worley said on Good Morning America.

"Because of inflation, consumers are buying fewer discretionary items like clothing, so expect sales there," she added. "Then, there's the whiplash effect with inventory which was scarce during COVID -- in many cases, now there's too much stock."

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Latinos across industries fight for fair labor practices

Pay Our Interns

(NEW YORK) -- On hot days, some over 100 degrees, workers spend hours harvesting fruits and vegetables for very little money -- produce that ends up on kitchen tables of people across the country.

Tens of thousands of these workers have experienced heat-related injuries and hundreds more have died from heat, all while earning an average of $25,000 to $29,999 per year in one of the most hazardous jobs in the country, the Economic Policy Institute found.

The workers, a majority of whom are Latino and undocumented, are in a constant battle for fair and safe labor practices.

However, the labor rights movement transcends industries, though it may look quite different for others.

And in local and federal government agencies, interns have been at the center of a debate about unpaid labor.

It wasn't until recently that some government offices have begun paying their interns, which has created a new pathway for people from lower-income households to support themselves while gaining entry-level experience in policy and politics.

Pay Our Interns, created and spearheaded by two Latinos, fueled this change through their advocacy on Capitol Hill.

Latinos have been a major force in the labor rights movement for decades, with icons such as Dolores Huerta, Cesar Chavez, and Emma Tenayuca as the leaders of the fight.

Farm workers harness collective organizing power

On Aug. 3, farm workers began a 24-day, 335-mile "March for the Governor's Signature" to urge California Gov. Gavin Newsom to sign a farm a farm workers rights bill.

The bill would make it easier for workers to vote for a union,, without intimidation from supervisors, foreman and labor contractors. Farm workers say that voting, as it is now, discourages participation in union efforts.

"Currently, the only way that they do it is in person, at the premises of the employer, where the supervisors are looking over their shoulders, where they hire security, where, in many cases, immigration has been called and farm workers have been deported," said Teresa Romero, the president of the labor union United Farm Workers.

However, Newsom has expressed concerns about the bill.

"We cannot support an untested mail-in election process that lacks critical provisions to protect the integrity of the election," Newsom spokesperson Erin Mellon told CalMatters.

Farmworkers face challenging workplace conditions, including low pay, unsafe conditions, and very few if any protections against abuse or misconduct.

Romero, who leads the organization, says many undocumented workers pay taxes, but can't collect social security and can't retire. Some are left working long hours for years past the average retiring age.

"They work and feed us all," Romero said.

She continued, "They move from crop to crop, moving their children from city to city to be able to support their family. And if we knew that, all of us would be willing to pay a little more for our food, just so these people have the respect, dignity, and the pay that they deserve."

Without them, she says, we wouldn't have food on our tables.

Romero urges people to be conscious of where they buy their food, how workers are represented and how they're protected. She said the fight for fair working practices shouldn't stop and end with farm workers themselves. She said their labor fight is a collective fight.

"This is not just manual labor," she said. "These are professionals who know exactly what to do when to do with different crops."

Fighting for fair labor conditions in the office

"Our society got too comfortable with unpaid labor," says Carlos Mark Vera, a co-founder of Pay Our Interns.

He and Guillermo Creamer Jr. created the group to put an end to unpaid labor primarily in the public service space. Before 2017, Pay Our Interns found that only 10 percent of congressional interns were paid.

The organization has since worked with Congress to allocate $48 million for lawmakers to pay their interns.

"Since then that fund has actually been growing each year, which is unheard of, you know, usually programs don't increase that quickly," said Vera. "Now that we have Congress invested in this, and they're very supportive of this, we've leveraged that for other ones. So this past year, we secured funding for White House interns, State Department interns for the first time in history."

Unpaid internships push low-income or financially strained students out of the running to gain experience.

Unpaid internships often force students to choose between finding a job that pays their bills or paying for an internship out of their own funds – since Vera says that internship expenses like traveling or supplies often come from the intern's wallet.

This primarily affects Black and brown students, and makes it harder for some students to enter certain fields if only unpaid internships are available.

"How do you grow wealth in this country? A lot of times, it's just entering through professional pathways. But when there's a price to participating in these opportunities … We know that many Black and brown families cannot afford to do that," said Creamer.

They say they were raised in a culture where people had to "pay their dues" through unpaid labor. However, they say the culture is shifting and people are learning that their work should be valued at all levels.

Vera's own sister, a sophomore in college, was interviewing for an internship when she asked if it was paid – and the employer said it wasn't.

She explained that her brother had an organization dedicated to eradicating unpaid labor, and declined the opportunity.

"They call the next day, and they're like, 'Okay, how about $18 an hour?'" Vera said, applauding his sister for advocating for herself.

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The Fed says unemployment will rise. Here's who economists say would lose their jobs first.

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(WASHINGTON) -- The Federal Reserve escalated its fight against inflation this week, instituting a major rate increase and saying more will likely follow. The moves will cause a jump in the number of unemployed Americans by the end of next year, the central bank said.

The Fed has put forward a series of aggressive interest rate hikes in recent months as it tries to slash price increases by slowing the economy and choking off demand. But the approach risks tipping the United States into a recession and causing widespread joblessness.

Fed Chair Jerome Powell on Wednesday acknowledged that rate hikes would cause pain for the U.S. economy, as growth slows and unemployment rises. He added, however, that "a failure to restore price stability would mean far greater pain later on."

The job losses forecasted by the Fed this week would by the end of 2023 raise the unemployment rate from its current level of 3.7% to 4.4%. That outcome would add an estimated 1.2 million unemployed people, according to Omair Sharif, the founder of research firm Inflation Insights.

Those job losses will disproportionately fall on some of the most vulnerable workers, including minorities and less-educated employees, according to economists and studies of past downturns.

Here are the groups of workers who would most likely lose their jobs if unemployment rises:

Black and Hispanic workers

Black workers would be among the first to lose their jobs if unemployment spikes, since they're disproportionately concentrated in industries sensitive to economic downturns. Racial discrimination often influences choices made by companies about which workers to fire, economists said.

"The Fed's actions really do mean some disparate impact for Black workers in the American economy," Michelle Holder, a labor economist at John Jay College of Criminal Justice, told ABC News.

The vulnerability of Black workers in a downturn manifested during the most recent recession, in spring 2020, when the pandemic caused higher unemployment for Black workers at every education level when compared with their white counterparts, a RAND Corporation study found.

Overall, the unemployment rate for Black workers in the early period of the pandemic peaked at 16.8%, while the unemployment rate for white workers reached only 14.1%.

Between the late 1980s and mid-2000s, government employment data shows "considerable evidence" that Black workers are among the first ones fired as the economy weakens, according to an economic study published in 2010 in Demography, an academic journal.

"To be blunt, discrimination still occurs in the American labor market," Holder said.

A similar dynamic of disproportionate job losses impacts Hispanic workers, the economists said.

William Spriggs, the chief economist at the AFL-CIO labor union and a professor of economics at Howard University, said Hispanic workers would suffer acutely in a downturn brought about by interest rate hikes, since they're disproportionately represented in the construction industry.

When the Fed raises rates, it often leads to a spike in mortgage rates, causing prospective homebuyers to put off their purchases and builders to delay further construction. U.S. 30-year fixed-rate mortgages jumped to 6.29% on Thursday, the highest level in 14 years, according to Freddie Mac's mortgage market survey.

