U.S. Retires Penny Amid Rising Production Costs

The United States has stopped making pennies after 232 years, marking the end of America's most iconic coin. The U.S. Mint announced it will no longer produce new pennies for circulation because it now costs 3.69 cents to make each one-cent coin - nearly four times its actual value.

The Mint said economic factors, rising production costs, and changing consumer habits made penny production unsustainable. Over the past decade, manufacturing costs jumped from 1.42 cents per penny to 3.69 cents, creating a massive loss on every coin produced.

This decision reflects broader shifts in how Americans handle money. Cash transactions have dropped significantly as digital payments and credit cards dominate daily purchases. Many retailers already round prices to the nearest nickel, and some countries like Canada eliminated their lowest denomination coins years ago without major economic disruption.

The penny's production costs have been a problem for decades. The coin is made primarily of zinc with a thin copper coating, and fluctuating metal prices made production increasingly expensive. The Mint acknowledged that while pennies "played an important role in Americans' daily lives since the early days of our economic system," the economics no longer work.

Existing pennies will remain legal tender, so the billions already in circulation can still be used for transactions. But banks and businesses will gradually see fewer pennies as worn coins get removed from circulation without replacement.

For the federal budget, this move saves money immediately. The Mint was losing nearly $70 million annually on penny production alone. That money can now go toward producing coins that people actually use regularly, like quarters and dimes.