1 big thing: 🌏 As the vibes turn

Bonus chart: Not-so-great expectations

2. Catch up quick

3. Home prices touch new highs

4. U.S. Latino GDP 

5. Health care's "pink tax" 

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Today's Axios Markets was edited by Kate Marino and copy edited by Mickey Meece.

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1 big thing: Biden hits the picket line

Illustration of a pair of aviator sunglasses with picketers reflected in the lenses. 

3. A "manageable headwind"

Private debt fundraising on pace to exceed $200 billion this year

4. Investors still love private debt  

5. Moody's warning

Today's newsletter is 1,034 words, 4 minutes.

1 big thing: Landmark cannabis banking bill scores a win

3. Oil's biggest daily jump since May

Bonus chart: Stockpile stress

4. FTC's Amazon case is no slam dunk

5. 💬 Quoted: "Beclowns" 

Today's newsletter is 1,072 words, 4 minutes.

🎧 1 fun thing from Emily: Now that the writers' strike is done and the late-night shows are coming back, it means one of my new favorite things is winding down. That's "Strike Force Five," a podcast from all of the late-night hosts. They're not a terribly diverse crew — two Jimmys, plus Steve, Seth and John — but their unscripted, messy show is a hilarious and delicious listen. 

Come for the great behind-the-scenes anecdotes — Robert DeNiro is apparently a less-than-ideal guest because he’s not chatty. And stay for the way the hosts joyfully roast each other — all of them ripping apart Jimmy Fallon for writing really confusing questions in Episode 5 had me on the floor.

1 big thing: Bear market is still a bear

3. Crude oil and cash conquered all in Q3

4. IPOs inch back

5. 🌊 The shutdown wave cometh

Today's newsletter is 739 words, 3 minutes. 

1 big thing: Higher rates, lower stocks 

Illustration of a stock trend line being pulled down by a heavy, metal percentage symbol

2. Bad week 

3. Rally looks less bullish

4. Catch up quick 

5. The continuing allure of the 4-day workweek

⚔️ It's Monday. Another battle between bulls and bears awaits. Once more unto the breach! 

Today's newsletter is 799 words, 3 minutes.

Austin

This weekend, Texas will fall off a "child care cliff" when pandemic-era federal relief funding for the industry runs out.

Driving the news: Without intervention, nearly 306,000 Texas children are expected to lose child care — the highest total in the country, according to an analysis by the Century Foundation.

The national think tank estimates nearly 4,000 Texas child care programs could close, which could mean about $775 million in lost earnings from parents forced to cut working hours or exit the workforce as a result.

"There's not going to be mass closures overnight. This is going to be a slow, steady bleed," said Cody Summerville, executive director of the Texas Association for the Education of Young Children (TAEYC).

Why it matters: The federal funding amounted to a $24 billion Band-aid patched over an industry that's long struggled.

"There's going to be a real crisis here," Cathy Creighton, director of Cornell's School of Industrial and Labor Relations Buffalo Co-Lab, who's studying the impact of the additional funding for providers, tells Axios.

Catch up fast: The Texas Workforce Commission distributed nearly $4 billion in federal funds to child care programs over two years, per TAEYC.

Threat level: A TAEYC survey of child care programs last month found 26% of respondents said they're likely to close without more help.

72% of survey respondents said they would have to raise tuition to stay open, and 43% said they would have to cut staff wages or be unable to sustain wage increases.

Yes, but: Even with the federal dollars, the pandemic "really decimated the industry," Summerville said.

Early COVID guidance was difficult to follow, and staffing became a more acute crisis as programs had to compete with higher wages in other industries.

"We're at a place where we just can't anymore," he told Axios.

By the numbers: In March 2020, there were 769 licensed child care centers and family child care homes in Travis County. By September 2023, that number was down to 693.

Statewide, there were more than 18,700 child care programs in March 2020, versus just under 15,000 this month.

Zoom out: As many as 70,000 centers across the country looking after 3.2 million children might close when the funding runs out, according to the Century Foundation.

State of play: This cliff is approaching just as women and mothers are hitting their stride in the U.S. labor market — with workforce participation at new highs and the gender employment gap at record lows.

The rate of new Austin mothers returning to the workforce has bounced back after a COVID-era drop.

Providers are limited in their pricing power because most parents can't pay much for care. To keep costs down, workers make very little — about $12.50 hourly in Texas in 2022 per the Bureau of Labor Statistics — and providers operate on razor-thin margins.

