Marketplace - Weekly jobless claims fall 

Episode Date: March 21, 2024

Initial unemployment claims dropped more than expected last week, down 2,000 from the week before. And that stat continues inching toward historic lows. Also in this episode: Oh, to live in the Big Apple! Why cargo bike deliveries are taking off, what the city’s new trash management plan looks like and how climate change causes home insurance headaches across the country. 

If I've said it once, I've said it a zillion times, it's the labor market, people. From American Public Media, this is MarketFlex. In Los Angeles, I'm Kai Rezno. It is Thursday, today the 21st of March. Good as always to have you along, everybody. I'm going to read you four numbers. You are going to try to guess what they are, all right? All right, here we go. 210,000, 212,000, 210,000, 213,000. All right, that was a little random, I know, so I will give you the answer. That's the data on weekly first-time claims for unemployment benefits working backwards for the past four weeks.

And I'm starting with it because, first of all, we got an update today. That first number I started with, 210,000, came out this morning. But also because at his press conference yesterday, Fed Chair Jay Powell said again that he is watching the labor market closely and that specifically those first time claims remain, and this is his words, not mine, very, very low. In point of fact, they are below where they were in the before times and near historic lows. So Marketplace's Megan McCarty Carino gets us going today with what that data does and does not. Tell us about the labor market. Weekly initial jobless claims are, well, weekly, so they can be a bit noisy, says Mark Hamrick, senior economic analyst at Bankrate. But lately, they've been remarkably stable. The fact that they have remained somewhat quiet has been a pleasant surprise.

And that's also reflected in the fact that the unemployment rate has remained below 4% for the longest stretch since the 1960s. Cue the Beatles. Actually, I think the Fed chair is more of a Grateful Dead fan. Despite what feels like a steady drumbeat of layoff announcements, the volume of layoffs has actually been unusually low. Plus, job cuts have been concentrated at big companies in tech and finance, says Andy Challenger at Challenger Gray and Christmas.

People with really highly paid jobs in those sectors tend to be less likely to request unemployment insurance. But there may be more layoffs in the works, says Challenger. His staffing firm has been tracking job cut announcements, which he says spiked the first two months of the year, with companies planning more than 150,000 layoffs. And when people do lose their jobs, it's taken them longer to land new work. The number of people continuing to file for

unemployment benefits beyond a week was on the increase at the end of last year, says Julia Pollack, chief economist at ZipRecruiter. But they have since plateaued. They've leveled off. And so while it's true that new hiring is quite slow, it doesn't appear to be deteriorating any further. And all this stability and quiet in the labor market could speak volumes to the Fed chair, says Ron Hetrick, a labor economist at Lightcast. I think he's already started to get a feel for the fact that tight labor markets are our norm. We just don't want them too tight. Hetrick says an aging population and persistently smaller workforce might mean a labor market that

just keeps on trucking, even with higher interest rates. I'm Megan McCarty Carino for Marketplace. On Wall Street today, I'll tell you what, traders did like what Jay Powell has been saying. That's for sure. We'll have the details when we do the numbers. All right, let's do a one-two on the labor market, shall we? Megan Carty-Corino was talking a minute ago about how resilient it is. But the thing is that a big chunk of the companies providing those jobs are small businesses, which are facing plenty of challenges in a tight labor market, trying to compete with the often higher salaries and overall power that larger companies have. There are some signs, though, as Marketplace's Elizabeth Troval reports that those smaller firms are getting a little relief from what has been a

competitive search for qualified workers. Small businesses are less concerned about hiring these days, according to a new survey by the National Federation of Independent Business. Their research lead is Holly Wade. Right now, 37 percent of small business owners are saying that they have an unfilled job opening currently. That's a drop from 2023 levels, but it's still harder for small firms to hire than it's been historically. Wade says that's especially happening in sectors like transportation, wholesale, and construction. That industry is just struggling to find workers to help with the increased construction and mainly residential construction. Another sign that hiring pressures may be easing comes from the Bank of America Institute, which looked at payments to recruitment firms. David Tinsley is an economist there.

What we've seen in our data is a decline back towards around 2019 level. So it does look like hiring for small businesses is cooling. Though Brandy Britton says from her post at talent firm Robert Half, she wouldn't describe it as a cooling, but rather proceeding with caution. We definitely see small businesses maybe taking longer to hire, wanting to interview more people. And those waves of job cuts we've seen at some big firms have been good for small businesses with openings. have been good for small businesses with openings. So they have the ability to sell themselves as stable organizations, unlikely to go through a layoff. But that won't solve all worker shortages,

which Britain says have been acute in financial services and accounting. Between the lack of individuals getting a degree in accounting, the number of baby boomers that have retired, and then individuals just leaving that sector has created a really big demand. She says that's especially tough for small firms where bookkeepers are key. I'm Elizabeth Troval for Marketplace. a place. We have perhaps become jaded about online shopping. You browse, you click, and whatever you ordered arrives at your door in a couple of days, maybe even that same day. Tough to remember what it was like before that. Am I right?

