On this Friday, some jobs, a dash of tariffs, aviation, and we'll play some Mahjong. From American Public Media, this is Market Class. In Los Angeles, I'm Conor Risdahl. It is Friday today, May the 8th. Good as always to have you along, everybody. All right. Seven minutes. This whole economy and what the heck is going on. Let's see if we can do it. Heather Long is at Navy Federal Credit Union. Greg Ip is at The Wall Street Journal. Hey, you two. Hey, Kai. All right, Heather, you get the first bite at the apple here. 115,000 new jobs in this economy in the month of April. The rate stayed steady at 4.3 percent. Discuss, please. Look, I thought it was a good report. You know, 115,000 is double what was expected. As you noted, the unemployment rate stayed steady. And what really got me excited is we finally saw some hiring in an industry other than health care. You know, we saw a big jump in transportation and warehouse jobs. We have retail was up, a little bit of hospitality, construction and social assistance. This wasn't a one trick pony, you know, thing anymore. I'm not saying everything was perfect. It's still hard to get a job in the tech industry or finance. There was a pretty big jump in people who could only find part-time work instead of full-time. And of course, the big Achilles heel of the economy is wage growth of 3.6% in the past year is getting wiped out by inflation and these surging gas prices. But if you look where we were in 2025, when basically no jobs were getting added, to where we are in 2026, where we've had 76,000 jobs a month on average so far. Things are looking better. Heather Long, you have been on this radio program for 10-ish years. I know you in real life, and you are a reasonably steady-state person. This is the most excited I've ever heard you on a Friday afternoon. Well, thanks, I guess. No, I mean, it's a compliment. It's a tell on how you really feel about this jobs report. steady is a good word. You know, you got to stabilize the patient before they can recover. All right. Fair enough. Greg Ip, you're going to take the flip side of this coin, I gather. That's right. I will try to sound a little less irrationally exuberant than Heather on this. But truth be told, I'm not going to take a negative view on this report because I agree with Heather that it is on balance pretty good. But I want to step back from April alone and take a look at the bigger picture. Now, the numbers have been bouncing up and down. A few months ago, we had a big negative number. But year to date, we're actually averaging about 76,000 new jobs per month. That's not a lot, but last year, we only averaged 10,000 jobs per month. In fact, last year, job growth is so slow that we went through, I think, an eight-month period where it was negative for four of those eight months. I think there was genuine fear that we were like dropping to stall speed, maybe even, you know, flirting with recession. So I'd say that stepping back here, the most encouraging thing about this report is that despite all the headwinds from tariffs and oil in Iran and so on, is that we seem to have now established a moderate but stable pace of job growth. All right, well, we'll take moderate and stable. And that's kind of what Heather said. I do wonder, though, Heather, if I could delve very briefly, very briefly into the world of the Federal Reserve. I wonder if that big sigh we heard this morning was coming from Kevin Warsh, who is going to get squeezed right when he takes that job. But now, at least based on this report, he only has to worry about inflation. He doesn't have to worry about the stagflation part of this thing. Well, I think you're right. And I mean, I don't envy him because the reality, I keep calling it a split screen economy. I know Greg has written about this as well. You know, we've got this AI boom going on. A lot of the economists and Wall Street indicators look pretty good. But on Main Street, a lot of Americans are really feeling squeezed right now. You know, it's not just the vibes aren't good anymore. You know, wage growth is not keeping up with inflation now. And, you know, people are feeling financially pinched. And that's a hard problem for him to solve. He's going to just hold rates steady probably for most, if not all of the year, but it's hard to watch people in a rough time. Yeah, yeah. And incoming from the White House as soon as he takes that job in like three, two, one, you know. Greg, I want to talk about AI. Heather mentioned it very briefly. You wrote, I guess, yesterday, maybe two days ago in the journal. Maybe letting a little air out of AI right now wouldn't be such a bad thing. Talk about that for now, would you? Yeah, I know it's probably an unpopular view, certainly in Wall Street. But I I mean, hey, like Heather said, there's basically two economies right now, the AI economy and everything else. If you look at the GDP numbers, for example, they look pretty solid, around 2%. But if you take out all the spending