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- Thursday's Scoop: Optimistic☀️
Thursday's Scoop: Optimistic☀️
WWE sex trafficking & Walmart union busting
Scoops Team
January 25, 2024
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Here’s what you need to know today…
Big Picture
The economy is doing even better than anyone expected.
Inflation is back to the normal pace policymakers have been aiming for.
Layoffs picked up last week.
The Market: ⬆️ +0.5%
S&P 500: 4,894.16
1Mo: +3% | 1Yr: +21% | 5Yr: +81%
The market continued its new record rally today as investors received ideal economic data - more robust growth with less inflation.
The US economy is doing well, even if it might not feel like it. The Commerce Department reported real Gross Domestic Product (GDP) grew at a 3.3% annualized rate in the final three months of the year, down from 4.9% in the third quarter but way better than economists predicted. Americans spent a lot more, and disposable income shot up, even after accounting for inflation and taxes. Businesses exported and invested more, and the government spent more.
Inflation seems to be officially under control for now. Policymakers’ preferred inflation gauge, the Personal Consumption Expenditures (PCE) price index, increased at an annualized rate of only 1.7% during the fourth quarter, down from 2.6% in the third quarter. Even excluding volatile food and energy prices, the core PCE index rose only 2%. Policymakers have been making borrowing more expensive to slow spending and business activity to slow the economy to stop living costs from rising so quickly. Their target inflation rate is 2%. So, the Federal Reserve is pumped to see inflation under control without too much damage to the economy.
Layoffs are picking up. Headcount reduction announcements across industries from Big Tech to Levi’s have been making headlines. The Labor Department reported initial unemployment claims jumped last week to 214,000. Layoff rates and unemployment are still very low. The week before was the fewest layoffs in nearly a year and a half.
How are you feeling about the economy? |
Company Scoops 🗣️🌎💰
💡Join the board at America’s biggest companies. Vote and judge their decisions.
 TKO Group | Abuse Scandal WWE Chairman Vince McMahon has been accused of sex trafficking, abuse, and harassment months after a federal probe into how he paid millions to silence victims of alleged sexual misconduct. The wrestling company merged last year with mixed martial arts company UFC to become TKO. |
 Walmart | Union Busting Regulators accused Walmart of illegally interfering in employees' efforts to organize to collectively bargain for better conditions after 21 complaints of labor law violations. America's biggest employer has avoided unionization for decades. |
 Comcast | New Media Comcast posted record revenue last year, took #1 in the global box office, lost fewer broadband customers than expected, and significantly grew Peacock streaming subscribers and revenue. Peacock drew 23M viewers to its NFL playoff livestream. |
 General Motors | Fuel Cells General Motors and Honda have started producing hydrogen fuel cells in a joint factory in Michigan, aiming to reduce dependence on diesel for heavy trucks and equipment. Hydrogen fuel cells work like a battery and emit only water vapor. |
 Levi Strauss | Tough Times Levi Strauss expects to lay off up to 15% of its workforce over the next few months as it looks to reduce its costs. The denim giant's sales recovered over the holidays, but profits fell considerably in 2023. |
(These links only work for 24 hours while the story is live.)
Inside Scoop 🤓
What is GDP, and why do we care?
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 (+3.3%), 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 (+0.8%) 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.
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