Current Events in July 2019

The economy added 224,000 jobs in June, as fears of a slowdown in the economy didn’t show up in hiring. The Labor Department reports that the unemployment rate edged up to 3.7 percent due to more people looking for work.

“Over the month, notable job gains occurred in professional and business services, in health care, and in transportation and warehousing,” said William Beach, commissioner of the Bureau of Labor Statistics.

But the retail sector -- often a place where young people get their first jobs -- continued to shrink in June. The retail sector lost 6,000 jobs, the fifth straight month that employment in that sector has declined. 

Economists have pointed to two main reasons that retail jobs are disappearing. They point out that more retail shopping continues to shift to online channels. At the same time, brick and mortar retailers are making greater use of automation.

“Broadly speaking, retail is a sector where automation has been particularly present,” Nathan Sheets, chief economist at PGIM Fixed Income, recently told CNBC. “Self-checkouts are now common. If you’re not sure about a price, you scan the bar code rather than asking a worker.”

Where the jobs are

Jobs were the most plentiful last month in professional and business services companies. That sector grew by 51,000 after also outpacing other industries in May. Employment growth in the first half of the year has averaged 35,000 a month.

Health care was also doing a lot of hiring last month, adding 35,000 jobs. That sector has grown by 403,000 jobs over the last 12 months. Hiring was also strong in transportation and warehousing, growing by 24,000 jobs. With the arrival of summer weather, construction hiring rose by 21,000.

Paychecks also rose in June but at a slower pace than in previous economic recoveries. Average hourly earnings are up 3.1 percent in the last 12 months.

Impact on the Fed

The jobs numbers are closely watched by the Federal Reserve as it gauges the health of the economy. In the sometimes bizarro world of Wall Street, stocks fell on the news because the June number was stronger than expected.

Gad Levanon, chief economist, North America, at The Conference Board, says the prevailing wisdom before Friday was that the economy was slowing down. He says that’s much less certain now. 

“We expect the U.S. economy to continue to grow slightly above its long-term two percent trend through at least the end of the year, generating enough job growth to continue tightening the labor market,” Levanon said. “In such a scenario, the need to cut the Federal Funds rate would lessen.

Before the release of the employment report, the market appeared to have assumed the Fed would cut interest rates when it meets later this month. Analysts say that’s less certain now.

Pet Supplies Plus is recalling bulk pig ear treats following the announcement that the Food and Drug Administration (FDA) and the Centers for Disease Control and Prevention (CDC) are investigating contaminated pig ear treats connected to Salmonella.

While 45 individuals in 13 states have been diagnosed with Salmonella-related illness, none are confirmed to be a result of purchasing pig ears from Pet Supplies Plus.

The recalled products, which are stocked in open bins, were distributed to Pet Supplies Plus stores in Alabama, Arkansas, California. Colorado, Connecticut, Delaware, Florida, Georgia, Iowa, Illinois, Indiana, Kansas, Kentucky, Massachusetts, Maryland, Michigan, Minnesota, Missouri, North Carolina, Nebraska, New Hampshire, New Jersey, New York, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Virginia, Wisconsin and West Virginia.

What to do

Customers who purchased the recalled products should discontinue using and discard them.

Consumers with questions may call (734) 793- 6564 Monday though Friday 9 a.m. - 4 p.m. (EST) excluding holidays.

Audi is recalling 66 model year 2019 A8s equipped with rear relaxation seats.

The front passenger seat track rivet may fail and cause the spindle bracket to separate, increasing the risk of injury during a crash.

What to do

Audi will notify owners, and dealers will replace the passenger seat tracks free of charge.

The recall is expected to begin August 2, 2019.

Owners may contact Volkswagen customer service at 1-800-253-2834. Audi's number for this recall is 72J3.

Facebook’s proposed cryptocurrency, project Libra, is facing opposition from House Democrats who say Congress and other regulators need more time to assess the potential risks it could pose to global financial markets before Facebook moves forward with its plans.  

In a letter to Facebook executives, the House Financial Services Committee ordered the social media giant to "immediately cease implementation plans" for its so-called “stablecoin,” as well as its digital wallet Calibra. 