on data centers and all that stuff, you're somewhere between 0.5% and 1.5%. And by the way, a lot of that AI spending isn't even on stuff we make here in the United States. We import it from Taiwan and South Korea. You look at the stock market, right? Almost all that run up towards records in the last few weeks is led by the so-called Magnificent Seven or the other semiconductor stocks that are sharing this AI glow. So the aggregate numbers are being held up by this AI boom or bubble, if you want to call it. But everything else underneath the surface looks kind of like flat-ish. And so, yeah, that leads me to this probably somewhat unpopular or out of consensus view that if the AI boom went bust, which I am not predicting, it wouldn't be that terrible. I mean, the economy would still be growing. And honestly, all that wealth that's been created by AI, it mostly went to a small number of people. The average person cares much more about their wages than their wealth, and their wages would probably not be affected. So let's talk then, Heather, and you get 30 seconds and then Greg get 30 seconds on what we can extrapolate from today's jobs report and cranky consumers, but the market's doing well. You know, lay that crystal ball in the next six months for me. I think it's more of the same of the split screen economy that we've both been talking about. But here's my but. I think there going to be more belt tightening as we move throughout the year You know it just an economic reality that say the middle class right now still has some money left from those larger tax refunds but about half of it been eaten up now by the higher gas prices, and that money doesn't last forever. And by the end of the summer, it'll probably be gone. And then people have to make hard choices, like a lot of modern income families are having to make right now. So I think you get a little bit of pullback. And frankly, all those companies can't spend on AI forever. They're also going to have to do some belt tightening in 2027. Greg, the last 30 seconds goes to you. Yeah, go ahead. Yeah, yeah. So I'm pretty, you know, optimistic, I think, about the rest of the year, especially given that we seem to have the job creation machine kicking in again. Now, I'd say the big asterisk in that picture, though, is the situation in Iran and with oil. And ever since this war began back at the end of February, the assumption about by economists and most experts is that it would be brief and then oil would fall back from 100 a barrel to like 80, 70 or 60. And that's not happened. People have gotten more negative about that. And so that's what makes me a little bit nervous is that the longer we go without a real resolution to this problem, the bigger the burden on consumers and the harder it will be for the economy to grow at a decent rate. Indeed. Greg Hipp at the Wall Street Journal. Heather Long, she's chief economist at Navy Federal. Thanks, you two. Thanks. Bye, Kai. Have a nice weekend. Wall Street today, two words, gang, two little words. Word one is record. Word two is highs. Here are 10 more words. If you're counting, we will have the details when we do the numbers. Heather and Greg and I went over the jobs report, but there is always more to say about it. So we are going to and we are going to do it with an eye toward a eye, because despite its bubbliciousness, the tech sector keeps on losing jobs, even as it drives stocks to record highs. The Bureau of Labor Statistics says employment in information, that's their word, information jobs, which is a pretty good proxy for the tech sector, that is down 11 percent from its peak back in 2022. And there has been a pretty steady drumbeat of layoff announcements, often explicitly tied to AI. Marketplace's Megan McCarty Carino makes sense of it all for us. This week, Cloudflare, Coinbase and PayPal announced job cuts after mass layoffs at Meta, Microsoft, Oracle and Amazon earlier this year. But the tea leaves of tech jobs are hard to read, says Guy Berger, senior fellow at the Burning Glass Institute. If you were going to talk about pandemic overhiring, this would be the epicenter. And I think that is confounding a lot of things that people are also trying to figure out. Like, is AI eating jobs and when's it coming for mine? But Berger says many of the companies culling jobs now could still be right-sizing from pandemic expansion. I don't think we fully know whether these layoffs, to what degree they are driven by AI versus AI being a boogeyman. Because AI is not a boogeyman to Wall Street investors, says Gregory Dacko, chief economist at EY Parthenon. Any type of layoff announcement is typically seen by markets as being a sign of weaker demand. But when you announce layoffs because of your greater efficiency, that is seen actually as a good sign. So companies have an incentive to attribute any downsizing to AI. Still, he says, automation is likely a factor. Artificial intelligence is very good at writing code. So there is