Chapter 1: Why did import prices rise unexpectedly in February?
We'll do data today because sometimes you gotta. Batter up. It's opening day. And hey, how have you been sleeping? From American Public Media, this is Marketplace. In Los Angeles, I'm Kyle Rizdahl. It is Wednesday today, 25 March. Good as it always is, everybody, to have you along. The data point of choice today is a tidbit from the Bureau of Labor Statistics called the U.S.
Import and Export Price Indexes. It's the import side of that equation that's of most interest to us. In February... Those prices increased 1.3 percent. That's more than anybody had been guessing. And the biggest monthly increase since March of 2022.
Chapter 2: How do tariffs affect import prices and inflation?
Year over year, the increase also 1.3 percent. Marketplace's Kristen Schwab gets us going with the why and the wherefore.
One funny thing about this data on import prices, says Oren Klatschken, an economist at Nationwide, is it shows the price of goods before businesses pay tariffs.
But all of the kind of secondary effects, if you will, all of the knock-on effects of tariffs, these are all visible in the data.
Businesses front-loaded inventory and shifted supply chains to avoid the highest taxes. And because of the uncertainty tariffs caused, the value of the dollar has fallen. These are all things that make imports more expensive. Then there's a seasonal quirk. We just had a really cold winter. Laura Veldkamp is an economist at Columbia University.
She says demand for heating pushed fuel import prices up 3.8 percent from the month before. And that trickled down into the price of other imports. You might not think that oil was used in the production of an apple. But whether you're talking about a Honeycrisp from Canada or a Gala from New Zealand. We needed fuel to get that apple from the tree where it was grown into your supermarkets.
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Chapter 3: What impact do rising mortgage rates have on the housing market?
This is the part of the story where we acknowledge the big elephant in the room. This import price data is from before the war started. And the price of crude has been hanging out above $90 lately. Ishwar Prasad, a professor of trade policy at Cornell, warns February's increase in import prices isn't a one-off event.
This is a significant increase that is almost certain to be topped by even higher increases in the next month at least.
Higher import prices don't necessarily translate to higher prices at checkout. But Prasad says companies can't always absorb the costs.
More and more they have been passing them on to consumers.
Which would drive up inflation. Before the war, Klatchkin at Nationwide was thinking inflation would average out around 2.8 percent. Now?
We're looking for headline CPI inflation to average around 4.3% in the second quarter.
The hope is it's just a one-time jump in prices. I'm Kristen Schwab for Marketplace.
Ah, yes, that one-time jump in prices hope.
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Chapter 4: How are small businesses coping with increased costs?
Wall Street today, traders found somewhere in the back and forth about the war. Reason for hope? We'll have the details when we do the numbers. Tariffs have been the macroeconomic through line the past year or so. Well, until three weeks ago, right?
Now, though, speaking of three weeks ago, as small businesses watch energy and uncertainty take unwelcome turns, they've got a whole new set of worries. Christina Stembel is the CEO of Farm Girl Flour. She is our go-to in the direct-to-consumer flour business. Christina, welcome back. It's good to have you here.
Great to be here. Thanks for having me back.
So I went back and I looked it up. We had you on April the 28th of last year, which was just counting here, 26 days since President Trump's tariff palooza. And obviously we talked a lot about tariffs.
Chapter 5: What is a 'sleepcation' and why is it trending?
How was the rest of 2025 for you?
Yeah. 2025 went well. Tariffs were tough, but just like everybody, we paid more. We had to pass some on. We absorbed some. But because of how we're running, we're just really focused on profitability. We were able to get through.
How are you running? How's business sort of writ large?
Business is okay.
I think- Okay is not great. Usually you say, it's really good. My company's great. I love my company.
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Chapter 6: How do hotels cater to guests looking for sleepcations?
And now you're like, oh, it's fine.
I love my company, so I love my team. Of course you do. I'm sorry. Yes. I do. No, no, no. I think everything just seems to be like people know 10% about what the full picture is, which is totally understandable. This year, I would say the biggest risk isn't tariffs. It's not trying to get tariff money back.
I think most companies won't ever see that, even though the general population thinks you will. But we'll see what happens. I'm not going to waste time on something that is really outside of my control.
So the biggest fear I have this year, or the reason I'm kind of like business is okay, I'm kind of tentative about it, is because of the impending fuel surcharges that might come into fruition right before Mother's Day. So I'm anxiously awaiting to see what happens there.
Chapter 7: What are the economic implications of rising gold and silver prices?
Yeah, well, let's talk about that for a second, right? Because not only are there transportation costs for you, right, just straight up oil, but... fertilizer is a huge issue with the closure of the Strait of Hormuz or the partial closer or however you want to sort of negotiate that. And flowers need fertilizer.
Yeah, there's kind of like two things with that. So the biggest risk is outbound transportation. So, you know, in 2020, we saw our outbound transportation rise from 26% of revenue to 41%. And it almost put us out of business. This year, you know, we were at sub 20, which was great last year. And now we're already back up to about 25, 26%.
And if we go up to like 35%, I just ran that scenario this morning, you know, we would actually lose a million dollars. So we be in business to lose money again. So that's the number one risk. I think the second risk is fertilizers.
Chapter 8: How is the evolving sports broadcasting landscape impacting viewers?
And it's more of the ripple effect that you don't think about until you run through the scenarios. And so if we can't afford fertilizers or farms can't afford fertilizers, the prices will go up because the yield will be less on the flowers. You know, we raised our prices as high as we possibly could last year without losing a tremendous amount of sales.
There's not much more bandwidth we can do raising prices. And I think most small businesses are in the same place.
How much running room do you have here before Mother's Day? My mother's going to kill me when she hears this. When is Mother's Day again? One more time.
It's May. You still have a full month before that, so you're okay.
I do, but you probably don't, right? You don't have a lot of time, is my point.
We do not. We do not. We're already in Mother's Day planning. We've been in for months. So I just want the fuel surcharges to stay at bay until after Mother's Day, and then I can sleep better.
You know, it's funny. We've been talking a while now, you and I, and you are, and I'm sure somebody's probably told you this, you're a fast talker. And it sort of seems like you're going faster today. It's just like that's the way your life is now.
Yeah, it's definitely, I feel like there's whiplash constantly. And so, you know, I'm trying to do everything I possibly can for what I can control. But when I think back to like 2019, that seemed like a hard year. Like everything seemed hard. We'd been in business almost 10 years at that point and everything seemed hard and it's nothing compared to now.
Now I feel like you have to make the same amount of decisions in a month that we used to have to make in a year because there's so many out, you know, external circumstances. You just have to, adapt and pivot and, you know, make decisions on the fly without any stability, really.
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