Economics in the News – July 18-24, 2022
Economics impacts our lives every day. Below are some of the top storylines from this past week related to economics.
- As the economy in the United States recovered from the COVID-19 pandemic, some investors sought the opportunity to buy limited-edition sneakers in order to sell those sneakers for a profit. The popular Air Jordan sneakers was part of the high-end footwear market with shoes selling out within minutes. The resale market for the high-end sneakers climbed to $6 billion in sales annually, according to research firm Cowen and Co.
Some of those flippers are now experiencing a market where shoes are selling 30 percent less than a few months ago. The drop in the limited-edition footwear resale market coincides with other alternative investments that boomed in 2021, such as cryptocurrency, meme stocks, nonfungible tokens and sports cards, that are now experiencing a downturn. All of those alternative investments benefitted from high savings rates and government stimulus payments. [The Wall Street Journal]
- Amazon is expanding further into health care services. The e-commerce giant acquired primary care organization One Medical in a deal valued at roughly $3.9 billion. The acquisition marks the third largest by Amazon, following its $13.7 billion deal for Whole Foods in 2017 and $8.5 billion purchase in 2022 of Hollywood studio MGM.
Amazon expands its health care footprint four years after buying online pharmacy PillPack for $750 million. Experts say that Amazon’s latest acquisition of One Medical will allow the Seattle-based giant to expand its employer clientele. Critics of the deal have argued that it further endangers consumer privacy and allows Amazon to upend another industry. [Associated Press]
- Russia’s invasion of Ukraine has impacted food, energy and commodity prices on a global scale, but it’s taken a devastating toll on Ukraine’s economy. The global economy is suffering from a period of high inflation that has been especially tumultuous for the most vulnerable.
Prices in Ukraine have climbed more than 21 percent from last year. Food costs are 35 percent higher. Fuel prices are up 90 percent. Experts warn that Ukraine’s economy is expected to contract by over one-third this year. Ukraine’s currency – the hryvnia – has been devalued by 25 percent against the U.S. dollar. Many Ukrainians who haven’t seen a pay raise are struggling to make ends meet amid the higher cost of living. [The New York Times]
- How have you been staying cool this summer? The summer heat is taking a toll on Americans and their electric bills. Almost 90 percent of homes in the United States rely on some form of air-conditioning for cooling. The cost of producing electricity has been rising rapidly with the U.S. Energy Information Administration forecasting a 4.7 increase in electricity prices for this summer compared to last summer.
There are a couple of ways that Americans can manage their bill. Seasonal tune-ups by a trained technician can help keep systems running smoothly. Closing blinds and shades during the day to keep out sunlight during the warmest parts of the day. A programmable thermostat can help manage the cooling system during times away from home. [The New York Times]
- Many Americans are relocating to Europe. Inflated housing prices that have prevented many Americans from buying homes in the United States are driving people away. Sotheby’s International Realty said that requests to move to Greece increased to 40 percent in the second quarter of 2022 compared to the same period the year prior. Besides the inflated housing prices in the United States, Americans are being driven by the strong dollar, low crime rates and the political tension.
Sotheby International Realty said that Italy, Portugal, Spain, Greece and France are among its most popular destinations. According to Zillow, the average price of a home in Atlanta rose to $404,575 at the end of June. That compares to an 800-square foot property in Sicily averaging 86,560 euros, or approximately $87,600. The number of Americans living in Portugal climbed 45 percent in 2021 from the year prior, while U.S. residents in Spain climbed 13 percent from 2019 to 2021. [Bloomberg]