The contrarian jobs report

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Speaker 2 In one respect, a completely normal week in this economy. In most other respects,

Speaker 2 not.

Speaker 2 From American public media, this is Marketplace.

Speaker 2 In Los Angeles, I'm Kyle Rizdahl. It is Friday today, the 7th of March.
Good as always to have you along, everybody.

Speaker 2 As we end week seven of the second Trump administration, where do you suppose things stand in this economy? Courtney Brown's at Axios. Heather Long's

Speaker 2 at the Washington Post. That is what we are going to talk about.
Hey, you two.

Speaker 1 Hi, Kai. Hey, Kai.

Speaker 2 Heather Long, let me begin with you. The normal thing that happened this week in this economy is, of course, the jobs report out today, 151,000 new jobs, 4.1% on the unemployment rate.

Speaker 2 You are a close reader of these reports.

Speaker 2 What was your favorite item? What stuck on to you?

Speaker 3 Well, you're right. Overall, it looked pretty good.

Speaker 3 Like, if you didn't know all this other stuff was going on this week, you'd think, hey, we were chugging along with a pretty good economy that's still adding jobs.

Speaker 3 The two things that I've really paying attention to so much of our hiring lately has been in healthcare. And we saw that again today.
That was the biggest sector by far.

Speaker 3 And obviously, President Trump and the House Republicans are talking about some pretty substantial cuts to Medicaid.

Speaker 3 I worry a lot about the future of healthcare hiring.

Speaker 3 The other thing that stood out to me, the one worrying part of the jobs report, was a lot of people are working part-time who wish they could work full-time.

Speaker 3 And that's usually one of those leading indicators of strain in the hiring market. So I think we got to pay a close attention on that.

Speaker 3 And obviously, with everything going on, it's hard to envision that hiring picks up. It seems like things were looking a little, a little slower, a little weaker, even before

Speaker 3 Elon Musk started.

Speaker 3 taking a lot of cuts to the federal government.

Speaker 2 Courtney, let me ask you this.

Speaker 2 Among the not normal things that happen in this economy this week is the back and forth and the back and forth and then the back and forth again about tariffs and President Trump.

Speaker 2 I have two notes that I've written to myself here that

Speaker 2 I brought into the studio with me. One says, What kind of way is this to run an economy?

Speaker 2 And the other one says, It doesn't matter whether they're on or off, businesses already have to deal with them as if they're on. So you pick which question you want to answer.

Speaker 4 I think I'm going to try to tackle both of those things.

Speaker 1 All right, show's only half an hour long, yo.

Speaker 2 Come on.

Speaker 4 I know, I know.

Speaker 4 You know, I talked to

Speaker 4 someone who is obsessed with the USMCA, knows the trade pact that Trump negotiated in his first term very well.

Speaker 4 And I called him this week, and he simply said that you cannot conduct trade policy on a 30-day cycle, which has been kind of the crux of trade policy in the Trump era.

Speaker 4 As you say,

Speaker 4 it's hard to operate a business this way.

Speaker 4 When you don't know what to do, you kind of don't do anything. And

Speaker 4 that's not great for the economy when no one is doing anything, hiring,

Speaker 4 you know, thinking of ways to expand their business.

Speaker 2 Okay, but wait, there is that saying that, you know, it's something that can't continue.

Speaker 2 I don't even know what it is, but it's something like things go on until they can't continue and then they stop, right? And I don't know that we have any sense, Courtney, that this is going to stop.

Speaker 2 I mean, he was talking about 250% dairy tariffs today on Canada.

Speaker 4 Yes, it is getting hard to keep track at this point, but you're right.

Speaker 4 There was something like a reprieve yesterday with the tariffs that were on for a bit on Canada and Mexico.

Speaker 4 And then today in the Oval Office, again, he was kind of

Speaker 4 beating down Canada and threatening to impose tariffs on lumber and dairy. And by the way, there's an investigation, a section 232 investigation on lumber

Speaker 4 already underway. It's all very confusing and hard to keep track of.
But I think the easiest way to put it is that it's very confusing. And as you say,

Speaker 4 there's no guarantee that any tariff or rollback of tariff is going to stick.

Speaker 2 So, Heather Long, a piece you wrote the last couple of days. I apologize.
It slips in my mind. Talking about the potential for a Trump recession.
Here's my question, though.

