Time to buy a car?

Summary

Marketplace Podcast Summary: "Time to Buy a Car?"

Release Date: December 25, 2024

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1. Holiday Inventory Management and Tariff Concerns

The holiday season typically brings predictable patterns in inventory and consumer spending, providing relief to businesses stabilizing after pandemic-induced disruptions. However, looming tariffs present new challenges.

• Inventory Stability: Retailers began stocking holiday merchandise in mid-October, aligning with normal seasonal trends. Consumer spending in November reflected strong sales, as reported by the Bureau of Economic Analysis.

• Expert Insights:

  • Jason Miller, Professor of Supply Chain Management at Michigan State University, highlighted that major retailers like Walmart, Target, and Costco effectively manage inventory through strategic discounts. He emphasized, “It's great that a lot of businesses aren't hoarding inventory since that can be costly because you're not turning it through as quickly” (01:46).

  • Zach Rogers, Professor of Supply Chain Management at Colorado State University, observed an uptick in inventory stocking ahead of potential tariffs on Chinese imports. He noted, “I first noticed the pickup around mid-December, around five or six weeks after the election” (01:57).

• Economic Implications: Higher interest rates increase the cost of holding inventory, while rising warehousing and trucking costs may compel businesses to pass expenses onto consumers. However, Miller cautioned that consumers are “tired of prices going up” (02:54), limiting the ability to shift costs.

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2. Surge in Car Sales Amid Economic Shifts

Amid fluctuating economic conditions, the automotive market is experiencing increased activity, making now a favorable time to purchase a vehicle.

• Current Market Trends:

  • Samantha Fields, Marketplace reporter, reported that car inventories have rebounded, leading to more incentives and discounts from dealerships. Patrick Olson at Carfax mentioned, “New car prices, which had been falling, have ticked up slightly in the last couple of months” (04:44).

  • Jason Miller attributed the rise in car sales to lower prices and the replacement of vehicles damaged in recent hurricanes, stating, “There's been a lot of people who've been waiting on the sidelines, and we've just hit a threshold now where a certain amount of them finally got off the bench and came into the game” (05:10).

• Consumer Incentives:

  • Dan Ives at Wedbush Securities discussed the impact of potential policy changes on electric vehicle (EV) tax credits. Samantha Fields noted that anticipation of the removal of a $7,500 tax credit under the incoming administration is driving early purchases (05:50).

• Market Dynamics: The combination of competitive pricing, reduced inventory periods, and strategic incentives is fostering a buyer-friendly environment. Carl Brower at IC Cars believes that current prices represent a “good time as any to buy” (06:02).

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3. Corporate Credit Card Misuse and Fraud

As the year-end approaches, companies scrutinize their financials, uncovering misuse and fraud related to corporate credit cards.

• Fraud Incidence:

  • Callum Borchers, Wall Street Journal columnist, discussed the rise in corporate card fraud. Enhanced detection software, partly driven by advancements in artificial intelligence, is identifying more fraudulent activities, though it's unclear if actual fraud is increasing or detection methods have simply improved (07:43).

• Examples of Misuse:

  • Borchers provided instances ranging from minor infractions, such as expensing personal outings as business dinners, to more egregious attempts like trying to expense an RV for extended hotel stays. He remarked, “This really just shows you the range of things that people will try to slip through on the company dine sometimes” (08:25).

• Impact on Businesses:

  • Borchers highlighted that fraud can cost businesses up to 5% of their revenue annually. Small businesses are particularly vulnerable, with instances where fraud forced owners to cover significant financial losses, such as a $50,000 fraud case requiring the owner to forgo his salary to stabilize the company (09:31).

• Preventative Measures:

  • Enhanced software tools and the need for diligent auditing are critical. Borchers emphasized, “You really need that extra set of eyes to say, hey, does this look suspicious?” (10:44). Real-time fraud detection features offered by card issuers are becoming increasingly vital for businesses to mitigate losses.

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4. Christmas Season Numbers and Economic Indicators

During one of the busiest travel seasons, various economic indicators provide insights into consumer behavior and market trends.

