Some things haven’t changed

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Speaker 5 On the program today, a tale of two metals.

Speaker 5 What we are eating and what we are drinking, and cars and the regulation thereof. From American public media, this is Marketplace.

Speaker 5 In Los Angeles, I'm Con Rizdal. It is Monday today.
This one is the 10th of February. Good as always.
Nice to have you along, everybody.

Speaker 6 So, steel and aluminum.

Speaker 5 Aluminum and steel. At this point, they just kind of go together, right? The two critical industrial metals have been joined at the proverbial hip since 2018 in the first round of Trump tariffs.

Speaker 5 With a second round on the way, it's worth a note that the two metals, the industries that produce them and the markets they serve, are actually quite different.

Speaker 5 Marketplaces Mitchell Hartman gets us going today.

Speaker 7 Let's start with steel. The U.S.
produces most of what it uses. After Trump imposed tariffs during his first administration, domestic production rose, says Jennifer McEwen at Capital Economics.

Speaker 8 The import share of steel in the U.S. has been falling since 2018.
It's now around 32%, so around a third.

Speaker 7 U.S. steelmakers will likely benefit from tariffs on foreign competitors.

Speaker 8 And, says McEwen, there's quite a lot of spare capacity in the U.S. steel sector, which means that there is scope for production to pick up again.

Speaker 7 Rising steel prices will affect a lot of industries, starting with construction.

Speaker 10 There are a lot of worries among contractors.

Speaker 7 Brian Turmail at Associated General Contractors of America says steel is built into what contractors charge for projects.

Speaker 10 In home building, you know, a multifamily unit, you might be costing out 50% of washers and dryers, 50 stoves, 50 dishwashers.

Speaker 7 Aluminum is a whole different metal. We only produce about half of what we use domestically.
The vast majority of what we import comes from Canada.

Speaker 7 It's used in electrical components, appliances, and aircraft, says Richard Abulafia at Aerodynamic Advisory.

Speaker 9 Boeing's biggest product, the 737, the structure is 90% aluminum.

Speaker 7 Aluminum is not cheap to make, says Gary Huffbauer at the Peterson Institute for International Economics.

Speaker 9 It requires a lot of power, which turns bauxite into the metal. Well, there's a shortage of electricity now in the U.S.
with the AI boom.

Speaker 7 So he says it's unlikely domestic aluminum makers will be able to increase their output and compete with foreign producers, even with a 25% tariff on imports. I'm Mitchell Hartman for Marketplace.

Speaker 5 Traders on Wall Street today looked around, saw the chaos, and said,

Speaker 4 yeah, we're okay with that.

Speaker 5 We'll have the details when we do the numbers.

Speaker 5 Business owners and analysts and economists are all trying to make sense of the changes in American economic policy. You have heard some of those people on this program.

Speaker 5 Consumers, though, are trying to digest the changing policy landscape in very personal terms. Their jobs, their wages, and how much things are going to cost.

Speaker 5 We got a sense of how they are feeling today with January's survey of consumer expectations out from the Federal Reserve Bank of New York. Marketplace's Elizabeth Troval has that story.

Speaker 11 In January, consumers really held on to their belief that inflation isn't getting any better or any worse. Rice University, Zach Bethune.

Speaker 13 Consumers are dug in. So, you know, inflation expectations are now kind of, you know, maintaining around 3%.

Speaker 13 That's a percent higher than the Fed's target of 2%.

Speaker 11 And consumers are expecting commodity prices to increase. Luke Pardue is with the Aspen Economic Strategy Group.

Speaker 14 A lot of these commodity prices are forecast to rise, like housing and energy prices. And so that's one thing thing that I think is a bit of an underlying concern in the report.

Speaker 11 In terms of what consumers expect from the labor market, Pardue says they're comfortable in the positions that they have.

Speaker 14 The sort of tight labor market has loosened a little bit.

Speaker 11 Though, everything is still very wait-and-see for consumers like Denny Cohenemse.

Speaker 15 I feel confused.

Speaker 11 She's also an economist with Morning Consult.

Speaker 15 It takes time, I think, for consumers to really digest the news, especially when it comes to inflation.

Speaker 11 Though there are some early indications that for some consumers, we do see that downward momentum.

Speaker 11 She says her recent data shows when consumers think about the future, it's starting to sour their mood about the economy. I'm Elizabeth Troval for Marketplace.

Speaker 5 Continuing with consumer-ish news, this is a big week on the earnings calendar, food and beverage in particular.

