Are U.S. consumers finally running out of steam?

Summary

Marketplace Podcast Summary: "Are U.S. Consumers Finally Running Out of Steam?"

Release Date: March 28, 2025
Host: Kristen Schwab (Kyra's Doll)

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Introduction

In this episode of Marketplace, host Kristen Schwab explores the pressing question: Are U.S. consumers finally running out of steam? The discussion delves into recent economic indicators, including personal income, consumer spending, inflation, and consumer sentiment. Experts from The Washington Post and The New York Times provide insights into the current economic landscape and its implications for both consumers and businesses.

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Inflation and the Federal Reserve’s Response

Key Topics:

• Personal Consumption Expenditures (PCE) Index: February saw a 0.3% month-over-month increase, leading to a 2.5% year-over-year inflation rate.
• Federal Reserve’s Strategy: The Fed emphasizes a long-term perspective, focusing on inflation trends rather than reacting to individual monthly reports.

Notable Insights: Rachel Siegel (The Washington Post) discusses the Fed's approach to distinguishing between transient factors like tariffs and underlying inflation trends:

"The Fed is trying to take a longer view. They don't respond to one report this month or the other. Their focus is on the direction and the signal." [02:24]

She further explains the complexities introduced by tariff-induced inflation:

"Goods prices are starting to show a little bit of that heat—things that are manufactured in factories and subject to tariffs." [04:31]

Implications:

• Tariff Inflation: President Powell highlighted the ripple effects of tariff-induced price increases, using washers and dryers as examples of how initial tariff impacts can extend to related products.
• Retailer Strategies: Jordan Holman (The New York Times) notes that retailers are initially negotiating with suppliers to mitigate costs before considering price hikes:

"A lot of people have game plans that do include raising prices, and they’re ready to do that if the time comes." [05:26]

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Consumer Confidence and Spending Behavior

Key Topics:

• Consumer Sentiment Decline: Recent surveys indicate a significant drop in consumer confidence, reaching a 12-year low.
• Behavioral Shifts: There is a growing disconnect between consumer sentiment and actual spending patterns.

Notable Insights: Rachel Siegel emphasizes the importance of linking sentiment data with behavioral changes:

"There can be really added weight to these sentiment numbers if we start to see that behavior piece kick in, too." [06:58]

Jordan Holman observes shifts among different income groups:

"Higher income consumers are more tied to the volatile stock market, leading them to adopt a 'wait and see' approach." [08:10]

Recent Data Highlights:

• Personal Income Growth: February data shows an 0.8% increase, double the analysts' expectations.
• Consumer Spending and Savings: Despite income growth, consumer spending was weaker than expected, and the personal savings rate rose, signaling potential consumer caution.

Steven Brown (Capital Economics) connects these trends to changing consumer behaviors:

"US consumers might finally be running out of steam, and if prices keep rising, they might not come to the rescue this time." [10:11]

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Small Business Perspectives: Wild Leddy Case Study

Key Topics:

• Business Growth Amid Economic Concerns: Annie Lang Hartman, owner of Wild Leddy in Michigan, reports a 49% year-to-date increase in sales.
• Marketing and Values Alignment: Hartman attributes growth to authentic branding and engaging with customer values, particularly around public lands.

Notable Insights: Hartman discusses the impact of aligning business practices with personal values:

"I sat down with a design that I made years ago... the great reaction boosted our business and showed how important it is to keep talking about those things." [20:55]

Challenges:

• Inventory Management: Hartman remains cautious about future ordering amidst uncertain consumer foot traffic:

"I need to be making smart choices every day so that we can deal with leaner times and keep moving forward." [21:22]

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Environmental Efforts: Water Conservation and Composting

Water Conservation Project:

• 50 Liter Home Coalition: A pilot project in Los Angeles aims to reduce household water usage through efficient appliances and behavioral changes.

Notable Insights: Jake Olson shares his experience with water-efficient fixtures:

"We're using 20% less water, which is really exciting... we're getting to the point where we're as efficient as possible." [14:49]

Composting Initiatives:

• Agriman's Organic Recycling: Agriman, a leading organics recycler in California, processes 1.2 million tons of organic waste annually, aiming to reduce methane emissions from landfills.

