People are noticing “recession signs” everywhere. What does the data say?
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What are the recession indicators currently noticed?
Good morning. It's Thursday, May 8th. I'm Shamita Basu. This is Apple News Today. On today's show, the Vatican's messy financial picture, why more states are considering taking fluoride out of the public drinking water, and an AI-generated video allows a dead man to confront his killer. But first, in the past few weeks, there's been a lot of talk of recession indicators. Some of it's been in the form of snarky memes online in response to the seesaw tariff policy from the Trump administration. Some of it is trying to translate the general sense of economic anxiety and figure out whether it's a temporary blip or here to stay. Economists are trying to sort out what's anecdotal, vibes-based, if you will, from what's showing up in the data.
Take McDonald's, which recently saw a drop in spending in U.S. stores, as acknowledged by their chief financial officer on a recent earnings call.
People are choosing either to skip breakfast or they're choosing to eat at home for breakfast. And I think that's more to explain what's going on in the U.S. versus any kind of
How are businesses responding to economic uncertainty?
And The Washington Post reports that a number of major airlines have withdrawn their financial forecasts for the year, uncertain about how things are going to shape up. Companies like Procter & Gamble, responsible for so many of our household brands, are raising some prices. Mattel, the makers of Barbie, have also said their prices will go up due to the administration's tariffs on China. And for smaller businesses, the effects of the tariffs will be harder to mitigate. CNN spoke to Stephen Borelli, the CEO of a California-based clothing store, Cuts, about his concerns.
When the 145% tariff hit, it caused a lot of stress on our business where we had to raise prices and it caused demand to go down a little bit. And I just want to reiterate, I am a Trump supporter and I believe he's going to figure out how to help us out. But I just want to say that, you know, cuts represents the small businesses and the American dream. And the 145% tariff really threatens that.
Meanwhile, if you zoom out and look at the larger economic picture, many of the key economic markers have largely remained steady. Yesterday, Fed Chair Jerome Powell kept interest rates unchanged, but said the path ahead was not clear.
What is Jerome Powell's outlook on the economy?
My gut tells me that uncertainty about the path of the economy is extremely elevated and that the downside risks have increased. The risks of higher unemployment and higher inflation have risen. But they haven't materialized yet. They're really not in the data yet.
In other words, what he's saying is there's uncertainty, sure, but those recession indicators are not jumping out to him right now. Overall, consumer spending hasn't fallen yet. The labor market has remained strong. But some economists believe it will only be a matter of time before the tariff policy back and forth does, in fact, start to show up in data. The New York Times reports that for some economists, the uncertainty feels a bit like hunting for clues during the pandemic. Back then, things like a drop in restaurant reservations and screenings at TSA checkpoints were signals of potential economic damage to come. But one challenge the Fed now faces, as Powell said, is trying to decide whether to focus more on the risk of rising unemployment or inflation going up. If consumer confidence is low, then demand may fall. Just ask the McGriddle. And it is still possible that the current tariff outlook could change.
In fact, this weekend, Treasury Secretary Scott Besant is scheduled to meet with Chinese officials to discuss trade. Though Trump said yesterday he does not plan to change the tariffs in advance of the meeting to secure a deal. Let's turn now to a huge problem the new pope will inherit, the Vatican's extremely messy finances. The combination of deficit spending and financial mismanagement has driven the Vatican into unsustainable debt. When Pope Francis was elected in 2013, he was given a mandate to fix this problem, but it only got worse. The Vatican's deficit tripled during his tenure, though to be clear, he did try to push for reforms.
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Chapters
5 chapters
1
What are the recession indicators currently noticed?
0:05–1:18
2
How are businesses responding to economic uncertainty?
1:18–2:29
3
What is Jerome Powell's outlook on the economy?
2:29–4:39
4
What financial challenges does the Vatican face?
4:39–8:27
5
Why is Utah banning fluoride in drinking water?
8:27–14:37
Speakers
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