Feeling down on the farm

Oh, for a calmer time, huh? From American Public Media, this is Marketplace. (upbeat music) In Los Angeles, I'm Kyri Rizdoll. It is Friday.

Today, this one is the 27th of March.

Good as always to have you along, everybody.

One does have a certain yearning. Does one not, for the days and weeks when the news of this economy was not this. These are obviously not, though, the days and weeks we are living in, so we are going to make sense of it

as best we can. David Gurah is at Bloomberg, Courtney Brown, is at Axiosay YouTube. - Hey, Kyri. - Hey, Kyri.

- Courtney, let me begin with you. And I'll begin on Monday of this week on this program.

“I said, and I believe I'm quoting myself here,”

"The Markets are an idiot. "They were fallen for every head fake coming out "of a White House and coming out of the president "and his advisors about what was going to happen "with this war and what the economic impacts were going to be."

And I wonder if five days later, now four days later on a Friday afternoon, given the day's action, maybe they're rising up. - Which markets were you talking about? Were you excluding the bond market from this week?

- Well, wait, wait, wait, wait, wait, wait. Hang on, we're gonna get the bonds in a minute. I wanna talk like equities and oil on all that. I'm coming back a month, so go with the original. - I think that's right, I think we saw some,

you know, the equities under pressure today. I think the stock market is kind of like that very hyper. You know, college student, that's not exactly focused on what's happening right in front of them, I think, that, you know, there is a war going on

and every economist I talked to and have talked to this week.

“The big question is, how long is this conflict going to last?”

Is it going to widen, is it going to escalate? What are going to be the implications for inflation? I mean, there's concerns out there and depending on which day you're looking at the stock market, you may or may not see those concerns reflected in equities, right?

- Absolutely, so David, let me just point out here and this is not my observation, it's pretty much everybody's. Lots of talk about an oil shock and what that's going to mean. It has to be said, this is not an oil shock, it is an everything shock, yes?

- Yes, absolutely, and I was talking with Amos Hockstein, who was an advisor to President Biden on economic issues, energy issues and he said, the market is pricing and risk at this moment, but they haven't priced in the kind of disruption that we're getting, that we really haven't seen something like this

in an extremely long period of time. - You know, I think about the move that we saw on the equity markets. I think it probably stems from the fact that you've had a president who has felt that he has a lot of determinism over the course of this conflict, he thinks that he can set a deadline,

he thinks that he can end this war when he wants to end this war. We even saw that pronouncement earlier this week, he was going to extend a pause on attacking power plants. Low Israel when it hadn't did that today, I think it's an indication that there are limits

to what he's able to do in terms of shaping the trajectory of this conflict, and while he's been somewhat successful, I think kind of managing the equity markets

over the course of the first few weeks of this conflict,

there's a reaction function that he has been unable to manage, and that's oil prices and gas prices, and that's only gone in one direction since the start of this war. And so you're right, it's trickling across the economy. There were of course the first order effects,

we see those at the gas pump, but if you're pumping gas or diesel, but then there were all these other effects, so I think everyone is now really having to reckon with the fact that transportation costs are going to go up capital costs for businesses or going to go up fertilizer is going to be more expensive.

Consumer spending is bound to be impacted by all of this, and we're going to see kind of broader supply chain issues. So I think that there is, if not a reckoning at this point, a recognition of the fact that this duration variable is really something that's going to be,

squishier in squishier is all of this goes on, and that that's bound to have this adverse effect on markets and on all of us. - Yeah, and honestly, I forget whether it was Sun Zoo or Klaus of it, but one of them said best strategy in the world

never survives first contact with the enemy,

and the Iranians get a vote here on all of these things that are going to happen. - Courtney Brown, the bond market. I want you to explain to me why you think the bond marks are a little different,

“and you need to define a term premium, please.”

- Okay, why I think the bond market is different. I've always just respected the bond market more because I just think bond investors are smarter. I hope that's a satisfying answer. I think they, they, everyone is so happy

to be a better person than I let us record it. - Yeah, yeah, that's right, that's right, that's right. - No, I think there are considerations in the long term that I think play out in the bond market in a different way than in the stock market.

