Producers feel the pinch

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Speaker 7 You do have to eat your vegetables, kids, but it's going to cost you. From American Public Media, this is Marketplace.

Speaker 7 In Los Angeles, I'm Con Risdall. It is Thursday, today, the 14th day of August.
Good as always, to have you along, everybody.

Speaker 7 We are going to begin today with apologies to Charles Dickens with a tale of two indicators.

Speaker 7 We learned earlier this week, Tuesday I think it was, that consumer prices in the form of the Consumer Price Index mostly held steady in July despite President Trump's tariffs.

Speaker 7 One might, again apologies, call it the best of economic times, or at least the best we might expect at this point.

Speaker 7 Today, though, was, if not the actual worst of economic times, certainly an unwelcome surprise.

Speaker 7 From the good people at the Labor Department came the July Producer Price Index, prices at the wholesale level, up nine-tenths of 1% June to July, the biggest month-to-month gain in three years.

Speaker 7 Marketplace's Novosaffo drew the short straw in our news meeting this morning, and he spent his day figuring out the disconnect and what it's going to mean.

Speaker 2 The consumer price index measures what we pay. The producer price index measures what the people who sell us stuff pay.
And in certain categories of the PPI, those people are paying a lot more.

Speaker 2 Ben Ayers is a senior economist at Nationwide.

Speaker 9 We're seeing

Speaker 2 But there were also spikes in hotel accommodations, freight transportation.

Speaker 9 We are seeing businesses being creative about how to

Speaker 9 make up for some of the costs from tariffs.

Speaker 2 In certain tariff-sensitive categories, prices in the producer price index have been rising for months, but big increases have not been showing up yet in the consumer price index, which ticked up only two-tenths of a percent in July.

Speaker 2 One reason is that many businesses are reluctant to pass on higher import taxes to consumers.

Speaker 11 That tells me that a lot of these markets are more competitive than I thought.

Speaker 2 Laura Veltkamp is a professor of economics and finance at Columbia Business School.

Speaker 11 If you raise your prices, you've got a competitor next door selling something something similar, and people won't buy your more expensive good. They'll buy the less expensive one.

Speaker 2 So for many businesses, the thinking has been, why raise prices now if you can wait it out in case the tariffs are negotiated away.

Speaker 2 Meanwhile, retailers have been burning through built-up inventory, and that's created a lot of uncertainty, says Matthew Martin of Oxford Economics.

Speaker 12 When is the cost increases really going to start and what is going to be the magnitude?

Speaker 2 So this producer price index may be an inflection point. It shows that cost pressures on on importers are going up.
And we know now that tariffs are here to stay, not just a negotiating tool.

Speaker 12 As we enter the fall, we are going to see higher prices for consumers. Maybe not as large of a rise as we had initially expected, but we think the duration of the increase is going to be longer.

Speaker 2 How long? Martin expects consumer prices to rise faster through the fall and to the beginning of next year. I'm Novasafo for Marketplace.

Speaker 7 Nine-tenths of 1% was, as I said, the month-to-month increase in wholesale prices.

Speaker 7 The year-over-year figure was 3.3%, and about a quarter of that increase was driven by a spike in one particular category, fresh and dry vegetables.

Speaker 7 The price your grocer is paying to source your veggies was up a whopping 38.9%.

Speaker 7 Daniel Ackerman has that slice of the story.

Speaker 13 Wholesale vegetable prices are just volatile, says William Masters, a food economist at Tufts University.

Speaker 14 So this is a number that just bounces up and down like a cardiac chart at the doctor's office. And the current bounce up is not outlandish.

Speaker 13 Still, I asked Brown University political economist Mark Blythe if he could explain the bounce.

Speaker 16 No, I can't, and no one can, because this could come from a whole host of things, right?

Speaker 13 He says it's too soon to pinpoint the exact cause, but he has some ideas.

Speaker 16 Could this simply be a result of climate change? Could this be the fact that things are hotter and drier? Yes.

Speaker 13 Or he says it could be that some farms in the U.S. are short on labor due to President Trump's immigration crackdown.

Speaker 16 This could literally be the fact that many of the workers that were picking these things in the fields are actually afraid to go to work.

Speaker 13 Another possible explanation? Tariffs.

Speaker 16 Over a third of our vegetables are imported.

