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The calendar, people. It's all about the calendar. From American Public Media, this is Marketplace. In Los Angeles, I'm Kyle Risdell. It is Monday, today the 12th of August. Good as always to have you along, everybody. And where does the summer go, huh?
School starts soon in a lot of places. Vacations are winding down. Happy though I am to be back. Labor Day is practically around the corner. And oh, look, the economic calendar is upon us. Inflation is the theme of the week. Not shocking, I know. But one puts on the air the news that one has, right?
There will be updates on prices at both the wholesale and consumer levels tomorrow and Wednesday. But we begin today with us, consumers, and how we are feeling about where prices are going. Specifically, with the survey of consumer expectations from the Federal Reserve Bank of New York, which asked consumers to take a crack at guessing where prices are going to be in a year, three years, and five years down the road.
Mixed is the headline, but steady, nothing untoward. And that is important. Marketplaces Van Amar gets us going with how our perceptions of inflation can shape our reality.
When consumers are asked to forecast inflation, most of them are extrapolating from recent purchases. Whatever they shelled out on rent this month or to fill up their gas tank. Maybe you just came back from the grocery store. Says Jennifer Lee, senior economist at BMO Capital Markets. You're clouded from the view that you just paid a heck of a lot more in groceries than you did like a year ago. Or maybe you were just half listening to the evening news. When you see headlines about Fed Chair Powell saying this and that.
Consumers aren't exactly making scientific predictions, but that's not the point of asking them where they think prices are headed. Mark Zandi, chief economist at Moody's Analytics, says our expectations can be self-fulfilling. When people think that inflation is going to be high in the future, then they're going to go to their employer and say, hey, you've got to pay me more. Step one in the dreaded wage price spiral.
And when we expect inflation to cool, we hold off on spending. Because you think, oh, gee, I'm going to be able to buy that thing for a lower price in the future, so I'm just going to wait. Weakening demand and keeping prices low. Today's report from the New York Fed falls somewhere... Between boring and a little tiny bit cautionary, I'd say. Christine McDaniel is a research fellow at the Mercatus Center.
She sees some angst in consumers' short-term forecast. We expect inflation will still be hovering around 3% a year from now. But our three-year outlook dropped to a historic low of 2.3%. We're still in this slow, soft landing. Definitely not comfortable enough to take our seatbelts off. McDaniel says there's good news in here for the Fed. Consumers trust it'll tame inflation eventually.
I'm Savannah Marr for Marketplace. Wall Street on this Monday after a week that gave a lot of people agita. It was calm. We'll have the details when we do the numbers. Okay, about all that agita last week in the markets. First of all, people, stocks go down too. I know I've been away, but we've been over that a lot.
Also, though, bonds. They had quite a moment themselves last week. People looking for safety as stocks wobbled. Bonds can help balance investment portfolios, and it is actually quite the balancing act because when stocks go up, bond prices typically go down and vice versa. Remember, though, I said typically because that inverse relationship is not always a given, as Marketplace's Elizabeth Troval reports.
When we think about the relationship between stock and bond prices and why to invest in both, Paolo Pascariello with the University of Michigan says it comes down to this. Don't put all your eggs in one basket. If you put some of the eggs in stocks and some of the eggs in bonds, when one of the baskets is breaking, the other one is not. The inverse relationship between the two makes bonds a good way to hedge investments in stocks. Here's Paolo Pascariello.
Here's the catch. So it turns out that this relationship is not stable. Like when the Fed hiked interest rates in 2022 to quell inflation, says Mark Cabana with Bank of America Securities. The inverse price relationship between equities and bonds no longer worked.
You had a period where bonds lost a lot of their value in multi-asset portfolios simply because they were not a very good hedge due to elevated inflation. Now that inflation has come down and interest rates are expected to ease, that bond stock hedging relationship has shown signs it's back.
Case in point, last week when stock prices fell. Fixed income performed that risk-off hedge function quite admirably. As equities declined in value sharply, fixed income values rose significantly.
pretty quickly. A period of lowering interest rates will increase bond prices, says Luis Alvarado with Wells Fargo Investment Institute. This is going to be very beneficial for bonds because the Fed is pivoting away from that hiking cycle. So the eggs in the different baskets are less likely to fall at the same time. I'm Elizabeth Troval for Marketplace.
It's been a not-so-great handful of years in a lot of the Chinatowns across this economy. These neighborhoods and their businesses have gotten fewer federal loans, they've faced more hate crimes, and they've lost more jobs than others did during the pandemic. And now there's a different problem, too, succession planning. The number of seniors in Manhattan's Chinese neighborhoods, for instance, increased more than 20% between 2010 and 2020. That's according to the business nonprofit Welcome to Chinatown.com.