Summerville said about 60-70% of child care program budgets tend to be labor, while most other businesses try to keep labor costs around 30-40%.

What's next: If the dire forecasts prove true, millions of parents — particularly mothers — are going to be left with some hard choices.

Their child care provider could shut down or raise prices past affordable levels — and many parents could exit the job market entirely.

Flashback: The Texas Legislature considered but did not approve a $2.3 billion investment in child care this year.

Summerville said leadership has not prioritized the issue and there's an unwillingness to intervene in what has been a private market.

Plus, the high annual price tag is a "huge pill to swallow" when compared to the under $43 million the state will spend this fiscal year to fulfill match requirements of federal block grants for child care, he said.

"I'm afraid it's going to have to get pretty bad, and it's going to have to have a pretty draining effect on our entire economy in order for elected officials to fully see the value that child care plays within our communities," Summerville said.

Families and business leaders are also going to have to get more involved in the push, he said, as industries will be left with a curtailed workforce.

The big picture: This cliff is new, thanks to the pandemic funding, but the industry in the U.S. has been living on the edge for a long time.

Studies find kids who get high-quality care wind up getting better educations, and better-paying jobs in the long term, but child care is provided by a private market.

Lawmakers at all levels of government need to change their mindset about child care, Summerville said. "We definitely have to treat child care like a public good. We all rely on child care, regardless if we have young children or not."

As Treasury Secretary Janet Yellen put it in 2021: "Child care is a textbook example of a broken market."

Nearly 306,000 Texas children could lose child care as federal funds expire

It's the highest total in the country according to the Century Foundation.

Child care

This weekend, Texas will fall off a &quot;child care cliff&quot; when pandemic-era federal relief funding for the<a class="gtmContentClick" data-vars-link-text=" industry" data-vars-click-url="https://www.axios.com/2023/06/15/child-care-daycare-costs-states-parents" data-vars-content-id="640f4ed6-5161-43c6-ac41-e0aeb5467e9b" data-vars-headline="Nearly 306,000 Texas children could lose child care as federal funds expire" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/06/15/child-care-daycare-costs-states-parents" target="_self"> industry</a> runs out.Driving the news: Without intervention, nearly 306,000 Texas children are expected to lose child care — the highest total in the country, according to an <a class="gtmContentClick" data-vars-link-text="analysis" data-vars-click-url="https://tcf-ccs-map.netlify.app/assets/factsheets/Child%20Care%20State%20Fact%20Sheet%20-%20Texas.pdf" data-vars-content-id="640f4ed6-5161-43c6-ac41-e0aeb5467e9b" data-vars-headline="Nearly 306,000 Texas children could lose child care as federal funds expire" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://tcf-ccs-map.netlify.app/assets/factsheets/Child%20Care%20State%20Fact%20Sheet%20-%20Texas.pdf" target="_blank">analysis</a> by the Century Foundation.

Education

COVID

National

Data: Morning Consult; Chart: Tory Lysik/Axios Visuals

A few measures of consumer sentiment are flashing warning signs that show the American vibe shifting downward again.

Why it matters: The data shows that the recent reversal in gas prices (heading up) and the stock market (heading down) is weighing on our mood. So is the continuing reality of living in a higher-price world.

Driving the news: After rising for much of 2023, consumer sentiment fell in September, according to polling out Wednesday from the Morning Consult/Axios Inequality Index.

Consumer sentiment fell 4.3% in September for higher-income households — earning at least $100,000 a year. It fell 2.8% for middle-income folks and 0.5% for low-income households.

Sentiment is measured by asking consumers how they're feeling about their personal finances and business conditions, now and in the future. Pollsters also ask if now is a good time to make a major household purchase.

"I think this is a cause for concern," said Jesse Wheeler, a senior economist at Morning Consult.

And there are economic headwinds to watch, he points out, including an auto strike that could grow more widespread and the potential government shutdown.

Meanwhile, the Conference Board's measure for consumer confidence fell in September for the second straight month and is now at a four-month low.

The group's expectations index, which measures people's short-term outlook for income, business and job market conditions — declined below 80 in September — a level that has historically signaled a recession within the year.

The big picture: Our national mood took a hit in 2020 and though there have been swings back up, the mood hasn't yet come back to where it was pre-pandemic. 

