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Chapter 1: When will the Fed shift focus to the job market?
This being the oil shock from the war in the Middle East. Fed Chair Jay Powell on what we do and don't know about the economy. From American Public Media, this is Marketplace. In Denver, I'm Amy Scott, in for Kai Risdahl. It's Wednesday, March 18th. Good to have you with us. Today, the Fed surprised no one by keeping its benchmark interest rates steady at a target range of 3.5% to 3.75%.
Also no surprise, the shadow cast over the proceedings by the U.S.-Israeli war in the Middle East. In his second-to-last scheduled press conference as Fed chair, Jerome Powell said economic growth is strong, unemployment is still low, inflation is still higher than the Fed would like as one-time hits from tariffs continue to work their way through the economy.
And he said it's too soon to know how the recent spike in oil prices will play out and whether the Fed will need to respond. And if you look at total inflation, sorry, total core inflation, it's about 3%. And some big chunk of that, between a half and three quarters, is actually tariffs. So we're looking for progress on that.
The question of whether we look through the energy inflation doesn't really arise until we have kind of checked that box. The Fed has two primary goals, stable prices and maximum employment. So Powell talked about the difficult balancing act between keeping interest rates high enough to tamp down inflation without hurting the job market.
We are balancing these two goals in a situation where the risks to the labor market are to the downside, which would call for lower rates, and the risks to inflation are to the upside, which would call for higher rates, or not cutting anyway. So we're in a difficult situation, and we feel like our framework calls on us to balance the risks. More on that balancing act coming up in the show.
Powell also addressed questions about his future. While his term as Fed chair ends in May, Republican Senator Tom Tillis has said he will block confirmation of Powell's successor, Kevin Warsh. until the Justice Department ends what Tillis calls a weak and frivolous criminal investigation into Powell's handling of renovations of the Fed headquarters.
Powell says if a successor is not confirmed by the end of his term, he would serve as chair pro tem. As for whether he stays on as Fed governor after that, which he can do until the end of 2028? I have not made that decision yet, and I will make that decision based on what I think is best for the institution and for the people we serve. So we stay tuned.
Wall Street today, not liking what it's seeing. We'll have the details when we do the numbers. As promised, more now on that rock and a hard place the Fed is stuck between. Lately, we've been hearing a lot about the stable prices part of its dual mandate because they're not very stable right now.
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Chapter 2: What are the current inflation rates and their implications?
Consumer price inflation was still hovering above the Fed's target of 2% even before the latest oil shock from the war on Iran. But what about maximum employment? Well, achieving that could also be a challenge for the Fed, with a job market that's lately been slowing down or maybe even stalling out. Marketplace's Mitchell Hartman has that part of the story.
Let's start with how is the labor market doing? Here's Joe Bersuelis at consulting firm RSM. For some time, it's been clear the market has weakened significantly. Over the last 12 months, the economy added 156,000 jobs. Over the previous year, it added more than a million. But the job market has stabilized quite a bit recently, says Christine Cooper at CoStar Group.
You know, we had some job losses in February, we had job gains in January, some losses in December, and it seemed to kind of offset each other. Cooper says that with the Trump administration cutting immigration and baby boomers retiring, slower job growth might not be such a big problem. As we have fewer people in labor supply and need fewer jobs to be added each month,
But with little net job growth, John Lear at polling firm Morning Consult says, You continue to see people not being able to find jobs once they were laid off. Driving a sharp uptick in long-term unemployment. And workers are starting to fall behind financially, says Laura Ulrich at job site Indeed.
Given the stagnancy we've seen across many sectors in the labor market, it's not surprising to me we've seen wage growth decline. The wages employers are posting for new hires on Indeed are up just 2.1% from this time last year. Consumer prices are up 2.4%. And this brings us back to that dual mandate we started off with.
Joe Bruce Welles at RSM says the Fed can't attack both ends of it at the same time. Given the oil and energy shock, which is shaping up to be the largest since the 1970s, The Federal Reserve is going to find itself in a tension between price stability and maximum sustainable employment.
He says getting control over inflation will be the first order of business for the Fed before it does anything to stimulate the labor market, however much it might be struggling. Price stability is a precondition of maximum sustainable employment.
Because without price stability, employers won't feel confident enough in the economy going forward or have the financial resources to ramp up hiring again. I'm Mitchell Hartman for Marketplace. One new data point the Fed would have weighed today was the producer price index out this morning from the Bureau of Labor Statistics.
The PPI measures inflation at the wholesale level, tracking prices producers receive for goods and services. Overall, those prices were up seven-tenths of a percent in February from the month before, mostly due to increases in service prices. Again, this was before the war added new pressure on prices. On the goods side, one kind of product stood out. Vegetables up almost 49 percent.
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Chapter 3: How is the Fed balancing inflation control and employment?
