Episode Transcript
Transcripts are displayed as originally observed. Some content, including advertisements may have changed.
Use Ctrl + F to search
0:00
Thank you to those who donated during
0:02
our May fundraiser and to those who
0:04
give year round. Support is still needed
0:06
though to end our budget year on
0:08
target. So please help power this important
0:11
resource. Would you make a budget year-end
0:13
gift at marketplace.org/donate? Hey,
0:16
how do you feel? I
0:19
mean, really, how do you
0:21
feel? The economy wants
0:23
to know. From
0:25
American public media. This
0:28
is Marketplace. In
0:38
Los Angeles, I'm Kyle Rizdell. It is
0:40
Tuesday today. This one is the 25th
0:42
of June. Good as always to have
0:45
you along, everybody. Upon
0:47
us this morning, we're the latest
0:49
numbers from the conference board on
0:51
consumer confidence down just a bit
0:53
again this month. The latest data
0:55
point in a string
0:57
of them, small business optimism, CEO
0:59
economic outlook, consumer sentiment that
1:02
have been telling us that we, the
1:04
people, maybe don't feel so great about
1:06
the economy these days. Actual headline
1:09
data notwithstanding. The
1:12
word you're looking for here, of course, and for regular listeners,
1:14
this will not be new, is
1:16
vibe session. It's been in the
1:18
ether for years now, the vibe
1:20
session has, but why?
1:24
We sent Stacy Vanek Smith deep into the vibes
1:26
to find out. Economists do
1:28
not like talking about feelings. They
1:31
didn't sign up for feelings. Economists
1:33
like talking about data. And
1:36
the data looks strong. So why
1:38
do we feel so bad? Martha
1:40
Gimbel heads the Yale Budget Lab. She
1:43
says being an economist right now is
1:45
a little like being a doctor talking
1:47
to a totally healthy patient who keeps
1:49
insisting they're sick. You're saying like your
1:51
EKG is fine. Your blood
1:53
work looks fine. The problem
1:56
is that the patient keeps
1:58
saying, no, I'm not. I'm
2:00
really not fine. I don't feel good.
2:03
Take the job market. Right now, people
2:05
are really worried about losing their jobs
2:08
a lot more than they were before the pandemic.
2:11
But the data says... You
2:13
are incredibly unlikely to be
2:16
laid off right now. About 20%
2:19
less likely than in 2019. Gimbals'
2:22
layoffs are at the lowest level they've been since
2:25
the government started tracking those numbers.
2:28
Since they started recording in 2000. It
2:31
just doesn't feel like that's true. And
2:33
yet it is. Yeah, it doesn't
2:35
feel true. The data vibe
2:37
disconnect is real. So
2:40
what is going on? Julia
2:42
Pollack is a labor economist with ZipRecruiter
2:44
and she has a few ideas, all
2:48
of which involve complicated technical terms.
2:50
The kinds economists tend to roll
2:52
out when feelings come up. Technical
2:55
term number one? Salience
2:57
bias. So
2:59
there are layoffs happening right now. And
3:02
they're happening in industries the media covers a
3:04
lot. Like media and
3:06
tech. The layoffs have grabbed
3:08
headlines and had an outsized effect
3:10
on how we see the economy. Those
3:13
layoffs feel a lot more salient to us than
3:16
the hiring boom that's been happening in healthcare. Even
3:19
though healthcare is a much bigger part of
3:21
our economy. Another reason for
3:23
the data vibe disconnect? Bad
3:26
things tend to stick with us. Which
3:28
brings us to technical term for feelings
3:30
number two? Loss aversion. It's
3:32
the tendency for the pain of
3:35
losing to be psychologically about twice
3:37
as powerful as the
3:39
pleasure of gaining. If you lost
3:41
a job in 2020, even if you
3:43
eventually got a better job, the
3:46
pain of the lost job looms
3:48
larger. The bad times haunt us. And
3:51
so do the good times. Which
3:53
brings us to technical term for
3:55
feelings number three? Reference dependence. Even
3:58
if you're better off today. overall than
4:00
you were before the pandemic, you
4:03
will tend to measure your life against
4:05
one glorious reference point. That month, back
4:07
in 2021, when you got two job
4:10
offers in a week, your credit card
4:12
balance was zero, and that dancing panda
4:14
NFT you bought was worth $50,000. And
4:18
that reference point is making it very difficult
4:20
for them to feel happy now. So
4:23
it seems like there is just no pleasing
4:25
us. Maybe economists should just write
4:27
us off as a bunch of haters and
4:30
ignore our feelings. So economists
4:32
do worry when consumer confidence falls
4:34
because they worry that it will
4:36
have real effects. Effects like people
4:39
stop buying stuff. And
4:41
as a result, businesses really will suffer and
4:43
lay off workers and that'll set off a
4:45
negative cycle. Consumer spending is about two thirds
4:47
of our economy. If people
4:50
stop buying stuff, our vibe
4:52
session will become a recession.
