Marketplace - Let's check in on the U.S. trade deficit

Episode Date: May 5, 2026

In case you forgot, President Trump's tariffs had one goal: narrow the U.S. trade deficit. Compare March ‘25 to March ‘26, and the deficit has shrunk by half. But from February to March of this year, it actually widened — exports rose, while imports rose even more. In this episode, what’s driving all that economic activity? (Hint, it’s not tariffs.) Plus: 30-year Treasury yields top 5%, home remodeling is projected to slow in 2027, and we visit a job fair in Philadelphia.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.

Marketplace is brought to you by you. Yes, the most important piece of our budget is donations from you, our listeners. We call the people who donate Marketplace investors because every dollar you give comes back to you in the form of trustworthy, grounded reporting with a sense of humor. So please become a Marketplace investor today at Marketplace.org slash donate or just click the link in our show notes. It's Charles Barkley with Wayfair. It's outdoor season and my patio set up. That'll be ready to play. That's what Wayfair will. winds, patio seating, umbrellas, and grills. All delivered, fast, and easy. Shopwayfair.ca now.

Wayfair, every style, every home. Well, let's see. The bond market, international trade, the satellite business, and hey, when was the last time you made a new friend? From American public media. This is Marketplace. In Los Angeles, I'm Kyle Rizzo. Today, this one is the 5th of May. Good as it always is. Have you along, everybody.

You know that thing I say sometimes that if you want to know what the economy has in store for us, look at the bond market? Yeah, well, that. The yield on the 30-year treasury bond, that is, to say the interest the government's got to pay to borrow money, is higher today than it has been in almost a year. Marketplace's Kristen Schwab gets us going with the bond market tea leaves. It's not so much that a 5% rate. on the 30-year treasury equals a five-alarm fire.

It's more like one of those psychological thresholds. Frank Warnock is a professor of business administration at the University of Virginia. I think more significant would be if we spend time north of 5%, if it breaks through and starts to be by 5.5%. Still, even a short stint at 5% comes with real-life consequences, especially since the 10-year treasury yield is also hovering around highs for the year. Higher yields mean higher borrowing costs. 30-year mortgage rates, for example, or 15-year mortgage rates or car loan rates.

What a 5% yield on the longest term government bond says about the economy is that investors are worried about the war and oil supply and how they will affect prices. Adam Abbas is head of fixed income at Harris-Oatmark. I think the 30-year is really about structural inflation expectations. Are they kind of more entrenched? We've had a series of one-off inflationary events, a pandemic, tariffs, a war. Now they're blurring together to make high inflation feel like a fact of life. The bond market is betting the Federal Reserve agrees and will keep interest rates high or even raise them. Winnie Caesar, Global Head of Strategy at Credit Sites, says investors also worry about the deficit.

The government spends more than it takes in, which means it needs to plug that gap somehow. and that gap is plugged with debt. Debt in the form of bonds. Caesar says the rate on long-term bonds has been headed upward since 2020 or so. It's spent decades before that heading downward. I think a lot of people are trying to figure out, like, is there something structurally different in the economy that should argue for elevated 30-year treasury yields on a sustained basis?

The signal that the bond market might be sending is that The economy has fundamentally changed. I'm Kristen Schwab for Marketplace. Wall Street today, everything's fine, isn't it? We'll have the details when we do the numbers. We got war, we got an energy shock, we got bottled up supply chains, we got tariffs, and we got today an update on the U.S. trade deficit, the difference between the value of what we buy from overseas and what what we sell. It was up a bit in March, 4.4%, if you want to know. But even with that, the trade gap

is down year to date over the same period in 2025, a major goal, as the president reminds us all the time of his administration. But as Marketplace's Mitchell Hartman reports, there's a whole lot more than the president's tariffs driving this thing. A four and a half percent monthly increase in the U.S. international trade deficit, says Thomas Ryan at Capital Economics. On the surface looks quite boring, but it's actually quite interesting. So convince me. This was the first month you saw the impact of higher energy prices as a result of the Iran-War. Remember, the U.S. is now the planet's top petroleum producer.

