What's happened
The U.S. Mint has announced it will cease penny production after its final order of blanks runs out, expected by early 2026. This decision follows rising production costs, with each penny costing nearly 4 cents to make. The move is projected to save taxpayers $56 million annually.
What's behind the headline?
Economic Implications
- The decision to stop penny production reflects broader economic trends where the cost of manufacturing coins exceeds their face value.
- Each penny costs approximately 4 cents to produce, a 20% increase from the previous year, highlighting inflationary pressures on production costs.
Consumer Impact
- Businesses will need to adjust pricing strategies, likely rounding to the nearest nickel, similar to practices in Canada after it eliminated its penny.
- The transition may lead to consumer confusion and adjustments in cash transactions, particularly for those accustomed to using pennies.
Legislative Context
- Two bipartisan bills aimed at ending penny production have been introduced in Congress, indicating a growing consensus on the issue.
- The penny's historical significance and utility in charity drives are often cited by advocates for its retention, despite its declining use in everyday transactions.
What the papers say
According to the New York Times, the U.S. Mint's decision follows President Trump's directive to stop penny production due to its high costs, stating, 'Pennies have long been more expensive to manufacture than they are worth.' The Independent notes that the Mint's production costs have risen significantly, with each penny costing nearly 4 cents to produce, which is a 20% increase from the previous year. Meanwhile, the AP highlights that the cessation of penny production is expected to save taxpayers $56 million annually, a significant financial consideration amid rising costs. The Wall Street Journal adds that businesses will need to adapt to new pricing strategies once pennies are phased out, similar to Canada's experience when it eliminated its one-cent coin.
How we got here
President Trump ordered the cessation of penny production earlier this year, citing high manufacturing costs. The penny has been increasingly unpopular, with production declining significantly over the past decade.
Go deeper
- What are the reasons behind stopping penny production?
- How will this affect everyday transactions?
- What alternatives are there for consumers?
Common question
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Why is the U.S. stopping penny production?
The U.S. Treasury's recent decision to halt penny production has raised many questions about its implications for the economy and everyday transactions. As the final supply of pennies is expected to run out by early 2026, understanding the reasons behind this move and its potential impact is crucial for consumers and businesses alike.
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Why is the US Mint Ending Penny Production?
The US Mint's decision to end penny production has raised many questions about its implications for the economy and everyday transactions. As the cost of producing pennies continues to rise, taxpayers and businesses alike are left wondering how this change will affect them. Below are some common questions and clear answers regarding this significant shift in U.S. currency policy.
More on these topics
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Donald John Trump is an American politician, media personality, and businessman who served as the 45th president of the United States from 2017 to 2021.
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The United States of America, commonly known as the United States or America, is a country mostly located in central North America, between Canada and Mexico.
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The United States Mint is a bureau of the Department of the Treasury responsible for producing coinage for the United States to conduct its trade and commerce, as well as controlling the movement of bullion.
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The Department of the Treasury is the national treasury of the federal government of the United States where it serves as an executive department. The department oversees the Bureau of Engraving and Printing, and the U.S.
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A penny is a coin or a unit of currency in various countries. Borrowed from the Carolingian denarius, it is usually the smallest denomination within a currency system.
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The United States one-cent coin, often called the "penny", is a unit of currency equaling one one-hundredth of a United States dollar. It has been the lowest face-value physical unit of U.S. currency since the abolition of the half-cent in 1857.