It\u2019s jobs Friday, and a convenient time to remember why unemployment is important for the Federal Reserve\u2014and how it isn\u2019t.<\/p>\n
The macroeconomic theory is that low unemployment allows workers to bid up their wages, which is inflationary. Hence the Fed would like to see more slack in the labor market as it tries to bring down inflation.<\/p>\n
<\/strong>That isn\u2019t quite what\u2019s happening. Inflation has also slowed dramatically since its peak, even without a big rise in unemployment. And research has suggested the causes of the worst inflation in a generation have little to do with wage growth, at least so far.<\/p>\n Figuring out the labor market is one of the Fed\u2019s tougher puzzles at the minute. One idea is that companies are hoarding labor\u2014hanging on to workers they would normally let go because of concern it will be hard to hire them back. <\/p>\n Another possibility is that higher rates might reduce job vacancies enough to keep a lid on wages by discouraging people from switching jobs, even if the overall unemployment rate stays low. This is the thesis of the soft landing, whereby the Fed beats inflation without causing a recession or a spike in joblessness. It\u2019s also why data this week showing a jump in job openings were a little scary, because that suggests the Fed has more work to do.<\/p>\n But really, the labor market is still a puzzle. So when the Fed says it\u2019s data dependent, it\u2019s probably putting more weight on other data\u2014for example, the recent big jump in bond yields.<\/p>\n San Francisco Fed President Mary Daly said yesterday the yield spike may mean the central bank doesn\u2019t have to raise rates again this year. That\u2019s probably a more reliable source for the Fed\u2019s intentions than jobs figures.<\/p>\n \u2014Brian Swint<\/em><\/p>\n *** Join Barron\u2019s ideas editor Matt Peterson today at noon for a conversation on geopolitics and risk with Ed Price, principal for geopolitical forecasting at the consultancy Ergo. Sign up here.<\/em><\/p>\n Exxon Mobil is close to announcing a significant deal to buy Pioneer Natural Resources for about $60 billion, The Wall Street Journal reported.<\/p>\n What\u2019s Next:<\/strong> Acquiring Pioneer would make Exxon the dominant player in the U.S. Permian in Texas and New Mexico. Pioneer\u2019s acreage in the Midland Basin, the eastern part of the Permian, has some of the largest untapped fields left in the U.S.<\/p>\n \u2014Brian Swint<\/em><\/em><\/p>\n Elon Musk skipped scheduled testimony to the Securities and Exchange Commission in September, prompting the regulator to sue in a California federal court to compel the billionaire owner of X and What\u2019s Next:<\/strong> Musk faces several other investigations not related to Twitter, or X. The Wall Street Journal reported that Manhattan federal prosecutors and the SEC are looking at whether Tesla company money was used on a project described internally as a house for Musk. <\/p>\n \u2014Liz Moyer<\/em><\/em><\/em><\/em><\/p>\n Sales of What\u2019s Next:<\/strong> Constellation\u2019s CEO Bill Newlands told analysts that he sees opportunities to increase sales, especially as retailers begin resetting the shelf space they allocate to different brands next spring. That resetting process can give more space to brands that have lately been selling better.<\/p>\n \u2014Janet H. Cho<\/em><\/em><\/p>\n American consumers are expected to spend a record $221.8 billion online over the holiday shopping season this year, up 4.8% from last year\u2019s holidays, according to Adobe Analytics. And for the first time, a majority of people will shop online using smartphones and other mobile devices.