As of last year, Hispanic workers made up nearly a third of all construction workers, according to a National Association of Home Builders analysis of government data published in June.

"We've already seen construction work is slowing," Spriggs told ABC News. "Those construction workers get hit first."

Less-educated workers

Another group that would stand among the first to end up jobless amid a downturn is less-educated workers.

Two years ago, during the pandemic-induced recession, less-educated workers suffered far more acute job losses than their better-educated peers, according to a study published in 2021 by the Institute for New Economic Thinking.

In general, when the economy weakens, poorly educated workers endure a more negative effect on employment than their better-educated counterparts, according to a study published by the Minneapolis Federal Reserve in 2010.

In the Great Recession, the employment rate for workers with just a high school diploma fell 5.6%, while the employment rate for workers with a college degree fell less than 1%, the study found.

"Workers who tend to fare better when the economy contracts are better-educated workers," said Holder.

Young workers

Data from the two most recent recessions, in 2020 and 2007, indicates that young workers suffer disproportionately when the economy contracts.

During the pandemic-induced recession, young workers became jobless at a much higher rate than older workers, according to a study released by the left-leaning Economic Policy Institute in 2020.

From spring 2019 to spring 2020, the overall unemployment rate among workers ages 16 to 24 rose from 8.4% to 24.4%, while unemployment for workers ages 25 and older rose from 2.8% to 11.3%, the study found.

A similar outcome followed the Great Recession. Between 2007 and 2010, workers between the ages of 16 and 24 suffered a more dramatic drop in employment than any other age group, according to a Brookings Institution analysis of government data that focused on the ratio of employed workers in a given demographic compared to its representation in the population as a whole.

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Can a clothing company save the planet? Patagonia wants to find out.

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(NEW YORK) -- If there was any doubt about where outdoor clothing company Patagonia stood on environmentalism, it was quickly put to rest last week when founder Yvon Chouinard and his family donated their ownership to efforts that would protect the planet.

"Earth is now our only shareholder," Chouinard wrote on Patagonia's website.

But can the generous donation from a billionaire -- this one valued at more than $3 billion -- and the spoils from his successful retail company move the needle on finding solutions to mitigate global warming?

Experts told ABC News that the unprecedented move itself won't be enough to make significant strides in curbing emissions and the rise in global temperatures. But the domino effect that results from inspiring future philanthropists to make similar donations could reverberate throughout the climate fight, they hypothesized.

The drastic nature of the move is emblematic of the dire consequences that could result if major action is not taken, Hans Cole, head of environmental grants, campaigns and impact for Patagonia, told ABC News.

"It really just acknowledges the increasing urgency around the crisis -- around climate, around biodiversity, and around how those impact people and communities around the world," Cole said.

Here is what experts have to say about the monumental donation:

How the Patagonia donation is different from other billionaire philanthropy

Donations from the wealthiest Americans occur on a regular basis but rarely draw as much attention as the gift made by Chouinard.

The donation differs from most billionaire philanthropy for two key reasons.

First, the donation involves the giving away of Chouinard's company. Chouinard gave up nearly all of his shares in Patagonia and vowed to donate the company's annual profits. However, the maneuver draws on a two-tiered stock system of voting and non-voting shares, allowing Chouinard to retain control of the company.

Under the arrangement, Chouinard donated 98% of his non-voting shares in the company to a nonprofit, the Holdfast Collective. However, 2% of the shares -- which make up all of the company's voting shares -- will be retained in the Patagonia Purpose Trust.

"The Chouinards have total control of Patagonia through the trust, and they're giving everything else away," Daniel Hemel, a law professor at New York University, told ABC News.

The move is "unusual but it's not unique," Hemel added, noting that dual-class share structures are used at companies such as Google and The New York Times. He also cited a similar model of philanthropy undertaken by Facebook CEO Mark Zuckerberg. "Zuckerberg has mostly control of Facebook through the shares he's retained and he's giving some of it away," Hemel said.

Hemel said he lends "credence" to the rationale for continued control of Patagonia offered by Chouinard, who said the maneuver will allow him to protect the company's commitment to environment-friendly values.

The second feature of the donation that distinguishes it centers on the nonprofit formed by Chouinard, which will allow him to pursue political advocacy and donate to political candidates.

Most large-dollar philanthropy made by wealthy people goes to 501(c)(3) organizations, such as the Gates Foundation, Hemel said. Donations to such organizations are tax-deductible, but the groups are forbidden by law from participating in political campaigns or giving to political candidates.

However, the nonprofit created by Chouinard as the recipient of this donation, the Holdfast Collective, is classified as a 501(c)(4), which means the gift forgoes an income tax deduction but the organization can participate in politics. The Collective "can advocate for causes and political candidates in addition to making grants and investments in our planet," Patagonia said on its website.

Philanthropists have made giant donations to the climate fight in the past

The donation from Chouinard, valued at more than $3 billion, joins a flurry of large-dollar philanthropy in recent years focused on the climate. While Chouinard's donation is smaller than that of some of his peers, the Holdfast Collective differs from other climate philanthropy because of its capacity to participate in political campaigns.

In 2020, Amazon Executive Chair Jeff Bezos pledged $10 billion to address climate change with the formation of the Bezos Earth Fund, which does not support political candidates. So far, the organization has granted $1.54 billion to programs that range from restoring mangroves in Columbia and Fiji to empowering grassroots environmental justice groups and providing technology for farmers in India.

Last year, Laurene Powell Jobs, the widow of late Apple founder Steve Jobs, pledged $3.5 billion to fight climate change through the Waverley Street Foundation, an organization formed by Jobs in 2016.

It aims to address the problem by supporting local groups in communities worldwide that are "at work in the trenches of the battle for a livable planet," the organization said last month. As a 501(c)(3), the Waverley Street Foundation is not allowed to participate in political campaigns.

Meanwhile, the ClimateWorks Foundation, which says it has granted over $1.3 billion to more than 600 grantees in over 50 countries, uses environmental expertise to channel donations for projects worldwide. As with the Bezos Earth Fund, the ClimateWorks Foundation supports a wide range of programs, including efforts to remove carbon dioxide from the atmosphere and reverse forest loss.

The ClimateWorks Foundation doesn't participate in political campaigns, either, as it's also a 501(c)(3).

The approach from Chouinard -- a significant departure from most billionaire climate giving -- allows the organization to amplify its impact, Hemel said.

"What the Chouinards realize is that effective action to protect the planet from climate change is going to need to be government action," he said. "Three billion dollars potentially can make a difference in elections."

If they were to spend "a fraction" of the $3 billion on a U.S. Senate race, for example, that ends up changing the Senate majority, "then they could be leveraging that fraction of $3 billion into hundreds of billions in additional climate investment," Hemel added.

Harvey Dale, a professor of philanthropy and law at New York University, echoed the view that the scale of private giving on climate-related issues pales in comparison with public spending.

"I suppose if you took all the money in all the foundations in the country -- many hundreds of billions of dollars -- you would say, 'Wow, how about that,'" Dale told ABC News. "It's a tiny bit compared to the amount [President Joe] Biden recommended in legislation just a year or two ago."

To adequately address climate change, the scale of public investment must far outweigh that of the donor community, Dale said.

"The amount of money in the philanthropic sector is a drop in the bucket compared to how much the government would spend," he added.

