Slo-mo jobs growth

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Just so you know, it's going to be a pretty data-heavy program today.

Sorry.

From American Public Media, this is Marketplace.

In Los Angeles, I'm Kai Risdoff.

3 September today, Wednesday.

Good as always to have you along, everybody.

This is one of those weeks, it feels like, where politics is sucking all the air out of the news cycle.

Congress is back and inside the beltway goings-on or going on a lot and everywhere.

But once again and always, the economy is not waiting around.

And the metric of choice this week is the U.S.

labor market.

The August jobs report comes out on Friday.

Today, it was the Job Openings and Labor Turnover Survey, jolts in the vernacular, for the month of July.

The headline was that pretty much everything is status quo, job openings, layoffs, hiring, people quitting, all about the same as last month.

But to quote friend of this program, Heather Long, the chief economist at Navy Federal, this job market is frozen, she wrote this morning.

And as marketplaces Samantha Fields reports, things are especially chilly in one key industry.

The job market is just kind of stuck.

Not much is really going on.

If you have a job and you're very happy with it, things are peachy.

Guy Berger at the Burning Glass Institute says that's because layoffs are low, so you're unlikely to lose your job.

But if you're looking for one because you're not happy with yours or because you're unemployed, man, it's tough.

It's tough to find a job.

But that's sort of been the picture for the past year and has not fluctuated very much.

Not in any dramatic way.

The labor market has been cooling though.

Daniel Zhao at Glassdoor says for months now.

Healthcare has really been the only industry that has continued to power along.

But now it looks like hiring and healthcare is starting to slow down too.

And that is concerning because healthcare has been the reliable pillar of strength for the job market.

If not for healthcare and social assistance, we would have actually had net job losses in each of the last three months.

This slowdown in the healthcare industry is not just showing up in the Joltz report.

Jow says it's also showing up in Glassdoor's Employee Confidence Survey.

Healthcare workers' confidence is now below 50%.

And Kate Bond at the Institute for Women's Policy Research says in the July jobs report, We're seeing black women in particular having pretty significant job losses.

In the last six months, they've lost over 300,000 jobs.

And she says black women are overrepresented in the care industry.

Perhaps it is this weakening of the healthcare and social assistance sector that could be partially explaining what we're seeing happening to black women.

Fewer health care workers are quitting their jobs too, which Bond says is a sign they don't feel like they have as much power or as many opportunities as they used to.

I'm Samantha Fields for Marketplace.

Wall Street for the midweek session.

Better than yesterday anyway.

We will have the details when we do the numbers.

Today's corporate, huh, look at that story comes to us from Macy's, which reported quarterly earnings this morning that were not as bad as expected.

The chain is trying to turn around.

After years of flagging sales, it's closing more than 100 stores and updating hundreds of others.

Executives on the earnings call this morning offered an optimistic sales forecast for the rest of the year, though.

Wait for it.

Wait for it.

Tariffs are expected to eat into the margins.

The company is also trying to grow a part of the business that is immune to tariffs, selling ads on its website.

Lots of retailers are doing it as they look to imitate Amazon's success.

And as it happens, Macy's is partnering up with the e-commerce giant to do just that.

Marketplace's Megan McCarty-Carino has more.

Macy's has been selling digital ads since 2020.

That can take the form of sponsored search results, after-purchase offers, or traditional banner displays.

Of course, no one has done this kind of thing longer or bigger than Amazon.

So Macy's has announced it's partnering with Amazon to sell ads for it.

Brad Jashinsky is an analyst at Gartner.

They've really developed a huge suite of Amazon advertising tools that are much more sophisticated than many others.

Amazon launched its third-party ad service in January, and Macy's is the biggest brand yet to sign on.

The e-commerce giant scale presents benefits, but also risks for retailers, says Tim Hanlon at Verter Group.

Seems a bit counterintuitive.

Because it means sharing sales data with a potential competitor.

But as more retailers jump into the ad business, attracting ad buyers has gotten harder.

The problem is they're all acting in their own vacuums, their own silos.

And a brand is now challenged to try to figure out, geez, how do I advertise in all of those retail environments?

Many brands already advertise through Amazon's platform since it's the third biggest in the U.S.

after Google and Meta.

