A closer eye on employment costs

Summary

Marketplace Morning Report – "A Closer Eye on Employment Costs"

Date: February 10, 2026
Host: David Brancaccio
Notable Contributors: Jeffrey Cleveland (Baden and Riegel), Carla Javier (Reporter), Mo Ali (BBC), Pietro du Plessis (Bon Esperance), John Steenhuysen (SA Minister of Agriculture)

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Episode Overview

This episode explores fresh data and perspectives on employment costs in the U.S., the current state of consumer sentiment, and a look at how South African fruit exporters are navigating shifting global markets due to American tariffs. In less than 10 minutes, the episode provides updates on labor market trends, consumer confidence, and a global economic story highlighting South Africa’s growing fruit trade with China.

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Key Discussion Points

1. Employment Cost Index & Wage Growth

Segment: [00:31–02:24]

• Topic: Employment costs in the U.S. grew less than expected, a data point with broad economic implications.
• Guest: Jeffrey Cleveland, Chief Economist, Baden and Riegel
• Lower employment cost growth signals cooling wage pressures.
• This slowdown is potentially encouraging for those worried about inflation and interest rates but is a “bummer” for workers hoping for bigger raises.
• Compared to pandemic highs, this is the “softest reading” since 2021.
• The data suggests a softening labor market rather than a strengthening one, as slowing wage growth typically signals weaker demand for labor.
• Policy implication: This moderation could support future interest rate cuts by the Federal Reserve.

Notable Quotes:

• “This is the softest reading on my chart since 2021.” (David Brancaccio, 01:08)
• “Moderating wage pressures, moderating inflation pressures, will be key… This is a data point in favor of additional rate cuts, in my view.” (Jeffrey Cleveland, 01:45)
• “It is sort of a reflection of a softening of the labor market.” (Jeffrey Cleveland, 02:18)

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2. Consumer Confidence and Sentiment

Segment: [02:24–03:41]

• Reporter: Carla Javier
• Discusses conflicting signals from two key surveys:
  • The Conference Board found the lowest consumer confidence since 2014.
  • The New York Fed survey showed improvement in consumer mood.
• Expert Voices:
  • Carola Binder (University of Texas): The latest Fed survey is “very normal times kind of survey” after several years of volatility.
  • Francesco d’Acunto (Georgetown): Although people have slightly better expectations about short-term inflation and jobs, they have “a much harsher view of potential future financial conditions,” especially regarding borrowing costs.
• High- and low-income respondents’ sentiment is more aligned than usual this round.

Notable Quotes:

• “What was really notable was just its lack of notability. In a way, it seems like a very normal times kind of survey.” (Carola Binder via David Brancaccio paraphrase, 02:46)
• “Consumers seem to have a much sort of harsher view of potential future financial conditions… especially their expected ability to borrow money.” (Francesco d’Acunto, 03:13)
• “It really seems that they believe that actually interest rates… are likely to go up.” (Francesco d’Acunto, 03:29)

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3. South Africa’s Fruit Exporters & Trade Outlook

Segment: [04:42–07:30]

• Topic: In response to new 30% U.S. tariffs on South African agricultural goods, stone fruit farmers are pivoting to China.
• Reported by: Mo Ali (BBC)
• Key Points:
  • Plums, nectarines, apricots, and other “stone fruits” will soon be exported to China under a new trade protocol.
  • Pietro du Plessis (Bon Esperance) says the opening of the Chinese market is “hugely exciting,” especially as U.S. demand is expected to fall due to tariffs.
  • Producers adapt products for new markets: “Big red fruit with super sweetness” are favored in China.
  • South Africa’s Minister of Agriculture, John Steenhuysen, highlights this as a breakthrough, with hopes for blueberries and cherries next.
  • China's yearly import volume for these fruits dwarfs South Africa’s total capacity—offering vast growth potential.
  • A note of optimism replaces the gloom after the U.S. tariff increases.

Notable Quotes:

• “If there’s an extra market that’s opening up for us, it’s hugely exciting… I just assume that the volumes are going to drop because of the tariffs. And it’s hugely exciting to have a new market. China… we are happy to send some fruit to China.” (Pietro du Plessis, 05:21–05:45)
• “We are definitely going to shift a little bit more to big red fruit with super sweetness, because that’s exactly what that new market is preferring.” (Pietro du Plessis, 06:20)
• “…the stone fruit protocol was very important. It’s the first time China’s done more than one fruit at a time and we have got five through…” (John Steenhuysen, 06:34)

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Memorable Moments and Timestamps

• Softest wage growth since 2021 and its role in Fed policy – [01:08–01:45]
• Consumers bracing for tighter borrowing as economic mood stabilizes – [03:13–03:41]
• South African farmers’ strategic pivot from U.S. to China – [05:04–06:34]

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Tone and Style

The episode maintains Marketplace’s trademark clarity and conciseness, with an emphasis on market implications and global context. Expert analysis is balanced with on-the-ground reporting from the fruit orchards of South Africa.

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Summary Table: Key Segments

| Timestamp | Segment | Key Points | Notable Quotes | |------------|------------------------------------------|------------------------------------------------------|---------------------------| | 00:31–02:24| U.S. Employment Costs & Wages | Wage growth slows, policy implications | “Softest reading…” | | 02:24–03:41| Consumer Sentiment Surveys | Mixed data, cautious but stable expectations | “Much harsher view…” | | 04:42–07:30| South African Fruit Exporters Pivot | China opens doors; response to U.S. tariffs | “Hugely exciting…” |

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Conclusions

This episode interweaves big-picture U.S. economic trends—employment costs, consumer sentiment, and Fed policy moods—with a vivid snapshot of global trade shifts, personified by South African fruit growers’ adaptability. Moderate wage growth and cautious consumer confidence point to a steady but not roaring U.S. recovery, while global agriculture pivots quickly in the face of tariff headwinds.

