February inflation data shows more of the same

On the program today, what we can learn about where this economy might be going?

“By looking where it's been, from American public media, this is Marketplace.”

[MUSIC] In Los Angeles, I'm Kyri Rizdolli, it is Thursday today.

April the 9th, it was always to have you along.

Everybody, the news of the American economy comes to us today in the form of six simple letters, G, D, and P, and then P, C, and E. In layman's terms, that's gross domestic product and personal consumption expenditures, key measures of economic growth and price growth. Inflation that is.

And I'm sorry to have to tell you that the indicator arrows are kind of going the wrong way. Katherine Ann Edwards is a labor economist, also the host of the Optimist Economy podcast. Katherine Ann, welcome back to the program, it's good to have you on. Thank you again for having me. All right, so let's take it in order.

GDP, we learned this morning in the fourth quarter of last year. For economic growth, one half of 1% annualized. Discuss, what do you make of that? April Flex, primarily the longest government shutdown in the industry, which shaped a considerable amount of growth out of our economy.

“Do I detect you not being as concerned, perhaps, as others might be?”

It comes on the heels of a lot of bad news. 2025 was the weakest year of job growth outside of a recession that we've seen this century. We shed jobs in four of the months of that year. We barely added 156,000 total for the year 2025. So I think there are reasons why it was bad that we can maybe wave away,

but we can't wave away all of the other bad news in our economy. So yes, the shutdown was a big component of it, but we still have overall economic weakness. We're not seeing strength in every quarter except for this one. Okay, the next one.

PCE, personal and consumption expenditure is indexed. As I am required to say by law, it is the Fed's favorite indicator of inflation. Month on month, up four tenths of one percent is a lot, right? The annual number, which we'll get to in a minute with Dan Aquaman, was three percent, which is okay.

But monthly it does, the pace of increase does seem to be increasing. Yes, it's a very worrying trend, especially considering that that report does not reflect the world since the war in Iran began. So that's a February print. It's not looking at in the war started right at the end of February.

So it's not taking into account anything that's happened to say oil prices since then. So it's an indicator that our prices were already running a little too hot before all of this happened.

I'm going to roll out a word here, and I want you're like, you know, 15 second reaction.

We have slowing economic growth and rising inflation. Stagflation anywhere on your radar screen? Absolutely, in an in a horrible way, right? Not in a good way. But this time around, it's worth noting that while there are echoes to the late 1970s, we have a much better Fed.

We, you know, back in the 1970s, we didn't have a target inflation. They had been wish-washing on interest rates for half of a decade, and they had not signal that they took inflation seriously, which is one of the reasons of hand by the Fed's own historical admission, you know, which you could read on their websites. We are in a much better position this time, because we have a Fed that is clearly

set to sign the ball. You can't come under the worst of a higher federal reserve chairman has ever come under and not blink if you don't take inflation seriously. Fair enough. You had to piece the other day. We passed around in our production team Slack channel. In which you said, you're not all that word about a recession right now,

because not enough bad things have happened. Right, acknowledging that a recession is a systemic thing.

“But I guess how much more bad do we need, you know?”

I mean, it feels like we've been through enough. I guess maybe the way that I was trying to convey was that there are bad things happening in our economy that are relatively contained to a small amount of people. The unemployment rate right now is low, but the unemployment. The share of people who have been unemployed six months or longer is rising.

It's hired now that it was for many recessions in our history.

It's the first time it's ever risen outside of a recession.

So it's a localized pain that the economy hasn't gotten bad enough for enough people for a recession to be declared. But the point of the piece was to really point out whether you need the title of a recession for that pain to matter more. And unfortunately, I think we do.

Yeah, that sadly will have to be a conversation for another day,

She's the host of the Optimistic Economy podcast.

You ought to check it out. Thanks for your time. Thank you for having me.

“In stocks today, the relief rally continued.”

