Marketplace - And in first place … Nevada!

Episode Date: September 6, 2024

The Inflation Reduction Act set aside $369 billion to invest in climate change programs and energy security two years ago. So far, when it comes to the percentage of IRA dollars claimed by state, Nevada ranks No. 1. In fact, the states that spent the most per capita last year aren’t Democratic strongholds either. In this episode, why Republican governors are leaning into clean energy. We’ll also hear from three “Marketplace” regulars about their jobs in the “analog” age, and dig into the August jobs report.

On the program today, jobs, new ones, old ones, we got them all. From American Public Media, this is Marketplace. In Los Angeles, I'm Kyle Rizdall. It is Friday today, everybody, the 6th of September. Good as always to have you along. Jobs are where we're going to start. Jobs will probably be where we end, maybe with a detour into the Fed, somewhere in the middle, I don't know.

Maybe something else if it comes to mind. Rachel Siegel is at the Washington Post. Lynette Lopez is at Business Insider. Hey, you two. Hi, Kyle. Lynette, let me start with you. The July jobs report, sorry, yeah, no, August jobs report. Hello?

Come on, I've been off for three days. 4.2% on the unemployment rate, 142,000 new jobs. Is it cooling nicely, the American labor market, or is it cooling too fast? I think it's cooling nicely, in part because we're still seeing wage growth that is out pacing the rate right inflation. So we're still seeing 3. something, I think it was 2% wage growth. So that's nice. We're slowing, but we're not screeching to a halt. And we're still seeing robust hours worked. You know, yeah, we had to revise down the last couple of months, but there's nothing that says,

help recession coming. We're still seeing a solid job market. Okay. Rachel, here comes a detour into the Fed. Everybody's banking it. Well, not everybody. Talk before this morning had been, it's going to be probably 25 basis points, a quarter of a percentage point.

Now it's, you know, half the people who guess at these sort of things professionally are saying it might be, you know, 50 basis points, a whole half a percentage point. If they go to half, does that imply panic to you? Definitely. And that would be the point of a 50 basis point cut. You know, the Fed has other ways of getting to that scale. They can issue two 25 basis point cuts the next couple of months and get to that same place.

But a stronger cut just in two weeks would signal something much more serious, would signal this deep-seated worry that they have about the job market and that that's a signal they want to get out and really put out there as aggressively as possible. That generally is not the Fed's way of going about things. They prefer to be more steady, more measured, move more slowly. But if they decide that actually they need to send a little bit more of a siren, that's exactly the way that they would do it. Lynette, do you think they have a siren in mind?

I mean, look, they were late in the beginning of inflation, right? They missed it by, you know, a meeting or two or three or four. Maybe they don't wanna mess around on the back end? I think, you know, nobody wants panic. Yeah. You know, what we're seeing in the markets today is already the markets kind of reacting

to what's about to happen and to the idea of a slowdown and All of this is being communicated very clearly not just in the United States, but globally so I don't think The 50 basis point would say kind of would kind of admit Okay This has gotten out of our hands in a way that the Fed had to admit when it started its hiking cycle They had to say okay okay, we're way behind. But it doesn't necessarily seem to be the case here at all. Let me ask you, Ashley, since you mentioned the markets, which today were down again,

and it's been a rough week, they do seem a little skittish, a little jittery. And I guess why, given that the fundamentals really don't reflect what is going on in the equities markets? Well, the equities markets were screaming up because despite the fact that we had higher interest rates, the economy was, and the jobs market were still booming. And now it looks like the economy is slowing down and the stock market is repricing. So I don't think it should be that shocking that as the economy slows and we kind of again try to find this neutral normal growth cycle that stocks start to think, okay, where is money really going to be flowing in an economy that is not as hot and not as strange? Because remember,

