The relationship between consumer mood and spending? It's complicated

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On the show today, we'll catch up on some of the news you might have missed, and we'll play with some Lego from American Public Media.

This is Marketplace.

In Denver, I'm Amy Scott in for Chai Rizdahl.

It's Wednesday, August 27th.

Good to have you with us.

You can forgive us for leaving this one out yesterday amid the whole president attempting to fire a Fed governor situation, but there was some news about the biggest engine of the U.S.

economy, yes, the consumer, and how folks are feeling these days.

And it's not great, according to the conference board's latest consumer confidence index.

A small decline in August reflects people's worries about their jobs and future income.

A separate survey from the University of Michigan also showed a decline in sentiment this month.

But as we know, that doesn't always show up in less spending.

Those numbers come out on Friday.

And as Marketplace's Mitchell Hartman reports, the relationship between mood and spending is complicated.

For a while now, Americans have been getting more worried about their ability to keep a job and earn a paycheck.

Stephanie Guichar at the conference board says every month since the beginning of the year, We see a decline in the share saying that jobs are plentiful, an increase in the shares saying that jobs are hard to get.

Consumers are also worried that tariffs will drive up prices and squeeze household finances.

They say they plan to spend less going forward.

Including for big ticket items, but also for services like going on vacation, going to restaurants.

Except these plans to be more frugal, Guichar says we've heard them before.

I mean, like a year ago, they were telling us they were going to be cautious, and at the end of the day, they were not.

Instead, consumers kept spending it up.

And the main reason is as long as U.S.

consumers have a job and have income, they tend to spend it.

But here's the thing.

It really matters which consumers we're talking about, says John Lear at polling firm Morning Consult.

Consumer sentiment across the income groups is as wide as it has ever been.

High-income folks have roughly returned back to where they were prior to the start of the pandemic, which is really remarkable.

Low-income folks, on the other hand, are basically back to where they were at the deaths following the initial onset of the pandemic.

Partly, it comes back to those increasing worries about the labor market.

They're concentrated among lower and middle-income consumers whose jobs are most vulnerable to a downturn.

These consumers are pretty much treading water, spending most everything they earn every month on what they need.

But they are not the ones who keep pushing consumer spending higher.

We know that spending growth is almost entirely being driven by high-income folks who have ever more spending power from rising incomes and rising wealth from stock and home ownership.

I'm Mitchell Hartman for Marketplace.

On Wall Street today, traders, we're in a fine mood.

We'll have the details when we do the numbers.

As Mitchell said, one thing bumming people out is the cooling job market.

And recent data suggests that the market has been especially tough on working mothers.

In the first half of this year, the share of women with young children in the workforce has fallen by nearly three percentage points, erasing some of the gains made after the pandemic.

Abba Badurai spoke to some of those mothers for a piece in the Washington Post.

Abba, welcome to the program.

Hi there.

This is a pretty significant decline just in the first half of this year.

Where have all the working moms gone?

Well, you know, it's a combination of many factors.

And in many ways, it's a reversal of what we saw starting in 2020 when the pandemic sort of kicked off this era of heightened flexibility.

You know, people could work from home more, they could have more flexible arrangements, you know, kind of work around daycare drop-off or doctor's appointments or whatever the needs may be.

And that really lured a lot of women back into the workforce.

But now, starting in January, we've started to see that reverse in a very big way.

A lot of it is related to return to office policies.

There's been a big push by private companies as well as the federal government to get people back in the office from nine to five, five days a week.

And for many working parents, that's become a lot harder to manage.

And this is especially true of mothers of young children,

kids five and under.

What do we know about why these women are leaving?

Yeah, these women in particular often need the most flexibility.

And at the same time, we've seen sweeping federal government layoffs here in Washington.

And those those have disproportionately affected black women in particular and mothers who have long sort of looked to federal government work as a stable and flexible arrangement and so all of these things are making it much harder for parents of young children.

Now, of course, some women are leaving the workforce by choice and there's this popular notion that more women are embracing traditional gender roles.

You see that whole trad wife thing on social media.

Is there any data that backs that up?

You know, there isn't data.

And I talked to more than a dozen women around the country.

Nobody sort of said right off the bat, you know, I've been hearing from the Trump administration that they want women to have more babies and to stay home with their children.

That's more of a cultural through line that's maybe simmering in the background.

But it is noteworthy that this is happening at a time when we are hearing more factions, more people within the government vocally say more parents should be staying at home to take care of their children.

So as you said, you talked to a lot of women who have left the workforce recently.

What other themes did you hear?

You know, a a lot of the women I spoke to, almost all of them, in fact, said that they were really surprised by their decision to stop working.

Many of them had worked their entire lives.

