Inflation Cools Off in May & Jake Paul Gets into Skin Care

0:00I'm NFL linebacker TJ Watt and this is my personal best. YPB by Abercrombie is the activewear I'm always wearing. That's why I reached out to co-design their latest drop. I worked with designers to create high-performance activewear that holds up to my toughest workouts. Shop YPB by Abercrombie in-store, online, and in the app. Because your personal best is greater than anything.

0:29Good Morning Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, inflation is continuing to cool, but the Fed still won't cut interest rates. What's it going to take, Jerome? Then maybe these billionaires are onto something because a new study reveals that space travel might actually be good for your health. It's Thursday, June 13th. Let's ride.

0:53A rare white buffalo calf has been born in Yellowstone National Park, fulfilling a centuries-old American Indian tribal prophecy. A Lakota legend says that 2 ,000 years ago when food and bison were disappearing, a white buffalo calf woman appeared and taught a tribal member to pray to bring buffalo back to the area for food. When she left, she turned into a white buffalo calf with a legend saying she will return again, and now she has. Neil, Chief Avril Looking Horse, the spiritual leader of Lakota, likened the birth of this calf to the second coming of Jesus Christ. So this is good news after a harsh winter in 2023.

1:30This is super cool. But according to Lakota, it's not just good news. It's also a warning. It's a signal that more must be done to protect the earth and its animals. It's a sign that we need to live in a good way and treat others with respect. So this birth is very special to those people. And we should all pay attention to it. But also very interesting is that according to the executive director of the National Bison Association, There's never been an occurrence of a white buffalo being born throughout history. So I'm sure scientists are pretty interested in this as well. It hasn't been confirmed.

2:01It was just photographed by a visitor from northern Montana who took photos with it and spent time with it for 45 minutes. But they're having a naming ceremony. It appears like this thing was actually born. So we'll just see how this plays out. Now let's hear a word from the purple prince that was promised, Yahoo Finance. Some inflation data came in yesterday. and while you listen to Morning Brew Daily to hear if grocery prices are finally coming down, Neil and I head to Yahoo Finance. When a big government reading drops, Yahoo Finance is the perfect place to get a full sense of how the market is reacting.

2:32You have the trusted news and real-time market data all in one place. Even though Jerome Powell may be more vague than a middle schooler interpreting Life of Pi, Yahoo Finance doesn't leave you guessing. Did you actually read Life of Pi in middle school, Neil? Yeah, of course I did. I love that tiger and I love Yahoo Finance. If you want to check out Yahoo Finance, head to the app or Google Play Store to download the Yahoo Finance app now.

3:19$50 credit for the next one. Get started today at linkedin.com slash campaign. Terms and conditions apply. Unlike your ham and cheese hot pocket you microwave for 30 seconds too long, inflation is actually showing signs of cooling. After months and months of uncomfortably hot readings, May's inflation numbers came in lower than expected. The consumer price index, which is a closely watched basket of goods and services, was flat from April and increased just 3.3 % from a year ago. both of those readings were 0.1 percentage points below expectations as my parents used to say set expectations expectations low then limp over them but hey a beat is a beat and this reading marks the second month in a row that prices weren't rising faster than expected so we'll take it but the good vibes were squashed yesterday afternoon when Jerome Powell jumped on his press conference and reiterated his more careful than expected outlook for interest rate cuts He called this reading modest progress in the fight against inflation.

4:18Was it modest or is Jerome just being a little modest? First of all, this was Barbenheimer, double feature for economics nerds. You get the inflation report in the morning, then you only have to wait a couple hours for 2.30 for Jerome Powell to do his press conference and announce a decision on interest rates and give a talk. And so if you are just loving macroeconomics, yesterday was your day. It's only the seventh time since 2014 that both inflation data and a Fed meeting happened on the same day. You kind of had a little more negative outlook on Jerome Powell's press conference than maybe I do.

