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Speaker 5 So you know what?

Speaker 6 This morning's job report was not the most important thing that happened in this economy this week. From American public media, this is Marketplace.

Speaker 6 In Los Angeles, I'm Con Rizdahl. It is Friday today.
This one is the 7th of February. Good as always to have you along, everybody.

Speaker 6 We will talk about this morning's jobs report, of course, because data and the American labor market do matter.

Speaker 6 But everything

Speaker 6 else matters too to this economy. Catherine Rampel is at The Washington Post.
Suddenly Breddy is at Politico. Hey, YouTube.

Speaker 5 Hey, Kyle.

Speaker 6 Sudeep, let me start with you. The jobs report, 143,000 new jobs last month,

Speaker 6 4.0%

Speaker 6 on the unemployment rate. It was fine, right?

Speaker 7 I mean, thoughts?

Speaker 8 It was fine. It was steady.
It was a continuation, roughly, of a trend that we had seen in the prior months.

Speaker 8 And this is a pretty good place to be. This was also, of course, a snapshot of mid-January, which is when the survey

Speaker 8 gets taken. So we don't get to see the effects of what happens as a result of tariff fears, even if they're only fears.
What happens as a result of

Speaker 8 other uncertainty? What happens?

Speaker 8 There's a lot going on in this economy right now.

Speaker 8 But as we came into January, I think things were in a pretty good place, and that's a very solid foundation to build on.

Speaker 6 And we will take the foundation. Catherine Rampel, there I am at 5.15 this morning, Los Angeles Times, sitting in my chair in the living room.
And I pull on my iPad and

Speaker 6 I try to go to the Bureau of Labor Statistics website to just make sure that I can get there. And the data is coming through.
And I can't. And I'm like, oh, man, they actually did it.

Speaker 6 And then I realized that I was having connectivity problems of my own.

Speaker 6 Point being,

Speaker 6 there is data and information being shut down all over the place. You have been tracking this assiduously.

Speaker 6 Give us the once-over on what you've seen, but also why it matters to the health and the future of this economy.

Speaker 9 Sure. So to my knowledge, BLS, which produces the jobs report, has not been infiltrated or compromised in any way yet, just to make that clear.

Speaker 9 But lots of other sources of data across the the federal government have been disappeared for lack of a better term at this point. CDC data, NIH data

Speaker 9 from the

Speaker 9 EPA, greenhouse gas data that had been released. Lots of things have been taken down, as well as other kinds of scientific reports,

Speaker 9 guidance for physicians, things like that.

Speaker 9 And this is very troubling for a whole bunch of reasons, including that policymakers need measurements, however imperfect, to make decisions about laws and regulations.

Speaker 9 Voters need this information to assess their elected officials. Businesses need reliable, quantifiable data to make investment decisions.

Speaker 9 They need to decide, you know, where to place the new store or restaurant based on demographics, based on transit access, all sorts of things.

Speaker 9 Doctors need it to figure out treatments for their patients.

Speaker 9 You know, people abroad have lost access to data that helps, like in Nepal, one example that I saw to, you know, to predict mudslides that would, that would help people, to help save lives.

Speaker 9 And then there are other miscellaneous things like the CDC blocked or not, the CDC was told to stop publishing its weekly morbidity and mortality report, which has come out every week since 1952.

Speaker 9 And

Speaker 9 that has critical data and research for physicians, for other providers and scientists around the country, including the first issue that was blocked was slated to have two new studies about bird flu transmission that have since been muzzled.

Speaker 9 So lots of reasons to be concerned about this.

Speaker 6 Sadib,

Speaker 6 this next question comes as the signage for the USAID offices in Washington, D.C. is literally are literally being covered up and the letters taken off the wall.

Speaker 6 What we have here, in addition to that and the tariff, will he or won't he? Yes, he did, but then he got rolled and now he's not for another month. We have chaos as economic strategy.

Speaker 6 And my question is, today aside, right, major indices down about a percent, which all in all is not great, not huge.

Speaker 4 Why aren't the markets really reacting to this?

Speaker 8 We're in early stages of seeing what this is. Obviously, a lot of what's going on is outside the law.

Speaker 8 It is alarming

Speaker 8 when Congress has passed laws and they are not being executed.

Speaker 8 Seeing how far that goes, and once that starts hitting parts of the domestic economy, I think the markets will start noticing. But this will take time

Speaker 8 for all the effects to take shape.

Speaker 8 You don't just start hacking at government and expect that a few thousand jobs here, a few thousand jobs there will start to add up, but you're not going to necessarily notice it in the wider economy for some time, especially with government jobs.

