(upbeat music)
- On this Friday, some jobs, a dash of tariffs, aviation, and we'll play some mage on.
“From American Public Media, this is Marketplace.”
(upbeat music) - In Los Angeles, I'm Kyle Rizdoll.
It is Friday today, May the 8th, you'd as always.
Have you along, everybody? All right, seven minutes, this whole economy, and what the heck is going on? Let's see if we can do it. Heather Long is a Navy Federal Credit Union Greek.
Hipp, is it the Wall Street Journal? Hey, you too. - Hey, Kyle. - Hey, Kyle. - All right, Heather, you get the first bite at the apple here. 115,000 new jobs in this economy.
In the month of April, the rate stayed steady at 4.3% discussed, please. - Look, I thought it was a good report. You know, 115,000 is double what was expected, is you noted, the unemployment rate stayed steady,
and what really got me excited is we finally saw some hiring and an industry other than healthcare. We saw a big jump in transportation and warehouse jobs, we had retail, was up, hospital, a little bit of hospitality, construction,
and social assistance. This wasn't a one-trick pony, you know, thing anymore. I'm not saying everything was perfect. It's still hard to get a job in the tech industry, our finance, there was a pretty big jump in people
who could only find part-time work, instead of full-time, and of course the big Achilles heel of the economy is wage growth of 3.6% in the past year is getting wiped out by inflation in these surging gas prices. But if you look where we were in 2025,
when basically no jobs were getting added,
so where we are in 2026, where we've had 76,000 jobs a month on average so far, things are looking better. - Heather Long, you have been on this radio program for 10 issues, I know you in real life
and you are a reasonably steady state person. This is the most excited I've ever heard you on a Friday afternoon. (laughs) - Wow, thanks, I guess. - No, I mean, it was a compliment.
It should, it's a tell on how you really feel about this jobs report. - Steady is a good word, you know, you got to stabilize the patient before they can recover. - All right, fair enough,
Greg, you're gonna take the flip side of this coin, I gather. - That's right, I will try to sound a little less or actually a super-thin Heather on this, okay.
But truth be told, I'm not gonna take a negative view
on this report 'cause I agree with Heather that it is on balance pretty good. But I wanna step back from April alone and take a look at the bigger picture. Now, the numbers have been bouncing up and down,
like a few months ago, we had a big negative number. But year to date, we're actually averaging about 76,000 new jobs per month. And that's not a lot. But last year, we only averaged 10,000 jobs per month.
In fact, last year, job growth is so slow
“that we went through, I think in eight months period,”
where it was negative for four of those eight months. And I think there was genuine fear that we were like dropping to stall speed, maybe even, you know, flirting with recession. So I'd say the stepping back here,
the most encouraging thing about this report, is that despite all the headwins from terrorists and oil in Iran and so on, is that we seem to have now established a moderate, but stable pace of job growth.
- All right, well, we'll take modern stable and that's kind of what Heather said. I do wonder though, Heather, if I could delve very briefly, very briefly into the world of the Federal Reserve,
I wonder if that big sigh we heard this morning was coming from Kevin Wash, who is gonna get squeezed right when he takes that job. But now at least based on this report, he only has to worry about inflation,
he doesn't have to worry about the, the stag-flation part of this thing. - Well, I think you're right. And I mean, I don't envy him because the reality, I keep calling it a split-screen economy
and I know Greg has written about this as well. You know, we've got this AI boom going on, a lot of the economists and Wall Street indicators look pretty good, but for on Main Street, a lot of Americans are really feeling squeezed right now.
You know, it's not just the vibes aren't good anymore. You know, wage growth is not keeping up with inflation now. And you know, people are feeling financially pinched. And that's, you know, a hard problem for him to solve. He's gonna just hold rates steady, probably,
for most, if not all of the year, but it's hard to watch people in a rough time. - Yeah, yeah, yeah, and coming from the White House, as soon as he takes that job in like three, two, one, you know. Greg, I want to talk about AI, Heather mentioned it very briefly.
You wrote, I guess yesterday, maybe two days ago in the journal, maybe letting a little air out of AI right now
“wouldn't be such a bad thing, talk about that, would you?”
