Credit card delinquencies climb

**SPEAKER_1** (0:00)
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**Kai Ryssdal** (0:31)
This economy and the Chinese economy both shall be discussed. From American Public Media, this is Marketplace.
In Los Angeles, I'm Kyle Rizdall. It is Tuesday, today, 11 August. Good as it always is. Have you along, everybody. This is a big data week, as I think I said yesterday, inflation most particularly at the consumer and wholesale levels.
But that's for tomorrow. Today, we're going to sit back and take stock, and we're going to do it once again with Kyla Scanlon. She's an economics content creator, also an author as well. Kyla, great to have you back on.

**Kyla Scanlon** (1:18)
Thanks for having me.

**Kai Ryssdal** (1:19)
Let me throw you the easy one first. What's your sense right now of this economy?

**Kyla Scanlon** (1:23)
I mean, I think this economy is kind of confusing everybody. It's a bit confusing to figure out where the growth is coming from, if the growth is sustainable, if it's all AI driven, how much risk that might be injecting into the economy, sort of how spending is holding up, the labor market, inflation. I feel like there's definitely more questions and answers right now.

**Kai Ryssdal** (1:45)
All right, here comes another question. Which of those things are you most worried about?

**Kyla Scanlon** (1:49)
I think I'm pretty worried about some of the decisions that the Federal Reserve will have to make. The Fed always has a pretty tough job, but right now balancing between the labor market and the dynamics there, where entry-level hiring has had some issues, and then balancing inflation, where we're not really sure if prices are going to continue to tick up.
I just worry that the Fed is going to have some tough choices on their hands as we go into the end of the year.

**Kai Ryssdal** (2:18)
What's your sense of Chairman Warsh?

**Kyla Scanlon** (2:21)
I think that he has a hard job like every Fed Chair does. I think that the bond market made it pretty clear that they were a bit worried about credibility.
They were a bit worried about the lack of guidance from the Fed. The market and the Fed are so interlinked. So I think that he's trying to extract the Fed from the market a little bit, but that won't come without pain.

**Kai Ryssdal** (2:47)
New topic, young, younger people in this economy. You've written a lot about it. You've written a lot about how they don't really have much faith, about how they are gamifying it, right? Because nothing else seems to work. Talk about that for a little bit, would you?

**Kyla Scanlon** (3:01)
Yeah, I think that a lot of pieces have been pinned on what young people are doing. They're going to the gym more, they're traveling a lot, they're buying up a lot of little treats. I think people are trying to figure out exactly why that economic behavior is happening because it seems strange.
But in my opinion, I think all of these things are rational. I think when people look at the spending patterns of the younger generation where there is this lean towards little treats, so buying up the boo-boos, do buy chocolate lattes, whatever it may be, that spending is rational because they're putting off the bigger milestone spending like buying a house, having kids, because it feels further and further out of reach.

**Kai Ryssdal** (3:42)
You also keep going. What does that mean, you know, because these younger people will be in a position in five or 10 years where those decisions are going to affect the function of the overall economy, you know?

**Kyla Scanlon** (3:53)
Yeah, I mean, I think everybody has sort of internalized this sense of fear with AI.
And so I don't know if younger people, if anybody, honestly, is really thinking about, like, oh, in a couple of years, like, I'm going to have to be very responsible. I feel like there is some element of doomerism within the spending. I don't think it's all doom spending. I don't totally love that word. But I do think that for them, there is that sense of financial nihilism. It's like, well, why would I invest? Gen Z is saving at a pretty high rate. But why would I contribute to the traditional life path if it doesn't feel like it's in reach for me? I'm going to go and do these side hustles. I'm not going to work for a corporation. I'm going to develop a small business. It's not necessarily that traditional life cycle, life ladder that we typically might see.