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- [00:00]
Sponsor Announcer
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 nobody does selling better than Shopify, home of the number one checkout on the planet and the not so secret secret with Shop Pay that boosts conversions up to 50%, meaning way less carts going abandoned and way more sales going. So if you're into growing your business, your commerce platform better be ready to sell wherever your customers are scrolling or strolling on the web, in your store, in their feed, and everywhere in between. Businesses that sell more sell on Shopify. Sign up for your $1 per month trial period at shopify.commarketplace all lowercase go to shopify.commarketpace to upgrade your selling today. Shopify.commarketplace.
- [01:11]
Kai Rysdal
How we feel about this economy matters, of course. What we know matters too. From American Public Media, this is Marketplace in Los Angeles. I'm Kyle Rysdal. It is Thursday today. This one is the 21st of November. Good as always to have you along everybody. Let us stipulate here right at the outset that the vibes of this economy are real. Because as we know, how people feel about their economic lives does matter. That said, a good dose of data every now and then can be really useful. Something a little more objective that might tell us where the economy is at present and sometimes a bit about where it's going. It's convenient then that we got just such a dose of data today. The Conference Board's leading economic index, sometimes called in the vernacular the Index of Leading Economic Indicators. It crunches together 10 different forward looking indicators to suss out what economic growth is going to look like in the short term future. Last month it turns out, the lei was down by 4.10percent after being down in September and August and all the way back to earlier this year. What might that portend, do you suppose? Marketplace's Mitchell Hartman is on the economic crystal ball gazing desk for us today?
- [02:39]
Mitchell Hartman
The leading economic index is designed to predict future growth. It uses data on manufacturing, home building, unemployment, interest rates, stock prices and consumer sentiment. Economist Stephanie Guichard at the conference board says LEI was down last month and.
- [02:55]
Stephanie Hughes
It has also been declining for almost three years now.
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Mitchell Hartman
So it's bad, but the declines are also slowing down. So this is a positive development. It means that there are still headwinds to economic growth. But less than a few months ago, and the LEI is no longer flashing warning signs of recession to come. Which makes sense, says analyst Sam Stovall at CFR Research. Looking at real gross domestic product expected to be up 2.9% in 2024, 2.3% in 2025, Stovall says, you can also look at the stock market, which I know isn't the economy, but is often a harbinger. The stock market is a good predictor of economic growth trends. Historically, the market has anticipated the economy by six to seven months, and the S&P 500 has been hitting record highs. Objectively speaking, the economy is doing very well, exceptionally well. Economist Mark Zandi at Moody's analytics says the Conference Board's leading economic index may still be in the doldrums, but most everything else looks good, starting with the job market, creating a lot of jobs across lots of industries. Unemployment's very low. Economists not long ago were thinking recession, right? I mean, not this go around for any warning signs of recession. Zandi looks to unemployment claims. As long as they remain low, layoffs are low, consumers are going to continue to do their thing. So you look at the lai, you think the world's going to fall into pieces. You look at the UI claims, you.
- [04:29]
Kai Rysdal
Go, ah, no, that's not happening.
- [04:32]
Mitchell Hartman
Last week, jobless claims fell again to the lowest level in more than six months. I'm Mitchell Hartman for Marketplace.
- [04:38]
Kai Rysdal
Got to love an economist that says Wall Street. As the week heads into the home stretch, traders do seem to have gotten their mojo back just a bit. We'll have the details when we do the it's been brewing for days, but now it's official. The Department of Justice has given a federal judge its plan for breaking up Google. The DOJ wants to force the company to sell off its Chrome web browser. It wants limits on the Android mobile operating system. And the government's got thoughts on Google and artificial intelligence too. Quoting here, justice wants the court to stop Google from manipulating the development and deployment of AI solutions and other technologies that provide the most likely long term path for a new generation of search competitors. That is a mouthful, I know, which is why we asked Marketplace's Kelly Wells to unpack it for us.
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Kaylee Wells
The DOJ's complaint about Google and AI is kind of all about the Chrome web browser too. It is the most popular and it directs every search through Google's search engine. So does the second most popular web browser, Apple's Safari.
- [06:03]
Mitchell Hartman
That's a pretty tried and true monopoly strategy.
