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Hey, we've got some time to kill up at the top of the program today. You want to hear what happened this week, economy-wise? From American public media, this is Marketplace. In Los Angeles, I'm Kyle Risdell. It is Friday today. This one is the 21st of June. Good as always to have you along, everybody.

I know the conventional wisdom has been that the news slows down as summer gets going. I will just say here that that point of view is no longer conventional, nor is it wise. So we're going to take six minutes now, maybe seven if we stretch it, to make that case. Jordan Holman is at The New York Times. David Gurra is at Bloomberg. Hey, you too.

Hey, Kai. Hey, Kai. Jordan, let me start with you. And retail sales this week came in less than expected. Not so great. And also April was revised down. I would like to know from you and the reporting you've been doing, what retailers are making of this?

Yeah, I think, you know, when April sells, we saw last month, everyone's like, maybe it's a fluke. This week, when we saw the May sales, it's like, oh, maybe this is more of a trend that we're really in this place where people are spending less. When they spend less, they're looking for deals. And that's just something that retailers have somewhat been aware of. But now they actually have to act on that. And by acting on it, giving people discounts again. Say more about that, because I'm all in favor of discounts.

Everyone loves a deal. Yeah. So we've heard from like big companies like Target and Walgreens saying they're taking these broad price cuts on like, you know, five,

5,000 items across their stores saying we're going to keep them lower. I would say the asterisk on some of these announcements is they're limited time deals. But what they do is hopefully, you know, give a good PR moment to these companies and just make people feel better about spending with them and thinking that they're getting a deal with them.

It still remains to be seen how long that lasts. For all of the wailing and gnashing of teeth, though, David Gurra, about retail sales slowing down, that is actually, and in point of fact, a good thing right now.

Yeah, this is what the Fed wants to see. And of course, that's the backdrop to all of this is sort of when the Fed is going to feel comfortable enough with the progress it's made fighting high inflation to lower rates. That's the objective here is to get the economy to slow down. And to Jordan's point just a moment ago, yes, it's good PR for these companies are even seeing the president kind of touting when Amazon and Amazon.

Walmart and these other companies do this. And I was struck to Lael Brainard, who's Joe Biden's chief economic advisor, gave a speech earlier this week. And she like very sharply and forcefully took companies to tasks that haven't cut prices even as input costs have come down. So getting back to what you asked, yes, this is what the Fed wants. This is what's supposed to be happening here. Obviously, the delicacy is you don't want them to drop

Extremely so. Right. Jordan, that thing that Lael Brainard was talking about, about companies sort of taking advantage of things, what do the retailers that you're talking to say to that? I mean, obviously they're not saying, yeah, we're doing it, but by the same token, facts is facts and they are making a lot of money.

Facts is facts. So like there's you really hear this argument in the consumer packaged goods space, like in when you're talking about Coca-Cola or Clorox and whatnot. And there's some truth to it. It's like, yes, their input costs became more. But I think we're getting to this point where people like consumers don't want to hear that from the customer or from the companies anymore. So take McDonald's.

people post on social media all the time about how there's big Mac used to be what $3 and now it's $5. And just this week, McDonald's came out and said, Hey, we're bringing back that $5 value meal. Like, are you happy basically? So despite companies actually having higher costs, we're at this point with consumers saying like, I can't bear that brunt anymore and something has to change or I'm not shopping here. Uh,

All right, we're going to get back to retail in a second, but David, I want to turn to the markets for a minute, and I want to talk about the NVIDIA Effect, the AI chip design company, which is steamrolling everything, and depending on the day, it's the most valuable company on the planet.

That does not seem to be sustainable, and it does seem that a market rally based on one company is not ideal. Yeah, it's a huge risk, and NVIDIA has had a great month, a great series of months, really a great couple of years. This is a company that's been around for a long time, but when you look at the promise and potential of AI, this is really the vanguard, and there are some people who say this is getting kind of bubblicious, but yeah, this is a massive company now, and it's one that I think everyone...

so closely associates with AI, that's fueled a lot of this growth. But you point out, you know, the S&P 500 is 500 companies. And when you look at the gains...

