Americans Won’t Quit... Their Jobs & Spotify Has First Profitable Year, Ever

0:26Race the rudders! Good morning Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, the U.S.-China trade war has kicked off and Barbie is caught in the crossfire. Then employment sections on LinkedIn might be looking a little thinner these days as job hopping gets rarer and rarer. It's Wednesday, February 5th. Let's ride.

0:55Neil, there's a saying my parents used to tell me, do as I say, not as I do. The AI company Anthropic is telling its prospective employees something similar. According to 404 Media, the company that runs one of the biggest AI assistants in the world is asking potential applicants to agree that they won't use an AI assistant to aid in writing their applications. While we encourage people to use AI systems during their role to help them work faster and more effectively, please do not use AI assistants during the application process, The application says, we also want to evaluate your non-AI-assisted communication skills.

1:32Please indicate yes if you have read and agree. Neil, pretty ironic. Very ironic. Very funny. But what if Claude did write a cover letter for Anthropic Financial Times, asked Claude to do it? And I'm going to read a few excerpts that I want to tell, I want to ask you if you'd hire me. Dear Anthropic hiring team, when I first encountered Claude and learned about the philosophy behind its development, something clicked. Here was a company that wasn't just chasing the next big AI breakthrough, but actually stopped to ask, how do we do this right? Yada, yada, yada. I'd love to join a team where getting it right matters more than getting it first.

2:09Let's talk about how I could contribute to Anthropik's mission. I actually didn't hate that whatsoever. And I think you're right. If Anthropik succeeds at its goal of creating a chatbot that can mimic human, that is indistinguishable from a human that it has achieved its goal. So it is like this catch-22 situation that they find itself in. That is better than I could do. I know, Neil. You are absolutely hired. I think it was better. You read my cover letter, too, so you know that that is better than whatever I produced. Now, a word from our sponsor, Wise Business. All right, Neil. I've got a confession.

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4:00The U.S. job market is looking a lot like a banyan tree these days because more workers than ever are staying rooted in place. While job hopping was all the rage during the so-called Great Resignation following the pandemic, These days, the chance to upgrade to a better role is rare unless you work in the Lakers front office. Americans quit rate is down 11 percent from last year and 22 percent from 2022. As more people are opting to keep the job they have instead of venturing out into a tight labor market. It wasn't that long ago that it was just the opposite. The labor market was hot and workers were bopping around in search of better pay and more flexibility.

4:38Employers were happy to oblige because as they emerged from the pandemic, they needed to hire up. But now the Wall Street Journal reports there are just 1.1 job openings per unemployed worker, down from a recent high of two in March 2022. High-paying office jobs have become especially scarce as tech and law have pulled back on hiring. Neil, as we sneak up on Friday's job report, I think it is safe to say that despite 47 consecutive months where the economy added jobs and a 4.1 percent unemployment rate, this is a pretty stuck labor market we are in right now. It is a labor market that is bending but not breaking.

5:15As you mentioned, the unemployment rate is low. People are still hiring. But the number of job openings is much lower than it was. The great resignation of 2021 and 2022 where people were job hopping because they could get bigger salaries at every other place just seems like a very much a distant memory. 1.1 job openings for every unemployed worker. That is half of what it was at its peak. So we're in a cooling labor market now where if you're laid off, which we should mention has stayed steady. It's not the layoffs are not increasing. That rate has stayed the same at a pretty low level for four months.

5:54The thing is, if you're one of those people laid off, finding a new job, especially in professional services in those high-wage, white-collar positions, is getting much tougher. And remember, the Fed's decisions to raise rates definitely has something to do with it. The goal is to tame down hiring so you can tame down inflation. So that has cooled the race for talent. But then also you just look around at what's happening in the workforce. Meta plans to cut 5 % of its workforce this month. Okta, another tech company, is cutting 3%. Estee Lauder says it's cutting up to 7 ,000 workers. Salesforce said it is laying off 1 ,000 workers, but then hiring more salesmen to push AI products, which is kind of indicative of what is happening in general.

