Mass. business confidence dips back into pessimism

LOCAL

Employer business confidence in Massachusetts returned to pessimistic territory in March, with surging energy costs and the war in Iran. The drop in the Associated Industries of Massachusetts Business Confidence Index came as the US added a surprisingly strong 178,000 new jobs last month, according to the US Bureau of Labor Statistics report on Friday. The unemployment rate stayed relatively stable at 4.3 percent. “The US economy is still growing, albeit at a moderate pace,” said Sara Johnson, chair of the AIM Board of Economic Advisors, in a statement, noting the steady unemployment rate. “We continue to see strong gains in labor productivity and company earnings,” she continued. “Meanwhile, federal tax policies are encouraging business investment.” The AIM Index is a survey of more than 140 Massachusetts employers that has run since 1991. It is calculated on a 100-point scale, with 50 as neutral; a reading above 50 is positive, while below 50 is negative. The state’s March rating was 47, down from 52 in February. Companies that participated in the survey shared their views on the split-screen economy, with one saying the “spiking energy costs due to the war with Iran will increase costs for us across the board.” In contrast, another said, “Rebounding demand is bumpy but strong.” Olena Staveley-O’Carroll, an associate professor of economics at the College of the Holy Cross, said employer confidence has steadily slipped over the past year, ever since the Trump administration announced tariffs that the Supreme Court later ruled unconstitutional. “We’re seeing employers grow more cautious, though not overly pessimistic,” Staveley-O’Carroll said. “The economy has remained resilient so far, but rising geopolitical tensions, volatile trade policy, a slowing labor market, and the risk of tariff and energy price pass-through to inflation are giving them pause.” — BETH TREFFEISEN, BOSTON.COM

REAL ESTATE

San Francisco’s median house price jumped to a record $2.15 million in March, up 18 percent from a year earlier as wealth generated by artificial intelligence startups flooded the city, according to brokerage Compass Inc. Condo prices also surged, rising 27 percent to $1.36 million, Compass said in a report. That was just below the $1.375 million peak of April 2022. “The economic changes created by the Iran war — such as rising interest rates and financial market volatility —have not affected the extremely heated market dynamics in San Francisco, which are being fueled by the new employment and wealth generated by the AI startup boom,” Compass chief market analyst Patrick Carlisle said in the report. AI companies such as OpenAI and Anthropic have created a new gold rush in San Francisco and employees are pouring their wealth into homes in the compact city, which has little new housing development. At least 22 houses sold for more than $5 million in March, a one-month record, Compass said. In addition, 24 condo sales topped $3 million — also an all-time monthly sales high. — BLOOMBERG NEWS

ENTERTAINMENT

AMC Entertainment Holdings Inc. saw a surge in ticket sales and concessions over the long Easter weekend, buoyed by The Super Mario Galaxy Movie. A sequel to the 2023 hit The Super Mario Bros. Movie, the latest version grossed more than $370 million at the box office, kicking off a spring and summer loaded with blockbusters. AMC said more than 6 million moviegoers attended AMC theaters in the US or Odeon cinemas internationally from April 1 through April 5. That helped the cinema chain post the most combined admissions and food and beverage revenue over the long holiday weekend in its 106-year history. Merchandise for the animated movie, including collectibles such as the Yoshi popcorn bucket, was “a major hit” with moviegoers, according to AMC. The resulting sales trailed only the AMC-distributed Taylor Swift: The Eras Tour concert film in October 2023. AMC shares jumped 12.5 percent on Monday. They were down 28 percent this year through Thursday, before markets closed for the long weekend. — BLOOMBERG NEWS

TECH

Samsung is saying goodbye to its namesake texting app. According to an end of service announcement published on the tech giant’s US support website, Samsung Messages will be discontinued in July. Impacted owners of Samsung smartphones and other gadgets are being asked to switch to Google Messages in the meantime, “to maintain a consistent messaging experience on Android.” All Samsung Galaxy phones run on Google’s Android operating system. To switch to Google Messages, Samsung’s website gives users instructions to download the app from the Play Store, if not already on their phone, and set it as the default. Some people may also receive an in-app notification to guide them through the process. Samsung says switching to Google Messages will give users access to updates like the latest artificial intelligence features from Google’s Gemini — which includes an experimental feature called “Remix” to generate images during conversations and AI-powered reply suggestions — and the ability to share higher quality photos between Android and Apple iOS devices through RCS-enabled messages. Users of older Android operating systems (dating back to Android 11 or older) will not be impacted by the end of Samsung Messages, the company noted. To check what Android OS you have on a Samsung device, open the settings app, click on “software information,” and scroll to “Android version.” — ASSOCIATED PRESS

ECONOMY

A top Federal Reserve official said Monday that an interest rate hike could be appropriate if inflation remains persistently above the central bank’s 2 percent target, the latest sign that some policymakers are moving away from a bias toward reducing borrowing costs. Beth Hammack, president of the Federal Reserve Bank of Cleveland, said in an interview with The Associated Press that her general preference is for the Fed keep its benchmark interest rate unchanged “for quite some time.” And she also said the Fed might have to cut its rate if higher gas prices caused the economy to slow and unemployment to rise. But if inflation remained elevated, a rate hike could be needed, she said. “I can foresee scenarios where we would need to reduce rates … if the labor market deteriorates significantly,” Hammack said. “Or I could see where we might need to raise rates if inflation stays persistently above our target.” Hammack’s comments suggest a growing concern among at least some policymakers that inflation, which was elevated before the Iran war, may require rate hikes to tame further. Rate increases by the Fed would be a sharp shift from late last year, when the central bank cut its key rate three times. Rate hikes could lift borrowing costs for consumers and businesses, including for mortgages, auto loans, and credit cards. Other Fed officials have recently opened the door to rate hikes, including Austan Goolsbee, president of the Chicago Fed. And minutes of the Fed’s meeting in late January said that several of the 19 officials on the rate-setting committee supported altering the post-meeting statement to reflect the possibility of “upward adjustments” to rates. — ASSOCIATED PRESS

HEALTH CARE

The US Medicare program will pay private insurers 2.48 percent more in 2027, a meaningful improvement over the initial rates the agency proposed in January. The final policy from the Centers for Medicare and Medicaid Services influences how more than half a trillion dollars flow through private health plans sold by companies including UnitedHealth Group Inc., Humana Inc., and CVS Health Corp. Shares of the companies rose on the news in trading after US markets closed. The payment change is expected to mean $13 billion in additional payments to Medicare plans next year, CMS said. The preliminary rates in the agency’s January proposal disappointed Wall Street by holding payments close to flat for next year. Insurers called that untenable and lobbied for a bigger increase to cover rising medical expenses. — BLOOMBERG NEWS