Speaker 8 There are people who need to be furloughed. There will be long, long tail effects of this, even if there are retirements and buyouts that could take months to take effect.
So all of this will happen.

Speaker 8 At some point, something can break and we will see if the fiddling with the government computer systems and that sort of thing from the so-called Doge people

Speaker 8 are, as they step in,

Speaker 8 there are a lot of risk factors, but you actually have to see some things happen first.

Speaker 6 You know, we've talked before, so Debio and me, just really quickly, because I have one more thing I need to get to Catherine about. But you and I have talked about, you know,

Speaker 6 at some point something's going to break and then it'll be trouble. But it was always like a small break.
It was like, you know, government shutdown or, you know,

Speaker 6 maybe,

Speaker 6 I don't know, a default, but that would never really happen. This does seem to me to be the big, they're breaking it thing.

Speaker 5 No?

Speaker 8 It could lead to the thing breaking, but

Speaker 8 these are all always easier to see in the rear view mirror. We can look back and see what happened that led to this point, but we won't know until it actually happens that, oh, that's how it breaks.

Speaker 8 There are just dozens of safeguards within government to make sure that doesn't happen. But if you break down the dozens and bring it down to one or two, then eventually something will happen.

Speaker 6 Catherine, you have one minute for this answer, and I apologize for that in advance. There is, as Sudeep said a second ago,

Speaker 6 lawlessness abroad out there. There is extra constitutionality, if not unconstitutionality.
There is a fire hose of

Speaker 6 things that could really damage this economy that are happening and that we are having to report on.

Speaker 6 We talked about whether or not I was going to ask this in the morning meeting this morning that we had.

Speaker 6 How are you staying focused? You specifically.

Speaker 5 How am I staying focused? You. Well, currently.

Speaker 5 Well, yeah, I mean, join the club, but you know, people respect your opinion.

Speaker 9 I feel like I am just trying to get a hold of the fire hose of information. information.

Speaker 9 And

Speaker 9 I definitely feel committed to the mission of, you know, as a journalist,

Speaker 9 holding power to account. So that's definitely motivating.
But it is really challenging to grasp everything that's going on. Like I'm trying to track the data deletions.

Speaker 9 I'm trying to track what's going on at treasury and messing with the payment system.

Speaker 9 I'm trying to track what's going on with immigration and how that affects and the effects for both humanitarian reasons and economic reasons. And that's just a small subset of what I'm following.

Speaker 9 And plenty of other journalists have an even larger portfolio.

Speaker 9 So there's a lot to

Speaker 9 try to keep track of. And it's frankly challenging.

Speaker 6 Pace yourselves, people. Pace yourselves.
Catherine M. Pell at the Washington Post at Deep Ready at Politico on this Friday.
Thanks, you two. Thanks.
Thanks.

Speaker 6 Wall Street. As I said, it is a Friday.
Thankfully,

Speaker 5 it was fine. You know, a little down.

Speaker 6 Details, numbers, you know the drill.

Speaker 6 That jobs report we got this morning is about more than just jobs, of course. Lots of data in there, including a category called average hourly earnings, which is to say wages.

Speaker 6 They were up in January more than people had been guessing they would be, half a percent month to month, 4.1% year over year.

Speaker 6 You might remember back in 2021, 2022, wages were really climbing, growing nearly 6% a year at one point, as companies scrambled for workers in the pandemic recovery.

Speaker 6 Well, what then might the wages of January be bringing? Here's Marketplace's Mitchell Hartman.

Speaker 11 First thing to know, this could be a one-month blip, an effect of wildfires in California and bad winter weather across the country, says economist Bill Adams at Comerica Bank.

Speaker 12 When a natural disaster hits, you often see wage growth pick up because salary workers are still getting paid on a snow day. Hourly workers typically don't.

Speaker 11 Meanwhile, longer-term forces are pushing employers to keep giving workers hefty raises, even though the labor market's cooling with fewer job openings and fewer workers quitting to get higher pay in a new job, says Andrew Flowers at recruitment technology firm AppCast.

Speaker 13 Employers are hiring less, but they're also firing less. They don't want to lay off workers because they remember the scars of 2021 and 2022 when talent was so hard to find.

Speaker 13 They're giving in to some of these wage demands that compared to pre-COVID times look high.

Speaker 11 Hot wage growth has spooked the Fed in the recent past with fears it could generate more inflation, but it shouldn't this time around, says Flowers.

Speaker 13 This level of wage growth can be sustained because workers are producing more per hour.

Speaker 11 Right now, we're enjoying a healthy balance of wage and price growth, says Comerica Bank's Bill Adams.

