Marketplace - That snooze-fest jobs report is probably a good thing

Episode Date: July 2, 2024

Tuesday’s jobs report showed 200,000 more openings in May than the previous month — pretty yawn-worthy compared to the labor market roller coaster of the past few years. But don’t fret! All that boring data is actually a sign of stability. Also in this episode: Why organic produce is expensive to grow, what it’s going to take for global power sector emissions to fall, and which type of construction is dragging sector spending down.

Number one, help wanted, apply within. Number two, hey, anybody have a file folder? And number three, what's your color palette? From American public media, this is Marketplace. In Los Angeles, I'm Kyle Rizdall. It is Tuesday today, the 2nd of July. Good as always to have you along, everybody. A quick update on Jay Powell's whereabouts as a way to get us going today.

The Fed chair is in Centra Portugal, tough duty, I suppose, for a conference organized by the European Central Bank. There was some incremental news to be had. Powell says there has been, quote, real progress on inflation, but the Fed wants to see more, please, more progress and more data. They and we will get more data on Friday with the June unemployment report. And there was a labor market preview of sorts this morning with the May job openings and labor turnover survey.

Say it with me now, Joltz. If you are out there looking, there were 8.1 million job openings to be had in May. That's about 200,000 more than the month before. Overall, the number of job openings has been bopping up and down the past couple of years, but generally trending down. And as Marketplace's Sabri Benishaw reports, that's okay. So here is one way to look at the latest numbers on the labor market, courtesy of Matt Penahty, senior advisor at Capital Advisors Group.

I would say the report was a bit of a snoozer, honestly. But another way of looking at it is... It's a very boring report. Nick Bunker is director of North American Economic Research at Indeed. And okay, everyone thinks it's a boring report. And I'm glad to see that. Because the numbers are dull for a good reason. Matthew Luzzetti is chief U.S. economist at Deutsche Bank.

They tell an important story about the labor market, that the labor market has come into much better balance over the course of this year. So looking at specifics, 2.2% of workers quit their jobs in May. That is three and a half million people who likely felt comfortable enough with the job market to leave their current jobs. Last year, that number shrank a lot. But this year, it stopped shrinking. It's been the same for seven months now.

So the quits rate has returned back to and actually below 2019 levels. And it has been a good sign that the quits rate has stabilized. Similar story with hires. 5.8 million people were hired in May, about the same as the month before. There were 8.1 million job openings, a bit more than the month before. Again, indeed, Nick Bunker. That 8.1 million is around the range, frankly, you'd want to see right now in the US labor market. That's a sign of a fairly well-balanced, stabilized labor market.

Only a couple years ago, people were calling the labor market boiling, red hot, an inflation driver, unsustainable. It is natural, especially with the Fed having raised interest rates, for that labor market to have cooled down. The logical fear, though, in that situation is that something that is cooling can become cold. Capital advisors group's Matt Pagnati says that fear is fading. The market is cooling, but maybe a better way to describe it is that it's normalizing.

A normal job market is a boring one, and that, he says, is just fine. In New York, I'm Sabri Benishur for Marketplace. Not all that boring on Wall Street today. Couple of record highs in this holiday shortened week. We will have the details when we do the numbers. The four or so years since this economy was in the depths of the pandemic have been pretty good ones for construction spending. There is, after all, a housing shortage to make up for as we report regularly on this

program. There's all that federal money from the CHIPS Act and the infrastructure law that's pouring into new projects. We talk about that too. And yet construction spending actually fell April to May. That's according to new data from the Census Bureau. Didn't go down a lot, to be clear, just a tenth of a percent, but it is the first decline since October of 2022. Marketplace's Kayleigh Wells has more on whether that might be a blip or the start of something else. It's more than a blip. The tenth of a percent number doesn't tell the whole story, says Jay Bowman. He's at engineering and construction consulting firm FMI.

The idea that there's this monolithic construction industry is unrealistic. Bowman says parts of the industry are doing just fine. Think public infrastructure funded by that flood of government support. The decline is in the residential sector. I would say that is the most economically sensitive part of the construction industry because you're talking about individuals and their pocketbooks. And the culprit that's hitting those pocketbooks hardest? Interest rates. A project that would have made sense for a developer two years ago doesn't make sense

where interest rates are. Brian Turmail with the Associated General Contractors of America says even amid a housing shortage, higher interest rates sap a consumer's buying power and a developer's ability to finance projects. We have heard anecdotally from many of our members about ranges of projects that have been delayed, postponed, or canceled because they no longer pencil out, they no longer make financial sense, because interest rates are so high or just hard for developers to get financing.

