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All right, you got about a minute to think of your best question about this economy, and then we'll see if we match. From American Public Media, this is Marketplace. In Los Angeles, I'm Kyle Risdell. It is Thursday today. This one is the 15th of August. Good as always to have you along, everybody.

Okay, so if you had a voting member of the interest rate-setting Federal Open Market Committee on the phone and you had six, maybe seven minutes to ask him anything you wanted...

Where would you start? The backdrop, of course, is that the Fed's main interest rate has been at about 5.5%, what economists like to call restrictive, for more than a year now. The labor market is showing some signs of strain, and inflation, as we learned yesterday when the consumer price index came in at 2.9%, is the lowest it's been in more than three years.

Do you think about your first question? I am going to throw mine to Rafael Bostic. He's the president of the Federal Reserve Bank of Atlanta. Dr. Bostic, great to have you back on the program, sir. Good to be back with you, Kay. So you get CPI the other day. You get it a day early, right? I do not. I get it with everybody else. All right. So you get it yesterday morning and you see 2.9 percent. And what's the first thing you think?

The first thing I think is inflation is getting back to target in an orderly way. And I have, geez, a lot more confidence that inflation is sustainably on its way to 2%, which is a very good thing. The top line numbers have been falling consistently. The PC before the CPI had fallen nicely. And the CPI number is the first time since May

March of 2021, that had been below 3%. So lots of progress, and that's very positive. All right. So look, you said a couple of magic words in there. It's proceeding orderly toward 2%. You have more confidence. The next question has to be, what's taking you guys so long?

Well, I think you have to remember our target is 2%, it's not 2.9 or 3.2. There's still a ways to go and things can happen on that road. So I think it's in all of our interests to be cautious and vigilant to make sure that the next reading doesn't take us in a different direction. I think I've been on your show about a year ago and I was saying that we're going to have to wait this out and just be patient.

Because if we rush, go too soon and then have to raise rates again, that's the nightmare scenario. So I want to make sure that we avoid that. Understood. But a year ago, unemployment was, I don't have the number right in front of me, but certainly less than 4%. Now it's ticking up. It's 4.3. And the labor market is starting to look a little meh. How much does that change your calculation?

Well, it's definitely a factor. You know, when I talk about the labor market, the phrase I use is weakening but not weak. By historical standards, the unemployment rate of even the 4.3% is pretty low. Now, what you said is true. It's come off of a 3.4% level. So that's a lot of weakening. But when I talk to businesses, what they tell me is –

although they're not looking to hire a lot of workers, they're actually not in layoff mode either. Their outlooks are that demand is going to stay strong and that the workforce they have today is going to be one that will sustain. So it's still tight out there. I try to remind people, right before the pandemic happened, everyone was saying labor markets are tight. And how can we continue to have a strong economy if we can't find workers? We're kind of in that space again.

Is it fair for us who those for those of us rather who keep a close eye on the Fed to to intuit that you all are starting? I mean, it's not that you haven't been paying attention to the labor market, but inflation has been taking up virtually all of your brain space. Do you now have more brain space for the labor market as it weakens but is not weak, as you say? I definitely do. You know,

The thing that I'm most concerned about at this point is that we have a dual mandate and both of them need to get to their target. Inflation is moving in the right direction. Employment might be moving in the wrong direction. And so the thing I'm most concerned about is that this weakening that we've seen accelerates in such a way that jobs stop being produced and

And then that might lead to more disruption and pain in the labor force. What I would say right now, though, is I'm pretty pleased that that's not what we're seeing now. And that's the important thing. Consumers, by and large, are continuing to spend. And so the demand for product is good. And firms and businesses feel like they've got to keep their workers because they've got some demand to meet. You know, we had, John –

In the earlier days of the pandemic, when transitory was the word of the day, and you very famously, as you said on this program and elsewhere, you had a little swear jar at the Atlanta Fed. Every time somebody said transitory, they had to put a buck or whatever it was in the swear jar. And we're past that discussion. Here's my question, though.

The consuming public sees inflation coming down at a very nice clip, much closer to where the Fed wants it to be. The catch, of course, is that price levels remain elevated. How do you make people understand that even though inflation is down, price levels are likely to remain high? Well, I say it just the way you said. Price levels are not likely to come back down. But

The most important thing in all of this is that wages are growing faster than inflation. So families' pricing power, purchasing power, is increasing with every month. And over time, the prices won't feel like so much of a sticker shock. It's just going to take some time for that wage dynamic to play out. And once that does, I think people will start to level into a new equilibrium.

