Adventures in Housing and Entrepreneurship

On the program today we will dabble in the consumer economy. We'll do some housing and some energy Also, Algae, but not that algae From American public media This is Marketplace in Los Angeles, I'm Kyi Risal. It is Monday today, the sixth day of July. goodood as it always is to have you along, everybody Well, welcome everyone to the first full week of the second half of the year. We're going to spend some time up at the top of the program today, notot on corporate fortunes for the next six months, not on markets or indicators But on you and me and everybody else in this economy who buys stuff, consumes stuff in other words And we're going to do it with an eye on business behavior and our buying patterns, also the calendar Target and Walmart and Amazon and most other retailers are rolling out back to school sales earlier than usual this year and PWC once upon a time known as Price Waterhouse Coopers, says families are going to spend nine hundred and twenty two dollars on supplies this year. forty per seven percent of those families say they are going to be spending more this year The last place of Kristen Swab gets us going with corporate promotions and consumer predilelections During a target run yesterday, Kristen Deal kinda couldn't believe what she saw on display. Colored pencils, binders, backpacks. I was surprised to see already the back to school when we, you know I think most of us are just happy that we're just out of school Dil is a marketing professor at the University of Southern California's Marshall School of Business, and she says sales patterns have shifted over the last handful of years. Every's starting earlier Christmas promotions before Thanksgiving and Thanksgiving before Halloween and those things. It wasn't always this way. Companies first started pushing early buying during the pandemic, when broken supply chains threw retail inventory into chaos Consumers seemed happy to shop early and buy more. Brittney Steiger, a retail and e commerce analyst at Mintel, says the sales trend really cemented when tariffs came into play that really triggered an early shopping mentality for parents really trying to get ahead of those. price increases. Steiger says at this point, it seems like one sale blends into the next And as it's stuck around, it's kind of evolving into this sort of always on mentity Always on because there's always an event to prepare for, and life is getting more expensive. Christina Duranti, a professor of marketing at Rutgers University, says inflation, which is at its highest level in three years, is causing serious anxiety for shoppers It's so uncertain that we don't know how it's going to play in And because we want to have control, over notot just our budget, but just our lives. We're really sensitive to any sort of ceue Duranti ran studies on this on how stressors change buying habits. She says some people really locked in. They kept a tight budget, maybe even hoarded money Others. N. We're really likely to do impulse purchases on new clothes anythingthing that might help them feel more in control over whatever's currently stressing them out She says the part of our brain that tells us to eat chocolate is the same part of our brain that tells us to shop I'm Kristen Schwab for Marketplace. Wall Street on this Monday after a long weekend. Oh look, all of a sudden, AI stocks are a thing again We'll have the details when we do the numbers You know how? sometimes when you ask something complicated, you get this. That's a very good question. It's a great question. That's Sott Brave, the Chicago Fed also earned Teski at Stripe. They are economists both talking on the topic of today's explainer You and how you are feeling about this economy There are, as you know, two primary ways we measure that. We talk about them all the time, consumer sentiment from the University of Michigan and consumer confidence from the conference Bard. We are talking about them today Because if you are a regular listener to this program, you know that you, the humble consumer, drive something like two thirds of every single thing that happens in this economy But as you have perhaps also heard It has been kind of hard to square how consumers are feeling spoiler alert, pretty negative with how consumers are spending. And historically, there has been a pretty close relationship between sentiment or confidence and consumer spending. Consumer sentiment and consumer confidence were tier inputs into models that forecasters and economists had about consumer spending past tents that Ernie Teski just used right there. How consumers are feeling just isn't a grade a predictor anymore for how they will spend Correlation kind of fell off a cliff after twenty twenty. thinkink about that timing for just a second. And ever since, we've consistently been feeling pretty bad about this economy of ours The University of Michigan Consumer Sentiment Index was up in June. yes But that was from an all time low in May. So pretty negative thanks mostly to the war and oil prices If I were to put those low levels of consumer confidence or sentiment into a model, the model will tell me, o my God, consumer spending is going to be like down below the earth, like just terrible Consumer spending, as you surely know, is far from those down below the Earth's terrible levels. It's basically fine actually up seven tenens percent in May when we had that all time sentiment. Lo And that in turn as economists wondering why consumer sentiment isn't basically fine too. Really what's going on, I think, is inflation, high prices, affordability, however you want to put it This is kind of the vibes conversation we've been having for years now about this economy. Since the pandemic, really