Marketplace - Visa-seekers in China weigh in on the U.S. election

Episode Date: October 18, 2024

Dozens of people wait in line at the U.S. consulate in Shanghai in hopes of scoring a visa. One worry on their minds? Whether the outcome of the U.S. presidential election will ease tensions between the two nations or heat them up. Plus, why builders are breaking ground on more single-family homes and fewer apartment complexes, and how mobile homes became an integral part of the American housing stock.

It's Friday, just 18 days till you know what? Can we just take a breather? From American Public Media, this is Marketplace. In Baltimore, I'm Amy Scott in for Kai Rizdal. It is, yes, Friday, the 18th of October. Good to have you with us. I know the economy never takes a breather, so we have plenty to talk about in our weekly wrap, which is where we'll start today with Heather Long at the Washington Post and Kate

Davidson at Bloomberg. Hi you two. Hi Amy. Hi. All right, Hi, Amy. Hi. All right, Heather, let's start with those better than expected retail sales numbers we got this week, showing once again a remarkably resilient consumer. What did you make of that report?

I know, it just feels like another data point that isn't just good, but almost borderline hot again, looking at that data. I think what really stood out to me is this feels like the year of the mini splurge. And what I mean by that is you saw really good restaurant sales again, you know, people going out to eat every now and then with their family. You saw pretty good numbers for clothing purchases, back to school shopping for the kids or whatnot. And the other one that jumped out to me,

and these are all discretionary items, was personal care was up. I have just learned about this Utah hair trend where everyone's getting these long hair extensions. So those are the types of little splurges that people are doing, and that's a really healthy sign for the economy. This treat yourself economy is back,

but it's sort of these mini splurges. Yet another trend I have somehow missed out on. Kate, how about you? Any surprises or anything stand out to you in this latest report? Yeah, I'm going to continue on the trend that Heather is talking about. Notice that also miscellaneous store retailers were up, which includes like florists and pet stores. So again, going along with this idea that I think people are splurging, you know, not on huge things like cars and furniture.

Some of those more durable goods were still, were down, the recent report showed, but it's in the other places where people seem to be, you know, remember a few years ago, a couple years ago, we called it revenge spending. It seems like people are still doing it, right? They're still, they're going out and they're, you know, they're spending on things. And it's just kind of amazing considering where we thought we'd be at this point, which was that people would be sort of tapped out. So how evenly distributed is this spending though? I saw the AP had a piece today about how a lot of this is driven by the wealthiest Americans who are more flesh with higher incomes, of course, stock market gains, home equity. Heather, is it evenly shared, this splurging? It's a really good point, Amy. As that great AP piece showed with some research from Federal Reserve data, Americans who earn

$60,000 or less are still strained. And you can see that in the bank earnings that happened this week as well, that a lot of middle income consumers and certainly the upper middle income are doing just fine. And that's why the bank earnings part of the reason they're doing very well. But you're right that folks at the bottom have really had a rough go the last few years with rental prices going up and trying to adjust to this new world of inflation. The one encouraging note, if we can have a little bit of positivity here, is we are really starting to see wage growth way outpace inflation. And you know, 4% wage

growth in the past year versus 2.4% inflation. If we can see some more months like that, that's really going to start to help people. You just saw that big victory for the dock workers big jump in their wages, for example. So I hope that continues. Yeah. So, Kate, let's turn to a part of the economy where, you know, people are still struggling housing. As we've reported, mortgage interest rates have actually been rising. And I think many were hoping they would start to fall when the Fed started cutting. What's going on there? Yeah, I do think that some of that is a little bit that the Fed has gotten much better over the years at signaling well in advance where things are headed. So we started to see some

relief in rates really in August, kind of ahead of that big September meeting where Fed officials ultimately did cut interest rates by a half percentage point. And since then, so a lot of those expectations were built in. We didn't see a big reaction necessarily right after that. But what's been happening since then is as we've been talking about the economic data, the signs that the economy are sending is that things are pretty good. There was some concern over the summer and ahead of that Fed meeting that perhaps we were starting to turn a corner. Things were looking a little bit shaky.

The jobs report was concerning. It didn't look that great. But what we've seen since then is more evidence on the other side. And so I think there's been a sort of open question. How much is the Fed going to cut for the rest of the year? How much lower are rates going to fall? I think there's a possibility that mortgage rates

in particular, maybe there's a little bit of room this year, but maybe they're not going to fall by a huge amount heading into next year. I think it's a little bit unclear how much the Fed is going to feel the need to respond to what's happening in the economy with you know what what what seemed like maybe rapid rapid rate decreases it just might be a little bit more measured and gradual. Well overall as you've pointed out the economy is is still quite strong and we've seen all this evidence of a soft

landing really but Heather you had a piece last week in the Post looking at how you know the the mood just doesn't correspond. As you say, it's been one of the best economic years in many people's lifetimes, but you wouldn't know it from talking to folks or hearing from, you know, campaign, the campaign trail. Why do you think it's so hard to feel good about this economy? It's such a great question. The best answer that I have right now is that most people actually want prices to fall. They want deflation.

