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On the program today, we will dabble in the consumer economy. We'll do some housing and some energy. Also, algae, but not that algae. From American Public Media, this is Marketplace. in los angeles i'm kyle risdahl it is monday today the sixth day of july good as it always is to have you along everybody well welcome everyone to the first full week of the second half of the year we're going to spend some time up at the top of the program today Not on corporate fortunes for the next six months, not on markets or indicators, but on you and me and everybody else in this economy who buys stuff, consumes stuff, in other words. And we're going to do it with an eye on business behavior and our buying patterns, also the calendar. Target and Walmart and Amazon and most other retailers are rolling out back-to-school sales earlier than usual this year. And PwC, once upon a time known as PricewaterhouseCoopers, says families are going to spend $922 on supplies this year. 47 percent of those families say they are going to be spending more this year than last. Marketplace of Kristen Schwab gets us going with corporate promotions and consumer predilections.

During a Target run yesterday, Kristen Diehl kind of couldn't believe what she saw on display. Colored pencils, binders, backpacks.

I was surprised to see already the back to school when we, you know, I think most of us are just happy that we're just out of school.

Deal is a marketing professor at the University of Southern California's Marshall School of Business. And she says sales patterns have shifted over the last handful of years. Everything's starting earlier.

Christmas promotions before Thanksgiving and Thanksgiving before Halloween and those things.

It wasn't always this way. Companies first started pushing early buying during the pandemic, when broken supply chains threw retail inventory into chaos. Consumers seemed happy to shop early and buy more. Brittany Steiger, a retail and e-commerce analyst at Mintel, says the sales trend really cemented when tariffs came into play.

That really triggered an early shopping mentality for parents really trying to get ahead of those price increases.

Steiger says at this point, it seems like one sale blends into the next.

And as it's stuck around, it's kind of evolving into this sort of always-on shopping mentality.

Always-on because there's always an event to prepare for, and life is getting more expensive. Christina Durante, a professor of marketing at Rutgers University, says inflation, which is at its highest level in three years, is causing serious anxiety for shoppers. It's so uncertain that we don't know how it's going to play in. And because we want to have control over not just our budget, but just our lives, we're really sensitive to any sort of cue. Durante ran studies on this, on how stressors change buying habits. She says some people really locked in. They kept a tight budget, maybe even hoarded money. Others?

They were really likely to do impulse purchases on like new clothes, anything that might help them feel more in control over whatever is currently stressing them out. She says the part of our brain that tells us to eat chocolate is the same part of our brain that tells us to shop. I'm Kristen Schwab for Marketplace.

Wall Street on this Monday after a long weekend. Oh, look, all of a sudden, AI stocks are a thing again. We'll have the details when we do the numbers. you know how sometimes when you ask something complicated you get this that's a very good question. It's a great question. That's Scott Brave, the Chicago Fed, also Ernie Tedeschi at Stripe. They are economists both talking on the topic of today's explainer, you and how you are feeling about this economy. There are, as you know, two primary ways we measure that. We talk about them all the time. Consumer sentiment from the University of Michigan and consumer confidence from the conference board. We are talking about them today because if you are a regular listener to this program, you know that you, the humble consumer, drive something like two thirds of every single thing that happens in this economy. But as you have perhaps also heard, it has been kind of hard to square how consumers are feeling, spoiler alert, pretty negative, with how consumers

are spending. And historically, there has been a pretty close relationship between sentiment or

confidence and consumer spending. Consumer sentiment and consumer confidence were top tier inputs into models that forecasters and economists had about consumer spending.

Note the past tense that Ernie Tedeschi just used right there. How consumers are feeling just isn't a grade A predictor anymore for how they will spend. The correlation kind of fell off a cliff after 2020. Think about that timing for just a second. And ever since, we've consistently been feeling pretty bad about this economy of ours. The University of Michigan Consumer Sentiment index was up in June, yes, but that was from an all-time low in May, so still pretty negative,

thanks mostly to the war and oil prices. If I were to put those low levels of consumer confidence or sentiment into a model, the model will tell me, oh my God, consumer spending is going to be like down below the earth, like just terrible. Consumer spending, as you surely know,

is far from those down below the earth terrible levels. It's basically fine, actually up seven 10% in May when we had that all-time sentiment low. And that, in turn, has economists wondering

why consumer sentiment isn't basically fine, too. Really what's going on, I think, is inflation,

