This week’s world-famous news haiku competition™ is about how America added more jobs than expected in May, but ironically that sent the stock market down because it bolstered expectations for the fed to raise interest rates this year to cool the economy. Good luck getting anything about that into 17 syllables, let alone making it… emotional. Still, I believe in you! Send me your entry—to haiku at cheddar dot com—by noon ET today, for consideration by your Cheddar peers.

Now for God’s sake, man, can we hear about the news?

Matt Davis — Need2Know Chedditor

News You Need2Know

What’s the stock market up to, eh?

$SPX ( ▼ 1.62% )   $DJI ( ▼ 1.87% )   $NDX ( ▲ 1.59% )  

Companies mentioned in today’s newsletter

$CBRL ( ▲ 22.56% )   $MSFT ( ▼ 1.5% )   $DAL ( ▼ 5.79% )   $AAL ( ▼ 4.76% )   $IAG.L ( 0.0% )   $KALSHI ( ▼ 0.8% )  

Inflation eats paychecks as levels hit 3-yr highs

Hold onto your wallet because year-over-year inflation just hit a three-year high of 4.2% in May, and your paycheck is officially the main course. Thanks to the ongoing Iran conflict, gas prices have surged more than 40% since last year. While "core" inflation (which conveniently ignores that most of us need to eat and drive) rose a softer 0.2% on the month, inflation-adjusted hourly wages dropped 0.7%. That’s the first time they’ve dropped since the pandemic.

Are we slowing down our spending, though? Of course not. David Stacey, chief economist at America First Credit Union, summed up our collective denial: “They’re still spending, but they’re spending themselves kind of into a trouble situation,” he told the Wall Street Journal, noting that upcoming summer vacations "will just exacerbate" this financial mess. Sure, economists like RSM's Joe Brusuelas hope "we’re approaching the peak" of these price hikes. But if your credit card debt is rising along with that of most Americans, I’d imagine that’s cold comfort.

“The numbers were great,” Trump said of the data, yesterday.

Quote of the Day

Cracker Barrel surges as investors ask, ‘What rebrand?’

Grab your rocking chair and biscuits, because Cracker Barrel $CBRL ( ▲ 22.56% ) is coming back. After a disastrous, short-lived logo change last summer threw the family restaurant chain into the center of a culture-war controversy, shares just surged a massive 28%. It’ll be a while before the company reaches its 2021 highs, of course, since the stock has essentially been in the toilet since last year.

Still, what’s the secret to the turnaround? Frantically hitting the undo button. The company reinstated its classic logo and went back to its old-school cooking processes, and investors are eating it up.

Despite analysts bracing for a loss, Cracker Barrel served up a surprise $42.8 million profit in the fiscal third quarter. Let's be real, though: This wasn't just because of the food. The company largely pulled this off through aggressive corporate cost-cutting and a very convenient $47.4 million litigation settlement over Visa card swipe fees.

In reality, fewer people are actually eating there, with foot traffic dropping 6.7%. But Chief Financial Officer Craig Pommells is finding the silver lining, noting, “Although traffic remained negative, we’re encouraged by the gradual improvements in the underlying traffic trend.” Meanwhile, CEO Julie Masino is taking the wins where she can get them, boasting that their Google Star rating hit a high not seen since 2018, and insisting, “Our value remains strong.”

That’s some rebrand for falling foot traffic, I must say. Can I get a ‘C’? Can I get a ‘B’? Can I get an ‘RL’? No? It’s un-pronounceable? Well, okay then…

Airlines draw up flight cuts for a grim winter

America’s winter travel plans are on thin ice. Thanks to skyrocketing jet fuel prices, airlines are preparing to aggressively slash schedules, the Financial Times reports. As one industry adviser bluntly told the paper’s reporter, Peter Campbell, “You need to make sure you’re filling every seat. You can’t fly planes that are empty.”

Airlines are hitting the panic button. ITA Airways chief Joerg Eberhart warned, "Maybe there will have to be some help from governments," noting their fuel hedging only lasts two months: “The real problem starts then in January.” McKinsey's Steve Saxon agrees, predicting that if prices go up again, "the winter is fairly ugly."

For smaller carriers, the threat is existential. Latam's Roberto Alvo cautioned that "weaker carriers... are going to start to suffer." Aviation consultant Jeffrey Goh laid out the industry's grim dilemma: “Are you going to put your aircraft in the desert... Or are you going to fly [at] an operating loss?” Turkish Airlines chair Murat Şeker even threatened that they will "stop operating in certain cities" if elevated fuel levels continue.

Meanwhile, some executives are just busy cashing in on our travel desperation. Delta’s $DAL ( ▼ 5.79% ) Peter Carter cheered, “It’s all driven by demand. The economy is quite strong." IAG's $IAG.L ( 0.0% ) Luis Gallego bragged they "don’t see any weakness," and American Airlines' $AAL ( ▼ 4.76% ) Nat Pieper is simply plotting to take "full advantage of the revenue goodness as long as it lasts."

Song of the Day: Bedouine, ‘One Thing Right’

Here’s a sunlit, groove-heavy celebration of summer. Hoorah!

Bill Gates testifies on Epstein ties in Congress