Marketplace - Cyclical, secular, seasonal

Episode Date: December 6, 2024

Federal employment numbers come out Friday, so we’ve got a labor-packed episode. First up, job growth in evergreen or “secular” industries is strong (think health care) while cyclical jobs (think manufacturing) have been stagnant. Then, wage gains are outpacing inflation, but some workers aren’t feelin’ it. We’ll also hear from seasonal employees in Vermont and a mall manager in Montana who’s moving on.

Jobs. That's it. That's the open. From American Public Media, this is Marketplace. In Los Angeles, I'm Kai Rizdall. It is Thursday, today the 5th of December. Good as always to have you along, everybody. It is a labor market trifecta this week. We had the job openings and labor turnover survey on Tuesday, ADP's private sector jobs report yesterday, and the government's official unemployment tally for November comes tomorrow.

And there will be the headline data for sure, the unemployment rate and jobs created. But it's going to be important to pay attention to the kinds of jobs being created too. Because as Marketplace's Justin Ho reports, the kinds of jobs this economy is generating and the kind it isn't can tell us a whole bunch about this economy. One way to think about the labor market is to break it up into two categories. Jobs and sectors that ebb and flow with the cycles of the economy, call them cyclical jobs, and jobs and sectors that kind of do their own thing. Kathy Bostjancic, chief economist at Nationwide, calls those jobs secular.

There is some sensitivity, but they are less sensitive to changes, short-term changes in the economy than the very cyclical sectors would be. Bostjancic says a good example of jobs in a secular sector are health care jobs. Those tend to reflect how much demand there is for health care, as opposed to how fast the economy is growing. People are aging. So whether we're in a booming economy or a recession, there's still going to be a certain level of demand people require when they're older for health care.

Jobs in secular sectors, including health care, education, and government, have accounted for a big share of the job gains over the last year. Daniel Jow, lead economist at Glassdoor, says that's not necessarily bad. To some extent, jobs growth is jobs growth, and more Americans being able to find jobs and earn an income at work is fundamentally a good thing. But one concern Zhao says is what can happen if those secular trends change. For instance, he says education jobs are still catching up from a big downturn during the

pandemic. That also suggests that that growth can't just keep going on forever. What happens when we do finally catch up or what happens when funding for school systems or local governments dries up. Meanwhile, cyclical jobs, the ones that are more connected to the broader economy, including manufacturing, construction and retail, those have basically been stagnant this year, says Guy Berger, director of economic research at the Burning Glass Institute. Right now, with monetary policy squeezing the economy at least a little,

these sectors, you know, in general, aren't generating the bulk of job gains. And Berger says jobs in those cyclical sectors could take a hit if the economy were to turn south. I'm Justin Ho from Marketplace. One of the other things to keep an eye on tomorrow is wages. Year over year wage growth has been give or take 4% for about a year now. November is expected to come in right near that, maybe down just a hair. But you remember that ADP private sector data I mentioned setting up Justin's story? They said this week that wages were up 4.8% for people who stayed in the same job. That's its first uptick in more than two years.

Marketplace's Mitchell Hartman is on that one for us. Three years ago, the wage picture was great for workers, not so great for the economy. With severe labor shortages, workers had tons of bargaining power, says Dean Baker at the Center for Economic and Policy Research. With wage growth over 6%, you can't have that without pretty high inflation. You had to see wage growth come down down and that's what happened. 4 percent is pretty much the sweet spot says Baker because as workers get more productive with AI and automation and better training employers can afford to give out 4 percent raises without jacking up their prices too much. Wages after

accounting for inflation have been rising since last year, but in a recent bank rate survey, a majority of workers said their incomes aren't keeping up with household expenses, says analyst Mark Hamrick. Mark Hamrick, Analyst, Bank of America People lost buying power through a couple of years of outsized increases in prices. And so when we were talking about wages rising above the pace of inflation, we're really talking about sort of recapturing lost buying power. 61% of workers say they got a raise in the past year. Pretty decent, except it leaves nearly 40% who didn't.

