Crypto News: Biden’s economic report card

President Joe Biden's economy stands alone in one respect, Enda Curran writes today. What happens next will depend on Donald Trump. Plus: Charles Schwab gets a fresh start, retailers are rediscovering soft skills to win back customers, and the mistake mainstream politicians make on immigration. If this email was forwarded to you, click here to sign up.

Last week's bumper jobs report brought down the curtain on Bidenomics. Employers added more than a quarter of a million jobs in December, well above what was expected. Unemployment fell to 4.1%, wages increased and revisions to previous data meant that fewer workers lost jobs than first thought. The yearend report card means a total of 2.2 million jobs were added in 2024, below the 3 million increase in 2023 but above 2019's 2 million.

That means Joe Biden is the only president to have had positive jobs growth in every month of his presidency, according to acting Secretary of Labor Julie Su.

That success came with a sting: inflation. The pace of price increases has slowed, but experts worry that inflation will settle at a higher level than where the Federal Reserve wants it to be, meaning interest rates will stay higher, too. Some on Wall Street are even warning about the need for a rate hike.

That's worrying news for consumers who are juggling a surge in living and borrowing costs. Data due on Wednesday is expected to show that inflation in December cooled only a touch. So-called core CPI, a better snapshot of underlying inflation, is forecast to have risen 3.3% from a year earlier. A University of Michigan survey of consumers shows a spike in long-term inflation expectations.

The other blot on Biden's report card has been a surge in government borrowing, which, while credited with helping to keep the economy out of recession, has left a legacy of high costs as bond yields soar. Rates on 10-year notes have risen more than a percentage point in four months.

That's the economic environment Donald Trump will confront when he's sworn in as president on Monday. Trump rarely missed an opportunity on the campaign trail to pummel the Biden-Harris administration for what he claimed was their epic mismanagement. "They've destroyed the economy," Trump said during the campaign debate against his opponent, Vice President Kamala Harris.

Cargo rolls across the border between New Mexico and Chihuahua in Mexico. Photographer: Patrick T. Fallon/AFP/Getty Images

But he's set himself a high bar for success. Trump has vowed "inflation will vanish completely" under his watch, and he says the introduction of new tariffs on imported goods will raise revenue, spur investment and drive economic growth—among other pledges, such as the biggest deportation of undocumented immigrants on record.

There's no shortage of skepticism that Trump will be able to pull all of this off, with economists cautioning that a new trade war or massive deportation campaign would drive up costs and slow the economy.

We don't know how exactly Trump will implement his pledges or what impact they'll have on the economy. But it's clear the incoming president is determined to make his mark, telling a news conference last week that the best is yet to come: "We're approaching the dawn of America's golden age," he said.

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The Future Looks Rosier for Schwab

Chuck Schwab, founder and co-chairman of Charles Schwab, and Rick Wurster, the company's new CEO. Photographer: Desiree Rios/Bloomberg

Two years ago, as relatively obscure regional banks in California and New York sputtered toward oblivion, a far better-known pillar of Main Street finance found itself sucked downward by association. Charles Schwab Corp., the brokerage—and, more recently, bank—founded by a guy Americans know as Chuck from countless TV ads, faltered when its paper losses ballooned. Investors feared it was suffering from a similar mismatch of assets and liabilities.

These days, Schwab is back on more solid footing and out of the headlines again. Although it took a year and a half for the company's stock to fully recover, the unrealized losses have been abating, and Schwab in December upped its 2024 growth outlook to as much as 3.5%. "As storms come, storms also go," says Walt Bettinger, who stepped down as chief executive officer on Dec. 31.

His successor, Rick Wurster, is facing a vastly different financial landscape from the one Schwab encountered when he started his company in 1971. The market then was inhospitable to retail investors, with fixed fees and an uneven playing field that tilted in favor of Wall Street fat cats. Schwab swooped in, aligning the firm's interests with those of its customers by first lowering, then altogether eliminating, costly trading fees, helping reshape the industry.

