Labor force participation dropped last month
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Hey there, and thanks for listening. We want to know more about our audience. So stick around at the end of the episode to hear about how you can provide feedback and potentially walk away with a $75 gift card. Yes, it's a Friday jobs day, but that might not be the most important thing that happened this economic week. From American Public Media, this is Marketplace.

In Los Angeles, I'm Colin Rizdahl. It is Friday today. This one is the 6th of June. Good as always to have you along, everybody. I could do a little throat clearing here, remind you of the economic happenings of the week and then start things off. Or we could just start. Ana Swanson is at the New York Times. Heather Long is the brand new chief economist at Navy Federal Credit Union. Hey, you two.

Hi, Kai. Heather Long, we start with you. First of all, congratulations on the new gig. We're so glad you can keep coming on the program and making us smart about stuff. Here is my question to you. 139,000 new jobs this week, this month, sorry, last month. Unemployment rate held steady. So far, so good, right? What are we worried about?

Well, you're right. It's pretty good, but with a side dish of caution. I know, I feel like I'm always the downer. But look, I would say I saw the number and my first reaction was, okay, no imminent recession. Still, we have over 159 million Americans employed and getting their paychecks every week. That's really good news. That's keeping the economy humming. But

But we also saw 80% of those 139,000 job gains came from just two sectors. And that was healthcare and hospitality, leisure and hospitality, basically hospitals and restaurants.

And while those are great jobs, that's not a very dynamic economy when you don't have a lot of sectors growing. And temporary help was down, professional and business, white collar jobs are negative. Manufacturing was negative. Even retail shed jobs in May. So I think when you start looking through the details of the report and, of course, the federal government shed jobs, it doesn't look quite as strong. And that's where I'm a little disappointed.

I've been calling this the abundance of caution economy. All right. Fair enough. Honest Watson, I'm going to give you a break and not ask you about trade until the second question that you're going to get in this afternoon's program, because I know you're sick and tired of that. But I do want to talk about the vibes here for a minute, because we've been waiting for the hard data to catch up to the vibes. The vibes are the hard data sort of Heather kind of alluded to. Maybe it's starting to change. What do you think?

Yeah, yeah. So, I mean, I think Heather is right. You know, the economy looks pretty strong overall, but there are, you know, some signs of turbulence in there. We did have significant revisions to the numbers that came out in March and April. And I will actually bring it back to trade because I think that you did see signs, actually, that, you know, tariffs are deterring hiring in parts of the economy that depend on trade.

You know, jobs were lost in manufacturing and retail. Obviously, we saw this kind of surge that had happened earlier in the year in transportation and warehousing as companies were stockpiling ahead of the tariffs fade off. And then you also saw these big losses in machinery. So companies that are making machineries for other factories, which is kind of worrying. So, you know, job growth is just not very broad based. You had as many industries cutting jobs as adding them. And so it's

Yes, things are very strong overall, but it does hint at kind of this uncertainty that maybe businesses are starting to hold off on some big decisions due to all the unknowns over tariffs and other policies. Heather, one takes the pronouncements by the president of the United States on the economy at one's own peril. And today he reverted to form and went after Jay Powell, telling him to cut rates a full point and add some rocket fuel to this economy. And there is no inflation today.

And the fact of the matter is there is inflation. We need to have some inflation. And it would be a very bad thing right now if the Fed went ahead and cut rates real hard. And I guess the question is, the market knows what's going on. The president doesn't. What are we supposed to make of that?

Well, right now, the good news is everyone seems to be ignoring the president's comments about the Fed. I thought it was amusing. Including Jay Powell, probably. Yeah. It was probably a good sign for the Fed chairman that the president didn't actually use the name Powell in these tweets. He kept saying he. So...

That's where we're at. I think next week, two weeks from now, we'll hear from Chair Powell again. And right now it's just on hold. And that's probably good. That's where we're going to stay. Yeah. All right. So Anna Swanson, the hardest and busiest person probably on the trade and economic speed in all of economic journalism. Here's what I want to know.

The president of the United States has ruined your weekend because his cabinet secretaries, Secretary Lutnick, Secretary Besant, are going to go over to London and talk with the Chinese about trade. Here is my question.

Are we actually negotiating or do they just want to look like they're negotiating? And I ask this because of the the the thing that they have actually said out loud, which is we want to strategically decouple from China. We don't want to be as dependent on them. What do you suppose is going on behind closed doors?

