Author: Bloomberg

GM to Bolt owners: Park 50 feet from other cars

By David Welch and Dana Hull | Bloomberg

General Motors Co. urged some owners of Chevrolet Bolt electric cars to park and store the vehicles at least 50 feet away from other cars to reduce the risk that a spontaneous fire could spread.

The Detroit automaker has recalled all of the roughly 142,000 Bolts sold since 2016 because the battery can catch on fire. GM has taken a $1.8 billion charge so far for the cost of the recall and has been buying cars back from some disgruntled owners. The company expects to recoup much of the cost from battery supplier LG Corp.

The new advice is likely to rankle owners who are already limiting their use of the Bolt to avoid overheating the battery and risking a fire. The parking guidance — recommending a distance of 50 feet from other parked cars — is especially difficult for owners in urban areas. GM has confirmed 10 fires.

The Bolt normally can go 259 miles on a charge, but that has been limited by GM’s guidance to avoid a fire. The automaker told Bolt owners to limit the charge to 90%, plug in more frequently and avoid depleting the battery to below about 70 miles of remaining range. They’re also advised to park their vehicles outside immediately after charging and not leave them charging indoors overnight.

GM has said the fires are a rare event and are the result of two uncommon defects that stem from a manufacturing problem in LG’s plants in Michigan and South Korea. 

Poverty rate rises from 60-year low as incomes fall amid pandemic

By Jill R. Shah and Alex Tanzi | Bloomberg

U.S. household income fell in 2020 while the national poverty rate rose from a 60-year low as the Covid-19 pandemic upended the U.S. economy and threw millions out of work.

Median, inflation-adjusted household income decreased 2.9% last year to $67,521 according to annual data released Tuesday by the U.S. Census Bureau. The poverty rate rose one percentage point to 11.4% after having dropped for five straight years and reaching the lowest since 1959 in 2019.

The data help flesh out the picture of American families’ economic health in 2020 amid a pandemic that caused the first annual economic contraction since 2009, put tens of millions out of work and exacerbated existing inequalities.

Lower-wage service-industry workers and people of color bore the brunt of job losses. The government’s stimulus checks and extra $600 a week in jobless benefits helped soften the blow, supporting incomes and spending amid widespread unemployment.

Stimulus help

The Supplemental Poverty Measure, which includes many government assistance programs, declined 2.6 percentage points to 9.1% in 2020, the lowest since the gauge started in 2009. This rate is lower than the official poverty rate because of economic-relief payments related to the pandemic, which moved 11.7 million people out of poverty in the first two rounds of disbursements. Five million people were added to poverty due to medical expenses.

“This really highlights the importance of our social safety net,” said Liana Fox, chief of the Census’ poverty statistics bureau.

That finding is likely to resonate in a divided Congress, where President Joe Biden’s $3.5 trillion “Build Back Better” plan faces uncertain prospects. Two anchors of last year’s COVID response — enhanced unemployment benefits and a federal eviction moratorium — have expired, adding to concerns.

There were 37.2 million people living in poverty in 2020, 3.3 million more than a year earlier, the Census Bureau said. It considers a two-parent, two-child household with less than $26,246 in income to be living in poverty; the measure differs by size of household.

The data show that the official poverty measure is outdated and “can’t be used to examine public policy,” said David Johnson, a research professor at the Institute for Social Research and Ford School of Public Policy at the University of Michigan.

Digging deeper

Poverty rates rose among Hispanics and non-Hispanic Whites. While the poverty rate among Black people was the highest at 19.5% and the Asian rate also increased, both weren’t statistically significant changes from 2019.

Close to one in four people without a high-school diploma were in poverty compared with less than 4% of people with a bachelor’s degree or higher.

Women are still more likely to live in poverty at rates of 12.6% compared with 10.2% for men. The female-to-male earnings ratio was 0.83, not statistically different from the 2019 ratio.

For families with single female heads of household, 23.4% were in poverty compared with 11.4% for families led by single males. Married couples saw the lowest poverty rates at 4.7%, up slightly from a year ago.

Median incomes for non-Hispanic White, Asian, and Hispanic households all decreased in 2020, while changes for Black households were not statistically different. Real median incomes fell in every region of the country other than the Northeast. Every household income group saw income fall in 2020 except for the top 5% of households.

