Week of March 6th, 2023

Econ Extra Credit newsletter #141

Its collapse could give us a look at the inner workings of start-up finance.

With 1 billion possible combinations, we still have decades before they’re used up.

Growth in the number of people looking for work means the unemployment rate is rising for the right reasons, one economist says.

Annie Lang-Hartman, owner of Wild Lettie, just signed the lease on a new location, hoping to expand her product offerings.

The swift and chaotic failure of SVB left CEOs and investors unable to access their money. Should we be worried about contagion?

Anti-money-laundering campaigners say that a recent decision by the European Court of Justice is a blow against financial transparency.

Today, we’ll take a closer look at the first FDIC-backed bank failure since 2020. Plus, luxury office buildings face a hard time.

The market for skyscrapers with great views and lush amenities is softening.

The bank’s failure arrived with incredible speed, with some industry analysts on Friday suggesting it was still likely a wise investment.

The budget is a policy document, but this one’s also a campaign document.

The much-anticipated February jobs report is out, and it’s a harder one to dissect than last month’s — job gains exceeded expectations, but the unemployment rate ticked up. Christopher Low, chief economist at FHN Financial, gives us some insight. President Biden released his budget request yesterday, which could serve as a policy preview for a potential 2024 reelection campaign. And, we take a look at what big players in the energy industry are talking about at a big conference going on in Houston right now. 

January’s outsized 517,000 payroll gain was well above expectations and sparked fears of more aggressive rate hikes by the Fed.

Employers added a higher-than-expected 311,000 jobs, while unemployment rose from 3.4% to 3.6%.

Access to energy when it’s most needed seemed to be on everyone’s mind at CERAWeek in Houston, research fellow Andy Uhler says.

The image of a person jumping between railcars and transient living may evoke images of old 20th-century films like “The Outsiders,” but a subculture of modern rail riding is going strong today. We spoke with Danelle Morton, host of the new podcast “City of the Rails,” which delves into this unseen world. A look at why some bad news in the banking sector caused a stock selloff in that area. And, a preview of today’s much-anticipated jobs report. 

From the BBC World Service: Could the UK/France summit signal future post-Brexit cooperation on issues like immigration and trade? We talked to two business owners — one British and one French — about what they thought about the talks. The United Nations is trying to avert an environmental disaster off the coast of Yemen. And, The Banshees of Inisherin could win some Oscars this weekend — but who’s behind the stunning knitwear?

The latest disruption to the film industry is artificial intelligence. Bard College’s Joshua Glick says that may not be a bad thing.

Cue Beyoncé.

Despite eight interest rate hikes in the past year, the economy refuses to cool down. Are the Federal Reserve’s tools getting rusty? Plus, what’s behind the climbing cost of Russian oil?

For Noir Lux Candle Bar, interest in off-site candle pouring events is waxing, not waning.

Many with serious gripes about goods or services post their complaints on social media, according to the National Customer Rage Survey.

Small independent processors in China are being joined by larger Chinese refiners, driving prices higher.

As the global supply chain smooths out its kinks, warehouse costs are top of mind for the Legacy Companies.

“It’s clear there have been some shifts in the economy that just make their policies less effective,” says Neil Irwin of Axios.

Some of the increase reflects growing economies in other countries. And it’s welcome news for U.S. factories, one economist says.

The mythical retirement scheme that’s known as a pension — most of which went away in the last half-century — could be on its way back in, thanks to acute labor shortages in the economy. Chris Farrell, Marketplace’s senior economics contributor, takes us through how competition might inspire employers to resurrect pensions. As we wait for the big jobs report that’s due out tomorrow, we check in with Diane Swonk about what the markets are expecting. And, a look at consumer debt at a time when inflation and high spending are driving up borrowing all over the place. 

Why defined pension plans could make a comeback in a tight labor market.

Different types of consumer debt saw a substantial rise in January, according to the Federal Reserve.

JPMorgan has opened a lawsuit against Jes Staley, a former top executive who was head of private banking at the company. We look into what’s behind the lawsuit, and how it revolves around Staley’s alleged ties to the late sexual predator Jeffrey Epstein. And, we speak to the owner of a Latin music-focused record shop in Los Angeles about his story and the broader vinyl revival, which has accelerated in recent years as new demographic groups hop on the trend.

