— U.S. Government Credit Rating Downgraded; 324,000 Private Sector Jobs Added in July; Amazon Revamps Grocery Business; Salesforce Expands Layoffs; American Airlines May Order 200 New Planes; NYC May House Migrants in Central Park; Apple High-Yield Account Draws in $10 Billion
1. U.S. Government Credit Rating Downgraded
Today, Fitch Ratings downgraded the U.S. government’s credit rating from AAA to AA+, sparking concern and debate among the government and Wall Street.
Fitch cited expectations of continued fiscal deterioration over the next three years, driven by tax cuts, increased government spending, economic uncertainty, and recurring political standoffs.
U.S. Treasury Secretary Janet Yellen criticized the downgrade as arbitrary and outdated—saying the U.S. economy has strengthened and the debt ceiling standoff was already resolved.
Since the start of fiscal year 2023, the U.S. federal budget deficit has reached $1.39 trillion, up 170% year-over-year.
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2. 324,000 Private Sector Jobs Added in July
According to data released today by the ADP Research Institute, U.S. private companies added 324,000 jobs in July.
The leisure and hospitality sector saw the largest job gains. All U.S. regions except the South recorded growth.
Companies with over 500 employees have cut jobs for three consecutive months, with total layoffs hitting the highest level since the pandemic.
Wage growth continued to slow: employees staying in the same job saw a 6.2% pay increase— the lowest since November 2021. Job switchers’ median salary rose 10.2%, also a two-year low.
Only 250 companies expanded hiring, showing that job growth is highly concentrated.
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3. Amazon Revamps Grocery Business
Amazon is planning a major overhaul of its grocery business, including renovating stores, testing highly automated warehouses, and expanding fresh food delivery to non-Prime members.
Additionally, the company plans to merge Whole Foods, Amazon Fresh, and Amazon.com into a unified shopping platform.
The overhaul may roll out in the coming weeks as Amazon seeks a larger share of the $1.5 trillion U.S. grocery market.
Former Tesco executive Tony Hoggett, who has experience managing brick-and-mortar grocery chains, will lead all grocery-related initiatives.
Amazon’s grocery stores will compete directly with industry giants like Kroger and Walmart.
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4. Salesforce Expands Layoffs
Today, a spokesperson for enterprise software giant Salesforce said the company has laid off around 50 employees in its Irish software sales and customer division as part of workforce realignment.
In January, Salesforce also announced plans to cut around 8,000 jobs by the end of fiscal 2024.
The company saw rapid growth and aggressive hiring in recent years. It is now shifting focus to profitability and has set ambitious margin expansion goals.
Last month, Microsoft also announced additional layoffs on top of its earlier plan to cut 10,000 jobs.
Earlier this year, Salesforce said it would reduce its workforce by about 10%.
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5. American Airlines May Order 200 New Planes
Sources revealed that American Airlines Group is in talks with Airbus and Boeing to purchase at least 100 narrow-body jets, while retiring part of its aging fleet.
The airline is considering Boeing’s 737 Max and Airbus’s A321neo models to replace older 737-800s, A319s, and A320s.
The order could be worth up to $6 billion, and the total short- and long-term orders may reach 200 aircraft.
Currently, 255 American Airlines planes are nearly 20 years old and becoming increasingly expensive to maintain.
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6. NYC May House Migrants in Central Park
New York City is considering setting up migrant shelters in Manhattan’s Central Park and Brooklyn’s Prospect Park.
Deputy Mayor for Health and Human Services Anne Williams said in an interview that the city is evaluating over 3,000 potential sites and all options are on the table.
Mayor Eric Adams has repeatedly criticized the Biden administration for not providing sufficient financial and logistical support to the city.
Over the past 15 months, more than 95,000 migrants have arrived in NYC.
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7. Apple High-Yield Account Draws in $10 Billion
Since launching in April, Apple’s high-yield savings account—powered by Goldman Sachs—has accumulated more than $10 billion in deposits.
Following the launch of the 4.15% interest savings account, 97% of Apple Daily Cash users opted to deposit their cash into the account to earn interest.
In a statement released today, executives from Apple and Goldman Sachs said the companies’ credit card and savings account services have been well received by new and existing users.
Since its 2019 launch, the Apple Card remains exclusive to U.S. customers.
In June, Goldman Sachs reportedly considered ending its partnership with Apple and potentially transferring the role to American Express.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.