Is the US getting too expensive? U.S. and Iran hold informal talks: 5 Things podcast
On today's episode of the 5 Things podcast: Is the US getting too expensive?
Paste BN Reporter Terry Collins explains why Americans' frustration is growing over the economy. Plus, Paste BN Economics and Jobs Reporter Paul Davidson looks at what economists say about 'Bidenomics,' the U.S. and Iran hold informal talks over a new agreement, human remains were likely recovered from the Titan submersible wreckage, and Madonna has been hospitalized with a serious infection.
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Hit play on the player above to hear the podcast and follow along with the transcript below. This transcript was automatically generated, and then edited for clarity in its current form. There may be some differences between the audio and the text.
Taylor Wilson:
Good morning. I'm Taylor Wilson and this is 5 Things you need to know Thursday, the 29th of June 2023. Today, we look at whether the US has gotten too expensive to live in. Plus economists assess "Bidenomics" and whether the policies have worked for Americans, and the US and Iran have informal talks over a new agreement.
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As we head into the 4th of July holiday, the reporting team at Paste BN wanted to give our audience a kind of state of the nation report card. We looked at issues around the country, gun violence, racism, democracy, and we asked how are we doing. Our first story comes from reporter Terry Collins, on the cost of living. Has America gotten too expensive? Thanks for joining us on 5 Things, Terry.
Terry Collins:
Thanks for having me.
Taylor Wilson:
So let's start here. What is America's economic state right now and how do Americans feel about it?
Terry Collins:
You can put it in two words, frustrating, uncertain. I think as we're going through right now this current cycle, many are feeling fiscal pain as prices of food, shelter, healthcare, and transportation are climbing higher than our paychecks. For example, 52% of Americans participating in the Paste BN-Suffolk poll said the US is too expensive to live in. Seven in 10 Americans said stipend inflation in the economy are the nation's top problems currently, according to a Pew Center survey. And it's across the board through age, race, gender. It's a very big problem.
Taylor Wilson:
Yeah, I'm happy you brought up inflation. Looking at that specifically, do economists feel like things are in a healthy place on inflation?
Terry Collins:
No. No. No, I think there's this healthy debate. While the economy is resilient and there's strong job growth and wage growth, the Federal Reserve is looking to reduce inflation down to 2%. It's currently now at 4%. So you have these two things going on bumping heads with each other like rams. It's causing a lot of frustration. For example, a typical American household is spending about $768 more on goods and services than they did compared to 2020, according to Mark Zandi, chief economics at Moody's Analytics. In another stat, there's about 25 million Americans that are behind on their credit card, loan payments, and auto loans, according to Moody's and Equifax. So the economy, it's struggling and inflation has a lot lot to do with that.
Taylor Wilson:
And Terry, the job market has been relatively hot this year. Does that ease Americans' concerns at all?
Terry Collins:
Slightly. Folks have jobs, they're able to pay their bills. It's a relative comfort for those who are working. In my story, Patrice Stinney of Goodyear, Arizona, she's working three jobs just to make ends meet, and she says that she's still struggling. For example, she had to give up her apartment of four years because she was going to experience nearly double a rent increase, and so she moved in with family.
Taylor Wilson:
And many first time homeowners are struggling to buy houses. What's the outlook for the US housing market?
Terry Collins:
Well, right now, housing demand remains high, but there's low supply. The market is cooled since the 2020 pandemic boom because of high 6% mortgage rates and of course inflation. As we see homeownership as a additional way to generate wealth, we have some fears over the banking industry instability, increasing job layoffs, which is happening even though there's strong job growth, and of course our concerns about a possible recession.
Taylor Wilson:
And Terry, at the end of your piece, you ask if there are brighter days ahead for the US economy. Do you have any glass half full perspective for us?
Terry Collins:
There could be better days ahead. The recent University of Michigan's Consumer Sentiment Index rose to nearly 64% this month compared to about 60 last month at the time that the lowest level since November. Consumer sentiment, which is how we feel about our finances and the economy and what businesses use to gauge whether we like them or not, is about 28% above the historical low from a year ago, and its upward trajectory might climb. But overall, sentiment remains low and as many of us still feel that there's more difficult times ahead.
Taylor Wilson:
All right, Terry Collins, thanks so much.
Terry Collins:
Thanks, Taylor.
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Taylor Wilson:
Despite concerns from many Americans, the Biden White House has touted its economic strategy as one that's good for American's pocket books. And in a speech yesterday, President Joe Biden himself said his policies, which the administration has dubbed as "Bidenomics," have boosted the economy. But do economists agree? I spoke with Paste BN Economics and Jobs Reporter Paul Davidson to find out. Thanks for hopping on 5 Things, Paul.
Paul Davidson:
Thanks for having me. Taylor.
Taylor Wilson:
The Biden administration passed a huge COVID relief bill, but that wasn't the first one. The Trump administration passed two bills first. What are Biden's critics saying about the relief passed during his time in office?
