Economics in the News – Sept. 12-18, 2022
Economics impacts our lives every day. Below are some of the top storylines from this past week related to economics.
o A tentative agreement was made as part of a last-second effort to avoid a potential freight railroad strike. A strike could’ve shutdown the nation’s freight trains that deliver supplies, further devastating the economy. President Joe Biden announced a tentative agreement to keep freight workers at their jobs. A strike would’ve interrupted passenger traffic as well, as Amtrak was canceled all long-haul trains ahead of the deadline.
Railroad unions objected to the heavy workload and attendance rules despite a one-third reduction in their workforce over the last six years. The rail industry has aggressively cut costs and shifted its operations to rely more on long-distance trains that use fewer employees. Business analysts predicted that a rail strike would’ve been disastrous for the American economy, estimating that a strike could cost $2 billion per day and force companies to scale back and layoff workers. [Associated Press]
o Hurricane Fiona made landfall on Puerto Rico’s southwest coast on Sunday, striking on the 33-year anniversary that Hurricane Hugo ravaged Puerto Rico as a category three hurricane. Meteorologists projected rainfall of 12 to 16 inches, up to 30 inches in eastern and southern Puerto Rico. The storm continues to wreak havoc throughout the Caribbean, as the Dominican Republic, Haiti, Caicos Islands are in its projected path for Monday, while the Bahamas is expected to be impacted on Tuesday.
According to power companies, the 80 miles per hour wind and rain took its toll on the power grid, leaving an island-wide blackout. Health centers are running on generators. Homes that sustained damage from Hurricane Maria two years ago, are susceptible to weak infrastructure. [Associated Press]
o “The Phantom of the Opera” – Broadway’s longest-running show – will end its run after 35 years. The show is scheduled to play its final performance at the Majestic Theatre on Feb. 18, 2023. The show will conclude after 13,925 performances since its 1988 debut. It has won more than 70 major theater awards and has been viewed by more than 140 million people worldwide.
Struggles faced by Broadway in bouncing back from the COVID-19 pandemic are blamed for the show’s cancellation. Performances on Broadway returned in the fall of 2021 after more than a year hiatus due to the pandemic, but the industry has struggled in its recovery. Once “The Phantom of the Opera” ends its run, “Chicago” will take over as the longest-running show on Broadway, starting in 1996. “The Lion King” is the third oldest show, beginning in 1997. [The Washington Post]
o Stocks on Wall Street suffered one of their worst weeks of the year. Pessimism is deepening after corporate executives signal that they believe the economy is headed for a global recession. The S&P 500 finished the week with weekly losses of five percent, marking the third week this calendar year that the index lost five percent. The weekly losses followed the index’s worst trading day since June 2020, which came with a 4.3 percent drop on Tuesday.
FedEx – whose package shipping business reflects business and consumer demand – warned that its profit was being impacted by weak Asian and European markets. The company’s CEO Raj Subramanian predicted a “worldwide recession.” Predictions among the largest banks in the United States are mixed. Economists at Wells Fargo and Citigroup expect a recession, while those at JP Morgan Chase and Morgan Stanley predict that the U.S. will be able to avoid a recession. [The New York Times]
o Perhaps the greatest male tennis player of all-time, Roger Federer announced his retirement from competitive tennis at the age of 41 years old. The Laver Cup team competition will mark Federer’s final professional event – a tournament he co-founded in 2017. On the court, Federer retires with 20 Grand Slam singles titles, including a record eight Wimbledon titles. He won 103 singles titles on the ATP Tour, second most of all-time trailing only the 109 career wins by Jimmy Connors.
Federer is one of seven athletes to surpass $1 billion in career earnings, joining LeBron James, Floyd Mayweather, Lionel Messi, Phil Mickelson, Cristiano Ronaldo and Tiger Woods. He has collected more than $131 million in prize money since turning pro in 1998, trailing only rivals Novak Djokovic’s $159 million and Rafael Nadal’s $132 million. With his endorsements and business ventures, Forbes estimates that Federer earns $90 million per year in off-court earnings. Federer announces his retirement from the sport a few weeks after fellow tennis star Serena Williams retired after this year’s US Open. [Forbes]