Economic data can come from anywhere, you know. AI is going to be buying TV ads now, which, great. And house-sitting as a job. From American Public Media, this is Marketplace. in los angeles i'm kai rizdal it is thursday today this one is the 14th of may good as always to have you along everybody one does not usually count the census bureau among the great statistical agencies of the united states government but one should because in addition to all the straight up counting of people that it does, it also tracks a wide swath of what happens in this economy. For our purposes today, two items specifically. First of all, retail sales. April is the month in question, up half a percent from March. Nice job, American consumers. Retail sales, by the way, measured in dollars, which makes it even more interesting that that half percent bump holds true even when you strip out volatile and expensive items like automobiles and gasoline. So there is that. Also on the rise, item two for us today, business inventories. That is March data, up nine-tenths percent from February. Those are headline numbers, of course, those two, and are decent on a first impression. But as Daniel Ackerman reports to start us off, a closer inspection reveals some consternation among both businesses and consumers. Yes, sales and inventories were up. But Jessica Ramirez of the Consumer Collective says there's something to keep in mind about those numbers. Really, it's prices are high. High and rising fast, according to this week's inflation data. So the jump in the headline numbers is really about stuff getting more expensive and not about more stuff getting sold. Ramirez says in the face of all that, consumers are making hard choices. opting out for some items while they're purchasing others and just being extremely edited in the way that they're shopping. She says that could mean a summer road trip instead of a long-distance flight. But even the basics are putting a dent in wallets and bank accounts. 59% of consumers say they are dipping into savings to cover their everyday expenses. And that puts a big question mark around how much consumers will be able to keep spending in the months to come. And if retail sales do fall off, The stores don't want to be left holding the bag, so they're not exactly packing their storerooms, says Jason Miller of Michigan State. Retailers have dialed in inventories relative to where their demand is right now. And Miller says that should hold true over the summer. We can expect caution from retailers over the coming months because they're just not sure where that consumer is going to be at. Some wholesalers, on the other hand, are building inventories, says Zach Rogers of Colorado State. That's because inflation isn't going to disappear tomorrow. The cost of fuel keeps going up. And so right now you're betting against, well, if I bring things in faster, maybe I can get them in before the cost of fuel goes up even more than it is already. Rogers says demand for some big ticket items might be soft. If you look at car dealerships, if you look at furniture stores, Whirlpool had that announcement last week that Nobody's buying refrigerators anymore. But there are plenty of retail events later this year that wholesalers want to be ready for. Back to school is still going to happen in a couple months. Christmas is still going to happen in December. Rogers says wholesalers might want to buy all that stuff now rather than risk paying more for it later. I'm Daniel Ackerman for Marketplace. Wall Street today. Do with this what you will as NVIDIA CEO Jensen Huang makes the rounds with President Trump in Beijing. The chip design company's shares have popped 20%, 2-0% in the past seven trading days. And while, yes, measures of market capitalization can be formulaic and overemphasized, at $235.74 a share at the close today, with 24.5 or so billion shares outstanding, NVIDIA is this close to being worth $6 trillion. Elsewhere in American market capitalism, a couple of record highs. The Dow is back above 50,000. What? Me worry? We'll have the details when we do the numbers. President Trump is in Beijing, as I just said, for talks that can charitably be described as highly anticipated. Since we sadly can't be a fly on the wall for those discussions, we've done the next best thing. We've called Adam Posen. He's the president of the Peterson Institute for International Economics. Adam, welcome back to the program. Great to speak to you again. Always good to be on with you, Kai. Let me get right at it. Who needs this meeting to go well more? The president or President Xi? President Trump needs it more, by far. And you can see that from the body language, the carrying with him, a whole bunch of U.S. corporate CEOs, the sort of plaintive tone. I mean, in the end, the U.S. will survive even if the meeting falls apart, obviously. But going into the meeting, Trump is the petitioner. Last time you and I spoke, there was all kinds of chatter from the White House and from Secretary Besant at Treasury about decoupling this economic relationship, which, you know, would be challenging given that they're the two biggest economies in the world. But