Special Coverage from "Marketplace": The Real Costs

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Speaker 3 This is a Marketplace Special, The Real Costs. I'm Kai Rizdahl.

Speaker 3 These are interesting times in this economy. The basics, you know, inflation is still happening, the job market is weakening, tariffs and uncertainty lather, rinse, repeat.

Speaker 3 But the news of the day, because there are things every day,

Speaker 3 it doesn't quite capture the real costs of what's happening out there.

Speaker 3 We are going to begin with and talk a lot today about the way we measure this economy and the costs that come if we can't rely on some of the key indicators.

Speaker 3 Those of us in the economic journalism world are far from the only ones glued to our screens when these reports come out, you know, and we all use it in different ways.

Speaker 3 So to start us off, we've called Nicole Survey. She's an economist at Wells Fargo.

Speaker 3 And we're going to talk to her about the data point of choice that she uses at the moment, the Consumer Price Index, and how it fits into her day-to-day. Nicole, it's good to have you on.

Speaker 4 Thanks for having me.

Speaker 3 Let's go back to

Speaker 3 Tuesday morning. Um,

Speaker 3 and you get out of bed at whatever time you get out of bed. Is your first thought, ooh, CPI comes out today?

Speaker 4 Yes,

Speaker 3 not coffee, tea, I have to walk the dog, but CPI?

Speaker 4 It's CPI comes out today, therefore, I should probably get a coffee on the way to work.

Speaker 3 And what do you, as you approach

Speaker 3 getting this data, right, 8.30 in the morning Washington time, 5.30 for those of us on the West Coast,

Speaker 3 what's your thought process going in?

Speaker 4 So going in, so in my role as an economist, going in, I make sure that I know what my my expectations are.

Speaker 4 And then when the data actually hits at 8.30, first thing I'm doing is Googling, like everyone else, BLS, CPI, pulling up this.

Speaker 3 You don't have it bookmarked?

Speaker 3 I don't, actually.

Speaker 3 Okay, pro tip, bookmark it.

Speaker 3 I'm just saying. All right.

Speaker 3 So here's what I want you to do, if you don't mind.

Speaker 3 Share your screen with me, and let's pull up that CPI report. And I want you to sort of walk me through, first of all, how you scan this thing.

Speaker 4 Yes. So once I get to, once you Google BLS CPI and for the bookmarking, you come at the Consumer Price Index landing page here.

Speaker 4 And then on the BLS website, you can look at the report in different ways. But I guess I'm also old school here.
I always scroll straight down and I do the PDF version.

Speaker 3 Okay.

Speaker 4 Because that gives you all of the tables in one go. And so if you're control effing through this report, you can find everything because all the tables will be listed in the PDF.

Speaker 3 Is that how you do it? You basically control F?

Speaker 4 Yes.

Speaker 4 If I'm looking for a particular series, so for instance, what's been interesting to us or what we've been keeping an eye on is some import-heavy items because we know that they're subject to tariffs and we want to see if those tariffs are being passed on to consumers via higher selling prices.

Speaker 4 And so you can kind of cherry-pick a little bit and look through the report and try to find some of those items. So one that we've been looking at is household furnishings, for instance.

Speaker 4 So I'll do that.

Speaker 3 Right.

Speaker 3 Okay. So you go through, you do your control effing

Speaker 3 and all of that. How long on CPI day do you spend in these data tables?

Speaker 4 So

Speaker 4 in my job, we have indicator reports that we release. And so what we do is we get the press release, we try to digest it.

Speaker 4 I would say I probably spend usually about 10 minutes looking at table one and then table two.

Speaker 4 And then we start to write a report. So I over here, Sarah House, Michael Puglesi, and I, we share the coverage of inflation.

Speaker 4 We write a report, the three of us all together, and try to get it published for our distribution within an hour. So usually

Speaker 4 that's how I'm digesting these.

Speaker 3 You're banging it out. You got a little bit of a deadline.
Yes. Yeah.

Speaker 3 Wells Fargo has, I'm sure, reams and reams and reams of data at its disposal in in-house, right? Its own data.

Speaker 3 What does the BLS do for you that your own stuff can't do?

Speaker 4 Yeah, that's a great question. And I think this speaks to not just the BLS, but all government data.
You also have the Bureau of Economic Analysis. So as you said, Wells Fargo, massive bank.

Speaker 4 We're a G-SIB. We're one of those globally systematically important banks.
And so we do have access to a lot of data, but we don't have access to all consumers, all businesses.

Speaker 4 Whereas the government is in a better position to have a sample that really, truly represents most of businesses and consumers better than even a large institution like Wells Fargo can.

Speaker 3 Aaron Powell, setting aside then for a second, the

Speaker 3 I don't want to play this down at all because it's really serious, but the brouhaha over the politicization of government economic data. There are well-known problems with data collection now, right?

Speaker 3 Survey response rates and lack of resources and all that stuff.

Speaker 3 Where is that on your list of things to be worried about?

Speaker 4 Pretty high. If I were to say top 10, it's probably rising to three, too.

Speaker 4 I think, especially with the payroll report that we got a few weeks ago, you saw that the size of the revision,

Speaker 4 that was shocking. And if we look underneath the details, we know it's because you see the survey response rates are falling.
And the natural conclusion from that is maybe we're not surveying well.

