Marketplace - Consumers were pessimistic before the war. Now what?

Episode Date: March 9, 2026

Consumer sentiment was already trending negative before the war in Iran started, a war that so far has precipitated climbing oil prices and geopolitical uncertainty. The question is, how much more pessimistic can U.S. consumers get? Also in this episode: Commodities prices surge, we give a brief history lesson on the oil crises of the 1970s, and supermarkets compete for a slice of the Lone Star State’s growing population.Every story has an economic angle. Want some in your inbox? Subscribe to our daily or weekly newsletter.Marketplace is more than a radio show. Check out our original reporting and financial literacy content at marketplace.org — and consider making an investment in our future.

The oil markets wake up to the war. From American public media, this is Marketplace. In Washington, I'm Kimberly Adams in for Kyra's doll. It's Monday, March 9th. Good to have you along. It's been a little more than a week since the U.S. attacked Iran, starting a war in the Middle East. And today, the oil markets finally seem to notice. The price for a barrel of Brent crude soared to over $100 before coming back down. We haven't seen this kind of shock to the system. since Russia invaded Ukraine in 2022. To help explain what all this means for the American consumer and the broader economy, we called up Catherine Rampel at MS Now and The Bullwork.

We hear from her on the occasional Friday. Catherine, good to speak with you on a Monday, a wild, wild Monday. Hey. A wild Monday. Thanks for having me, Kimberly. Yeah, so anybody who's driven by a gas station last week will have already seen the gas prices are up. How much of the impact from the war is already reflected in those prices that we're seeing at the pump and how much worse are they going to get? Well, it does depend, obviously, what happens with oil. And it has been a roller coaster in the last 24 hours, let's say, where, as you mentioned, oil had shot up.

I think touching as high as $119 a barrel and it's now left. I had looked anyway, it was below 90, in part because of things that, the oil. Donald Trump is saying, so he can move markets. Who knows? But at the very least, if there is a sustained disruption in this rate of Hormuz, you should expect gas prices to continue rising. And that's because at this point, the problem is not only that shifts tankers that would be carrying energy can't get through.

It's that the countries that are producing the oil are running out of places to store it, because they can't ship it out. So I had seen something earlier today suggesting that even if everything were to, you know, go back to normal today, right? If shipping lanes reopened and tankers could get through, it could take a couple of months before things actually normalized in terms of oil and natural gas, for that matter, being able to get back into production and shift around the world. So all of that suggests that there could be prolonged consequences at the pump and in other things that Americans buy. But again,

you know, lots of contingencies there depending on how long this thing lasts. You know, I mentioned 2022 earlier when we saw that big hike in oil prices after Russia invaded Ukraine. but in 2022, unemployment was super-duper low, and right now our economy isn't looking quite as strong, especially that jobs report last Friday. Do you think that we're going to feel this price shock differently than we did in 2022? There's certainly a lot more fragility in the economy. You mentioned the job market is looking weaker where we've lost jobs in six of the last 12 months, something like that. So there's weaknesses.

in the job market. We already have inflation still above target. That was the case, of course, in 2022 as well. But it has been a while now. So when you see a shock like this, there is the risk that it becomes somewhat self-perpetuating, that it's not just a one-time shock and that things go back to normal, but it feeds into higher inflation expectations. We haven't seen that yet, to be clear, but that is something that presumably the Federal Reserve is worried about. And I have seen economic analysts today and over the weekend bringing back the dreaded R word, you know, the risk of recession precisely because there are these frailties in the economy, the one sector that seems to be doing well that related to artificial intelligence and the data center

buildout and all of the economic activity related to that is also a little bit iffy. And there's a question of, you know, how much would it take to? knock us off course. And certainly, you know, it's, it's not a foregone conclusion, but having something like a big oil shock can disrupt the economy. I mean, it's already disrupting supply chains around the world. We saw the knock on consequences of something like that most recently during COVID. And so there are a lot of potential ripple effects that we haven't felt yet that when you have, you know, not the greatest foundation for the economy could be troubling and could lead to greater pain. Yeah, you really lay this out in your piece in the bulwark because there's a couple other commodities that are already feeling this.

Yes, absolutely. So it's not just oil, right? Oil, 20% of the world's oil normally transits through the street of Hormuz on Iran's southern coast, but there's a lot of other stuff too. A huge portion of the world's fertilizer or at least feedstock for the world's fertilizer, which is used to. to grow crops. That also goes through the straight, and that can lead to downstream higher costs for food prices. We're already seen crop prices, for example, fertilizer prices and crop prices, for that matter, get more expensive. Lots of other production happens in that area. So there's a lot of aluminum that is produced in cutter, and several different aluminum smelters have had to shut down, at least partially or perhaps entirely, because they're not getting enough energy, because liquefied natural gas is no longer able to transit.

