ECONOMY

The US Economy Has Its Revenge

In a turnaround that seemed unthinkable as we were scrambling for toilet paper last March, the US economy has returned to its pre-pandemic size in Q2, according to the GDP report released yesterday by the government.

• It shows that vaccinations + businesses reopening + sustained government support = a recipe for supercharged growth. 

If that’s the parade, here’s a little rain: The 6.5% annual growth rate last quarter fell below forecasts, showing there are still some mustard stains on the economy’s T-shirt.

What’s going well

• You: Give yourself a pat on the back, because you, the American consumer, helped drive the recovery. Consumer spending increased 11.8% annually, the second-biggest growth spurt since 1952.
• Business investment: Companies feeling emboldened by stronger demand poured money into equipment and developing intellectual property. 

What’s not working 

• Supply chain snags: Apple and Tesla this week joined the chorus of companies warning that the chip shortage was hurting their businesses. Meanwhile, logjams persist in ports around the world, leading to shipping delays and inventory crunches for US companies.
• Where are the workers? If you’ve read the Brew over the last, oh, six months, you know that businesses are struggling to hire workers, which means they’re not able to meet customer demand. “The very tight labor market has resulted in our company not growing while there are plenty of growth opportunities,” one Texas business owner told the Dallas Fed.

And what about the D-word? 

That is, how will the spread of the Delta variant affect the economy going forward? 

“We’re just going to have to watch,” Fed Chair Jerome Powell said this week. But in general, he thinks with high vaccination rates the “effects will probably be less. There probably won’t be significant lockdowns.” 

Bottom line: The US economy took a gut punch from the global pandemic and came out with vital signs intact, if a little bruised. And depending on the length and severity of the recent Covid spike, Delta may prove another big test. 

ENTERTAINMENT

Disney vs. an Actual Avenger

Scarlett Johansson is taking on her most challenging role yet: plaintiff. Yesterday, the movie star filed a lawsuit against Disney, claiming the company violated her agreement with Marvel that guaranteed Black Widow an exclusive theatrical release.

The backstory: Earlier this month, Disney released the movie in theaters and on its streaming service Disney+ for an additional $30. Black Widow earned $80 million at its opening weekend at the box office, a record for pandemic times, but not great for a Marvel movie.

• For reference, Spiderman: Far From Home (2019) brought in $185 million during its first weekend.

But Black Widow made a lot of money outside of theaters—$60 million from Disney+. And seeing all that $$$ ticked Johansson off: Her salary is largely tied to box office performance, which may have been siphoned off by the simultaneous at-home release. 

Disney responded to Johansson by saying the lawsuit was "especially sad and distressing in its callous disregard for the horrific and prolonged global effects of the COVID-19 pandemic."

Big picture: Companies like Disney have thrown tens of billions into the streaming wars. The ScarJo case shows that the pivot to streaming has second-order effects—like how actors should be paid—that entertainment giants have yet to grapple with.

COVID

More Asks for Masks

We're not at the free Peloton for a month stage of the new Covid wave yet, but lots more people are updating their mask collection.

Sales of face masks surged 24% for the week ending Tuesday, according to the Adobe Digital Economy Index. Analysts expect mask sales to jump even more after the CDC issued new guidance that encourages vaccinated people to wear masks indoors in Covid hotspots.  

After a drop in demand, they're making a comeback: Masks, which had accounted for 14% of gross merchandise sales on Etsy in Q2 2020, fell to a 3% share in Q1 this year. But after the new CDC guidance was released…

• Searches for the term “masks” doubled on Google. 
• Citigroup, Apple stores, Disney World, and Disneyland moved quickly to require masks again.
• Other retailers, juggling confused customers and anxious employees, are still waiting and watching.

But the boom times are probably over. 3M, the manufacturer of N95 masks, said global demand reached its peak in Q1 2021. And although the worsening situation has sparked renewed interest in face coverings, analysts think even the recent surge in sales isn’t likely to vault the pandemic staple past the peak reached earlier.

SPONSORED BY ELECTRIC

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You wouldn’t use a paper bag to keep your beach bevvies cool, just like you wouldn’t count on second rate IT to keep your business hummin’. 

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In fact, their IT support and strategy is so blazin’ fast, they decided to offer something chill to go along with it. 

If you’re an IT decision-maker at a US-based company with 15-500 employees, Electric will throw in a free Yeti cooler when you book a qualified meeting. 

Get chat-based helpdesk support, streamlined employee onboarding and offboarding, protective security standardization—and that sweet Yeti cooler—when you chat with the chill peeps at Electric today.

GRAB BAG

Key Performance Indicators

Stat: Poverty in the US will be cut by 45% this year thanks to the massive government intervention during the pandemic, meaning 20 million fewer people are in poverty now than in 2018. The decline in poverty over the last three years is almost 3x the previous record drop. 

Quote: “In our view, ending the sales of ice cream in the occupied territories is one of the most important decisions the company has made in its 43-year history.”

Bennett Cohen and Jerry Greenfield, who founded Ben & Jerry’s ice cream in 1978, wrote in the NYT that they “unequivocally support” the company’s controversial decision to stop sales in Israeli-occupied areas while emphasizing they are proud Jews, who support the State of Israel. The two have relinquished operational control of the company since 2000.

Read: For decades, poppers have been the go-to sex drug for gay men. But where do they come from? (BuzzFeed News)

QUIZ

Never Gonna Quiz You Up

The feeling of getting a 5/5 on the Brew’s Weekly News Quiz has been compared to executing the perfect Rick roll.

It’s that satisfying. Ace the quiz.

WHAT ELSE IS BREWING

• Amazon posted $113 billion in revenue last quarter...and somehow that fell below estimates. The company, now helmed by CEO Andy Jassy, also expects sales to stall this quarter.
• Trevor Milton, the founder of electric truck startup Nikola, was charged with securities fraud. He allegedly misled investors about the company’s products and technology.
• Didi, the Chinese ride-hailer that’s been bludgeoned by Chinese regulators, denied a report by the WSJ that it was considering going private just one month after it IPO’d.
• Israel will offer a third shot of a Covid-19 vaccine to people over the age of 60 starting Sunday.
• Ron Popeil, the TV pitchman known for his infomercials and his “set it and forget it” tagline, died at 86.

Olympics links

• A star is born: Suni Lee of St. Paul, MN, won gold in the women’s gymnastics all-around competition, the fifth consecutive victory for an American woman in the event.
• Track and field events have officially begun.
• A thread of the best Olympics watch party reaction videos. Have tissues at the ready.

BREW'S BETS

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Not sure what to cook this weekend? Consult this (insanely organized and comprehensive) spreadsheet of recipes collected by the Brew’s Rachel Cantor. 

Cool footage of sinkholes: Don’t have much more to add. See for yourself.

FROM THE CREW

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GAMES

Friday Puzzle

Can you figure out the common word linking each group of three words? 

Example: Hurricane, camera, needle = eye

1. Curtain, fisherman, nuclear reactor
2. Computer, dip, poker
3. Bowling, tailor, wrestling
4. Dentist, oil field, army training
5. April, locker room, bride
6. Barber, rooster, beehive

ANSWER

1. Rod
2. Chip
3. Pin
4. Drill
5. Shower
6. Comb

✤ A Note From Hendrick's

PLEASE DRINK THE UNUSUAL RESPONSIBLY. HENDRICK'S GIN 44% ALC/VOL. ©2021 BOTTLED AND IMPORTED BY WILLIAM GRANT & SONS. NEW YORK, NY.