Notable Insights: Bill Camerillo, CEO of Agriman, outlines the company's role in diverting organic waste:

"We handle about 1.2 million tons of organic waste per year, with plans to scale to 10 million tons." [25:01]

The project highlights challenges such as higher application costs and the importance of proximity between compost facilities and users to reduce expenses:

"One thing that helps reduce that cost is putting compost facilities closer to compost users." [27:13]

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Market Reactions and Economic Indicators

Stock Market Performance:

• Major Indices Decline: On the day of the episode, the Dow Jones, NASDAQ, and S&P 500 experienced significant drops, reflecting investor concerns over economic data.

Notable Insights: Lululemon's substantial stock decline serves as a case in point:

"Lululemon tumbled more than 14%. The athletic gear retailer issued disappointing guidance for the rest of this year." [17:37]

Bond Market Movements:

• Yield Adjustments: The 10-year Treasury yield fell to 4.25%, signaling shifts in investor sentiment towards safer assets amid economic uncertainties.

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Conclusion

The episode concludes by emphasizing the multifaceted nature of the current economic situation. While personal incomes are rising, reduced consumer spending and increased savings rates hint at possible economic cooling. Additionally, businesses are adapting to inflationary pressures through strategic negotiations and readiness to adjust prices. Environmental initiatives, such as water conservation and composting, showcase proactive efforts to address sustainability alongside economic challenges.

Final Thoughts: Kristen Schwab wraps up by highlighting the interconnectedness of consumer behavior, business strategies, and broader economic indicators, leaving listeners with a comprehensive understanding of whether U.S. consumers are indeed running out of steam.

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Notable Quotes:

• "The Fed is trying to take a longer view. They don't respond to one report this month or the other." – Rachel Siegel [02:24]

• "US consumers might finally be running out of steam, and if prices keep rising, they might not come to the rescue this time." – Steven Brown [10:11]

• "I need to be making smart choices every day so that we can deal with leaner times and keep moving forward." – Annie Lang Hartman [21:22]

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Additional Segments:

While the primary focus was on economic indicators and consumer behavior, the episode also touched on environmental sustainability projects and featured advertisements for financial services and investment platforms. These segments, while informative, were ancillary to the main discussion on consumer economics.

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This summary encapsulates the key discussions and insights from the March 28, 2025 episode of Marketplace, providing listeners and non-listeners alike with a comprehensive overview of the current state of U.S. consumer economics.

Transcript

[Kristen Schwab]

Hello, listeners. Our goal at Marketplace is to raise the economic intelligence of the country. And that goes for teens and young adults, too. The newest season of Financially Inclined, hosted by Yaneli Espinal, tackles topics like how to align your values with your money decisions, the skill of negotiating, and what.

[Steven Brown]

You can get out of internships. Financially Inclined is presented in partnership with.

[Kristen Schwab]

Greenlight, the debit card and money app for teens. Greenlight helps teens learn to earn, save, spend wisely and invest. Tune in to Financially Inclined wherever you find your podcasts.

[Dr. Sally Brown]

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[Kyra's Doll]

I hate to steal yesterday's theme, but I am not in charge of the economic calendar. So today we're doing data dump round two from American Public Media. This is Marketplace in New York. I'm Kristen Schwab in for Kyra's doll. It's Friday, 28th March. Thanks for tuning in. Today we got a lot of numbers. Personal income, personal spending, consumer sentiment, and inflation. Numbers that give us a better picture of where the economy was in February. To help us decipher what it all means and what it says about where the economy is heading, we have Rachel Siegel at the Washington Post and Jordan Holman at the New York Times. Hello. Hello.

[Rachel Siegel]

Hi, Kristin. Hey there.

[Kyra's Doll]

Hi. So I want to start today with the biggie, which is inflation. The Personal Consumption expenditures index, or PCE, increased a bit in February, up 3/10 of a percent from the month before, which puts us at the big number of 2 1/2 percent year over year. Rachel, I'm wondering, should the Fed be worried about this or am I just primed to be extra sensitive to every little movement we see in an inflation reading now?

