Marketplace - Uneven churn

Episode Date: December 4, 2024

About 3.3 million people quit their jobs in October, slightly more than in September. More quits can signal a strong labor market, but quit rates vary across the country. In this episode, why job churn is strong out West and falling in the Northeast. Plus: TikTok Shop did over $100 million in sales on Black Friday weekend, renters want electric vehicle chargers and the restaurant industry struggles with debt and shifting preferences.

You can't fire me, I... well, you know how it goes from there. From American Public Media, this is Market Plans. In Los Angeles, I'm Conn Rizno. It is Tuesday, today the 3rd of December. Good as always to have you along, everybody. I quit. That's it. I'm Kyle Rizno. It is Tuesday, today the third of December. Good as always to have you along, everybody. I quit. That's it. I'm done.

Not me, to be clear. But more than 3.3 million people in this economy did quit in October, slightly more than the number that left their jobs a month earlier. So we learned in the latest job openings and labor turnover survey jolts to those in the know, which was out today. Quitting can, of course, be a sign of a healthy economy. People think they can easily get another job, so quitting is not that big a deal. But those quits are not distributed evenly.

In the American West, for example, the quits rate went up by more than a half percent in October. In the Northeast, meanwhile, it went down. Marketplace's Stephanie Hughes has today's economic geography lesson. It's a good time to be a transportation planner in Utah, says Laura McClellan, a transportation planner in Utah. There is more work out there than folks doing the work. McClellan had been working for the government of Salt Lake City.

In October, she quit and moved to a regional transit agency that covers up than folks doing the work. McClellan had been working for the government of Salt Lake City. In October, she quit and moved to a regional transit agency that covers up bigger chunk of the state. Her job is to plan for the longterm. You know, the American West and definitely Utah, it is experiencing so much growth and it's exciting to be a part of an agency that does look decades out into the future. McLellan is part of what George Mason economist Christine McDaniel refers to as churn, where

a worker leaves one job and moves to another that's a better fit. You like to see a lot of churn in the labor market because it means that people are getting matched up with the jobs that they can really excel in. McDaniel says churn happens when there's a lot of quitting, along with a lot of hiring and job openings. This is the case right now in the Western US, which McDaniel describes as booming. Still, nationally, today's churn isn't the churn of 2021, or even a year ago, when there were higher levels

of quits, hires, and openings. This is sort of a cooling off after the kind of the frenzy of the pandemic. Christina Sargent is an economics professor at Middlebury College. She says this cooling isn't necessarily a bad thing. It helps keep inflation under control. And it's a return to a job market that looks more like it did before the pandemic. SARGENT – Overall, it's kind of boring, right?

We're going back to a normal. There's not like a ton of churn happening. There's not a lot of moving in and out. But that's okay. Sometimes you want to change everything up. Sometimes she says you want to just do the job that's in front of you. I'm Stephanie Hughes from Workahplace. With Black Friday and Cyber Monday squarely in the rearview mirror, we are now officially

in the holiday shopping season, a lot of which we've been doing online, almost $11 billion worth, says Adobe Analytics. That is a record high. The Census Bureau releases retail sales data for November in a couple of weeks, but in the meanwhile, we have decided, as we often do, to give a few of our retail regulars a call to see how things are looking on the actual ground.

First up, Annie Lang Hartman, owner of the stationery and gift store Wild Letty, which is based in Lelandaw County, Michigan. It honestly was a little bit of a slow start. We had a decent sized storm come through, so in-person shopping took a while to pick up this weekend, but two weeks ago we were down 70% ago we were down 70% for the month for November compared to last month. Then now we are back on track. I think our biggest challenge, which I felt was our biggest challenge this weekend, was dealing with weather affecting our in-store sales. But really now that we have all of our marketing set up for the rest of the month and our

inventory is looking good I don't think we have any big challenges besides just keeping on top of online orders. And in the next couple weeks I just hope that we stay busy and stay on top of it and we're just Really hopeful that this is gonna be a really great holiday season Here's hoping any Lang Hartman owner of wild letty up in Leland County, Michigan more retailers to come through the program today on Wall Street this Tuesday Meandering is how you might characterize major indices. We'll have the details when we do the numbers. Not that it's necessarily any of my business, but if you did some shopping over the weekend,

how'd you do it? In person? Online? On social media, perhaps? According to TikTok Shop, that's the platform's in-app marketplace, it did better than $100 million in sales on Black Friday. That is not a huge chunk, of course, of the $10 billion plus in sales on Black Friday. That is not a huge chunk, of course, of the $10 billion plus in spending

on Black Friday in total. But it's a growing piece considering TikTok Shop launched here just over a year ago. Marketplace's Kristen Schwab has more now on social media's expanding push into e-commerce. When I opened TikTok Shop, the first video that pops up is this. I am willing to bet my life savings that there will never come a day that I use another cleaning

gadget more than my pressurized handheld steam cleaner. Yes, my TikTok algorithm is very cool, thank you. Really though, this video is your typical influencer fare. Except there's a little floating link where you can add the product to your cart and check out directly through TikTok. Claire Tassin, retail analyst at Morning Consult says brands are trying to meet consumers where they are and social media platforms, including Instagram and YouTube, want to make buying seamless while taking a cut of the sales. Diana Smith It's an additional revenue stream for TikTok beyond just the economy of people's attention.

