The other shoe

Inflation is the dominant story this week on Marketplace, but the episode also covers a surprising nutritional side effect of rising carbon dioxide, a look at adult education as a tool against the affordability crisis, and a dispatch on Brazil's solar transition. The tone is cautious: the strong jobs report from the previous week is treated as a temporary bright spot before what forecasters expect to be a painful inflation reading.

The Inflation Picture Turns Darker

The episode's central concern is the upcoming release of the April Consumer Price Index. Economists expect headline inflation to come in at 3.8% year-over-year, a sharp jump from 2.4% in February, before the Iran war began. Arun Sundaram at CFRA Research says he is expecting "the second straight extremely hot increase." The primary driver is energy, led by gas prices, but Jay Hatfield of Infrastructure Capital Advisors notes this is not a simple replay of the 1970s oil shock. "It's not just an energy price shock, but the closure of the strait is impacting a number of commodities exported out of the Middle East, so like aluminum, steel, and fertilizer," he says. So far, core inflation—the "second order effects" where higher transportation costs show up in food prices—has not fully materialized. Hatfield warns that later in the year, due to disruptions in refined products and fertilizers, "we're expecting anothe