The GDP equation

Summary

Marketplace Podcast Summary Episode: The GDP Equation
Release Date: February 26, 2025
Host: Kai Rydsdal
Guests: Neil Irwin (Chief Economic Correspondent, Axios), Stacey Vanek Smith, Alison Schrager, Matt Sloester (MP Materials), Chris Barry (House Mountain Partners), Daniel Ackerman

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1. Shifting Transatlantic Relations: EU and the U.S.

The episode opens with host Kai Rydsdal discussing the evolving relationship between the European Union (EU) and the United States under the second Trump administration. The EU, with a collective GDP of approximately $21 trillion and a population of around 450 million, has long been the U.S.'s closest economic partner.

Neil Irwin explains the depth of this relationship, noting, “It was pretty solid. It was kind of the deepest, most intertwined economic relationship in the world in some ways” (01:44). However, recent political shifts have strained these ties. Irwin highlights the ambition of the new administration to pivot towards Russia, stating, “Russia is a comparatively small country in terms of its economy, even its population” (02:21), emphasizing that Russia cannot replace the economic benefits derived from the EU.

Historical context is provided, tracing the U.S.-EU alliance back to the Marshall Plan and World War efforts. Irwin underscores the significance of this bond, mentioning, “NATO is one side of the coin, economic ties to the other side of the coin” (04:03). The rapid deterioration is attributed to the Trump administration's skepticism and the emerging stance of European leaders advocating for greater independence from the U.S.

2. Understanding GDP: The Role of Government Spending

Transitioning to economic metrics, the podcast delves into the components of Gross Domestic Product (GDP). Stacey Vanek Smith explains the GDP formula: C + I + G + (NX), where C stands for consumer spending, I for investment, G for government spending, and NX for net exports (07:46).

Ernie Tedeschi from Yale University's Budget Lab discusses the potential impact of cutting discretionary government spending. He states, “Imagine you were to cut discretionary spending in half over the next year. That would mechanically reduce GDP by 3%” (08:03). Such cuts could have long-term repercussions, diminishing both immediate and future economic growth.

The discussion highlights how government spending supports other economic sectors. Guy Lebane, Chief Fixed Income Strategist at Janney Montgomery Scott, adds, “They could also affect the I component of GDP investment” (08:50), explaining that reduced government expenditure can lead to lower consumer spending and subsequent layoffs, creating a ripple effect throughout the economy.

3. The Evolving Bond Market: Risks and Rewards

Stacey Vanek Smith transitions to the bond market, likening it to “ice cream roulette” to illustrate its current unpredictability (10:44). Bonds have traditionally been seen as safe investments, but rising inflation has introduced new risks. Smith explains, “If you buy a two-year government bond for 100 bucks and at the end of that time the government will pay you back your $100 plus, plus $5 of interest... by the time you cash out, your 105 bucks can't buy as much” (12:03).

Mike Kudzel from Pimco emphasizes the continued attractiveness of bonds despite inflation: “Safety is exactly why investors and governments snap up billions in US Government bonds every week” (12:57). However, higher yields required by the government to attract investors mean increased debt service costs, which strain the federal budget: “We have less money for other things” (15:06).

4. Rare Earths and U.S. Supply Chain Independence

The podcast addresses critical mineral dependencies, particularly rare earth elements essential for modern technologies. Sabri Benashore reports on the U.S. efforts to develop an independent supply chain for these minerals, which are predominantly controlled by China. Rare earth elements like neodymium and praseodymium are vital for manufacturing strong permanent magnets used in various technologies, from cell phones to electric vehicles.

Matt Sloester of MP Materials discusses the strides made in restoring the rare earth supply chain in the U.S., including extraction, processing, and refining capabilities (19:52). However, challenges persist due to higher domestic costs and economic uncertainties exacerbated by tariffs. Chris Barry from House Mountain Partners notes, “Because of inflation throughout the economy, the cost of capital of these domestic mining and metals projects has risen rather dramatically, upwards of 30%” (20:10).

