Marketplace - Hey, it’s still job growth

Episode Date: August 21, 2024

The Bureau of Labor Statistics just revised its count of new jobs created between March of last year and March of this year. Although revisions are routine, this was a big one: 818,000 fewer than it initially calculated. In this episode, what the new numbers means for the labor market and the Federal Reserve. Plus, a pig farmer keeps tabs on the presidential race, retailers use “newness” to reel in shoppers, and the U.S. counties with the best and worst employment growth.

On the program today, well, data, labor market data, but we'll keep it interesting. From American public media, this is Marketplace. In Los Angeles, I'm Kyle Rizdal. It is Wednesday today, the 21st of August. Good as always to have you along, everybody. There are, give or take, 168,429,000 people in the American labor force. That's people 16 and over, according to the Bureau of Labor Statistics, which, as you know, measures daublessness

and employment in this economy every single month to as great a degree of accuracy as it can. The BLS said this morning that as part of its regular, and this is important, regular annual revision to its monthly unemployment reports, the economy that it had been telling us had been adding jobs at a remarkable clip between March of last year and March of this. The BLS said they may be not quite as many. In fact, 818,000 not as many as we had thought. Again, this revision is a normal part of the BLS process.

The revision is just not normally so big. Marketplace's Kaylee Wells has more on why this one was and why it matters. The jobs numbers that the Bureau of Labor Statistics releases every month are based on surveys, says Elise Gould. She is a senior economist with the Economic Policy Institute. They survey payroll employment, they survey a series of businesses, and they put that into their initial jobs report that happens the first week of the following month. But sometimes companies change their plans or hire fewer people than they said they would.

Or they don't bother getting back to the folks at the BLS. And so they don't get all the responses in, so they have to estimate based on the responses that they have. So down the line, the BLS revises those estimates. In this case, actual job growth was almost 30% less than originally reported. Still 2.1 million more jobs, but the largest revision since 2009. It sounds scary, but you want to really think of it as if the jobs were really not there in the first place.

Chris Rupke at the website Forward Bonds says he saw this coming. Because there are two surveys, one of employers, as we've described, and one of employees. And they didn't line up. So, you have one survey, the payroll job, saying 2.9 million, while the household survey says 600,000. That doesn't worry Frank Fiorelli from the payroll company Paychex. After all, GDP growth and consumer spending did fine without those phantom jobs. And the job market itself? It's not as robust as maybe what was first reported, but I still think it's a pretty

healthy number. Fiorelli says the revision does make the Fed's next move a lot easier to predict. It probably just means more certainty in a rate cut. By the way, nobody is really certain why this revision is so big. Some had guesses, but that's all they were. But the economy is still adding jobs, another 114,000 in July. And that's a good sign that we haven't hit recession territory yet. I'm Kayley Wells for Marketplace.

Wall Street Today, traders were not bothered even a tiny little bit about that payroll revision, which I am obliged to add here again is normal. They do it every year. Details numbers. Y'all know the drill. Maximum sustainable employment, which is the undercurrent of what Kayleigh was talking about a minute ago, the labor market and how the Federal Reserve is thinking about it right now, that's just one part of the Federal Reserve's dual mandate. The other is stable prices, which the central bank has decided means an inflation rate of 2%. The reading on the most recent consumer price index, inflation you might remember,

is that it's finally fallen under 3%, 2.9% to be exact. That is not 2%, of course, but hitting an inflation rate that starts with a 2 is a big milestone because the last time that happened was March of 2021. I don't know about you, but when I think about things back then, it's kind of hard to remember what everything was like and how much this economy has changed since. So we asked Marketplace's Kristen Schwab to take us down memory lane. Think back to the spring of 2021. I know it's all kind of blurry, but think hard. What was

happening in your life around that time? I had one of those COVID babies. I had bad luck with appliances that year. My washing machine broke. I think I waited over a year for a dishwasher. I effectively turned myself into a living Chia pet. That's Carola Binder, Betsy Stevenson, and Sean Snaith, all economists. Snaith, the guy who needed a haircut, he directs the Institute for Economic Forecasting at the University of Central Florida. And he says, in early 2021, the country was in transition. People were getting vaccinated,

venturing out to restaurants, getting back in the barber chair. And the economy was roaring back to life. People went ham on all the things they couldn't do or didn't feel safe doing. And that pent-up demand was buoyed by money. Low interest rates, rising home values, a growing stock market and stimulus checks. We had fiscal policy that had opened the floodgates. I guess we didn't see the waterfall that was up ahead. The waterfall was inflation. The country just wasn't structurally ready for the flood of demand. Snaith remembers going to a convenience store one day, only to find it locked. And finally, I saw a sign on the door that, you know, we're closed down due to staffing

shortages. And I said, this is bad. There weren't enough workers. There weren't enough goods. That helped fuel inflation during the summer of 2021. By the end of the year, it had climbed to 7%. And during most of this time, the Fed was saying inflation was transitory. Carola Binder, the economist who was raising her pandemic baby at the time, she's at the University of Texas at Austin. There was just so much inflection at that time because of the pandemic and geopolitics. Russia invaded Ukraine in early 2022, which pushed up oil prices and made inflation worse.

