Business

Gold recently crossed the $3,000 mark for the first time. One reason that’s notable — it’s a sign of economic anxiety. 

Investors are unnerved over a renewed trade war and the prospects of a recession, and so they are seeking shelter from the storm. For some, gold is that shelter.

Gold doesn’t pay dividends. You can’t spend it at the grocery store. 

But it’s considered a safer place to park your money when other investments in, say, the U.S. stock market, look like they’re going south. 

“People are seeing a lot of commercials that are running. ‘Gold is at all time highs, buy gold.’ There’s sort of a mania,” said Lee Baker, president of Claris Financial Advisors in Atlanta. He has been fielding lots of client calls on this topic.

“You know, it feels like everything is falling down around us. Let’s go to something that’s tangible. It’s there,” said Baker. 

For these clients, gold just feels more real than stocks and bonds. 

It’s not just anxious investors running up the price. Central banks are stocking up, too, in hopes the investment will endure this moment of economic uncertainty. 

“Gold has this very long track record of holding its value” over very long periods of time, said Campbell Harvey, a professor of finance at Duke. Millenia, even. 

“For most investors, their horizon is more like five to ten years,” said Harvey. 

And over those shorter time periods, the value of gold can be volatile, just like any other commodity. 

Paolo Pasquariello, professor of finance at the University of Michigan, said gold is among several safe havens people flock to in times of turmoil. One of them is the U.S. Treasuries. But right now, he said they’re less appealing to some investors. 

“Whether the money that you lend to the U.S. government is going to be returned,” he said. “All of these things that are typically assumed as granted are not anymore.” 

So, Pasquariello said, some investors who would typically be flocking to U.S. bonds are buying up gold bars instead.

At the beginning of the second Trump administration, when Elon Musk was just beginning to slash federal programs and fire thousands of government workers, his electric vehicle company Tesla reported that its 2024 revenue from car sales fell by 8% in 2024, compared to the year before.

But another, smaller revenue stream rose by 54% — sales of regulatory credits. Those credits, issued by governments around the globe, have played a key role in the development of electric vehicles and in the growth of EV companies, especially Tesla.

Here’s why they exist: Some governments want people to eventually drive cars and trucks that don’t run on gasoline. These governments include California’s, which set a goal in 2020 that will require all new passenger cars and trucks sold by 2035 to be “zero-emission vehicles” or plug-in hybrids. 

To meet that goal, California gives automakers credits for each zero-emission vehicle they sell in the state. Right now, apart from a small number of cars powered by hydrogen fuel cells, those are mostly electric vehicles. The farther a car can drive on a single charge, the more credits it gets.

Each company has a quota of credits it needs to hit every year. But not all of them sell enough EVs to meet their mark. So when a car company falls short, it has another option.

“It has to buy credits from another automaker that has exceeded its quota,” said Pavel Molchanov, an analyst at Raymond James. That means “traditional” car companies “are going to be paying for the credits from the pure electric companies.”

Those “pure electric companies” are primarily Tesla, and more recently, Rivian. They generate lots of surplus credits because they only make electric vehicles.

California is not the only place where carmakers get credits like this. About a dozen other states follow its emissions rules. The Environmental Protection Agency has a similar system for vehicle emissions and fuel efficiency, and so does the European Union.

Add up all the credits accumulated from those markets, and selling the excess to traditional car companies is a pretty easy way for Tesla and Rivian to make money. It’s a lot easier than building a car.

With all the material that goes into a car, the profit margin is “only like 15%, let’s say,” said Tom Narayan at RBC Capital Markets. “But with a regulatory credit, it is 100% profit.”

That’s because the overhead needed to generate and sell credits is extremely low, Narayan said.

So historically, credits have been one of Tesla’s biggest sources of profits, said Seth Goldstein, an equity strategist at Morningstar. Especially in its early years, regulatory credits helped the carmaker stay afloat.

“When Tesla’s underlying business was still unprofitable, it often used the credits as a way to bridge the gap to profitability,” Goldstein said.

Now Tesla’s profitable, so it’s using credit revenue to offset discounts on its cars, according to Narayan at RBC. 

Rivian, meanwhile, is still losing money on its electric trucks and SUVs, so selling regulatory credits is helping keep it afloat. 

Neither company responded to requests for comment.

But both could stand to gain in the years ahead, as California gets closer to its goal of phasing out gas cars by 2035.

“Credit prices are going to start going up if these regulations stay in place,” said Daniel Sperling, director of the Institute for Transportation Studies at University of California, Davis. He helped create the current regulatory credit system when he was a member of the California Air Resources Board.

The future of these regulations is an “if,” because the Trump administration is pushing to revoke a federal waiver that allows California to set its own vehicle emissions rules. 

But car companies will keep moving toward electric vehicles anyway, Sperling said.

“Even if you gutted the requirements in California, these companies can’t afford to sit on the sideline with EV technology,” he said. “They’ve all acknowledged this is the future.”

Because, he said, battery technology, vehicle range and charging infrastructure are all improving. That’s thanks in large part to innovations made by Tesla. And Tesla has been able to innovate, Sperling said, because it’s had financial support from selling regulatory credits.

“Tesla would’ve gone bankrupt without these regulatory credits,” he said. 

And that, he said, would’ve slowed down the automotive industry’s transition to EVs.

Another indicator that economists pay attention to when looking out for a recession? Housing starts.

​When new residential construction is down and stays down, that can signal a slowdown.

​Now that’s not a guaranteed predictor. ​But new building permits last month declined 6.8% compared to February of 2024. And builder confidence for new single-family homes is the lowest it’s been in seven months. 

That’s partly an interest rate problem, as we’ve talked about on this show before. But increasingly, it’s also a tariff problem.

And here in Southern California, where there are a lot of people looking for building permits after the recent wildfires, that problem is hitting even more people than it normally would.

The tariffs are just piling onto a bigger, longer-lasting problem: homeowners don’t have good reasons to sell. 

“Why do that? You know, I’ve got a nice low interest rate. I got nice monthly payments, that’s mainly the force behind that,” said Michael Bellaman, CEO of Associated Builders and Contractors. 

Bellaman said the tariffs themselves haven’t had a major impact yet. It’s the price uncertainty that’s mucking with the industry.

“Developers or construction project owners that are thinking about pulling the trigger for a project are saying, ‘You know what, let’s wait until this settles down,’” said Bellaman.  

Just the fear of increasing prices has already started to cause problems for architect Dan Brunn, who’s working on rebuilding homes after LA’s wildfires. 

