Newsletter: California Inc.: Southern California home prices dip for the first time in years
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.
In the market for new digs? We learned Friday that the SoCal median home price dipped slightly in March from a year earlier, the first annual decrease since 2012 and a downshift from the once-sizzling regional housing market. The 0.1% drop means prices for the six-county region were essentially flat year over year.
Consumer spending: The latest stats on consumer spending come out Monday. In February, this key metric, representing about two-thirds of total U.S. economic activity, edged just 0.1% higher as households cut back on purchases of motor vehicles.
Home prices: How’s the national housing market doing? The Case-Shiller house price index will be released Tuesday. National home prices rose 4.3% annually in January, down from a 4.6% gain in December.
Jobs market: We’ll find out Friday if the jobs market remains strong. In March, nonfarm payrolls expanded by 196,000 jobs, and the unemployment rate held steady at 3.8%.
Deep thinkers: A pair of interesting-looking documentaries open Friday. First there’s “Ask Dr. Ruth,” featuring the indefagitable Ruth Westheimer making the world a better place for healthy sexual relations. Then there’s “Meeting Gorbachev,” from Werner Herzog and André Singer. It features archive materials and several never-before-seen interviews.
The Business section Monday looks at the growing influence of a gaggle of self-styled patient-advocacy groups with murky origins or hidden funders that have cropped up since 2017. With names like the Doctor-Patient Rights Project, such groups pursue policy aims that include aiding pharmaceutical companies’ efforts to defeat drug-price proposals. Some experts fear they provide a way for drugmakers to influence policy without any disclosure of such efforts.
Here are some of the other stories that ran in the Times Business section in recent days that we’re continuing to follow:
We got that: Most companies would balk at having to account for a regulatory fine of as much as $5 billion. But not Facebook. Investors shrugged off news of an anticipated record penalty of $3 billion to $5 billion from the Federal Trade Commission. The FTC launched a privacy probe into Facebook in March 2018 in the wake of the Cambridge Analytica scandal.
Big miss: Tesla turned in an awful first-quarter earnings report showing automotive revenue fell 41% to $3.7 billion from $6.3 billion in the previous quarter, a far steeper drop than expected for sales of all its electric cars. The sales slump slammed the bottom line, with the automaker turning unprofitable again after two rare quarters of positive earnings.
Deadly toy: Mattel Inc. is grappling with the recently announced recall of 4.7 million Rock ’n Play Sleepers made by its Fisher-Price unit. The recall came after the deaths of more than 30 infants linked to the product since it was introduced in 2009, according to the U.S. Consumer Product Safety Commission. The recall was announced after a Consumers Report investigation and an urgent warning by the the American Academy of Pediatrics.
Exceeding expectations: The U.S. economy grew at a 3.2% annual rate in the year’s first three months, a far better outcome than projected, overcoming global weakness, rising trade tensions and a partial government shutdown. The advance marks an acceleration from a 2.2% gain in the fourth quarter, but about half the gain reflected two factors not expected to last — a big jump in stockpiling by businesses and a sharp contraction in the trade deficit.
Snapping back: The fortunes of Snap Inc.’s rise and fall on the size of Snapchat’s user base. They rose last week after a first-quarter earnings report, which contained more good news: Its user base grew 2% to 190 million — a number the Santa Monica company says includes 90% of 13- to 24-year-olds and 75% of 13- to 34-year-olds in the United States. Snap’s shares climbed in after-market trading, cresting at $13 before giving back some of those gains.
WHAT WE’RE READING
And some recent stories from other publications that caught our eye:
Up in smoke: The New York Times weighs in on the business of weed. “Thirty-three states now allow its sale at least for medical purposes. Ten of them, including California, have legalized recreational use. And as new markets open and capital continues to flood in, the cannabis industry has become, by some measures, one of the country’s fastest-growing job sectors.”
Lost at sea: In a “Letter From California,” Harper’s Magazine visits Richardson Bay, “a saltwater estuary where roughly 100 people live out of sight from the world. Known as anchor-outs, they make their homes a quarter mile from the shore, on abandoned and unseaworthy vessels, doing their best, with little or no money, to survive.”
Mall rats: Do malls have a future? Yes, says Bloomberg, if Gen Z has anything to say about it. “They’ve shunned beer, they want companies to take political stands and they trust Kardashians to make their makeup choices. But perhaps the biggest surprise about this new cohort of teenagers is the most unexpected of all: They love the shopping mall.”
Antisocial media: The New Yorker goes behind the scenes at Facebook to examine the company’s response to the Christchurch mass shooting. “In the aftermath of the shooting, Facebook faced widespread criticism for failing to take down the videos fast enough, for failing to provide transparency in how it handles violent extremism, and for not doing more to combat terrorism and hate speech online.”
Upright citizens: The Wall Street Journal observes that startups can learn something from improv comedy. “Improvisation is being super-pliable, and entrepreneurs need to get out of their own way and adopt a fail early, fail often mentality,” says a Duke University professor who teaches improv programs to MBA students and executives.
That Journal story about bringing the funny made me flash back to years of listening to Dr. Demento every Sunday on KMET (“the Mighty MET”). Everyone has their favorite Dr. Demento songs. Mine include this one, this one, of course this one, and most definitely this one. How about you?
For the latest money news, go to www.latimes.com/business. Mad props to Laurence Darmiento for helping put this thing together.
Until next time, I’ll see you in the Business section.
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