business news in context, analysis with attitude

MNB Archive Search

Please Note: Some MNB articles contain special formatting characters, and may cause your search to produce fewer results than expected.

    Published on: February 10, 2023

    I'm a Wordle fanatic - it suits my desire for a quick challenge each morning, without the possibility of getting fixated since you can only play once a day.  But it is another element of the experience - Wordle Bot, which evaluates the player's choices compared to its own - that has me thinking about Wordle in the context of the broader AI conversation.

    Published on: February 10, 2023

    by Kevin Coupe

    There were a number of economy-related stories this morning that I read as I scanned the news for entries I could use on MNB, and what struck me about them is a kind of Eye-Opening dissonance between how economists see the world and how consumers experience it, and the apparent gap between data and perception.

    •  From the Wall Street Journal this morning:

    "Interest rates are rising, inflation is elevated and recession fears linger. Despite all that, employers keep hiring.

    "The U.S. added 1.1 million jobs over the past three months and ramped up hiring in January. That appears puzzling, given last year’s economic cool down, signs that consumers are pulling back on spending as their savings dwindle, and a stream of corporate layoff announcements, particularly in technology.

    "Driving the jobs boom are large but often overlooked sectors of the economy. Restaurants, hospitals, nursing homes and child-care centers are finally staffing up as they enter the last stage of the pandemic recovery. Those new jobs are more than offsetting cuts announced by huge employers such as Inc. and Microsoft Corp.

    "Employers in healthcare, education, leisure and hospitality and other services such as dry cleaning and automotive repair account for about 36% of all private-sector payrolls. Together, those service industries added 1.19 million jobs over the past six months, accounting for 63% of all private-sector job gains during that time, up from 47% in the preceding year and a half."

    •  The Associated Press reports that "more Americans filed for jobless benefits last week, but layoffs remain historically low despite attempts by the Federal Reserve to cool the economy, and hiring, to bring down inflation.

    "Applications for jobless aid in the US for the week ending Feb. 4 rose by 13,000 last week to 196,000, from 183,000 the previous week, the Labor Department reported Thursday. It’s the fourth straight week claims were under 200,000.

    "Jobless claims generally serve as a proxy for layoffs, which have been relatively low since the pandemic wiped out millions of jobs in the spring of 2020."

    •  Bloomberg reports on a new Gallup survey saying that "half of Americans say they are financially worse off now than they were a year ago, the highest share since 2009."

    In addition, "An even greater portion of lower-income Americans said they were losing ground, according to the Jan. 2-22 survey. About 61% of those with a household income of less than $40,000 reported they were worse off, compared to 49% and 43% for middle- and high-income households respectively."

    The survey results point to rising inflation and interest rates and a declining stock market as being primarily responsible for the negative outlook.

    However, "Some 60% of Americans expect they will be better off a year from now. That share is largely the same across different income groups, and Gallup said the optimism is not unusual — Americans tend to expect their finances to improve rather than worsen."  Gallup also says that "to the extent financial expectations differ, it is because of politics. Whereas 70% of Democrats and 60% of independents believe their situation will be improved at this time next year, only 49% of Republicans agree."

    •  And finally, from the New York Times this morning:

    "Many economists and investors had a clear narrative coming into 2023: The Federal Reserve had spent months pushing borrowing costs rapidly higher in a bid to tame inflation, and those moves were expected to slow growth and the labor market so much that the economy would be at risk of plunging into a downturn.

    "But the recession calls are now getting a rethink.

    "Employers added more than half a million jobs in January, the housing market shows signs of stabilizing or even picking back up, and many Wall Street economists have marked down the odds of a downturn this year. After months of asking whether the Fed could pull off a soft landing in which the economy slows but does not plummet into a bruising recession, analysts are raising the possibility that it will not land at all — that growth will simply hold up.

    "Not every data point looks sunny: Manufacturing remains glum, consumer spending has been cracking, and some analysts still think a mild recession this year remains likely. But there have been enough surprises pointing to continued momentum that Fed officials themselves seem to see a better chance that the nation will avoid a painful downturn. That resilience could even be a problem.

    "While a gentle landing would be a welcome development, economists are beginning to ask whether growth and the job market will run too warm for inflation to slow as much as central bankers are hoping — eventually forcing the Fed to respond more aggressively."

