People hold signs during a strike rally for the International Association of Machinists and Aerospace Workers (IAM) at the Seattle Union Hall in Seattle, Washington, on October 15, 2024.
Jason Redmond | AFP | Getty Images
Boeing machinists voted against a new labor deal that included 35% wage increases over four years, their union said Wednesday, extending a more than five-week strike that has halted most of the company’s aircraft production, which is centered in the Seattle area.
The contract’s rejection by 64% of the voters is another major setback for the company, which warned earlier Wednesday that it would continue to burn cash through 2025 and reported a $6 billion quarterly loss, its largest since 2020.
The strike is costing the company about $1 billion a month, according to S&P Global Ratings.
New CEO Kelly Ortberg had said reaching a deal with machinists was a priority in order to get the company back on track after years of safety and quality problems.
“My focus is getting everybody looking forward, get them back to work, improve that relationship,” Ortberg told CNBC’s “Squawk on the Street” earlier in the day, when asked about the strike.
Ortberg’s laid out his vision for Boeing’s future, which could includes slimming down the company to focus on core businesses. Earlier this month, he announced Boeing will cut 10% of its global workforce of 170,000 people.
Boeing’s more than 32,000 machinists in the Puget Sound area, in Oregon and in other locations walked off the job on Sept. 13 after overwhelmingly voting down a previous tentative agreement that proposed raises of 25%. The International Association of Machinists and Aerospace Workers union had originally sought wage increases of 40%. It is the machinists’ first strike since 2008.
The latest proposal, announced last Saturday, included 35% raises over four years, increased 401(k) contributions, a $7,000 bonus and other improvements.
Workers had pushed for higher pay amid a surge in living costs in the Puget Sound area. Some machinists were upset about losing their pension plan in a previous contract that they signed in 2014, but the latest proposal didn’t offer a pension.
Boeing agreed in the new contract to build its next aircraft in the Pacific Northwest, which had also been a sticking point with unionized workers after Boeing moved all of its 787 Dreamliner production to a non-union factory in South Carolina.
“We have made tremendous gains in this agreement. However, we have not achieved enough to meet our members’ demands,” said Jon Holden, president of IAM District 751, at a news conference Wednesday night. He said the union will push to go back to the negotiating table.
Boeing declined to comment on the voting results.
The labor strife is the latest in a long list of problems at Boeing, which started the year when a door plug blew out midair from a packed Boeing 737 Max 9, its best-selling plane, reigniting regulator scrutiny of the company.
The strike began as Boeing was working to ramp up production of the 737 and other aircraft.
The extended stoppage is also a challenge for the aerospace supply chain, which is fragile coming out of the pandemic, as the company’s web of suppliers had to train new workers quickly.
Spirit AeroSystems last week said it would temporarily furlough about 700 workers and that layoffs or other furloughs are possible if Boeing machinists’ strike continues.
Construction of a KB Home single-family housing development is shown in Menifee, California, on Sept. 4, 2024.
Mike Blake | Reuters
Both presidential candidates promise to build more homes. One promises to deport hundreds of thousands of people who build them.
Former President Donald Trump’s pledge to “launch the largest deportation operation in the history of our country” would hamstring construction firms already facing labor shortages and push record home prices higher, say industry leaders, contractors and economists.
“It would be detrimental to the construction industry and our labor supply and exacerbate our housing affordability problems,” said Jim Tobin, CEO of the National Association of Home Builders. The trade group considers foreign-born workers, regardless of legal status, “a vital and flexible source of labor” to builders, estimating they fill 30% of trade jobs like carpentry, plastering, masonry and electrical roles.
Either I make half as much money or I up my prices. And who ultimately pays for that? The homeowner.
Brent Taylor
President of Taylor Construction Group, Tampa, Fla.
Nearly 11 million undocumented immigrants were living in the U.S. as of 2022, the latest federal data shows, down from an 11.8 million peak in 2007. The construction sector employs an estimated 1.5 million undocumented workers, or 13% of its total workforce — a larger share than any other, according to data the Pew Research Center provided to NBC News. Industry experts say their rates are higher in Sun Belt states like Florida and Texas, and more pronounced in residential than in commercial construction.
For Brent Taylor, home building has been “a very, very difficult industry the past few years, and it seems to only be getting worse.” His five-person, Tampa-based business hires subcontractors to perform all the labor, and if those firms’ employees “show up on my jobsite because they work for that company, I don’t know if they’re legal or not,” he said.
The labor pool is tight already, with the U.S. construction industry still looking to fill 370,000 open positions, according to federal data. If work crews dwindle further, “now I can only do 10 jobs a year instead of 20,” Taylor said. “Either I make half as much money or I up my prices. And who ultimately pays for that? The homeowner.”
Doubts also run high among homebuilders that Trump would deliver on his promise.
“They don’t think it’s going to happen,” Stan Marek, CEO of the Marek Family of Companies, a Texas-based specialty subcontracting firm, said of industry colleagues. “You’d lose so many people that you couldn’t put a crew together to frame a house.”
You’d lose so many people that you couldn’t put a crew together to frame a house.
Stan Marek
CEO of the Marek Family of Companies
Bryan Dunn, an-Arizona based senior vice president at Big-D Construction, a major Southwest firm, called “the idea that they could actually move that many people” out of the country “almost laughable.” The proposal has left those in the industry “trying to figure out how much is political fearmongering,” he said.
But while Trump has a history of floating outlandish ideas without seriously pursuing them — like buying Greenland — he has embraced other once-radical policies that reset the terms of political debate despite fierce criticism and litigation. That is especially true with immigration, where his administration diverted Pentagon money to build a border wall, banned travel from several Muslim-majority countries and separated migrant children from their parents.
Trump has emphasized his deportation pitch on the stump, at times deploying racist rhetoric like claiming thousands of immigrants are committing murders because “it’s in their genes.” This month he accused immigrant gangs of having “invaded and conquered” cities like Aurora, Colorado, which local authorities deny, saying they need federal assistance but want no part in mass deportations. Still, recent polling has found broad support for removing people who came to the U.S. illegally.
“President Trump’s mass deportation of illegal immigrants will not only make our communities safer but will save Americans from footing the bill for years to come,” Taylor Rogers, a Republican National Committee spokesperson for the campaign, said in a statement, referring to undocumented people’s use of taxpayer-funded social services and other federal programs.
Trump campaign press secretary Karoline Leavitt said in a statement that the former president’s remarks about genetics were “clearly referring to murderers, not migrants.”
Tobin said the NAHB has real concerns about the deportation proposal but is engaging with both campaigns. It has called on policymakers to “let builders build” by easing zoning and other regulatory hurdles and improving developers’ access to financing.
We have to have a serious conversation in this country about immigration policy and reform, and we can no longer delay it.
Jim Tobin
CEO of the National Association of Home Builders
“The rhetoric on immigration, it’s at 11,” Tobin said. “We have to have a serious conversation in this country about immigration policy and reform, and we can no longer delay it.”
Marek, who has long advocated for more ways for undocumented people to work legally in construction, said reforms are decades overdue. As an employer, “I do everything I can to make sure everybody’s legal,” he said, even as the industry’s hunger for low-cost labor has created a shadow economy that he says often exploits the undocumented workers it depends upon.
“We need them. They’re building our houses — have been for 30 years,” he said. “Losing the workers would devastate our companies, our industry and our economy.”
There is evidence that foreign-born construction workers help keep the housing market in check. An analysis released in December 2022 by the George W. Bush Institute and Southern Methodist University found U.S. metro areas with the fastest-growing immigrant populations had the lowest building costs.
“Immigrant construction workers in Sun Belt metros like Raleigh, Nashville, Houston, and San Antonio have helped these cities sustain their housing cost advantage over coastal cities despite rapid growth in housing demand,” the authors wrote.
But builders need many more workers as it is. “The math is just not there” to sustain a blow from mass deportations, said Ron Hetrick, a senior labor economist at the workforce analytics firm Lightcast. “That would be incredibly disruptive” and cause “a very, very significant hit on home construction,” he said.
Private employers in the field have been adding jobs for the past decade, with employment levels now topping 8 million, over 1 million more since the pandemic, according to payroll processor ADP. But as Hetrick noted, “the average high school student is not aspiring to do this work,” and the existing workforce is aging — the average homebuilder is 57 years old.
Undocumented workers would likely flee ahead of any national deportation effort, Hetrick said, even though many have been in the U.S. for well over a decade. He expects such a policy would trigger an exodus of people with legal authorization, too.
“That’s exactly what happened in Florida,” he said.
