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- Thursday's Scoop: Coasting 🌤️
Thursday's Scoop: Coasting 🌤️
Ford reverses diversity efforts & Uber goes more autonomous
Scoops Team
August 29, 2024
Hey friends - enjoy the long weekend, and try not to miss us too much.
Insiders, look out for the Weekly Scoop tomorrow.
Notice: There will be no scoops during the weeks of Labor Day, the 9th and 16th, as I’ll be traveling for my honeymoon. If you need anything or have any questions about what’s happening in the world, don’t hesitate to email [email protected].
Last chance to sign up for our sustainability competition with Future to win $500!
Here’s what you need to know today to inform your work, spending, and investments:
🌎 Big picture
Layoffs are still low, but it’s getting harder to find a job.
The US economy grew faster than expected last quarter.
Businesses ramped up imports in July.
How are you feeling about the economy? |
💼Work trends
Unemployment Rate: 4.3%
Relatively low, but up from record lows.
Layoffs are still low, but it’s getting harder to find a job. The Labor Department reported that initial jobless claims fell by 2,000 to 231,000 last week, a relatively low level. However, continuing claims, those requesting unemployment benefits for consecutive weeks, increased to levels last seen in 2021. This usually indicates that it’s getting harder to find new jobs. While hiring has slowed substantially, employers haven’t shifted significantly toward staff cuts.
The US economy grew faster than expected in the second quarter, driven by surprisingly strong spending. The Commerce Department revised its estimate of gross domestic product (GDP) growth to 3.0% from the previously reported 2.8%. This marks a significant acceleration from the 1.4% growth rate in the first quarter. Consumer spending, which powers over two-thirds of the economy, was revised upward to a 2.9% growth rate, showing that Americans continued to spend despite higher living costs. Additionally, corporate profits rebounded, with a $57.6 billion increase. Many other data points from July have pointed toward resilient business activity, with increased consumer spending and rising corporate profits.
🤓 Inside Scoop: What is GDP, and why does it matter?
Gross Domestic Product (GDP) is how we track how much stuff the economy is producing. The actual number (~$28 trillion) doesn't matter as much as the direction and magnitude. We track the growth rate of real GDP (inflation-adjusted) to know whether the economy is expanding or contracting from the previous quarter.
The reporting style can be a bit confusing. The main number you hear will be an annualized growth rate (+3.0%), representing how much the GDP would increase/decrease if the economy hypothetically grew at that rate for an entire year. It's different from how much our production increased/decreased quarter-to-quarter (+0.7%) and not representative of the growth/decline over the past year (+3.1%). Annualizing the past quarter’s change makes the backward-looking number a little more forward-looking.
US businesses ramped up their imports last month. The Commerce Department reported the US trade deficit (exports minus imports) reached its widest level in more than two years in July, driven mainly by a surge in imports, particularly in consumer goods, autos, and semiconductors. Exports were about the same as the month before. Retailers have mentioned plans to stock their inventories for the holiday season earlier this year, possibly bringing forward some of the purchases. It could also be driven by concerns about rising trade tariffs, with companies accelerating their purchases to avoid higher taxes.
📈Investment trends
The Market: ⬇️ -0.004%
S&P 500: 5,591.96
1Mo: +2% | 1Yr: +24% | 5Yr: +91%
The market didn’t move much on Thursday as investors started signing off for the long weekend. The quarterly update from AI tech giant Nvidia was strong enough to maintain optimism about continued AI-fueled growth in the tech sector. Low layoff rates steadied confidence in the broader economy. The next major events investors will watch for are the August jobs report, the August inflation report, and the Federal Reserve policy meeting. The Fed is expected to start lowering borrowing costs for the first time in years.
🏭 Companies worth watching
👍👎 APPROVAL RATINGS
Join the board at America’s biggest companies. Vote and judge their decisions. (+2 pts)
 Ford | Diversity Downshift Ford will scale back some diversity, equity, and inclusion efforts, stop using minority quotas, and no longer participate in certain workplace equality surveys. The automaker’s decision reflects a broader trend of companies reassessing their diversity initiatives amid changing social and political pressures.
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💭Broader perspectives… (+2 pts)
Is it a political statement to support diversity? |
 Hilton | Hotel Hustle Hilton is seizing an opportunity in China's struggling real estate market by converting empty office buildings into hotels as domestic travel booms. The hotel giant plans to add about 100 new locations, betting on China's rising middle class to fuel its regional growth.
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 Dollar General | Discount Trouble Dollar General cut its yearly sales and profit forecasts, facing tough competition from larger rivals for budget-conscious shoppers. The discount retailer, struggling to maintain its market share, plans to increase promotions to regain foot traffic.
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 Best Buy | Tighter Budgets Best Buy increased its profit forecast as cost-cutting measures, including layoffs and a refreshed membership program, helped the electronics retailer offset a shopping slowdown. The tech retailer's sales dropped less than expected last quarter as shoppers embraced high-priced AI-powered products and back-to-school tech upgrades.
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 Uber | More Robo Rides Uber invested in UK-based Wayve, a self-driving startup, to enhance its self-driving tech with plans to integrate Wayve’s AI into vehicles on its platform. The ride-hailing giant also recently announced partnerships with the autonomous vehicle divisions at GM and Alphabet, enhancing its positioning at the forefront of autonomous transportation.
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🛠️ Recommended resources (+2pts)
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