September Hiring Slows & Tom Cruise's 'Digger' Could Lose $150M

Are you sucking wind from trying to keep up with AI and its impact? Take a breather and tune in to The Intelligence Shift, Morning Brew's new podcast with PWC. It bridges the gap between big picture AI concepts and what it actually means in practice. Host Dan Priest is joined by expert guests to discuss AI's role in sports, music, HR, and more. Listen to The Intelligence Shift wherever you get your podcasts. Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, Tom Cruise just had the biggest flop of his career. Then, why a hedge fund just spent $21 million on office space. It's Monday, October 5th. Let's ride. There's always one person in a friend group who takes pride in their parallel parking, scoffs at the idea of a camera, puts that hand confidently on the passenger seat, headrest when backing in. Well, now there's a competition for that. On Saturday, Philadelphia held its first ever parallel parking championship, where 14 competitors navigated tight spaces in adverse conditions for the chance at winning $76, the cost of a parking fine in the city. In front of a huge crowd, the parkers competed in three rounds. A one-shotter, measured by distance to the curb. Tight squeeze, where you had to park in a space just 18 inches longer than your car. And under duress, where you had to confront typical Philly obstacles like Dallas sucks. And the first question we both had when we saw this was, are backup cameras allowed? And thankfully, in this particular competition, they were not just pure trigonometry between human and machine and curb, I guess. The New York Times actually talked to the originator of some of these parallel parking competitions. It's this guy, Dan Lerber from Pittsburgh. And he weighed in on kind of technology's role in parallel parking. And he said, even if a self-driving car, could park in a reasonably good time, it's not going to win the competition. A human's going to win because a human feels their car. Their car is an extension of them. They get it. They get the flow. So I just loved hearing him wax poetic about the art of parallel parking. I feel like you're an arm behind the headrest kind of guy. Oh, you got it. It's all about style. You know, not about substance, but style. But I do like the under duress round because I did live in Philly for two years. I had an older car that didn't have a backup camera. And that really is the name of the game when you're parking parallel parking in Philly, because it's pretty easy to do under standard conditions. But there's always people watching you and just giving you that judgmental look like all these old grandmas on stoops, just like, you know, they're begging you to mess up or like hit somebody. So I think that one should be weighted higher than the rest. It makes me thankful. I don't have a car in New York City. And now a word from our sponsor into it. Neil, remember that blonde lady who broke into that family's home, ate all their food, broke their furniture and slept in their beds? Goldilocks? Yeah, that little home intruder. She was looking for something that was just right. Sort of like finance teams and CFOs logging into four systems to close one month, rebuilding every report in a spreadsheet and paying for add-ons the way they were told they wouldn't need. Luckily, there's the Intuit ERP for that. It's powerful enough for enterprise demands, yet nimble enough to feel familiar and intuitive. Your team runs one close, however many entities you have. They build their own. They own reports, no consultants required. And getting started doesn't take over your year, all without the legacy ERP baggage. To learn more, head to Intuit.com slash ERP. That's Intuit.com slash ERP. The U.S. added just 29,000 jobs in September, missing expectations of 84,000, which sounds bad, but it's not as bad as you think. Yes, the 29,000 jobs Friday's jobs report revealed the economy tallied feels like a far cry from the 200,000 jobs. We used to rip off coming out of COVID, but the unemployment rate is still sitting at a historically low rate of just 4.2%, which signals two things. One, the labor market is low hire, low fire right now, which means companies aren't adding many roles, but also aren't laying off huge numbers of people either. It's a game of musical chairs where no one is really getting up. And two, the pool of people available to work is growing much more slowly because the population is aging, boomers are retiring, and there's been a clampdown on the number of people who on immigration, which has reduced the labor supply. Add the two up, and the economy doesn't need 200,000 new jobs every month to keep unemployment low. Where are the remaining jobs coming from? Well, healthcare, the MVP of job creation, added 17,000 workers, though that was lower than the 33,000 jobs a month average over the past year. Construction and manufacturing chipped in 11,000 and 9,000, respectively, while AI-exposed industries like the information