The Unemployment Rate Hits 4-Year High & Elon Getting $1T from Tesla?

0:00Tuesday on NBC, Jimmy Fallon and Bozma 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 I do win! On Brand with Jimmy Fallon. Series premiere Tuesday on NBC.

0:35Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, America's labor market is officially cracking. Then Tesla's board wants to make Elon Musk a trillionaire. It's Monday, September 8th. Let's ride.

0:52Toby's back. We are so glad to see you return to the starting lineup, but also want to shout out our deep roster of bench players, Kyle and Dave, who put up some pretty impressive performances last week while Toby was in Europe. First question, Toby, did you bring me back any Legos from Denmark. And second, what is this striped shirt you're wearing? It's a little Where's Waldo vibe from Copenhagen. But yes, Neil, it's good to be back. Thanks for holding down the fort. My time off was good because I actually followed the peak end rule. It's a rule that says you will judge an experience based on how it felt during its peak moment, aka its most intense, and its end moment, not the total sum of all that went on.

1:29So for me, the peak was the wedding that I was the best man at in England. And for the end, I ran 10 miles with my brother and fiance my last day in Copenhagen. So for me, that's a 10 out of 10 vacation. If you're planning your vacation, remember the peak and heuristic and also make sure you find a co-host for Neil to chop it up with when you're gone. Shout out to Kyle. Shout out to Dave for filling in for me. I guess thanks to Kyle for being the peak and thanks to Dave for being the end. And now a quick word from our sponsor. Indeed, Toby, how would you go about finding top talent? Competitive dreidel tournament.

2:02Not that kind of top, Toby. I mean the kind you find on Indeed. They've been innovating with AI-powered solutions for job seekers and employers that are transforming the world of work. The scale of their data is unreal, and they're utilizing it to help accelerate and simplify the job search and hiring processes. They're getting into all of this and more at FutureWorks September 10th and 11th, and Morning Brew will be there for it all. Learn more at IndeedFutureWorks.com slash brew. That's IndeedFutureWorks.com slash brew. Hold on to your job for dear life because finding a new one right now ain't going to be easy.

2:36In a doozy of a jobs report on Friday, the U.S. economy added just 22 ,000 jobs in August, way below expectations, while the unemployment rate ticked higher to 4.3%, the highest level since 2021. Not only that, because of revisions in the data, we learned that the labor market was weaker over the summer than previously thought. In June, the economy actually lost 13 ,000 jobs, the first time job growth was negative since COVID, which makes it official. This is the slowest labor market in 16 years outside of the pandemic, and the situation has deteriorated significantly since May. Lots of sectors posted outright declines last month, including in many blue-collar industries that President Trump promised to boost.

3:19Manufacturing is in an outright recession, shedding another 12 ,000 jobs. That's six straight months of employment losses for factory workers. Manufacturing employment is now down by 78 ,000 for the year. The situation isn't any better in other blue-collar sectors that have been stung by the highest tariffs in nearly a century. Construction lost jobs for the third straight month, and wholesale trade, which encompasses transportation and warehouses, has lost 32 ,000 workers since May. The unnerving jobs report will spur the Federal Reserve into action, easing monetary policy to prevent an all-out collapse in employment.

3:54The central bank is now a mortal lock to cut interest rates at its upcoming meeting next week, and traders up their bets that the Fed will slash rates multiple times through the end of the year. Toby, this was a bleak report. Very bleak, and it does show that the revisions are harder to dismiss now as a blip. These are systemic, not just statistical noise anymore. And we are definitely in a blue-collar recession right now, which is exactly the industries that Trump's policies were supposed to help revive. Instead, those exact industries are shrinking. I'm just sitting here thinking what we would do without health care right now because health care is the only sector of the job market that is continuing to have job gains.