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Kaylee Wells
Adam Epstein is CEO of the search advertising firm Ad Marketplace. He says Google enjoys roughly 90% of search engine market share. The reason it's an AI problem is every time you look up the name of that one actor in that TV show or how to tie a double Windsor, you're making Google's AI program Gemini smarter.
- [06:27]
Mitchell Hartman
They can continue to improve their own search AI agent and keep searches away from their competitors.
- [06:33]
Kaylee Wells
That's why the DOJ wants to limit Google's ability to manipulate AI development. Chirag Shah is a professor at University of Washington's Information School.
- [06:43]
Mitchell Hartman
Getting that kind of diffuse a little.
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Kai Rysdal
Bit will at least give some competitors fighting chance.
- [06:49]
Kaylee Wells
Google called the DOJ's proposal a quote, radical interventionist agenda. In a statement, the company says it would chill its investment in AI and endanger user privacy. Shah is not convinced.
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Kai Rysdal
In fact, there are a number of.
- [07:03]
Mitchell Hartman
Reasons to believe that it would be.
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Sponsor Announcer
Actually better for customers if Chrome were to be divested.
- [07:09]
Kaylee Wells
Google has promised an alternative solution, and information management professor Thomas Davenport of Babson College thinks the company might have a point.
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Kai Rysdal
And so it's unfair to Google, really impossible to expect them to do search without being able to use AI freely.
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Kaylee Wells
And he says Google controls so much market share in part because people like it.
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Kai Rysdal
There are a variety of other search engines, but people just don't really want to use them.
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Kaylee Wells
Adam Epstein of Ad Marketplace says he expects the DOJ effort will change the search market, and today's single search engine reality will feel quaint in a few years. I'm Kaylee Wells for Marketplace.
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Kai Rysdal
There's been no small number of crises across the world these past few years. There are, of course, the wars in Gaza and Ukraine, and there are things like hurricanes and earthquakes and wildfires. All of them disrupt the global economy to one degree or another. Supply chains are what I'm thinking of in particular here. First and foremost, though, of course, they are humanitarian crises. Organizations like Save the Children are on the front lines of those crises. And at the end of the day, running that kind of nonprofit is also kind of like running a business. Yati Sharapto is the president and CEO of Save the Children US thank you so much for coming into the studio.
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Yati Sharapto
Thank you for having me.
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Kai Rysdal
I want to start with you, actually. You come from corporate America, decades in corporate America. You're an econ finance person by education. How did you wind up in this field?
- [09:01]
Yati Sharapto
Yes, I get asked that a lot. When I came out of grad school in Europe, actually, I joined UNILEVER a large multinational company, because I was very keen to actually get working abroad. And I figured if I join a large multinational, that will get me abroad. And indeed it did. Within five years, I was in Asia. But I did think, is there another way to use some of my skills to actually have more direct impact on people? If you are working for large consumer packaged goods companies, you do try to make everyday products for everyday people all the time and get them.
- [09:37]
Kai Rysdal
So you sound just like a corporate person.
- [09:39]
Yati Sharapto
I'm just gonna say you do. But that also makes you very aware of there are scores of people who actually could not afford our products. So I'm like, okay, how do I make that my impact more direct? And then I got sort of lucky. I bumped into Save the Children. They said, oh, here's this. This is 12 years ago. We have this role. Would you like to join? And I went, well, let's give it.
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Kai Rysdal
A try to give people a sense of scale. So you've been involved with Save the Children International for a long time. It's now you're running Save the Children US Give us a sense of what it is that you do. What does your organization do?
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Yati Sharapto
So Save the Children was founded over 100 years ago by this amazing woman, Eglint Hein Jeb, in the United Kingdom. And she was particularly aggravated about the fact that children in Germany and Austria were dying of starvation after World War I. We're talking 1919. We are now an organization that has over 25,000 colleagues across 115 countries. We have an annual spend budget of almost $3 billion. And it's, you know, we do emergency responses, whether they are earthquakes or conflict affected settings. But we also do long term education or livelihood work across all kinds of countries, including here in the United States.
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Kai Rysdal
The other thing that struck me as I was thinking about this interview, there's this great video of something it was that you all did. And I apologize for not remembering the specifics, but the number of times supply chain imagery came up in that video. Big cargo, airplanes, trucks passing goods hand to hand. The idea that so much of what you do depends on logistics and supply chains actually just sort of surprised me in a way that really shouldn't have been surprising, I suppose.
