Marketplace - Giving up beer to pay for gas?

Episode Date: May 15, 2026

New consumer data shows alcohol sales were down over 5% in April. And, as you’ve probably noticed, gas prices were up. Is there any correlation? In this episode, why high fuel prices may exacerbate existing consumer trends — like cutting back on beer. Plus: Cerebras’ successful IPO signals hunger for AI stocks, Hollywood is buying more short stories, and we discuss the week’s economic headlines.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.

Wayfair's Victoria Day clearance is on. And right now at Wayfair, you can get up to 70% off everything home. Shop Wayfair's Victoria Day clearance. Now through May 25th at Wayfair.ca. Wayfair, every style, every home. Item number one, inflation. Need I say more? Item number two, Kevin, buddy, how's the new job?

Item three, you too can write a Hollywood story. from American public media. This is Marketplace. In Los Angeles, I'm Kai Rizzdahl. It is Friday. Today, this one is the 15th of May. Good as it always is to have you along, everybody. Lots to talk about not a whole lot of time. So here we go.

Stacey Vanek-Smith is at Bloomberg. Catherine Rampel is at MS now, also at the bulwark. Hey, you two. Hey, Kai, Kai. Catherine Rampel, test my premise here. Need we say more about inflation, the CPI and PPI this week? way higher than anybody wanted? Yeah, definitely higher than anybody wanted,

higher than the Fed wanted, higher than consumers wanted, higher than businesses wanted. And my fear is that it very well may get higher as the higher energy costs leach into basically everything else that we buy because energy goes into lots and lots of stuff out there and is used, of course, to transport goods around the world.

Stacey Vanek-Smith, newbie on the program in this role. Welcome. It's always good to have you. Thanks, guys. Absolutely. How worried ought we be? I think we should be pretty worried. I mean, obviously the big kind of headline for this inflation report was oil fuel, the trade of Hormuz fuels up 28%. But there was a lot of other stuff in there. It wasn't just oil pushing everything up. I mean, food prices are up, shelter prices are up. And for the first time, inflation is rising faster than wages, the first time this has happened in years. So that is, I think, a really troubling sign that it's not just oil causing the, causing prices to rise. Catherine, you and I spoke a number of weeks ago, I guess, about the bond market and how so far the bond market has been giving the Trump administration especially, but also just sort of the general economy at large kind of a pass.

and here we have now 30 years selling this week for 5% and certainly things looking a little in the bond market. Yeah, a little diceier. The last time that newly issued 30-year bonds sold at 5% or had interest rates of 5% was in 2007. So it's been a couple decades at this point since we were back there. And that is troubling for a number of reasons. One, of course, is that the higher the borrowing costs are for the U.S. government, the more painful, the existing unsustainable debt levels we have will be.

We will also likely see higher interest rates for various kinds of products, you know, financing products that consumers and businesses get, mortgages, car loans, credit cards, etc. That's all going to be painful. And then the real question is what does all of this mean for Mr. Kevin Warsh, who was recently confirmed as the Fed chair has promised to deliver lower interest rates? And the markets are signaling, no, we are not going to accept lower interest rates. We do not expect lower interest rates, as have the other members of the FOMC of the Fed, the committee that votes on interest rates. So all of these things are, you know, not terribly surprising, but certainly put the incoming Fed share in a very, very difficult position. Stacey, is the newest member of our little Friday gang here. You get the first whack of this question, and this one's always the toughest for a newbie. What is Kevin Warsh thinking in five words or less? In five words or less, I think Kevin Warsh is thinking, I'm glad there are 12.

Because there are 12 members of the Federal Reserve who vote. It's not just him. And Kevin Warsh, I think a lot of times people forget this, but only has one vote. In fact, Jerome Powell, who just stepped down as chair today, has as many votes next week as he did last week. So he has as much power now. And so Kevin Warsh, even if he does vote to cut interest rates and does tow the Trump administration's line, it doesn't necessarily mean interest rates will move because you've got to have a majority. So, look, Catherine, as long as we're talking about Kevin, which obviously we're always going to do, I should suppose I should say Chair Warsh, it is going to be a different Fed.

