How long do we have?

MARKETS

• Jobless claims: U.S. weekly jobless claims fell to the lowest level since 1969 last week, aka the same year the Jackson 5's "I Want You Back" entered the top 100. The numbers mean the labor market is still going strong.
• Trade: Commerce Secretary Wilbur Ross said the U.S. and China are "miles and miles" away from solving their trade differences. He also had other things to say about federal workers...we'll get to that shortly.

AVIATION

Good News/Bad News: Airlines Edition

Since it's Friday and the apocalypse is nigh...

Let's start with good news

American Airlines (+6.35%), Southwest Airlines (+6.25%), and JetBlue Airways (+5.10%) said they expect to grow revenues in the first quarter of 2019 thanks in part to lower fuel costs and strong overall demand.

• That was enough to boost airline stocks and squash some concerns about the effects the partial government shutdown has had on air travel demand.

But not *all* of the concerns

JetBlue CEO Robin Hayes said his industry is inching toward a "tipping point" over the 35-day shutdown, which has demolished federal workers' travel appetite.

• Southwest said the shutdown has cost it up to $15 million in January.
• And last week, Delta said the shutdown was costing it about $25 million per month. United's parent company echoed similar concerns.

FYI: $15 million is the financial equivalent of an in-flight pretzel bag for Southwest, which had $5.7 billion in Q4 revenue. Same goes for Delta, which did $10.7 billion in sales last quarter.

That didn't stop airline execs from blowing off steam

• "The longer this goes on, the longer it will take for the nation's air travel infrastructure to rebound."—JetBlue's Robin Hayes
• "We'd be crazy not to be concerned about this...Everyone needs to be on notice and on guard that this shutdown could harm the economy and it could harm air travel."—Southwest CEO Gary Kelly

Bottom line: It's not just demand airlines have to worry about. Government-employed airport workers will miss their second paycheck today, and high absentee rates among TSA agents have resulted in longer lines. As one radar specialist told the AP, "The stress is getting to everyone."

SHUTDOWN

'I Know They Are, and I Don’t Really Quite Understand Why'

That's Commerce Secretary Wilbur Ross wondering aloud on CNBC why federal workers affected by the partial government shutdown are visiting food banks. Instead, he said, they should take out loans from banks or federal credit unions to cover expenses until their missed paychecks come rolling in.

• Quick refresher on Ross: He's an ultra-wealthy investor who made a name buying up distressed assets (i.e. steel and textiles). You can call him the "King of Bankruptcy."

Democrats pounced, calling his remarks tone deaf and "unreal." Let's look at a few facts:

• Some big banks including JPMorgan do not offer personal loans, but they are offering some relief for federal workers in other ways.
• Navy Federal Credit Union (the world's largest credit union) offers an interest-free loan program of up to $6,000 to those who already have a direct deposit account.
• The Capital Area Food Bank expects to serve as many as 600,000 extra meals across the D.C. area this month.

Zoom out: The Trump administration has consistently taken a tough love approach to the roughly 800,000 furloughed federal workers during the shutdown. Ross's comments fit the pattern.

FUTURE OF WORK

The Robots Are Coming...Just Don't Ask Us When

We don't have to tell you twice that automation is disruptive (what, you think humans still write the Brew?)...but it might be more disruptive for some than others.

A new report from D.C. think tank Brookings Institution found about one quarter of U.S. jobs will be severely disrupted by advances in artificial intelligence-driven automation.

• Roughly 36 million Americans currently hold jobs with "high exposure" to automation (aka at least 70% of their tasks could soon be performed by machines using today's tech).
• Which sectors could be hardest hit? Food services, short-haul truck driving, and clerical office work.

So how long do we have? Might be years, might be decades, Brookings said. But the timeline could speed up during the next economic downturn, when businesses will be eager to replace low-skilled jobs with cost-cutting technology. And remember, some economists have suggested we might face a recession as soon as 2020.

Silver lining: If Amazon's delivery robot Scout (revealed just this week) is any indication, this AI takeover may be arriving fast...but at least it's going to be extremely cute.

CONSUMER GOODS

When We Say Milkman…

You probably think almond farmer. But like Bardot bangs and prohibition-era bars, the OG milkman model is staging a comeback. That's right, some of the world's biggest consumer packaged goods companies are starting to test peddling products in reusable containers.

Who's in? Procter & Gamble, Nestlé, PepsiCo, Unilever and 21 other companies. They're partnering with recycling company TerraCycle to offer reusable packaging to some customers in Paris and the NYC area this summer.

• Xs and Os: The companies will sell products in reusable containers (think glass Tropicana bottles or Tide detergent in a stainless steel container) for home delivery.
• Customers can then schedule a pickup for the reusable containers to be cleaned and refilled.

Let's talk risk/reward. Risk? Consumers are used to plastic, and it'll be super expensive to get the project off the ground. But reward? Bombarded with concerns about plastic waste, CPG firms could use the new model to entice eco-conscious buyers.

QUIZ

Cheez Qwhiz

Not easily automated. Arrives in a reusable container. Nominated for a "Best News Quiz in a Supporting Role" Oscar. It's the Brew's weekly news quiz.

1. Billionaires and heads of state are making small-talk over expensive wine at the World Economic Forum this week. In which Swiss resort town is it held? We'll give you a visual—not because it'll help necessarily, but it's just pleasant to look at.

2. Existing home sales dropped an unusually large 6.4% in December. Prices didn't increase all that much either, and the median existing house price in the U.S. now stands at...

a) $192,490 b) $213,120 c) $224,700 d) $253,600

3. Fill in the blank: __________ likely accounts for 10-15% of Georgia's total electricity demand.

4. What company am I? I am a former meal kit service turned meal delivery startup. I raised $124 million and earned a valuation of $300 million by 2015. This week, I joined the graveyard of meal delivery has-beens by calling it quits.

5. UK-based nonprofit CDP asks firms to disclose how climate change may affect their businesses. Which of the following responses is not real?

a) Disney worries its theme parks will become too hot.

b) Apple says more disasters would make iPhones more indispensable.

c) Tesla considers launching a speedboat, the Model HMS, to profit from rising sea levels.

d) Coca-Cola wonders if there will still be enough water to make soda.

Answers: 1) Davos 2) $253,600 3) Cryptocurrency mining 4) Munchery 5) Tesla is not making a speedboat...yet

WHAT ELSE IS BREWING

• Starbucks (+1.90% after hours) reported stronger-than-anticipated sales growth in both the U.S. and China/Asia Pacific last quarter...but narrowed its outlook for fiscal 2019.
• PG&E stock jumped over 70% after California officials cleared the utility of blame in a 2017 Golden State wildfire (the second most destructive in state history).
• Intel stock slumped more than 6% after hours following an earnings report with less-than-inspiring revenue and weak profit guidance.
• Renault announced new leadership after Carlos Ghosn (the now-infamous former CEO and chairman) resigned from his jail cell.
• Under Armour (+2.27%) will team up with Virgin Galactic to design the next generation of spacesuits. No word yet on whether they'll show at Milan or NY Fashion Week.

BREAKROOM

Word Pyramid
The puzzle words like this: You take the letters from "pea," scramble 'em up, and make a word in the next line (that starts with "h"). Once you've got that word, you do the same with the next line, and so on, until hopefully you reach the bottom. This one's ideal for racing against coworkers who've been talking trash about your Brew puzzle success rate this week.

pea

h _ _ _

s _ _ _ _

_ _ r _ _ _

_ _ _ _ _ _ n

_ _ _ _ _ _ _ l

(Answer located at bottom of newsletter)

Breakroom Answers