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- [00:00]
Kai Rysdal
Invest Puerto Rico supports this Marketplace podcast. What's next in innovation? That's not the right question. It's where Puerto Rico. More than just a tropical paradise, it's innovations paradise, where startups and global players coexist in a vast and vibrant ecosystem where talent runs deep, highly skilled and bilingual. Plus, the island offers the most competitive tax incentives in the US if you believe your business can go anywhere, Puerto Rico is the place. Find out more@investpr.org podcast someday we are.
- [00:35]
Kyle Rysdal
Not Going to have to Cover inflation all the time. Today, however, is not that day. From American Public Media, this is Marketplace in Los Angeles. I'm Kyle Rizal. It is Wednesday today. This one is the 15th of January. Good as always to have you along, everybody. The economic data o the day, as you might have guessed, is of the inflation variety. And we had today what Wall street types call a downside surprise. That is, the core consumer price index came in just a hair lower than expected. Remember, core strips out food and energy, which thus makes it a better gauge of where overall prices are going, correct? Core was up 3.2% year on year. Among the biggest drivers of that core number and a key reason that inflation is proving so sticky, shelter rent and owner's equivalent rent. That's economist talk for the math they do to make mortgages match rent levels in their formula. Combined, they were 4.6% higher in December than they were a year ago. Marketplace's Samantha Fields gets us going.
- [01:51]
Samantha Fields
Housing is most people's biggest expense by far. Steve Reed, a senior economist at the Bureau of Labor Statistics, says that's why it weighs so heavily in the Consumer price index.
- [02:02]
Steve Reed
Over 36% of the whole CPI is sheltered.
- [02:06]
Samantha Fields
As long as housing costs remain high, inflation can only go so low.
- [02:11]
Steve Reed
Purely mathematically. It's hard to get a low headline number without shelter numbers coming down.
- [02:16]
Samantha Fields
Shelter numbers have actually come down a fair amount since March of 2023. That's when housing inflation peaked at 8.2. Now it's 4.6%. Susan Wachter at the University of Pennsylvania's Wharton School calls that good news.
- [02:31]
Steve Reed
Shelter inflation has come down, and it is coming down, and it will come down.
- [02:35]
Samantha Fields
But it's still got a ways to go if overall inflation is going to reach the Fed's 2% target. And Wachter says that could take a while because so many homeowners have low mortgage rates, they are loath to give up.
- [02:47]
Steve Reed
Demand is strong because the economy is strong, but supply is still limited. And so prices are increasing, but not.
- [02:57]
Samantha Fields
Nearly as quickly as they once were. That's partly because affordability, if you want to buy, has gotten so bad that fewer people are looking and getting into bidding wars. And two, we're building a lot of.
- [03:08]
Steve Reed
Apartments and those are coming online.
- [03:11]
Samantha Fields
Logan Motashami, lead analyst at Housing Wire, says all that new supply is helping drive rents down, at least in some markets like Austin. In others like New York, inventory is still very tight. And then you have Los Angeles, where thousands of people have lost their homes in the last week and they're now looking for temporary places to live.
- [03:32]
Steve Reed
I've talked to some of my real estate agent friends and one said that there was 167 people applying for one rental. And that's inflationary. Natural disasters are inflationary in the local markets.
- [03:45]
Samantha Fields
But as huge as these losses are in Los Angeles, he says they're unlikely to raise shelter costs or inflation at the national level. I'm Samantha Fields for Marketplace.
- [03:56]
Kyle Rysdal
Inflation data, of course, comes with much detail. Shelter we just talked about also a good amount of retail goods, which prompted us to get some of our retail regulars on the phone. First up, sweets is the category. Prices were up 7. 10% month on month, 3.1% for the year. Kristen Thullheimer Bingham is our chocolatier. She's the co owner of Dean's Suites in Portland, Maine.
- [04:20]
Kristen Thullheimer Bingham
November and December were record months for us. Our corporate orders were up over last year and our website orders increased, too. For our walk in traffic in both of our stores, we had a nice leap of about 25%. We were stretched pretty thin. We had some late nights and some stressful days. We probably could have used one more person. Actually, no, we definitely could have used one more person and it would have made the days a little easier. But we got by, we did it and all turned out well. So over the next few weeks, we'll work at a slightly less frenzied pace. We'll build up our inventory again, especially working on the ganache for truffles and making and dipping more caramels and all sorts of other things, especially things in the shape of hearts because, yes, we'll be getting right back into it and getting ready for Valentine's Day.