“These laws show that they have no idea what we do,” said Luciano, a carpenter who is originally from Mexico and has worked on residential builds across South Florida for the past decade.
“No one else would work in the conditions in which we work,” the 40-year-old said in Spanish, asking to be identified by his first name because he lacks legal immigration status, despite living in the U.S. for over 20 years. Workers on jobsites “have an entry time but no exit time,” often logging 70-hour weeks in rain and extreme heat, he said.
Taylor recalled fellow Florida builders’ panic at the time of the statewide crackdown but said he reassured them, “Look, just give it six months. We don’t have enough people to enforce it, so they’re coming back.”
Republican state Rep. Rick Roth, who voted for the measure, later conceded that Florida was unprepared for the destabilization it would cause and urged immigrant residents not to flee, saying the law “is not as bad as you heard.”
Some workers returned after realizing the policies weren’t being rigorously enforced, Taylor said: “Sure enough, now things are more normal.”
DeSantis’ office didn’t respond to a request for comment.
When Arizona in 2010 enacted what were then some of the toughest immigration restrictions in the country, Dunn was working in Tempe as an executive at a construction management firm. As the legislation rolled out, he said, “a lot of people moved away, and they just never came back.”
By the time much of the law was overturned in 2012, he said, “Arizona had a bad rap” relative to other states that “were a lot more open and just less of a hassle to go work in.”
Dunn, a Democrat, said he’s “definitely” backing Vice President Kamala Harris, but other construction executives sounded more divided. Marek, a “lifelong Republican,” declined to share how he’s voting but noted that “a lot of Republicans aren’t voting for Trump.”
Taylor also wouldn’t say which candidate he’s supporting but praised Trump’s ability to “get things done.”
“There are many other issues with the economy that we are fighting daily that have nothing to do with immigration reform,” he said. “I am not a one-policy voter.”
Carlos Tavares, chief executive officer of Stellantis NV, speaks to the media at the Stellantis auto manufacturing plant in Sochaux, France, on Thursday, Oct. 3, 2024.
Nathan Laine | Bloomberg | Getty Images
DETROIT — Stellantis is suing the United Auto Workers, escalating a monthslong battle between the transatlantic automaker and American union, CNBC has learned.
In an internal message Friday to employees that was confirmed to be authentic, the company said it is suing the UAW as well as a local chapter in California that participated in a strike authorization request vote at Stellantis’ Los Angeles Parts Distribution Center.
“This lawsuit would hold both the International and the local union liable for the revenue loss and other damages resulting from lost production due to an unlawful strike,” Tobin Williams, Stellantis senior vice president of North America human resources, said in the message.
The lawsuit is intended to “prevent and/or remedy a breach of contract” by the UAW, according to a copy of the complaint that was filed Thursday in U.S. District Court in the Central District of California.
A supermajority of UAW members at Stellantis’ Los Angeles Parts Distribution Center voted to request strike authorization from the International Executive Board if the company and union can’t reconcile, the union said Friday morning.
The UAW did not immediately respond to a request for comment Friday afternoon regarding the lawsuit.
United Auto Workers (UAW) President Shawn Fain speaks to the attendees during a campaign rally for U.S. Vice President and Democratic Presidential candidate Kamala Harris and her running mate Tim Walz in Romulus, Michigan, U.S., August 7, 2024.
Rebecca Cook | Reuters
The dispute between the two sides centers on the union alleging Stellantis has not kept contractual obligations as part of a deal the two sides reached late last year. It comes after Stellantis has made several cuts to plant production, conducted worker layoffs and delayed potential investments outlined as part of the 2023 contract.
The automaker has argued, including in the Friday letter to employees, that there’s language in the contract that gives it leniency to change plans based on market conditions, plant performance and other factors.
UAW President Shawn Fain has routinely said the union will strike if needed, however Stellantis has argued that would be unlawful under the contract.
This is breaking news. Please check back for additional updates.
San Diego city officials and activists came together to call on business and government officials to address pay inequities for Latinas in San Diego, CA on Dec. 8, 2022.
Matthew Bowler | KPBS | Sipa USA
Latina women working full time, year-round earn 58 cents for every dollar paid to white, non-Hispanic men, according to data collected by the National Women’s Law Center.
Latina Equal Pay Day, which this year falls on Oct. 3, marks the additional days into the new year that Latinas must work to earn as much as the typical annual salary of white, non-Hispanic male workers.
That gap in pay translates to a loss of nearly $1.3 million over a 40-year career. Break that down further and Latinas lose $32,070 in wages per year, or $2,672 every month, compared with the dominant cohort.
While 58 cents per dollar is a penny improvement compared with the previous year, NWLC notes that even though wages have been increasing, so too has the total wage gap over a lifetime — which last year totaled $1,218,000.
“The increase in lifetime losses and widening of the wage gap for all Latina workers, including part-time workers, is likely because white men’s wages are increasing at a faster rate than other demographic groups,” said Ashir Coillberg, NWLC senior research analyst.
Assuming a Latina and her white, non-Hispanic male counterpart both begin work at age 20, NWLC notes, the wage gap means a Latina would have to work until she is 89 years old — eight years beyond her life expectancy — to be paid what a white, non-Hispanic man has been paid by age 60.
Despite the narrow improvement for full-time workers, the gap actually widens for part-time and part-year Latina workers, falling to 51 cents on the dollar compared with 52 cents last year.
The wage gap varies widely for certain Latina communities, and for some in the United States it’s even more extreme.
While full time, year-round Argentinean and Spanish Latina workers remain closest to parity at 84 cents and 81 cents, respectively, wages for Honduran, Guatemalan and Salvadoran women remained the widest at 47 cents, 48 cents and 51 cents, respectively.
“Most other marginalized populations — and women as a whole — saw a slight widening of the wage gap this year, for both full-time, year-round workers as well as when including part-time workers,” Coillberg said.
Guatemalan, Cuban and Spanish women saw the greatest increase in losses over a 40-year career.
Latinas are more likely to hold low-wage jobs, but NWLC research finds pay disparities at all education levels.
While continued education can be a benefit to earnings potential, NWLC data suggests getting more education does not shield them from the wage gap. Latinas are typically paid less than white, non-Hispanic men with the same educational attainment and are often paid less than white, non-Hispanic men with less educational attainment.
Some of the most educated Latinas have some of the most striking pay gaps compared to their white non-Hispanic men counterparts, according to the NWLC. For example, the center said a Latina with a professional degree stands to lose more than $2.9 million to the wage gap over a 40-year career.
“Unequal pay means Latinas have less money to cover current expenses and forces them to miss key opportunities to build wealth and build economic security throughout their lifetimes,” the NWLC notes in the report.
Instead of prioritizing continued education, pay equity experts are advocating for comprehensive legislative reform.
“A comprehensive approach includes requiring equal pay for equal work, pay transparency policies from lawmakers, eliminating the subminimum tipped wage, protection from caregiver discrimination, safety from harassment and health hazards for all workers, prohibiting salary history to determine future pay, and increased access to higher-paid jobs for women,” said Noreen Farrell, Equal Pay Today chair. “That’s how you actually close the gap.”
“The widening gap underscores the urgency of tackling this issue to ensure equitable economic opportunities for Latinas,” Farrell said. “Latinas do not have one more day to wait for equal pay.”
A Southwest Airlines plane takes off from Hartsfield-Jackson Atlanta International Airport (ATL) in Atlanta, Georgia, US, on Friday, July 12, 2024.
Elijah Nouvelage | Bloomberg | Getty Images
Southwest Airlines is planning to reduce service to and from Atlanta next year, cutting more than 300 pilot and flight attendant positions, according to a company memo seen by CNBC.
The changes come a day before Southwest’s investor day, when executives will map out the company’s plan to cut costs and grow revenue as pressure mounts from activist investor Elliott Investment Management.
Southwest told staff it isn’t closing its crew base in Atlanta. Instead, it will reduce staffing by as many as 200 flight attendants and as many as 140 pilots, for the April 2025 bid month.
The airline also isn’t laying the crews off, but they will likely have to bid to work from other cities.
Read more CNBC airline news
Southwest will reduce its Atlanta presence to 11 gates next year from 18, according to a separate memo from the pilots’ union.
It will service 21 cities from Atlanta starting next April, down from 37 in March, the carrier said.
“Although we try everything we can before making difficult decisions like this one, we simply cannot afford continued losses and must make this change to help restore our profitability,” Southwest said in its memo. “This decision in no way reflects our Employees’ performance, and we’re proud of the Hospitality and the efforts they have made and will continue to make with our Customers in ATL.”
The unions that represent Southwest’s pilot and flight attendants railed against the airline for the staffing and service cuts.