Gary Schlossberg at the Wells Fargo Investment Institute points out the value of our fuel exports rose nearly 25% in March. Other exports are also getting a boost. The U.S. is the supplier of last resort. where an ag producer, ag trade has been disrupted, ag exports. They were up 8%. And then defense equipment was another area of strength. Still, the trade deficit did widen a bit in March. And that's because while exports rose, imports rose even more,

driven by demand for computer equipment to run AI data centers, also passenger vehicles and other consumer products, which is good news, says nationwide economist, Orrin Clatchkin. It shows that consumers continue to, to spend, businesses continue to dole out capital. The trade deficit is likely to hold pretty steady in coming months, predicts Mary Lovely at the Peterson Institute for International Economics. Tariffs aren't causing wild swings in import flows like they did last year, and U.S. demand for imports remain strong.

So the deficit overall is not going away. It's moving. China has fallen from the top exporter to the U.S. to number four, behind non-exporter. Number one, Taiwan, which supplies us with AI equipment, and also Vietnam and Mexico, where companies are moving more production to supply the U.S. market. I'm Mitchell Hartman for Marketplace. Among the many slices of this economy affected by the President's War with Iran is what's known as the Earth Observation Industry and one of the biggest names in it, a company called Planet Labs. Krishna-Kara wrote about it for Bloomberg the other day. Thanks for coming on the program. Thanks for having me on. I learned a new phrase today reading this piece. The Earth Observation Industry, what is that? Sure. So, you know, I don't think everybody knows this maybe, but there's satellites that are orbiting Earth and they're taking pictures of what's happening on the ground every single day. And governments have been doing this for a long time. This industry kind of came out of the government. But now there's a, you know, a whole commercial sector that's.

that's launching satellites, beaming imagery down to $5 billion industry about globally speaking. And Planet Labs is the biggie, yes? Planet Labs is definitely one of the biggest players. They have over 200 satellites in orbit, and critically, they take pictures of the Earth every single day. And then the platform that they've built is kind of more like a streaming service rather than ordering images on demand. So anybody can go. I should note that Bloomberg News is a customer of Planet Labs, but any other you know, anybody can go and look at this data and see what they want to see on the ground.

So who are their typical customers before we get into the reason we're talking to you? Sure. Government's the biggest one, and I'm sure we're going to get into that and the tension there. On the commercial side, it's kind of all over the place. There are companies that are doing things like maritime tracking of ships in the Strait of Hormuz, for example. There's big agricultural giants. So think about Bayer. Yeah, any kind of intelligence operations where you're trying to assess what's happening on the ground. That's that's where those customers are. Okay, to that tension and the

government, early last month, uh, planet labs announced that the government had come to them and requested that they, I guess, suspend their service. Explain that a little bit. Sure. Yeah. Just about a month ago on April 5th, uh, Planet Labs announced that they had gotten this voluntary request from the government. You know, we should note that it is, they said that it was voluntary. Yeah, that's air quotes. Basically, yeah. Yeah, air quotes definitely because, um, Yeah, so over a large section of the Middle East, so this is not just Iran, but this is all the Gulf countries. This is Israel, Lebanon. You know, so it's a very large section of the world.

So they move to what's called this managed access model. So all that imagery in their streaming service-like platform, it disappears. You can't look at it anymore. And, you know, they kind of decide on a case-by-case basis what to let out. The ostensible reason you here has to be national security, right? That's what the Pentagon and the government was asking. Yeah, so I think that's a question kind of worth teasing out a little bit. You know, there are real national security risks.

So at the highest resolution that these images, that these satellites can image at, you know, you can make out really detailed battle damage assessments. You can look at troop movements and things like that. But I also talk to other people who are experts in the same sector who say that because of the latency that's involved in actually from when an image gets captured in space, that actually getting on the ground and you having time to look at it, that latency is kind of long enough such that it's not really relevant from a military standpoint. And so I would say critics would say that there's not really legitimate military reasons,

but really this is more about bad press. Huh. So what would be customers of Planet Labs and Bloomberg as well doing? Are there other sources? Can they go to like a child? Chinese satellite imaging company? You guessed it. So China's a huge player of North Observation.

