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On the program today, we'll do a little bit of data. We'll talk food and then we'll go to a car show from American Public Media.
This is Marketplay. I'm Kyle Rizdahl. It is Monday today, 5 May. Good as always to have you along, everybody. $57.06 is the Marketplace price point of the day.
That's how much a barrel of the U.S. benchmark crude oil, West Texas Intermediate, would have cost you at the close in New York today. It's the cheapest it's been since early 2021 when prices were still recovering from their pandemic crash. It's also not for nothing more than 20 bucks cheaper than a year ago, probably going to head even lower, too. OPEC Plus said over the weekend it's going to start pumping more no matter what that whole supply demand price curve tells them.
So, yay, cheap gas, right? Oh, that it were so simple. Marketplace's Henry Epp explains it is possible for a barrel of oil to be too cheap.
In an ideal world, oil companies would like a barrel of crude to sell for more than the break-even price. It's the price of oil at which oil companies can profitably drill a well. Mark Finley is a fellow at Rice University's Baker Institute. Like any business, they want to make money after taking into account all their costs.
It's everything from having your corporate headquarters to buying the land or buying the rights to the land, lining up a drilling crew, paying for the pipe and fracking fluid.
Every company and every drilling project has its own break-even price, but in general, $60-ish a barrel is the sweet spot for producing oil onshore in the U.S. When prices go below that, some companies halt production. There's some evidence this happened briefly in early April when prices dropped and so did active oil rigs, says Matt Smith at the analytics firm Kepler.
It's a clear signal that we hit that break-even and broke through it there back in early April. And here we are again, testing these levels again. If prices stay low, oil companies will have a choice to make. Either invest in new production or give back to their investors, who've been demanding more consistent dividends and share buybacks. Smith says companies will probably choose the latter. You want to keep your shareholders happy rather than producing an incremental barrel of oil, which has lost...
lost you money to produce. But while low prices may throw a wrench into new drilling plans, they may not be too much of a threat to the overall industry, says Amy Myers Jaffe at NYU, because it's consolidated a lot in recent years, and bigger firms are better able to weather a bad market. I think that it would take a much more prolonged and much lower price to
to get a shakeout than it has in the past. If the economy falls into a recession, Jaffe says, while tariffs drive up the cost of steel and other materials oil drillers need, then the industry could feel more of a pinch. I'm Henry Epp for Marketplace. We mentioned this kind of in passing on Friday. We were very trade focused, if you remember, but we did get the April jobs report last week.
The labor market, as you know, is holding up pretty well so far, with the caveat that tariffs probably aren't going to show up in the data for at least a couple of months. The biggest hiring sector in this economy last month? Health care, which added about 51,000 jobs. But the uncertainty lurking in other parts of this economy could well be coming for health care next, as Marketplace's Matt Levin reports.
Let's say you work in a part of the economy that's particularly volatile right now, like the construction industry or agriculture or the federal government or a nonprofit that relies on federal funding or retail or, well, you get the picture. Economist Doug Stager at Dartmouth says if you're looking for a job that's a little more stable. Typically during an economic downturn, health care employment is the great safe haven. Sweet.
So do I pay for the scrubs or does the hospital take care of that? This time around, it's not clear that will be true and that that will be quite different. No matter how the economy is doing, people get sick and need medical care, especially as the U.S. population ages. But Congress right now is mulling $100 billion cuts to Medicaid, the federal health insurance program for low-income Americans.
People I've talked to who are working as administrators in hospitals are certainly very concerned and worried about employment reductions. During previous periods of economic turmoil, it's mostly lower-skilled workers in retail and warehousing that move into lower-skilled health jobs, like home health aides or hospital cleaning staff.
Economist Bianca Frogner at the University of Washington School of Medicine says that the future strength of health care hiring may depend on the weakness of other sectors. Will tariffs have more of an impact on retail jobs than Medicaid cuts will have on healthcare?
Frogner says those low-skilled health care jobs may pay just above minimum wage, but they're needed. She says there's evidence that when the economy starts sliding, so does people's health. I'm Matt Levin for Marketplace. On Wall Street today, you know, I guess traders just weren't feeling it. We'll have the details when we do the numbers. ♪♪
For all the woes the U.S. dollars had since January, a sharp drop against most other major currencies and a growing reputation as perhaps not as safe a haven as it used to be among them, the greenback is still the world's dominant means of exchange. It's really liquid. You can trade it without almost any hassle. Lots of major commodities are denominated in it. And as Marketplace's Sabri Benishul reports, you can find it almost anywhere.
