Economics impacts our lives every day. Below are some of the top storylines from this past week related to economics.
o Coffee prices have soared 50 percent over the past year. However, climate change has impacted the costs of production for farmers, due to rising temperatures, droughts and excessive amounts of rainfall. Droughts in Brazil and Vietnam – the world’s two largest coffee producers – along with disruptions in international shipping have made coffee beans scarce.
Sixty percent of the world’s coffee is produced by an estimated 12.5 million people working on small farms. More than 40 percent of those farmers are living below the World Bank’s measure of poverty. The bulk of profits in the coffee industry have traditionally gone to the coffee roasters. While the profit for the coffee roasters has increased, that has not necessarily led to an increase in profits for coffee growers. [The New York Times]
o The S&P 500 wiped out nearly all of its gains since President Donald Trump took office, and it wasn’t the only major index down for the week. The S&P 500 is up 0.3 percent since the President took office. Investors took note of the University of Michigan consumer sentiment index that indicated consumers to be more worried over the path of the economy than most economists had anticipated.
Consumers remain hesitant to make large purchases, expecting a rise in unemployment over the next year. Added to the fears of inflation are the Trump administration’s policy priorities, specifically tariffs on United States trade partners. [The New York Times]
o Major League Baseball (MLB) and ESPN are ending their 30-year partnership following the 2025 baseball season. ESPN was previously due to pay MLB $550 million per year from 2026 to 2028 for the rights to broadcast 30 regular season games per season, the annual Home Run Derby and the Wild Card playoff round.
For Disney, the decision comes in an effort to improve profitability of its direct-to-consumer business. According to MLB, the two parties sought to negotiate new terms on the deal, but the effort never came to fruition. MLB has been upset with ESPN over the past several seasons for its promotional efforts outside of the live games. In the future, MLB will seek to centralize its media rights and create a system where teams share revenues from broadcast and streaming deals. [The Wall Street Journal]
o The top 10 percent of earners – those earning $250,000 or more per year – account for 49.7 percent of all spending. That marks a record dating back to 1989, according to Moody’s Analytics. By comparison, 30 years ago the highest-earning Americans accounted for 36 percent of all spending.
The top 10 percent accounted for nearly one-third of gross-domestic product, making the economy increasingly reliant on the rich to continue their spending habits. While Spending among the middle-class and working-class dropped between Sept. 2023 and Sept. 2024, the wealthy increased their spending by 12 percent. That also makes a stock market selloff or a decline in real estate values problematic for the economy. [The Wall Street Journal]
o More companies are mandating workers to return to the office. The number of people working from the office reached its highest point since the pandemic in January, according to property management company Kastle Systems. While some employers continue to offer flexible work arrangements, the number of people going back to the office is expected to continue to rise.
Under an executive order signed by President Donald Trump, federal workers are expected to return to the office in the coming weeks. Workers in large metro areas are noticing more traffic on the way to work, along with busier lines at restaurants and coffee shops. Restaurant owners are hoping that a return to the office can boost their sales, as traffic has not fully recovered since the pandemic. [The Washington Post]