So consolidating ad buys for multiple retailers could be a new way for Amazon to dominate, says Andrew Lipsman, an independent analyst for media ads and commerce.

This is a well-worn strategy for Amazon to try to become the enabler for entire industries.

Sometimes, he says, it works great, like Amazon web services.

Other times, it's been a bust, like the attempt to license in-store touchless payment systems, which never really caught on.

I'm Megan McCarty-Carino for Marketplace.

There's a new show out that you might have seen, Roomies, it's called.

And even if you've missed it, it is getting millions of views on social media.

It feels kind of like a sitcom if sitcoms were shot on vertical video and less than two minutes long.

Roomies is about 20 somethings trying to make it in New York with roommates, obviously.

Free to watch, by the way.

But there is a catch, because there always is.

It's made by a credit card company that wants you to pay your rent with their card.

Patrick Coffey wrote about it and shows like it for the Wall Street Journal the other day.

Patrick, welcome to the program.

Thank you.

For those who have not yet seen it, what is Roomies exactly?

It is a sitcom.

It's an episodic scripted comedy in like two-minute vignettes that runs on TikTok and Instagram.

It is also, though, kind of an ad, right?

It is.

It's a marketing campaign.

It would be an ad if

the company behind it had paid to promote it.

Oh, very interesting.

So far, yeah.

So far, they claim that all the views are organic, as they say in the industry.

As they do.

Tell me who the company is behind it.

And then I want to chew on this whole, they haven't actually said that they're behind it in the show yet.

So who's this company built?

Yeah, the company is called Built.

It's basically a financial services company.

And initially, their product was a credit card you could use to pay your rent.

And

as part of your membership, you would get discounts and freebies from local businesses that they partnered with.

Now they say that you can pay essentially anyway

as long as your

real estate developer behind your building or the management has to be signed on.

All right.

So

you say in this piece that

they, Built, have not mentioned themselves in the first, I don't know, 10-ish or so episodes of this thing, which gets me to

why are they spending all this money if they're not actually putting the name of the company in front of people?

And what's the ROI here?

So their goal is to get people to watch it first and then over time, gradually kind of introduce them to the brand.

It's a very much a long-term play.

And the ROI is a very difficult thing to determine, which is why so few companies, I should say, have done anything like this.

They appear to be one of the first.

I hesitate to say the first because I certainly don't know every marketing campaign, thank God.

But they're trying to aim for people who are members of their target audience, which are basically people in their 20s and 30s who pay rent primarily in urban areas,

who also frequent local businesses.

And the idea is that over time, they'll realize, oh, wait a second, this company that I'm aware of created this show that I'm also aware of.

And maybe it will give me a better opinion of that company.

That's the goal.

That is, of course, the goal, but doesn't one not imagine that once Built starts working its name into the actual actual content of the program, people go, oh man, it was a marketing campaign.

I got duped.

You know, you would think so.

And I certainly feel that way, but I'm a very cynical person.

So I spoke to a couple of people,

TikTok users, who were watching the show and talking about how much they liked it.

And, you know, I messaged them and...

asked them, do you know this is a marketing campaign?

And a couple of them did not.

But when they realized it, they said, you know what?

I don't think any differently of it.

And one of them them who I interviewed for the story even said that she liked it more after learning that the brand was behind it, which was very, you know, that's not how I would respond.

But again, I'm not the target audience.

So it kind of leads me to ask myself, how accepted is this form of marketing now?

And how far will we see it go?

Right.

And the answer, obviously, is we're going to see it go pretty far if people like the people you spoke to for this piece are saying the things that they said.

I think you're right.

Yeah.

A word here about the corporate chutzpah that it takes to do this.

You're not going to find an established legacy company with shareholders to worry about doing something like this for fear of the downside.

But maybe a multi-billion dollar startup, as in this case, will be willing to give it a whack.

I think you're absolutely right.

I think that marketers at big companies, especially publicly traded ones, they're going to struggle to do something that's really out of the box, as we say.

Whereas a company like this one, which is, it has a $10.7 billion valuation, and they can essentially, at this point, their only goal is growth.

So anything that can get more attention, that's what their CMO told me, hyper growth.