- [05:27]
Kyle Rysdal
No rest for the weary, huh? Kristin Tallheimer Bingham at Dean Suites in Portland, Maine. Two more retail reports coming up later on in the program. Wall street did enjoy that downside surprise on inflation today. Softer inflation means maybe, just maybe, Powell and the gang are going to look more kindly on more interest rate cuts. Honestly, your guess as good as mine. Anyway, traders were looking to buy Today we will have the details. When we do, the number bigger, it turns out, might really be better, especially if you're running a Wall street bank. JP Morgan Chase, Wells Fargo and Goldman Sachs posted fourth quarter earnings today, most of them exceeding investors already rosy expectations. JPM, you know what that is, right? And WFC, that's Wells Fargo and Co. For the unfamiliar, each saw net income up 50% 5 0%. Now, this isn't to say as go the big banks, so goes the economy, but there's definitely a correlation. Marketplace's Kelley Wells has it.
- [06:49]
Kayleigh Wells
A lot of factors came together in the fourth quarter that spelled good news for big banks.
- [06:54]
Kristen Thullheimer Bingham
One, there was a lot of market volatility. And banks traditionally do very well when markets are volatile.
- [07:02]
Kayleigh Wells
Managing partner Karen Petru at Federal Financial analytics says volatile markets make people trade and seek advice and look for other services. A lot of that volatility was based on election uncertainty, but Petru doesn't expect that to end.
- [07:16]
Kristen Thullheimer Bingham
Some of what the president elect says may be just bluster, but bluster from the Oval Office really moves markets, and I think you will see a good deal of volatility.
- [07:27]
Kayleigh Wells
Also, the Fed has been cutting interest rates. Kent Belasco directs the commercial banking program at Marquette University. And he says that made companies that use these big banks more optimistic.
- [07:39]
Kyle Rysdal
If they were looking to grow or expand or whatever. They start looking at this as an opportune time to maybe borrow from a bank to do that.
- [07:47]
Kayleigh Wells
On top of that, Belasco says big banks also saw more deposits. After the Silicon Valley bank collapse in.
- [07:53]
Kyle Rysdal
2023, people started moving their deposits out of regional banks and into the bigger banks, mainly because of the size. And I think they felt more comfortable with that.
- [08:05]
Kayleigh Wells
Sam Stovall, chief investment strategist at CFRA Research, says the positive effects of that extend well past the banks.
- [08:12]
Steve Reed
The financial sector is, in a sense, the lifeblood of the economy. Good news for banks is good news.
- [08:19]
Kayleigh Wells
For the overall economy because that means the companies borrowing from those banks have more money to invest.
- [08:26]
Steve Reed
If there's an increase in demand for loans, then there's the expectation for economic growth, for improved output, et cetera.
- [08:34]
Kayleigh Wells
And Stovall says all that growth and increased output also spells good news for employment, too. I'm Kayleigh Wells for MarketPL.
- [09:06]
Kyle Rysdal
The jobs report that came out last week had the overall unemployment rate at the end of last year at 4.1%. There are, of course, a couple of ways you can slice and dice that data. Workers who are discouraged or marginally attached people aren't working as many hours as they want to. You can also measure what's known as employment intensity how many hours workers are putting in every week. Last month it was 34.3 hours. That's down nearly 45 minutes from its peak in 2021. Daniel Ackerman explains why that's so Last.
- [09:39]
Daniel Ackerman
Year, Colin Bergman chose to cut back on how much he worked as a water resources designer in western Massachusetts. He went from 40 hours a week to 24 to travel and kind of do some different things for a year. Instead of business as usual working behind my computer screen, Bergman started making more art. He sold his colorful custom maps at local craft markets. Plus, he took a few long canoe trips down the Connecticut river, and then I did another down the Erie Canal for a few days. Sounds like a dream. A dream made possible because his company allowed him to cut back when he asked to go part time. Celeste Carruthers is an economics professor at the University of Tennessee. She says firms these days are not as desperate for workers as they were back in 2021.
- [10:23]
Steve Reed
We were in the beginnings of a really exceptionally tight labor market. There was talk of a labor shortage.
- [10:30]
Daniel Ackerman
At the time, so companies asked the employees they had to put in longer hours, 35 a week on average. That number had been the highest average.
- [10:40]
Steve Reed
Weekly hours worked that we had seen on record.