I think this war is a perfect example of that. We are seeing that yields are going up,

There is kind of this uptick and inflation expectations, but there's also something called the term premium, which basically means that bond investors are demanding more payment for, you know, the, you know, the, the, the,

the term, the opportunity to lend, yeah, exactly, to learn the, to lend the government money.

“And so I think what's interesting this week”

is that there seems to be concerns about the government's fiscal situation.

I mean, there are always concerns,

but now there seems to be more concerns about, you know, how, how, how much money the government is going to have to spend on this war. And we learn in a great fiscal situation before and is that fiscal situation going to be a worse?

And I think that's the big question on bond investors, mind these days. - Right, so David, I'm gonna play a piece of tape of the president here in just a second. And I will preface it by saying,

in this very specific case, you do have to hand it to the president. Here's that tape. - I thought Franklin, I thought the old prices would go up more and I thought the stock market would go down more.

- The guy is right, right? - Yes, he is right, but I don't think that we've seen the end of this story. So so maybe he thought that in the near term,

“but again, I think as people get a grasp of sort of”

what's happening here and the kind of displacement that's taking place, we're bound to see more of a reaction than maybe he is kind of cheerfully acknowledging there in those comments. Look, I think we saw from a handful of policymakers

over the course of this week, all around the world, them reckoning with the fact that this is not a war that's gonna be measured in weeks, despite what the Secretary of State said today when he was in Europe, he does feel like this

is gonna last a lot longer. And so those policymakers are having to make preparations for living in a world in which oil is above $100 a barrel going forward and the all the ramifications that's gonna have.

- Courtney, you get to go first on this question, David,

you get to think about your answer 'cause it's gonna be the same one for the both of you. What are you looking, what's the tail gonna be for, let me back up for a minute. There is going to be lasting economic damage from this war.

That's just gonna happen. What are each of you looking for to know that that is coming, Courtney? - I think that there are concerns, in my conversations this week,

something that kept coming up is that, yes, there are a bunch of goods stuck essentially in the street of Formus and that's going to have ripple effects for the economy, but the big thing that folks were bringing up to me this week

was what is the energy infrastructure situation looking like. If there is huge damage to actual energy infrastructure in the Middle East,

which we've already started to see,

like there is no on-off switch, right? Like it will take time to build back that infrastructure whether it be a liquified natural gas facility or what have you. Those are the types of things that everything else to equal.

There will be less supply of a certain commodity while whatever infrastructure is being built back up.

“So what is the lasting damage from those types of effects?”

I think that's one of the big questions. - David, 30 seconds, you get the last word. - Yeah, for me, I think it's indicators of consumer behavior, how they're feeling about this. We got an indication of that today from the University of Michigan survey.

That's Simon Slidwith, three month low, and we saw expectations for inflation rising among those who were surveyed. I think those data points, both soft and hard data points are going to tell us

how this is resonating and affecting American folks around the world. - Yeah, more on that consumer sentiment number coming from Nova Safa in just a couple of minutes. David Garret at Bloomberg.

It's Courtney Brown at Axios, thanks you too. - Thank you. - Thanks, guys. - Have a nice weekend. Weekends, speaking of them, the past four weeks or so,

have been, oh, active shall we say on the news front. Traders today decided they did not want to get stuck holding that bag. We will have the details when we do the numbers. (upbeat music)

(upbeat music) - There is nothing special about tomorrow, really March of 28th, except that it's four weeks to the day since the United States and Israel started waging

their war on a run. Obviously, those in harm's way, everyone in harm's way in the Middle East are top of mind. But the American and global economies also look very different now than they did a month ago.

Marketplace's Mitchell Hartman has more. What a difference, a war mix. - I started with the proposition that there must be some aspect of our big broad economy

But I was disappointed.

- The impact so far has been very negative.

There's no upside to this. There's nothing but downside. - Mark Zandy is chief economist at Moody's Analytics. - Obviously, we're paying a lot more for gasoline. Before all this, we were paying less than $3 a gallon.

