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Every weekday, host Kai Ryssdal helps you make sense of the day's business and economic news — no econ degree or finance background required. "Marketplace" takes you beyond the numbers, bringing you context. Our team of reporters all over the world speak with CEOs, policymakers and regular people just trying to get by.
The US inflation rate rose to 0.4% in August, up from 0.1% in July, prompting the Federal Reserve to consider raising interest rates. Analysts, like Omer Sharif, suggest the Fed must act to maintain credibility, especially after hawkish remarks from officials like Kevin Warsh.
Real hourly earnings in the US decreased by 0.3% over the past year as inflation outpaced wage growth. To cope, consumers are increasing work hours and drawing down savings, with the savings rate dropping from 5% to 3%.
The widening gender wage gap is discouraging women from participating in the labor force, as they may not earn enough to cover unpaid responsibilities like childcare. This also destabilizes the care industry, which is predominantly female and underpaid, leading to high turnover.
While most of the US is experiencing a slowdown in housing starts, the Northeast region has seen a 12% increase. Developers like Colin Frisby in Vermont are building denser, more affordable housing options despite regional cost challenges.
Approximately 42% of Americans are retiring earlier than planned, with one in five doing so due to feeling financially stable. Skip Franklin, who retired at 37, exemplifies this trend by living on a modest budget and focusing on volunteer work and personal relationships.
West Texas Intermediate, the US benchmark for oil, has surpassed $100 a barrel, reaching nearly $104, while Brent crude hovers around $107. This price increase is attributed to a significant drop in oil shipments from the Middle East due to ongoing conflict, with shipments down 65% from the previous year. Analysts anticipate these elevated prices to persist.
Analysts from S&P Global Energy and Columbia Business School predict that oil prices will remain in the $80-$100 range, or even higher, through next year due to the ongoing conflict in the Middle East and the resulting disruption of oil shipments through the Strait of Hormuz. The market is now pricing in volatility and uncertainty, with no expectation of a swift resolution.
The Producer Price Index (PPI) for August rose by four-tenths of a percent, primarily driven by energy costs. This increase in energy prices is contributing to inflation in transportation and warehousing, impacting the cost of nearly all goods. The cost of trucking, specifically, has risen over 14% compared to the same period last year.
The trucking industry is experiencing increased costs due to higher diesel prices and a reduction in available drivers, partly attributed to stricter English proficiency requirements for drivers. This has led to higher freight rates, with some companies delaying shipments in hopes of rate decreases. However, passing these increased costs onto consumers is challenging.
Heather Bickford, COO of Death by Audio, a business creating equipment for musical instrument special effects, reports improved business performance despite ongoing tariff complexities. While the business has seen success with a new product launch, navigating tariff refunds and the associated administrative portal (ACE) has been an arduous and time-consuming process.
The US solar industry is experiencing uncertainty due to fluctuating government policies aimed at boosting domestic production, including tax credits and new tariffs on imported materials like polysilicon. Companies like Q cells, which has invested heavily in US-based manufacturing, are navigating these policy shifts, which contrast between 'carrot' and 'stick' approaches from different administrations.
Korea-based Q cells has made a significant multi-billion dollar investment to establish a fully integrated solar panel supply chain at its Georgia factories. This move aims to capitalize on US policy incentives, but faces challenges due to the inconsistent nature of solar policy, making long-term planning difficult for businesses.
Canada has imposed tariffs ranging from 15% to 50% on American products, including steel, paper, electronics, and dairy. This action is in direct response to tariffs the US placed on Canadian goods last month, escalating a trade dispute between the two neighboring countries.
Residents of Monterey Park, California, successfully advocated for a city ordinance banning new data centers, making it the first US city to do so. The ban was driven by concerns over the significant water and electricity consumption of data centers, which residents feared would strain local resources.
Small business owners are experiencing mixed feelings about the economy, with uncertainty about the future tempered by generally optimistic sales. However, rising inventory costs due to factors like tariffs are forcing businesses to frequently adjust customer prices.
A growing number of consumers are turning to AI tools like ChatGPT, Claude, and Gemini for product recommendations and price comparisons. A recent survey indicates about one-third of respondents are using these AI platforms for shopping assistance.