“Southwest Airlines management is failing Employees while impacting Customers. Management continues to make decisions that lack full transparency, sufficient communication with Union leadership, and most alarmingly, a lack of focus on what has made the airline great, the Employees,” said Bill Bernal, the flight attendants’ union president.
A Southwest spokesman confirmed the changes and said the carrier will “continue to optimize our network to meet customer demand, best utilize our fleet, and maximize revenue opportunities.”
Travelers check in at a Southwest counter at Hartsfield-Jackson Atlanta International Airport (ATL) in Atlanta, Georgia, US, on Tuesday, July 23, 2024.
Elijah Nouvelage | Bloomberg | Getty Images
The airline had already pulled out of certain airports, some of which it experimented with during the pandemic to focus on more profitable service.
Southwest is not only facing changing booking patterns and oversupplied parts of the U.S. market but aircraft delays from Boeing, whose yet-to-be-certified 737 Max 7 airplanes are years behind schedule
The airline’s COO, Andrew Watterson, told staff last week that it will have to make “difficult decisions” to boost profits.
The reduction in Atlanta, the world’s busiest airport and Delta Air Lines home hub, is the latest development for the airline. In July, Southwest announced it plans to get rid of open seating and offer extra legroom on its airplanes, the biggest changes in its more than half-century of flying.
Also on Wednesday, Southwest released an expanded schedule, selling tickets through June 4. In addition to the planned cuts in Atlanta, the carrier said it will boost service to and from Nashville, Tennessee. It will also start offering overnight flights from Hawaii, beginning April 8. Those include service from Honolulu to Las Vegas and Phoenix; Kona, Hawaii, to Las Vegas; and Maui, Hawaii, to Las Vegas and Phoenix.
Neel Kashkari, President and CEO, Federal Reserve Bank of Minneapolis, speaks at the Milken Conference 2024 Global Conference Sessions at The Beverly Hilton in Beverly Hills, California, U.S., May 7, 2024.
David Swanson | Reuters
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Markets regain momentum U.S. markets rose Monday, with the S&P 500 and Dow Jones Industrial Average notching fresh closing highs. Asia-Pacific stocks mostly climbed Tuesday, with the Chinese and Hong Kong markets popping over 3% on Beijing’s announcement of policy easing measures.
PBOC policy easing The People’s Bank of China Governor Pan Gongsheng on Tuesday announced a cut to banks’ reserve requirement ratio. That means banks won’t need as much cash on hand, which injects liquidity into the economy. The yields on Chinese bonds, in turn, dropped to record lows after the PBOC’s announcement.
New property stimulus in China At the same press conference, the PBOC governor also said Beijing will reduce interest rates on existing individual mortgages by an average of half a percentage point, and lower the down-payment ratio for second home purchases to 15% from 25%. Hong Kong-listed shares of property companies surged in response to the stimulus.
Revised offer for Boeing workers Amid a strike by Boeing workers, the company revised its contract offer, raising wages by 30% over four years, up from 25% it proposed earlier. Boeing reinstated annual bonuses and doubled a contract ratification bonus to $6,000 from $3,000. The labor union said Monday it is reviewing the offer.
[PRO] Tech for Big Tech The rising tide of artificial intelligence is lifting related stocks. Specialized chips, data centers and electricity are needed to power the AI boom. Companies in those sectors have seen their stocks rise. The next to benefit from AI, according to Japanese bank Nomura, is the industry specializing in cooling of data centers.
In an interview with CNBC, Minneapolis Fed President Neel Kashkari said, “We still have a strong, healthy labor market. But I want to keep it a strong, healthy labor market.” Kashkari’s emphasis on the strength of the jobs market suggests the Fed wants to reinforce the narrative that the economy’s not staring at a recession.
Atlanta Fed President Raphael Bostic was more circumspect. “Progress on inflation and the cooling of the labor market have emerged much more quickly than I imagined at the beginning of the summer,” he said at a separate event.
That Bostic was possibly surprised by the increase in the unemployment rate is an indication some Fed officials are indeed worried the jobs market isn’t as strong as it should be.
Last, in remarks to the National Association of State Treasurers, Chicago Fed President Austan Goolsbee said that “it’s appropriate to increase our focus on the other side of the Fed’s mandate — to think about risks to employment, too, not just inflation.”
Goolsbee sees “many more rate cuts over the next year” because the state of employment is a “through line on economic conditions.” That suggests economic conditions need the support of additional cuts.
Still, yesterday’s Fedspeak was sufficiently vague and didn’t seem to cause alarm.
Major U.S. indexes ticked up. The S&P rose 0.28%, the Dow advanced 0.15% and the Nasdaq Composite climbed 0.14%. While those increases appear small, they pushed the S&P and Dow to new closing highs.
The narrative the central bank has been on top of its game to ensure a soft landing, then, is very much intact.
– CNBC’s Jeff Cox, Brian Evans and Alex Harring contributed to this story.
Dutch challenger bank Bunq told CNBC that it plans to grow its global headcount by 70% this year to over 700 employees, even as other financial technology startups have decided to cut jobs.
Bunq, which operates in markets across the European Union, is looking to expand into new regions including the U.K. and the United States, taking on the fintechs already in those countries, including the likes of Britain’s Monzo and Revolut, and American neobank Chime.
Bunq said it needs corresponding talent in those regions to support its global expansion ambitions. To that end, the firm said it plans to see out the year with 735 employees globally — up 72% from its 427 members of staff at the start of 2024.
“Bunq focusses on digital nomads who tend to roam the world,” Ali Niknam, Bunq’s CEO and co-founder, told CNBC via emailed comments.
So-called “digital nomads” are defined as people who travel freely while working remotely, using technology and the internet to work abroad from hotels, cafes, libraries, co-working spaces, or temporary housing.
“We’d love to be able to service our users wherever they go — given the regulatory environment we’re in, this results in us having to have a lot of extra people to make this happen,” Niknam added.
Bunq is currently in the process of applying for banking licenses in both the U.S. and U.K. Last year, the firm submitted an application for a federal banking license. And in the U.K., Bunq is awaiting a decision from financial regulators on an application to become a licensed e-money institution, or EMI.
The digital bank said it was actively looking to hire across sales and business development, product marketing, PR, affiliate marketing, and market analysis, as well as user support, development, and quality assurance.
Many of these positions will be part of a “tailored digital nomad” program that allows staff to work from anywhere in the world, Bunq said.
However, the firm stressed it’s not closing down office space and that many new hires would work in its offices, including in Amsterdam, Sofia, Istanbul, Munich, Paris, Dublin, Madrid, London, and New York City.
Over the past two years, one of the biggest stories in both the fintech and broader technology industry has been companies slashing jobs to cut back on the massive spending implemented during in the pandemic years of 2020 and 2021.
The operating environment for fintech firms has gotten tougher, meanwhile, with inflation knocking consumer confidence and higher interest rates making it harder for startups to raise money.
Meanwhile, some fintechs are looking to artificial intelligence to take on a growing number of roles.
Swedish buy now, pay later firm Klarna, for instance, said last month that it was able to reduce its workforce from 5,000 to 3,800 over the past year from attrition alone. It added that it is looking to further cut employee numbers down to 2,000 through the use of AI in marketing and customer service.
“Our proven scale efficiencies have been enhanced by our investment in AI, which has driven down operating expenses and improved gross profits,” the company said in first-half earnings.
Klarna said that its average revenue per employee had risen 73% year-over-year, thanks in no small part to the internal application of AI.
Bunq’s Niknam said he doesn’t see AI as a way to help firms reduce headcount, however.
“We’ve been deploying AI systems and solutions years before they became mainstream, [but] in our experience AI empowers our employees to be able to do better by our users, more effectively and efficiently,” he told CNBC.
Bunq earlier this year reported its first full year of profitability, generating 53.1 million euros ($58.51 million) in net profit in 2023. The business was last valued privately by investors at 1.65 billion euros.
A pilot performs a walkaround before a United Airlines flight
Leslie Josephs/CNBC
U.S. passenger airlines have added nearly 194,000 jobs since 2021 as companies went on a hiring spree after spending months in a pandemic slump, according to the U.S. Department of Transportation. Now the industry is cooling its hiring.
Airlines are close to their staffing needs but the slowdown is also coming in part because they’re facing a slew of challenges.
Annual pay for a three-year first officer on midsized equipment at U.S. airlines averaged $170,586 in March, up from $135,896 in 2019, according to Kit Darby, an aviation consultant who specializes in pilot pay.
