Economics in the News – Dec. 8-14, 2025
Economics impacts our lives every day. Below are some of the top storylines from this past week related to economics.
o For many steakhouses, the holiday season is their peak season due to business parties, family gatherings and lavish end-of-year dining. However, many are having to balance raising their prices vs. risking losing their customers. While top steakhouses are not yet seeing much pushback due to their wealthier clientele, midpriced chains such as Outback Steakhouse, Texas Roadhouse are seeing customer pushback on the price hikes. Despite raising prices, profit margins shrank.
The cattle inventory in the United States is currently at its lowest levels since the 1950s, meaning that prices for beef are soaring. According to the Bureau of Labor Statistics, a USDA choice boneless steak has increased 20 percent in cost this year, costing an average of $14.13 a pound. [The New York Times]
o Prices for the exact same product may differ depending on the location you buy it in. A study organized by Groundwork Collaborative and Consumer Reports, compared prices on products in four cities across the United States. They quickly discovered that prices varied depending on the location that shoppers were located in. For example, a jar of peanut butter could be sold for $3.59 in North Canton, Ohio while shoppers in other locations could get the same brand peanut butter for $2.99.
Companies are using algorithms for their dynamic pricing models, changing prices in response to the demand for a product and to better compete with their competitors. Dynamic pricing has long been practiced while purchasing airline tickets or rides from ride-hailing apps, but it’s becoming more sophisticated in restaurants and retail. For consumers, it makes prices more volatile and less predictable. Economists believe that variable pricing can sometimes benefit customers, with it leading to more efficient outcomes and some may benefit from lower-than-average prices. [The New York Times]
o A third consecutive year of large gains in the US stock market means that the number of workers with $1 million or more in their 401(k) accounts is growing. Fidelity reported that there were 654,000 401(k) millionaires in the third quarter. That accounts for the highest level of 401(k) millionaires dating back to the 2000s.
Workers in their late 30s are allocating an estimated 88 percent of their contributions to equities, an increase from 82 percent a decade before. The Center for Retirement Research cautions that while 401(k) investors are doing well, about 40 percent of American households are at risk of not being able to maintain their standard of living in retirement. UBS Wealth Management says that there is a growing group of millionaires called “moderate millionaires” with assets ranging from $1 million to $5 million. And the number of “moderate millionaires” has ballooned since 2000 to 52 million people. [The Wall Street Journal]
o Consumers tired of algorithms are going back to collecting CDs and DVDs. Surprisingly, the trend is being driven by Gen Z who view the items as “vintage.” Older consumers are looking to lower their monthly subscription costs, while they also find it better supports the artists they enjoy listening to.
CDs still remains a niche market, as vinyl sales surpassed CD sales since 2023. DVDs and CDs also provide a sense of ownership for movie and music lovers. The brightest stars, such as Taylor Swift, Ariana Grande and Lady Gaga are releasing their albums on CD, recognizing the value of the collectors’ market. [The Washington Post]
o Underinvestment has led to German trains being some of the least efficient in Europe. That has led to the German government announcing a 100-billion euro investment to improve the rail infrastructure. However, experts suggest that it will take a much greater investment to improve its quality. Reliability across the network has plummeted with passengers dealing with poor Wi-Fi connections, seat reservation mistakes, missing train cars and an increasing number of “technical issues.”
Experts also suggest that lagging issues in the employment has caused issues, where there are more than enough desk managers but not nearly enough train engineers and signal operators. German news outlet Der Spiegel reported that the upper management approved increased cancelations for long-distance trains because canceled trains do not account for the statistics for punctuality ratings. [NPR]