Though the Supreme Court struck down tariffs put in place under the International Emergency Economic Powers Act, others remain in place. Daniel Ackerman checked in with some suppliers gathered in Boston this week for the country's largest wholesale seafood expo. Walking into the convention hall, you can smell the seafood.
Suppliers from around the world dole out samples of fresh sashimi, crispy fish sticks, and seaweed salad. It's sweet, and it's a little spicy, and it's a complement to meat or heavier stuff. Camille Zhu runs a seaweed company on the coast of Shandong province in northern China. She began selling to the U.S. just last year.
She says it's been hard with all the trade tensions and tariffs, but she's confident in her product. People are starting to accept seaweed as a source of nutrition and they're looking for a healthy diet and with the popularity of Japanese cuisine. So yeah, it's getting pretty big for us. Other Chinese seafood sellers were less upbeat.
Jianglong Wang's company processes squid and scallops, also in Shandong province. He says buyers in the U.S. provided almost all his revenue. 90% of our products will be exported to America. But Wang says his customers, including U.S. retailers, walked away when tariffs soared in the middle of last year.
He's since been able to restart production, finding some buyers in Canada, but sales are still way down. I heard similar stories from sellers based in India, which is the biggest supplier of shrimp to the U.S. They say they lost around half their business. And that loss of supply is one reason the cost of shrimp has risen by more than 50 cents a pound, says Angel Rubio, an economist with Expana.
In the case of shrimp, we are the highest price over at least five years to the consumer. Rubio says domestic producers simply can't meet demand. Shrimp is the most consumed seafood in the U.S., There are more like land-based farms here in the U.S. that are coming up, but they wouldn't be able to replace the volume from overseas.
Meanwhile, many of those overseas producers have their fingers crossed for an easier year ahead. Jianlong Wang, the squid and scallop producer in China, has his hopes pinned on one particular event. I know that Donald Trump will visit China next month. Wang says a one-on-one meeting between Trump and Chinese President Xi Jinping could ease tensions and stabilize the seafood trade.
But as of this week, that summit has been delayed, with no make-up date announced. In Boston, I'm Daniel Ackerman for Marketplace. Coming up. So the volunteer drove to the hotel and now they're at the Chuck E. Cheese. Sounds like a blast. But first, let's do the numbers. Dow Jones Industrial Average lost 768 points, 1.6% to close at 46,225.
The Nasdaq dropped 327 points, about 1.5% to finish at 22,152. And the S&P 500 gave up 91 points, 1.4% to end at 6624. We just heard from Daniel Ackerman about the status of seafood imports and from Carla Javier about the rising price of vegetables. Well, Cisco Corporation, a leading distributor of both seafood and produce, sank 2.1%. Dole PLC, purveyor of veggies and fruit, dipped 1.5%.
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Chapter 4: What challenges are currently facing the job market?
So the volunteer drove to the hotel and now they're at the Chuck E. Cheese. So all the crisis calls vary, but we want to help anyone who calls us and just needs help. We started in 2024. Right after we started, Hurricane Helene hit, and we kind of hit the ground running. In really big natural disasters, child cares and schools shut down.
And it leaves parents and families with no options for child care during those weeks and maybe even months, exactly what occurred during Hurricane Helene and the LA wildfires. So within 24 hours, we probably got 300 registrations. I was probably holding two to three trainings per day to try to onboard as many volunteers as possible to get them out as soon as possible to help families.
We're volunteer-based and we're very grassroots. We don't have a lot of expenses, and that's what's making us successful right now. But we are in North Carolina and California, and we want to scale every year to a new state. And with just me alone, it's not possible. I was hoping in 2025 we would have at least been able to hire a program officer. We need a team of 25 people to do what I'm doing.
We do. It's so much work. And I also, I mean, I have another job. So I'm raising money. I'm writing grants. And we are trying to find an earned revenue mechanism. A lot of hospitals contact us because their patients are going to surgery and they don't have child care and hospitals don't provide child care, so they want to outsource it.
So we're hoping that maybe through kind of contracts with hospitals, we can find a way to earn some revenue. Where will we be in 10 years? I hope we're like the Red Cross. Honestly, I mean, I want to be that successful. I think it's going to take more than 10 years, but that is my vision. That's where I want to be.
Silke Knievel, founder and CEO of National Emergency Child Care Network in Durham, North Carolina. We want to hear about what's going on in your economy. Hit us up, marketplace.org slash my economy.
This final note on the way out today, PolyMarket, the online platform where users can bet on all kinds of global events, from Fed rate cuts to the Oscars, announced it's opening a bar in Washington, D.C. called The Situation Room. Here's how the company described it on X. Imagine a sports bar, but just for situation monitoring.
Live X feeds, flight radar, Bloomberg terminals, and PolyMarket screens. only in D.C. Our media production team includes Brian Allison, John Foche, Montana Johnson, Drew Jostad, Gary O'Keefe, and Charlton Thorpe. Alex Simpson is the manager of media production. I'm Amy Scott. We will see you tomorrow. This is APM.
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