And a lot of those seniors haven't figured out what's going to happen to their bakeries and their restaurants and their shops in this mostly working class neighborhood after they're gone. Marketplace's Kristen Schwab looks at the economic and cultural forces at play.
Grand Tea and Imports is a tiny hallway of a shop in Manhattan's Chinatown, but its shelves hold a lot. Buddhist statues, paper lanterns, and, of course, tea, all imported from China. The aisles are a little cramped and the shelves are a little bit chaotic. A lot of the architecting is chaotic.
from my dad, and he just has kind of perfected the art of Tetris. Karen Liu's parents, who are Chinese immigrants, opened the store back in 2007. Today, they're in their 60s. Liu is 30, her sister is 29, and the two sisters plan to eventually take over the business. Succession planning, like, hmm.
We're really figuring it out as we go. Liu grew up in Chinatown and has always helped out at her parents' businesses. Back when they owned a restaurant, she remembers filling soy sauce bottles as a five-year-old. But that dynamic changed when she went to college for international politics and economics. The idea of helping out a family business in a retail shop in Chinatown was not
wasn't the first thing in the picture for post-college plans. After college, Liu worked in finance. She still does. But lately, she's been spending more time at Grand Tea and Imports. It became an exploration into what it means to be Chinese and what are the traditions that
are important to preserve. And so, yeah, I wanted to be closer to this place and to be closer to my parents again. Manhattan's Chinatown is on the verge of a major shift.
More Asians are moving out of the neighborhood, and the ones who remain are getting older. According to the city, about a quarter of Chinatown's population is over 65. Vic Lee is CEO of the nonprofit Welcome to Chinatown. From now into like the next five years, we're going to see like a wave of business owners retire.
Li says many of the business owners have not done any succession planning. And as they age, the greater real estate industry is waiting to capitalize on the neighborhood. It means business by business, Chinatown could disappear. To deny change is silly. But she says businesses have to think about how they can keep growing as Chinatown transforms.
You may have to perhaps start to think about how do we cater, how do we market to a different demographic, but not wanting to also lose your existing demographic. Businesses have been reluctant, for instance, to use newer technology. Many operate in cash, and some owners are hesitant to implement point-of-sale systems and platforms like DoorDash.
Then there are cultural barriers. Margaret Chin, a sociology professor at Hunter College, says for most Chinese people, death is a taboo topic. You don't want to talk about it because it brings bad luck.
So you don't talk about planning for death and succession. There's also the ethos of the American dream. Start a business, support your kids, put them through college. And Chin says sometimes in pursuit of those goals, a bit of cultural preservation is lost. Historically, being American meant to kind of assimilate into this nebulous thing of what being American is.
Most kids never learned about their history, never learned how important it was to keep their heritage alive. And that's part of what's drawn Karen Liu back to her parents' shop. She says she still has a lot to learn and that the transfer of knowledge happens slowly, sale by sale. I see that play out when a woman who appears to not be Chinese comes in looking for a wedding gift. Liu walks her over to a display of red envelopes.
And this is for marriage and engagement. Okay. Yeah, and you can put money in there, yeah. Lou senses the customer's dissatisfaction and, in Cantonese, asks her dad what other trinkets symbolize unity or love. The woman eventually walks out without buying anything. Later, Lou tells me keeping this shop running is a team effort. Like, my dad...
And my mom is a bridge to Chinese culture and traditions and heritage. And my sister and I are the bridge to, like, translating that to the community and to people outside of it. Someday, Mr. and Mrs. Liu will have to hand everything over to their daughters. But for now, they all need each other to succeed. In Manhattan's Chinatown, I'm Kristen Schwab for Marketplace. ♪
You know, Chinatowns aren't the only places where family-owned businesses are passed down through generations. Here is a new installment of our series, My Analog Life. My name is Stacey Schultz, and I live in Seattle, Washington. I grew up in a small town that is known as Richmond, Texas. My grandfather started a business there that was radio repairs. ♪
The business grew as people in the area had more access to electricity, more appliances, so that by the time I came along, it was now appliance sales and repairs, primarily large appliances. But at that point in time, you could still actually repair small appliances like coffee makers.
My memory always from early on is that they had these massive books that they called the account books. I think more appropriately, they're called ledgers books.
