Economy

(Reuters) -The U.S. Supreme Court justices on Friday expressed skepticism about a challenge from TikTok and its Chinese parent company ByteDance against a law signed by President Joe Biden, which would force the sale or ban of the popular short-video app by Jan. 19 in the United States. Some of the justices seemed to acknowledge Congress’ national security concerns over TikTok, given its ownership by what lawmakers deemed a foreign adversary.Here’s what could happen on Jan. 19.WHAT HAPPENS TO THE APP?New users will not be able to download TikTok from app stores and existing users will not be able to update the app, because the law prohibits any entity from facilitating the download or maintenance of the TikTok application. In a Dec. 13 letter, U.S. lawmakers told Apple (NASDAQ:AAPL) and Alphabet (NASDAQ:GOOGL)’s Google, which operate the two main mobile app stores, that they must be ready to remove TikTok from their stores on Jan. 19. Cloud service provider Oracle (NYSE:ORCL) could see some disruption to its work with TikTok. Oracle hosts TikTok’s U.S. user data on its servers, reviews the app’s source code and delivers the app to the app stores. Google declined to comment, while Oracle and Apple did not respond to requests for comment. HOW WILL USERS BE AFFECTED?TikTok’s 170 million users in the U.S. will likely still be able to use the app because it is already downloaded on their phones, experts say. But over time, without software and security updates, the app will become unusable. Some users have begun posting TikTok videos instructing others on how to use virtual private networks (VPNs), which mask an internet user’s location, as a way to circumvent the possible ban. Content creators who have built businesses from their TikTok followings are preparing for the worst. Nadya Okamoto, who has 4.1 million followers and founded August, a menstrual products brand, said TikTok helped her business grow organically through viral videos. A TikTok ban could force her and other small businesses to spend more on marketing and raise their costs. “It’s very stressful,” she said. “If TikTok goes away, we’ll be okay, but it is going to be a hard hit.”WHAT HAPPENS TO TIKTOK’S EMPLOYEES?TikTok’s 7,000 employees in the U.S. are still trying to figure out their fate. After a U.S. appeals court upheld the sell-or-ban law on Dec. 6, pessimism spread among staffers who began worrying about layoffs, said one current employee.But the company has continued to make job offers for new roles, prompting some confused job seekers to seek advice on Blind, an anonymous forum for employees to discuss companies. One user posted on Blind that they received a job offer from ByteDance in San Jose, California, starting in February. Others commented on the post, counseling the user to accept the offer and use it as leverage in other interviews.”I signed the offer and will wait and watch how the situation unfolds,” the user said in the Blind post. WHAT WILL ADVERTISERS DO?TikTok’s U.S. ad revenue is expected to total $12.3 billion in 2024, according to research firm eMarketer, and while that is much smaller than Instagram owner Meta Platforms (NASDAQ:META), advertisers say TikTok’s devoted user base means some brands will try to advertise beyond Jan. 19.”The ongoing assumption is the app might not be updatable, but you’ll see a groundswell of usage,” said Craig Atkinson, CEO of digital marketing agency Code3. The app’s e-commerce feature TikTok Shop, which lets users purchase products directly from videos, has no direct competitor that advertisers can easily switch to, Atkinson said, adding that his agency was signing new contracts with clients to build TikTok Shop campaigns even as of late December. Some advertisers may continue spending beyond Jan. 19 on TikTok and reevaluate if the app sees declining usage or performance, said Jason Lee, executive vice president of brand safety at media agency Horizon Media.ARE THERE POTENTIAL BUYERS?TikTok has repeatedly said it cannot be sold from ByteDance. That hasn’t deterred billionaire businessman Frank McCourt, a former owner of the Los Angeles Dodgers baseball team who said he has secured $20 billion in verbal commitments from a consortium of investors to bid for TikTok. McCourt has not yet spoken with ByteDance, but said he believes the Supreme Court will uphold the law requiring TikTok’s divestment, after which the parent company would be more open to sale discussions.McCourt and his team have had “preliminary conversations” with members of the incoming administration of President-elect Donald Trump, who had tried to ban TikTok during his first term in the White House but has since reversed his views, and are also seeking a CEO to lead the app. McCourt’s business plan for TikTok includes migrating the app onto open-source technology and earning revenue through e-commerce and licensing data for AI training.  More