After the U.S., they're kind of the next biggest player in terms of capability, in terms of getting images from space. Some folks that I talk to from the commercial side, a lot of those folks are turning to companies that are not based in the U.S. So Airbus is a big example. So people are considering Chinese imagery as well. And, you know, one interesting thing to note there, too, is that there have been Chinese companies that have been out.

out there that have been publishing imagery and analysis on U.S. troop movements. So, you know, you can't stop everything. No, no, you can't. Just to wrap it up, this voluntary, again, in air quotes, request, there's no expiration time, right? I mean, it's TBD when they get permission to come back online. Yeah, they made a statement saying that, you know, they're working to restore access as soon as possible. I should note that, you know, they reached out to us just a few days ago, and they are starting to try to lift some restrictions, not over Iran, but over Lebanon and a couple of other areas in the Middle East. And I should know also that that is still not kind of full open access, like where you can see it in their platform. You still have to

talk to them to get imagery. But I think they're trying, I think they're trying to open up as soon as possible, but for now, the restrictions are still in effect. Christian Nakara at Bloomberg. Fascinating piece on the Earth Observation Industry. Krishna, thanks a lot. I appreciate your time. Thank you so much. Appreciate it. The Census Bureau told us today that the number of new homes sold in this economy rose 7.4% February to March. That is good for builders. It's good for buyers, perhaps.

Not so rosy, though, for the half-trillion-dollar home remodeling industry. A report out this morning from the Joint Center for Housing Studies at Harvard says spending on remodeling is going to grow up by just a half percent in the coming year. Daniel Larkiman is on that one. Rachel Bogartis Drew of Harvard's Joint Center for Housing Studies says the outlook for the remodeling industry is, in a word, stable because that's a little bit more optimistic sounding than stagnant or flat. Drew says the number of homeowners seeking remodel permits has grown more slowly of late,

and sales of supplies like faucets and windows are down. So people are spending less on the building. products when they spend less on that, we know that they're spending less as well on the services for remodeling. In the face of this slowdown, Drew has some advice for contractors. Lean on your higher income clients. Yes, the K-shaped economy is alive and well in the remodel industry. Anibon Basu, CEO of Sage Policy Group, says that's in part because wealthier homeowners tend to be more seasoned ones. They're aging in place. We've got a lot of baby boomers. They need to deal with steps in their homes and these kinds of things.

They need to have safer bathrooms and kitchens, and so a lot of remodeling activity from that. Along with the owners, America's housing stock is aging too, which means those homes will need a little more TLC to stay livable. All of which leads Basu to believe the outlook for remodeling is stronger than it may appear. So his message to contractors right now? Do not reduce your capacity to deliver services to the market.

Even that is difficult, though. President Trump's immigration crackdown has made it harder for remodelers to find and retain qualified workers. But it's still important to try, says McRena Wilkins, director of market insights with the Associated General Contractors of America. Securing and having an established workforce will put you in the best possible position to be able to take on contracts that become available. Wilkins says more of those contracts should come if the rising cost of building supplies

ever starts to ease. I'm Daniel Ackerman for Marketplace. Coming up. You look at something for five seconds and then all of a sudden you're getting a million ads. Hate it when that happens. First, though, let's do the numbers. Dow Industrial is up 5,356 points, rather, three quarters of 1%. Finished at 49,298. The NASDAQ added 258 points. That is 1%. 25,326.

S&P 500 gained 58 points, 8 tenths percent, 72 and 59. Everything is fine. Just like I said, right? Intel up almost 13%. Today after Bloomberg reports Apple talk to the chipmaker about making processors for its devices. Apple shined up 2 and 2 thirds percent on the day. Pinterest is forecasting revenues for this quarter are going to come in above what Wall Street had been guessing. The image sharing platform pocketed 6 and 9 tenths of 1%. Duo Lingo added 21% more daily users and paid subscribers last quarter, but it expects about half the rate of growth going forward.

So what do you think happened? Duolingo shed 5 and 6 tenths percent is what happened. bond prices, we'll just do the 30-year today. The yield on the 30-year 4.9er-9% You're listening to Marketplace. Storms, floods, and fires are ever more extreme. And yet, the Federal Emergency Management Agency is fighting for its life. I've never been a big fan of FEMA.

FEMA's a disaster. Femma's a dirty way. People are waking up in droves to the FEMA camps. Can the agency survive the stories that have been told about it? And can we survive without FEMA? American Emergency, the Movement to Kill FEMA, is a brand new series from WNYC's On the Media. Listen, wherever you get your podcasts. If you're trying to grow your business, Intuit QuickBooks Payroll is an essential tool that completely integrates payroll, time tracking, HR, and your financials into one powerful platform.

