Business

Hospitality and service sectors can’t hire enough workers to staff what’s expected to be a bustling summer.
Microsoft, Meta and other companies have signaled they plan to be more cautious around hiring.
The divergence could mean a slowdown in wage growth, or hiring itself and could curtail spending, which has been robust despite deteriorating consumer confidence.

A help wanted sign is displayed in the window of a Brooklyn, New York business.
Spencer Platt | Getty Images

Cracks are forming in the U.S. labor market as some companies look to curb hiring while others are desperate for employees.
Microsoft, Twitter, Wayfair, Snap and Facebook-parent Meta recently announced they plan to be more conservative about adding new employees. Peloton and Netflix announced layoffs as demand for their products slowed, and online car seller Carvana cut its workforce as it faces inflation and a cratering stock price.

“We will treat hiring as a privilege and be deliberate about when and where we add headcount,” Uber boss Dara Khosrowshahi wrote to staff earlier this month, pledging to reduce costs.
U.S.-based employers reported more than 24,000 job cuts in April, up 14% from the month before and 6% higher than the same month last year, according to outplacement firm Challenger, Gray & Christmas.
But airlines, restaurants and others still need to fill positions. Job cuts for the first four months of the year were down 52% compared with the same period of 2021. Just under 80,000 jobs cuts were announced from January to April, the lowest tally in the nearly three decades the firm has been tracking the data.
What’s emerging is a tale of two job markets — albeit not equal in size or pay. Hospitality and other service sectors can’t hire enough workers to staff what’s expected to be a bustling summer rebound after two years of Covid obstacles. Tech and other large employers are warning they need to keep costs down and are putting employees on notice.

Record job openings

U.S. job openings soared to a seasonally adjusted 11.55 million at of the end of March, according to the latest available Labor Department report, a record for data that goes back to 2000. The numbers of employees who quit their jobs also hit a record, at more than 4.5 million. Hires stood at 6.7 million.

Wages are rising but not enough to keep pace with inflation. And people are changing where they spend their money, especially as household budgets tighten thanks to the highest consumer price increases in four decades.
Economists, employers, job seekers, investors and consumers are looking for signals on the economy’s direction, and are finding emerging divisions in the labor market. The divergence could mean a slowdown in wage growth, or hiring itself, and could eventually curtail consumer spending, which has been robust despite deteriorating consumer confidence.

Companies from airlines to restaurants large and small still can’t hire fast enough, which forces them to cut growth plans. Demand snapped back more quickly than expected after those companies shed workers during the pandemic-induced sales plunges.
JetBlue Airways, Delta Air Lines, Southwest Airlines and Alaska Airlines have scaled back growth plans, at least in part, because of staffing shortages. JetBlue said pilot attrition is running higher than normal and will likely continue.
“If your attrition rates are, say, 2x to 3x of what you’ve historically seen, then you need to hire more pilots just to stand still,” JetBlue CEO Robin Hayes said at an investor conference May 17.
Denver International Airport’s concessions like restaurants and shops have made progress with hiring but are still understaffed by about 500 to 600 workers to get to roughly 5,000, according to Pam Dechant, senior vice president of concessions for the airport.
She said many cooks are making about $22 an hour, up from $15 before the pandemic. Airport employers are offering hiring, retention and, in at least one case, what she called an “if you show up to work every day this week bonus.”

Consumers “spent a lot on goods and not much on services over the pandemic and now we’re seeing in our card data they’re flying back into services, literally flying,” said David Tinsley, an economist and director at the Bank of America Institute.
“It’s a bit of a shakeout from those people that maybe [had] overdone it in terms of hiring,” he said of the current trends.

Snap back

The companies leading job growth are the ones that were hit hardest early in the pandemic.
Jessica Jordan, managing partner of the Rothman Food Group, is struggling to hire the workers she needs for two of her businesses in Southern California, Katella Deli & Bakery and Manhattan Beach Creamery. She estimates that both are only about 75% staffed.
But half of applicants never answer her emails for an interview, and even new hires who already submitted their paperwork often disappear before their first day, without explanation, she said.
“I am working so hard to hold their hand through every step of the process, just to make sure they come in that first day,” Jordan said.
Larger restaurant chains also have tall hiring orders. Sandwich chain Subway, for example, said Thursday it’s looking to add more than 50,000 new workers this summer. Taco Bell and Inspire Brands, which owns Arby’s, said they’re also looking to add staff.
Hotels and food services had the highest quit rate across industries in March, with 6.1% of workers leaving their jobs, according to the Bureau of Labor Statistics. The overall quit rate was just 3% that month.
Some of those workers are walking away from the hospitality industry entirely. Julia, a 19-year-old living in New York City, quit her restaurant job in February. She said she left because of the hostility from both customers and her bosses and too many extra shifts added to her schedule at the last minute. She now works in child care.
“You have to work really hard to get fired in this economy,” said David Kelly, chief global strategist at JP Morgan Asset Management. “You have to be really incompetent and obnoxious.”

Slowdown in Silicon Valley

And if industries in rebound are hiring to catch up, the reverse is equally true.
After a boom in recruiting, several large tech companies have announced hiring freezes and layoffs, as concerns about an economic slowdown, the Covid-19 pandemic and the war in Ukraine curb growth plans.
Richly funded start-ups aren’t immune, either, even if they aren’t subject to the same level of market value degradation as public tech stocks. At least 107 tech companies have laid off employees since the start of the year, according to Layoffs.fyi, which tracks job cuts across the sector.
In some cases, companies such as Facebook and Twitter are rescinding job offers after new hires have already accepted, leaving workers like Evan Watson in a precarious position. 
Last month, Watson received a job offer to join the emerging talent and diversity division at Facebook, what he called one of his “dream companies.” He gave notice at the real estate development firm where he worked and set a start date at the social media giant for May 9.
Just three days before then, Watson received a call about his new contract. Facebook had recently announced it would pause hiring, and Watson anxiously speculated he might receive bad news.
“When I got the call, my heart dropped,” Watson said in an interview. Meta was freezing hiring, and Watson’s onboarding was off.
“I was just like silent. I didn’t really have any words to say,” Watson said. “Then I was like, ‘Now what?’ I don’t work at my other company.”
The news left Watson disappointed, but he said Facebook offered to pay him severance while he searched for a new job. Within a week, he landed a job at Microsoft as a talent scout. Watson said he “feels good” about landing at Microsoft, where the company “is a lot more stable, in terms of stock price.”