- [10:43]
Daniel Ackerman
Now, with a cooling job market, firms finally have enough workers but still want to hold onto them, says Martha Gimbel, director of the budget lab at Yale.
- [10:52]
Steve Reed
Part of what's happening in the labor market is employers just aren't laying off.
- [10:56]
Kai Rysdal
A huge number of people.
- [10:58]
Steve Reed
And so workers cutting down on hours.
- [11:00]
Daniel Ackerman
Is another way for employers to adjust, Gimbal says. Workers don't seem upset about that adjustment because if you look at the share of part time workers who would rather be full time, those percentages are still quite low.
- [11:13]
Steve Reed
And what that suggests is that workers are likely still getting the number of.
- [11:17]
Kai Rysdal
Hours that they want to get, and.
- [11:19]
Daniel Ackerman
The overall reduction in hours worked is really just a return to how things used to be, says Ari Schwader, an economist at the University of Michigan.
- [11:27]
Steve Reed
So if you look at like the 2012-2020 timeframe, we're a tiny bit below.
- [11:33]
Daniel Ackerman
Sort of the average there, but not dramatically so, schwader says. We could finally be past the pandemic shock to the labor market, but maybe that's just in time for the next shock for workers. If you start to think about things like automation or AI, of course, being the big buzzword, you don't need your customer service people to work as much or as many hours because you can have an AI bot do a lot.
- [11:55]
Steve Reed
Of the work for them.
- [11:56]
Daniel Ackerman
Shwader says we're not there yet, but AI could mean big changes for how and how long employees work in the future. I'm Daniel Ackerman for Marketplace.
- [12:30]
Kyle Rysdal
Back to our retail regulars now. Elsewhere in the consumer price index, one finds a category labeled clocks, lamps and decorator items. Prices there down just under half a percent for the month, flat for the year. Picture frames are decorator items. Frames like those sold by Eric Vaughn at his shop in Detroit. It's called Eric's I've Been Framed. Once we get his holiday report, we.
- [12:54]
Eric Vaughn
Have people coming in at the last minute. We get that every year. Then we were able to accommodate most of the requests. A lady came in, she had this picture that she had shipped from New York and it took forever to get here. And I told her, don't worry about it, I'm going to take care of it. When it was completed, came back in and she said, here, this is for you. And she gave me $400. I was really shocked. I was like, wow, that made my Christmas. I'm in the process of, of trying to add another division where I sell black memorabilia. Over the years, I've amassed all types of memorabilia. It's going to be probably about two to three months before I can really get it up and going. And this is something I've always wanted to add. Just in the back of my mind, I said, I've got to do this because I just can't hold on to it forever.
- [13:57]
Kyle Rysdal
Eric Vaugh, Eric's I've Been Framed is his shop in Detroit coming up.
- [14:23]
Kalina Bruce
You know, everyone wanted to take time to go off and be with their families.
- [14:27]
Kyle Rysdal
Ah, yes, retail scheduling over the holidays. But first, let's do the numbers. Yeah, the really happy music today. Dow industrials up 703 points, 1.6%, 43,221. The NASDAQ jumped 466. That is two and a half percent on that particular index finished at 19,511. The S&P 500 added 107 points. One and eight, 10%, 59 and 49. There. Kaylee Wells was telling us about how big banks reporting better than expected earnings from last quarter. JPMorgan Chase rang up 2%. Goldman Sachs grew 6%. Wells Fargo gained 6.7%. Citigroup sprang up about six, six and a half percent today. According to the Mortgage Bankers association, rates for 30 year home loans have surpassed 7%, the highest since May of last year. Not going to do anything for the real estate market, right? Bonds up Yield on the 10 year T note down 4.65%. You're listening to Marketplace.
- [15:42]
Kai Rysdal
This Marketplace podcast is supported by Gusto. Look, payday is awesome, but running payroll, calculating taxes and deductions, staying compliant, that's not easy. Unless of course you have Gusto. Gusto is a simple online payroll and benefits tool built for small businesses like yours. Gusto gets your team paid while automatically filing your payroll taxes. Plus you can offer benefits like 401k, health insurance and workers comp just for listening. Today you also get three months free. Go to gusto.com marketplace that's gusto.com marketplace.
- [16:21]
Steve Reed
Hi, this is Mayumi from Long Beach, California. I love Marketplace and Kai, he really does a great job delivering important content that I benefit from. So I donated because it just seems like the natural thing to do. Join me by making a gift Marketplace today@Marketplace.org donate.
