'Tis the season of holiday bonuses ... for some
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Why are holiday bonuses declining in the current labor market?
A look back at the big economic trends of 2025 and what's ahead for 2026. We'll have our last weekly wrap of the year. From American Public Media, this is Marketplace.
In Washington, D.C., I'm Kimberly Adams in for Kai Rizdal. It's Friday, December 26th. Good to have you with us. This is the last Friday of 2025, meaning it's also the last weekly wrap of 2025. So to look back and a little bit forward at the economic year that was, we've got Courtney Brown at Axios on the line and Rachel Siegel at The Washington Post. Hey, you two.
Hi, Kimberly.
Hi.
Thank you for joining me this holiday week. Courtney, I want to start with you because there were a bunch of big economic themes this year. And one in particular that showed up in this week's GDP report is this ever resilient American consumer. Doesn't matter if we've got tariffs, bad consumer sentiment, whatever. People are still spending. Courtney, you've been writing about this. Why?
I also am curious and surprised by the resiliency of the American consumer. And this isn't the only year that we're having this conversation about consumer resiliency, right? This has been the story of the U.S. economy for a while now. I think what makes it the most shocking is some of the factors that you mentioned that are new to the economy this year. Tariffs, for instance. We've seen the consumer continue to spend despite some tariff-related price increases. And I think the big question for my reporting in 2026 is how much longer can this continue, especially as the labor market starts to look a little bit more rocky? Will consumers keep spending or will they start to be more cautious? That's a massive question for the economy going into next year.
Rachel, what's your take? Why do you think people are still spending and what might stop them?
Well, I completely agree with everything that Courtney just said. And I also feel like it's hard to parse out different stories coming from different types of consumers and different types of spending too. So there's this big looming question about higher end consumers, how much they're willing to absorb, how much bandwidth they continue to have for higher prices. And then I feel like there's this sort of additional question that follows from there of how much that kind of spending impacts is dwarfing lower income consumers or people who are not necessarily the drivers of that kind of consumer spending, economic growth. And I feel like the kind of big numbers, the resilience and those higher end consumers has a real ability to kind of dwarf the story that's happening on the lower end of the income spectrum.
And I'd be really curious to see what happens there, too. You know, if there are ways that lower income consumers continue to change their spending, ways that they shift to, you know, different types of stores, different types of saving, and what both of those stories tell us about the economy moving forward.
Well, that ties to another one of the big themes of the economy this year. So let me stick with you for a second, Rachel, about the K-shaped economy, as we call it. And I mean, this was a big topic during the pandemic, but kind of receded into the background a bit because we did see a lot of that wage growth coming out of the pandemic, boosting lower wage workers. Why is this coming back now, this big divide and what seems to be getting a bigger divide between higher and lower income consumers?
Yeah, I feel like some of it reflects back to what we were just talking about, the makeup of the kind of spending that we're seeing in the economy, who's sour on the economy, who continues to maybe not even have had that kind of jump in sentiment in the first place. And I cover housing, so if I was just putting my housing hat on for a minute, I feel like there were kind of a lot of unfulfilled hopes and expectations and promises that maybe we're supposed to make that gap a little bit narrower, right? We were supposed to see all of this new housing come online and maybe rents were going to fall and all of that new supply was going to make housing more affordable and maybe interest rates were also going to come down.
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Chapters
5 chapters
1
Why are holiday bonuses declining in the current labor market?
0:01–5:42
2
What historical factors influenced the creation of Play-Doh?
5:42–11:43
3
How did the pandemic impact consumer spending trends?
11:43–17:55
4
What is the significance of the K-shaped economy in today's market?
17:55–23:22
5
How is the anime industry performing in 2025?
23:22–26:53