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Disinflation is the macroeconomic word of the day. Farming is another word. Artificial intelligence are two more. From American public media, this is Marketplace. In Los Angeles, I'm Kyle Rizdahl. It is Wednesday. Today, this one is the 15th of July. Good as it always is to have you along, everybody. It's helpful, I think, every now and then to step back and take stock, see where things stand. And where things stand in this economy right now, I should be clear, is that inflation has cooled just a bit. We saw the CPI yesterday, and it was a similar story today for wholesalers. Headline producer prices fell three tenths percent in June. that is month to month, which is, you know, good for anybody who buys stuff. But step back a little bit more and you'll notice that compared to other developed economies, U.S. inflation beats them all. Highest in the G7. That's Japan and France, the U.K., Canada, Italy and Germany. Now, why?

Here's Marketplace's Subirb Anishor. Over in Germany, inflation is about two and a half percent. In Japan, it's just one and a half percent. And here in the good old U.S. of A., we are stuck with three and a half percent. Why are we like this? One reason is that we did it to ourselves.

One force that is pushing inflation up here, of course, is the tariff situation or has been.

Stephen Stanley is chief U.S. economist for Santander. But tariffs are kind of done, you know, like they happen. They're here. They're probably not going up much more, although who knows. So there's more going on that's making American inflation worse.

What it comes down to, I think, is that the U.S. economy is just much stronger. We're running hotter than many other countries.

Inflation usually is what you get when an economy is overheating in some way. And for the U.S., one fuel feeding the fire is AI. Stephen Juno is a senior U.S. economist at B of A.

AI has driven a lot of CapEx.

CapEx, as in capital expenditure, as in tech companies have been spending a lot, an estimated $800 billion this year in the U.S.

That CapEx has also led to upward pressure on prices for certain consumer products. Think about your computers, right? You're paying more for RAM. Think about anything that has a GPU in it. There's upward pressure.

Also, AI has driven up the stock market, so people with stocks feel better about spending and you just get more pressure on prices. Bottom line, we've got more inflation for the same reason we have got strong economic growth. So thanks, AI. But also, inflation sucks. and there's a big old catch here.

The growth is fairly concentrated.

Christopher Hodge is head economist at Netixas CIB.

Consumer durable goods purchases, residential construction, commercial construction, that's all lagging.

That could help control prices over the rest of the summer.

So if I look further at the horizon, it's hard for me to see what's going to accelerate inflation.

That is, of course, the hope. In New York, I'm Sabri Beneshaw for Marketplace.

All that AI spending, more on that in a second. Wall Street midweek traders are just keeping their heads down and buying. We will have the details when we do the numbers.

We got the latest beige book today, the Fed's anecdotal account of this economy, always full of memorable tidbits, including this one today. Bars in greater Boston also saw a market uptick in beer sales, which they attributed to the World Cup. That's a quote. And we are looking at you, Scotland. But why does something like that matter to the central bank?

We're needing to report on latest economic conditions as we're briefing our Fed president before she goes to the FOMC meetings.

Emily Kerr is a senior business economist at the Dallas Fed. One of the people actually calls businesses in the 11th district for those anecdotes that go into the Beige Book and into the briefings for Dallas Fed President Lori Logan.

As part of that process, you know, we can look at official data. And so we have employment data for Texas through May. And if we're briefing her on how the economy has changed since the June FOMC meeting, that information isn't it's not what we need.

So the Beige Book, at least on at least, you know, for the week or two after it's released, is like some of the freshest data we have, even though it's it's more qualitative data. So we have to kind of think about how to use that exactly.

That's Jeremy Pyger at the University of Oregon. And that qualitative data, ANIC data, if you will, is the most timely of all the reports that we're getting this week, including the PPI Sabri was just telling about, as well as the CPI we got yesterday, which is from June as we sit here, well, into July. Ethan Strube is at St. Olaf College.

And since the CPI was collected, there have been more developments in the Middle East. And so in some sense, the Beige Book might give us a sense of whether or not, for instance, business leaders are concerned about how energy prices might go back up or whether they kind of

view trade policy as still affecting their margins. See also page 27 of today's Beige Book from the Atlanta Fed, quote, several contacts noted that softening global demand contributed to recent crude price declines, although most emphasize that ongoing uncertainty surrounding the Strait of Hormuz disrupted shipments and kept inventories tight, which is a long way of saying

oil. Here's Jeremy Piger again. I actually think in periods of time when there's a lot of uncertainty and a lot of transition, that's when the narrative data really is most useful. When things are kind of normal, it's just going to kind of confirm what you're seeing in the data. Times of uncertainty

