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Americans’ love affair with big cars is killing them

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Witnesses said the driver showed no signs of slowing down. On June 3rd Nicole Louthain and her six-year-old daughter were stopped at a red light in Grand Forks, North Dakota when they were struck from behind by Travis Bell. Such crashes are not uncommon—around 10,000 rear-end collisions occur in America every day. What made this one noteworthy was that the vehicles involved were so unevenly matched. Ms Louthain was driving a Ford Focus, a compact car weighing around 3,000lb (1,360kg), whereas Mr Bell was in a 7,000lb Ram 3500 “heavy duty” pickup. Alas, the disparity proved deadly. Although Mr Bell was not harmed, Ms Louthain suffered serious injuries. (Court documents later showed that Mr Bell had been drinking.) Her daughter Katarina was air-lifted to a nearby hospital where she died two days later.

The crash in Grand Forks helps to illustrate a sad truth about America’s roads. For all the safety features available in cars today to help them avoid crashes, when they happen they are still often determined by the laws of physics. When two vehicles collide, it is usually the heavier one that prevails. This advantage has changed little over time. Thirty years ago when a passenger car crashed with a pickup truck or sport-utility vehicle (SUV), the driver of the car was roughly four times as likely to die; today this driver dies around three times as often. Critics say this is too high a price to pay for roomier interiors and more powerful engines. Carmakers insist they are giving consumers what they want. An analysis by The Economist shows that weight remains a critical factor in car crashes in America. Reining in the heaviest vehicles would save lives.

Chevrolet Silverado 5,774lb

Chevrolet Silverado 5,774lb

Chevrolet Silverado 5,774lb

Mismatches between big and small cars on America’s roads are not new. In the 1960s the 1,400lb Mini Cooper shared the road with the 5,000lb Cadillac Fleetwood and the 5,500lb Lincoln Continental. But whereas today heavier vehicles attract the bulk of the criticism, back then it was lighter ones that drew scrutiny. Indeed many cars of the time were woefully unsafe. In 1969 America’s National Highway Safety Bureau conducted crash tests on a Subaru 360 and a King Midget, two sub-1,000lb “mini-cars”. When pitted against vehicles twice their size, the tiny cars crumpled like soda cans.

Over the years policymakers struggled to solve this mismatch, or “incompatibility”, problem. Often, they made things worse. When Congress set fuel-efficiency standards in the wake of the oil shocks of the 1970s, cars were swiftly downsized. Within ten years cars shed 1,000lb; trucks dropped 500lb. Although these changes saved motorists money at the pump, they also led to more traffic fatalities. A paper published in 1989 by researchers at the Brookings Institution and the Harvard School of Public Health estimated that the shift towards smaller, lighter cars in the 70s and 80s boosted fatalities by 14-27%. A report released in 2002 by America’s National Research Council concluded that the downsizing of America’s fleet led to thousands of unnecessary deaths.

As cars got bigger, regulators shifted their focus from the lightest vehicles to the heaviest ones. The impetus for this was the rise of SUVs. Between 1990 and 2005 the market share of such vehicles in America grew from 6% to 26% pushing up the weight of an average new car from 3,400lb to nearly 4,100lb. As suburban soccer moms traded in their station wagons for Ford Expeditions, many felt safer. And they were right. “One of the reasons the roads are much safer is because vehicles… [are] bigger and they’re heavier than they were,” Adrian Lund of the Insurance Institute for Highway Safety (IIHS), an industry research organisation, told conference-goers in 2011. The Competitive Enterprise Institute, a think-tank, even advocated for supersizing America’s fleet to improve safety, writing in the Wall Street Journal that large vehicles are “the solution, not the problem”.

But researchers quickly learned that the extra protection provided by heavier vehicles comes at the expense of others on the road. In a paper published in 2004 Michelle White of the University of California, San Diego estimated that for every deadly crash avoided by an SUV or pickup truck, there are an additional 4.3 among other drivers, pedestrians and cyclists. Another paper in 2012 by Shanjun Li of Resources for the Future, a think-tank, estimated that when a car crashes with an SUV or pickup, rather than another car, the fatality rate of the driver increases by 31%. In 2014 Michael Anderson and Maximilian Auffhammer of the University of California, Berkeley estimated that when two cars crash, a 1,000lb increase in the weight of one vehicle raises the fatality rate in the other by 47%.

Researchers also found that the safety benefits of vehicle weight suffer from diminishing returns. This means that, once vehicles reach a certain weight, packing on more pounds provides little additional safety, while inflicting more harm on others. “At some point heavy vehicles cost more lives…than they save,” wrote Brian O’Neill and Sergey Kyrychenko of the IIHS in 2004. This makes intuitive sense, says Mr Anderson of Berkeley. “Once you outweigh the other guy by a factor of two times, is adding 200 pounds more really going to make a difference for you? Probably not. But it’ll make sure that he gets completely destroyed.”