They said a year or two ago they would have never dreamt that they would be leaving the workforce.

But it's just been this slow buildup of all of these different things that are happening.

The scrapping of a lot of diversity policies and other things like that that they said made them feel less valuable at work.

And so, you know, this culmination of less flexibility, sort of feeling less valuable, having trouble finding childcare, all kind of led them to the same conclusion, which was to maybe step out for a little while.

As you write, these are really individual personal decisions.

A lot of factors go into, but there is kind of a macro effect on the economy of losing women in the workforce.

What do you think that will look like?

Women and working mothers in particular have been a huge part of the job market's growth in the last five years.

And having them starting to drop out in large numbers is concerning, not just for the economy, but also for those women.

If they do want to return to the workforce, they're often looking at lower pay, sort of fewer opportunities to advance.

Just they're coming back to positions that are maybe not as prestigious as the ones that they left.

And so these are long-term effects that could ripple out for these women and for the economy.

And yet there were some positive stories too.

For some, it really is a privilege to be able to stay home with their kids, especially while they're young.

Talk about some of those experiences.

Yeah, I talked to a couple of mothers who said that this wasn't sort of what they'd envisioned for themselves.

It took them a while.

Actually, I talked to one who had hired a career coach to help her leave the workforce, to help her get a routine in place and just kind of make that transition because she knew it was going to be really tough.

But she says that she's much happier now because she sees her children a lot more, just has the balance that she hasn't, she was never able to have in her corporate job.

Abba Baderai wrote about women leaving the workforce for the Washington Post.

Thanks so much.

Thank you.

And it's a day that ends in Y, so of course there's some trade news.

This week, low-value packages from around the world are losing their tariff-free status.

The de minimis exemption applied to imports valued under $800.

But the Trump administration suspended it on goods originating in China back in May, and it's ending the exemption for the rest of the world on Friday.

Marketplace's Savannah Peters has more on what that means for overseas retailers and for online shoppers.

The government started giving importers a break on low-value shipments back in the 1930s, mostly to keep things efficient.

The de minimis rules were set up to avoid wasting a lot of time to process payments for the import duties.

Payments that were considered negligible at the time, according to Christopher Tang, a supply chain expert at UCLA.

But then things have changed.

E-commerce has sent the number of de minimis shipments skyrocketing to over 90% of cargo entering the U.S.

in 2024, which was worth more than $64 billion, according to U.S.

customs.

Li Chen, a professor at Cornell, says the federal government is closing what's become a loophole for e-commerce retailers like Xi'an and Temu.

But the devil's in the details.

And the details are confusing, according to overseas retailers and international carriers, who say the new rules aren't clear and they didn't get enough time to adjust.

It's extremely chaotic right now, says Aaron Rubin with the logistics company Ship Hero.

There's a lot of unexpected bills, a lot of delays, a lot of confusion, a lot of mistakes.

Some international carriers are suspending U.S.

shipments altogether until it's clear how the new system works.

Rubin says this comes ahead of the busiest time of year for global shipping, the holiday shopping season.

It's

a, I want to say a disaster.

But for some online shoppers, including Regina Krause, it does feel like a disaster.

Krauss buys all her skincare products from Japan and South Korea.

She tried to get an order of sunscreen and moisturizer in ahead of the De Minimus change, but got a notification this week that her shipment was canceled.

So it was one thing where it was like, oh, you're going to have a tax on it, right?

And now it's just you straight up can't get it.

Kraus will ask her relatives in Japan to bring some of her favorite products next time they visit the U.S.

Until then, she might have to go without.

I'm Savannah Peters for Marketplace.

Lego had its best first half ever, the company announced today.

The privately held Danish toy makers said revenue was up 12% to nearly $5.5 billion.

It's opened dozens of new stores and issued hundreds of new Lego sets, including a popular botanical collection.

Honestly, the bonsai's are pretty cool.

Marketplace's Sabri Benacheur has more on what the 93-year-old brickmaker's enduring success is built out of.

There are Lego succulents.

There are Lord of the Rings Legos.

There are Legos that allow you to pixelate a portrait with Legos.

I have probably

around

100 to 150 sets.

Christian Montiel is a 34-year-old Lego fan from Miami, Florida.

Over the last 10 years, he's invested a lot of time.

His prized Lego Star Wars Star Destroyer took weeks to build, and money, too.

Probably conservatively, I've spent probably between $5,000 to $10,000.

Montiel is what the toy industry calls a kidult, basically grown-ups who still have a spark of childlike joy left in them, but with the spending power of an adult.

If you walk into a Lego store right now, you'll be greeted by quite a large wall of products and sets aimed at adults.

Jay Ong runs Jay's Brick Blog based out of Melbourne, Australia.