— You know, the longer that riots and inflation went on, the more people were starting to call that it wasn't transitory anymore. — By the time the Fed finally started raising interest rates in March of 2022, inflation was at 8.5%. Interestingly, though, economists are still arguing over whether inflation was transitory or not. Betsy Stevenson, she's the one who waited a year for a new dishwasher, is at the University of Michigan. I believe it still was a transitory moment. The question is, how long is the transition? I think what we learned was that it just took longer for that normalization to happen. Americans kept spending, despite the Fed hiking interest rates 11 times.

It's held rates for over a year now. And I got to hand it to Stevenson. She predicted this moment. In fact, didn't we have this conversation maybe like two years ago? We did. I played part of that old interview for Stevenson to jog her memory. Here she is in December 2022. By the end of 2024, which sounds like a long way away, we should have inflation under 3%.

Oh gosh, I just got this flash forward of me like two years from now calling you up asking you the same exact questions. And now here I am, like I said, asking Stevenson the same kinds of questions. Like with inflation at 2.9%, are we where we need to be? I think that yes, we got there. But you know, we want to see the more sort of stable sticking below 3%. She thinks inflation is no longer going to be the Fed's priority. Instead, it's to figure out what interest rate will keep jobs and the economy steady.

I'm Kristin Schwab for Marketplace. If you want to hear that show from a couple of years ago, Kristin was talking about, or if you just want to hear today's show again, or if you miss us on the actual radio, podcasts, hellomarketplace.org, or the platform of your choice, just follow us there. You know what we haven't talked about in a while? Agriculture. That's what. Consumers?

I mean, talk about them all the time. Retail? Yep, done that. Company news, big and small? You betcha. But the people who raise the crops and grow the livestock, not really so much. So we got Brian Duncan on the phone. He's the president of the Illinois Farm Bureau, also a hog and soybean farmer himself.

Mr. Duncan, it's good to talk to you again, sir. Great to talk to you again, Kai. It has been, I think, two years. The first question obviously has to be, how are things? Well we're still out here taking care of our land and our livestock. Things are good right now from a weather standpoint, from a market standpoint for agriculture, it's a little challenging. Well, say more about the market standpoint. What's on your mind?

Well, we've seen a 40 to 60 percent drop in prices for corn and soybeans, hogs, we've just actually had our first month of profitability in 18 months. And so there's been a lot of headwinds. Kai and farmers, we're experiencing inflation, so what we buy has cost us more. But as you and I have talked before, we're price takers, and so unfortunately,

what we're selling isn't keeping up. In addition to inflation being a challenge for you, as we've talked about in the past, trade policy has not been really any friend to you. Tell me about what's going on there, please. Yeah and that's something we're concerned about as we look at the election. One of our biggest markets right now for corn and pork is Mexico, but we still see markets to the Pacific Rim and China, believe it or not, and there's a lot of uncertainty, Kai. I'm sure you're well aware of some of the talk about potential trade actions taken by

whoever wins in November. We're pretty concerned and watching that space very closely for what might develop. Well, let's dig into that a little bit because, you know, as you know, the Biden-Harris administration has kept in place many of the tariffs on China that the Trump administration put into place. Do you expect relief if Vice President Harris wins? And are you concerned if former President Trump wins? Right now, Kai, I'm concerned no matter who wins. I don't expect a lot of relief and I haven't seen any

movement forward on new trade agreements. We're looking at the rest of the world moves forward. There's new free trade agreements being put in place and so no matter who wins in November, this is very much on my radar as a producer and on my radar as president of Illinois Farm Bureau. So let's keep going with you running the Farm Bureau. I imagine you spend a decent amount of time on the phone with people in Washington. What are your hopes for the farm bill in 2024, if any hopes at all you have? I'm a natural born optimist, Kai. That's why I'm a farmer and I'm also a fan of the Chicago Cubs.

