Morning Brew Daily - The $6B Eclipse Economic Boom & Is the Internet Too Small for AI?

Episode Date: April 8, 2024

Episode 296: Neal and Toby prepare for the biggest event under the Sun. Well, it actually IS the Sun. The solar eclipse is estimated to bring in billions of dollars into the economy. Then, a recap of the March jobs report that shows signs that the labor market is strong and healthy. Also, the rapid advancement of AI is possibly going too fast for its own good as internet data is becoming dried up. Next, the weekend’s biggest winners. Meanwhile, 24-hr restaurants are closing up their doors. Lastly, what to know ahead of this week to get your Monday started in the right direction. 00:00 - Intro 2:45 - Solar eclipse economy boom 7:15 - Jobs are growing! Again 11:00 - The internet is too small 14:30 - Weekend winners 19:30 - 24-hr restaurants are closing 22:00 - The week ahead Get your Morning Brew Daily Merch HERE: https://shop.morningbrew.com/products/morning-brew-daily-sweatshirt?utm_medium=multimedia&utm_source=podcast&utm_campaign=mbd&utm_content=shownotes Listen to Morning Brew Daily Here: https://link.chtbl.com/MBD Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow Learn more about your ad choices. Visit megaphone.fm/adchoices

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Good morning brew daily show. I'm Neil Fryman. And I'm Toby Howell. Today, how the eclipse is driving a spending boom that even tops the Ares Store. Then the March Jobs Report came in strong as ever, but is it going to throw off the Fed's rate cut plans? It's Monday, April 8th. Let's ride.

Neil, you had a fun little weekend attending and competing in the American Crossword Puzzled tournament in Stanford, Connecticut. This is a legendary event hosted by New York Times Crossword Editor Will Shorts that brings together the best puzzlers in the world and you. Some of you might know it from the 2006 documentary called Wordplay. Give us the lowdown. How did you do? How hard were the puzzles?

What was the vibe? Well, I finished 712th place out of 749 people, so I didn't do so hot. But I was pretty happy with my performance. The puzzles themselves were not so hard, but it's all about how fast you can do them. And I was just fill out like four to five clues and other people would already have their hands raised that they finished. So I didn't do so well. But it was a confidence booster. Also just a great time, the friendliest people you've ever met in this hotel in Stanford.

Kind of the crem to the crem of the puzzle community, too. You met the creator of the editors of connections of Spelling Bee. A lot of the top, top puzzles in the world were they, was it fun to meet them as well? Oh, yeah, they were super nice. It was the craziest part was you would just go into a massive ballroom with 800 other people and you'd sit down and basically do a test or a quiz like the S. It reminded me of just taking a standardized test. It was deathly silent in the room,

and everyone was just working on their puzzles with their pencils. But for any puzzle fans, we're going next year. I'm bringing the huge crew. Toby, you're coming with me. Prep starts now. Top 500 next year, for sure. Now let's hear a word from our friends over at Robin Hood. It's Monday.

It's a new week. Neither of us have lost any money yet. I'm feeling good. Speak for yourself. Unlike last month, now I'm on a heater on the market, Toby. I just do the opposite of what you do. As long as you're doing it on Robin Hood, then fine, fade me all you like. But one of these days, I'm going to turn around.

Long-term thinking. I like it. Short-term, long-term, it doesn't matter. Robin Hood is a free app that lets you invest in stocks, set up a retirement account without a traditional employer, and more. Plus, not to kill the good vibes, but tax day is one week away from today. So you can bet we'll be talking about how to set up a Robin Hood retirement account in the future. Learn more about the free Robin Hood app in the App Store or Google Play Store,