You know, with 18 plus H ratings, you know, very sleek, black, minimalist box design that clearly kind of scream, this is not a toy, this is a sophisticated play kit for adults.

According to Circana, toys for older teens and adults make up more than 28% of total toy sales worldwide.

Sales to adults grew 5.5% between 2022 and 2024.

Add to that, Lego's relentless partnerships with other brands.

Like the Harry Potter sets or the Star Wars sets.

Carla Johnson is an innovation consultant with Rethink Labs.

There are Pirates of the Caribbean Legos.

There are Wednesday Adams Legos.

There are Wicked Legos.

Each one taps into a new, existing, and passionate fan base.

But more fundamentally, Johnson says Lego has benefited from a company culture of innovation.

They've launched robotics kits.

They have launched a magazine, not just for kids as their customers, but also for adults.

They've released Hollywood blockbuster movies.

These aren't typical experiments that most companies are willing to take.

Among Lego's next big moves, Pokemon Legos.

In New York, I'm Sabri Benishore, the Marketplace.

Coming up.

I'm feeling good about my finances.

Okay, maybe good is a little extreme.

Checking in on a recent college graduate.

But first, let's do the numbers.

The Dow Jones Industrial Average rose 147 points, 3 tenths percent, to finish at 45,565.

The NASDAQ added 45 points, 2 tenths percent, to close at 21,590.

And the SP 500 found 15 points, a quarter percent, to end at 6,481.

Well, that redesigned logo for Cracker Barrel Old Country Store that's drawn so much ire on social media, including from the President of the United States, it's history.

The restaurant chain has restored its former logo and found 8%.

Wall Street spent the day on tenter hooks waiting for results after the closing bell from AI chipmaking behemoth NVIDIA.

Shares dimmed a tenth of a percent, and then after the close the company reported record sales.

Bonds rose, the yield on the tenure T-Note fell to 4.23%.

You're listening to Marketplace.

This podcast is supported by Odo.

Some say Odo business management software is like fertilizer for businesses because the simple, efficient software promotes growth.

Others say Odoo is like a magic beanstalk because it scales with you and is magically affordable.

And some describe Odo's programs for manufacturing, accounting, and more as building blocks for creating a custom software suite.

So, Odo is fertilizer, magic beanstock building blocks for business.

Odoo, exactly what businesses need.

Sign up at odoo.com.

That's odoo.com.

Did you know Tide has been upgraded to provide an even better, clean, and cold water?

Tide is specifically designed to fight any stain you throw at it, even in cold.

Butter?

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You don't need to use warm water.

Additionally, Tide Pods let you confidently fight tough stains with new Cold Zyme technology.

Just remember, if it's got to be clean, it's got to be Tide.

This is Marketplace.

I'm Amy Scott.

We had a story yesterday about a shift underway in the housing market.

With more homes for sale sitting on the market longer, prices have been growing more slowly or even falling, depending on the region.

And there are some big regional differences.

From time to time, we check in with Letitia Grant for the view from Houston, Texas.

She's executive managing broker with TAS Realty Group.

Letitia, good to have you back on.

I'm excited to be here.

Thank you so much for the invite.

How is business in Houston?

It is picking up.

If I had to give it a word, I would definitely say that the buyers are becoming a little more confident.

Hmm.

How so?

Well, I think that they have kind of realized that interest rates are what they are.

And if they're waiting on the interest rates to drop, then the sales price is going to increase.

And I believe that they're kind of understanding that now.

We just got the latest case shiller numbers for June showing that home prices nationally have continued to rise, but more slowly.

But in parts of the country, including Texas, prices have actually been falling.

Are you seeing that in Houston?

Absolutely, we are.

We're seeing that with new construction.

We're seeing that with pre-existing.

Absolutely we're seeing that.

Yeah.

And there's just a lot more supply, right?

There was sort of a building boom in parts of the south and now that inventory is just giving buyers more options.

Absolutely.

Now for the sellers, some of them, depending on the price point, they are definitely suffering.

And I would say that $350,000 to $450,000 price point, the inventory is just kind of hanging on the market a lot longer.

But yes, there's been a lot more inventory on the market than traditional.

Now, you said buyers have a lot more confidence.

Would you call it a buyer's market?

You know, I'm not calling it a buyer's market just yet.

I can see it heading that way.

Because, you know, when I think about a buyer's market, I think about 2008, where you're just kind of like, okay, I'm going to give them what I want them to have.

That's not quite there yet.

There's still some friendly competition.

And so in some cases, we are getting, you know, maybe a second offer and some of our buyers aren't, you know, obtaining the property.

So I wouldn't necessarily call it a buyer's market yet.

Potentially we may get there.