Speaker 12 Wage growth outpacing inflation is a good type of economy to have.

Speaker 11 At last, check, consumer prices were up 2.9% year over year, wages 4.1%.

Speaker 11 And consumers sort of get that, says Joanne Hsu at the University of Michigan surveys.

Speaker 15 They actually are showing a slight uptick in their income expectations.

Speaker 11 Still, consumer sentiment has fallen sharply since the beginning of the year, driven in part by fears of tariffs causing more inflation.

Speaker 15 As for rising wages, Shu says, consumers don't necessarily see this passing through to their personal finances because they are expecting any income gains they see to be really eroded away by a resurgence of inflation in the year ahead.

Speaker 11 I'm Mitchell Hartman for Marketplace.

Speaker 6 As we tune in by the tens and tens of millions to the Super Bowl this weekend, consider this. There is more on the line than just that shiny silver trophy.

Speaker 6 According to the American Gaming Association, Americans are expected to spend $1.3 billion gambling on the big game. I, myself, will not be among them.
I lose bets all the time.

Speaker 6 But for those who are in the mood, parlay bets have apparently become a thing.

Speaker 6 Catherine Sayre at the Wall Street Journal wrote the other day about parlays, why they are so popular, and what they mean for gambling companies. Catherine, welcome to the program.

Speaker 6 Good to have you on. Thanks for having me.
As I said up in the introduction, I am a horrible gambler, and I imagine many in the audience are as well.

Speaker 5 And maybe they're not gamblers at all. What is a parlay bet?

Speaker 16 So, yeah, Americans have really taken to this kind of sports betting that, as it turns out, is really profitable for gambling companies. A parlay is where you bet on multiple things happening.

Speaker 16 Often it's multiple things happening within one game. So you might predict how the quarterback, a tight end, and a running back are going to perform.

Speaker 16 All three of those things have to come true in order to win, but the odds are much longer than, say, picking the winner of the Super Bowl this weekend.

Speaker 6 And is the payoff greater since the odds are longer, right?

Speaker 16 Exactly. So that's what makes it so alluring to betters.
The payout is much higher.

Speaker 16 It also, though, as you talk about in this piece, has, it's not like a socialization of it, but it has made gambling overall kind of more popular it really has parlays have tapped into sports fandom in a way that more traditional bets just haven't you know we're talking about our favorite players how they're going to perform the narratives on and off the field and so when you can turn that into a bet it's just a very fun experience You know what it is, actually?

Speaker 6 It reminds me of fantasy leagues, right? That's kind of the analog here.

Speaker 16 Absolutely. You're right.
It's an evolution from fantasy that focus on players and their data.

Speaker 6 Sportsbooks are making hay out of this.

Speaker 5 It's obviously more profitable if more people are betting, right?

Speaker 16 Absolutely. So when you think about a sports book offering a traditional bet on who's going to win the game, the company might take 5% to 7% of total bets wagered.

Speaker 16 With these parlays, they could take 20%, 30%, or more.

Speaker 6 We should point out here that gambling is not for everybody. And in fact, for a lot of people, it's a big problem.
I assume the gaming world knows this.

Speaker 16 Absolutely. Sports betting companies all have certain requirements by regulations, and they will tell you they have so-called responsible gaming policies in place.
Yeah.

Speaker 6 In the course of reporting this story, did you make some parlays yourself? Yeah.

Speaker 16 We did at the Wall Street Journal. We placed $209 $1 stand game parlay bet.

Speaker 6 Okay, wait. First of all, whose money?

Speaker 5 Journal's money or your money? The journal's money. okay all right okay all right continue

Speaker 16 um we didn't do so well we won only eight of those bets uh so the gambling companies took almost 114 dollars from us man money in the bank um did it make you want to keep on going though It did pique my curiosity to see if we kept going.

Speaker 16 Could we win? I felt that urge inside of me, but we set our limit.

Speaker 6 Yeah, fair enough.

Speaker 6 It's not like it's all nickel and dimes, but but as you point out in this piece,

Speaker 6 some huge number of

Speaker 6 same-game parlays, that is to say, these bets inside the same game, are like 30 bucks or less. I mean, not quite the dollar that you spent, but people are not waging huge amounts of money here.

Speaker 16 Exactly.

Speaker 5 They've...

Speaker 16 come to be seen as a new sort of lottery ticket. The odds are long.
You're going to put a few bucks down and it's just a lot of fun.

Speaker 16 Now, there are skeptics out there who call same-game parlays a sucker bet,

Speaker 16 but the bettors I've talked to, for the most part, they kind of understand the odds are wrong and they're willing to do it anyway.