Speaker 4 And so my immediate gut reaction is maybe I should not take that initial preliminary estimate for July literally, because we know that perhaps the preliminary quality is not great because of these issues with surveying.

Speaker 3 Does that give you a little bit of

Speaker 3 feeling?

Speaker 4 It does, especially when in my world,

Speaker 4 we serve institutional clients who are trading on this information the minute it drops.

Speaker 4 And so that's what makes it very difficult is when you're kind of grappling with what do I think the underlying trend of employment growth actually is and when is that actually going to show up in the data.

Speaker 3 So let me ask you this then as a sort of a

Speaker 3 way to bring this home. Are you able to, when you are out at your local Piggly Wiggly shopping for eggs or milk or whatever whatever it is,

Speaker 3 can you separate all this data that you see

Speaker 3 from sort of how you think about your daily life?

Speaker 4 I don't think I can, honestly. I'm so deep in this now.
When I'm out, I don't, that's not so bad where I keep, you know, track of my receipts and look at my monthly inflation figures.

Speaker 3 Nicole's right personal inflation figure, right?

Speaker 4 But I do notice it. So, for instance, I remember in the CPI report before this one, I knew that avocado prices were just through the roof because I was making a guacamole.

Speaker 4 And I was so glad to see it validated when I saw the report.

Speaker 4 Things like that, where I will make note of prices that I'm noticing when I'm at the grocery store and I'll go ahead and check it when I get the CPI report the next month.

Speaker 3 The economy is real life, people. Nicole Survey at

Speaker 3 Wells Margaret. Thank you, Nicole.

Speaker 4 Thanks.

Speaker 3 When you hear Bureau of Labor statistics, you probably think about what Nicole and I were just talking about, the hard data, inflation, and the jobs report, all of that.

Speaker 3 But the BLS has a softer side, too, the side that measures things like did you sleep well did you enjoy your lunch how late were you up with your baby and as our special correspondent Stacey Vannick Smith reports those questions and many more add up to something called the American time use survey which the BLS has been doing since 2003 and it's kind of an economic gold mine here's Stacey The other day, economist Allison Schrager and I decided to contribute to the economy.

Speaker 9 We're on the High Line, a famed park in New York City's West Side. And we are just leisurely hanging out.

Speaker 5 We are leisuring. Economic leisuring.
This is wonderful, but like we're not contributing to the economy that I can see.

Speaker 9 Can there be positive externalities to how you spend your leisure time?

Speaker 5 Positive externalities is economists speak for good things that come from walking in the park. Schrager says economists care a lot about this.

Speaker 9 I love the time you surveyed. Economists try to measure utility or like how happy people are.

Speaker 3 How happy am I?

Speaker 11 You're walking people through a day from 4 a.m. until 4 a.m.
the next day. A lot of those hours are sleep.

Speaker 5 This is economist Michael Horrigan, one of the architects of the American Time Use Survey. He says, not only does he want to measure how happy I am, but also when I felt happy.

Speaker 5 The time use survey comes out once a year, but thousands of people take it every month, starting with.

Speaker 11 What was your first activity? You know, I got up and I made breakfast. And then for each activity, how long did it take place?

Speaker 5 Like I ate breakfast for 45 minutes.

Speaker 11 Right.

Speaker 5 So 6.45 a.m., made coffee with milk, drank it while doom scrolling, and soft-boiling an egg for seven minutes.

Speaker 5 This is exactly the kind of information that Horrigan wanted after decades at the BLS, overseeing the jobs data and inflation reports.

Speaker 5 That's because the time-use survey can help economists understand these numbers more deeply. And the time-use survey goes deep.

Speaker 7 deep.

Speaker 11 Between 3 and 4 p.m. yesterday, you said you were walking the high line in New York City.
Yeah. Please use the scale of from zero to six.
How happy did you feel during this time?

Speaker 5 A six for sure. It was so nice.
How do you feel while doing different activities? This is from the wellness section of the survey.

Speaker 11 Pain. How much pain did you feel during this time? From zero to six.

Speaker 5 This is emotional pain, right? Because I did have a blister on my sandal.

Speaker 11 It's any kind of pain at all.

Speaker 5 Any kind of pain. Okay, well, then we're going to say a one.

Speaker 11 Okay. It's minor.

Speaker 5 From bliss to blisters, there is a lot economists learn from this data. It's about how we live in the economy.

Speaker 5 For example, if your job is making you frustrated and stressed, consider a different field.

Speaker 11 Jobs in agriculture, logging, and forestry ranked the highest on happiness and meaningfulness

Speaker 11 and the lowest on stress.

Speaker 5 The survey can also help illuminate the economic trade-offs we make.

Speaker 11 Take, for example, the role of women in the labor force. Who's doing the housework? Let's say we have a traditional husband-wife.
What is that division of labor?

Speaker 11 And what does that mean in terms of an opportunity cost? Do you observe lower work hours by the people who are doing more household production, for example? Do you observe lower wages?

Speaker 5 Child care is one of the hottest topics in the survey.

Speaker 5 For example, if companies are desperate for workers and the survey shows people are staying out of the workforce to care for their children, company owners could provide child care or a city could put policies in place that encourage the creation of daycares.

Speaker 5 Well, we are on our leisure activity on the high line, which was not supposed to cost any money, but I am getting a caffeine headache.

