Hi, Insiders! And welcome back to those of you who enjoyed an extended break. Tuesday was a day to celebrate the US. But when it comes to the country's economy, plenty of folks aren't as eager to celebrate. However, fears of an impending recession are unfounded and need to be put to rest, the economist Neil Dutta writes. In today's edition: |
But first, let's put the bears to bed. |
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THE BIG STORY Bad news for Wall Street's bears |
Arantza Pena Popo/Insider |
For more than a year, the US economy has been in its will-it-won't-it era regarding a potential recession. Depending on who you ask, every data point — including energy prices and the housing market — is either indicative of a light at the end of the tunnel or that the end is near (in terms of the economy, that is). At least one economist is ready to put an end to the debate. There are plenty of reasons to be optimistic about the direction of the US economy, and anyone saying otherwise is ignoring the signs, Neil Dutta, the head of economics at Renaissance Macro Research, writes. When making the case for the US falling into a recession, as Neil writes for Insider, arguments typically mention at least one of the following: |
- Banks aren't lending as much, which limits who has access to credit. Neil's take: Data on bank lending is actually a lagging indicator. Lending peaks when we're already in a recession and bottoms out when a recovery is underway.
- The job market is not in good shape as initial unemployment claims are on the rise. Neil's take: Continuing claims, which measure people who actually receive unemployment benefits, aren't rising as quickly as initial claims. That indicates people are finding jobs pretty quickly.
- Commercial real estate is a ticking time bomb as companies struggle, or give up entirely, on trying to get workers back to the office. Neil's take: Structures investment — nonresidential buildings such as strip malls, offices, lodging, and power plants — make up less than 3% of the US GDP. And office space makes up a small percentage of that.
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But proving things aren't that bad is only half the battle. What is there to be optimistic about? Here too, Neil has some points to make. The housing market seems primed for a comeback — an idea homebuilders seem optimistic about, too. Meanwhile, the stockpile of goods businesses amassed amid the supply-chain nightmare of 2021 and 2022 is finally dwindling, which is set to force them to restock. And the stock market seems to be moving in the right direction. All of the above doesn't seem very recession-like, Neil writes. Of course, that still might not be enough to convince people. As Insider's Noah Sheidlower writes, Americans have a pretty pessimistic view of the economy despite the numbers showing otherwise. The disconnect between actual performance and public perception is being called by some a "vibecession." What do you think? Are fears of a recession overblown? Or are you still preparing for the worst? Let us know at insidertoday@insider.com. |
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TOP READS Zombie buildings, Titan sub, & more |
Reddit CEO Steve Huffman. Greg Doherty/Variety via Getty Images
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- Inside Reddit's path to an IPO. Things were looking up when Reddit filed for IPO in 2021. Since then, the company has conducted layoffs, revenue growth has reportedly slowed, and demand for tech stocks has dropped. Insider spoke to current and former employees about the path to IPO — which doesn't look straightforward.
- The market for office buildings is turning into a zombie apocalypse. Well, sort of. Landlords are facing a double whammy of lower leasing rates and a drop in their buildings' valuations. As a result, some properties have become too costly to rent out, making them "zombie buildings."
- If you'd like some good work-life balance, you're better off moving to Europe. It was a Scandinavian sweep atop Forbes' analysis of cities with the best work-life balance. Copenhagen, Denmark; Helsinki; and Stockholm took the top three spots on the list, respectively, which factored in everything from average working hours to the World Happiness Index. In fact, the only non-European city in the top 10 was Auckland, New Zealand.
- A former OceanGate employee reportedly raised nine safety concerns about the Titan submersible with its CEO back in 2018. David Lochridge was asked to do an inspection of the sub by OceanGate CEO Stockton Rush, per The New Yorker. But the report he submitted to Rush and others at the company highlighted numerous issues, including fears about Titan's carbon-fiber hull, according to The New Yorker. Rush was reportedly "furious" about the assessment, and Lochridge was fired shortly after.
- Hybrid-working policies are crushing interns' spirits. Young professionals are eagerly showing up to their offices only to find them empty half the time. As a result, some interns are feeling isolated and worry it might alter their career development.
- The DeSantis-Disney war rages on. Florida Gov. Ron DeSantis has made his feud with Disney a key talking point of his presidential campaign and has accused the company of promoting the "sexualization of children." But experts on free-speech laws told Insider that the House of Mouse was unlikely to pursue a defamation lawsuit over DeSantis' comments.
- Try writing a program for how to crack the best jokes at the water cooler. Employees with strong people skills actually stand to benefit from the AI boom. Those who "can make their presence felt in a room" stand to "thrive in the age of AI," according to Carl Benedikt Frey, a professor of AI and work at the University of Oxford.
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BEFORE THE OPENING BELL Housing market, Tesla, and US stocks |
- Here's what you missed while you were BBQing. US stocks were slightly up after the shortened day of trading on Monday.
- So, about the housing market… Mortgage rates remain high, but the market is still tight. So what gives? It seems everyone is at a bit of a standstill as homeowners don't want to sell their homes because they would have to buy another home at a much higher interest rate.
- Tesla beats on second-quarter vehicle-delivery expectations. The electric-vehicle maker delivered 466,140 vehicles in Q2, which was ahead of estimates of about 450,000. But Wall Street still can't seem to agree on where shares of Tesla should be.
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| WHAT ELSE IS GOING ON Harvard, MediaMath, & finance jobs |
- Everyone that loaned MediaMath money is scrambling. The former rising star of adtech shocked the industry when it recently filed for Chapter 11 bankruptcy protection. Now MediaMath's creditors, who are cumulatively owed more than $100 million, are trying to figure out what to do.
- Harvard's admissions process is in the spotlight. A civil-rights group has accused the Ivy League school of disproportionately favoring white applicants by offering a leg up to those with familial ties to Harvard via a relation to past graduates or a wealthy donor.
- Gen Z wants in on Wall Street now that everything is so expensive. Young people view finance as the best industry for future career prospects, per a new survey where respondents said having a "good salary" was the most important factor in an employer.
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LAST LOOK Fourth of July through the years |
NY Daily News Archive/Getty Images; Bettmann Archive/Getty Images |
Coney Island, New York, has been a destination for Fourth of July celebrations for over a century. The festivities include firework displays, parades, and live performances to the annual Nathan's Famous Hot Dog Eating Contest. Photos show how Americans celebrated over the years. |
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