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A view of the economy as we start the week from American Public Media. This is Marketplace. In Baltimore, I'm Amy Scott in for Kai Risdahl. It's Monday, July 15th. Good to have you with us. As the country continues to absorb the implications of Saturday's assassination attempt on former President Donald Trump, Fed Chairman Jerome Powell had this to say at the Economic Club of Washington, D.C.,
It was really a very sad day for our country. Political violence has no place in our society, and I condemn it in the strongest terms. I know we all do. A man died at a political rally. Two other people were critically injured. It's just a sad day. And I'll say that I'm grateful that the injuries to the former president were not more serious.
Powell declined to speculate on the market impact in that interview today, instead sticking to the script on how he views the economy right now, as the Fed weighs recent data, including last week's better-than-expected inflation report. What we've said is that we didn't think it would be appropriate to begin to loosen policy until we had greater confidence that inflation was moving sustainably down to 2%.
We've been waiting on that, and I would say we didn't gain any additional confidence in the first quarter, but the three readings in the second quarter, including the one from last week, do add somewhat to confidence.
And that's what we'll do today. Stick with the economy. More data is rolling in in the form of the latest corporate earnings reports. Several of the country's and the world's largest banks have reported earnings these past few days. Goldman Sachs just this morning said its second quarter profits were up 150 percent from a year ago. JPMorgan Chase, Wells Fargo and Citigroup delivered better than expected results on Friday.
Buried in those earnings reports is a picture of the U.S. economy, and it's looking mostly good. Marketplace's Sabri Beneshor reports. Remember how for most of last year, a recession was always lurking right around the corner? Now it seems like the consensus is almost entirely that we are going to have a soft landing and the economy is going to do well.
Suryan Sharma is an equity analyst at Morningstar. The recession never showed up. That is a big reason why banks are doing so well. Once investors and companies accepted that a recession is probably not coming soon, markets started doing really well. The S&P 500's up 19% year to date. That has made companies less fearful. They're comfortable with the direction of markets.
Art Hogan is chief market strategist at B. Reilly Wealth. The markets, you know, feel firm enough for them to go ahead and make bold decisions. Bold decisions like do a merger or an acquisition, which they will pay an investment bank to execute for them. Goldman reported this morning a 21% rise in investment banking. And on the high side, we had a 60% gain in investment banking for Citigroup.
Stephen Bigger is director of financial institutions research for Argus Research. More economic confidence has made corporate bonds look less risky, which has brought their interest rates down, Bigger says. So companies have seized the opportunity and asked banks and paid banks to issue more of those bonds. But there have been a few soft spots for banks. Again, Morningstar's Sharma. What we're currently seeing on the loan growth side is that the commercial side is very weak.
Businesses are still a little hesitant to take out direct loans from banks. And loan losses on credit cards, for example, have risen. The amount of bad debt Wells Fargo never expects to collect is up 71% from last year. In New York, I'm Sabri Beneshour for Marketplace.
A sign of how the American consumer is holding up comes tomorrow when the Commerce Department releases retail sales numbers for June. Sales have been pretty flat for the last few months as shoppers have held back on spending. If that continues, it could boost the case for an interest rate cut. Marketplace's Henry Epp has more.
Ask retail analysts to sum up how consumers are feeling right now, and the vibe sounds not great. Cautious, jittery. I think they're in a wait-and-see mode. In order, that was Lupin Skelly at Deloitte, Jessica Ramirez at Jane Halley & Associates, and Keisha Virtue with JLL. She says the main thing holding spending back is, not surprisingly, inflation. It's cooled in recent months, but rising prices over the last few years are eating into household budgets.
Consumers are still really feeling that pressure from those higher prices overall, and they're adjusting their spending accordingly. Focusing mostly on the essentials. Consumer spending has often been surprisingly strong in the face of inflation, but a lot of those purchases were made with credit cards, and that's starting to add up, says Jane Halley's Jessica Ramirez.
Consumers have really accumulated debt during this time. So again, that's still something that's sitting on their plate. Retail has also been hurt by another trend, says Lupin Skelly at Deloitte. Those who do have some extra money to throw around aren't necessarily shopping. So they're looking to spend on experiences and travel or perhaps even repadding their savings.
There are a few potential bright spots ahead for the retail sector, including back-to-school shopping. Deloitte and JLL have conflicting predictions, but they agree the back-to-school season has started really early. People just want to check off their list, make sure they have everything they need well in advance. Keisha Virtue at JLL is part of that trend. I think I got it done, I would say early June. If enough parents also planned that far ahead, it might show up in tomorrow's report. I'm Henry Epp for Marketplace.
