The job market keeps flashing warning signs

0:28This is the story of the one. What the job market is telling us without the usual data sources. From American Public Media, this is Marketplace.

0:48In Denver, I'm Amy Scott, in for Kai Rizdahl. It's Wednesday, November 5th. Good to have you with us. This should be a big week for jobs data, with reports on job openings and turnover, the unemployment rate, and wage growth. But of course, we aren't getting any of that because of the government shutdown, which is now officially the longest on record. So instead, we're continuing to follow what's happening in the labor market with the help of private data. Today, payroll processing firm ADP put out its monthly employment report. It shows private companies added jobs in October for the first time since July, about 42 ,000 of them, while the job search and hiring platform Indeed says job postings were down at the end of October to their lowest level in nearly five years.

1:42Marketplace's Samantha Fields has more on what we can read into all of this. You never want to read too much into one month of data or one data source on the labor market or anything, really. But Elizabeth Pancotti at the Groundwork Collaborative says you can get a decent sense of what's happening by looking at a bunch of different data points from different companies. Taking all of that together, I see a very stalled labor market, but we are not seeing massive red flashing signs on the labor market yet. Hiring continues to be slow, as it has been for months. But despite all the high-profile layoff announcements in the last couple of weeks...

2:17I am not, I would say at this point, seeing a huge trend upward in those layoffs. I know the headlines feel like they are mounting, but in the data, this is still what we consider to be within the typical bounds. There are warning signs in the latest reports from ADP, though, Pancati says, for small businesses in particular. We see large contractions among those small companies where we've lost 88 ,000 jobs since July, where large companies have added 151 ,000. That, to me, is the most concerning thing coming out of ADP. Another concerning thing about this labor market is how hard it is to get a job if you don't already have one, says Allison Srivastov at the Indeed Hiring Lab.

2:59And that's impacting people who have lost their job, and it's impacting people who are trying to enter the labor market for the first time. It's definitely a precarious situation we're in. And Daniel Jow at Glassdoor says surveys show people are anxious these days, even those who have jobs. employees feel very sour about the current job market with good reason in a strong economy the labor market might add a couple hundred thousand jobs a month and lately we're talking about only tens of thousands of jobs being added and really i think that the sluggish hiring we're seeing is the most important statistics for understanding the current malaise that the job market is despite Despite all that malaise, Guy Berger at the Burning Glass Institute says the market's not terrible, but pressures are growing.

3:46The government shutdown is piling on top of all tariffs and everything else. And the question is, at some point, do these things break? At some point, does the very slow, gradual slide turn out to be a precipitous fall? And does the mediocre job growth we're seeing now turn into job losses? I'm Samantha Fields for Marketplace. On Wall Street, little sign of malaise today. Today, we'll have the details when we do the numbers.

4:30If you listened to yesterday's show, you know the Supreme Court heard a case today on whether or not the president has the power to impose tariffs under the International Emergency Economic Powers Act. At stake are billions of dollars in tariffs that the president has imposed on pretty much all of our trading partners since April. And after nearly three hours of arguments, the court appeared to be skeptical of the president's authority here. But stay tuned for the final ruling in the weeks or months ahead. Legal questions about the president's tariff power aside for the moment. Did you ever wonder how the tariff rates themselves are set?

5:11We did. So we gave Ernie Tedeschi a call. He previously served in the Treasury Department and on the White House Council of Economic Advisors in the Biden administration. He's now a fellow at the Budget Lab at Yale. So before 2025, tariffs were usually very narrowly set. With a specific purpose in mind, we can actually go back to the first Trump administration back in 2018. So the Trump administration had a policy goal of incentivizing more production of washing machines domestically. And so they set a tariff rate on imported washing machines. There was some consideration given to the trade balance of the United States with regard to washing machines specifically.

6:01I'm sure there was also consideration given to diplomatically or economically how other countries would react. Those considerations may have led to a different rate than, say, a first pass economic analysis.

6:17The tariff goal now is really much more weighted toward broad tariffs on all imports from specific countries because they have a goal of eliminating trade deficits. A lot of the country analysis is similar to what I described. There are also all of these other non-economic layers. You can look at Brazil, for example. We have the administration has imposed a very high tariff rate on Brazil, largely not out of economic considerations. It's out of political consideration. I'm a public finance economist. A lot of what I monitor are changes in taxes and changes in spending policy, which tend to be very slow moving.

