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Hey friend - Make sure to catch up with our Weekly Scoop, and don’t miss our Explained: Are billionaires good for the economy [Part 2] - how do they avoid taxes?
Here’s what you need to know today…
Big Picture
Unemployment is at historic lows.
Consumers are feeling way better about the economy this month.
Rents are starting to get a little cheaper.
The Market: ⬆️ +0.4%
S&P 500: 4,622.44
1Mo: +5% | 1Yr: +16% | 5Yr: +78%
The market continued its hot run this week, reaching the highest level since March 2022. Investors will be closely watching tomorrow's inflation report with hopes that prices keep cooling.
Unemployment is still at historic lows. The Labor Department reported employers added 199,000 more jobs last month, up 50,000 from October. While hiring has slowed in recent months, it’s still stronger than the 150,000 new jobs per month rate that economists consider normal. The unemployment rate declined slightly to 3.7% and remained near record lows. The decline in the unemployment rate was driven by more people entering the workforce, boosting the participation rate to 62.8%. Hourly wages rose by 0.4% for the month and 4% from a year ago. We’ll determine whether that’s keeping up with living costs in tomorrow’s inflation report.
Americans are feeling more upbeat about the economy. The University of Michigan’s Consumer Sentiment Index jumped to a four-month high in December, driven by lower concerns about inflation. This sentiment was echoed in a similar survey conducted by the New York Fed, where consumers expect the cost of living to go up by only 3.4% over the next year, the lowest projection in two years. Consumer sentiment powers the economy, and inflation expectations are important because they can become self-fulfilling.
After years of steep price increases, renters have earned a reprieve. Landlords have been offering more concessions to fill vacancies. Many developers overbuilt rental properties to meet demand after the pandemic and have failed to occupy them with tenants. While rents are not declining significantly, landlords are providing incentives such as a month of free rent, fee reductions, and even lawn care. According to data from Zillow, about one-third of apartment and rental listings in October included some type of concession, the highest rate in almost three years.
🏠Keep this in mind for rental negotiations. If they’re not budging on price, ask for free months, smaller security deposits, free services, or more flexible termination terms.
How are you feeling about the economy? |
Company Scoops 🗣️🌎💰
đź’ˇAct like a boardmember and judge how companies behave. Engaging helps build your financial confidence and hold corporations accountable.
 Disney | Gender Pay Gap Disney will have to disprove claims of a decade of pay discrimination against women after a California judge approved thousands of employees to sue as a group. The entertainment giant disputes the claims of systemic bias. |
 Alphabet | Altered Hype Video Google faced criticism for misleading users about the capabilities of its new artificial intelligence platform, Gemini, in a promotional video. It's the tech giant's second fumbled launch this year, trying to catch up to OpenAI's ChatGPT. |
 Macy's | Fashionable Acquisition An investment group offered to buy Macy's for close to $6B, believing the struggling retailer is undervalued by the market despite declining sales. The retailer has hundreds of stores globally and owns brands like Bloomingdale’s. |
 Microsoft | First Union Contract Microsoft has reached a deal with its video game staff regarding treatment and protection around integrating artificial intelligence. Microsoft's gaming staff voted to form the company's first labor union earlier this year. |
 Starbucks | Reversing Course Starbucks has offered to resume bargaining with its unionized workers to improve both pay and working conditions. The coffee retailer has battled against the unionization of over 9,000 employees across 360 stores over the past two years. |
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Inside Scoop 🤓
What is Labor Force Participation?
The unemployment rate and the labor force participation rate are two key metrics policymakers track to understand the state of the jobs market. The labor force is everyone who is defined as employed or unemployed. The participation rate is that number divided by the whole working-age population.
The most important part to understand is that the government only defines those who have actively looked for a job in the past four weeks as unemployed. The unemployment rate does not track those who have stopped looking for a job, like discouraged workers or someone who stopped working to care for their children or elderly parents. So, while a declining unemployment rate sounds good, if paired with a declining participation rate, it might indicate structural problems keeping people from working.
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