Taylor Swift performs on stage at Lumen Field in Seattle on July 22, 2023.
Matt Hayward/tas23 | Getty Images Entertainment | Getty Images
The devil is in the details, but local economies have a friend in Taylor Swift.
The American pop star has spent nearly a year criss-crossing the US and the world with her high-flying Eras Tour. The economic impact of the “Karma” singer's show has caught the attention of everyone, from the Federal Reserve to Wall Street.
Her tour undoubtedly helped the local economies she visited, according to a new report from Japanese investment bank Nomura. But the company questions how much impact it has had on national data.
“Its boost to consumption has certainly charmed US economic analysts, but we believe the overall macroeconomic impact is probably overstated,” Nomura global economist Si Ying Toh wrote to clients last week.
Between the first and third quarters of 2023, the SWIFT project alone lifted nominal U.S. retail sales by 0.03%, and real GDP, a measure of economic output, by 0.02%, Nomura estimates show.
For all of 2023, the 14-time Grammy winner's touring accounted for 0.5% of nominal consumption growth, according to the company's calculations.
Although these data points may be considered marginal, Toh said the economic boost — which some have called a “lift” — was “undeniable” for the 20 U.S. cities she visited.
Stops on the Eras tour saw a 2.1 percentage point rise in housing inflation during the month of Swift's visit, according to STR data cited by Toh. Data from hotel booking platform Trivago shows a similar rise, she added.
Looking specifically at Chicago, Toh estimated that housing prices rose by 3.1 percentage points due to SWIFT's three offerings there. The city, which is the third-most populous in the United States, saw an 8.1 percentage point rise in occupancy and a 59% increase in hotel revenue per available room during Swift's tenure.
From that, the Illinois CPI rose 0.5 percentage points compared to the singer's visit alone. The Consumer Price Index (CPI) is a measure of a basket of goods and services used to calculate changes in costs over time.
These local improvements are unlikely to be reflected in national-level statistics from major economies such as the US, UK and Japan, Toh said. However, these events are worth watching as potential economic catalysts in countries around the world, she added.
Internationally, small economies such as Singapore and Sweden could see the biggest overall boosts from their round, according to Toh.
“External shocks play a key role in economic modeling, whether in the form of an extreme weather event, a pandemic or…a pop concert,” Toh wrote to clients. “In recent years, concert touring has grown to become not only a major social phenomenon, but also an important driver of economic activity.”
Swift's tour is scheduled to end toward the end of 2024. The film version, which has already earned more than $200 million globally through a theatrical run, will begin streaming on Disney+ on March 15.
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