Inflation just won't quit

The data confirm what our gas tanks and grocery bills say. Life keeps on getting more expensive. From American Public Media, this is Marketplace. In New York, I'm Kristen Schwab, in for Kyra's doll. It's Tuesday, November 10th, and it's good to be here with you. Here are some words we might use to describe the consumer price index that came out this morning. Sticky. Robust. Resilient. Words we're happy to attach to other data releases. Words we don't love when we're talking about prices. Headline inflation was up four-tenths percent in October, less than September's increase, but higher than expected. Core inflation, that's minus food and energy. It wasn't much better. Core rose three-tenths percent, also higher than expected. Now, we don't exactly know what that means for the one-year picture. The Bureau of Labor Statistics didn't publish a CPI in October of 2025 because of the government shutdown. But economists think overall inflation right now sits at about four percent year over year. Marketplace's Mitchell Hartman breaks it down. There's almost nothing going in the right direction with inflation, says Andrew Davis at Bryn Mawr Trust. Yeah, headline above expectation, core above expectation. Even core services, excluding energy, that's running a little hot. Here's what Thomas Ryan at Capital Economics calls it. Shocker of a CPI release. And here's why. Gasoline prices rose one percent on the month. We knew that would lift headline inflation. Why I describe it as a shocker is inflation pressures were a lot broader than energy. The economy's been absorbing the surge in oil prices from the Iran war since early spring. But now, says Boston College economist, We're getting more of the bleed through of the higher input costs into other costs in the economy. Thomas Ryan says that starts with soaring diesel prices. Which is the lifeblood of agriculture and transportation. That starts to feed through to higher prices on the shelves. And so in October, food inflation picked up. So did services. Vehicle insurance, hospital services, video and audio, which was driven by price increases for Disney Plus and Hulu. Meaning the bleed through from high energy prices is now bleeding around to services that aren't much affected by the price of oil. This more generalized inflation, says Ryan, reflects broader price pressures from a tight labor market and overall strong demand from businesses and consumers. That also gives businesses pricing power to sustain higher inflation, says Andrew Davis. First principles around it is businesses are able to push through higher prices. So if they're able to, they're going to. There's also upward pressure on housing costs now because of high mortgage rates and the dearth of homes on the market, says U.S. bank economist Bethann Bovino. Small supply for a new home to buy. Where do they go next? To rentals, pushing those prices up as well. With headline inflation now running at around 4 percent and average annual wage gains just above 3 percent, Bovino says the typical consumer. is falling behind with every paycheck they get. I'm Mitchell Hartman for Marketplace. Higher than expected inflation means the Fed is all but guaranteed to raise interest rates at its next meeting in December. Wall Street, of course, does not like the idea of money getting more expensive. We'll have the details when we do the numbers. As Mitchell mentioned, inflation was hot in October, thanks in part to energy prices. But looking ahead, there's some evidence that consumers may see some reprieve in November. The price of West Texas Intermediate hovered around $86 a barrel today. Down from its recent high of $100-plus. Gas is back below $4 a gallon nationally. And diesel prices are ticking down, too. But as Marketplace's Elizabeth Troval explains, they're all facing slightly different market conditions. Crude oil is the central ingredient used to make diesel and gasoline. Still, it's its own market. And despite the Iran war, that market is finding ways to get closer to normal. Bringing prices down, says. The oil market right now is pretty well supplied. The U.S. has had success getting oil out of the Strait of Hormuz over the last two months. The election of Democrats to Congress last week also lowered the oil risk premium. The oil market has broadly viewed the U.S. midterm election result as constraining Trump, reducing his ability to escalate the conflict against Iran. But diesel? Diesel is a different story. It really has nothing to do with the midterms. That's Tom Clancy. Closa with Gulf Oil. He says he's seen diesel prices tick down, despite all the refinery shutdowns in Russia constraining supply. Here's what happens in November. Demand isn't really terrific because it's after the agricultural season and it's too early for the real winter demand. And supply tends to build. But a meaningful and sustained drop in diesel prices could be a while, since it will take many months to restore the lost refining capacity from attacks in Russia. and the Middle East, according