- [11:35]
Yati Sharapto
Yeah, people always say to me, oh, is it very different from what you did before in the private sector? I'm like, well, more things are the same. Getting stuff from A to B on time, in full, with good quality at optimal cost is exactly what is required in this sector. So I think over the years, we've really professionalized that area of our work. Right. When I joined now over 12 years ago, I would say we were definitely less organized and less structured and we had fewer systems than a large multinational consumer packaged goods company would have. And it's hard, right. When you're an ngo, you always have to make trade offs. Where do we spend our money? Does it go to children now? Oh, no. We do need a supply chain system. But now I'm very proud, I think, of our supply chain infrastructure. We have over 300 warehouses. We procure half a billion dollars every year from blankets and backpacks and food to medicine and whatever else is needed to help children in emergencies.
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Kai Rysdal
And it occurs to me you're doing it under the most horrible of conditions. Not just hurricanes here in the United States, but Gaza, Ukraine. Right?
- [12:48]
Yati Sharapto
Yeah, yeah. I have to, I always say to my, you know, old private sector people, to do the supply chain under our. Exactly. That takes a level of determination and creativity. That is quite something else.
- [13:02]
Kai Rysdal
I think you said somewhere or it was said about the work that your organization does, there are more children now in need who are in war zones or disaster areas than there have been in generations.
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Mark Friedlander
Yeah.
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Yati Sharapto
Then probably, certainly since World War II. Yeah, absolutely, yeah.
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Kai Rysdal
What do you do with that? This is your job. What do you do with that?
- [13:21]
Yati Sharapto
You, first of all, you accept that you cannot help every child everywhere, all the time. You have to accept it. Otherwise you.
- [13:29]
Kai Rysdal
That's quite the leap to have to make.
- [13:30]
Yati Sharapto
You have to make that leap. And sometimes we also have to extract ourselves out of areas because there's not sustainable funding, for instance. And if you can't do it well, it's better not to do it. Right.
- [13:43]
Kai Rysdal
Which is hard to do in this.
- [13:46]
Yati Sharapto
Sector because people think, well, do something and we're like, yeah, but something. If you can't sustain it, you're sometimes.
- [13:52]
Kai Rysdal
Doing more work worse. To go in and give false hope.
- [13:54]
Yati Sharapto
Yes, false hope. And also do it badly. Because if you do it and you start to make shortcuts on the safety with which you do it, the safety and security for your staff and colleagues, but also for the children that you serve, then you're better off not doing it. But still it's sometimes hard to say, we would like to do this, but we can only do half of it.
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Kai Rysdal
How do you know that what you do is working? This is the metrics problem. Right. How do you measure your success?
- [14:19]
Yati Sharapto
And again, there it is sometimes different from the private sector where I knew every day what we sold, what consumers thought if they don't like your product, they walk away. And sadly sometimes I wish the people that we help could walk away if we weren't good enough. But they sadly don't have that choice. Right. So we have to internally be much better at wanting to do, to deliver the best possible product or service at the best possible cost.
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Kai Rysdal
But it does kind of ring hollow to have the metric be we delivered, you know, 14,000 meals today to Rafa. Right. That, I mean, yes, it's important.
- [14:52]
Yati Sharapto
Yeah, you can count it, but it's not necessarily what counts. No, no, exactly. And we have to live with that. So sometimes we say, okay, what can we count that does matter? Right. And there are always things that you can do to understand it or how many kids benefited from this education program. And in certain cases you can absolutely test them. Right. We test baselines. What do they like going in, what do they like going out? And is there significant difference? But sometimes it's harder. Right. If you stop early child marriage in a country which impacts 12 million girls every year, they get married off before the age of, often the age of 15 because their parents see no other option because of poverty, because of safety, because of cultural norms, et cetera. If you find a way to stop it that we can measure then how many girls are not married off early. It does have a huge knock on effect, but you have to sort of use some proxies in order to get there.
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Kai Rysdal
You are sadly in a business the need for which will never go away.
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Yati Sharapto
No. And sadly, it's actually a growth market as we speak, which I wish I wouldn't have to say, but that is certainly the case.
- [16:01]
Kai Rysdal
Nate Sarepto at Save the Children US thank you for coming in.
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Yati Sharapto
Thank you for having me.