On a renovation job he’s got now, “The contractor has already basically announced that they will need to have the client buy all of these appliances today even though they won’t be brought to the site in six months,” Brunn said, because suppliers are trying to lock in prices before they go up. 

Fine, except now that stove is sitting in a warehouse, gathering dust, waiting to go in a home that isn’t built yet. 

“You can’t have products just sitting around and not being utilized and hooked up, and your warranty starts from that day, too,” said Brunn. 

A lot of construction basics could see new price pressures, said Chief Economist Ken Simonson with the Associated General Contractors of America.

“The industry relies on a lot of Canadian lumber, on imported steel, aluminum and copper,” which Simonson said is in the appliances, the electronics, the furniture, the lighting fixtures. And then there’s specialty products.

“Decorative tile comes in part from Italy and from Spain,” said Simonson. “And so if we see tariffs on the EU, those might hit those particular products.”

Architect Dan Brunn also said the alternative he keeps hearing — to buy American instead — won’t help much. Because even if, say, a stove is assembled here, he said the components inside come from overseas and face the same tariffs anyway.

We call ourselves Marketplace, so part of our job is exploring how marketplaces work, in all their forms. David Brancaccio and the “Marketplace Morning Report” team are setting out to visit in-person places of commerce, in a world where so much buying and selling has gone remote and digital. None are financial markets in a formal sense, but all markets are financial markets in a way, right? The goal is to learn the right and the wrong moves with experts.

This week: “A Business Reporter Goes to the Rodeo.” Today, we explore the food and culture of the Houston Livestock Show and Rodeo.

When you hear “rodeo,” you might think … “yeehaw.” And you wouldn’t be wrong.

But what we find here is not just one, single vibe. Houston rapper of legend, Bun B, celebrated his birthday with 75,000 of his closest friends on the fourth night of the rodeo.

Bun B performs at the Houston Rodeo on March 7. (Courtesy Houston Livestock Show and Rodeo)

And he’s not just one of the Houston Rodeo’s biggest musical acts. He’s also co-founder and co-owner of Trill Burgers, one of its food destinations. It’s set up a special outpost at the rodeo called Trill Town for this year’s festivities.

“People always think of, you know, cowboys, country music, this and that. It blends every crowd that’s out here in Houston. You see all sorts of crowds in Houston that come out here to the rodeo,” said Fernando Valladares, executive chef and another of Trill Burgers’ owners.

This is not Chef Nando’s first rodeo: He’s an entrepreneur with a lot of experience delivering celebrity-driven dining concepts into the world. Among his tricks of the trade is a focus on taste over marketing — “how we develop the flavors of the burger as a whole. Every single layer of it,” he said.

The Trill Burgers operation is also keeping a close eye on money in and money out. “Everything is ran through numbers. Everything is ran through margins,” Valladares said.

Fernando Valladares (right), executive chef and co-owner of Trill Burgers, speaks with David Brancaccio at the Houston Livestock Show and Rodeo. (Alex Schroeder/Marketplace)

And, of course, there’s logistics. With an expected 2.5 million people walking in over the three weeks here at Houston’s NRG Park, Trill Burgers has surged from one to now seven kitchens at the rodeo. Last year, Valladares had to pull everyone from one of his normal locations to meet demand. This time, labor supply equals labor demand.

“Growing pains, right? So this year, we definitely pivoted, and we knew exactly what was needed,” Valladares said.

Trill Burgers’ Truth Burger Combo (left) and Truth BBQ Brisket Fries. (Marco Torres for The Scurfield Group)

A few hundred yards east, it’s a carnival raised to maybe the 11th power. Midway? More like a runway at George Bush International. If I had the courage, I’d get a smoked turkey leg the size of my forearm. But I did get the half-a-pineapple stuffed with fried shrimp and sprinkled with Fruity Pebbles. All the fault of Dominic Palmieri with RCS Carnival Midway.

“I say, throw on your stretchy pants, and start on one end of Circle Drive on the midway, and work your way right around the corner.”

Palmieri curates everything to eat in the carnival section here. His tagline is “Midway Gourmet” but “carny economics“ is also his game.

“The people that visit us at the rodeo are struggling and working paycheck to paycheck. So as we’re trying to figure out pricing, and design and create new menu items, we try and create as much value as possible,” he said.

Hence the Texas-sized portions that are doable if you share them “family style.”

“While that may be a $16 or $17 item, when you have four or five people that can share that, that’s where you really start to save some money to feed everybody at one time,” Palmieri said.

He said that when his banker needs a state-of-the-economy check, he doesn’t wait for the government data; he calls the carny. For instance, so many of the temps Palmieri hires already have other jobs.

“People are — they’re looking for work. The biggest section that we have right now is, believe it or not, people that are employed full time that are coming to saying, ‘I need an extra 15 to 20 hours a week. I’ll work Thursday night, Friday night, Saturday night, Sunday night. Can I come in at six and work to close?'”

On the innovation front, he’s just done the U.S. launch of something that’s been going over big in Britain: “It’s a beautiful, big, tall, clear plastic cup, filled with the most delicious, ripe red strawberries,” he explained. “And then we have this cascading fountain of neverending, silky, warm chocolate.”

Palmieri (left) shows David Brancaccio the chocolate strawberry cup. (Alex Schroeder/Marketplace)

The confection came with two hard business lessons. No. 1: That syrupy silky chocolate can’t be shipped the cheaper way. Surprise: It needs to be cool, not frozen.

“When you talk about a pallet that might have been $300, or $400, or $500 a ship, is now $900 to $1,000 a ship.”

Lesson No. 2 is about the never-ending chocolate fountain that’s part of the flair. They make the fancy ones in Italy, but those units got stalled at the border this month because U.S. customs couldn’t figure out U.S. trade policy.

“Nobody knew. ‘Is there a tariff? Is there not a tariff? We don’t know what to do.’ And it took forever to clear,” Palmieri said.

Dominic is a pro with a Plan B: a less flashy spigot until the Ferrari of fountains made it through.

“It’s chocolate fountains, right? Little things that upset the market once in a while that you’ve got to work through,” he said.

Find all of our Tricks of the Trade stories here.

Sales at restaurants and bars fell 1.5% from January to February, according to preliminary numbers out Monday from the Census Bureau. 

While it’s not a huge drop, the decline may be a sign that consumers are feeling a bit more cautious about their discretionary spending.

When you feel uncertain about the direction of the economy, dining out less is an easy way to cut back on spending, per Jonathan Parker, the Robert C. Merton professor of financial economics at MIT’s Sloan School of Management. 

