Grass is always greener

On the show today, we've got earnings, we've got inventories, and hey, what team are you on? Team AstroTurf or Team Real Grass? From American Public Media, this is Marketplace. In New York, I'm Kristen Schwab in for Kairis Dahl. It's Thursday, August 27th, and it's good to be here with you. If you're a regular listener of ours, you might notice that we tend to avoid spending a ton of time on air talking about any one company in the AI race. It all feels kind of early, uncertain, and intangible. And there have just been so many deals happening between firms, many of them circular, which we have talked about on the show. Well, today we are going to take a few minutes to talk NVIDIA, because for the first time ever, we're going to be talking about NVIDIA. And we're going to be talking about NVIDIA. However, the AI chipmaker has offered a long-term growth forecast, something pretty rare in the quarterly earnings cycle. In its Q2 call yesterday, NVIDIA said it's expecting revenue to grow by 70% next year. No, you don't need to clean your ears out. Yes, I said 7-0. Compare that to the 44% growth analysts expected, and you got to wonder, how accurate is any company's forecast, especially one that's eager to prove itself? Marketplace's Samantha Fields has more. Companies don't have to issue long-term guidance, but Philip Stockin at Dartmouth's Tuck School of Business says it's valuable when they do. It's vital to investors, to analysts, to you and I as retail investors to understand what NVIDIA are doing. Knowing what companies expect can help investors decide whether and how much to invest, though Stockin says it is important to take their projections with a grain of salt. There is evidence that forecasts tend to be slightly up. Not much, but they are biased, because I believe that forecast is attainable. But typically, Todd Kravitz at the University of Connecticut says forecasts are in the ballpark. Revenue is a pretty straightforward number. It's easy to interpret, and it's easier to forecast. And so that's why I would expect it to be pretty reliable. If a company's forecast is not reliable, Amy Hutton at Boston College says there can be big consequences. If you make a statement like, we expect 70% growth, and you don't achieve, 70% growth, and you don't, along the way, update investors about why you're not going to achieve it, you could get sued. Your stock can also take a hit if you drum up high expectations and don't meet them, which is why Hutton says it's actually common for companies to under-promise. They will spend time throughout the year walking down analysts' expectations, so when they get to that final year-end announcement, they beat the expectations. And get a bump in their stock price. I'm Samantha Fields for Marketplace. We got a peek at some Census Bureau data this morning on how much stuff businesses have sitting on their shelves, or in the back of their stores, or at warehouses. That data is officially called inventories. And for months, inventory growth had been slowing down, two-tenths of a percent here, three-tenths of a percent there, until a sharp turn in July when inventories slowed down. Marketplace's Sabri Beneshour has more on the great summer shelf-stocking and what it tells us about the economy. Storing stuff on shelves and in warehouses costs money and time, and businesses don't like to do it, if they don't have to. Plus, what if nobody buys your extra stuff, then what? For the past year or so, businesses have been especially skittish about it and have not been stocking their shelves very deep at all. I think a lot of that has been driven by, you know, a lot of the policy uncertainty over the last 18 months. Michael Pierce is chief U.S. economist at Oxford Economics. Tariffs. War. New tariffs. New war. Makes for kind of twitchy business planning. But it may be that businesses are now deciding, you know what, it's been long enough, let's do it, let's buy more stuff. Wholesalers are having to increase their inventories because their sales have just been so remarkably strong this year. Jason Miller is professor of economics at Oxford Economics. Professor of supply chain management at Michigan State. Through June, sales were up 17% year over year. He says a lot of that is for AI and data centers. Machinery and computers and electrical goods. But those things are not the whole economy. And it may be that elsewhere in the land of inventories, retailers are stocking up again, not because of AI, but because of the latest trade war. Stephen Brown is chief North America economist at Capital Economics. We obviously had a. We had a period where tariffs were a bit lower and then we're kind of approaching periods where they're likely to be higher again. So that may have caused some tariff front running. But anytime you have extra stuff sitting on shelves, whatever it is, there's a nagging question. Are people going to buy it? Gregory Dacco is chief economist at EY Parthenon. Some of these imported products are simply not being sold. Businesses don't like that. Time is money, yes, but so is shelf space in New York. I'm Sabri Beneshour for Marketplace. Wall Street today, I mean, NVIDIA. We'll have the details when we do the numbers. The NFL season kicks off in less than two weeks. On Wednesday, September 9th, we'll get a Super Bowl rematch between the New England Patriots and the Seattle Seahawks. Seahawks will get the hometown advantage. During this summer's off season, though, both teams' stadiums kept busy with football of another kind, World