Economics

• Delta has hired prominent attorney David Boies to pursue potential damages from CrowdStrike and Microsoft after a mass outage earlier this month, CNBC’s Phil Lebeau reported on Monday.
• CrowdStrike shares were trading lower in extended trading. 
• The outages cost Delta an estimated $350 million to $500 million.

• McDonald’s executives acknowledged during an earnings call Monday that diners consider the company’s prices too high, and said they are taking a “forensic approach” to evaluating prices.
• Amid a broader consumer pullback and increasing prices, fast-food chains have had a difficult time drawing in lower-income diners.
• The company’s recent $5 value meal offering was initially successful in bringing lower-income diners back to stores but has yet to translate into higher sales, company executives said.

With younger labor in short supply, aging workers often find themselves pulling double—or triple—duty to keep towns afloat

Non-paywall link

It turns out that Chipotle customers were right in their complaints about skimpy portion sizes at some locations. On Wednesday, CEO Brian Niccol disclosed that a company investigation found that 1 in 10 of its restaurants were too meager with their servings.

Chipotle looked into the issue after rumors of shrunken portions circulated on social media, including from influential food reviewers on TikTok who shared images of small helpings. Some customers claimed they got bigger meals when they filmed workers putting their orders together. 

The issue came to a head after two years of bruising inflation has made consumers increasingly cost-conscious, with many grousing about surging prices at restaurants. The smaller portions at Chipotle were especially hard to swallow after the restaurant raised prices in recent years, some customers said on social media. 

Tech-focused Nasdaq retreats 3.6% and S&P 500 also down in wake of lacklustre results from big-tech companies

Wall Street suffered its worst day of trading in 19 months as disappointment around earnings from Tesla and Google challenged the recent big-tech rally.

The benchmark S&P 500 index dropped 2.3% as a sell-off triggered its biggest single-day fall since December 2022.

The technology-focused Nasdaq retreated 3.6%, its largest single-day decline since October 2022.

Shares in Tesla sank 12% after it reported a 45% slump in quarterly profits amid discounting by electric carmakers. Alphabet, the owner of Google and YouTube, also fell 5% as investors scrutinized a slowdown in advertising growth.

The same percentage of employed people who worked remotely in 2023 is the same as the previous year, a survey found

Don’t call it work from home any more, just call it work. According to new data, what once seemed like a pandemic necessity has become the new norm for many Americans.

Every year, the Bureau of Labor Statistics (BLS) releases the results of its American time use survey, which asks Americans how much time they spend doing various activities, from work to leisure.

The most recent survey results, released at the end of June, show that the same percentage of employed people who did at least some remote work in 2023 is the same percentage as those who did remote work in 2022.

In other words, it’s the first stabilization in the data since before the pandemic, when only a small percentage of workers did remote work, and a sign that remote work is here to stay.

The IRS announced Thursday that it has collected $1 billion in back taxes from high-wealth tax cheats — a milestone meant to showcase how the agency is making use of the money it received as part of the Biden administration’s signature climate, health care, and tax package signed into law in 2022. 

Part of the push for public awareness of high-wealth tax collections is a growing recognition by agency officials that a potential Republican takeover of the White House and Congress could mean massive future budget cuts for the IRS. Showing the public how much work the IRS is getting done is meant to give the much-maligned agency a more sympathetic image. 

As part of that effort, last year the IRS launched a series of initiatives aimed at pursuing high-wealth individuals who have failed to pay their tax debts. The IRS says the campaign is focused on taxpayers with more than $1 million in income and more than $250,000 in recognized tax debt.

The Federal Reserve now finds itself in a bind as to whether to cut rates soon or leave them elevated to further slow inflation.

Amid signs of a weakening labor market, the Federal Reserve now finds itself in a bind: If it cuts interest rates too soon, it could risk reigniting the price increases that have bedeviled the post-pandemic economy. But if it keeps rates elevated, the job security of millions of Americans could be further jeopardized.

The Consumer Price Index for the month of June, due to be released by the Bureau of Labor Statistics this morning at 8:30 a.m., is expected to offer further insight into the Fed's potential next moves.

The unemployment rate now stands at 4.1%, its highest point of the post-pandemic period and a level not seen since February 2018, excluding the coronavirus unemployment surge in 2020.

A vast swath of the US economy is showing signs of weakness as unemployment rises to its highest point in more than two years.

Consumer demand seems to have tapered off so far this summer, according to surveys of American businesses that sell any kind of service to make a profit, ranging from restaurants to dental clinics. That weakness is also evident in the latest spending figures — a far cry from last year’s lucrative summertime spending spree when Americans shelled out for films and high-profile concerts.

