--:-- Alex Ossola: How do more than 100 million Fortnite players join the battle without lag? AWS is how Epic Games scales up to keep them in the action. AWS powers next-level innovation for millions of businesses.
--:-- Alex Ossola: The temp jobs that people rely on during the holiday season are looking harder to find this year. Typically, UPS says they're going to hire a bunch of workers. This year, they didn't put a number on that. Same goes for Target. Same goes for Macy's.
--:-- Alex Ossola: Meanwhile, the average cost of a room at a luxury hotel is at a record high. And why some large companies won't be able to take advantage of all their new tax breaks. It's Tuesday, November 11th. I'm Alex Ossola for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today.
--:-- Alex Ossola: The end of the long government shutdown appears in sight, but the U.S. will continue to feel its effects after the government reopens. Calculating that impact on the U.S. economy is difficult, and uncertainty is also playing out in the economy as companies staff up for the holiday shopping season. The country's big retailers, warehouse, and shipping companies appear to be dialing their holiday hiring plans way, way back this year.
--:-- Alex Ossola: I'm joined now by WSJ economics reporter Justin Layhart. Justin, let's start with the economic impact of the shutdown broadly. Is it expected to affect the U.S. economy in the long term?
--:-- Justin Layhart: Not that much in the long term. What a shutdown does is it depresses activity. And then almost all of that activity gets made up later.
--:-- Justin Layhart: So people who were being paid, like federal workers, they're going to get back pay in this instance. And that means that things that they weren't spending money on during the shutdown. They will spend more money on after the shutdown. A year from now, you would expect the economy to be really just a hair weaker than it would have been without the shutdown, but not so anyone would really notice.
--:-- Justin Layhart: So the Congressional Budget Office said a six-week shutdown cuts GDP growth in the fourth quarter by one and a half percentage points. Some economists have more optimistic estimates, but why is this so difficult to figure out, actually?
--:-- Justin Layhart: It's just hard to tease out this kind of stuff. You're saying like, how much did people reduce their spending as opposed to drawing down savings? What did the disruptions to SNAP benefits do? What did worries about travel do?
--:-- Justin Layhart: And it happens at a moment when we're uncertain about what was going on with the economy anyway. The word of the year for the economy has been uncertainty.
--:-- Justin Layhart: I'm curious whether this uncertainty is affecting companies' holiday hiring plans. So you have another story that published today about how companies seem to be gearing up for less holiday hiring than in past years. How is that playing a role here?
--:-- Justin Layhart: That's probably more to do with what we were seeing with consumer spending, with wage growth, struggling to keep up with rising prices. So we've seen companies dial back these hiring plans. So typically UPS says they're going to hire a bunch of workers. This year, they didn't put a number on that. Same goes for Target. Same goes for Macy's.
--:-- Justin Layhart: Is uncertainty around data on the economy affecting companies' hiring plans? This is having not just effects on the data, but the actual economy. Things are sort of bouncing around. You're going to see reduced spending as a result of the shutdown. Well, how much of that is a result of the shutdown? How much of that is a result of something else? I don't know.
--:-- Justin Layhart: Creates a lot of uncertainty there. That has to be tough. As anyone who's doing any kind of business planning, where am I going to expand? Where am I going to do these investments? It's really hard to know.
--:-- Justin Layhart: What does this mean for workers, especially low-income workers? These are jobs that typically go to lower-income workers, to young workers. And you could think of them as, oh, they're just temporary, they're just for the holidays, but they're really important for some people. They move from seasonal job to seasonal job. Then they couple these jobs together to make their work life. And if it's tougher to find that holiday job, it does make them worse off than they would have been otherwise.
--:-- Alex Ossola: That was WSJ economics reporter Justin Layhart. Thank you, Justin.
--:-- Alex Ossola: Thanks. And as you know, the shutdown has led to thousands of canceled flights. If flight restrictions have disrupted your travel plans in the past few days, let us know. Send a voice memo to wnpod at wsj.com or leave a voicemail with your name and location at 332-214-8472. We'll also put those contacts in the show notes.
--:-- Alex Ossola: U.S. stocks turned mostly higher today as Congress moved closer to ending the government shutdown. The Dow rose 1.2% in its third straight day of gains. The S&P 500 also rose for the third session in a row, ending slightly higher. Healthcare and energy sectors climbed, while tech stocks lagged. The Nasdaq slipped 0.3%.