The donation follows the company's ethos of sustainability

Patagonia has decades of experience in working to make its carbon footprint as small as possible in addition to tackling aspects of the environmental crisis, Cole said.

The company says it uses materials with lower environmental impacts, has cleaned up parts of its supply chain and encourages practices such as a program that allows customers to sell or trade their used pieces.

"It has been a 50-year journey for us, absolutely throwing everything we can, all the resources possible," Cole said.

In the past few years, Patagonia has increased its environmental commitments, even changing its mission statement to saving the planet, Cole said. Customers who wear the Patagonia brand, often those committed to sports and pastimes that keep them out in nature, tend to agree with the goals.

Even after the transfer of ownership, Patagonia will continue to donate 1% of its sales each year to grassroots environmental nonprofits, according to its website.

The unprecedented donation could inspire more

Experts say that Patagonia could inspire other companies and wealthy philanthropists to join the race to mitigate climate change.

Patagonia hopes that as many businesses and organizations as possible will replicate or take pieces of their plan and adapt it to their unique situation, Cole said.

"We want this to have legs," he said.

Tailoring to the needs of companies of different sizes and operations will also be key, John Forrer, director of the Institute for Corporate Responsibility at George Washington University, said.

"You have your own company interests, you have your own company values, you have what your stakeholders think is a good idea," he told ABC News.

With any company that dedicates funds and a portion of its mission statement to the climate crisis, it will be important that it's not done with the sole intent of "corporate greenwashing" as a cheap PR stunt, tax breaks or profit motives, Rachel Cleetus, policy director and lead economist at the Union of Concerned Scientists' climate and energy program, told ABC News.

Rather, businesses need to really care about issues such as transitioning the economy to clean energy to make a difference -- something the Chouinard family has exemplified, Cleetus said, adding that there are many businesses that claim publicly they are for climate solutions but are actually lobbying for policies that undermine climate progress.

"Patagonia is in a whole different class, they're actually walking the walk. That's what we need more businesses to do," Cleetus said.

The world can't rely on the generosity of billionaires, experts say

Making meaningful gains in the urgent fight against global warming will require much more than donations from a handful of exceptionally rich individuals, the experts said. Especially since just 2% of global giving is allocated toward climate change mitigation, according to a report published in May by the Climate Justice Resilience Fund.

It will take systemic change across many sectors to fix a broken system that causes more harm to the planet, Cleetus said.

"The scale of the immensity and the urgency of the climate crisis is such that it won't be enough to have a few very rich people donate money," Cleetus said.

Cole added that the Chouinard family is aware that Patagonia, even with its lofty mission, can't solve the climate crisis on its own.

"We need, frankly, the entire business community and governments and civil society to work together to get this done," Cole said. "We can't do it alone. Patagonia can't do it alone."

In addition, those in charge of the funds will need to ensure they are allocated to the most appropriate sectors, the experts said.

Frontline communities -- or communities that will be most impacted by climate-related weather events as they intensify in the future -- should be prioritized, as well as impoverished and marginalized communities, Cleetus said, adding that the climate crisis is "inequitable at its core."

"It's often Black and brown and indigenous communities and very low-income communities -- so seeing where the needs are most acute," she said. "Very often, there are also communities that are bearing the brunt of pollution from fossil fuels and have for a long time."

Public policy from governments around the world to assertively address the challenge will be necessary, and philanthropy can help move the needle in that regard by providing assistance to governments when conceptualizing those policies, Jennifer Kitt, president of the Climate Leader Initiative, told ABC News.

This was evident two decades ago when philanthropies helped to pass policies to put solar panels on rooftops to generate power, which was a "huge challenge" -- especially when incorporating them into building codes, Kitt said.

The money could also be well spent on investing in new technologies that are "actually going to make a difference" in reducing greenhouse gas emissions, such as batteries and other forms of renewable power, Forrer said.

Educating the public about how the climate crisis affects them -- such as how the war in Ukraine is causing oil prices worldwide to skyrocket -- will also be a crucial way to use the funds, the experts said.

"Philanthropists can be quite influential in the ways that move too slowly and not to scale," Kitt said.

ABC News' Tracy Wholf contributed to this report.

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Experts weigh in how to navigate your way through the secondhand shopping market

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(NEW YORK) -- With inflation and higher prices across industries, many people are closely examining how to save or make their dollars stretch further. Fashion isn't exempt from the conversation, and part of the reason why there's been an ongoing uprise within the secondhand shopping market.

From thrift stores to online consignment shops, these accessible destinations are giving shoppers a chance to breathe new life into pre-owned items, save money and attain a more eco-friendly wardrobe.

During a time when there are so many fast fashion retailers mass-producing high volumes of clothing, everyone from influencers to shopping enthusiasts are opening up to the idea of slow fashion through secondhand shopping as well as other methods.

"It helps slow down the carbon footprint in the fashion industry," fashion content creator and owner of @ThriftNTell Iesha Gilchrist told ABC News' Good Morning America. "I'm not sure if there is a way to completely stop it, however, if I know that I'm choosing to check the thrift store first over those popular fast fashion websites then I'm one less person adding to crowded landfills."

Dallas-based fashion and beauty influencer Stephanie Taylor Jackson also explained to GMA that another key benefit is the endless amount of unique vintage pieces you can find while secondhand shopping.

"It's always so special finding something that no one else has right now," she said.

She added, "You're doing your part to help the environment. Rather than something being thrown away, destroyed or even just sitting on a shelf unused, I view secondhand shopping as giving beautiful pieces a new life."

Toward the end of last year, she was able to snag a pre-loved Chanel purse from online luxury fashion resale website Fashionphile.

Tips for secondhand shopping, according to experts

If you are brand new to the idea of secondhand shopping and not sure where to start, you aren't alone. If you're a newbie, Gilchrist recommends not to go in with high expectations and shop around at multiple stores.

"If you find one staple piece in a thrift store then you won," she said. "Thrifting is all about building a sustainable dream wardrobe while still adding a few trendy pieces here and there."

Taylor also added that another key factor is to always look for reputable sites and retailers who can guarantee authenticity.

Brand director at major online consignment and thrift store thredUP, Madeline Cronin Aaronson, pointed out to GMA how easy it can be to get swept away by really fun, unique pieces. Her tip for making the best decision: "My rule of thumb is to think of at least three items I have in my closet that will go with the secondhand item. That way I know it's a worthwhile addition to my wardrobe. Worst case, if you thrift an item that ends up not working, you can always resell it and put it back into the circular economy for someone else to try."

In addition to the advice mentioned above, CEO and founder of pre-owned luxury consignment shop Dora Maar Lauren T. Wilson told GMA other key factors include knowing your style as well as knowing your measurements.

"Make sure to know your bust, waist and hip size," she said. "Every designer is different so platforms such as Dora Maar make sure to put the measurements on our clothing descriptions to assist our consumers in knowing if it's the right size for them."

What's real and what's not?

When it comes to secondhand shopping, specifically for luxury items, it can sometimes be difficult to decipher between what's authentic and what's not.

Gilchrist suggests that the best thing to do is to research and do lots of examining of the product.

"Pay very close attention to the stitching and the lining. I personally can tell when something is cheaply made especially if it's fake leather," she said. "Most dupes or knock-offs have something off about them whether it be the color of the thread, the zipper, the inside lining or the logo font — don't get me wrong there are some great knockoffs out there that can fool you but researching your favorite designer brands is always my best advice before purchasing."