5. Instacart’s Post-Pandemic Performance

Shifting focus to the retail sector, the episode examines Instacart’s business outlook following its pandemic-driven growth surge. Initially, Instacart's sales quadrupled during the pandemic as consumers shifted to online grocery shopping. However, recent earnings reports indicate a slowdown in growth.

Neil Saunders from Global Data acknowledges the potential for continued growth but cautions about the challenges: “Realizing that growth could be hard” (23:00). Factors such as increased competition from grocery giants like Kroger and Walmart expanding their delivery services, alongside inflation affecting consumer spending, contribute to this slowdown. Sucharita Kodali from Forrester adds, “One of the biggest signals of inflation these days is eggs... When they do, there's sticker shock” (23:48), highlighting how rising prices on staple items can dampen overall consumer expenditure on other products.

6. Market and Economic Highlights

The episode concludes with a brief overview of current market conditions:

• Stock Markets: The Dow Industrials are down nearly 3%, while European indexes like the London FTSE and the CAC 40 in Paris are up around 3% each, and Germany’s DAX is up 7%.
• Tech Stocks: Nvidia reported earnings that exceeded expectations, leading to significant gains, while Broadcom and Intel also saw positive movements.
• Cryptocurrency: Bitcoin hovers around $85,000, with Coinbase’s global trading exchange up by 2.10%, and PayPal down by 2.7%.
• Government Relations: President Trump announced Volodymyr Zelensky’s visit to the White House to finalize a minerals deal, crucial for U.S. rare earth supply chain efforts.
• Consumer Confidence: Recent data indicates a sharp decline in consumer confidence, the steepest since 2021, reflecting widespread economic uncertainty.

Notable Quotes

• Neil Irwin (01:44): “It was kind of the deepest, most intertwined economic relationship in the world in some ways.”
• Ernie Tedeschi (08:03): “Imagine you were to cut discretionary spending in half over the next year. That would mechanically reduce GDP by 3%.”
• Mike Kudzel (12:57): “Safety is exactly why investors and governments snap up billions in US Government bonds every week.”
• Chris Barry (20:10): “Because of inflation throughout the economy, the cost of capital of these domestic mining and metals projects has risen rather dramatically, upwards of 30%.”
• Sucharita Kodali (23:48): “One of the biggest signals of inflation these days is eggs... When they do, there's sticker shock.”

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Conclusion:
In this episode of Marketplace, host Kai Rydsdal and guests explore the complexities of the U.S. economy, examining the shifting dynamics of international relations, the critical components of GDP, the evolving bond market amid inflation, the strategic importance of rare earth elements, and the challenges faced by companies like Instacart in a post-pandemic market landscape. Through insightful discussions and expert analyses, the podcast provides listeners with a comprehensive understanding of the current economic climate and its far-reaching implications.

Transcript

[Colin Rysdal]

When things change quickly and dramatically, Marketplace is here to help you stay grounded and informed. No sensationalism, just facts and context. It's our March fundraiser. You can be part of our mission to make everybody smarter about the economy. When you donate to this nonprofit newsroom today, every single donation makes a difference. We just need you. Go to marketplace.org donate on the program today. The bond market story you didn't know you needed. Trust me, this one. From American Public Media, this is Marketplace in Los Angeles. I'm Colin Rysdal. It is Wednesday today, the 26th of February. Good as always to have you along, everybody. The European Union, should you be curious, has as a single economic entity, a single market, if you will give or take 450 million people in it. Its collective gross domestic product is about $21 trillion, which makes it the world's second biggest economy behind us. I mention all of that because the transatlantic relationship just ain't what it used to be. The second Trump administration is turning the United States firmly away from Europe politically and inevitably economically. And that, as Axio's chief economic correspondent Neil Irwin wrote the other day, is, is going to come with some costs. Neil, it's good to have you back on the program.

[Neil Irwin]

Thanks for having me. Kai.

[Colin Rysdal]

Give us the status quo, aren't they, if you will, of the EU United States relationship as of like 20th of January, just to pick a date?

[Neil Irwin]

Well, it was pretty solid. It was kind of the deepest, most intertwined economic relationship in the world in some ways, huge cross border investments, trade flows, financial flows, flows of people, of ideas, of information. And really that has made both, both sides of the Atlantic wealthier over the years. That is the status quo as of.

