Retiree benefits bump, credit repayment slump, and a dating app in the dumps

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0:06This is the Indicator from Planet Money. I'm Waylon Wong. I'm Ricky Mulvey. And I'm Adrian Ma. If the triumvirate is all here, that can only mean one thing. It is Indicators of the Week. It's the day of the week when we talk about our favorite numbers from the news. And on today's episode, we're talking about retirees getting a bump in benefits. Credit card debt that's gotten more delinquent. and the dating app Bumble's major reversal and concurrent decline.

0:37Vito Emanuel:This message comes from Charles Schwab with their original podcast, Choiceology. Choiceology is a show about the psychology and economics behind people's decisions. Download the latest episode and subscribe at schwab.com slash podcast. This message comes from Dell Technologies. Interruptions happen at work. But with the Dell Pro laptop powered by Intel Core Ultra with vPro, built with optimized battery and built-in intelligence, your tech won't slow you down. Dell.com slash Dell-Pro. Built for you. Support for this podcast and the following message come from Vanguard. Every day, shareholders meet to discuss important matters about the companies you invest in.

1:19Vito Emanuel:Now you can make your voice heard too. Vanguard Investor Choice makes it easy to set your proxy voting preference for your eligible Vanguard index funds. Visit Vanguard.com slash Investor Choice to learn more. Vanguard investors own shares of their index funds, and those funds own shares of the companies they invest in. Vanguard Marketing Corporation Distributor. Whelan Wong. Hello. Why don't you start us off? OK, my indicator has to do with the July inflation data we got this week from the Bureau of Labor Statistics. Now, we usually talk about the main number. That is an index called CPI-U. But for my indicator, I'm going to talk about a different measure of inflation called the CPI-W.

2:04Got a lot of letters here, Waylon. I feel like I feel like I need some clarification on the U. Yeah, so U stands for All Urban Consumers. And this is a sticking point for some people in rural areas, of course. Now, CPI-W is even more narrow. The W stands for Urban Wage Earners and Clerical Workers. And it was up 3.4 % in July. That's my indicator, 3.4%. That's interesting because I actually haven't heard of CPI-W. What made you want to focus on this one? Well, the Social Security Administration uses CPIW to calculate its yearly cost of living adjustment. This is a bump in benefits for people who collect Social Security or supplemental security income.

2:47The AARP says that for a lot of retirees, this cost of living adjustment is their only source of inflation protected income. So this week, when we got July inflation numbers, people who track Social Security released their estimates of what the adjustment might be. We're going to find out the final number in October. And so it went up the CPIW specifically. That's up 3.4 percent in July. So those getting Social Security, they're looking at what, a 3 percent-ish increase? Something like that. The AARP is projecting a 3.5 percent adjustment for 2027 based on current inflation trends. That would be an extra 73 bucks a month for the average retired worker.

3:28Then there's another group, the Senior Citizens League. That's projecting a 3.6 percent increase, which, if that holds, will actually be the biggest increase in four years. So why is the government using CPIW to calculate this? Yeah, so now it's time for a little history trivia. Congress enacted this cost of living adjustment for Social Security benefits back in 1973. And at that time, CPIW was the only inflation index the government measured. Now it tracks a bunch of different indices, including the CPI-U, which is like the main number. But the Social Security Administration is still using CPI-W.

4:07And the BLS says the index represents about 30 percent of the total U.S. population. So we got to hold on tight for the release in October. October. Then we'll know what the real number is. Thanks, Waylon Wong. Adrian, what's your indicator? My indicator is 12.8%. That is the percentage of credit card debt considered seriously delinquent, according to a new report out this week by the New York Fed. So seriously delinquent means that this debt is at least 90 days past due. And we haven't actually seen this amount of seriously delinquent debt since around the time of the Great Recession. So that's a spooky number for lenders and also shows that borrowers are not in a great spot.

4:46Well, the number might sound scarier than it actually is. I mean, it kind of depends on how you look at it. So researchers at the New York Fed, they say the frequency with which people are falling into serious delinquency actually hasn't really increased in the past couple of years. It's been pretty stable. But a lot of people coming out of the pandemic, they have these debts that they fell behind on and they just haven't paid them off. OK, so there's new debt on top of old debt that wasn't paid off. That's right. Kind of like a pandemic hangover, if you will. But on top of that, credit card companies have also been more persistent in reporting these debts to credit bureaus and chasing down those debts.