If the platform you are buying from doesn't have its own authentication process, a few trusted websites that can assist include Authenticate First, Real Authentication and Zekos Authentication.

What are some downsides of shopping from thrift and consignment shops?

Taylor advises shoppers to definitely be very aware of the condition of the item you are purchasing -- especially for anything bought online.

"Use the grading scale many sites have and ask for additional photos when possible," she said."

On top of thoroughly reviewing the condition, Gilchrist warns to confirm that you aren't bringing back any "unwanted guests" such as bugs, rodents, germs, etc. with you home from a thrift store.

She added, "Make sure you are thoroughly shaking and checking each garment you pick up and try to stay away from stained clothing especially if you can't make out where the stain came from."

The bottom line

"In a world of fast fashion, secondhand shopping presents a rare opportunity to extend the life of a piece, whether it be a Chanel bag or Carolina Herrera dress," said Wilson. "Those pieces took time and true craftsmanship to create. To be a fashion lover and give that piece a new life is a wonderful thing. I also firmly believe that buying secondhand is more gratifying — you're searching and scouting, and more times than not you find a piece that speaks to you and has a unique flair to it not found anywhere else."

Best online shops for pre-loved consignment shopping, according to experts:

  • Dora Maar
  • thredUp
  • Fashionphile
  • The Real Real
  • eBay
  • Julia Rose Boston
  • Etsy
  • Poshmark
  • Depop
  • Mercari
  • Vestiaire Collective

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What the rate hike will mean for housing

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(NEW YORK) -- The Federal Reserve’s string of interest rate hikes this year has thrown cold water on the once red-hot housing market.

Existing home sales fell for the seventh straight month in August, down 0.4%, according to the National Association of Realtors, as the central bank aggressively raises interest rates to cool the economy and drive down high inflation. That has led to higher mortgage rates, increasing borrowing costs for home buyers by hundreds of dollars a month.

The average rate on a 30-year fixed-rate mortgage has more than doubled since the beginning of the year and was at 6.02% in the week ending Sept. 15, according to housing finance agency Freddie Mac.

"The latest Fed rate hike could continue to have an impact on affordability," Glenn Brunker, president of the financing company Ally Home, told ABC News.

While home prices have fallen from their springtime peaks in some markets, prices remain above where they stood a year ago.

The median sale price of an existing home in August was $389,500, down from $403,800 in July but still 7.7% higher than the same time last year. As home demand falls, the inventory of homes for sale has increased and homes are sitting on the market longer.

"So that bidding war that may have cost you more than a rate increase a few months ago is less likely to happen today," Brunker said. "However, while home prices are moving down on a relative basis, they are not moving down as fast as rates are moving up."

According to the Mortgage Bankers Association, adjustable-rate mortgages (ARMs) made up nearly 10% of all new home loan applications as of mid-2022. As interest rates rise, adjustable-rate loans become more attractive to buyers who prefer not to lock in a high rate.

When considering an ARM, experts said buyers should be aware of the loan's cap, which limits the total amount a rate can increase after the fixed rate period has expired. It is designed to protect buyers against sharp increases when the adjustable period begins.

If you’re house hunting, Brunker recommended getting pre-approved for a mortgage.

"Having a pre-approval letter in hand is important when buyers are ready to place an offer on a home in a fast-moving market," Brunker said. "It shows sellers that a buyer is serious about purchasing and also that a lender is committed to financing their home."

Experts continue to point to the need for more housing to ease the inventory shortage but the latest numbers are not encouraging.

Confidence among homebuilders fell in September for the ninth straight month, according to the National Association of Homebuilders. Residential permits, which can be a bellwether for future home construction, fell 10% in August, according to the Commerce Department.

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Heating bills to reach 10-year high this upcoming winter: NEADA report

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(NEW YORK) -- Heating costs for the upcoming winter season are expected to increase by 17%, mainly impacting lower-income families, according to a new report from National Energy Assistance Directors Association.

Costs are expected to reach above $1,200 in 2022-2023, up from $1,025 in 2021-2022, a 10-year-high, NEADA data reports.

Lower-income families are at a higher risk of falling behind on their energy bills and choosing to pay for medicine, food and rent, NEADA Executive Director Mark Wolfe said in a press release.

Last week, in a letter, the association asked Congress for a supplemental increase of $5 billion in the Low-Income Home Energy Assistance Program to cover the rising costs of heating homes, as well as cooling them because of frequent heat waves during the summer.

Parts of the U.S. saw heat indexes reach dangerous levels this summer, which saw temperatures hitting the triple digits in some cities and towns.

Sweltering summers have led to increased electricity use, resulting in lower levels of natural gas headed into the fall, Wolf told ABC News.

"We expected at the beginning of this year for prices to be going up because of the increased demand," Wolf said, adding that the high demand, combined with the war in Ukraine, has amplified the issue. He noted that prices in Europe are higher than in the U.S.

The electric power sector uses natural gas to produce electricity. Last year, the industry accounted for 37% of total natural gas consumption in the U.S., according to the U.S. Energy Information Administration.

According to NEADA, this would be the second year homeowners have seen a significant price increase.

Home energy prices have gone up more than 35% between 2020-2021 and 2021-2023, according to the report.

The study found that the cumulative costs of heating homes could go from $127.9 billion in 2021-2022 to nearly $150 billion between 2022-2023, with the added expenses impacting low-income families the most.

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Fed hikes benchmark rate 0.75% in significant escalation of inflation fight

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(WASHINGTON) -- The Federal Reserve instituted a dramatic interest rate hike on Wednesday, the latest in a series of borrowing cost increases, as the central bank tries to dial back near-historic inflation while avoiding an economic downturn.

The Fed raised the benchmark interest rate by 0.75%, repeating the same hike it imposed at each of the last two meetings. Prior to this year, the Fed last matched a hike of this magnitude in 1994.

The move arrives a little more than a week after a higher-than-expected inflation report revealed that prices rose slightly in August, worsening the cost woes for U.S. households and sending the S&P 500 tumbling for its worst day of 2022.

The Fed has put forward a string of aggressive interest rate hikes in recent months as it tries to slash price increases by slowing the economy and choking off demand. But the approach risks tipping the U.S. into a recession and putting millions out of work.

Federal Reserve Chair Jerome Powell on Wednesday reasserted the central bank's commitment to bring inflation down to a target rate of 2%, saying the Fed expects to put forward "ongoing increases" to its benchmark interest rate.

"We have both the tools we need and the resolve it will take to restore price stability on behalf of American families and businesses," Powell said.

In a statement on Wednesday, the Federal Reserve depicted the U.S. economy as one struggling with high prices.

"Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures," the Federal Reserve said.

"Recent indicators point to modest growth in spending and production. Job gains have been robust in recent months, and the unemployment rate has remained low," the statement added.

Hours before the rate hike announcement, chief executives at some of the largest U.S. banks sounded the alarm over sky-high inflation in testimony before Congress, warning that price hikes would require further borrowing cost increases from the Federal Reserve that will slow the economy and impose widespread financial pain.

Speaking at a conference held by the conservative-leaning Cato Institute, Powell said earlier this month that the central bank must act "forthrightly, strongly" to dial back inflation.

The rate hikes have yielded mixed results, however. On an annual basis, consumer prices have moderated slightly but remain highly elevated.

The consumer price index rose 8.3% over the past year as of August, a slight slowdown from 8.5% in July, according to the Bureau of Labor Statistics.

