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Bloomberg Businessweek: Ford and Flowers

Bloomberg Businessweek: Ford and Flowers

Bloomberg06-02-2025
Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF. Rebecca Lindland, Managing Director at Allison Worldwide, shares her thoughts on Ford and electric vehicles. Paula Davis, Founder and CEO of the Stress & Resilience Institute, discusses her book Lead Well: 5 Mindsets to Engage, Retain, and Inspire Your Team. Christina Stembel, Founder of Farmgirl Flowers, talks about her bootstrapped floral business ahead of Valentine's Day. Hosts: Carol Massar and Tim Stenovec. Producer: Paul Brennan.
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There's a ‘scary' recession warning hidden in the too-good-to-be-true economic data, Wells Fargo warns
There's a ‘scary' recession warning hidden in the too-good-to-be-true economic data, Wells Fargo warns

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There's a ‘scary' recession warning hidden in the too-good-to-be-true economic data, Wells Fargo warns

A closer look at recent economic data reveals a decline in discretionary spending on services, according to a recent note from Wells Fargo, which said the metric historically has fallen during or immediately after recessions. That belies the overall narrative on Wall Street that tariffs have not impacted the economy as much as feared. Recent economic data have eased fears that President Donald Trump's tariffs aren't yet causing a downturn or spike in inflation, but Wells Fargo is more skeptical. In a note on Tuesday, economists Tim Quinlan and Shannon Grein dismissed the 'false narrative' that tariffs were having a benign impact, pointing out that consumer spending data has actually been revised much lower from more upbeat earlier readings. 'It never quite rang true that consumer spending was completely unfazed by the sudden implementation of tariffs,' they wrote. 'This mirage was sustained by initial estimates of GDP growth that pegged the pace of inflation-adjusted Q1 consumer spending at 1.8% (annualized); that's three-times faster than what it turned out to be in the third estimate—just 0.5%.' In fact, data on services spending was even more skewed to the upside, as revisions put growth at just 0.6%, down from an initial print of 2.4%. Those trends continued into the second quarter and constitute a clear warning sign largely being overlooked, namely that households are indeed reducing their discretionary spending, according to the note. While discretionary spending on goods has held up, spending on services is down 0.3% through May on a year-over-year basis. 'That is admittedly a modest decline, but what makes it scary is that in 60+ years, this measure has only declined either during or immediately after recessions,' Quinlan and Grein warned. They pointed out that spending on food services and recreational services, which includes things like gym memberships and streaming subscriptions, were barely higher. Meanwhile, transportation spending was down 1.1%, led by declines in auto maintenance, taxis and ride-sharing, and air travel, which had the steepest drop at 4.7%. 'The fact that households are putting off auto repair, not taking an Uber and cutting back or eliminating air travel points to stretched household budgets,' Wells Fargo said. Even increases in spending on goods seem weaker than they appear, as categories like cars and appliances saw big surges that haven't been sustained. That's because consumers rushed to buy items before Trump's tariffs hiked prices, pulling forward purchases to earlier in the year. In addition, the muted inflation data appears misleading too, the economists wrote. Many businesses stockpiled extra inventory ahead of tariffs and have been able to draw on those supplies, allowing them to avoid passing on tariffs costs to consumers for now. Trump's on-again, off-again approach to tariffs may also be delaying those pass-throughs and even encouraging some businesses to eat the costs, especially if tariffs are seen as a temporary negotiation tactic, they added. 'Another too-good-to-be-true development with respect to tariffs is how broad measures of inflation have yet to register a worrying inflationary shock,' Quinlan and Grein said. Others on Wall Street are less downbeat but still see tariffs weighing on the economy. Capital Economics sees tariffs causing a slowdown but not a recession, forecasting GDP growth of 1.6% this year and 1.5% next year. JPMorgan expects growth of 1% in the third quarter, about steady with gains in the first half of the year, which saw a contraction in Q1 and a rebound in Q2. Wells Fargo's more contrarian view comes amid a sharp debate over the economic outlook and whether the Federal Reserve should resume rate cuts sooner rather than later. Fed Governor Christopher Waller has pointed to weak job readings in arguing for a rate cut this month. But other policymakers prefer to wait, saying the economy has been resilient while tariffs have yet to full show up in the inflation data. The retail sales report released on Friday showed a bigger-than-expected jump last month with broad gains. But that dataset mostly covers spending on goods. Meanwhile, the latest consumer price index came in below expectations again, but still showed signs that tariffs were putting upward pressure on inflation as well as indications that weak demand may be limiting the ability of businesses to hike prices even higher. 'Consumer spending is simply not as sturdy as we previously thought it was or even as it was first reported to be,' Wells Fargo said. 'We've long held the view that a stable labor market can offset tariff-induced inflation, and that may still be true and would prevent more of a recessionary impulse from ensuing. But consumers have shifted their behavior in the wake of tariffs.' This story was originally featured on Sign in to access your portfolio

