The Weekly Scan March 28, 2022

Welcome to the Weekly Scan. Here’s what we’re following for the week of March 28, 2022.

The summer of ‘69. Jobless claims fell to their lowest level in more than 52 years, according to the latest data from the U.S Department of Labor. Unemployment claims totaled 187,000, which marked a decrease of 28,000 from the previous week. The number of claims reportedly hasn’t been that low since September 6, 1969, when unemployment claims amounted to 182,000. Unemployment rolls also continued to fall, which is contributing to wage inflation, as the job market forces employers to attract workers with higher wages. The seasonally adjusted insured unemployment rate for the week was 1.0%, according to the Bureau of Labor Statistics. 

• The takeaway: The strong job market could motivate the Federal Reserve (the Fed) to raise the federal funds rate by half a percentage point. On March 16, 2022, the Fed raised the federal funds rate by a quarter of a percentage point, the first rate increase since 2018. If jobless claims remain below 200,000 for several weeks, it could cause concern with the Fed. Currently, there are many more job openings than there are available workers, which means companies aren’t laying off employees.

NBC News

The emission commission. The Securities and Exchange Commission (SEC) has proposed new rules that would require public companies to disclose their greenhouse gas emissions and the climate risks to their businesses. Under the proposal, companies would need to outline their climate risks, the costs associated with moving away from fossil fuel usage, and the costs to their businesses that would be caused by climate change. Companies would have to disclose the direct and indirect greenhouse gas emissions that their work creates. While the SEC released voluntary climate change guidance for companies in 2010, these new rules would be the first mandatory climate guidelines from the commission. 

• The takeaway: Risks of climate change are often overlooked by businesses, which are some of the biggest contributors to greenhouse gasses. The SEC rules are part of a larger government effort to combat climate change. In May 2021, President Biden issued an executive order demanding steps towards fighting climate change, while creating jobs and reducing greenhouse gas emissions. Biden’s climate objectives include reducing greenhouse emissions by 52% below 2005 levels by 2030. The president also hopes to make electric power carbon-free by 2035, and reach net-zero carbon emissions by 2050. Investors are increasingly asking for climate information from companies, according to AP. And many companies already offer that information. But the new rules from the SEC would provide a uniform system. 

AP News

Russia online. President Biden has warned that Russia may be exploring ways to levy cyberattacks on critical infrastructure in the U.S. The president said that American intelligence had found that Russia may attack electrical grids, water treatment plants, hospitals, and the financial sector. Deputy National Security Adviser Anne Neuberger said that there hasn’t been evidence of a specific cyberattack threat, but that “preparatory work,” such as scanning websites and hunting for vulnerabilities, had been noticed, according to reports. In a White House briefing to 100 companies, the Biden Administration also urged businesses to beef up cybersecurity measures. 

• The takeaway: The threat of Russian cyberattacks on American companies is thought to be a response to economic sanctions from the U.S. Russia would reportedly take the cyber route in its counterattack to avoid provoking all-out war with the U.S. The Department of Homeland Security is calling on companies to report any cyber incidents to authorities. The Biden Administration has been pushing companies to increase security efforts in recent months. Russian cyber gangs were found to be behind certain attacks last year, such as the one on the Colonial Pipeline in June, which resulted in a temporary shutdown of the pipeline.

CBS

Where’s my tip? People are suddenly feeling less generous, and they’re tipping less, according to Block Inc., owner of payment app Square. That reverses a trend at the height of the pandemic, when 30% tips in some places weren’t uncommon. For purchases made over the phone or online, the share receiving a tip fell to 84.8% as of February 28, 2022, from 85.7% roughly a year earlier. Tipping reportedly increased to almost 90% during the pandemic, up from less than 50% before the pandemic. While total tipping has fallen, in-person tipping is on the rise. For remote transactions over a 12-month period, the average tip amount hovered around 16% for remote transactions, but ticked up to 21.2% from 20.6% for in-person transactions. 

• The takeaway: Throwing businesses extra cash surged during the pandemic, as people found ways to make up for business closing for in-person services. Consumers tend to show monetary appreciation differently under particular circumstances,for example tipping more when they perceive a service involves risk, research shows. But that could be changing now as consumers face pressure from inflation, which is at its highest level in decades.

Wall Street Journal

Other stories we’re following:

Revving up rates. Fed chairman Jerome Powell said the Fed could start raising the federal funds rate more aggressively in half-a-percentage point increments to fight inflation, rather than in smaller quarter-point jumps. Last week, the central bank raised rates for the first time since 2018, to a range between 0.25% and 0.5% from 0%.

Big yellow taxi. New York City dwellers will soon be able to hail the city’s famed yellow cabs using the Uber app. Rather than running a meter, the app will tell customers the full cost of hte ride. The partnership with the city’s taxi industry could be a lifeline for cab drivers, who have  been hurt by the pandemic, and the rise of ride-hailing services such as Uber and Lyft. 

Amazon’s touchdown. Amazon’s streaming service poached football commentator Al Michaels from Sunday Night Football to announce Thursday Night Football on Amazon Prime Video. 

 Here’s what we covered last week in the Scan: 

• The Fed raises the federal funds rate by a quarter of a percentage point.
• The U.S. Department of Defense will reportedly order 33 fewer F-35s from Lockheed Martin than it had planned.
• Howard Schultz returns to Starbucks as CEO for the third time. 
• Walmart plans to add 50,000 workers by April 30, 2022, the end of its first quarter.