Raphael Stevens

Federal data suggests the job market is cooling but still historically strong.
Job openings fell to the lowest level since May 2021, according to a report from the Bureau of Labor Statistics.
But the number of openings and voluntary quits by workers are above pre-pandemic levels. The national layoff rate is also near a record low despite job cuts by major technology firms.
Given the gradual cooling, though, workers may wish to approach a job hunt with a bit more caution, experts said.

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The job market continued a gradual cooling in February but largely remains advantageous for workers, according to labor data issued Tuesday.
Job openings, a barometer of employer demand for workers, fell by 632,000 to 9.9 million in February — the lowest level since May 2021, according to the Bureau of Labor Statistics.

There were about 1.7 job openings per unemployed worker, the lowest ratio since November 2021. However, the number of open jobs is still significantly above its pre-pandemic level. Prior to 2021, job openings had never before reached 8 million.
“The job market is cooling,” said Daniel Zhao, lead economist at Glassdoor, a career site. “It’s just cooling from a very high temperature. It’s cooling from white hot to red hot.”
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Meanwhile, about 4 million workers quit their jobs in February. While down from the peak of over 4.5 million in November 2021, the level is about 400,000 higher than the pre-pandemic high bar.
Most people who voluntarily leave their job do so for new employment; the measure is therefore a proxy for workers’ sentiment about their labor prospects.

Layoffs also remain historically low across the broad U.S. economy despite recent headlines about job cuts in the technology sector.
Indeed, by any measure, the job market is hotter than it was in 2019 — which itself was known as a job seeker’s market characterized by factors such as low unemployment and strong wage growth, Zhao said.
Despite that historical strength, workers looking for a new job may be wise to proceed with a bit more caution, labor experts said.

‘I would tell workers not to panic quite as much’

Job openings and quits surged to record levels in early 2021 as the U.S. economy reopened, consumers unleashed pent-up demand to spend money, and businesses began a flurry of hiring.
Wage growth spiked to the highest level in decades as job seekers enjoyed ample bargaining power. Layoffs declined to record lows as employers struggled to hold on to their staff.
However, the Federal Reserve has raised interest rates aggressively to cool the U.S. economy and tame persistently high inflation.
That gradual cooling seems to be playing out in the labor market. Big technology companies, for example, have cut tens of thousands of jobs. However, those layoffs don’t seem indicative of the health of the broader economy, according to labor experts.
“I think the headlines would make workers very panicky and nervous about their job security. And I would tell workers not to panic quite as much,” said Julia Pollak, chief economist at ZipRecruiter. “Historically this is still a job seeker’s market.”
“Workers are experiencing unprecedented job security — and not just job security, but choice,” Pollak added.
That said, job seekers are likely still feeling a slowdown even if the labor market is strong, Zhao said.
For example, a worker today might not have as many job offers, may get a smaller pay bump when switching jobs, or might find the job search takes a bit longer relative to the dynamic in 2021.
It’s also unclear how the recent turmoil in the banking sector may affect the labor market and economy.
“It’s a good reminder that people can still find a better job in today’s job market,” he said of the labor data issued Tuesday. “But it’s important to do your research as a job seeker. I think it’s healthy to consider whether the business or industry you’re interested in is going to be healthy moving forward, and whether that company is really a great fit.” More