before things were hot, things were weird. And before things were weird, we were getting out of the financial crisis. So this is like a whole new normal that the market hasn't understood for the last 14, 15 years. And I think the stock market is reflecting that confusion. Rachel, I heard you're there in the middle of that talk, talk more about why the whole, you know, transition from strange to not hot is, is a thing that everybody's sort of like, I don't know what's going on, man. No. And I was talking to someone today and we were sort of observing that we still are in

this murky period where it feels like officials are saying, well, the next report will be more clarifying. And then we get to that next report. Right. Yes. And then it's the one after that. You know, this August jobs report was supposed to be really important and supposed to clarify whether July was the marker of the slowing market or that it was more of a one-off. And somehow we didn't really get a clear answer. We all kind of read the report and

called around and it was like, well, and the officials were talking today and they still didn't really come down one way or the other. And that just sort of kicks the ball down the road. And then we'll get to the September meeting and Powell will, as he has wanted to do, leave the door open for future decisions. This is just kind of the mode that I think we're very used to, but it doesn't come with a whole lot of answers in the meantime. Yeah, no, I think that's totally right. Lynette, talk to me for a second about the revisions on the jobs and I think it was like

86,000 revisions downward over the past couple of months. Lots of hay has been made of that, I think, in the last eight-ish hours since the report came out, whatever it is. You worried about that, downward revisions? I mean, yeah, we're worried about the slowing jobs market in general, but I still don't think that we're seeing an economy or job market where we're seeing a ton of layoffs that are material. And the unemployment rate is still relatively low and we're still seeing wage growth and we're seeing people rejoin the

labor supply. So this is not like a labor market that looks sick, it's a labor market that looks weird. And I think that's something that we should expect after kind of turning the economy off and then turning it back on again. There's really no precedent for what we're dealing with. And there are all these different indicators like the Psalm rule or the inverted curve or whatever you want.

But these are all just statistical ways of reading the economy, and there are lies, damn lies, and statistics. This is a very strange situation, so we can't tether ourselves to any of those things. We have to look at the picture holistically. When we look at it, we still see low unemployment rate, we still see healthy jobs market, we still see wages increasing, and we see inflation going down. Directionally,

it's what we want. Rachel, I am loathe to do this, but I'm going to end by asking you about the vibes, because sort of what Lynette just said was there's data, but vibes, man. Yes or no? Yeah, Kai, we can't have a conversation without talking about the vibes. You know, the vibes I feel like are a little, what would the right word be? Almost like a little wait and see question mark, which is the position we've been in. The vibes could be good just depending on all of the data points that Lynette just lined out, but there's all this criticism mounting on the Fed that they're falling behind yet again and that they're going to be too late and that the job market can weaken really

fast, which puts a cloud over what could otherwise be a pretty positive report. Rachel Siegel at the Washington Post, Lynette Lopez at Insider thanks you two. Thanks, Kai. Have a nice weekend. On Wall Street today, as Lynette was talking about, a little jittery, we'll have the details when we do the numbers. So as we were just talking about that, jobs report was a bit of a mixed bag this morning. Decent, but not great number of jobs created. Unemployment did go down.

Do not sleep, however, on the key money in people's pockets data point. Lynette was talking about this. Average hourly earnings were up 4.10% last month, which was a bigger gain than July and more than people had been expecting. And workers were clocking into the office a bit more last month, which was a bigger gain than July and more than people had been expecting. And workers were clocking into the office a bit more last month, with the average work week up a tenth of an hour. Yes, that extra six minutes. Marketplace's Mitchell Hartman is on that one.

Honestly, what's not to like in the earning power section of this jobs report? American workers got a dollar and 30 cent pay bump on average compared to what they were making a year ago to 35.21 an hour. Jane Oates is a policy analyst at Working Nation. I think it's great. Year over year we've seen about a 3.8% increase in overall wages. Keep in mind, inflation is running under 3% a year now, so real earnings, the purchasing power of workers take home pay after rising prices, continue to improve. But remember, rising wages weren't always considered such a good thing in this economy. Two years ago, when wages were climbing at 6% a year, Fed policymakers worried it was helping to drive price inflation higher.