Speaker 2 It used to be the presidents had a grace period before the economy became theirs, right? And

Speaker 2 eventually it became the Obama economy, the Bush economy, what have you. Donald Trump is now the American economy, right?

Speaker 3 It's going to be harder and harder for him.

Speaker 3 I know they're trying to blame Biden for any downturn or even for for the stock market declines this week, but just given how much he's done in these first seven weeks and given how much he likes to tout everything that he's done, it's going to be harder and harder for him to distance himself from this record.

Speaker 3 And I think you're right.

Speaker 3 You know, out of every all the chaos of this week, what we're going to look back and remember is this is the week that Wall Street began to actually believe a recession is possible and a recession due to Trump's tariffs, not due to some weird other factor, but due to this president's policies.

Speaker 3 And that was a big momentum shift.

Speaker 2 Well, keep going with that one for a minute. With the acknowledgement, Heather, that the stock market is not the economy.
Why does it matter?

Speaker 2 Why is it significant to you that this is the week that Wall Street rolled over?

Speaker 3 Because you started to see this belief that there is no clear off-ramp, what you and Courtney were just talking about.

Speaker 3 Not only do the tariffs on again, off again, but there's just no clarity about why we're doing this. And that makes it really hard to see any possible endgame.

Speaker 3 I mean, today in this discussion with Canada, right, we're going to suddenly renegotiate the border with Canada.

Speaker 1 Literally the border, the boundary line.

Speaker 3 Right. So that's not going to happen.
And that's what makes it really difficult to see how can we make a deal when there's no concrete deal to be made here.

Speaker 2 Courtney, a word here about the Secretary of the Treasury, Scott Besant, who has said a bunch of stuff this week. He said yesterday

Speaker 2 the economy needs a detox from all this government spending. He said, in essence, we're not really looking at the markets.
He said it seems to be rolling over a bit.

Speaker 2 What do you make of nominally this chief economic advisor to the president?

Speaker 4 I think those comments came in the morning, and

Speaker 4 a couple hours later, there was a very different tone from White house officials um you know uh talking to reporters and of course trump himself talking in the oval office it seemed like in the morning it was not their economy but they saw the jobs report and seemed to be pleased with what they saw and so it was their economy um the head of the national economic council kevin hasett said that there were clear signs of um Trump's impact in the jobs report.

Speaker 4 Of course, he was citing the

Speaker 4 job cuts of the federal government that were in the report. So it seems like Secretary Besant was trying to distance the Trump administration from

Speaker 4 the state of the economy. But they got data they like.

Speaker 4 And so maybe they're trying to bring themselves a little bit closer to it for now.

Speaker 2 We should point out, Hercourt, just to be on the record and really quickly, the jobs report that we got today does not reflect actually what has been happening with the federal workforce in full.

Speaker 4 Exactly.

Speaker 1 But,

Speaker 4 yes, exactly. And, you know, they also

Speaker 4 tried to point out that the manufacturing sector looked very healthy this month. And, of course, if his trade policy goes on, it could very much go the other way.

Speaker 4 So, yeah, there are a lot of things they're trying to hang on Trump that are not necessarily true.

Speaker 3 I hope they don't come to regret that detox economy is the new

Speaker 3 euphemism for downturn.

Speaker 1 We shall see.

Speaker 2 That was How the Long at the Washington Post, Courtney Brown at Axios on a Friday. Thanks, you two.

Speaker 1 Thanks. Thanks, guys.

Speaker 2 Wall Street today. Traders decided they were in a good mood, I suppose, at the end of a tumultuous week.
Details, numbers, when we get there.

Speaker 2 So, the jobs report, as we were talking about, uneventful really, pretty close to expectations, no huge surprises. However, comma, as often happens, you dig in a bit and you find some stuff.

Speaker 2 As we mentioned, the unemployment rate rose slightly last month, 4.1%, because the number of unemployed people went up while the number of people in the labor force went down. So far, so good, right?

Speaker 2 Meanwhile, the number of people employed in February fell by 588,000. But at the same time, U.S.
employers added 151,000 jobs to their payrolls. And that's where the math gets a little tricky, right?

Speaker 2 Employment went down. The number of jobs, though, went up.
Good thing we've got Mitchell Hartman then, huh?

