ReportWire

Tag: labor

  • U.S. Supreme Court preserves near-term access to abortion pill mifepristone

    U.S. Supreme Court preserves near-term access to abortion pill mifepristone

    [ad_1]

    WASHINGTON (AP) — The Supreme Court on Friday preserved women’s access to a drug used in the most common method of abortion, rejecting lower-court restrictions while a lawsuit continues.

    The justices granted emergency requests from the Biden administration and New York–based Danco Laboratories, maker of the drug, called mifepristone. They are appealing a lower-court ruling that would roll back Food and Drug Administration approval of mifepristone.

    The drug has been approved for use in the U.S. since 2000 and more than 5 million people have used it. Mifepristone is used in combination with a second drug, misoprostol, in more than half of all abortions in the U.S.

    The court faced a self-imposed Friday night deadline to decide whether women’s access to a widely used abortion pill would remain unchanged or be restricted while a legal challenge to its Food and Drug Administration approval goes on.

    The justices have been weighing arguments that allowing restrictions contained in lower-court rulings to take effect would severely disrupt the availability of the drug, mifepristone, which is used in the most common abortion method in the United States.

    It has repeatedly been found to be safe and effective, and has been used by more than 5 million women in the U.S. since the FDA approved it in 2000.

    The Supreme Court had initially said it would decide by Wednesday whether the restrictions could take effect while the case continues. A one-sentence order signed by Justice Samuel Alito on Wednesday gave the justices two additional days, without explanation.

    Abortion opponents filed suit in Texas in November, asserting that FDA’s original approval of mifepristone 23 years ago and subsequent changes were flawed.

    Matthew Kacsmaryk, shown listening to a question during his confirmation hearing before the Senate Judiciary Committee in 2017, is the lone federal judge in his north Texas district — a fact that led to speculation among critics that the abortion-pill case had landed in his courtroom via judge shopping.


    Senate Judiciary Committee/AP

    Further context (March 2023): Trump appointee in single-judge federal district in Texas could bar nationwide access to the abortifacient mifepristone

    Also (April 2023): Access to abortion pill in limbo after competing rulings in Texas and Washington

    They won a ruling on April 7 by U.S. District Judge Matthew Kacsmaryk, an appointee of former President Donald Trump, revoking FDA approval of mifepristone. The judge, the lone judge in his Amarillo, Texas, federal district, gave the Biden administration and Danco a week to appeal and seek to keep his ruling on hold.

    Responding to a quick appeal, two more Trump appointees on the 5th U.S. Circuit Court of Appeals said the FDA’s original approval would stand for now. But Judges Andrew Oldham and Kurt Englehardt said most of the rest of Kacsmaryk’s ruling could take effect while the case winds through federal courts.

    MarketWatch contributed.

    [ad_2]

    Source link

  • BuzzFeed stock plunges over 20% as media company shuts down BuzzFeed News, cuts jobs

    BuzzFeed stock plunges over 20% as media company shuts down BuzzFeed News, cuts jobs

    [ad_1]

    BuzzFeed Inc. said Thursday it is shutting down BuzzFeed News and laying off about 15% of its workforce as founder and Chief Executive Jonah Peretti said it has faced “more challenges than I can count.”

    BuzzFeed stock
    BZFD,
    -19.71%

    initially fell as much as 25% after the news. HuffPost and BuzzFeed.com will open “a number of select roles for members of BuzzFeed News,” Peretti said in a memo to staff. HuffPost, which is profitable and enjoys a “loyal direct front page audience,” will be BuzzFeed’s single news brand.

    “We’ve faced more challenges than I can count in the past few years: a pandemic, a fading SPAC market that yielded less capital, a tech recession, a tough economy, a declining stock market, a decelerating digital advertising market and ongoing audience and platform shifts,” Peretti said in the memo.

    “Dealing with all of these obstacles at once is part of why we’ve needed to make the difficult decisions to eliminate more jobs and reduce spending.”

    The CEO also said he and executives could have “managed these changes better.” The integration of BuzzFeed and Complex, which BuzzFeed bought in 2021 for $300 million, “should have been executed faster and better.”

    BuzzFeed went public in December 2021 through a merger with a special-purpose acquisition company, or SPAC. The deal valued BuzzFeed at $1.5 billion.

    The acquisition of Complex, then a joint venture between Hearst and Verizon Communications Inc. that catered to millennials and Gen Zers, was a bid to open up other revenue streams and rely less on advertising.

    BuzzFeed Inc. bought HuffPost from an unit of Verizon in November 2020.

    Peretti said he decided to “overinvest” in BuzzFeed News “because I love their work and mission so much,” which made him slow “to accept that the big platforms wouldn’t provide the distribution or financial support required to support premium, free journalism purpose-built for social media.”

    Chief Revenue Officer Edgar Hernandez and Chief Operating Officer Christian Baesler are leaving as well. The focus going forward is on reducing layers in the organization, streamlining the product mix, “doubling down” on social-media creators, and bringing AI to the sales process, Peretti said in the memo.

    BuzzFeed has about 1,200 employees as of December. It had 1,368 employees across seven countries that month, and announced layoffs hitting about 12% of its workforce.

    Also Thursday, Insider, the news site formerly known as Business Insider, said it was cutting 10% of its workforce due to “economic headwinds.”

    BuzzFeed shares have lost 85% in the past 12 months, compared with losses of around 7% for the S&P 500 index.
    SPX,
    -0.60%

    [ad_2]

    Source link

  • Jobless claims climb to 245,000 and signal slight cooling in hot labor market

    Jobless claims climb to 245,000 and signal slight cooling in hot labor market

    [ad_1]

    The numbers: The number of Americans who applied for unemployment benefits last week rose by 5,000 to 245,000 and pointed to a small erosion in a robust U.S. labor market.

    New jobless claims increased from a revised 240,000 in the prior week, the Labor Department said Thursday. The figures are seasonally adjusted.

    The number of people applying for unemployment benefits is one of the best barometers of whether the economy is getting better or worse.

    New jobless claims are still very low, but they have risen from less than 200,000 in January in a sign the labor market has cooled slightly as higher interest rates dampen U.S. growth.

    Key details: Thirty-five of the 53 U.S. states and territories that report jobless claims showed a decrease last week. Eighteen posted an increase.

    Most of the increase in new jobless claims were in New York, where new filings typically rise during school breaks and fall immediately afterward.

    Other states reported little change.

    The number of people collecting unemployment benefits in the U.S., meanwhile, jumped by 61,000 to 1.87 million in the week ended April 8. That’s the highest level since November 2021.

    The gradual increase in these so-called continuing claims suggests it’s taking longer for people who lose their jobs to find new ones.

    Big picture: Wall Street is watching jobless benefits closely because it’s one of the first indicators to start blinking red when the U.S. is headed toward recession.

    New jobless claims have crept higher this year after touching a 54-year low, pointing to some cooling in a hot labor market. But the labor market is still quite strong

    The Federal Reserve wants the labor market to cool even further to temper a sharp increase in wages and help the bank combat high inflation. A series of interest-rate increases by the central bank have slowed the economy and eventually should curb the appetite for workers.

    Looking ahead: “With talk of deteriorating economic conditions and in the wake of the recent bank failures, businesses may turn more cautious in their hiring practices,” said senior economic advisor Stuart Hoffman of PNC Financial Services.

    “Our view remains that layoffs will rise less dramatically than normally might occur as companies do all they can to avoid shedding workers who have been incredibly difficult to recruit and retain,” said chief economist Joshua Shapiro of MFR Inc.

    Market reaction: The Dow Jones Industrial Average
    DJIA,
    -0.44%

    and S&P 500
    SPX,
    -0.60%

    were set to open lower in Thursday trades.

    [ad_2]

    Source link

  • Employees asked about their canceled bonuses. The CEO warned them against living in ‘Pity City.’

    Employees asked about their canceled bonuses. The CEO warned them against living in ‘Pity City.’

    [ad_1]

    The chief executive of the high-end office-furniture company MillerKnoll has gone viral. And probably not in a manner she would prefer.

    In a leaked Zoom call of a MillerKnoll staff town hall last month, CEO Andi Owen addressed concerns from employees about the company’s decision to withhold bonuses. It quickly descended into her lambasting staff for complaining about the move.

    “Questions came through about, ‘How can we stay motivated if we’re not going to get a bonus?‘ ” she says in the meeting recording. Owen — tapped in 2021 by Fast Company as one of the most creative people in business and celebrated that same year in the New York Times for her navigation of the coronavirus pandemic and swing-state sociopolitics — tells employees of the Zeeland, Mich., company to focus on things the company can control, such as customer service.

    From the archives (April 2021): Herman Miller and Knoll to merge in $1.8 billion deal that will create design leader as companies reimagine office

    “Don’t ask about: What are we going to do if we don’t get a bonus?” she says, growing animated, even, apparently, agitated. “Get the damn $26 million. Spend your time and your effort thinking about the $26 million we need and not thinking about what you’re going to do if you don’t get a bonus. All right? Can I get some commitment for that? I would appreciate that.”

    Though she didn’t specifically identify the significance of the $26 million figure, the company’s operating expenses rose by exactly that amount in its third quarter due to “voluntary and involuntary reductions in the company’s workforce and charges for the impairment of assets associated with the decision to cease operating fully as a stand-alone brand.”

    MillerKnoll’s third-quarterly filing showed that the furniture maker — the product of a 2021 merger of the Herman Miller and Knoll brands, behind products such as the Eames lounge chair and the Saarinen Tulip table, respectively — expects lower sales in the fourth quarter after posting a decline in orders and sales margins in the three months ending March 4.

    Owen recalls in the video that a past employer told her, “You can visit Pity City, but you can’t live there.”