Okay, so let's start with there. But I hate, and we won the World Series. I hear you. I hear you. It did happen. The farm bill hopes are fading fast. There's just not enough legislative days on the calendar to see something done before the election.

And I'm afraid election year politics are going to muddle the waters. Maybe post-election in lame duck, maybe. The problem is, Kai, we do an extension again of the 2018 farm bill. And some of the economic backstops are based on what agriculture's costs were six years ago. We all know costs have gone up and we've seen like I said

30 to 60 percent decrease in the price of major commodities. Those prices haven't gone low enough to hit the economic backstop. It's interesting to me that you mentioned input costs and how much they've gone up for you. That of course is another way to say inflation which gets me to the Federal Reserve and interest rates. I imagine hog farming especially but but you need outlays for seeds and fertilizer and all that stuff for regular farming as well. I imagine interest rates are of some interest to you. Very much.

And so we've seen our line of credit. The cost for paying for operating money has doubled over the last four years. I mean, that's a significant hit to the bottom line. I'm hopeful for a half to three-quarter point cut in the You're gonna go for a three-quarter point cut. That's a good. I told you remember. I'm a comes fair. I'm an optimist That's right. I think I think the Fed maybe is a little slow here So I am hopeful they'd play catch-. But yes, a family farm like myself, Kai, we've got three families and employees

as part of this farm, the interest costs are significant. Brian Duncan, he's a hog farmer. He's the president of the Illinois Farm Bureau, Cubs fan, optimist, take your pick. Mr. Duncan, thanks for your time. Sorry, I appreciate it. Thank you, Kai, and I'm gonna get you out on my farm one of these days soon.

I'd love to do it. Take care. The corporate word-o the day to day is newness. It comes to us from Target, on whose earnings call this morning it was uttered approximately a dozen times. Newness apparently was a factor in bumping up clothing sales last quarter and the company says it is leaning into offering everything from new stuffed animals to new varieties of donut holes. Whatever that may be. Sales were up 2% compared to the same quarter a year ago.

So with shoppers watching every quarter, every dollar and every quarter actually, what is it about new that's doing it? Marketplace's Stephanie Hughes is on that one. Shopping can be a chore, but when there's the possibility of finding something new, it can become more like a treasure hunt. People are like, ooh, this is exciting.

Jennifer Bartaches is an analyst with Bloomberg Intelligence. She says newness has become a focus for Target, which is trying to give price-weary shoppers more reasons to buy. Consumers have kind of a craving for something, whether it's to reward themselves or to enhance their lives in some way. reasons to buy. Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-Bartoszko-B You get better results for what you're searching for and you get better recommendations for things that you might also be interested in. Newness can also give consumers who might want a new shirt but don't need one a way to feel less guilty while buying it, says Jenny Liu with the Center for Customer Insights at Yale.

I don't have this color or I don't have this style, this latest trend. People also like variations on a familiar theme. More than 80% of adults collect things at some point in their lives, according to Katie Thomas, who leads the Kearney Consumer Institute. So when Target rolls out a new Lego or a new kind of candle, they're going to get it before the store sells out. What they're doing is cycling things on and off the shelf. It's not just adding to it.

So that taps into this idea of like, I'm going to find something that hasn't been here before and won't always be here either. Something that is here, at least for the short term, is the use of the word newness on earnings calls. Bucknell accounting professor Kate Suzlava says it's used by financial service companies as well as retailers. She says it's a quick way to get across a relatively positive idea. The word newness kind of makes you as an investor think, oh, they are introducing something new. They are not relying on old products. Susaba says these kinds of terms can be catching. Executives listen to other executives and then pick up on what they say. I'm Stephanie Hughes from Marketplace.

Coming up. It really is not about the form of the house. It's about what it represents. Which is what exactly? First though, let's do the numbers. Dow-Dolster was up 55 points today, about a tenth percent, 40,890. The Nasdaq gained 102.6% percent, 17,918. The S&P 500 up 23.4% percent, 56.20.

TJX Companies, parents of parents? No, just singular, the parent of TJ Maxx. And Home Goods reported earnings today, the off-price purveyor of everything from tank tops to sheet sets. Try saying that 10 times fast on the radio with no risk. Beat analyst projections and posted $13.47 billion in revenue. Not 13.5 but 13.47. TJX earned 6.10%. Today competitor Raw stores ascended 4.2%. Heard from Stephanie Hughes about Target and Nunes. Shares up 11.2% there. Bonds rose yield on the 10-year T-note, down 3.79%, you're listening to Marketplace. This is Marketplace, I'm Kyle Rizdal.