There's a ‘scary' recession warning hidden in the too-good-to-be-true economic data, Wells Fargo warns
There's a ‘scary' recession warning hidden in the too-good-to-be-true economic data, Wells Fargo warns

Yahoo

time7 hours ago

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There's a ‘scary' recession warning hidden in the too-good-to-be-true economic data, Wells Fargo warns

A closer look at recent economic data reveals a decline in discretionary spending on services, according to a recent note from Wells Fargo, which said the metric historically has fallen during or immediately after recessions. That belies the overall narrative on Wall Street that tariffs have not impacted the economy as much as feared. Recent economic data have eased fears that President Donald Trump's tariffs aren't yet causing a downturn or spike in inflation, but Wells Fargo is more skeptical. In a note on Tuesday, economists Tim Quinlan and Shannon Grein dismissed the 'false narrative' that tariffs were having a benign impact, pointing out that consumer spending data has actually been revised much lower from more upbeat earlier readings. 'It never quite rang true that consumer spending was completely unfazed by the sudden implementation of tariffs,' they wrote. 'This mirage was sustained by initial estimates of GDP growth that pegged the pace of inflation-adjusted Q1 consumer spending at 1.8% (annualized); that's three-times faster than what it turned out to be in the third estimate—just 0.5%.' In fact, data on services spending was even more skewed to the upside, as revisions put growth at just 0.6%, down from an initial print of 2.4%. Those trends continued into the second quarter and constitute a clear warning sign largely being overlooked, namely that households are indeed reducing their discretionary spending, according to the note. While discretionary spending on goods has held up, spending on services is down 0.3% through May on a year-over-year basis. 'That is admittedly a modest decline, but what makes it scary is that in 60+ years, this measure has only declined either during or immediately after recessions,' Quinlan and Grein warned. They pointed out that spending on food services and recreational services, which includes things like gym memberships and streaming subscriptions, were barely higher. Meanwhile, transportation spending was down 1.1%, led by declines in auto maintenance, taxis and ride-sharing, and air travel, which had the steepest drop at 4.7%. 'The fact that households are putting off auto repair, not taking an Uber and cutting back or eliminating air travel points to stretched household budgets,' Wells Fargo said. Even increases in spending on goods seem weaker than they appear, as categories like cars and appliances saw big surges that haven't been sustained. That's because consumers rushed to buy items before Trump's tariffs hiked prices, pulling forward purchases to earlier in the year. In addition, the muted inflation data appears misleading too, the economists wrote. Many businesses stockpiled extra inventory ahead of tariffs and have been able to draw on those supplies, allowing them to avoid passing on tariffs costs to consumers for now. Trump's on-again, off-again approach to tariffs may also be delaying those pass-throughs and even encouraging some businesses to eat the costs, especially if tariffs are seen as a temporary negotiation tactic, they added. 'Another too-good-to-be-true development with respect to tariffs is how broad measures of inflation have yet to register a worrying inflationary shock,' Quinlan and Grein said. Others on Wall Street are less downbeat but still see tariffs weighing on the economy. Capital Economics sees tariffs causing a slowdown but not a recession, forecasting GDP growth of 1.6% this year and 1.5% next year. JPMorgan expects growth of 1% in the third quarter, about steady with gains in the first half of the year, which saw a contraction in Q1 and a rebound in Q2. Wells Fargo's more contrarian view comes amid a sharp debate over the economic outlook and whether the Federal Reserve should resume rate cuts sooner rather than later. Fed Governor Christopher Waller has pointed to weak job readings in arguing for a rate cut this month. But other policymakers prefer to wait, saying the economy has been resilient while tariffs have yet to full show up in the inflation data. The retail sales report released on Friday showed a bigger-than-expected jump last month with broad gains. But that dataset mostly covers spending on goods. Meanwhile, the latest consumer price index came in below expectations again, but still showed signs that tariffs were putting upward pressure on inflation as well as indications that weak demand may be limiting the ability of businesses to hike prices even higher. 'Consumer spending is simply not as sturdy as we previously thought it was or even as it was first reported to be,' Wells Fargo said. 'We've long held the view that a stable labor market can offset tariff-induced inflation, and that may still be true and would prevent more of a recessionary impulse from ensuing. But consumers have shifted their behavior in the wake of tariffs.' This story was originally featured on Sign in to access your portfolio

The week in EV tech: Hands-free highways and hands-on nostalgia
The week in EV tech: Hands-free highways and hands-on nostalgia

