Economics in the News – April 25-May 1, 2022
Economics impacts our lives every day. Below are some of the top storylines from this past week related to economics.
- In the early months of the COVID-19 pandemic, blacked-owned small businesses closed at twice the rate of other businesses at 41 percent, according to April 2020 census data. The businesses – largely concentrated in retail, restaurant and other services – had a harder time adjusting to restrictions forced by the pandemic due to thinner margins and difficulties securing aid from the federal government’s relief program for small businesses.
Black-owned businesses have soared in the months since, being created at the fastest rate in 26 years. But many are facing challenges of labor shortages, supply chain delays and inflation. [The Washington Post]
- Throughout the COVID-19 pandemic, Americans who own their homes have gained more than $6 trillion in housing wealth. High demand and a short supply of housing throughout America are key contributors. But for many it has pushed the idea of homeownership further out of reach, especially those experiencing rapidly increasing rent increases.
While economists expect price growth to slow with the increase in interest rates, many don’t expect prices to fall because of the high demand and the short supply of housing. Many homeowners plan to take advantage of the equity in their home by sending their kids to college or create intergenerational wealth for the first time. [The New York Times]
- Rising food prices are straining budgets for many households and food shelters across the United States. The price of food at grocery stores in March was 10 percent higher than a year earlier, while food prices at restaurants climbed 6.9 percent since March 2021.That has caused longer lines at many food shelters.
Around 85 percent of Feeding America’s 200 food banks and 60,000 food pantries and meal programs saw an increase in demand in February, according to a recent survey by the organization. Food banks are seeing increased demand, while also having trouble acquiring the food they need. Food banks have traditionally relied heavily on retail partnerships for donations, but those retailers are experiencing supply-chain issues and have reduced the amount of food they’re able to donate. [The Wall Street Journal]
- Ukraine is a major food exporter. It ranks as the fourth-largest producer of corn and wheat, as well as first in sunflower oil. Ukrainian farmers grow enough food to feed 400 million people. The United Nations’ World Food Programme is running sites throughout Ukraine to feed two million people and is feeding more than 145 million people worldwide in 81 countries.
The city of Odesa is a major port city in Ukraine, but the war has forced the port to close. Russia’s invasion of Ukraine has exacerbated those fighting famine worldwide with many vital exports stuck in Ukrainian ports or unable to be harvested at all. That’s impacting not only the food supply in Ukraine, but in many countries that rely on Ukrainian crops. [60 Minutes]
- Stock prices tumbled in April. It marked the worst month for Wall Street since March 2020. The S&P 500 slid 8.8 percent for the month and is down more than 13 percent for the year. Rising interest rates and high inflation negatively impacted consumer sentiment.
As companies report earnings from the first quarter of 2022, many have outperformed analysts’ expectations. Many analysts continue to project a volatile market for the remainder of 2022, as investors weigh the effects of Russia’s invasion of Ukraine, COVID-19 lockdowns in China and questions over how quickly the Federal Reserve will raise interest rates to combat high inflation. [The New York Times]