Inflation is playing a big role here. Though the rate of price increases has certainly come down from the highs we saw last year, prices are still higher overall — and they aren't going back down. 

As Catherine Rampell at the Washington Post recently wrote, "People sometimes ask me when prices are going to 'come back down' to what they were pre-pandemic ... the short answer is: probably never."

And though that's good for the economy — deflation is generally considered a bad thing at the macro level — higher prices are effectively a continual bummer for consumers. 

Zoom out: The consumer sentiment data tracks with political polling that shows voters in a dark mood about the economy.

That's a major issue for President Biden, who's tried to turn the term "Bidenomics" into something positive.

In one poll out this week, 44% of voters said they're worse off financially under Biden — the most for any president since Ronald Reagan in 1986.

Yes, but: Conditions swung in Reagan's favor after that, and Reaganomics ultimately proved to be a winning term. 

Reality check: This is just a few months' data.

Americans' feelings about the economy are getting worse

Rising gas prices and falling stocks are weighing on our mood.

Consumer confidence

Economy & Business

Data: The Conference Board; Chart: Axios Visuals

Consumer confidence fell in September for the second straight month and is now at a four-month low, per a Conference Board survey released Tuesday. 

Why it matters: It's the latest sign that Americans are increasingly unhappy with higher prices — particularly for groceries and gas.

People are also increasingly worried about politics and higher interest rates, the Conference Board's chief economist Dana Peterson said in a press release.

Confidence declined across all age groups, and most notably for those with household incomes above $50,000 a year, she said.

Consumer confidence hits 4-month low

Americans are unhappy with higher prices, as gas and grocery prices rise

Consumer confidence fell in September for the second straight month and is now at a four-month low, per a Conference Board survey released Tuesday. Why it matters: It&#x27;s the latest sign that Americans are increasingly unhappy with <a class="gtmContentClick" data-vars-link-text="higher prices" data-vars-click-url="https://www.axios.com/2023/09/14/inflation-gas-prices-biden" data-vars-content-id="75631d52-7adb-4929-add1-4619484160c2" data-vars-headline="Consumer confidence hits 4-month low" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/09/14/inflation-gas-prices-biden" target="_self">higher prices</a> — particularly for <a class="gtmContentClick" data-vars-link-text="groceries and gas" data-vars-click-url="https://www.axios.com/2023/09/13/inflation-cpi-report-gas-prices-august-2023" data-vars-content-id="75631d52-7adb-4929-add1-4619484160c2" data-vars-headline="Consumer confidence hits 4-month low" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/09/13/inflation-cpi-report-gas-prices-august-2023" target="_self">groceries and gas</a>.

California governor Gavin Newsom signed a law on Thursday that will raise fast food workers' pay in the state to $20 an hour starting in April 2024.

Why it matters: The law's passage is a huge win for labor — the campaign around this law was led by the Service Employees International Union (SEIU) — and signals unions' growing power in the U.S. 

$20 an hour is a big raise for a lot of workers. Fast food workers in the state made an average of $16.60 an hour in 2022. The state's minimum wage is $15.50.

Meanwhile, in another win for workers on Thursday, Uber, DoorDash and Grubhub were blocked in their attempt to keep an $18 minimum wage for NYC delivery workers from moving forward.

Key point: The new law also establishes a fast food council composed of representatives from labor and the industry that has the power to develop rules about working conditions — and is viewed as a step toward European-style sectoral bargaining.

The backstory: This is a new version of a fiercely contested law, AB 257, that Newsom signed last year. The original law would have gradually raised pay to $22 an hour, starting last January.

An opposition campaign, spearheaded by the fast food industry, succeeded in putting the law on hold, and set in motion a statewide referendum to reverse it.

But workers, backed by SEIU, succeeded in getting the industry to the negotiating table to hammer out a compromise. The two sides hadn't taken that kind of step before. (Read more about the strategy in the LA Times.)

Both the fast food industry and labor groups are calling this a win for their side.

Zoom in: The new law covers employees at any fast food chain with more than 60 locations across the country. There is an exception for restaurants that make their own bread, including Panera.

The law allows the council to raise wages by the lesser of 3.5% or the rate of inflation under the Consumer Price Index.

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California raises minimum wage for fast food workers to $20 an hour

Governor Gavin Newsom signed on to a compromise bill hammered out by workers and the fast food industry.