It's just the machinations will be different. The public posture will be different. Some of the internal dynamics will be different. Absolutely, yes. Kevin Warsh, among other things, when he went through this presumably grueling process to audition for the job and through his confirmation hearing, etc, talked about regime change, essentially, at the Fed, which is not just about interest rates, and it's not even just about the balance sheet, which is the thing that he probably cares more about based on his public statements. But he has also basically said that he doesn't think it's such a good idea for Fed officials to issue forward guidance, which is the fancy way of saying signaling to markets what they think they're going to do. So I think there's going to be a lot of changes coming to how these meetings operate, to how they are communicated. I do wonder if we're going

to continue having these monthly, these regular press conferences with the Fed Chair, which I don't know, I don't recall, you correct me if I'm wrong, I don't recall if Chair Warsh had indicated one way or the other whether you plan to cancel them. But it wouldn't surprise me if he at least scales them back, given some of the things that he has said about how he thinks there's too much you know like too much noise coming out of the Fed. He wants more like, I don't know if you exactly put it this way, but he wants more, you know, like knock down, drag out fights with the Fed board people voicing their disagreement, which is different than how the Fed has been run for decades.

It has been more of a very consensus-based operation where the Fed, chair, like it would have been unheard of to think of the Fed share dissenting, right, from the rest of the other, the 11 other members who get to vote on interest rates. The last time that happened was 1939 that there was a Fed share dissenting. So I think it's going to be a very different world. Stacey, 30 seconds. What do you think Warsh's first set of, say, meetings and consultations are going to be? Is it going to go to the hill and lay the political groundwork? Is it going to go to the White House?

what do you think? I think, I mean, Catherine makes a really great point. I think he, you know, he campaigned on wanting to change what the Fed does. I think his first order of business is going to have to be to kind of make some peace with the other Fed governors because he's, you know, really campaigned pretty powerfully that they had kind of messed up during COVID, that they were to blame for inflation and then the slow growth of the economy. So now he has to go work with these people and get them to vote the way he wants them to vote. So I think he's going to be first order of business, making some, mending some fences with his fellow fed governors. Yeah, that's a really good point. Stacey Vanek-Smith at Bloomberg, Catherine Rappell at the

Bullwork, also MS now. Thanks, you too. Thanks, Kai. Wall Street today, you know, sometimes reality does pierce that Wall Street bubble. We will have the details when we do the numbers. The chipmaker Cerebrus went public yesterday and what you can fairly describe as a blockbuster IPO. The initial public offering was priced at $185 a share. It gained nearly 70% by the end of the day. And if you're thinking, boy, that's a lot.

Allow me to remind you of the role artificial intelligence is playing in this economy right now, the market dynamics of it specifically. Cerebris, big AI chipmaker, and one of several. Several companies in the AI universe looking to tap into the capital markets this year. Marketplace's Stephanie Hughes is on it. Cerebrus is known for this one particular kind of chip that's about the size of a dinner plate. That's different from most chips, which are tiny. An IDC analyst Nina Turner says this chip helps speed up the rate at which AI models can respond to questions.

The models that are used to run AI basically run on these chips and allow the thinking to occur faster. Cerebris's customers include OpenAI and Amazon Web Services, and Turner says there is a definite market for the company's chips, which is why investors have been scooping up its stock. There's really, I think, a lot of investor appetite for companies with AI hardware, especially one that can potentially challenge Nvidia's place in the market. Which makes Cerebris kind of a get, says Lehigh Finance Professor Donald Bowen. It's hard to invest in this space because, There's limited places to invest your money, which is why there's such enormous demand.

Some investors are also worried there will be less demand for human labor in the future. So Bowen says they're buying stock in the companies that make AI as a kind of hedge. So if you lose your job but you're invested and you own the company that's taking your jobs, you still get the benefits of the economic activity that's generated. The demand for Cerebrus bodes well for other big AI or AI-adjacent companies. is expected to go public in the next year. That includes Anthropic, OpenAI, and SpaceX, which have eye-popping valuations. Jay Ritter directs the IPO initiative at the University of Florida.