Since 2019, costs at U.S. carriers have climbed by double-digit percentages. Stripping out fuel and net interest expenses, they’ll be up about 20% at American Airlines this year and around 28% higher at both United Airlines and Delta Air Lines from 2019, according to Raymond James airline analyst Savanthi Syth.
It is more pronounced at low-cost airlines. Southwest Airlines‘ costs will likely be up 32%, JetBlue Airways‘ up nearly 35% and Spirit Airlines will see a rise of almost 39% over the same period, estimated Syth, whose data is adjusted for flight length.
Friday’s U.S. jobs report showed air transportation employment in August roughly in line with July’s.
But there have been pullbacks. In the most severe case, Spirit Airlines furloughed 186 pilots this month, their union said Sunday, as the carrier’s losses have grown in the wake of a failed acquisition by JetBlue Airways, a Pratt & Whitneyengine recall and an oversupplied U.S. market. Last year, even before the merger fell apart, it offered staff buyouts.
Other airlines are easing hiring or finding other ways to cut costs.
Frontier Airlines is still hiring pilots but said it will offer voluntary leaves of absence in September and October, when demand generally dips after the summer holidays but before Thanksgiving and winter breaks. A spokeswoman for the carrier said it offers those leaves “periodically” for “when our staffing levels exceed our planned flight schedules.”
Southwest Airlines expects to end the year with 2,000 fewer employees compared with 2023 and earlier this year said it would halt hiring classes for work groups including pilots and flight attendants. CFO Tammy Romo said on an earnings call in July that the company’s headcount would likely be down again in 2025 as attrition levels exceed the Dallas-based carrier’s “controlled hiring levels.”
United Airlines, which paused pilot hiring in May and June, citing late-arriving planes from Boeing, said it plans to add 10,000 people this year, down from 15,000 in each 2022 and 2023. It plans to hire 1,600 pilots, down from more than 2,300 last year.
It’s a departure from the previous years when airlines couldn’t hire employees fast enough. U.S. airlines are usually adding pilots constantly since they are required to retire at age 65 by federal law.
Airlines shed tens of thousands of employees in 2020 to try to stem record losses. Packages of more than $50 billion in taxpayer aid that were passed to get the industry through its worst-ever crisis prohibited layoffs, but many employees took carriers up on their repeated offers of buyouts and voluntary leaves.
Then, travel demand snapped back faster than expected, climbing in earnest in 2022 and leaving airlines without experienced employees like customer service agents. It also led to the worst pilot shortage in recent memory.
In response, companies — especially regional carriers — offered big bonuses to attract pilots.
But times have changed. Even air freight giants were competing for pilots in recent years but demand has waned as FedEx and UPS look to cut costs.
American Airlines CEO Robert Isom said in an investor presentation in March that the carrier added about 2,300 pilots last year and that it expects to hire about 1,300 this year.
“We will be hiring for the foreseeable future at levels like that,” he said at the time.
Despite the lower targets, students continue to fill classrooms and cockpits to train and build up hours to become pilots, said Ken Byrnes, chairman of the flight department at Embry-Riddle Aeronautical University.
“Demand for travel is still there,” he said. “I don’t see a long-term slowdown.”
United Auto Workers (UAW) members and supporters on a picket line outside the ZF Chassis Systems plant in Tuscaloosa, Alabama, US, on Wednesday, Sept. 20, 2023.
Andi Rice | Bloomberg | Getty Images
Mercedes-Benz workers in Alabama have voted against union representation by the United Auto Workers, the National Labor Relations Board said Friday.
The results are a blow to the UAW’s organizing efforts a month after the Detroit union won an organizing drive of roughly 4,330 Volkswagen plant workers in Tennessee. Voting started Monday and ended Friday.
Union organizing failed with 56% of the vote, or 2,642 workers, casting ballots against the UAW, according to the NLRB, which oversaw the election. More than 90% of the 5,075 eligible Mercedes-Benz workers voted in the election, according to the results.
The NLRB said 51 ballots were challenged and not counted, but they aren’t determinative to the outcome of the election. There were five void ballots.
The union and company have five business days to file objections to the election, including any alleged interference, according to the NLRB. If no objections are filed, the election result will be certified, and the union will have to wait one year to file for a union election for a similar bargaining unit.
Mercedes-Benz in a statement said company officials “look forward to continuing to work directly with our Team Members to ensure [Mercedes-Benz US International] is not only their employer of choice, but a place they would recommend to friends and family.”
United Auto Workers President Shawn Fain (right) and UAW Secretary-Treasurer Margaret Mock (left) lead a march outside Stellantis’ Ram 1500 plant in Sterling Heights, Michigan after the union called a strike at the plant on Oct. 23, 2023.
Michael Wayland / CNBC
The loss is expected to hurt the UAW in an unprecedented organizing drive launched late last year of 13 non-union automakers in the U.S. after securing record contracts with Detroit automakers Ford Motor,General Motors and Stellantis. Those agreements included significant wage increase, reinstatement of cost-of-living adjustments and other benefits.
UAW President Shawn Fain said while the Mercedes-Benz vote was obviously not the result the union wanted, it was a valiant effort, adding the vote “isn’t a failure” but a “bump in the road.”
“While this loss stings, I’ll tell you this, we’re going to keep our heads up, keep our heads up high. These workers have nothing to do but be proud in the effort they put forth and what they’ve done,” he said Friday during a media conference. “We fought the good fight and we’re going to continue on, continue forward. Ultimately, these workers here are going to win.”
The Mercedes-Benz vote was expected to be more challenging for the union than the Volkswagen plant in Tennessee, where the union had already established a presence after two failed organizing drives in the past decade and where it faced less opposition from the automaker.
Stephen Silvia, author of “The UAW’s Southern Gamble: Organizing Workers at Foreign-Owned Vehicle Plants,” noted Mercedes-Benz replaced the plant’s leader weeks ahead of the election. He said companies routinely do this, promising workers changes at their facilities in an effort to stave of organizing.
“Companies do anti-union campaigns because they can be effective, and I think this one was effective,” said Silvia, a professor at American University in Washington, D.C. “A common piece of an anti-union campaign is firing the plant manager … That seems to have persuaded enough of the workers to vote against the union.”
Alabama Gov. Kay Ivey, who was one of six Republican governors to condemn the union’s organizing drive, hailed the outcome of the vote.
“The workers in Vance have spoken, and they have spoken clearly! Alabama is not Michigan, and we are not the Sweet Home to the UAW. We urge the UAW to respect the results of this secret ballot election,” she said.
Workers at Mercedes-Benz’s Tuscaloosa plant, located about 60 miles southwest of Birmingham, have produced more than 4 million vehicles since the plant opened in 1997, including 295,000 vehicles in 2023, according to the plant’s website.
The Alabama plant currently produces vehicles such as the gas-powered GLE and GLS Maybach SUVs as well as the all-electric EQS and EQE SUVs.
The NLRB last week said it continues to process and investigate open unfair labor practice charges filed by the UAW against automakers, including six unfair labor practice charges against Mercedes-Benz since March.
Fain said Friday the union would continue to move forward with those charges. He declined to say whether the union plans to challenge the election results, saying he’d “leave that” to the union’s legal team.
The charges allege that Mercedes-Benz has “disciplined employees for discussing unionization at work, prohibited distribution of union materials and paraphernalia, surveilled employees, discharged union supporters, forced employees to attend captive audience meetings, and made statements suggesting that union activity is futile,” the NLRB said.
While there may be similarities to the U.S. market when buying a home overseas, there are also unique challenges on the financial side of the purchase.
Oftentimes, Americans buying properties abroad end up financing the transaction with cash outright, experts say. If you do want to finance your home purchase, assess the options to consider how often you may be exposed to interest rate changes.
That’s because mortgage structures in foreign countries are more likely to have variable rates, or short terms if they are fixed-rate loans. It is rare to encounter financing options similar to the 30-year fixed rate mortgage, which is a “very American phenomenon,” said Boudreaux, a member of the CNBC Financial Advisor Council.
You also have to be mindful of the exchange rate on the foreign currency you will be transacting with, as well as the cost to trade your U.S. dollars. Fluctuations in rates, and the differences in banks’ rates and fees, can make a significant difference in how far your dollars go.
A bank wire is often the “least expensive way” to exchange currency, and with a large enough bank, they’ll have facilities that can reduce the cost of the foreign transfer like a favorable exchange rate, said Boudreaux.
But in most cases, the U.S. buyer will need to open a bank account in the country they’re buying real estate. And that process is not always straightforward.
For one, many banks will refuse to work with U.S. citizens because the Bank Secrecy Act of the U.S. requires foreign entities to report assets, he explained.
