Chapter 1: What are the caveats of the November CPI report?
I got some good news on inflation and I got some bad news on inflation. From American Public Media, this is Marketplace. In Los Angeles, I'm Kyle Rizdahl. It is Thursday today. This one is the 18th day of December. Good as always to have you along, everybody. You have seen or heard the headline by now, I'm sure. November inflation came in lower than a lot of people had been guessing.
Consumer prices were up 2.7% over the past year, so said the Bureau of Labor Statistics. But, and, hang on a minute, because there are some caveats. For one thing, there was no CPI for October to add into the data mix. And for another, the BLS didn't start collecting price data for November until about halfway through the month. Thanks again. Shut down.
Marketplace's Henry app now on what this report can and cannot tell us. This report shows that our long national nightmare of fast rising prices is coming to an end, right? So this is not a good guide as to what is going on with inflation. Hmm. Omer Sharif leads the firm Inflation Insights.
He says this report is just not giving us the whole picture of consumer prices because we're missing October. So we can't compare how prices might have moved month to month. And then the data BLS did collect only captured the second half of November.
Most people are pretty familiar with the idea that the back half of November, you get a lot of deals and discounts around Black Friday and Cyber Monday and so on. Meaning a lot of the prices the BLS captured were discounted for the holidays. electronics, appliances, things like that. Some of those things were weak, I think, partly because of this data collection issue.
No data collection for six weeks may also have skewed another big item in the report. Shelter, meaning what we pay to rent or own homes. Yelena Shalyetova is senior U.S. economist for the conference board. She says those shelter numbers might be too good to be true. And if you look at the data, you see that, you know, shelter prices are growth slowed very significantly in November.
So for now, let's take that with a grain of salt. But pair this inflation report with the delayed November jobs report, and you can get a rough idea of what's going on in this economy, says Anne Owen at Hamilton College. Big picture, we're seeing a weakening labor market, maybe inflation that's relatively stable, possibly coming down a little bit. but still above the Fed's 2% target.
And those two things could be related, Owen says. If people are pulling back on spending because the job market is weakening, that could lower inflation because there'd be less demand for goods and services. That's not a sure thing, though. We'll need data from December to get a better sense. But the problem with waiting, says Laura Veldkamp at Columbia Business School, is it leaves us guessing.
We don't know what we're missing, but that's a big deal, because any time that you raise uncertainty, you're going to cause people to pause. Uncertainty, she says, can be its own kind of economic drag. I'm Henry Epp for Marketplace. Wall Street on this day of soft-ish inflation. Equities loved it. Bond traders did, too. We will have the details when we do the numbers.
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Chapter 2: How is the housing market expected to change by 2026?
That's Trina Eigelsrud-Pfeiffer. The university brought her in eight years ago to help find new uses for coal as demand from power plants has steadily declined since 2008. It was Wyoming's economic need to make sure that coal stayed relevant and viable and that the coal towns actually kept people employed and, you know, businesses running and things like that.
Eigelsrud Pfeiffer says her team's research proves coal can be used for construction materials like the bricks or road paving or a soil additive for crop fields. And like, do the yield, I guess the crop yield that comes out, does it have like a coal film on it? No. Oh, no, no, no, no. So sugar beets grown with the help of the coal additive don't come out dusted and black.
But it's worries like that that are tricky to overcome. Eichelzud Pfeiffer said that for a long time... We didn't even use the word coal. We said carbon ore. Because of the CO2 issues and things like that, it was the bad actor, if you will. Burning coal releases emissions that are harmful to our health and the environment.
But Eichelsrud Pfeiffer says that's not the case for these alternative uses. And getting that point across to the public can take a lot of clever marketing. It's a strategy called repositioning, something Boston University professor Susan Jung-Grant studies closely. You have to start with the associations that people have, whether they are positive, negative, or neutral.
John Grant says repositioning usually happens when interest in a product is waning. Old Spice, for example. 1970s commercials show weathered sailors and farmers lathering up with the brand's products. Shaving soap and aftershave. Come on, wake up to the freshness of the open sea with Old Spice and get a super smooth shave. John Grant says it was viewed as old, something for your dad.
Or your grandfather. And it had a very stodgy image. Hello, ladies. Look at your man. Now back to me. Now back at your man. Now back to me. But newer ads show a shirtless, fit man sitting on a white horse on the beach. He could smell like he's mean. Anything is possible when your man smells like Old Spice and not a lady. I'm on a horse.
Old Spice is now a deodorant, shampoo, body spray, and is used by younger brothers, boyfriends, teenagers. It's become redefined, and it has a lot of humor in the way it's introduced. So that's repositioning, which is kind of what coal in Wyoming has to do. But it's a bit harder for a so-called climate change bad actor than an old-timey cologne. And the stakes are big here, too.
University of Wyoming economics professor Rob Godbey says that's because Wyoming needs to find a home for its coal. What we really want is a lot of volume. This year, demand for Wyoming's coal for electricity has been terrible. It's shaping up to be the second worst year ever for the industry.
So the idea would be, what if we could find a product you could use coal for that has a large market, right? A large market like, say, the construction industry. But Wyoming has to convince builders that bricks made out of coal are a great idea. And that has to happen quick, says Godby. That's the real problem.
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