Economics in the News – Dec. 5-11, 2022
Economics impacts our lives every day. Below are some of the top storylines from this past week related to economics.
o Have you opened a high-yield savings account? If not, you are losing interest income every month. The top-five banks in the United States – Bank of America, Citigroup, JPMorgan Chase, U.S. Bancorp and Wells Fargo – paid an average of 0.4 percent interest on consumer deposits and money-market accounts during the third quarter, according to S&P Global. In comparison, Bankrate.com reported that the top-five high-yield savings accounts paid an average of 2.14 percent during the same period.
The five largest banks in the United States hold roughly half of all the money held at U.S. commercial banks and money-market accounts tracked by the Federal Deposit Insurance Corp. If all the money held by those banks was moved to high-yield savings accounts, Americans would collectively have earned $42 billion more in interest in the third quarter. A depositor with a balance of $1,000 in savings at a high-yield account would have earned more than $20 in annual interest than in a big bank. Why do Americans continue to hold savings in the big banks? Some are more concerned with simplicity and convenience. Others feel more comfortable working with a brick-and-mortar bank. [The Wall Street Journal]
o Janet Yellen – the first female United States Treasury Secretary – became one of the first two females to have her signature on the nation’s currency. She is joined by Lynn Malerba – the first Native American treasurer. Despite serving in her role as Treasury Secretary for nearly two years, the process was delayed until a treasurer was officially in place before circulating the money with both of their signatures.
The first $1 and $5 notes bearing their signatures will enter circulation next month. It marks the latest groundbreaking achievement for Yellen, as she continues to make her mark in a notoriously male-dominated field. Before her role as Treasury Secretary, Yellen has previously served as the Federal Reserve chair and the head of the White House’s Council of Economic Advisors. [The New York Times]
o Plenty of American businesses are still embracing the work-from-home culture. Some are doing so to attract workers in locations, such as Florida, Idaho, or Texas, where they are more affordable. While working from home empowered employees to move to suburban areas when the pandemic began, companies now use it to their advantage to keep costs down. Other benefits for employers are to increase the company’s diversity and find new talent.
Pay differentials allow employers to save as much as 15 percent on wages by hiring remote staff. Nationwide, the number of jobs that specify remote work has tripled to an estimated 12 percent since 2019, according to analysts. [Bloomberg]
o The Boeing 747 – the airplane jet credited for bringing long-haul nonstop flights and luxurious amenities to the masses – is being discontinued. Boeing assembled the final 747 aircraft last week and plans to discontinue production after a run of 54 years. Boeing says that 1,574 747’s have been produced since it was first produced in 1967. The first commercial flight in the aircraft was used from New York to London on Pan Am.
The aircraft allowed airlines to use first-class seats, expand the economy class and make flying affordable for middle class families. In recent memory, the aircraft set the record for the fastest subsonic commercial flight to cross the Atlantic in 2020, as a British Airways flight from New York to London was aided by strong winds and traveled in 4 hours, 56 minutes. U.S. carriers began phasing the aircraft out in 2017. [NPR]
o China is facing another surge in COVID-19 cases. China is setting up more intensive care units and strengthen its hospitals, as it rolls back policies that confined citizens to their homes and crushed economic growth. China is the last major country to stop its “zero-COVID” strategy, becoming more tolerant of more cases without quarantines or shutting down travel or business.
While it isn’t clear how much infection numbers have increased in Beijing since the policy shift, various media accounts have reported outbreaks in schools and businesses throughout the country. The official death toll in China is 5,325, compared to 1.1 million people in the United States. [Associated Press]