Marketplace - May CPI: glass half-empty, glass half-full

Episode Date: June 10, 2026

The May CPI report dropped Wednesday and it’s a doozy: Inflation rose 4.2% over the last 12 months. This means wallet pressure is bearing down on consumers, as wage growth lags behind price growth. On the other hand, the CPI report includes signals that inflation may have reached its peak. In this episode, an optimist’s and pessimist’s reading of the latest inflation data. Plus: Slowing immigration will have long-term effects on the U.S. economy, and summer camps shift to accommodate anxious teens.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.

On the one hand, on the other hand, two sides of the same coin. Oh, no, wait, wait, I got it. Half full, half empty. From American public media, this is Marketplace. In Los Angeles, I'm Kyle Rizzol. It is Wednesday, today the 10th of June, good as it always is, to have you along, everybody. Regular listeners to this program will know that there is rarely only unadulterated good or only unadulterated bad economic news.

Does that happen sometimes? Sure. Did it happen today? No. No, it did not. Before you start throwing things, though, hear me out, because there is, or there are, at least two sides to today's data.

Begin, we shall, with the unadulterated bad. Consumer prices were up 4.2% last month. You've heard that already. That is the year-over-year increase, and yes, it was driven in very large part, by the energy shocks thanks to President Trump's war with Iran. And that is, as Marketplace's Elizabeth Troval reports to get us going, bad news for those that the consumer price index is all about. Anybody who was filled up the gas tank or bought airline tickets recently is well aware.

Consumer pockets have limited ability to stretch. Elena Shalachova with the conference board says as energy prices push inflation higher than wage increases. That means negative implications for consumer spending going forward. If the Strait of Hormuz stays closed and the world drains its oil inventories further, energy prices could spike even higher. And Christiana Baumeister with Notre Dame says there's a risk that what's happening with energy prices could shape consumers' inflation expectations. They have been seen once again months after months since the outbreak of the war, prices rising, right? and they might just start expecting further and further increases, and that means inflation expectations might become unanchored.

That's a risk for the Fed. And even though core inflation, which strips out food and energy, is still below 3%, Baumeister suspects that measure could move up. The inflation process is a staggered process. Some companies might have taken a wait-and-see approach before passing costs onto consumers, but I think that that might still happen. You cannot underestimate the cumulative impact

that the energy squeeze and the price shock is happening. That's Olusonola with Fitch Ratings. He says that's especially true in this case-shaped economy. Free war on an annualized basis, the consumer spent about $400 billion on energy goods. Now it's running at about $600 billion. And Jason Shanker with prestige, economics says even if inflation today is driven by energy shocks, it's still more of a concern

than just a few months ago. He thinks that means a shift away from where monetary policy was headed. The likelihood of a cut is very small and the increasing probability of rate hikes means not only are consumers under pressure, but now higher interest rates often have an impact of slowing business investment. He calls it the worst of both worlds. I'm Elizabeth Troval for Marketplace. So that's one way of reading today's report. Grim, likely to stay grim for the foreseeable future. And that's not wrong. It is, however, incomplete. The glass half empty, if you will, because core inflation, which again, look at you, regular listeners, because you will know, core data does not count food and energy prices since they bounce around so much. And yes, I know we all need food and

energy, but the core data gives the Federal Reserve a better sense of which way price trends are going. Anyway, to get back to my point, core inflation actually slowed April to May. Marketplace's Justin Ho is on the glass half-full beat today. To be clear, any kind of inflation is discouraging. But Claudia Somm, Chief Economist at News Century Advisors, says when you look under the hood, There are some things in the CPI data that should give us at least for the moment some comfort. For one, SOM says we're starting to see signs that all of the inflation caused by tariffs is cooling off. For instance, furniture prices actually fell in May. Some tariff-sensitive categories got more expensive, including apparel.

But Somm says those are one-time price increases, and they're working their way through the supply chain. If it continues to process these latest goods like apparel, if they can, continue to look like the furniture goods, well, that inflation is going to subside in the coming months. Inflation in rent and vehicles is starting to cool, too. Kathy Bostjansik, chief economist at Nationwide, says new vehicle prices have only risen 2 tenths percent of the past year. So that's basically flat.

You haven't seen any real increase in motor vehicle prices. As a result, Bostjansik says it's possible that inflation has peaked, especially since gas prices have eased a bit, too. They've fallen about a quarter to 30 cents per gallon, and we think that trend continues. Energy prices are still a lot higher than they were before the war started. But many businesses are eating those costs, says Bill Adams, Chief U.S. economist at Fifth Third Commercial Bank. Often when there's an economic shock, a price shock, and it looks like it might be short-lived, businesses wait to decide how much of that price increase to pass on to consumers. inflation right now is nowhere near as broad-based as price increases after the pandemic, says Claudia Somm with New Century Advisors.