4:55
But in a lot of ways,
4:57
we come by this pessimism, honestly,
4:59
says Martha Gimbal, because economic data
5:01
is just different than a lived
5:03
experience. Take inflation. When I
5:05
think about prices, I say, you know, like,
5:08
look, inflation's come down from its peak, etc.
5:10
A normal person
5:13
goes to the grocery store and says, hey,
5:16
I'm paying X for milk and I
5:18
was paying much less than X two
5:20
years ago. And
5:22
both the economists and the normal people are correct.
5:25
But even by a lived experience measure,
5:28
we should probably be happier
5:30
because our wages have risen
5:32
faster than prices. Our pay
5:34
has, on average, kept pace
5:36
with groceries. So why does
5:38
our cost of milk misery
5:40
outweigh the pleasure of a
5:42
plumper paycheck? Economists always emphasize
5:44
people's utility functions. So how
5:47
they value different inputs are
5:49
their utility functions. Is that like the
5:51
economics version of feeling your feelings? Yes,
5:53
it is exactly. That is a
5:56
better way of putting feelings that
5:58
might not be about this. this moment.
6:01
Gimbal thinks a lot of the vibe session
6:03
might be because we are still working through
6:05
the traumas of the pandemic. If
6:08
you were talking about one of your
6:10
friends who had had a really traumatic
6:12
experience, you wouldn't be saying to people
6:14
like, man, Mary just can't get over
6:16
what happened three years ago. Like, why
6:18
is she so upset? Right? Because it
6:21
is no wonder that Mary's all up
6:23
in her utility functions. Her salience bias
6:25
probably has her in a loss aversion
6:27
spiral. But maybe if you
6:29
give her some time, her reference dependence
6:31
will shift and she'll feel better. And
6:34
hopefully so will all of us. And
6:37
we can get back to good vibes. And
6:39
economists can get back to talking
6:41
about data. In New
6:43
York, I'm Stacey Vanek Smith for Marketplace.
6:46
The utility functions on Wall Street today.
6:48
We're kind of all over the place.
6:50
We will have the details when we
6:52
do the numbers. A barrel
7:20
of crude oil today, the global benchmark
7:22
Brent North Sea to pick just one
7:24
variety. That barrel would cost you $82.34.
7:29
Emphasis there not on barrel
7:31
or the kind of oil, but on the
7:34
denomination of currency in which payment
7:36
will be required. Marketplace's Sabrina Beneschor
7:38
explains why. If someone in
7:41
France wants to buy oil from Saudi
7:43
Arabia, they would usually use
7:45
dollars. Steve Kamen is a
7:47
senior fellow at the American Enterprise Institute.
7:49
If someone in Mexico wants to buy
7:51
oil from Norway, they would use dollars.
7:54
So even though these countries have their
7:56
own currencies, they still use another country's
7:59
currency, the US dollar. to buy oil
8:01
or gas most of the time. Why?
