Good morning readers. In a fascinating twist of history, a gold pocket watch from the Titanic has found its way into the hands of a survivor from the crypto world's shaky past. Patrick Gruhn, a German fintech entrepreneur and former FTX executive, made the winning bid of £1.175 million (nearly $1.5 million) for this iconic timepiece. Once owned by American magnate John Jacob Astor IV, the watch bears witness to Astor's noble act of self-sacrifice during the ship's tragic sinking. Gruhn, known for his crypto ventures, now plans to showcase the watch in U.S. museums, blending a touch of timeless elegance with contemporary fascination.

Let’s jump into today’s storylines.

In today’s digest:

• When paychecks play catch-up with inflation

• Headline Hustle: Amazon sees profits triple in first quarter, justice department reclassifies marijuana as a lower-risk drug, EU puts Meta in its crosshairs over misinformation ahead of elections

• Walmart’s AI aims to trim waste waistline

• Pulse Points: What’s Trending

ECONOMY

Hot paychecks stirring up a cold sweat at the Fed

While you were checking if your wallet felt any thicker this quarter, the Federal Reserve was probably popping antacids.

In the first quarter of 2024, the race against rising costs took a heated turn. According to the latest data from the Bureau of Labor Statistics, compensation growth, which includes wages and benefits, jumped 1.2%—outpacing the anticipated 0.9%. It’s clear, our wallets are feeling heavier, but not without stirring some worry at the Federal Reserve.

When good news is bad news

Economists are keeping a sharp eye on these numbers, particularly because fast-climbing compensation might fuel inflation further, rather than cooling it down. “This isn’t going to calm any nerves at the Fed,” said Scott Anderson, chief economist at BMO Capital Markets.

While wages and salaries held steady with a 1.1% increase, it was the surge in benefits costs—from 0.7% to 1.1% last quarter—that really pushed the needle. On the flip side, adjusting for inflation, real wage growth remained modest at just 0.8% year over year.

Rate cuts might take a while. The surprise in these numbers led to a chilly reception in the stock market, with Dow futures dipping by about 185 points in premarket trading. The data has complicated the Fed's task just as it convenes for a policy meeting, with all signs pointing to steady interest rates amidst this hotter-than-expected economic data.

With wage gains still outpacing the pre-pandemic average and the Fed's comfort zone, the implications are twofold.

• On one hand, robust wage growth underpins strong consumer spending, which is crucial for sustained economic momentum.

• On the other, it complicates the Fed's strategy to temper inflation, which has been stubbornly high.

Zoom out: Despite the economic tension, the strong labor market is a silver lining, promising sustained consumer spending and overall economic resilience. This week's upcoming jobs report and additional labor data will further clarify the full picture, but for now, it's clear the U.S. labor market isn't just surviving; it's thriving—much to the Fed's chagrin.

IN THE KNOW

Headline Hustle

📈 Amazon triples its profits, exceeding Wall Street expectations. Amazon reported a strong first quarter with earnings and revenue surpassing expectations, driven by robust growth in its advertising and cloud computing segments. The company recorded a revenue of $143.3 billion and earnings per share of 98 cents, outperforming the forecast. Notably, Amazon Web Services generated $25 billion, highlighting its significant contribution to the operating profit. With a strategic emphasis on cost-cutting and efficiency, Amazon anticipates continued profitability, projecting operating income between $10 billion and $14 billion for the next quarter.

🍀 Justice Department reclassifies marijuana as a lower-risk drug. The Biden administration's move to reclassify marijuana as a Schedule III controlled substance marks a historic shift in drug policy. Acknowledging its medical benefits, this recommendation, if approved, could significantly impact research, industry regulations, and public perception. Despite bipartisan support, the formal rulemaking process is expected to be lengthy. While the move could ease criminal consequences and regulatory barriers for cannabis businesses, it won't resolve the federal-state conflict.

🎯 Meta in EU’s crosshairs over disinformation ahead of elections. The European Union has launched an investigation into Meta Platforms' handling of disinformation and misleading advertising ahead of the EU elections in June. This move follows concerns that Meta's platforms, including Facebook and Instagram, may have violated the Digital Services Act by failing to address deceptive advertising and political content adequately. The EU's executive arm, the European Commission, has initiated formal proceedings against Meta, potentially leading to fines of up to 6% of the company's global revenue.

AI

When your produce and sense of fashion get a tech-savvy makeover

Ever thought your bananas could use a bit more brains? Well, Walmart certainly thinks so.

In an ambitious leap toward sustainability, Walmart is rolling out a new in-store artificial intelligence system that could revolutionize how perishable items—like those chatty bananas—are managed. By arming store employees with AI-driven tools, the retail giant is tackling food and fashion waste head-on, ensuring that nothing goes bad on its watch—or out of style too quickly.

• The tech works by allowing associates to scan products, assessing their condition from ripeness to relevancy.

• For that bunch of bananas or seasonal sweater nearing its shelf life, the AI can suggest markdowns, returns, or donations, streamlining decisions that were once purely human guesses. It's all about making smarter, quicker decisions to keep waste to a minimum.

With 60 million tons of food wasted annually in the U.S. and clothing waste not far behind, solutions like this are not just nice-to-have—they're essential. And Walmart isn't alone in this quest. Companies like Winnow and Shelf Engine are deploying similar AI tools across the food industry, optimizing everything from inventory to pricing strategies.

Looking ahead…this initiative is part of a broader commitment by Walmart to eliminate operational waste in North America by 2025, a target that not only benefits the planet but also the bottom line. By reducing waste, Walmart aims to pass on savings to customers and further invest in its growth—proving that when it comes to retail, being environmentally savvy also means being economically smart.

SNIPPETS

Pulse Points

• Walmart, the country's largest grocer is launching a premium food line called Bettergoods this year to attract higher-income shoppers and encourage existing customers to spend more.

• Ten years after pioneering the "women make the first move" model, Bumble is introducing a new feature called "opening moves," allowing female users to set prompts that male users can respond to, thereby initiating conversations.

• Eight U.S. newspaper publishers have sued Microsoft and OpenAI in a New York federal court, alleging unauthorized use of their articles in AI products and false attribution of information.

• Former President Donald Trump acquired an additional 36 million shares of Trump Media Technology Group, as revealed in a recent SEC disclosure.

• Dave & Buster’s is enhancing its app by introducing a social wagering feature that allows customers to place $5 bets on arcade games like Hot Shots basketball and Skee-Ball, with plans to launch in the coming months.

Was this email forwarded to you? Feel free to sign up using the following link: https://www.pulseofprogress.info/

⚡️ Want to feature in this newsletter?

Elevate your brand's visibility to over 7,000+ decision makers by partnering with Pulse of Progress and seize the chance to connect with our rapidly expanding, highly engaged audience! Reach out for more details.