    “So, people, leave Pity City,” she continues, exclaiming: “Let’s get it done.”

    “You have to be a psychopath to say this stuff to your employees when you are taking a massive bonus. Does she think they won’t find out?” asked one Twitter user.

    “Plenty going on here but one of many things that leapt out to me was that mere moments after she went with the ‘be kind to people’ bit, she was yelling at workers,” another said.

    The company said that the widely shared video clip had been taken out of context.

    “Andi fiercely believes in this team and all we can accomplish together, and will not be dissuaded by a 90-second clip taken out of context and posted on social media,” a spokesman said in a statement.

    Owen made $5 million last year. The company has yet to say how much she will make this year. The company this year has expensed $15.7 million in stock-based compensation.

    MillerKnoll shares
    MLKN,
    -2.38%

    have dropped 12% in 2023, compared with the 8% gain for the benchmark S&P 500
    SPX,
    +0.02%
    .

    Other MillerKnoll brands include Design Within Reach, acquired by Herman Miller a decade ago and recognized as having made the iconic midcentury designs of Charles and Ray Eames, Isamu Noguchi, George Nelson, and others available to a wider, if affluent, audience without engaging an interior designer; the Danish design brand Hay; and Holly Hunt.

    [ad_2]

    Source link

  • Is it safe to live near recycling centers? Questions surge after Indiana plastics site burns.

    Is it safe to live near recycling centers? Questions surge after Indiana plastics site burns.

    [ad_1]

    As the fire at an Indiana plastics-recycling storage facility burned over several days and officials scrambled to calm evacuated residents and measure air quality, larger safety questions emerged across a nation that relies on recycling to help offset the impact of teeming landfills and littered waterways.

    Authorities in the eastern part of the state on Sunday finally lifted a dayslong evacuation order after it was determined immediate environmental concerns related to the fire had passed.

    But the man-made disaster had already done its part, leaving many wondering if recycling centers — challenging to regulate because they range from small community-led efforts to major industrial facilities — are as safe as Americans think they are?

    Public health experts told MarketWatch the nation needs to take a harder look at how we store and dispose of chemicals-heavy plastics in particular, along with other recycled materials that can act as a tinderbox in certain conditions. It may be a wakeup call to the scores of Americans who embrace recycling as one of the longest-tested and straightforward solutions to help the environment. What happens after recyclable materials leave the home can be quite another story, however.

    Read: Recycling is confusing — how to be smarter about all that takeout plastic

    Worker safety in the handling of large recycling machinery remains a priority of the Occupational Safety and Health Administration (OSHA) and other agencies, but less scrutiny may be given to the emissions those workers breathe in, and in the case of the Indiana emergency, what pollution community members near a recycling center may be exposed to.

    “Any company, regardless of its intentions, must be held accountable for regulations, not only for the safety of its employees, but for the communities around it,” Dr. Panagis Galiatsatos, a pulmonologist, who is the national spokesperson for the American Lung Association, told MarketWatch.

    “This [Indiana crisis] is alarming — a good deed [such as recycling] undone by the consequences of not having sound safety precautions,” said Galiatsatos, who is also an assistant professor at the Johns Hopkins School of Medicine and helps lead community engagement for the Baltimore Breathe Center.

    As for the fire in Richmond, Ind., a college town and county seat of about 35,000 people near the Ohio border, the city’s fire chief, Tim Brown, made clear that there were known code violations by the operator of the former factory that had been turned into plastics storage for recycling or resale. This dangerous fire was a matter of “when, not if,” Brown said in the initial hours that the fire, whose origin is not yet known, burned.

    The city of Richmond’s official site about the disaster described the fire as initially impacting “two warehouses containing large amounts of chipped, shredded and bulk recycled plastic, [which] caught fire.” The site does offer cleanup help advice.

    Brown, the fire chief, reported that just over 13 of the 14 acres which made up the recycling facility’s property had burned, according to nearby Dayton, Ohio, station WDTN. Brown told reporters the six buildings at the site of the fire were full of plastic from “floor to ceiling, wall to wall,” along with several full semi-trailers. He said Sunday that fire fighters would continue to monitor for flare-ups, according to the Associated Press.

    Richmond Mayor Dave Snow said the owner of the buildings has ignored citations that dinged his operation for code violations, and the city has continued to go through steps to get the owner to clean up the property, including preventing the operator from taking on additional plastic.

    “We just wish the property owner and the business owner would’ve taken this more serious from day one,” Snow said, according to the report out of Dayton, which cited sister station WXIN. “This person has been negligent and irresponsible, and it’s led to putting a lot of people in danger,” the mayor added.

    But some environmental groups say lax enforcement puts citizens at risk.

    “Indiana is already top in the nation for water and air quality violations, but the consequences are too negligible here for industry to adhere to the laws,” said Susan Thomas, communications director at Just Transition Northwest Indiana, a climate justice group based in the state.

    “We need real solutions to the climate crisis, not more false ones that shield chronic polluters from justice,” she said.

    The Environmental Protection Agency (EPA) had collected debris samples from the Richmond fire and searched nearby grounds for any debris, which will be sampled for asbestos given the age of the buildings housing the recycling facility. Residents have been warned not to touch or mow over debris until the sample results are available. Testing was also carried out on the Ohio side of the border.

    No doubt, the catastrophe had impacted daily life. Wayne County, Ind., health department officials and fire-safety officials told residents to shelter in place and reduce outdoor activity if they even smelled smoke. According to the health department’s help line, symptoms that may be related to breathing smoke include repeated coughing, shortness of breath or difficulty breathing, wheezing, chest tightness or pain, palpitations, nausea or lightheadedness.

    Any safer than a landfill?

    When a lens on recycling is widened, it comes to light that how facilities handle their plastic and other materials may not involve much more care than that given to chemical-emitting plastic left to break down in a landfill, say the concerned public health officials.

    Of the 40 million tons of plastic waste generated in the U.S., only 5%-6%, or about two million tons, is recycled, according to a report conducted by the environmental groups Beyond Plastics and The Last Beach Cleanup. About 85% went to landfills, and 10% was incinerated. The rate of plastic recycling has decreased since 2018, when it was at 8.7%, per the study.

    Generally speaking, when plastic particles break down, they gain new physical and chemical properties, increasing the risk they will have a toxic effect on organisms, says the environmental arm of the United Nations. The larger the number of potentially affected species and ecological functions, the more likely it is that toxic effects will occur.

    And although the conditions of the Indiana fire differ from those experienced earlier this year when a Norfolk Southern Corp.
    NSC,
    +0.30%

    freight train carrying hazardous materials in several cars derailed near East Palestine, Ohio, the public’s concern for that event — which also sparked an evacuation after a chemical plume from a controlled burn — spread widely on social media.

    Now, add in Richmond. The public, at large, is increasingly wondering if officials are doing their job to prevent such disasters, and whether the full extent of chemical exposure is known.

    “This [fire in Indiana] overlaps in a general sense the chemical safety question raised by the Ohio derailment — and it shouldn’t have just been raised by that one event, but that certainly brought it into focus,” said Dr. Peter Orris, chief of occupational and environmental medicine at the University of Illinois – Chicago.

    Orris said lasting solutions pushing awareness and safety around the storage and transportation of chemicals and chemical-based plastic must span political differences over the reach of regulation. He recalled a time just after the 9/11 terror attacks when a fresh look at the transportation of toxic chemicals and the storage and shipment of ammonia and other substances that can have nefarious uses in the wrong hands drew support from unusual partners.

    “Shortly after 9/11 a rather broad coalition, including environmental interests such as Greenpeace, and consumer groups, with congressional support, alongside Homeland Security all pushed a model bill about where and how you could transport toxic chemicals, especially going through populated areas,” he said. “Dealing with new concerns around chemicals and recycling plastic may require the same breadth of interests.”

    Already, the Biden administration has shown the will to target chemical exposure in U.S. water. Earlier this year, the EPA moved to require near-zero levels of perfluoroalkyl and polyfluoroalkyl substances, part of a classification of chemicals known as PFAS, and also called “forever chemicals” due to how long they persist in the environment. Both the chemical companies and their trade groups have pushed their own steps toward reducing risk, they say. Exposure to some of the chemicals has been linked to cancer, liver damage, fertility and thyroid problems, as well as asthma and other health effects.

    Read more: Cancer-linked PFAS — known as ‘forever chemicals’ — could be banned in drinking water for first time

    And, Orris stressed, regulating recycling with a one-size-fits-all approach may not work.

    Surprisingly, it can be the smaller recycling facilities that take bigger steps in curbing emissions than their larger counterparts. Orris in recent years reported on efforts of a San Francisco recycling plant that made emissions reduction a priority, including by banning incineration. The same research trip turned up issues with a Los Angeles-area plant, exposing “real problems with its policies and procedures beginning with the neighborhood smell from organic materials to other issues with toxins.”

    How can plastic be so dangerous?

    Specifically, the chemicals that help fortify plastic for its many uses present their own unique conditions.

    As plastic is heated at high temperatures, melted and reformed into small pellets, it emits toxic chemicals and particulate matter, including volatile gases and fly ash, into the air, which pose threats to health and the local environment, says a Human Rights Watch paper, citing environmental engineering research. When plastic is recycled into pellets for future use, its toxic chemical additives are carried over to the new products. Plus, the recycling process can generate new toxic chemicals, like dioxins, if plastics are not heated at a high enough temperature.

    There are other concerns. Plastic melting facilities can emit volatile organic compounds (VOCs) and carcinogens, which in higher concentrations can pollute air both inside facilities and in areas near recycling facilities.

    “Plastics, the way they burn, put out dangerous toxins. And plastic can create its own unique chemistry even when it comes into interaction with benign chemicals,” said Galiatsatos of Johns Hopkins.