Speaker 6 Yeah, you got any money on the game on Sunday or no?

Speaker 16 I don't. I'll just be watching as a reporter.

Speaker 6 Same, same. Same, same.

Speaker 6 Catherine Sayre at the Wall Street Journal: Parlay Gambling. Thanks, Catherine.

Speaker 7 Thank you.

Speaker 6 Coming up.

Speaker 7 We're just us.

Speaker 10 We are not venture capitalists. We've put everything that we have into this.

Speaker 6 Sports as a small business. But first, let's do the numbers.

Speaker 6 Dow Industrial is down 444 points today, 1%, 44,303. The NASDAQ subtracted 268 points, about 1.3%, 19,523.

Speaker 6 SP 500, down 57%. Jashai, shy of 1%, 6,025.
For the week, the Dow fell a half percent, as did the NASDAQ. The SP 500 declined about a quarter percent.

Speaker 6 Fall of this year, that's when Take-Two Interactive reported it's going to be releasing Grand Theft Auto 6. The video game producer also beat analysts' earnings estimates.
Shares rang up 14% today.

Speaker 6 Frontier Group Holdings, that's Frontier Airlines to UNME, expects to break even in the first quarter and turn profitable later in the year. Frontier soared almost 15.5% today.

Speaker 6 Bonds failed, dealing on the

Speaker 5 10-year T-note. Rose to 4.49%.

Speaker 6 You're listening to Marketplace. I was doing so well.

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Speaker 4 While supplies last, selection varies by location.

Speaker 6 This is Marketplace. I'm Kai Rizdahl.
Consumers get a whole lot of airtime on this program because what happens in this economy depends in very large measure on what consumers do.

Speaker 6 And increasingly, the wealth gap in the United States is affecting what consumers do, how they shop and what they buy, which in turn is changing what retail looks like.

Speaker 6 The industry term is bifurcation, the split in stores and brands as they cater to two different kinds of consumers, the budget-conscious on the one hand, the luxury-focused on the other.

Speaker 6 And as marketplace's Kristen Schwab reports, that plays out in how you shop for everything from pasta sauce to appliances.

Speaker 7 Claire Tassin's got a thing for old rugs.

Speaker 14 I'm really into home decor.

Speaker 14 That's my passion project.

Speaker 7 The reason she sways vintage is because it's tricky to find quality new rugs at a reasonable price. They're one of those things that costs something like $1,000 or $100.

Speaker 14 When you get up close to a rug and you can see that it's like screen printed and it's not actually woven with the pattern that you want, that to me is just,

Speaker 18 I don't want that.

Speaker 7 Lately, Tassin, who's a retail analyst at Morning Consult, has been seeing this high-low split happen in more categories.

Speaker 7 From sweaters to couches, it's easy to find fast fashion and fiberboard furniture. It's also easy to find cashmere scarves and hand-carved teak dining sets.

Speaker 14 Meanwhile, in the middle is kind of falling out.

Speaker 7 The middle falling out has a lot to do with the middle class falling out.

Speaker 7 In 2023, just over half of Americans were middle class, compared to more than 60% in the 1970s, according to the Pew Research Center.

Speaker 7 It means American consumers are financially farther apart than ever before. And with that, famously middling stores like JCPenney and Macy's have nearly disappeared.

Speaker 7 But Dean Brindle, head of product management for home solutions at LG, says something else is happening. American consumers are changing.

Speaker 18 It's not always the high-income households or high-net worth households that are purchasing the premium appliances.

Speaker 7 Brindle says consumers of all kinds are skewing toward luxury. And a lot of that has to do with aspiration, aspiration that starts on social media and spills over into certain parts of our homes.

Speaker 18 When you have guests over, friends, family, et cetera, they're not typically looking at your laundry appliances.

Speaker 18 In the kitchen, where people want to show off a little bit, maybe, those home chefs typically will lean in a bit.

Speaker 7 So LG has been developing more premium appliances.

Speaker 7 Some refrigerators run up to $9,000 and have fancy features like ice makers that make multiple styles of ice and temperature-controlled drawers for storing kimchi.

Speaker 7 The trend toward high-end is playing out in the market for phones, too. Drew Blackard is a vice president at Samsung America.

Speaker 19 Consumers, generally speaking, are skewing premium. Historically, that was not the case.
You used to see that consumers maybe would opt towards the entry model and decide if they wanted to plus up.

Speaker 19 So it's kind of gradually changed over time.

Speaker 7 Of course, there will always be a market for entry-level everything. The profit margins for those products aren't as big, but the sales volume is usually bigger.

