Chapter 1: What is the current state of the hourly vs. salary wage gap?
Hey, I need a good word to describe an economy that is slowing but where prices are rising. Anybody have any ideas? From American Public Media, this is Marketplace. In Los Angeles, I'm Kyle Risdell. It is Friday today. This one is the 29th of May. Good as it always is, everybody, to have you along. All right. I was kidding. I know the word for a slowing economy where prices are rising.
The question is whether stagflation is where we are. So let us discuss. Test my premise, if you will. Amara Mokwe is at Bloomberg. Sudeep Reddy is at MSNOW. Hey, you two. Hey, Kyle.
Hi.
Amari, you get to go first. Let's see. GDP comes in this week at 1.6%. The revision for the first quarter, annualized, of course. PCE, the Fed's preferred measure of inflation. I'm required by law to say that phrase. Comes in at 3.8%. It sounds like stagflation to me.
Yeah, it's not. I think it's not really.
You don't sound convinced. All right, go ahead.
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Chapter 2: How have hourly and salaried wages changed recently?
No, no, no. It's not really feeling great. But I mean, I think like when you look at the consumer spending data, and that's, I think, really important because we know that's a key driver of economic growth. You know, we still got, you know, inflation adjusted spending that was up, right? So it's, you know, that's, I think...
And we saw the personal savings rate also fall to its lowest level since mid-2022. And some people were flagging that, like, is this a sign that the consumer is finally cracking? I think the reason why people are sort of hesitant to say, OK, yes, we definitely have stagflation is because one of the things we know about the consumer in recent years is that
Americans have proven really resilient through a lot of different shocks, a lot of different twists and turns in the economy. And so I think people are just, it's like feeling like it's maybe too soon to say. People want to see how this situation in Iran plays out. You know, it's really hard to get our arms around the situation because it seems like one day we're really close to a deal.
And then the next day, maybe we don't have a deal at all. And so I think people are really sort of waiting for that time factor to figure out, okay, You know, is this going to wrap up soon or are we going to be dealing with a price shock that kind of endures? I think I mean, I think that's the big question.
You have stolen like the next three bullet points on my list of things I was going to talk to you guys about. But we're going to go there anyway. And Sadiq, you get this question and it's this and it goes to the consumers. Amara was talking about, you know, consumers are still spending, but the savings rate is down. Credit card debt and delinquencies are up.
This is the first real hard data, other than the vibes of consumers are cranky, that we've seen that are maybe not great for consumers. Do you think we are cracking finally?
There are signs, like you're standing on that piece of glass and you see the tiny cracks in the corners of it, but it hasn't actually hit in a big way. There are delinquencies in credit cards, delinquencies in auto loans. Lower-end consumers are very clearly being hit harder, obviously because of gas prices in particular. There are just some signs here that are not good if they were to continue.
We still have this looming question over whether these gas prices being so high are short-term effects or are they more durable. If this goes on, we used to think, oh, well, this is only going to be a few weeks, maybe a few months. Well, we're at a few months now, and you can actually see it starting to hurt.
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Chapter 3: What factors are contributing to the wage stagnation?
I just didn't think it was going to show up at numbers that look like they were 20 years ago during the financial crisis. Some of these numbers are bad. Yet, yet, jobless claims are very low. We are in a low-firing economy. Unemployment rate is not bad right now. So the overall picture is one of stability. But the cracks are there, and we've got to pay attention to them.
All right, Amara, let's do this. Let's look at no pun intended here as you hear what I'm about to say. Let's look at looking through the current dynamic. Right. And I say that because the Federal Reserve and in fact, Michelle Bowman today, a member of the board of governors, said we are still looking through the energy spike. We are looking through the inflation caused by the war in Iran.
Tara Sinclair, not a Fed governor, but an esteemed economist in the nation's capital, said we cannot look through this stuff. And I guess my question is, how do we know what to look through and what is not doable? What can we take out of this as we try to figure out where the economy is going?
Well, I mean, I think, you know, Governor Bowman had those remarks today, but I do think you are hearing a number of Fed officials kind of changing their tune and kind of warning that, you know, the central bank kind of needs to signal that the next move could very well be an interest rate hike because more of these Fed officials are starting to get concerned about this inflation being something that they can't look through.
Right. This is a Fed that is the memory of the pandemic inflation and the transitory misstep is very fresh in their minds. They have not been able to get inflation back down to their two percent target for five years now.
