1 big thing: An end to the jobs party
A plunge in U.S. jobs growth suggests that the party is nearing an end for American workers, who have enjoyed their best employment conditions in a half century.
What's happening: At 20,000 new jobs, reported today by the Labor Department, the economy produced far fewer positions last month than required to absorb 60,000 to 80,000 new entrants to the workforce, such as high school and college graduates.
- The numbers come amid a remarkable economic expansion: The U.S. economy has produced jobs for 101 consecutive months. And the economy has expanded for 117 months.
- And some economists suggest that no one panic: They note, for instance that the three-month average of job creation is still high, at about 186,000. And, as Axios' Courtenay Brown reports, wages rose 3.4% from February 2018 — the best pace in a decade.
But February's anemic employment number dovetails with other, worrying new data from jobs websites that are close to the market:
- Job cuts rose in February: Layoffs were up 45% over January, and 117% over February 2018, according to Challenger, Gray & Christmas, the job recruitment firm. It was the highest month-on-month cuts since July 2015.
- Hiring slowed: Over the last three months, gross hiring was 2.9% lower than in the same period a year ago, according to LinkedIn. Among the industries on the decline — construction, health care and manufacturing.
- Wage increases shrunk: Amid the tightest job market in a half-century, wage increases declined year-on-year last month to just 1.3%, down from 2% in January, according to Glassdoor, the jobs listing website.
The big picture: What we are watching is jobs following the economy. Joe Brusuelas, chief economist at RSM, says economic growth is below 1% in the current quarter, and job expansion is slowing, too. "I think that the sizzle has gone out of the steak," he tells Axios.
Daniel Zhao, an economist with Glassdoor, calls it "an inflection point."
- Wage growth seems likely to stay where it is or fall, Zhao said.
- "Job growth on overdrive — those days are gone," said Dan Roth, editor-in-chief at LinkedIn.
The bottom line: After decades of largely flat wage growth, driven by a jobless rate under 4%, workers have finally been receiving real month-on-month pay increases. The February jobless rate was still rock-bottom — at 3.8%. No one today changed their longer-term economic forecast. But the new data suggest that the good times have peaked.
2. For Amazon, pop-ups were pocket change
Amazon's decision this week to close all 87 of its U.S. pop-up stores may seem to signal a failed experiment. But temporary shops can be a proving ground to test different physical experiences and gather data, writes Amit Sharma, founder of Narvar, a contributor to Axios Expert Voices.
Why it matters: Amazon is preparing to open more brick-and-mortar outlets like Amazon Books, Amazon 4-Star, and Amazon Go convenience stores. Experiments like the pop-ups are a way to test-run company ideas before taking the larger plunge.
Between the lines: Brands ranging from IKEA and direct-to-consumer Outdoor Voices, to tech giants like Google, and rock legends Guns ‘n’ Roses are opening pop-up stores. In Amazon's case, it merged mobile-commerce and store display, creating a dataset on sales, foot traffic, and home-delivery.
- In terms of takeaways, Amazon can infer for instance that products and store features that performed well in Williamsburg, Brooklyn, could work in similar neighborhoods such as Wicker Park, Chicago or Hayes Valley, San Francisco.
By the numbers:
- Launching 87 pop-up kiosks allowed Amazon to test consumer reception in 21 states while experimenting with different retail environments, such as Kohl’s stores, Whole Foods, and shopping malls.
- In the larger scheme of Amazon’s physical retail strategy, it’s a relatively small investment. The company reportedly plans to open 3,000 Amazon Go stores by 2021.
The bottom line: Retail is trending towards smaller chains, better-designed stores, and greater diversity of services and experiences. Brands, including Amazon, are working to offer consumers the convenience and experience of a physical location — one that has been informed and optimized by data on consumer preferences.
3. What you may have missed
Have you been otherwise engaged? Not to worry — here's the top of Future for the week.
1. For struggling Americans, nowhere to go: A motionless country
2. The U.S. loses ground in the chip race: A little-watched competition
3. To slash the trade deficit, tank the economy: Economists' message to Trump
4. A sky-full of driverless vehicles: Dense city skies in a decade
4. Worthy of your time
The world's most dangerous malware (Blake Sobczak — E&E News)
The end of the old privacy rulebook (David McCabe — Axios)
Elizabeth Warren's plan to break up Big Tech (Astead Herndon — NYT)
Amazon's supplier purge (Spencer Soper — Bloomberg)
The out-there AI ideas keeping the U.S. ahead (Will Knight — MIT Tech Review)
5. 1 AI thing: A computer designs a little black dress
For many women, the "little black dress" — first conceptualized by Chanel in the 1920s flapper years — is a wardrobe staple. It's a classic color, perfect for nights out (with a pair of heels) or a day in the office (with a blazer).
Erica writes: But these days, with every big-time and small-time designer adding the LBD to their collections, the market is flooded with every kind of black dress imaginable — and it's hard to stand out.
- To add some variety, Pinar Yanardag and Emily Salvador, two MIT researchers, developed an AI that can design a unique little black dress. To get there, they fed in thousands of designs.
- The result? An asymmetrical, V-neck dress.
- The researchers topped off the outfit with AI-designed jewelry, shoes and a necklace — and it doesn't look half bad.