Speaker 5 Or as an economist might call it, a positive economic externality. AKA, there is a coffee card in my future.
The future of the time-use survey? Very much in question, says Horrigan.

Speaker 5 He's worried the survey will be scrapped amidst all the budget cuts and data questions at the BLS.

Speaker 5 Could I get a

Speaker 3 cold brew, please?

Speaker 5 $7.59.

Speaker 5 No free leisure. That's right.
The Consumer Price Index did just report that coffee prices are up 14% over last year, not to mention a 50% tariff on imports from Brazil.

Speaker 5 Not loving the outlook for my pain index. Feeling happier drinking coffee on the High Line in New York, I'm Stacey Bannock-Smith for Marketplace.

Speaker 3 I went out on the socials the other day. Blue Sky is my platform of choice after, you know, the whole Twitter thing.
And I asked you all for questions about this economy at this moment.

Speaker 3 And we got a lot like this one. It's from Mary Ann Singer in Noblesville, Indiana.

Speaker 3 Given tariffs, government layoffs, and uncertainty from conflicts abroad, she writes, why the heck does the stock market keep going up?

Speaker 3 First things first, Mary Ann, as you know, the stock market is not the economy. But Wall Street traders do respond to what is happening in the economy, and that, for them right now, exkews positive.

Speaker 3 There's the prospect of the Federal Reserve finally cutting interest rates. There are tens of billions of dollars being spent every month on artificial intelligence.

Speaker 3 President Trump's agenda is generally deregulatory, which traders like, and his tariffs haven't really bitten

Speaker 3 yet.

Speaker 3 Why they're not more nervous about all the other stuff, the slowing labor market, the fear and uncertainty around immigration enforcement, the conflicts abroad?

Speaker 3 Your guess, Marianne, is as good as mine. Got this one from Brian Springer.
How much would lowering the benchmark rate actually influence the interest rate on government debt, that is, treasury bonds?

Speaker 3 Oh, Brian, very good question. What he's talking about here is the interest rate the Federal Reserve controls.

Speaker 3 Its full name is the federal funds rate, the rate that banks and other big financial institutions charge each other for overnight loans.

Speaker 3 And when it moves up or down, it affects the cost of borrowing across the economy. Mortgages, credit cards, car loans, all of it.

Speaker 3 Brian's question is what will happen to the cost of government borrowing if the federal funds rate goes down. The short answer is it'll go down too.
The longer answer is it depends.

Speaker 3 The yield, which is a fancy word for interest paid on a bond, the yield on short-term Treasury bonds will probably go down.

Speaker 3 The yields on longer-term bonds, say the 10-year, they're also influenced by how risky traders think lending to the government is over 10 years.

Speaker 3 And if the market sees more risk in those longer-term bonds, if maybe they're worried about inflation, the yields on those might actually go up.

Speaker 3 Now, how much would yields move if the benchmark rate moves? Yeah, I couldn't tell you that.

Speaker 3 Coming up, an Apple Farmer, we know on how he runs his business when those economic headlines are what they are. That's next on the real costs.
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Speaker 3 This is a marketplace special, The Real Costs. I'm Kai Rizdahl.

Speaker 3 Those headlines of which we speak often, not always, but often center on economic data.

Speaker 3 We talked about the Consumer Price Index with Nicole Servey, how she working as an economist at a Big Wall Street bank uses it.

Speaker 3 But she is just one of countless economists in all kinds of different disciplines waiting eagerly for data of every variety.

Speaker 15 So the first thing I do, I'll search for it.

Speaker 15 I probably should have a bookmark for it, but I don't.

Speaker 3 Oh, my lord, this is two economists in a row. Nicole had the same thing.
I'm like, you guys, bookmarks. That's what it's for.

Speaker 15 Google works.

Speaker 3 That's economist Abdullah Al-Birani at the University of Northern Kentucky. I read a column this morning, a newsletter actually, because that's what people do now,

Speaker 3 by a law professor

Speaker 3 who was talking about the difficulty of teaching the law right now, his pedagogical obligations, at a time when

Speaker 3 law is being challenged, shall we say, in the current political environment.

Speaker 3 And I wonder how you think as a teacher, how you think about your obligation to your students with this data and

Speaker 3 how they should think about it.

Speaker 15 This has become a bigger conversation that we have. So errors, biases in data with response rates being so much lower become a bigger concern.

Speaker 15 So our teachings have evolved to make sure that we're we're, you know, early, even in undergraduate levels, talking about measurement error and, you know, confidence intervals in more detail than we probably did in the past.

Speaker 3 Does this add, do you think,

Speaker 3 to the economic friction that's happening right now?

Speaker 15 I think trust is

Speaker 15 a concern. And

Speaker 15 economics requires you to have trust, either trust in the information, trust in the people talking about the economics, and definitely in the policymakers.

Speaker 15 If we don't trust the data, then we can't use it.

Speaker 15 And if we don't use the data, then how's that going to impact our ability to decide in an economy and especially a capitalist economy that relies on information for us to make the best decisions for ourselves?

Speaker 3 Are you worried?

Speaker 15 I am concerned. I am concerned because

Speaker 15 I'm a big believer in the capitalism that we have and the individual's right to make the decisions that are best for them.

Speaker 15 And once you don't have data and information, your decisions are no longer probably optimal for you.

Speaker 15 So regret becomes a big part of economic decision making because we're operating under incomplete information.