[Rachel Siegel]

Well, it's, it's, it's understandable that you would feel sensitive because we've been talking about inflation and inflation not always behaving the way we want for a really long time. The Fed, though, is trying to take a longer view. Right. They say that they don't respond to one report this month, one report the other month. Their focus is on the direction and on the signal. So last week at the Fed press conference. I asked Chair Powell about this. I said, how are you separating signal from things that might be noise or distraction? And he said that that's actually going to be a particularly difficult job. Even when it's been hard already because of tariffs, because of so much other uncertainty swirling around the economy, pinpointing that trajectory is going to be really hard. But that's their focus. Not necessarily one number that we got this morning.

[Kyra's Doll]

Well, yeah, let's stick with you and that Fed presser from last week because you asked about tariff inflation versus regular inflation. I'm wondering what Powell said about how much we can distinguish between the two. And I'm. I'm also wondering if it matters.

[Rachel Siegel]

It does matter. And it matters because, well, there are a lot of reasons that it matters, but it matters because it's starting to show up in the inflation reports that we're looking at. Powell specifically said that goods prices are starting to show a little bit of that heat. This is things that are manufactured in factories, that companies are ordering, things that have tariffs on them or are likely to be subject to tariffs. And these are the kinds of things that we're already starting to heat up. RDC starting to heat up. But what Powell also said is that those things can ripple through the economy and bring inflation up in other ways. So he gave the examples of washers versus dryers during the first Trump administration. Washers had tariffs on them, dryers did not. Washers went up in price. But then manufacturers of dryers thought, well, hey, why don't we get in on that? And they raised prices too. So there's now going to be this additional challenge for the Fed of pinpointing what is coming from tariff inflation, what might be some of the residual consequences of all that, and then ultimately what the Fed should do about it.

[Kyra's Doll]

Well, that's a good segue to Jordan. You talk to retailers every day. Are they already pricing in these tariffs or what are they saying about strategy here as, as everything flip flops?

[Jordan Holman]

Yeah, a lot of the strategy is initially they are trying to negotiate with their suppliers to try to get the prices down with their suppliers before passing it on to consumers. I was talking to one investor in this space and they made it the point that the first few weeks and months when it comes to the disruption that tariffs and some other uncertainty happens, is that you're not going to touch the consumer facing thing, that you really have to just kind of wait and see. So you're trying to do things behind the scenes. But a lot of people were mentioning that they have game planned all sorts of scenarios which do include raising prices. And they like they would be ready to do that if the time comes.

[Kyra's Doll]

Well, how long do you think it'll be until we see those prices raise? And I'm wondering, Jordan, you know, because we saw more tariffs on automakers this week, we might get retaliatory tariffs expected next week. Where do you think we're going to see the most immediate or biggest price increases for consumers and when might they come?

[Jordan Holman]

I definitely feel like the auto prices would be felt quickly. That's basically everyone who I was talking to this week said that. But when it comes to like the smaller appliances, those type of things, when it's time to reorder those parts on the part of the retailers, that is actually when those decisions around passing on the cost could happen, which, you know, that could happen in a few weeks, a few months. It would really just depend on the retailer. But that's usually what they try to emphasize is the last thing that they do. But given that tariffs are the reality now, they're kind of coming around to idea that they would have to do it.

[Kyra's Doll]

You know, all of this is making consumers feel pretty terrible, which is what we data we got this week. Consumer confidence sunk to its lowest level in 12 years. We got the University of Michigan survey that echoed some of that sentiment today. You know, I've been covering consumers for a handful of years now, and we've kind of been near here before, not so long ago. Rachel, I'm wondering if this is a boy who cried wolf situation or if there's something different in the air this time.

