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From American Public Media, this is Marketplace. In Los Angeles, I'm Kyle Rizdahl.
It is Friday today, the 14th of February. Good as always to have you along, everybody.
It has been a week in this economy.

Inflation, of course, retail today and, you know, all the rest. Rachel Siegel is at The

Washington Post. Jordan Holman is at The New York Times.
Hey, you two.

Hi, Kai.

Hey, Kai.

Jordan, I would like to begin with you and the topic of retail sales. And I would like to point

out that those sales were down, according to the information we got this morning. Also, consumer sentiment is not great in this economy.
Here's what I want to know. What is your tell on consumers in this economy? What is the canary in the coal mine that you're looking for to say, you know what, this is turning into a problem? Yeah, so retail sales were down.
But the analysts and economists I talked to today were like, it is not a concern right now. Like January is always down.
There was also it was a noisy report. There was the fires in California.
There was frigging temperatures, all sorts of stuff. But I do think I am keeping an eye out for kind of people being fed up with shopping a little bit.

Like if it's more so that the pullback is less of a, I spent everything in December around Christmas or more of a like going forward, I'm just kind of concerned about what's happening or I think prices are going to be higher, which kind of gets to the sentiment thing. That would be a real concern, but it's hard to say that that is what this report is telling us.
All right. So, Rachel, I go to you and I go to the subject of most macroeconomic policy interests right now, the idea of tariffs, this thing that President Trump says he wants to do, which is reciprocal tariffs, which is different than the tariffs of 25 and 10 percent that he has talked about on various and sundry countries.
Why are reciprocal tariffs different? Well, reciprocal tariffs are this latest wave of, as you said, the kind of trade approach that Trump has been taking. But the idea is basically to clap back, if I can say that, at the way tariffs are set by other countries.
You know, if there is a rate that is set that is a little bit higher than what we have here, the idea is to balance those out and sort of reciprocate in that way. We don't exactly know what that looks like yet.
They haven't been ordered into effect. But the message that we got in a memorandum this week is that Trump wants to explore what that looks like, have a lot of pen to paper to figure out what sort of calculations might be customized to specific countries.
There might be a little bit of room for negotiation. They're not supposed to go into effect until a little bit later this spring.
But the idea is basically to cover even more surface here. It's not just going to be about a specific country or a specific item, but to make sure that there is this more, in the president's view, even playing field for the way these rates are set.
Right. So a couple of follow-ups then.
And Jordan, the first one goes to you. What are retailers doing to prepare for this? You have to call it a near certainty that this is going to happen unless he does some deal-making, as sometimes happens.
But are they pulling forward their orders? Are they getting ready? What's happening behind the scenes in retail for these tariffs? Yeah, some people were pulling for orders, but one kind of wrinkle to all of this was, you know, a lot of production comes out of China, obviously, but it was Chinese New Year, right before the tariffs went into place. So factories shut down for three weeks.
So there was just a backup. And I've talked to some entrepreneurs that said, I have a backlog.
I try to prepare for this moment. But everyone was trying to race to get more things.
So there's a question about if stockpiling actually works. I think they're also just trying to negotiate with their vendors to try to basically charge them or charge them more so they're not charging customers more, passing on that cost to us.
So they're trying to pull around different levers, but it's also a very difficult time to do that because we're seeing reciprocal tariffs. And then de minimis is being taken away.
Things are changing every day and that's a very not great place to be if you're someone trying to plan business. Rachel, with the I guess it should be standard caveat here that tariffs are import taxes that are eventually paid by the American consumer.

What is your what is your what is your level of economic peril that seems to be facing us?

Because if we're paying more than there's the inflation challenge, there is the growth challenge there. There are many things that happen if and when these tariffs happen.
Yeah. So what we made it five minutes without saying the word uncertainty.
I think I think I think we're back. And, you know, this is this is another dose of that, both because the specific policies themselves are still unclear or they could change in this direction or that direction, or they could be even more than what we understand them to be now.
And as you said, we got numbers this week that showed inflation was a little bit hotter than we expected. I think there's going to be tremendous ripple effects through the entire job market, given what we're seeing with reductions in the federal workforce right now.
And we're three weeks into the new administration. So it's hard to put a finger on exactly what the fiscal or macroeconomic impact will be because it has to be part of this larger pie that is also just changing by the minute.

