THE HOT STORY

Remote work fears may be leading employers to cut back on junior hiring

The Wall Street Journal reports that some employers are cutting back on junior hiring because widespread remote work is making young talent a less attractive value proposition. Researchers from the London School of Economics, who recently observed that the amount of hiring devoted to entry-level roles across some countries has fallen more than 14% since 2019, said the return-on-investment after the hiring of an entry-level worker is dependent on the rate at which that young employee learns. Since remote work slows that process, employers prefer to invest instead in older workers, the researchers argue. “The implication is stark . . . A persistent contraction of this kind hollows out the pipeline of future experienced workers, causing declines in aggregate productivity as well as imposing cohort-specific scarring,” they wrote.

Wall Street Journal

ECONOMY

IMF: U.S. economy shows strong momentum as fund backs Fed's rate pause

The International Monetary Fund (IMF) said the U.S. economy continues to demonstrate solid growth momentum and endorsed the Federal Reserve's decision to keep interest rates unchanged, while emphasizing that any future policy moves should be guided carefully by incoming economic data. IMF spokesperson Julie Kozack highlighted revised first-quarter GDP growth of 2.1% on an annualized basis, up from the previously reported 1.6%, citing a rebound in government spending, strong investment, and high labor productivity as signs of the U.S. economy's resilience. She said inflation remains above the Fed's 2% target but is expected to gradually ease, reaching that objective by the end of 2027. Ms. Kozack also welcomed the commitment of new Federal Reserve Chair Kevin Warsh to maintaining price stability, saying the central bank's decision to hold rates steady last week was appropriate given current economic conditions. She added that any future adjustments to monetary policy should be made cautiously and calibrated to evolving economic data.

Reuters

CORPORATE

CFOs say firms have largely absorbed oil price shock despite slower growth outlook

A Federal Reserve survey of more than 500 U.S. chief financial officers found that most companies have largely absorbed the recent oil price spike linked to the U.S.-backed conflict with Iran, with limited impact on customer demand and only modest price increases passed on to consumers. The quarterly survey, conducted by the Federal Reserve Banks of Richmond and Atlanta and Duke University, showed CFOs lowered their U.S. economic growth forecast to 1.8% from 2.1%, although optimism about their own businesses improved and hiring plans remained steady.

Reuters

TAX

California voters to decide on billionaire wealth tax in November

California voters will decide in November whether to approve a one-time 5% tax on residents with a net worth exceeding $1bn after supporters allowed the California Billionaire Tax Act to remain on the ballot. Backed by the Service Employees International Union Healthcare Workers West, the proposal is expected to raise an estimated $100bn to help fund Medicaid and other state services following federal spending cuts. Supporters say the measure is needed to protect public services, while opponents, including Gov. Gavin Newsom and a coalition of healthcare, education, and business groups, argue it would encourage wealthy residents to leave the state and make California's tax revenues more volatile. The union unsuccessfully offered to reduce the proposed tax rate to 2% in exchange for Newsom's support before the deadline to withdraw the measure expired.

The Hill

Los Angeles Times

US News and World Report

STRATEGY

Volkswagen aims to cut up to 100,000 jobs in next years

Manager Magazin has reported that Volkswagen CEO Oliver Blume aims to cut up to 100,000 jobs worldwide and discontinue production at four of the group's German plants, as he seeks to reduce investment by around 15% to just over €130bn ($148bn) over the next five years. "The entire group, including its brands and subsidiaries, must undergo far-reaching change," a Volkswagen spokesperson said.

Reuters

LEGAL

Supreme Court sides with Cisco in Falun Gong lawsuit

The Supreme Court has ruled 6-3 that Falun Gong practitioners cannot sue Cisco for allegedly aiding the Chinese government's surveillance and torture of the spiritual movement. The decision limits the ability of foreigners to hold U.S. corporations liable in U.S. courts for aiding and abetting alleged human rights violations overseas. “In truth this class is a null set. And because courts cannot create new rights of action to remedy violations of internal law, there is necessarily no liability for aiding and abetting such violations,” Justice Amy Coney Barrett wrote for the majority. The lawsuit, initiated in 2011 by Chinese nationals and a U.S. citizen, accused Cisco of knowingly providing technology that facilitated the persecution of Falun Gong members. Although a federal judge dismissed the case in 2014, the U.S. Court of Appeals for the 9th Circuit revived some claims in 2023, leading to Cisco's appeal to the Supreme Court.

The Hill

Law

U.S. News

INTERNATIONAL

Korea opens up to a 24-hour trading cycle

South Korea launches a 24-hour won-dollar trading market from July 6, with banks trialling the system from Monday. Seoul is removing safeguards that have been in place since the won's collapse during the 1997 Asian Financial Crisis,as it pursues an open and fully accessible currency that is a requirement of index provider MSCI's coveted "developed market" designation. "When I first came to the market, it was a 9-to-3 game," observes Namkoong Taehun, who is part of the 37-member FX trading team at Hana Bank in Seoul. "Now, the market has expanded exponentially . . . We are afraid that our workload will increase significantly."

Reuters

Finland wants its leaders to plan for worst-case scenarios

Finland’s National Defense Course is designed to get leaders, and future leaders, thinking about how to plan for, and respond to, worst-case scenarios so that they can help keep the country functioning during a national emergency. The highly coveted invitations to the secretive training programme are sent to Finland’s most influential chief executives four times year. Former Nokia Oyj CEO Pekka Lundmark says the training changed how he approached new executive roles; each time he stepped into a new one, he would review a company’s crisis plan.

Bloomberg

China says it has right to ⁠target ⁠people outside of its borders ⁠on ethnic unity

China's new law on ethnic unity allows the government to target individuals outside its borders who undermine it. The law, which was passed in ‌March to create a "shared" national identity among the country's 55 ethnic minority groups, goes into effect on July 1, and includes a clause saying that people and groups beyond the borders of the People's Republic of China can be held legally accountable for undermining "ethnic unity and progress or inciting ⁠ethnic ⁠separatism." Vice Justice Minister Hu Weilie said: "This provision is based on China's national conditions, conforms to legal principles, and is consistent with international practice. It is a legitimate, lawful, necessary, and feasible legal provision . . . Countries around the world all have the right to prevent separatist and destructive activities, and to maintain social solidarity and normal order, through domestic legislation."

U.S. News

OTHER

Sony ends Japan sales of Aibo robot dog after eight years

Sony will discontinue sales of its ERS-1000 Aibo robotic dog in Japan once existing stock is sold, ending domestic sales of the current model eight years after its successful 2018 launch. The company said customer support, replacement parts and cloud subscription services will continue, while sales of Aibo will remain available in the US, where it retails for more than $3,000. The move marks the latest chapter in Aibo's history, with the original robotic pet first launched in 1999 before being discontinued in 2006 and revived in 2018. Sony said the Aibo business will continue and indicated it plans to expand related products and services, although it did not provide details on a potential next-generation model.

The Japan Times

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