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Episode: Rich foods

Author: Marketplace
Duration: 00:30:02

Episode Shownotes

Food prices aren’t going down. The good news is, they aren’t rising rapidly anymore, either. But we get it, grocery shopping still hurts. In this episode, why food isn’t likely to ever cost what it did five or 10 years ago, and how our habits are changing in response. Plus:

The fight against inflation isn’t over, rising child care costs take women out of the workforce and the supply chain preps for an import wave.

Full Transcript

00:00:02 Speaker_17
Well, let's see. Is inflation bumpy? Is it stuck? There's got to be a word. From American Public Media, this is Marketplace. In Los Angeles, I'm Kai Rizdal. It is Wednesday today, December the 11th. Good as always to have you along, everybody.

00:00:30 Speaker_17
Today's macroeconomic word of the day is stall in its verb form. To stop or cause to stop making progress. The subject at hand, of course, is inflation, which rose three-tenths percent last month. So said this morning's Consumer Price Index.

00:00:47 Speaker_17
Three-tenths percent is, as it happens, the biggest bump we've seen since spring. And year over year, Inflation is up three months in a row. So, how worried ought we be, if at all? Marketplace's Sabri Beneshour gets us going.

00:01:04 Speaker_07
Annual inflation back in September was 2.4 percent. Then in October, the number grew to 2.6 percent. Then in November, it grew again to 2.7 percent. So should we not be, I don't know, a little bit freaked out by that? I don't think so.

00:01:21 Speaker_07
Omer Sharif is president of research firm Inflation Insights. There's a lot of data that went into November's inflation number, and some of it was a little wackadoodle, maybe threw off the final number a little.

00:01:32 Speaker_08
Hotel rates today in the data in November went up. On an annualized basis, they went up 45 percent. That is a wild number. Similarly, on the negative side, if you wanted to rent a car or truck,

00:01:44 Speaker_08
On an annualized basis, those prices declined by 31 percent today.

00:01:48 Speaker_07
Sharif says if you kind of tune these extremes out, price inflation in November wasn't three-tenths percent. It was closer to two-tenths percent. So that's much more encouraging.

00:01:58 Speaker_07
One of the biggest pieces of the inflation pie is the cost of having a roof over your head. And that is starting to look OK. Eric Winograd is chief economist at Alliance Bernstein.

00:02:09 Speaker_15
What we've seen over the last few months is a significant moderation in shelter inflation.

00:02:14 Speaker_07
Rent and other shelter prices in November went up three tenths of a percent from the month before.

00:02:20 Speaker_15
Which is higher than you might like to see, but much lower than it has been. And it suggests that things are moving in the right direction.

00:02:27 Speaker_07
But a lot of people have issues with the rent data. It can lag by a year and a half, for example. So some economists like to take it out of the inflation equation just to see what happens. Jeffrey Roach is one of them.

00:02:37 Speaker_07
He's chief economist at LPL Financial.

00:02:39 Speaker_14
So I look at excluding housing consumer prices are roughly 1.6 percent up from a year ago, meaning it's a lot more reasonable and not really worthy of a freak out moment.

00:02:51 Speaker_07
Not a freak out moment, but also not totally sleeping easy either. It's definitely taking longer than people thought to get inflation down to a healthy level. In New York, I'm Sabri Benashour for Marketplace.

00:03:03 Speaker_17
I'll take not a freak out moment. Thank you. Wall Street today. Tech was the place to be. We will have the details when we do the numbers.

00:03:28 Speaker_17
it's both the truism and a principle of this program that economic headlines on say inflation might say things are mostly ok but if people are not feeling that mostly ok in their everyday then the headlines just don't matter.

00:03:44 Speaker_17
Inflation is slowing, bumpy, but slowing. But when you're grocery shopping, those food prices still sting a little bit. Prices for food at home, economists speak for groceries, were up half a percent month on month in November.

00:03:59 Speaker_17
Marketplace's Kimberly Adams reports now on what that means for what people are putting on the dinner table.

00:04:04 Speaker_19
It may be cold comfort, but says Ricky Volpe, who teaches agribusiness at Cal Poly San Luis Obispo,

00:04:12 Speaker_22
2024 is a year of significantly below average food price inflation, where food prices will probably end up about 1.2, 1.3 percent above where they were in 2023. So actually about half that historical norm.

00:04:25 Speaker_19
And he gets it. It doesn't feel like things are normal or affordable when you're shopping at the store.

00:04:32 Speaker_22
People are looking for food prices to come down. And I mean, I should just say that that's probably not going to happen.

