Checking up on child care costs

Summary

Marketplace Morning Report: Checking Up on Child Care Costs

Release Date: July 21, 2025
Host: David Brancaccio
Episode Focus: The escalating costs of child care in the United States and its economic implications for families.

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Market Overview

The episode kicks off with David Brancaccio providing a snapshot of the current financial markets. Despite ongoing trade tensions, markets remain resilient:

"Financial markets are calm to start the week with the Dow up 61 points in early trading, a 10th%."
[01:09]

The Dow Jones Industrial Average saw an increase of 0.10%, the S&P 500 rose by 0.41%, and the Nasdaq climbed 0.71%, indicating investor confidence amidst global uncertainties.

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Global Political Instability and Trade Tensions

Brancaccio delves into recent political developments in Japan and their potential impact on global trade.

"The ruling coalition there got clobbered in an election. The prime minister indicates he'll stay. Talk of a no confidence vote there. It's a holiday in Japan today, so market reaction will be tomorrow."
[01:38]

Economist Julia Coronado of Macro Policy Perspectives highlights the complexity of the situation:

"It's a very fluid situation, very unsettled, and it comes at a time when, of course, the trade negotiations are coming to the second deadline."
[01:54]

Brancaccio also touches upon the strained relationship between the U.S. administration and the Federal Reserve:

"Markets look calm on this Monday."
[02:24]

Coronado adds that markets are currently "ignoring the bad news, assuming that it will go away," but warns of the risks involved in such complacency. The discussion also touches on the potential for President Trump to exert influence over Fed Chair Jerome Powell, indicating political maneuvering that could affect monetary policies.

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Oversight and Regulatory Changes

The episode shifts focus to regulatory oversight within the financial sector:

"The Public Company Accounting Oversight Board may not be your past or focus, but it's there to stop another Enron style fraud."
[03:16]

Nancy Marshall Genzer reports on the impending resignation of Erica Williams, the head of the Public Company Accounting Oversight Board (PCAOB):

"Williams appears worried about how the board will fare in the Trump administration."
[03:35]

This leadership change raises concerns about the board's ability to maintain stringent oversight of accounting firms, crucial for investor confidence.

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Economic Policies and Mortgage Rates

U.S. Treasury Secretary Scott Besant advocates for lowering interest rates to invigorate the sluggish mortgage market:

"Lower rates would unlock the mortgage market which is in the doldrums in many parts of the country."
[04:23]

Brancaccio notes that while bond markets are currently favorable, allowing benchmark interest rates to drop to 4.37%, there's apprehension about the potential for rising inflation if rates are reduced indiscriminately.

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Rising Child Care Costs in the U.S.

The core segment of the episode examines the surge in child care expenses and its burdens on American families.

"New spending and tax law increases the child tax credit by 10%. That extra $200 per year per child for many families equals $17 more per month."
[05:51]

Monica Miller from the BBC reports from Pennsylvania, highlighting personal stories to illustrate the broader economic challenges:

"Unlike most countries, the US does not have paid parental coverage. There's the Family and Medical Leave Act which allows 12 weeks off unpaid after the birth of a child or an adoption."
[06:00]

Alison, a primary school teacher, shares her struggles with unpaid leave:

"I would have had to take my sick time. Unlike most countries, the US does not have paid parental coverage."
[06:10]

Another parent, Sydney Gleckler, details the high costs of full-time child care:

"When the babies were young, they considered putting them in full day childcare, but it would have cost roughly $4,000 per month."
[07:22]

Elliot Haspel, a senior fellow at the Family Policy Lab, provides statistical context:

"Since the pandemic, American families pay more than their rent for full time care of a child under the age of five."
[08:18]

The discussion underscores that the U.S. allocates only 0.3% of its GDP to child care in comparison to higher percentages in other industrialized nations like Sweden and Iceland. However, there are signs of bipartisan efforts to offer financial relief to families, suggesting potential policy developments on the horizon.

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Conclusion

The episode wraps up by emphasizing the critical state of child care costs and the necessity for comprehensive policy solutions to support American families. The rising expenses not only strain household budgets but also influence employment decisions, particularly among mothers who disproportionately bear the burden of child care responsibilities.

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Notable Quotes:

• "My pleasure." — Julia Coronado, [03:14]
• "Both Republicans and Democrats have made it clear that they need more support to raise their young children." — Monica Miller, [09:10]

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This episode of Marketplace Morning Report provides a comprehensive analysis of the financial markets, regulatory changes, and the pressing issue of child care costs in the U.S., offering listeners valuable insights into how these factors interplay within the broader economic landscape.

Transcript

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[David Brancaccio]

Markets roll merrily along despite a trade war. I'm David Brancaccio in Los Angeles. Financial markets are calm to start the week with the Dow up 61 points in early trading, a 10th%. The S&P is up 4.10of a percent, the Nasdaq up 7.10of a percent. This political instability in Japan and more global trade war On Mondays we consult economist Julia Coronado at Macro Policy Perspectives in Austin, Texas.

[Julia Coronado]

Hey Julia, Good morning.

[David Brancaccio]

First Japan, the ruling coalition there got clobbered in an election. The prime minister indicates he'll stay. Talk of a no confidence vote there. It's a holiday in Japan today, so market reaction will be tomorrow. You must be tracking this.

[Julia Coronado]

Yeah, it's a very fluid situation, very unsettled, and it comes at a time when, of course, the trade negotiations are coming to the second deadline. So really complex situation in Japan. We'll see how that plays out.

[David Brancaccio]

Speaking of trade, I used to live in a world that would react when a president of the United States spoke of putting across the board tariffs on the European Union of 15 to 20% and the EU not rolling over, gearing up for a trade war yet. Markets look calm on this Monday.

