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On the show today, more inflation relief on the horizon, the hidden cost of electric vehicles, and the improbable comeback of the cassette tape. From American Public Media, this is Marketplace. In Baltimore, I'm Amy Scott, in for Kai Risdahl. It's Thursday, June 13th. Good to have you with us.
Today, Chapter 2 of This Week in Inflation. After the Consumer Price Index came in unexpectedly low yesterday, up 3.3% year-over-year in May, today we learned that the Producer Price Index, or PPI, rose 2.2%. That was also less than expected.
Producer prices actually fell slightly month to month. Now, in between those two events, the release of the CPI and PPI, the Federal Open Market Committee finished its June meeting, announced its holding steady on interest rates, and held a press conference, as we reported yesterday, which still sounded pretty hawkish. So does this latest news change anything? Marketplace's Mitchell Hartman reports.
First, some PPI 101. The Producer Price Index for Final Demand, as today's report has officially called, measures the prices producers receive for the goods and services they sell, from appliances to insurance and health care.
Now, PPI feeds into the Fed's preferred measure of inflation, the Personal Consumption Expenditures Price Index, out later this month, says Paul Ashworth at Capital Economics. Yesterday we learned that CPI was pretty weak. Today we learned that PPI was pretty weak too. You put those together and it suggests the PCE measure is also pretty weak.
Still, the Fed's stance on inflation and interest rate cuts just got more hawkish, says Scott Wren at the Wells Fargo Investment Institute. Inflation is slowly moving lower. It's still far too high for the Fed. They need more convincing. That inflation really, truly is heading towards the Fed's long-term target of 2%.
Meanwhile, there's still a lot of inflation pain in the economy right now. Definitely, our clients are seeing a very strong effect from inflation, market increase in claims.
Dan North is senior economist at credit insurer Allianz Trade, which pays out to suppliers when their customers pay late or don't pay a bill, say for merchandise shipped to a store that the store can't sell. You know, consumers change their buying habits. They move from steak to chicken, from the upper shelf down to the lower shelf. And those consumers are seriously bummed out.
Scott Wren points out prices have outpaced wages over the past four years. And even though inflation is coming down, prices are still going up. They're just going up at a slower pace. But what consumers, I mean, they want deflation. They want to see prices where they were in 2019.
And Wren says that is just not going to happen. I'm Mitchell Hartman for Marketplace. Stable prices are one part of the Fed's dual mandate. The other, maximum employment. And there's news on that front today, too. First-time claims for unemployment benefits jumped last week to a 10-month high of just over 240,000.
And though one week of data is just that, one week, it's another sign of what Fed Chair Jerome Powell has called a gradually rebalancing labor market. One where the unemployment rate is still low, but there are more workers available to fill open jobs. Here he is at yesterday's press conference.
We watch the labor market, of course, and the economy as a whole, but the labor market very carefully. And that's what we see. We see gradual cooling, gradual moving toward better balance. We're monitoring it carefully for signs of something more than that, but we really don't see that. Marketplace's Elizabeth Troval has more now on what a better balance could look like.
It's been a year of transformation for the jobs market. Just 12 months ago, Luke Bardew with the Aspen Institute's Economic Strategy Group says it was stubbornly tight. Employers were really hesitant to let go of workers and workers were confident that they could leave their job and find another one. Now? Jobless claims are at a 10-month high. Unemployment rate right now is the highest since 2022 and job openings are near their three-year lows.
But in this upside-down world of today's economy, an increase in unemployment is also kind of good news. It's sort of sacrificing a little bit of that short-term gain for much more sustainable growth over the long term. A cooling, more balanced job market with lower inflation means interest rates might finally go down, says Tuan Nguyen, an economist with consulting firm RSM. So far, we have had two months of good inflation data.
And if that continues, we think the Fed will most likely cut in September. Great for the stock market. But what about people already struggling to find work? Michelle Evermore with the Century Foundation says she's especially worried about young workers and recent grads. Somebody without work history is maybe a little bit of a gamble. Employers may not be taking risks on new grads.
Employers are being more selective about hiring these days, says Megan Slabinski with staffing firm Robert Half. They're willing to wait it out to find the right talent. Anything around AI, machine learning, large learning, language models, data analytics is in high demand and there's a scarcity of talent available. Even in a cooling labor market, workers with certain special skills are still hot.
I'm Elizabeth Troval for Marketplace. On Wall Street today, not too hot, not too cool. We'll have the details when we do the numbers.
