Chapter 1: Why are consumers feeling worse about the economy this year?
Yes, it's true. Stocks do go up as well, gang. We will talk about that and the week that was. From American Public Media, this is Marketplace. In Los Angeles, I'm Kyle Rizdahl. It is Friday today, Friday, Friday. This one is the 6th of February. Good as always to have you along, everybody.
Let us state right here at the outset that even if one were inclined to believe that the stock market is the economy. Two days trading is a very small data set on which to base your analysis. And in point of fact, one might do better taking, oh, say, the past five days in our collective economic lives as a guide. So that is what we are going to do.
Courtney Browns at Axios, Heather Long is the chief economist at Navy Federal Credit Union. Hey, you two.
Hi, Kai. Hey, Kai.
Heather Long, let me begin with you. And I will acknowledge here that none of the three of us are market analysts in any way, shape or form. But as a way to get on to the equity markets in a roundabout way, could you discuss for me, please, the fundamentals of this economy right now? What do you think?
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Chapter 2: What are the main concerns driving consumer sentiment?
Well, you're right. There's two big factors at play. Number one is the one we always talk about, and that's what's the consumer doing. And that's where you see the K-shape economy with the top 20% really driving the spending growth right now and everybody else kind of hanging on or treading water. And then the other big one is the AI economy.
And it was just staggering this week as all these big tech companies said they're going to invest $600 billion in AI this year, which is greater than the budget that the entire Japanese government or German government spends on their countries. I mean, that's how mind bogglingly large this is. And so I think you're right. You look at these equity markets and you almost want a reality check.
I mean, nobody wants these stocks go down, but you sort of say, we need a breather here. You know, people need to look around and, and just sense check a little.
Courtney, you and your colleague, Neil Irwin wrote about the whole AI spending thing this week. Is it, it is an insane amount of money. How can it possibly be sustainable?
That's the big question. I think we, as you know, reporters who are very interested in the economy, we see these announcements and we're thinking about how is this going to filter through to the economy? Is it big enough to boost GDP numbers? And these numbers, as Heather said, are quite large.
I think the question is, do we continue to see this wild disconnect between like pretty healthy GDP numbers helped by some of those capital expenditures from AI firms against this kind of dismal backdrop of the labor market that's just been frozen, low hire, low fire. Does the high GDP number translate into a boost for the labor market? I mean, that's the big question.
It is indeed. Heather, you know, I don't know if you saw Mary Daly, the president of the San Francisco Fed, has come out in the last, I don't know actually if it was this morning or yesterday, but basically said, you know, we're in low hire, low fire, and she's worried about sort of a no hire economy. This labor market, I mean, ADP this week, 22,000 jobs, way low. The jolts was kind of mad.
The indicators on the labor market are not great.
They're not. I've been calling it a hiring recession.
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Chapter 3: How is AI investment affecting the economy?
It's very clear that there's no hiring going on outside of health care. And you're right. What was telling to me this week was seeing the big decline in job openings. So not only have companies not been hiring, now they're not even thinking about hiring. They're not even putting the pretend job opening up on the labor market website anymore.
And in particular, the big pullbacks in those job listings were professional and business services, finance, which is an interesting one, and then healthcare, right? So healthcare, the one big driver of job, any hiring that has been happening has even seen a pullback. I will say... This is frustrating. This is a jobless boom, strong GDP, no hiring, hiring recession.
But I do see that it's not getting worse. I expect when we finally get that government jobs data next week that we'll see something that doesn't feel great, but it's not getting worse.
Not getting worse is kind of a low bar there, Courtney Brown.
I know, to play devil's advocate. I think the question is, is it getting better? Maybe it's not getting worse. Is it just staying in kind of that frozen position that we've been in for the last couple years? Or is there signs of improvement? Are companies opening the spigot? I mean, It just, it doesn't look like it. It looks like we're still stuck.
And that's frustrating if you don't have a job and you want one, or if you have a job and you want to leave it and maybe make some more money elsewhere, you're just stuck.
Courtney, let me stay with you for a second, not to continue the gloom and doom parade, but you and Neil wrote this week about tariffs and how companies are kind of sick and tired of accepting all the pass-through, right, and keeping consumers out of it as much as they possibly can.
And that might be yet another thing that's going to, number one, make inflation stickier and, number two, make consumers crankier.
Yeah, Neil and I, I think in our macro newsletter, we were a little gloomy this week, but that's only because we got some indicators that price growth was a little hot in January. And historically, January can be a hot-ish month for inflation, but even hotter than usual by some measures. We get CPI next week, of course, the Consumer Price Index.
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Chapter 4: What does the labor market look like currently?
It's not getting worse and we're hanging on to something, right? That's where we are?
I think to sum it up, it's a jobless boom and the middle class is frustrated.
Yeah. Yeah. Heather Long at Navy Federal Credit Union. Courtney Brown at Axios. Thanks, you two. Thanks.
Thanks, Guy.
Wall Street on this Friday after yesterday. Traders were, believe you me, buying the dip. Stock, crypto, you name it. Details, numbers when we get there. All right, so let's continue with that thread that Heather was pulling there up at the top of our little conversation. The American consumer, how we're feeling. And the short answer is not so great about the economy right now.
The latest sentiment data out today, in fact, from the University of Michigan, shows our mood has improved slightly. So slightly, in fact... that you might as well call it unchanged from the last reading. And if you pull back just a little bit, you'll also see we're all feeling 20% worse about the economy than we were a year ago. Marketplace's Samantha Fields has more on that.
At this particular moment in time, people are thinking most about kitchen table issues. Their top two concerns are the persistence of high prices as well as weakening labor markets.