certainly some replacement happening. But reports of the death of coding have been greatly exaggerated, according to Corey Staley. He's a senior economist at Indeed Hiring Lab, which has seen postings for software developers and other tech roles pick up in recent months, despite ongoing layoffs. So I think what we're seeing in IT and in tech right now really is a restructuring. These layoffs are about, you know, cutting over here so we can spend the money on AI over there. Though much of the hundreds of billions of dollars are going towards steel and silicon rather than staffing. I'm Megan McCarty Carino for Marketplace. President Trump's legal losing streak on his tariffs continues. Yesterday afternoon, the Court of International Trade struck down his workaround at raising import taxes following the Supreme Court's ruling that his tariff palooza of last April was illegal. No word yet on how those new tariffs might be repaid. But as you know, Customs and Border Protection has started processing refunds for those April 2025 tariffs. Kristen Schwab, in fact, has followed a couple of stories for us about how businesses are deciding to share refunds with consumers. since consumers, as we all know, are the ones who wind up footing the bill most of the time. But the question of who paid how much of a given tariff can get complicated along supply chains that run from importers to manufacturers to wholesalers and on then to retailers and consumers. So Marketplace's Justin Ho talked with business owners about whether they think they deserve a slice of those tariff refunds and whether they think they'll actually get one. Norman Wright Mechanical Equipment Corporation is an HVAC equipment supplier based near San Francisco. Richard Leo is the owner and CEO. What we do is we buy equipment from manufacturers and then we resell it to the installing contractors that will put them into buildings and so on. In other words, Leo's company is in the middle of that supply chain. That means the manufacturers and importers he works with passed on plenty of tariff charges. It also means that his company can't apply to the government for a tariff refund. There lies the problem, because it has to be the importer that has to apply for the credit. Leo could ask his suppliers for a refund, but that's kind of all he can do. I asked a major manufacturer a week ago that we do a lot of work with. I said, hey, are you guys going to be filing for any of these refunds? And they said, we made an executive decision, we met, and the answer is no, we're not going to file for it. Plenty of companies are deciding to go for the money We did file immediately on the first day of the filing That Peter Firth the CEO of FFF Associates It imports fig paste from Turkey and Spain and sells it to manufacturers that make fig bars Firth says if and when he gets his refunds, he's planning on giving all of the money back to his customers. To me, it's very clear I owe the money back to the customer. And by the way, I need to tell you, my customers believe it's very clear to them as well. They've already asked. When First Company passed along the cost of tariffs to the food manufacturers that are his customers, the contracts broke out the tariff charges as separate line items and clearly stated that the charges were based on the current tariff rate. And if it's based on the current tariff rate, if the tariff is struck down, then it seems obvious to us that it's owed back to them. But not every business spelled out tariff charges so clearly. Many simply raised prices and customers paid them. Rachel Brewster is a law professor at Duke. If you just agree to pay a price for a good, then, you know, it's not clear that you have any legal entitlement to get that tariff back. Brewster says in those cases, businesses are going to decide whether to share refunds with their customers based on their relationship. Who has the most bargaining power in the relationship? How long standing is the business? How many competitors are there out there? Businesses that do have a lot of competition might be more inclined to share tariff refunds. Lyman Munson is the president of SL Munson & Company, which imports metalworking tools from Europe. He says in most cases, he baked the cost of tariffs into his prices. So in terms of a refund, I don't think we have any responsibility to do that. But Munson knows his customers have plenty of other tool suppliers they can work with. So he's open to sharing the refunds. If they want to come back and look at this again, I certainly want to do it. It takes a long time to build a customer relationship. doesn't take long to disassemble it. But not every business has the leverage to ask for a tariff refund. Basically, we don't have any power in the situation. That's Spiro Papadopoulos. He runs Schlau Restaurant Group, which owns seven restaurants in several states. He says tariffs have raised the prices he's paid for tables, takeout containers and other supplies and