“You might scale back and go to less nice restaurants. You might cook in a little more,” he said.

But customers pulling back could hit a restaurant industry that’s had a pretty tumultuous few years with COVID shutdowns, supply chain issues, rising prices and staff shortages.

Emily Williams Knight, president and CEO of the Texas Restaurant Association, said the places that have survived all that are now wondering, “‘If that consumer does retreat, am I going to make it?’ And I think we’ll see some restaurants close, for sure, if traffic doesn’t pick up again,” she said.

To attract customers, restaurants need to market the contrast between another night in “Versus, ‘hey, you can come out to our restaurant, be in a fun environment,'” said Rick Miller at the consumer analytics company Big Chalk. “There’s games on TVs, the beer is flowing.'”

It’d benefit restaurants to communicate that prices are reasonable too, Miller added. After all, consumers are responding well right now if they feel like they’re getting a deal.

It’s time to write the obituary for a star of the fast fashion world. Retailer Forever 21 declared bankruptcy this week — the second time in six years. This time, the company blamed competition from foreign fast fashion companies.

After its first bankruptcy filing, we could still keep going to Forever 21 stores, because sometimes companies file for bankruptcy, they fix some problems, and they survive. 

But “the problems that brought it to the brink in 2019 didn’t really go away,” said James Gellert, who co-founded the business analytics company RapidRatings. 

Forever 21 is not bouncing back this time, he said. The company’s financial health is low, its debt is high, and customers have started shopping elsewhere.

“Many of the companies that have had all three of those problems, it then becomes a bit of a death knell,” Gellert said.

And a lot has changed in the past six years. Temu didn’t exist until 2022; Shein took off around the same time. Now, they’re both a primary reason for Forever 21’s downfall, according to John Mercer with the research company Coresight.

“Companies like Shein and Temu who are grabbing tens of billions of dollars of sales, most of that is coming from incumbent, legacy retailers,” he noted. 

That includes retailers like Forever 21. Those other places are winning out because — simply — their clothes are cheaper, Mercer said. 

Right now, demand for cheap clothes is pretty high “because Americans are feeling the pressure from higher inflation, and then they’ve offered extremely competitive prices,” he said. 

Thing is, similar companies — like Zara, H&M and Uniqlo — are still in business. While the market has been tough, some of Forever 21’s are unique.

Santiago Gallino, who teaches at the University of Pennsylvania’s Wharton Business School, said these other brands were nimbler and more responsive to changing customer preferences.

“Versus this approach where you make a big bet on a design or a style, and then you place a huge order, bring it to the market, hoping for the best, and then it doesn’t work,” he said.

Forever 21 grew really fast when it first started and bought up too much retail space all at once, Gallino added. “And that is sometimes evident on hindsight. But when you’re growing and you’re growing fast, it’s not so easy to detect when you have break the point of overinvesting and overexpansion.”

Forever 21 might not be the last brick-and-mortar chain to close this year; Coresight’s John Mercer says there are more to come because of the unbeatable prices of online, overseas competition.

From Joe Biden to Donald Trump, the vibes have shifted dramatically when it comes to energy and the environment. But even though Green New Deal aspirations have given way to “Drill, baby drill!” this country is likely to continue its all-of-the-above approach to energy. We want energy from everywhere, especially with U.S. and global electricity demand on the rise.

Price stability is a big reason to rely on a variety of sources, said Greg Upton, executive director of the Center for Energy Studies at Louisiana State University.

“Even if natural gas right now is the least-cost, kind of, new generation source … the cost to doing that if you go all in on any source — and this includes natural gas — is of course the price of that commodity can fluctuate,” he said.

So, if natural gas prices spike, it could lead to large increases in electricity prices, Upton said. But the U.S. can turn to other sources if that happens, like solar, wind, coal, nuclear and geothermal. 

And prices are more likely than a president to bring particular energy sources off- or online.

“Coal production and consumption has declined dramatically in the United States, and that’s primarily because we’re producing natural gas at a very low cost,” said Daniel Raimi, a fellow at the nonprofit Resources for the Future.  

He believes coal will continue to decline under the Trump administration. “Because of the competition from natural gas and renewables, renewables are almost certainly to keep growing,” he said.

“Will those technologies shift dramatically from today to four years from now in the overall energy picture? It’s a big ship — likely not too much,” said Morgan Bazilian, a public policy professor at the Colorado School of Mines.

He said it’s not just the energy mix that is likely to stay the course. So will some commitments to monitor and mitigate carbon emissions.

“If they’re going to sell their product to a global company that then ships it to LNG, that company wants to ensure that their supply chain is as low-emission and efficient as possible,” Bazilian said.

That’s in large part because as the U.S. sells more LNG — liquefied natural gas — abroad, the exporters will still be held to international standards.

The Federal Reserve’s interest-setting committee begins its meeting Tuesday, with its latest decision expected Wednesday. This comes at a time of economic turbulence, with inflation expectations rising, a stock market correction and changing tariff policy. All of this has resulted in an economic outlook that is more uncertain, writes Mohamed El-Erian in Bloomberg.

El-Erian is the president of Queens’ College, Cambridge, economic adviser at Allianz and the former CEO of PIMCO. He spoke with “Marketplace” host Kai Ryssdal about his view of the American economy right now. The following is an edited transcript of their conversation.

Kai Ryssdal: What is your sense of what’s being done to the American economy right now?

Mohamed El-Erian: So what’s being done is an attempt to reorganize it, both domestically and internationally. Domestically, we’re seeing major efforts going on with the government, of course. The hope is to streamline it, make it more efficient, and we’ve been promised a number of measures to deregulate the private sector. In terms of international, we’re seeing attempts at a fairer trading system. This is a really tricky thing to do, both domestically and internationally. It will involve what President Donald Trump called little disturbances in the short term, what others see as a very bumpy journey. What is completely uncertain is what the destination looks like.

Ryssdal: Reorganize seems charitable, but let’s talk about two things: the short term and the long term. In the short term, you yourself have now come out and said your estimates on the chances of a recession this year are now 30-ish percent instead of the 10-ish percent they were a couple of weeks ago. Do you recall a time when a president of the United States, through his policies, has sent the United States into a recession?

El-Erian: I don’t. This sort of thing you see in developing countries. You’ve seen it recently in Argentina, where the notion is you dismantle an existing system in order to put another one up. Think a little bit about you being on a plane and suddenly the decision is to dismantle the engine and put a new one on. It’s actually very difficult to maintain altitude when you’re trying to do that.