Kaylee Wells was telling us up at the top of the program about how the labor markets may be not quite as strong as everybody had been thinking. That is, of course, at the very macro level. The thing about the labor market though, and most markets actually, is that every region of this economy, down almost to every county, has a slightly different labor market. And the Bureau of Labor Statistics data out this morning gave us a better look at where some of the most dramatic changes have been happening.

Marketplace's Elizabeth Troval has that one. On our road trip of the counties with the most annual job growth and losses, our first stop is scenic Monterey County, California, with a whopping 4.8% annual employment growth, which Richard Vaughn with the county says was driven by agriculture. We have strawberries, leaf lettuce, head lettuce, broccoli. Kevin Dayton with the nearby Salinas Valley Chamber of Commerce says that growth likely reflects a rebound from the previous year when floods hit the area. And it did a lot of damage to the early crops, in particular strawberries. Our next stop is the Windy City. Cook County performed the worst among the 10 largest U.S. counties. Thomas Wallstrom is with the Chicago Fed.

I kind of think of Chicago as like the headquarters for the Midwest economy. He says the Midwest is the country's manufacturing hub, which has had slow growth for decades. And we're continuing to see slow growth coming out of the pandemic. And a decline within a particular segment, RV manufacturing, is likely why Elkhart County, Indiana, a couple hours down the road, had the largest drop in employment. Demand for RVs went crazy coming out of the pandemic and it's kind of come back down to earth. And in sunny northeast Florida, St. John's County tied for the most employment growth year on year. Scott Maynard is with the county's chamber of

commerce. We've seen job gains in the area of education and health care. Health care has seen a tremendous amount of growth in this area. With additional health facilities under construction, he expects the sector to continue to grow as more people move to the area. I'm Elizabeth Troval for Marketplace. We'll get an update tomorrow from the National Association of Realtors on existing home sales or put another way, the number of used homes sold in this economy last month. Given the existing housing stock in this country, it's likely a big chunk of those used homes

sold were ranch style. You know them, right? One story, attached garage, low pitched roof. They are everywhere. So for the next couple of installments of our series, Adventures in Housing, we're going to open up the Homestyle History book. My name is Mary Fynne Balgoy, and I studied the social history of architecture. So there's many factors about the origin of the ranch house itself.

So there's many factors about the origin of the ranch house itself. It starts really in the 1930s. With the Depression, they needed to go ahead and create a home that people could afford. Cliff May is what we call the father of the ranch house. He started in the 1930s. He started building furniture, essentially. And then he got into building houses. They were basically in the colonial revival style. However, he made it look much more crude, like you were really living out in the country,

which really people wanted at that time. He talked about how he felt that the ranch house was inspired by the California adobes. He insisted upon that, where they had the U-shaped adobes that opened onto this courtyard, this working courtyard. that opened onto this courtyard, this working courtyard. He somehow got in contact with Sunset Magazine, and in fact, they put out a book on Western ranch houses

with Cliff May's designs basically dominating the book. One by one, he was just getting all of these commissions from these houses that he built for these magazines, pushing the ranch house style because it is much less costly to build than other types of houses. By 1955, eight out of ten houses that were built in the United States were ranch houses. The ranch house is still growing, going strong. It can be modified in such a way that it can be used for office buildings that you'll see, motels, even gas stations. You just have to look a little bit and you'll say, that's in the form of a ranch house. Now I come from the West, Southern California specifically, and so I grew up

in ranch houses. The sliding glass door that led into the patio area. We had the barbecue out there. We had roller skating out there on the patio. It really is not about the form of the house. It's about what it represents. It is the face of suburbia America. It is the face of suburbia America. Mary Van Baalgoy, she is the vice president of Engaging Places that's a design and strategy firm mostly, as you might imagine, about historic places and ideas. If you've got a question about home history, send it to us.

You can do that at Marketplace.org. This final note on the way out today in which we make our annual return to the hill on which I will die and in which we will also get the last mention of said subject for the remainder of the year Starbucks, you know where this is going right Starbucks announced pumpkin spice latte season begins tomorrow Tomorrow, it's the third week of August you guys This is wrong Do not at me

Again, I'm gonna sell our media production team includes Brian Allison, Jake Cherry, Jesson Duhler, Drew Jostette, Gary O'Keefe Charlton, Thorpe 1, Carlos Torado, and Becca Weinman. Jeff Peters is the manager of media production, and I'm Kyle Rizdo. We will see you tomorrow, everybody. This is APM.