Dina Burke, co-founder of the media company Boys Club, created a fake deodorant brand called 'Marwin' to test how generative AI platforms recommend products. Burke found that AI recommendations often align with top-ranked products on platforms like Amazon and that AI can be influenced with minimal effort, such as creating a Q&A section on a website.
The recently opened independent bookstore 'Judging by the Cover' in Fresno, California, specializes in literature by and about people of color and LGBTQ individuals. The store, which started as a pop-up in 2023, aims to be a community hub and provide representation for underrepresented groups.
The August jobs report indicated strong growth with 162,000 jobs added and a steady unemployment rate of 4.1%. Analysts suggest this performance, better than expected, may encourage the Federal Reserve to raise interest rates at its upcoming meeting.
Despite a strong jobs report, average hourly earnings in August saw their slowest pace in over five years, increasing by only 3.1% year-over-year. This wage growth is failing to keep up with rising prices for essentials like gas and groceries, leading to a decrease in real wages.
Frank Fieri of Paychecks suggests that the looming threat of artificial intelligence could be a factor in why workers are hesitant to ask for wage increases. He also noted that weekly wages are rising for small business workers due to employers trying to maximize output from existing staff.
Due to soaring diesel, fertilizer, and machinery prices, farmers are increasingly relying on older, non-computerized equipment that is easier and cheaper to repair. This trend is driven by budget constraints and the high cost of new machinery, with farm equipment sales declining.
Americans are making significantly more trips abroad, particularly to Europe, with international travel becoming a lifestyle choice rather than just a post-pandemic trend. This surge is attributed to increased affordability, easier booking platforms, and a shift in priorities for younger generations.
American tourists are significant spenders in Europe, outspending German and French travelers by a considerable margin. Experts note that Americans tend to book multi-day trips and spend more on average daily, which is highly valued by the European tourism industry.
The U.S. trade deficit expanded in July, reaching its largest gap in 16 months, largely due to a significant increase in shipments of computers and semiconductors. Some experts question the effectiveness of tariffs in reducing this deficit, while others point to data center construction as a potential mitigating factor.
Lulu Lemon Athletica announced that it failed to meet analyst sales expectations for the quarter. The company has revised its full-year sales forecast downwards, now expecting a decline instead of holding steady.
US oil giant Chevron announced a significant $7 billion investment in Venezuela over the next five years, aiming to double its oil production in the country to 600,000 barrels per day. This move is seen as a turning point for Venezuela's energy sector and the largest single company investment in the country to date.
Weekly jobless claims in the US rose by 2,000 to 206,000. The upcoming August jobs report is highly anticipated, with the Federal Reserve hoping for strong numbers to offset a previous decline in job creation. Economists suggest that even negative job growth might not significantly impact the unemployment rate.
A decline in immigration and an increase in baby boomer retirements have led to a lower 'break-even' job growth rate, meaning fewer new jobs are needed to maintain a steady unemployment rate. Economists like Heidi Shreholtz note that this reduced job creation can impact labor market dynamism, making it harder for new workers to find opportunities.
Persistent high fuel prices are prompting businesses to shift freight from trucks to rail, resulting in a record high volume of goods shipped via intermodal rail this year. While rail transport is generally slower, companies are willing to accept the longer transit times to save on costs.
Diesel fuel prices have seen a significant increase, reaching national averages not seen since late 2017. Analysts attribute this rise to seasonal demand for harvesting and heating, exacerbated by current global political events. Experts predict prices may continue to climb.
Uber is cutting 10% of its workforce, approximately 3,300 jobs, as part of a strategy to create a leaner organization with fewer management layers. CEO Dara Khosrowshahi stated this move aims to streamline operations.
Organizational psychologist Bob Sutton suggests that reducing middle management layers can eliminate bottlenecks, but acknowledges the often-unseen work these managers perform. Experts like Julia Daar note that such cuts can shift decision-making upwards and may not guarantee long-term cost savings if not managed carefully.
Denver has eliminated parking minimums for new apartment buildings, a move estimated to add over 400 housing units annually. The city council's decision aims to spur housing development by reducing construction costs, as each parking spot can add up to $50,000 to building expenses.
