Economics

• Wendy's is walking back suggestions it will start surge-pricing burgers and fries.
• On an earnings call, the company's CEO said it would begin experimenting with "features like dynamic pricing."
• Wendy's later said its dynamic pricing wouldn't raise prices and would only offer discounts.

Wendy's on Tuesday appeared to walk back comments from CEO Kirk Tanner that prompted widespread reports — and backlash — over the idea that the company would be introducing surge pricing for burgers and fries.

China’s Country Garden Holdings said Wednesday it received a liquidation petition filed by one of its creditors, deepening worries about the country’s beleaguered property sector.

The troubled property developer said in a regulatory filing it received a “winding-up” petition dated Feb. 27 filed by creditor Ever Credit Limited.

The petition was issued for the non-payment of a loan worth 1.6 billion Hong Kong dollars ($204.4 million).

How long will baby boomers keep working? For some, the answer is forever.

To grossly paraphrase Kim Kardashian, nobody stops working anymore. Just look at who’s in the running for the top job in the nation: a 77-year-old against an 81-year-old, both vying to keep working for another four years. Yet they’re in lockstep with a national trend — older Americans are working longer, into their 60s and even their 70s and beyond. Among Americans 65 and older, 19 percent were still working last year, which is almost a twofold increase from the late 1980s.

Last year, the average retirement age was 62, according to a Gallup survey, up from 59 in the early 2000s. Older people aren’t just delaying retirement, but working longer hours: On average, this group’s annual work hours are almost 30 percent higher than they were in 1987.

The question of why is hard to answer. People keep working because they want to and because they have to, and sometimes a mix of both. “You can think of it as both a reflection of empowered preferences to go work more and longer — versus curtailed savings that force you into the labor force. They’re both happening,” says economist Kathryn Edwards.

Wendy’s is looking to test having the prices of its menu items fluctuate throughout the day based on demand, implementing a strategy that has already taken hold with ride-sharing companies and ticket sellers.

During a conference call earlier this month, Wendy’s CEO Kirk Tanner said that the Dublin, Ohio-based burger chain will start testing dynamic pricing, also known as surge pricing, as early as next year.

A hot stock market lifted more retirement accounts to new heights in 2023, Fidelity says.

The number of folks with $1 million or more saved in their 401(k) accounts jumped 20% from September to the end of December, according to Fidelity Investments.

All told, there were 422,000 retirement savers in Fidelity 401(k) plans sporting balances of seven figures and beyond as of Dec. 31, up from 349,000 at the end of September and 299,000 at the end of 2022.

There were also 391,562 IRA millionaires on Dec. 31, up from 338,725 at the end of September and 280,320 at the end of December 2022.

Green businesses and jobs are booming – in stark contrast to the national economy – but political U-turns risk future growth

The UK’s net zero economy grew by 9% in 2023, a report has revealed, in stark contrast to the 0.1% growth seen in the economy overall. Nevertheless, the report pointed out that strong future growth from green businesses was being put at risk by government policy reversals, lack of investment and competition from the EU and US.

Thousands of new green companies were founded in 2023 and overall the sector was responsible for the production of £74bn in goods and services and 765,000 jobs, according to the report by the Energy and Climate Intelligence Unit (ECIU) and the Confederation of British Industry (CBI).

Kellogg's is advertising cereal as an affordable dinner for people struggling with the rising cost of food — but some consumers aren't happy with the cereal maker's approach.

WK Kellogg CEO Gary Pilnick told CNN last week that the messaging was "landing really well" with customers.

"Cereal for dinner is something that is probably more on trend now, and we would expect to continue as that consumer is under pressure," he said.

But the reaction to his comments on social media suggests otherwise.

"What the hell kind of dystopian hellscape is this?" one user wrote on a TikTok with almost 150,000 views. "Give the peasants cereal for dinner!" another commented.

The Federal Trade Commission sued to block a proposed merger between grocery giants Kroger and Albertsons, saying the $24.6 billion deal would eliminate competition and lead to higher prices for millions of Americans.

The FTC filed a lawsuit in U.S. District Court in Oregon on Monday. It was joined in the suit by the attorneys general of eight states and the District of Columbia.

Kroger and Albertsons, two of the nation’s largest grocers, agreed to merge in October 2022. The companies said a merger would help them better compete with Walmart, Amazon, Costco and other big rivals. Together, Kroger and Albertsons would control around 13% of the U.S. grocery market; Walmart controls 22%, according to J.P. Morgan analyst Ken Goldman.