Now we're paying four in the direction of travel as pretty disconcerting. - Inflation pressure is already reflected in sharply rising interest rates.

“- If you want to go out and get a mortgage,”

you have to pay six and a half percent on a three-year fix. That's up by the half a point. If your business, I wouldn't count on any more rate cuts by the Federal Reserve. - Another place, feeling the impact after four weeks of war,

the stock market, Sam Stovall, chief investment strategist, at CFRA Research. - The market has taken a one-two punch and is staggering like an aging boxer. With all of the major indexes, S&P 500,

Dow and NASDAQ all down sharply. Though that doesn't mean every sector suffering,

energy stocks are up to 25 percent.

And says Stovall. - There's an old saying that when the going gets tough, the tough goat eating, smoking and drinking. So you have consumer staples, food, beverage tobacco, are down, but less than 1 percent.

- So far, we haven't seen much impact on the job market, though it was already pretty weak. It says Paul Christopher at the Wells Farco Investment Institute. - The job growth numbers have been some of the lowest I've ever seen, but still the unemployment claims are also low.

- Unemployment is likely to rise, says Moody's Mark Zandy, as employers feel the pain of soaring energy prices and slower growth. Zandy sums up the current state of the economy this way. - So far, the damage is manageable, but it's mounting.

Is he talking the R word on the horizon?

“- Yeah, I think recessions are real risk.”

If the war and all its disruptions continue for another month, I'm Mitchell Hartman for Marketplace. (upbeat music) - All right, here's another four weeks of war marker for this economy, girl alluded to this,

good people at the University of Michigan, released their latest survey of consumer sentiment today. I guess he did more than a lead to it, right? He flat out said it. There was a 6% decline this month, about which, yes,

I know what consumers have been saying that we are cranky and what we have been doing, still spending, have not really lined up the past couple of years. But here me out, because this new data shows sentiment felt

even more among higher income consumers, though same consumers who've been mostly propin up the economy. Also, in related, we are all thinking inflation's gonna be goin' up. Marketplace is Nova Sofo has today's,

oh, that can't be good, explainer.

“- Re-wine, to just before the US and Israel launched”

strikes on Iran and consumer sentiment was improving. - Even in the couple of weeks right before the military conflict began, that trend was continuing. Joenshu runs the University of Michigan's consumer sentiment survey.

She saw sharp trend reversal after the bombs started falling. - Any gains that we saw in the previous weeks were lost in the weeks thereafter? - By the time the survey closed on March 23rd, overall sentiment was down 6%.

- One source of positive news from this release, that the major deterioration was in short run expectations. - Meaning, consumers expect the Iran conflict to resolve relatively quickly. And that may be why for now, consumer behavior

has not changed much. Carnival cruise lines, for example, just reported banner bookings. - We are definitely seeing upper income households powering the economy forward, in terms of travel

and dining and a lot of discretionary spending. - Bank rate analyst Ted Rossman is still concerned, though, because the University of Michigan's sentiment survey showed a 9% drop among higher income consumers threatening the K-shaped economy.

- What is potentially new is that if this situation is going to squeeze even people at the upper part of the K,

that ultimately could be recessionary.

- Eventually, for now, the economy is still strong, Rossman says. Another warning sign is the rise in consumers' inflation expectations, from 3.4 to 3.8% a year from now. Neil Mahoney is an economist at Stanford.

- Consumers were already pretty discouraged about the state of the economy. And rising gas prices, coupled with, we're going to see rising, airline prices, and food prices over the course of the year,

is just going to make things worse. - Mahoney says some of this pain is already baked in. He expects consumer sentiment to sour further. Next month, I'm Nova Soffel, former marketplace. (upbeat music)

- Coming up, gotta find new traditions, I guess.

- Maybe that's what it'll be. We'll be doing gig work in the future and I'm ahead of the game. - Good to have Ed Starn, I guess.

First though, let's do the numbers.

