Starbuck$$$ Coffee Buzz Gets Pricier; JPMorgan Ups the Minimum Pay Game; Drop in Job Openings Bums Out Economists

And then it happened…

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If there’s one thing you can rely on at Starbucks, besides the quality of their coffee, it’s that come July, the company will raise its prices. Today, the company did just that for the third year in a row. What Starbucks dubs as a “small price adjustment” shouldn’t be too bad. Well, that is, depending on what you purchased. Hey, if you don’t like it, blame rising coffee costs. And Starbucks, too, I suppose. The amount of Americans who drink coffee is expected to rise by 1.5%. The more people drink, the more the beans cost. Just another case of supply and demand, my friend. Prices went up between 10 cents to 20 cents on its brewed coffee, and between 10 cents and 30 cents on its espresso beverages and tea lattes. However, the price increases vary depending on which region you find your local Starbucks. In the grand scheme of things, purchases only actually increase by about 1%. Plus, the price went up on only 35% of its beverages. Which means that 65% of its beverages remain unchanged, price-wise, for those of you who shun change. But in all fairness, Starbucks is giving its employees a 5% raise come fall, not to mention doubling stock awards for employees who have been there for two years or more. Not that their raises and stock awards had anything to do with boosting the price of your chai latte, mind you.

Dimon in the rough…

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Starbucks isn’t the only company who is giving its hardworking employees a raise. Enter JPMorgan, the second most profitable company in the United States, who is about to give 18,000 of its employees a much appreciated boost in their paychecks. And this time, the employees aren’t even the ones who regularly rake in big bonuses. JPMorgan CEO Jamie Dimon will be raising the company’s minimum pay by 18% for employees who are mostly bank tellers and customer service representatives. These employees currently receive $10.15 per hour, but over the next three years will see increases of $12 per hour and then $16.50 per hour, depending on several factors. The company is also beefing up its in-house training programs as well, to the tune of $200 million, that will train thousands of entry level employees who work in consumer banking. Mr. Dimon says the new initiative is all about addressing concerns over income inequality, an issue that’s been getting a lot of negative attention, usually directed at Mr. Dimon and his peers. He also says it’s a way to attract and retain talent – an idea that company’s like Walmart, Target and McDonald’s have already started putting into practice. But leave it to the skeptics to whip out their negative spin and question if Dimon’s motives have more to do with a shrinking labor pool, and if JPMorgan is just getting ahead of an issue that might pose a problem in the future. The cost of raising the minimum pay by 18% will cost JPMorgan just about $100 million, which is just $7 million shy of the total 2015 compensation for Jamie Dimon and his four top-named executives.

Book of jobs…

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Even though JPMorgan and Starbucks are giving its employees more money to attract and retain great employees, the Bureau of Labor Statistics paints a very different employment picture. According to its latest report, job openings dropped to a five month low in May, with just 5.5 million jobs up for grabs, even though that same month also saw 5 million people getting hired. Not to be a downer, but that was the lowest rate since November 2014. At least voluntary quits fell to a 4 month low, with just 2.9 million leaving their jobs, presumably for better opportunities. Yet in April, job openings were at an all-time high. All these mixed numbers might just mean that the economy is not as healthy as we think it is. The Job Openings and Labor Turnover Survey, a.k.a JOLTS, is the division of the Bureau of Labor Statistics that tracks job openings, hires and separations. The Labor Department, which reports just on job creation and unemployment, reported that employers only managed to create 11,000 new jobs in May. In case you’re wondering why that’s a bad thing, then consider that those 11,000 jobs were 25 times less than the amount of jobs created in May of 2015. At least the number of layoffs and firings in May fell to a ten month low of 1.67 million. Economists, however, still think these numbers should be taken with a grain of salt. Which is easy for them to say since they seem to be gainfully employed.

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Snoop Dogg and Jared Leto Join the Reddit Fray; Jobs They are Aplenty; Soda Delivery Right to Your Door

Reddit already?

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Reddit, the website billed as “The Front Page of the Internet” is itself making headlines for having raised $50 million in funding. Of course, the usual Silicon Valley suspects whipped out their wallets to get a piece of the Reddit action but they weren’t the only ones. Hip-hop icon Snoop Dogg and oh-so-pretty-Oscar-winning-actor Jared Leto wanted in on the Reddit pie too. Reddit, whose content leaves some tongues wagging and other tongues gagging, plans on using that $50 million for all sorts of neat things like hiring more staff, improving its mobile offerings and, of course, ads. Reddit CEO Yishan Wong also has big convoluted plans to give back 10% –  in money, that is –  to the users who so valiantly scourge the internet to find the right stories that drive the traffic which entertains and sometimes horrifies its visitors. However Wong fully admits “that this plan could tally fail.” Totally. We mustn’t forget to mention that unfortunate incident when nude celebrity photos were leaked onto the site. Many thought the leak was extremely uncool. The site was launched back in 2004 and boasts 133 million users.

Sweet September…

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Image courtesy of renjith krishnan/FreeDigitalPhotos.net

Just in case you were feeling bummed about the economy, because I know that was your first thought when you woke up this morning, then here’s some good news. According to Automatic Data Processing aka ADP, aka those three letters that help decorate your paycheck, just released new data telling us that 213,000 jobs were added in the month of September. That marks the sixth month in a row that job gains are up. It’s especially good news since job gains over the 200,000 mark have a special little way of making the unemployment rate head a wee bit south. And these numbers are just from the private sector which, by the way, gained in all industries. Just wait till you see what numbers the public sector posts. Ooh. I can hardly stand the excitement. Now if the Bureau of Labor Statistics would graciously back up those numbers then all would be right with the world. Almost. Because less people are filing for jobless claims, which happen to be at a seven year low, more and more spending occurs, which leads to more and more economic growth, which leads to…well, you can figure it out from here.

