Time to sell!

Summary

Marketplace Podcast Summary: "Time to Sell!" Release Date: February 14, 2025

Hosted by Kai Ryssdal, "Marketplace" delves into the pressing economic and business issues of the day, offering insights that are accessible to listeners without specialized backgrounds. In the episode titled "Time to Sell!", Ryssdal explores a range of topics from inflation dynamics and trade policies to housing market trends and global economic challenges. Below is a comprehensive summary of the key discussions, insights, and conclusions drawn during the episode.

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1. Understanding Inflation: Consumer vs. Producer Perspectives

The episode opens with an analysis of inflation, distinguishing between the Consumer Price Index (CPI) and the Producer Price Index (PPI). Ryssdal highlights that while the CPI remains "sticky" at 3% annually, the PPI saw an uptick of 4.10% from December to January, indicating persistent inflationary pressures at the wholesale level.

Key Insights:

• Justin Ho, Marketplace's reporter covering transportation and warehousing, discusses how rising PPI affects sectors beyond the volatile categories like fuel and food.

• Jason Miller, Professor of Supply Chain Management at Michigan State University, explains that price increases in transportation and warehousing often spike in January due to new yearly contracts but tend to stabilize thereafter. (02:29 - 02:57)

  "Historically, there's this big jump in January, and then things move much more slowly throughout the year." — Jason Miller [02:51]

• Zach Rogers, Professor at Colorado State University, attributes rising prices to increased demand as businesses stock up on inventory amidst concerns over potential new tariffs. (02:57 - 04:17)

  "More inventory is coming into the country in January, and we saw this in late December as well than we normally would have." — Kai Ryssdal [03:09]

• Sarah House, Senior Economist at Wells Fargo, provides a dual perspective, suggesting that while some consumer spending on durable goods signals confidence, it may also lead to a "steeper drop off later in the year." (03:27 - 04:17)

  "If it's a pull forward of activity, that just means we could see a steeper drop off later in the year." — Sarah House [03:56]

Conclusion: The interplay between CPI and PPI reveals complex inflation dynamics, influenced by both consumer behavior and wholesale pricing structures. Businesses navigating these changes must balance inventory management with rising operational costs.

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2. Trade Policies and Their Impact on Businesses

Ryssdal shifts focus to recent trade policy changes, notably President Trump's order to potentially raise import tariffs on a wide array of goods. This policy adds to existing tariffs on steel, aluminum, and goods from China, creating an uncertain environment for business owners.

Key Discussions:

• Grant Hennigan, owner of Veridian, a patio furniture chain, shares his proactive strategies to mitigate tariff impacts by sourcing from Indonesia and stockpiling inventory before the tariffs take effect. (05:34 - 08:39)

  "It is hard to make good decisions when the rules around you are changing." — Grant Hennigan [06:32]

• Daniela Velasquez de Leon, General Manager at Organix Unlimited, discusses the challenges faced by importers dependent on timely shipments from Mexico, emphasizing the risks of delayed tariffs on perishable goods like bananas. (06:37 - 08:39)

  "The math I've been doing... at some point, consumers will have to make up some of the cost." — Daniela Velasquez de Leon [08:39]

• Chip McElroy, CEO of McElroy Manufacturing, highlights the difficulties in sourcing specialized parts amid rising tariffs, pointing out the substantial costs associated with finding new suppliers and adapting manufacturing processes. (07:42 - 08:16)

  "It's not like going down to a local hardware store and looking to buy a screw. Those kind of... need to be built specifically for us." — Chip McElroy [07:56]

Notable Quote:

"The only people doing this [sourcing from Indonesia] create a lot of constraints on the supply chain." — Kai Ryssdal [06:10]

Conclusion: The evolving trade policies introduce significant uncertainty for businesses reliant on international supply chains. Companies must navigate increased costs, supply chain disruptions, and the challenges of adapting to new trade environments to maintain profitability.

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3. Housing Market Trends Amid High Interest Rates

The discussion transitions to the American housing market, where despite elevated mortgage rates averaging 6.87%, there is a noticeable uptick in home sales. Ryssdal explores the motivations behind sellers entering the market and the implications for inventory and pricing.