It's a more concentrated set of prices that have really taken off that's pulling up inflation. But none of this negates the more pessimistic view we heard from Elizabeth, because price levels are still higher than they were. There's no reason to panic with these data, but it's still quite a bit of pain that's working its way through with this. And that will continue the longer the war drags on. I'm Justin Howe for Marketplace. Speaking of pain, one more thing to understand about today's data, and it goes straight to the very heart of consumer America. I think we talked about this the other day. Wage growth, as we learned in the jobs report last Friday, is 3.4% year over year.

Inflation, again, 4.2%. What that means in real terms is that your paycheck adjusted for inflation is just not keeping up. Wall Street at the halfway point oh the week. Who, boy, were traders not happy. Inflation, more shooting in the Middle East, oil up. Details numbers when we get there. Immigration has been said here, a time or two, I do believe. In addition to all the other things it is, is a labor market story.

The U.S. Census Bureau says net migration into the United States last year was about 1.3 million people. That is less than half of what it was in 2024. This year, total net in migration, the sensitive bureau says, will be about 320,000. And that gets us firmly into the land of consequences, chief among them, for the sake of this conversation, economic. Natasha Serren is president and co-founder of the Yale Budget Lab. They've got a new report out, the title of which is extremely relevant to our interests. Natasha, welcome back to the program.

Good to have you on. Thanks so much for having me. All right, let's go straight to the title of this paper. Lower immigration means low. lower productivity growth. Connected dots for me, would you? Yeah. I mean, if you look at what's happened over the course of the last year and a half, the immigration

crackdown that we've seen is causing one of the most significant slowdowns in U.S. population growth that we've seen in decades. And that is showing up everywhere in the economic statistics. If you look, for example, at the monthly job numbers, what economists call the break-even rate. So the number of jobs that we need to gain in the economy in order to keep unemployment steady has dropped essentially close to zero. And the reason for that is the immigration slowdown is really weighing very significantly on labor force growth. The point of this new piece that we put out at Budget Lab is that the sort of medium and longer term consequences of the immigration slowdown are likely to be felt very significantly with respect to pro.

and growth in the economy. And the reason for that is pretty simple. If you look in the country today, something like half of Fortune 500 companies were founded by immigrants or their children. And so you're in a situation where you're just missing the people in the economy that are likely to do very significant innovation that would lead to productivity enhancements in this country. But without that immigration, we're just not going to get that. Right. It's in the language of this paper. It's would-be native-born descendants, that also decreases future business formation and productivity in this economy. That's one of the key things here.

That definitely is. And, you know, I worry about the longer term consequences here. And importantly, they're not consequences that can be reversed, even in a future administration that takes a different stance towards immigration because you're in a situation where we have already lost these people who would have otherwise immigrated to this country, had children in this country who would then contribute to the economy in these ways in the future. But also, I worry about from a longer-term perspective, even if our stance changes to immigration over the course of the near term, you're still in a situation where the world is kind of watched as this moment has passed and will make different choices about where they choose to locate their

innovation and productive capital over the course of the years ahead. That is a super important point. Even if on January 20 at 2029, we revert to not anything even close to a welcoming immigration policy, but just a status quo ante immigration policy, we've got the hole in the donut already for four years. Yeah. And we actually have estimates in our new piece about, you know, the number of missing new firms that you are not going to get in the early 2030s as a result of the immigration crackdown that we've already seen over the course of the last many months is somewhere between 9,000 and 16,000 firms. To I sort of put that into some context, that's about 3% of the growth in firms and

economic innovation that you would have expected to see in this country. You are not going to get as a result of the immigration policies that we've been pursuing. So what we're doing now, actually, is going to affect what this economy looks like in a hundred years. Oh, absolutely, in a whole host of ways. I mean, we also have estimates in the piece in 2075, so that's like 50 years after this policy shock. Of course, so much is uncertain. And there are a lot of assumptions that are baked into these estimates. But you're looking at a firm entry that is still about 4,000 to 6,500 firms smaller.

That's about 1% of the firm growth that you would have otherwise had that you will not have as a result of these policies that you've pursued. Natasha Sarin. She's at Yale Law School. also president and co-founder of the Yale Budget Lab. Natasha, thanks a lot. I really appreciate your time. Thanks so much for having me. Coming up.