For months, retail giant Amazon dangled generous sign-on bonuses and free college tuition to lure workers. The company has hired 600,000 employees since the start of 2021, but now it finds itself overstaffed in its fulfillment network.
Many of the company’s recent hires are no longer needed, with e-commerce sales growth cooling. Plus, employees who went on sick leave amid a surge in Covid cases returned to work earlier than expected, Amazon CFO Brian Olsavsky said on a call with analysts last month.
“Now that demand has become more predictable, there are sites in our network where we’re slowing or pausing hiring to better align with our operational needs,” Amazon spokesperson Kelly Nantel told CNBC.
Amazon did not respond to questions about whether the company foresees layoffs in the near future.

Recession shield

The reductions and hiring shifts are isolated for now, but they have some executives on edge.
“Any kind of news flow … when its high-profile companies around job losses, has the potential to chip away at sentiment a bit,” said Bank of America’s Tinsley, cautioning that the job market is still strong. “Things are not as bad perhaps as the picture some might paint.”
He said the pace of job growth in the service sector will likely begin slowing, however.
JPM’s Kelly said that even if the market lost 3 million openings it would still be a job-seekers’ market.
“There’s strong excess demand for workers. It really shields the economy from recession,” he said.
But job cuts can ripple through other sectors.
A sharp increase in hiring freezes, job cuts, wage stagnation or even a pullback in company spending on things such as employee benefits and a return to business travel could hurt the very service sectors that have thrived as Covid cases fell.
“The question is, ‘Will consumer spending keep its head above water?'” Tinsley said.
— CNBC’s Jordan Novet contributed to this story.

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Space companies reported results for the first quarter of the year over the past several weeks – with many CEOs complaining of supply chain disruptions.
Many space companies went public last year through SPAC deals, but most of the stocks are struggling despite the industry’s growth.
CNBC summarized the most recent quarterly reports for Aerojet Rocketdyne, AST SpaceMobile, Astra, BlackSky, Iridium, Maxar, Momentus, Mynaric, Redwire, Rocket Lab, Satellogic, Spire Global, Telesat, Terran Orbital, ViaSat, Virgin Galactic and Virgin Orbit.

Virgin Orbit’s modified 747 jet “Cosmic Girl” releases the company’s LauncherOne rocket for a mission on January 13, 2022.
Virgin Orbit

Space companies reported results for the first quarter of the year over the past several weeks – with many CEOs complaining of supply chain disruptions pushing back hardware deliveries and launch schedules.
“Everyone’s getting delayed. I haven’t heard from a single satellite operator in the last 12 months – whether they’re a new entrant, whether they’re longstanding operators – everyone’s kind of getting moved to the right a little bit, mostly for the same reasons … the supply chain issues and whatnot,” Telesat CEO Dan Goldberg said during his company’s earnings conference call.

Many space companies went public last year through SPAC deals, but most of the stocks are struggling despite the industry’s growth. The shifting market environment, with climbing interest rates hitting technology and growth stocks hard, have weighed on space stocks. Shares of about a dozen space companies are off 50% or more since their market debut.
Beyond supply chain hiccups, most of the public companies reported continued quarterly losses, as profitability remains a year away or more for many space ventures.
Below are summaries of the most recent quarterly reports for Aerojet Rocketdyne, AST SpaceMobile, Astra, BlackSky, Iridium, Maxar, Momentus, Mynaric, Redwire, Rocket Lab, Satellogic, Spire Global, Telesat, Terran Orbital, ViaSat, Virgin Galactic and Virgin Orbit – alongside the stock’s year-to-date performance as of Thursday’s close.
Satellite imagery company Planet has yet to report its first quarter results. The company uses a 2023 fiscal year calendar that began on Feb. 1.

Aerojet Rocketdyne: -12%

While the propulsion specialist draws a majority of its $511 million in first quarter sales from defense-related contracts, Aerojet Rocketdyne continues to draw a major portion of revenue from the space sector. The company’s adjusted EBITDA profit for the quarter rose 18% to $69 million, compared to the same period a year prior, with a backlog of $6.4 billion in multi-year contracts. Aerojet Rocketdyne remains embroiled in a board proxy fight between CEO Eileen Drake and Executive Chairman Warren Lichtenstein, which began during the now terminated Lockheed Martin deal.

AST SpaceMobile: -5%

The satellite-to-smartphone broadband company saw minimal revenue of $2.4 million in the first quarter, with slightly increased operating expenses of $32.7 million from the previous quarter. AST continues to work toward the launch of its BlueWalker 3 demonstration satellite this summer, with about $83 million invested in constructing and testing the spacecraft so far. The company has $255 million in cash.

Astra: -66%

BlackSky: -46%

Seattle-based satellite imagery specialist BlackSky reported first quarter revenue of $13.9 million with an adjusted EBITDA loss of $9.5 million, up 91% and 53% from the same period a year prior, respectively. BlackSky has $138 million in cash. CEO Brian O’Toole emphasized the company sees increasing demand for Earth imagery from both the U.S. and foreign governments, with BlackSky stating it “believes capacity” from the current 14 satellites it has in orbit “will be more than sufficient to support increased customer demand.”

Iridium: -11%

The satellite communications provider delivered revenue of $168.2 million, an operational EBITDA profit of $103.2 million, and 1.8 million total subscribers in the first quarter – up 15%, 17%, and 15%, respectively, from a year prior. Iridium CEO Matt Desch noted the company’s supply chain team is managing issues and “we seem to be doing as well as anyone in getting the parts we need,” but said the “problem is that demand continues to exceed forecasts.” Iridium has “tremendous demand” from Ukraine, Desch said, with the company shipping thousands of devices to provide services such as mobile phones to Internet-of-Things connectivity.