Schwab has since grown into a colossus with more than 36 million active brokerage accounts, writes Paige Smith. Yet the company is vulnerable to powerful incumbents, as well as upstarts seeking to siphon off its clients: At Charles Schwab, a Fresh Start After a Close Call

Savvy Retailers Return to the Fundamentals

Photographer: Elizabeth Renstrom for Bloomberg Businessweek

Bad in-store experiences have been, in a certain sense, the defining retail trend of the past 15 years. Between understaffing, locked-up products, metastasizing self-checkout kiosks and endless nudges to shop online, it's begun to feel like some retailers resent the necessity of hosting customers at all. Wouldn't it be more efficient and cost-effective, in the end, to operate something more like a big vending machine?

By the time Covid-19 hit, brick-and-mortar chains of all sorts—department stores, drugstores, big boxes, mall brands—had clumsily weed-whacked their in-store operations. They closed scores of locations, starved remaining ones of staff and resources, and filled shelves with cheaper, lower-quality goods their buyers wouldn't have tolerated in decades past. This transformation is a symptom of what Bloomberg Opinion columnist Beth Kowitt describes as "the revenge of the bean counters." Across industries, career bankers and financiers have taken control of a growing number of companies, appointed by boards searching for a steady hand in turbulent times or installed by private equity owners to wring more profit from businesses.

For decades, retailers had been run by merchants—people who directed overall assortment and strategy, usually with careers built if not in merchandising itself, then on the sales floor or as buyers or product developers. Many of them had spent decades in the retailers' now-diminished training programs, which groomed talent from the ground up. They learned how to spot trends, select products and analyze consumer interest. When the Great Recession kicked the legs out from under retail, management consultants, tech experts and corporate financiers without much or any industry experience flooded in, sometimes ascending to the top post, as they did at Gap, Barnes & Noble and, more recently, Nike. These executives were billed as clear-eyed outsiders—people who could transform a dusty industry, unencumbered by the baggage of its traditions.

The results were at best mixed, if not disastrous, writes Amanda Mull in her latest Buying Power column. But smart chains are now bringing back people who actually understand shopping: Why a Radical Retail Experiment Worked for Abercrombie and Barnes & Noble

Politicians Lose by Ignoring Immigration's Costs

Photographer: Margeaux Walter for Bloomberg Businessweek

At the risk of being reductive, there are two reasons centrist political parties lost power last year and others face a reckoning in 2025. The first is inflation: Incumbents were blamed—not entirely fairly—for a global price surge that had more to do with a once-in-a-century pandemic than their own policy missteps. The second, immigration, looks like more of an unforced error.

Here are the numbers. In the US, where Donald Trump made the border with Mexico a top election issue, the foreign-born share of the population had risen to more than 14% by 2023, from less than 5% in 1970. In Canada, it has climbed to 23%. Coincidentally, that's roughly in line with the dwindling share of the population that approves of soon-to-be-ex-Prime Minister Justin Trudeau's performance.

The economic and social affects of immigration are contentious, with benefits spread broadly and costs concentrated on low-skill native workers who find themselves competing for jobs and housing with new arrivals. The shift from a more-or-less steady stream of migrants to a torrent has added to the strain. Populist parties were quick to recognize and capitalize on that. Centrist parties, meanwhile, were slow to pivot.

Focusing on the economic benefits while ignoring the costs of immigration was not a winning electoral strategy in 2024, Bloomberg Economics' Tom Orlik writes in a column for Businessweek. Stressing the negatives worked for populist parties: Centrist Politicians Don't Get That Immigration Is Like Trade

Job Cuts at Meta

That's the share of its lowest performers Meta Platforms Inc. is planning to let go, with the intent of backfilling their roles this year, according to an internal memo sent to employees. CEO Mark Zuckerberg noted that the company would "provide generous severance."