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All right, we are going to do the consumer economy in six little letters.

From American public media, this is Marketplace.

In Los Angeles, I'm Con Risno.

It is Wednesday, today, the 20th of August.

Good as always to have you along, everybody.

Our journey into the consumer underbelly of this economy today is best told by a pair of dueling three-letter ticker symbols, TJX and TGT.

TJX, the ticker symbol and also the name of the parent company of discount retailers TJ Maxx and Marshalls and HomeGoods, reported today that same store sales rose 4% in the quarter gone by, and the company raised its earnings outlook for the remainder of the year.

Not a whole lot of companies doing that, by the way.

TGT Target told investors this morning same store sales declined about 2% year-over-year, perhaps causal reason that the Minneapolis-based retailer also announced a new CEO.

And in those diverging corporate fortunes, as Marketplace Matt Levin reports, do lie some clues about the state of the American consumer right now.

Last week, Joanne Feeney was on the hunt for a stock pot.

She's a portfolio manager at Advisors Capital.

After striking out at a kitchen supply store, she headed to TJ Maxx Maxx and found a pretty nice European brand with good online reviews.

The price was extremely attractive.

I think I got this very large stockpot for somewhere around $30.

Like I had, you know, won the lottery a little bit.

Feeney says that I won the lotto feeling is crucial for TJ Maxx.

A slowing labor market and sticky inflation mean both higher and lower income consumers are already in value hunting mode.

Add that dose of dopamine you get after sifting through rows and rows of merch before finding your discount diamond in the rough, and TJ Maxx is gaining market share.

So that bargain hunting, treasure hunting aspect has continued to draw in a consumer who's been faced with a tighter and tighter budget over time because of these higher prices.

Meanwhile, shopping at Target doesn't seem to be generating as much delight as it used to, or revenue.

Sales are pretty much flat over the past three years.

Arun Sundaram at the investment research firm CFRA says while Target is still selling lots of groceries and other smaller ticket items, shoppers are looking elsewhere for bigger purchases.

Electronics, home goods, furniture, things like that.

Those are the categories where Target's really struggled over the last few years.

Since Target imports a lot of its own products or carries brands that do, tariffs and the vagaries of American trade policy have been a major headache.

Lorraine Hutchinson at Bank of America says for the TJ Maxxes of the world, which basically buy the stuff other retailers can't sell, tariffs aren't that big a worry.

I think it is a bit more immune because they're negotiating their prices after the product's been made.

So they have a bit of a leg up on that.

And while Target has lost some customers over its support and then withdrawal from DEI initiatives, TJ Maxx has mostly avoided political controversy.

I'm Matt Levin for Marketplace.

Wall Street today, tech was the big drag on things once again.

Not as bad as yesterday, though.

We will have the details when we do the numbers.

We seem to have come to, or maybe we are really, really close to, the turning point for a lot of companies and President Trump's tariffs.

Inventory that they stocked up on before the import taxes is running out and they really can't afford to eat the costs anymore.

So they're passing it on to consumers.

We saw that a bit in the inflation data that came out last week, the consumer and producer price indexes.

And if you listen to what corporate America is saying on its earnings calls, more price hikes are coming soon.

And they're coming, by the way, in more creative forms, because as Marketplace's Kristen Schwab reports, the price you pay for something isn't about what the sticker says.

It's about what you see at checkout.

Earlier this year, Greg Sugar, owner of Bowties of Vermont, was deep into tariff strategizing when he had a thought.

What if he added a small tariff charge to his products, kind of like a sales tax?

He floated the idea on LinkedIn.

You wouldn't believe the political backlash that there was.

It just seems to trigger people's minds in a political way.

The post got more than 600 comments, and the reactions were fraught enough for Sugar to abandon the idea.

Instead, he raised prices and cut staff.

I let go of a customer service rep.

I made two of my production staff members from, I moved them from full-time to part-time.

I cut things that I really wanted to keep.

That's why I was paying for them in the first place.

