Tariff anxiety turns fun splurges into stress purchases

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Speaker 3 Never a dull moment in this economy, is there? From American public media, this is Marketplace.

Speaker 3 In Los Angeles, I'm Kai Rizdahl. It is Wednesday today, the 16th of April.
Good as always to have you along, everybody.

Speaker 4 First of all, stocks.

Speaker 3 I'm sure you've seen or heard by now another day of tariff and trade policy-induced malaise. We will get there when we get there, as we always do.

Speaker 3 Second, though, and more substantively, which means it probably should have been first, huh?

Speaker 3 The big thing that happened in this economy today was Fed Chair Jay Powell doing a QA at the Economic Club of Chicago.

Speaker 3 He said, among other things, that it may well come to pass that the Fed's really going to get stuck between a rock and a hard place, rising unemployment, the policy prescription for which is cutting interest rates, and rising prices, the policy prescription for which it's raising interest rates.

Speaker 3 A challenging scenario, the Fed chair called it. Now, why is this what Powell's worried about?

Speaker 6 These are very fundamental changes in long-held, in some cases, policies in the United States, and there's not any real experience. I mean,

Speaker 6 the Smoot-Hawley tariffs were actually not this large, and they were 95 years ago, so there isn't a modern experience of how to think about this.

Speaker 4 Anyone? Anyone? Powell? Anyone?

Speaker 3 Jay Powell did say that the central bank is happy to stay where it is on interest rates for now.

Speaker 3 Monetary policy, of course, does get all the headlines when it comes to the Fed, but it also does a ton of economic research. All the Ph.D.
economists there do.

Speaker 3 Reports, analysis, data of all kinds, of which we got some today. Their March report on industrial production.

Speaker 3 The data is a little noisy, but the bottom line is that the industrial sector does seem to be slowing. Here's Marketplace's Mitchell Hartman.

Speaker 7 Industrial production in decline, not a promising sign for economic growth. Except, says analyst Jonathan Secreda at CFRA Research.

Speaker 8 There certainly is a bit of noise here. The decline is really driven by utilities just due to a warmer period of weather.

Speaker 7 Manufacturing, a subset of industrial production, was actually positive, led by durable goods like autos and business equipment.

Speaker 8 We're seeing this as really being driven by tariff-led pre-buying activity. Manufacturers trying to get ahead of any kind of punitive levies.

Speaker 7 Aerospace manufacturing was up, driven by strong demand for commercial and military aircraft, says Richard Abulafia at Aerodynamic Advisory, which helps Boeing after quality problems and a strike hamper production.

Speaker 4 But.

Speaker 10 Just when we were getting back on track, people were pulling back because of the uncertainty associated with tariffs.

Speaker 7 So here's the central theme from economists today. Yeah, the manufacturing data from last month looks pretty good, but it's already in the rearview mirror, explains Oren Klatchkin at Nationwide.

Speaker 12 Once that front-loading impact eventually fades, we're not in for a particularly encouraging environment when it comes to industrial activity.

Speaker 7 Meanwhile, the burgeoning trade war poses a rising risk to major U.S. exporters, says CFRA's Jonathan Secreda.

Speaker 8 Think about heavy machinery coming from companies like Caterpillar, Deer ⁇ Co. as far as large-scale harvesters.
Also, a lot of components that go into commercial aviation.

Speaker 7 Production of all that could slow, says Socreda, if European and Asian countries escalate retaliatory tariffs or just stop buying American. I'm Mitchell Hartman for Marketplace.

Speaker 3 Wall Street Midweek?

Speaker 4 Well,

Speaker 4 no.

Speaker 3 We'll have the details when we do the numbers.

Speaker 3 President Trump's tariffs are changing how we consume. We are racing to buy stuff to get ahead of the price eggs that do seem to be in the offing.
Essentials for sure, but discretionary purchases too.

Speaker 3 Marketplace is Savannah Peters. Talk with some people about the nice to haves that they are stocking up on.

Speaker 13 Aaron Weber is the cook in his family of six. He says he keeps things simple, which is sort of hard to believe when you hear about the seasonings in his rotation.

Speaker 14 This is going to sound so pretentious. I'm sorry.
Albanian sage, Turkish oregano, Mexican vanilla, Vietnamese.

Speaker 13 Lots of fancy imported stuff that used to be hard to find in Kansas City where he lives.

Speaker 14 Turkish bay leaves. It's nice to be able to pick from the world's menu, right?

Speaker 14 And I do not want to go back.

Speaker 13 After the first and steepest April tariff announcements from the White House, Weber, who works in marketing and sales, decided to stock up. I asked him to share how much he spent.