high prices, affordability, however you want to put it. This is kind of the vibes conversation we've been having for years now about this economy. Since the pandemic, really, and the high inflation that followed. The consumer price index hit nine percent in June 2022, in case you had forgotten, which you surely have not. Consumers have memories, right? And so even as growth in prices have gotten

better, they go to the grocery store, they see persistently high price levels of eggs, you know, whatever they're buying produce. And that is keeping their attitudes weak and low over this

whole time. There is something else going on with the consumer sentiment measure in particular that could explain why it's been so persistently low. The University of Michigan survey used to be

conducted by phone. And then in early 2024, they gradually transitioned to collecting all of their information online. Okay, so? People tend to be materially more negative when they answer things online. And we saw that immediately with the University of Michigan survey. Like 11% materially

more negative on average. That's according to Tedeschi's research. So what does all this consumer negativity mean for how we ought to think about this data? There may be other reasons why we

should be concerned or freaked out about that, you know, political, social, you know, et cetera reasons. But from an economic standpoint, we have seen empirically that the economy grows just fine

throughout these negative vibes. Tedeschi is personally putting less weight on the readings than he used to. Scott Brave and his colleagues at the Chicago Fed are trying to figure out what

is going on with the data. Is there a way that we can restore some of that relationship between these traditional measures and consumer spending growth by bringing in new alternative higher

frequency sources of information? So they have made a new composite measure that uses data both from consumer

sentiment and confidence and combines them with other daily data. That's high frequency, right? Daily data looking at how positive or negative economic news coverage is and how people are

talking about the economy on social media. In one instance, it's actually a survey that's asking the same questions as one of the traditional indexes, but just doing it on a daily basis with a much

larger sample. Turns out the new index does track more closely to how people are spending. No official release date for it yet, but we'll keep you posted. It's cooler today, a little bit anyway, in much of the eastern and southern parts of the country after a blistering 4th of July weekend. That was miserable for people and their pets, soccer players and their fans, and power companies too. Marketplace's Samantha Fields has more on how the grid held up.

Cape Cod in Massachusetts didn't even get the worst of the heat wave. It only made it into the 90s. Still, Barbara Cates Garnick, a professor of energy policy at the Fletcher School at Tufts University, says it was hot.

We had a lot of times when our electricity fluctuated on and off, lights flickered. So we were very aware that there was an issue with the power grid.

It wasn't just the Cape. The power kept flickering on and off in other places, too, including Philadelphia and New York.

I think it shows that at the local level, there are a lot of concerns that need to be addressed because we've come to a time when we're using more electricity. the population is increasing. And the physical infrastructure that makes up the grid is getting

old. Much of it was built more than 50 years ago. But for all this strain... The grid held up pretty well over this long weekend. Charles Hua at the consumer education non-profit Powerline says despite intense demand and some flickering, the lights and air conditioning stayed on for most

people. We're doing a better job of managing and operating the grid. And part of what that looks like is directing consumers to be more proactive in adopting certain measures like turning off their lights or conserving energy at different parts of the summer days when the grid is

particularly stressed. The addition of more renewables has also helped relieve stress on the grid. In the mid-Atlantic, which saw what was likely record demand during the heat wave, Michael Goggin at the consulting firm Grid Strategies says solar performed well.

The solar output was consistently high every day last week during these high-demand periods. And so that really helped keep the lights on.

To help keep the lights on in the future, he says, we also need to be building more new transmission lines, including between regions.

Expanding transmission is particularly valuable in events like this because extreme weather is not, these events are not that large. And so if your region is short, you can buy power from your neighbor And then, you know, maybe this winter, it'll be the reverse.

And your region will be able to send power to its neighbors. I'm Samantha Fields for Marketplace.

dateline everett washington boeing started up a new assembly line at its facility there today building 737 max jets airbus meanwhile its main competitor is reported to have set its sights on delivering 900 commercial planes this year that would be an all-time high both companies have faced supply chain issues since the pandemic and as these things go they each now have order backlogs thousands of planes deep and which are only growing as airlines demand spiffy new jets. Marketplace's Henry App takes it from there. There are basically two reasons

airlines really want to get their hands on new planes right now. One is the aircraft they have are getting old, a couple decades old in some cases, says Doug Harned, a managing director

at the investment firm Bernstein. The good thing about aircraft is that if you maintain them properly, they can last quite a long time. But eventually the costs start to get higher and

higher for the old aircraft. So they've ordered new ones, but the wait times are long. And even though airlines have faced big fuel bills in recent months, they haven't canceled many orders.