Some prices have already fallen significantly, though. Gas prices dropped 10.6% in August, the bureau said.

Meanwhile, rate increases appear to have slowed key sectors of the economy, sending mortgage rates higher and slowing the construction of new homes, for instance.

Still, other indicators suggest the U.S. economy continues to hum.

U.S. hiring fell from its breakneck pace but remained robust in August, with the economy adding 315,000 jobs and the unemployment rate rising to 3.7% as more people sought work, according to data released by the Bureau of Labor Statistics in early September.

On Wednesday afternoon, immediately after the rate hike announcement, each of the major stock indexes had fallen slightly.

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Big bank CEOs sound alarm on inflation fight: 'Expect tougher times ahead'

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(WASHINGTON) -- Chief executives at some of the largest U.S. banks sounded the alarm over sky-high inflation in testimony before Congress on Wednesday, warning that price hikes would require further borrowing cost increases from the Federal Reserve that will slow the economy and impose widespread financial pain.

The testimony from top bank leaders, including J.P. Morgan Chase CEO Jaime Dimon and Citigroup CEO Jane Fraser, arrived hours before the Federal Reserve escalated its fight against inflation with a dramatic interest rate hike.

The Fed has instituted a series of aggressive interest rate hikes in recent months as it tries to slash price increases by slowing the economy and choking off demand. But the approach risks tipping the U.S. into an economic downturn and putting millions out of work.

"We’re very concerned about the high prices consumers are facing in America and indeed around the world," Fraser said.

The Fed’s continued interest rate hikes will put the brakes on economic activity and cause economic hardship, she added.

"The impact of higher rates that are required to try to tame the inflation is likely to be moderating growth in America and around the world, and will be putting pressure on many of the drivers of the economy," she said, adding that the bank "expect[s] tough times ahead."

Dimon, who runs the nation’s largest bank, listed adverse conditions faced by the U.S. economy, including the Russia-Ukraine war, rising oil prices, inflation and interest rate hikes.

"Those things will absolutely cause a slowdown in the economy and at one point increase unemployment," he testified Wednesday.

Last week, the government released a higher-than-expected inflation report that revealed prices had risen slightly in August, worsening cost woes for U.S. households and sending the S&P 500 tumbling for its worst day of 2022.

Speaking at a conference held by the conservative-leaning Cato Institute, Fed Chair Jerome Powell said earlier this month that the central bank must act "forthrightly, strongly" to dial back inflation.

The combination of those comments and the inflation data last week led many economists to expect the 0.75% interest rate hike the Fed instituted on Wednesday.

So far, rate increases appear to have slowed key sectors of the economy, sending mortgage rates higher and slowing the construction of new homes, for instance.

Despite rate hikes, Dimon said the U.S. could avert an economic recession, noting the possibility of a “soft landing,” in which the central bank dials back inflation but does not cause an economic slowdown.

But the U.S could instead enter a mild or severe recession, and could even face a more severe downturn, Dimon said.

"Because of the war in Ukraine and the uncertainty it causes in the global energy supply and food supply, there’s a chance it could be worse," he said.

Offsetting their sobering assessment, top banking officials said U.S. consumers have attained a relatively strong financial position that will help them weather potentially difficult times.

"The American consumer is actually still in rather good shape," Dimon said. "They have a good balance sheet, their debt balances are low, confidence levels are going, jobs are plentiful."

Fraser, of Citigroup, added: "We’re fortunate to have the consumer in good health entering this."

Some indicators suggest that the U.S. economy continues to hum.

U.S. hiring fell from its breakneck pace but remained robust in August, with the economy adding 315,000 jobs and the unemployment rate rising to 3.7% as more people sought work, according to data released by the Bureau of Labor Statistics in early September.

"Inflation is affecting those the most that can afford it the least," said Andrew Cecere, the CEO of U.S. Bank. But, he added on a positive note, "Savings levels continue to be above pre-pandemic levels."

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New York AG Letitia James files $250M lawsuit against Trump for defrauding lenders, others

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(NEW YORK) -- For 20 years, Donald Trump and his family enriched themselves through "numerous acts of fraud and misrepresentations," New York Attorney General Letitia James alleges in a new lawsuit that accuses the Trumps of "grossly" inflating the former president's net worth by billions of dollars and cheating lenders and others with false and misleading financial statements.

The civil lawsuit, filed Wednesday in State Supreme Court in Manhattan, seeks a $250 million judgment and a prohibition on any of the Trumps leading a company in the state of New York.

"We found that Mr, Trump, his children, and the corporation used more than 200 false asset valuations over a ten year period," James said at a press conference announcing the charges.

Among other allegations, the suit claims that the former president's Florida estate and golf resort, Mar-a-Lago, was valued as high as $739 million, but should have been valued at around one-tenth that amount, at $75 million. The suit says that higher valuation was "based on the false premise that it was unrestricted property and could be developed for residential use even though Mr. Trump himself signed deeds donating his residential development rights and sharply restricting changes to the property."

James is referring her findings to federal prosecutors in Manhattan, who could possibly open a criminal investigation into bank fraud, according to a footnote in the lawsuit.

Through "persistent and repeated business fraud," the Trumps convinced banks to lend money to the Trump Organization on more favorable terms than deserved, according to the lawsuit, which named the former president, three of his adult children, the company, and two of its executives, Allan Weisselberg and Jeff McConney.

"Mr. Trump made known through Mr. Weisselberg that he wanted his net worth on the Statements to increase -- a desire Mr. Weisselberg and others carried out year after year in their fraudulent preparation of the Statements," the lawsuit said. "The scheme to inflate Mr. Trump's net worth also remained consistent year after year."

Weisselberg last month pleaded guilty to unrelated criminal charges of tax evasion brought by the Manhattan district attorney's office, which has been conducting a parallel investigation.

Trump has denied wrongdoing and has called the investigation a politically motivated "witch hunt" by an attorney general he has called "racist." James, who is black, rejected a settlement offer from the Trump Organization last month to resolve the matter, sources told ABC News.

"Today's filing is neither focused on the facts nor the law -- rather, it is solely focused on advancing the Attorney General's political agenda," Trump attorney Alina Habba said in a statement Wednesday. "It is abundantly clear that the Attorney General's Office has exceeded its statutory authority by prying into transactions where absolutely no wrongdoing has taken place. We are confident that our judicial system will not stand for this unchecked abuse of authority, and we look forward to defending our client against each and every one of the Attorney General's meritless claims."

"Today's filing represents the culmination of nearly three years of persistent, targeted, unethical political harassment by the New York State Attorney General, Letitia James," said a Trump Organization spokesperson in a statement. "While the job of the Attorney General is to protect the interests of the public, today's filing, for the first time in the history of the Attorney General's office, seeks to protect the interests of large, sophisticated Wall Street banks. However, not only was no bank harmed -- actually, they profited handsomely to the tune of hundreds of millions of dollars in interest and fees -- and never once took issue with any of the loans in question."

James, however, said Wednesday, "White collar financial crime is not a victimless crime. Everyday people cannot lie to a bank."

During a deposition last month, Trump repeatedly invoked his Fifth Amendment right against self-incrimination. The lawsuit includes numerous instances in which Trump invoked the Fifth when asked to explain how the company calculated the value of certain properties. In a civil trial, jurors would be able to draw a negative inference about Trump declining to answer.

