The economy generally refers to the wealth of a nation. However, it also represents the production, trade, and consumption of goods and services by a given population. Alternatively, many economists see the economy as a social distinction that highlights the discourses, practices, and material expressions connected with the production and management of resources. It is one of the foundations of our global society. The economy constantly evolves to keep up with new technologies and a growing population. Let’s take a look at just a few current events in economics from around the globe.
Current Events in Economics: No-Deal Brexit Looms Large
The global economy is real, and it is here to stay. That means a few major events occurring right now in specific areas are affecting everyone. For example, Great Britain is ready to change Europe forever with Brexit. The European Union is meant to ensure economic prosperity across Europe. Keeping in mind the countries within this continent, economic stability is crucial. Major players like Great Britain, France, and Germany constantly rely on one another to keep plugging along. Even more so, smaller countries need their larger neighbors to stay afloat for economic security. Nevertheless, the British people voted. Even this week, calls for another vote are ringing in the streets. The trouble now is inner turmoil causing global disaster.
The challenge with Brexit is not just the exit from the European Union. Now, with British Parliament struggling to come up with a deal for the exit, everyone seems more unsure than they did before. The vote was certainly a shock. Despite a lot of chatter about a British exit from the EU, not many saw it as a real possibility. Votes are no longer predictable in the 2010s, and this is a great example of why. What threat does a no deal Brexit pose to the globe? It’s certain to rule current events in economics for time to come.
No Deal Means No Clear Path Forward
Everyone with a relation to the UK economy is nervous about a no deal Brexit. For those keeping score at home, that is practically very country on the globe. The decision to exit the EU is going to be felt by nearly every civilized place on the planet. None more so, of course, then the British, who are already seeing spending decreases and a slowing domestic economy. To be fair, they have every right to make domestic decisions. That means something much different now though that the global market is so interconnected.
Trouble looms for the EU as well, as they not only lose a member, but a huge influence in their practices. Companies who do business with Great Britain are nervous to continue, which means they’re double thinking everything. Greece and Italy are great examples of partners of the U.K. who find themselves wondering what this means for their trade and economic reliance on Great Britain. There’s not necessarily a huge meltdown in the works. No deal just means no clear path forward, and in a way, that’s just as scary.
Current Events in Economics: Italian Debt Puts Pressure on Europe
Italy is a pillar of the European Union, and the third largest economy in the entire Eurozone. It is just behind France in economic size, making up more than 15% of the Eurozone GDP. However, Italy has debts of approximately 2.26 trillion euros, equivalent to 132% of its own GDP. The only other country in the Eurozone with a higher debt ratio is Greece. Greece also suffered its own hardships and caused extensive headaches throughout the European Union.
The root of this problem lies in the Italian banks, which are currently in crisis. They are weighed down by bad loans and propped up by the government. The European Central Bank (ECB) also contributes to this problem. The banks are also connected to the banking system across the rest of Europe. So, what happens in Italy is of grave concern to leaders across the continent. The crisis of Italian capitalism lies at the root of these financial problems. Experts often attack the Italian economy for its low productivity and slow growth in recent decades.
A hurdle ahead for Italy is economic competition. Not only with neighboring nations, but within their own borders. By using a single currency, devaluation is dependent on just how far they can fall. With the brunt of this lying on the middle and lower class, the impact will be harsh. In layman’s terms, this means attacking the wages and conditions of Italian workers. However so far, no government has been willing to commit to such a program. These kinds of programs would almost certainly spark a huge political and social explosion.
Passing the Buck
Instead, this problem has been continually passed down to each new government in Italy. Now the financial markets and their political representatives in Brussels and Frankfurt are putting their collective foot down. A number of government bonds are tied into less than desirable economic interests. This is consistently threatening economic stability through an increasingly liquid capital system that relies little on actual cash.
However, after chaotic events in Greece, the European establishment is desperate to avoid a second wave of the Eurozone crisis. The Italian budget is suffering greatly because of this. Of course, a lacking economy is prime for rejection. The Euro is changing, but it certainly is not going to come with many solutions for Italy. Rather than posit a solution, the EU will likely just delay issues as far as possible down the road.
Any efforts at this point are likely to cause a total overhaul. The primary concern is not just economic. The issues pertain to social issues as well. The government and businesses ask workers and youth to pay for the crisis of capitalism, which would be extremely unpopular. With a no-deal Brexit looming, an uncertain EU faces financial pressure from the United States under Trump. For the working class in Italy and across the rest of Europe, the need to transform society has never been more dire. Read more here.
Current Events in Economics: NFIB Small Business Optimism Index Remained at Historic Levels in October
The NFIB Small Business Optimism Index for October posted a reading of 107.4, a record number for the index. These numbers have been primarily driven by small business, which has helped the US economy grow by approximately 3%. Additionally, a large number of new workers have entered the labor force. The National Federation of Independent Business (NFIB) said entrepreneurs trust the present period as a good time to expand.
The October confidence report also proves that, when independent companies get help are freed from administrative shackles, they flourish and the entire economy grows.
Approximately 30% of business owners and entrepreneurs think the present period is a good time to grow their investments. 9% of the individuals who believe that it is a good time to grow referred to the political atmosphere. However, 17% said that it is a terrible time to expand operations, blaming legislative and governmental issues. Even though legislative issues matter, the report shows that monetary components, whether great or terrible, are the fundamental drivers of expansion confidence.
Since 2017, the number of proprietors who intend to buy stock expanded by 2%, to a total of 25%. This is due to proprietors seeing current stock prices as too low after they tumbled in recent months.
