AI Summary
5 min readInflation held steady in August at 3% on the core Personal Consumption Expenditures index — a number that landed lower than economists had guessed. But as Marketplace host Kai Rizdal and his team made clear, the relief was mostly cosmetic. The Bureau of Labor Statistics had changed how it calculates certain categories like computer software and investment services, which shaved a couple of tenths of a point off the headline figure. By the old methodology, inflation would have clocked in around 3.6 or 3.7%. As one economist put it, the report was like a flight that lands early but then sits on the runway forever: your arrival time ends up being the same anyway.
The bond market is sending a clear signal
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What you'll learn
- 1 (00:54) **Episode Introduction & Bond Yield Context** - Kai Rizdahl frames the show around the theme of money becoming more expensive for longer than expected, pointing to rising long-term bond yields.
- 2 (03:44) **August Inflation Data: A "Wash"** - The core PCE inflation index came in at 3% year-over-year, lower than expected, but economists say the details are less encouraging.
- 3 (05:53) **Fed Rate Path & Inflation Seasonality** - The markets and economists are betting the Fed will pause rate hikes in the current month but raise again in December, with a potential final hike in early 2026.
- 4 (06:16) **Treasury Secretary's "Grow Our Way Out" Claim** - Treasury Secretary Scott Bessent argued the national debt problem can be solved through 3% GDP growth, but a CFR expert challenges the math.
- 5 (09:28) **Political Will & The Path Forward on Debt** - The conversation turns to whether Washington is capable of addressing the debt problem.
- 6 (11:42) **Immigration Enforcement & The Construction Labor Crisis** - In South Texas, ICE raids and deportation fears are severely reducing the construction workforce, slowing homebuilding.
- 7 (14:27) **Industry-Wide Impact & A Family's Story** - The labor shortage is a national crisis, with 19,000 fewer homes built in 2024 due to the deficit, and the human cost is visible in separated families.
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Guests on this episode
Show Notes
The PCE price index (that's the Fed's preferred measure of inflation) held steady year-over-year in the latest report. Economists expected it to move up. So, why didn't it budge -- and why aren't we all celebrating? Also in this episode: Seasonal work is hard to find so far this fall, Trump's immigration crackdown weakens construction productivity in South Texas, and Kai explains the long-term implications of rising borrowing costs.
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Read the stories in today’s episode:
- The Fed's preferred inflation measure was lower than expected in August. Is that a good thing?
- Can the U.S. just grow its way out of debt?
- Immigration crackdown adds delays, costs to South Texas construction
- More people are looking for seasonal work this year. So far, it's hard to find
- There are more private security guards than police. How much are they paid?
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