Should we fret over rising household debt?

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In which the theme of the program is economic headwinds.

From American public media, this is Marketplace.

In Los Angeles, I'm Kyle Risdahl.

It is Wednesday, today, 6th August.

Good as always to have you along, everybody.

This whole tariff imbroglio in which we find ourselves, I mean, it's a lot of things.

It is, of course, the biggest headwind.

For consumers, it's higher prices.

For companies, it's that too.

But also a question of cost-benefit analysis, because when you get right down to brass tax, they've got to do some math, those companies do.

What is going to cost them less?

Choosing to make whatever it is that they sell overseas and deal with the tariffs when they bring it into this country, or just making it here.

President Trump is banking on the latter, obviously, and our update on that corporate math problem comes to us today from the German newspaper Handelsblatt.

They report that Audi, a division of Volkswagen, is thinking about building a new plant in Tennessee that would produce as many as 200,000 cars a year, cars that would be generally tariff-free.

Building that new plant would save Audi the billions of dollars a year of lost revenue from tariffs that its U.S.

rivals have reported over the past couple of weeks, as we've been telling you.

But building new car factories ain't cheap and it ain't quick.

So, really, it's a spend money to save money, maybe

kind of thing.

Marketplaces to rebenish or gets us going.

Tariffs have changed the math for any automaker wanting to sell in the U.S.

All the automakers in the United States and Europe and Asia are furiously recalculating the incentives and the cost they're facing.

Patrick Anderson is CEO of Anderson Economic Group.

It might seem like a simple question: build cars there or build cars here.

In reality, it is super complicated because the tariffs are super complicated.

Build in Japan, your car gets a tariff of 15%.

Build here, your imported aluminum and steel get tariffs of 5%, 0%.

And parts get different tariffs depending on where you get them from.

For some vehicles now assembled in North America, including assembled in the United States, the tariff impact is actually higher than for vehicles that are imported from Germany or Japan.

This would work to Audi's advantage.

Build cars here, but with European parts that are cheaper, thanks to tariffs, than the parts its U.S.

competitors get from Mexico or Canada.

On top of that, Audi would be piggybacking on an existing Volkswagen plant.

And that's actually something U.S.

competitors can factor into their math, too, just by using existing plants.

Aaron Keating is an executive analyst for Cox Automotive.

We don't necessarily function at full capacity within the production facilities that are already here in the U.S.

That's what's behind General Motors' announcement that it would invest $4 billion to increase domestic production.

Another part of the complex math over where to make cars in a world of tariffs actually comes from the Trump administration's dismantling of regulations around pollution and electric vehicles.

Sam Fiorani is with Auto Forecast Solutions.

Removing any fines from emissions is being added to that calculation, potentially offsetting a tariff of an imported product.

But in general, Fiorani says the auto industry does not move quickly.

You won't see an avalanche of new plants in the United States for the auto industry.

There are too many vehicles that cannot be affordably built in the United States.

What he predicts we will see, more expensive cars.

In New York, I'm Sabri Vanishore for Marketplace.

Imbrolio, by the way, an extremely confused or complicated situation.

Like we were saying.

Wall Street today, tariffs, schmerifs, details, numbers, you know the drill.

We pointed this out when the Trump administration started going after colleges and universities: that higher education is a huge American export, one that would-be foreign students pay top dollars for.

And as the fall semester looms, the absence of a lot of those international students is going to start showing up, which is going to affect not only the school's bottom lines, because remember, higher ed is a business, but it's also going to affect the economy as a whole.

Marketplaces Novosafo has headwind number two.

Typically around this time of year, Samira Pardanani is swamped, helping international students make final preparations to attend Shoreline College north of Seattle.

They can study anything but business, computer science, technology.

They're very, very popular majors.

Okay.

Oh, I forgot engineering.

I can't forget engineering.

That's right.

And these students pay a pretty penny to go to Shoreline, more than twice the typical in-state tuition.

In total, the U.S.

government says says international students contribute about $50 billion

every year to the economy in tuition, housing, food.

But this year, Shoreline is experiencing a 24% decline in international applicants.

We are getting a lot of questions.

Students are anxious.

Parents are anxious.

There are visa denials that they're not understanding.

There's also sometimes we're hearing about lack of visa appointments.

June, July, August are the peak times for students to get their visas issued in order to be here on time.

That's Fanta Av, executive director at NAFSA, Association of International Educators.

The group has been tracking publicly available visa data and its own enrollment data, and it projects new international student enrollment will be down as much as 40%.

Because they've had massive difficulties in getting visa interviews, they're going to be unable to make it here for this fall.

