Economics impacts our lives every day. Below are some of the top storylines from this past week related to economics.
o China’s trade surplus nearly reached $1 trillion last year. According to China’s General Admission of Customs, China exported $3.58 trillion worth of goods and services last year while importing $2.59 trillion. The $990 billion surplus broke China’s previous surplus record of $838 billion in 2022. When adjusted for inflation, China’s trade surplus last year exceeded any in the world in the past century, including those in Germany, Japan and the United States. Since the United States after World War II, factories have not dominated global manufacturing as much as China has in the last year.
However, China faces criticism from many of its top trade partners, including an onslaught of tariffs from industrialized and developing countries. President-elect Donald Trump has also threatened to escalate American trade policies aimed at China. [The New York Times]
o A new study in Nature Medicine suggests that the number of Americans who develop dementia each year will double over the next 35 years to about one million annually. In addition, the study finds that the number of new cases among Black Americans will triple.
The increase is primarily due to a growing aging population. Many Americans are living longer than previous generations and by 2060, the youngest baby boomers will be in their 90s while many in the millennial generation will be in their 70s. Adults over the age of 55 had a 42 percent lifetime risk of developing dementia. That is considerably higher than previous lifetime risk estimates. While some experts said that the new lifetime risk estimate and projected increase in the coming years could be high, they agreed that dementia cases would soar in the coming decades. [The New York Times]
o Americans are fed up with tipping. Fatigue over rising menu prices and constant prompts for tips has led to a six-year low for tips and gratuities. Tipping at US sit-down restaurants peaked at 19.9 percent in early 2021, when Americans as a way to help restaurants and restaurant workers who were severely impacted by the COVID-19 pandemic. Since Sept. 30, 2024, tipping at full-service restaurants dropped to 19.3 percent. As a result, restaurants are in a difficult predicament with rising prices of ingredients and labor amid frustration from customers.
Many have taken issue with tipping by opting not to dine out as often or ordering less when they do go out. Some restaurants have added mandatory gratuities and service fees to bills, causing customers to tip less to servers. Restaurant chains and operators last year declared the most bankruptcies in decades, except for the COVID-19 lockdowns in 2020. Two of the high-profile bankruptcies included Red Lobster and TGI Fridays. [The Wall Street Journal]
o Job seekers are facing an increasing number of ghost jobs when applying for a new position. A ghost job – a role that companies advertise but have no intention of filling – accounts for roughly one-in-five jobs on the market. Companies such as Greenhouse and LinkedIn have started tagging job listings as verified to give workers better information.
Companies have a number of reasons for posting jobs that aren’t real, including suggesting that they are growing when they really aren’t or attracting a candidate who’s too good to pass up. While economic data suggests robust hiring and job growth, more white-collared workers say it’s more difficult to get hired due to things such as artificial intelligence and tighter budgets. [The Wall Street Journal]
o The wildfires in southern California are on pace to be the costliest in United States history. According to analysts, the fires burning across the greater Los Angeles area could amount to a total economic loss as much as $150 billion. The state’s previous most damaging fire was Camp Fire in Paradise, Calif., in 2018, which led to more than $30 billion in damages. Roughly 180,000 residents have been evacuated, with 200,000 more being under evacuation warnings.
The insured losses of the Los Angeles fires could exceed $20 billion, according to J.P. Morgan analyst Jimmy Bhullar. Bhullar also estimated the total economic losses from the fires to be $50 billion, while AccuWeather estimates the losses between $135 billion to $150 billion. The fires are blazing through some of the country’s most affluent neighborhoods, with median home prices exceeding $3 million. In addition to the infrastructure costs, the fires could pose a risk on the environment. Ash and debris could pollute the water system or create years-long risk for mudslides. The damage to people’s lungs might also not be known for many years to come. [The Washington Post]
