Job report January 2024 - U.S. economy added 353,000 jobs in January, much better than expected

    The article I covered compared the Dow Jones projection for number of jobs created rate to the actual report. Dow Jones had projected that January would only have 185,000 jobs created. This amount would be similar to the bad months during last year such as March, July, and October. Fortunately for the United States economy, the amount of jobs created during January was 353,000. This is more than the last 11 months, which could indicate the economy is entering 2024 on solid ground. Around half of these jobs were created from the business industry (74,000), and health care industry (70,000). When this news came out, stocks were mixed. The Dow Jones Industrial Average dropped at the open, however, the S&P 500 and NASDAQ were both positive. 

    One thing I found interesting was that this news has made people assume that the Fed won't drop interest rates until at least March. This could cause the housing sector to struggle again at the start of 2024. Right now people aren't buying houses because of the high interest rates and if the Fed doesn't drop interest rates, it is likely the amount of houses bought will be even lower.

World Cup 2026 Impact on U.S Cities

 The World Cup is set to come to North America in 2026, and many U.S cities are preparing for a great impact on their economies. In a study done by The Boston Consulting Group (BCG), hosting the 2026 World Cup could add more than 40,000 jobs and more than $1 billion in incremental worker earnings across North America. The study further estimates that host cities will see $160 - $620 million in incremental economic activity. Host cities such as Seattle ($100 million), Philadelphia ($500 million), and Houston ($1 billion) are expecting huge economic impact.

    This is important for the economy for many different reasons. First, the World Cup will bring many new jobs in these cities.  There are also going to be people coming to the U.S from all around the world. This will increase consumption and spending. These people will also need to pay for places to eat and stay, which help the restaurant and hotel industry. With everything going on in the U.S during this time, expect the real GDP to increase and the country to see many economic benefits.

MEDIA Wall Street loves Disney’s kitchen-sink quarter, but Nelson Peltz says he isn’t backing down

 This article was very interesting, and we get a reaction from a CEO that we do not normally see. This article explains that after Disney acquired a large stake in Epic Games and their stock rose about 10% Iger (the CEO of Disney) called out one of his critics, Nelson Peltz, saying, “The last thing we need right now is to be distracted by an activist or activists that have a different agenda and don’t understand our company.” This is in response to Peltz being public about how he wanted Iger removed, and how he was mismanaging the company. It will be interesting to see how the stock price responds in the future, and if Iger will hold power or Peltz will get his way.

Microsoft Supersedes Apple as MVP of Public Companies

Apple has been the world's most valuable public company since 2011, but their reign came to an end as of Friday, January 5th when Microsoft took the top spot. Microsoft's market value has skyrocketed in the past year due to their increasing participation in the world of artificial intelligence. 

Apple dominated the technology sector with its iPhones and their products' connection to social media and the internet. Microsoft had not had a breakthrough development since Windows systems so cheif executive, Satya Nadella took a chance on A.I. and it proved to be the right choice. Generative artificial intellignece has very high potential economic value and could be a trillion dollar industry. While it causes controversy in the business world as to whether or not it wil disrupt jobs, Microsoft has taken generative A.I. and implemented it into their systems such as Excel and Outlook. 

Microsoft has contninued to push forward in developments of artificial intelligence and the results are just starting to show. While they move upward, Apple seems to be slwoing down. The iPhone has become less of a craze and Apple has lost traction in application sales. According to the article Mac and iPad sales have declined and Wall Street analysts believe that Apple's iPhone sales will be less than ideal this year. While Apple has made steps towards entering the A.I. industry, like the new Vision Pro headset, they are still failing to make any major moves to catapult themselves back up to the top spot. While the Vision Pro headset will be a new product for Apple, Wall Street analysts again have low hopes for a huge spike in sales for Apple. 

Link to Article

Paris 2024: Does hosting the Olympics boost the economy?

    It appears that the demand for hosting the Summer Olympic and Paralympic Games has declined. I was curious if this new trend is related to the economic impact of this biennial global event. 

    The article explains that the Olympic and Paralympic Games are likely to have a negative economic impact on France. One reason is the expensive, specialized infrastructure needed to host the games. This infrastructure will either need to be repurposed afterwards or maintained for far less use. Both of these options add more expenses on top of the original cost of the infrastructure. Another reason is the lack of significant monetary support from the International Olympic Committee (IOC). The IOC has sole rights to broadcasting regulations for the games but does not share any revenue from broadcasting deals with the host country. Additionally, the games may be negative for the economy of France because of the negative impact on citizens, including workers. The Paris 2024 Organizing Committee claims that it will bring more jobs and activity to Paris, however, this statement is misleading. Many jobs that will be involved in the Olympic Games already exist, such as hotel staff, and wages will likely remain the same during the games. Many of the businesses that will benefit from the tourism activity brought to Paris by the games are internationally owned such as car rentals or hotels, so France is not benefiting. Additionally, many workers for the games are volunteers from the host country, so French citizens are actually losing money by volunteering as they must lodge near the site, take off work, and more. The disruption of daily life caused by the Olympics will likely also hurt the economy. Metro ticket prices will nearly double for the week of the games and citizens have already been advised to work from home during the games. Furthermore, even if the games do not negatively impact France's economy, many of the tourists arriving in Paris for the Olympic games are simply replacing other tourists who would have come due to Paris's status as the most visited capital city. Essentially, at best, the games will have a negligible effect on France's economy, which does not appear to be worth the toll put on France's citizens and infrastructure. 

