Marketplace - Hear that? That’s the sound of millions of Americans dusting off their ACs.

Episode Date: April 10, 2024

Inflation is hotter than anticipated, according to today’s consumer price index. Electricity, for instance, cost 5% more year over year. And in the coming months, demand for electricity is expected to grow — scientists predict this summer is gonna be a hot one. In this episode, an air conditioning price forecast. Plus, the lone busy cargo facility in Baltimore, country music’s Black influences and an economic fortuneteller that’s always changing its mind.

OK, look, was this morning's inflation report great? No. Was it terrible? Also, no. Another thing it was not, though, unexpected. From American public media, this is Market Class. In Los Angeles, I'm Kyle Rizdahl. It is Wednesday today, the 10th of April.

Good as always to have you along, everybody. The details of this morning's updated Consumer Price Index you have surely heard or read a time or two today. Inflation is running at 3. a half percent year on year, 3.8 percent annually if you take out food and energy costs, which can bounce around a lot and so can muddy the readings, even though, yes, we all do use food and energy. But that is not the most important thing to know today. We've been saying that we expect inflation to move down to two percent, but on a path that is sometimes bumpy. One compares the chair of the Federal Reserve to a horse's mouth at one's peril. But I asked

Jay Powell when we had him on the program a week or so ago, that is to say, I got it straight from the horse's mouth, why this last mile of getting inflation down to 2% has been so hard. The question then is, are those just bumps or are they something more than bumps? Is inflation, is progress on inflation going to slow for more than, you know, two months? Great question, Chair Powell. The answer? There isn't anybody who knows. Oh. Our position is we don't know. Okay. We'll tell you what we will do if inflation does come down. And that's sort of the base case. That is what we expect. We expect inflation to come down on a sometimes bumpy path to 2%. Bumpy, the key word. But if

that doesn't happen, then obviously our rate policy will be different. And for example, we can hold rates where they are for longer. And that's what we would do, of course, if inflation doesn't come down, if we don't see the progress we're looking at. So here's the point of all that. The last mile of anything, package delivery, Internet service, basically you name it, that last mile is hard. And sometimes it is bumpy. And that is to be expected. Is the short term inflation trend line great? No. Are there implications for Fed rate cuts at play here? Yes, obviously.

Do we know much else? Not really. You know what might know a bit more, though? The bond market. Yes, equities, that is to say stocks, had a not great day. But the bond market is talking to its people, the 10-year and the 2-year in particular. Now, what are they saying exactly? Marketplace's Sabri Beneshour has that. If you are going to theoretically lock your money up

in a 10-year bond, you obviously want it to be worth it for all 10 years, which means that a 10-year bond has to account not just for what interest rates are, but what they will be. So if there are high interest rates in our future, bonds reflect that. And I think that that's what we're seeing in bond markets today. Eric Winograd is chief economist at Alliance Bernstein. Bond yields are going up, showing us our future like a crystal ball. Three-month bonds predict three months of future. A two-year bond covers two years. Short-dated bond yields are moving higher. Longer-dated bond yields are also moving higher, not by as much.

Markets believe inflation will come down eventually, but not as fast as people hoped, which means the Fed will need to keep interest rates high to fight that inflation. What makes this worse is that high interest rates aren't even all that helpful for the kind of inflation we're seeing, says Rick Reeder, chief investment officer for fixed income at BlackRock. Auto insurance, health care costs, education, tuition, those things generally don't move based on interest rate. This kind of inflation is like the antibiotic-resistant bacteria of the econ world. The only way you really bring them down is you'd have to really have pressure on the economy. Unfortunately for the economy. You're seeing credit card charge-offs, auto loan delinquencies growing,

non-mortgage interest payments moving up significantly. Now, one thing about crystal balls in like the movies is that they are right. Usually the market crystal ball changes its mind basically constantly. If you look at the bond market today, clearly we see a big reaction. And in our opinion, it's a little bit of an overreaction. Tuan Nguyen is an economist for RSM. Nguyen says he thinks falling housing costs will pull down inflation by the summer. So things could improve more quickly than the market crystal ball thinks.

Really, maybe it's not a crystal ball. Maybe it's more like tarot cards or a Rorschach test. In New York, I'm Subri Benishor for Marketplace. Speaking of tarot cards or Rorschach tests, 4.54% on the 10-year today, if you happen to be keeping track. We'll have the rest of the details when we do the numbers. Electricity and the cost thereof is one of the components that make up the consumer price index up nine tenths percent month to month five percent higher year on year so there's that and we got another number this week that hints electricity bills might be an extra burden starting well sometime really soon the energy information administration figures electricity demand is going to be four percent higher this summer than last on forecasts.