According to Dan North of Credit Suisse, market expectations align with the Federal Reserve's potential interest rate hike. North believes that without a rate increase, the Fed will struggle to reach its 2% inflation target, which has been notably persistent.
Jay Hatfield of Infrastructure Capital Advisors argues that the government overestimates headline inflation and expects core measures to decrease soon. He believes raising interest rates at this time would be ill-advised, despite acknowledging the FOMC's inclination to do so.
Jeff Klingholfer of Aristotle Pacific Capital states that consumers are adapting to higher interest rates and borrowing costs, while inflation erodes wage gains. He suggests that this pressure on consumers, already experiencing inflation fatigue, could lead to further economic slowdown.
Tim Cook is transitioning from his role as CEO of Apple to executive chairman. Hardware engineering lead John Ternis will assume the CEO position starting tomorrow. This change marks a significant shift at the $4.6 trillion company.
Sarah House, a senior economist at Wells Fargo, notes that consumer spending has remained robust even as wages have not kept pace with inflation. However, she expresses concern that this spending is being fueled by decreasing savings, suggesting a need for caution in the latter part of the year.
Kathy Bonjansik, chief economist at Nationwide, observes that lower-income households are being disproportionately affected by the weaker labor market and are shifting their spending habits. These households are substituting less expensive goods and potentially cutting back on services to manage their finances.
A New York Magazine correspondent recounts the discovery of a century-old photo album belonging to his grandmother, initially mistaken for a scam. The album contained personal photos and handwritten captions, revealing a complex provenance tracing back through eBay vendors and a hoarder's estate.
A newly introduced California Senate bill regarding wildfire liability reform would not prevent insurers from recovering claims from utilities. This news negatively impacted electricity providers, with PG&E and Edison International seeing significant stock price drops.
Global petroleum markets are tightening as US refineries operate at 97% capacity, and international refineries are taken offline due to geopolitical factors. This situation, combined with scheduled fall maintenance, is expected to push up prices for refined products like gasoline and diesel.
Joe Delara of Rabo Bank predicts rising diesel prices and continued inventory drops, exacerbated by harvest season demand. He notes that diesel demand is inelastic, meaning users will pay higher prices to secure supply for essential activities like farming and shipping.
NVIDIA has provided its first long-term growth forecast, projecting revenue to increase by 70% next year. This significantly exceeds the 44% growth anticipated by analysts. Experts note that while such forecasts are valuable for investors, they should be viewed with a degree of skepticism as they can be subject to upward bias.
Following NVIDIA's aggressive revenue growth forecast, experts discussed the inherent uncertainties in corporate financial projections. While some believe forecasts are generally in the ballpark and revenues are straightforward to predict, others emphasize that companies may strategically under-promise to manage expectations and boost stock prices.
US businesses saw a significant increase in inventories in July, with a 1.3% surge after months of slow growth. This unexpected rise contrasts with recent skittishness in stocking due to policy uncertainty, suggesting businesses may be preparing for strong sales or anticipating future tariff hikes.
NFL players are increasingly vocal about their preference for natural grass over artificial turf, citing reduced impact and better effects on the body. While the NFL points to studies suggesting similar injury rates, players' union data indicates higher rates on turf, and the union plans to push for grass in future negotiations.
The choice between natural grass and artificial turf in NFL stadiums is driven largely by economics, as turf can better withstand non-football events like concerts, generating more revenue. However, players strongly prefer grass for safety reasons, and the NFL Players Association believes the technology exists to use grass universally, as demonstrated during the World Cup.
The U.S. government sold 30-year bonds at an auction today with an interest rate of 5.216%. This rate is the highest the government has paid on a newly issued 30-year bond in nearly 20 years, according to Greg Ipp of The Wall Street Journal. Higher rates mean increased interest payments for taxpayers on national debt.
Greg Ipp explained that rising long-term bond yields are driven by persistent inflation, a large U.S. federal deficit of $2.1 trillion for the year, and concerns that the Federal Reserve and Congress may not be sufficiently committed to controlling inflation and reducing deficits. These factors lead lenders to demand higher compensation for the risks associated with U.S. Treasury debt.
