Slack, the extensively used office chat tool, has recently incorporated AI to enhance its functionality. This move has raised concerns about the potential negative impact on the future of office work. Slack's role as a multifaceted tool for remote work has come to the forefront during the pandemic, serving as a digital office water cooler, project planning tool, and a platform for direct conversations. Some argue that it can be as much of a distraction as it is advantageous.
The introduction of AI tools by Slack, now available to paying enterprise users, is designed to address the issue of information overload. The AI can analyze previous conversations in Slack, providing quick summaries while noting the contributors. This feature alleviates the burden of catching up on discussions that occurred during one's absence or sifting through lengthy threads. Furthermore, the AI can answer questions related to ongoing projects and includes a feedback mechanism for users to assess the accuracy of the summaries, enabling improvements to the AI model.
Additionally, Slack is working on integrating its AI technology, including the Einstein chatbot, more deeply into chat interactions. However, the potential consequences of storing extensive work-related discussions in a platform like Slack are noteworthy. The collective chat history of employees is tantamount to reflecting the company's activities, decisions, and practices. While Slack assures that each company's data remains segregated and is not utilized for training the AI, concerns about data privacy and potential misuse of information persist.
The introduction of AI summarizing innovation in Slack raises concerns about personal privacy and the potential for management to have greater control over employee conversations. There are reports of a third-party AI system being used to summarize Slack chats to assess employee sentiment and identify potential risks, igniting controversy akin to a manager eavesdropping on a traditional office meeting. This development could lead to unprecedented levels of monitoring and intrusion into employee conversations and possibly stifle constructive criticism and challenging discussions within the organization.
Overall, while the AI integration in Slack holds promise for enhancing productivity and information management, it also poses significant ethical and privacy considerations that businesses and employees must carefully address.
Americans pulled back their spending more than expected in January after the traditional holiday season splurge.
Retail sales fell 0.8% in January from the strong pace in December when they rose a revised 0.4%, according to the Commerce Department’s report on Thursday. Excluding sales at auto dealerships and gas stations, sales were down 0.5% for the month. The decline was bigger than the 0.10% drop that economists projected and marked the lowest monthly figure since March of last year.
Economists attributed part of the pullback to snowy weather conditions, but they also said the slowdown shows that shoppers may finally be buckling under higher interest rates and other financial hurdles and that the economic momentum from the end of 2023 could be starting to fade. Consumers account for roughly two-thirds of economic activity.
Excluding sales of autos, gas, building materials, and restaurant meals, the so-called control group of sales — used to calculate economic growth —fell 0.4% in January. Economists expected an increase.
The retail sales report could offer positive news that the Federal Reserve could finally start to cut rates, bringing relief to shoppers and businesses seeking lower rates for borrowing.
“Real consumption appears to have declined in January and, even allowing for a recovery over February and March, growth will slow sharply in the first quarter,” wrote Andrew Hunter, deputy chief U.S. economist at Capital Economics, in a report. “The upshot is that Fed officials may not need to worry much longer about the possibility of continued economic resilience reigniting inflation.”
Despite higher borrowing costs and elevated prices, household spending continues to be fueled by a strong jobs market and rising wages.
There was another surprising burst of hiring to start off 2024 as employers added 353,000 jobs in January, more evidence that the highest interest rates in two decades, intended to slow the economy, have yet to take hold.
But last month’s slowdown was widespread as shoppers cut back their spending in nine of 13 categories including clothing and accessory stores. Sales at building materials and garden suppliers fell a steep 4.1%, reflecting bad weather. Online sales fell 0.8%. But a solid gain at restaurants showed that spending at services remains sturdy, analysts said.
Consumer inflation in the United States cooled last month yet remained high, and the U.S. reported this week that the consumer price index rose 0.3% from December to January. Compared with a year ago, prices are up 3.1%.
That’s far below the 9.1% inflation peak in mid-2022, but solidly above the Federal Reserve’s 2% target level at a time when public frustration with inflation has become a pivotal issue in President Joe Biden’s bid for re-election.
Starting next week, major retailers including Walmart and Macy’s are slated to report fiscal fourth-quarter results, which includes the holiday period.
But weaker sales at some of the big food and beverage companies could forebode a slowdown in spending at stores.
Kraft Heinz reported on Tuesday that fourth-quarter sales slipped as some customers, pinched by a bout of inflation, traded down to cheaper brands or did not buy as much.
Several food makers, citing inflation, have raised product prices and that has helped preserve profits. But that can come at a cost to sales as some customers look for bargains elsewhere.