to Debnell Chowdhury with S&P Global Energy. We don't expect the damage to be repaired in a meaningful way until next year. And then we're kind of estimating that we don't reach pre-war run levels until some point in 2028. As far as gasoline, what consumers pay at the pump, seasonality is also playing a role in the drop in prices. We're entering the part of the year where. where seasonal demand declines significantly because we're not in the summer months anymore. It's a little bit easier to produce winter grade gasoline versus summer grade gasoline. Consumers may catch a break this November, though the wars that are driving up energy prices aren't over. I'm Elizabeth Troval for Marketplace. We are checking the calendar here. Yep, 17 days away from Black Friday, which is traditionally the start of the holiday shopping season. Though I hear these days people start shopping as early as August. If you're distinctly not one of those people and you're a little less organized, maybe you could outsource your shopping to AI. Meta, Google, OpenAI and others are rolling out their own agentic shoppers that can do holiday gift hunting for you. Or at least that's what these companies claim. Mia Sato wrote about this for The Verge. Mia, thanks for joining. Yeah, of course, anytime. So if I wanted to hand my holiday shopping over to AI this year. How would that work and how far can AI go? Well, it might not surprise you to hear that AI would be happy to take your credit card information. And you can do a lot in theory. You can use AI to research products, compare this moisturizer and this one, or what's the best selling toy right now and what are the reviews. And on some retailers, you can actually have the agent add things to your cart for you. And even check out and actually purchase products. So yeah, where it is all connected, you can pretty much hand over all of the labor to an agent. And I mean, in theory, it can do all of it for you. Are people actually handing over that much personal information to these bots? We, you know, don't have super clear numbers on how many transactions are actually happening through AI agents. Some companies who have come out and said, like, we are not really processing that many agentic transactions at all. We're talking, like, some companies have said a few hundred. Some have said, like, in the single digits. So it's happening. But I think all signals point to the scale being still pretty small. So we're mostly talking about searching, winnowing down ideas. How much hand-holding does that take? Because, like, in my experience, I think sometimes. Sometimes your results, right, are only as good as whatever you tell the AI agent in the first place. Yeah, the way I described it was shopping with an agent feels like looking through a pinhole. You give it instructions, and it only looks for that. It can sometimes look wider, but you really need to give it feedback. You know, I don't like these options. Can you look for something more like this? And some of the agents do kind of learn your preferences. You can tell them, you know, save this information for later. But as humans, we change our minds all the time. So I found that it is. It can be quite tedious, actually. You know, on the other hand, you ran an experiment where AI maybe performed too well. Tell me about your experiment with the site The RealReal. Yeah, so The RealReal is a secondhand luxury fashion site. And when you put something in your cart, The RealReal puts it on hold for you for 20 minutes, and it makes it so nobody else can buy the product. And a few weeks ago, I realized I could have Meta's Muse agent add 10 or 20 items to my cart all at once. And then I told Muse, when the 20 minutes expires, go do that whole thing again. Just re-add it to my cart. Effectively, what happened was nobody else was able to buy those 20 items for like hours and hours while I did this. I asked The RealReal for comment, and a few days after my story published, they actually changed that and closed that loophole. But it kind of shows. It shows the future for humans shopping online when all these AI agents are swarming our favorite websites. It's a lot of power to give a person an AI agent. Yes. Yes. Well, I want to also look at this from the retailer's perspective because, I mean, even your experience with The RealReal, there is a question here about quality of customer experience when you let an agent in. How do retailers and brands feel about this? I think they're kind of probably of two minds. On one hand. On the other hand, every company that we order from online is adding their own AI features. On the other hand, there is a risk for retailers and brands to let agents browse their site and buy things on the person's behalf. A huge part of Amazon's bottom line is serving ads to people on the platform. And if an agent is browsing instead of a person, those boosted listings, you know, the agent doesn't care about that. So there's a risk. There's a danger that it would eat into Amazon's bottom line. Another part is, you