0:02

It wasn't so much good news, bad

0:04

news in this morning's jobs report. It

0:06

was more good news. Huh,

0:09

that's interesting. From

0:12

American Public Media, this

0:14

is Market Class. In

0:24

Los Angeles, I'm Kyle Rizdahl. It is

0:26

Friday. Today, this one is the 7th

0:28

of June. As always, to have you

0:30

along, everybody. We begin today where

0:33

we pretty much begin every first Friday of

0:35

the month with the jobs report. 272,000

0:39

new jobs in this economy, as you have

0:41

surely heard by now, way beating everybody's best

0:43

guesses. That is, obviously,

0:45

the good news. The unemployment rate, and

0:48

this is the, huh, that's interesting

0:50

news, moved up to 4%. Here

0:53

to share their insights on that and much

0:55

else that happened in this economic week are

0:57

Anna Swanson. She's at the New York

0:59

Times, Nila Richardson. She is at ADP. Hey, you two. Hey,

1:03

Kyle. Hi, Kyle. So, Anna

1:05

Swanson, let me start with you. Gut

1:08

check, what do you think of this jobs report? It

1:11

was a confusing one. I mean, there

1:13

was a big contradiction between the two

1:15

data sources that underlie the report, and

1:17

they told different stories about a pretty

1:20

basic question where there are more people

1:22

working last month or fewer. The

1:25

business survey gave a picture of a

1:27

really strong economy. There were big job

1:29

gains, wage growth picking up, but

1:32

then the other portion of it gave

1:34

a much weaker picture with the unemployment

1:37

rate taking up. So

1:39

I think it mostly highlights that one month

1:41

of data does not make a trend, but

1:44

the end result is a pretty mixed inconclusive

1:46

picture about the exact hold that interest

1:49

rates are having on the economy right

1:51

now. Nila, first of all, do you

1:53

agree? Is it an inconclusive? Yes. It

1:56

was a tale of two surveys instead of a

1:59

tale of two cities. It was

2:01

the best of times in the

2:03

establishment survey, the businesses again, healthcare,

2:06

and even the government adding jobs.

2:08

And it was pretty worrying

2:11

on the household side, these

2:13

60,000 people that are reached

2:15

out to every month, they said that about 408,000

2:17

was the estimate left

2:21

the labor force. So that's not just

2:23

a tick up in unemployment, which is

2:25

it is still very low, but that

2:27

number of people who fell out of

2:30

the labor market is actually fairly concerning.

2:32

So you juxtapose these two and you

2:34

get this abstract painting of

2:37

a little pattern, very

2:39

contrasting picture. Let

2:41

me ask you this though, Nila, and I stay with you

2:43

because you are the trained economist in the room. Is

2:46

this not the opposite of what the Fed wants

2:48

to see, right? The Fed wants fewer

2:50

jobs added and the unemployment rate to

2:53

stay low, and now they're

2:55

getting lots of jobs and the unemployment

2:57

rate goes up. I

3:00

think what the Fed really wants is

3:02

just inflation to come down. However you

3:04

get to that point, they'll take it.

3:06

What's mystifying, I think from the Fed's

3:08

seat is that the data points aren't

3:10

lining up in a direction that points

3:12

to a conclusive action, right? So you

3:14

take this data and you match it

3:16

with some other data, drop openings fell,

3:19

first quarter GDP was weaker than expected.

3:22

There's no consistent storyline here through the

3:24

data points. And so that puts them

3:26

back in this position of being data

3:28

dependent, but not knowing what data to

3:31

depend on. And that's a hard place to

3:33

be for them. And it's a hard place to be

3:35

for the rest of us. Let me ask you this

3:37

though, Ana, if

3:39

the Fed is going to be data dependent and the

3:41

data is confusing at best, they're

3:45

not gonna do anything, right? Yeah,

3:48

I mean, I think overall it just

3:50

reinforces this idea that the Fed just

3:52

needs to take more time to wait

3:54

and see what effect higher interest rates

3:57

are having. If the picture had been...

4:00

A lot of people had expected the picture to come

4:02

in a bit softer, and that

4:04

would have made their job straightforward,

4:06

more straightforward, and made the case

4:09

that maybe the economy would be ready for interest

4:11

rate cuts later this year. This

4:14

time, I think we're just gonna wait and see and

4:16

wait for more data. You know, it's interesting, Nila,

4:18

you have not said the word wages yet. Nice

4:20

wage gains, right? Yeah,

4:23

4.1%, that's very strong. And

4:26

from the worker point of view, that

4:29

means that average hourly earnings are

4:31

above inflation, and I think workers like that.