We've talked a lot about layoffs in big tech on this program over the past year or so. But it's not just layoffs. Companies are also posting fewer tech-related jobs. And that's disheartening for cities that have been vying to become technology hubs, like St. Louis. Here's Eric Schmidt from St. Louis Public Radio.
There are a number of big companies with offices or operations in St. Louis, like Boeing or MasterCard. But Emily Hemingway, who runs the nonprofit TechSTL, says to become a true tech hub, the city must look beyond those corporations.
When you have significantly fewer jobs, you can't be dependent on our large anchor institutions or corporate partners to really drive the workforce. Hemingway says St. Louis needs to double down on supporting entrepreneurs and startups. If we can't find these great folks a good way to make money in St. Louis, they will either change their industry or they will change their town.
After all, tech employment is expected to grow faster than other sectors over the next decade, and St. Louis wants a piece of it. On this evening, a handful of startup founders mingle at a weekly forum. Local entrepreneurs connect and talk through hurdles to establishing their business. Ricardo Martinez talks about launching a website called Juntos Adelante to connect Spanish speakers with real estate or insurance agents who also speak Spanish.
And we were trying to roll it out nationally. And then we got inquiries, leads, questions from California, Texas. Martinez says he had to scale back because of the complicated regulatory environment state by state. And he struggled to secure funders in St. Louis for the project.
It's just heartbreaking because you know that it has the power to change a lot of people's lives. Martinez still maintains Juntos Adelante, but is also working on other ventures. He says it may not always be easy to launch a tech company in St. Louis, but he plans to stay. Being able to have a family and being able to support your family, that's what the Midwest really embraces. And
And that's the thing about being an entrepreneur here in the middle of the country versus places like Silicon Valley, where the cost of living is much higher. This is a very low cost and cheaper way to be able to start your idea. Christian Johnson runs his own geospatial startup and has been a leader in the local founder scene for nearly a decade. Still, he says the local ecosystem often lacks support and programming that goes beyond promoting a shiny idea.
It becomes a fashion show, basically, instead of it being about people creating great businesses that serve our community, that bring jobs into our community and make our community better.
He says getting entrepreneurs to the point where they can engage customers or clients and begin to monetize their idea is key. And that's one of the reasons St. Louis still has a long way to go if it wants to grow into an innovation community like Seattle or Austin. A lot of that has been organic. You know, I don't know how much of that can be planned for. Seth Robinson is vice president of industry research at CompTIA, a tech trade organization.
He says supporting entrepreneurship is one of the right moves, especially when new startups tap into niche industries that are already active in a region. In St. Louis, that's geospatial intelligence and agriculture, among others.
Those types of startups can thrive and flourish when you've got some momentum already and then you're choosing to try to amplify and accelerate it. But he also says that it's important that young tech hubs look beyond startups or specific industries because the growth in AI and demand for cybersecurity experts means all kinds of businesses will need more tech workers going forward. In St. Louis, I'm Eric Schmidt for Marketplace.
As we move to electrify transportation in this country, there's an ongoing conversation about the equity of that transition and the hidden costs. Black labor and environmental activists in the U.S. have been trying to raise awareness about working conditions in the Democratic Republic of the Congo, a producer of a key component in EV batteries. Adam Mahoney reported on it for Capital B. Thanks for joining us. Thanks for having me.
Let's start with what's happening in the DRC and the role that it plays in this energy transition. Talk about the situation there. I mean, in many ways, the DRC is the world's richest country when we're thinking about natural resources. And one of those biggest resources is cobalt rocks, which are found deep underground and are needed to
No power, pretty much any battery that we're using on a daily basis, whether it be from our laptop or our phones. And now electric vehicles. Over the last 20 years or so, there's been an explosion in workers digging and working in these tunnels and mines. So that has been driving that push. And can you talk about the conditions in these mines? Sure.
In many ways, the working conditions in these mines are unregulated, and it's driving hundreds of thousands of Congolese people into these very dangerous tunnels where thousands of people are dying every year as they're collapsing and working under horrendous conditions. One of the most horrific aspects of it is the fact that, you know, of the estimated 250,000 Congolese miners, roughly 40,000 are children. Wow.
