On track for a layoffs record
The U.S. is on track for the largest number of announced layoffs since 2020. Yay us! (Kidding.) We can thank a combination of federal cuts and their ripple effects, an uncertain trade environment, and AI experimentation. After that, Jenny Han of “The Summer I Turned Pretty” tells Kai about her career journey from nanny and school librarian to novelist and Amazon Prime showrunner. Plus: recession indicators, a federally-backed lithium mine and industrial outdoor storage.
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This is Market Class.
I'm Kai Risdahl.
It is Thursday, today, October 2.
Good as always to have you along, everybody.
We begin today with the American labor market.
We do so for a couple of reasons.
Number one, if your routine on the first Friday of every month is to fire up your computer at 8.30 Washington time to check on the monthly unemployment report,
you can go ahead and take tomorrow off.
The Bureau of Labor Statistics has been declared non-essential, and so a jobs report there will not be.
But,
and number two, gold standard though it may be, the jobs report ain't the only labor market indicator in town.
Chicago Fed President Austin Goolsby and I talked yesterday about how this is a low hiring, low firing job market right now.
Companies aren't adding a whole lot of jobs, nor are they cutting many either.
That said, though, and while most companies are holding on to people, the outplayless firm Challenger Grain Christmas says this morning, employers have announced more layoffs so far this year than in any year since 2020.
So, Marketplace's Henriett starts us off with this look at which parts of this economy are cutting and why.
A huge chunk of the layoffs announced so far this year happened months ago when Elon Musk was swinging a prop chainsaw around a conference stage and firing federal workers en masse.
Andy Challenger is senior vice president at Challenger Grand Christmas.
That has really spiked the number and in a real way added to the pool of Americans that are looking for work.
And not just government workers, non-profits and other government contractors have been hit hard too, says Terry Clower at George Mason University.
If it's a large accounting firm or a consultancy operation, it's probably most directly because of a government contract.
In his region, just outside D.C., Clower says those cuts have also spilled over into restaurants, which are seeing less traffic.
And cuts to leisure and hospitality jobs are happening elsewhere, too, says Lisa Simon at the workforce analytics firm Revellio Labs.
The declines in leisure and hospitalities are sort of like bigger than usual.
Layoffs are also coming for higher earning tech jobs, in part because companies are seeing whether they can replace workers with AI, says independent economist Aaron Terrazas.
Anytime a role becomes open, they're asking themselves, do we really need this role?
Is it a role that can be done with AI?
And, you know, at the very least, they're going to test that.
Now, Terrazas says other sectors are starting to do the same thing, in part because investors want them to.
Financial markets expect similar AI impacts in these other sectors like finance, like retail, like warehousing.
We should note that while layoffs so far this year are up, the pace of new layoff announcements in recent months has slowed down according to Challenger's data.
Still, says Sarah House, a senior economist at Wells Fargo.
While I think we're not seeing the pace of softening necessarily accelerate, we're still in a precarious place.
Just how precarious?
Well, we were supposed to find out more from the jobs report tomorrow, but that'll have to wait for the government to reopen.
I'm Henry Epp for Marketplace.
Once again, Wall Street cares not a whit about the politics of this economy.
Shut down.
Don't bother them.
We will have the details.
Yeah, when we do the numbers.
Henry was just telling us about layoffs, one of the key metrics of the labor market in this economy, which is itself one of the things economists and analysts keep an eye on to see which way things are leaning, recession or no recession.
To be very extremely ultra-clear, we are not in one.
But that does not mean people's antennae aren't up.
So other than the usual suspects, what might one watch for signs of an economic turn?
Enrollment goes up in undergraduate and graduate programs during recessions.
Caroline Hawksby is a professor of economics at Stanford, also the head of the Economics of Education program at the National Bureau of Economic Research.
So enrollment in higher education and recessions.
Discuss.
It's just a sensible thing to do.
Your opportunity costs are lower because you're less likely to get a job with really good earnings growth or, you know, promotions or just the job that you want.
So, you want to know if we're in a recession, you look at enrollment numbers?