know, humans, when they browse, they're not just, you know, only buying the one thing they came for. They might get an offer at checkout or there might be suggested products. And companies want that. Do you use AI to shop and how, what are sort of your best tips and tricks for where it actually helps? I do use AI to research things. For example, like there's one ingredient. In skincare that I know my skin doesn't like. And so sometimes if I find a product I'm interested in, I might ask an LLM to, you know, look at the list of ingredients and tell me if there's anything I should be concerned about. And then, you know, what are other products that similarly don't have this ingredient in. But the agents are only as useful as retailers let them be. And I think as you see these retailers and sites kind of closing their doors to agents, the usefulness starts to come in. But, you know, I would probably never want an agent to buy anything until I okay it. And also, like, I want to go look to see if I can find a better deal myself. So maybe I'm a little bit of an edge case that I'm just too particular. Hey, I'm there with you. Mia Sato is a features writer at The Verge. Thanks, Mia. Anytime. Thank you. Coming up. Beautiful apple called Enterprise. Great apple. I'm more of a Honeycrisp fan myself. But first, let's do the numbers. The Dow Jones Industrial Average fell 157 points, three-tenths percent. To close at 52,231. The Nasdaq slid 187 points, three-quarters percent. To finish at 25,065. And the S&P 500 dipped 29 points, four-tenths percent. To end at 7520. AI giant Anthropic, maker of Claude, is targeting a valuation of up to $1.4 trillion in its upcoming IPO. The company is planning to sell shares priced at $70 to $78 each. Google, maker of Gemini. And an Anthropic investor saw shares fall more than a quarter percent. Amazon, another Anthropic investor, saw shares gain about one and a half percent. Bonds fell. The yield on the 10-year T-note rose to 4.99 percent. You're listening to Marketplace. This is Marketplace. I'm Kristen Schwab. We spend a lot of time on this show focusing on jobs and workers. But retirees are a critical part of the industry. According to the Investment Company Institute, Americans hold nearly $20 trillion in IRAs alone. For context, that's about the GDP of China. The whole point of saving money over a lifetime is spending it throughout your golden years. But it turns out a lot of retirees are saving money and instead hanging on to it. Jean Chatzky is an author and founder of Her Money. Her recent piece in The Atlantic looks at why seniors are scared to spend. Jean, thanks for joining me. Thank you for having me. So the piece you wrote starts off with a personal story. Tell me about your mom. Yeah, my mom passed away a couple of years ago. But way before that, my father died in 2005. And he left her very well situated financially. She had a paid-off apartment in Philadelphia. She had his pension. And a retirement account. And for 20 years in retirement, I watched her not spend the retirement account. She was very, very willing to spend the income that she had. She was willing to spend the Social Security and the pension. But she did not want to see the balance in the retirement account go down. Right. And when she passed away, she actually had more in that retirement account than she started with. Well, yeah, it's not the case for everyone, of course. But how common is it for retirees to live frugally even if they don't need to? It's fairly common. EBRI, the Employee Benefits Research Institute, has done some looking into this. And when they looked at a group of retirees with about $500,000 in assets not in cash, they found that they only had about $100,000 in assets that they didn't have in cash. And they found that they only had about $100,000 in assets that they didn't have in cash. 20 years down the road, they had only spent 12% of their money. And I think it's for two reasons. The first is that spending down is a fairly complicated math puzzle. By the time you get to retirement, you're likely to have money in taxable accounts, tax-deferred accounts, and maybe some tax-free Roth accounts. And figuring out how to get the money out of those accounts can all be pretty dodgy. But the emotional lift of it all is, I think, even more tedious and more problematic because we've spent such a long time working, for many of us, toward a particular retirement number that when we start to spend and when we see the numbers, start to dip, it doesn't feel like we're using the money. It feels like we're losing the money. Is this something people have always struggled with? Or is there something else happening in the economy now that's made it more common? It's a 401k phenomenon. If you think back a couple of generations, many more people had pensions. And pension checks came in every single month. Every single month until you died, just like Social Security. The problem is Social Security was never set up to replace people's spending 100% in retirement. On average, it replaces about 