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‘Are There Any Parisians Left?’ The Olympics Have Residents Fleeing the City.

As Paris makes its final preparations for the Olympic games, its residents are busy with their own—packing their suitcases, confirming their reservations, and getting out of town.

Worried about the hordes of crowds and overall chaos the Olympics could bring, Parisians are fleeing the city in droves and inundating resort cities around the country. Hotels and holiday rentals in some of France’s most popular vacation destinations—from the French Riviera in the south to the beaches of Normandy in the north—say they are expecting massive crowds this year in advance of the Olympics. The games will run from July 26-Aug. 1.

“It’s already a major holiday season for us, and beyond that, we have the Olympics,” says Stéphane Personeni, general manager of the Lily of the Valley hotel in Saint Tropez. “People began booking early this year.”

Personeni’s hotel typically has no issues filling its rooms each summer—by May of each year, the luxury hotel typically finds itself completely booked out for the months of July and August. But this year, the 53-room hotel began filling up for summer reservations in February.

“We told our regular guests that everything—hotels, apartments, villas—are going to be hard to find this summer,” Personeni says. His neighbours around Saint Tropez say they’re similarly booked up.

As of March, the online marketplace Gens de Confiance (“Trusted People”), saw a 50% increase in reservations from Parisians seeking vacation rentals outside the capital during the Olympics.

Already, August is a popular vacation time for the French. With a minimum of five weeks of vacation mandated by law, many decide to take the entire month off, renting out villas in beachside destinations for longer periods.

But beyond the typical August travel, the Olympics are having a real impact, says Bertille Marchal, a spokesperson for Gens de Confiance.

“We’ve seen nearly three times more reservations for the dates of the Olympics than the following two weeks,” Marchal says. “The increase is definitely linked to the Olympic Games.”

Worried about the hordes of crowds and overall chaos the Olympics could bring, Parisians are fleeing the city in droves and inundating resort cities around the country.
Getty Images

According to the site, the most sought-out vacation destinations are Morbihan and Loire-Atlantique, a seaside region in the northwest; le Var, a coastal area within the southeast of France along the Côte d’Azur; and the island of Corsica in the Mediterranean.

Meanwhile, the Olympics haven’t necessarily been a boon to foreign tourism in the country. Many tourists who might have otherwise come to France are avoiding it this year in favour of other European capitals. In Paris, demand for stays at high-end hotels has collapsed, with bookings down 50% in July compared to last year, according to UMIH Prestige, which represents hotels charging at least €800 ($865) a night for rooms.

Earlier this year, high-end restaurants and concierges said the Olympics might even be an opportunity to score a hard-get-seat at the city’s fine dining.

In the Occitanie region in southwest France, the overall number of reservations this summer hasn’t changed much from last year, says Vincent Gare, president of the regional tourism committee there.

“But looking further at the numbers, we do see an increase in the clientele coming from the Paris region,” Gare told Le Figaro, noting that the increase in reservations has fallen directly on the dates of the Olympic games.

Michel Barré, a retiree living in Paris’s Le Marais neighbourhood, is one of those opting for the beach rather than the opening ceremony. In January, he booked a stay in Normandy for two weeks.

“Even though it’s a major European capital, Paris is still a small city—it’s a massive effort to host all of these events,” Barré says. “The Olympics are going to be a mess.”

More than anything, he just wants some calm after an event-filled summer in Paris, which just before the Olympics experienced the drama of a snap election called by Macron.

“It’s been a hectic summer here,” he says.

Hotels and holiday rentals in some of France’s most popular vacation destinations say they are expecting massive crowds this year in advance of the Olympics.
AFP via Getty Images

Parisians—Barré included—feel that the city, by over-catering to its tourists, is driving out many residents.

Parts of the Seine—usually one of the most popular summertime hangout spots —have been closed off for weeks as the city installs bleachers and Olympics signage. In certain neighbourhoods, residents will need to scan a QR code with police to access their own apartments. And from the Olympics to Sept. 8, Paris is nearly doubling the price of transit tickets from €2.15 to €4 per ride.

The city’s clear willingness to capitalise on its tourists has motivated some residents to do the same. In March, the number of active Airbnb listings in Paris reached an all-time high as hosts rushed to list their apartments. Listings grew 40% from the same time last year, according to the company.

With their regular clients taking off, Parisian restaurants and merchants are complaining that business is down.

“Are there any Parisians left in Paris?” Alaine Fontaine, president of the restaurant industry association, told the radio station Franceinfo on Sunday. “For the last three weeks, there haven’t been any here.”

Still, for all the talk of those leaving, there are plenty who have decided to stick around.

Jay Swanson, an American expat and YouTuber, can’t imagine leaving during the Olympics—he secured his tickets to see ping pong and volleyball last year. He’s also less concerned about the crowds and road closures than others, having just put together a series of videos explaining how to navigate Paris during the games.

“It’s been 100 years since the Games came to Paris; when else will we get a chance to host the world like this?” Swanson says. “So many Parisians are leaving and tourism is down, so not only will it be quiet but the only people left will be here for a party.”

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Google Fails to ‘Wow’ as AI Bills Mount

It’s good to be Google these days. But it isn’t easy, and it will keep getting harder.

