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- [00:00]
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 this Marketplace podcast is supported by Remarkable Are you still taking notes on paper? Change the way you work with Remarkable Paper Pro, a premium digital notebook with the feel of paper for taking notes, reviewing documents and getting organized. Get the digital tools you need for your workday without any distractions and stay focused With a unique color display that reflects natural light. It's portable, practical and professional. Get yours today@remarkable.com.
- [01:05]
Kristen Schwab
Expectations of the economy. They matter because they aren't just shaped by our past, they actively shape our future. From American public Media, this is Marketplace in New York. I'm Kristen Schwab in for Kyra's doll. It's Monday, December 9th. Thanks for being here. We are entering what some people at the Bureau of Labor Statistics call inflation week, though I'd kind of call every week since like mid-2021 inflation week. But maybe that's just me. Anyway, the reason why it's called inflation week is because of the amount of inflation related data that's coming out in the next few days. On Wednesday we'll get the latest consumer price index. Then on Thursday comes the Producer price index, both readings on where inflation has been. Today's reading, though, it is on where people think inflation is going. The New York Fed survey of consumer expectations says Americans think in a year inflation will be around 3%, and in three years it'll be around 2.6%. Both of those numbers are above the Fed's target of 2%, but there might be a silver lining.
- [02:20]
Stephanie Hughes
Marketplace's Stephanie Hughes reports consumers inflation expectations today look very similar to the way they looked before the pandemic.
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Kristen Schwab
To me, this just seems like it's all a return to normality.
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Stephanie Hughes
Alan Dettmeister is an economist for ubs. He says consumers tend to overestimate where inflation will be. They remember more when prices go up than when they go down. That's why they might be predicting that a year out inflation will hit 3%, even though today it's around 2.6%. But he says if you look at their inflation expectations three years from now, consumers are expecting it to slow down.
- [02:55]
Kristen Schwab
And people are realizing we're now starting to get wage growth that's growing faster than inflation, and things are starting to turn around.
- [03:04]
Stephanie Hughes
Consumers are also more optimistic about the future of the stock market, availability of credit, what they'll earn. Joe Guillaume, a senior fellow at the Peterson Institute, says this is people feeling good about a good economy, which means they don't think as much about the old economy.
- [03:20]
Justin Vineyards
The longer the economy stays good over time, people will gradually forget that eggs used to cost, you know, much less.
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Stephanie Hughes
Guillot points out Americans under the age of 50 haven't really lived through an inflationary period like this before, so they're kind of learning what to expect.
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Justin Vineyards
We do know that after the inflationary 70s, consumers came to accept the new price level and just moved on.
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Stephanie Hughes
It's almost like consumers have to move to the next stage of grief over the loss of those old prices, past denial, anger, all the rest, and eventually landed acceptance. I'm Stephanie Hughes for Marketplace Wall Street.
- [03:55]
Kristen Schwab
Today matched the gloominess of the weather here in New York. We'll have the details when we do the number. Inflation is a tricky thing. On a week like this one, it can feel like we're squinting at every data point to tell us something about where it's headed. And inflation expectations, as Stephanie Hughes was just talking about, they're tricky, too. Our feelings about prices are shaped by a trip to the gas station, a walk down the grocery aisle, and they're also shaped by who is in the Oval Office or who's about to enter it. All this got me thinking about a conversation I had a little while ago with Carola Binder, an economist at the University of Texas at Austin. She just finished a book called Shock Values, Prices and Inflation in American Democracy, and we talked about the way politics and inflation interact. So with this being a big week for inflation and with big changes coming to economic policy, we decided to give her a call and get a more grounding sense of what's going on. Carola, thanks for coming back on the show.
- [05:16]
Carola Binder
Of course. Thanks for having me.
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Kristen Schwab
So I think the last time we talked was in May, and a lot was going on back then. The election was still a few months away. CPI was above 3%. Now it's hovering somewhere around 2, a little above 2. What is your read on where inflation is right now and where it might be headed?
