Tag Archives: News event
by Liz Hester
After Friday’s jobs gains, the speculation about the Federal Reserve Board ending the $85 billion a month bond-buying program picked up. Coverage began Friday and continued through the weekend about one of the economy’s most important stimulus plans.
Here’s the story from the Wall Street Journal:
Fed Chairman Ben Bernanke will have to build consensus among officials about how soon to pull back on a program that has been the center of market attention for months and whose effectiveness isn’t wholly clear. Many are getting more comfortable with starting a delicate process of winding the program down, though disagreements about timing and strategy could emerge, according to public comments and interviews with officials.
The Fed’s next policy meeting is Dec. 17-18 and a pullback, or tapering, is on the table, though some might want to wait until January or even later to see signs the recent strength in economic growth and hiring will be sustained. On Tuesday, officials go into a “blackout” period in which they stop speaking publicly and begin behind-the-scenes negotiations about what to do at the policy gathering.
One important consideration: Are investors prepared for a move? Talk of pulling back earlier this year jarred stock and credit markets. On Friday they seemed to take the prospect of a pullback in stride.
The Dow Jones Industrial Average leapt 198.69 points, or 1.3%, to 16020.20, the largest rise in seven weeks. Friday’s gain snapped a five-day losing streak and put stocks within striking distance of all-time highs. The yield on the 10-year Treasury note barely rose, another sign that financial markets weren’t rattled.
Bloomberg reported Saturday that after the jobs report the number of economists predicting the Fed would decrease purchases increased, indicating that many believe the economy is recovering:
The FOMC has pledged to keep buying bonds until the “outlook for the labor market has improved substantially.” The central bank’s so-called quantitative easing has pushed the Fed’s balance sheet close to $4 trillion this year with purchases of Treasury and mortgage-backed securities.
The payroll and unemployment numbers “are impressive in terms of a stronger economy and the need to exit QE,” Pacific Investment Management Co.’s Bill Gross said yesterday on Bloomberg Radio. He said the odds of a December taper are “at least 50-50 now.”
Other reports yesterday showed an improving labor market is boosting consumer confidence along with the spending that accounts for 70 percent of gross domestic product.
Household purchases climbed 0.3 percent in October after a 0.2 percent increase the prior month, according to Commerce Department figures. The median estimate in a Bloomberg survey of 73 economists called for a 0.2 percent rise.
The Thomson Reuters/University of Michigan preliminary December consumer sentiment index rose to 82.5, the highest in five months, from 75.1 in November. Economists forecast an increase to 76, according to the median estimate in a Bloomberg survey.
The Labor Department’s household survey showed more people were entering the labor force. The so-called participation rate rose to 63 percent in November, the first gain since June. A month earlier it fell to 62.8 percent, the lowest level since March 1978.
Reuters covered comments made by the head of the Federal Reserve Bank of Chicago saying tapering was on the table, but he would like to see more positive moves in the economy:
A top Federal Reserve official, who has been one of the most ardent supporters of the U.S. central bank’s bond-buying stimulus program, said he was open to curtailing the purchases this month, although he would prefer to wait.
The comments from Charles Evans, the president of the Federal Reserve Bank of Chicago, suggest a strong report on November jobs growth on Friday has brought the Fed closer to reducing its third round of quantitative easing, known as QE3.
U.S. nonfarm payrolls expanded by a greater-than-expected 203,000 jobs in November, with the unemployment rate dropping to a five-year low of 7 percent.
“I’ll be open-minded,” Evans said in an interview with Reuters Insider, when asked whether he would support trimming the Fed’s stimulus at its policy meeting on December 17-18.
“Everything else (being) equal, I would like to see a couple of months of good numbers. But this was improvement.”
The jobs data cheered Wall Street. The Standard & Poor’s 500 Index broke a five-day losing streak and ended Friday’s session with a gain of 1.12 percent gain. U.S. government bond prices were little changed.