Both companies, immediately after the FTC announcement, said that they will challenge the agency in court.

Summary

• Europe tries to square circle of growth and green transition
• EU productivity lags far behind United States
• Industry complains of green rules, lobbies for aid

Reuters link

American CEOs used to swoon over China. Its vast pool of consumers has been a magnetic draw for decades. But doing business there has become so fraught and risky – with intellectual property theft and an expanded espionage law used to intimidate the business community – that U.S. companies have pressed the pause button.

On top of that, the U.S.-China relationship has become contentious due partly to Beijing's belligerent activity toward Taiwan and in the South China Sea, the balloon spy incident of last year, and the list goes on.

Making matters worse, the Chinese economy has hit a wall: export growth is slowing, the country's drowning in debt, and youth unemployment has soared.

This year looks to be a much better one for the U.S. economy than business economists were forecasting just a few months ago, according to a survey released Monday.

The economy looks set to grow 2.2% this year after adjusting for inflation, according to the National Association for Business Economics. That’s up from the 1.3% that economists from universities, businesses and investment firms predicted in the association’s prior survey, which was conducted in November.

It’s the latest signal of strength for an economy that’s blasted through predictions of a recession. High interest rates meant to get inflation under control were supposed to drag down the economy, the thinking went. High rates put the brakes on the economy, such as by making mortgages and credit card bills more expensive, in hopes of starving inflation of its fuel.

But even with rates very high, the job market and U.S. household spending have remained remarkably resilient. That in turn has raised expectations going forward. Ellen Zentner, chief U.S. economist at Morgan Stanley and president of the NABE, said a wide range of factors are behind the 2024 upgrade, including spending by both the government and households.

Inflation has changed the way many Americans shop. Now, those changes in consumer habits are helping bring down inflation.

Fed up with prices that remain about 19%, on average, above where they were before the pandemic, consumers are fighting back. In grocery stores, they’re shifting away from name brands to store-brand items, switching to discount stores or simply buying fewer items like snacks or gourmet foods.

More Americans are buying used cars, too, rather than new, forcing some dealers to provide discounts on new cars again. But the growing consumer pushback to what critics condemn as price-gouging has been most evident with food as well as with consumer goods like paper towels and napkins.

In recent months, consumer resistance has led large food companies to respond by sharply slowing their price increases from the peaks of the past three years. This doesn’t mean grocery prices will fall back to their levels of a few years ago, though with some items, including eggs, apples and milk, prices are below their peaks. But the milder increases in food prices should help further cool overall inflation, which is down sharply from a peak of 9.1% in 2022 to 3.1%.

Chip giant Taiwan Semiconductor Manufacturing Co. opened Saturday in an official ceremony its first semiconductor plant in Japan as part of its ongoing global expansion.

“We are deeply grateful for the seamless support provided by you at every step,” TSMC Chairman Mark Liu said after thanking the Japanese government, local community and business partners, including electronic giant Sony and auto-parts maker Denso. The company’s founder Morris Chang, was also present.

This comes as Japan is trying to regain its presence in the chip production industry.

The Japan Advanced Semiconductor Manufacturing, or JASM, is set to be up and running later this year. TSMC also announced plans for a second plant in Japan earlier this month, with production expected to start in about three years. Private sector investment totals $20 billion for both plants. Both plants are in the Kumamoto region, southwestern Japan.

The tech sector is having a big 2024. Nvidia just crushed earnings expectations. The artificial intelligence boom remains in full swing. The tech-heavy Nasdaq index is up more than 8 percent year to date.

The U.S. economy is also doing surprisingly well, adding 353,000 jobs in January, well ahead of economists’ forecasts. Hotter-than-expected inflation data may also keep the Fed from cutting rates as soon as the market expects, a sign that the economy remains strong enough to support tighter monetary policy for longer.

It’s a different story for tech workers, though.


Two U.S. senators looking to crack down on the number of packages from China that enter the country duty-free are calling on President Joe Biden to take executive action, saying U.S. manufacturers can’t compete with low-cost competitors they say rely on forced labor and state subsidies in key sectors.

U.S. trade law allows packages bound for American consumers and valued below a certain threshold to enter tariff-free. That threshold, under a category known as “de minimis,” stands at $800 per person, per day. The majority of the imports are retail products purchased online.

Alarmed by the large increase in such shipments from China, lawmakers in both chambers have filed legislation to alter how the U.S. treats imports valued at less than $800. Now, Sens. Sherrod Brown, D-Ohio, and Rick Scott, R-Fla., have sent a letter to Biden calling on him to end the duty-free treatment altogether for those products.

