The inflationary effects of war

Unless and until the war tells us otherwise, inflation is our through line this week. From American public media, this is market price. [MUSIC]

In Los Angeles, I'm Kai Rizdoll, it is Monday, today's six April good as it always is.

That'd be a long everybody. As we sit here to start the week, news of the war and its economic ripples is calm. Threads of course, bluster, but nothing tangible yet. So we are going to stick with what we know and what we know so far is that inflation

“is going to be a key economic talking point the next four days.”

Gas prices, yes, oil up a bit again today. Two key price measures coming in the next couple of days. The personal consumption expenditures price index, PCE in the vernacular, and then the consumer price index on Friday. But we start today with one of those economic ripples.

The Institute for Supply Management's purchasing managers index. It's the prices businesses pay, services sector businesses in particular. The prices they are paying for what they need, those prices, shot up 7.7 percentage points in March, and that is the biggest monthly increase since 2012. Marketplace's Mitchell Hartman starts us off.

Today's report on the service industry followed another one last week covering manufacturing, Dan North, that credit insurer Oliance Trade, says these private sector ISM reports are really

“important for gaging inflationary pressures in near real time.”

It is the most up-to-date data, the government's data such as CPI's, at least a month behind. And what does the ISM data show?

Prices have gone up pretty sharply, especially in manufacturing up 19 percent in two months.

Jay Hattfield at Infrastructure Capital Advisors explains the mechanism. It increases in oil prices translate into increases in gasoline, but also importantly, diesel, because diesel prices really filter into everything. It's what Hattfield calls the bleed through effect, as the cost of producing goods and moving goods and people goes up.

Food is about 40 percent energy, but it also shows up an airline prices transportation because of the diesel increase. Work charges for diesel fuel are now being passed along the supply chain to businesses and ultimately consumers. It's not only oil prices driving higher inflation, says Mark Zandee, chief economist at

Moody's Analytics. "There's a bunch of stuff juicing up inflationary pressures," I mean obviously there's the tariffs that continues to pass through, that's not over. But that's been a slow burn, as businesses held off on racing prices amid all the policy uncertainty.

Zandee says the inflation effect of higher crude oil has been almost immediate. Later this week we'll get the consumer price index for March and the PCE price index for February. Zandee says based on all the data we have to date, it looks like inflation right now is

3 percent year over year, and just for context the Fed wants 2 percent, even if this

the war came to an end relatively soon, by the summer we're looking at 3.4, so I buckle up. A bumpy ride with no more Fed rate cuts on the horizon this year. I'm Mitchell Hartman for Marketplace. Buckling up indeed Wall Street today, oil traders do seem to be able to read the room

at equities traders, less, so we'll have the details when we do the numbers. I don't know if you saw this the other day, Thursday last week, I guess it was. But the president of South Korea and a speech department called on South Koreans too, and this is a quote by the way, "save every drop of fuel."

“That's how tightly the war in the Middle East has squeezed the planet's oil supply,”

and it's another reminder, not obviously, that we needed it, that oil trades in a global market, and governments everywhere are doing different things to help control consumer costs. For instance, South Korea have imposed temporary price caps on gasoline, just for instance, marketplaces are crisp and Schwab, as more along those lines. Most countries are feeling the pain of high oil prices, but Europe and Asia rely most

Audium Cerovic is a senior fellow at the Center for Strategic and International Studies.

“About 75% of all the crude from the Persian Gulf Coast to Asia, so they're really, really”

hurting. Governments have encouraged people to drive less and work from home, but some have gone further, implementing price controls. Problem is, when you subsidize prices, people just think things are normal, and they go ahead as if it was normal.

Creating a happy little bubble where everything's fine is great for politicians and consumers,

not at first, but it doesn't solve the supply issue.

Katherine Wolfram, a professor of energy economics at MIT, says it makes it worse. You just kind of exacerbate a problem by not letting consumers see that this commodity is, in fact, very, very scarce right now, and very expensive. High prices are supposed to be a signal, and without it, people keep driving as if no oil shortage exists.

The US is a big enough consumer that if we were to cap prices, it would encourage consumption

“enough that it would drive the oil prices up even more.”

It would kind of worsen the problem. Leading to longer term pain, they're also pretty immediate economic consequences. Temporary price caps usually promote panic buying, hoarding, and theft. Several in Bornstein is faculty director at UC Berkeley's Energy Institute at Hoss. Everybody who is alive at the time remembers the gas lines of the 1970s.