Second-quarter results from parent company Alphabet on Tuesday afternoon showed strength in advertising and cloud revenue along with a record high in operating profit as the Silicon Valley titan, once known for lavish employee perks, continues to clamp down on most costs, save for those designed to build out generative artificial intelligence capabilities .

But the results also offered “no excitement,” in the words of Jefferies analyst Brent Thill . Overall revenue exceeded Wall Street’s consensus projection by just 0.6%—the lowest beat percentage in at least five years, according to FactSet. YouTube advertising revenue also came in lower than analysts expected. Alphabet’s previous report, three months ago , offered bigger positive surprises in both revenue and earnings growth, with the announcement of the company’s first-ever dividend thrown in for good measure. Alphabet’s stock had jumped nearly 17% since that report; the shares gave up about 4% in premarket trading on Wednesday.

Tuesday’s results also set the stage for what might be a more challenging second half of the year. For one, comparisons will be tougher as the second half of last year had Google nearly recovered from an earlier advertising slump. Google also didn’t fully ramp up its spending on AI infrastructure until well into the second half of 2023; capital expenditures in the first half of 2023 were barely half of the $25.2 billion the company has spent in the first half of this year.

That spending won’t be taking a breather any time soon, even as Google has pared back other costs and even brought its head count down by more than 1,300 positions in the most recent quarter. Alphabet said Tuesday that capex will be at or above $12 billion a quarter for the second half of the year, likely leading to a total outlay of more than $49 billion for the year—84% higher than what the company has averaged annually over the past five years.

“Look, obviously we are at the early stage of what I view as a very transformative area,” Alphabet Chief Executive Sundar Pichai said during Tuesday’s earnings call when asked by an analyst about the company’s AI investments. He added that “the risk of underinvesting is dramatically greater than the risk of over investing for us here,” not mentioning the record amounts of capex that tech rivals Microsoft , Amazon.com and Meta Platforms are pouring into the same thing.

Google has the resources: Alphabet’s net cash pile of nearly $98 billion is substantially bigger than those of even its deep-pocketed peers. But putting that money to work is getting to be a challenge. The Wall Street Journal reported Monday that Google’s talks to acquire cybersecurity startup Wiz have fallen apart. The purported $23 billion deal would have been Google’s largest ever and most certainly would have drawn the type of close regulatory scrutiny that has lately been keeping tech mergers in limbo for 18 months or more. Such an uncertain payoff reportedly was a concern among Wiz and its investors; Google’s acquisition of Fitbit in 2021 for less than one-tenth that price took nearly 15 months to close.

Google is also going back to the drawing board on a long-running plan to phase out the use of internet tracking technology known as “cookies,” despised by privacy advocates but depended upon by advertisers. Google was building up an alternative technology called “privacy sandbox,” but that plan drew a lot of opposition from advertisers and regulators worried that it would further cement the company’s internet advertising dominance. Google said Monday it would instead offer users a prompt to allow them to opt out of cookie tracking.

That move is unlikely to dent Google’s powerful search ad business. But that and the failed Wiz talks show the growing constraints the company is operating under as regulators look even more closely at big tech’s position, and judges and juries start weighing in. A verdict in the federal government’s antitrust case against Google is expected before the end of the year and could result in a ruling that would seek a breakup of the $250-billion-a-year advertising juggernaut.

Google’s latest results were good, but good isn’t always enough.

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Penthouse Atop a French Riviera Hotel that Hosted Ernest Hemingway to Coco Chanel Lists for €40 Million

A lavish penthouse on the French Riviera within a former Art Deco hotel that was frequented by a veritable who’s who of writers, artists and actors has hit the market for €40 million (US$43.4 million).

The three-level unit sits atop Le Provençal, a residential development converted from the Hôtel Provençal, which was built in the mid-1920s at the direction of American millionaire Frank Jay Gould.

In its prime, the 290-room hotel in the resort town Juan-les-Pins was the place to see and be seen.

“Chanel invented pyjamas as beachwear there. Ernest Hemingway sat at the bar, and Edith Piaf partied in the ballroom. Picasso painted the beach scenes, and Man Ray photographed them,” according to The New York Times.

The penthouse has a private pool.
Caudwell

 

The hotel shuttered in 1977, and its transformation into 39 residences by British developer Caudwell is expected to be completed next year.

Entered via private elevator and spanning upward of 9,000 square feet, the six-bedroom penthouse, which hit the market earlier this week, spans the east wing of the building across the eighth, ninth and 10th floors.

For its interiors, the developer aimed to channel the glamour for which the area is renowned, and turned to the outfits of famous names who frequently visited, along with the colours of the French Riviera, as inspiration.

The primary bedroom suite, for example—which has two bathrooms, dressing rooms and a private terrace—pays homage to the pink hues of the surroundings and the elaborate caftans that Elizabeth Taylor wore on one of her many visits to the area.

The interiors are inspired by the glamour of the area.
Caudwell

The home also boasts a family room, a home cinema, a gym, a family kitchen and breakfast room, a sculptural oval staircase, vast living and entertaining spaces, and impressive views along the French Riviera.

There’s a whopping 3,789 square feet of private terraces across the home—making its outdoor space larger than many single-family homes—a private pool and six parking bays in the development’s secure parking garage.

“With their private terraces, swimming pools and far-reaching panoramic views the penthouses at Le Provençal are the jewels in the [development’s] crown,” said Lars Christiaanse, group director of sales at Caudwell.