    “There are the lung issues from people breathing in these chemicals and the toxins associated with them. But there is more: systemic inflation from breathing in chemicals, and that can lead to heart disease,” he said.

    “I wish we would pay the same amount of attention to plastics, their recycling and their disposal, as we do with sewer systems. When was the last time we heard of a waste system-based cholera outbreak in the U.S.?” he asked rhetorically. “Exactly. That we care about. Yet plastics, especially the burning of chemicals, we treat too lightly.”

    [ad_2]

    Source link

  • Tesla, Netflix earnings due: Cheaper cars, cheaper content, more workout videos, as ‘earnings recession’ seems likely

    Tesla, Netflix earnings due: Cheaper cars, cheaper content, more workout videos, as ‘earnings recession’ seems likely

    [ad_1]

    For anyone watching Netflix, the streaming services’ recent moves to cut costs could mean fewer films, lower-budget shows and — depending on your subscription — more ads. For anyone buying a Tesla, its moves to cut prices will make it easier on customers, but harder on profit-seeking investors.

    With both companies reporting results this week, Wall Street will get a look at who still wants a Tesla, amid growing competition, and what kind of growth and viewership anyone can expect from Netflix, as it recalibrates its streaming ambitions and focuses more on profitability following years of rapid growth.

    Netflix Inc.
    NFLX,
    -2.18%
    ,
    which reports first-quarter results on Tuesday, is trying to crack down on shared accounts, and analysts polled by FactSet see subscriptions coming in well below the average. However, BofA analyst Jessica Reif Ehrlich said that first-quarter results would likely “mark the low point” of the year, “reflecting the initial impact of password sharing efforts in select markets.”

    Netflix will report as shareholders’ growing influence over the streaming universe raises questions over what shows and films get streamed, and for how long, as Wall Street tries to wring more bottom-line gains from an industry that boomed before and during the pandemic but burned cash and got crowded in the process. Netflix, along with Walt Disney Co.
    DIS,
    -0.93%
    ,
    have laid off employees, while Warner Brothers Discovery Inc.
    WBD,
    -1.85%

    fuses its streaming holdings together.

    “We expect Netflix to continue reining in spending, particularly by seeking alternatives to its past practices,” Wedbush analysts Alicia Reese and Michael Pachter wrote in a research note on Thursday. “The company appears to us to be producing fewer feature length films, which we have always viewed as a poor investment, and appears focused on lower cost television content.”

    “We are equally encouraged that Netflix is looking at low-cost content like workout videos, which we believe will present a lot of value to subscribers at very low cost,” they added later.

    The analysts said that they felt Netflix was well positioned, as other streamers rethink their approach to expansion and financials. And they said Netflix “should be valued as an immensely profitable, slow-growth company.” They also said that Netflix’s decision to launch a cheaper ad-supported option was a “great decision” after growth stalled in the U.S. and Canada and the company’s business in Europe, the Middle East and Africa reaches the saturation point.

    For Tesla Inc.
    TSLA,
    -0.48%
    ,
    which reports results on Wednesday, the focus for investors will be on price-cutting and its impact on margins. Still, Potter, an analyst at Piper Sandler, has said Tesla is on a “warpath” and “maintaining its aggressive approach to pricing,” and said investors “should expect relentless price cuts to continue.”

    Base prices for Tesla’s Model S and Model X have fallen by around $5,000, MarketWatch has noted, as the electric-vehicle maker tries to stimulate demand. The company is also selling a more affordable Model Y SUV.

    “Tesla concerns on pricing and a race to the bottom persisted as general sentiment on the stock is souring given recent price cuts after a brief period of stabilization,” TD Cowen analyst Jeffrey Osborne said in a note.

    Tesla will report as the Biden administration tries to take a harder stance on auto pollution. The EPA recently proposed new emissions restrictions intended to hasten electric-vehicle usage, by incrementally curtailing tailpipe emissions each year for vehicle model years 2027 through 2032. However, some analysts said the measures would push prices higher for regular and electric vehicles.

    This week in earnings

    The first-quarter earnings reporting season will pick up steam in the week ahead, with 60 S&P 500 companies, including six from the Dow Jones Industrial Average
    DJIA,
    -0.42%
    ,
    reporting quarterly results, according to FactSet. Those companies will report as Wall Street analysts remain pessimistic about results for the quarter, and the prospect of another so-called “earnings recession” in which profits contract for at least two straight quarters.

    “As of today, the S&P 500 is reporting a year-over-year decline in earnings of -6.5% for the first quarter, which would mark the largest earnings decline reported by the index since Q2 2020 (-31.6%) and the second straight quarter the index has reported a decline in earnings,” FactSet Senior Earnings Analyst John Butters said in a report on Friday.

    After investors cheered JPMorgan Chase & Co.’s
    JPM,
    +7.55%

    quarterly results on Friday — despite Silicon Valley Bank’s collapse and broader recession anxieties — other banking giants, like Bank of America Corp.
    BAC,
    +3.36%
    ,
    Goldman Sachs Group Inc.
    GS,
    +1.44%

    and Morgan Stanley
    MS,
    +1.19%

    report during the week ahead. So does Johnson & Johnson
    JNJ,
    -0.16%
    ,
    after it agreed to pay as much as $8.9 billion to settle scores of lawsuits alleging that its talc baby powder was linked to cancer. Charles Schwab Corp.
    SCHW,
    -1.40%
    ,
    United Airlines Holdings Inc.
    UAL,
    -0.71%

    and AT&T Inc.
    T,
    -0.15%

    also report during the week.

    The calls to put on your calendar

    Supply-chain update, anyone? Shipping rates have fallen. Labor tensions have risen. Railroad safety is under scrutiny. Elsewhere in that industry, hedge funders are applying pressure. Memories of 2021’s supply-chain meltdown are still fresh after it led to shipping delays and put the low-work labor that fuels much of that distribution network under a spotlight.

    At any rate, trucking and logistics company J.B. Hunt Transportation Services Inc.
    JBHT,
    +1.23%

    reports on Monday, while railroad giant CSX Corp.
    CSX,
    +0.13%

    reports on Thursday. Both companies report after a drop-off in demand for goods last year, as inflation remolded consumers’ buying habits. They also report after rail workers threatened to strike over what they said were inadequate sick-time policies. More recently, a group representing the terminal operators at the ports of Los Angeles and Long Beach alleged that dockworkers were disrupting daily operations at the two massive import gateways, as the workers’ union and the terminal operators try to work out a contract. The quarterly financial reports and earnings calls will offer a look at what the year ahead has in store.

    The number to watch

    Credit-card transactions, charge-offs: Credit-card providers Discover Financial Services
    DFS,
    +0.68%

    and American Express Co.
    AXP,
    +0.57%

    report Wednesday and Thursday, respectively. The companies will report after Discover took a hit in January after it forecast credit-card net charge-offs — a measure of debt a company doesn’t think it’ll get back — that were worse than what Wall Street expected. Similar to the results from the big banks, the results from American Express and Discover will tells us how much consumers are still spending, and whether more are falling behind on their bills, as recession anxieties prevail.

    [ad_2]

    Source link

  • Why 5% interest rates might not derail the stock market or the U.S. economy

    Why 5% interest rates might not derail the stock market or the U.S. economy

    [ad_1]

    Here’s a thought for investors: If the Federal Reserve raises interest rates to 5% or more would that wreck the economy and stock prices ?

    The U.S. stock market has been rallying to start 2023, clawing back a big chunk of the painful losses from a year ago. The bullish tone has been linked to a view that the Federal Reserve will need to cut interest rates this year to prevent a recession, reversing one of its quickest rate-increasing campaigns in history.

    Doomsday investors, including hedge-fund billionaire Paul Singer, have been warning against that outcome. Singer thinks a credit crunch and deep recession may be necessary to purge dangerous levels of froth in markets after an era of near-zero interest rates.

    Another scenario might be that little changes: Credit markets could tolerate interest rates that prevailed before 2008. The Fed’s policy rate could increase a bit from its current 4.75%-5% range, and stay there for a while.

    “A 5% interest rate is not going to break the market,” said Ben Snider, managing director, and U.S. portfolio strategist at Goldman Sachs Asset Management, in a phone interview with MarketWatch.

    Snider pointed to many highly rated companies which, like the majority of U.S. homeowners, refinanced old debt during the pandemic, cutting their borrowing costs to near record lows. “They are continuing to enjoy the low rate environment,” he said.

    “Our view is, yes, the Fed can hold rates here,” Snider said. “The economy can continue to grow.”

    Profits margins in focus

    The Fed and other global central banks have been dramatically increasing interest rates in the aftermath of the pandemic to fight inflation caused by supply chain disruptions, worker shortages and government spending policies.

    Fed Governor Christopher Waller on Friday warned that interest rates might need to increase even more than markets currently anticipate to restrain the rise in the cost of living, reflected recently in the March consumer-price index at a 5% yearly rate, down to the central bank’s 2% annual target.

    The sudden rise in interest rates led to bruising losses in stock and bond portfolios in 2022. Higher rates also played a role in last month’s collapse of Silicon Valley Bank after it sold “safe,” but rate-sensitive securities at a steep loss. That sparked concerns about risks in the U.S. banking system and fears of a potential credit crunch.

    “Rates are certainly higher than they were a year ago, and higher than the last decade,” said David Del Vecchio, co-head of PGIM Fixed Income’s U.S. investment grade corporate bond team. “But if you look over longer periods of time, they are not that high.”

    When investors buy corporate bonds they tend to focus on what could go wrong to prevent a full return of their investment, plus interest. To that end, Del Vecchio’s team sees corporate borrowing costs staying higher for longer, inflation remaining above target, but also hopeful signs that many highly rated companies would be starting off from a strong position if a recession still unfolds in the near future.