There is a kind of underclass of workers here. The federal minimum wage hasn't been increased for many, many years. Meanwhile, the cost of working is going up, says Marshall Cohen at research firm Cercana. More employees having to go back to the office and headquarter locations, they're going to have to have lunches out and buy some new wardrobe. But with unemployment low and skilled labor in short supply, workers' leverage to get higher wages is likely to stay strong into 2025.

I'm Mitchell Hartman for Marketplace. On Wall Street on this Thursday, not a lot of mojo. We'll have the details when we do the numbers. You might have heard, Bitcoin had a bit of a moment last night. The granddaddy of cryptocurrencies crossed the $100,000 mark, a record high, needless to say. It has settled back just a little bit today, but clearly, Bitcoiners are enthusiastic about a crypto-friendly Trump administration. And those rising Bitcoin prices are very good news for Bitcoin miners, of course.

The companies with souped up computers, they keep that whole blockchain thing going. The catch is what is good for those miners maybe is not so good for our environmental goals. Marketplace's Matt Levin has more on that one. Not surprisingly, Bitcoin miners get paid in Bitcoin. So when the price of Bitcoin shoots up 40 grand like it has since April, Bitcoin mining giant Mara Holdings makes more money, at least for a while. Fred Teal is Mara Holdings' CEO.

There's this period of bull run, as the industry calls it, where miners can make a lot of money because price is running much faster than miners' ability to add capacity. Eventually, other Bitcoin miners plug more and more of their machines into the grid to chase digital gold and teal as more competition. But generally speaking, he expects the good mining times to last, partly thanks to President-elect Trump. He wants the U.S. to be the biggest country relative to Bitcoin mining, and he wants to make sure that Bitcoin miners have

equal and fair access to energy. Bitcoin mining consumes a lot of electricity, more than the entire country of Poland in a given year. Liz Moran at the environmental advocacy group Earthjustice says crypto mining is reinvigorating fossil fuel energy sources. In some parts of the country, it's taking online gas plants that have actually been shuttered and bringing them back online just for the purposes of cryptocurrency mining. Bitcoin mining isn't the only new technology though that's putting a new and significant

strain on energy grids. Artificial intelligence companies are now competing with Bitcoin miners for the same electricity sources to power their massive data centers. Blockchain Association CEO Kristin Smith says so far, crypto has gotten more political pushback. I don't think that we've seen that same level of scrutiny with AI. I certainly think it will probably ramp up as it gets bigger. She says the real solution is to add more clean energy sources to the grid in the first place. I'm Matt Levin for Marketplace. We turn now from Bitcoin to something a little more traditional, the good old fashioned shopping

mall. Alana Furko is the manager of the Butte Plaza Mall in Butte, Montana, and we have been talking to her for years through the ups and downs of retail in this economy. Alana Furko, it has been a long time. Hi, it has been too long, hasn't it? How are you, how have you been?

It's been like a year plus. It has been a while, you know, lots of going on, lots of good things, lots of changes. Well, so let's talk changes here. You're selling the mall, the mall is being sold, developed, what's going on? The mall sold in May. We had developers buy the mall in May and they've got some great plans. They did stress business as usual to get us through fourth quarter because this is the money time for our businesses and there's no way we wanted to impact that. So yeah, a lot of lasts that we're experiencing, you know, all the feels are out there but change is good and we're okay.

Sometimes good things fall apart so better things can fall together. Tell me how this sale happened. You had something to do with it? Well, years ago, I bumped into a nice fella in my back parking lot and he was getting into retail leasing and we just stayed connected over the years and it got to the point where it was it was too evident that we needed some change around here and it was good timing for them and obviously good timing for us. Yeah we've talked about the challenges of the Butte Plaza Mall. What is going to happen to it? How are they going to revitalize it?

Well, it's very exciting. They're actually going to de-mall the North Department Store, the Herberger's Department Store. What does that even mean? That means they're going to knock it down and bulldoze it. They're going to clear a wider footprint for a grocery store. Oh. That's smart.