[Rachel Siegel]

I think it's hard to know. I think this is one of the data points that fills in a broader dashboard right when we're trying to understand how people are feeling, how people are thinking about the future. But I think one telling piece of this, and we've talked about this for a while, too, is that there's a difference between how people feel, how they describe their general sentiment, and what they do about it. Do they ultimately decide to pull back on spending? Do they get so worried that there's going to be a major hit to the job market or a turn in the stock market that they change their behavior? So I think that there can be really added weight to these sentiment numbers if we start to see that behavior piece kick in, too. And there are ways in which we're starting to see that, right? Businesses that are having to make decisions about their orders, about their staffing, depending on terrorists, depending on what they're seeing in the federal government, depending on whether they're considering laying off staff themselves. So I think the sentiment piece is a helpful data point, but it's often one that becomes even more telling when the other pieces fill themselves in.

[Kyra's Doll]

Jordan, same question to you. What's your read on consumer sentiment right now?

[Jordan Holman]

Yeah, for a long time we've been talking about how lower income consumers are more stretched and having to be more discerning in what they're buying. I think I personally have been talking to people who are the higher end income and their fortunes are more tied to the stock market, which has been very volatile. And so it feels like I'm hearing from more hiring consumers saying I kind of just want to wait and see. I might not want a job. Hop. And it's kind of putting people in suspense, which to Rachel's point, behavioral changes usually happen after after that.

[Kyra's Doll]

Jordan Holman is at the New York Times, Rachel Siegel at the Washington Post, thanks so much, everybody. Have a good weekend.

[Rachel Siegel]

Same to you, Kristen.

[Jordan Holman]

You too.

[Kyra's Doll]

Wall street saw today's data and decided it did not like what it had to say. We'll have the details when we do the on to another key piece of economic data out this morning from the Commerce Department. American households income is still growing. It was up 8/10 of a percent in February, twice what analysts were expecting, which is good news. But there's a bit of a red flag buried in the report. Despite the income growth, consumer spending came in weaker than expected and the personal savings rate is up. And I say red flag because both are signs that consumers could be hunkering down and hanging onto their money marketplace's. Savannah Peters has more.

[Steven Brown]

For the last few years, consumers have been telling pollsters how fed up we are with inflation, then we keep right on buying stuff, says Steven Brown, deputy chief at Capital Economics.

[Dr. Sally Brown]

You know, the link between consumer confidence.

[Steven Brown]

And spending has broken down. But in today's data in income and spending, he sees clues about ways consumer behavior could be catching up with our anxious mood. Clues like a bump in spending on certain goods. Think vehicles, appliances and furniture, things that could be affected by tariffs. And, says Shannon Grein, an economist at Wells Fargo, there was a dip in spending on services. That's considered a weakness just because services consumption is typically very steady, even in.

[Rachel Siegel]

The worst of times.

[Steven Brown]

It's steady because services in this context include housing and health care, which don't fluctuate much. This pullback is driven in part by slower spending on discretionary services like traveling and going out to eat. It's no longer this whole YOLO revenge spending kind of thing forces that Ted Rossman, an analyst at Bankrate, says have helped buoy economic growth in recent years. Even through a pandemic, global conflicts and high inflation. It feels like something new is happening, that the story is starting to change, he says. US Consumers might finally be running out of steam, and if prices keep rising, they might not come to the rescue this time. I'm Savannah Peters for Marketplace.

[Kyra's Doll]

The World Health Organization says each person needs a minimum of 13 gallons of water a day for drinking, bathing, washing dishes and clothes. The average American uses more than 80 gallons per day and in many parts of the country that is simply unsustainable. Of course, it is not fun to give up long hot showers or lush green lawns. But there may be ways to reduce water consumption without sacrificing every delight. A coalition in Los Angeles called 50 liter home, which is made up of companies, water utilities and nonprofits. It just released the results of a year long pilot project. Marketplace's Kaylee Wells followed one of the families.

[Steven Brown]

This whole experiment started In November of 2023, bright and early on a Tuesday morning at a single family home in the LA suburb of Canoga Park. Installers are parading in and out of the house, tossing old toilets, faucets, anything that uses water and installing brand new fixtures. Standing in the middle of the chaos, politely reminding everyone to remove their shoes at the door, are Jake Olson and Amy Ball and their two year old daughter Scout, who's capturing the attention of all the grownups around her today.