8:04
Well, history for one. The US
8:06
was originally one of the world's biggest
8:08
oil producers. We sometimes forget that. Brad
8:10
Setzer is a senior fellow at the Council
8:12
on Foreign Relations. The Rockefeller
8:15
Empire was initially a
8:17
domestic US oil empire, and
8:19
going into World War II, the
8:21
US was one of the world's biggest oil
8:24
exporters. But the real start of
8:26
dollar dominance in oil markets came after the
8:28
oil shock of the early 70s, says Gregory
8:30
Brew, analyst at Eurasia Group. Saudi
8:33
Arabia had enormous fiscal
8:35
surpluses. It was earning far more money
8:38
than it could ever hope to invest
8:40
in its own economy. So
8:42
it needed a place to park all of that money. And
8:44
the natural place to park this money was the
8:47
American market. There was not,
8:49
Brew says, some secret agreement to
8:51
do this. It just made sense.
8:53
And it still does, says AEI's
8:56
Steve Kaiman. The dollar offers the
8:58
safest, broadest, most liquid
9:00
markets. The US also is protected
9:02
by the rule of law, including
9:04
foreign investors. This logic applies
9:06
to more than just oil. Most commodities
9:08
are priced in dollars. This has perks
9:10
for the US. It creates extra demand
9:12
for US dollars the world over, pushing
9:14
up the dollar's value. But
9:16
oil does not play the big role
9:19
in this that it used to, says
9:21
CFR's Brad Setzer. Saudi Arabia these days
9:23
invests its profits mostly in Saudi Arabia.
9:25
Right now, the biggest surplus in the
9:27
global economy is actually in China. It's
9:29
not in the oil countries. And while
9:31
some countries like Russia do not use
9:33
dollars to buy oil, reports
9:36
of the dollar's imminent demise are
9:38
greatly exaggerated. In New York, I'm
9:40
Sabri Ben-Eshor for Marketplace. Dollar's
9:46
going to be around for a while, peeps. You know what else is
9:49
going to be around for a while? Our podcast.
9:51
Should you happen to miss something on the
9:53
actual radio, we've got you
9:55
covered. marketplace.org is where you can find the feed
9:57
or, of course, on the platform.
10:00
Your choice follows there. Stacey
10:20
was talking about the vibe session a minute
10:22
ago. There is, as we were
10:24
just talking about, one happening here. And
10:26
there's one happening over in the UK
10:29
too. Inflation is actually at the Bank
10:31
of England's target, that magical 2%, down
10:34
from a peak of better than 11% a couple of years ago. But
10:37
with an election around the corner over there, July
10:39
the 4th, had you not heard, all
10:42
is not well with the economic electorate.
10:44
So we did what we do and we want to know
10:46
what's on the minds of merchants and the many over there.
10:49
We called Sam Wallace. She runs a
10:51
stall selling honey in London's Borough Market.
10:53
It's called From Field and Flower. Sam,
10:56
it has been a while. It has,
10:58
it has been a while. So how
11:00
are things in Borough Market? Well,
11:03
really good actually. I
11:05
appreciate, I sound slightly surprised. The
11:07
last six months has been really busy. So
11:10
the market as a
11:12
vibe feels like it's picking up again
11:14
pre-pandemic, which I guess is the
11:16
term of reference that everybody uses nowadays, is
11:19
pre-pandemic. Well, that and vibe, so
11:21
clearly you're up to speed on
11:24
everything. You can tell I'm
11:26
very relaxed. Today. Yeah,
11:28
it's been really good. And it seems
11:30
like we're just getting more visitors. So
11:32
I don't know if they're
11:34
mainly international or local, but it just seems
11:36
to be busy again, which is wonderful. Speaking
11:39
of international, how are your relations with the
11:41
continent as it were? Because it seems to
11:43
me every time we've chatted the last number
11:45
of years, there's been a
11:48
Brexit, European trade barriers, it's harder
11:50
now thing that you have been dealing
11:52
with. And I imagine that's probably still
11:55
true. Sadly,
11:57
yes, that is still very much a
11:59
thing. In fact, I think in April
12:01
it was the latest, what
12:03
do they call it, the target operating
12:05
model for borders changed
12:08
again. That means
12:10
that our pallets go
12:12
through a slightly different system, and
12:14
that means telling customs a good
12:16
24 hours before goods land into
12:18
port what we're landing effectively and
12:20
what it is so that they
12:22
can check it. And
12:25
that requires a lot of coordination. As you
12:27
might imagine with the Haulia, with
12:29
various government systems which are
12:31
not necessarily easy for little people like us to navigate.
