Chapter 1: What is the biggest deregulatory action in U.S. history?
an encouraging inflation report to end the week, plus the rise of concierge medicine, and AI comes to your weather forecast. From American Public Media, this is Marketplace. In Denver, I'm Amy Scott in for Kai Risdahl. It's Friday, February 13th. Good to have you with us.
It's been about five years now that we've been living with inflation higher than the Fed's target of 2% annually, but we're getting closer to that target. Today's delayed Consumer Price Index report From the Labor Department, shows prices rose just 2.4% on an annual basis in January, down from 2.7% the previous month, and way down from the peak of more than 9% in 2022.
But as usual, the devil is in the details. And here to dive in with us are Catherine Rampell at The Bulwark and MSNOW, and also Greg Ip at The Wall Street Journal.
Chapter 2: How does the EPA's repeal of the endangerment finding affect public health?
Hi, you two. Hey, Amy. Hello. All right, Greg, let's start with your takeaways from that inflation report. Good news?
Well, yeah, I'd say that it is a good report. The inflation rate of 2.4%, certainly a lot lower, as you were saying, than it was a few years ago. And economists like to take out the energy and food portions, not because they don't actually think those are important, but because they're very volatile. Right.
And if you do that, you come up with an inflation rate of only around 2.5%, which is the lowest for that number since 2021, just after the pandemic.
Chapter 3: What claims does the Trump administration make about the repeal's economic impact?
But as you said, the devil is in the details. If you look below the surface, you do still see some signs of tariff inflation in things like appliances and other imported goods. And also, this may come as a surprise to some people, but there's actually several different ways to measure inflation. And the Federal Reserve has its own preferred inflation gauge.
And when you actually see how today's report affects that alternative gauge, it suggests inflation might actually be still stuck at around 3%, which is too high for the Fed, which prefers an inflation rate of 2%.
Catherine, what about you? What are you seeing in this report? What stood out to you? A lot of the same highlights that Greg just mentioned. So, yep, good news that so-called core inflation stripping out volatile food and energy prices fell to its lowest level in almost five years.
Chapter 4: What are the hidden costs associated with cheaper cars?
It's a little bit hard to know how much to take this report at face value because there's still probably some distortions from the recent government shutdown, of course. And as Greg points out, there's also evidence that tariff rates tariff costs may be increasingly passed along to consumers.
We've had a few different reports recently from CBO and I think the New York Fed research team finding that consumers are paying most of the tariff costs. And you see that in some of the numbers today. I think Greg mentioned a
appliances maybe, but you also saw appliances, furniture, I think new cars, all saw pretty sharp price increases in January, probably related to the fact that companies are having to pass along their costs since they can no longer keep absorbing them indefinitely from tariffs. Right.
And
And Jerome Powell, the Fed chair for now, talked about this last month, saying that the expectation is we'll see the effects of tariffs flowing through goods prices, peaking and then starting to come down over the course of this year.
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Chapter 5: How is concierge medicine changing the healthcare landscape?
Greg, how near to the peak do you think we are? And is it surprising that the tariffs haven't shown up more in price increases?
I think we're actually right around the peak. And that, as you suggested, as Powell predicts, we're going to see less and less of that effect as the year unfolds. And you're right, the tariff impact on inflation has been less than most people would have thought about a year ago. I think the average forecast back then was we'd get about a percentage point of tariff inflation.
And in fact, we only got about a half a percentage point. And the good news is, is that we're probably not going to see tariffs going up any longer than In fact, there is increasing efforts by the Trump administration to pare back tariff increases by cutting deals with particular countries, by reducing the amount of specially sensitive products.
There were reports this week that they're looking to narrow, for example, tariffs on steel and aluminum.
Chapter 6: What are the benefits and drawbacks of concierge medicine for patients?
And so as the tariff increases that we had last April, May, June recede into the past, they start to also drop out of our inflation numbers. And that would be good news for the inflation rate coming down as we get towards the end of this year.
Catherine, can we talk about shelter inflation, housing for a moment? Because that's a big component of CPI. It was up 3% annually in January. But it has been decelerating, and we know that there's a lag between rents and home payments falling and that showing up in the CPI. What is happening with housing affordability right now?
Well, it depends a little bit on how you define affordability, right? Is affordability about price growth month over month, let's say, or even year over year? Or is it how much accumulated growth we have seen over a period of time, basically the level?
Chapter 7: How is AI transforming weather forecasting?
And I'm sure people will be glad to know that price growth is decelerating, but it's still growing, you know, quite a bit above where presumably renters would like it to be. If you're a homeowner and you want those imputed rents presumably to be increasing. But if you are a renter or if you are a prospective buyer, 3% price growth is still quite low. quite painful.
So it would be nice if we see some further deceleration, if we see it get down to closer to the Fed's target for overall inflation. And we may yet see that. It depends a little bit, of course, on what happens throughout the rest of the economy, in part because if you have inflation overall persistently high.
That's going to make it harder for the Fed to cut interest rates and therefore harder for mortgage rates to come down because they are still quite high. I know because I have to refinance soon.
Chapter 8: What potential does AI hold for long-term weather predictions?
So, yeah, so I guess we'll see what happens. But it's a move in the right direction. All right. Moving on from inflation, Greg, we also had that better than expected jobs report from January this week. What does that tell you about the strength of the economy right now?
Yeah, well, there's kind of two pieces to that jobs report. Now, the first piece of that is that we actually revised a lot of the data from prior years. And we discovered that for the last year and a half, two years, the job market has been way weaker than we first thought.
For example, last year, we only created around 15,000 jobs per month, which I think might be the lowest rate of job creation in any year in decades outside of recessions. But the good news is that the last month, January, was actually a pretty good month where we created 130,000 jobs.
So even though we've been in this period of very soft, stagnant hiring, there's a few hints out there that things might be picking up. So I suppose you could say it's a glass half empty, full story on the job market.
And real quick, Catherine, before we go, wage growth outpacing inflation. How are consumers generally faring right now? Well, if you ask consumers, they say they're doing very, very badly, if you look at consumer sentiment numbers. But yes, those data, amongst others, are more encouraging. Well, both the fact that they are getting more jobs and that there is stronger wage growth.
which is part of the reason why I sort of qualified my affordability answer, because what really matters, whether or not consumers will articulate it this way, is what's happening to prices relative to what's happening to their wages, basically what's happening to real wage growth. That affects what they can literally afford. So, yes, good news that we are seeing some some strength.
in um in wage growth uh will it be enough to perk up consumers voters views of the economy i'm not so convinced we'll we'll watch for that all right katherine rampell is at the bulwark at ms now greg ip with the wall street journal thanks both so much and have a great weekend thanks for having me on wall street a mixed trading day on this friday the 13th we'll have the details when we do the numbers
The Trump administration is calling it the largest deregulatory action in history that'll save businesses and consumers money. Scientists and environmental advocates, though, say it's a gift to fossil fuel companies that will make people sicker and less safe. I'm talking about the repeal this week of the endangerment finding.
That's the EPA's 2009 decision that planet-warming greenhouse gases are a threat to public health and welfare. and it underpins the agency's authority to regulate greenhouse gas emissions. The administration claims the repeal will save more than a trillion dollars in regulatory costs and make cars and trucks more affordable.
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