[Dr. Sally Brown]

I want to eat my bakery.

[Jake Olson]

You can do that too.

[Steven Brown]

Olson applied to be part of the project after seeing an ad in the utility newsletter. His is one of 30 LA area households chosen for the project. Half stay the same, the other half get free brand new water efficient appliances, faucets, shower heads and toilets, plus detergents and cleaning supplies optimized for low water use. Olson's hoping he also gets a lower water bill.

[Jake Olson]

I was in an apartment for 17 years and didn't have a water bill. They paid water and then we got this house and we were watering grass and water bills would come and I was like how is this reality? How what is this life? I do not want this.

[Steven Brown]

We're three people.

[Jordan Holman]

How are we using this much water?

[Steven Brown]

Yeah, what the 50 liter home coalition gets in exchange? Full access to their water usage data. Project manager Maureen Urbesnik is with the United States Green Building Council, California.

[Kyra's Doll]

We're doing behavioral analysis, we're doing, we're looking at every end use. We're you know, we're in their homes kind of on a regular basis now.

[Steven Brown]

Since this project is all about seeing how little water a typical family can use while behaving. Typically, Ball and Olson are under strict orders not to try harder to save water. They were already trying pretty hard. They replaced their lawn with drought tolerant plants. They try to only run the dishwasher when it's full. Then again, I tend to luxuriate in the shower.

[Jordan Holman]

I'm not sure you do like showers.

[Dr. Sally Brown]

I like to turn up the heat.

[Steven Brown]

Really hot and just be in there.

[Kristen Schwab]

Yeah, it's nice.

[Jake Olson]

That's, that's some of our only alone time right now.

[Dr. Sally Brown]

The shower is all I have.

[Steven Brown]

Although fact check here, luxuriating for Amy ball takes roughly 10 minutes. Jump forward a few months. Countless toilet flushes and luxurious showers. Jake Olson hopped on a call to go over some preliminary results. And even though they'd already been conscientious water users, they were using 20% less.

[Jake Olson]

Knowing that even from this install to now, we're trending, you know, significantly downward is really exciting, honestly. Like, it's, it's great to know that we're, we're pretty much getting to the point where we're going to be as efficient as possible.

[Steven Brown]

By the end, the homes in the study used half as much water as the average home in Los Angeles. Olson did notice some differences in the appliances, but he says none of them were bad.

[Jake Olson]

The shower head itself is actually 2 inches larger than the one that we had before. Honestly, that's one of my favorite things that got swapped out. Like the water pressure is the same, if not better.

[Steven Brown]

The families in the study did not hit that 50 liter or 13 gallon mark. After a year, they were using about 23 gallons per person. Gregory Holliday is the director of the 50 Liter Home Coalition.

[Maureen Urbesnik]

Our name is definitely aspirational. There's a lot more savings to be had. We are just getting started. Honestly, we didn't tell anybody about how to use these products. We didn't encourage them to try to save water.

[Steven Brown]

Holiday says this study isn't over yet. In phase two, it will introduce recycling water to get that usage number down even more. In Los Angeles, I'm Kaylee Wells for Marketplace.

[Maureen Urbesnik]

Coming up, it's kind of like a vitamin we put back in the ground. That's alive.

[Kyra's Doll]

From trash to treasure. But first, let's do the numbers. The Dow Jones industrial average dropped 715 points, 1 and 7 10% to end at 41,583. The NASDAQ shed 481 points 2 and 7, 10% to finish at 17,322. And the S&P 500 was off 112 points 2% to land at 55.80. For the week, the Dow lost 1%. The NASDAQ subtracted 2 and 16. 10%. The S&P 500 slipped 1 1/2%. Lululemon tumbled more than 14%. The athletic gear retailer issued disappointing guidance for the rest of this year. It says consumers are pulling back on spending because they're worried about inflation and a weakening economy. Bonds rose. The Yield on the 10 year T note fell to 4.25%. You're listening to Marketplace.

