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Pay and benefits for America’s workers grew in the final three months of last year at the slowest pace in two and a half years, a trend that could affect the Federal Reserve's decision about when to begin cutting interest rates, the Associated Press reported. Compensation as measured by the government's Employment Cost Index rose 0.9% in the October-December quarter, down from a 1.1% increase in the previous quarter, the Labor Department said Wednesday. Compared with the same quarter a year earlier, compensation growth slowed to 4.2% from 4.3%. Since the pandemic, wages on average have grown at a historically rapid pace, before adjusting for inflation. Many companies have had to offer much higher pay to attract and keep workers. Yet hiring has moderated in recent months, to levels closer those that prevailed before the pandemic. Growth in pay and benefits, as measured by the ECI, peaked at 5.1% in the fall of 2022. Yet at that time, inflation was rising much faster than it is now, thereby reducing Americans’ overall buying power.

Digital-news startup the Messenger is shutting down less than a year after it launched, the Wall Street Journal reported. Founder and Chief Executive Jimmy Finkelstein delivered the message Wednesday to the company in an internal memo. “I am personally devastated to share that we have made the painfully hard decision to shut down The Messenger, effective immediately,” Finkelstein said in the memo to staffers. The venture launched in May 2023 with $50 million in funding and 175 reporters. A representative for the publisher at the time said its ambition was to have 500 journalists by the end of 2024. On Wednesday evening, the website appeared to stop displaying articles, and the home page only showed the company’s name and general email address.

U.S. job openings unexpectedly increased in December and data for the prior month was revised higher, suggesting that the labor market likely remains too strong for the Federal Reserve to start cutting interest rates in the first quarter, Reuters reported. Nevertheless, the labor market is gradually cooling, with the report from the Labor Department on Tuesday also showing Americans staying put at their current jobs, which could help to slow wage growth. The number of people quitting their jobs, likely in part for greener pastures, was the lowest in nearly three years. There were 1.44 positions for every unemployed person, steady from November, but down from two jobs in March 2022, when the U.S. central bank started hiking rates. Fed officials are expected to keep rates unchanged at the end of a two-day policy meeting on Wednesday against the backdrop of a resilient economy, which is being anchored by the labor market through consumer spending. Financial markets have lowered the odds of a rate cut in March to well below 50%.

When IRS Commissioner Danny Werfel met privately with senators recently, the chairman of the Senate Finance Committee asked for his assessment of a startling report: A whistleblower estimated that 95% of claims now being made by businesses for a COVID-era tax break were fraudulent, the Associated Press reported. The answer explains why Congress is racing to wind down what is known as the employee retention tax credit. Congress established the program during the coronavirus pandemic as an incentive for businesses to keep workers on the payroll. Demand for the credit soared as Congress extended the tax break and made it available to more companies. Aggressive marketers dangled the prospect of enormous refunds to business owners if they would just apply. As a result, what was expected to cost the federal government $55 billion has instead ballooned to nearly five times that amount as of July. Meanwhile, new claims are still pouring into the IRS each week, ensuring a growing price tag that lawmakers are anxious to cap. Lawmakers across the political spectrum who rarely agree on little else — from Sen. Elizabeth Warren (D-Mass.) to conservative Sen. Ron Johnson (R-Wis.) — agree it's time to close down the program. “I don’t have the exact number, but it’s like almost universal fraud in the program. It should be ended,” Johnson said. “I don’t see how anybody could support it.” Warren added: “The standards were too loose and the oversight was too thin." The Joint Committee on Taxation estimates that winding down the program more quickly and increasing penalties for those companies promoting improper claims would generate about $79 billion over 10 years.

Brazilian airline Gol does not expect its chapter 11 proceedings to trigger job cuts, its chief executive said on Friday, reiterating that the carrier's operations will remain as usual while it is under bankruptcy protection, Reuters reported. Gol, Brazil's second-largest airline in terms of passengers transported, filed for bankruptcy protection in the United States on Thursday as it grapples with high debt seen at around 20 billion reais ($4.07 billion). CEO Celso Ferrer in an interview with CBN radio said that the carrier's main goal with the move is to restructure its balance sheet so it can grow again. "There will not be layoffs related to this process. From now on we want to grow," Ferrer said, adding that operationally the carrier has been seeing a "significant recovery" after positive results in recent quarters. Gol is the latest in a series of Latin American carriers to seek bankruptcy protection after the COVID-19 pandemic, following the path of sister company Avianca, Mexico's Aeromexico and Chile-based LATAM Airlines.