40%. And for people who make significantly more, it replaces far less. Let's zoom out for a second because there's a bigger economic question, right? I mean, what's the impact on the greater economy? The economic impact is significant. Significant, too. There is a lot of money sitting in 401ks. There's $20 trillion in IRAs, another $15 trillion in 401ks. There was a study done by the National Institute on Retirement Security a few years ago. And they looked at the billions of dollars that retirees received in pension benefits, $680 billion. And figured that as those retirees used that money for the spending that they had to do, that $680 billion turned into $1.5 trillion in economic impact. And so if you extrapolate that every dollar sitting in a retirement account roughly equals a little over $2 in economic activity, you've got well over $50 trillion of potential consumption. What advice do you have for people who are in retirement? do you have for people who are listening to this, who are approaching retirement? Maybe they're already there. Any tangible takeaways to help them enjoy this period? I think everyone should build what I call a forever paycheck. I just published a new book by that title. And essentially, it involves taking a chunk of your nest egg and converting it from assets to income, to a stream of income that you can count on for the rest of your life. It shouldn't be all your money. I think a forever paycheck should cover those things that you need, as well as the ones that you want so much that you're not willing to compromise on. Jean Chatzky is an author and journalist. She writes about money and personal finance. Jean, thanks again. Thanks for having me. As we were just talking about, retirement comes with a big mind shift. It's a marker that ends a lifetime of work. Or maybe not. Here's the latest installment of our series, Clocked Out. I'm Steve Miller, and I'm the owner and operator of Liberty Apple Orchard, a family-owned, pick-your-own orchard located in Illinois, just across the river from St. Louis. I retired from the corporate world at age 60 and view myself as perhaps an encore-preneur, one who follows up a career with a new entrepreneurial endeavor. You know, I really do believe that one should retire not from something, but rather to something. Lou Jean and I, we have four daughters. We have lived all over the country. We picked apples everywhere we went, and we wanted to have an opportunity to give that back to a community. We first had to find land that we could afford and that would be suitable for an apple orchard, and then we started planting trees. And that takes about four to five years for them to mature. So it was not until 2013, the day after I actually retired from the energy industry, did we open Liberty Apple Orchard. Running this orchard, it is very different than traditional corporate world. It's a lot of good old-fashioned trial and error, and we've made our share of errors and learned from those. As an example, we planted too many of a certain variety, a beautiful apple called Enterprise, great apple, but they ripen too late in the season, and there's not enough people to pick them. So live and learn. But the other thing to remember is a lot of it is similar. You have the same financial statements, an income statement, a balance sheet, cash flow statement. There's just a lot less zeros after the numbers. Lou Jean: Yeah, absolutely. I mean, it's just a lot less zeros after the numbers. This is our 14th season. We have been profitable for a number of years, but it takes a long time to get the word out. And maybe it's finally getting there, but it's not a big, big business, but it would actually support a family now. I'd never thought we'd have the opportunity to do this. There's considerable capital to get started, and we were fortunate to be able to have saved something over the years. So no, I don't think 30 years ago we would have thought we could do something this good, you know? We truly are blessed and very thankful for the opportunity. Lou Jean: Steve Miller, an encore-preneur and owner of Liberty Apple Orchard in Edwardsville, Illinois. We can't do this series without you. Maybe you started a new venture, maybe not. Tell us about your story about leaving the workforce at marketplace.org/clockedout. This final note on the way out today, we started the show with inflation, and we'll end with something that's related: household debt. The New York Fed released its latest report today on how much Americans owe. In the third quarter, credit card balances climbed to a new record, nearly $1.3 trillion. Balances are up more than 4% from a year ago. Total household debt, that includes mortgages, auto loans, and student loans, also hit a record of more than $19 trillion, and delinquency rates are up, too. Quoting Fed researchers here, "This does reflect financial hardship out there." Jordan Mangy, Zoneel Maharaj, Janet Wynn, Olga Oxman, and Virginia K. Smith are the digital team. I'm Kristen Schwab, and we'll see you here tomorrow. This is APM.