Amazon quench…

Image courtesy of kraifreedom/FreeDigitaPhotos.net

Image courtesy of kraifreedom/FreeDigitaPhotos.net

Thirsty? Then you better log onto Amazon. Quick. That is if you are jonesing for PepsiCo’s latest beverage offering, PepsiTrue. What’s true is that this drink can only be purchased, for now anyways, via the e-commerce website – in 24 packs. What is also true is that it still has calories in it, except 30% less of them. As for the hotly contested high-fructose corn syrup and artificial sweeteners? Those ingredients have been scrapped as a way to win back Millenials who seem to prefer beverages sans those items and have been shifting away from soda for the last several years. And, by initially selling the product on Amazon, PepsiCo, apparently, will be able to gauge the response for the new cola. Now can someone tell me what PepsiCo would have done if this were 1984? Anyone?

 

Spring Is In the Economy, British: The Americans Are Coming! and Romancing Rupert Murdoch

Spring boom…

Image courtesy of graur razvan ionut/FreeDigitalPhotos.net

Image courtesy of graur razvan ionut/FreeDigitalPhotos.net

Spring is definitely in the air at the…Bureau of Labor Statistics, anyways. It reported that a whopping 288,000 jobs were created in April, springing way past analysts estimates of 210,000. That’s the highest number in two years. Figures like that mean people are hiring other people! Which means that when people get jobs, they get money. When they get money, they spend it. Then…Well you get the picture. And this despite the irritating news that the number of people filing for unemployment grew for the third straight week. Even unemployment hit a nice 6.3% low, which hasn’t been seen in six years! The economy isn’t just stable it’s…vroom vroom vroom accelerating.  A word that is music to any stagnant economy’s metaphorical ear.

Pfreakin Pfizer…

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Image courtesy of amenic181/FreeDigitalPhotos.net

You might think $106 billion dollars is a lot of money. Actually it’s an astronomical amount of money! But British drug company AstraZeneca (AZN) doesn’t think so. At least when its being offered to them by its New York based competition, Pfizer (PFE). In its very British way AstraZeneca said the amount was “inadequate” and then added that the terms in the proposal “substantially undervalue AstraZeneca and are not a basis on which to engage with Pfizer.” Man, that was proper. Pfizer, known for drugs like Viagra and cholesterol reducer Lipitor, wants to buy out its rival who it feels its offer is actually quite generous. Potatoes. Puhtatoes. If this takeover, hostile or otherwise, should occur, it would be the biggest foreign takeover in drug company history. Yes “drug company history” is a real thing. But the Brits are not cool with any takeover, especially of its crown jewel, AstraZeneca because they feel it would put a nasty crimp in their economy. Coincidentally, Pfizer’s chairman and CEO, Leif Johansson, is a British chap himself.

Newsie romance…

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Image courtesy of dan/FreeDigitalPhotos.net

You know Harlequin Romance novels? It’s those books you’d never admit to reading. But clearly you do since Rupert Murdoch’s News Corp (NWS) saw that it was worth buying its company, Harlequin Enterprises, from Canada’s Torstar Corp. for $415 million…in cash. Harlequin Enterprises must have a huge following (and I’ll bet the farm you’re part of it) since they are published in 34 languages in over 100 international markets. With approximately 1300 authors spinning out 110 titles a month, the company pulled in $372 million in revenue last year. And that’s how you spell romance.

Springing Unemployment, GrubHub Grab and High Frequency Drama

Look out unemployment, here comes Spring…

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Image courtesy of cooldesign/FreeDigitalPhotos.net

Weather, that fickle pernicious economic backstabber couldn’t stand in the way of the 192,000 jobs that were added last month, according to The Bureau of Labor Statistics.  However, experts were expecting that number to be a bit higher. They’re still satisfied, though, since unemployment stayed at a stubborn 6.7% – but to be fair, experts weren’t expecting that figure to budge from its perch anyway. If that doesn’t make you giddy, then how about the fact that there were actually more jobs added in January and February than previously reported. I know you can’t stand all this excitement but wait…there’s more!  The private sector has replaced/regained/re…whatever all the jobs it lost since December 2007 – which was the beginning of the ugly, terrible, horrible period we abhorrently call The Great Recession.

GrubHub is taking a big bite out of Wall Street today…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

The latest IPO to grab Wall Street’s conditional love is GrubHub, the Chicago based online service that gets a commission from a restaurant every time YOU order from their website. The company which also owns Seamless.com and Menupages raised a hefty $192 million and the stock flew over 40% today. It’s currently serving over 28,000 eating establishments from San Francisco to London with sooooooo very many more businesses to go. Nothing like an established and profitable business to get the stock market to look your way.

High frequency trading: Insider or Outsider?

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Image courtesy of rattigon/FreeDigitalPhotos.net

In the ongoing high-speed trader saga, following Michael Lewis’s book, “Flash Boys: A Wall Street Revolt” where he accuses some traders of rigging the stock market, US Attorney General Eric Holder joined in the fun: “I can confirm that we at the United States Justice Department are investigating this practice to determine whether it violates insider trading laws.” High-frequency/high speed traders use computer algorithms to execute transactions in milliseconds anticipating trades before they happen. Charles Schwab, the famed founder of the discount trading firm, called high-frequency trading a “growing cancer.” So clearly he’s not feeling the love there. Dems have ideas for taxing the practice into oblivion.  Republicans have plans not to pass those ideas. High-frequency traders have plans to continue what they are doing since they believe they provide liquidity to the market.