[Colin Rysdal]

About a month ago, as we turn now the United States does to developing a relationship with Russia as the White House has said it wants to do. Can the Russians replace the economic gains the United States has gotten from its relationship with the European Union?

[Neil Irwin]

No, I think it's worthwhile to think about just the scale here. Russia is a comparatively small country in terms of its economy, even its population. To the rest of Europe, Russia has a smaller economy than the UK Germany, France and Italy individually, let alone put together in terms of trade flows. There's not this track record of big innovative Russian companies building massive factories abroad in the US or anywhere else. These are just different scales of economic enterprise. And that's before you get to the kind of diplomatic, cultural, long standing historical tensions between these countries.

[Colin Rysdal]

Just as a note on the whole long standing thing. I mean, the United States has been building its economic relationship with Europe writ large since, like, the Marshall Plan.

[Neil Irwin]

Yeah. I mean, you go back to World War I, World War II. The US ultimately intervened in both and got involved. And then Post World War II has spent the last 70 years, you know, playing a key role, kind of rebuilding Western Europe and making it an economic power. Now, the European economy, to be clear, has a lot of problems, and it's not as innovative and as fast growing as I think a lot of people would like to see it be. At the same time, what you have right now is a very large, wealthy continent that has these deep ties with the US that are nothing to shake a stick at. You look around the US you see all these states where European companies are big employers. You have BMW and Volkswagen and Airbus and Siemens operating these big operations in the U.S. these are the kinds of economic interconnections that are hard to replicate with a much smaller and more remote economy.

[Colin Rysdal]

Take the next step on those interconnections because there's a national security aspect to economic interdependence.

[Neil Irwin]

Absolutely. And part of the entire theory of post war US Europe diplomacy has been that we have an economic interconnection and a diplomatic geostrategic interconnection that are interrelated. NATO is one side of the coin, economic ties to the other side of the coin, and really both sides of that coin are tarnished right now and really not what they were. And that's happened very rapidly. Certainly first term, Trump had deep skepticism of Europe and hostility toward NATO in certain ways. But he was also not in position to really unwind those ties in the ways that he has made real progress toward doing in just the first five weeks of this administration. And we saw that over the last few weeks with J.D. vance over in Munich. We saw it with the German elections where the new German chancellor, incoming German Chancellor, is basically saying, we must be independent from the United States. Those are words even a month ago, you would not have expected to hear from a new German chancellor a word.

[Colin Rysdal]

Here about the rest of the world. There's a great quote in this piece that you wrote from Hank Paulson, the former Secretary of the treasury, about China and what Chinese officials would tell him.

[Neil Irwin]

Yeah. So Hank Paulson, the former Treasury Secretary, has said that a Chinese official once told him, well, you, the US have all the good allies. And what they meant by that was Western Europe. You have Germany, you have the UK you have France, you have Japan. That's part of why China has had to form these relationships with Russia, with North Korea, with kind of lesser powers, lesser economic forces. And what's happening right now is kind of the dissolution of that bond between the US and some of its historically closest allies that also happen to be some of the richest and most populous nations on earth. So where that leads, we don't know how much of its rhetoric, how much of its kind of bluster and how much comes a real dissolution of these economic and other ties. That's what we don't know yet. But directionally, we know what way it's going.

[Colin Rysdal]

Neil Irwin, he's chief economic correspondent at Axios. Neil, thanks a bunch. Good to talk to you.

[Neil Irwin]

Thanks so much, Guy.

[Colin Rysdal]

Wall street today. So look, I'll tell you what. Let's have a look at European indexes, why don't we, given the conversation Neil and I just had over the past month. The Dow industrials are down almost 3%. London's FTSE in the CAC 40 in Paris up about 3% a piece. The DAX in Germany up 7%. We'll have the details when we do the numbers. We strive here at Marketplace not just to keep you abreast of business and economic news, but ahead of it. Thus, we turn now to the updated read on fourth quarter gross domestic product that we're going to get tomorrow. Gdp, of course, the sum and total of economic activity, which last we heard had the American economy growing at an annualized rate of 2.3%. Consumers obviously responsible for most of that. But you know what else spends money? The government spends money. And government spending, as perhaps you've heard, has fallen out of official favor. Marketplace's Justin oh has more now on what could happen to economic growth when the government cuts spending.

