Economics

Summary

Costco will raise hourly pay for most U.S. store workers, increasing top-tier wages to $30.20 in the first year and adding $1 annually for two more years.

Entry-level workers will see a $0.50 increase to $20 per hour.

The move follows a strike authorization by the Costco Teamsters union, representing 18,000 employees, amid contract negotiations.

CEO Ron Vachris stated the pay hikes keep Costco’s wages ahead of industry standards.

Summary

Donald Trump plans to impose 25% tariffs on imports from Canada and Mexico, potentially raising prices on goods like gas, cars, and food.

The move threatens the USMCA trade deal, which Trump previously negotiated, and could provoke retaliation—Canada and Mexico have vowed countermeasures.

Analysts believe the tariffs aim to pressure both countries on immigration, fentanyl, and trade concessions.

Businesses fear economic disruption, while industry leaders warn of uncertainty.

Summary

The market’s panic over DeepSeek R1 reflects a misunderstanding of AI, much like past overreactions in tech.

Despite claims that DeepSeek’s efficiency gains threaten AI investment, AI demand remains high, particularly in software development.

The release’s timing—amid Davos groupthink and a $500B AI investment plan—amplified market hysteria.

While DeepSeek offers advancements, efficiency gains are expected, and AI still faces key limitations.

Major infrastructure investments will continue, as breakthroughs are needed for AI’s broader usability.

Summary

Tesla reported weaker-than-expected Q4 2024 earnings, with revenue at $25.71B and 495,570 vehicle deliveries, marking its first annual decline.

Competition from China's BYD, reduced European EV subsidies, and falling demand for older models contributed to the slump.

The Cybertruck's launch failed to offset losses, and Tesla faces federal scrutiny over self-driving tech.

Despite setbacks, Tesla's stock doubled over the past year, partly due to investor confidence in Elon Musk’s political connections and potential U.S. tariffs on Chinese EVs benefiting the company.

Summary

The Federal Reserve is holding its first meeting since Trump’s second term began, with interest rates expected to remain unchanged at 4.25%-4.5%.

Trump has called for immediate rate cuts, but the Fed is likely to hold steady as it assesses inflation risks from his proposed tariffs and mass deportations.

Former Fed officials emphasize the need for independent policymaking amid White House pressure.

Investors will closely watch Chair Jerome Powell’s post-meeting remarks, given his historically tense relationship with Trump over monetary policy.

Summary

Boeing reported a $11.83 billion annual loss in 2024, its largest since 2020, driven by issues in its commercial and defense units, as well as a crippling West Coast workers' strike.

The company also posted a $3.86 billion Q4 loss due to charges in fixed-price defense programs and saw revenue drop 31% to $15.24 billion.

CEO Kelly Ortberg emphasized efforts to stabilize production and improve company culture after setbacks, including 737 Max safety concerns, pandemic impacts, and a mid-air accident.

Boeing burned $14.3 billion in cash in 2024.

Summary

Chinese AI startup DeepSeek has disrupted markets with its cost-effective AI chatbot, R1, which rivals U.S. models like OpenAI’s but uses cheaper Nvidia H800 chips.

Founded in 2023, DeepSeek gained attention after releasing an AI model with advanced reasoning capabilities and open-source components.

The company’s rise challenges U.S. AI dominance and export controls, fueling geopolitical debates.

Nvidia’s stock dropped 17%, and analysts suggest the U.S. AI sector faces a “Sputnik moment” in its competition with China.

Summary

Egg prices have surged, with a dozen large Grade A eggs averaging $4.15 last month, a 37% increase year-over-year.

The rise is driven by bird flu, which killed over 16 million hens since December, reducing supply.

The Midwest, a key egg production region, has been hit hardest due to migratory bird patterns and a new strain affecting dairy cattle.

Other factors like holiday demand and rising feed costs also contribute.

Summary

Costco is resisting a shareholder proposal urging an evaluation of potential business risks linked to its diversity, equity, and inclusion (DEI) practices. The proposal argues that Costco’s DEI initiatives pose litigation, reputational, and financial risks.

Costco believes its commitment to inclusion is essential and that the requested report would not provide valuable information. This stance contrasts with other major companies, which have scaled back DEI programs due to pressures from conservative groups and the Trump administration.

Costco’s support for DEI sets it apart from other companies facing similar pressures.

Summary

Over 18,000 Costco workers represented by the Teamsters union voted to authorize a nationwide strike, with 85% supporting the move.

The union demands "fair wages and benefits" after Costco reported $254 billion in annual revenue and $7.4 billion in profits, a 135% increase since 2018.

Teamsters set a January 31 deadline for a new contract, warning of a strike if demands are unmet.

Workers held practice pickets across the U.S., emphasizing their role in Costco’s success and urging the company to negotiate an "industry-leading agreement."

Summary

U.S. solar farms are increasingly using sheep for "solar grazing," where livestock manage vegetation under solar panels.

This agrivoltaic practice, blending energy production with agriculture, has grown with over 60 projects across 27 states.

Sheep are ideal for navigating tight spaces under panels, offering a sustainable alternative to gas-powered mowers.

The trend boosts struggling sheep farming, with operators like Texas Solar Sheep growing rapidly.

While praised for reducing land-use conflicts, experts highlight unanswered questions about long-term environmental impacts and soil health in solar-grazing systems.

Summary

A report by the Institute and Faculty of Actuaries (IFoA) and the University of Exeter warns that climate change could slash global GDP by 50% between 2070 and 2090 due to catastrophic events like fires, floods, and ecosystem collapse.

The study criticizes current economic models for underestimating risks such as tipping points and societal instability.

It calls for immediate action to decarbonize, restore nature, and adopt a "planetary solvency" approach to policymaking.