Maxar: 1%

The satellite imagery and space infrastructure company reported $405 million in first quarter revenue, up slightly from a year prior, with an adjusted EBITDA profit of $84 million, a 25% increase. Maxar’s order backlog fell 14% from the fourth quarter to $1.6 billion. CEO Dan Jablonsky said during the company’s call that its long-awaited first WorldView Legion satellite launch is delaying to September due to an issue during testing. Jablonsky added that he is “disappointed that we’ve had another delay” with Maxar’s timeline for getting its WorldView Legion satellites in orbit. It has “been hit with supply chain and COVID-related issues over the past couple of years.”

Momentus: -31%

The spacecraft maker reported no revenue in the first quarter, and an adjusted EBITDA loss of $17.2 million – up from a loss of $13.2 million a year prior. Momentus spent the quarter preparing to launch its Vigoride spacecraft this month to demonstrate its capabilities, and signed agreements to fly on future SpaceX rideshare launches. The company has $136 million in cash on hand.

Mynaric: -33%

The laser communications maker announced preliminary results for 2021 in a shareholder letter, with the German company having listed on the Nasdaq late last year. Converted from euros, Mynaric in 2021 brought in $2.6 million in revenue, and has about $50 million in cash. Mynaric’s customer backlog for 2022 has seen it receive about $21 million from contracts for laser communications units.

Redwire: -40%

The space infrastructure conglomerate made $32.9 million in revenue for the first quarter, up slightly from a year prior, with a backlog of orders worth $273.9 million. Redwire has about $6 million in cash, with about $31 million in available liquidity through existing debt.

Rocket Lab: -62%

The small-rocket builder reported $40.7 million in first quarter revenue, up 147% from a year prior – and $34 million of that revenue came from Rocket Lab’s spacecraft business, with the remaining minority from launches. Rocket Lab had an adjusted EBITDA loss of $8 million, down 8% from a year ago, and has $603 million in cash. The company’s CFO Adam Spice said during the earnings call that its “supply chain is relatively intact” due to vertical integration, but buying production equipment for Rocket Lab’s coming Neutron vehicle is “suffering supply chain issues,” as “there’s no amount of money in the world that can accelerate some of that stuff.”

Satellogic: -51%

The satellite imagery company announced 2021 results earlier this month, having gone public in January. Satellogic has 22 satellites in orbit, with plans to launch a dozen more this year. The company had $4.2 million in 2021 revenue, with an adjusted EBITDA loss of $30.7 million.

Spire Global: -56%

Small satellite builder and data specialist Spire reported first quarter revenue of $18.1 million and an adjusted EBITDA loss of $9.7 million, up 86% and 62%, respectively, from a year ago. The company has $91.6 million in cash. Spire forecast full year 2022 revenue from annually recurring customer contracts between $101 million and $105 million. Spire CEO Peter Platzer said during the quarterly call that the company continues to aim to be “cash flow positive in 22 to 28 months,” with weather data helping customers ranging from the agriculture industry to a Formula 1 team, and its marine data helping support the cargo industry during the global supply chain challenges.

Telesat: -42%

Terran Orbital: -50%

The spacecraft manufacturer reported first quarter revenue of $13.1 million, up 25% from a year prior, with a $222 million backlog – in part thanks to a contract to build satellites for the Pentagon’s Space Development Agency. Terran Orbital saw an adjusted EBITDA loss of $14.7 million, quadruple its loss in first quarter 2021. It has $77 million in cash. Terran co-founder and CEO Marc Bell highlighted supply chain disruptions on the call, but emphasized that the company is increasingly vertically integrating its manufacturing.

ViaSat: -18%

The satellite broadband provider is on a different reporting cycle than the calendar year, with the company having reported fourth quarter results Wednesday. Viasat brought in $702 million of fourth quarter revenue, up 18% from the period a year ago, and an adjusted EBITDA of $134 million, down 9%. The company has nearly $1 billion in liquidity, largely through debt. In a letter to shareholders, Viasat noted the end of its fiscal year “had some challenges” due to regulatory delays, as well as increased R&D spending “on attractive growth opportunities.”

Virgin Galactic: -50%

The space tourism company reported negligible revenue for the first quarter, and an adjusted EBITDA loss of $77 million – 38% higher than the same period a year ago. The company has $1.22 billion in cash on hand. Although its current spacecraft and carrier aircraft refurbishment program is “progressing well” and expected to be finished in September, Virgin Galactic announced the delay of launching its commercial tourism service to the first quarter of 2023. Virgin Galactic CEO Michael Colglazier said the delay in commercial service was due to “little issues” that pushed the company’s refurbishment schedule back. He added that, “like many companies around the world, we’re experiencing elevated levels of supply chain disruption.”

Virgin Orbit: -40%

The alternative rocket launcher reported first quarter revenue of $2.1 million, down 61% from the same period a year ago, and an adjusted EBITDA loss of $49.6 million, up 71%. Virgin Orbit noted the decrease in revenue was due to “launches contracted during early development phase with introductory pricing.” The company has $127 million in cash, with a total contract backlog of $575.6 million. CEO Dan Hart said during the company’s conference call that it still plans to launch between four and six times this year, with one complete so far.

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Tracy McGrady’s Ones Basketball League makes its New York debut Memorial Day weekend.
The Hall of Famer, who played for several NBA teams including the Magic and the Rockets, is spending under $10 million to back the league.
McGrady has been involved in other business ventures, but he told CNBC: “This is the first time I actually trusted and believed that I can pull this off.”

Tracy McGrady
Source: Ones Basketball League

This time, Tracy McGrady is trusting his ideas.
The basketball Hall of Famer has funded real estate projects, he’s backed a sports and entertainment agency, and committed to a cryptocurrency partnership before the sector lost billions in value. Now, McGrady is investing in his own company, Ones Basketball League, or OBL, which makes its New York premiere this weekend.