Digital Trends

time9 hours ago

  • Digital Trends

The week in EV tech: Hands-free highways and hands-on nostalgia

Welcome to Digital Trends' weekly recap of the revolutionary technology powering, connecting, and now driving next-gen electric vehicles. We've all heard it by now: The robotaxis are coming. But while tech giants and startups alike rush to erase the steering wheel, this week we'll take a look at a quietly emerging countertrend: A few automakers believe some drivers just want their stick shift back. Recommended Videos But first, here's confirmation that the automated-driving trend is now in full-fledge: Lucid—the maker of the jaw-dropping 749-mile-range Air sedan—just flipped the switch on its biggest software update yet. Starting July 30, Lucid will roll out hands-free drive assist and lane-change automation to its DreamDrive Pro-equipped vehicles. That's the Air for now, with the Gravity SUV to follow later this year. The move puts Lucid right alongside Ford (BlueCruise), GM (Super Cruise), Mercedes (Drive Pilot), and Tesla (FSD) in the increasingly crowded highway-autonomy space. And yet, in a world where your car can now change lanes for you, Ford and others are working on a digital manual shifter for EVs. Really. So which way is driving going? Fully hands-off—or back to the tactile, analog past? Let's take a look at both roads. Lucid's self-driving moonshot, Uber's big buy-In While Tesla and Waymo continue to dominate the robotaxi conversation, Lucid's entrance into the fray isn't just about a software update. The EV maker also announced a $300 million joint venture with Uber and Nuro, aiming to deploy 20,000 Lucid Gravity SUVs with Level 4 autonomy by late 2026. The Lucid-Nuro-Uber team plans to launch in a major U.S. city (they haven't said which yet), joining the ranks of Waymo, which already operates fully autonomous rides in Phoenix, LA, and San Francisco, as well as Amazon's Zoox, and Cruise, which is attempting to recover after a high-profile accident and DMV suspension last year. Lucid's entry confirms the ongoing trend: Many automakers seem to believe driving might soon become something we watch, not something we do. Hyundai says goodbye to manuals—Ford says 'not so fast' Earlier in July, Hyundai officially ended production of its last manual-transmission cars, citing low demand and the need to streamline for electrification. The move wasn't shocking—manuals now account for just 1–2% of U.S. new car sales, with automatics and EVs dominating at 96–98%. And Hyundai is hardly alone; the clutch pedal has been slowly disappearing from U.S. roads for over a decade. So will the stick shift disappear forever? It appears some automakers are hedging their bets. Earlier this year, it was revealed that Ford is developing a digital, haptic-feedback 'H-pattern' shifter—a fake manual gearbox for EVs. The idea? Let drivers pretend they're shifting gears even though they aren't. It's part nostalgia, part engagement play, and part branding experiment. BMW, Toyota, and yes, even Hyundai, are all exploring similar 'manual EV experiences.' It's a peculiar about-face: Hyundai publicly says no one wants to shift gears anymore, while secretly prototyping fake ones. Why? Because while most people don't need a manual, some still want the feel of one. The emotional science of driving The Continental Mobility Study (2024) found that a majority of American drivers still see themselves as 'traditional.' They welcome driver-assist systems—lane centering, adaptive cruise, automatic parking—but remain uneasy about surrendering full control. That discomfort fuels both sides of this tech tug-of-war. One side wants to automate every inch of the driving experience. The other is doubling down on connection, feel, and driver engagement—even if that feeling is simulated. Across the Atlantic, the divide looks different. Europe remains the stronghold for manual fans, with 50–70% of new car sales in the EU and UK still coming with clutch pedals. Italy leads with ~72% manual adoption, while Germany holds at around 61%. In the UK, the landscape is shifting fast: about 50% of buyers still say they'd pick a manual—but automatic-only driving tests are becoming increasingly common. In 2024, 21% of learners opted out of learning a stick, up from just 9% five years ago. The trends do signal a push towards automatic, and eventually fully automated driving, but a not-so-silent minority is clinging to the last vestiges of hands-on driving. Rivian finds the middle lane If Lucid is racing toward autonomy and Ford is reaching into the past, Rivian might be carving out the smartest lane of all: the middle one. The adventure-focused EV company just announced a slick new navigation software update, in partnership with Google Maps and Google Cloud. The upgrade brings dynamic trip planning, off-road routing, charger location intel, and real-time traffic—all integrated into Rivian's in-car OS. Digital Trends called it a 'juicy mapping update to rival Tesla,' and it's easy to see why. But beneath the software is a deeper philosophy: Rivian isn't trying to replace drivers. It's trying to support them. Rather than removing the driver altogether or pretending they're still shifting gears, Rivian's focus is on automating the boring parts—like parking, range management, and navigating backwoods trails—while preserving the joy of real, physical driving when it matters. CEO RJ Scaringe has said beforethat driving isn't just about getting from A to B—it's about how you get there. That means giving drivers tools, not distractions. Assist, not replace. Choose your future: drive it or let it drive you As the EV race heats up, the real competition might not be about batteries or even software—it might be about philosophy. Do we want our cars to drive us? Or do we want to keep driving, with a little help? Lucid, Tesla, and Waymo are betting on full autonomy. Ford, BMW and Toyota are betting that we miss the feel of the road. Rivian is betting that we're somewhere in between.

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