Speaker 13 David Ortega is a food economist at Michigan State University. He says on average, those veggies are incurring higher tariffs than a year ago.

Speaker 16 Things like tomatoes, asparagus, cauliflower, cucumbers.

Speaker 13 Mexican tomatoes, which are most of the fresh tomatoes sold in the U.S., are taxed at 17%.

Speaker 13 The PPI report only includes domestically produced vegetables, not imports, but by limiting overall supply, Ortega says tariffs can cause homegrown veggie prices to rise too.

Speaker 16 Now there's less supply available to meet the demand, and so that's going to raise the price up.

Speaker 13 And because the grocery stores sourcing all that food run on such thin margins, Ortega says it would be hard for them to eat any sustained increase in wholesale prices.

Speaker 16 We could see some of those cost increases get passed on to the consumer in the coming months.

Speaker 13 If those wholesale prices don't settle down soon. I'm Daniel Ackerman for Marketplace.

Speaker 7 Traders were a bit disquieted by the inflation news, not dejected, just disturbed. Flat were the major indices.
We will have the details when we do the numbers.

Speaker 7 Not far behind inflation on the list of things keeping Jay Powell up at night and quite possibly tied for the number one spot, to be completely honest with you, is the job market.

Speaker 7 Job growth has slowed, as we know. It has slowed a lot.

Speaker 7 Kimberly Adams told us yesterday that the number of people who are what economists call long-term unemployed, that is six months or more out of a job, that number is growing.

Speaker 7 And adding insult to that labor market injury, the indignities of the modern hiring process are multiplying.

Speaker 7 Never fun, even in the best of times, looking for a job now means navigating a gauntlet of automated application processes set up to whittle down the hundreds, sometimes thousands of people applying, often without even a hint of a human touch.

Speaker 7 Marketplace's Megan McCarty-Carino has more now from the front lines of algorithmic application hell.

Speaker 18 You kind of can't imagine how chaotic it is to have nine small dogs in the same house until you experience it.

Speaker 6 Hi. Oh, oh my god.

Speaker 3 They're insane.

Speaker 19 I love them, and they're insane, huh?

Speaker 18 I caught up with Jackie on a particularly busy dog sitting assignment in Oakland. We're not using her full name because she's worried it could hurt her chances with potential employers.

Speaker 19 I just want everyone to know that I don't have a breathing problem. That is a pug sitting next to me.

Speaker 18 Dog sitting is actually her side hustle. She's been looking for a recruiting job in tech for about a year.
She shows me a spreadsheet where she tracks her applications.

Speaker 19 So I have a total of 529.

Speaker 18 529 applications, and only 39 led to any human contact. The vast majority of the entries went nowhere.

Speaker 19 That's the dehumanizing part where you don't even get an email saying thanks but no thanks.

Speaker 18 Despite an application process that's longer and weirder than ever, hiring platforms don't just use keyword filters for resumes.

Speaker 18 They often use automated systems that analyze extended questionnaires, grade work assignments, assess personality, or Jackie's favorite, conduct interviews with bots.

Speaker 19 Do you think they heard me roll my eyes?

Speaker 19 I will never do one.

Speaker 18 Technology has increased the number of jobs applicants can reasonably apply to. It started with digital job boards, then remote work.

Speaker 18 Now, AI helps applicants tweak their resumes and cover letters in a matter of seconds.

Speaker 18 But widening the application funnel comes with trade-offs, says Peter Capelli, a management professor at the University of Pennsylvania.

Speaker 20 Because the bigger the pool you've got, the more variation you've got in it. And that falls then to your selection processes to sort that out.

Speaker 18 All those added layers of algorithmic filtration. He says the odds of getting an interview are only about 3%,

Speaker 18 though applicants are jumping through more and more hoops.

Speaker 20 At some point, they just learn that this is not going anywhere and why keep banging my head on the wall.

Speaker 18 At this point, digital application portals seem like a lost cause to Oliver Golden Egan.

Speaker 21 I have not gotten traction on any applications that I have not had some sort of personal connection to.

Speaker 18 He graduated from Pomona College on scholarship last year. After interning at Harper's Magazine, he's been looking for full-time work in publishing.

Speaker 18 He usually tries to cold contact an employee of his target company so he can send his resume via email. He's even thought about delivering application materials on paper in person.