They don't want to be perceived as just sitting around the campfire with campers eating s'mores. Wait, that's bad? First, though, let's do the numbers. Yeah, the Wawa's. Down, Industrial's down, 9.53, 1 in 910s, percent. 49,918. The NASDAG dropped 509 points. That is 2%. 25,169. The S&P 500 down 119. One and six-tenths percent, 7266. Heard a lot about inflation for consumers a couple of minutes ago. One big expense this summer? Travel. Airfare is up nearly 27 percent in May compared to the same time last year. Very tough sell for the major airlines. United Airlines lost six and two-tenths percent on the day. Delta gave up five and eight-tenths percent American Airlines.

Now off four and three quarters of 1%. Bond prices fail. The yield down the tenure treasury note up 4.54%. You're listening to Marketplace. This is Marketplace. I'm Kai Resdal. The Great Salt Lake, geologists will tell you, is the biggest saltwater lake in the Western Hemisphere.

For now. That's not geology. That's trend analysis because the Great Salt Lake has been drying up for decades. and the ways in which that is bad is a lot, all of which you can probably well imagine. But there are hopes that an 80-year-old technology can maybe turn things around. Amy Scott and the crew of our climate podcast, How We Survive, just dropped the new season. It's all about large-scale climate interventions.

Large-scale climate interventions like trying to make it snow in the desert. Here's Amy. It's an early morning in February, and I'm in Utah, standing on the shores of the Great Salt Lake, with my producer Haley. Looking out at the still water, I pull up an app on my phone. Current water level is 35.3%. Wow.

So it's in the red between critical and collapse. That's not good. That's not good. Rainmaker is a modern cloud seating company that claims it can stop the lake from drying up within six years. It's the plan. I think it's doable. Yeah.

Augustus DeRico is the company's founder. He says historically, cloud seating has been done using airplanes or ground generators to disperse the seeding agent, typically silver iodide. Rainmaker uses drones and radar technology. All right. You want a skedaddle? We pile into a big SUV to go seed some clouds in Camus, Utah. about an hour east of the lake. In an open field surrounded by mountains, Louis Mooneyer is prepping a drone for launch.

And we just try to do it as fast as possible, just so we can get as much airtime as possible and not miss the conditions. Does this drone have a name? EL for Elijah. Yeah, so Elijah 119. If you're not caught up on your biblical references, Elijah is a prophet whose prayer for rain ends a year's long drought. After a temporary groundhold from the FAA, Take off.

That is our quadcopter ascending for a cloud seating mission at a relatively low altitude here in the Wasatch. So that drone is just going to fly straight up to its strafing altitude, and then once it gets there, it'll strafe back and forth until it's fully depleted the airso dispersal system within it. DeRico says flights like these can produce tens of acre feet of water. An acre foot is the equivalent of one acre of land, about the size of a

football field, covered in water one foot deep. And it costs about $80 per flight. But today was kind of a bust. Though the clouds had the right temperature, they were just too diffuse to produce snow. You need pretty particular conditions. So, I mean, successful in that drone flew well. Everybody's having a good time. That's nice. Dorico says they'll get better over time and is confident they can not just stop the lake from drying up, but even refill it. Lots of doubt should be cast on that claim. Jeff French is a professor of atmospheric science at the University of Wyoming. There's no scientific evidence in terms of what cloud seeding can do to be able to support a claim like that.

In its 80-year history, cloud seeding has never generated. so much rain or snow that it's made a radical difference. When I posed some of this pushback to Rainmaker, they said, quote, the assumption that cloud seeding is not enough to halt aridification is based on how legacy cloud seeding companies operate. We are the first company with the ability to meet the scale of the problem. Using drones and radars allows Rainmaker to seed clouds in conditions most piloted aircraft would avoid windy, icy, close to the mountains, and to measure how much precipitation they're creating.

But Dorico acknowledges that saving the Great Salt Lake will require water conservation efforts, too. It's like if you got shot and someone offered you a tourniquet, would you not still go to the hospital, you know? It's like cloud seeding is a tourniquet for our water supply situation. But nevertheless, we have to approach. water scarcity from a multifaceted perspective. The Trump administration has asked Congress to approve $1 billion in funding to restore and protect the lake. In Camas, Utah, I'm Amy Scott for Marketplace. As I said, Amy and the team have been hard at work. There's a whole new season of how we survive

available four-year-old listening pleasure right now. Subscribe, obviously, wherever you get your podcasts. Here's one for the 16 to 19 year olds among you, or perhaps more accurately, the parents of same. The unemployment rate for 16 to 19 year olds right now, this is data from the Federal Reserve Bank of St. Louis, is almost 15%. So you'd think teenagers would be eager for pretty much any job they could get. Turns out, though, that one of the classic summer jobs, Camp Counselor, is losing some of its appeal. Alina Dizzik had the byline in a story I saw on Bloomberg the other day. about how sleepaway camps are changing to keep their counselors coming back.

