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Hello, listeners. Our goal at Marketplace is to raise the economic intelligence of the country, and that goes for teens and young adults, too.
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From American public media, this is Marketplace.

In Los Angeles, I'm Kyle Rizdahl.

It is Wednesday today, the 22nd of January. Good as always to have you along, everybody.
We'll begin midweek with a checkup of sorts on the American consumer. We do that, by the way, concentrate so much on consumers because, in case you're new here, spending by or on behalf of American consumers drives 70% of everything that happens in this economy.
And the most proximate beneficiary of that spending today is the consumer products conglomerate Procter & Gamble, maker of everything from laundry detergent to tampons to toothpaste. P&G reported profits this morning, sales up three percent year over year, sales growth mostly thanks to higher sales volume rather than higher prices.
Marketplace's Henry App gets us going with what that tells us about how consumers are spending right now and how retailers are trying to get their piece of it. Companies that sell packaged goods to us consumers, razors and toilet paper and cleaning products, they've had a pretty decent couple years, says Arun Sundaram at CFRA Research.
But growth has been driven by higher prices, which is obviously not sustainable over the longer term. A company can only raise its prices so much before customers start to look for cheaper options.
So now companies are trying to keep their prices in check and focus more on sales volume, he says. Procter & Gamble is having some success in that area, in part because, as their chief financial officer told Bloomberg, some consumers are consistently buying larger packs of things.
Again, Arun Sundaram at CFRA. That indirectly means that more consumers are shopping at places like Costco or Sam's Club, where you can get those larger pack sizes.
And oftentimes that comes at a better value to the consumer. Value is really what shoppers are looking for right now, after years of high inflation, says Brian McCarthy at Deloitte.
And value doesn't just mean spending less. It can be a combination of things, and not just about the product itself.
For some, it's going to be quality. For others, it's price.
For others, experience. Some for it's convenience.
So if retailers can make it easy and maybe satisfying to buy, say, a 36-roll pack of toilet paper, that approach can win over some customers. And overall economic conditions might make those customers open to spending a bit more in the months ahead, McCarthy says.
We're starting to see interest rates come down while the labor market remains strong, and inflation is starting to wane as well. Those factors could give retailers a lift in many categories, including some that have struggled the last couple years, says Craig Rowley at Corn Ferry.
We're seeing apparel doing better. We're seeing athletic wear doing better.
We're seeing home goods doing better.

All that stuff we bought a ton of early in the pandemic, he says, it's starting to wear out and needs to get replaced.

And we've got a bit more spending power to do that right now.

I'm Henry App for Marketplace.

P&G shares up about 1.9 percent.

Today, that's a bit better than the three major indices.

We will have the details when we do the numbers. even though procter and gamble has been selling a lot of pretty much everything, there is still a handful of warning signs when it comes to American consumers right now.
Interest rates are still high, and there's a good chance they're going to stay that way for the foreseeable future. And according to data from the New York Fed, delinquencies on credit cards and auto loans have been rising for more than a year now.
That does sound like a bad sign for an economy powered by consumer spending. But as Marketplace's Justin Ho reports, is it really? This is how Capital One CEO Richard Fairbank described the health of his customer base on an earnings call this week.
The credit metrics are looking great. The consumer's in a great place.

Fairbank said customers' account balances are higher than before the pandemic.

Gerard Cassidy, a bank analyst at RBC Capital Markets,

says all of the government relief aid that went out early in the pandemic is still helping people pay off their bills.

And I think it's going to take at least another year or two

before it's

completely washed out of the system. The labor market is still strong, too.
Workers are hard

to find. Income growth is outpacing inflation.
Ben Ayers is senior economist at Nationwide.

For most people that have jobs, and particularly those that have investments, they have homes,

and those values are going up, the credit situation for most households is pretty solid. But the emphasis there is on most.
Ayers says plenty of households are struggling under the weight of high prices and high interest rates. In fact, he says it's those households that are behind the recent increase in loan delinquencies.
They're falling behind on payments. They're putting more of their day-to-day expenses on credit cards.
And it's that segment that we're definitely concerned about. But those pockets of stress don't really pose much of a threat to the broader economy because wealthier consumers are still in good shape, says Shannon Grine, an economist with Wells Fargo.
So the top 20 percent of consumers account for about 40 percent of spending in the U.S., so I think you can have these vulnerabilities surface without it causing a meaningful deterioration in consumer spending. Gryan says the risk here is that the strong economy will mask those vulnerabilities.
She says that's something the Federal Reserve will have to keep in mind. They need to see a little bit more sustained progress on inflation, but I do think they're also aware of the fact that higher rates are having an impact on certain areas of the economy, particularly