Cup soccer matches. For those games, the stadium's artificial turf was replaced with natural grass, something required by FIFA. Five other NFL stadiums also did this for the World Cup. But now all of them have reverted back to the field. Fake stuff. That's frustrated players who've, for years, voiced their preference for real grass. Marketplace's Henry Epp reports. Seattle Seahawks defensive tackle Leonard Williams spent a chunk of the off season in Seattle as it hosted the World Cup. And I actually went to Belgium versus USA, which is pretty cool. Williams was telling this to reporters in late July. That game he attended was played on grass, replacing the artificial turf he and his teammates usually play on. So a reporter asked him, Does that make you wish they had grass for you guys? Yeah, for sure. I think the whole NFL felt that way. You know, we obviously prefer to be on grass. It's just less impact, better on the body and things like that. 92% of NFL players agree, according to a 2024 poll conducted by the NFL Players Association, their union. The union has cited studies in the past that show injury rates are higher on turf, though the NFL points to a third-party study that found injury rates in the 2025 season were about the same on turf. on both turf and grass. But there's one overarching reason that nearly half the stadiums in the league use turf. I think it comes down to money. Jeremy Duru is a law professor and director of the Sport and Society Initiative at American University. For one, he says grass is expensive. You have to grow it, install it, replace it when it gets torn up after a game. Plus, NFL stadiums are used only a few days a year for pro football, so many of them host a lot of other events. In the offseason, you can have concerts coming in. You have monster truck pulls or whatever, conventions. All of these things produce revenue. And if you do those things on your grass field, you're going to rip it up. Turf, on the other hand, can more easily handle, say, a Beyonce concert. So stadiums with artificial fields can bring in more revenue. The NFL argues there are other factors teams have to consider when they choose whether to use natural grass that are specific to each stadium. Nick Pappas is the NFL's field director. Those being architectural, differences such as shade structures, retractable roofs, domed and enclosed stadiums. It's trickier to maintain grass indoors. There's also climate. Extreme heat, extreme cold, potential for snow and precipitation. And proximity to sod farms. Having a sod farm nearby to grow the field's grass is really important, Pappas says. And not all stadiums are close to one. The further you have to truck grass, the longer that it's rolled up, the, the more risk you inherit in that grass not being the standard you expect once it gets to the stadium. All those considerations, Pappas says, dictate which surface teams choose. And he notes the NFL and the Players Union have a joint committee that sets the safety and consistency standards for both turf and grass. There's weekly contact between the NFL and the NFLPA working towards surface improvement. But in a statement to Marketplace, the Players Union says, the World Cup showed that the technology, expertise, and resources exist to use grass in every NFL stadium. To comply with FIFA, grass was installed in domed stadiums in Dallas and Atlanta, and in cooler climates like Seattle and New England. And the union has a chance to push owners on this issue in its next collective bargaining agreement, which comes up for renewal after the 2030 season. Nellie Drew is a professor of practice in sports law at the University at Buffalo. It's certainly a term and condition of employment. It's something that the league would bargain about. Now, that doesn't mean that they're going to give in. Drew says to get grass across the league, players may have to give something up. And owners, Drew says, are pushing to add an 18th game to the NFL season. And so maybe it's a situation in which the players say, OK, but if you want us to beat up our bodies for another game in another week, then you better do it on grass as opposed to artificial turf. Players and the league may have to decide whether that's a tradeoff they're willing to accept. I'm Henry App for Marketplace. All week, we've been bringing you stories from our series, Robots Ate My Taxes. A look at how AI's impact on the workforce could jeopardize the income taxes governments rely on to, you know, pay for roads and schools. Today, we hear about how the tax system in America actually incentivizes employers to favor AI instead of human workers. Here's more from David Brancaccio, Marketplace's senior correspondent for Future Effects. Alyssa is a professional wordsmith. For one year and two months, this 30-something worked, past tense, for a global company that makes toys for kids. Amazon listings, Wayfair listings, press releases, you know. A whole nine yards. But soon, AI. First, it was the boss asking her to try using ChatGPT. Alyssa found it took longer to check for mistakes and plagiarism than to just write the stuff herself. Then the boss just handed some of Alyssa's to-do list to the bot. Like, oh, we're just testing. OK. Then a video meeting where she thought she'd get a raise. Nope. Since we're restructuring, we no longer need you anymore. She left with the strong impression the toy company would try instead of her, more AI for its writing. Alyssa asked us to use just her first name, so speaking to us doesn't hurt her chances of finding