Marketplace Podcast Summary: "Uneven Churn" (December 4, 2024)

Hosted by Kai Ryssdal

1. Understanding Labor Market Churn

Kai Ryssdal opens the episode by discussing the recent surge in job quitting rates, highlighting that over 3.3 million people quit their jobs in October—a slight increase from the previous month (01:03). While high quit rates can indicate a healthy economy, reflecting workers' confidence in finding new opportunities, Stephanie Hughes expands on the geographical disparities in these trends.

Stephanie Hughes shares insights from Laura McClellan, a transportation planner in Utah, who emphasizes the booming job market in the American West:

"It's a good time to be a transportation planner in Utah. There is more work out there than folks doing the work." (02:13).

Economist Christine McDaniel from George Mason University explains that such churn—the movement of workers between jobs—suggests effective job matching:

"You'd like to see a lot of churn of the labor market because it means that people are getting matched up with the jobs that they can really excel in." (02:40).

However, Christine Sargent, an economics professor at Middlebury College, notes that the current churn is less intense compared to the pandemic peak, viewing it as a positive cooling that helps control inflation:

"It's a return to a job market that looks more like it did before the pandemic. Overall, it's kind of boring... but that's okay." (03:55).

2. Holiday Shopping Trends

Transitioning to the holiday season, Kai Ryssdal reports on record-breaking online sales, with almost $11 billion spent online during the holiday shopping period, as per Adobe Analytics (03:55). Retailers provide mixed experiences:

Annie Lang Hartman, owner of Wild Letty in Michigan, recounts a slow start due to a severe storm but reflects optimism as sales pick up:

"I think our biggest challenge was dealing with weather affecting our in-store sales... we are really hopeful that this is going to be a really great holiday season." (04:29).

Kristen Schwab from Marketplace explores the rise of TikTok Shop, which surpassed $100 million in sales on Black Friday alone, highlighting the platform's growing role in social commerce:

"Brands are trying to meet consumers where they are... social commerce on marketplaces like TikTok Shop make up around 5% of total e-commerce sales in the U.S." (06:42).

However, challenges remain as consumers are cautious about trust and platform reliability. Diana Smith of Mintel attributes current modest growth to its recent introduction in the U.S., while Oliver Wright from Accenture predicts continued growth as shoppers seek more personalized shopping experiences:

"Consumers consistently cite a high level of uncertainty that they are buying the product that's right fit for them." (08:12).

3. Rising Bankruptcies in the Restaurant Industry

Kai Ryssdal highlights a concerning trend reported by S&P Global: bankruptcies are projected to reach a 14-year high in 2024, affecting various sectors including healthcare, communications, energy, and notably, restaurants (08:47).

Sabri Benishore reports from Rochester, New York, detailing the struggles faced by Union Tavern amid rising costs and declining customer traffic:

"Restaurant traffic is down around 3.5% in the US overall... debt that even predates the pandemic is a major issue." (09:23).

Greg Thomas from BDO explains the compounded challenges of pandemic-induced debt and rising interest rates:

"The debt didn't disappear during Covid, and now interest rates have made it more expensive." (09:50).

Joe Pollack of Tech Nomic anticipates continued bankruptcies into 2025:

"We are starting to see a fair amount of these bankruptcies that are coming through." (10:15).

Entrepreneurs like Partico Borgia in Dallas innovate to survive, transforming restaurants into "smart cafes" with automated kiosks, while Kelly Busch of Union Tavern adapts by hosting unique events to maintain customer engagement:

"This kind of innovation was super important. It's essential." (12:00).

4. Renewable Diesel's Growing Role in Transportation

Kai Ryssdal introduces the topic of renewable diesel, a cleaner alternative to traditional diesel fuel, which is gaining traction in the transportation sector (17:18).

Brian Mosier, a chemist with the Agricultural Research Service, explains that renewable diesel is made from vegetable oils or animal fats and is chemically similar to petroleum diesel, allowing seamless use in existing infrastructure:

"There’s no need to change transportation infrastructure. You can deploy renewable diesel through existing fuel pumps." (17:32).

Jeff Short from the American Transportation Research Institute confirms the ease of switching:

"It's an easy switch for a smaller carbon footprint." (18:05).

Despite environmental benefits, the future of renewable diesel hinges on public policies and subsidies. Scott Irwin, an economist at the University of Illinois, notes the role of state subsidies:

"Renewable diesel can live or die, depending on how generous those subsidies are." (18:28).

Jimmy Trotterman of the Energy Information Administration highlights regional growth, primarily in California and the West Coast:

"There’s been significant growth in California, and that’s starting to begin elsewhere on the West Coast." (18:42).