“I’ve always invested in other people’s ideas and other people’s vision,” McGrady told CNBC in an interview. “Not once did I ever trust mine. I didn’t have the confidence to think mine was good enough. I didn’t trust my ideas or decision-making when it came to my vision.”
He added: “This is the first time I actually trusted and believed that I can pull this off.”
McGrady, 43, self-funds OBL, an over-18 league through that tours seven cities from April to July. It pairs players in one-on-one games, a staple of playground basketball. Picture Ice Cube’s Big 3 league, but with fewer players and no former NBA stars.
McGrady will pay just under $10 million, all told, including the $250,000 prize for the eventual OBL champion. He has partnered with longtime sports executive and former XFL president Jeff Pollack to help with operations. Pollack says the costs associated with the league are “not significant” so far.
“That means we’re going to have an opportunity to grow this business and do it in a way where the economics, in the beginning, are pretty favorable,” Pollack said.

McGrady wants to attract a mass Generation Z audience, meaning those born after 1997. Then, he believes, media and sponsorship fees will follow.

Action during an OBL game
Source: Ones Basketball League

While OBL is new to the minor league sports scene, he pointed to other amateur leagues such as cornhole and bowling that draws a niche audience on networks and believe OBL can do the same. 
“No disrespect to what these other things ESPN is putting on their programming – this is more entertaining,” McGrady told CNBC earlier this week at the Standard Hotel in Manhattan. 
OBL has already found a prominent media supporter. It struck a digital distribution deal with Paramount-owned Showtime network that allows the network to show OBL content on its YouTube channel as well as cross-promotion.
Terms of this pact were undisclosed, but OBL confirmed it would split advertisement revenue.

McGrady gets the keys

Drafted in 1997 by the Toronto Raptors, McGrady played 16 seasons in the NBA, including a long stretch with the Houston Rockets, and made over $160 million in earnings, according to Spotrac, a website that tracks sports contracts. McGrady’s earnings include a $92 million deal with the Orlando Magic in 2000. His last NBA season was 2011-12.
He compared OBL to his stint with the Magic. It only lasted four seasons, but it was the start of seven-straight All-Star appearances and McGrady’s transition to “a household name” in the NBA.
“I finally get the keys handed to me and blossomed into this [All-Star] player,” said McGrady. “I didn’t see me being that type of guy. And I didn’t see [OBL] being this.”
OBL launched in February. The league plays regional games featuring 32 players throughout seven cities, including New York and Los Angeles. Players that win regional games earn $10,000. The top three players from the games can compete for the bigger $250,000 payout.

Orlando Magic guard Tracy McGrady (1) slam dunks the ball past Washington Wizards’ guard Rod Strickland during the second period of the game at the TD Waterhouse Centre in Orlando, 31, October 2000.
Tony Ranze | AFP | Getty Images

McGrady praised his two teenage sons for sparking his interest in one-on-one basketball. They don’t really watch live NBA or NCAA games, he said. “What they will watch: YouTube, short-form content, highlights,” McGrady added.
McGrady isn’t naïve about the start-up. He expects OBL will have hiccups, and profitability will be unlikely at first. McGrady and Pollack didn’t discuss specifics around OBL’s plan to make money, but they expect to eventually profit from licensing deals, sponsorships and ticketing, which would help create a return on investment for potential sponsors.
“It’ll come from the audience we ultimately reach and engage,” Pollack said. “We have a long way to go.”
He added that OBL would eventually seek investors, but at this stage, “we want to make sure that we understand clearly what this should be, and then we’ll plan how to grow it.”
OBL is joining a crowded sports media landscape. Competitors include the Drake- and Jeff Bezos-backed media company Overtime. This media firm operates Overtime Elite, or OTE – the league that pays high schoolers $100,000 with an established Gen Z following.
Macroeconomic concerns, including inflation, threaten early growth. Asked about these factors, Pollack suggested OBL is playing the long game.
“We’re in a tough economic time, and it may get worse,” Pollack said. “But we’re going to come out of it at some point, and what we’ve all seen in the last couple of years is the consumer appetite for sports content is as insatiable as it’s ever been.”
Should OBL attract its target audience to watch social media sports content, McGrady plans to grow the company globally.
“I have the right team to make it happen,” he said. “I think we’ve identified a model where it’s very entertaining.”

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A judge dismissed a federal lawsuit by former President Donald Trump that sought to bar a civil investigation of his business by New York Attorney General Letitia James.
The ruling by U.S. District Judge Brenda Sannes came a day after a state appeals court in New York upheld subpoenas issued by James compelling Trump and two of his adult children to appear for questioning under oath as part of her probe.
Trump and his company, the Trump Organization, last year sued James in federal court in the Northern District of New York.
The claimed the attorney general violated their rights with her investigation into claims the company illegally manipulated the stated valuations of various real estate assets for financial gains.

Former U.S. President Donald Trump looks on during a press conference announcing a class action lawsuit against big tech companies at the Trump National Golf Club Bedminster on July 07, 2021 in Bedminster, New Jersey.
Michael M. Santiago | Getty Images

A judge on Friday dismissed a federal lawsuit by former President Donald Trump that sought to bar a civil investigation of his business by New York Attorney General Letitia James.
The ruling by U.S. District Judge Brenda Sannes came a day after a state appeals court in New York upheld subpoenas issued by James compelling Trump and two of his adult children to appear for questioning under oath as part of her probe.

James, in a Twitter post Friday, called the latest ruling in her favor “a big victory.”
“Frivolous lawsuits won’t stop us from completing our lawful, legitimate investigation,” James tweeted.
Trump and his company, the Trump Organization in December sued James in federal court in the Northern District of New York.
The suit claimed the attorney general violated their rights with her investigation into claims the company illegally manipulated the stated valuations of various real estate assets for financial gains.

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Trump and his company claimed that James’ “derogatory” comments about him when she ran for office and after her election showed she was retaliating against Trump with her probe, which was commenced “in bad faith and without a legally sufficient basis.”

Sannes, in her 43-page ruling Friday, dismissed those arguments, writing “Plaintiffs have not established that Defendant commenced the New York proceeding to otherwise harass them.”
Sannes noted that James has said that her investigation was opened as a result of the testimony before Congress by Trump’s former personal lawyer Michael Cohen in 2019.

