All inflation is local

Summary

Marketplace Podcast Episode Summary: "All Inflation is Local"
Release Date: November 13, 2024
Host: Kai Ryssdal

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1. National Inflation Snapshot

The episode begins with an overview of the latest inflation data. The Labor Department reported that consumer prices in October rose by 2.6% year-over-year, with a monthly increase of 0.2% for the fourth consecutive month. Despite these figures indicating a stalled inflation trend, underlying factors continue to influence the broader economic landscape.

Notable Quote:
Amy Scott notes, “The latest inflation news is pretty much as expected, stuck” (00:37).

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2. Regional Variations in Inflation

A significant portion of the discussion centers on how inflation rates vary across different regions, primarily driven by housing costs. While national numbers provide a general picture, local factors such as housing demand and supply play a pivotal role in shaping inflation trends in specific areas.

Key Points:

• Housing as a Primary Driver: Housing costs remain the largest component of the Consumer Price Index (CPI), heavily influencing regional inflation rates.
• Regional Disparities: For instance, the New York, Newark, and Jersey City metro areas experience a 4% year-over-year inflation rate, whereas Phoenix, Mesa, and Scottsdale, Arizona, see a lower rate of 1.6%.

Notable Quotes:
Samantha Fields emphasizes, “Housing is one of the few markets that's still very local” (18:04).
Jed Kolko adds, “Housing costs can behave differently in different parts of the country” (19:39).

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3. The Role of Housing in Inflation

Economists highlight that housing remains a localized market with minimal cross-border competition. Factors such as population growth, employment rates, and housing supply constraints significantly impact regional inflation rates.

Key Insights:

• Supply and Demand Dynamics: In regions with high demand and limited housing construction, such as certain southern metros, rent inflation tends to rise.
• Impact of New Supply: Increased availability of rental units, especially one-bedroom apartments, has contributed to slowing national rent growth. Darrell Fairweather notes, “To one bedroom units. So that's bringing down the national rent” (02:34).

Notable Quote:
Michael Puglisi explains, “The slowdown in rent inflation reflects the cooling in the broader economy” (01:57).

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4. Household Debt and Economic Health

The Federal Reserve Bank of New York reported a slight increase in household debt, reaching nearly $18 trillion in the third quarter. However, this rise is tempered by a growth in personal disposable income, suggesting that many households are better positioned to manage their debt compared to previous years.

Key Points:

• Debt vs. Income Growth: While household debt has increased by 4%, personal disposable income has grown by 6.2% annually, improving the debt-to-income ratio.
• Consumer Stress Factors: Despite favorable debt metrics, many consumers still experience stress related to debt, influenced by factors like wage allocation and credit card usage.

Notable Quotes:
Odetta Kushi states, “We're nowhere near like the debt to income ratios that we saw kind of pre the financial crisis” (04:30).
Jesse Mecham comments, “I can't say the same for how people feel about their debt” (05:02).

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5. Small Business Resilience Post-Hurricane Helene

The episode features an interview with Jesse Dean, owner of Asheville Tea Company, discussing the devastating impact of Hurricane Helene on her business. Dean shares the challenges of rebuilding after losing a significant portion of her inventory and equipment to flooding.

Key Points:

• Financial Losses: An estimated $500,000 was lost in equipment and inventory.
• Recovery Efforts: Assistance from local businesses, customers, and a bridge loan from Mountain Bizworks have been crucial in the rebuilding process.
• Future Plans: Dean aims to resume production with the help of co-manufacturers and anticipates restarting sales by the holiday season, though she acknowledges the road ahead will be challenging.

Notable Quotes:
Jesse Dean recounts, “We lost all contact... the water had risen 27ft and had completely swallowed our building whole” (06:31).
Dean further adds, “It's going to be an extremely long road and, you know, I'm sure it's going to be filled with ups and downs” (07:41).

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6. Global Climate Finance at COP 29

Marketplace’s Henry Epp reports on the ongoing COP 29 climate talks in Azerbaijan, focusing on the financial commitments required from wealthier nations to support developing countries in their climate transition efforts.