sector actually lost jobs. Neil, the final wrinkle to this. This job's puzzle is that stocks rose after Friday's report because a weaker job market means the Fed might be less inclined to raise rates at its next meeting. I'm going to call this the air mattress labor market. I knew you'd have a label for whatever we got. You push it down, there's some give, but in the end, there is structural integrity and it's stable. And you're like, I don't know if I should be able to sleep on this, but, you know, you wake up the next morning pretty well rested. I also want to talk about low hire, low fire. Yeah, it rhymes. It's a nice. But it really means everyone makes less money because there's not turnover. Remember during COVID-21, 2022, everyone was moving jobs, zip zap. And when you move jobs, people make more money. Everyone makes more money because you move a job that creates an opening in your company for someone else to move in. And there's usually big wage gains associated with people moving jobs. No one's quitting. No one's getting very few people are getting laid off. So you just have a labor market on ice. And we saw that in the earnings stats, average hourly wages rose 3% in September. Compare that to inflation, which rose an annual 3.4% in August. So you're seeing inflation eat away at all the wage gains people are making. Also, we did get some revisions as well. That's always kind of what people are looking out for as a new jobs report comes in. The summer was a little bit weaker than we initially thought. July was revised from a gain of 21,000 jobs to a loss. August was revised from a gain of 162,000 to a gain of just 133,000. So combined, the government removed 60,000 jobs from its previous estimates. So the summer appeared softer than initially expected. But if you zoom out a little bit, because the jobs number is a very bouncy number. It kind of ebbs and flows. You see these big gains, then they're revised to big losses. What is happening? Just zoom out. The U.S. has. 159 million jobs. And we're talking about tens of thousands of jobs. So as a percentage, it's very low. I think back to. We talked to a Fed president, Austin Goolsbee, who says, I don't even really look at the exact number. I look at rates because the overall pie is more important than the month-to-month figures. And again, the overall pie is showing that unemployment remains low. So don't get too caught up in these tens of thousands of revisions, given how big the actual labor market is as a whole. Yeah, we're on a record streak right now. The unemployment rate has been at or below 4.5% since October 2021, the longest streak in modern history, which means that anyone who wants a job and is looking for a job, most of them are actually finding one. And that low unemployment rate, that stable air mattress labor market, is fueling consumer spending, which is fueling the economy. The Wall Street Journal reported that the dollar amount spent by U.S. households rose by 6.1% in the 12 months. through August, which was up from annual growth of 4.3% for the end of last year. So we've seen consumer sentiment in the dumps. People aren't finding new jobs. It's been especially tough for entry-level workers. But, you know, people do have jobs. It's relatively stable, and they're spending like it. Moving on, Tom Cruise might do his own stunts, but no base jump could help him escape the train wreck that is Digger. Cruise's latest film, a much-hyped big-budget original, is on track to be the biggest flop of his career. On its opening weekend in theaters, Digger brought in just $8 million domestically, putting it on track to lose at least $150 million. They certainly swung for the fences. A dark comedy lampooning the billionaire class, Digger was directed by the acclaimed Alejandro Iñárritu, who won back-to-back Best Director Oscars with Birdman and The Revenant. Bring on one of the most bankable stars in Hollywood and send him on a rare press tour, Warner Bros. was hoping for a $40 million opening to justify its costs. But when reviews started coming out a month ago, it became clear that this movie was going to be too weak and too experimental to resonate with the public. The New York Times called it a lumbering white elephant of a movie that it almost makes you sorry for everyone involved, and RogerEbert.com labeled it a metafictional morass. It's ended up with a C-plus cinema score from audiences and a 51% on Rotten Tomatoes. In other words, most thought Digger wasn't that good, and it requires too much brainpower for a hate watch. Toby, this was Tom Cruise's first original movie since 2017. The rest have come from franchises. Perhaps it was a mission impossible from the start. Part of the issue is that it asked people to accept Tom Cruise in a role that's so different from what they normally see him in. We're used to seeing him run really fast away from explosions in action movies, but now this is more of a R-rated movie. It's a satire, it's lampooning, you know, a billionaire class. It's