To continue with retail, yet another Amazon Prime Day starts tomorrow. It's a reminder of how standard online shopping has become, along with super-fast standard shipping. Amazon Prime Day is coming up.
Amazon's service has put pressure on nearly every other retailer to match it. Amazon, by the way, is a marketplace underwriter. That pressure has forced retailers and shipping companies to completely rethink the way they store, manage, and move goods, all in an effort to shave minutes off the process.
Marketplace's Kristen Schwab took a trip out to UPS's shipping hub in Louisville, Kentucky, to take a look at exactly how the stuff we buy gets to our doorsteps and gets there fast. Here's part one of Kristen's story. As a reporter who covers retail, I've seen a few warehouses, and they all kind of have the same pulse, an ant farm of workers with forklifts and boxes.
But this warehouse was designed for e-commerce, and it's oddly quiet. So we have a little over 700 robots. So there are more robots running around than employees, at one given moment at least. Yes, ma'am. That's right. And the robots work 24 hours a day.
Thomas Stearman is director of industrial engineering at Velocity, UPS's 900,000 square foot facility near Louisville, Kentucky that opened last winter. This warehouse isn't just for processing orders and shipping them out. It stores inventory straight from the manufacturer. Though we're using the word storage lightly here. Most retailers who use this warehouse, their inventory turns over every few months.
We want to process volume, right? We don't want this facility to be a storage facility. We want items coming in to be turning. Because UPS's retail customers here sell mostly online, they want to move fast to capitalize on trends and get products out quickly.
Right now we have five different customers in the facility. I've noticed one over and over again. There's one that is our largest customer and one of our fastest growing brands. I can't name the brand because of its agreement with UPS. All I can say is it's a newish clothing company that focuses on undergarments and loungewear.
Being newish means the brand is still learning how to be nimble. Stearman says that's one of the trickiest parts of shipping logistics. You have to be ready to capitalize on that late night buyer who hypothetically realizes they need extra recording gear for an important reporting trip and they need it tomorrow. For air shipments, we can go as late as 11 p.m.
So that's the process behind what we're seeing when we order something and it's like, order within the next two hours for next day delivery, for two day delivery, for that kind of thing. That's right, exactly. Let's take a second to recognize how totally normal this has become. That you can, phone glowing, in the dark, from the comfort of your bed, buy a vegetable spiralizer or whatever as late as 10.59pm and be eating zucchini noodles for dinner the very next day.
Here's what happens after you click buy and go to bed. At UPS, it triggers immediate motion. If it's a popular item, it's probably already staged in a priority area for stuff that's expected to sell fast.
This requires UPS and its retailers to do a little forecasting. Let's say if you're having a sale coming up, what items are going to be included on that sale so that we're ready as soon as those orders do hit? With one-day shipping, every minute counts. UPS can't afford to waltz to the deepest depths of its warehouse one item at a time and expect to get it across the country in 24 hours.
So if a product goes viral and gets more clicks, the stock inches closer to the front of the warehouse, eventually joining a sea of blue crates full of all kinds of trending products.
Stearman calls this a dance floor. We actually thought about installing a giant disco ball over it. This is where the robots live, or dance, I guess. They look like those Roomba vacuums, but maybe four times the size. Big, flat discs scooting under towering stacks of blue bins. The robots whisk them over to packing stations on the other side of the dance floor. And we like to call that because they'll actually spin as well, and it kind of looks like they're dancing. The
The robots move nonstop, constantly reprioritizing crates of stuff as UPS's computers pull in more data about what's selling. After the orders are picked, humans take over. They're the ones who pack, tape, and label the boxes. We've got some things to make it easier, but it still requires that human touch to be able to really get that out the door for us.
Out the door of this warehouse isn't the end of the journey, though. Many packages are headed for the airport just 15 minutes up the highway for a one-way flight out tonight. In Louisville, Kentucky, I'm Kristen Schwab for Marketplace.
In China, the big question with retail right now is how to get consumers to spend more. A four-day meeting of the Chinese Communist Party started in Beijing today. Held roughly every five years, the gathering is expected to offer economic reforms to help consumers and boost domestic spending. Government figures out today show that between April and June of this year, the Chinese economy grew by 4.7 percent compared to the same period last year.
That's slower than the 5.3 percent growth in the first quarter and fairly lackluster by recent standards. Our China correspondent Jennifer Pak hit the streets of Shanghai to gauge the economic temperature.
It's been a scorching summer in Shanghai, but today is cooler, just 88 degrees. What's not so hot? Business at this newly opened coffee shop. Sales are OK, says owner Rose Liu, but nothing like her old coffee place that she closed in early 2022. Before the pandemic, she says, I could make money even if, to be blunt, I was selling garbage.
