What I Read This Week...

Intel wants to build the biggest chip factory on Earth, the world is approaching a low-fertility future, and several signs point to a cooling labor market

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Caught My Eye…

• U.S. chip-designer and manufacturer Intel has committed $28Bn to build a ‘mega-fab’ in Ohio, with the aim of eventually turning this into the biggest chip factory on Earth. Two fabs are currently under construction in Ohio with room for eight in total, and Intel has committed to pouring as much as $100Bn into the project if they decide to fully build it out. Achieving this lofty goal will require some help from the government. The Biden administration has agreed to provide Intel with $19.5Bn in loans and grants to help finance both the project in Ohio as well as similar projects in Arizona and Oregon.

• The world is approaching a low-fertility future according to a new study published by The Lancet. To maintain their population over the long-term, countries need to sustain a fertility rate of 2.1 children per woman. However, by 2050, an estimated three-quarters of countries will not have high enough fertility rates to sustain their population size over time. What does this mean? Comparatively high fertility rates in Western and Eastern sub-Saharan Africa are expected to drive a significant demographic divide, with sub-Saharan Africa accounting for approximately half of all children born by 2100.

• U.S. employers scaled back hiring in April and the unemployment rate rose, suggesting that the labor market may be cooling after a strong start to the year. Nonfarm payrolls, a measure of employment, advanced just 175,000 last month, marking the smallest gain in six months due to unexpected weakness in the services sector. Meanwhile, average hourly earnings climbed 3.9% YoY, the slowest pace since June 2021. While all signs point to a cooling labor market, this isn’t enough for a Fed policy response, which would require wage growth to “move down incrementally” for the Fed to meet their inflation objective.

Other Reading…

• Florida Bans Lab-Grown Meat, Adding to Similar Efforts in Three Other States (NBC News)

• Watch Out for a Global Wealth Tax (WSJ)

• Why RAG Won’t Solve Generative AI’s Hallucination Problem (TechCrunch)

• EveryONE Medicines: Designing Drugs for Rare Diseases, One at a Time (WSJ)

• Voyager 1’s Communication Malfunctions May Show the Spacecraft’s Age (Discover)

• Buffett Says US Corporate Taxes Likely to Rise to Tame Deficit (Bloomberg)

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