National

After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

Economy & Business

Axios on HBO: Flexport founder and CEO Ryan Petersen on the American supply chain crisis

America's supply chain crisis isn't getting much better, despite getting lots of attention and federal funding, Flexport CEO Ryan Petersen tells "Axios on HBO."

Behind the scenes: Petersen and Axios' Dan Primack took a boat ride through the Ports of Los Angeles and Long Beach, and saw idle terminal cranes, packed container yards and dozens of cargo ships anchored offshore.

Flexport CEO warns supply chain crisis isn't getting better

The infrastructure bill won't be in time to ease America's current supply chain pain.

Axios on HBO

Nebraska's unemployment rate fell to 1.9% last month — the lowest for any state since data collection began in 1976, AP reports. 

The big picture: The number is in sharp contrast with the national, seasonally adjusted rate of 4.6% in October. Nebraska had maintained the lowest unemployment rate among the states throughout the pandemic.

The rate represents the first time any state's jobless numbers have fallen below 2%, per AP. The unemployment rate in the state capital of Lincoln was even lower at 1.3%. 

Yes, but: Nebraska has had a labor shortage since even before the pandemic, per AP. It has driven up wages and made it difficult for employers to hire and expand.

Rural states typically have lower unemployment rates for many reasons, namely because they offer more jobs with ties to agriculture and food production, AP notes. 

What's happening: Eric Thompson, an economics professor at the University of Nebraska-Lincoln, told The Wall Street Journal the state's strong high-school graduation rate helps.

"More educated workers ... are just less likely to be laid off and more likely to find work quickly," he said.

Nebraska records lowest unemployment rate in U.S. history

The number is in sharp contrast with the national, seasonally adjusted rate of 4.6%.

A ''Now Hiring" sign hangs above the entrance to a McDonald's restaurant on Novembe

Nebraska

Jobs

Axios Finish Line

The huge, decked-out corner office for executives was already dying. The pandemic may have delivered a final blow.

The big picture: As hybrid and remote work become more common, the office is transforming from a place for focused work to a destination for collaboration. Meeting rooms and open plan café-like seating areas are replacing offices — and where you sit and work no longer denotes your place in the hierarchy.

By the numbers: Some 60% of firms are re-designing their offices for the post-pandemic era, according to a new report from the commercial real estate firm CBRE, which surveyed large companies around the world. Of those companies, a quarter are eliminating private offices entirely.

The firms that are holding onto private offices are downsizing them. Around 80% are limiting them to 149 square feet or smaller.

"People are choosing to do their heads-down work at home," says CBRE's Susan Wasmund, the lead author of the report. "They want to come back to collaborate, and they want to come back for team events."

As the office is revamped for teamwork, companies are giving the square footage they're taking away from private offices to meeting rooms of all shapes and sizes.

And they're adding amenities to make workers' time in the office worthwhile. CBRE looked specifically at firms' headquarters and found that 58% are building auditoriums, 31% have outdoor spaces, and 69% have onsite baristas or coffee shops.

Yes, but: "Private office space will never totally go away," says Wasmund.

Traditional companies like investment banks and law firms will likely be the last holdouts, retaining some aspects of formal office hierarchy and trappings for C-suite executives.

Many workers will experience pandemic nervousness for a few years and seek out personal space, says Peter Cappelli, a professor and director of Wharton's Center for Human Resources.

And video meetings will continue to be popular, since not everyone will be in the office all the time, and people will still need rooms to duck into to attend those meetings.

What's disappearing is our old idea of private offices — earmarked for one person and decorated with framed family photos. Companies are replacing those with call rooms or study rooms that anyone can reserve as needed. 

In fact, the share of firms using desk reservation systems for workers coming into offices has jumped from around 15% pre-pandemic to around 50% now, Wasmund notes.

One more new trend: In the past, workers had to submit requests — and often provide medical reasons — to get standing desks. Now, 65% of firms say offering a sitting and standing option is standard for the offices of the future.

