The Week in Business: A Strong Jobs Report
What’s Up? (Jan. 30-Feb. 5)
Better News Than Expected
The economy added 467,000 jobs in January despite record levels of coronavirus cases, the Department of Labor reported on Friday. Employers continued to add jobs at roughly the same rate as they did in December. Data quirks make the jobs numbers particularly difficult to accurately interpret in January, and the labor force shrank, suggesting that Omicron may have kept some people from looking for work. But economists said that the strong jobs report was a good sign. “Clearly something is different about this surge,” said Julia Pollak, chief economist for the career site ZipRecruiter.
Meta’s Big Drop
Meta’s stock price plummeted on Thursday after the company announced weak quarterly earnings a day earlier, erasing more than $230 billion from the Facebook parent’s market value and setting off Wall Street’s worst drop in nearly a year. It was the biggest one-day wipeout in history, according to Birinyi Associates, a research firm. Among troubling signs for Meta were its first-ever drop in the number of users of its flagship app and new competition from TikTok. It also reported that Apple’s recent changes to its privacy tools, which allow iPhone users to opt out of being tracked by advertisers, could cost the company $10 billion in advertising sales this year. And Meta’s main effort to build a business apart from its current advertising model, its pivot to the metaverse, is also costing the company a lot of money. The division that builds devices to access these virtual worlds, like virtual reality goggles, lost $10 billion last year.
CNN’s Top Executive Resigns
Jeff Zucker stepped down as the president of CNN on Wednesday after he failed to disclose a consensual relationship with one of the network’s top executives. Mr. Zucker was one of the most powerful leaders in the American media and television industries. His resignation comes as CNN’s parent company, WarnerMedia, is on the verge of spinning out from AT&T and combining with Discovery in a $43 billion deal, and as its new subscription streaming service — intended to compensate for a decline in cable subscriptions — is expected to start within weeks.
What’s Next? (Feb. 6-12)
Up, and Up Some More
On Thursday, the Department of Labor will report how much prices rose in January. In December, the Consumer Price Index, an important measure of inflation, increased at its fastest pace since 1982. A report from the United Nations last week showed that global food prices have skyrocketed, and Starbucks said it would raise prices again this year, citing inflation as one reason. Officials at the Federal Reserve on Monday indicated that they would move swiftly rather than gradually to cool down the economy. The Fed is expected to begin raising interest rates in March.
The Supply Chain Crisis Continues
One key factor in rapidly rising inflation is a supply chain crisis that has caused shortages of everything from computer chips to kitchen appliances. But even as central banks around the world move to cool down the economy with higher interest rates and less support, supply chains are unlikely to be back to normal anytime soon. Many of the delays have been caused by aging infrastructure, labor shortages, outmoded technology and a shortage of warehouse space — systemic problems that have been building for years, and would be difficult to quickly fix.
An Olympic Challenge for NBC
The Beijing Winter Olympics kicked off on Friday and will run through Feb. 20. For the official broadcaster of the Games, NBC, producing the event could be more challenging than even the Tokyo Olympics, which last year drew the lowest viewership of any summer games since 1988. China’s Covid-19 restrictions will keep most sports commentators, as well as the hosts of NBC’s “Today” and the “NBC Nightly News,” in the United States. In the past, the shows have moved to the Olympic host cities and provided a ratings bump. On top of Covid-19 challenges, NBC will have to manage a political aspect of what is usually feel-good entertainment. President Biden has announced a diplomatic boycott of the Olympics because of China’s human rights abuses, and House Republicans recently asked NBC executives what influence the Chinese government would have over the network’s broadcast.
What Else?
The national debt topped $30 trillion for the first time. Tesla recalled cars equipped with its Full Self-Driving Software to disable a feature that allowed them to roll through intersections without stopping. And TurboTax will let users deposit tax refunds into crypto accounts.