- Yeah, I know, it's probably an unpopular view, a certain in Wall Street, but I mean, hey, like Heather said,
There's basically two economies right now,
the AI economy and everything else.
If you look at the GDP numbers, for example, they look pretty solid around 2%. But if you take out all the spending on data centers and all that stuff, you're somewhere between 0.5 and 1.5%, and by the way, a lot of that AI spending
isn't even on stuff we make here in the United States. We import it from Taiwan instead of Korea. You look at the stock market, right? Almost all that run up in the towards records in the last few weeks is led by the so-called
magnificent seven, or the other semiconductor stocks that are sharing in this AI glow. So that aggregate numbers are being held up
“by this AI boom or bubble, if you want to call it.”
But everything else underneath the surface looks kind of like flat-ish. And so yeah, that leads me to this probably somewhat unpopular, out of consensus view.
That if the AI boom went bust, which I am not predicting,
it wouldn't be that terrible. I mean, the economy would still be growing. And honestly, all that wealth that's been created by AI, it mostly went to a small number of people. The average person cares much more about their wages
than their wealth than their wages would probably not be affected. So let's talk then, Heather, and you get 30 seconds. And then, Greg, at 30 seconds on what we can extrapolate from today's jobs report and crank you consumers, but the market's doing well, you know,
land at Crystal Ball the next six months for me. I think it's more of the same of the split-screen economy that we've both been talking about. But here's my butt. I think there's going to be more belt tightening
as we move throughout the year. But it's just an economic reality that, say, the middle class right now has still had some money left from those larger tax refunds, but about half of it's been eaten up now
by the higher gas prices and not money done last forever. And by the end of the summer, it'll probably be going. And then people have to make hard choices like a lot of modern income families are having to make right now. So I think you get a little bit of pullback.
And frankly, all those companies can't spend on AI forever. They're also going to have to do some belt tightening. In 2027. Greg, get nicely. Seconds goes to you.
Yeah, go ahead. Yeah, yeah. So I'm pretty optimistic. I think about the rest of the year, especially given that we seem to have the job creation
machine clicking in again. Now, I would say the big asterisk in that picture, though, is the situation in Iran and with oil. And ever since this war began back at the end of February, the assumption about by economists and most experts
is that it would be brief, and then oil would fall back from 100 a barrel to like 87 year 60. And that's not happened. And people have gotten more negative about that.
“And so that's what makes me a little bit nervous.”
Is that the longer we go without a real resolution to this problem, the bigger the burden on consumers and the harder it will be for the economy to grow it at decent rate? Indeed.
Greg, get up at the Wall Street Journal. Have the long should chief economist at Navy Federal. Thanks, you too. Thanks. Hi, Kai.
Have a nice weekend, Wall Street today, two words, gang, two little words. Word one is record. Word two is a highs. Here are 10 more words.
If you're counting, we will have the details when we do the numbers. (upbeat music) (upbeat music) Heather and Greg and I went over the jobs report,
but there is always more to say about it,
so we are going to. And we are going to do it with an eye toward AI. Because despite its deliciousness, the tech sector keeps on losing jobs, even as it drives stocks to record highs.
The Bureau of Labor Statistics says employment in information. That's their word. Information jobs, which is a pretty good proxy for the tech sector.
That is down 11% from its peak back in 2022. And there has been a pretty steady drum beat of layoff announcements often explicitly tied to AI. Work a place in Megan McCarty, Carino. Makes sense of it all for us.
This week, cloud flare, coin base, and PayPal announced job cuts after mass layoffs at Meta, Microsoft, Oracle, and Amazon earlier this year. But the tea leaves of tech jobs are hard to read,
says Guy Burger, senior fellow at the Burning Glass Institute. If you were going to talk about pandemic over hiring, this would be the epicenter.
“And I think that is confounding a lot of things”
that people also try to figure out. Like is AI eating jobs and when's it coming for mine? But Burger says many of the company's calling jobs now could still be right-sizing from pandemic expansion? I don't think we fully know whether these layoffs
To what degree they are driven by AI versus AI being
convenient, Burger Man.