MarketWatch took the contrary position, writing about the reasons the Fed may wait to stop tapering:
The Federal Reserve is likely to hold off on scaling back its bond-buying program in December, using the meeting to prepare the markets for a move early next year, economists said Friday in the wake of the strong November unemployment report.
“The odds are that they basically almost pre-announce at the December meeting and say if numbers continue to be strong a tapering will start very soon,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics. Tapering refers to scaling back bond purchases.
John Lonski, chief capital markets economist at Moody’s Analytics, agreed. “At a minimum, they will strongly hint that a taper will be announced at the January 2014 meeting,” Lonski said.
There will be some internal pressure at the U.S. central bank to move in December, noted Joel Naroff, president of Naroff Economic Advisors in Philadelphia. “The pro-tapering crew [at the Fed] will start yelling at the top of their lungs to start yesterday,” he said in a note to clients.
“But I suspect the [Federal Open Market Committee] will only indicate that if the solid data continue, the conditions will be in place to start taking the pedal off the metal,” Naroff added.
Naroff said he still expects the Fed to start to taper in March, “though a robust December report could provide the cover needed to start in January.”
While Fed officials go into lock-down before their meeting, investors will just have to wait to see what they decide and how others will react. It is likely going to be the most important decision they’ll make this year.
by Chris Roush
Peter Lauria of BuzzFeed writes about how Time Warner Cable used the financial press last week to open the negotiations to sell the company.
Lauria writes, “While the WSJ story provided the floor, the Bloomberg story offers up the ceiling. The article is essentially an open invitation to negotiations disguised as an interview with Time Warner Cable’s incoming CEO Rob Marcus, who is due to replace longtime Chief Executive Glenn Britt at the start of the new year. It describes Marcus’ lengthy experience as a finance and mergers specialist and quotes him talking about his interest in creating value for shareholders even if it means he’d be out of a job. (Don’t feel too bad for Marcus, his contract calls for him to get a $50 million payout if the company is sold.)
“But here’s the key line in the story, and it comes not from Marcus, despite his being quoted at length in the piece — but from someone speaking off the record, with an attribution that does not identify, or rule out, Marcus as the speaker: ‘Time Warner Cable, the second-largest U.S. cable provider, would probably accept a bid of $150 to $160 a share, according to a person familiar with the matter, who asked not to be named because the deliberations are private.’
“Later on Friday, Reuters followed Bloomberg with its own exclusive story about how Comcast has hired JPMorgan to advise it on a potential bid. Sixteen paragraphs down in that piece, there’s this auspice line: ‘Any suitor would likely need to bid at least $150 per share to be considered seriously by Time Warner Cable’s board, one person familiar with the matter said.’
“The astute reader will note that both stories attributed to $150 price tag to a single source. Even if it isn’t the same source speaking to both outlets (though it probably is), the figure is more likely deliberate than coincidental. Put bluntly, the signal being sent to potential buyers is that if they offer $150 or more per share, Time Warner Cable is theirs.”
Read more here.
Some of Friday’s top business stories:
New York Times
Jobless rate lowest in 5 years, raising odds of a Fed move, by Nelson D. Schwartz
Consumer sentiment jumps in Dec on improved economic outlook, by Ryan Vlastelica
Consumer spending rises, but inflation muted, by Lucia Mutikani
Sears plans to spin off Lands’ End to shareholders, by Kim McLaughlin
Waiting for a taper start? You may have missed it, by Jeff Cox
Remembering Nelson Mandela’s unsung economic legacy, by Charles Kenny
5 insights on the minimum wage, by Drew DeSilver
Today in business journalism
This date in business journalism history
by Liz Hester
The U.S. gross domestic product grew more than expected in the third quarter. But some of the coverage wasn’t positive as reporters actually dug into the causes for the increase.
Here’s the beginning of the Wall Street Journal story:
The U.S. economy expanded significantly faster than initially estimated in the third quarter as businesses fattened their inventories, a factor that is likely to weigh on growth in the year’s final quarter.
