Marketplace - Still looking

Episode Date: January 24, 2025

Though first-time unemployment filings barely ticked up last week, continuing claims hit a high not seen since 2021 and nearly 1.9 million Americans are receiving jobless benefits. What gives? A mix of hiring freezes, the time of year and choosy job seekers. Also in this episode: We compare today’s labor market to how things looked just before the pandemic began. Plus, three cities where rents are falling and a visit to a 24-hour diner.

We'll go heavy on the labor market today and we'll grab a bite at a 24-hour diner. From American Public Media, this is Marketplace. In Los Angeles, I'm Kyle Rizdall. It is Thursday today. This one is the 23rd of January. Good as always to have you along, everybody. Thursday mornings bring with metronomic regularity a report on first-time claims for unemployment benefits.

It bounces around a lot. That number does. Volatility is what economists call it. So most of the time, first-time claims doesn't really rate a mention. And today, in fact, those first-time claims barely ticked up just a teeny little bit, but continuing claims for unemployment help, that is people who've been getting benefits for at least a week rose more than expected, which means almost 1.9 million people right now

are receiving unemployment benefits. And that is the most we've seen since November of 2021. Marketplace's Kaylee Wells has more on why and why it matters. Some industries saw a fair number of layoffs and hiring freezes in 2024. Allison Stevens is Senior Director of HR Solutions at Paychex and says they're partly to blame. I think in some pockets, the market might be flooded with qualified candidates.

And on top of that, Stephen says people might also collect unemployment longer because they're being Much more selective with the roles that they're seeking, such as they have decided they must work remotely or they if they are going to go into an office, it's only going to be within a certain geographical distance from their home. Which is actually good for the economy because employees are more likely to stick with and excel at a job if they wait to find one that's best for them. But there's something else going on here.

It's January. January is always like this. Michelle Evermore, with the Century Century Foundation specializes in unemployment insurance. Every employment insurance agency, if you ask them, will say it's their busiest month. The industries that you see decline in January are seasonal holiday-related, travel-related, retail and construction and outdoor stuff. So there are more unemployed people this week and people are staying unemployed longer. But Elise Gould with the Economic Policy Institute says she's not worried.

But when I look at continuing claims as a share of the labor force, it's basically the same as it was pre-COVID. She says, sure, it's not as low as it has been in the past three years when the labor market has been really hot. But long-term? I would say that it's been pretty stable over the last couple of years, you know, maybe a little bit of an uptick, but again, layoffs remain low. Things are still pretty strong.

And remember, she says the population is still growing, so we might be seeing more unemployed workers, but we're also seeing more workers in general. I'm Kaylee Wells for Marketplace. President Trump said something today that deserves a mention. He did a video conference with the World Economic Forum in Davos and he said lots of things. But this one is right in our wheelhouse. With oil prices going down, I'll demand that interest rates drop immediately and likewise they should be dropping all over the world. Interest rates should follow us. Central bank independence on monetary policy is kind of a bedrock of stability in this

economy as we talked about a lot before this election. That is item number one. Item number two is that a lot of the president's proposed policies are in and of themselves inflationary, which absent political interference would dictate higher interest rates. Traders on Wall Street again seem to have been in a buying mood. We'll have the details when we do the numbers. The corporate news of this Thursday comes to us from Detroit, Michigan, the headquarters of the General Motors Corporation, which said today it's going to try and grab a bigger slice of the luxury EV market, specifically with a fancier version of its Cadillac Lyric SUV.

But when the average price of an EV already tops $50,000, how big a market can there really be for something even pricier? Marketplace's Nancy Marshall-Gensler's on that one. The price of this latest Lyric EV starts at nearly $80,000, hardly a bargain. But in the EV world, luxury is in. The EV market is lux-heavy. Elaine Buchberg is a former chief economist at GM. She says in model year 2024, there were more than 30 EV models that she considers luxury or premium compared to only around 20 cheaper models.

And she says EV buyers wouldn't necessarily blink at an $80,000 price tag. One reason, Buckberg estimates with a gas price of, $3.15 a gallon. An EV owner could expect to save about $1,000 to $1,200 per year because it's cheaper to charge at home versus buy gas. You can also get a longer battery range with a higher priced EV. And then there are the early adopters. Sean Tucker, lead editor with Kelley Blue Book, says some people will even shell out $100,000 or more for really high-end EVs. I think there's a cache essence.

These are extremely high technology vehicles and, yes, it's the latest thing. And often when you're shopping in that price range, that's what you're looking for. But there are limits. Jessica Caldwell is head of insights at Edmonds. She says the market for EVs selling for $100,000 or more is really quite small. $100,000 EV is not going to be, you know, sell like hotcakes. It's just no one can afford it. Caldwell estimates that EVs with six-figure price tags are just a fraction of the market, probably less than 1% of all vehicles sold.