Key Points:

• Historical Responsibility: Wealthier nations, having contributed more to historical carbon emissions, face greater pressure to finance climate initiatives in developing countries.
• Evolving Economic Landscapes: Countries like China have transitioned from developing to more industrialized economies, complicating the allocation of financial responsibilities.
• Funding Challenges: Negotiators must determine not only the contribution amounts but also address the evolving definitions of which countries should pay.

Notable Quotes:
Kenneth Gillingham states, “At the root of these negotiations is that some countries are historically more responsible...” (12:14).
Kelly Sims Gallagher points out, “That list of industrialized countries that have to pay was made in the 90s” (12:52).

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7. Rise of AI-Assisted Holiday Shopping

The podcast explores the increasing trend of consumers using generative AI tools to enhance their online shopping experiences during the holiday season. Adobe's prediction indicates that online shopping will grow by nearly 8.5%, reaching over $240 billion.

Key Points:

• Consumer Adoption of AI: Approximately two out of five surveyed individuals plan to use generative AI, such as ChatGPT and specialized retail chatbots, to assist with their holiday shopping.
• Retailer Integration: Major retailers like Amazon and Walmart have introduced AI-powered tools to help shoppers find products, compare prices, and receive personalized recommendations.
• Market Analyst Perspectives: While AI tools offer added convenience, some analysts view their current utility as a bonus rather than a necessity for online shopping.

Notable Quotes:
Corinne Ruff highlights, “What shoppers do seem to be using it for is define brand recommendations and compare prices” (23:53).
Brad Jacinski compares the current AI shopping trend to the early days of Alexa, noting the initial expectations versus actual usage patterns (25:03).

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8. Diverging Consumer Sentiments Among Political Lines

In the final segment, new consumer sentiment data reveals a stark contrast in economic perceptions based on political affiliations. Republicans report increased confidence in the economy, while Democrats exhibit decreased optimism for the first time in four years.

Notable Quote:
Amy Scott summarizes, “For the first time in four years, Republicans are feeling good about the economy, Democrats suddenly less so” (26:31).

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Conclusion

The "All Inflation is Local" episode of Marketplace delves deep into the multifaceted nature of inflation, highlighting how regional factors, particularly housing, shape economic experiences differently across the United States. Additionally, the podcast addresses household debt dynamics, the resilience of small businesses in the face of natural disasters, global climate finance negotiations, the evolving landscape of AI-assisted shopping, and the polarized economic sentiments among political groups. Through insightful interviews and expert analyses, the episode underscores the complexity of economic indicators and their varied impacts on everyday lives.

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This summary captures the essential discussions, key points, and notable insights from the "All Inflation is Local" episode of Marketplace. For a more comprehensive understanding, listening to the full episode is recommended.

Transcript

[Justin Vineyards]

This Marketplace podcast is supported by Justin Vineyards and Winery. Since 1981, Justin has been producing world class Bordeaux style wines from Paso Robles on California's Central coast. As the pioneer of Paso, Justin wines are what put Paso Robles on the winemaking map. With a rich history of accolades, Justin produces exceptional wines and is proud to be America's number one luxury Cabernet. Whether you're a first time wine drinker or a wine aficionado, Justin has a wine for every celebration and occasion. Looking for special wine to serve at your holiday table? Visit justinwine.com.

[Amy Scott]

That last mile on inflation yeah, we're not there yet. From American Public Media, this is Marketplace in Baltimore. I'm Amy Scott in for Kai rysdal. It's Wednesday, November 13th. Good to have you with us. The latest inflation news is pretty much as expected, stuck. The Labor Department said consumer prices rose 2.6% in October compared to the same time a year ago. The monthly increase was 0.2% for the fourth month in a row. One reason for the stalled progress? The price of shelter, which was up 5% year over year. And while that sounds like a big increase, rent inflation has actually been slowing down. Marketplace's Justin Ho is on the cold comfort beat today.

[Michael Puglisi]

The thing about the CPI report and the way it tallies up shelter costs is that it tends to reflect leases that were signed a while ago. Michael Puglisi, senior economist at Wells Fargo, says other private sector data show that today's rents have slowed down even further.