Speaker 4 Oh, God.

Speaker 14 Yeah, as long as my wife doesn't hear this.

Speaker 14 Yeah, it was probably around,

Speaker 14 I think it was about $160.

Speaker 13 Normally, Weber looks forward to perusing the aisles of his local Penzies spice store, but this time he was shopping under pressure.

Speaker 14 It's very easy to feel resentful.

Speaker 13 Consumers right now really may feel feel kind of helpless against the economic forces, says Christine Whelan, an expert on consumer well-being at Emory University.

Speaker 13 And so when we feel that way, we try to solve it. Whelan says even she feels the impulse to spend as a way to claw back some control, especially on the treats that make her family comfortable.

Speaker 13 One of the ones that I'm really wrestling with as a mom of five children is toys.

Speaker 13 Some 80% of which are manufactured in China. But she says there's a crucial distinction.

Speaker 13 Between buying a birthday gift that you would need for your kid anyway versus filling your basement with random toys just in case.

Speaker 13 Whelan says you really have to know yourself and your spending habits to resist the urge to panic shop.

Speaker 15 If you like forego buying something, prices might shoot up the following day.

Speaker 13 That's Raymond Olgado, and his tariff-induced FOMO buy was a fancy new road bicycle. He says the upgrade will help him get outside his LA neighborhood on longer rides.

Speaker 15 My original plan was to buy it around May or June.

Speaker 13 But instead, he moved the purchase up to early April. Olgado, who works in e-commerce marketing, cashed out some stocks to afford the $5,000 expense.

Speaker 13 Sort of a last hurrah splurge before he foresees reining in his discretionary buying. But that word, discretionary, means different things to different consumers.

Speaker 16 I work in education, so I don't make money, so this is not good.

Speaker 13 Regina Kraus in Austin, Texas keeps a pretty tight budget, but she likes to treat herself to skincare from Korean and Japanese retailers, especially sunscreen.

Speaker 16 It's sunny here in Texas, so I use a lot.

Speaker 13 In early April, Kraus bulk bought about 10 bottles, plus some face wash and moisturizer online. The total was about $130,

Speaker 13 which hurt, especially after the tariff outlook changed.

Speaker 16 At first, I felt like really angry that I did the buy, but then at the same time, I was like, you know what, I'm not going to risk it because clearly nothing stays.

Speaker 13 The back and forth on tariffs is giving Krauss some whiplash and turning purchases that used to be about self-care into a new source of stress. I'm Savannah Peters for Marketplace.

Speaker 3 We were in the business district of Altadena, California yesterday talking to business owners as they start the long road to rebuilding after the Eaton fire.

Speaker 9 I've never had to dealt with anything that was a total loss. So it's kind of a learning curve for me.

Speaker 2 We're looking for a temporary place.

Speaker 2 You know, there's not a lot of commercial buildings left.

Speaker 3 Today, we're about a mile east of there at one of the biggest employers in town. Altadena Town and Country Club is a five-minute drive from the business district.

Speaker 3 Driving there, you pass full neighborhoods burned to the ground, people in hazmat suits cleaning up debris and burned-out cars, just metal frames is all that's left.

Speaker 3 We pulled into the small parking lot at the back of the club's entrance.

Speaker 4 No, we're going to be good. It's not going to rain.
It's not going to rain. Hey, I'm Kai.

Speaker 3 Hi, Craig. Nice to see you, Craig.
How are

Speaker 4 Tell me who you are and where we are.

Speaker 17 Craig Sloan. I'm the general manager of the Altadena Town and Country Club here in beautiful Altadena, California, or what used to be beautiful Altadena, California.

Speaker 4 It is still beautiful. I mean, it's a tough day today, raining cold, but it's still a beautiful place.

Speaker 3 Can we walk in the gate there and just, you can just describe for me what we're seeing?

Speaker 4 Sure.

Speaker 17 This is what we consider our member entrance with. close access to the tennis courts and the pool area.

Speaker 3 I'm just going to say it here that I know we're talking about a country club. And with everything that Altadena lost, rebuilding a place like this might not seem like a top priority.

Speaker 3 But what you have to know is the Altadena Town and Country Club was central to the local economy. It had about 120 employees the day the fire started, most of them from the area.

Speaker 3 Local teenagers would get their first jobs here working after school and on the weekends as lifeguards and kids' club staff and food busers. Now, only six employees are left, Craig included.

Speaker 17 We did our best to try and place as many of the employees as possible with other clubs and other locations.

Speaker 17 A lot of them have found jobs on their own. Some of them have decided to go back to school.

Speaker 17 Many of them have said, you know, let us know in three years when the clubhouse is rebuilt, we want to come back. So we've got a lot of really dedicated, loyal employees.

