P.M. Edition for June 4. Dollar General and Dollar Tree have reported bumper first-quarter earnings. WSJ reporter Suzanne Kapner joins to discuss what that shows about consumers, and about the state of the U.S. economy. Plus, the Congressional Budget Office estimates that President Trump’s tax-and-spending megabill would add $2.4 trillion to the U.S. deficit, as Republican senators are demanding changes that could alter its price tag. We hear from WSJ tax policy reporter Richard Rubin about how the bill might shift. And the Trump administration threatens Columbia University’s accreditation. Alex Ossola hosts. What’s News in Earnings: Retailers Scramble to Respond to Tariffs Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: Why are Americans shifting to discount stores?
Und der russische Präsident Wladimir Putin hat Präsident Trump gesagt, dass Russland zu der letzten Drohnen-Attack in der Ukraine reagieren wird.
Es ist Dienstag, 4. Juni. Ich bin Alex Osola für die Wall Street Journal. Das ist die P.M.-Edition von What's News, den Top-Headlines und Business-Storys, die die Welt heute bewegen. The Trump Administration has taken aim at Columbia University's accreditation, a significant escalation in the government's battle with the Ivy League school.
The Department of Education told the organization through which Columbia is accredited that the school is in violation of federal anti-discrimination laws and no longer appears to meet the standards for accreditation. The move doesn't revoke Columbia's accreditation, without which Columbia would be virtually unable to operate.
But the administration urged the accreditor to work with the school to make sure it comes into compliance with federal law and, quote, take appropriate action if Columbia fails to do so. Neither Columbia University nor the Middle States Commission on Higher Education, which accredits Columbia, immediately responded to a request for comment.
Die Aktivität der US-Servicefirmen sank im letzten Monat unerwartet. Das Institut für Versorgungsmanagement hat heute gesagt, dass sein Verkaufsmanagers-Index für Versorgungsanbieter im Mai von 51,6 in April zu 49,9 gefallen hat. Die Wirtschaftsberichterstatter von The Wall Street Journal hatten eine kleine Erhöhung erwartet.
Die Kontraktion bezieht sich auf die Erhöhung der Unwahrheit und die Preisverschränkungen für Unternehmen, die von Präsident Trumps Tarif-Polizien gefordert wurden. The reading below 50 indicates a first contraction in activity since June 2024. Meanwhile, American employers further dialed down their hiring in May, a sign that the labor market may be weakening amid growing economic uncertainty.
According to the ADP National Employment Report released today, just 37,000 jobs were created last month, down from 62,000 in April. The downturn means job growth was its weakest in more than two years. After the ADP numbers were released, President Trump posted on Truth Social that Federal Reserve Chair Jerome Powell should lower rates.
The Fed reiterated last week that officials make interest rate decisions based solely on careful, objective and non-political analysis. U.S. stocks were mixed today after President Trump renewed his call for a Federal Reserve rate cut. The Dow fell about 0.2%, the Nasdaq rose about 0.3% and the S&P 500 stayed flat. Präsident Trumps Tax and Spending Megabill comes with a significant price tag.
The legislation would increase budget deficits by $2.4 trillion over the next decade, compared with doing nothing. That's according to a Congressional Budget Office estimate released this morning. The number underlines Republicans' challenge in selling the measure as fiscally sound, even as Republican senators want changes to the GOP Tax and Spending Megabill.
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Chapter 2: What are the implications of Trump's tax-and-spending bill?
Another thing that the big, beautiful tax and spending bill contains? Expanded access to health savings accounts, or HSAs. At least 60 million Americans currently have access to these accounts, which offer remarkable tax breaks to users who can afford to maximize them. If the Senate passes the bill, millions more Americans could potentially have access soon.
WSJ-Reporter Laura Saunders told our Your Money Briefing podcast about what comes next.
Eine Sache zu wissen ist, dass die aktuelle Legislaturperiode vor der Sitzung des Senats, die die Staaten verabschiedet haben, nichts von den aktuellen Vorteilen der HSAs wegnehmen würde, sondern es würde mehr Vorteile hinzufügen. Die Sitzung des Senats wird sofort arbeiten und hofft, bald etwas zu machen.