So many of them are still concentrated among a handful of companies. And this one in particular, there is risk with that. If something were to happen with this company, if something were to happen with AI, what would that mean for the market more broadly? And I think, you know, as I talk to investors and portfolio managers, something that keeps coming up is, yes, you know, obviously there's agreement that AI is the future.

capital T, capital F, but like when does it begin to trickle down from this company or this handful of companies that we know have made big investments in the chips and the technology behind all of this? When does it start to sort of make its way into other companies? Yes, they all talk about it, but what's kind of the knock-on effect of NVIDIA's surge? Right, and we were talking about that, David, with Matt Levin yesterday. He did a story for us on the others in that space who were trying to get in. It's a remarkable market concentration. Something like 75% to 90% of the AI chip market is designed by NVIDIA.

Yeah, they have a huge hold on this and they do a lot of investment in AI as well. So, yeah, you kind of look for other things that are AI. But at this point in time, NVIDIA really has the market all but cornered. Here's another thing that's AI, Target and AI in retail. Jordan Holman, help me understand that. What are they doing? And also why? Yeah.

Yeah, and also why. So Target is probably like one of those first companies actually putting AI technology in the hand of the store workers. Right now in retail, it's usually been used, generative AI has been used to design or for marketing purposes. But what Target is saying is,

We built this chatbot. It's allowing our workers to learn quicker. So if they have a question of how to reboot the register or how do I make this price change on an item, it's right there at their fingertips. They don't have to ask their manager. And the idea behind that is happier workers, happier shoppers, happier

workers who know the answers to things. You don't have to be wandering around the store trying to find someone who can help you. And hopefully that translates into someone buying things and feeling good about buying things. So right now, Target, as well as other companies, are testing this type of AI, saying this could actually help move the needle on getting more sales. Quickly, Jordan, do you buy that? Do you think it's going to work?

I think we're a long ways off to seeing if this works. It's still early testing phase. And a lot of and some companies have pulled back on some of the investments. You know, McDonald's is an example. Right. David, super quick change of gears here. I didn't want to talk. Did want to talk about the Bank of England this week, deciding not to lower its benchmark rate, even though inflation over there is at its target of two percent. I think there's a cautionary tale here.

for when we get to 2% here and what people think the Fed's going to do right away, which is cut rates. And I don't know, man. Yeah, I think the cautionary tale is nobody wants to move too fast and have to kind of readjust if we see inflation surge once again. So what you saw from the Bank of England is, yes, inflation has come down, but they don't want to move too quickly. Why not take the extra time? Just make sure that what they've done to the economy is set in and isn't going to change. And certainly when you look at Jay Powell and the Fed,

They're keeping a close eye on what's happening in London. They're also looking at what's happening with the ECB and the Swiss National Bank as well. Something that stood out to me, though, is that there isn't the unanimity that you see at the Fed when you look at the bank. Seven out of nine were in favor of this, but two weren't. And Jay Powell still to this point has gotten everybody behind him as he's made the decision to keep rates where they are. It's all about the data. David Gurra at Bloomberg. Big Take is his podcast. And Jordan Holman covers retail at The New York Times. Thanks, you two.

Thanks, Kai. Thank you. Have a nice weekend, gang. On Wall Street this Friday, flat-ish. Details, numbers, you all know the drill. You know how when the Wi-Fi goes out at home, you kind of just don't know what to do with yourself?

Well, that, but for something like 15,000 car dealerships in the United States and Canada. Earlier this week, a company called CDK Global got hit with a cyber attack that it still hasn't recovered from. And as it happens, CDK Global provides key software for those 15,000 auto dealers handling everything from sales to inventory to billing you for that air filter replacement that they told you that you need, but you're not really sure you do.