• US stocks continued climbing higher as Nvidia's blockbuster earnings report gave the market a fresh impetus to rally.
• The chip maker notched a $2 trillion valuation for the first time ever Friday morning.
• The S&P 500 and the Dow both added to record levels from Thursday's session.

As states and the federal government pour money into early education, how will they keep a public good from becoming a private cash cow?

President Joe Biden said Wednesday that while a college degree was still a ticket to a better life, that ticket is often too expensive, as he announced he was canceling federal student loans for nearly 153,000 borrowers.

Biden, who is in the midst of a three-day campaign swing through California, made the announcement as part of a new repayment plan that offers a faster path to forgiveness, putting the spotlight on his debt cancellation efforts as he ramps up his reelection campaign.

“Too many Americans are still saddled with unsustainable debt in exchange for a college degree,” he said from a local library, before he went on to campaign-related events. Loan relief helps the greater economy, he reasoned, because “when people have a student debt relief, they buy homes. They start businesses, they contribute. They engage.”

Poverty levels skyrocketed to 57.4% of Argentina’s 46 million people in January, the highest rate in 20 years, according to a study by the Catholic University of Argentina.

The findings quickly unleashed accusations between Argentina’s former Vice President Cristina Fernández de Kirchner and the government of President Javier Milei, who came to power announcing a series of shock measures aimed at tackling the country’s severe crisis.

About 27 million people in Argentina are poor and 15% of those are mired in “destitution,” meaning they cannot adequately cover their food needs, according to the study released over the weekend.

The UCA’s social debt observatory is considered an independent and prestigious research space whose reports on poverty cover a larger geographical area than those conducted by Argentina’s national statistics agency, INDEC. It also applies a methodology that addresses the problem with a more multidimensional approach and its findings are seldom questioned by politicians and economists.

• The Nikkei 225 hit an all-time high of 38,924.88 as robust corporate earnings and steps aimed at boosting investor returns fuel a blistering rally in Japanese equities this year.
• Nikkei and Topix have been standout outperformers in Asia Pacific, up more than 10% in 2024 after surging more than 25% in 2023 — their respective best annual gain in at least a decade.

Boeing says the head of its 737 jetliner program is leaving the company immediately, paving the way for the aircraft maker to appoint new leadership at the troubled division.

The company said Wednesday that Ed Clark had been with Boeing for 18 years.

Katie Ringgold will succeed him as vice president and general manager of the 737 program, and the company’s Renton, Washington site.

Americans have become increasingly reliant on their credit cards since the pandemic. So much so that Capital One is willing to bet more than $30 billion that they won’t break the habit.

Capital One Financial announced Monday that it would buy Discover Financial Services for $35 billion. The combination could potentially shake up the payments industry, which is largely dominated by Visa and Mastercard.

For customers of the companies, it might eventually mean bigger perks and more merchant acceptance of Discover cards, and potentially lead to more competition in the payments industry. But most of the benefits will be going to the companies themselves, as well as the merchants who accept these cards.

The share of Hispanic, Black and Asian Americans who own a home grew over the past decade despite soaring interest rates in the past few years, according to the National Association of Realtors.

Why it matters: Homeownership is "Americans' biggest asset," says Jessica Lautz, deputy chief economist and vice president of research for the association.

• "We know the typical homeowner has nearly $400,000 in wealth in comparison to the typical renter who has just over $10,000 in wealth."

Details: A report by NAR released Tuesday shows that Asians and Hispanics had the largest gains in homeownership rates from 2012 to 2022, while Black Americans had the smallest.

• 63% of Asian Americans owned a home in 2022, compared to 57% in 2012.
• Hispanics' share hit a record 51% in 2022, up from slightly more than 45% in 2012.
• Black Americans' rate went from 42.5% in 2012 to 44% in 2022.
• White Americans continue to have the highest ownership rates, increasing from 69% to 72% in the same time frame.

• The U.K. economy is worse off today than before Brexit, according to new analysis from Goldman Sachs.
• Britain’s decision to leave the European Union has hampered the economy to the tune of 5% versus other comparable countries, the estimates showed.
• The Wall Street bank attributed the shortfall to three key factors: reduced trade; weaker business investment; and lower immigration from the EU.

• Capital One is readying an acquisition of Discover Financial Services, according to The Wall Street Journal.
• The deal would merge two of the largest credit-card issuers in the US.
• Discover is coming off a difficult year after compliance lapses led to a CEO resignation.