Marketplace Podcast Summary: "Still Looking"

Host: Kai Ryssdal
Release Date: January 24, 2025
Description: Every weekday, host Kai Ryssdal helps you make sense of the day’s business and economic news — no econ degree or finance background required. “Marketplace” takes you beyond the numbers, bringing you context. Our team of reporters all over the world speak with CEOs, policymakers and regular people just trying to get by.

1. Labor Market Dynamics: Rising Unemployment Claims

The episode opens with a comprehensive analysis of the current labor market. Kai Ryssdal reports a slight increase in first-time unemployment claims, noting that while these numbers are typically volatile and often overlooked, the focus is now on continuing claims. Currently, nearly 1.9 million people are receiving unemployment benefits, marking the highest figure since November 2021 ([01:05]).

Key Points:

• Industry Layoffs and Hiring Freezes: Kaylee Wells highlights that layoffs in certain sectors and hiring freezes have contributed to the rise in unemployment claims. Allison Stevens from Paychex attributes this trend to an oversupply of qualified candidates in some markets.

• Selective Job Seeking: Workers are becoming more selective, prioritizing roles that offer remote work or are within specific geographical locations. Elise Gould explains, “They’re being much more selective with the roles that they're seeking, such as they have decided they must work remotely or... into an office, it’s only going to be within a certain geographical distance from their home” ([02:36]).

• Economic Implications: Although the number of continuing claims has risen, Elise Gould points out that as a percentage of the labor force, these claims are comparable to pre-COVID levels. This suggests underlying stability in the labor market despite the increase in absolute numbers ([03:33]).

Notable Quotes:

• Elise Gould: “I think in some pockets the market might be flooded with qualified candidates.” ([02:26])
• Elise Gould: “Every employment insurance agency, if you ask them, will say it's, you know, their busiest month.” ([03:08])
• Elise Gould: “But when we look at continuing claims, as a share of the labor force, it’s basically the same as it was pre-Covid.” ([03:34])

2. The Luxury Electric Vehicle Market: GM’s Cadillac Lyriq

General Motors is making a significant push into the luxury electric vehicle (EV) market with the introduction of the Cadillac Lyriq SUV, priced at nearly $80,000. Nancy Marshall Genzer delves into this strategic move, exploring the viability and potential market for high-priced EVs ([05:50]).

Key Points:

• Market Saturation: Elaine Buckberg, former GM chief economist, notes a shift with over 30 luxury or premium EV models available compared to around 20 more affordable options in the 2024 model year ([06:02]). This indicates a growing trend towards luxury in the EV sector.

• Cost-Benefit Analysis for Consumers: Despite the high upfront cost, EV owners can expect annual savings between $1,000 to $1,200 compared to traditional gas vehicles, primarily due to lower fueling costs ([06:27]).

• Limited Market for Ultra-Luxury EVs: Experts like Jessica Caldwell from Edmunds suggest that EVs priced above $100,000 occupy a very small market segment, likely less than 1% of all vehicle sales ([07:13]).

Notable Quotes:

• Elaine Buckberg: “In model year 2024, there were more than 30 EV models that I consider luxury or premium, compared to only around 20 cheaper models.” ([06:02])
• Jessica Caldwell: “$100,000 EV is not going to be. It’s just no one can afford it.” ([07:13])

3. Resilience of 24-Hour Diners in New York City: A Case Study of Kellogg's Diner

Priya Krishna, a food writer for The New York Times, shares her immersive experience spending a night at Kellogg's Diner in Brooklyn. Amidst the pandemic's impact on dining establishments, Kellogg's stands out as a resilient 24-hour diner that continues to attract a diverse clientele ([07:52]).

Key Points:

• Culinary Appeal: Kellogg's Diner distinguishes itself with high-quality offerings, including a $95 ribeye steak and desserts like passion fruit pie, catering to both long-time patrons and new customers seeking a premium diner experience ([09:53]-[12:24]).

• Community and Atmosphere: Unlike typical fast-food establishments, diners like Kellogg's provide a welcoming environment where patrons can enjoy a sit-down meal with attentive service, even during unconventional hours ([10:42]).

• Adaptation Post-Pandemic: Despite changing sleep patterns and the allure of faster food options, the diner has maintained its relevance by serving as a "third destination" beyond home and work, fostering community connections ([10:19]-[11:01]).

Notable Quotes:

• Elise Gould: “Apartment are too small, everyone needs somewhere else to be.” ([10:01])
• Priya Krishna: “The food at Kellogg does just that. I think it was kind of... It wasn't too fancy.” ([12:27])

4. Financial Markets Update: Stocks and Bonds

Mitchell Hartman provides an overview of the financial markets, highlighting significant movements in stock indices and corporate earnings ([13:18]).

Key Points:

• Stock Market Performance:

  • Dow Industrial Average: Increased by 408 points (0.9%) to 44,565.
  • NASDAQ: Rose by 44 points (0.2%) to 20,053.
  • S&P 500: Gained 32 points (approximately 0.5%) to 6,118.