Speaker 3 So put yourself back in the classroom for me.

Speaker 3 Have you started school yet?

Speaker 15 We start Monday. It's moving day today.

Speaker 3 Ah, there you go. Okay.

Speaker 3 As you stand in front of the class of 150 people or whatever it is in Econ 101,

Speaker 3 what's your elevator pitch?

Speaker 3 What's your, you know, here's why this matters to you, pitch.

Speaker 15 Yeah, you're speaking my language now.

Speaker 15 Economic literacy is something that I'm extremely passionate about.

Speaker 15 I believe every person in the world needs to know how the economy works and know how to navigate it.

Speaker 15 And for my students, what I really want them to know is if they want to improve their overall well-being, a good basic understanding of economics and the economic movements will help them navigate the complexity.

Speaker 15 So if we're focused on improving the overall well-being of our society, economic literacy is a necessity.

Speaker 3 Aaron Powell, you know, I was perusing your CV before we came in and sat down, and I note that in addition to your PhD, you've got a master's in economic theory.

Speaker 3 What does economic theory tell you about this moment, about the changes that are happening in the American workplace, because of the pandemic, about global trade, because of the president's tariffs, because of the politicization of large parts of our economic system?

Speaker 15 What I am seeing happen is we're starting to see more friction, and economists like to call it stickiness.

Speaker 15 And the more friction you have in the economy, the more stickiness, the less likely that people will be able to respond to shocks and changes in the economy.

Speaker 15 So we should probably expect more volatile business cycles in the near future because people are not utilizing information or don't have access to it. And

Speaker 15 this creates

Speaker 15 even more focus on how do we respond to shocks from a political standpoint, but from an economic standpoint as well.

Speaker 3 Abdullah Al-Barani in Northern Kentucky. Professor, thanks for your time, sir.
I do appreciate it.

Speaker 15 My pleasure, Kai. Thank you.

Speaker 3 The beauty of all the ways that we measure this economy and all the ways that we can use all that data is that they go from the very broad, that time use survey that Stacey was telling us about, to the very narrow, one single line of data that can fill in some of the unknowns about where things stand with this economy.

Speaker 3 And I'm talking literally a line.

Speaker 3 Our line at the moment is curved. It's plotted on an XY axis and it's known as the beverage curve.
It's the line you get.

Speaker 3 when you chart the relationship between job vacancies, how many open jobs there are out there, and unemployment people out looking for jobs.

Speaker 3 We should point out here that this is federal government data in actual use.

Speaker 3 BLS data makes the beverage curve possible, and the beverage curve helps the people running this economy and the people running the companies in it make decisions.

Speaker 3 To quote a blog post from the Federal Reserve Bank of St. Louis, the beverage curve, just to help you visualize here, is more or less shaped like a banana.

Speaker 3 As job vacancies go down, the unemployment rate tends to go up. Fewer vacancies mean less opportunity for people who are looking for work, makes sense, right?

Speaker 3 Except that during the pandemic, the beverage curve got a lot curvier, weirder, and harder to predict.

Speaker 3 There was a point a couple of years ago, just as the Fed was starting to raise interest rates, early 2022, when people were talking a lot about the beverage curve, saying there was room for the labor market to slow down without unemployment going up too much because the number of job vacancies was so very high.

Speaker 3 There were two job openings in this economy for every single person looking, if you remember from back then. Now, though, that ratio is just about one to one.

Speaker 3 And if we keep following that beverage curve down along that line, unemployment is probably going to go up. Something we wouldn't know without reliable government data.

Speaker 3 The thing about the data, though, is that you got to remember, people are on the flip side of it.

Speaker 16 My name's Archie. I graduated two years ago.
I live in Phoenix, Arizona, and I'm looking for work in the tech industry.

Speaker 16 It's been an interesting year because around May, I I got laid off and then about two weeks later my dad got laid off and then my mom's company also announced they were going to do layoffs and that she will most likely be getting impacted with this.

Speaker 16 My dad likes to say like being unemployed is almost busier than being employed. There's so much interview preparation you have to do, networking, and then the big thing is job applications.

Speaker 16 One company I applied to, which I thought was so funny, after I applied, they emailed saying, We have just received over 18,000 applications. And to be clear, they aren't even a big company.

Speaker 16 They're like a really, really small company. And they were like, We're just going to continuously ask for you guys to like email us every week to let us see that you're still interested.

Speaker 16 So now I'm kind of just trying to contact recruiters on LinkedIn, and that's been at least like getting me interviews.

Speaker 16 It feels very much like a lottery at this point. So I guess I have to kind of like do my time almost in a way, like putting in enough applications, getting to that 200 application mark.

Speaker 16 And then eventually at some point, something falls into place.

Speaker 3 We've shown you the data. We've talked about why it matters for understanding this economy.
We've answered a couple of questions.

Speaker 3 Now it's time for the view from the trenches, by which I mean running a business when the economic headlines are what they are. So we've called one of our regulars, Patrick Smith.

Speaker 3 He's a fourth-generation apple and hops farmer at Loftus Ranches up in Yakima, Washington, where right now, the price of doing business has some real costs. Business

Speaker 3 continues to be a bit of a challenge here. We've had a really hot and dry summer here in central Washington.

Speaker 3 The junior irrigation districts, some of them have cut water deliveries to about 40% of our full allocation. And the last couple of days here was over 100 degrees.