Speaker 5 McDonald's, Kraft Heinz, Coca-Cola, Nestle, and a whole bunch more are going to be reporting results.

Speaker 5 And since food is such a big part of both our essential and our discretionary spending habits, what these companies have to say is going to tell us a lot about consumer trends.

Speaker 5 Marketplace's Kristen Schwab looks at how we are spending our food budgets these days.

Speaker 17 Formally speaking, Eric Gonzalez is a restaurant analyst at Key Bank. Less formally, he is a regular at his local Chili's.

Speaker 10 You know, because my kids love it. And I can get in and out of there for less than 40 bucks with my three little girls.

Speaker 17 Chili's, yes, that Chili's, has made an unexpected comeback. In its most recent quarter, the chain reported same-store sales growth of over 30%.

Speaker 17 Gonzalez says it shows consumers aren't only thinking about prices. They're focused on what those prices get them, like sit-down service or bottomless chips.

Speaker 10 And I think consumers will pay a dollar more if you're meeting some other consumer need.

Speaker 17 He says in the last couple of years, fast food got too aggressive with its pricing. So people turned to fast casual and full-service restaurants.

Speaker 17 But consumers are compromising, says Robert Byrne, who leads consumer research at Technomic.

Speaker 16 Consumers are still spending as many dollars as they always have at restaurants. It just translates into fewer actual occasions.

Speaker 17 It means overall, food budgets have stayed consistent.

Speaker 17 The average American puts about 60% of theirs toward food at home and 40% toward eating out, according to David Portolatin, a food industry advisor at Circana.

Speaker 17 He says consumers' daily eating habits can be fickle.

Speaker 10 You know, what's going on with pricing and what happened with the weather. But mostly, our share of consumption has really been very, very stable.

Speaker 17 Breakfast, lunch, and dinner are a given.

Speaker 18 It's just up to grocers and restaurants to duke it out and see who wins each meal.

Speaker 19 I'm Kristen Schwab for Marketplace.

Speaker 5 The huge data centers used by the big tech giants, Amazon and Meta and Google and all the rest, they are a growing part of the modern economy.

Speaker 5 But where they get built can literally change the landscape, especially when you factor in how much electricity those places need.

Speaker 5 That gets me to a story I saw the other day in Switchyard magazine about the power demands of data centers in central Ohio. Maya Fraser wrote it.
Maya, thanks for coming on the program.

Speaker 7 Great to be here, Kay.

Speaker 5 Would you tell me what these data centers in central Ohio look like?

Speaker 20 In the plainest terms, they're just buildings,

Speaker 20 but they're kind of monstrosities in a lot of ways.

Speaker 20 Where I I live in central Ohio, there has been just a massive boom in data center development in a town called New Albany, which is north of Columbus.

Speaker 5 For those unfamiliar, what's inside these places? Because that's the nub of this story.

Speaker 20 Data centers require an immense amount of electricity to run. And so much of what sort of comprises these buildings is wires and network connections and electrical equipment.

Speaker 2 Aaron Trevor Burrus,

Speaker 5 and that gets us to why we're talking to you and what really is going on in central Ohio, which is the electricity demands of these places. Virtually everything inside it requires electricity.

Speaker 5 And the power companies are stringing them across the central Ohio landscape, as you say.

Speaker 20 Yes, and more is coming. There's a bit of a battle over some new transmission lines,

Speaker 20 about 13 miles long, two different lines that are going to be running from a city a little bit, well, it used to be a small farm town north of New Albany all the way to just on the outskirts of sort of the residential areas of New Albany.

Speaker 20 It's not like the lines you see behind your house or the lines you might see in your neighborhood. I mean, the...
the trunk of these things are

Speaker 20 as big as like a sequoia. They're just just massive.

Speaker 5 You, I think this is the beginning of the piece, actually.

Speaker 5 You stood there for a while and you listened, right?

Speaker 20 I did.

Speaker 20 I had sort of heard rumors that these things crackle, and I had been doing some reporting among some farmers that are sort of right in the bullseye of where these things are going to run through and talked to a lot of residents who live around these of just what is it like.

Speaker 20 And it's quite eerie. I mean, I stood under them, and you just, you feel this crackle and this slight hum.

Speaker 20 It's a very unnerving feeling to be underneath these.

Speaker 5 Tell me about the farmers and

Speaker 5 the towns that live under these wires that you spent some time with.

Speaker 20 The area between

Speaker 20 has always been a very rural area. A lot of the farmers have been sort of feeling powerless to this development that's happened.