• Travel Statistics:

  • North Carolina ranks second in Christmas tree production with Fraser firs, while Oregon leads with 4.7 million trees annually.
  • The TSA reported 39 million travelers through security checkpoints, a 6% increase from 2023. However, 90% of these travelers will reach their destinations via roadways, totaling 107 million people (13:09).

• Energy Prices:

  • Gas prices rose by 2 cents, averaging $3.04 per gallon. For EV drivers, the average cost is 34 cents per kilowatt-hour at public charging stations (13:09).

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5. Evolution of "Skip the Line" Passes in Tourism

The trend of "skip the line" passes is transforming the tourist experience, especially in high-traffic destinations like Disney parks.

• Consumer Adoption:

  • Douglas Quimby, CEO of Arrival, noted that over half of ticketed tourist attractions now offer skip-the-line options, with an additional 18% considering them for the next year. This reflects a significant shift towards accommodating affluent travelers who seek premium experiences (15:27).

• Market Dynamics:

  • Jason Miller explained, “There's a subset of travelers. It represents about a fifth of all travelers. We define them as the affluent travelers, as household income of at least $150,000” (16:29).

• Industry Impact:

  • Travel agents like Alyssa Geder at Magical World Vacations optimize offerings based on these higher-tier services, catering to clients who prioritize efficiency and exclusivity in their travel plans (17:01).

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6. The Emerging Breakup Recovery Industry

The personal turmoil of breakups is giving rise to a burgeoning industry aimed at aiding individuals through relationship dissolution.

• Industry Growth:

  • Jennifer Wilson, staff writer for The New Yorker, explored the expansion of services such as breakup coaches, specialized diets, and retreats designed to help individuals recover from heartbreak.

• Consumer Services:

  • Julie, a contributor, recounted her personal experience leading to the discovery of various breakup support services. She detailed offerings ranging from one-on-one coaching to luxury retreats costing upwards of $3,000 for a weekend stay (21:07).

• Target Demographics:

  • These services predominantly target college-educated, upper-middle-class individuals. The industry's growth is driven by higher rates of cohabitation and non-marital relationships, increasing the incidence of breakups (22:20).

• Market Drivers:

  • The conceptualization of breakups as traumatic events has fueled demand. The integration of trauma-informed interventions aligns with contemporary understandings of mental health, further legitimizing and expanding the market for these services (23:10).

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7. Holiday Shopping and Consumer Spending Predictions

As the holiday season winds down, consumer spending remains robust, driven by gift card usage, returns, and promotional sales.

• Spending Projections:

  • The National Retail Federation (NRF) forecasts holiday spending to reach a record $989 billion, with 71% of consumers planning to engage in last-minute shopping activities (14:56).

• Retail Strategies:

  • Businesses are leveraging the sustained consumer interest to maximize year-end sales, capitalizing on the momentum generated by earlier holiday shopping trends.

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Conclusion

This episode of "Marketplace" delved into diverse economic and business topics relevant to the holiday season. From inventory management amidst tariff uncertainties and a thriving car market to corporate credit card fraud and the rise of specialized consumer services, the discussions provided comprehensive insights into current economic dynamics. Additionally, the exploration of consumer spending behaviors and emerging tourism trends underscores the multifaceted nature of today’s economic landscape.

Notable Quotes:

• Jason Miller on inventory management: “It's great that a lot of businesses aren't hoarding inventory since that can be costly because you're not turning it through as quickly” (01:46).
• Zach Rogers on tariff-induced inventory: “I first noticed the pickup around mid-December, around five or six weeks after the election” (01:57).
• Samantha Fields on car market incentives: “There are a lot of incentives these days, like lower interest rates on car loans than you could get from a bank” (04:31).
• Jason Miller on car sales surge: “There's been a lot of people who've been waiting on the sidelines, and we've just hit a threshold now where a certain amount of them finally got off the bench and came into the game” (05:10).
• Callum Borchers on corporate fraud detection: “You really need that extra set of eyes to say, hey, does this look suspicious?” (10:44).
• Julie on breakup recovery services: “I just kind of googled breakup plan because she said it with such authority” (19:59).

