What’s up? (July 31-August 6)
A surprise on the working day
Analysts had predicted an increase of 250,000 jobs in July. And so it was a shock when the Ministry of Labor’s report showed that more than double that figure – 528,000 – was added last month. The blistering growth brought total employment back to pre-pandemic levels, a puzzling benchmark given other recent signs of a slowing economy, including a falling gross domestic product and a more subdued housing market. Indeed, this latest jobs report raises more questions than answers about the state of the US economy: What is the reason for employers’ confidence in hiring if many fear a recession? Why is the job market so resilient if the economy appears to be more depressed? These are apparent contradictions that Federal Reserve officials will consider as they consider which path to take.
More Crypto Shock Waves
Citing the crash in the cryptocurrency market along with inflation and the worsening economic outlook, trading app Robinhood announced layoffs of 23 percent of its staff on Tuesday, the second round of job cuts in just a few months. It is still dealing with the fallout from last year’s “meme stock” frenzy, when investors conspired to boost the shares of struggling companies like GameStop and AMC, ultimately resulting in lawsuits, a report from the Securities and Exchange Commission and congressional hearings for Robinhood, who became a key player in the trade. But also disastrous for the company has been its exposure to the crypto market, which analysts said led many companies, such as cryptocurrency exchange Coinbase, to overhire during the market’s boom and then lay off employees as it plummeted. Robinhood CEO Vlad Tenev said the company misjudged the economy and trading activity. “As CEO, I approved and took responsibility for our ambitious staffing trajectory – this is on me,” he wrote in a blog post.
Elon Musk opposes
In his first comprehensive response to Twitter’s case against him, Elon Musk accused the social media company of fraud, repeating arguments that it hid the true number of spam and bot accounts on the platform. in a legal filing made public on Thursday, Mr. Musk’s lawyers argued that the share of those accounts was closer to 10 percent, while Twitter has argued that it was less than 5 percent. His lawyers also accused Twitter of hiding the number of users who see ads. Twitter continues to say the numbers are accurate. The two sides are still set to resolve their disputes in Delaware’s Court of Chancery in October, when a judge will decide whether Mr. Musk’s claims that Twitter withheld information about spam accounts on the site are legitimate or whether he must still complete the $44 billion deal dollars. .
What will be next? (August 7-13)
Disney’s ambitious subscriber goals
The Walt Disney Company’s bold subscriber ambitions may get a check in its quarterly earnings report on Wednesday. The company has beaten analysts’ expectations for streaming platform Disney+ so far this year, announcing in February that it had added 11.8 million subscribers and then in May that 7.9 million more had joined for a total of 138 million. But it has an aggressive goal of reaching 230 million to 260 million Disney+ subscribers globally by 2024, and analysts have said guidance is likely to be cut on Wednesday. They predict that Disney will instead focus on making the streaming site profitable. These aren’t the only challenges facing Disney: Its stock price has slumped this year, the company fired its top TV content executive, and while its U.S. theme parks have rebounded, they have struggled in China due to pandemic restrictions.
The latest on inflation
The consumer price index this week may give a somewhat confusing message. Analysts expect both year-on-year and month-on-month inflation to decline, but that “core” inflation – the measure that excludes volatile gas and food costs – will rise on an annual basis. Gas prices, which have fallen sharply from recent peaks, will be the likely cause of a decline in overall inflation. Nevertheless, politicians are concerned about how much and how quickly the overall price gains will cool down. Federal Reserve officials are planning another big interest rate hike in September, but are looking for signs of moderation across the economy as they decide the pace of the hikes. In the White House, President Biden is pushing the Inflation Reduction Act as the administration’s tool to bring down prices, although it is uncertain how effective the legislation will be in this task.
A potential salve for travel chaos
In April, The New York Times asked its transportation reporter: “Air travel is back. Can the industry keep up?” The answer has recently appeared to be: No. To address the increase in delays and cancellations this year – especially acute during high holiday weekends this summer – the transport department has proposed a rule that would provide more recourse for passengers who experience significant disruptions to their travel plans, including major changes to the flight’s schedule, route or seating. Airlines that received pandemic aid from the government will also be required to provide full refunds to passengers who change their mind about travel for Covid-related reasons. If it goes into effect, however, it won’t be in time for the August trip to Italy — the agency has opened a 90-day public comment period and will make a decision after that.
Stephen King testified in the Justice Department’s antitrust case to block Penguin Random House from buying Simon & Schuster. Walmart lays off 200 corporate workers. OPEC Plus approved a small increase in oil production.