American inflation ahead
A recent inflation reading has returned prices to the public eye. In January, America’s “core” consumer-price index, which strips out volatile food and energy costs, jumped by 5.5pc at an annualised rate. In response, Larry Summers, a former treasury secretary, called this the “riskiest period for inflation policy since the early Biden administration”, after which inflation rose to its highest in four decades. Since Donald Trump’s election, the median expectation for price growth over the next year has surged by 1.7 percentage points, a recent consumer survey suggests. That is the joint-largest three-month rise since 1979. These concerns appear to be driven by Mr Trump’s tariff threats. Lots of Americans seem to be taking the president at his word when he warns that “prices could go up somewhat short term. Such sentiments are often self-fulfilling and a partisan divide has emerged about long-term economic expectations, too.
(Adapted from “American Inflation Looks Increasingly Worrying,” by The Economist, published on February 18, 2025)
Fewer Americans are quitting jobs
The US job market is still solid. But more workers are staying put, because the chance to trade up to a better job is rarer. Americans quit 39.6m jobs in 2024, down 11pc from the year before and down 22pc from a recent peak in 2022, according to recent Labour Department data. The share of employees who quit their jobs each month has fallen below the prepandemic level, and some economists expect more decreases ahead. It wasn’t long ago that a revved-up US labour market kicked off a frenzy of job switching. People jostled for better pay, better perks and more flexibility. Businesses obliged because they were eager for workers as the economy reopened from the pandemic. The supercharged effect of the pandemic largely wore off this past summer, ending the hottest job market in a generation.
(Adapted from “Fewer Americans Are Quitting Their Jobs,” by Matt Grossman, published on February 4, 2025, by the Wall Street Journal)
The right ‘fit’ for the job
You try not to take rejection personally when looking for a job, but that’s tough to do as more companies have begun adding personality tests to their hiring screens in the US. Just ask Nick Malik, who’s been given online personality assessments by three prospective employers in recent months while applying, unsuccessfully so far, for senior-level engineering roles. “I’ve gotten some really weird questions,” he says. “I understand the desire to know a little bit about your applicants, but I don’t think running their answers by a bot is very effective.” Mr Malik isn’t sure whether his test results, age (he’s 59), or something else is holding him back. But his experience reflects companies’ fixation on “fit” — the biggest buzzword in hiring.
(Adapted from “How Flunking A Personality Test Can Cost You Your Dream Job,” by Callum Borchers, published on February 12, 2025, by the Wall Street Journal)
Defence-tech in Silicon Valley
In its early days in the mid-20th century, Silicon Valley created reconnaissance equipment for spy planes and semiconductors for missiles. But then the peaceniks took over and for decades defence became a dirty word. Several developments have since stiffened the sinews. One is the war in Ukraine. Another is America’s deepening rivalry with China. Most alluring, perhaps, is the sweet smell of financial success. SpaceX has become the most valuable private firm in America, worth $350bn. Palantir, a supplier of software to Western armies and spooks, has a market value of more than $250bn, more than a trio of traditional defence contractors combined. But less remarked upon is how the defence-tech boom challenges core tenets of the venture industry as hardware and patriotism have become all the rage in Silicon Valley.
(Adapted from “Defence Tech Is Blowing Up Silicon Valley’s Beliefs,” by The Economist, published on February 13, 2025, by The Economist)
Published in Dawn, The Business and Finance Weekly, February 24th, 2025
