cover of episode Consumer sentiment rebounds

Consumer sentiment rebounds

2025/5/27
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Alex Hawkes
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Amy Zachmeyer
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Avery Schwenk
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Bart Watson
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Bill Baldwin
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Christy Kramer
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Dana Peterson
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Francesco DeCunto
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Holly Wade
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Jim Watson
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Julia Orduna
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Kai Risdahl
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Kenneth Rogoff
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Madison Malone Kircher
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Patrick Horan
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Shannon Grein
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Ulrika Sheda
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Zachary Griffiths
Topics
Holly Wade: 作为美国独立企业联合会研究中心的代表,我认为四月份耐用品订单的大幅下降并不令人惊讶。之前几个月,许多公司为了赶在关税生效前囤积商品,导致订单激增。现在,这些公司正在回调订单。此外,一些国家和企业在解放日后暂停了一些大额订单。 Alex Hawkes: 我是经济智库Groundwork Collaborative的成员。我认为波音公司的情况值得关注。作为一家主要的制造商和就业创造者,波音正处于贸易战的中心。来自中国的一些取消巨型喷气式飞机的订单可能会对整体数据产生重大影响。 Patrick Horan: 我是Mercatus Center的研究员。我认为核心资本货物订单的减少反映了企业在购买用于生产其他产品的机器和设备方面的投资减少。这种投资的减少通常预示着经济将面临一段艰难时期,尤其是在关税相关的不确定性持续存在的情况下。投资放缓往往会导致包括消费在内的其他经济领域随后出现放缓。

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On the program today, we'll do some data. We'll do the bond market. Sorry.

But then we'll have a beer from American public media. This is Marketplay. In Los Angeles, I'm Kyle Risdell. It is the 27th of May today. Good as always to have you along, everybody. By way of refresher, as we get going here on this Tuesday, there was that trade war back and forth with Europe on Friday. Remember, 50% tariff starting in like a week and then delayed to July the 9th.

We saw that in the markets today, but you've got your relief rally and then you got reality, by which I mean the hard data that we have been waiting for. We got the latest report on durable goods orders from the Commerce Department this morning. That's the big expensive stuff. Biggest drop in six months in those orders, down 6.3% in April from March. And that was a month in which there had been a big jump in durables. So Marketplace's Kimberly Adams gets us going with what that swing might tell us.

The April declines in orders for durable goods, things meant to last three years or more, like cars, planes, and equipment, may have been large, but it wasn't surprising to Holly Wade at the National Federation of Independent Business Research Center. Holly Wade, National Federation of Independent Business Research Center

We had a huge surge the prior month, and so this kind of recalibrated what we've seen as a pattern previous to these last two months. Lots of companies stockpiled goods trying to get ahead of tariffs, so are pulling back now. Plus, countries and businesses put a hold on some big orders after Liberation Day.

Boeing, of course, is a major manufacturer. It's a major producer in the U.S. and job creator. And it is kind of square in the middle of trade war. Alex Hawkes is with the economic think tank Groundwork Collaborative and points out just a few canceled orders from China for jumbo jets can really swing the numbers. But there is another measure in this report Hawkes says to watch, what folks refer to as core capital goods orders.

It's a less volatile proxy for investment in equipment, excludes aircraft and military hardware generally. That was down 1.3 percent. The decrease in core capital goods orders represents businesses buying fewer machines and equipment they need to make other things, says Patrick Horan, a research fellow at the Mercatus Center. Investment tends to lead the rest of the economies.

And when that kind of investment slows down... Other parts of the economy, including consumption, tend to slow down a little bit later. So this suggests that the economy is going to be in for a rough period this year. Especially if the uncertainty around tariffs continues. In Washington, I'm Kimberly Adams for Marketplace.

There is indeed uncertainty in this economy right now, as Kimberly just reminded us. We all know why. We just don't seem to care. The conference board released its latest reading on consumer confidence this morning. May brought its biggest monthly increase in four years. Marketplace's Savannah Peters is on the there's never a dull moment when you're talking about American consumers desk for us today.

Back in April, consumer confidence dipped to a five-year low on the prospect of a trade war with basically the entire planet. Francesco DeCunto is an economist at Georgetown. There was this very surprising shock and people were very stressed.