Weather-wise, that is going to be even hotter than last year. Marketplace's Henry Epp is on that one. Yeah, a lot of people will probably crank their ACs to cope with the heat, the EIA says. But the price of the electricity to run them may actually go down a bit this year. Seth Feaster with the Institute for Energy Economics and Financial Analysis points to two reasons. Natural gas prices and increased solar generation. Natural gas has gotten a lot cheaper and solar installations are up, Feaster says, but we could still face higher energy bills if we have to use more electricity. Feaster has an analogy. If we have a hot summer and you buy more beer, you'll be spending more money on beer,

but it doesn't mean the price of beer itself, which is the inflation factor, is actually rising. The same is true with electricity. But air conditioning during a heat wave is kind of more essential than buying a six-pack. And if hotter temperatures mean running that AC more, that'll especially impact households considered energy insecure. Michelle Graff is a professor at Cleveland State University. Black and Hispanic households will be disproportionately impacted by an increase in energy prices, those with young children, and often low-income tenants as well. Graff says higher energy bills can often lead people to coping strategies. From not turning their air

conditioning low enough to actually achieve a comfort level, to actually foregoing other necessities like food or medicine. There are assistance programs out there to help pay electricity bills and to improve energy efficiency, which is often expensive up front. Rebecca Foster heads the efficiency nonprofit VEIC, which offers a voucher to low- and moderate-income households. And they can use that voucher to upgrade an air conditioner or another major appliance with a more efficient model. Which can save money in the long run. I'm Henry Epp for Marketplace. The Port of Baltimore is, as you might imagine, still mostly closed following the collapse of the Francis Scott Key Bridge. But mostly closed is the collapse of the Francis Scott Key Bridge.

But mostly closed is not completely closed. A terminal outside the wreckage operated by TradePoint Atlantic, which is a private company, by the way, is still decidedly open for business. Marketplace's Stephanie Hughes paid a visit. It was three in the morning when Carrie Doyle got the call that the Key Bridge had collapsed. And then I started to try to drive to the office right then and there. And then I was coming like I was going to drive over the Key Bridge and I was like, it's gone. Doyle is managing director for TradePoint Atlantic. Suddenly, the facility had to gear up both to help with recovery efforts and to take on redirected cargo. That means its marina is now bustling.

You'll see where we've got high and heavy equipment coming off into this storage yard. We've got lumber being loaded out onto that truck there. And there's organic grain being lifted with cranes from another ship beyond that. This can be complicated. TradePoint doesn't want to get any grain on the BMWs or fancy tractors coming in. So Doyle has to think about things like which way the wind is blowing, literally. Nearby, John DiMarino is waving a giant combine through a gated fence.

I'm a checker. I check stuff. He's making sure the vehicles coming in here belong here. DiMarino has been doing this work for 20 years. Now there's not as much work going around, so my seniority gets me at least doing this work for 20 years. Now there's not as much work going around, so my seniority gets me at least doing this. There are 20,000 workers at this facility in regular times, and port manager Kerry Doyle says there's more now, though they haven't had time to count how many. Meanwhile, TradePoint needs more flat spaces to store all this redirected cargo, so it very quickly made plans to pave an additional 40 acres. Justin Larson will be working as a blacktop foreman.

That's going to be 10, 12-hour days. I'm happy it gives us something to do. All this has meant increased costs, but also increased revenue for handling the additional cargo. And Doyle says he's focused on keeping as much business at the port as possible. Right now, the port of Baltimore looks somewhat vulnerable. Some of the cargo is being redirected to other ports, and those other ports have clearly stated that they want that business, even before this has happened. Doyle says the more cargo TradePoint can accept now,

the more likely those shippers will keep their business at the Baltimore port in the future, even if it's at a different terminal. In other words, he says, pun intended, a rising tide lifts all boats. In Baltimore, I'm Stephanie Hughes for Marketplace. Coming up. 20 to 30 percent of all cowboys in the American West were black and brown. Cowboy Carter, if you will. But first, let's do the numbers. Dow Industrials off 422 points today. One and a tenth percent closed at 38,461.

The Nasdaq subtracted 136 points. That's about eight tenths percent. Ended at 16,170. The S&P 500 gave up 49 points. Almost one percent there. Finished at 51.60. Bad as that was, they were off the lows of the day at the close. So this thinking on Wall Street today went like this.

Inflation is hotter than expected, so interest rates will be higher for longer than expected. And that is bad news for companies with a lot of commercial real estate, among others. Extra space storage shrank 6.5% today. Public storage contracted 6% as well. BXP trimmed 6.1%. The news also pushed the dollar higher, which reminds me we should do a story on the carry trade. Put the brakes on the upward climb of the price of gold as well. That is bad news for, among others, gold miners. Newmont dug 1.5% deeper. Harmony Gold Mining descended 1.9%. Take a look at some of the utilities that will have to meet that demand that Henry Epp was and a half percent deeper. Harmony Gold Mining descended one and nine tenths of one percent.

