Economics

Summary

A report by the Institute and Faculty of Actuaries (IFoA) and the University of Exeter warns that climate change could slash global GDP by 50% between 2070 and 2090 due to catastrophic events like fires, floods, and ecosystem collapse.

The study criticizes current economic models for underestimating risks such as tipping points and societal instability.

It calls for immediate action to decarbonize, restore nature, and adopt a "planetary solvency" approach to policymaking.

Without intervention, global heating could lead to billions of deaths, failed states, and long-term economic devastation.

Summary

The FTC, joined by Illinois and Minnesota, has sued Deere & Company, alleging the agricultural equipment giant monopolizes repair services by restricting access to necessary tools.

This forces farmers to rely on authorized dealers, raising repair costs and causing delays.

The FTC argues Deere's practices harm farmers by limiting competition and driving up expenses through Deere-branded parts.

The lawsuit seeks to ensure farmers and independent shops have access to repair resources.

Filed in Biden’s final days, its future under Trump’s administration remains uncertain.

Summary

Donald Trump’s renewed threats of steep tariffs on Chinese imports are driving manufacturing operations to Mexico instead of back to the U.S., undermining his goal to revive domestic production.

Companies are capitalizing on Mexico's tariff-free trade under the USMCA, low labor costs, and proximity to the U.S.

Chinese firms like Lingong Machinery and Hisense, alongside global corporations, are investing billions in Mexican manufacturing.

Critics argue this shift highlights the impracticality of reshoring to the U.S. due to high costs and workforce shortages, creating uncertainty for businesses.

Summary

The Consumer Financial Protection Bureau (CFPB) is suing Capital One for allegedly misleading customers about interest rates on its savings accounts, resulting in over $2 billion in lost interest.

The CFPB claims Capital One failed to inform "360 Savings" account holders about the higher-yield "360 Performance Savings" account, freezing the former's rate at 0.3% while the latter rose to 4.35% by 2024.

Capital One denies the allegations, asserting transparency and vowing to defend itself.

The lawsuit highlights concerns over deceptive banking practices and customer trust.

Summary

As Donald Trump's second inauguration nears, Americans are rushing to buy goods like electronics, appliances, construction materials, and shelf-stable foods ahead of his proposed tariffs on imports.

The tariffs, including a 25% increase on Mexican and Canadian imports and 10% on Chinese goods, are expected to raise prices significantly.

Nearly half of Americans surveyed have altered purchasing plans to avoid higher costs.

Economists warn the tariffs could raise household expenses by $1,900 to $7,600 annually. Despite inflation concerns, Trump maintains tariffs "cost Americans nothing."

Summary

A study in Nature Human Behaviour finds that children born into poverty in the U.S. are significantly more likely to remain poor as adults compared to peers in Denmark, Germany, the U.K., or Australia.

While childhood factors like education and neighborhoods matter, the study identifies limited government support for adults as the key driver of poverty persistence in the U.S.

Unlike peer nations with robust tax-and-transfer systems, the U.S. provides fewer benefits to poor adults, perpetuating poverty.

Policy changes, such as expanded welfare programs, could significantly reduce intergenerational poverty.

Non-paywall link

Summary

Consumers may face a 20% rise in prices for staples like food, drink, electronics, and chemicals in 2025 due to global supply chain disruptions, Middle East tensions, and rising shipping costs, according to the Chartered Institute of Procurement and Supply (CIPS).

Threatened U.S. tariffs under a Trump administration could further inflate costs, with proposed 10%-60% levies on imports potentially sparking retaliation.

Re-routing shipping around conflict zones and U.S. port worker strikes add to delays and expenses.

Experts warn these issues will disproportionately burden consumers unless mitigated effectively.

Summary

Five years after Brexit, its promises of sovereignty, economic gains, and reduced migration remain unfulfilled. While Brexit offers regulatory flexibility, its overall impacts are largely negative.

The UK economy has suffered a £100bn annual output loss, with GDP 4% smaller than it would have been without Brexit.

Trade barriers have reduced exports, particularly to the EU, with small businesses and sectors like agriculture and fishing hit hardest.

Migration has surged to record levels, but net EU migration has turned negative.

Public dissatisfaction is high, with 59% believing Brexit has gone poorly.

Summary

Small businesses are struggling with rising credit card swipe fees, which now average 2.26% per transaction and cost U.S. merchants $172 billion in 2023, a record high.

As shoppers increasingly use cards over cash, businesses face growing costs, with some passing fees to customers through higher prices or convenience charges.

Visa recently raised certain fees, sparking criticism from lawmakers and advocacy groups pushing for transparency and competition.

The bipartisan Credit Card Competition Act seeks to address swipe fee issues but remains stalled in Congress, leaving the conflict unresolved for now.

Summary

38% of Gen Z adults, under 27, report experiencing a "midlife crisis" due to financial instability, mental health struggles, and career uncertainty.

Financial stress, cited by 30%, stems from rising living costs, stagnant wages, and unattainable milestones like homeownership.

Mental health challenges and career difficulties further compound the crisis. Many turn to "doom-spending" on non-essentials for escapism, worsening financial pressures.

Experts urge older generations to provide practical financial guidance to empower Gen Z and help them achieve long-term stability and growth.

Summary

Minimum wage increases in 21 states and 48 localities starting January 2025 will benefit 9.2 million workers, adding $5.7 billion in wages, according to the Economic Policy Institute (EPI).

