The Daily Valet. - 11/2/23, Thursday
✔️ The Economy Is ... Good
Thursday, November 2nd Edition
By Cory Ohlendorf, Valet. Editor
We’re talking about money today, but chances are, you’re doing better than you think.
Today’s Big Story
The Economy Is Good
In fact, experts say that it’s great. So why Are So many Americans in Such a Rotten Mood?
The American economy continues to defy logic. The Federal Reserve kept its target interest rate unchanged Wednesday for the second straight policy meeting, while acknowledging strong growth over the last few months. What does that mean? Well, in keeping the benchmark federal funds rate in the 5.25% to 5.5% range, the central bank's unanimous decision left open the possibility that its two-year rate hiking campaign may have reached its end.And just last week, we learned that the economy, far from sliding toward recession as economists had predicted over the past year, has actually picked up steam thanks to consumers who seemingly can't stop buying stuff. According to NPR, Americans have been opening their pocketbooks in a major way, buying more of everything—from cars and electronics to high-priced concert tickets.Not only has economic output made up all the ground lost during the pandemic, but it is also above where it would have been had the pandemic never happened, judging by what the Congressional Budget Office projected in early 2020. Many believe that such personal spending is being propped up by a very strong job market, with an unemployment rate below 4% for 20 months in a row. Workers with regular paychecks to spend have enabled the economy to withstand speed bumps like falling business investment.So if the economy is so good, why are Americans so gloomy? Confidence readings are depressed. Some 69% of respondents to a Wall Street Journal survey said the country is headed in the wrong direction. President Biden's approval ratings are mired around or below 40%, and approval for his handling of the economy is even lower. Similarly, a poll by Gallup this month found that 47% of Americans rate the economy as “poor,” while only 19% rate it as “good” or “excellent.” Gallup's index of economic confidence shows some improvement from last summer, when inflation was at its peak. But high prices grate on people, even as they continue to pay them.True, for a long time wages were lagging behind inflation, but not anymore. Median weekly wages are slightly higher now, adjusted for inflation, than at the end of 2019. They haven't grown, as they did in the years before the pandemic. But other things should have compensated for that. Workers are getting more time off and more flexibility, which is why the Conference Board finds job satisfaction also quite high. Another encouraging number? The median ratio of household debt payments to income slid to a record low of 13.4%. Federal pandemic relief means household finances are stronger, even now, than before the pandemic. Meanwhile, high housing and stock prices lifted the median household's wealth after inflation by 37% between 2019 and 2022. That's the largest in the history of the Federal Reserve's survey.
Yes, But:
Whether the Fed raises rates again in December could depend on whether recent readings showing strong late-summer growth continue into the fall.
Injured Gazans, Foreign Nationals Enter Egypt
The southern Gaza border opened for the first such crossings since the war began
Israeli ground troops have advanced to “the gates of Gaza City” in heavy fighting with militants, the military said Wednesday, as hundreds of foreign nationals and dozens of seriously injured Palestinians were allowed to leave Gaza after more than three weeks under siege.While a few U.S. citizens were among the aid workers allowed out on Wednesday, diplomats said that, in general, Americans in Gaza—about 500 to 600, the State Department has estimated—would not begin to exit until later today, for reasons that were not made clear.Meanwhile, President Biden on Wednesday reiterated that a “pause” was needed in the fighting. Biden was speaking at a Minneapolis campaign fundraiser when a protester interrupted him, calling for a cease-fire. Also on Wednesday, heavy airstrikes demolished apartment buildings for the second day in a row in the densely populated Jabaliya refugee camp near Gaza City. Al Jazeera television showed wounded people, including children, being brought to a hospital.