4:50I thought overall, that Barbenheimer double feature there was really a B+. We got cooler than expected inflation data. And then Jerome Powell also said that there was good progress on inflation, and the Fed penciled in one interest rate cuts per year. And I think what you have to look at is what did the stock market do? S &P and NASDAQ rose to all-time highs at the end of the day yesterday. So I think overall we got through yesterday, which was a big test for markets. Pretty unscathed. Listen, a B plus might be good for you, but I'm more of an A minus, A plus kind of student. Let's dive into the inflation report a little deeper, though.

5:26Let's look at the holy trinity of gas, food, and shelter. Gas prices were up 2.2 % on the year, but actually fell 3.6 % from April. Grocery prices were only up 1 % from May, which is good news as well. Housing continues to be a big thorn in people's sides, though. Shelter prices are still up 5.4 % on the year. That's the big sticky one that's been very hard just because of how clogged up the housing market is. Shelter has been the big sticking point in this fight against inflation. Yeah, there's also some other good news in terms of airfares dropped by the most in almost a year. prices for cable, satellite, and streaming services declined by the most in nearly 20 years.

6:04And that grocery number is actually very important, very interesting, because it's the fourth month in a row where there's a decline in average grocery prices. That has been such a big topic of discussion that's been hurting people's finances. But as we've talked about on the show many times, every grocery store, it seems, from Target to Walmart to Kroger, are reducing their prices and offering more value to consumers as their budgets continue to be stretched. So it does seem like that is filtering through into the government data as well. Another part of the services sector that we've definitely talked about on the show is car insurance costs.

6:38Car insurance costs have just been exploding. We actually had our first drop in car insurance costs since 2021. That category has been a major driver, exerting immense pressures in recent months on inflation numbers. So finally, If you see the chart of car insurance prices, it's been three years since we finally got a drop. So that is finally, if you own a car, you're breathing a sigh of relief. Yeah. So where do we go from here? What's interesting is that the European Central Bank and the Bank of Canada last week cut interest rates. It doesn't appear like Powell is ready to do that. Markets are pricing in a 75 percent chance of a rate cut in September.

7:16So we have three more months to go until a possible rate cut. This was the seventh straight Fed meeting where the power has held interest rates steady. So the markets are pricing in one rate cut for the rest of the year. And then we'll still have to wait for more inflation data to come out because that is what matters. And so the most important inflation report is the next one. I did not have trade war on my 2024 bingo card, but we are inching our way there after the EU slapped tariffs on electric vehicles coming from China. The trade barriers comes just weeks after the U.S. did the same thing, though the Biden administration's measures were much tougher.

7:54They quadrupled tariffs on Chinese EVs to 100 percent, pretty much blocking them from the market altogether, while the EU's max out at 38 percent on top of a current tariff of 10 percent. What is the reason for this tariffs? Well, the EU and the U.S. say that China's government has been unfairly subsidizing its auto industry, creating an uneven playing field for domestic car producers. They worry that cheap Chinese EVs could flood the market and deplete the ranks of the 13 million people employed in the European auto sector. Now, here's the most intriguing part of the story. You'd expect European auto giants like BMW and Mercedes to fully be behind this, right?

8:33Thank you, Brussels, for having our back, you'd think they say. But no, many European car companies like BMW oppose these tariffs and argue they're actually bad for their business. Toby, what is up with this dissonance? Yeah, it feels like the car makers are saying that you're sacrificing the long game in favor of short-term gains. Because China was a source of nearly one in five European sales of EVs last year. So it's a huge market for them. But also a large part of European automakers' supply chains are tied up in China as well. So when you look, they're saying, let's let us fight it out against them because our fate is too entwined with China to kick off this trade war that wasn't on your bingo card.

9:16It was on my bingo card, so I'm a little ahead of you right now in terms of 2024 bingo. But yeah, Europe is just a huge destination for Chinese EV exports in general as well. So a lot of things swirling here, and it is interesting to see kind of dissonance between the U.S. automaker reaction and the European automaker reaction. Yeah, I mean, barely any Chinese cars are currently in the market in the U.S. I think it's just Polestar, which accounts for 2 % of all EVs in the United States. Meanwhile, more than 30 % of all European imports of EVs come from China. So these two are already interlinked, which makes doing tariffs a lot messier.