Wir wissen nicht genau, wie das funktionieren wird, aber ich würde sagen, dass es zehn Provisionen gibt, die HSAs positiv beeinflussen, und sie waren nicht kontrovers. Not the way that salt provisions for state and local tax deductions are controversial or green energy provisions are controversial. We don't know what's going to happen, but they probably have as good a chance as many.
Chapter 3: How could the deficit increase from the new legislation?
For more from Laura, listen to tomorrow's episode of Your Money Briefing. Coming up, discount stores are thriving. What does that say about how the U.S. economy is doing? That's after the break. Die neuesten Daten über Konsum-Sentiment haben gezeigt, dass amerikanische Haushalte nicht so gut fühlen.
Das Buch, das letzte Woche veröffentlicht wurde, war eines der niedrigsten, die je gedreht wurden, in Daten, die 1952 zurückgehen. Und obwohl die Konsum-Sentimente niedrig sind, sind die Discount-Retailer hoch. Beide Dollar Tree und Dollar General haben für das erste Quartier des Jahres höher als erwartet. Sie sind da, weil sie eine breitere Konsum-Base erreichen.
Chapter 4: What changes are Republican senators proposing?
Yesterday, Todd Vassos, the CEO of Dollar General, said in an earnings call that the company is reaching higher income consumers.
During our recent customer survey work, 25% of DG customers reported having less income than they did a year ago and nearly 60% of our core customers noted that they felt the need to sacrifice their necessities in the coming year. While our core customer remains financially constrained, we have seen increased trade-in activity from both middle and higher income customers.
Dollar Tree said something similar. In its earnings call this morning, CEO Michael Creeden pointed to a broader consumer base as the reason behind its strong first quarter.
Trade-in trends remain strong as we attract customers from other retail channels. In recent quarters, higher income customers have been a meaningful growth driver for us. In Q1, we had measurable sales improvement across all income levels, with the most growth coming from our higher income customers.
In particular, we saw a meaningful traffic increase from customers with household incomes of more than $100,000, demonstrating Dollar Tree's broad appeal.
To talk about what these results tell us about American consumers, I'm joined by Suzanne Kappner, who covers retail for The Wall Street Journal. So, Suzanne, both higher-end, lower-income consumers are buying from these stores. What does this tell us?
Well, consumers are under pressure, and even consumers that have a little more disposable income are trading down. One of the things that is looming over some of this is tariffs. What are Dollar General and Dollar Tree planning to do about that? Well, like other retailers, they're rejiggering their supply chains, they're moving production out of China as much as they possibly can.
Dollar General, for instance, said that they've reduced their exposure to China and they are mitigating the impact by using many of the same tactics across the retail industry. Working with their vendors to reduce costs, looking for concessions from their suppliers. Even reengineering some products or finding substitute products with lower costs. So they're trying a variety of different things.
What does this tell us about the broader state of the economy?
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Chapter 5: How will the tax bill affect health savings accounts?
In other news, Reddit is suing AI-Startup Anthropic for using the online discussion site's data without a licensing agreement. According to the complaint filed today in California, Reddit said the AI company unlawfully used Reddit's data for commercial purposes without paying for it and without abiding by the company's user data policy. Anthropic didn't immediately comment.
Präsident Trump hat heute gesagt, dass russischer Präsident Wladimir Putin gesagt hat, dass er zu den letzten Angriffen in der Ukraine reagieren muss, um die Vorschläge für die sofortige Frieden zwischen Moskau und Kiew zu verringern.
In a social media post, President Trump said the two leaders spoke for an hour and 15 minutes, though the post didn't say whether he urged Putin not to launch a retaliatory attack on Ukraine. Trump said that he and Putin also discussed blocking Iran from getting a nuclear weapon and that the Russian leader said he would be willing to get involved in the ongoing conversations.
And a large cargo ship transporting thousands of vehicles is adrift in the Pacific Ocean. After several electric vehicles it was carrying caught fire. All 22 crew members were evacuated safely. The lithium batteries used in many electric vehicles are highly flammable. There have been cases of spontaneous combustion, but no ship fires so far have been directly blamed on EVs.
And that's what's news for this Wednesday afternoon. Additional audio in today's episode, courtesy of S&P Global Market Intelligence. Today's show was produced by Pierre Bien-Aimé and Anthony Bansi with supervising producer Michael Kosmides. I'm Alex Osola for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.
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