Economics

The vacation rental company Airbnb forecast third-quarter revenue below Wall Street estimates on Tuesday and reported a lower second-quarter profit, as it flagged weakening demand from US customers.

Shares of the company were down about 12% after the bell.

Domestic travel in the United States has been pressured since the start of the year as more Americans grow cautious about travel spending amid growing economic uncertainty.

The San Francisco-based company reported quarterly profit of $555m compared to $650m last year.

Google violated antitrust laws as it built an internet search empire, a federal judge ruled on Monday in a decision that could have major implications for the way people interact with the internet.

Judge Amit Mehta found that Google violated section 2 of the Sherman Act, a US antitrust law. His decision states that Google maintained a monopoly over search services and advertising.

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The ruling is one of the largest antitrust decisions in decades, capping off a case that pitted the justice department against one of the world’s most valuable companies. It was also part of a broader push in recent years from the Department of Justice and Federal Trade Commission, as well as European regulators, to scrutinize big tech companies for allegedly monopolistic practices.

Stock markets across Europe and Asia tumbled on Monday, spooked by fears that the US economy is heading for a slowdown.

In London, the FTSE 100 index opened 2.3% lower while the Euronext 100 tumbled by 3.5%.

They followed sharp falls across Asia with Japan's Nikkei 225 dropping 12.4% or 4,451 points in the biggest fall by points in history.

It follows weak jobs data in the US on Friday which sparked concerns about the world's largest economy.

Meanwhile, the yen has been strengthening against the US dollar since the Bank of Japan raised interest rates last week, making stocks in Tokyo more expensive for foreign investors.

Stock markets in Taiwan, South Korea, India, Australia, Hong Kong and Shanghai all tumbled.

Chevron, the oil giant that was founded in California some 145 years ago, said Friday that it is relocating its headquarters from the Bay Area to Houston.

The announcement, which also included news of a reshuffling of senior management, was not a complete surprise given that the second largest U.S. oil company, based in San Ramon, has been battling with California over its aggressive climate change policies.

Chevron, in its statement, said the move would allow the company to “co-locate with other senior leaders and enable better collaboration and engagement with executives, employees, and business partners.” Chevron already has about 7,000 employees in the Houston area.

After losses, the chipmaker is cutting $10 billion in costs.

Intel’s on a long, long road to recovery, and over 15,000 workers will no longer be coming along for the ride. The chipmaker just announced it’s downsizing its workforce by over 15 percent as part of a new $10 billion cost savings plan for 2025, which will mean a headcount reduction of greater than 15,000 roles, Intel tells The Verge. The company currently employs over 125,000 workers, so layoffs could be as many as 19,000 people.

Intel will reduce its R&D and marketing spend by billions each year through 2026; it will reduce capital expenditures by more than 20 percent this year; it will restructure to “stop non-essential work,” and it’ll review “all active projects and equipment” to make sure it’s not spending too much.

The company’s same-store sales fell 3% in the quarter, fueled by a 5% decline in transactions.

Amazon distributed hundreds of thousands of hazardous products sold by third-parties through the e-commerce giant's platform and is responsible for recalling them, a federal agency has ruled.

The U.S. Consumer Product Safety Commission on Tuesday issued a decision and order against Amazon, determining the retailer was a "distributor" of products that are defective or fail to meet federal safety standards. 

The company, which rang up $574.8 billion in revenue in 2023, is legally responsible for the recall of more than 400,000 products, including faulty carbon monoxide detectors, hairdryers without electrocution protection and kids' sleepwear that violates federal flammability standards, the agency said in a news release.

• Delta has hired prominent attorney David Boies to pursue potential damages from CrowdStrike and Microsoft after a mass outage earlier this month, CNBC’s Phil Lebeau reported on Monday.
• CrowdStrike shares were trading lower in extended trading. 
• The outages cost Delta an estimated $350 million to $500 million.

• McDonald’s executives acknowledged during an earnings call Monday that diners consider the company’s prices too high, and said they are taking a “forensic approach” to evaluating prices.
• Amid a broader consumer pullback and increasing prices, fast-food chains have had a difficult time drawing in lower-income diners.
• The company’s recent $5 value meal offering was initially successful in bringing lower-income diners back to stores but has yet to translate into higher sales, company executives said.

With younger labor in short supply, aging workers often find themselves pulling double—or triple—duty to keep towns afloat

Non-paywall link

It turns out that Chipotle customers were right in their complaints about skimpy portion sizes at some locations. On Wednesday, CEO Brian Niccol disclosed that a company investigation found that 1 in 10 of its restaurants were too meager with their servings.