Speaker 3 Craig's been the general manager for the last 20 of the 27 years that he's worked here. Before the fires, The club had about 640 members.

Speaker 3 When you count partners and kids, the total number of of people who were part of this club was closer to 2,000. Tennis courts, swimming pool to the left, and then the remains of

Speaker 17 what was a 28,000 square foot clubhouse.

Speaker 13 Wow.

Speaker 4 Wow.

Speaker 4 So what are you going to do? We are going to rebuild. Are you?

Speaker 17 Yeah, absolutely committed to rebuilding and continuing to support the community in Altadena.

Speaker 3 17% of members lost their homes in the Eaton fire. Craig has been displaced as well.
His home in Altadena was damaged. He hasn't been able to move back in yet.
Down some steps we went into the patio.

Speaker 3 I'm just coming around the corner here. This place was huge.
I hadn't really been able to get a sense of the scale.

Speaker 17 Yeah, this is what we're seeing here. The fitness center in front of us was our lowest level, kind of our pool level, and then we had our terrace.

Speaker 3 To our right is the main building, the clubhouse, or what's left of it, really.

Speaker 3 The fire ripped through the two top floors and left behind a jumble of melted and twisted metal, now rusty from the rain.

Speaker 3 The bottom level is still standing, but when you look in through the windows, all you can see are piles of crumbled drywall. So the pool's intact, the courts are intact.

Speaker 3 I mean, the water is all green and gross, but that shouldn't be too tough, right?

Speaker 4 No, I think.

Speaker 3 Resurfacing, probably, and whatever.

Speaker 17 We will drain, replaster,

Speaker 17 do cleanup of the tennis courts, the pickleball courts. We also have a spa and a toddler pool off on the right there that will get cleaned up and playground beyond that.

Speaker 17 So we'll be able to come back somewhat operational over the course of however many months it'll take us to clean up. Could be four months, six months, eight months.

Speaker 17 The golf course is now a debris staging area, so we'll have to determine how safe it is to bring members back.

Speaker 3 LA County owns the golf course, and they've been letting the Army Corps of Engineers use it as a staging area for debris removal.

Speaker 3 It's not just me, but I can't imagine somebody wanting to come to the toddler toddler pool with their kid with a bunch of fire zone debris in the golf course right next door.

Speaker 17 Well, word came out this week, earlier this week, that they're only going to be placing clean debris there. Clean concrete.

Speaker 4 That makes me feel much better as a parent, I got to tell you.

Speaker 17 They will be doing some demolition of that concrete so they can place it into larger trucks and haul it away. So it will be a staging area for that.

Speaker 3 Catch is, the Army Corps isn't doing free cleanup for everybody.

Speaker 17 We found out a couple weeks ago, even though we opted in originally to the Army Corps debris removal, we found out that they were not going to be doing any debris removal for commercial businesses.

Speaker 17 So we pivoted and we've actually contacted a lot of private debris companies and we hope that within the next couple of weeks we'll have landed on a company and we'll start the cleanup process.

Speaker 3 As they start to bid on contractors, this club's going to be in competition with other commercial properties like Joey's from yesterday that need their debris removed as well.

Speaker 3 Let's go up the stairs, see what's going on.

Speaker 3 Oh man, here's a Christmas decoration.

Speaker 2 Look at that.

Speaker 5 Yeah, we still have a few Christmas decorations that

Speaker 17 we were actually

Speaker 4 in the clubhouse.

Speaker 3 The club had been planning to reopen on Wednesday, January the 8th, but now all you see is a place stuck in time. There's a brick chimney with a pair of fireplaces, one somehow above the other.

Speaker 3 The floor that used to sit between them no longer exists. Situate this club for me

Speaker 3 in the Altadena ecosystem, right? I mean, it's, you know, not everybody in town belonged here and it's sort of up and away from the business district.

Speaker 4 Where do you fit?

Speaker 17 Where did you fit and where do you hope to fit? Well, we were a pretty integral part of the club. We had organizations that met here on a regular basis.

Speaker 17 For example, Rotary Club had been meeting here for well over 50 years every Thursday.

Speaker 17 Chamber of Commerce held numerous events here at the club. Many of the local nonprofits in the area, the churches, held fundraising events here.
It was a private club, but everybody was welcome here.

Speaker 3 Craig told us rebuilding the 28,000 square foot clubhouse is going to take upwards of $20 million in three years.

Speaker 4 Are you insured for this loss?

Speaker 3 Yes. So you're going to be all right?

Speaker 4 I mean,

Speaker 17 it's hard to tell what construction costs are going to be going forward, what the cost of labor is going to be, what the cost of materials are going to be.