Because AI is not a Boogey man to Wall Street investors
as Gregory Daco, chief economist at UI Parthenon. Any type of layoff announcements is typically seen by markets as being a sign of weaker demand. But when you announce layoffs because of your greater efficiency that it's seen actually as a good sign.
So companies have an incentive to attribute any downsizing to AI. Still he says automation is likely a factor. Artificial intelligence is very good at writing code. So there is certainly some replacement happening.
But reports of the death of coding have been greatly exaggerated according to Corey Staley. He's a senior economist at indeed hiring lab, which has seen postings for software developers and other tech roles pick up in recent months,
despite ongoing layoffs.
“So I think what we're seeing in IT and in tech right now”
really is a restructuring.
These layoffs are about cutting over here so we can spend the money on AI over there. Though much of the hundreds of billions of dollars are going towards steel and silicon, rather than staffing, I made McCarty Carino for Marketplace.
[MUSIC PLAYING] President Trump's legal losing streak on his tariffs continues. Yesterday afternoon, the court of international trade struck down his workaround at raising import taxes, following the stream courts ruling that his tariff
pollusa of last April was illegal. No word yet on how those new tariffs might be repaid. But as you know, customs and border protection has started processing refunds for those April 2020-25 tariffs. Kristen Schwab, in fact, has found a couple of stories for us
about how businesses are deciding to share refunds with consumers since consumers, as we all know, are the ones who wind up footing the bill most of the time. But the question of who paid how much of a given tariff can get complicated along supply chains
that run from importers to manufacturers to wholesalers and on the end to retailers and consumers? So Marketplace is just in how, talked with business owners, about whether they think they deserve a slice of those tariff refunds and whether they think
they'll actually get one. Norman Wright, mechanical equipment corporation, is an HVAC equipment supplier based near San Francisco. Richard Leo is the owner and CEO. What we do is we buy equipment from manufacturers
and then we resell it to the installing contractors that will put them into buildings and so on. In other words, Leo's company is in the middle of that supply chain. That means the manufacturers and importers
he works with passed on plenty of tariff charges. It also means that his company can't apply to the government for a tariff refund. There lies the problem because it has to be the importer that has to apply for the credit.
Leo could ask his suppliers for a refund, but that's kind of all he can do. I asked a major manufacturer a week ago that we do a lot of work with. I said, hey, are you guys going to be filing for any of these
“refunds that they said we made an executive decision?”
We met and the answer is no, we're not going to file for it.
Plenty of companies are deciding to go for the money. We did file immediately on the first day of the filing. That's Peter Firth, the CEO of FFF Associates. It imports fig paste from Turkey in Spain and sells it to manufacturers that make fig bars.
Firth says if and when he gets his refunds, he's planning on giving all of the money back to his customers. To me, it's very clear I owe the money back to the customer. And by the way, I need to tell you, my customers believe it's very clear to them as well.
They have already asked. When first company passed along the cost of tariffs to the food manufacturers that are as customers, the contracts broke out the tariff charges as separate line items and clearly stated that the charges were based on the current tariff rate.
And if it's based on the current tariff rate if the tariff is struck down, then it seems obvious to us that it's owed back to them. But not every business spelled out tariff charges so clearly. Many simply raise prices and customers paid them. Rachel Brewster is a law professor at Duke.
If you just agree to pay a price for a good, then it's not clear that you have any legal entitlement to get that tariff back. Brewster says in those cases, businesses are going to decide whether to share refunds with their customers based on their relationship.
“Who has the most bargaining power in their relationship?”
How long standing is the business? How many competitors are there out there? Businesses that do have a lot of competition might be more inclined to share tariff refunds. Lime and Monson is the president of SL Monson and Company,
which imports metalworking tools from Europe. He says in most cases, he baked the cost of tariffs into his prices. So in terms of a refund, I don't think we have any responsibility to do that. But Monson knows his customers have plenty of other tools
Suppliers they can work with.
So he's open the sharing the refunds.