4:34

But from the Fed's point of view,

4:36

it means that wages are still running hotter

4:38

than they were before the pandemic. And you

4:40

know that ADP provides similar data on pay

4:43

based on paychecks, and we've seen that

4:45

in May, pay growth

4:48

was higher this month than it was

4:50

earlier in this year. So we're not

4:52

seeing that consistent downward pattern in

4:55

wage growth, and wages are the

4:57

bridge between the labor market and inflation. So

4:59

if it's still strong and robust, it means

5:01

the Fed still has to worry about it. Ana,

5:04

you're a reporter that covers the

5:08

global economy and trade. I wonder what,

5:10

if anything, you make just on

5:12

that idea of the Fed not yet taking

5:14

conclusive action. The European Central

5:16

Bank this week did in fact

5:18

take conclusive action. They lowered their rate a quarter

5:21

of a percentage point. Despite the differences in the economy,

5:23

what do you make of that? Yeah,

5:26

that was interesting. So in

5:28

Europe, inflation is a bit closer to the bank's

5:30

2% target than it is in

5:32

the US, but it's also a pretty bumpy

5:34

path there as well. So

5:37

that move did spark some conjecture about

5:39

whether they were jumping the gun and

5:41

they had to kind of reassure everyone

5:44

that they're also going to be data

5:46

dependent. They aren't just jumping into this

5:48

new cutting cycle. They're gonna wait and

5:50

see what happens. But

5:52

yeah, in the US, inflation has been

5:54

a little bit stickier and US officials

5:56

are just waiting a bit more

5:58

to have more confidence. that inflation

6:00

is moving downward compared

6:02

to where European officials are

6:05

at. Neil, go

6:07

ahead. If I could just add

6:09

on to that. I view ECB's

6:11

move as really a down payment

6:13

on rate cuts rather than a

6:15

full floated support of getting rates

6:17

back down to a lower level.

6:20

They actually saw a benchmark

6:22

policy rate that was at record highs.

6:25

And remember that these two big central

6:27

banks don't always follow each other in

6:29

lockstep. Before the pandemic, ECB's rates were

6:31

negative. The Fed would never go below

6:34

zero, or at least they've stated that

6:36

they wouldn't. So they don't always follow

6:38

each other. They're not always in lockstep.

6:41

And as Amanda points out, they're slightly

6:43

and meaningfully different economic conditions right now.

6:46

So Ana, as we look forward in the next, I don't

6:48

know, 90 days in this economy, global

6:50

or otherwise, what are you looking at? Well,

6:56

I mean, I think that, you

6:58

know, Nilo was right to talk

7:00

about wage growth. I mean,

7:02

I think that's, you know, something that we

7:04

definitely need to watch and continue to see

7:07

if that picks up. I

7:10

mean, you know, but there were a lot

7:12

of other interesting trends to watch this month

7:14

too. We

7:17

saw the unemployment rate picking up as well.

7:19

I mean, I guess, you know, what we'll

7:21

want to see is do we continue to

7:23

see the data have

7:25

a clearer trend now or, you know,

7:27

more of a this divergent kind of

7:30

messy picture? Yeah. Nilo, I

7:32

was going to ask you the same question, but I'm going to change my

7:34

mind because I get to do that. Yes.

7:39

Today aside, right, the addition

7:41

of 272,000 new jobs aside, it

7:44

does look like the economy is slowing gradually and maybe

7:46

not as quickly as the Fed wants it to to

7:48

get inflation now, but the economy is slowing. There

7:52

were pockets of weakness that we've been

7:54

noticing all year. I'll put one of

7:56

them as manufacturing in the good sector.

7:58

And this is... lined up with

8:01

not just hard data, but also sentiment

8:03

data that it's pointing towards contraction in

8:05

manufacturing hasn't found its footing in the

8:07

present economy. I think that's concerning. And

8:10

then if you look at some of

8:12

the tech layoffs, you look at white

8:14

collar jobs, there is some sense that

8:16

there's a little bit of slowdown in

8:19

layoffs there. And if you look at

8:21

segments of workers like young people, there's

8:23

a sense, and you actually saw it

8:25

in today's report, that for young people,

8:28

young workers, labor force participation rate

8:30

has tipped down. It's

8:32

a little bit harder to find a job now than

8:35

it was last year for the same age

8:37

cohort. So there are pockets of weakness. We're

8:40

not supposed to cheer those. Those are

8:42

weaknesses that we'd like to see improve,

8:44

and we'd like to see an overall

8:47

balance, not just the healthcare sector leading

8:49

the way, but more balance hiring throughout

8:51

the economy. Right. Neil Richardson

8:53

at ADP, Anna Swanson at the New York Times on

8:55

a Friday afternoon. Thanks, you two. Thanks,

8:58

guys. Thanks, guys. Wall Street today

9:01

subdued, I'd say. We'll have the details

9:03

when we do the numbers. There

9:06

are obviously a zillion

9:08

ways to slice and

9:10

dice the

9:30

monthly job report. We just did that for seven minutes.