Speaker 17 So it's hard to know if the insurance that we have is going to cover everything. But we will manage through this.

Speaker 4 So

Speaker 4 you're a long-time resident. You're a long-time employer, right?

Speaker 3 You run a business.

Speaker 3 And even though you're going to rebuild,

Speaker 3 it's going to be different.

Speaker 3 And I want you to tell me what you think is going to be lost because of this fire.

Speaker 17 That's a tough question. I would hope nothing would be lost, but of course there will be something.

Speaker 17 I think we're going to lose a number of our families who are not going to

Speaker 17 be able to stay in the Altadena community. I mean, I could name a family who they lost their home, they lost their club, and they lost their children's school.
So where do you go from there?

Speaker 17 They're currently living down in Manhattan Beach, and I don't anticipate they're going to come back.

Speaker 17 I think as we go through the process, we get further down the road, I think we're going to be hearing more and more of those stories.

Speaker 17 But we are going to be here, we're going to rebuild, we're going to bring back as many current members as possible, and then we're going to bring in new members.

Speaker 17 New people will be living in Altadena and building homes here and hopefully we will be attractive for them as well and they'll come and join the club as the vacancies become available.

Speaker 3 The clubs stopped billing members for their monthly dues, a couple of hundred dollars a month, up to about $450 or so, and it's obviously not bringing in new members.

Speaker 3 Those fees can run in the thousands. In the meanwhile, they've worked out a partnership with clubs nearby so that members can go for free and the kids' swim team can still practice this summer.

Speaker 4 Swim team, I understand, was pretty good.

Speaker 17 Not bad. 31 years in a row, championships.

Speaker 17 And, you know, we're going to have swim team again this year and we're hoping to get our 32nd.

Speaker 3 As long as they're closed, obviously they're not bringing in any revenue. And Craig says they're going to have to dip into savings to make up what insurance can't cover.

Speaker 3 But building back is their only option because this business only works in this location. The Altadena Town and Country Club can't be anywhere but in Altadena.

Speaker 3 If you want to see some video of what we saw while we were up there, we have it on our website. It is, of course, marketplace.org.
Coming up on the program tomorrow.

Speaker 13 Immediately, people started calling me asking me, you can come and use my space.

Speaker 3 Running a business out of a temporary location.

Speaker 4 Coming up.

Speaker 11 When she asked me what I wanted to be when I grew up, I always said a garbage man. So I'm out here living the dream.

Speaker 3 One man's trash, another man's treasure. First, though, let's do the numbers.

Speaker 3 Dow Industrial is off $6.99 today, one and three-quarters percent, 39,669. The NASDAQ dropped 516 points, 3.10%, 16,307.

Speaker 3 The S ⁇ P 500 down 120 points, 2.25%, 52.75.

Speaker 3 The rush to buy, buy, buy before tariffs hit push retail sales up 1.4% February to March. That's the biggest increase in two years.
Cars, sales thereof, up 5.3 tenths percent today.

Speaker 3 Bonds up, yields down 4.28% on the 10-year you're listening to Marketplace.

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Speaker 13 and then the text. Honey, there's water in the basement.

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We always answer the call because real protection means showing up, even when things are in the rough.

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Speaker 3 This is Marketplace. I'm Kai Rizdahl.
We've been talking about safe havens quite a bit since the tariff palooza of April the 2nd. Places that investors put their money when the world turns to chaos.

Speaker 3 There is U.S. debt, U.S.
Treasuries, right? Backed by the full faith and credit of the United States.

Speaker 3 But even that's considered less safe than it used to be. We saw bonds sell off after those tariffs were first announced, right? There's gold, the OG safe haven, if you will.

Speaker 17 It hit yet another record high today.

Speaker 3 In 2025, there is also Bitcoin, which crypto types would love to tell you is going to be the future digital gold. Marketplace Matt Levin's on that one for us today.

Speaker 9 In the last couple years, when the stock market threw a temper tantrum, Bitcoin seemed to have an absolute hissy fit.

Speaker 9 Like back in the summer of 2022, when the Fed started raising interest rates to fight inflation, we had a large

Speaker 8 decline in Bitcoin associated with a pretty large decline in the NASDAQ.

Speaker 9 Lee Drogan is at Starkiller Capital, a crypto investment firm. He says that's because investors have viewed Bitcoin more like a risky tech stock than as an actual currency capable of storing value.

Speaker 9 But in the past few weeks, we've seen...

Speaker 8 a significant amount of relative strength that Bitcoin's shown to other risk assets. It's been less volatile.