And our appetite for that kind of service keeps on growing. By 2028, something like 32 billion packages are going to be shipped in this country. That's data from Capital One. So even now, with not quite 32 billion packages on their way, that's put a lot of stress on retailers and shipping companies and cities, too, to come up with a better system than what we have, one that doesn't clog already busy streets and pump up more carbon into the atmosphere. Marketplace's Kristen Schwab looks at efforts now to make the most expensive and emissions-heavy piece of the logistics chain that last mile more efficient. It's a rainy evening in New York City. And when I say rain, I mean rain,

like flash flood warning kind of rain. But it's nothing Michael Singh hasn't seen. Yes, rain, snow, high winds, all of it. Singh has been a bike messenger for seven years. He started with Amazon a few months ago. He begins his shift in a warehouse where he loads boxes onto an e-bike trailer the size of a bathtub. This is about half. It's a little light today, I guess because of the rain. This cargo bike delivery program is a pilot with the city of New York. Jessica Schumer, who leads New York City public policy for Amazon, says in a place as dense as Manhattan, trucks aren't efficient. You know, going stop by stop, double parking, congesting the streets. It's a problem that's gotten worse in the last few years. And that's not just about how much people are ordering, but where they're getting things delivered.

Before the pandemic, parcel delivery was often concentrated in business districts. A lot of people had stuff delivered to their office to avoid porch pirate theft. Kelly Rula, who directs the Urban Freight Lab at the University of Washington, says now more one-off deliveries are happening in residential areas. There's no doubt that e-commerce and the ability to have goods delivered directly to your home has changed the way people shop in cities. It's had upstream effects on how the transportation system is impacted. In Manhattan, for instance, truck speeds dropped to as low as seven miles an hour. That was a very dramatic change that cities had to grapple with kind of immediately.

This isn't just an issue in New York. Miami, Boston, Portland, and other cities are running cargo bike programs to deal with the influx of packages. Rula says retailers and shipping companies need to be part of the solution, too. It takes an ecosystem to be successful from a business perspective. And I think that we've seen, unfortunately, some failures because, you know, this is not a slam dunk profitability play at this point. dunk profitability play at this point. In other words, companies are probably not going to come up with a whole new way of delivering packages unless it helps their bottom lines. Parcel delivery on foot or bikes can reduce costs, but the infrastructure has to be just right. Say, new bike lanes or warehouse-friendly zoning. Cities need to take both a carrot and stick approach. Denise Mendez is director of freight mobility at New York City's Department of Transportation.

We identified some incentives that can sweeten the pot. Carrots, like special loading zones, and sticks, like congestion pricing. But Mendez says there's one more player who could help ease congestion on city streets. Consumers. One more player who could help ease congestion on city streets. Consumers. Trade activity generally responds directly to sort of that supply and demand for goods, which is really influenced by some of the decisions that we make on a day-to-day. Decisions like when you click buy for a tube of toothpaste and then remember the next day that you also need floss.

Getting consumers to resist the piecemeal purchases that are possible with free shipping, that takes more carrots and sticks. Some retailers incentivize customers to bundle deliveries, and states like Colorado and Minnesota require or will soon require consumers to pay a fee on some retail deliveries. Fewer packages would make Amazon worker Michael Singh's job easier. Some of his customers order so often, he knows their schedules. Sometimes, you know, I have one customer that's in this area on 59th Street. She's never home before like 830.

Maybe she's there today, but she may not be. Our stop is right here. Singh sets the package down outside the door, takes a photo, and hops on his bike to his next stop. For the record, in the nearly 20 minutes it took me to go by car two miles across Manhattan, Singh biked the distance and made nine deliveries in the rain. In New York, I'm Kristen Schwab for Marketplace. Should you have missed something on the air, first of all, we get it.

Things happen. Check out our podcast, though, if you like. Marketplace.org is where you get that or the platform of your choice. Follow us there. Coming up. We feel like we're just thankful to have any coverage. Home insurance and its discontents. But first, let's do the numbers. Dow and Dow Jones up 269 today, 7 tenths percent, finished at 39,000 to 781. Dow 40,000. Where are

you? The Nasdaq grew 32 points, about two tenths percent, 16,401. The S&P 500 gained 16 points, about three tenths percent, 52 and 41 there. We heard from Kristen Schwab about how online retailers and shippers are trying to solve last mile stuff. Well, in related stocks, UPS up a third percent. FedEx grew one and nine-tenths percent. The Department of Justice and 16 states and district attorneys, I'm sure you've seen this, launched a major lawsuit against Apple today, accusing it of driving up prices and crushing smaller rivals. Apple shriveled just over 4% today. Ticker symbol of the day, R-D-D-T. Reddit, first day as a publicly traded company. $34 a share was the opening IPO price, closed up more than 48%. You're listening to Marketplace. I'm Kai Risdahl.