I did notice that last night the president was out on his socials talking about reopening China and getting things back on track, in essence. And that sounds very 1990s engagement-ish to me. Yeah, it does with his particular tone. And it is clearly an about face from the posturing that the US government under Trump, a bit under Biden, and again, under the last year of Trump has done I think it a good move if done properly with proper regard for national security and dependencies with some calling out China for misbehaviors But ultimately, it was pretty destructive. Let me make one more point. My colleague at Peterson, Chad Bowne, has pointed out that if you look under the hood, the share of U.S. imports from China has plummeted from 25 percent to 7 percent. And there are two important parts of that. The first is that huge shift in the amount of imports we get from China has made absolutely no difference in a positive way to U.S. manufacturing, to U.S., and if anything, it's increased inflation. The second thing is that huge shift only leaves you with the stuff we can't substitute for, like rare earths, like pharmaceutical components. So, you know, recoupling from here only makes sense. You know, I will see your Chad Bowne, of whom I am a huge fan, and we're going to have him on when his book drops here in, I guess, a couple of weeks, months, whatever it is. But I will see you, Chad, and raise you foreign direct investment. The president talks about wanting to have Chinese factories on American soil, but foreign direct investment from China into the United States is way down as well. So there are some hurdles here, right, to this reopening and reconnecting. Absolutely. And I think, Chai, that the president is right to be emphasizing foreign direct investment. It was foolishness to say they didn't want that. I mean, if the Chinese are going to, quote unquote, steal technology, which to some degree their officials do, it's done through computer means, through surreptitious means, through active bribing and spying in the U.S. Meanwhile, if we actually get foreign direct investment into the U.S., we actually get some technology transfer from them inherently. And we win over some of these potential spies. Same thing with getting these Chinese students into the U.S. It's a win-win. But you're right on the facts. It's down like 90 percent since before COVID. So I'm sure you saw the headlines this morning that President Xi had said to President Trump as they were discussing things that Xi hopes that we can avoid the United States and China can avoid the Thucydides trap. Now, I confess I had to go look that one up because it's been a long time since I've studied that stuff. But it's basically the conflict that arises when a rising power like China takes on in every possible way the established power of the United States. So you're not a political scientist, but you've been around the block a couple of times Frame that for me in the context of the global economy and the competition that exists now between these two powers Well, what's key about the Thucydides trap, which is as you say, Kai It's about having a rising power get into a conflict with established power In part because the established power is worried that if they let the rising power continue to rise, they'll lose. And there is that sense in some parts of Washington. But in the economic sphere, for all the rhetoric, Chinese ability to inflict threats on the U.S. economically can be pushed back against if, A, we provide more value to the Chinese so they have more dependence on us, more incentive to play along. and B, as long as we're collaborating with the whole world economy to discipline China. And this is not what we've been doing. And I think what President Xi is indicating is not peaceful intentions, not nice and kind words. But I think a realistic view that the world is a worse place if U.S. and China are in economic conflict. and ultimately that if he thinks time is on his side, he doesn't have to do anything right now. And that's the other key point about economics. It's never irreversible the way it might be, say, in a military advantage. There is no end point. Right. Adam Posen, he's the president of the Peterson Institute for International Economics, also a regular contributor to this program where we have questions about international affairs in China and all that stuff. Adam, thanks a lot. I appreciate it. Thank you, Kai. Thank you. I'm guessing, but not great. For those perhaps not up on the corporate machinations of the cable and television sector, Versant is what happened earlier this year when Comcast spun off a bunch of its cable networks. The parent company, Versant is, of CNBC and MSNOW and E! said ad revenues fell 5% thanks to falling ratings. That one-time crown jewel of any media company, traditional television, is taking a backseat to digital, as you know, in no small part, because advertising can be targeted a whole lot better. So enter now agentic AI ad buying. It has been all the rage this week at the upfronts. Those are the annual dog and pony shows where media companies sell their upcoming stuff to ad buyers. Marketplace's Megan