So there are these, again, knock-on effects that happen. So it's not just about oil. It's not really just an oil crisis. It's an everything crisis, essentially, because you have energy that is used to ship things around the world, byproducts of oil production and refining, go into lots of other products. And so you can see these much broader effects.

all over the economy. Catherine Rampel at MS. Now and the bulwark. Thanks so much, Catherine. Thanks, Kimberly. Like we were saying, just a wild, wild day in the markets. We'll have the details when we did the numbers. For many folks, this situation, a major war involving the U.S., Israel and Israel's enemy, global oil prices spiking, domestic gasoline prices spiking, may feel a bit like deja vu. All this happened back in 1973 during the Yom Kippur War, and prices spiked again in 1979 after the Iranian Revolution. More than 50 years later, is the situation really analogous? And are there lessons to be learned from the past? We gave Marketplace's Mitchell Hartman today's history assignment. Roll the clock back to 1973.

Richard Nixon was president. The U.S. was then far and away the biggest economy in the world. And says Princeton historian Julian Zelizer. This is a culture after World War II built around automobiles, around highways, around driving, new suburban homes, which required a lot of heating. And a lot of oil, most of it pumped and shipped from the Middle East, which suddenly becomes a very big problem when OPEC declares an oil embargo on the U.S. and other allies of Israel. This triggers the first round of an oil crisis where Americans face long gas lines and high prices. There's a second crisis in 1979, when Iranian oil exports crater after Iran's Islamic Revolution. You can only buy gas certain days. People are siphoning off gas from people's cars.

There's just this air of desperation. There's also resolve to make the U.S. economy less vulnerable by reducing our dependence on foreign oil. The government encourages more fuel efficiency and more oil exploration. Fast forward to now, says climate economist Gernet Wagner at Columbia Business School. The world moved from the U.S. being the biggest oil importer to the U.S. being the biggest oil exporter. But there's a catch. Even with massive new U.S. oil fields, American businesses and consumers still paid the global market price. And yeah, those prices just shot up.

Which means a prolonged war that keeps oil prices high could still create conditions similar to the oil crises of the 1970s, driving higher inflation and stifling growth. I'm Mitchell Hartman for Marketplace. We got a new snapshot today of how the engines of this economy, consumers, are feeling about it, or at least how they felt before the war. The New York Fed published its survey of consumer expectations for February. this morning. The median expectation for inflation and where it's going to be one year from now,

3%. That's higher than the Fed's target, and it's similar to what consumers were expecting back in January. Views on the labor market were also relatively stable, with consumers expecting their earnings to grow in the year ahead by about 2.5%. Marketplaces Daniel Ackerman explains, this kind of so-called soft data can have real impacts on the economy. The fate of this economy depends largely on how consumers behave, says Joanne Schu of the University of Michigan. And what decades of research has shown is that consumer attitudes do influence what they decide to do with their money. For instance, last year when the Trump administration signaled that tariffs were coming, consumers worried prices would rise. And we saw a surge of purchasing and durables in cars during that time.

Sheu says if that kind of demand surge lasts long enough, it can put upward pressure on prices. and could make inflation a self-fulfilling prophecy. In February, consumers expected inflation to outpace wage growth by half a percentage point next year. But the survey was fielded just before the war in the Middle East began. Its effects should be apparent in next month's data, says Twan Nguyen, an economist with RSM. Something like an increase in oil prices or conflict in the middle is, it is immediately going to impact consumers' expectations. In fact, consumers are feeling the impact already, says Kayla Brun, an economist with

Morning Consult, which collects daily sentiment data from consumers. They've gotten gas over the past week, and they've already started to see higher prices. So just today, we saw a drop in sentiment. We saw that after Russia invaded Ukraine and oil prices jumped. But the consumer reaction then was short-lived, says Joanne Schu of the University of Michigan. As the war continued, consumers began to think more about. other factors in addition to the war in forming their economic expectations. She says the current war in the Middle East is still in its early days, so we don't yet know

if the negative consumer reaction will persist. I'm Daniel Ackerman for Marketplace. Consumer expectations also shape how willing folks are to splurge on big and little purchases, like maybe the newest viral culinary craze. Take, for example, a yam called Ube, with violet-colored Ube Lates, pastries, and even cocktails. According to the research firm Dat Essential, Ube appeared in three times as many restaurant menus in 2025 compared to 2021. Ilana Peng wrote about America's obsession with Ube and what it means for its supply chain in Bloomberg the other day.