Gigi Moritz That revenue stream is still kind of small. Social commerce on marketplaces like TikTok Shop make up around 5% of total e-commerce sales in the US, says Diana Smith, associate director of retail at Mintel. That's partly because it's newer here. It's been popular in Asia for years. And American shoppers are a little nervous to try it out. Some consumers may not be exactly sure who they are buying from or if the platform or the brand could be trusted. But as consumers get more comfortable, social media shopping is expected to grow. Because

Oliver Wright, who leads consumer goods and services at Accenture, says shoppers are craving direction. Consumers consistently cite a high level of uncertainty that they are buying the product that's right fit for them. This sort of engagement helps you cut through a lot of that chaos. With algorithm driven recommendations, I'm Kristin Schwab for Marketplace. Okay, here's a seemingly random statistic. S&P Global says bankruptcies in this economy are on track to hit a 14-year high this year. You got healthcare companies on the Chapter 11 list, you've got communications companies

and energy companies, and you've got restaurants. TGI Fridays, Bucat de Beppo, Red Lobster, all of them went under this year. And we know restaurants have had to do a lot of adapting the past three or four years, right? Not just inflation, but the pandemic and worker shortages. And some of those restaurants, as Marketplace's Sabrina Benishaw reports, are all adapted out.

It is martini o'clock at Union Tavern in Rochester, New York. Hi, this is Kelly Bushclock at Union Tavern in Rochester, New York. Hi, this is Kelly Bush from the Union Tavern. Just here shaking up some espresso martinis. But what has gotten shaken up far more than a martini is Bush's restaurants. There were the shortages. There's those weird fingerling potato shortages. There was inflation.

There's been issues with lines and tripling and costs. And now there's fewer people going out to eat. Restaurant traffic, that's the number of people visiting restaurants at a given time, is down around three and a half percent in the US overall according to BDO. Customers have had to deal with inflation too in and outside of restaurants. Petables patterns and behaviors have just changed. But also hanging over many restaurants is their own debt. People don't always realize the amount of debt we had to take on just to get through the first two years of the pandemic.

That is on top of debt taken on to start one of Bush's restaurants just before the pandemic. That profit margin that was already really slim in the restaurant industry is just getting slimmer and slimmer if it exists at all. It's the debt that's been the issue for many of the chains that have gone bankrupt this year, debt that even predates the pandemic from a time when chains were trying to grow. As they were growing, they were taking on debt, fuel the growth, and a lot of private equity in our space came in. Greg Thomas is a managing director at financial advisory services firm BDO. And, you know, when we hit COVID, that debt didn't disappear.

And then, of course, interest rates rose, which made some of that debt more expensive. Meanwhile, for some chains in particular, sales were hurting because their clientele was hurting. The preponderance of their customers are the lower to middle income and it's having a major impact on them. During the restaurant boom late in the pandemic, restaurants with financial problems were able to paper over their issues. Now with a downturn,

They were exposed. Joe Pollock is a managing principal with restaurant advisory firm Technomic. And that's why we're starting to see right now a fair amount of these bankruptcies that are coming through. He expects the parade of Chapter 11s to continue into 2025.

Toast, a payment service for restaurants, surveyed its clients and found restaurant optimism varied by size. Kelly Esten is chief marketing officer at Toast. The largest restaurant groups have the highest increase in optimism. And the smallest ones, they're really dealing with challenges on guest foot traffic over the last year.

The restaurants that are surviving have been nimble. When some of Espartico Borgia's restaurants in Dallas, Texas had to close during the pandemic, he reinvented them as what he calls Smart Cafes, fully automated robotic kiosks that store and heat up meals previously prepared at his and other restaurants. Where people can just come grab this food, warm it up and eat it there or warm it up and take it home or send an uber guy. Borja says this kind of innovation was super important. It's essential. We doubted we would be getting out of the hospitality because we just can't find the staff and to make things

worse real estate is a stupid expensive these days. In Rochester at Union Tavern, Kelly Bush has also had to transform her business model. Doing paint nights, doing more wine tastings. We also are in a spooky old tavern from the 1800s. So we did 22 events in October, 18 of them sold out. But this kind of nonstop adapting is exhausting. We continue to pivot and pivot and pivot and I think people are getting tired. Tired of having to figure this industry out all over again, again and again.

