Navigating long-term unemployment

Inflation is going up in our mood. Well, you could say that's going down.

“From American Public Media, this is Marketplace.”

[MUSIC] From Oregon Public Broadcasting and Portland, I'm an email phrase in Forkai, Rizdal. It is Friday, April 10th, good to have you with us. You've probably seen or heard the headline by now.

Inflation is at its highest level in nearly two years. According to the Labor Department, consumer prices in March were up 3.3% from a year ago. Tell me, since of these numbers and a lot more, let's jump into our Friday wrap. I'm joined by City Bready from MSNow and Rachel Seagull with the Washington Post. Hey, you too.

Hi, Rizdal. Hi, Rizdal. All right, let's talk inflation. Y'all read the inflation report this morning. In one sentence, or maybe just in a few words, tell us what were the vibes.

City Bready, you go first.

This was not pretty, obviously inflation going up this high, highest, in. I think we lost you there. How about you, Rachel, and you go? Yeah, I have a feeling that the heat was just about to get into this. But I think some of the adjectives that came up might help us get a sense of how the inflation

report came across, there were a lot of words like worst and biggest and largest monthly gain tossed around, and those are often not the kinds of words you want to see pop up when you're talking about the prices that people are feeling day in and day out. It wasn't a huge surprise that a lot of that was driven by energy costs, which is something that people are especially feeling in their pocketbooks.

But I think that was a quick sense of the move that the report delivered today. That sounds about right. Are you back on the line? All right, yeah.

“Oh, great. What were your, I think we lost you there?”

What were your first reactions?

What are the vibes of the report? Yeah, it's, it's obviously concerning to see inflation shoot up less, but we've been expecting this for a while. The last few weeks have been pretty ugly for what people have been seeing at the pump. But everything obviously depends on how long the world lasts and whether we see a correction

in oil prices and gasoline prices, and if that happens, then this could just be a blip. Yeah. Rachel, there was this moment, you know, a year or so ago where felt like the Fed was close to achieving that soft landing. But now, I don't know, look at things are looking pretty rough.

Do we think that 2% target is just a, you know, far off dream at this point? Yeah, I mean, we're now coming on on what five years of inflation being above the Fed's target. And it's not for lack of trying to get there by any means, but it is hard to envision a world where the Fed is able to keep cutting if inflation is, you know, a, moving in the wrong direction and b, just not making the kind of progress that they want to be seeing.

And so it doesn't mean that, you know, that kind of soft landing is impossible to achieve. But here we are again, talking about whether this kind of increase is a blip. If it's going to start to see through, you know, broader inflation is opposed to just staying

more confined to oil markets and that basically leaves them in the same kind of conundrum

that they've had for a long time about balancing the risks that can pile up in the labor market side and can pile up on the inflation side by quickly. Right. Well, so deep.

“I mean, is there anything the Fed can do while they're looking at these numbers?”

Like, how much control do we think the Fed really has these days? The Fed has very little control, obviously, over the issue of global oil markets and they certainly have no control over a war. They do have the ability to look through this. The Fed chair, Jay Powell, has been clear that a single surge in gasoline prices, that's

a one-time increase. That's not persistent inflation and they are so far treating it that way. What we don't know, of course, is how long this is going to last. We've had some White House officials today out there expressing some doubt about whether this rate of war moves is going to open up all that quickly, maybe a couple of months.

And that becomes a much bigger problem. It becomes perhaps even more of a growth problem for the Fed than an inflation problem in the near term with consumers being stretched and unable to stay afloat. So there are a lot of cross currents here for the Fed to be worried about. Well, let's talk more about the consumers.

So the consumer sentiment came out today, not so great at a record low, not a huge surprise is there that people are feeling pessimistic. At the same time, inflation expectations, they're creeping up. Rachel, tell us what people are actually seeing out there that's shaping the mood right now.

I mean, you know, we've seen this before after, you know, Russia invaded Ukraine that gas prices ended up being a billboard for the way the economy is fairing, you know, and when you see

day after day after day, that has a real psychological impact on top of the impact when people are actually filling up with the pump and having to insert their credit card. And we know that people, you know, react with their vote on this, affordability, especially when it came to the basics, like housing costs and gas and food, played a major role in a how people felt and be how people voted in the last election.

“And I think we can expect that that is going to remain a really prevalent part of the”

midterm conversation unless people start to feel real relief, not just in the current price level, but something that feels like it's actually going to stick. Yeah.

Well, you know, city, you know, sticking with oil for a second, prices keep climbing, right?