4:35They added 47 ,000 positions. Basically, we're just in an aging population right now. You need more people to help those people. So I just can't believe how bad certain pockets of the market are, the manufacturing and blue collar, and then how bad of a place we would be in without this very, very strong health care market. Yeah, so far in 2025, the economy has added an average of roughly 74 ,000 private sector jobs a month. 64 ,000 of those on average have been in health services. So without that, we would be growing our jobs by about 9 ,400 jobs a month, which is essentially nothing. So according to Rebecca Patterson, who's an economist at the Council for Foreign Relations, if America wasn't getting older and sicker, we would have a negative payroll print today.

5:23That's not a good thing. If you're looking for other signs of weakness in the job market, you look to the most vulnerable populations when times get tough, and that is young workers and that is black workers. And both of those unemployment rates are heading higher. The unemployment rate for 16 to 24 year olds is now at 10.5 percent. We've been talking about this for weeks, how the entry level market is so tough just to break into. And then in terms of black unemployment, that is now climbed to 7.5 percent, the highest since October 21. Economists look at those particular populations to see broader trends because those are the first types of unemployment to climb.

5:59And then the final thing we need to look at is immigration as well because the Pew Research Center found that they used census data to calculate that we have 1.2 million missing workers now due to the immigration crackdown. And you have to look no further than what just happened at the plant of South Korean workers who I descended, let out 475 people, arrested them. And it shows the tension between this policy of wanting to attract foreign investment, especially manufacturing investment. But then you have an immigration policy that leads those immigrant workers away in shackles. It shows that this push to build America is running up against Trump's policy on immigration as well.

6:38So that is a perfect kind of microcosmos going on in the immigration side of things when it comes to the job market. Moving on, when you're distracted at work, your boss calls you in for a talking to. But when Elon Musk is distracted at work, he gets the world's biggest pay package thrown his way. Scared that his focus might be stretched too thin, Tesla's board proposed a new deal that would turn the world's richest man into the world's first trillionaire if a series of lofty targets are met. The deal would hand Musk an additional 12 % of Tesla shares worth about$143 billion at today's prices over the next decade.

7:11But like a Malik neighbor's touchdown, there's a series of giant catches. To unlock the additional shares, Elon would need to steer Tesla to an$8.5 trillion valuation, send adjusted EBITDA to$400 billion a year, deliver 20 million vehicles, get self-driving subscriptions to 10 million, and get 1 million robots and robo-taxis into circulation. But should Elon find a way, those extra shares would be worth close to$1 trillion. Neil, it's a massive bet on Tesla's future, but it's the same kind of moonshot deal Musk got back in 2018. People laughed at those targets then, too, until he hit them. This time, though, Tesla is in a much more vulnerable place, and the targets are a lot loftier.

7:53Yeah, let's talk about these targets compared to what Tesla is currently doing. So Tesla needs to sell 12 million more EVs. It's to date sold about 8 million. This adjusted earnings one, up to$400 billion. That is seen as possibly the one that cannot be hit, even in the most rosy of scenarios. because right now Tesla's adjusted earnings are about$16.6 billion. So it would have to increase 24x to$400 billion for Elon Musk to get the full payout. But again, you're right. He got this huge package back in 2018. No one thought was possible. But then Tesla's value grew from$59 billion to top$650 billion in terms of market cap.

8:36So no one thought he could do it now. But you're right. Tesla is just in a worse place. its stock is down 30 % since a mid-December peak. It just is coming off its two worst quarters as a public company in terms of auto sales globally. Elon Musk has been intent on shifting Tesla from a traditional EV automaker into a robotics and AI company. And if he pulls it off, then he's going to be an exceedingly rich man. Absolutely. Another part of the pay package that I didn't mention was succession planning. That's never an easy thing, and especially not for Tesla because, you know, Now, Elon is kind of so synonymous with that company.

9:12Whoever steps in for Elon will have a big job to do. But Tesla's regulatory filing said they actually tied this requirement to must-pay package. So in order for him to get this$1 trillion pay package, even if he hits all those lofty goals, they also have to have a successor in place. So maybe for the first time, not for the first time, actually, Tesla has had to come to terms with the fact that what do we do if Elon leaves? Now they're kind of putting it in ink and saying that, hey, Elon, you need to be part of this succession planning as well in order to get this lofty pay package because we need to think about life after you as well.