Gross domestic product, the broadest measure of goods and services produced in the economy, grew at a seasonally adjusted annual rate of 3.6% from July through September, the Commerce Department said Thursday. The measure was revised up from an earlier 2.8% estimate and marks the strongest growth pace since the first quarter of 2012.
The upgrade was nearly entirely the result of businesses boosting their stockpiles. The change in private inventories, as measured in dollars, was the largest in 15 years after adjusting for inflation.
As a result, inventories are likely to build more slowly or decline in the current quarter, slowing overall economic growth. The forecasting firm Macroeconomic Advisers expects the economy to advance at a 1.4% rate in the fourth quarter. Other economists say the pace could fall below 1%.
“The meat and potatoes of the economy are still trending pretty low,” said Scott Brown, chief economist at Raymond James & Associates.
The New York Times added the caveat that the growth was based on less-than-desirable factors:
Inventory changes are notoriously volatile, so while the healthier signals would be welcomed by economists, inventory gains can essentially pull growth forward into the third quarter, causing fourth-quarter gains to slacken.
Indeed, Wall Street was already estimating that the fourth quarter of 2013 would be much weaker than the third quarter, with growth estimated to run at just below 2 percent, according to Bloomberg News.
The anemic pace of fourth-quarter growth also stems from the fallout of the government shutdown in October, as well as the continuing fiscal drag from spending cuts and tax hikes imposed by Congress earlier in 2013.
Still, if the better data on growth from the Commerce Department on Thursday is followed by more robust numbers Friday for the nation’s November job creation and unemployment, it increases the odds the Federal Reserve will soon ease back on stimulus efforts. The jobs data is scheduled to be released by the Labor Department at 8:30 a.m. Friday.
The Reuters story did a good job of breaking down the numbers and explaining why they weren’t as robust as first seemed:
Inventories accounted for a massive 1.68 percentage points of the advance made in the July-September quarter, the largest contribution since the fourth quarter of 2011. The contribution from inventories had previously been estimated at 0.8 percentage point. Stripping out inventories, the economy grew at a 1.9 percent rate rather than the 2.0 percent pace estimated last month.
A gauge of domestic demand rose at just a 1.8 percent rate. The strong inventory accumulation in the face of a slowdown in domestic demand means businesses will need to draw down on stocks, which will weigh on GDP growth this quarter.
Fourth quarter growth estimates are already on the low side, with a 16-day shutdown of the government in October expected to shave off as much as half a percentage point from GDP.
Consumer spending, which accounts for more than two-thirds of U.S. economic activity, was revised down to a 1.4 percent rate, the lowest since the fourth quarter of 2009. Spending had previously been estimated to have increased at 1.5 percent pace.
The Washington Post blog’s headline said it most clearly – ”put away the champagne”:
But there’s a bigger story here than the weird blips to GDP being driven by inventories. It’s that we keep getting mixed signals on how robust the U.S. economy really is as 2014 approaches. Some recent data have been good. The Institute for Supply Management survey of manufacturers for November indicated the strongest growth in output since the spring of 2011. The number of people filing new claims for jobless benefits has been hitting rock-bottom levels (including only 298,000 last week, the Labor Department said Thursday, though that was dragged downward by seasonal adjustment quirks tied to the late Thanksgiving).
At the same time, overall growth has remained tame once inventory effects are taken out, and we’ve seen enough false starts and moments of unjustified optimism during this long, slow recovery that policymakers, particularly those at the Federal Reserve, may want more overwhelming evidence that things are picking up before taking it for granted that above-trend growth has finally arrived.
Which brings us to the November jobs report, due out Friday morning at 8:30. Yes, it’s worth mentioning all the usual caveats about not putting too much faith in any one data point, the large margin of error in the survey, the revisions that could ultimately make the initial reading meaningless.