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This summary encapsulates the key discussions and insights from the "Marketplace" episode "Time to Buy a Car?" ensuring clarity and comprehensiveness for listeners and non-listeners alike.

Transcript

[Kimberly Adams]

Retailers are making their lists and checking them twice, trying to find out just how much inventory they should stockpile ahead of the next administration. From American Public Media, this is Marketplace in Washington. I'm Kimberly Adams in for Kai Ryssdal. It's Christmas Wednesday, December 25th. Good to have you along. The holiday shopping season has been, by several measures, a pretty normal one. Businesses started bringing in their holiday inventory in mid October, according to the most recent Logistics Managers Index, and consumers bought a lot of that inventory in November, according to spending data out last week from the Bureau of Economic Analysis. These normal seasonal patterns are a big relief for businesses, since many have spent the last few years trying to get rid of excess inventory they built up early in the pandemic. But the prospect of additional tariffs in the coming year could cause many businesses to start building up their inventories again. Marketplace's Justin Ho has more on what's at stake.

[Justin Ho]

The kind of businesses that have made the most progress bringing inventories back to normal levels are big consumer facing retailers.

[Jason Miller]

So what we call general merchandisers, your Walmarts and your targets of the world and Costcos.

[Justin Ho]

That's Jason Miller, a professor of supply chain management at Michigan State University. He says many big retailers use discounts to get rid of their extra goods, and consumer spending has been pretty strong. Miller says it's great that a lot of businesses aren't hoarding inventory since that can be costly because you're not turning.

[Jason Miller]

Through your items quite as quickly. And also the longer it takes you to sell something, the more likely it is to get damaged or, you know, just essentially go obsolete and lose value.

[Justin Ho]

That said, there are signs that importers are bringing in extra inventory ahead of any new tariffs on imports from China, says Zach Rogers, a professor of supply chain management at Colorado State University. He says he first noticed the pickup around mid December, around five or six weeks after the election. And to me that suggests that now.

[Jason Miller]

Because we're worried about tariffs, a lot of inventory is getting pulled forward maybe.

[Justin Ho]

A little earlier than than would be expected, Rogers says. If that continues, businesses might have a harder time holding extra inventory than they did a few years ago. For one, interest rates are higher, which makes it more expensive to buy inventory. And if all that hoarding pushes up warehousing costs or trucking costs, importers would have to decide whether to pass those costs on. The consumers and consumers are very sensitive to costs. And so it's going to be more difficult for importers to just slap those costs to a consumer base that honestly.

[Jason Miller]

Is tired of prices going up.

[Justin Ho]

Some businesses might decide that the cost of extra inventory is worth it. Jason Miller at Michigan State University says if a smaller wholesaler, for instance, needs to stock a good that could be hit with President elect Trump's proposed 60% tariff on Chinese imports, it may make.

[Jason Miller]

Sense to order an entire year's worth ahead of time in order to get that product in and not pay 60% more for that.

[Justin Ho]

Meanwhile, Miller says, big retailers might choose to keep their inventories low and simply pass the cost of any tariffs onto consumers. I'm Justin Ho from Marketplace.

[Kimberly Adams]

Markets were closed for the Christmas holiday today, but don't worry, we'll still have some numbers for you. Like Justin was just saying, figuring out what consumers are willing to buy and when and at what price matters a lot for businesses and for the broader economy, about two thirds of which is just consumer spending, which was up again last month, along with retail sales driven largely by an increase in car sales. Marketplace's Samantha Fields has more.

[Samantha Fields]

Now is actually a decent time to buy a car if you're in the market for one.

[Julie]

There's a lot more inventory than there was in the last several years.

[Samantha Fields]

Patrick Olson at carfax says if you're considering a new car, many dealerships are also offering incentives these days, like lower interest rates on car loans than you could get from a bank and straight up discounts in some cases.

[Julie]

A lot of dealers have a lot of cars that they want to move. This is the time of year to get rid of the 24s and make room for the 25s.

[Samantha Fields]

There's evidence more people have been buying cars lately in that most recent retail sales and consumer spending data. And in addition to that, Carl [e-mail] says new car prices, which had been falling, have ticked up slightly in the last couple months. And the average number of days new cars are on the lot has dropped a little.

