Year in Review: The Biggest Business Stories of 2023 (#5 Caught Us By Surprise)

As we bid farewell to 2023, a year of tumult and triumph in the business world, it's time to rewind the clock and dissect the most intriguing and influential stories that captured our attention. From the relentless battle against inflation to the seismic shifts in the housing market — and, of course, the unbridled dominance of Taylor Swift in both the cultural and economic arenas — these stories have left an undeniable mark on 2023.

1. Musk's X-rated transformation: Twitter's tumultuous evolution

Elon Musk was in the news a lot in 2023, from Twitter to SpaceX.  In a bold move, Elon Musk stormed into Twitter's headquarters, rebranding the social media giant as X. Few can forget the viral photo of Musk in Twitter headquarters holding a porcelain sink to suggest his opponents should “let it sink in” that he was now in charge. His strategies didn’t go so well, and the repercussions were swift and severe — allegations of misinformation, advertising losses, and declining usage. 

Musk's expletive-ridden rant in response to advertiser pullouts added fuel to the fire, creating a spectacle that blurred the lines between corporate transformation and chaos. As X grappled with controversies, including legal battles with high-profile advertisers, the saga of Musk's X-rated transformation became a riveting tale of corporate power and its consequences.

2. Inflation, inflation, inflation

After a tumultuous rise triggered by the global economic rebound from the pandemic, inflation peaked in 2022. The Federal Reserve, the European Central Bank, and the Bank of England led the charge, deploying aggressive interest-rate hikes to rein in the price surge and fight inflation. 

The Council on Foreign Relations noted a shift in central banks' stance, easing the overall anti-inflation fever. The Fed's announcement of anticipated rate cuts in 2024 brought signs of hope to Wall Street, signaling a potential turning point in the battle against inflation.

3. Housing's miserable year

While the broader U.S. economy weathered the storm of inflation, the housing market faced a relentless onslaught. The Fed's 11 interest-rate hikes since March 2022 took a toll, catapulting the average 30-year fixed-rate mortgage rate from 4.16% to 7.79%. 

Home sales plummeted by 20%, and despite the sales slump, home prices continued to rise and many homeowners needed help paying mortgages. The confluence of high mortgage rates and soaring prices rendered homeownership unattainable for many. A severe shortage of homes for sale exacerbated the crisis, leaving the housing market in disarray.

4. Labor unions seize the AI narrative

Artificial Intelligence stepped into the limelight, captivating the public imagination with its increasing capabilities. However, the year unfolded as a showcase of AI wonders and a battleground for workers' rights in Hollywood. Labor unions flexed their muscles, securing higher pay and protections against the unrestricted use of AI. A resurgence in union power, driven by economic rebound and workforce shortages, marked a notable shift after years of decline. Yet, the shadows of the past loom large, with union membership still a fraction of its historical peak.

5. A once-in-a-generation banking crisis

Contrary to historical trends, higher interest rates in 2023 simply made things worse for many banks, leading to a crisis of unprecedented proportions. Silicon Valley Bank, Signature Bank, and First Republic Bank collapsed under the weight of inflated borrowing rates and the devaluation of their bond portfolios. 

The Fed's specter of inflation and aggressive rate hikes triggered a banking crisis not seen since 2008. As the industry grappled with the fallout, concerns loomed over midsized institutions with similar business models, especially those holding trillions of dollars in commercial real estate loans.

6. Gen Z is breaking up with Tinder

Tired of traditional apps like Bumble and Tinder, Gen Z seeks unique platforms offering diverse options, from personality matching to meme-based interactions. Online dating, especially during the pandemic, has surged, with dating app Snack carving its niche by focusing on video profiles and real-time connections. 

CEO Kim Kaplan, inspired by TikTok's dating undercurrents, eliminated swiping and encouraged Gen Z input. Schmooze adds humor with meme-centric matching, diverging from conventional profiles, while Iris revives physical attraction, employing a swiping algorithm. These Gen Z apps showcase a shift toward unconventional, engaging, and personalized approaches to modern dating.

7. Taylor Swift’s economic chokehold

In a surprising twist, Taylor Swift, the pop sensation, transcended the boundaries of music and entered the realm of the national economy. Her record-shattering $1 billion concert tour not only enthralled audiences but also left an economic footprint. Swift's tour boosted hotel bookings in Philadelphia, and her name even cropped up in Federal Reserve proceedings. Economist Sarah Wolfe calculated that Swifties spent an average of $1,500 on airfares, hotel rooms, and concert tickets, underlining the economic influence of cultural icons.

The second half of the year brought a new thing no one knew she could sell: NFL jerseys. While dating Travis Kelce, of the Kansas City Chiefs, the NFL started selling more Travis and Jason Kelce jerseys than anyone else in the league. This was after turning down the opportunity to perform at the NFL's upcoming Super Bowl halftime show. 

Combine this with the fact that Taylor Swift was Time Magazine's Person of the Year and it's safe to say that she was the topic of discussion for much of the year. 

Bottom line

As we reflect on the past year's business sagas, these stories have shaped industries and reflected the delicate balance between economic forces, societal shifts, and the indomitable spirit of innovation. The world economy remains resilient despite hiccups in 2023, and the new year promises innovations, stabilizing prices, and new ways of seeing the world through business.