Speaker 21 I don't come from a background that's like necessarily like replete with those kinds of connections. My mother's a housekeeper.

Speaker 18 AI application systems are often sold as fixes to the traditional biases in hiring. But Princeton computer science professor Arvind Narayanen says they introduce new unfairness.

Speaker 22 The experience that we put these job seekers through, right? Being interviewed by a robot essentially, I think it's kind of a violation of basic dignity.

Speaker 18 He says there's little evidence AI can accurately predict who will excel at a job in most cases.

Speaker 22 If these are no better than random number generators, I think we should be explicitly using random number generators.

Speaker 18 Basically, choosing candidates by lottery after they fulfill some minimum requirements.

Speaker 22 You're not pretending to go through this opaque process that somehow magically picks out the best candidates, and so it's understood by everyone that it was just the luck of the draw.

Speaker 18 If Dog Sitting could pay the bills, Jackie says she'd gladly leave the job boards behind and stick with her pet friends.

Speaker 19 I don't feel ignored. I don't feel like I, you know, I'm just kind of disappearing into the void.

Speaker 19 Yes, they need a lot of attention and affection, but they give it right back.

Speaker 18 The perfect antidote to a dehumanizing hiring process. I'm Megan McCarty Carino for Marketplace.

Speaker 7 The United States of America is the biggest producer of oil and gas on the planet, perhaps the most global of all global industries.

Speaker 7 The United States of America is also a global leader in refining, and that's expected to remain true even as the growth in petroleum demand wanes.

Speaker 7 Not all refiners are going to stay on top, though, because as it turns out, global though the industry is, refining is a peculiarly regional business.

Speaker 7 And what's to come next for American refiners depends to a great degree on where they are. Marketplace Elizabeth Troval has more on that one.

Speaker 23 To make it in the refinery business, you need three things: a healthy supply of crude oil, friendly regulation, and local demand for your product. Robert Howers is with RBN Energy.

Speaker 21 So if you're on the East Coast or the West Coast, there's no crude oil pipelines connecting those refineries to the supply in the middle of the continent.

Speaker 23 In California, the refining biz is especially tough because the state is producing less crude oil. So refiners have to get it from somewhere else.

Speaker 21 California refineries are shutting down. Of course, you know, they have been.

Speaker 23 And governmental red tape in that that state isn't helping because it's more expensive to operate, says Neil Walters with consulting firm Carney.

Speaker 15 It's a very challenging environment from a legislative and regulatory standpoint. And it's also an area where the uptake of electric cars and the like is strong.

Speaker 23 Meanwhile, Midwest refiners close to ample Canadian crude oil are better positioned, says Debenole Chowdhury with SP Global Commodity Insights.

Speaker 14 They're kind of first in line when you think of the pipeline movements from Canada.

Speaker 23 The economy in the Midwest is also dependent on farming equipment.

Speaker 14 And we're not seeing the drastic quick electrification of any of that fleet.

Speaker 23 But there's one region, the Gulf Coast, that cuts above the rest. It's got favorable regulations and is well connected to the Permian, where crude oil is produced.

Speaker 23 And it's got a large export market in its backyard.

Speaker 14 We see Latin America not growing their refined product production, but seeing their demand continue to grow. So that means they rely on the United States Gulf Coast refiner to fill their supply gap.

Speaker 23 And he says, when you look at the demographics in that region, especially Texas with its large, fast-growing cities, there's still a healthy demand for transportation fuels.

Speaker 23 I'm Elizabeth Troval from Marketplace.

Speaker 10 Coming up.

Speaker 8 Our events are pretty packed to the point where sometimes we have no seating and people are sitting on the floor, sitting on top of each other.

Speaker 10 And it's a library.

Speaker 7 But first, let's do the numbers. Dow Industrial is down 11 points today, basically on change percentage-wise, 44,911.
The NASDAQ down two points. We'll call that flat, 21,710.

Speaker 7 SP 500, yeah, flat 64, 68. Shares in the cryptocurrency exchange bullish are on fire today after an initial public offering early in the week exceeded expectations.

Speaker 7 Bullish stock jumped 9.3 quarters percent today. What do you think the ticker symbol is for that stock? If you thought B-U-L-L, you'd have been wrong.
B-L-S-H.

Speaker 7 B-U-L-L is a trading platform or something. I don't know.
John Deere hit fallow ground today as the farming equipment manufacturer announced third quarter profits lower than last year.

