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 lost 8,200 net jobs in August and the unemployment rate rose to 5.1% from 4.8% a month earlier. The drop in employment follows a robust July in which the Golden State gained the most jobs in more than a year: 84,500, revised up from a previous estimate of 82,600. August’s slide back was in large part driven by employers in the leisure and hospitality sector.
Moving on: The Federal Reserve is expected to announce Wednesday that it will begin slowly reducing the $4.5 trillion in assets it has on its balance sheet. Fed officials are trying to return to a more normal monetary policy after years of rock-bottom interest rates and a dramatic expansion of Fed assets that were designed to stimulate the economy during and after the Great Recession.
Jobless numbers: Weekly jobless claims will be released Thursday. For the week that ended Sept. 9, initial claims for jobless benefits fell 14,000 to a seasonally adjusted 284,000. But that number was still considered high and probably was skewed by job losses related to Hurricane Harvey, economists said. The new data will reflect the full effects of Hurricane Irma.
Lego’s latest: The latest in the Lego movie franchise hits theaters Friday when Warner Bros. releases “Ninjago,” which is expected to gross as much as $40 million in its opening weekend. The revenue comes at a key time for Lego Group, which has been through management upheaval in the last 18 months and recently announced it would cut 1,400 jobs. Two previous Lego movies have grossed nearly $800 million.
Border crossing: Thinking of driving to Mexico this weekend? Think again. The southbound San Ysidro border entrance into Tijuana will be closed for a 57-hour period — from 3 a.m. Saturday until noon Monday — as part of a plan to realign the southernmost portion of Interstate 5. The project will double the number of southbound vehicle lanes from five to 10, while adding eight more northbound vehicle-inspection lanes.
Protecting wildlife: Friday through Sunday, the San Diego Zoo will host Zoohackathon 2017, an event aimed at finding technological tools to combat illegal poaching of wild animals worldwide. The event brings together coders and computer specialists to create applications and systems that can identify trafficking and reduce demand for wildlife products. More than $1,000 in prizes will be awarded.
Chili’s Grill & Bar is going on a diet to fatten its sales. It’s slashing the number of items on its menu by 40% and focusing on serving up better burgers, fajitas and baby back ribs — the core items on its menu. And that’s the strategy of just one mid-priced U.S. restaurant chain in an entire sector struggling to find its way back to growth amid shifts in consumer tastes and dining habits.
Here are some of the other stories that ran in the Times Business section in recent days that we’re continuing to follow:
Equifax probe: The Federal Trade Commission said it is investigating the massive data breach at credit reporting firm Equifax, adding America’s top consumer watchdog to the chorus of federal lawmakers and regulators expressing alarm over the hacking of 143 million Americans’ personal data. Consumer advocates are calling on Equifax to provide free credit freezes along with monitoring of people’s credit files.
New iPhones: Apple announced not one but two new iPhones — a strategy that may confuse some customers but one that makes sense for a company reliant on its flagship gadget to generate revenue. Starting at $999, the iPhone X is the most expensive iPhone ever released. It’s $300 more than the other new release, the iPhone 8, which itself is more expensive than Apple’s previous highest starting price for a base model phone.
Profitable programs: Airline loyalty programs, which began nearly 40 years ago as a promotional gimmick, are becoming increasingly lucrative for carriers. The programs can bring in as much money as all those fees that passengers complain about, including charges for checked bags and onboard food and drinks. Some analysts estimate that as much as half of all airline profits come from frequent flier programs. But the programs are a growing source of frustration for airline passengers.
SoFi sayonara: Mike Cagney, the co-founder and chief executive of financial services start-up SoFi, stepped down from the company amid allegations that he fostered a culture at the company that enabled sexual harassment. The company’s executive chairman, Tom Hutton, will become interim CEO. “The business is strong, stable and well-positioned,” Hutton said in a statement.
Swiss accent: Blue Bottle Coffee, the Oakland-based coffee roaster and retailer known for its high-end specialty coffee, is now part of Swiss food giant Nestle. Blue Bottle will continue to operate as a stand-alone entity and the current management and employees will keep a minority stake and run the business. Founder James Freeman is to stay on as chief product officer and Bryan Meehan is to keep his chief executive role.
WHAT WE’RE READING
And some recent stories from other publications that caught our eye:
Insurance loophole: Hurricanes Harvey and Irma have exposed a gaping problem with the nation’s flood insurance system, reports Bloomberg. While properties with government-backed mortgages are supposed to have flood insurance, there’s no agency that actually enforces that requirement. “As climate change and coastal development increase the number of homes at risk, it’s becoming harder for the federal government to keep ignoring the problem.”
Warehouse brand: Costco’s in-house brand, Kirkland Signature, is not only a profitable arm of the company, it’s also a useful tool for pushing suppliers to lower their prices, reports the Wall Street Journal. If Costco can’t get the terms it wants from suppliers, it is often willing to make products itself under the Kirkland name. “The retailer has kept sales growing, in part by using Kirkland to pressure manufacturers to lower prices and bring products to shelves that can’t be purchased elsewhere.”
Graveyard shift: Working the night shift could put your health at risk, reports Popular Science. Trying to function in the darkest hours creates a conflict with our body’s natural circadian rhythms. “Nocturnal labor presents risks to roughly 15 million shift workers in the United States alone. Major industrial accidents, such as the meltdown at the Three Mile Island nuclear reactor in 1979, occur disproportionately in the dead hours before dawn.”
Immigration arrests: Two Motel 6 locations in Phoenix were regularly sharing guest information with Immigration and Customs Enforcement, reports Phoenix New Times. The newspaper reviewed court records and found at least 20 arrests by ICE at the two Motel 6s, which are both corporate-owned. Motel 6 said in a subsequent statement that its workers have been instructed to no longer share such info with federal authorities.
Uneasy access: In the wake of the Equifax data breach in the United States, Internet security expert Brian Krebs takes a look at the company’s operations in Argentina — and is shocked by what he discovers. “An online portal designed to let Equifax employees in Argentina manage credit report disputes from consumers in that country was wide open, protected by perhaps the most easy-to-guess password combination ever.”
Chicago public radio station WBEZ investigates a strange practice from the city’s past: requiring high school boys to swim naked, while girls were allowed to wear suits. “The search for answers revealed a lot about the limits of early 20th-century pool-filtration technology and the way American society’s attitudes have changed on personal hygiene, privacy, sexuality and gender.”
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.