Ryssdal: What’s the worst case then?

El-Erian: So the worst case is that the U.S. economy slows to what’s called stall speed. So let’s give it some numbers. Coming into the year, the International Monetary Fund thought that we would grow at about 2.7%. I suspect if the IMF were to update its projection today, that number will be 2% or below. Why does that matter? Because stall speed for the U.S. economy is about 1%. Then the probability of a recession suddenly goes up significantly. If we then fall into recession, you’re going to see a couple of things happening. You’re going to see the labor market getting hit, and income is the only thing keeping people going at the low-income stages after they’ve run down all their savings and incurred a lot of debt. And businesses are going to go from “wait and see” to postponing investment programs for a long time. And in this environment and with inflation where it is, the Fed will not be able to get us out with interest rate cuts. So that is the negative scenarios that people are worried about.

Ryssdal: I want to go over that again, the idea of the Federal Reserve and what happens. Because, as you and others point out, the Fed is going to be challenged with rising inflation dynamics, right, because of the tariffs and price levels probably going up, with a softening labor market. And that is a very bad place for the Fed to be.

El-Erian: Yeah, that’s the so-called whiff of stagflation, where the two mandates of the Fed compete with each other in a negative sense. Look, if the Fed was really serious about its 2% inflation target, we would not be talking about when will the Fed cut rates and by how much? We would be talking about, when is the Fed going to hike rates? So I think when push comes to shove, the Fed will tolerate higher inflation for now in an attempt to protect the real economy. But there’s only so much the Fed can do if the disturbances are coming from elsewhere.

Ryssdal: Elsewhere, meaning?

El-Erian: Meaning, for example, what’s happening with the Department of Government Efficiency. One, it increases the income insecurity of federal employees, and when your income insecurity goes up, you spend less. Two, it is disrupting a lot of committed payments that had other commitments on their side. So we’re seeing a lot of federal contractors having to lay off people. So there’s a lot of disturbances going on the DOGE side, and then on the tariff side, when you’re not sure what the level of tariff is going to be, then you will postpone lots and lots of decisions that contribute to both current and future growth.

Ryssdal: We have had, so far, colloquially, vibes about what might be happening to the economy now. We don’t have yet hard data, and that seems to me to be a challenge, because the hard data is going to be kind of not very good.

El-Erian: So the soft data, which is survey data, turns first. And the survey data has turned in a very significant manner. It has involved people’s confidence about future prospects, about employment and about income coming down, and people’s expectation of inflation going up. Normally, it takes about three to six months for the soft data to be reflected in the hard data. So we are, call it in Month 2, of the soft data really weakening right now.

Ryssdal: Let’s get back to where we started on the way out here, and that is the idea that what President Trump is doing to this economy is also being done to the global economy. The global order is being disassembled at lightning speed. And I guess I wonder, as you talk to people around the world, as you do in very significant positions of influence, what is their sense of what we’re doing and what it might mean?

El-Erian: I think people are hesitant. They’re worried. There’s this whole notion of you cannot replace something with nothing. So they’d like to have greater clarity on where are we going after all this. What does this notion of a fairer trading system look like? So they have uncertainties both about the journey and the destination.

We got an early look at manufacturing activity this month, courtesy of the New York Federal Reserve Bank’s Empire State manufacturing index.

It surveys manufacturers in New York state about demand, input costs, employment and other measures of business activity. And in March, the index fell to its lowest level in more than a year.

Demand is lower, inventories are piling up on manufacturers’ shelves and employment levels are cooling off, according to the index. But prices on both inputs and finished products are up.

“Both of those measures rose to their highest level in a couple of years,” said Tim Quinlan, senior economist with Wells Fargo.

He called this the latest indication that tariffs are already causing friction.

“You saw it with last week’s consumer sentiment measures, you saw it with retail sales numbers, and you’re certainly seeing some softness in this gauge from the New York Fed,” said Quinlan. 

New York’s manufacturing sector includes a lot of industries that are vulnerable to tariffs.

“There are firms that, for example, are producing parts for wind energy, for solar energy. We’ve seen growth in a lot of that. But there are also a lot of staples. So we do still have auto and steel industries present in New York state,” said Russell Weaver, research director with Cornell’s School of Industrial and Labor Relations.

One factor in particular might have weighed on the index. Earlier in the month, when the New York Fed conducted the survey, Canada had threatened to slap a surcharge on energy exports to New York and two other states in response to the Donald Trump administration’s tariffs.

Richard Vogel, dean of the business school at Farmingdale State College, said that even though Canada ultimately held off, “just the possibility of it starts to weigh in on people’s thought processes and their planning.”

The Empire State manufacturing index also tends to be volatile month to month. But Kathy Bostjancic, chief economist at Nationwide, said the index can give us an early glimpse of what’s happening to manufacturing across the country.

“I went back just the last 10 years to see what’s the correlation, and it does suggest that when we see some changes happening in the New York area, that tends to be reflective also at the national level,” she said. 

Right now, Bostjancic said, the Empire State manufacturing index is pointing to a slowdown.

The number of Americans working multiple jobs reached an all-time high of about 8.9 million in February, according to the Bureau of Labor Statistics.

About 60% of those multiple jobholders are working full time, with a part-time gig in their off-hours. Others are stringing together multiple part-time jobs.

Anika Seidman-Gati started picking up shifts last spring for a pop-up restaurant in New York City. By day, she’s a therapist for students at a New York college.

She’s used to working multiple jobs and did it for most of her 20s. But after a recent stint as a server from Thursday through Saturday, with shifts that sometimes ended after midnight, she’s finding the balancing act a bit exhausting.

“Now I’m in my mid-30s, so it feels a little different,” said Seidman-Gati. “The body is very tired. Definitely not getting up off the couch on Sunday after a weekend like that.”

Seidman-Gati is 36 and makes about $100,000 at her full-time counseling job. But the $1,100 she made from one weekend at that pop-up restaurant came in handy.

Between her $2,000 rent, longstanding credit card debt and recently resumed student loan payments, money is tighter than she would hope.

“When it comes to looking at the end of the month how much money I have,  when that number is smaller than it used to be, then it definitely feels better to know that there’s a little bit of extra money coming in,” said Seidman-Gati.

According to the Bureau of Labor Statistics, about 5.4% of U.S. workers had a second job in February.

But because the government asks survey respondents only if someone had multiple jobs in the past week, it’s actually missing a lot of moonlighters.

“This 5.5% is just the tip of the iceberg,” said Lonnie Golden, an economist at Pennsylvania State University. Citing his own research from 2023, he estimates that over 20% of workers worked at least one additional job in the past six months.