And we need a grocery store. Oh that's smart. We need a grocery store. Yeah. You always want to plant a necessity so that people have a reason to need to come to the property, right? Yeah. And groceries is the number one. Can we talk about you for a minute? Last time you were on, which again was a year plus ago, you know you shared that you were getting up there and you've been at the mall for a long time and how much longer are you going to be there, do you think? Is this sale going to be it for you, do you think? They have been so amazing and gracious.

They understand that my 40th anniversary will be February 1 of 2025. And they have been so gracious to let me be a part of this until that time. And maybe I'll stay on for phase one, which is demolition. I'm 60 now. I've got eight grandkids and more chapters to write. So I think my energy is just, it's pretty much spent. Yeah, yeah. You know, it's pretty much spent. Yeah, yeah, you know, it's funny, you sound positive. I was ready for you to be sad and a little wistful about leaving them all. And maybe you are a little bit, but it's okay?

You know what? It's okay. This place has been good to me. And I have loved this building because I've loved the people inside of it. But it's okay. It's time to change. And I think that means it's okay for me to change a little bit too right yeah so lots of good things ahead for all of us before I let you go we have to get to the business of it how was Black Friday the holiday shopping season as we talked about at the beginning the fourth quarter is biggie for you guys it is and I know nationally they call it Black

Friday we call it Golden Friday. And it was amazing. Everybody hit their numbers. We had a couple stores that say it was their biggest ever. We had a great weekend. Of course we have our winter market. A lot of vendors in the winter market, everybody realized this is the last of it and they all want to be part of it. Lots of smiley faces, lots of hugs, yes some tears.

But it's okay, it's all good. It is all good. Here I go again, it is, it's all good. We all move forward together. Alana Furko has been on this program for, well we looked it up. We think it's at least 10 years, maybe more. She's the manager of the Butte Plaza Mall till February. Alana, thank you so much. It's been lovely getting to know you.

It has been, Cly. And thank you and to your team. You've got the best team. I do. I appreciate all that you've done in helping us share our story and all of your listeners for their good wishes and reaching out to us as well. Be good. We'll talk to you soon. Take care. It's an air conditioning unit that can run in reverse and make heat too. Modern technology, am I right?

First though, let's do the numbers. Dow Industrial is down 248 today, 6 tenths percent, 44,765. The NASDAQ gave back 34 points, about two tenths percent, 19,700. The S&P 500 down 11 points also 2 10ths percent 6075 a federal judge in Texas rejected a proposed plea deal between Boeing and the Justice Department relating to the two fatal crashes Involving those Boeing 737s the judge cited the diversity equity and inclusion considerations imposed on hiring an outside monitor To oversee Boeing's future legal compliance Boeing dipped 1% on that we heard from at 11 about bitcoins record rise above $100,000 Coinbase down 3 and a 10th percent Bitcoin miner riot platforms down 4.9 percent today

Mitchell Hartman wage growth was his story today looking at some payroll stocks ADP shed 6 tenths percent Paychecks with an X paychecks like a the cereal. Lost one and a 10th percent. Trinet group up six tenths percent. Bond prices went up too. The yield on the 10-year T-note fell to 4.18%. You're listening to Marketplace. Understanding personal finance can feel like an impossible task, but it doesn't have to be that way. I'm Janelia Espinal, and on Financially Inclined,

I'll guide you through simple money lessons that will change your financial future. Learn about credit scores, how to avoid scams, and why you need a savings account. Plus, we explore the brain science behind FOMO and what you can do to make smarter money decisions. Listen to Financially Inclined wherever you get your podcasts. Hey, this is Kimberly Adams, co-host of Make Me Smart. Listen up because for this week only, we are offering all Marketplace merchandise at a discount. So you can snag our popular

Marketplace sweatshirt for just $8 a month. Or maybe you and the investor in your life could use some matching glass mugs that's only $5 a month. We're even offering our brand new Merino wool socks featuring Kai, David and yours truly for a one-time gift of $15. These deals won't last long. It's our way of thanking you for getting your year in donation in a little bit early. This offer expires at midnight on Friday. So don't wait. Get yours now at marketplace.org slash donate. Money, money, money. Kids always have questions about it.