New York City, for all of its charms, has some issues, shall we say. It's crowded. It's loud. It's, come on, it's dirty. And that's even before we get to how the biggest city in this economy handles its trash. Last month, the city of New York did release a new plan to take trash off the streets, literally, and put it into, you know, trash containers. But it seems even that basic step is going to bring some new complications. Larry Buchanan reported on it for the New York Times the other day. Larry, welcome to the program. Thanks so much for having me.

For those perhaps unfamiliar who've maybe never been to New York City on Trash Collection Day, what does it look like on Trash Day in New York? Well, Trash Day happens all over the city all the time. So many places in the city get trash picked up three times a week, some two. And there are piles of trash, large piles of trash, large bags filled with recycling all over the city. And if you live here, it's something you just kind of live with and you at some point stop seeing. Yeah. You know, I grew up not far from New York and I remember seeing that when I was a kid. And here we are many, many decades later and it's the same. And in point of fact, trash collection in New York City now is the same as

it's been for like 100 years. Yes, trash collection is almost exactly the same as it's been for a very, very, very long time in New York City. There's just no place to put stuff. And so you put it out on the street and they form large piles in front of large apartment buildings, you know, that you really can't avoid. Okay, look, New York City is one of the wonders of the modern world, right? It's got monuments of architecture. It's got monuments that are just monuments. It's got Central Park.

It's got all of those things. It is a wonder. How is it possible you guys haven't figured out how to collect the trash yet? It's a problem that the sanitation department is working on every single minute of every single day. There are 804,000 residences in New York City that get a trash truck that comes to them three or two times a week, which is kind of an insane feat. And the trash is picked up piece by piece, by hand, by two people in the back of a truck. And the city has a plan now to kind of do this hybrid model,

where they're going to try to force kind of smaller buildings to use these wheeled bins that are in use all across the country and all across the world. And these kind of larger on-street containers that will be kind of dedicated to buildings that a super can kind of use to put their trash in. But the tradeoffs between that is that the bins will have to go in the street and that will take up street parking and people are kind of always upset uh when we have to make these kinds of trade-offs you know but other cities forget like just in the united states but like the whole rest of the world has figured out how to containerize its trash where where did new york city like miss the turnoff there are a couple bits in new york city history, particularly starting in 1811 when we... I'm sorry, 1811? 1811. We're going to go all the way back to 1811, where a couple of guys laid out the city's grid and they provided for no service alleys that cities like Philadelphia or D.C. or Chicago have,

where we can neatly tuck trash behind buildings. And then as we kind of move further forward in time in 1950, the city kind of legalized overnight street parking. And so cars line the streets and it's hard to take that space back. And then in 1968, there was a big trash workers strike. And we actually did, you did have to put your trash in a container up until 1968. But there was a strike and the plastics industry came in with this new invention, the plastic bag. They dropped a couple hundred thousand of them on the city for free, looking for a place to kind of market this new thing.

And sanitation workers loved them because they weren't loud, and they were easier to pick up, and they were easier to sling into the back of a trash truck. And residents kind of loved them, too, because they weren't, again, they weren't loud. You weren't banging around these old Oscar the Grouch metal trash cans anymore. And so since 1968, we've kind of been addicted to the plastic bag. There is a plan, as you mentioned, it's going to be containerized or however you're going to do it, depending on where you live and what kind of building you're in. The question, I guess, is how do the people of New York City feel about this? Because I imagine y'all are just kind of,

I'm assuming you are a New Yorker. Yes. You're all just used to it. Yeah, I think, you know, people are kind of, they're skeptical in some sense. But also, you know, they have a pilot program of this going on in West Harlem right now. And we spent some time up in West Harlem. And, and when we were walking down the street, actually, we talked to a guy who was standing outside of his house. And he said, what do you think of these, you know, on street containers? And he said, look, I got to give props to the rat lady on this one. It's really, it's really reduced, you know, it's really reduced the rats. And that's a big, big, big problem in New York. And, you know, we'll see, we'll see what happens. We should point out that New York City now actually has a woman who is like the rat commissioner, right? I mean, that's like her job.