McCarty Carino has that one. The upfronts started back in the 1960s, and the way television networks sell advertising hasn't really changed since then, says Tim Hanlon, a media consultant at the Vertaire Group. They bring in talent and stars and sort of wax optimistic about the great shows and content that they have. And you'd be a fool not to buy in bulk our advertising opportunities. This year's Upfronts included an actual song and dance routine from NBCUniversal featuring Bowen Yang and Matt Rogers. Then executives close deals with advertisers at cocktail parties and steak dinners. Yeah, vibes, schmoozing, that kind of stuff. Networks typically sell almost all of their inventory for specific programs at specific times up front like this Get it Upfronts Compare that to ads online which are constantly shuffling and adjusting in real time based on who's looking and what's working. It's called programmatic advertising, says TV analyst Alan Wolk. It's sort of done by an automated system where it says, OK, if these factors are met, bid this much money. NBC, Universal, Warner Brothers, Fox, and other traditional television companies are now trying out this automation, using AI agents to buy and sell ads in a more responsive way so campaigns could adjust based on what's on screen. Sherwin-Williams Paint would want to run during Property Brothers because they're painting the walls and moving his paint. Hey, did they just score a touchdown? Well, let's, you know, then run the commercial that we did that says, Hooray 49ers, celebrate it, get dominoes, whatever it is. Networks are also trying to provide more timely data about whether an ad actually drives business rather than just how many eyeballs see it. But that's harder to do with a TV than a mobile device. I'm Megan McCarty Carino for Marketplace. Coming up. The only thing I spend my money on is my car expenses and my groceries. Living rent-free as a full-time house sitter. But first, sure, why not? Let's do the numbers. Dow Industrial's up 370 points today, three-quarters of 1%, finished at 50,063. The Nasdaq added 232 points. That is just shy of nine-tenths of 1%, 26,635 there. The S&P 500 gained 57 points, three-quarters percent, 7,501. Versant tuned up 9 and 9 tenths of 1 percent on the day. Former parent Comcast brightened 9 tenths percent, all by its lonesome. The buy now, pay later, an online banking company, Klarna, beat Wall Street's expectations for its first quarter. Thank you very much. Strong demand from, oh look, American consumers. Klarna Group charged up 20 and 3 tenths of 1 percent. The aforementioned NVIDIA has been cleared to sell its second most powerful AI chip to 10 Chinese firms. That's from Reuters. The chipmaker accumulated 4 and 4 tenths of 1% on the day. Bonds down. Yield on the 10-year T-note rose. 4.48%. You're listening to Marketplace. This is Marketplace. I'm Kai Rizdal. The list of the things the president's war in Iran has disrupted is long. No need to recap here, I do believe. but I will add an item, Europe's internet connection to Asia. Most intercontinental internet traffic travels through undersea fiber-optic cables. That has been the case for a good long while. It turns out, though, that a whole lot of Europe's data goes through cables passing through a choke point in the Middle East, which, again, no need, I believe, to recap. Josh Jidza wrote about those cables and what Europeans might be able to do about them in The Verge the other day. Josh, thanks for coming on the program. Thanks for having me. So tell me about Europe's connectivity challenges with Asia going through the Red Sea. Sounds not great. Yeah. So 90 percent of Europe's Internet traffic with Asia goes through the Red Sea and most of that through a very narrow street off the coast of Yemen, which is saying repeated cuts over the last few years, which are a bigger problem because of the conflict there. Sorry, like literally cuts to the cables? Yes. Yeah. So in 2024, Houthi rockets hit a cargo ship, which the crew then fled. The cargo ship drifted, and its anchor, which was down, cut three cables disrupting traffic in the region and then as far away as Vietnam. And then this happened again about a year later. And each time it took several months to negotiate access for a repair vessel to come in and fix the cables. It's obviously not new that that's a volatile part of the world. The Europeans, I imagine, have been working on Plan B, if you will, for a while? Yeah, for a few years now, there have been a couple ideas proposed, the most ambitious of which is to run a cable across the North Pole. Two cables, one through the Northwest Passage and one across the North Pole. The North Pole one is the farthest in the planning stages. My favorite line in this whole piece is this guy who says, the problem is icebergs. I mean, it's a hostile environment, shall we say, up there. Yeah, it's extremely difficult. And what the icebergs do is they drag along the bottom of the ocean and dig up the cables, cut them, crush them, which is an additional problem because it's difficult to go fix them if it has covered an ice. Icebergs aside, this is not a cheap proposition, I imagine, right? Like