[Darrell Fairweather]

Look at, say, the Zillow indicators as just an example. Year over year, they're about what they were pre pandemic 3, 4, 5%.

[Michael Puglisi]

Puglisi says the slowdown in rent inflation reflects the cooling in the broader economy. There's less turnover in the labor market than a year ago. Earnings growth has come down and it.

[Darrell Fairweather]

Makes sense that that would then over time kind of be reflected in you're not going to sustain these 10% or even higher rent numbers that you were seeing a couple of years ago.

[Michael Puglisi]

Rent growth is still up quite a bit in the Northeast and the Midwest, but in southern states, including North Carolina and Tennessee, rents have eased up a lot. Darrell Fairweather, chief economist at the real estate website Redfin, says that's because of new supply coming online, especially of zero.

[Darrell Fairweather]

To one bedroom units. So that's bringing down the national rent.

[Odetta Kushi]

Figure because there are considerable rent cuts.

[Darrell Fairweather]

Going on in some of those southern metros.

[Michael Puglisi]

Fairweather says more rental units are hitting the market next year, which should cause rent inflation to slow further but new construction projects have been slowing down, thanks in large part to elevated interest rates. Odetta Kushi, deputy chief economist at First American, says if that continues, then after.

[Elizabeth Trovall]

This current batch of completed and under construction apartments come to market, there won't be a lot left to deliver, say.

[Michael Puglisi]

In 2026, especially if the Federal Reserve has any reason to keep interest rates higher for longer. I'm Justin Ho from Marketplace Wall street.

[Amy Scott]

Today pretty much flat. We'll have the details when we do the numbers. Our second snapshot of how the American consumer is doing comes from the Federal Reserve bank of New York, which said today household debt ticked up slightly in the third quarter of this year, reaching nearly $18 trillion. At the same time, though, personal disposable income grew, meaning on balance many households are in better shape to manage that debt. Marketplace's Elizabeth Troval has more.

[Elizabeth Trovall]

When we think about household debt, Rice University's Benedict Gutman Kenney says it's all.

[Odetta Kushi]

About how much more debt is someone taking on relative to their ability to repay it.

[Elizabeth Trovall]

And this report shows that Americans are in a better spot to pay off their debt. That's because income has grown an average of 6.2% annually while debts have increased 4%.

[Odetta Kushi]

We're nowhere near like the debt to income ratios that we saw kind of pre the financial crisis. Debt slow on those measures.

[Elizabeth Trovall]

Can't say the same for the US government though. Our national debt is around 36 trillion for instance. Atif Meehan says he has some concerns how government debt could lead to higher long term interest rates.

[Odetta Kushi]

Consumers obviously have a lot of debt on their heads and if long term interest rates were to rise, ultimately those interest rates will have to get priced into mortgages, auto loans and so on.

[Elizabeth Trovall]

For now, the aggregate picture of household debt in the US Looks pretty good, but that doesn't mean people feel good about their debt, says Jesse Mecham, who founded the budgeting platform YNAB.

[Darrell Fairweather]

There are a lot of 40 year olds that make way more money than they did when they were 30 something and they are just as or more stressed about their money and so that's what tells you it's not an income issue, he says.

[Elizabeth Trovall]

It's easy to overspend with how much consumers use credit cards.

[Darrell Fairweather]

Everything is stacked to get you to swipe and tap and buy and not think.

[Elizabeth Trovall]

Despite the bright spots in the report, delinquency rates are still a problem, meaning debt is a stress for plenty of American households. I'm Elizabeth Trovall for Marketplace.

[Amy Scott]

It's been about seven weeks since Hurricane Helene swept through the southeastern United States and many small businesses along its path are still trying to find their footing in the aftermath. Jesse Dean owns one of those businesses, Asheville Tea Company, a tea producer in Asheville, North Carolina. We called her up to see how she's faring.