Key Insights:

• Guy Sakala, from Inside Mortgage Finance, observes that "impatient sellers" are motivated to sell despite high rates to capitalize on equity gains. (09:48 - 11:11)

  "Sellers are motivated, even in the face of high mortgage rates, to lock in the equity gains that they've earned." — Guy Sakala [10:53]

• Timothy Savage, from NYU's Shack Institute of Real Estate, explains that the surge in home listings, including record price cuts, reflects motivated sellers willing to accept minor losses to secure their investments. (09:58 - 11:05)

  "Homes have gained in value thanks to the housing shortage. That means even if sellers need to buy another home, it's worth selling anyway." — Timothy Savage [10:16]

• Jessica Loutz, Economist with the National Association of Realtors, comments on the seasonal nature of housing markets, indicating that increased activity is likely as the spring season approaches despite current winter sluggishness. (11:11 - 11:25)

Conclusion: The housing market exhibits resilience as sellers leverage current equity gains to navigate high interest rates. This activity may alleviate some of the existing housing shortages, but the market remains sensitive to seasonal trends and broader economic conditions.

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4. Producer Price Index (PPI) vs. Consumer Price Index (CPI)

Ryssdal revisits the inflation discussion, comparing the changes in wholesale prices (PPI) to consumer prices (CPI), and explores why reductions in PPI aren't immediately reflected in consumer prices.

Key Points:

• Daniela Velasquez de Leon and Anne Owen from Hamilton College elucidate the disparities between PPI and CPI, attributing differences to distribution costs, retailer pricing strategies, and the inclusion of imported goods in CPI but not in PPI. (20:54 - 23:35)

  "The price you pay for apples at the store isn't just based on the price the store paid for those apples. It also factors in shipping, wages, and rent." — Daniela Velasquez de Leon [22:15]

• Jay Sigorsky, from Boston University's Questrom School of Business, adds that the global sourcing of products further complicates the relationship between PPI and CPI, as PPI only measures domestically produced goods. (22:56 - 23:08)

Notable Quote:

"Food prices can be highly volatile because of changes in seasons and weather." — Daniela Velasquez de Leon [22:39]

Conclusion: While PPI and CPI are both indicators of inflation, their differing scopes and the additional factors influencing consumer prices result in a lag and discrepancy between wholesale and retail pricing changes. Consumers may not immediately feel the impact of reductions in PPI due to these intermediary factors.

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5. China's Economic Challenges and Youth Unemployment

The episode concludes with a segment on China's economy, highlighting the disconnect between official statistics and the realities faced by job seekers and workers on the ground.

Key Insights:

• Jennifer Pack, reporting from Beijing, illustrates the struggles of job seekers in a sluggish property market and the high youth unemployment rate, which reached a record 21% in June 2023. (23:35 - 27:56)

  "Gone are the days when lucrative sectors like high tech and academic tutoring provided ample opportunities. Now, graduates face a scarcity of decent jobs." — Samantha Fields [25:11]

• Influencers and Users on Douyin, China's counterpart to TikTok, provide firsthand accounts of the tough job market, with many graduates experiencing multiple job losses and low-wage offers. (24:06 - 27:56)

  "I've had three jobs in the past two years. Either the company laid me off or it ran out of money and couldn't pay me." — Sarah House [27:10]

• Wang Wei, a demolition contractor, emphasizes the precarious nature of manual labor jobs, highlighting the necessity for daily payments due to unreliable employers. (27:21 - 27:40)

  "We're only taking jobs that pay at the end of each day. We're very realistic." — Wang Wei [27:34]

Conclusion: China's economy, while officially growing as per government targets, faces significant internal challenges, particularly in the labor market. High youth unemployment and unstable job conditions signal underlying economic issues that may have broader implications for global markets and trade relations.

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6. Closing Remarks: The Fragility of Economic Institutions

In his closing remarks, Ryssdal reflects on the fragility of economic institutions and the rule of law in sustaining the American economy. He warns of structural damages due to political turmoil and diminishing trust in governmental processes.

Key Points:

• Ryssdal emphasizes that the robustness of the American economy is deeply intertwined with the strength of its democratic institutions, including the rule of law and regulatory frameworks.

• He expresses concern over recent political actions that undermine these institutions, such as illegal takeovers, shutdowns of government agencies, and unauthorized private interventions in government functions.

