...The one who shows up unexpectedly, then gets too drunk and asks to crash on your couch.

New signs are emerging that higher prices, which had been considered a “fluke” of the post-pandemic economy, are stickier than many officials originally predicted. Experts are concerned that persistent inflation could lower consumer demand and put a chill on what had been a hot recovery.

Sign #1: Soaring wages

In the September jobs report released last Friday, average hourly earnings rose 0.6% month over month and 4.6% on a yearly basis—the second-fastest pace since tracking began in 2007. No one’s complaining about bigger paychecks, but higher labor costs could force businesses to bump up the prices of goods and services. And a raise is useless if your grocery bill is increasing at a faster rate.

Some companies are moving ahead with price hikes to offset higher costs.

• FedEx and UPS have raised prices and added new fees to packages.
• Pepsi, which has already been raising prices on its snacks and drinks, signaled it will hike prices again next year.

Sign #2: Soaring energy costs

Some wild stats from the WSJ: US crude oil is up 64% this year, natural gas prices have doubled over the past six months, coal prices have hit a record, heating oil is up 68% this year...the list goes on.

Higher energy costs are particularly worrying for the economy because you can’t just decide not to heat your home the same way you can hit pause on the new TV purchase. Higher energy prices act like a “tax,” the WSJ explained, limiting how much consumers can spend on other things that drive economic growth.

Zoom out: 224 of S&P 500 companies mentioned “inflation” on their earnings calls for the second quarter, the highest number on record. Q3 earnings season begins this week; do you think we can top it? —NF

Southwest Airlines’s weekend was as chaotic as its boarding process. It canceled over 800 flights on Saturday and more than 1,000 yesterday—representing 28% of all flights scheduled for Sunday. Southwest blamed air traffic control issues, a staffing shortage, and disruptive weather, but no other airlines seemed to have problems.

• The FAA said in a statement that yeah, there were a few hours of delays due to staffing issues...in Jacksonville, FL. But that had been resolved Friday.
• What could be contributing to the cancellations: Southwest runs a point-to-point route network, where a single delay can create an avalanche of other flight disruptions.

Likely not related, but interesting context: After Southwest decided last week to implement a vaccine mandate, pilots in Dallas, where Southwest is based, planned a “sickout” to protest the rule. The pilots union has denied any organized strike, but did warn the airline that requiring pilots to get vaccinated could lead to flight disruptions.

Bottom line: The timing couldn’t be worse for Southwest. People are actively booking flights for their winter vacations right now, and anyone longing for a beach wants to stay as far away from the word “cancellation” as possible.—MM

US authorities arrested a Navy engineer and his wife after they allegedly tried selling top-secret information on nuclear submarines to a foreign government.

Key word: tried. Jonathan and Diana Toebbe, the couple arrested on espionage charges, sent a package to a foreign country containing Navy documents and instructions on how to communicate via an encrypted platform, according to the DOJ. But the package got flagged to the FBI, whose agents then posed as a foreign official to spy on the spies.

Here are a few interesting details of the investigation, per the court papers.

• An undercover FBI agent arranged for a “dead drop” of information in West Virginia. Ahead of the drop, Jonathan Toebbe hid an SD card inside of a peanut butter sandwich.
• The FBI sent a total of $100,000 in cryptocurrency to Jonathan, who thought he was getting paid for sharing Navy secrets with a foreign country (we still don’t know what country he tried to give the information to).

Why it matters: Nuclear submarine info like the kind the couple was trying to sell is some of the most highly sensitive information guarded by the Navy. It was also at the center of that recent spat involving France and the UK, the US, and Australia.

Stat: On October 7, TSA officers screened 2.06 million people at airport security checkpoints. On the same day, ridership on New York City subways was 3.19 million. That means 1.13 million more people rode on the NYC subway that day than flew in the US.

Quote: “Go out there and enjoy Halloween.”

Dr. Fauci gave the green light to go trick-or-treating this year, given widespread vaccine availability and most Halloween activities taking place outdoors. He also said you gotta give out full-sized candy bars this year to uhh...make up for last year.

Read: Where the suburbs end. (New York Times)

Earnings: The Q3 earnings season, which kicks off this week, is presented by Supply Chain Issues. Expect companies to groan about higher costs for everything as they reveal their quarterly financial performances to investors. JPMorgan starts the party on Wednesday, followed by other big banks, Delta Air Lines, and Domino’s.

More boosters? Later this week, an FDA advisory panel will review data for Moderna and J&J booster shots. Currently, boosters have only been authorized for Pfizer’s Covid-19 vaccine.

Everything else:

• HBO’s Succession returns for Season 3 on Sunday. Let's go!!!!
• The NHL regular season begins tomorrow.
• William Shatner, 90, will become the oldest person to fly to space when he blasts off in a Blue Origin rocket Wednesday.

Sending hackers a-packin’. Trust Stamp is transforming contactless biometrics to protect your data with secure digital identities, already earning a $3.92M biometric services contract with the US federal government. That’s some trusted tech. Invest in the potential of data security’s future here.*

What retail pros need to know about the holidays: Join Retail Brew this Thursday for a virtual event talking about e-commerce and the holidays. RSVP now to hear how execs at Walmart and Shipt are preparing for a shopping season unlike any other.

Dive back into the week:

Shallow dive: New Wonka
Medium dive: The only chicken soup recipe you’ll ever need
Deep dive: A thread on metaverse misconceptions
Cannonball: The Fermi Paradox

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Word Search: If it were a documentary, today’s puzzle would be narrated by David Attenborough. Play it here.

Map Trivia

What do the blue areas of the map below represent?