[Jesse Dean]

When Hurricane Helene hit, yes, it was just a huge shift for us as, as I'm sure anyone can imagine. We, we have sort of built our business over the last eight years and had moved into our first facility that was our own to manufacture RT on a street called Thompson street in Asheville, and it's right beside the Swannanoa River. And when Helene hit, we lost all contact. You know, our, our cell phone service went out, our Internet went out, the storm was coming through and we didn't know what was happening for hours and later found out that the water had risen 27ft and had completely swallowed our building whole.

[Amy Scott]

I'm sure you've been doing some math in the weeks since. What is this going to cost you to replace all that equipment and inventory?

[Jesse Dean]

I mean, we estimate that we lost close to half a million dollars in equipment and inventory, which for us, you know, is more or less everything and is a huge hit, you know, and we can, I will say that we've had just an incredible outpouring of support from other tea companies, from local businesses, from our customers, from our farmers and, you know, from so many people. And so we don't need to pay that much out the gate to start to rebuild, which is really phenomenal. But it is, it is going to take funding and it is going to take, you know, a lot of support. And yeah, I think it's going to be an exciting time when we have some tea back and we do anticipate having some tea made by the holidays. But it's also going to be an extremely long road and, you know, I'm sure it's going to be filled with ups and downs as we go because we can, we can kind of only make what we can make. You know, we're going to have to inchworm along for sure.

[Amy Scott]

What about programs aimed at helping small businesses recover? Are you getting any funding or grants or loans through those programs?

[Jesse Dean]

We did receive a loan from a local CDFI called Mountain bizworks. They are phenomenal and have been very helpful, really, since our business started. But they have been providing some relief funding in the form of a bridge loan that's hugely helpful just to allow us to get some teammate and start to resupply on ingredients and packaging and things like that it also is a loan. It's, you know, it's something that we're going to have to pay back at some point in addition to the debt we already had on equipment and inventory that was lost.

[Amy Scott]

You said you're hoping to start selling again in time for the holidays. Where are you making your tea?

[Jesse Dean]

Yeah, well, we actually have two co manufacturers that we are going to work with and they are based in different locations outside of North Carolina. And so our tea bags will be made of the same material. They'll look the same and, you know, be the same ingredients. And we were still getting herbs from local farms, too, so. Yeah, so that's very exciting. And that's been our, our focus, really. We, we've really zeroed in on getting some tea made and then we'll start to kind of rebuild the actual facility.

[Amy Scott]

What's your favorite tea that you make? What would you like to have a cup of right now?

[Jesse Dean]

Oh, I love that question. You know, one that I tend to drink a lot of is called Chamomile Lavender, and it was one of the first blends that that I had made. And it's obviously chamomile and lavender. And then we blend it with tulsi, which some people call holy basil and anise hyssop, which is in the mint family, but it has a little bit of a licorice y taste. And so it's just one of my personal favorites.

[Amy Scott]

It sounds very calming.

[Jesse Dean]

Yes.

[Amy Scott]

We could all use a cup of tea right now.

[Jesse Dean]

That's right. I think maybe that's why I'm feeling drawn to that one.

[Amy Scott]

All right. Jessie Dean is owner of Asheville Tea Company. Thank you so much for your time.

[Jesse Dean]

Thank you so much, Amy. I'm really grateful.

[Amy Scott]

Looking more broadly now to the global climate, as we talked about earlier this week, the COP 29 climate talks are underway in Azerbaijan. The central question under negotiation this year is how much should wealthier countries pay to help developing nations transition to cleaner energy and adapt to the impacts of climate change? Industrialized countries have already been funding these efforts after a previous COP agreement in 2009. What negotiators need to decide now is how much more those nations will commit in the years ahead and which countries have to pay. Marketplace's Henry Epp reports.

[Darrell Fairweather]

At the root of these negotiations is that some countries are historically more responsible than others for all the carbon in the atmosphere, says Kenneth Gillingham, a professor at Yale.

[Odetta Kushi]

It's really the wealthier nations of the world that predominantly have been leading to the issue of climate change. That we have today.

[Darrell Fairweather]

The United States, the United Kingdom, most of Europe bear more blame. So as those nations ask poorer countries to also reduce their carbon emissions, they've said they'll pay to help them do that.

