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Economics in the News - Sept. 28-Oct. 4 How Economics Impacts Our Lives on a Daily Basis

Economics impacts our lives every day. Below are some of the top storylines from this past week related to economics.

"There is one rule for the industrialist and that is: make the best quality goods possible at the lowest cost possible, paying the highest wages possible." -- Henry Ford, Founder of Ford Motor Company.
American Airlines and United Airlines have begun the process of furloughing more than 30,000 workers. The cuts which were forbidden until Oct. 1 as part of the agreement after airlines received $50 billion in aid through the CARES Act in March.

With many people hesitant to travel due to fears of contracting or spreading COVID-19, passenger airlines have felt the effects with air traffic in the United States down 70 percent for 2020, according to the Transportation Security Administration (TSA). The two companies have said they would reverse the cuts if Congress and the Trump administration reached an agreement on a new stimulus deal, but little progress has been made. Economists fear Southwest Airlines and Delta Air Lines will cut jobs next month. [The New York Times]

More than 7.6 million acres have burned and 40 people have died due to the ongoing wildfires in the American West, but burning predominantly in Northern California and Oregon. Many agriculture businesses have been destroyed, including the vineyards in California’s famed Napa Valley region have suffered devastating damage.

Napa Valley is world famous for its array collection of wines in an industry that analysts estimate to be worth $70 billion. The fires in the region have severely damaged buildings or vineyards of at least 16 wineries in the region, forcing wine makers to throw away wine and grapes that may be smoke-filled or having to completely halt their harvest. [The Wall Street Journal]

Retailers are starting the holiday shopping season earlier this year in hopes to avoid large crowds and delivery issues. Some big box stores, such as Target, Best Buy and Macy’s, are planning to start their holiday deals earlier rather than when they typically begin after Thanksgiving.

With COVID-19 spreading in the United States, retailers have had to adjust what is typically one of their busiest times of the year. Amazon is planning it's first Prime Day in October. Experts are expecting a down year for holiday shopping shoppers. Many households fear losing a job and will spend less. Fewer people are expected to travel and they will probably purchase fewer gifts for extended family members.[Associated Press]

Workers who lost their jobs in March at the start of the COVID-19 pandemic are closing in on six months, which is the threshold for long-term unemployment. While the unemployment rate has improved from 14.7 percent in April to 7.9 percent in September, progress in the economic recovery has showed signs of slowing. The economy has regained almost half of the 22 million jobs lost during the early stages of coronavirus.

Workers who lost their jobs in March at the start of the COVID-19 pandemic are closing in on six months, which is the threshold for long-term unemployment, while the number of permanently unemployed has continued to rise. History tells us that it will be difficult for long-term unemployed to find jobs while the number of permanently unemployed continues to grow – which is indicative of a long, slow economic recovery. [The New York Times]

President Donald Trump and First Lady Melania Trump are the latest world leaders to test positive for the coronavirus. Trump was sent to Walter Reed National Military Medical Center Friday as a precaution and to be treated. Trump, 74, is at higher risk for serious complications due to his age and overall health.

British Prime Minister Boris Johnson contracted the virus in March and spent time in ICU before making a recovery. Brazil President Jair Bolsonaro also tested positive for COVID-19, while leaders of Iran and India also have tested positive. [CBS News]

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All images credited to iStock