00:04:38 Speaker_19
That's because at least some of the factors contributing to higher food prices are things like climate change, droughts that impact crop yields and meat prices. Beef prices were up more than 3 percent last month.

00:04:51 Speaker_19
And when it comes to poultry, says Nada Sanders, who teaches supply chain management at Northeastern University.

00:04:57 Speaker_00
But the avian flu is something that has impacted hens, chickens, and then, of course, eggs. And so we've seen those prices be really volatile.

00:05:07 Speaker_19
And consumers have been responding to the higher prices, adjusting their diets accordingly and definitely cutting back on going out. Tom Bailey is a senior analyst for Consumer Foods at Rabobank.

00:05:20 Speaker_01
we are seeing a lot less demand for going out to restaurants. Transactions at restaurants were down 6% in the third quarter of this year.

00:05:28 Speaker_19
And even chefs are taking notice. Jonathan Poirot is a professor and chef at Johnson and Wales University, teaching students to design meal plans and recipes. He says a lot of those now include less meat, including some of his own cooking.

00:05:44 Speaker_16
I was making some Mediterranean food the other night, and instead of using lamb or beef, I ended up just doing roasted chickpeas as the main protein source in the dish.

00:05:55 Speaker_19
Throw in a little sumac, lemon zest, and tahini, and he says it was delicious. In Washington, I'm Kimberly Adams for Marketplace.

00:06:14 Speaker_17
Waymo, the autonomous ride hailing company, opened up shop here in LA about a month ago.

00:06:19 Speaker_17
If you've never seen them, they are quite something, all white, electric SUVs, Jaguars, as it happens, covered with cameras and sensors pointing every different direction and a very empty, noticeably so, driver's seat.

00:06:33 Speaker_17
The company, a subsidiary of Alphabet, is betting billions of dollars that they are the future of automotive transportation. John Gravois and a team at Wired spent a day tailing a Waymo car to see what that future might look like.

00:06:46 Speaker_17
John, thanks for being here. Thank you very much. Well, of course, anything is better than sitting around the office or in your living room in front of your computer. Why did you guys decide to do this?

00:06:56 Speaker_06
Well, San Francisco has a history in car chase cinema, and we figured that the best way to make self-driving cars strange again for us was to go chase one.

00:07:12 Speaker_17
So we should say, we should say here, it's old hat to you guys in San Francisco, but unless you're in San Francisco, I guess, where's the other one? Phoenix? And I've seen some here in LA. It's a foreign thing for a whole lot of people.

00:07:22 Speaker_05
Exactly. That's what we wanted to, we wanted to restrange-ify it. All right. So talk methodology here. How'd you go about it?

00:07:29 Speaker_06
So we hired an Uber driver to drive a chase car with a bunch of us in it. and picked a Waymo by summoning it on the Waymo app and then tailed it.

00:07:43 Speaker_06
And the plan was to have the journalists, some of us, get out of the car and interview riders as they were let out, which we did, but it took a little while for the Waymo to pick up anybody.

00:07:56 Speaker_17
Yeah, I was gonna say, I mean, it's, you know, I don't wanna spoil it as much as you can spoil a magazine article, but it was a tad anticlimactic.

00:08:04 Speaker_06
Yeah, it was it was it was interesting in itself to go from one weird staging lot full of Empty self-driving cars to another for the first several hours of the day, but that's what we did What kinds of reactions did you get from people once you track them down what they say about their experience in this driverless car?

00:08:23 Speaker_06
You know that it was pretty It was pretty uniform and impressive how much people just love it. They just like

00:08:33 Speaker_06
The experience of the drive, I guess, is a little bit less herky-jerky than with a human driver, but I think a lot of it just comes down to people are just kind of relieved not to have to talk to somebody else as sad as that is.

00:08:47 Speaker_06
Especially it was sad for us because we were having a great conversation in our chase car.

00:08:52 Speaker_17
Tell me about Gabe, your Uber driver, and his thoughts on this whole thing, because that was super interesting.

00:08:58 Speaker_06
Yeah, yeah. So, Gabe, this is a guy whose labor is directly at stake. He's a guy whose labor is going to be replaced by a Waymo. He's a guy who's had 30 years of experience as a professional driver.

00:09:12 Speaker_06
First, as a taxi driver, he even organized a taxi driver's strike in the days before Uber. And his first, I think his prejudice with Waymo is having shared the road with them, you know, sort of sporadically.

00:09:26 Speaker_06
He thought of them as kind of dopey, rule-following, frustrating vehicles to share the road with. But over the course of the day, he started to recognize that the Waymo was driving a lot like a taxi driver.

00:09:39 Speaker_06
The Waymo was doing things that were aggressive, that are exactly the kinds of things that a taxi driver is trained to be aggressive with.