The attorney general's investigation began in March 2019, after Trump's former lawyer, Michael Cohen, testified before Congress that Trump's annual financial statements inflated the values of Trump's assets to obtain favorable terms for loans and insurance coverage, while also deflating the value of other assets to reduce real estate taxes.

Trump valued his Trump Tower apartment at $327 million, James said Wednesday. "No apartment in New York City has ever sold for that amount," she said, adding the inflated valuation was based on exaggerated square footage despite Trump knowing it wasn't that big.

The suit also said a 2012 statement valued rent-stabilized apartments in the Trump Park Avenue property as if they could be rented at market value. As a result, units collectively worth $750,000 were valued at nearly $50 million, according to the lawsuit.

Trump Turnberry, a golf club in Scotland, was valued at nearly $127 million, but the suit said that since it opened in 2017 the golf course has operated at a loss each year.

"As a result, using values for the golf course ranging between $123 million and $126.8 million based on employing the Fixed Asset Scheme is materially false and misleading; the golf course should have been valued at a much lower figure," the attorney general's suit said.

"The examples I laid out barely scratch the surface," James said Wednesday. "Claiming you have money you do not have does not amount to the art of the deal. It's the art of the steal."

"The magnitude of financial benefit derived by Mr. Trump and the Trump Organization by means of these fraudulent and misleading submissions was considerable," the suit said.

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How rapidly rising mortgage rates are squeezing prospective homebuyers

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(NEW YORK) -- For Emily and Michael Brown, the Federal Reserve’s rate hikes hit close to home.

The Browns had been renting a two-bedroom apartment in Washington, D.C., when their now-6-month-old daughter was born. Eager to upgrade to a bigger space, the couple wanted to put their savings to use buying their first home.

But as they looked for a place to live this year -- and watched mortgage rates, and their potential monthly payments, steadily climb -- the couple lowered their budget from $500,000 to $400,000 and decided to put an offer on a home farther away from the city, with less space and fewer amenities.

“As the rates kept going up, we had to really bring down our budget and also be a little bit more realistic about what we were going to get for that budget,” Emily Brown, a high school math teacher, told ABC News.

Mortgage rates have more than doubled since January, lenders and real estate companies say, spurred by aggressive interest rate increases as the Fed attempts to curb high inflation. Many Americans searching for homes are lowering their budgets and making trade-offs -- as they face higher monthly mortgage payments.

“Many homebuyers have dropped out of the housing market entirely because they can't afford any home that fits their needs,” Daryl Fairweather, the chief economist at real-estate brokerage company Redfin, told ABC News.

As the Fed keeps hiking interest rates to try to tame historic inflation, mortgage rates have spiked to levels not seen since the 2008 financial crisis. And with the central bank expected to increase rates again on Wednesday -- as inflation remains stubbornly high -- some aspiring homeowners find themselves stuck on the sidelines altogether.

“The price of homes has jumped so much in the past year. Then you take into account the high interest rates, it's really a tough position to be in as a first-time homebuyer,” Emily Brown said.

Mortgage rates hit 14-year high

For the first time since 2008, the average rate on a 30-year fixed mortgage is now above 6%, Freddie Mac said last week. The financial services company Bankrate estimates that a borrower taking out a $300,000 loan at that rate is paying about $500 more every month than they were before the Fed increases, which began in March.

“Since interest rates have risen, I’ve had to reduce the amount that I can afford each month, depending on my down payment and what a monthly mortgage would be,” Simone Jacobs, a therapist in Silver Spring, Maryland, told ABC News.

After renting for seven years, Jacobs had hoped to buy a property as a longer-term investment. But rising rates and still-high home prices have kept her out of the market.

“If nothing comes up or there's nothing that sort of is affordable, then, you know, I will just wait,” she said.

'It did kind of put us in a pickle'

Rapidly rising mortgage rates have also squeezed buyers building new homes.

Wesley and Kimberly Robinson, both elementary school teachers, started building a new home for themselves and their two daughters in Rogers, Arkansas, last year, when interest rates were close to 3%.

"With the low interest rates, we thought, Hey, if we're going to ever upgrade, now's the time," Wesley Robinson told ABC News.

But as the COVID-19 pandemic stalled construction and the Fed continued to raise interest, their mortgage rate ended up to 5% when they finally locked it in this summer -- adding about $300 to $400 to their monthly mortgage payment, according to Wesley Robinson.

"It did kind of put us in a pickle," he said.

And now he fears higher mortgage rates might scare off buyers for their old home, which they have yet to sell.

"If now rates are like 6% or higher, do we need to like discount our home a little bit?" he asked. "We don't want our home to sit there for weeks and weeks unsold. We kind of need the money."

Fewer bidding wars as markets cool, particularly in the West

Real estate agents told ABC News that they are seeing homebuyers who had locked in low rates on their initial mortgages waiting to sell, amid the prospective of taking on costlier loans, which is keeping housing inventory low in much of the country.

“What we're seeing now as a result of the rising interest rates is that you're not getting as many offers as before,” said Jay Nix, a realtor in Washington, D.C., who worked with the Browns.

Less competition is leading to fewer bidding wars for those who are able to afford to buy, multiple real estate agents said.

"The good news is that you can get your offer accepted much more easily now because you're not facing as much competition," Fairweather, Redfin's chief economist, said. "But the bad news is that the mortgage is going to be much more expensive."

There are signs the housing market is beginning to cool in some parts of the country.

Redfin said Wednesday in a new report, provided first to ABC News, that Seattle's housing market is slowing faster than any other in the United States, followed by Las Vegas and San Jose, California. The firm looked at changes from February to August, comparing metrics ranging from home prices and the number of pending sales to the total supply and the speed of sales.

The top 10 markets cooling the quickest were "almost all either West Coast markets that have long been expensive, or places that became significantly less affordable during the pandemic because they attracted scores of relocating homebuyers," according to Redfin.

Rents on the rise

Hoping to buy someday, many prospective homebuyers remain stuck on the sidelines -- grappling with high increases in rent.

Rent costs increased 6.7% in August from a year before, the biggest spike in nearly 40 years, according to the U.S. Bureau of Labor Statistics.

"If you wait a couple more years, your rent keeps going up," said Redfin's Fairweather. "And then you have to deal with the expense of higher prices and more competition in the housing market."

For the Browns in Washington, that calculation convinced them to put in a winning bid on a home. They are set to close next month.

"We really just thought about if we continue to rent, you know, that money could go toward the mortgage," said Emily Brown, whose husband is an Army veteran.

"It's a big life decision," she added. "So -- you do the math."

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This is how much money Black women lose to the pay gap

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(NEW YORK) -- The wage gap that sees Black women earning less than white, non-Hispanic men can cost them as much as $2,000 per month, $23,000 per year and more than $900,000 over the course of a 40-year career, according to the National Women's Law Center, a policy-focused organization that fights for gender justice.

Sept. 21 marks Black Women's Equal Pay Day, the date that Black women have to work to in 2022 to earn what their male, white, non-Hispanic counterparts earned in 2021.

Last year, the day fell on Aug. 3, meaning that Black women this year have had to work over six weeks longer into the year to try to make up for their lost wages.

In the United States, Black women are on average paid 58 cents for every dollar earned by men, according to Census Bureau data shared by the American Association of University Women, a non-profit organization dedicated to empowering women and girls.