Without intervention, global heating could lead to billions of deaths, failed states, and long-term economic devastation.

Summary

Donald Trump’s renewed threats of steep tariffs on Chinese imports are driving manufacturing operations to Mexico instead of back to the U.S., undermining his goal to revive domestic production.

Companies are capitalizing on Mexico's tariff-free trade under the USMCA, low labor costs, and proximity to the U.S.

Chinese firms like Lingong Machinery and Hisense, alongside global corporations, are investing billions in Mexican manufacturing.

Critics argue this shift highlights the impracticality of reshoring to the U.S. due to high costs and workforce shortages, creating uncertainty for businesses.

Summary

The FTC, joined by Illinois and Minnesota, has sued Deere & Company, alleging the agricultural equipment giant monopolizes repair services by restricting access to necessary tools.

This forces farmers to rely on authorized dealers, raising repair costs and causing delays.

The FTC argues Deere's practices harm farmers by limiting competition and driving up expenses through Deere-branded parts.

The lawsuit seeks to ensure farmers and independent shops have access to repair resources.

Filed in Biden’s final days, its future under Trump’s administration remains uncertain.

Summary

The Consumer Financial Protection Bureau (CFPB) is suing Capital One for allegedly misleading customers about interest rates on its savings accounts, resulting in over $2 billion in lost interest.

The CFPB claims Capital One failed to inform "360 Savings" account holders about the higher-yield "360 Performance Savings" account, freezing the former's rate at 0.3% while the latter rose to 4.35% by 2024.

Capital One denies the allegations, asserting transparency and vowing to defend itself.

The lawsuit highlights concerns over deceptive banking practices and customer trust.

Summary

As Donald Trump's second inauguration nears, Americans are rushing to buy goods like electronics, appliances, construction materials, and shelf-stable foods ahead of his proposed tariffs on imports.

The tariffs, including a 25% increase on Mexican and Canadian imports and 10% on Chinese goods, are expected to raise prices significantly.

Nearly half of Americans surveyed have altered purchasing plans to avoid higher costs.

Economists warn the tariffs could raise household expenses by $1,900 to $7,600 annually. Despite inflation concerns, Trump maintains tariffs "cost Americans nothing."

Summary

A study in Nature Human Behaviour finds that children born into poverty in the U.S. are significantly more likely to remain poor as adults compared to peers in Denmark, Germany, the U.K., or Australia.

While childhood factors like education and neighborhoods matter, the study identifies limited government support for adults as the key driver of poverty persistence in the U.S.

Unlike peer nations with robust tax-and-transfer systems, the U.S. provides fewer benefits to poor adults, perpetuating poverty.

Policy changes, such as expanded welfare programs, could significantly reduce intergenerational poverty.

Non-paywall link

Summary

Consumers may face a 20% rise in prices for staples like food, drink, electronics, and chemicals in 2025 due to global supply chain disruptions, Middle East tensions, and rising shipping costs, according to the Chartered Institute of Procurement and Supply (CIPS).

Threatened U.S. tariffs under a Trump administration could further inflate costs, with proposed 10%-60% levies on imports potentially sparking retaliation.

Re-routing shipping around conflict zones and U.S. port worker strikes add to delays and expenses.

Experts warn these issues will disproportionately burden consumers unless mitigated effectively.

Summary

Five years after Brexit, its promises of sovereignty, economic gains, and reduced migration remain unfulfilled. While Brexit offers regulatory flexibility, its overall impacts are largely negative.

The UK economy has suffered a £100bn annual output loss, with GDP 4% smaller than it would have been without Brexit.

Trade barriers have reduced exports, particularly to the EU, with small businesses and sectors like agriculture and fishing hit hardest.

Migration has surged to record levels, but net EU migration has turned negative.

Public dissatisfaction is high, with 59% believing Brexit has gone poorly.

Summary

Small businesses are struggling with rising credit card swipe fees, which now average 2.26% per transaction and cost U.S. merchants $172 billion in 2023, a record high.

As shoppers increasingly use cards over cash, businesses face growing costs, with some passing fees to customers through higher prices or convenience charges.

Visa recently raised certain fees, sparking criticism from lawmakers and advocacy groups pushing for transparency and competition.

The bipartisan Credit Card Competition Act seeks to address swipe fee issues but remains stalled in Congress, leaving the conflict unresolved for now.

Summary

38% of Gen Z adults, under 27, report experiencing a "midlife crisis" due to financial instability, mental health struggles, and career uncertainty.

Financial stress, cited by 30%, stems from rising living costs, stagnant wages, and unattainable milestones like homeownership.

Mental health challenges and career difficulties further compound the crisis. Many turn to "doom-spending" on non-essentials for escapism, worsening financial pressures.

Experts urge older generations to provide practical financial guidance to empower Gen Z and help them achieve long-term stability and growth.

Summary

Minimum wage increases in 21 states and 48 localities starting January 2025 will benefit 9.2 million workers, adding $5.7 billion in wages, according to the Economic Policy Institute (EPI).

States like California are adjusting for inflation, while others, such as Nebraska and Montana, implemented voter-approved hikes. Women, Black, and Hispanic workers will see the most impact.

Despite the raises, many wages still lag behind rising costs of living, with EPI citing a "true living wage" as $20–$26/hour.

Meanwhile, the federal minimum wage remains unchanged at $7.25 since 2009.

Summary

The Biden Administration, through the Consumer Financial Protection Bureau (CFPB), is capping overdraft fees at $5, down from $35, starting Oct. 1, 2025.

The move, targeting “junk fees,” could save U.S. consumers $5 billion annually.

The CFPB suggests banks adopt cost-based fees or offer overdraft credit lines while disclosing interest rates.

Industry groups oppose the rule, and its future is uncertain under a Republican-controlled Congress and the incoming Trump administration.