Newsletter: California Inc.: State hopes for a fourth straight month of job gains
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.
The U.S. stock market is closed Monday for Martin Luther King Jr. Day. When trading resumes Tuesday, the retail sector should provide a strong tailwind. Retail sales rose 0.4% the final month of the year following a 0.9% increase in November. That means retail sales grew 4.2% in 2017, the most since 2014.
LOOKING AHEAD
Bad bags: Beginning Monday, two of the world’s largest airlines, American and Delta, will prohibit checked luggage with built-in batteries. The bags, recently introduced onto the market, have GPS trackers, automatic locks and other electronic features. The danger is that their lithium batteries can ignite a fire in the cargo hold of a plane.
Do-over: The Senate Banking Committee is expected for the second time to vote Wednesday to confirm Jerome Powell as the next chairman of the Federal Reserve. The panel approved the nomination 22 to 1 on Dec. 5, but the full Senate failed to take up the nomination before the end of the year so the committee has to vote again. Powell is expected to be confirmed by the Senate before the term of Chairwoman Janet Yellen expires Feb. 3.
Government shutdown: Once again, the clock is ticking toward a possible closure of the federal government if Congress can’t agree on a funding plan before the end of the day Friday. Though Republicans control Congress, Democrats are threatening to withhold crucial votes unless a deal is reached on DACA, the Obama-era program that protects undocumented immigrants brought here as children from immediate deportation.
Jobs numbers: December’s jobs figures for California will be released Friday, giving insight into the strength of the state’s economy. In November, the state added 47,400 net new jobs and the unemployment rate dropped from 4.9% in October to 4.6%, the lowest level in more than four decades. It was the third straight month of jobs being added after several months of alternating job losses and gains.
Out of Afghanistan: On Friday, Warner Bros. will release the Afghanistan War drama “12 Strong,” about the first Special Forces team deployed in the conflict after the Sept. 11 terrorist attacks. The studio is counting on “12 Strong” — produced by Jerry Bruckheimer and starring Thor himself (Chris Hemsworth) — to attract the crowds that turned out for other recent movies about wartime heroism, such as “Lone Survivor.”
THE AGENDA
Monday’s Business section takes a roll in the big pile of overseas cash held by U.S. companies. With the new U.S. tax law providing a much lower federal tax cost, many multinational companies are expected to repatriate a sizable chunk of the estimated $1.4 trillion abroad. But there’s speculation companies will use much of that cash to buy other companies, or for stock buybacks, higher dividends and debt repayment.
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:
Trickle down: Wal-Mart is raising its lowest U.S. wage to $11 an hour and will provide workers with a one-time cash bonus, saying the new tax law allowed the company to “accelerate” investment plans. The nation’s largest retailer also said it would expand workers’ maternity and parental leave benefits. The announcement came the same day the company abruptly closed 63 of its Sam’s Club warehouse stores.
James Franco: Five women accused actor and director James Franco of inappropriate or sexually exploitative conduct. Four of the women were his acting students and another regarded him as her mentor. Franco, who won a Golden Globe last week for his performance in “The Disaster Artist,” is the latest celebrity to get caught up in Hollywood’s sexual misconduct scandal. His attorney has disputed the allegations.
Tax savings: The GOP tax overhaul saved Wells Fargo more than $3 billion in the fourth quarter, but the San Francisco financial giant also set aside more than $3 billion to pay for litigation related to ongoing problems with its consumer businesses. The savings come from a reduction in the company’s expected future tax liabilities and are the result of the corporate tax rate being cut to 21% from 35%.
Nuclear winter: Diablo Canyon, the last remaining nuclear power plant in California, will begin shutting down operations in six years as part of a plan approved by state regulators. Pacific Gas & Electric said it would be uneconomical to operate the San Luis Obispo County plant because of changes in California’s power grid, including the growth of renewable energy sources and increased energy-efficiency measures.
Piracy suit: Major Hollywood studios, as well as Netflix and Amazon, are suing Dragon Media, a Carlsbad, Calif., firm that sells set-top boxes that allow people to stream online video to their television sets. The studios and streaming services claim the boxes promote mass copyright infringement of their movies and television shows. Dragon Box has not responded to the accusations.
WHAT WE’RE READING
And some recent stories from other publications that caught our eye:
Party on: Do they know how to party in Silicon Valley or what? Vanity Fair spills the beans on “exclusive, drug-fueled, sex-laced parties — gatherings they describe not as scandalous, or even secret, but as a bold, unconventional lifestyle choice.”
No power: Fast Company explores Russian efforts to hack not our election system but our infrastructure, such as the power grid. “In August, a quarter of the president’s National Infrastructure Advisory Council quit their posts, saying that the president had devoted ‘insufficient attention’ to cybersecurity threats to critical infrastructure.”
Personal growth: The New Yorker seeks to improve itself with a look at the self-help industry and the gurus who say they can lead people to betterment. “ Self-help gurus need not be charlatans peddling snake oil. Many are psychologists with impressive academic pedigrees and a commitment to scientific methodologies, or tech entrepreneurs with enviable records of success in life and business.”
Virtual reality: From the CES electronics show in Las Vegas, Wired reports that entrepreneurs are still searching for a killer virtual-reality app. “There is no Halo for VR like there was for the Xbox, or killer software, like Microsoft Office, that helped sell PCs.”
Nighty-night: The Atlantic pulls back the covers on sleep — specifically, why is it necessary? That’s what researchers in Japan want to find out. “The precise benefits of sleep are still mysterious, and for many biologists, the unknowns are transfixing.”
SPARE CHANGE
Leave it to the Wall Street Journal to figure out how to get that perfect Kylo Ren look when indulging in a little Star Wars cosplay. The trick is finding high-waisted pants, as sported to impressive effect by actor Adam Driver in “The Last Jedi.” “Tracking down high-waisted pants would be a challenge for even the wisest Jedi,” the Journal says. “Less than 1% of all pants for men and women on sale in the U.S. today are high-waisted, excluding athletic wear.” Your best bet? Maternity pants.
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.