  "The institutions of this economy work in no small part because the institutions of this democracy work. The rule of law, regulations, and process is clearly set forth, an expectation of fairness and of recourse when wronged." — Kai Ryssdal [28:28]

Conclusion: The sustainability and global stature of the American economy are contingent upon maintaining strong, transparent, and fair institutions. Political instability and attacks on these foundational elements pose significant risks to economic confidence and long-term prosperity.

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Overall Takeaway: The "Time to Sell!" episode of "Marketplace" provides a multifaceted examination of current economic challenges, from persistent inflation and volatile trade policies to dynamic shifts in the housing market and international labor struggles. Through expert interviews and on-the-ground reports, the episode underscores the interconnectedness of global economies and the critical role of stable institutions in fostering economic resilience.

Transcript

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[Kai Rysdal]

Go up and prices go down. True lately though. Up From American Public Media, this is Marketplace in Los Angeles. I'm Kai Rysdal. It is Thursday today, the 13th of February. Good as always to have you along, everybody. Inflation comes in two flavors, if you will. What consumers pay the Consumer Price Index, which we learned yesterday, is running at 3% a year. Sticky. Bumpy. It's just taking its sweet time getting down to the Federal Reserve's 2% target. As you know, today we learned the second flavor of inflation at the wholesale level is sticky, too. The Labor Department told us the producer price index rose 4.10percent December to January, 3.5% year on year. There are the standard volatile categories fuel and food. Yes, fine eggs too. But some other categories that also got more expensive do offer some insights into the broader economy. Marketplace's Justin Ho offers transportation and warehousing.

[Justin Ho]

Shipping and storing goods often gets more expensive in the month of January, says Jason Miller, a professor of supply chain management at Michigan State University.

[Jason Miller]

At the start of the year, for different parts of the transportation warehousing sector, they institute new pricing, new year, new.

[Justin Ho]

Contract, which means that kind of price increase will likely level off.

[Jason Miller]

Historically, there's this big jump in January, and then things move much more slowly throughout the year.

[Justin Ho]

But Transportation and warehousing companies have also been raising prices because of higher demand. Zach Rogers, a professor at Colorado State University, says that's because many businesses have been stocking up on extra goods.

[Kai Rysdal]

More inventory is coming into the country in January, and we saw this in late December as well than we normally would have.

[Justin Ho]

Rogers surveys companies about their inventory management, and he says many are trying to re up after the holidays. But Rogers says companies are also concerned about the prospect of new tariffs.

[Kai Rysdal]

One of the things you really don't want to deal with as a supply manager is uncertainty.

[Justin Ho]

And so they brought all this inventory and what does that do, especially on the warehousing side? It's really inflated our stores of inventory and warehousing prices. Consumers could also be driving demand for warehouse space by buying big ticket items like appliances ahead of any potential tariffs. Sarah House, senior economist at Wells Fargo, says if that's the case, that's not a great sign about where the economy's headed.

[Sarah House]

If it's a pull forward of activity, that just means we could see a steeper drop off later in the year.

[Justin Ho]

But House says there are other reasons consumers are buying expensive, durable goods.

[Sarah House]

Financing conditions are a little bit easier for those big ticket purchases. And at the same time, some goods are getting a little bit worn out if they were bought in the early.

[Justin Ho]

Part of the pandemic and if transportation and warehousing costs are going up because consumers feel confident enough to buy those things, House says that's a good sign. I'm Justin Ho for Marketplace.

[Kai Rysdal]

On Wall street today. Everything's still fine, better than fine, to judge by the major indices. We'll have the details when we do the number. The tariff word du jour is reciprocal. President Trump signed an order today that could see the United States raise its import taxes on basically everything from everybody as soon as April 2nd. That's on top of the 25% tariff on all steel and aluminum imports, the extra 10% tax on all goods from China, and come March, maybe a 25% tariff on Canada and Mexico. I rehash all those details simply to say that there are a lot of trade policy balls in the air right now, which means there are a lot of balls in the air for business owners, too. Marketplace's Kristen Schwab made some calls.

[Grant Hennigan]

Grant Hennigan has been preparing for this tariff moment for months, as in he woke up bright and early on November 6, the morning after the election, to set his plan into motion.

