Newsletter: California Inc.: Fed expected to signal likelihood of September rate hike
Welcome to California Inc., the weekly newsletter of the L.A. Times Business Section.
I’m Business columnist David Lazarus, and here’s a rundown of upcoming stories this week and the highlights of last week.
We learned Friday that California’s economic engine quieted in June as employers reduced their payrolls by 1,400. It was the second month this year that the state lost jobs. The unemployment rate stayed flat at 4.7%, the lowest rate since November 2000. The state added jobs at a rate of 1.6% over the last 12 months, matching the growth rate in the nation as a whole.
LOOKING AHEAD
Financial reports: Several high-profile companies will be releasing quarterly earnings this week. Alphabet, the Mountain View, Calif.-based parent of Google, will reveal its second-quarter earnings on Monday. AT&T follows on Tuesday, Facebook on Wednesday and Amazon on Thursday. AT&T may be the most closely watched of the group because it’s in the process of buying media giant Time Warner.
Airfares: The Bureau of Transportation Statistics on Tuesday will release statistics on airfares for U.S. carriers from January to March. The previous report showed that fares have declined for the last two years, though airlines have piled on fees for baggage and other services once included in the ticket price.
Interest rates: On Wednesday, Federal Reserve monetary policymakers are expected to hold their key short-term interest rate steady after a two-day meeting. But they could signal if a rate hike is coming in September. In June, the Fed nudged its benchmark rate up for the third time in six months. In their forecasts, Fed officials have signaled that another small rate increase is coming this year.
Economic stats: Data on jobless benefits claims will be released by the Labor Department on Thursday, along with durable goods orders from the Commerce Department. On Friday, Commerce returns with its estimate of second-quarter GDP, which analysts are figuring will show growth at a 2.8% annual rate
New movies: Arriving in theaters on Friday is Al Gore’s new documentary “An Inconvenient Sequel.” The movie brings us up to speed on where the battle against climate change stands more than a decade after his Oscar-winning documentary “An Inconvenient Truth.” Also premiering Friday is “Atomic Blonde,” a cool-looking action film starring Charlize Theron as a highly skilled assassin.
THE AGENDA
Monday’s Business section examines how billionaire investor Warren Buffett is steadily building an energy powerhouse. Buffett’s Berkshire Hathaway energy subsidiary has gobbled up utilities, natural gas pipelines and clean energy production such as Southern California’s abundant geothermal resources. The latest move by Berkshire Hathaway Energy is the planned $9-billion purchase of Dallas, Texas-based Oncor, a regulated electricity service provider with 10 million customers.
STORY LINES
Here are some of the other stories that ran in the Times Business section in recent days that we’re continuing to follow:
Robot pickers: The $47-billion agriculture industry is trying to bring technological innovation up to warp speed before it runs out of low-wage immigrant workers. California will have to remake its fields like it did its factories, with more machines and better-educated workers to labor beside them, or risk losing entire crops, economists say.
Healthcare bill: The revised plan cooked up by GOP leaders aimed at securing the votes of wobbling Republican senators would nearly double the number of people without health coverage over the next decade, to 22 million, according to an analysis by the Congressional Budget Office. And it would increase costs for millions of sick and elderly Americans, the CBO says.
Trump effect: Since Donald Trump entered the presidential race in June 2015, revenue from greens fees at the Trump National Golf Club in Rancho Palos Verdes has dropped 13%, according to figures from the city government. Charity golf tournaments, another core piece of the club’s business, also have moved away. ESPN, the L.A. Galaxy soccer team and the L.A. Unified School District all have pulled their business.
Vehicle subsidies: Over seven years, California has spent $430 million on low-emission vehicle subsidies to help lower the cost for car buyers. Now the state Legislature is looking to extend that by another seven years, but with a price tag of $3 billion. Assembly Bill 1184 is being slammed for leaving basic questions unanswered, including the biggest one: Where would the money come from?
Arbitration rule: Republican lawmakers in the House and Senate have introduced bills calling for the repeal of a just-announced regulation that would make it easier for consumers to bring class-action lawsuits against banks. The rule unveiled last week by the Consumer Financial Protection Bureau would ban banks and other financial institutions from using arbitration clauses to block customers from bringing or joining class-action suits.
WHAT WE’RE READING
And some recent stories from other publications that caught our eye:
The corner office: The New York Times examines why women aren’t CEOs, according to women who almost made it. “What their stories show is that in business, as in politics, women who aspire to power evoke far more resistance, both overt and subtle, than they expected would be the case by now,” Susan Chira writes.
Trouble with tariffs: Many economists agree that the U.S. faces unfair competition and artificially low prices that have damaged the domestic steel industry, Annie Lowrey reports in the Atlantic. “But they don’t agree that a tariff is the right approach for addressing the problem. They argue that tariffs could backfire, hurting American businesses and workers without doing much to revive the Rust Belt.”
Tunnel vision: Wired’s Aarian Marshall takes note of Elon Musk saying he received “verbal government approval” to build the world’s longest tunnel and run his proposed Hyperloop from New York to Washington D.C. “Bad news, Elon, my friend: The White House doesn’t have much power when it comes to rubber stamping gigantic, multi-state infrastructure projects.”
Basic income: Fast Company asks if Hawaii could be the first state to offer residents a basic income. “For the first time, a state has declared that everyone deserves basic financial security,” says the lawmaker who sponsored the measure.
Great outdoors: Utah’s Zion National Park, which welcomed 4.3 million visitors last year, is weighing a reservation-only system for people who want to explore its main canyon — a first for a U.S. national park, says Popular Mechanics. People who haven’t made a reservation online in advance could pay an entrance fee and drive through the park, but they couldn’t stop to hike or picnic.
SPARE CHANGE
The average Tour de France rider burns through 6,000 calories a day. What’s consuming that much chow feel like? the Wall Street Journal’s Joshua Robinson gave it a go, and chronicled the culinary adventure in this video. My stomach hurt just watching it.
For the latest money news, go to www.latimes.com/business. Mad props to Scott J. Wilson for helping put this thing together.
Until next time, I’ll see you in the Business section.
