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You get a tariff, and you get a tariff, and you get a tariff.

Or

maybe not.

From American Public Media, this is Marketplace.

In Los Angeles, I'm Kyle Risdahl.

It is Monday, today, the seventh day of July.

Good is always to have you along, everybody.

The macroeconomic lesson to be relearned here on this Monday, early in this second Trump administration, is that trade policy deadlines are trade policy deadlines until until they are not?

There were, of course, the tariffs of April the 2nd, then the 90-day pause set to expire this Wednesday, then this weekend signs from the White House that 90 days actually meant maybe August 1st.

Then today, letters from the president to 12 trading partners, big and small, prescribing how much American consumers are going to have to pay on imports from said partners, 25 to as much as 40%.

More letters to come to the rest of the world, we are told.

I could go on about the back and forth, the twists and turns of U.S.

trade policy the past six months.

Better, though, that Marketplace's Kristen Schwab explains what it's all going to mean for the people running the businesses in this economy.

The last time I checked in with the shoe company Deer Stags was in May.

Its president, Rick Muscat, had to stop a shipment of a million dollars worth of men's boots and dress shoes because President Trump had raised tariffs on Chinese goods to 145%.

For Deer Deerstags, that meant lost sales.

So we didn't have the inventory we needed to make sales.

So our sales in April, May, June were depressed.

He eventually got the shoes with a lower tax of 30%.

But between the loss in sales and higher costs, he's had to pull back on business investments, including the launch of a new branding strategy.

We cut back spending on advertising and marketing.

We paused any capital investment in

software systems that we were considering because we had to preserve cash.

Businesses have been operating with uncertainty for months now.

They've been in a holding pattern, and now the pain is starting to show up.

Scott Linsicum is Vice President of Economics and Trade at the Cato Institute.

Delayed investment can first become non-investment.

Those are dollars not being injected into the real economy.

less advertising less hiring less building and construction you know companies don't don't grow nicole paneteri who owns the brass owl and the tiny owl in new york city is less worried about not growing and more worried about shrinking her women and kids boutiques had a terrible june she thinks customers are hunkering down We saw about a 20% decrease in June, which is I've never seen in the 11 years I've been in business, I've never seen a drop like that.

If the sales slump continues, Paneteri has some hard decisions to make.

I don't know what the future holds.

And because there's so much uncertainty, we're pulling back hours and possibly staffing for the fall.

She says she may have to close one of her stores to reduce expenses.

I'm Kristen Schwab for Marketplace.

Should you be curious, here's a sampling of the new tariff rates on selected countries.

Bosnia, 30%, Cambodia, 36%, Malaysia, 32, Japan and South Korea 25.

But, as the president's letter said, and I'm quoting now, we will perhaps consider an adjustment to this letter.

On Wall Street today, none too pleased were equity traders.

Bond traders neither details numbers when we get there.

Tariffs may come and tariffs may go, but we'll always have the labor market to cover.

We got the big monthly jobs report Thursday before the holiday weekend, if you remember that.

It was, I think it's fair to say, surprisingly strong, which is great.

But a lot of those big data points that we talk about, like the jobs report, are looking in the economic review mirror.

They're telling us where we've been, not where we are going.

So, to see what might lie ahead, might I recommend the conference board's Employment Trends Index, which came out today.

Marketplace's Mitchell Hartman dug into that.

The Conference Board aggregates eight different labor market indicators, from first-time jobless claims and involuntary part-time work to sentiment about how easy it is for workers to find jobs and employers to find workers.

And in June, its Employment Trends Index held steady.

Conference Board senior economist Yelena Shulyetova says the labor market overall remains solid.

I don't think it's going to go like and drop off a cliff, but I do see continued slowdown to a point at which we may see an increase in the unemployment rate by the year end.

And here's Frank Fiorelli at Small Business Payroll Processor Paychecks.

I guess the word that I would use is frozen, right?