00:09:46 Speaker_06
And doing things that were cautious, that are exactly the kinds of things that taxi drivers are trained to be cautious with.

00:09:53 Speaker_17
Can we talk unit economics here, just as a matter of this is, of course, going to be a business. Waymo is, according to the math from a study you guys cite, they're not making a whole lot of money per vehicle, right?

00:10:06 Speaker_17
And eventually they're going to scale and it's going to work out, but for the moment, even though they've gotten $11 billion something dollars, they're not turning a whole lot of profit here.

00:10:15 Speaker_06
Yeah, that's a big question. And the math is, even that study is based on a lot of guesswork. It's really hard to say what the unit economics are.

00:10:27 Speaker_06
What we can say is that the ridership rates are going up so fast that that study is already well out of date. When we were doing our chase, I think the monthly ridership for Waymo was 100,000 rides a month.

00:10:44 Speaker_06
By October, it was already 150,000 rides a month. So the economics are just shifting under our feet a lot.

00:10:51 Speaker_05
Yeah. Are you among the Waymo rider faithful? Have you done it? What'd you think? I do not have an account of my own, but I've been on rides with other people.

00:11:01 Speaker_06
And? You know, it was that experience. You're a little nervy when you step in, and then very quickly it becomes normal.

00:11:12 Speaker_17
Yeah, yeah. John Gravois in Wired with a whole team of people following a Waymo around for a day. John, thanks a bunch.

00:11:18 Speaker_06
Thank you.

00:11:33 Speaker_21
Coming up... Well, some might think, you know, you should be enjoying retirement. Guess what? I am.

00:11:39 Speaker_17
If you love what you do, you will never work a day in your life, right? First, though, let's do the numbers. Dow Industrials off 99 points today, 2 tenths percent finished at 44,148. The Nasdaq surged 347, 1 and 8 tenths percent, 20,034.

00:11:51 Speaker_17
Nasdaq passing the 20,000 barrier for the first time. The S&P 500 added 49 points, 8 tenths percent, 6,048. So, 6084 rather, 6084.

00:12:08 Speaker_17
Among the categories where prices are rising, getting back to inflation, housing, food, furnishing, used and new vehicles, and healthcare.

00:12:15 Speaker_17
So, in no particular order, Mid-America apartment communities, one of the biggest owners of rental housing in the United States, down a tenth percent. General Mills, maker for everything from cereal to snacks, descended one percent.

00:12:25 Speaker_17
Wayfair, one of the biggest online furniture retailers, up four-tenths of one percent. Today you're listening to Marketplace.

00:12:37 Speaker_20
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00:12:51 Speaker_20
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00:13:03 Speaker_20
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00:13:11 Speaker_20
Visit public.com slash disclosures slash bond dash account for more info.

00:13:14 Speaker_18
This Marketplace podcast is supported by Gusto. Paydays are great, but running payroll, calculating taxes, deductions, compliance, that's not easy. Unless, of course, you have Gusto.

00:13:26 Speaker_18
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00:13:42 Speaker_18
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00:13:53 Speaker_17
This is Marketplace, I'm Kai Risdahl. All right, here's another data point from today's CPI. The cost of childcare last month went up 6 tenths of 1%. To be clear, that is not year over year, that is November alone.

00:14:08 Speaker_17
And that kind of increase has been happening for years. The average cost to enroll a child in licensed daycare in this country is more than $15,000 per child per year.

00:14:19 Speaker_17
And that's affecting parents exactly the way you'd think it's affecting parents, maybe more so. Stacey Vanick-Smith has that one.

00:14:26 Speaker_10
Amber Lord knew she wanted to keep working after she had her baby. She was in her late 30s and she had a career she loved in marketing.

00:14:34 Speaker_10
But when Lord and her husband started looking at daycares near their home in Virginia Beach, they ran into a problem.

00:14:40 Speaker_11
They were $25,000 a year. And that was for four days a week.

00:14:47 Speaker_10
And even on those four days, daycare didn't cover an eight hour workday. They would need supplemental care on top of that.

00:14:55 Speaker_11
We were like, OK, we can't this we can't make this make sense. Like I would just be working 100 percent of the time to have my child in child care 100 percent of the time.

00:15:04 Speaker_10
Lord's husband was the bigger earner, but her paycheck was vital. They needed her income to afford their mortgage.

00:15:11 Speaker_11
We might have lost our house. I mean, it was that bad.

00:15:14 Speaker_10
and Lorde wasn't going to be able to shift her position to part time. The stress got so bad, Lorde started to worry it was affecting her pregnancy. So I, I left.