9:51When you put tariffs on Chinese exports of EVs, that also means you're putting exports of your own European automakers. You're also taxing that because they have production in China that they export. back to Europe. And I mean, these two, like the EU and China, in terms of their holdings in various auto companies are so intertwined. I mean, Mercedes-Benz stock, 20 % of it is controlled by Chinese entities. Chinese interests control the biggest shareholder in Italy's Pirelli, and then Geely Holding completely controls Volvo. So you can't extract these two like you can with the U.S. and China? The other thing, the other layer to this, too, is that isn't this against the green revolution that's supposed to be taking place in Europe right now?

10:39You have this commitment to this carbon-free, emissions-free future, and it definitely necessitates more movement away from gas cars at a quicker pace than we're currently going. And yet here you are making it that much harder for cheap EVs to be sold and produced around the world and in your countries. So it is very interesting to balance all these multiple positions. And clearly they're not taking as big of a protectionist policy approach as the U.S. because the U.S. was slapping 100 percent tariffs, quadrupling their tariffs. This is a much smaller hike and they are kind of playing it by ear, too, because there are there's doors open as ways around these tariffs because BYD last December said that, hey, we're going to open a factory in Hungary.

11:20It's going to be our first factory in for passenger cars in Europe so there's definitely some wiggle room here because clearly the automakers want to play ball with China in a way that maybe lawmakers don't with his generally annoying persona Jake Paul might get under your skin but now he wants to get on your skin the amateur boxer and internet personality is jumping into the grooming game launching a line of products including a body wash body spray and deodorant yesterday geared towards a younger male audience that will be sold in Walmart. The brand is called W and seeks to ride the growing wave of skincare and grooming products geared towards men.

11:57Neil, lots of interesting wrinkles to this launch. The fact that it's debuting in Walmart with products priced at less than$10, that he chose men's grooming as an industry he thinks is underserved, and the presence of existing competition already. The Rock, John Legend, Idris Elba, and Pharrell all have recently launched skincare or skincare adjacent lines. Do you think W is going to be a W? I guess if you look at every possible business sector to dive into, men's personal care, men's grooming might make a lot of sense, especially for Jake Paul. It is growing at a 10 % annual compound growth rate.

12:33It is expected to grow$100 billion this entire market over the next four years. So he's a young male with a large following, 47 million followers across YouTube and Instagram. So if I'm looking at what possible industries I could dive into, then this one does make sense. Yeah, I do think that he certainly drew a lot of inspiration from his brother Logan's success with his Prime Energy drink. But even though Prime has come crashing down to earth a little bit, it got off to a really hot start. $250 million in sales in 2022, but the hype has died a little bit as a couple lawsuits here and there have popped up.

13:10But Jake Paul likened him and his brother to the Kardashians. But I don't think they're actually the Kardashians because what the Kardashians do is they release products that are very authentic to them. I mean, Kim wears skims. Kylie actually uses Kylie lip kits. It does feel like this might be a little bit of a stretch that Jake Paul is now saying that men's and young men's skin care and grooming is like the most important thing to him, which is kind of the beat that he's been trying to beat the drum on this release because he isn't really a skin care guy. I mean, it's a good industry. Like there is a lot of opportunity.

13:45And he's not paying for less than$10 for a shirt. Right, exactly. So it feels a little disingenuous, even though he's trying to paint this picture that it is very much true to his character. So it's interesting. He might just be trying to capture on the buzzy moment he's having. So he was going to fight Mike Tyson on Netflix, even though that fight has now fallen through. No, it's going to be in November, maybe. Oh, okay. And then they replaced him with someone else because, yeah, Tyson had a little bit of health issues because he is quite old. But he's not wrong. Paul is not wrong by saying the inspiration for this brand was him going into a CVS, looking at the shelves of available deodorant and shampoo, seeing Axe and Old Spice.

14:19And he's like, man, these have been on the shelves for so many decades. Nothing new. There's no disruptors. So he's coming at it with this. I mean, it's a huge flex to be able to launch with Walmart because Walmart is one of the biggest retailers, if not the biggest retailer in the world. So he's coming in with a leg up. But like you mentioned with the Kardashians in Skims and a bunch of all these other celebrity bands, a lot of celebrities think now you can just release any consumer product and everyone will buy it because everyone follows you on Instagram and they'll already love it. But as Prime shows with a huge 50 % drop-off in sales in Q1, that you can't just do it and not pay attention to it.