And, you know, who knows?

The way real estate is set up, we may never get back there.

Who knows?

That's right.

But it's not like the days when there were, you know, 15 offers and people were waiving inspections and giving all kinds of concessions to get the deal done.

Not at all.

Yeah.

Well, I'm curious.

I mean, the Fed has signaled that it may cut interest rates next month.

Of course, that doesn't always translate immediately to lower mortgage rates, but how big a difference could that make for some of the buyers who've been on the sidelines if rates start to come down?

So the majority of my buyer market is in the affordable spectrum.

So lowering an interest rate that even equates equates to, in some cases, $35

would make a tremendous difference.

I mean, we have one right now that we're working with, and her debt-to-income ratio was affected by a total of $66.

So if we can get interest rates just low enough to compensate that $66,

then that would make a tremendous difference for her.

Well, I know spring and summer are really busy time typically in the housing market.

Do things slow slow down for you this time of year?

No, it has not.

Of course, again, I will say this, my market is a little different because the majority of my transactions are in the affordable spectrum.

This is the time where we got a release for a new program.

It's the Harvey 2.0 program where buyers could receive up to $125,000 in down payment assistance

from Hurricane Harvey.

Yeah,

that's kind of the sad part that it's, we're still using funds from Harvey, but yes, absolutely.

So that also benefits our sellers as well.

Hmm.

Well, I guess you don't get a vacation.

No.

Hopefully you do.

I just have to force the vacation.

You know, when everyone is enjoying Christmas and the holidays with their families, that's when I take my time.

All right.

Letitia Grant is at TAS Realty Group in Houston.

Always good to talk to you.

Thanks so much.

Thank you, Amy.

It was a pleasure.

We talked earlier about women in the labor force.

Another group getting squeezed is recent college graduates.

In a blog post this week, the St.

Louis Fed said unemployment for recent grads in their mid-20s is up 1.34% this year on average compared to 2019, possibly due to disruptions from AI.

We've been talking to one young graduate, Zoe Bennett, since she finished up at the University of Alabama in 2023 and took a job in Rome, Georgia as an engineer at a paper company.

Here's her latest update.

I am still at the same job two years later, and it feels good.

I think I've gained so much confidence.

I'm feeling good about my finances.

Okay, maybe good is a little extreme.

I don't know,

I would say I feel good.

I think I'm pretty financially responsible in that I don't really spend that much money.

I feel like I still live my life more or less like how I did in college.

But then sometimes I remember, oh, I, you know, I do have money now.

I talk to my parents and they're always like, hey, Zoe, have you created a high-yield savings account yet?

And I feel kind of, you know, silly to be in a position where I am fortunate to have this job

where I don't have that many expenses and I should maybe be taking more advantage of things I could be doing, but you know.

I'm not that worried about entering the labor market, probably just because it feels so abstract.

I feel like pretty secure,

but I have heard pretty much entirely negative things from my friends who are trying to get jobs.

I've heard a lot of my friends will

try so many different routes trying to take classes or make themselves more qualified, and it seems daunting.

Being two years out of college is hard.

There are just always questions of

is this right for me?

You know, am I setting myself up?

What are

the paths not taken?

Like deep down, I know I'm in the right spot for me right now.

And yet those nagging questions linger.

I'm trying to be more intentional, you know, creating this life that I'm happy with.

I

still work a lot, but now that I've kind of demonstrated my technical competencies, I feel so free to be myself.

Yes, I have to wear, you know, steel-toed boots and a high-vis vest, but you know, my high-vis has a little pink in it.

You know, I have a lava lamp in my office.

I don't feel like I'm like in severance where I like walk in the door and I am just like in this world where I'm looking at environmental regulations all day.

No, I can still maintain myself and it can become a more fluid balance, which is still a balance.

Zoe Bennett keeping up the work-life balance in Rome, Georgia.

This final note on the way out today.

With the summer tourism season wrapping up, The Economist reports that fewer people travel to the United States from abroad this year.

Foreign arrivals at U.S.

airports are down 3.8% compared to 2024.

That's 1.3 million fewer people.

And the decline was steepest between May and July, with arrivals down 5.5%.

The biggest drop was from Canada.

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

Jeff Peters is the manager of media production.

I'm Amy Scott.

We hope to see you back here tomorrow.

This is APN.

The Trump administration is making deep cuts to education research.

The cancellation notices started coming.

When the contract is cut, the study just dies.

It's all happening just as schools are trying to make use of research to improve reading instruction.

There would not have been a science of reading without the federal funding.

It wouldn't have happened.

I'm Emily Hanford on our new episode of Soul to Story: What the Trump Cuts Mean for the Science of Reading.

Go to your podcast app and follow Soul to Story.