At one point during the 1979 oil crisis, the US even implemented a rationing rule, where drivers could only purchase gas on alternating days based on whether the last digit of their license plate was odd or even. It created a lot of friction. When you have those gas lines, people start having to plan their days around getting fuel.

People can't get to work, businesses can't deliver goods, and in the end, that causes more economic damage since Bornstein then having to pay for expensive gas. I'm Christian Schwab from Marketplace. Health care is getting more expensive. Full stuff, don't need to elaborate on that one too much.

Because it is getting so expensive, there are various and sundry new ways to ease that burden just a bit coming out of Washington. A provision deep in the GOP's tax cut law of a year ago, let's more Americans open a health savings account in HSA. But HSAs are also being hyped as an investment vehicle of sorts.

So with the obligatory reminder to always consult your own financial advisor and the reminder

that nothing in health care is ever simple, like Farmer, WPL and a natural has the story. Mike McKee is a show. That's him behind the drums. As a musician, McKee has always been self-employed and on his own friend's insurance. That means going with high-deductible plans, they're less expensive each month, but

leave you with bigger medical bills. The plans also allow you to start a health savings account, but he never has. "The master didn't master me." He'd rather save in more straightforward ways, retirement accounts, or college savings for the kid.

Plus medical bills seem like funny money. If something catastrophic happens, he almost certainly won't have enough and can beg for mercy. He's been there. "I'm so frustrated with the system that anything with medical savings is tough.

I'm just so turned off, but emotionally, I have to be really careful to be logical about it."

“One key misconception he and many others have is that the HSA is also a "use it or lose"”

kind of account. Not so. The money is yours for life. Without a pocket cost going up constantly, more plans are eligible for HSAs. Not just high deductible plans, this year catastrophic and bronze level plans on the

federal marketplace are HSA eligible.

At this point, roughly a third of all privately-insured individuals are covered by an HSA.

There aren't many better deals. The money goes in and comes out tax-free, and if you build up a balance, you can invest in the stock market. Those gains aren't taxed either. Michelle Long is a policy researcher with KFF.

The small share of people who do choose to invest in is very small, could certainly see some benefits if they keep that money in their overtime. Of course, if you're living paycheck to paycheck, Long says it's virtually impossible to take advantage. HSAs in this way tend to benefit more the higher income in rollies, because those are

the ones who have the disposable income to set aside at the end of the month.

Still you don't have to be rich to realize the benefits, but you do have to set up a

“special bank account, put aside the money, keep receipts, and reimburse yourself as”

you go. Rachel Shriver is a marketer and mother of two in Tennessee. I do think it is worth a headache, because it's a tiny headache. It is money out of my budget that would be spent anyway. It's tax-free, and there's the hope that it can get invested.

But for now, it's just a hope, because even in years when she can afford to max out of HSA to the federal limit, which is now more than $8,700, driver and her family find a way to spend pretty much all of it. If I'm paying for braces, physical therapy, my kid has an accident on the wrestling mat

and needs PT imaging, orthopedic care, there goes the savings.

She's hoping to hold on to more of her HSA savings when the kids get on their own plan, in Nashville, I'm Blake Farmer for Marketplace. There you are, solidly established in your career of choice, and along comes a new technology

“that, I mean, best case is going to be hugely disruptive, sound familiar?”

Almost every day now, there's a headline about what AI could do or is already doing to the job market. So if you're among the millions who've got another 10 or 20 or 30 years of work ahead of you, what might you be doing now to stay on top of it all? Good place to smack the fields has been wondering.

Maybe I shouldn't admit this on the radio, but AI stresses me out. I worry about it taking over my job and everyone's jobs. I also worry I'm not using it enough to stay employable for the next however many years I need to keep working. My friend Ryland, a video editor in Portland, Oregon, feels similarly.

I have a hard time seeing it, ending well, for people in creative fields. It definitely feels more likely to me that we're going to get automated away. Then this will become like an empowering tool. I called Ryland and a few other friends who are also mid-career because I was wondering if I was alone in feeling this way and I was wondering how much people are using AI so far

compared to me. My friend Maria works in marketing and a multinational company in Miami and she's using AI a lot, especially for research and data analysis, partly because her company has been offering lots of training and tools. I'm not an AI enthusiast, right, like I wasn't.