Thanks to numerous variables, the U.S. recaptured the top-spot in the World Economic Forum’s positioning as the most focused nation. October’s report sets the tone for a strong currency and development in the final quarter. Additionally, expansion and financing costs remain generally agreeable. Job creation also stayed strong in October for private ventures, with a net expansion of 0.15 specialists per firm.
Current Events in Economics: The White House Takes Credit for 6.3 Million New Jobs
During the chaotic week before the midterm election, the White House held an event in the State Dining Room to publicize big improvements in the economy. The White House plans to add up to 6.3 million new jobs, according to the President’s daughter, Ivanka Trump. However, this number has been called into question, and many believe that Ivanka does not deserve credit for this surge in jobs. However, if true, this number would accounts for about 5% of the current workforce. The occasion gave a preliminary display of the administration’s commitment to producing better-paying professions across the US. Nonetheless, the President repeatedly made this promise in the days leading up to the midterm, and many have called it into question.
Corporate America might offer 6.3 million new jobs in the next five years. But Ivanka Trump would have the press and the people believe that the jobs already exist. Moreover, the implication was that more Americans have already been put to work, which is true, but the numbers seem inflated.
For instance, the Associated General Contractors made a promise to include 172,500 more apprenticeships, safety programs, and up-skilling courses over the next 5 years. According to the leaders of this organization, they planned to take this step with or without the commitment made by the White House and other corporate signatories. However, apprenticeships are evidence of a larger problem in the workforce: unskilled workers. Many applicants for these construction jobs (and positions in many other industries) simply do not possess the proper training or education in the right areas. As a result, the Associated General Contractors must commit to training more workers before they can even consider expanding or adding more jobs.
The Society for Human Resource Management’s vow of 127,000 new jobs speaks to the number of individuals it intends to teach throughout the following five years. It plans to do this through its accreditation programs, which were founded two years prior. General Motors’ 10,000 new jobs incorporate the majority of its temporary jobs, apprenticeship programs, and professional preparation programs. This includes for individuals coming back to the workforce in the wake of taking a long hiatus.
Current Events in Economics: Australians Feel Pressure from Falling House Prices
Australia’s housing downturn is now in its thirteenth month, with further declines anticipated. Market experts, including the RBA, are currently directing their attention toward the correlation between the negative “wealth effect” and falling house costs. No matter the cause, these falling prices could delay future development and economic growth.
UBS and Morgan Stanley estimate that prices will continue to fall by approximately 10-15% across all sectors and regions. Even more alarming, AMP and Macquarie think that this decline will be closer to 15-20%. Assuming that these market experts are correct, housing costs in Sydney still have a long way to fall, and they have already fallen by about 7-8% so far.
Falling Auction Clearance Rates
To make matters worse, national auction clearance rates fell below 50% for seven weeks in a row. Historically, this kind of activity coincides with falling house prices. This means that the economic issues are accumulating and could have a detrimental effect on the average Australian. Wages have generally stagnated across the country, and household debt has never been higher.
Uncertainty continues to plague the economy at large. In every one of its ongoing strategy declarations, the RBA has alluded to the issue of domestic consumption as a major source of uncertainty. Additionally, in their most recent announcement, the RBA made note of some asset prices that declined for the very first time.
The national bank continues to monitor the situation as it unfolds. As individuals see the estimation of their future wages and house values decline, they may lower their spending in anticipation of an unstable financial future. Unfortunately, this will only make matters worse if the housing market doesn’t rebound soon.
Current Events in Economics: San Diego Craft Brewers Produced More Than 1.1 Million Barrels in 2017
San Diego County craft brewers created more than 1.1 million barrels of beer in 2017. This number represented an increase of 22% over the production in the previous year. All indications point toward even higher numbers in 2018 and 2019. Experts made this prediction during a monetary effect exploration led by the San Diego Brewers Guild and California State University San Marcos’ (CSUSM) Office of Business Research and Analysis. Read more here.
According to the Guild’s report, the economic value of the craft brewing industry in San Diego County expanded from 870 million dollars in 2016 to more than 1.1 billion dollars a year ago. The examination also discovered that more than 130 San Diego-based distilleries created about 802 million dollars in income a year ago.
More than 806 million dollars of the market value came directly from larger organizations in the district. These companies needed to meet the National Brewers Association’s definition of a craft brewer. This definition required companies to possess fewer than 6 million barrels. Additionally, they needed to have less than 25% ownership by a non-craft brewer and have a majority of their products derived from a traditional or innovative brewing process.
Breweries in the Region
A significant part of the business’ monetary gains in the region comes from bottling products in five urban communities. These include Carlsbad, Escondido, San Marcos, Oceanside and Vista. Along Route 78, inside the so called “78 Corridor,” a number of popular breweries operate, including Stone Brewing, Port Brewing, the Lost Abbey, Belching Beaver, Mason Ale Works, and Rip Current.
The financial effect of the companies in those districts totaled almost 300 million dollars, while the craft brewing industry’s aggregate financial effect in the region surpassed 382 million dollars. San Diego County’s specialty craft brewing industry utilized 6,275 laborers in 2017. More than 4,500 of those specialists were hired by the province’s specialty brew organizations over a year ago, with those laborer’s wage totaling more than 64 million dollars.
The California brewing industry continues to increase as more brewing companies open. More than 900 California craft distilleries opened in 2017, and more plan to open in the near future. The Alcohol and Tobacco Tax and Trade Bureau (TTB) revealed 1,106 dynamic bottling works licenses in the state a year ago, up 19% from 2016.
It is clear that having information about the economy helps investors, entrepreneurs, and government agencies track and make predictions about the economy. Different economies of the world face various challenges that require unique strategies. They also require new initiatives for job creation and economic growth. These current events in economics show some of the most recent economic changes in various countries, and provide insight into the future of our global economy.