Buy less, pay more?

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Marketplace

News, Business

4.8 • 1.3K Ratings

🗓️ 1 May 2025

⏱️ 11 minutes

🔗️ Recording | iTunes | RSS

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Summary

This week, President Trump acknowledged his tariffs were resulting in costlier items in the U.S., but maintained his position that China was taking the majority of the heat. If people can’t afford to buy as much, might that be a recipe for recession? We’ll discuss, and answer a listener’s question on what exactly is a recession. Plus, how uncertain economic conditions might make someone reconsider a luxury cheese purchase.

Here’s everything we talked about today:

- Recession defined by the U.S. Bureau of Economic Analysis (BEA)

- “Trump says US kids may get '2 dolls instead of 30,' but China will suffer more in a trade war” from the Associated Press

- WATCH: “Trump says kids may get '2 dolls instead of 30' because of trade war with China” from the Associated Press

- “Trump, on Tariffs, Says ‘Maybe the Children Will Have 2 Dolls Instead of 30’” from The New York Times

- “Spending by American companies on computers in Q1 grew at the fastest pace since 1983” by Marketplace

- Check out the Canadian cheese shop Kimberly mentions in this episode

Join us tomorrow for “Economics on Tap.” The YouTube livestream starts at 3:30 p.m. Pacific time, 6:30 p.m. Eastern.

Transcript

Click on a timestamp to play from that location

0:00.0	I am rolling.
0:08.1	Hello everyone. I'm Kimberly Adams. Welcome back to Make Me Smart, where we make today makes sense.
0:13.3	I'm Kyle Rizdahl. Thanks for joining us on the pod, everybody. Thursday, May 1. We are going to
0:17.8	play some audio clips today, but we are going to answer a very
0:21.5	pressing, pressing, pressing listener question. A lot of you had asked us about this of late,
0:27.1	and Rachel in Texas is the one whom we're going to name, and the question goes like this.
0:31.4	The term recession has been thrown around so often lately. Can you make me smart about how a
0:36.0	recession is truly defined? Also, who's the one
0:39.3	that actually declares recession in Michael Scott's bankruptcy voice? I didn't do the office,
0:44.6	so I don't know Michael Scott's bankruptcy voice, but, you know, maybe we're not. I feel like this is
0:48.8	your wheelhouse. You go ahead, Kai. All right. So, it used to be once upon a time, and not actually all that long ago, that it was two consecutive quarters of negative GDP growth. That is to say a shrinking economy for two quarters, six months. That is no longer the operative case. Now, in the past like decade or so, there is a group called the Business Cycle Dating Committee of
1:11.7	the National Bureau of Economic Research, which decides ex post, that is to say, after the fact,
1:17.3	when a recession started and when it ended. And their definition of a recession is significant,
1:24.1	widespread declines in economic activity lasting more than a couple of months. So significant is
1:29.8	obviously that self-explanatory. It's a big deal. It's rise in unemployment. It's slow down
1:33.9	in economic activity, right? It's people not buying stuff. Widespread across the economy throughout
1:39.2	many sectors lasting more than a couple of months. And they wait until the business cycle has troughed and
1:45.1	peaked again before they actually peaked and troughed before they explain what's going on.
1:52.8	By definition. Go ahead. Sorry.
1:54.5	Really lean into that widespread across many economic sectors because one of the things we saw
1:59.8	after the pandemic as we were sort of
2:01.8	climbing out of it we had little mini recessions in different sectors like where remember for a while
	...

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