    “Profit margins have been coming down (see chart), but they are coming off peak levels,” Del Vecchio said. “So they are still very, very strong and trending lower. Probably that continues to trend lower this quarter.”

    Net profit margins for the S&P 500 are coming down, but off peak levels


    Refinitiv, I/B/E/S

    Rolling with it, including at banks

    It isn’t hard to come up with reasons why stocks could still tank in 2023, painful layoffs might emerge, or trouble with a wall of maturing commercial real estate debt could throw the economy into a tailspin.

    Snider’s team at Goldman Sachs Asset Management expects the S&P 500 index
    SPX,
    -0.21%

    to end the year around 4,000, or roughly flat to it’s closing level on Friday of 4,137. “I wouldn’t call it bullish,” he said. “But it isn’t nearly as bad as many investors expect.”

    Read: These five Wall Street veterans have 230 years of combined experience. Here’s why they are bearish on stocks.

    “Some highly levered companies that have debt maturities in the near future will struggle and may even struggle to keep the lights on,” said Austin Graff, chief investment officer at Opal Capital.

    Still, the economy isn’t likely to “enter a recession with a bang,” he said. “It will likely be a slow slide into a recession as companies tighten their belts and reduce spending, which will have a ripple effect across the economy.”

    However, Graff also sees the benefit of higher rates at big banks that have better managed interest rate risks in their securities holdings. “Banks can be very profitable in the current rate environment,” he said, pointing to large banks that typically offer 0.25%-1% on customer deposits, but now can lend out money at rates around 4%-5% and higher.

    “The spread the banks are earning in the current interest rate market is staggering,” he said, highlighting JP Morgan Chase & Co.
    JPM,
    +7.55%

    providing guidance that included an estimated $81 billion net interest income for this year, up about $7 billion from last year.

    Del Vecchio at PGIM said his team is still anticipating a relatively short and shallow recession, if one unfolds at all. “You can have a situation where it’s not a synchronized recession,” he said, adding that a downturn can “roll through” different parts of the economy instead of everywhere at once.

    The U.S. housing market saw a sharp slowdown in the past year as mortgage rates jumped, but lately has been flashing positive signs while “travel, lodging and leisure all are still doing well,” he said.

    U.S. stocks closed lower Friday, but booked a string of weekly gains. The S&P 500 index gained 0.8% over the past five days, the Dow Jones Industrial Average
    DJIA,
    -0.42%

    advanced 1.2% and the Nasdaq Composite Index
    COMP,
    -0.35%

    closed up 0.3% for the week, according to FactSet.

    Investors will hear from more Fed speakers next week ahead of the central bank’s next policy meeting in early May. U.S. economic data releases will include housing-related data on Monday, Tuesday and Thursday, while the Fed’s Beige Book is due Wednesday.

    [ad_2]

    Source link

  • ‘You don’t want to die at your desk sending an email.’ Beyond the numbers, are you ready to retire?

    ‘You don’t want to die at your desk sending an email.’ Beyond the numbers, are you ready to retire?

    [ad_1]

    Gauge retirement readiness: You don’t want to die at your desk sending an email

    [ad_2]

    Source link

  • Stanford Told Faculty Not to Publicly Share Opinions on a Grad-Student Union Drive. Then It Reversed Course.

    Stanford Told Faculty Not to Publicly Share Opinions on a Grad-Student Union Drive. Then It Reversed Course.

    [ad_1]

    Last week, soon after news broke that graduate-student workers at Stanford University had initiated a unionization campaign, a professor there weighed in with a public statement of solidarity.

    “I support the rights of Stanford Graduate Workers to unionize,” William Giardino tweeted on April 3. That tweet, he later worried, may have violated guidelines put forward by the administration that sought to limit faculty members’ social-media use about the issue. Giardino, an assistant professor of psychiatry and behavioral sciences, felt conflicted, and wondered if he should delete the tweet.

    After an outcry, those guidelines were removed. But the administration’s since-deleted statement raises questions about the role of faculty members during graduate-worker unionization efforts, particularly at private institutions, and poses implications for academic freedom.

    In response to Stanford graduate workers’ push to unionize, the university’s administration initially posted guidelines for students and faculty about the unionization effort. In an original version of the message shared with The Chronicle, Stanford included a guideline saying faculty members “should not post your opinions about union organizing on your office door, in your faculty office or on social media. You should not send letters or emails to communicate your views to graduate students regarding the pros and cons of union representation.”

    The guidelines also expressly said that faculty members can discuss and share their opinions on union organizing with graduate students, as long as they don’t threaten, interrogate, promise, or coerce graduate students on the subject.

    Since then, the guidelines have been updated to omit the part barring faculty from sharing their thoughts on social media, but they continue to state that faculty “should not” post opinions about union organizing on office doors or in faculty offices.

    But the initial version of the guidelines struck some observers as an example of administrative overreach and a restriction of faculty freedom.

    Timothy Reese Cain, an associate professor of higher education at the University of Georgia whose expertise is in labor and academic freedom, said Stanford’s initial move to restrict all faculty members’ social-media use on the topic of unionization on campus was an “explicit infringement of academic freedom.”

    In an emailed statement, Stett Holbrook, a Stanford spokesperson, said academic freedom is a “core value” at Stanford and that the administration’s initial statement about social media was meant to protect graduate students from undue influence.

    “The reference in the university’s FAQs to faculty posting on social media was included out of an interest to ensure that our faculty did not inadvertently infringe on graduate students’ rights during their publicly announced unionization drive,” Holbrook wrote. “It has been pointed out that this guidance could be misinterpreted as an infringement on academic freedom and we have removed it.”

    Employees or Managers?

    In part, the potential concerns about tenured and tenure-track faculty members exerting undue influence stem from the particular status they occupy at private institutions, according to the U.S. Supreme Court. It ruled in 1980 in National Labor Relations Board v. Yeshiva University that tenure-line faculty at such institutions have responsibilities, like participating in hiring and promotion decisions, that made them managers, not employees.

    Cain said that, while barring expression about the topic of the unionization effort was a clear violation of academic freedom, Stanford could still have a “legitimate concern” if faculty members were perceived to be coercing graduate students to either join or refrain from joining the union, because, as managers, it would be a violation of the National Labor Relations Act.

    “The issue here would be if a faculty member is viewed as a representative of the university, and they promise a graduate student some sort of outcome for voting one way or another, either a good outcome or a bad outcome, then they’re coercing them and they’re violating law,” Cain said.

    A lot has changed in 40 years. Cain said that in the “modern era,” faculty members have become increasingly concerned that strong, centralized, administrative power has limited their voice in shared governance and has distanced them from identifying with management. Additionally, Cain said, working conditions and pay issues for faculty members have, in some cases, “pushed tenure-line faculty to either support unionization or themselves organize and unionize.”

    While Stanford walked back its guidelines about posting on social media, Cain said the continued prohibition on faculty members posting opinions about the unionization efforts on their doors and in their offices raises “serious concerns” for academic freedom. It would be fine, he said, if Stanford had a blanket ban on all signage and stickers on doors and office walls in order to preserve the property; targeted bans on certain topics threaten academic freedom.

    Cain added that Stanford seems to be arguing that the presence of signage or stickers expressing a view on the union organizing is inherently coercive. “That would imply that the faculty-office space creates such a power differential that just having a faculty member express their opinions in that space, in written form or in signage or on a graphic, would tend to, maybe inherently, coerce students,” he said. “I’m not a labor lawyer, but that sort of argument about a power differential there, as being inherently coercive, seems like a leap.”

    The topic of graduate-student unionization is one that higher education is still navigating after a 2016 ruling by the National Labor Relations Board that recognized the right of graduate students at private universities to form unions. Grad students are conducting unionization drives in increasing numbers, as part of a larger groundswell of labor activity.

    For his part, Giardino, the professor who posted his support on Twitter, said that over the years, there had been many topics that Stanford probably wished faculty members didn’t discuss on social media. But he couldn’t recall administrators ever putting out a statement prohibiting speech about specific topics until the other day.

    “I don’t remember any other instance within the past almost 10 years in which faculty were specifically forbidden from expressing their opinions on social media about anything,” Giardino said, “so it definitely stands out in that regard.”

    [ad_2]

    Julian Roberts-Grmela

    Source link

  • Cutera fires CEO and Executive Chair for cause in dispute over CEO succession plan

    Cutera fires CEO and Executive Chair for cause in dispute over CEO succession plan

    [ad_1]

    Cutera Inc. CUTR, a Californian provider of dermatology equipment, said Wednesday it’s terminating its executive chairman Daniel Plants and chief executive David Mowry for cause, on the recommendation of a special committee and the majority of its board. The move comes just days after Plants and Mowry issued a statement seeking the removal of five members of the board over concerns that they haven’t made progress on a CEO succession plan. The board said Wednesday it has appointed one of those members, Sheila A. Hopkins, as interim CEO, and another, Janet D. Widmann, as independent chair effective immediately. A search…

    [ad_2]

    Source link

  • Rutgers’ President Threatened to Take Striking Instructors to Court. Then He Walked It Back.

    Rutgers’ President Threatened to Take Striking Instructors to Court. Then He Walked It Back.

    [ad_1]

    Thousands of instructors at Rutgers University joined a national surge in union activity on Monday, becoming the fifth currently active strike on a college campus.

    Three unions representing roughly 9,000 educators, researchers, and clinicians announced the strike on Sunday after nearly a year of contract negotiations. The strike will disrupt classes for Rutgers’ nearly 70,000 students across three campuses.