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[Dr. Sally Brown]

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[Kyra's Doll]

CD this is Marketplace. I'm Kristen Schwab. Jordan Holman was telling us earlier about how big businesses are dealing with tariffs and weakening consumer sentiment. But small businesses often have a more intimate and immediate understanding of their local economies. So we gave Annie Lang Hartman a call. She's the owner of Wild Leddy, a gift and stationery store in Leelanau County, Michigan, and one of our retail regulars. Here's her update.

[Kristen Schwab]

Business is actually very good right now. Year to date, we're up 49%. And I think a lot of that has to do with how vocal I have been as far as what this business stands for and who I am as a person foreign. So when the park layoffs and like the public land layoffs started happening, I sat down with a design that I made years ago. And it's just a little saying that says big fan of public lands. And just out of frustration, I sat down and redrew it and just shared it on social media. It had such a great reaction that a lot of our followers and customers asked for that design to be put on different products. That definitely gave a big boost to our business and it just showed me how important it was to keep talking about those things. And that's something I want to carry through. My biggest concern is just hoping that the year continues to trend the way it's been trending for us. Living in a place that is really heavy with tourism, I know I'm going to get foot traffic, but it's how much foot traffic are we going to get, Especially when I'm ordering for the year, for the summer. Like I always go back and forth on how much we need. Should I be ordering this? That's what I'm thinking about constantly right now. I need to be making smart choices every day so that we can deal with leaner times and keep moving forward.

[Kyra's Doll]

Annie Lang Hartman is the owner of Wild Leady in Leelanau County, Michigan.

[Jordan Holman]

Foreign.

[Kyra's Doll]

Do you know the contents of your trash can I ask? Because here's a factoid I didn't know. About half of what we put into landfills is organic matter, as in stuff that can be composted. That's a lot of material we could save from turning into methane emissions because landfills account for nearly 15% of greenhouse gas in the US according to the EPA. Thing is, we don't have great systems that connect waste producers with compost users. Marketplace's Maria Hollenhorst reports on one company that's trying to close that gap.

[Bill Camerillo]

This is a story about dirt.

[Jordan Holman]

Compost is a way to effectively feed.

[Steven Brown]

Your soil, and soil gets hungry, too.

[Bill Camerillo]

Dr. Sally Brown is a research professor and soil scientist at the University of Washington.

[Jordan Holman]

When I go someplace where there's no.

[Steven Brown]

Composting, I get very upset.

[Jordan Holman]

So I'll surreptitiously put it outside.

[Bill Camerillo]

We all have hills we'll die on. She does that because organic material exposed to oxygen, you know, decomposing in a compost pile or surreptitiously tossed behind a bush creates CO2. But organic material rotting in landfills without oxygen creates methane.

[Jordan Holman]

Methane is a very powerful greenhouse gas, having on a hundred year time frame about 23 times the potency of CO2. So getting stuff that rots out of landfills is a very cheap way to.

[Bill Camerillo]

Quickly reduce carbon emissions, at least in theory. Most of us don't live near farms that can readily use the lawn trimmings or avocado skins produced in our homes. And that's where companies like Agriman come in. Agriman is one of the largest organics recyclers in California.

[Maureen Urbesnik]

I'm driving you into the receiving yard, which is about 5 acres.

[Bill Camerillo]

Bill Camerillo is the founder and CEO. He says they handle about 1.2 million tons of organic waste per year.

[Maureen Urbesnik]

My goal in the next 10 years is to get to 10 million tons.

[Bill Camerillo]

He brought me to a yard in Santa Paula, California, about an hour from Los Angeles. Here, trucks carrying green waste from households and businesses dump their hauls.

[Maureen Urbesnik]

But as you can see, this material hasn't been cleaned yet.

[Bill Camerillo]

About a half dozen employees were pulling plastic bags and other garbage out by hand. Once that's done, the waste gets pushed into a grinder to create more surface area for the oxygen to work its magic.

[Maureen Urbesnik]

We always show the grinders to our customers who don't Pay us.

[Bill Camerillo]

Joke. He's joking. Roughly 80% of AgriMan's revenue comes from something called tipping fees. Cities pay the company around $60 per ton to accept the waste their trucks collect. The other 20% of AgriMan's revenue comes from turning that waste into mulch or soil additives that farmers, landscapers, and gardeners can buy.