And so I think you're seeing more and more Fed officials saying we're not going to have tolerance for inflation that looks like it is persisting, regardless of what like the traditional economic theories would say.
Right, right. So, Sadiq, you remember how Chair Powell always used to say, you know, we need more data. It depends on what the data is going to say. What more do they need than PCE at 3.8 and GDP at 1.6, you know?
They need to be able to look into the future several months down the line. Like, look, six years ago, they all joked about having to become virus experts. with the pandemic. That is the key to figuring out where the path was.
Now they're trying to become, they have to become straight-up Hormuz experts to figure out what is actually going to happen in the coming months in the Middle East and what kind of problems will mount and worsen for them along those lines.
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Chapter 4: How does inflation affect real wages for workers?
It's not a great picture. A year ago, It was a concern about tariffs. Now it's a concern about the Strait of Hormuz. There are enough things that are clouding the environment here that they've got to be concerned about it. But you don't want to act rashly and then have everything clear up.
That's the core uncertainty of the environment right now, which lots of businesses are dealing with it as well. Things could get really, really bad or they could be just fine in a few months. So you don't want to overreact.
Yeah.
Oh, man. Things could be fine or they could be terrible. Sadiq Reddy at MSNOW on a Friday. Amara Mokwe, she's at Bloomberg. Thanks, you two. Thanks, Kai. Wall Street today. Stocks up again. More record highs. Oil down, though here's your reminder that the Strait of Hormuz is still closed. Bonds just kind of sitting there watching it all go by. We will have the details when we do the numbers.
There are racial wage gaps in this economy. There is a gender wage gap in this economy. There is also a wage gap between salaried and hourly workers in this economy. It's fresh data from Indeed's hiring lab that shows hourly wages were up 1.7 percent in the past year, while salaried wages were up 2.9 percent. Marketplace's Kelly Wells explains what's going on.
Hourly workers are typically younger, less experienced, new graduates, the same people who are having a tough time finding a job right now. These are entry-level professionals. They are contractors, freelance workers, interns.
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Chapter 5: What role do convenience stores play in the economy?
They are the ones that saw their posted wage go down. Economist Sneha Puri with Indeed Hiring Lab wrote the report. These people are finding it harder to find a job, which makes it easier to not increase their post-paid wage at the same rate. That's a pretty big 180 from the post-pandemic boom in 2022. Back then, hourly wage increases actually outpaced the salaried folks.
When things opened up, employers had to scramble a bit more to try to hire those workers and they had to do more to attract and retain them. Elise Gould, senior economist at the Economic Policy Institute, says those jobs are more volatile. If the economy is strong, so are those wages. Now the economy is weakened somewhat. They don't have that kind of leverage. Unemployment is rising.
And therefore, when employers see more sideline workers, they don't have to work as hard to get the ones they want. In the past year, salaried wages have stagnated too, but not as dramatically. Eric Hurst is an economics professor at the University of Chicago.
So over long periods of time, these two things are kind of tracking each other. It just so happened that the hourly grew a lot in the 2022 and 23, and now the salary are growing more in the 25 and 26.
One of the main ways to get a higher wage is to get a new job. Hurst says salaried workers have a tougher time doing that. So if you're, say, an economics professor.
It takes us a little bit longer to kind of, you know, churn and search and find the right match. And now we're making up for our losses a little bit later.
Both hourly and salaried workers saw their wages increase slower than the rate of inflation, which means their real wages, or their ability to afford stuff, actually went down. I'm Kaylee Wells for Marketplace.
Here's a perhaps unheralded data point about this economy. Convenience stores account for more than a third of in-person retail stores in these United States. So says the National Association of Convenience Stores, big convenience, if you will. And increasingly, those stores are places for more than just gas. Marketplace's Kristen Schwab takes it from there.
Mitsuki Japanese Market sits on a busy commercial strip in Brooklyn, with a shiny Hello Kitty statue greeting customers at the door. It's a small shop, just a few aisles wide, stocked with colorful, crinkly packages of seaweed-flavored chips and matcha Kit Kats.
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Chapter 6: How are convenience stores evolving beyond gas stations?
Austin Johnson hunches over a high top near the front of the store. Sure. Just so you know, I have to leave in five minutes. I'm stopping my face with an onigiri before work. Onigiri, a rice ball filled with eel and a savory soy sauce for $3.99. It's a staple. It's very cheap and it's filling and I have a long shift ahead of me so it's good energy. Johnson works at a photo studio nearby.