https://www.euronews.com/business/2024/01/31/paris-2024-does-hosting-the-olympics-boost-the-economy

The False Promise of Friendshoring

 Link: https://www.economist.com/finance-and-economics/2024/01/25/the-false-promise-of-friendshoring

This article published by the Economist details the effects and shifts seen in the geopolitical world in terms of economics. The changes are related to both geopolitical forces and geographic ones. The term friendshoring refers to the growing trade practice where countries’ networks are focused on connecting mainly with political and economic allies. 

The rise of friendshoring is an attempt to reduce geopolitical dangers but it also increases other supply-chain risks such as limiting the amount of trading partners and isn’t realistic for a lot of countries. When trade occurs between ideological rivals it is often out of necessity or when countries find themselves in the middle of the geopolitical spectrum they disregard the practice altogether. Furthermore, China can’t engage with friendshoring due to there not being enough big economies in the same geopolitical orbit.

The problem with friendshoring, if it continues to rise (which is unlikely) it would limit trade between countries that align themselves freely or non-American in terms of the scale. This is due in part to China embracing them willingly as trade partners.

Gas Prices and the hope for the continued decrease.

     The crazy incline in inflation that was seen by the US during the aftermath of COVID-19 was a very hard thing to deal with. The place where most people probably saw inflation the worst was in the gas prices. In June of 2022, gas was at an all-time high reaching over $5 a gallon, but we have seen a complete 180 when it comes to inflation and the now dropping of gas prices. The experts say that gas should continue getting cheaper and cheaper because of the weather patterns giving us an increasingly warmer winter thus cutting the demand for heat. Now, the national average for gas prices at the moment is sitting around $3.13, with over half the country having an average of under $3 a gallon. The experts believe that even the national average may soon drop under $3 as well.  As an everyday driver, I am ecstatic about this, especially being a young adult with minimal income. Cheaper gas will cut down the majority of the spending in my life, allowing me to put money towards other things/activities.

https://www.usatoday.com/story/money/economy/2023/12/12/why-are-gas-prices-going-down/71898654007/ 

Economists Against the Draft

    Reading about this subject was really interesting especially because of everything that is happening in the world right now. The main question that popped up was whether or not women should be in the draft. This eventually led into a conversation about the draft in general because it essentially removes people from their previously more profitable work positions. This impact would be even greater if the draft included women because they are more heavily involved in the workforce now more than ever. If men and women were required to enter combat, this would drastically decrease America’s workforce, and overall productivity for the country. This idea was what economists used to convince Nixon to end the draft in 1973, saying that the “market for soldiers should work like any other labor market.” As of right now, the registration system is still in effect, in order to serve as a backup plan. Women are not required to register because of a decree made by The Supreme Court in 1981 to abide by the military's decision on letting women into combat positions. However, times have changed and the military now allows women to be in combat, so if there was need for change it is possible that women will be required to register for the draft. I was interested in the effects of having women required to register for the draft, and in doing more research I found that as of 2013 they removed the military’s ban on women serving in combat. In World War II nearly 350,000 American women served in uniform, but they only took up non-combat roles in order to free up more men to fight. Even in 1994, the government changed some rules in order to allow women to serve in all positions in the military except for direct combat roles. I was unaware of the fact that women were not allowed in combat until recently, and I find the effects that a draft has on the economy to be really interesting.

Economists Against The Draft

Americans Unhappy with the Economy

 The US economy is doing well in many statistical aspects, yet majority of Americans say they unhappy with the current state of our economy. Unemployment is at a five decade low, wages are now outpacing inflation, GDP is expanding, and the stock market made a rebound from the terrible year it had prior. So why are Americans still unhappy? According to the article there are 3 underlying reason that the categories listed above don't show. The first is the financial distress that many Americans are still under due to the setbacks of the pandemic. Basic essentials are still 25% higher on average than before the pandemics, which has caused more and more credit card debt, which has put many Americans under distress. The second is Americans are struggling to pay their bills. This has much to due with the same reasons listed before, which is mainly people are still struggling to recover from hits during the pandemic. Finally, housing is unaffordable. The average household income needed to pay for a house has gone up drastically, and is a major factor for why many Americans, (especially those in the housing market) are unhappy with the economy.

Here's why Americans are so unhappy with the economy ...CBS Newshttps://www.cbsnews.com › MoneyWatch

China's Market Challenges

China's financial market is undergoing a challenging phase. Investors are re-evaluating their expectations regarding the Chinese government's intervention in the market. The country faces a complex scenario with regulatory pressures on the financial sector and a lack of significant governmental stimulus, leading to a cautious investment atmosphere. There is a sense of rethinking the investment strategies in China, considering the long-term restructuring of its property sector and the need for more selective investments in various sectors. This sentiment is reflected in the shifting focus of investors from China to other emerging or established markets​.

link to article