Every number tells a story
What three astounding data points say about our economy — and times
If every picture tells a story, so can some numbers. Here are three that caught my attention last week. $897 million: How much Stephen Schwarzman, chief executive of Blackstone, took home last year. Schwarzman received $777 million in dividends from his shares in the New York-based private equity firm, according to a regulatory filing. His compensation came to $120 million, primarily from incentive fees and his cut of the profits from the company’s buyout and other funds.
Schwarzman’s wealth — his net worth is $41.8 billion, according to the Bloomberg Billionaires Index — underscores the winner-take-all economics of Wall Street. Yet private equity pay can pale in comparison to what hedge fund managers make. Israel Englander of Millennium Management took the top spot in Bloomberg’s hedge fund ranking with $2.8 billion in compensation, one of five hedgies to make more than $1 billion last year.
But get this: Schwarzman took a 30 percent pay cut from 2022, when he earned $1.27 billion. A slowdown in buyout deals last year left a smaller profit pie to divvy up.
It’s a tough biz, private equity. $277 billion: The single-day (!) increase in Nvidia’s stock market value after the computer chip maker released blowout quarterly earnings.
The gain on Thursday was bigger than the total market capitalization ($215 billion) of Thermo-Fisher Scientific, the most valuable company in Massachusetts. In fact, the gain alone exceeded the market cap of all but 26 companies in the Standard & Poor’s 500 index.
Nvidia is printing money as companies race to commercialize artificial intelligence. Its 3D video- and image-creating chips were originally designed for video games, but they also excel at the kind of high-intensity computing needed to train AI models like ChatGPT. A fortuitous coincidence.
The Santa Clara, Calif., company’s revenue hit $22.1 billion in the quarter ended Jan. 28, up from $7.6 billion a year earlier, just after ChatGPT was released. Net income soared to $12.3 billion from $3.3 billion over the same period.
Nvidia’s stock price has zoomed nearly 370 percent since ChatGPT appeared, driving its market cap to nearly $2 trillion. It has lapped competitors including Broadcom, Advanced Micro Devices, and Intel,
as well as the other big tech stocks (see Alphabet, Amazon, Apple, Meta, and Microsoft) that have pushed the market to new heights.
AI is not a fad. But whether its long-term prospects justify Nvidia’s stratospheric stock price remains to be seen. And if Nvidia loses altitude, the rest of the market might follow.
25,000: Projected growth in the Massachusetts labor force from 2024 through 2028.
The estimate — among the assumptions used in the most recent financial forecast for the state’s unemployment insurance trust fund — equates to an increase of less than 1 percent over five years. If accurate, it could spell more hiring trouble for employers, who are struggling to fill open jobs amid baby boomer retirements and the loss of working-age residents to other states.
The local labor force — the number of workers with a job or looking for one — peaked at about 3.89 million in the summer of 2019. It plunged to 3.45 million during the worst of the pandemic and has since rebounded to 3.74 million.
The trust fund report also projected that the unemployment rate, which was 3.2 percent in December, would rise to about 3.5 percent by early next year and hover there through 2028. The rate of quarter-to-quarter wage and salary growth is expected to rise to 1.4 percent in the first three months of this year, before settling around 1 percent for the rest of the forecast period.
The prospect of a low jobless rate and moderate wage gains are welcome. But adding an average of just 5,000 workers a year — compared with more than 32,000 in 2023 — could curb both job and economic growth.
Call it a mixed forecast.