- [05:37]
Carola Binder
Well, I think we've made a lot of progress on inflation or I should say the Fed has made a lot of progress on inflation, but I don't think we're all the way there yet. The most recent PCE inflation report still showed PCE inflation above the Fed's target and higher than it had been the previous month. It's better than it was a year or two ago, but there's still a little ways to go.
- [06:02]
Kristen Schwab
How do you think the Fed feels? Do you think it expected to be where we are now?
- [06:07]
Carola Binder
I think the Fed probably feels pretty good, and I think they probably deserve to feel that way. Inflation has come down with a lot less pain than, frankly, I would have expected. The economy is pretty strong, and we're not back at the inflation target, but it seems like it's within sight. At the same time, they, of course, might be a little nervous about just how this last mile will go, and especially with all the attention that's on them and that's on inflation right now. Like any little blip upwards could cause people to get worried about another inflation surge. So I'm sure that's something that's weighing on policymakers all the time.
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Kristen Schwab
Yeah. Well, I want to talk a little bit about also how the Fed feels now about what's to come. Powell has said over and over that the Fed is independent from politics, but I guess I'm wondering how much he's thinking about whatever fiscal policy is coming up under the new Trump administration, and if there's some way he's actually preparing for that with monetary policy now.
- [07:14]
Carola Binder
Yeah. So the Fed being independent from politics certainly doesn't mean that they don't or shouldn't take fiscal policy into account. Things like tariffs, things like regulatory changes, immigration changes, all of those things, to the extent that they affect price stability, are something that the Fed has to incorporate into their policymaking. I'm not sure that we yet have a clear sense of what fiscal policy is going to be like under the new administration. But I think as that becomes more clear, that's when the Fed will have to start incorporating that into their forecasts so that the staff, the economists at the Fed who are making forecasts of future inflation and future unemployment, they are the ones who are taking fiscal policy into account, and then the policymakers respond to those forecasts.
- [08:04]
Kristen Schwab
Well, how might. If Trump does go in on day one or two or three or sometime in the near future and put in place those tariffs he's talking about, how might that affect inflation and give us a sense of how much it might affect it?
- [08:23]
Carola Binder
I mean, that's a really difficult question. Tariffs affect the prices of some goods a lot more than others, depending on how much those goods are being imported or they are made up of things that are imported. But the Fed doesn't respond to relative price changes or to the price of a particular good rising. They respond to aggregate price changes. If tariffs were to have a one time effect on the price level, that would be like we'd have one kind of short burst of inflation, but then, but then it would level off. That wouldn't be something that the Fed would necessarily want to respond to. But if somehow they were to lead to persistently higher inflation, the Fed would want to respond to that. And you know, I guess personally I'm a little reluctant to try to forecast what the effects would actually be.
- [09:12]
Kristen Schwab
Last question, we get November's Consumer Price Index on Wednesday. What are you looking for in that reading?
- [09:20]
Carola Binder
Yeah, for the November report, I'm mainly going to be looking at core cpi, looking at where the core has moved. So as opposed to looking at headline, which includes the more volatile food and energy prices, core gives you a good sense of the underlying trends and where inflation could be heading. So mainly just seeing it steady and seeing no major upward surprises is what I'm hoping for.
- [09:48]
Kristen Schwab
Carola Binder is an economist at the University of Texas at Austin. Carola, thanks again for catching up.
- [09:53]
Carola Binder
Thanks for having me.
- [10:12]
Kristen Schwab
Today has been a big, buzzing day in the world of advertising. Omnicom announced it would be acquiring its rival Interpublic Group. The merger will create the largest ad firm in the world. It comes at a time when marketing is making a huge shift. In its press release, Omnicom says that through the merger it will be well positioned to grow under the quote, new era of marketing. What does that mean exactly? Marketplace's Elizabeth Troval takes a closer look.