And what we've seen instead is disinflation. We've seen the rate of inflation come down, but we've seen a little bit of prices falling. Obviously, gas prices are down about 40 to 50 cents from where they were a year ago. Apple prices are down about 40 to 50 cents from where they were a year ago. Apple prices are down, but by and large you don't actually want to see all the prices in the economy going down. That's usually a sign of a recession, but if you're still really frustrated about these high prices, it's hard to understand that what you really need is for your wages to keep growing a lot. Mm-hmm. Well, and you think we'll see more of that as the year goes on? I hope so.

We've seen a year and a half now of wages outpacing inflation, and so I don't know, Amy, it's always difficult to make predictions, but I would say whoever wins the presidency next month is gonna be really lucky because if this trend continues the next six months to a year from now I think people are really more and more people are going to feel this and tangibly see that they are net better off. All right Heather Long is at the Washington Post. Kate Davidson came to us from Bloomberg. Thank you both so much and have a great weekend. You too, Amy. Thanks, Amy. Wall Street end of the week on a high note. We'll have the details when we do the numbers. Coming back to housing, depending who you ask, we're short now anywhere from one and

a half million to more than four million homes. To be precise, that's housing units for sale or rent. And the latest residential construction numbers from the Census Bureau show that the pace of home building has been mixed. While a lot more new homes were finished in September than a year ago, those just getting started and permits for future construction both fell. But as Marketplace's Sabri Benishaw reports, the type of home we're talking about makes a difference. Homebuilders are not feeling particularly thrilled about starting on new apartment

buildings these days. Groundbreaking on buildings with five units or more was down almost 16 percent in September from the year before. Permits were down more than 17 percent. The reason I think we're not seeing as much enthusiasm among multifamily developers is that we still have a significant amount of multifamily construction in the pipeline. Danielle Hale is chief economist at Realtor.com and home builders don't want to build a ton more apartment buildings because they are already building them and they are kind of over it.

In fact, if you look at the number of multifamily units that's being completed in the most recent data, it was up almost 42% compared to a year ago. 42%. So with all that new building, Hale says rental vacancy rates are kind of in the normal range of 6 to 7%. There's not a huge incentive to keep on building like that. But also, it is hard right now to pay to build a big new apartment building. Jackie Benson is an economist with Wells Fargo. Banks have reduced credit access for multifamily developers and fairly large margins. So multifamily developers are having a hard time finding financing. Banks, she says, see the word commercial real estate and it's just a no for them.

It's just higher risk. But over in the world of single family homes, things are different. Builders broke ground on more of them in September than they did a year ago, about 5.5% more, partly because they're just easier to do than apartments and cheaper and faster. Single family homes can be delivered on a smaller scale.

You can kind of roll units out by the individual units or by the dozens. Paul Habibi is founder of Grey's Lake Advisors, a real estate expert services firm. When you have a volatile interest rate environment like we've had, builders might prefer this shorter timeline that allows them to get quicker returns. Well, Sfrago predicts that as interest rates and mortgages come down, we should see construction of both single family homes and apartments bump up in the next year or two. In New York, I'm Sabri Beneshor for Marketplace. The rebuilding is just beginning in western North Carolina after the devastation brought by Hurricane Helene. That part of the state is home to more than 9,000 farms and the agriculture industry is

expecting losses in the billions of dollars. As the waters recede and the power returns, farmers are beginning to pick up the pieces. Marketplace's Alice Wilder went to talk to some of them. For the past week, every day has held a little victory at Hickory Nutcap Farm. There was the day team members got power back at their homes. I turned on so many lights. I know, right? Yeah. Turn it on lights, dude!

And the day operations manager Virginia Hamilton discovered that the farm's piglets made it through the hurricane. I was so worried about them in the storm, because those pigs were like a day and a half old. We're beside a makeshift pig pen, put up after Helene blew away the farm's fencing. That's a couple of Idaho pasture pigs named Noodle and Waffle.

They're the piglets' moms. It turns out they knew exactly what to do in the storm. They really just kind of like kept their babies inside and everyone lived, which is awesome. Hickory Nut Gap Farm is in Fairview, North Carolina, a high elevation flood plain in the Blue Ridge Mountains. They raise pigs, cattle, and poultry, but it's also a popular spot in the fall for apple cider and barn dances. It hitting at harvest time is like an extra punch in the gut. Autumn is the peak tourist season for Western North Carolina.