When someone came in and said that they needed to pay on their account, you'd get the right one for their last name and you'd flip to the pages, you know, flip, flip, flip, and you would write down the amount in the appropriate column and the transaction was done. ♪
Part of the reason I really remember these is because in late January of 1983, the three-story building that housed the business caught fire in the early morning. Later determination was that it was an electrical fire that was started by a squirrel who had been chewing on the wrong cord.
As far as we know, the only lives lost was that squirrel. So all things good from that standpoint. But one of the things that had to happen in rebuilding the business was going through all those old account books that had been singed, damaged, waterlogged, trying to figure out what was owed, by whom, and how it was used.
knowing that there was going to be some information that was just completely lost. A lot of people started coming in once they found out where the business was running again. And they said, howdy, Mr. Schultz. I came in because I know how much I owe you. I can't pay it right now, but I do want you to know I know how much I owe you.
For my dad, the business was a big social community. He loved going out on service calls. He loved talking to people. It truly was a calling. So the business continued until my father's death in 2015. That's probably what I still take away the most. I feel like keeping something alive
operational is like almost in my DNA. Stacey Schultz up in Seattle, Washington. You know, you can tell us how your family's business has changed. Marketplace.org slash my analog life is where you do that. Coming up. You don't meet people on an airplane. Unless you're really trying, right? First though, let's do the numbers.
So, Industrials off 140 today. That's about four-tenths percent. 39,357. The NASDAQ added 35 points, two-tenths percent. 16,780. S&P 500 unchanged. 5344 for the S&P 500. Boo! Boo!
Bus Feed, the digital news company. Once known for its edgy brand of online news, it's set to report earnings today after the close. Stock dropped 3% during the session. Other media news companies, the New York Times, dipped a quarter percent. Come on, I've been away for two weeks. Warner Brothers Discovery, which owns CNN, dropped 4.5%. Gannett, world's biggest newspaper, published it by Daily Circulation, declined 2.1% today. Bonds real quick before we go. Bonds up, yield on the 10-year T-note, down to 3.90%. You're listening to Marketplace.
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Ever wonder how artificial intelligence or 3D printing is used to solve medical problems? Or how research is discovering new ways to slow or even stop medical conditions we used to think of as untreatable? I'm Kathy Worzer. Listen to Tomorrow's Cure, a podcast where I interview experts from Mayo Clinic and other renowned organizations. What they describe may sound futuristic, but listen and you'll find out Tomorrow's Cure is already here. Find it now wherever you get your podcasts.
This is Marketplace. I'm Kai Risdahl. Hey, when was the last time you were on a not completely full airplane? Take your time. I'll wait. Because daily screenings at TSA this summer have been hitting records right and left. At the same time, though, hotels and short-term rental occupancy rates in parts of this country are down. That data comes from AirDNA, which is a company that analyzes vacation rental data.
But look, where exactly are all those people on all those planes jetting off to then? Marketplace's Daniel Ackerman is on the travel economy beat for us today. For luxury travel, this has been a banner year. Business is great. We're just about to surpass our total sales for last year. Sarah Fassenden is with Vidari Travel, which makes custom itineraries.
She says her clients are opting for far-flung destinations. This year was all about Japan and Southeast Asia. And on the global currency markets, this year was all about a strong U.S. dollar, which is prompting Americans to go abroad, says Joseph James, co-owner of Tilly James Travel. When you go to that exchange office to exchange the U.S. dollar for currency abroad, people are finding out that that money goes a lot further.
Still, fancy long-haul travel isn't for everyone, says Jan Freitag, director of hospitality analytics at CoStar.
So the headline for summer travel for us is this term bifurcation. Meaning there's healthy demand for that splurge trip to Asia, but at the same time? We've definitely seen some cracks for the lower end, for what we call economy class hotels. Freitag says lower income travelers are making different choices this year. Saying, well, my car insurance is up, my rent is up, my food cost is up. So that short-term rental might have to wait till next year.
But one mode of cheap travel that has kept up strong demand? Canoe camping. Dan Shirley owns Sawbill Canoe Outfitters at Minnesota's Boundary Water Wilderness. Two birds and canoe rents for, you know, $44 per day. And Shirley says most of his clients come from within driving range, so no airfare. And there's nowhere to spend your money while you're on the trip, right? You can't access the internet and there are no stores. So nowhere to impulse buy that Sylvainer shot glass you'll never use.
I'm Daniel Ackerman for Marketplace. All right, a little more travel now. For all the reporting that we and others have been doing on the Biden administration's infrastructure investments, the bipartisan infrastructure law specifically, there has been relatively little ink and airtime spent on passenger rail. And yet, says the White House, it is making the biggest investment in passenger rail this country has seen since Amtrak was created back in 1970.