Take a look at some of the utilities. We'll have to meet that demand that Henry Epp was telling us about. PG&E turned down 1.6 percent today. Consolidated Edison dimmed 2.4 percent. Bond prices down, as I said, the yield on the 10-year 4.54 percent. You're listening to Marketplace. Hey there, I'm Bridget, co-host of Million Bazillion, Marketplace's podcast for kids about money. I want to tell you about our email newsletter course, Million Bazillion Academy. In this new and improved course, we'll help your kids learn about crypto, credit cards, and inflation in just six weeks. Each lesson comes with a podcast episode, a fun cartoon, discussion questions, and an activity that lets kids apply what they're learning in the real world. You can start at any time and work at your own pace. This is Marketplace. I'm Kai Risdahl. We started the program, of course, talking about inflation, big picture wise, which, while important, is only a part of the story because it's what people are feeling in their every day that sets a whole lot of the economic tone out there. Kalina Bruce runs Noir Look's Candle Bar up in Seattle.

That is, she makes a living selling to people in their every day. So we gave her a call. The last few weeks have been a little bit slower for us in terms of business. Our busiest seasons tend to be October, November, December, and then it tends to kind of tick down January through May, maybe picks back up in May around Mother's Day. So we're not seeing anything that's unusual, but I would say in comparison to last year, our sales are down probably about 15%. Our costs are good. We are constantly looking at how we can order in bulk to get those discounts and kind of get a little bit of a break on the costs,

especially with our goods being things like vessels that are made of glass, wax that come in boxes of like 50 pounds. Shipping can be astronomical sometimes. We're just trying to do our best to anticipate what our coming needs are. And because it is a little bit slower, we can comfortably order a bulk inventory and know that we're going to have it for a while. So we don't have to worry about having to stock up on anything right now. on anything right now. We are fully staffed, which is a new feeling for us. We have about 10 staff members and a lot of times our staff members are looking for more hours. And so because it is a little bit slower, we're trying to make sure we can plug everyone in,

but also make sure that it makes sense for the revenue flow. In the next couple of weeks, I would love to see sales go up. I know that this is not necessarily a time where folks are inside lighting candles, so that's totally understandable. But we'd love to see more folks come into the shop and pour candles. Currently, I'm feeling very optimistic about the future of our business. We are continuing to see new customers come in and new customers from all over the country purchase items online, which is always exciting. And so we're optimistic that things are going to continue to be on the up for us. Kalina Bruce at Noir Lux Candle Bar, Seattle, Washington. The music news of the week, of course, comes to us from the Billboard Country Charts,

where Beyonce is in the top spot. The first time a black woman has done that. Act II, Cowboy Carter is the album. It is very far, though, from the first time a black artist has shaped country music. That has been happening since the turn of the last century. And it leads me, in a way, to Alice Randall. She's a professor and a writer-in-residence at Vanderbilt University. More to the point, though, she has spent decades writing country music lyrics.

She was the first black woman to co-write a chart-topping country hit, X's and O's, in 1994, if you remember that one. And in her new book, My Black Country, she writes about her own career in country music, as well as the artists who came before and after her. Alice Randall, thanks for coming on the program. It's wonderful to be here. You spend no small part of this book defining black country, capital B, capital C. Give us the thumbnail, would you? Well, the equation is Celtic, that's English, Irish, Scottish ballot forms, plus African influences, plus evangelical Christianity equals country music. Don't have the black influences, and you probably got folk music. Don't have the evangelical Christianity, and you may have blues. I love the formulaic application to something that is so visceral, right?

It's so stirring and internal. It is. It's emotional, and there are themes, the big themes of country as far as I see it. Life is hard. God is real. The road, family, and liquor are significant compensations and the past is better than the present. I'm going to throw one more at you and I want to see what you say. Race. The racial fault line in country is all around that theme of the past is better than the present. In much of white country, the past is better than the present is a mythologized Dixie. In much of black country, the past is better than the present is a time in childhood where your parents were able, against

all odds, to protect you, or a lost Africa before colonization that's manifest by nature. Well, so let's go back in time, not quite that far, but back in your time anyway. It struck me as I was reading this book, you were like 23, 24 years old and you're up and decided to move to Nashville and be a black country songwriter. How did you come to that decision? Well, I decided to become a black country songwriter and publisher. Yeah. I was founding Midsummer Music because I was born in Detroit City in 1959 as the same year as Motown Records. And my father did not read books to me. He told me stories. And one of the stories he told