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Alexa Is in Millions of Households—and Amazon Is Losing Billions

Amazon.com ’s Echo speakers are the type of business success companies don’t want: a widely purchased product that is also a giant money loser.

Chief Executive Andy Jassy is trying to plug that hole—and move away from the Amazon accounting tactic that helped create it.

When Amazon launched the Echo smart home devices with its Alexa voice assistant in 2014, it pulled a page from shaving giant Gillette’s classic playbook: sell the razors for a pittance in the hope of making heaps of money on purchases of the refill blades.

A decade later, the payoff for Echo hasn’t arrived. While hundreds of millions of customers have Alexa-enabled devices, the idea that people would spend meaningful amounts of money to buy goods on Amazon by talking to the iconic voice assistant on the underpriced speakers didn’t take off.

Customers actually used Echo mostly for free apps such as setting alarms and checking the weather. “We worried we’ve hired 10,000 people and we’ve built a smart timer,” said a former senior employee.

As a result, Amazon has lost tens of billions of dollars on its devices business, which includes Echos and other products such as Kindles , Fire TV Sticks and video doorbells, according to internal documents and people familiar with the business.

Between 2017 and 2021, Amazon had more than $25 billion in losses from its devices business, according to the documents. The losses for the years before and after that period couldn’t be determined.

It is a high-stakes miscalculation the tech giant made under founder Jeff Bezos that current CEO Jassy, who took the helm in 2021 , is now trying to change. As part of a plan to reverse losses, Amazon is launching a paid tier of Alexa as soon as this month, a move even some engineers working on the project worry won’t work, according to people familiar with those efforts.

An Amazon spokeswoman said the devices division has established numerous profitable businesses and is well-positioned to continue doing so, adding: “Hundreds of millions of Amazon devices are used by customers around the world, and to us, there is no greater measure of success.” The company declined to make Jassy or Panos Panay, who leads devices, available for an interview.

As Jassy tries to fix it, he is rethinking the obscure Bezos-era metric inside Amazon that helps explain why Echo and other devices could accrue such huge losses for so long with little repercussion. Called “downstream impact,” or DSI, it assigns a financial value to a product or a service based on how customers spend within Amazon’s ecosystem after they buy it.

Downstream impact has been used across Amazon business lines, from its Prime membership program to its video offerings and music.

The metric was developed in 2011 by a team of economists including an eventual Nobel Prize winner. In some instances, the model worked clearly. When customers buy Amazon’s Kindle e-reader—one of Amazon’s profitable devices—they are very likely to then buy ebooks to read on that device. Ebooks are part of the books business, not the devices business, but Amazon leaders said it made sense for the Kindle team to claim part of revenue when assessing their product’s internal value.

Similarly, some revenue from advertisements displayed on Fire TV streaming devices is also claimed as Fire TV revenue.

Some Amazon devices can count on direct revenue, such as by selling users subscriptions attached to the product. More than half of customers who buy smart-camera doorbells from Ring, another profitable Amazon device that the company bought in 2018, purchase security subscriptions.

In other cases—especially Echo devices—the downstream impact idea broke down, said the people familiar with the devices business.

Unlike the revenue, operating profit and other financial metrics Amazon and other companies report publicly, downstream impact is an estimate used internally, and not a particularly scientific or precise one.

Echo and other devices are generally sold at or below the cost to make them. The devices team, in internal pitch meetings to senior management, would claim the top end of a range of estimated revenue from downstream impact, some of the people said. The team relied heavily on the metric to justify costs related to Echo and other devices and the growing size of staff devoted to the business, which at one point swelled to more than 15,000 employees across all its products.

The system also enabled divisions to count the same revenue more than once, according to former executives. For example, if a customer bought an Echo device and Amazon’s Fire TV streaming stick, and then signed up for Amazon Prime, both the Echo team and the Fire TV team could claim cuts of the revenue from the Prime subscription.

Other downstream impact revenue that helped Echo devices look financially better on paper internally came from Amazon Music, a Spotify competitor with a $10 monthly subscription version.

The devices team also claimed a piece of shopping revenue, because people can use Alexa to order or reorder goods—though former employees on the Alexa shopping team say that doesn’t contribute meaningful e-commerce revenue.

The Amazon spokeswoman said more than half of Echo owners have used it to shop but declined to answer questions on how much they buy or how often they do so.

“Basically DSI was the golden thing that kept us all afloat all these years,” said a former longtime Amazon employee who worked on Echo.

Racing Google

Amazon’s devices operation was a pet project of Bezos, and the Alexa voice assistant and the Echo speakers through which it communicated were inspired by his interest in the spaceship computer in “Star Trek.”

“When launching products back then, we didn’t have to have a profit timeline for them,” said a former longtime devices executive. “We had to get the system in people’s homes and we’d win. Innovate, and then figure out how to make money later.”

To do that, the team had to keep prices low. Amazon sometimes even gave away versions of the smart speaker as part of promotions in a bid to get a larger base of users.

“We don’t have to make money when we sell you the device,” former Amazon devices senior vice president Dave Limp told The Wall Street Journal in 2019. “Instead, we make money when people actually use the device.”

Amazon was up against competition from giant rivals including Google, whose line of smart speakers was priced very low. Both companies were trying to grab space in as many homes as possible. “We were constantly checking their pricing. There would be water cooler talk like ‘what are we trying to [do], race Google to the bottom?’” said a former person on the Echo team.