for new planes because those new jets will help them save in the long run, says Henry Hardevelt,

an airline industry analyst at Atmosphere Research Group. New aircraft allow airlines to consume less fuel. That helps airlines offer the load fares that we as travelers want. Newer planes can also fit more passengers, Hardevelt says. Not great for us in the legroom, of course, but it helps make these aircraft more cost-efficient for airlines to operate. Which gets us to the other reason

airlines are in the market for new aircraft. Demand for air travel is high, both from customers willing to squeeze into those economy seats and from high-income premium customers, says Magna Maharishi, an airline reporter at Skift. To attract those customers, airlines have been adding new

international routes. United is a good example of this. They've added routes to Greenland and

Mongolia. New routes require new planes. Plus, airlines are upgrading the business and first

class seats on those aircraft. A lot of that has been meant to cater to those wealthier consumers because that's the cohort that's really been driving the revenue for these airlines. But

fancier first class cabins are also slowing down new aircraft deliveries, says Doug Harnett at Bernstein, because regulators have to sign off on the changes. And so there have been delays,

not just in supplying the seats, say, but also just getting certification for new designs.

Those delays on top of high demand, Harned says, are why Boeing and Airbus are effectively booked up for the next six years. I'm Henry App for Marketplace.

coming up and i was like so the problem is i don't know anything actually when is that

stopped anybody huh first though let's do the numbers dow industrial is up 155 points today three-tenths percent, finished at 53,055. That's another record. Should you be keeping track? NASDAQ gained 288 points, one and one-tenth of one percent, 26,121. The S&P 500 added 54.7 percent, 75 and 37. Microsoft is cutting 4,800 jobs, about two percent of its global workforce, as it overhauls its Xbox gaming unit and restructures in order to pay for what? What's paying for? All the AI investments it has made. Microsoft down 1% on the news. Apple improved about one and three-tenths percent. The World Cup continues this week, as you might have heard. Some advice if you are planning to go, leave your drone at home. The TSA says that since the start of the tournament, more than 600 drones have been seized across all 11 U.S. host cities. Why would you think it's okay to bring a drone to that game? You can barely bring in drinking water. Drone Parts Maker Unusual Machines, plummeted 1 and 9 tenths of 1%. You're listening to Marketplace.

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This is Marketplace. I'm Kai Rizdahl. If you bring up the topic of algae right now, one's mind, even if somehow miraculously you are mostly removed from the grind of the daily news cycle, one's mind likely goes to the reflecting pool in front of the Lincoln Memorial. But algae doesn't play favorites, and it can thrive in far larger bodies of water. To wit, every year the National Oceanic and Atmospheric Administration predicts just how bad the algae is going to be on Lake Erie. And the latest forecast is just out. Moderate harmful algae blooms is the guess for the year. And those algal blooms are obviously a bummer for fish and for kids who want to go swimming. But they've got massive economic implications, too, for the people living nearby and folks just visiting as well. From the warm, slightly green waters of Lake Erie, Marketplace's Kaylee Wells explains.

The blooms are a big enough deal that Lake Erie is dotted with little buoys, constantly monitoring how much algae is in the water. It takes several minutes in a zippy speedboat to travel far enough offshore to see one up close. On the way, one of the scientists captures a jar full of water and holds it up to the light. It looks clear enough to drink. but then she throws a net with a filter on the end overboard and drags it through roughly a thousand gallons of water to reveal all the stuff we can't see the remaining liquid she pulls out of the filter is a murky yellow green scuzzy with lots of tiny zooplankton buzzing around

and nipping at the green bits it's summer the water temperatures are near 70 we're certainly

catching a lot of living stuff in the water. Ed Verhamey is our captain on today's voyage. He's also a principal and senior engineer at Limno Tech, which is a consulting firm that

helps make water cleaner. What we don't want is the harmful algae. That's the kind of algae that

can cause diarrhea, vomiting, and rashes, and that's what his company helps monitor. Verhamey keeps driving until we arrive at a buoy. He pulls up the data it's capturing on his phone and relays the good news.

Yep, really nothing going on out there right now. So these are very low readings.

