The Week in Business: Job Growth Is Solid but Slowing
What’s Up? (Aug. 28-Sept. 3)
The Labor Market Cools
After a surprising jobs report in July, which showed employers adding jobs at a blistering pace, August’s numbers fell more in line with expectations. The economy gained 315,000 jobs last month, well within range of the roughly 300,000 that forecasters had projected. That was a significant deceleration for the labor market — and is just what the Federal Reserve was looking for. Policymakers at the central bank have been trying to slow job growth as part of their campaign to rein in inflation and cool the economy. The Fed is likely to see this latest jobs report as a sign that its policies are working, but it well knows that its work isn’t over. The August jobs numbers still reflect a strong pace of growth, and Jerome H. Powell, the Fed chair, has indicated that there is little that would sway the central bank from its path of raising rates, including at its Sept. 20-21 meeting.
There are many in Silicon Valley who would rather avoid the legal battle surrounding Elon Musk’s efforts to step away from a deal to buy Twitter, but others are eager to get in on the action. The former group is made up of the tech industry’s elite, a great number of whom have been summoned by Mr. Musk’s and Twitter’s lawyers to share what they know about the $44 billion deal. In the latter group are the lawyers who wish to represent them. The swirl of subpoenas before an October date in Delaware Chancery Court has created a frenzy of excitement for top-tier law firms. So far, Twitter’s lawyers have been more aggressive, as they prepare to argue that Mr. Musk’s reasons for trying to back out of the deal are unfounded. They have issued more than 84 subpoenas, with some going to Mr. Musk’s inner circle of friends and associates, as well as the investors who agreed to help finance his acquisition. Mr. Musk’s lawyers escalated his side of the fight last week, issuing a subpoena to the whistle-blower Peiter Zatko, Twitter’s former security chief — a sign that Mr. Musk may try to use Mr. Zatko’s accusations of false statements and security shortcomings at Twitter to shore up his case.
A Struggling Retailer Gets a Lifeline
In an attempt to turn around a spectacular sales slump, Bed Bath & Beyond confirmed on Wednesday that it had taken out more than $500 million in new financing, including $375 million from the investment firm Sixth Street. The sorely needed infusion of cash is intended to help the retailer recover from the steady decline in its sales and profits over the last few years, which did not let up even as the pandemic led people to spend more on home goods. The new funds are a kind of stopgap, as the company focuses on a new “back to basics” approach, which involves figuring out how to get more foot traffic to its stores and stock shelves with merchandise customers want to buy. The company also said it planned to close 150 of its approximately 1,000 stores, lay off employees and slash spending.
What’s Next? (Sept. 4-10)
Another Silicon Valley Trial
A former chief of security at Uber is heading to court this week in what may be a first for Silicon Valley. The charges faced by Joe Sullivan, who worked for the ride-hailing company for two years, are believed to be the first against an executive stemming from a company’s response to a security incident, and other chief security officers are following the case closely. According to a criminal complaint, Mr. Sullivan learned that hackers had gained access to the personal data of more than half a million Uber drivers and some personal information linked to 57 million riders and drivers. When the hackers demanded money, Mr. Sullivan and other Uber employees negotiated a $100,000 Bitcoin payment and persuaded them to sign nondisclosure agreements. He was fired in 2017, and later charged with attempting to conceal the hack from federal investigators. He has pleaded not guilty.
A New iPhone?
At its product launch event on Wednesday, Apple is poised to build on a number of security protections it unveiled in June, which included a service that hides users’ internet traffic from internet providers and changes to its Mail app to better protect users’ identities from people sending them emails. At the time, Apple said iOS 15, which it planned to roll out in the fall, would offer users a so-called app privacy report that told them what data their apps were collecting about them — another part of the company’s campaign to be seen as a gatekeeper between consumers and the larger tech world. Much flashier for many, however, will be Apple’s expected unveiling of the iPhone 14 and new Apple Watches, which have recently found an unexpected audience among children.
Rate Increases in Europe
Central bankers in the eurozone are likely to announce another large rate increase when they meet this week as they come under pressure to act on high prices. Fresh inflation data showed that consumer prices in the eurozone in August rose 9.1. percent from a year earlier. That number gives policymakers at the European Central Bank all the more reason to continue raising interest rates, as they did in July for the first time in more than a decade, lifting the E.C.B.’s benchmark rate by half a percentage point. Some analysts expect an even larger increase this time, with Goldman Sachs, for example, projecting a three-quarter-point increase.
Snap, the parent of Snapchat, said it was laying off 20 percent of its staff. Architects at a New York company formed the country’s first formal union at a private-sector architecture firm. And Twitter announced an edit button for tweets last week.