Daily Business Briefing
June 22, 2021, 7:52 a.m. ET
June 22, 2021, 7:52 a.m. ET
breaking
European Union regulators said on Tuesday that Google was the subject of a new antitrust investigation for potentially abusing its dominance in the online advertising market to box out competition.
The investigation, which takes aim at the heart of Google’s business model, is part of a broader push by the European authorities to clamp down on the world’s largest technology companies. Amazon, Apple and Facebook are also the subject of antitrust investigation from the 27-nation bloc, and the European Union is drafting new antitrust and digital services laws to further tighten oversight of Big Tech.
Online advertising has helped Google become one of the world’s most valuable and powerful companies. But publishers such as News Corporation have long complained that Google’s dominance makes it harder to attract advertising revenue from their websites.
The European Commission, the bloc’s executive body, said the investigation was focused on the display advertising market where Google offers a number of services to both advertisers and publishers. The company collects data to target advertising, sells ad space on websites across the internet and offers services that work as an intermediary between advertisers and publishers.
Google settled a similar antitrust investigation by the French authorities this month, with the company agreeing to pay roughly $270 million in fines and make some changes to its advertising practices in France.
In the European Union inquiry, “we are concerned that Google has made it harder for rival online advertising services to compete in the so-called ad tech stack,†Margrethe Vestager, the European Commission’s executive vice president in charge of competition policy, said in a statement.
“A level playing field is of the essence for everyone in the supply chain,†she said.
Ms. Vestager is a familiar adversary for Google. The company has been charged with violating European Union antitrust laws three times in recent years, resulting in billions of dollars worth of fines in cases about Google’s online shopping service, Android mobile operating system and other advertising practices.
All of the cases are under appeal by Google.
Jerome H. Powell, the Federal Reserve chair, will offer an optimistic take on the United States economy but little hint at what comes next for monetary policy in prepared remarks set for delivery before House lawmakers on Tuesday afternoon.
Economic growth this year “appears to be on track to post its fastest rate of increase in decades,†Mr. Powell is scheduled to say, while noting that the strength marks recovery from very low levels.
His testimony comes on the heels of the Fed’s meeting last week, in which officials held interest rates steady but suggested they were expected to rise modestly from near-zero levels by the end of 2023.
Mr. Powell will tell lawmakers that “conditions in the labor market have continued to improve, although the pace has been uneven,†and that “job gains should pick up in coming months as vaccinations rise, easing some of the pandemic-related factors currently weighing them down.â€
Although inflation has picked up sharply — fueling debate in Washington and on Wall Street over whether the government has overdone its pandemic response — the Fed chair will say that the recent pace of price gains is unlikely to last. But he will give little guidance about what the combination of a strengthening economy and stabilizing prices will mean for central bank policy.
“The Fed’s policy actions are guided by our dual mandate to promote maximum employment and stable prices for the American people, along with our responsibilities to promote the stability of the financial system,†Mr. Powell will say, without getting into much further detail.
The Fed has held its policy interest rate close to rock bottom since March 2020 and is buying $120 billion in government-backed bonds each month, policies that are meant to keep many kinds of borrowing cheap, pushing money through the economy and bolstering demand.
Mr. Powell’s testimony comes after the Fed’s June policy meeting fueled days of selling in the stock market. Policymakers released an optimistic set of economic projections, and more than half penciled in rate increases in 2023 — earlier than they had previously expected. Mr. Powell downplayed the significance of those projections, but did offer a sunny economic outlook, and signaled that the Fed was beginning to talk about when and how to slow down its asset purchases.
The Fed chair is likely to face questions about the central bank’s vast coronavirus rescue package, which saw it backstopping corporate bond markets, municipal debt and even midsize businesses amid market turmoil last year. He is scheduled to speak before the Select Subcommittee on the Coronavirus Crisis.
Millions of workers have voluntarily left their jobs recently, one of the most striking elements of the newly blazing-hot job market.
According to the Labor Department, nearly four million people quit their jobs in April, the most on record, pushing the rate to 2.7 percent of those employed.
The rate was particularly high in the leisure and hospitality industry, where competition for workers has been especially fierce. But the number of those quitting registered across the board, The New York Times’s Sydney Ember reports.
Economists believe that one reason more workers are quitting is simply a backlog: By some estimates, more than five million fewer people quit last year than would otherwise be expected, as some workers, riding out the labor market’s convulsions, stuck with jobs they may have wanted to leave anyway. (And the millions of involuntary job losses during the pandemic surely accounted for some of the reduction in quitting.) Now that the economy is regaining its footing, workers may suddenly be feeling more emboldened to heed their impulses.
But another factor may be the speed with which the economy has reawakened. As the pandemic has receded and the great reopening has swept across the country, businesses that had gone into hibernation or curtailed their work force during the pandemic have raced to hire employees to meet the surging demand.
At the same time, many people remain reluctant to return to work because of lingering fears of the virus, child care or elder care challenges, still-generous unemployment benefits, low wages or other reasons.
The result has been an explosion of job openings, despite a relatively high unemployment rate, as businesses struggle to recruit and retain employees — a dynamic that has placed power more firmly in workers’ hands. With employers offering higher wages to attract candidates, many workers — especially in low-wage positions in restaurants and hotels — are leaving their jobs and jumping to ones that pay even slightly more.
Lumber prices soared over the past year, frustrating would-be pandemic do-it-yourselfers, jacking up the costs of new homes and serving as a compelling talking point in the debate over whether government stimulus efforts risked the return of 1970s-style inflation.
The housing-and-renovation boom drove insatiable demand for lumber, even as the pandemic idled mills that had already been slowed by an anemic construction sector since the 2008 financial crisis. Lumber futures surged to new heights, peaking at more than $1,600 per thousand board feet in early May, The New York Times’s Matt Phillips reports.
But since then, the prices of those same plywood sheets and pressure-treated planks have tumbled, as mills restarted or ramped up production and some customers put off their purchases until prices came down.
It’s a dance of supply and demand that has reassured many experts and the Federal Reserve in their belief that painful price jumps for a range of products like airline tickets and used cars will abate as the economy gets back to normal.
Lumber prices in the futures market, for example, are down more than 45 percent from their peak, slipping below $1,000 for the first time in months. That’s still high — from 2009 to 2019, prices averaged less than $400 per thousand board feet — but the sell-off has been gaining momentum over the last few weeks. The price has fallen in 11 of the last 12 trading sessions, including a 0.5 percent drop to settle at $900.80 on Friday, according to FactSet data.
Why have prices fallen so fast? It’s partly because they set off a surge of production at the country’s roughly 3,000 sawmills.
Mostly concentrated in the rich belt of Southern yellow pine that stretches from the woods of East Texas to the Carolinas, mills buzzed back to life in a rush to sell wood for prices few would have imagined possible a couple of years ago.
“Nobody’s not running capacity right now,†said Joe Hankins, sales manager at Hankins Lumber, a sawmill and timber company in the north-central Mississippi town of Grenada.
Officials at the Fed, who have long argued that any price rise would be temporary, view the situation in much the same way.
“Our expectation is that these high inflation readings that we’re seeing now will start to abate,†the Fed chair, Jerome H. Powell, said at a news conference on Wednesday after the central bank’s most recent decision to leave interest rates unchanged. “That’s what we think. And it’ll be like the lumber experience.â€