Disclosures investing involves risk. Robin Hood Financial LLC member SIPC. Choice Hotels gets you more of what you value. Comfort in, it's calling your name. Save on the stay. Oh, and free waffles are yours to claim. Book direct at SoysvilleTales.com. Today is not going to be like any other day, and that is because there's a freaking eclipse in a few hours. This afternoon, a total solar eclipse will be visible across North America, and you better enjoy it because it's the last one we're going to get here until 2044. Seems like people have realized this is a once-in-a-lifetime event because they're spending gobs of money. The eclipse is

expected to generate up to $6 billion for the U.S. economy, more than the entire Ares tour, and much greater than the impact of a single Super Bowl. And remember, this $6 billion is for something that takes about four minutes to happen. Talk about high-margin business. And it's all about the path of totality in this 115 mile-wide cross-section of the U.S., which stretches from Texas to Maine. You get to see the moon completely black out the sun turning day into night. Today is expected to be the busiest travel day of the year as 4 million Americans road trip to the nearest city that will experience totality. And if you're listening to this and thinking of yoloing into totality, the biggest cities along the route

include Austin, Dallas, Indianapolis, Cleveland, Rochester, Syracuse, and Burlington, Vermont. Toby, first of all, happy eclipse day. Thank you so much. You got me hyped for it. This is such an interesting event because it doesn't affect cities the same way because you have these massive megacities like the Dallas's of the world, but then you also have the small Burlington, Vermont's of the world. They're all dealing with this huge influx of people. So it's so interesting to see the different economies that spring up around it. I've been keeping an eye on what major national brands are doing as well. You got Krispy Kreme who is selling this eclipse donuts, got little salt flakes on an Oreo on top. The ones that I think are very funny, though,

is that some companies like Blue Moon or Moon pies, they have Moon in the name. Of course, they're going to do some moon-eclipsing thing. But then other brands just have Circle Foods. So Pizza Hut, for instance, is doing a $12 pizza deal called the Total Eclipse of the Hut. Burger King, just because their burgers around are doing a burger deal. Cracker barrels giving away free pancakes. So it didn't just stop at moon-themed stuff. It also just went to circular theme foods in general. Oh, sure.

I mean, every company wants to get in on this eclipse. It's huge. Delta, I thought was interesting. Offered a flight from Texas to Detroit that tracks the path of totality. The first one sold out in 24 hours, so they added a new one. It's on a plane that has extra large windows so people can see it better because I'm wondering, What if you're in the aisle seat? I don't know how that works.

Maybe they didn't sell any aisle or middle seats, and they just did the window seat. But you can just kind of tell the consumer appetite for this collective event. We don't get many of these. The last one was in 2017, but the path of totality didn't encompass the amount of population that this is going to be the most viewed eclipse in history.

31.5 million people already live in the path of totality and many millions more live maybe an hour or two-hour drive. We live here in New York City. about a four-hour drive from the nearest city that will experience totality, Syracuse. So this is just a mega event that's driving a little mini spending boom in the United States. Yeah, absolutely a mega spending boom as well, because some of these eclipse events that are popping up, people are getting their bag from it. Bill Nye is hosting the Eclipseorama in Fredericksburg, Texas. Those tickets are clocking it at $325 per ticket.

There's a NASA-sponsored one in Indianapolis. That's a little more, little cheaper, $20 per ticket. but it just goes to show you that all sorts of industry, all sorts of people are capitalizing on this event. Scientists are also very hype because, again, we keep saying it's once in a lifetime. It is once in a lifetime, so they're using this to run a lot of experience.

I have to drop my fun fact, too, is that helium was discovered during an 1868 eclipse. French astronomers looking through a spectroscope at the flames that appear around the moon, and the waves that it was emitting didn't line up with any known element, and boom, we discovered helium. So who knows what's in store for this year's event. And for any pet owners, definitely observe what your animals are doing a lot of zoologists

are going to be looking at the behavior of animals. Back in the 2017 eclipse, the turtles at the zoo in Fort Worth just started mating. So who knows what's going to happen when, and the guerrillas went to go, did their nighttime routine because they thought it was night. So some bizarre stuff is going to happen. Keep an eye on your box turtles, folks. The March jobs report dropped just before the weekend, and it was very good. The U.S. added 303,000 jobs for the month, well above the 200,000 that were expected and higher than the revised 270,000 gain in February.