billions and billions and billions of euros? Yeah, they're saying a little under a billion for the first leg, which would go from Norway to Japan. The full cable, they're saying around two billion. Also, and now I know way more than I knew about this whole situation before I read this piece, we don't have any cable laying icebreakers. No. Yeah, there's no ice capable cable ship. The cable ships well people have actually tried to do this in the Arctic before and it has run into problems for this reason But icebreakers are expensive Cable ships are a niche vehicle And so no one has put the two together yet So what's the plan? Are they just going to keep fixing these things in the Red Sea, or are they actually going to give the Arctic route a go? So the EU has put some money towards the Arctic route, towards exploring it. They're going to do a route survey this summer. They're doing some other studies to see how it could work, what the best route would be to avoid icebergs, how repair would work, those sorts of things. There's been more and more interest. I think this Red Sea problem has been a known issue for a long time. These cuts plus increased fears about deliberate sabotage of cables has everyone thinking about resiliency and alternate routes. Yeah, concentrates the mind. Josh Jidza, feature writer at The Verge. Josh, thanks a lot. I appreciate your time. Thank you. In the official lexicon, the data point is called existing home sales. Personally, I prefer used home sales, but no matter the name, sales of said homes barely budged in April, below expectations for the start of the spring home buying season. Data courtesy of the National Association of Realtors, by the way. Today's installment of our series, Adventures in Housing, is about existing in someone else's home. My name is Tara Little. I'm a full-time house sitter and a social media manager and I live in Darwin, Australia. I became a full-time house sitter when I moved to Darwin. I was living with my sister and I was struggling to find work and I was paying my sister about $200 a week in rent, which honestly isn't that bad but it's not great when you don't have a job. So I started looking into house sitting. I joined some Facebook groups and that's how I came into it. Generally I would say my average house sit is probably about two weeks. Sometimes it's a couple of days, sometimes it's a few weeks. I've had a house sit that was four months long. There's almost always a pet. It's just like feeding, walking them if they're a dog. At the moment, the house that I'm at, the irrigation isn't on, so they've got a very, very big garden. So I'm watering like an entire jungle at the moment. I've been house sitting for over a year now. I'll be really honest, I don't rely on this entirely as my main source of income because I have a social media job as well, but the only thing I spend my money on is my car expenses and my groceries. As someone who likes to stick to their comfort zone, going into different houses has been great for me to learn how to adjust to different situations. There has been times where I've woken up in the middle of the night and I've remembered the layout of the last house and I've walked into the door. But it's really easy to get so used to not paying rental bills that you just don't want to go back into, you know, a conventional lifestyle, I guess. I live out of three suitcases. And, you know, it's a lot of, you know, loading up the car, unloading the car. This is what my life looks like. But I'm happy with it. I'm content with it. And if anything, it's taught me not overconsume. Tara Little, down under, in Darwin, Australia. That thing I say all the time about how it really is a global economy? This is that, right? Tell us, would you, about your adventure in housing. No matter whose house you are living in, marketplace.org is where you can do that. This final note on the way out today, Stephen Myron is officially looking for a job. He sent his letter of resignation from the Federal Reserve to President Trump today, effective as soon as Kevin Warsh is sworn in. Borscht gets a fresh 14-year term on the board. He will serve four years at least as chair starting tomorrow. That is Jay Powell's last official day in that job. Myron took his last moment in the monetary policy sun to double down on some of the things he has pushed for during his relatively short tenure. Better measurements of inflation, looser banking regulation, shrinking the Fed's balance sheet, also lower interest rates. Our daily production team includes Livi Burdett, Andy Corbin, Maria Hollenhorst, Sarah Leeson, Sean McHenry, Michaela Sayah, and Sophia Terenzio. Will Story is the supervising senior producer. And I'm Kai Rizdal. We will see you tomorrow, everybody. This is APM. Anxiety, depression, bipolar disorder. At least half of us will experience a mental illness in our lifetime. In a new series of special reports from Call to Mind, we hear about the mental health impact of stress, climate change, immigration, and more. Tune in for conversations with people managing hardship and experts seeking solutions. Listen to Call to Mind from American Public Media. you