5. Electric Vehicle Charging in Rental Properties

As electric vehicle (EV) sales surge, the need for accessible EV charging infrastructure in rental properties becomes critical. Kai Ryssdal discusses this in the context of 45 million American households that rent, many residing in multifamily buildings (19:22).

Philip Kiefers from Burlington, Vermont, illustrates the challenges faced by renters in accessing convenient EV charging:

"I can't charge at the apartment I rent... the chargers are at least a few minutes walk from my apartment." (20:05).

Conversely, Eric Hoekstra, a building owner, shares successful implementations of private charging stations:

"We have a couple of juice box EV charging stations here... demand for charging among my tenants has grown." (20:35).

Jeff Allen of Fourth emphasizes the growing tenant demand for EV chargers:

"34% of tenants want EV chargers in their building, up 7 percentage points from last year." (21:20).

However, Ingrid Malmgren from Plug In America warns about the precariousness of federal support, suggesting a shift towards state and local initiatives:

"We’re going to see a shift from efforts at the federal level to efforts at state and municipality levels." (22:50).

6. Retailer Perspectives

Philip Rollins, owner of Offbeat in Jackson, Mississippi, discusses the impact of local road construction on his business:

"We were down like 70% on sales... but had a decent Black Friday with a big sale." (13:34).

He remains hopeful as construction concludes, allowing for increased foot traffic and extended operating hours during the holiday season:

"I'm just hoping to see sales come up. We're going to be open seven days a week till Christmas." (15:20).

Dylan Demery, owner of She's Fly in Fort Collins, Colorado, notes a seasonal slowdown post-holiday sales but remains optimistic for increased activity during the holidays:

"We are experiencing a bit of a lull compared to last year... our most successful year on record." (24:21).

7. Concluding Insights

The episode wraps up with observations on the interplay between traditional industries and evolving consumer behaviors. Kai Ryssdal underscores the importance of adaptability and innovation across sectors, from restaurants to retail and transportation.

Liz Troval from Marketplace contributes to the discussion on renewable diesel’s potential impact, while Stephanie Hughes and other Marketplace reporters provide on-the-ground perspectives from various businesses navigating current economic challenges.

Notable Quotes

• Stephanie Hughes (02:13):
  "It's a good time to be a transportation planner in Utah. There is more work out there than folks doing the work."

• Christine McDaniel (02:40):
  "You'd like to see a lot of churn of the labor market because it means that people are getting matched up with the jobs that they can really excel in."

• Christine Sargent (03:55):
  "It's a return to a job market that looks more like it did before the pandemic. Overall, it's kind of boring... but that's okay."

• Annie Lang Hartman (04:29):
  "I think our biggest challenge was dealing with weather affecting our in-store sales... we are really hopeful that this is going to be a really great holiday season."

• Stephanie Hughes (06:42):
  "Brands are trying to meet consumers where they are... social commerce on marketplaces like TikTok Shop make up around 5% of total e-commerce sales in the U.S."

• Diana Smith (08:12):
  "Consumers consistently cite a high level of uncertainty that they are buying the product that's right fit for them."

• Sabri Benishore (09:23):
  "Restaurant traffic is down around 3.5% in the US overall... debt that even predates the pandemic is a major issue."

• Greg Thomas (09:50):
  "The debt didn't disappear during Covid, and now interest rates have made it more expensive."

• Joe Pollack (10:15):
  "We are starting to see a fair amount of these bankruptcies that are coming through."

• Partico Borgia (12:00):
  "This kind of innovation was super important. It's essential."

• Brian Mosier (17:32):
  "There’s no need to change transportation infrastructure. You can deploy renewable diesel through existing fuel pumps."

• Greg Thomas (18:05):
  "It's an easy switch for a smaller carbon footprint."

• Scott Irwin (18:28):
  "Renewable diesel can live or die, depending on how generous those subsidies are."

• Philip Kiefers (20:05):
  "I can't charge at the apartment I rent... the chargers are at least a few minutes walk from my apartment."

• Eric Hoekstra (20:35):
  "Demand for charging among my tenants has grown."

• Jeff Allen (21:20):
  "34% of tenants want EV chargers in their building, up 7 percentage points from last year."

• Ingrid Malmgren (22:50):
  "We’re going to see a shift from efforts at the federal level to efforts at state and municipality levels."

• Philip Rollins (13:34):
  "We were down like 70% on sales... but had a decent Black Friday with a big sale."

• Dylan Demery (24:21):
  "We are experiencing a bit of a lull compared to last year... our most successful year on record."

Conclusion

The "Uneven Churn" episode of Marketplace delves into the dynamic shifts within the labor market, retail, and transportation sectors amidst an evolving economic landscape. By highlighting diverse perspectives—from economists and business owners to industry experts—the podcast offers a comprehensive analysis of current trends, challenges, and adaptive strategies shaping the U.S. economy as it transitions into the new year.