February jobs report: DOGE federal layoffs show up amid gains

The February jobs report showed stronger-than-expected growth as275,000 jobs were created, surpassing estimates of 200,000. The unemployment rate rose, however, to 3.9%, with wage growth remaining constant. While healthcare and government job sectorsshowed strong gains, retail and manufacturing experienced some pullbacks. The mixed tone of the report shows there is some resilience to job creation and some underlying economic volatility. I think that this report means that the job market is continuing to grow but starting to show signs of a possible slowdown. The rise in unemployment, despitestrong job increases, suggests more people are leaving the labor pool or struggling to find employment. It will be important to pay attentionto if hiring remains firm in the upcoming months or the rise in unemployment is indicative of larger problems.

NBC NewsFebruary jobs report: DOGE federal layoffs show up amid gains

February 2025 ADP Report Shows Slower Hiring Among Growing Economic Concerns

The most recent ADP job report shows that private sector job creation took a significant dip in February with only 77,000 positions being added. This figure comes in far below the previous months number of 186,000 and the forecasted number of 148,000 for February. Sectors tied to trade, transportation, and utilities saw large losses of 33,000 likely due to tariff concerns. On a positive note from the report, 41,000 new positions in leisure and hospitality were created in addition to 27,000 new jobs related to professional and business services. The effect of job loss was mainly felt by smaller companies who saw a net loss while large firms of over 500 employees continued hiring adding 37,000 new workers. 

I believe that these numbers underscore a sense of caution in the labor market. It is definitely encouraging to see certain industries such as leisure, hospitality, and business services continuing to expand, however, the weak overall growth signals that firms may be more hesitant about hiring as they gauge current economic situations. In addition to this report, the market has reacted with multiple losing days as investors reacted to the news. It will be interesting to see how next months job report comes in and whether or not this slowing of jobs being added will continue.

Link: https://www.cnbc.com/2025/03/05/adp-jobs-report-february-2025-.html

The Newest Trade War and its Effect on the Stock Market

     With Trump's tariffs having increased the effect on the stock market is obvious. When Trump first came into office, we did see a significant rise in the stock market. However, the presidents foreign policy has all but cancelled out this gain. "The S&P 500 fell 1.2%, with more than 80% of the stocks in the benchmark index closing lower. The Dow Jones Industrial Average slid 1.6%. The Nasdaq composite slipped 0.4%." As it turns out, many U.S. businesses do rely on foreign imports to run at full efficiency. Furthermore, Canada, China, and Mexico are not going to accept these tariffs with open arms as China has already instituted tariffs with Canada and Mexico planning to follow suit. In the near future, expect to see larger price tags on the goods and services that you typically buy as these tariffs will likely increase prices for consumers. 

Thousands Rally to Protect National Park Jobs

In my previous blog, I addressed the significant job cuts occurring within our national parks, a consequence of shifting political policies following the new administration's arrival. I highlighted the potential impact of these cuts on both the rangers and the parks themselves, which could lead to maintenance issues, environmental damage, and harm to vital ecosystems. I urged readers to stay informed to help prevent severe harm to our natural wonders and the dedicated rangers who protect them. 

This past weekend, a proactive response emerged against these policies in the form of widespread protests. Thousands gathered at national parks across the country, from Yellowstone to the Great Smoky Mountains. Participants included park rangers, environmental advocates, families, and outdoor enthusiasts, all united to voice their concerns about the budget cuts. Many carried signs proclaiming “Save Our Parks” and “Protect Our Rangers.” The issue gained momentum on social media, with many, including myself, seeing posts under the hashtag #SaveOurParks. Petitions have also been launched to advocate for reversing these new policies. This movement is gaining traction on various fronts, urging politicians to prioritize the funding our national parks desperately need. 

The protesters understand the gravity of the situation and have chosen to stand up and speak out. They aim to inform policymakers about the risks associated with these initiatives. The protests have sparked a broader conversation about the long-term implications of the proposed cuts. Many are imploring policymakers to genuinely consider the future impact on our parks. While the cuts may appear to save money in the short term, we must contemplate their potential financial repercussions, which may include an increased entry fee that could deter visitors and ultimately harm park revenue. There's also the concern that these cuts could pave the way for private-sector partnerships aimed at offsetting costs that the government is reluctant to cover. 

Although the future remains uncertain, the overwhelming public response undoubtedly demonstrates that Americans are deeply committed to protecting their national parks. Policymakers now face a critical choice: will they heed the wishes of the people? This situation is an excellent demonstration of civic engagement, with citizens actively addressing pressing issues and urging lawmakers to take action. Now, protesters await a response from lawmakers. However, many insist this movement is far from over, pledging to continue their fight as budget discussions unfold.

Source: https://www.nytimes.com/2025/03/01/us/national-parks-trump-protests.html

Euro zone inflation dips to 2.4% in February as ECB bets point to sixth rate cut

This is more of a world economic news than strictly in the US, but with all the complications with tariffs and Ukraine, I feel it is still important. The Eurozone inflation was at 2.4% which is 10 basis points above what they had expected. The so-called core inflation was slightly higher than the regular reading at 2.6%. The slowdown of energy prices makes the slightly higher number not as bad as they would have expected. The geopolitical state of the world leaves room for uncertainty within the inflation realms. This is because trade with the United States is important for a few major European countries. To combat this, there is expected to be another cut by the central banks. The question arises, what else will they do monetarily to protect themselves from this uneasy time. 

 https://www.cnbc.com/2025/03/03/euro-zone-inflation-february-2025.html

 

The Implications of Making the 2017 Tax Cuts Permanent

Senate Republicans want to make the 2017 tax cuts permanent. While lower taxes sound great, they also mean less money for the government, leading to more borrowing. That’s where the debt spiral comes in. If the government keeps borrowing to make up for lost tax revenue, the national debt grows. And if it grows too much, it can slow down the economy in the long run. Some experts worry this could hurt future generations who will have to deal with that debt.