these more vulnerable consumer groups. And Grind says cutting interest rates

could help those groups stay afloat. I'm Justin Ho for Marketplace.
about eight years ago i went apple picking for a series we were doing on the show back then but it wasn't fun what a lovely fall day apple picking it was actual agricultural this is a job apple picking and it was hard you should feel how heavy that bag is give me the strap too oh yeah the whole thing all filled up which it is the thing weighs 42 pounds Jesus Christ. That's how heavy that bag is.
He's going up a ladder. Up a ladder, down a ladder.
And with some chiding. No, I don't want to try to climb.
All right, fine, I'll try to climb. So am I.
I get hurt, we're going to sue you. You know that, right? Slowly but surely, I inch my way up just a couple of steps, mind you.
Wow. Wow.
Yeah, now. All right, I'm done.
That was Patrick Smith with me there that day on his family farm, Loftus Ranches in the Yakima Valley up in Washington state. Apples and hops, too, is what they grow.
As you've heard me say more than once on this program, immigration is a labor story, which I mentioned, of course, because of the Trump administration.

So to get a sense of what that might mean in the very labor intensive agriculture sector, we've gotten Patrick Smith back on the phone. Patrick, it's really good to talk to you again.
Yeah, good to talk to you, Kai. First things first, I suppose, how's business at Loftus Ranches? Yeah, business is good.

You know, agriculture, of course, is very cyclical and both hops and apples, our two primary crops, are in a little bit of a down cycle right now. But, you know, we've got a great team here and we're focused on the things that we can control.
And yeah, we're making our way through it. Fair enough.
Let's talk about some stuff you maybe can't control. And the reason we wanted to talk to you was, you know, I played up in the introduction to this piece.
I played a piece of tape from, you know, when I was up there with you guys in 2016. And I came to realize how hard apple farming is and what kind of labor you need.
Here's my question. First of all, what's your labor situation right now? Are you getting all the H-2 visa people that you need? And secondarily, how much is it costing? It's got to be really expensive.
Yeah, yeah. So we are fortunate that the H-2A visa program does give us the availability of labor that we need to get the job done.
As you allude to, the difficulty is that the cost continues to escalate even faster than inflation. That represents a significant real cost increase.
What I hear you saying is that your margins are getting really thin. Yeah, correct.
So the Northwest Horticultural Council trade group here commissioned a study recently about Washington apple growers' labor costs over the past decade. And in 2023, Washington apple growers spent 99% of their revenue on labor.

So that 1% doesn't leave much for fertilizer and taxes and water and fuel for your tractors, things like that. And so So, yeah, margins are getting squeezed.
In comparison, in 2013, labor was about 37% of the per bin revenue that apple growers received. You don't need me to tell you this, but having 1% left over is not a way to run a business model.
No, no. And like we've talked about before, farmers are price takers.
We don't set the price of apples. And in an economic environment and political environment where inflation is really the driving force in elections and household budgets, it's really hard for us to manage and not pass on significant cost increases that consumers would see in the grocery store.
It's tricky to know what the new Trump administration is going to do on immigration before they actually do it. They've started some crackdowns and obviously crackdowns will not happen to H2A workers because they're legally unsponsored by you.
But it's possible that this administration is going to decide that even legal immigration is not something that it's interested in. Yeah, absolutely.
You know, farm labor and a secure source of farm labor is more than just important to employers like us, to farmers. Food security is an important part of national security.
It's also an important trade bargaining chip in that American agriculture is a net exporter. And if legal immigration is constrained through policies of Trump administration, that has other implications beyond just how it affects farmers.
Yeah. You are what? I know I ask you this pretty much every time and I can never remember.
You're the fourth generation, right, of your family to be on this farm? Yeah, correct. All right.
And you and your siblings and the rest of your family have expanded. You have a brewery now.
I was looking at your website earlier. You've got Loftus Labs, which is sort of an analytics and data thing.
So you're clearly expanding. Here's my question, though.
Do you imagine? How old are your kids now, Patrick? I have three kids. They are 14, 8, and 4.
14. So not too far from deciding what that kid is going to do.
Do you imagine they're going to be generation number five?

I certainly hope so.