“If they want to come back and look at this again,”
I certainly want to do it. It takes a long time to build a customer relationship. It doesn't take long to disassemble it. But not every business has the leverage to ask for a tariff refund.
Basically, we don't have any power in the situation.
That's SpiroPapadopolis. He runs Schlail Restaurant Group, which owns seven restaurants in several states. He says tariffs have raised the prices he's paid for tables. Takeout containers and other supplies and equipment.
But the supply chains for those kinds of goods are so long that if Papadopolis were to ask his supplier for some of that tariff money back. They're probably just going to say, hey, we paid tariffs, too. You know, like, we're not getting it back either.
Somebody else that we bought it from is getting it. Like, it's just a dead end. Papadopolis says that the end of the day tariffs are still pushing up his costs and pushing up the prices. He charges his customers.
I'm Justin Hub for Marketplace. (upbeat music)
“Coming up, and I set myself if you don't try this out,”
you're going to kick yourself forever. - No regrets, am I right?
First though, let's do the numbers.
Downdust rules up 12 points day, that's basically flat percentage wise, 49,699. And as that get it, 440 points, 1.7%, 26,247, a new record, S&P 500 found 61.8, 10%, 73,98, oh look, another new record.
For the five days gone by, the down picked up 210th percent, and as deck rose four and a half percent S&P 500, added two and a third percent. Last make her corning.
Plans to expand its U.S. production capacity by a factor of 10, to make enough fiber optic material to keep the AI industry happy, and video is going to help pay for that. Corning lit up two and a half percent
on the day in video accumulated one and three quarters of one percent. Bonds you asked, I'm so glad you did. Prices up yields down 4.36 on the 10 year, listening to market points.
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Learn more at quickbooks.com/workforce. That's quickbooks.com/workforce. This is Marketplace. I'm Kai Rizdahl. Spirit Airlines has been gone all of what six days now.
So these are still very early days, but there are very real economic consequences when airlines shut down. Most particularly around a hub airports, which for spirit was Fort Lauderdale,
Hollywood International, then as South Florida. And I'll tell you what, Cleveland, Ohio can relate. A big merger took it out of the hub game back in 2010. So Marketplace, Kaley Wells, asked some of her Cleveland area neighbors,
what might be in South Florida's future. Michael Goldberg remembers life back when Cleveland was a hub for continental airlines. He's a professor in the School of Management at Case Western Reserve University.
It feels like you're kind of on the map as a significant metro area when you have sports teams and when you're an airline hub. But then in 2010, after the Cleveland Browns placed last in their division again,
continental merged with United Airlines. That meant United now had hubs in DC, Anchekago, and Newark, and Cleveland. It didn't really need all of those. So four years later, Cleveland got asked.
The number of direct flights into our airport started decreasing and that led to a whole bunch of challenges. The airport lost dozens of nonstop flights. It shut down its fourth and shiniest and newest concourse. 12 years later, it's still empty.
And Cleveland are still talk about how air travel was better back before United failed. There's a certain ding to your civic pride that it didn't carry with us.
The Fort Lauderdale Hollywood area could be facing a similar fate.
Dan Lindblade runs the Greater Fort Lauderdale Chamber
of Commerce.
“I'm very concerned anytime we lose homegrown company”
and they go under and they're the size of spirit. It'll take the wind out of your sails. The airline employed 4,000 people in the area. It's too early to say what'll happen to the number of flights or direct connections long-term.
And at least for now-- the rest of the airlines are picking up flights, jet blues, picking up routes, southwest is picking up routes. A similar thing happened to Cleveland, which led to one shiny silver lining. Fares went down considerably.
Bay Zhushal leads the Greater Cleveland partnership, the regional Chamber of Commerce. The market became much more competitive to serve because more airlines were serving it. And the average fares went down dramatically
because of the competition. Now, Cleveland story and Fort Lauderdale's aren't apples to apples. For one thing-- United was the high cost career, not the low cost career. And so when they liberated gates, Fares went down.