9:32

The slice we're going to take right now is

9:35

leisure and hospitality. The Bureau of Labor

9:37

Statistics says we added 42,000 jobs there

9:41

last month, up about 2.10% from April. And

9:44

we are, of course, well into the leisure and

9:46

hospitality season with summer travel and nice weather and

9:48

people wanting to be out at restaurants and bars.

9:51

And that, and those rising wages, we were

9:53

also talking about a minute ago, that

9:56

translates into more jobs. Marketplaces, Kimberly

9:58

Adams has that one. Prices

10:00

in restaurants and entertainment venues may

10:03

be higher, but we Americans do

10:05

like to treat ourselves. Rich Harrell

10:07

directs the International Tourism Research Institute

10:09

at the University of South Carolina.

10:12

The travel and tourism industry, it's

10:14

all a sharp rebound after COVID.

10:16

Some of that's still leveling off,

10:18

but we're still seeing strong job

10:20

growth in the United States. And

10:23

so, says Sean Snathe, director of

10:25

the University of Central Florida's Institute

10:28

for Economic Forecasting. The owners of

10:30

the restaurants and the hotels and

10:32

these other leisure and hospitality-related industries

10:34

need to hire additional workers. And

10:37

while spending and hiring are up,

10:39

the leisure and hospitality industry looks

10:42

a little different than it did

10:44

in the past. Hudson, really, is

10:46

senior vice president of research at

10:48

the National Restaurant Association. He says

10:51

people are spending more on takeout

10:53

and delivery, but... For table

10:55

service, that segment now has

10:57

over 230,000 fewer positions than it did pre-pandemic.

11:03

So, overall, industry traffic patterns

11:05

are dramatically different as a

11:07

result of the pandemic also.

11:10

Also different, says really? Who is

11:12

working in restaurants, which are hiring

11:15

more than half a million seasonal

11:17

workers this summer? 16

11:19

to 19-year-olds are much more likely to

11:21

be employed in the industry than they

11:24

were pre-pandemic. And the same is also

11:26

true for the older cohorts, say age

11:28

60 and above. Those older

11:30

workers can be a big asset

11:33

in a sector that's constantly hiring.

11:35

Perhaps they're picking up a summer

11:37

job in the industry to supplement

11:39

their retirement income. In New

11:41

York, I'm Kimberly Adams from Marketplace. Maybe

11:55

you've got some time set aside tonight or over

11:57

the weekend to lounge on the couch and watch

11:59

TV. back

14:00

and maybe make some changes before releasing it

14:02

to everyone else. I'm Kaylee Wells for Marketplace.

14:10

You know what we release to you every

14:12

single day? Our podcast.

14:15

If you miss something on the air, that's where

14:17

you ought to go. marketplace.org or follow

14:19

us on the platform of your choice, of course. Coming

14:31

up. People

14:36

want their drugs without their drugs.

14:39

Coffee still just lights up your brain in a

14:41

way that nothing else does. Poetic,

14:43

don't you think? First though,

14:45

let's do the numbers. Dow

14:48

Industrials gave back 87 points today, 2.10% finished at

14:50

38,798. The

14:55

NASDAQ dropped 39 points, about a quarter percent, 17,133.

14:59

The S&P 500 down 5 points, a 10th percent, 53 and 46. For

15:04

the five days gone by, the Dow up three

15:06

tenths percent, the NASDAQ added 2.4% the

15:09

S&P 500, up one and

15:11

a third percent. Kelly Wells was telling us

15:13

about the great redesign at Netflix. The streaming

15:15

service dipped one and a 10th percent today.