"We write to request that Facebook and its partners immediately agree to a moratorium on any movement forward on Libra -- its proposed cryptocurrency and Calibra -- its proposed digital wallet," the committee, led by Maxine Waters (D-Calif.) wrote in the letter. "It appears that these products may lend themselves to an entirely new global financial system that is based out of Switzerland and intends to rival US monetary currency and the dollar.” 

“This raises serious privacy, trading, national security and monetary policy concerns for not only Facebook's over 2 billion users, but also for investors, consumers and the global economy,” Waters added.

Skepticism among lawmakers

Last month, Waters hinted that a letter of this nature was coming when she issued a statement expressing concern about the possible cybersecurity and national security risks of Facebook’s cryptocurrency if it’s ultimately cleared to enter the cryptocurrency market, which she noted “currently lacks a clear regulatory framework.” 

In Tuesday’s letter, Waters again stressed that Facebook’s massive reach paired with the lack of oversight in the cryptocurrency market could lead to serious problems down the line. 

“If products and services like these are left improperly regulated and without sufficient oversight, they could pose systemic risks that endanger U.S. and global financial stability,” Waters wrote. “These vulnerabilities could be exploited and obscured by bad actors, as other cryptocurrencies, exchanges, and wallets have been in the past.”

“Because Facebook is already in the hands of over a quarter of the world’s population, it is imperative that Facebook and its partners immediately cease implementation plans until regulators and Congress have an opportunity to examine these risks and take action,” the letter says.

In June, a spokesperson for Facebook told CNBC that it looks forward to responding to concerns raised by policymakers. The company has said that Libra would be most used outside of the U.S. and Europe in developing nations where local currencies tend to be unstable. 

Despite having one less day to celebrate the Fourth of July, Americans will be hitting the nation’s highways and byways in record numbers.

The American Automobile Association (AAA) expects 41.4 million motorists will be traveling between Wednesday, July 3 to Sunday, July 7 -- the most ever -- plus another 3.55 million on trains, boats, and planes.

With unemployment low, spending growth up (meaning more money spent on cookouts and picnics), and gas prices down over last year, the nation’s economic climate makes motoring a good deal this summer. 

“Gas prices are, on average, 17 cents cheaper than Memorial Day weekend, which is welcome news for motorists hitting the road to celebrate the July Fourth holiday,” said AAA gas price expert Jeanette Casselano. “More so, summer gas prices are poised to continue dropping even lower in coming weeks.”

Expect standstills and a snail’s pace

Of course, with 40 million folks getting out of town or traveling through a large city, that means traffic snarls and delays.

AAA’s research gurus took a dive into what the best days to travel ad how long of a delay motorists can expect over the Fourth of July weekend. Here’s what they found:

What about flights and hotels?

While motorists get a nice kiss from lower gas prices, consumers shouldn’t expect the same across the board.

According to AAA’s Leisure Travel Index, airfares are running about 10 percent higher than a year ago. For car rentals, the average rate is 5 percent higher (an average of $69/day). As for accomodations, Trivago’s hotel price index shows that hotel prices vary by location. 

For example, overnight rates in Miami, Las Vegas, and New York City are trending down (month-to-month through June 2019), while the cost of spending the night in Chicago and San Francisco is up.

One last thing...

Holiday travel almost always leverages traffic accidents and fatalities -- many the result of drinking and driving at the hands of those who think they can manage operate a vehicle under the influence.

According to Niznik Behavioral Health’s (FARS) research team, the five-year highway safety trend shows that drivers are throwing caution to the wind a little too much during their Fourth of July jaunts. 

The group’s findings show that:

• Summer holidays are the deadliest for drivers, with the Fourth of July having the largest percent of monthly fatalities (15 percent);

• July 4th averages 472.2 fatalities with 189.8 involving alcohol -- nearly twice the deaths of New Year’s Eve and New Year’s Day; and

• Almost 36 percent of holiday-related fatal crashes involving alcohol occurred on July 4th.

Mind you, Niznik’s numbers are for the entire U.S. But there are states where extra caution should be applied. Missouri, South Carolina, and Wyoming are considered to be the “most dangerous” on Niznik’s “holiday drinking and driving deadliness” list. And the “least dangerous” states? New Hampshire, New York, and Delaware.

Tesla set a new global delivery record in the second quarter when it delivered 95,200 of its electric vehicles. The automaker also topped its previous production record, producing 87,048 cars in the second quarter compared to 77,100 in the previous quarter.