and the high inflation that followed, the consumer price index hit nine percent in june twenty twenty two, in case you had forgotten which you We have not consumers have memories, right? And so even as Grth in prices have gotten better They go to the grocery store, they see persistently high price levels of eggs, know, whatever they're buying produce. and that is keeping their attitudes weak and low over this whole time There is something else going on with the consumer sentiment measure in particular that could explain why it's been so persistently low The University of Michigan survey used to be conducted by phone And then in early twenty twenty four, they gradually transitioned to collecting all of their information online Okay, so People tend to be materially more negative when they answer things online And we saw that immediately with the University of Michigan sururvey. Like eleven percent, materially more negative on average. That's according to Dudesky's research What does all this consumer negativity mean for how we ought to think about this data? There may be other reasons why we should be concerned or freaked out about that. you know, political, social, you know, et cetera reasons. But from an economic standpoint, we have seen empirically that the economy grows just fine throughout these negative vibes Todesky is personally putting less weight on the readings than he used to. Scott Bray and his colleagues at the Chicago Fed are trying to figure out what is going on with the data Is there a way that we can restore some of that relationship between these traditional measures and consumer spending growth by bringing in new alternative higher frequency sources of information? So they have made a new composite measure that uses data both from consumer sentiment and confidence and combines them with other daily data That's high frequency, right? Daily data looking at how positive or negative economic news coverage is and how people are talking about the economy on social media. In one instance, it's actually a survey that's asking the same questions as one of the traditional indexes But just doing it on a daily basis was a much larger sample Turns out the new index does track more closely to how people are spending. No official release date for it yet, but we'll keep you posted It's cooler today a little bit anyway, in much of the easastern and southern parts of the country after a blistering fourourth of July weekend. that was miserable for people and their pets, soccer players and their fans And power companies too places Samanth Fields has more on how the grid held up Cod in Massachusetts didn't even get the worst of the heat wave. It only made it into the nineties Still, Barbara Kates Garnick, a professor of energy pololicy at the Fletcher School at Tufts University, says it was hot. We had a lot of times when our electricity fluctuated on and off Lights flickkered. so we were very aware that there was an issue with the power grid It wasn't just the cpe The power kept flickerring on and off in other places too, including Philadelphia and New York. I think it shows that at the local level, there are a lot of concerns that need to be addressed because come to a time when we're using more electricity, the population is increasing. And the physical infrastructure that makes up the grid is getting old. Much of it was built more than fifty years ago But for all this strain, the grid held up pretty well over this long weekend Charles Hua at the Consumer Education nonprofit Power line says despite intense demand and some flickering, the lights and air conditioning stayed on for most people We're doing a better job of managing and operating the grid. And part of what that looks like is directing consumers to be more proactive in adopting certain measures like turning off their lights or conserving energy at different parts of the summer days when the grid is particularly stressed The addition of more renewables has also helped relieve stress on the grid In the mid Atlantic, which saw what was likely record demand during the heat wave, Michael Goggin at the consulting firm Grid Strategies says solar performed well. The solar output was consistently high every day last week during these high demand periods. And so that really helped keep the lights on Let'll keep the lights on in the future, he says, We also need to be building more new transmission lines, including between regions Expanding transmission is particularly valuable in events like this because extreme weather is not These events are not that large. And so if your region is short you can buy power from your neighbor and then you know maybe this winter, It'll be the reverse. And your region will be able to send power to its neighbors. I'm Samantha Fields for Marketplace Dateline Everett, Washington. Boeing started up a new assembly line at its facility there today building seven hundred thirty seven Max jets. Airbus, meanwhile, its main competitor, is reported to have set its sights I delivering nine hundred commercial planes this year, That would be an all time high Both companies have faced supply chain issues since the pandemic and as these things go, they each now have order backlogs thousands of planes deep. and which are only growing as airlines demand spiffy new jets places Henry App takes it from there There are basically two reasons airlines really want to get their hands on new planes right now. One is the aircraft they have are getting old. A couple decades old in some cases, says Doug Harnet, a managing director at the investment firm, Bernstein The good thing about an aircraft is that if you maintain them properly, they can last quite a long time Eventually, the costs start to get higher and higher for the old