[Jason Miller]

So that shows an increase in demand and the cars are moving quicker.

[Samantha Fields]

There are two main factors he says are likely driving this increase in demand for cars new and used.

[Jason Miller]

I suspect it's a combination of the prices finally hitting a level that people feel more willing to make a purchase, as well as some replacement of vehicles damaged in the recent storms.

[Samantha Fields]

More than 340,000 cars were badly damaged or destroyed this fall in hurricanes Milton and Helene, according to carfax. And many people are looking to replace them. And then there's the expectations game. Dan Ives at Wedbush securities says when it comes to electric cars in particular.

[Justin Ho]

Everyone knows that that tax credit's gonna.

[Julie]

Get pulled once Trump gets in office.

[Samantha Fields]

If you buy an EV right now, you can get a $7,500 tax credit for many models. But Trump has indicated he might get rid of it.

[Justin Ho]

So you're seeing some buying in anticipation.

[Samantha Fields]

Of that, and he says you're also seeing some people buying in anticipation of possible tariffs, which could drive car prices back up. But more than anything, Carl Brower at IC Cars says he thinks people who've needed cars for a while have noticed prices are down and realize this is probably as good a time as any to buy.

[Jason Miller]

There's been a lot of people who've been waiting on the sidelines, and we've just hit a threshold now where a certain amount of them finally got off the bench and came into the game.

[Samantha Fields]

To buy a car because they couldn't afford to wait any longer. I'm Samantha Fields for Marketplace.

[Kimberly Adams]

As we wind down the year, many companies are trying to close out their books and figure, figure out their own spending for the year, some of which may kind of depend on you and just how you've used your company credit card, if you have one. If you do, it's probably for things like business trips, team lunches, project related purchases, things your boss would sign off on. But there are people out there who are using their corporate cards for slightly less business motivated buys or sometimes outright fraud. Here to chat about the use and misuse of company spending accounts is Callum Borchers. He's a Wall Street Journal columnist. Callum, welcome to the program.

[Jason Miller]

Glad to be with you.

[Kimberly Adams]

So what even got you looking into this?

[Jason Miller]

You know, I had done a story earlier this year about companies sort of cracking down on what some of us think of as kind of like small, persnickety company rules. And what came up a lot in those conversations was, hey, there's also big stuff, by the way, including corporate count fraud. And so I sort of got working on this with the question of is this going up or down? And the answer is it appears to be going up, although we can't be certain. The twist on it is that the software detection has gotten so much better. Right. This is one of the many side effects of artificial intelligence. And so firms are catching more shenanigans than they did in the past.

[Kimberly Adams]

So give us some examples that you heard about as you were doing this reporting of the kind of fraud companies are seeing on these corporate cards.

[Jason Miller]

You know, it really runs the gamut from little stuff to big. So, I mean, on the smaller side, it might be, hey, I'm gonna put date night on the company credit Card, right. And try and pass off this outing with my spouse as a business dinner. I got a chuckle out of a story about somebody who had been working in an office where they had free coffee every day. And then when he went to work from home, he figured, well, I'm still entitled to my free coffee. So he started expensing his daily Starbucks run, including the mileage from his home to the coffee shop, which I thought was really next level. But then you also get some really outlandish cases, right? Like somebody tried to expense the purchase of an rv. I was like, how on earth does that happen? Well, SAP concur explained to me this was a case where somebody was going to be on a six month extended assignment and tried to say, well, you know, six months in a hotel room gets kind of expensive. It would actually be more cost effective to just buy me a recreational vehicle. That one got declined. But it really just shows you the range of things that people will try to slip through on the company dine sometimes.

[Kimberly Adams]

Right. And you know, you report that a lot of these people just figure it's not that big, big of a deal. But how much of an impact is this having on businesses?