But these are the decisions we needed to make.

For businesses, increasing prices is usually a last resort.

They'd rather streamline supply chains, automate, or even sell lower quality stuff.

But as more tariffs lock into place, brands are running out of options.

And Marty Anderson at the the Parker Avery Group, a consulting firm that's worked with Aldi, PetSmart, and Lululemon, says companies have to be smarter than ever about pricing.

The thing that doesn't work is just a flat sweeping price hike across everything.

Consumers are more sensitive and suspicious of corporate greed, especially after years of inflation.

So companies are looking for targeted ways to raise prices that can sometimes feel sneaky.

They might cut free shipping or add return fees.

They might tack on charges at checkout.

That's become so popular that the point of sales company Square has a new feature to help businesses charge customers credit card fees.

Anderson warns, these tactics don't always go over well with consumers.

I think when they catch onto those things, you just kind of get a bad taste to your mouth.

You know, tell me what it costs.

Like, just be clear with me and transparent.

Like, I just want to know, like, what am I paying for?

But the ever-changing nature of the tariffs leaves businesses feeling like they can't set firm prices.

Janelle Zini at Aventura, a Spanish restaurant in Ann Arbor, Michigan, says adding a 3% service fee to checks felt more manageable than constantly recalculating the cost of paella.

Do we want to, every single invoice, be looking at, you know, how much did we get charged in addition on wine and deliveries and change menu prices, you know, correlated to that?

Or do we want to, you know, kind of have this overarching sustainability surcharge?

The 3% charge means a $24 grilled shrimp dish is technically $24.72 plus tax and tip.

Zini says she does get complaints from a handful of tables a week.

Do we have guests who ask us to remove it?

Of course, and will be, of course.

Zinni admits that raising prices is raising prices, no matter how you do it.

But she thinks for diners, a small tax is easier to swallow than a more expensive entree.

I still believe that it comes down down to value perception and they understand it when we're packaging it in a way that's like this is allowing us to continue doing what we do and what we love to do.

Esker Cycles, a mountain bike maker in Minneapolis, is adding a 10% tariff charge in September.

Owner Tim Krieger says a custom $4,500 mountain bike will cost almost five grand.

His costs have gone up more than that, and he needs to pass some of that on.

Essentially,

spread the love, spread the hurt around as best we can.

We take some, but we can't take it all.

Krieger is hoping the surcharge will be temporary.

It is my hope and my belief that these tariffs will not last very long.

He says the good thing about a line item is if tariffs go away, so will the surcharge, which means the final price will go back to normal.

I'm Kristen Schwab for Marketplace.

Bloomberg reported last week, and it has since been confirmed by Howard Luttnick, the Secretary of Commerce, that the Trump administration is thinking about taking money from the Biden-era Chips Act and using it to buy shares of Intel.

10% of the company is the figure that's being mentioned.

But whether that happens or not, the White House is inserting itself into corporate America in unheard of ways.

Joe Doe covers economic statecraft at Bloomberg.

He wrote about this the other day.

Joe, thanks for coming on.

Thanks.

I mentioned Intel up in the introduction, but do me a favor and run through the list of particulars that the president and his administration are, say, pushing the bounds of convention in getting involved with corporate America and American capitalism.

Yeah, absolutely.

I mean, the Intel bit is interesting.

But But beyond that, we saw at the beginning of a week ago that the president came out and made an announcement that NVIDIA and AMD, a couple of chip companies, had agreed that they would give a cut of 15% of their AI chip sales to China to the government.

These are the type of things, the type of actions that like to say that they're unusual understates just how unprecedented they really are.

Aaron Trevor Barrett, let me get to Intel specifically here.

How does the government, owning 10% give or take of this chip maker, help Intel make chips, sell chips, get caught up in AI, which it's woefully behind on?

How does the government doing this help any of that?

Yeah, I mean, I think, you know, ideally, you have this cash infusion that comes from these investments, right?