So, yeah, there will be more trade talks in London on Monday. And you're right, I think most of the negotiations so far seem to have just kind of focused on reversing the situation that they have immediately landed themselves in with high tariffs on both sides.

with China putting these curbs on minerals that has really scared, um, like automakers and defense industries in the United States because they need those minerals. So most of the negotiations so far seem to have focused on just sort of getting things back to stable. But, um,

I mean, the Trump administration is really concerned about unbalanced trade with China. It just remains to be seen if they can actually convince the Chinese to do anything about that. So, you know, they might be talking about purchases, but we had, you know, big purchases in the trade deal struck in Trump's first term. China didn't make them.

what China really wants to buy, like advanced chips. We don't particularly want to sell them. You know, it's been much harder and even impossible to convince the Chinese to make real changes to the structure of its economy. You could see some low-hanging fruit with an ultimate deal, you know, China policing more fentanyl shipments or buying some more Boeing airplanes. But there's a reason this is a very difficult, you know, situation between the U.S. and China that has lasted a long time. Right.

Heather, last question to you. You got about 45 seconds to do it once I get it out of my mouth. How worried are you about, and we talked about this on the program earlier this week, the proposed restructuring of some of the economic statistical agencies, the BLS into the Bureau of the Census, and generally the integrity of our statistical system?

Yeah, that's a great one. I don't know, on a scale of one to 10, I'd put myself at a seven or eight, pretty high worry level. And I was thinking about it. It's kind of like if you're driving a car and the rear view mirror falls off, you can still drive the car, but with a lot less visibility, right? And that's kind of what's happening with our government statistics. Do I still trust them? Yes. There are a lot of good people still there putting these out, but we're going to have less visibility to our

the amazing regions of this country right there's just fewer offices collecting fewer resources going towards this and that makes us weaker overall we don't have that visibility we want into this economy heather long is chief economist at navy federal credit union anna swanson is at the new york times thanks you two thanks guys have a nice weekend wall street today

That just a bit better than expected. Jobs report had traders looking for reasons to buy. So they did. We will have the numbers. No, we'll have the details when we do the numbers. As Heather was just saying a minute ago, there are some things to like in this jobs report and there are some things to be worried about on the...

Yeah, maybe we should worry about this side. The labor force participation rate. In layman's terms, that's a percentage of Americans either working or actively looking for work. It dropped to 62.4% in May, well off the highs of the past couple of years. Just how worried ought we be? Here's Marketplace's Matt Levin.

Sometimes there are positive reasons people leave the labor force. Older workers finally reaching a planned retirement. Younger workers going back to school for an advanced degree. Your crypto loving cousin cashing out his Bitcoin to try van life for a few months. But economist Corey Staley at Indeed says lately the reasons aren't so positive. There are some evidence that maybe people are saying it's taking me so long to find a job.

You know, what am I doing? Right. Like, I'm just I'm going to stop. Right. About six million people last month wanted a job but weren't in the labor force. Three hundred thousand more frustrated people than in April. Staley says in certain industries like tech, dwindling job openings may be keeping potential workers on the sidelines.

So what we see in the Indeed job postings data is that as of the end of May, that software development job postings were about 40% below where they were in February 2020. Much of the drop in the May labor force participation was driven by workers age 24 or younger who

Economist Preston Moy at Employ America says that's troubling, but not panic-inducing. I would say it's a warning sign for the labor market. You know, if we saw a very large decline in the labor force participation rate for people aged 25 to 54, that would be a really, really bad sign for the labor market. The prime age labor force participation rate did drop slightly in May...

but overall is still historically pretty high. I'm Matt Levin for Marketplay. You think about $800 in the grand scheme of the bilateral trade relationship between the United States and China.

you might not think it's that big a deal. You might even think it's de minimis, which, dad joke aside, is an actual real thing. There's a whole lot of tension in the Sino-American economic relationship right now, well-documented here and elsewhere, thanks to folks like Anna Swanson. A key part of that has been something called the de minimis exemption, which has allowed goods valued at $800 or less to be imported into these United States tax-free.

Has been allowed is the key word there because President Trump ended that exemption on May the 2nd. Until then, U.S. Customs and Border Protection says 92 percent of cargo coming in in the United States had been under that de minimis rule. Marketplace's Jennifer Pack has been checking in with some Chinese e-commerce merchants the past three months or so. Here is her latest dispatch.

Shanghai's e-commerce vendor Vicky Su is 31 and likes being her own boss. She sells her own brand of toys, boxer briefs and Japanese futon covers on Amazon, all to the U.S. Even with the ongoing trade chaos, she says it's worth it. If you look at the other industries in China, last year every section was in a slump. Only exports are doing relatively better.

She kept overheads low by having her mom and dad to help. The de minimis exemption allowed her to send products duty-free to the U.S. But that business model started to crumble February 4th, when President Donald Trump's administration canceled the de minimis exemption for China and hiked tariffs to 10%. So now what? I texted Vicky Su via WeChat. She was too busy to meet up, but wrote back, I hope these U.S. decisions are called off.