“Mr. Cohen testified that Mr. Trump’s financial statements from the years 2011–2013 variously inflated or deflated the value of his assets to suit his interests,” Sannes wrote.
The judge also noted that under federal case law embodied in a 1971 ruling in a case known as Younger v. Harris says that “federal courts should generally refrain from enjoining or otherwise interfering in ongoing state proceedings.”
Sannes said Trump had failed to offer facts that would warrant an exception to that case law being applied in his lawsuit.
“Plaintiffs could have raised the claims and requested the relief they seek in the federal action” in state court in Manhattan, Sannes wrote.
The parties already have litigated numerous issues related to James’ investigation in Manhattan Supreme Court.
James, in a prepared statement, said, “Time and time again, the courts have made clear that Donald J. Trump’s baseless legal challenges cannot stop our lawful investigation into his and the Trump Organization’s financial dealings.”
“”No one in this country can pick and choose how the law applies to them, and Donald Trump is no exception. As we have said all along, we will continue this investigation undeterred,” James said.
Trump’s lawyer, Alina Habba, in an emailed statement said, “There is no question that we will be appealing this decision.”
“If Ms. James’s egregious conduct and harassing investigation does not meet the bad faith exception to the Younger abstention doctrine, then I cannot imagine a scenario that would,” Habba wrote, referring to the element of Sannes’ decision related to the case law from Younger v. Harris.

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The average incentive offered by dealers has dropped to an all-time low of $1,034, according to a joint estimate from J.D. Power and LMC Automotive.
The average per-car profit at dealerships is $5,046 — up from $2,733 a year ago — which is offsetting a slower sales pace.
A growing share of buyers are trading in their car for another preowned vehicle.

Bloomberg | Bloomberg | Getty Images

One of the best car-shopping weekends prepandemic is more of a dud these days.
Amid the auto industry’s manufacturing challenges due to persisting supply-chain issues, Memorial Day sales are generally minimal to nonexistent this year.

“It’s looking pretty bleak, to be straightforward about it,” said Ivan Drury, senior manager of insights for Edmunds. “It’s getting harder and harder for people to get a new car with the features they want at the price they’re willing to pay.” 

The average amount paid for new car is more than $45,200, up 18.7% from a year ago, according to a joint forecast from J.D. Power and LMC Automotive. Buyers are paying about $700 above sticker price on average, Drury said.
At the same time, the average incentive offered by dealers has dropped to an all-time low of $1,034, compared with $2,996 a year ago, the J.D. Power/LMC forecast shows. Generally speaking, dealers don’t need to offer much in the way of incentives to sell cars these days.
In fact, despite the pace of sales being down 23.8% from a year ago due to reduced inventory, the average per-car profit at dealerships is $5,046 up from $2,733 a year ago.

It’s getting harder and harder for people to get a new car with the features they want at the price they’re willing to pay.

Ivan Drury
senior manager of insights at Edmunds

“This elevated per-unit profit level is more than offsetting the drop in sales volume,” said Thomas King, president of J.D. Power’s data and analytics division, in the forecast.

Meanwhile, facing limited inventory for a new vehicle, a growing share of buyers are heading to used-car lots instead, Drury said.
“A lot of new cars you see on [dealer] websites that are labeled ‘coming soon’ or ‘in transit’ are already sold,” Drury said. “So unless you can preorder that vehicle and wait three or six months for it, you’re going to end up in a used car.”
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Of buyers with a trade-in, 45% are ending up with a preowned vehicle compared with 35% a year ago, Drury said.
Of course, there’s little relief in the used-car market. Average prices are up 22.7% over the last 12 months, according to the latest data from the Bureau of Labor Statistics. Transaction amounts average $29,948, Edmunds research shows.
However, this means trade-in values are higher, as well.
“For your own used vehicle, get multiple quotes,” Drury said. “Leverage that.”

Another thing to consider is the cost of financing. The average rate paid on new car loans is ticking upward. It reached 4.7% in April, up from 4.5% in March and 4.1% in December, according to Edmunds. With the Federal Reserve expected to continue raising a key interest rate that affects consumer loans, car shoppers are likely to run into higher rates in the coming months.
However, well-qualified buyers may be able to snag a decent rate, depending on the car.
“You can still get zero or maybe 1.9% financing,” Drury said.

For used cars, the average rate is 8%. However, for certified preowned vehicles — which generally have passed a rigorous inspection and come with an extended warranty — you may find special financing deals.
“It could be 1.9% or 2.9% or even cash back,” Drury said.
And while those used cars may cost more, you could pay a higher interest rate on a loan for a noncertified version.
“Even if you save money upfront with a noncertified preowned car, you might end up paying more overall,” Drury said.

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Retailers like Macy’s and Ulta reported stronger first-quarter sales and say shoppers eager to go out again are splurging on nicer clothes and makeup.
The trend is particularly pronounced among higher-income shoppers who so far appear willing to keep spending even amid sky-high inflation.
The latest round of financial results offer a more nuanced look at the economy after Walmart and Target alarmed investors with downbeat forecasts and warnings that some shoppers are becoming more price sensitive.

A Nordstrom employee fixes a floral dress on a mannequin in one of the retailer’s department stores.
Ben Nelms | Bloomberg | Getty Images

Out with sweatpants, in with blazers, lipstick and eye-popping prints on dresses.
Americans are sprucing up their wardrobes and spending more on dressier clothing, makeup and accessories as they start going out more and venturing back to offices. The trend is particularly pronounced among higher-income shoppers who are eager to splurge on such items again, even amid soaring inflation and an uncertain economy, analysts and company executives say.

“The masks are coming off,” said Macy’s Chief Executive Officer Jeff Gennette after the company boosted its profit outlook and stood by its sales guidance for the year on Thursday.
The sentiment was echoed by a string of other retailers reporting quarterly results this week, including makeup-and-beauty products chain Ulta Beauty and Anthropologie-parent company Urban Outfitters. People are paying to look their best as they leave the house again, they said.
The latest round of results offer a more nuanced look at the economy after two of the biggest retailers — Walmart and Target — sent shock waves across the market with downbeat forecasts and warnings that some shoppers are becoming more price sensitive amid decades-high inflation.
Rising prices for food and gas are pinching lower-income Americans who are pulling back on spending, executives say. But so far, even the threat of a possible recession isn’t stopping higher-income consumers from spending on items they missed during the earlier days of the pandemic.

