Will tariffs boost U.S. manufacturing?

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Speaker 2 On the program today, tariffs, the housing market, and college admissions. We report, you decide, from American public media, this is Marketplace.

Speaker 2 In Los Angeles, I'm Kyle Rizdahl. It is Monday today, the 24th of March.
Good as always to have you along, everybody. All right, quick.

Speaker 2 Tell me, President Trump pulled back on his tariff threats even a little bit

Speaker 2 without telling me that President Trump pulled back on his tariff threats even a little bit.

Speaker 2 Were you to show me a chart of what the major stock indexes did to start the week, that would be a good response. Asked about his promised reciprocal tariffs set to go into effect next week.

Speaker 2 The president said this, quote, I may give a lot of countries breaks.

Speaker 2 Traders needed no further encouragement than that, and equities were off to the races. We here, however, prefer data to understand where this economy might be going.

Speaker 2 And we got it this morning in the form of the SP Global Purchasing Managers Index, which marketplace's Sabri Beneshwar spent his day reporting on.

Speaker 3 If you ask businesses in the service economy, the diners, the hair salons, how they are doing in March, in general, they say better than January and February, which were terrible.

Speaker 3 Terrible because of terrible weather, polar vortexes, snowstorms in the south.

Speaker 4 You know, your tourism sectors, restaurants, and so forth, just people not wanting to go out.

Speaker 3 Chris Williamson is chief business economist at S ⁇ P Global Market Intelligence. S ⁇ P Global puts out the PMI.
So in March, the weather got better and businesses in services did better.

Speaker 4 Manufacturing is the complete opposite.

Speaker 3 Companies in the manufacturing side of the economy had a great start to the year.

Speaker 4 They were ramping up production to get shipments out ahead of any possible tariffs.

Speaker 2 That bump is over.

Speaker 3 And And so in March, manufacturing sank back into the swamp of malaise and periodic contraction that it has been in for more than two years.

Speaker 3 The cost of inputs for manufacturers is at a 31-month high, see tariffs. But despite all that, manufacturers in March were the most optimistic about the future that they've been in years.

Speaker 4 That reflects this sort of more protectionist environment. The manufacturers are saying, hey, in the long run, this is going to help us.

Speaker 3 Ryan Sweet is not so sure that it is. He's chief U.S.
economist at Oxford Economics.

Speaker 7 Tariffs, they're going to cut into economic activity, and the dollar is likely going to appreciate, which doesn't really bode well for U.S. manufacturers.

Speaker 3 Tariff anxiety did help sour the mood in the service economy, though, that and the cooling labor market and slowing wage growth.

Speaker 5 When that occurs, it's not a great barometer of what's ahead for services.

Speaker 2 And confidence there around how this year will go fell to its lowest level since 2022.

Speaker 3 The service economy, by the way, employs more than 80% of the workers in the U.S. In New York, I'm Sabri Benishore for Marketplace.

Speaker 2 Wall Street Today music, happy it will be. Details, numbers, we shall have.

Speaker 2 We're going to do a couple of housing stories now. First, Redfin was out with a report today about home ownership, rates thereof specifically.

Speaker 2 Seems that last year, growth in home ownership stalled out for both Gen Z and millennials. Only about 26 percent of older Gen Zers owned homes in 2024.

Speaker 2 That's people who were between 19 and 27 years old last year, if you have lost track of which gen is which.

Speaker 2 That ownership figure is 55% for millennials, people 28 to 43.

Speaker 2 Point is that while younger people in this economy are not increasing their share of home ownership the way they did as recently as just before the pandemic, those ownership rates for gen Xers and baby boomers, well, they kept on growing.

Speaker 2 Marketplace's Elizabeth Troval explains why that all matters.

Speaker 8 33-year-old Tyler Kleeney from Denver started his home search a year ago, first with standalone homes.

Speaker 9 Even something that was like a single bedroom, little bitty thing. I couldn't afford that anywhere that I wanted to live.

Speaker 8 So he expanded his search to townhomes and condos that seemed to fit his $300,000 budget, but with HOA and other fees.

Speaker 9 That just made them out of reach.

Speaker 8 After a year, he's mostly given up.

Speaker 10 These high interest rates, the low amount of inventory, it's creating this barrier where it's harder for young people to advance in terms of home ownership.

Speaker 8 Daryl Fairweather with Redfin says those elevated interest rates are making it even harder for first-time homebuyers.

Speaker 10 They are borrowing most of the money to purchase the home.

Speaker 8 Uncertainty around interest rates is discouraging homebuyers, says John Possinen with mortgage services firm Maxwell.