- [16:49]
Kyle Rysdal
This is Marketplace. I'm Kai Rysdal. Immigration, as we know is has been a very high profile public policy issue the past number of years. We also know that a lot of immigration authority in this country rests with the President. The Biden administration, which has just five days left to it, has used its immigration powers broadly specifically for something called humanitarian parole, which provides work authority here for people escaping violence or oppression or natural disaster back home. Marketplace's Elizabeth Troval reports. Now on.
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Elizabeth Trovall
This is the story of a big sister, Marilyn, and a little brother, Jonathan. Both were university students back home. Somos de Nicaragua In Nicaragua, universities have been a target of the violent authoritarian government, or not using their family name because of the risk of persecution.
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Kristen Thullheimer Bingham
Noy libertad.
- [17:44]
Elizabeth Trovall
There's no freedom of expression in Nicaragua, says Marilyn, and no job prospects. So two years ago, when President Biden opened up humanitarian parole for Nicaraguans, their stepdad, a US citizen, sponsored them. Within weeks they were on a plane to Houston, and within months she and her brother landed jobs as custodians at a local school district with their work permitsa they had never worked cleaning jobs before, but the pay was decent, $12 an hour more than salaries in Nicaragua, and she felt good about making her way. Humanitarian parole has been a useful tool to getting fleeing migrants quickly into US jobs that are often low paying and hard to fill.
- [18:30]
Steve Reed
Food production assistant, forklift operator, gardener.
- [18:34]
Elizabeth Trovall
In her office at the refugee resettlement agency YMCA International Services in Houston, Joanne Pantaleon reads off a list of jobs filled by her Cuban, Afghan and Ukrainian clients on humanitarian parole.
- [18:47]
Steve Reed
Security guard, cashier Uber driver, packer, stalker, babysitter.
- [18:51]
Elizabeth Trovall
Just last year, her organization helped around 1,800 Cubans, Afghans and Ukrainians with humanitarian parole get work permits.
- [19:00]
Steve Reed
It's immediate access to employment. They're making money for themselves. They're contributing to pay their bills.
- [19:05]
Elizabeth Trovall
And in the last couple years, she says, those work permits have been processed more quickly.
- [19:10]
Steve Reed
Just the fact that it only takes a month and a half or two months to get it from the moment you submit your application, it's a vast improvement.
- [19:20]
Elizabeth Trovall
Humanitarian parole has been used in unprecedented ways during the Biden administration, though it's actually been around for decades, since before the US had an asylum and refugee system. But a big difference between today and back then is Congress used to pass adjustment acts. Kathleen Bush Joseph with the Migration Policy Institute says Congress used to recognize that people couldn't go home for humanitarian reasons. So they'd say, we're going to set.
- [19:49]
Steve Reed
Up a process for you to be able to become a lawful permanent resident and perhaps eventually a citizen.
- [19:56]
Elizabeth Trovall
Congress hasn't had the political will to do that in recent years. And humanitarian parole is both fleeting and discretionary. So when Donald Trump takes office, his.
- [20:07]
Steve Reed
Officials have said that they think the Biden administration's use of parole has been illegal and they want to end on day one. These processes that have allowed for hundreds of thousands of people to come into the country.
- [20:24]
Elizabeth Trovall
And even absent Trump administration policy changes, parole is expiring for many. Some have been able to apply for asylum or temporary protected status. Others will return home or stay in the US Undocumented. As for Jonathan and Marilyn from Nicaragua, their pathway to stay is their dad, who has a green card. But because Jonathan was under 21 when he entered and Marilyn was older, they're in different immigration lines, facing different visa wait times. He gets to stay in Texas, but she has to go back to Nicaragua and she's afraid. For now, she's had to turn down a promotion at work as she makes plans to return to Nicaragua. But she's grateful for the two years she was allowed to live in the U.S. unlike in Nicaragua, here she's been able to make some money, she says, and she's actually felt free. In Houston, I'm Elizabeth Trovall for Marketplace.
- [21:55]
Kyle Rysdal
There was a survey out the other day, yesterday, actually it was from the National Federation of Independent Business that showed small business uncertainty about where this economy is headed has dropped sharply since the election. The broad strokes of the soon to be Trump administration's economic policies are pretty clear. But what seems certain for one slice of the economy can induce deep uncertainty in another and I speak here of the electric vehicle market. The president elect has said he will end some of the federal programs that have boosted EVs the past couple of years. And that gets us to this Bloomberg has analyzed some data from the Department of Energy that shows a record number of high speed charging stations were installed in the fourth quarter of 2024. That build out has been boosted by federal dollars, yes, but the cash is also coming from the private sector, as Marketplace's Henri Epp reports, two main barriers.