There's a lot less foot traffic now, she says. Customers who used to chase the latest food trends, maybe before where there were six signature drinks on the menu, they'd order all six. Now they might just order one.
A loyal customer, Li Zi, says she's cut back on her one obsession, shoes. Before, I might buy one or two pairs a month. But now I can go for six months without buying any. She's not spending as much, she says, because she works in marketing and a lot of her clients are cutting their budgets and she has less work.
Another customer, set designer Jiaying, says two weeks ago she quit her job. She's living with her parents in Shanghai, so she has no real financial pressures. Still, I'm spending less on travel and luxury products, she tells me. When she was growing up, China's economy consistently expanded by double digits. I asked her how she'd describe the economy today.
It feels restrained, she says. It's hard to describe. Like, people can't breathe.
That's Wang Dan, the chief economist at Hang Seng Bank China in Shanghai. Meaning even if Chinese manufacturers could sell more electric vehicles to the U.S. and Europe,
That wouldn't do much for the average worker here because manufacturing is highly automated. Also, people feel poor because the value of their homes is falling. If you have bought a house at the peak in 2021, by now for most cities, the housing value would have dropped by half already.
So Mr. Zhao sells vegetables and fruits. He says that his business is half of what it was pre-pandemic. And when I asked him, you know, what he sees for the next three to five years, he says, how in the world can I even think that far?
It's hard to predict what's going to happen even day to day, says bistro owner Du Guohao. That's why he's cutting back on all types of spending, including on food and rent. As for his restaurant? We're now doing fixed price menus, he says. We've cut the price of each meal and customers are buying more dishes. They feel they're getting good value for money.
An hour after I spoke to Du Guohao, the Shanghai police came by the Marketplace office. They say someone I'd interviewed for this story had complained. They wanted to make sure I was a real journalist, and an officer took a photo of my passport and press card. It seems just asking people how they're getting by in this economy gets some hot under the collar. In Shanghai, I'm Jennifer Pak for Marketplace.
Coming up... Today, variety is the spice of life. That's for sure. But first, let's do the numbers. The Dow Jones Industrial Average rose 210 points, half a percent, a finish of 40,211. The NASDAQ added 74 points, four-tenths percent, a close of 18,472. And the S&P 500 gained 15 points, just shy of three-tenths percent, to end at 5631.
How did some of those banks Sabri Beneshour was telling us about do? Goldman Sachs pocketed 2.6% after reporting that profits more than doubled in the second quarter. JPMorgan Chase deposited 2.5%. Citigroup grew 1%. Morgan Stanley, which reports tomorrow, added 1.1%. Bonds fell. The yield on the 10-year teen out rose to 4.22%. You're listening to Marketplace.
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This Marketplace podcast is supported by WordPress VIP. Just because a website is big doesn't mean it has to be complicated or hard to use. That's why the world's highest profile websites from News Corp to Salesforce to Samsung trust WordPress VIP. Built on WordPress, the user-friendly CMS that powers 43% of the web, WordPress VIP makes running, growing, and securing their sites a snap.
free your content creators to produce more content faster. Find out how at WordPressVIP.com. This is Marketplace. I'm Amy Scott. Have you noticed swimming pools and summer camps seem better staffed this year? The teenage summer job is making a comeback.
Last month, more than 37 percent of 16 to 19-year-olds were either working or looking for a job, just shy of a 15-year high of 38 percent back in March. The recent surge in teen employment follows pandemic labor shortages and reverses a decades-long trend of declining teen participation in the labor force. Marketplace's Savannah Marr has more on what's motivating the youngest workers in our economy.
Campbell Perkins has been getting his hands dirty in his summer job as a trail builder. Most days we are just digging up the grass and like sagebrush and mahogany and all that. This is in a recreation area outside his hometown of Laramie, Wyoming. And then raking all of the organic stuff off of the trail so that it's just dirt. Much better for hiking and mountain biking. Perkins says it's hard work, especially in the heat. But
but well worth the $25 an hour he's making. Which is great for a job with no qualifications or anything as an 18-year-old. Teen labor force participation had been on a steady decline since the early 2000s. Nicole Smith, chief economist with Georgetown Center on Education in the Workforce, says fewer kids were dropping out of school, and the low entry-level wages teens could command just didn't feel worthwhile.
But pandemic labor shortages changed the equation. So what's happening is there's been a little bit of a pay bump. With the lowest paid workers in the economy seeing the fastest wage growth. Young people are finding that the opportunity cost of not joining the job market has increased. Now that they can command better pay and more desirable roles.
And team workers are in a good position to hold on to those gains, says Liz Wilkie, principal economist with the HR firm Gusto. And even though the labor market may be loosening a little bit, that's been showing up in industries, you know, that tend to hire a lot older workers. While sectors that attract a lot of younger people, like service, retail and construction, keep hiring.