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Elizabeth Troval
After 25 years in advertising, Northeastern University professor Kuhn Powles says the constant change keeps him young.
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Kristen Schwab
Every year we have new technology, we have new platforms that consumers engage with.
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Elizabeth Troval
New platforms that connect people and products, says analyst Jeremy Goldman with eMarketer.
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Justin Vineyards
You see the search industry, let's just say it's not quite moving away from Google, but the way in which people discover products has changed in a number of different ways, including social search, AI based search.
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Elizabeth Troval
So staying ahead of the curve is vital and that can be an advantage of being a mega firm like Omnicom, says John Sharpton with Mintel Consulting.
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Kristen Schwab
Often those companies have an opportunity to sort of adopt and trial new technology that maybe smaller firms don't have the ability to.
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Elizabeth Troval
Whether people work at large or small agencies. Van Graves, who leads Virginia Commonwealth University's advertising program, says it's important this labor force keeps learning.
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Justin Vineyards
You can't as an individual stagnate. And so whether it's upskilling or reskilling.
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Kristen Schwab
In times of change like this, you have to work on you.
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Elizabeth Troval
But he says things like AI and social media are just tools. There's nothing quite like that creative spark that happens human to human. I'm Elizabeth Troval for Marketplace.
- [12:12]
Kristen Schwab
If you want to learn more about what's driving the economy, check out our Econ101 course. It walks you through all the fundamentals in a way that's digestible and, dare I say, fun. Learn more and sign up@marketplace.org Econ coming.
- [12:41]
Craig Robertson
Up, this symbol of efficiency became a symbol of inefficiency.
- [12:47]
Kristen Schwab
It's funny how that happens, isn't it? But first, do the numbers. The Dow Jones industrial average sank 240 points to finish at 44,401. The Nasdaq dropped 123 points to close at 19,736. And the S&P 500 lost 37 points, also 6.10percent to end at 6052. We heard from Elizabeth Troval about a probable merger between ad companies Omnicom and Interpublic group. Omnicom slumped 10 and a quarter percent. Inter Public ascended 3.5%. Bloomberg News reports that snack giant Mondelez is considering an acquisition of Hershey's. Shares of Hershey's sweetened ten and eight tenths percent. Mondelez soured two and a quarter percent. Bonds fell. The yield on the ten year t note rose to 4.19%. You're listening to Marketplace. This is Marketplace. I'm Kristin Schwab. The fate of TikTok is becoming more uncertain. Today. The app's owner, ByteDance, asked a federal court to pause a law that would ban the app in the U.S. that's after a court on Friday upheld an earlier ruling that will shut down the app by January 19th. Regardless of what happens to TikTok, though, social media and the creators on it, they are here to stay. Thing is, the economy of content creation, it's relatively new. There are very few rules about how creators work and how much their content is protected. Those are the ideas at the heart of a recent lawsuit between Sydney Nicole Gifford and Alyssa Schiel. They're popular content creators who promote something called the Clean Girl aesthetic. Think freshly manicured nails and homes full of beige. Mia Sato at the Verge wrote about the lawsuit. Mia, thanks for coming on the show.
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Mia Sato
Thank you so much for inviting me.
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Kristen Schwab
So tell me, who is suing who in this copyright infringement case and what's going on? What's the evidence there?
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Mia Sato
So in this case, Sidney Nicole Gifford is suing Alyssa Shield, her competitor. So part of the documents that Sydney filed to the court include something like 70 pages of side by side screenshots of like, here's my video and here's Alyssa's video. Here is my post on Amazon and here's Alyssa's post. Here's my photo on Instagram, and here's Alyssa's photo. And it's meant to sort of show the similarities between the two women's content. But also Sydney says that Alyssa's posts were always coming after hers. So a few days or a few weeks or a few months after, and this happened allegedly for months over and over and over. And Sydney's suit says that she actually experienced a loss in sales, a loss in earnings and commissions because Alyssa was making content that was very similar to hers.
