The U.S. Treasury Department plans to halt production of the penny by early next year

This announcement was first reported by the Wall Street Journal.

The U.S. Treasury Department plans to halt production of the penny by early next year, a spokesperson confirmed in an email to Marketplace. This announcement was first reported by the Wall Street Journal.

“The Treasury has made its final order of penny blanks this month and the United States Mint will continue to manufacture pennies while an inventory of penny blanks exists,” the spokesperson said.

The U.S. joins countries like Canada, Australia and the Netherlands in nixing the one-cent coin.

This isn’t the first time we’ve seen small denominations disappear from circulation. The U.S. discontinued a half-cent coin in 1857, which didn’t have much of an impact, said Andrew Keinsley, an associate professor of economics at Weber State University, in a 2023 interview with Marketplace.

While the humble penny holds sentimental value for some, economists have long viewed them as a waste of resources, money and time.

The cost of making one is simply more than it’s worth. The U.S. Mint spends 3.69 cents to produce and distribute one penny, according to the bureau’s 2024 annual report. That’s up from 1.4 cents in 2015.

Eliminating the penny is expected to save $56 million a year, and the Treasury is planning to use the savings to help reduce the federal deficit, according to the spokesperson.

“There are about 114 billion pennies currently in circulation in the U.S., but they are severely underutilized,” the spokesperson said.

For customers, trying to pluck them out of your wallet when you’re at the cashier gets cumbersome.

“If you think about currency in different denominations, they’re really supposed to make transactions easier. And the penny no longer provides that,” said Daniel Soques, an economist at the University of North Carolina, Wilmington.

If the materials used to make pennies get expensive enough, black markets could theoretically pop up. You could melt them down for copper and zinc, then sell these commodities for higher prices, although it would be illegal, Keinsley said.

If you’re worried about stores now rounding up the cost of your purchases, one economist’s research might assuage your fears.

Robert Whaples, an economics professor at Wake Forest University, analyzed transaction data from a convenience store chain located in multiple states, including Alabama, Georgia and Virginia.

If you took into account taxes and transactions involving multiple purchases, and then rounded to the nearest nickel, you would have to round down just as much as you round up, Whaples said.

So, based on his research, you might not have to worry about getting nickeled and dimed at the store.