Now, this isn't necessarily a surprise at this point. The economy is on a South Carolina women's basketball run of jobs gains that stretches back 39 consecutive months. But is the labor market running too hot? the central bank has been carefully eyeing the economy to decide when it's going to cut rates, and as it also tries to bring down inflation closer to its target of 2%. So any jobs report that comes in too strong could mean higher rates for longer. But what has economists and central bankers alike excited is that March's report threads the needle between expanding the labor force with only moderate wage growth.

Average hourly earnings in March were up 4.1% over the last year, down from the 4.3 annual growth we saw in February, which isn't so high that it could signal prices will go spiraling upwards again. Neil, digging into this report, what stood out to you? What stood out to me is there is a huge growth in the labor force, and that's the reason why we're not seeing huge wage gains that are leading to potentially higher inflation. 469,000 more Americans were working or looking for work last month, and that is a huge boon to the economy. it means that the labor force is growing. It's not just becoming tighter in a way that could push up inflation.

It's just growing. And a lot of people attribute that to immigration. During the pandemic, we locked our borders down, and there was not a lot of immigration. And that did constrain the labor supply. That's why every store you visited said, looking for work to do. Can we find anybody to help work for us? And now that immigration is coming back. It's growing the entire labor market.

It's growing the entire economy. and that has been just a crucial part of this. It's a part of this entire story of the strong labor market here in the United States. Right. The unemployment rate also dipped to 3.8, down from 3.9% last month. It's remained below 4% for the 26 straight months, which is always a good thing.

Industry-wise, it was the usual suspects. Healthcare led gains with 72,000 jobs, added government 71,000. Leisure and hospitality also brought in 49,000. And construction brought in 39,000. So it's kind of those industries that have been posting those looking for help that you see at the coffee shops, at the restaurants, at the construction industry. So it's the usual suspects when it comes to the industries. Yeah, it's really just two, which is crazy. Healthcare and hospitality over the last year, they've accounted for 1.5 million of the 2.9 million jobs the U.S. has gained. So they are, just these two industries account for more than half of the job growth. And we'll see whether that can continue. They're not sure about leisure. and hospitality, whether we've kind of peaked there. But health care is an industry that has seen

immense job growth, and it will only continue to see it as the U.S. population ages, and we need more people to care for the boomers. Right. Looking ahead a little bit, central bank policymakers have kind of penciled in three rate cuts for 2024, the first one we're expecting in the summer months, which is around the same thing that they've been saying since December. But you never know, because, again, if we keep seeing the economy running as well as it is right now, why feel the need to cut rate? So there is a little bit of uncertainty, but still, maybe it's not, it's lighter pencil these days, but three are still penciled.

Yeah, there were a bunch of Fed speakers last week that were like, honestly, are you looking with what's happening? There's really nothing wrong. Why would we put our foot on this scale at all? We might as well just let it go, wait and see. And that's definitely the vibe among the Fed nowadays. Okay, in 1974, Shell Silverstein found where the sidewalk ends. In 2024, tech companies found where the internet ends.

In their frantic hunt for data to train powerful AI systems, tech giants like OpenAI have harvested almost every last bit of web content available, and they warn that high-quality data, like news articles, scientific papers, and Wikipedia articles could completely run out in the next two years. In other words, they've outgrown the internet. To avoid what would be a huge drag on their growth plans, tech firms are getting creative in finding new sources of data for AI training, but these methods can fall into a legal gray area.

According to a report by the New York Times, OpenAI allegedly developed a tool that transcribes audio from YouTube videos, opening up a vast new trove of data that also probably violates the copyright of those videos creators. Surely, YouTube owner Google would raise a stink about that, right? Well, we haven't heard a peep because Google, is also transcribing YouTube videos to Fian its own AI models, and it wants to keep that on the down low. And that tells you all you need to know about how crazy this AI arms race has gotten. Toby, this is a huge problem.