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Kristen Schwab
Yeah, I guess the counterargument here though is, you know, this is how social media works. It's about trends. Once you see one thing on your Instagram or TikTok, you see it over and over. Tell me about how the algorithm complicates this story in this case.
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Mia Sato
So in the piece I write about, like several different algorithms that I think are at play, at least partially. 11 is obviously the Amazon recommendation algorithm. If you browse on Amazon for beige things, the platform will show you more beige things.
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Kristen Schwab
Right.
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Mia Sato
It thinks that you like that. And so there's that shopping element. There's also the social media recommendation system where if you again watch videos from Amazon influencers that say, here are my five favorite fall sweaters, the algorithm will show you more content like that. That is sort of the essence of how platforms like TikTok or Instagram or Facebook work right now. I also want to point out that Amazon has a guiding hand in all of this. Amazon actually suggests to influencers products that they could feature in their videos. So Amazon certainly is not just like a hands off entity on the sideline. They tell influencers what's trending. So the algorithms, you know, they're working from various angles and all sort of guiding creators towards the type of content that they end up making.
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Kristen Schwab
Right. Well, this case is really about protecting influencers work. So how could a ruling change what they do, how they create content and what we actually see when we open up our phones?
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Mia Sato
So Sydney's lawsuit includes several really interesting and novel claims. For the purposes of this piece, I wanted to drill in on Sydney's claim that Alyssa infringed on her copyright. But in this case, Alyssa never reposted Sydney's content. She just posted images that looked similar. And Sydney's argument is that this is infringing on my copyright. Now, if Sydney is successful in this, it's likely or very possible that there would be a wave of other lawsuits like this where influencers are going after someone else. But I think the takeaway of the story is really that this suit sort of gets at a complaint that a lot of content creators have. It's not rare where content creators sort of, you know, have disputes going back and forth, saying you copied my style or you copied my content or you are mimicking what I'm doing. But there's not really much of a legal avenue. And I think this lawsuit is maybe Sydney's effort to try to find a way to solve this problem. However, it could significantly expand copyright law.
- [18:44]
Kristen Schwab
Really interesting story about content creators and that content and what we see on our own social media channels in the Verge by Mia Sato, a reporter there. Mia, thanks so much for sharing your story.
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Mia Sato
Thank you so much for having me.
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Kristen Schwab
1 * on the journey towards a greener future is that as we shift away from fossil fuels, we are using more electricity more than we thought we would. A new report out from the power consulting firm Grid Strategies says over the next five years, energy demand in the US Will increase five times faster than we thought it would just two years ago. That adoption rate might sound alarming, but as Marketplace's Kaylee Wells explains, we've handled way bigger surges before.
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Kaylee Wells
We already knew about EV adoption, heat pump installations, and more domestic chip manufacturing. But then there's the big energy drain we didn't plan for.
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Justin Vineyards
The potential application of AI has grown.
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Craig Robertson
So much that that demand was not.
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Kristen Schwab
Really expected at all two years ago.
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Kaylee Wells
Rob Gramlick is president of the power consulting firm Grid Strategies, which predicts that demand growth in the next five years will be five times higher than we expected. Demand growth was more than twice this much in the 60s and nearly three times as high in the 50s, which.
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Craig Robertson
Indicates we should be able to handle it again.
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Kaylee Wells
That was back when homes were installing air conditioning and electric stoves for the first time. Problem is, higher demand could mean higher reliance on fossil fuels, but it doesn't have to. Michelle Solomon is policy analyst at the think tank Energy Innovation.
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Carola Binder
Utilities aren't proposing to build these new gas plants because they're the only solution.
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Kristen Schwab
That they can build, it's just because.
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Carola Binder
It'S what they're used to.
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Kaylee Wells
She says it is still possible to meet demand and meet the US's clean energy goals.
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Carola Binder
There's not necessarily a reason why adding something like a gas plant is going to be faster than clean energy, for.