So how big is too big? At what point do the costs of the heaviest vehicles—measured in lives lost—vastly exceed their benefits? To answer this question, The Economist compiled ten years’ worth of crash data from more than a dozen states. Like the data compiled by Mssrs Anderson and Auffhammer, our figures come from reports filed by police officers, who are tasked with recording information about car crashes when called to the scene. Although all states collect such data, we focus on those that collect the most detailed figures and share them with researchers. The resulting dataset, which covers more than a third of America’s population, provides us with a sample that is both big and representative.

In total, our dataset includes millions of crashes across 14 states occurring between 2013 and 2023. Although accident reports vary from state to state, most of the crashes in our database include information about the geographic location of the crash, the number of cars involved, each passenger’s age and gender, whether they were wearing seatbelts and the types of injuries that they suffered. To obtain the curb weight of each vehicle, we collected the vehicle identification numbers (VINs) included in each crash report, and then matched them to vehicle specs data from VinAudit, an auto-data provider. Combining these data yielded roughly 10m crashes. After dropping observations with missing data, we were left with around 7.5m two-vehicle crashes involving more than 15m cars.

What do these data tell us about the relationship between vehicle weight and road safety?

The heaviest 1% of vehicles in our dataset—those weighing around 6,800lb—suffer 4.1 “own-car deaths” per 10,000 crashes, on average, compared with around 6.6 for cars in the middle of our sample weighing 3,500lb, and 15.8 for the lightest 1% of vehicles weighing just 2,300lb. But heavy cars are also far more dangerous to other drivers. The heaviest vehicles in our data were responsible for 37 “partner-car deaths” per 10,000 crashes, on average, compared with 5.7 for median-weight cars and 2.6 for the lightest cars.

To estimate this relationship more precisely, and control for potential sources of bias, we conducted a regression analysis of our sample of 7.5m two-vehicle crashes. We found that getting into a crash with a vehicle that is 1,000lb heavier is associated with a 0.06 percentage-point increase in the probability of suffering a fatality, even after controlling for the curb weight of one’s own car, the age and gender of the driver, the population density of the crash location and whether the passengers were wearing seatbelts. Given that the probability of suffering a fatality in a two-vehicle crash is 0.09%, on average, this suggests that getting hit by an additional 1,000lbs of steel and aluminium—roughly the difference between a Toyota Camry and a Ford Explorer—boosts the likelihood of a fatality by 66%.

As for the weight at which the social costs of driving a heavier vehicle exceed the benefits, the evidence is clear. Vehicles in the top 10% of our sample—those weighing at least 5,000lb—experience roughly 26 deaths per 10,000 crashes, on average, including 5.9 in their own car and 20.2 in partner vehicles. For vehicles in the next-heaviest 10% of our sample—those weighing between 4,500lb and 5,000lb—the equivalent figures are 5.4 and 10.3 deaths per 10,000 crashes. A back-of-the-envelope estimate suggests that if the heaviest tenth of vehicles in America’s fleet were downsized to this lighter weight class, road fatalities in multi-car crashes—which totaled 19,081 in 2023—could be reduced by 12%, or 2,300, without sacrificing the safety of any cars involved.

Given these figures, one might expect carmakers to be slamming the brakes on production of their heaviest SUVs and pickups. In fact, they are pressing on the accelerator. Official figures from the Environmental Protection Agency show that the average new car in America weighs more than 4,400lb (compared with 3,300lb in the European Union and 2,600lb in Japan). In 2023 vehicles weighing more than 5,000lb accounted for a whopping 31% of new cars, up from 22% five years earlier.

United States, new vehicle production

Source: Environmental Protection Agency

United States, new vehicle production

Source: Environmental Protection Agency

United States, new vehicle production

Source: Environmental Protection Agency

It would be easy to blame car buyers for this trend but Mr Anderson says that Americans looking for a new car face a Cold War-style “arms race”. “As you see the vehicle fleet around you getting heavier, then you want to protect yourself rationally by buying a bigger and heavier car.” Such rational individual decisions have led to a suboptimal outcome for society as a whole.

When asked to comment on The Economist’s findings, representatives from the big three car manufacturers pointed to safety features that help drivers avoid crashes, rather than those that make them less deadly. “Vehicle weight doesn’t solely determine crash performance,” Mike Levine, a Ford spokesman, wrote in an email, highlighting crash-avoidance technologies such as automatic emergency braking and front and rear “brake assist”. General Motors pointed out that carmakers have improved the compatibility of their vehicles over the years, citing a voluntary deal struck by manufacturers in 2003, more than twenty years ago. Stellantis (whose biggest shareholder part-owns The Economist’s parent company) declined to comment except to say that the company’s vehicles “meet or exceed all applicable federal safety standards”.