10 U.S. though the ceasefire does appear to be oil traders. We'll have the details when we do the numbers. The truth of it is, whatever the headlines are saying about a ceasefire or whether the straight-of-horse moves is opened or closed, spoiler alert, it's closed. The petroleum price shock we are currently enjoying is going to last for a while.

Months easy. And while straight-up oil and gas are the primary players, of course, so much more

passes through the straight that it's critical for the way this and the global economy

work. Just one word. Plastics. Here's Marketplace's Elizabeth Trouble. Giant machines are spread across a gray manufacturing floor.

Here at Texas injection molding in southeast Houston, where plastic is heated and molded into all sorts of random widgets. Jeff Alplagate founded the company. The plastic pellets are coming in, they're feeding into the current barrel. On the floor today, the machines are making things like medical grade containers for

syringes and bait buckets for exterminators. Alplagate walks me through how a red plastic sign is made. And you're going to see this is this grew advancing forward, escorting the plastic into the mold. And so now it is complete.

The mold is filled.

“What is doing circulating about 55 degree water to chill the part?”

It's ready to come out. The robot will come in and we'll pick the parts out of there. Next, we walk into a room filled with giant containers of different types of the plastic pellets he uses. Some are made from crude oil, some from natural gas.

When you think of the commodity plastic, say what your prison is made out of or whatever, this is polyethylene. I stick my hand in and grab a fist of polyethylene bees. Plastics like this are in tighter supply around the world. And are getting more and more expensive.

If the price was say 75 cents, you know, we're seeing 10 to 20 cents per pound increases on some of those. So it's a pretty significant percentage. Plastics make up roughly half of his input costs.

“He says they use about 8 million pounds of it each year.”

The largest input cost to the manufacturing process is the material.

And so when your material goes up, 10 or 15 percent, it puts a real squeeze on you really quick.

Around the world commodity great plastic prices are up says our Greenwood who covers plastics and petrochemicals for ICIS. Polyethylene and polypropylene. Those are used in packaging. US contract prices or March rose by nearly 20 percent. If you look at plastic used in beverage bottles, nearly 15 percent.

Part of the increase has to do with the rising cost of oil and natural gas around the world. And the middle east is a big producer of plastics and chemicals. And those plants are on the wrong side of the straight. So when all of a sudden 25 percent of the plastic exports aren't available to global markets, you have the same amount of demand competing for smaller pieces of the pie.

Plastic and petrochemical price hikes are especially hitting sectors like food and beverage, packaging and pharmaceutical manufacturing. Says Tony Bennett with the Texas Association of Manufacturers. If it goes for an entire quarter three months, then you're going to say, you know, significant slowing of the economy. And consumers being very skittish and businesses backing off. Now many widgets they put out on the truck for delivery.

Since some costs could get passed on, some may have to be absorbed by manufacturers to not lose customers in the long term. So it's tricky, it's very tricky. Back at Texas injection molding, Jeff Applegate is navigating that trickiness. Because if there's an increase in raw material costs, then we've got to pass that on. They also have to prepare and have that time to be able to work with their customers.

The industry is bracing for supply cost increases and figuring out how to keep their business going. In Houston, Texas, I'm Elizabeth Troval for Marketplace. As Katherine Ann Edwards and I were talking about just a couple of minutes ago, the Bureau of Economic Analysis

The headline number I mentioned for 10% increase month on month, 2.8% year over year.

“You strip out those always volatile food and energy prices.”

The annual increase is an even 3% for the core, which comes as disposable income ticked down. And yet, consumers were still somehow spending money in this economy. Daniel Ackerman has our consumer check in. Stop me if you've heard this one before.

The American consumer has been remarkably resilient given a whole set of incredible shocks that have occurred over the last year.

Randy Crosnar at the University of Chicago says today's report suggests that resilience has continued, at least through February. The consumer is sort of moving along, not strongly, not weekly, continuing to buy goods. Vehicle sales for one rose in February, but the uptick in spending was largely a product of higher prices. Not household financial strength, says to on Nguyen an economist with RSM. The short stories the consumer says starting to feel the squeeze.

