💼 A fork in the job market

More hyped than “Stranger Things”... at least by economists. Friday's monthly jobs report, aka: America's “Labor 101” report card, came at a critical time for the economy. The results: the booming job market cooled slightly in May. Key word: slightly.

• Job growth was stronger than expected, but eased. The US added 390K payrolls, the lowest since April 2021. Usually this number is enough to indicate the labor market's health. This time, not so much, since the problem isn’t demand for workers — it’s supply.
• Labor-force participation, perhaps more telling, nudged up to 62.3% — a sign Americans are slowly returning to work. Even though job openings dropped by 455K in April, there’s still 5M+ more open roles than available workers.
• Wage growth ticked down, rising 5.2% from a year earlier but still twice the rate that earnings were rising pre-pandemic, as companies bump pay to compete.

A tale of two markets... Unemployment stayed at a pandemic low of 3.6%, and rebounding sectors like hospitality can't hire fast enough. The paradox: sectors that thrived mid-pandemic are slowing hiring and cutting jobs to shave costs.

• We're hiring: Airlines, restaurants, hotels, and retailers are scrambling to boost headcount to meet demand — and have cut growth plans because they can’t. American Airlines has hired 16K employees this year and is still struggling to fill positions. Small businesses have been forced to slash hours and services.
• We're un-hiring: As inflation and slowing demand hit tech profits, Peloton, Netflix, Carvana, and others have laid off workers (Tesla reportedly plans to as well). Meanwhile: Microsoft, Meta, Salesforce, Twitter, Uber, Wayfair, and Snap say they’ll rein in hiring.

Open for biz… China’s biggest city is opening back up after strict Covid lockdowns rattled residents and global supply chains. Last week Shanghai officials lifted restrictions for most people after two months of isolation. Now Shanghai's main port (aka the world's largest) is working through thousands of backlogged containers chock-full of everything from diapers to dishwashers. With 26M residents returning to daily routines, oil demand could spike, translating to even higher pump prices worldwide.

Tightening time… The Fed’s busting out a new-ish tool in the inflation fight. Early in the pandemic, the US’s central bank used quantitative easing (QE) — aka “printing money” — to stimulate the economy. Now it’s switching to quantitative tightening (QT), basically destroying the $$ it printed by letting bonds and other securities it purchased mature, which reduces its cash balance and the money supply. There’s a risk the Fed could tighten too quickly (it’s selling 10X faster than its last QT in 2017), which might mean more volatility for stocks.

Tim Cook’s cookin’ up… Apple’s version of VR. Apple’s annual developer conference kicks off today. Analysts expect a new iPhone OS and a MacBook Air refresh. We may also see a long-awaited mixed-reality headset. Apple reportedly showed its board a prototype last month, a sign it could soon launch its first new hardware since its 2015 Watch. But the Fruit’s entering a market with heavy hitters: Meta’s Quest 2 has 78% market share, and Sony and Microsoft are also players. One analyst thinks Apple could ship 3M headsets next year.

Weddings, prom, and a grad party… not enough closet space. A packed season of IRL events is fueling demand for formal fits. Last quarter, Rent the Runway’s revenue doubled from the start of the pandemic in 2020, thanks partly to its return-from-home option. It’s a different story for rival clothing service Stitch Fix, which is struggling to lure new customers as lax office dress codes (think: elastic waistbands) cut demand for everyday outfits. We'll find out whether the uptick in summer soirees has affected orders when both report Thursday.

• Lightning: Ford’s throwing billions more at three US EV plants, even as the industry struggles with production delays. Meanwhile, EV makers are building home charging stations and batteries.
• Washed: Authorities raided Deutsche Bank to investigate allegations it was “greenwashing” some sustainable-investment funds. The move comes at a time when ESG standards are facing greater scrutiny.
• Embargo: The EU is banning Russian oil that comes by sea, or about 90% of all EU oil imports. China and India are still buying Russia’s crude, but Europe could block Moscow from insuring Russian tankers.

• Lean: When Sheryl Sandberg announced she was leaving Meta, the COO was reportedly not only burned out but under internal investigation, partly for using corporate resources to plan her upcoming wedding.
• Winklevii: The Winklevoss twins laid off 10% of staff at their crypto-exchange biz, Gemini, citing a “crypto winter.” Coinbase and crypto exchange Rain also cut headcount, fearing a prolonged coin downturn.
• Birding: Birdwatchers are finding themselves on the front lines of the climate crisis. Many are using apps like eBird, which crowdsources data that helps scientists track climate-change patterns.

• Monday: Apple WWDC keynote. Earnings expected from GitLab
• Tuesday: California primary election. Earnings expected from JM Smucker, Smartsheet, Dave and Buster’s Entertainment, and Cracker Barrel
• Wednesday: Earnings expected from Campbell Soup, Five Below, and Brown Forman Corp.
• Thursday: Jobless claims. Earnings expected from Nio, DocuSign, Vail Resorts, Signet Jewelers, Stitch Fix, and Rent the Runway
• This weekend: The Belmont Stakes is Saturday

Authors of this Snacks own shares of Apple, Tesla, Ford, Netflix, Twitter, Microsoft, Uber, and Snap

ID: 2230964