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Rising Labor Costs Reach Wall Street, What it Means for S&P 500 Earnings

International Business Times

Rising labor costs are beginning to reach Wall Street, having a mixed impact on the Q4 earnings reporting season for companies included in the S&P 500 index thus far. That's according to FactSet that keeps a close tally on the earnings reports of listed companies and sifts through conference call transcripts to figure out what companies say about their business environment. "Labor costs and shortages have been cited by the highest number of companies in the index to date as a factor that either had a negative impact on earnings or revenues in the fourth quarter, or is expected to have a negative impact on earnings or revenues in future quarters, says John Butters is Vice President and Senior Earnings Analyst at FactSet. "Of these 20 companies, 12 (60%) have discussed a negative impact from this factor. After labor shortages and costs, COVID costs and impacts (10) and supply chain costs and disruptions (10) have been discussed by the highest number of S&P 500 companies." And the situation could turn worse, as most of the companies included in the FactSet analysis have a fourth-quarter that ended in November.


Notes from the AI frontier: Modeling the impact of AI on the world economy

#artificialintelligence

Artificial intelligence has large potential to contribute to global economic activity. But widening gaps among countries, companies, and workers will need to be managed to maximize the benefits. The role of artificial intelligence (AI) tools and techniques in business and the global economy is a hot topic. This is not surprising given that AI might usher in radical--arguably unprecedented--changes in the way people live and work. The AI revolution is not in its infancy, but most of its economic impact is yet to come.


Notes from the frontier: Modeling the impact of AI on the world economy

#artificialintelligence

Artificial intelligence has large potential to contribute to global economic activity. But widening gaps among countries, companies, and workers will need to be managed to maximize the benefits. The role of artificial intelligence (AI) tools and techniques in business and the global economy is a hot topic. This is not surprising given that AI might usher in radical--arguably unprecedented--changes in the way people live and work. The AI revolution is not in its infancy, but most of its economic impact is yet to come.


A New Proposed Law Could Actually Hold Big Tech Accountable for Its Algorithms

Slate

We've seen again and again the harmful, unintended consequences of irresponsibly deployed algorithms: risk assessment tools in the criminal justice system amplifying racial discrimination, false arrests powered by facial recognition, massive environmental costs of server farms, unacknowledged psychological harm from social media interactions, and new, sometimes-insurmountable hurdles in accessing public services. These actual harms are egregious, but what makes the current regime hopeless is that companies are incentivized to remain ignorant (or at least claim they to be) about the harms they expose us to, lest they be found liable. Many of the current ideas for regulating large tech companies won't address this ignorance or the harms it causes. While proposed antitrust laws would reckon with harms emerging from diminished competition in the digital markets, relatively small companies can also have disturbing, far-reaching power to affect our lives. Even if these proposed regulatory tools were to push tech companies away from some harmful practices, researchers, advocates and--critically --communities affected by these practices would still not have sufficient say in all the ways these companies' algorithms shape our lives.


How Competition Is Driving AI's Rapid Adoption

#artificialintelligence

Artificial intelligence (AI) is engendering all kinds of breathless headlines, from being able to play Go to spotting rare cancer tumors. But how will AI impact the economy in broad terms? The answer hinges on both on what AI can be used for and the dynamics of a competitive race to adopt AI that's set to unfold between firms. New research from the McKinsey Global Institute simulates the potential global macroeconomic impact of five powerful technologies (computer vision, natural language, virtual assistants, robotic process automation, and advanced machine learning). It finds that AI could (in aggregate and netting out competition effects and transition costs) deliver an additional $13 trillion to global GDP by 2030, averaging about 1.2% GDP growth a year across the period.