Tuesday’s report also shows the share of Americans without health insurance at 8.6% last year, amounting to 28 million people. For people with health insurance coverage, 66.5% are on private insurance and 34.8% are on public plans.

The Associated Press contributed to this report.

Poverty rate rises from 60-year low as incomes fall amid pandemic

By Jill R. Shah and Alex Tanzi | Bloomberg

U.S. household income fell in 2020 while the national poverty rate rose from a 60-year low as the Covid-19 pandemic upended the U.S. economy and threw millions out of work.

Median, inflation-adjusted household income decreased 2.9% last year to $67,521 according to annual data released Tuesday by the U.S. Census Bureau. The poverty rate rose one percentage point to 11.4% after having dropped for five straight years and reaching the lowest since 1959 in 2019.

The data help flesh out the picture of American families’ economic health in 2020 amid a pandemic that caused the first annual economic contraction since 2009, put tens of millions out of work and exacerbated existing inequalities.

Lower-wage service-industry workers and people of color bore the brunt of job losses. The government’s stimulus checks and extra $600 a week in jobless benefits helped soften the blow, supporting incomes and spending amid widespread unemployment.

Stimulus help

The Supplemental Poverty Measure, which includes many government assistance programs, declined 2.6 percentage points to 9.1% in 2020, the lowest since the gauge started in 2009. This rate is lower than the official poverty rate because of economic-relief payments related to the pandemic, which moved 11.7 million people out of poverty in the first two rounds of disbursements. Five million people were added to poverty due to medical expenses.

“This really highlights the importance of our social safety net,” said Liana Fox, chief of the Census’ poverty statistics bureau.

That finding is likely to resonate in a divided Congress, where President Joe Biden’s $3.5 trillion “Build Back Better” plan faces uncertain prospects. Two anchors of last year’s COVID response — enhanced unemployment benefits and a federal eviction moratorium — have expired, adding to concerns.

There were 37.2 million people living in poverty in 2020, 3.3 million more than a year earlier, the Census Bureau said. It considers a two-parent, two-child household with less than $26,246 in income to be living in poverty; the measure differs by size of household.

The data show that the official poverty measure is outdated and “can’t be used to examine public policy,” said David Johnson, a research professor at the Institute for Social Research and Ford School of Public Policy at the University of Michigan.

Digging deeper

Poverty rates rose among Hispanics and non-Hispanic Whites. While the poverty rate among Black people was the highest at 19.5% and the Asian rate also increased, both weren’t statistically significant changes from 2019.

Close to one in four people without a high-school diploma were in poverty compared with less than 4% of people with a bachelor’s degree or higher.

Women are still more likely to live in poverty at rates of 12.6% compared with 10.2% for men. The female-to-male earnings ratio was 0.83, not statistically different from the 2019 ratio.

For families with single female heads of household, 23.4% were in poverty compared with 11.4% for families led by single males. Married couples saw the lowest poverty rates at 4.7%, up slightly from a year ago.

Median incomes for non-Hispanic White, Asian, and Hispanic households all decreased in 2020, while changes for Black households were not statistically different. Real median incomes fell in every region of the country other than the Northeast. Every household income group saw income fall in 2020 except for the top 5% of households.

Tuesday’s report also shows the share of Americans without health insurance at 8.6% last year, amounting to 28 million people. For people with health insurance coverage, 66.5% are on private insurance and 34.8% are on public plans.

The Associated Press contributed to this report.

Two-thirds of businesses worldwide are struggling to hire

By Reade Pickert | Bloomberg

Businesses around the world want to hire but face a similar dilemma: attracting workers.

A survey of nearly 45,000 employers across 43 countries showed 69% of employers reported difficulty filling roles, a 15-year high, according to employment-services provider ManpowerGroup Inc. At the same time, 15 countries — focused in Europe and North America — reported their highest hiring intentions since the survey began in 1962.

Businesses across all surveyed countries reported stronger hiring outlooks for the end of this year compared to the final three months of 2020.

“Continued talent shortages mean many businesses are prioritizing retaining and training workers with the skills they need to succeed as the economic recovery continues,” Jonas Prising, chief executive officer of ManpowerGroup, said in a statement.

About 40% of respondents said they offer training and skills development to attract and retain talent. A similar share reported offering flexible work schedules. Nearly a third increased wages. Others offered signing bonuses and more vacation time.