Greg Ipp noted that despite an unsustainable fiscal path, public concern about the U.S. deficit is low, with voters prioritizing lower taxes and more government spending. He stated that until voters demand deficit reduction, politicians lack the incentive to seriously address the issue, as it doesn't align with electoral priorities like maintaining social security or increasing healthcare subsidies.
According to Greg Ipp, the U.S. could enter a debt spiral once the bond market loses confidence in its ability to manage its debt. While the U.S. benefits from issuing the world's most desirable debt, continued large deficits could lead to gradually higher interest rates. He cautioned that a disaster scenario, though unlikely, is possible if debt markets become unstable during periods of global risk.
The producer price index showed a slight cooling in wholesale inflation, with the core rate (excluding food and energy) at 4.2%. Economist Ben E. from Nationwide noted a lack of significant inflationary pressure beyond energy. Stephen Juno from Bank of America described this as 'disinflation,' meaning prices are not falling but are growing at a slower rate than before.
Aaron McCloughlin of The Conference Board stated that higher energy costs affect manufacturers by increasing material and transportation expenses. Grace Swimmer from Oxford Economics expects these pressures to persist due to the uptick in energy prices at the start of August, with a lag before inflation in sectors like transportation returns to pre-war levels. McCloughlin also warned of the possibility of secondary inflationary shocks.
Diane Tockterman, owner of Tocktermans Fishing Tackle, noted that the cost of plastic packaging for fishing lures has increased significantly due to oil prices. Natasha Jones of Local Stitch is also experiencing higher costs from distributors, impacting her ability to offer free shipping for online sales. Both businesses are facing increased ingredient and transportation costs, forcing price adjustments.
David Alema, owner of The Charmery ice cream shop, is experiencing increased costs for ingredients like chocolate, strawberries, and sprinkles. He finds it difficult to pass these rising costs onto customers, as there's a limit to what people will pay for a single scoop of ice cream. The shop's current price for a single scoop is $5.90.
The American oil industry has reportedly approached the White House to prevent a potential oil export ban. This comes as the US faces another global oil crisis and higher gas prices, with industry experts warning such a ban could harm domestic production and refineries.
Federal Reserve statements have become significantly shorter and more direct under the new chairmanship of Warsh, compared to the more verbose and templated statements of former Chair Powell. This new format, with fewer paragraphs and shorter sentences, is easier to digest but lacks forward guidance.
Federal Reserve statements under Chair Warsh now include a declarative, yet vague, pledge to deliver price stability. Experts suggest this phrasing, lacking a clear definition, might be tailored for an audience of one, possibly President.
Following a recent Federal Open Market Committee meeting where interest rates were unchanged, six members have publicly indicated a willingness to raise rates. Economists anticipate an increase in interest rates soon, as this is a traditional tool the Fed uses to manage price stability.
CEOs of major companies are reporting low confidence in the US economy, with their sentiment at its lowest since 2008. They cite ongoing issues such as oil and freight prices, supply chain challenges, and tariffs as major deterrents to planning, investment, and growth.
CEOs are finding the current high degree of economic uncertainty makes it difficult to make key business decisions, including how many people to hire, the extent of investment in new equipment, and pricing strategies. These decisions significantly impact the broader US economy.
The US and Japan have taken joint action to stabilize the Japanese yen, which has been sliding since early May. This intervention is partly motivated by Japan's significant holdings of US Treasury bonds, which it has been selling to support its currency, potentially raising US interest rates.
A photograph captured a 'to-do' list belonging to Treasury Secretary Scott Bessant, which included the item "buy Japanese yen, 5 to 10 billion dollars." This note aligns with joint US-Japan efforts over the weekend to bolster the Japanese currency.
Japan's efforts to stabilize its currency by selling US Treasury bonds could lead to higher interest rates for Americans. As a major holder of US debt, Japan's actions in the currency market have direct implications for US bond prices and yields.
The US is exploring the possibility of expanding a lending tool to allow Japan to borrow against its bond holdings, rather than selling them. This move is aimed at mitigating the risk of further sales in the US Treasury market.
A strengthening dollar, particularly against the Japanese yen, could negatively impact US export competitiveness and make imports more attractive. This contradicts the Trump administration's objectives with its tariff policies.
