Economics impacts our lives every day. Below are some of the top storylines from this past week related to economics.
o California’s ambitious effort to replace carbon emission trucks with battery-powered trucks could be in jeopardy due to President Donald Trump’s policies. Regulators in the state of California withdrew their plans after Trump was elected due to potential rejection of the policy. Some trucking executives have said that they intended to keep deploying electric trucks.
The state does require truck manufacturers to sell an increasing number of zero-emissions heavy trucks in the state and that rule is more protected from a potential challenge by the Trump administration. [The New York Times]
o What impact does the lack of clarity on President Donald Trump’s proposed tariffs have on the economy? In the first few weeks of the Trump administration, federal programs have been suspended or shut down. Tariffs have been threatened with some later being delayed. That has brought tremendous uncertainty on Americans. Despite some worrying signs, business leaders remain confident. However, experts warn that those confidence levels could dissipate if the uncertainty in Washington doesn’t calm down.
Economists have studied the effects of uncertainty. Research has shown that uncertainty makes businesses more reluctant to hire and invest, and leads to lower sales – even beyond the policies’ own impact. Previous times of uncertainty that were studied had associations of recessions, financial crises, or global developments, which makes the current uncertainty in the United States economy unusual. Executives are likely to be more cautious about long-term investments. In times of uncertainty, customers become more selective on what they buy, putting off big ticket purchases or choosing less expensive options. [The New York Times]
o President Donald Trump has instructed the United States Treasury to stop producing new pennies. Removal of the penny has been a longstanding debate, with some arguing that the cost savings would be worth it. Others believe that getting rid of the coin would have consequences because cash transactions would need to be rounded up or down.
According to the US Mint, the cost of producing the penny increased 20 percent in 2024 – from 2.7 cents per unit in 2022 to 3.7 cents in 2024. Demand for coins has been on the decline for a number of years, with estimates that that the US throws away as much as $68 million worth of coins per year. Canada stopped producing pennies in 2012, while Australia and New Zealand dropped the coins in the 1990s. In those countries, merchants rounded to the nearest five and 10 cent coins for cash transactions. [The Wall Street Journal]
o Did you notice higher prices at the register for chocolate this Valentine’s season? Catastrophic weather and a crop disease in West Africa has reduced cocoa supplies to historic lows. The International Cocoa Organization estimated last November that global cocoa yield for the 2023-24 growing season was down 13.1 percent year-over-year.
The price of chocolate and cocoa goods has increased 175 percent over the last five years, while chocolate prices on grocery shelves are more than five percent higher year-over-year. Prices are projected to continue their rise, with projections of a 10 percent price increase throughout the year. Cocoa beans are imported to North America with 60 to 70 percent of the world’s cocoa beans coming from West Africa. The warm and wet conditions caused by an El Niño weather pattern have also brought on disease that have infected production. [The Washington Post]
o The National Basketball Association (NBA) has had subpar television ratings in the first half of the 2024-25 season. Viewership in national broadcasts is down a whopping 18 percent compared to last year. Total cable viewership is down 13 percent. While NBA teams have embraced analytics to win more games on the court, they are doing so at the detriment of making games boring for fans to watch.
The prevalence of the three-point shot has risen dramatically since the 2004-05 season – more than double. This season, teams are averaging 37 attempts from three-point range per game, compared to 16 per game in 2004-05. Teams seeking optimal strategy to win games are watering down the product for fans. So far, it’s a concern more than a problem with the league to bring in $76 billion from TV rights over the next 11 years and with franchise valuations continuing to rise. Still, it has the league on notice and seeking to implement possible changes to aid viewership. [Bloomberg]