aircraft. So they've ordered new ones, but the wait times are long. And even though airlines have faced big fuel bills in recent months, they haven't canceled many orders for new planes, becausecause those new jets will help them save in the long run, says Henry Harvelt, an airline industry analyst at Atmosphere Research Group new aircraft allow airlines to consume less fuel helps airlines offer the low fares that we as travelers want. planes can also fit more passengers, Hardvelt says. Not great for us in the legroom, of course, but it helps make these aircraft more cost efficient for airlines to operate. Which gets us to the other reason airlines are in the market for new aircraft, demand for air travel is high, both from customers willing to squeeze into those economy seats and from high income premium customers, says Meagna Maharishi, an airline reporter at SIFT. To attract those customers, airlines have been adding new internationales United is a good example of this. You know, they've added routes to like Greenland and like Mongolia. New routes require new planes. Plus, airlines are upgrading the business in first class seats on those aircraft A lot of that has been meant to cater to like those wealthier consumers because that's the cohort that's really been driving the revenue for these airlines. But fancier first class cabins are also slowing down new aircraft deliveries, says Doug Harnet at Bernstein, because regulators have to sign off on the changes. And so there's been delays not just in in supplying the seats say, but also just getting certification for new designs. Those delays on top of high demand, Harted says are why Boeing and Airbus are effectively booked up for the next six years I'm Henry App for Marketpllace Coming up And I was like, so the problem is, I don't know anything actually When does that stopped anybody, huh? First though the numbers. Now Industrial is up one hundred and fifty five points today, three tenth percent finished at fifty three thousand fifty five. That's another record. Should you be keeping track. NSDAQ gained two hundred eighty eight points one and one tenth of one percent twenty six thousand one hundred and twenty one. GS and P five hundred added fifty four point seven tenths percent seventy five and thirty seven. Microsoft is cutting four thousand eight hundred jobs about two percent of its global workforce as it overhauls its Xbox giming unit and restructures in order to pay for What? What's it paying for? All the AI investments it has made. Microsoft down one percent on the news Apple improved about one and three th percent. The World Cup continues this week, as you might have heard, someome advice if you are planning to go, Leave your drone at home. The TSA says that since the start of the tournament, more than six hundred drones have been seized across all eleven U.S host cities. Why would you think it's okay to bring a drone to that game? you can barely bring in drinking water Drone parts maker unusual machines plummeted one and nine tenth of one percent ' listening to the mark This is Marketplace. I'm Kai Rizal. If you bring up the topic of algae right now, one's mind even if Somehow miraculously you are mostly removed from the grind of the daily news cycle, one's mind likely goes to the reflecting pool in front of the Lincoln Memorial But algae doesn't play favorites, and it can thrive in far larger bodies of water to wit Every year the National Oceanic and Atmospheric Administration predicts just how bad the algae is going to be on Lake Erie And the latest forecast is just out. Merate harmful algae blooms is the guess for the year And those algal blooms are obviously a bummer for fish and for kids who want to go swimming, but they've got massive economic implications too, for the people living nearby and folks just visiting as well. From the warm, slightly green waters of Lake Erie Plac Kaylee Wells explains The blooms are a big enough deal that Lake Erie is dotted with little buoys, constantly monitoring how much algae is in the water It takes several minutes in a zippy speedboat to travel far enough offshore to see one up close On the way, one of the scientists captures a jar full of water and holds it up to the light It looks clear enough to drink But then she throws a net with a filter on the end overboard and drags it through roughly a thousand gallons of water to reveal all the stuff we can't see The remaining liquid she pulls out of the filter is a murky yellow green, scuzzy, with lots of tiny zoolankton buzzing around and nipping at the green bits It's summer, the water temperatures are near seventy We're certainly catching a lot of Living stuff in the water. Ed Verhimy is our captain on today's voyage. He's also a principal and senior engineer at Limnot Tech, which is a consulting firm that helps make water cleaner. What we don't want is the harmful algae. That's the kind of algae that can cause diarrhea, vomiting, and rashes. and that's what his company helps monitor. Verhimy keeps driving until we arrive at a buoy pulls up the data it's capturing on his phone and relays the good news Yeahep, really nothing going on out there right now. So these are very low readings W The recipe for high readings, extremely heavy rainy periods, which pull nutrient rich agricultural runoff into the lake, followed by extremely dry and sunny periods that help the algae form. This year hasn't been very extreme, which is why NoOAA says it'll be a moderate year for harmful algae Brahami says an especially bad year, like twenty fourteen, when the algae contaminated Toledo' water supply would show readings twenty or twenty five times higher than this, and the blooms would be very visible So that's noticeable scum. the water looks like paint really