Speaker 20 And not only has it had an influence on the cost of farmland, but it's also influenced people who moved to this area because they were trying to escape the sort of sprawling development that's happening both with Columbus and around

Speaker 20 New Albany, where a lot of the big tech development has unfolded.

Speaker 5 It seems likely, given the way society is going, that demand for these data centers and thus demand for electricity is only going to grow.

Speaker 5 What then happens to the communities underneath the power lines and around the data centers as that growth happens?

Speaker 20 Well, we've seen a massive increase in the price of farmland, which has made farming unsustainable for

Speaker 20 families who have farmed for generations around this area.

Speaker 20 We've also seen

Speaker 20 very little public benefit to the development of these data centers in the area.

Speaker 20 The deals that have been made

Speaker 20 have all been negotiated by Jobs Ohio, which

Speaker 20 is the privatized arm of economic development in Ohio.

Speaker 20 And I think that's left a lot of local people feeling like they are powerless before this massive expansion of big big tech infrastructure in middle America.

Speaker 5 Maya Frazier, writing about

Speaker 5 central Ohio, big tech and electricity. Maya, thanks a lot.
Appreciate your time.

Speaker 20 Thanks, Kai.

Speaker 5 Coming up.

Speaker 24 Nearly one-third of their monthly payment is going directly to property insurance and property taxes.

Speaker 5 The actual costs of being a homeowner right now, but first, sure, why not? Let's do the numbers.

Speaker 5 Dow Industrial is up 167 today, about four-tenths percent, closed at 44,470. Did the blue chips? The NASDAQ gained 190 points.
That's 1% 19,714.

Speaker 5 The S ⁇ P 500 added 40 points, about 7 tenths percent, 6,066. Kristen Schwab is just telling us about

Speaker 5 consumer spending on food at home versus in restaurants.

Speaker 2 So here you go.

Speaker 5 McDonald's beefed up 4.8%. That's despite posting disappointing quarterly revenue today.
Wendy's slid 6 tenths percent. Coca-Cola fizzed up 1 1 10th 1% today.

Speaker 5 Brinker International, parent company of Chili's in Maggianos, Italy, shrank two and four-tenths percent today. Here's the ticker symbol of the day, EAT for Brinker International.

Speaker 5 Shares of On Semiconductor dipped 8.2% after posting ho-hum fourth-quarter earnings. The Global Chipmaker reported a decline in sales and said the 2025 outlook, quote, remains uncertain.

Speaker 5 That can't be good. Bond prices fell.
Yield on the 10-year T-note went up 4.50%.

Speaker 5 You're listening to Marketplace.

Speaker 3 This podcast is supported by Odo. Some say Odo business management software is like fertilizer for businesses because the simple, efficient software promotes growth.

Speaker 3 Others say Odoo is like a magic beanstalk because it scales with you and is magically affordable.

Speaker 3 And some describe Odoo's programs for manufacturing, accounting, and more as building blocks for creating a custom software suite. So Odoo is fertilizer, magic beanstock building blocks for business.

Speaker 3 Odoo, exactly what businesses need. Sign up at odoo.com.
That's odoo.com.

Speaker 25 This marketplace podcast is supported by Wealth Enhancement, who ask, do you have a blueprint for your money?

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Speaker 19 You've finally broken loose from work. Three friends, one tea time,

Speaker 22 and then the text.

Speaker 19 Honey, there's water in the basement.

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Speaker 5 This is Marketplace. I'm Kai Rizdahl.
Texas has gotten rid of its requirement that cars pass an annual safety inspection.

Speaker 5 Utah, New Jersey, and Florida have already done away with their routine safety checks.

Speaker 5 29 states do still require annual emissions tests, but just 15 of the states in the Union and the District of Columbia oblige drivers to get a regular once-over to make sure their car is in decent shape.

Speaker 5 Marketplaces Henriette looks at what that patchwork of rules means for drivers and for the businesses in the auto repair industry.

Speaker 23 Technician Max Burlow has a 2006 Subaru Forester up on his lift at Gurlington Garage, a repair shop in South Burlington, Vermont.

Speaker 23 In this state's snowy climate, road salt does a good number on most cars and trucks every winter, so a big part of a required annual inspection is looking at rust.

Speaker 24 Basically, if you can put your finger through it,

Speaker 20 that's bad.

Speaker 23 The rust on this forester hasn't gotten to that point, but to check, Burlow taps around on the underside of the car with a screwdriver.