Multiple jobholding used to be a countercyclical economic indicator — when growth slowed and the labor market soured, more people patched together part-time work to make ends meet.

But over the last 15 years or so, with the arrival of Uber and Taskrabbit and the broader digital gig-ification of the economy, side hustles are more common. The relationship between multiple jobholding and the broader economy is a bit murkier.

“With platform technology it’s easier for people to take on additional jobs,” said Golden. “Particularly professionals, but nonprofessionals as well.”

Economist Dean Baker at the Center for Economic and Policy Research said while rising prices may be driving some workers to take on extra jobs, he doesn’t think it’s the primary motivation. Wage gains have outpaced inflation in recent years.

But given the economic uncertainty of the past few months, it makes sense that some people are exploring backup options.

“People are reasonably being cautious if they aren’t sure that their main job is going to be there,” said Baker.

A backup plan is a big reason Stephanie Crowe started moonlighting as a real estate agent. She works full time as an office and facilities manager for a law firm in Sacramento, California.

“I’ve seen a lot of people who don’t have a parachute, you know? And it’s just kind of like, wait a second, do I have that? Am I OK?” said Crowe.  

Both Crowe and her husband work multiple jobs and collectively make about $140,000. They have two teenage children in the house. After her husband had a heart attack in 2020, Crowe started taking real estate classes.

The agent job just makes her feel more secure. And the extra income from the couple’s extra gigs is helpful. She figures she’s made about $50,000 over the last couple of years.

“It helps a lot,” she said. “You know, just being able to go buy groceries without a calculator — that’s a huge blessing.”

Crowe said eventually, she’d like to help people buy and sell houses full time.

Research from the consulting firm BCG finds that just 12% of all U.S. workers get child care benefits through their employers. Companies that offer it may have a leg up over the competition.

Policy correspondent Rachel Cohen has been writing about this for Vox and she spoke with “Marketplace Morning Report” host Sabri Ben-Achour. The following is an edited transcript of their conversation.

Sabri Ben-Achour: So there’s obviously a big benefit to employees when their employers offer child care, but what do the employers actually gain?

Rachel Cohen: You know, for a long time, employer child care, it was really seen as this sort of nice-to-have perk. Most companies didn’t provide it. I mean, most companies still don’t provide it, but that’s really started to change as employers started to realize this is actually a really important thing we need to get people to be able to show up at work, and pay attention at work, and recruit people to come to our cities and work at our companies. And that really sort of crystallized during the pandemic, when all these people had to make really hard choices between “Do I stay home with my kid as their school is closed?” or “Do I go to my job?”

Ben-Achour: Yeah. There’s a lot of experimentation right now, as you write with different states trying different things to figure out how to make employer-sponsored [child] care happen more. What are they trying and is it working?

Cohen: Yeah, a really popular one that’s emerged over the last couple of years is called Tri-Share in Michigan, and it’s drawn a lot of attention because it just sounds simple. It targets these workers in the middle class who otherwise aren’t eligible for subsidies. The idea is that employers, the state and employees will each pay a third of the cost of child care. The average cost for families dropped from $716 a month to $252 a month, and so that’s a big difference. And we’re seeing states like Kentucky and North Carolina and Indiana, they’re all taking note of this Tri-Share model and pushing versions of their own.

The problem is that it’s still really modest. It still only covers a small fraction of the people who need it, and even the eligibility for that program is relatively limited. But you are seeing many more states just thinking in terms of this Tri-Share responsibility, idea that everyone kind of has a role and a stake to play in financing this benefit, this access of care.

Ben-Achour: There is actually quite a bit of disagreement about whether employer-provided child care is even actually a good idea. What are the downsides or the objections people might have?

Cohen: Employers are not going to necessarily be prioritizing what’s best for kids; they’re going to always have their bottom line as their top priority. There’s also, I would say, just a real concern that this could create more of a divide between people who have access to certain things and people who don’t, and so there’s fear that it moves further away from the idea of universal child care.

Ben-Achour: Having reported on this, I mean, if you had to guess if 10 years from now we’re going to see more employers providing child care, what would you guess?

Cohen: There’s definitely a shift now, especially as we are seeing more companies and their remote work flexibility, so a lot more workers are returning to the office, which is putting the question of child care front and center.

For decades, importers and exporters have leaned into what’s called “just-in-time” logistics — only order what you need only when you need it, and the robust global trade network will get it to you fast.

Now, the ongoing trade war is prompting some businesses to shift to a new model: ‘”just-in-case” logistics.

Just-in-case logistics is about having a backup plan, according to international trade lawyer Schuyler “Rocky” Reidel, founder of Reidel Law Firm.

“We buy what we need, we store it, and we use it when we need to, and we don’t rely on a supply chain to get it to us immediately when we need it,” he said.

That means stockpiling extra products or parts, so you’re covered in the event of — oh, I dunno — a trade war.

Another component of “just-in-case” logistics? “We’ve seen a big increase in a product that’s called ‘trade credit insurance,’ and that’s essentially protection for customers in the event that a customer defaults,” said David Kinzel, a senior vice president focusing on the political risk practice at the global insurance and risk advisory firm Marsh.

Kinzel said his team used to barely spend any time on these types of insurance products. Now, with the trade war, it takes up about two-thirds of his day.

“We’ve already seen, I’d say, an increase in business of at least 20% so far this year,” he said.

And he expects that to grow as the global trade environment gets less and less predictable.

This is just one of the stories from our “I’ve Always Wondered” series, where we tackle all of your questions about the world of business, no matter how big or small. Ever wondered if recycling is worth it? Or how store brands stack up against name brands? Check out more from the series here.

Listener Katie Shepherd from Austin, Texas, asks:

Who plays the music in supermarkets? Do they use Spotify?

The right song at the supermarket can boost sales, subliminally push you toward certain products and even elevate your mood. 

“I’ve seen people dancing or singing along to the song they like when it’s playing. I’ve done it myself too,” said Lizette Gomez, director of marketing at Vallarta Supermarkets, a Hispanic grocery chain based in California.

The DJs of the grocery store world consist of retail associates and marketers who choose just the right genre of music to help set the ambiance for shoppers and employees. 

Customers are diverse, which means “two shoppers may react differently to the same song,” University of Cincinnati marketing professor James Kellaris told Marketplace over email.  

“Hence the song is much less important than the general traits of the music, such as pace and familiarity, and the traits of the customers, such as demographics and musical tastes,” he said. 