Av says other Trump administration actions, such as revocations of previously issued student visas, have also had a chilling effect.

Many students are looking elsewhere.

A trend Travis Ulrich can attest to.

His software company Teradata helps universities and international students connect and has seen more students head to the United Kingdom, Canada, and Australia, among other places.

If we continue down this path, the worst case scenario here is that the United States loses its competitive edge in welcoming international students.

Which, Ulrich says, means losing an economic edge as well.

After all, many of those international students, often in STEM fields, go on to take hard-to-fill jobs in the U.S.

economy.

I'm Nova Safo for Marketplace.

High-dollar commercial development projects think sports stadiums or car plants can be really complicated.

The developers want to be able to build as easily and as, shall we say, financially efficiently as possible.

Communities don't want to just give away what they have to offer without getting something in return.

So enter things called community benefits agreements, CBAs, contracts between corporations and residents promising those communities specific tangible benefits as part of any specific project.

Of course, politics plays hard in those development projects too, as Cynthia Abrams reports now from WPLN in Nashville, Tennessee.

As fans flood Nashville's major league soccer stadium called Geodis Park, Marini Facey directs attendees to their seats.

If I'm in 206, which way is better?

Marine is in the middle.

Okay.

Facey works at three three different stadiums around Nashville, but says that Geodis is her favorite, citing the staff culture, hiring process, and pay.

At the end of the day, yes, a higher wage is very helpful.

It kind of has been like a cushion almost.

Facey's wage is protected under a community benefits agreement established before the stadium was built.

There's no exact blueprint for a CBA, but the soccer club's agreement featured hiring and wage requirements, the development of affordable housing and retail space, and an on-site child care facility.

Signed back in 2018, this was Tennessee's first ever CBA.

But this year, state lawmakers banned such agreements for corporations that will receive state economic incentives going forward.

They said they wanted to protect the job and economic growth that comes with companies moving to the state, and feared the requirements of CBAs could derail this.

In Tennessee, many major companies have gotten state dollars.

There's Oracle, General Motors, FedEx, and more recently, there's Ford, developing a $5 billion mega campus that will manufacture electric trucks and batteries.

State Senator Paige Wally represents the region around Ford's new plant.

He spoke at a legislative hearing earlier this year.

My part of rural West Tennessee, where the Ford Motor Company is expanding, they have been extraordinarily active in engaging with communities to build parks, to expand the Boys and Girls Clubs.

Wally supported the ban on CBAs, saying that Ford is already doing good work in the community.

That opinion is at odds with many residents.

A coalition of labor and faith leaders came together to form the group Blue Oval Good Neighbors.

They've been urging Ford to commit to a CBA since long before the ban was passed.

I think many times people believe that in small towns, people will just accept Trump change or crumbs.

That's Rachel Wilson, a member of the coalition.

She says Ford has received close to a billion in state incentives.

And they're investing back less than 1% back into the community.

And so Ford, to address all that, We are concerned about it will take more dollars.

The group is asking for an agreement that would ensure local hiring, provide replacement land to black farmers who had to sell through eminent domain, and protect their water sources.

Ford could sign a CBA.

They received state incentives before the law went into effect.

Instead, Ford has launched its Good Neighbor Plan and pledged to invest $9 million in the community.

Wilson isn't satisfied.

She says it's important to have a legally binding deal.

In a statement, Ford says it welcomes ideas from residents, but is unable to, quote, engage with every third-party group that purports to speak on behalf of residents.

So it could be a long road ahead.

Ford's campus is being built whether or not a community benefits agreement is signed, but that doesn't mean residents will stop trying to secure one.

In Nashville, I'm Cynthia Abrams for Marketplace.

Coming up.

He was able to get his hands on a 400-pound bluefin tuna.

Turns out you really can learn anything on YouTube.

First, though, let's do the numbers.

Dow Industrial's up 81 points today.

2 tenths percent finished at 44,193.

The NASDAQ added 252 points.

That's one and two-tenths percent, 21,169.

The S ⁇ P 500 found 44 points, 45 points actually, three-quarters of 1%,

63, and 45.

A whole bunch of Disney news today.

ESPN has taken over the NFL network, and in exchange, the Pro Football League is going to take a 10% stake in the sports network.

Nothing messy there.

Disney Broof has boosted its profit forecast for the year thanks to growth in streaming and also its experiences unit.

That's theme parks and cruise ships.

Also, the Mouse is paying $1.6 billion for the right to stream WWE content.

Disney, down two and two-thirds percent today.

Theme park rivals six flags, ticker symbol, fun, F-U-N, that's for reels, tumbled more than 20% today after missing revenue estimates.