States like California are adjusting for inflation, while others, such as Nebraska and Montana, implemented voter-approved hikes. Women, Black, and Hispanic workers will see the most impact.

Despite the raises, many wages still lag behind rising costs of living, with EPI citing a "true living wage" as $20–$26/hour.

Meanwhile, the federal minimum wage remains unchanged at $7.25 since 2009.

Summary

The Biden Administration, through the Consumer Financial Protection Bureau (CFPB), is capping overdraft fees at $5, down from $35, starting Oct. 1, 2025.

The move, targeting “junk fees,” could save U.S. consumers $5 billion annually.

The CFPB suggests banks adopt cost-based fees or offer overdraft credit lines while disclosing interest rates.

Industry groups oppose the rule, and its future is uncertain under a Republican-controlled Congress and the incoming Trump administration.

Summary

US credit card defaults have surged to their highest level since 2010, with $46 billion in loans written off in the first nine months of 2024—a 50% increase from the prior year.

Rising inflation and elevated interest rates have strained low-income households, whose savings rates have dropped to zero.

Total credit card debt surpassed $1 trillion in 2023, with Americans paying $170 billion in interest over the past year.

Delinquency rates remain high, signaling further financial stress, as hopes for significant interest rate cuts in 2025 dim.

Summary

Long COVID significantly impacts the U.S. workforce and economy, with millions unable to return to work months after infection.

A Yale study found 14% of Long COVID patients were unemployed three months post-infection, often due to persistent symptoms.

Globally, Long COVID costs an estimated $1 trillion annually, with U.S. economic losses exceeding $3.7 trillion.

It strains healthcare systems and increases demand for disability benefits. Experts urge investments in Long COVID research, treatment, and prevention, emphasizing vaccination as the most effective tool to mitigate its health and economic toll.

Summary

Nordstrom will be taken private in a $6.25 billion deal by Nordstrom family members and a Mexican retail group.

Shareholders will receive $24.25 per share, a 42% premium from March 18 reports of the deal.

The Nordstrom board unanimously approved the transaction. Once finalized, the Nordstrom family will hold a majority ownership stake in the company.

The deal marks a major shift for the century-old department store, ensuring continued family control.

Summary

Honda, Nissan, and Mitsubishi have confirmed merger talks to form the world’s third-largest carmaker by annual sales, aiming to tackle challenges from Chinese competition and the shift to electric vehicles.

The proposed merger, through a joint holding company, seeks to combine resources as Japan’s automakers struggle with declining sales and costly EV transitions, lagging behind leaders like Toyota and Chinese rivals BYD.

Nissan's former CEO Carlos Ghosn criticized the plan, citing overlapping operations, while executives called it a pivotal move amid unprecedented industry changes. Mitsubishi will decide on joining by January's end.

KEY POINTS

• The PCE price index, the Fed’s preferred inflation gauge, showed an increase of just 0.1% from October and a 2.4% annual rate, both below expectations.
• Excluding food and energy, core PCE also increased 0.1% monthly and was 2.8% higher from a year ago, with both readings being 0.1 percentage point below the forecast.
• Personal income rose 0.3%, short of the 0.4% estimate. Personal expenditures increased 0.4%, one-tenth of a percentage point below the forecast.

Summary

More than 11,000 Starbucks baristas, represented by Workers United, will begin a five-day strike on Friday, demanding better pay, staffing, and schedules.

Starting in Los Angeles, Chicago, and Seattle, the action is expected to spread to hundreds of stores by Christmas Eve if no agreement is reached.

Starbucks highlighted its $18/hour average pay and benefits, valued at $30/hour for part-time workers.

The union criticized CEO pay disparities and accused the company of breaking promises to workers. The strike coincides with Amazon worker protests by the Teamsters union.

Summary

The Teamsters launched the largest strike against Amazon in U.S. history on Thursday, targeting facilities nationwide, including in New York, Atlanta, and California.

The union accuses Amazon of refusing to negotiate with unionized workers and blames the company’s “insatiable greed” for stalled talks.

Nearly 10,000 Amazon workers have joined the Teamsters, but Amazon disputes this, alleging the union has coerced workers and misled the public.

The strike escalates tensions as the National Labor Relations Board has certified some union efforts, which Amazon continues to challenge.

Summary

US stocks fell sharply after the Federal Reserve cut interest rates for the third time but signaled fewer cuts in 2025 due to persistent inflation.

The Fed reduced its key rate to 4.25%-4.5%, citing progress on price stabilization but warned of slower action ahead.

Markets reacted negatively, with the Dow, S&P 500, and Nasdaq all posting significant declines.

Analysts raised concerns about inflationary risks tied to rate cuts and incoming Trump administration policies, such as tax cuts and tariffs.

Forecasts now project higher inflation and borrowing costs into 2025.

Summary

Honda and Nissan are reportedly in merger talks to form a single holding company, potentially including Mitsubishi Motors, to create a major auto group.

This move, aimed at competing with Tesla and Chinese EV leaders like BYD, comes amid pressure on Japanese automakers to catch up in the EV market.

Both companies previously announced plans to deepen collaboration on EVs, with Honda committing $65 billion to EV development by 2030.

Analysts note Japan's focus on hybrids has hindered progress in the growing global EV sector, where demand is rising despite challenges.