The bottom line: As companies try to lure workers back to the office, even if just for a few days a week, the rooms with the best views and the nicest furnishings will increasingly be the common spaces, not the executive suite.

COVID smashes office architecture

Meeting rooms are replacing private offices.

Illustration of a COVID wrecking ball aimed at an office building.

Future of work

Canned or fresh: The great cranberry sauce debate

Data: Instacart; Map: Sara Wise/Axios; Illustrations: Sarah Grillo/Axios

Americans are divided over whether to have fresh or canned cranberry sauce at their Thanksgiving table, according to data from Instacart.

By the numbers: Fresh cranberry sauce has a slight edge, winning 26 states to canned cranberries' 24 states.

Mississippians are 22.3% more likely to buy canned cranberry sauce compared to the national average. Iowans are 70.6% more likely to buy fresh cranberries.

Of note: The top four states for cranberry production — Wisconsin, Massachusetts, New Jersey and Oregon — are split on cranberry preferences, according to the Agricultural Marketing Resource Center.

Wisconsinites and Oregonians lean toward fresh berries. Massachusetts and New Jersey residents prefer canned cranberries.

Fresh cranberry sauce has a slight edge, winning 26 states to canned cranberries' 24 states.

Commerce

Axios Media Trends

Pressure from new publishing platforms has finally pushed newsrooms to create programs that give writers more pay, autonomy and flexibility. Those changes are attracting some independent writers back to traditional news companies. 

Why it matters: The Substack threat to newsrooms was overblown. Newsrooms have been quick to react to the idea of the independent-operator model while journalists have been sharing its challenges or detailing why they decided to return to newsrooms.

Driving the news: The Information is in early stages of launching "The Information Newsletter Network," a platform to power independent newsletter writers on The Information's tech stack.

"Everyone in publishing knows the hard part happens after you hit send," says CEO and founder Jessica Lessin. 

"We are the only solution I've seen that gets that. We've got eight years of experience about how to scale premium subscription publications. No tech platform has that in their DNA, and it shows in their products."

The company's first member is Parqor from Andrew Rosen. Rosen's newsletter was previously on Substack. Lessin says the first batch of newsletters are business-related, "but our lens for inviting writers to participate is  really just whether we love their content."

The platform, she adds, is "designed for subscription newsletters and the vast majority will be paid, but one of the next to launch is currently free and exploring paid related products." 

Other news outlets are revamping their strategies to meet the demand. 

The Atlantic earlier this month rolled out its new newsletter program with nine contracted writers, giving them the ability to take on projects outside of the company while also reportedly giving them a cut of subscriber revenue.

The New York Times recently put a bunch of opinion newsletters behind its paywall. Some newsletters will be written by non-Times employees.  

Puck, a newsletter-based startup that focuses on covering people in power, launched explicitly to give independent writers the support of a brand to help them build their audiences. 

Forbes in January debuted a newsletter platform that lets journalists launch their own paid newsletters and split the revenue.

Between the lines: Substack on Monday said there are more than 1 million paid subscriptions to publications on its platform, up from about 250,000 in December 2020.

"These are subscriptions that didn’t exist before — they’re not being siphoned off from traditional media outlets or redistributed from other platforms," wrote Substack co-founder Hamish McKenzie.

Despite losing a few writers, news executives feel mostly optimistic that Substack's success will help encourage people to get in the habit of paying for quality content, thus bolstering their own subscription efforts.

"I would regard anything that is about helping make the market for paid digital journalism is good," New York Times CEO Meredith Kopit Levien told investors this month in response to a question about Substack. 

By the numbers:  Over the past few months, it's become increasingly clear that  Substack — now four years old — has become a haven for controversial  writers, given its lack of editorial oversight. 

Bari Weiss, the former New York Times writer who left the paper, now makes roughly $800,000 on Substack. 

Alex Berenson reportedly earns around $720,000 per year on Substack. 

Glenn Greenwald, according to an estimate from The Financial Times earlier this year, is on track to make between $1 and $2 million per year on Substack. 