Last week PepsiCo, which makes snacks and drinks, experienced a similar trade-off after multiple price hikes, and it posted a rare decline in revenue.
Bill Barton, CEO of Bob’s Discount Furniture, noted the chain of more than 170 stores has been the beneficiary of shoppers trading down from department stores to less expensive options. The starting price for bedroom sets at Bob’s is $999. Barton noted that the Manchester, Connecticut-based company can keep costs down by offering fewer choices than department stores but going deep in inventory.
But Barton said shoppers are still cautious about spending on big-ticket items because of higher borrowing costs. And the still-high mortgage rates for homes have also dampened furniture sales.
“The impact of rates coming down would definitely improve furniture sales,” he said. ”It would certainly be good for the furniture category to take some pressure off the consumer in multiple ways.”
One big bright spot has been the beauty sector, helped by post-pandemic splurges by shoppers looking to indulge themselves in self-care and grooming products.
E.L.F. Beauty raised its annual profit and sales outlook last week after the beauty company reported strong sales in the latest quarter that included the holiday season.
“We’ve long been bullish on beauty,” CEO Tarang P. Amin told The Associated Press. “It’s one of these great categories, where particularly with all the pent-up demand from the pandemic, people really expressed themselves.”
The government’s monthly retail sales report offers only a partial look at consumer spending; it doesn’t include many services, including health care, travel, and hotel lodging.
Just last week, Google had some major news, rebranding Google Bard to Gemini, unveiling a Gemini app, known as Gemini Advanced, and revealing a new premium AI plan. Continuing its hot streak of news, Google has announced yet another AI development -- a new AI model.
On Thursday, Google unveiled its next-generation model, Gemini 1.5. Even though Gemini 1.0 just launched in December, the new model boasts massive upgrades from its predecessor, including a longer context window, better understanding, and an overall enhanced performance.
The model is so advanced that Google CEO Sundar Pichai said that 1.5 Pro, the first Gemini 1.5 model that Google is releasing for early testing, achieves comparable quality to 1.0 Ultra, the company's most advanced large language model (LLM), which was announced last week while using less compute.
"Longer context windows show us the promise of what is possible," Pichai added. "They will enable entirely new capabilities and help developers build much more useful models and applications."
To achieve this enhanced performance, Gemini 1.5 has been built on a new version of Mixture-of-Experts (MoE) architecture, which allows the model to learn and selectively activate the most relevant pathways in its neural network, increasing efficiency, according to the press release.
Google claims that Gemini 1.5 Pro can run up to one million tokens in production, a massive increase from the original 32,00 tokens for Gemini 1.0. This rise is noteworthy because the model context window, the amount of information it can take in, is made up of tokens. Therefore, the more tokens a model can take in, the more likely its responses are to be better and more informed.
Google says 1.5 Pro can process vast amounts of information in one sitting, "including up to 1 hour of video, 11 hours of audio, and codebases with over 30,000 lines of code or over 700,000 words."
In a demo, Google provided 1.5 Pro with a 44-minute silent Buster Keaton movie, which the model could quickly process and then answer all sorts of questions, including multimodal queries, as seen in the video below.
The model also performed impressively against benchmarks. It outperformed 1.0 Pro in 87% of the benchmarks Google uses to develop its LLMs. Gemini 1.5 Pro also performed stellarly in the Needle In A Haystack (NIAH) evaluation and Machine Translation from One Book (MTOB) benchmarks, which test the model's acuity and learning abilities.
To reassure users about the safety of Gemini 1.5 Pro, Google says that it has conducted extensive evaluations to ensure the safe and responsible deployment of this advanced model.
Google is releasing 1.5 Pro with a one million token context window in a limited preview to developers and enterprise customers, via AI Studio and Vertex AI, at no cost. Once the model is ready for wider release, Google plans to introduce 1.5 Pro with pricing tiers that start at the standard 128,000 token context window and that go up to one million tokens.
As some of the world’s biggest economies stumble into recession, the United States keeps chugging along.
Both Japan and the United Kingdom said Thursday their economies likely weakened during the final three months of 2023. For each, it would be the second straight quarter that’s happened, which fits one lay definition for a recession.
Yet in the United States, the economy motored ahead in last year’s fourth quarter for a sixth straight quarter of growth. It’s blown past many predictions coming into last year that a recession seemed inevitable because of high-interest rates meant to slow the economy and inflation.