From the BBC World Service: Amid Pakistan’s ongoing economic turmoil, Honda’s subsidiary in the country says it will shut down until the end of the month because it can’t source the parts it needs. Plus, the chip wars continue as the Netherlands – home to hi-tech supplier ASML – says it will impose new export controls on the grounds of national and international security. And, in Japan police are cracking down on a series of pranks that have caused shares at Japanese restaurants to plummet. It’s known as sushi terrorism – where pranksters tamper with food on conveyor belts found in sushi restaurants.

At Sonido del Valle in Boyle Heights, owner Rene Perez said Latin vinyl records are the main attraction, not just another section.

Also, how does Bing compare to the Siris and Alexas of the world?

Plus, a hot tip on how to save money on cold brew.

Thousands of people have been affected by the Norfolk Southern accident near East Palestine, Ohio, and the full scope of the disaster remains to be calculated.

“The Fiscal Ship” game demonstrates public policy trade-offs that go into government budgeting.

January was an outlier for jobs, spending and inflation — but can we rely on seasonally adjusted data when the past three Januarys have been so weird?

There are fewer job openings and fewer people are quitting jobs — signs that the Federal Reserve’s interest rate hikes are working as intended.

That’s how one economist described today’s job openings report. We’ll explore what it means for the Federal Reserve’s attempt to cool inflation. Plus, a private lender takes issue with the student loan payment pause.

Converting offices into apartments comes with challenges.

The fintech firm, which offers student loan refinancing, says the repayment freeze damages its bottom line. Here’s what that could mean for borrowers.

The Department of Justice has filed suit to halt the merger between JetBlue and budget carrier Spirit Airlines, which allegedly violates antitrust rules. The University of Michigan’s Erik Gordon joins us to break down the cases that will likely be argued by either side. Federal Reserve Chair Jerome Powell is back on Capitol Hill today to testify about the state of the economy, this time to the House of Representatives. And, a look at the latest jobs report from payroll processor ADP with Susan Schmidt, Head of Public Equity at the State of Wisconsin Investment Fund. 

Strong consumer spending and job gains so far in 2023 spur Fed Chair Powell to double down on rate hikes.

A tight labor market has helped low-income workers raise their wages, according to a new working paper.

Workers throughout the economy have seen a rise in bargaining power driven by labor shortages. But according to a new paper, it’s lower-income workers who’ve seen their wages rise the most, which translates into lower overall inequality. Fed Chair Jerome Powell spoke in front of the Senate Banking Committee yesterday, saying that the strength of the economy means rate hikes are likely to last longer to fight inflation. And, in honor of International Women’s Day, we spoke to Bridget Bodnar, co-host of Marketplace’s kids podcast Million Bazillion, about how her team approached teaching children about the gender wage gap. 

From the BBC World Service: Adidas is counting the cost of terminating its partnership with Kanye West, announcing the company could be forced to write off $500 million worth of inventory of his famous brand of Yeezy sneakers. They parted ways with the musician last year due to anti-Semitic comments West made on social media — analyst Russ Mould speaks to us about the impact on the German sportswear giant. Plus we’re in the Philippines as the government looks to ban their most polluting form of public transport – the Jeepney. And, we celebrate International Women’s Day with some extraordinary achievers.

Clarkesworld, an online sci-fi and fantasy magazine, closed its submissions portal after a deluge of AI-generated “stories.” Its editor says humans might not be ready for this technology.

We’ll get into the stories behind everyday foods and their place in the American economy.

Businesses can prevent layoffs by accepting lower profit margins, but will they? Plus, survey fatigue is impacting key economic indicators.

About 2.2 million more people are retired than the Federal Reserve had expected.

Just four companies control more than 60% of the global market.

Theoretically, yes.

Last month, Mara Herbkersman and Emily Biealgus opened The Ruby Fruit, a restaurant and wine bar.

Response rates to The Bureau of Labor Statistics’ JOLTS report are continuing to waver according to Bloomberg reporter, Reade Pickert.

