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.
Traders return to business Monday after learning Friday that orders for long-lasting manufactured goods sank 6.8% in July, the biggest fall in nearly three years. Even so, manufacturers have rebounded from a slump in late 2015 and early 2016 caused by cutbacks in the energy industry and a strong dollar.
Cheaper food: The impact of Amazon’s purchase of Whole Foods Market will reach consumers Monday, when the high-end grocery chain begins cutting prices. Whole Foods will reduce prices on certain “bestselling staples,” including bananas, salmon and organic large brown eggs. It’s a striking shift in strategy for a supermarket chain that has been parodied as “Whole Paycheck.”
Housing prices: On Tuesday, Irvine-based real estate firm CoreLogic plans to release data on Southern California home prices and home sales for July. The housing market has been red hot lately, with prices surpassing bubble-era highs in many corners of the Southland. The report on July home sales will provide fresh evidence on whether the market remains strong or if buyers are finally starting to balk at high prices.
Economic report: On Friday, the Labor Department will release the latest jobs report. Analysts expect the economy will have added about 173,000 net new jobs in August, down from the previous month, with the unemployment rate holding steady at 4.3%. The economy is being bolstered by strong corporate earnings. The average earnings of S&P 500 companies rose 11% in the second quarter compared with a year earlier, the second consecutive quarter of double-digit growth.
Fair start: The Los Angeles County Fair opens Friday, its first run since a new leader took over in January. Miguel Santana, former Los Angeles city administrative officer, stepped in as chief of the fair association amid concern about the organization overspending on salaries, failing to collect back rent and violations of health and safety laws. The fair runs through Sept. 24 at the Fairplex in Pomona. Last year, the event drew 1.32 million people.
Auto purchases: August car sales figures are due Friday. Sales are expected to be up a tad compared with the same month last year, thanks to heavy incentives as new models arrive. Last month’s report showed a decline in U.S. auto sales for the seventh month in a row. Dealers have increasingly been offering discounts to bring buyers in, especially for small and mid-size cars. Analysts say carmakers are likely to sell about 17 million vehicles or fewer this year compared with nearly 17.6 million in 2016.
Monday’s Business section notes that over seven years, California has spent $449 million on rebates to boost sales of zero-emission vehicles. So far, the subsidies haven’t moved the needle much. In 2016, only 75,000 of the 2 million or so cars sold in the state were pure-electric or plug-in hybrid. Now a bill that would sharply raise the consumer rebates is advancing in the Legislature.
Here are some of the other stories that ran in the Times Business section in recent days that we’re continuing to follow:
Yellen speaks: Federal Reserve Chairwoman Janet L. Yellen said that tough new regulations have made the financial system safer with little downside, a strong rebuttal of Republican criticisms that reforms have stunted economic growth. Yellen’s comments at the Federal Reserve Bank of Kansas City’s prestigious policy conference in Jackson Hole, Wyo., could hurt her chances of being renominated as the central bank’s chief.
Uber power struggle: Some of Uber’s biggest investors are sparring again, filing court documents in a tit-for-tat fight that could determine who wins control of the ride-hailing giant. First, Benchmark Capital filed documents brushing aside Uber co-founder Travis Kalanick’s response to a lawsuit brought against him by the powerhouse venture capital firm. That was followed by Uber investors Shervin Pishevar and Steve Russell intervening in the Benchmark lawsuit against Kalanick.
Actors union: SAG-AFTRA members elected incumbent President Gabrielle Carteris to a new two-year term following an acrimonious campaign in which rival factions engaged in name calling and social media attacks — with one side even threatening to lodge a federal complaint. Carteris received 14,674 votes, or a little more than 50% of the returned ballots. Esai Morales came in second with 8,145 votes.
Video company: Jukin Media, the company behind viral sensations such as Pizza Rat and Chewbacca Mask Lady, will nearly double its office space in Culver City to produce more original programming off its trove of user-generated video clips. The company, which buys the rights to amateur videos that are shared widely, expects to see a greater percentage of its business shift toward hosted shows that showcase those videos, not unlike an “America’s Funniest Home Videos,” but for the social media set.
New management: In a dramatic shake-up at the Los Angeles Times, the newspaper’s parent company installed new leadership. Ross Levinsohn, 54, a veteran media executive, was named publisher and chief executive of the 135-year-old news organization. Jim Kirk, 52, a former publisher and editor of the Chicago Sun-Times, was named interim executive editor. The moves followed the ouster of Davan Maharaj, who served as both editor and publisher of The Times, and three other top editors.
WHAT WE’RE READING
Some recent stories from other publications that caught our eye:
Bad bets: Energy traders figured they had a sure thing last week — surely, when the moon’s eclipse of the sun shut down earthbound solar panels, there would be a surge in demand for electricity from other sources, right? It didn’t work out that way, reports Bloomberg, and some traders lost big on their bets. They didn’t account for “irregular human-behavior patterns.” So many people were out looking at the eclipse that demand for electricity dropped.
Hide the bitcoin: Hackers have discovered that one of the most central elements of online security — the mobile phone number — is also one of the easiest to steal, says the New York Times. “A particularly concentrated wave of attacks has hit those with the most obviously valuable online accounts: virtual currency fanatics.”
Robot cars: The push by Elon Musk, CEO of Tesla, to produce self-driving cars is creating friction behind the scenes at the car company, reports the Wall Street Journal. The newspaper said some Tesla engineers and designers on the Autopilot team have complained about pressure to complete testing and get self-driving features into cars before they are fully proven. “In recent months, the team has lost at least 10 engineers and four top managers.”
Patenting pot: A shadowy company known as BioTech Institute LLC is maneuvering to dominate the marijuana industry, reports GQ. The company has registered three utility patents and is pursuing more, yet it’s hard to figure out who’s behind it. “BioTech Institute appeared to be following in the footsteps of Big Ag companies like Pioneer and Monsanto, which began accumulating utility patents on conventional crops in the 1980s, when patents on plants became legal.”
Baby bonding: California lawmakers are considering a plan to expand parental leave benefits to more mothers and fathers, reports the Orange County Register. Under federal and state law, parents who work at companies with 50 or more employees can take up to 12 weeks off after the birth of a child without risk of losing their jobs or health benefits. The new bill would expand those protections to 2.7 million more workers at smaller companies.
KFC loves to brag about its Original Recipe chicken, but with many young people ditching TV for video games, the restaurant chain has tweaked his training methods. It’s cooked up a virtual-reality video featuring a creepy, wheezing Col. Sanders teaching best frying practices, which players must master before moving on. “Until you learn to make my chicken right, you will not be allowed to leave!”
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.