Chapter 1: What were the surprising factors contributing to GDP growth last summer?
You got your lagging economic indicators, and then you got your lagging economic indicators. From American Public Media, this is Market Class. In Los Angeles, I'm Kai Risdahl. It is Thursday, today, 22 January. Good as always to have you along, everybody. The macroeconomic news of the day is brought to us today by the letters P, C, and E. The Personal Consumption Expenditures Price Index.
It is for November, mind you, so a bit delayed. Thanks, shutdown. Came in this morning at 2.8%. That is higher by just a touch from October.
I'm Nina Eichacker, and I am an associate professor of economics at the University of Rhode Island.
I'm Laura Veldkamp, and I'm the Cooperman professor of economics and finance at Columbia Business School. You can also just shorten that to Columbia Business School professor or Columbia professor.
Noted.
Services, shelter, and food are still really expensive, and they're not slowing down.
We also have had consistently strong demand in the past few months. You know, surprisingly strong given everything that happened in the preceding year economically.
Now, caveat emptor, because again, November.
It's not really a snapshot of what prices are doing today. It's a snapshot of what prices were doing, you know, in October and November when, you know, when much of this data was collected.
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Chapter 2: How are private sector services driving economic growth?
He says the strength of the service sector is one big reason we're not in a downturn.
We aren't a goods producing organization. country anymore, you know, despite all the focus this year on goods and bringing manufacturing jobs back home.
Two other reasons we've stayed out of a downturn, Anderson says, consumers who keep on spending and tech companies that keep on investing in AI infrastructure. I'm Stephanie Hughes for Marketplace.
On Wall Street today, generally upbeat. We will have the details when we do the numbers. There is, perhaps, no phrase in all of economic reporting that generates more panic than these four little words. Too big to fail. Think back with me now, if you would, to the Great Recession, the subprime mortgage crisis, the bank failures, and then the very long and very slow recovery.
You know, if Institution X collapses suddenly, the damage spills so fast into the real world economy that the state steps in to prevent disorderly failure.
James Van Geelen is founder and CEO of Citrini Research. Orderly failure is fine. Disorderly failure, definitely not fine. The government tried to limit disorderly failure back in 2008. It spent hundreds of billions of dollars to bail out the big banks, got all of that money back, I do have to point out. It took over Fannie Mae and Freddie Mac. It tightened up banking regulations, too.
But why are we talking about this today? We're talking about it because there is a slice of this economy that a simple Google search will tell you is making too big to fail popular again. Artificial intelligence. You probably heard me say in the past couple of months that big tech companies spent something like $400 billion last year building data centers.
In the first half of 2025, they spent more than consumers did, which, again, you hear me say this a lot, consumer spending literally drives this economy, and AI spending was beating that. Not only that, but a lot of AI spending is, for lack of a better word, circular. Just for instance, and this is a real example, Microsoft invests $13 billion into OpenAI,
Then OpenAI turns around and invests right back into Microsoft for its cloud computing capacity. Too big to fail. So next week, we're starting a series on AI and you, the infrastructure being built around it, and whether there is that systemic risk. Let's go back to James Van Geelen.
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Chapter 3: What role does consumer spending play in the current economy?
These companies, some of them have borrowed financing. They've taken out loans. They've borrowed money through the bond markets.
Amazon and Meta, Alphabet and Oracle all sold bonds last year to fund data center construction. For Meta, it was $30 billion worth just in October, the single biggest offering in the U.S. high-grade bond market last year.
The payoff, A, is uncertain, and B, for some of these companies, it's readily becoming apparent that the payoff will be pretty far down the line.
Banks are in the data center financing mix as well. Last year, JPMorgan Chase and a Japanese bank agreed to finance $23 billion in data centers for Oracle.
The question is, will they be able to honor those debts or will they default on them? That could trigger the failure of at least one large financial firm to whom it owes money. And then the financial firm's failure could could set off a domino effect.
Domino effect, another phrase perhaps for systemic risk.
Time and time again, if there is a group that is about to trigger a panic, the federal government has blinked.
That's why we're having this conversation, because the bigger AI gets, the more bonds sold and data centers built by a small group of companies that are all interconnected, the bigger influence this industry is going to have on every part of this economy. So next week on this program, what that looks like on the ground.