Speaker 11 What we saw across all segments, but particularly millennials, just a pumping on the brakes to say, okay,

Speaker 11 what's going to happen?

Speaker 8 Younger people are waiting and seeing as they continue to trail their parents' generation in terms of homeownership. Daniel McHugh is with Harvard.

Speaker 12 Homeowners have about 40 times the wealth of renters.

Speaker 8 But Mauricio Soto, a real estate agent in Oregon, is optimistic young people will figure it out. They have well-paying jobs and time on their side.

Speaker 11 Millennial, Gen Z,

Speaker 11 they understand and they know how important it is to save money for the future. Definitely

Speaker 11 they will be in a really, really good position.

Speaker 8 He says young people should start saving and earning interest as early as they can to prepare for home ownership. I'm Elizabeth Troval for Marketplace.

Speaker 2 Home ownership in the United States is a thing thanks largely to the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, or if you prefer, Fennie Mae and Freddie Mac.

Speaker 2 And they are not immune from the politics of this moment.

Speaker 2 Last week, 14 members of the boards of directors at the two government-sponsored enterprises, that's that's what they're called, GSEs, those boards and senior executives at both were summarily replaced.

Speaker 2 Fannie and Freddie, you might remember this, have been under government conservatorship since the financial crisis, but the White House is now said to be considering a plan to reprivatize them.

Speaker 2 Would not be the first time, by the by. Marketplace Matt Levin has more on what that might mean for the housing market.

Speaker 14 Fannie and Freddie do not lend people money to buy homes. Instead, they buy mortgages from the lenders that originate them.

Speaker 14 So those loans and the risks associated with them are no longer on those lenders' books.

Speaker 14 Then they bundle up the mortgages into neat little snackable securities and then sell those snacks to pension funds and insurance companies and other big investors around the globe.

Speaker 6 They're important because they're the grease basically that makes the whole mortgage finance system work and they've been incredibly successful at it.

Speaker 14 David Dworkin is CEO of the National Housing Conference, which pushes for more affordable housing. Fannie and Freddie's big value add is the federal government acting as a backstop.

Speaker 14 If a homeowner defaults on a Fannie or Freddie-backed mortgage, the investor who owns it still gets paid. Dworkin says that lowers mortgage risks and mortgage rates.

Speaker 6 The mortgage that you get is going to have a lower interest rate than it would have otherwise.

Speaker 6 Probably about half a percent.

Speaker 14 Last year, Fannie and Freddie backed about 40% of all new securitized U.S. mortgages.
It's not exactly clear how the administration might go about ending their government-run conservatorship.

Speaker 14 Mike Fran Antonio at the Mortgage Bankers Association says reprivatization could have an upside.

Speaker 12 We think when they're out of conservatorship, it'll help them to be more innovative, more responsive to the markets,

Speaker 12 but it needs to be done cautiously.

Speaker 14 The government selling its stake in Fannie and Freddie could also yield hundreds of billions of dollars for Uncle Sam.

Speaker 14 But Andrew Fieldhouse at Texas A ⁇ M's Maze Business School says we've seen this movie before, like before the government had to bail out Fannie and Freddie when the financial system choked on those mortgage-backed security snacks.

Speaker 16 The pre-2008 status quo, in which Fannie and Freddie's upside gains were privatized going to shareholders and management, and any big downside losses were backstopped by taxpayers was problematic.

Speaker 14 The Federal Housing Finance Agency, which oversees Fannie and Freddie, declined a request for comment. I'm Matt Levin from Marketplace.

Speaker 2 We're pretty much smack in the middle of college acceptance or wait list or not acceptance season.

Speaker 2 And you don't need me to tell you that college admissions has gotten super competitive the past couple of decades.

Speaker 2 And on top of that longer-term longer-term trend, there have been changes to standardized test requirements and affirmative action and a whole bunch more, which is leaving kids and their parents confused and anxious about the whole admissions process.

Speaker 2 So enter now the world of independent college counseling, which has grown into a $3 billion a year industry, as Nicole Laporte wrote in Town and Country not too long ago.

Speaker 2 She's also the author of the book Guilty Admissions about the Varsity Blues scandal a couple of years back, if you remember that. Nicole, welcome to the program.

Speaker 17 Thanks for having me.

Speaker 2 Could you define a term for me here? What is an independent college counselor?

Speaker 17 Yes, an independent college counselor is a counselor that works outside of a high school.

Speaker 17 You can hire them to provide a service for your high school student or maybe even your middle school student to walk them through the college admissions process, everything from you know, looking over their essays and filling out the application, just doing all of, helping out with all of the stuff that these kids need to do to apply.