Car dealers are, of course, a pretty big part of this economy. Doing, says the National Automobile Dealers Association, some $1.2 trillion in sales last year. So, Marketplace's Matt Levin made some calls to see how they're doing.

In the wake of the CDK hack, there's a new policy amongst the salespeople and mechanics at Willis Automotive Dealership in Des Moines, Iowa. No cursive. We have a lot of staff members that are younger than 30 that I'm not sure have seen cursive in their life. So we try to not go the cursive route just to make sure everybody understands what's going on. Gee.

Jason Willis is CEO. He says after CDK first went down on Tuesday, his whole staff has had to basically write everything down by hand. Credit applications, repair tickets, you name it. He has no idea where they found the old school carbon copies they're using. CDK is our sales communications. They communicate our parts, our parts inventory. It's really the backbone of our business from the technology side of it.

CDK did not respond to an interview request. Industry analyst Yossi Levy at the car dealership guy says car sales may not be that disrupted. You can always arrange to buy a car the analog way and then drive it off the lot when a dealership returns to the 21st century. Repairs, though, are a different matter.

Service is a huge issue because service, every dealer in the country is already at the pass. There's a commission shortage. So every day that service is not producing, that is lost productivity. And a win for repair shops and service centers outside dealerships.

The service department at Plaza Ford in Bel Air, Maryland, is running on a skeleton crew because of the CDK hack. But President Tom Walz isn't worried about losing customers permanently. The customers that we've encountered so far fully understand. And I think it's something that's sort of accepted in today's world because, you know, we've had medical institutions hacked. We've had banks hacked.

That's partly why Walls doesn't think his dealership will switch away from CDK. It would take months to do so anyway. I'm Matt Levin for Marketplace. ♪♪♪ Assuming your Wi-Fi is still up, if you happen to miss something on the air or you just want to hear it again, which is good too, you can check out our podcast. Marketplace.org is where you can get that or the platform of your choice. Follow us there. ♪♪♪

There are, of course, the climate effects of climate change. More and more severe storms, more and hotter wildfires.

And then there are the economic effects of climate change. Supply chains changing, workers exposed to higher and more dangerous temperatures. Also, insurance costs. More intense and more expensive natural disasters are driving up insurance rates across the country, forcing homeowners to often turn to state or federal-backed insurers of last resort.

Case in point, Citizens Property Insurance Corporation, Florida's insurer of last resort, which has become that state's biggest insurer and which this week said it's going to ask regulators for a 14 percent rate increase. Marketplace's Kimberly Adams has that one.

As the insurer of last resort, Citizens is supposed to provide policies to people who can't get insurance in the regular market, which in Florida, after years of rising rates, big storms and insurers leaving the area, is a lot of people. Having 1.2 million policies is way too heavy of a risk load for citizens. They consider a manageable level to be 400,000 to 500,000 policies.

Mark Friedlander is with the Insurance Information Institute. He says while changes to state law have lured some companies back...

They're adding 5,000 a week or in total approximately 200,000 new customers since October. So the rate gap needs to be corrected so that Citizens is as close as possible to private market rates. Citizens, which did not respond to an interview request, is asking state regulators for almost the maximum allowed rate hike, something Mel Montagny, president of the advocacy group Fair Insurance Rates for Monroe, or FIRM, plans to fight.

For Montagny and his neighbors in Monroe County, which includes the Florida Keys, when it comes to citizens... It's not our market of last resort. It's predominantly our only market down here for windstorm. Montagny says a 14% rate hike will bring higher premiums for many Floridians already struggling to pay the bills.

It's incredibly expensive. You're looking $6,000 to $8,000 on average. While this is happening in Florida, Chuck Nice, who teaches risk management and insurance at Florida State University, says there's a lesson here. Tornadoes, wildfires, earthquakes, all of these things have led to homeowners insurance being

less predictable and less profitable for insurers. So rates are going up. And it's not just a Florida problem, says Nice. It's across the country. In Washington, I'm Kimberly Adams for Marketplace.