If we do our job well, the farm hopefully will be there for them to at least have the decision whether they want to come back to it or not. You know, I certainly hope that, you know, that we pursue smart immigration and trade policies that benefit farmers as well as, you know, the nation as a whole.

Patrick Smith, Loftus Ranches up in the Yakima Valley in Washington state.

Apples, hops, brewery, data analytics, all that good stuff.

Patrick, thanks a bunch. Good to talk to you again.

Likewise, Kai. Good to talk to you.

There's been, as I'm sure there is, wherever natural disaster strikes, a massive outpouring of support for victims of the Palisades and Eaton fires. GoFundMes, shelter, and donations of all kinds.
But what gets given isn't always what's most needed. From LAist, Jurep Local has more.
Just southeast of where the Eaton Fire burned, the YMCA in Sierra Madre is a hive of activity on this morning. A large group of volunteers forms a chain to unload boxes of donations from an Amazon truck.
I can see the front wall. There are also a lot of just regular folks who wanted to help, like 11-year-old Winnie Newberg.
We didn't lose our home, but a lot of our friends did, so we wanted to give something back. And what's your job here? Right now, me and my friend are basically just giving out pet supplies, like toys, leashes, food for cats and dogs.
The back patio of the YMCA is dotted with piles of canned food, toys, and bedding. AJ Plasencia wanders around looking to replace things that he, his wife, and two-year-old son lost in the fire.
Are there specific things that you're looking for for him? Basically cars, toy cars, dinosaur toys, and things that he likes like that.

He's also looking for essentials he'll need when he can get out of the emergency shelter where he and his family have been staying.

I'm trying to find a mattress today, but I don't seem to find one here.

Placencia and the other fire victims I speak with say they're grateful for all the help they're getting,

including for little things like snacks and toothbrushes and eye cream. Many of them lost everything.
State Senator Sasha Renee Perez is also here. She represents this area.
She says what people need most right now is money. Cash assistance really gives my constituents the flexibility to address whatever pressing needs that they may have at that

moment. A lot of times that, you know, need might be housing, right? Maybe it might be, you know, food for the children.
What fire victims and donation centers don't seem to need more of is used clothing. After I leave the YMCA, I drive down Sierra Madre Boulevard several miles west, past scarred oak trees and hillsides scorched by the Eaton Fire.

I see five pop-up donation sites within about a mile, on the porches of businesses, outside of the supermarket. In front of a local funeral home, used clothing is piled high on folding tables.
Some of it, including a poofy white wedding dress, is strewn across the sidewalk.

I've seen pallets of clothing just left outside in a parking lot for months after some disasters

because there's no place to put it. People don't have resources to sort it.

This is Drew Hanna. He's led relief efforts after disasters in California, Hawaii, and elsewhere

for the nonprofit Team Rubicon. He says clothing donations can be especially difficult to handle.
That is countless hours of work by, you know, volunteer agencies, by survivors themselves to navigate, you know, the piles and piles of donated clothing. Hannah says a lot of donations after disasters,

unfortunately, end up in the landfill. A better approach, he and others told me,

is to contact donation centers or check their social media to find out exactly what's needed,

or give money to a trusted relief organization that knows how to put it to good use.

In Los Angeles, I'm Jill Replogle for Marketplace.