Don’t Be Surprised If WeWork Files for Bankruptcy
Once Valued as a $47 billion behemoth, it's now preparing for chapter 11 protection
WeWork is planning to file for bankruptcy as early as next week, according to people familiar with the matter, in what would mark a stunning reversal for the flexible-office-space venture that was once valued at $47 billion. According to the Wall Street Journal, the company is considering filing a chapter 11 petition in New Jersey, the people said. Stock in the company was down 49.7% in early morning trading on Wednesday, bringing its market capitalization to just $61 million. TechCrunch says that's “a ludicrous drop considering this company raised more than $7.09 billion in equity capital while private.” But it's also not a surprise, given that in August, the company expressed doubts about its ability to continue as a going concern, which is business-speak for “the wheels are coming off this damn car and it's not looking good.”Axios reports that WeWork failed to make required interest payments to bondholders on Oct. 2. It then negotiated a 30-day grace period, to let it “take steps to rationalize its real estate footprint,” before receiving yet another extension that lasts through next Monday. The company has been desperately trying to renegotiate most of its leases globally—with some standoffs leading to evictions. It's such a mess, but it does make me want to rewatch WeCrashed.
Meanwhile:
Our new House Speaker also appears to be broke. Financial disclosures show Mike Johnson doesn’t have a savings account or even $5,000—all while wrestling with hundreds of thousands in loans.
The Most Affordable EV in America?
Vietnamese automaker Vinfast wants to sell a cool mini car here for less than $20,000
Remember the VinFast VF3 that debuted earlier this summer? Probably not, as it was only intended to be a minicar for the company's Vietnamese home market. Powered by an electric engine and with deep Suzuki Jimny vibes, the VF3 measures 122.5 inches long—about 2.5 feet shorter than a Mini 2-Door Hardtop or Mazda Miata.So far, the automaker is struggling to gain a foothold in the States with models like the VinFast VF8, but the upcoming VF3 could be sold in America to appeal to those looking for an affordable EV. The company said it's “researching the demand and potential for the VF 3 model in the U.S., following the positive responses from our dealers.”According to Jalopnik, this is great news. In the U.S., affordable new EVs are rare “as automakers have prioritized flagship models that are too expensive for many, especially considering the concerns many Americans still have about EVs.” They also cited VinFast representatives who say that the VF3 may even qualify for federal tax credits under an unclearly defined leasing rule. If so, the VF3 could cost in the ballpark of around $12,500. Wow.
FYI:
Resurrected in electric form, Honda's folding Motocompacto scooter tries to rethink urban mobility—again.
In Other News
CDC says it’s the largest increase in two decades.
Have you heard about ...
We’re Giving Away the Newest Apple Watch
The modern timepiece is ruggedly stylish and ready for adventure
There's a reason why so many people are talking about the new Apple Watch Series 9. Upgraded with the S9 chip, the leading smartwatch is now even more capable and intuitive--it also boasts a number of innovations, including the new "double tap" gesture. This wildly futuristic feature allows you to interact with the watch, without even touching it. Just double-tap your index finger and thumb together to answer a call, open a notification, play and pause music, and more.This is a timepiece designed to keep up with you, while also keeping you in the loop with the rest of your everyday life. With the most precise GPS ever offered, the watch can help you find your lost phone, track your workouts and guide you to a location with even more speed and accuracy. It monitors your health and sleep, all with an impressive 18-36 hour battery life. Plus, the "midnight aluminum case" on the 45mm model, complete with matching nylon sports band, makes for a sleek, stylish timepiece that can be worn day after day. Typically, it would run you around $500, but we've partnered with a few of our favorite brands to give one away to one lucky reader.
Giveaway:
Shopping
What We’re Buying
A mounted shelf
We're big fans of vintage mid-century furniture. The high prices of genuine antiques? That we're less thrilled about. So we were excited to discover this wall-mounted shelf from Article. Constructed of solid and veneered walnut wood (much like they did in the '60s), this set has four shelves at various distances to accommodate a range of items and a large cabinet for extra hidden storage (plus, the top adds a fifth shelf into the mix). What's more, it ties into other Newbury items from the brand so you can build it into a modular entertainment center or workspace.
Get It:
Newbury mounted shelf, $799 by Article
Morning Motto
Small, consistent steps.
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