Why have some prices stayed put?

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On the program today, producers, their prices, and the index thereof, bonds because bonds,

and the double tax of race and gender in this economy.

From American public media, this is Marketplace.

In Los Angeles, I'm Kyle Rizdahl.

It is Wednesday, today, the 10th of September.

Good as always to have you along, everybody.

To include food and energy in your inflation calculation or not to include food and energy in your inflation calculation?

That is the question.

Whether it is nobler to have the headline August Producer Price Index with Food and Fuel Included move down a 10th percent or to use the core number, food and energy excluded, which moves the monthly wholesale inflation index up three-tenths percent.

We have talked many a time, you and I, about how both food and energy are critical for producers and consumers, but also how notoriously volatile they are.

So today, Marketplace's Elizabeth Troval makes some sense of what's happening in those noisiest of categories.

Inflation really should be looked at.

with and without food and energy, says economist Aaron McLaughlin with the conference board.

I think one thing that's interesting about sort of this moment is that energy prices have been decreasing it sort of has offset some of those overall numbers so we could see increases in other sort of durable goods or food decreasing crude oil prices have been pulling down headline inflation numbers but mark finley with rice university isn't sure how long that can last unless oil prices drop even further it's going to be difficult for gasoline to continue to be a drag on

the headline inflation numbers.

And not all energy prices are decreasing.

Ed Hers is with University of Houston.

Natural gas prices, on the other hand, have been a little more volatile to the upside for this year.

So that's led to an increase in electricity prices across the board.

On the food side of inflation, prices barely ticked up in August's PPI, but that hardly hardly tells the whole story.

Texas AM's David Anderson.

Right now, we have some disastrously low prices for agricultural commodities like corn, cotton, rice, soybeans.

That's disastrously low for farmers.

On the other hand, if you look at beef, for ranchers, you know, the best prices they've ever seen and probably the most profitable prices they've ever seen.

Just within agriculture, he says, because of things like like weather and bird viruses, prices are kind of all over the place.

I'm Elizabeth Troval for Marketplace.

On Wall Street, halfway through this week, mixed but modestly, we'll have the details when we do the numbers.

There are countless ways to try to figure out what is going on in this economy.

Consumers, we talk about them a lot.

Stock markets, not the economy, but adjacent.

Corporate well-being, important.

Yes.

But one ignores the bond market at one's peril.

And as marketplaces of pre-benefit reports, bonds do seem like they're trying to tell us something.

The bond market is all about predicting the future.

Yeah, typically the bond market, and specifically the U.S.

Treasury market is a very good predictor of where the economy is headed.

Rick Polsonello is at the Franklin Templeton Institute.

Investors can buy treasuries that last three months, two years, 10 years, 30 years.

And if they're going to lock their money up for that amount of time, they need to have an idea of what could affect their investment in that amount of time.

So, bond market message number one comes from the near future, a couple years out where we see the rate of return on treasuries, aka yields, falling.

Steve Lipley is with BlackRock.

The bond market's telling us that it's expecting the Fed to cut imminently, and the debate has shifted from will it cut to how much it will cut.

The number one thing that affects short-term yields is the Federal Reserve's interest rates.

So, if short-term yields move down, it is because investors think those Fed rates will come down.

And weak job numbers have made it pretty clear the Fed needs to cut rates sooner and faster than a lot of people thought.

Bond market message number two comes from the longer-term treasuries.

10-year T-notes, 30-year bonds.

Anders Person is with Nuveen.

The long yields have moved down by a smaller amount.

Something is keeping long-term yields high, and it is the fact that long-term bond investors have long-term things to worry about, like inflation.

Inflation is not coming down.

I expect it to come down to sort of the Fed's 2% target anytime soon.

Inflation is a bond killer.

So if investors think there's going to be more of it down the road, they are going to demand a higher long-term yield.

On top of inflation, investors have to worry about the national debt.

If the government gets overstretched in the future, it may have to pay more to bond investors in the future to borrow.

Brian Railing is with the Wells Fargo Investment Institute.