In New York, I'm Sabri Benishur for Marketplace. Retail regular number two today is Philip Rollins owner of the record comic and toy shop Offbeat in downtown Jackson Mississippi when last we heard from Mr Philip Rollins, owner of the record comic and toy shop Offbeat in downtown Jackson, Mississippi. When last we heard from Mr. Rollins, he was dealing with road construction right in front of his store. This construction traffic has impacted our business. We were down like 70% on sales. You know, it's really due because, you know, there's no parking in front of the store.

People think I'm closed. And gotta make some tough decisions soon, probably by the end of the year. Thankfully, I had a decent Black Friday. I did a big sale. I did like, I had select new records 40% off. We had a lot of exclusive titles. So there was a Billie Eilish record, a Noah Cahan, a Olivia Rodrigo. We had people line up.

I think the earliest person that got there was at 4 a.m. for some reason. And it was cold. It was like, it was in the 30s here. The temperature finally dropped here in Mississippi. So I know he was freezing, but we didn't open till 9 o'clock. So he stayed out there for a good bit. I hope to see the street finished. And I hope to gain more customers.

After this week, we're going to be open seven days a week. But that'll probably last until Christmas. I may take Boxing Day off or make it a half day and be like, alright cool, we can open up and I'll rest it in full of family. But Boxing Day and Christmas I'll definitely be off probably. Definitely be off probably. You gotta rest man. Philip Rollins, the owner of Offbeat in Jackson, Mississippi. Coming up... In the coming weeks I'm just hoping to see sales come up. The

retailers lament but first let's do the numbers. Dow Industrial is down 76 points today, two tenths percent, 44,705. The Nasdaq rose 76 points. That is four tenths percent on that particular index, 19,480. S&P 500 basically flat, 6,049 there. We've been talking to retailers today small ones Let's look at the big ones shall we target up six tenths percent Macy's down two point seven percent today Best Buy power down about two and a tenth percent

Heard from Sabri about restaurant chains going bankrupt Here's some restaurant brands international parent company of Burger King and Popeyes were one in six tenths percent not bankrupt to be clear Darden restaurants which owns red Red Lobster, dropped 7.0% today. Over in South Korea, The Wan lost about 1% after the days or evenings over their events. You're listening to Marketplace. This is Marketplace. I'm Kai Rizdal. You think diesel fuel, you think dirty, right?

Lots of particulates, all of that. It may be time though to adjust your emissions expectations. Renewable diesel is becoming more common and cleaner products, either renewable or biodiesel, are almost 10% of the diesel market now. But use of this less carbon- fuel is concentrated in certain specific places. Marketplace Elizabeth Troval has more on the wheres and whys of the renewable diesel market. Old cooking oil and animal fat is increasingly fueling big rigs and heavy duty vehicles. Renewable diesel is a hydrocarbon biofuel that is chemically similar to petroleum diesel. Brian Mosier is a chemist with the Agricultural Research Service.

But it's made from vegetable oils or animal fats instead of crude petroleum oil. And trucks run fine on it. That also means there's no need to change transportation infrastructure, says Jeff Short with the American Transportation Research Institute. You can deploy renewable diesel through existing fuel pumps. I've heard from some carriers who now only get renewable diesel at their terminal in their pumps, and it was no issue. They just dropped that right in. So it's an easy switch for a smaller carbon footprint, says University of Illinois economist Scott Irwin.

It is a much cleaner fuel from a greenhouse gas perspective. There's just no doubt about that. What there is doubt about is the future of renewable diesel, which is more expensive than regular diesel to produce. Renewable diesel is a creature of public policies, so it can live or die, depending on how generous those subsidies are. And that will be up to the Trump administration. But Irwin says state subsidies, like those in California, are likely to continue. Jimmy Trotterman is with the Energy Information Administration. So there's been significant growth in California, and that's starting to begin elsewhere on the West Coast.

There's also been modest increases on the East Coast this year. I'm Elizabeth Troval for Marketplace. The good people at Cox Automotive tell us that Americans bought a bit more than 106,000 electric vehicles in October. That's up almost 7% from a year ago, and it keeps EV sales on track for their biggest year ever in this country. More EVs, of course, mean more drivers

are looking for places to charge, said EVs, and right now, for most of them, that's easiest to do if you live in a home with a garage or a driveway, someplace you can install a home charger. But there are more than 45 million households in this country that rent, many of them in multi-family buildings. And being able to charge their apartment complexes would be great, but as Marketplace's Henry Epp reports, that presents some challenges, both for renters and for apartment developers.