The incentives differ by industry, with financial service companies most likely to offer training and development and flexible work locations while manufacturers often raised pay or offered more flexible schedules.

Two-thirds of businesses worldwide are struggling to hire

By Reade Pickert | Bloomberg

Businesses around the world want to hire but face a similar dilemma: attracting workers.

A survey of nearly 45,000 employers across 43 countries showed 69% of employers reported difficulty filling roles, a 15-year high, according to employment-services provider ManpowerGroup Inc. At the same time, 15 countries — focused in Europe and North America — reported their highest hiring intentions since the survey began in 1962.

Businesses across all surveyed countries reported stronger hiring outlooks for the end of this year compared to the final three months of 2020.

“Continued talent shortages mean many businesses are prioritizing retaining and training workers with the skills they need to succeed as the economic recovery continues,” Jonas Prising, chief executive officer of ManpowerGroup, said in a statement.

About 40% of respondents said they offer training and skills development to attract and retain talent. A similar share reported offering flexible work schedules. Nearly a third increased wages. Others offered signing bonuses and more vacation time.

The incentives differ by industry, with financial service companies most likely to offer training and development and flexible work locations while manufacturers often raised pay or offered more flexible schedules.

Walmart punked? Retailer denies Litecoin pact after hoax sends crypto market soaring

By Brendan Case | Bloomberg

Walmart said it hasn’t agreed to partner with Litecoin, refuting a statement earlier Monday that sent the cryptocurrency soaring.

The statement that was released via GlobeNewswire isn’t authentic, a Walmart representative confirmed to Bloomberg News. The company is in the process of trying to learn more about the release.

GlobeNewswire issued a statement at 9:30 a.m. in New York saying that the world’s largest retailer had agreed to partner with Litecoin and accept the cryptocurrency as payment. Litecoin had soared as much as 33% on the announcement, with other cryptocurrencies gaining as well. Litecoin erased almost all of its gain, rising 1.2% at 11:07 a.m. in New York. Walmart shares fell less than 1% after earlier trading in positive territory.

A spokesperson for Intrado, which operates GlobeNewswire, said the company is removing the release from its website and is investigating the incident. Intrado distributes 200,000 press releases per year, according to its website. A representative for the Litecoin Foundation declined to comment.

The debacle highlights how cryptocurrency investors can profit from hoaxes. And with no central authority overseeing them, it’s unclear what companies can do in response. The statement included what was purported to be a quote from Walmart’s chief executive officer and resembled the official statements that public companies use to announce news to the market.

While hoaxes that move asset prices crop up in financial markets from time to time, cryptocurrencies would seem to provide particularly fertile ground for deceivers. Unlike stocks, trading is mostly untraceable — scammers leave few tracks for regulators. It takes very little to influence trading of notoriously volatile assets in the space. Traders have become conditioned to expect hysterical price reactions to the flimsiest news — when, say, Elon Musk namechecks a project on Twitter.

Like many companies, Walmart has indeed expressed interest in cryptocurrencies and blockchain, however. The Bentonville, Arkansas-based company advertised a position earlier this year to develop a blockchain strategy. The position is responsible for “developing the digital currency strategy and product roadmap” and identifying “crypto-related investment and partnerships,” according to an August job posting on the retail giant’s website. 

Walmart punked? Retailer denies Litecoin pact after hoax sends crypto market soaring

By Brendan Case | Bloomberg

Walmart said it hasn’t agreed to partner with Litecoin, refuting a statement earlier Monday that sent the cryptocurrency soaring.

The statement that was released via GlobeNewswire isn’t authentic, a Walmart representative confirmed to Bloomberg News. The company is in the process of trying to learn more about the release.

GlobeNewswire issued a statement at 9:30 a.m. in New York saying that the world’s largest retailer had agreed to partner with Litecoin and accept the cryptocurrency as payment. Litecoin had soared as much as 33% on the announcement, with other cryptocurrencies gaining as well. Litecoin erased almost all of its gain, rising 1.2% at 11:07 a.m. in New York. Walmart shares fell less than 1% after earlier trading in positive territory.

A spokesperson for Intrado, which operates GlobeNewswire, said the company is removing the release from its website and is investigating the incident. Intrado distributes 200,000 press releases per year, according to its website. A representative for the Litecoin Foundation declined to comment.