00:15:26 Speaker_10
Lorde had just walked away from a job she loved and her family's money situation was now very shaky.

00:15:33 Speaker_11
I came home and I sat in a new house that we just bought and I'm just sitting here crying pregnant and just feeling like, There's no village. There is no village. Like I live in a country where they don't they don't care.

00:15:47 Speaker_10
The cost of preschool and daycare has risen by about 26 percent since 2019, according to the government's monthly inflation numbers. Lorde says it's created a crisis. When she posted about her dilemma on TikTok, thousands of women wrote to her.

00:16:03 Speaker_11
So many other mothers told me this. It makes more sense financially for them to stay home and take care of the baby and just live strapped on their husband's paycheck.

00:16:11 Speaker_10
Lorde also hears from women who have had to keep working but, because they couldn't afford the child care they wanted, were forced to leave their children in situations they did not always feel great about.

00:16:22 Speaker_10
Lorde says she hears these stories every day about how the rising cost of child care is forcing women to make really tough choices.

00:16:30 Speaker_13
You're asking young families to spend, you know, a college tuition to have their child taken care of. Lauren Bauer is an economist with the Brookings Institution.

00:16:43 Speaker_13
We give people 20 years to save up for college, and we give them no time to save up for child care.

00:16:48 Speaker_10
She says all of this is happening right after mothers had been entering the workforce in record numbers.

00:16:55 Speaker_13
This post-COVID environment was really good for women. We got this boost of additional child care funds, the boost of telework flexibility, the boost of a hot labor market. And we are seeing all of those things dissipate.

00:17:09 Speaker_10
The money has definitely dissipated. The Biden administration's $24 billion child care subsidy expired last year. At the same time, the cooling job market has companies scaling back flexible work.

00:17:23 Speaker_10
The result, the share of working mothers with children under five has dropped from nearly 71 percent last year to 68 percent.

00:17:32 Speaker_13
What that meant, that's hundreds of thousands of women dropping out of the labor force in the past 18 months.

00:17:38 Speaker_10
Nobel Prize winning economist Claudia Golden has spent her career studying women, work and the labor market. She says the biggest thing any country can do to support women working is to lower child care costs.

00:17:51 Speaker_09
Every country that has highly subsidized child care has pretty high levels of female labor force participation, Sweden being a good example.

00:18:06 Speaker_10
Also, Canada, France and Germany have all seen women's labor participation increase after government subsidies reduced child care costs. Back in Virginia Beach, a very pregnant and newly unemployed Amber Lord decided she would make her own job.

00:18:22 Speaker_10
She used her skills in social media and marketing to start a consulting business.

00:18:27 Speaker_11
I really went hard. So I pretty much replaced my previous income within the first year.

00:18:33 Speaker_10
That would be Lorde's two-year-old son, Henry, in the background. He's running around chatty. As much as Lorde has loved being home with Henry, she does wish she could have him in daycare part-time.

00:18:47 Speaker_11
Because we just spend every waking moment together face-to-face, which is great. It's very cool. I love him to pieces. He's the best thing that's ever happened to me. but just to give me some free time.

00:18:59 Speaker_10
To work, to get things done, or just to rest. In New York, I'm Stacey Banik-Smith for Marketplace.

00:19:24 Speaker_17
While one predicts the future at one's peril, it's entirely possible that the work of getting goods into and around this economy could get a lot more expensive and complicated in the new year for two reasons.

00:19:36 Speaker_17
First, on the 15th of January, a temporary agreement between dock workers and port operators on the East Coast expires. That was the deal, you'll remember, that the two sides made after that quick strike back in October.

00:19:49 Speaker_17
And reason number two is that five days after that, on January 20th, President-elect Donald Trump takes office bringing with him those promises of broad-based tariffs, which gets us to this.

00:20:00 Speaker_17
The National Retail Federation reported this week that imports have been rising and could remain high as companies try to get ahead of those disruptions.

00:20:08 Speaker_17
I know you thought, perhaps hoped, that supply chain stories were a thing of the past, but higher imports are going to stress all the links in the supply chain, shipping, trucking, even warehouse space. Marketplace's Henry App reports.

00:20:22 Speaker_03
One good result of the mess the pandemic made of the supply chain is that companies invested in more capacity. But it took a while, says Jason Miller at Michigan State University.

00:20:32 Speaker_02
To go from the idea of we would like to put a warehouse in this location to having a facility open that can now store goods, that is an extended process.

00:20:43 Speaker_03
Now that extra warehouse capacity ordered a few years ago is available, says Joe Dunlap at Legacy Investing.