But then, you know, once they sort of have to start.

looking after their finances a little more carefully, who knows?

Yeah, although it's interesting, that whole idea of hyper growth gets us back to where we started, which is me calling in an ad and you correcting me saying it's actually a marketing campaign because this is going, they're thinking bigger picture, right?

Yeah, absolutely.

I mean, as I say, all advertising is marketing, but not all marketing is advertising.

Boom.

We're just going to let people think about that for a second.

Patrick Coffee at the Wall Street Journal.

Thank you, Patrick.

Appreciate your time.

Thank you so much.

The federal government wants people in this economy to own their own homes.

If not explicitly, then certainly implicitly, once you look at the tax code and the support programs that benefit those who do own.

That's why it's worth a mention that the number of homeowner households in this country has dropped just a little bit, a tenth of 1% year over year.

But Redfin, whence that data comes, says it's the first time homeownership has gone down in nearly a decade.

And then on the flip side, the number of of renters is up better than 2.5%.

Marketplace's Elizabeth Troval has that one.

If you zoom out a bit, it makes sense that fewer people are becoming homeowners now than just a few years ago, says Harvard's Daniel McHugh.

The interest rates went down below 3%, and we saw so many households take advantage of this.

Then, when the Fed raised interest rates, mortgage rates went up too.

Prices stayed high, and median mortgage payments went up by $1,000 $1,000 a month.

It is quite stark.

I mean, incomes have not gone up that much.

Red Finn's Daryl Fairweather says buying a home got more expensive, but renting costs were relatively stable.

So a lot of people, when they're looking at the cost of buying versus renting, they're finding that renting is a more affordable option.

But if we zoom out even further and look across the decades, Texas A ⁇ M's Daniel Oney says the homeownership rate today of 65%

is par for the course.

And it's actually about where it's been historically, other than the housing bubble and the great financial crisis back in the early 2000s.

But boosting that homeownership rate is a lot of older Americans.

First-time homebuyers are far older than they used to be.

In their 40s and 50s, more established.

So for younger millennials and Gen Z looking at starter homes at $450,000, it's pretty bleak.

And Fernando Fajedo with the Wharton School says it's up to local jurisdictions to make it easier to develop affordable housing.

New homeowners, young families, the middle class, they need affordability.

Without that, he doesn't expect homeownership to increase anytime soon.

I'm Elizabeth Troval for Marketplace.

Coming up.

Is that a economy that's really declining or are we sort of out of people?

The new labor market normal.

Straight ahead.

But first, let's do the numbers.

Dow Industrial down 24 points today, about a 10%, a little less, finished at 45,270.

The NASDAQ added 218 points, 1% 21,497.

The SP 500 gained 32 points.

That's a half percent, 64, and 48.

There,

OPEC Plus meets this weekend to consider raising production quotas come October.

Brent crude down 2.3%.

West Texas Intermediate slipped 2.5%

on the day.

Those Macy's results we heard about on the way into Megan McCarty Carino's piece.

They helped shares in the department store chain ring up 20 and two-thirds of 1%.

Bond prices went up.

The yield on the 10-year Tino went down 4.22% on the 10-year.

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This is Marketplace.

I'm Kai Rizdahl.

I'm going to say something here that's just a fact.

No matter what you hear from,

well, let's just say anybody.

The United States produces the best economic data in the world, full stop.

We have decided that measuring this economy is a national priority.

We've created whole government agencies like the Bureau of Labor Statistics and the Bureau of Economic Analysis that track economic growth and how much consumers are spending, all kinds of things.

But we didn't get here by chance.

And since it is the policy of this program not to just tell you the facts, but also to give you the context around those facts, we've made some calls to explain how our data came to be the best in the world.

My name is Eric Hilt.

I'm Tom Stapleford.

My name is Carola Friedman.

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.

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

The U.S.

Constitution actually enshrines a census of population.

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.

The Great Depression represented this traumatic shock.

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

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 Sapelford at Notre Dame.

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 employment statistics at a monthly level.

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

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.

Also?

I see the big milestone is the 1946 Employment Act.

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

So all three of those things are kind of specified in the Employment Act of 1946.

This is actually a strategic goal for the government to manage those key variables.

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

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

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

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

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.

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?