Speaker 3 And we've got harvest starting for apples here at the end of the week. And hops

Speaker 3 will start in about two weeks. And so it's a pretty critical time and the execution risk right now is quite high.
Execution risk. Are you worried? Yeah, a little bit.

Speaker 3 You know, for us specifically, most of our apples are on a junior irrigation district.

Speaker 3 And right now, that irrigation district, the Rosa, is signaling that water deliveries will end in kind of mid-September, September 18th.

Speaker 3 And we plan to harvest apples into the 1st of November for some of the later varieties. So

Speaker 3 that does have us worried a little bit. Yeah.
And there's a record apple crop on the way. So yeah, stakes are high.
Yeah. You know, it's interesting.

Speaker 3 You and I have been talking for a good many years now, and I don't recall you ever having this edge in your voice.

Speaker 3 Yeah,

Speaker 3 it's been a challenging season. I think there's just a lot of uncertainty right now.

Speaker 3 You know, with labor, for example, we're seeing increasing numbers of like mid-season rule changes on the H-2A program.

Speaker 3 And, you know, when we don't know what the rules of the game are, it makes it really hard for us to plan when at any time we could face rule changes that either increase cost or, I mean, certainly increase the complexity of doing what we do.

Speaker 3 Trevor Burrus, Jr.: Let me ask you the flip side of that question. There's the immigration part, but there's also the general trade policy part.
How much is that affecting you?

Speaker 3 The uncertainty, again, you know, kind of a theme here.

Speaker 3 Our export buyers want to know what the price and availability is going to be for what they're buying from us. And when it feels like the price could change by 20%, 50%, 100%

Speaker 3 overnight or by next week, what we're seeing is buyers. delaying orders, placing smaller orders, things like that to mitigate their risk, right?

Speaker 3 And so Mexico and Canada are the two top export markets for Washington apples. And our exports season to date to those two markets are down 12% from where they were a year prior.

Speaker 3 And those are real numbers. Yeah, yeah, no, they're very real.

Speaker 3 We did a story the other day, actually, about how this 90-day pause that the president has put on the China tariffs is basically the blink of an eye for people who deal with manufactured goods and all that.

Speaker 3 90 days for if you're growing and you're trying to harvest and all that, that is, I mean,

Speaker 3 you can't get it done in 90 days. There's no quick pivot.
No, no, no quick pivot at all. I mean, our investment and operating cycles are measured in years, not days.

Speaker 3 And four years is a lot of 90-day tariff pauses and back and forth and makes it quite difficult to build an economic model around whether or not that orchard's going to pay for itself.

Speaker 3 So amid all of this,

Speaker 3 you're beating back the wolf closest to the sled, right? You're trying to get your crops out of the ground, you know, hops off the, what are they, vines, hop vines? What are they? Trees? Bushes?

Speaker 3 Vines. All right.
Yeah. Vines? All right.
And the apples off the trees. How much time are you able to devote to planning amid all this uncertainty?

Speaker 3 In season like this, we're really focused on what's in front of us right now. Now, our planning season really starts when harvest ends.
You know, so

Speaker 3 once we get back from the Thanksgiving weekend, we kind of sit down and start doing our budgeting for the next year, the biggest piece of which is

Speaker 3 around labor. During that same amount of time, we are praying for good snows in the Cascade Mountains to help mitigate the three-year-long drought that we're in the middle of.

Speaker 3 Patrick Smith at Loftus Ranches

Speaker 3 up in central Washington.

Speaker 3 Patrick, thanks for your time. It's always good to speak with you and catch up.
Yeah, of course. Thank you, Kay.

Speaker 2 Appreciate it.

Speaker 3 For people who really like economic data, that'd be us, and there's a good chance you. The BLS has all kinds of ways to break down and graph what it does.

Speaker 3 So, picking one, somewhat at random, on the chart labeled Employment Change by Industry for July 2025, seasonally adjusted, we can see that transportation and warehousing increased by just 3,600 jobs month over month.

Speaker 3 The BLS would categorize that as little changed, but Weston Labar, he's the chief strategy officer at Waterfront Logistics, will tell you that little change doesn't mean no change.

Speaker 8 It's been a pretty topsy-turvy year. In some weeks, we have so much work that we, I hate to say don't know what to do with it because we do know what to do with it, but it's just really busy.

Speaker 8 We have all of our trucks in rotation. We have to pay overtime.
We hire additional labor just to help get through the projects. And then other weeks, it's a little bit like a ghost town.

Speaker 8 You know, half the trucks may be parked. We might not need as many workers in the warehouse, in the yard, obviously truck drivers.
And so unstable is what I would call this year.

Speaker 8 One of the uncertainties going into periods when you have a lot of additional work, you need to hire new people is that when you don't keep people busy, you run into the risk of them finding something else to do.

Speaker 8 Whenever we've seen this before, we see workers move to other states where maybe there might be a burgeoning manufacturing industry or a plant opening up something else.

Speaker 8 Or we've even seen truck drivers just leave the industry altogether and focus on things like Uber. So we had to this year again look at wage increases.
Minimum wage went up for fast food workers.

Speaker 8 So you wouldn't think, hey, what's the correlation between fast food workers making more money and people in supply chain?

Speaker 8 But if you've got skilled workers and they find that they could get more steady hours and steady pay making $20 or $25 an hour in fast food, maybe again, they shift and go to a different industry altogether.