    Clearly, all the charts and data points in the world don't matter if people are feeling crunched.  Whether or not we actually are in a recession really doesn't matter if people have a recessionary mindset.

    I hope that if there is a recession, there will be a soft landing.  Even more importantly, I hope that all the efforts to tame inflation will be successful, and that people can think about hopes and dreams and aspirations, not just survival.  Most important, I hope we can get past our societal need for immediate gratification … it took time and pandemic to put us where we are, and digging out of the hole is not an overnight process.

    Published on: February 10, 2023

    The Financial Times reports that since the Federal Trade Commission (FTC) announced a proposal that would ban all non-compete clauses, industry groups have been "inflamed," and the regulator "has received thousands of comments, with critics arguing the measure is too drastic and will increase business costs while putting trade secrets in jeopardy."

    FT notes that "non-compete agreements have become more pervasive in the US economy, experts say, amid little oversight and a drop in unionisation. Bosses can now obtain pre-packaged non-compete agreements online. Approximately one in five American workers … are now bound by non-competes, according to the FTC. These agreements bar workers from joining a competitor for a set period of time, within a geographical area, or both. They are often associated with high-wage executives with access to trade secrets that companies fear may leak upon their departure. But experts argue they have become widespread among low-wage workers who often have no access to sensitive information. These workers are also more likely to be locked into jobs because they lack the means to negotiate with employers, they are unable to move house, or they can’t afford to wait before starting a new job. The FTC argues non-competes harm competition in labour markets, discouraging businesses from competing for staff with attractive pay."

    KC's View:

    Confidentiality agreements ought to be enough to protect companies.

    I firmly believe that non-compete clauses are counter-productive in the long run.  They inhibit industries' growth by preventing companies' access to good people who can help them grow, which isn't good for innovation or for broader economic prosperity.  I hope the FTC is successful in getting rid of them, though I'm sure it will be a slog in which lawyers and lobbyists will do their best to screw up the works.

    Published on: February 10, 2023

    Consumer Reports is out with a new study about mercury in canned tuna fish, and the news isn't good.

    According to the report, "Consumer Reports tested five popular brands of canned tuna for mercury: Bumble Bee, Chicken of the Sea, StarKist, Safe Catch, and Wild Planet. We tested two varieties from each brand, albacore and light/skipjack. We found a wide range of mercury levels between types of tuna as well as among different brands.

    "Our testing found that albacore has much more mercury than light/skipjack tuna, regardless of the brand. The albacore cans had three times more mercury, on average, than light/skipjack. While mercury levels in our test were higher in albacore than in light tunas, some brands had a much larger variation than others.

    KC's View:

    I guess the good news is that I don't eat much canned tuna … just on those rare evenings when nobody else is at home, and I make myself pasta al tonno.  

    It is even better news for anyone ordering tuna fish sandwiches at Subway, since evidently they don't use real tuna fish anyway.

    Published on: February 10, 2023

    CNN  reports that a new "'Chick-fil-A Cauliflower Sandwich' is being tested in three cities beginning next week, marking the chicken chain’s first-ever plant-based sandwich. Imitating the chain’s signature fried chicken sandwiches, the new offering uses a 'tender filet cut' of cauliflower that’s marinated and breaded in the chain’s seasoning, then pressure cooked and served on a buttery bun with pickles."

    According to the story, "Chick-fil-A’s new sandwich goes on sale Monday for a limited time in three cities: Denver; Charleston, South Carolina; and the Greensboro-Triad region in North Carolina. The starting price is $6.59, but it varies by market, a company spokesperson told CNN."

    The piece points out that the sandwich is not vegan because milk and eggs are used, and may not satisfy vegetarians because it is not being prepared on a surface reserved for such items.

    KC's View:

    Interesting timing, since the reports all have been that the plant-based meat business is in decline, and a number of fast feeders, like McDonald's, have flirted with the category but not found enough support to make a commitment.  This, I suppose qualifies as a flirtation and not a commitment … and we'll see if Chick-fil-A has enough marketing muscle to grow the entry into something substantial.

    Published on: February 10, 2023

    •  From The Information:

    "Shopify announced a series of updates to its Shop app and launched a new 'one-page' checkout Thursday, changes that put the e-commerce software giant in more direct competition  with Amazon’s marketplace."