6:38And then just look at the federal government right now. They offered this buyout program to the entire federal government, excluding some defense employees and others. But 20 ,000 employees took it. That's just 1 % of the federal workforce. And they are saying that they might have to conduct layoffs to get people to leave. So if that doesn't show kind of the mentality of a lot of people in the labor market, I think it illustrates it perfectly. Right. So, Axios reported that 20 ,000 federal workers have accepted this deferred resignation. The deadline is tomorrow. So, we could see whether that number creeps up.

7:15The White House was targeting 5 to 10 percent of the entire federal workforce of 2.3 million. Remember, this is a doge program from Elon Musk endorsed by President Trump to reduce substantially the amount of federal workers. It doesn't look like that many people have taken it. One percent of the federal workforce, 20 ,000 people. So we'll keep an eye on that as this deadline comes up on Thursday. While the U.S., Canada and Mexico pulled back from the brink of a trade war on Monday, a trade skirmish has still broken out between America and China. Midnight on Tuesday, the Trump administration slapped 10 percent tariffs on all Chinese imports and a sign of its displeasure over fentanyl shipments into the country.

7:59China waited all but a few seconds to punch back, hitting U.S. products like gas, coal, and farm machinery with retaliatory tariffs. It also launched an antitrust investigation into Google and banned the export of some key minerals used in high-tech products. In all, though, it was a carefully calibrated response by Beijing, one designed to gently prod the bear, not poke it. The retaliatory tariffs apply to just$14 billion worth of American products, which is a fraction of the tariffs the U.S. placed on Chinese goods. It appears to be an attempt by Xi Jinping to show he can spar with Trump while acknowledging this is just the first volley in a much longer negotiation around trade and other disputes the two countries have.

8:41Still, while it won't have the impact of a potential North American trade war, China is the U.S.'s third largest trading partner, and these two-way tariffs will have some impacts. For instance, yesterday, Mattel said it was considering raising the price of Barbie and Hot Wheels toys to offset the tariffs. 40 percent of Mattel's products are sourced in China. Right. It does seem like this response was very calculated because, you know, China wants to flex its muscles, say like, hey, we can also retaliate when we need to. But if you look at the goods that they're actually slap these tariffs on, it does not it's not going to affect U.S.

9:15trade relations with China as much as, you know, a much broader push would be. For instance, I mean, some of these tariffs go on natural gas exports, but the U.S. exported 2.3 % of its total natural gas to China in 2023. And then also some of them affect vehicles, but China imported less than 110 ,000 vehicles from the U.S. last year. So, again, mostly it is to, you know, make headlines, show that they are prepared to retaliate if the U.S., you know, applies tariffs as they have. But they're not something that wants to totally remake global trade. Right, because this is part of a much broader negotiation between the two countries.

9:57What's happening here is basically the U.S. and China are building the most powerful deck of cards that they have. So that when they go into the casino to have a card game, they can lay down the best hand possible for whatever concessions they might want from the other country. They can say, OK, well, you want TikTok. Well, I want tariffs off of I want tariffs off of coal or I want I want export controls off of tech. So there are so many issues going on between these two countries from the Panama Canal, which we talked about yesterday, to TikTok, to working on the Russia-Ukraine war, to trade as well.

10:33So this is they're building the deck of cards so they can go into the negotiating room and just play the best possible hand. I think you're trying to say a Pokemon deck because I don't know any casinos that lets you bring in your own deck of cards. I need to go visit those casinos, though. But I think you are right. They're trying to build the best Yu-Gi-Oh deck or, you know, Magic the Gathering deck, not just 52 guards. But you're right. I played outside. I know. I could tell you did. But you are totally right. One final point on this is that China does have a very export-dependent economy. It is kind of dealing with its own issues domestically of a real estate bubble, of young people not being hired.