Supporters argue that lower taxes help businesses grow and create jobs, but it's unclear if that growth would cover the lost revenue. The big question is: Can we afford this without hurting the economy in the future?

Source: https://www.reuters.com/en/us-senate-plan-make-trump-tax-cuts-permanent-raises-debt-spiral-worry-2025-03-02/

The CFPB's Fight for Survival

The Trump administration and Elon Musk's Department of Government Efficiency (DOGE) are planning to drastically reduce the Consumer Financial Protection Bureau (CFPB) staff and basically shut down the agency. According to CFPB employees, the bureau leaders plan to fire almost all of its 1,700 workers in three stages, eventually leaving just 5 required positions. 

The CFPB was created after the 2008 financial crisis aiming to protect consumers, and has already seen big changes. It has closed its main office, started layoffs, and stopped most work. The bureau has also dropped several cases against financial firms. While the acting Director says the goal is efficiency, employee statements suggest the aim is to reduce the CFPB to the bare minimum required by law. This raises concerns about the agency's ability to fulfill its duties.

It's worth noting that the current administration can't eliminate the CFPB on its own. Since Congress created the agency through the Dodd-Frank Act, new legislation would be needed to formally eliminate it. This would likely require a supermajority in the Senate. However, the administration is using its power to severely limit the CFPB's operations, effectively trying to dismantle it from within.

The CFPB plays a crucial role in consumer protection. Created in the aftermath of the 2008 financial crisis, it implements and enforces consumer finance laws, issues new rules for financial institutions, and investigates companies suspected of unfair practices. The bureau also handles consumer complaints, provides financial education, and conducts research on consumer experiences with financial products. Since its inception, the CFPB has secured billions in relief for consumers and imposed significant penalties on companies violating consumer protection laws.

Read the article here: https://www.cnbc.com/2025/02/28/cfpb-leaders-and-elon-musk-doge-planned-to-fire-nearly-all-staff.html

Delay After Delay: What is Going on with Intel?

 Intel delays $28 billion Ohio chip factory in New Albany again, to 2030 or 2031

As Ohioans are expecting big things with Intel’s new factory in central Ohio, news of setbacks are discouraging residents. Originally, the factory was set to open in 2025, but has now experienced so many delays that the projection has been moved to 2030. As their goals became even more unrealistic, they realized that a re-evaluation of their timeline was going to cost them even more delays. These delays were made so Intel can align their operations better with the market demands so they can improve their capital responsibly. They want to make sure that everything is in line so that they can set “Ohio up for success,” says the executive vice president of Intel. It is important to note that many experts and government leaders have said that bringing semiconductor manufacturing back to the states is critical for national security. So, this factory is not only important for central Ohio’s economy, but the safety and security of the U.S as a whole. Intel has received $2.2 billion funding as part of the federal CHIPS Incentives Program, and at least $1.5 has gone towards the New Albany project. They also were set to receive $300 million in grants from the Ohio Department of Development to help with the construction of each factory as long as they were completed by 2028. While these setbacks are discouraging for everyone involved, Intel still forecasts the creation of 3,000 new jobs and $20 billion in capital investments for the future. As construction continues at a slower pace, Intel still shows its commitment to Ohio as they get everything in order for successful manufacturing.

European Union Proposes Economic Overhaul Amid Environmental Concerns

    The European Union's executive branch has introduced an ambitious plan to overhaul its economic strategy, responding to industry leaders' worries about high taxes, rising energy costs, and strict regulations. EU Commission President Ursula von der Leyen aims to turn Europe into a center of industrial innovation by relaxing restrictions and offering essential support. However, environmental groups are raising alarms, concerned that deregulation might jeopardize the EU's climate objectives. Critics contend that the plans favor energy-intensive industries, which could weaken the European Green Deal. Despite these worries, von der Leyen reassures that environmental and social commitments will remain intact. The proposal, which includes substantial investments and cost-saving initiatives, will be further reviewed by the EU parliament and member states.

https://apnews.com/article/eu-economy-green-industry-reform-89a3b66611523d676f37c3fc966cf948

Insurers will struggle to dodge climate-change tab

    The frequency and severity of natural disasters are on the rise, resulting in significant economic losses worldwide. In 2024, these losses reached an average of $368 billion, with insurers covering about 40%, which leaves a large part uninsured. As a result, insurers are pulling back coverage in high-risk areas, including certain regions of California and Louisiana. Governments, facing the challenge of managing the financial impact of catastrophic events without imposing politically unpopular tax increases, are looking into collaborative solutions like Britain's Flood Re and Switzerland's pooled risk model. However, these approaches have their drawbacks, often necessitating extra funding after disasters, with insurers likely shouldering a substantial share of the costs linked to climate-related damages.

https://www.reuters.com/breakingviews/insurers-will-struggle-dodge-climate-change-tab-2025-02-26/

Inflation, looming trade war take a toll as confidence of the U.S. consumer tumbles