But as threats of the steepest tariffs de-escalated, so did our collective anxiety. A large portion of us now believes that probably those announcements were an exaggeration. DeCunto says this month's rebound shows just how sensitive our economic mood is to abrupt policy changes. Take consumer spending plans. In April, people said they were inclined to pull back on extras like traveling and dining out.

But after the pause on tariffs with China May 12th, survey respondents said they had room in their budgets. I think it's encouraging because it means consumers aren't growing more and more pessimistic. Still, Shannon Grein, an economist at Wells Fargo, says our spending intentions don't always pan out. If we actually start to see tariffs bite in the form of higher inflations, I do think that will influence confidence and weigh on it again.

But this report does say something about how consumers have already changed. Dana Peterson, chief economist with the conference board, says wealthier consumers are hedging. Those people making over $125,000, they were the ones who put money aside for future expenses. Why? Because they have it.

Meanwhile, lower-income consumers were more likely to say they dipped into savings recently. And so that worries us in terms of seeing, you know, another surge in credit use. It's an early look, she says, at which consumers are most vulnerable to the president's trade policy.

I'm Savannah Peters for Marketplace. A look ahead of sorts before we go on to what this week is going to bring economy-wise. Tomorrow, we'll get to read the minutes of the Fed's May meeting.

I'm not a gambling man, but what's the over-under for the number of times central bankers use the word tariff, do you think? I'm going to say 12. Thursday gets us an update on gross domestic product. And then Friday, the Personal Consumption Expenditures Index, known to regular listeners of this program as the Federal Reserve's favorite measure of inflation. And just because it's early in the week yet, maybe there'll be some more tariff news?

Wall Street today, it will be the really happy music. I'll wager we'll have the details when we do the numbers. We were going to start today with a bond market story, but then we decided we couldn't do that to you again, so we put it third in the lineup.

The bond story of late has been yields. As you know, the interest rate a given bond pays. And while Treasury yields were down just a little bit today, they have been rising a lot, most specifically of late over the GOP's plan to add $3.8 trillion to the national debt. But...

Bond investors aren't driving yields higher just here in the United States. They're also demanding higher yields in Japan, in the UK, and in Germany. Marketplace's Justin Ho checked into what's going on in bonds overseas.

Let's start with Japan. For decades, interest rates there were extremely low. Japan was the country that invented ZERP, the zero interest rate policy. But in the last year, says Ulrika Sheda, a professor of Japanese business at UC San Diego, prices in Japan have started to rise. So to tamp down inflation? The Bank of Japan knows that interest rates eventually have to go up.

Bond investors know that, too. In the last few weeks, Sheda says big institutional investors in Japan have been concerned that if interest rates rise in the future, the bonds they buy today will lose their value. So they're demanding higher yields, says Kenneth Rogoff, a professor at Harvard.

They're absolutely still lending money to Japan, but they want to be paid more. Rogoff says there's another reason why investors are demanding higher yields. They're concerned about countries' debt loads, because when debt gets too high... You have to raise taxes, cut spending, or borrow even more. Investors expect the U.K. to be one of the borrowers and issue more bonds, because tax revenue is being limited by a slow economy.

The U.K. is stuck in this uncomfortable position where its growth is still really weak. And at the same time, it's experiencing the same pressures on interest rates everyone else is. Germany's debt levels are rising too, but its bond investors aren't as pessimistic. The government recently approved a massive infrastructure and defense spending package. And Zachary Griffiths with the research company Credit Sites says that kind of spending can juice the economy.

If you are able to boost economic growth through the manufacturing sector, increase employment, that creates more optimism around the ability for at least a portion of the deficit spending to be paid for. Griffith says that's why many investors are more optimistic about German bonds than they are about U.S. treasuries. I'm Justin Ho for Marketplace. Knowledge is power, goes the old saying, but too much knowledge...

Yeah, it can be tricky. Case in point, the trend over the past decade or so of wearable technologies that let us track our various and sundry health data points. Fitbits, Apple Watches, those Oura rings. But here's another saying, more data, more problems. Madison Malone Kircher wrote about that in the New York Times the other day. Welcome to the program.