Yeah, we should we should call those, you know, reductions in the federal workforce. I will certainly call those what they are, which is mass firing.
I don't want to put words in your mouth, but they are mass firings. Jordan, Rachel talked about inflation, which we haven't yet mentioned this afternoon.
It is sticky. It's bumpy.
It's proving to be more persistent than Powell and the gang want. Discuss for me, would you, what degree of economic peril you think that poses now as consumers look again at prices that are not going down as fast as they might hope? They certainly don't like it.
And I know I've talked to people in the retail space who are already like 2025 was supposed to breathe a sigh of relief. Okay, we got through some really bumpy higher prices and all these kind of things.
And now we will get our consumers back and they'll be happy with us. Now they're looking at this, they're thinking about possible unemployment in certain areas like the DMV area and thinking, okay, well, do I have to change my whole business plan? Will people keep buying? And so it's really creating the situation of like that uncertainty word again, of not knowing if people can spend as much as was anticipated going into this year.
DMV for those not in the East Coast know is Delaware, Maryland and Virginia sort of around the capital region. Rachel Siegel, you got you got 30 seconds to answer this one.
What is the thing you are looking for that's going to be an economic tell for you about things maybe going sideways? Yeah, I think it's really the reach of these, you know, layoffs, buyouts, drastic cuts in the federal government, because that's a lot of people's jobs. It's the kind of spending power that Jordan's talking about.
It's livelihoods. It's, you know, the exact types of things that those services provide.
And I think we're only just starting to get a picture of how drastic those are going to be. Rachel Siegel at The Washington Post and Jordan Holman at The New York Times on this Friday.
Thanks, you two. Thank you.
Thanks. On Wall Street today, traders kind of took it easy heading into the weekend.
We'll have the details when we always have the details. Retail sales do usually drop in January, as Jordan said.
But also, as usual, there is economic truth underneath the headline numbers. Seasonal swings, plus snowstorms and wildfires, mean a number that tells us how much people are shopping does not necessarily give us the full picture of how much people want to be shopping.
Marketplace's Kimberly Adams did some digging for us. Tracking retail sales is a way to measure consumer demand in this economy, but the overall number, almost $724 billion in January, can obscure a lot of nuance, since it's basically a tally of the value of goods and services sold.

Erica Groshen is a former commissioner at the Bureau of Labor Statistics and is now a senior economic advisor at Cornell. If what you're trying to look at is some measure of consumer confidence, then you don't want the lumber that you're looking at to be driven by whether or not the harvest for avocados was good.
So there are a few different breakdowns of the data in the census report, isolating a control group, sometimes called core retail sales, that strips out some of the more volatile categories like automobiles, gasoline, building materials. Plus, different groups and companies have their own versions of core retail sales depending on what view of the economy they're trying to get, says Brian McCarthy, retail strategy lead at Deloitte.
So you could see one core group being your typical grocery, soft goods, hard goods, and then another group being your grocery, soft goods, hard goods, including gas and restaurants. And changing those inputs can make a big difference in the takeaway headline number.
Bea Chem, a managing director at S&P Global Ratings, says, for example, in January's report. If you stripped out, you know, like autos,

then the decline was actually a little bit less, you know, to the overall retail sales number. So

that was down 0.4 percent versus down 0.9 percent with everything in. Same data, same economy,

just a slightly different view of it. In Washington, I'm Kimberly Adams for Marketplace.
The spending habits of consumers in this economy can be divided broadly into two categories, goods and services. And more often than not, we visit different businesses for each.
Retailers for goods, restaurant salons, dentist offices, what have you, for services. But what about a business that offers both goods and a service? Here's today's installment of our series, My Economy.
I'm Shanali Thomas. And I'm Mindy Kuhn.
And we're the owners of CCB Bistro and Vine in Rock Hill, South Carolina. We both have two businesses.
Shanali owns a catering gourmet foods business, and I own a publishing company as well. We have a mutual friend who knows that I love to cook, and she said, you need to meet my friend who's a book publisher because you need to write another cookbook.
And I said, no. And she said, you should meet her anyways.
And so I did. We just kind of hit it off and ended up doing my cookbook, which came out fabulous.
Part of my goal as a publishing company was to have a five-year plan to open a retail component to sell our books amongst other books. And Shanali had the end goal of trying to do or wanting to do a small bites, charcuterie boards and wine and keep it quaint and little boutique style.
And here we are with a big old restaurant. When you walk into the restaurant, the books are around the edge.
So there it's not even set aside that you have to go through a separate door. It's it is one space.
Oftentimes people come in, they'll get drinks or food and then they'll shop for books. It's tough.
Restaurant business is a rollercoaster ride of up and down, and there's always some reason as to why we think it's slow, or how did it get so busy, or how did we get these people? Well, and it's exactly like that. The last latter part of the year, we were kind

of slow and had some slow moments. And then this year we've really started, knock on anything would, we've started off with a good clip.
We did decide to do more events this year. Our area is kind of I call it a two town, which if it's too hot or too cold or

too rainy, then we tend to be slow. We have an amazing core group of regulars, but having the

events will continue to kind of giving that underlie of at least you have those, that number

of people who sign up for those events to be present for that particular night we are uh both sort of control freaks type a personality and um you would think that two people like that with buttheads and actually we mesh really well together we're we're a very good...