There's not a lot of hiring, but there's not a lot of firing either.

what's going on with employers says yelena shulietova is a great hesitation to increase or shrink their payrolls really to do much of anything right now companies are just waiting to see whether the uncertainty surrounding tariffs and other things is lifted meaning if workers have a choice they're probably better off staying put in their jobs says andrew flowers at recruiting tech firm appcast he describes this as an insider insider-friendly market.

And by insider, I mean, if you already have a job, things are pretty good.

Layoffs are fairly low, wage growth, outpacing inflation.

But if you're an outsider trying to find work, it's very difficult.

The job finding rate, the probability you move from being unemployed to employed, has been falling steadily for a while.

What recruiters are mostly looking to fill right now are what he calls standing up jobs, blue-collar and service sector work in health care bars and restaurants construction he says at the moment landing white collar professional jobs is way harder i'm mitchell hartman for marketplace

Six months ago tonight, January the 7th, the Eaton fire broke out in the San Gabriel Mountains north of Los Angeles.

18 people died.

More than 9,400 structures were destroyed.

More than 1,000 others were damaged.

Lives were uprooted and businesses too.

Not long after the fire, we started talking to a couple of small business owners as they were starting on what is turning out to be a very long road to recovery.

Joey Galloway owns a commercial block right in the heart of Altadena, part of which was gutted.

We're going to talk to him after the break.

First, though, one of his tenants from that burned-out building, Jimmy Orlandini, who runs his family business, Altadina Hardware.

Hey, how are you?

Good, how you doing in the shade, man?

It's hot.

How are you?

Good to see you again.

Good to see you.

Doing okay.

That didn't sound good.

One day at a time.

Well, tell me more.

What's it been like?

It's been like three, four months since we talked to you, six months since the fire.

Yeah, six months since the fire.

How you doing?

You know,

doing okay.

We're starting to make, you know, some progress is starting.

Our home, they're actually starting to clean it now, which you're still not back in your home, still not back in our home.

Yeah, everything in our house being thrown away.

Yeah.

Yeah, which is just, you know, hard to deal with.

I bet.

Yeah, and they finally, you know, got Joey got the okay to clear out the lot, which is nice, but it was rough when they started, you know, to watch everything clean.

You came and watched?

Oh, yeah.

I was here.

I wasn't sure if you were going to do that because for exactly that reason.

Yeah, it was.

First, I didn't think anything of it.

I was like, ah, it's going to be cool to to see everything cleared out.

And then, you know, they're dragging our forklift out and, you know, product that you could still make it out.

And it was just like, man, it's gone.

Now it's all cleared out.

How are you getting by business-wise?

I mean, you got other locations.

Yeah, we got other locations.

I said you were driving and doing deliveries, all that.

That's still happening?

Still happening as we can.

We're spread a little thin now.

Luckily, our other store in Santa Clarita and NLA have been pretty busy, which has kept us busy.

And there's been a lot of the Altadena crowd that has come up there to support us, which is really nice.

Last time we talked, you were looking for space.

Still here.

Still looking for space.

Still looking.

Yeah.

You know, I'm really hopeful now that a lot of the cleanup is done.

Because a lot of the commercial buildings that were left up here or in Pasadena were also being rented by the construction companies.

Oh,

who were doing the clean out?

Yeah, we're doing the cleanup.

They needed, you know, an office space or something like that.

And a lot of those are starting to move out.

So I've talked to a family friend that's a realtor, and he said, yeah,

looks like we may have some more opportunities coming up here, hopefully in August.

How much of a premium are you going to have to pay?

Because obviously you're going to have to pay a premium.

Yeah, I don't know.

I don't know.

With, you know, up here in Altadena, maybe not so much because

now that the cleanup is done, there's going to be a a lull in businesses.

You know, the building's not going to start for a while, I assume.

Well, I was just

volume.

