Pre-market actions: Why companies are obsessed with worker compensation
The companies emphasized when releasing their financial results that they do not see this trend dissipating any time soon.
Why it matters: Rising wages may increase costs for businesses, but it is a positive development for workers, at least in theory. Higher wages could help reduce turnover and burnout in sectors such as trucking.
The full picture, however, is more complicated. Adjusted for inflation, wages and salaries in the United States fell 1.9% for the 12 months ending in December, which means that rising prices are canceling out wage gains.
However, wage increases are an important component of the evolution of inflation. Today’s economy is very different from that of the 1970s and 1980s, the last time inflation was a major issue. But economists are always very attentive to signs of a “wage-price spiral”.
It’s a damaging feedback loop in which companies raise prices, and workers then demand higher wages to cover their bills. If this pattern continues to repeat itself, inflation could persist even after supply chain lockdowns and other coronavirus-related factors ease.
“Labour market developments are critically important because if the psychology of higher inflation is to take root, it will do so through wage and compensation deals,” said Neil Shearing , chief economist of the Capital Economists group, in a research note published on Monday.
While the stock market turmoil “has understandably been in the headlines for the past few weeks … it is developments in labor markets that will ultimately determine the future path of inflation and interest rates,” he said. he continued.
Spotify is under pressure from Covid-19 misinformation
It just happened: The company said on Sunday that it adds a content advisory to any podcast episode that includes a discussion of the pandemic. The notice will direct listeners to a coronavirus hub with links to trusted sources.
He also publicly share the rules of its platform, which were for internal use.
“We know we have a critical role to play in supporting creator expression while balancing it with the safety of our users,” CEO Daniel Ek said in a blog post. “In this role, it’s important to me that we don’t take the position of content censor while ensuring that there are rules in place and consequences for those who break them.”
Under the microscope: Young first called out Spotify because of her relationship with popular comedian Joe Rogan, whose podcast aired misleading and inaccurate claims about vaccines and the virus. Spotify has an agreement to host “The Joe Rogan Experience” exclusively.
“I’m not trying to promote misinformation, I’m not trying to be controversial,” Rogan said. “I never tried to do anything with this podcast other than just talk to people.”
Investor Outlook: The controversy doesn’t seem to scare off investors. Shares of Spotify rose nearly 3% in premarket trading. But stocks have been battered this year amid a sell-off in tech companies. They are down 26% over the past month.
Wall Street gives some love to Visa and Mastercard
On Friday, Visa’s stock jumped nearly 11%, while Mastercard jumped 9%.
Driving the jump? Both companies posted strong earnings in their most recent quarters and said they did not expect the highly contagious variant of Omicron to make spending.
Visa said cross-border travel spending soared 102% year-over-year and is now at 72% of 2019 levels.
“While Omicron has had a recent impact on cross-border travel, we continue to believe that cross-border travel will return to 2019 levels by the end of this year,” CEO Michael Miebach said on a call with analysts.
The Chicago Purchasing Managers Index is posted at 9:45 a.m. ET.