Yin and yang.

Yeah.

Mindy Kuhn and Shanali Thomas, the owners of CCB Bistro and Vine in Rock Hill, South Carolina.

This series simply will not work without you. So write to us, would you? Tell us your story.
Marketplace.org slash myeconomy.

Coming up. Some love the protein.
Some like the convenience. $3 billion worth of meat sticks.
But first, let's do the numbers. Dow Industrial is down 165 today.
Four-tenths percent, 44,546. The NASDAQ gained 81 points, four-tenths percent, 20,026.
The S&P 500 gave back 44 points, basically unchanged percentage-wise, 61 and 14. For the week, the Dow grew six-tenths percent.
The Nasdaq up 2.6 percent. S&P 500 lifted about one and a half percent.
Airbnb exceeded expectations. The company said profits were fueled by a 10 percent year-over-year uptick in bookings and share buybacks.
Shares upgraded themselves 14.5 percent today. It is Valentine's today.
Actually, Valentine's Day. Let's see if I can get that right.
Big deal for chocolate makers, right? Coco Futures up 80 percent this year, ending today at $10,308.13 per metric ton. Hershey's melted down 1% today.

Mondelez International down 0.6%. Tootsie Roll Industries softened 1%.
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This is Marketplace. I'm Kai Rizdal.
The border between the United States and Canada is, as it stands now, the longest undefended border in the world. It's also one of the most economically intensive.
Last year, almost $800 billion worth of stuff crossed between the two countries. And about a quarter of that went over a bridge between Windsor, Ontario and Detroit, Michigan.
So if you're looking for a place where the looming 25 percent Trump tariffs and whatever Canada decides to do in return, if you're looking for a place where that's going to be felt the most, look no further. Michigan Public's Laura Weber Davis has that one.
The city skylines of Detroit and Windsor face each other across the Detroit River. Folks on the Canadian side grew up listening to Motown and root for the Detroit Lions.
Southeast Michiganders grew up watching Canadian kids television and know the lyrics to O Canada. The typography is more or less the same.
I mean, the architecture isn't that different. There's just a sense of home.
Travis Wright works in advertising in Metro Detroit. He moved here as a kid, but he was born in Ontario.
I met him at the Detroit Riverfront. He comes here a lot to just absorb his two homelands.
As much as I am Americanized and even became a citizen,

like, I'm Canadian to the bone. Thousands of people on either side of the river have family

and friends in the other country. They cross the border for work every day or own property on the

other side of the bridge. There's a lot of cultural touch points from sports to food.

We're always going to be connected. So many people here feel this way about Windsor and Detroit.

You know, we're brothers from another mother. This is Sandy Barua.
He's the head of the Detroit Regional Chamber. He says he hears the outrage coming from Canadians over President Trump's tariff threats.
Which, frankly, I think outrage is deserved. Canada is our dear friend, both culturally and economically.
The Detroit Regional Chamber recently polled Michigan voters and found 68 percent of Michiganders view Canada as an economic friend. And the majority also view tariffs as detrimental to that relationship.
68% for anything. I mean, even apple pie motherhood and Chevrolet is an odd development these days.
So to have 68% of Michiganders agree on this point is a big deal. The key driver of the relationship here is the auto industry.
It's estimated that every vehicle that comes off the line here passes over the International Crossing seven or eight times, maybe more.

Parts built on one side cross over for installation and then back for more parts, ping-ponging until the car is built.

And so from an economic perspective, we're integrated very tightly.

Windsor Mayor Drew Dilkins looks at downtown Detroit from his City Hall office every day. He went to university in Detroit and spent some of his professional life there.
And so Detroit for me and for my family has just been an extension of my backyard. But Dilkins is now considering what economic levers he has to pull if President Trump's broad tariffs go into effect, maybe even canceling municipal bus service between the two cities.
And he says something else is happening at the street level. Canadians are beginning to shy away from buying any U.S.-made products because they feel burned.
Let me make no bones about this. This economic threat, it hurts.
The thought that there's going to be an economic assault by the United States on Canada, I mean, like shaking our heads saying, when did, how did we get here? How did this ever happen? The U.S. is sort of picking on their closest neighbor, largest trading partner, and what I would argue to be best friend.
But clearly friendship doesn't mean anything. Dilkens says Detroit and Windsor will remain close, no matter what.