The Conference Board's report revealed a significant 9.3-point drop in Americans' short-term expectations for income, business, and the job market, falling to 72.9, which may signal a potential recession. This marked the most significant month-to-month decline since August 2021. Concerns over inflation were notable, with an increase in mentions of trade and tariffs. Consumer confidence also dropped, with expectations of a recession rising to a nine-month high. Views on current conditions fell 3.4 points to 136.5, and perceptions of the labor market weakened as consumers became more pessimistic about future business conditions. This shift in sentiment reflects broader concerns about economic stability, as Americans appear increasingly uncertain about the near future. Additionally, inflation's continued grip on the economy, combined with expectations of slower economic growth, has made many cautious about their financial outlook. With recession fears climbing, many consumers are adjusting their expectations downward, and businesses may soon go downwards, too, with their planning and investments. In addition, if Americans feel uncertain or pessimistic about their financial future, they're less likely to spend, which directly impacts demand for goods and services. Lower consumer spending could ripple through other sectors, affecting everything from production to employment. Finally, This news could indicate increased volatility in the stock market, mainly as investors digest these concerns and adjust their strategies. 

https://finance.yahoo.com/news/us-consumer-confidence-plummets-february-150845549.html

Willy Wonka's Golden Ticket

    President Donald Trump has announced that he wants to sell "gold cards" to wealthy foreigners, looking to receive a visa in exchange for $5 million. President Tump said "You have a green card. This is a gold card." The Presidents initial estimation suggests that millions of cards will be sold. When questioned about who would be allowed to buy this gold cards, Trump was asked about Russian Oligarchs in which he said he knows some Russian Oligarchs that are really nice people.

    The idea is not new as the United States currently has an EB-5 immigrant investor visa program, which allows foreign investors to contribute to American projects in exchange for the ability to apply for a US visa. Interestingly, President Trump and his businesses have taken advantage of this program to fund major property developments. 

    The EB-5 program was created in 1992 and grants green cards to immigrants who make a minimum investment of $1.05 million, or $800,000 in economically distressed zones. In 2019, the Trump administration tried to raise these requirements but it was struck down by a federal judge. Eventually, the Biden Administration revisited the requirements in 2022. 

    The end goal of the new gold card is unclear as it quickly received bipartisan criticism. Both sides mentioned that this new program either deviates from the administrations goals or needs heavy reform. 

Latin America’s China Ties Won’t Be Easily Severed

The growing competition between the U.S. and China is changing politics in Latin America. A recent example is Panama, which decided to step away from China’s Belt and Road Initiative after a visit from U.S. Secretary of State Marco Rubio. This shows Panama moving closer to the U.S., but not all Latin American countries will follow the same path. Over the last 20 years, while the U.S. focused on wars in the Middle East, China built strong trade relationships in the region, becoming the top trading partner for many countries, including Brazil. Now, the U.S. wants to regain its influence, but that won’t be easy because many countries rely on China for trade and investment.

Mexico is in a tricky position—it has a strong trade partnership with the U.S. under the USMCA deal but is also seeing a big increase in Chinese investment. Other countries like Argentina, Peru, Chile, and Bolivia have welcomed China’s money for projects in farming, mining, and infrastructure. While Trump may not try to completely cut China out of Latin America, he is likely to push back against Chinese influence in key areas, especially those affecting U.S. security. Many Latin American nations may try to stay neutral in this power struggle, but because China’s economic role is so big, avoiding taking sides will be difficult.

https://americasquarterly.org/article/latin-americas-china-ties-wont-be-easily-severed/

German business leaders say new government must act quickly to rescue stagnant economy

German business leaders say new government must act quickly to rescue stagnant economy 

Link: https://finance.yahoo.com/news/german-business-leaders-government-must-143737702.html

Germany had elections on Sunday February 23rd where the center-right party won and subsequently put their leader Freidrich Merz in the seat as chancellor. Germany had a high voter turnout of 82.5% (compared to the average 66% American voting turnout as a point of reference) and commentators point to the public desire for a change in direction as the reason.

Freidrich Merz has vowed to prioritize European unity and security as it deals with global shifts and concerns over the new Trump administration as well as the Russia and Ukraine war. As the chancellor, Merz will be tasked with providing a unified front pulling the continent together as well as domestically. The chancellor also determines the composition of the Federal Cabinet. There is a complication to this for Merz as domestically there is a desire for there to be a coalition formed between the center left Social Democrats as Merz has already vowed to not work with the far-right Anti-Immigrant Alternative party. 

Merz knows that the “world out there isn’t waiting for [Germany]” as he looks to unify the country and in the process perhaps fulfill hopes of a coalition that strengthens the center ground and works hard to draw investments to their country. Currently, Germany is facing struggles with companies cutting jobs, deciding against investing in Germany, and burdening taxes for workers and firms. Now, time will tell if they find the “fiscal space” to figure it out and if they can do it “quickly.”      

Apollo Economist Warns DOGE Layoffs Could Threaten U.S. Economy and Markets

Elon Musk’s Department of Government Efficiency (DOGE) layoffs could have a much greater impact on the economy and financial markets than previously expected, according to economist Torsten Slok. He warns that while initial estimates suggested 300,000 layoffs, the total number could reach 1 million when factoring in contract workers, who make up 66.5% of the federal workforce. These cuts are historically significant, mirroring reductions under Bill Clinton, and come as agencies like the IRS and Forest Service have already laid off up to 220,000 probationary workers. Despite a relatively strong economy, with 4% unemployment and 2.3% GDP growth, billionaire investor Steve Cohen cautions that reduced federal spending could negatively impact markets and growth. President Trump, who has long tied stock market performance to his success, has seen the S&P 500 decline since taking office, despite an initial post-election rally. However, some analysts, like Morgan Stanley’s Michael Wilson, argue that while DOGE’s cost-cutting measures may slow growth in the short term, they could ultimately strengthen the economy by promoting private sector expansion and improving long-term fiscal sustainability. 