Economist Nicole Sivey notes a concerning 'twist' in the yield curve following Chairman Walsh's recent press conference, where short-term rates fell while long-term rates rose. She believes the market is struggling to interpret the Federal Reserve's direction regarding interest rates.
Economist Nicole Sivey expresses concern over Federal Reserve Chairman Kevin Walsh's consistent refusal to detail the strategy for reducing inflation. This lack of clarity leaves the market uncertain about the committee's future actions, such as potential interest rate hikes.
The Federal Reserve decided to hold interest rates steady, despite some notable dissent within the committee. Analysts suggest this non-committal stance may be influenced by the ongoing conflict with Iran and its impact on inflation, creating market uncertainty and potentially driving up bond yields.
Consumer sentiment has seen an uptick, surprisingly occurring despite ongoing inflation, new tariffs, and the conflict with Iran. Analysts attribute this to a temporary respite in gas prices and a general desensitization to economic volatility, rather than genuine improvement in consumer outlook.
The buildout of artificial intelligence is significantly contributing to economic growth, with substantial spending from Silicon Valley expected to continue. While there are potential threats from international models, the immediate impact on the stock market has not yet indicated a slowdown.
The cost of employee benefits rose 3.8% annually in the spring, exceeding wage growth of 3.2%, according to the Bureau of Labor Statistics. This increase is largely attributed to rising healthcare insurance costs for employers, influenced by medical innovation and a shortage of healthcare workers.
Amazon reported its strongest revenue growth in over four years, leading to a significant surge in its stock price. Conversely, Apple experienced a 7.3% decline as supply constraints related to the AI boom impacted its growth.
A recent AARP survey indicates that approximately 7% of retirees 'unretired' last winter, returning to the workforce. While financial need is a factor for some, others are motivated by a desire for creative work and a continued sense of energy and purpose, as exemplified by a former toy store owner reopening a new shop.
An AI engineer in Boulder, Dan Andrews, explored obtaining a short-term rental license for a film festival, initially seeing it as a way to make extra income. However, he found the process would require significant effort, including moving out his office equipment and hiring a property manager.
The US personal consumption expenditures (PCE) price index for June showed an annual rate of 3.7%, down from 4.1% in May, offering some relief. However, the Federal Reserve's preferred 'sticky price' CPI index remained at 2.8%, indicating that persistent inflation in areas like housing and dining out may take longer to abate. Economists caution that while underlying inflation is trending downwards, its pace may not be fast enough for the Federal Reserve's comfort.
Despite a significant 26% increase in grocery costs since 2020, consumers are increasingly opting for organic food, even though it can be 20% to 100% more expensive. The organic marketplace grew 6.8% last year, outperforming the total food market. This trend is driven by a desire for quality, alignment with values, and a focus on health, with even lower-income earners increasing their spending on organic products.
Diesel fuel prices have climbed to an average of $5.34 a gallon, nearing AAA's all-time record, primarily due to geopolitical tensions and supply chain disruptions. An abandoned truce between the US and Iran, bombings of Russian refineries, and damage to Saudi Aramco facilities have limited exports and tightened markets. These higher prices are passed through the economy, affecting everything from groceries to construction.
Maine's lobster industry, which supplies 80% of US lobster, is struggling with an aging workforce and high barriers to entry for new fishermen. Obtaining a commercial lobster license can take up to 15 years. A program called 'Lift All Boats' in Portland is working to introduce young people to lobstering, providing pathways for them to gain experience and eventually obtain licenses, aiming to ensure the industry's future.
The United States' goods trade deficit shrank by about 4% in June compared to May. This narrowing occurred despite tariffs implemented by President Trump, which were intended to reduce the trade gap. Experts suggest that companies' efforts to restock inventories after geopolitical events contributed to the import fluctuations.
The tech sector in the US continues to have a high demand for computer chips imported from Asia. This demand persists despite trade challenges and geopolitical considerations, indicating the sector's reliance on foreign components for its growth, particularly with the rise of artificial intelligence.
Increased tariffs on goods from China have led to a drop in imports from that country, with other parts of Asia, particularly Southeast Asia, benefiting as trade partners. This shift indicates that companies are actively seeking alternative sourcing options in response to trade policy changes.