12:33
Well, I was just going to say, do you and
12:36
your very small staff, I mean last I heard it
12:38
was like three, maybe three and a half, whatever, do
12:40
you do that yourselves or do you outsource it? And
12:42
how much of a bottom line burden
12:44
is that to you? Well, so we
12:46
do some of it ourselves and then
12:49
we have to pay our Haulia to represent
12:51
us as a customs agent. And
12:53
that comes with fees. So they
12:55
have gone up recently. In
12:58
general, Haulia costs have gone up. Haulia
13:00
travel times have gone up. So overall
13:03
the cost is increasing all the time. If
13:05
we're trying to have a smooth logistics process
13:07
where one would try and plan one stock
13:10
to come in at a certain time and
13:13
work out your budgets and all of
13:15
that from there, it's nigh on impossible
13:17
at the moment to do that accurately.
13:19
No, I'm sure you more
13:21
than once have talked about Italian
13:24
honeys and some of the honeys that you
13:26
do get from what is now the European
13:28
Union. And I guess is
13:31
there a point at which you
13:33
would say, you know what,
13:36
chuck it, the heck with this Europe relationship,
13:38
it is too hard and we need to
13:40
further diversify our sources of honey. Oh,
13:43
it's a really tricky question. We ask
13:45
ourselves that quite a lot. I think,
13:49
and honestly, as you probably remember, our
13:51
passion is honey, but the different varieties.
13:53
So for us, it's the diversity of
13:55
flavor. So we are trying
13:57
to source as we speak honey from. the
14:00
UK basically, but looking for
14:02
those distinctive varietals, which is hard. As
14:04
I think I've told you before, we
14:06
have quite a kind of abundance
14:09
of various wildflower honeys here in the
14:11
UK that don't vary much in terms
14:13
of flavour. But I suppose the
14:15
good thing is, from our point of view,
14:17
is we found a lovely monofloral variety called
14:19
borage, which is a very light,
14:21
delicate honey. It's quite hard
14:24
to find because the bees don't necessarily make
14:26
a huge amount of it, but we've managed
14:28
to source some from Essex, and that has
14:30
been brilliant because it's far more local, frankly,
14:33
than Europe. Okay, last
14:35
thing I want to let you go because you have
14:37
things to do, I'm sure. With
14:39
the understanding that you are a honey
14:42
merchant and not a political scientist, you are the
14:44
closest thing we have to a source on the
14:46
ground over there. There's an election coming up in
14:48
the UK. And also, obviously, you
14:52
deal mostly with tourists and international visitors in
14:54
the market, but when you go to the
14:56
local corner market to get milk for your
14:58
tea, what's the move? Yes. Ooh,
15:02
I don't know. I think people are
15:04
generally quite optimistic. I mean, it's the
15:06
summer. We've got football over here, which
15:08
is massive in terms of people's spirit.
15:10
So everything kind of feels more optimistic
15:12
in the summer. And I do think
15:15
the idea that there might be a change of government
15:17
and perhaps a change of outlook, but it will take
15:19
a long time, I think, for things to truly
15:22
feel better. When I go to my corner shop,
15:24
my price of milk is much
15:26
more expensive than it used to
15:29
be. So you do notice it.
15:31
Yeah. Well, if you find
15:33
yourself in London, go by the Borough Market. The
15:35
stand or the stall is called From Field and Flower.
15:38
Ask for Sam Wallace. Tell her I sent you. Sam,
15:40
thanks a lot. It's always good to talk to you.
15:42
You too. Take care. Thanks, Kai. Talk to you soon.
