Economics in the News – July 15-21, 2024
Economics impacts our lives every day. Below are some of the top storylines from this past week related to economics.
o A global outage, affecting Microsoft users took some of the world’s most important services offline for a period of time on Friday. Businesses such as airlines, hospitals, train networks and TV stations were disrupted to the point that flights were grounded, non-emergency surgeries were delayed, businesses were unable to accept payments.
The problem that impacted the majority of the services was caused by a flawed update from cybersecurity giant CrowdStrike, whose systems are intended to protect against hackers. Microsoft also announced an earlier outage impacting users of its cloud service system, Azure. CrowdStrike has taken responsibility for the outage, noting that it did not impact Linux and Mac users. Meanwhile, according to experts, Microsoft is not blameless due to the poor resiliency of Microsoft’s operating systems. [The New York Times]
o The International Monetary Fund (IMF) warned that inflation remains stubbornly high and that protectionism posed a risk to the global economic outlook. The organization still expects global output at 3.2 percent in 2024 and 3.3 percent in 2025, despite signs of weakness in the United States as a result of weaker consumer spending and a softening job market.
The report shows a forecast of 2.6 percent growth in 2024 in the United States, a slight downgrade from its previous 2.7 percent projection. Global inflation is expected to ease to 5.9 percent this year from 6.9 percent in 2023, but central banks could be forced to keep borrowing rates elevated longer, putting growth at risk for both advanced and developing countries. [The New York Times]
o President Joe Biden has dropped his re-election bid in the 2024 Presidential race, endorsing his Vice President Kamala Harris as the Democratic nominee. No matter the Democratic nominee, they will have to contend with Biden’s economic record and the public’s unhappiness about the economy.
While the Biden administration passed a variety of bills intending to aid the economy, they have barely registered on the general public’s consensus despite that his presidential record for growth in economic output and jobs ranking better than any president since the 1980. Instead, concerns over the housing market – the affordability of homes – and the failure of wages to keep up with prices has the public frustrated. [The Wall Street Journal]
o More women than ever are working in America. Women now hold a record 79 million jobs, and 77.9 percent of women in their prime working years are either employed or seeking work. That is an increase over the 75.8 percent just five years ago. The ability to work-from-home have allowed women to enter or rejoin the workforce, all while still managing their households.
While women are increasingly taking on roles in traditionally male-dominated industries – such as construction – they are also starting more businesses. Less than a third of businesses that started in 2019 were founded by women, but half of businesses started since then have been founded by women, according to payroll provider Gusto’s analysis of census data. [The Wall Street Journal]
o The opening ceremony for the 2024 Summer Olympics is set to be held on Friday, July 26 in Paris. According to experts, the long term economic impact of France hosting the Olympics could be as much as $12 billion. Paris is part of the International Olympic Committee’s efforts to deliver a more streamlined, less competitive bidding process for the Games that will aid in leaving a positive impact for its hosts. That comes following the Summer Olympics in Athens and Rio de Janeiro drew negative publicity due to running over their budgets to saddled their governments in debt in efforts to host the Games.
Paris is expecting to host between 1.34 and 1.85 million spectators for the Olympics, split roughly evenly between French and foreign visitors. The infrastructure budget for the facilities to be used comes at a cost of €4.5 billion in a mix of public and private funds, but none of the facilities will go unused following the Games. [https://www.bloomberg.com/news/articles/2024-05-14/paris-olympics-may-bring-12-billion-economic-boost-study-showsBloomberg]