in times of transition, like, say, now. Businesses are having to make quick decisions, like should they stock up on inventory or hire workers or raise prices? And the Fed wants to know about those decisions before they show up in the hard data so that they can have the best snapshot of the economy right now. you are i am completely certain as weary of hearing me say the words data center as i am of saying them but they are perhaps the inescapable reality of this economy right now ai companies are spending billions on them chip and server makers are earning billions because of it. So are contractors and shipping companies and heavy equipment and generator makers and property developers and so on down the industrial food chain. All that money, though, it has to come from somewhere. And where it's coming from, in many cases, is businesses that have moved the money they used to spend on other technologies over to AI. And that, in turn, has been very bad for older technology companies. Case in point, IBM. Big Blue, if we can still call it that, reported a lousy second quarter yesterday. Shares down 25 percent, another couple of percentage points today because people are buying AI stuff and not IBM stuff. And that is dragging down a whole bunch of other old school tech companies as well. As Marketplace's Kelly Wells reports, the AI boom is not a boon for all. It's not just an IBM problem. A lot of its competitors have

seen 20 to 50 percent drops in their stocks this year. Oracle, Microsoft, Accenture.

Almost no software name has escaped the sell-off.

Daniel Newman is CEO of Futurum Group. He says when IBM warned that its second quarter report would be pretty ugly.

The immediate reaction to the market was, this is the validation point the market had been waiting for, that AI is eating software.

And even companies making big tech investments have only so much money to invest. Peter Cohen teaches management practice at Babson College and authored a book on generative AI.

and since they're spending so much money on that, they are finding themselves not spending so much money on software. That's sort of going by the wayside. Cohen says whether AI investment

actually pays off is still a big question. But this is what is really happening now. And it

appears as though that trend is going to continue. So capital is finite, but so is the stuff that

these AI investors are investing in. Demand is higher than we expected. We can't ramp up supply that quickly, and so the prices of chips are going up faster. Making them more expensive,

says Michael Smith, information technology and public policy professor at Carnegie Mellon University. But companies will invest in them anyway, partly because buy low plus sell high equals profit, but also nobody wants to get left behind. The market's kind of nervous about what's

going to happen next. We've never seen a technology that has doubled in capacity as fast as this one

news. But it's not Armageddon. Yes, yesterday's stock drop was one of the largest in IBM's history, but Smith says context is important. The drop just brought the stock back down to where it was two months ago. I'm Kaylee Wells for Marketplace.

Farming, even in the most predictable and stable of times, is hard. The variables are legion, weather and yields and a thousand other things. Roll in here in mid-summer 2026 as farmers gear up to plant their fall crops, the high temperature of geopolitics and them, those farmers, getting as much as they can out of the ground. That is brutal. To be specific, how much farmers are able to plant and how much money they will make or lose depends on how much they're going to have to pay to fertilize their crops. Marketplace's Kristen Schwab reports.

When Lorenda Overman first started growing corn, soybeans, and wheat some 40 years ago in North Carolina, success depended mostly on one thing. We watched the weather 9, 10, 15 times a day, honestly. At some point, she got used to making big financial bets on rain. But these days, there are new variables to keep track of, like the price of fertilizer.

We're in constant communications with our suppliers to see what the cost would be, even when we're not planting.

Depending on the crop, plants are fertilized two or three times a year. And one of those occasions is coming up. Wheat is planted in the fall. How much Lorenda puts in the ground may be determined by what fertilizer prices look like towards the end of summer.

You know, every year you sit down and you work out a budget and you pencil in whether that crop will be a profit or a loss. And you also want to make sure that you have accurate input prices.

It's been harder to do that math since the war in Iran sent diesel and fertilizer prices swinging. Veronica Nye is chief economist at the Fertilizer Institute, which represents fertilizer companies.

Fertilizer is very geographically concentrated. the resources that you need to produce most major fertilizers.

Those are nitrogen, phosphorus, and potassium. The U.S. produces about two-thirds of what farmers here use. Nye says the rest is imported, mostly from Canada, Russia, Southeast Asia, and the Middle East.

And when there are shocks to those regions where those resources are located, it is felt globally.

This past spring, the price of urea, a widely used type of nitrogen fertilizer, nearly doubled from the year before. And experts worry that fertilizer costs could rise again as an Iran peace deal seems further away. In the meantime, there aren't any quick fixes. The USDA recently committed $500 million to expand domestic fertilizer production. But Nye says building new plants can take five years. Building new mines can take 10.

That's if you can get, you know, the permits and the land and all of this, you know, the stars have to align.

In the meantime, farmers who grow fertilizer-intensive crops like feed corn and wheat will foot the bill.

It cost me an extra hundred grand this spring over what was budgeted for.

