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Chapter 1: What are the current challenges facing the American consumer?
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Mounting economic inequality, threats to democracy, environmental disaster, the sour stench of chaos in the air. I'm Brooke Gladstone, host of WNYC's On the Media. Want to understand the reasons and the meanings of the narratives that led us here and maybe how to head them off at the pass? That's On the Media's specialty. Take a listen wherever you get your podcasts.
The program today, honestly, it's all about you. From American Public Media, this is Marketplace. In Los Angeles, I'm Kyle Risdell. It is Wednesday today, the 24th day of June. Good as always to have you along, everybody. We've got some data coming this week. May inflation in the form of the Personal Consumption Expenditures Price Index. That is tomorrow.
And then on Friday, the University of Michigan's Index of Consumer Sentiment. And that, which is to say consumers, which is to say us, is where we are going to start with Heather Long. She's the chief economist at Navy Federal Credit Union, also one of our Friday regulars. Hi, Heather. Hi, Kai. Glad to be back.
So, look, somebody wakes you up at 2 o'clock in the morning from a dead sleep and says, Heather, what is the mood of the American consumer? And without having a chance to check any of your data, what would you say? Well, I think after I maybe sock them, I would probably say the moon is still really gloomy.
And I think the big thing that's going on that people are missing is while a lot of the consumption data still looks pretty darn robust, there's this massive psychological tax on the middle class right now where they feel and they have to financially make every dollar stretch to the furthest possible. And that's why the sentiment is so low.
It's this, I got to find the cheapest gas station in town. I need to reset my thermostat so my electric bill isn't soaring again. And I need to shift my spending from the nice grocery store to the warehouse or the discount store. It's that pressure people feel to be able to even do what they were doing without much thought a few years ago.
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Chapter 2: How are inflation and consumer sentiment connected?
But I think what's different now is the reality of the affordability crisis, particularly with cost of housing, cost of car ownership. Those aren't coming back down. And now we've got the electricity pressures that are rising for a lot of people. And so... I think what's my crystal ball, always tricky, but the crystal ball is it's inevitable that there will be belt tightening.
The question is really how much. You know, the reality, as you always report, is that wages are not keeping up with inflation right now. There's very little. I mean, that picture may get a little better by the end of the year, but there's no there's no great income for the middle class that's going to show up. That's really going to improve a lot of people's budgets in the late 2026. Right.
Right. Scale of 1 to 10 then, and this is a little unfair because it's a nuanced question, but scale of 1 to 10, how macroeconomically worried are you? You got like 15 seconds. You can hear my deep sigh. I mean, macroeconomically, this is the frustration, right? And this is why I think the middle class is so gloomy. Is this going to tank the economy? No, probably not.
It's probably more like a four or five on your 10-point worry scale. But is this a long-term problem? Is this the economy that most Americans want? To feel that psychological tax of, gee, I can't do everything. Not only can I not do everything I want to be doing right now, but I can't even do everything I could felt I could do even a few years ago. And that doesn't feel sustainable long term.
No, it sure doesn't. Heather Long at Navy Federal Credit Union. She's the chief economist there. Thanks, Heather. Hey, thanks, Guy. Wall Street today, oil way down, stocks mostly down, too. We will have the details when we do the numbers. Let's keep going on that theme that Heather and I were talking about, things that are affecting the consumer mood out there.
We're going to do it, though, with an eye on the Wall Street narrative. Ever since the war started, conventional wisdom has been that high oil prices are driving inflation higher. Fact check. True. Over the past couple of days, though, the vibe has been that lower oil prices are are going to drive more consumption, which is also going to mean higher inflation.
Marketplace's Justin Ho takes it from there.
Earlier in the war, when a barrel of oil cost $25 more than it does today, markets were worried about inflation caused by a tight supply of oil.
But now we're moving what appears to be more of a concern towards the demand side.
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Chapter 3: What is the impact of falling oil prices on inflation?
And if you've got shrinking demographics, that means less demand for housing, less demand for consumer basics, and of course fewer workers. And I think all of that is really acting as a constraint in overall economic growth.
And a constraint on inflation. Kelly says that means the Fed will probably keep rates steady. I'm Justin Ho for Marketplace.
We talked about the million-dollar starter home yesterday. Kristen Schwab did that story for us. Today, the flip side, homes under $100,000. First of all, they do still exist, but it's actually really hard to get a mortgage for them, something that the housing bill Congress passed last night addresses President Trump's refusal to sign it, notwithstanding.
Marketplace's Caitlin Tan has our story, the house you might be able to afford, but that you cannot get a loan for.
Craig Richardson is perusing Zillow for homes under $100,000 near where he lives in North Carolina.
I'm looking at a two-bedroom, one-bath, 729 square feet. It's a nice little cottage. Another one's $55,000. It's a multifamily home.
Another condo is $89,000.
Richardson is an economist at Winston-Salem State University, and he actually bought a similarly priced condo as an investment.
We had to refinance and wrap this condo into a larger loan that included both our house and the condo.
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Chapter 4: How does the housing bill affect small mortgages?
Travel Association says domestic travel is going to increase again this year. Clint Henderson at The Points Guy says that if travelers surveyed by his company are changing their plans, they're driving instead of flying, they're going somewhere different, and they're going on shorter trips.
