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Chapter 1: What economic data is highlighted at the beginning of the episode?
Storms, floods, and fires are ever more extreme. And yet, the Federal Emergency Management Agency is fighting for its life.
I've never been a big fan of FEMA. FEMA's a disaster. FEMA's a dirty word. People are waking up in droves to the FEMA camps. Can the agency survive the stories that have been told about it?
And can we survive without FEMA? American Emergency, the movement to kill FEMA, is a brand new series from WNYC's On The Media. Listen wherever you get your podcasts. We'll do some oil, we'll do some data, and we'll wrap it all up with a nice bowl of beans. From American Public Media, this is Market Class. In Los Angeles, I'm Kai Rizal. It is Thursday today, the last day of April.
Good as always to have you along, everybody. There is some economic data with which we could begin today, and we will get to it in a minute, I promise. But we're going to start instead with a number. That number is 126.41. The proper denomination is U.S. dollars. The commodity associated with it
is Brent North Sea Crude, which in the wee small hours of this morning hit the aforementioned $126.41 a barrel. That's June delivery, which is to say the future's price.
Now, as we sit here at the two-month mark of the most severe energy shock the world has ever seen, as every day countries are chewing their way through their inventories and ever less oil is being produced and delivered, the competition for those barrels gets steeper and steeper.
And that is showing up in futures market, yes, which I just talked about, but more significantly in the physical market for oil, the very high price you will pay to get a barrel delivered to you today. The thing is, as Marketplace's Elizabeth Troval reports, that spot price isn't what financial markets tell us it should be.
Let's say I'm trying to buy a million barrels of crude oil. I had a contract from a producer in the Middle East, but that oil is tied up in the Strait of Hormuz. So I need oil now on the spot market for a lot more money. Joe DeLora is with Rabobank.
The physical market is skyrocketing.
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Chapter 2: How is artificial intelligence influencing GDP growth?
in the last three months of last year. Part of it was the pickup and the end of the longest ever government shutdown. Daniel Ackerman has the rest of it. A big reason for last quarter's GDP growth was, you guessed it.
It looks like a lot of that is AI-related investment.
Incredibly strong growth in anything that is AI-related.
You have the spending on actual equipment, like data centers showing up in there, and then you have businesses investing in different types of AI software.
That was Ishwar Prasad of Cornell, Michael Pierce of Oxford Economics, and Shannon Grein of Wells Fargo, all in agreement that AI is pretty much driving economic growth right now. Pierce says it's not just that businesses are pouring money into AI.
But also the boost that that's providing to the stock market.
Pierce says that strong stock market is in turn propping up the top contributor to the US economy, consumer spending.
even though it's going to higher income, older, wealthier households, they're responsible for a lot of the spending in the economy.
Pierce says some of the AI excitement is ironically limiting economic growth because U.S. firms are sending money abroad to import chips and computer parts.
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Chapter 3: What are the implications of rising crude oil prices on the economy?
Construction is happening. Equipment is being used. And Kate says companies like the chipmaker NVIDIA are making revenue from sales, not just relying on investment.
This is not pets.com that never made a single dollar and always ran negative profits.
Looking ahead, Shannon Grein of Wells Fargo says she'll be watching consumer spending for hints of where GDP might be headed later this year.
Just in the wake of the ongoing conflict in Iran, sustained inflationary pressure, the slowing labor market, all of these sort of headwinds that are facing the consumer sector.
Today's report showed a slowdown in consumer spending on goods. If it continues, Grein says that could be a drag on economic growth. I'm Daniel Ackerman for Marketplace. As we are wont to do when we get a whole lot of macroeconomic data, as we did today, the micro is where we turn. We've called two of our retail regulars to get their take on things from the other side of the cash register.
First up, Kalina Bruce. She runs Noir Lux Candle Bar up in Seattle, Washington.
Business is pretty steady. We've definitely been feeling the shifts in consumer spending over the past year. And so I think that shows up in like a slight dip in overall sales. But We're kind of leaning into our existing partnerships and more community driven events. We recently just opened a pop-up space in downtown Seattle. FIFA will be in Seattle in a couple of weeks.
And so there's a program called Seattle Restored, which is really focused on activating a lot of the empty retail spaces in downtown Seattle. And so as participants of that program, we have a new space for six months. We're really hoping to see an increase in spending while FIFA is here.
But also if this particular location works out, we're hoping to explore a long term kind of permanent space here. Our costs continue to increase over several areas, particularly as it relates to our cost of goods, our raw materials, shipping. We're always trying to source locally to kind of help offset some of the cost increases.
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Chapter 4: How is the airline industry facing a technician shortage?
If you're working at a smaller place, you're probably not going to be making $81,000 right out of school.
Right. You mentioned that there's a retirement cliff coming here. I'm obliged to note that if I could sort of torture this metaphor here for a minute, that much as the people working on the planes are not young, the planes themselves are not young. They need more maintenance and there's a huge backlog of new plane orders.
That's right. And so that means the work is mounting. So there's a lot of demand. So airlines have ordered more planes, but because they're not being delivered, they're holding on to the older planes for longer.
What's your sense of, you know, with this retirement cliff coming and with the long train up time that it takes, it's going to be a while before airlines and aviation in general get out of this jam.