Speaker 24 But yeah, so it's like flaky, you know, there's some flakes coming off, but it doesn't like totally destroy like the integrity of it.

Speaker 23 Good enough. Burlow also checks the lights and the windshield wipers and removes a wheel to check rust buildup on the brakes.

Speaker 23 After about an hour, he determines it gets to pass and puts a sticker in the corner of the windshield, good for another year. Total cost, about 84 bucks.

Speaker 27 We catch things before they fail so you don't have breakdowns.

Speaker 23 Demony Pollett is the owner of Gurlington Garage. She acknowledges inspections are decent business.
She says her shop does 30 to 40 a month.

Speaker 23 And a lot of times, if something needs to get fixed, customers will get the work done there. But

Speaker 27 we are always really clear with people. If we fail you for something, you do not have to get it fixed with us.
You can bring it anywhere you want.

Speaker 23 This process is not exactly popular with drivers, like Thomas Dunbar, a high school teacher in Cabot, Vermont. He remembers one failed inspection several years ago.

Speaker 28 It was a lease Toyota Yaris, and I took it for inspection. And they told me that my brake pads were too thin.

Speaker 23 So he went back to the dealership, which said his brakes were fine, then to a different mechanic who passed him, he says. But he had to pay for both inspections, the pass and the fail.

Speaker 28 It just feels like it's easy to be taken advantage of.

Speaker 23 That was essentially the argument of state lawmakers in Texas who passed a law that did away with that state's safety inspection requirement.

Speaker 23 The law might save Texas drivers a little time, but it upended Carissa Barnes's decades-old family business, a chain of inspection stations in the San Antonio area.

Speaker 29 They look like a Texas flag.

Speaker 19 It is a metal building painted like a Texas flag.

Speaker 23 Just a single bay that drivers could pull into and get their inspections done really fast.

Speaker 18 We created an entire procedure and process on how to inspect it, and we can get you out in nine minutes.

Speaker 23 At its peak, the company had 10 locations.

Speaker 6 Now they're all closed.

Speaker 23 Barnes has shifted her attention to another business focused on vehicle registrations, but she thinks eliminating inspections was a mistake.

Speaker 18 What I'm very concerned about is that because we no longer have an annual safety inspection, cars are just going to be unsafe.

Speaker 27 The roads will be less safe.

Speaker 23 But whether requiring an annual inspection actually reduces the number of crashes is not totally clear.

Speaker 23 Shubhashish Dash, an associate professor at Texas State University, studied whether inspections improve safety in 2019.

Speaker 23 We did not find any evidence that states with inspection improve safety. But he says his study only looked at data on fatal crashes.
So he says the subject needs more research.

Speaker 23 Whether or not your state requires you to get your car checked out by a professional, it's never a bad idea, says David Bennett, a senior manager at AAA.

Speaker 23 But he says a lot of drivers tend to put off regular maintenance, replacing burnt-out headlights or worn-out tires, for example.

Speaker 30 When you start avoiding some of those things,

Speaker 30 something's going to break down. more than likely.
And then that cost is going to be more than if you just maintained it overall.

Speaker 23 As for taking advantage of inspection customers, Demony Pollett in Vermont says at her shop at least, it doesn't happen.

Speaker 27 Cars, especially in Vermont, have lots of problems. We do not have to make out problems in order to do business and be successful.

Speaker 23 There are some bad apples out there, but when your mechanic tells you your car won't pass inspection, she says, they're usually not trying to rip you off. I'm Henry Abbott for Marketplace.

Speaker 5 Home prices in this economy are high. We've talked about that a lot.
Also high, but a good deal less talked about, homeowners insurance and, depending on where you live, property taxes.

Speaker 5 Combined, according to new data from Intercontinental Exchange, which owns, among other things, the New York Stock Exchange, they say taxes and insurance are becoming ever larger chunks of people's monthly payments.

Speaker 5 Marketplace of Samantha Fields reports.

Speaker 12 Tim Anderson and his wife bought their house in Austin, Texas in late 2019. Then the pandemic hit and home prices started rising fast.

Speaker 21 And our property taxes and home insurance has really changed.

Speaker 12 Especially in the last year. Combined, they've jumped almost $3,000.

Speaker 21 And that kind of gave me pause. And I said, oh, well, this is something to kind of pay attention to.

Speaker 12 Lots of people are having similar experiences all across the country.

