NFIB
- Low and declining sales…
- …but not a major concern:
- Inflation still a concern…
- …but profits are improving.
- Inventories now in good shape.
- Employment needs fulfilled.
- Credit markets not worsening, actually improving a little in April
Wendy’s, Google Train Next-Generation Order Taker: an AI Chatbot
Wendy’s is automating its drive-through service using an artificial-intelligence chatbot powered by natural-language software developed by Google and trained to understand the myriad ways customers order off the menu.
With the move, Wendy’s is joining an expanding group of companies that are leaning on generative AI for growth.
The Dublin, Ohio-based fast-food chain’s chatbot will be officially rolled out in June at a company-owned restaurant in Columbus, Ohio, Wendy’s said. The goal is to streamline the ordering process and prevent long lines in the drive-through lanes from turning customers away, said Wendy’s Chief Executive Todd Penegor.
“It will be very conversational,” Mr. Penegor said about the new artificial intelligence-powered chatbots. “You won’t know you’re talking to anybody but an employee,” he said.
To do that, Wendy’s software engineers have been working with Google to build and fine-tune a generative AI application on top of Google’s own large language model, or LLM—a vast algorithmic software tool loaded with words, phrases and popular expressions in different dialects and accents and designed to recognize and mimic the syntax and semantics of human speech. (…)
The application has also been programmed to upsell customers, offering larger sizes, Frosties or daily specials. Once the chatbot takes an order, it appears on a screen for line cooks. From there, prepared meals are relayed to the pickup window and handed off to drivers by a worker. (…)
“It’s at least as good as our best customer service representative, and it’s probably on average better,” Mr. Vasconi said, adding that part of the goal of the pilot rollout is to show Wendy’s franchisees that the technology works and can improve service speed and consistency.
Up to 80% of food orders at Wendy’s are made at the drive-through lane, compared with roughly two-thirds before the Covid-19 pandemic, the company said. (…)
Spending in the global generative AI market is expected to reach $42.6 billion by the end of the year, growing at a compound annual rate of 32% to $98.1 billion by 2026, according to market analytics firm PitchBook Data.
Home Prices Drop in a Third of the U.S. Prices fell in more parts of the U.S. than they have in over a decade during the first quarter.
Home prices fell in more parts of the U.S. than they have in over a decade during the first quarter, when nearly a third of metro areas posted annual price declines, the National Association of Realtors said Tuesday.
During the peak of the housing boom, home prices surged in practically every corner of the U.S. Now, the housing market is split down the middle of the country, with prices still rising in many parts of the Midwest, South and Northeast while sliding in Western states. (…)
Prices declined on an annual basis in 31% of the 221 metro areas tracked by NAR, the highest percentage in 11 years. (…)
Western markets that were already expensive or where prices climbed the most during the pandemic-driven housing boom are now the ones where prices are falling the fastest. In much of the rest of the U.S., limited inventory continues to drive prices higher.
Nationwide, the median single-family existing-home sale price fell 0.2% in the first quarter from a year earlier to $371,200, the first year-over-year price decline since the first quarter of 2012, NAR said. (…)
In the first quarter, the typical monthly mortgage payment for a single-family home rose to $1,859, a 33% increase from $1,397 a year earlier, NAR said. (…)
DON’T FEED THE BEARS!
“This bear market has been an absolute wealth destroyer Household net worth is now contracting for the 4th time in the past 3 decades” (@GameofTrades):
…But Americans are still 27% richer than in 2019 and 110% better off than in 2007.
CRE
“Offices account for nearly a quarter of commercial real estate debt maturities this and next year, or about $250B.” (@Mayhem4Markets)
BTW: Canada’s banking sector has not experienced the declines in bank deposits seen in the US. (The Daily Shot)
Source: Scotiabank Economics
Data Dependency In Real Terms
(…) “We haven’t said we are done raising rates” and Fed officials have not yet decided what lies ahead with possible increases in short-term borrowing costs, Williams said at an Economic Club of New York gathering. “We’ve made incredible progress” in taking action to lower overly high levels of inflation, but “if additional policy firming is appropriate, we’ll do that,” he said. (…)
“In my forecast I see a need to keep a restrictive stance of policy in place for quite some time to make sure we really bring inflation down from 4 percent all the way to 2 (percent). I do not see in my baseline forecast any reason to cut interest rates this year,” Williams said.
As the head of the New York Fed, Williams also serves as vice chair of the central bank’s rate-setting Federal Open Market Committee, and he is a key voice on the monetary policy and economic outlook. (…)
Williams also said “although we have seen some signs of a gradual cooling in the demand for labor – as well as for some goods and commodities – overall demand continues to exceed supply.” (…)
Williams said the aftermath of the banking stresses will figure prominently in his thinking about the future of monetary policy. “I will be particularly focused on assessing the evolution of credit conditions and their effects on the outlook for growth, employment and inflation,” he said. (…)
In his speech, Williams said he expects inflation, which was running at an annual rate of 4.2% in March as measured by the personal consumption expenditures price index, to fall to 3.25% this year and back to the 2% target by 2025. He noted there have been signs of slowing price pressures but core services inflation stripped of housing factors remains persistent.
He also said he sees the economy growing moderately this year and that the jobless rate, at 3.4% as of April, should rise to between 4.0% and 4.5% this year.
(…) “We can’t yet say how many more rate hikes will happen,” Stournaras said, observing that this will depend on projections for inflation, economic growth and financial conditions. “As things stand today and if nothing dramatically changes, we can say that in 2023 rate hikes will end.”
(…) While inflation is well down from its double-digit peak, the outlook could face “significant upside risks,” Lagarde told Japan’s Nikkei newspaper in an interview published Wednesday. The ECB must be particularly attentive to wage pressures, she said. (…)
“We’re not yet done with rate hiking,” Bundesbank chief Joachim Nagel told German radio earlier Wednesday, though he said policymakers are “coming to the home stretch. (…)
Speaking Tuesday evening, Executive Board member Isabel Schnabel said the ECB will continue lifting borrowing costs “with full determination until there are signs that core inflation is also falling on a sustained basis.”
(…) Latvia’s Martins Kazaks, who told Bloomberg this week that investors are wrong to bet on reductions early next year.
Druckenmiller Says US on Brink of a Recession, Sees Hard Landing
The downturn will occur at some point during the current quarter — even earlier than he previously expected, the billionaire founder of Duquesne Family Office said Tuesday during the 2023 Sohn Investment Conference. Druckenmiller, 69, said a variety of factors including a decline in retail sales and the upheaval gripping the nation’s regional banks prompted him to accelerate his forecast for a recession. (…)
He defined a hard landing as unemployment exceeding 5%, corporate profits slumping at least 20% and rising bankruptcies. (…)