Speaker 2 Could I, if I wanted to? I mean, I've had four kids go through the college application process. Could I hang out at Shingle Tomorrow and say, here I am, I'm an independent college counselor.

Speaker 17 You absolutely could, and you'd probably be very good.

Speaker 2 No, no, because the truth is my wife did all of them, but that's a whole different thing.

Speaker 17 Yeah, I mean, sort of the dirty secret of college counseling is that you do not need a certification. You absolutely can set up shop.

Speaker 2 How much for those parents of kids who are confused and anxious, and you know, parents probably who are confused and anxious, how much is it going to cost?

Speaker 17 There's quite a range.

Speaker 17 The numbers that get the big headlines, of course, are the super, super high numbers, and that can go up to $200,000 over the

Speaker 17 years.

Speaker 2 Sorry, come on.

Speaker 2 That's like, that could be a whole college education someplace.

Speaker 17 Exactly. Well, that's not for a month of counseling or even a year of counseling.
That's counseling that starts in middle school. So that's, say, from 8th to 12th grade.

Speaker 17 You know, that might involve, you know, at that point, it becomes almost like a concierge service where the counselor is perhaps mapping out visits to colleges and doing a lot more than just, you know, editing an essay.

Speaker 2 Let's say I don't have 200 large to spend on my kid before they even get to college.

Speaker 2 What's the sort of average going price?

Speaker 17 Yeah, the average is about $6,500.

Speaker 17 And, you know, when you get into New York and LA and San Francisco, kind of these higher, more expensive places to live, it goes up to maybe $15,000. Again, that's over a couple of years.

Speaker 17 That's not just for a couple months or even one year. But it's expensive.
I mean, there's no way around that.

Speaker 2 I'm obliged to point out here, and as you say in this piece, the schools know this. This is a service that's available to a teeny, tiny fraction of the tippity-tippity top of the income spectrum.

Speaker 2 And it brings with it a whiff of elitism that is inescapable.

Speaker 17 Absolutely. I mean, the numbers that I was just citing alone tell you what segment of the population we're talking about.

Speaker 17 And yeah, it's in colleges admit this.

Speaker 17 I mean, I talk about Christoph Gutentag, the longtime Duke admissions officer, you know, and he admits that this is absolutely a luxury and it's giving advantaged kids another advantage.

Speaker 2 Trevor Burrus, Jr.: Not only are the parents deeply interested in this, but as you point out in this piece, venture capital firms are interested in this.

Speaker 2 There's a company that you talk about in here that raised some high tens of millions of dollars funding round.

Speaker 17 Yes, I mean, I will point out that's not the norm.

Speaker 2 Okay, fair enough, but still, fair enough. But I mean,

Speaker 2 that VC is interested in this should tell you something.

Speaker 17 Well, I think it speaks to just how this has come to dominate, you know, media headlines and the cultural interest in this, particularly amongst, yes, elite members of the population.

Speaker 17 And, you know, it's a $3 billion industry. I just think that number alone, you can't ignore that.
But again, that's a rare example.

Speaker 2 With the observation here that

Speaker 2 not everybody and probably most people don't and shouldn't want to have to need to go to this tiny piece of

Speaker 2 higher education because you can get a good college education lots of places.

Speaker 2 Do these companies have the secret code? You know?

Speaker 17 They would like you to think that um yes they would well it's funny because you look at their websites and there's all kinds of promises and statistics much much of which is very hard to discern and get behind and prove but then when you actually speak to them and i mean i think virtually all of them and probably the first meeting with a family will say we cannot guarantee admission to x school so no there is no secret sauce but again it's just it's providing an advantage yeah nicola port the piece is in town and country your book on the subject at hand, though, is called Guilty Admissions.

Speaker 2 Nicola Port, thanks a lot for your time.

Speaker 17 Thank you.

Speaker 2 Coming up.

Speaker 18 Right now, there are certain cruise ships that cannot serve the Port of Baltimore.

Speaker 2 Building a bridge from here to the future. But first, let's do the numbers.

Speaker 2 Dow Industrial is up 597 today. 1.4% ended at 42,583.
The NASDAQ up 404 points. 2.25%,

Speaker 2 18,188. The S ⁇ P 500 up 100 points.
1.3 quarters percent finished at 5,767. The DNA testing company 23andMe tumbled.
How much do you figure?

Speaker 2 Because you heard about the Chapter 11 bankruptcy we're filing, right? Down 59%.

Speaker 2 Elizabeth Petrolball was telling us about stalling rates of home ownership among Gen Zers, older Gen Zers, and millennials.