Well, unfortunately, the way the data work in higher education is that they are delayed quite a bit.
So, right now, the latest data that we have is from the 2023-2024 school year.
Oh, so what else you got?
You could look at applications.
Because you might see application shifts at more selective schools because a lot of people might want to go to the University of Michigan's Law School, even if they're not going to admit more people.
It'll just become more competitive, and we'll be able to see that they think there's going to be a recession.
In a typical year, the law school at the University of Michigan gets around 6,000 applications.
This year, a record just shy of 9,000.
Go blue, I guess.
All right, one more.
Comes courtesy of American Auto Financing.
So auto loan delinquencies are trending up.
Dr.
Rickard Bendebo is chief economist and chief strategy officer at a credit scoring agency called Vantage Score.
And if you compare them to other products like credit cards and mortgages and personal loans, you actually see that they have the highest delinquency rates of any product.
Car payments are one of the biggest monthly expenses most people have, so more people not paying them?
It is probably a sign that more people are struggling to make these big payments that form such a big outlay in their monthly cash flow.
Insert that grimacing emoji here, perhaps.
But on the other hand, what we're seeing is that even though we still are seeing year-over-year increases, the size of those increases is getting smaller.
Or is it the happy face emoji?
Now that we're starting to see that the rate of increase increase is declining, I'm starting to have a little bit more hope.
But obviously, you're not going to be happy face until we start seeing that the trend's going in the opposite direction.
Oh, all right.
No, wait.
It's that straight line face emoji thing that's neither smiling nor frowning.
Yes, that would be a good emoji to describe me right now.
There are recession indicators in all corners of this economy, no matter what your emoji.
Send us yours, would you?
Marketplace.org.
The global supply chain, as we have talked about a lot, is a complicated, complicated beast, at least in part, because as much as companies might try, they can't always find their way to just-in-time delivery.
So, trucks and containers and equipment need a place to be put while they wait.
Patrick Sisson wrote about this thing.
It's called Industrial Outdoor Storage in the New York Times the other day.
Patrick, welcome to the program.
Yeah, thanks for having me.
I confess this is a new one for me.
Industrial Outdoor Storage, IOS, I'm told, is the abbreviation.
What is it?
Yeah, it's been described to me as a beautiful, ugly duckling.
Basically, this is sort of the logistics kind of other spaces, places where you park trucks, places where you store trailers, places where you park construction machinery.
It doesn't look like much, but it's become a target for tons of investment from a lot of big investors recently.
Okay, why?
What is it used for?
So really what happened was people realized, especially during the pandemic, that there's a limited supply of these spaces.
People aren't clamoring to build more.
Cities really don't want big truck parking lots all over the place.
So the supply is very limited.
During the pandemic, when you saw huge run-ups in logistics and supply chain issues, it became apparent this stuff's really valuable.
And demand kind of skyrocketed, and investors followed that.
And now comes AI, which is the gist of your story.
Yeah,
it's kind of weird because one of the other uses for this property is construction work, right?
You need a place to stage all the materials and trailers and et cetera.
There's been obviously a huge boom in data center construction.
So when you're building a data center site, you want to use every square inch for that lot to put servers.
That means you need additional space to store all the other materials and workers enter iOS.
And that's been something that's added incredible demand to the already hot iOS space.
And now the biggies like JP Morgan and Blackstone are investing a boatload of money in snapping these places up.
Yeah, estimates that I've seen show that there's been about 4.7 billion in investment from institutional investors in the last five years.
That contrasts with about 600 million in the five years before.
You know, know, yeah, Blackstone, JP Morgan, Peakstone Realty Trust.
A lot of these investors have told me they see this as a huge part of their strategy, a really exciting investment opportunity going forward.
Enciting investment opportunity, but I imagine as demand for these kinds of places goes up, right, aside from the usual ones that you've got in your ports and trucking centers and all that, this AI thing, demand's going up, so rents are going up, so it's all getting more expensive.
Right.
Yeah, I mean, to your point, like in the last five years, rents for these spaces have gone up 123%.
