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Another 275,000 women dropped out of the U.S. labor force in January



Another 275,000 women dropped out of the U.S. labor force in January

The pandemic forced another 275,000 women out of the U.S. labor force in January, worsening the catastrophic employment crisis for working women.

Women accounted for almost 80% of U.S. adults who stopped working or looking for work last month, according to an analysis of Friday’s jobs report by the National Women’s Law Center. More than 2.3 million women have now left the labor force since last February. (The pandemic has had a lesser impact on men, even though they outnumber women in the U.S. labor force; nearly 1.8 million men have stopped working or looking for work since February 2020, according to the NWLC.)

Working women have now lost more than three decades of labor force gains in less than a year, as we report in the new issue of Fortune. The ongoing employment crisis, which is closely aligned with a widespread caregiving crisis, has especially hurt the women of color who disproportionately work in restaurants, retail, education, health care, and other “essential” industries. These workers, who are often paid very low wages, rarely have the option of working remotely and trying to schedule their paid work around remote learning and other childcare responsibilities.

“For this entire time, women of color have been bearing the brunt of this crisis,” says Jasmine Tucker, director of research at the NWLC. “If white men’s unemployment rates were as high as Black and Latina women’s, we would have done something about it already.”

While the overall unemployment rate fell to 6.3% in January, it rose to 8.5% for Black women age 20 and older, the U.S. Labor Department reported Friday. The unemployment rate remained even higher, if slightly better than in December, for Latina women (8.8%)—but fell to a better-than-average 5.5% for white men and 5.1% for white women.

The latest government jobs report, which reflects last month’s presidential transition, also underscores just how much work remains for President Joe Biden to address the pandemic and its ongoing economic fallout. The halting rollout of COVID-19 vaccines has yet to allow widespread school reopenings, while the ongoing shutdowns of bars and restaurants and other employers dependent on in-person customers have led many such businesses to close up shop permanently. Employers in leisure and hospitality, retail, and health care all shed jobs in January, the government reported Friday.

The U.S. economy gained a net 49,000 jobs in January—and, in a reversal from last month’s headlines, women as a group accounted for all of those gains. But the middling uptick reflected little actual progress for the U.S. economy or for women’s employment. Also on Friday, the government revised its earlier estimates of December job losses, concluding that the U.S. economy had actually lost a net 227,000 jobs that month—even worse than the 140,000 losses it initially reported in January.

Women as a group are now estimated to have lost 196,000 jobs in December, 25.6% more than the 156,000 losses initially reported. But since the government now estimates that men as a group also lost jobs in December, women no longer account for 100% of December’s losses, according to the NWLC’s analysis of the revised data. Now they account for 86.3% of that month’s employment damage.

“It’s bleak. It’s all just bleak,” Tucker says. “There’s pain across the board, but women are definitely bearing the brunt.”

Labor economists and policy experts are hopeful that President Biden’s sweeping $1.9 trillion COVID-19 relief plan, and its proposals around paid leave and childcare support, could help alleviate some of this pain. The plan has yet to pass Congress; much of it advanced in an early-Friday Senate vote, although without support for a federal minimum-wage increase that would disproportionately affect women of color.

But Tucker is one of many experts worrying that the long-term economic damage to women is already done. “People think that recessions are temporary, but they’re not. The harm of this extends beyond when you have lost your job,” she says.

Some economists estimate that the pandemic will cause the gender wage gap to widen by five percentage points. And Tucker fears that women of color will, again, be particularly vulnerable to lowered wages and worsened job quality when the pandemic ends and employers do start hiring again.

“Employers can pick and choose who they can hire back, and I don’t think we’re going to like who they’re going to pick,” she says. “It’s not going to be women of color.”

More on the most powerful women in business from Fortune:

  • 5 steps the U.S. government could take to tackle the crisis facing working women
  • Treasury Secretary Janet Yellen: The most prepared woman in Washington
  • Nearly 80% of the 346,000 workers who vanished from the U.S. labor force in January are women
  • The pandemic has derailed women’s careers and livelihoods. Is America giving up on them?
  • What’s keeping men from doing more at home? Actual caregiving experience


Coinbase’s near-term outlook is ‘still grim’, JPMorgan says, while BofA is more positive about firm’s ability to face crypto winter



Coinbase's near-term outlook is 'still grim', JPMorgan says, while BofA is more positive about firm's ability to face crypto winter

Coinbase is well positioned to successfully navigate this crypto winter and take market share, Bank of America said in a research report Tuesday. It maintained its buy recommendation following the exchange’s second-quarter results.

The results warrant “a muted stock reaction,” the report said. Net revenue of $803 million was below the bank’s and consensus estimates, while its adjusted $151 million loss before interest, tax, depreciation and amortization was better than the street expected. Importantly, the company remains “cautiously optimistic” it can reach its goal of no more than $500 million of adjusted EBITDA loss for the full year, the report added.

Coinbase shares fell almost 8% in premarket trading to $80.74.

Bank of America notes that Coinbase had no counterparty exposure to the crypto insolvencies witnessed in the second quarter. The company also has a “history of no credit losses from financing activities, holds customer assets 1:1, and any lending activity of customer crypto is at the discretion of the customer, with 100%+ collateral required.” These rigorous risk-management practices will be a “positive long-term differentiator” for the stock, the bank said.

JPMorgan said Coinbase had endured another challenging quarter, while noting some positives.

Trading volume and revenue were down materially. Subscription revenue was also lower, but would have been much worse were it not for higher interest rates, it said in a research report Wednesday.