Personal savings were down in February as disposable income fell. Though Nguyen says that could be a blip. Some of that was just the weather. February was cold and stormy for the East Coast, which may have hurt hiring. Nguyen says there could be a bounce back in March.

And speaking of the labor market? Unemployment rates are still low by historical standards.

“Shonsnaith at the University of Central Florida says that's a key indicator.”

The foundation, the cornerstone of consumer behavior is a labor market. But even if consumers are able to keep their jobs, those paychecks may not go as far in the months ahead. Nancy Vandenhausen with Oxford Economics reminds us that today's PCE report covers the month just before the war in Iran. We're expecting some pretty nasty looking inflation reports for March and probably April as well. She says those price increases will pop up in the March consumer price index, which comes out tomorrow morning.

I'm Daniel Akerman for Marketplace. I know it seems like a longer ago than this, but it was a mere six or so weeks ago that the average rate on a 30 year fixed rate mortgage

dipped below six percent for the first time in years 5.98 percent if you're curious.

And then, well, you know what then? The mortgage market reacted accordingly. One manifestation of which is that the number of mortgage applications have gotten whack to as have, say the good people at Redfin, pending home sales overall.

“So we asked Marketplace to Carl Ahaviard to call some real estate agents around the country to see how all of this is playing out.”

Denise Moore with Bradford real estate in Nashville prefers working with home buyers. But this spring, fewer of them are ready to make a purchase. I still have a conversation, so it's not like they don't have the interest and they're not still anticipating jumping in and making a real estate purchase. They're just lowered and make that decision. So while she's less busy with showings and listings, she's spending more time on marketing education.

Meeting with clients. To generate business into make sure I'm ready when the market does table us. In Miami, where the Redfin data safe pending sales are up year over year, Joanna Jimenez of the Opus group at Compass says, "The single family home market, the spring has been, you know, the best spring we've had in probably the last two, three years."

She says she's noticed buyers who had been on pause are coming back out. And some might not be worried about higher mortgage interest rates. If you go to some neighborhoods, it's 50% of the transactions are cash. Some neighborhoods as low as 25% and some are even as high as 70%. In the greater Seattle area, Michael Orbino of Team Foster at Compass says the mortgage interest rates aren't discouraging buyers altogether.

But those buyers are getting choosier. All of a sudden, the tolerance for road noise, the tolerance for a poor floor plan. The tolerance for an outdated kitchen goes down. Because they think, like, look, if I'm going to pay top dollar and have what I perceive as a high interest rate, I want the best of the best.

He says buyers who used to look at 10 to 15 houses now want to see 25 to 30, which means that he and his team are working seven days a week. Twice as much effort to maintain their typical volume. I'm Carla Havier for Marketplace. [Music]

Coming up, we care what the weather is. We don't have control over it. It's an energy story, actually. But first, sure why not. Let's do the numbers.

[Music] Down dust rose up to 75 today,

16 percent, 48,185 that has that get at 187,810 percent, 22,822, the S&P 500 lifted 41,610 percent, 68 and 24.

I don't know. I don't know. I don't know. Bonds up, you'll down the 10 year T note down, 4.28 percent. You're listening to Marketplace.

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More at QuickBooks.com/workforce. That's QuickBooks.com/workforce. This is Marketplace. I'm Kai Rizdong. We've been talking about energy prices a lot of late. The world of oil specifically as the date to the volatility thereof is front and center.

But if we pull back a bit to well before this war and its energy shock, a completely different slice of our energy economy has been enjoying something of a comeback. That's why earlier this week, I found myself at a low rise warehouse style office building in El Segundo, California, right near LAX. Hello. Hey Doug Kai Rizdong. Nice to see you. Hi. Nice to see you.