In its second-quarter results announcement, Tesla added that it also made “significant progress streamlining our global logistics and delivery operations at higher volumes, enabling cost efficiencies and improvements to our working capital position.” 

Tesla’s delivery performance in the second quarter surpassed analyst expectations. According to data compiled by FactSet, analysts expected Tesla to deliver around 91,000 vehicles. 

“The numbers were above even the bull estimates and shows a clear rebound for the company,” Wedbush analyst Dan Ives told CNBC. “This is a feather in the cap for Tesla.”

Tesla expects continued success

Tesla’s 2018 delivery and production figures suffered due to several hangups, including problems transporting cars from its factory in Fremont, California to customers around the world. In September, CEO Elon Musk described the issues Tesla was having as “delivery logistics hell.”

Wedbush noted that challenges remain, but Tesla appears to have made a step in the right direction. 

The automaker said its heightened delivery figures will continue in the third quarter due to the fact that more than 7,400 vehicles were still in transit during the second quarter but hadn’t been delivered. 

“Orders generated during the quarter exceeded our deliveries, thus we are entering Q3 with an increase in our order backlog. We believe we are well positioned to continue growing total production and deliveries in Q3,” the company said. 

New York Attorney General Letitia James has reached a settlement with makers of an online dating app serving the LGBTQ community after it experienced a security breach.

James says Online Buddies, which operates the dating app Jack’D, failed to protect private photos -- including nude images -- of approximately 1,900 users. She said the company will pay a $240,000 fine.

The complaint said Online Buddies told its users that it had implemented security measures to protect user data. In particular, users were reportedly told that certain images would be marked as “private” and would not be accessible by others.

James says the app’s interface both explicitly and implicitly represents that the private pictures feature can be used to exchange nude photos securely and privately. When using the app, she says members see two screens when uploading photos of themselves: one for photos designated as “public” and another for photos designated for “private” viewership.

‘Risk of exposure’

Despite the company’s best intentions, James says the network was vulnerable to hackers. A researcher recently reported that it was possible for anyone to see or download pictures marked “private.” The attorney general says people in the company were aware of the flaws in the system for more than a year but failed to take action to fix the problems.

“This app put users’ sensitive information and private photos at risk of exposure and the company didn’t do anything about it for a full year just so that they could continue to make a profit,” James said. “This was an invasion of privacy for thousands of New Yorkers.”

Jack’D has users around the world. James says her office has determined that about 7,000 of them live in New York.

This isn’t the first time that a dating app has suffered a security breach. In 2015, Ashley Madison, a dating site for married people who want to have affairs, suffered an embarrassing breach when a hacker published the names of the people cheating on their spouse -- or hoping to.

The Toronto-based company, which at the time had the marketing slogan “life is short, have an affair,” agreed to a settlement with the U.S. Federal Trade Commission and 13 states a year later. The agreement also required the company to establish a comprehensive data security program.

The lesson for consumers is pretty clear. It’s never a good idea to give a dating app or social media site any information, including provocative photographs, that you aren’t willing to share with the world.

This Independence Day, consumers in the U.S. will spend 6.7 billion (or $73 per person) on food for cookouts, picnics, and other celebrations, according to a report by the National Retail Federation (NRF).

Independence Day spending has dipped slightly the past two years, with this year’s figure down from $6.94 billion last year. But a majority of Americans still say they plan to celebrate July 4 in some way this year, despite the fact that it falls on a Thursday.

Consumers in the South are most likely to celebrate, at 88 percent. Eighty-seven percent of people in the Midwest plan to celebrate, followed by 85 percent in the Northeast and 83 percent in the West. 

Roughly 60 percent of those who plan to celebrate Independence Day say they will be attending or hosting a cookout, barbeque, or picnic. Around 40 percent will take in a fireworks display or participate in a community celebration, according to the NRF’s recent poll of 7,553 adults. 

About a quarter of consumers surveyed (26 percent) said they planned to purchase additional  patriotic-themed items. Forty percent said they wouldn’t and 34 percent were unsure of their plans. 

Other sources of 4th of July spending will include fireworks, patriotic decorations and apparel, and travel. However, just 14 percent of those polled said they plan to travel during the holiday. 