Speaker 7 Income down 26% year over year, largely because

Speaker 7 tariffs. Deere and company shares down six and three-quarters percent today.
Bonds down. Yield on the 10-year T-note up 4.28%.
You're listening to Marketplace.

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Speaker 7 This is Marketplace. I'm Kai Rizdahl.
According to the New York City Rent Guidelines Board, that's part of the city government, the overall apartment vacancy rate there is 1.41%.

Speaker 7 So landlords have what you might well call the upper hand.

Speaker 7 And it used to be that if you wanted to rent a place in the biggest city in this economy, you would more likely than not have to pay a hefty broker's fee, even if you somehow found the apartment yourself online.

Speaker 7 New York was just one of two cities in these United States, Boston's the other, where landlords would hire a broker to market their rental and then make would-be tenants pay the fee.

Speaker 7 As recently as last year, nearly half of all New York City rentals had a broker's fee. That has been banned by the city council.
Whoever hires the broker has to pay them now.

Speaker 7 Massachusetts just did something kind of similar. Marketplaces Man at the Fields has more on how it's playing out so far.

Speaker 27 Earlier this summer, Catherine Crawford's landlord told her he wouldn't be renewing her lease. He was planning to sell her Brooklyn apartment.

Speaker 27 It had bay windows and great light, and she had only moved in a year before.

Speaker 27 So she started looking for a new place just before the law on broker fees was going into effect.

Speaker 28 I knew that the change was coming in June, and so I was hoping that I wouldn't have to pay it.

Speaker 27 Especially because she had just paid a broker fee last year, more than $6,000 for her current place, in addition to first month's rent and a security deposit.

Speaker 27 Crawford was a little worried that rents might shoot up.

Speaker 28 I talked to a broker, I think it was the day before the law changed, and he said, you know, you should come see it tonight and pay the broker's fee if you're interested, because the apartment's going to go from $3,000 to $4,000 overnight.

Speaker 27 At another place she looked at right after the law changed, a broker told her she could either still pay the fee and they'd just call it something else, or she could pay an extra $600 a month in rent.

Speaker 27 Right around then, Crawford also started noticing rents jump online.

Speaker 28 I got email updates on apartments I'd saved that were, you know, some were going up 100, 300, 400, 600. I think I saw one at 1,000.

Speaker 23 So like, that was shocking.

Speaker 27 But it didn't last. After a few days, she noticed many of those asking rents drop back down again.

Speaker 27 Kenny Lee, senior economist at the real estate website Street Easy, says that's pretty much what his numbers show too.

Speaker 13 The early data is sending me a clear message. Following the implementation of the FAIR Act on June 11th, the New York City rental market has been stable.

Speaker 27 There were some big spikes in asking rents that first week, and there were notably fewer listings too. But it now looks like that was a blip, Lee says.
Landlords and brokers adjusting to the new law.

Speaker 27 Year over year, asking rents are up a bit more than they were in the winter and spring, but he says that often happens in the summer in New York.

Speaker 27 Still, Lee Solomon, a longtime broker in Brooklyn, says it has only been about two months since the law changed.

Speaker 29 How it's all gonna play out in terms of the numbers, I think it's too early to say.

Speaker 27 Solomon is also a landlord. She and her husband own and rent out seven apartments in Brooklyn.

Speaker 29 There's a lot of fear now with landlords that, you know,

Speaker 29 will you be able to cover your costs?

Speaker 27 She says landlords are contending with lots of rising costs, property taxes, insurance, labor, and maintenance.

Speaker 27 And if they have to start covering those broker fees too, she thinks many will eventually raise rents to make the math work.

Speaker 27 But even so, not having to pay a broker fee will reduce the upfront cost for tenants.

Speaker 27 When Catherine Crawford moved into this apartment last summer, the one she's now packing up, she had to pay more than $13,000 in total just to get the keys, even though she found a place on her own on Zillow.

Speaker 19 It hit us a lot.

Speaker 28 I was thinking when I moved here, oh, well, if I stay even two years, it gets better, three,

Speaker 28 but then it ended up being one year.

Speaker 27 So the idea of having to pay a broker fee again so soon felt ridiculous.

Speaker 28 That's so cost-prohibitive if you have to move, you know, every couple of years.