"Substack is way more reliant on political controversy," says Uri Bram,  publisher of The Browser, and the author of Thinking Statistically. Bram left Substack for publishing platform Ghost last year. 

By comparison, a few top journalists that left mainstream platforms have recently revealed data that showed how building an audience on Substack can be more challenging than anticipated. 

Eric Newcomer, a Bloomberg veteran, wrote last month he has 1,374 paid subscribers after one year on Substack. The "Newcomer" newsletter is one of the top technology paid publications on Substack. 

Casey Newton, who authors the most popular paid technology newsletter on Substack, said in September said that he converted a smaller percentage of subscribers to paid than he thought he would in his first year. 

Charlie Warzel recently wrote when he left Substack for The Atlantic that he accrued 1,600 paid subscribers since leaving The New York Times in April. 

What to watch: The newsletter boom will birth new platforms catering to creators looking for a happy middle ground between newsroom support and independence. 

Workweek launched last week to give business writers full-time support to work independently.

Lede, the publishing platform that powers Defector Media, was spun out from its parent company called The Alley Group, to focus more on helping writers spread beyond newsletters and into things like podcasts. 

The bottom line: Journalists that crave the infrastructure and editorial support offered by newsrooms are finding more happy mediums as the newsletter industry grows. 

Big media strikes back at Substack

"Everyone in publishing knows the hard part happens after you hit send."

Illustration of a newspaper with a Substack logo cut out of it

Substack

Media

Rich people's toys — mansions, yachts, watches, private jets — are in short supply, forcing the superrich to cough up even more cash for exclusive activities — if they can get in on them at all.

Why it matters: The richest Americans are experiencing a version of the shortages and price hikes that define the pandemic economy for the rest of us. But while you may be having trouble finding what you need at the grocery, the super wealthy are having trouble getting a yacht.

Globally, 2020's rise in wealth inequality was the second biggest of the last century, according to Credit Suisse's wealth report, which also found that the ultra high net worth cohort saw the most newcomers in nearly two decades.

One side effect is record demand and soaring costs for their exclusive activities.

Never has there been so much demand for private planes: there were 323,000 flights in October — the busiest month on record, aviation consultancy Argus International told Fortune.

NetJets, the world's biggest private jet company, is going to extremes to turn people away. First it raised prices, but that didn't stem jetsetter demand. Then it suspended jet card sales, along with share and lease sales for immediate access.

If you have the means, you can join the waitlist — but there will be over 1,500 people ahead of you. 

For another sign of the mania, look to the white hot, record-breaking art sales that are drawing in a new crop of bidders (crypto bros, for one) — and giving the old guard a run for their money.

"You're no longer just dealing with the tried and true collectors. It's people who are completely new, who now have the wealth to participate, but never thought to do so before," Mari-Claudia Jiménez, who chairs the global fine arts division at Sotheby's, told Axios.

One painting sold at a Sotheby's auction this week for $3.2 million, over 10 times more than its high estimate.

Last year, Christie’s auctioned 9 artworks for $25 million or more. The auction house did that fourteen times in the last two weeks alone, as the Wall Street Journal reports.

The bottom line: Not even the wealthy can duck the short-on-stuff, high-flying prices of the pandemic-era economy.

The great yacht, plane shortage

It's one sign of the vastly different realities for America's wealthy and nonwealthy.

Animated illustration of a scared face made from the zeros on the top corner of a one hundred dollar bill 

Billionaires

Data: Axios Research; Chart: Will Chase/Axios

The creator economy has produced thousands of social media entrepreneurs who have built mega-audiences in the millions — larger than many media companies. Often, they operate in parallel universes, with little overlap between platforms.

Why it matters: What differentiates social platforms is no longer their features, but their values and communities. What makes one person popular on one platform may not make them remotely interesting or influential on another.

For example: Mr. Bean, a fictional British sitcom character, is the 4th most popular page on Facebook, with 129 million followers. He has just 215,000 followers on Twitter.