Thanks for being here, Ilena. Of course. Thanks for having me. So tell me a little bit more about where and how Ube is grown. Yeah. Ube is largely grown in the Philippines. They're one of the world's biggest producers, and they have been growing it for centuries, both for indigenous populations, as well as for export. And now we're really seeing that global export market, both to the U.S. and Europe, boom quite a bit. What's behind the growth right now? There's really two main factors that are driving the popularity. And so the first one is obviously the color. Ube is like a bright purple room. And then the other factor I think that has been driving it is just a broader interest in Asian foods and in Southeast Asian flavors.

And when you're putting something like Ube into a sweet treat that tends to be an approachable way into a new cuisine. How much capacity is there in the Philippines or even elsewhere to kind of expand production to catch up with this growing demand? I'm told that there's actually quite a bit of capacity to expand production in terms of. of land in the Philippines, but really where they're struggling right now is actually being able to get more of the Ube crop into the ground. And so every single time you grow Ube, you basically have to save some of your old crop, but because a lot of the farms in the country are smaller operations, oftentimes they will sell the entire crop. And so the government has actually invested pretty heavily in encouraging farmers to replant. And in some provinces, the government has even been

buying back some of that raw Ube to ensure that there's enough for farmers to keep replanting and keep expanding production. So because we are talking about Asia, I have to ask about tariffs. As inconsistent as they are, how are the tariffs affecting the Ube supply chain? Yeah. Well, a lot of the Filipino Ube supply chain is absorbed domestically. I did speak to a chocolatier based in New York, who mentioned that some of the suppliers have actually stopped selling to the U.S. entirely. And so he's been sort of circumventing that by just making more business trips to establish direct relationships with farmers or like even bring back some of the Ube himself. How much of this, you know, growth in global demand and increase in purchasing of Ube,

especially these exports, how much of this is translating to the farmers themselves? Yeah, Ube farmers are definitely. in a good moment right now. And there are also both on like the private consultant side and also the government side, a push to make sure that more of that gets back to farmers. And there has also been a push among producers to try to get a geographical indicator for their Ube. And that would also help protect their livelihoods because it does seem that there is a bit of concern that eventually Ube production might shift to a larger country with more agricultural capital. to scale up that crop.

I feel like there have been so many food fads over the years taking one culture's food and often kind of westernizing it in a way that can affect even traditional consumers access to that food. And I'm thinking about things like quinoa and macha. How is Ube faring in this context? My understanding is that domestic supply is still pretty ample. And so most of the people I talked to were pretty happy to see. Ube getting more recognition.

I think the continual push there is just to make sure that the understanding of what it is isn't lost and that there continues to be a conversation about making sure that those profits do ultimately flow towards the farmer at the end of the day. Ilena Pange is a reporter for Bloomberg. Thanks so much, Ilena. Of course. Thank you again. Coming up. That's the experience you're having today in a Kroger,

It's a brand new store. It's a whole new world. But first, the numbers. Markets started the day way down because of all those factors Catherine and I were talking about at the top of the show, but ended up. The Dow Jones Industrial average gained 239 points, half a percent, to close at 47,740. The NASDAQ added 308 points, 1 and 4 tenths percent,

to finish at 22,695. And the S&P 500 picked up 55 points, 8. 10th of a percent to end at 6795. Looking at some gas station stocks, Murphy USA lost four tenths percent, Valero Energy dropped three and nine tenths. Phillips 66 Company fell one and eight tenths. Bonds rose, the yield on the 10-year T-note fell to 4.11 percent, and you're listening to Marketplace. This is Marketplace. I'm Kimberly Adams. Like Catherine said earlier, oil is hardly the only commodity whose price has jumped as the war in the Middle East enters its second week. The palm oil that makes your peanut butter smooth hit its highest price in more than a year.

Wheat is at its highest in almost two years. Soybeans and corn are up too. And even though we don't get those crops from the Middle East, the war is connected to all of those price increases. Marketplace's Kaylee Wells explains. There are two factors pushing commodity prices up. One is the price of oil. When you have crude oil jumping, biofuels become much more attractive.

And palm oil gets used for a lot of biodiesel, says David Ortega, who's a food economist at Michigan State University. And when palm oil gets more expensive... Then you have demand for vegetable oils increasing. That leads to rising prices. The other factor is fertilizer. Michael Delaberto teaches agricultural economics at Louisiana State University. The Middle East is a major production hub, as well as a distribution hub for those fertilizers. Roughly a third of the global fertilizer trade goes through the strait of Ormuz, which Iran has largely blocked. So fertilizer supplies down, demands the same, perfect recipe for a price spike.