[Kai Rysdal]

What we did here is we said, well, we would just get in as much as we possibly could and get.

[Grant Hennigan]

It in from China before Inauguration Day. Hennigan owns Veridian, a small chain of patio furniture stores in north and South Carolina. He thinks he has enough extra cushions and sofa frames to last till Labor Day. Meanwhile, he's also importing more from Indonesia to avoid Chinese tariffs. But as it turns out, we're not.

[Kai Rysdal]

The only people doing this. So it does create a lot of constraints on the supply chain, and that's.

[Grant Hennigan]

Made shipping more expensive. Hennigan's spending 30% more sourcing from Indonesia. It means he took a risk and made a bet that so far hasn't paid off.

[Kai Rysdal]

I think that's one of the frustrations importers like myself have, is that it's hard to make good decisions.

[Grant Hennigan]

It is hard to make good decisions when the rules around you are changing.

[Daniela Velasquez de Leon]

We're just holding our breath, really.

[Grant Hennigan]

Daniela Velasquez de Leon is general manager at Organix Unlimited in San Diego, which imports 90% of its produce from Mexico. There is not a ton she can do while she waits out this tariff delay and not much she can do if it does go through. Bananas don't last forever, so she can't stock up. And being physically close to the fruit farms is important. So the bananas that we source from.

[Kai Rysdal]

Mexico make it to the United States.

[Grant Hennigan]

Within two days, two days by truck. Now, if she starts importing from, say, Ecuador instead, it takes the fruit over two weeks to arrive to the United States, two weeks by container ship, where the bananas may overripen. Business owners who import from Canada are also in tariff limbo. Chip McElroy, CEO of McElroy Manufacturing in Tulsa, imports 60% of the parts he uses to make specialty construction equipment, like machines that cut and fuse pipes. He needs hydraulic cylinders and aluminum castings that he can't really get anywhere else.

[Kai Rysdal]

It's not like going down to a local hardware store and looking to buy a screw. Those kind of what I would call commodity items pretty much have to be built specifically for us, and he isn't.

[Grant Hennigan]

Sure where else he'd source them from. Plus, looking for new suppliers is expensive. He has to visit the manufacturers, and they'd need to make new molds and tools.

[Kai Rysdal]

It probably is very easily a 50 to $100,000 cost to our overhead just to resource one engineered item.

[Grant Hennigan]

And all of this, whether we're talking about business owners paying more taxes on bananas or paying more to ship furniture or paying more to find new suppliers, all of this involves paying more. And everyone I talk to, they say it's not just about paying more once they're worried about having to hike prices again after years of inflation. Here's Velasquez de Leon.

[Daniela Velasquez de Leon]

Right now the math I've been doing.

[Kai Rysdal]

Is how much margin can I absorb so that my customers aren't as affected?

[Grant Hennigan]

But the math isn't mathing, she says. At some point, consumers will have to make up some of the cost. I'm Kristen Schwab for Marketplace.

[Kai Rysdal]

According to the mortgage giant Freddie Mac, as of today the average interest rate on a 30 year fixed mortgage is 6.87%, down just a tad from its recent 7ish percent highs. But it is a perfect setup for this next item because one of the persistent complaints about the post pandemic housing market has been that those higher rates have been keeping a lot of would be sellers from putting their homes with their 3% mortgages on the market because they ain't gonna get no 3% again. Turns out, though, according to the latest monthly data from Zillow, those sellers do seem to be getting over that hesitation. As Marketplace's Kelly Wells reports, the higher.

[Guy Sakala]

Mortgage rates haven't gone anywhere. But Guy Sakala from Inside Mortgage Finance says impatient sellers who've been wanting to move for several years seem to be pulling the trigger anyway.

[Kai Rysdal]

If you want to downside, you can't wait forever.

[Jason Miller]

Would be sellers who sat on the.

[Kai Rysdal]

Fence have said, okay, it's time to move.

[Guy Sakala]

There's also good news for the years long housing shortage because fewer sellers are looking to buy another house. That's partly because the median age of sellers is the highest it's ever been at 63 years. They might be moving in with family or into assisted living, or people have.

[Kai Rysdal]

Second homes, a smaller retirement home that's in a nice vacation area, and they're just going to move there full time.