It's kind of unprecedented for important companies to have stayed private as long as they have before tapping public capital markets. Ritter says a lot of these companies have been burning through their private investments. So, now they're turning to the market. the rest of us. I'm Stephanie Hughes for Marketplace. Despite the rally in technology stocks, technology jobs just aren't keeping up with the hype. Employment and information, that's kind of the government's proxy for technology, is off 11 percent since its most recent peak back in 2022. And with layoffs more abundant than might have been hoped, some of those former tech

workers are having to find other kinds of employment, like, say, self-employment. Here's today's installment of our series My Economy. My name is Joe Moore. I run vintage tone guitar amplifier repair in Denver, Colorado. I started this business in 2025. I got laid off from my career in high tech after 27 years and told myself and pretty much everybody around me that I was going to take the rest of the year off and start looking for a job in high tech. in January 2025, that was the plan. And as that time got closer and closer, I got grumpier and grumpier, and I just thought, you know, is this really what I'm going to do with my career from now on?

My wife asked me, well, what do you actually want to do? What do you really want to do for the next 20 years or so? And I said, I want to fix guitar amplifiers, which had been my hobby for, you know, going on 10 years at this point. I started going around to the local guitar shops here in the Denver metro area. As soon as I said the phrase, I'm an Amptech, the owner of the store said, thank God. People call us multiple times a week.

They started referring people to me immediately. Within about three months, I had a four-week backlog of work. As silly as it might sound, when I'm doing a servicing, I'm quite literally counting all the controls all the knobs, all the vacuum tubes that are built into it. And so if something comes to me that only has one knob, then I might price that at $100. But if somebody brings me something that has 25 knobs and 12 vacuum tubes, then I'm going to price that three or four times more than that

because it's quite literally three or four times more work for me. I guess a big milestone was a year after opening, and I paid myself for the first time. So I'm able to contribute to the household. I'm able to pay bills, not just my business bills, but my home bills as well. And that is very validating. There are definitely days where I'm staring at an amplifier that looks like a bowl full of spaghetti with just wires going everywhere, and I have no idea where anything is going.

And I have this feeling of I'm never going to be able to figure it. this out. But eventually I do. And it's such a thrill. It just re-ignited that that feeling of joy and discovery again that I hadn't felt in my professional career in a while. Sounds pretty good, right? Joe Moore owns vintage, tone guitar, amplifier repair in Denver. Whether you have just started your second career or you're kicking off your first one, tell us about what's happening in your economy, would you? Marketplace.org slash my economy. Coming up. So these are like high-profile Hollywood deals.

Sometimes shorter really is better, but first, let's do the numbers. Yeah, the Wawas. Now industrials plunge, 537 points, 1 in a 10%, 49,526 today. The NASDAQ raised 410 points, 1.5%. 26,225. That's a new version of the Wawa's, isn't it? S&P 500 down 92 points, 1 and a quarter percent, 74, and a half percent. to eight. I'm sure somebody's going to tell me.

For the week, the Dow is down two-tenths percent. The NASDAQ fell just under one-tenth of one percent. S&P 500 added a tenth of one percent. Bond prices fell. The yielded on the 10-year T-note, this is what we were talking about up at the top. Me and Catherine, tenure now at 4.60%. You're listening to Marketplace. Wayfair's Victoria Day clearance is on.

And right now at Wayfair, you can get up to 70% off everything home. Shop Wayfair's Victoria Day clearance. Now through May 25th at Wayfair.ca. Wayfair, every style, every home. This Marketplace podcast is supported by Inuit QuickBooks. If you're trying to grow your business, Intuit QuickBooks Workforce, can help you lead your business with confidence, clarity, and in a way that makes sense for you.

As a sponsor at Marketplace's My Economy, QuickBooks Workforce recognizes that no one person or businesses' finances are the same. As your needs evolve, QuickBooks Workforce evolves with you, bringing together the core HR capabilities, businesses expect with the flexibility to adapt to your specific needs. QuickBooks workforce combines human intelligence and AI-powered tools, so you get smart automation without ever losing control, spend less time reconciling and more time deciding what to do next.