    Among the changes are "rolled out customization capabilities that let merchants add features like reviews in the app, as well as a cash-back rewards program that merchants can use to target shoppers with customized discounts.

    "It also said it would automatically add Shop Promise, Shopify’s 2-day delivery guarantee, for merchants using Shopify’s fulfillment services as it looks to fend off a challenge from Amazon’s Buy With Prime, which allows brands to offer 2-day shipping on their own sites using Amazon’s fulfillment capabilities."

    Published on: February 10, 2023

    •  BJ's Wholesale Club said this week that "it will continue its expansion of new club locations in the upcoming months, including opening its very first club in the state of Tennessee by the first half of the year.

    "Tennessee’s first-ever BJ’s Wholesale Club will be located 20 miles southeast of downtown Nashville in La Vergne, a city within Rutherford County.

    "In addition to the La Vergne opening, BJ’s plans to open clubs in Davenport, Florida and McDonough, Georgia, later this month."

    Published on: February 10, 2023

    Executive Suite is sponsored by Robin Russell Executive Search.

    •  The Raley’s Companies announced that Tiffanie Burkhalter, most recently the President of VSP Ventures, will join the retailer as Chief Financial Officer.

    •  Instacart announced the hiring of Tim Castelli, most recently Chief Revenue Officer of iHeartMedia's Multi-Platform Group, to be the company's new Vice President of Global Advertising Sales.

    Published on: February 10, 2023

    …will return next week.

    Published on: February 10, 2023

    Burt Bacharach, who was an enormous force in popular music during the latter half of the 20th century, has passed away.  He was 94.

    From the Variety obit:

    "His songs — many of them written with lyricist Hal David — became chart-topping successes, particularly in the hands of vocalist Dionne Warwick. Among ’60s songwriting duos, only Lennon-McCartney rivaled Bacharach-David in terms of commercial and artistic achievement. Bacharach collected six Grammys as a writer, arranger and performer from 1967-2005.

    "His music was ubiquitous on screens both big and small in the ’60s and ’70s, and he was recognized by the Academy Awards and Golden Globes for his work on 'Butch Cassidy and the Sundance Kid' (1969) and 'Arthur' (1981). He collected a 1971 Emmy for a TV recital of his work.

    "On Broadway, the 1968 Bacharach-David tuner 'Promises, Promises' rolled up 1,281 performances and garnered a Tony nomination as best musical."

    Published on: February 10, 2023

    "Shrinking," on Apple TV, is an interesting little television series that features a sly and sardonic supporting performance by no less than Harrison Ford - he may be starring in the fifth Indiana Jones movie, out later this year, but he isn't so big that he's unwilling to try the new experience of a TV sitcom.

    He's in good hands.  The series was created by Brett Goldstein and Bill Lawrence, who have helped make "Ted Lasso" such a success, and Jason Segel, who knows something about sitcoms from his time on "How I Met Your Mother."

    The premise is that a therapist, Jimmy Laird (Segal), has gone off the deep end after the death of his wife.  He's being a lousy doctor, a lousy father to daughter Alice, and is behaving in careless, dangerous ways.  His boss, Dr. Paul Rhoades (Ford) and co-worker  Gaby (Jessica Williams) are trying to be patient with him, but things get worse when Jimmy decides to stop following the traditional rules of therapy.  Instead, he starts telling patients what he really thinks and getting involved in their lives … and begins to see some success.

    I gather that there has been some controversy about "Shrinking," with some suggesting that it is a mistake to show therapists acting in such ways, but I think a lot of comedy and drama is built on people moving outside traditional boundaries - that's where the tension/jokes come from.

    "Shrinking" isn't a laugh riot, but it has a pleasant vibe and appealing characters - I find myself wanting to spend more time with them.  And Ford is a standout - it is amazing what an actor of his experience and skill can communicate with a frown, a wince, or a crooked grin.  He is a consummate pro, and the best thing in a good series that shows signs of improving with every episode.

    My wine of the week is the 2020 Fontanafredda Briccotondo Piemonte Barbera, a lovely Italian red that is slightly spicy, and perfect with Italian dishes that are not too heavy.

    That's it for this week.  Have a great weekend - enjoy the Super Bowl - and I'll see you Monday.