Inflation on Target, Not Worse
The Federal Reserve’s preferred inflation gauge, the PCE price index, fell 0.1% for the month of June, putting annual inflation at 3.7%, with core PCE in line with forecasts at a 3.3% annual rate. Not a big win, but not the upside inflation surprise markets were bracing for. The PCE is the Personal Consumption Expenditures Price Index, a measure of inflation published monthly by the U.S. Bureau of Economic Analysis (BEA). It tracks how much prices are changing for the goods and services that people buy. That’s because PCE accounts for the fact that people substitute between goods when prices change (e.g., switching from beef to chicken if beef gets expensive), which CPI historically captures less well.
Source: Federal Reserve
Tokenomics
Call it “tokenomics”: the study of how this limited resource is created, traded, and converted into things people want. This new field has emerged to measure the return on the growing amount of money companies are pouring into AI. Called “tokens”, the units of computing power in which AI is sold, are hitting engineers and boardrooms. Questions are arising which ask, “What is AI even good for?”, “How do you know what you are buying, and measure the value of what it enables?”, “How is it priced, and how will those prices change in the future? What does the spending on it displace?” I think the answers to these questions are few and far between for the time being.
Source: New York Times
AI Is Coming for Your Paycheck
There has been much written about the threat of job losses from the growing use of AI. While jobs may certainly be at risk, what seems to be more of a risk is the potential for sharp declines in wages for jobs with a high exposure to AI. A white paper from Apollo Global Management saw an average 6.7% decline in real wage growth after 2023, the year ChatGPT first went viral. The declines were the worst for low-income earners. There was no “significant effect” observed among the highest paid workers.
Source: Apollo Global Management
Boeing 737 Max 7 Win
On August 3, the FAA gave long-awaited approval of the 737 MAX 7, the smallest version the company is making. It’s considered a milestone given that Boeing has been waiting nearly a decade to get it on the market. The MAX 7 offers 135 to 160 seats while providing about 10% more range potential than other MAX planes. The Boeing 737 MAX 7 began testing in 2018.
Source: Wall Street Journal
Loyalty Club Profits
The 2024 SEC filings by major airlines show that their credit card loyalty programs have become major revenue contributors. American and Delta reported more than $6 billion each while United and Southwest reported more than $2 billion each from such programs. Similarly, the Idea Works Company 2025 Yearbook of Ancillary Revenue found United’s total loyalty-related revenue at $10.6 billion, Delta’s at $10.2 billion, and American’s at $9.2 billion in 2024, with Southwest reporting $5.5 billion in loyalty program revenue.
Source: Business Insider, Idea Works Company
Project Sunrise
In 2017, Qantas Airlines announced Project Sunrise, a plan to connect Australia to London and New York with direct flights that would reduce current travel times by up to four hours by doing away with transfers in Asia, the Middle East or North America. On July 28, Qantas flew a specially manufactured Airbus non-stop from Melbourne, Australia to Toulouse, France, covering 12,460 nautical miles in 24 hours and 24 minutes. While this flight didn’t have any passengers, Qantas aims to offer the first nonstop flights between Sydney and London starting next year.
Source: New York Times
The End of Coffee Yogurt
Over 40 years ago, Dannon Yogurt introduced “Dannon Coffee Yogurt” (aka DCY). DCY lovers would scour stores for DCY, often clearing the shelves when they found some. Each 5.3-ounce cup contained about 32 milligrams of caffeine, or about a third of an 8-ounce cup of coffee. Earlier this year, Dannon abruptly stopped selling the product. For DCY lovers, the move was one last affront. Over the years, the company has eliminated flavors, including cherry, while shrinking its containers—from eight ounces to six to 5.3. Last week, as the Wall Street article was being prepared, hopes of a return of DCY were bolstered by the company to the reporters that “DCY will come back.” Time will tell.
Source: Wall Street Journal
Speedcubing
Back in June, Tommy Cherry, a champion “speedcuber” (A Rubik’s Cube Solver), set a world record for solving the puzzle while blindfolded. He accomplished the feat in 11.67 seconds. The contestant first studies the scrambled cube with sight (memorizing the entire configuration), then puts on a blindfold and solves it purely from memory. The clock includes both the memorization phase, and the actual solve. Personally, I have never been able to solve the puzzle, so I am impressed.
Source: UPI