• Corporate Earnings:

  • Alaska Air: Benefited from robust holiday and corporate travel demand, surpassing fourth-quarter profit estimates and predicting a smaller-than-expected loss for the current quarter. Shares surged by nearly 2.210%.
  • American Airlines: Forecasted profits for 2025 to fall short of expectations due to rising jet fuel costs and a sales strategy that has deterred corporate travelers. Shares dipped by 0.875%.

• Bond Markets: Bond prices declined with the 10-year Treasury Note yield rising to 4.64%, reflecting market adjustments to interest rate expectations.

Notable Quotes:

• Mitchell Hartman: “Dow industrials up 408 points today. Nine tenths of 1%.” ([13:18])
• Mitchell Hartman: “American Airlines... profits for 2025 are not going to meet expectations.” ([14:07])

5. The Evolving Labor Market: Post-Pandemic Recovery and Challenges

Backtracking to February 2020, Mitchell Hartman and Harvard economist Jason Furman examine the labor market's trajectory since the onset of the COVID-19 pandemic ([15:40]-[20:53]).

Key Points:

• Job Recovery Lagging: Although the U.S. economy has added about 7 million more jobs since February 2020, it remains 4 million jobs short of what pre-pandemic trends would have projected, based on the Congressional Budget Office’s expectations ([16:24]-[16:46]).

• Immigration and Remote Work: A significant influx of immigrants has helped fill job vacancies, while the pandemic accelerated the adoption of remote and hybrid work models. Jared Doyle from Manpower Group notes that employees continue to demand greater flexibility in their work arrangements ([17:28]-[17:51]).

• Impact on Working Mothers and Child Care: Jasmine Tucker from the National Women's Law Center discusses the ongoing struggles of working mothers during the pandemic, particularly regarding childcare, an issue that remains unresolved with the child care sector only recently beginning to recover jobs ([17:40]-[18:58]).

• Job Churn Stabilization: Initially, the pandemic disrupted career paths and increased job turnover. However, five years later, job quitting has stabilized as employers focus on retaining talent through mental health support, work-life balance initiatives, and workplace inclusivity ([18:58]-[19:55]).

• Economic Dynamism: Betsy Stevenson from the University of Michigan highlights the labor market’s adaptability, emphasizing workers' ability to reinvent themselves, upskill, and reskill, contributing to the U.S. maintaining a dynamic and productive workforce ([19:46]-[20:03]).

Notable Quotes:

• Jason Furman: “The population is still growing, so we might be seeing more unemployed workers, but we're also seeing more workers in general.” ([03:55])
• Elise Gould: “It actually gives me a lot of hope for the future.” ([19:46])

6. Housing Market Trends: Rising Rents and Regional Variations

The housing segment explores the national trend of rising rental costs alongside regional exceptions in Denver, San Antonio, and Austin ([20:53]-[23:27]).

Key Points:

• National Average Rent: Currently stands at $1,965 per month, marking a 3.4% increase over the past year, according to Zillow ([20:53]).

• Regional Declines: Denver, San Antonio, and Austin are unique in experiencing a decline in rent prices. Igor Popoff from Apartment List attributes this to an oversupply of new apartments entering the market, creating competitive pressures that lead landlords to offer concessions such as rent discounts or upgrades ([21:25]-[22:57]).

• Supply and Demand Dynamics: The construction boom in these cities initially responded to high demand and low interest rates. However, as these new units became available, the market shifted, resulting in increased options for renters and enhanced affordability ([21:59]-[22:55]).

Notable Quotes:

• Elise Gould: “Denver, San Antonio and Austin were the only metro areas where rents fell last year. What's so special about those places?” ([21:25])
• Igor Popoff: “With more new Units set to come online this year, we expect the concessions to continue.” ([22:55])

7. Adventures in Housing: Building a Custom Home in Fairbanks, Alaska

The episode features Justine Schmidt’s personal journey of constructing a unique, self-built home in Fairbanks, Alaska. This segment underscores the growing trend of DIY housing projects influenced by regional autonomy and economic considerations ([23:27]-[26:36]).

Key Points:

• DIY Construction: Leveraging minimal regulations in Fairbanks, Justine and her partner Josh built their home from the ground up, incorporating features like giant arctic-grade windows and super-thick walls to withstand harsh climates. The total construction cost was just under $200,000 ([23:55]-[26:36]).

• Economic Efficiency: By undertaking the construction themselves, they significantly reduced costs compared to market-priced homes, which are generally unaffordable at similar specifications.

• Personal Connection: The home serves not just as a living space but as a personal project, symbolizing their connection and investment in their environment ([25:57]-[26:36]).

Notable Quotes:

• Justine Schmidt: “It's exactly what we want. I think we both feel very, like, connected to our house, like it's a little baby that we had, you know, it's our child.” ([22:57]-[23:27])

8. Final Remarks and Public Service Announcements

Kai Ryssdal concludes the episode with a public service announcement emphasizing the importance of computer security, advising listeners to regularly log out of public computers to protect their accounts ([26:36]-[23:55]).

Conclusion

The "Still Looking" episode of Marketplace provides an insightful exploration into the current economic landscape, touching on labor market fluctuations, the evolving luxury EV sector, resilient local businesses like 24-hour diners, and dynamic shifts in both the national and regional housing markets. Through expert interviews and real-life stories, the podcast offers listeners a nuanced understanding of ongoing economic challenges and trends shaping everyday life.