Marketplace - The inflationary effects of war

Episode Date: April 6, 2026

We've got the first whiff of price growth as a result of President Donald Trump's war in the Middle East: A services sector purchasing index registered its highest reading since October 2022. Experts expect federal data out later this week to show a similar uptick in prices from February to March. And even if the war ends soon, that inflation could stick around. Also in this episode: The U.S. isn’t likely to institute an oil price cap, HSAs remain an imperfect savings tool, and more shoppers opt for secondhand clothing.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.

Unless and until the war tells us otherwise, inflation is our through line this week. From American public media. This is MarketFiles. In Los Angeles, I'm Kai Risdahl. It is Monday, today, 6 April, good as it always is. Have you along, everybody. As we sit here to start the week, news of the war and its economic ripples is calm. Threats, of course, bluster, but nothing tangible.

yet. So we are going to stick with what we know. And what we know so far is that inflation is going to be a key economic talking point the next four days. Gas prices, yes, oil up a bit again today. Two key price measures coming in the next couple of days, the personal consumption expenditures price index, PCE in the vernacular, and then the consumer price index on Friday. But we start today with one of those economic ripples, the Institute for Supply Management's purchasing managers index. It's the prices businesses pay, services sector businesses in particular, the prices they are paying for what they need, those prices shot up 7.7 percentage points in March. That is the biggest monthly increase since 2012. Marketplace's Mitchell Hartman starts us off.

Today's report on the service industry followed another one last week covering manufacturing. Dan North at Credit Insurer Allianz Trade says, these private sector ISM reports are really important for gauging inflationary pressures in near real time. It is the most up-to-date data. The government's data, such as CPI, is at least a month behind. And what does the ISM data show? Prices have gone up pretty sharply, especially in manufacturing, up 19% in two months. Jay Hatfield at Infrastructure Capital Advisors explains the mechanism. Increases in oil prices translate into increases in gasoline, but also importantly

diesel, because diesel prices really filter into everything. It's what Hatfield calls the bleed-through effect, as the cost of producing goods and moving goods and people goes up. Food is about 40% energy, but it also shows up in airline prices, transportation, because of the diesel increase. Surcharges for diesel fuel are now being passed along the supply chain to businesses and ultimately consumers. It's not only oil prices driving higher inflation, says Mark Zandi, chief economist at Moody's Analytics. There's a bunch of stuff juicing up inflationary pressures. I mean, obviously there's the tariffs. That continues to pass through. That's not over. But that's been a slow burn as businesses held off on raising

prices amid all the policy uncertainty. Zandi says the inflation effect of higher crude oil has been almost immediate. Later this week, we'll get the Consumer Price Index for March and the PCEE price index for February. Zandi says, based on all the data we have to date, it looks like inflation right now is 3% year over year. And just for context, the Fed wants 2%. Even if the war came to an end relatively soon, by the summer, we're looking at 3.5 to 4, so I'd buckle up. For a bumpy ride with no more Fed rate cuts on the horizon this year, Mitchell Hartman for Marketplace. Buckling up, indeed.

Wall Street today, oil traders do seem to be able to read the room. Equities traders, less so. We'll have the details when we do the numbers. If you saw this the other day, Thursday last week, I guess it was. But the President of South Korea in a speech to parliament called on South Koreans to, and this is a quote, by the way, save every dream. drop of fuel. That's how tightly the war in the Middle East has squeezed the planet's oil supply, and it's another reminder, not obviously that we needed it, that oil trades in a global market.

And governments everywhere are doing different things to help control consumer costs. France and South Korea have imposed temporary price caps on gasoline, just for instance. Marketplace of Kristen Schwab has more along those lines. Most countries are feeling the pain of high oil prices. But Europe and Asia rely most on through the Strait of Hormuz. Audium Serovic is a senior fellow at the Center for Strategic and International Studies. About 75% of all the crude from the Persian Gulf goes to Asia, so they're really, really hurting. Governments have encouraged people to drive less and work from home.

But some have gone further, implementing price controls. Problem is... When you subsidize prices, people just think things are normal, and they go ahead as if it was normal. Creating a happy little bubble where everything's fine is great for politicians and consumers at first, but it doesn't solve the supply issue. Catherine Wolfram, a professor of energy economics at MIT, says it makes it worse. You just kind of exacerbate a problem by not letting consumers see that this commodity is, in fact, very, very scarce right now and very expensive. High prices are supposed to be a signal, and without it, people keep driving as it. if no oil shortage exists.