AI models are hungry for data, but there's no good data left to harvest. The internet is simply getting smaller, which is just a wild concept to think about it. It's very funny to me because over the last few decades, we've heard the phrase that data is the new oil. And none of us really knew what it meant because data is such an esoteric thing. It can mean so much and so little. but now here we are in the age of AI, and data truly is almost a physical resource like oil that powers these AI algorithms

in order for them to function and to improve. So every last scrap of text and videos now being refined into oil to power these machines. It is oil now if you actually think about it. Yeah, I mean, the more you get, the better these chatbots are. So you just need to accrue as much data. And by data, we mean literally news articles,

social media posts, scientific articles, Wikipedia articles, not just data in this zero and one sense, but it's actually content. And that's what you have to feed into chat GPT and these other chat bots are large language models that helps them train and get better. So if you've scraped every piece of data that's possible, then you need to find more. What's crazy is a few of these methods, creative methods that they're thinking about. OpenAI, Sam Altman has talked about synthetic information in which AI creates content that is used to train AI. So you have this closed a loop going on because they're just not enough organic human

made material left. It's insane too what other companies have been considering doing. Meta considered buying the publishing house Simon & Schuster just to get access to its treasure trove of high quality data. Another thing meta considered doing was just training its models on copyrighted and just deciding to eat the legal cost of it. They ended up probably not doing that, but it just goes to show you how desperate they are. Google also broaden its terms of service. They want to allow themselves to be able to tap publicly available Google Docs, restaurant reviews on Google Maps and other online materials. We were talking before the show. Our Google Docs are probably a goldmine for data because there's a lot of high quality info in these, but it is insane the lengths that these companies

are willing to go to just to get their hands on some of this high quality data. Up next, one man just ran the entire length of Africa and why it's hard to get a late night. bite these days. Study and play. Come together on a Windows 11 PC. And for a limited time, college students get the best of both worlds.

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ends June 30th, turns at AKA.m. Welcome to our winners of the weekend segment where we look at two stories that had a better weekend than a kid whose parents snuck them some candy at summer camp. Neil, you won our pre-show game of 70s karaoke, stunning rendition of staying alive, I might add. You're up first. Who do you got? My winner is the University of South Carolina women's basketball team because they won all 38 games they played this season, including yesterday's national championship against Iowa. The undefeated Gamecocks are the newest dynasty in the sport, capturing their third national title in seven tournaments and second in three seasons. The game also meant the end of the college road for Iowa's Caitlin Clark, who perhaps more than anyone else, has raised the profile of women's college basketball to become a juggernaut media property. Clark heads to the NBA after setting the all-time NCAA scoring record and playing for sold-out arenas across the country.

Now all eyes are on that TV ratings number for the championship game. This women's college basketball tournament has shattered viewing records. Iowa's final four matchup against Yukon was ESPN's most watch basketball game ever. Pro or collegiate women or men. And yesterday's was likely even higher than that. Right. I mean, we just look at the numbers from last year, 2023, the LSU Iowa championship game.

That had 9.9 million viewers. The IAS, the second time that they played in the Elite 8, this year shattered it. We're talking over 14 million viewers. This could be gigantic too because I think it was it was during a Sunday, didn't have much competition. It started at 3 p.m. Are you, I'm going to say setting it over underline at 16 million viewers. Are you taking the over? I'm saying 16.3. That's my guess. That's a solid thing. Also, if we're just going to talk about South Carolina for a second, they are a young team as well. It's pretty amazing too. They went 37 and 0 and they didn't return any of their players from.

the previous time that they made the finals. This time, they're returning a lot of players. So we're in for a long, long era of juggernautness from the South Carolina Gamecock. And there's a lot of stars of college basketball leaving, obviously, Caitlin Clark and Angel Reese from LSU going to that WMBA. But you got JuJu Watkins on USC, who is another star in the making. So it looks like college basketball is just going to keep up the momentum going into next

season just reloading on new star players. And we're just in a new paradigm where this sport has ballooned. And we'll see how it compares to the men's championship game tonight. It's going to be after 9 o'clock. So I think it's very favorable that it's possible that the women's game is more watch more, there's more viewers for it than the men's game. But we'll see because Yukon versus Purdue is kind of a heavyweight matchup. Yeah, absolutely.

