Economics in the News – Nov. 3-9, 2025
Economics impacts our lives every day. Below are some of the top storylines from this past week related to economics.
o Air traffic controllers have worked without pay since the start of the government shutdown. The Federal Aviation Administration required airlines to cut flights by four percent at 40 of the busiest airports in the United States starting over the weekend in order to relieve the air traffic controllers and improve safety.
The result has resulted in hundreds of canceled flights among the top three carriers in the United States – Delta Airlines, United Airlines and American Airlines. Sunday was the third worst day of the year for airline cancellations with more than 2,000 flights being canceled. Because of the disruptions, many travelers are considering other options to get to their destinations as Thanksgiving nears. [The New York Times]
o Recent Federal Reserve interest rate cuts have been divisive among policymakers. In October’s meeting, officials were on the opposite end of the spectrum with one wanting a larger rate cut than what was ultimately decided and another wanting to restrict the cut. Experts agree that with little economic data available due to the ongoing government shutdown, future meetings will surely be even more divisive, as Chairman Jerome Powell’s final term ends in May.
Policymakers are facing a difficult task in how to balance risks of a declining labor market, as well as elevated inflation. Policymakers in favor of continued rate cuts argue that the labor market is vulnerable and worries over inflation. Those against continued rate cuts argue that the overall economy is doing well and that being too hung up on inflation could backfire. [The New York Times]
o Many Americans who invest in the stock market are feeling more bullish about the economy than those that don’t invest, as major indexes continue to climb to record highs. The S&P 500 is up more than 14 percent for the year. And, according to JPMorgan Chase, gains in the top artificial intelligence-related companies has added $5 trillion to household wealth. Those that invest are powering the economy, dining at lavish restaurants, going on vacations, and completing home improvement projects.
Meanwhile, among non-investors, economic sentiment is at an all-time low over a three-month moving average, according to a University of Michigan sentiment index started being tracked in 1998. Those people are focused on the economy’s negatives, such as a worsening job market, higher prices, and rising cost of living. [The Wall Street Journal]
o McDonald’s has reported a double-digit decline in foot traffic at its restaurants across low-income consumers. Meanwhile, high-income earners continue to enjoy fast food, as growth continues among the sector. The low-income customers are feeling the burden of paying higher prices for necessities such as groceries, as the divide between the wealthy and the poor in America continue to grow. But for fast-food industry, it is about trying to find a balance between maintaining value among its customers and passing on higher prices to those customers.
The fast-food industry is also facing more difficult competition from traditional sit-down restaurants, such as Chili’s, who are seen by customers as being a better value. Fast food isn’t the only sector that has seen fewer sales among the low-income earners. Outlets such as Dollar General, Dollar Tree and even Walmart have noted seeing low-income earners pull back spending. [The Washington Post]
o Electricity demand has soared in recent years leading to a surge in prices Americans are paying on their electric bills. Since the COVID-19 pandemic, electricity prices are 40 percent higher, compared to 26 percent for the rest of the economy.
New data centers that are being used to serve growing artificial intelligence (AI) needs, along with an increase in the cost of natural gas has played a role. Utility companies are also in transition, replacing old power plants with new forms of energy, such as wind, solar and natural gas. In many communities where data centers are being built, residents are worried they could end up with even higher costs if the companies building the centers get a break on prices. In addition, there are more electric products on the market that need to be charged. Anything from cars to stoves, the Department of Energy expects demand to grow 2.2 percent in 2025 and 2.4 percent in 2026. [NPR]