‘Head-to-toe color suits’

At Macy’s, Gennette said shoppers are increasingly spending “hours” browsing in stores, especially in urban markets like New York. A year ago, he said people were more likely to get in and out.

“The luxury customer is back in a big way,” he said in a phone interview.
But Gennette noted that shoppers who make less than $75,000 a year are seeking out more discounts.
The split in behaviors also appears to be playing out at Urban Outfitters. The company’s Anthropologie chain, which is known for playful dresses and caters to higher-income consumers, saw sales surge 18% in the quarter. At its namesake chain, which caters to younger shoppers in their first or second jobs, sales rose just 1%.
“There is a sort of bifurcation that has happened,” said Urban Outfitters CEO Richard Hayne on conference call Tuesday evening.

But even shoppers who are trying to economize might be willing to shell out for items like shirts or purses they covet — especially if they think a store might be running low on stock, according to one retail expert.
“It’s a mindset. It’s a psychology: ‘I want to go do things and I need new stuff to wear’,” Jan Kniffen, CEO of retail consultancy J Rogers Kniffen Worldwide, said in an interview on CNBC’s “Squawk Box” this week.
Kniffen said people are more likely to try and save on groceries, where cheaper options might not be that different in quality from name brands: “Substitution is so easy in the grocery space,” he said.
Makeup chain Ulta Beauty also easily beat Wall Street’s sales expectations this week, with shoppers buying items to pamper themselves and dress up for social gatherings. The company hiked its full-year outlook after first-quarter sales jumped 18% at established locations from a year ago.
“There’s new trends that are coming into makeup that we’re excited about, definitely a push towards bold looks, bright, glam, glitter,” said Ulta CEO Dave Kimbell. “People are ready to get out in the world and that’s shown up in the looks.”
Kimbell said makeup is seen as an affordable indulgence even when people are on tighter budgets. Clothing retailer Express is also benefitting from people’s eagerness to get out and dress up again, with same-store sales up 31% in the quarter.
“One of the major fashion trends in women’s right now is head-to-toe color suits,” Express CEO Tim Baxter said in a phone interview. “We haven’t been in that kind of a fashion cycle in a long time.”

Choppy environment for some

The shifting behaviors mean retailers that sell more casual clothing, such as pajamas and sweatsuits, might now be hurting more than their rivals after seeing a boost in sales when people were hunkering down at home.
Some are now saddled with inventories of pandemic-friendly clothes they stocked up on when people were seeking comfort above all else. Those items might eventually need to be heavily discounted.
American Eagle said Thursday that demand in the first quarter was “well below” its expectations and trimmed its profit forecast for the year. Inventory was up 46% from a year ago. The company’s Aerie division sells casual clothing, workout gear and lingerie to teens and younger women.
Abercrombie & Fitch also said inventory was up 45% in its fiscal first quarter from a year ago and cut its sales forecast for the year. And Gap’s first-quarter sales fell, dragged down by Old Navy.
“Last year, we won big with active and fleece, and kids and baby, which is our sweet spot for Old Navy,” Gap CEO Sonia Syngal said in a phone interview. She said the return of weddings, special occasions and office life is now pressuring those categories.
Gap’s inventory was up 34% in the period, and the company slashed its profit guidance for 2022. Only its Banana Republic chain, which caters to a higher-income customer, reported a bump in same-store sales.
At an Old Navy store Syngal recently visited where the average income in the area is about $100,000, she said shopper behavior hasn’t changed much. But at another location where the average income in the area was about $50,000, she said the financial pressures are clear.
“There’s much more focus on value for money,” she said, adding that people aren’t coming in as often either.
Stacey Widlitz, president of retail consulting firm SW Retail Advisors, said the mixed results across the industry reflect how the economy is affecting people as they emerge from the pandemic.
“It’s a shift in spending. It’s a behavior shift. And it’s hitting different companies differently,” she said.
—CNBC’s Melissa Repko contributed to this reporting.

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Unemployment for neurodivergent adults is as high as 30% to 40%, three times the rate for people with a disability.
With one in 45 adults on the autism spectrum alone, there is a lot of untapped labor market potential.
Companies including Amazon, Walgreens, and Wawa are among employers making greater efforts to hire neurodiverse talent, but start-ups such as GoBe are also leading in this job market strategy.

Walgreens has been training and employing neurodiverse workers since 2007. “What we do know, from data and research, is that this is the highest unemployed demographic in the country,” Carlos Cubia, global chief diversity officer at Walgreens Boots Alliance, said of workers with disabilities.
Justin Sullivan | Getty Images

When Cornelia Quinn, co-founder of Go-Be, which makes reusable antimicrobial airplane tray covers, needed help to pack and fulfill orders, she looked no further than her 19-year-old son, Jake, who has autism.
As someone with autism, finding employment is challenging. More than half of young adults with autism are unemployed. Unemployment for neurodivergent adults is as high as 30% to 40%, three times the rate for people with a disability — up to 85% of people on the autism spectrum are unemployed, according to a recent Deloitte report. Neurodiversity is an umbrella term that covers a wide range of conditions including autism, ADHD, dyspraxia, and dyslexia. With one in 45 adults on the autism spectrum alone, that’s a lot of untapped labor market potential.

This is a significant data point for employers amid the current labor crunch. About half of U.S. states now have unemployment rates below pre-pandemic levels — a 50-year low — while 13 states have unemployment rates below 3%, according to the Bureau of Labor Statistics. That means employers are struggling to fill open positions and are more willing to look more closely at previously overlooked segments of the population. 
“Employers are trying multiple methods of hiring and looking at resources that may not have before, said John Dooney, HR advisor at the Society for Human Resource Management.
“Everyone is struggling to find talent out there in the marketplace,” said Carlos Cubia, global chief diversity officer at Walgreens Boots Alliance. “What we do know, from data and research, is that this is the highest unemployed demographic in the country. And that’s people with disabilities. So it’s an untapped resource that businesses can hopefully turn to.”