And maybe you do, money. Kids always have questions about it, and maybe you do too. That's why Million Bazillion, the webby winning podcast from Marketplace is here to answer the awkward and sometimes surprising questions your kids have about money. We explain concepts like savings accounts, retirement, and the differences between brand names and non-brand names. Million Bazillion is the place for you and your kids to learn about money together.

We help dollars make more sense. Get it? Listen to Million Bazillion wherever you get your podcasts. This is Marketplace. I'm Kyle Rizdal. As I mentioned up at the top of the program, we're going to get the November unemployment report tomorrow morning. Among all the industry by industry breakdowns,

keep your eye on retail, which typically staffs up this time of year for the holiday shopping rush, which means lots of workers taking on temporary seasonal jobs in all those stores and warehouses. Marketplace's Henriette visited one Vermont company where seasonal workers are oh so essential. Dakin Farm in Ferrisburg, Vermont makes gift boxes full of food products from New England.

The most popular, says owner Sam Cutting, are the breakfast boxes. And the basic breakfast would be pure Vermont maple syrup, pancake mix, and cop smoked bacon. There are two retail stores, but the bulk of the business is shipping gift boxes across the country. And the vast majority of those, Cuttings says, are ordered and shipped right now in the weeks leading up to Christmas. We've got two weeks to ship basically 40,000 packages. And so in order to do that,

we bring in about 120 seasonal workers and we're just moving packages all over the place. In the packing room on the second floor of a renovated barn, those seasonal workers pull cheeses and meats from refrigerators, jams and honey from shelves and get them into boxes which get pushed down a conveyor belt. We're always busy. We're Santa's little elves. Jack Pilla has been working here seasonally for 40 years. He keeps coming back, in part, he says, because it's a reliable chunk of income to supplement other work he does the rest of the year. I've got multiple jobs.

I'm a running coach. I am a landscaper, a carpenter. I've always been self-employed, so this can fit into my schedule. Pay starts at $18 an hour, more for returning employees. Most workers here also have other seasonal jobs the rest of the year. The rate of people working multiple jobs has long been higher in Vermont than the national average according to the Census Bureau. But some are here after losing work like 25 year old Max Raddy Bicknell.

Well I was a bartender and a brewer and I'm hopefully going to get back into that but the restaurant that I worked at closed about a month ago. He'd worked seasonally at Deakin for the past six winters so he knew he could come back and he brought some of his former restaurant co-workers with him. We were all kind of talking, you know, having our shift drinks at the end of the night. It's like, all right, what are we going to do next? And I was like, if I can go work at Dakin. He's like, OK, sure.

Great. We don't have a minimum number of shifts or a maximum number of shifts. Trisha Cole is the company's bookkeeper and HR manager. Employees, she says, can sign up for as many shifts as they want. And the number of shifts available goes up a lot over the next two weeks. This Saturday will be our first weekend and then starting next Monday, the ninth is when we'll start night shifts. Flexibility is part of what keeps Diane Marcott coming back for 37 years now.

She works in the call center. If I need time off, they will give me that time off. If I want overtime, they'll give me overtime. But her favorite perk is the employee discount, 30%. And I order at Christmas time 20 pounds of bacon, 20 pounds of sausage, and about eight spiral hams. Those orders have given her a pretty strong familiarity with the company's catalog, which comes in handy on the phone.

When I talk with people, I think they can tell that I'm honestly talking to them about knowledge of the products too. So, yes. But I have to get back to work. Thank you for calling Deakin Farm. This is Diane. The company's expecting a rush of orders over the next week. Its seasonal workforce will stick around till early January.