    Union leadership is asking its members to join the picket line and refuse to conduct teaching, research, and other business at Rutgers, according to the largest of the three unions on strike. Strikers are still permitted to complete certain responsibilities, like writing letters of recommendation for students.

    “By exercising our right to withhold our labor, we will prove to the administration that WE are the university,” the union, Rutgers American Association of University Professionals-American Federation of Teachers, wrote in a letter to its members.

    The standoff has put a harsh spotlight on Jonathan Holloway, the Rutgers president. Holloway drew pushback for initially suggesting that his administration would seek a court order to stop the strike and force a “return to normal activities.”

    The Rutgers administration walked back that threat on Monday after a meeting with New Jersey Gov. Phil Murphy, according to Rutgers spokesperson Dory Devlin.

    Murphy “asked us to delay taking legal action asking the courts to order strikers back to work so that no further irreparable harm is caused to our students and to their continued academic progress,” Devlin wrote in an email. “We agreed to his request to refrain from seeking an injunction while it appears that progress can be made.”

    A labor expert said turning to the courts amid a strike might make the situation worse. “One thing that injunctions can cause is it can actually exacerbate the conflict as opposed to hoping to resolve the conflict,” said William A. Herbert, executive director of the National Center for the Study of Collective Bargaining in Higher Education and the Professions at Hunter College in the City University of New York.

    Holloway is a scholar of African American studies and history. An open letter from over 40 prominent historians of labor and African American history — including Ibram X. Kendi, a professor at Boston University and the founder of the Center for Antiracist Research — had called on Holloway to rescind his threat of an injunction. The letter also voiced support for the striking workers.

    “We know that as an expert in African American history, you have thought deeply about how struggles for racial justice have consistently been aligned with the demands for jobs, labor rights, and democracy in the workplace,” the letter stated.

    Holloway expressed his frustration with the strike in a letter to the campus community on Sunday. “To say that this is deeply disappointing would be an understatement, especially given that just two days ago, both sides agreed in good faith to the appointment of a mediator to help us reach agreements,” Holloway wrote.

    Rutgers is facing financial woes, and Holloway said in February that the university would have to remedy a $125-million shortfall over the next three years.

    In a message to students and faculty about the strike, Rutgers wrote that it was “committed to ensuring that our more than 67,000 students are unaffected by the strike and may continue their academic progress.” Rutgers plans to continue classes and distribute grades and expects employees to report to work. The issue is a pressing one as the end of the semester looms, with finals and grades coming soon.

    Rutgers officials wrote that employees who engage in the strike “are subject to a loss of pay and/or benefits, and other sanctions as they may apply or as the court deems appropriate.”

    There is no state law that prohibits public-sector workers from striking in New Jersey, Herbert said, adding that Holloway’s argument relied on common law, or legal precedent from the courts, which have intervened in strikes from public workers in the past.

    “Although there is no state statute that bars strikes, in some instances, courts in New Jersey have issued injunctions against walkouts by public employees,” the Rutgers AAUP-AFT wrote on its website. “An injunction may require public employees to end a strike and return to work. The University administration would have to petition a court for an injunction.”

    The strike comes after 94 percent of members of two of the unions — representing primarily full- and part-time faculty and graduate workers — voted to authorize a strike in March.

    We’ve been bargaining for 10, 11 months — got virtually no response to any of our proposals, and when we did, they were paltry. They were insulting.

    The unions’ bargaining demands include increased pay to keep up with inflation for graduate workers, better job security for part-time lecturers, and more affordable housing for university community members.

    Rutgers officials have offered salary increases for faculty, postdocs, and graduate employees, but union leaders say the raises aren’t good enough.

    The university’s proposal would provide across-the-board 12-percent pay increases for full-time faculty by July 1, 2025; 3 percent in lump-sum payments to all the faculty unions to be paid out over the first two years of the new contract; a 20-percent increase in the per-credit salary rate for part-time lecturers over the four years of the contract; a 20-percent increase in the minimum salary for postdocs in four years; and higher wages for graduate assistants and teaching assistants.

    “The offers that they’re presenting still aren’t enough to guarantee a living wage for the people who are most essential, one could argue, to the successful operation of the university,” said Manu Chander, an associate professor of English at Rutgers’ Newark campus and the president of the Newark chapter of Rutgers AAUP-AFT.

    Chander said he’s on strike to improve conditions for adjunct faculty and graduate employees, whom he described as the most vulnerable workers.

    Kyle Riismandel, an associate professor of history and American studies at Rutgers and the vice president of the Newark chapter of Rutgers AAUP-AFT, said the picket line drew a large crowd on Monday.

    “We’ve been bargaining for 10, 11 months — got virtually no response to any of our proposals, and when we did, they were paltry,” Riismandel said. “They were insulting.”

    [ad_2]

    Julian Roberts-Grmela

    Source link

  • When workers are an employer’s No. 1 priority, stockholders benefit too

    When workers are an employer’s No. 1 priority, stockholders benefit too

    [ad_1]

    The deep uncertainty that the COVID pandemic created in the workforce hasn’t waned. U.S. workers are struggling with inflation, burnout, and fresh waves of layoffs. This comes as people expect more from employers — more leadership, more urgency, more action, and better jobs.

    The public’s perspective is clear and consistent: companies need to prioritize their employees. In today’s unstable economic climate, worker wages and treatment are more important to Americans than ever.

    When it comes to creating U.S. jobs with strong wages, good benefits, safe environments and opportunities for upward mobility, a handful of companies lead the pack.

    Bank of America
    BAC,
    NVIDIA
    NVDA
    and Microsoft
    MSFT
    are the top-three companies in JUST Capital’s 2023 rankings of America’s most JUST companies. They all share one crucial thing in common — a clear commitment to addressing worker issues and investing in employees.

    Since 2018, JUST Capital’s rankings have provided a snapshot of how U.S. companies are measuring up to the public’s priorities, as determined through an annual survey to identify issues that define principled business behavior. Companies that are just provide a clear benefit for investors. For example, If an investor purchased an index tracking the JUST 100 companies at its March 2019 inception, the index would have generated 13.3% in excess return versus the Russell 1000 as of December 2022.

    Worker issues have risen to the forefront of Americans’ vision for what is a just business. Paying a fair and living wage, supporting workforce advancement, protecting worker health and safety, and providing benefits and work-life balance are top priorities for the public. Notably, regardless of demographic differences including political affiliation, Americans agree that companies should do more to address worker needs. 

    What makes a great company?

    Bank of America demonstrates strong leadership on the top priority — paying a fair, living wage – by raising its minimum wage to $22 per hour, a key step in its pledge to offer a $25 starting wage by 2025. In addition, employees receive an extensive benefit package, including 16 weeks of paid parental leave for primary- and secondary caregivers, and career development opportunities through tuition assistance and professional training.

    NVIDIA works to ensure equal pay for equal work, performing detailed pay equity analyses, and is one of only a few companies to disclose pay-analysis results separated by racial and ethnic categories. Like Bank of America, NVIDIA is one of 10% of Russell 1000
    RUI
    companies that offer at least 12 weeks of paid parental leave for both caregivers, providing 22 weeks of paid leave to primary caregivers.

    Microsoft offers at least 12 weeks of parental leave for both caregivers, in addition many other generous paid-time-off benefits, including 15 days of paid vacation and an additional 10 days of paid sick leave for every worker — a policy still rare for many companies. Additionally, Microsoft discloses the results of its pay-equity analyses, going above and beyond other companies by disaggregating pay ratios for specific racial and ethnic categories — including Black, Asian and Latinx — all of whom are paid on par with their white counterparts.

    When companies ensure the economic security, advancement, equity and safety of their workforces, employees are more engaged and productive.

    These efforts provide tangible benefits to employees, but prioritizing workers offers much more to companies than just an assurance of moral good. When companies ensure the economic security, advancement, equity, and safety of their workforces employees are more engaged and productive, strengthening their companies’ business in turn.

    Americans expect the private sector to better support employees. Effective business leadership today puts workers at the center of an organization’s strategy. When businesses take this approach, we get much closer to an economy that works for all Americans.

    Alison Omens is chief strategy officer at JUST Capital. 

    Also read: Tech companies are hiring — a lot — despite recent wave of layoffs

    More: Unemployment rate is now 3.5%. Is this the last chance for job switchers to jump ship?

    [ad_2]

    Source link

  • Are U.S. markets open on Good Friday?

    Are U.S. markets open on Good Friday?

    [ad_1]

    The U.S. stock market is closed Friday, April 7, for the Good Friday holiday, but the bond market will be briefly open.

    Friday morning has seen the release of the monthly jobs report for March, a key piece of economic data that households, investors and industry leaders will be following for clues to how much further progress the Federal Reserve has been making in its inflation fight.

    The…

    [ad_2]

    Source link

  • Jobs report shows 236,000 gain in March — lifting 2023 total above 1 million — but U.S. labor market shows hints of cooling

    Jobs report shows 236,000 gain in March — lifting 2023 total above 1 million — but U.S. labor market shows hints of cooling

    [ad_1]

    The numbers: The U.S. added a robust 236,000 new jobs in March, defying the Federal Reserve’s hopes for a big slowdown in hiring as the central bank struggles to tame inflation. The consensus economist forecast called for a nonfarm-payrolls expansion of 238,000.

    The solid increase in employment last month followed a revised 326,000 gain in February and a gain of 472,000 in January.

    While the increase in hiring was the smallest monthly rise in more than two years, the number of jobs created last month was much greater than is typical.

    The U.S. economy has shown recent signs of stress.

    The unemployment rate, meanwhile, slipped to 3.5% from 3.6% as more people searched for and found work. That’s another sign of labor-market vigor.

    There was some good news in the report for the Fed, though.

    Wage growth continued to moderate closer to level the Fed would prefer. Hourly wages increased a mild 0.3% last month, the government said Friday.