And you can contrast that with sort of traditional warehouses which have also seen a huge rise those have only gone up 58 percent so yeah i mean there's going to be a lot more competition for it which is why you're seeing people you know buy these spaces assemble portfolios and then get investment from the big players because yeah people see this as you know you're only going up basically one hates to play this out but you don't suppose we're going to wind up with more of these like big gravel random spots sort of all over the place right because there's demand for them people are going to say oh yeah let's turn this xyz into a gravels indoor industrial outdoor storage space.
That's normally how things work.
One of the reasons this is so attractive is that zoning really prevents that from the most cases.
You know, cities, again, there's strict rules about adding more of this kind of space and adding truck parking.
So the places that do exist are very limited.
So that makes them, you know, in the case of rising demand, even more valuable.
Small favors.
Patrick Sisson writing on industrial outdoor storage in the New York Times the other day.
Patrick, thanks a lot.
Fascinating story.
Thanks.
Appreciate it.
Just because the government's closed doesn't mean the government's closed, if you know what I mean.
The executive branch does have some discretion about what's essential and what isn't.
And it seems the White House has decided that inserting the government farther into corporate ownership is indeed essential.
On top of the 10% stake it has taken in Intel and the golden share Washington now has in U.S.
Steel, the Trump administration announced yesterday it is taking a 5% stake in Lithium Americas, which is trying to open a lithium mine and a processing plant in Nevada.
There has been, as you may be aware, a years-long effort by the U.S.
government to onshore its supply of critical minerals that are used in everything from smartphones to fighter jets.
But at the same time the government is investing in lithium production, it is also undercutting market demand for that very commodity, as marketplace's Daniel Ackerman explains.
Once it's up and running, Thacker Pass could be one of the most productive lithium mines on earth, says Salim Ali, professor of geography at the University of Delaware.
So this one definitely will help the U.S.
in terms of supply security from mine to market.
And that market can be summed up pretty simply, says Jessica Trancic of MIT.
Lithium-ion batteries.
Lithium-ion batteries, she says, like those used in electric vehicles.
When we look globally, the growth in EV demand continues to be strong.
Here in the U.S., though, Morgan Bazillion of the Colorado School of Mines says EVs have not been stated priorities of the Trump administration thus far.
In fact, the administration ended tax incentives for EVs just this week.
Car makers say that will hurt sales of EVs and the lithium they contain.
The demand side of that equation certainly will take a hit.
And this policy dissonance with support for lithium production, but not for the products that use it, raises a question for Chris Berry, president of the consulting firm House Mountain Partners.
If we are going to be producing lithium domestically, which is the intent with Lithium Americas, where will it go?
He says there is still a robust global demand for the metal, even though the market is well supplied at the moment.
But more broadly, Berry says the U.S.
push to control its mineral supply is starting to resemble that of its chief economic competitor.
It seems like we're becoming more Chinese, right?
We're picking a national champion and we're sort of subsidizing the company or anointing the company.
If all goes according to plan, Thacker Pass will begin full-scale production in 2028 as one of just two lithium mines in the U.S.
I'm Daniel Ackerman for Marketplace.
Coming up.
I'm a creator.
I'm a storyteller, so I do want to control everything.
Obviously, you can't.
Can't you, though?
Really?
The summer I turned pretty straight ahead, but first, let's do the numbers.
Dow Industrial is up 78 points today, just under 2 tenths percent, 46,519 for the blue chips.
The NASDAQ added 88 points, about 4 tenths percent, 22,844.
The SP 500 up four points, that's less than a 10th percentile.
We'll call it flat, 67 and 15.
Tesla reported it delivered just shy of a half a million vehicles in the third quarter.
That's up from about 460,000 a year ago, more than analysts had been expecting.
But, and however, remember the end of federal tax credits for EVs has been juicing sales.
Tesla slowed down 5.10% today.
Bonds went up.
Yield on the tenure.
Tinote down 4.08% on the tenure.
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This is Marketplace.
I'm Kai Rizdahl.
Here's today's If You Know, You Know segment, and it starts with a question.