Nuclear energy is the topic to enjoy billions of dollars in investment are going into companies in this industry that are developing new nuclear technology that's in super high demand. In no small part because of AI and data centers and the ever-increasing amount of power this economy is going to need. Tell us who you are and where we are. Yeah. Doug Bernard on the CEO of Radiant, we're in El Segundo in our headquarters facility. We've been here about two years. We're working on building nuclear reactors that you can actually make an factory.

Most nuclear reactors aren't made this way. Nor is our economy using enough of them for them to be built and sold at scale yet. The 150-ish people who work here at Radiant engineers of all kinds for the most part are trying to change that. Describe for me the thing you're trying to but you are going to build my trying, sorry. You've got to build it.

Yeah. So we're building a for our first reactor which is a it's a one megawatt electric generator.

Layperson, sirms, what does that mean? One megawatt. One megawatt. It's enough power for about a thousand homes. Okay. All right. So we're building one of those. Yeah. And in a couple of months we'll have it finished being built here. It'll ship out to Idaho National Laboratory and then we'll turn on a nuclear reactor there. Idaho National Laboratory is part of the Department of Energy. It's been involved with nuclear research for decades now.

Radiant's microwave reactor was selected by the federal government for testing there where it'll be put through its paces to make sure it works the way Doug and his team are hoping.

“The one megawatt reactor you're building. What are you going to do with it? Why are you building it?”

Yeah. I'm really excited actually. Normally to build a reactor you dig a really big hole in the ground and you take maybe a decade. You know, it's five to 15 years sort of depends. And a couple of gazillion dollars. Yeah. Yeah. Absolutely. And sometimes two or three times as many gazillion as you thought. Right. Right. Right. And so we're not doing anything like that. So that's about a thousand times larger also. Right.

Reactor that size is power for a million homes. Right. That's their grid scale. Right. Is that the deal? Exactly.

Yeah. And at grid scale your challenge is to compete with the lowest cost electricity with solar, with natural gas with all these other power sources going on to the grid. And what we're doing is making this reactor you can make an a factory, which means you can move it somewhere. And so our customers are those who, you know, want to operate it at the hospital or a military base or a data center somewhere. And the grid isn't there yet. Right. Or is not reliable enough. Show me stuff.

What are you going to show me? There's a whole bunch of stuff. I think.

“How about the students who come here to do not touch?”

Yeah. Yeah. So this is actually nuclear grade graphite. I am not going to get into the science. Trust me. You do not want that. Doug did tell me that that graphite is eventually going to surround the reactor core. We have this the upper dome of the pressure vessel here. It's about seven feet in diameter small in the world of nuclear.

But what they're building here is designed to fit in a shipping container. So obviously oil and energy costs right now because of the news or a big deal. I guess I do wonder where your geopolitical sensitivities are, right? What's your, what's your tolerance level, right? Because the more expensive oil gets, the better this thing becomes.

Right? Yeah.

I mean, you think about that, you must.

Certainly. I mean, we care what the weather is. We don't have control over it. For some of our customers, the just the volatility of those things is a selling point. Right. The fact that oil can suddenly spike if you had bought a reactor for our system at last about five years.

So you're buying a five years of stable known energy costs. So let's say I'm, I'm on a farm in Iowa or I'm a software developer in San Francisco or whatever. Just a random person in this economy. Make me care about this. Do I need to?

Yeah, I think you do.

“Because people, honestly, people are going to say, oh my god, nuclear reactors right next to my farm”

in, at this data center. Yeah.

I mean, possibly, the thing is that I don't, I don't need to sell a huge number of these and make them go everywhere.

It's really for people who who need it, who want to have a hospital that when the grid goes out, they don't have a room filled with 12 diesel generators that they're going to just pump a bunch of exhaust cubes out into the environment with. This is, this is a way to do power. And, you know, all of the nuclear material, all the uranium, we didn't make it.

It's all here. It's on earth. It's completely natural. It's under your feet. If you don't use it, it actually just decays away within the earth.