But if a trade war breaks out, these cities will be on the front line.

In Detroit, I'm Laura Weber-Davis for Marketplace. Here's another retail tidbit.
Sales at grocery stores were up 5.2% over a year ago. And within your usual grocery store purchases, the fruits and the veggies, meats and milk, and all the other staples, there's an item in the snack aisle, or sometimes actually right at the register, that's gotten a lot more popular of late, to the tune of $3.3 billion last year popular.
Flavors of this packaged snack include dill pickle, taco, and teriyaki. Any guesses? And if you said potato chips, no.
Meat sticks. Jennifer Williams wrote about them in the Wall Street Journal the other day.
Jennifer, welcome to the program. Thanks for having me.
$3 billion worth of meat sticks in this country? Are you kidding me? People love their meat sticks. Some love the protein.
Some like the convenience of that versus reaching into a bag for, say, jerky. And some just really think it's healthier than, say, a bag of potato chips.
Can you define meat stick for me, please? I can, and I think there's some debate even in what I'll say.

I would say it's any meat offering packaged as a stick. It's in the name.
But people I spoke with would say some mass-produced options shouldn't be called a meat stick. They should be called a snack stick because who knows whether it's meat or not.
Those who are familiar with meat sticks in the listening audience here will probably recognize Slim Jims, but my oh my, has this industry grown well beyond a Slim Jim, yes? Yes. The $3.29 billion in sales through the end of last year, that's up 10.4 percent, and it's the fastest growing category in snacks.
I'm sorry, say that again. Fastest growing category in snacks is meat sticks? Fastest growing category in snacks.
That's right. Wow.
You know, I always, and maybe this, my kids probably will chime in here at some point after this interview airs. They would always say, Dad, can I have a Slim Jam? Or, Dad, can I have whatever? And I'm like, nah, that's just salt and garbage, and it's bad for you.
But there are, like, grass-fed versions and, you know, stuff with fewer preservatives. I mean, there's a wide range of approaches here, shall we say.
Yes, that's true. I think brands are realizing the opportunity here, and there are, as you pointed out, there are sugar-free options and ones that claim to use only grass-fed meat.
And I think for those who are eating a meat stick with health in mind, they're gravitating towards those. Some, I don't think, care so much about what's on the label.
They just like the convenience. And then there are those, you know, meat stick purists who would only buy from a butcher or make their own, which I think is a whole interesting community.
There's a whole bunch of words in those sentences. People who are meat stick purists and people who are using meat sticks with health in mind.
I never thought I'd hear that all put together. You're reporting this story.
Well, so first of all, actually, let me ask you, I flipped through your biography on the journal site, as I do when I talk to people. You usually write about like, you know, financial news and audits and pensions and corporate finance.
Did you just see all these meat sticks in your local Piggly Wiggly and say there's a story there? No. So I cover Conagra brands and usually read through their earnings.
And shortly after their latest meat stick acquisition, they had some really fun commentary on the earnings call about sort of appealing to a more sophisticated meat stick eater. And so I thought there's prime ground there for a funnier story.
Journalism in the happening. Okay, so you do this story.
Did you try a bunch of meat sticks and do you have a favorite? I did. I tried several.
I would say I'm brand agnostic, but I do love a spicy flavor, whatever the brand may be. Fair enough.
Jennifer Williams usually covers financial stuff, meat sticks this time for the journal. Thanks, Jennifer.
Appreciate your time. Thanks for having me.
This final note on the way out today in which it will be stipulated that while nobody likes paying taxes, if we are going to have federal taxes, we are going to have to have somebody to collect them. Or perhaps not.
The Washington Post reports today that Elon Musk's operatives have begun meeting with high-ranking officials at the Internal Revenue Service. 9,000 layoffs is the figure The Post is reporting, mostly in the tax collection division.
That 9,000 is about 10% of the overall IRS workforce. It is necessary for me to say here, out of an abundance of caution and as a disclaimer, that as far as I know, taxes are still going to be due on April the 15th.

Our theme music was composed by B.J. Liederman.
Marketplace's executive producer is Nancy Farghali.

Donna Tam is the executive editor. Neil Scarborough is the vice president and general manager.

I'm Kyle Rizdahl. Have yourselves a great weekend, everybody.
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