The debacle highlights how cryptocurrency investors can profit from hoaxes. And with no central authority overseeing them, it’s unclear what companies can do in response. The statement included what was purported to be a quote from Walmart’s chief executive officer and resembled the official statements that public companies use to announce news to the market.

While hoaxes that move asset prices crop up in financial markets from time to time, cryptocurrencies would seem to provide particularly fertile ground for deceivers. Unlike stocks, trading is mostly untraceable — scammers leave few tracks for regulators. It takes very little to influence trading of notoriously volatile assets in the space. Traders have become conditioned to expect hysterical price reactions to the flimsiest news — when, say, Elon Musk namechecks a project on Twitter.

Like many companies, Walmart has indeed expressed interest in cryptocurrencies and blockchain, however. The Bentonville, Arkansas-based company advertised a position earlier this year to develop a blockchain strategy. The position is responsible for “developing the digital currency strategy and product roadmap” and identifying “crypto-related investment and partnerships,” according to an August job posting on the retail giant’s website. 

Amazon to spend $1.2 billion on employee tuition, courses

By Matt Day and Spencer Soper | Bloomberg

Amazon.com said it will pay college tuition for select frontline employees, becoming the latest big U.S. employer to offer educational perks to attract and retain workers in a tight labor market.

The Seattle company said it will spend an additional $1.2 billion by 2025 on education and skills training, including, for the first time, paying the complete costs of college tuition. Amazon has offered a range of educational and job-training perks focused on in-demand fields like nursing and trucking since 2012, many under the banner of its Career Choice program.

Beginning in January, more than 750,000 of Amazon’s U.S. employees, mostly hourly workers in its logistics unit, would be eligible for paid tuition at “hundreds” of education partners, the company said Thursday in a statement. The benefit applies to workers seeking bachelor’s or associate degrees, as well as high school completion and English as a second language proficiency certificates.

The announcement follows similar moves from some of Amazon’s biggest retail rivals. Walmart Inc. in July said it would pay the costs of tuition and books for its hourly staffers. Target Corp. last month said it would offer free undergraduate degrees to  more than 340,000 employees at its U.S. stores.

Amazon on Thursday also said it would launch three new skills training programs focused on teaching employees about information technology, cloud computing, and user experience design. The company said it aims to provide educational funding and skills training to some 300,000 workers over the next four years, or about 30% of the company’s U.S. workforce.

Bezos pledges $203.7 million more in grants for Earth Fund

By Sophie Alexander | Bloomberg

Jeff Bezos promised to give away $203.7 million by the end of the year as part of the Bezos Earth Fund, his $10 billion commitment to fight climate change, which he started last year.

Bezos is immediately donating $73.7 million of the total to 12 organizations, with the rest being granted by the end of the year to groups supporting the Justice40 Initiative, according to a statement Wednesday from the fund. The Justice40 Initiative is an effort by the Biden administration aimed at fighting climate change and supporting disadvantaged communities.

The gifts will bring the Bezos Earth Fund’s total donations to just under $1 billion, with 2020’s gifts totaling $791 million to 16 organizations. Bezos has promised to distribute the $10 billion by 2030.

“This funding is just the next step in the Bezos Earth Fund’s commitment to creating catalytic change during this decisive decade,” Andrew Steer, the group’s president, said in the statement.

Bezos recently unloaded $172 million worth of Amazon.com Inc. stock, which was designated as a charitable contribution, according to filings with the Securities and Exchange Commission. Bezos, 57, has been on a giving spree recently, with a pair of philanthropic announcements sandwiching his trip to space.

Days before completing an 11-minute flight into space through his company Blue Origin, Bezos announced a $200 million gift to the Smithsonian National Air and Space Museum, with the bulk of it going to establish the Bezos Learning Center. After the trip, Bezos said he would give $100 million each to Van Jones, a CNN political contributor and founder of Dream Corps, and chef Jose Andres, co-founder of World Central Kitchen, which helps feed people in disaster-stricken regions.

Bezos is worth $202.3 billion, according to the Bloomberg Billionaires Index. His ex-wife, MacKenzie Scott, has a $62.1 billion fortune, even after donating more than $8 billion in the past 14 months.

Going to a wedding? Newlyweds will take cash, the new pandemic king

By Daniela Sirtori-Cortina | Bloomberg

After the first year of the pandemic put many nuptials on ice, Americans started getting married with a vengeance when summer arrived.