When it does that, it produces rate on gas that goes into people's basements. So, so, not using the nuclear fuel that's here is about as foolish as not holding up a solar panel when the sun is shining. It's free energy. I'd ride there. I'd get all that.

But here we get back to the people screaming at me on the radio saying, "Oh, come on, nuclear, right?" I think that there's a association with nuclear weapons and nuclear energy. I think there's a association with three mile island and Fukushima.

“And that's what people were worried about.”

And I don't want to go down to the nuclear catastrophe thing, right? Because, look, you guys are working on the safety thing and I appreciate that. But, but, you know, if this is part of the energy future, yeah, I think people have to understand what's going on. Sure.

For a large reactor, typically a utility chooses to build that. The utility is a public service, right? The utility has to get approval from the citizens who are going to have to increase the fees that they're paying. This product doesn't do that. So, we sell the businesses.

We sell commercially. A data center company, Equinix, could buy a reactor, set it down somewhere, use it for clean power. You're not going to feel it in your pocket. Directly like you will if some utility chooses to build. Hopefully, if Equinix buys one of these things,

it's not going to send electricity raise through the roof, right? I mean, the big thing with data centers now is, oh my god, electricity bills are going up. Yeah. What it would do is it would offset their need to have diesel generators. There are these rooms filled with diesel generators that are sitting and waiting to be used.

And so, this is really what it would replace. It would replace this thing that people don't really see, but they do breathe the emissions from it. I should say here that Equinix, the data center company we were talking about, has already pre-ordered 20 of Radiance Microwave reactors.

Radiance also got to deal with the Defense Innovation Unit and the Air Force to deliver one of its micro-oreactors to an American military base. You know, you've got some military contracts already. You're working that way. The Trump administration is very pro-nuclear.

“It doesn't care much for green energy, but nuclear, right?”

He's all on board. How important is government involvement in government? If not backing, then certainly support to this budget. Yeah, government support is extremely important.

It has been and will be always, I think, for nuclear.

We're using an enrichment level that's about a 20% enrichment level. And so we rely on the government to help get us fuel from stockpiles. Maybe the most important thing. The other is that there's a dome facility at Ido National Lab. So it's a great big 80-foot diameter dome that we can insert the reactor into.

And then close it all up from the outside and then run your test. Yeah, and it's actually a sealed environment. And there are these filters so that you can see if there's anything radioactive released at all. Right. So it's really great because fuel on the testing facilities are the two most important.

All right. Well, you want to head to the factory floor. Yeah, sorry. I'm just looking at that whiteboard with all kinds of weird calculations on them, man. That's it. Looks like heat flux from the core. Yes, that's what it looks like.

Uh-huh. Sure. I'm going to history and probably say I got, man. July is when Doug and his team are shooting to have their micro-reactor in Ido for testing. And then commercial production as soon as they can after that. This final note on the way out today, you know how the president and his administration keep saying.

Well, it is true that we do pump a lot of oil.

“It is also true, though, that oil trades globally, which is why this item in the financial times caught my eye.”

Data from the commodities research firm Kepler showing US crude exports are set to hit an all-time high this month.

As mostly Asian countries scramble for supplies to replace what is locked in the Gulf.

“There is one Kepler analyst said in this is a quote,”

"And our motto of empty oil tankers headed our way." Our daily production team includes Olivia Burdett and De Corbin Maria Hallenhorst, Sarah Leeson, Sean McHenry, Michaela Seahe,

“and Sophia Terendio Will story is the supervising senior producer.”

And I'm Kai Rizdall, we will see you tomorrow, everybody. This is APN. I'm Maggie Smith, host of The Slowdown, where each morning I invite you to step away from your to-do list, and spend a few minutes with a moment of reflection and a poem from both beloved and emerging voices. Make it part of your morning ritual on a walk, over breakfast, or while you get ready for the day.

It's a daily moment of pause in a world that never stops moving.

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