16:00
Coming up. The fish
16:02
don't like to come up and bite in that. It
16:04
makes the fish lazy. Trust me,
16:06
you don't want lazy fish. First
16:08
though, let's do the numbers. Down
16:11
industrial is down 299 today. Three
16:14
quarters of 1% closed at 39,112. And
16:18
as that gained 220 points, that's
16:20
one and a quarter percent on that particular index, 17,000
16:23
to 717. The
16:25
S&P 500 picked up 21 points, 4 tenths percent, 54 and 69. Sabrina
16:30
was just telling us about how oil is bought and sold
16:32
in US dollars. So
16:34
some oil stocks. How about that? ConocoPhillips dipped
16:37
2 tenths of 1%, Chevron slayed a half
16:39
percent, Duke Energy down about 1 and 3
16:41
tenths of 1%. Home prices
16:43
hit another record high in April. That's
16:45
according to the latest S&P CoreLogic Case
16:47
Shiller Home Price Index, up 6.3% from
16:50
a year earlier. It had less than the increase
16:53
in March. Some major automakers are facing recalls on
16:55
some high profile models. Ford is recalling more than
16:57
a half a million F-150s from 2014 over a
16:59
downshifting issue. Tesla
17:03
is recalling some 11,000 of its newest
17:05
EV, the Cybertrucks. You've seen those around,
17:07
I'm sure. Tesla revved up
17:09
about 2.6% today. Ford
17:11
Motor Company decelerated. One and
17:13
a tenth. You're listening
17:16
to Marketplace.
17:20
Marketplace is brought to you by you. Yes,
17:22
the most important piece of our budget is
17:25
donations from you, our listeners. We
17:27
call the people who donate Marketplace investors
17:29
because every dollar you give comes back
17:31
to you in the form of trustworthy,
17:33
grounded reporting with a sense of humor.
17:36
So please become a Marketplace investor
17:38
today at marketplace.org/donate or just click
17:40
the link in our show notes.
17:43
This is Marketplace. I'm Kai Rizdahl.
17:46
Minimum wage is where we go
17:48
next and the disparities between what
17:50
some states say companies have to
17:52
pay and where the federal standard is. Starting
17:55
next week, minimum wage is going to get a boost in
17:57
a couple of three, four places. It goes up
17:59
to $12. for
22:00
five months. It's the exact same that my
22:02
grandfather did in the 50s. Last
22:05
year, his vessel was one of roughly 300 that
22:08
left the West Coast in search of Alba Cortuna. The
22:10
year before, there were 400. And
22:13
before the pandemic, there were more than 500. The
22:16
numbers are dwindling because Hawkins and his
22:19
competitors are having a harder time finding
22:21
fish. Last year was a really
22:23
bad catch. It was also
22:25
the warmest year worldwide on record.
22:28
You know, the temperature affects us huge.
22:30
So on years where we fished like
22:32
68 degree water and then
22:34
there's no wind and the sun's out, so
22:37
you get a thermal warming on the surface, the
22:39
fish don't like to come up and bite in
22:41
that. It makes the fish lazy. So
22:44
Hawkins tries to find cooler water using
22:46
data from Mark Hess. He's a director
22:48
of operations at a company called Ocean
22:50
Imaging, which tracks conditions in the seas.
22:53
Hess says after 35 years in
22:55
the industry, his data is sending Hawkins
22:57
and other fishermen farther afield. The
22:59
catch was mainly centered off of kind
23:01
of California, Oregon, back in the 80s
23:03
and 90s. Now the
23:05
fishery, meaning the fishing effort, all the boats,
23:08
are really fishing from Oregon all
23:10
the way up to Canada. So in
23:12
that time, the fishery has
23:15
moved north for sure. So
23:18
instead of fishing 60 to 200 miles offshore,
23:20
Scott Hawkins says he'll go up to 1,500
23:22
miles. That
23:24
trip can take a week each way. So,
23:26
you know, a lot of your profits go out to
23:29
exhaust. The Western Fishboat
23:31
Owners Association is trying to
23:33
get disaster relief for fishermen.
23:35
Based upon, in part, the
23:37
El Nino pattern that
23:39
prevented harvesting of these stocks.
23:42
Executive director Clayton Wraith is worried that
23:44
some fishermen who didn't fish last year
23:46
might never come back. Because they
23:48
need to pay their mortgage, because they need to pay their crew,
23:50
and all the rest. Scott Hawkins is
23:52
earning extra money as the captain of a dredge
23:54
boat, so he won't be heading out to sea
23:56
this month. We have a job coming up. So
23:59
this year, normally,
Podchaser is the ultimate destination for podcast data, search, and discovery. Learn More