Article: https://www.forbes.com/sites/dereksaul/2025/02/24/doge-layoffs-pose-growing-risk-to-us-economy-and-markets-says-apollo-economist/

D.C. Unemployment Surge

Unemployment claims in Washington, D.C., spiked to 1,780 for the week ending February 8, 2025, a 36% increase from the week before.  Nearly 4,000 D.C. workers have filed for unemployment since Trump took office, with the surge starting in the new year.  This rise coincides with Trump and Elon Musk's push to reduce the federal workforce, leading to layoffs and buyout offers.  While D.C. had one of the highest unemployment rates at 5.5% in December 2024, the broader national job market remains stable at 4% unemployment.  The impact on D.C. workers depends on their industry. Those in fields like accounting may find new jobs quickly, while others in areas like software development may struggle.  Many displaced workers may find new opportunities due to their valuable skill sets. 

Portland's 'Urban Doom Loop'

Right after the Pandemic, there was a lot of hubbub over the concept of 'urban doom loops' as companies shut down and people left offices in major cities to work from home. As people left, offices became more vacant, economies shrunk, and more people moved away. Although predicted to occur across the country, at the time, this trend was associated with what was happening in San Fransisco. Post-pandemic, this worry seemed to be placated, as San Fransisco brought in big tech to revitalize parts of its economies, and many cities recovered from the pandemic recession. One such case, unfortunately, is not Portland. Portland is suffering from population loss, leaving economists predicting an 'urban doom loop' ahead. Although, according to the KGW8 article, Portland's economy is usually responsive to the general economy, this no longer seems to be the case. Portland has been in the news cycles for the past couple of years- usually because of Oregon's 2021 decriminalization of drugs- but generally for its homeless population. It is often pointed to as an example of urban decay in America due to politicized issues like housing and criminal justice reform. As debates occur over how cities should be governed, the question of how to revitalize cities still looms large, and Portland is no different. 

Source: https://www.kgw.com/article/news/local/the-story/portland-state-of-economy-urban-doom-loop-population-income-loss/283-b7bde05a-9d3d-4a61-9a18-870d63849f0f

Conservative Opposition Wins German Election

The Christian Democratic Union allied with the Christian Social Union won the largest share of votes in the German elections today according to exit polls. The two conservative parties secured 28.5% of votes, while the far-right Alternative for Germany (AfD) won 20%. In third place with 16.5% of the votes is Chancellor Olaf Scholz’s Social Democratic Party. The CDU’s lead candidate, Friedrich Merz, is currently the frontrunner to succeed Scholz as Chancellor. Germany’s previous government was a coalition made up of the SPD, Green Party, and the Free Democratic Party. This coalition fell apart last year due to disputes within the government over economic fiscal and budget policies. The conservatives will set up a government as Germany, the largest economy in Europe, is lagging. The economy has shrunk over the past two years, and industries such as housebuilding and auto are facing difficulties. It will be important to keep a watch on Germany as the new government is formed and new policies are put into place, as the state of the German economy has a large impact on the economic performance of the EU.

 

https://www.cnbc.com/2025/02/23/german-2025-federal-election-results.html

Musk orders U.S. federal workers to report on work by Monday or resign

 The Trump administration and mainly Elon Musk has sent a mandatory email to federal employees to send in a detailed explanation of what they did as an federal employee last week. If they refuse to send the required request they will ultimately be sending in their resignation. However, the AFGE (Labor Union) has promised to fight any unlawful terminations. But it seems like this DOGE, from the Trump administration, has been quite rushed and even labor unions cannot fight it. Many people believe that because of this DOGE process there has been many mistakes because of its fast paced movement. "Doge has led to haphazard firings that resulted in numerous mistakes and forced several agencies to quickly rehire vital employees, such as working in nuclear safety, defense and power generation." Trump has said many times that Musk is well fit for DOGE. On the other hand the white house says Musk is not even an employee for DOGE and this is why federal agencies are asking employees not to summit emails back because of absence of validity. It will be interested to see what happens.  

https://www.cnbc.com/2025/02/23/musk-orders-us-federal-workers-to-report-on-work-by-monday-or-resign.html 

Are Our National Parks in Crisis?

Our national parks welcomed over 325 million visitors in 2023, showing significant growth from the previous year, and the trend continues to rise. One might expect that this surge in visitors would create more job opportunities within these parks. However, the opposite has occurred; from 2010 to the present, our national park workforce has decreased by 20%. Many employees fear for their jobs, especially since the new presidential administration took office. The National Parks Conservation Association (NPCA) has highlighted multiple challenges regarding both permanent and temporary positions, as 2,000 workers have lost their jobs. This situation has led to staff shortages nationwide, with new employees enduring probationary periods that could result in further terminations. 

This staff shortage has placed a significant strain on the remaining workers within the parks. NPCA leaders emphasize that adequate staffing and resources are crucial for national parks to fulfill their mission and safely accommodate millions of visitors. They are concerned that these policy changes may not only impact the natural environment but also have serious implications for visitor safety and experience. The NPCA warns that this could lead to unsafe conditions, overflowing trash, and unclean facilities, which would compromise the environment and diminish the visitor experience.