Yeah. Rat czar. Yes. I think it's a rat czar is the term. I want to imagine if you clean up the trash, you will have fewer rats. Larry Buchanan at The New York Times. Thanks, Larry. Thank you so much. The National Association of Realtors, yes, that one of the big settlement last week about agent commissions. That group said this morning sales of existing homes, that is single family homes, townhomes, condominiums and co-ops, were up nine and a half percent in February from a month earlier. Thanks in part, as we talked about earlier this week, to a growing supply of homes for sale. And it is in spite of still high mortgage rates and home prices. Those are not, though, the only things making homeownership more expensive. It's getting harder to find affordable home insurance, too. The insurance agency Maddox says premiums for

new policies rose more than 8.5 percent last year on average, 24 percent for renewals, and they're likely to keep going up this year, as Marketplace's Amy Scott reports. As homeowners in Vero Beach, Florida, Marie Zuzak and her husband Jack have had their share of insurance problems. She's a retired city planner. He worked in biotech research. They own an older home that's more vulnerable than modern buildings to hurricanes. And two years ago, after being dropped a few times by different insurers and struggling to find an affordable plan, they finally gave up and went without standard homeowners insurance. We just felt like for the value of the house, it wasn't worth the premiums.

That's Florida, where coastal living is just getting harder to insure. But the Zusaks also own a house in Colorado, where they spend their summers in the fire-prone foothills near Boulder. And there? We were dropped last year by our insurance company, along with many other people. They just left the area. This is becoming a much more common story in many parts of the country. Amy Bach is executive director of United Policyholders, an advocacy group for insurance customers. She's been helping people navigate insurance issues in

California, Louisiana, and Florida for years. What is really new is that it's impacting people in Arizona and Oklahoma and New York, and it does feel like a national problem. The main reason, she says, is climate change, which has increased the frequency and severity of droughts, wildfires and extreme weather in many areas. And Bach says insurers are raising premiums or even pulling out of some markets to protect their bottom lines. and frequent weather disasters are here to stay because of climate change. And so they are projecting that their losses are going to continue to climb. Climate modeling, drone footage, and other technology have also given insurers much more granular information about risk. So while in the past they were insuring properties a lot more blindly, now, wow, look at that. There's a trampoline in that yard. I didn't know they had a trampoline.

Wow, they have a lot of trees around their home. And these images that they're now buying are giving them the jitters. And then there's inflation. Higher labor and materials costs make it more expensive to repair and replace damaged homes. Mark Friedlander is with the Insurance Information Institute, an industry-funded research and education group. He says between 2019 and 2022, replacement costs jumped 55 percent. That's nearly four times the U.S. cumulative inflation rate during that same period, which ran about 15 percent total. So that's obviously a factor in determining insurance

premiums. Freelander expects premiums will increase by double-digit percentages again this year after the property casualty insurance industry lost $38 billion on underwriting last year. That's also affecting home sales. Dane Taylorson is a senior loan advisor with Savvy Home Loans. He says mortgage lenders require homeowners to buy property insurance, but won't make a loan if a buyer's debt-to-income ratio is too high. He says higher mortgage interest rates are already pushing many buyers close to the limit. If the insurance is going up and we're already close,

that could cause that person not to get that home. Taylorson says that's happening with about 15 to 20 percent of his clients right now. He can usually find them a more affordable policy to bring down their monthly payment, but with less coverage or higher deductibles. In Colorado, after a few months of calling different insurance companies and brokers and talking with neighbors, Marie Zuzak finally found another less comprehensive policy for $4,000 a year. We just got a renewal notice and it's going to be $6,000. So it's a big increase, but we feel like we're just thankful to have any coverage. She says climate change is going to be very expensive for everybody. I'm Amy Scott for Marketplace. This final note on the way out today, don't look now, but the Swiss

National Bank, which is their central bank, is not waiting around for Jay Powell and the Fed to declare victory. They cut their benchmark interest rate this morning, saying, and this is a quote, the fight against inflation over the past two and a half years has been effective. Now, why, you might rightly ask, is this newsworthy? Lovely country, Switzerland, not a dominant economy. Well, here's why. The Swiss franc is one of the world's 10 most traded currencies. And should you dabble in foreign exchange, interest rates on those currencies really matter. Higher interest rates, better returns on those currencies, right? And as it happens, the franc on an interest rate cut fell to a four-month low against the dollar

today. John Buckley, John Gordon, Noya Karr, Diantha Parker, Amanda Peacher, and Stephanie Seeker are the Marketplace editing staff. Amir Bipawi is the managing editor. I'm Kyle Risdahl. We will see you tomorrow, everybody. This is APM. All over the country. We need to improve reading in Wisconsin. Schools are changing the way they teach reading. I'm calling for a renewed focus on literacy. We have gotten this wrong in New York and all across the nation.

And it's happening because of a podcast. I think your podcast has changed my life. And I'm going to share this podcast with everyone I meet. Sold a Story investigates how teaching kids to read went wrong. New episodes of Sold a Story are available now.