#FINANCIAL_LITERACY

Rattling markets… Oil prices have spiked and shipping costs have soared following numerous Houthi attacks on commercial ships in the Red Sea. On Wednesday, the US, UK, and other allies issued a “final warning” to the Yemeni rebel group: stop attacking ships or else. Yet just yesterday the Houthis launched another attack. Some background: the Houthis overthrew Yemen’s government in 2014, which led neighboring Saudi Arabia and other Arab countries to launch a campaign against the Iran-backed militants.

• How it started: The Houthis began launching missiles and drones toward Israel after Hamas’ October 7 attacks on the country. After the Houthis’ weapons were intercepted, they started targeting vessels in the Red Sea, which the Pentagon says have not all been linked to Israel.

• So far: The US says the Houthis have attacked commercial ships 25 times since mid-November. Last week, US helicopters sank three Houthi ships to repel an attack on a Maersk container vessel.

• Why it matters: About 15% of the world’s seaborne trade normally passes through the Red Sea, including 8% of the world’s liquefied natural gas trade.

Economic fallout… The Houthi attacks have led to ballooning shipping costs. That’s because several of the biggest shipping firms — including Maersk and Mediterranean Shipping Co. — have halted Red Sea shipping. Now, instead of cruising through the Red Sea and taking the Suez Canal shortcut that connects Europe to Asia, they have to sail around the southern tip of Africa (a much longer route). The effects by the #s:

• Up ~3X: Spot container shipping rates from Asia to Northern Europe have nearly tripled. Rates from Asia to America’s East Coast are up 55%.

• Down ~30%: Traffic in the Suez, a critical gateway between the East and West, has fallen 28% in the past 10 days.

All this could escalate… The White House said it isn’t seeking a wider Middle East conflict, but after its ultimatum a Biden admin official said “I would not anticipate another warning.” A US Navy commander said it was unlikely the attacks would stop anytime soon, and Iran has exacerbated matters by dispatching a warship to the Red Sea. Meanwhile, Iran rival Saudi Arabia has been keeping a low profile as it hopes to avoid a renewed conflict with the Houthis.

Wanted: “Now Hiring” signs… The once sizzling labor market is coming back to room temp. US job openings slid to their lowest level since “WandaVision'' was still airing (32 months ago), fresh Labor Department data showed. November’s 8.8M openings are still better than prepandemic #s, but well below 2022’s record of 12M — another sign workers have lost some leverage in the labor tug-of-war.

• Refreshing the InMail: Job postings are down, too, finishing last year 15% lower than 2022, Indeed said. With fewer listings, it’s getting harder to find a new gig before severance runs out. Continuing unemployment claims rose 15% YoY.

• Still recovering: The US added 2.7M jobs last year — 40% more than in 2019. But a majority of those roles were in-person jobs in industries still trying to recover from the pandemic (think: food service, childcare).

• Stay for pay: Real wages are higher than they were prepandemic, on average, and overall wage growth outpaced inflation for most of last year, though it’s been slowing.

Not to pile on, but… it’s layoffs season. Job cuts tend to spike in December and January as companies reorg for the year ahead. This week Xerox said it would lay off 15% of its staff (3K+ workers), and digital media companies like Cheddar and The Messenger are also cutting jobs. Last year saw 305K+ layoffs, with industries like tech and media hit especially hard.

The Big Stay ain’t leavin’... With fewer off-ramps, workers have been cozying up to the Google Meets they know vs. the LinkedIn search they don’t. Quits ticked down to a 33-month low after holding steady for four straight months — and that’s in spite of job satisfaction falling 10% last year to early-2020 levels.