And now? This should be satisfying to the Fed, looking at their 2% inflation rate. Dean Baker at the Center for Economic and Policy Research says the key is the strong productivity of American workers, lately growing at more than 2%. I was a bit confused, so I asked him to explain. If we're producing 2% more an hour, we're paying, let's say, 4% higher wages, then the cost per unit is only rising by 2%, which, presumably, that gets passed on in prices, that's 2% inflation. But these higher wages don't necessarily feel all that great, says Sophia Baig at polling

firm Morning Consult. Sophia Baig, Morning Consult Consumers are reporting softening feelings about the economy when it comes to the current purchasing power and the current personal finances. Matthew Doerr Especially consumers who've been pushed to the limit by higher prices. Sophia Baig Middle and low income consumers have had a drawdown in their savings, whereas high income consumers, their stock of savings has been increasing.

Mitchell Hartman Higher wages, more savings, plus investment gains, that's what really makes consumer sentiment and spending sing. I'm Mitchell Hartman for Marketplace. The time has come with the waning days of summer to bring our summer series, My Analog Life to an end, snapshots of how technology has changed our jobs. Three stories through the show today of analog jobs from three of our regulars. First up is Gretchen Blau. She's a customs broker at Logistics Plus in Erie, PA. I started at Logistics Plus 16, 17 years ago.

We started doing customs brokerage about 11 years ago. documents to look at, we would fax them. We'd have to print out the file, then we'd have to scan it into the fax, and then send the fax. So it's a little bit cumbersome when you have to do it that way. I had one port where I went to fax something and I said, well, I put on the cover sheet, no, you're not supposed to have a cover sheet. We have too big a volume. We can't do the cover sheet. Okay, fine. So how do I know that you got the fax? I'm just calling it confer...

Well, you have to look at the readout on your fax machine. Which, okay, that's cool, but I know it's sent properly. I know it says that it received properly, but did someone in your office lose it from getting from the fax machine to your desk? What's different now in terms of filing any kind of paperwork with Customs is it's stored in our system. We just do a couple clicks and indicate which files we want to upload. We hit a button and then we get a verification in our email. We're not using faxes at all if we can avoid it.

We always ask people to email the documents or we will email the documents to them just because it's so cumbersome and we don't have a dedicated fax machine anymore. just because it's so cumbersome. And we don't have a dedicated fax machine anymore. Gretchen Blau, Logistics Plus, eerie P.A. is where she is. More analog memories from marketplace regulars in just a little bit. Coming up. The beginning of my career and probably my retirement will occur in the same city.

Got to be consistent, right? First though, let's do the numbers. Yeah, the wah-wahs. Maybe for the week too. It was a weird weird week down dust rose off 410 points 1% 40,000 345 for the blue chips Nasdaq off 436 points 2 and 6 10th percent finished at 16,000 690 S&P 500 gave back 94 points about 1.7 percent ended things at 54 and 8. For the week the Dow lost 2.7% the NASDAQ dropped 5 and 8 tenths percent the S&P 500 down 4 and a quarter percent. I will note

here that today is national 401k day. Do not repeat do not check your 401k on days like this. Mitchell was talking about today's jobs report. Here are some healthcare stocks which did add jobs in the last month. Tenant Healthcare Corporation down 5.3%. Johnson & Johnson down 4.0%. Abbott Labs up 7.0%. You're listening to Marketplace. Some of the toughest moments we'll experience in life often come with the hardest financial decisions.

Like how much to spend when your pet is dying. Or what to do if you uncover a loved one's financial secrets after they've passed. It's like having this albatross, this monkey on your back that you don't want amongst everything else. I'm Rima Grace, host of This Is Uncomfortable, a podcast from Marketplace. This season, we've got a wide range of stories about life and how money messes with it, including the unexpected ways money can shape our journeys through loss and grief. Listen to This Is Uncomfortable wherever you get your podcasts. This is Marketplace.