 It is essential for us to stay informed about these issues and policies. I wasn’t even aware that these changes were taking place due to federal decisions, and that the parks would even be affected, however, the temporary pause on federal grants set forth by our government has disrupted the funding for vital park projects. This could cause severe damage to our national parks and facilities.

If we want to preserve these national treasures, we must advocate for their protection. By remaining engaged, we can help ensure these invaluable resources are protected for future generations.

Sources: https://www.npca.org/articles/6680-how-the-new-administration-s-actions-will-affect-national-parks

 IRS Layoffs May Delay Tax Refunds

The Internal Revenue Service (IRS) is laying off over 6,000 employees during the peak tax filing season. This decision is part of President Donald Trump's initiative to reduce government spending. The layoffs are expected to cause significant delays in processing tax refunds. Financial expert Armine Alajian highlighted that the strain on IRS resources would worsen the already challenging process for taxpayers. These job cuts specifically target the Small Business/Self-Employed Division. The layoffs follow Trump's executive orders to reduce the federal workforce and expenses, implemented with the help of Elon Musk’s Department of Government Efficiency (DOGE). Critics argue that the cuts are counterproductive, potentially leading to greater losses in uncollected tax revenue. Taxpayers are advised to file electronically and as soon as possible to mitigate expected delays.

Source: https://www.cbsnews.com/philadelphia/news/wheres-my-tax-refund-irs-layoffs-impact-your-returns/

Eli Lilly’s Obesity Drug Profits Drive Bold Investments in High-Risk Diseases

 

Eli Lilly’s top-selling GLP-1 drugs, Mounjaro and Zepbound, have transformed the company, increasing sales by nearly 60% since 2022 and driving its stock price up 268% over the past three years. With a market cap of $823 billion, Lilly is now the largest healthcare company in history. This financial success has given the company the resources to target diseases that many pharmaceutical firms avoid due to high costs and uncertain returns. Chief Scientific Officer Dan Skovronsky has emphasized Lilly’s commitment to tackling health issues that are “hiding in plain sight,” such as Alzheimer’s, ALS, chronic pain, heart disease, and addiction. By reinvesting its obesity drug profits into these complex medical challenges, Lilly aims to create long-term value for both patients and investors.

Lilly is also investing heavily in genetic medicine, an area facing major financial and scientific hurdles. In 2023, the company opened the $700 million Lilly Institute for Genetic Medicine in Boston to advance gene therapy, despite industry-wide struggles in drug delivery methods. If Lilly can overcome these challenges, it could lead to a new wave of high-value treatments. This strategy highlights a key lesson: reinvesting profits into high-risk, high-reward innovation can drive long-term financial growth while addressing critical public health issues. The success of Lilly’s investments will depend on scientific breakthroughs, but if they pay off, they could reshape both medicine and the pharmaceutical market.

source :  https://www.cnbc.com/2025/02/20/eli-lilly-to-take-big-swings-in-alzheimers-als-and-gene-therapy.html

Europe's Golden Economy Continues to Slide

 The German economy has found itself in a stagnant economy over the last few years, even tumbling and losing some needed output. The economy has shrunk for 2 years in a row now, essentially erasing any progress that they had made since COVID-19.

German manufacturing output (a huge part of their economy) is down 10% over the last 2 years, and as a result, they have lost thousands of jobs. This is not entirely their fault. The Ukraine-Russia war, sanctions by the United States on Russia, a US focus on local manufacturers following the election, and a Chinese economic slowdown has put an economic squeeze on German production.

Germany, has not handled this well - fingers have been pointed at the government for mismanaging the various crises. There has been little focus on the Eurozone debt crisis, they have created a CO2 energy crisis, and the car manufacturers have made poor decisions amidst all the struggles.

Will the German economy continue to tumble? Will they be able to make the corrections needed to continue fueling the European economy?

https://www.wsj.com/world/europe/why-germanys-confidence-is-shattered-and-its-economy-is-kaput-d1d95890

Artificial Intelligence Within Europe and its Economical Impact

As artificial intelligence continues to advance, Europe has enacted stringent laws and restrictions to forbid participation in the AI race. Sweden’s Prime Minister Ulf Kristersson recognized the issue in a recent press release, and refers to Europe as a potential “museum” if things continue. The French government also recognized the concern, as President Emannuel Macron announced a 109 billion euro investment within AI development, including support from UAE, China, and American investment funds. 

United States Vice President JD Vance recently spoke about the topic, claiming that European officials need to embrace AI’s growth and potential, rather than focusing on regulations. Vance would also claim the United States to be the leader in technology with hopes of more European partnership in the future. The effect this has on the European economy is a bigger worry because it has been stated that the AI laws have caused businesses to migrate.

I find this topic very interesting, as artificial intelligence has flooded the news within the past few years. We see the large companies such as OpenAI and Deepseek invest billions into advancements, but we never hear any news from European companies. It appears as if the regulations in place currently will negatively affect the GDP of many European countries. Will lawmakers come to an understanding that AI is inevitable, and that working with it is much better than working against it, or will they double down on their current stance? I think this is all valuable information to consider. 

Link : https://www.cnbc.com/2025/02/20/europe-risks-becoming-museum-without-innovating-in-ai-swedish-pm.html

Top Social Security Official Steps Down Over Disagreement with DOGE

Michelle King, the top official at the Social Security Administration, has stepped down after refusing to grant Musk's Department of Government Efficiency access to highly sensitive records. There may be concern about implications of allowing DOGE to access sensitive information such as bank information, Social Security numbers, and even medical records. Trump cracking down on fraud is evident and the rationale behind it is understandable, but the Social Security Administrations inspector general found that only 0.84% of payments between 2015 and 2022 were improper.