Coming up... When you bury trash, it creates a lot of methane gas. When you burn it, it creates a chemical called carbon dioxide. Neither of those things are good. But first...

Let's do the numbers. Dow Industrials, you know we're going to call it flat, up 15 points, 39,000, rather, 150. The Nasdaq off 32 points, about two-tenths percent, 17,689. S&P 500 down eight points, about two-tenths percent, 54 and 64. For the week, the Dow up one and a half percent, the Nasdaq flat, the S&P 500 up six-tenths of one percent.

Matt Levin was just telling us about car dealerships and that software glitch hack that is happening and some car selling stocks then. Ford Motor Company slowed to 0.8% today. Genuine Parts Company was flat. Kimberly Adams talking about insurance in Florida. Home insurance companies Chubb Limited and Hartford Financial Services Group both down about 0.7%. RLI Corporation dropped 0.8%. Bond prices went up 1%.

When that happens, the yield goes down. The 10-year T-note stands at 4.25%. You're listening to Marketplace.

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This is Marketplace. I'm Kai Risdahl. Imagine, would you just for a second, what it might mean for this economy if we didn't have any maps. Transportation, trade, minerals extraction and mining, disaster mitigation, all of that would be made complicated, to say the least, if we didn't know where we were going.

Turns out for most of the planet's surface, we don't have very good maps at all. I'm talking about the ocean floor here and the news today that researchers have completed a map of just over one quarter of the global seabed. It's part of a long-term effort to map the entire seafloor for the first time ever. Marketplace's Daniel Ackerman is on the marine cartography desk today.

Humans have been sailing the seas for millennia, without a great sense of what was underneath. We never had a good way to map the seabed. That's because the techniques for most of that time were very, very primitive. Larry Meyer is an oceanographer at the University of New Hampshire. And by primitive, he means a hunk of lead on the end of a rope. And that's no way to measure three quarters of our planet. He says sonar technology, developed since World War II, has made seabed mapping way more efficient. To

To do it, you need special ships to crisscross the ocean, bouncing sound waves off the seafloor, which can get expensive. The cost estimate was somewhere between three and five billion dollars. But when you wind up with a map of most of the globe, the cost estimate is really a bargain. Dawn Wright is an oceanographer and chief scientist at the mapping company Esri. She

She says the project will more than pay for itself. There are so many benefits. We're having this conversation because of the seafloor. Specifically because of the million-plus kilometers of data cables down there. And it's not just the telecom industry that could use a better map. There's also tsunami prediction, climate modeling, fishing, mineral extraction, and that little industry that moves almost all the stuff we buy. Accurate maps of the seabed help to keep thousands of ships safe.

safely moving goods and services around the world. A study commissioned by the Australian government found that seafloor mapping boosted its economy to the tune of $9 billion. The U.S. wants to learn more about its own seabed because, simply put, there's a lot of it, says Robert Ballard, president of the Ocean Exploration Trust. 52% of the United States is under the ocean, and I want to know what we own. It's basic inventory, really.

The researchers hope to have their map of the entire seabed done by the end of this decade. I'm Daniel Ackerman for Marketplace. You got your standard sources of greenhouse gas emissions, internal combustion engines, agriculture and manufacturing, general human existence.

Less well-considered, though, is food waste, from the energy used in making the food to begin with and transporting it to the methane you get when it rots in landfills. To divert some of that waste stream from those landfills and incinerators, more cities are offering municipal curbside composting collection alongside regular trash and recycling pickups.

A study last year from BioCycle, that's a group that specializes in organics recycling, as it's called, counted more than 250 of those curbside programs around the country. And in some cities, Seattle, San Francisco, parts of New York among them, separating food waste is mandatory. But what seems on the face of it to be a simple climate solution is not necessarily easy. Marketplace's Amy Scott has our story from Baltimore.