If you're planning a trip with your family for the summer, maybe you're not going to try to take them to Europe. Maybe you're going to go somewhere local instead.
And there are still plenty of people who are forging ahead as usual.
Flight prices are up 20 to 30 percent in some cases, yet the numbers of people who say they're going to cut back on travel are very small.
I keep thinking we're at the limits of what consumers will bear, and they continue to shock me. But between years of inflation and higher fuel prices because of the war in the Middle East, Henderson thinks that travelers in the U.S. will finally start cutting back next year. But he also thought that last year and the year before. I'm Kaylee Wells for Marketplace. Coming up.
I never paid so much attention to the 10-year and the five-year treasury note. Welcome to the club, man. First, though, let's do the numbers. Dow Industrials up 182 points today, one-third of 1%, 51,848. The Nasdaq down 110, that's points. Percentage is four-tenths of one. Closed at 25,476. S&P 500 dipped seven points, 10th percent, 73,58.
Caitlin was just telling us about the pursuit of $100,000 mortgages. So how about some lenders? Rocket companies started with mortgages and expanded into fintech, as you know, fired up 9.4% on the day. Loan Depot, that's a non-bank holding company that sells mortgage and lending products. Finance is interesting. Shot up 5.3%. Bonds up, yield on the 10-year T-note, 4.40%.
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Chapter 5: What trends are emerging in summer travel plans?
I have so many questions. Their office inside a WeWork out in Culver City, California, was indeed a bit of a circus. There were samples of packaging laid out on a table, boxes of products stacked all over desks. Fast forward to today, though, Lindsay has moved herself to Miami, and that office is no more. We are now a fully remote team. We have people all over the U.S. and the world.
So we didn't need that space anymore. Okay. Or any space. Any space, right. Let's talk about the actual business. You were, along with a bunch of others that I mentioned in the introduction, you were one of those late 2010s-ish companies that went direct-to-consumer for sort of sustainable products. And it was working really well. And I guess I want to know what happened.
Yeah, so I feel very lucky that we're still one of the ones hanging on. We're still D2C. We're still sustainable. But seeing Everlane and Allbirds and just these epic companies that had such amazing messages just kind of – going the way that they did, I think that there's like a number of reasons. So, you know, one thing I think is that it's harder and more expensive to run a business, right?
So I think we'll probably be talking a little bit about tariffs as well as even the fact that we're still made here in the U.S. and also consumer sentiment. I think it's changed a lot over the past few years and we're actually seeing some really positive things in our space right now, but it's a very, very recent thing. There was...
a few years that were a very treacherous, treacherous time for sustainable brands, especially. Well, so let's dig into that a little bit, because you say consumer sentiment, and I hear that thing that I talk about all the time, which is, you know, consumers are cranky, but that's not what you're talking about, right?
There was a definite sort of change in the way consumers looked at sustainability. Yeah, so I kind of said, I joke about this now. I started my company because I wanted to save the sea turtles. And back in 2018 and 2016, that resonated with people. They wanted to know what their products were doing for the planet, what they could do to help.
And what we're now kind of finding, especially with this new understanding of microplastics and the impact that it has on the human body, More people are gravitating towards that. So it's, you know, it's no longer about the sea turtles and now it's about ourselves. And same product, same goals, same mission. It's just a different type of messaging that is resonating with consumers right now.
How do you know it's not about the sea turtles anymore and it's more about people thinking about themselves and microplastics or what have you? So because we're a direct-to-consumer, we have a really interesting first-eye look into this. So we put hundreds of thousands of dollars through Meta every month.
And so we're able to see what messaging is resonating with people and what's not when you put an ad up against, you know, toothpastes trashing the planet and then another ad up with how microplastics are, you know, impacting your body. And one of them just clearly wins every audience no matter what.
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Chapter 6: How are direct-to-consumer brands adapting to market changes?
We still want to be able to provide for our customer. And so you kind of look at ways you can save that doesn't impact your company in a negative way.
Right.
This is sort of a tough question to ask an entrepreneur who has poured, you know, I don't even know, it's got to be like 10 years of your life, probably more into this and who knows how much capital, but are you going to make it?
Yeah, we are. We are. We're going to be able to weather the storm.
We're seeing like after a few tough years, we're seeing some really real traction with microplastics. And I think here's the thing, Kai. I think this is cyclical. I think people will start caring again about the planet. I think that will be able to be a part of our messaging.
It's always been a part of our DNA as a company.
It's going to be a good 2026, 2027. Yeah. Lindsay McCormick, CEO, founder also of Bite Toothpaste Bits, and who knows what else she's going to wind up selling. Lindsay, thanks a lot. I appreciate your time. Thanks so much, Guy. We were talking a couple of weeks ago about how we're not making enough honey in this country to meet demand.
Maybe, though, a way to get your hands on some if you can't find it at your local Piggly Wiggly is to harvest it yourself. That's the setup for today's installment of our series, My Economy. I'm Adam Hickman from Foxhound Bee Company in Irondale, Alabama.
Our business is a beekeeping supply company where we supply equipment to beekeepers, provide them the bees they need, the queens they need, and we also do a lot of education about bees as well. So it started seeing some of my great-grandfather's equipment when I was a kid. I got some interest in how it works and decided, let me just try this out.
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Chapter 7: What is the significance of the bond market in today's economy?
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