That is really calm at probably the worst time for U.S. producers. Because here in the United States, it's planting season. right when farmers need fertilizer the most. The good news is these price spikes aren't going to affect your grocery bill for now. Delaberto says only about 15% of the price you pay at the supermarket is determined by the actual cost of the food. The rest is largely down to packaging, shipping, storage, all of which require energy. If there's any impact on food inflation, it's largely going to be because of energy prices. Joe Glauber is former chief economist at USDA.

He says the spike in oil that's making you heave big size at the gas station will hit grocery stores at some point. Transporting the goods, trucking everywhere, the refrigeration, you know, just running electricity. All those things are tied because of the energy increases. Unlike the gas station, Glauber says it could take months for price spikes to show up at the supermarket. I'm Kaylee Wells for Marketplace. Staying on the food beat, more and more new grocery stores are popping up in southern cities. That new construction is meeting pent-up demand after millions migrated to Sun Belt states like Arizona and Texas over the last several years. Dallas-Fort Worth is one of the most active markets at the moment, and the competition to win over customers is fierce.

Marketplace's Elizabeth Troval reports. Walking through this expansive new Kroger in North Fort Worth, there's not a cucumber or, or cereal box out of place. The super store opened last fall and has a higher-end feel. Local coffee chain Paxi Beneficia is selling lattes just inside the entrance near the fresh produce section. You can see that this is spacious A, and it is well lit. Bob Young helped develop this property for the real estate firm Whitesman. It's part of a wave of new grocery store construction happening in Texas, concentrated in Dallas,

Fort Worth. The boom is following rapid population growth from the last five to ten years. Grocers like H-Mart, H-Mart, H-E-B, and Costco are building to meet that pent-up demand. Development jumped. Can it be competitive? Yes. In Texas, the grocery wars are on. Rudy DiPetro is president of Kroger, Texas. We have a strong competitive set here in DFW, Walmart, H-EB, the Albertsons group has, you Tom Thumb, maybe the most competitive grocery retail dynamic in the country. He says they're running a new Texas playbook that leans into state pride. They're proud of the brands.

They want to support the brands locally here. Their flavors that they desire are different. And you can really feel the Texas in this new store. There's lots of Texas signage and products that give a local feel like t-shirts from the local high school teams. It reminds me and real estate developer Bob Young of one of Kroger's fiercest competitors, Texas's own H-E-B, which has such a dedicated customer base that when a new store comes to town, it's a big deal. And they have people camping out at night to go into their store. That's something. You talk about customer loyalty.

He says the H-E-B vibe in this Kroger is intentional. People that are close to winners or want to be a winner, watch what winners do. And that's the experience you're having today in a Kroger brand new store. Grocers aspired to be like H.E.B. Because its following in Texas is cult-like. Here it's Texas Pride, it's community.

And the branding, my God. Everything in that store is shaped like Texas. This French guy on TikTok recently commented on HB's use of Texas iconography in their stores. The chips, Texas-shaped, the cheese, Texas-shaped. They even have Texas-shaped pasta because apparently your digestive system won't recognize carbohydrate unless it looks like a map of the panhandle. H.E.B declined to be interviewed for this story, but they're also expanding their

North Texas footprint. Directly across the street from this shiny new Kroger, H.E.B. owns a vacant lot. One day, they will likely compete directly for Cussie. like Sharon Anderson, who I talk to in the Croker parking lot. So H.EB owns the property across the street. Do they? Do. Oh, come on, build it up because I drive all the way over to the one over there off a Keller.

Okay, so if that oat pops up, then you're going to probably not shop here. You would shop over there? It depends. It depends. I'd still hit it once in a while. And while these grocery rivalries may keep stores on their toes, it's customers like Anderson. who benefit. In Fort Worth, Texas,

I'm Elizabeth Troval for Marketplace. No time for a final today. Too much oil news. Amir Babawi, Caitlin Esh, John Gordon, Noia Carr, and Stephanie Seek are the Marketplace editing staff.

Kelly Silvera is the news director. And I'm Kimberly Adams. We'll see you tomorrow. This is APM. Hey, everyone, it's Rima Grace. And this week on my podcast, this is uncomfortable, I'm talking with someone a lot of us to grow up watching. Steve Burns from Blue's Clues.

Steve opens up about stumbling into the job in his early 20s and suddenly becoming a household name. But behind the scenes, things were more complicated, especially when it came to money and figuring out who he was outside the show. People knew Steve, the green stripy Steve. And I felt like green stripy Steve sort of ate Steve Burns. and there was no Steve Burns anymore. Be sure to catch my conversation with Steve on This is Uncomfortable, wherever you get your podcasts.