Elena, it's good to talk to you. Thanks so much for having me. I will say at the outset, this sounds mildly terrifying and frankly horrifying. Would you please tell me why teenagers are hesitant about working in summer camps? So teenagers are hesitant about working in summer camps because there is so much emphasis on what you're doing in the summer in terms of internships or summer jobs that can really build your resume for college and beyond. They don't want to be perceived as just sitting around the campfire with campers eating s'mores. Honestly, this is a lamentation of days lost, I suppose.

But what sorts of things are camps doing to make it more attractive to get these? It must be said, not extremely well-paid teenagers to come work for them as counselors. Yeah, so camps are really interested and having old campers come back as counselors. And in order to make it more worth their while, they're basically offering them kind of internship-like experience. So helping them with their resume, making sure that they get to intern, maybe in the video department or doing social media,

they're really trying to make these feel more career-focused. There was this one kid in this piece who's going around at, like, camper orientation or something, introducing himself to parents and networking that way? So, yeah, there's kids that have to kind of talk to the camper parents. And, you know, at the same time, it gives them an ability to, you know, see what those parents do. And so they're just, they're being a little bit more specific about what they're getting out of these experiences. So for all the Sturman Drong here, and it has to be said, all the expense. Like, is it working for these kids? Is there a payoff to this, you know,

camp gamification, I suppose? From the kids that I spoke to, there is definitely a payoff. They're meeting alumni who are helping them, you know, decide between colleges. The alums are helping them get jobs and network. And they feel really lucky to be able to attend these camps. Must be pointed out that these camps are not cheap. I think seven weeks for 15 grand, I think, is what you point it out? Yeah, these camps definitely are not cheap. So some of them are $8,000 for four weeks. They're a significant investment. All right. So look, you did the reporting on this when you talked to these people. Give me the subtext, if you would, because as I said up at the top, I understand that the economy has changed, but man, this is kind of sad. I think the subtext would be that in order for the

children to keep going to these camps, they have to kind of really understand what they're getting out of these camps and really be able to verbalize what it is that these camps have given them. And so the parents are aware and the camps are aware that no one's going to continue to pay them unless they can, you know, make a case for it. Right. And it goes without saying, but I do have to kind of say it. It's a very nice to have problem, if you will, right? it's a very first world problem. Definitely.

It's a very first world problem. And interestingly, some of the admissions consultants I spoke to said that they often don't even recommend folks putting their camp experience on their application because it seems like too much of a first world problem. Did you go to sleepway camp when you were a kid? I went for one year and unfortunately was not invited back. Oh, no, no. Oh, no. Well, I guess that solved a certain set of problems, didn't it?

I guess so. I guess so. More immediate problems, I guess. That's right. That's right. Alina Dizek, writing in Bloomberg about summer camps and the ways they have changed. Alina, thanks a lot. I appreciate your time. Thanks a lot. Thanks for having me. This final note on the way out today, which comes with an eye toward the calendar, the entries of which for next Tuesday and Wednesday show us that the Federal Reserve is going to be meeting to talk about interest rates, new chair, Kevin Warsh's first meeting. We did a story a couple of weeks ago about how the big central banks, I think it was Mitchell Hartman,

who did the story for us, about central banks in Canada and the UK, Japan, and Europe, as well as the Fed, are being pulled in different directions, which is a little bit unusual. They often move together, those big banks do. Well, anyway, all of that is too long a wind-up to tell you that today the Bank of Canada held its main interest rate steady, but did warn, and this is their word, of a policy dilemma, slowish growth and rising inflation in case that sounds, you know, familiar. Our media production team includes Brian Allison, John Fokie, Montana Johnson, Drew Jostan, Gary O'Keefe, and Charlton Thorpe. Alex Simpson is the manager of media production,

and I'm Kai Rizzdahl. We will. See you tomorrow, everybody. This is APM. Cloud seeding has been around since the 1940s. It involves releasing silver iodide particles into clouds, which cause water to freeze and fall out as snow or rain. And while the jury's still out on its potential as a water management tool, it's become a global industry nonetheless. I'm Amy Scott. And this week on the How We Survive podcast, we're talking to Augusta Storrico, a 25-year-old former Teal Fellow and the founder of Rainmaker, the business that's racing to save the Great

Salt Lake from collapse. cloud seeding is a tourniquet for our water supply situation. Maybe a damn good one, maybe more than a tourniquet. So is cloud seeding at scale the godsend solution it seems to be? Find out this week on how we survive, available on your favorite podcast app.