United States of America eSeries: Pack your bags ✈️

Pack your bags ✈️

Posted by :

This is not business-related but there's a "super flower blood moon" before sunrise tomorrow, and how many times does one get to write those words down in that order? Let's get into it.

By Allison Morrow

✈️ FLY AWAY

Americans are all vaxxed up and ready to cut loose like it's 2019. But after 15 months, it's easy to forget the irksome fact that rising demand drives up prices.

WHAT'S HAPPENING

Americans are going on vacation again (yay!). But airfare costs are also rebounding, in some cases beyond pre-pandemic levels, CNN Business' Chris Isidore reports.

That's a bummer for, like, most of us, but good news for the airlines, which spent the better part of 2020 burning through millions of dollars a day as all travel ground to a halt. Shares of American, Delta, United and most other US airlines were up between 2% and 3% midday Tuesday.

BUT...

While the return of leisure travel is objectively good news – for the broader economy, for our collective mental health, etc. — it doesn't mean airlines will suddenly go back to being profitable. That's because your round-trip economy fare to your cousin's bachelorette weekend in Palm Springs isn't nearly as lucrative for the airline as a last-minute business-class booking to Omaha.

In the Before Times, business and international travelers were huge profit drivers for the industry. But then the pandemic taught bosses around the world a valuable lesson (one that many of us knew long before 2020): This meeting could have been an email.

THE TAKEAWAY

Airlines need business and international travel to come back, but the strength of the rebound in those sectors is in doubt.

As the pandemic subsides, it's fair to assume some businesspeople will resume their airport-hopping routines. But the last year has fundamentally altered the way companies operate, and it's equally fair to assume many will cut their travel budgets way back from pre-pandemic levels.

"It doesn't mean business travel is dead, just business travel as we knew it isn't coming back the way it was," Airbnb CEO Brian Chesky told CNN Tuesday. "The reason why is the bar is higher to get on a plane to do a meeting."

📈 NUMBER OF THE DAY

$9 trillion

The Federal Reserve's balance sheet increased to a record $7.3 trillion last year after the central bank's unprecedented intervention to prop up the economy and financial markets. By 2023, it could grow to $9 trillion — almost as much as the combined annual GDP of Japan and Germany.

🚨 SOUND THE ALARM

By now you've seen a hundred headlines about inflation. Prices on everyday goods are going up fast — something painfully obvious to anyone who's shopped for a used car, or a house, or lumber for a home project, or literally anyone who's gone grocery shopping lately.

The tension right now centers on two groups of people:

Those who think this price surge is "transitory" and will level out (see: the White House, the Federal Reserve)
Those who think prices are going up too high, too fast – a sign of an "overheating" economy (see: a growing number of economists and Wall Street analysts).

But here's the really tricky thing about inflation: It's not just about prices themselves, but how we, the consumers, feel about prices.

INFLATION PSYCH 101

When consumers stop counting on prices remaining stable, inflation can become a self-fulfilling prophecy: We expect things to get more expensive, and that expectation snowballs to make things cost more.

That behavioral shift can become a vicious cycle, with businesses stockpiling goods and consumers buying products ahead of schedule. That would only reinforce inflationary pressures.

"This is a never-seen-before environment," said Geoff Freeman, CEO of the Consumer Brands Association and one of several experts sounding the inflation alarm, CNN Business' Matt Egan reports. "Let's let a little steam out of the system before it overheats."

WHAT ELSE IS GOING ON?

📝 The District of Columbia is suing Amazon, alleging the company has abused its market dominance to harm competition and keep retail prices artificially high across the entire internet.

🗓️ It's been 365 days since George Floyd was murdered by a police officer on a Minneapolis street. Many of the city's residents and small business owners are still reeling from the fallout.

📥Walmart apologized after dozens of people received racist emails from the company.

🌸🩸🌝 And finally: Here's a guide to viewing that super flower blood moon.