[Jason Miller]

Well, the best estimate is that fraud of a range of types can cost businesses 5% of revenue over the course of a year, which is not nothing, right. I mean that can be real dollars. And of course a lot of it depends on the scale of the company. Smaller businesses I think are really the ones that, that run the risk. You know, I was thinking of a conversation I had with James Toms, who has a fire protection company called Telgen. It's a decent sized firm now, but he said when we were just start in the 90s, you know, we had a fraud case that really was a big problem for us. It was about $50,000, which may not sound like a lot, but for a company our size, it was a big problem to the point where he decided to forego his own salary, you know, for several months to try to dig the company out of the hole. And so, you know, his point, his plea basically to other small business owners was just bite the bullet and get that outside accountant to audit your books. I know you want to save money on, on that bill, but the cost of the fraud could be even bigger than the accounting tab.

[Kimberly Adams]

So other than having, you know, an accounts payable department kind of going through all this and auditing, what sorts of tools and recourse do companies have to fight back against this?

[Jason Miller]

Well, the software that they're using is getting ever More sophisticated. But the bookkeeping tools that every company uses can only go so far. You really need that extra set of eyes to say, hey, does this look suspicious? And try to suss it out. They try to make a game out of it. At SAP, they have unofficial quarterly awards for the, for the auditors who catch the most outlandish expenses. I think one of the things that is interesting now is sort of the real time nature of trying to catch expense fraud. Right. Because typically it's really hard to recoup that money if the purchase is already made. There are things that card issuers are offering now as additional features to employers because they're mindful that this is a really in demand thing for, for companies right now. They do not want to be bamboozled and they feel like they can't afford to be.

[Kimberly Adams]

There was one example you include in your piece about somebody who tried to expense makeup and her argument was that, you know, she has a customer facing job and the company didn't want to pay for that. But how much of this spending is actually speaking to maybe a bit of a disconnect between what employees feel like they need to do their job that they feel like should be covered expenses versus what work actually provides.

[Jason Miller]

There is sometimes actually a blurry line between what is a personal expense and what's legitimate business expense. And so sometimes companies policies are not super clear or sometimes they're just so voluminous that it can be hard for employees to, you know, figure out what, what is allowable and what is not. Roughly 1 in 10 of these expenses are not compliant when employees submit them. And a lot of that, I'm told, is not because it's some, you know, nefarious attempt to scam the company. It's often just because people aren't familiar with what the, the policies are, what, what am I allowed to put on the cart and, and what is over the limit and what is actually a prohibited category.

[Kimberly Adams]

Callum Borchers is a columnist at the Wall Street Journal. Thank you so much.

[Jason Miller]

Glad to be with you. Thanks.

[Kimberly Adams]

Coming up, I came to this story.

[Julie]

Through personal experience, the business of breakups.

[Kimberly Adams]

But first let's do the numbers. The markets are closed today for the Christmas holiday. So let's look at some other numbers. Yesterday we had a story about the ever popular Fraser fir sold as Christmas trees in North Carolina. That State is number two for Christmas tree production. Oregon is number one, producing some 4.7 million trees each year. We're in the middle of the winter's biggest travel season with TSA already reporting some 39 million people traveling through security checkpoints. That's up around 6% from 2023. But according to AAA, nearly 90% of travelers will get to their destination on the roads this season, or 107 million people. The national average for a gallon of gas rose 2 cents to land at $3.04. And for EV drivers, the average for a kilowatt hour of electricity at a public charging station is 34 cents. You're listening to Market.

[Julie]

Hi, this is Julie from Centennial, Colorado. I listen to Marketplace. On my drive home from all my 3 to midnight ER shifts. Kai and the gang keep me awake and interested for my 30 minute drive. For someone not in the financial field, it's a fantastic synopsis of all things business and economics. I love the commitment to showcasing a steady stream of brilliant and articulate women who are experts in their field. Join me in supporting Marketplace with a gift today. Go to marketplace.org donate.

[Kimberly Adams]

This is Marketplace. I'm Kimberly Adams. Like we said in the numbers, this is one of the busiest travel times of the year, with people visiting, family and some going on vacation. Two of the biggest destinations for that are Disneyland and Disney World, and the parks offer a bunch of skip the line passes, including a new one launched earlier this year for several. On top of the price of a park ticket, you can skip the line on just about any ride. Disney's not the only place selling line skips. It's a trend that's creating a different consumer experience if you can afford it. Marketplace's Sean McHenry reports.