Speaker 6 We call it the monthly jobs report, but actually, it's two reports mashed together by the Bureau of Labor Statistics based on two surveys the agency does each month.

Speaker 6 And they can disagree because they go to different sources for different information. The household survey asks people whether they're working or looking for work.

Speaker 6 The payroll survey asks employers how many jobs they have. And that survey is a lot bigger, says Dory Allard at the Bureau of Labor Statistics.

Speaker 7 121,000 businesses and government agencies, 631,000 individual work sites, and there is a lot more stability in those estimates than there is in the household survey, which is relying on interviews from approximately 60,000 households.

Speaker 6 In the household survey, a change in employment is only considered statistically significant if it's above 600,000.

Speaker 6 Economist Joe Bruce Welles at consulting firm RSM says February's employment decline was big, but not that big.

Speaker 8 Given the large standard error inside that report, we really want to be cautious about overreacting.

Speaker 6 Elise Gould at the Economic Policy Institute agrees for a single month, the household survey is less reliable.

Speaker 9 When the surveys tell a different story, we got to take the payroll survey, give that more weight because of the sample size.

Speaker 6 But she says, over time, the household survey can't be ignored.

Speaker 9 Sometimes the household survey is better at predicting changes in the business cycle. It might find softening sooner.

Speaker 6 The survey has been sending warning signals about long-term unemployment, says Joe Brusselis.

Speaker 8 There's a large number of people who've been unemployed for six months or more.

Speaker 6 But the survey is telling a different story about America's least educated workers, says Jane Oates at news site WorkingNation.

Speaker 11 An increase in the labor market participation of people with less than high school and a drop in their unemployment.

Speaker 6 As for the current divergence between the payroll and household surveys, Dory Allard at BLS says, give it a few months.

Speaker 7 Over the long term, the two series do tend to track well together.

Speaker 6 With overall trends pointing in the same general direction. I'm Mitchell Hartman for Marketplace.

Speaker 2 Right up there in the pantheon of easiest ticker symbols ever is Gap Incorporated, parent company of Old Navy, Banana Republic, Athleta, and its namesake, Gap ticker symbol, of course, G-A-P.

Speaker 2 And shares got a nice bump today after reporting strong earnings, up almost 20%, those shares were.

Speaker 2 You know, Gap's been selling clothes for more than 50 years, but it has been a rough couple of decades.

Speaker 2 So in 2023, the company brought on a new CEO, Richard Dixon, who, among other things, had helped revitalize Barbie at Mattel.

Speaker 2 And Gap sales did start to turn around last year, despite it being a not-so-friendly environment for discretionary spending.

Speaker 2 Marketplace Megan McCarty-Carino has more now on the comeback of an American classic.

Speaker 12 Gap might not have its own blockbuster movie like Barbie, but according to CEO Richard Dixon, Gap is back in the cultural conversation.

Speaker 12 From collaborations with up-and-coming designers to a new ad campaign featuring emerging young musicians, there's some really great momentum around the brand, which seems to be catching the attention of the consumer.

Speaker 12 Retail consultant Sonia Lipinski at Alex Partners says Gap has also leaned into its heritage, with callbacks to its iconic dancing commercials, the latest featuring film and TV star Parker Posey.

Speaker 13 They're really kind of riding this trend that hasn't quite gone away yet, but this whole 90s trends and 90s nostalgia.

Speaker 12 It helps that wide-legged jeans from the retailer's heyday have been back in style. But Gap brands like Old Navy also have a durable advantage, says analyst David Swartz at Morningstar.

Speaker 14 People are concerned about inflation and high prices and everything. And Old Navy is known for having relatively low-priced stuff that's generally good quality.

Speaker 12 And those prices aren't likely to be affected much by tariffs. GAP imports less than 1% of its components from Canada and Mexico, and less than 10% from China.

Speaker 14 They've been preparing for this for some time because this has been discussed now for quite a long time.

Speaker 12 Mark Cohen, the former director of retail studies at Columbia Business School, worked for GAP in the 70s.

Speaker 10 Back in its go-go days when it really was skyrocketing.

Speaker 12 He says if it wants to maintain this momentum after decades of struggle, the company will have to do more than splashy marketing.

Speaker 10 It has to have an extraordinarily powerful five-pocket proposition.

Speaker 12 Whether those five-pockets are in denim or khaki pants, he says Gap needs to deliver on the affordable everyday basics consumers are looking for. I'm Megan McCarty-Carino for Marketplace.