[Amy Scott]

Industrialized countries agreed in principle many times in the history of the climate negotiations to provide this kind of financial assistance.

[Darrell Fairweather]

Kelly Sims Gallagher is dean of the Fletcher School at Tufts University. Here's where things get tricky. That list of industrialized countries that have to pay was made in the 90s.

[Amy Scott]

So countries like China were considered and.

[Elizabeth Trovall]

Very much were developing countries in terms.

[Amy Scott]

Of per capita income at that time.

[Jesse Dean]

Back in the 1990s.

[Amy Scott]

But circumstances have changed a lot.

[Darrell Fairweather]

China, especially is now much wealthier and more industrialized. But it's not officially on the hook for climate finance, and that's a big sticking point at COP this year, says Rishikesh Ram Bondari at Boston University.

[Odetta Kushi]

How do you get the politics and the legality, you know, in one place so that we can have a deal that really works for everybody?

[Darrell Fairweather]

And as they figure out who pays, negotiators must also settle on a number, says Ian Mitchell at the center for Global Development.

[Odetta Kushi]

Most people agree that the needs are in the trillions of dollars per year.

[Darrell Fairweather]

Mitchell just landed in Azerbaijan for COP 29. He says he's not particularly optimistic that the assembled countries will agree to an amount that meets those needs. I'm Henry Epp for Marketplace.

[Amy Scott]

If you want to know more about how the US Election results could affect climate policy. The latest episode of How We Survives Burning Questions is out now. Find it wherever you listen to podcasts coming up.

[Odetta Kushi]

So we're seeing a really significant uptick in traffic coming from generative AI sources to retail sites.

[Amy Scott]

AI assisted shopping is on the rise. But first, let's do the numbers. The Dow Jones Industrial Average gained 47 points, a 10th percent end at 43,958. The NASDAQ lost 50 points a quarter percent to finish at 19,002 30. And the S&P 500 added just one point, barely changed to close at 59 85. Budget carrier Spirit Airlines plunged 59%. The Wall Street Journal reported today that the company could file for bankruptcy after merger talks with rival Frontier failed. Frontier dipped 1 and 8 10%. JetBlue ascended 9 and 8 10%. Rivian Automotive accelerated more than 13%. The electric vehicle maker announced a joint venture with Volkswagen in a deal worth $5.8 billion. Volkswagen slowed 2 and 3 10%. EV giant Tesla edged up half a percent. Bond prices fell. The yield on the 10 year T note rose to 4.4. You're listening to Marketplace.

[Henry Epp]

You turn to Marketplace for up to the minute news for stories that show you the connections between global events and your personal economy. And you're not alone. Marketplace is the most widely consumed business and economic news program in the country. We're proud to make fact based journalism freely accessible and Marketplace investors make it all possible. Your year end donation today will make a real difference in our nonprofit newsroom and in the lives of millions of Marketplace listeners every single day. So please contribute what you can [e-mail].

[Justin Vineyards]

Donate this Marketplace podcast is supported by Remarkable what if Paper Were Given Digital Powers? Introducing Remarkable Paper Pro the Ultimate Paper Tablet Remarkable Paper Pro is a premium digital notebook with the feel of paper for note taking, organizing and reviewing documents. Keep all your notes and documents on a slim and stylish device that's thinner than your smartphone. One place for all your important work. Get the digital tools you need like cloud sync, undo, copy paste and handwriting conversion without the distractions found on other devices. Remarkable Paper Pro features a distraction free design and an intuitive interface built from the ground up around focus and thinking. Go for weeks on a single charge thanks to an upgraded battery made using recycled cobalt and keep working when the lights go out with the new front light. It's the ultimate paper tablet. Get yours [e-mail] this is Marketplace.

[Amy Scott]

I'm Amy Scott. We started the show talking about inflation. Quick recap. The CPI was up 2.10percent in October from the previous month and up 2.6% compared to a year ago. Those are the national numbers, which is how we tend to talk about inflation, but the numbers look different depending where you live. For example, right now inflation in the New York, Newark and Jersey City metro area is is up 4% since last year, while in Phoenix Mesa and Scottsdale, Arizona, it's up 1.6%. Marketplace's Samantha Fields has more on what drives those regional differences.

