The view from a COVID hot spot


Item One economic statistics what they tell you and what they do not item to the federal. Reserve is I believe making a point. I three. Oh. You know everything else. From American public media. This is marketplace. Los Angeles I'm Kai Ryssdal. It is Tuesday today to sixteenth June good his always. Have you long everybody? We are going to begin today with an object lesson in if it sounds too good to be true. Probably kind it is the Commerce Department enlightened us this morning about the state of retail sales in this economy, specifically the report for May eye. Popping is a word. You could use up almost eighteen percent from April. A record percentage gain wise. But. You really want to judge this economy right now on a month to month comparison. I didn't think so. Marketplaces have replenish orbits is gone. When New York started reopening, it was time for William, bell to go outside I. Just want to go and do run an air. Don't WanNA. Get Out of the House so off. He went to the majestic soothing aisles of Home Depot I needed an up picking out a flower pot. I got the advice of the people who work there and she literally came up right. Right next to me and was helping. Pick out the right one. It was a little weird being that close to each other, but we both had masks on, so we kind of just accepted it. Lots and lots of William. Bells went shopping last month. Clothing and accessory store sales were up a hundred and eighty eight percent month over month, furniture and home furnishings up ninety. Ninety percent electronics and appliances up fifty one percent. If you take out car, dealers, gas and restaurants, retail sales were actually up one point seven percent in May year over year, according to the National Retail Federation. Where Jack Klein's chief economist with scattered more good news for the economy category, good news for the consumer, and now let's all go shopping for a brand new reality. Reality Check Lindsey Piazza has one for free. She's chief economist at steal. Yes, we did have some pent-up demand, but going forward with unemployment benefits ending with the P. P P program coming to an end, will the consumer be able to continue to spend at these more positive levels no according to jobs wallace at RSM, my sense is that the pub- doesn't quite understand. Politics many policymakers for that matter. The fiscal cliff that awaits the US economy in just six weeks six weeks is about when those additional unemployment payments end dazzling increases. Aside retail sales are still down eight percent off their January peak and yeah. Lots of businesses will come back, but some loan David Schwartz is an equity analyst. At morningstar research, some people will be permanently employed who right now may not understand that the Federal Reserve estimates that at the end of the year another six months from now the unemployment rate will still be at nine percent in New York. I'm revenge. Sure for marketplace. Okay so speaking of the Fed. We're going to do a brief disquisition. Now of the Federal Reserve I what it is saying and then what it is doing, it has not escaped our notice round these parts, and in the past couple of days, a couple of three presidents of Regional Federal Reserve banks have been out and about commenting on some economic issues of the day I. It was Rob Kaplan of the Dallas Fed on face the nation. This pass on fiscal policy from here is to be a critical element of the recovery. Fiscal Policy Congress in the White House taxing and more to the point spending then Mary Daly of the San Francisco Fed at a national press club event with marketplace's Kimberly. Adams monetary policy alone can't quit us back to where we need to be. We also need fiscal policy makers to commit to sustained investments in our economic future. The need for this was evident before the crisis, and it's even more evident now. Then on this program yesterday Rafael Bostick of the Atlanta Fed when I asked him whether he'd agree with what his colleagues said I'm committed to going and talking to policy makers, making sure they're aware of places where there does seem to be distressed continuing as a result of the pandemic, and I'm going to encourage them to think hard about doing things to help those people. So. That's a yes. The point being fed seems focused incredibly focused on getting congress to do something and doing it sooner rather than later. One more thing about all three of those people they each said some variation of this. This is Rafael boss here yesterday. For many people. The systemic racism is so ingrained in everything that we do on a basic level that they don't even see it. They don't think about it as A. Inhibitor of African Americans ability to do the things that other people get to do with no questions and I think what's changed is that people are seeing things happen? That are getting them to think well. Maybe things are different for African Americans. Maybe we should talk about this more and get a deeper understanding. Let me just in a rare moment of shameless self-promotion. Here recommend to you that interview. I did yesterday with Dr Bostick. It was all him the good stuff, not me. It's on our website also and more to the point. His Essay on systemic racism in this economy will have a link to that, too obviously marketplace dot org. Art So as promised what the Fed is doing and it is doing a lot among the latest. The Central Bank started buying corporate bonds today. That is not new. It was announced a couple months ago, but it's big deal as the Fed what it can