Economics impacts our lives every day. Below are some of the top storylines from this past week related to economics.
o A few years ago, it seemed that hybrid vehicles had peaked and would be seen as an interim step toward an abundance of fully electric vehicles on the road. Some automakers scaled back plans for their hybrid vehicles in favor of rolling out electric vehicles.
However, between high prices and the challenges of charging electric vehicles, car buyers started opting for hybrid vehicles. While sales of electric vehicles have grown at a much slower rate than automakers once anticipated, hybrids are selling at a much faster pace and are a growing share of new car sales. According to the Department of Energy, hybrids made up around 14 percent of all light vehicles sold in the United States in the first quarter of 2025. That was nearly double the market share of fully electric vehicles. Nearly half of the cars that Toyota and its luxury brand Lexus have sold over the first five months of 2025 were hybrid models, up 40 percent from 2024. Meanwhile, Ford’s hybrid sales have increased 31 percent year-over-year, while Honda is on pace for its highest hybrid sales ever. [The New York Times]
o Tesla began limited operations for its self-driving taxi service over the weekend in Austin, Texas. The service, which Tesla calls Robotaxi, was available only for select guests and was only for certain streets. Safety monitors are in the front passenger seats and the vehicles may not operate in poor weather. Several of the people invited to test the service are Tesla enthusiasts and have a large presence on social media channels.
Tesla has emphasized the Robotaxi service in recent months, as sales of electric vehicles have slumped. Tesla envisions the taxis to be able to roam the streets while the owners go about their days or are sleeping. Riders pay a flat $4.20 fee. That differs from its rivals, such as Waymo, who use carefully mapped out areas and use specially modified vehicles they own. Some analysts are bullish on Tesla’s Robotaxi plans due to their significant cost advantage to their competitors, as well as uses of multiple types of sensors in their vehicles. Others are skeptical that owners will want to make their cars available for the service, as well as the backlash it faces from regulators. [The New York Times]
o An increasing number of homeowners who purchased houses in recent years as the housing market peaked are finding themselves underwater – a position in which they owe more on their mortgages than their properties are worth. Nationwide, homeowners still have tens of trillions of dollars in equity. However, some pockets of the United States are seeing a softening in the housing market, as home sales have been relatively sluggish due to high prices.
Areas such as San Antonio, Texas and New Orleans have some of the largest share of underwater homes. More than half a million homeowners are believed to be underwater, the highest number in five years. The last five years from 2020 to present day has seen a typical decade’s worth of home-value growth. That growth was driven by low mortgage rates, high consumer savings and more people desiring larger spaces. That fast-paced growth started to cool off when interest rates began to rise in 2022 and affordability became stretched. [The Wall Street Journal]
o It’s a bad time for a job seeker, especially those who are looking to gain experience. While the unemployment rate nationwide is four percent, among those recent college graduates looking for work it’s 6.6 percent over the last 12 months. That is the highest level in a decade, excluding the pandemic unemployment spike. That rate applies to people ages 20 to 24 who have at least a bachelors degree.
Economists say that a general slowdown in hiring is to blame. While layoffs have remained relatively low for those who already have jobs, it has made it much harder for people who don’t have work to find employment. Entry-level hiring has also fallen 17 percent since April 2019, according to LinkedIn. [The Wall Street Journal]
o International energy traders are bracing for Iran’s closure of the Strait of Hormuz – a crucial waterway for the world’s oil supply. A move would come as a retaliation of the United States bombing three of Iran’s nuclear facilities over the weekend. It remains unclear whether Iran will attempt a blockade or use mines or missiles to interrupt the flow of commerce.
Any move to impede the flow of shipping traffic out of the Persian Gulf would likely lead to a spike in oil prices. Roughly 20 percent of the world’s oil and natural gas shipments pass through the strait between Iran and Oman. Before the US bombing, analysts were seeing signs that a closure could push oil prices past $100 per barrel – a 30 percent increase. [The Washington Post]