This was a busy stretch of a main road in downtown Goma, Eastern Democratic Republic of Congo. I was there a decade ago. Motorbike taxis were zipping around, the sidewalk was bustling, and I'll never forget it, young men were walking around carrying enormous stacks of...
of U.S. dollars. Everyone prefers U.S. dollars over Congolese francs, one guy told me. He was a money changer, trading currencies right there on the street for importers and exporters and regular people. Some of his U.S. dollars were so soiled they were completely black and limp, like cloth they had been in circulation so long. Some were new.
This time through a translator, he told me a lot of business people travel abroad and they always do their business in dollars. That was true then in the Congo and it is still true all over the world. About half of international trade
is invoiced in dollars. Maurice Obstfeld is a senior fellow at the Peterson Institute for International Economics and former chief economist for the IMF. It's the leading invoice currency in the world economy. A lot of medicine is priced in dollars. A lot of loans are too, and especially commodities. You know, Australia has a lot of gold mines. If Australia sells gold to India...
that gold would be priced in U.S. dollars. Colin Carter is an agricultural economist at UC Davis. This all started after World War II. The U.S. economy was kind of the last one standing, and a lot of countries started to peg their currencies to the dollar for a while. But today there's no treaty or anything that says people have to use the dollar. We do it because we do it. The dollar is everywhere because it's everywhere. It's liquid. You can buy and sell it easily. No other currency is quite like it.
So think the Turkish lira. Brendan McKenna is an international economist at Wells Fargo. The Turkish lira is a very volatile kind of currency. It's also a currency that's really only accessible within Turkey.
There's not a whole lot that maybe, you know, someone in Argentina can deal with the Turkish lira. So dollars it is. Big financial institutions around the world like using dollars too. Again, Colin Carter at UC Davis. It's very easy for them to buy and sell dollars without moving the price.
In a small market, and this goes for anything, if you make a massive trade, you can actually mess with the price of whatever you're trading. That's not the case in terms of U.S. dollars. Because there's just so many of them. So things are the way they are because they're the way they are. People are starting to wonder, though, if the dollar might lose its status.
If you had asked me six months ago, I would say absolutely not. But today, it seems like maybe there's a little crack in the dam. Carter says President Trump's tariff policy and his threats against the Federal Reserve, which he has since walked back, have worried investors generally. Some governments worry the U.S. could use the dollar as a weapon, either through sanctions or by controlling its supply in times of crisis, says the Peterson Institute's Maurice Obstfeld.
You know, the broader concern is that in this environment of heightened trade tensions, the whole global financial system, because it runs on dollars, is intimately linked to the U.S. financial system. And the U.S. government can control certain levers. But an outright dethronement of the dollar, says Wells Fargo's Brendan McKenna, is probably a ways off. I don't think it's realistic. You know, you would have to get a wholesale change in the global marketplace for dollars to...
no longer be wanted. So the way things are is the way things are for now. In New York, I'm Sabri Beneshour for Marketplace. ... ... ... ...
Green at number three, red number 40, yellow five, yellow six, blue one and blue two. Those are the synthetic food dyes that Health and Human Services Secretary Robert Kennedy says he wants to phase out of the American food supply by 2026. But the food dye supply chain isn't just about color. Julie Creswell wrote about synthetic food dyes and what it would take to scramble that particular supply chain for The New York Times the other day. Julie, thanks for coming on the program.
Thanks for having me. Where does one find all the aforementioned dyes that Secretary Kennedy wants to get rid of?
They're in almost everything we eat, from your breakfast cereals to your yogurt to your after-workout, you know, electrolyte replenishment drinks. They're just everywhere. You start this piece with the anecdote that, you know, Froot Loops in the States look different than Froot Loops that one finds not in the United States. And is it just—
Americans like neon-colored food? Is that kind of where we are? It kind of is. You know, there was a move about a decade or so ago by some of the cereal companies to try to reduce the artificial dyes in cereals. And basically, sales slumped. Americans like their bright colors. And so I think that's why these dyes continue to be found in so many foods is Americans associate bright with good. Hmm.
So, on the theory that this will eventually have to come to pass because the federal government said so, there's a bunch of challenges, one of which is timing, right? Because if you're going to figure out which natural dyes and substances to use, you got to, number one, figure it out. Number two, you got to plant them. Number three, you got to harvest them and so on and so forth.
That's right. You know, it's not as simple as sort of like, you know, replacing your neon blue Froot Loop with, you know, blueberry juice. It's one, there's just actually not enough blueberry juice in the world to make up like for all of the colors and all of the food dyes that are in the foods we're used to eating. So if everybody like flip the switch tomorrow, we'd have a real shortage going on. And then again, it's also not a one for one. You don't sort of take a
beet and that that replaces your red dye 40. It actually is almost a 10 to 1 ratio. Really? Yeah. It almost takes 10 times the amount of natural color to achieve close to the artificial dyes that we've gotten used to. And when you start doing things like that, now changing a recipe, think of like how you make cookies. If all of a sudden you add 10 times the amount of sugar, your whole recipe has to be changed and adjusted. Right.