My winner of the weekend is a 27-year-old from West Sussex, England, named Russ Cook. but most people know him by his moniker, the hardest geyser. What makes him worthy of such a nickname? Well, he just became the first person ever to run the entire length of Africa. 352 days, more than 10,000 miles in 16 countries later. Cook finally competed this journey on Sunday from the southernmost point in South Africa to the northernmost port in Tunisia, raising over 700,000 pounds for charity in the process.

This guy, this geyser, has captured the fascination of people from a row of. around the world. He said he chose to do it because he struggled with mental health, gambling, and drinking in the past, and wanted to look back at his life and have no regrets. And when he finally finished, he said he only wanted one thing, a strawberry, daquery. It's an unfathomable amount of miles, Neil, 385 marathons. This dude really is the hardest geyser. Yeah. So if, did I get that right? 385 marathons and 352 days. So he ran more than a marathon per day. He was, I didn't know that was possible. It's possible. The hardest geyser just, I do want to go through kind of his journey because it was a journey. Of course, whenever you're

running the entire length of a continent, you're going to run into some setsbacks. On day 64, he hit his first setback and armed robbery. He and his support team had their cameras, their phones, their cash, passport, visas stolen in Angola. They received a police escort for the rest of their time. He also had some serious food poisoning and illness issues. He was forced to take a rest day after doctors found blood and protein in his urine on day 45. He said, still had a lot of days to go. On day 205 and 26, he missed consecutive days, I think for the first time because he had some back issues. But this just goes to show you what kind of person he is. This is a quote from him after that medical attention. He said, I took a couple of days to get some scans.

No bone damage. So figure the only option left was to stop mincing about like a little weasel, get the strongest painkillers available, and start zombie stomping the road again. So the dude is the hardest geezer. He's absolutely the hardest geyser. It's insane. And yeah, he finished through the Sahara as well. It's not on my bucket list. I'm going to say it now. I'm not running the entire length of Africa. If you were looking for a reason to join the early bird crew along with the Morning

Brew Daily team, look no further than the lack of late night eats these days. If you tend to get the munchies after midnight, you might be out of luck because the amount of late night and 24-hour dining options is falling. The number of 24-hour service restaurants has fallen 18% from 2020 to 2024, according to data from Yelp. New York City, the city that never sleeps, has lost 13% of its 24-hour establishments. L.A. is even worse, losing 35% of its all-day eats. And it's not just restaurants either. The pandemic initially caused a lot of places to reduce hours, and they haven't really come back. Walmart still hasn't gone back to being open all night. Coffee shops, supermarkets,

and pharmacies are following a similar trend. And heck, even some 24-hour fitness gyms aren't 24 hours anymore. Neil, what is going on here? Why the big shift away from late night? Seems like there's a few factors going on. One of them is increased costs inflation. Food costs have increased 25% since March 2020. Labor costs are also up 29% over the last 40 years. So why are you going to keep your restaurant open in probably the times where you're going to get the least amount of sales and pay all these added costs? So I think that is a big factor where owners are just saying, yeah, it's not worth it. Let's close up. and open back up at 6 a.m.

Another thing has to do with just our changing behaviors, right? Like, we're not going out as much. People are drinking less. And 24-hour food diners have the symbiotic relationship with bars and clubs. And people just aren't going to be hungry at 3 or 4 a.m. Or even out awake if they aren't going out. So I think it's a couple of things. Societal shifts and also labor costs are just so high.