And the obstacles don't stop there. Chief economist Aniban Basu with the Associated Builders and Contractors says some post-pandemic woes have lingered. Supply chain issues that keep materials in short supply and highly priced. We've got skilled labor force issues, meaning we don't have enough skilled construction workers, which also drives up costs. All of that really throws water on the housing market.

You just can't make a love connection because there are people who want housing, but they can't afford what builders are able to supply under current circumstances, and that's where we are. Basu expects this downward trend to continue continue and the most likely way to reverse it is an interest rate cut from the Fed. I'm Kayleigh Wells for Marketplace. All right, take a guess. What is the dollar amount of organic food sales in this economy last year?

Total dollar amount of organic food sales in this economy last year. Total dollar amount. If you said $67.6 billion, you would be right. That's more than doubled in the past 10 years. The top seller, according to the Organic Trade Association, whence this data comes, is produce. No surprise. And those organic fruits and vegetables sell at scale despite coming in at a higher price point than their conventionally grown counterparts. There is demand for one thing.

Also though, input costs for organic farmers are just higher. They can't use most synthetic fertilizers, herbicides, and pesticides. And so instead they have to rely on other methods, including more labor. Marketplace's Stephanie Hughes went down to the farm. When David Paul passes a weed on his farm, it's hard for him not to pull it out. That's amaranth. This one we don't like. This one will produce a lot of weeds, seeds. The weed we don't like is living among the shallots we do on Sassafras Creek Farm, 50 acres in St. Mary's County Maryland. All the crops from arugula to

zucchini are certified organic, which means no synthetic herbicides to keep those weeds from growing. And weeds are expensive. This is one of the reasons why organic foods cost so much is that do your best you can and you're still going to be hand weeding. David runs the farm with his wife, Jennifer. We're co-owners, yep. He's definitely the farmer in chief, using military terminology as the chief. Jennifer works full-time for the Navy as an environmental protection specialist.

David was active duty until he retired in 2011. Organic farming is their midlife second career, bugs and all. These are potatoes, and here is an insect that wants to eat it. There's another one. It's a Colorado potato beetle larvae. Jennifer starts picking off some of the shiny brown insects.

I join in briefly. It's addicting, yes. We call them Jabba the Hut and typically what we do is squeeze them, but the problem with that is it squeezes in your eye and then it's kind of unpleasant. Bug picking and weeding is not something the poulks do all by hand. They sometimes use naturally derived pesticides approved for organic farming. For weeding, one method is to plow with a tractor to uproot the weeds, what David Pulk calls steel in the field.

But either way, the poulks know some of their crops will succumb to bugs or weeds or disease. You end up having to plant often more to produce the same volume of harvest as a conventional farm would. That cost of that production has to get reflected in the price. That price also has to be what their customers in rural southern Maryland consider affordable. At the local farmers market a half pound bag of their salad mix goes for five dollars. In the pack shed a couple of the PULK's employees are washing vegetables and bagging greens

for the farmers' market. They'll use one of the farm's capital expenditures, bought in 2017. This is called a rinse conveyor. We know it as Mr. Scrubby. David calls Mr. Scrubby a washing machine for vegetables. He says it's popular on smaller farms that want to save on labor. And that savings is especially important for organic operations,

even bigger ones, where labor is still a giant expense. Ideally, it's 40% of our sales. If it ticks over 40%, we're in trouble. Anais Bedard owns Lady Moon Farms with her dad, who started it in the 80s. It's a combined 3,000 acres in Pennsylvania, Georgia, and Florida. Badard says in the last three years, their labor costs have gone up 30%. Their prices? Up only 3%. So we're working on like razor-thin margins right now.

Badard says there is new equipment that could help. But Lady Moon has many crops, which it rotates to keep the soil healthy. That's one of the key practices of organic farming. And Bedard says if she's going to spend hundreds of thousands of dollars on a new piece of equipment, it needs to multitask. And so if you're a monocropping giant who just does tomatoes, you can invest in all of that because this new equipment will work across all of your acreage. But if I buy a new piece of equipment, it might work for tomatoes, but not lettuce. And then that doesn't make sense for me financially.