14:56You have to nurture it. Not everyone can be skims, which is worth more than$4 billion now. Up next, it's my favorite segment of the week and yours too, Neil's Numbers. Eczema isn't always obvious, but it's real. And so is the relief from EBCLIS. After an initial dosing phase, about 4 in 10 people taking EBCLIS achieved itch relief and clear or almost clear skin at 16 weeks. And most of those people maintained skin that's still more clear at one year with monthly dosing. EBCLIS, LibriKizumab, 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.

15:37Also called atopic dermatitis that is not well controlled with prescription therapies used on the skin or topicals or who cannot use topical therapies. EPCLIS can be used with or without topical corticosteroids. Don't use if you're allergic to EPCLIS. 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 EPCLIS. Before starting EPCLIS, tell your doctor if you have a parasitic infection. Searching for real relief? Ask your doctor about EPCLIS and visit ePCLIS.lily.com or call 1-800-LILY-RX or 1-800-545-5979.

16:08Tuesday on NBC. Jimmy Fallon and Bozema St. John host the 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. Welcome back to Neil's Numbers, the segment where I share three stats from the week's news that will be like taking your brain to a steam room.

16:47For my first number, let's head to North Dakota. I've actually been there where voters on Tuesday made it the first state to set a maximum age limit for congressional candidates. If you turn 81 or older by the end of the year before your term would end, you are not eligible to run. The gray hairs sprouted by American lawmakers have become a hot topic in recent years, with Senator Mitch McConnell freezing up twice, Senator Dianne Feinstein going through health struggles while in office, and of course, the two main presidential candidates being way past retirement age. President Biden is 81 and his challenger, former President Trump, is 77, though North Dakota's new law would not apply to them.

17:26Whether the rule stands up to legal muster remains a question mark. In 1995, the Supreme Court said that states cannot set qualifications for Congress besides those listed in the U.S. Constitution, which are the minimum ages, 25 to serve in the House, 30 for the Senate, and 35 for president. The only maximum age on the books now belongs to North Dakota. Yeah, measures like this are only going to get more and more popular, especially in this age of septanagarian, octanagarian politicians. I mean, the average age of freshman members in Congress is 47 years old, and the Senate average age is 64 compared to 57 in the House.

18:03So everyone is getting older. Obviously, the two main presidential candidates are extremely old as well. And, yeah, baby boomers are just dominating Congress in general. So this is definitely going to get widespread support if it actually has the muster to to pass, especially with that Supreme Court kind of stating that you cannot impose those restrictions. We'll see. It probably will make it to the Supreme Court if they do go forward with this case. But it is interesting that if you just look at it from the public perception and public support angle, it's going to have a lot of support. My second number might help explain why you've been a junior analyst going on three years now.

18:44In the current job market, very few American workers are getting promoted. Just 1.3 % of white-collar professionals got promoted in the first three months of the year, according to Bloomberg. That's the lowest rate for any first quarter going back five years. And 2023 wasn't much better, especially for young people. just 2.1 % of Gen Z workers got a title bump last year, down from a high of 2.5 % in 2021. Getting stuck in your role is likely a reflection of the slowing job market. While layoffs are still very low across the board, employers aren't hiring like they had been or forming new teams, so there's less of a need for new managers, the report's author said.

19:22And just to be clear, the current rate of promotions isn't low by historical standards, but it is much slower than the rampant job title inflation we saw during the hiring boom of the pandemic. So it still hurts to be stuck on the same rung of the ladder you've been at for a while. Yeah, it hurts because you probably saw a sibling or a colleague just speed run their careers in that kind of post-pandemic, early pandemic era where people are just getting promoted left and right. So that's why it hurts for these people, even though, yeah, historically, it's not that much of a lower or it's not even a slowdown by historical standards.

