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McKinsey has highlighted a growing paradox in enterprise AI spending: models are becoming significantly cheaper for a given level of capability, but companies’ overall AI bills continue to rise as they use the technology for increasingly complex and intensive tasks. The firm said agentic AI is particularly difficult to budget because agents can take different approaches to the same task, with execution costs varying by as much as 30 times between runs. McKinsey recommends that companies assess AI economics at the task level, considering execution costs, success rates, and the human time required to verify outputs, rather than focusing solely on token prices. To manage spending, businesses should improve visibility into AI usage, optimize workflows by matching models to tasks and reducing unnecessary activity, and strengthen sourcing discipline. However, McKinsey cautioned against indiscriminate cost-cutting, arguing that companies should instead direct AI investment toward areas generating the strongest returns.

 

Fortune

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Deloitte has reported record annual revenue of $74.5bn for the 12 months to May 31st, up 3.8% in constant currency terms, compared with 4.8% growth the previous year. Growth was constrained by its consulting businesses, particularly technology and transformation, where revenue increased 2.5%, down from 4.7% a year earlier, while strategy, risk, and transactions advisory grew 4.4%, compared with 5.5% previously. Deloitte’s audit and tax businesses both accelerated and grew faster than consulting, as AI continues to create opportunities and uncertainty across the sector. The firm has expanded its global workforce from about 470,000 in May 2025 to almost 500,000 and plans to invest $3bn by the end of 2030 in modernizing its operations and developing technology products and services for clients. In U.S. dollar terms, global revenue increased 5.7%, with Asia Pacific the fastest-growing region after adjusting for currency movements.

 

Bloomberg Tax

Financial Times

City AM

EY has reported a significant improvement in U.S. audit quality, with its PCAOB inspection findings rate falling to a record-low 5% in 2025 from 28% in 2024. Three of the 64 audits reviewed in 2025 were included in Part I.A of the PCAOB report because of significant deficiencies, compared with 18 of 64 the previous year, and EY expects to maintain a 5% findings rate in the 2026 inspection report. The firm attributed the improvement to a multiyear transformation and $1bn investment in technology and talent, including integrating AI tools into its global EY Canvas audit platform and completing 69% of public company audit hours before year-end. EY said all of its U.S. audit and technology risk professionals now have access to agentic AI tools, with the firm expecting the technology to support end-to-end audit activities by 2028.

 

Accounting Today

The Labor Department reported on Thursday that new unemployment benefit claims fell to 197,000 in the seven days to September 19th, the lowest level since mid-July and down from a revised 198,000 the previous week, indicating that layoffs remain historically low. The four-week average declined to 202,250 from 204,000, while continuing claims, reported with a one-week lag, increased 2,000 to a seasonally-adjusted 1.719m. Economist Eliza Winger said that the latest data points to "stable labor-market conditions," adding: "The few industries that are shedding workers appear focused on efficiency gains, while we’ve yet to see signs that higher interest rates are driving layoffs, even in the most rate-sensitive sectors of the economy.”

 

Bloomberg

PBS News

Reuters

Wall Street Journal

U.S. new-home sales rose 6.4% in August to an annualized rate of 684,000, according to the Commerce Department, the fastest pace this year and above economists’ expectations of 616,000, as builders used price reductions and incentives to support demand. The median sales price fell 5.8% from a year earlier to $393,700, the largest annual decline since July 2025, alongside increased sales of homes priced below $300,000. New-home inventory remained elevated at 483,000 properties, equivalent to 8.5 months of supply at the current sales pace. Sales increased nearly 7% in the South and almost 85% in the Midwest, but declined in the West and Northeast. Despite August’s improvement, mortgage rates have since risen above 7%, while home prices remain about 20% higher than before the pandemic.

 

Bloomberg

Reuters

The Fifth Circuit's recent ruling in Sirius II, K Alain LLLP v. Commissioner, has redefined the status of limited partners, moving towards a requirement of passive involvement. The court stated: "a limited partner is a partner who plays no significant role in managing or running a business." This contrasts with the IRS and Tax Court's focus on whether a partner is a passive investor. The decision emphasizes the need for a functional inquiry into a partner's management authority, particularly in Louisiana, Mississippi, and Texas. Taxpayers previously benefiting from a more lenient interpretation in Sirius I must now navigate a more complex analysis regarding their management roles. Mark Luscombe, JD, LLM, a principal federal tax analyst, highlights the implications of this shift for limited partnerships and possibly limited liability companies.