11:07So it doesn't want to go full trade war in the U.S. because it still needs the U.S. to So usually on Fridays, Neil and I take a look at the market and pick one stock that's done really well and one stock that was a big disappointment. But since the markets have been pretty crazy already, we decided to break the stock of the week, dog of the week glass in case of emergency early to bring you three stocks of the week on a Wednesday. To start and really the impetus for this whole segment, it is Palantir, the stock that just won't quit going up. It finished up 24 % yesterday after it reported better than expected earnings for the fourth quarter and raised revenue guidance going forward.

11:48CEO Alex Karp attributes the company's hockey stick growth to its use of AI. Our business results continue to astound, demonstrating our deepening position at the center of the AI revolution, Karp said. Our early insights surrounding the commoditization of large language models have evolved from theory to fact. Most of Palantir's revenue comes from military deals with the U.S. government, but its commercial unit, where it works with normal Fortune 500 businesses, grew 64 % from a year ago to bring in$343 million. Neil, it is now the best performing stock in the S &P 500 in the young 2025 year, while also being the top performing stock in the index last year.

12:28Investors were pretty hype about what Alex Karp said about his relationship with the Trump administration. too. He said that Doge federal budget cuts would actually be good for the company, which I guess is a little confusing because they get a lot of their revenue from government contracts. But he said, quote, disruption at the end of the day exposes things that aren't working. There will be ups and downs. There's a revolution. Some people are going to get their heads cut off. We're expecting to see really unexpected things and to win. So this guy has always been a bit of an iconoclast in Silicon Valley.

13:04They moved their company to Colorado from Silicon Valley because he didn't really mesh with the culture there. But he's extremely bullish going forward. Investors are best company in the S &P 500 last year, already the best company this year. It is a rocket ship. Our next stock of the week is Meta. Yesterday, Zuck's baby closed higher for the 12th consecutive trading session, which is its longest winning streak ever. Over the past two weeks, it's added more than$235 billion to its market cap, catapulting it to a valuation of almost$1.8 trillion. Nothing's a meta with this company right now. It's firing on all cylinders.

13:41Last week, meta reported record fourth quarter revenue, jumping 21 % from a year earlier, which has allowed it to spend tens of billions of dollars developing AI products. Speaking of, meta was the rare company to get a boost from DeepSeek's breakthrough because like the Chinese rival, it too has made its AI models open source. So DeepSeek's success is seen as a validation of that strategy. Toby, I remember the days everyone was making fun of Meta for trying to make the metaverse happen. Zuck has managed to pivot from that pivot to something that appears to be far more lucrative. Yeah, man, it was coming down to the wire yesterday because it needed to post a gain for the 12th consecutive session to set a record.

14:18It finished up just 1%, but it did finish up. And I do think you're right that Meta's AI strategy is aging very well. You mentioned DeepSeek. Meta's open source model is also open source, which a lot of analysts say. They look very competent when compared to the rest of Big Deck, the rest of the Magnificent Seven, who all went closed source. They're all trying to develop their own proprietary models. They think that open source is the way that you can innovate quicker. Plus, also, Meta's huge in that their chatbot is going to be the most widely used chatbot just by virtue of its distribution, just by virtue of the fact that billions of people use Instagram, use Facebook.

14:56So it is sitting pretty on the AI race. It's continuing to plow money. They've earmarked$65 billion towards, you know, AI investments in 2025 and investors are loving it. Finally, our last midweek Stock of the Week is Spotify. Spotify is an 18-year-old company able to vote and drink in most countries. And yet, despite its age, it had never once reported a profitable year until last year. Spotify posted its first full-year profit ever in 2024, showing that the finance side of the business is finally catching up to its global influence. Spotify made big bet after big bet to build new product features like podcasts and e-books, which dragged on its profitability but set it up for success in the future.

15:39Toss in some efforts over the past two years to focus on efficiency and monetization, and you have a recipe for profitability that investors have been waiting for since the company went public in 2018. Neil, this has been a company that was much maligned for plowing so much money into podcasts and this and that, but now it's all grown up and making money and popped 10 % yesterday. Yeah, I would just encourage people to think about when they open up Spotify now, are they listening to music or are they listening to a podcast? Are you listening to an audio look? There are so many different ways to consume audio in the Spotify app.

