Economics impacts our lives every day. Below are some of the top storylines from this past week related to economics.
o Europe’s largest economy – Germany – has seen laggard growth for the past two years. It was announced the economy grew 0.1 percent in the third quarter of the year, from July to September. Even more worrisome is that the economy is expected to contract in 2024, and economists worry that 2025 won’t be any better.
Analysts point to Germany’s high energy prices, a complex bureaucracy, an aging infrastructure, and geopolitics have hurt the export industry. Industrial companies throughout Germany have seen production shrink 12 percent since 2018. [The New York Times]
o DirecTV is calling off its plans to acquire rival satellite TV titan Dish Network. The networks announced in September that they had reached a deal that would’ve made it one of the largest pay-TV platform in the United States. The deal was called off after Dish’s creditors refused to agree to exchange their debt in Dish for debt in the combined company at a discount.
This marks the second time that DirecTV attempted to acquire Dish Network. The two companies attempted a deal in 2002 but that was blocked by the Federal Communications Commission and Justice Department because it was ruled it would harm competitors. With the rise of streaming and more consumers pulling the plug on traditional TV, neither company is as strong as it was in the early 2000s. [The New York Times]
o With the election in the past and the holiday season upcoming, consumers are being more selective on splurging on goods, while focusing on deals. The National Retail Federation projects seasonal spending to climb 2.5 percent to 3.5 percent – a slower rate than last year’s 3.8 percent growth.
With households having to budget for higher grocery costs, which have risen 22 percent in four years, consumers are having to be more selective on what they splurge on. Walmart has also reported that higher-income shoppers have flocked to their stores, instead of higher priced options, helping drive the retailer’s growth across numerous categories last quarter. Meanwhile, Walmart competitor Target has said that their customers aren’t buying as fervently in its discretionary aisles. [The Washington Post]
o Across the United States, local news is struggling to pay the bills. Many over the past few years have been bought by corporate titans or are controlled by investment funds. More than an average of 2.5 newspapers per week closed over the year ending in October, according to Northwestern University.
However, Andrew Morse, the president and publisher of The Atlanta Journal-Constitution has a $150 million plan to revive his ailing paper that has the industry’s attention. Morse plans to build a state-of-the-art newsroom equipped to handle reporting, podcasting, and streaming video. The newsroom is in the heart of Atlanta rather than the northern suburbs and has a renewed focus on topics that reader’s care about. The paper has added to its staff this year, with nearly 100 workers projected to be added to payroll by the end of the year and has seen an increase in print and digital subscribers. [NPR]
o Was the flying experience the last time you flew disappointing? The cabin of a plane is a mathematical equation for airlines. Every part of the cabin is carefully planned out and Americans have shown that they are willing to splurge for a more pleasant experience.
Before the pandemic, Delta Airlines sold only 14 percent of its first-class tickets, with most customers choosing not to opt for extra legroom and better snacks. In addition, most of the best seats weren’t bought but instead exchanged for miles or given as upgrades. Once leisure travel exploded after the pandemic, Americans changed their habits. Delta sold 74 percent of its first-class seats for cash in 2023, reflecting a trend that was seen across the market. Because of such, airlines are seeking to add a new variety of cabins and more rows of upgraded seats, allowing for more price tier combinations of space, comfort and perks. [Bloomberg]