In addition, smaller, regional banks might not be equipped to handle that reporting, so U.S. citizens will generally need to seek larger institutions, Boudreaux said.
Before you acquire a property outside of the U.S., it’s also important to make sure you have a clear picture of what you will use it for; your tax responsibilities to the foreign country and the U.S. may change depending on that answer.
Here are three steps experts recommend you take before you become a homeowner overseas:
1. ‘Do a lot of due diligence’
When you visit the city or town where you want to buy, make sure to walk around a lot, said Bojan Mujcin, a real estate associate of Sotheby’s International Realty in Barcelona and the nearby region of Costa Brava.
“Get familiar with the city, get familiar with the streets … do a lot of due diligence,” Mujcin said.
Rent in that area for a significant time to get a sense of the place before you “buy something on a dream,” said Boudreaux. Doing so can give you a better sense of what it’s like to live in a place.
You also may want to consider the country’s political environment, as it can be important for the long-term investment value of your property, said Erin Boisson Aries, a global luxury real estate advisor of Douglas Elliman.
“Less spontaneity and more study is important,” she said. “It’s wonderful to go on vacation and have a wonderful time, but the long-term geopolitical stability is very important.”
Boudreaux agreed: “There is political risk … and we have to be prepared for what that might entail for our investments.”
2. ‘Understand what your needs are’
It will be important for you to “understand what your needs are,” Boisson Aries said.
“Is this an investment? Are you planning to retire there? Are you planning to visit and rent it out?…You have to really understand the environment you’re purchasing into,” she said.
For example, if you plan to rent out the property for long- or short-term stays, “zoning very much factors into that,” Boisson Aries said.
Rules that determine what areas are eligible for short-term rentals can change over time, Boudreaux said.
“Buying these direct properties for that purpose is something that comes with far more risks than people realize,” he said.
And if you do decide to use the property for rental or commercial use, you may have additional tax burdens in that country, Boudreaux added.
3. Contact local experts and expat communities
“Make sure you have local experts and professionals advising you” when shopping in housing markets outside of the U.S., said Boisson Aries. “There are so many variables that affect each purchase.”
Such factors can include ownership rights, zoning implications and investment opportunities, she said.
“You might go over and fall in love with the property, but without really understanding the overall market, all of the other implications to purchasing and ownership, you’re flying a little blindly,” she said. “Just as we’re experts and advisors on the ground in Manhattan … you really do need that level of expertise on the ground.”
Speak with a legal advisor in the foreign country who can help navigate tax issues and other questions you may have, Sotheby’s Mujcin said.
“You definitely always need to have some legal support from some type of lawyer in the transaction,” he said.
It’s also important to find out if there’s an expat community in the country you’re eyeing, Boudreaux said.
Usually it will consist of other Americans who have gone through a similar process who can provide recommendations and resources, he added.
The monthly rise in consumer prices came out at 3.16%, led by education, communication, and hotels, restaurants and cafes, which saw month-on-month rises of 13%, 5.6%, and 3.9%, respectively.
On an annual basis, education again saw the highest cost inflation at 104% year-on-year, followed by hotels, restaurants and cafes at 95% and health at 80%.
Turkey has launched a concerted effort to tackle soaring inflation with interest rate hikes, most recently raising the country’s key rate from 45% to 50% in late March.
Much of the inflation in recent months stems from a significant increase to the minimum wage that Turkey’s government mandated for 2024. The minimum wage for the year rose to 17,002 Turkish lira (around $530) per month in January, a 100% hike from the same period a year prior.
Economists expect further rate hikes from the central bank will be necessary.
While the March inflation count represents “the smallest monthly increase in three months and suggests that the impact of the large minimum wage hike in January may now have largely passed, it is still far from consistent with the single-digit inflation that policymakers are trying to achieve,” Nicholas Farr, an Emerging Europe economist at London-based Capital Economics, wrote in an analyst note Wednesday.
“The latest inflation figures do little to change our view that further monetary tightening lies in store and that a more concerted effort to tighten fiscal policy will be needed too,” he said.
Taxes aren’t enjoyable for people of any age, but they can be particularly stressful for younger generations, many of whom may have never filed before.
In fact, 1 in 4 Gen Z taxpayers said they’ll need a therapist to deal with the stress of tax-filing season, according to a recent Cash App Taxes survey. Additionally,54% said filing taxes has either brought them to tears in the past or expect it to this year.
Richard Pianoforte, managing director of tax at Fiduciary Trust International, is surprised that number isn’t higher.
“I have children in that age group…and I don’t think they’re prepared for it, school doesn’t prepare them for it, and it’s totally understandable,” he says.
As part of its National Financial Literacy Month efforts, CNBC will be featuring stories throughout the month dedicated to helping people manage, grow and protect their money so they can truly live ambitiously.
Even figuring out which documents you need to file can be anxiety-inducing, with 62% of first-time filers saying they aren’t sure where to get their W-2s or 1099s.
“Make sure you know what [documents] you have,” Pianoforte says. “I think that’s the biggest issue when you ask younger folks, ‘Did you get a 1099 from your bank?’ Sometimes they don’t even know what a 1099 is.”
To take the stress out of taxes, young filers should start by making a list of necessary documents to form their own guide, which can be used this year and in the future, says Pianoforte.
Read on to learn the main documents you’ll need and where to find them.
1. Form W-2
The first form you’ll want to collect is your W-2, or Wage and Tax Statement. You will receive a W-2 form from your employer if you worked for a paycheck or earned at least $600 in 2023. This form reports the income your employer paid you as well as how much it withheld in taxes.
Employers are required by the Internal Revenue Service to mail out W-2s by Jan. 31, but if you don’t have a paper copy of the form, don’t worry — some employers also make W-2s available online via your HR department or payroll processor, says Pianoforte.
If you still don’t have a W-2 from your employer, contact them to make sure they have the right address on file.
People who worked as freelancers or independent contractors last year will receive a 1099-NEC form from their employer instead of a W-2 to report income.
2. Form 1099-INT
Thanks to high interest rates in 2023, you might have received a 1099-INT form from your bank if you earned $10 or more in interest on your savings account.
Look out for this even if you haven’t received one before. “In prior years, it could have been under $10, so they didn’t get that form,” Pianoforte says.
You can find the 1099-INT form by logging into your bank account and following directions to tax documents. Other interest-earning products, like investment accounts, will also have a 1099-INT form.
3. Form 1099-MISC or other crypto documents
Roughly 55% of Gen Z investors currently invest in cryptocurrency — and it’s their responsibility to report any crypto earnings to the government when filing taxes.
“People still think that crypto is kind of invisible to regulators,” Shehan Chandrasekera, a certified public accountant, told CNBC Make It. “Truthfully, there are so many ways the IRS knows you’ve had something to do with crypto.”
Centralized exchanges like Coinbase should send you a 1099-MISC form if you earned $600 or more last year. But even if you don’t get a form from your exchange, “that doesn’t mean you don’t need to report it,” says Pianoforte.
Keeping track of your crypto transactions can be difficult, but tax software tools like CoinTracker or Koinly can help generate the necessary tax forms when filing, Douglas Boneparth, certified financial planner and president of Bone Fide Wealth, told CNBC Make It.
The IRS’s frequently asked questions on crypto transactions is also helpful for answering more detailed questions about how to report crypto on your taxes.
4. Form 1098-T
If you’re paying college tuition, a 1098-T form will help determine which education-related tax credits you’re eligible for. This form is usually found through your school directly, says Pianoforte.
It’s important to note that your 1098-T doesn’t include student loans. If you paid $600 or more in student loan interest, you should have received a 1098-E, which can be found through your loan servicer.
Almost half of the members of Gen Z surveyed by Cash App Taxes were unsure of the tax deadline. You’ll want to file your federal individual income tax return by April 15, also known as Tax Day.
Luckily, there are many resources online to help young filers navigate tax season. Pianoforte recommends checking out the IRS website, which has an Interactive Tax Assistant tool that can address questions specific to your individual tax circumstances, as well as an extensive FAQ page.
“I would start there,” he says. “[The IRS site] is a great resource, and it has gotten much better throughout the years.”
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Microsoft CEO Satya Nadella arrives to court in San Francisco on June 28, 2023. Microsoft and Activision Blizzard CEOs are expected to testify to persuade a federal judge in California to reject the Federal Trade Commission’s effort to block their $69 billion deal.
Shelby Knowles | Bloomberg | Getty Images
A group of roughly 600 software testers at Activision on Friday formed the U.S. video game industry’s largest union so far.