[Guy Sakala]

The homes that are going on the market have gained in value thanks to the housing shortage. Timothy Savage with NYU's Shack Institute of Real Estate says that means even if sellers need to buy another home, it's worth selling anyway.

[Kai Rysdal]

Sellers are motivated, even in the face of high mortgage rates, to lock in the equity gains that they've earned.

[Guy Sakala]

Zillow also reported a record number of price cuts in last month's listings. That might seem odd given the housing shortage, but Savage says that's actually just another sign of motivated sellers.

[Kai Rysdal]

Sellers are eager to sell and take small haircuts essentially to lock in the equity gains.

[Guy Sakala]

The other surprising piece of this economist Jessica Loutz with the national association of Realtors says it's all happening in the dead of Winter, winter months are always more sluggish.

[Sarah House]

People don't necessarily want to put on their snow boots to go look at.

[Guy Sakala]

Homes, which could mean even more movement in the housing market is on tap for the busy season in the spring. I'm Kailey Wells for Marketplace.

[Kai Rysdal]

High prices and high interest rates, as we were hearing from Kaylee, are two of the big challenges in the American housing market right now. Here's another one. Not enough supply. We need houses and there's a slew of ideas out there to address that. Changes to zoning, getting rid of red tape, you name it. Here's another one that was actually talked about a time or two during the presidential campaign, opening up federally controlled public lands to build houses. Mike Albertus is a professor of political science at the University of Chicago. He wrote about the topic at hand for Bloomberg the other day. Mike, welcome to the program.

[Jason Miller]

It's great to be here.

[Kai Rysdal]

Give me a sense of scale, would you? How much land does the federal government own? Do you know?

[Jason Miller]

The federal government owns a lot of land, tens of millions of acres of land. And in the American west in particular, it owns even a greater share of all land. It owns a bit over 50% of land in the west and that spread across the Forest Service, the Bureau of Land Management, the National Park Service, Fish and Wildlife and the like.

[Kai Rysdal]

The catch of course, is that when you drive from like LA to, I don't know, Vegas or Denver or someplace, that's not what we're talking about. Right? You don't want to build in the wild expanses. We need land where people want to live.

[Jason Miller]

Of course. Yeah. A proposal to use federal land for building housing should focus really on metropolitan areas, both within city boundaries as well as at the outskirts, where new building is happening and where cities are expanding.

[Kai Rysdal]

Give me a for instance, what does that look like?

[Jason Miller]

So one example would come from Las Vegas. Just at the end of last year, the Bureau of Land Management sold a small piece of land, 20 acres of land at a nominal price to Clark county in Las Vegas for the purposes of building single family homes for low income households. And the county now is going to maintain the land and sell the homes to prospective buyers. So that's the most recent transaction along line of federal land sales in the county that stem from the 1998 Southern Nevada Public Land Management Act. But there are many other examples as well. And there are many growing metropolitan areas that are constrained by federal lands. At the outskirts.

[Kai Rysdal]

There are those who will listen to this interview professor, who will point out rightly that part of the reason that these lands have not been developed yet is that they are set aside specifically for protection, either just for the natural resource or for recreation or what have you. And that sound you hear is all those people screaming at the radio saying, what do you mean you're going to build housing on that land?

[Jason Miller]

You know, of course, this is not a proposal or an idea to bulldoze Yellowstone or build condos along the rim of the Grand Canyon or something like that. I think everyone is on the same page that a considerable portion of federal land is intended for, for conservation preservation. There's also, of course, a set of public lands that are used for things like grazing or for natural resource management. But we're Talking about maybe 0.1% of federal land that tends to be, again, at the outskirts or within metropolitan areas.

[Kai Rysdal]

It was interesting to me as I read up for this interview that this is broadly supported on a bipartisan basis. Both President Trump and then Vice President Harris supported during the campaign. Does anything else have to happen before land sales could conceivably start? Even small ones like the one you talked about?

[Jason Miller]

That's right. There are very few things it seems like at the face of it that Americans will agree on across the aisle. But actually this is one area where there does appear to be convergence between Democrats and Republicans. One thing I would say is that there needs to be stipulations not only for the federal lands that are used for this sort of a proposal, but also how building would actually be done in terms of density requirements and affordable housing and the like. And so there I think we'll see a little bit of a bigger divergence. But there is the capacity for the federal government to do this on a selective basis already.