just not mission impossible at all. So I think a lot of people are just like, what am I supposed to take away from this? So that was problem number one. It also just caps off a disaster of a year, for Warner Bros. Remember, last year on the pod, we were singing Warner Bros. praises, they were killing it. They had the biggest movies, they had Sinners, they had Weapons, One Battle After Another, won Best Picture at the Oscars. This year, they've had Supergirl, major loss. The Bride, which I didn't even know came out, that was about The Bride of Frankenstein, major loss. And now Digger is looking at $125 to even $150 million loss. So what a difference a year makes for Warner Bros. Discovery in its last year as an independent studio as well. Yeah, not a single film from Warner Bros. has managed to cross $100 million domestically this year. And what they were known for, the two people in charge, was going to directors like Paul Thomas Anderson or Inyo Ritu, these auteurs, as the cinephiles call them, where you can really watch a movie and say, okay, I know that this director directed it because they have their particular vision and their particular style. And they were saying, go make your passion project. Paul Thomas Anderson, go make One Battle After Another. Ryan Coogler, go make Sinners. Inyo Ritu, go. Go make these very high-minded movies. And people like that, or people who care about movies like that because we got more original stuff, more of an artistic vision. But after this deal goes through with Paramount, which we'll talk about a little later on the week ahead, the two leaders are going bye-bye and there's going to be new leadership at Warner Bros. And we'll see whether this auteur-led blank checks that they were writing will be minimized because of what's happened this year that's been capped off by Tom Cruise's biggest flaw. I thought it was fascinating, too, if you look at the number one movie at the box office this week, it's Verity, which is from Amazon Studios. That took the exact opposite approach to Digger, where they just adapted a Colleen Hoover novel. Why reinvent the wheel when you know Colleen Hoover is going to bring people into the theaters? That audience that likes that type of movie is going to turn out. It's led by Anne Hathaway. Anne Hathaway, by the way, having a year. This is her third number one movie of the year. She's been in five movies. So while Tom Cruise tried to take this big swing, big artistic swing, maybe it's better to just stick to readapting old material that you know is going to turn people out and know it's going to do well at the box office. It's the fourth Colleen Hoover adaptation in two years. I will say, I think this movie is going to have a second life as a cult classic, Digger, I'm talking about, because honestly, I scrolled through social media last night and every single post was saying, yeah, this movie was actually sick. Yeah. These are from more of the movie nerd types, but on Letterboxd, which is the hub of those people, it's a movie review platform. Digger is now at 3.8 stars. That is Tom Cruise's seventh highest rated film tied with Minority Report, Edge of Tomorrow, Last Samurai, and Mission Impossible 4 and 5. You had people like Mark Andreessen, who's a venture capitalist, a billionaire venture capitalist, who this movie is supposed to make fun of. He's called Digger a work of pure cinematic genius. So I've seen a pushback to the pushback of people saying, actually, this movie's kind of sick. Like, maybe you don't understand it, but it's worth going to the theaters for. I get all my movie recs from Mark Andreessen. I'm so glad you brought that up. All right. Welcome to Winners of the Weekend, the segment where Toby and I pick two things that had a better weekend than Tom Cruise. I won the pre-show parallel parking competition, so I get to go first. And my winner is Boeing, whose 737 MAX has rehabbed its reputation from a killing machine into a lifesaver. Last week's thwarted attack on a fly Dubai flight to Tel Aviv has spawned numerous hearings from the pilot who was stabbed by his colleague managing to open the cockpit door, the passengers who rushed into the cockpit to stabilize the plane and neutralize the attacker. But among those who saved the day, the plane itself, which withstood stress far beyond its operational limits and serves as a testament to its engineering. Just to give you a sense of how abnormal these conditions were, as one pilot attacked the other pilot, the 737 MAX plunged from nearly 31,000 feet to less than 17,000 feet in 29 seconds. So at that rate, it would have crashed. It would have gone to the ground in another 30 seconds. That's going from cruising altitude to the ground in one minute. During its nose dive, its nose was literally in a dive, pitched down 39 degrees. In an aircraft's standard descent, the nose is down three degrees. That really ratcheted up the speed to the point where the plane was traveling an estimated 0.96 Mach, or nearly the speed