And you write about some of the organizers here in the United States that are trying to bring attention to this because, of course, many of us are using this cobalt in our devices, our electric cars. We are the customers. So who are these organizers and how is that effort going? Yeah, there's been a big uptick in the movement to build transnational solidarity between Black
Black workers in the clean energy space in the United States with those miners and the DRC. Under the Biden administration, there's obviously been a very concerted effort, billions of dollars being invested into building out the infrastructure to produce electric vehicles. And we've seen that roughly 7 to 10 percent of workers within the clean energy space are Black, which is well below the U.S. average of the Black population.
Black workers, Black unions are making this connection that in the United States, they're still getting crumbs while at the same time across the globe, Black workers are being exploited for this push. You write in your story about a court case before the U.S. Court of Appeals in D.C. which ruled that the five largest U.S. tech companies, including Alphabet, Microsoft, and Tesla, could not be held liable for work conditions in the Congo anymore.
What other pressures are available for people trying to stop this? There has been some effort to force these tech companies to look elsewhere in terms of where they're extracting these resources. There's been a push, actually, for companies to work
In Canada, which is the only country in North America that has all five of the natural resources needed for electric vehicle batteries readily available, and obviously are working under higher worker laws, labor laws. There's actually been work on the ground from some of these Black transit activists who
calling on the U.S. and U.S. companies to actually rethink the way that they're funding this electric vehicle push and pushing or swaying away from the use of individual cars towards funding EV buses or other forms of mass transit, which would then require less overall use of cobalt and these different minerals.
One of the themes of your story is that Black workers need to have a seat at the table when it comes to the clean energy transition, which is obviously we need that transition. We also would like it to be equitable and just. What happens when Black workers are at the table? Talking to transit and labor activists for this story,
They were pretty honest about the fact that if it is only one or two Black people or people of color in these spaces, these critical conversations are not happening. But when a room is majority Black or majority Brown, the work tends to look more action-oriented. And that even will dictate...
the way that the EV push is received by Black communities in the country, right? If you don't see people that look like you at the table making these decisions, you're going to be less likely to join in or accept it as something that is, you know, accessible for you. And it might point to why currently only about 2% of EV owners are Black is because they're just not represented in that space. Yeah.
Adam Mahoney is a climate and environment reporter for Capital B. Thank you for sharing your reporting. Appreciate it. Thanks for having me.
Coming up... I like tapes because you can buy music and it's not a $60 record. Ah, but there's a reason tape is cheap. But first, let's do the numbers. The Dow Jones Industrial Average fell 65 points, 0.2% to finish at 38,647. The NASDAQ ticked up 59 points, 0.1% to close at 17,667.
And the S&P 500 advanced 12 points, two-tenths percent, to end at 54.33. We just heard about black workers in the clean energy industry. Let's check in on some related stocks. NextEra Energy, which generates power through both renewable and fossil fuel sources, rose one and three-tenths percent. First Solar, which manufactures solar panels, contracted three percent. Brookfield Renewable, one of the world's largest producers of hydroelectric power, put back one-tenth percent.
Bonds rose. The yield on the 10-year T-note fell to 4.24%. You're listening to Marketplace. This podcast is supported by Fundrise. Buy low, sell high. It's a simple concept, but not necessarily an easy concept. Right now, high interest rates have crushed the real estate market. Prices are falling and properties are available at a discount, which means Fundrise believes now is the time to expand the Fundrise flagship fund's billion-dollar real estate portfolio.
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This is Marketplace. I'm Amy Scott. South Florida has had a wet start to hurricane season. A tropical disturbance has dumped as much as two feet of rain in some areas in the past few days, with more rain in the forecast. Experts have been warning this storm season could be more active than usual. Hurricanes are by far the costliest natural disasters that affect the U.S.,
But as Marketplace's Daniel Ackerman reports, better forecasts in recent years have saved lives and money.
Soon after Renato Molina moved from California to Florida, he experienced his first hurricane warning. I took it seriously, right? So I go to the supermarket, I get a bunch of non-perishable foods, I get batteries, I get water, I get a bottle of wine. Molina is an economist at the University of Miami, and he says when forecasters warn of a major storm, people generally respond. By stocking up on wine, sure, but also by protecting their most valuable assets.
But Molina's first hurricane warning turned out to be a false alarm. And those can lull people into a false sense of security when forecasters issue the next warning, says Tatiana Terugina, an environmental economist at the University of Illinois. Hurricane storm paths can be so uncertain, you're not going to try to protect hundreds and hundreds of miles of land.
the coast. And so knowing exactly where it's going to hit is very valuable. Scientists have been getting better and better at that. 30 years ago, they could predict the point of landfall three days out to within about 250 miles. Now? The average area has been cut really by more than half.
