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On the program today we will do our usual Friday thing. We'll talk small business and global inflation as well and we'll end with grey water.

From American public media, this is Marketplace.

In Los Angeles, I'm Kyle Rizal. It is Friday. Today this one is the 30th of June. Good as always to have you along. Everybody end of the week, end of the first half of the year.

We have got some things to talk about. Nila Richardson's at ADP Lynette Lopez is at business insider. Hey you too.

Hi Kyle. Nila let me start with you. I'm going to start with personal consumption expenditure. I'll say that slowly. Personal consumption expenditure. I don't know, a little hopped up this morning this afternoon.

PCE the Fed's favorite measure of inflation. 3.8% in May from a year ago that is way down from where it was at the beginning of the year. Discuss.

Yeah, it's way down from where it was at the beginning of the year and that's good news.

Headline inflation is down. The Fed's issue is not headline, which is wrapped up with food and energy prices, which tend to be volatile. It's core.

Core inflation is down just a smidgen from the previous month. It's at 4.6% in May, but it's not coming down fast enough to be consistent with where the Fed wants to go.

And that's because of services. People are still spending a lot of money and services, even though spending overall starting to flatline where they are spending.

It's restaurants, it's bars, it's leisure, it's hospitality. We all need a break. We want to do fun stuff. And so services, you're still seeing inflation there.

The thing about service inflation that the Fed's worried about is it's trickier to have an impact on through interest rates. So this is the issue that they're not done with inflation yet.

Do you suppose, Lynette, that Jay Powell regrets skipping this meeting and he had wished sort of that he kept it up because now he's having to answer questions. We'll get to this later on in the session here, but now he's having to answer questions about well as every meeting a live meeting and one wonders whether he's thinking, God, I should have just raised last time and be done with it.

I don't know what kind of a constitution he has for annoying questions. But the reality is like, I do understand Powell's sense that everybody's complaining about how fast we just raised interest rates, you know, 5% in about a year.

Now he's saying, okay, we're going to raise them more slowly and suddenly everybody's like, wait, why would we slow down? It's like, oh, well, because raising rates so fast, we thought was going to throw the economy into recession. And now we're just making sure that that's not the situation it is.

It's still might be the situation we're in because we still haven't beaten inflation, but not yet. Our consumption and expenditure, it still shows that there's life in the American economy and people still have some cash and they want to go do things.

And the labor market's still tight, the housing market's rebounding like, you know, the American economy is stronger than anybody had expected. So yes, I'm sure he's going to have some annoying questions about the rate at which he is going to continue raising interest rates.

But that's still it. He's still raising interest rates. It's just the rate, the pace of raising interest rates at his chain.

Neil, let me ask you this though, right? As as Lynette pointed out, the economy is doing well. We learned this this week that that final numbers on GDP for the first quarter, up 2% right 2% growth, which is, which is really solid last last month's jobs report was 339,000 new jobs. How do you get from here to recession?

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