Regulators are ill-equipped to fix the problem. America’s tax system subsidises heavier vehicles by setting more lenient fuel-efficiency standards for light trucks, and allowing bosses who purchase heavy-duty vehicles for business purposes to deduct part of the cost from their taxable income. The National Highway Traffic Safety Administration (NHTSA), America’s top auto-safety agency, uses a five-star rating system to score crash performance, but only takes account of the safety of the occupants of the vehicle in question, not that of other drivers. “Our rating system reflects a bias towards the occupant,” explains Laura Sandt of the Highway Safety Research Centre at the University of North Carolina, “it is not designed to rate the car in terms of its holistic safety effects.” The NHTSA declined to comment on The Economist’s findings.

There are signs that Americans may be wising up. A survey conducted last year by YouGov, a pollster, found that 41% of Americans think that SUVs and pickup trucks have become too big; 49% said such vehicles are more dangerous for other cars and 50% said they endanger cyclists and pedestrians. Researchers are raising the alarm. Since 1989 the IIHS has regularly published the driver fatality rates of popular car models. In 2023, for the first time, the group also estimated the rate at which cars kill drivers in other vehicles. Policymakers are starting to take notice too. “I’m concerned about the increased risk of severe injury and death for all road users from heavier curb weights,” Jennifer Homendy, chair of the National Transportation Safety Board, said in a speech last year.

But the odds that carmakers curb their heaviest, most dangerous vehicles are slim. American car buyers value safety, but mainly for themselves, not society as a whole. And although regulators are tasked with protecting consumers, they rarely do so at the expense of choice, no matter how deadly the consequences. “There may be a certain point where you say, ‘you know what, passenger vehicles shouldn’t be weighing this much,’” says Raul Arbelaez of the IIHS’s Vehicle Research Centre. “But it would, politically, be really hard to gain any momentum on that.” Finally the shift towards electric power is likely to increase their weight further, as battery-powered vehicles tend to be heavier than their internal-combustion equivalents.

“Manufacturers are playing by the book,” says Mark Chung of the National Safety Council, a non-profit. “They’re making a business decision, and it’s a rational decision. Unless they’re forced to think differently, they’re not going to. So I think this is where our federal partners really need to step up.”

Sources: State governments; VinAudit; The Economist

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Republicans have a plan to add trillions of dollars to the national debt

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MUCH AS he may wish to, Donald Trump cannot govern through imperial decree alone. Congress is drafting legislation to remake the tax system and alter federal spending—something only it can do. On May 12th Republicans unveiled their new plan. Unfortunately it is a mess.

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CPI inflation April 2025: Rate hits 2.3%

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Customers line up at the check out booth on April 18, 2025 at a Costco branch in Niantic, Connecticut.

Robert Nickelsberg | Getty Images

Inflation was slightly lower than expected in April as President Donald Trump’s tariffs just began hitting the slowing U.S. economy, according to a Labor Department report Tuesday.

The consumer price index, which measures the costs for a broad range of goods and services, rose a seasonally adjusted 0.2% for the month, putting the 12-month inflation rate at 2.3%, its lowest since February 2021, the Bureau of Labor Statistics said. The monthly reading was in line with the Dow Jones consensus estimate while the 12-month was a bit below the forecast for 2.4%.

Excluding volatile food and energy prices, core CPI also increased 0.2% for the month, while the year-over-year level was 2.8%. The forecast was for 0.3% and 2.8% respectively.

The monthly readings were a bit higher than in March though price increases remain well off their highs of three years ago.

Shelter prices again were the main culprit in pushing up the inflation gauge. The category, which makes about one-third of the index weighting, increased 0.3% in April, accounting for more than half the overall move, according to the BLS.

After posting a 2.4% slide in March, energy prices rebounded, with a 0.7% gain. Food saw a 0.1% decline.

Used vehicle prices saw their second straight drop, down 0.5%, while new vehicles were flat. Apparel costs also were off 0.2% though medical care services increased 0.5%.

Egg prices tumbled, falling 12.7%, though they were still up 49.3% from a year ago.

While the April CPI figures were relatively tame, the Trump tariffs remain a wild card in the inflation picture, depending on where negotiations go between now and the summer.

In his much-awaited “Liberation Day” announcement, Trump slapped 10% duties on all U.S. imports and said he intended to put additional reciprocal tariffs on trading partners. Recently, though, Trump has backed off his position, with the most dramatic development a 90-day stay on aggressive tariffs against China while the two sides enter further negotiations.

