Overview of "Chips up, rent down, and are people really skimping on holiday gifts?"
This episode of The Indicator from Planet Money (NPR) covers three quick economic stories: a dramatic recent spike in memory (RAM/DRAM) chip prices driven by AI/data‑center demand; conflicting signals about holiday spending (Gallup survey vs. strong Black Friday/Cyber Monday online sales); and a small national decline in asking rents for new apartment listings driven by heavy new construction in some regions.
Key takeaways
- Memory (RAM/DRAM) chip prices have surged — roughly quadrupling in recent months — driven by data‑center and AI demand. Shortages and very long lead times to build chip fabs create volatile, boom‑and‑bust price swings.
- Gallup respondents reported plans to spend an average of $778 on holiday gifts, a $229 drop in planned spending from October to November (the largest month‑to‑month decline Gallup has recorded). Yet Adobe reported record online Black Friday ($~12B, +9% YoY) and higher Cyber Monday sales (+7% YoY), suggesting planned budgets and actual spending diverge — possibly with higher‑income consumers driving spending.
- National average asking rents for new apartment listings are down 1.1% year‑over‑year (apartmentlist.com). The decline is uneven: some Sun Belt markets (e.g., Austin, parts of Texas, Louisiana, Florida) show notable drops due to lots of new construction, while big city rents (San Francisco, Chicago, St. Louis) are still rising ~4–5%.
Indicators explained
1) RAM/DRAM price spike
- What happened: Prices for memory chips have risen sharply — reportedly about 4x in months — causing retailers to remove posted price tags and quote prices on demand.
- Why: Strong demand from AI/data‑center buildouts combined with the long lead time (years) to construct new memory‑chip fabs. The RAM market is historically cyclical; previous overbuilding caused crashes in prior cycles.
- Analogy: Similar dynamics to industries with long production lead times (e.g., Christmas trees, oil, beef).
2) Holiday spending — survey vs. actual sales
- Gallup: Average planned holiday spending = $778; planned spending dropped $229 from Oct→Nov (largest Gallup drop recorded).
- Adobe: Black Friday online sales ≈ $12 billion (+9% YoY); Cyber Monday online spending +7% YoY.
- Interpretation: People report cutting budgets but still respond to sales; spending may be concentrated among higher‑income shoppers (a K‑shaped recovery pattern).
3) Rents and construction
- ApartmentList: Asking rents for newly listed apartments down 1.1% YoY nationally.
- Regional pattern: Declines concentrated in Sun Belt markets with active permitting and construction (Austin highlighted). Some large city markets still seeing rent increases.
- Cause: Surge in apartment construction — 2024 had the most apartment completions nationally since the mid‑1980s — increasing local supply and easing upward pressure on rents.
Notable quotes and lines
- “They’re selling RAM like it’s the catch of the day.” — describes how retailers now quote RAM prices on request.
- Gallup’s Oct→Nov drop in planned holiday spending is “the biggest drop Gallup has ever recorded.”
- “It’s almost as if the more homes you build, the lower the prices get.” — a rhetorical nod to basic supply‑and‑demand working in housing markets.
Data & sources cited in the episode
- Memory chip market behavior and price moves (industry reporting / Planet Money coverage).
- Gallup survey on planned holiday spending.
- Adobe analytics on Black Friday and Cyber Monday online sales.
- ApartmentList (rent listings); similar patterns noted on listing services (Zumper) and Realtor.com; property analytics firm cited for single‑family rent trends.
- Construction context: 2024 apartment completions — most since 1986 (as cited in the episode).
Implications and takeaways for listeners
- Tech purchasers: expect volatile pricing on memory components in the near term; budgeting for computer/parts purchases may be harder because prices can change quickly.
- Holiday shoppers: reported plans may not reflect actual behavior — sales and income differences matter; higher‑income shoppers likely propped up strong online sales.
- Renters and landlords: location matters — renters in Sun Belt markets may see relief as new supply arrives, while renters in some major cities still face increases; landlords in high‑supply areas may face downward pressure on asking rents.
Produced by NPR’s The Indicator (Planet Money).