Economics in the News – March 18-24, 2024
Economics impacts our lives every day. Below are some of the top storylines from this past week related to economics.
o iPhone sales have declined in China, Apple’s second-largest market behind the United States. Sales of the iPhone have dipped 24 percent in the first six weeks of 2024, a typically busy time for phone sales in China. Meanwhile, one of Apple’s top rivals in China – Huawei – saw its phone sales increase 64 percent during that same period. China has always been pivotal for Apple, accounting for roughly 20 percent of sales.
Analysts explain the slowdown in iPhone sales due to a slowdown in consumer spending, pressure from the Chinese government to shun devices made by US-based companies, and a resurgence of Huawai. For some in China, buying a phone has become a political statement. Apple started selling its smartphones in China in 2009. Last time it lost market share to Huawei was 2019, when former President Donald Trump’s administration restricted technology firms from dealing with Huawei. [The New York Times]
o Is your March Madness bracket busted after the opening weekend of the NCAA Men’s Basketball Tournament? America loves Cinderella stories during March Madness. Teams such as No. 14 seed Oakland beating college basketball blue blood Kentucky in this year’s tournament. Or No. 16 seed Fairleigh Dickinson beating No. 1 seed Purdue last season. Bracket-busting victories by double-digit seeds are not just a big deal on the hardwood, they play a significant impact in raising the profile of those schools.
A spike in attention during March Madness can lead to increases in applications, enrollment, and alumni contributions. No better example is better than St. Peter’s historic run to the Elite Eight as a No. 15 seed. During the Peacocks’ 2022 run, the school sold $300,000 worth of merchandise, a significant increase over the $58,000 that was sold prior to its upset over Kentucky. Donations more than quadrupled, increasing from $450,000 to $2 million. After its 2006 Final Four run as Cinderella, professors at George Mason estimate that the school received more than $600 million worth of free publicity and a 22 percent increase in applications coming after its run. [The New York Times]
o Discount grocers, such as Aldi and Dollar General, are seeking to meet consumer wants of less expensive groceries. Prices in the grocery store have increased by 25 percent over the last four years, outpacing the overall inflation rate of 20 percent over that same span. Aldi has plans top open 800 stores through 2028, while Dollar General plans to add 800 this year.
Aldi and Dollar General, as well as competitors Dollar Tree and Lidl, have expanded their footprint collectively by almost 17 percent since 2019. Aldi and Lidl have found that customers who are financially strained are willing to break their habits to save on essentials. Both German companies, Aldi and Lidl have increased their footprint in the US since the 2008 recession. While not for everyone, Aldi and Lidl offer customers limited selections, majority private-label inventory, and a no-frills shopping experience. Meanwhile, brands such as Dollar Tree and Dollar General offer limited selections of popular brands with a shorter shelf life than many items in a traditional supermarket. The specialty dollar stores are expanding their grocery options in an effort to become a source for rural and lower-income communities. [The Washington Post]
o Major League Baseball opens its regular season in the United States this week, and the sport’s biggest star – Shohei Ohtani – is in a new uniform. Ohtani, who the Los Angeles Dodgers signed to a record-breaking 10-year, $700 million contract over the winter. Ohtani is the most famous athlete in his home nation, Japan, where his games are broadcast live. With Ohtani now with one of baseball’s top organizations, MLB and the Dodgers are looking to capitalize.
Already, Dodgers ticket sales have more than tripled, thanks to fans in Japan, while average resale tickets for Dodgers home games have climbed 10 percent. In addition, Ohtani and the Dodgers opened the season in Seoul, South Korea against their division rival, the San Diego Padres. With MLB seeking to expand overseas, the Dodgers are also capitalizing with sponsors in Asia. Advertising interest is so great that some companies are sponsoring other teams, specifically against the Dodgers. The organization believes that Ohtani’s presence will generate tens of millions of dollars in additional revenue. And could surpass the four million threshold for tickets sold for the first time. [Bloomberg]
o The United States no longer ranks among the top 20 happiest countries in the world. The World Happiness Report has been ranking the happiest countries for a dozen years and this year’s version marks the first time that the United States is outside the top 20. America fell eight spots to 23rd in this year’s ranking, after being listed 15th one-year ago. The decline is due to the reported well-being of Americans under 30 years old.
Finland ranked as the world’s happiest country for the seventh consecutive year, while Lithuania ranked at the top for people under the age of 30 and Denmark was the leader among people are 60 years old or older. A previous report by the American Psychological Assessment found that Gen Z adults have higher stress levels than older generations, with top concerns being health and finances. [TIME]