He often stops on his way in for a snack and on his way out for an ice cream treat. I love convenience stores. Me and my partner are kind of like aficionados when it comes to trying like weird snacks and stuff or like new Reese's flavor or new soda. That's, you know, strange or something. So yeah, this spot's cool.
Convenience stores are increasingly becoming sought-out destinations instead of pit stops on the way to somewhere else. Tom Brennan is chief merchandising officer at Casey's, which has nearly 3,000 stores, mostly in the Midwest. He says the majority of the chain's customers don't even buy gas.
So two-thirds of our profitability comes from inside of the store. That allows us actually to be very competitive when it comes to how we price retail fuel.
Most convenience stores only make a few cents a gallon on gas, sometimes even less when prices are high.
Which again is why we're so focused on the other areas of the business and that inside the store offer and that food offer, because we know that there's much more stability inside of that.
For Casey's, stability comes in the form of a slice. It's actually the fifth largest pizza chain in the country, which kind of makes you wonder, what even is a convenience store? Constance Bailey is co-editor of Get It While It's Hot, Gas Station, Roadside, and Convenience Cuisine in the U.S. South. She says the definition of a convenience store depends on where you are and who you ask.
are these grocery stores that have gas or are they gas stations that have food, right? And so in some parts of the South, you know, people think of these as more as restaurants. Bailey says convenience stores have become community gathering spots, especially in rural towns. For the book, her team surveyed Southerners and asked, where are you most likely to eat a hot meal?
Behind churches, like an actual church meal or church function gas station was the second most, you know, popular answer.
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Chapter 7: What is the life of a travel nurse like on the road?
And
Convenience stores are also hubs for international cuisine. Nearly half of them are owned by immigrants, according to the nonprofit Immigration Research Initiative. You can get it all at a gas station. Indian curry, Mexican street tacos, and southern staples like fried chicken. I definitely got to gratuitously engage in a lot of fried food, right? And it's not just about the food.
Convenience stores have become so ironically cool that early aughts band the All-American Rejects recently performed a pop-up concert at a Sheetz store in Pittsburgh. The internet has even coined the aesthetic gas station core. Fashion featuring trucker hats and those visor-like sunglasses in chrome colors.
At Mitsuki Japanese Market in Brooklyn, owner Jay Kao says blind boxes are super popular right now. They're affordable little figurines. You don't know which toy you're going to get until you open up the box.
He says this is what convenience stores are about.
Accessible retail that's a little curious, a little quirky.
When we first opened the store, they said, what's that store? They're looking for the new product. People love to do that because life needs something new.
Something more than just convenience. In New York, I'm Kristen Schwab for Marketplace. Coming up. You literally get paid more than we do to go travel to different cities and move around.
As always, though, there's a catch. First, though, let's do the numbers. Dow Industrials picked up 363 points today, 7 tenths percent, finished at 51,032. The Nasdaq added 55 points, 2 tenths percent, 26,972. The S&P 500 up 16 points, 2 tenths percent, 75 and 80 there. For the week, the Dow rose 9 tenths of 1 percent. The Nasdaq grew 2 and 4 tenths percent, S&P 500 up 1.4 percent.
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Chapter 8: What challenges do travel nurses face with housing?
Oil traders today, though, optimistic about progress on an R&P steel. Brent crude hovered around $92 a barrel, had been up to about $114, if you remember. Stock market once again boosted by technology. After the bell yesterday, Dell reported its first quarter revenue was up 88% at $43 billion. Where'd all that money come from? Well, AI, of course. Dell Technologies surged 32.75% today.
Bonds up, yield on the 10-year T-note down just a little bit, 4.43%. You're listening to Marketplace.
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This is Marketplace. I'm Kai Risdahl. Every now and then on this program, we do a story on the bond market, specifically a story about what's known as the yield curve, comparing the yields, the interest rates, for short, medium, and long-term government bonds.
We do those stories because the yield curve can tell us some things about what investors think is going to happen across each of those short, medium, and long-term timeframes. There are, it turns out, similar conclusions to be drawn from the oil futures market, which are basically bets on what the price of oil is going to be at the end of, could be next month, next year, even a decade from now.
Marketplace's Justin Ho looked at what oil futures are telling us then about where oil prices and energy markets overall might be headed.
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