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Given what we've seen this week, consumer and wholesale inflation spiking, while at the same time retail sales holding up pretty well, what is playing out in the beer and wine cooler at your local convenience store might perhaps not be surprising. Specifically, not as many alcoholic beverages are being sold. wine and liquor down 5.4% year over year in April. That's according to Nielsen IQ. CNBC reports the trend actually got a little worse in early May. That's the shot. Marketplace's Mitchell Hartman has the chaser. With the caveat that beer sales can be volatile month to month, impacted by weather and when holidays fall in addition to inflation, the downtrend lately isn't surprising to beverage analyst Mike Bronstein and Alex Partners. Beer in general has been

in structural decline. year over year for the last several years. Chalk that up to more health-conscious consumers, a new alternative stealing market share, like hard seltzers and cocktails in a can. But Bronsten says soaring gas prices aren't helping. Fuel pricing is really exacerbating. Trends are ready in motion.

First, consumers are prioritizing everyday necessities over discretionary purchases, says Johnny Sawyer at public opinion firm Ipsos. People are spending more on groceries. Like it's beef. produce. So he says, alcohol. If they had to pick somewhere and pull back, that's probably a place where I start because it's something that they don't need. It's something that they want. Beer sales are down the most at convenience stores, where the most beer is sold. Traditionally,

you've got a driver who steps out of their car to pump gas, steps inside if they've got a minute. Those cases full of cold beer are so inviting. But right now, for cash-strapped consumers, says Chip West at marketing firm RRD. Beer is an impulse purchase. When you're outside at the pump, a lot of times you won't even walk into the store because you're still concentrating on, you know, how much am I spending on gas. And it's not just beer sales that are suffering. So they're seeing a decrease in snacks, soda, lottery tickets. Whatever happens with gas prices, the beer industry does have some cause for optimism, says analyst Burkhard Nesson at Robobank.

Because in June, FIFA is coming to town. The World Cup is just going to be a really big deal because it's the playbook they know how to run, right? They know how to sell beer at big events. And he calls this one a Super Bowl that lasts a month. I'm Mitchell Hartman for Marketplace. You've perhaps heard that Hollywood in the entertainment industry more broadly has been struggling. In the last month or so, both Disney and Sony have announced layoffs and studios are overall making fewer movies and shows than they were even just a couple of years ago. So when I read about a boomlet of sorts in the world of entertainment, albeit a very specific one, my interest was piqued.

Antonio Serrejido is a senior reporter for L.A. material where she wrote about Hollywood and the publishing world's newfound interest in short stories. Welcome to the program. It's good to have you on. Thanks for having me. Tell me about this, I guess it's a subreddit or a forum or something on Reddit. It's No Sleep. What is that? Yeah. So No Sleep is a subreddit where people can post horror short stories and they have to be written in first person. And it started as this forum, but it's like spun out way beyond Reddit. There is a podcast where these stories are read out loud. People fall asleep, which is ironic given the name of the subreddit to listening to the stories on read out loud on YouTube. You can even go see some of the no sleep creators on a crime wave cruise next. February. So it's this very popular thread with horror stories that has this cult following. And now it seems it's sort of Hollywood movie feeding ground. Tell me how this happened. Yeah. So in 2020, this producer named Scott Glassgold was perusing the page looking at these short

stories. And he sold a story that he found called My Wife and I bought a ranch for a million dollars to Netflix and also sold a book deal for that same story. So I'm confused, actually, because I thought the way Hollywood worked is you did a spec script or you made a pitch and then you got accepted. And now you're telling me that all you have to do is write this thing on Reddit and maybe you can get a movie deal? I don't think it's quite that simple. But, yeah, I mean, the traditional Hollywood model is either you do this pitch, either in

person or increasingly on Zoom or you basically a whole script. written out. And this is sort of like in between. You know, initially these short stories were based off of these Reddit posts. And then what they realized is that the short story was so popular with executives, they didn't even have to publish them on Reddit anymore. Executives just liked the idea that they could like hold on to something. It took less time to read, but felt a little bit more you could hold on to it than a pitch. We should be clear here. These are self-published online things. It's not like short stories you're going to read like, in the New Yorker, right? Totally. They're like pulpier genre pieces, lots of horror,