Otherwise, many Chinese companies will go bankrupt. I checked in with another e-commerce seller to see if he was worried that the de minimis exemption was going away. Lei Chongrei in eastern Jiangsu province manufactures lingerie and was selling products both direct to consumers through de minimis and as a wholesaler. We have our own warehouse in the U.S., so I can continue selling in the American market, no problem. I've been

I've been following Lei Chongrui's business since 2018, just before President Trump imposed tariffs in his first term. Not only did Lei Chongrui's business survive the tariffs, his sales to the U.S. even went up from 50 to 70 percent. In the end, it's the American consumer that will pay the extra costs. A day after I spoke to both sellers in February, the Trump administration reinstated the de minimis exemption temporarily.

After 96 hours of chaos, it was business as usual when I met Amazon seller Vicky Su back then. She was relieved. We sell about 200 orders a day. It is busy. But that changed in May, when Trump officially cancelled the de minimis exemption for China and

And tariffs on Chinese goods were sky high. I called Vicky Su. She says she's raised prices and it's hurting business. Our orders have dropped by 60 to 70 percent. As for lingerie manufacturer Lei Chongrei, his wholesale business is fine for now because he stocked up on pre-tariff products in his U.S. warehouse. But the duties killed a lot of orders on his direct-to-consumer sales, he says via WeChat. On

Under the current tariff policy, we've almost stopped all our sales from China to U.S. customers. Turns out, instead of paying tariffs, a lot of American consumers walked away. So Lei Chongrui is looking to expand in Asia and Europe. Then on May 12th, the U.S. and China had a truce. Sort of. Good evening, reporters. It's May 10th.

The country's announced a 90-day reduction in tariffs as they hammer out a trade deal. Now, if you've been feeling a bit of vertigo from all the Trump tariffs, so too have e-commerce vendors. Amazon seller Vicky Su is still figuring out the cheapest way to export to the U.S., which changes by the day. I feel like I've been on a roller coaster because there have been a series of ups and downs.

And she says she's not clear what will happen when the 90-day truce ends in August. In Shanghai, I'm Jennifer Pak for Marketplace. Coming up... My whole life, I think, has been like a passion about mental health. Do what you love. You'll never work a day in your life. Entrepreneurship in Utah County straight ahead. But first, sure, why not? Let's do the numbers.

Dow and Dow's rose up 443 points today, 1%, 42,762 for the blue chips. The Nasdaq banked 231 points, 1.2%, 19,529. The S&P 500 up 61 points, 1%, 6,000 on the nose. For the week, five days gone by, the Dow was up 1.2%. The Nasdaq gained 2.2%, S&P 500, 1.5% to the good.

Not much to say about the feud between the world's most powerful person and the world's richest person, and so we won't, except this. Tesla up almost 4% in today's trading. Trump Media and Technology Group also up almost 4%. Bonds down, yield on the 10-year T-note 4.5%. You're listening to Marketplace.

This is Marketplace. I'm Kai Risdahl. California's Central Valley doesn't get as much press as Silicon Valley does, but it is just about as important. Most of the fruits and nuts and vegetables that we all eat are grown there. And it, too, is being transformed by technology.

In the face of climate change and labor force challenges and shrinking margins, a lot of farms there are turning to automation. And there is a push to make that area a hub for ag innovation. Megan McCarty Carino and the team from Marketplace Tech went to check it out. If you want to learn how to drive a tractor, there's really only one way. Honestly, jumping on the tractor, that's the best way I find out to learn. I love it.

Alan Vizcarra teaches the Ag 353 class at Reedley College outside Fresno about how to operate agriculture equipment. And today is the lab section out in a field they call the playpen. A lot of our students, it's the first time ever driving a tractor, so it's kind of scary, right? They have a lot of levers and buttons and whatnot. The course is part of a certificate program launched at seven Central Valley community colleges last year to provide workforce training in agricultural technologies.

It's funded by state and federal grants and free for students like Victor Morales. He's already passed his tractor exam. Actually, he drives them for a living. He's here to learn about new kinds of equipment, like a robot called Amiga.

It only has wheels. It's kind of weird because it's like a skeleton. It has four tires, but each tire has its own motor. Amiga is a customizable autonomous farm rover, kind of like a Mars rover. And this one is outfitted with AI-powered cameras, says instructor Vizcarra. We're going to run it through the orchards and the cameras on the sides, and they're actually counting, counting the blossoms, counting the fruit. So you can actually estimate yield, right?

Morales maneuvers the Amiga using a joystick remote. It can also be pre-programmed with GPS coordinates. I'm curious, mostly because I want to know what the tractor's really capable of.

