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The World
U.K. government ministers met trade union leaders but fell short of ending a wave of strikes that has hobbled the rail network and strained the overburdened health system. There were small signs of progress but no breakthrough after a meeting between Health Secretary Steve Barclay and health care unions. Other ministers met with railway unions that have staged months of strikes, and teaching unions considering classroom walkouts. Barclay said the talks had made progress and the government wanted “to work constructively with the trade unions.” (Associated Press)
Britain has become less competitive and less attractive to foreign investors as a result of soaring energy costs and recent political turmoil, manufacturers said in an industry survey. The proportion of manufacturers who think Britain is a competitive location halved to 31% from 63% a year ago. (Reuters)
Mexico ended 2022 with 7.82% annual inflation, the highest rate in more than two decades. What Mexican families felt most was the 14.14% annual inflation in food prices, which suffered the highest price increases for any category. By comparison, inflation in 2021 ran at 7.36%. Mexico’s central bank has responded by raising it central interest rate to 10.5%, also the highest level in many years. The government has also temporarily lifted import duties on certain food categories, to try to tame inflation. (Associated Press)
The threat of cuts to U.S. defense spending has emerged as a flashpoint in House Republicans' first week in the majority, widening the GOP's isolationist fault line and exposing the fragility of Kevin McCarthy's young speakership. Eager to capitalize on the GOP's internal strife, the White House press office blasted out the WSJ op-ed and a statement that called defense cuts "senseless and out of line with our national security needs." (Axios)
The hole in the Earth’s ozone layer, once the most feared environmental peril facing humanity, is set to be completely healed over most of the world within two decades following decisive action by governments to phase out ozone-depleting substances, a new UN assessment has found. (The Guardian)
Disney Requires Workers to Come to Office Four Days a Week, Starting in March: The in-office workweek is one of the most comprehensive return-to-work policies at large U.S. companies since the pandemic. (Wall Street Journal)
UK job recruiters said demand for permanent staff slipped for a third month in December, contracting at the sharpest pace since pandemic lockdowns were in place in early 2021. (Bloomberg)
The Debate Swirling Inside HR Departments: How to Lay Off Workers. When exactly to fire employees, whether to cut once or multiple times and how much severance to offer can vex executives; the Zoom question. (Wall Street Journal)
Public-transit systems are at a crossroads, with fewer riders, dwindling cash and rising crime. Changes in commuter behavior after the pandemic have left several of the nation’s largest urban mass-transit systems operating at well below capacity—particularly on Mondays and Fridays. The ridership shortfall is forcing transit authorities to question their decades-old funding models for public buses, subways and trains, which are based on a combination of rider fares and public money. (Wall Street Journal)
Majorities in every generation favor ethical consumerism, but Gen Z is the least enthused: The majority of U.S. consumers (59% as of late December) say they want to purchase goods and services from companies that reflect their social values. This includes large — but unequal — shares of each generation, with Gen Z adults the least likely to say so. Gen Z’s differing views become even more noticeable when assessed on a net basis: The share of Gen Zers who say they favor values-based purchasing is only 28 percentage points higher than the share who don’t, compared with differences of 40 and 41 percentage points for baby boomers and millennials, respectively. (Morning Consult)
Economy
A troubling signal from America’s retirement accounts: A record number of American workers cracked into their retirement savings as inflation soared last year, a dangerous sign that the bulwark amassed by households across two stimulus-flush pandemic years is fading. Vanguard, which oversees roughly 5 million retirement accounts, found that a growing number of participants in its employer-sponsored plans were requesting loans or seeking withdrawals as inflation rocketed over the last year. Data from the $7.2 trillion asset management firm found that a record number of savers used their 401(k)s to address immediate emergencies like medical bills or prolonged unemployment. (Politico)