I'm one of these people who's very skeptical about AI and the use of AI, but if the goal reasons is up, but I have to say that in my day to day, it saves me tons of time. My friend Sarah is also using it at the grocery store where she works in Tucson, Arizona. I work in the produce department.

It's not always the most profitable department because it's perishable, so there are

huge margins for loss if you're not careful with ordering or if imports are delayed and things like that, so it does help us figure out how much to order and how to display things effectively. My friend Zaffron is a college professor in Portland, Oregon, and she's been revamping some of her courses to incorporate AI, but she's also worried about what could happen if AI

eventually makes people less interested in going to college. If our students don't feel the need for higher education degree and enrollment goes down

“enough, we're going to need as many faculty positions, right?”

I'm still in my mid-40s, and so I still have a long way to go for my career, and so therefore, yeah, we'll need to see. I also have a long way to go in my career, and I've been feeling like I have no idea how to set myself up, so I'll still be competitive in an AI world, so I decided to call Jeff Baker.

Hey, Sam. Hey, Jeff, how are you? Sure is a career coach in Vancouver, Canada, who's gone all in on AI, helping people learn it, and figure out how to adapt their careers for about $100 an hour. Talking with him made me a little less worried about AI taking over my job, even though

I am currently stuck at what he considers to be level one of AI literacy. Which is using AI like a Google replacement. There is so much more I could be doing with it than just using it as a glorified search engine Baker says, namely learning how to create AI agents that effectively operate like digital people and work for me.

Once you have a digital person that can think and plan and talk with you and create files and edit files, then you kind of feel like, whoa, skies to limit here.

an interview. He says not many people are creating and using AI agency yet, so there is still time to learn. But there's not going to be time forever.

“The best thing to do is start, he says, watch a couple videos and then just play around.”

Maybe create one agent and see what it can do. Doing that will also help you see, which parts of your job are vulnerable to being taken over by AI, and which parts may be less so. There's all these things that AI can do better. There's the things only I can do, and then there's the things that actually need to be done

in collaboration with AI, and that allows you to double down on the things that are uniquely human. Like in my case, interviewing people, recording sound in the field, or making judgment calls about what stories to cover and how. Still, he says, all of us are going to have to learn to pivot and adapt in the coming

years if we want to stay employable, and we'll probably have to keep doing it over and over. It's like we're all driving into the darkness, and some people can see 10 feet in front of them, and some can see 200 feet. He says, the ones who can see 200 feet will be able to make better decisions about what

direction to go. I'm Samantha Fields from Marketplace. I really quickly learned while being in New York that I was meant to live in the mountains.

And learn, I guess, first though, let's do the numbers.

Dowdust was up 165 points today, about 4/10%, 46,669. As that gained 117 points, about 1/2%, 21,996, the S&P 500 added 29 points, 4/10%, 6,611 there. Like, far more is telling us about health savings accounts, so some health insurance companies might not want you to unite in health group, reports earnings later this month, by the way, rose 1 1/2%, signal climb 2.1% elephant health, ascended 6/10%.

Consumer products, you say? Sure, we got that. P&G maker of loves and tied detergent to send it about a quarter percent post-holings, which makes honey bunches of oats and Peter Pan, Peter Butter, lifted about a 10% bond price is fell, yield on the 10 year treasure enough thus rose 4.34% on the 10 year listening

market price. This is Marketplace, I'm Kai Ruzdong.

“We have talked a bit on the program I believe about thrifting, clothes being given a second”

life in the resale market and how that's becoming more and more popular. And we do have some data on that now. The online thrifting platform thread up, so a vested interest there, thread up says almost

60% of consumers bought second-hand clothes last year and that the resale market is actually

outpacing the broader retail clothing market. Marketplace is Carl Alhavi here, called around and put those numbers in some context and what they might port 10 for consumers and for retailers. Second hand shopping is even impacting the luxury market, so it's peer to pre-al at Boston consulting group.

It was a side conversation five years ago, but today, to pre-al says luxury shoppers are perusing the second-hand market at increasing rates. Portability is one reason, another is a sustainability, plus to pre-al says it can be kind of fun.