9:46And the reason that they even have to do this is because that previous pay package that we talked about, the$56 billion one, was struck down by a Delaware judge. Tesla has appealed that ruling and they're still working through it in court. But right now, Elon Musk doesn't really have any incentive right now tying him to this company. and he's got a host of distractions. All of this is going to go down November 6th. Put it on your calendar. It's a shareholder meeting where the shareholders will vote on whether to approve this pay package or not. Let's hit our winners of the weekend, the segment where Toby and I picked two things that had Daniel Jones on their fantasy team.

10:22I won the pre-show staring contest, so I get to go first. And my winner of the weekend is book authors who scored a historic settlement from the AI company Anthropic. On Friday, Anthropic agreed to pay$1.5 billion to a group of authors and publishers in the largest payout in the history of U.S. copyright cases. 500 ,000 authors will get$3 ,000 per work, a landmark agreement that could set the tone for more than 40 other lawsuits creatives have filed against tech companies over AI. Here's a quick backstory. Last summer, three authors sued Anthropic, which makes the popular chatbot Claude, accusing it of violating copyright laws by using pirated works to train its AI models.

11:02This summer, a judge delivered a mixed ruling. He said that when Anthropic legally obtained books, using them to train AI models was within bounds because it was turning the material into something new, which is permissible under fair use doctrine. However, that wasn't always the case. Anthropic downloaded more than 7 million digitized books that, quote, it knew had been pirated, and that's a copyright disaster. The risk of going to trial and the massive financial liability that presented seemed too great for Anthropic to stomach, so it decided to come to the negotiating table. Toby, there are dozens of similar cases circulating against companies like OpenAI, Meta, Apple, and Amazon.

11:39This settlement could give a legal boost to authors who feel like they've been stolen from. Yeah, it makes a clear line in the sand. It's not necessarily about training these models on their works. It's about how you acquire those works. So the judge did rule that actually buying physical books and making digital copies of those and then training large language models on it, that is fair use. That is good to go. But what you're not allowed to do is go to these kind of shadow libraries, as they called it, and then infringe on that offers work because the libraries themselves didn't pay for those books there.

12:10And I also do think that it is an interesting historical parallel to another era of the internet. I'm thinking about the Napster era where it kind of forced the music industry into figuring out what do our licensing agreements look like. Today, now these AI companies are going to be pushed towards licensing agreements with journalists, with authors, with people who sell books in the media, which is already happening. I mean, OpenAI already has these deals with News Corp. Axel Springer, Conde Nast, Washington Post, Amazon has one with the New York Times as well. So I think you are seeing a line has been drawn in the sand of how you are allowed to obtain this data in a way that satisfies fair use.

12:49And Anthropic says it's now in the clear because it says this is a legacy system. This way it obtained these books through those shadow libraries like Library Genesis. I've never heard of that. But there's these huge digitized libraries that have all these pirated books. Now Anthropic says that exactly what you're talking about, that it buys these books, these physical books, rips off the bindings, and then scans them into a digital trove online, and then uses that to train the clod. And books are actually one of the best sources to train AI because it just contains billions and billions of words that help AI become smarter.

13:26So the books are a hugely valuable asset, which is why they become a flashpoint in the copyright wars. I know how we solve the labor market issues and the AI issues. You just employ thousands of book rippers and book scanners. That's the new job of the future right there. Now, can Anthropic afford this? It's the biggest copyright payout in history,$1.5 billion. And the answer is yes. Anthropic has raised more than$27 billion since its founding in 2021. It just raised$13 billion more last week. It is now valued at$183 billion. So not too much of a punishment or a financial punishment for Anthropic.

14:04but the symbolism across the industry will be large. Up next, we have my winner of the weekend. Indeed has been reshaping the world of work with AI-powered solutions for both job seekers and employers. Combining this with the scale of their data, Indeed is transforming the hiring landscape to simplify and accelerate the job search and hiring. And because this is such a big topic, it'll be a main topic at Indeed Future Works. Mark your calendars, friends, and fam, because soon we're heading south. No, me and Toby are not going on tour, but Morning Brew will have some friendly faces down in the Big Easy.

