40 percent of workers see wage growth lagging inflation, study finds

Boston Globe

4 days ago

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AVIATION
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AI air fare pricing is a 'bait-and-switch' says American Airlines CEO
American Airlines Group Inc.'s top executive blasted the use of artificial intelligence in setting air fares, calling the practice inappropriate because it could trick travelers. 'Consumers need to know that they can trust American,' chief executive Robert Isom said on a call with analysts after the company reported earnings. 'This is not about bait-and-switch. This is not about tricking.' Isom's criticism of the practice echoes several members of the Congress, who are pushing for answers from Delta Air Lines Inc. on its plans to use AI to help set pricing on as much as 20 percent of its network by the end of this year. Delta said this month that it's still in the testing phase that involves about 3 percent of the network today. Delta says it's testing AI to eliminate manual processes and accelerate analysis for dynamic pricing, a strategy long used by airlines and others to raise or lower fares based on demand, timing, and other factors. It is not using the technology to target customers using personal data, and all customers see the same fares in all retail channels, the carrier said in a statement. 'There is no fare product Delta has ever used, is testing or plans to use that targets customers with individualized offers based on personal information or otherwise,' according to the statement from the airline. 'A variety of market forces drive the dynamic pricing model that's been used in the global industry for decades, with new tech simply streamlining this process.' American is using AI to improve airline operations and recovery from service interruptions and to make it easier for consumers to work with the carrier, Isom said. Employing it in pricing decisions 'is not something we will do,' he said, adding that 'some of the things I've heard are just not good.' — BLOOMBERG NEWS
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MARKETS
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Even as stocks set record, JP Morgan is bullish there are better days to come.
The S&P 500 Index's record-setting spree may be stoking concerns about inflated share prices and a revival of meme-stock froth, but JPMorgan Chase & Co.'s trading desk isn't concerned. Rather, it expects the furious rally in US equities to keep going. 'While bullishness is not yet consensus, client conversations reveal that even those that skewed bearish are throwing in the towel,' the bank's head of global market intelligence Andrew Tyler said Thursday in a note ahead of the market open. Recent progress in trade deals, positive economic data, and rekindling mergers and acquisitions activity should keep powering the stock market, according to Tyler. From a technical standpoint, the rally is also being supported by the combination of the momentum unwind and meme mania making it difficult for traders to hold short positions. The market could even 'take a significant step higher' if macroeconomic data holds up and the impending trade deal between the United States and Europe is sealed with China following closely behind, Tyler said. — BLOOMBERG NEWS
AUTOMOTIVE
Tesla profits slip again amid ongoing slump in EV sales
Tesla on Wednesday reported a slump in profit, the third quarterly decline in a row, as the company cut car prices in an attempt to revive sales. The company made $1.2 billion from April to June, down from $1.4 billion a year earlier. Sales fell to $22.5 billion from $25.5 billion in the second quarter of 2024. Tesla has not reported an increase in quarterly profit since the third quarter of 2024. Tesla's weak earnings are likely to reinforce concern among some investors that CEO Elon Musk is neglecting the car business while he focuses the company's resources on autonomous driving software, self-driving taxis, and humanoid robots. Musk has said those technologies will make Tesla the most valuable company in the world. Tesla has begun testing a limited self-driving taxi service in Austin, Texas, and said Wednesday it would expand the service 'rapidly.' Wall Street has largely bought into that vision, and the company's share price is up about 50 percent since early April. But such taxis and robots are not yet generating significant revenue for Tesla, and the company remains reliant on the car business to finance Musk's futuristic plans. — NEW YORK TIMES
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BIG TECH
Alphabet earnings surge on growth in AI
Whether Google will be a winner in the race for dominance in artificial intelligence won't be clear for at least a year or two. In the meantime, its bottom line is doing just fine. Alphabet, Google's parent company, reported second-quarter results Wednesday afternoon that were better than expected. Revenue rose 14 percent from a year earlier to $96.4 billion, while earnings per share jumped 22 percent to $2.31. Analysts had expected revenue of $93.98 billion and earnings per share of $2.20. 'We are leading at the frontier of AI,' said Sundar Pichai, the company's chief executive. Pichai, who mentioned AI more than a dozen times in his commentary on the quarter, added, 'AI is positively impacting every part of the business.' Investors appeared underwhelmed by the quarterly results. Alphabet shares rose less than 2 percent on the news. One apparent problem: Capital expenditures for the year will be $10 billion higher than the company had projected, it said, because of its booming cloud storage business. Even for Google, the new estimate of $85 billion is real money. A few years ago, Google was spending about a quarter of that sum. Investors want the company to pour enough into new data centers to have competitive cloud and AI businesses but not so much that it affects lush profit margins. That's a difficult balancing act. — NEW YORK TIMES
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