Chipotle looked into the issue after rumors of shrunken portions circulated on social media, including from influential food reviewers on TikTok who shared images of small helpings. Some customers claimed they got bigger meals when they filmed workers putting their orders together. 

The issue came to a head after two years of bruising inflation has made consumers increasingly cost-conscious, with many grousing about surging prices at restaurants. The smaller portions at Chipotle were especially hard to swallow after the restaurant raised prices in recent years, some customers said on social media. 

Tech-focused Nasdaq retreats 3.6% and S&P 500 also down in wake of lacklustre results from big-tech companies

Wall Street suffered its worst day of trading in 19 months as disappointment around earnings from Tesla and Google challenged the recent big-tech rally.

The benchmark S&P 500 index dropped 2.3% as a sell-off triggered its biggest single-day fall since December 2022.

The technology-focused Nasdaq retreated 3.6%, its largest single-day decline since October 2022.

Shares in Tesla sank 12% after it reported a 45% slump in quarterly profits amid discounting by electric carmakers. Alphabet, the owner of Google and YouTube, also fell 5% as investors scrutinized a slowdown in advertising growth.

The same percentage of employed people who worked remotely in 2023 is the same as the previous year, a survey found

Don’t call it work from home any more, just call it work. According to new data, what once seemed like a pandemic necessity has become the new norm for many Americans.

Every year, the Bureau of Labor Statistics (BLS) releases the results of its American time use survey, which asks Americans how much time they spend doing various activities, from work to leisure.

The most recent survey results, released at the end of June, show that the same percentage of employed people who did at least some remote work in 2023 is the same percentage as those who did remote work in 2022.

In other words, it’s the first stabilization in the data since before the pandemic, when only a small percentage of workers did remote work, and a sign that remote work is here to stay.

The IRS announced Thursday that it has collected $1 billion in back taxes from high-wealth tax cheats — a milestone meant to showcase how the agency is making use of the money it received as part of the Biden administration’s signature climate, health care, and tax package signed into law in 2022. 

Part of the push for public awareness of high-wealth tax collections is a growing recognition by agency officials that a potential Republican takeover of the White House and Congress could mean massive future budget cuts for the IRS. Showing the public how much work the IRS is getting done is meant to give the much-maligned agency a more sympathetic image. 

As part of that effort, last year the IRS launched a series of initiatives aimed at pursuing high-wealth individuals who have failed to pay their tax debts. The IRS says the campaign is focused on taxpayers with more than $1 million in income and more than $250,000 in recognized tax debt.

The Federal Reserve now finds itself in a bind as to whether to cut rates soon or leave them elevated to further slow inflation.

Amid signs of a weakening labor market, the Federal Reserve now finds itself in a bind: If it cuts interest rates too soon, it could risk reigniting the price increases that have bedeviled the post-pandemic economy. But if it keeps rates elevated, the job security of millions of Americans could be further jeopardized.

The Consumer Price Index for the month of June, due to be released by the Bureau of Labor Statistics this morning at 8:30 a.m., is expected to offer further insight into the Fed's potential next moves.

The unemployment rate now stands at 4.1%, its highest point of the post-pandemic period and a level not seen since February 2018, excluding the coronavirus unemployment surge in 2020.

A vast swath of the US economy is showing signs of weakness as unemployment rises to its highest point in more than two years.

Consumer demand seems to have tapered off so far this summer, according to surveys of American businesses that sell any kind of service to make a profit, ranging from restaurants to dental clinics. That weakness is also evident in the latest spending figures — a far cry from last year’s lucrative summertime spending spree when Americans shelled out for films and high-profile concerts.

The Institute for Supply Management’s latest monthly survey that gauges economic activity in the services sector showed that so-called new orders and overall economic activity unexpectedly slipped into contraction territory last month. The headline index fell to a reading of 48.8 in June from 53.8 in May as the new orders sub-index saw an even steeper decline, down to 47.3 from 54.1. (A reading above 50 indicates expansion while anything below that threshold points to a contraction.)

This apparent slowdown in demand, if it persists for long enough, could translate into service-providing businesses hiring at a slower pace and possibly slashing jobs. The overwhelming majority of employment in the United States is considered service-providing, specifically 86% of the 158.6 million total US jobs as of June.

Boeing has agreed to plead guilty to a criminal fraud conspiracy charge after the US found the company violated a deal meant to reform it after two fatal crashes by its 737 Max planes that killed 346 passengers and crew.

The Department of Justice (DoJ) said the plane-maker had also agreed to pay a criminal fine of $243.6m (£190m).

However, the families of the people who died on the flights five years ago have criticised it as a "sweetheart deal" that would allow Boeing to avoid full responsibility for the deaths. One called it an "atrocious abomination".

The settlement must now be approved by a US judge.