Speaker 2 So, home builder stocks, Pulte Group stacked up 3%, Toll Brothers rang up 3.8 tenths percent, KB Home improved 3.4 tenths percent. You're listening to Marketplace.

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Speaker 2 This is Marketplace. I'm Kai Rizdahl.
Tens of thousands of people so far have been summarily fired from their federal government jobs by Elon Musk and his operatives.

Speaker 2 Some of those people have been called back to work either because of court rulings or because the federal government realized workers are, in fact, important.

Speaker 2 But in that chaos lies opportunity because state and local governments are now able to scoop up some badly needed talent.

Speaker 2 But that switch from federal to state or local government work does come with some big changes, as Marketplace's Savannah Peters reports.

Speaker 22 Late last year, Eric Hamm was feeling a little uneasy about his job security.

Speaker 22 He was working as a maintenance mechanic at Big Bend National Park in Texas, and he was aware that President Trump had plans for big federal budget cuts.

Speaker 22 So he applied for a municipal job, the city forester in Cortez, Colorado. And in January, he got an offer.

Speaker 25 I actually turned it down saying, you know, we want to stick around. We want to help the park and we want to get the benefits that come with being part of the federal system.

Speaker 22 Then about a month later, Ham's wife, Keelan Crawford's job, was one of thousands cut in the first wave of downsizing under the Department of Government Efficiency.

Speaker 22 She also worked in the park as a science technician and was five months pregnant. To Eric Ham, it felt like a betrayal.

Speaker 25 It's kind of a no-brainer for me. I don't want to work for an organization that's going to do that to people.

Speaker 22 So Ham turned in his resignation and then called the city of Cortez back.

Speaker 25 Kind of with my tail between my legs.

Speaker 22 But he says they were happy to extend him another offer. In other words, the federal government's downsizing is the city of Cortez's gain.
Other states and localities have the same idea.

Speaker 24 We feel like tapping into this applicant pool that we, up until now, have had limited success in recruiting from is a real opportunity.

Speaker 22 Brenna Hashimoto directs Hawaii's Department of Human Resource Development, which is enthusiastically recruiting sideline federal workers and fast-tracking their hiring.

Speaker 24 We've had a tremendous response so far.

Speaker 22 Over 1,600 new applications for around 60 high-priority, hard-to-fill positions, like research statisticians and IT specialists.

Speaker 22 But Liz Farmer, a researcher with the Pew Charitable Trusts, says matching those workers' federal salaries or what they could make in the private sector could be tough.

Speaker 26 I would expect that to be a concern and something something that states and localities don't have necessarily an advantage of.

Speaker 26 However, one of the things that government has always had going for it is this idea of a job with purpose.

Speaker 27 It's an important part of who I am, right? Like the ability to serve and to give back.

Speaker 22 That's a federal worker we're calling Anne, her middle name, since she is still employed by the U.S. Department of Agriculture, but she's looking for an exit strategy.

Speaker 22 She's got an interview lined up for a state government job in Pennsylvania where she lives. The work is comparable.
The base salary, not even close.

Speaker 27 I'd be looking at a $60,000 pay cut. So that's really ouch.
Yeah.

Speaker 5 Yeah.

Speaker 22 There's a new policy in Pennsylvania to weigh federal work the same as state experience in hiring. If Anne gets the job, she's counting on that to help narrow the salary gap.

Speaker 22 Eric Hamm, the former National Park Service worker, says he is not taking a pay cut at his new municipal job in Colorado.

Speaker 25 But it's hard hard to beat federal benefits.

Speaker 22 With their baby due in three months, Ham and his wife won't get the paid parental leave they were counting on. Their health insurance won't be as good.

Speaker 22 And they're struggling to find housing in their new and much more expensive city.

Speaker 25 In a lot of ways, we're hurting.

Speaker 22 Ham is grateful he gets to keep working in the outdoors and for the public, but the move from federal to local government work comes with big sacrifices for his family.

Speaker 22 I'm Savannah Peters for Marketplace.

Speaker 2 It's a year this week that the Francis Scott Key Bridge collapsed after it was hit by that container ship. Six construction workers were killed.

Speaker 2 The channel into the Port of Baltimore was blocked for more than 10 weeks, and the Mid-Atlantic lost a key commercial thoroughfare.

Speaker 2 Maryland released its design for a new bridge in February, and it's obviously early days yet, but that replacement is being built to have an expected lifespan of 100 years, which means it's going to have to accommodate not just the ships and trucks of today, but the ships and trucks of a century from now.

Speaker 2 Marketplace's Stephanie Hughes reports.

Speaker 28 First of all, the new bridge is going to look really different, says Rick Geddes, who studies infrastructure policy at Cornell.