Stores often select from playlists curated by commercial music providers like Mood Media, CloudCover and Rockbot that they think will align with their customer base. Playlists might be devoted to “Latin hits” or “Top 40” songs and can contain hundreds of songs.

Music samples from Mood Music’s Latin category:

These providers sell music packages that can range between about $15 and $60 per month, depending on the type of artists and level of control a retailer wants with their playlist. 

The songs are also fully licensed, allowing grocers to play what they want, which is why they don’t resort to Spotify. The popular streaming service states its songs are “only for personal, non-commercial use.” 

“Playing music in a commercial setting just as one would at home or in a car is illegal — a violation of copyright and artists’ rights,” Kellaris said.

Picking the right song is a delicate balancing act. If a song is too loud, then the music could irritate customers, Gomez said. But if a store is too quiet, the only thing customers might hear is the sound of a tortilla press in the background, she said. 

“We want to give everybody the best shopping experience,” Gomez said. “Once you have a good shopping experience, and you have good music, you just had a good day.”

Vallarta’s marketing team utilizes Mood Media, selecting artists like the Mexican rock band Maná and the reggaeton singer Ozuna. 

The chain’s Baldwin Park location attracts older shoppers, Gomez said, so she favors more “family friendly” tunes there.

“Obviously I’m not gonna go play Bad Bunny in there, and I love Bad Bunny. He’s one of my favorite artists,” Gomez said. 

A view inside a Vallarta store. (Courtesy Vallarta Supermarkets)

Customers tend to spend less when a store is crowded, but a 2017 study from BI Norwegian Business School found playing fast-paced music from artists like Lady Gaga and Taylor Swift can increase sales. 

Music can also influence the products customers choose. A 1997 study published in the British journal Nature found French wine outsold German wine when a supermarket played French music, and vice versa. 

Vallarta will vary the style of music at a store, so that employees working eight-hour shifts aren’t stuck listening to the same genre of music all day, Gomez said. 

Retail employees commiserate online about the experience of suffering through the same song over and over again. On the H-E-B subreddit, one poster wrote that if they hear Lou Bega’s “Mambo No. 5” again, they’re “going to pull the fire alarm.” 

Wise retailers pay attention to their workers’ needs, not just their customers’. “Music affects employees as well, with potential effects on morale, absenteeism, productivity, and service quality,” Kellaris said. 

At Hannaford Supermarkets, a chain of stores in New England and New York, retail associates began to have more say in how songs are chosen in recent years, a spokesperson told Marketplace over email.

Based on employee feedback, Hannaford worked with Mood Media to come up with 10 music channels that associates could select music from, the spokesperson said. These channels include Top 40 music, country, hits from the ‘70s and ‘80s and classic tunes.

“A channel called ‘Varsity’ which features rock songs from such well-known bands as Black Sabbath has been a surprise favorite amongst both associates and customers,” the spokesperson said. 

Gomez said she listens to music all day while she works, so she understands why a good playlist is important to employees. 

“Music is a big deal to a lot of people,” Gomez said. 

Submit a form.

Chef Jacqueline Margulis runs a little French café in San Francisco’s storied North Beach neighborhood. It’s focused entirely on soufflé, both entrees and desserts. There’s Gruyere, lobster, leek, lemon, chocolate Grand Marnier and a dozen more savory and sweet. 

In a city with 28 Michelin-starred restaurants, Café Jacqueline feels like it’s from another time. There’s no website, the staff doesn’t answer the phone. Reservations are made by leaving a message. Since Margulis opened the cafe 45 years ago in a former shoe shop, little has changed. And she makes each exquisite soufflé herself — one by one. 

At age 88, almost 89, she’s whisking, beating, folding for five hours a night. It’s a wonder, especially because she fell and broke her shoulder just a few months ago. And now a fresh obstacle: the eggs. A case of eggs from Margulis’ supplier went from $75 a year ago to $230 now, more than a 200% increase. She raised prices, $5 more per soufflé. So far, she says, not a single complaint.

One wonders, though, when will the chef put down her whisk?

“I don’t want to fall into my eggs, you know. I don’t know when I’ll hang my apron. It’s part of you, and yet you have to give it up,” she said.

A lemon soufflé stands tall at Café Jacqueline in San Francisco. (Mary Beth Kirchner)

Mortgage rates have fallen in seven of the last eight weeks. The downward-trending graph for interest on new home loans has got to be at least a little encouraging for buyers and sellers heading into spring.

This week, the average 30-year fixed-rate mortgage did edge up marginally to 6.65%, according to Freddie Mac. Still, that’s down from the most recent peak of just over 7% in mid-January. Remember, the rate topped 7.75% in 2023 as inflation spiked and the Federal Reserve hiked short-term rates.

What’s behind the latest easing of mortgage rates? And how’s that — along with other market dynamics, like high home prices — likely to impact the spring housing market? Depends whom you ask.

“When we asked people to describe their local housing market: ‘doomed,’ ‘inflated,’ ‘crazy,'” said Erika Giovanetti at U.S. News & World Report, which just released its spring homebuyers survey.

What’s most striking?

“The disconnect between where homebuyers want rates to be and where rates actually are,” she said. “It is just simply unaffordable to buy at current rates and home prices for many, many people.”

Mortgage rates have edged down lately, said Zillow economist Orphe Divounguy. Plus, “buyers have more options than they had a year ago — and it’s the most homes for sale of any February since 2020,” he said.

But, remember, all real estate is local.

“What we’re seeing here: a frenzy of activity, very limited inventory and multiple offers, said Israel Hill, a broker in Portland, Oregon. “Those that can afford it are just saying, ‘OK, you know what, I’m going to make my move, I’ve been waiting for too long.”

But at the national level, the U.S. News survey found 4 out of 5 buyers won’t act until rates fall further.

“A quarter of those who are waiting want to see rates below 5%. That is not forecast to happen at all in 2025,” said Giovanetti at U.S. News.

“It’s challenging, to say the least, to figure out what direction mortgage rates will move in,” said Guy Cecala at Inside Mortgage Finance.

He said right now, mortgage rates are falling for a not very favorable reason: “The stock market tanking, as a result of the Trump administration’s economic moves, particularly the tariffs.”

He said any improvement in the economic outlook could push mortgage rates up again. His best guess is that rates settle close to 6% later this year.  

And as for holding out for the rates we saw a few years ago?

“Three or four percent mortgages? I don’t think we’re going to see that,” Cecala said, in the foreseeable future.

Growing up in the Chinese countryside in the 1990s, Cathy Guo couldn’t afford to buy anything American, until she got to college. It was a Kentucky Fried Chicken meal.