a new job. Three years later, she's still looking for a role that pays like that one. That's like a huge chunk of our income, because we were hoping to, right after the wedding, based on what we were saving with my income, buy a house. Yep, she was about to get married. Thank goodness Alyssa's dad jumped in to pay for her wedding dress, given the reduced financial circumstances. But two incomes. Two incomes, down to one, brought austerity. And she's paying less tax because she earns less. What Alyssa didn't know is that AI has a structural advantage over humans like her. Employers pay the government extra taxes for the privilege of employing people. Ryan Abbott is a professor of law at the University of Surrey School of Law in the UK and an expert on technology as a partner at the law firm Brown, Nary, Smith & Kahn. My university would love. My university would love to replace me with a chatbot, and they will as soon as the student satisfaction scores are about equivalent. But when they do that, one of the unanticipated advantages they get is they pay less in taxes to do it. Social security plus Medicare equals 7.65%. You don't have to pay AI, for starters. Now, there is a way to fix this in the spirit of human versus AI justice, and I should point out that what Abbott is about to say is just a thought experiment. and not a formal policy proposal. Eliminate or reduce payroll taxes on humans. And so this has the advantage of leveling the playing field. If we killed off payroll taxes in America, where would federal, state, and some city governments find money instead? There are plenty of ideas we've been exploring in this project. Here's one, taxing robots. When Bill Gates warmed to a robot tax back in 2017, many economists were aghast, arguing when you make tools more expensive to use, you end up with less efficiency, lower profits, and less competitiveness. Yet, Nobel laureate Joseph Stieglitz at Columbia doesn't dismiss this out of hand. I'm not overly averse to some kind of tax that would slow down the pace of job disruption, make the companies recognize that there are social costs of this job disruption. I wouldn't put it just on the AI, but I would put it more broadly on the job disruption. On the problems associated with job disruption. Technology law expert Ryan Abbott proposes you get at this by taking away company perks, like. Special incentives businesses have, for example, on capital depreciation. And investors would hate this, but maybe even a penalty. A tax to discourage automation, per se, might have some economic inefficiencies in it, but it might have some offsetting social goods that make that valuable. Social goods like. Using money to pay people to retrain so they can thrive in an AI economy. I'm David Brancaccio for Marketplace. You can see more of David's reporting on our YouTube and Instagram accounts. The handle is Marketplace APM. Coming up. I ship more of my corndog mix to Canada than we use here in the United States. There really is an economy for everything, even corndogs. But first, let's do the numbers. The Dow Jones Industrial Average added 105 points to tenths percent to finish at 53,569. The Nasdaq surged 411 points, 1.6%. To close at 26,541. And the S&P 500 found 55 points, 7 tenths percent, ending at 77.30. Samantha Fields reported on chipmaker NVIDIA. Shares climbed 8 and 7 tenths percent. Meanwhile, Salesforce announced an expanded partnership with Anthropic on Wednesday. Salesforce soared 22 and 6 tenths percent. Bonds fell. The yield on the 10-year T-note rose to 4.67%. You're listening to Marketplace. This is Marketplace. I'm Kristen Schwab. We're far from the official start of fall, and definitely far from any sign of fall weather, at least here in New York. But some of the consumer-driven signs are here. I saw a Halloween display up at my local Target the other day. Starbucks started selling the pumpkin spice latte this week. Let me editorialize for a second to say I agree with Kai on this one. I do not understand our cultural obsession with PSL. Anyways, retailers are pushing for more. They are pushing us to think about fall. Meanwhile, behind the scenes, they're already thinking deeply about winter, their biggest sales season of the year. To take the temperature on how small businesses are feeling, we called up Anne Robinson in Greensboro, North Carolina. She's the owner of Scottish Gourmet USA, which sells, what else but Scottish goods. Anne, it's great to talk to you. And nice to talk to you, too. Well, there's a lot happening in the economy these days. What is coming up most for you? What are you spending most of your time thinking about as a business owner? Our chief focus right now is making sure that we are ready to handle the business that will happen in what we call Q5. Q5 is Thanksgiving to Christmas. It's when we go from shipping 500 to 700 boxes a week to 1,500 to 2,000. 