The Institute for Supply Management’s latest monthly survey that gauges economic activity in the services sector showed that so-called new orders and overall economic activity unexpectedly slipped into contraction territory last month. The headline index fell to a reading of 48.8 in June from 53.8 in May as the new orders sub-index saw an even steeper decline, down to 47.3 from 54.1. (A reading above 50 indicates expansion while anything below that threshold points to a contraction.)

This apparent slowdown in demand, if it persists for long enough, could translate into service-providing businesses hiring at a slower pace and possibly slashing jobs. The overwhelming majority of employment in the United States is considered service-providing, specifically 86% of the 158.6 million total US jobs as of June.

Boeing has agreed to plead guilty to a criminal fraud conspiracy charge after the US found the company violated a deal meant to reform it after two fatal crashes by its 737 Max planes that killed 346 passengers and crew.

The Department of Justice (DoJ) said the plane-maker had also agreed to pay a criminal fine of $243.6m (£190m).

However, the families of the people who died on the flights five years ago have criticised it as a "sweetheart deal" that would allow Boeing to avoid full responsibility for the deaths. One called it an "atrocious abomination".

The settlement must now be approved by a US judge.

Walgreens is set to close a substantial number of its roughly 8,600 locations across the United States as the company looks to reset the struggling pharmaceutical chain’s business.

The company didn’t announce a specific number of store closures, but it said Thursday that it is planning “significant” closures of underperforming stores across America as part of a multiyear optimization program.

It’s a scenario that terrifies America’s auto industry.

Chinese carmakers set up shop in Mexico to exploit North American trade rules. Once in place, they send ultra-low-priced electric vehicles streaming into the United States.

As the Chinese EVs go on sale across the country, America’s homegrown EVs — costing an average of $55,000, roughly double the price of their Chinese counterparts — struggle to compete. Factories close. Workers lose jobs across America’s industrial heartland.

Isabella Weber, the economist who ignited controversy with a bold proposal to implement strategic price controls at the peak of inflation and identified corporate profits as a driver of high prices, has proposed a new measure that could prevent food shortages and price gouging in the wake of another disruption of the global supply chains.

Weber’s new paper, published on Thursday, looks at how grain prices spiked in 2022 as Covid snagged supply chains and Russia invaded Ukraine. The price hikes helped to drive record profits for corporations while pushing inflation higher and increasing global hunger. In the paper, Weber and colleagues call for the creation of buffer stocks of grain that could be released during shortages or emergencies to ease price pressures.

Such a system would quell the volatility that is a hallmark of the grain market and keep food prices down, said Weber, the paper’s lead author and an associate professor at the University of Massachusetts.

“Literally the worst of times for global hunger seem to be the best of times for the companies managing the global trade in food staples,” Weber said. “It might seem utopian in the current environment, but there is such clear benefit in terms of economic stability that it’s not as utopian as it seems.”

Chip-maker Nvidia became the world’s most valuable company after its share price climbed to an all-time high on Tuesday.

It is now worth $3.34tn (£2.63tn), with the price having nearly doubled since the start of this year.

The stock ended the trading day at nearly $136, up 3.5%, making it more valuable than fellow tech giant Microsoft. It overtook Apple earlier this month.

The Californian company's meteoric rise has been fuelled by its dominance of what analysts call the "new gold or oil in the tech sector" - the chips needed for artificial intelligence (AI).

Claire*, 42, was always told: “Follow your dreams and the money will follow.” So that’s what she did. At 24, she opened a retail store with a friend in downtown Ottawa, Canada. She’d managed to save enough from a part-time government job during university to start the business without taking out a loan.

For many years, the store did well – they even opened a second location. Claire started to feel financially secure. “A few years ago I was like, wow, I actually might be able to do this until I retire,” she told me. “I’ll never be rich, but I have a really wonderful work-life balance and I’ll have enough.”

But in midlife, she can’t afford to buy a house, and she’s increasingly worried about what retirement would look like, or if it would even be possible. “Was I foolish to think this could work?” she now wonders.

She’s one of many millennials who, in their 40s, are panicking about the realities of midlife: financial precarity, housing insecurity, job instability and difficulty saving for the future. It’s a different kind of midlife crisis – less impulsive sports car purchase and more “will I ever retire?” In fact, a new survey of 1,000 millennials showed that 81% feel they can’t afford to have a midlife crisis. Our generation is the first to be downwardly mobile, at least in the US, and do less well than our parents financially. What will the next 40 years will look like?

The UK’s main stock market retook its crown as Europe’s most valuable for the first time in nearly two years, data shows.

The total value of companies listed on the London Stock Exchange (LSE) hit $3.18 trillion on Monday, overtaking the $3.13tn total value of companies listed in Paris, according to Bloomberg data.

Both valuations have shifted since and remain close, but analysts describe it as a milestone.

They say the French market has slumped because of the uncertainty around its election, while the UK market is recovering after several years of underperformance.