So I'm looking at Jimmy's place here, the place you used to be, and it's cleaned out, but they're going to have to knock it down.

Then they're going to have to clean that out, and then they're going to have to rebuild.

I mean, it's going to be 18 months, two years.

I'm thinking five.

Are you?

Wow.

Three to five is kind of where my head's at.

So anything

less than three will be great.

My worry is there's just so much building that has to take place that are there enough contractors, enough engineers, architects, you know, just the amount of people that the county is going to need to approve permits and approve the building process.

I mean, that's just, it's huge.

I know this is a family business and you guys are rooted here and obviously your home is here.

But

as you think about this location and the next three to five years,

have you ever said maybe we just don't and we just go somewhere else?

I won't lie, it's definitely crossed our minds, but

no, all of our families here.

My wife dealt with some health issues at the beginning of the year, and

we had the support of our entire family, both her side and our side, while we dealt with that before the fires.

If something like that happens and we're, you know, a state away or even, you know, upstate California, California,

we don't have that luxury.

And that kind of worries us.

You know, moving away from families is rough.

That's the only thing that's keeping us here is our entire family's here.

How are you getting by financially?

I mean, obviously there's insurance, but are they covering the home, but also the business and all of that?

So

the business side, yes.

They have agreed to pay for about roughly a year of our income from the the business and our

what they deemed our essential employees when they looked at the business portfolio, you know, our business plan.

They said, okay, these employees are essential to the business.

You can pay them for a year, and we're going to cover that.

And

we used, we went to an outside broker or outside

adjuster.

Oh, you got a public, you got a public adjustment.

I was just going to ask, actually.

Because I'm sure you were wrestling with insurance paperwork morning, noon, and night.

Well, early on, we were really kind of like, oh, we can do this ourselves.

And actually, our insurance broker said, hey, for a business, you might want to think about this.

And my brother got in contact with a greenspan company, and it's, you know, it's paid off for sure.

Because, like I said, we could pay for all the employees that we could for a year.

At least our wages are covered for a year.

Just because we've been covering it on the show, and it's in the economic sort of zeitgeist,

tariffs, the macroeconomic situation, replacing all that stuff.

I i mean is that an is that an issue for you

you know i don't know yet the tariffs are definitely

we're definitely seeing price increases uh from our suppliers um

some i feel are going a little too too high too quickly

but i don't know what three to five years is going to show when we go to buy our inventory but it's it's going to cost a lot more so yeah we did get replacement costs for our inventory from the insurance company but yeah in five years replacement costs from

exactly.

Well, just from replacement costs before the fire till now has changed by at least 8%, 9%, and they're not going to pay that difference.

So

you're just keeping your head down and plugging away?

Yeah, that's all I can do.

Yeah, day by day.

Thanks, Tim.

Appreciate it.

Appreciate it.

Coming up.

The level of anxiety about the broader world.

Anxiety up, consumer confidence down.

But first, let's do the numbers.

Dow Industrial is off 422 points today, 9 tenths percent, 44,406.

The NASDAQ down 188 points, also 9 tenths percent, 20,412.

The SP 500 down 49 points.

That is only eight tenths of 1%,

62 and 29.

Y'all should have seen that coming, right?

Tesla shares went downhill today after Elon Musk announced he's starting a new political party.

Tesla stocks stumbled six and eight tenths of one percent today.

Bond prices went down.

The yield on the 10-year T-note thus went up 4.38%.

Right there, you're listening to Marketplace.

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This is Marketplace.

I'm Kai Rizdahl.

Before the Eaton Fire, 13 businesses rented space in Altadena from Joey Galloway.

Jimmy Orlandini's hardware store was in the building that burned along with a bike shop and a couple of others.

They are obviously not back.

None of the other half dozen that were in Joey's other building that's intact have reopened, though, either.

Good to see you again.

We're going to jump right in because you're a trained radio professional.

Tell me how you've been.

I've been good.

Been good.