7:04With tariffs, it's completely different. There's a lot of uncertainty about where tariffs are going. You can wake up one morning and suddenly there's a whole line of tweets with brand new tariff rates and not a lot of specificity, right? Like a lot of times we're reacting to vibes around tariffs. And it happens frequently. When we at the Budget Lab decided to follow tariff policy, I mean, we knew that would be a challenge. But I think that just the sheer quantity of updates that we've had to do as new policy has come down has exceeded our expectations.

7:44That was Ernie Tedeschi at the Budget Lab at Yale. You can hear more on tomorrow's Marketplace Morning Report. And by the way, Kai answered a bunch of listener questions about tariffs, like what happens if the Supreme Court rules against the president. Check out the video on our Instagram at MarketplaceAPM.

8:31Beef has been in the news a lot lately, with prices up 14 % in the past year, based on the latest Consumer Price Index, and with President Trump ticking off U.S. cattle ranchers with a plan to import more beef from Argentina. But there's another cost of our country's meat-heavy diet we don't talk about as much for the planet. I met up recently with journalist Michael Grunwald here in Denver at an upscale grocery store. So, yeah, what do you see when you look at this case? So, I mean, I see filet mignon. I see New York strip. I see boneless ribeye, T-bone steak. My mouth is watering because beef is freaking delicious.

9:17But the other thing I see is what's eating the earth, right? We're standing in front of the meat counter looking at a selection of cuts from a network of sustainable ranches. A lot of us have been told that if we're going to eat meat at all, this is a better choice for the animals and the environment. Grass-fed, humanely raised. But Michael says for the climate, not so much. First of all, it takes them longer to get to slaughter weight. So the animals are alive longer to burp and fart methane. But the main reason is because it's less efficient. It requires more acres to make the same amount of meat.

9:59That's one of the points Michael makes in his new book, We Are Eating the Earth. He spent five years researching the climate impacts of our food and agriculture systems. What got you interested in meat and food as a contributor to climate change? It's funny. I've been writing about climate and the environment for really 20 years. And the short answer is the food system is about a third of the climate problem. It's an even larger part of our other environmental problems. You know, agriculture uses 70 % of our freshwater. It's the leading driver of deforestation, wetland destruction, water pollution.

10:44And I realized I didn't know squat about it. What Michael means by eating the earth is that by gobbling up more land to produce food, we're unleashing more carbon dioxide into the atmosphere, while also destroying the ecosystems that can absorb it. And beef is the biggest offender. Michael says in the U.S., we get about 3 % of our calories from beef, but it uses about half of our agricultural land. It's just this very simple notion that basically the animals that we eat are using an awful lot of the earth. And it's one of those things that once you see it, you can't unsee it, right? If you ever take a cross-country flight and you see all those squares and circles out the window, I mean, you can tell that there's a lot of agriculture out there.

11:38But there is a lot of agriculture out there, right? It's now two of every five acres on Earth. There's just not going to be room for the forests and wetlands that store so much of the carbon that's stabilizing the planet. Even if we stopped using fossil fuels tomorrow, just through deforestation from the expansion of agriculture, we're on track to blow through all of our climate targets by 2050. So in many ways, the energy problem, it's a really big problem, but we kind of know what to do about it, right? We just need to electrify the global economy and run it on clean electricity, right? Simple, right?

12:21We have the tools. Right, exactly. I mean, we do know what to do, and we're actually starting to do it. We're in the middle of this incredible clean energy revolution that when I started writing about energy and climate 20 years ago, there really were no alternatives to fossil fuels. But that's where we are now with food and climate. And certainly, I write about dozens of promising solutions in my book, but none of them really have a lot of traction yet. And so the problem is still getting worse every day. Yeah, and I think what's uncomfortable about the book for people like me is that we've been taught that small family farms, organic farming, regenerative agriculture, pasture raised, grass fed, all those are good things.