The union is the first to organize under a new labor agreement negotiated as part of Microsoft’s $69 billion acquisition of Activision in October, the company’s largest takeover yet.
The agreement required Microsoft to remain neutral about employees who express interest in unionizing and provide adequate lines of communication and information for those workers to decide. That labor neutrality agreement took effect after the Microsoft-Activision deal closed in October following months of regulatory pushback.
“We maintained our commitment to remain neutral during the organizing campaign, and following this vote,” Microsoft lawyer Amy Pannoni said in a statement.
Activision Quality Assurance United-CWA, the name of the union, is seeking higher wages and more career opportunities, QA tester Kara Fannon said in a statement.
The employees, who work for Activision’s quality assurance division in California, Texas and Minnesota, joined the Communications Workers of America to form their record-breaking alliance.
“Microsoft continues to keep its commitment to let workers decide for themselves whether they want a union,”said CWA President Claude Cummings Jr. in a statement.
Labor organizing in the tech industry has proliferated over the years as Big Tech firms have grown and come under more scrutiny for worker protections.
QA workers at Activision, who vet games for glitches and bugs, have particularly emphasized the need for labor protections, noticing their roles feeling undervalued compared to software engineers or developers.
Before the Microsoft-Activision deal closed, QA workers at the video game-maker’s Albany branch had also formed a union.
“QA is currently an undervalued discipline in the games and software industries,” the Albany wrote on social media at the time. “We strive to foster work environments where we are respected and compensated for our essential role in the development process.”
A spirited President Joe Biden delivered a fiery, partisan State of the Union address on Thursday, fit for an election year with enormously high stakes in a divided nation.
“Not since President Lincoln and the Civil War have freedom and democracy been under assault here at home as they are today,” Biden said early in the speech.
“What makes our moment rare is that freedom and democracy are under attack, both at home and overseas, at the very same time,” he said.
“Overseas, [President Vladimir] Putin of Russia is on the march, invading Ukraine and sowing chaos throughout Europe and beyond. If anybody in this room thinks Putin will stop at Ukraine, I assure you, he will not,” the president said to cheers from Democrats and applause from a smattering of Republicans.
“My message to President Putin is simple. We will not walk away. We will not bow down. I will not bow down,” Biden said.
The president also celebrated Sweden’s ascension into NATO earlier in the day, as Swedish Prime Minister Ulf Kristersson sat to the left of First Lady Jill Biden in her guest box.
U.S. first lady Jill Biden sits alongside Swedish Prime Minister Ulf Kristersson during U.S. President Joe Biden’s State of the Union address in the House Chamber of the U.S. Capitol in Washington, March 7, 2024.
Mandel Ngan | Afp | Getty Images
On domestic policy, Biden was even more confrontational than he was on foreign affairs, repeatedly calling out Republicans and sparring live on TV with some of the loudest voices in the GOP caucus.
As a coterie of conservative Supreme Court justices sat just feet away from him, Biden excoriated them for overturning the reproductive rights enshrined in Roe vs. Wade.
“In its decision to overturn Roe v. Wade, the Supreme Court majority wrote that, ‘women are not without … electoral or political power,'” Biden said.
Then he paused and said to them, “You’re about to realize just how much.” With that, Democrats in the chamber jumped to their feet and clapped and cheered.
Biden also went toe to toe with Republicans over a border security bill.
“In November, my team began serious negotiations with a bipartisan group of senators. The result was a bipartisan bill with the toughest set of border security reforms we’ve ever seen in this country,” said Biden.
U.S. Rep. Marjorie Taylor Greene, R-Ga., yells at U.S. President Joe Biden as he delivers the State of the Union address at the U.S. Capitol in Washington, March 7, 2024.
Evelyn Hockstein | Reuters
As Republicans booed the bill that they agreed to in the Senate, but then sunk in the House, Biden turned to his left, where Republican members were seated.
“Oh, you don’t think so? You don’t like that bill, huh? Darn, that’s amazing,” he said.
“Because that bipartisan deal would hire 1,500 more border security agents and officers, 100 more immigration judges to help tackle a backload of 2 million cases.”
Again and again, Biden met Republican interruptions and boos in real time with quips and jabs that appeared to disarm them.
Overall, the speech was a clear, and effective, effort to convey to the public and to his party that he is a candidate ready for a fight in November.
Black women are outpacing Black men when it comes homebuying.
Single female homebuyers are most common among Black women, representing 27% of Black homebuyers, according to the 2023 Snapshot of Race and Home Buying in America report by the National Association of Realtors. To compare, single women represent 24% of Asian homebuyers, 17% of white buyers and 7% of Hispanic buyers.
Female buyers represented 32.4% of all Black homebuyers between October 2017 and September 2018, according to a 2022 data analysis by Realtor.com. The share jumped to 35.4% from October 2020 to September 2021.
The share of Black female homebuyers grew at an average annual rate of 7.3% from October 2018 to January 2020. Black male buyers only grew at an annual rate of 3.4% during the same period, Realtor.com found.
But single Black women buyers still face plenty of challenges.
“There are instances where Black people are buying homes, Black women are buying homes. That doesn’t mean that it’s easy for them and that doesn’t mean that it’s not being made unnecessarily difficult by certain societal hurdles that stand in the way, that should not exist,” said Jacob Channel, a senior economist at LendingTree.
“I think it’s demonstrably true if you’re a Black woman in America, you’re probably going to have a harsh time buying a house in many circumstances,” he said.
1. Education debt: While Black women are becoming more educated, it also means they are more likely to have student loans. Compared to other female undergraduate borrowers, Black women carry the most undergraduate student loan debt, averaging $41,466.05 a year after graduation, according to Bankrate.Â
Higher student loan debt can make it harder to save for a down payment and qualify for mortgages. Lenders consider student loan payments when figuring out how much you can afford.
2. Mortgage access: Lending standards in the early 2000s were more relaxed than they are today, said Channel. Single Black women were less likely to be homeowners in 2021 compared to 2007, according to a report by the National Women’s Law Center.
That said, those who got mortgages before the Great Recession often didn’t fare well: Banks were more likely to offer Black women high-cost mortgages and when the housing market crashed, women of color were overrepresented in foreclosures, the report found.
During the Great Recession, Black women were 256% more likely to have a subprime mortgage compared to white male borrowers of similar economic circumstances, said Sarah Hassmer, director of housing justice at the National Women’s Law Center.Â
3. Low-wage jobs: Black women, as well as Latinas, are also disproportionately represented in low-wage jobs such as child care and hospitality work.
“These jobs are vastly undervalued but critical to our economy,” Hassmer said.
The median hourly wage of a child care worker in 2022 was $13.71 per hour, or $28,520 annually, according to the U.S. Bureau of Labor Statistics.Â
“That makes it very hard to afford a down payment, which is one of the biggest obstacles to afford a home,” Hassmer said.
As consumers watch their wallets, companies have felt pressure from investors to do the same. Executives have sought to show shareholders that they’re adjusting to consumer demand as it returns to typical patterns or even softens, as well as aggressively countering higher expenses.
Airlines, automakers, media companies and package giant UPS are all digesting new labor contracts that gave raises to tens of thousands of workers and drove costs higher.
Companies in years past could get away with passing on higher costs to customers who were willing to splurge on everything from new appliances to beach vacations. But businesses’ pricing power has waned, so executives are looking for other ways to manage the budget â or squeeze out more profits, said Gregory Daco, chief economist for EY.
“You are in an environment where cost fatigue is very much part of the equation for consumers and business leaders,” Daco said. “The cost of most everything is much higher than it was before the pandemic, whether it’s goods, inputs, equipment, labor, even interest rates.”
There are some exceptions to the recent cost-cutting wave: Walmart, for example, said last month that it would build or convert more than 150 stores over the next five years, along with a more than $9 billion investment to modernize many of its current stores.
And some companies, such as banks, already made deep cuts. Five of the largest banks, including Wells Fargo and Goldman Sachs, together eliminated more than 20,000 jobs in 2023. Now, they’re awaiting interest rate cuts by the Federal Reserve that would free up cash for pent-up mergers and acquisitions.
But cost reductions unveiled in even just the first few weeks of the year amount to tens of thousands of jobs and billions of dollars. In January, U.S. companies announced 82,307 job cuts, more than double the number in December, while still down 20% from a year ago, according to Challenger, Gray and Christmas.
And the tightening of months prior is already showing up in financial reports.
So far this earnings season, results have indicated that companies have focused on driving profits higher without the tailwind of big price increases and sales growth.