Thanks. So for those unfamiliar, which is maybe some sizable portion of this audience, what are these tracking devices and specifically what are they tracking?

Sure. At this point, if you look around on a bus or a subway or on the street, chances are you'll see somebody wearing an Apple Watch or a ring around their finger that is tracking biometric data. It's called an Oura Ring. And these keep tabs on everything from how you sleep, the number of hours you sleep per day, your blood oxygen level, your heart rate, all sorts of biometric data that even just 10 years ago, we were all walking around a little bit in the dark. I had no idea what

My heart rate was, how did I ever survive? That's right. But that's a whole different interview. All this data that they're gathering, generally reliable? Moderately reliable, let's say. Yes. I mean, you know, it's certainly if you don't walk one day and the next day you walk five miles and your phone tells you or your watch tells you, you know, you walked 12,000 steps, pretty good. But where you get into trouble is...

People are now being inundated with this data that we previously never had. And that can set some people sort of spiraling, right? Suddenly, if your ring or your watch or your whatever is telling you, you might get sick soon or something might be off in your body, that can become a fixation for some people. You call it in this piece, aura paranoia, right? It's an actual thing. Absolutely.

Absolutely. And that's a catchy name for a much broader category. You know, health anxiety is nothing new. But it's certainly being exacerbated as wearable technology becomes more ubiquitous and as more people have access to data that, frankly, a number of the folks I spoke to when they got into a doctor's office and spoke to a medical professional, the medical advice they received was not, oh, yes, you're definitely sick. It's you should stop wearing this thing. So look, right.

The problem, of course, is that for the makers of these things, I'm an Apple Watch wearer and I track a little bit of stuff, not a lot of stuff, but it's the whole business model for Oura Rings in particular.

Absolutely. And I appreciate it. I talked to somebody over at Aura in the course of reporting this piece, who's the SVP of science over there, who said, look, we build this technology to work for you. And it is on the user to find a way to make that ring or make that watch or make that wearable. Make it work for your life. Make it answer a question that you have. Make it help you in some way. And if it's not, take it off. Yeah, right. It's what is the problem you're trying to solve, right? That's exactly it.

Precisely. And I did appreciate that candor that even, you know, somebody who works for Aura and really stands by the product was saying, look, like sometimes I find it a little overwhelming and occasionally I do put my ring in a drawer. Right, right. Okay, put up or shut up time. Do you have one and how affected by it are you? I don't have one. I think I am perhaps the target audience, however, though, because I started reporting this story after seeing video after video on TikTok from people saying,

voicing sort of these anxieties they were having wearing the ring. So I think I think it was being seen in the market, even if it didn't fully if didn't fully succumb to making the purchase. Yeah, I hear that. Madison Malone Kircher at The New York Times. Madison, thanks a lot. Appreciate your time. Thanks so much. Get those steps in. Oh, yeah. Every day.

Coming up... The word, the euphemism that we're using is maturing. The mature craft beer industry. First, though, let's do the numbers. Dow Industrials up 740 points today, 1.8%, 42,343. The NASDAQ picked up 461 points, about 2.5%. 19,199. The S&P 500 gained 118 points, just over 2%, 59, and 21. Relief rally indeed.

Shares in U.S. Steel are riding high after President Trump changed his mind about Nippon Steel's offer to buy it. Not Nissan, that's a car company, Nippon Steel. Although partnership was the word the president used in his social media posts, so who knows. Anyway, U.S. Steel ticker symbol? X. Heated up just shy of 2%. In Tokyo, Nippon Steel cooled 7 tenths of 1%. You're listening to Marketplace.

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Puerto Rico, your cost-effective reshoring solution. Visit investpr.org slash reshore to get started. This is Marketplace. I'm Kai Risdahl. We're in that semi-official spring home buying season, and we're about to be in the actually official hurricane season. June 1st is when that starts.

So we are going to go now to Houston, Texas, which for the past 40 or so years has had a hot housing market while at the same time being repeatedly battered by natural disasters.

As one of the cheaper big city real estate markets in this country, a lot of renters in Houston know that if they can afford a house, they should probably go ahead and buy, pricing trends being what they are. But on the other hand, homeownership there does come with some climate baggage, winds and heavy rain, flooding, falling trees, insurance costs, electrical outages, snow they get sometimes, ice and tornadoes.