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The report, which showed a significant increase of 91,000 jobs in December, was primarily driven by hiring among older workers. This surge in employment led to a drop in the unemployment rate to 6.7%, which partly reversed the sharp increase observed in November.The increase in hours worked, rising by 0.5% month-over-month, is seen as a positive sign that could bolster real GDP estimates for the fourth quarter of 2024 and the first quarter of 2025. Despite this growth, Macquarie economists urge caution, suggesting that the employment report’s figures may have been influenced by seasonal adjustment challenges due to the timing of the data collection.Furthermore, while the recent employment growth has closed the gap between the three-month moving average trend in employment growth and the breakeven level needed to keep the employment rate constant, the economists highlight that this adjustment was entirely attributable to the 55 years and older age group. This demographic detail suggests that the labor market’s strength may not be as broad-based as the headline numbers imply.In addition to labor market insights, Macquarie economists referenced their team’s Global Economic and Market Outlook in relation to the Bank of Canada’s future policy direction. They predict that the central bank will implement four consecutive 25 basis point cuts per meeting, which would bring the overnight rate down to 2.25% by June 2025.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

“Given the overall strength of the recent economic data, there is little reason for the Fed to consider cutting rates anytime soon,” UBS Senior US Economist Brian Rose said in a note.The nonfarm payrolls report for December showed nonfarm payrolls increased by 256,000, far above consensus expectations of 163,000. The unemployment rate ticked down to 4.1%, returning to June’s level, while average hourly earnings rose 0.3% month-over-month, in line with expectations.The monthly jobs report followed a string of strong labor market including the rise in job openings in November for second-straight month, Rose said. The ratio of job openings to unemployed workers, a key metric for the Fed, is now back near late-2019 levels just before the pandemic.The signs of ongoing strength in the labor market, however, hasn’t forced UBS to ditch its call for two rate cuts in June and September, respectively. But Rose said the base for cuts will “require softer data on both the labor market and inflation in the months ahead.”‘A pivot toward rate hikes is “unlikely,” UBS believes, characterizing tbe “strong but not overheated.”The hot jobs report comes just days after the Fed’s minutes from its December meeting, showed that Fed members believed that the bar for further cuts had risen on concerns about sticky inflation. After the December meeting, the “Committee would likely slow the pace of further adjustments to the stance of monetary policy,” the December meeting minutes showed on Jan. 8.  More

The December report highlighted a substantial increase of 256,000 in headline payrolls, marking the most significant gain since March, although the numbers might reflect seasonal variations that could normalize in January.The household survey, another component of the report, revealed an even more substantial employment increase of 478,000, which effectively countered a previously concerning result from November. Consequently, the unemployment rate edged down to 4.1%. The report also pointed to positive trends in leading indicators, such as a decrease in the number of permanent job losers, signaling a robust job market.In light of these findings, Macquarie’s economists maintain their prediction of limited further monetary easing by the Federal Open Market Committee (FOMC). They foresee only one additional rate cut of 25 basis points, with the fed funds rate expected to bottom out in the range of 4.0% to 4.25% for the current cycle. While the initial expectation was for the cut to occur around March or May, the economists now suggest that the timing might be pushed back due to shifting risks.This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. More

The unemployment rate slipped to 5.4% for Black women last month, reflecting an improvement from November’s rate of 5.9%.
Hispanic men also saw an improvement in the jobless rate in December, as it slipped to 4.0%.
Overall, the jobless rate inched lower in December to 4.1%, reflecting a resilient labor market.

A jobseeker holds flyers during the New York Public Library’s annual Bronx Job Fair & Expo at the the Bronx Library Center in the Bronx borough of New York, on Sept. 6, 2024.
Yuki Iwamura | Bloomberg | Getty Images

The unemployment rate fell for Black women in December, following an alarming increase in the figure for November.
Overall, nonfarm payrolls grew much more than expected in December, rising 256,000 in the month and topping economists’ prediction for a gain of 155,000, per Dow Jones. The unemployment rate ticked down to 4.1% in a sign of a resilient labor market. The data fueled the belief that the Federal Reserve may cut interest rates much less than anticipated this year.