So that's cash that the company can use towards

many things, right?

Like they have this big plant in Ohio, this manufacturing facility that they're building out that was a major investment because of the CHIPS Act during the Biden administration.

But there's a lot more in terms of RD and other spaces that a lot of people in the market feel like Intel really needs to improve upon.

So I do want to be clear.

We don't really have a lot of detail as to why the government right now would be taking a stake, but

it is clear that the government does see Intel as central to national security, and especially during this second term, so much of the way they view the world and their trade policies and other policies is through this lens of, well, it's national security.

Aaron Trevor Brears, which is fine.

And just to the details part of it, we should say here that we don't have a lot of details on a lot of what the Trump administration does in economic policy.

And national security is, of course, their fallback on a lot of things that they've said they're doing.

Right.

Let me run this phrase by you here and we'll see what you think.

It sure seems like the White House is picking winners and losers here in corporate America.

Yeah, I think that's fair.

I had one source say to me, listen, if this was the Biden administration and this were happening, we would be calling it industrial policy and decrying the road to serfdom, to potential feudalism.

And I think it gives a lens into the way that investors, right, people with skin in the game, are viewing these type of actions.

There's a lot of uncertainty uncertainty behind them.

And when you start getting into directly involved in corporate matters, there are a lot of unintended consequences and parties being brought in.

Trevor Burrus:

I will quote the Wall Street Journal editorial page here.

They call this corporate statism, and then they say, and that never ends well.

And if you're a Republican president and you've lost the Wall Street Journal editorial page,

that's an interesting moment.

I would say this.

In the course of reporting out, the traditional

people who would kind of identify as traditional Republicans have said to me, this is very worrisome to me.

And oddly enough, the people who identify more as traditional Democrats have said, you know, this is kind of great.

Like, these are some of the things that the Biden administration had wanted to consider doing.

Like, why not take a cut from Silicon Valley companies that are already, you know, turning out some great profits with the help of the government?

Why shouldn't they do this?

So I found that to be quite an interesting situation.

Yeah, it totally is.

So play the long game here for me.

President Trump leaves office in early 2029.

What happens with the next occupant of the White House?

Do we keep doing, in air quotes, industrial policy this way, do you think?

We could.

We very much could.

I spoke to one source who said, listen,

if we allow for all these things to go through, because there are still some legal questions that are hovering over all of this, and it will be interesting to see how it plays out.

But if this does go through, one of my sources said, my concern is what happens when progressive Democrats get into office.

This seemingly is a roadmap for them to also take a heavy hand in corporate matters.

And what does that look like five, 10 years down the road when people have far more information of how it actually plays out in the marketplace?

Right.

Joe Doe at Bloomberg.

Joe, thanks a lot.

Really interesting piece.

Thanks.

Don't look now, but SPACs are back.

Shells, basically, that raise money and get themselves listed on a stock exchange.

Their real job is to merge with another company, one that already exists.

A lot of times it's a startup, and give that company a quick and easy way to go public, get access to the capital markets, and avoid the usual and lengthier route of doing a traditional initial public offering.

SPACs used to be big, and then a lot of retail investors lost money, and then they went out of style.

That was then.

This is now.

SPACs are back.

So is Marketplace's Novos Afo.

In some ways, special purpose acquisition companies, SPACs, are a simple proposition.

They're basically a company that's listed on the stock exchange that has cash.

Philip Braun, professor of finance at Northwestern University, says a SPAC is created with one and only one goal.

To go and search for a company to acquire and merge with.

While it's looking, investors can buy shares in a SPAC with the hopes of big rewards later.

That prospect sent SPAC activity to historic highs in 2020 and 2021.

There were more than 800 of them in those two two years.

Michael Alroghi of New York University looked at what came of all of that activity.

There was a temporary bubble where it looked like the companies going public were doing fantastically well, but pretty quickly that bubble popped and investors have lost, on average, 60 or 70 percent or more of their money.

In large part, he says, because of the lack of transparency with specs and their complex internal structures.

