The Price Point Issue 8, Vol. 116

As Stuyvesant students prepare to enter the world, understanding the economy becomes an essential skill. In today’s society, knowledge of economics provides us with a foundation for navigating financial issues, understanding the effects of public policy on the market, and making informed decisions about our own personal finances.

Total Layoffs for 2025 Exceed 1.1 Million According to Challenger

According to a report by the consulting firm Challenger, Gray & Christmas on Thursday, December 9, layoff plans reached a total of 71,321 in November, which was a decrease compared to what was seen in October but nevertheless brought the total up to 1.17 million for 2025—54 percent higher than the previous year and the highest since the pandemic in 2020. Driven by advancements in the development of artificial intelligence, tech companies such as Verizon have listed a major increase in job reductions; the sector’s total for 2025 is 17 percent higher than a year ago. In addition, tariffs were cited as another major factor for job cuts.

Cooling Inflation Strengthens Case for a Fed Rate Cut

The inflation report for September showed that the core personal consumption expenditures (PCE) price index increased by 0.2 percent for that month and 2.8 percent by the year, which was a bit cooler than expected. The report provides the Federal Reserve with more confidence in its capacity to move forward with a potential rate cut at its upcoming meeting. The prices of goods rose, which was partially due to tariffs, and income grew faster than spending did, implying a stable but cautious consumer sentiment.

E.U. Pushes Plan to Use Frozen Russian Assets for Ukraine Despite Belgian Opposition

The European Union has unveiled a new plan to fund Ukraine’s financial needs through 2026 and 2027, using billions in frozen Russian assets as collateral. They have proposed a reparations loan to provide 90 billion euros, which is about two-thirds of what the IMF says that Ukraine needs. However, Belgium holds the majority of the frozen assets and has rejected the proposal, warning of major financial and legal risks.

Economics Concept of the Issue

Mental Accounting

Mental accounting describes the tendency for individuals to psychologically divide money into separate “accounts” (e.g. savings, bonuses, winnings, etc.) instead of treating all of their money as interchangeable within one large account. Such categorization of money influences behavior, often by causing people to spend extra money (like tax refunds or lottery winnings) more freely than their regular income despite equal purchasing power. It also shows why a person may splurge a windfall while remaining frugal with their paycheck, since they assign different emotional values to their different accounts. Mental accounting often leads to irrational decisions such as taking greater risks with “house money” (profits or winnings) because less value is attributed to it.