13:07And here you are telling me that they're not, or at least they're not as good as we thought they were. The fact is that the real environmental disaster of agriculture was the initial transformation of nature into those nice rustic farms. That's when we lost the carbon. That's when we lost the biodiversity. And today, you know, this movement that is very powerful, that's pushing for essentially, you know, low yield agriculture across the world to replace industrial agriculture. if you're using you know if you're making less food per acre you're going to need more acres to make food and you're going to have more deforestation more drainage of wetlands and and more carbon emissions and i do think that's you know that's sort of an inconvenient truth for everybody who's sort of valorized and romanticized these kind of nice you know twee organic, you know, sort of closer to nature farms.

14:09And look, there is an environmental cost to the intensification of those sort of low yield systems into these, you know, chemical drenched monoculture crops and the factory farms. And look, you know, they treat people badly. They treat animals badly. They use too many antibiotics. They're lobbying against environmental regulation and climate action. But one thing about them is that they do make a lot of food. And we are going to need more food with less land. To make more food with less land, one solution Michael turns to in his book is the industrial feedlot, the place where they fatten up the cattle before sending them off for slaughter.

14:56We visited one in the latest season of our climate podcast, How We Survive. Check it out wherever you listen to podcasts.

15:26Coming up. I mean, if you're an airline and you want to be able to make more money, an easy way to do that is to fly more passengers. More passengers means less space. But first, let's do the numbers. The Dow Jones Industrial Average rose 225 points, half a percent to close at 47 ,311. The Nasdaq picked up 151 points, two-thirds percent to close at 23 ,499. and the S &P 500 found 24 points, just shy of 0.4%, and it's 67.96. Speaking of beef, McDonald's reported that same store sales in the U.S. grew more than analysts had been expecting in the last quarter. This despite the fact that traffic to fast food restaurants is down this year.

16:11Sales grew even faster at overseas locations. On the earnings call, Mickey D's CEO attributed that to new chicken products. on the menus in Australia and the UK and promised to, quote, go after the broader chicken opportunity, whatever that means. The Golden Arches heated up just under 2 and 2 tenths percent. You're listening to Marketplace. This is the story of the one. As a custodial supervisor at a high school, he knows that during cold and flu season, germs spread fast. It's why he partners with Grainger to stay fully stocked on the products and supplies he needs, from tissues to disinfectants to floor scrubbers, all so that he can help students, staff, and teachers stay healthy and focused.

16:54Call 1-800-GRAINGER, click grainger.com, or just stop by. Grainger, for the ones who get it done. This is Marketplace. I'm Amy Scott. We got some more data this week that lends support to the idea that the economy is going in opposite directions at the same time, depending on where you sit in it. Today's K-shape indicator is brought to you by the housing sector, where first-time homebuyers are having a rougher go than those who've owned before. A new report from the National Association of Realtors finds that only one in five homebuyers last year were first-timers, a record low, while the average age of those first-time buyers is now 40, a record high.

17:40Daniel Ackerman has more. These days, more and more of Susan Chaffee's homebuyers are familiar faces. I'm actually seeing repeat customers either upgrading or getting something smaller. Chaffee is a realtor near Tampa, Florida, and she says those repeat customers have a big advantage. They have a lot of equity in their house. Which they can cash out and put towards their next house. Chaffee says would-be first-time buyers don't have that luxury. A lot of them are either renting or moving back with their parents. And moving back home is a nationwide trend, says Jessica Louts of the National Association of Realtors.

18:18The share of first-time homebuyers has essentially been cut in half from the historical norm. She says that's partly because of factors within the housing market, like a lack of affordable inventory and elevated mortgage rates. But there's also everything else. Like high rent, student loan debt, child care costs, they all add up and it makes it hard to save. She says a 10-year delay on home ownership has real financial impact. It translates into about$150 ,000 of lost housing wealth gains. Lout says she has seen some people getting creative in how they buy their first home. We have seen in the last couple of years the idea of purchasing with a roommate become more popular, even purchasing as a multi-generational family so you can have cost savings pooling those funds together.

19:04Other would-be buyers are simply waiting for mortgage rates to drop, says Tiffany Russell, a realtor in Austin, Texas. But this will catch them, you know, in the end, because when they get back into that buyer pool, when the rates go down, then they're going to have a lot more competition with the other first-time buyers. She says it's basically a choice between higher rates today or potentially higher housing prices down the line. Susan Wachter, a professor of real estate and finance at the University of Pennsylvania, says there are two ways out of this mess. If mortgage rates came down significantly into the 5 % range, that would be a big help.