You're listening to Marketplace.

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This is Marketplace.

I'm Kai Rizdahl.

We got the New York Fed's latest report on household debt this week.

We have a lot of it, we Americans do.

We're talking aggregate numbers here for credit cards, auto loans, mortgages, home equity loans, student loans as well.

And not only do we owe more on all of those balances, delinquency rates remain, and this is a quote from the report, elevated student loan debt in particular.

Marketplace's Mitchell Hartman is here with headwind number three: How indebted we are and who's most at risk.

Generally speaking, consumers borrowing more is a good thing, says bank rates Ted Rossman.

It usually means consumers are spending more.

Overall, consumer debt, it's a staggering $18.4 trillion.

Credit card balances rose.

They're very close to a record high, and some of that is economic growth, population growth, more card usage, less cash.

Rossman doesn't see a lot that's alarming here.

The household debt to income ratio is still pretty low on a historical basis.

Credit card and auto loan delinquencies are a little bit elevated, but banks aren't too worried.

But a lot of borrowers are worried, says Chip Lupo at personal finance site Wallet Hub.

It found in a recent survey of consumers.

48% of American households struggle with credit card debt.

Folks are depending more and more to supplement their income, using it for everyday expenses.

Lupo says this doesn't mean consumers are in deep trouble yet.

When we say struggling, it doesn't necessarily mean delinquent or in default.

It means that you're scraping just to keep up the minimum payments.

And for the nearly half of cardholders who don't pay off their balance every month, bankruptcy Ted Rossman says the financial hold just keeps getting deeper.

They're facing very high interest rates.

The average is around 20%.

Most of them have been in debt for more than a year.

Student loan debt's another red flag for Rossman.

After a pandemic pause, borrowers had to start paying again in 2023, but missed payments only started being reported to credit agencies this year.

We're really just starting to see the big rise in serious delinquencies and defaults on student loans.

People who are in debt trouble tend to prioritize making their monthly mortgage and auto payments first to keep their house or car before they focus on getting current with their student loans.

I'm Mitchell Hartman for Marketplace.

If you've been to the meat aisle and your local Piggly Wiggly lately, you have surely stopped and done a double take.

A pound of ground beef right now sits at a 10-year high, $6.12.

That data, by the way, is from the not rigged or politicized, no matter what you hear, Bureau of Labor Statistics.

It's up more than 10%, beef is, since the beginning of the year.

So we got a cattle rancher we know on the phone, Nathan Bradford, is in Bowley, Oklahoma.

So, cow business for us right now looks really good.

Markets are high.

Matter of fact, we just said another all-time high this week.

Beef demand is showing strong, but the cattle inventory is low.

But we're doing good here on on the ranch

so some of the challenges we have here in in the states is you know in the previous years it's been dealing with drought so last year it was real hot dry we rain just cut off ponds i was hauling water in this year it's actually a little bit different so our ponds are full grass is green everything is working in our favor we've got a high market our inputs as low as it ever been.

So we're expecting when we take these cattle to the sales this fall, we'll see these cell barns fill up.

Since the cattle numbers are low as they've ever been since the 1950s, it has its challenges, you know, with keeping up with demand.

But they have cut slaughter rates.

So packing houses have slowed down the processing so they don't overrun the system.

But, you know, everybody's trying to play their part in managing this whole ordeal.

So we're running around right now about 150 mama cows.

We've just

sold several of them, tried to take some advantage of some of these high prices.

Have, you know, kind of got to find that sweet spot.

Right now, if it's a calf coming off of its mama, weighing around 400 pounds, nice number one black steer, it's bringing 2,000 and more.

Replacement cows it's costing i've seen a couple of five over five thousand dollars for one single cow

being part-time does have its challenges right now i've took off a few days um we're in full-fledged hay season we're trying to bail up hay and uh get prepared for the winter so That's what we're doing right now.

It's one of those deals that I will just say that I don't know how long a person really can keep up at this pace.

I just told my wife the other day, I just don't know how much I can do on my own.

So possibly we may have to scale back.

Even with these high prices of cattle, it doesn't help out with shortage of labor, finding people to help hire out on your operation.

The amount of people moving to the country is very low, and it's not a whole lot of people moving to the country.

So resources for help is is very challenging.

But, you know, I still got a good solid another year, and we're going to make it do what it do right here on the G-Line Ranch.

Nathan Bradford making do at the G-Line Ranch in Bowling, Oklahoma.

All right, we're going to stay with food here, not directly the business and economics of it, more the how-to of it.