The U.S. is a big enough consumer that if we were to cap prices, it would encourage consumption enough that it would drive the oil prices up even more. It would kind of worsen the problem. Leading to longer-term pain. There are also pretty immediate economic consequences. Temporary price caps usually promote panic buying, hoarding, and theft. Severin Borenstein is faculty director at UC Berkeley's Energy Inslee. Institute at Haas.

Everybody who was alive at the time remembers the gas lines of the 1970s. At one point during the 1979 oil crisis, the U.S. even implemented a rationing rule, where drivers could only purchase gas on alternating days based on whether the last digit of their license plate was odd or even. It created a lot of friction. When you have those gas lines, people start having to plan their days around getting fuel. People can't get to work, businesses can't deliver goods, and in the end, that causes more economic damage, says Borenstein, than having to pay for expensive gas. I'm Kristen Schwab for Marketplace.

Healthcare is getting more expensive. Full stop. Don't need to elaborate on that one too much. Because it is getting so expensive, there are various and sundry new ways to ease that burden just a bit coming out of Washington. A provision deep in the GOP's tax cut law of a year ago lets more Americans open a health savings account in HSA. But HSAs are also being hyped as an investment vehicle of sorts. So with the obligatory reminder to always consult your own financial advisor and the reminder that nothing in health care is ever simple, Blake Farmer from WPLN in Nashville has the story.

Mike McKee is a showman. That's him behind the drums. As a musician, McKee has always been self-employed and on his own for insurance. That means going with high deductible plans. They're less expensive each month, but leave you with bigger medical bills. The plans also allow you to start a health savings account, but he never has. The math didn't math for me. He'd rather save in more straightforward ways, retirement accounts or college savings for the kid.

Plus, medical bills seem like funny money. If something catastrophic happens, you almost certainly won't have enough, beg for mercy. He's been there. I'm so frustrated with the system that anything with medical savings and stuff, I'm just so turned off emotionally that I have to be really careful to be logical about it. One key misconception he and many others have is that the HSA is also a use it or lose it kind of account. Not so. The money is yours for life. Without a pocket cost going up constantly, more plans are eligible for HSAs. Not just high deductible plans. This year, catastrophic and

bronze level plans on the federal marketplace are HSA eligible. At this point, roughly a third of all privately insured individuals are covered by an HSA. There aren't many better deals. The money goes in and comes out tax-free, and if you build up a balance, you can invest in the stock market. Those gains aren't taxed either. Michelle Long is a policy researcher with KFF. The small share of people who do choose to invest in is very small could certainly see some benefits. if they keep that money in there over time. Of course, if you're living paycheck to paycheck, Long says it's virtually impossible to take advantage. HSAs in this way tend to benefit more the higher income enrollees

because those are the ones who have the disposable income to set aside at the end of the month. Plus, people with higher incomes have more to gain from tax shielding. Still, you don't have to be rich to realize the benefits, but you do have to set up a special bank account, put aside, the money, keep receipts and reimburse yourself as you go. Rachel Schreiber is a marketer and mother of two in Tennessee. I do think it is worth a headache because it's a tiny headache. It is money out of my budget that would be spent anyway. It's tax-free and there's the hope that it can get invested. But for now, it's just a hope. Because even in years when she can afford to max out her HSA to the federal limit,

which is now more than $8,700, Shriver and her family find a way to spend pretty much all of If I'm paying for braces, physical therapy, my kid has an accident on the wrestling mat and needs PT imaging, you know, orthopedic care, there goes the savings. She's hoping to hold on to more of her HSA savings when the kids get on their own plan. In Nashville, I'm Blake Farmer for Marketplace. There you are. Solidly established in your career of choice and a long-constrave. comes a new technology that, I mean, best case is going to be hugely disruptive. Sound familiar? Almost every day now there's a headline about what AI could do or is already doing to the job market. So if you're among the millions who've got another 10 or 20 or 30 years

of work ahead of you, what might you be doing now to stay on top of it all? Marketplace's Samantha Fields has been wondering. Maybe I shouldn't admit this on the radio, but AI stresses me out. I worry about it taking over my job and everyone's jobs. I also worry I'm not using it enough to stay employable for the next however many years I need to keep working. My friend Ryland, a video editor in Portland, Oregon, feels similarly. I have a hard time seeing it ending well for people in creative fields. It definitely feels more likely to me that we're going to get automated away than this will become like an empowering tool. I called Riley. I called Riley and a few other friends who are also mid-career

because I was wondering if I was alone in feeling this way. And I was wondering how much people are using AI so far compared to me. My friend Maria works in marketing in a multinational company in Miami, and she's using AI a lot, especially for research and data analysis, partly because her company has been offering lots of training and tools. I'm not an AI enthusiast, right? Like I wasn't. I'm one of these people who's very skeptical about AI and the use of AI.