Speaker 7 And it's why Ed Johnson, who leads retail and consumer products at Deloitte, says the highbrow-lowbrow split is happening everywhere in retail, even at the grocery store.

Speaker 20 You can even think about, you know, a category as mundane as

Speaker 20 ground beef, right? You have different grades. You have organic, you have grass-fed, you have the, and you have the fat content.

Speaker 20 And so on that matrix, based on what you're looking for, you can pay anywhere from £2.99 a pound to £9.99 a pound.

Speaker 7 And Johnson says, increasingly, the brands making all of these competing products are owned by the same companies. Campbell's makes Prego pasta sauce and Rouse.

Speaker 7 L'Oreal Group owns its namesake drugstore brand and and Lancom. Hormel Foods makes spam and Applegate organic meats.

Speaker 20 And it's done intentionally.

Speaker 20 It's done to create these sub-brands, again, that maybe appeal to a different audience or maybe that have a slightly different formulation, but ultimately can reside on shelf at different price points.

Speaker 7 Which leaves you, the consumer, with fewer options if you're looking for something not too fancy, not too basic, but just middle of the road. I'm Kristen Schwab for Marketplace.

Speaker 6 Speaking of you, the consumer, as we are, we're launching a new series about how you fit into this economy and how you feel about it. Share your story with us, would you?

Speaker 6 You can do that at marketplace.org/slash consumer.

Speaker 6 Opening up a brick-and-mortar business is not easy. One of the big hurdles is finding the right brick-and-mortar space.
You've got to think foot traffic, parking availability, rent too.

Speaker 6 And everything just gets more complicated when your particular business needs a really particular kind of space for a very specific kind of use. Here's today's installment of our series, My Economy.

Speaker 10 My name is Christine Heron.

Speaker 10 I am a co-founder and the CFO of Achieve Sports. We offer everything from gymnastics to turf sports and port sports in Aurora, Colorado.

Speaker 10 I run Achieve Gymnastics and Achieve Sports Center with my husband, Alan. Neither one of us had been our own business owners, entrepreneurs prior to this.

Speaker 10 So not only were we jumping into, hey, we're going to do something new and run our own business, but also, hey, we're going to own some big-time real estate.

Speaker 10 And so, both of those things combined, you know, certainly added an element of risk and a little bit of a fear.

Speaker 10 But very soon after opening our first location, we were at capacity with a very large wait list. You know, having to turn a kid away is heartbreaking.

Speaker 10 And so, we went ahead and started the process of searching for a larger and more expansive kind of operation.

Speaker 10 It probably took us close to five years to find this expansion location. We took over an old grocery store building and completely reimagined it and remodeled it.
It's very expensive.

Speaker 10 I mean, real estate, especially in Colorado within the last several years, has been pretty extreme. So that was definitely a a challenge.

Speaker 10 And then just the costs to remodel it, it was a very, very big step for us.

Speaker 10 Probably the two biggest challenges for us are cash flow and capital

Speaker 10 management.

Speaker 17 Growth, as they say, eats cash.

Speaker 10 And Alan and I are, we're just us. We are not venture capitalists.
We've put everything that we have into this.

Speaker 10 But this week marked two years that we've been open at the new location, and we're hoping that year three is our breakout year and that we can actually start to see a turning of a profit.

Speaker 6 Running a small business takes guts. Christine Heron, the co-founder of Achieve Sports in Aurora, Colorado.
We cannot do this series without you. So let us know what's going on.

Speaker 6 Would you marketplace.org/slash myeconomy.

Speaker 6 This final note on the way out today: an inflation data point that is not all that encouraging.

Speaker 6 We have talked, I think, about how what consumers think is going to happen with inflation can actually make it happen.

Speaker 6 So, consider this. The University of Michigan's Index of Consumer Sentiment came out today.
We're a tad grouchier than we've been of late, about which fine, moods change.

Speaker 6 But get this, consumer inflation expectations, where we think inflation is going to be in the year to come, jumped from 3.3%

Speaker 6 to 4.3%. That is, first of all, not great.
And second of all, it's the highest that number's been in almost a year and a half.

Speaker 6 Our theme music was composed by B.J. Lederman, Marketplace's executive producer is Nancy Fargoi, Donna Tam is the executive editor, Neil Scarborough is the vice president and general manager.

Speaker 6 And I'm Kai Risdall. Have yourselves a great weekend, everybody.
We will see you back here on Monday, all right?

Speaker 6 This is APM.

Speaker 17 At Capella University, learning the right skills could make a difference. That's why our business programs teach you relevant skills you can take from the course room to the workplace.

Speaker 17 A different future is closer than you think with Capella University. Learn more at capella.edu.