to backstop companies and their employees, marketplace's Nancy Organza explains how it's GonNa work. When a company wants to borrow money, it can issue corporate bonds. The buyers of those bonds are lending those companies money now the Fed is going to buy a broad cross section of corporate bonds. If they meet certain standards, they must have been rated as investment grade. That is less risky as of March before the. The coronavirus lockdown started Christopher Wayland is chair of Waylon. Global advisors to the Fed is trying to be helpful because they are really uncertain about what's going to happen later. This fear Wayland says the Fed wants to be sure companies have all the money they need to. Whether the pandemic. The Fed is also making this program anonymous, just buying up corporate bonds without anybody asking it to that avoids any stigma from companies requesting fit help. Catherine judge is a Columbia University law professor. There's always a concern that if you're looking to the Federal Reserve as opposed to the market for financing, you might be revealing something about how desperate you are for financing the. If companies have all the financing. They need at reasonable rates with the Fed buying their bonds. They won't need to lay off more workers. Frank. No Taff is chief economist at core logic. The purpose is to help. These companies remain good employers in the marketplace stand on their feet, not lay people off, and hopefully bring people back into the into the workforce, and if a company isn't able to stay on its feet and defaults on the bonds the Fed. Chairman J PAL can turn to an emergency fund set up by the Treasury Department to backstop the Fed. I'm Nancy Marshall Genzer for marketplace. Wall Street today stopped me, would you? If you've heard this one before? The trump administration is floating a one trillion dollar infrastructure plan. Yes, it is infrastructure week again. That was all traders needed to hear? We'll have the details when we do the numbers. The big unknown in this economy. Well one of them anyway because there are a lot of big unknowns to be honest, is as jober swallow. Sit in Sabrina piece. What is going to happen when expanded unemployment benefits run out at the end of next month, even with tens of millions more people than usual, still being out of a job. Unemployment is policy worry over in China as well the official statistics. Say the jobless rate is around six percent the real figure, almost certainly a good deal higher market Blazers Jennifer pack set out to discover China's unemployed or getting along and it turns out. They're doing better than you might think. John Lee is an assistant manager at this entertainment center in Shanghai, some three hundred miles away from his home village in Eastern Province during the pandemic. His salary was cut then later, he was placed on. Faced with these setbacks, he did something you might not expect. He started planning a vacation. Home and I have not traveled. Since I started working in since there were no part-time jobs opening during the pandemic, I started looking at places that were not badly affected by the coronavirus at a time when most of us are vacationing on our couch, jangly packed hat, some swimming shorts, and he flew to southern Hainan. Island a genuine had had. Mostly spent my time at the Beach Surfing Swimming and shopping that one week vacation cost him a thousand dollars about a month salary for him, but less than the average monthly wage Shanghai. So, how does someone who hasn't been paid? A regular wage for four months afford a last-minute beach vacation well savings. I'd usually put away three to four thousand a month about half his take home pay the latest available data on savings in China comes from two thousand sixteen. It shows the average household put away thirty six percent of disposable income in the US. It's just seven percent. UTING is an institution in China's. Who May province? She saves regularly for her daughter's education, her own retirement and medical care for her elderly parents China may be Communist, but under its healthcare system still have to pay, and a big illness can bankrupt a family home unclog. Oil in the US, you can have a comfortable life with a job house and a car, but even if you have all that in China, we still feel insecure. You says she usually saves at least forty percent of her salary, which has come in handy during the pandemic. She was furloughed for three months then when she returned to work, her boss cut wages by so much. She resigned, but she felt it was a layoff in disguise like most people who move to the cities for uting has returned home to the countryside to plan her next step. Easy or harder mindset has changed a bit with the pandemic. I will definitely save more in the future. Luckily, the apartment she's living in was paid off just before the pandemic hit with a little help from her parents in law, the Bank of Mom and dad is usually the first place. People in China's seek help, even though most are big savers themselves a recent marketplace Edison poll showed that two out of five Americans survey didn't have two hundred and fifty dollars to spare say for an unexpected medical bill at the end of the month, a statistic that shocked ut. Or you can. Noah I don't believe it. I think most Chinese families can easily take out two hundred fifty dollars without a problem. I can shout high gently is back at work. Managing the entertainment center even got a bit of a race. Ordinary Sunday you're. On the phone with his mom, he tells her he just got