Walgreens, Amazon lean into neurodiverse talent

One stumbling block that employers face when hiring neurodiverse individuals is accommodating conditions. Since neurodiversity encompasses such a broad variety of conditions, the accommodations needed also vary broadly. Someone with sensitivity to loud noises may need headphones to muffle the sound. Others with severe dyslexia or other conditions may benefit from signage that includes pictures or is color-coded.
Since its start in 2007, Walgreens’ Transition Work Group program has helped place 1,000 individuals at the company’s distribution centers. The 13-week training program includes both classroom and on-the-job training that teaches how to pull and pack orders from the distribution center to stores.

“These individuals, once they come through the 13-week program, they are paid at the same rate as someone without a disability, they have the same expectations in terms of job performance, and are treated just like a normal employee within the workforce. We don’t cut corners to say where you know, your productivity can be less, your expectations or less, we don’t do any of that,” Cubia said.
The company also has a similar program for its retail stores. The Retail Employees with Disabilities trains employees with disabilities to stock shelves, unload trucks, greet customers, or work as a cashier. To keep the program running, Walgreen’s HR department and distribution center leadership work with local community organizations as well as state and local social service agencies to help find and screen candidates.

Job coaching can be a crucial part of ensuring success. Wawa, which operates a chain of convenience stores and gas stations in New Jersey, Pennsylvania, Delaware and three other states, breaks up tasks for neurodiverse employees. Typical employees have a range of responsibilities from food preparation to cleaning to customer service. A job coach, employed by a coaching organization, not Wawa, will help determine the right scope of tasks for the individual, which can vary depending on their abilities and desires.
Jay Culotta, treasurer for Wawa and president of The Wawa Foundation, said that when his daughter Hannah, who has Down syndrome, started working for the company two years ago, she worked with a job coach to ensure she was performing tasks efficiently and effectively. “Over time, as Hannah became more independent, that job coach would start fading away,” Culotta said.
Wawa has worked with Eden Autism Services in New Jersey for over 40 years. The partnership started when a store manager hired Ari Shiner, who has autism, through Eden in 1981. Wawa now works with more than 200 different job coaching organizations. Shiner is still with the company and Wawa has about 30 other neurodiverse employees who have stayed on for at least 20 years.
While some neurodiverse individuals may need more accommodations, many do not.
“The accommodations that are typically needed are not enormous,” said Dan Roth, a technical recruiter for Amazon who, as someone with ADHD, is also considered neurodiverse. “If somebody is working at 50% of their capacity, but if you make two or three light accommodations, and that brings them to 85 or 95% … there, look how much more ROI you’re getting,” he said.
At Go-Be, which employs four neurodiverse individuals, Quinn breaks down tasks to best suit the individual. While her son, Jake, is especially adept with computer-related tasks, another member really enjoys rolling and folding the sleeves. “It’s almost therapeutic for him,” she said. “We set up stations for them and we really want to promote their success and give them social opportunities to collaborate with each other to accomplish their role or task,” Quinn said.

Cornelia Quinn, co-founder of Go-Be, and her son Jake, who has autism. She says of employing her son and other neurodiverse workers, the goal is to have them “feel that when they wake up in the morning, they have something to look forward to, and just feel that they’re part of society and that they’re contributing.”

While there could be some accommodation and investment needed to hire neurodiverse individuals, recruiters and companies that have gone through the process say that there is a payoff — both financial and otherwise.
“These individuals are very reliable, very good from a productivity standpoint … they’re very methodical and deliberate about how they do their job attention to detail,” Cubia said.
The attrition rate for individuals who go through Walgreen’s TWG program is 25% lower than the norm in Walgreen’s distribution centers. Retention is also higher, Cubia said. “You’ve heard the old adage that it costs less to retain an employee than it does to acquire a new one. It helps you save money from that standpoint,” he said. 
In addition, the IRS offers tax credits and incentives to companies that hire disabled individuals, which could include some neurodiverse individuals. Some of the incentives go toward offsetting the cost of accommodations.
For Wawa, the payoff is not necessarily tied to performance metrics or profit margins.
“We have some associates in this program who are just as efficient and productive as our typical associates. . . And we have some that’s just not in the cards and that’s okay. Their job scope may be very, very narrow or they may work entirely with their job coach,” said Dave Simonetti, senior director for store operations at Wawa, “but there’s other things that are brought to the table.”
Those other qualities are harder to measure by numbers, but equally important. “The associates working with them feel that the community really embraces this program. That’s a huge win with customer service, which is a huge opportunity in our industry. A lot of times this is a big positive for just customer interaction. It’s a different set of metrics,” he said.
Wawa has about 47,000 employees, 500 of whom are neurodiverse.
While companies such as SAP, Microsoft, Ford, Deloitte, IBM and others have shifted their corporate HR practices to bring on more neurodiverse individuals for coding or other technical jobs, efforts to hire neurodiverse individuals for fulfillment, distribution or retail jobs are more scattered. Part of the bias is the perception that neurodiverse individuals or people with disabilities can’t keep up in a business that watches performance metrics so closely.
Arwyn Swanger, a recruiter for Indeed.com and WilsonHCG who focuses on placing neurodiverse individuals, said opportunities for neurodiverse individuals can vary depending on the company, the store and store manager. She cited placing several individuals at Walmart and many at Lowe’s. Some store managers are very familiar with the process and any accommodations, others are wary, she said.
Walmart spokesperson Jimmy Carter said the company doesn’t have a specific program dedicated to hiring neurodiverse individuals. “We don’t inquire about specific conditions but we’re committed to engaging, hiring, and growing diverse talent from underrepresented communities, including neurodiverse individuals,” he said.
Go-Be’s Quinn hopes that, with greater awareness, more neurodiverse individuals will find employment. The current high rate of unemployment, “is an alarming number. Moving forward I want to somehow get the community involved,” she said.
“Those are all great opportunities to help them have a purpose, and that they feel that when they wake up in the morning, they have something to look forward to, and just feel that they’re part of society and that they’re contributing,” she added.   More

Ultra-high-end real estate in Boca Raton, Florida, is on a stratospheric rise, breaking record sale prices every year for five consecutive years. 
The price per square foot of the town’s top-end homes is now on par with Miami Beach pricing. 
Here’s a closer look at the three highest-priced homes for sale in Boca Raton.