Markets expect the president’s softening position to lead to less of a chance of interest rate cuts this year. Traders had been expecting the Federal Reserve to start easing in June, with at least three total reductions likely this year.

Since the China developments, the market has pushed out the first cut to September, with just two likely this year as the central bank feels less pressure to support the economy and as inflation has held above the Fed’s 2% target now for more than four years.

The Fed relies more on the Commerce Department’s inflation gauge for policymaking, though CPI figures into that index. The BLS on Thursday will release its April reading on producer prices, which are seen as more of a leading indicator on inflation.

This is breaking news. Please refresh for updates.

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German business leaders tell new government: It’s time to deliver

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TEGERNSEE, GERMANY — Top German business leaders, economists and politicians descended onto a small, picturesque Bavarian town situated next to the iconic Tegernsee lake last week to share their hopes and discuss what’s at stake for the new government.

Buoyed by recent positive market sentiment for Europe’s largest economy, attendees at the summit were united in their call for the new administration to step up and honour campaign promises. Any missteps would likely not be tolerated, with some business leaders warning the government cannot allow itself a “lazy summer.”

Despite rain and low hanging clouds providing a somewhat dreary backdrop to the event, which has been dubbed the “Davos of Germany,” the promise of new beginnings enveloped the summit and the atmosphere was buzzing with excitement for potential changes the newly-appointed Chancellor Friedrich Merz could initiate.

The view across the Tegernsee from the Ludwig Erhard Summit

Sophie Kiderlin, CNBC

Big expectations for the government were commonplace, with concerns about Germany’s struggling economy and recent political turmoil seemingly having faded into the background.

The German DAX index is currently up over 18% since the beginning of this year, frequently hitting record highs in recent months. The German economy has however been in stagnation territory for over two years now, with tensions over economic, fiscal and budget policy in the previous ruling coalition and its eventual breakup continuing to weigh on expectations.

“There are very high hopes now on the new government,” Patrick Trutwein, chief risk officer and chief operating officer at the IKB Deutsche Industriebank AG, said during a panel moderated by CNBC’s Annette Weisbach.

He said he was feeling positive about Germany’s future considering the announcement of the major fiscal package enshrined in Germany’s constitution, as well as further potential reforms ahead and “an economy that’s pretty robust and can build on its own … productivity and competencies.”

Matthias Voelkel, CEO of Boerse Stuttgart Group, was among those feeling hopeful.

“If we look ahead and if they [the new government] do the right thing, I’m optimistic,” he told CNBC.

Audi CEO Gernot Döllner meanwhile said in a fireside chat that he was hopeful that the new government would “send an impulse into the German economy.”

The mood was also upbeat in Germany’s auto sector, which has long been struggling with competition from China, pressures from the transition to electric vehicles and has recently been hit by U.S. tariffs.

“The Germans are back,” Hildegard Müller, president of the German Association of the Automotive Industry, told CNBC’s Weisbach Friday. “We are competitive,” she added.

A talk at the Ludwig Erhard Summit.

Sophie Kiderlin, CNBC

But amid the positive buzz, it was clear that observers are keeping a close eye on the governments every move.

“This new government in Germany cannot allow itself a political lazy summer, I’m sorry, they’ve got to work and they’ve got to work hard,” said Karl-Theodor zu Guttenberg, chairman of Spitzberg Partners and former German politician.

Or as Veronika Grimm, member of the German Council of Economic Experts, told CNBC: “A lot lies ahead for the government.”

09 May 2025, Bavaria, Gmund Am Tegernsee: Katherina Reiche (CDU), Federal Minister for Economic Affairs and Energy, takes part in the Ludwig Erhard Summit. Representatives from business, politics, science and the media are taking part in the three-day summit. Photo: Sven Hoppe/dpa (Photo by Sven Hoppe/picture alliance via Getty Images)

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Overal the message was clear: Germany needs to get its act together.

Alexander Horn, general manager of Eli Lilly‘s Germany arm — Lilly Germany — said the business strongly welcomes the new government’s goals, but won’t tolerate any caveats.

“Specifically we expect that the declarations of intent that are in the coalition agreement will be implemented quickly, speed plays an enormously big role,” he said during a panel, according to a CNBC translation.

Boerse Stuttgart Group’s Voelkel indicated his optimism relied on action from the government, saying he was looking for moves towards “less bureaucracy, less anti-growth regulation, more innovation and particularly strengthening investment.”

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The newly minted German government has set itself many of these points as policy goals, making promises to boost the country’s economy, reduce bureaucracy and boost innovation and investment during the election campaign and in its coalition agreement.

“This country needs an economic turnaround. After two years of recessions the previous government had to announce again [a] zero growth year for 2025 and we really have to work on this,” German economy minister Katherina Reiche told CNBC on the sidelines of the summit.

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