5:27And as a result, the amount of delinquent debt that we see just keeps stacking up. OK, so maybe things aren't getting worse. It's just that things that were already kind of bad are still bad. I don't know. I feel like I'm telling my brain that I'm depressed. I think that's a fair way to look at it. I mean, people are still struggling with persistent inflation. Wages are not keeping up with that. And also in this latest report from the New York Fed, they also mentioned that the delinquency rate for homes and auto loans, they've actually increased. Well, I guess something else to keep an eye on, the health of the consumer.

6:05Thank you, Adrian. Ricky, what is your indicator? My number is 16%. That's the 12-month decline in paying users for the dating app Bumble. And now Bumble hopes that innovation will lead to a turnaround. That's what every company says. What kind of innovation are we talking about? Sort of breaking a promise, right? Bumble's original rule was that women made the first move on the app. But now anybody can make the first move after a match. But that was like their entire proposition to the public when they launched, right? That like, this is safe for women because women always get to make the first move.

6:41They're just completely pivoting away from that now. Yeah, I mean, when the business starts to decline, you got to make some changes. And I feel like we're seeing more companies changing their original promises, right? Like Southwest charges for bags now. Alamo Draft House Cinemas, they used to have this no phone use rule during the movies. And now the chains introduced mobile ordering. And now we have Bumble, which is letting the guys make the first move to. I mean, it sounds like a sound business strategy as long as like nobody remembers what they used to do. that that's one way to go with that men in black flashy thing and uh-huh uh-huh you're like look right here it sounds like now men will be able to make the first move on bumble while at the alamo draft house during a movie during a movie while they're ordering nachos there you go um and investors have taken the stocks of bumble along with tinder's parent company to the woodshed over the past couple of years.

7:36Bumble's down about 95%. Match group down. Yeah, 95%. Match group down 70 % over the past five years. Although I'll say, interestingly, Grindr, the dating app for gay men, up 50 % since the stock went public in 2021. So they're doing something right. That is interesting. Why do you think that is? I don't know. I tried all three apps, but then my wife got upset. Okay, days of our lives, Ricky. Okay, so your field research was interrupted. It's for journalism. I do explain that I was podcasting. I think Grindr having a focused offering is working for them. The fundamental economic problem is how do you convince someone to pay for a dating app?

8:15Like, you have to make these products good enough to use, but still leave your audience wanting more. And if the product works well, then you don't need it anymore. Half of Gen Z daters told a Forbes survey a couple of years ago that they were always or often burned out by the apps. Now we get a little CEO speak. Bumble CEO Whitney Wolf Heard told Axios that the plan is, quote, instead of paying for less of a bad thing, let's actually find interesting modalities to allow you to opt into more premium offerings to get more of a good thing. So that's one strategy. What? I think that's also the response among a lot of people.

8:55Like a translator to translate that CEO speak. Imagine if you went on a first date with someone and they talked like that. They're like, you know, so what are you into? I'm into interesting modalities that allow me to opt into more premium offerings. I'd be like, check, please. Now, both Bumble and Match Group have one similar strategy. They're introducing more in-person meetups. So Bumble is launching an app where daters can meet people over small group drinks and dinners at local spots. Bumble calls it plans. And Match Group CEO Spencer Raskoff said on the latest earnings call that the company is doubling down on more social, lower pressure ways for users to connect in real life.

9:38Think dedicated events in big cities like a dog lover's happy hour. It's like no one has the muscle memory for it. So we now have to rely on apps to help us just go find other people who like dogs. Like you can't just like go to the dog park. Dog park would be one option, but that doesn't sound as monetizable. And we need to find an intersection of modalities that allow us to grow our user base and enhance in-person connection. This episode was produced by Angel Carreras with engineering by Anli Huang. It was fact-checked by Cooper Cats McKim and Vito Emanuel. Kiki Cannon is our show's editor, and The Indicator is a production of NPR.

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