[Kai Rysdal]

We should emphasize here we're playing the long game. None of this is happening tomorrow, right?

[Jason Miller]

That's exactly right. The housing crisis has been brewing since the Great Recession and building has really never caught up with demand. And as a result, there's a lot of pent up demand. And this sort of, you know, use of federal land is not going to solve the housing crisis overnight. It's going to take some time for this sort of thing to bite.

[Kai Rysdal]

Professor Mike Albertus at the University of Chicago, his book on the subject at hand is called Land Power. Professor, thanks for your time, sir. I appreciate it.

[Jason Miller]

Thanks. It was great to be on the.

[Samantha Fields]

Coming up, are my groceries today gonna reflect the PPI change I saw yesterday?

[Kai Rysdal]

Maybe not. First though, let's do the numbers. Dow Industrials up 342 today, 3/4 of 1%. Closed at 44,711. The Nasdaq added 295 points, 1 a half percent 19,945 the S&P 500 climbed 63 points, 1%. 61 and 15 tech stocks helped fuel the rally in the markets today. Nvidia gained 3.2%. Alphabet grew 1, 4/10 of 1%. Sandal and clogged company Crocs posted higher than predicted fourth quarter results. Sales somehow rose 4% that quarter. Shares today jumped 24% for Crocs bonds up yield on the 10 year Tino down 4.53%. You're listening to Marketplace.

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[Kai Rysdal]

This is Marketplace. I'm Kai Rysdal. Justin was telling us about this morning's Producer Price Index at the top of the program. Wholesale inflation up again Last month, two things struck us as we dug in a little bit deeper. The price of vegetables, both fresh and dry dry was down hard, about 22%. And fruit dipped too, almost 14%. But you look back at the Consumer Price Index, what we consumers pay. As I mentioned, there was no such drop. Veggies were down just a little bit. Fruit was actually up in the cpi. And what is up with that? Here's Marketplace's Samantha Fields.

[Daniela Velasquez de Leon]

If you look over time, the Producer Price Index and the Consumer Price Index do generally track one another, more or less at least if you look at.

[Samantha Fields]

The long, long run.

[Daniela Velasquez de Leon]

Still, Leah Brooks at George Washington University says, if you go to the grocery store today and you want to know.

[Samantha Fields]

Are my groceries today going to reflect the PPI change I saw yesterday, then the answer's probably not so quickly.

[Daniela Velasquez de Leon]

Why not? Anne Owen at Hamilton College says PPI measures the prices producers get for their goods and CPI measures the prices consumers pay at the store.

[Kai Rysdal]

So what's in the middle of those.

[Grant Hennigan]

Two things are things like distribution costs and decisions that the retailers are making.

[Kai Rysdal]

When they price the products for consumers.

[Daniela Velasquez de Leon]

The price you pay for, say, apples at the store isn't just based on the price the store paid for those apples. It also factors in what the store is paying for shipping and wages and rent. Not exactly an Apples to Apples comparison. Plus, Owen says retailers know that customers are very sensitive to prices going up, so they're careful not to raise or lower them too often, especially if they.

[Grant Hennigan]

Think that the reduction in costs that they're experiencing will be just temporary.

[Daniela Velasquez de Leon]

And food prices can be highly volatile because of changes in seasons and weather. Jay Sigorsky at Boston University's Questrom School of Business says there's another factor, too.

[Sponsor]

We get a lot of our foodstuffs.

[Kai Rysdal]

From outside the United States. For example, avocados are most of them come from Mexico. Grapes, especially now in the winter, are primarily coming from places like Chile.

[Daniela Velasquez de Leon]

And PPI only measures things produced in the US While CPI includes those imports, too. I'm Samantha Fields for Marketplace.

[Kai Rysdal]

Trade wars and tariffs aside, a lot of what happens in the global economy depends on how things are going in the Chinese economy. And with the appropriate degree of skepticism about official economic data from Beijing. The Chinese economy grew right at the government's target of 5% last year. Unemployment, Beijing says, was 5.1%, and officials over there say that proves the job market has stabilized. But as Marketplace's Jennifer Pack reports now from Beijing, that is not how people on the ground seem to be feeling.