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For listeners who missed the episode, this summary captures the news and narratives that matter most, directly in the spirit and cadence of Marketplace’s reporting.

Transcript

[David Brancaccio]

El programa Nacional de Vecas a Serde.

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[David Brancaccio]

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Trade is the pits in South Africa, as in fruits with pits. I'm David Brancaccio in Los Angeles. First, there's news that the cost of employing people did not go up as much as predicted. At one level, that's too bad, since who doesn't want a bigger raise? But if you're worried about interest rates or want inflation to come down, you may see this differently, which may be a bigger story than the other news this morning, that retail sales did not go up as expected in December. Jeffrey Cleveland is chief economist at Peyton and Regal.

A lot of people paying attention to retail sales this morning, but we're looking at the employment cost index because that tends to filter into a view on inflation via wage pressures that filter into all sorts of things, but in particular, services inflation. And this is the softest reading on my chart since 2021.

2021. So second year of the pandemic, just before the great surge in, you know, wages, inflation, all that stuff. That's interesting.

Yes, you are precisely correct, sir. Before the inflation eruption. So I think this is important when the central bank is looking to see what they might do next. I think moderating wage pressures, moderating inflation pressures will be key to that story. And this is a data point in favor of additional rate cuts, in my.

View, with the stipulation that it's a bummer that we're not getting raises. Right.

I would say it's a flip side. It's a symptom of a softening labor market. If the labor market were stronger, if we were adding more jobs, if we had, you know, a strong demand for labor, we would see more wage growth. And we're seeing the opposite right now. So it. It is sort of a reflection of a softening of the labor market.

All right, Jeffrey Cleveland, chief economist, Baden and Riegel, thank you.

Have a good week.

Two weeks ago, the business group the Conference Board released a survey that found the lowest consumer confidence since 2014. Yet yesterday, the New York Fed put out its reading showing some improvement in the mood. Marketplace's Carla Javier reports.

[Carla Javier]

Carola Binder at the University of Texas, Austin says after several years of unusual.

[David Brancaccio]

Readings, what was really notable was just its lack of notability. In a way, it seems like a very normal times kind of survey ready.

[Carla Javier]

And that Reid fits the Fed's decision to not cut or raise interest rates.

[David Brancaccio]

That's consistent with this idea that, well, we don't need more stimulus, we don't need less.

[Carla Javier]

Though one thing did jump out to Francesco d' Acunto at Georgetown. He says that despite slightly lower short term inflation expectations and slightly better labor.

[Mo Ali]

Market expectations, at the same time consumers seem to have a much sort of harsher view of potential future financial conditions in terms of their household finances, which.

[Carla Javier]

He thinks has to do with their expected ability to borrow money if they.

[Mo Ali]

Need it really seems that they believe that actually interest rates on loans, on any other type of product, like credit card debt, is likely to go up going forward.

[Carla Javier]

And while there can be a difference between low and high income respondents feelings, Dakunto says that this time they seem to have pretty similar expectations. Hi, I'm Carla Javier for Marketplace.

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[David Brancaccio]

The largest economy in Africa is South Africa, a country that since August has been trying to work with 30% tariffs for goods sold to the U.S. automotive and Agriculture are sectors hit especially hard. But far farmers there are turning to China to buy more of the country's pitted fruits, nectarines, plums, apricots and more. The BBC's Mo Ali filed this report for us.

[Mo Ali]

Plums are one of the five stone fruits alongside apricots, peaches, nectarines and prunes that will soon be exported from South Africa to China under a new trade deal. Pietro du Plessis runs the operations at Bon Esperance.

[Pietro du Plessis]

Sunflower production and export is pretty much about supply and demand. So if there's an extra market that's opening up for us, it's hugely exciting. In the same time, we've got extra tariffs from the usa, so it's a bit of a dampening on that side, but I just assume that the volumes are going to drop because of the tariffs. And it's hugely exciting to have a new market. China, one of the biggest economies of the world and where the per capita income of the people are rising. So it is really exciting and we are happy to send some fruit to China.

[Mo Ali]

The workers at Bon Esperance are busy trimming the taller branches of the plum trees to allow the fruit to get maximum exposure to the sun in preparation for the harvest early in the new year. Stone fruit producers like Pietro are fully aware of the different tastes of their markets and they produce accordingly.

[Pietro du Plessis]

So in terms of what's happening in China and the prospects, we are definitely going to shift a little bit more to big red fruit with super sweetness, because that's exactly what that new market is preferring.

[Mo Ali]

John Steenhuysen is South Africa's Minister of Agriculture. The stone fruit protocol was very important. It's the first time China's done more than one fruit at a time and we have got five through and we hope it's going to be followed up soon with blueberries and cherries. According to China's customs data, the country's appetite for stone fruit continues to surge, with imports reaching 21 million cartons of peaches and nectarines and 20 million cartons of plums in 2024 alone, volumes that exceed South Africa's entire seasonal export capacity. After the gloom following the announcement of 30% tariffs on their products exported to the US, there's now a renewed sense of optimism among stone fruit farmers in South Africa as a big new market in China beckons. In Cape town, I'm the BBC's Mo Ali for Marketplace.

[David Brancaccio]

And in Los Angeles, I'm David Brancaccio. It's the Marketplace Morning Report and we're from apm American Public Media.

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