It will be interesting to see if these tensions will be quickly resolved or if this could bring about an even larger debate over privacy rights and governmental oversight. I believe that the administration will face increased scrutiny as this issue continues to unfold. As for us, the public, it will also be important to remain vigilant and aware about any changes to how personal information is handled by the government and its agencies. 

Link: https://www.cnbc.com/2025/02/18/top-social-security-official-steps-down-after-disagreement-with-doge-over-sensitive-data.html

U.S. Consumers Stockpile Goods in Response to Trump’s Tariffs

 A recent CreditCards.com report highlights that one in five Americans is stockpiling essential goods in response to tariffs imposed by President Donald Trump. These tariffs, targeting imports from China, Europe, and Mexico, are intended to reduce the U.S. trade deficit and promote domestic manufacturing. However, the resulting fear of rising prices has led to increased bulk buying at retailers like Walmart and Costco, particularly for non-perishable foods, medical supplies, and household items.

The psychological impact of tariffs is also noteworthy. Many Americans recall the shortages during the COVID-19 pandemic, and this past experience has amplified stockpiling behavior. Experts believe this could create a self-fulfilling cycle, where the fear of rising costs triggers increased demand, leading to temporary shortages and actual price hikes. Retailers have also responded by limiting bulk purchases on high-demand products, similar to the rationing seen in 2020.

Economists and businesses warn that these tariffs could worsen inflation by raising consumer prices. Industries like automobiles, technology, and pharmaceuticals are already facing higher costs for imported components, which may soon be passed on to consumers. The Federal Reserve has raised concerns that tariff-induced inflation could delay anticipated interest rate cuts in 2025.

Policymakers face the challenge of balancing protectionist trade policies with economic stability. If stockpiling and rising costs continue, it could strain supply chains, weaken consumer confidence, and further fuel inflation, all of which would have long-term economic consequences.

https://www.reuters.com/world/us/us-consumers-rush-buy-trump-tariffs-fuel-stockpiling-report-finds-2025-02-18/?utm_source=chatgpt.com

Bleak January as corporate insolvencies at highest for five years

    In January 2025, corporate insolvencies in England and Wales reached a five-year high, with 1,971 companies entering insolvency—a year-on-year increase of 11%. This surge is attributed to prolonged economic challenges and anticipated rises in labor costs, including increases in employers' national insurance contributions and the national minimum wage. Experts warn that sectors employing large numbers of minimum wage workers, such as retail, leisure, and hospitality, are particularly vulnerable. Despite the Bank of England's efforts to stimulate growth by cutting the base rate, business confidence remains low, leading to uncertainty in investment and expansion plans. The government has announced a 6.7% increase in the national living wage, from £11.44 to £12.21 per hour, effective in April, further intensifying cost pressures on businesses.

https://www.thetimes.com/business-money/companies/article/bleak-january-as-corporate-insolvencies-at-highest-for-five-years-wrz2xhhb2

Miner Glencore considers ditching London Stock Exchange listing

    Glencore, one of the world's largest mining and commodity trading companies, is considering moving its primary stock market listing from the London Stock Exchange to the New York Stock Exchange. This strategic move is driven by the desire to access a broader investor base, improve valuation, and enhance liquidity. The potential shift comes as Glencore faces declining profits due to lower commodity prices, impacting its financial performance. If implemented, this relocation would be a significant blow to London's financial market, which has been struggling with high-profile departures recently.

    This decision is also influenced by the fact that U.S. markets typically offer higher valuations for commodity firms compared to European exchanges. Additionally, Glencore's considerations follow similar moves by other multinational corporations seeking better market conditions and investor engagement in the U.S.

    The company's review is still in its early stages, and no final decision has been made. However, if Glencore proceeds with this plan, it would be the latest in a series of significant exits from the London Stock Exchange, highlighting ongoing challenges for the UK financial market post-Brexit.

https://www.theguardian.com/business/2025/feb/19/glencore-ditch-london-stock-exchange-new-york

 

European stocks are outperforming their U.S. counterparts — but for how long?

European stocks have kicked off the year with surprising vigor, significantly outpacing their U.S. counterparts in both January and February. The pan-European Stoxx 600 rose 6.3% in January, compared to the S&P 500’s 2.7%, and has continued this momentum into February, posting a 3.3% gain versus the S&P 500’s 1.25% as of February 18. Analysts attribute Europe’s strength to several factors: lingering hopes for a Russia-Ukraine ceasefire (which would lower risk premiums and stabilize energy prices), fiscal expansion in Germany, and the passage of France’s contentious 2025 budget—all of which give investors confidence in Europe’s economic prospects. Meanwhile, the U.S. market grapples with tariff-driven inflation concerns and a Federal Reserve that appears to be on hold, in contrast to European central banks that are leaning toward rate cuts. Earnings revisions in Europe have also been notably positive, a sign that has historically led to outperformance in the months ahead. However, some strategists warn that this advantage may prove short-lived; while Europe’s recent run has been impressive, annual results over the last decade, barring 2022, have typically ended with U.S. markets on top. With U.S. corporate earnings continuing to show robust surprises and Europe’s economic data far from universally strong, investors remain cautious about whether the current outperformance can be maintained throughout the year. 

Link: https://www.cnbc.com/2025/02/19/europe-stocks-are-outperforming-the-us-this-year.html

What is Going on with Columbus's Housing Market?