All that’s true, but you go to battle (or in this case, set monetary policy) based on the data you have, not on the data you might wish to have. So the Friday jobs numbers, which analysts expect will show 185,000 net jobs added in November, are the single most important data point in determining whether the Fed begins slowing its monthly bond purchases at its Dec. 17-18 policy meeting. And for the rest of us, it will be the best indicator of whether this recovery is starting to take off, or whether the long slog continues apace.
Despite the numbers, it looks like the economy isn’t doing as well as it might appear on the surface. The numbers don’t lie.
Some of Thursday’s top stories:
New York Times
China restricts banks’ use of Bitcoin, by Gerry Mullany
The path to happy employment, contact by contact on LinkedIn, by Eric A. Taub
Economy in U.S. grows at 3.6% rate on bigger inventories, by Victoria Stilwell
LaGuardia flights on AMR said to go to Southwest, Virgin, by Mary Schlangenstein
GM to discontinue Chevrolet brand in Europe, by Aaron Smith
Job growth drives mortgage rate jump, by Les Christie
Will tech news junkies actually pay for scoops? by Felix Gillette
Today in business journalism
This date in business journalism history
by Liz Hester
The European Union is getting into the bank-fining act, imposing record penalties on six financial firms for their roles in the Libor case. It’s just the latest round of payments for many of these firms and ultimately their shareholders.
Here’s the Wall Street Journal story:
Six financial institutions were fined €1.71 billion ($2.32 billion) by European Union regulators Wednesday for colluding in an attempt to manipulate key benchmark interest rates, the EU’s largest-ever penalty in a cartel case.
The settlements involved penalties against some of the world’s biggest banks, including Deutsche Bank AG, Société Générale SA, Royal Bank of Scotland Group PLC and J.P. Morgan Chase & Co. The action brings to roughly €6 billion the total penalties levied by regulators against financial institutions in connection with probes into manipulation of the London interbank offered rate, or Libor, and other widely used financial benchmarks.
Further penalties are possible. The EU’s competition commissioner, Joaquín Almunia, said Wednesday at a news conference in Brussels that his office is pursuing cartel proceedings against several other large financial institutions, including the U.K.’s HSBC Holdings PLC and ICAP PLC and France’s Crédit Agricole SA, for their alleged roles in colluding to rig one or more rates. Regulators are also pursuing J.P. Morgan in connection with allegations other than those for which it was fined on Wednesday.
CNN Money’s story added this background and some context to the fines:
The scandal broke in the middle of 2012 when Barclays admitted trying to manipulate Libor, which together with related rates is used to price trillions of dollars of financial products around the world.
Wednesday’s announcement takes the global total of Libor-related penalties to almost $6 billion. A handful of traders have been charged with criminal offenses.
The EU fine is the latest blow to an industry trying to rebuild its reputation and finances in the wake of a series of legal battles over foreclosure abuses, misleading clients over mortgages, payment protection insurance and other products.
Some of the biggest banks are also facing a global probe into allegations that they manipulated foreign exchange benchmarks to profit at the expense of clients.
And the Libor story is not over yet. The European Commission is still going after HSBC, Credit Agricole and JP Morgan on related charges, and broker ICAP, who opted out of the settlement on yen Libor.
“We intend to defend ourselves vigorously,” an HSBC spokesman said.
The Telegraph led with fines on the Royal Bank of Scotland and then added in Barclays, focusing on the United Kingdom banks having to pay up:
Royal Bank of Scotland has been fined €391m (£324m) following a European Commission investigation into Libor-rigging that has seen eight major financial institutions hit with penalties totalling €1.7bn.
The taxpayer-backed lender settled with the European authorities over its attempts to manipulated European and Japanese interest rates, the second time this year it has been fined for its involvement in the scandal.
Barclays was found to have attempted to rig European rates, but avoided a fine of €690m because it had blown the whistle on the practice to the authorities.
In total, RBS and Barclays avoided more than €821m in fines from the EC because of their cooperation with the investigation.