A rally for fast food workers in Los Angeles this summer. Photo: Mel Melcon/Getty Images

Labor

California governor Gavin Newsom signed a law on Thursday that will raise fast food workers&#x27; pay in the state to $20 an hour starting in April 2024.Why it matters: The law&#x27;s passage is a huge win for labor — the campaign around this law was led by the Service Employees International Union (SEIU) — and signals <a class="gtmContentClick" data-vars-link-text="unions&#x27; growing power" data-vars-click-url="https://www.axios.com/2023/09/04/labor-day-unionized-workers-raises-benefits" data-vars-content-id="78e84221-42c3-4a28-b29a-fe8b0510eda2" data-vars-headline="California raises minimum wage for fast food workers to $20 an hour" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/09/04/labor-day-unionized-workers-raises-benefits" target="_self">unions&#x27; growing power</a> in the U.S.

A landmark federal bill that would protect banks that work with cannabis companies appears headed to the Senate floor after passing out of committee on Wednesday.

Why it matters: Since marijuana is legal in some states, but illegal at the federal level, the industry has long struggled to gain access to financial services — instead many business owners are forced to deal with the inconveniences and dangers of transacting in all-cash.

Though its path to passage is anything but assured, the bill's advancement is an incremental win for the cannabis industry and the banks that'd like to handle all the green (sorry) it generates.

The bill could also nudge the door open a little to the federal legalization of cannabis.

State of play: There's fairly broad bipartisan agreement that state-sanctioned cannabis companies should have access to the banking system. 

"The current all-cash model of legal cannabis businesses makes them targets for theft, tax evasion, and for organized crime," said Sen. Steve Daines (R-Mont.), one of the bill's sponsors, at a banking committee hearing Wednesday. "The key to addressing this risk is by ensuring that all legal businesses have access to the banking system."

Senate Banking chair Sherrod Brown (D-Ohio) emphasized the bill would help the industry's workers, who "face challenges proving their income when trying to rent a home or apply for a mortgage."

The intrigue: The issues complicating the bill's passage are a bit outside its narrow scope. 

On the right: Conservatives want to ensure that banks can't turn away other industries that might be deemed controversial — particularly gun companies and energy companies. 

A portion of the bill that appears to give regulators wide discretion to force a bank to drop a customer — if there's "reputation risk" — has been hotly contested.

On the left: There's concern the bill could reinforce racial and class inequities. That's because the legal cannabis business, which the bill helps, is majority-white owned. But many people of color are still arrested for marijuana possession — or have criminal records for past cannabis offenses.  

What they're saying: These conflicting views are going to make it tough to pass the bill in the Senate, said Cowen analyst Jaret Seiberg in a note. 

Still "this is a tremendous symbolic win for the cannabis sector." 

The American Bankers Association issued a statement supporting the legislation.

Zoom in: The Secure and Fair Enforcement Regulation Banking Act, or SAFER, passed out of committee by a 14-9 vote — with three Republicans in support. 

Under the bill, banks can't be penalized for providing services to state-sanctioned marijuana businesses. 

Similar legislation has passed the House seven times before — but never made it out of a Senate committee, notes Banking Dive.

Zoom out: The fight over the bill underscores how critical access to the banking sector is for anyone seeking to do business in the U.S. — a lesson learned by the crypto industry over the last year. 

What's next: Senate Majority Leader Charles Schumer (D-NY) said earlier this month that he'd bring the bill "to the Senate floor with all due speed." 

And on Wednesday he said he'd tie the legislation to other bills that would make it easier for states to expunge cannabis offenses.

Landmark cannabis banking bill scores a win

Though its passage is anything but assured, the advancement is an incremental win for the industry.

Illustration of the United States seal holding a marijuana leaf instead of an olive branch. 

Banking

A landmark federal bill that would protect banks that work with cannabis companies appears headed to the Senate floor after passing out of committee on Wednesday.Why it matters: Since marijuana is legal in some states, but illegal at the federal level, the industry has long struggled to gain access to financial services — instead many business owners are forced to deal with the inconveniences and dangers of transacting in all-cash.

Emily Peck

Stories

California raises minimum wage for fast food workers to $20 an hour

Nearly 306,000 Texas children could lose child care as federal funds expire

Landmark cannabis banking bill scores a win

Americans' feelings about the economy are getting worse

Consumer confidence hits 4-month low

Newsletter editions

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