Visitors flock to see the changing leaves, check out Asheville's food scene, and visit picturesque farms. The Hickory NutGat Farm Store in Butchery looks like a barn, and it's one of the things that makes this an agritourism destination. That can be like more than half of our revenue squeezed into the last quarter of the year. So two weeks of revenue loss there is pretty massive for us. For people in Fairview and the surrounding small towns, the store is a place where you can drop in, grab some groceries and catch up with neighbors. But it's been sitting closed since the storm. Hamilton told me the store usually brings in about a million

dollars a year in revenue. And with Asheville's restaurants closed, which were a big source of business for the farm, they're banking on neighbors coming to the store. But Hamilton isn't sure how many will show up when the store reopens the next day. I really don't know what people are going to want to buy. We're talking next to the store's empty fridges, which are running for the first time in two weeks. Many residents here still don't have power or running water. Are people going to be cooking? Are they going to want to do dishes?

Like I was doing dishes in the creek. It's romantic for a couple of days and then you're really ready for paper plates. The next morning, Gerald Mollisbury and his wife, Catherine, arrive at the store 20 minutes before opening, eager to shop. I speak with them while they wait excitedly in the gravel lot outside. We drove down here from Black Mountain this morning where we were pretty hard hit by the flood. Black Mountain is about 20 miles from the farm. Catherine Malsberry says there's just the one grocery store in town. So they're running really, really low on food and nothing fresh. So we came down to get something we could barbecue. What are you planning to grab once you get into the store?

The mind reels, pork chops, a couple of steaks, some hamburger. Once the doors open, the Mollsbury's gleefully fill their baskets. No receipt or the energy here shifts from nervous to excited as more customers flow into the store sharing stories from the storm and stocking up on groceries. It's a good sign for the farm but for Virginia Hamilton and the team at Hickory Nut Gap Farm there's plenty of work ahead. There's a lot of damage that happened that's not going to be covered by insurance. There's probably some agricultural program out there that I can tap into. But her internet isn't even back yet, so she can't look into that.

Today is about getting the store up and running and tracking down some pigs that have escaped from their makeshift pen. In Fairview, North Carolina, I'm Alice Wilder for Marketplace. Coming up. Trailers were part of people's lives. Trailer homes, that is. But first, let's do the numbers. The Dow Jones Industrial Average rose 36 points, about a tenth of a percent, to finish at 43,275.

The NASDAQ added 115 points, six tenths percent, to close at 18,489 and the S&P 500 gained 23 points, 4 tenths percent, to end at 5864. For the week, the Dow ascended almost 1 percent, the NASDAQ increased 8 tenths percent, and the S&P pocketed almost 9 tenths percent. CVS Health is warning that its upcoming earnings report is going to fall short of expectations and it replaced its CEO. CVS Health worsened 5.25%. Netflix subscriber growth has been slowing down, but the streaming service reported its most profitable quarter ever and beat analysts' expectations.

Shares brightened more than 11%. Bonds rose. The yield on the 10-year T-note fell to 4.07%. You're listening to Marketplace. What do they say? More money, more problems, and way more questions? From your kids, right? But not to worry. Million Basilion, a podcast from Marketplace, has you covered. I'm Bridget Bodner and with my co-host, Ryan Perez, we take you and your young ones on grand adventures and comedic sing-alongs to answer all the questions your little ones have about money. Join us as we explain how banks work,

why name brands are more expensive, and what happened to Black Friday sales. Listen to Million Bazillion wherever you get your podcasts. This is Marketplace, I'm Amy Scott. The upcoming U.S. election isn't just on the minds of people here. The outcome matters beyond our borders. Case in point, China, one of our most important trading partners. The U.S. and China traded more than half a trillion dollars worth of goods last year. And that could change depending on who ends up being the next US president. Former President Trump has said he'd raise tariffs on Chinese exports, and

Vice President Harris could extend the current policy of cooperation in some areas, protectionism in others. So how do people in China view the election? Our China correspondent Jennifer Pack visited the visa line outside the US consulate in Shanghai to find out. It can take months to get a visa appointment at the US consulate. Even with a time slot hundreds of applicants still wait at least an hour for the interview like data scientist Andy D Dong. He's renewing his American work visa, and says neither Trump nor Harris is a good choice. But...