[Samantha Fields]

It mostly comes down to one thing. Housing. Steve Reed, an economist at the Bureau of Labor Statistics, says housing is one of the few markets that's still very local.

[Darrell Fairweather]

When we think of why would prices be moving more in one area than another. The rental market is really an area that can vary from place to place.

[Samantha Fields]

More than most markets with other things we buy. If prices are rising in one part of the country, they're likely rising at a similar rate everywhere else. Take groceries.

[Darrell Fairweather]

That's mostly a national market, and it's similar for durable goods. You're not going to have cars getting way cheaper in Seattle, but way more expensive in Tampa. Anything like that.

[Samantha Fields]

Same for clothes, electronics, furniture. One way to think about this is that these are products that can be moved from one place to the other. IMing MA at Columbia Business School says with anything that can be shipped, there's competition. So if a business in Boise raises the price of dishwashers, a customer can just go online and buy a cheaper dishwasher from somewhere else. That's why in a lot of these sectors where moving products around is more feasible, the regional variations tend to be much lower. But with housing, it's a different story. There isn't that same kind of cross border competition. If you need to live in a specific area for your job, you can't really go looking for a cheaper apartment. Apartment somewhere far away. And economist Jed Kolko says housing costs can behave differently in different parts of the country.

[Odetta Kushi]

In places where there's a lot more.

[Amy Scott]

Demand for housing, maybe because population or.

[Michael Puglisi]

Employment is growing, prices might be rising.

[Amy Scott]

Faster, especially in places where there is growing demand and very little housing construction.

[Samantha Fields]

Housing is a main driver of inflation because it's the biggest monthly expense most people have. So Ken Poole at the nonprofit center for Regional Economic Competitiveness says it's weighted heavily in the consumer price index of.

[Henry Epp]

The basket of goods that a consumer buys.

[Darrell Fairweather]

Anywhere from 30 to 50% of their.

[Odetta Kushi]

Wages go into housing.

[Darrell Fairweather]

So even a small bit of increase in housing can have an outsized impact.

[Samantha Fields]

On your household budget and an outsized impact on the inflation rate where you live. Barbara Denham at Oxford Economics says in the first couple of years of the pandemic, when lots of people moved away from big expensive cities like New York to more affordable ones in the Sun.

[Jesse Dean]

Belt, places like the Florida markets used.

[Samantha Fields]

To have the highest inflation rates, and.

[Darrell Fairweather]

They don't anymore because their rate of.

[Amy Scott]

Increase in their housing costs is not as dramatic as it had been, say.

[Samantha Fields]

Two or three years ago. In fact, the Tampa area now has one of the lowest inflation rates in the country and New York has one of the highest. While housing is the biggest factor. Yi Ming Ma at Columbia says there is another thing that's playing a role, gas prices. The extent to which different regions are affected by a change in the gasoline price is the extent to which you drive versus the extent to which you, say, use public transportation. In Tampa, for instance, most people drive. So gas prices are a bigger part of household budgets and the inflation calculation than in New York City, where many people take the subway. So when gas prices fall, as they have recently, that pushes Tampa's inflation rate down faster than New York's. I'm Samantha Fields for Marketplace.

[Amy Scott]

All right, so we've talked about consumer prices and debt. Now to a story about how people spend money. Adobe is predicting online shopping will rise nearly eight and a half percent this holiday season to more than $240 billion. And more people are turning to artificial intelligence to help with that shopping. We're talking ChatGPT, Gemini and new conversational chatbots from retail. Adobe found that two in five people it surveyed plan to use generative AI for holiday shopping this year. Corinne Ruff has that story.

[Corinne Ruff]

Victoria Winter relies on AI every day, in particular chatgpt for her to do list. She's an entrepreneur and busy mom of two in Charleston, South Carolina.

[Elizabeth Trovall]

Whenever ChatGPT first came to the market, it's like, I know exactly what to do with this.

[Corinne Ruff]

She uses ChatGPT's dictation feature to create a bedtime routine list for the babysitter, transcribe notes from calls and this year for holiday shopping, to brainstorm gift ideas for her kids.