Paul Davidson:
I think critics, certainly a lot of Republicans, feel that the first COVID relief measure was absolutely needed. We were in a dire place. 22 million people had gotten laid off, small businesses were closing left and right, and that measure was clearly needed. That happened under the Trump administration. The second one, there was still support for it, but some people felt even that one maybe went a little far. So we already have had $4 trillion roughly at stimulus in 2020. Now comes March, we're starting to get out of the pandemic, vaccines are coming. President Biden spearheaded and Congress passed a final third $2 trillion COVID relief measure that there was a lot of controversy about. Republicans generally opposed it. People felt it was overkill. President Biden and many Democrats felt it was necessary that we were still sort of teetering a little bit coming out of the pandemic recession, but still very vulnerable. People just felt this was running up the deficit even further in the order of trillions of dollars and that we didn't need it.
Taylor Wilson:
Paul, the Biden White House has pointed to policies that they say boost the middle class. Do economists agree?
Paul Davidson:
I don't think economists necessarily disagree. Biden has been a very strong proponent, for example, of unions and promoting unions and almost resuscitating unions, which have really been in decline. He also wants to do a lot of training, apprenticeships and other things that help low wage workers so they can get better jobs. They don't have to be professional jobs, but they can be jobs in factories, other types of jobs that are still well paying. The other way he believes he's promoting the middle class is if you look at the current job market we've had, which is a very hot job market, lots of demand for workers partly because of that bill we were just talking about that pumped a lot of money into people's pockets in the economy that spurred more consumer demand at a time when a lot of Americans had left the labor force because of COVID. People were either out caring for kids or they were leery of working again.
And so you had sort of a lot of demand and not that much supply of workers. That, maybe you could say helped spur a little inflation, but it also was good for workers. It pushed up wages. And it particularly pushed up wages, for example, for low wage workers, restaurants, retail jobs, warehouse jobs, all those are middle class jobs. So I think that also falls into the category of where he says he's really bolstering middle class. Those workers actually end up getting the biggest pay raises during that period. So that's another way he says he's bolstering the middle class. I don't think economists disagree that he's doing things to accomplish that. I think they would take issue with how he's doing it. Critics on the Republican side want to sort of rely on the market more and not so much pumping money in, that ended up in some people's view leading to inflation.
Taylor Wilson:
So Paul, the Biden administration clearly cares enough to have him highlight some of these points you just talked about in recent days. How big of an issue will this be in the 2024 election?
Paul Davidson:
I don't see how it could not be a very big issue. People rate the economy as their number one issue, but especially now with inflation as high as it's been. A lot of talk about recession coming, but certainly there's no doubt that that stimulus measure that Biden sort of led, led to a very vibrant economy. The problem for him is inflation is very visible. So these are things that really hit people in their pocketbook, they see every day. So he's trying to counter that perception that people have where only a-third of Americans think he's doing a good job handling the economy. So I think it will be a core debate.
Taylor Wilson:
Paul Davidson covers economics and jobs for Paste BN. Thanks so much, Paul.
Paul Davidson:
Sure.
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Taylor Wilson:
It's been five years since then President Donald Trump pulled the US out of a nuclear deal with Iran and other countries. And Washington and Tehran may be on the verge of a new agreement that encompasses Iran's pursuit of nuclear weapons, prisoners swaps, and regional cycles of violence, according to officials familiar with the matter. US officials deny that a new deal is being negotiated with Iran, but two Iranian officials and one Israeli official told Paste BN that the US and Iran are on the brink of an informal agreement aimed at improving relations and deescalating regional tensions. The agreement would not amount to a resumption of the 2015 deal that Trump pulled out of, but it would limit Iran's uranium enrichment activities to below a level needed to make a nuclear weapon, and it would free Americans imprisoned there who the US says are wrongfully detained. Iran would also agree to stop attacks by militant groups it supports in Iraq and Syria. In return, the US would stop adding new sanctions and would unfreeze billions of dollars of Iranian assets.
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Human remains were likely recovered from the Titan submersible wreckage. The US Coast Guard made that announcement yesterday, a week after five people aboard the sub were presumed dead after a catastrophic implosion. US medical professionals will now conduct an analysis of the presumed remains. The announcement came as debris from the destroyed vessel returned to land yesterday in Newfoundland Canada. Photos showed what appeared to be several pieces and twisted chunks of the submersible. Search and rescue teams found debris on the sea floor about 1,600 feet from the bow of the Titanic shipwreck four days after the sub looking for the Titanic went missing.
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Madonna has been hospitalized with a serious bacterial infection. Her manager wrote that she developed the infection on Saturday and spent several days in the intensive care unit. She's expected to make a full recovery, but will be postponing her upcoming celebration tour as she recuperates. That was scheduled to start on July 15th in Vancouver with US stops ranging from San Francisco to Washington, DC. A new start date and rescheduled shows will be announced soon.
Thanks for listening to 5 Things. If you like the show, please subscribe and leave us a rating and review on Apple Podcasts. And if you have any comments, you can reach us at podcasts@usatoday.com. I'm back tomorrow with more of 5 Things from Paste BN.