(upbeat music)

“- Now in Dustrault's Dive, seven hundred and ninety three points”

today, one and seven tenth percent finished at 45,166 to the blue chips. The Nasdaq plunged 459 points, that is 2.2% 20,948. The S&P 500, S&P 108 points, one and seven tenths percent there as well, 63 and 68.

For the five days gone by, the Dow declined nine tenths percent the Nasdaq retreated 3.2% the S&P 500 gave back to and one tenth of one percent. Nova Salfo was talking about upper income consumers. So here's some stocks connected to discretionary spending

cruise line operator, Carnival Corporation, which reported earnings today that beat expectations of Nova said, fell, four and three tenths of one percent door dash. Slowed three and a half percent,

Darden restaurants, they own the upscale change

of Ruth's crisis, stake house in the capital grill,

sank three and two tenths of one percent on the day today. Bond prices, why they fell, thanks very much for asking Courtney was talking about this. The yield on the 10 year keynote does rose four point

“four three percent on the 10 year, and you are listening”

to Marketplace. This is Marketplace, I'm Kyle Rosedong. Every time I talk to a farmer on this program, they remind me, gently, to be sure, that they are price takers, not price makers.

They don't get to decide what their crops sell for, and farm math right now. I mean, 2026 is shaping up to be pretty rough. They're paying more for the inputs they need, like seed and fertilizer and equipment,

and at the same time, many of them are getting less for the crops that they grow because President Trump's tariffs have wrecked their export markets. The American Farm Bureau Federation says a growing number of farmers, in fact, just aren't going to be able

to afford to plant this year. Marketplace is Kaley Wells, took a road trip to talk farm balance sheets. Chris Gibbs already knows he's going to be in the red this year. Again, he's a farmer in Maplewood.

- That's West Central Ohio.

“Oh, we farm and own and operate 568 acres.”

- Growing mostly soybeans and corn, which get turned into vegetable oil, livestock feed, and corn syrup, plus a bit of wheat, and a few dozen cattle. In the driveway, he's got a semi-truck hauling 1,000 bushels of corn, ready to go to Dayton, Ohio tomorrow

to get turned into syrup. A bunch of his costs have gone up this year. Since the war in the Middle East started, the price of diesel is up by more than 30%. Gibbs uses a lot, especially as he enters planting season.

Fertilizer has gotten more expensive, too. - You're rea prior to the war with $665 a ton. Today, it's $852 a ton. - Tariffs are making things more expensive, too. His equipment has four and made parts.

Take his grain head, for example, which harvests soybeans and wheat. - This piece of John, your equipment, made in Moline, Illinois, doesn't get any more American in an apple pie than that.

But if you open it up. - He points to a casting, a pulley. - You can see right here. - Both made in China, just like the drive chain he replaced on his corn planter last year.

- What do you believe farmers make things out of? Steel aluminum and lumber, which have been tariff recently. So, when you tariff China, and when you tariff are trading partners, that hurts me. Because that makes these parts more expensive.

- And while his costs are up, his sale price is down. Because of the president's import taxes, countries aren't buying U.S. crops like they used to. He's also got corn left over from last year. And he's got to take whatever prices buyer offers,

just like every other farmer. - They kind of get stuck in the middle a lot of the times. - Economist Faith Param at the American Farm Bureau Federation says most corn, wheat, and soybean farmers haven't had a profitable year since 2023.

- We've seen rising number of farm closures. We've also seen some rising number of farm bankruptcies. - Gibbs isn't that bad off yet, but he did delay buying fertilizer this year. Melinda Whitten with the Ohio Agribusness Association says,

lots of farmers have been holding off. - They was talking with an ag retailer the other days, like my warehouse is still full. And that's not common for this time of year. - Gibbs expects to lose $100 for every acre he plants this year.

He's been losing money since 2023. I asked him how much longer he can operate in a loss. - Apparently we're gonna find out. - The Trump administration has sent out billions and bridge payments to farmers

to get them through this year's harvest season. A program that Secretary of Agriculture Brooke Rollins said shows the quote,

"President Trump continues to put farmers first.

Farmer Chris Gibbs does not like being reliant on government aid." I hate it, I hate it, I hate it. - But in the past two months, he's changed his stance.