me over and over was that the founding of Anna Records that Barry Gordy's sisters had founded a year before Motown. So he talked to me about women being song publishers and record company executives and songwriters. And I heard those stories and followed in Anna's footsteps. So as you set about becoming obviously a publisher, but also a black country songwriter, how'd you go about that? Did you just plop yourself down one day and start writing music? Well, I don't actually write music. I write very simple melodies. That's a very good point. Yes, you talk about that. And I teasingly say that my melodies are so simple that when the ones I come up with,

if I can sing them, the whole world can sing them. So it goes well for having hits sometimes. But I came to Nashville via Harvard and Washington, D.C. So I sort of took the skills that I learned analyzing the Harlem Renaissance poets and Shakespeare and Jane Austen, and I applied them to country lyrics. I love British metaphysical poetry and American metaphysical poetry, and it was alive and hiding in country and Western music, and I found it. Oh, no, now you have to say more about that. You can't just dabble in that and say, I found it. What's the story? Well, these lyrics, these really complicated lyrics, such as drop, kick me, Jesus, through the goalpost of life,

that's an extended metaphysical conceit. And you know what? On Beyoncé's new album, Cowboy Carter, Bodyguard is another one of those extended, complex metaphors that we see all through country. Since you mentioned her and her new album, which is blowing up rightly because it's kind of amazing, do you feel a full circle-ness at all to what has become a not small part of your life's work? Absolutely. I feel actually a Juneteenth, which is good news at long last. Because I will be 65 May 4th, and I've been in country and Western music for 41 years professionally. When I arrived here in 1983, Charlie Pryde had been to the number one spot 29 times. It was about to go up for another time. So many black men have gotten to

the number one spot. I can't remember all their names, but literally not one black woman performer had gotten there. There's a phrase I want to say, cultural redlining. Black women have been culturally redlined out of that. They had not been given the economic resources to make the campaign to get there. And Beyonce eclipsed all of that. And I can retire now with a joy that all three of the things I wanted to see, they got done. One came in right at the last moment. Wouldn't have gotten there without Queen Bee. that right let me tell you that um there's you start the book with an anecdote about uh being in a studio and i'm sorry i don't remember what city it's in and hearing some it was in nashville okay i'm sorry i blew that one um hearing a song of yours uh being performed and it was by a young woman named adia victoria uh a young black woman and you said it is the first time was the first time that you had seen somebody who looks like you

sing one of your songs the way it ought to be sung and i wonder if you can tell us about that moment i cried i cried just thinking back on it right now almost makes me cry again it changed the whole beginning of my book because I knew I had to start with that moment. sung my songs, but no one had ever looked like me had sung one of my songs. And more significantly, listeners thought all the heroes and sheroes in my songs were white because the singers were white. And some of those heroes and sheroes, I had imagined them, all of them I had imagined as black. And I was willing and embraced people projecting their identities onto them, but I resisted the identities I had originally imagined and created being erased. And a dear Victoria added the color back to that cowboy. And 20 to 30 percent of all cowboys in the American West were black and

brown, and they deserve to be remembered. And if we don't remember them, we cannot properly encounter Cowboy Carter. Alice Randall writes books and songs. Her most recent book, it's a memoir, is called My Black Country, Journey Through Country Music, Black Past, Present, and Future. Ms. Randall, thanks for your time, ma'am. I appreciate it. Thank you. That song right there is Went for a Ride, sung by Adia Victoria. The song, of course, that Alice Randall and I were just talking about. It's part of her book's companion album, also titled My Black Country, out this Friday.

By the way, all the rest of the music you heard on the program today, Alice Randall picked them all. We've got the playlist at marketplace.org. This final note on the way out today, an inflation update of sorts from the United States Postal Service. Those who still use the mails are going to be shelling out more for first class postage if the Postal Regulatory Commission approves. Seventy three cents effective July the 14th. That is up from 68 cents and is, if you're curious, seven point three percent first class postage inflation. Our media production team includes Brian Allison, Jake Cherry, Justin Dooler, Drew Johnstatt, Gary O'Keefe, Charlton Thorpe, Juan Carlos Dorado, and Becca Weinman. Jeff Peters is the manager of Media Production. I'm Kyle Risno.

We will see you tomorrow, everybody. This is APM. A lot of people spend a lot of money on things like skin care, fast fashion, and even surgery, all in the name of self-improvement. But as the price of perfection rises, when is it time to call it quits? I'm Rima Kheys, host of This Is Uncomfortable, a podcast from Marketplace. This season, we dig deep into the financial trappings of self-care and the real motivations behind our spending choices.

Listen to This Is Uncomfortable wherever you get your podcasts.