19:44In addition, we simply have to increase the supply of housing. Particularly, she says, of entry-level housing for people who aren't already sitting on a pile of equity. I'm Daniel Ackerman for Marketplace.

20:10As you've no doubt heard, Southwest Airlines is doing away with its popular open seating policy. Frequent Southwest flyers have a lot of feelings about that. Maybe less well-known is that when the change goes into effect on January 27th, another perk is going away, one that made it easier and more affordable for people with larger bodies to fly. Marketplace's Savannah Peters has that story. Most of us don't book an economy-class plane ticket expecting a comfortable journey. But that's especially true for people in bigger bodies, like Sydney Henry Ueno. I'm not just fat. I'm fat and tall. I'm six feet tall.

20:54Trying to cram this body into a little bitty seat is more than an ocean. And Henry Ueno really loves to travel. She flies about five times a year. She says rather than squeeze into a seat that doesn't accommodate her. I have to purchase business class or higher, which means a much more expensive seat. Or she can book two neighboring economy seats. another pricey option that Henry Ueno says doesn't stop other passengers from bothering her. People will give you a look, a side eye, or make comments that they think are under their breath, but loud enough for me to hear. Things like, you know, if you dieted, you wouldn't have to get an extra seat.

21:40Just making a lot of assumptions, y 'all, about what a person's body is all about. Henry Ueno is willing to shell out for her comfort and safety. She doesn't want that rudeness to escalate into hostility. But there's one airline that gives her a break on the cost of extra space. Yeah, in fact, whenever we fly domestically, it's primarily Southwest because of that customer of size policy. Right now, Southwest has a customer of size policy. Anyone who doesn't fit into one seat can book a second and get refunded after their trip. That made Southwest for many years the best plus-size passenger policy in the world.

22:26And Tigress Osborne, with the National Association for the Advancement of Fat Acceptance, says it made Southwest the airline of choice for people in larger bodies. For some of those customers, Osborne says its policy put air travel within financial reach for the first time. And that is really life-changing. So having that go away is really scary for a lot of people. Starting in January, Southwest customers will only get a refund for their second seat if their flight isn't fully booked. And about 80 % of Southwest flights are typically full. If Southwest is no longer loyal to customers of size, then that opens us up to flying with whoever's most affordable and most convenient at the time.

23:14Osborne hopes another airline will see an opportunity here to snap up this loyal customer base with its own inclusive policy. But Ganesh Sitaraman, a law professor at Vanderbilt, doesn't see that happening. Well, it comes down to revenue. I mean, if you're an airline and you want to be able to make more money, an easy way to do that is to fly more passengers. And shrink the amount of space each passenger is allotted, which Sitaraman says airlines have done over the last few decades, even as the average American has gotten larger. And he says courts and regulators have declined to make rules about passenger space.

23:51It really, to me, speaks to a bigger question of what kind of airline experience should we have and why is this something we can't do better with? Southwest declined an interview request from Marketplace, but noted its move to assign seating means it has to adjust its customer of size policy and that both changes put it in line with industry standards. For former Southwest loyalist Sidney Henry Ueno, that's exactly the problem. I hate using this word, but it's unfair. Just because my body is different from someone else's. And that's really what it comes down to. You're forcing us to spend more money.

24:34Moving forward, Henry Ueno says she'll just shop around for the cheapest airfare and probably go on fewer trips. I'm Savannah Peters for Marketplace.

24:52This final note on the way out today, a snapshot of household balance sheets, courtesy of the Federal Reserve Bank of New York. U.S. household debt rose to nearly$18.6 trillion in the third quarter of the year, driven by increases in mortgage, student loan, and credit card balances. The total amounts to roughly$54 ,000 for every member of the U.S. population. Delinquencies increase just slightly, with 4.5 % of outstanding debt in some stage of overdue, a rate the New York Fed called elevated but stabilizing. And if you were wondering, we're still getting Fed data amidst the government shutdown because the Federal Reserve System is only quasi-governmental and not subject to congressional appropriations.

25:41Our media production team includes Brian Allison, Drew Jostad, Gary O 'Keefe, and Charlton Thorpe. Jeff Peters is the manager of media production. And I'm Amy Scott. We'll be back tomorrow.

26:14This is APN.

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