- [16:33]
Stephanie Hughes
Coming up, you had new properties, you had a lot of new roofs which withstand winds a lot better than older roofs.
- [16:42]
Kai Rysdal
Bad news becomes good news sometimes. First though, let's do the numbers. Dow industrials up 461 points today. One and a tenth percent on the blue chips closed at 43,870. They did. The NASDAQ gained six points, less than a tenth percent. 18,972. The S&P 500 jumped 31 points, about a half percent. 59 and 48 big banks were a big part of the rally today. JPMorgan Chase ascended 1.6%. U.S. bancorp grew 1 and 3, 10%. Citigroup added 1%. Wells Fargo increased about 1.7% today. Bitcoin BTC traded around $98,000 per today. That is nonetheless, or nevertheless rather another record high. The value of Bitcoin has been on the rise since election day. As you might have seen on hopes for a cryptocurrency friendly approach from the incoming administration. Mortgage levels have climbed back to levels seen last in July. The average rate for a 30 year fixed is now 6.84%. That's up from 6.78% last week. Seems like a lot of decimal points, but every decimal point counts in a mortgage. Bonds down Yield on the 10 year T note rose 4.42%. You're listening to Marketplace when you think.
- [17:58]
Sponsor Announcer
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- [19:00]
Mitchell Hartman
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- [20:11]
Kai Rysdal
This is Marketplace. I'm Kai Rysdal. Ford said this week it's going to cut 4,000 jobs from its European workforce most of them in Germany and the uk. In Europe, the company said it's been losing money on passenger cars. Increased competition, as well as the shift to electric vehicles, which Ford called highly disruptive, are the proximate cause. Marketplace's Stephanie Hughes has more on the growing pains in the EV market.
- [20:37]
Stephanie Hughes
One big problem for EV makers who sell cars in Europe started about a year ago when the German government, in a surprise move, ended an electric vehicle subsidy program, says Tom Narayan, an auto analyst at RBC Capital Markets.
- [20:50]
Mitchell Hartman
Since then in Germany, EV sales have been quite sluggish.
- [20:54]
Stephanie Hughes
There's since been a big push by automakers, including Ford, to bring an incentive back. Meanwhile, automakers in Europe are motivated to sell EVs to meet a new continental emissions standard or else they could face big fines. Also, says Thales Blalak, an electrified roadways consultant, carmakers have more competition with the.
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Kai Rysdal
Much cheaper Chinese imports. Especially in the United Kingdom, where they don't have large automakers themselves, they don't have any tariffs.
- [21:22]
Stephanie Hughes
Here in the US the challenges are a bit different, blalak says. There's been a lot of focus on the high end electric car market, but now pretty much everyone who wants a fancy EV has one.
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Kai Rysdal
So we need to have lower cost vehicles so that the average person that wants a new car looks at an EV and says it makes economic sense for me to buy that vehicle.
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Stephanie Hughes
Another challenge stateside, says RBC's Tom Narayan, we like big cars like SUVs and.
- [21:53]
Mitchell Hartman
Pickups, very expensive because you need an enormous battery. These are heavier cars.
- [21:58]
Stephanie Hughes
American consumers also don't always know when and where they'll charge an ev. Alicia Freeman lives in a suburb of Baltimore. She affectionately calls her current car a spunky old Hyundai hatchback. It's been loved and she's thinking about moving on to an ev, but she doesn't know exactly where she'd plug it in.
- [22:15]
Yati Sharapto
I live in a townhome and I would have to put a cord across.
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Mark Friedlander
The sidewalk, which I don't even know if it's legal or not. So I'm looking into that.
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Stephanie Hughes
Freeman says she's also just used to gas powered cars. She's been driving them for 30 years. She knows how much the repairs will cost, and an EV is a whole spunky new beast to learn all about. I'm Stephanie Hughes from Marketplace.
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Kai Rysdal
Hurricane Helene made landfall on Florida's Gulf coast just shy of two months ago. Milton followed not even two weeks later. The storm killed nearly 250 people across six states. Damage runs into the very high tens of billions of dollars, if not more, some as yet undetermined percentage of which was insured, some not. In Florida, where the insurance market is already kind of fragile, those storms are going to pose a real test. As Marketplace's Amy Scott reports back in.