--:-- Alex Ossola: Wall Street isn't the only place you can find a bad trade. Nico Harrison, general manager of the Dallas Mavericks, has lost his job over one. Nine months ago, Harrison traded away Luka Doncic, a perennial NBA All-Star and one of the best players in the world to the Los Angeles Lakers. The sports world was shocked. Dallas fans erupted. You can hear them chanting, Fire Nico! at this April game in a clip posted by ESPN. Now those fans have gotten their wish The Mavericks have fired Harrison after a disappointing season bringing the saga of the most ill trade in NBA history to a close
--:-- Alex Ossola: Coming up, large companies looking to take advantage of this year's tax breaks are finding more taxes. That's after the break.
--:-- Alex Ossola: Thank you. and your city. Join Ripple and host David Schwartz for crypto and blockchain conversations on Blockstars the podcast.
--:-- Alex Ossola: Large companies trying to claim some of the tax cuts Republicans passed this summer are running into a problem. The corporate tax increase that Democrats passed three years ago. Facebook owner Meta Platforms, Qualcomm, and other companies say they're getting hit by the corporate alternative minimum tax, the 15% tax rate floor that was part of the Biden administration's Inflation Reduction Act.
--:-- Alex Ossola: WSJ tax policy reporter Richard Rubin is here to break down this multi-billion dollar corporate tax conundrum. Okay, Richard, what is the issue that these companies are running into?
--:-- Richard Rubin: They're running into the corporate alternative minimum tax, the CAMT, the CAMT, as we call it in tax circles, something where companies that have at least a billion in profits, look at their financial statement income. And if that's less than 15%, then they have to bump up their taxes to 15%. So even if they have tax breaks that would work under the regular tax system that Congress has authorized, the company goes in and takes them back.
--:-- Richard Rubin: What's happening now is the One Big Beautiful Bill Act of 2025 gave companies some expanded tax breaks and companies like, oh, great. And then they're like, oh, wait a minute. If we take all of those, that's going to push us into this minimum tax.
--:-- Richard Rubin: What are the companies doing about this in the short term and the long term? In the short term, they just take the accounting hit. The way Campti works is if you're in it for one year and then out of it another year, you can use the excess Campti that you paid to cover your regular taxes next year. But what happens if you're perpetually going to be in Campti is you just have to say, oh, well, we've got a big pile of tax breaks under the regular system that we're not going to be able to use. And so when those things are unusable, then that's a negative on your earnings statement.
--:-- Richard Rubin: In the more medium term, you're seeing companies and their coalitions push for the Treasury Department to write relaxed rules to say, no, Congress really meant to let us get these deferred tax breaks in 2025 and 2026 and it shouldn't count for CAMPTI purposes. And we see whether Treasury says yes or not but there's a regulatory ask right now that the Trump administration will consider.
--:-- Alex Ossola: That was WSJ tax policy reporter Richard Rubin. Thanks so much, Richard.
--:-- Alex Ossola: Despite a drop-off in foreign tourists and a job slump among white-collar workers, the wealthy are splurging on hotels like never before. Data firm CoStar says the average price of a room at luxury hotels in the U.S. hit a record $394 a night this year. Affluent travelers made richer in recent years by stock market rallies and real estate gains are splurging. CoStar says bookings for luxury properties are up 2.5% this year through September, while demand for mid-tier and cheaper hotels dropped slightly.
--:-- Alex Ossola: Infant formula maker Byhart has recalled all of its products in the U.S. after the Food and Drug Administration opened an investigation into a botulism outbreak. The FDA says 15 infants with suspected or confirmed cases of botulism have been reported in a dozen states, and each child consumed Byhart formula. No deaths have been reported. The agency says Byhart's products make up less than 1% of all infant formula sold in the U.S. Byhart says it hasn't found spores that produce botulism in any unopened can of its formula and recalled its products under an abundance of caution.
--:-- Alex Ossola: And deadly explosions this week in India and Pakistan are threatening to raise tensions between the two countries. A suicide bombing outside a courthouse in Islamabad, Pakistan's capital, killed 12 people today. Pakistan's prime minister blamed today's suicide bombing on terrorists backed by India. India denies Pakistan's allegations and says Pakistan is trying to deflect attention from its internal political problems.
--:-- Alex Ossola: The Pakistan bombing follows a blast in New Delhi yesterday that set several cars on fire, killing eight people and injuring at least 20 others. Police haven't determined the cause of the explosion in India, and India's anti-terrorism agency is investigating it.
--:-- Alex Ossola: And that's what's news for this Tuesday afternoon. Today's show is produced by Zoe Kolkin with supervising producer Tali Arbel. I'm Alex Ossola for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening. We'll see you next time.
--:-- Alex Ossola: risk of loss. Fidelity Brokerage Services, LLC. Member NYSE SIPC.