[Maureen Urbesnik]

And it's kind of like a vitamin we put back in the ground. That's alive.

[Bill Camerillo]

The material here is mostly yard and farm waste. There were piles of rotting lemons discarded from a nearby grove. And the whole place has a sour kind of smell. Flocks of birds were picking at the piles. After cleaning and grubbing, grinding that raw waste down, it gets moved to another yard for finishing.

[Maureen Urbesnik]

And you'll notice a distinct difference in odor. Not that this is bad. Smells like money to me. But if you go to the other side, it smells very earthy.

[Bill Camerillo]

Decomposition naturally raises the temperature enough to kill pathogens.

[Maureen Urbesnik]

Dig in a little bit, and you could warm your burrito up inside if you want to, because it's pretty hot.

[Bill Camerillo]

It was. One factor driving this industry forward is a California law requiring cities to divert more organics from landfills and purchase a certain amount of the finished compost. It's meant to pull on both the supply and demand side of the compost market.

[Maureen Urbesnik]

So I'll just take a city of Aventura as an example. So they called me three years ago and said, what am I supposed to do with 8,000 tons of compost? So we did some homework for them and said, well, do you realize you have 700 acres of parklands? It'll reduce your water consumption by 30%. It'll reduce your chemical fertilization on your parks. Why can't you use it? Well, the issue now is, even if they can buy the compost, the application cost is greater than the compost.

[Bill Camerillo]

Dirt is expensive to haul around. So for cities that can't afford to use all the compost that they're required to purchase, by law, we partner with.

[Maureen Urbesnik]

A farmer under a direct service provider agreement, where the farmer agrees to accept the compost from the city that the city buys and will pay for the delivery and the spreading. So the city only has to buy the compost.

[Bill Camerillo]

One thing that helps reduce that cost is putting compost facilities closer to compost users. This one is actually on farmland owned by a company called Limonera. Remember those rotting lemons we saw earlier? Well, Limonera is one of the largest producers of lemons and avocados in the U.S. yeah.

[Jordan Holman]

We farm around 3,000 acres here.

[Bill Camerillo]

Edgar Gutierrez is Limonera's director of farming operations. He took me to a field of avocado plants that were sitting on mounds of mulchy compost from Agriman.

[Steven Brown]

Doing this type of practices is basically.

[Kyra's Doll]

Giving life to that soil.

[Bill Camerillo]

There are visible reminders here that it once came from someone's green bin, a piece of blue plastic, a chunk of wooden shipping pallet.

[Kyra's Doll]

You find, you know, shoes and stuff like that.

[Bill Camerillo]

Mostly, though, it just looks like dirt, dirt that helps produce avocados, the skins of which we mostly throw away. I'm Maria Hollenhorst for Marketplace.

[Kyra's Doll]

This final note on the way out today saw this in Newsweek. Travelers are feeling the tensions of the trade war. According to the aviation analytics company OAG, forward bookings from Canada to the US have fallen more than 70% every month through the end of September, compared to the same period last year. Canadians are a big part of our tourism industry. They made more than 20 million trips here last year. In response, a White House spokesperson told a Wall Street Journal reporter, quote, canadians will no longer have to worry about the inconveniences of international travel when they become American citizens as residents of our cherished 51st state. Our theme music was composed by BJ Lederman. Marketplace's executive producer is Nancy Fargoli, Donna Tam is the executive editor, Neil Scarborough is the vice president and general manager, and I'm Kristen Schwab. Have a great weekend. We'll be back here on Monday. This is apm.

[Jordan Holman]

If there's one thing we know about social media, it's that misinformation is everywhere, especially when it comes to personal finance. Financially Inclined from Marketplace is a podcast you can trust to help you get serious about your money so you can build a life you've always dreamed of. I'm the host, Janeli Espinal, and each week I ask experts important money questions, like how to negotiate job offers, how to choose a college that you can afford, and how to talk about money with friends and family. Listen to Financially Inclined Wherever you get your podcasts.