TikTok star Bella Poarch has 85 million followers on TikTok, and less than 1 million on Twitter.

Kim Kardashian West has 263 million followers on Instagram, but only 1.88 million subscribers to her YouTube channel.

Driving the news: According to an Axios analysis of the top 50 most-followed accounts on each platform, TikTok is especially unique in minting its own stars who don't blow up on other platforms.

The top five most-followed accounts on TikTok — Charli D'Amelio, Khaby Lame, Addison Rae, Bella Poarch and Zach King — do not rank in the top 50 of any other social media network. 

Collectively, those five stars have 480 million followers on TikTok, but less than half of that amount of followers across Twitter, Instagram, YouTube and Facebook combined. 

Top TikTok personalities have been able to land massive Hollywood deals across film, TV and podcasts, without building audiences on other platforms. 

The personalities of each platform are illustrated by the 50 biggest accounts:

TikTok favors individual creators that built their presence on the platform, rather than heavily resourced entertainment organizations. Outsized success of dancing and lip-syncing accounts stems from its origin as Musical.ly.

On YouTube, the top accounts are bigger music and entertainment operations, often international. Among the 20 most-followed accounts: six are from India, four from the U.S., three from South Korea, two from Russia. 

Facebook gives an edge to brands thanks to its design, which encourages users to 'like' any type of page, whether or not it produces content. Chinese news organizations are four of the 21 biggest accounts, and accounts from China don't appear on the top 50 list of any of the other platforms.

Instagram is the place to be a celebrity — it offers the opportunity to show off your lifestyle and be a tastemaker. The followings on Instagram are higher than any other platform.

Twitter also rewards celebrity, but on a smaller scale than Instagram. People known for their ideas can also build a following: It is the only platform with politicians and business leaders in the top 50.

The big picture: While there is some overlap across each platform, the very top performers tend to be widely different. 

Sports stars and actors shine on Facebook and Instagram, while musicians do better on YouTube and TikTok, naturally.

The only accounts to appear in the top 10 of more than one platform are Cristiano Ronaldo (Facebook, Instagram, Twitter), Ariana Grande (Instagram, Twitter) and Will Smith (Facebook, TikTok).

The big picture: About half (123) of the top 50 accounts across all five platforms measured originate from the United States. 

The next-largest country of origin for top accounts is India with 29, followed by the U.K. with 12, South Korea with 9 and Canada and Spain with 8 each. 

Editor's note: This story was originally published with a different graphic on Tuesday, Nov. 16.

How to hit the top on each social media platform

The creator economy has built accounts with mega-audiences — larger than many media companies.

Social media

From the Valley to D.C., Big Tech players like Facebook, Google and Amazon are under more scrutiny than ever as new technology develops and privacy and antitrust concerns grow in lockstep with companies’ ambitions.

Technology

The Transportation Security Administration screened nearly 2.24 million airline passengers on Friday, marking the highest number of air travelers since the COVID-19 pandemic began. 

Why it matters: The milestone comes after experts anticipated significantly more people would travel this holiday season.

The big picture: TSA spokesperson Lisa Farbstein tweeted Saturday that Friday's screening numbers were the "highest checkpoint volume since passenger volume tanked in early 2020." 

TSA had anticipated the rise in screenings and announced earlier this week that it expected to screen about 20 million air passengers during the Thanksgiving travel period. 

Last Thanksgiving, TSA screened 1,176,091 people at checkpoints in the United States.

Go deeper: Holiday COVID alarm as cases rise 20%

TSA screens highest number of air travelers since start of pandemic

TSA expects to screen about 20 million air passengers during the Thanksgiving travel period.

Transportation Security Administration (TSA) workers screen passengers at O'Hare International Airport on November 08, 2021 in Chicago, Illinois.

Transportation Security Administration workers screen passengers Nov. 8 at O'Hare International Airport in Chicago, Illinois. Photo: Scott Olson/Getty Images

COVID-19

Transportation

Latinas are a growing segment in the beauty and self-care industries, outspending non-Hispanic buyers in the past few years.