Right. You mentioned the symbiotic relationship. And one thing that caused during COVID for a lot of these places start shutting down is that things like concert and sports events, those two things also are big contributors to people being out late-lade in wanting to frequent these late-night establishments. So it is interesting to see how the whole late-night economy is interconnected. One place that is rebounding a little bit, though, are breakfast establishments. Half of IHOP's 18100 locations are bringing back 24-hour schedule. 75% of Denny's restaurants are open 24.

hours again. And remember, let's not forget the goat. Pretty much all of Waffle House's nearly 2,000 restaurants run 24 hours again. So Waffle House is still very much carrying that late night torch because thank you for that Waffle House because we need that in our country. Yes. All right. Let's preview the week ahead. Wall Street is preparing for a crammed week with inflation data dropping on Wednesday and big banks like J.P. Morgan, Wells Fargo, and Citigroup kicking off earnings season on Friday. The pressure is on companies to post meaty profits to back up their strong stock performance in Q1. The SMP is up 9.1% for the year and trading near all-time highs. Yeah, big banks have been doing very, very well recently. I'm also

interested to see what it reveals about consumer spending habits if they're going to keep swiping on their credit card. So we get a look at how banks are doing, but also it does provide a look look into how consumers are spending as well. Yeah, and that inflation report will also be big. And one thing to look up there is energy prices because oil prices are now at their highest level. in five months. We'll see if that leads to another doubt of inflation, which is not what the Fed wants to see, obviously. It is Masters Week, aka the best week of the year by far. The tradition, unlike any other, tees off in Augusta,

Georgia on Thursday with Tiger Woods back in the mix. Also back in the mix, live golfers who are sharing a course with PGA tour players for the first time since last July. Well, there's been lots of talk of a deal to bring the rival leagues together. Nothing has materialized yet. John Rom, who defected to live in December 2023, will try to defend his title, but it won't be easy. I'm just going to get right into it.

I know everybody's on their edge of their seats right now listening to what is Toby's master prediction and everyone jump rolls, please. I think this year, Cory Connors is going to win, which he's a Canadian smooth ball striker. It's just his year to break through. If that's a little too niche for the greater golf audience out there, my second pick, Hadeki Matsuyama,

I think he's got what it takes to become a multi-time master's winner. All right. So everyone heard it. Fade, if you want to do the Toby Fade, then do not bet on Matsuyama or Kevin Connors. Corey Conners. Cory Conners.

Sorry, yeah, no one knows who he is. Okay, Coachella kicks off music festival season in the California desert this weekend. It's being headlined this year by Lana Del Rey Doja Cat, no doubt, and Tyler,

the creator. And if you're like, eh, doesn't get my heart rate going. You are not alone. Demand for Coachella tickets appears to be down this year, while the country, music festival stage coach, which is held on the same grounds in a few weeks. Seeing booming interest, sign of the times, I guess.

Right, absolutely. My girlfriend is going to Coachella, so we'll be able to get some on the ground reporting. Part of me thinks that a less popular Coachella will be a more fun Coachella, though, because if it's too crowded, then it's just not as fun. So maybe if those crowds simmer down a little bit, it could be the best event ever. All right, well, I'm excited to hear about those reports. Let's wrap it up there for this Monday. If you're listening to this in the car on your way to the path of totality, we are incredibly jealous.

And wherever you are, hope you're able to step outside this afternoon and see the once-in-a-lifetime event. For any feedback you have on MBD or just want to drop a line and say hi, you can write to our email address, Morning Brew Daily at Morningbrew.com. Let's roll the credits. Emily Milliron is our executive producer. Raymond Lou is our producer. Olivia Graham is our associate producer. Yuchinawa Ogu is our technical director. Billy Minino is on audio.

hair and makeup is stuck in eclipse traffic on the way to Syracuse. Devin Emery is our chief content officer and our show is a production of Morning Brew. Great show today, Neil. Let's run it back tomorrow. Yamava Resort and Casino at San Manuel is California's number one entertainment destination for today's superstars. Catch the Jonas Brothers return to the Yamava Theater stage on April 30th, the powerful vocals of Demi Lovato on May 17th, and the signature Southern Country Rock of Eric Church on July 19th. Tickets on sale now at Yamava Theater.

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