The Week in Business: Cuts to Oil Production
What’s Up? (April 2-8)
Surging Oil Prices
An unexpected move by Saudi Arabia, Russia and other members of OPEC Plus to cut oil production by more than 1.2 million barrels a day, or more than 1 percent of the world’s supplies, sent oil prices soaring at the beginning of the week. Last Sunday night, when energy markets opened, both the American and global oil benchmark prices rose 7 percent. The decision caught everyone off guard because in the days leading up to the announcement, officials said they did not intend to make changes to their policies. There are a few possible factors behind the cuts: Both Russia and Saudi Arabia have been struggling to keep up with production, according to recent reports. And OPEC Plus could be responding to the darkening economic outlook, made dimmer by the failure of several banks. OPEC Plus’s changes to oil production may ultimately have limited effect. Still, oil prices have fallen far from where they were a year ago in the immediate wake of Russia’s invasion of Ukraine.
Slower but Steady Job Growth
Employers added 236,000 jobs in March, about what analysts expected. Recent jobs figures had blown past forecasts, showing the Federal Reserve that the path to cooling the economy would be a winding one. That point came across in last week’s jobs report as well: Despite the steep drop-off from January and February, the March job numbers still show a healthy rate of growth. But it’s clear that the job market’s strength is ebbing. Job openings dropped sharply in February and initial claims for unemployment insurance jumped, according to data released on Tuesday. The March employment data was collected before the collapse of two midsize banks, which may further slow the economy.
Twitter’s Challenge to Substack
Last week, the newsletter platform Substack unveiled Substack Notes, a new feature bearing a striking resemblance to Twitter that allows users to share links, images and whatever is on their mind. In a swift rebuke, Elon Musk, Twitter’s chief executive, on Friday appeared to block all links to Substack. The move is part of Mr. Musk’s effort to shut out his competition by restricting the use of outside links on his platform. It is also another example of how the experience of being on Twitter can change day to day, or even hour to hour, even as many of the changes Mr. Musk has carried out since buying Twitter have been largely cosmetic. Mr. Musk’s changes to the platform’s algorithm, for example, have affected which posts users see in their feeds every day. And users with blue check marks — which in the past served as identity verification for politicians, celebrities and other public figures and organizations but can now be purchased by any user — are still waiting to see if their badges disappear en masse if they don’t pay up. Mr. Musk had said that would happen last week, but it has not yet occurred for most users.
What’s Next? (April 9-15)
Almost Time to File
As tax day rapidly draws nearer — have you filed yet, reader? — the Internal Revenue Service is in the process of transforming how Americans do their taxes. On Thursday, the agency unveiled an $80 billion plan that includes transforming itself into a “digital first” tax collector that would allow Americans to file directly to the federal government at no cost. That aspect of the proposed overhaul is among its most contentious, meeting resistance from the tax preparation industry as well as Republicans in Congress, many of whom oppose any efforts to bolster the I.R.S. The agency’s critics also take issue with its plans to crack down on wealthy tax evaders. The Biden administration wants to reduce the nation’s $7 trillion of uncollected tax revenue, and use the money to fund initiatives like combating climate change and curbing prescription drug prices.
New Inflation Data
A new reading of the Consumer Price Index on Wednesday is likely to show a continued downward trend line for inflation. But as has been the case in recent months, the most telling information will be in the details. While last month’s report showed inflation cooling off in the year through February, a closer look revealed that underlying inflationary pressures remained strong, with “core” inflation — a measure that strips out volatile food and fuel prices — picking up. The nuances of this week’s C.P.I. report are among the many factors that officials at the Federal Reserve will take into consideration as they approach their next rate decision in May. This week, investors will get to hear the Fed’s thinking behind its latest interest rate increase, when the central bank releases its meeting minutes.
Banks’ Report Cards
JPMorgan Chase, Citigroup and Wells Fargo will release their quarterly earnings report on Friday, their first since last month’s bank failures. Analysts have been revising their forecasts for the results, cutting their profit estimates to account for the defensive crouch many banks are likely to assume as they prepare for potential hard times ahead. Many will look to JPMorgan Chase, the country’s largest bank, for a sense of just how far-reaching the shock waves from the banking crisis may be. Jamie Dimon, the bank’s chief executive, led efforts last month to inject $30 billion into First Republic Bank, a midsize bank that was on the brink of collapse after Silicon Valley Bank’s implosion. It was a reprise of a role Mr. Dimon played in 2008 as a rescuer of failed banks.
What Else?
The new publisher of the National Enquirer said he would end the longtime practice at the tabloid known as “catch and kill” — the buying of unsavory stories with the intention of burying them — that is a focus of the hush money case against former President Donald J. Trump. David’s Bridal, one of the largest bridal retailers in the country, is said to be considering bankruptcy, which would be its second in five years. And some managers in corporate America are experimenting with ways to avoid “meeting creep,” when work meetings eat up more time than perhaps they should.