And now, they're evolving into QuickBooks Workforce to help you lead your business with confidence and clarity. QuickBooks Workforce combines human intelligence and digital. AI-powered tools, so you get smart automation without ever losing control. Spend less time reconciling and more time deciding what to do next. And as your needs evolve, QuickBooks workforce evolves with you, bringing together the core HR capabilities businesses expect with a flexibility to adapt your specific needs. Your processes get streamlined, and you get precious time and energy back to move forward proactively. Move from reactive to proactive with brand new tools by making

the switch to QuickBooks Workforce today. Learn more at QuickBooks.com slash workforce. That's quickbooks.com slash workforce. It's Charles Barkleywood Wayfair. It's outdoor season and my patio set up. Better be ready to play. That's what Wayfair wins. Patio seating, umbrellas and grills. All delivered fast and easy. Shopwayfair.ca.ca. Now. Wayfair, every style, every home. This is Marketplace. I'm Kai Rizdahl. The National unemployment rate, regular listeners to this program will know, has been a bit above 4% for more than a year now. We'll get an update on Friday morning. It'll be the April number. But a low national rate doesn't do you much good when the local rate is a lot higher. Marketplace of Samantha Fields went to Philadelphia. In the last year, more than 17,000 people have walked into an old Art Deco office building in the center of Philadelphia, looking for help finding work. Inside is one of four publicly funded jobs.

centers in the city. You can walk in here are hours of operation right here on the door, so we're open from 8 to 4.30 every day. Don Thomas Hayward is with Philadelphia Works, the city's nonprofit workforce development board, which runs this and three other career link centers. At the check-in desk on the second floor, there's often a line, especially in the morning. They are now in line either to see their workforce advisor to go use the computer research. Center, do jobs for you, get resident aid help, get into trainings. Anyone can walk in, Thomas Hayward says. The job centers are open to the public.

James Anderson is here today. He first came in five or six years ago when he was in his mid-50s. I was incarcerated, tired of that circle in and out. And I thought maybe I just start looking into some of the resources that's available and see where it can lead me. He told his advisor then that he was interested in vocational training. and they got him into a program to get his commercial driver's license. They funded everything, like really helped me get that opportunity to get into a new future. But without much on-the-job experience, Anderson says it's been hard to land steady, full-time work at a good company.

Right now, he's only working one day a week and not as a driver. It's been challenging, trying to get a job where you could say, thank you, God. You know what I mean? I'm good now. And you've got to stress. That kind of work here. It's challenging for me. It's challenging for a lot of people to find work right now. Elizabeth Giddings sees that every day, working one-on-one with people to help them find a job

or get into an apprenticeship or training program. When I do an orientation for the individuals to get a workforce advisor, the room is packed. So I know the economy is pretty bad. And those one-on-one appointments people can make with her or another advisor are booked until June. A lot of people are just becoming layoff. And I see individuals that come in that have been laid off since last year. the early part of the spring, and they still have not obtained employment. Philadelphia's unemployment rate has risen from about 4.5% in December to 5.3% in January.

Patrick Clancy, the CEO of Philadelphia Works, says it's consistently higher than both the state and national average. One of the challenges we face as a city is our adult literacy rate. We are severely challenged with some of our adults unable to pass a 6th or 8th grade reading MF test. Almost 40% of adults in Philadelphia struggle to fill out a job application, according to a local literacy nonprofit. The city is also the second poorest in the nation, after Houston. And Clancy says poverty creates a lot of barriers to employment. Without stable housing, going to work is really a challenge.

The same is true if you can't afford transportation, food, or child care. And on top of all of that, the labor market in the city just feels stagnant right now, much like it is nationwide, Clancy says. All the uncertainty and higher costs around tariffs have made many employers hesitant to hire for a while. And now the war in Iran and higher oil prices are just adding to that. The sooner we can have more confidence in the economy, then I think employers will feel that way too. But at this point, I think we're still in that sort of hesitant mode. And there's more uncertainty ahead for Philadelphia's economy, with Medicaid cuts looming next year.

Healthcare is one of the city's biggest industries. You're taking a hero, sir. Yeah, okay. But for all the challenges, people are getting jobs. About 70% of those who come into these CareerLink Centers find something. Every time Elizabeth Giddings learns that someone she's been working with has been offered a job, she's thrilled. I get up and go to my supervisor. I say, I got another placement, and I just be excited for them.

I let them know that, hey, you got a job. We're going to assist you. We're going to help you with transportation until you get your first paycheck. We're going to help you with the career wardrobe to get you three new outfits, so you can go on that new job looking really nice. For some people, she says that moment might come in a few months. For others, it can take a year or more. I'm Samantha Fields for Marketplace.