The straight-farmews is effectively locked down during this shaky ceasefire, and we've gotten used to a world where oil moves pretty reliably around the globe. Now that we're starting to see fractures in that system, what might that mean long term for prices and the broader economy? It certainly means that there will need to be more supply built into the system, more reserves,

built into the system, more safeguards, more backups. Look, the straight-and-formers we've, this has almost been lower that the idea that the straight-and-formers could be closed at any point where everybody just thought it's so unbelievable, so crazy. And now we've gone weeks and weeks and weeks with this being closed, and it hasn't necessarily

led to an absolute crisis.

We're probably not that far from one where some of the last shipments of oil that would have been reaching Europe and Asia have already arrived and they're going to start dealing with shortages.

“And so I think when you get into actual energy shortages, when people aren't able to fill”

up, not just a price issue, but an actual supply issue, that's going to be the big wake-up call for a lot of countries about where they're sourcing their energy. And in some ways, may mean coming up with backups with countries that they normally wouldn't want to be dealing with, and in other cases it might mean accelerating the move away from oil as much as possible.

Yeah. City-Breddy is from MSNow in Rachel's Eagle, it's with the Washington Post. Thanks so much, YouTube. Thanks, Rima. History today has also been reacting to the news.

We'll have the details when we do the numbers. Another thing that's making the inflation fight and the Fed's job, a little trickier right now, is the cost of housing.

“In the CPI report, it's referred to as shelter costs, which is basically rent and what”

homeowners would pay if they were renting. We saw that measure shoot up during the pandemic and had been cooling off for a while, but over the last three months, it's kind of stalled out, stuck at about a 3% annual increase. Now that might sound discouraging, but there are signs that those shelter costs could come down soon.

Marketplaces Novosafo has that story.

Shelter costs make up about a third of the overall consumer price index, so they have

a significant impact on inflation readings. Shelter is a really big part of the CPI because the cost of housing is a really big part of households monthly budgets. Jenny Schutz is a housing economist at the nonprofit research firm Arnold Ventures. The good news is that home prices are moderating, and rental housing supply is improving

housing. So places like Austin and Phoenix and Atlanta have built a lot of apartments, and as we're housing supply came online at us, Ventures, the cost of housing has come down. Pushing down national averages for asking rents, according to Realtor.com asking rents fell more than one and a half percent in February.

So where's all this in the CPI report? Jake Krimmel is senior economist at Realtor.com. The part of it has to do with what we're measuring and what CPI measures. They differ. For example, the Bureau of Labor Statistics is looking at new rents and old rents, so to

speak. About 60% of rental units are covered by 12 month leases. So rents can't necessarily adjust to what's changing on the market. Not right away, at least. Also a big chunk of the Shelter calculation is owner equivalent rents.

What people think their homes would rent for. rent measure has a lag as well as homeowners expectations adjust. Krimmel says the CPI will eventually catch up, but don't expect shelter inflation to go too much lower than it's current 3%.

It does look like it's kind of hovering right around this three, so I'd say it's relatively normal. Meaning the burden to pull inflation lower will likely fall on other elements of the CPI. I'm Nova Soffle, former workplace. Continuing with inflation for a minute, there's the data, which we just heard about, and

then there's what it actually feels like to live with rising prices. To get out of that side of it, we called up someone who's setting prices day to day. Here's Ashley Morgan. She runs the gift and DIY store, unglued, and Fargo North Dakota. I would say right now that business is kind of average for us, and we had a lower March

than last year, but our January and February were better.

“I think that is partly because we had a random, you know, couple snowstorms that always”

affects it. I don't necessarily think it's because of consumer spending being down for us. We do do workshops, and those were actually up quite a bit for us, and so it's the more the retail side for us was down. What we saw in this last month is one of our main jewelry makers did need to increase their

current prices of things in our shop, 10 to 25%.

And that is like the first time that's ever happened for us.

We also have been, we typically purchase DIY kits, like do it yourself kits, as wholesale for people to make here, or take home as a gift. Two of our suppliers of that, one of them doubled their prices in this last quarter, which is also new for us, and then another one also increased their prices of Fargo North Dakota. And so for us that meant that we did find other options where the prices are still

more of that point where our typical shopper would pay it, because we're very aware that we're not going to get this kit in double our price, because we just know it's not going to move in our store. So as long as we can find other options, we are searching that out. In this next year, we're planning and producing just a couple of our own unglued products

for the first time to kind of fill in some gaps of things like a Fargo Cribbage Board, and things like that that we can produce, which hopefully it helped us control just a few things that we think will be some big winners with a price too for an end user, which is the shopper that comes in. We just actually had our crew quarterly meeting.