There's also a great line in this piece that speaks to a larger problem. Some scientist or R&D person says, you're never going to take the taste out of strawberry juice. It just tastes like strawberry juice, which is to say flavors come with blueberry juice and beet juice and all that jazz, right? So you got to figure that out too.
That's right. And that's part of what the people that make these colors, like one of the companies I spoke to, does both artificial and natural. And they are actually out there developing seeds, hybrids of seeds that pull that flavor out.
Because some of these flavors, I mean, if you don't like beets, you know, you're not going to want a beet cereal. But there's certain foods. Yeah, the strawberry is a little tough to get past. So what do you think? Is this going to happen? I mean, you know, Kennedy says they've reached an understanding with these producers. But I don't know. What do you think?
I think they're going to drag their feet for as long as they possibly can. Um, you know, PepsiCo on its earnings call last week said they are moving away from, from, um, artificial dyes that a number of the, you know, they're big, they, they, these guys make Doritos, they make, um, you know, flaming hot Cheetos, they make all these different things. There ain't no orange like a, like a flaming hot Cheetos orange, right? Come on. We haven't found that one in nature yet for sure. Um, but they said they're going to be moving more. Um,
towards that. And it honestly, in the office, when we brought these, we brought these to the office, I brought the, yeah, the fruit loops. So what did the New York Times have to say about all this? Some people associated the duller colors with more natural and organic. And that it seemed something that it would be healthier, you know, was, was again, the interesting, like what their brains were sort of telling them, if it's a little duller, and it's not quite as bright, then it must be healthier. And you're like, no, it's,
Exactly the same. You know, these are companies, some of these products, I mean, again, Doritos, Cheetos, those are billion dollar products in sales. And I think it's just these guys are going to really be reluctant to monkey with success, if you will. Julie Creswell at The New York Times. Julie, thanks a lot. Thanks for having me. Coming up.
You drive these cars a little bit like driving a jet. Can't get it here, though. Chinese electric vehicles coming up. But first, let's do the numbers. Dow Industrials off 98 points today, about a quarter percent, 41,218. The Nasdaq gave back 133 points, three quarters percent, 17,844.
The S&P 500 dipped 36.6%, 56.50%. President Donald Trump's announcement of a tariff on films produced abroad sent a chill through entertainment company stocks, never mind that he doesn't have the legal authority to do that. Walt Disney Corporation down 0.4%. Warner Brothers Discovery dropped 2%.
Paramount Global down 1.6% today. A report from the Treasury Inspector General shows how many tax auditors the IRS lost through Elon Musk. The IRS has shed some 31% of its auditors through buyouts or layoffs. The report also notes, by the by, that in 2023, auditors ended up pointing out an additional 32 billion simoleons in tax assessments. Bond prices down. Yield on the 10-year T-note up 4.35%. You're listening to Marketplace.
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This is Marketplace. I'm Kai Risdahl. With the all-important caveat that the data point I am about to relate to you is a lagging indicator, there was some good news from the services sector of this economy today. The Institute for Supply Management, which, as you might imagine, tracks and promotes, broadly speaking, supply and the management thereof. The ISM said today that the U.S. services sector continued its expansion last month, the 10th month in a row.
But as Marketplace's Samantha Fields reports, a lot of those businesses, especially small ones, are worried about tariff hits yet to come. And some of those businesses are already seeing prices go up. Here's Sam.
This was a good report card for the services sector. It does not show some of the economic weakness that we are all sort of looking for. Erin McLaughlin at the conference board says new tariffs only went into effect in April, so it's still early. And it'll likely take a bit before they affect the cost of services.
Stephen Juneau at Bank of America says that's because tariffs apply to goods. If you think about a hotel, right, you've got shampoo, soap, towels, all of these things that are goods that they use in kind of the cost of the hotel room. So you're going to see some impact there, but it's just much more marginal relative to the labor cost. Even if hotels have to start paying more for all those little shampoos and soaps, that might not mean they have to hike the cost of a nightly stay, at least not right away.
But Steve Miller at the Institute for Supply Management says some service businesses are more affected by tariffs on goods. We saw over the last three months construction and utilities prices
being two that have been significantly impacted. And in the next few months, Gregory Dacco at EY expects more will start to feel pressure from tariffs. And from the fact that we are still in what I've described as a supply-fragile environment where minor shocks to supply conditions can lead to outsized inflationary consequences. But in that environment, he says it'll help that the services sector is starting from a strong position.
