Bloomberg - Evening Briefing - Mass firings

If you’re looking at the labor market to predict the direction of the US economy, you’d be right to be confused. Mass firings are making headlines: Amazon is terminating 18,000 people. Alphabet is slashing 6% of its global employees. Wall Street is cutting its workers by the thousands, too. But the job eliminations pale in comparison to the frenzied hiring that took place through most of the Covid-19 pandemic, and the US job market remains exceptionally tight. With that, hope is rising that the US and the world could skirt the recession so many have been predicting since summer (and fear of which is driving much of the firing). Indeed, central bankers in Davos for the World Economic Forum expressed optimism that they’re getting a handle on inflation. The economic outlook has also gotten a boost thanks to China’s reopening— albeit at a potentially monstrous human cost—and a warm winter taking the edge off of Europe’s Kremlin-driven energy crisis. But we’ve turned no clear corner when it comes to inflation, according to Conor Sen, who writes in Bloomberg Opinion that markets should still “brace for a rebound back into ‘too hot’ territory.”

The US federal debt limit was reached Thursday, and the Treasury Department tapped the financial resources of two government-run funds for retirees to avoid a crippling payments default. Far-right Republicans are demanding spending cuts in social programs for the elderly and poor, among other things. The brinkmanship drew a rebuke from business leaders including JPMorgan Chief Executive Officer Jamie Dimon, who said Congress shouldn’t be “playing games” with the “sacrosanct” US creditworthiness. The White House needs to quickly find a way out of this fight, Jonathan Bernstein argues in Bloomberg Opinion. “They don’t want to wait until the car is halfway down the cliff.”

China’s population started shrinking in 2022 for the first time in six decades. With the proportion of people older than 65 rising, China’s economy may struggle to overtake the US in size, and India may already have surpassed China as the most populous nation. India is also set to be the fastest-growing major economy but, with half of its people under age 30, it’s still not creating enough jobs.

United Nations Population Division

Elon Musk needs the jury in his securities fraud trial to believe him if he’s to avoid being socked with billions of dollars in damages over his 2018 tweets about taking Tesla private. The trial is delving into Musk’s state of mind and whether he really influenced investor trading with his mercurial posts. Meantime, internal emails at Tesla show Musk oversaw the creation of a 2016 video that exaggerated what the Autopilot system could do—namely live up to its name.

New Zealand Prime Minister Jacinda Ardern, who became the world’s youngest female leader when she led her Labour Party to power in 2017, doesn’t have the energy to seek re-election, she said announcing her resignation. Over her short political career, Arden became a torchbearer for progressive values and was praised for her handling of the pandemic. She is among a small group of female leaders who stand as a counterpoint to some of their brash male colleagues. “They show us that countries can be run not only with force and bravado, but with compassion as well as a sense of humor,” Andreea Papuc writes in Bloomberg Opinion.

Jacinda Ardern announces her resignation on Jan. 19. Photographer: Kerry Marshall/Getty Images AsiaPac

The financial impact of Covid-19 is keeping almost half of Chinese tourists from traveling abroad this year. For those able to get away, it can be hard to get a good night’s sleep even in a luxurious hotel room. But small things like a good pillow and charging outlets near the bed can help. Finally, vodka is about to be overtaken by agave-derived tequila and mezcal as the most purchased spirit by value in the US.  

• US reports fourth quarter GDP amid slowing inflation, borrowing costs.
• Data in Europe may add to evidence the bloc’s economic health endures.
• Big tech, including IBM and Tesla, and Euro chip makers report earnings.
• Lunar New Year arrives as China struggles with massive Covid outbreak.
• Nominations for this year’s Academy Awards are announced.

Hybrid work appears here to stay, and employers are coming up with a whole new class of catchphrases to promote their flexible-work options. At KPMG, it’s “Flex with Purpose,” while “Amex Flex” plays off that company’s well-known brand. GM tells staff to “Work Appropriately.” Others have loftier aspirations, like the “New Era of Agility” from Stellantis or Accenture’s “Omni-connected.” They’re all illustrative of the ways companies see the plans shaking out—and how hard it is to get them right.

Half of workers don’t understand their own organization’s hybrid plan, according to a survey by professional social network Fishbowl.  Photographer: Victor Moriyama/Bloomberg

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