Joanne Xu, who runs the Surveys of Consumers at the University of Michigan, says people are more worried now about the possibility of losing their job than they have been since the early months of the pandemic in 2020. The pain of high prices, that's something that has been cited by consumers for the last four years. But when it comes to the labor market, that's actually relatively new.
That only started to emerge last year. As a primary driver of consumer sentiment. Hector Sandoval at the University of Florida's Economic Analysis Program says that makes sense given all the headlines lately about layoffs and how companies aren't hiring.
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Chapter 5: How are tariffs impacting inflation and consumer prices?
So if you say, well, the stock market is up, and this is that, and gas prices are down, and this is that, blah, blah, blah, blah, things are going great, that's not going to land on me because I know what I'm experiencing inside of my own body.
And that matters more than news headlines. I'm Samantha Fields for Marketplace.
Whether your personal consumer sentiment about this economy is gloomy or cheery, there are some things you just gotta buy. Toothpaste, food, laundry detergent, the very broad category of goods called consumer staples. And shares of companies in that gotta buy sector are doing quite well right now, thank you very much. The S&P Consumer Staples Index up a bit more than 5% this week.
Money is flowing in there, even as it's flowing out of technology companies. Marketplace's Nova Sappho has more now on why investors are opting for the basics.
Alphabet, Amazon, Microsoft, and Meta just said they're spending $600 billion on AI infrastructure this year. And investors are wondering how that's going to affect profits.
There were some over-optimistic expectations for the AI sector.
Harul Jain is professor of economics and finance at Rutgers.
So there has been a little bit of a market drought. So it's basically the run-up and then the run-down that we're looking at.
And it's not only tech companies spending that's worrying investors. There are new concerns about whether AI could replace entire parts of the tech economy, like the need to buy new software when you could just ask AI to handle it. This is all leading to, say it with me, uncertainty.
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Chapter 6: What is the significance of consumer staples in today's market?
You name it, pretty much the government tracks it or has tracked it. The Trump White House has decided that maybe we don't really need to know quite as much about ourselves and has been quietly and not so quietly disappearing and or burying government data, economic and otherwise. Schiffer Dyack wrote about that the other day for Notice. That's news of the United States. Welcome to the program.
Thanks so much for having me, Kai.
How did you all come onto this story?
Yeah, absolutely. So we had been getting a few tips from different folks working in various policy sectors, whether research on maternal mortality, research on food insecurity and hunger and so forth, talking about how a lot of the data that they relied on to do their jobs was suddenly missing or they had limited public access to it.
And so we started to get the sense that this was kind of a trend spread across the federal government. And so what we really wanted to do was try and quantify it. And what we found was that it was a lot more wide ranging than we thought.
The Trump administration, since taking office, has really made sweeping changes to federal government data, and it has reverberated through basically every sector of public life, as I mentioned.
Give me a couple of for instances.
Yeah. So one of the first things that we kind of caught wind of was data on maternal mortality. It's a CDC database called PRAMS that has been kind of the foundation of maternal mortality research and infant mortality research for a number of years now. The CDC doing reductions in force this past year laid off essentially the entire team that maintained PRAMS data in April.
And so collection of that data seized for quite a few months. It's since gotten back up and running, but a lot of the folks we talked to told us how the delays in this data really affected their work and will continue to do so for a number of months. And so it's reverberated to state health departments essentially across the country as well.
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Chapter 7: What changes have occurred in federal data under the Trump administration?
And like I said, a lot of the effects are really only going to come to light a few months down the road. And so even beyond the Trump administration, regardless of what comes next, we're still going to be seeing kind of a lot of the reverberating effects of the policy gaps that this has caused.
Schiffer Dyack, she's at notice. Schiffer, thanks a lot. I appreciate your time.
Yeah, thanks so much, Kai. I appreciate it.
While data is disappearing, as Shepard Dyck was just saying, not all of it is gone quite yet. To wit, the job openings report we got yesterday. From November to December of 2025, job openings in the arts, entertainment and recreation sector fell by 18,000. The performing arts is, of course, a challenging industry in which to get started and maybe a tougher industry in which to run a business.
Here's today's installment of our series, My Economy.
My name is Joe Gonzalez. I am currently live in a little bit of both Massachusetts and New York. I am co-founder and executive artistic director of my own company called Joe May Dance Theater, as well as a performing artist and associate artistic director of Complexions Contemporary Ballet in New York City. My first dance class, I was 11 years old. My mom saw me dancing around the house.
And, you know, at the time when she did sign me up, I was actually mad at her. I was like, I don't want to do this. I don't want to dance. But once I got there, the first day instantly was fell in love. This is what I'm supposed to do. This is where I'm supposed to be. But back then, you know, we couldn't afford the thousand dollars a month ballet classes that were offered.
And so the director there was like, we can work with you, whatever you have. With my business partner, 2011 is when we founded our company. I was a senior in college. So we used to teach around all over Boston, like different studios, different community centers. And we found ourselves just like seeing a lot of talent out there.
And like, you know, most of these kids, they come from not well families or not financially stable or how can we make this happen? When I tell you at the beginning, we just did it basically from a shoestring and like a dime. And it is not fun doing taxes and accounting and bookings and contracts. Learning all of that was tricky. And it's still a fight to finance.
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Chapter 8: How does the performing arts sector reflect economic challenges?
I saw this in the Financial Times today. Data from the United Nations showing that international tourism to the United States last year fell 4.2 percent. See me after class if you need an explanation. Not coincidentally, the U.N. says tourism and international travel globally was up 4 percent. That is lots of people traveling going places other than here. Our theme music was composed by B.J.
Liederman. Marketplace's executive producer is Nancy Fargali. Joanne Griffith is the chief content officer. Neil Scarborough is the vice president and general manager. And I'm Kai Rizdahl. Have yourselves a great weekend, everybody. We will see you again on Monday, all right? This is APM.