paid, and we'll be sending her money that she will save on his behalf as usual Jonglei says mom brags to her friends about how much he saves a habit. She says that will fend off poverty and perhaps even attract bride. In show. Hi, I'm Jennifer pack for marketplace. Small businesses have been hit hard by this quarantine. Black owned small businesses especially hard. Some of them though are getting a boost now. Thanks to some twenty first century word of mouth. That's the setup for today's installment of our series my Connie. My name is Rita Goldie. I live in draper Utah and I own sheer ambrosia bakery. I specialize in lava. Make the Best Bach- Lavar. You've ever tasted in your life. So I'm working I guess it was last Tuesday and. All of a sudden, my instagram, I share Ambrosio, so my company Instagram just blew up. And I thought what the heck is going on so I took a few minutes and found that there were tons of people that were essentially organizing and sending out. Lists Of. BLACK OWNED BUSINESSES IN UTAH. My first thought was you know. Is this charity like? Do I want people to buy from me for the sole reason that I'm black? You Know No, I want people to buy my product because it's good. I was all over this valley, Delivering Bach Lavar and meeting the most amazing people. All of them more white. All of them wanted to support. My business I didn't feel like it was charity. They want to support black members of the community, and what better way to do that than to support their businesses, because we want to have thriving businesses where we put in a good day's work and make a product and my case that people enjoyed. Now I'm thinking like. Wow! If this business continues one day soon I'll be able to be a homeowner again and home. Ownership is huge when it comes totally wealth one of the major ways to close that gap between blacks and whites Istra, home ownership and this last year when I had to sell my house, it was one of the most depressing times in my life because I thought you know. Did I do the right thing trying to build this business to the point where I had to sell my home? I feel like a miracle has happened because I tell you what three months ago. I would have never in a million years. Guests that my business would be doing is just booming right now. That was read a mcgarvy. She's in draper. Utah also makes the best Bach- Lavar ever or so we're told. This series only works with your help. You know, and especially, even if you're not a great cook. You can hook us up marketplace dot. com. Up We were were largely able to keep it out. It being that global pandemic, but first. Let's do the numbers. Dow Industrial's up five twenty six today, two percent, twenty, six, thousand to eighty nine, the Nasdaq gained a hundred and sixty nine points, one point, seven percent, Ninety, eight and ninety, five, the S. and P. Five hundred advanced fifty eight points about one point, nine percent, thirty, one and twenty four. Would that big retail sales number. That maybe wasn't so big. That's telling you about. Retail stocks were among the big gainers gap through eight point, four percent today Coles advanced eight point nine percent bonds fail yield on the tenure keynote, zero point seven five percent listening to marketplace. This is marketplace. I'm Kai Ryssdal. The board of regents at Texas A and M University has voted to create a one hundred million dollars scholarship fund to address diversity on that systems, eleven campuses. Specifically, the school said to make the university better reflect the population of Texas, which is twelve percent black black students though are less than four percent of the population at the Texas ainum system's flagship campus. From Austin Texas, marketplace and Euler spent his day figuring out how that was all going to work Texas am student Felix read grew up in an upper class suburb Houston. He's now a senior studying finance ams main campus in college station. He's white and describes his college campuses social bubble. We've grown up with the same type of people. At least that's been my experience and we become accustomed to. To those same people once we could say, he would like to see more people who don't look like him on campus. It'll prepare him for the workforce. He says right now, too many am students have a hard time understanding the civil unrest after the police killing of George Floyd Minneapolis Elaine Mendoza heads the board of regents, Texas. She says with the country, so focused on social inequities. There's. There's a sense of urgency to diversify the student body. There's no better time to get it off the ground to make the tough investment and right now the university is planning to Dole out the hundred million dollars in diversity scholarships over ten years, Julie Keller Executive Director of the higher learning advocates says more schools will be rolling out new diversity initiatives like Texas. A and she says the money. Money is a good start the key though is watching that implementation. The key is to watch how it plays out hello students are not only being reached, but how they're being served through rather time on campus. In other words, scholarships can change your demographics, but once you improve the numbers than it's about inclusion Keller says schools have to make their campuses feel more welcoming to more people. In Austin Texas, I'm Andy Ula for marketplace. Back in two thousand thirteen. We went out to Sioux Falls South Dakota for a series about this economy that were working better at the local level than maybe might have been apparent