Economics in the News – Dec. 19-25, 2022
Economics impacts our lives every day. Below are some of the top storylines from this past week related to economics.
o Millions of Americans endured bone-chilling temperatures, blizzard conditions, power outages and cancelled or altered holiday gatherings due to an unprecedented Arctic blast. A bomb cyclone developed near the Great Lakes, stirring up blizzard conditions. The blast sent temperatures plummeting across the country, with 60 percent of the United States population under a winter storm advisory or warning.
More than 1,700 domestic and international flights have been cancelled due to the extreme weather, according to tracking site FlightAware. Snowfall in Buffalo, N.Y. was measured at 43 inches at Buffalo Niagara International Airport, as of Sunday, Dec. 25, forcing officials to shut the airport down through Tuesday morning. Millions of Americans from coast-to-coast lost power, impacting 1.7 million Americans. The storm has killed at least 34 people. [Associated Press]
o Holiday sales rose 7.6 percent despite record-high inflation, surpassing the 7.1 percent expected growth by Mastercard SpendingPulse. The figure, released on Monday, do not account for the automotive industry, and is not adjusted for inflation. Online sales climbed 10.6 percent from a year ago, while in-person shopping saw a 6.8 percent increase in sales.
Some of the increase accounts for the impact of inflation. Last year, shoppers were less price conscience and shopped earlier because of supply shortages. This year, consumers waited for deals and stores expected more procrastinators in the last few days leading up to Christmas. [Associated Press]
o Escalating electricity prices are making driving electric vehicles (EV’s) more expensive across Europe. Electricity prices have soared since Russia invaded Ukraine, with the higher costs threatening Europe’s transition to electric vehicles.
Tesla raised supercharger prices in Germany on multiple occasions this year, to 0.71 euros per kilowatt. That price would cost €18.46 for a sufficient charge to drive 100 miles. German drivers would pay €18.31 for gasoline to drive 100 miles in a 4-door Honda Civic. Year-over-year sales of electric cars across the European Union were up 22 percent in the third quarter of 2022, compared to 2021. [The Wall Street Journal]
o Beginning next football season, the National Football League’s out-of-market subscription package will be available on YouTube. The deal ends DirecTV’s 30-year run with the coveted Sunday Ticket package. Alphabet, which owns YouTube and Google, paid a reported $2.5 billion to acquire the rights of the Sunday Ticket package on a seven-year deal that will give Google time to build its subscriber base. That is reportedly an estimated $1 billion more than DirecTV paid in its most recent deal.
The games will be available as an add-on for an additional fee to YouTube TV’s $64.99 streaming package, or available for purchase separately through YouTube Primetime Channels. The deal expands the NFL footprint into the age of streaming, as Thursday Night Football is broadcast nationally by Amazon Prime Video. [The New York Times]
o The COVID-19 pandemic has forever altered the restaurant industry. Restaurants are still seeing a 16 percent decline in dine-in customers compared to before the pandemic. Meanwhile, the National Restaurant Association reports that delivery is up five percent, while traditional carry-out is down three percent. Thirteen percent more diners are opting for the convenience of the drive-thru, as customers and restaurants are increasingly reliant on technology.
Fast food chains, such as Taco Bell and McDonald’s, cater to drive-thru diners by opening new technology that improves speed and efficiency. In a Taco Bell in a Minneapolis suburb, the company opened a restaurant with four drive-thru lanes and a kitchen on a second floor. The restaurant doesn’t offer a dining room. The customer’s order is delivered to the driver through a tube system, within two minutes of order time. McDonald’s is experimenting with the same technology in a recently opened restaurant in Fort Worth, Texas. [The Washington Post]