Fares could go up and Fort Lauderdale. And for another, Fort Lauderdale Hollywood airport has competition. 30 miles away, a much larger Miami international. Cleveland doesn't have that kind of competition. But South Florida definitely beats Cleveland as a spring break
or beach vacation destination. Passengers volume is significant. It's a business and a leisure destination. Maybe you have here on the leisure side of it. I think they're going to be fine.
In the end, Cleveland's airport is serving more passengers now than it did before the merger, even though it has fewer non-stop. Frontier recently added flights, and United didn't disappear. It still flies to the airport more than any other airline. I'm Keely Wells from Marketplace.
[MUSIC PLAYING]
“It's more likely than not that I'm late to this, very late, honestly.”
But it seems Ma Zhang is having a moment. People are playing with friends and family at home, yes, of course, but also when they're out and about. Here's today's installment of our series, my economy. My name is David Breznick.
I run Sparrow's Nest Studio, and we are a Ma Zhang parlor in Midtown Manhattan at 35 West 35th. Ma Zhang is a classic car game primarily plays with tiles, and it's a hand-building game where four players are in a race to get their hand into the right shape.
First one to the right shape is the winner. [MUSIC PLAYING] Sparrow's Nest had been a dream of mine for a long time. I've been involved in the Ma Zhang community since around 2006, 2010, like multiple phases of my kind of growth in that community
and one of the things that I'd always felt is
that it would be so great if there was a home for Ma Zhang a place to do it. I was very fortunate, several years ago, I had a little bit of a windfall and COVID-friendly depressed office space prices immensely Manhattan.
And I set myself if you don't try this out, you're going to kick yourself forever. So I actually work full-time at a startup, and this is something that I've kind of taken on as my second life. It's been my second life for a very long time.
My days are, I start work, I do work, I finish work, I go to Sparrow's Nest, I start that work, I do that work, we close it to MPM, it's a lot. [MUSIC PLAYING] We actually just raised our prices a little bit,
because we moved into a new space, because expenses have gone up, and because frankly our regional prices were quite the market, but hourly right now, it is $8 per person per hour, and that translates into $32 for a table per hour.
“Honestly, if we had stayed in our old space,”
we would have been sustainable, we would have definitely been on track to even make a profit as a business for this year. Moving to the larger space has opened a lot of doors, it's gotten a lot of people in, it's done a lot of stuff for us, but it's also a lot more rent.
So now we're moving back towards sustainability. And again, I consider myself very fortunate to be able to just shovel money into this, like crazy, to get it to work maybe faster than the otherwise way. Remembering years ago, how many times my staff members
and did personal friends would come back being like, well, I went to Sparrow's Nest, but we closed two hours early,
because literally no one was there, and that was like the first month.
And now we have this just full room of people, it's loud, they're all talking, they're all having good time, people are laughing, I'm gritting my teeth 'cause someone slammed the tile, but it's, you know, it's at moment of like, it's actually happening.
And it's just such an immense feeling of gratitude
Really full little bit, and just like, here we are.
David Breznik, Sparrow's Nest studio, New York, New York,
if you're looking to get in on a game. Whether it's Mahjong or something else, let us know what keeps you going,
“would you marketplace that org slash my account?”
This final note on the way out today, in which I split hairs
in an annoying, but hopefully informative way. The unemployment rate, as we were talking about up at the top of the program, held steady at 4.3% in April. Or did it?
“Take out a couple of more decimal points,”
decimal places, rather you'll see that in March,
3, it was 4.256% rounded obviously to 4.3. April, 4.337% rounded down to 4.3. I told you it was annoying, didn't I? Our theme music was composed by BJ,
“leader of in Marketplace's Executive Producer”
as Nancy Pargali. Joanne Griffith is the Chief Content Officer Neil Scarborough's Vice President and General Manager. I'm Kai Rizdahl, have a great weekend, everybody. We will see you back here on Monday, all right?
This is APA. - Anxiety, depression, bipolar disorder, at least half of us will experience a mental illness in our lifetime. In a new series of special reports from Call to Mind,
we hear about the mental health impact of stress, climate change, immigration, and more. Tune in for conversations with people, managing hardship, and experts seeking solutions, listen to Call to Mind from American Public Media.
(upbeat music)