- [23:23]
Mark Friedlander
The summer of 2022, here's how insurance industries spokesman Mark Friedlander described the Florida market for our podcast How We Survive.
- [23:34]
Kai Rysdal
It's hanging on a shoestring right now.
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Mark Friedlander
Friedlander is with the Insurance Information Institute, an industry funded research group. That year, several Florida insurers had gone bust. Others were pulling out of the state. And that was before Hurricane ian caused about $60 billion in insured losses. So it was a little surprising when I checked in with Friedlander again recently after back to back hurricanes Helene and Milton hit the state.
- [24:06]
Kai Rysdal
According to our analysis here at the institute, the Florida market is in its best financial position in nearly a decade.
- [24:14]
Mark Friedlander
What now?
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Kai Rysdal
It is incredible, absolutely incredible what's happening.
- [24:19]
Mark Friedlander
So what did happen? Friedlander credits tort reform, new state laws that made it harder to sue insurance companies for denied claims. Insurers have blamed excessive litigation for driving up costs. Meanwhile, the inflation that added to rebuilding costs has cooled. And after years of raising premiums, Friedlander says insurance companies are in better financial shape to absorb claims. This year, he says companies have filed for an average rate increase of less than 1%.
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Kai Rysdal
That is a clear stying of a market that is stabilizing. And then on top of all this, we have nine new companies that have.
- [25:01]
Mark Friedlander
Come to Florida this year as devastating as Hurricane Helene was elsewhere, catastrophe modeler Karen Clark estimates insured losses were around $2 billion in Florida, and she now expects claims from Milton will be lower than her company's initial estimate of $36 billion, partly because Milton hit areas that had recently rebuilt after Hurricane Ian.
- [25:26]
Stephanie Hughes
You had new properties, you had a lot of new roofs, which withstand winds a lot better than older roofs.
- [25:33]
Mark Friedlander
She says homeowners weary from rising insurance costs may also be hesitant to file small claims because they don't want their.
- [25:42]
Stephanie Hughes
Premiums to go up. So the insured loss is going to be well, manageable for Florida insurers.
- [25:51]
Mark Friedlander
But better shape doesn't mean good shape. Chuck Nice is a professor of risk management and insurance at Florida State University.
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Kai Rysdal
I don't think people realize how close we were to a collapse of the private market in Florida. We are a much stronger footing today.
- [26:09]
Mark Friedlander
However, it's still not where I believe it needs to be, as large private companies like Farmers Insurance and Allstate have either left Florida or reduced their coverage. Nice says Citizens, the state backed insurer of last resort has taken on more risk. Martin Weiss grades the financial health of insurance companies at Weiss Ratings. Of the hundred or so companies operating in Florida, more than half have ratings of C or lower. And Weiss is concerned about how often insurers are rejecting insurance claims. Last year, Citizens denied just over half of claims. State Farm denied 47%.
- [26:50]
Kai Rysdal
Insurance companies have been denying homeowners claims with no payment whatsoever at very high levels.
- [26:59]
Mark Friedlander
Insurers say they're often turning down flood damage, which isn't covered by traditional homeowners policies. But Weiss says those tort reforms the industry pushed for have made it harder for homeowners to dispute those denials. I'm Amy Scott for Marketplace.
- [27:37]
Kai Rysdal
This final note on the way out today in which Triple A joins the EV bandwagon. You know how every now and then I do gas prices in this spot on the program. Useful anecdata I think just to give you a sense, that all comes from aaa, their website, which until today was labeled gas prices. Well, as EV penetration keeps gathering steam in this economy, there has been a rebrand. AAA now calls it fuel prices. And you will be able to find statewide average per kilowatt hour costs to charge your EV 34.7 cents is a nationwide average. Should you be curious per kilowatt hour gas? Because I know more of you are curious about gas than EV charging $3.06 a gallon, the national average. John Buckley, John Gordon, Noya Carr, Diantha Parker, Amanda Peacher and Stephanie Seek are the Marketplace editing staff. Amir Babawe is the managing editor and I'm Kai Rysdal. We will see you tomorrow. Everybody. This is apm.
- [28:47]
Mitchell Hartman
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- [29:03]
Vanta Announcer
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- [29:04]
Mitchell Hartman
The good news is that compared to wrapping presents, you're great at getting hints. So take the hint and get them four free phones and four lines for 90 doll th us cellular built for us.