I'm Kyle Rizdall. Mortgage rates as we approach the ever more anticipated Fed interest rate cut in a couple of weeks, have fallen pretty sharply. Freddie Mac has the average on a 30-year fixed right around 6.35 percent, that's as of yesterday, and it's about a percentage point and a half below where it was not even a year ago. It does still, yes, put a home out of reach for would-be buyers, most of them anyway, but the thing about real estate is that it just ain't done the way it used to be. Here is the next Marketplace Regulars, installment of our series, My Analog Life.

I've been in real estate since October of 1998. What was interesting about real estate back then is the internet was still in its infant stages. So, people weren't constantly surfing real estate websites. You would get these home notebooks, you would find the new listings, and then you would go look at them on behalf of your clients. If there was very strong interest, you would get, I'm laughing thinking about this, get a disposable camera where you could take photos, then hustle off to the one hour photo lab and take it from there. We actually would have to, in many cases, go present an offer to the listing agent,

which as a rookie was just flat out terrifying to me. It's one thing to present a stinker of an offer over the phone and just say, hey, do your best to having the agent look over the pages with us like, where in their eye? And you're like, well, okay. Ha ha ha. When I started in the late 90s, establishing a name and a presence

in a city of about 70,000, the way we did it back then was consistency. Print advertising, television commercials, billboards. And as print advertising has gone, agents are trying to become real estate influencers. That fascinates me. And I am so happy to be on this end of my career. Mindy Palmer, through In Real Estate, in Missoula, Montana.

One more installment coming up in a sec. This is going to sound maybe a little counterintuitive, but you know what the biggest problem is for some of those big government programs? Not the established ones like Social Security or Medicare, but the newer ones. I'm thinking here specifically about the Inflation Reduction Act, which has been law now for about two years and had almost $370 billion in it for everything from solar farm projects to that heat pump that your neighbor just installed. Anyway, you know what the biggest challenge has been?

Actually getting the money out the door. In those two years, states and consumers have claimed about 7% of available money. Seven. That's according to a report from the sustainability think tank RMI. And as Marketplace's Kelly Wells reports, some states have been doing a whole lot better than others have. Louisiana and West Virginia are bringing up the rear, each claiming less than 1% of their potential IRA dollars. At the top of the leaderboard are Connecticut, New Mexico, Tennessee, and Georgia. They each secured more than 13% of potential funding.

But the number one spot belongs to Nevada, and it is running away in this race. The state has already claimed 54% of its potential funding. I was impressed to see that data as well. Dwayne McClinton directs the Nevada governor's office of energy. He says his boss, Republican governor Joe Lombardo, is interested in the energy security that comes with dirtier sources like gas, at least more interested than his Democratic predecessor. But his office is all for clean energy too and the funding that comes with it. If there's a benefit to Nevadans or a benefit to your residents, why not take advantage of it and

let's not let politics get in the way of that. That seems to be the thinking in a lot of states. The highest per capita clean energy investments last year were in Wyoming, Nevada, West Virginia, Arizona, Texas, Louisiana. None of them Democratic strongholds. We see a strong interest in clean energy projects coming from Republican governors all over the place. RMI Senior Principal Jacob Corvade co-authored the report. He says some states are playing catch up. Places that haven't done as much historically have a bigger opportunity.