Philip Hampton, the chairman of RBS, said in a statement: “We acknowledged back in February that there were serious shortcomings in our systems and controls on this issue, but also in the integrity of a very small number of our employees.
The New York Times piece brought up criticism of the European system by pointing out that they have limited abilities to enforce laws:
Unlike its American and British counterparts, the European Union has limited enforcement powers over financial firms, which are primarily regulated in their home markets or where they conduct the bulk of their business.
As a result, European Union antitrust authorities had to build a case based collusive conduct among a group of financial firms, rather than improper behavior by a single entity or group of traders at one bank.
To set the Libor and Euribor rates, banks submit the rates at which they would be prepared to lend money to one another, on an unsecured basis, in various currencies and varying maturities. Those rates are averaged, after the highest and lowest ones are eliminated, and that becomes that day’s rate.
The settlement was seen as a demonstration by European authorities that despite a reputation for excessive deference to banks, they, too, can come down hard on offenders.
“By European standards, it’s a large fine,” said Nicolas Véron, a senior fellow at Bruegel, a research organization in Brussels. “It signals that the time when only the U.S. can impose big fines is probably over.”
But the settlement also highlighted Europe’s lack of a financial markets enforcer with powers similar to the Securities and Exchange Commission in the United States, including authority to pursue criminal charges.
What we haven’t really seen is a broad sell-off of financial stocks despite the fines they’re paying and will likely have to pay in the near future. For some of the largest banks, regulators are looking into everything from mortgage-back securities to credit cards. That’s a lot of uncertainty about when it will all be resolved and what the ultimate price tag will be. I’d like to see a story about why investors seem unconcerned about the continued legal issues.
by Liz Hester
Once again, press freedoms are coming under fire as government officials cite national security as the reasoning for the questioning. The Guardian’s top editor testified before U.K. Parliament about publishing files obtained from Edward Snowden about surveillance.
The New York Times lead with a quote about intimidation:
The top editor of the British newspaper The Guardian told Parliament on Tuesday that since it obtained explosive documents on government surveillance from a former National Security Agency contractor, Edward J. Snowden, it has met with government agencies in Britain and the United States more than 100 times and been subjected to measures “designed to intimidate.”
The editor, Alan Rusbridger, said the measures “include prior restraint,” as well as visits by officials to his office, the destruction of Guardian computer disks using power tools and repeated calls from lawmakers “asking police to prosecute” The Guardian for disclosing the classified material in news articles.
Mr. Rusbridger was testifying before a Parliamentary committee looking into national security matters. He faced aggressive questioning from lawmakers, particularly those of the ruling Conservative party. Some asserted that The Guardian had handled the material irresponsibly, putting it at risk of interception by hostile governments and others. Others said that the paper had jeopardized national security.
At one point during the hearing, to his evident surprise, Mr. Rusbridger was asked whether he loved his country. He answered in the affirmative, noting that he valued its democracy and free press.
He also said The Guardian would “not be put off by intimidation” but would also not act recklessly.
Following Mr. Rusbridger in front of the committee, a senior British police officer, Cressida Dick, refused to rule out prosecutions as part of an investigation into the matter.
The Washington Post story began with paraphrasing Rusbridger defending press freedom:
Guardian editor Alan Rusbridger on Tuesday vigorously defended his decision to publish a series of articles based on the secret files of former National Security Agency contractor Edward Snowden, telling a parliamentary committee hearing that the right to continue pursuing the story goes to the heart of press freedoms and democracy in Britain.
Rusbridger also told lawmakers that the Guardian had thus far published only 1 percent of the roughly 58,000 Snowden files it had received.
“I would not expect us to be publishing a huge amount more,” he said.
The hearing on the Guardian’s handling of intelligence data leaked by Snowden, now living in self-imposed exile in Moscow, drew the attention of free-speech advocates on both sides of the Atlantic. Rusbridger faced more than an hour of questioning by Parliament’s Home Affairs Select Committee on counterterrorism, testifying in an occasionally combative public grilling of both the Guardian and its editor.