As of mid-February, more than three-quarters of the S&P 500 had reported fourth-quarter results, with far more earnings beats than revenue beats. The quarter’s earnings, measured by a composite of S&P 500 companies, are on pace to rise nearly 10%. Revenues, however, are up a more modest 3.4%.
And the layoffs haven’t been contained to tech. UPS said it was axing 12,000 jobs, saving the company $1 billion, CEO Carol Tome said late last month, citing softer demand. Many of the largest retail, media and entertainment companies have also announced workforce reductions, in addition to other cuts.
Warner Bros. Discovery has slashed content spending and headcount as part of $4 billion in total cost savings from the merger of Discovery and WarnerMedia. Disney initially promised $5.5 billion in cost reductions in 2023, fueled by 7,000 layoffs. The company has since increased its savings promise to $7.5 billion, and executives suggested in its Feb. 7 quarterly earnings report that it may exceed that target.
JetBlue Airways, which hasn’t posted an annual profit since before the pandemic, is deferring about $2.5 billion in capital expenditures on new Airbus planes to the end of the decade, culling unprofitable routes and redeploying aircraft in addition to the worker buyouts.
Some cuts are even making their way to the front of the cabin. United Airlines, which also posted a profit in 2023, at the start of this year said it would serve first-class meals only on flights more than 900 miles, up from 800 miles previously. “On flights that are 301 to 900 miles, United First customers can expect an offering from the premium snack basket,” according to an internal post.
Several of the country’s largest automakers, such as General Motors and Ford Motor, have lowered spending by billions of dollars through reduced or delayed investments on all-electric vehicles. The U.S.-based companies as well as others, such as Netherlands-based Stellantis, have recently reduced headcount and payroll through voluntary buyouts or layoffs.
Even Chipotle, which reported more foot traffic and sales at its restaurants in the most recently reported quarter, is chasing higher productivity by testing an avocado-scooping robot called the Autocado that shortens the time it takes to make guacamole. It’s also testing another robot that can put together burrito bowls and salads. The robots, if expanded to other stores, could help cut costs by minimizing food waste or reducing the number of workers needed for those tasks.
Industry experts have chalked up some recent cuts to companies catching their breath â and taking a hard look at how they operate â after an unusual four-year stretch caused by the pandemic and its fallout.
EY’s Daco said the past few years have been marked by a mismatch in supply and demand when it comes to goods, services and even workers.
Customers went on shopping sprees, fueled by government stimulus and less experience-related spending. Airlines saw demand disappear and then skyrocket. Companies furloughed workers in the early pandemic and then struggled to fill jobs.
He said he expects companies this year to “search for an equilibrium.”
“You’re seeing a rebalancing happening in the labor markets, in the capital markets,” he said. “And that rebalancing is still going to play out and gradually lead to a more sustainable environment of lower inflation and lower interest rates, and perhaps a little bit slower growth.”
The auto industry, for example, faced a supply issue during much of the Covid pandemic but is now facing a potential demand problem. Inventories of new vehicles are rising â surpassing 2.5 million units and 71 days’ supply toward the end of 2023, up 57% year over year, according to Cox Automotive â forcing automakers to extend more discounts in an effort to move cars and trucks off dealer lots.
Automakers have also been contending with slower-than-expected adoption of EVs.
David Silverman, a retail analyst at Fitch Ratings, said companies are “feeling a bit heavy as sales growth moderates and maybe even declines.”
Cost cuts at UPS, Hasbro and Levi all followed sales declines in the most recent fiscal quarter. Macy’s, which reports earnings later this month, has said it expects same-store sales to drop, and there’s early evidence that may come to bear: Consumers pulled back on spending in January, with retail sales falling 0.8%, more than economists expected, according to the latest federal data.
Most major retailers, including Walmart, Target and Home Depot, will report earnings in the coming weeks.
Credit ratings agency Fitch said it doesn’t expect the U.S. economy to tip into recession, but it does anticipate a continued pullback in discretionary spending.
“Part of companies’ decision to lower their expense structure is in line with their views that 2024 may not be a fantastic year from a top-line-growth standpoint,” Silverman said.
Plus, he added, companies have had to find cash to fund investments in newer technology such as infrastructure that supports e-commerce, a resilient supply chain or investments in artificial intelligence.
Companies may have another reason to cut costs now, too. As they see other companies shrinking the size of their workforces or budgets, there’s safety in numbers.
Or as Silverman noted, “layoffs beget layoffs.”
“As companies have started to announce them it becomes normalized,” he said. “There’s less of a stigma.”
Even with rolling layoffs, the labor market remains strong, which may help explain why Wall Street has by and large rewarded those companies that have found areas to save and returned profits to shareholders.
Shares of Meta, for example, almost tripled in price in 2023 in that “year of efficiency,” making the stock the second-best gainer in the S&P 500, behind only Nvidia. After laying off more than 20,000 workers in 2023, Meta on Feb. 2 announced its first-ever dividend and said it expanded its share buyback authorization by $50 billion.
UPS, fresh from job cuts, said it would raise its quarterly dividend by a penny.
Overall, dividends paid by companies in the S&P 500 rose 5.05% last year, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, and he estimated they will likely increase nearly 5.3% this year.
â CNBC’s Michael Wayland, Alex Sherman, Robert Hum, Amelia Lucas and Jonathan Vanian contributed to this story.
Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.
Unlike credit cards, banks typically don’t review your credit score when you open a bank account, such as a checking account or savings account. Instead, banks and credit unions will review your information with a reporting agency that tracks banking activity, such as ChexSystems. Your ChexSystems report includes information about account openings, closings, overdrafts and more.
If you have negative marks on your ChexSystems report, such as closing an account with a negative balance, it will be more difficult to be approved for a new deposit account. However, some checking accounts are designed for people in this situation. These accounts are usually referred to as second chance accounts, and your ChexSystem report usually isn’t reviewed as part of your application.
CNBC Select compared options from some of the top financial institutions to round up the best second-chance checking accounts. (See our methodology for more information on how we made this list.)
Bank Account Services are provided by Varo Bank, N.A., Member FDIC.
Monthly maintenance fee
Minimum balance
Free ATM network
More than 40,000+ fee-free in-network Allpoint ATMs in the U.S.
Overdraft fee
Minimum deposit to open
Annual Percentage Yield (APY)
Mobile check deposit
Pros
Huge ATM network
No monthly fee and no overdraft fee
No minimum balance
Cons
No APY
No physical locations
Who’s this for? Varo is great for those who want the convenience of mobile banking and an opportunity to earn cash back on select debit card purchases.
Standout benefits: With a Varo debit card, you can earn up to 6% cash back (up to $50 back per month) on eligible purchases with specific retailers. These offers vary, but in the past have included brands such as McDonald’s, Popeyes, Macy’s, PetSmart and Forever 21.
Standout benefits: New Chase Secure Banking account members can currently earn a $100 bonus after completing 10 qualifying transactions within the first 60 days after opening the account. Qualifying transactions include online bill payments, debit card purchases, ACH credits, Zelle transactions and Chase QuickDeposit activity.
Chime is an online-only fintech company that offers banking services through The Bancorp Bank, N.A. or Stride Bank, N.A. Its Second Chance Banking option boasts no monthly fees and no credit or ChexSystems check. Although it has no physical branches, you can deposit cash for free at Walgreens locations.
Minimum balance requirement
None
Minimum opening deposit
None
Annual percentage yield (APY)
N/A
Important fees
Overdraft fee: None
Monthly maintenance fee: None
Foreign transaction fee: None
ATM fees: No transaction fees at MoneyPass ATMs at 7-Eleven locations and Allpoint or Visa Plus Alliance ATMs
Varo is an online-only national bank. It has no monthly fees, no overdraft fees and no minimum balance requirement. Customers have access to more than 40,000 fee-free ATMs, and those with direct deposits set up can get access to their funds up to two days early.
Minimum balance requirement
None
Minimum opening deposit
None
Annual percentage yield (APY)
N/A
Important fees
Overdraft fee: None
Monthly maintenance fee: None
ATM fees: No fees at U.S.-based All-Point ATMs; $3.50 fee for cash withdrawals at non-All-Point ATMs and international ATMs
Chase Secure Banking℠ has a small monthly maintenance fee with no way to waive it, but the account’s welcome bonus can ease the sting of that fee significantly. As one of the biggest banks in the U.S., customers have access to a large ATM network and more than 4,700 physical branches. Other perks include Chase Credit Journey, allowing you access to your free credit score and identity fraud alerts.