Wyoming, Georgia, Nevada showing up as places that have already secured in some cases a lot of good work, but also places that have a lot of potential for what's needing to happen. His other finding, the states leading the pack right now are the ones that have gotten the biggest, most expensive projects approved. A lot of the money that's flowed in a big way so far has been support for large, clean manufacturing projects or just large scale energy projects. So for example, the subsidy estate gets when its residents buy EVs trickles in a couple

thousand dollars at a time. Whereas like one major manufacturing project comes in or one major utility overhaul comes in and you've got a huge chunk of cash dropping at once. That's likely what's happening in Connecticut, says Jason Velasquez. He's the climate, energy, and justice policy associate at a nonprofit called the Acadia Center. And he says Connecticut has secured several IRA awards, but the big one is a plan for an interstate freight corridor lined with EV chargers. Given that the transportation sector is our largest emitter in the state, having that is a really,

really big push for us. Velasquez also says Connecticut is an early leader because the state had several plans ready to go when the IRA funding became available. A lot of these programs and policies were already sort of being either passed through legislation or being supported through budgetary means, but having the supplemental capacity of the IRA really just boosts some of those efforts. Now, obviously, there are only so many big-ticket projects, so the laggards could start catching up as the early leaders turn to the slow-trickling funding, the heat pump and EV adoption tax credits.

But Jacob Corvade says that gap will only close if the lagging states start playing the game. Or are we going to see sort of winners and losers emerging depending on who managed to secure both the large projects and a broad adoption of these technologies? We're two years in, which means the IRA's got eight to go. States that want funding for carbon capture, energy efficient homes, and clean vehicles have until 2032 to apply for it. Presuming the next administration continues to support it. I'm Kaylee Wells for Marketplace.

Last up on our trip down my analog life memory lane, Last up on our trip down my analog life memory lane to hear about the once upon a time of our jobs today. We've called our regular banking person Lori Stewart. She's the CEO and president of Sound Community Bank up in Seattle, Washington. I am happy to share with you that I have been a banker since I was a freshman in college going to the University of Washington, right here in Seattle. The beginning of my career and probably my retirement

will occur in the same city. I started in the bank in the beginning of the year in 1968. When I think about how the role of a teller has changed, there's only about one constant over the years, and that's that there's still money, cash money involved. But other than that, it's really different. Much of my job involved people bringing their passbooks in, and we had ledger cards, which nobody probably even

knows what a ledger card is, but a stiff card that would fit in this great big posting machine that had the record of the individual passbook. And so you'd put the ledger card in the machine and you put the passbook in the machine and you post. Did they make a deposit or did they make a withdrawal or did they get some cash? Those days are totally gone. I do miss those customer interactions. We're all so busy now. Customers will text me as soon as much as call me

or stop in to see me. So it's less personal and connected. But I don't miss any of that other stuff. I don't miss posting in those passbooks or putting maker encoding on the bottom of checks so they could run through the system. We don't even clear checks now, they stop. We just send an electronic image,

so I don't miss any of that stuff. Also, checks? Lori Stewart, community banker, So I don't miss any of that stuff. Also checks? Lori Stewart, community banker, starting and likely ending her career in that same city. That's it for this series now, but if you do want to tell us about your job, analog or otherwise, write to us, woodjumarketplace.org slash my economy is where you do that. This final note on the way out today, I do not want to be that guy, but it is kind of my job.

The jobs report this morning, the unemployment rate falling to 4.2 from 4.3 percent. If you take it out to the next decimal place, which some of us do, in July unemployment was 4.25%, August was 4.22. Rounding matters, people. Rounding matters. Our theme music was composed by B.J. Liederman, Marketplace's executive producer is Nancy Fargolli, Donna Tam is the executive editor, and Neil Scarborough is the vice president and general manager. I'm Kyle Rizdahl. Have yourselves a great weekend, everybody. We will see you back here on Monday. All right? This is APM. Hi, this is Emily from Paxton, Nebraska. I live in a rural area where the written

local news has been outsourced to a bigger city and the local newscast is not very good. I enjoy listening to Marketplace programs because they are informative and thought provoking. I learn about things, places and people that I would not have found anywhere else. I am so grateful for Marketplace's dedication to bringing the news to the people.

Join me in supporting Marketplace with a gift today. Go to marketplace.org slash donate and thank you.