Speaker 3 Weston Labar at Waterfront Logistics here at the ports of Los Angeles and Long Beach. A good chunk of the questions we got from y'all were about, sadly, tariffs.
I know, shocking.

Speaker 3 A lot of you wanted to know what happens to all the money headed toward $30 billion a month that U.S. importers and thus, in turn, U.S.
consumers are paying in President Trump's import taxes.

Speaker 3 It just goes into the general fund at the Treasury and can be used for anything. Congress gets to decide, power of the purse, and all that.

Speaker 3 But, and here's the butt.

Speaker 3 The Committee for a Responsible Federal Budget says the total expected proceeds from the tariffs, estimated to be as much as $1.2 trillion by the end of the Trump presidency, exclude macroeconomic effects.

Speaker 3 Meaning, if the economy slows down and consumers buy less, that revenue, which just so we are all completely clear, are taxes paid by American consumers and businesses, that revenue is going to go down as well.

Speaker 3 Coming up, some of the possible substitutes for government data, private industry. We're looking at you.
That's next on the real costs. It's a marketplace special.

Speaker 3 This is a marketplace special, The Real Costs. I'm Kai Rizdahl.
I'm going to say something here that's just a fact.

Speaker 3 No matter what you hear from, well, anybody, the United States produces the best economic data in the world full stop because we have decided that measuring this economy is a national priority.

Speaker 3 We've created whole government agencies, the Bureau of Labor Statistics, which you've heard about a couple of times just in this show, and the Bureau of Economic Analysis, which tracks growth and how much consumers are spending and more.

Speaker 3 But we didn't get here by chance.

Speaker 3 And since it is the policy of this program, not just to tell you the facts, but also to provide context, we made some calls to explain how our data became the best in the world.

Speaker 19 My name is Eric Hilt.

Speaker 17 I'm Tom Stapleford.

Speaker 6 My name is Carola Friedman.

Speaker 3 Eric Hilt is at Wellesley. Tom Stapleford is at Notre Dame.
Carola Friedman is at Northwestern. And we are going to start with them at the beginning.

Speaker 19 You can make the case that it actually goes all the way back to the founding era.

Speaker 6 The U.S. Constitution actually enshrines the census of population.

Speaker 3 The census happens once every 10 years. It's right in the Constitution.
It is important for sure, but it doesn't really tell you much about what's happening in the economy in real time.

Speaker 19 The Great Depression represented this traumatic shock.

Speaker 3 Now the 30s have begun, and there is a new word, depression.

Speaker 3 and it led to this realization that the data we had access to was just not sufficiently detailed enough to even understand what was happening in the economy and how severe the crisis was and it was that crisis that made the government realize it needed more and better information here's tom stapleford at notre dam data series that are coming out on a regular basis over a sustained period of time that really gets going in between the first and second world wars we started having having employment statistics at a monthly level.

Speaker 21 The purpose of questions 21 to 25 on the schedule is to determine just what is the employment status.

Speaker 17 That's when all of our major economic data series, like employment statistics, unemployment statistics, the consumer price index, what is initially GNP, later becomes GDP, all of those start in that timeframe.

Speaker 3 Also?

Speaker 17 I say the big milestone is the 1946 Employment Act.

Speaker 3 It said the federal government would be responsible to promote maximum employment, production, and purchasing power.

Speaker 17 So all three of those things are specified in the Employment Act of 1946. This is actually a strategic goal for the government to manage those key variables.

Speaker 3 And we use those key variables to this day to frame decisions that the whole economy needs, where interest rates should be, when to hire or build a new factory.

Speaker 3 And thousands of government economists have been working ever since to make the data better.

Speaker 19 In a sense, the data that we have today is the culmination of efforts that have been undertaken over as much as 100 years.

Speaker 6 As an economic historian, I can take a long run view of what has happened with the American economy, feeling knowing that I'm comparing apples to apples.

Speaker 3 I know we are in a very what's happening right in front of us kind of economy now, but the economy changes over time, sometimes a long time, and better data about what's happening helps make better estimates of what the future is going to be.

Speaker 17 Any of the major agencies that calculate economic data in the U.S. are doing research on it all the time.
They're studying: what if we change this?

Speaker 17 Could we get better, more accurate results?

Speaker 17 Let's go back and look at our data, see are there particular problems that we could take care of if we change in one way or another.

Speaker 6 So, being able to be critical about the methodology, understand it,

Speaker 6 and try to improve it is really key.

Speaker 3 With, and this is really really important, professional expertise.

Speaker 19 It's not

Speaker 19 partisan. It's not political.
It's professional. It's produced by civil servants who have devoted their careers in many cases to producing the most reliable information that we can have.

Speaker 3 It's not just the Fed or Congress and the rest of the government that loses out if economic data deteriorates. It's big companies and small businesses, and it's you and me.

Speaker 3 As we've been saying just now and also pretty much this whole hour, U.S. government economic data is and has been for a very long time the gold standard.

Speaker 3 But given everything going on with the BLS right now, Jay Lysias from northwestern Wisconsin wanted to know if there are other specifically non-governmental indicators that we might watch instead.

Speaker 3 Well, Jay, private companies, as we very much hope you're aware, collect data all the time. time.

Speaker 3 Data from and about us, from the swipes on our credit cards to the location of our smartphones, to online restaurant reservations and the honestly countless other ways that we all interact with this economy.