Bezos protected the devices team, even as losses mounted, said people familiar with the unit, continuing investment and expanding staffing.

In 2018, devices lost more than $5 billion. It was spending lavishly to develop devices such as an in-home robot eventually named Astro that could act as a smart butler. Unveiled in 2021 but still sold only by invitation, Astro boasts a $1,600 price tag and more than $1 billion in total development costs. This month, Amazon killed off its Astro for Business product.

An Amazon spokeswoman denied Bezos shielded the devices business or treated it any differently than Amazon’s other businesses.

Despite Bezos’ well-known mantra to take risks and “fail fast,” the losses racked up over years. Customers weren’t shopping on the device, and attempts to sell services such as security through Alexa also floundered. Pushing advertisements through the smart speakers bothered users, so Amazon limited their use.

In 2019, device losses increased to more than $6 billion, according to internal documents. Still, the device team introduced new products, such as the Luna gaming streaming service with corresponding devices and the Halo fitness tracker.

Jassy’s profitability review

Jassy, who had headed Amazon’s lucrative cloud-computing business before becoming CEO, has a reputation as an operator laser-focused on profits.

Soon after taking the reins from Bezos three years ago, he did a profitability review of Amazon’s business lines, from retail and logistics to advertising. He zeroed in on the money-losing devices business , the Journal has reported.

Teams working on new devices without a clear path to profitability were disbanded. Those working on more mature products that weren’t showing revenue or profits were instructed to develop revenue streams. Jassy often asked leaders to demonstrate a path to profitability without using downstream impact as a crutch, according to people familiar with the discussions.

In October 2022, Amazon killed off Amazon Glow, a video-calling gadget that was losing money on each sale—and wasn’t recouping the losses when customers used it or paid a fee for content. The product had launched only a year earlier. Jassy had told the team that he wanted it to be profitable before downstream impact.

The Amazon spokeswoman said the company plans to continue measuring the success of its businesses in part by how they help other parts of the company grow.

In late 2022, Amazon’s senior team put plans in place to begin laying off corporate employees in order to shore up profits across Amazon. Devices were a focus of the cuts.

More devices were shut down last year, including the Halo, Amazon’s fitness wearable. In late 2023, Limp, the Amazon devices head, left Amazon after more than 13 years at the company. He said in a note to employees that “It’s not because I am less bullish about the devices and services business.”

Jassy’s team also zeroed in on Alexa and the Echo device. While the technology behind Echo is wildly popular—there are more than 500 million Alexa-enabled devices globally—Jassy urged the teams to find ways to monetize the device and its technology.

A group was assembled under Amazon vice president Heather Zorn to create a way to charge customers a fee for Alexa. Code-named “Banyan,” like the tree, the group has been working to create a product called “Remarkable Alexa,” that would be built on an entirely new technology stack and have more capabilities than the current version of Alexa installed on Amazon devices, according to people familiar with the matter. Business Insider previously reported some details about Remarkable Alexa.

The new technology would more seamlessly allow users to control functions like smart home devices using their voices rather than opening an app. It will also incorporate generative artificial intelligence more than the current Echo experience. Bezos hinted at a new version of Alexa in a podcast interview in December. “Alexa is about to get a lot smarter,” he told the host.

Zorn’s team is slated to launch the new Alexa subscription service as soon as this month, and the team is still figuring out what it should charge, according to one of the people.

One person who worked on the team said some members were skeptical about whether customers would want to pay for yet another subscription in an age of cord-cutting, since people already pay a la carte for subscriptions such as Netflix, Spotify and even Amazon’s own services Prime and Amazon Music. The person also said some members worried that the new Alexa didn’t offer a compelling enough product worth paying for.

“The technology isn’t there, but they have a deadline” to launch the product, the person said.

The Amazon spokeswoman said that Amazon is closer than ever to building the world’s best personal assistant and that the opportunity is greater than what would appear on a balance sheet.

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Is ‘Rizz’ the Secret to Getting Ahead at Work?

Great leaders have it. Gen Z has a new word for it. Can the rest of us learn it?

Charisma—or rizz , as current teenage slang has anointed it—can feel like an ephemeral gift some are just born with. The chosen among us network and chitchat, exuding warmth as they effortlessly hold court. Then there’s everyone else, agonising over exclamation points in email drafts and internally replaying that joke they made in the meeting, wondering if it hit.

“Well, this is awkward,” Mike Rizzo, the head of a community for marketing operations professionals, says of rizz being crowned 2023 word of the year by the publisher of the Oxford English Dictionary. It’s so close to his last name, but so far from how he sees himself. He sometimes gets sweaty palms before hosting webinars.

Who could blame us for obsessing over charisma, or lack thereof? It can lubricate social interactions, win us friends, and score promotions . It’s also possible to cultivate, assures Charles Duhigg, the author of a book about people he dubs super communicators.

At its heart, charisma isn’t about some grand performance. It’s a state we elicit in other people, Duhigg says. It’s about fostering connection and making our conversation partners feel they’re the charming—or interesting or funny—ones.

The key is to ask deeper, though not prying, questions that invite meaningful and revealing responses, Duhigg says. And match the other person’s vibes. Maybe they want to talk about emotions, the joy they felt watching their kid graduate from high school last weekend. Or maybe they’re just after straight-up logistics and want you to quickly tell them exactly how the team is going to turn around that presentation by tomorrow.

