Newsletter: California Inc.: Wages hold steady as attention turns to inflation numbers
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 economy was doing the happy dance on Friday. Employers added a robust 263,000 jobs in April. The unemployment rate fell to its lowest level since 1969, dropping to 3.6%, from 3.8% — though that drop partly reflected an increase in the number of Americans who stopped looking for work. Average hourly pay rose 3.2% from 12 months earlier.
LOOKING AHEAD
Running up a tab: Borrowing takes the spotlight Tuesday as the latest stats on consumer credit are revealed. In February, total consumer credit increased by $15.2 billion to a seasonally adjusted $4 trillion, representing an annual growth rate of 4.5%.
Trade deficit: President Trump, who ran for office with a pledge to reduce the trade deficit, will get his latest report card on Thursday. The trade deficit with our global trading partners fell to $49.4 billion in February, its lowest level since June 2018, thanks mostly to a surge in exports to China.
Consumer prices: Any inflation out there? We’ll find out Friday with the release of the consumer price index. Consumer prices increased by the most in 14 months in March. Inflation, however, remained in check amid a slowing of domestic and global economic growth.
At the movies: “Avengers: Endgame” looks to be on its way to becoming the highest-grossing film of all time. If you’ve already seen it, opening Friday is “The Hustle,” starring the talented Anne Hathaway and Rebel Wilson in this gender-swapped remake of “Dirty Rotten Scoundrels.” Also opening is “Tolkien,” a biopic about the author of “The Lord of the Rings,” who did not in fact know any elves or wizards in real life — so this is mostly the story of an Oxford professor who made up funny languages and did a fair bit of writing.
THE AGENDA
Monday’s Business section visits with Tom Barrack, chief executive of Los Angeles-based Colony Capital and prominent conservative figure. Despite an investment career that set Barrack on a path to influence and fortune, some believe he has been a poor steward of other people’s capital. Data seen by the Financial Times indicate a performance record for Colony funds that has been, at best, mixed.
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:
Trade brinkmanship: President Trump intensified pressure on China to strike a trade deal in Washington this week by threatening to more than double tariffs on $200 billion of the Asian nation’s sales to the world’s largest economy. In an abrupt shift, Trump tweeted on Sunday he wasn’t satisfied with the pace of progress and that the duties would increase Friday.
More bank: Tesla was able to raise $2.35 billion in a debt and stock offering, putting liquidity fears to rest. The electric-car maker had a first-quarter loss of $709 million that had reduced its cash on hand to $2.2 billion. The company needs to develop the Model Y crossover, Semi truck and Roadster sports car. It’s also building a battery and vehicle factory near Shanghai to produce Model 3s later this year.
Burger sizzle: Shares of Beyond Meat Inc. more than doubled in price to $65.75 in their first day of trading, giving the El Segundo maker of plant-based burgers and sausages a market cap of $3.8 billion — making it the U.S.’ best-performing IPO larger than $200 million since 2008. The first pure-play maker of vegan “meat” to go public, Beyond Meat has a deal with Carl’s Jr. and celebrity investors, including Microsoft co-founder Bill Gates and actor Leonardo DiCaprio.
SpaceX accident: A Crew Dragon capsule set to carry astronauts to the International Space Station was destroyed in an explosion during an April 20 test in Florida, the Hawthorne rocket company confirmed. Initial data indicated the explosion occurred half a second before the capsule’s SuperDraco escape system thrusters were set to fire. SpaceX and NASA are investigating what went wrong.
Fed reversal: President Trump’s bid to put a political ally on the Federal Reserve board collapsed as conservative commentator and economist Stephen Moore withdrew from consideration after a backlash sparked by past writings and statements disparaging women and gender equity. In April, prospective nominee Herman Cain, a restaurant executive and 2012 GOP presidential candidate, pulled out.
Disney sells: Sinclair Broadcast Group Inc. is buying 21 regional sports networks from Walt Disney Co. for $9.6 billion, including the local Fox Sports West, Prime Ticket and Fox Sports San Diego that televise the Angels, Clippers, Kings, Ducks and Padres. The Justice Department, citing antitrust concerns, demanded Disney unload them as a condition of its $71.3 billion takeover of much of 21st Century Fox.
WHAT WE’RE READING
And some recent stories from other publications that caught our eye:
Turning a page: The New York Times looks at Indigo, a Canadian chain that’s reinventing book selling. “Indigo is experimenting with a new model, positioning itself as a ‘cultural department store’ where customers who wander in to browse through books often end up lingering as they impulsively shop for cashmere slippers and crystal facial rollers, or a knife set to go with a new Paleo cookbook.”
Mum’s the word: The Wall Street Journal casts some sunlight on Facebook CEO Mark Zuckerberg’s secret, $59-million splurge on a Lake Tahoe compound. “The deals were kept under wraps through the use of a limited-liability company, a high-end wealth manager and a series of nondisclosure agreements, which even required that listing pictures of the homes be removed from the internet.”
Alpha Girl: Wired introduces us to Sonja Hoel in an excerpt from the book “Alpha Girls, the Women Upstarts Who Took on Silicon Valley’s Male Culture and Made the Deals of a Lifetime.” In this anecdote, the low-paid analyst saves software exec John McAfee from making a massively bad deal.
There goes the neighborhood: From Bloomberg, a look at LendingClub, the latest tech company to say adios, at least for some jobs, to San Francisco and its sky-high rents. “Hand-wringing by corporate directors and executives over the price of doing business in the Bay Area has been mounting for years and in the past few, the pace of announcements that jobs are moving to lower-cost locales has accelerated.”
High hopes: The race is on to cash in on the moon, says the New Yorker. “Both private industry and national agencies regard the mining of water and precious materials as something that’s not too far off. There’s space tourism, too, though the quiet consensus among scientists seems to be that the idea is goofy and impractical.”
SPARE CHANGE
How can you find a little more peace and quiet on airplanes? The Journal provides a helpful video with some tips. Although takeoffs and landings, at about 85 decibels, will be the noisiest part of any flight, sound levels vary while cruising depending on the type of aircraft. Also, where you sit matters. Window seats are louder than aisle seats. And the front of the plane is quieter than the rear. It’s no coincidence that’s where first class is.
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.