Automation tech like this is becoming more central to operations at HMC farms 20 miles away, where they grow peaches, plums and table grapes. Farm manager and VP Drew Kettleson showed me his new fleet of autonomous carts called Burros. They have sensors all around for obstacle avoidance. They've also got cameras. And so they're

You can train these things to follow a path. HMC uses them for grape harvest to send boxes of just picked fruit out of the vineyard to a worker packing pallets for cold storage, a task that used to be done with a wheelbarrow. It reduces the stress on the people and it keeps them actively working on what they're good at, which is picking fruit, cleaning fruit, packing fruit. Okay.

Kettleson says automation can make farm work safer and less grueling, but he says it's also a business imperative. California has relatively high wages and the industry faces chronic labor shortages. Specialty crops like HMC grows aren't federally subsidized like corn or wheat and take a lot more work.

For our industry, it's a little bit of a myth that technology is going to come in and steal these jobs. We need technology to come in and help save our jobs. I feel like it's going to help us continue into the future and sustain our business. Building a resilient agriculture industry in the Central Valley is the goal of the F3 Innovate Initiative, short for Farms, Food, Future. Karen Aceves is a consultant and regional director for the program.

If we could transform our economy by creating the technology we need for the farms and the future here and make it climate efficient, we could create value, bring jobs and rebuild our economy.

Kick-started with a $65 million federal grant from the 2021 American Rescue Plan, F3 Innovate is seeding ag tech research at local universities and upskilling the workforce through programs like the one at Reedley College. One in three farmworkers are at risk of automation. We sought to find a way to put those incumbent workers first in line for the opportunities that the new ag tech initiative would create.

Back in the playpen with the Amiga robot, Victor Morales sees a lot of potential in the new technology. It's a big help. It really helps with the physical effort. And he's hoping these new skills he's learning will be a big help getting a pay raise. In Fresno, I'm Megan McCarty Carino for Marketplace.

You can find all of the reporting that Megan and the Marketplace tech team did in the Central Valley at our website, marketplace.org. Or, obviously, all you have to do is listen wherever you get your podcasts.

One line item from the May jobs report that we haven't gotten to yet is the number of self-employed people in this economy. That's of particular interest to us this week because of the reporting we've been doing from Utah County, Utah for our series, The Age of Work. Utah County is a place where there's an unusually high rate of entrepreneurship. Another word, obviously, for self-employment. Here's the story of one person that we talked to.

I'm Sandra Adela Fuente. I'm originally from Mexico. And what I do here in Utah County is leading a nonprofit organization. We provide mental health services to our Latino community mainly. I'm a psychologist and I love my work. I really love it. My whole life, I think, has been like a passion about mental health.

As immigrants, we face so many challenges, and most of the time we face these challenges alone. We don't know what to do, where to go, how to do it. And I realize how important for our communities to have emotional well-being programs that are in our language, that are affordable. So I didn't find those.

So I decided to start this with the idea to help us to have a better acculturation process. And little by little, we have been creating a great community, like a network. And so far, we have grown from one support group to four support groups.

One woman once said, if I would know what I know now in this group years ago when I came for the first time, my life would be totally different. And she was referring to those opportunities like job opportunities that she didn't have. And she didn't find some resources for her children, for example. So when they come to our group, they're looking for so many things.

They're going back to school. Of course, we are all learning English as another language, but we also are trying to open up more businesses and changing careers. So far, all programs are free. Our support groups are free and workshops are free. We also are suggesting and accepting donations for our participants. And they're just starting to pay their kind of membership, which is $20 per month. So it's just something, but it's so meaningful for us.

It's been really, really rewarding, but exhausting at the same time. I'm the one, I always joke about this, but it is true. So I'm the one who sells the ticket for the movie, made the popcorn and salad, project the movie, and clean up the movie after the show. Maybe for all business owners and entrepreneurs, isn't that the way that you start? ♪

Sandra Uribe de la Fuente, her nonprofit is called Tu Bienestar Emocional. That translates into your emotional well-being. She is in Utah County, Utah. This final note on the way out today, a rare bit of British soccer news given that the Premier League's season is over. Shares of storied but struggling Manchester United rose today up almost 19%.

on news that his revenues this year were better than had been expected. Still and although, well in the bottom half of the table. Our theme music was composed by B.J. Liederman. Marketplace's executive producer is Nancy Fargali. Donna Tam is the executive editor. Neil Scarborough is vice president and general manager. And I'm Kai Risdell. Have yourselves a great weekend, everybody. We will see you back here on Monday, all right? This is APM.

Real quick before you go, we'd love it if you'd please complete a short anonymous survey by going to marketplace.org slash survey. It would only take about 10 minutes. And as a token of our appreciation, you can enter your name to win a $75 gift card once you've completed the survey. You do all of us at Marketplace a huge favor by filling it out.