For Black women, the unemployment rate dropped to 5.4% in December. That is down from 5.9% in November, when the jobless rate rose nearly a percentage point for the cohort. The labor force participation rate, which tracks the population employed or seeking work, inched up to 62.4%.
Among Black workers overall, the unemployment rate also declined in December, slipping to 6.1%. That compares to a rate of 6.4% in November and 5.7% in October.
“There were some concerns about the Black unemployment rate going up,” said Elise Gould, senior economist at the Economic Policy Institute, referring to November’s uptick. “It’s still significantly higher than for other groups — and that’s still a concern — but nothing in this report jumps out as particularly problematic.”

Black men also made strides, with the jobless rate declining to 5.6% in December from 6% a month earlier. The labor force participation rate for the cohort inched lower to 68.2% last month from 68.7%.
Hispanic men also saw their unemployment rate improve in December, ticking down to 4% from 4.4% as the labor force participation improved.

Though the unemployment rate among Hispanic women inched up to 5.3% last month from 5.2%, Gould noted that this shift is within the margin of error. “There’s a lot of volatility with the data,” she said. “I would say that things mostly held steady.”
By comparison, the jobless rate fell to 3.6% in December among white workers overall. That’s down from 3.8%. Among white men, the unemployment rate slipped to 3.3% last month from 3.5%, but the figure held steady at 3.4% for white women.

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Nonfarm payrolls growth came in much higher than expected for December.
Gains in employment took place in several different areas of the economy, with health care and social assistance leading for a third straight month.
Retail jobs in December rebounded from large declines in November.

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December’s job report marked yet another month of stronger-than-expected growth, with gains coming from many different parts of the U.S. economy.
Last month, health-care and social assistance jobs saw the largest gains for a third consecutive month, adding 69,500 to payrolls, according to data from the Bureau of Labor Statistics. Including private education, as some economists do, the health-care group’s growth would have risen by 80,000.

Retail trade, which added 43,400 jobs, and leisure and hospitality, up 43,000, scored the second- and third-largest increases last month. Retail trade jobs are in or outside a store, from infomercials to street vendors to vending machines, can sell to consumers or other businesses and involve after-sale services, such as repair and installation, the BLS says.
Government jobs rounded out the top four, posting growth of 33,000 in December.

“Recently, job growth has been very narrowly concentrated in government and health care,” Julia Pollak, ZipRecruiter’s chief economist, told CNBC. “Now, it seems like perhaps it’s broadening out.”
Retail growth, a sharp turnaround from steep losses in November, was bolstered by employment increases across key categories. Notably, clothing, clothing accessories, shoe and jewelry retailers saw an increase of 23,000 positions, while general merchandise retailers and health- and personal-care retailers grew by 13,000 and 7,000 jobs, respectively, according to BLS data.
That rise is “not just a blip,” Pollak said, adding that it reflects other data that shows an improving backdrop in the sector.

For instance, the Federal Reserve Bank of Dallas’ December Texas Retail Outlook Survey showed an acceleration in retail sales activity. The sales index, which measures state retail activity, hit its highest level since late 2021.
“Retailers are more upbeat on 2025 and on the backs of a strong consumer,” Pollak said. “We’ll probably see more movement in the housing market coming soon.”
In contrast to the strength in retail trade, manufacturing – which saw sizable growth in November – led the declines for December, losing 13,000 jobs.
Additionally, mining and logging, and wholesale trade reversed course last month from November. After seeing slight increases two months ago, mining and logging employment dropped by 3,000, while wholesale trade slumped even more, losing 3,500 positions.
Professional and business services, plus financial activities continued to be bright spots. Those two groups were among the nine in 13 sectors that added jobs last month.
“We’re seeing improvement in total vehicle sales, Americans are making big ticket purchases again, [and] businesses are buying vehicles too,” Pollak said. “These trends have been picking up over the last few months; they were taking a while to filter into the labor market, but this report suggests … perhaps a recovery is starting to take hold.”

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