equipment. But the supply chains for those kinds of goods are so long that if Papadopoulos were to ask his supplier for some of that tariff money back? They're probably just going to say, hey, we paid tariffs too. You know, like we're not getting it back either. Somebody else that we bought it from is getting it. Like, it's just a dead end. Papadopoulos says at the end of the day, tariffs are still pushing up his costs and pushing up the prices he charges his customers. I'm Justin Hough for Marketplace. Coming up. And I said to myself, if you don't try this out, you're going to kick yourself forever. No regrets. Am I right? First, though, let's do the numbers. Dow Industrial's up 12 points today. That's basically flat percentage-wise, 49,609. The Nasdaq added 440 points, 1.7%, 26,247. A new record. S&P 500 found 61 points, 8 tenths percent, 7398. Oh, look, another new record. For the five days gone by, the Dow picked up 2 tenths percent. The Nasdaq rose 4.5%. S&P 500 added 2.3%. Glassmaker Corning plans to expand its U.S. production capacity by a factor of 10. To make enough fiber optic material to keep the AI industry happy, NVIDIA is going to help pay for that. Corning lit up 2.5% on the day. NVIDIA accumulated 1.75% of 1%. Bonds, you ask? I'm so glad you did. Prices up, yields down 4.36% on the 10-year. You're listening to Marketplace. If you're trying to grow your business, Intuit QuickBooks Payroll is an essential tool that completely integrates payroll, time tracking, HR, and your financials into one powerful platform. And now they're evolving into QuickBooks Workforce to help you lead your business with confidence and clarity. QuickBooks Workforce combines human intelligence and AI-powered tools, so you get smart automation without ever losing control. Spend less time reconciling and more time deciding what to do next. And as your needs evolve, QuickBooks Workforce evolves with you, bringing together the core HR capabilities businesses expect with the flexibility to adapt your specific needs. Your processes get streamlined, and you get precious time and energy back to move forward proactively. Move from reactive to proactive with brand new tools by making the switch to QuickBooks Workforce today. Learn more at QuickBooks.com slash workforce. That's QuickBooks.com slash workforce. This is Marketplace. I'm Kyle Rizdahl. Spirit Airlines has been gone all of, what, six days now? So these are still very early days. But there are very real economic consequences when airlines shut down, most particularly around hub airports, which for spirit was Fort Lauderdale, Hollywood International down in South Florida. And I'll tell you what, Cleveland, Ohio, can relate. A big merger took it out of the hub game back in 2010. So Marketplace's Kelly Wells asked some of her Cleveland area neighbors what might be in South Florida's future. Michael Goldberg remembers life back when Cleveland was a hub for continental airlines. He's a professor in the School of Management at Case Western Reserve University. It feels like you're kind of on the map as a significant metro area when you have sports teams and when you're an airline hub. But then in 2010, after the Cleveland Browns placed last in their division again, Continental merged with United Airlines. That meant United now had hubs in D.C. and Chicago and Newark and Cleveland. It didn't really need all of those. So four years later, Cleveland got axed. The number of direct flights into our airport started decreasing, and that led to a whole bunch of challenges. The airport lost dozens of nonstop flights. It shut down its fourth and shiniest and newest concourse. Twelve years later, it's still empty. and Clevelanders still talk about how air travel was better back before United bailed. There's a certain ding to your civic pride that I think carries with us. The Fort Lauderdale area could be facing a similar fate Dan Lindblad runs the Greater Fort Lauderdale Chamber of Commerce I very concerned anytime we lose a homegrown company and they go under and they're the size of Spirit, it'll take the wind out of your sails. The airline employed 4,000 people in the area. It's too early to say what'll happen to the number of flights or direct connections long term. And at least for now... The rest of the airlines are picking up flights. JetBlue's picking up routes. Southwest is picking up routes. A similar thing happened to Cleveland, which led to one shiny silver lining. Fares went down considerably. Beiju Shah leads the Greater Cleveland Partnership, the Regional Chamber of Commerce. The market became much more competitive to serve because more airlines were serving it, and the average fares went down dramatically because of the competition. Now, Cleveland's story and Fort Lauderdale's aren't apples to apples. For one thing... United was the high-cost carrier, not the low-cost carrier. And so when they liberated Gates, fares went down. Fares could go up in Fort Lauderdale. And for another, Fort Lauderdale