It is the mid-1990s and the economics faculty at a leading business school is meeting. The assembled dons are in a prickly mood. Many are upset that business-school fields, such as marketing and organisational behaviour, enjoy a higher standing despite their apparent lack of rigour. That economics ought to command more respect is keenly felt. One professor can barely contain his scorn. Anyone with a good phd in economics, he declares, could comfortably teach in any of the school’s other departments. It is tempting to see this as a story about the arrogance of economists. And in part, it is. The discipline’s imperialism—its tendency to claim the territory of fields adjacent to economics as its own—is a bugbear of social scientists. Yet the professor had a point. In the 1990s economics could plausibly claim to be moving towards a unified science of business. A realistic theory of the firm was in prospect. Alas, three decades on, it is no closer. Economics has rich models of competition and markets. But its powers still tend to falter once inside the factory gate or office building. It is worth asking why. Economics is—or at least is supposed to be—about the allocation of scarce resources. In neoclassical theory, markets take centre stage. The factors of production (land, labour and capital) and the supply and demand of goods and services move in response to price signals from market exchange. Resources go to the most profitable use. That is the theory. It has a glaring omission, as Ronald Coase, an economist, pointed out in a paper in 1937. Much of the allocation of resources in economies occurs not in markets but within firms. The prime movers are employees. They are directed not by price signals but by administrative fiat. The theory that firms are profit-maximisers is another clash with reality. They operate in a fog of ignorance and error, noted Herbert Simon, a pioneer of artificial intelligence and decision sciences. No business could process all the information needed to extract maximum profit. Instead firms operate under conditions of “bounded rationality”, making decisions that are satisfactory rather than optimal. For years, economics did little to advance along the lines drawn by Coase and Simon. As late as 1972, Coase complained that his paper on the nature of the firm was “much cited and little used”. Yet almost as soon as Coase lamented its absence, a body of rigorous research on the firm began to emerge. It proceeded to flourish over the course of the following two decades. A key pillar to this is the idea of the firm as the co-ordinator of team production, where each team member’s contribution cannot be separated from the others. Team output requires a hierarchy to delegate tasks, monitor effort and to reward people accordingly. This in turn needs a different kind of arrangement. In market transactions, goods are exchanged for money, the deal is done and there is little scope for dispute. But because of bounded rationality, it is not possible in business to set down in advance all that is required of each party in every possible circumstance. A firm’s contracts with its employees are by necessity “incomplete”. They are sustained by trust and, ultimately, by the threat of breakdown, which is costly to all parties. Where there is the delegation of tasks, there is a problem of motivation—how to get an employee to act on behalf of the firm, to be a team player, rather than narrowly self-serving. This is known in economics as the principal-agent problem, the source of much illuminating theory in this period. Incentives matter, of course, but often the best approach is for organisations to pay a fixed salary and not to tie rewards to any one task. Tie teachers’ pay to exam results, for instance, and they will “teach to the test”, instead of inspiring pupils to think independently. Such avenues of research would earn Nobel prizes in economics for Oliver Williamson, Oliver Hart and Bengt Holmstrom. (Coase had won the prize in 1991; Simon in 1978.) Their work explains in part why, by the mid-1990s, our business-school professor was so confident that economics should rule the study of business. The bestselling books of Michael Porter, an economist-turned-business guru, further fuelled such optimism, as did excitement about the potential for game theory in corporate strategy. Yet today if a firm hires a chief economist, it is for a take on gdp growth or the policy of the Federal Reserve. It is not for advice on corporate strategy. Companies excludedThere are reasons for this. One is academic prestige. Economics likes to see itself as a foundational discipline, like physics, not a practical one, like engineering. But most of what makes for a flourishing business cannot be captured in a tight theory with a few equations. Often it is a matter of how well ideas, information and decision-making spread throughout the firm. And pay is not the only motivation. Strong businesses are shaped by shared values and common ideas about the right way to do things—by corporate culture. People take pride in their work and their workplace. These are not natural subjects for economists. Nor is economics comfortable with the specificity of business problems. Solving them is more than a simple matter of establishing the right economic incentives. It requires detailed knowledge of technology, processes and competitors as well as social psychology and political trends. Economics is never enough. Many of the influences on any topical business issue—which tech firm will win the ai race, say—lie outside its purview. There are economic ideas that business people ignore at their peril. If a firm’s strategy can be freely copied, it should expect its profits to be competed away quickly. A sound business needs an edge. But beyond such precepts, economics has little of practical use to say about what makes a successful company. The study of business remains an outpost of the empire. It now seems unlikely it will ever fully conquer the terrain. ■ More

Richard Branson’s Virgin Orbit, with a rocket under the wing of a modified Boeing 747 jetliner, takes off for a key drop test of its high-altitude launch system for satellites from Mojave, California, July 10, 2019.
Mike Blake | Reuters

Check out the companies making headlines in midday trading Tuesday.
ServiceNow — Shares of the software company rose 2.8% after Baird upgraded the stock to overweight from neutral. The firm said that despite a tough macro climate, the ongoing need for efficiency should position ServiceNow shares for resilient revenue growth. The stock has rallied more than 22% year to date, after tumbling 40.2% in 2022.