The company is taking steps on expense management, and in addition to the June headcount reductions, is scaling back marketing and pausing some product investments, the note said.

The bank says the company’s near-term outlook is “still grim,” noting that the exchange expects a continued decline in 3Q 2022 monthly transacting users (MTUs) and trading volumes, but says Coinbase could take more “cost actions” if crypto prices fall further.

JPMorgan is less optimistic than Bank of America about the company in the near term, saying pressure on revenue from falling crypto markets will have a negative impact on the stock price. Still, it sees positives including higher interest rates, from which the firm will generate revenue. It also sees opportunities for the exchange to grow its user base, leveraging almost $6 billion of cash. The surge in crypto prices in July, and the forthcoming Ethereum Merge are also seen as positive catalysts, it added.

The bank maintained its neutral rating on the stock and raised its price target to $64 from $61.

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Elon Musk sold $6.9B in Tesla stock in case he’s forced to buy Twitter



Elon Musk sold $6.9B in Tesla stock in case he's forced to buy Twitter

Elon Musk sold $6.9 billion of his shares in Tesla Inc., the billionaire’s biggest sale on record, saying he needed cash in case he is forced to go ahead with his aborted deal to buy Twitter Inc.

“In the (hopefully unlikely) event that Twitter forces this deal to close *and* some equity partners don’t come through, it is important to avoid an emergency sale of Tesla stock,” Musk tweeted late Tuesday after the sales were disclosed in a series of regulatory filings. 

Asked by followers if he was done selling and would buy Tesla stock again if the $44 billion deal doesn’t close, Musk responded: “Yes.”

Tesla’s chief executive officer offloaded about 7.92 million shares on Aug. 5, according to the new filings. The sale comes just four months after the world’s richest person said he had no further plans to sell Tesla shares after disposing of $8.5 billion of stock in the wake of his initial offer to buy Twitter.  

Musk last month said he was terminating the agreement to buy the social network where he has more than 102 million followers and take it private, claiming the company has made “misleading representations” over the number of spam bots on the service. Twitter has since sued to force Musk to consummate the deal, and a trial in the Delaware Chancery Court has been set for October. 

In May, Musk dropped plans to partially fund the purchase with a margin loan tied to his Tesla stake and increased the size of the equity component of the deal to $33.5 billion. He had previously announced that he secured $7.1 billion of equity commitments from investors including billionaire Larry Ellison, Sequoia Capital, and Binance. 

“I’ll put the odds at 75% that he’s buying Twitter. I’m shocked,” said Gene Munster, a former technology analyst who’s now a managing partner at venture-capital firm Loup Ventures. “This is going to be a headwind for Tesla in the near term. In the long term, all that matters is deliveries and gross margin.”

At the weekend, Musk tweeted that if Twitter provided its method of sampling accounts to determine the number of bots and how they are confirmed to be real, “the deal should proceed on original terms.” 

Musk, 51, has now sold around $32 billion worth of stock in Tesla over the past 10 months. The disposals started in November after Musk, a prolific Twitter user, polled users of the platform on whether he should trim his stake. The purpose of the latest sales wasn’t immediately clear.  

Tesla shares have risen about 35% from recent lows reached in May, though are still down about 20% this year. 

With a $250.2 billion fortune, Musk is the world’s richest person, according to the Bloomberg Billionaires Index, but his wealth has fallen around $20 billion this year as Tesla shares declined.    

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The rent is too d*mn high for Gen Z: Younger generations are ‘squeezed the most’ by higher rents, BofA says



The rent is too d*mn high for Gen Z: Younger generations are 'squeezed the most' by higher rents, BofA says

Most of Gen Z is too young to remember the 2010 New York gubernatorial candidate Jimmy McMillan.

But over a decade later, they would probably agree with his signature issue (and catchphrase): the rent is too damn high.

This July, median rent payments were 7.4% higher than during the same period last year, according to a Bank of America report released Tuesday. 

The national median price for a one-bedroom apartment has been hitting new highs nearly every month this summer. It was $1,450 for July, according to rental platform Zumper. In the country’s largest city, New York, average rent exceeded a shocking $5,000 a month for the first time ever in June. 

But inflation in the rental market hasn’t hit each generation equally, and no one is getting squeezed harder by the higher monthly payments as Gen Z. Those born after 1996 have seen their median rent payment go up 16% since last July, compared to just a 3% increase for Baby Boomers, BofA internal data shows. 
“Younger consumers are getting squeezed the most by higher rent inflation,” BofA wrote.

The great rent comeback

Early in the pandemic, landlords slashed rents and gave significant COVID discounts to entice tenants to stay instead of leaving urban areas. Once those deals started expiring in 2021, many landlords suddenly raised payments once again, sometimes asking for over double their pandemic value. 

Young people across the board have been hit hard, and rent burdens compared to age can be seen even within a single generation. Younger millennials had their median rent payment grow 11% from last year, while the median payment for older millennials rose 7%. Gen X experienced a 5% median rent increase, according to BofA. 

It’s not a surprise, then, that Gen Z feels so strapped for cash. The majority of young people, 61%, said they want to receive their wages daily instead of twice a week, a practice typically reserved for workers living paycheck to paycheck, according to a report from the Center for Generational Kinetics, which specializes in research across the generations. Rising rent inflation has even priced nearly a third of Gen Zers out of the apartment search altogether. Around 29% of them have resorted to living at home as a “long-term housing solution,” according to a June survey from personal finance company Credit Karma.

It’s no wonder—the rent really is too high.

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