On a shady street in Baltimore, a white electric van with a sign that reads, Caution, Youth Working, pulls up to the curb. 21-year-old Sylvia Lassini hops out, finds a green bucket waiting for her on the sidewalk, pops off the lid, and dumps the contents into a bin. So let's, uh...

Look in here. We've got some bulbs, it looks like. Eggshell. Tomatoes. Zucchini. The smell is ripe. Does it ever gross you out? Oh my god.

Sometimes they're nasty. Lassini is a youth composter with the Baltimore Compost Collective. The business picks up food scraps and yard trimmings from customers around the city and composts them for use in local gardens. She dumps her small bin into a larger one in the back of the van.

And it's on to the next stop. We collect up to 1,500 to 2,000 pounds on a weekly basis. So starving the incinerator and keeping it away from the landfills.

The collective's founder, Marvin Hayes, who's driving the van, says if all that went in the trash... When you bury trash, it creates a lot of methane gas. When you burn it, it creates a chemical called carbon dioxide. But if it's left in a compost pile or bin exposed to oxygen, microorganisms break it down into a nutrient-rich fertilizer. And it's a soil enhancer, so it helps sequester carbon and put carbon back into the soil.

Hayes started the Baltimore Compost Collective almost a decade ago to train young people in job and leadership skills and prevent waste from ending up here. At a 30-year-old incinerator...

in southwest Baltimore that emits planet-heating greenhouse gases and pollutants that can cause asthma and other health problems. Shoshonda Campbell is environmental justice coordinator with the South Baltimore Community Land Trust, a group that's been fighting the incinerator for years.

I grew up in that community where I seen the struggles of health impacts happening because of the way that we're dealing with our waste. And it's not right that it is disproportionately affecting communities of color. Campbell's group recently filed a civil rights complaint with the EPA, asking the agency to investigate the incinerator's health effects and require the city to spell out a plan for diverting more waste.

The group estimates about 40% of what's burned here could be composted. We want composting. We want curbside. We want to have that option. And we need the city to get on board. The city says it is on board, at least with the idea. Achieving curbside composting for us is an ultimate goal for Baltimore City.

Richard Luna is deputy director of Baltimore's Department of Public Works. The city recently received a $4 million grant from the EPA to build a medium-sized composting facility, which he said will take about three years to build. But the agency would also need a new fleet of specialized trucks to collect food waste, and that's not in the budget.

About 60 percent of the curbside collections that we do are in alleyways. But our alleys here in Baltimore are so very narrow. And so we actually have to order specialized custom trucks just to fit through the alleyways. Luna says right now the agency is focused on outreach, encouraging people to drop off their food scraps at collection centers or use private services like the Baltimore Compost Collective.

where Marvin Hayes is doing his best to spread what he calls compost fever, sometimes through poetry. We don't have to burn or bury our organic material. It's time to compost and adjust.

I won't stop until I see the incinerator raised and crumbled in the dust. Let's take a stand for compost to make Baltimore a better place for all of us. He says composting in Baltimore has come a long way since he started with just five customers in an upscale area where suspicious neighbors would report him for stealing something they weren't sure what out of buckets.

Today, the collective has 400 customers and counting. In Baltimore, I'm Amy Scott for Marketplace. This final note on the way out today, make of this what you will should you happen to be in a corporate decision-making job.

We're talking return to office policies here, which Dell, the computer company, attempted to put into place back in February. I saw this on Business Insider. Be on site, give or take three days a week. Or Dell said you are not going to be eligible to be promoted or hired into new jobs within the company.

Business Insider says it has seen internal company documents showing that almost half of Dell's workforce has decided to stay remote. Don't need no promotions. Thank you very much. Our theme music was composed by B.J. Lederman. Marketplace's executive producer is Nancy Fargali. Donna Tam is the executive editor. Neil Scarborough is the vice president and general manager. And I'm Kyle Rizdahl. Have yourselves a great weekend, everybody. We will see you again on Monday.

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