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General Motors — The stock shed 2.2% on news that about 5,000 white-collar workers at the automotive manufacturer opted to participate in a buyout program that was announced last month in efforts to avoid layoffs. GM CFO Paul Jacobson said Tuesday that the company expects a roughly $1 billion charge from this program, which was part of GM’s plans to cut $2 billion in structural costs by the end of 2024.
Virgin Orbit — Shares tanked more than 22% after the California-based satellite launch company filed for Chapter 11 bankruptcy protection. Virgin Orbit said it is looking to sell its assets and will lay off nearly all of its workforce. The stock has lost nearly 92% year to date.
AMC Entertainment — Shares of the theater chain fell by 22% after AMC announced a settlement deal with some of its shareholders that could allow the company to raise more capital and convert its preferred shares into common stock. AMC’s “APE” preferred shares gained 8.5% following the news.
Boeing — The stock dropped nearly 2% after Northcoast Research downgraded the aerospace manufacturer to a sell rating. The research firm cited expected changes to Boeing’s commercial aircraft production, resetting of consensus forecasts and volume headwinds ahead for the company this quarter after communicating with its contacts in the sector.
Etsy – Etsy shares gained 2.4% after Piper Sandler upgraded the e-commerce stock to overweight from neutral, saying that its marketplace strengths should help revamp active buyer growth.

Gold miners — Shares of mining companies rallied as gold futures popped on Tuesday. The VanEck Gold Miners ETF jumped more than 3%. Newmont added 3.8%, while Barrick Gold leapt 4.9%. Kinross added 6%, and Gold Fields gained 4%.
Caterpillar — Shares of the construction equipment manufacturer dropped 5.2%, putting the stock on track to break a six-day winning streak. Softer-than-anticipated readings from the Institute for Supply Management and Purchasing Managers indexes on Monday are dampening the manufacturing outlook and raising concerns about construction spending, which has slowed down. Other equipment and manufacturing companies were also down on Tuesday. United Rentals lost 8%, Deere & Company shed 3.7%, and Eaton declined by nearly 4%.
— CNBC’s Alex Harring, Samantha Subin, Hakyung Kim, Jesse Pound, Michelle Fox Theobald, Seema Mody and Darla Mercado contributed reporting. More

Shareholders took to the stage at Credit Suisse’s annual general meeting Tuesday to demand answers and accountability over its controversial takeover by UBS.
Swiss authorities brokered an emergency rescue of the stricken bank by its larger domestic rival for just 3 billion Swiss francs, over the course of a weekend in late March.
Shareholders began arriving at the meeting in droves on Tuesday morning and a police presence was established near the venue.

ZURICH, Switzerland – April 4, 2023: Credit Suisse chairman Axel Lehmann opens the annual general meeting of Credit Suisse, after the Swiss government arranged its takeover by UBS on March 19 to prevent a financial meltdown.
FABRICE COFFRINI/AFP via Getty Images

Credit Suisse Chairman Axel Lehmann on Tuesday told shareholders he was “truly sorry” for the collapse that led to the bank’s controversial takeover by UBS.
“It is a sad day for you and for us too. I can understand the bitterness, the anger and the shock of all those who are disappointed, overwhelmed and affected by the developments,” Lehmann said at the bank’s annual meeting, the first time its leaders have addressed the public since the rescue.

“I apologize that we were no longer able to stem the loss of trust that had accumulated over the years, and for disappointing you.”
A police presence was established early Tuesday at the venue, as protesters and shareholders began arriving in droves, hoping for answers and accountability following the demise of the 167-year-old Swiss institution.
A number of shareholders took to the stage over the course of the morning to lambast the bank’s leadership and demand further explanation of the process and reasoning behind the deal.
Swiss authorities brokered an emergency rescue of the stricken bank by its larger domestic rival for just 3 billion Swiss francs, over the course of a weekend in late March.
It followed a collapse in Credit Suisse’s deposits and share price amid fears of a global banking crisis, but the deal remains mired in legal and logistical challenges. Neither UBS nor Credit Suisse shareholders were allowed a vote on the deal.