    The increase in pay over the past year also slowed again to a nearly two-year low of 4.2% from 4.6% in February.

    What’s more, the share of people working or looking for work rose a tick to 62.6%. That’s the highest labor-force participation rate since February 2020, the last month before the pandemic’s onset.

    When more people look for work, companies don’t have to compete as hard for workers via higher pay.

    Emerging evidence of slack in a muscular U.S. labor market could encourage the Fed to take a breather after a rapid series of interest-rate increases.

    Still, the U.S. has added a whopping 1 million–plus new jobs in the first three months of the year. The labor market is not cooling off as much as the Fed would like.

    The Black unemployment rate fell to 5% last month, the lowest level since records began being kept in the early 1970s.

    Stock-index futures rallied after the report, though the stock market itself is officially closed due to the Good Friday holiday.

    See: Why Good Friday complicates how stock-market traders will digest March jobs report

    Key details: About one-third of the new jobs created last month — 72,000 — were at service-sector companies such as bars and restaurants whose employment still has not returned to prepandemic levels.

    Americans are going out to eat a lot and spending relatively more on services than on goods.

    Government employment increased by 47,000. Hiring also rose at professional businesses and in healthcare. Retailers cut 15,000 jobs.

    Employment fell slightly in manufacturing and construction, or goods-producing industries, which are under more pressure from rising interest rates.

    The strong labor market has benefited all groups, but especially Black Americans. The Black unemployment rate fell to 5% last month, the lowest level since records began being kept in the early 1970s.

    Big picture: The ongoing tightness in the labor market could inflame inflation and even push the Fed to raise interest rates more than currently forecast to try to get prices under control.

    Higher borrowing costs reduce inflation by slowing the economy, but most Fed rate-hike cycles since World War II have been followed by recession.

    On the flip side, the U.S. economy is starting to show more signs of deterioration due to the series of rapid Fed interest-rate increases since last year.

    Manufacturers have cut production and are arguably already in recession and the much larger service side of the economy is under more stress lately.

    If these trends continue the economy — and inflation — are bound to slow.

    The U.S. is still growing for now, however, and the labor market remains an oasis of strength.

    Low unemployment and rising wages have allowed Americans to keep spending. And so far they’ve keep the economy out of a widely predicted recession.

    Looking ahead: “The U.S. labor market is losing some momentum, but remains far too vibrant for the Fed to pause [its rate-hike campaign] in May,” said senior economist Sal Guatieri at BMO Capital Markets

    “Although job growth is gradually slowing, it remains too strong for the Federal Reserve,” said Sal Guatieri of PNC Financial Services.

    See: Traders see little chance interest rates will end up where Fed thinks in 2023

    Market reaction:  Futures contracts on the Dow Jones Industrial Average
    YM00,
    +0.19%

    rose 64 points, or 0.2%, to 33,723. S&P 500 futures
    ES00,
    +0.24%

    gained 9.75 points, or 0.2%, to 4,141.75. Stock trading resumes again on Monday.

    The yield on the 10-year Treasury
    TMUBMUSD10Y,
    3.404%

    jumped to 3.36%.

    MarketWatch personal finance: U.S. economy added 236,000 jobs in March. Is this your last chance to jump ship?

    [ad_2]

    Source link

  • Jobs report shows 236,000 gain in March — lifting 2023 total above 1 million — but U.S. labor market shows hints of cooling

    Jobs report shows 236,000 gain in March — lifting 2023 total above 1 million — but U.S. labor market shows hints of cooling

    [ad_1]

    The numbers: The U.S. added a robust 236,000 new jobs in March, defying the Federal Reserve’s hopes for a big slowdown in hiring as the central bank struggles to tame inflation. The consensus economist forecast called for a nonfarm-payrolls expansion of 238,000.

    The solid increase in employment last month followed a revised 326,000 gain in February and a gain of 472,000 in January.

    While the increase in hiring was the smallest monthly rise in more than two years, the number of jobs created last month was much greater than is typical.

    The U.S. economy has shown recent signs of stress.

    The unemployment rate, meanwhile, slipped to 3.5% from 3.6% as more people searched for and found work. That’s another sign of labor-market vigor.

    There was some good news in the report for the Fed, though.

    Wage growth continued to moderate closer to level the Fed would prefer. Hourly wages increased a mild 0.3% last month, the government said Friday.

    The increase in pay over the past year also slowed again to a nearly two-year low of 4.2% from 4.6% in February.

    What’s more, the share of people working or looking for work rose a tick to 62.6%. That’s the highest labor-force participation rate since February 2020, the last month before the pandemic’s onset.

    When more people look for work, companies don’t have to compete as hard for workers via higher pay.

    Emerging evidence of slack in a muscular U.S. labor market could encourage the Fed to take a breather after a rapid series of interest-rate increases.

    Still, the U.S. has added a whopping 1 million–plus new jobs in the first three months of the year. The labor market is not cooling off as much as the Fed would like.

    The Black unemployment rate fell to 5% last month, the lowest level since records began being kept in the early 1970s.

    Stock-index futures rallied after the report, though the stock market itself is officially closed due to the Good Friday holiday.

    See: Why Good Friday complicates how stock-market traders will digest March jobs report

    Key details: About one-third of the new jobs created last month — 72,000 — were at service-sector companies such as bars and restaurants whose employment still has not returned to prepandemic levels.

    Americans are going out to eat a lot and spending relatively more on services than on goods.

    Government employment increased by 47,000. Hiring also rose at professional businesses and in healthcare. Retailers cut 15,000 jobs.

    Employment fell slightly in manufacturing and construction, or goods-producing industries, which are under more pressure from rising interest rates.

    The strong labor market has benefited all groups, but especially Black Americans. The Black unemployment rate fell to 5% last month, the lowest level since records began being kept in the early 1970s.

    Big picture: The ongoing tightness in the labor market could inflame inflation and even push the Fed to raise interest rates more than currently forecast to try to get prices under control.

    Higher borrowing costs reduce inflation by slowing the economy, but most Fed rate-hike cycles since World War II have been followed by recession.

    On the flip side, the U.S. economy is starting to show more signs of deterioration due to the series of rapid Fed interest-rate increases since last year.

    Manufacturers have cut production and are arguably already in recession and the much larger service side of the economy is under more stress lately.

    If these trends continue the economy — and inflation — are bound to slow.

    The U.S. is still growing for now, however, and the labor market remains an oasis of strength.

    Low unemployment and rising wages have allowed Americans to keep spending. And so far they’ve keep the economy out of a widely predicted recession.

    Looking ahead: “The U.S. labor market is losing some momentum, but remains far too vibrant for the Fed to pause [its rate-hike campaign] in May,” said senior economist Sal Guatieri at BMO Capital Markets

    “Although job growth is gradually slowing, it remains too strong for the Federal Reserve,” said Sal Guatieri of PNC Financial Services.

    See: Traders see little chance interest rates will end up where Fed thinks in 2023

    Market reaction:  Futures contracts on the Dow Jones Industrial Average
    YM00,
    +0.19%

    rose 64 points, or 0.2%, to 33,723. S&P 500 futures
    ES00,
    +0.24%

    gained 9.75 points, or 0.2%, to 4,141.75. Stock trading resumes again on Monday.

    The yield on the 10-year Treasury
    TMUBMUSD10Y,
    3.404%

    jumped to 3.36%.

    MarketWatch personal finance: U.S. economy added 236,000 jobs in March. Is this your last chance to jump ship?

    [ad_2]

    Source link

  • Jobs report shows 236,000 gain in March — lifting 2023 total above 1 million — but U.S. labor market shows hints of cooling

    Jobs report shows 236,000 gain in March — lifting 2023 total above 1 million — but U.S. labor market shows hints of cooling

    [ad_1]

    The numbers: The U.S. added a robust 236,000 new jobs in March, defying the Federal Reserve’s hopes for a big slowdown in hiring as the central bank struggles to tame inflation. The consensus economist forecast called for a nonfarm-payrolls expansion of 238,000.

    The solid increase in employment last month followed a revised 326,000 gain in February and a gain of 472,000 in January.

    While the increase in hiring was the smallest monthly rise in more than two years, the number of jobs created last month was much greater than is typical.

    The U.S. economy has shown recent signs of stress.

    The unemployment rate, meanwhile, slipped to 3.5% from 3.6% as more people searched for and found work. That’s another sign of labor-market vigor.

    There was some good news in the report for the Fed, though.

    Wage growth continued to moderate closer to level the Fed would prefer. Hourly wages increased a mild 0.3% last month, the government said Friday.

    The increase in pay over the past year also slowed again to a nearly two-year low of 4.2% from 4.6% in February.

    What’s more, the share of people working or looking for work rose a tick to 62.6%. That’s the highest labor-force participation rate since February 2020, the last month before the pandemic’s onset.

    When more people look for work, companies don’t have to compete as hard for workers via higher pay.

    Emerging evidence of slack in a muscular U.S. labor market could encourage the Fed to take a breather after a rapid series of interest-rate increases.

    Still, the U.S. has added a whopping 1 million–plus new jobs in the first three months of the year. The labor market is not cooling off as much as the Fed would like.

    The Black unemployment rate fell to 5% last month, the lowest level since records began being kept in the early 1970s.

    Stock-index futures rallied after the report, though the stock market itself is officially closed due to the Good Friday holiday.

    See: Why Good Friday complicates how stock-market traders will digest March jobs report

    Key details: About one-third of the new jobs created last month — 72,000 — were at service-sector companies such as bars and restaurants whose employment still has not returned to prepandemic levels.

    Americans are going out to eat a lot and spending relatively more on services than on goods.