Why it matters: Many companies have yet to market to them, while brands aimed at Latinas or have Latina founders struggle to attract investors.

Between the lines: Some companies have begun to diversify their products for people of color, thanks to brands like Rihanna's Fenty Beauty. But experts say the shade ranges and offerings from most brands still fall short of the variances in Latina skin and hair. 

This, despite the fact that Latina buyers represent 18.5% of the U.S. beauty industry's revenue, per Nielsen data.

In 2016, a MAC makeup line inspired by the late Tejana singer Selena, with shades complimentary of the artist's brown skin, sold out within hours when it was first introduced and remains one of the brand’s best-selling collections. 

By the numbers: Hispanic women were the only non-white group who drove make-up and nail care purchases during the pandemic in 2020, spending 13% more than the average buyer on personal care, according to Nielsen. 

Since 2015, Latinas of all age groups have spent on average $35-50 more per year on personal care items, such as lipstick and hair care products, than their peers.

They have also shown the most interest in buying personal care products that are natural and environmentally friendly, opening up the opportunity for a huge new market, according to Nielsen.

The intrigue: Several Latinas have set out to establish personal care brands that offer a wider range of shades and other options. 

They include make-up brands like artist Becky G’s Treslúce and Luna Magic, which was founded by two Afrolatina sisters, as well as hair care product brands such as Botánika Beauty or Bomba Curls, both from Dominican Americans.

But similar companies say one of the biggest stumbling blocks remains access to capital, Bloomberg reports. The Frías sisters behind Luna Magic, for example, had to depend on financing through the TV show “Shark Tank” in order to launch earlier this year.

“This is why we have to train other women to be entrepreneurs, show them the ropes,” Melanie Jovanovic, the Venezuelan founder of her own cosmetics line and owner of beauty care salons in the Miami area, tells Noticias Telemundo.

Of note: A handful of Latina beauty vloggers and bloggers have acquired followings based on their reviews of certain products and their tips on mixing custom shades. 

They include Mexican American military veteran turned influencer Dulce Candy and Dominican American YouTuber Alba Ramos.

Brands have also begun diversifying their spokespeople, by tapping the likes of Latina artists Camila Cabello, Melissa Barrera and Eva Longoria.

Editor's note: This story was first published on Nov. 16.

The beauty industry overlooks rising Latina demand

Latinas are a growing segment in the beauty and self-care industries, contributing 18.5% of revenue last year.

Illustration of three different hands reaching for one lipstick

Hispanic and Latino Americans

Retail

Latin America and Latinos

China is becoming the most formidable rival America has faced, and the risk of confrontation with Russia, North Korea or Iran still looms. Authoritarians are rising, the chaotic Afghanistan exit revealed the limits of U.S. power, and the pandemic, climate change and other critical challenges continue to pose grave threats.

World

Crypto venture capital is a different game than traditional venture capital, which isn't something that every participating firm has yet to fully appreciate.

Why it matters: The key is matching the asset class in which you're investing.

Registered investment advisers: Venture funds are exempt from registering as investment advisers, but only 20% of their holdings can be in “non-qualifying investments” like digital tokens. So it’s no surprise that a growing number of firms are registering with the SEC. Complying with custody and other requirements also makes limited partners feel more at ease.

Tokens + equity: While some crypto investments are best done at the company level, others’ value is in the tokens (or eventual tokens). For example, about 75% of Andreessen Horowitz's current crypto fund’s capital is invested in tokens, partner Katie Haun said at an event last week. Some firms even manage more hedge fund-like vehicles that trade tokens, given the liquidity of many of these assets. 

Multi-stage: Paradigm, which just raised a $2.5 billion fund, describes itself as an early-stage investor, but co-founder Matt Huang admits the firm won’t always catch every great investment in its earliest days, so it’s used to writing checks across all stages. It participated in crypto exchange FTX’s $900 million July round, for example. 