Women of all races working full-time in the U.S. are paid 83 cents to every dollar earned by men, according to the AAUW. Equal Pay Day fell on March 15, the day that women have to work into 2022 to earn the same as their male counterparts did last year.

"Because women earn less, on average, than men, they must work longer for the same amount of pay," the National Committee on Pay Equity said in a statement on Equal Pay Day. "The wage gap is even greater for most women of color."

According to National Women's Law Center data, a Black woman who starts working at age 20 would have to work until she is almost 80 years old to earn what a white, non-Hispanic man is paid by age 60.

Black Women's Equal Pay Day comes this year as Black women are still trying to recover from the economic fallout of the coronavirus pandemic, a time during which they lost jobs at a higher rate than other groups in the country.

Unemployment rates dropped or remained the same for almost every race or ethnicity except Black women, with an unemployment rate almost double that of white Americans, according to the National Women's Law Center. In August, while many groups joined the labor force, 45,000 Black women left.

Black women also continue to be hit hardest by the student debt crisis in the U.S., with around 1 in 4 Black women holding student debt, according to data from the Census Bureau and the American Association of University Women.

Just over a decade after starting college, Black women, on average, owe 13% more than they borrowed, while white men, on average, have paid off 44% of their debt, according to The Education Trust.

One of the reasons Black women owe so much more in the years after graduating college is the gender pay gap, experts say.

Gloria Blackwell, CEO of the American Association of University Woman, said because Black women earn less, many are burdened by student debt for the larger part of their career. She described what Black women face in the workplace as the "perfect storm" of both a racial wealth gap and gender pay gap.

"When you are a Black woman and you have this burden of student loans, it impacts every aspect of your life," Blackwell told ABC News last month. "It impacts whether you can pay for basic living expenses, whether you can afford transportation or even the rent in order to have a decent place to live, let alone save for a house or be able to start a family or take care of your family. It's a burden on Black women on whether they can save for retirement or afford rent or be able to move to a better neighborhood."

Black women enroll in college at higher rates than other groups. However, a 2020 report from the Lean In organization found that the gender pay gap is largest for Black women who have bachelor's degrees.

"Black women are ambitious -- they're more likely than white men (35%) and white women (26%) to say they want to become top executives," the report stated. "But even in the same job, Black women are paid less than white men."

Experts including Blackwell and Nicole Mason, president and CEO of the Institute for Women's Policy Research, say the solution for closing the gender pay gap for Black women needs to come from both the government and private sectors.

On the federal level, Mason said the passage of legislation like the Paycheck Fairness Act can help promote pay equity and transparency, while enforcement of existing civil rights and equal employment laws can help lower workplace discrimination.

"Employers have a role to play in terms of making sure there is pay equity and making sure that women across the board earn what they're worth and the skills and talents they bring to the table," Mason previously told ABC News. "And as a culture and a society, we have a lot of work to do in terms of breaking gender stereotypes around women in the workplace, their value and how much women should be paid for their work."

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Fed expected to raise interest rates, escalate fight against inflation

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(NEW YORK) -- Wall Street will watch closely on Wednesday as the Federal Reserve is expected to escalate its fight against inflation with a dramatic interest rate hike.

The move would come a little more than a week after a higher-than-expected inflation report revealed that prices rose slightly in August, worsening the cost woes for U.S. households and sending the S&P 500 tumbling for its worst day of 2022.

The Fed has instituted a series of aggressive interest rate hikes in recent months as it tries to slash price increases by slowing the economy and choking off demand. But the approach risks tipping the U.S. into an economic downturn and putting millions out of work.

Speaking at a conference held by the conservative-leaning Cato Institute, Fed Chair Jerome Powell said earlier this month that the central bank must act "forthrightly, strongly" to dial back inflation.

The combination of those comments and the inflation data last week has led many economists to expect another 0.75% interest rate hike on Wednesday. Some economists have predicted that the Fed will raise rates by 1%, which it has not done in four decades.

At each of its last two meetings, the central bank has increased its benchmark interest rate by 0.75% -- jumbo-sized hikes last matched in 1994.

The rate hikes have yielded mixed results, however. On an annual basis, consumer prices have moderated slightly but remain highly elevated.

The consumer price index rose 8.3% over the past year as of August, a slight slowdown from 8.5% in July, according to the Bureau of Labor Statistics.

Some prices have already fallen significantly, though. Gas prices dropped 10.6% in August, the bureau said.

Meanwhile, rate increases appear to have slowed key sectors of the economy, sending mortgage rates higher and slowing the construction of new homes, for instance.

Still, other indicators suggest the U.S. economy continues to hum.

U.S. hiring fell from its breakneck pace but remained robust in August, with the economy adding 315,000 jobs and the unemployment rate rising to 3.7% as more people sought work, according to data released by the Bureau of Labor Statistics in early September.

At closing Tuesday, each of the major stock indexes fell roughly 1% ahead of an anticipated rate hike. The Dow Jones Industrial Average tumbled nearly 300 points.

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Fed rate hikes haven't curbed inflation much. These policies would work instead, economists say

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(WASHINGTON) -- A hotter-than-expected inflation report last week dispelled hopes of relief for strained households and rekindled questions about U.S. policy for fighting sky-high prices.

The Federal Reserve has instituted a series of aggressive interest rate hikes in recent months as it tries to slash price increases by slowing the economy and choking off demand. But the approach risks tipping the U.S. into an economic downturn and putting millions out of work.

Moreover, the rate hikes have failed to significantly reduce prices, prompting suggestions of policy alternatives that some economists told ABC News would better address the root causes of inflation, provide relief for struggling consumers and forgo the danger posed by a possible recession.

On the other hand, some economists told ABC News that the Fed's rate hikes are the best tool for fighting inflation but the central bank hasn't increased them far enough. For its part, the central bank is set to impose another major rate hike on Thursday.

Economists who support policy alternatives propose measures like price controls, a windfall profits tax on some corporations that charge high prices and a dramatic expansion of U.S. production to address supply shortages.

"The inflation over the last couple of years caught a lot of people off guard," Lauren Melodia, the deputy director for fiscal and economic policies at the research group Center for New York City Affairs at The New School, told ABC News. "There's a way in which society wants one solution for something."

Here's what you need to know about alternative policy solutions for fighting inflation:

Price controls

One of the most widely discussed and controversial solutions for inflation is price controls.

The thinking behind it is simple: When prices are pummeling consumers, the government imposes a measure that prohibits companies from selling particular goods above a certain price. Milk could face one price cap, for instance; soap could face another.

Isabella Weber, an economics professor at the University of Massachusetts Amherst and a proponent of price controls, said the limits could be targeted toward specific items that have experienced particularly sharp price increases, especially essential goods like gas and food.

"Price controls help you avoid a price explosion," Weber told ABC News.

There is a precedent for price controls in the U.S. To stem inflation brought about by supply shortages during World War II, President Franklin Roosevelt empowered the newly created Office of Price Administration to cap prices on a slew of products. The move is widely credited with helping to limit inflation during the war, but it also gave rise to a black market for some items.

Decades later, in 1971, President Richard Nixon imposed price controls in an effort to slash inflation and ensure his re-election the following year. The controls remained in place until 1974 but were seen by many as ineffective at reining in price hikes.

The different outcomes in the 1940s and 1970s show that price controls help fight inflation but not in every case, Weber said, adding that price controls only limit inflation temporarily as other fixes address the causes behind the price pressures.

