Economics impacts our lives every day. Below are some of the top storylines from this past week related to economics.
o While major stock indices on Wall Street have plunged since President Donald Trump took office, international stocks are benefitting. As investors have started to pull away money from markets in the United States, they are reallocating those resources to foreign markets. The US markets have long attracted foreign investors seeking higher returns than their home countries could provide. Many investors and analysts remain bullish on US stocks over the long term and continue to believe they will outperform foreign stocks.
Since Trump’s inauguration, the S&P 500 is down six percent, while the Dax index in Germany has climbed 10 percent and the European-wide Stoxx 400 has gained more than four percent. In Hong Kong, the Hang Seng Index has climbed 20 percent, driven by efforts by the Chinese government to stimulate the economy. Meanwhile, Mexico’s IPC index is up five percent. [The New York Times]
o The Department of Agriculture recently ended two programs from former President Joe Biden’s administration that paid farmers to provide food to schools and low-income families. The programs were created during the COVID-19 pandemic to strengthen local supply chains. It had provided $1 billion in grants to states, which distributed the money to school districts, food banks and distribution hubs to support buying local meat and produce from over 8,000 local farmers. The programs were seen by President Donald Trump’s administration as an unnecessary way to spend taxpayer dollars and ending a COVID-era policy. However, many farmers need the money that the programs provide, and were surprised at the timing of the decision to do away the program.
For organizations impacted by the cuts that provide food directly to children and families, the elimination of the programs could lead to less healthy meals and fewer purchases from local farmers. One hundred thousand more people used The Food Bank of Central and Eastern North Carolina last year than in 2023, and revenue from fundraising is driving up. The organization was scheduled to receive $2 million in 2025. However, cutting the program put in place by the Biden administration will likely force the charity to cut back and limit purchases of local produce, including two farms that grow exclusively for the food bank. [The New York Times]
o Concerns over tariffs, inflation and a potential recession is causing a cutback in consumer spending across all income levels. A variety of companies, such as Walmart, McDonald’s, and Dollar General, are reporting a difference in behavior for low-income shoppers, who are having to make difficult decisions in order stretch their budget further.
Among wealthier consumers, shopping at high-end luxury stores and online platforms dipped 9.3 percent in February compared to a year prior. A wholesale retailer such as Costco, which is typically on the high-end for customer shopping, said that demand has shifted to lower-cost proteins such as ground beef and poultry. Citi Bank analysis of US credit card data shows a decrease in spending in most retail, including apparel and athletic footwear. [The Wall Street Journal]
o The reigning World Series champion Los Angeles Dodgers open the 2025 baseball season against the Chicago Cubs in a two-game showcase in Tokyo. Star names such as Shohei Ohtani, Shota Imanaga, Yoshinobu Yamamoto, and Roki Sasaki return to their roots, bringing America’s pastime to their homeland. For MLB, it’s been three decades in the making when Japanese stars first ditched the Japanese Nippon Professional Baseball to sign with MLB teams. The first player to do so was Hideo Nomo, who joined the Dodgers after using a contractual loophole that had prevented Japanese players from coming to the United States. Since then, MLB has worked to boost its brand in Japan, playing regular season games there every year since 2000. The demand for MLB exploded last season.
Due to the number of Japanese stars in today’s MLB, the league has gained significant popularity in Japan. When the Ohtani-led Dodgers defeated the Yankees last October to win the World Series, more people in Japan watched the first two games than in the United States, even as the games started at 9 a.m. MLB has also benefited from a sponsorship standpoint with revenue increasing 114 percent from 2023 to 2024, apparel sales increased 183 percent. For regular season games, broadcasts on Japanese television drew 2.2 million viewers – a 42 percent increase. [The Wall Street Journal]
o International travelers are cancelling their plans to travel to the United States, citing President Donald Trump’s stance on tariffs and international policies. According to Tourism Economics, international travel is expected to dip five percent this year – equivalent to $64 billion for the travel industry. Prior to Trump’s inauguration, estimates were forecast for a nine percent increase in international travel this year compared to last year.
Travel began to dip in February from a year earlier, according to government data. Vacationers from Africa was down nine percent, travel from Asia was seven percent less, while vacationers from Central America came to the United States six percent less. In addition, travel from China was down 11 percent. Canadiens are also ditching their vacation plans to the United States, as Tourism Economics anticipates a 15 percent decline in travel from Canada or $3.3 billion in lost spending. Canadiens driving back from visits plunged by 23 percent in February, while those flying back to Canada was down 13 percent from a year prior. [The Washington Post]