    Looking into 2025, there are definitely some notable trends and economic factors that will influence central Ohio’s housing market. Compared to last year, Columbus saw steady demand, moderate price growth, and a dynamic mix of housing options making it “one of the best places to invest in real estate in the US.” Because of its affordability, job growth, and strategic location, Columbus’s market has remained very strong despite rising inflation. Increase in demand has caused a 3.3% rise in housing prices in one year from 2023 to 2024. While the median sale price of a home is around $315,000, prices differ based on different factors like proximity to downtown, access to amenities, and local demand. Because of the higher demand and tight housing inventory, listings are on the lower side compared to other years causing heavy market competition. Often buyers will encounter multiple-offer scenarios causing sales in high-demand neighborhoods to skyrocket. Contractors are trying to keep up with the growing demand, but rising material costs, labor shortages, and zoning restrictions have put limits on the pace of new development. Recently Columbus has experienced a slowdown in the average number of days a listing is on the market (26 days from 22 days) which suggests that 2025 may see a steadier demand for buyers and an increase in housing supply. Although this is promising, we are only a month and a half into the new year and a lot can change from now until December 2025. I think it will be interesting to see how the new industrialization that we are expecting to see in the next couple of years will impact the supply and demand of housing in the future. If you want to look at more in-depth analysis and neighborhood specific data, I suggest looking at the article linked below.

Columbus Housing Market Analysis & Forecast 

 

Why Unemployment is Rising in DC

 With President Trump moving to fire thousands of government workers, DC has seen a large increase in unemployment claims. All this under the claim that these actions will increase government efficiency. On this subject Tom Nichols, a writer for The Atlantic, said "One of the greatest tricks that Donald Trump and Elon Musk ever pulled is to convince millions of people that DOGE, the self-styled Department of Government Efficiency, is about government efficiency." Trump claims that it is about government efficiency and reducing government involvement but why Trump is actually doing this is up to speculation. 

Wholesale Inflation Rose in January More Than Expected

https://www.usnews.com/news/economy/articles/2025-02-13/wholesale-inflation-rose-in-january-more-than-expected

The recent report on wholesale inflation in January showed a higher than expected rise of 0.4% It's somewhat concerning since it signals that inflation is still not under control. This isn't just about gas and grocery prices anymore but it's a sign that prices are climbing across the board, which could mean more strain on consumers in the months ahead. From my perspective, the Fed is in a tough spot. The aim to get inflation back down to that 2% target looks increasingly challenging. They've been raising interest rates in hopes of cooling the economy, but these figures show that inflation is stubborn and persistent. It's also easy to get frustrated by the impact on everyday people especially those like me in urban areas like New York, where inflation feels more intense. The cost of living is already high, and further price increases only widen the gap. With wages not keeping pace, this rising inflation could feel like a persistent weight on people's finances, making it even harder to achieve real financial security. As we look ahead, the next few months will be crucial to see how these trends unfold and whether the Fed's policies will have the desired effect or if we'll be stuck in this cycle of inflation for longer than we want.

Bank of America CEO Confident in Rates Remaining the Same

    Bank of America CEO, Brian Moynihan, sat down with an interview with CNBC recently. During the interview he was asked about the current status of rate expectations for the near future. He announced that since the start of the year Bank of America members have spent much more throughout the first 40 days of the new year than in 2024.  For comparison, retail spending is up 6% than it was at the same time last year. Moynihan says that this increase is realistically caused by inflation. He claims that there is not more being bought, but instead everything is just more expensive. 

    During the month of January the Fed decided to keep the borrowing rate unchanged at a range of 4.25%-4.5%. The Bureau of Labor Statistics also came out and reported hotter-than-expected growth in the consumer price index; in line with the results that Bank of America are finding at the beginning of the year. Due to this "hotter-than-expected growth" in the CPI the markets are forced to recalibrate all rate expectations.  Recently back in September the Fed began to reduce rates for the first time since the pandemic in 2020, but the central bank is currently limited with how much it can reduce due to stubborn inflation.

    Moynihan concluded by stating that due to the rates being restrictive, there has not been enough progress made with inflation to cut the rates. The Bank of America analysts project the same with no rate reductions along with no increases all due to the elevated inflation that we are all experiencing.

https://www.cnbc.com/2025/02/12/bank-of-america-ceo-brian-moynihan-inflation-federal-reserve-rates.html 

Joann Fabrics to Close 500 Stores: The Latest Victim of the Retail Apocalypse

Joann Fabrics, the well known fabric and crafts retailer that began in Hudson, Ohio, is set to close approximately 500 of its stores in 49 states as part of its ongoing Chapter 11 bankruptcy proceedings. This decision came after the company filed for bankruptcy for the second time in less than a year, stating challenges such as sluggish consumer demand and inventory shortages. The closures will impact thousands of employees, including over 600 at corporate headquarters and additional fulfillment center jobs. 

Going-out-of-business sales are expected to begin on Saturday and may last for several months. While gift cards will still be accepted for in-store purchases, they will not be valid for online shopping. The Ohio-based company, which operates more than 800 stores, declared bankruptcy in March 2024 while reporting over $1 billion in debt. In court documents, Joann blamed higher costs from shipping overseas products and waning consumer demand. The closures are part of a broader restructuring effort aimed at maximizing the business's value as it seeks potential buyers amid rising operational costs and increased competition from larger retailers.

Joann's financial troubles have been clear in its stock performance. After going public in March 2021 at $12 per share, the company's stock steadily declined to below $1 by early 2024. Following its first bankruptcy filing, Joann was delisted from NASDAQ and briefly traded over-the-counter before emerging as a private company in August 2024. However, this restructuring proved insufficient, leading to the current second bankruptcy and massive store closure plan.