Speaker 29 The old key bridge was truss kind of design that looks like kind of a cage and that is holding up the roadway.

Speaker 28 Geddes says truss bridges were very common back in the 1970s when the old key bridge was built.

Speaker 28 The new bridge will be a kind Geddes says is more commonly built now, what's called a cable-stayed bridge.

Speaker 29 where you have very tall towers and those towers hold cables and the roadway is suspended under the towers via those cables. And so the cable stay design allows the center span to be longer.

Speaker 28 The center or main span of the bridge goes over the shipping channel. The old key bridge's main span was 1,200 feet.
The new one is expected to be 1,600.

Speaker 29 So the likelihood that a big ship is going to veer out of the channel and hit a part of the bridge is reduced.

Speaker 29 by the fact that you have the towers about a third, which is a lot, wider apart than under the old bridge.

Speaker 28 The deck of the new bridge, where the road is, will be about 45 feet higher than the old one, allowing bigger ships to pass underneath.

Speaker 28 Paul Wiedefeld leads Maryland's Department of Transportation, which is overseeing the project.

Speaker 18 Today, right now, there are certain cruise ships that cannot serve the Port of Baltimore because, as you've seen, they've gotten very large.

Speaker 28 I asked Wiedefeld if the new bridge will be able to accommodate the biggest ships.

Speaker 18 Probably not the biggest in the future.

Speaker 2 I mean, you have to think of it in the scale of the Port of Baltimore versus other ports, right?

Speaker 28 Wiedefeld says the Port of Baltimore does have room to grow, even though

Speaker 18 it's tight, it's within a very dense urban environment.

Speaker 28 But as with other kinds of infrastructure, he says there have been big advances in bridge building technology in the last half century.

Speaker 18 When you think, you know, we're building a bridge for 100 years, so you start to use materials that basically can last much longer.

Speaker 28 For example, there are better coatings for metal that protect against corrosion, says civil engineer Maria Lehman.

Speaker 28 She also says you can now embed sensors in a bridge that will give a heads up when something is off.

Speaker 27 You know, you get an alarm, hey, you should check this out, and things that normally you may not notice with a visual inspection because it's going on, you know, at the steel level.

Speaker 28 Lehman worked on a different bridge meant to last 100 years, the Mario Cuomo Bridge over the Hudson River in New York, which opened in 2018.

Speaker 28 And she says, from an engineering standpoint, you can address a lot of different outcomes, but you're on a budget.

Speaker 27 You really have to think about risk, which is the probability of failure times the consequences of the failure. And where is that sweet spot where you're investing enough that you're meeting the risk,

Speaker 27 but not too much because there isn't an unlimited pot of money to be able to do this?

Speaker 28 In the case of the new bridge in Baltimore, there's also not unlimited time. Maryland has set a goal of October 15th, 2028 for the new bridge to open.

Speaker 28 And forecasting what shipping and trucking will look like in 21-28 is hard, says Ben Schaefer, who studies civil and systems engineering at Johns Hopkins.

Speaker 15 So if there's another new idea that you and I can't really even conceptualize right now, and that becomes the most important way to move goods around, there's not an easy way to get into that sort of prediction.

Speaker 28 The best engineers and planners can do is rely on current standards, which try try to take into account how the economy will grow. In Baltimore, I'm Stephanie Hughes for Marketplace.

Speaker 2 This final note on the way out today, in which I know we talk about tariffs here a lot, but they are kind of driving things right now, right?

Speaker 2 The president has in the past called himself a tariff man, and he proves it in new and creative ways every single day.

Speaker 2 The president said today that he is going to put 25% tariffs on imports to the United States from any country that buys oil from Venezuela.

Speaker 2 Among the countries that have been buying the most oil from Venezuela, the New York Times had this tidbit, China and the United States.

Speaker 2 Our daily production team includes Andy Corbin, Nicholas Guillong, Maria Hollenhorst, Iru Ekbenobi, Sarah Leeson, Sean McHenry, and Sophia Terenzio. I'm Kai Rizdahl.

Speaker 2 We will see you tomorrow, everybody.

Speaker 2 This is 8 p.m.

Speaker 13 You've finally broken loose from work.

Speaker 22 Three friends, one tea time,

Speaker 13 and then the text. Honey, there's water in the basement.

Speaker 13 Not exactly how you pictured your Saturday. That's when you call us, Cincinnati Insurance.
We always answer the call because real protection means showing up, even when things are in the rough.

Speaker 13 Cincinnati Insurance. Let us make your bad day better.

Speaker 13 Find an agent at cinfin.com.