You might be hired into a company for your skill set, Duhigg says, but your ability to communicate and earn people’s trust propels you up the ladder: “That is leadership.”

Approachable and relatable

In reporting this column, I was surprised to hear many executives and professionals I find breezily confident and pleasantly chatty confess it wasn’t something that came naturally. They had to work on it.

Dave MacLennan , who served as chief executive of agricultural giant Cargill for nearly a decade, started by leaning into a nickname: DMac, first bestowed upon him in a C-suite meeting where half the executives were named Dave.

He liked the informality of it. The further he ascended up the corporate hierarchy, the more he strove to be approachable and relatable.

Employees “need a reason to follow you,” he says. “One of the reasons they’re going to follow you is that they feel they know you.”

He makes a point to remember the details and dates of people’s lives, such as colleagues’ birthdays. After making his acquaintance, in a meeting years ago at The Wall Street Journal’s offices, I was shocked to receive an email from his address months later. Subject line: You , a heading so compelling I still recall it. He went on to say he remembered I was due with my first child any day now and just wanted to say good luck.

“So many people say, ‘Oh, I don’t have a good memory for that,’ ” he says. Prioritise remembering, making notes on your phone if you need, he says.

Now a board member and an executive coach, MacLennan sent hundreds of handwritten notes during his tenure. He’d reach out to midlevel managers who’d just gotten a promotion, or engineers who showed him around meat-processing plants. He’d pen words of thanks or congratulations. And he’d address the envelopes himself.

“Your handwriting is a very personal thing about you,” he says. “Think about it. Twenty seconds. It makes such an impact.”

Everyone’s important

Doling out your charm selectively will backfire, says Carla Harris , a Morgan Stanley executive. She chats up the woman cleaning the office, the receptionist at her doctor’s, the guy waiting alongside her for the elevator.

“Don’t be confused,” she tells young bankers. Executive assistants are often the most powerful people in the building, and you never know how someone can help—or hurt—you down the line.

Harris once spent a year mentoring a junior worker in another department, not expecting anything in return. One day, Harris randomly mentioned she faced an uphill battle in meeting with a new client. Oh!, the 24-year-old said. Turns out, the client was her friend. She made the call right there, setting up Harris for a work win.

In the office, stop staring at your phone, Harris advises, and notice the people around you. Ask for their names. Push yourself to start a conversation with three random people every day.

Charisma for introverts

You can’t will yourself to be a bubbly extrovert, but you can find your own brand of charisma, says Vanessa Van Edwards, a communications trainer and author of a book about charismatic communication.

For introverted clients, she recommends using nonverbal cues. A slow triple nod shows people you’re listening. Placing your hands in the steeple position, together and facing up, denotes that you’re calm and present.

Try coming up with one question you’re known for. Not a canned, hokey ice-breaker, but something casual and simple that reflects your actual interests. One of her clients, a bookish executive struggling with uncomfortable, halting starts to his meetings, began kicking things off by asking “Reading anything good?”

Embracing your stumbles

Charisma starts with confidence. It’s not that captivating people don’t occasionally mispronounce a word or spill their coffee, says Henna Pryor, who wrote a book about embracing awkwardness at work. They just have a faster comeback rate than the rest of us. They call out the stumble instead of trying to hide it, make a small joke, and move on.

Being perfectly polished all the time is not only exhausting, it’s impossible. We know this, which is why appearing flawless can come off as fake. We like people who seem human, Pryor says.

Our most admired colleagues are often the ones who are good at their jobs and can laugh at themselves too, who occasionally trip or flub just like us.

“It creates this little moment of warmth,” she says, “that we actually find almost like a relief.”

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Where Do Economists Think We’re Headed? These Are Their Predictions

The Wall Street Journal’s latest quarterly survey of business and academic economists shows forecasters remain firmly optimistic about the economic outlook, despite some hints of weakness in recent data.

The following graphics show what economists are thinking now and how their forecasts—and the economy—have evolved over recent months and years. After looking at the charts, see if you can guess how economists answered questions about when the Federal Reserve will cut interest rates and how the election could affect the deficit, inflation and interest rates.

Welcoming normalisation

For about two years, economists consistently underestimated the strength of the U.S. economy, forecasting the economy would grow slower than it did.

That changed recently when growth was lower than expected in the first three months of the year. Still, most economists believe that a slowdown was inevitable after a period of rapid expansion and too-high inflation. The economy, they argue, is normalising rather than deteriorating.

Seeing no acceleration in unemployment

In another shift, the unemployment rate has also recently climbed a little faster than economists were expecting—rising to 4.1% in June from 3.4% in early 2023.

Demand for workers seems to be cooling even as job growth remains solid, thanks in part to increased immigration. Again, economists are optimistic that this represents a return to a more stable environment.

Slow but steady progress on inflation

The Journal’s latest survey of economists concluded July 9, two days before consumer-price index data showed inflation easing substantially in June. That may partially explain why inflation forecasts nudged a bit higher since the last survey in early April.

The difference, though, is marginal. Current forecasts—like previous forecasts—show strong confidence that the Fed will succeed in bringing inflation down to its 2% target. The question has been what it would take to get there.