Speaker 2 Does anybody actually use that fifth pocket though?

Speaker 1 Really?

Speaker 2 Anyway, coming up.

Speaker 5 Good players on artificially cheap contracts.

Speaker 2 The financialization of the NBA. But first, let's do the numbers.

Speaker 2 Dow Industrial's up 222 points. Today, about 1%, 42,801.

Speaker 2 The NASDAQ climbed 126 points, about 7 tenths percent, 18,196. The SP 500 added 31.
That's points. The percentage is about 12%,

Speaker 2 57, and 70. For the five days gone by, the Dow dipped 2.4%.
The NASDAQ slid 3.4%.

Speaker 2 SP 500 down about 3.10%. Megan McCarty Carino is just telling us about Gap's big turnaround.

Speaker 2 Shares spiked, as I said, almost 20%, 18 and 8 tenths percent if you want to be precise elsewhere in retail urban outfitters shrank one percent ralph lauren or lauren i can never remember slumped two and four tenths of one percent bonds fell yield on the tenure t-note increased to 4.31 percent i'm sticking with lauren if you're listening to marketplace This is the story of the one.

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Speaker 2 This is Marketplace. I'm Kai Risdahl.

Speaker 2 As Heather alluded to up at the top of the program, there were some details in that jobs report this morning that suggest the labor market might be softening just a touch.

Speaker 2 To wit, the number of people who said basically that they're stuck in part-time jobs when they'd really prefer full-time work was up about 10%.

Speaker 2 Marketplaces Kimberly Adams takes it from there.

Speaker 9 The Bureau of Labor Statistics actually has six different ways of measuring unemployment, named memorably, U1 through U6.

Speaker 9 The official unemployment rate, that's U3, and it came in today at 4.1%.

Speaker 10 But they also have a broader measure, which includes discouraged workers, marginally attached workers, and people who are involuntarily working part-time.

Speaker 9 And it's called U6, says Jeremy Reynolds, a Purdue sociologist who studies work in organizations.

Speaker 10 And that measure has risen to 8%.

Speaker 10 And that's the highest level that that measure has been at since 2021.

Speaker 9 Then there was that big increase in the number of people working part-time who wished they could work full-time. Lonnie Golden is a professor of economics at Penn State Abington.

Speaker 10 The jump in part-time for economic reasons was surprising. It had been creeping up in the last few months, but it really jumped up.

Speaker 9 Up by 460,000 people in February, bringing the total to just under 5 million.

Speaker 9 Some of that, says Golden, may have to do with a decrease in the number of so-called discouraged workers, people who have given up on looking for a job. That was down almost 130,000 last month.

Speaker 10 And when they come back into the workforce, indeed, they're looking either for part-time, which would be voluntary, or maybe full-time opportunities that are not there.

Speaker 10 So they're taking part-time instead.

Speaker 9 One reason for all the part-time work is the instability in the broader economy.

Speaker 17 People are taking a more cautious approach to looking for a job, and employers are taking a more cautious approach when it comes to hiring and which positions they're hiring for.

Speaker 9 Because with everything going on, it's almost impossible to predict what's ahead for the job market. In Washington, I'm Kimberly Adams from Marketplace.

Speaker 2 If you are even a tangentially attached sports fan, you probably saw all the hullabaloo about the blockbuster trade that sent Dallas Maverick star Luka Doncic to the Lakers.

Speaker 2 If you're not a sports fan at all, trust me, it was a big deal.

Speaker 2 But underneath that player swap is a Byzantine network of regulations with a dash of money ball thrown in for good measure that has transformed the sport.

Speaker 2 The explanation at hand was in The Atlantic the other day, an article headlined, How Economists Took Over the NBA. Jordan Sargent had the byline.
He usually covers music and entertainment.

Speaker 2 Devoted basketball fan on the side.

Speaker 5 The NBA is a capped sport.

Speaker 5 It has a salary cap and a luxury tax and some other aspects that prevent, limit, or severely incentivize teams to not spend as much money as they can.

Speaker 5 And so things can get very complicated and you don't need to just know statistical basketball sports terms anymore.

Speaker 5 You have to understand aspects of the salary cap and aspects of economics in ways that you just didn't as a casual fan

Speaker 5 in previous eras of the sport.