 

Accounting Today

Starbucks plans to close 250 stores across North America this week, marking its second major round of closures under chair and chief executive Brian Niccol. The company said the affected locations are either failing to deliver acceptable financial results or cannot provide the customer and employee experience Starbucks is targeting, although it did not identify specific stores or disclose how many are in the U.S. The move follows the closure of 627 stores across North America and Europe, and the elimination of 900 non-retail jobs, last September. Starbucks is simultaneously investing in its remaining locations, with 1,500 North American stores expected to be retrofitted by the end of its fiscal year on September 30th. The company said it remains committed to expanding its North American store base and will seek to transfer affected employees to other locations where possible, providing severance when alternative positions are unavailable.

 

USA Today

Los Angeles Times

New York Times

Wall Street Journal

A bipartisan group of lawmakers has introduced the Motion Picture, Television and Entertainment Revitalization Act, which would establish an uncapped 20% federal tax credit on U.S. labor costs for eligible film and television productions, including post-production and visual effects work. The credit could rise to 30% through additional incentives for independent productions and projects filming in certain rural opportunity zones or federally declared disaster areas, while productions operating across multiple states could also qualify for an uplift. Eligible films, television shows, and pilots would generally need to cost more than $1 million and complete at least 75% of principal filming days in the U.S. Hollywood unions and industry groups have backed the proposal, arguing that it could help counter the movement of production and jobs overseas. The bill’s supporters are seeking to make the U.S. more competitive with countries offering extensive production incentives.

 

Variety

The Hollywood Reporter

Los Angeles Times

New York Times

Microsoft is using artificial intelligence (AI) to rethink its organizational structure, workforce development, and company culture, with President Brad Smith arguing that the technology could drive a resurgence of generalists who use AI to tackle a broader range of problems. The company is rotating employees through more parts of the business, forming smaller teams, and seeking to give workers greater autonomy while investing in their skills. Microsoft is also flattening some organizational structures, with Copilot executive Charles Lamanna reducing management layers in his organization from about 10 or 11 to five and shifting managers toward “player-coach” roles overseeing larger teams. The changes are intended to accelerate development, with a nine-person core team launching the initial version of Copilot Cowork in 35 days, compared with the several years and hundreds of employees required for Copilot Studio to reach a similar scale.

 

Wall Street Journal

Lawmakers and Food and Drug Administration (FDA) officials are said to be concerned about American pharmaceutical companies' increasing reliance on conducting early clinical trials in China, observing a lack of transparency and a need to ensure medical innovations are kept on shore. “We obviously have a relationship with China, we're going to continue to have a relationship with China, but the way we've conducted business with China has been really on their terms,” said John Moolenaar, chairman of the House Select Committee on China, during an event organized by U.S. biopharmaceutical publication Endpoints News. Such rhetoric could prompt firms to “double click a lot more when evaluating China-origin target assets,” said Xianfeng Morgan Xu, a partner at U.S. law firm Foley Hoag.

 

South China Morning Post

Canadian retail spending is expected to recover in August after falling for the first time in seven months. Statistics Canada’s advance estimate points to a 1.3% rise in August retail sales, following a 0.7% decline in July, slightly better than economists had expected. July sales volumes fell by a sharper 1.1%. The July weakness was broad-based, with sales declining in eight of nine subsectors. General merchandise retailers recorded the largest drop, down 1.9%, while motor vehicle and parts dealers also saw lower sales. Gasoline sales fell 0.9% by value and 3.5% by volume, suggesting elevated fuel prices prompted consumers to reduce consumption. Building materials and gardening supplies were the only category to record an increase. Regionally, retail sales declined in five provinces. Ontario fell 2%, including a 4.7% drop in Toronto, while Alberta posted the strongest increase at 1.4%.

 

Financial Post

Bloomberg

Wall Street Journal

Germany's IG Metall union wants a 5% ‌pay increase for 3.7 million workers in the engineering sector ahead of collective bargaining talks. "Of course, we see ​that some companies are under considerable pressure ⁠and that this will continue. But as IG ​Metall, we do not accept deterioration in wages and ​employment rights," IG Metall President Christiane Benner said, adding "We need a vision that goes beyond job cuts, relocations, and ​plant closures." Reuters notes that widespread layoffs are occurring in German industry, notably in the auto sector.

 

Reuters