The nepo baby premium, frothing markets, and Apple vs. Apples

0:01NPR.

0:11This is The Indicator from Planet Money. I'm Waylon Wong. And I'm Darian Woods. And I'm Adrian Ma. All right. I have a treat for you guys and our listeners. Yesterday's episode featured the musician John Legend. And when I interviewed him for yesterday's episode, I asked him to compose a little song for us. Indicators of the week. It's the indicators of the week. I need a good rhyme. What does it do? Well, we talk about interesting numbers from the news, like GDP growth or inflation or, you know. Indicators of the week. It's the indicators of the week. Get your data on GDP from the indicators of the week.

0:55Oh, my gosh. I feel like I could literally die happy. Wow, that was fast. He just came up with it straight away. I think we found our fourth host guest. Indicator co-host. He was a management consultant as we learned this week. Yeah, did you know he used to be a management consultant at BCG? So like, perfect fit. So just to be clear, we don't have GDP data this week, but we do have numbers relating to inflation and how that's interacting with the stock market that rose a lot this week. We also have Nepo babies and a trademark lawsuit that pits apple to apples. That's coming up after the break.

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2:16Capella is an online university accredited by the Higher Learning Commission. That means you can earn your degree from wherever you are and be confident your education is relevant, recognized, and respected. A different future is closer than you think with Capella University. Learn more about earning a relevant degree at capella.edu. It is Indicators of the Week with John Legend and me, the rest of us. Darian, you're up first. So my indicator is relating to the Consumer Price Index. I'm sure you all saw that this came out this week. This is my indicator, 2.7%, the amount that prices rose in July from a year earlier.

2:57So inflation is staying a little higher than the Federal Reserve's 2 % target. Yes. And though we didn't have the perfect amount of inflation, it is lower than forecasters expected given the tariffs. And actually, a large part of the rise in prices was driven by the cost of services like rent and health care, not necessarily the tariffs that a lot of the economists have been predicting would be inflationary. Okay, so I feel like we've been having this debate about whether or not the tariffs are inflationary. So where does this data leave us on that debate? So some subsets of tariffed goods are rising in price, like household furnishings.

3:37I know you've been... I know that's painful for you, Ayla. Yes, yes. Tragically, yes. Others aren't rising very much, like clothing. Yeah, I know that a lot of companies are eating the tariffs for now, just given all the uncertainty with the on again, off again. Yeah, but that may not last forever. The general point, though, is that prices are stable-ish, at least enough to convince Wall Street that the Federal Reserve is going to lower interest rates in September. You've seen American stock markets rise this week. They hit record levels in response. All things being equal, shares are worth more when interest rates are lower.

4:16Right. So the expectation of lower interest rates is because the Fed has to balance a dual mandate of keeping unemployment low and inflation low. And now the markets are saying there's less of a risk of inflation spiraling out of control if the Fed lowers interest rates and encourages spending. And several people in the Fed committee that decides interest rates are raising concerns with how the labor market is looking. That's been sharpened given that weaker-than-expected jobs report we had two weeks ago, too. And this is an argument for keeping the jobs report coming out every month. Yes, that monthly jobs report is helping officials make big decisions at a decisive moment.

4:58Let's not beat around the bush. We're talking about E.J. and Tony, President Trump's nominee for the head of the Bureau of Labor Statistics. He at least suggested having the jobs report every three months until the BLS fixes what he claims are problems with their process. So instead of jobs Friday every month, we'd have jobs winter and jobs fall? Jobs season. Well, the air horn's going to get dusty. Not to mention the banks and academics that like the regular reports. They're going to be pretty grumpy, even if the numbers do get revised later. Honestly, I'm going to be grumpy. You guys aren't going to want to see me if I don't get my jobs report with regularity.

5:36Thank you very much for that inflation macro econ roundup. Waylon, do you want to go next? I do. My indicator is 24 percent. So this week, the U.S. Census Bureau posted a write-up of some recent economic research on generational wealth. And here is the headline finding. Young people whose first job is at the same place as their parents earn 24 percent more than their peers who work somewhere without this kind of connection. All right. It really pays to be a Nepo baby. I mean, this 24 percent is just at the first job. So there's this big advantage from the jump. And then it sets up these young workers for future success, too, because the research estimates that three years later, people who started their careers at their parents' employers make 20 percent more than their non-NEPO counterparts.

6:27So the gap does get smaller, but honestly, not by that much. And what are we talking, fresh-faced investment bankers and lawyers? Actually, the biggest beneficiaries are in blue-collar industries like construction and manufacturing. And the research suggests that what's happening here is that family connections helped young workers get access to these jobs. And otherwise, their next best option would be a lower wage job in something like retail or food service. This research that the U.S. Census Bureau highlighted put some hard numbers to something that a lot of people believe intuitively, which is that family connections can really shape someone's economic outcomes and social mobility as a whole.

7:05Forget take your child to work day. It's more like get your child a job at the same company day. Adrian, I think that brings us to your indicator. My indicator is 14. 14 is the number of Apple Cinema locations around the country. And in case you haven't heard of it, Apple Cinema is a movie theater chain that started over a decade ago in Massachusetts. And this week it's in the news because it's actually being sued by Apple Inc. for trademark infringement. Oh. Apple Inc. doesn't need any explanation to people. It's the folks who make the iPhone and the iPad and the Apple TV and whatnot. And, you know, the whole point of trademark law is so companies can protect their IP and also to help prevent customers from getting confused between different brands.

7:53And Apple says they want to stop Apple Cinemas from using Apple in its name because it's confusing customers. In response, Apple Cinema says, we are going to defend this suit. And our name comes from when we opened our first location in the Apple Valley Mall in New England. So just to have you both weigh in, I'm going to open up this link for a picture of Apple Cinema's logo. What do you think? Is this confusing for consumers? So it is an Apple that is made out of an old fashioned film strip. And it's in this kind of like pinkish purple, but also kind of silvery gradient, which I will say does have this kind of high tech feel to it.

8:37And I wonder if Apple is mad, not just because the logo looks kind of modern, like their logo, but also because now Apple is getting so much into movies like Apple produced F1, which is like a huge summer. In their lawsuit, they do talk about how Apple is doing a lot of things in the film space. So that's part of their argument. It definitely is not the Apple logo that we're used to with the tech company, but it's not that similar. And you could imagine that this could have been a long lost 1990s logo they had for a year when Steve Jobs went away. I think on the other side, there is a point where some people would say that this sort of trademark enforcement actually tips into trademark bullying.

9:27And this is a thing that Apple has been kind of scrutinized for before. Just to give you an example of some of the legal actions it's taken against other entities for trying to trademark names or logos that have apples in them. They have brought actions against the Wisconsin Appleton area school district. They have tried to stop a trademark registration for an autism education nonprofit that had an apple in their logo. Yeah, it's hard to argue. And also a custom stationary business called Paper Apple. So I guess we should be careful with that new segment that we're planning, Apples of the Week.

10:07Wait, but I already have John Legend composing a new song. Apples of the Week. It's your Apples of the Week. Apples of the Week. This episode was produced by Angel Corrales and engineered by Robert Rodriguez. Fact-checked by C.R. Juarez and Corey Bridges. Kate Conkannon edits the show and the indicators of production of NPR. Ah, bravo. This message comes from NPR sponsor, Capella University. With Capella's FlexPath learning format, you can set your own deadlines and learn on your schedule. A different future is closer than you think with Capella University. Learn more at capella.edu. This message comes from Warby Parker.

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