ZURICH, Switzerland – Climate activists raise a boat during a protest ahead of the annual general meeting of Credit Suisse, following the bank’s hastily brokered takeover by UBS to prevent a financial meltdown.
FABRICE COFFRINI/AFP via Getty Images

“Until the end, we fought hard to find a solution, but ultimately there were only two options: deal or bankruptcy,” Lehmann, who became chairman in January 2022, told shareholders. “The merger had to go through.”
At 2 p.m. London time, Lehmann was re-elected as chairman until the completion of the merger, winning 55.67% of shareholder votes. The remaining board members were narrowly re-elected, with the exception of five that did not stand again.
In a statement Sunday, the office of the attorney general confirmed that Switzerland’s Federal Prosecutor is investigating potential breaches of Swiss federal law by government officials, regulators and top executives at Credit Suisse and UBS.
Both banks declined to comment on Monday.
‘We ran out of time’
Credit Suisse CEO Ulrich Koerner took over in 2021, when the bank was reeling from a series of high-profile scandals, risk management failures and heavy losses.
In October 2022, Credit Suisse launched a massive strategic overhaul, aimed at fixing its risk and compliance culture and addressing perennial underperformance in the investment bank.
Koerner told shareholders on Tuesday that he returned to Credit Suisse in 2021 hoping to “tackle the problems that existed and build a new Credit Suisse.”
“In short, I wanted to create an organization that our shareholders, our clients and all our employees could be proud of. Unfortunately, we didn’t succeed in the end. We ran out of time. This fills me with sorrow,” he said.
“What has happened over the past few weeks will continue to affect me personally and many others for a long time to come.”

Commentators have highlighted the importance of the deal’s success for Swiss authorities against a febrile political backdrop. The lack of input from shareholders, bondholders and Swiss taxpayers in UBS’ acquisition of its embattled rival has sparked widespread anger.
Speaking outside the annual meeting, Vincent Kaufmann, CEO of Ethos Foundation which represents pension funds comprising between 3% and 5% of Credit Suisse shareholders, told CNBC that they had “lost a lot of money” and “need to know what management is doing.”
Potential courses of action include “trying to retrieve some of the viable pay that was granted for former management, who may have failed in their duties to protect shareholders’ interests,” he said.
“We’re still looking for possibilities — it’s quite difficult with the Swiss company law to prove the damage. Mismanagement of a company is not per se something we can concretely act against former members of the management or current members of the management, but still we need to be sure that they gave the whole truth to investors and to the market, so there is still open question,” Kaufmann told CNBC’s Joumanna Bercetche.
Holders of Credit Suisse’s AT1 bond instruments, which were subject to a $17 billion wipeout as part of the UBS takeover, last week instructed a global law firm to pursue discussion and possible litigation with Swiss authorities.

“There is still a chance that the various actors will recognize and correct the mistakes made in hastily orchestrating this merger,” Thomas Werlen, managing partner at Quinn Emanuel Urquhart & Sullivan, which is representing a “diverse array” of affected bondholders in Switzerland, the U.K. and U.S., said in a release Monday.
“While we are certainly prepared to pursue whatever proceedings are necessary, a potential constructive engagement with the relevant stakeholders could prevent years of litigation. That will be an important focus for us over the coming weeks.”
Norway’s sovereign wealth fund, Norges Bank Investment Management, announced ahead of the AGM that it would vote against the re-election of Lehmann and six other board members, while Kaufmann told CNBC that Ethos Foundation will only reject members who have been sitting for more than two years.
UBS announced last week that former CEO Sergio Ermotti would return to the helm of the new bank as it undertakes the huge task of integrating its fallen compatriot into its business.
UBS will hold its own AGM on Wednesday, with further clarity expected on plans for the new integrated lender. Swiss regulator FINMA will also hold a press conference on Wednesday.
Swiss newspaper Tages-Anzeiger reported Sunday, citing one source, that plans for the new entity include a 20%-30% cut to its combined global workforce. More