[Neil Irwin]

Economists use a pretty simple formula to calculate gdp, says Ann Villemill, an economics professor at the University of Iowa.

[Stacey Vanek Smith]

It is represented by C +I +G +A NX.

[Neil Irwin]

C is consumer spending. That's most of it. I is investment. NX is net exports, otherwise known as the balance of trade. And G is government spending, specifically discretionary government spending.

[Stacey Vanek Smith]

The military, they buy airplanes and ammunition, infrastructure projects, roads, airports, things like that, housing assistance, general science, space.

[Neil Irwin]

This kind of spending at the federal level amounts to about 6% of GDP. Ernie Tedeschi, Director of economics at Yale University's Budget Lab, says, imagine you were to cut discretionary spending in half over the next year. That would mechanically reduce GDP by 3%. That's a substantial reduction in GDP growth. To be clear, Tedeschi says, cuts of that size are extremely unlikely. It's not even clear the Trump administration can even find that much discretionary spending to cut. But Tedeschi says any cuts have effects on economic growth that reverberate over time.

[Colin Rysdal]

You lose out on the gains not.

[Neil Irwin]

Just in year one, but in every year subsequently because you, you know, you didn't invest as much to begin with. Government spending cuts also have knock on effects in other parts of the economy. Guy lebane, chief fixed income strategist at Janney Montgomery Scott, says they could also affect the I component of GDP investment. That's because government spending can ensure that there's demand for what private companies sell.

[Stacey Vanek Smith]

And then you can take more risks in expanding and growing and investing in the real economy.

[Neil Irwin]

Labas says cuts to government spending also affect the biggest component of gdp, c consumer spending. If the government lays off a lot of workers, for instance, that's reduced spending.

[Stacey Vanek Smith]

Power within the U.S. economy.

[Neil Irwin]

And that means the individuals and businesses that serve those employees have reduced capacity.

[Stacey Vanek Smith]

They might even institute some layoffs as a result.

[Neil Irwin]

Labas says that's why even small cuts to government spending can spiral. I'm Justin Ho for Marketplace.

[Colin Rysdal]

There's a lot of uncertainty in this economy right now. All you have to do is look around. Tariffs, inflation, whatever's happening with how the government manages this economy, it's a lot. And that uncertainty shows up in all kinds of ways. For us today, it's the bond market, safe haven of choice for investors the world over. The US treasury market has been thought of for decades now as a steady, predictable, no muss, no fuss kind of place for people to put their money. But that is starting to change a little bit. So we sent Stacey Vanek Smith to get the Scoop.

[Stacey Vanek Smith]

It is 17 degrees in New York and the wind is soul crushing. So the place I'm dragging, economist Alison Schrager is a little bit unusual. So how do you feel about getting ice cream in February?

[Colin Rysdal]

As I said, I'm not sure this would be my first choice.

[Stacey Vanek Smith]

Luckily, Schrager follows the bond market at the Manhattan Institute. And the particular ice cream shop we're visiting has a lot in common with the bond market right now. For real. Oh, here we are. Surprise Scoop. Surprise Scoop bills itself as the world's first ice cream roulette shop. It's an empty room with white walls and a purple floor and nobody greeting you. Just some very loud music and some very big touchscreens on the wall.

[Colin Rysdal]

Okay. Do you want me to read this?

[Stacey Vanek Smith]

Yes, please.

[Colin Rysdal]

Okay.

[Stacey Vanek Smith]

Welcome to Surprise Scoop.

[Neil Irwin]

All flavors are randomly selected. No flavor choosing allowed.

[Stacey Vanek Smith]

No refunds or exchanges. We keep it here at Surprise Scoop. You order A scoop of ice cream on the touchscreen. You pay 10 bucks and a worker you never see picks your flavor. The customer has no say at all. I read that one of the flavors is pickle.