Speaker 3 So So if we had to, could we use that data to substitute for the survey data from the Bureau of Labor Statistics? Here's Marketplace's Maria Hollenhorst.

Speaker 7 Ray Sanza knows if you are taking a lunch break right now. Seriously.

Speaker 22 All of our data is anonymized.

Speaker 18 We would never share the details about PIPA, but yes.

Speaker 7 He's the chief strategy officer of a company called Homebase, which makes employee scheduling and time tracking software mostly for small businesses like restaurants and coffee shops.

Speaker 7 So any employee that's working for a company that uses home-based software.

Speaker 22 We will then know that she is working as she takes breaks, whether paid or unpaid, she will pluck in and out.

Speaker 18 Now you start to aggregate that across 150,000 businesses.

Speaker 22 You get a very accurate view down to literally the minute of the level of economic activity on Main Street.

Speaker 7 Now, why is that useful?

Speaker 18 Let's take a look at Lollapalooza.

Speaker 7 Lollapalooza, for those who don't know, is a music festival. It happened the first weekend in August and drew Sabrina Carpenter, Tyler the Creator, and about 115,000 attendees to Chicago.

Speaker 22 I want to just jump in here and show you just at the level of Chicago.

Speaker 7 Sansa can peer into the database of employee time cards for Chicago small businesses and see how much people were working during Lollapalooza week compared to the week before.

Speaker 22 You can see that there was a marked increase in activity.

Speaker 7 That type of up-to-the-minute high-frequency economic data was especially useful at the beginning of the pandemic, when monthly reports from the Bureau of Labor Statistics just weren't timely enough to capture how fast the ways that people worked, shopped, and ate were changing during COVID.

Speaker 22 Our CEO, he's from Seattle. He took a look at his hometown and he said, holy shit, like we need to tell people about this because they don't know what's coming.

Speaker 13 Actually, that was a subscription that one of the centers in the Booth School of Business added during the pandemic.

Speaker 7 Greg Fleming is a business and economics librarian at the University of Chicago, which is one of the users of Home Basis data.

Speaker 7 He's sort of like a procurement officer for all the professors, staff, and students looking for data to do their research.

Speaker 13 That's a good way to put it. And then people doing research find somebody's collected this data and they're selling it.
Can't the library buy it for them?

Speaker 13 And in most cases, we can't because it's incredibly expensive.

Speaker 7 Like six figures expensive for some databases, which in a university with thousands of data-hungry researchers adds up. So accessibility is one reason why.

Speaker 23 The BLS is the main game in town.

Speaker 7 Zane Mochiber is the director of data management and analysis at the Economic Policy Institute. And he says government data is not only free, it's also unique.

Speaker 23 Anything coming out of the private sector, it's unlikely to have the transparency that BLS and census surveys have in terms of methodologies documented and made publicly available.

Speaker 23 There really isn't a measure or a group of measures that I know about that can replicate the information that we get from the BLS.

Speaker 7 That's what Kai and Nicole Servey at Wells Fargo were just talking about. A lot of private companies that publish data, like Homebase, only have insight into the businesses that use their software.

Speaker 7 Data is just kind of a byproduct of their main business. Whereas federal statistical agencies, like the BLS, are in the business of data.
It's what they do.

Speaker 23 The private sector just wouldn't jump to fill in the void void if government data collection was stopped or potentially corrupted by political interference because there's just not a clear profit motive there.

Speaker 7 Think about surveys on rural populations or native communities, detailed breakdowns of workers by age, race, and sex.

Speaker 23 Some of these government surveys, which are critical, would simply not be done if the government didn't do them.

Speaker 7 There are areas where private companies can add to or fill gaps in data that the federal government doesn't provide.

Speaker 7 For example, Homebase has clients and therefore worker databases in three cities that the BLS pulled out of this year. That's Lincoln, Nebraska, Provo, Utah, and Buffalo, New York.

Speaker 7 But as useful as that information may be, it will not replace the information that we taxpayers have always relied on the federal government to provide. I'm Maria Hollenhorst for Marketplace.

Speaker 3 If you take anything from this special, it's that accurately and objectively measuring this economy really matters.

Speaker 3 It matters to the people who use those measurements to tell us what's going on and where we might be going. And it matters to the people working in and running businesses out there.

Speaker 3 Catherine Rampel is one of our Friday regulars. She's also an anchor at MSNBC.

Speaker 3 And we've gotten her on the phone for the same reason we get her on the phone on Fridays to help us take stock of what is happening. Hi, Catherine.

Speaker 12 Hey, Kai. Thanks for having me.

Speaker 3 Always glad to. And thank you for answering the call when we called.

Speaker 3 So look, what do you, just to sort of frame this, what do you make of this notion that's been throughout this special of

Speaker 3 the friction is piling up, the stickiness is piling up, and that's affecting the macroeconomy.

Speaker 12 I think the way to think about this is that this is not just a near-term concern.

Speaker 12 It's not just about the uncertainty that businesses are experiencing right now in terms of whether to hire, whether to invest, how much to invest, how much inventory they should be accumulating, and all of that.

Speaker 12 This is also a much longer-term challenge for the economy.