Regulators did issue new rules in 2024, and the the number of SPACs coming into the market declined dramatically until now.

For sure, we're seeing an uptick.

Ben Kwoznik of SPAC Research has tracked 81 of them so far compared to 57 for all of last year.

Kwoznick says the main thing driving the SPAC spike is retail investors.

There's a new wave of sectors and concepts that people are interested in getting involved in.

And so SPACs are seeing a resurgence as the quickest way to sort of tap into that investor enthusiasm in those sectors.

What are those sectors?

Matt Kennedy, a senior strategist with Renaissance Capital, points to new technologies.

Think quantum computing, next generation nuclear power, space technology, autonomous aircraft or flying taxis, Bitcoin treasury companies,

as well as artificial intelligence firms.

All moonshots, Kennedy warns, where there's still a lot of risk.

I'm Nova Soffer for Marketplace.

Coming up.

We're constantly working to figure out ways to create a product made out of essentially what someone else considered trash.

Another man's treasure, am I right?

First, though, let's do the numbers.

Dow Industrial is up 16 points today, less than a 10th percentile, 44,938.

The NASDAQ down 142, that is 7 tenths percent, 21,172.

SP 500 down 15 points, about a quarter percent, 63 and 95.

Target today, TGT dropped 6.3rd percent.

Welcome to the new CEO.

TJ Maxx, TJX companies added 2.7 tenths percent.

Here's some numbers on how Americans view our industry, journalism.

Majority of Americans say journalists are extremely or very important to the well-being of society.

But there's also this: 49% of respondents say journalists are losing influence.

That's from a Pew Research Center study just out.

Through with that, what you will, we are going to keep doing what we do.

You're listening to Marketplace.

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This is Marketplace.

I'm Kai Rizdahl.

Here is today's reminder that this economy is not a monolith.

The national unemployment rate, you might remember this from a jobs report a couple of weeks ago, it's 4.2%, historically pretty low.

Thing is, of of course we don't have just one labor market there are hundreds of them in cities and states all over the country and they vary a lot right now just for instance if you live in south dakota with unemployment below two percent feels pretty different than washington dc where it's six percent or california nevada about five and a half percent apiece marketplace of samantha fields has more now on those regional differences If you're the Fed or an economist trying to understand what's happening in this economy, you care most about national unemployment data.

But Layla O'Kane at the nonprofit Opportunity at Work says if you're just a person looking for a job, you probably care more about what's happening where you live.

Labor markets are local and local dynamics matter a lot for communities.

Right now, for example, the labor market overall is still pretty solid, but certain industries are not.

You've seen professional and business services and information layoffs up in June, and so that tech industry is just a little bit shaky right now.

And O'Kane says that's hurting the labor market in California, where a lot of tech is based.

Then you have D.C.

Federal workers that have obviously been laid off at high rates due to Trump administration policies.

And then there's also some decline in international tourism in D.C.

and in probably local tourism as well.

Which is also affecting the job market there.

Economist Katherine Ann Edwards says there are other factors less specific to this moment in time that also play a role.

You frequently see low unemployment rates in some low population states that have some pretty lucrative industries.

So think of the Dakotas.

South Dakota has one of the lowest unemployment rates in the country, as does North Dakota, but it also is a really small state that has some dominant industries in play.

What's happening at the national level does trickle down, says Heidi Schearholtz at the Economic Policy Institute.

If we enter a recession, unemployment really across the board rises.

When we enter recovery, unemployment across the board tends to fall.

So, even though state unemployment rates might be very different, they tend to move in tandem.

If the overall unemployment rate in the United States continues to rise as it has been, there will still be differences in unemployment rate levels from state to state.

But she says unemployment will rise virtually everywhere.

I'm Samantha Fields for Marketplace.

We heard from Matt Levin up at the top of the program about retailers like TJ Maxx, that is retailers that sell clothes primarily.

What happens, though, to those clothes after they are bought and worn and reworn, maybe handed down a time or two?