Even now, couples are still rushing to tie the knot — albeit with additional precautions given the latest infection wave.

Were it any other time, this matrimonial flood would have family and friends scrambling to buy gifts, a prospect made worse this year due to supply-constrained retailers and pumped-up prices.

But there’s a silver lining to this race to the altar that may make your task a little easier: all newlyweds seem to want is cash.

About 80% of couples on wedding registry and planning website Zola receive money, according to the company. Meanwhile, roughly 30% more cash gifts were created and given via the online platform The Knot between January and July, compared to the same period two years ago, the company said. Honeymoon funds are the most popular ask, but virus-weary couples are also requesting money to pay for romantic dinners, massages and even fertility treatments.

“The pandemic has made society in general rethink priorities,” said Kristen Maxwell Cooper, vice president at The Knot. An experiences-over-material-things mentality is “resonating with more and more people.”

Covid-19 helped accelerate the adoption of cash gifts, which were already gaining popularity as people became more comfortable with asking for money. After all, millennials and Generation Z came of age in the GoFundMe era, and thus are less likely than their elders to see crowdfunding as unseemly.

Newlyweds Carl Chen and Gillian She pose for pictures as Mark Chen takes pictures while holding on to their dog, Daikon, at the Old Orange County Courthouse in Santa Ana, CA, on Friday, January 8, 2021. (Photo by Jeff Gritchen, Orange County Register/SCNG)

There’s also the fact that Americans are getting married older, which often means couples already have enough of the household items that typically fill a wedding registry.

Moreover, Americans in their 20s and 30s are grappling with ever-larger student loans as salaries fail to keep pace with the skyrocketing tuition charged for higher education. Finding ways to shave off some of that debt is exceptionally important to couples hoping to get a mortgage with favorable terms.

“As we see couples think about their financial goals and think about their future together, they see cash as a more enticing, pragmatic option,” Maxwell Cooper said. “They may not need wedding China. They made not need new sheets. But they have student loan debt.”

Some are using cash gifts to pay for the wedding itself, a trend that was taking shape before anyone heard of the novel coronavirus. Back in 2019, Jenn and Jillian DeSimone of New York City essentially crowdsourced their nuptials. Friends and family chipped in to offset the cost of items ranging from the wedding dress to ice cream served for dessert. The couple also set up a student loan fund.

The contributions helped smooth the way for their first years of marriage. The couple received a total of $10,000 in cash gifts, of which about half went to student loans, helping Jenn pay off all of her debt. Now they own a house and are expecting a baby.

“We didn’t need anything for our home or for ourselves, so cash was the best gift we could get,” Jillian said. “We were so moved by all the support. Way more meaningful than a set of dishes.”

As partners hunkered down during the pandemic, requests to pay for lockdown-related goods and services proved popular, with couples creating funds for meal-delivery kits and renovation projects. Lowe’s Home Improvement gift cards were among the most-requested items on that front, according to wedding website Joy.

Newlyweds saw “the importance of making their homes a functional space for working, living and relaxing in,” Joy communications and marketing director Katie Brownstein said.

Overall, wedding guests are proving receptive to cash registries because gift-givers want to ensure their presents will be put to good use, etiquette consultant Elaine Swann said. That, as any couple who’s been married for decades can attest, isn’t always the case for silver tea sets or Margarita makers. Still, asking for and granting money involves a delicate social dance.

For starters, couples should consider making the request via an online platform such as a wedding website, Swann said, rather than “tarnish the imagery of the physical invitation with an ask for money.” It’s also key to provide an electronic way to submit the contribution, as securing checks during a reception can quickly turn into a nightmare.

She also suggests outlining a specific amount and purpose for the gift, and sharing why it carries significance. Swann recalls attending a wedding in which the groom was headed to a doctoral program. In that case, an ask for his educational fund “was well received.”

Emily Forrest, communications director at Zola, echoed Swann’s sentiment. “We’ve found that guests are also most likely to contribute to cash funds when there’s a very specific purpose designated,” Forrest said. “So it’s a smart move all around.”

The average size of cash gifts hovers around $150, according to Joy, though the amount declines when it’s a destination wedding. No matter the amount, Swann added, “not only will your gift be enjoyed, but it will be used.”