“I had a part-time job then. I remember how good the KFC sundae tasted, but then immediately regretted it because I worked hours just to afford that meal,” Guo said.

She upgraded her consumption habits to iPhones after entering the workforce in 2010, when trade between the U.S. and China was booming.

“I used to buy iPhones. I’ve had the iPhone 4, 5, 6 and 7.”

However, the U.S. buys far more from China than the other way around. That trade deficit was $295 billion last year. President Donald Trump has called the trade relationship unfair and said he wants Chinese consumers to buy more. That would increase American exports to China and perhaps mean that more goods produced in China would be purchased there, rather than exported to the U.S. But getting Chinese consumers to spend more is no easy task.

When Guo became a mom, she pivoted her spending, focusing on her child. She bought Dutch milk powder, higher-quality meat at Sam’s Club and even a trip to Shanghai Disneyland, where ticket prices alone for a family of three would run about $250.

Then, Guo lost her office job in Shanghai.

“I said to my daughter, ‘Mommy doesn’t have a job now. Can we spend less? If we go to the movie theater, how about we don’t have a big meal afterwards and just eat noodles?’” she said.

High unemployment, trade tensions and the property crisis have made people spend more cautiously.

Consumption contributed 45% to China’s economic growth last year, down from 58% just before the pandemic. Domestic demand continues to be weak. In the first two months of this year, China’s imports took an unexpected 8.4% tumble. In February, the consumer price index decreased 0.7% from a year earlier, signaling deflation.

A KFC poster in Shanghai. KFC used to be beyond the reach of most Chinese people, especially those in the countryside. But as consumption rises, American fast food has become more affordable. (Charles Zhang/Marketplace)

Officials have subsidized so-called cash-for-clunker programs for people to trade in and upgrade anything from cars and fridges to cellphones. 

“What they’ve done so far in terms of boosting domestic demand is always seen as underwhelming by market participants,” said Kelvin Lam, senior China economist at Pantheon Macroeconomics in London.

However, he said investors shouldn’t be surprised by that if they pay attention to statements from China’s leader, Xi Jinping.

“He prioritizes China development by putting all the resources in narrowing the technology gap between China and the U.S.,” Lam said.

So far, Chinese officials have resisted providing cash handouts to consumers. Even during the COVID pandemic restrictions, the government gave tax breaks to companies, allowed employers to defer social security payments and encouraged government firms to cut rents for individual business tenants.

Chinese officials have long preferred to help companies instead of consumers, according to the China director for the Eurasia Group, Wang Dan.

“They believe that companies can provide [a] long-term, steady stream of income, and if you subsidize consumers, they tend to become lazy. [Officials] enjoy using this phrase: ‘We’re not going to raise lazy Chinese,’” Wang said.

A poster at a Shanghai electric bike shop advertising the cash-for-clunker subsidy program. Consumers can trade in their old bikes and upgrade to newer models at a discount. (Charles Zhang/Marketplace)

However, some economists say Chinese leaders need to take a comprehensive approach to boosting consumption, such as stabilizing the housing market, increasing incomes and strengthening the social safety net.

Consumption is seen as key to China’s economic success because traditional economic drivers, such as infrastructure investment, is near saturation. Most Chinese cities have enough roads and high-speed rail lines.

Another pillar of the Chinese economy, exports, is under increasing pressure. The U.S. imposed new tariffs on all Chinese exports this month, bringing the punitive tariffs to 20% so far this year. The European Union has also imposed tariffs, albeit lower than the U.S. and Canada’s, on Chinese electric vehicles. Chinese manufacturers have been accused of overproducing and getting rid of excess inventory on global markets at low prices and wiping out local competition.

“The Chinese are saying that’s not true, but from the data, it is true,” Lam said. “So they have been exporting deflation to the rest of the world in the last year or so.”

Despite the challenges, China set its economic growth target for 2025 at “around 5%.”

Premier Li Qiang said in a government report this month that domestic demand should be a key driver of growth. “We will vigorously boost consumption and investment returns and stimulate domestic demand across the board,” Li said in Beijing.

A poster in Shanghai advertises coupons to get restaurant discounts, but residents would have to enter a lottery to win them. (Charles Zhang/Marketplace)

However, there were no details other than doubling subsidies for the existing cash-for-clunkers program to $41 billion.

Boosting consumption is all the more difficult because Chinese consumers tend to save a lot for education, housing, retirement and health care. By some estimates China’s citizens save over 30% of disposable income.

“Basically, China has got very limited social safety net,” Lam said.

As for newly out of work Guo, she and her family now rely solely on her husband’s salary. “My husband used to save about 70% of his salary, but now that I don’t have a job, we spend almost all of it,” she said.

The money goes mainly to things like their mortgage, car loan and children’s education, and less to buying products, whether Chinese or American. 

Additional research by Charles Zhang.

For the last few years, schools and food banks around the country have been able to get fresh produce and meat from small, local farms, thanks to federal funding. But that’s about to end. 

The U.S. Department of Agriculture has announced it’s canceling the two Biden-era programs that paid for all that fresh, local food because it says they “no longer effectuate the goals of the agency.” 

That’s more than a billion dollars’ worth of contracts for small farmers, ranchers and fishermen.

Running a small family farm that turns a profit isn’t easy. Emma Johnson’s family has owned one for decades — she’s a fourth-generation farmer. She and her husband run Buffalo Ridge Orchard with her parents on 80 acres in Central City, Iowa.

“We grow a lot of apples, and we do grow some pears, and then we grow from A to Z all of the different vegetables,” Johnson said.

Recently, they’ve been selling about $65,000 worth of their produce to local schools and food banks through these USDA programs.

“And this season, we were anticipating for those numbers to grow because the budget had grown,” she said.

Instead, there’s suddenly no budget for those programs, which means Johnson and her family are scrambling to figure out where else they can sell all those fruits and vegetables.

Their contracts with schools and food banks would have been about 25% of their income this year.

“That’s jobs, that’s staff, that’s our ability to even have a profit for the season,” Johnson said.

In Pennsylvania, E. Nichole Taylor said she’s also scrambling to figure out how the Great Valley School District, where she’s a food service supervisor, is going to fill the sudden hole in its budget.

They’ve been using federal funding to buy local meat, milk and produce for school lunches.

“The meals that our students receive today are not the meals that I received when I was growing up,” she said.

Now, Taylor said, they may have to shift their budget around — cut somewhere — so they can afford some fresh, local food. But?

