The jobs report provided no real surprises, while total U.S. employment reached a record high in May. Investors generally treated the report as a solid indicator of growth that was on the right track, if not moving as fast as they’d wish. The Dow and the S&P 500 Index closed at record highs.
The Dow rose 88 points, with 21 of its 30 components gaining ground; the S&P 500 Index gained 8; and the Nasdaq was higher by 25. Advancers led decliners by just under three to one on the NYSE and five to two on the Nasdaq. The prices of Treasuries weakened. Gold futures fell 80 cents to close at $1,252.50 an ounce, and the price of crude oil gained 18 cents to settle at $102.66 a barrel.
For the week, the Dow gained 1.2%, the S&P 500 Index rose 1.3%, and the Nasdaq was higher by 1.8%.
In Other Business News:
- Employers added 217,000 jobs to payrolls in May, according to the Labor Department’s nonfarm payrolls report, while the unemployment rate remained unchanged at 6.3%. The participation rate also was unchanged at 62.8%, a historically low percentage. Despite the low participation rate, a rising population helped the U.S. finally overtake the total number of jobs from before the financial crisis, reaching a workforce total of 138.46 million, a record high for U.S. employment. The largest number of new jobs (39,000) came from the health and social services industry. Almost all the net new jobs were in the private sector, as government hiring was flat.
- Securities and Exchange Commission Chairwoman Mary Jo White announced that the SEC would seek to more tightly regulate high-frequency traders and dark pools that allow trading out of sight of public exchanges. One proposal would be to require high-frequency traders to register as broker/dealers, which would increase oversight; another would be to increase disclosures for large institutions placing large trades away from exchanges. The SEC will also examine high-speed trading strategies that might lead to more market volatility.
- Outstanding consumer credit jumped $26.85 billion to $3.18 trillion in April, according to the Federal Reserve. The gain was notable due to an $8.8 billion increase in revolving debt, such as credit cards, as revolving debt growth has been slower in recent months. Nonrevolving debt, such as auto loans (but excluding mortgages), still led the way with an $18 billion increase.
- Car service Uber raised $1.2 billion in private funding that valued the company at $18.2 billion, a record for the five-year-old company and near the top of valuations for startups in general (with the exception of Facebook, which according to reports was valued at $50 billion by private investors before it was taken public). Uber’s car service competes with traditional taxi services and has recently explored the local delivery business.
Google’s first prototypes for computer-driven cars used a standard car’s preexisting mechanisms for steering, accelerating, and braking, so neighboring drivers could be forgiven for thinking there were ghost-driven cars on the road, as they’d peer over at the empty driver’s seat next to them and see the steering wheel moving by itself.
Last week, Google took a great step forward (or perhaps backward, depending on how you feel about it) and unveiled the driverless concept car of the future. The engineers asked a simple yet profound question. If you could design a car from scratch and didn’t have to assume there’d be a driver in the front seat, what would it look like? Where would the powertrain go? What are the parental possibilities that open up when the driver no longer has to reach into the backseat while yelling “Stop that or we’re turning around; I mean it!”
A true driverless car wouldn’t need a steering wheel, and Google’s new concept car doesn’t have one. The seats don’t even have to face forward, so the passengers in the front would be able to swivel around to face the backseat passengers and play a card game. Or they could solve the aforementioned behavioral problem of rambunctious children by turning around and staring at them relentlessly, and the kids in question would know they couldn’t simply wait it out due to the need for the parent to actually look back at the road. (I assume most discipline is handled by staring; this claim has not yet been reviewed by actual parents.)
What’s most interesting about Google’s move is the motivation behind completely getting rid of the ability of a human to control the car, as reported by MIT Technology Review. Google got rid of human-control interfaces like the steering wheel because human test drivers trusted the car too much. At first, the test drivers were skeptical of the car’s autonomous capabilities, but they soon grew complacent and even overconfident in the car’s abilities. MIT quotes Nathaniel Fairfield, a technical lead on the project, saying, “Humans are lazy. People go from plausible suspicion to way overconfidence.” That laziness made human beings difficult to rely on, so instead of the computer handing off to a human in case of a system failure, it hands off to another redundant system built in to the car. It’s like every movie that ever made the “Don’t worry, the car is on cruise control” joke right before the driver took a nap.
If we can’t trust human judgment to operate the car, why should we trust it to tell the car where to go in the first place? My own judgment could use some help.
“Car, take me to get ice cream.”
“I took you out for ice cream yesterday.”
“Executive override. I repeat, take me to get ice cream.”
[Car holds up mirror. Directions to the gym appear on the GPS.]
“Fine, take me to the gym, and let us never speak of this again.”