2,000, maybe even more. So I'm hiring, we're training, I've got lots of merchandise. So we have to be ready to handle that and to maximize the business that we can actually pick, pack, and ship. Yeah. Are you also experiencing rising costs as a business owner? Absolutely. I have a container that's docking on three. Friday in Wilmington, North Carolina. It cost me $1,200 more this year than it did last year to bring that container across the ocean. My catalog was printed with my shipping expense in it. It's done. And then there's the value of the U.S. dollar, which right now is taking a real hit. And that is affecting me in a very big way. Wow. So you planned first. You planned for a specific amount of shipping costs. You planned for a specific exchange rate. How long ago did you plan for these costs? When did you, you know, make the finalizations on those catalogs? And how big of a gap are you going to have to close? I placed the bets on the merchandise in June. I estimated what the cost of the dollar was or the value of the dollar was going to be at that time. And I said, I'm going to close it. I set my prices at a certain exchange rate. What we've done is we've gone out and cut our costs on a huge number of supplies by really shopping the market. So ice packs are going to be cheaper for me this year than they were last year. Liners for the boxes. I'm buying them in multiple pallet quantities. to get my price down. I mean, I've been looking everywhere for savings because I don't want to have to increase my prices. Yeah. Well, you still have a 10% tariff right on your imported goods. What happened to the tariff refunds? Did you get your money back? I've gotten about 80% of our money back. I'm still waiting for money back from FedEx, UPS, DHL. And I have one liquidated entry that is in that limbo state. But in the meantime, I'm filing a protest for that entry. You know, you're celebrating your 20th year now. And after all the ups and downs that got you here, 21st year. So you're celebrating your 21st year now. After all the ups and downs that got you here, how are you feeling about not just this holiday season, but the future? I think there's still a market for our niche of Scottish food and gifts. But it's really hard to make money in this environment and the uncertainty that's been created by the cost of fuel, the cost of utilities. I mean, rents have gone up here dramatically. And of course, the tariffs. Anne Robinson owns Scottish Gourmet in Greensboro, North Carolina. Anne, thanks for catching up. Thank you. It's wonderful to be with you, Kristen. It's been 100 years since Route 66 officially became part of the federal highway system. It eventually became the first fully paved transcontinental highway in the U.S. We're traveling the Mother Road this week and checking in with some businesses along the way. Yesterday, we stopped by a New Mexico motel. Today, we're grabbing a bite to eat. Hello, I'm Josh Waldmeier, the third generation owner here at the Cozy Dog Drive-In in Springfield, Illinois. And we're 205 miles from the New Mexico Motel. And we're going to be driving 25 miles south from the start of Route 66. My grandfather opened this establishment when he got out of the military service back in 1946. Of course, I grew up in the restaurant. But after I graduated high school, I went out in the private sector and tried to see what I could do. And I came back probably about eight years or so later, around 2006, decided to see if my mom needed any help. It felt good. So I decided to stay around taken over in 2013. This year, in particular, with the Route 66 100th Centennial, we are seeing a huge increase in traffic, and some of our sales are up to almost 30 percent. We have people come from all over the world, from Italy, Germany, Australia, Japan. Actually, when I was setting up for this interview with you, I had some Germans come in that I was talking to and taking pictures with. I put a new t-shirt order in each month, and I'm still running out of sizes before I can get the next order in. Yes, our prices have gone up. At the beginning of this year, we experienced an increase on our hot dogs. They went up almost 15 percent, which probably came out to close to almost a nickel. But yeah, it's when you sell hundreds of thousands of them, it adds up. I don't know if I'm the number one seller, but I'm the number one seller. I'm the number one exporter of corndog mix, but I can tell you for sure that I ship more of my corndog mix out to Canada than we use here in the United States. My history with dealing with shipping to Canada, it's changed in the last 15 years on what you have to go through to get the stuff in and out. I've already shipped everything I'm going to ship this year to Canada, so we're all set and okay till next year. So we'll just have to wait and see what the world decides to do next I think my grandfather would be very pleased with how I've handled Cozy Dog and continued the business. I was fortunate enough to know my grandfather before he passed, so I have very fond memories of him telling me about business and how to treat people and just the things you need to do to keep a business going and just make people happy in the world. Us Waldmeyers, we just trudge through and we make it happen. That's Josh Waldmeier carrying on his grandfather's legacy at the Cozy Dog drive-in in Springfield, Illinois. Have a Route 66 business you think should be on our list? Write to us at marketplace.org. This final note on the way out today, saw this in the Washington Post, the cost of higher education, like a lot of other things, has been ballooning in the last couple decades. The average cost of college according to the Education Data Initiative is more than $38,000 a year. So now more schools are offering three-year degrees. At least 70 schools in the U.S. offer or are considering offering shorter paths to graduation in hopes of sending students into the workforce earlier and with less debt. Our daily production team includes Andy Corbin, Mika Ellison, Maria Hollenhorst, Sarah Leeson, Sean McHenry, and Sophia Terenzio. Real Story is the supervising senior producer, and I'm Kristen Schwab. We'll see you here tomorrow. This is APM.