Because they've got me in this situation.

The price is a diesel fuel's up. That's gonna cost me money. We're not making any trade to China. That's gonna cost me money. Our nitrogen fertilizers have gone up

because of the Iran war. That's gonna cost me money. By God, you owe me money. - Economist Faith Parham at the American Farm Bureau Federation says even with a bailout from Washington,

most corn, wheat, and soybean farmers will still lose money this year. In Maplewood, Ohio, I'm Kaylee Wells from Marketplace. (upbeat music)

“- We'll get the March jobs important next Friday”

update on the rate of course,

as well as how many jobs this economy added or lost.

Last time around February 92,000 jobs lost and for anybody entering the labor market at this particular moment, that is not encouraging sign. Here's today's installment of our series, my economy. - My name is Virgil Warren.

I would consider myself a working artist. I'm also a bartender and a cook. I am currently at my apartment in Brooklyn with my cat, Munchichi. I originally spent my entire life in the Bay Area,

but then COVID came around and my family kind of splintered away from the Bay Area. And just not really understanding what my next step would be. I applied to all of these graduate programs in New York. I got accepted into NYU.

I got a master's in studio art

and I wanted to move into the art world in New York.

“And since then, I've just been kind of working”

my way towards getting there. - Navigating the job market post graduation has been an interesting task. I have to accept any job that is available to me. Even if it's not necessarily the job, I thought it was going to be because there's no sense of consistency.

There's very few full-time positions. A lot of these positions, they don't like to go over 31 hours a week because then they would have to offer health insurance or benefits of some kind. And even then, you're stuck with this weird thing,

where you have less hours, but still about like too many hours to work other positions. I find that the more that you can hit the actual people who are posting these listings directly, you get a much higher response rate.

I get a lot more job opportunities off of Instagram and Craigslist than I do anything else. (upbeat music) And the level of competition, the fact that I'm not competing with just another 25 year olds,

I'm competing with 45 year olds with 13 years of experience and a master's and like I did an H&M interview to be a visual merchandiser and there was 60 people in the room of all ages and experience levels.

I've probably applied to like, man, it must have been at least 500 jobs that are just for like good applications, you know, like of those are probably interviewed for like 20 or 30 full-time positions.

It used to be these paths that existed for life to just not be easy, but you could do it, you know? It was assured to agree, but even those traditional paths are disappearing. Gotta find new traditions, I guess.

I don't know.

“Maybe that's what I don't know what will be.”

Well, we'll be doing gig work in the future and I'm ahead of the game. That's when I'm hoping. (upbeat music) Virgil Warren there, a working artist with some side hustles

trying to get by in New York's gig economy. Take a minute if you are so inclined and do let us know what's going on with you. Marketplace.org/myaccount. (upbeat music)

This final note on the way out today in one in which rather one is required to quote article one section nine clause seven of the Constitution of the United States to which no money shall be drawn from the treasury but in consequence of appropriations made by law.

Told you that, so I could tell you this. President Trump signed an executive order today directing DHS to pay TSA officers. He just ordered it and no law, no appropriation, no nothing. (upbeat music)

Our theme music was composed by BJ Leader and Marketplace executive producers, Nancy Fargali. Join Griffith is the Chief Content Officer. Neal Scarborough's Vice President General Manager. And I'm Kyle Rizdahl, have some great weekend everybody.

We'll see you back here on Monday, all right? (upbeat music) This is APM.

I'm Rizdahl, and this week on my podcast,

this is uncomfortable.

“We're looking at the rise of prediction markets”

where you can bet on everything from sports

and pop culture to political headlines.

“A multi-billion dollar industry that's growing at a time”

when more Americans are questioning the traditional paths

to wealth.

“- I feel like the kind of cool and cool American dream”

is sort of breaking down like how could I possibly, you know, buy a home, be able to afford having a family. And then they're also going online and seeing people that are claiming to make all this money doing these alternatives to a past wealth.

- Be sure to listen to this week's episode of This Is Uncomfortable on your favorite podcast app.