for ethical reasons this stuff, but I have to say that in my day-to-day, it saves me tons of time. My friend Sarah is also using it at the grocery store where she works in Tucson, Arizona. I work in the produce department. It's not always the most profitable department because it's perishable. So there are huge margins for loss if you're not careful with ordering or if imports are delayed and things like that. So it does help us figure out how much to order and how to display things effectively. My friend Zaffron is a college professor in Portland, Oregon, and she's been revamping some of her courses to incorporate AI. But she's also worried about what could happen if AI eventually makes people less interested in going to college. If our students don't feel the need for a higher education degree and enrollment goes down enough, are we going to need as many faculty positions, right?

I'm still in my mid-40s, and so, you know, I still have a long way to go for my career. And so therefore, yeah, well, you know, just see. I also have a long way to go in my career. And I've been feeling like I have no idea how to set myself up. So I'll still be competitive in an AI world. So I decided to call Jeff Baker. Hey, Sam. Hey, Jeff.

How are you? Baker is a career coach in Vancouver, Canada, who's gone all in on AI, helping people learn it and figure out how to adapt their careers for about $100 an hour. Talking with him made me a little less worried about AI taking over my job. even though I am currently stuck at what he considers to be level one of AI literacy. Which is using AI like a Google replacement. There is so much more I could be doing with it than just using it as a glorified search engine, Baker says.

Namely, learning how to create AI agents that effectively operate like digital people and work for me. Once you have a digital person that can think and plan and talk with you and create files and edit files, then you kind of feel like, whoa, sky's the limit here. In my case, it could maybe pull and analyze economic data or prepare background notes for an interview. He says not many people are creating and using AI agents yet, so there is still time to learn. But there's not going to be time forever. The best thing to do is start, he says. Watch a couple videos and then just play around, maybe create one agent and see what it can do.

Doing that will also help you see which parts of your job are vulnerable. to being taken over by AI, and which parts may be less so. There's all these things that AI can do better. There's the things only I can do. And then there's the things that actually need to be done in collaboration with AI. And that allows you to double down on the things that are uniquely human. Like in my case, interviewing people, recording sound in the field, or making judgment calls about what stories to cover and how.

Still, he says all of us are going to have to learn to pivot and adapt in the coming years, if we want to stay employable. And we'll probably have to keep doing it over and over. It's like we're all driving into the darkness. And some people can see 10 feet in front of them and some can see 200 feet. He says the ones who can see 200 feet will be able to make better decisions about what direction to go. I'm Samantha Fields for Marketplace. Coming up.

I really quick. quickly learned while being in New York that I was meant to live in the mountains. Live and learn, I guess. First, though, let's do the numbers. Dow Industrial is up 165 points today, about 410%. 46,66. $46,669,000,000. The NASDAQ gained 117 points, about a half percent, 21,996. The S&P 500 added 29 points, 4 tenths percent, 6611 there. Blake Farmer was telling us about health.

savings accounts. So some health insurance companies, why don't we? United Health Group reports earnings later this month, by the way, rose 1.5% Cigna climbed 2.1% Elevents Health, ascended 610%. Consumer products, you say? Sure, we got that. P&G, maker of loves and tide detergent descended about a quarter percent. Post holdings, which makes honey bunches of oats and Peter Pan, peanut butter lifted about a 10th percent. Bond prices fell. The yield on the 10-year treasure note thus rose 4.34 percent on the 10-year. Listening to Marketplace. This is Marketplace. I'm Kai Risdahl.

We have talked a bit on the program, I believe, about thrifting, clothes being given a second life in the resale market and how that's becoming more and more popular. And we do have some data on that now. The online thrifting platform Thread Up, so a vested interest there. Thread Up says almost 60% of consumers bought second-hand clothes last year and that the resale market is actually outpacing the broader retail clothing market. Marketplaces Carla Javier called around to put those numbers in some context and what they might portend for consumers and for retailers. Secondhand shopping is even impacting the luxury market, says Pierre Dupreel at Boston Consulting Group.