[Samantha Fields]

On the outskirts of Beijing, dozens of men gather on a street corner known as the Maziutiao Day labor market. It's a place where people can pick up odd jobs. Every few steps I take, a man approaches and asks, you've got work. How much are you paying? Among the job seekers is Wang Wei.

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[Samantha Fields]

He's a demolition contractor. Like if a mall decides to renovate, he goes in and strips out everything. But there's a lot less renovation these days. The property market in China is still in a slump. The jobs on offer today at the Maziution market mostly factory work, which doesn't interest jobseeker Jiangshan.

[Sponsor]

Their hourly pay is 20 yuan.

[Samantha Fields]

That's $2.70 an hour lower than the city's minimum wage. China's manufacturing sector is dealing with a lot trade tensions, war in Ukraine and sluggish domestic demand. Again, demolition contractor Wang now there are.

[Sponsor]

Fewer decent jobs and more job seekers.

[Samantha Fields]

The story is the same for university grads. Youth unemployment hit a record 21% in June of 2023. Officials stopped reporting the number for months, then rejiggered the calculation method to quote more accurately reflect reality. The jobless rate for youths last year was 16%. TikTok's Chinese sister site Douyin, is full of gripes about the job market, user Yang Xi Guape says in a video she's graduating from one of China's top 100 universities this June.

[Sarah House]

I've applied for jobs where there are a few thousand applicants, but some firms, including listed companies, end up only hiring one or two people.

[Samantha Fields]

Lucrative sectors that used to hire a lot of grads including high tech and academic tutoring have been severely curtailed by the government. So they've been laying people off. Employers have the upper hand, as Douyin user a Littleoctopus found out recently and posted this video.

[Sarah House]

Just had a job interview and it's so outrageous.

[Samantha Fields]

They're offering me a monthly salary of 2,500 yuan. That works out to about $4,000 annually to teach six days a week. Is it really that tough for college grads? That's what an influencer named yang Maoyue with 8 million followers on Douyin asks. In this video, he implies that young people are maybe too picky. Within three days, a million fans unfollowed him. Young job seekers face another hurdle. Companies that go belly up and end up not paying workers. Douyin user a head full of Latte says she's a graduate from a top university.

[Sarah House]

I've had three jobs in the past two years. Either the company laid me off or it ran out of money and couldn't pay me. And I'm struggling to live in Beijing. Tell me, is it because I didn't work hard enough?

[Samantha Fields]

Not getting paid is even more common with manual labor. Demolition contractor Wang Wei says he and other laborers at the market only take jobs that pay at the end of each day.

[Sponsor]

For us, the employer must transfer on the spot via WeChat Pay. We're very realistic.

[Samantha Fields]

Meanwhile, soon to be graduate Yang Xi Guapi says she's lowering her job expectations.

[Sarah House]

Only crappy jobs are available, and I'm willing to take those. I'd work hard too, but I haven't been hired for anything.

[Samantha Fields]

She's among the estimated 12 million college students graduating into this job market this year. In Beijing, I'm Jennifer Pak for Marketplace.

[Kai Rysdal]

This final note on the way out today about what's happening in and to this economy right now, an economy that I am obliged to remind you, affects everyone. A lot of what happens in American capitalism is far from perfect. We all know that. But the same kind of capitalism that's so problematic is also what makes the United States, despite those flaws, the economic envy of the world. And that doesn't just happen out of nowhere. There's a baseline set of conditions that foster the investment, the trust and the confidence that make the American economy what it is. The institutions of this economy work in no small part because the institutions of this democracy work. The rule of law, regulations and process is clearly set forth, an expectation of fairness and of recourse when wronged. And all of them are under assault right now. There are illegal takeovers of government systems. There are illegal shutdowns of government agencies and departments, there are mass firings in critical agencies, and there are private operatives assuming government power and government authority. I said two weeks ago that this program is not going to chase everything that comes out of the White House, and we're not. But the lasting structural damage that's deliberately being done to this economy and to everybody in it simply has to be pointed out. We'll see you tomorrow, Everybody. This is APM.

[Sarah House]

Consumer confidence had its sharpest monthly decline 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. I'm Janelli Espinal, host of Financially Inclined, a podcast from Marketplace that makes learning about money simple. Learn about practical skills like negotiating job offers, dealing with money in 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.