Category: Economy

Commentary: Established Brands Often Struggle with Marketing

South Carolina Sun Staff
Pepsi Challenge

Unlike startups that are expected to take risks, get messy, and challenge the status quo, larger established firms inherit what could be considered golden handcuffs, given that success can make change a challenge. Indeed, care must be taken not to rock the boat for stockholders or tarnish the brand equity that has been established among a loyal customer base.

Much like the construction of a home, once a company is built, updates and improvements are only given consideration if changes will strengthen the existing model and its equity. The location, foundation, and general structure, however, are rarely tampered with by proud homeowners. And although additions can occur, it will cost not only materials but also permit approvals, and design changes may generate remorse for earlier sunk costs.

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Biggest Bank in U.S. Records Most Profitable Year Ever Despite Sector Crisis

South Carolina Sun Staff

Top U.S. bank JP Morgan Chase on Friday reported $49.6 billion in profits for 2023, a record for the bank, despite a sector crisis that shut down multiple smaller institutions.

Profits for the year were up for the bank despite net income bringing in only $9.3 billion in the fourth quarter, falling 15%, while the company brought in $39.9 billion in net revenue, up 12% for the quarter, according to JP Morgan’s fourth quarter earnings report. JP Morgan’s record profits come after a year of crisis for the sector, starting with a bank run in March at Silicon Valley Bank (SVB), which then spread to First Republic Bank and Signature Bank, prompting the Federal Deposit Insurance Corporation (FDIC) to step in and seize the banks, ultimately selling First Republic’s assets to JP Morgan.

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BlackRock to Make Massive Infrastructure Move to ‘Decarbonize the World’ and Reap Government Subsidies

South Carolina Sun Staff

BlackRock on Friday reached an agreement to acquire Global Infrastructure Partners for $12.5 billion, a move aimed at advancing the investment giant’s climate objectives and capitalizing on government subsidies, according to statements and reports.

BlackRock is the world’s largest asset manager and is a proponent of environmental, social and corporate governance (ESG) investing. Both companies share a commitment to decarbonization and BlackRock sees the deal’s timing as opportune, as governments have offered businesses rare financial incentives to build infrastructure, including for green energy projects, according to a press release.

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Part-Time Jobs Are Booming Under Biden as Americans Look to Make Ends Meet

South Carolina Sun Staff
Uber Driver

More Americans are having to take part-time jobs as consumers struggle with economic factors like high inflation, while full-time employment has sunk in tandem, according to data from the Bureau of Labor Statistics (BLS).

Around 133,196,000 workers were employed with full-time jobs in the U.S. in December, which was down from 134,727,000 in November — a drop of more than 1.5 million, according to the BLS. During that same time frame, the number of Americans employed in part-time positions rose by 762,000, while the number of people with multiple jobs increased by 222,000.

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Inflation Rose More than Expected in Latest Data

The Center Square
Grocery Shopping

Consumer costs increased at an elevated level again in December, according to newly released federal economic data, raising new concerns about spiking inflation.

The U.S. Bureau of Labor Statistics on Thursday released the Consumer Price Index, a key marker of inflation, showing the cost of a range of every day goods and services for Americans rose more than expected.

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U.S. Firms Worked Covertly with Chinese Experts to Brainstorm AI Policy: Report

South Carolina Sun Staff

Leading American artificial intelligence (AI) companies have been secretly discussing how to regulate the advanced technology with Chinese experts, The Financial Times reported on Thursday.

U.S. companies OpenAI and Anthropic have partaken in these covert diplomatic discussions centering around addressing concerns regarding the risks of the technology, including so-called misinformation and social cohesion threats, the FT reported. Two meetings transpired in Geneva during July and October of 2023, bringing together scientists and policy experts from U.S. and Canadian AI organizations with counterparts from CCP-backed Tsinghua University as well as other state-supported establishments.

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Banks Are Making Easy Money Off Crisis Government Program Designed to Bail Them Out

South Carolina Sun Staff
Federal Reserve

Banks are leveraging current interest rate projections to make a profit off of a program created last year designed to give access to funds for the sector amid a banking crisis, according to The Wall Street Journal.

The Federal Reserve created the bank term funding program in the midst of a banking crisis started by a bank run at Silicon Valley Bank (SVB) in March due to fears that SVB’s collapse would spread to the rest of the industry, according to the WSJ. Struggling banks can take depreciated bonds at face value and exchange those with the Fed for one-year loans in an effort to bolster liquidity, but since the loans are tied to future interest rate expectations and interest rates are increasingly expected to drop in the near future, banks can turn a profit on the difference.

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Biden Admin Releases New Labor Rule Cracking Down on Independent Contractors

South Carolina Sun Staff
Remote Worker

The Department of Labor announced Tuesday the final version of a rule that will force companies to recognize some workers as employees instead of independent contractors.

The new rule goes into effect on March 11 and rescinds a previous rule establishing independent contractors as a separate class of workers under the Fair Labor Standards Act that was put in place in January 2021 under the Trump administration, according to the DOL release. The rule could raise labor costs by up to 30% for employers who utilize independent contractors, such as app-based services like Uber or Lyft, which offer a freelancing model, as employers would have to adhere to minimum wage and overtime laws, according to Reuters.

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Almost a Quarter of All Jobs Added in 2023 Didn’t Actually Exist

South Carolina Sun Staff
man in yellow hardhat and work jacket

The original number of jobs reported by the federal government in 2023 was revised down by a total of 749,000 jobs, meaning nearly one-fourth of jobs thought to be created in the year were not actually there, according to data from the Bureau of Labor Statistics (BLS) analyzed by the Daily Caller News Foundation.

The sum of the initial estimate from each of the government’s monthly job growth reports in 2023 totaled 3,140,000 new jobs, with later reports revising down the number of jobs added by a collective 443,000, according to the BLS. The BLS also announced in August a revision in total employment for March, subtracting another 306,000 jobs.

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Businesses Are Getting Crushed ‘Beneath the Surface’ of Economy, New Figures Show

South Carolina Sun Staff

In recent years, mid-sized companies between $100 million and $750 million in yearly revenue have been increasingly struggling compared to large businesses, taking the brunt of poor economic conditions and high interest rates, according to asset manager Marblegate.

From 2019 to the end of 2022, mid-sized companies had a 24 percent drop in earnings before interest, taxes, depreciation and amortization (EBITDA) compared to public companies, which had their earnings rise 18 percent, according to a study by Marblegate acquired by Axios. The discrepancy between large and midsized companies is in part due to the increased cost of credit for smaller businesses, which are more affected by the Federal Reserve’s interest rate hikes, with the federal funds rate currently being placed in a range of 5.25 percent and 5.50 percent, the highest point in 22 years.

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