The recipe for high readings? Extremely heavy rainy periods, which pull nutrient-rich agricultural runoff into the lake, followed by extremely dry and sunny periods that help the algae form. This year hasn't been very extreme, which is why NOAA says it'll be a moderate year for harmful algae. Verhemi says an especially bad year, like 2014, when the algae contaminated Toledo's water supply would show readings 20 or 25 times higher than this, and the blooms would be very visible. So that's noticeable scum. The water looks like paint, really. This year's moderate forecast isn't just good news for Lake Erie's ecosystem. It means algae won't tank whole chunks of the Great Lakes economy this year. Because Lake Erie is the main source of drinking water for northeast Ohio. Alex Margavichis, commissioner of Cleveland's Water Division, says an algal bloom like the one that happened in Toledo would be a doomsday

scenario. I don't even know where to begin to calculate, I guess, the economic impact of something like that. If Greater Cleveland had to be under a do not drink water advisory,

what would happen? The background chatter is from the State of the Great Lakes, an annual convening of water experts and community members in downtown Cleveland. Like I said, clean water's a big deal here. Anyway, the cost of algal blooms is calculated in more than just bottled water and

health care bills. In this six trillion dollar economy, the Great Lakes Basin is a huge tourism

economy. Chris Ronane is Cuyahoga County Executive. That's the county Cleveland's in. Lake Erie is the

walleye capital of the world. So they come here to fish, there's fishing tournaments and just

recreationalists. When the algae gets bad, it sucks up all the oxygen in the water, which causes mass fish kills. Not an awesome feature in the walleye capital of the world. And a hit to the tourism industry can have ripple effects, says Scott Hardy, an earth scientist with the Ohio

State University. That's not going to impact the people who are going to recreate, but you have to think about the hotels where people stay. You have to think about the gas stations that fill up the

cars that people drive to the water. Hardy says climate change is making that extreme weather and the algal blooms.

follow it more common. But he also says we're getting better at mitigating the runoff that causes the blooms in the first place. So every year is a toss-up of just how bad it'll be. From the waters of Lake Erie, I'm Kaylee Wells for Marketplace.

redfin came out with a survey last week 74 percent of homeowners say their home is a reflection of who they are 57 percent of renters on the flip side of that economic coin say their home is just a place to live actually having your name on the deed can lead to all kinds of changes in your life and sometimes even a whole new career. Here's today's installment of our series, Adventures in Housing.

My name is Sarah Southwick, and I have a native plant nursery in Provo, Utah. So the origin story of my business begins years ago when my husband and I bought a house in Provo. We were first-time homeowners. And so I went to a class to learn how to landscape in Utah. It was like a free community class called Localscape. and i was very quickly convinced that here in utah kentucky bluegrass has no business being the default we're in a desert native plants seemed like the obvious choice but when i searched for them at nurseries nearby i could not find them and i felt like i was having to get a master's degree doing research trying to figure out what was native trying to drive all over the place on wild goose chase trying to find plants most plants are trademarked cultivars which means somebody earns a commission or royalty every time that plant is grown and sold. And we do this because we value predictability in our landscapes. So we want, okay, if I plant this tree, I know it's going to be this exact size and it's going to turn red in the fall. And that's not actually how plants are. And so choosing to plant native plants means choosing unpredictability. I could tell you the exact moment when the idea of this being a business entered my mind I was pushing the stroller down the sidewalk with my kid and it just settled on me I was wrestling with this why can't I find these native plants and it hit me you could solve this problem one day if you want to and I was like so the problem is I don't know anything actually I work in HR I work in tech and that was about five or six years ago and over time I just have not been able to let the idea go. At some point, it shifted from maybe someday to when I opened this plant nursery. So February 2025, my manager approached me and let me know that my three-quarter time position was no longer an option and I would either need to go full-time or I could leave by taking a severance. And I knew immediately, I was like, it's the moment. The moment has arrived like for me to try and take this leap. I've kind of crammed plants into every usable space of my backyard at this point. My kind of natural state of being is one of more control. And so I do struggle with the fact that I've taken this leap into this great void, this great unknown, but I have to run it as a business in order for this to work and for me to still be a business

in years to come. Sarah Southwick, running her home-based business, Native Utah Plant. She's in Provo. Tell us, would you, about your adventure in housing, own, rent, or otherwise. Marketplace.org is where you can do that. This final note on the way out today, in which OPEC Plus looks at falling crude prices and says, yep, definitely, let's put more supply into the global market. 188,000 more barrels a day will be the new quota, effective in August. The catch is that oftentimes cartel members don't actually hit those quotas for reasons both political and economic. Brent crude on the day of the Global Benchmark, $72.10 a barrel, basically back to where it was before President Trump started bombing Iran. Amir Babawi and Caitlin Ash, John Gordon and Noya Carr, Steve Mullis and Stephanie Seek are the Marketplace editing staff. Kelly Silvera is the news director. And I'm Kai Resdahl. We will see you tomorrow, everybody. This is APM.

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