coming up i could use all the help painting, trim, just spot cleaning, staging, that kind of thing. Reopening after a hurricane.
But first, let's do the numbers. Downdustro is up 130 points today, about three-tenths percent, finished at 44,156.
The NASDAQ went up 252 points. That's 1.3%, 20,009.
The S&P 500 up 37 points, about 0.6%, 6,086. We heard earlier from Henry Epp about the state of consumer demand.
KelaNova, the parent company of Cheez-Its, Morningstar Farm Meat Substitutes, and Rice Krispie Treats dipped less than a tenth percent today. Clorox Company might be and probably is best known for its cleaning products.
Also, however, owns the Kingsford Charcoal brand and also Hidden Valley Ranch. Who knew? Down eight tenths of one percent.
Bonds down. Yield on the 10-year T-Note up 4.61 percent on the 10-year., you are listening to Marketplace.
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I'm Kai Risdahl. Executive orders and actions have been coming out of the White House fast and furious, as you have surely seen and heard.
And while speed can get an agenda moving quickly, it can also muddy the waters. Take, for instance, Section 7 of the executive order from the other day titled Unleashing American Energy.
It orders, among other things, an immediate pause to the disbursement of federal funds tied to certain components of the Inflation Reduction Act and the infrastructure law. Which components exactly is a lot less clear, as Marketplace's Kimberly Adams explains.
Early yesterday afternoon, Jeff Davis at the Eno Center for Transportation started getting frantic phone calls. Saying that the executive order signed by President Trump the day before are purport reporting to stop Green New Deal spending was having the effect of suspending all Federal Highway Administration payments and new project approvals.
Davis says the FHA started shutting down disbursements out of an abundance of caution, even for things like road and bridge work. The idea that promised funding could be on hold changes the calculus for state policymakers, says Adi Tomer at the Brookings Institution.
They may be hesitant to continue projects where they might be liable for enormous sums of money. We're talking tens to potentially hundreds of millions of dollars.
After that panic, the White House issued guidance clarifying it was just talking about the Green New Deal stuff, like EV charging infrastructure. Other funding can keep flowing if agencies check in first.
The whole thing is causing a ton of confusion. I will tell you that there is a lot of people reaching out that are wondering what is going on.
Marcia Gildert Murphy is the president of the American Society of Civil Engineers and also works as an engineering consultant in five states. Everybody in those states are all equally concerned about what is going to happen to this money that hasn't been received yet, but was promised.
Because tens of billions of dollars have been promised for projects tied to the Inflation Reduction Act and the infrastructure law. Jody Freeman directs the project on environmental and energy law at Harvard Law School and says if the president tries to block that funding permanently...
That's considered impoundment. That would be the president actually impounding money that Congress has appropriated.
And that would lead to a legal battle. Plus, says Freeman,

states that already spent that money with the expectation of reimbursement

would likely sue to get it back. In Washington, I'm Kimberly Adams for Marketplace.
Plans to build back are just starting to take shape after the fires here in Los Angeles. Over on the other side of the country, a lot of homeowners and businesses are in the early stages of their own rebuilds after Hurricane Helene hit last fall.
Hannah Berniske is the owner of Cold Mountain Art Collective in Canton, North Carolina. So we still have a long way to go, but I was able to get a brand new window for the front gallery space.

We've had some electrical work done. And I think really in the next two weeks, things should start picking up and moving pretty quickly is my hope.
I really would like to be open no later than like late February. but each week that goes by, each day that goes by

it's starting to feel like it's going to push into March. I hope not, but we'll see.
Sometimes it feels really overwhelming to think about all of the small things like countertops and doors and mirrors and toilet seats. And it's like all the little things add up and they feel very overwhelming, but it looks like around $50,000 for the rebuild.
Now, whether insurance matches that or not, I don't know yet. So kind of a wait and see game with that, but either way, it's got to get done.
I think that for me, the biggest question is why stay in this location, knowing that it's flooded and that it'll likely flood again. But I bought this building with my small business loan for a really good deal.
And even if I were to sell it and try to purchase another property, I would never be able to get something as affordable as this. I love my building.
I'm very attached to it. And I just don't think I could lose it or leave it.
I'm looking forward to the final details. We're going to set up some volunteer days to have the community come in and put together our IKEA furniture and we'll have pizza.
And it gives the community more of an investment in the space. They've really been wanting to offer physical labor, and so I'm going to accept that.
I could use all the help painting, trim, just spot cleaning, staging, that kind of thing.

I think it's those moments leading up to the grand opening that I'm looking forward to the most.

It's kind of like an opportunity to start fresh with new business ideas and just new paths.

Hannah Berniske, owner of the hopefully soon-to-be-up-and-running-again

Cold Mountain Art Collective in Canton, North Carolina. This final note on the way out today in which I ask you once again to tell me how college football isn't actually professional.
The name image likeness deals we have talked about Whereby players can benefit from the use of their personal brands

Which, good, saw this in the wall street journal today though that the ohio state buckeyes football team newly minted national champions would be valued at 1.96 billion dollars could that team be bought and sold on the open market that's research out of indiana university columbus texas comes $1.9 billion. Michigan at $1.6 billion.
Georgia, Notre Dame, LSU, Penn State, Tennessee, and Texas A&M all breaking nine figures. I personally wanted Notre Dame to win.
Not that that's here nor there. Our media production team includes Brian Allison, Jake Cherry, Jessen Duller, Drew Jostad, Gary O'Keefe, Charlton Thorpe, OneColor Storato, and Becca Weinman.
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I'm Kyle Rizdahl. We will see you tomorrow, everybody.
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