From AI and inflation to Elon Musk and Taylor Swift, the business stories that dominated 2023
The tide turned against inflation.
Labor unions capitalized on their growing might to win more generous pay and benefits.
Elon Musk renamed and rebranded the social media platform Twitter, removed guardrails against phony or obscene posts and ranted profanely when advertisers fled in droves.
The American housing market, straining under the weight of heavy mortgage rates, took a wallop.
And Taylor Swift's concert tour scaled such stratospheric heights that she invigorated some regional economies and drew a mention in Federal Reserve proceedings.
A look back at five top business stories in 2023:
RAGING AGAINST INFLATION
The Fed and most other major central banks spent most of the year deploying their interest-rate weapons against the worst bout of inflation in four decades. In 2021 and 2022, the global economy roared out of the pandemic recession, triggering supply shortages and igniting prices.
By the end of 2023, though, the Fed, the European Central Bank and the Bank of England had taken a breather. Their aggressive rate hikes had brought inflation way down from the peaks of 2022, when Russia’s invasion of Ukraine sent energy and grain prices rocketing and intensified price spikes.
In the United States, the Fed's policymakers delighted Wall Street investors by signaling in December that 2024 would likely be a year of rate cuts and not rate hikes.
WORKERS SCORE GAINS
The long-battered American labor movement flexed its muscle in 2023, taking advantage of widespread worker shortages to demand — and receive — significantly better pay and benefits. From Hollywood writers and actors to autoworkers to hotel workers, 510,000 laborers staged 393 strikes in the first 11 months of 2023, according to Cornell University’s Labor Action Tracker.
Under its pugnacious new president, Shawn Fain, the United Auto Workers struck the Big Three automakers — Ford, General Motors and Stellantis, the parent of Chrysler, Jeep and Ram — and won pay raises, improved benefits and other concessions.
Hollywood writers and actors, as a result of their walkouts, secured higher pay and protection from the unrestricted use of artificial intelligence, among other concessions.
The unions’ gains marked a resurgence for their workers after years following the Great Recession of 2007-2009 when union power further dwindled, wage gains languished and employers seemed to have their pick of job candidates. An explosive economic rebound from the COVID-19 recession of 2020 and a wave of retirements left companies scrambling to find workers and provided labor unions with leverage.
MUSK’S X-RATED TRANSFORMATION
A little more than a year ago, Elon Musk walked into Twitter’s San Francisco headquarters, fired its CEO and other top executives and began transforming the social media platform into what's now known as X.
Since then, the company has been bombarded by allegations of misinformation, endured significant advertising losses and suffered declines in usage.
Disney, Comcast and other high-profile advertisers stopped spending on X after the liberal advocacy group Media Matters issued a report showing their ads were appearing alongside material praising Nazis. (X has sued the group, claiming it “manufactured” the report to “drive advertisers from the platform and destroy X Corp.”)
HOUSING'S MISERABLE YEAR
Remarkably, the U.S. economy and job market largely avoided pain in 2023 from the Fed’s relentless campaign against inflation — 11 interest-rate hikes since March 2022.
Not so the housing market.
As the Fed jacked up borrowing rates, the average 30-year fixed-rate mortgage rate shot up from 4.16% in March 2022 to 7.79% in October 2023. Home sales crumbled.
Yet at the same time and despite the sales slump, home prices kept rising. The combination of high mortgage rates and rising prices made homeownership — or the prospect of trading up to another house — unaffordable for many.
Contributing to the squeeze was a severe shortage of homes for sale, a consequence of higher rates.
THE U.S. ECONOMY (TAYLOR’S VERSION)
Taylor Swift dominated popular culture, with her record-shattering $1 billion concert tour, her anointment as Time magazine’s Person of the Year and her high-profile romance with Travis Kelce, the Kansas City Chiefs football star.
The Swift phenomenon went further yet. It extended into the realm of the national economy. Her name came up at a July news conference by Fed Chair Jerome Powell, when Powell was asked whether Swift’s blockbuster ticket sales revealed anything about the state of the economy. Swift's name came up that same month in a Fed review of regional economies: Her tour was credited with boosting hotel bookings in Philadelphia.
Economist Sarah Wolfe of Morgan Stanley has calculated that Swifties spent an average of $1,500 on airfares, hotel rooms and concert tickets to her shows.
AP Business writers Stan Choe in New York, Barbara Ortutay in San Francisco and Matt O’Brien in Providence, Rhode Island, contributed to this report.