The Justice Department (DOJ), which had been highly skeptical of the proposed T-Mobile-Sprint merger, may be getting closer to approving the deal. But if the merger is to get the green light, DOJ says more concessions may be in order.

Specifically, German telecom company Deutsche Telekom, which would control the two merged wireless providers, would have to make concessions, according to a report by CNBC. The Justice Department has reportedly softened its stance on the merger when it was suggested that Dish Network could emerge as a fourth wireless company.

The German company and the Department of Justice are reportedly close to an agreement to give up air space to Dish for a wireless service. If all the details are worked out, sources say a deal could be announced as early as next week.

Dish Network’s role is key

Justice Department sources say the government’s reservations about the T-Mobile merger with Sprint could be addressed by Dish Network emerging as a fourth wireless provider. According to CNBC, the government is taking steps to ensure Dish can emerge as an effective player in the wireless industry.

The government is pressing Deutsche Telekom to be generous with Dish, giving it unlimited access to its network. So far, sources say the two merger partners have resisted those efforts.

Sources have told CNBC that Dish would have limited access to a combined T-Mobile/Sprint network, allowing it access for no more than seven years. After a grace period, Dish would be required to operate on its own network.

Complicating factor

The evolution of 5G service could be a complicating factor. Dish, a cable TV provider, doesn’t have a 5G network but said it plans to build one soon.

But at this point, a deal appears to be more likely than it did a month ago. CNBC reports Dish and T-Mobile have come to a rough agreement on terms, including a revenue-sharing agreement.

Dish may also purchase additional spectrum and prepaid wireless carrier Boost Mobile from the combined Sprint/T-Mobile.

In April, Sprint and T-Mobile announced a July 29 deadline for completing their merger. To meet that date, they have to gain Justice Department approval. The Federal Communications Commission has already signed off on the deal.

Consumers taking an Independence Day holiday road trip will find gas prices that are higher than a week ago, but they’re lower than last Fourth of July.

The AAA Fuel Gauge Survey shows the national average price of regular gas is $2.74 a gallon, six cents higher than last week. Motorists were paying an average of $2.86 a gallon exactly a year ago.

The average price of premium is $3.31 a gallon, up six cents in the last seven days. Diesel fuel, on the other hand, has barely risen; it’s just a penny higher in the last week, at $3 a gallon. AAA reports that about 25 states have seen gas prices go up by at least 5 cents a gallon over the last week.

“For the more than 41 million motorists hitting the road this week to celebrate the Independence Day holiday, they will find gas prices cheaper than Memorial Day weekend, but more expensive than they’ve been paying the last few weeks,” said Jeanette Casselano, AAA’s spokesperson. “It’s typical to see increases at the pump ahead of the holiday, but we may see prices continue to jump throughout the month due to refinery interruptions on the East Coast, increasing demand and fluctuations in crude oil price.”

In fact, the loss of a key refinery in Pennsylvania last month because of an explosion and fire is being felt across wide areas of the eastern U.S., which normally has some of the lowest gas prices in the nation. 

Mississippi still has the lowest average gas price in the nation but the price at the pump there has risen seven cents a gallon in the last seven days.

The states with the most expensive regular gas

These states currently have the highest prices for regular gas, according to the AAA Fuel Gauge Survey:

• California ($3.77)

• Hawaii ($3.64)

• Washington ($3.35)

• Nevada ($3.30)

• Alaska ($3.26)

• Oregon ($3.22)

• Illinois ($3.04)

• Idaho ($2.99)

• Utah ($2.96)

• Pennsylvania ($2.91)

The states with the cheapest regular gas

The survey found these states currently have the lowest prices for regular gas:

• Mississippi ($2.34)

• Alabama ($2.36)

• Louisiana ($2.37)

• Arkansas ($2.37)

• South Carolina ($2.39)

• Oklahoma ($2.43)

• Tennessee ($2.45)

• Missouri ($2.45)

• Texas ($2.46)

• Virginia ($2.46)

Volkswagen Group of America is recalling 126,175 model year 2018-2019 Audi Q5s and SQ5s.

The wheel arch cover trim may loosen and detach and become a road hazard, increasing the risk of crash.

What to do

Volkswagen will notify owners, and dealers will secure the wheel arch trim with an additional screw and nut free of charge.