The labor market in today’s economy, at first glance, seemingly defies logical explanation — the number of people seeking unemployment benefits has fallen as companies lay off lots of staff. We look into why the data looks how it does. A bipartisan bill in Congress is looking to lay the groundwork to ban TikTok in the U.S. The rules governing the classification of Community Development Financial Institutions are about to go under a revamp by the Treasury Department. And, the BBC reports on South Africa’s new electricity minister, whose appointment comes as the country’s main utility provider Eskom undergoes a severe crisis. 

The Treasury is changing the certification process for the first time in more than two and a half decades.

Many workers laid off from tech jobs are finding new ones fast.

Generative AI programs like Microsoft’s ChatGPT have taken the world by storm this year. We talked to Marketplace Tech host Meghan McCarty Carino about the nature of these platforms and how that has opened up a debate over who’s legally liable for the content AI systems produce. There’s a bipartisan push in Congress to restrict TikTok in the United States that goes further than the current ban prohibiting the app on government devices. And, a look at the findings in the first report from the U.S. Department of Agriculture’s Equity Commission.

The proposals look to rectify a history of discrimination faced by farmers belonging to minority groups.

From the BBC World Service: China’s leader Xi Jinping has rebuked the US, blaming it for trying to “contain, “encircle” and “suppress” his country. Richard McGregor, a Senior Fellow for East Asia at the Lowy Institute in Sydney speaks to us about the latest developments. Plus, France endures its biggest day of strikes over the retirement age, and we hear about the laws the British government is trying to pass to stem the flow of migrants crossing the English channel.

We’re breaking down the wage gap.

Prolonged exposure to loud noises can have serious health effects. But one researcher is skeptical about surveillance as a solution.

All aboard the history train!

The global economy could get a $7-trillion-a-year boost if more women were in the workforce, a report finds. Plus, explaining the economic history of racism to young readers.

Fed Chair Jerome Powell testifies on Capitol Hill tomorrow and Wednesday. President Biden is set to release a budget outline on Thursday, and we get February jobs numbers this Friday.

Heather McGhee’s new version of “The Sum of Us” urges transcending racial barriers and creating “common solutions to our common problems.”

Manufacturers are ramping up production of induction stoves and cooktops, which use electromagnetism to heat pots and pans. But there’s a reason the technology hasn’t caught on.

A new study finds that more women in the workforce — and fewer roadblocks to their success — could grow the global economy significantly by boosting productivity.

Trucking is an increasingly immigrant-driven industry as U.S.-born drivers retire and demand to move freight remains high.

Between inflation and a possibly looming recession, some big box stores are on edge.

It’s set to be a big week for watchers of the larger U.S. economy — Fed Chair Jerome Powell will testify to Congress on Tuesday and Wednesday, while the February jobs report comes out Friday. We spoke with economist Julia Coronado about what we should expect in the week ahead. Vehicles, a good that enjoyed high demand and high prices during the peak of the pandemic, are now in lower demand partly because of elevated interest rates and inflation-weary consumers. And, a look at why some big cities in France are banning electronic billboards. 

A number of French cities are going to war against street advertising which they say is ugly, anti-ecological and anti-social. 

There are plenty of cars on lots, unlike a year ago. It’s buyers who are in short supply.

Resort towns across the Western U.S. are seeing record-breaking prices for housing amid a wave of buying by ultra-rich people. The trend is fueling a housing crisis for local workers, who often find themselves being priced out of housing. New legislation in the Senate is looking to restrict senior members of the executive branch from trading stocks. And, retailers are saying that inflation-wary consumers are prioritizing value over luxury…and stores are shifting gears to accommodate. 

More wealthy people are moving to mountain communities, pushing up home values and pushing out some local workers.

From the BBC World Service: BBC’s China Correspondent Stephen McDonnell reports from Beijing as China says it will increase military spending by more than 7% this year, while warning of “escalating” threats. South Korea tries to build bridges with Japan by picking up the cost of World War II reparations, plus, it’s one month to the day since the earthquakes devastated parts of Turkey and Syria, we hear from the BBC’s Correspondent Anna Foster on the ground.

Amazon and Walmart allow any social media user to become content creators for their brands. Experts say it has democratized access to “influencer” status.