That's right. And next year, 2027, is predicted to be the worst in terms of the shortage. So in North America, there will be about 7000 fewer certificated mechanics than are needed. Hmm. So it's going to take a while. And there are, as we mentioned, lots of things in progress, but you can't speed it up to the point where people aren't getting their training.
And you're also losing, as these retirements happen, you are losing some of the most experienced people who have worked with these planes for the longest. So more people are coming in, but it does take a while to get better at the job, even once you've been hired. Right.
We should say here on the way out that for those of you who are nervous flyers, commercial aviation is still incredibly safe. Just want to point that out.
It's incredibly safe.
That's right. Alison Foley with The Wall Street Journal. Alison, thanks a lot.
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Chapter 5: What challenges are retailers facing in the current economic climate?
Bonds up. Yield on the 10-year T-note down 4.37 percent. You're listening to Marketplace. Storms, floods, and fires are ever more extreme. And yet, the Federal Emergency Management Agency is fighting for its life.
I've never been a big fan of FEMA. FEMA's a disaster. FEMA's a dirty word. People are waking up in droves to the FEMA camps.
Can the agency survive the stories that have been told about it? And can we survive without FEMA? American Emergency, the movement to kill FEMA, is a brand new series from WNYC's On The Media. Listen wherever you get your podcasts. This is Marketplace. I'm Kai Risdahl. Back to the retail counter we go, where Dylan Demery is the owner of She's Fly.
That's a women's fly fishing company in Fort Collins, Colorado.
So the retail side of the business this year has been very slow. We've seen a definite drop year over year. I haven't seen as much spending on gear or even just She's Fly merchandise this year at all. I'm seeing the bulk of our sales are coming in the form of retreats. So people are booking retreats, which is nice.
About monthly, I will go through our store, our online store, and make sure that the prices we have are what the suppliers are selling for. Actually, the waiters went up, I'd say probably 20%, and then fly rods went up a bit. But that could be attributed to a new design with the fly rod maker we're working with. fly fishing gear can get very, very, very expensive very quickly.
And we try to stay in that mid or lower range because so many of our clients are beginners. And we always say the fish don't care what rod you use when you get out there. The things that keep me up at night are lately, it's been the problem with the airlines and jet fuel. So that is going to impact our Because they are kind of all over the country.
We have a retreat in New York in September and we haven't bought our tickets yet because we just don't know what it's going to look like. We also usually would fly in and out of Bozeman and Montana for that retreat. But... We are not sure if the flights are going to be affordable enough. And so now we're considering driving. And then with the gas prices to drive up there.
So we're just saying, what's going to be the lesser of two evils here? Do we drive? Do we fly? How's that going to work out for the business? So, yeah, it's been definitely a curveball. We didn't expect. I did not expect that this year.
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Chapter 6: What is the significance of the bean craze in today's market?
Yes, exactly. I was supposed to say, actually, the cottage cheese thing is still going very strong, at least in the UK. But beans are definitely part of that. People are really trying to find ways of getting lots of their nutrients. Even high-protein yogurts are selling like crazy. And a lot of backlash against processed foods. And so I think people are just really excited about things that are
much more just pure nutrients and things that are easy to cook. I should say also convenience is a huge factor here too. Like one of the trends you see in the US is a lot of people who want nicely seasoned beans that they can just open a packet or open a can and just heat them up and go. And so that is something that's taking off a lot more in the U.S. too.
So that convenience factor is a major part of this.
I will say, scoff though I did as I dug into your piece, because I was like, come on, beans. There was a recipe there. I forget who the TikToker was who did it, but it looked pretty appetizing. It was this pesto-y kind of thing with some burrata on top. I mean, you know, I would try that.
Yeah, yeah, that's Natalia Rudin, who is, you might know her better from her handle, Nat's Nourishments.
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Chapter 7: How are consumer preferences shifting towards beans?
And she kind of took off because she used to be a personal chef and she would do these series about, you know, what she would cook when she got home. And she's made beans look a lot more appetizing. And Bull Bean Company, part of their whole mantra as well is trying to teach people how to cook with beans. So they have lots of great recipes.
I did like a cacio e pepe bean recipe, which was actually delicious. So I think there are ways of making the very humble bean a lot more interesting.
So you're a believer, if you will.
They converted me. I am now one of those people who is spending more than three pounds on jar beans, unfortunately. But they're very, very good. And actually, my parents are coming from the U.S. and they are bringing a bunch of other bean products that I want to try from America. So it's happened. They've got me.
You're all in. Jillian Deutsch at Bloomberg in London. Jillian, thanks a lot.
Thank you so much for your time. Appreciate it.
This final note on the way out today in which we started with a number, we will end with a number 100.2. That is the percentage of our total national debt held by the public as compared to the total size of the U.S. economy. That is, we owe more than the whole economy is worth. The data came today from the Bureau of Economic Analysis.
There are some technical bits of that that we honestly don't have time for, and there is nothing magic about 100% versus 99%. But here's a fact. The more we owe, the more we spend on the interest on what we owe, which means there's less to spend on everything else.
Also, and not for nothing, I always find it curious that when the federal debt and deficit are mentioned, it's only spending cuts that are talked about, not, shall we say, the revenue side of that equation. Our daily production team includes Livvy Burdett, Andy Corbin, Maria Hollenhorst, Sarah Leeson, Sean McHenry, Michaela San, and Sophia Terenzio. Will Story is the supervising senior producer.
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