of sound. That's far above its maximum operating speed of 0.82 Mach, or around 473 knots. Toby, in the past, when we've talked about the 737 MAX, it's about the plane's, troubled history, two fatal crashes due to software problems in 2018 and 2019. Now it's being held up as a shining example of aviation's exhaustive testing and layers of redundancy. Because the way a commercial aircraft is built is that it's not going to fail at its technical maximum speed. It's sort of like when you buy food at the grocery store, there's a sell-by date, but that's not the exact date that you are no longer able to eat the food. Same thing. It can exceed some of its limits and it's tested actually beyond, its published limits here. The plane did actually break a little bit. Part of its rudder was torn away, but Boeing actually tests for almost an exact situation like this. They test for a jammed rudder. The fact that the rudder just flew away made it so pilots knew that they could still land this plane. And again, you can give credit to the plane, but also there's a lot of luck involved. Two off-duty pilots happened to be sitting in the cabin and were able to guide the plane down as well. But you're absolutely right that the 737 is actually getting praise for a lot of its designs. One thing that contributed to the fact that a passenger was able to pull it out of its nosedive is the design of the cockpit itself. There is kind of a big steering wheel in the middle of a Boeing 737 cockpit. It looks like something that you have seen in movies, which he did and seen on TV shows, that you know to pull towards yourself. An Airbus A320, a very similar plane back in Harrison, uses signage. There are side sticks that are positioned beside each pilot. Not as intuitive for a normal person to go in. So a lot of things contributed to the factor from the actual engineering itself to some just lucky things, like the fact that he recognized what a steering yoke looked like. Yeah, just overall experts say, wow, I can't believe this plane didn't fall apart. It's exactly what Stephen Arroyo, an aviation safety expert, told the AP. He was like, this was a serious descent. Strong aerodynamic forces on that rudder for that to happen. He's amazed that the aircraft didn't fall apart. It also earned some praise from President Trump, specifically Boeing and its design and engineering here. He wrote on True Social, congratulations to the great Boeing company for producing a plane, the 737 MAX, that was able to withstand G-forces and strain far beyond what it was designed and expected to do. It caps off a bit of a comeback for Boeing under new CEO Kelly Ortberg. There's one version of the 737 MAX, the 10 that still hasn't gotten certification, but officials last week signaled that that was coming soon, which could give them a boost because this is their best-selling plane and they want to have all models, especially the newest ones, available. They're enjoying the limelight a little bit right now. All right, we're going to take a quick break and come back with my winner of the weekend right after this. Neil, let me tell you a thing or two about bond markets. Go for it. They are confusing. So just one thing then. But yes, capturing value in fixed income is not easy. Thankfully, Vanguard bonds are institutional quality. That means top-grade products across the board. Vanguard can invest across all kinds of sectors, maturities, and geographies, which means they can spot and act on opportunities that others might miss. If you want to give your clients consistent results year in and year out, go see the record for yourself at Vanguard.com slash audio. That's Vanguard.com slash audio. All investing is subject to risk. Vanguard Marketing Corporation distributor. Neil, you know how I'm always watching docu-series? Yes, and I keep telling you you're watching scripted sitcoms. Well, Rising Stars, it's a docu-series that follows small business owners as they create their businesses, face real challenges, and scale their brands with help from Amazon ads. From building awareness to driving sales. They document how Amazon ads helped HydroJug reach relevant audiences and scale from just a few thousand dollars to numbers you won't believe you'll want to see this one. Watch now at advertising.amazon.com slash rising-stars. That's advertising.amazon.com slash rising-stars. Did you feel a shift? Yes, I moved everything three centimeters to the left. It's very exciting. No, the shift in how business runs with AI. Rubrik helps make sure that shift actually works in your favor instead of against you. With Rubrik, you don't have to choose between moving fast and staying secure thanks to their agentic cyber resilience. One platform covering a company's data, its identities, and its AI systems. See what it looks like when security and AI operations work together at rubrik.com slash mbrick.com. That's r-u-b-r-i-k dot com slash m-b. My winner of the weekend is returning to the office because it's really not too bad if