And now that employers have seen they can count on some teenagers in higher paid roles. I wouldn't be surprised if we saw some long-term openness. Like at Ruby's Inn, just outside Bryce Canyon National Park in Utah, which has always relied on teenage workers during the busy summer season. But since the pandemic, general manager Lance Syrett says his youngest workers have had new opportunities. Yeah, we do have 16, 17-year-old servers in our restaurants.
who a few years ago might have only been competitive for dishwashing roles. And for the three teenage workers in Syrett's own house... Having them be able to have a job here at the resort and pay some of their own bills, gas bills, car insurance, it has become more of a necessity. Because inflation is stretching the family budget...
In Laramie, Campbell Perkins is putting some of his summer earnings toward fun stuff. I've spent a few hundred dollars on, like, sport equipment. I really like volleyball, so I got a nice net. But mostly, he's saving for college. He'll keep living at home when he starts at the University of Wyoming this fall. It kind of works out. I don't have to pay for housing and food and all of that. But he will be responsible for his four-figure in-state tuition bill after scholarships. His
His $25 an hour trail building paycheck is seasonal. The ground freezes over the winter. So Perkins is on the lookout for a school year gig where he'd make at least $15 an hour. And he likes his chances. I'm Savannah Marr for Marketplace.
From teen jobs today to teen jobs maybe a few decades ago, we've got another installment of our series, My Analog Life, all about the ways technology has changed how we work. Hit it. Hi, my name is DJ Asha. I live in LA. I moved over here in 2008, but I'm born and raised in London, England, and I'm a DJ. I started DJing as a teenager.
My mom lent me 900 pounds, which I spent on a Pioneer mixer and two turntables. And then I practiced at home and I started getting gigs.
When we were DJing with vinyl, you know, I had record boxes that would hold maybe 60 records, 50, 60 records packed in tight. So I could only physically carry like two of those boxes to a gig. So I had to spend time at home preparing and figuring out what I wanted to play, especially when I started traveling internationally, because then there was a limit on how much luggage I could physically take.
Probably the mid-90s, CDs started to become popular just in people's homes. That was tricky because you had to decide, am I going to try and rip vinyl records that I already have and record them onto blank CDs, which we did a lot of, or am I going to buy the songs again? And it's quite costly to replace your whole collection, your whole vinyl collection. ♪
We had to kind of make that decision. And so you would see DJs carrying CD cases, like with sleeves that you'd put your CDs in and you would label them with all the songs. So I would have like, you know, I don't know, R&B hits. And it would have like Mary J. Blige and I had to label so I could quickly look at it. Because before we would pull up vinyl and look at the sleeve. When it became really required for you to play CDs, that was early 2000s.
Today, variety is the spice of life. You have some DJs who are purists and who are still playing vinyl records. And you have a lot of DJs who are playing with USBs.
But I'm an open format DJ, so I'll be playing, I don't know, a Kendrick Lamar record one minute and the next minute I'm playing some old school, you know, Chaka Khan or something. So I really need my whole catalog with me. So I take a hard drive and my laptop and I usually plug that into a controller so I can just carry that around with me to different gigs. ♪
I do not pack vinyls with me. I have some precious vinyl at home here in my house that I, you know, will play every now and then just for fun. And I did leave some at my mom's house in England that she probably wants me to come and collect. But I sold when I moved from England in 2008, I sold probably about 2000 records there.
And I brought a few with me, a few precious few that I couldn't part with. And I have some that are signed by artists, so I'm not going to part with those ever. That's DJ Asha in Los Angeles. If you've got an analog job that you're struggling to part with, drop us a line at marketplace.org slash myanaloglife.
This final note on the way out today, more context ahead of those retail sales numbers coming out tomorrow. More people applying for credit were turned down last month. The Federal Reserve Bank of New York said today that the credit rejection rate rose to 21.4% in June, up from 18.7% in February, though slightly lower than a year ago.
The increase comes amid a decline in overall applications for credit, a sign perhaps of a more cautious consumer. Our daily production team includes Andy Corbin, Elise Hassan, Maria Hollenhorst, Sarah Leeson, Sean McHenry, and Sophia Terenzio. I'm Amy Scott, and we hope to see you back here tomorrow. This is APM. Understanding personal finance can feel like an impossible task, but it doesn't have to be that way.
I'm Janelia Espinal, and on Financially Inclined, I'll guide you through simple money lessons that will change your financial future. Learn about credit scores, how to avoid scams, and why you need a savings account. Plus, we explore the brain science behind FOMO and what you can do to make smarter money decisions. Listen to Financially Inclined wherever you get your podcasts.