Happy Friday! In this week’s newsletter we’ll learn:

As always, I’d love to hear about what you like (or don't like) about this newsletter. Click on my name to find my email address. If you learned something new this week, do me a favor and forward it to a friend! — Tony Wagner, newsletter editor

The cattle herd in the U.S. right now is the smallest it has been since the early 1950s.

That's tough on consumers, of course, because the tight supply has been driving double-digit inflation when it comes to the price of beef.

It's also proving to be a problem for meatpackers — the companies that turn cows into steaks and roasts and burgers. Smaller herds mean fewer hooves walking into slaughterhouses. This year, a handful of packing plants have closed — one in Nebraska and another in Wisconsin. And last week, Tyson announced that it'll be closing a plant in Illinois.

David Anderson, professor of livestock and food product marketing at Texas A&M University, remembers visiting a meatpacking plant in high school.

The personal consumption expenditures index for July, out next week, will be the last PCE report of its kind.

The Bureau of Economic Analysis is adjusting how inflation is calculated — a curious change coming at a critical time, as the Federal Open Market Committee becomes increasingly divided about how to get inflation down to its 2% target.

The BEA does regularly reevaluate its PCE methodology. And it’s not uncommon for the agency to make changes in the fall.

“BEA is revising its recipe based on how the world is changing,” said Munseob Lee, an economist at the University of California, San Diego.

For instance, the BEA is adjusting how computer software and accessories are calculated because demand for AI has sent prices soaring. It’s also making changes to investment and legal services categories.

“I believe this change is going to make the PCE more accurate, giving a clearer picture to central bankers,” said Lee.

So where do economists expect the inflation rate to go?

At an iconic lot in Hollywood, there’s a new studio in town that wants to change the way you watch everything.

Chris Crema and Matthew Ko are the guys behind Knockout Shorts, a short form, vertical video studio in Los Angeles. “Marketplace” host Kai Ryssdal visited Sunset Las Palmas Studio to hear about their vision for the future of entertainment.

“These are my babies, so I'll try not to be a salesman on them,” said Crema, who led the tour. Knockout designed these sets with financing from Sunset Studios. There’s an apartment, restaurant, hospital room, office, and courtroom.

“So for this, it's like why couldn't you have a “Judge Judy” in the vertical space using this courtroom?” Ko said.

Knockout Shorts makes microdramas, also called verticals or shorts. Simply put, they’re television shows made to watch on your phone. Each episode is one to two minutes long, and a series runs anywhere from 50 to 100 episodes. Most of Knockout’s shows can be found on the streaming apps like DramaBox.

So far, Knockout has produced 10 shows in the year or so they’ve been a studio. They’re hoping to ramp up production this year.

"Standing sets means that this will not move. No one will take it down. It will basically live here permanently in this setup,” explained Crema. “Production designers and teams can come in if they want to paint the walls, if they want to add stuff. That's great, but at the end of it, they have to reset it back. So basically, in theory, someone could come the next day.”

They may look like traditional Hollywood sets, but standing sets are plug-and-play. They’re fully furnished and rigged with lighting. Crews don't have to hire set designers or buy props, they can just come in and start shooting.

The lot, Sunset Las Palmas Studios, has a long and storied history. 

Listen to "Faceshopping" on YouTube | Apple Music | Spotify

There’s one more twist to the microdrama story.

We mentioned China is ahead of the U.S. in this market, cranking out a mind-boggling amount of shortform content aided by artificial intelligence. According to RestofWorld, the need for fresh faces has given rise to marketplaces where regular people allow their likeness to be licensed for AI content.

A typical deal can pay anywhere from $15 and $700, but come with little control over where your face could end up in the future. At least these folks are getting paid; years ago, we met a professor in New York who had been deepfaked on Chinese social media countless times from a single interview.