It was a side conversation five years ago. But today, Dupreel says, luxury shoppers are perusing the secondhand market at increasing rates. Affordability is one reason. Another is sustainability. Plus, DePrile says, it can be kind of fun. I think the thrill of the hunt is a big driver. And in the resale market, remember, customers aren't just buying stuff. They're also selling it, too. DePriel says people who accumulated a lot of things,

especially during the COVID years, could be ready for what he calls a wardrobe detox. So I think the detox is a big piece of the reason to sell. The second one is because they just also want to be able to buy more secondhand. Much of the projected growth in secondhand shopping, will be driven by younger consumers, says Neil Saunders at Global Data, which has been studying the resale market with thread up for years now. They're very, very keen on the resale market,

and as they mature into higher spending consumers, the evidence suggests that they're going to keep spending on resale for a fairly large proportion of their apparel needs. Brands are getting in on it, too. Saunders points to Lulu Lemon and Levi's, which also offer resale options to their customers. It doesn't take away necessarily from the existing business. It just may attract some new customers, some different customers,

some different types of spending that they weren't getting access to before. Pricing secondhand items as they come in and out can be especially tricky for companies that do this, says Sucherita Kodali at Forrester. It's a balance between what's the right number that makes it attractive for people to give their good merchandise. But at the same time, that you're not going to. lose money on that merchandise. Kadaali says people making subjective calls could find that challenging. But technology could help companies at least break even, if not be profitable.

I'm Carla Javier for Marketplace. There was a time in this economy when the only way to sell your stuff was to travel from place to place and meet your customers where they were. Traveling salesmen were a thing, actually, in the early days of the last century, a thing that has now almost completely vanished. Almost. Because some businesses have added a modern twist. Here's this next installment of our series, My Economy.

My name is Haley Grisham-Hamton, and I am the owner and designer at Hurrieslow Hatco, which is based in New Hampshire. All of the artwork on all of our hats are original graphics of mine. I went to Parsons School of Design and studied fashion. I was actually born in Littleton, New Hampshire, and kind of ran away to the city.

I really quickly learned while being in New York that I was meant to live in the mountains, and I came to the realization that if I wanted to live where I wanted to live, I almost had to create that position for myself. My husband and I had this kind of dream about moving into a van, living on the road and traveling the country, and it may be old-fashioned, but we always really found that the best way of selling our product was in person. If we can go and meet, like, store owners or buyers in person, we might have a better chance of getting our products on their shelves. We decided about two years ago to buy a van.

Throughout the 13 months that we lived in our van, we went into hundreds of stores. Outdoor stores, boutiques, co-ops, any type of store you can think of. It could be a gym retail area. At our absolute peak last year, we were in about 50 stores. We definitely heard more knows than yeses, but 50 stores for a small company like ours is a ton. We went all the way to the West Coast, did most of the Pacific Coast Highway up to Bend. and then came back. And when we came back, I really needed stability.

I felt like we had been on the go for so long that I really just wanted to feel a little bit more rooted. We ended up finding our dream storefront location in Littleton, New Hampshire. So we've been there for a couple months. We are in the process of onboarding our first employee and to have help putting tags on hats and to have help with cleaning and some of the day-to-day maintenance of the space, that's been amazing. And up until this point in having a physical storefront, that wasn't really an option for us. I'm hopeful this year that we'll be the first year that I will be able to pay myself every single week.

And this is truly the best space that we could have ever dreamt of for our company. So we'll be there forever. Haley Grishampton there, owner of Herons. slow hatcoe now based in Littleton, New Hampshire. Whether you are taking your business on the road or building it where you are, we want to hear about it. Let us know what's going on, would you, marketplace.org slash my economy. This final note on the way out today, we started with inflation. That is where we are going to end with the root cause, more specifically. You might have seen that OPEC met this weekend and

agreed to boost production by 206,000 barrels a day, which great. right? The daily global shortfall with the Strait of Hormuz staying closed, daily global shortfall, between 10 and 12 million barrels of crude oil every single day. Also assorted fertilizers and other petroleum products, as you have heard. Amir Bibawi, Caitlin Esh, John Gordon-Koyer-Jakar, Steve Mullis and Stephanie Seek are the marketplace editing staff. Kelly Silvera is the news director, and I'm Kai Rizdahl. We will see it tomorrow, everybody. This is APM. Why do we keep putting off the financial tasks we know we need to do? I'm Rima Gres, and this week on my podcast, This is Uncomfortable.

I talk with a behavioral expert about commitment devices, the tricks we can use to force ourselves to follow through. The most extreme form of commitment device is literally saying you're going to fine yourself. Like, I'm going to have to give $50 to a politician's campaign who I hate if I haven't done this by next Friday. Listen to This is Uncomfortable. wherever you get your podcasts.