<\/p>\n What\u2019s Next:<\/strong> Cyber weekend, running from Thanksgiving through that Monday, is expected to drive $37.2 billion in online spending, up 5.4% from last year. That Monday\u2019s spending alone is expected to reach a record $12 billion. <\/p>\n \u2014Janet H. Cho<\/em><\/em><\/em><\/em><\/p>\n Powerball Jackpot Surges to $1.4 Billion, But Interest Rates Bite<\/h2>\n The multistate Powerball jackpot has ballooned to $1.4 billion after no one matched all six numbers Wednesday night. The next chance for someone to become an overnight billionaire is Saturday night. The lump-sum payout amounts have shrunk in recent drawings, however. Interest rates are to blame.<\/p>\n What\u2019s Next:<\/strong> Saturday\u2019s grand prize would be the third-highest Powerball lottery jackpot ever and the fifth-largest among U.S. lottery jackpots. <\/p>\n \u2014Janet H. Cho<\/em><\/em><\/em><\/p>\n <\/p>\n Do you remember this week\u2019s news? Take our quiz below to test your knowledge. Tell us how you did in an email to thebarronsdaily@barrons.com.<\/em><\/p>\n 1. California Republican Rep. Kevin McCarthy lost his job as House Speaker after a rebellion within his caucus led to a full vote to have him removed, the first for a sitting speaker. When was the last time such a vote was held (but ultimately defeated)?<\/p>\n a. 1900<\/p>\n b. 1910<\/p>\n c. 1920<\/p>\n d. 1930<\/p>\n 2. Swiss pharmaceutical company Novartis has completed the spinoff of a business making generic and biosimilar drugs, allowing it to focus on drug development. What is the name of the new company?<\/p>\n a. Sandoz<\/p>\n b. Novdoz<\/p>\n c. Genartis<\/p>\n d. None of the above<\/p>\n 3. Mortgage rates are climbing, with the average 30-year fixed-rate loan at 7.49%, according to Freddie Mac. That\u2019s the highest they\u2019ve been since when?<\/p>\n a. 1996<\/p>\n b. 1998<\/p>\n c. 2000<\/p>\n d. 2002<\/p>\n 4. Birkenstock is moving forward with its initial public offering, filing updated paperwork this week saying the sandal-maker aims to list at around $44 to $49 a share. After initially seeking an $8 billion valuation, the new filing shows it could seek a valuation of as much as what?<\/p>\n a. $8.2 billion<\/p>\n b. $9.2 billion<\/p>\n c. $10.2 billion<\/p>\n d. $11.2 billion<\/p>\n 5. The Powerball lottery jackpot total surged to $1.4 billion after no one claimed the top prize on Wednesday. The grand prize for the next drawing on Saturday night would rank where among U.S. lottery jackpots in history?<\/p>\n a. Second<\/p>\n b. Third<\/p>\n c. Fourth<\/p>\n d. Fifth<\/p>\n Answers: 1(b); 2(a); 3(c); 4(b); 5(d)<\/p>\n<\/h4>\n
***<\/h4>\n
Exxon Set to Buy Shale Driller Pioneer in $60 Billion Deal<\/h2>\n
\n
***<\/h4>\n
SEC Sues Elon Musk for Testimony in Twitter Investigation<\/h2>\n
\n Tesla
\n to appear. The SEC said attempts to negotiate a meeting have been met with a \u201cblanket refusal.\u201d<\/p>\n\n
***<\/h4>\n
Constellation\u2019s Modelo Keeps Growing After Bud Light Controversy<\/h2>\n
\n Constellation Brands
\n \u2019 Modelo Especial beer, which dethroned Bud Light as America\u2019s top-selling beer by dollar sales in May, have continued accelerating. The alcoholic beverage maker said second-quarter beer sales rose 12% from last year, and raised its full-year beer-sales projections.<\/p>\n\n
\n Anheuser-Busch InBev
\n ran into difficulty this year from Bud Light\u2019s controversial promotion with transgender influencer Dylan Mulvaney. That sparked a consumer boycott of Bud Light<\/strong> that boosted other beer brand sales. <\/p>\n<\/li>\n***<\/h4>\n
Online Holiday Spending Seen Rising, Using Mobile Devices<\/h2>\n
\n
***<\/h4>\n
\n
\n
***<\/h4>\n