🔎 The big shrink

Not so fast: The big retreat to the Fed’s 2% inflation target remains elusive. Though the rate is shrinking from a sky-high 9% in June 2022, it stalled between 3-4%* for the past 9 months.  

Still, other things are going up.  

San Francisco is known for its hilly streets and moderate climes (good weather ranks just below cost of living when it comes to top places to retire). But even for the golden city, a $22 burrito* is steep. With elevated costs, many small businesses are raising prices just to break even, and consumers are feeling the pinch. 

According to Empower research, 65% of Americans believe the economy may slow down their ability to retire, so many are speeding up: 26% plan to increase their 401(k) contributions this year. 

Read on for this week’s biggest bite-sized money headlines. 

— The Editors

Money

🏡 Tiny houses, big prices: The starter home is getting smaller, as the median size fell to its lowest point* in more than a decade. As builders solve for affordability in the housing market, the blueprint for new homes in the U.S. shrunk from 2,681 square feet to 2,420 square feet – a 10% reduction in five years. But the listing price continues to get bigger: Starter homes are up 45%* from before the pandemic. Given the rise in costs and inflation, more than half of Americans (51%) say they plan to hold off on making major financial commitments like home ownership.  

🌒 A lunar loss for galactic space: Over the past few hundred million years, the moon has shrunk about 150 feet* in circumference as its core cools down. The dark side of the shrinkage? It’s causing moonquakes. As part of project Artemis, NASA envisions launching regular missions to establish a base camp on the lunar surface. Some reports estimate that each launch would cost $4.2 billion.*  

💥 A bubble (gum) burst: Can a pop culture staple blow up again? Last year, U.S. chewing gum sales rose less than 1% to 1.2 billion units,* which is 32% fewer than just six years ago. Although sales in dollars are back to pre-pandemic levels, that has a lot to do with inflation: The average pack of gum cost $2.71 last year, $1.01 more than it did in 2018. When it comes to the economy, Americans have much to chew on: According to Empower research, 42% are bracing for a recession, 29% are hoping for a soft landing, and 20% are holding steady, saying they feel the same way about the market as they did a year ago.  

Life

Discounts on aisle 5  

Over half (51%) of Americans have started getting their groceries at dollar stores to combat rising prices, as they spend more on food than they have in 3 decades.* Those with sticker-shock over high prices are looking beyond national brands on the shelves to lower their bills. 

Sales of store-owned brand products grew 4.7%* globally in 2023 to $236.3 billion, while national brands grew 3.4% over the same period, and retailers are taking note. In recent years, more than three-quarters* of Aldi’s sales (77.5%) are for private label products, followed by Trader Joe’s at 59.4%, Wegmans at 49.4%, and Costco at 33.5%.  

Sticking to savings: Around half (51%) of older generations and 35% of younger generations plan to live more frugally to make progress on their money goals in the year ahead, according to Empower research.

Play

A little less human touch 

Humanoid robot startup Figure has recently received $675 million* in investments from Jeff Bezos, AI chipmaker Nvidia, and ChatGPT-maker OpenAI, among others, giving it a valuation of $2.6 billion.  

The funds will accelerate Figure's timeline for commercial deployment, as bipedal robots with dexterous hands enter the labor force this year: Figure’s robots are joining BMW’s production line, Amazon is testing robots for warehouse work, and Chipotle’s founder just launched a new robot-powered* vegan restaurant. Since the food is largely prepared by robots, it requires only three human on-site employees, allowing the company to pay them $27 an hour and offer expanded benefits, like paid time off.  

The robotics industry is big on "upskilling" — the idea that people who are replaced by robots will be trained for better and more fulfilling roles in the same field. 

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🧠 A big think: Americans are focused on securing a brighter financial future, especially when it comes to making more investments (80%). In fact, in last week’s poll, our readers said stocks (35%) and an IRA/retirement contribution (36%) are the financial gifts they’d most like to unwrap on their birthday. Here's what people are concerned about most in the months ahead:

Source: Empower Study

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Work

Should I stay or should I go? 

…That’s the question for some American workers. The Bureau of Labor Statistics reported that the U.S. economy added 275,000 jobs in February, signaling a still strong market. Yet, a third of people are worried about job security (32%).  

Despite those concerns, 73% of Americans expect to bump up their net worth in 2024. That may be due, in part, to data that challenges the notion that job switching is key to making more money. Wage growth is still higher for job changers, but not by much (5.9% vs. 5.1%*).  

At old jobs or new, stress can influence spending – some 20% of people say burnout at work makes them more likely to make unplanned purchases.