Joann now joins a growing list of struggling retailers forced to close locations or file for bankruptcy given changing consumer habits and economic pressures. Companies like Big Lots, Express, Party City, Macy's, JCPenney and Walgreens are also closing hundreds of stores this year as the retail industry faces experiences challenges from inflation, high operating costs, and declining discretionary spending. Over 15,000 stores are expected to close in 2025, more than double last year's total, marking what some call the "retail apocalypse".

Read the article here: Joann moves to close 500 of its stores across the US amid bankruptcy

South Korea's top think tank lowers economic growth projection, citing Trump's tariffs

    The Korea Development Institute (KDI) has revised South Korea's 2025 economic growth forecast downward to 1.6%, a 0.4 percentage point decrease from previous estimates. This adjustment is primarily due to the negative impact of increased U.S. tariffs under President Donald Trump, which have heightened trade uncertainties, especially in key export sectors like steel, aluminum, and semiconductors. Domestic factors, including slowing consumer spending and political instability following the impeachment of President Yoon Suk Yeol, have further contributed to the economic downturn. The political crisis has weakened domestic demand and increased external risks, prompting considerations for negotiations and international collaboration to mitigate these challenges.

https://apnews.com/article/south-korea-economy-growth-trump-trade-tariffs-4eef3c90e8ce98a9d7fb5fbfaa3405fb

Japan's trade deficit for digital service rose to record ¥6.6 trillion in 2024

    In 2024, Japan's digital trade deficit soared to a record ¥6.65 trillion, more than tripling since 2014. This deficit encompasses international transactions in digital-related services, including payments for music and video distribution, cloud computing services, and online advertising fees. The surge is attributed to the dominance of global IT giants like Microsoft and Google, leading to faster growth in imports compared to exports in Japan's digital sector. Despite an overall current account surplus of ¥29.26 trillion, bolstered by higher dividends and interest from abroad, the substantial digital trade deficit highlights challenges in Japan's digital economy.

https://www.japantimes.co.jp/business/2025/02/11/economy/japan-digital-trade-deficit/#:~:text=Japan's%20digital%20trade%20deficit%20hit,began%2C%20a%20government%20report%20shows.

Pig Butchering, Read Because It's Not What You Think

    Pig butchering, which is Chinese criminal slang, accounts for over 500 billion dollars stolen a year from victims all around the world. The name is derived from the process itself as the scammers build a sty (scamming center), pick the pig (find a target), raise the pig (gain trust), cut the pig (get their money), and finally butcher the pig (take every last drop of money). This is a fast growing industry that is only going to get more complex with the use of AI. In Singapore, scams have become the most common felony, while Cambodia and Myanmar employ nearly 250,000 scammer alone. Some estimates have the worldwide total of workers in the industry at 1.5 million. 

    Online scamming is being compared to the illegal drug industry, only that its scope is much larger and its operators are much harder to track down. People from all walks of life are possible victims as scammers prey on anyone who has wealth, is lonely, or innocent. Unlike narco states, scam states are much harder to deal with as corruption runs rampant. In many cases, profits from the scam states are used to buy protection from politicians and officials. Forming underground gig economies, scam groups are illusive and often unidentifiable. 

    As the United States and China continue to be in a constant state of disagreement about everything, including the modern era space race that is artificial intelligence. However, this seems like a better time than any to link forces to fight this war. Deep-fakes, voice impersonation and much more are just the tip of the iceberg when it comes to the future of the internet. China has taken some efforts to curb the problem, but they cannot achieve the end goal alone. The United States has an aging population that is subject to scams just like this, so they need no more incentives to set aside their differences, and move together towards a common good. 

https://www.economist.com/leaders/2025/02/06/the-vast-and-sophisticated-global-enterprise-that-is-scam-inc

Outrage after JD Vance claims judges are not allowed to check executive power

Outrage after JD Vance claims judges are not allowed to check executive power

Link: https://www.theguardian.com/us-news/2025/feb/10/jd-vance-judges-trump

Though this article is not inherently economic, I think it poses an interesting question in regard to rule of law which relates to some of our in-class analysis of the United States markets. 

Within this article, the Vice President of the United States JD Vance attempts to analogize judges telling generals how to conduct their armies in tactical strategy to that of judge’s checking executive power. While it is true that the President has the power to issue executive orders, it is also true that judges have the power to check them and strike them down if considered unconstitutional. For our purposes, we only need to turn to article III of the Constitution and if that doesn’t satisfy we have a nation’s history worth of lawful precedent.

This attempt to dismantle the court’s legitimacy in a time where things are already uncertain with a flurry of decisions flying out every day, is certainly just a political jab, but has far greater consequences. The courts and the rule of law derive their power from their legitimacy. Without it, there is truly no power. This is why countries with no rule of law score so low on human development indexes and companies choose to not operate here. Rule of law applies to everyone including the government. 

Additionally, yes it is true that court’s are not immune to folly or human error and thus it is the responsibility of the people to hold them accountable. However, this is not the case. A judge cannot simply strike anything they please down. What they’re doing is using the law and the safeguards/systems in place to ensure that orders comply with laws. 

Furthermore, like most people, Trump has gone out of his way to applaud the Court’s when they rule in his favor. The rule of law is not an institution one can pick and choose. I think the dismantling of Court legitimacy will have serious consequences in terms of the nation’s health and economy.