- [22:48]
Steve Reed
Stand between many drivers and an electric vehicle. Higher prices and charging infrastructure, or the lack thereof, says Stephanie Valdez Streety at Cox Automotive. It's those edge cases that they're thinking about. If I'm going to go on a trip and you know I want to be able to charge or I have to do go one commute, they want to know that they won't get stranded. And more businesses are picking up on the revenue opportunity that comes with that charging anxiety, says Gil Tal, a professor at UC Davis. When you are charging, you will be there for between 15 minutes to half an hour. You can go grab coffee, do a quick shopping. So if you put some chargers next to your coffee shop or clothing store, you probably won't make much selling electricity. But drivers might spend money in your store while they wait. Very similar to how gas stations make more money from selling soda and stuff. This is happening in a lot of shopping plazas and along interstates. Some truck stops are adding chargers, but so are other companies that haven't traditionally been in the fueling business, says Jim Herles at CBRE. One example, Volvo ChargePoint and Starbucks built out a network of DC fast charging between Seattle and Denver along the interstate corridors. All these new charging stations are a response to the growing number of EVs on the road. Or maybe there are more EVs on the road because there are more chargers. You know, those of us in this space pretty much universally hate the chicken and egg analogy. Jeff Allen is executive director of an organization called FOURTH, which advocates for electrified transportation. He says EVs and public charging are more like chicken and waffles. They both make the other better. The more EV drivers you have, the more utilization you have of the charging network. And the more charging you have out in public, the easier it is for more people to choose to go electric. And for now, Both charging and EVs are growing pretty fast. I'm Henry Epp for Marketplace.
- [24:51]
Kyle Rysdal
You know what goes together like chicken and waffles? The Marketplace Morning report and you needing to know what you need to know to get your economic day started. Check it out. David Brancaccio and the gang get up real early in the morning to tell you what there is for the last of our retail regulars, Kalina Bruce, owner of Noir Luxe Candle Bar in Seattle, Washington. Candles, should you be curious, are in that same clocks, lamps and decorator items, CPI categories, picture frames so prices virtually unchanged year over year.
- [25:43]
Kalina Bruce
December was really packed with a lot of private sessions, holiday events and things happening at our candle bar. We also did a a ton of off site markets, vendors markets. So we were in the community three to five times a week. I would say it does feel like we were very well prepared in terms of staffing and inventory. However, there was about a week or so where, you know, everyone wanted to take time to go off and be with their families. Of course that's something that we honor and support and it also is something that caused a little bit of, you know, trickiness in terms of scheduling during that time. Now that things have gotten a bit quieter, this is really our time to take a look at our inventory, do restocking, reorganizing our workspace, holding, you know, our team meetings and really working on staff development and focusing on some of our business goals for the year so that we can hope to see some more growth.
- [26:46]
Kyle Rysdal
Kalina Bruce there, wrapping up our January retail report. Noir Luxe Candle Bar, should you be in the market for a candle up in Seattle? This final note on the way out today in which central bankers they're just like the rest of us. The Federal Reserve's beige book came out today. Its anecdotal look at this economy broken down by regional Federal Reserve Bank. Today's winner comes to us from the Federal Reserve bank of Kansas City which offered this insight and I'm quoting here, ski resort contacts noted, busy early season bookings and a sold out holiday season. However, out of state powder hounds opted for lower cost basic passes to save on their ski vacations. Kansas, if you're confused, is yes, very flat. But the Kansas City Feds district does include Colorado, famously not flat. Our media production team includes Brian Allison, Jake Cherry, Justin Dueler, Drew Jostad, Gary O'Keefe, Charlton Thorpe, Juan Carlos Dorado and Becca Weinman. Jeff Peterson is the manager of media production and I'm Kyle Rysdal. We will see you tomorrow. Everybody, this is 8pm hey, it's Kai. My minivan and I as I've said on the radio, have logged a lot of miles with Marketplace. Luckily it's still running pretty well, but if your car doesn't drive as well as it used to, listen up. It can still help drive Marketplace when you donate your old car or truck, we'll use the proceeds to support the great programs you hear every day. Start your vehicle donation@marketplace.org vehicle.