Are you Team Conrad or are you Team Jeremiah?
I'm not going to judge you, but Team Conrad is the only right answer here.
The subject at hand is the Amazon Prime series The Summer I Turned Pretty, a coming-of-age story about Belly Conklin, she's the one who turned pretty, and the two aforementioned brothers, Jeremiah and Conrad.
Mega hit does not really do this thing justice.
Amazon says the two-episode premiere of the final season that just ended had 25 million viewers.
Jenny Hahn is the creator and the showrunner.
She's also the author of the original Young Adult trilogy that the show is adapted from.
And we got her on the phone.
from New York the other day.
Hey, Jenny Kai Riznal in Los Angeles.
How are you?
Hi, good.
Thank you.
So I have to tell you a very quick story before we get going.
You ready?
Yes.
All right.
My daughter is the big fan of yours in the household.
And she just graduated from high school.
We just dropped her off for college the other day.
But about two weeks ago, she was out with a friend of hers that she graduated with.
And
they pulled into the driveway coming back from lunch or whatever it was.
And her friend leaned out the car window as I was walking back into the house and she said, hey, Mr.
Rizdahl, is it true you get to interview Jenny Hahn?
So I would just like to tell you, I'm the most popular dad in my town right now.
I like to hear that.
There you go.
So the finale's been out for, I don't know, a couple of weeks now.
Number one, how does it feel to finally have it out in the world?
It feels like a relief.
We were keeping a really tight lid on everything.
So I'm happy that it's finally just all out there.
Are you taking a couple of weeks off?
What are you doing?
No, I'm just working.
That's not the way it's supposed to work.
I know.
What are you doing?
I'm working on the script for the movie.
Oh.
And, you know,
all the other sort of like businessy things, I suppose.
Well, so that actually gets me to one of the questions I wanted to ask you.
You now have,
and you can quibble with this phrase if you like, but you have built something of an empire.
And I guess, are you a writer or are you now a businesswoman?
I think I've always been both.
Huh.
Say more about that.
How do you do both?
You know, honestly, you kind of have to because, you know, I've been writing books since I was in my early 20s and book publishing is very different from Hollywood in that there's not as much money.
It's a much more, I would say,
genteel kind of industry.
So you really have to, from the very beginning, be selling yourself, selling your books.
And I think with social media, that's definitely.
that that has increased.
But when I started out, there wasn't even that.
So it was more, you know, Lily Lohman style, going to the bookstore and having your little bag of books that you go around and sell.
And now here you are, though, with a deal with Amazon.
You have
a handful, I'm sure, or more of projects in the works.
I guess I want to know what your stress level is like.
Always high.
How do you write, though, when your stress level is so high?
I mean, I just do.
It's so different for me.
Writing scripts and writing TV is very different than writing books in terms of the headspace that I'm in, because on a regular day, I'm having a marketing meeting or a meeting about merchandise, and that's kind of splitting into the day.
Whereas when I'm book writing, you have to be, for me, I'm almost in a kind of trance.
So it's just a different kind of brain that I use.
Can we talk creative control here for a second?
You had some opportunities on some some of your work,
early-ish on, I suppose, and you passed until you could sort of do it the way you wanted to do it.
What specifically was it that you wanted control over, I guess?
Everything.
Okay then.
Jenny Hahn, control freak.
No, I'm kidding.
I am.
Yes, I am.
Yeah, I'm a creator.
I'm a storyteller, so I do want to control everything.
Obviously, you can't.
That's something I work on in therapy.
But I would say that as a novelist,
you are the producer, the costume designer,
you know, the scriptwriter.
You're everything, the casting director, because you are
making it all up in your head.
So I'm used to that level of control.
And that's why I'm right now, I, with Summer, I turned pretty, we started in television because the writer is in the driver's seat in that medium.
Is there anything you do different in your rise?
Because look, you worked at an olive garden.
You were a nanny, right?
Or an au pair?
Which were you?
I was a nanny.
Yes.
I was a paid companion.
Right.
For a girl who, I think you've said at one point didn't really need a nanny anymore.