Speaker 2 You talk about the collective bargaining agreement, the CBA, the 600 and I think it's 76-page document, and what that has done to, as you mentioned, salary cap and all that.

Speaker 2 And it has made draft picks sort of the commodity in the NBA of today. Talk about that a little bit.

Speaker 5 Yeah.

Speaker 5 You know, the NBA, like all the major sports, artificially deflates the salaries of rookies.

Speaker 5 As teams pay their best players a lot of money, you know, you're playing a LeBron James 50 or $60 million a year. It becomes very valuable if you can have good players on artificially cheap contracts.

Speaker 5 You know, you see in a lot of trades these days, five, six draft picks in one trade for one player.

Speaker 2 How did a music A ⁇ R guy

Speaker 2 come up with this story?

Speaker 5 I'll tell you, I'm a fan of basketball. I listen to a lot of podcasts, read a lot about basketball, and I just noted a shift over the years about how often you were hearing

Speaker 5 about the CBA and about which team could do what because of this salary cap thing or they can't trade this pick. You know, I'm a fan of the Miami Heat.
What can the Miami Heat trade?

Speaker 5 That's not something I could just tell you off the top.

Speaker 2 You know, it's so interesting. It's so interesting.
You said what can they trade instead of who can they trade?

Speaker 5 Exactly, exactly. And it is because teams don't really look at it necessarily as who these days.
It's more what, meaning what picks do you have? What assets?

Speaker 5 One of the things that they've instituted into their you know structure that other sports don't is this idea of salary matching meaning you know if you trade a player that makes ten million dollars then you need to get back a player or a group of players that equal that amount of money so is that the rule really

Speaker 5 what a dumb rule and they actually made it even tighter this year you know you start to have um

Speaker 5 these very narrow passageways for two teams to make a deal because you have to match all these things up.

Speaker 2 I was going to ask you just as the ender whether there's a way for the league to get out of this place where draft picks have become the commodity.

Speaker 2 But really, is this a bad thing for the league and do they need to get out of it?

Speaker 5 I don't think that it's necessarily a bad thing, although there's a lot of concern right now about something that was instituted recently in the newest CPA that puts even harsher penalties.

Speaker 2 So wait,

Speaker 2 sorry, they're tying themselves in more knots.

Speaker 5 100%. Yeah.

Speaker 5 And, you know, like the most shocking trade really, really probably in nba history which just recently took place when luca donch got traded to the to the lakers the um the reasoning the mavericks gave was that they didn't want to give luca the most expensive contract in the history of the nba which he was going to get and was going to be entitled to because they they were worried about his body breaking down and being at that level of salary and investing in him comes with all these penalties in terms of what you can do with your roster.

Speaker 5 Otherwise, your picks get artificially sent down to the bottom of the draft. There's all these penalties for spending the amount of money that they felt they were going to have to spend to retain him.

Speaker 5 You know, I think there's a lot of uncertainty from the fan media and team perspective, it seems like, about what it's going to mean for

Speaker 5 building a basketball team and retaining the best players in the sport when

Speaker 5 they're bringing the hammer down in various ways on teams that spend a lot of money.

Speaker 2 That sound you hear is James Naismith turning over in his grave. Jordan Sargent wrote a piece in The Atlantic, the title of which is How the Economists Took Over the NBA.
Jordan, thanks a bunch.

Speaker 2 Appreciate your time.

Speaker 5 Appreciate that. Thank you.

Speaker 2 This final note on the way out today, in which I'm just going to say

Speaker 2 people need some downtime, you know?

Speaker 2 The president of the NASDAQ said in a blog post today that his exchange is working with regulators to offer 24-hour trading Monday through Friday. Yes, you can already trade after hours, 4 p.m.

Speaker 2 to 8 p.m. and pre-market as well, but those are limited.
NASDAQ, though, says demand for U.S. equities trading is really, really strong.

Speaker 2 I get it, but life's already pretty busy, no?

Speaker 2 Our theme music was composed by BJ Lederman. Marketplace's executive producer is Nancy Fargalli.
Donna Tam is the executive editor. Neil Scarborough is is the vice president and general manager.

Speaker 2 And I'm Kyrzdahl. Have yourselves a great weekend, everybody.
We'll see you back here on Monday, all right?

Speaker 2 This is APM.

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