    Government employment increased by 47,000. Hiring also rose at professional businesses and in healthcare. Retailers cut 15,000 jobs.

    Employment fell slightly in manufacturing and construction, or goods-producing industries, which are under more pressure from rising interest rates.

    The strong labor market has benefited all groups, but especially Black Americans. The Black unemployment rate fell to 5% last month, the lowest level since records began being kept in the early 1970s.

    Big picture: The ongoing tightness in the labor market could inflame inflation and even push the Fed to raise interest rates more than currently forecast to try to get prices under control.

    Higher borrowing costs reduce inflation by slowing the economy, but most Fed rate-hike cycles since World War II have been followed by recession.

    On the flip side, the U.S. economy is starting to show more signs of deterioration due to the series of rapid Fed interest-rate increases since last year.

    Manufacturers have cut production and are arguably already in recession and the much larger service side of the economy is under more stress lately.

    If these trends continue the economy — and inflation — are bound to slow.

    The U.S. is still growing for now, however, and the labor market remains an oasis of strength.

    Low unemployment and rising wages have allowed Americans to keep spending. And so far they’ve keep the economy out of a widely predicted recession.

    Looking ahead: “The U.S. labor market is losing some momentum, but remains far too vibrant for the Fed to pause [its rate-hike campaign] in May,” said senior economist Sal Guatieri at BMO Capital Markets

    “Although job growth is gradually slowing, it remains too strong for the Federal Reserve,” said Sal Guatieri of PNC Financial Services.

    See: Traders see little chance interest rates will end up where Fed thinks in 2023

    Market reaction:  Futures contracts on the Dow Jones Industrial Average
    YM00,
    +0.19%

    rose 64 points, or 0.2%, to 33,723. S&P 500 futures
    ES00,
    +0.24%

    gained 9.75 points, or 0.2%, to 4,141.75. Stock trading resumes again on Monday.

    The yield on the 10-year Treasury
    TMUBMUSD10Y,
    3.404%

    jumped to 3.36%.

    MarketWatch personal finance: U.S. economy added 236,000 jobs in March. Is this your last chance to jump ship?

    [ad_2]

    Source link

  • U.S. economy forecast to create 238,000 jobs in March. The Fed wouldn’t be happy.

    U.S. economy forecast to create 238,000 jobs in March. The Fed wouldn’t be happy.

    [ad_1]

    Normally a big increase in new U.S. jobs is cause for celebration. Not right now.

    The Federal Reserve sees a tight labor market as a big obstacle in getting high inflation under control and wants hiring to slow as soon as possible, but it might not get its wish in March.

    [ad_2]

    Source link

  • Are robot waiters the future? Some restaurants think so

    Are robot waiters the future? Some restaurants think so

    [ad_1]

    MADISON HEIGHTS, Mich. — You may have already seen them in restaurants: waist-high machines that can greet guests, lead them to their tables, deliver food and drinks and ferry dirty dishes to the kitchen. Some have cat-like faces and even purr when you scratch their heads.

    But are robot waiters the future? It’s a question the restaurant industry is increasingly trying to answer.

    Many think robot waiters are the solution to the industry’s labor shortages. Sales of them have been growing rapidly in recent years, with tens of thousands now gliding through dining rooms worldwide.

    “There’s no doubt in my mind that this is where the world is going,” said Dennis Reynolds, dean of the Hilton College of Global Hospitality Leadership at the University of Houston. The school’s restaurant began using a robot in December, and Reynolds says it has eased the workload for human staff and made service more efficient.

    But others say robot waiters aren’t much more than a gimmick that have a long way to go before they can replace humans. They can’t take orders, and many restaurants have steps, outdoor patios and other physical challenges they can’t adapt to.

    “Restaurants are pretty chaotic places, so it’s very hard to insert automation in a way that is really productive,” said Craig Le Clair, a vice president with the consulting company Forrester who studies automation.

    Still, the robots are proliferating. Redwood City, California-based Bear Robotics introduced its Servi robot in 2021 and expects to have 10,000 deployed by the end of this year in 44 U.S. states and overseas. Shenzen, China-based Pudu Robotics, which was founded in 2016, has deployed more than 56,000 robots worldwide.

    “Every restaurant chain is looking toward as much automation as possible,” said Phil Zheng of Richtech Robotics, an Austin-based maker of robot servers. “People are going to see these everywhere in the next year or two.”

    Li Zhai was having trouble finding staff for Noodle Topia, his Madison Heights, Michigan, restaurant, in the summer of 2021, so he bought a BellaBot from Pudu Robotics. The robot was so successful he added two more; now, one robot leads diners to their seats while another delivers bowls of steaming noodles to tables. Employees pile dirty dishes onto a third robot to shuttle back to the kitchen.

    Now, Zhai only needs three people to do the same volume of business that five or six people used to handle. And they save him money. A robot costs around $15,000, he said, but a person costs $5,000 to $6,000 per month.

    Zhai said the robots give human servers more time to mingle with customers, which increases tips. And customers often post videos of the robots on social media that entice others to visit.

    “Besides saving labor, the robots generate business,” he said.

    Interactions with human servers can vary. Betzy Giron Reynosa, who works with a BellaBot at The Sushi Factory in West Melbourne, Florida, said the robot can be a pain.

    “You can’t really tell it to move or anything,” she said. She has also had customers who don’t want to interact with it.

    But overall the robot is a plus, she said. It saves her trips back and forth to the kitchen and gives her more time with customers.

    Labor shortages accelerated the adoption of robots globally, Le Clair said. In the U.S., the restaurant industry employed 15 million people at the end of last year, but that was still 400,000 fewer than before the pandemic, according to the National Restaurant Association. In a recent survey, 62% of restaurant operators told the association they don’t have enough employees to meet customer demand.

    Pandemic-era concerns about hygiene and adoption of new technology like QR code menus also laid the ground for robots, said Karthik Namasivayam, director of hospitality business at Michigan State University’s Broad College of Business.

    “Once an operator begins to understand and work with one technology, other technologies become less daunting and will be much more readily accepted as we go forward,” he said.

    Namasivayam notes that public acceptance of robot servers is already high in Asia. Pizza Hut has robot servers in 1,000 restaurants in China, for example.

    The U.S. was slower to adopt robots, but some chains are now testing them. Chick-fil-A is trying them at multiple U.S. locations, and says it’s found that the robots give human employees more time to refresh drinks, clear tables and greet guests.

    Marcus Merritt was surprised to see a robot server at a Chick-fil-A in Atlanta recently. The robot didn’t seem to be replacing staff, he said; he counted 13 employees in the store, and workers told him the robot helps service move a little faster. He was delighted that the robot told him to have a great day, and expects he’ll see more robots when he goes out to eat.

    “I think technology is part of our normal everyday now. Everybody has a cell phone, everybody uses some form of computer,” said Merritt, who owns a marketing business. “It’s a natural progression.”

    But not all chains have had success with robots.

    Chili’s introduced a robot server named Rita in 2020 and expanded the test to 61 U.S. restaurants before abruptly halting it last August. The chain found that Rita moved too slowly and got in the way of human servers. And 58% of guests surveyed said Rita didn’t improve their overall experience.

    Haidilao, a hot pot chain in China, began using robots a year ago to deliver food to diners’ tables. But managers at several outlets said the robots haven’t proved as reliable or cost-effective as human servers.

    Wang Long, the manager of a Beijing outlet, said his two robots have both have broken down.

    “We only used them now and then,” Wang said. “It is a sort of concept thing and the machine can never replace humans.”

    Eventually, Namasivayam expects that a certain percentage of restaurants — maybe 30% — will continue to have human servers and be considered more luxurious, while the rest will lean more heavily on robots in the kitchen and in dining rooms. Economics are on the side of robots, he said; the cost of human labor will continue to rise, but technology costs will fall.

    But that’s not a future everyone wants to see. Saru Jayaraman, who advocates for higher pay for restaurant workers as president of One Fair Wage, said restaurants could easily solve their labor shortages if they just paid workers more.

    “Humans don’t go to a full-service restaurant to be served by technology,” she said. “They go for the experience of themselves and the people they care about being served by a human.”

    ___

    AP researcher Yu Bing contributed from Beijing.

    [ad_2]

    Source link

  • Are robot waiters the future? Some restaurants think so

    Are robot waiters the future? Some restaurants think so

    [ad_1]

    MADISON HEIGHTS, Mich. — You may have already seen them in restaurants: waist-high machines that can greet guests, lead them to their tables, deliver food and drinks and ferry dirty dishes to the kitchen. Some have cat-like faces and even purr when you scratch their heads.

    But are robot waiters the future? It’s a question the restaurant industry is increasingly trying to answer.

    Many think robot waiters are the solution to the industry’s labor shortages. Sales of them have been growing rapidly in recent years, with tens of thousands now gliding through dining rooms worldwide.

    “There’s no doubt in my mind that this is where the world is going,” said Dennis Reynolds, dean of the Hilton College of Global Hospitality Leadership at the University of Houston. The school’s restaurant began using a robot in December, and Reynolds says it has eased the workload for human staff and made service more efficient.

    But others say robot waiters aren’t much more than a gimmick that have a long way to go before they can replace humans. They can’t take orders, and many restaurants have steps, outdoor patios and other physical challenges they can’t adapt to.

    “Restaurants are pretty chaotic places, so it’s very hard to insert automation in a way that is really productive,” said Craig Le Clair, a vice president with the consulting company Forrester who studies automation.

    Still, the robots are proliferating. Redwood City, California-based Bear Robotics introduced its Servi robot in 2021 and expects to have 10,000 deployed by the end of this year in 44 U.S. states and overseas. Shenzen, China-based Pudu Robotics, which was founded in 2016, has deployed more than 56,000 robots worldwide.