About two blocks from his apartment in Burlington, Vermont, Philip Kieffers parked his Chevy Bolt under a utility pole. 12 feet above us on a telephone pole is this black box with a plug sticking out of it. It looks kind of like a gas nozzle. And when you turn it on, it comes falling out of the sky. He pulls the plug across the hood of his car to the charging port, plugs it in, and within a few hours his car should be fully charged.

Because he can't charge at the apartment he rents, Kieffer's mapped out all of the public chargers in his neighborhood, like this one which is owned by the city. He's got options, but they're all at least a few minutes walk from his apartment. But just around the corner from here, tenants of a different apartment complex won't need to leave their building at all on frigid Vermont days. Through the garage door underneath one lake view is a private parking deck with an impressive view of Lake Champlain and the distant Adirondack Mountains and charging options for EV owners.

Yeah, so we have a couple of juice box EV charging stations here. Building owner Eric Hoekstra says the two chargers are available for no extra cost to tenants who pay for a spot in this garage. It's been that way since the building opened in 2019, he says. Since then, demand for charging among his tenants has grown, Hoekstra says. So he's adding chargers to five older properties he runs in the area. And compared to building them up front, that's complicated. You've got to wire it in and you've got to have a pretty robust electrical service. If you're putting stations outside, you might be doing site work and excavating,

you know, to put a conduit in the ground and run the power out to a parking lot." The costs, he says, add up. Something that more apartment managers around the country are learning. The words getting out to apartment managers that you really want to future-proof your development, it's so much cheaper to do this upfront when you're building new construction. Jeff Allen is executive director of a nonprofit called FORTH, which advocates for electrifying transportation. He says charging is likely going to be an increasingly popular amenity. Last year, the National Multifamily Housing Council found that 34% of tenants want EV chargers in their building. That's seven percentage points higher than the previous year. But Allen says demand varies a lot by region.

If I'm in San Jose, California, and I manage apartments, I need to be providing charging today. If I'm in Leavenworth, Kansas, and I manage an apartment building, I might have 10 years. Whatever timeline they're on, apartment owners can tap into incentive programs from utilities, cities, states, and at least for now, the federal government. The Inflation Reduction Act includes a tax credit that developers can use for EV charging

in certain circumstances, but that might not last under the next Trump administration, says Ingrid Malmgren with the nonprofit Plug in America. I think what we're gonna see is we going to see a shift from efforts at the federal level to efforts at state and municipality levels, county levels, working with partners who are interested in moving this forward. And there are a lot of states who are committed to this. Including Vermont.

Funds from the state and the local electric utility are supporting the charging systems property manager Eric Hoekstra is working to install with an eye towards the future. I won't be surprised if within the next decade or so, you know, something like half of the vehicles out there are going to need access to charging of some type. Until other developers get on board, he says, he'll have a leg up attracting tenants. In Burlington, Vermont, I-founder of She's Fly. That's a fly fishing shop for women based in Fort Collins, Colorado. Right now, business is slowing down a bit, actually.

We came off of our season ending right around mid-November and things slowed down quite a bit. And now it's starting to pick up for the holidays. So we just went through Black Friday and we had some good movement on our site and had some orders come through. So that's been nice. But we are experiencing a bit of a lull compared to last year. I think we noticed that with social media and email marketing,

we've seen a drop in engagement just in the last month and a half. So we're wondering if that's going to pick back up and we're keeping an eye on that. In the coming weeks, I'm just hoping to see sales come up. We have some community events that we do to keep engaged with our clients and just keep being there for them. It has been our most successful year on record. So I think anything that happens during the holiday season is just going to help us go even further. Dylan Demery, She's Fly is the shop that today in which the worlds of professional football and prepackaged

soups come together. The Washington commanders, under much-longed-for new ownership, announced today they've hired the CEO of the Campbell's Company, which until like a month ago was called Campbell Soup Company, as their new president and CEO. Said the announcement in relevant part, Mark Klaus, he's the new guy, has a quote, stellar track record in building brands that connect deeply with consumers and ultimately delivering best-in-class experiences and lasting memories. Just like soup, right? Our digital and on-demand team includes Carrie Barber, Jordan Mangy, Dylan Mietinen, Janet Nguyen, Olga Oxman, Ellen Rolfes, Virginia

K. Smith, and Tony Wagner. Francesca Levy is the executive director of digital and on-demand. I'm Kai Rizdal. We will see you tomorrow, everybody. This is APM.