Daniel Brown is a forecaster with the National Hurricane Center. He says more powerful computing is one reason for the better accuracy. And that accuracy is saving money, according to a study published this week by Renato Molina from the University of Miami.
In total, about $5 billion in avoided damage over the past 20 years. The improvement of the forecast, we estimate has saved about $700,000 per county per hurricane just due to having better information. Molina says the next big challenge is better predicting not just where hurricanes will hit, but how quickly they'll intensify as the ocean continues warming. I'm Daniel Ackerman for Marketplace.
I went to a show recently, stopped by the merch table, and noticed that the opening band was selling their music on cassettes. Remember those? Yep, a bit like the vinyl revival of the past decade, the lowly cassette tape is making a comeback. And some of it comes down to sheer economics. Elle Cowley has this story from Salt Lake City. Joe Malloy has been a fan of cassette tapes for almost 10 years. It all started in 2015.
I bought a Jeep from my uncle. The CD player didn't work. And it had a tape deck. And I was like, okay, well, I guess I got to start buying tapes. And since then, Malloy has kept buying tapes. He also runs Salt Vault Records, a Salt Lake City tape label.
He says cassette tapes are creative in a different way than CDs or vinyl. It's really kitschy. Kitschy, and right now, trendy. There are subreddits with tens of thousands of members dedicated to cassette culture. Tape fans show off their extensive collections on TikTok and Instagram. Put a cassette in a boombox with me. This is the extremely rare Hitachi D-W99 cassette deck. I like accidentally have a mini cassette collection.
And as it turns out, putting an album on cassette is good business. Cassette buyers spend 227% more money on music than your average listener, according to entertainment data insight company Luminate. And if bands don't have the equipment to make cassettes themselves, there are tape enthusiasts happy to help out. Like Nick Anderson of Far Out Cassette Club in Salt Lake City. He started out by making recordings of his own music on tape.
And when I looked into having someone else do it, it's like costs a lot of money. And so I was like, oh, but you can just do it yourself at home. He now produces his own albums and works with Joe Malloy to create limited run, small batches of tapes for local artists. In Anderson's basement, the two show me their duplication station. It's in a small room filled with piles of tapes, a keyboard, drum set, and various other instruments. He pops a few tapes into the duplicator.
I just hit record on all of them as fast as I can. And the music is recorded from his computer. Then comes the fun part, decorating the J card, which acts as an album cover for the tape. It's that little piece of paper that sits in the case along with the cassette.
For a previous coffee-themed release, Anderson created a unique cover for each tape by dripping actual coffee on the J-card. I just would, like, spill it down the sides of the cup, and I just set it on top of each J-card individually. I was hoping they'd each smell like coffee, but that didn't really work. It's all very DIY, so the startup cost is relatively low. Anderson even records over tapes he finds at thrift stores. In Salt Lake City, old audio recordings of the Book of Mormon text are a common find.
John Philpott, a local musician who performs under the name Fezmaster, started producing his music on cassette around three years ago. People have records, like people are obviously collecting a lot of vinyl these days, but putting out vinyl is very difficult, very costly. Vinyl often requires a minimum order of 100 to 500 records.
Even a small vinyl order can end up costing a band around $1,000 minimum, while a new pack of five 90-minute tapes goes for around $13 on Amazon. And you can pick up a cheap duplicator for about $65. And the barrier to entry for making your tapes is really low. It's very attractive in that respect. Plus, Joe Malloy, the tape label owner, says that the low cost translates to a low sale price.
I like tapes because you can buy music and it's not a $60 record, you know, you can buy an album for $5 to $10. And that's a good thing for artists and music fans alike. In Salt Lake City, I'm Elle Cowley for Marketplace. ♪
This final note on the way out today. So how are you feeling about your job? New research from Gallup found that last year, just 23% of employees were engaged at work, the same rate as the year before.
That's not great for mental health or the economy, it turns out. The report estimates low employee engagement costs nearly $9 trillion globally, or 9% of GDP. Gallup defines engagement as the involvement or enthusiasm of employees in their work and workplace. And a note to the bosses, engaged managers are more likely to have engaged employees.
Speaking of bosses, John Buckley, John Gordon, Noya Karr, Diantha Parker, Amanda Peacher, and Stephanie Seek are the Marketplace editing staff. Amir Babawi is the managing editor. And I'm Amy Scott. We will see you tomorrow. This is APN.