Needle has moved a little bit since we spoke last, so I noticed it's cleared out.

Yeah, we got the debris removed.

I don't know if you recall the last interview we had.

Once I had retained my

my public adjuster green spand i was pushing to have the debris removed but i couldn't

the way it was worded to me uh was that uh considering the building needed to be torn down it didn't didn't make any sense to take the debris away

it was more cost-efficient to just take everything away at one time my issue with that was is obviously chemicals in there I had the property tested.

There is asbestos in there.

Oh, wow.

Being a hardware store with paint and all that stuff and so forth.

So

besides besides the environmental issue, it was an aesthetics thing to me.

I just didn't, I hated coming up here, seeing all that debris.

Also just psychic, right?

You want some kind of progress.

Yeah, yeah.

You know, I need to see some movement.

I'm kind of, I'm that, yeah, I'm that kind of guy.

If I see some things moving, then I'm a little happier.

We got the insurance company to finally allow us to remove the debris, but they still won't let us take the building down.

Really?

Yeah.

Why?

I don't know.

I mean, we talked about this like three, four months ago.

The facade is cracked and it's structurally.

I mean, I've had five contractors

and my

public adjuster sent a guy out and they all said the building needs to be torn down.

I suspect

once the insurance company

tells me the building has to be torn down, they've got to give me a number at that point.

So

I think they're holding off on that because they're not ready to give me a number yet.

So that building or the shell of it now gets all the attention.

This building, I was taking a little stroll before we started this morning.

Nobody's back in here, right?

Nobody's doing business.

No, no.

This building has, these tenants have not come back because they're waiting for the debris and everything to be cleared out first.

From next door.

From that space.

Now, the debris is out.

The next conversation I need to have with my

adjuster is,

is it safe for them to open prior to the building being torn down?

The thing, too, is once I get that thumbs up that they that we can start making the move for them to get back in, I've got to do some cleaning up in these units as well.

Too

last time we talked, we talked about how you're not a guy who likes to sit around waiting for stuff to happen.

But by definition, here now, you have to wait around and wait for stuff to happen.

How are you dealing with that?

You know,

I'm dealing with it because because I'm busy with the fact that

State Farm has dropped all my apartment buildings.

I think I mentioned that to you earlier.

You have other units, yeah?

Yeah, so I'll just real quick,

we received a letter last year stating that in 2025, all of my apartment buildings will be canceled.

The new insurance companies are all charging me two to three times more

than State Farm, but they're all making me do major upgrades.

So the fact that I'm busy with that is kind kind of taking my mind off of this yeah uh which is probably a good thing for me we were talking to jimmy a minute ago

uh and and i started throwing out timelines and he was like yeah i'm thinking three to five years before i'm back in this space what do you think

um

i'm thinking

two to three years that the building is done

I just, I don't, it's hard to say because

most of the architects are busy around here.

Most of the contractors are busy.

Yeah, yeah.

And I got to tell you, I was having a tough time finding people to do the upgrades on my apartment buildings.

So I've been having to pull guys from out of the area.

I recently hired an electrician from Norco.

Wow.

Shut up in San Diego.

Yes, yes.

So

I found that if I find guys out of the area, they're not as busy.

Because it seems like everybody locals getting all the work.

So it's a labor market problem.

It's a labor market problem.

Exactly, exactly.

It's a labor market problem just for my apartment buildings.

Forget that.

But it's definitely going to be a labor market problem for this one, what's going on here in Altadena.

So my game plan is, for example, I'm going to use that electrician.

I've got a contractor friend who lives out that way who actually referred me to him.

So he's got a list of vendors.

So I'm going to start pulling people from out of the area.

to get the work that I need to get done because it'll get done in a timely manner.

For example, I call my electrician to to upgrade some panels.

He's three, four weeks out.

So that's kind of one thing I'm dealing with.

But I'm finding through this process that

I need to look outside of the area, kind of outside the box to get things done in a timely manner.