Higher-for-longer interest rates

The recent uptick in the unemployment rate and decline in inflation has rekindled hopes among investors that the Fed could cut short-term interest rates as many as three times this year—starting most likely in September.

Still, the recent good news on inflation has only come after a series of disappointing readings, including one that came out just after the April survey was conducted. As a result, the latest survey of economists shows a slightly higher path for rates.

Economists’ optimistic outlook can be seen in the dispersion of rate forecasts. The Fed would likely cut rates more aggressively if it were worried about a recession . However, 22% of survey respondents think that rates will fall below 3.75% by June 2025—down slightly from 25% of respondents in April.

Test yourself against the economists

We asked survey respondents a number of questions on the economy. Select an answer to see how economists responded.

In their own words

Here’s what some of the survey respondents said about the economy.

Who participates

The Wall Street survey has been publishing consensus forecasts from a panel of academic, business and financial economists for nearly 40 years. Not every economist answers every question.

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WHERE CEOS FIND TIME FOR TRIATHLON TRAINING AND MOTORCYCLE RACING

Many of us can barely keep up with our jobs, never mind hobbies. Yet some top executives run marathons, wineries or music-recording studios on the side. How can they have bigger responsibilities and more fun than we do?

It can seem like ultrahigh achievers find extra hours in the day. They say they’ve just figured out how to manage their 24 better than the rest of us.

They also admit they take full advantage of the privileges of being a boss—the power to delegate and the means to do things like jetting to Denmark for a long weekend of windsurfing.

Dan Streetman trains as many as 20 hours a week for Ironman triathlons in addition to his job as CEO of cybersecurity firm Tanium. It’s a big commitment for anyone, never mind a corporate leader who travels to meet with customers every week. He pulls it off by sleeping fewer than seven hours a night and waking around 5 a.m., planning his exercise sessions months in advance, and switching his brain from work mode to sport mode almost as fast as he transitions from swimming to cycling during a competition.

“I tend to work right up until the day of the race,” says Streetman, 56 years old. “I remember being on a board call on a Friday night, and Saturday morning was an Ironman. That’s just part of it.”

Ahead of business trips, he maps running routes in unfamiliar cities and scouts nearby pools, often at YMCAs. He rides stationary bikes in hotel gyms and, if they’re subpar, makes a note to book somewhere else next time he’s in town.

Leaders who eat, breathe and sleep business can appear out of touch at a time when employees crave work-life balance and expect their bosses to model it. Today’s prototypical CEO has a full life outside of work, or at least the appearance of one.

Their tactics include waking up early, multitasking and scheduling fun as if it were any other appointment. When you’re a top executive, hobbies tend to disappear unless they’re on the calendar. One CEO told me he disguises “me time” as important meetings. Only his assistant knows which calendar blocks are fake.

Ben Betts calls himself a “spreadsheet guy,” which is a bit like saying Michelangelo was a paint guy. With Excel as his canvas, Betts creates cell-by-cell checklists for just about everything he does, from cooking Christmas dinner to building a coop for newly hatched ducklings.

Betts, 41, is CEO of Learning Pool, a professional-development software maker. The duck home is part of his ambitious effort to restore an 18th-century farmhouse in England. He’s been renovating for about five years and aims to finish this fall.

On a recent Saturday, Betts’s spreadsheet called for stripping overhead beams by 5 p.m. so he could refinish them. Otherwise, the task would have to wait until the following weekend, throwing off his whole timeline. His vision of the home as a cozy enclave—completed in time for the holidays—can only come true if he sticks to a precise plan.

“Sometimes I stand in the doorway, and my wife probably wonders what I’m staring at,” he says. “I’m picturing us on a corner sofa with our two kids and the dog, watching a film in front of the fireplace I installed.”

Back in the swing

John Sicard , president and CEO of supply-chain manager Kinaxis , got back into drumming many years after he let go of his dream to become a professional musician. He practices almost every day, but his sessions sometimes last only 20 minutes. He rehearses with bandmates two or three times a month. That’s enough to prepare Sicard, 61, to play Foo Fighters and Led Zeppelin covers at occasional charity gigs.

He also built a studio in his house, where he records up-and-coming artists. He finds time by sticking to this management philosophy: “The most successful CEOs do the least amount of work.”

For Sicard, that means letting his lieutenants take charge of—and responsibility for—their divisions. Many corporate leaders work harder than they need to because they micromanage or hire poorly and pick up the slack, he says.

Thomas Hansen , president of software maker Amplitude, is back to windsurfing, a sport he competed in as a teenager. He lives near the ocean in California but gets out on the water only about once a month, when the waves are just right. Hobbies don’t need to be daily activities to be fulfilling, he says, especially if they require training regimens.

To stay in shape for windsurfing, he rises at 4:30 a.m., seven days a week, for an hour of exercise. Hansen, 54, also guards his Saturdays and Sundays like the crown jewels of Denmark, his native country, limiting himself to two working weekends a year. Things that feel urgent can almost always wait till Monday, he contends.

‘Like a badass’

When Christine Yen isn’t calling the shots at work, she’s circling a racetrack at 80 mph on her Honda CB300F motorcycle. The co-founder and CEO of Honeycomb, which helps engineers diagnose problems in their software, took up racing a few years ago.

Prepandemic, her motorcycle was strictly for commuting in San Francisco—and making an impression. She loved pulling up to investor meetings in her hornet-yellow helmet and leather riding suit.