Debts are high, deficits are high.

The government continues to accumulate more debt.

Investors of today are baking all of that uncertainty in.

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

Five years ago, I interviewed a woman named Anagifty Opuko-Ajiman.

She was helping to lead a group of black women economists at the time.

This was just as the pandemic was taking hold and not long after George Floyd had been murdered.

And we had a conversation about where black women were at that moment in this economy.

The reality is that black women were, and they are, among the most vulnerable in this economy, while at the same time doing most of the economic heavy lifting in their families and in their communities.

Well, now, five years on, Anna Giftiopukriajaman is in a PhD program at Harvard, and she's also got a book out.

It's called The Double Tax, How Women of Color Are Overtaxed and Underpaid.

And it is so great to talk to you again.

Thank you so much for having me back, Kai.

It's an honor, as always.

Well, that's very kind of you.

Thank you.

I want to talk about, first of all, I want to talk about the whole book, but I want to talk about the title of it, first of all, so that people understand what we're talking about.

The Double Tax.

What does that mean?

So the double tax is essentially the compounded costs of racism and sexism.

And I think the way that I like to frame it to people, it's really a focus on thinking about how the individual costs that women, especially women of color, face become societal costs for everyone else.

It's kind of like you see your neighbor's house on fire down the street and you have a choice, right?

You can either go down and help your neighbor put out that fire or you can kind of ignore it and say, well, that fire is not in my, like my house or my neighborhood.

But the idea about fire is it spreads.

So if you don't address a fire, at some point it will probably spread to your doorstep.

And so the idea here is if we address the double tax, it doesn't have the chance to spread back into society.

All right, so we're going to get to the spread in a minute.

I want to use you though, specifically your story.

And granted, the sample size is one here,

but there you are back in college.

You're studying econ, and you go to your advisor and say, listen, I want to get a PhD in economics.

What does your advisor say to you?

Yeah, this is a great, great question that you're asking me, Kai.

A little messy.

Yeah, well, that's all right.

We got time.

You know,

I would say that, you know, the advisor basically kind of looked me up and down.

And this is someone who, by the way, this is my first time meeting him.

And he kind of was like, I don't think a PhD is the right path for you.

Specifically, he said it would be too hard for me and that I should settle for a master's.

And I just remember leaving that conversation being like, what was he basing that on?

And it wasn't until much later that he caught a glimpse at some of the classes that I was taking.

And he was like, that's your course load?

And I was like, Yes, remember, I told you I was trying to do this PhD?

Like, why are you acting confused?

This is something I was trying to explain to you, but you immediately shut me down.

I feel the need to be explicit here.

Yeah, he looked at you and saw you're a black woman.

Honestly, I want to say, sure, sure.

And

I can't say for sure, like, that I, like, that that was exactly what he was thinking, but from my experience in economics thus far, it's not too far from the truth, I feel.

And I imagine that me showing up and saying, I want to pursue this high power profession as a career path came against his priors, essentially, right?

So what he's used to seeing is people who look like him.

He's a white guy, right?

People who come from backgrounds like his.

And I think that me even daring to pursue this type of path really came against anything that he previously believed about potential from folks who look like me.

And we should say here, just on that note of your experience so far, you're a Harvard Economics PhD student for crying out loud.

Yes.

Public policy.

Public policy.

Public policy.

All right.

Yes, yes, yes.

Right?

So there you go.

Right.

So

let's get to the way this spreads.

And I want to bring up a piece I saw, I guess, on NBC a couple of months ago, but the data was everywhere.

Something like 300,000 black women this summer were leaving the workforce.

And this is kind of the spread of what happens because if you take that population out of the workforce, well, a lot of things happen, but it's just a bad sign, full stop.

That's right.

One way that I've been trying to get people to think about this is think about it as sort of 300,000 taxpayers.

Suddenly, they're not getting income, which means that, you know, they're probably relying on unemployment checks and their ability to contribute meaningfully to your community and society at large has become more limited.

But I think when it comes to black women in particular, especially black mothers, we know that 69% of them, according to the Center of American Progress, are breadwinners.