The job market is, too. Erin McLaughlin at the conference board says she's hearing from businesses that after all the hiring challenges of the last few years... They're still very hesitant to lay off workers. And so as long as that unemployment rate stays stable... That will allow consumers to keep spending, which is good for the economy. I'm Samantha Fields for Marketplace.
There are, give or take, depending on what source you're looking at, a hundred different electric vehicle brands in China. It is, in other words, a cutthroat market. So those hundred or so EV makers are competing on everything. Price, luxury, technology and overseas market share. Marketplace's Jennifer Pack took a walk around the Shanghai Auto Show to see what's what.
At the Shanghai Auto Show, there are nearly 1,300 cars on display, and 70% of them are EVs. New models are introduced with flares. You've probably never heard of these EV brands, like Chinese startup Xpeng. These two seats are standard for ventilation and heat massage. Right?
Product manager Xu Pengfei shows me the firm's flagship electric sedan, the P7 Plus, spacious with leather seats. He says the car uses a lot of artificial intelligence, say to adapt the car to road conditions.
For example, if the car camera detects a pothole ahead, the car will adjust and make the damping softer. This would allow for a smoother ride over the pothole. The P7 Plus is in the premium range. It retails in China before government subsidies and tax exemptions for $29,000. For that price in the U.S., you get a basic EV model. But many of these Chinese EVs are anything but basic.
Like this next model I check out by EV maker Diebel. Product manager Mr. Zhang shows me an SUV, the S09, fit for a young family, he says. Which one? This one.
It's equipped with a mini fridge, seats with massage functions, and a 21-inch screen in the back seat. For $33,000, it's like a living room on wheels. Chinese consumers are spoiled for choice, Mr. Zhang says. In this highly competitive market, we'll provide them with creative products and functions that are more efficient, give better experiences at a cheaper price without sacrificing quality.
But some of the coolest tech in Chinese EVs might not be exported. I'm actually seeing a lot of features in Chinese cars that are kind of stuck in China. Auto journalist Zhu Linliao is with the Singaporean Business Times. He says each country has different regulations on emerging technologies. And many Chinese EV features like... Being able to order a cup of coffee just by talking to your car. Being able to, I would say, enjoy some of the...
semi-autonomous driving features. I think there are some features that China really leads the world in. But are only in China. Of the 13 million EVs sold last year, Xpeng and Depot combined sold less than half a million models. The two companies are not profitable yet. Neither is the next firm I'm checking out, Mio. You drive these cars, a little bit like driving a jet.
David Zhang with NIO shows me an electric sedan with seats like the ones on a business jet. The ET9 model costs over $100,000 and started deliveries to customers in March.
And with 35 speakers, you can enjoy music with everyone in the car or... Oh, the music's coming out from my headrest. Checking out the NIO ET9 is Stéphane Desmet with the automaker Stellantis in Belgium. He says Chinese firms are setting the EV trends.
His firm Stellantis is helping Chinese EV firm Leap Motor sell in Europe. And yes, he says, the European Union has tariffs on Chinese EVs, up to 30-some percent. But even so, he says, Chinese EVs are much cheaper than European cars.
At the Shanghai Auto Show, I'm Jennifer Pak for Marketplace. This final note on the way out today in which irony is dead done in by Elon Musk and his operatives. From the Office of Personnel Management in Washington today came this press release. Quote, the U.S. Office of Personnel Management is proud to join agencies across the federal government in celebrating Public Service Recognition Week, which runs from May 5 to 11, 2025.
It goes on, this annual event honors the dedication of public servants who work every day to improve the lives of the American people, from processing veterans' benefits to defending our national security. End quote. Now, to be clear, I'm a firm believer in the value and importance of public service, having done it myself in two separate federal agencies. But this? Wow, you know? Our daily production team includes Andy Corbin, Nicholas Guillaume, Maria Hollenhorst, Eru Ekpenobe,
Sarah Leeson, Sean McHenry, and Sophia Terenzio. I'm Kyle Rizdal. We will see you tomorrow, everybody. This is APM. Hi, this is Julie from Centennial, Colorado. I listen to Marketplace on my drive home from all my three to midnight ER shifts. Kyle and the gang keep me awake and interested for my 30-minute drive. For someone not in the financial field, it's a fantastic synopsis of all things business and economics.
I love the commitment to showcasing a steady stream of brilliant and articulate women who are experts in their field. Join me in supporting Marketplace with a gift today. Go to marketplace.org slash donate.