"It's not that price controls always work or never work," she said. "Price controls can work in certain contexts if tailored the right way."

Some economists, however, reject the notion of targeted price controls.

"Every price is connected to every other price in the economy," Catherine Pakaluk, a professor of economics at the Busch School of Business at Catholic University, told ABC News. "If you put certain products at bargain rates in relation to the rest of the economy, they get scooped up even faster and it generates supply shortages."

For example, a price control on milk would prompt shoppers to load up on it and avoid comparatively high items that lack controls, such as meat, Pakaluk said.

The fear of empty shelves carries heightened concern because supply shortages remain a central cause of U.S. inflation and price controls could exacerbate that root problem even further, Pakaluk added.

"The economy is already suffering a really bad situation with shortages," she said.

Windfall profits tax

Rather than limit prices, some solutions seek to rein in corporate profits.

A windfall profits tax rests on the premise that inflation has resulted in part from alleged price gouging committed by corporations that have reported record profits amid the inflation crisis, such as oil giants.

In theory, a tax on excessive profits should disincentivize profiteering and bring prices down.

Elizabeth Warren, D-Mass., and Sen. Jeff Merkley, D-Ore., backed a bill in May that would empower a federal agency and state attorneys general to enforce a ban on excessive price hikes.

On the whole, economists sharply disagree over the extent to which excessive profits have contributed to inflation. Similarly, economists who spoke to ABC News differed on whether a windfall profits tax would bring down prices.

Benjamin Powell, a senior fellow at the Independent Institute, dismissed the solution, saying it poses the same risk as price controls: exacerbating supply shortages.

"It will just discourage some businesses from supplying goods that are already in short supply," he said.

Melodia, of the Center for New York City Affairs, disagreed. Because businesses seek to optimize profit, the economy needs a safeguard to prevent them from doing so when prices are highly elevated, she said.

"There is so much evidence over the past couple years that corporations have had increased profits across the board – not just in the oil industry," she said. "We don't want companies jacking up prices because they can."

Some economists, however, told ABC News that a windfall profits tax may push prices higher rather than bring them down.

Richard Wolff, an author and professor of economics emeritus at the University of Massachusetts Amherst, said the measure would need additional protections because otherwise it could drive companies to hike prices even more to overcome the losses imposed by the tax.

"What it becomes is an incentive to raise prices," he said.

Ramp up production

Another policy for fighting inflation centers on an expansion of U.S. production in order to address a supply shortage.

At bottom, inflation owes to an imbalance between supply and demand. The surge in demand for goods and labor has far outpaced supply, as COVID-related bottlenecks have slowed delivery times and interrupted services while infection fears have kept workers on the sidelines.

One way to address that imbalance is to dramatically increase supply, thereby bringing it in balance with outsized demand.

Economists who spoke to ABC News largely agreed on the prudence of increased U.S. production but said it would not address immediate inflation, since the necessary output overhaul would take several years.

"It's the most important thing we could be doing if we want sustained growth without price pressure," J.W. Mason, a professor of economics at John Jay College, told ABC News. "We should be investing in capacity."

The policy approach will likely take several years, he added.

"It's not an immediate or short-term solution," he said. "Obviously, it's not going to limit price increases over the next months or year."

Powell, of the Independent Institute, shared the support for increased U.S. production but opposed public investment. Instead, he said the U.S. should remove current policies that impede private sector growth.

He said he supports "lowering taxes and regulatory barriers that prevent entrepreneurs from bringing new investment."

Regardless of where they stood on particular policies, several economists told ABC News that the U.S. needs a robust public dialogue about whether to pursue further rate hikes or explore alternatives.

"It's a big fat mess," said Wolff. "There should've been a debate before launching into interest rates. There should've been a discussion between political leaders and the public."

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These sisters used social media to supercharge their parents' small business

Gipsy Rodriguez

(NEW YORK) -- Sisters Gipsy and Gelssy Rodriguez of Anaheim, California, are the social media powerhouses behind their parents' popular quinceañera dress shop, Moda2000.

The store boasts more than 3.3 million followers on TikTok, 200,000 followers on Instagram and even has its own YouTube TV show, "Quince Empire."

Gina Rodriguez and her husband Jorge founded Moda2000 as a women's casual clothing boutique in 1990 after immigrating to the U.S. from Guerrero, Mexico.

"That was like my parents' first baby," Gelssy Rodriguez, 23, told ABC News' Good Morning America.

When the girls were born, it took no time before they were introduced to the family business.

"My mom actually never took maternity leave," Gelssy Rodriguez said. "Like after she had us, the next day she was at the store working and she was carrying us and helping clients with us."

Gelssy Rodriguez recalled helping out around the store from as early as 8 years old, ringing up customers and even submitting a "sales report" to her parents at the end of the day.

The shop shifted towards quinceañera fashion 15 years ago, when Gina Rodriguez wanted to make the process of shopping for a quince dress more personal.

"It was very cold ... like don't take photos, don't touch, don't even look at it in a sense," Gelssy Rodriguez said.

In Latino culture, a quinceañera is the celebration of a girl's 15th birthday, which traditionally marks the transition from girlhood to womanhood. The festivities, steeped in rich tradition, can be as extravagant as a wedding and girls traditionally wear expensive ballgowns and tiaras.

"It is a time in your life where you get to enjoy all the people around you, you get to enjoy that you're young, and it is a transition -- but I feel like now it's more of a celebration with your family," Gipsy Rodriguez, 25, said.

Moda2000's dress designs would eventually put the store on the map, but that success would not come without hardship. Rebranding meant completely starting over, from inventory to clientele, which took a major toll on the Rodriguez family financially.

In 2015, they said they sold their home and moved into the store, where they lived for three years.

Around this time, social media was gaining popularity and the Rodriguez's saw this as an opportunity to help get the word out about Moda2000. Gipsy and Gelssy Rodriguez taught themselves about social media strategy on the fly, and decided to post videos of their gowns first to YouTube and Instagram, and eventually to TikTok.

"We kind of just posted a video not knowing what was going to happen," Gipsy Rodriguez said. "TikTok was new at the time ... and we posted and we went to dinner that night and our phones were just blowing up, like buzzing and buzzing."

Their first TikTok -- which now has 1.4 million likes -- drove 10,000 followers to their newly-created account overnight, they said.

Going viral changed their business in ways the Rodriguez family could never have imagined.

Today, quinceañeras -- the term for a girl celebrating a quince -- travel from all over to be fitted in one of Moda2000's designs, they said.

"It's just so crazy," Gipsy Rodriguez said. "Now we're getting those clients that have been following us and watching our videos since they were little girls … I think it's so beautiful that they get to grow up with us."

While their parents are still very involved in the store, Gipsy and Gelssy Rodriguez, who now serve as the brand's creative director and store's operations director, respectively, are slowly taking the reins.

"They have the experience and every day we're learning from them, but now they're also learning from us," Gipsy Rodriguez said. "I think it's amazing seeing the two different generations come together."

For the whole family, Moda2000's growth has felt representative of the "American Dream."

"My parents literally started with $0 from anybody else, and to this day, we haven't taken any outside capital or anything like that," Gelssy Rodriguez said. "And not only did they make such a successful business, but they also made an impact within the industry that we are in and we've become industry leaders."

Above all else, she said, their success reinforces a positive message about Latino-owned businesses.

"That's something that we're very proud of," she said.

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