Another way I think I like to think about this too is that black women also tend to be highly educated.

So what does it mean that 300,000 highly educated individuals are no longer in the workforce?

This is a sign of potentially things to come.

And we know this is the case because it's happened back in 2008 post-recovery.

But we also know that it happened right around the very beginning of covid where i think black women's unemployment shot up to 17 percent or around that right according to the economic policy institute right so we really need to be a paid paying attention excuse me to black women in particular because they tend to be in these communities that are really being upheld by their labor and by their contributions Right.

And that's what you and I talked about five years ago at the beginning of the pandemic as black women were leaving the workforce and what it means to

focus on and try to center black women in this economy, which I'm going to get to in a second.

But I do want to talk about one thing before we get to that sort of final question, and that is the vulnerability of black women, even when they are powerful and at the top of their game.

And the example that, of course, comes to mind specifically with you is Lisa Cook, the Fed governor who President Trump's trying to fire.

You two have a relationship, she's been your mentor, you've written together, and yet, because she is a black woman, she is still vulnerable.

100%.

Even her rise to the position that she's in right now was contested.

I remember a lot of folks having a lot to say about her qualifications.

You know, Governor Cook is one of the most qualified individuals I have ever met in my life.

This is a polyglot we're talking about, right?

She could speak multiple languages.

She worked in the White House.

She worked in the Treasury.

She worked on the Council of Economic Advisors.

She's worked for four out of the 12 Federal Reserve banks.

But I think the other other aspect of what you're talking about here, if Governor Cook is ousted, right?

And really she's being targeted because this administration thinks that she's the weakest link, right?

They're looking at her, they're saying she's a black woman.

If we get rid of her, you know, society sees her as expendable because of the group that she belongs to, we're able then to reshape the Fed.

It's in its 100-plus year history.

We have never seen a sitting Fed governor be removed.

And what does it mean then if political whims are really driving the way that the Fed comes together?

It means that the data as we know it may be misinterpreted, may be reinterpreted, right?

In a way that doesn't actually benefit the American people.

This cost that this black woman is experiencing, that Governor Cook is experiencing, if it's left unaddressed, that reality that we just laid out is inevitable.

So let's bring it full circle here to what you and I talked about five years ago about black women in this economy and what this book is all about.

What does it look like if

someday

we get to a place where black women are centered in this economy?

I love this question so much, Kai.

I have to give a shout out to Janelle Jones, who is the first black woman, right?

We've had her on the woman to serve as the chief economist.

Yes.

The chief economist of the Department of Labor.

And she coined a framework that honestly for me has been gospel.

Black women best, right?

And it's the the idea that the best outcome for black women is a better outcome for everyone else.

And it's really simple.

The folks who are worse off in our society, right?

If they, if you make things better for them, if you're channeling policies to ensure that black women aren't left behind, you're not leaving behind the poor white guy who's living at a trailer park.

He's also being accounted for.

In a world or in a country rather, where, you know, black women are centered, everybody's life improves.

And I think that is the real takeaway from the book, but also the real takeaway from even what we're seeing right now in the current discourse about what's happening with jobs and what's happening with Governor Lisa Cook.

You start with Black women as a benchmark for that progress, we'll get further along that goal that we've set for ourselves.

Anna Gifti Opuko Ajiman is studying public policy at Harvard.

She is also now an author.

Her book is called The Double Tax.

Anna, thanks so much.

It's great to talk to you.

Thank you so much, Kai.

It's always a pleasure.

Coming up.

Even though I always loved reading and writing, a creative career just wasn't something that I was raised to view as being practical.

But you know, life is funny that way, huh?

First, let's do the numbers.

Dow Industrial's down 220 points today almost a half percent 45 490 the nasdaq up six points basically flat 21 886 the s p 500 up 19 points three tenths percent six five three two there

in the first of what's looking like an approaching wave of ipo's initial public offerings the swedish buy now pay later firm klarna rang up a little bit more than 14.5% today in its first day of trading in New York.