I'm Nancy Marshall Genzer for Marketplace. New York City bills itself famously as the city that never sleeps, and for years the all-night diner was a critical amenity for all those very late night or very early in the morning New Yorkers. Since the pandemic, though, those 24-hour diners have been disappearing as New Yorkers sleep habits have changed. But those that remain open in the wee small hours do have a story to tell. Priya Krishna is a food writer for the New York Times and she pulled an all-nighter of her own at Kellogg's Diner in Brooklyn. Priya, welcome to the program. Thank you so much for having me.

Tell me why you chose Kellogg's, would you? I thought Kellogg's is a really great example of a 24-hour diner in that it has existed for a century. It closed during the pandemic, and then it sort of bucked this trend that we've seen of 24-hour establishments either closing or curtailing their hours and reopened as a 24 hour establishment. So I thought it perfectly combined old and new. And it is by the accounts that you give, it was hopping pretty much the whole time. You were there 8pm to 8am, right?

That's correct, yeah. So interesting clientele changes through the evening. I did want to touch on a couple of those folks. First of all, you have the regular sort of evening goers who are just out for a good meal and they go to a diner in New York City, which struck me as interesting. Yeah. I mean, I think one thing that's really interesting about Kellogg's is it has these two really amazing chefs Jackie Carnessi and Amanda Perdomo behind it. So it has a little bit more food cred than your average diner. So I think people who had heard of the chefs, had heard the food was good and was sort of treating it like a culinary destination, which I thought was very interesting.

I will point out here, and I was interested to see that there is a $95 rib-eye steak on the menu for this diner now. I understand New York City is expensive, but my goodness That was a really divisive one a lot of the diners Especially a lot of the diners who had been coming there for 30 40 years were really shocked to see Anything that cost $95 on a diner menu. I did ask the server and the server said that I think in her entire tenure as a server at Kellogg's, only three people had ordered it. Yeah, well, there you go.

It was interesting to me that of the people you surveyed through the evening, a couple of them, here's one quote, apartments are too small, everyone needs somewhere else to be. And then another woman said, we need a place to go. Very much a third destination place, right? You got your home, you got your work, and now the Kellogg's Diner, it seems. And I think diners have always served that purpose. It was heartwarming to see that the diners still serve that purpose.

Yeah, the other thing they do, or I guess the other thing they are not, is fast food, right? Because a lot of places, and look, I don't go to many all-night diners here in Los Angeles, but I bet fast food places outnumber 24-hour diners by a significant amount. They definitely do. And I brought up fast food establishments

to these customers asking, you know, why not go to a McDonald's at three o'clock in the morning? And a lot of them spoke to this idea of wanting to sit down and have a proper restaurant experience and be served like a hot homemade meal and how diners are really one of the few establishments providing that at three o'clock in the morning. Yeah, the staff didn't give you any hassle

about sitting there for 12 hours, which was kind of cool. It was really interesting, and they definitely had no idea who I was. They had no idea I was a restaurant critic. I was just there with a rotating cast of friends. I told my friends to keep ordering because we needed to justify our existence. Wait, wait, so you sat there from eight to eight,

but you had friends come for like a couple hour shifts? Is that the deal? Yeah, exactly. I had a spreadsheet, so I had like friends come from eight to 11. So who drew the two o'clock in the morning shift? That's what I wanna know. Is that like the lowest friend on your totem pole?

No, I want to shout out my friend Jay, who stayed from eight p.m. to eight a.m. He never left. Go Jay. Go Jay. Did you eat? What did you eat? Gosh, I feel like we covered a good chunk of the menu. We had Caesar salad, we had shrimp cocktail,

we had the passion fruit pie, which is my favorite thing on the menu, and lots of chocolate mint shakes. You are a trained restaurant critic. What did you think? I thought the food was really good. I feel like it was certainly better than a lot of diner food, but it was kind of, it wasn't too fancy. And I almost feel like at a diner, the food doesn't need to be anything fancy or super special. It just needs to satisfy and nourish. And I think the food at Kellogg does just that. Right. Right. Diners are not necessarily about the food. Priya Krishna at the New York Times. Priya, thanks a lot. I appreciate it. Yeah. Thank you. Coming up. We like the big open space.