    “Every restaurant chain is looking toward as much automation as possible,” said Phil Zheng of Richtech Robotics, an Austin-based maker of robot servers. “People are going to see these everywhere in the next year or two.”

    Li Zhai was having trouble finding staff for Noodle Topia, his Madison Heights, Michigan, restaurant, in the summer of 2021, so he bought a BellaBot from Pudu Robotics. The robot was so successful he added two more; now, one robot leads diners to their seats while another delivers bowls of steaming noodles to tables. Employees pile dirty dishes onto a third robot to shuttle back to the kitchen.

    Now, Zhai only needs three people to do the same volume of business that five or six people used to handle. And they save him money. A robot costs around $15,000, he said, but a person costs $5,000 to $6,000 per month.

    Zhai said the robots give human servers more time to mingle with customers, which increases tips. And customers often post videos of the robots on social media that entice others to visit.

    “Besides saving labor, the robots generate business,” he said.

    Interactions with human servers can vary. Betzy Giron Reynosa, who works with a BellaBot at The Sushi Factory in West Melbourne, Florida, said the robot can be a pain.

    “You can’t really tell it to move or anything,” she said. She has also had customers who don’t want to interact with it.

    But overall the robot is a plus, she said. It saves her trips back and forth to the kitchen and gives her more time with customers.

    Labor shortages accelerated the adoption of robots globally, Le Clair said. In the U.S., the restaurant industry employed 15 million people at the end of last year, but that was still 400,000 fewer than before the pandemic, according to the National Restaurant Association. In a recent survey, 62% of restaurant operators told the association they don’t have enough employees to meet customer demand.

    Pandemic-era concerns about hygiene and adoption of new technology like QR code menus also laid the ground for robots, said Karthik Namasivayam, director of hospitality business at Michigan State University’s Broad College of Business.

    “Once an operator begins to understand and work with one technology, other technologies become less daunting and will be much more readily accepted as we go forward,” he said.

    Namasivayam notes that public acceptance of robot servers is already high in Asia. Pizza Hut has robot servers in 1,000 restaurants in China, for example.

    The U.S. was slower to adopt robots, but some chains are now testing them. Chick-fil-A is trying them at multiple U.S. locations, and says it’s found that the robots give human employees more time to refresh drinks, clear tables and greet guests.

    Marcus Merritt was surprised to see a robot server at a Chick-fil-A in Atlanta recently. The robot didn’t seem to be replacing staff, he said; he counted 13 employees in the store, and workers told him the robot helps service move a little faster. He was delighted that the robot told him to have a great day, and expects he’ll see more robots when he goes out to eat.

    “I think technology is part of our normal everyday now. Everybody has a cell phone, everybody uses some form of computer,” said Merritt, who owns a marketing business. “It’s a natural progression.”

    But not all chains have had success with robots.

    Chili’s introduced a robot server named Rita in 2020 and expanded the test to 61 U.S. restaurants before abruptly halting it last August. The chain found that Rita moved too slowly and got in the way of human servers. And 58% of guests surveyed said Rita didn’t improve their overall experience.

    Haidilao, a hot pot chain in China, began using robots a year ago to deliver food to diners’ tables. But managers at several outlets said the robots haven’t proved as reliable or cost-effective as human servers.

    Wang Long, the manager of a Beijing outlet, said his two robots have both have broken down.

    “We only used them now and then,” Wang said. “It is a sort of concept thing and the machine can never replace humans.”

    Eventually, Namasivayam expects that a certain percentage of restaurants — maybe 30% — will continue to have human servers and be considered more luxurious, while the rest will lean more heavily on robots in the kitchen and in dining rooms. Economics are on the side of robots, he said; the cost of human labor will continue to rise, but technology costs will fall.

    But that’s not a future everyone wants to see. Saru Jayaraman, who advocates for higher pay for restaurant workers as president of One Fair Wage, said restaurants could easily solve their labor shortages if they just paid workers more.

    “Humans don’t go to a full-service restaurant to be served by technology,” she said. “They go for the experience of themselves and the people they care about being served by a human.”

    ___

    AP researcher Yu Bing contributed from Beijing.

    [ad_2]

    Source link

  • Are robot waiters the future? Some restaurants think so

    Are robot waiters the future? Some restaurants think so

    [ad_1]

    MADISON HEIGHTS, Mich. — You may have already seen them in restaurants: waist-high machines that can greet guests, lead them to their tables, deliver food and drinks and ferry dirty dishes to the kitchen. Some have cat-like faces and even purr when you scratch their heads.

    But are robot waiters the future? It’s a question the restaurant industry is increasingly trying to answer.

    Many think robot waiters are the solution to the industry’s labor shortages. Sales of them have been growing rapidly in recent years, with tens of thousands now gliding through dining rooms worldwide.

    “There’s no doubt in my mind that this is where the world is going,” said Dennis Reynolds, dean of the Hilton College of Global Hospitality Leadership at the University of Houston. The school’s restaurant began using a robot in December, and Reynolds says it has eased the workload for human staff and made service more efficient.

    But others say robot waiters aren’t much more than a gimmick that have a long way to go before they can replace humans. They can’t take orders, and many restaurants have steps, outdoor patios and other physical challenges they can’t adapt to.

    “Restaurants are pretty chaotic places, so it’s very hard to insert automation in a way that is really productive,” said Craig Le Clair, a vice president with the consulting company Forrester who studies automation.

    Still, the robots are proliferating. Redwood City, California-based Bear Robotics introduced its Servi robot in 2021 and expects to have 10,000 deployed by the end of this year in 44 U.S. states and overseas. Shenzen, China-based Pudu Robotics, which was founded in 2016, has deployed more than 56,000 robots worldwide.

    “Every restaurant chain is looking toward as much automation as possible,” said Phil Zheng of Richtech Robotics, an Austin-based maker of robot servers. “People are going to see these everywhere in the next year or two.”

    Li Zhai was having trouble finding staff for Noodle Topia, his Madison Heights, Michigan, restaurant, in the summer of 2021, so he bought a BellaBot from Pudu Robotics. The robot was so successful he added two more; now, one robot leads diners to their seats while another delivers bowls of steaming noodles to tables. Employees pile dirty dishes onto a third robot to shuttle back to the kitchen.

    Now, Zhai only needs three people to do the same volume of business that five or six people used to handle. And they save him money. A robot costs around $15,000, he said, but a person costs $5,000 to $6,000 per month.

    Zhai said the robots give human servers more time to mingle with customers, which increases tips. And customers often post videos of the robots on social media that entice others to visit.

    “Besides saving labor, the robots generate business,” he said.

    Interactions with human servers can vary. Betzy Giron Reynosa, who works with a BellaBot at The Sushi Factory in West Melbourne, Florida, said the robot can be a pain.

    “You can’t really tell it to move or anything,” she said. She has also had customers who don’t want to interact with it.

    But overall the robot is a plus, she said. It saves her trips back and forth to the kitchen and gives her more time with customers.

    Labor shortages accelerated the adoption of robots globally, Le Clair said. In the U.S., the restaurant industry employed 15 million people at the end of last year, but that was still 400,000 fewer than before the pandemic, according to the National Restaurant Association. In a recent survey, 62% of restaurant operators told the association they don’t have enough employees to meet customer demand.

    Pandemic-era concerns about hygiene and adoption of new technology like QR code menus also laid the ground for robots, said Karthik Namasivayam, director of hospitality business at Michigan State University’s Broad College of Business.

    “Once an operator begins to understand and work with one technology, other technologies become less daunting and will be much more readily accepted as we go forward,” he said.

    Namasivayam notes that public acceptance of robot servers is already high in Asia. Pizza Hut has robot servers in 1,000 restaurants in China, for example.

    The U.S. was slower to adopt robots, but some chains are now testing them. Chick-fil-A is trying them at multiple U.S. locations, and says it’s found that the robots give human employees more time to refresh drinks, clear tables and greet guests.

    Marcus Merritt was surprised to see a robot server at a Chick-fil-A in Atlanta recently. The robot didn’t seem to be replacing staff, he said; he counted 13 employees in the store, and workers told him the robot helps service move a little faster. He was delighted that the robot told him to have a great day, and expects he’ll see more robots when he goes out to eat.

    “I think technology is part of our normal everyday now. Everybody has a cell phone, everybody uses some form of computer,” said Merritt, who owns a marketing business. “It’s a natural progression.”

    But not all chains have had success with robots.

    Chili’s introduced a robot server named Rita in 2020 and expanded the test to 61 U.S. restaurants before abruptly halting it last August. The chain found that Rita moved too slowly and got in the way of human servers. And 58% of guests surveyed said Rita didn’t improve their overall experience.

    Haidilao, a hot pot chain in China, began using robots a year ago to deliver food to diners’ tables. But managers at several outlets said the robots haven’t proved as reliable or cost-effective as human servers.

    Wang Long, the manager of a Beijing outlet, said his two robots have both have broken down.

    “We only used them now and then,” Wang said. “It is a sort of concept thing and the machine can never replace humans.”

    Eventually, Namasivayam expects that a certain percentage of restaurants — maybe 30% — will continue to have human servers and be considered more luxurious, while the rest will lean more heavily on robots in the kitchen and in dining rooms. Economics are on the side of robots, he said; the cost of human labor will continue to rise, but technology costs will fall.

    But that’s not a future everyone wants to see. Saru Jayaraman, who advocates for higher pay for restaurant workers as president of One Fair Wage, said restaurants could easily solve their labor shortages if they just paid workers more.

    “Humans don’t go to a full-service restaurant to be served by technology,” she said. “They go for the experience of themselves and the people they care about being served by a human.”

    ___

    AP researcher Yu Bing contributed from Beijing.

    [ad_2]

    Source link