This year's moderate forecast isn't just good news for Lake Erie's ecosystem. It means algae won't tank whole chunks of the Great Lakes' economy this year because Lake Erie is the main source of drinking water for Northeast Ohio Alex Margavichis, commommissioner of Cleveland's Water Division, says an algalbloom like the one that happened in Toledo would be a doomsday scenario I don't even know where to begin to calculate, I guess the economic impact of something like that. If Greater Cleveland had to be under a do not drink water advisory, what would happen? The background chatter is from the State of the Great Lakes, an annual convening of water experts and community members in downtown Cleveland. Like I said, clean water's a big deal here Anyway, the cost of algal blooms is calculated in more than just bottle water and healthcare bills In this six trillion dollar economy of the Great Lakes Basin is a huge tourism economy Chris Ran is Cuyahoga County executive. That's the county Cleveland's in Lake Erie is the walleye capital of the world. So they come here to fish, there's fishing tournaments and just recreationalists. When the algae gets bad, it sucks up all the oxygen in the water, which causes mass fish kills. Not an awesome feature in the walleye capital of the world And a hit to the tourism industry can have Rripple effects, says Scott Hardy, an Earth scientist with the Ohio State University And that's not going to impact the people who are going to recreate, but you have to think about the hotels where people stay. You have to think about the gas stations that fill up the cars that people drive to the water Hardy says climate change is making that extreme weather and the algal blooms that follow it more common But he also says we're getting better at mitigating the runoff that causes the blooms in the first place. So every year is a toss up of just how bad it'll be. From the Waters of Lake Erie, I'm Kayley Wells for Marketplace Red Fin came out with a survey last week. seventy four percent of homeowners Say their home is a reflection of who they are fifty seven percent of renters on the flip side of that economic coin Say they their home is just a place to live Actually having your name on the deed can lead to all kinds of changes in your life. And sometimes even a whole new career Here's today's installment of our series Adventures in Housing My name is Sarah Southwick and I have a native plant nursery in Provo, Utah So the origin story of my business It begins years ago when my husband and I bought a house in Provo. We' first time homeowners And so I went to a class to learn how to landscape in Utah was like a free community class called loocalsscape And I was very quickly convinced that here in Utah Kentucky Bluegrrass has no business being the default We're in a desert Native plants seemed like the obvious choice, but when I searched for them at nurseries nearby, I could not find them. and I felt like I was having to get a master's degree doing research, trying to figure out what was native, trying to drive all over the place on a wild goose chase, trying to find plants Most plants are trademarked cultivars, which means somebody earns a commission or a royalty every time that plant is grown and sold And we do this because we value predictability in our landscapes. So we want, okay, if I plant this tree, I know it's going to be this exact size and it's going to turn red in the fall. And that's not actually how plants are And so choosing to plant native plants means choosing Unpredictability. I could tell you the exact moment when the idea of this being a business entered my mind. I was pushing the stroller down sidewalk with my kid, and it just settled on me. I was wrestling with this. Why can't I find these native plants? And it hit me. You could solve this problem one day if you want to And I was like, so the problem is I don't know anything actually. I work in HR, I work in tech And that was about five or six years ago. and over time, I just have not been able to let the idea go some point it's shifted from maybe someday to when I open this plant nursery So february twenty twenty five My manager approached me and let me know that my three quarter time position was no longer an option and I would either need to go full time or I could leave by taking a severance And I knew immediately, I was like the moment, the moment has arrived like for me to try and take this leap I've kind of crammed plants into everyvery usable space of my backyard at this point. My kind of natural state of being is one of more control. And so I do struggle with the fact that It've taken this leap into this great void, this great unknown, but I have to run it as a business in order for this to work and for me to still be a business in years to come Sarah Southwick, running her home based business, native Utah plant, She's in Proo Tell us, what youa about your adventure into housing, own, rent, or otherwise, marketplace. org is where you can do that This final note on the way out today in which OPEC plus looks at falling crude prices and says Definitely, let's put more supply into the global market. one hundred eighty eight thousand more barrels a day will be the new quota, effective in August to catch is that oftentimes cartel members don't actually hit those quotas For reasons both political and economic. Brent crude on the day of the global benchmark, seventy do seventy two, rather dollars, ten cents a barrel Basically back to where it was before President Trump started bombing Iran. Amir Babwin, Kaitlin Ash, John Gordon andnoyi,ar Steveollis and Stephanie Sek are the markarketplace editing staff. Kelly Silvera is the news director. And I'm Kybra Rll. We will seeit tomorrow everybody This is APM