Tokyo core CPI up 4.0% in December, biggest rise since 1982. (Nikkei Asia Review)
Mary Daly becomes latest Fed official to raise prospect of 0.25 point rate rise: San Francisco president of US central bank said ‘case can be made’ for half- or quarter-point increase. (Financial Times)
Texas is forecasting a record $32.7 billion budget surplus as a surge in sales taxes boosts the government’s revenue by billions more than what analysts had estimated. The expected surplus, also called a cash carryover balance, is the largest on record for the Lone Star State and 21% more than the $27 billion forecast in July, Comptroller Glenn Hegar announced Monday. Including the extra cash and taking into account transfers to reserve funds, he projects the state will have $188.2 billion of revenue available for general-purpose spending during the two-year period that begins in September. That’s a 26.3% increase from the 2022-2023 biennium. (Bloomberg)
Labor unrest took an unusually heavy toll on ports around the world last year, and the outlook for continued economic instability could bring even more upheaval to global supply chains in 2023. There were at least 38 instances of protests or strikes affecting port operations last year, more than four times as many as in 2021 when the pandemic upended global trade, according to Crisis24, a maritime security consultancy. There were nine incidents in 2020, according to data beginning in July. Crisis24 changed its tracking system at that time, and comparisons with previous years are unavailable. (Bloomberg)
As White-Collar Layoffs Rise, Blue-Collar Resilience Faces Test in 2023. Layoffs at white-collar companies are starting to rise. Now the question hanging over the economy in 2023 is whether that trend spreads to blue-collar industries as interest rates bite. Average layoffs in finance and insurance from September to November nearly doubled from a year earlier, according to Labor Department data released this past week. Job cuts picked up by more than 20% among real-estate lessors, brokers and agents over the same period, and by about 14% in the tech-heavy information sector. (Wall Street Journal)
Technology
Social media giant Meta Platforms Inc. can pursue its lawsuit against NSO Group over the Pegasus spyware scandal, the US Supreme Court decided. The Israeli software company is facing accusations of installing Pegasus on servers used by WhatsApp messaging platform, owned by Meta, in 2019. NSO Group allegedly did this by exploiting a bug and without permission from the social media platform. The move has allowed for spying of some 1,400 WhatsApp users, including journalists, activists and dissidents by various governments. (Deutsche Welle)
Taiwanese lawmakers have passed new rules that let local chip firms turn 25% of their annual research and development expenses into tax credits, part of efforts to keep cutting-edge semiconductor technologies at home and maintain the island’s technology leadership. Officials there have repeatedly said they will ensure the latest chip technologies remain in Taiwan, a point that has been reaffirmed by executives at Taiwan Semiconductor Manufacturing Co. and other local chip giants. (Bloomberg)
North American startup funding tanked further in Q4 North American startup investment fell sharply in 4Q22, closing out 2022 with funding far below the prior year’s record-setting levels. In total, investors put $36.1 billion to work across all stages in Q4. That’s a whopping 63% decline from a year earlier. (Crunchbase)
Microsoft unveils text-to-speech AI model VALL-E, which was trained on English speech data and can simulate a person's voice with three seconds of sample audio. (Ars Technica)
Up until late December 2022, hackers were using a flaw in Experian's site to get anyone's entire credit report using only their name, address, birthday, and SSN. (Krebs on Security)
Sketchy iOS app “ChatGPT Chat GPT AI With GPT-3”, which is not affiliated with OpenAI, is selling subscriptions and has been a top paid App Store app for days. (Macrumors)
Gunnar Wiedenfels, the Warner Bros. Discovery CFO, believes you’re not paying enough for your favorite streaming service. Wiedenfels said streaming services have been priced to to get subscribers at the expense of profitability, describing the approach as a “land grab.” “There’s no doubt that these products are priced way too low,” he said. (Los Angeles Times)
Smart Links
Dollar hovers near seven-month lows after jobs data. (Reuters)
Beer Sales Drop as Consumers Balk at Higher Prices. (Wall Street Journal)
UK's first satellite launch fails to make it into orbit. (Deutsche Welle)
SEC charges former McDonald’s chief with misleading investors. (Financial Times)