Speaker 12 If we are, in fact, degrading the quality of the data that companies need, for example, to make those kinds of decisions, if we are tarnishing the business environment here by

Speaker 12 degradation of rule of law and greater concern about property rights and a predictable regulatory environment, things like that. All of those things add up.

Speaker 12 And so many of the concerns that I have about the U.S. economy are not about the next one or two months, although I am concerned about what happens in the next one or two months.

Speaker 12 It's the more invisible trends that may take a few years to show up.

Speaker 12 If they show up at all in our official data, they will certainly be felt.

Speaker 3 The official data and what shows up there is question number three, I think, that I'm going to get to. But I do want to talk about

Speaker 3 the next couple of months and the next year, and I want to frame it this way.

Speaker 3 pace of change now. We are six months-ish into the Trump administration.

Speaker 3 He has turned this economy on its head and undone 80 years of what we have done in global trade. And that is outstripping companies' ability to keep up.

Speaker 3 See also Patrick Smith, our Apple farmer, who's like, we can't just quick pivot, and businesses now are left going, how do we do this?

Speaker 12 Yes, it is a real challenge, as you have documented in many of your own interviews, because companies don't know what the regulatory environment looks like.

Speaker 12 That's true whether we're talking about tariffs, which is obviously something that everybody's thinking about, or the tariffs going to be 20% or 100%

Speaker 12 or somewhere in between.

Speaker 12 That introduces a lot of uncertainty, but there are a lot of uncertainties about the labor force, right?

Speaker 12 If we are deporting large portions of our labor force, people who are both undocumented and people who have been documented, whose documents have been stripped away, dedocumented, if you will, that introduces greater uncertainty for companies.

Speaker 12 If companies don't have a great sense of

Speaker 12 you know, the other kinds of regulatory changes, there are a bunch of regulations that are being rolled back, but then there are other ones that are being implemented.

Speaker 12 There are, you know, the administration has threatened punitive measures on some companies that the president does not particularly like or thinks have wronged him somehow. All of that,

Speaker 12 again,

Speaker 12 contributes to companies' inability to make decisions. And the more time that they're spending thinking about

Speaker 12 gaming out, you know, what the regulatory environment is going to look like, what tariffs are going to look like, et cetera, cetera.

Speaker 12 The less time they're spending just optimizing their operations and doing, you know, creating the best products that they can to gain more customers.

Speaker 3 Quickly, Ish here, we got about a minute. I do want to point out that the challenges with BLS and data collection in this government, as I've said before on this program and elsewhere

Speaker 3 on Monday through Friday on this show, are longstanding, right? Survey response rates, declining resources to do the surveys.

Speaker 3 President Trump, though, has this unique ability to take an actual weakness and turn it to his political advantage. And that does seem to be what's happening here with the BLS.
You've got 45 seconds.

Speaker 12 Absolutely. Yes.
Response rates for BLS surveys, among other major surveys, by the way, have been declining. That is contributing to greater uncertainty or noise in the data.

Speaker 12 But the way to address that would not be effectively pushing out 20% of the agency staff, which is what Friends of BLS says they have lost, 20% of their staff.

Speaker 12 They've lost about a third, or at least a third of their leadership positions are vacant.

Speaker 12 The administration has also disbanded the advisory committee that was tasked specifically with improving response rates.

Speaker 12 There are a lot of things that could be done to make these data stronger, including, as you've discussed, incorporating some greater

Speaker 12 private sector data measures or integrating administrative records as well. That's not what they're doing.

Speaker 12 The kinds of things that one would be doing if they were actually trying to improve these numbers are nowhere

Speaker 12 on the table. And instead, you know, it's openly politicizing what has been for a very long time a credible and very valuable source of information for businesses, consumers,

Speaker 12 and investors.

Speaker 3 Catherine M. Pell at MSNBC.
Thank you so much, Catherine. I really appreciate it.

Speaker 4 Thanks, guys. Talk to you soon.

Speaker 3 I said up at the top of the hour that these are interesting times in this economy. And they are.
More to the point, though, they are uncertain times.

Speaker 3 Not in the what's the president going to do with tariffs, businesses hate uncertainty, that kind of thing, since, but in the,

Speaker 3 we're in uncharted territory here, since we kind of don't know what we don't know about what's going to happen. We haven't had import taxes this high in 90 years.

Speaker 3 Politics is seeping into parts of the economy where it has never or maybe really rarely ever been. And where the United States stands in the global economy, that ain't what it used to be.

Speaker 3 Don't get me wrong, this is still the biggest and most important economy in the world. But change

Speaker 3 happens really fast.

Speaker 3 Our special today was produced by Andy Corbin, Nicholas Guillong, Maria Hollenhorst, Sarah Leeson, Sean McHenry, and Sophia Terenzio. Charlton Thorpe did all the engineering.

Speaker 3 Nancy Fargalli is the executive producer of Marketplace. Joanne Griffith is the chief content officer.
Neil Scarborough is the vice president and general manager. And I'm Kai Rizda.

Speaker 3 This is APM.

Speaker 20 Sometimes kids ask questions that reveal just how much adults still need to learn, like, can you explain what causes an economic bubble? And why are things so expensive at the airport?

Speaker 20 Or how much national debt might be too much.

Speaker 20 Fear not, Million Bazillion is back with a new season to help you and your kids become pros at understanding how money shapes the answers to all those questions and more.

Speaker 20 Listen to the latest season of Million Bazillion on your favorite podcast app.