Minimum balance requirement
None
Minimum opening deposit
None
Annual percentage yield (APY)
N/A
Important fees
Overdraft fee: None
Monthly maintenance fee: $4.95
Foreign transaction fee: 3%
ATM fees: None for Chase ATMs; $3 for non-Chase ATMs in the U.S.; $5 per withdrawal for non-Chase ATMs outside the U.S.
Wells Fargo Clear Access Banking offers a clear path to eventually to a standard bank account. After 365 days, customers can convert into any Wells Fargo consumer checking account available. Although the account has a low monthly fee, there are several ways to avoid it.
Minimum balance requirement
None
Minimum opening deposit
$25
Annual percentage yield (APY)
N/A
Important fees
Overdraft fee: N/A
Monthly maintenance fee: $5, can be waived by meeting certain requirements
Foreign transaction fee: 3%
ATM fees: $0 at Wells Fargo ATMs; $2.50 at non-Wells Fargo U.S. ATMs (including U.S. territories); Up to $5 at non-Wells Fargo ATMs outside the U.S.
A second-chance bank account is a type of bank account that’s available for consumers who have had issues with overdrafts or other negative banking activity. This type of account typically doesn’t require a ChexSystems report review.
What is ChexSystems?
ChexSystems is a reporting agency that collects information about consumer banking activity. Banks and credit unions will often review your ChexSystems report when you apply for accounts such as checking or savings accounts.
Can you open a bank account if you have a negative balance at another bank?
If you have an unpaid negative account balance with one bank, it can hurt your chances of being approved for an account with a different bank. This is because this information will appear on your consumer report with agencies such as ChexSystems. In this situation, you may want to consider a second chance bank account that doesn’t require a ChexSystems review as part of the application.
If you struggled with overdraft charges, bounced checks or negative bank account balances, you’re likely to have a hard time getting approved for a new bank account. However, second-chance accounts provide an opportunity for a fresh start. There are even second-chance checking accounts available with no overdraft fees, no monthly fees and no minimum balance requirements.
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At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every bank account review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of banking products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best second-chance checking accounts.
To determine the best second-chance checking accounts CNBC Select analyzed U.S. checking accounts offered by online and brick-and-mortar banks. We narrowed down our rankings by only considering checking accounts that don’t require a ChexSystems review as part of the application process.
We also compared each checking account on other features, including:
All of the accounts included on this list are covered by the Federal Deposit Insurance Corporation (FDIC) and insured up to $250,000. This insurance protects and reimburses you up to your balance and the legal limit in the event your financial institution fails.
*Chime is a financial technology company, not a bank. Banking services and debit card provided by The Bancorp Bank N.A. or Stride Bank, N.A., Members FDIC, pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit cards are accepted.
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
A trader works, as a screen displays a news conference by Federal Reserve Board Chairman Jerome Powell following the Fed rate announcement, on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., January 31, 2024.
Brendan McDermid | Reuters
This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.
Wall Street retreats U.S. stocks lost ground on Monday and Treasury yields rose amid lingering concerns that the Federal Reserve may not cut rates as much as expected. The blue-chip Dow fell over 200 points. The S&P 500 also slumped after hitting a record high last week. The Nasdaq Composite also dropped 0.2%.
Oil’s supply crunch The oil market faces a supply crunch by the end of 2025 as the world is not replacing crude reserves fast enough, according to Occidental CEO Vicki Hollub. About 97% of the oil produced today was discovered in the 20th century, she told CNBC.
Palantir surges Shares of Palantir spiked 19%in extended trading after the company reported revenue that topped analysts’ estimates. In a letter to shareholders, Palantir CEO Alex Karp said demand for large language models in the U.S. “continues to be unrelenting.”
Red Sea tensions Higher shipping costs due to tensions in the Red Sea could hinder the global fight against inflation, said the Organisation for Economic Co-operation and Development. Clare Lombardelli, chief economist at the OECD, told CNBC that shipping-driven inflation pressures remain a risk rather than its base case.
[PRO] Banking allure The banking sector offers attractive opportunities despite an increase in volatility, according to fund manager Cole Smead. “It’s the banks that made bad decisions that are making [other] banks look attractive in pricing,” Smead told CNBC, who picked two bank stocks that are in play.
Investors are once again getting ahead of themselves on the Fed’s next move.
Markets were rattled after Federal Reserve Chair Jerome Powell reiterated the central bank is unlikely to rush to lower interest rates.
Wall Street has been parsing his hawkish comments, yet in essence what Powell said over the weekend was no different than what he shared at Wednesday’s press conference: that he wants to see more evidence that inflation is coming down to a sustainable level.
Still, the debate over the timing of rate cuts unsettled Fed watchers.
This sparked a sell-off spurred by higher bond yields. The yield on the 10-year Treasury spiked for a second day, trading around 4.163%. Typically, higher yields tend to indicate investors think the Fed will take longer to cut rates.
Fresh data out Monday also didn’t help. A new survey showed the U.S. services sector expand at a faster-than-expected clip in January.
This on top of the booming jobs report released Friday, fueled investor worries that rates may stay elevated for much longer.
Wall Street will now look ahead to the swath of Fed speakers this week. Perhaps they will shed more light on the path for rate cuts.
Over the course of 2023, U.S. employers added 2.7 million people to their payrolls, according to government data. Unemployment hit a 54-year low at 3.4% in January 2023 and ticked up just slightly to 3.7% by December.
“The labor market has been fairly strong and surprisingly resilient,” said Daniel Zhao, lead economist at Glassdoor. “Especially after 2023 when we had headlines about layoffs and forecasts of recession.”
But active job seekers say the labor market feels more difficult than ever.
A 2023 survey from staffing agency Insight Global found that recently unemployed full-time workers had applied to an average of 30 jobs, only to receive an average of four callbacks or responses.
“Between the news, the radio, and politicians just talking about how the economy is so great because unemployment is low and just hearing all that, I just want to scream from the rooftops: Then how come no one can find a job?” said Jenna Jackson, a 28-year-old former management consultant from Ardmore, Pennsylvania. She has been actively looking for a job since her layoff four months ago.
“I haven’t quantified how many applications I’ve applied to but it’s definitely in the hundreds at least,” Jackson said.
More than half, 55%, of unemployed adults are burned out from searching for a new job, Insight Global found. Younger generations were affected the most, with 66% complaining of burnout stemming from job search.
A major reason could be the fact that the labor market is cooling.
“There’s less of a frenzy on the part of the employers,” according to Peter Cappelli, a management professor at the University of Pennsylvania. “If you’re somebody who wants a job, you would like a frenzy on the part of the employers because you would like to have lots of people trying to hire you.”
“How people feel about the job market is informed by their recent experiences with the job market,” Zhao said. “In 2021 and 2022, there were labor shortages, so [employers] were offering all kinds of perks and benefits to try to get people in the door. So even if 2024 is shaping up to be a relatively healthy labor market by recent comparison, it doesn’t feel quite as strong.”
Watch the video above to find out why getting a job feels harder than ever.
A worker delivers Amazon packages in San Francisco on Oct. 5, 2022.
Bloomberg | Bloomberg | Getty Images
Amazon is laying off some employees in its Buy with Prime unit, the company confirmed, as it continues to look for ways to trim costs.
The cuts affect fewer than 5% of staff in the Buy with Prime division, Amazon said. Buy with Prime is a service that lets online stores offer the same two-day shipping benefits available to Prime subscribers. Amazon has expanded the program since its launch in April 2022, including tie-ups with Shopify and Salesforce.
Amazon didn’t say how many staffers are in its Buy with Prime segment.
“We regularly review the structure of our teams and make adjustments based on the needs of the business and, following a recent review, we’ve made the difficult decision to eliminate a small number of roles on our Buy with Prime team,” an Amazon spokesperson said in a statement.
The spokesperson said Buy with Prime remains “a top priority for Amazon” and the company plans to continue investing “significant resources” in the program.
Some of the affected employees worked in Amazon’s multichannel fulfillment unit, which sits alongside Buy with Prime under the “Project Santos” organization, overseen by Peter Larsen, a longtime vice president at the company, a person with knowledge of the cuts said. Multichannel fulfillment allows merchants to ship and store products using Amazon’s services regardless of whether they’re selling on the home site.
Amazon has cut more than 27,000 jobs across the company as part of rolling layoffs that began in late 2022. Job reductions have continued this year, with Amazon letting go staffers in its Prime Video, MGM, Twitch, Audible and Amazon Pay units last week. Other tech companies including Google, Discord, Xerox and Unity have also announced layoffs since the start of the new year.
Amazon said it’s assisting Buy with Prime employees who were laid off in finding new roles elsewhere within the company. Employees will continue to receive their pay and benefits for at least 60 days, and they will be eligible for a severance package.