Badaard is focused instead on how to change the workflow. How much time is it taking a person to walk their box to the trailer and then back to where they were in the field? And how can I reduce that to save on the total labor costs? Badaard says thinking about this kind of thing keeps her up at night, but she's betting on herself and this way of growing food. And David Polk at Sassafras Creek says he also believes

in organic farming as both a mission and a business. It may not be easy, but that seems to be where the action is. In other words, the future. In St. Mary's County, Maryland, I'm Stephanie Hughes for Marketplace. We launched a new series yesterday called My Analog Life, your stories looking back at how much technology has changed your job. So pull out those Manila folders and flip on through your memories of your job from

way back when. My name is Lisa Centron and I'm a digital marketer of 20 years. I've recently retired from that and now I own a store in Clearwater, Florida. My first job was holiday spa. Spa. Holiday Spa was the precursor to 24 hours fitness back in the 80s. That was my first job. I was a file clerk along with five other girls and this was corporate. So we had hundreds of locations in the United States and we were doing all the filing from all of those locations. It was crazy. Tons of file cabinets everywhere just lined up. Each customer had a folder and that folder had maybe you know quarter to a half inch of paperwork in it. We would come in, look at our desk, see what was there

to file and then we would take care of those first. And then as we were working, we would always get more piles. We had a lot of paper cuts and they burned. We always had the music on Led Zeppelin, Rush, even Ozzy Osbourne. I remember that from then. And we can play it as loud as we wanted.

So the boombox would just reverberate through through the back room with all of the file cabinets. With my part time salary, I could pay rent and a car payment. I'm sure it was minimum wage. I can't remember what minimum wage at the time, but we could do a lot with that money. I'm sure people remember that. That was like, can't do that nowadays. No, you can't.

We want to hear your memories of your job back in the day, whether it was a long time ago or maybe not that long ago at all. There is a place you can do that at marketplace.org slash my analog life. Coming up. Your skin and your eyes and everything are loving the warm colors. Why thank you. But first, let's do the numbers. Dow Industrial's up 162 today, four tenths of 1%, 39,331.

The NASDAQ gained 149 points. That is eight tenths percent, 18,028. On the NASDAQ, the S&P 500 picked up 33.6%, 5,509. Following Stephanie Hughes' story on organic food growers, 5500 picked up 33.6%, 5509. Following Stephanie Hughes' story on organic food growers, let's check in on some publicly traded sellers of organics. Sprouts Farmers Market shrank 7 10%. United Natural Foods slumped about 1.3%. Natural Grocers by Vitamin College climbed,

cottage rather, not a college, just a cottage, small building, not a college, climbed 1 8 10% today. Food a college. Climbed 1 and 8 tenths percent today. Food and Drug Administration has approved Eli Lilly and company's new drug to treat Alzheimer's disease. The therapy is called Kinsula and costs roughly $32,000. For the first year of treatment, shares of Eli Lilly daved 8 tenths percent. Today, Tesla posted better than it predicted. Quarterly results sales were down, but not as much as expected. This being capitalism, Tesla accelerated 2 and two-tenths of 1%. Dave Bondsrose yielded on

the 10-year T-note down 4.43%. You're listening to Marketplace. This is Marketplace. I'm Kyle Rizdal. There's an energy think tank over in the UK. It's called Ember Climate, which was out earlier this year with a bold and somewhat heartening prediction that the global power generation industry has officially passed peak greenhouse gas emissions. Power generation is, of course, responsible for more than a quarter of the emissions that are heating up the planet, burning coal mostly. And we have been putting ever more of those gases into the atmosphere since the Industrial Revolution until this year.

Maybe. Marketplace's Daniel Ackerman has the mid-year update. Here in the U.S., power sector emissions have actually been falling for almost two decades. That's thanks to a shift away from coal toward energy sources like natural gas and renewables, says Glenn McGrath with the Energy Information Administration. Much more wind and much more solar on the system, and they are the key drivers of the emission reduction. Zoom out to the global picture, though, and the story's different. Emissions hit a record high last year.

Countries like India and China have met rising energy demand, in part by building more coal plants. But at the same time, worldwide? We've seen the rise in renewables getting stronger every year. Strong enough, says Dave Jones with Ember Climate, to finally start bringing emissions down. Which would leave last year as the historic peak. He says cheap solar power has been the fastest growing electricity source for 17 straight years. And renewables aren't the only ways countries

are trying to cut emissions, says Melissa Lott with Columbia University's climate school. We've seen some countries leaning into nuclear power, others exploring carbon capture. Altogether, that means the power sector is moving in the right direction. But she says emissions from this sector can change unexpectedly thanks to things like volatile weather. It affects wind patterns, it affects the amount of sun we're getting, it affects the temperature of cooling water for a nuclear power plant, and it also affects the

amount of hydro power that we can access. In recent years, droughts have caused hydroelectric dams in the US and China to falter. And so overall this is why it is so important that we have a mix of different technologies in the system. To keep the lights on says Lot, without having to burn more fossil fuels. I'm Daniel Ackerman for Marketplace. Should you find yourself up early in the morning wondering what the business and economic news of the day is, might I recommend the Marketplace Morning Report. David Brancaccio and the gang get out of bed real early to let you know what's going on. There are corners of TikTok, I am reliably told, where you cannot escape a trend from

the 1980s come to life. Videos of people getting their colors done. There's usually a professional color consultant draping people in various colored scarves until they discover their season, the hues in which they look best. Winters in deep saturated jewel tones, autumns in warm earthy shades,

and so on. Again, so I'm told. Guessing at someone's color season has become kind of a popular internet parlor game, and it is also a growing business opportunity. People looking to boost their professional images and the entrepreneurs ready to help them do that. Marketplace's Megan McCarty-Corino has that one. Megan McCarty-Corino Ashley Dvorak is like a rainbow come to life.