Speaker 9 When Bitcoin cost around 84 grand right before those massive April 2nd tariffs, and after dipping some, it's now right back at around 84 grand. Bitcoin true believers say that's a milestone.

Speaker 8 Bitcoin is a teenager from a literal perspective.

Speaker 9 Matt Hogan is chief investment officer at Bitwise Asset Management.

Speaker 8 It's, you know, 14, 15 years old. And it's so it's going from this early start as this risky asset.
to its eventual adult life as a hedge asset just like gold.

Speaker 9 Bitcoin backers argue that that because it has a limited supply that can't be tampered with, Bitcoin should be immune from, say, the inflationary impacts of tariffs or eroding faith in the U.S.

Speaker 9 dollar. Lee Reiners at Duke University is skeptical.

Speaker 8 You could apply that logic to any asset with a fixed supply, right?

Speaker 8 If that's, you know, if that's your thesis, like, why not? Like, why not beanie babies or like baseball cards or something, you know, or something else?

Speaker 9 Reiners says Bitcoin is still far more correlated with risky tech stocks than actual gold and worries that embracing crypto as something safer than it actually is could endanger the non-crypto economy.

Speaker 9 I'm Matt Levin for Marketplace.

Speaker 3 There's an Adam Smith quote that I like to trot out from time to time. Adam Smith, Wealth of Nations, 1776, Consumption, Smith wrote, is the sole end and purpose of all production.

Speaker 3 That is, the only reason we make stuff is so that people can use that stuff, which, fine, we can argue about that.

Speaker 3 But one of the great challenges of this consumer economy is what happens after we use all the stuff that we use.

Speaker 3 That's the setup for today's installment of our series, My Economy.

Speaker 11 I am Joshua Costa of Sleep Well Recycling in Burlington, Vermont, Vermont's only mattress and box spring recycling facility. I've been in the waste industry since I was a young boy.

Speaker 11 My first job was in precious metal recycling, and I've always just been interested in garbage. If you ask my mom, she says,

Speaker 11 when she asked me what I wanted to be when I grew up, I always said a garbage man. So I'm out here living the dream.

Speaker 11 When I started in 2020, the main garbage company up here was charging $15.95 per mattress.

Speaker 11 And so I came in at 18 and I said, hey, just for $2.05 extra, we will recycle 75 to 100% of these items and keep the contents, the foam, the topper, the metal, and the wood out of the landfill.

Speaker 11 So we got the warehouse in August of 2020 and we had our fingers crossed to get 77 mattresses to pay the bills for the warehouse.

Speaker 11 And that week we ended up getting 900 from one hotel in southern Vermont.

Speaker 11 We paid our rent, needless to say, but then we had to learn how to do mattress recycling at a quicker pace than what we had thought of before.

Speaker 11 We've slowly increased our prices with the market price to throw it away just because we spend seven to ten minutes per mattress in Box Spring disassembling it, sorting it out.

Speaker 11 So right now we are right around $35 per mattress.

Speaker 11 A lot of our employees, or at least 50% of our employees, are new Americans.

Speaker 11 So they're either, you know, in refugee resettlement programs or just folks around town that haven't necessarily been given a great shot at retaining a good job.

Speaker 11 During the spring and summertime, our busy time, we can get up to right around 12 to 15 employees.

Speaker 11 Just moving one mattress is enough for most people in a day, but today we've moved over 125, not to mention rip them up and recycle the contents.

Speaker 11 So it's a really difficult business, but honestly, I just love doing a good thing.

Speaker 11 And when people come in and they see the hard work my guys are putting in, they go, Wow, I am so glad that you're here in our state doing this. And I say, well, you're welcome.

Speaker 3 Joshua Costa, Sleepwell Recycling in Burlington, Vermont. How about that guy? No matter where you lay your head, we need your stories to make this series work.

Speaker 3 Get them to us at marketplace.org/slash myeconomy.

Speaker 3 All right, we got to go. No time for a final.
I had to get that Jay Powell cut in there.

Speaker 17 It's my bad.

Speaker 3 All right. Our media production team includes Brian Allison, Jake Cherry, Jessin Dueler, Drew Jostatt, Kario Keith, Charlton, Thorpe One College, Toronto, and and Becca Wineman.

Speaker 3 Jeff Peters is the manager of Media Production, and I'm Kyle Risdall. We will see you tomorrow, everybody.

Speaker 3 This is 8 p.m.

Speaker 13 You've finally broken loose from work. Three friends, one tea time,

Speaker 13 and then the text. Honey, there's water in the basement.

Speaker 13 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 13 Cincinnati Insurance, let us make your bad day better.

Speaker 13 Find an agent at cinfin.com.