So these days I'm feeling really good about our crew and the really cool makers we get

to work with, but that financial stress is a small business owner like literally never goes

away.

“And I think for me it's a little bit more of like, where's the world going?”

And the stability of that that stresses me out, but it's kind of like, should we push this silly, funny vent when other things are kind of heavy and our answer always is yes, people need that when things are crazy. And so like after doing our meeting last night, it just feels really like hopeful and enabling, like we can still do all this cool stuff while things are crazy, because we all kind

of just need it. That was Ashley Morgan, owner of the store, unglued in Fargo, North Dakota. as well. Coming up. We're like the conductor of the food scrap orchestra in Cleveland.

Well, that sounds nice, I think.

But first, let's do the numbers.

The Dow Jones was down 269 points, six tenths per cent to finish at 47,916. The Nasdaq gained 80 points, four tenths per cent to close at 22,902, and the S&P 500 dipped seven points, one tenth per cent to end at 68, 16. For the week, the Dow rose at 3%, the Nasdaq was up for in seven tenths per cent, and the S&P added three and six tenths per cent.

The consumer price index, which we were just talking about, from March, shows that fruits and vegetables have risen 4% compared to last year.

“Let's check in with some of the related companies, then, shall we?”

Club, though, growers, who are perhaps known for their, perhaps best known for their avocados, declined two tenths per cent, S&P foods grew one in six tenths per cent, and producer at Distributor Giants, Freshtil Monte, dipped two percent. Bonds fell. The yield on the 10-year t-note rose to 4.32%.

You're listening to Marketplace. This is Marketplace, I'm Rimech Reyes. If you look at the unemployment rate in this country, 4.3%, you might think, okay, things

But then, you look under the hood, and you find that there are still a lot of people out

“there who've been trying to find work for months, people with plenty of education, plenty”

of experience, who still find themselves without a role. Blake Farmer of WPLN and Nashville has this story on long-term unemployment. After six months without a job, you're officially considered long-term unemployed. The number of Americans in that boat is up more than 300,000 over the last year. Among them is Brett Kling, an HR and technology analyst with a long resume, and a master's

degree in organizational psychology. Actually, three minutes before I started recording in here, I got a message that I got another rejection. So, an automated rejection. I'm sorry.

Yeah, it's all right. One, rejections, nose, or kind of par for the course. Kling stays motivated by going to as many mixers and meetups as possible. In an age of AI, he says it feels like human connection is his only hope.

“Anytime there's an open event, where you can have some FaceTime with people, I try to”

do that. He even tries to go in-person to his career transition support group meetings through the society of human resources management. It's led by facilitator Lauren Kiproff Downer, who says the group represents a wide array of industries.

We've had automotive tech. We've had a whole lot of healthcare.

The interesting thing is, these are people that previously would never have been having

to wait. Just a few years ago, when unemployment was below 4%, recruiters were offering signing bonuses to lure the same people to a new role. So why is long-term unemployment rising? Cyber economists Celeste Carruthers at the University of Tennessee, since people just aren't

moving around like they were.

“Both kind of the openings and separation side of the job market seem to be just in a holding”

pattern. It's like a big game of musical chairs was going on after the COVID pandemic. Employees were job hopping and chasing higher pay and better benefits, but those who ended up without a seat have had a really tough time finding a place to fit back in. When these Harris had difficulty landing a role that fit her executive experience in HR,

so she ended up pivoting. She's now a career coach. "I'm back to work now and I love my work, but my salary certainly looks different. My role certainly looks different than it did." That lived experience on the job hunt does give her some credit in her new line of work.

Tip one, don't let the job hunt dominate every minute of your life. Or maybe two hours of your day, every day you're focusing on those next steps. Then you leave space for taking care of yourself. You can't afford to burn out before you even start a new job. Harris says do set aside time for work that pays the bills, and even if it's good work

like driving for rideshare or delivery apps, don't hide all that hustling in your interviews. That shows a potential employer, your flexibility, your adaptability, your resilience, and employers really love those type of skills. The hardest part Harris says is remembering you are not defined by what you do. You ultimately have to realize that you don't have control over it.

Steve Jones was marketing director for a global sewing machine company and laid off about a year ago in a corporate restructuring. Being in his mid-50s, he feels his experience level works against him with recruiters, even if he would accept a pay cut, so he's considering a pivot to get him through to retirement age and making the most of the moment.