[Elizabeth Trovall]

I like to get outdoor toys, so it could be like, what's something I could get today that would be appropriate for a four year old that, you know, we could keep adding on to it, making like a full jungle gym.

[Corinne Ruff]

And now she has AI options. Beyond ChatGPT, more retailers are rolling out Gen AI assistants. It's the first holiday season for Walmart's Chatbots, still in beta, and also the Rufus Assistant, which came out in February from Amazon. Of course, buying online is already super easy for consumers, so Forrester retail analyst Sucharita Kadali says these AI tools are more of a bonus than a necessity.

[Amy Scott]

People purchase repeatedly from Amazon multiple times a day in many cases. So it's sort of what problem are you looking to solve with Gen AI?

[Corinne Ruff]

Kodali says there are three reasons consumers shop online rather than in store to search for specific products, see which retailers sell those products, and to get them delivered fast.

[Amy Scott]

Gen AI has not proven itself to be that much of a value add in any of those things.

[Corinne Ruff]

What shoppers do seem to be using it for is define brand recommendations and compare prices. It's still early days for Gen AI shopping, and Vivek Pandya, lead insights analyst for Adobe, says young consumers seem to.

[Odetta Kushi]

Really like it, so we're seeing a really significant uptick in traffic coming from generative AI sources to retail sites.

[Corinne Ruff]

Amazon says its Rufus chatbot has already answered tens of millions of questions from shoppers. It recently rolled out AI powered gift guides. Walmart is talking up the convenience of its chatbot to help find the perfect gifts. CEO Doug McMillan said on an earnings call back in August that Genai is already helping drive digital impulse sales. Think you're shopping for a new soccer ball for your kid and the shopping assistant suggests shin guards and cleats to go with. But who knows if AI will change how people buy stuff? Brad Jacinski, a director analyst at Gartner, likens this moment to the early days of Alexa, when people thought everyone would start dictating shopping lists to their devices.

[Odetta Kushi]

But what they ended up using voice search for was less for shopping and more for asking what's the weather going to be, setting kitchen timers, recipes, that type of thing.

[Corinne Ruff]

Jashinsky says Gen AI is most helpful if you're trying to decide on a big purchase, like say, a new tv, which is what he's shopping for right now.

[Odetta Kushi]

You know, even just understanding the brands and what's out there. I felt like it was all, all new to me because I haven't, haven't purchased one in a long time.

[Corinne Ruff]

So he's been asking both Amazon and Walmart's AI assistants for help. Jashinsky says they both generate good review summaries and allow you to compare product details.

[Odetta Kushi]

Or you can ask it if it's a good deal and it'll tell you like about pricing. I think Amazon has the edge with their tool on that side.

[Corinne Ruff]

On the other hand, he says it felt like Walmart had a bigger selection, but he hasn't bought a TV yet.

[Odetta Kushi]

I feel embarrassed, but I'm waiting for Black Friday deals before I pull the trigger.

[Corinne Ruff]

In other words, AI or not. Just like always, shoppers want a good deal. I'm Corinne Ruff for Marketplace.

[Amy Scott]

This final note on the way out today from the department of no surprise here, Axios reported on new consumer sentiment data from Morning Consult, showing that for the first time in four years, Republicans are feeling good about the economy, Democrats suddenly less so. Our media production team includes Brian Allison, Jake Cherry, Jessica Dueler, Drew Jostad, Gary O'Keefe, Charlton Thorpe, Juan Carlos Tirado and Becca Weinman. Jeff Peters is the manager of media production and I'm Amy Scott. Hope to see you back here tomorrow. This is apn.

[Henry Epp]

You've turned to Marketplace for up to the minute news for stories that show you the connections between global events and your personal economy. And you're not alone. Marketplace is the most widely consumed business and economic news program in the country. We're proud to make fact based journalism freely accessible and Marketplace investors make it all possible. Your year end donation today will make a real difference in our nonprofit newsroom and in the lives of millions of Marketplace listeners every single day. So please contribute what you can [e-mail] donate.