[Neil Irwin]

Ooh.

[Stacey Vanek Smith]

And if you hate what you get, you are in a pickle according to the disclaimer. Oh, you have to consent. What if I don't get the ice cream flavor I want? Sorry.

[Neil Irwin]

Please try again.

[Stacey Vanek Smith]

In all seriousness, we're all taking a risk here. Risk. Now, here's where ice cream roulette brings us back to the bond market. So bonds are just little loans you give the government. You buy a bond for four weeks or two years or 10 years, and when that time is up, the government pays you back plus a set amount of interest. So buying a bond is a lot like how you would usually go for ice cream. You pick your flavor, you pay, you enjoy a nice, predictable payoff.

[Neil Irwin]

US Government debt is by far the safest investment one can make in a portfolio.

[Stacey Vanek Smith]

Mike Kudzel is a portfolio manager at Pimco, one of the biggest investment firms in the world. He says that safety is exactly why investors and governments snap up billions in US Government bonds every week.

[Neil Irwin]

In the world of investing, we think the US Government is as risk free as it gets.

[Stacey Vanek Smith]

But the bond market has been on a slightly rockier road lately, says Alison Traeger. And that's partially because inflation is back inflation. So say you buy a two year government bond for 100 bucks and at the end of that time the government will pay you back your $100 plus, plus $5 of interest. But let's say during those two years, inflation spikes. By the time you cash out, your 105 bucks can't buy as much. Essentially, you lost money on your bond investment. 102 for Stacy back at Surprise Scoop, our order is up. There's a little secret opening in the wall. And a hand suddenly pokes out of it holding our dish of mystery ice cream. The ice cream is white and covered in sprinkles. So enough of this bond talk. It is time to dig in.

[Neil Irwin]

I'm not sure what flavor it is. It's something exotic. It's like coconut.

[Stacey Vanek Smith]

It's like durian or something.

[Colin Rysdal]

I have no idea what this flavor is. I don't think I like it.

[Stacey Vanek Smith]

It's weird. Weird. Not the experience one hopes for when going for ice cream or buying a bond. But with inflation worries, there is a rising risk that the trusty plain vanilla return investors count on with bonds will end up being more of a coconut durian mystery flavor situation. So for the past couple years, to attract investors, the government has been having to pay a higher interest rate or yield on its bonds, and those rates have gotten pretty high, says PIMCO's Mike Kudzell.

[Neil Irwin]

Just looking at the bond market, it's definitely more excitement than there has been in a very long time. Those are very attractive returns with a lot less risk than other markets.

[Stacey Vanek Smith]

So where our $100 bond was paying out $105 after two years, now the government is having to pay out more, say $110. A sweet deal for investors, but a bitter pill for the government. It's having to pay those higher interest rates, says Schrager. It's a very big deal.

[Neil Irwin]

We're running up a lot of debt, and debt service payments are becoming an increasingly large part of our budget. So if they go up even more, it just eats into the budget. We have less money for other things.

[Stacey Vanek Smith]

Recently, the government has gotten a break. Bond market roulette has struck again. Right now, investors are worried that tariffs and other economic forces could slow the U.S. economy. The result? They have been flocking to bonds. And higher demand means the government can pay lower interest rates on those bonds because in spite of all the worries about inflation, bonds are still seen as the safest investment on earth. In tough times, stocks or crypto can lose a lot of their value overnight. But with U.S. bonds, the only real worry is that by the time you get your money back, it won't be worth quite as much, which isn't the worst thing. Kind of like getting an ice cream flavor you don't love.

[Neil Irwin]

I mean, I'm still eating it.

[Stacey Vanek Smith]

Me too. I mean, at the end of the day, even if it's like not the best ice cream, it's still ice cream. Yeah, financial risk, just like ice cream roulette is always relative. In New York, I'm Stacey Vanek Smith for Marketplace.

[Colin Rysdal]

Love Stacy, though I do not Great ice cream is not great ice cream. Don't eat it if you don't eat it. But if you need something from us and you miss it on the radio, we've got a podcast. Check it out, marketplace.org or the platform of your choice. Follow us there. Coming up, People like to sometimes touch.