14:38That's right. On September 10th and 11th, Morning Brew will be at Indeed Future Works in New Orleans, Louisiana. The topic on everyone's mind is AI, and Indeed will be diving into how it's impacting the entire hiring space. Learn more at IndeedFutureWorks.com slash brew. That's IndeedFutureWorks.com slash brew. Just like you have regular visits at the doctor, your company's supply chain needs checkups too. Thankfully, it takes less than a minute to do it with Supply Chain Health Vitals Checkup from SPS Commerce. It's a free, non-intimidating way to understand your current position and access practical steps for improvement.

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15:51My winner of the weekend is Carlo Acutis, who on Sunday became the Catholic Church's first millennial saint. Carlo was just 15 when he died from cancer in 2006, but has gone on to gain massive popularity around the world since, earning the nickname God's Influencer in the process. Carlo was a techie teen who loved video games and was most known for creating a website that tracked church miracles around the world. But he is also a normal-looking 15-year-old who is frequently depicted wearing simple jeans and a t-shirt, a far cry from what most people think of when they hear Saint. Carlo's distinctly normal kid vibe, his body was on display wearing Nikes, and a nearby statue depicts him holding a laptop has earned him a cult falling within the church.

16:33When Pope Leo presided over an open-air mass in the Vatican's St. Peter's Square yesterday, 80 ,000 people showed up to honor him. Neil, the move to canonize younger saints comes as the church looks for new ways to connect with younger generations. Carlo, the first millennial saint, is a prime example of that strategy in action. Yeah, Kathleen Sprose-Coming, who's a history professor at the University of Notre Dame and perhaps the preeminent saint expert in the United States, talks about how sainthood is essentially a marketing exercise. There's a lot of people who are maybe worthy of sainthood, and we can maybe get into what it requires to become a saint.

17:09But whoever is chosen at a particular point in time is meant to address the biggest cultural and business and economic and societal issues of this particular age. And right now, the Vatican and the past two popes have been very focused on tech and AI. And they've been warned. They've warned about the dangers of such technology. And they've also hyped up the potential of such technology. So they're really pushing Carlo's story because he was someone who used digital media and digital technology in ways that push the church's message forward. So they're holding him up as a great example and people are loving it because he's so relatable.

17:45You're right about that path to sainthood, though. Canonization is usually a process that can take a long time, sometimes even centuries down the line because it does require this pretty deep examination of a candidate's life. And traditionally, you have a miracle requirement. You have to have two miracles be attributed to a prospective saint in order to kind of get that canonization. And in Acutis' case, there was a 2020 miracle where a seven-year-old Brazilian boy was healed from a pancreatic disorder after contact with one of Carlos' T-shirt. And then in 2023, a Costa Rican student had another healing due to her mother praying at Acutis' tomb.

18:24So those were the two confirmed miracles that Carlo get that allowed him to, you know, very quickly ascend to sainthood. But I do think you're right that this is definitely one of those next generation plays. They're trying to appeal to a younger generation of people. Acutis was a kid who played video games. I mean, he loved Halo. He loved these. He limited himself to one hour a day because he knew that. One hour a week. One hour a week because he, yeah, because obviously he's got some pretty good self-control there. but essentially they're just trying to say that, hey, this is a guy that we know has developed this big following in our church.

18:56Let's ascend him to sainthood. Right, I mean, overall people, especially in the West, are becoming less religious. In Italy, about 30 % of young people identify as having no religious beliefs, which is the same percent who identify as practicing Catholic. So I don't know exactly what you say to a saint, congratulations, but this is, it seems like a milestone moment in the church's acknowledgement of the revolution, the digital technology revolution that we're going on right now. And Pope Leo actually took his name in reference to another pope from the 19th century who oversaw a major time of technological change during the Industrial Revolution.