It sounds like such a cliche, but I'd always felt I had a novel, at least one in

me, and I've been actually spending the time to try to finally tackle a novel as well. It might amount to nothing, but at least he can say he fulfilled a lifelong dream amid the frustration of a drawn-out job hunt. In Nashville, I'm Blake Farmer from Marketplace. Most of us, we deal with our trash the same way, put it on the curb, and it gets picked

up. But when it comes to organic waste, you know, things like banana peels, apple cores, yard trimmings, it's not as simple. That stuff makes up about a third of the solid waste in this country. And when it ends up in landfills, it releases planet warming gases.

So some states, the training keep organics out of the trash altogether. Another place is that it also goes in the same bin, because even though your trash might be worthless to you, some states make serious money off of it, including Ohio, home-to-market places, Kaley Wells. About a dozen states have policies addressing food waste, including composting requirements,

but Ohio is not one of them, and the city where I live has no food waste program.

The reason is pretty simple, tipping a truckload of trash into a landfill is cheap, like

“it costs half as much as it doesn't say Massachusetts.”

It's a supply demand equation. So the reason that you see tip fees being much higher in northeast states is due to a lack of sufficient capacity. Brian Staley leads the Environmental Research Education Foundation. He says Ohio's got more land and fewer people, conserving landfills space or repurposing trash

not major concerns. For example, a waste energy facility that converts waste energy, you don't see any of those in many in the Midwest. You see them concentrated in the northeast. It's the same with composting.

It's cost effective in Massachusetts where landfills are expensive, but not so much in Ohio. Sam Crowell is Ohio University's Sustainability Director, and he worked on a regional composting effort in the small town of Athens, Ohio.

“Composting would add to residents monthly trash bill, so participation ended up being a fraction”

of what he was hoping for. We do have a lot of people who struggle with finances. Basically, it was, that was, they didn't want another fee. And the barriers don't stop there. Here's the big one.

Ohio imports more than eight million tons of trash every year from more populated

states. If it cost more, then we wouldn't be accepting trash from New Jersey or New York City and having it hauled here to fill in our valleys. That means Ohio makes money on other people's trash. Brian Staley with the Environmental Research Education Foundation says without the financial incentive

to start composting, the political will to create policy around that in regulation. That tends to drive things. But when sustainability gets pitted against creating jobs and boosting local revenue, it's not a very popular political campaign.

“So the deck is stacked against composting in Ohio.”

And yet, we have the glorious challenge. Truly, I'm figuring out how to make it happen in a state where there's no mandate, probably never will be.

Nathan ruts his committed to trying anyway.

He's director of soil at Rust felt riders, a small group in Cleveland collecting roughly 4,000 tons of food scraps annually to turn it into compost. "We're like the conductor of the food scrap orchestra in Cleveland." He's touring me around their headquarters filled with dozens of what looked like standard, black garbage pick-up cans, brimming with food scraps, and some very well-fed bugs.

"Right here." "We're going around." "Oh, yeah, look at that." "I say it's only mother to love." "Well, these cans get deployed at drop-off sites all around Greater Cleveland, collected,

turned into compost, and sold. Ruts estimates his company processes roughly 1% of the food scraps generated here." "The amount of stuff that we're diverting is chump change, and we're having no significant effects currently." This is another composting service that costs money and residents have to drive their

food scraps to drop off locations or pay more to get it picked up way more expensive than tossing it in the trash can they're already paying for. "There's only ever a fool's hope, but what else am I going to do with my life?" Ruts is trying anyway because, despite the headwinds, some people are willing to pay to be more sustainable.

His business and composting throughout Ohio are growing. In the past decade, free drop-off sites for food scraps have cropped up in dozens of cities across the state because, without state policies, local governments are still working on their own sustainability goals. In Cleveland, Ohio, I'm Kaylee Wells for Marketplace.

This final note on the way out, you can file it under, oh, this is probably most definitely because of inflation, right? A news study from Deloitte shows that more Americans are giving up their streaming services to save money. About 40% of those pulled say they've cut back in the last three months, which is notable

because Americans, they love their streaming services. According to Pew Research, more than 80% of us use at least one service, though I suppose that's about to go down. Our theme music was composed by BJ Leaderman, Marketplace's Executive Producer is Nancy Fragali.

Joanne Griffith is the Chief Content Officer, Hill Scarborough is the Vice President and General Manager, and I'm Rima Fraes. All right, have a great weekend everyone, we'll be back Monday. This is APM. I'm Maggie Smith, host of The Slowdown, where each morning I invite you to step away from

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, find the

slowdown, wherever you listen to podcasts.