We have giant windows that are Arctic grade. Twenty-three degrees was the high in Fairbanks, Alaska today. First though, let's do the numbers. Dow Industrial is up 408 points today, nine tenths of one percent, 44,565 for the blue chips. The Nasdaq added 44 points, two tenths percent, 20,053. The S&P 500 gained 32 points about a half percent 61 18 strong demand for holiday and corporate travel helped Alaska Air beat its fourth quarter profit estimates and predict a smaller than expected loss for this quarter shares climbed just under 2 and 2 10% today. American Airlines on the other

hand said its profits for 2025 are not going to meet expectations thanks to higher prices for jet fuel and the sales strategy that seems to have driven away corporate travelers shares down eight and 3 quarters of 1% they bond prices were down as well the yield on the 10-year TNOTE thus ruzz 4.64 percent for the 10-year you're listening to marketplace Hey, it's Kai. My minivan and I, as I've said on the radio, have logged a lot of miles with Marketplace. Luckily, it's still running, you know, pretty well. But if your car doesn't drive as well as it used to, listen up.

It can still help drive Marketplace. When you donate your old car or truck, we'll use the proceeds to support the great programs you hear every day. Start your vehicle donation at marketplace.org slash vehicle. This is Marketplace. I'm Kyle Rizdahl. February 2020, going on five years ago now, was the last gasp of full month data that we had for the pre-pandemic economy.

And things were going pretty well. The labor market was on a roll, adding jobs at a healthy clip. Unemployment was at three and a half percent. By April of 2020, of course, the pandemic in full swing. Twenty two million jobs disappeared and unemployment peaked that month just shy of 15 percent. And it seemed, at least for a bit there, if we're being honest, that things might never get back to normal in this labor market.

But they did. As you know, we're now well ahead job wise might never get back to normal in this labor market. But they did. As you know, we're now well ahead job wise of where we were in the before times. But it's not like nothing's changed. Here's Marketplace's Mitchell Hartman. Mitchell Hartman There are now about seven million more jobs in the U.S. economy than in February 2020. But there'd be 11 million more if we'd kept adding jobs at the same pace as we did in the five years before the pandemic. So we've fallen behind the pre-pandemic trend, right? Not exactly, says Harvard economist Jason Furman. Right now we have 3.5 million more jobs than the Congressional Budget Office had been expecting for this point in time prior to COVID.

Here's how the math works. In the five years before the pandemic, unemployment fell from five and a half to three and a half percent. But no one expected the economy to keep adding jobs at the same rip-roaring pace over the next five years, which would have meant unemployment falling to like one and a half percent, which economists will tell you pretty much can't happen. What did happen despite the pandemic is job creation surged ahead of expectations. One big reason says Furman, there's been a huge flow of immigrants into the country, filling open jobs, generating new ones. The pandemic also brought big changes in how we work, says Jane Oates at Working Nation.

Since COVID, we've seen fully remote, hybrid, and everything in between, except some of the mandatory frontline work, construction, manufacturing. About one in four employees were working from home or a remote location sometime in December, including this guy. My name is Jar Doyle. I am the country manager in the U.S. for Manpower Group. Doyle started working at the Global Staffing and Recruitment Agency in 2020. I lived and breathed the whole roller coaster that we've had. I interviewed remotely, onboarded remotely, based here in Florida, even though I hitch queues in Milwaukee. G.J. Doyle sees employees continuing to demand more flexibility in where and what hours they

work. There was a downside to remote work early on, especially for working mothers, says Jasmine Tucker at the National Women's Law Center. She had a one and a half year old at home when the pandemic hit. It feels so long ago, five years ago, but we were all here with little kids, virtual learning with bigger kids. It was it was a really stressful time. She says five years later, it still is. We only just saw in 2024, the childcare sector recovered the

jobs that it had lost. Look at population growth. There's no way pre pandemic childcare workforce levels are going to be meeting the demand. The pandemic also shook up the labor market, untethering people from their previous jobs and careers. Job quitting and salary offers initially surged as employers scrambled to staff up again. Five years on, the job churn has calmed way down, says Jane Oates at Working Nation. People are not quitting. They seem very content in their jobs or nervous to leave. And employers are not laying off. Because they still face a skills shortage, says Jair Doyle.

And to retain employees, they're trying to prevent worker burnout. Mental health support, work-life balance, workplace inclusivity has been huge. Five years after the pandemic disrupted pretty much everything, or burnout. B.P. R. R. R. Mental health support, work-life balance, workplace inclusivity has been huge. G.D. five years after the pandemic disrupted pretty much everything, University of Michigan economist Betsy Stevenson takes a broad view of where we are now. B.P. It actually gives me a lot of hope for the future.

The American labor market has always been very well suited to having people reinvent themselves. very well suited to having people reinvent themselves, upskill, re-skill, change skills, find a new path. Nat. And become more productive. Jennifer We ended up with the most dynamic labor market among developed countries. We've seen real wage growth, GDP growth, high labor force participation.