that office costs over $21 million a year. Castle Hook Partners and Under the Radar Hedge Fund is paying a king's ransom to rent out the top two floors of a new midtown Manhattan building. It comes out to just over $350 per square foot of space, making it the highest office rent ever paid in New York City. The decision to drop $20 million a year on rent gets even wilder, though, when you learn that Castle Hook Partners has 35 employees, meaning the fund is paying $600,000 a year in rent per employee. It all sounds pretty nuts, but in the finance world where talent is worth their weight in gold, portfolio managers are willing to splurge on office space and amenities as part of their recruiting pitch. The office is pretty sweet, too. It's 53,000 square feet of brand new construction located on Madison Avenue in Midtown, complete with wraparound terraces, private restaurants, and Central Park views. It's also hard to take fault with Castle Hook's decision-making process when the fund returned 50% last year and more than 60% the year before, per the Financial Times. Neil, I thought my rent was bad, but imagine cutting a check for $1.5 million a month. Hope the coffee machine works. I'm guessing they don't have a Keurig, Toby. I thought the backstory of this building was pretty interesting. So Related Companies, which is a huge real estate developer, bought this place in 2024, bought the space, and they were deciding what to do with it. And you would think, let's do an apartment because who's going back to the office? So that was their first thought. But then Jeff Blows, the CEO, told the Financial Times, actually, there's a real premium that exists for new, properly amenitized, high-end office with incredible views, which say incredible views are one of the big selling points here. So they decided to build an office in New York City in 2026, and they are tapping into real demand here. The New York Post called it going from what we thought was a doom loop to a boom loop. Manhattan has 450 million square feet of offices. They are now more full than before the pandemic, especially, especially on the high-end. Cushman and Wakefield said that leasing property in the luxury market was up almost 50% from the previous year, highest level since 2019. One broker told the Post, forget the pandemic. We haven't seen a market so tight for premium floors since before 9-11. Yeah. Two, that what used to be a very aspirational charging per square foot is the new normal. Five years ago, $200 per square foot was considered insane among a lot of people. But now it's kind of normal. I mean, they just rented something for $350 per square foot. And the number of Manhattan leases charging at least $100 per square foot hit an all-time high in 2025. The one name that I kept hearing come up in this office conversation was JP Morgan. They kind of reset expectations for what an office in New York City could be. Remember, they spent over a billion dollars to bring their new headquarters to New York City. They have luxury restaurants in it. They have luxury shopping in it as well. And I think a lot of people took a step back and realized like, oh, if we make office space that is amazing, people will pay. It's a very bifurcated office market where the very tip-top spaces that have awesome amenities that are beautiful. And while located are selling out, maybe the lower, uh, you know, tier of building isn't selling out, but JP Morgan is kind of held up as this standard saying once they built it, then the, the possibilities for other people were endless. Yeah. I mean, if you are thinking of, if you're a hedge fund and you're competing for talent with JP Morgan, which is built, you know, they have 19 restaurants in this building or you're for another boutique boutique hedge fund where you're trying to convince some person who's making five to $10 million to come over to your place. Because they, you know, just have a few dozen employees. So every, you know, one trader could really matter. You need to have the best of the best. And so you're going to pay up for that. Imagine that you're making $500,000 a year and you realize that your employer is spending more money on your office space than you yourself. That, that is just a wild, you know, arithmetic there that apparently makes sense for castle hook. It's Monday. So here's what you need to know to stay ahead in the week ahead. The Supreme court returns for its fall term today with a doozy. The most consequential climate change case in years in it, Boulder, Colorado is trying to sue energy giants, Exxon mobile and Suncor energy to hold them accountable for adverse weather events like extreme heat and increased wildfires allegedly caused by their release of planet warming greenhouse gases. If Boulder succeeds in getting approval to make their case, it would give a boost to dozens of other similar suits around the country, right? Boulder can become a roadmap, but it is that approval that is on, uh, up for debate here. This is not a judgment