00:20:50 Speaker_12
There's been a ample amount of warehousing space for the past 12 months or so.

00:20:55 Speaker_03
Which means all that stuff coming into the U.S. right now has a place to get stored. And a lot of it is coming to the West Coast, says Ian Britton. He manages industrial real estate for CBRE in Southern California.

00:21:08 Speaker_04
the companies that we've interviewed are taking in anywhere from 20 to 25 percent more finished goods and components in anticipation of tariffs.

00:21:17 Speaker_03
Britain says companies have also shifted west because of the strike threats in the east. Normally, he says, all those extra imports would translate to an uptick in companies leasing out that available warehouse space.

00:21:30 Speaker_04
But it hasn't just resulted in that direct correlation of leasing volume like we've typically seen in typical cycles.

00:21:36 Speaker_03
That ample warehouse space is now verging on a glut. One part of the supply chain that's a bit tight, says Jason Miller at Michigan State, are railroads in the West. They've been busy transporting those record volumes of freight from Western ports.

00:21:51 Speaker_02
And that type of prolonged strain does cause some kinks to emerge in the system.

00:21:57 Speaker_03
For now, he says, if the railroads get too tied up, there's plenty of capacity in the trucking sector too, which can take the pressure off. I'm Henry Abb for Marketplace.

00:22:21 Speaker_17
I know I ended the program yesterday with a report from Pew Research showing a majority of you are satisfied with your jobs. Counterpoint, a survey from Gallup that says 51% of American workers are watching for or actively seeking a new job.

00:22:39 Speaker_17
So maybe the grass is always greener, but making that leap into a new job or a career can be daunting and it can be daunting no matter how old you are. Here's today's installment of our series, My Economy.

00:22:53 Speaker_21
I am Dr. Michelle McKinney-Jones, and I am a faculty fellow in management at Belmont University in Nashville, Tennessee.

00:23:04 Speaker_21
So after 31 years in corporate America, and at the age of 55, I retired and made a career switch into higher education on July 1st.

00:23:23 Speaker_21
Being in one profession for 31 years gives you an appreciation for that profession, and it's also something that never leaves you, right? I often have my HR hat on when I'm sitting in faculty meetings.

00:23:39 Speaker_21
Maybe there's a comment that's said, and I'm like, ooh, I'm glad I'm not in HR right now to be able to address that.

00:23:46 Speaker_21
You know, maybe it's something that a student says if we're doing an exercise and how they're role-playing as an HR professional, and perhaps they say something that I'm able to advise them to say, hey, that would not be an appropriate comment.

00:24:00 Speaker_21
Let's talk about how we can either say that differently or do that differently to make sure that we get the desired outcome. So yeah, I'm always wearing my HR hat, but now I get to wear two.

00:24:22 Speaker_21
Certainly the salary as a faculty fellow does not compare to what I made in the corporate space. And so there's, you know, there's some adjustment there, but the decision that I made to go into higher ed, does it outweigh all of those other things?

00:24:37 Speaker_21
Absolutely. And so would I do anything different? Absolutely not. And while some might think, you know, you should be enjoying retirement. Guess what? I am. Every day, I'm doing something that I enjoy doing.

00:24:53 Speaker_21
And it is continually what fuels me each and every day. And when I see a look on the student's face, when a light bulb goes off on something that we're talking about and they finally get it, that's the most rewarding thing ever. It's the best.

00:25:10 Speaker_21
It is the absolute best.

00:25:16 Speaker_17
Dr. Michelle McKinney-Jones, she is a faculty fellow at Belmont University in Nashville, Tennessee. Here's a true story. I started as an intern in public radio when I was 34. Two careers behind me, so it can work out.

00:25:30 Speaker_17
Tell us what's going on with you, would you? You can do it at marketplace.org slash my economy. This final note on the way out today, after the idea was approved by team owners back in August, today the deal finally got done.

00:25:49 Speaker_17
The NFL's Buffalo Bills and the Miami Dolphins have each sold minority ownership stakes, 10% to be exact, to different private equity groups.

00:25:58 Speaker_17
Key points of the approval are that those stakes have to be held for at least six years, and one private equity group can hold interest in as many as six teams. There is a teensy tiny bit of What could possibly go wrong here?

00:26:10 Speaker_17
Rattling around in the back of my brain. Our media production team includes Brian Allison, Jake Cherry, Jessen Duhler, Drew Jostad, Gary O'Keefe, Charlton Thorpe, Juan Carlos Torado, and Becca Weinman. Jeff Peters is the manager of media production.

00:26:24 Speaker_17
And I'm Kyle Rizdahl. We will see you tomorrow, everybody. This is APM.