Morning Money Memo …
Just before the holiday shopping season begins, there’s a shakeup in the fiercely competitive world of online shipping. More than ever, shoppers will turn to the web to get their holiday gifts. In a bid to gain loyalty shoppers, Amazon (AMZN) is tightening its shipping rules. The new threshold for free shipping is now $35 per order, up from $25 previously. The change will encourage more customers to make an annual payment of $79 for Amazon Prime, which offers unlimited two-day delivery.
EBay (EBAY) is expanding its same-day delivery service to more locations and letting buyers and sellers create “collections” of products available on its site. It’s moving beyond its roots as an online auctioneer. The firm says it’s expanding the eBay Now service to 25 markets by the end of next year. To help advance the service, which promises delivery in as little as an hour, eBay says it has bought courier service startup Shutl. Walmart (WMT) is also boosting its same-day delivery service.
As for jobs, there’s a disappointing outlook for holiday hiring. The National Retail Federation says the pace of growth in hiring has slowed, similar to what’s happened to the rest of the job market. Economist Diane Swonk is not surprised: “The back to school season was not great for retailers, and that means also delays in hiring for the holiday season as well.” Economic analyst Joe Deaux at TheStreet.com says more new jobs have been created for several years but not enough of them to make a big improvement. “This is a slow slog back from the 2008 financial crisis.” There is one new hopeful sign. After weeks of lower readings, Gallup says its consumer confidence index rose slightly last week.
Oil prices continue to fall, and that’s good news for motorists. The cost of crude is below $98 a barrel. “All kinds of stars are aligning here for motorists,” says analyst Patrick deHaan at gasbuddy.com. “Half the United States may have seen prices under $3 a gallon here as we approach Christmas.”
Tuition and fees at public colleges and universities rose less than 3 percent this year. The College Board says that’s the smallest rise in 30 years. Last year the average increase was 4 1/2 percent, and two years ago it was 8 percent.
The stock market appears to be in a sweet spot, a Goldilocks moment, perhaps. The economy is not weak enough to alarm investors, but neither is it strong enough for any change in policy soon by the Federal Reserve. The bond buying stimulus is likely to stay at least until next spring. The S&P 500 had its fourth consecutive record close – gaining 10 points Tuesday. The Dow rose 75 points. Stock futures are down this morning. And for the first time in nine trading sessions, European stocks are lower.