about whether these cases. We'll succeed at Jonathan Adler, a law professor at William and Mary said it's a judgment about whether these folks get to make their case, but you are right that it could open the floodgates against these energy companies. The biggest takeover in Hollywood history will cross the finish line tomorrow when Paramount and Warner brothers discovery are expected to close their deal. The new entertainment behemoth known as sky dance will combine assets like HBO max and Paramount plus CBS and CNN game of Thrones and Yellowstone all under one roof, the roof of David Ellison, who at 43 is now one of the most powerful media figures in the world. Toby, so much backlash to this deal. So many question marks. It's going to be fascinating to see how it plays out. We get to see if big actually means better in Hollywood. The merger might end up looking like the easy part, even though it's been not so easy because Ellison now has to figure out what stays, what goes to Paramount plus and HBO max coexist together. Are we going to make digger too? Exactly. How are you going to integrate these two pretty iconic companies without damaging? Some of the IP and the brands that you just paid for. So it was a roller coaster to get to this point, but it is going to be an even crazier one, uh, to go forward from it. The holiday shopping season has kicked off. Well, if Amazon has any say the company is rolling out, it's prime big deal days, Tuesday and Wednesday, hoping you'll get a jumpstart on snagging gifts with sales for prime members. We always do Rex for you guys on Wednesdays, but if you guys want to return the favor here, if you have something you bought off Amazon recently in the past that you actually liked, it can be. Send us an email or DM or comment. I actually am curious. Maybe, maybe that'll be our rec for this week. We'll just go through and find the best deals though. I would, I will say maybe the better public service we can do is saying actually this thing that you're seeing that they say is on sale actually was that price just a few months ago because there's a whole lot of manipulation going on. All right. Finally in sports, it's the thick of the playoff run for women's basketball and MLB and the WNBA semifinals. The Liberty are taking on the dream while the aces face the Valkyrie. Meanwhile, in baseball, the division series is underway in the NL. It's the Braves versus the Dodgers and Brewers versus the Padres and the AL. The Yankees are playing the Rays and White Sox face the guardians and in fantasy football across four leagues. Toby Howell is exactly 500, which should be a sign that I'm probably in three too many leagues right there. I think so. What have you been watching baseball at all? Cause the Brewers game yesterday was nuts. They had a walk off hit. It was a full, not a full count, but there was two strikes, two outs, bases loaded in front of their home crowd. And you're going to see that. You're a Milwaukee guy. You should, you should be the Brewers. I saw, uh, they hit the ceiling. That was the one thing that was the previous game before there was supposed to be a home run to, you know, change the tenor of the game in the eighth inning. And it hit the roof of Milwaukee ballpark. So one team got a big break, but if you're looking for a Cinderella team or want a team to root for, I think it has to be the White Sox because the White Sox were the worst team in baseball for many, many years. And all of a sudden there's Pope Leo Pope from Chicago has been a lifelong. White Sox fan. And he sort of blessed this team and they're on a Cinderella run. So if you want to root for a team that has been blessed by, you know, a religious leader for 1 billion people, then the White Sox might be your choice. All right. That is all the time we have. Thanks for starting your morning with us and have a wonderful start to the week to share your thoughts on the episode or anything else. Send an email to morning brew daily at morning brew.com or DM us on Instagram at MB daily show. Let's roll the credits. Emily Milliron is our supervising producer. Raymond Liu is our senior producer. Our producer is Olivia Graham and our associate producer is Olivia Lake. Technical direction by Nina Miller. Hair and makeup decided to give Toby a mullet. Literally, you look like an Australian. I hope people, I hope we post it on social media or people look at YouTube because it is remarkable. Our show is a production of Morning Brew. Great show that Neil. Let's run it back tomorrow. Contentful in partnership with the Atlantic released their latest report that maps out the five questions marketing leaders need to answer to succeed in the agentic web era. The report helps marketing leaders figure out what they need to decide when it comes to defining AI's role within their team, the risk of deferral if no one makes a call, what success looks like, and the review cadence needed to stay on top. To see all the findings, go to contentful.com slash morning brew.