Economics in the News – Sept. 29 - Oct. 5, 2025
Economics impacts our lives every day. Below are some of the top storylines from this past week related to economics.
o Many travelers flocked to discount airlines due to their less expensive airfares, but that led them to expand rapidly, maybe too rapidly for their own good. Experts across the aviation industry suggest that low-cost airlines grew too large, too quickly. And now they are struggling to adjust for rising costs and competition with other similar competitors. Two of the most well-known low-cost airlines are Spirit Airlines and Frontier Airlines. While Spirit has sought bankruptcy protection two times in 12 months, Frontier is no longer consistently profiting.
Spirit became well known among low-cost travelers for its discounted airfares, but nickel-and-diming customers for everything else. The airline was profitable from 2007 to 2020, while competitors such as Frontier, Sun County Airlines, Breeze Airways, and Avelo Airlines emerged under similar models. As the airlines grew, they started buying larger airplanes and flying into larger airports, placing them in direct competition with the largest, more established carriers. In addition, the three largest US airlines – Delta Airlines, American Airlines, and United Airlines – started adopting some of the low-cost carrier policies, such as offering additional seat selections, along with an economy seat that offered the bare minimum. Pay increases for pilots and increased cost of operating also negatively impacted the low-cost carriers, making it more difficult to offer bargain pricing. [The New York Times]
o Las Vegas tourism is down this year, with the Las Vegas Convention and Visitors Authority citing an 11 percent decline in tourism since last year. The city relies heavily on tourism through its world-famous shows, casinos and entertainment. Several factors have contributed to the decline, including a decrease in consumer confidence, a boycott from Canadian travelers, and the fallout from President Donald Trump’s tariff policies.
In 2024, more than 25 percent of international visitors were Canadian. So far this year, visitors from Canada have fallen by 18 percent, and if that number falls to 20 percent that will mean more than 280,000 fewer visitors. That is largely due to the ongoing political climate between Trump and the Canadian government. In addition to fewer international visitors, prices have skyrocketed in Vegas. Hotel rooms that averaged a little more than $120 in 2019 are now averaging more than $160 per night. Prices for food, resort fees and show tickets have also climbed. In addition, with more states legalizing sports betting, there’s fewer reasons for visitors to travel to Vegas. [The New York Times]
o Coffee drinkers are paying up for higher prices, even if they’re unhappy to do so. The price of coffee has soared, with prices for roasted coffee 22 percent higher in grocery stores – more than any other item tracked by the federal government. For many, coffee is a habit that is too difficult to quit. According to NielsonIQ, Americans spent $12.7 billion on packaged coffee in the past year, up from $12 billion the year prior.
The increases in prices are due to poor climate conditions among coffee’s largest growing regions, as well as President Donald Trump’s tariff policies. Coffee shops have been faced with raising their prices to keep pace with their increased costs. [The Wall Street Journal]
o One of the impacts of the federal government shutdown is the lack of official data. The first impact was the jobs report that was supposed to be released by the Department of Labor. In a good economy that is on a clear path, that isn’t necessarily a big deal. However, in a time with so much uncertainty surrounding the direction of the economy – from unemployment to cooling job market to worsening inflation – the impact makes the jobs of policymakers much more difficult.
The Federal Reserve relies heavily on the government data for its decision-making. With the Labor Department shutdown, it will not have access to those materials to guide those pivotal decisions which could have severe ramifications for the economy. Without a clear view of the economy, business owners are faced with difficult decisions whether to invest or hire. [The Washington Post]
o Gone are the days of basic condiments: ketchup, mustard, and mayonnaise. These days, a walk down the condiment aisle at the grocery store, shoppers can choose from a wide range of flavors, variants of health benefits, and mixes of types of condiments. The popularity in sauces has grown in part because it is the easiest part to personalize a home-cooked meal, while cutting back on eating out.
The valuation of the US condiments category has ballooned to more than $12 billion, as of 2024, an increase of more than 50 percent, according to Mintel. The research company projects that the condiment section will continue to grow by nearly another $1 billion by 2029. Even fast-food chains are selling their own sauces at grocery stores. [Bloomberg]