Joey, thanks a lot.

Really appreciate your time.

Thanks for coming.

Appreciate it.

Yeah, yeah, anytime.

We are keeping tabs on a couple other businesses in town as well.

Craig Sloan at the Altadena Town and Country Club told us they have started demolition on the clubhouse.

They're hoping to partially reopen by Labor Day.

Shalene Hearing at Two Dragons Martial Arts is still holding classes at a local summer camp, still looking she is for something permanent.

We will talk to them all again in a couple of months as that very long road to recovery keeps on going.

There will also be more coverage of the LA fires on the Marketplace Morning Report tomorrow.

Dave Broncaccio on where residential recovery stands as he looks to rebuild the home that he lost.

We started today with businesses and how they're handling the Trump administration's latest tariff palooza.

We are going to end with how consumers are thinking about things.

The Federal Reserve Bank of New York is going to be out with its latest survey of consumer expectations tomorrow.

And we got what could be a preview today in the form of a poll from Yahoo Finance and Marist.

It shows about 80% of consumers are worried about how tariffs could affect their personal finances.

And because of that, respondents said they are planning to pull back on spending.

Now, Anybody out there remember how big a chunk of this economy consumer spending is?

Why, yes, about 70%.

So, Marketplace Samantha Fields has more now.

And with all of this uncertainty, which if we take the president at his word, will be served up daily this week with more letters,

we're going to look at what that's going to mean for how consumers feel and act.

The thing about consumers is they're human.

And Ayalette Fishback at the University of Chicago says how humans feel affects how we behave.

Worries about the economy influence consumption behavior just as much, as often even more than actual negative economic events.

When people worry the economy is bad or about to get bad, like many are now, they often get more cautious about spending.

Even though nothing bad happened yet.

That can become a self-fulfilling prophecy, Fishbeck says.

If we spend less because we're worried the economy is slowing down, we can cause the economy to slow down.

Suzanne Hsu at Cornell says people often pull back even if they don't have to.

When there's high uncertainty, people feel like they need to save the money for what could come next and put off the spending that doesn't feel as absolutely critical to day-to-day life.

That's why Wendy Edelberg at the Brookings Institution used to pay close attention to how consumers were feeling.

It used to be my job to forecast consumer spending for the Federal Reserve Board, and I watched the consumer confidence data like a hawk.

It was a very strong indicator of where consumer spending was headed, she says.

But since the pandemic, the link has just broken.

We saw this in 2021 and 22 when inflation started climbing and hit its peak.

Consumers were very negative about the economy, but they just kept on spending.

It'll take a while to know why that link broke and if it'll stay broken, Edelberg says.

But her theory is the level of anxiety about the broader world, I think, ramped up during the pandemic, and I think it stayed really elevated because of politics.

And she says that general anxiety could well be influencing how people feel about the economy, even if their own situation is actually okay.

I'm Samantha Fields from Marketplace.

This final note on the way out today in which the White House could have given us all three months of our economic lives back.

So there were those tariff letters today, right?

And the new, that's in air quotes, taxes on imports for various countries that I talked about.

Thing is, you do a side-by-side comparison, and it looks for all the world like what they did with most of them, is just round up or down the April 2nd tariffs.

Japan on April 2nd, 24% tariffs, today 25.

Kazakhstan, 27%, today 25.

Myanmar on April 2nd, 44%,

today 40.

See what I mean?

Three months.

Amir Babawe, Caitlin Ash, John Gordon, Oya Car.

Amanda Petra and Stephanie Seeker are the marketplace editing staff.

Kelly Silvera is the news director.

And I'm Kai Rizdahl.

We will see you tomorrow, everybody.

This is APM.

At Capella University, learning the right skills could make a difference.

That's why our business programs teach you relevant skills you can take from the course room to the workplace.

A different future is closer than you think with Capella University.

Learn more at capella.edu.