The recall is expected to begin August 2, 2019.

Owners may contact Volkswagen customer at 1-800-253-2834. Volkswagen's number for this recall is 66K6

Facebook has announced new actions intended to prevent “exaggerated or sensational” health claims from circulating on its site. 

In a blog post on Tuesday, the social media giant revealed that it recently made several ranking changes to the News Feed in an effort to deprioritize exaggerated health-related claims or posts trying to sell products and services based on health claims. 

“We know that people don’t like posts that are sensational or spammy, and misleading health content is particularly bad for our community,” wrote Travis Yeh, Facebook’s product manager. 

“So, last month we made two ranking updates to reduce (1) posts with exaggerated or sensational health claims and (2) posts attempting to sell products or services based on health-related claims.” 

Algorithm changes

To address the former, Facebook says it will now “consider if a post about health exaggerates or misleads — for example, making a sensational claim about a miracle cure.” To crack down on the latter, the platform will “consider if a post promotes a product or service based on a health-related claim — for example, promoting a medication or pill claiming to help you lose weight.” 

The changes were announced in the wake of a Wall Street Journal investigation which found that misleading and potentially harmful claims about alternative medical treatments run rampant on both Facebook and YouTube. Posts and videos about bogus alternative cancer treatments sometimes amass millions of views, the report noted. 

Facebook’s strategy for curbing sensational health claims is similar to the one it now employs to minimize the spread of clickbait. The company said it’s using the same approach of looking for phrases commonly used in dubious health-related posts to predict which posts are likely misinforming users. Posts like these will now be demoted in users’ News Feeds. 

Facebook noted that entire pages won’t be significantly impacted by the update, but pages that continue to post regularly about sensational health claims will see their distribution reduced. 

For several hours on Tuesday morning, AT&T wireless customers in a handful of states were unable to call 911 from their cell phones, according to a report from The Verge. The issue was reported by officials in Texas, Minnesota, Wisconsin, Washington, Florida, and several other states.

In a statement, AT&T confirmed the service outage and said the issue had been resolved as of approximately 8:00 AM.

"Earlier this morning some wireless customers may have been unable to connect to 911," the company said. "This has been resolved and we apologize to anyone who was affected."

While the outage was still active, several local law enforcement officials and fire departments used social media as a way of informing AT&T customers of alternate ways of contacting emergency services. 

“Our 911 Comm Center received notice that AT&T is experiencing outages with their mobility wireless 911 that may affect calling in,” tweeted a sheriff’s office in Winnebago County, Wisconsin. “Please have our non emergency number handy if you need us.  920-236-7300” 

A fire department in Arlington, Texas recommended calling from a landline, since the outage didn’t impact AT&T’s landline services. 

“AT&T is experiencing nationwide 911 service outage which is effecting the ability to call 911 on a cellphone,” the Arlington Fire Department tweeted. “Until the issue is resolved, AT&T customers can access Arlington 911 by either calling 817-274-4444 or utilizing a landline.” 

Due to the surfacing of a new safety concern, Boeing 737 MAX jets will likely be forced to remain grounded beyond the expected return-to-service date of October 1.

Federal Aviation Administration (FAA) officials recently found another potential problem in the 737 MAX’s computer system. During simulator sessions, the flaw raised alarm for its potential to cause the aircraft to dive in instances where it should be climbing. 

“I’m sure this will cause us to have to take the MAX out of the schedule beyond Oct. 1,” Southwest CEO Gary Kelly told employees on Monday, according to Reuters. Kelly added that the company would also see “what other modifications we might need to make our plans for this year because it’s obviously extending well beyond what I had hoped.”

Avoiding canceled flights

Upon being informed of the new safety issue, Southwest and United Airlines immediately announced extended cancellations for flights using the MAX. Southwest said this week that cancellations will now extend from September 2 through October 1.

“By proactively removing the MAX from scheduled service, we can reduce last-minute flight cancellations and unexpected disruptions to our customers' travel plans,” the airline said. “The limited number of customers who have already booked their travel and will be affected by our amended schedule are being notified of their re-accommodated travel according to our flexible accommodation procedures.” 

United and American Airlines have also canceled affected flights until early September. 

Boeing 737 MAX aircraft have been grounded worldwide since mid-March following two fatal crashes within five months.