Nat. growth, GDP growth, high labor force participation. The kind of economic dynamism that Stevenson says characterized the U.S. back in the 20th century but hadn't been much in evidence in the 21st until the pandemic came along and shocked us into reinventing our economy. I'm Mitchell Hartman for Marketplace. place. It'll cost you on average $1,965 a month for the typical rental in this economy right now. That's across the entire pool of rental units nationwide, so of course, your mileage may vary.

Point is, though, that that's up a relatively reasonable 3.4% over the past year, so says a report out this week from Zillow. And while rents are rising in most parts of the country, a couple of three cities are bucking that trend and offering some economic insights, as Daniel Ackerman explains. Denver, San Antonio, and Austin were the only metro areas where rents fell last year. What's so special about those places? In some sense, there's nothing special about them. Aniban Vasu is CEO of Sage Policy Group. He says in recent years, a number of cities in the south and west saw huge growth,

along with rising housing costs. Vasu says apartment builders saw the demand and got to work. But even in a good market, the market can become saturated, there can be overbuilding. And so when all of that capital flew into those markets to develop new properties, all of a sudden there weren't enough tenants. Across the country, rents are still rising, but at a slower rate than before the pandemic. Denver, San Antonio, and Austin

just happen to be the cities where rent growth has gone negative, says Igor Popov, chief economist at Apartment List. Rents are not falling in those places because they're becoming less popular. Popoff says people moving there now have more options, including a bunch of shiny new apartment buildings. The projects that started back in the really high rental demand, low interest

rate environment of a couple of years ago, those are finally hitting the market now, and it's a very different market than when they broke ground. For one thing, it's more competitive for landlords. Emily Blair is executive vice president at the Austin Apartment Association. She says some owners are offering concessions. Maybe a floor plan upgrade or a couple of months free. So when you see a lot more supply, it does increase renters' ability to have more choices in housing and increases their affordability options as well. And with more new units set to come online this year, Blair expects the concessions to continue.

I'm Daniel Ackerman for Marketplace. I think we mentioned last week that housing starts were up at the end of last year, more ground being broken for more new homes. That's kind of interesting because the cost to build is way up. Construction materials will set you back 40% or more now than they did in 2020. And the average rate on a 30-year mortgage is still around 7%. Of course, you could just build yourself to keep costs down. Here's today's installment of our series, Adventures in Housing. My name is Justine Schmidt and I live in Fairbanks, Alaska. I've lived here about six years. It's a lovely cold place.

Me and my partner, Josh, saw this property up for sale on a bike ride once. And we were like, you know, that's a great spot. It's at the end of a dead end road. It like goes right up against state land that there's a bunch of trails on. It was pandemic time, so we had a bunch of, you know, pent up energy and I'd saved some money, you know, so we were like, this is a great idea. some money, you know, so we were like, this is a great idea. We built and designed and did the whole thing from the ground up, starting with cutting down all the trees and stacking all

the firewood that we're still using. We started in 2021 and we moved in last fall. So there's a fun thing about living in Alaska, especially we're outside of like the town of Fairbanks, right? There's very little regulation. So there's a lot of people kind of like us who have almost no experience in construction and are like, you know what, I can do this. And that means a couple things.

One that you can kind of build what you want, which is really cool. And then the second thing is there's a lot of houses that end up for sale that are really weird. We built basically a large box. We have no like indoor walls and like doors, which we're fine with because it's just the two of us. We like the big open space. We have giant windows that are Arctic grade. And the walls are super thin.

A little less than 200,000 is how much this house cost us to build, which, you know, housing prices are different all over the place, but we definitely could not have gotten this house on the market for that much money. You know, I think a lot of people would come into this house and it is not like a normal house, right?

It's all open. But it is like exactly what we wanted. I think we both feel very like connected to our house. Like it's a little baby that we had. It's our child. Justine Schmidt, just outside Fairbanks, Alaska. Tell us about your adventure in housing. Would you do it yourself, giant big box or professionally built with all the bells and whistles we want to know?

You can reach us at marketplace.org. This final note on the way out today, consider it a public service announcement for those of you who use public computers from time to time. Starting next month, Microsoft says it's automatically going to keep you logged into your account unless you sign out. You see how this could go wrong, right? Log out, people. Just log out. Get used to doing it. Computer hygiene. It matters. John Buckley, John Gordon, Noya Kaur, Diantha Parker, Amanda Picher, and Stephanie Sieck are the Marketplace Editing staff. Amir Bibawe

is the Managing Editor, and I'm Kai Rizdal. We will see you tomorrow everybody.