Give much of the credit to U.S. households, who have continued to spend at a solid rate despite many challenges. Their spending makes up the majority of the U.S. economy. Government stimulus helped households weather the initial stages of the pandemic and a jump in inflation, and now pay raises are helping them catch up to high prices for the goods and services they need.
On Thursday, a report showed that fewer U.S. workers filed for unemployment benefits last week. It’s the latest signal of a remarkably solid job market, even though a litany of layoff announcements have grabbed attention recently. Continued strength there should help prop up the economy.
Of course, risks still loom, and economists say a recession can’t be ruled out. Inflation could reaccelerate. Worries about heavy borrowing by the U.S. government could upset financial markets, ultimately making loans to buy cars and other things more expensive. Growing losses tied to commercial real estate could mean big pain for the financial system.
But, for now, the outlook continues to appear better for the United States than many other big economies. The mood on Wall Street is so positive that the main measure of the U.S. stock market, the S&P 500 index, topped the 5,000 level last week for the first time.
“First and foremost, it’s important to emphasize that the market’s performance is more a reflection of a thriving economy rather than unwarranted ‘animal spirits’ from investors,” according to Solita Marcelli, chief investment officer, Americas, at UBS Global Wealth Management.
When it upgraded its forecast for global growth in 2024 a couple weeks ago, the International Monetary Fund cited greater-than-expected resilience in the U.S. economy as a major reason.
Several unique characteristics of the U.S. economy have sheltered it from recessionary storms, analysts say. The U.S. government provided about $5 trillion in pandemic aid in 2020-2021, far more than overseas counterparts, which left most households in much better financial shape and supported consumer spending well into 2023.
The Biden administration has also subsidized more construction of manufacturing plants and infrastructure through additional legislation passed in 2021 and 2022 that was still having an impact last year. About one quarter of the U.S. economy’s solid 2.5% growth in 2023 was made up of government spending. Republican critics, however, charge that the extended spending contributed to higher inflation.
“We had some policies that I do think helped us a lot,” said Diane Swonk, chief economist at KPMG. “But also the structure of our economy is so much different.”
Americans have been better protected from rising rates than their U.K. counterparts, for example, because most U.S. homeowners with mortgages have long, 30-year fixed rates. As a result, the Federal Reserve’s rapid rate hikes of the past two years -- which have lifted mortgage rates from around 3% to about 6.7% -- have had little effect on many U.S. homeowners.
Yet their British counterparts carry mortgages that have to be renewed every two to five years. They’ve struggled with rapidly rising mortgage rates as the Bank of England has lifted borrowing costs to combat inflation.
Catherine Mann, a member of the Bank of England’s interest-rate setting committee, said Thursday that the U.K. economy’s slowdown should be temporary. There are already signs in business surveys that the economy is picking back up, she added.
“The data we have today is rear-view mirror,” she said on the sidelines of an economic conference in Washington. Forward-looking reports “are all looking good.” Like the Fed, the Bank of England is considering reducing its benchmark rate once it is confident inflation is under control.
Another benefit for the United States is that it experienced a surge in immigration in recent years, which has made it easier for businesses to fill jobs, and potentially expand their operations, and has led to more people earning wages -- and then spending those earnings.
Japan, by contrast, is rapidly aging and has seen its population shrink for years, as it is less open to foreign labor. A declining population can act as a powerful drag on economic growth.
In Europe, consumer sentiment is weak among consumers who are still feeling the effects of higher energy prices caused by the war in Ukraine.
Even China, whose economy is growing faster than the United States, is under heavy pressure. Its stock markets have been among the world’s worst recently due to worries about a sluggish economic recovery and troubles in the property sector.
The U.S. economy faces its own challenges. Its growth is forecast to cool this year as big hikes to interest rates by the Federal Reserve make their way fully through the system.
A report on Thursday may have given a nod to that. Sales at U.S. retailers slumped by more in January from December than economists expected.
Some pillars of support for consumer spending may be weakening. Student loan repayments have resumed, consumers have largely spent their pandemic stimulus money, and credit card balances are high.
Perhaps most frustrating is the fact that prices for things at the market are still much higher than they were before the pandemic. Lower inflation means prices are rising less quickly from here, not that they’re falling back to where they used to be.
Coping with inflation remains U.S. consumers’ top concern, except for those making more than $150,000, according to a recent survey by Morgan Stanley.
When McDonald’s CEO Chris Kempczinski discussed his company’s latest quarterly results, he said he’s not seeing much change in behavior among middle- and upper-income customers. But “where you see the pressure with the US consumer is that low-income consumer, so call it $45,000 and under. That consumer is pressured.”