Establishing new domestic manufacturing facilities is a time-consuming process that requires years of planning and multiple layers of approval. This is a key factor for companies looking to source goods domestically, as it highlights the lag time in shifting supply chains.
A country experiencing a trade deficit may actually be seen as a positive indicator, suggesting that other nations are eager to invest and do business there. This perspective reframes the trade deficit not as a weakness, but as a sign of confidence in the domestic economy.
Stacy Vanek Smith suggests that tariffs have become like 'economic wallpaper,' having an impact but no longer commanding significant attention. She notes that in 2025, tariffs cost households an estimated $1,000, a figure expected to increase, contributing to consumer difficulties with inflation and stagnant wages.
Courtney Brown argues that despite potential distractions like the Middle East conflict, the President is committed to his tariff agenda, having chosen to 'double down' rather than backtrack. She highlights that this decision signals a seriousness about the trade agenda, contrary to some predictions.
Stacy Vanek Smith reports that oil prices have risen back to around $90 a barrel, attributed to the closure of the Strait of Hormuz. This price increase is seen as negative for both consumers and businesses, exacerbating existing concerns about inflation and rising costs.
Courtney Brown observes a confounding trend where the economy shows strong indicator-based performance, such as the lowest jobless claims in decades, but consumer sentiment remains very low. She questions the economic impact of this consumer dissatisfaction, suggesting a potential pullback in spending.
Stacy Vanek Smith expresses surprise that consumers continue to spend robustly despite real wages not keeping pace with inflation and rising consumer debt. She questions how long this trend can be sustained, given the increasing borrowing costs.
Courtney Brown poses a question for Fed Chair Kevin Walsh regarding how rising borrowing costs might affect the Federal Reserve's outlook. She speculates if these market-driven increases in yields might mean the Fed doesn't need to be as aggressive with future rate hikes.
Stacy Vanek Smith asks Federal Reserve Chair Kevin Walsh how he plans to navigate a difficult economic environment. She points out the dilemma of potentially not raising rates due to an anemic job market and high borrowing costs, while cutting rates seems risky with inflation potentially rising.
The podcast discusses rising bond yields, attributing them to persistent inflation and the government's increasing debt. This trend is noted to be impacting borrowing costs across the economy, with 30-year mortgage rates reaching their highest in almost a year.
Chris Duncan of LaSalle State Bank notes that interest on business loans hasn't changed much recently as the Fed held rates steady, but anticipates increases. Factors like rising deposit costs for banks and higher energy prices affecting borrowers in industries like timber and trucking could lead to more expensive business loans.
Intel reported a 25% increase in sales last quarter, its largest in over 15 years, largely due to surging demand for its CPU chips driven by AI. This turnaround is significant as American taxpayers, through the Trump administration's CHIPS Act grants, own nearly 10% of the company, now valued at approximately $40 billion.
Chris Miller attributes Intel's comeback primarily to the surge in demand for its CPU chips driven by AI, which has boosted revenues and stock price. Analyst Angelo Zino notes that government support, including the CHIPS Act, has helped Intel expand manufacturing capacity, influencing other investments and potentially positioning companies like Nvidia favorably with the US government.
Jay Goldberg of C-Pour Research Partners reports that the Trump administration worked behind the scenes to encourage big tech companies to partner with Intel. This encouragement led customers to find value in Intel's offerings, resulting in increased sales in the short term, though Goldberg expresses doubts about the long-term policy implications.
Monica Petrucci of Forbes notes that functional beverages, offering health benefits or nutritional value, are becoming widespread, moving beyond niche markets to places like Starbucks and Walmart. This trend is partly driven by younger consumers like Gen Z and millennials drinking less alcohol and seeking benefits like hydration or better digestion.
The podcast discusses the expectation of rising consumer and business loan rates, even as the Federal Reserve has held its rates steady. This is attributed to factors like persistent inflation and banks potentially needing to pay more interest to depositors, which would translate to higher loan rates for customers.
Douglas De Stefano discusses a trend of people seeking career changes post-pandemic, looking for better work-life balance, improved pay, and more meaningful work. He shares his own experience transitioning from big tech to a conservation business after being laid off, highlighting the appeal of this new career path.
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