16:14That is exactly what their strategy was set forth a few years ago. And they're executing on it because many years ago, people were like, Spotify is just not going to be a good business. Every single time you stream something, they have to pay a royalty to the music business. And that is a bad business model because your costs grow as your users grow. And so, you know, very few people thought that Spotify could square the circle, and they absolutely have done. The bad problem for the rest of us is that when this strategy has worked, it means that Spotify is going to raise prices because they did that last year for the first time in a long time.

16:53They saw very few defections. Not good to hear that. So that means that we probably will see another price hike in the future. Up next, Neil and I talk eggs. eczema isn't always obvious but it's real and so is the relief from ebglyss after an initial dosing phase about four in ten people taking ebglyss achieved itch relief and clear or almost clear skin at 16 weeks and most of those people maintain skin that's still more clear at one year with monthly dosing ebglyss libra kizumab lbkz a 250 milligram per two milliliter injection is a prescription medicine used to treat adults and children 12 years of age and older who weigh at least 88 pounds or 40 kilograms with moderate to severe eczema.

17:34Also called atopic dermatitis that is not well controlled with prescription therapies used on the skin or topicals or who cannot use topical therapies. Epglyss can be used with or without topical corticosteroids. Don't use if you're allergic to Epglyss. Allergic reactions can occur that can be severe. Eye problems can occur. Tell your doctor if you have new or worsening eye problems. You should not receive a live vaccine when treated with Epglyss. Before starting Epglyss, tell your doctor if you have a parasitic infection. Searching for real relief? Ask your doctor about Epglyss and visit epglyss.lily.com or call 1-800 - LILLYRX or 1-800-545-5979.

18:05Tuesday on NBC, Jimmy Fallon and Bozema St. John host a highly anticipated new competition show. I hired 10 creatives from all walks of life. They will be battling it out to see who can impress the world's biggest brands. This is a huge opportunity. This is the battle for the next big idea. This is not Play Play. We're spending millions of dollars. I'm so excited to embark on this adventure with all of you. Make the best idea win! On brand with Jimmy Fallon. Series premiere Tuesday on NBC. Yesterday, we led the show by sharing the grim news that Waffle House was adding a 50 cent surcharge for every egg they sell.

18:43If only it were that over easy. Egg slingers everywhere are being stung by record high prices, leading not only to increased costs for consumers, but also shortages and limits on how many cartons can be bought at a time. In Chicago, some grocers like Aldi have limited purchases to two cartons of eggs. Whole Foods in New York, where prices have reached up to$12 for a dozen cage-free eggs, have placed a three-carton purchase limit. A Bloomberg reporter that tried to find eggs at a shop right in Brooklyn last weekend found the shelves almost completely bare, and the cartons that remained were priced at about$1 per egg.

19:20The egg crisis is also forcing restaurants, not just Waffle House, to adapt. The chain Biscuit Belly is planning to swap out carton eggs with liquid eggs for breakfast staples such as omelets and scrambled eggs, but not for sunny side up. That sounds gross and impossible. Toby, this is a real shock to the ecosystem. Wholesale prices for a dozen large eggs in the Midwest are now about seven times their price from two years ago. That same reporter went to a nearby Costco too and found that they were out of everything except for quail eggs. So it really is becoming, you know, a shortage across the board.

19:56This outbreak hit grocery stores actually the hardest because a lot of the farms impacted by this wave of bird flu supplied the retail sector. So you are seeing it filtered down through grocery stores now into restaurants as well. So it is just crazy the prices that we're seeing. I mean, showing up to a Whole Foods and seeing$12 for a dozen eggs, it is just very jarring right now. And the issue is is that people still love eggs. People are absolutely trying to find a low-cost protein source, but their main low-cost protein source is now getting more costly than ever, which is leading to just these bare pictures of grocery stores that we're seeing kind of flood social media as people try to hoard and stock up on eggs.