I'm going to commit the journalistic sin here of asking you a question that I know you're going to dodge, but I kind of have to anyway. The Fed is going to become more political as the election season goes on. And I know you will say, as Fed Chair Powell has said, as all of y'all say, we don't let it interfere with our decision making. Here's my question. When you're in the room, and we'll say that you're a voting member of the Federal Open Market Committee this year, do you all talk about not talking about the politics of this whole thing?

I don't because I'm not going to talk about it. So there isn't a reminder that needs to be made. No, it's really interesting. If you look back over the history of the Fed, even in the last 20 years, the Fed has done actions in election years close to the election date itself. And so for me, I think that's a reminder to me that

We have a history of doing the right thing at the right time or the thing that we think is right at the right time. And I've got an obligation to abide by that and to continue that tradition moving forward. Last thing, sir, and then I'll let you go. September live meeting or not a live meeting? Every meeting is a live meeting. I look.

I'm hopeful that the numbers are going to come in quite positive and we'll have an interesting conversation about whether we should be moving off of our policy stance. And then we'll just see sort of where that goes. Rafael Bostic at the Atlanta Fed. Dr. Bostic, thanks for your time, sir. It's always good to have you on. Always a pleasure to talk with you, Kai.

Wall Street today, you will notice I did not ask Dr. Bostic about the stock freakout a week ago Monday and all the clamoring for an emergency interest rate cut because the markets threw a hissy fit. You want to know why I didn't? Because stocks go down, too, and emergency rate cuts are exceedingly rare. That's why. Equities today, though, my money, and again, I don't get to decide, my money is on the really happy music. We'll have the details when we do the numbers.

Hey, you remember all the fretting over American consumers the past couple of weeks, whether we would be able to keep spending the way we have been? I mean, the unemployment rate popped up 4.3 percent, as Rafael Bostic and I were just talking about. The general mood was not great. Well, about that. The Census Bureau reported this morning retail sales in July were up a full percent, which as these things go, is a lot of money.

is a lot. Marketplace of Sabri Beneshour makes it all make sense. Collectively, we spent almost $7 billion more in July than we did in June. Consumers continue to spend. Gus Fauché is chief economist with PNC Financial Services Group. We saw big increases in a lot of categories like appliances, home furniture, food and beverages, restaurant sales were up, all of those kinds of things.

And there's a very good reason why people are still spending. They can. Tuan Nguyen is an economist at RSM. We have now had 15 consecutive months of positive real wage growth.

So even when factoring in inflation, people have been earning more than the increases in prices. Not only that, but at least in the world of retail goods, inflation has actually been negative for most of the last year. Meaning goods prices have decreased on aggregate.

This is evident from the shelves and online stores where we see more aggressive discounting and longer sales programs lasting all summer. But that discounting is also a sign that consumers' tolerance of price increases has worn thin. That's been on display at Walmart, which reported positive earnings today, says Blake Drosh, senior analyst at eMarketer.

And it's actually experienced a boost from higher income consumers that are looking to trade down and are visiting Walmarts instead of going to grocery stores that are maybe higher end stores.

So yes, the consumer is in mostly good shape, but... The consumer is also being very considered and choiceful and looking for great values and low prices. Oliver Chen is head of retail and luxury goods at TD Cowen. The heat is on for every company to offer extremely clear value to customers. So expectations are the consumer will continue to lift the economy through this year, but not all sellers may enjoy the ride.

In New York, I'm Sabri Beneshour for Marketplace. Not all podcasts are alike either. If you miss something on the air or you just want to hear it again, we've got a podcast. You can get it at our website, marketplace.org, or the platform of your choice. I didn't get too terribly far into the data with Dr. Bostic up at the top of the program, what the Fed looks at and how they like to think about it. But the central bank does take the long view data and its changes over time as a way to figure out what's going on.

As it happens, we do the same thing. Two data points today, two people I met in Phoenix when I was there reporting for our series Breaking Ground. Gabriella Medina and Danelle Makovsky were taking a two-week course at Mesa Community College aimed at getting them entry-level jobs in the semiconductor industry. They were both part of a special cohort from an organization called Fresh Start, which helps women, especially single moms, get job training and other services. Here's Gabriella.