Mostly, they're bound for a landfill.

On average, and this data comes from the EPA, it's 2018 figures, the latest we have.

On average, we, that as Americans, put 11.3 million tons, 11.3 million tons of textiles into landfills every year.

But you know what?

It doesn't have to be that way.

Here's today's installment of our series, My Economy.

I am Lindsay Rose-Madoff, and I'm the CEO and co-founder of Sway So Shop.

We opened Sway in 2017 actually as a solve for the brand Patagonia.

Patagonia was like, okay, great, we really want to create a remade line, but we can't find anyone to do it.

And so we opened Sway in 2017 and kind of just hit the ground running and never stopped.

In 2020, when we started doing our own thing, that's when Sway, the brand, really took off.

We launched Sway It Forward and Then the truck started coming because it was like free to donate your stuff and we weren't charging and we, you know, immediately we ended up with hundreds of thousands of pounds of textiles, like in just a few short weeks.

We moved in about a year ago into downtown LA.

We're on the outskirts of the arts district.

When you first walk into the building, you know, you walk into the store and get to have the experience of all the upcycled clothes.

But as you go to the next level, you kind of see the sewing shop, which is like encased in glass.

So when clothes first come in, they either come in through the store where people are dropping off their textiles, or they're coming in through our mail-in program.

And they go to the sorting facility across the street where we clean, sort, process to then get them ready to bring over to the sewing shop where we start breaking down and cutting the textiles to then throw them onto the sewing line and create like upcycled items.

Total, there's like over 40 of us.

We're constantly working to figure out ways to create a product made out of essentially what someone else considered trash and turning it into an item that's desirable and durable enough for a second life.

Like these jackets were made out of old towels that literally no one wanted that we dyed, created a super cool pattern for and now it's like one of our top selling items.

We haven't even touched the surface of what we are able to do.

I mean everything that we sell goes back we invest in ourselves every single day over and over and over again.

And so we have never had a runway.

I mean we have a viable business model.

It's not like we're so you know I realized that a long time ago.

If I say that like margins don't matter, profits don't matter, then like no one will ever help us.

And on top of it we're cutting up trash and sewing it back together, you know?

So what people that look to invest in fashion, what they just see is something that looks really expensive instead of something that's critical.

I mean we're sad because there's this much stuff left over that no one wants, but in our environmental crisis that we're in, we have to have more attachment to what happens to these textiles that we're now responsible for.

Lindsay Rose Metoff, she's the co-founder and the CEO of Sway Sew Shop in downtown Los Angeles.

No matter where you are, no matter what you do, this economy and this series does not run without you.

So let us know how things are going on with your marketplace.org/slash mycon.

This final note on the way out today, the minutes of the most recent meeting of the Federal Reserve came out today.

We read it, so you don't have to.

The highlights, the central bank is still kind of not sure what tariffs are going to mean.

One-time or persistent price increases.

They're paying a bit more attention to the labor market than they have been the past couple of years.

Oh, and also, they just want to see more data.

Here's a little data point for you.

Uncertain or uncertainty mentioned 15 times in this page book, 27 times last time.

So, progress.

Our media production team includes Brian Allison, Jake Cherry, Justin Dueller, Drew Jostad, Gary O'Keefe, Charlton, Thorpe, and Juan Carlos Torado.

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

We will see you tomorrow, everybody.

This is 8 p.m.

Hey everybody, I'm Kai Rizdahl, the host of Marketplace.

I'm going to join Amy Scott on September the 9th.

She's the host of How We Survive, and also science writer Elizabeth Kolbert for a conversation about the economic consequences of our climate crisis.

We're going to break down how the acceleration of climate change is going to disrupt jobs and entire industries, even our daily lives.

But it's not all doom and gloom.

We're also going to dive into the solutions that are giving us hope right now.

Thanks so much to Odu for sponsoring this free webinar, and you can sign up today at marketplace.org/slash climate.