So with an eye to that June 1st date, Marketplace's Elizabeth Troval talks to some first-time homebuyers in Houston about their big investment.

Amy Zachmeyer is showing me around her mid-century two-bedroom Houston home. We walk into the kitchen. That's seen better days. There's the sink. You can tell where it was cracked previously. Things like that have gotten much worse, like cracked tiles and that sort of thing. Then she points to the kitchen cabinet, where an open door is holding up a rectangle of insulation. If...

We don't have that piece of insulation there. You can just feel heat like beaming into the kitchen through the hole. A tree limb fell through her ceiling during a storm last year. That's a big problem.

The house was always a fixer-upper, but since that storm... It went from being something that was like, oh, it's, you know, it's charmingly shabby chic, kind of, to like being like, oh, like this is, this doesn't feel good. This is Zachmeyer's first home, which she and her husband bought from her landlord for $185,000 in 2021.

She grew up working class and without much personal space. This house was supposed to bring her security. This storm kind of came and just, I mean, literally this tree fell out of the sky and kind of crushed my dreams a little bit. She's in the position of many first-time homebuyers in Houston who take advantage of the relatively affordable market, but who end up saddled with costly weather damage and other bills that can add significantly to the burden of homeownership.

First-time homebuyer Julia Orduna bought a townhome last year. Her mortgage payment is around $1,500, with an added $800 or so for her HOA. HOAs are not all roses and daisies.

because we are dealing with a major subsidence issue on my side of the property. The ground outside her patio is sinking, which is common in Houston. We just fixed half the roofs. That meant that everybody had to put $2,000 of our own money as a special assessment out of the blue to fix a roof that wasn't mine. And Douglas Duckworth, another first-time homebuyer, says even though his new house hasn't flooded, he's not going to be able to fix it.

He sprang for top-tier flood and homeowners insurance. When I first purchased my home in 2022, I was paying $3,400 a year for homeowners insurance. And now I'm paying about $9,000 a year in homeowners insurance. On top of that, he spent at least $26,000 disaster-proofing his home.

I have a Generac whole home generator. To keep the lights on after a storm. And he bought instant sandbags. They absorb water and then they expand. You can basically create a barrier around your house. But he acknowledges many don't have the money to pay for disasters before they hit. And a lot of people who are at a high risk of flooding don't have flood insurance policies at all. Bill Baldwin has worked in Houston real estate for almost 30 years. With

With rising insurance costs and the cost of housing and higher interest rates, one of the first things that gets cut, if it's not required, is flood insurance. Only people in the 100-year floodplain are required to buy flood insurance, and many potential homebuyers rely on outdated maps to estimate if the house they want will flood. I do not personally believe just pointing someone to the FEMA flood map

remotely indicates your level of risk. There are statistically more claims outside of the 100-year floodplain than inside the 100-year floodplain. But people continue to buy homes that have flooded. Developers continue to pave over prairie lands that helped mitigate flooding. And more people moved to Houston.

It can seem pretty bleak, but homeownership is still homeownership. Amy Zachmeyer, whose tree bench fell onto her roof, says even with the headaches. I don't regret buying the home, but I am...

stressed out. I just wish that maybe some money would fall through the hole in our roof as well so that I could get it fixed. Zach Meyer says at least she has a place to live where a landlord won't tell her to move. And she has a mortgage payment she can afford. In Houston, I'm Elizabeth Troval for Marketplace.

A tragic story now for a certain slice of our audience, by which I mean me. The craft brewing boom of the 2010s?

Well, it's over and the market's gotten skunked. For the first time in two decades, more breweries closed and then opened in the United States last year. And craft beer production fell by nearly 4%. That's according to the trade group, the Brewers Association. So from Vermont, as it happens, the state in the union that has the most breweries per capita, Marketplace's Henriette reports.

When Avery Schwenk quit his job as a paramedic to start a brewery with his friend, his sister sent him a card. That says, congratulations on quitting your job. Now go open that boutique microbrewery you have always wanted to. And this was just a card that she found. She didn't get this made for me. This just was a thing that people were doing.