Todd Littleton is a row crop farmer in Tennessee. He says ordering his fall fertilizer supply early to avoid price hikes isn't an option. fertilizer is hard to store and sometimes dangerous, and he doesn't have the money.

The problems being our margins have been so tight that we just haven't been able to do that due to a lack of cash.

operating. So he's going to keep on with the plan. Maybe plant more soybeans, which require less fertilizer, lean more on his poultry, and hope for better luck in 2027. A farmer's kind

of an eternal optimist it's always going to be better next year. You know, we kind of have to be

to do what we do. He says it's been a tough few years for farmers. They need a win. I'm Kristen Schwab for Marketplace. coming up he is now making around five thousand dollars a month yeah wait till you hear this one

And first, though, let's do the numbers. Downdustro's up 150 points today, 3 tenths percent, 52,658. The Nasdaq gained 162 points. That is 6 tenths percent on that particular index, 26,269. The S&P 500 added 28 points, 4 tenths percent, 75, 72. IBM, which we mentioned, down 2 and 7 tenths percent. Competitors, sure, we'll do some. Oracle, spent massively on AI, by the way, expanded 3 and 6 tenths of 1 percent. Microsoft accelerated 2.8%. Bond prices went up the yield on the 10-year T-note, thus went down 4.55%. You are listening to Marketplace.

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This is Marketplace. I'm Kai Risdahl. Generally speaking, when you borrow money, the basics are pretty basic. You borrow, you pay back with whatever interest you borrowed at. Done. Not so at all, though, student loan borrowers. There was a pandemic era payment pause that lasted more than three years. Some student debt was canceled and then that cancellation was canceled. And then on the first of July this year, the Trump administration said student loan borrowers enrolled in the Biden era save plan that stands for, or I guess more accurately stood for saving on a valuable education. They have 90 days to enroll in yet another different repayment plan. You're confused, sure, but think about the borrowers. Marketplace of Stephanie Hughes has that one.

Melissa Diesendorf has wanted to be a veterinarian since she was four years old. I love animals. I love science. I love the curiosity factor in medicine. There's always something new to learn. She took out loans to cover tuition and living expenses for vet school. And graduated.

from a public university in Louisiana in 2019. Her total debt? $208,000. I was grateful for the ability to finance an education that I would not have been able to obtain otherwise.

Diesendorf budgeted for her monthly student loan payments. Then in 2023, the Biden administration announced the SAVE plan, billed as the most affordable student loan repayment plan ever.

Monthly payments were based on a borrower's income and could be as low as $0. And I said, this is great. You know, it's going to be a payment that I can afford. I'm going to be able to pay off that, which I owe. Diesendorf paid about $800 a month under SAVE. She's one of

6 million people enrolled in the program, though she stopped making payments while it's been in legal limbo. SAVE was blocked by a federal appeals court last February. Then last summer, Congress passed a law to phase the program out by 2028. And earlier this year, the Trump administration reached a settlement ending save early. The change in policy has made Diesendorf

furious. I signed up in good faith, trusting that the government would not pull the rug out from under me. And when they did, it was a pretty big blow. Lots of borrowers are feeling that blow,

and some believe there's still a way out. They're hoping that the next administration will make forgiveness happen and or revitalize something like the save plan.

Betsy Mayotte leads the Institute of Student Loan Advisors. She doesn't think that reversal is going to happen, but it's understandable to think it might. She says the past five years have been the most chaotic in student loan policy history.

The whiplash of the different policy proposals and you have this available, now you don't, just makes borrowers uneasy and anxious and angry.

And less likely to pay back their debt. A new working paper looks at how borrowers responded to the Biden administration's decision to offer $10,000 in loan forgiveness in 2022. Economist Konstantinian Ellis at the University of Cambridge is one of the authors of the study.

People who believed that their student loans were going to be forgiven, they would essentially do everything possible to avoid paying down their loans.

But the Supreme Court blocked that program, and when student loans ultimately came due, those borrowers were more likely to become delinquent.

Of course, delinquency is a very bad outcome. There's damage to credit scores. It can delay people from purchasing homes.

Yanela says when the government changes its message, borrowers are less likely to believe the government will do what it says it's going to do. The Trump administration says its message has been consistent.

If you took out a student loan, it is your responsibility to pay it back.

Nicholas Kent is undersecretary for the U.S. Department of Education. He says the SAVE plan created artificially low monthly payments for borrowers, and he points them towards a new option, the Repayment Assistance Plan, or RAP, where monthly payments are still based on income but won't be as low as zero. And unlike the Biden-era SAVE plan, it's part of a law that was passed by Congress.

Repayment plans that are congressionally authorized have staying power.

Prior to last summer, Congress had never taken away an existing benefit from borrowers, according to Betsy Mayotte of the Institute of Student Loan Advisors.