If Trump was selected, that may be worse. Worse, he says, because after Trump was elected president in 2016, he added scrutiny on Chinese students studying in fields that may impinge on American national security. This has continued under the Biden administration. It's very tough, specifically for some major like chemistry, biochemistry, biology, artificial intelligence and computer science. Trump is also not good for Chinese exporters, says salesman Huang Tao,

who is applying for a business visa. He works for a company that manufactures flooring, and their products are subject to an extra 25 percent tariff in the U.S., imposed during Trump's first term and kept in place by the Biden administration. Trump has already said he will increase tariffs on Chinese exports again. Still, Huang Tao says the U.S. will remain a key market for his company. There's still demand for our products, and anyway, American consumers bear the cost of

the tariffs in the end. Although he doesn't want Trump to win, his colleague Wang Yong does. Because Trump is a businessman, and he's all about maximizing benefits. But did China extract a good deal during Trump's first term? Hard to say, says Wang Yong. It just gets a feeling from the domestic media that China favors Trump more. He gets more coverage. But most people here aren't paying attention to the U.S. election.

It doesn't matter whether Trump or Harris get elected, says a woman who says she can speak freely in China. Still, like many people worried about official retaliation, she only gave her surname, Huang. China is very strong now. By which she means China can handle whoever ends up being the next US president. In Shanghai, I'm Jennifer Pak for Marketplace. To tie off that housing thread we've been pulling through the show, we thought we'd bring you one more story on the theme.

Over the last couple of months of our series, Adventures in Housing, we've been bringing you stories on the history of different home styles. For today's installment, we're taking a look at the American mobile home. My name is Edward Krahmanikov and I'm a public engagement specialist and placemaker here in Washington, DC, and I have a background in historic preservation. Mobile homes developed out of the trailer that you could attach to your car and take with you wherever you wanted. And as they grew in size and luxury,

they began to be called mobile homes. They were used for many reasons. One was for travel, to see sites that were otherwise quite far away, and where the infrastructure for tourism wasn't quite developed yet. Trailers really came into their own during World War II, and that was the boom time for them. If you build an Ambulance factory, let's say, you also have to provide housing for the people that

are building the factory and for the people that are working in the factory. With trailers, you can have housing pop up overnight, which means that the factory goes online much quicker. Mobile homes continued to be a part of American culture for a very long time, especially into the 1950s. Many from that generation, many from the baby boomer generation spent their early formative years in trailers. And so we have very strong memories, I think, in culture today.

During the run of I Love Lucy, the two stars filmed the long, long trailer. It all started when Lucy told me she wanted to spend our honeymoon in a home away from home. Only $1,800. And that's complete, mind you. And there's this over-the-top comedy, of course, about newlyweds dragging a trailer with them throughout America and all the shenanigans. And it was a popular movie,

but also showcased that trailers were part of people's lives. ["The Last Supper"] were part of people's lives. 22 million people live in mobile homes today. And there is a lot of misunderstanding around the word mobile in mobile homes. The vast majority of them do not move once they are sighted. These places are special for their history and they continue to be special today for offering affordable housing when there are so few affordable housing options remaining.

It's really startling to me that there is not a single mobile home or mobile home park in the National Register of Historic Places. And it's really a goal of mine to see the first mobile home or mobile home park be listed in the National Register because I think that will begin to change people's minds about them and open the door to seeing them. And for many people, that might be for the very first time. Edward Krakmonikoff at the Maryland National Capital Park and Planning Commission in Washington, D.C. Do you have a question about housing history or about your home style?

We'd love to hear from you at marketplace.org. This final note on the way out today, another sign of the continuing demand for stuff in the U.S. economy. The ports of Los Angeles and Long Beach just reported their busiest quarters ever. Together, the two ports bring in roughly a third of all U.S. container imports. Bloomberg reports the complex got a boost from businesses racing to bring in goods before potential tariff increases and those avoiding hurricane and labor disruptions at ports on the East and Gulf coasts. Dock workers at those ports returned to work after a three-day strike this month, but a temporary contract extension expires in January. Our theme music was composed by BJ Leiderman. Marketplace's executive

producer is Nancy Fargalli. Donna Tam is the executive editor. Neal Scarborough is the vice president and general manager. And I'm Amy Scott. Have a great weekend. Hope to see you back here on Monday. This is APN. I'm Kyle Rizdal, and on How We Survive, we've embedded on the front lines of a fight between the U.S. military and climate change. But that fight's not happening on traditional battlefields.

Instead, it's at places like the edge of the Arctic Ocean. Oh my God! It's a little windier out here. Just a little. On changing terrain. And sea level rises, storms like that will do more and more damage. And in state-of-the-art military facilities where I became a lab rat. We're going to drop it from 110 degrees Fahrenheit down to 34 degrees Fahrenheit. I can feel my muscles tensing, right?

Discover how the U.S. military might shape our climate future. Listen to How We Survive wherever you get your podcasts.