by looking at the national headlines. And one of the companies we visited back then was a small business called grand prairie food. It makes eggs and stuff hotel, breakfast, buffets and package breakfast sandwiches for grocery and convenience stores. It is also literally down the road like a mom and a half from that Smithfield pork processing plant that's been one of the hot spots of the pandemic. That might have heard about anyway. Anyway, Kirtland back is the CEO of grand. Prairie Foods Missile Adamec talk to you again. Hey, good to talk to you as well. Tell me, would you? What this thing look like on the way in for Grand Perry foods well, it's been quite an adventure out here in the heartland and actually when when things started to unravel back in March across the country I. I was on vacation with my wife. In South Africa and we, we literally landed the week that were really starting to heat up and I got back home just in time to have about eighty percent of our purchase orders cancelled. Because you know as you know, were pretty heavily involved in the hospitality and travel industry with our Food Service Operations and those folks were shutting. Shutting down very quickly about that time and decide, they didn't need it anymore. Yeah I remember when we were out there a number of years ago. I remember the whole. The whole big scrambled egg thing it was. It was quite the Quite the Senate machinery. I'm so, what are you? What did you do? How did you react as you work to save Your Business? Well. We're still working to save our business because you know you don't replace eighty percent of your business, overnight and Fortunately since you've been here, we established a second operation that we move that food service business to and the plant that that that you had visited when you were out. Here has turned into a packaged goods facilities, so you know as has happened with a lot of people as food service, a survey operations wound down. We're able to ramp up packaged goods business, so so that facility is running six days a week, two shifts day and and We're really pumping out a lot of stuff to rebuild our business with package goods. Did you do the whole PP to get some operating cash and SORTA? Taizhou over? We did the very fortunate to have qualified for that, and that quite frankly was a lifesaver it would. This would be a difficult road without that, so we're really grateful that that opportunity was there. I want to ask you a lot in back about the epidemiology of this thing, because you are in Sioux Falls, as is that big Smithfield pork plant Yeah, how worried are you? How worried were you when this was starting about your employees I imagined? Probably you have family. Members of your workers who work online and that that was a rough couple weeks. I tell you what because you know. It was shortly maybe a week or two after you know, we started shutting things down that that happened, and so you know we all just still kind of learning how to deal with this virus, and and how to keep it out of our facilities and keep people safe. And you're right. We do share a lot of family members with workers over there. We had kind of heard rumors early that they were having some issues over there and. So, we were tooted fortuitous enough that. we actually any employees who was associated with lived with family member whatever of an employee at Smithfield to stay home and. Do that for two weeks and so we were fortunate that we did have some of those folks that got positive results, but they weren't in our facility at the time that that happened, so we were were largely able to keep it out so in say a year would business going to be like at a grocery foods. Yeah, so you know as I stated it early we we lost about eighty percent of our business day one. We've recovered probably close to half of that with the other. Other package goods and You know we feel optimistic that within the next six to twelve months were. We'll be doing okay. You know we're not going to be doing as well as we were before with full operations going, but we feel pretty good about where we're going with our business. Well Best of luck to you Kirtland back. He's the owner and CEO actually of Grand Prix foods out in Sioux falls south goes missile back. Thanks for your tonsure. Appreciate. You Bet thanks! I appreciate the time. Despite the note on the way out today, about which it'll be interesting to see what the number is for this year giving USA's out with its annual report on charitable giving in this country, just shy of four hundred fifty billion dollars for two thousand and nineteen. That's a record in non inflation adjusted dollars. It's up a bit more than four percent from a year earlier. That of course was with a growing economy and the stock market that was shall we say overperforming circumstances that don't necessarily attach right now. Are. We gotta go here. Though is you're a moment of economic context for this? What to Tuesday right? Yes, sorry forgot. It's a book end of sorts to Sabrina piece on retail. Specifically in that reminder that extended unemployment benefits. Run out at the end of next month from a survey by YouGov this data the thing most people spent their extra money on. Fund retail and pent up consumer, demand bills and rent utilities. Are Digital on-demand team includes. Lou. Olga Oxman Beth Perlman Erica Phillips. Brian Ronan and Tony Wagner Attorney says is our executive director of on demand. I'm result we will see you tomorrow, everybody. This is, APN

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