Speaker 27 Luckily for her, she found a new one-bedroom apartment a few days after the law went into effect.

Speaker 28 I was so glad that I got the place that I did when I did because I didn't have to pay. It saved me more than $6,000.

Speaker 27 This time, she just had to pay first month's rent of about $3,500 and a security deposit to move in, which she did at the end of last month.

Speaker 18 If you just put like random stuff down, I'll move it from here.

Speaker 27 And because the apartment was on the market for a couple of weeks, Crawford actually got a deal. She'll be paying less than the original listing price.
I'm Samantha Fields for Marketplace.

Speaker 7 Wholesale inflation, as we covered up at the top of the program, came in way higher this morning than anybody had been guessing.

Speaker 7 The consumer price index earlier this week, the core measure, that's minus food and energy, just a hair higher than expectations. Inflation, big picture, more hot than not.

Speaker 7 I offer that recap to tee up this next segment. As things get more expensive, who would say no to a free book? Here's today's installment of our series, My Economy.

Speaker 8 My name is Ola Ekimo,

Speaker 8 and I'm the creator and director for the Free Black Women's Library in Bedford-Suyvesant, Brooklyn. The Free Black Women's Library is a community care space, co-working space, community resource.

Speaker 8 It's also considered a third space.

Speaker 8 I would describe it as a space that has a lot going on and it's all good.

Speaker 8 Initially, when I first started the library, it was actually a traveling library. It was 100 books and it was mobile.

Speaker 8 So I would take the books from place to place, install the books in the space, and then activate the space with some type of workshop. So it was a lot.

Speaker 8 Books are one of the heaviest materials you could work with. They're like bricks.
So I challenged myself and I said, if I'm able to raise 100K

Speaker 8 through crowdfunding, that means that the universe wants this and it's meant to be.

Speaker 8 I was able to raise the money and I got a storefront, renovated the storefront, took all the books out of storage, canceled the storage space.

Speaker 8 And the library is 100% grassroots funded, meaning that the community that uses the library are the main funders for the library. These are the people who sustain the space.

Speaker 8 Right now I have one part-time staff person and then I have one other person who works about five hours a week who helps me with my email situation, which is a mess.

Speaker 8 I sometimes feel like we have outgrown the space where we are now because our events are pretty packed to the point where sometimes we have no seating and people are sitting on the floor sitting on top of each other.

Speaker 8 So I would always like to be in bedside, but there are some days where I think, oh, it would be nice to have a space that's just a little bit bigger and with more than one bathroom.

Speaker 8 Part of the reason why all the public programs are free here is because I don't think it's fair that if somebody wants to take an art class, art class costs $200, that means they don't get to experience that class.

Speaker 8 Like, no, that's not fair. Whether you are making six figures or whether you're making nothing, it does not matter.

Speaker 7 Ola Akinmoo, she's the director of the Free Black Women's Library in Bedstead, Brooklyn. Let us know, would you? What's going on in your personal economy?

Speaker 7 Marketplace.org/slash my economy is where you can do that.

Speaker 7 This final note on the way out today, small-ish solace for those in the want to buy a house stage of things, but the average rate on a 30-year fixed mortgage last week dropped to 6.58%,

Speaker 7 the lowest it's been since October of last year.

Speaker 7 But, and however, that's as of close of business yesterday, which was before the inflation data that came out today, which in turn sent bond yields higher, which, because capitalism is going to affect mortgage rates.

Speaker 7 Our daily production team includes Andy Corbin, Nicholas Guillong, Maria Hollenhorst, Iru Ekpinobi, Sarah Leeson, Sean McHenry, and Sophia Terenzio. I'm Kyle Risdall.

Speaker 7 We will see you tomorrow, everybody.

Speaker 3 This is APM.

Speaker 6 Now's the time to start your next adventure behind the wheel of an exciting new Toyota hybrid.

Speaker 6 With the largest lineup of hybrid, plug-in hybrid, and electrified vehicles to choose from, Toyota has the one for you.

Speaker 6 Every new Toyota hybrid comes with Toyota Care, two-year complementary scheduled maintenance, an exclusive hybrid battery warranty, and Toyota's legendary quality and reliability.

Speaker 3 Visit your local Toyota dealer today, Toyota.

Speaker 6 Let's go places. See your local Toyota dealer for hybrid battery warranty details.