Ashley Dvorak I'm a spring. So the light, bright, warm colors of the world are best for me. Megan McCarty-Corino On her Instagram feed, So, the light, bright, warm colors of the world are best for me. On her Instagram feed, tens of thousands of followers weigh in on Dvorak's outfits in vivid coral, lemon chiffon, kelly green, often pulled together with thrift store finds. But her style wasn't always so confident. As an exhausted mom of four young kids, she says her wardrobe was mostly black, basic, and kind of sad.

So six years ago, she went to get her colors done, something she'd watched her mom do back in the 80s. I almost felt like it was a superficial slash selfish thing to have had done. And then quickly I realized that that's complete garbage. It's not superficial at all. It made a huge impact on me. She's now a color consultant herself in the Omaha suburb of Papillion, Nebraska, evocatively named for the French word for butterfly. We see people from all over that come to us with wanting to feel better about themselves and show who they are on the outside that's reflecting who they are

on the inside. On a Sunday in May, 26-year-old Lauren Kruseberg brought her mom Debbie O'Keefe. They got it for me for my birthday. Oh my gosh! Dvorak sits them in front of a mirror and starts to drape. I've sort of drained your coloring here when I put this cool, rosy, sort of icy pink on you. They've paid $510 combined to find out if they're warm or cool toned, muted or bright, and ultimately which of the four color seasons

and 16 sub-seasons they each fall into. Theories of color analysis have expanded the palettes to become more inclusive for a range of skin colors. Your skin and your eyes and everything are loving the warm colors. I don't own a single thing like this color at all. It loves you. It loves you. The color business was far from a sure bet back in early 2020 when Dvorak emptied her savings account to pay the $13,000 upfront cost to train in color theory and franchise with the British company House of Color. Since then, the franchise price has roughly doubled and House of Color has grown, along with the popularity of color analysis from a few dozen consultants in the U.S. to more than 300.

People used to just think I was like way out there basically that I would pay somebody for a color palette. But now everybody knows what I'm talking about. Cedar Beauchamp has had several color and style consultations. She estimates she's paid about $4,000 over several years. I was typed as a winter in four seasons and then as a bright winter or a clear winter. And then I crossed from winter into spring. I'm a vital spring. When we spoke, she wore an emerald green dress with a navy shawl collar blazer and a classic

red lipstick. She runs her own forensic accounting firm serving the entertainment industry and says cultivating a strong personal brand is key to her business. And in the age of social media, everyone has a personal brand, says marketing professor Americus Reid at the Wharton School. People are starting to use these technologies to construct this identity and project it to the world. And color is powerful. The global image consulting market overall is currently around $4 billion, and the services are appealing to a broader audience than ever before. Beyond women of a certain age and class. Reed says it's tapped into an age-old need. I think we're hardwired to figure out these deeper questions of identity, who we are, who am I? Back in Papillion, Nebraska, Lauren Cruzberg and Debbie O'Keefe have an answer.

Okay, you guys, the autumn's in the house. This is so fun. We are the same. You are the same. I would really guess that. You would not guess it, right? As for the house that Color built, Dvorak says she's gone from zero dollars in her bank account five years ago to earning enough to recently buy and renovate an historic building in downtown Papillion, where she moved her studio in June.

I'm Megan McCarty-Corino for Marketplace. This final note on the way out today, which comes with the observation that companies, as well as countries, have made net-zero carbon emissions promises. That's of interest today because Google has released its annual environmental report. The company said its carbon emissions are up nearly 50% over 2019, 13% over last year. Google's net zero timeline, by the way, is 2030. Why such a surge, I hear you asking? Energy use in its data centers and supply chain pollution driven by, wait for it, growth of and demand for artificial intelligence. Our digital and on-demand team includes Kerry Barber, Jordan Mangy, Dylan Miethenen, Janet Nguyen,

Olga Oxman, Ellen Rolfus, Virginia K. Smith, and Tony Wagner. Francesca Levy is the executive director of digital and on-demand. And I'm Kai Rizdahl. We will see you tomorrow everybody. This is APM.