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Kaylee Wells
Instance, because gas plants still need to jump through the same siting and supply chain and connection hoops as clean energy plants. Santiago Grijalba isn't worried about generating new electricity as much as getting that power where it needs to go. He teaches electrical and computer engineering at Georgia Tech.
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Justin Vineyards
It is very difficult to build neutral emission lines. It can take more than a decade to get all the permits and all the rights of ways and all the planning, et cetera, to build a new line.
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Kaylee Wells
And there's a lot of work left to be done. The Department of Energy says the US will need to more than double its transmission capacity by 2050. I'm Kaylee Wells. For Marketplace.
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Kristen Schwab
Offices, they look and feel a little different these days. I don't come to the office five days a week anymore, though, for the record, I am here right now. I don't think I've used my work landline and I don't know how long, and I don't print stuff nearly as often. Which is all to say, some of the tools we've traditionally used at work, they're just not as relevant anymore. Take the humble filing cabinet and this story on its history.
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Craig Robertson
I'm Craig Robertson. I'm a professor at Northeastern University and the author of the Filing A Vertical History of Information. Oddly, when I came to write and research, the filing cabinet was around the time I got rid of all the filing cabinets in my life. It wasn't so much a reaction to studying it, it was just the way that technology was developing. I was actually doing another research project and I found myself at National Archives looking through reels and reels of microfilm. It was a long, arduous struggle until I hit 1906. Suddenly, my research could be done so much faster. And I was like, wow, this is crazy. Like, what's happened here? The State Department had adopted a numerical filing system. Previous to this, in businesses and government departments, you would bind all your correspondence into a book, right? So what the filing cabinet allowed you to do was to store loose paper. It was promoted as giving your office an automatic memory. People were surprisingly excited by it. Like, I mean, it was seen as this, like, radical change. The filing cabinet emerged in the 1890s, and so women come into the Office, not solely because of the filing cabinet, but because office work becomes this set of specialized tasks. And women are the people brought in to operate the machines because of this idea that women have smaller and more nimble fingers than men. You know, this is. There's no truth to this, right? But their future employers would ask them, you know, do you crochet, do you knit, do you play the piano? Right? All these things that could, you know, ensure that you have these nimble fingers that will allow you to quickly retrieve a file from a file jaw. By the 1970s and 1980s, this symbol of efficiency became a symbol of inefficiency. The concept of information overload starts to take off. And information overload is usually represented by piles of paper stacked on top of filing cabinets on the floor in front of filing cabinets, right? So there's just too much paper. And the filing cabinet comes to represent that inefficiency because, you know, it's the place where paper is stored. Information has a history, and the filing cabinet plays an important role in that history, right, because it allows people to understand information as this discrete unit that exists in the world that can be at your fingertips. And so that obviously still lingers on today, even if people don't quite understand the history of the file or appreciate how the tab is linked to a file that was linked to a filing cabinet. We just leave our browser tabs open. But it's that idea of a tab that marks information that's one of the important legacies of the filing cabinet. So although I don't own a filing cabinet, I do believe that as an invention, we should definitely appreciate the filing cabinet a lot more than we do.
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Kristen Schwab
Craig Robertson is a media historian at Northeastern University. And because there really is an expert for everything, he's an expert on filing cabinets. This final note on the way out today, we started with how consumers are feeling, and we'll end with how consumers are feeling. Fannie Mae released its latest home Purchasing Sentiment index today. The takeaway is consumers are slowly becoming more confident about the housing market. 45% of respondents expect mortgage rates to fall in the next year. The percent who expect home prices to go up fell a bit, to 38%. And the percent of people who think it's a bad time to buy sits at 77% ish. But that's a few percentage points lower than last month's reading. And like I said earlier, expectations matter. Our daily production team includes Andy Corbin, Nicholas Guyong, Maria Hollenhorst, Sarah Leeson, Sean McHenry, and Sophia Terenzio. I'm Kristen Schwab. We'll be back tomorrow. This is apm.
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WIX
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