What we’re reading (12/4)
“Layoff Announcements Top 1.1 Million This Year, The Most Since 2020 Pandemic, Challenger Says” (CNBC). “Announced job cuts from U.S. employers moved further ahead of 1 million for the year in November as corporate restructuring, artificial intelligence and tariffs have helped pare job rolls, consulting firm Challenger, Gray & Christmas reported Thursday.”
“Two Types Of Shoppers Are Powering Holiday Spending: The Wealthy And Deal-Hunters” (Wall Street Journal). “The myriad choices these more cautious shoppers are making help illuminate why spending is up but consumer confidence is dragging in the final stretch of the year. On Black Friday, the year’s busiest shopping day, sales rose 4.1% compared with last year, Mastercard data show. Even with holiday shopping off to a robust start, consumers—especially those from less-affluent households—are pulling back on routine purchases as they give priority to gifts and holiday meals. Sales on things that can wait, such as haircuts, pricier razors and fast-casual lunches, are slipping.”
“Manufacturers Shrink For 9th Month In A Row, ISM Finds. Tariffs Hurt Sales And Keep Lid On Hiring.” (MarketWatch). “American manufacturing contracted for the ninth straight month, a survey showed, as uncertainty tied to ever-changing tariffs and a historic government shutdown weighed on business. A closely followed manufacturing index fell to a four-month low of 48.2% in November from 48.7% in the prior month, the Institute for Supply Management said Monday. Any number below 50% signals contraction.”
“Manias, Panics, And AI” (Project Syndicate). “By any metric, the US and, by implication, the world, is now in an intense AI speculative boom. But will all the investment pouring into the industry build something useful? To whom, and for what purpose? And if there is a downside, what will it look like? Kindleberger’s work – and everything that has happened since 1978 – suggests that three salient questions should be used to assess investment booms. First, does the boom involve more than just a run-up in asset prices…Second, is the investment boom financed primarily by issuing debt…The third question may be the most important for this moment: How exactly will this technology be used? Conversations with senior executives of large-cap corporations across traditional sectors – companies commonly presumed to provide high demand for AI solutions – confirm that while all expect to achieve significant savings and efficiencies from AI, almost none can highlight with confidence additional sources of revenue (such as new lines of business).”
“The Spending Bubble Driving Corporate Profits Looks Set To Burst” (Barron’s). “Decades of government deficit spending, share buybacks, dividends, and overconsumption have buoyed profits and inflated U.S. economic output. These profit drivers are all looking increasingly vulnerable. That would dent the profit growth that markets have long used to justify lofty valuations.”