“It fits me like a glove, and it makes me feel like a badass,” says Yen, 36.

The keys to spending full days at the track are planning and being willing to work at odd hours, Yen discovered. Her favorite track publishes racing schedules in 10-week batches. As soon as a slate is released, she circles the dates when she expects her workload will be lightest, aiming to participate in roughly half of the events.

“I have also been known to bring my laptop to the motel and get some work done in the evenings,” she says. “It sounds boring to say hobbies can be scheduled, but that’s how I protect my time.”

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YACHT BUYERS ARE GETTING YOUNGER, SAYS AZIMUT/BENETTI EXEC

In the rarefied world of luxury yacht construction and design, the Viareggio, Italy-based Azimut/Benetti Group ranks high on the list of storied and sought-after names. The company’s clients include multi-millionaires and billionaires globally, and boldfacers such as Bill Gates have chartered its watercrated.

The company comprises two brands: Azimut, which produces smaller yachts that range in length from 10 to 35 meters, and Benetti, a mega- and superyacht producer behind ships from 37 to more than 100 meters long. It’s known for its technological innovations, including the extensive use of carbon fiber as well as hybrid diesel-electric vessels. Prices for the yachts between both brands range from US$1 million to more than US$300 million. Azimut/Benetti has four shipyards, three in Italy and one in Brazil, with the largest in Livorno, in Italy’s Tuscany region.

Paolo Vitelli founded Azimut in 1969 and acquired Benetti in 1985 to form Azimut/Benetti Group. His daughter, Giovanna Vitelli, 48, leads the family-run enterprise today. She spoke with Penta recently about how demand for yachts has increased as of late, its changing customer base, and the amenities on ships that owners most want today.

Penta: Has the demand for your yachts changed over the last few years?

Giovanna Vitelli: Despite initial predictions, the pandemic significantly boosted the yacht industry due to unforeseen mobility restrictions. The desire for freedom led to a surge in demand, and immediately after the COVID-19 lockdowns, every available boat, regardless of size, was sold out. Today, the demand has normalized, but the perception of what a yacht can offer has changed. As a result, our orders stretch to 2028.

Who are your primary customers, and how have they evolved over time?

Owners are now trending 10 years younger than before; they are typically men in their 50s. They are still very wealthy and successful, but unlike the past, where yacht ownership may have primarily symbolized opulence, today’s owner seeks something deeper: a private space to share with family and friends, a floating home with all the personal comforts, to enjoy a closer connection with the sea.

Can you share the amenities your customers want most on their yachts and how they differ from the past?

We are seeing a growing shift toward a more relaxed lifestyle on board. Owners seek areas ideal for sharing with loved ones. They have a preference for longer stays at anchor and want amenities that provide a comfortable, at-home experience. Popular requests include large social bars, extensive wine cellars, full office spaces for remote work, spa facilities, larger storage for water toys, and gym areas. These features blend luxury with functionality.

What are some of the unusual amenities or other requests your customers have requested?

We’ve added unique features such as a wood-burning pizza oven and a flower refrigerator. We even recreated a copy of the Sistine Chapel fresco over the dining table on a Benetti yacht. Another had spectacular interiors made with Lalique glass.

Tell us about the design features of your yachts. What aesthetic do you favor?

Twenty years ago, we began seeking designers from the luxury residential, hospitality, and fashion sectors rather than just the yachting industry. This brought a contemporary twist to a traditionally conservative sector. Each designer infuses the yacht with its own soul, but all have a simple elegance. Our most recent collaboration was with Matteo Thun and Antonio Rodriguez, inventors of eco-resorts, with whom we explored new frontiers for eco-friendly materials on Azimut’s Seadeck   motoryachts .

One design concept that has influenced the lifestyle on board is the Benetti Oasis Deck. Previously, the stern was high and closed, but now, a lowered stern opens to the sea, enhancing the onboard experience.

How does sustainability figure into your designs? 

Sustainability has been a core principle for us for over 20 years, and we started investing early on in technology to reduce fuel consumption. This philosophy continues to drive our innovations. Today, almost our entire fleet offers hybrid technology.

The newly launched Azimut  Seadeck  6 became the most efficient and sustainable yacht ever produced by our group. In fact, the Azimut  Seadeck  Series can reduce carbon-dioxide emissions by as much as 40% in one year of average use compared to traditional yachts of similar size.

Our next goal is to further optimize consumption and emissions from onboard systems, especially for larger boats that spend around 90% of their time at anchor.

Also, our company has an agreement with the energy company Eni to use HVOlution, a biofuel made entirely from renewable raw materials.

Can you explain the concept of shadow yachts and tell us if they’re becoming more prevalent?

Shadow yachts, also known as support yachts or shadow vessels, are auxiliary vessels that accompany a main superyacht, providing additional storage for water toys, helicopters, and vehicles, as well as housing extra crew and guests. Currently, they represent less than 1% of the market.

Where do you see the future of yachts going?

I expect demand to continue at a steady pace in the coming years, especially as more people view yachts as residences rather than just for short trips. We have customers who’ve bought large yachts who anchor them and live in them for several months a year. They might dock in Monaco for six months, for example, and go to the Caribbean for the rest of the year.