[Neil Irwin]

And see the things that they're buying.

[Colin Rysdal]

Can't squeeze an avocado on instacart is all I am saying. First though, let's do the numbers. Dow Industrials down 188 today four 10%. 43,433. The Nasdaq added 48 points about a quarter percent. 19,075 the S&P 500 basically flat 59 and 56. The market's eyes have been focused on Nvidia. We told you that earlier this week, which beat analysts expectations when it reported reported earnings after the market closed today. During the session, Nvidia up 3 and 7, 10%, up another 2% after hours. Broadcom up about 5.1%. Intel lifted 2.3% Bitcoin today, about $85,000 per down from its high of 107. Told you that so I can tell you this. Coinbase global trading Exchange for crypto up 2.10percent today. PayPal, which does allow users to buy and store cryptocurrencies, down 2.7%. Bonds up yield on the 10 year t note farther down 4.25%. You're listening to Marketplace. This is Marketplace. I'm Kai Rysdal. President Trump held his first official cabinet meeting today, during which, among many other things, he confirmed that Volodymyr Zelensky is going to visit the White House on Friday to sign that big minerals deal that's been in the news the past couple of weeks. Specifically, and this is according to the Ukrainians, that in exchange for American help in getting security guarantees from third countries, Kyiv would give the United States 50% of the proceeds from Ukrainian state owned mineral sales. That is the proceeds, but not the New York Times reports, the minerals themselves, rare earths in particular, critical, as you've heard, to all kinds of cutting edge technologies as marketplaces. Sabri Benashore reports the US private sector and the federal government have been working to develop an independent supply chain for those minerals. Rare earth elements have names like gadolinium and lutetium and they're in the part of the periodic table where things get weird. They have special electric and magnetic properties. Ernest Scheider is reporter for Reuters and author of the book the war below.

[Stacey Vanek Smith]

And two of them, two of those 17 are called neodymium and praseodymium and.

[Colin Rysdal]

They'Re used to make magnets, the strongest permanent magnets on earth. Two coffee mug sized magnets like these could crush the bones of your hand in the blink of an eye. And they are critical to the US's economic future.

[Stacey Vanek Smith]

The thing that makes our cell phones vibrate, the thing that makes a electric vehicle move, is a rare earth magnet.

[Colin Rysdal]

China produces 90% of the world's refined rare earths.

[Neil Irwin]

China is the big dog.

[Stacey Vanek Smith]

They are going to be the big.

[Neil Irwin]

Dog for many, many years.

[Colin Rysdal]

Curtis Moore is a senior vice president at Energy Fuels, a major uranium producer.

[Neil Irwin]

In the US they have invested heavily.

[Colin Rysdal]

There's a lot of government support for.

[Neil Irwin]

Their rare earth industry.

[Colin Rysdal]

This has presented a problem for the U.S. says Scheider.

[Stacey Vanek Smith]

China has been using its ability in this space as an economic weapon.

[Colin Rysdal]

It's restricted the supply of critical minerals before, and it's considering doing so again. So the US has been trying to get its own rare earth supply chain off the ground. We are really on The Verge @MP Materials of restoring the full rare earth supply chain in the United States. Matt Sloester is head of corporate affairs at MP Materials, which owns the Mountain Pass Rare Earth mine in California. It's the largest mine focused on rare earths in the world. So now we can extract the material, we can process the material, and then we can refine it into a usable form factor. MP Materials has also built a magnet manufacturing facility in Texas. Energy Fuels, the uranium miner, has also begun refining a growing list of rare earths. But once the US has passed the technical challenge, there's the economic one. China produces very cheaply, but US Costs have gone up. Chris Barry is president of House Mountain Partners. Because of inflation throughout the economy, the cost of capital of these domestic mining and metals projects has risen rather dramatically, upwards of 30%. Finally, Barry says tariffs have thrown in an element not on the periodic table, the element of uncertainty. In New York, I'm Sabri Benishore for Marketplace. One more item from that Cabinet meeting that's in our wheelhouse. The president was asked about tariffs on Canada and Mexico, which he said two days ago would start next week, March 4th. Today, he said, and here I quote April 2nd for everything. Stay tuned. A whole lot of things changed in this economy in early 2020. The labor market, supply chains, grocery shopping, too. When so many of us started ordering online to get things delivered right to our doorstep, Instacart was in a perfect position to capitalize on that pandemic moment. And it did. But fast forward to today and the company's outlook is, well, not so great. In its earnings call this week, Instacart reported lower revenue than expected and worse said there's going to be a slowdown in growth in the coming quarter. So half a decade on from the start of the pandemic, Daniel Ackerman has more on the prospects for the grocery delivery business.