19:55But yeah, the labor market has softened a little bit. The power dynamics are switching again. It's shifted back. The pendulum swung back to employers a little bit more. And you're just not getting that. You're not logging on to LinkedIn and updating your your title every six months, like was the case. Maybe we were seeing a few months and years ago and other economic data points really generally back up the malaise that younger workers especially feel without getting these promotions, without getting mentorship, without moving up in their careers. Employee confidence among entry-level staff is near the lowest level in Glassdoor data going back to 2016, so eight years.

20:31And then only 31 % of workers younger than 35 said they were thriving at work last year. That's according to a new report from Gallup, which is down from 35 % the previous year. So if you meet a Gen Z worker, give them a pat on the back, maybe buy them pizza today. For my final number, rewind to a recent time you were on a plane. Maybe the person sitting next to you took their shoes off. Maybe the guy in front of you is watching a steamy movie and it's making you uncomfortable. Maybe you had too many airport beers and the person next to you is annoyed by how much you're talking to them. Airplane cabins are the setting where many of society's unwritten rules collide.

21:07And this week, the polling site YouGov published a survey asking Americans about 30 different airplane behaviors and which they consider acceptable or unacceptable. I promised you numbers. Here are the numbers from the survey. The most abhorrent behavior of all on a plane is letting your kids play in the aisle, which was deemed unacceptable by 86 percent of respondents. Not so far from that is getting drunk on a plane, which more than 80 percent said was unacceptable. Sorry, Dierks Bentley. Less obnoxious, but still obnoxious, is using both armrests when someone is sitting next to them. Nearly three quarters of respondents said this was unacceptable since it causes arm restlessness.

21:47To end on a high note, waking up a teammate to go to the bathroom is widely considered a normal behavior in society, with 72 % saying this was acceptable. Toby, do you agree with these? Anything else stand out to you from this survey? I was pretty happy with this survey. It does seem like, yeah, children play in the aisle, getting drunk. These are things that are not acceptable. Another thing that was very high up was watching a movie or show without headphones, which I unfortunately just had to deal with on a flight. To be fair, the person didn't know. You know, you do the thing, you put in the headphones, then all of a sudden it starts playing out loud and you don't know it.

22:19So I did feel bad for her. But the other thing that people were okay with that I was proud of them for being okay with was waking up a seatmate to use the bathroom. That feels awkward, but everyone understands like you're trapped in there. You got to get out. using a laptop on a tray table, very acceptable. And the other thing I was really looking at was, is it acceptable to recline a seat? And for the most part, over 50 % say it is acceptable, which there was discourse around that for a while. People were anti - Wait, you should have to, they let you. I know, I know. They build the planes so that you are able to.

22:52I agree with that, but there was discourse around there because everyone's got the equal right. Because if someone reclines in front of you, you can recline. I'm reclining away from my microphone. Except the people in the last seat. I know. Well, that's tough. And I have been there. So yeah, generally I think, yeah, these were good. The one thing that I hate most on my personal pet peeve, which people did say was unacceptable, was jumping rows ahead when deplaning. That makes me so mad because where are you going? You're not even making up that much time or progress there. So don't do that if you find yourself in one of those back rows.

23:24Turns out that if you want to look and feel younger, you don't need Botox. You don't need collagen. what you might need is a trip to space. The largest study ever of the effects of space travel on human health dropped this week, and the results were surprisingly positive. These studies looked at blood, immune systems, cardiovascular health, the kidneys, liver, skin, and more of humans who have spent time in space and came to the conclusion that space flight is actually decently safe for the human body. The study's guinea pigs were astronauts from the SpaceX Inspiration4 mission who were actually normal civilians who conducted three-day space flights.

23:59Even though their bodies were stressed and showed dramatic signs of aging during their journeys, researchers found that everything from balanced systems to neurocognitive functioning bounced back to normal levels pretty soon after returning to Earth. But not only did they bounce back, the studies also revealed that space makes you younger in some sense. For instance, your DNA shows less signs of aging while you're up there. It's pretty wild to think about, Neil, but microdosing space for a few days actually slows markers of aging in your DNA. It does. The broad consequences or learnings of these studies of this crew in the mission for in space for three days was that, yes, space has crazy impacts on your body, especially at the molecular level.