One of the side effects of this digital economy of ours, an unintended consequence perhaps, is that it is also now an attention economy, not an original idea of mine, to be clear. That plays out in all kinds of ways, specifically for us right now in corporate marketing. Gap has decided it's going to move beyond just marketing to media.
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Chapter 4: How is the tech industry influencing GDP growth?
Warner Brothers dipped six-tenths percent today. Netflix, which has been trying to buy Warner Brothers, fell two and a tenth percent. Focus Features belongs to Comcast. It gained one and two-tenths percent on the day you're listening to Marketplace. This is Marketplace. I'm Kai Risdahl. When one speaks, as we were up at the top of the program yesterday,
about the rising cost of things in this economy, goods specifically, stuff, we don't usually think about the cost of the packaging that those goods come in. On its earnings call this morning, though, McCormick, maker of Old Bay Seasoning, among other spices and sauces, said indeed its packaging costs were up last quarter.
Marketplace's Daniel Ackerman has more on the changing market for that packaging.
The Old Bay in my pantry comes in a plastic container, but that's because it's been sitting there for like a year. McCormick just switched packaging for their Old Bay seasoning to tin plate. Matt Reynolds is chief editor at Packaging World magazine. And he says the new tin and steel can looks better on store shelves. Customers can reuse it. That also has a lot of nostalgic vintage kind of feel.
But those nice vintage cans are getting more expensive, in large part because of 50% tariffs on imported steel and aluminum. Jason Miller is a professor of supply chain management at Michigan State. If you're a canned food maker right now, 2026 is looking to be quite a rough year from a budget standpoint. But he says the picture is not nearly as dire for some other kinds of food packaging.
On the plastic side, we haven't seen really any price changes that are worth noting. Plastic is made from oil, the price of which has been low of late. Plus, plastic along with glass and cardboard are largely made in the U.S., so tariffs are less of an issue for now. But they could be in the longer term, when those packaging factories need an upgrade.
A lot of the equipment that is used to make any kind of packaging, it's not always made in the U.S.A.
Ryan Fox is a corrugated packaging analyst for Bloomberg Intelligence. So when you need replacement parts, when you need service... Those tariffs affect the supply chain. They affect pricing for those parts. There is one thing package makers have done to keep costs down, says Matt Reynolds of Packaging World.
We've all had the experience of having a sippa out of our Aquafina or a single-use plastic water bottle, and it's basically almost paper. It's so thin. Reducing packaging does cut costs, but Reynolds says many food makers have already done a pretty good job of it. If we take any more out, they won't last as long on the shelves, or they'll burst in transit. Which wouldn't be great for food prices.
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Chapter 5: What challenges is the elder care industry facing due to immigration policy?
Mary is one of the workers on TPS. She's a certified nursing assistant here. We're not using her real name because of her immigration situation.
I like to care of the people, especially from the elderly people. Sometimes when you finish, like even they have VMs and you finish cleaning them, they say, oh, thank you. But I'm happy.
She makes around $40,000 a year at this high-touch job where she helps people stay clean and comfortable. Her salary helps her take care of her dad, who has cancer back in Haiti, and her four U.S. citizen children. She's sick with nerves, thinking about how she's going to pay the bills come February if she loses her work permit.
I don't know what I can do. I pray God do something for us, because it's really hard. When you got four kids, you can drive, and then you can work to give them food.
And it's not just nurses who will be forced to leave their jobs. In a gray uniform, Richard makes the rounds, taking out the trash through carpeted halls. Richard is 30 and fled Haiti a few years ago. He came under a Biden-era program. I survived many bad treatments.
With the $35,000 or so he earns annually on the maintenance team, he's been paying for school to become a licensed practical nurse. Because I love, I love care people. If he loses TPS, he'll try to stay in South Florida. He likes the weather, the people. He'll find gig work, but money will be tight.
You have to pay insurance, car, pay rent, food.
So he'll have to stop studying. CEO Rachel Blumberg has tried to figure out how to keep her workers, but there's not much she can do.
She is hiring replacements, but she knows it's not the same. You can never replace those bonds that have been built over a decade with those individuals. They... held the hand of our residents when they passed away. They celebrated milestones, birthdays, anniversaries. But someone has to do these jobs, and Blumberg has been forced to hike wages multiple times for the positions affected by TPS.
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