some science fiction, things like that. How is it that this is happening, or actually, even as I say this, it kind of makes sense. This is happening as Hollywood is pulling back, right, on production, on investment and all of those things. And now here comes this new format. Totally. And I think that that's sort of like the central question of this piece is just like, is it this bright spot, like they're finding a way to get green lights in this Hollywood. that is contracting, or is it a sign of, like, the tastes and are, like, continue to be dwindled in terms of, like, what Hollywood has an appetite for? And I think it really helps that these short stories also have the capability of becoming two different IP properties. So there's

the film TV deals, but then also you can make the short story into a book. And so Scott Glassgold, like, actually started an imprint with Simon & Schuster. And so a lot of these, like, Reddit short stories then became successful novels. So he's a lot of, like, he's a lot of, like, making two deals on one product. Are we talking like bidding wars here and like multi-million dollar deals? Is that what's, is that what we're talking about? Yeah, these short stories have like some of the deals have like 11 bidders. We're talking about huge streaming distribution partners like Amazon, like Netflix.

One of them happened like the Oscars weekend and people were like trying to get the deal done from the Oscar parties. So these are like high profile Hollywood deals. Can I just ask, are they all like horror stories as a guy who does do horror at all? Is that what's going on here? Initially, they were all horror stories, but now there's science fiction. There's this one called The Earthling. There are sort of thrillers. But one thing that Scott Classgold did tell me is that he thinks that like a straight drama probably would not do well in this format.

Like really a lot of the short stories to prove like concept of world, like world building, and that that's better for like a genre piece. Huh. Interesting. Have to end by saying, while there are some big name stars who've been attached, Michael B. Jordan and Nicole Kidman, they're in the mix. Nothing's actually in production yet. There aren't any movies being made, and we're not going to see it at the Cineplex anytime soon. Not anytime soon, but they're working on it, is what I've been told. Fair enough.

Antonio, Therahey, though, at L.A. Material. Antonio, thanks a lot. I appreciate your time. Thank you. This final note on the way out, today is, as Catherine and Stacey and I, we're talking about, Jay Powell's last official day as Fed Chair. round for a while longer as a rank and file member of the board of governors. But I want to go back right now to Powell's first broadcast interview after he got the job. It was on this program,

July of 2018, in what was at that point still a pretty unfurnished office. Let me ask you then about inflation and about prices, which are, as you say, starting to tick up to where the Federal Reserve wants it to be. I'll note here that we're talking at 824 in the morning on the day the consumer prices come out, and they come out in six minutes. With the caveat that this is going to air now in five, six hours from now, whatever it is. You have the number in your back pocket. You know what the number is. Inflation, CPI? Well, let's just say that I do get a look in advance at these things, yes. You're not going to tell me what it is, even though we're not going to air this until. Definitely not. Score one for the chairman's adherence to the rule. I'm not going to say anything

that would suggest what it might be. Absolutely fair enough. Much will be said about Jay Powell and his time as chair. Not all of it great as he has admitted here and elsewhere. But had we known then what we know now about how his term has gone and more importantly how it is ending, maybe we could have anticipated him sticking around. Our theme music was composed by B.J. Leiderman, Marketplace's executive producer is Nancy Fargolly. Joanne Griffith is the chief content officer. Neil Scarbo's Vice President and General Manager. I'm Kai, I'll have yourselves a great weekend, everybody. We'll see you back here on Monday, all right? This is 8 p.m.

Hey, it's Francis Lamb, host of the Splendid Table podcast. Every week on our show, we celebrate the intersection of food and life. And this month, we're releasing a new series called Culinary Masters. It highlights some of the most iconic people in the food world. And we're visiting conversations with people who have fundamentally changed how many of us cook and think about food. People like Jacques Papin, Claudia Rodin, and Tony Bourdain, the name of few. You can listen to this special series.

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