Initial public offerings still to come this week include a couple of crypto-related firms, a company that manages buildings' energy use,

and a chain of cafes.

Not enough of those.

Pet products retailer Chewy reported customer growth at this point, and analysts shares slid 16 and 6 tenths percent.

Woof, you're listening to Marketplace.

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This episode is brought to you by Huggies Little Movers.

It's fun having a baby that loves to move, but it can be challenging to find a diaper that can keep up with them.

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You can be confident relying on Huggies Little Movers for your active little ones.

Huggies Little Movers, made with double grip strips or the new HugFit 360-degree waistband, so your little double can keep moving like you.

Huggies, we got you baby

this is marketplace i'm kai risdahl those falling producer prices elizabeth troval was talking about again falling if you take out food energy and trade services they're of a piece with what we've been seeing since the president started imposing his tariffs this past spring most businesses aren't jacking up prices because of them One of the most significant reasons why they're eating at least part of those import taxes is that they're worried about how their customers might react.

Nobody likes it when prices go up, of course, and consumers often don't hesitate to take their/slash-hour business elsewhere.

But there are other reasons companies don't raise prices, even when they might want to.

Marketplace adjustin Ho, talk to some business owners about what's been holding them back.

Wolft Tooth Components is a manufacturer in Minnesota that makes bike parts.

About 1,700 different parts, ranging from little clamps, levers, and spacers to gears, pedals, and seat seat posts.

Co-owner Brendan Moore says almost all of them are made out of aluminum.

We do have some molded parts, we have some rubber parts, but aluminum is the primary because it's both lightweight and strong.

And these days, it's also more expensive because of the president's 50% import tax on the metal.

But Wolftooth Components hasn't raised any of its prices so far this year.

Moore says that's partly because he doesn't want to upset his customers, but it's also because raising prices is a ton of work.

Getting all the different dealers, which in the U.S.

we probably sell through 3,000 or 5,000 dealers, and getting all everybody to change their pricing is a huge task.

Moore says that's partly because the company sells so many kinds of parts.

Every individual product that you change a price on, you need to, first of all, figure out what that price is going to be and make sure it's competitive.

You have to send that to all your partners.

So get it out to all the channels.

make sure all the channels are updated and then follow up.

Moore has to follow up because he says some of the retailers that sell his products tend to drag their feet with price hikes.

After all, it doesn't hurt to be the last dealer selling stuff at the old, lower price.

So Moore says his company ends up spending months prodding them.

And then we hear back, but these guys haven't changed their price.

And we're like, yeah, yeah, we're talking to them too.

It's coming.

And so it's just a whack-a-mole situation where you're just contacting each customer.

For other companies, raising prices can require a lot of manual labor.

Think about all those little sticky price tickets on something.

Think about having to get those off.

That's Rob Donahue.

He's the CEO of the clothing supplier David Donahue Menswear.

He also decided to avoid price hikes this year, even though he's paying higher tariffs on the clothing he imports from Vietnam.

Donahue says he didn't want to have to pay warehouse employees to sit there with X-Acto knives peeling off price stickers.

And besides, he didn't know what price he'd put on the new stickers, since the president's tariffs have been all over the place.

Was it going to be, in our case from Vietnam, 20%,

or was it going to be 46% where they started?

We didn't know.

Donahue says he plans to raise prices next year on his spring items.

He says he hopes tariff policy will be more stable by then and waiting for the new season will be a lot more straightforward for both his company and the stores it sells to.

For the retailer, they can say, okay, great.

You know what?

Everything that we receive through fall of 25 is at the old price.

Spring of 26 and going forward is at the new price.

Relationships between businesses can be another obstacle to hiking prices.

Think of it like dating, right?

When you're dating someone and you have some bad news to share with them, you want to hold off until that relationship develops a little further.

That's Sophie Blake.

She runs a jewelry company that sells rings, necklaces, earrings, and other items that are made in India.

A couple months ago, she struck a deal to sell jewelry through a big online wholesaler.