“I think the thrill of the hunt is a big driver and in the resale market, remember, customers”

aren't just buying stuff, they're also selling it, too. To pre-al says people who accumulated a lot of things, especially during the COVID years, could be ready for what he calls a wardrobe detox. So I think the detox is a big piece of the reason to sell.

The second one is because they just also want to be able to buy more second-hand.

Much of the projected growth in second hand shopping will be driven by younger consumers, says Neal Saunders at Global Data, which has been studying the resale market with threat up for years now. They're very, very keen on the resale market and as they mature into higher spending consumers, the evidence suggests that they're going to keep spending on resale for a fairly large

proportion of their apparel leads. Brands are getting in on it, too. Saunders points to Lulu Lemon and Levi's, which also offer resale options to their customers. It doesn't take away necessarily from the existing business. It just may attract some new customers, some different customers, some different types

of spending that they weren't getting access to before. Pricing second-hand items, as they come in and out, can be especially tricky for companies that do this. It's a sutureita cadali at Forester. It's a balance between what's the right number that makes it attractive for people to

that merchandise.

Cadali says people making subjective calls could find that challenging, but technology

could help companies at least break even if not be profitable. I'm Carla Javier for Marketplace.

“There was a time in this economy when the only way to sell your stuff was to travel from”

place to place and meet your customers where they were. Traveling salesmen were a thing. Actually in the early days of the last century, a thing that has now almost completely vanished, almost. Because some businesses have added the modern twist.

Here's this next installment of our series, "My Economy." My name is Hayley Grisham Hampton, and I am the owner and designer at Harry Slowhackco, which is based in New Hampshire. All of the artwork on all of our hats are original graphics in mine. I went to Parson School of Design and studied fashion.

I was actually born in Littleton, New Hampshire, and ran away to the city. I really quickly learned while being in New York that I was meant to live in the mountains, and I came to the realization that if I wanted to live where I wanted to live, I almost had to create that position for myself. My husband and I had this dream about moving into a van living on the road and traveling

“the country, and it may be old fashioned, but we always really found that the best way”

of selling our product was in person. If we can go and meet like store owners or buyers in person, we might have a better chance of getting our products on their shelves. We decided about two years ago to buy a van, throughout the 13 months that we lived in our van, we went into hundreds of stores.

Outdoor stores, boutiques, co-ops, any type of store, you could think of. It could be a gym retail area. At our absolute peak last year, we were in about 50 stores. We definitely heard more notes than the asses, but 50 stores for a small company like ours is a ton.

We went all the way to the west coast, did most of the Pacific coast highway up to Bend and then came back.

“When we came back, I really needed stability.”

I felt like we had been on the go for so long that I really just wanted to feel a little bit more rooted. We ended up finding our dream storefront location in Littleton, New Hampshire. We've been there for a couple of months. We are in the process of onboarding our first employee and to have help putting tags on hats

and to have help with cleaning and some of the day-to-day maintenance of the space.

That's been amazing and up until this point and having a physical storefront.

That wasn't really an option for us. I'm hopeful this year that will be the first year that I will be able to pay myself every single week and this is truly the best space that we could have ever jumped up for our company. So we'll be there forever.

Hey, Lee Grisham, Hampton there on our hurry slow hat cone down based in Littleton, New Hampshire. Whether you are taking your business on the road or building it where you are, we want to hear about it. Let us know what's going on. Would you like to play that award?

This final note on the way out today, we started with inflation. That is where we are going to end with the root cause more specifically. You might have seen that OPEC met this weekend and agreed to boost production by 206,000 barrels a day which great. The daily global shortfall with the straight-of-hormous tank lows, daily global shortfall

between 10 and 12 million barrels of crude oil every single day.

Also a sort of fertilizer is another petroleum product, as you have heard. I'm here with my way Katelyn Esch, John Gordon, New York Car, Steve Mollison, Stephanie Seek, are the marketplace editing staff, Kelly Soverey is the news director and I'm Katelyn Resdall, we will stay tomorrow, everybody.

Why do we keep putting off the financial tasks we know we need to do?

“I'm Rima Gres, and this week on my podcast, this is on Comfortable.”

I talk with a behavioral expert about commitment devices.

The tricks we can use to force ourselves to follow through.

“The most extreme form of commitment device is literally saying you're going to find yourself.”

Like I'm going to have to give $50 to politicians campaign who I hate if I haven't

done this by next Friday. Listen to this is uncomfortable wherever you get your podcasts.