Now, not all infrastructure investment is dispensed equally. $16.4 billion goes to the Northeast corridor that's between Boston and Washington, D.C. $8.2 billion for all of the rest of the country. That discrepancy does kind of stand to reason, given that passengers take more than half a million rides every weekday in that Northeast corridor versus a bit more than 60,000 trips a day on Amtrak nationwide.
And honestly, that's kind of OK, because as Marketplace's Kelly Wells found out on a recent Amtrak jaunt from Los Angeles to Portland, plenty of people really love the trains that sometimes just have to crawl along the rails far, far away from that northeast corner. On this trip, one of the biggest differences I discovered between airlines and Amtrak, on the train, everyone's really chatty.
Met nice people. You don't meet people on an airplane. I found Lois Kalinsky two hours into the trip on her way to Seattle to see an old college friend. She's here because her vertigo precludes air travel. 2019 was the last time I flew.
and she's been a steady Amtrak passenger ever since. I met a pair of sisters who said the train offers the cheapest ticket to see their uncle in Eugene. I had lunch with a grandma from Spokane who likes that Amtrak claims the train has a much lower carbon footprint. I met Nathan Udall on his way to a family reunion in Oakland. He was taking photos in the observation car. When you think about what you do while you go on vacations, it's like this is kind of it. You want to see as much as possible.
in as much comfort as possible. And I feel like that's why trains are my favorite form of transportation. What they all had in common was plenty of time to spare. Because, yeah, my train to Portland took more than a day, and the flight back took two and a half hours. Plus, Amtrak isn't exactly known for being on time. Today I looked at the trip and I said, there's something wrong with Amtrak. Ed Leska lives outside of Santa Barbara and was shocked to see this train on schedule.
He's worked on this route since the 90s as a volunteer with the National Park Service, who tells passengers about points of interest along the way. I have a train on time, going to get to St. Louis on time. The 11th is going to come on time, I'm going to go to home on time. You see that and you say, no way.
Amtrak wouldn't comment for this story and referred me to its website, which says on this route, whose performance is pretty average, 58% of passengers arrive on time. It's a reality that set in hard when we woke up on day two to learn we fell an hour behind schedule overnight. And frequently, it's not Amtrak's fault. Passenger Lois Kalinsky gets it. They share the track with the freight lines. They rent or...
the use of the rails, but it's owned by the freight companies. And so they yield the tracks.
meaning sometimes we had to pull over. Plus, many of those host railroads impose a speed limit of 79. Electrified railroads are faster and pollute less. One of the very few is the Northeast Corridor route that Amtrak mostly does own from Boston to New York and D.C. The owners of the other 97 percent of rail lines don't have any incentive to invest in electrification.
Amtrak's leisurely pace is one reason why in its 53-year history, it has never turned a profit. I don't find that to be necessarily a very useful metric for understanding any kind of transportation network.
Sean Jeans-Gale, a Portlander who lives along this route, is vice president of policy at a nonprofit called the Rail Passengers Association. He says highways aren't profitable. Neither are airports or the Postal Service or most public transit systems. It's a utility. It's not something that you look at as a profit center in our society. It's something that
allows people to go on about their business and be productive members of society. Plus, as my conductor told me, there are lots of small towns along the train routes where Amtrak is the only game in town. Jeans Gale says preserving those routes is a matter of equity. When you disinvest in...
passenger rail, you will just leave a lot of smaller communities in the dust. Train and station upgrades are on the way, thanks to more than $20 billion from the bipartisan infrastructure law. The hope is Amtrak could get back up to pre-pandemic ridership levels, the closest the company has ever come to breaking even. Along the California and Oregon coast, I'm Kaylee Wells for Marketplace. Music
This final note on the way out today, it's been a while, I think, since we touched on oil prices. Brent North Sea today up about 3 percent, near $82. That is, though, the low end, it should be said, of where it's been trading the past six months. Told you that so I could tell you this. In its most recent monthly report, OPEC blamed weakness in the Chinese economy for a slight decrease in global demand. Slight decrease.
He's doing a whole lot of work there. The global oil market is really pretty finely balanced. We produce and use just about 100 million barrels of oil every single day. Our daily production team includes Andy Corbin, Elise Hassan, Maria Hollenhorst, Sarah Leeson, Sean McHenry, and Sophia Terenzio. I'm Kyle Rizdal. We will see you tomorrow, everybody. This is APM.