“There’s some things that we’re just not going to be able to offer our students,” she said.

Families that rely on food banks will see a difference too.

Paco Vélez runs Feeding South Florida, and he said buying locally has changed what they can offer.

“You name it, it’s grown here in Florida,” he said. “We get asparagus, we get broccoli, we get strawberries, we get blueberries.” Plus eggs, salmon and yogurt.

Without this USDA funding, the food bank will have less variety and just less food, period.

“As the government starts pulling out, then it leaves a huge gap,” Vélez said. “So the first thing that came to mind is, how are we going to do this? How are we going to ensure that as an organization, we’re doing everything that we can?”

In our latest series, “Unlocking the Gates,” Marketplace Special Correspondent Lee Hawkins explores the lasting impact of housing discrimination.

One tool once used to enforce housing discrimination was racial covenants. These were contracts added to property deeds that prevented Black people and other people of color from purchasing, leasing or occupying a property. These clauses were officially outlawed in the 1968 Fair Housing Act, but their impact can still be felt today.

Hawkins joined “Marketplace Morning Report” host David Brancaccio to discuss the lasting legacy of racial covenants. The following is an edited transcript of their conversation.

David Brancaccio: I’ve seen them, you’ve seen these — these covenants, even though they’re illegal, they’re there in some cases, and you think they still play out in widening the gap between rich and poor when you’re thinking of it by race?

Lee Hawkins: Oh, 100% because those initial limitations that were put on the Black community played out through the generations, because the attitudes were still there, and there was still a real resistance to sell land to Black people. I spoke with Minneapolis realtor Jackie Barry, who explained it to me this way:

Jackie Barry: If you think about a family being excluded from homeownership, that means now they don’t have the equity within their home to help make other moves for their family.

Brancaccio: Now, if you find you have a racial covenant in the deed on the house that you’re interested in buying or the house you already bought, in Minnesota, among other places, you can apply to have it discharged. But you went pretty high up in the Minnesota government, the office of the Lieutenant Governor Peggy Flanagan, to hear about what’s being done to address the structural problem that underlies this, right, Lee?

Hawkins: Yes, and I think it was critical to do that, because one of the early pioneers of racial covenants policies was a lieutenant governor of the state of Minnesota. Here we are, in today’s times, talking to Lieutenant Governor Flanagan, and so she’s made this a cornerstone of her administration.

Peggy Flanagan: Our legislation that we passed in 2023 was $150 million directed at first-time homebuyers and Black, Indigenous and communities of color. We see that, I think, as a down payment, right, on the work needs to happen. I think when we increase homeownership rates within our communities, it’s a benefit to the state as a whole.

Brancaccio: And you’re talking to realtors with their experience on the ground actually showing homes to prospective buyers, and they had some interesting ideas.

Hawkins: Yes, there were a variety of things that Minneapolis area realtors talked about around the time of George Floyd to actually bring more equity in the real estate industry. Realtor Jackie Barry, who we heard from earlier, sits on the board of Minneapolis area realtors, and here’s her prescription:

Barry: We need to increase our training and development. In Minnesota, a realtor has to complete Fair Housing credits every two years, meaning that they’re getting some type of education related to learning about housing discrimination and how to avoid it, how to represent clients equitably, understanding rules and regulations around fair housing.

Hawkins: One of the things I love about this series, David, is it just doesn’t talk about the history and the problem of racial covenants, but it talks about how there were people, even in those times, who did the right thing, and it wasn’t necessarily about race, it was about justice. And I think that that’s what’s important here. We can’t change the past, but we can certainly shape the present and the future. And all of these people, in some way, have committed themselves to this issue and to talk about it in modern times and acknowledge the modern implication was what we wanted to do for people to know how this affects so many people across the country.

Marketplace Morning Report’s “What’s That Like?” series is exploring the odd, unusual and downright weird jobs that help prop up our economy.

Nick Polimeni grew up listening to tales of his father’s racing adventures from the late ’60s. At an early age, Polimeni was involved in car culture, starting with RC car racing. Eventually, a career around his passion took root.

Fast forward and Polimeni now works as a vintage race car mechanic for GMT Racing in Connecticut, where he maintains old — very old — race cars and readies them for prime time.

Nick’s father, Ron, drives at the Sports Car Club of America national championship at Daytona in 1969. (Courtesy Nick Polimeni)

“I always joke that had I not gone into this line of work, I might’ve gone into something like archeology where I’m delving into the past and trying to preserve history,” Polimeni told Marketplace.

Some of the unique cars he’s helped preserve date back nearly a century, and include a 1931 and 1934 Alfa Romeo Grand Prix and a reconstructed Lancia D50 — all owned by the same customer. However, the Lancia D50 holds the prize for Polimeni. “That was probably the absolute top car. That’s like, you know, pinnacle,” he said.

When it comes to sourcing parts for these cars, sometimes the team needs to get a bit creative. GMT Racing acquires parts from around the world, but on occasion the parts they need just aren’t around, so they make them from scratch using metal from their shop.

While the unique hobby of vintage car racing may sound appealing, there is a real cost barrier. But Polimeni believes people’s interest in these unique machines is unlikely to fade. 

To pop the hood on this unique line of work, click the audio player above.

If you want to know how low-income Americans are feeling, just look to Dollar General. Its CEO Todd Vasos said in the company’s earnings call this week that its “core customers” — people who earn under $40,000 annually — are struggling even more this year.

Customer traffic fell last quarter. But if you can’t afford Dollar General, where do you go?

Dollar General’s customers are struggling and end-of-month store sales are slowing, said retail analyst Matt Todd with S&P Global.

“Lower income households, who are their core customer, are running short on cash,” said Todd.

Plus, there’s inventory loss. Something called “shrink” is high.

“Elevated shrink, I think, is another sign of people struggling at the lower end of the income spectrum,” said Todd. “… third-party theft is the largest component of it. People stealing things.”

Dollar General’s CEO said customers have already cut out discretionary purchases. Now they’re going without some basic necessities, too — partly by having a more strict definition of “necessities.”

“The more income you have, the more we tend to consider things as necessities,” said Nick Pretnar from the Laboratory for Aggregate Economics and Finance at University of California, Santa Barbara. He says take something like fabric softener. Higher income consumers might call that a necessity.

“But someone who is lower income, they’re going to cut out something like fabric softener more quickly than, say, they cut out laundry detergent,” said Pretnar.

Pretnar said Dollar General won’t want to absorb price increases from tariffs, which means price-sensitive consumers who shop there might bear a higher share of that burden this summer.