Along with The Washington Post, the Guardian — a London-based news outlet with a print circulation under 200,000 but online readers numbering in the many millions — was the first to publish reports based on the Snowden leaks. In response, British authorities have acted far more aggressively than U.S. or other European officials, launching what Rusbridger and international free-speech advocates have decried as a campaign of “intimidation” against the paper. Actions taken so far include the coerced destruction of Snowden data being held at the Guardian’s London headquarters and public denunciations by Prime Minister David Cameron, as well as the decision to summon Rusbridger for questioning by lawmakers on Tuesday.
The Reuters headline and top talked about how journalists may face charges for reporting on the documents:
British police are examining whether Guardian newspaper staff should be investigated for terrorism offenses over their handling of data leaked by Edward Snowden, Britain’s senior counter-terrorism officer said on Tuesday.
The disclosure came after Guardian editor Alan Rusbridger, summoned to give evidence at a parliamentary inquiry, was accused by lawmakers of helping terrorists by making top secret information public and sharing it with other news organizations.
The Guardian was among several newspapers which published leaks from U.S. spy agency contractor Snowden about mass surveillance by the National Security Agency (NSA) and Britain’s eavesdropping agency GCHQ.
Assistant Commissioner Cressida Dick, who heads London’s Specialist Operations unit, told lawmakers the police were looking to see whether any offenses had been committed, following the brief detention in August of a man carrying data on behalf of a Guardian journalist.
Security officials have said Snowden’s data included details of British spies and its disclosure would put lives at risk. Rusbridger told the committee his paper had withheld that information from publication.
“It appears possible once we look at the material that some people may have committed offenses,” Dick said. “We need to establish whether they have or they haven’t.”
While not necessarily a business story, the issue should cause every journalist to wince in fear. It seems the news organization didn’t obtain the documents under false pretenses. But publishing information about the military and law enforcement could get the journalists in trouble. It’s a sticky question, but the world needs a free press in order to check abuses of power, seemingly exactly what happened here. Everyone involved with the media should be paying attention when the U.S. and the U.K. start trying to curb press freedoms.
Some of Tuesday’s top business stories:
New York Times
Detroit is ruled eligible for bankruptcy, by Bill Vlasic and Monica Davey
As hospital prices soar, a stitch tops $500, by Elisabeth Rosenthal
Auto sales rise in November, boosted by discounts, by Ben Klayman and Deepa Seetharaman
UnitedHealth says health reform to cost up to $1 per share in 2014, by Caroline Humer
D.C. to vote on $11.50 minimum wage, by Gregory Wallace
How much more will smokers pay for Obamacare? by John Tozzi
Triangle Business Journal
UNC startup connects donors and needy families – with a mouse-click, by Lauren K. Ohnesorge
Today in business journalism
This date in business journalism history
by Liz Hester
While it may not be well known outside the five boroughs of New York City, the magazine of the same name is something of a must-read for certain in-the-know city dwellers. A mix of culture, fashion, design, products and news, the magazine often wins awards and sparks conversations. The announcement the weekly was moving to a bi-monthly prompted many to shake their heads at the state of print media.
David Carr of the New York Times wrote this in his column about the move:
Since its founding in 1968, New York magazine has served as a prototype of literate, high-tempo publishing, using its weekly cadence and location in one of the world’s cultural capitals to usher in a new, more intimate and frank approach to what a publication could be.
Using the tenets of so-called New Journalism, the magazine helped popularize the knowing, skeptical voices of writers including Tom Wolfe, Jimmy Breslin, Gloria Steinem and Nora Ephron. It was the birthplace of both Ms. Magazine and the concept of “radical chic.”
Now, this magazine that has been at the vanguard of Manhattan publishing for almost five decades is acknowledging that the cutting edge is not necessarily a lucrative, or sustainable proposition, at least on the same schedule.