The $28.5 million mansion that recently hit the market in Boca Raton, FL located at 2633 Spanish River Rd.
Danny Petroni

Ultra-high-end real estate in Boca Raton, Florida, is on a stratospheric rise, breaking record sale prices every year for five consecutive years. And the price per square foot of the town’s top-end homes is now on par with Miami Beach pricing.  
“People tend to think of Miami when the subject turns to high-end South Florida real estate,” said Douglas Elliman real estate agent Senada Adzem, “But Boca Raton is, without question, one of the region’s premier luxury residential markets.”

The all-time top sale in the town, located about 45 miles north of Miami and 28 miles south of Palm Beach, traded last year for $24.5 million, delivering a price per square foot of more than $2,800, according to public records. That’s more than four times the average $670 price per square foot for a luxury home, representing the top 10% of sales, in Boca.
The record sale also tops the average price per square foot achieved in Miami Beach, at $2,766, according to the most recent Elliman Report for Q1.
“Trophy properties have gained momentum in the South Florida market over the past three years — for tax benefits, for safety reasons, and because of the pandemic,” Adzem told CNBC.

The great room at 2633 Spanish River Rd in Boca Raton, FL.
Danny Petroni

This year’s already seen three more mega-homes hit the Boca market, each one priced to break last year’s record and push the town’s high-end even higher.
Here’s a closer look at the three highest-priced homes for sale in Boca Raton:

169 West Key Palm Road

The twilight view of 169 W Key Palm from the waterway.
Danny Petroni

The waterfront home at 169 West Key Palm Road was listed this week for $26.9 million. It’s located behind the private gates of Boca’s swanky Royal Palm Yacht & Country Club community, and the asking price is just shy of $3,000 a square foot.

Living room with marina views.
Danny Petroni

The almost-9,000-square-foot residence is being sold fully furnished. Dustin Nero at Douglas Elliman, who co-lists the home with Adzem, says high-end buyers moving from places like California and New York are wiling to pay a premium for a turnkey mansion.

Sunset view from infinity pool and dock.
Danny Petroni

“It overlooks the Royal Palm marina. You don’t look at a house — it’s a very premium view,” said Nero, who believes the home’s unique view will help it break the town’s sale price record.

Owner’s suite overlooking waterway and marina.
Danny Petroni

The six-bedroom home sits on 104 feet of waterfront with deep water dockage on the Fishtail Palm Waterway and includes five full baths and two half-baths.

One of two walk-in closets in the home’s primary suite.
Danny Pettroni

Nero, who represents clients in both Miami and Boca, believes a trophy home in Boca is still a relative bargain compared to the very top-end in Miami.
“This home in Miami would list at $4,000 or $4,500 a square foot,” he said.

The pool and hot tub situated above the home’s dock and overlook the community’s marina.
Danny Pettroni

Another selling point for Boca: Buyers can land their private jets here. The private airport in Boca recently added its own customs office, Nero said, the ultimate convenience for local residents traveling internationally by private jet.

2633 Spanish River Road

The view of 2633 Spanish River from over the Intracoastal Waterway.
Danny Petroni

This almost-10,000-square-foot home located on the Intracoastal Waterway in the Estate Section of Boca was listed this month for $28.5 million. That puts the price per square foot just under $2,900.

The home’s entryway is flanked by a water feature that spans the entire walkway on one side and lush vegetation on the other.
Danny Petroni

“It’s like a work of residential art that manages to walk the line between artful splendor and resort-style comfort,” said Adzem, who is a co-listing agent on the property with Nero.

The view from the cantilevered primary suite.
Danny Pettroni

The contemporary home, which is also being sold fully furnished, unfolds over two floors with six bedrooms, eight baths and one half-bath. The owner’s bedroom is cantilevered over the deck, so when you’re laying in bed the room appears to float over the water.

Owner’s suite terrace overlooking pool and waterway.
Danny Pettroni

The home’s great room has a double-height wall-of-windows that deliver panoramic views and drench the room in sunlight.

Great room
Danny Pettroni

The ground-level glass panels slide away blurring the lines between indoor and outdoor space.
The room also includes a 12-foot double-sided fireplace clad in grey and black porcelain.

A retractable glass wall opens the great room to the outdoor lounge and pool.
Danny Petroni

Adzem told CNBC the home also includes an ultra-high-end, hospital-grade air filtration system that’s tied into the central air system.
“It’s designed specifically for a Covid-free home environment, with separate zones of HVAC for every room,” she said.

 298 West Key Palm Road

The night view of 298 W Key Palm from the pool area.
Living Proof

The highest priced home for sale in town is a $35 million mansion spanning almost 11,500 square feet, built by developer SRD Building Corp.
“We’ve been setting new highs consistently,” said SRD’s president, Scott Dingle.
The newly constructed modern residence, also located on West Key Palm Road at the Royal Palm Yacht & Country Club community, is situated on the Butterfly Palm Waterway. It includes a private dock and more than 166 feet of waterfront.  

The waterfront home’s private dock.
Living Proof

The view into the garage from the home office.
Living Proof

The home’s five-car garage doubles as a supercar showcase that’s visible through a floor-to-ceiling glass wall from a desk in the home office.
Roberts, who sold $545 million worth of homes in the community just last year, said the spec builder’s record-breaking strategy is simple.
“They buy premium [lots], and they put premium on it,” he said.

The pool deck and lanai areas.
Living Proof

The home’s $3,050-per-square-foot asking price is a high bar for Boca Raton, which has yet to see a sale breach $3,000 a square foot. But Dingle, who said he’s built 160 homes in the community over the past 28 years, is confident it can happen.
The spec builder told CNBC he has another home in the community under contract for $26.5 million, scheduled to close later this year at a record-breaking $3,200 per square foot.
“This year you are going to see some new records set,” he said.

The modern interiors at 298 W Key Palm include a mix of stone & wood finishes with a dramatic floating staircase.
Living Proof

Dingle says 95% of the homes he’s built are in this one community and, after almost three decades, he continues to bet on Boca breaking records.
“With a country club, marina, championship golf course, direct access to the beach, it’s a special spot,” Roberts said. “We have all our cards and chips in.”

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