Speaker 24 Andy Walden, head of mortgage and housing research at Intercontinental Exchange, says for the average single-family homeowner now, nearly one-third of their monthly payment is going directly to property insurance and property taxes, which is the highest share we've seen in the 10 plus years we've been tracking those metrics.

Speaker 12 And a growing number of homeowners are putting upwards of 50% of their monthly income toward taxes and insurance.

Speaker 12 Walden says one of the biggest factors driving insurance up in particular is climate change, which is making extreme weather more frequent and intense.

Speaker 24 More than 10% of U.S. homes were directly in the path of a hurricane within the last six months.

Speaker 24 And then you can look at what's going on in Los Angeles with some of the largest, most destructive wildfires that we've seen in state history out there.

Speaker 24 Then you can look at the rising costs to repair and rebuild in the wake of those storms.

Speaker 12 Because of all of that, insurers are increasingly refusing to renew homeowners' policies and raising their prices.

Speaker 12 Amy Bach at the nonprofit United Policyholders says, while climate change is a big factor.

Speaker 31 What I think is more driving the premium increases and the reduced competition across the country is the explosion in insure tech tools that insurers are using to make their business decisions.

Speaker 31 So, for example, drone images of people's roofs and properties as a basis for dropping them.

Speaker 12 And artificial intelligence tools that mine databases with all sorts of information about homes to give them a risk score.

Speaker 31 They are taking these tools, these risk scores, and they are using them to non-renew existing customers. They're using them to reject new applicants.

Speaker 12 Also, the more a home is worth, the the more it costs to insure, and the higher taxes are, too.

Speaker 12 Jenny Schutz at Arnold Ventures says most existing homeowners probably haven't had their taxes jump too much, even if the value of their house has.

Speaker 32 There are a lot of ways that states and localities try to protect people against their property taxes going up.

Speaker 12 By capping how much the tax rate or dollar amount can go up each year. But there's no such cap when homes go up for sale.

Speaker 12 So people who are just buying now are likely paying more in property tax than longtime owners.

Speaker 12 Andy Walden at Intercontinental Exchange says all of this on top of already high home prices and mortgage rates means owning is increasingly unaffordable for many people.

Speaker 24 Among folks that are on the lower end of the income ladder, we've started to see mortgage delinquency rates start to creep up, especially among folks that have bought over the last couple of years.

Speaker 12 For many others, home ownership is just eating up a bigger chunk of their monthly income. Kurt Alabach and his wife bought their house near Tampa in the late 1990s.

Speaker 12 Now their home insurance is almost $11,000 a year, plus a bit more for flood insurance, double what it was just in 2020. And even though they're paying a lot more, they have less coverage.

Speaker 33 I've kept the cost down by increasing my deductible, which, you know, not necessarily a great thing.

Speaker 12 Insurance costs are one of the reasons he and his wife are now planning to sell their house.

Speaker 33 I'm still working largely because, you know, what's going to happen next with insurance here in Florida, right?

Speaker 33 You know, I can't say, hey, there's my income stream needed in retirement when my homeowner's insurance may double next year.

Speaker 12 So they're planning to leave Florida and move to Little Rock, Arkansas, mostly because that's where their daughter lives now, but also because housing and insurance cost less there, too.

Speaker 12 I'm Samantha Fields for Marketplace.

Speaker 5 This final note on the way out today, of which, to be honest, it is difficult to know what to make.

Speaker 5 The Wall Street Journal reported this afternoon that Elon Musk and a group of investors have made an unsolicited offer to buy OpenAI, whence we got ChatGPT, for $97.4 billion.

Speaker 5 Musk and OpenAI CEO Sam Altman have a history of bad blood, so it is difficult to know what is going to happen with this one.

Speaker 5 More chaos, probably, honestly.

Speaker 5 Our daily production team includes Andy Corbin, Nicholas Guillam, Maria Hollenhorst, Iru Ekpinobi, Sarah Leeson, Sean McHenry, and Sophia Terenzio. I'm Kyle Risdahl.

Speaker 5 We will see you tomorrow, everybody.

Speaker 5 This is Apm.

Speaker 19 You've finally broken loose from work. Three friends, one tea time,

Speaker 22 and then the text.

Speaker 19 Honey, there's water in the basement.

Speaker 19 Not exactly how you pictured your Saturday. That's when you call us, Cincinnati Insurance.
We always answer the call because real protection means showing up, even when things are in the rough.

Speaker 19 Cincinnati Insurance. Let us make your bad day better.

Speaker 19 Find an agent at cinfin.com.