Unemployment rates increased in 15 U.S. states in December, a rise from the prior month, but was unchanged in the majority of states and the District of Columbia, a report showed yesterday, Reuters reported. Nonfarm payroll employment levels, meanwhile, remained essentially unchanged in all states last month from November, according to Bureau of Labor Statistics data. From a year earlier, employment rose in 30 states while remaining essentially unchanged in 20 others and DC. Massachusetts and Rhode Island experienced a 0.3 percentage point increase in unemployment, the greatest month-over-month rise among states. Minnesota's unemployment rate fell by 0.2 percentage point, the only state to experience a decrease. Maryland and North Dakota had the lowest jobless rates at 1.9%. Nevada had the highest unemployment rate, remaining unchanged from November's 5.4%. The national unemployment rate was unchanged at 3.7% in December, the report said. The economy added 216,000 jobs in December, up from November's 173,000 added.

U.S. union membership rates fell to a fresh record low in 2023 despite it being a year of headline-grabbing organized labor strikes from the Rustbelt to Hollywood and some continued organizing successes at companies such as Starbucks, Reuters reported. The union membership rate fell to 10.0% from what had already been a record-low 10.1% in 2022, the Labor Department said on Tuesday in an annual census of the U.S. organized labor landscape. The number of union members, meanwhile, ticked higher for a second year, but the fact that overall employment among wage and salary workers rose faster resulted in a further decline in the membership rate. The membership rate among private-sector workers was unchanged at 6%, also a record low. The rate for government workers, which is more than five times the private-sector rate, slid to 32.5%, the lowest on record, from 33.1% in 2022.

A small Florida wholesaler thought it was getting a $3 million tax windfall. Now, it wants to return the money, but faces a $431,000 bill. The Internal Revenue Service isn’t the problem. The issue is with the company that helped the wholesaler claim a popular pandemic-era tax break, the Wall Street Journal reported. The dispute represents the leading edge of what is likely to be a wave of lawsuits tied to the employee-retention credit, or ERC, which was created by Congress to reward employers for keeping workers on payrolls during the pandemic. In December, the IRS rolled out a program that would allow employers to return 80% of the credit and avoid most penalties if they provided details about the ERC firm they used, part of an agency effort to crack down on what it says are fraudulent and ineligible claims. Now, the reckoning has begun. Colonial Wholesale Distributing, the Florida company, is one of at least four customers that have sued ERC Specialists, which promised to help taxpayers “file lightning fast” for the tax break. The legal battles go both ways: In recent months, ERC Specialists filed lawsuits against more than 40 of its customers, seeking to collect unpaid fees. ERC Specialists said it doesn’t comment on pending litigation. “There is rarely a need for collection efforts since we only charge if our customers receive money,” said co-founder Josh Zieglowsky, adding that the company has done so for fewer than one in 1,000 customers. Filing a lawsuit “is a tool of last resort” used only after six months of collection efforts, the company said.

A U.S. bankruptcy judge on Friday approved Yellow Corp's $82.9 million sale of 23 leased shipping centers to six other trucking companies, one month after the majority of the company's real estate assets sold for $1.88 billion, Reuters reported. U.S. Bankruptcy Judge Craig Goldblatt in Wilmington, Del., approved the sale in a written order on Friday, after Yellow filed court papers indicating that no one had raised any objections to the sale. Rival trucking company Estes Express Lines was the largest buyer in Yellow's latest asset sale, picking up five leased properties for a price of $35.3 million, according to court documents. Estes previously purchased 24 properties from Yellow for $248 million, and it had offered $1.525 billion in an unsuccessful effort to buy all of Yellow's real estate. Yellow chose to break up its business rather than keeping the company intact for potential buyers. With most of its real estate assets already sold, the company is focused on a separate sale of its vehicle fleet.

The Biden administration will release a final rule as soon as this week that will make it more difficult for companies to treat workers as independent contractors rather than employees that typically cost a company more, an administration official said, Reuters reported. The U.S. Department of Labor rule, which was first proposed in 2022 and is likely to face legal challenges, will require that workers be considered employees entitled to more benefits and legal protections than contractors when they are "economically dependent" on a company. A range of industries will likely be affected by the rule, which will take effect later this year, but its potential impact on app-based services that rely heavily on contract workers has garnered the most attention. Shares of Uber Technologies Inc., Lyft Inc. and DoorDash all tumbled at least 10% when the draft rule was proposed in October 2022. The Labor Department in the proposed rule said it would consider factors such as a worker's "opportunity for profit or loss, investment, permanency, the degree of control by the employer over the worker, (and) whether the work is an integral part of the employer’s business." The rule replaces a Trump administration regulation that said workers who own their own businesses or have the ability to work for competing companies, such as a driver who works for Uber and Lyft, can be treated as contractors.