Specifically, YouTube has become the place for food tutorials, dishes, and cuisines and techniques of every type, and not just for home cooks either.

The pros are watching them too, it turns out.

Kate Crater wrote about how YouTube is shaping the next generation of chefs in Bloomberg the other day.

Kate, it's good to talk to you.

So good to talk to you.

You start this piece with an anecdote that will be familiar to anybody who has gone to YouTube for help with a DIY project, rarely though with a 400-pound tuna.

Tell us that story, would you?

I was going to say, I was going to say familiar if you're used to extreme

working with extreme fish.

There's a great chef in London.

His name is James Lowe.

He had a restaurant called Lyle's that was one of the top restaurants here in London.

And he was someone who only cooked with British ingredients.

And then all of a sudden in 2023, when

the waters around the UK got a little more friendly and some restrictions were lifted, he was able to get his hands on a 400-pound bluefin tuna.

And he had never had experience with one before.

You hadn't been able to catch one for decades.

And so he watched hours and hours of YouTube with his team to to look at how professionals, specifically ones in Japan, were butchering a fish like this.

But it was the kind of fish, like it took five chefs to carry it into the restaurant.

They had to take over the dining room just to give you the size of it and to give you a sense of what you have to learn.

And you know what?

Miraculously or not miraculously, that information is now available on YouTube.

It is amazing, truly, as I said at the top.

The broader thrust of this piece, though, is that not only are chefs using it, using YouTube rather, to learn how to do things, but they're also using it for brand building.

They are using it, some of them actually, to jumpstart their own restaurant.

It has become a tool now for both professional chefs and those who want to be as well.

It's exactly true.

I mean, something that's amazing, I've been in this business for a while, and there's a chef called Thomas Keller

out at the French Laundry, and he likes to tell a story about when he was starting out, which was the 80s in New York City, if he wanted to learn a dish, if he wanted to get the sense of what a restaurant was doing or a chef was doing, he had to walk through the streets with a notepad to a place and hope that the menu was on display in the window.

Usually it was.

And he would sit there with his notebook and take notes.

And now,

one thing that's great about YouTube is that it's encouraged people to share recipes that you would have once upon a time have been secret.

And that democratizes this whole thing, right?

Because I now, as a passable home chef, can sort of try my hand at all these things that the pros are doing.

Well, now I can wait for you to open a restaurant, basically.

Like

you just have to figure out what your specialty is.

But it's happened.

I mean, you talk about a bunch of people in this piece who basically did that.

No, exactly.

You have some very good precedents to follow.

Here in London, starting, like during the pandemic, people had time at home to start watching YouTube videos, and there was a lot of U.S.

style pizzas that they could stream from places like Barstool.

And so you could start to see, I feel like it just happened that all these Brits got exposure to pizzas like New York style and New Haven style.

Yay.

And so it's made my life here a lot better because a couple of them like left their jobs in tech and started making New York style pizzas, which you need a hot oven, but you don't need a professional oven.

You can get one like a company called Ghosny makes them, and they can cost like 400 pounds, which if you save up your money, you can get one and put it in your backyard and become a pizza expert.

I was just in London.

I clearly missed the pizza craze.

Look, yeah, well, you know, my bad, right?

But I do have to point out that in the kicker of this piece, there's this little thing that says, you know, all the young chefs now are going to TikTok.

Forget YouTube.

Right?

Wait, that's the spoiler, spoiler alert.

One of the, sorry.

There's a great, there's another really talented chef who I got to talk to called Jonathan Tam, who's at a restaurant called Jatak in Copenhagen, one of the world's great food cities.

And he was saying he a decade ago he worked at NOMA, you know, one of the world's best restaurants.

And he's not, he's not very old, but he says all the young chefs in his kitchen, like they don't even look at YouTube anymore because those videos are too long.

They look at TikTok.

Unbelievable.

Kate Crater, food editor of Bloomberg Pursuits.

We got her in London.

Great piece about chefs.

Oh, thanks.

Great to talk to you.

Come to London, eat pizza.

This final note on the way out today, a quick update to Elizabeth Troval's story yesterday about the diverging fortunes of oil and natural gas in this economy.

Oil on the way down, gas on the way up.

Again, prices do not complete analysis make, but both crude benchmarks today down another percent and a half.

That is six days in a row.

Natural gas up another two and a half percent.

Our media production team includes Brian Allison, Jake Cherry, Justin Dueller, Drew Jostin, Gary O'Keefe, Charlton, Thorpe One Coles Torado, and Becca Wineman.

Jeff Peters is the manager of media production, and I'm Kai Risdahl.

We will see you tomorrow, everybody.

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