[Julia Coronado]

So far, yeah, markets have gotten into a habit of ignoring the bad news, assuming that it will go away. And that's of course a dangerous assumption to be making, but it seems to be one the markets are rolling with, whether it's tariffs on the EU or firing the Fed chair, but we'll see whether that's a good assumption or not.

[David Brancaccio]

Yeah, and to be clear, Jay Powell is still head of the Fed, but you know, we're tracking the headlines that the president is unhappy, happy with his stewardship?

[Julia Coronado]

Yes, very much. Still the Fed chair, but also some pretty serious groundwork being laid to give President Trump the option to at least try to fire him. Seems to be a bone he cannot let go of.

[David Brancaccio]

Economist Julia Coronado is also a professor at the University of Texas, Austin. Thank you.

[Julia Coronado]

My pleasure.

[David Brancaccio]

The head of a board that oversees accounting accompanies that trade on the stock market is leaving. The Public Company Accounting Oversight Board may not be your past or focus, but it's there to stop another Enron style fraud. Its head, Erica Williams, will leave by tomorrow. Here's Marketplace's Nancy Marshall Genzer.

[Nancy Marshall Genzer]

The Public Company Accounting Oversight Board was established by Congress in 2002 after accounting scandals at WorldCom and Enron. The board oversees the accounting firms that audit public companies. It establishes standards for these firms, checks their audits and confine them. The idea is to protect investors so they can have faith in the financial statements of the companies they're putting their money. The securities and Exchange Commission oversees the board. Reuters is reporting that SEC Chair Paul Adkins asked Erica Williams to resign. Williams appears worried about how the board will fare in the Trump administration. In a quote on the board's website, she says it's critical that board staff, quote, continue to be empowered. I'm Nancy Marshall Genser for Marketplace and.

[David Brancaccio]

U.S. treasury Secretary Scott Besant continues to make the administration's case that lower interest rates would help the economy. He said this morning morning lower rates would unlock the mortgage market which is in the doldrums in many parts of the country. With mortgage rates stuck in the fairly high setting, the administration is pressuring central bankers to lower rates done wrong. That could also spark inflation. But the bond market is up now, allowing the benchmark interest rate to fall to 4.37%.

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[David Brancaccio]

This Marketplace podcast is supported by Mercury. Mercury is the FinTech More than 200,000 businesses use to protect their money and power their financial workflows. Learn [e-mail] checking up now on the child care cost in the U.S. the new spending and tax law increases the child tax credit by 10%. That extra $200 per year per child for many families equals $17 more per month. But child care costs are up 30% since before the pandemic. Hiring child care professionals is leaving families facing tough economic choices. Monica Miller with our partners at the BBC reports from Pennsylvania.

[Monica Miller]

It's dinner time at the Harrisons House in the suburbs of Philadelphia, Pennsylvania. Alison and her husband have three baby high chairs lined up in a row for their one year old triplet daughters. She's a primary school teacher at a government funded school and wasn't given much time off before the girls were born. I worked up until the Wednesday and I had the girls Friday. I was not able to take leave before. I would have had to take my sick time. Unlike most countries, the US does not have paid parental coverage. There's the Family and Medical Leave act which allows 12 weeks off unpaid after the birth of a child or an adoption. But some states like California and New York have put into effect mandatory paid parental leave programs and some companies also offer their own programs for new parents.

[David Brancaccio]

Are you gonna see thunder?

[Monica Miller]

A few towns away is Sydney Gleckler. She has a four and a half year old daughter and eight month old twin girl. Her job in the pharmaceutical industry is hybrid so she works from home a few days a week.

[Julia Coronado]

We're really lucky that we had the amount of leave that we do.

[Monica Miller]

Both she and her husband's employers offered parental leave which helped. When the babies were young, they considered putting them in full day childcare, but it would have cost roughly $4,000 per month. The bank of America has found that the average family's child care costs more than a third greater than 2019. That's due to inflation and reduced childcare help during the COVID pandemic. Given that the responsibilities traditionally fall disproportionately on mothers, many of them are torn between spending a large portion of their salary on care, cutting back their hours or quitting their jobs.

[Julia Coronado]

I like to work, but I also we're a household that I think relies on two incomes.

[Monica Miller]

Since the pandemic, American families pay more than their rent for full time care of a child under the age of five. Elliot Haspel is a senior fellow at the Family Policy Lab at the think tank Capita different in the US than.

[David Brancaccio]

Most other countries is there's very little public funding that comes in to defray those costs.

[Monica Miller]

The US spends roughly 0.3% of its GDP on childcare in pre kindergarten. That's compared to the average 0.7% of other industrialized nations and 1.9% in Iceland and Sweden. But some childcare advocates in the US Say there are signs of bipartisan support to offer some financial relief to families. Sarah Ritling from the First Five Years Fund Once we get on the ground and you're in communities and actually when you're in the halls of Congress, there.

[Julia Coronado]

Are really good glimmers of hope.

[Monica Miller]

Both Republicans and Democrats have made it clear that they need more support to raise their young children. I'm NabiBC's Monica Miller for Marketplace, and.

[David Brancaccio]

We'Re from APM, American Public Media. Well, there it is. Federal funding for public media was just eliminated. That seriously affects over 800 local public radio stations that broadcast Marketplace, and that in turn impacts our bottom line. Marketplace needs your help to plan for an uncertain future and to continue to bring you news, interviews and stories about the economy as it changes. Every donation right now has a profound impact. Please give what you [e-mail] donate and thank you.