When's the last time you met somebody just out in the wild, you know, and made a friend? If you can't remember, well, join the club. But this being a digital economy, there is an app for that. Amara Hashem Steel is an editorial fellow at the Canadian website, The Walrus. She wrote about some of those friendship apps, and she tried some too. Thanks for coming on the program. Great to be here. Thanks.

Tell me, would you, how you came to be using these apps, these friendship apps? Yeah, it's a great question. So I started seeing ads for them all the time. And I think the way that, you know, Instagram advertising works, you look at something for five seconds and then all of a sudden you're getting a million ads. Yes. And I became really curious about whether they worked. Are you like the target demographic?

Who are these apps trying to get? get? I think in a way yes and in a way no. I think I'm the targets. I'm a graphic and that I'm Gen Z. I'm young. My job is often remote and so I don't see a lot of my coworkers face to face all the time. But I also think that these apps like really specifically target people who are working in really high earning fields where they work really long hours. And so they maybe don't have the time to invest in hobbies, but they have a lot of disposable income to put towards like kind of a paid algorithmic friendmaking service. So in 45 seconds, you tried them.

What was it like sort of experientially? Yeah. So I was a little cynical, I think, going into it about what this was going to be like. I think I did not have a lot of faith in the idea that an algorithm could actually match me with people who I could connect with. I think that I enjoyed my experience. And I came out feeling like I could see use cases for this. where it makes a lot of sense.

Like, people talk to me a lot about how it's really great for solo travelers, for example, and that makes a ton of sense. I think for me personally, as a method of friendmaking, though, I did kind of maintain my initial position of like, yeah, this probably isn't for me, but it was interesting to try. Out-of-pocket costs other than like the dinner that they set you up with, how much is this going to run me if I desperately need a friend? Yeah, so 2-2-2, I can tell you in U.S. dollars, it's 22-22, so that's kind of cute.

per month. Kind of cute. A little too on the nose, actually, but, you know, whatever. Time left, I can tell you it's 25 Canadians, so that would be something smaller, USD, but then you can get a three-month or a six-month package, and then that lowers the price even more. But then, of course, none of that includes the cost of the dinners. Right, right, right.

So that's just the buy-in, as it were. Exactly. Right. You have a great line in this piece, talking about reducing a human problem, finding a friend, right? to an interface and a price point. And boy, does that take the romance and then, well, not romance, wrong word, but that takes the sort of human element out of a lot of what's happening here if you're finding a friend. Absolutely.

And it's interesting because I think that these platforms, part of the appeal and part of why people want to pay for them, is because they do have that illusion of authenticity and kind of spontaneity, where you're not seeing, like, with something like hinge or Tinder, you're actually seeing that mechanical process and you're part of the process. where with time left or 2-2-2, you get to kind of buy into the illusion of, oh, this is just happening naturally, but in fact, like, it's a sort of technological process working behind the scenes. Yeah.

You alluded to it a minute ago, but you're done with these things, right? You'd go back if you had to, but for now, you're fine without it. Yeah, I would say ultimately not for me. I do think that that kind of solo travel use case was the one that was most appealing to me in terms of if I could ever see myself on these platforms again. But I think barring that, probably not. Yeah. Amara Hesham Steele, she's an editorial fellow at the Walrus. Thanks for your time. Thank you. This final note on the way out today in which quarterly earnings season looks set to become

semi-annual earnings season. Today, the Securities and Exchange Commission, as has long been rumored, I must say, proposed a new rule that would let publicly traded companies report their financials once every six months instead of once every three. Increased regulatory flexibility is the phrase that SEC Chair Paul Atkins used. Jordan Manjee's and Il Maharaz, Janet Wynn, Olga Oxman and Virginia K. Smith are the digital team. I'm Kai Rizal. We will see you tomorrow, everybody. This is APM. Business and the ways we do it are changing in ways that are both more subtle more radical than you realize. Welcome to compound interest from Samafour business. I'm Liz Hoffman. And I'm Rohan Giswami. We've been covering the forces behind this revolution. But now we want to talk

directly to the people driving that change. Each week, we'll talk to the operators, the experts, and the innovators to go beyond the headlines. We'll dig into everything from hospitality companies that no longer own hotels to companies that will finance your sushi order. We'll unpack the transformation of how business and consumers engage with our economy and figure out what lies ahead. Listen to compound interest from Semmel4 Business wherever you get your podcasts.