In Ferrisburg, Vermont, I'm Henry App for Marketplace. Most of the talk of the clean energy transition centers on electric vehicles and solar panels, right? But there are some sleepers out there too, specifically heat pumps. They can warm your water and heat and cool your house, all while generating way less carbon than burning fossil fuels in a furnace or a boiler, which is good because heating and cooling where we live accounts for about 20%

of all of this country's carbon emissions. Except they're not really catching on. Heat pump investments in the United States, it turns out, are actually down slightly this year. Marketplace Kelly Wells explains why. Heat pumps are most popular in the South, but they've got some fans in places that get Maine in February cold. When it gets down to like 10 degrees or whatever, the heat pumps are sufficient for heating.

Nathan Wilcox didn't let the winters in Portland, Maine deter him from making the switch to heat pumps in 2022. He's giving the grand tour of his century old home, or rather, it's HVAC system. So we're outside. So that's the outside unit. So you can see the white tubes go up along the outside of the house, and then they go through the wall into where the various inside units are. In other words, it looks like the outside component of a central air conditioner, but

it hums in the dead of winter too. It's an air conditioning unit that can run in reverse and make heat too. Christian Agoulis is a mechanical engineer and president of a clean energy firm called PAE Engineers. Its job is to take heat from the inside and reject it outside. In the winter it just does the reverse and even when it's sub-freezing outside there is still heat that can get pumped into the house. Constant technical improvements mean heat pumps can extract heat from colder and colder air. Agoulis says they're effective down to 10 or 15 degrees below zero Fahrenheit. They run on electricity, which can come from renewables, and they're two to four times more efficient than,

say, a gas furnace. Gas furnaces generate heat and heat pumps transfer heat. And moving something takes less energy than making something. Heat pumps have taken off in Maine because gas furnaces aren't a great option there. Utilities didn't see much point in installing lots of gas pipelines for the state's spread out population. Instead, Maine depends on home heating oil more than any other state. And that stuff is not cheap. Right before Nathan Wilcox decided to install his heat pump, he got an eye-watering bill from his heating oil company. For $1,320.

And you can have to refill two to three times during the winter. So that was the wake-up call for us. Mainers are installing heat pumps three times faster than the national average. But outside the northeastern heat pump haven, wherever natural gas is more popular, the number of heat pumps shipped in the U.S. went down last year. There's a reason for that, says mechanical engineer Christian Agoulas. In some parts of the country, electricity is five times more expensive than natural gas. He lives in Northern California,

home to some of the highest electric bills in the country. At four times more efficient, it's still more expensive to run if your electricity rate is really high. The other problem, even when a homeowner is interested in investigating whether a heat pump might make sense, if it's February and the boiler goes out.

Ethan Elkind, UC Berkeley Center for Law, Energy, and the Environment, Inc. That's an emergency and they're not going to have the time to do the research on heat pumps. Ethan Elkind with UC Berkeley Center for Law, Energy, and the Environment says the contractor who comes to save the day might not even know how to install a heat pump. Then people aren't going to demand to get a heat pump and then they're not going to see the demand encourage more contractors to start selling heat pumps. Federal and state incentives promise thousands of dollars to the homeowners willing to make the switch to heat pumps,

unless president-elect Trump makes good on his promise to claw back that funding. I'm Kaylee Wells for Marketplace. This final note on the way out today in which you learn something new every day. The Chicago Tribune had a feature story today, various notables of the Windy City on how they spend their holidays, what's on their wish lists, things like that. For Federal Reserve Bank of Chicago President Austin Goolsbee, he would like 2% inflation, and a renewable membership to the Illinois Mycological Association, to which he apparently belongs.

Mycological, of or relating to the study of fungi. Mushrooms. Who knew? John Buckley, John Gordon, come on, we've had the guy on the show like a dozen times. Mushrooms. John Buckley, John Gordon, Noya Carr, Diantha Parker, Amanda Peacher, and Stephanie Seek

are the marketplace editing staff. Amir Bibaoui is the managing editor and I'm Kai Rizdal. We will see you tomorrow everybody. Music