How much is the AI data center buildout driving economic growth?

SPEAKER_1 (0:00)

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Kimberly Adams (0:25)

Just how much is building the infrastructure for AI driving our economic growth, and how parking rules affect housing access and city growth?

From Marketplace in Washington, I'm Kimberly Adams. Later this morning, we'll get a look at how much wholesalers were buying and selling over the summer. The Census Bureau will release its wholesale trade report for July, and that data could give us some insight into one of the big drivers of economic activity in the US right now, the build out of AI data centers. Marketplace's Henry Epp reports.

Henry Epp (0:58)

All the stuff needed to build data centers has really been driving the wholesale business for a couple years now, says Jason Miller at Michigan State University. Sales of electrical equipment, computers, and machinery have been really strong as companies build out the infrastructure needed to power artificial intelligence, and wholesalers inventories of those goods, and the stockpiles they have on hand have gotten a bit slim lately, Miller says.

Jason Miller (1:21)

And so right now, we're in sort of this period where inventories have to build up because sales have grown so much.

Henry Epp (1:28)

What he'll be watching for is whether there's any sign sales of data center equipment slowed down in July or whether those sales hit another record. There's reason to think they might have continued to grow because imports of computers and semiconductors into the US rose over the summer.

I'm Henry Epp from Marketplace.

Kimberly Adams (1:47)

Retailers rushed to buy goods ahead of new tariffs helped push the port of Los Angeles to a three-month volume record. The Ocean Container Port, which is the country's busiest, handled close to 100,000 units in August. This beat the port's previous record, which they reached during the COVID-19 pandemic. Items that came ashore include Halloween costumes, as well as winter holiday decor and gifts.

And earlier this morning, the Bureau of Labor Statistics released its monthly producer price index. It was up four-tenths of a percent in August. That gives us a look at inflation for wholesalers, and it's about what analysts were expecting. We'll get a read on consumer inflation tomorrow when the BLS releases its consumer price index for August.

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Kimberly Adams (3:46)

There's a housing shortage in America and communities all over are trying lots of different strategies to address it. Changes to zoning laws, tax incentives for builders, and changing rules around parking. In many places, housing developers are required to provide parking for residents and new projects. But in the face of that national housing shortage, many cities are deciding developers shouldn't have to.

The parking reform network has tracked more than 100 cities around the country that have eliminated minimum parking requirements for new construction. Marketplace's Amy Scott reports from Denver.

Amy Scott (4:21)

Drive through Denver's River North Art District, aka Rhino, and you'll see a lot of galleries, trendy restaurants and upscale apartment buildings with dedicated parking garages. Until a year ago, the city required that most housing developments include at least one parking space per unit.

Stefan Chavez-Norgard (4:41)

I think in a place like Rhino, where you have so much walkable stuff to do, I think there's a good question about how much parking you really need.

Amy Scott (4:51)

Stefan Chavez-Norgard is an assistant professor of public policy at the University of Denver.

Last year, the Denver City Council voted to eliminate minimum parking requirements for all new construction. Chavez-Norgard co-authored a study estimating the change could increase apartment building by nearly 13 percent. He says a single parking space can add $50,000 to the cost of construction and make it harder to fit projects on available land.