[Neil Irwin]

Instacart sales quadrupled in the first year of the pandemic for obvious reasons. And while many shoppers returned to grocery stores in person, online ordering has held its own in the last five years. There has been growth consistently across the period, but it has come in fits and starts. Neil Saunders is managing director at Global Data, and he says in theory there is still plenty of headroom for grocery delivery.

[Colin Rysdal]

Grocery is still one of the lower.

[Neil Irwin]

Penetrated categories within retail for online purchasing, but realizing that growth could be hard, says Saunders, not least because grocery stores are some consumers happy place. People like to sometimes touch and see the things that they're buying, but also if they're buying something for a meal in an evening, they often like to see what's available.

[Colin Rysdal]

They want the inspiration of buying in stores.

[Neil Irwin]

Grocers like Kroger and Walmart are building out their own delivery services.

[Colin Rysdal]

So Bobby Gibbs, a retail consultant at.

[Neil Irwin]

Oliver Wyman, says, it's a crowded market. You're seeing more competition as a lot of the rideshare services have moved more into grocery fulfillment. Then there's inflation, which is once again changing which products we buy, says Sucharita Kodali, a retail analyst at Forrester.

[Stacey Vanek Smith]

One of the biggest signals of inflation these days is eggs. Eggs and actually steak too. And those are two categories which are fairly inelastic in demand, meaning people will.

[Neil Irwin]

Buy their steak and eggs anyway, but.

[Stacey Vanek Smith]

When they do, there's sticker shock. And that I think necessarily has an adverse impact on adding other items to your cart.

[Neil Irwin]

Instacart did report consumers are spending a bit less per order on average, and Kodali says this all speaks to something broader, something we've been hearing about in survey after survey lately.

[Stacey Vanek Smith]

Just general consumer malaise.

[Neil Irwin]

Kodali says pulling back on services like grocery delivery could be a theme in the year to come. I'm Daniel Ackerman for Marketplace.

[Colin Rysdal]

This final note on the way out today, in which I kind of get it, but I don't really get it saw this in Bloomberg that more than a billion people are watching podcasts on YouTube every month. They are watching podcasts. First of all, if you're watching a podcast, is it even a podcast anymore? But also, am I the only one who listens listens to podcasts when I'm walking the dog or working out or cooking or whatever? Wait, don't answer that. YouTube, by the way, says it was a pandemic thing. That's when people started watching podcasts also. Hey you kids, get off my lawn. Sorry. Our media production team includes Brian, Allison, Jake, Cherry, Jess and Dueler Drew Jostad. Gary O'Keefe, Charlton Thorpe, one Carlos Tirado and Becca Weinman. Jeff Peters is the manager of media production. I'm Kyle Rysdal. We will see you tomorrow, Everybody. This is APM. Consumer confidence had its sharpest monthly decline.

[Stacey Vanek Smith]

Since 2021, which means we're all in our feels about money. And while uncertainty is the only constant these days, it's also a great reason to get serious about understanding personal finance.

[Colin Rysdal]

I'm Janelie Espinal, host of Financially Inclined.

[Stacey Vanek Smith]

A podcast from Marketplace that makes learning about money simple. Learn about practical skills like negotiating job offers, dealing with money and friendship and love, entrepreneurship and student loans. Get serious about your money and build a life you've always dreamed of. Listen to Financially Inclined wherever you get your podcasts.