No, she didn't, but we were really good friends.
So is there anything you do different?
I mean, look, people are the accumulation of all their experiences.
Would you pick a different set of experiences?
Hmm.
Is there anything I would do differently to get to here?
No, because I think that,
you know, being, I was also a librarian.
I was a school librarian for years.
Yeah.
And I think, and I was doing that as I was writing my books.
And I think
part of
why I think the show and also to all the boys I've loved before
found an audience was that
I've always been
trying to understand my audience as a novelist, but also, you know, as a librarian, I would
read new books every day because my young readers were coming in and demanding new stories.
And so I would go to the bookstore and try and figure out what they wanted.
So I think that's an important part of my job now as a showrunner.
A couple of production things I want to touch on.
First of all, the music in The Summer Arts and Pretty and your other work.
It is very specific.
It is very to the point.
It's also not cheap to do the kind kind of licensing that you do.
Are you a, listen, I want it this way, and I don't care how much it costs kind of person?
No, I'm reasonable.
I think that
you want to do it justice no matter what.
So if it's a really big song or a song that I think has special meaning for the singer, for the musician, then you want to make sure that you're placing it in a scene that really highlights it and lets it be
a focal point.
So for instance, for a more expensive sink, you know, I'm willing to make concessions for a scene where maybe it's more background music, like a party or in a restaurant or something.
So
I'm reasonable.
Is it true you wrote to Taylor Swift to ask her to use one of your songs?
That's true.
Yeah, that's true.
Wow.
That's some chutzpah, could I just say?
Well, I really, really wanted it.
And
I was really, really grateful and appreciative that she allowed us to use her music.
And not just that one song that I asked for, but then, you know, we've been able to use her music all three seasons.
And I feel extremely fortunate for that.
Let me get you back to your audience for one minute.
To your readers, to the watchers, the viewers.
You spent a lot of time, as you said, trying to understand them.
And clearly you've developed that understanding because millions and millions and millions of people watch your stuff.
What did you learn about your viewers and your readers?
And was there anything that surprised you about them?
Hmm.
What did I learn?
I can't point to one thing.
I think that, you know, obviously everyone's different.
And I've had a relationship with my audience for a really long time.
And it's different when you write books because it's a much more small group.
It's more intimate in that way.
And now with film and TV, it's bigger.
So it's harder to have that same kind of relationship and i i do miss that um
kind of closeness but to me it's always been about connection and that's why i tell stories so i think it's really about feeling a sense of empathy and like understanding um and trying to create stories that that really do that
jenny ha in the summer i turned pretty and a whole bunch of other things uh and a movie um coming our way about that jenny thank you so much for your time i really appreciate it thank you it was nice to meet you kai yeah my daughter's going to be very jealous.
Daughter said, Hi.
I will absolutely do that.
Maybe I'll make this a ringtone.
All the music on the show today, by the by, handpicked by Jenny Hahn.
We've got the full playlist and all the music that you hear here at marketplace.org.
This final note on the way out today, in which artificial intelligence might make humanity go broke before it becomes sentient and does away with us.
I kid.
Kinda.
Saw this on Bloomberg that AI data centers have added $7.3 billion in power costs to the biggest power grid in this economy as of its last energy auction.
That grid covers the Midwest over to the Mid-Atlantic.
Data center demand, that company reports, accounted for 45% of total power supply costs this past summer.
Our daily production team includes Andy Corbin, Nicholas Guillong, Mia Hollenhorst, Iru, Ekbenobi, Sarah Leeson, Sean McHenry, and Sophia Terenzio.
And I'm Kyle Risdahl.
We will see you tomorrow, everybody.
This is APM.
This week on Million Bazillion, Ryan and I are off to a sleepaway camp for podcasters, where we meet up with some other podcast friends for a very special episode about animals and money.
Together, we're going to tackle some very important questions like what animals should be in charge of the economy.
Well, like I said, there's plenty of crossover between the animal kingdom and your world of money.
Don't miss this special episode.
Listen to Million Bazillion on your favorite podcast app.