19:32So these things are weighing on the minds of everyone from CEOs to the popes to saints. All right. It's Monday. So here's what you need to know to stay ahead in the week ahead. The iPhone 17 is coming. On Tuesday, Apple will hold its biggest hardware event of the year to launch four iPhone 17 variants, including the all new slimmed down iPhone Air. Apple is also expected to announce an updated watch, AirPods Pro 3 and AirTag 2 and other gadgets you'll make fun of for being so expensive. But buy anyway. But the focus will be on the new iPhone, the device that accounts for half of Apple's revenue and represents the gateway to its ecosystem of services.

20:09The question is, will people upgrade? Well, my phone went through a Danish canal in an English bog recently, so it might be upgrade time for me. But something I'm also looking forward to is that these devices are going to be the first devices to natively come equipped with liquid glass. That's Apple's new iOS design language. We thought it was pretty bad when it came out, but I'm eager to see if it makes an impact, if it drives people's purchasing decisions, or if it just actually looks better than we initially thought. So liquid glass is another part of this equation that I'm excited to see Apple talk about.

20:41The three most exciting words in finance are back in a big way. I, P, and O. Six companies will make their market debuts this week, including a buy-now-pay-later giant Klarna and Gemini Space Station, a crypto exchange backed by the Winklevoss twins. But Klarna is definitely the highlight. The fintech wanted to go public earlier this year, but scrapped those plans once the markets got hairy from tariffs. Now that the waters have calmed a bit, it's ready for its stock exchange entrance and hopes to keep the IPO-mentum going from this summer. Klarna is like your ex with commitment issues. It's been in this situation ship with the public markets for so long.

21:17I feel like we've done so many stories about Klarna just about thinking about going public. So I guess I'll believe it when I see it. I do think now is the time to go public, though, because we've seen a bevy of successful IPOs. Circle, Figma, Bullish, these all had pretty successful pops as soon as they went public. So I guess, Klarna, now is the time to make it official and actually go public with your relationship with the public markets. If last week's economic data were all about America's job situation, this week is all about inflation. On Thursday, the monthly consumer price index will drop, providing fresh info on whether tariffs are fueling inflation.

21:52The day before that, a report on producer prices arrives, which will also reveal the scope of the tariff hit. In July, U.S. producer prices jumped by the most in three years due to a spike in the cost of goods and services. I mean, it was something we didn't talk about that much at the beginning of the show, but the fact that inflation is still lurking around, even as the jobs market is kind of getting super, super weak. Right now, we're at about a 90 % chance of a rate cut. If one of these reports comes in super hot, egregiously high, as some economists have put it, that really complicates things.

22:22And that's something you really don't want to see, especially because right now the stock market is chugging along nicely. They've basically priced in, companies are being valued like a rate cut is all but certain. If something comes in, if a wrench comes into those gears, then things could get ugly pretty fast. And finally, tonight will be another drawing of the Powerball jackpot. It won't be as exciting as it was last week. On Saturday, two players in Missouri and Texas won the almost$1.8 billion jackpot, the second biggest lottery prize in history, ending a three-month drought without a winner.

22:56Now the jackpot has gone all the way back to$20 million, though your odds of winning it aren't the same as it was when it was 1.8 billion. I'm honestly so glad somebody finally pulled some winning tickets because it got to the point where people in my group chats were proclaiming what they do with the money. I mean, I'd make every golf trip free for you guys. I'd buy a compound for everyone. It's a lot harder to make those promises with$20 million. So maybe some of that fantastical daydreaming is coming to it. It was on Saturday. You couldn't go into any bodega or gas station without somebody coming in and scooping up 10 to 20 Powerball tickets.

23:30They weren't really talking about it over in Copenhagen, if you would believe it. How would I believe that? Okay, that is all the time we have. Thanks so much for starting your morning with us. Have a wonderful start to the week. If you have any thoughts or feedback on today's show, send a note to Morning Brew Daily at MorningBrew.com. Let's roll the credits. Emily Milliron is our executive producer. Raymond Liu is our producer. Our associate producers are Olivia Graham and Olivia Lake. Hair and makeup is wiping their tears with their failed Powerball tickets. Devin Emery is our president, and our show is a production of Morning Brew.