Since I wrapped that up, I got an interview with Intel from one of the managers. From there, he wanted to actually have me do an internship. And unfortunately, that wasn't going to work with my hours. It would have been like school on top of work. And I just wouldn't have had time for my baby. ♪

I said, you know, I got to balance life and work. Unfortunately, he said, we are having talks about opening up another program. I can't speak too much about it. And I'm like, OK, no worries. You know, please keep me in mind. Again, this is my dream job. So I'd love to work for you guys. I just can't make that internship happen.

So about a few weeks later, the Fresh Woman Start program put out there saying, "Hey, Intel came up with this apprenticeship. Are you guys, if you are interested, join the Zoom meeting. We're going to talk about it." I'm like, "Heck yeah!" He pulled some strings and things are going awesome. I did my interview. I got the call back. I was really excited.

So now I'm just waiting to start, you know, August 19th. And we'll be doing school at MCC. Like I said, it's an apprenticeship. And by the end of the year, we should be journeymen. I'm still working for DoorDash. That's kind of my saving grace still.

And I'm just playing the waiting game. You know, I've known about my current Intel employment for quite some time now. So it's just a waiting process, you know, making sure that they have everything that we need so we don't have to worry about any bumps along the way. Having the opportunity to go to school and continue to go to school since I'll already have those credits is going to make a huge difference career-wise. ♪

just having that journeyman's license and then hopefully becoming an engineer or something. So I'm really excited for what they have planned and knowing that the future is bright for both me and my daughter is going to be amazing. Gabriela Medina there in Mesa, Arizona. One of her classmates coming up after the break. Music

Coming up. It's a lot to be accepted for a job and then to like get your hopes up and then to be denied. A lot. But first, let's do the numbers. Music.

As predicted, I've been doing this job a long time, you know, the happy music. Dow Industrials up 5.54 today, 1.4%. 40,563. The NASDAQ up 401 points. That is 2.3%. 17,594. The S&P 500 added 88 points, 1.6%.

55 and 43 there. Sabri was just telling us about how consumers are increasingly price sensitive. Walmart grew 6 and 6 tenths percent today on better than expected second quarter earnings. The retail giant also raised its full year outlook. The company cited strong performance in its grocery sales. Amazon picked up 4 and 4 tenths percent today. The coffee chain Dutch Brothers steamed up 6 and 9 tenths percent today. Got an upgrade from UBS which said worries over its slowing growth seemed excessive. Starbucks

with its not-quite-yet-new CEO up 1% today. Dell Technologies clicked up more than 7%. Though Citi just cut its price target on that company's stock. Go figure. Cisco Systems grew 6.8% today after posting quarterly results that topped expectations today. Oh, look. Cisco announced it's laying off 7% of its workforce and putting a restructuring plan into effect. Bond prices went down. When that happens, the yield goes the other way, 3.9% or 2% on the 10-year. You're listening to Marketplace.

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This is Marketplace. I'm Kai Risdahl. There are changes coming to real estate. Real estate agents, to be clear, how they make their money. And the changes are coming soon, starting Saturday. Part of a big settlement between the National Association of Realtors and home sellers who sued over inflated commissions goes into effect. It is supposed to bring more transparency into the process, but

As happens, there are going to be some unintended consequences. In a typical real estate transaction, there's a listing agent who works on behalf of the seller and a buyer's agent who works for the buyer. But as Marketplace's Amy Scout reports, keep your eye out for more agents working both sides of the deal.

It's called dual agency, when the same real estate agent represents both the buyer and seller in a deal. It's also known as double ending. And Benny Waller, a faculty fellow at the University of Alabama, says after the big realtor settlement... I think that dual agency is going to skyrocket as a result of this. To understand why, it's helpful to review how real estate commissions have traditionally worked...

Home sellers usually cover the commission for both their own agent and the agent representing whoever buys their home. Typically, 5 to 6 percent of the sale price split between the agents. But starting Saturday, it's no longer assumed that sellers will pay the buyer's agent.

They can, but likely many won't. And Waller says that means buyers will have to come up with thousands of dollars out of pocket for their agent's commission. In addition to all the other closing costs that they have to bring to the table.

Buyers who can't afford that may choose to tour properties on their own and work directly with the listing agent if they make an offer. That listing agent then becomes a dual agent, and Waller says they may accept a lower fee because they're also getting paid by the seller. But that creates a potential conflict of interest.