20:40And it's leading to people going in search of alternatives, not just restaurants substituting carton eggs with liquid eggs, but you've seen an uptick perhaps in people going to the farmer's market. And Morning Brew Slack blows up with people saying, hey, I got$4 eggs from the farmer's market. Look at me. I'm so cool. Also, we've seen an uptick, and this has been a trend over the past few years, the number of people having a backyard chicken coop as a way to cope with the rising egg costs. We saw that rise during COVID and it still continued. It's very interesting if you are thinking about having an egg coop in your backyard.

21:17It's something I would consider, but the startup costs are quite high. It can run you about$2 ,500. And make sure to check in with your local zoning board too, because your town may not allow for a chicken coop in your backyard. Now, a few years ago, maybe it was a decade ago, in my town in Western Massachusetts, there was a huge drama about someone trying to put chickens in their backyard, their neighbors saying, absolutely no way. It went to the town board. Who won? Who won? Who won? I don't remember. I hope for chicken. I'm guessing the chicken person did not win. I absolutely have thought about raising chickens too because my previous roommates, we had one of those machines that can process food waste and turn it into chicken feed.

22:00So we're like, wait, we have chicken feed here. Now should we buy a chicken coop and raise chickens? We did not check with our zoning board, but we looked up the price of like a smart chicken coop. It was$15 ,000. It's not worth it. Obviously, you can get a cheaper one than that, but it does. I mean, the grand point here is that it's usually even though you think you're saving money by raising chickens, there's a lot of other costs that you're not thinking about and a lot of headaches that you're not thinking about as well. But all the power to you if you do want to raise some chickens. Let's sprint to the finish with some final headlines.

22:30President Trump stunned the world last night when he floated the idea that the U.S. should take long term ownership of the devastated Gaza Strip and turn it into a, quote, Riviera of the Middle East. At a press conference with Israeli Prime Minister Benjamin Netanyahu, Trump said he'd encourage the two million Palestinians who live in Gaza to leave for neighboring countries so the U.S. could rebuild the enclave and create jobs for, quote, the world's people. He did not rule out putting American troops on the ground there. After picking their jaws up off the floor, critics from around the world called this plan ethnic cleansing, incomprehensible, illegal and indicative of a president who only thinks in real estate deal terms.

23:09It was also resoundingly dismissed by Palestinian leaders and major Middle Eastern powers, including Saudi Arabia, an influential force in the region. And if you think about what Trump campaigned on and what the role of Doge is in the government, it is about shrinking America's role abroad. But then you look at this announcement, which shows a worldview much closer to expansionism than to isolationism. It goes against other words and other actions from the administration as well because he has talked about a push to own Greenland. He's talked about a push to own the Panama Canal. He's thrown barbs at Canada about making it the 51st state.

23:44So even though he campaigned on this idea of isolationism, it does look like expansionism is something that is on his mind as well. Also, it is worth mentioning that there's not a ton of legal standing that would allow the United States to unilaterally take control over someone else's territory, not even to mention this forcible relocation of entire population, which would be a violation of international as well. Plus, it's just a gargantuan logistical and financial challenge. So these were some of the question marks around this press conference that he held yesterday. Apple wants you to hang out with people more.

24:20And it released an app yesterday called Apple Invites, which lets you create and share invitations with your friends. Instead of a chunky text message or a Facebook invite, the idea is you create a quick digital invitation that, when it's shared, gives recipients all the info they need about an event, the RSVP button, and adds it to their calendar. Now, obviously, this straightforward and easy-to-use invitation center fits in nicely to Apple's closed ecosystem. For instance, you can create a photo album for people or add a music playlist that uses Apple Photos or Music. And Android users who have tested out say it's pretty obvious that you aren't getting the whole experience.

24:58But still, Neil, who wants to hang out with Android users anyway? Wouldn't be me. The one company that got there that was a little rankled by this announcement was a company called Partiful. I think a lot of people in New York know Partiful, which is an invite app, very similar to what Apple introduced. They were very angry. They posted on X the developer guide for Apple saying, which states, copycats, come up with your own ideas. We know you have them, so make yours come to life. They were angry that Apple was ripping off their app, which it does seem like Apple was kind of doing. Absolutely.