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BLACKSTONE’S PRIVATE-EQUITY RETURNS TRAIL THE S&P 500

The S&P 500 index has been crushing private-equity returns in the past year, and Blackstone ’s second-quarter results illustrate that trend.

As part of its earnings release early Thursday Blackstone said its corporate private-equity returns in the year ending in June were 11.3%. That compares with a 24.5% total return for the S&P 500.

In the prior year ending in June 2023, the S&P 500 topped Blackstone with a 19.4% return against 9.7% for the firm’s corporate private-equity business, which has $145 billion of assets and remains one of its most important areas along with real estate.

Blackstone is the leading alternatives firm with over $1 trillion in assets under management and has the largest market value of any public investment firm at more than $160 billion.

Driven by Nvidia , Microsoft , Apple , Amazon and other big technology stocks, the S&P 500 has handily topped most asset classes in the past several years.

Another sign of more difficult times for private equity came earlier this week from Calpers, the $503 billion California pension fund, when it reported it s preliminary returns for its fiscal year ending in June . Calpers is one of the first major endowments or pension funds to report results for the June fiscal year. undefined The pension fund, a major player in private equity, said its private-equity investments gained 10.9% net of fees—although that figure is lagged one quarter. Calpers’ public-equity investments were up 17.5% in the year ended June—its strongest asset class. Private equity remains a favorite of many pension funds and leading university endowments like those of Harvard and Yale. Their view is that private equity can beat public-market returns over the long term.

But the private-equity business has gotten tougher in recent years due to keen competition for deals, higher interest rates and a less receptive IPO market, which has made exits tougher.

And private-equity portfolios of firms like Blackstone look nothing like the S&P 500, given their investments in small to midsize companies.

Blackstone, for instance, bought a majority stake in Emerson’s climate technologies business last year and more recently purchased Tropical Smoothie, a franchiser of fast-casual cafes. It also holds a stake in Bumble, the publicly traded online dating site, and it’s an investor in actress Reese Witherspoon’s media company, Hello Sunshine. Blackstone’s corporate private-equity business runs $145 billion and has 82 investments, according to the firm’s website.

Blackstone’s private-equity business has strong long-term returns including a gain of over 50% in the year ended in June 2021 when it handily topped the S&P 500 index.

But the S&P 500 index has become difficult to beat more recently and it’s dominated by some of the best companies in the world. It carries less risk than private equity, given the cash-rich balance sheets of its leading companies like Apple , Microsoft and Alphabet .

Private-equity firms, by contrast, often use considerable leverage to boost returns. Investors can get exposure to the S&P 500 through index funds that charge 0.1% or less in annual fees and with immediate liquidity.

A key risk with the S&P 500 is its vulnerability to a selloff in the leading tech firms that now make up over 40% of the index. The recent rotation into smaller companies illustrates that.

Blackstone shares gained 1.1% to $136.31 Thursday in the wake of its earnings news as investors focused on rising investment deployments and positive management comments on the firm’s outlook.

The firm’s nearly $40 billion of inflows and $34 billion of capital deployment during the second quarter marked “the highest level of investment activity in two years,” Chief Executive Officer Stephen Schwarzman said in a statement.

Citi analyst Christopher Allen wrote in a note to clients on Thursday that while Blackstone’s overall performance was mixed, the outlook appears to be improving given fund-raising and deployment trends.

Investors also were heartened by Blackstone President Jon Gray’s comments about a bottoming in commercial real estate and strong capital deployment in that area.

But ultimately, the game for Blackstone and its alternatives peers is about performance—particularly beating low-fee public investments like the S&P 500. That seems to be getting more difficult.

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Burberry Stock Sinks. Is the Problem Its CEO or the Luxury Consumer?

Burberry had a nightmarish start to the week on Monday after the luxury clothing brand warned of a slump in its profits and replaced its CEO.

The UK-based company’s American depositary receipts were down 16.9% to $9.79 shortly after the opening bell, while its London-listed shares slid 16.8% to 737 pence to their lowest level since 2010.

It’s hard to tell what part of a dire trading update that Burberry published on Monday sparked the selloff, with the company flagging weaknesses in the luxury sector and announced a leadership shake-up.

The fashion giant said in a statement that called its performance for the fiscal year “disappointing” and warned that the luxury market “is proving more challenging than expected”. It’s set to post its earnings for the quarter that ended on June 30 on Friday.

Burberry also announced a change at the top, with former Michael Kors boss Joshua Schulman set to replace outgoing CEO Jonathan Akeroyd, and suspended dividend payments.

“We are taking decisive action to rebalance our offer to be more familiar to Burberry’s core customers whilst delivering relevant newness,” Chair Gerry Murphy said in a statement. “We expect the actions we are taking, including cost savings, to start to deliver an improvement in our second half and to strengthen our competitive position and underpin long-term growth.”

Signs of weak consumer demand have weighed on luxury brands this year, with the slowdown particularly evident in China, which has struggled to reboot its economy ever since calling time on three years of harsh zero-Covid lockdowns at the end of 2022.

Akeroyd had also tried to take Burberry upmarket in a strategy that alienated some would-be shoppers. Fashion blog Miss Tweed reported earlier this year that Murphy had started interviewing potential replacements.

The luxury giant’s rivals French-listed peers also fell after the disappointing trading update. LVMH slipped 2.7%, while Hermès dropped 2.4% and Dior fell 1.7%.