Hollywood Airport has competition 30 miles away, the much larger Miami International. Cleveland doesn't have that kind of competition. But South Florida definitely beats Cleveland as a spring break or beach vacation destination. Passenger volume is significant. It's a business and a leisure destination, maybe heavier on the leisure side of it. I think they're going to be fine. In the end, Cleveland's airport is serving more passengers now than it did before the merger, even though it has fewer non-stops. Frontier recently added flights, and United didn't disappear. it still flies to the airport more than any other airline. I'm Kaylee Wells for Marketplace. It's more likely than not that I'm late to this. Very late, honestly. But it seems Mahjong is having a moment. People are playing with friends and family at home. Yes, of course, but also when they're out and about. Here's today's installment of our series, My Economy. My name is David Bresnik. I run Sparrows Nest Studio, and we are a Mahjong parlor in Midtown Manhattan at 35 West 35th. Mahjong is a classic card game, primarily played with tiles, and it's a hand-building game where four players are in a race to get their hand into the right shape. First one to the right shape is the winner. sparrows nest had been a dream of mine for a long time i've been involved in the mahjong community since around 2006 2010 like multiple phases of my kind of growth in that community and one of the things that i'd always felt is that it would be so great if there was a home for mahjong a place to do it i was very fortunate uh several years ago i had a little bit of a windfall and covid frankly depressed office space prices immensely in Manhattan. And I said to myself, if you don't try this out, you're going to kick yourself forever. So I actually work full time at a startup. And this is something that I've kind of taken on as my second life. It's been my second life for a very long time. My days are I start work, I do work, I finish work, I go to Sparrows Nest, I start that work, I do that work, We close at 10 p.m. It's a lot. We actually just raised our prices a little bit because we moved into a new space, because expenses have gone up, and because, frankly, our original prices were quite the bargain. But hourly right now, it is $8 per person per hour, and that translates into $32 for a table per hour. Honestly, if we had stayed in our old space, we would have been sustainable. We would have definitely been on track to even make a profit as a business for this year. Moving to the larger space has opened a lot of doors. It's gotten a lot of people in. It's done a lot of stuff for us, but it's also a lot more rent. So now we're moving back towards sustainability. And again, I consider myself very fortunate to be able to just shovel money into this like crazy to get it to work maybe faster than it otherwise would. Remembering, you know, years ago, how many times my staff members and personal friends would come back being like, well, I went to Sparrow's Nest, but we closed two hours early because literally no one was there. And that was like the first months, you know, and now we have this just full room of people, you know, it's loud, they're all talking, they're all having good time, people are laughing, I'm gritting my teeth because someone slammed the tile. But like, it's, you know, it's that moment of like, it's actually happening. And it's just such an immense feeling of like gratitude and relief a little bit. And just like, here we are. David Bresnik, Sparrows Nest Studio, New York, New York, if you're looking to get in on a game. Whether it's Mahjong or something else, let us know what keeps you going. Would you? Marketplace.org slash mycon. This final note on the way out today in which I split hairs in an annoying but hopefully informative way. The unemployment rate, as we were talking about up at the top of the program, held steady at 4.3% in April. Or did it take out a couple of more decimal points, decimal places rather, you'll see that in March 30th was 4.256%, rounded obviously to 4.3%. April, 4.337%, rounded down to 4.3%. I told you it was annoying, didn't I? Our theme music was composed by V.J. Liederman. Marketplace's executive producer is Nancy Fargali. Joanne Griffith is the chief content officer. Neil Scarborough is vice president and general manager. I'm Kai Rizdahl. Have a great weekend, everybody. We will see you back here on Monday, all right? This is APN. There's so much happening in the world. And if you have particularly, shall we say, inquisitive kids, it can be hard to answer their questions. Hi, I'm Ryan. And I'm Bridget. And we host Million Bazillion, a podcast from Marketplace about money for kids and their families. We help your little ones think big about important but tricky topics like taxes, gas prices, and even what a cashless society might be like. There's a bunch of new episodes out now, so go listen to Million Bazillion on your favorite podcast app.