Could we get better, more accurate results?

Let's go back and and look at our data.

See are there particular problems that we could take care of if we change in one way or another.

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

and try to improve it is really key.

With, and this is really important, professional expertise.

It's not

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.

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.

The August jobs report is going to be upon us Friday morning.

And believe me, when I tell you all macroeconomic eyes are going to be on it after that abysmal showing in July, just 73,000 new jobs that month, way less than anybody had been guessing.

And May and June were revised down by a combined quarter million jobs.

Remember that?

So this one is a biggie for the economy, for the Federal Reserve, and for whoever is running the Bureau of Labor Statistics, given what happened last time.

Catch is, as Marketplace Mitchell Hartman is about to tell us, anemic-ish job growth is likely to be the new normal.

The U.S.

jobs engine really is downshifting and fast, says Betsy Stevenson, former chief economist at the Labor Department, now a professor at the University of Michigan.

Looking at the last three months, we're creating fewer jobs by quite a lot, right?

Instead of creating 180,000 jobs a a month, which is roughly the rate during the last two years of the Biden administration, we're creating something closer to 35,000 jobs.

And in fact, leading economists predict job creation will stay low in the 50 to 75,000 a month range, at least through the end of this year.

To know if this slowdown is a problem, says Stevenson, we need to first understand why job growth was so strong coming out of the pandemic, peaking above half a million jobs a month.

We don't actually have enough population growth normally to sustain that kind of job growth.

And yet people kept showing up.

Where were they showing up from?

Other countries.

So we did have a surge in immigration and that allowed that kind of rapid hiring to continue.

But the surge in immigration, both legal and undocumented, is over.

The Trump administration is trying to seal the southern border and deport millions.

The number of foreign-born workers in the labor force has fallen fallen by about 5% just since March, according to the Labor Department.

Skanda Amarnath is executive director of Employ America and a former economist at the New York Fed.

Job growth is probably going to be lower now.

Less people migrating in, maybe some people leaving, going further off the books.

Now, there are other big demographic changes, including a lower birth rate and the boomers retiring that are shrinking the labor force.

After all, employers can't add jobs if there's no one to fill them.

But more of the labor market slowdown right now appears to be coming from a decline in demand for labor by employers struggling to deal with the new Trump tariffs, says Amarnath.

We saw a lot of trade-sensitive sectors show much slower job growth.

Sectors like manufacturing, mining and construction, but it also includes services sectors, so retail, wholesale trade, and also warehousing.

Another factor will depress payroll numbers going forward, says Kitty Richards at the Groundwork Collaborative, doge's federal job cuts, many of which will show up in the BLS numbers in coming months.

The Trump administration just announced that they expect to see 300,000 fewer federal employees by the end of this calendar year.

We've already seen unemployment rise in areas heavily affected by federal government cuts.

Still, the unemployment rate nationwide remains low at 4.2%,

the same level it was a year ago.

If job creation stays this anemic, won't unemployment become more of a problem?

Not necessarily, says Betsy Stevenson.

Because remember, part of what's keeping job creation low is less labor supply, fewer people working or chasing jobs.

The question is, is that a economy that's really declining, or are we sort of out of people?

If the economy is slowing and we only have 35,000 jobs a month, that's a problem if there's a lot of people who want jobs and can't find them.

Stevenson thinks the job market is still pretty healthy, though she does see more signs of distress among job seekers.

Long-term unemployment keeps rising, and more recent college graduates than usual still don't have a job heading into fall.

Lower job creation also has a knock-on effect.

Fewer folks get paychecks, consumers spend less, and then employers don't need as many new workers to keep up with demand.

I'm Mitchell Hartman for Marketplace.

This final note on the way out today, not that you weren't already kind of aware of this, but maybe it'll come in handy your next trivia night or something.

The FezBage book came out today.

It's region by region, look at this economy, 51 pages all told.

Any guesses out there?

How many times the word tariff was used?

Anybody?

100 times on the nose.

Last time around, the last book?

75.

So, progress.

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

Jeff Peters is the manager of media production around here.

And I'm Kai Risdall.

We will see you tomorrow, everybody.

This is APM.

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From Prologue Projects and Pushkin Industries, this is Fiasco, Benghazi.

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