Beginning in March, New York will retreat from its long-standing status as a weekly and come out every other week instead.
Along with the closing of the printed Newsweek and the planned spin-off of Time Inc., which includes the weeklies Time and People, the move to bi-weekly publishing represents the end of an era and underscores the dreary economics of print and its diminishing role in a future that’s already here.
The change will beget misty eyes from magazine geeks — myself among them — while other consumers will shrug and dive into the ever-changing web version of New York magazine that shows up in their browser.
The weekly schedule of New York has already been squeezed, so that the magazine comes out only 42 weeks a year. Soon it will be 26 times a year, with three additional special issues — best doctors, the annual gift guide and a food-and-drink issue.
Fashion Times did a blurb about the new publication, choosing to focus on the redesign instead of the cuts:
The Cut, which is New York Magazine‘s popular online fashion website, will be rendered into the print version beginning in March.
While it’s too soon to say exactly what will be included in the new version, it has been confirmed that the section will include a “Life in Pictures” feature, which will tell stories through photography. To that end, the magazine will focus more heavily on content that takes advantage of print. The Cut section of the magazine will be similar to the rest of the already-established sections, but with a focus on fashion. Previously, every third issue of New York Magazine would have four pages dedicated to fashion. But now, fashion will get six pages in each issue.
Each issue of the revamped version of New York Magazine will include four big sections instead of the current three, as well as four big stories instead of three. Columnists will report on sex, business and potentially technology.
Carr of the NYT writes that it isn’t readers the magazine is losing, but cuts are due to drops in ads and prices:
Journalistically, New York magazine has prospered, winning a string of big awards on the way to being named Magazine of the Year in 2013 by the American Society of Magazine Editors. But that doesn’t pay the bills, a job that increasingly falls to the website, which includes NYmag.com, Vulture.com, The Cut and Grub Street. Digital revenues have been growing at a rate of 15 percent year-over-year, and in the coming year will surpass print advertising revenues, according to Mr. Burstein. But part of the reason those lines are crossing is that the print revenues are plummeting.
New York, with a current subscriber base just above 400,000, according to the Alliance for Audited Media, got clobbered after the 2008 recession when classified ads went missing and stayed that way. So far this year, the magazine is down 9.2 percent in ad pages compared with the same period last year, which was miserable as well.
The brand New York is hardly dying. New York magazine’s web traffic grew 19 percent in the last eight months, to more than nine million unique visitors a month, according to comScore. But to keep up that rate of growth in a competitive set that includes publicly held companies like The New York Times and upstarts like the venture-capital backed online news site BuzzFeed, the magazine had to reduce costs to find the money to fund the part of the business that is growing.
The New York Post compared the cuts to what happened at the now-closed Newsweek:
The move to slash frequency is the latest sign that newsweeklies are a troubled commodity.
The demise of Newsweek’s print edition at the end of 2012 is the most glaring example. The magazine was still losing $20 million a year despite a merger with the Daily Beast news site at Barry Diller’s IAC Interactive Corp.
The Newsweek name was sold to IBT Media, owner of International Business Times, and most of the former staff was laid off. IBT Media continues to publish the title as a digital-only format although print editions are still produced by overseas licensees.
It’s always sad to see a magazine reduce its publication, but the bright side is that New York has figured out how to market, package and make money on the web. And that’s what many others in the industry are struggling to do, indicating the company will still be turning out pithy coverage for some time to come.
Some of Monday’s top stories:
Hilton seeks as much as $2.4 billion in biggest hotel IPO, by Hui-yong Yu
U.S. stocks decline amid retail, manufacturing reports, by Namitha Jagadeesh and Nick Taborek
Factory activity gauge at 2-1/2-year high, by Lucia Mutikani and Ryan Vlastelica
U.S. top court declines to hear online retailers tax case, by Lawrence Hurley and Patrick Temple-West
Why some states pay less for Obamacare, by Tami Luhby
Today in business journalism
This date in business journalism history