This was, after all, 2014, a year when the number of breweries in the U.S. grew by 850 to just over 4,000, according to the Brewers Association. And they were making all kinds of beer. Hazy IPAs, stouts, porters, amber ales. Schwenk and his friend got in on the trend with their business, Hermit Thrush Brewery, making exclusively sour beer.

It really is focusing on kind of those bright, citrusy notes. And oftentimes also some funk. Woody, mushroomy flavors even? Definitely not typically, you know, beer for beginner beer drinkers. But at the time, there was a market for that. Hermit Thrush had a taproom in downtown Brattleboro, Vermont. And by 2019, Schweinck says, it was available in seven states. He and his partner had plans to triple production and double their staff. And I would say that the pandemic put a big...

damper on our plans. The brewery held on for a few more years, but sales dropped and never recovered. Hermit Thrush shut down last summer. Its rise and fall pretty closely parallels the stories of a lot of breweries.

I think the 2010s was really a perfect storm for all of these openings. Bart Watson is president of the Brewers Association. You had cheap capital, you had relatively inexpensive cost of goods, and most importantly, you had expanding consumer demand. In the last few years, all of that has flipped, Watson says. Borrowing is more expensive, so are beer ingredients and aluminum cans, and consumers just don't drink as much craft beer as they did in the 2010s.

The word, the euphemism that we're using is maturing. Both the industry and craft beer drinkers, too. Millennial beer drinkers, I'm including myself here, just can't down as many IPAs as we could in, say, 2017. Jim Watson, no relation to Bart, analyzes the beverage industry at Rabobank. He says while craft breweries were a hit with Gen Xers and Millennials, they haven't had the same pull with Gen Z.

This is, I think, seen by the newest cohort of drinkers as kind of a dad's drink. Watson says there's some evidence Gen Z is drinking less overall. They can't afford as much alcohol. And when they do drink, they have options like hard seltzers. All of a sudden, starting in 18, 19, you had this explosion of other options available for consumers, some of which were much lower calorie as well. And

And those beverages compete with craft beer for limited space in bars and on grocery store shelves. That makes it a lot harder for breweries to expand their distribution. But Watson says there is one business model for craft breweries that can still work well, selling directly to customers in their own tap rooms.

Levi Kramer and his wife Christy are putting the finishing touches on a new taproom in an old farmhouse in rural North Hero, Vermont. They started their brewery, Kramer & Kin, in 2020 and quickly expanded from their garage to a large restaurant space. Now, Christy says, they're scaling back. It's a great place to be.

It was a 100-seat restaurant, so full service. And we learned a lot, but bringing it back to a real taproom feel where, yes, it is very quaint and cozy, but also where we're really bringing it back to the beer. She's hoping they can rekindle the vibe their business started with, a few taps and a place where locals can hang out. We can still have maybe even better margin and bottom line with a more simplistic experience.

business design. One she hopes can weather the ups and downs of the mature craft beer industry. In Vermont, I'm Henry Epp for Marketplace.

This final note on the way out today, which you probably heard already, but about which I feel obliged to point out the economic reality. The Trump administration has put what we are told is a temporary stop to international student visa interviews at U.S. embassies and consulates overseas. The White House, over the signature of Secretary of State Marco Rubio, says it's debating whether or not it should subject would-be international students here to intensified social media screening.

The political and legal merits of that will be covered elsewhere. I will just point out on this program that higher education, which is in fact a product, is a key American export, one that overseas consumers are willing to pay dearly for.

Our digital and on-demand team includes Jordan Mangy, Dylan Miettenen, Janet Nguyen, Olga Oxman, Virginia K. Smith, and Tony Wagner. Francesca Levy is the executive director of digital and on-demand. And I'm Kai Risdahl. We will see you tomorrow, everybody. This is APM.

Personal finance isn't just about spreadsheets and investing. It's emotional. Talking to your partner about money, negotiating a raise. Even the smallest decisions, like splitting a bill, can bring up feelings of shame or anxiety. I'm Rima Kheys, host of This is Uncomfortable, a podcast from Marketplace about life and how money messes with it.

In this season, we get into topics like workplace drama, tough financial trade-offs, and the quiet tension that builds when love and finances collide. Listen to This Is Uncomfortable wherever you get your podcasts.