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- [00:01]
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You can turn to Marketplace to hear from powerful leaders and everyday people about the economy and their role in it. Now we hope we can turn to you. Marketplace is facing real threats and challenges as we plan for the future. As a public media program, donations from you are an important part of our budget. Here's one action you can take right now that will have a long lasting impact. Start a monthly donation to support. Five bucks a month is a great place to start. Head to marketplace.org donate and thank you.
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To realize the future America needs, we understand what's needed from us to face each threat head on. We've earned our place in the fight for our nation's future. We are Marines. We were made for this. There are signs the economy lost jobs last month. From Marketplace, I'm Sabree Ben Manishore in for David Brancaccio. Markets are having to digest a lot right now. There's the government shutdown. There's also new private payroll data showing the economy lost jobs in September. Susan Schmidt is here to talk about it. She's portfolio manager at Exchange Capital Resources. Hi Susan. Good morning. So markets look like they maybe care a little about the shutdown, but but not a lot. Why or why not?
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Market moves happen when markets are surprised. Investors hate. That's when you see a big reaction. We're not getting that today because this shutdown has been very well communicated and talked about over the last couple of weeks. Investors have been expecting it.
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Speaking of the shutdown, that means we are not going to get some pretty important government data this week. But ADP is a company that processes payrolls for companies. They look at their data on 26 million workers and they estimate that in September the US actually lost 32,000 jobs. What do we think of that?
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C
Well, that's something markets will pay attention to, especially because we don't have the government data that we normally would see on Friday. So 32,000 jobs that are lost is very different than the 51,000 jobs that were expected to be gained. That's a surprise to the market. It does continue the story that job market is weakening and the Fed should be lowering interest rates. However, investors really count on the government data to come out and reaffirm that that's what's happening. It's going to be interesting to see how this plays out because we'll be missing a lot of the economic data that investors use as clues to see how the Fed will react.
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Susan Schmidt, portfolio manager at Exchange Capital Resources Today is the deadline for the Department of Education to launch the new free Application for Federal Student Aid, or FAFSA for short, to not only did the department meet the deadline, but students have already started to fill out the new forms. We asked the Department of Education if the shutdown would affect these financial aid applications. They told us the website would work. There just might not be anyone there to process them. Marketplace's Carla Javier looks into what, aside from the shutdown, is different about FAFSA this year.
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For the past two years, the Department of Education released the application late in the fall and timing is everything, says Joshua Etienne, vice president of advising at uaspire, a nonprofit focused on on college affordability.
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Students have had less time to make a financially informed decision. College admissions and financial aid offices have been scrambling to try to meet the demand with a shorter Runway.
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Another change? Faster identity verification. Also to add a parent. Now a student just needs their email to send them a link to fill in their information. Might seem small, but Haley Domicolo is an advisor with OnPointe for college. She sat with hundreds of students in career centers and libraries around Syracuse, New York, as they filled out their forms. Getting a parent's birthday or their Social Security number may have been a hurdle in that moment, as parents might be.
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At work or sometimes they're more hesitant to give away that information.
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The Department of Education says with the changes, the forms could take as little as 30 minutes to complete. I'm Carla Javier from Marketplace.
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The Federal Reserve is tasked with keeping inflation under control while also keeping people employed in the economy as much as possible. Both inflation and the labor market are showing warning signs right now, and it is hard to manage both at the same time. On top of that, the Fed's weathering a blistering political pressure campaign from the White House. One person in the room where many Fed monetary policy decisions are made is Susan M. Collins, president and CEO of the Federal Reserve bank of Boston. We recently sat down with her to get her thoughts on tariffs, inflation, immigration, and the Fed's independence. Here is part of our conversation. New Fed Governor Stephen Miron believes there is not tariff driven inflation and that the decline in immigration would also cause rents to fall, among other things. What are your thoughts?
- [05:22]
E
So of course I speak for myself and what I see is some evidence that the tariffs are increasing prices in particular of some kinds of goods. And again, I do expect to see more of that going forward. You know, if I bring together what I hear talking to firms and also what we see from survey data. And the Boston Fed just earlier this month put a piece on our website that's based on quarterly survey of small and medium sized businesses asking them how they're seeing tariffs and how they expect tariffs to impact their pricing decisions. And what we see very clearly from those firms is that as they're understanding their belief that those tariffs are going to be more longer lasting, their expectation of how much it will filter into prices has increased. And so that's another reason based on some of those survey data, that I expect that we will see continue increase in the impact of tariffs on inflation going forward. But again, my baseline is that that would play out over the rest of this year into early next before we start to see inflation gradually coming back down.
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B
What about the immigration piece? I mean, what more broadly speaking are the consequences of significantly falling immigration rates?
- [06:48]
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The data are still early days to be able to really read them. There are some things that are yet clear from the data. We know that some of the cross border movements have declined dramatically and are very low, if not close to zero. But that doesn't necessarily mean that immigrants aren't continuing to contribute to the labor force.
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Now speaking of Stephen Miron, who is technically still employed by the White House, just on a leave of absence while he serves as a Fed governor, that is seen by many as one of multiple holes in the armor of the Fed's independence. Are you worried about the Fed's independence?
- [07:34]
E
What I will say is I see the independence of the Federal Reserve as really very important for enabling us to really fulfill the mandate that we have from Congress for price stability and maximum employment. There's a lot of very clear data that shows that independent central banks that are able to take that longer term view do a better job serving the public and providing stable price environment and for vibrancy. And so I continue to be really focused on the importance of that work, but also recognizing that clearly there is a lot of discussion in the news and so that it's important to recognize that we pair the importance of accountability with that independence.
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Your term is up in February. You've been through two administrations now. Do you want to stay on?
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I'm focused on doing my job and will, you know, obviously continue to do that to the best of my ability while I'm in the role.
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Susan M. Collins, President and CEO of the Federal Reserve bank of Boston. Thank you so much for coming.
- [08:44]
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A real pleasure to be here. Thank you.
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And we spoke with President COLLINS A mere 12 hours or so before the government shut down. So we of course talked about that too. Can hear that part of our conversation and much, much more on our website, marketplace.org in New York, I'm Sabree Benishore with the Marketplace Morning Report from apm, American Public Media.
- [09:12]
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Hey, it's David Brancaccio. Marketplace's fall fundraiser ends on Friday, and we're making good progress toward our goal to hear from 2,000 marketplace investors. This is a different kind of goal, one that centers on your participation. Whether it's your first ever donation, if you're chipping in again, or if you're starting or increasing a monthly gift. I'm telling you, it all matters more than ever now. So stand up and be counted as a Marketplace investor. And if you can do it by Friday, go to marketplace.org donate.