The buyer, of course, wants the lowest price. The seller wants the highest price. Dual agency is actually illegal in several states, and Waller says for good reason. Dual agency is like a husband and wife being represented by the same attorney in a divorce.

It just doesn't make good sense. The National Association of Realtors, which sets professional standards for its members, doesn't take a stand on the issue. But Nate Johnson, a realtor in St. Louis and the association's vice president of advocacy, says he's not a fan.

Especially with first-time homebuyers, they've never bought a home before, so they don't really know what they don't know. Say there's a problem with the sewer line. The listing agent may not fight as hard for a fix if they're representing both sides. Hudson Santana leads a team of agents at Keller Williams in the Boston area. He says his team doesn't do dual agency, but he understands the temptation.

If I have a listing and you're coming directly to me, I'm going to be tempted to say, hey, I can represent both parties because I'm going to make more money.

It doesn't mean that you're going to get a better deal or that my client's going to get a better deal. It just means I'm going to get a better deal because I'm going to make more money. In fact, he says even if buyers save on commission, they might pay more overall. Either by paying more money for the house. Or by ending up with a lemon. Sellers may lose out too. Benny Waller's research has found that properties sold through a dual agent sell faster, but for less money.

Others say dual agency can work, if done ethically. Connie Antonew sells luxury properties at a golf club in suburban Chicago. I'm the number one agent there and have been for years.

She acts as a dual agent in 20 to 25 percent of her deals. They oftentimes will call me direct because they feel that I might be the go-to person, you know, for the community. Both parties have to agree to dual agency. And in her state, she can't negotiate for or advise either one or share non-public information. Remember the divorce analogy? Antony says this is more like mediation.

where you do have one person managing both of the divorcing parties. If everything's being disclosed and everybody is up front and above board on everything, I think it's great. And she expects the commission changes to be a windfall for agents like her who do it well. I'm Amy Scott for Marketplace.

We heard a couple of minutes ago from Gabriela Medina, who, after taking a course at Mesa Community College back in March, is starting an apprenticeship at Intel next week. Here is one of her classmates. My name is Danelle McKepskey, and I live in Glendale, Arizona. Right after finishing the Quick Start program, I did receive an offer from Tokyo Electronic Limited. But to be real honest, I do have a background in

And I was then denied because of my background in addiction. My life has completely changed. I've completely done everything I need to. I'm in a program of recovery. I live a whole new life now. I have been on a total of eight interviews and seven job offers. But again, the background with my felony comes into play. Yeah.

Some of the jobs I didn't get to the background check because some of them were only offering to pay $16 an hour. I did run the numbers and I had to just let them know, you know, I didn't want to be that person who was like, oh, I can't come into work today because I can't fill up my car.

With all these interviews that I've been going on lately, I can say that sometimes I do just get in my head and I'm over it. It's a lot. It's a lot to be accepted for a job and then to get your hopes up and then to be denied. But ultimately, I take it as a learning and growing experience. Each interview I go on, I'm more confident.

I have like my two interview outfits and the one I'm like, okay, this is my lucky one. I have two big job opportunities right now that have given me offers. One is with Intel for an apprenticeship and one is with TSMC.

No matter what the outcome is, I have grown so much from this process. You know, I came into this when I first started the school. I didn't really have self-esteem. Starting a brand new career at 45 years old. Like I walked into school, but I was so scared and I doubted myself. And so through this whole process of just the schooling, the interviews, having job offers, it's really boosted up my self-confidence and my courage. That's something that I'll always carry with me.

My son is going to be 16 in February. So I've been talking a lot to him about what does he want to do. I mean, he knows what he wants to be a welder. He has that pretty much down. But I've talked to him about apprenticeships, just options that I never knew were there in the past. And so I was like, you know, try to get an apprenticeship. Try to do this, you know, like teaching him what I'm learning along the way, too. Music

Dan Amakovsky, keeping on keeping on in Glendale, Arizona. This final note on the way out today, I saw this in the New York Times this morning. It's data from the Department of Energy that wind turbines generated more electricity than coal-fired power plants in March and April. That is the first time that's happened in back-to-back months ever.

John Buckley, John Gordon, Noya Karr, Diantha Parker, Amanda Peacher, and Stephanie Seek are the Marketplace editing staff. Amir Bibawi is the managing editor. And I'm Kyle Risdell. We will see you tomorrow, everybody. This is APM.