But just days later, President Trump hiked his tariffs on India to 50%.

Blake says she really doesn't want to to go back to the wholesaler and try to renegotiate.

This relationship that I was building with this partner, this has been a relationship in works for two years.

So to unwind all those two years of work would be really tough for me.

So Blake's prices will stay the same.

She says her profits are taking a hit, but her strategy at the moment is to just make sure the launch goes well.

Let me build this relationship.

solidify it, and then we can go back to the negotiating table with our partner and discuss pricing again.

Blake says if she can prove to the wholesaler that her products sell, she'll have more leverage when she eventually has to raise her prices.

I'm Justin Hubb for Marketplace.

Next time you're in a bookstore or a library, spare a thought for the authors who brought those books to life.

They spend years, sometimes, putting in the work with no promise they will ever get published.

And even for the lucky few who do get a book deal, making ends meet can still be a challenge.

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

My name is Julie Liang.

In addition to working full-time in tech, I am the USA Today and internationally best-selling author of the teller of small fortunes and the keeper of magical things.

And I am based in San Francisco, California.

I'd never really imagined becoming an author.

I grew up as the daughter of immigrant parents, and even though I always loved reading and writing, a creative career just wasn't something that I was raised to view as being practical.

It wasn't until my dad got really sick in 2022 that my carefully planned career took something of a detour.

I decided to quit my job at Google to help care for him, and it was during a very long six months of hospital visits and waiting room stints and infusions that I was looking for comfort and escapism in books.

I binge-read everything warm, whimsical, and magical that I could get my hands on, and when I ran out of those books, it occurred to me for the first time in my adult life, I wasn't working and I wasn't studying.

Why not try writing my own book?

I must have had just years of creative energy pent up in me from my corporate life, because the book just kind of poured out of me.

Nearly everything that could have gone right for me did go right.

I got a great literary agent fairly quickly.

My literary agent took my book on submission to Big Five Publishers and we went to auction and it was a fairly competitive deal.

And so I ended up signing six figure deals for two books.

I took a year off from tech in order to kind of enjoy being a debut author, to go on a book tour.

I went to the UK with my UK publisher.

I did a couple events with my book launch here in the US.

But I had to make the decision about whether or not I was going to continue to do that full-time and try to make it as a full-time author or go back to a career in tech.

So I live live in San Francisco, California.

I own a home with a mortgage and San Francisco is a fairly expensive place to live.

But I was also thinking about the fact that my partner wanted to quit his job in order to start a company.

In the absence of his stable income, it felt like the prudent thing to do for me to go back to a stable career that had benefits and health insurance and retirement plans such that he could pursue his dream because I'd gotten a chance to pursue mine.

I'll be honest, it's been hard to find time to write, and it feels like my author career has definitely had to take a step back in order for me to go back to my full-time tech job.

And so, it may be just that my author career is sort of on the back burner until I retire more fully from my job in tech, or until I have more books out that might be able to build a backlist and produce a little bit more consistent stream of royalties that I can view as being more stable than kind of continued advances for additional deals.

Julie Leong, author and tech worker in San Francisco.

She's got a new book coming out, by the by, The Keeper of Magical Things, drops October the 14th.

We cannot, as you know, do this series without you.

So write to us, would you?

Let us know what's going on.

Marketplace.org/slash myeconomy.

This final note on the way out today, in which we are so not ready for our AI future.

Oracle, whose artificial intelligence business we talked about yesterday, has announced a deal with OpenAI.

OpenAI is going to buy $300 billion worth of computing power from Oracle over the next five years.

Here's the relevant stat from the Wall Street Journal: The deal is going to need about four and a half gigawatts of power.

That's about as much power as is used in four million homes.

Our media production team includes Brian Allison, Jake Cherry, Justin Dueller, Drew Jostat, Kario Keith, Charlton Thorpe, and Warren Carlos Torado.

Jeff Peters is the manager of media production.

I'm Kylie Risdall.

We will see you tomorrow, everybody.

This is 8 p.m.

Hi, this is Jim from Pasadena, California.

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