So part of the questions that we get these days are, well, you know, it looks like such and such a plan is best for me, but what happens if they get rid of it in a year or two years or five years?

Mayotte says that's made borrowers even less confident as they make long-term decisions with big financial consequences. I'm Stephanie Hughes from Marketplace.

Some of us might just wait until it rains to get our cars washed, you know, sort of washed. Others head to the actual car wash. The inside of the car, though, generally the owner's job. But for the entrepreneurially minded, cars in a state of untidiness are a business opportunity. Tuping Chun wrote about the now kind of lucrative world of car detailing in The Wall Street Journal the other day. Welcome to the program. Thanks for having me. Tell me, would you, about this young fellow you start this piece with?

Sure. Yeah. So Benjamin Sheets, he is one of a number of young entrepreneurs I spoke to when reporting this story. And he's someone who actually decided he had sort of an unconventional route into car detailing. He was halfway through his junior year in college when he decided to drop out because he found that washing cars was actually probably going to be more lucrative and ultimately what he thought was a better ticket to success.

And he is having some, right?

He absolutely is. Yeah, he is now making around $5,000 a month just through detailing cars. cars out of his parents' garage. He's booked out months in advance and is looking to start

hiring a crew. I will say that this does sound a little random because there are car washes all over the place. And it doesn't seem like that's an industry with a lot of growth,

but clearly there is. There's definitely a niche that people are tapping into here of mobile detailing in particular, where customers can just ping somebody and have them come over to their driveway. They'll do it right there. There's a lot of advantages of it just being very, you know, like low startup costs. And ultimately for a lot of customers who are just used to kind of clicking and wanting something on demand, like a lot of appetite for this kind

of service. It did hit me as with Benjamin Sheets, a lot of the folks you talked to for this piece quit their jobs or dropped out of school to do this and are finding it, to be clear, a better

option. Yeah, it was really striking to me. I mean, in addition to Benjamin, who was at the top of the story, you know, I spoke to others who, in one case, there was a guy I spoke to who had turned on a full ride to college to start his own detailing business. And a book coming from, yeah, really all kinds of walks of life. I spoke to one former Amazon warehouse worker. He was making $15 an hour doing warehouse work, quit, started washing cars for 20 bucks a pop. And then now, fast forward a few years, his detailing business is making $19,000 a month. And that's not even counting. He's also, of course, now has a TikTok and he's running coaching services that brings in another $50,000 a month, but some genuinely crazy stories and trajectories here.

Since you mentioned TikTok, I was floored to read in this piece that there's something like a million and a half videos on TikTok with the hashtag card detailing. I mean, I guess we like to watch that stuff.

It's very satisfying. I mean, if you do tune in, you can see just seeing that grime get like pressure washed away. There's something kind of soothing about it, I guess.

I will have to do that. But also, I mean, it's another stream of revenue for these folks.

Oh, absolutely. Yeah. I mean, you know, I think it is, I've spoken a lot of influencers and in this case, I think a lot of the revenue can come through more coaching services as opposed to product placement. But no, definitely a way of bringing business for sure.

Coaching services, you mentioned that a couple of times. So it's these folks who have made it big, teaching other people how to make it big by washing cars.

Yeah.

Detailing cars, which is different, right? Detailing, got to be different.

Yeah, because it is a little bit like this sort of industry. I mean, a lot of it is you are learning on YouTube effectively. There's not really, you're not going to community college to do this. You're learning from other people. You're getting mentored. And so that is a lot of how people are coming up.

What about you? You wash your own car or what?

You know, I have pretty small kids. And so I am definitely a customer who will say, oh, my gosh, come to my driveway, make my car less terrible, please.

It's the interior of the car that needs the help, right? That's the deal. Tipping Jen at The Wall Street Journal. Thank you so much.

Thanks, Guy.

this final note on the way out today which comes with the observation that spacex is scheduled for another starship starship rather launch tomorrow that's the giant silver rocket upon which american hopes to get back to the moon depend. They are always something to watch, as is the company's share price. It spent part of the session today trading below $135, which is where its initial public offering was priced a month or so ago. It is worth a reminder here that SpaceX isn't just rockets. It does social media and AI, satellite internet, and maybe, if rumors are to be believed, a merger with Tesla, too. We'll see. Our media production team includes Brian Allison, John Fokey, Montana Johnson, Drew Jostan, Gary O'Keefe, and Charlton Thorpe. Alex Simpson is the manager of media production. I'm Kai Rizdahl. We will see you tomorrow, everybody. This is APM.

if your kids are big thinkers they're going to love million bazillion it's a podcast from marketplace about money for kids and their families hosted by me bridget and me ryan each

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