Minimum wage hike: Just what the economy ordered?
Recapping the day's news and newsmakers through the lens of CNBC.
Higher wages kill jobs? Maybe not
Retailers, fast-food eateries and many other businesses rely on inexpensive labor, so any push to raise the minimum wage is a concern.
One of those efforts is in Seattle, home of Starbucks, where advocates want the state of Washington's minimum lifted to $15 an hour from $9.19, already the highest of any state. Starbucks CEO Howard Schultz has supported a higher minimum wage.
Other big U.S. employers, including Wal-Mart, say a higher wage would cost some workers their jobs.
Business groups like the U.S. Chamber of Commerce have long argued that higher wages kill jobs. But some academics say that's not necessarily so. Nor, they add, do higher wages inevitably lead to a jump in prices. In fact, the broader economy may benefit. And businesses which sell things to people with modest incomes want those consumers to have more to spend.
Lots of debate, and in the end, all arguments about the minimum wage can be reduced to the price of a Big Mac.
"A higher minimum wage is a very simple and elegant solution to the death spiral of falling demand that is the signature feature of our economy."—Venture capitalist Nick Hanauer
Consumer sentiment on Fifth Ave worsens
Poor retail sales obviously reflect weak consumer sentiment, a worrisome sign for the economy.
Expect more worry.
More than 30 retail firms are scheduled to report quarterly results this week, after what's already been a disappointing earnings season—Macy's, Nordstrom and Wal-Mart. Saks, too, let shareholders down Monday morning.
Saks reported same-store earnings well below expectations and a loss 5 cents worse than expected.
Some analysts think consumers are just postponing purchases until their needs are more imminent, but that smacks of wishful thinking.
"We think rising uncertainty limits retailer incentive to guide strongly."—Morgan Stanley's Kimberly Greenberger
Keeping up with the executive Joneses
If the rank-and-file consumer won't spend, it's up to highly paid executives to keep the consumer economy chugging along.
Maybe a '60s Ferrari? It won't have today's safety features, but you're not likely to take too many fast turns after plunking down $27.5 million. That was the price of a 1967 Ferrari 275 GTB/4*S N.A.R.T. Spider sold at auction the other day. Only 10 of these babies were built, and they were driven by guys like Steve McQueen.
Then there's the electric Tesla Model S, a $70,000-plus car. A survey by Edmunds.com says 84 percent of Model S buyers are men, and 77 percent have incomes over $100,000. As far as luxury car sales go, it's trending to a slightly younger demographic. About 84 percent of buyers are under 65.
Smartphones can make a statement. The biggest is the new, aptly named Samsung Galaxy Mega. Its 6.3-inch screen rivals that of 7-inch tablets.
And to finish off the cool executive spending spree, you know that "interesting" dude on TV who likes Dos Equis beer? Well, you can only be so cool if beer's your beverage. The newest, most with-it drink, could be low-alcohol wine, though it's no sure thing.
"Dad wouldn't want the car to be shut away, he would want it to be enjoyed. Even when the value went over a million dollars, he would still drive it."—Eddie Smith Jr., son of the Ferrari's longtime owner
"The market [for low-alcohol wine] is niche. Even so, there might be an upward trend."—Karl Storchmann, managing editor of the Journal of Wine Economics
Bond exodus continues, pushing rates higher
Mutual funds and exchange-traded funds that invest in bonds have been experiencing big outflows, reflecting investor concern that bond values will continue to fall if interest rates continue to rise. A new report from the industry-tracking firm TrimTabs shows that the bond fund outflow has accelerated in August—a total $19.7 billion this month so far, compared with $14.8 billion for all of July.
Monday morning, the yield on the 10-year U.S. Treasury note, a benchmark that guides many other rates, including those on mortgages, rose to 2.8656 percent, the highest since July 2011.
"The U.S. economy is a highly leveraged economy that will not easily tolerate higher borrowing costs."—TrimTabs CEO David Santschi
—By Jeff Brown, Special to CNBC.com