[Douglas Quimby]

When Melissa Holguin bought her first ever skip the line tickets a little over a year ago, it was kind of a happy accident.

[Kimberly Adams]

We traveled to Europe and the Vatican tickets, the regular ones, were sold out. And the only option, well, one of the options was breakfast and skip the line, which added significantly to the costs.

[Douglas Quimby]

They were about $70 US per person. For comparison, regular entry tickets were around $20. In return, they could get into the Vatican Museum's and Sistine Chapel an hour before everyone else, and that extra hour came with zero buyer's regret.

[Kimberly Adams]

So it was really nice to be.

[Julie]

Able to see all of the artwork.

[Kimberly Adams]

The whole way and all the sculptures without really a lot of congestion. We just kept saying thank goodness we.

[Jason Miller]

Did this skip the line and VIP experiences within travel has been growing quite significantly over the past several years.

[Douglas Quimby]

Douglas Quimby is the CEO of the travel research firm Arrival. In a survey this year, they found that over half of ticketed tourist attractions offered some kind of skip the line which makes sense to him.

[Jason Miller]

There's a subset of travelers. It represents about a fifth of all travelers. We define them as the affluent travelers, as household income of at least 150,000. You know, this is a just a subset of travelers as well that have been less impacted by inflation. So they're continuing to travel, they're continuing to spend.

[Douglas Quimby]

Last month, airline prices were up almost 5% and hotel prices over 3 and a half percent. That's according to the Bureau of Labor Statistics. Quimby says that the people who are the least affected by all that are the people being catered to.

[Jason Miller]

But there is also that risk of social, I don't want to say conflict, but maybe a friction because it does create different classes of travelers.

[Douglas Quimby]

For the people working in the travel industry, this is what they focus on and have built their businesses around.

[Kimberly Adams]

It is definitely one of the first things, if not the first thing, that clients ask when they reach out to me to start quoting and booking their trips.

[Douglas Quimby]

Alyssa Geder is a travel agent at Magical World Vacations. She also runs a TikTok account where she talks about planning Disney trips. She's part of Disney's earmarked program and is commissioned by Disney.

[Kimberly Adams]

There are so many different tiers and levels, so it's definitely gone from just like, oh, cool, look, we get to go through the fast lane too.

[Samantha Fields]

Now.

[Kimberly Adams]

It's like, okay, this is a deciding factor in our plans. Just as it is with, you know.

[Douglas Quimby]

Budget dining, hotel and that income level distinction. It factors into all that she does.

[Julie]

It's very funny when I explain this.

[Kimberly Adams]

Because it is a lot and I feel like I'm standing in front of like a, a cork board with, with yarn and all of these different things going in different directions.

[Douglas Quimby]

There's a good chance that line skipping offers are going to become even more common in arrival survey. On top of the 51% of attractions that already offer them, another 18% are thinking about adding them next year. I'm Sean McHenry for Marketplace.

[Kimberly Adams]

Even though the holidays are often about connection, at least some people may be spending this festive time of year nursing a breakup. Most of us will have at least one bad breakup in our lives. And while friends and family are often all too happy to step in with advice, sometimes the ice cream and sad music and purging of your ex's stuff isn't quite enough. But where some see heartbreak, others see a business opportunity. Jennifer Wilson is a staff writer for the New Yorker and documented the growth of the heartbreak recovery industry. Jennifer, welcome to the program.

[Julie]

Thanks for having me.

[Kimberly Adams]

So what led you down this rabbit hole of the breakup business?

[Julie]

I came to this story through personal experience. The beginning of the summer, I was dumped by text message by someone I was very, very excited about. You know, I just had dinner with a bunch of my friends and had told them all about him. And I was so excited. And so, you know, they were asking, of course, for an update, and I had to update them that he just wanted to be friends. And one of them asked me, you know, if I had a plan, if I had kind of like a breakup plan. And I wasn't sure what she was referring to, so I just kind of googled breakup plan because she said it with such authority. And, you know, I saw all of these worksheets and books and daily planners for helping you get through a breakup. And I discovered this world of breakup coaches, breakup dietitians. And then I found lots of retreats, kind of breakup themed vacations. And, you know, so I went to my, you know, heartbroken. I went to my boss and said, you know, why don't we send me to some of these luxury retreats and see. See what they're all about.