15:17

Disney and Paramount edged up

15:19

about a third of one percent apiece. GameStop

15:21

tumbled more than 39% today after posting first

15:23

quarter sales have fell way short of

15:26

expectations. Live by the meme, die by

15:28

the meme, huh? You're listening

15:30

to Marketplace. that

24:00

you quoted, decaf market, decaf

24:02

coffee only, from $20 billion

24:04

a couple of years ago to almost $30 billion

24:08

by the end of the decade. That's kind of amazing. It

24:10

is. I mean, it's enough to get your heart rate up

24:12

a little bit, which is great if the coffee

24:15

isn't going to do it. That's right. Which

24:19

of course means companies are in on this thing. Blue

24:21

Bottle is one. There's a bunch of others. Yeah,

24:23

no. And it's not just the

24:25

big ones. I mean, companies like Blue Bottle

24:27

always have strong contingent of people who, for

24:30

whatever reason, if they're pregnant or

24:34

just anxiety issues are just coming

24:36

in in the afternoon wanting to

24:38

have a decaf. But it also

24:40

means that smaller roasters, smaller growers,

24:43

you're really seeing it across the

24:45

board. I spoke to Adam

24:47

Peranto, who has a company

24:49

in Chicago called Reprise Coffee

24:51

Roasters, and they've gone

24:54

even a little bit farther and are

24:56

not just offering decaf, but a wider

24:58

range of caffeinated levels. They've

25:00

got the zero, which is 99.99 percent

25:02

caffeine free, but they also offer a

25:08

micro dose that's only 10 percent caffeine

25:10

and a light buzz that's 25 percent.

25:14

I suppose this shouldn't be surprising, this

25:16

rise of decaf, in an era where

25:19

non-alcoholic cocktails are a thing

25:22

and non-meat meat products are

25:24

a thing, right? I mean, people are, you know, they've

25:26

got this on the mind. Absolutely. I

25:28

mean, and that was what Adam from

25:30

Reprise said. He said, you know, people

25:32

want their drugs without their drugs. Coffee

25:35

still just lights up your brain in a way

25:37

that nothing else does. This

25:39

Brewers Cup win has been compared to

25:41

you, right? That very

25:44

famous 1976, I

25:46

think, win by California wines at this big

25:48

competition in France, and American wine sales, you

25:50

know, took off after that. Do

25:52

you suppose decaf sales take off after

25:55

this win? Do

25:57

I think they'll take off? Will they skyrocket? probably

26:00

not, but I think there's going to be continued

26:03

steady growth and people are going to

26:06

go into their favorite snobby

26:08

kind of coffee places and seeing

26:10

decaf put front and center. And

26:13

I think that's going to, changing perceptions takes

26:15

time. But it's very much

26:18

on the right path. And

26:20

actually, decaf has grown in

26:22

sales faster than regular coffee

26:25

every year for the last seven years. Are

26:29

you a decaf guy or are you a

26:31

high test guy? I'm a high test guy,

26:33

but I'm coming around to it. I've had

26:36

some really beautiful cups of decaf and it's

26:38

making me think that an afternoon cup could

26:40

be part of my ritual soon. I'm going

26:42

to have to try it. Matt Kronsberg, writing

26:45

at Bloomberg, about decaf. Matt, thanks

26:47

a lot. Appreciate your time. Thanks for

26:50

having me. This

27:04

final note on the way out today, a

27:06

callback to the story that Sabrina did for

27:08

us the other day on the wealth effect,

27:10

how people just feel better

27:12

off when the stock market is up, which then

27:14

of course affects how they spend. Anyway,

27:16

from the Federal Reserve today, this item

27:18

aggregate household wealth in this economy in

27:21

the first quarter of this year, up

27:23

3.3 percent to almost one hundred and

27:25

sixty one trillion dollars. Again, that's the

27:28

aggregate. Most of it, of course, came

27:30

from gains in the stock market, almost

27:32

four trillion dollars. Real estate appreciation was

27:34

another trillion or so. Kind

27:37

of seems like play money. Doesn't it?

27:40

Our theme music was composed by

27:43

BJ Liederman, Marketplace's executive producer is

27:45

Nancy Fargali. Donna Tam is

27:47

the executive editor. Neil Scarbo is vice president

27:49

and general manager. And

27:51

I'm Kai Rizdahl. Have yourselves a great weekend,

27:53

everybody. We are back on Monday. This

28:01

is APM. My

28:08

name is Lee Hawkins. I've been

28:10

a journalist for over 25 years. On

28:13

my new podcast, What Happened in

28:16

Alabama? I get answers to some

28:18

of the hardest questions about how

28:20

things came to be for many

28:22

black Americans and the truth that

28:24

must come before any reconciliation can

28:26

happen. I investigate my

28:28

family history, my upbringing in

28:31

Minnesota, and my father's painful

28:33

nightmares about growing up in

28:35

Alabama. What happened

28:37

in Alabama is a new series

28:39

confronting the cycles of trauma for

28:41

myself, my family, and for many

28:44

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