Research: Hiring smart tech researchers is all the rage among crypto funds, in part to build up their credibility with entrepreneurs and to keep them abreast of the latest trends and advances. “[Our research team’s] core work is to be on the frontier,” Huang tells Axios. 

Services: Crypto startups have some of the same help needs as other tech businesses (e.g., hiring, marketing, etc.), but they also have unique challenges. Navigating the fuzzy regulatory landscape and attracting quality contributors to their projects are among them. 

What they’re saying: “In the normal world, there’s existing software, or vendors or providers. In crypto, a lot of these solutions don’t exist,” says Huang, adding that his firm (and its peers) must build many of the tools it users to manage its own operations.

The bottom line: “You can’t get away with being just signal,” says CoinFund founder and CEO Jake Brukhman. “I think they have to be active participants [in the ecosystem].” 

Meet the modern crypto venture capital

It's a different game than traditional venture capital, which isn't something that every firm has yet to fully appreciate.

Illustration of connected "bitcoins" with a college of rectangles and money in the background

Cryptocurrencies

Stock market

A new Morning Consult poll found that nearly 40% of people who traveled for business pre-pandemic predict they'll never take a business trip again. If that's true, it would be a massive blow to the airline industry, which has long used business travel to essentially subsidize fares. 

Axios Re:Cap host Erica Pandey is joined by Morning Consult travel and hospitality analyst Lindsey Roeschke to discuss what this poll tells us about the future of air travel. 

Plus, a news update on the verdict in the trial of Kyle Rittenhouse.

The decline of business travel

If business travel never bounces back post-pandemic, it could reshape the airline industry.

Airlines

Axios Re:Cap

Podcasts

Taking the stand to close out the first day of her trial’s defense, ex-Theranos CEO Elizabeth Holmes highlighted to jurors some of the due diligence her early investors performed. 

Why it matters: Though Holmes was included on her defense’s list of potential witnesses, it was unclear whether she would actually testify. 

What she’s saying: "We worked for years with teams of scientists and engineers to miniaturize all of the technologies in a lab. The core part of that was a formula for being able to run tests on small samples….By 2009-2010 we had a breakthrough," Holmes testified, per ABC's Miles G. Cohen in the courtroom.  

Details: During her testimony on Friday, according to journalists in the courtroom, Holmes began by describing her upbringing and the start of Theranos.  

She talked about going to college at Stanford University where she did research and filed a patent for a pill that can test and release drugs.  

Holmes dropped out in 2004 to set up her company, initially called "Real Time Cures," and financed it in part with the money her parents had set aside for her college education; she hired two people she worked with at Stanford and two from IBM. 

After speaking to many people in the pharma industry, the feedback was that people were interested in a tabletop device, so Theranos shifted to developing one. 

She went out to raise a Series B round from late 2005 to early 2006 after building a prototype, and she met with VC Don Lucas, whom she was introduced to by someone who went to college with her father. His due diligence included hiring a law firm to review patents, Theranos' contracts and audited financials. He invested and was board chairman until 2013.  

Another Series B investor, Peter Thomas, also asked for the audited documents and patents. Holmes introduced him to David Lester at Pfizer. Investor Chris Lucas (who testified earlier as a victim of her fraud), however, did not ask for those documents. 

Theranos eventually signed agreements with GSK in September 2006 and Pfizer in Nov. 2006. It also spoke with Novartis, Bristol Myers Squibb, and others. 

The company did its first live demo in Switzerland for Novartis. Holmes sent employees an email after the demo telling them it went well based on her impression of the meeting and an email from Theranos' R&D head John Howard saying he thought it went well.

Soon after, she set out to fundraise again and met with Larry Ellison, who invested, along with other investors like the Carlyle Group's Bob Grady, and Greg Hall. 

What's next: Holmes' testimony will resume on Monday.  

Go deeper: Theranos trial reveals investors' questionable due diligence 

Ex-Theranos CEO Elizabeth Holmes testifies in her own fraud trial

Though she was included on her defense’s list of potential witnesses, it was unclear whether she would actually testify.

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