[Kimberly Adams]

So who exactly is getting targeted by some of these businesses?

[Julie]

That's a good question. And I mean, these businesses, there's a range like any industry, you know, there's this whole kind of sub market of breakup coaches who specialize in, quote, unquote, get your ex back. You know, they're teaching you things like how to manifest your ex back. They're charging quite a lot of money. You know, some of these one on one, get your ex back coaches are charging, you know, several hundred dollars for, you know, one on one session. So, I mean, frankly, you know, they're all targeting heartbroken people, broken people. In terms of the gender breakdown, some of these retreats focus on women. I went to a retreat in the Berkshires at the Kripalu Yoga center called Healing from Heartbreak that was focused on working with women. You know, I mean, I. So the short answer is everyone, and that's kind of why I was interested in this story, is because it's hard to think of a person who has. I mean, this market is huge. And so I wanted to sort of get in early and try to understand what. What's happening and who all the players are.

[Kimberly Adams]

And do you have a sense of how big this industry is, how much money is actually involved here?

[Julie]

You know, no one knows for sure. And what you include in that is hard, hard to say. But I think that the estimates for you know, it's been estimated that the divorce industry is worth, I believe, that number, 10 to 15 billion dollars. And as I say in the piece, you have more and more people choosing not to get married. You have more and more people cohabitating. So you're going to have more and more people going through, not divorces, but breakups. And so I think it's a growth market.

[Kimberly Adams]

Well, I was curious, have these kinds of businesses always been around or is there something new happening right now?

[Julie]

I think that, you know, none of the interventions that the people I spoke with are particularly new. But what I would say is new is the notion that a breakup could be considered traumatic. And so you're also seeing the rise of trauma that has just kind of entered the popular lexicon. And so I think there's more people who are trauma anxious. And so I think that that's also sort of fueling the rise of these retreats. And many of them talk about using kind of trauma informed interventions.

[Kimberly Adams]

And how much does one of these retreats cost?

[Julie]

That's a good question. And I mean, you know, I think earlier you had asked me, who are these programs targeting? I mean, it's important to note these are not cheap. A stay at the Heartbreak Hotel in England can run you around $3,000 for a weekend.

[Kimberly Adams]

Wow.

[Julie]

Yeah. So a number. Some of these breakup coaches can charge, you know, hundreds or, you know, thousands of dollars to work with them, depending on how many sessions you need. So this is something that is targeting college educated, upper middle class segment of the population.

[Kimberly Adams]

Jennifer Wilson is a staff writer for the New Yorker and her piece is called the New Business of Breakups. Thanks so much.

[Julie]

Thank you for having me.

[Kimberly Adams]

This final note on the way out today, the pressure of shopping for gifts might be over for many of us, but that doesn't mean holiday sales are letting up. According to the National Retail Federation, 71% of consumers plan to shop over this next week to use gift cards, return presents, or take advantage of sales and promotions. The NRF predicts holiday spending will reach record levels this year with consumers spending a collective $989 billion. Our media production team includes Brian Allison, Jake Cherry, Jessyn Dooler, Drew Jostad, Gary O'Keefe, Charlton Thorpe, Juan Carlos Tirado, and Becca Weinman. Jeff Peters is the manager of media production, and I'm Kimberly Adams. We'll see you tomorrow. Everybody, this is apm. Hi, this is Michael from Sinking Spring, Pennsylvania. Marketplace is both enjoyable and extremely informative. Kai and the reporters go out to all kinds of people in the community and they ask straight ahead questions like how are you holding up these days? It's very personal and as we listen we get a good sense of the challenges people face as they are trying to make it from day to day. I listen to the Marketplace podcast every day and have been doing so for a number of years. It's a breath of fresh air that helps me understand the economic world better. Join me by making a gift to marketplace at marketplace.org/donate.