🐂 80 looks good

Markets

Stocks extended their decline in September, with a particular impact on tech firms, as investors expressed concern over the potential for the Federal Reserve to increase interest rates due to rising prices in both manufacturing and services sectors. Meme stocks had a varied performance, with AMC reaching an all-time low following its announcement of a new share sale plan, while GameStop saw after-hours gains due to stronger-than-anticipated sales in the previous quarter.

Why Higher Unemployment Is Good News Now

Rarely should we find cause for celebration in the context of increasing unemployment, but this is one of those exceptional instances.

The recent news that the unemployment rate climbed to 3.8% in August, marking an 18-month high, represents one of several indicators pointing to a significant softening of the labor market. This development plays a crucial role in the Federal Reserve's efforts to bring inflation down to its target of 2% and maintain stability. While it doesn't guarantee the avoidance of a recession, it does contribute positively.

Why does the state of the labor market hold such immense importance? Especially when inflation has already shown signs of improvement without a weakening labor market?

The key distinction lies in the differentiation between headline and underlying inflation. Headline inflation, the publicly reported increase in prices, surged from under 2% in early 2021 to 9.1% in June 2022 due to various factors, including disrupted supply chains, increased purchases of goods driven by stimulus measures and lockdowns, and escalating oil prices following Russia's invasion of Ukraine. Subsequently, it dropped to below 4% this year, influenced by declining oil prices, reduced airfare costs, a slowdown in rent hikes, and more affordable health insurance.

The critical question is: What is the state of underlying inflation, which represents the rate once all these unique factors have dissipated? This largely hinges on the equilibrium between overall supply and demand, with the labor market serving as the most reliable indicator. In simpler terms, even if inflation manages to decrease to 2%, it will not remain at that level if the labor market is so tight that wages rise at a pace incompatible with maintaining 2% inflation.

Workplace

The U.S. hit the smallest-ever workplace gender gap

Attention: Remarkable progress has been made by working women, and those with young children are at the forefront of this historic change.

Based on the most recent data from the Bureau of Labor Statistics...

As of August, workforce participation rates stood at 57.7% for women and 68.2% for men. This 10.5 percentage-point difference represents the narrowest gender gap ever recorded.

In the realm of full-time work, the gender pay gap narrowed in Q2 to 16 cents, meaning women now earn 84 cents for every dollar men make. This marks the smallest disparity on record, although it still has room for improvement compared to the 20 cents difference observed in 2002.

These advancements are primarily driven by women aged 25 to 54, whose labor force participation rates are at an all-time high and are surpassing men's post-pandemic work rebounds. Notably, mothers with children under the age of five have seen the most significant increases in workforce participation, exceeding their 2019 levels, as reported by the Brookings Institution.

However, there is cause for concern. Many companies are considering a return to in-person work arrangements, which could jeopardize the remote work flexibility that allowed numerous mothers to balance their jobs while caring for their children at home. Coupled with the impending conclusion of pandemic-related childcare assistance, the progress made by working women may stagnate or even regress.

A looming issue is the potential closure of more than 70,000 struggling daycare programs once federal aid stops at the end of the month. This could leave approximately 3.2 million children's parents in a difficult position, with mothers typically bearing a greater share of childcare responsibilities. Experts worry that the widespread shutdown of daycare centers may lead to a decline in women's participation in the workforce.

The consequences of a mass exodus of working mothers could include exacerbating labor shortages, causing each U.S. state to lose an estimated $10.6 billion annually in tax and business revenue, and resulting in families earning roughly $9 billion less each year, according to estimates from the Century Foundation, a nonpartisan think tank.

Politics

Biden admin moves to block drilling on millions of wild Alaskan acres.

The Interior Department has unveiled regulatory proposals that, if enacted, would prohibit new oil and gas drilling across over 40% of the National Petroleum Reserve in Alaska. Additionally, these regulations would nullify leases granted during the Trump administration that permitted drilling in the Arctic National Wildlife Refuge. Notably, the proposal does not affect the recent approval of the $8 billion Willow oil project in the same Alaskan wilderness, a decision that drew criticism from environmental organizations and placed President Biden in a controversial position. It is expected that if these new restrictions are finalized, fossil fuel companies may initiate legal challenges in an attempt to prevent their implementation.

Auto

Your car knows what you did last year

It appears that your automobile might be listening in on you. According to a recent report from the nonprofit Mozilla Foundation, cars have the least favorable privacy policies among all product categories studied, surpassing even devices like Google Nest or Apple Watches.

Unless you happen to be driving a vintage '67 Chevy, it's likely that your vehicle poses a privacy risk. Mozilla's analysis revealed that none of the 25 car brands assessed, including Audi, Toyota, Mercedes-Benz, and Ford, met basic privacy standards.

What this implies is that your car and its associated services, such as GPS or satellite radio, have the potential to gather various types of data, including your contact information, demographic details, immigration status, and any other personal inferences that the systems can draw from your travel patterns.

An unsettling revelation was made by Nissan, acknowledging that their vehicles collect data concerning drivers' personal lives, although they did not specify the nature of this data or how it is obtained.

When it comes to privacy, Tesla ranked at the bottom among car brands. (Remember the incident involving a Tesla that was shipped to Ukraine but remained connected to CNBC Executive Editor Jay Yarow's Spotify account?)

Here's the fine print: Most major automakers' privacy policies lack an opt-out option and fail to provide data encryption. None of the U.S. automakers offer a method for completely erasing your information, and a staggering 19 car companies explicitly state that they have the authority to sell your data to third-party brokers, marketers, or dealerships. You can check your specific car brand's policy here.

Entertainment

The new Rolling Stones album makes 80 look good

After nearly two decades, the Rolling Stones are set to release a new original album next month, and if the recently unveiled single is any indication, the band's iconic frontman, Mick Jagger, who is now in his eighties, is as vibrant as ever.

Mick Jagger, Keith Richards, and Ronnie Wood introduced their upcoming album, "Hackney Diamonds," in London, along with their latest song, "Angry." Despite being 80, 79, and 76 years old, respectively, the Rolling Stones serve as a testament to the fact that the workforce is aging more gracefully than one might expect.

Recent data from the Census Bureau reveals that in the previous decade, the number of Americans over the age of 80 who were still working increased by 18%, reaching a total of 650,000 individuals.

The Bureau of Labor Statistics anticipates that by 2030, there will be twice as many workers aged 75 and older compared to 2020, partially due to the aging baby boomer generation.

Retirement seems out of the question for many, including Ronnie Wood, who mentioned that hanging up their musical instruments would be "impossible" because "you've got to keep playing." This sentiment is echoed not only by artists like Willie Nelson (90), Bob Dylan (82), and Smokey Robinson (83), who continue to tour, but also by political leaders such as President Joe Biden (80) and Mitch McConnell (81), as well as business magnates like Warren Buffett, who recently celebrated his 93rd birthday.

Mark your calendars for the release of "Hackney Diamonds" on October 20, which will include collaborations with artists like Lady Gaga and Stevie Wonder, offering a fresh take on the enduring spirit of rock and roll.