Newsletter: California Inc.: Hopes riding high for ‘Crazy Rich Asians’
Welcome to California Inc., the weekly newsletter of the L.A. Times Business Section.
I’m Business columnist David Lazarus, and here’s a rundown of upcoming stories this week and the highlights of last week.
Consumer spending accounts for about two-thirds of U.S. economic activity, so it’s no small concern that we learned Friday workers’ paychecks are worth less than they were a year ago because modest wage gains have not kept pace with inflation. Inflation rose 2.9% from July 2017 to July 2018, while average hourly pay increased 2.7% in the same period.
LOOKING AHEAD
Shopping slowdown? The latest read on the economy comes Wednesday when the Commerce Department is expected to report that retail sales growth slumped in July. Analysts are forecasting retail sales increased 0.1%, down from 0.5% in June and well off the 1.3% gain in May.
Big deal: The film “Crazy Rich Asians” opens Wednesday, marking the first studio film in 25 years to tell a contemporary story centered on an all-Asian cast. Fans already have bought out some theaters in hopes of boosting the movie’s crucial opening weekend box office returns.
Jobless claims: On Thursday, the latest stats on jobless claims will offer a snapshot of economic well-being. Last week, the Labor Department reported that the number of Americans filing for unemployment benefits unexpectedly fell. Initial claims for state unemployment benefits slipped 6,000 to a seasonally adjusted 213,000.
Consumer sentiment: The latest pulse reading of consumer sentiment will be issued Friday by the University of Michigan. Consumer sentiment dropped below expectations at the beginning of July to a six-month low amid rising fears about the Trump administration’s trade battles.
THE AGENDA
Monday’s Business section pays a visit to a family testing out Waymo’s driverless-car technology. Waymo’s Early Rider program in the Phoenix area is the furthest along among the company’s 25 test cities. The Google offshoot has logged more than 8 million miles in fully autonomous mode and is now starting to test cars in Phoenix with no backup safety driver behind the wheel. If the public launch is successful, Waymo would be the first autonomous ride-hailing business.
STORY LINES
Here are some of the other stories that ran in the Times Business section in recent days that we’re continuing to follow:
Electric jolt: Elon Musk upended the stock market with a single tweet that he was considering taking Tesla private at $420 a share. The tweet broke Wall Street protocols and sent the electric car maker’s stock swinging. But it mostly raised the question over how Tesla could afford a buyout costing tens of billions of dollars. His privately held SpaceX rocket maker may provide some clues.
Bank on it: It’s practically a dictionary definition to say that banks provide financial services, but the Internal Revenue Service has decided that nearly 2,000 community banks technically don’t. That will allow their owners to qualify for lower tax liability under the $1.5-trillion Republican tax-cut legislation that took effect Jan. 1. The Treasury Department was lobbied on the issue by the banking industry.
Thumbs down: The Academy of Motion Picture Arts and Sciences’ creation of a separate Oscar for popular films flopped with actors, studio execs and others in the industry. The move is intended to save the annual ceremony from diminishing ratings, but critics fear it will dilute the award and sow confusion, especially among distributors that spend millions of dollars to promote their top contenders.
Fuzzy picture: Snap Inc.’s second-quarter revenue beat projections, tempering long-held fears that loyal Snapchat users would never support a sustainable business. But the video messaging app reported a quarterly decline in daily users for the first time. The Venice company blamed the decline on the app’s controversial redesign nine months ago, which sparked a major backlash and prompted some tweaks.
Billion-dollar startup: DreamWorks Animation co-founder Jeffrey Katzenberg and former EBay chief Meg Whitman are gambling there is a paying market for short videos for mobile devices — with blockbuster production values. Their NewTV start-up, backed by major studios, got a big boost when it disclosed $1 billion in funding from investors that included Goldman Sachs and Alibaba Group, the Chinese e-commerce giant.
WHAT WE’RE READING
And some recent stories from other publications that caught our eye:
Labor woes: Missouri voters rejected a state law meant to reduce unions’ power, but the Atlantic says organized labor is still dying. “Union membership has consistently declined in the United States: Last year, membership stood at the historic low of 11%, cut nearly in half from where it was in 1983, when the Bureau of Labor Statistics began tracking it.”
Meet the new boss: Think you’re immune from the coming robot uprising? Think again. The New York Times says even high-skilled white-collar workers can be replaced by machines. “A much broader set of tasks will be automated or augmented by machines over the coming years,” says one economist.
Well traveled: The Wall Street Journal spots an unlikely aspect of our trade war with China — $900 million worth of fish caught in the U.S. and processed abroad. “The practice of sending fish to China to be breaded, seasoned, portioned or packaged has grown in the past two decades, according to U.S. fishing groups.”
What’s for lunch? Noma’s former head chef sees a business opportunity in the movement to reform school food, says the New Yorker. “The business model relies on standard restaurant-industry math: reduce food costs by buying raw materials instead of processed ones, but raise labor costs in order to cook them.”
Hey dude: From Bloomberg, a visit to the “man camps” of west Texas’ oil fields. “For the oil and gas industry, the man camps are the lowest-cost alternative, especially since most employees work weekslong shifts broken up by short trips home.”
SPARE CHANGE
For the guys in the man camps, some helpful tips. It’s OK to see yourself as the center of the world. But don’t lose sight of your values. There’s always room for self-improvement. And for upping your game. Because eventually you’ll have to rejoin the rest of the world.
For the latest money news, go to www.latimes.com/business. Mad props to Laurence Darmiento and Scott J. Wilson for helping put this thing together.
Until next time, I’ll see you in the Business section.
