Consumer spending holds strong

Consumer spending growth did pretty well in the second quarter, even when you take out the impact of higher gasoline prices and the one-time effects of the World Cup and the fact that Prime Day moved up from July to June this year. We continue to see consumers increase their spending. It's growing at a good pace a little bit above the rate of inflation. And that's true whether we're talking about upper-income consumers or lower-income consumers. So households across the spectrum appear to be increased. increasing their spending, which is good news for economic growth heading into the second half of the year. Gus Foshae, chief economist at the PNC Financial Services Group. Thank you so much. Thank you. The Marketplace Morning Report podcast is supported by three-day blinds. We shop for everything at home now. Why can't we shop for blinds at home, too? We can now with three-day blinds. Instead of wandering around a store, three-day blinds, sends a professional design consultant straight to you. They bring all the samples, help you see what actually works in your space, take expert measurements, and even handle the installation. We've all bought something that look great in store and terrible once we got at home. With three-day blinds, you see... everything in your actual light with your actual furniture before you commit. Plus, whether you're at home or away, you can control your window treatments with the three-day blinds app. So for a free, no charge, and no obligation consultation, head to three-dayblinds.com slash morning for our buy one, get one, 50% off deal. That's the number three, D-A-Y, blinds.com slash morning. This podcast is supported by Dell. Back to School starts now. Get long-lasting battery life on the Dell XPS laptop powered by Series 3 Intel Core so that you can work from anywhere. Now starting at $699, with exclusive student pricing starting at $599, and it's lightweight, portable, and packed with enough processing power to make multitasking a breeze. So, say goodbye to distractions and hello to more free time, because you finished your work faster. Complete your setup with savings on select monitors and more must-have electronics and accessories. Limited time deals and free shipping on PCs and more await you at Dell.com slash deals. That's dell.com slash deals.

The Trump administration has announced that it will not renew a major trade deal between the U.S., Mexico, and Canada. This is the U.S.MCA, the United States-Mexico-Canada agreement. It was negotiated during President Trump's first term to replace NAFTA. The agreement isn't disappearing. It'll stick around for the next decade, but everyone involved will need to negotiate new trade deals all over again. That carries very high risks for one industry in particular. autos, which represents about 18% of trade between the three countries. For more on that, we are joined by Patrick Anderson, CEO of Anderson Economic Group. Good morning. Good morning to you. The USMCA, according to the Trump administration, won't be renewed. It wants different, new trade deals. What is the risk there to the U.S. auto industry? The threat here to not renew the USMCA is a very significant one for the auto industry, and it's an existential one for the Canadian and Mexican auto industries, which have been integrated with the United States all the way back to the 1960s in an agreement called Autopact, which preceded NAFTA, which preceded the USMCA. So it is a very big deal for these. all these suppliers, all these businesses, all the transport businesses in Canada and Mexico, as well as in the United States. This kind of comes down to what cars or what parts of cars get what tariffs based on where they are from, determined by something called Rules of Origin. Can you explain what that is and what the Trump administration wants to change about it? It's not uncommon for there to be a park that's built in Canada that goes across the Detroit River into somewhere in Michigan, gets put in a larger assembly, goes back across. So you have parts that go back and forth across the border two and three times and even more. And the question of, hey, where's that car built is never an easy answer when you're looking at a vehicle from an American automaker here. The rules of origin are very technical items. You hardly ever see them in the newspaper, but they matter a lot for trade between the United States and Canada, and they're really important for the auto industry. If automakers had to move more production back to the U.S., how difficult and how expensive would that be? The answer is they're already doing it. There was $12.5 billion in auto tariffs. applied on Canadian and Mexican parts and automobiles alone in 2025. So $12.5 billion is a lot of reasons for automakers and suppliers to look for ways to reduce the tariff costs. What hasn't occurred and what I hope doesn't occur is a wholesale separation of the industry, meaning basically you create a wall or effectively a wall. Because that would hurt both the United States and Canada and Mexico. There are a lot of auto production in the United States that depends on high quality, reasonable cost parts that are assembled in Canada and Mexico and vice versa. So we in the United States have a lot to lose if we don't come to a negotiated agreement and renew something like the USMCA.